As filed with the Securities and Exchange Commission
on October 8, 2024
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM F-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
SOLOWIN HOLDINGS
(Exact name of registrant as specified in its charter)
Not Applicable
(Translation of registrant’s name into English)
Cayman Islands |
|
Not Applicable |
(State or other jurisdiction of
incorporation or organization) |
|
(I.R.S. Employer
Identification Number) |
Room 1910-1912A, Tower 3, China Hong Kong City
33 Canton Road, Tsim Sha Tsui, Kowloon
Hong Kong
+852 3428-3893
(Address and telephone number of registrant’s
principal executive offices)
Cogency Global Inc.
122 East 42nd Street, 18th Floor
New York, NY 10168
(800) 221-0102
(Name, address, and telephone number of agent for service)
Copies to:
Kevin (Qixiang) Sun, Esq.
Bevilacqua PLLC
1050 Connecticut Avenue, NW, Suite 500
Washington, DC 20036
(202) 869-0888
Approximate date of commencement
of proposed sale to the public: From time to time after this Registration Statement becomes effective.
If only securities being registered
on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. ☐
If any of the securities being
registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check
the following box. ☒
If this Form is filed to register
additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities
Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective
amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same offering. ☐
If this Form is a registration
statement pursuant to General Instruction I.C. or a post-effective amendment thereto that shall become effective upon filing with the
Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ☐
If this Form is a post-effective
amendment to a registration statement filed pursuant to General Instruction I.C. filed to register additional securities or additional
classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ☐
Indicate by check mark whether
the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.
Emerging growth company ☒
If an emerging growth company
that prepares its financial statements in accordance with U.S. GAAP, 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 7(a)(2)(B)
of the Securities Act. ☐
† The term “new
or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting
Standards Codification after April 5, 2012.
The registrant hereby amends this registration
statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which
specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities
Act or until this registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
The information in this
prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities
and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy
these securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION,
DATED OCTOBER 8, 2024
PROSPECTUS
SOLOWIN HOLDINGS
$200,000,000
Ordinary Shares
Preferred Shares
Debt Securities
Warrants
Rights
Units
and
2,960,000 Ordinary Shares Offered by the Selling
Shareholder
SOLOWIN HOLDINGS, a Cayman
Islands exempted holding company (“Solowin”), is not an operating company, but a Cayman Islands holding company with operations
primarily conducted by its wholly owned subsidiaries, Solomon JFZ (Asia) Holdings Limited (“Solomon JFZ”) and Solomon Private
Wealth Limited (“Solomon Wealth” and together with Solomon JFZ, “HK Subsidiaries”), each a limited liability corporation
incorporated in Hong Kong.
Solowin may offer, issue
and sell from time to time Ordinary Shares, $0.0001 par value per share (“Ordinary Shares”), preferred shares, $0.0001 par
value per share, debt securities, warrants, rights or units up to $200,000,000 or its equivalent in any other currency, currency units,
or composite currency or currencies in one or more issuances. Solowin may sell any combination of these securities in one or more offerings.
In addition, this prospectus
relates to the resale, from time to time, of up to an aggregate of 2,960,000 Ordinary Shares by the selling shareholder named in this
prospectus, including its donees, pledgees, transferees, assignees or other successors-in-interest. We will not receive any proceeds from
sales of the Ordinary Shares offered by the selling shareholder although we will incur certain expenses in connection with such offering.
The information contained
or incorporated in this prospectus or in any prospectus supplement is accurate only as of the date of this prospectus, or such prospectus
supplement, as applicable, regardless of the time of delivery of this prospectus or any sale of our securities.
Solowin’s Ordinary Shares are listed on
the Nasdaq Capital Market tier of The Nasdaq Stock Market LLC under the symbol “SWIN”. On October 7, 2024, the closing sale
price of Solowin’s Ordinary Shares on the Nasdaq Capital Market was $3.02. As of October 4, 2024, the aggregate market value of
outstanding Ordinary Shares held by non-affiliates was approximately $16.63 million based on 15,980,000 Ordinary Shares issued and outstanding,
of which approximately 4,980,000 Ordinary Shares were held by non-affiliates, and the last sale price of Ordinary Shares as reported by
the Nasdaq Capital Market of $3.34 per share on October 2, 2024, which was the highest closing price of Ordinary Shares reported on the
NASDAQ Capital Market within the last 60 days prior to the date of this filing. We have not sold any Ordinary Share pursuant to General
Instruction I.B.5 of Form F-3 during the prior 12 calendar month period that ends on, and includes, the date of this prospectus.
This prospectus describes some of the general
terms that may apply to these securities and the general manner in which they may be offered. Solowin will provide the specific terms
of the securities, and the manner in which they will be offered, in one or more supplements to this prospectus. Any supplement may also
add, update or change information contained, or incorporated by reference, in this prospectus. You should read carefully both this prospectus
and the applicable prospectus supplement, together with the additional information described under the headings “Where You Can Find
More Information” and “Incorporation of Certain Information by Reference,” before you invest in our securities. The
amount and price of the offered securities will be determined at the time of the offering.
The securities may be offered and sold in the
same offering or in separate offerings, to or through underwriting syndicates managed or co-managed by one or more underwriters, through
agents, or directly to purchasers. The names of any underwriters, dealers or agents involved in the sale of our securities, their compensation
and any option to purchase additional securities held by them will be described in the applicable prospectus supplement. For general information
about the distribution of securities offered, please see “Plan of Distribution” in this prospectus.
Investing in our securities involves risks.
You should carefully consider the risk factors beginning on page 12 of this prospectus, in any accompanying prospectus supplement and
in any related free writing prospectus, and in the documents incorporated by reference into this prospectus, any accompanying prospectus
supplement and any related free writing prospectus before making any decision to invest in our securities.
Solowin is a holding company incorporated in the
Cayman Islands. Solowin has no material operations of its own, and as of the date of this prospectus, substantially all of our operations
are conducted through the HK Subsidiaries. We do not have and have no intention to operate its business through a variable interest entities
(“VIE”) structure.
This holding company structure involves unique
risks to investors, and you may never directly hold equity interests in our operating subsidiaries. As of the date of this prospectus,
HK Subsidiaries’ operations in Hong Kong and our offering of the Ordinary Shares in the United States are not subject to the review
nor prior approval of the Cyberspace Administration of China (the “CAC”) or the China Securities Regulatory Commission (the
“CSRC”). However, we face various legal and operational risks and uncertainties associated with being based in or having operations
in Hong Kong, having clients who are PRC individuals or companies that have shareholders or directors that are PRC individuals and the
complex and evolving PRC laws and regulations. The legal and operational risks associated with operations in China will apply to HK Subsidiaries’
operations in Hong Kong, should recent statements and regulatory actions by the Chinese government apply to issuers based in Hong Kong
in the future. In that case, we will face risks associated with regulatory approvals on foreign investment in Hong Kong-based issuers,
anti-monopoly regulatory actions, oversight on cybersecurity, data privacy and personal information. The PRC government may also intervene
or impose restrictions on HK Subsidiaries’ ability to move cash out of Hong Kong to distribute earnings or pay dividends to Solowin
or U.S. investors. Furthermore, PRC regulatory authorities may in the future promulgate laws, regulations or implementing rules that require
us to obtain regulatory approval from PRC authorities before this or any future securities offering. These risks could result in a material
adverse change in HK Subsidiaries’ business operations and the value of the Ordinary Shares, restrictions in HK Subsidiaries’
ability to accept foreign investments, significantly limit or completely hinder Solowin’s ability to continue to offer securities
to investors or continued listing of the Ordinary Shares on the Nasdaq, or cause the value of such securities to significantly decline
or become worthless. See “Risk Factors — Risks Related to Doing Business in Jurisdictions We Operate” beginning
on page 30 of this prospectus for a discussion of these legal and operational risks that should be considered before making a decision
to purchase the Ordinary Shares.
Specifically, on February 17, 2023, the CSRC issued
the Notice on Filing Arrangements for Overseas Securities Offering and Listing by Domestic Companies, stating that the CSRC has published
the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies and five supporting guidelines (collectively,
the “New Overseas Listing Rules”). Among others, the New Overseas Listing Rules provide that PRC domestic companies seeking
to offer and list securities (which, for the purposes of the New Overseas Listing Rules, are defined thereunder as equity shares, depository
receipts, corporate bonds convertible to equity shares, and other equity securities that are offered and listed overseas, either directly
or indirectly, by PRC domestic companies) in overseas markets, either via direct or indirect means, must file with the CSRC within three
working days after their application for an overseas listing is submitted. The New Overseas Listing Rules came into effect on March 31,
2023. As of the date of this prospectus, we are not subject to the New Overseas Listing Rules because we do not own any PRC entity and
we are not deemed a “domestic company” as defined under the New Overseas Listing Rules. However, given that the New Overseas
Listing Rules were introduced recently, and that there remain substantial uncertainties surrounding the enforcement thereof, we cannot
assure you that, if required, we would be able to complete the filings and/or fully comply with the relevant new rules on a timely basis,
if at all.
Furthermore, as more stringent standards have
been imposed by the Securities and Exchange Commission (the “SEC”) and the Public Company Accounting Oversight Board (the
“PCAOB”) recently, Solowin’s securities may be prohibited from trading if our auditor cannot be fully inspected by the
PCAOB. Pursuant to the Holding Foreign Companies Accountable Act (the “HFCA Act”) enacted in 2020, if the auditor of a U.S.
listed company’s financial statements is not subject to the PCAOB inspections for three consecutive “non-inspection”
years, the SEC is required to prohibit the securities of such issuer from being traded on a U.S. national securities exchange, such as
NYSE and Nasdaq, or in U.S. over-the-counter markets. On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies
Accountable Act (the “AHFCAA”), which, if enacted into law, would amend the HFCA Act and require the SEC to prohibit an issuer’s
securities from trading on U.S. stock exchanges if its auditor is not subject to the PCAOB inspections for two consecutive “non-inspection”
years instead of three and thus, reduces the time before Solowin’s securities may be prohibited from trading or delisted. In December
2022, an omnibus spending bill was passed by Congress and later signed into law, which included the enactment of provisions under the
AHFCAA to accelerate the timeline for implementation of trading prohibitions under the HFCA Act from three consecutive years to two consecutive
years. Pursuant to the HFCA Act, on December 16, 2021, the PCAOB issued its determination that the PCAOB was unable to inspect or investigate
completely PCAOB-registered public accounting firms headquartered in mainland China or in Hong Kong, because of positions taken by authorities
in the jurisdictions, and the PCAOB included in the report of its determination a list of the accounting firms that are headquartered
in mainland China or Hong Kong. This list did not include our auditor, WWC, P.C., as our auditor is based in the U.S. and is registered
with the PCAOB and subject to the PCAOB inspection. On August 26, 2022, the CSRC, the Ministry of Finance of the PRC (the “MOF”),
and the PCAOB signed a Statement of Protocol (the “Protocol”) governing inspections and investigations of accounting firms
based in mainland China and Hong Kong, taking the first step toward opening access for the PCAOB to inspect and investigate registered
public accounting firms headquartered in mainland China and Hong Kong. On December 15, 2022, the PCAOB made a statement announcing that
it was able, in 2022, to inspect and investigate completely issuer audit engagements of PCAOB-registered public accounting firms headquartered
in mainland China and Hong Kong and as a result, PCAOB vacated its previous 2021 determination. However, uncertainties still exist as
to whether the PCAOB will have continued access for complete inspections and investigations in the future. The PCAOB has indicated that
it will act immediately to consider the need to issue new determinations if needed. While our auditor is based in the U.S. and is subject
to the PCAOB inspection, in the event the PCAOB later determines that it is unable to inspect or investigate completely our auditor, then
such lack of inspection could cause Solowin’s securities to be delisted from the U.S. stock exchange. See “Risk Factors
— Risks Related to Doing Business in Jurisdictions We Operate — The Ordinary Shares may be prohibited from trading in the
United States under the HFCA Act in the future if the PCAOB is unable to inspect or investigate completely auditors located in China or
Hong Kong. The delisting of the Ordinary Shares, or the threat of their being delisted, may materially and adversely affect the value
of your investment.” on page 32. In addition, we cannot assure you that Nasdaq or other regulatory agencies will not apply additional
or more stringent requirements to us. Such uncertainty could cause the market price of the Ordinary Shares to be materially and adversely
affected.
Subject to the Companies Act (As Revised) of the
Cayman Islands and Solowin’s amended and restated memorandum and articles of association, Solowin’s board of directors may
authorize and declare a dividend to shareholders at such time and of such an amount as they think fit if they are satisfied, on reasonable
grounds, that immediately following the dividend it will be able to pay its debts as they become due in the ordinary course of business.
For Solowin to transfer cash to HK Subsidiaries, Solowin may provide funding to HK Subsidiaries through loans or capital contributions
without restrictions on the amount of the funds. As a holding company, Solowin may rely on dividends and other distributions on equity
paid by HK Subsidiaries for its cash and financing requirements. Under Hong Kong law, HK Subsidiaries are permitted to provide funding
to Solowin through dividend distribution without restrictions on the amount of the funds under the condition that dividends could only
be paid out of distributable profits (that is, accumulated realized profits less accumulated realized losses) or other distributable reserves.
Dividends cannot be paid out of share capital. Under the current practice of the Inland Revenue Department of Hong Kong, no tax is payable
in Hong Kong in respect of dividends paid by HK Subsidiaries. HK Subsidiaries have not declared any dividends or made other distributions
to Solowin as of the date of this prospectus. In the future, cash proceeds raised from financings conducted outside of Hong Kong may be
transferred by Solowin to HK Subsidiaries via capital contribution or shareholder loans, as the case may be. As of the date of this prospectus,
neither Solowin nor any HK Subsidiary has paid any dividends or made any distributions to their respective shareholder(s), including any
U.S. investors. During the years ended March 31, 2024, 2023 and 2022, and during the subsequent period up to the date of this prospectus,
the transfer of cash between Solowin and HK Subsidiaries totaled approximately $957,000. This amount represented the repayment by Solowin
to Solomon JFZ for certain IPO related expenses paid by Solomon JFZ and advances made by Solowin to Solomon Wealth for its operations.
There has been no transfer of other types of assets between Solowin and HK Subsidiaries. HK Subsidiaries, which conduct our substantive
operations, maintain the cash. Currently, other than complying with the applicable Hong Kong laws and regulations, we do not have our
own cash management policy or procedures that dictate how funds are transferred. Neither Solowin nor any of the HK Subsidiaries currently
has plans to distribute earnings or declare cash dividends in the foreseeable future. We intend to keep any future earnings to finance
the expansion of HK Subsidiaries’ business. Any future determination related to our dividend policy will be made at the discretion
of our board of directors after considering our financial condition, results of operations, capital requirements, contractual requirements,
business prospects and other factors the board of directors deems relevant, and subject to the restrictions contained in any future financing
instruments.
There are currently no such restrictions on foreign
exchange or our ability to transfer cash or assets between Solowin and HK Subsidiaries. However, if certain PRC laws and regulations,
including existing laws and regulations and those enacted or promulgated in the future were to become applicable to HK Subsidiaries, and
to the extent our cash or assets are in Hong Kong or a Hong Kong entity, such funds or assets may not be available to fund operations
or for other use outside of Hong Kong due to interventions in or the imposition of restrictions and limitations on HK Subsidiaries’
ability to transfer funds or assets by the PRC government. Furthermore, we cannot assure you that the PRC government will not intervene
or impose restrictions on Solowin or HK Subsidiaries in their transferring or distributing cash within the organization, which could result
in an inability of or prohibition on making transfers or distributions to entities outside of Hong Kong. Any limitation on the ability
of HK Subsidiaries to pay dividends or make other distributions to Solowin could materially and adversely limit our ability to grow, make
investments or acquisitions that could be beneficial to our business, pay dividends to U.S. investors, or otherwise fund and conduct our
business. In addition, if any of the HK Subsidiaries incurs debt on its own behalf in the future, the instruments governing such debt
may restrict its ability to pay dividends. See “Prospectus Summary — Transfer of Cash Through Our Organization”
beginning on page 7, and “Risk Factors — Risks Related to Our Business and Industry — Solowin relies on dividends
and other distributions on equity paid by its subsidiaries to fund any cash and financing requirements Solowin may have, and any limitation
on the ability of its subsidiaries to make payments to Solowin could have a material adverse effect on our ability to conduct our business”
on page 27.
Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus.
Any representation to the contrary is a criminal offense.
The date of this prospectus is ,
2024
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS
This prospectus is part
of a registration statement that we filed with the Securities and Exchange Commission (the “SEC”), using a “shelf”
registration process. Under this shelf registration process, we may sell our securities described in this prospectus in one or more offerings
up to a total dollar amount of $200,000,000 (or its equivalent in foreign or composite currencies). In addition, under this shelf registration
process, the selling shareholder named in this prospectus under the caption “Selling Shareholder,” may offer or sell up to
2,960,000 Ordinary Shares in one or more offerings from time to time.
This prospectus provides
you with a general description of the securities that may be offered. Each time we, or the selling shareholder, offers securities, we
or the selling shareholder will provide you with one or more supplements to this prospectus that will describe the specific amounts, prices
and terms of the securities offered. The prospectus supplement may also add, update or change information contained in this prospectus.
This prospectus, together with applicable prospectus supplements and the documents incorporated by reference in this prospectus and any
prospectus supplements, includes all material information relating to this offering. Please read carefully both this prospectus and any
prospectus supplement together with additional information described below under “Where You Can Find More Information.”
You should rely only
on the information contained in or incorporated by reference in this prospectus and any applicable prospectus supplement. Neither we,
nor the selling shareholder, has authorized anyone to provide you with different or additional information. If anyone provides you with
different or inconsistent information, you should not rely on it. We or the selling shareholder takes no responsibility for, and can provide
no assurance as to the reliability of, any other information that others may give you. The information contained in this prospectus is
accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of securities described
in this prospectus. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities
in any jurisdiction where the offer or sale is not permitted.
You should not assume
that the information contained in this prospectus and the accompanying prospectus supplement is accurate on any date subsequent to the
date set forth on the front of the document or that any information that we have incorporated by reference is correct on any date subsequent
to the date of the document incorporated by reference. Our business, financial condition, results of operations and prospects may have
changed since those dates.
PROSPECTUS SUMMARY
This summary highlights
selected information that is presented in greater detail elsewhere, or incorporated by reference, in this prospectus. It does not contain
all of the information that may be important to you and your investment decision. Before investing in our securities, you should carefully
read this entire prospectus, including the matters set forth under the section of this prospectus captioned “Risk Factors”
and the financial statements and related notes and other information that we incorporate by reference herein, including, but not limited
to, our annual reports on Form 20-F and our other reports. Unless the context otherwise requires, the terms “we,” “our,”
“us,” “our company,” the “Company,” and similar references in this prospectus each refer to SOLOWIN
HOLDINGS, an exempted limited liability company incorporated in the Cayman Islands and its consolidated HK Subsidiaries.
Company Overview
Solowin is an exempted limited liability company
incorporated under the laws of the Cayman Islands on July 23, 2021. As a holding company with no material operations of its own, Solowin
currently conducts its operations primarily through its wholly owned subsidiaries, Solomon JFZ and Solomon Wealth, each a limited liability
corporation incorporated in Hong Kong. See “Our Corporate History and Structure” below for more information of our
corporate structure. Our total revenue was $4,291,000 for the fiscal year ended March 31, 2024, representing a decrease of $162,000, or
4% from $4,453,000 for the fiscal year ended March 31, 2023. The decrease in revenue was mainly driven by a decrease in revenue from corporate
consultancy services. We recorded loss from operations of $4,433,000 for the fiscal year ended March 31, 2024, compared to income from
operations of $1,288,000 for the fiscal year ended March 31, 2023, a decrease of $5,721,000 or 444%.
Solomon JFZ, one of our HK Subsidiaries, is one
of the few Chinese investor-focused, versatile securities brokerage companies in Hong Kong and it offers a wide spectrum of products and
services, spanning from traditional assets to virtual assets through its advanced and secured one-stop electronic platform. Solomon JFZ
currently is primarily engaged in providing (i) securities related services, (ii) investment advisory services, (iii) corporate consultancy
services and (iv) asset management services to customers. It is licensed with the HKSFC and a participant of the Hong Kong Stock Exchange
to carry out regulated activities including Type 1 (Dealing in Securities), Type 4 (Advising on Securities), Type 6 (Advising on Corporate
Finance) and Type 9 (Asset Management). Solomon JFZ strictly follows the requirements of the HKSFC for internal regulation and risk control
to maximize the safety of investors’ assets. It provides online account opening and trading services via its Front Trading and Back-office
Clearing systems, in conjunction with Solomon VA+ (– a highly integrated application accessible via any mobile device, tablet,
or desktop, all of which are licensed from third parties. With strong financial and technical capabilities, Solomon JFZ has been providing
brokerage services to global Chinese investors residing both inside and outside the PRC and institutional investors in Hong Kong and has
been recognized and appreciated by users and industry professionals.
Solomon JFZ’s trading platform allows investors
to trade over 10,000 listed securities and their derivative products listed on the Hong Kong Stock Exchange (HKSE), New York Stock Exchange
(NYSE), Nasdaq, Shanghai Stock Exchange and Shenzhen Stock Exchange. In addition, it provides Hong Kong IPO underwriting, Hong Kong IPO
Public Offer application and International Placing subscription, Hong Kong IPO margin financing services, Hong Kong Pre-IPO securities
trading and US IPO subscription. Hong Kong IPO margin financing services refer to loans offered by a licensed financial institution to
clients for the purpose of purchasing securities in an IPO before the issuers are listed on the Hong Kong Stock Exchange. The loan, commonly
referred to as an IPO loan, enables clients to invest more than the required deposit of 5% or 10% of funds. The loan, which is short-term
and interest-bearing, typically covers 90% or 95% of the investment amount and is repaid right after the allotment result release. Once
the investor is allotted shares costing over the required deposit and a part of loan is used for the shares, the shares can be sold and
the proceeds are utilized to repay the loan of the financial institution, with any remaining balance going to the investor. Our customers
may also use Solomon JFZ’s platforms to trade various listed financial products, such as ETFs, Warrants and Callable Bull/Bear Contracts.
Besides securities related service, Solomon JFZ also offers asset management services as an investment manager. Our High-Net-Worth customers
may also subscribe to private fund products through Solomon JFZ.
Our clients are mostly Chinese investors residing
in Asia as well as institutional clients in Hong Kong, Australia and New Zealand. We classify those who have registered on Solomon JFZ’s
platform as users and the users who have opened accounts on Solomon JFZ’s platform as clients. As of March 31, 2024, we had more
than 15,500 clients who had opened trading accounts with Solomon JFZ and over 1,200 active clients who had assets in their trading accounts.
As of March 31, 2024, Solomon JFZ’s operations
mainly consisted of four business segments: (i) securities related services, (ii) investment advisory services, (iii) corporate consultancy
services and (iv) asset management services to customers. The following summary describes the products and services offered in each
of the reportable segments:
| ● | Securities Related Services.
We always believe that our clients deserve a more convenient and reliable way to invest and manage their money, and Solomon JFZ
uses advanced Internet technology to provide investors with faster brokerage services. Solomon JFZ provides securities related services
through Solomon VA+. Its professional securities brokerage network offers the clients access to multiple stock exchanges, including
the HKSE, NYSE, Nasdaq, Shanghai Stock Exchange and Shenzhen Stock Exchange. It provides HKSE securities trading, IPO subscription and
placement services, bond trading, fund subscription, equity custodian and agent services, investment immigrant account management services,
enterprise employee shareholding exercise services, professional investment research services, and instant quotation service. Solomon
JFZ charges brokerage commission fees to clients for trades made using its trading platform based on the transaction amount, subject
to a minimum charge per transaction. To better serve the individual needs of the clients, Solomon JFZ may vary the commissions it charges
based on the types of products or services, eligibility for discounts and other factors. For fund subscription, it charges clients with
the fund subscription fee based on the subscription amount. Solomon JFZ also offers stock custodian and nominee services to the clients
as ancillary services to securities related services. For the fiscal years ended March 31, 2024, 2023 and 2022, the securities related
services segment accounted for 10%, 14% and 68% of our consolidated revenues, respectively. |
| ● | Investment Advisory Services.
Solomon JFZ provides timely, accurate and valuable investment solutions advisory services for our clients, through a team consisting
of financial analysts, experienced financial advisors and investment managers. It provides investment advice to our clients based on
their financial needs and risk appetite, and Solomon JFZ charges them an investment advisory fee based on a percentage of the AUM. For
the fiscal years ended March 31, 2024, 2023 and 2022, the investment advisory services segment accounted for 67%, 56% and 22% of our
consolidated revenues, respectively. |
| ● | Corporate Consultancy
Services. Solomon JFZ possesses the licenses issued by HKSFC to carry out regulated activities under Type 6 Advising on Corporate
Finance. Type 6 license allows brokers to conduct activities relating to (i) acting as a sponsor of a listing applicant in an initial
public offering; (ii) advising on the code on takeovers and mergers and share repurchases; and (iii) advising listed companies on the
HKSE Listing Rules. Although Solomon JFZ Type 6 licensing condition restricts Solomon JFZ from acting as a sponsor of a listing applicant
in an initial public offering and advising on the code on takeovers and mergers and share repurchase, it can conduct businesses related
to (iii) above. It provides financial and independent financial advisory services for unlisted and listed companies that are looking
for high-quality and value-added corporate finance advisory services at reasonable costs. Solomon JFZ acts as financial adviser to its
corporate clients advising them on the terms and structures of proposed transactions and the relevant implications and compliance matters
under the HKSE Listing Rules (including the Main Board and the Growth Enterprise Market “GEM”). In addition, it acts as independent
financial adviser giving opinions to the independent board committee and independent shareholders of listed companies in Hong Kong. Solomon
JFZ charges them advisory fees according to the type and size of the transaction, duration of the engagement, complexity of the transaction
and the expected manpower requirements. For the fiscal years ended March 31, 2024, 2023 and 2022, the corporate consultancy services
segment accounted for 3%, 21% and 0% of our consolidated revenues, respectively. |
| ● | Asset Management Services.
Our asset management team specializes in designing investment portfolios to meet the needs of investors with different risk appetite
and to preserve and enhance the value of their assets. Solomon JFZ provides asset management services by applying different investment
strategies to optimize their asset allocation. Solomon JFZ offers its own Fund products to professional investors, which are run by professional
portfolio managers. It has entered into agreements with regulated financial institutions to provide services covering a broad range of
products such as stocks, bonds, indexes, futures, and fund of funds. It issues and manages various fund products according to market
trends and demand conditions. At this stage, Solomon JFZ focuses on developing active traditional private equity funds, such as balanced
funds and equity funds, and plans to develop a more diversified product line as part of our long-term growth initiative. Solomon JFZ
charges a management fee of 2% according to the AUM. In addition, it charges performance fees subject to high water marks. For the
fiscal years ended March 31, 2024, 2023 and 2022, the asset management services segment accounted for 20%, 9% and 10% of our consolidated
revenues, respectively. |
Recent Developments
On March 14, 2024, the Company announced its strategic
expansion into the private wealth management business under its newly formed Hong Kong subsidiary, Solomon Wealth, which was incorporated
on December 4, 2023. We expect to serve a broad range of high-net-worth individuals, family offices, and trusts, by offering wealth management
services and solutions that span traditional and virtual asset classes. We are optimistic about Solomon Wealth’s future and its
role in Solowin’s growth strategy. By emphasizing quality over speed, we aim to provide excellent value to our clients and gain
a strong position in the private wealth management sector. We endeavor to find high net worth clients who share our vision and focus on
building a strong foundation to develop high quality services. Notwithstanding, the early stage of client acquisition is crucial for our
long-term success. We believe our efforts will lead to a solid client base and future revenue. As of the date of March 31, 2024, Solomon
Wealth had not generated any revenue.
On March 5, 2024, Solowin entered into a
membership interest purchase agreement with Cambria Capital, LLC (“Cambria Capital”), a Utah limited liability company
and broker-dealer registered with the Financial Industry Regulatory Authority (“FINRA”), and Cambria Asset Management,
Inc., a Nevada corporation, the sole owner of the Cambria Capital. Pursuant to the agreement, Solowin will purchase 100% of the
membership interests in Cambria Capital for a total purchase price of $700,000. The transaction will be completed through two
closings, the first of which consists of the payment of $200,000 in exchange for an acquisition of 24.9% of Cambria Capital’s
membership interests. The parties have closed the acquisition of the 24.9% interest and are working on a continuing membership
application requesting approval for a change of ownership, control, or business operations to be filed with FINRA in accordance with
FINRA Rule 1017 (the “Rule 1017 Application”). In the event that FINRA approves the Rule 1017 Application and Cambrian
Capital’s application to conduct firm commitment underwritten offerings, Solowin will have the right to consummate the second
closing, pursuant to which Solowin will pay $500,000 in exchange for the remaining 75.1% of the membership interests in Cambria
Capital. In the event of termination of this agreement by any party, after the initial closing but prior to the second closing, due
to the second closing failing to occur by December 31, 2024, Solowin has the right to sell the 24.9% interest back to the seller at
a discounted price of $100,000 within five business days after the termination.
In addition to providing services related to traditional
assets, Solomon JFZ had been approved by the HKSFC to provide virtual asset dealing services and advisory services as of March 25, 2024.
Virtual assets related services are subject to a new regulatory framework in Hong Kong. Solomon JFZ has been among the initial group of
HKSFC approved licensed companies to provide virtual assets trading and advisory services to retail investors.
On April 16, 2024, the Company announced that
Solomon JFZ has been selected as one of the three participating dealers for Harvest Global’s spot Bitcoin and Ethereum ETF in Hong
Kong, Amoun the same period, Solomon JFZ enter into participation agreement with Harvest Global Investments Limited (“Harvest Global”)
and China Asset Management (Hong Kong) Limited (“China AMC”) as the participating dealer for the VA spot ETFs. Solomon JFZ
has become the largest holder of customer assets in the ChinaAMC Bitcoin ETF (HKEX: 9042), ChinaAMC Ethereum ETF (HKEX: 9046), and Harvest
Bitcoin Spot ETF (HKEX: 3439). Solomon is also among the top holders of ChinaAMC Bitcoin ETF (HKEX: 3042) and ChinaAMC Ethereum ETF (HKEX:
3046).
On April 26, 2024, the Company announced that
it strengthened its partnership with OSL Digital Securities (“OSL”), the digital asset platform of OSL Group (863.HK), which
is Hong Kong’s only publicly listed company fully dedicated to digital assets, to facilitate the in-kind subscription and redemption
processes. In addition, Solomon JFZ has been among the first group of HKSFC approved participating dealers of in-kind subscription and
redemption for spot virtual asset ETFs in Hong Kong, enabling investors to subscribe to or redeem ETF shares directly with the underlying
digital assets.
On May 28, 2024, the Company announced a strategic
partnership with MaiCapital Limited (“MaiCapital”), a leading virtual assets investment manager in Hong Kong, to expand virtual
asset allocation opportunities. MaiCapital is licensed to manage funds that may comprise up to 100% virtual assets which directly complements
Solomon’s licensing for the trading of virtual assets.
On July 16, 2024, the Company announced the
launch of Solomon VA+, an institutional-grade all-in-one smart trading app, which is innovatively upgraded from the former one-stop
electronic platform, Solomon Win. Solomon VA+ offers integrated financial services infrastructure designed to meet the evolving
needs of next-generation and high-net-worth investors, which is the first all in one app in Hong Kong that combining traditional
assets trading, virtual assets trading and wealth management services into one app, marking a significant industry development. The
Solomon VA+ trading platform offers various virtual assets trading to professional investors and Bitcoin and Ethereum to retail
investors, supporting clients with in-kind subscription of Bitcoin spot ETF and Ethereum spot ETF. Clients are also expected to
deposit & withdraw the cryptocurrencies via the APP within a short period, realizing a comprehensive allocation of traditional
financial and virtual assets.
As of the date of March 31, 2024, our virtual
assets services have not generated any revenue. We kept actively collaborating with prominent players in the virtual asset market, nurturing
positive relationships with them. Leveraging these partnerships, we are poised to expand our own business and provide comprehensive services.
Solomon JFZ’s virtual assets services are expected to build large trading volumes and an exponential client assets base for Solomon
JFZ in the near future.
With the recent development of the company and
the expanding subsidiaries, our vision is to build an integrated financial services infrastructure for next generation investors, and
our continuous efforts focus on being a one-stop comprehensive financial services provider. The business segment of the company has expanded
into four new business segments: (i) investment banking services, (ii) wealth management services, (iii) asset management services and
(iv) virtual assets services to customers. The following summary describes the products and services offered in each of the reportable
segments:
| ● | Investment Banking Services.
We are redefining investment banking by offering underwriting, private placement and investment advisory solutions tailored to
guide investors and corporates through complex financial landscapes, ensuring transactions are executed with strategic insight that meets
today’s capital market’s needs. Our investment banking services include capital raising, debt financing, secondary offerings
and financial advisory services, which covers the former segments (ii) investment advisory services, (iii) corporate consultancy services. |
| ● | Wealth Management Services.
Our wealth management division is dedicated to empowering investors with a comprehensive suite of services designed to manage, retain,
and grow wealth with confidence. Our offerings are split into two main categories: Brokerage Services and Integrated Investment Solutions.
The Integrated Investment Solutions covers the former segment (i) securities related services, by adding advisory services for high-net-worth
individuals and institutional investors such as family offices and trusts. |
| ● | Asset Management Services.
Our asset management services are crafted to meet the diverse investment goals of our clients through a broad range of asset classes
and investment strategies. By expanding services from the former segment (iv) asset management services, our current asset management
services offer investment funds, managed accounts, and external asset management, each designed to optimize clients’ portfolio’s
performance. |
| ● | Virtual Assets Services.
We are providing secure and innovative solutions in the virtual asset space including virtual assets trading, virtual assets spot ETFs
creation and redemption, security token offerings, and blockchain solutions such as real-world assets tokenization. Solomon JFZ had been
approved by the HKSFC to provide virtual asset dealing services and advisory services, and we are at the forefront of offering cutting-edge
Web3 solutions that cater to the needs of modern investors and businesses, leveraging blockchain for secure and innovative virtual asset
solutions. |
Corporate History and Structure
Solowin is a holding company incorporated in the
Cayman Islands without material operations of its own. Solomon JFZ was established under the Hong Kong laws on July 25, 2016. Solomon
JFZ does not have any subsidiaries.
From July 2021 to October
2022, we carried out a series of transactions to reorganize our corporate structure. As part of the reorganization, Solowin was incorporated
as an exempted company under the laws of Cayman Islands on July 23, 2021.
Upon incorporation on
July 23, 2021, one ordinary share, par value $1 per share, of Solowin was allotted and issued to Ogier Global Subscriber (Cayman) Limited,
who transferred the share to Ling Ngai Lok on July 27, 2021. On the same day, Solowin issued an additional 49,999 Ordinary Shares, par
value $1 per share, to Ling Ngai Lok. On June 9, 2022, in anticipation of a share exchange transaction among Solowin, Solomon JFZ and
Master Venus Limited, the then sole shareholder of Solomon JFZ, Ling Ngai Lok transferred (i) 17,000 Ordinary Shares to Gemini Asia Holdings
Limited; (ii) 16,500 Ordinary Shares to FORTUNE DYNASTY GLOBAL LIMITED and (iii) 16,500 Ordinary Shares to Vulcan Worldwide Holdings Limited.
On October 17, 2022, Solowin, Solomon JFZ and Master Venus Limited completed the share exchange transaction, in which Master Venus Limited
transferred 100% ownership of Solomon JFZ to Solowin. Master Venus Limited was then owned by three shareholders, Gemini Asia Holdings
Limited, FORTUNE DYNASTY GLOBAL LIMITED and Vulcan Worldwide Holdings Limited. As a result of the above series of reorganization transactions,
Solomon JFZ became the wholly-owned subsidiary of Solowin and the shareholders of Master Venus Limited became the owners of 100% of the
then outstanding Ordinary Shares of Solowin.
On December 7, 2022,
(i) each of the existing issued and unissued shares of par value of $1.00 each of Solowin was subdivided into 10,000 shares of par value
of $0.0001 each of Solowin; and (ii) the authorized share capital of Solowin was increased to $100,000 divided into 1,000,000,000 shares
of $0.0001 each. On the same day, each of Gemini Asia Holdings Limited, FORTUNE DYNASTY GLOBAL LIMITED and Vulcan Worldwide Holdings Limited
surrendered 165,920,000 Ordinary Shares, 161,040,000 Ordinary Shares and 161,040,000 Ordinary Shares, respectively, each of a par value
of $0.0001 per share, to Solowin. As a result of the above surrenders, each of Gemini Asia Holdings Limited, FORTUNE DYNASTY GLOBAL LIMITED
and Vulcan Worldwide Holdings Limited held 4,080,000 Ordinary Shares, 3,960,000 Ordinary Shares and 3,960,000 Ordinary Shares, respectively,
each of a par value of $0.0001 per share.
On September 8, 2023,
we completed our initial public offering and issued and sold 2,000,000 Ordinary Shares.
On December 4, 2023,
as a part of our strategic expansion into the private wealth management business, Solowin formed a new wholly owned subsidiary, Solomon
Wealth, under the laws of Hong Kong.
On March 5, 2024, Solowin
entered into a membership interest purchase agreement with Cambria Capital and Cambria Asset Management, Inc., pursuant to which Solowin
will purchase 100% of the membership interests in Cambria Capital for a total purchase price of $700,000. As of the date of this prospectus,
Solowin owns 24.9% of Cambria Capital.
Regulatory Permissions
to Operate Business and for the Offering of Securities to Foreign Investors
Save as disclosed below, other than those requisite
for a domestic company in Hong Kong engaged in the same business, we are not required to obtain any additional permission from any Hong
Kong authorities.
Save as disclosed below, as of the date of this
prospectus, HK Subsidiaries have received from Hong Kong authorities all requisite licenses, permissions or approvals needed to engage
in the businesses currently conducted by them in Hong Kong, and no permission or approval has been denied. Such licenses and permissions
include Type 1 license (dealing in securities), Type 4 license (Advising on securities), Type 6 license (advising on corporate finance)
and Type 9 license (Asset management). The following table summarizes the licenses and permissions held by our HK Subsidiaries.
License/Permit |
|
Issuing Authority |
|
Issuance Date |
|
Term |
|
Restrictions |
Type 1 license (dealing in securities) |
|
HKSFC |
|
January 10, 2017 |
|
No expiration date |
|
|
|
|
|
|
|
|
|
|
|
(virtual asset dealing services) |
|
|
|
Mar 25, 2024 |
|
No expiration date |
|
With respect to providing virtual asset dealing
services, the licensee or registered institution shall comply with the “Terms and conditions for licensed corporations or registered
institutions providing virtual asset dealing services under an omnibus account arrangement” (as amended from time to time). The
term “virtual asset” is defined in section 53ZRA of the Anti-Money Laundering and Counter-Terrorist Financing Ordinance.
With respect to providing virtual asset dealing
services, the licensee or registered institution shall only provide such services to persons which are, and remain at all times, its clients
in respect of its business in Type 1 regulated activity (dealing in securities). The term “dealing in securities” is specified
in Part 2 of Schedule 5 to the Securities and Futures Ordinance. The term “virtual asset” is defined in section 53ZRA of the
Anti-Money Laundering and Counter-Terrorist Financing Ordinance. |
|
|
|
|
|
|
|
|
|
Type 4 license (Advising on securities) |
|
HKSFC |
|
October 16, 2019 |
|
No expiration date |
|
|
(Virtual asset advisory services) |
|
|
|
March 25, 2024 |
|
No expiration date |
|
With respect to providing virtual asset advisory
services, the licensee or registered institution shall comply with the “Terms and conditions for licensed corporations or registered
institutions providing virtual asset advisory services” (as amended from time to time). The term “virtual asset” is
defined in section 53ZRA of the Anti-Money Laundering and Counter-Terrorist Financing Ordinance.
With respect to providing virtual asset advisory
services, the licensee or registered institution shall only provide such services to persons which are, and remain at all times, clients
of the licensed corporation or registered institution in respect of its business in Type 4 regulated activity (advising on securities).
The term “advising on securities” is specified in Part 2 of Schedule 5 to the Securities and Futures Ordinance. The term “virtual
asset” is defined in section 53ZRA of the Anti-Money Laundering and Counter-Terrorist Financing Ordinance. |
|
|
|
|
|
|
|
|
|
Type 6 license (advising on corporate finance, excluding acting as a sponsor of a listing applicant in an initial public offering or advising on the code on takeovers and mergers and share repurchases) |
|
HKSFC |
|
May 13, 2021 |
|
No expiration date |
|
The licensee shall not advise on matters/transactions falling within the ambit of the Codes on Takeovers and Mergers and Share Buy-backs issued by the Commission & shall not act as sponsor in respect of an application for the listing on a recognized stock market of any securities |
|
|
|
|
|
|
|
|
|
Type 9 license (Asset management) |
|
HKSFC |
|
October 16, 2019 |
|
No expiration date |
|
No Licensing Condition |
To conduct any regulated activity, a licensed
corporation must appoint at least two responsible officers for each type of regulated activity. Among these officers, at least one should
be an executive director, responsible for supervising the respective regulated activity. As of the date of this prospectus, Solomon JFZ
has five responsible officers to carry out Type 1 regulated activities, three responsible officers to carry out Type 4 regulated activities,
two responsible officers to carry out Type 6 regulated activities and two responsible officers to carry out Type 9 regulated activities.
Among the responsible officers, at least one of them is an executive director. As a result, we are currently in full compliance with the
HKSFC requirements on this matter.
In addition, we do not believe our operations
in Hong Kong and future offerings in the United States are subject to the review or prior approval of the Cyberspace Administration of
China, or the CAC or the CSRC. Specially, we do not currently expect the revised Cybersecurity Review Measures (the “revised CRM”),
published by CAC on December 28, 2021, to have an impact on our business, operations or future offerings as we do not believe that any
of our HK Subsidiaries is deemed to be an “operator of critical information infrastructure” or a “data processor”
controlling personal information of no less than one million users, that are required to file for cybersecurity review, because: (i) each
of our HK Subsidiaries is incorporated and operating in Hong Kong and the revised CRM remains unclear whether it shall be applied to a
Hong Kong company; (ii) each of our HK Subsidiaries operates without any subsidiary or VIE structure in mainland China; (iii) as of date
of this prospectus, our HK Subsidiaries collected and stored personal information of approximately 15,000 PRC individual clients, far
less than one million users; and (vi) as of the date of this prospectus, none of our HK Subsidiaries has been informed by any PRC governmental
authority that it is required to file for a cybersecurity review.
However, there remains significant uncertainty
in the interpretation and enforcement of relevant PRC cybersecurity laws and regulations. If any of our HK Subsidiaries is deemed to be
an “operator of critical information infrastructure” or a “data processor” controlling personal information of
no less than one million users, our HK Subsidiaries’ operation could be subject to CAC’s cybersecurity review in the future.
If any of our HK Subsidiaries (i) does not receive or maintain such permissions or approvals, should the approval is required in the future
by the PRC government, (ii) inadvertently concluded that such permissions or approvals are not required, or (iii) applicable laws, regulations,
or interpretations change and any of our HK Subsidiaries is required to obtain such permissions or approvals in the future, our operations
and financial conditions could be materially adversely affected, and our ability to offer securities to investors could be significantly
limited or completely hindered and the securities currently being offered may substantially decline in value and be worthless. In addition,
if we do not receive or maintain our existing licenses, or we inadvertently conclude that governmental approvals are not required, or
applicable laws, regulations, or interpretations change such that we are required to obtain approval in the future and we fail to obtain
such approval on a timely basis, we may be subject to governmental investigations, fines, penalties, orders to suspend operations and
rectify any non-compliance, or prohibitions from conducting certain business or any financing, which could result in a material adverse
change in our operations, significantly limit or completely hinder our ability to offer or continue to offer securities to investors,
or cause our securities to significantly decline in value or become worthless.
See “Risk Factors — Risks Relating
to Doing Business in Jurisdictions We Operate — We may become subject to a variety of PRC laws and other obligations regarding cyber
security, data protection, overseas offerings and/or foreign investment in China-based issuers, and any failure to comply with applicable
laws and obligations could have a material and adverse effect on our business, financial condition, and results of operations and may
hinder our ability to offer or continue to offer Ordinary Shares to investors and cause the value of the Ordinary Shares to significantly
decline or be worthless.”
Transfer of Cash Through Our Organization
As of the date of this prospectus, neither Solowin
nor any HK Subsidiary has paid any dividends or made any distributions to their respective shareholder(s), including any U.S. investors.
During the years ended March 31, 2024, 2023 and
2022, and during the subsequent period up to the date of this prospectus, the transfer of cash between Solowin and HK Subsidiaries totaled
approximately $957,000. This amount represented the repayment of $774,000 by Solowin to Solomon JFZ for certain IPO related expenses paid
by Solomon JFZ and advances of $183,000 made by Solowin to Solomon Wealth for its operations. There has been no transfer of other types
of assets between Solowin and HK Subsidiaries. HK Subsidiaries, which conduct our substantive operations, maintain the cash. Currently,
other than complying with the applicable Hong Kong laws and regulations, we do not have our own cash management policy or procedures that
dictate how funds are transferred. Neither Solowin nor any of the HK Subsidiaries currently has plans to distribute earnings or declare
cash dividends in the foreseeable future. We intend to keep any future earnings to finance the expansion of our business, and we do not
anticipate that any cash dividends will be paid in the foreseeable future. Any future determination related to our dividend policy will
be made at the discretion of our board of directors after considering our financial condition, results of operations, capital requirements,
contractual requirements, business prospects and other factors the board of directors deems relevant, and subject to the restrictions
contained in any future financing instruments
If we determine to pay dividends on any of the
Ordinary Shares in the future, as a holding company, Solowin will be dependent on receipt of funds from our HK Subsidiaries by way of
dividend payments. In the future, cash proceeds raised from financings conducted outside of Hong Kong, may be transferred by Solowin to
HK Subsidiaries via capital contribution or shareholder loans, as the case may be.
Subject to the Companies Act (As Revised) of the
Cayman Islands and Solowin’s amended and restated memorandum and articles of association, Solowin’s board of directors may
authorize and declare a dividend to shareholders at such time and of such an amount as they think fit out of either profit or share premium;
provided that in no circumstances may a dividend be paid out of our share premium if this would result in Solowin being unable to pay
its debts as they fall due in the ordinary course of business. For Solowin to transfer cash to HK Subsidiaries, Solowin may provide funding
to HK Subsidiaries through loans or capital contributions without restrictions on the amount of the funds.
As a holding company, Solowin may rely on dividends
and other distributions on equity paid by HK Subsidiaries for its cash and financing requirements. Under Hong Kong law, HK Subsidiaries
are permitted to provide funding to Solowin through dividend distribution without restrictions on the amount of the funds under the condition
that dividends could only be paid out of distributable profits (that is, accumulated realized profits less accumulated realized losses)
or other distributable reserves. Dividends cannot be paid out of share capital. Under the current practice of the Inland Revenue Department
of Hong Kong, no tax is payable in Hong Kong in respect of dividends paid by HK Subsidiaries. In addition, there are no restrictions on
foreign exchange and there are no limitations on the abilities of Solowin to transfer cash to or from our HK Subsidiaries or to investors
under Hong Kong law. There are no restrictions or limitation under the laws of Hong Kong imposed on the conversion of HK dollar into foreign
currencies and the remittance of currencies out of Hong Kong, nor is there any restriction on foreign exchange to transfer cash between
Solowin and our HK Subsidiaries, across borders and to U.S. investors. Nor are there any restrictions and limitations on distributing
earnings from HK Subsidiaries to Solowin or U.S. investors, or paying amounts owed. Solowin has not established cash management policies
that dictate how funds are transferred.
See “Risk Factors — Risks Related
to Our Business and Industry — Solowin relies on dividends and other distributions on equity paid by its subsidiaries to fund any
cash and financing requirements Solowin may have, and any limitation on the ability of its subsidiaries to make payments to Solowin could
have a material adverse effect on our ability to conduct our business” for more information.
The table below presents
the cash flows from Solowin to its subsidiaries for the fiscal years ended March 31, 2024, 2023 and 2022 and the subsequent period up
to the date of this prospectus:
|
|
Years Ended March 31 |
|
|
Interim Period
(April 1,
2024 |
|
Cash Flows Between Solowin and Subsidiaries |
|
2024 |
|
|
2023 |
|
|
2022 |
|
|
-Present) |
|
Solomon JFZ (Asia) Holdings Limited |
|
$ |
774,000 |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
Solomon Private Wealth Limited |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
$ |
183,000 |
|
Restrictions on
Cash Transfers
There are currently no such restrictions on foreign
exchange or our ability to transfer cash or assets between Solowin and HK Subsidiaries. However, if certain PRC laws and regulations,
including existing laws and regulations and those enacted or promulgated in the future were to become applicable to HK Subsidiaries, and
to the extent our cash or assets are in Hong Kong or a Hong Kong entity, such funds or assets may not be available to fund operations
or for other use outside of Hong Kong due to interventions in or the imposition of restrictions and limitations on HK Subsidiaries’
ability to transfer funds or assets by the PRC government. Furthermore, we cannot assure you that the PRC government will not intervene
or impose restrictions on Solowin or HK Subsidiaries in their transferring or distributing cash within the organization, which could result
in an inability of or prohibition on making transfers or distributions to entities outside of Hong Kong. Any limitation on the ability
of HK Subsidiaries to pay dividends or make other distributions to Solowin could materially and adversely limit our ability to grow, make
investments or acquisitions that could be beneficial to our business, pay dividends to U.S. investors, or otherwise fund and conduct our
business. In addition, if any HK Subsidiary incurs debt on its own behalf in the future, the instruments governing such debt may restrict
its ability to pay dividends. See “Risk Factors — Risks Related to Our Business and Industry — Solowin relies on
dividends and other distributions on equity paid by its subsidiaries to fund any cash and financing requirements Solowin may have, and
any limitation on the ability of its subsidiaries to make payments to Solowin could have a material adverse effect on our ability to conduct
our business.”
Holding Foreign Company Accountable Act
As more stringent standards have been imposed
by the SEC and the Public Company Accounting Oversight Board, the PCAOB, Solowin’s securities may be prohibited from trading if
our auditor cannot be fully inspected by the PCAOB. Pursuant to the Holding Foreign Companies Accountable Act, or the HFCA Act, enacted
in 2020, if the auditor of a U.S. listed company’s financial statements is not subject to the PCAOB inspections for three consecutive
“non-inspection” years, the SEC is required to prohibit the securities of such issuer from being traded on a U.S. national
securities exchange, such as NYSE and Nasdaq, or in U.S. over-the-counter markets. On June 22, 2021, the U.S. Senate passed the Accelerating
Holding Foreign Companies Accountable Act, or the AHFCAA, which, if enacted into law, would amend the HFCA Act and require the SEC to
prohibit an issuer’s securities from trading on U.S. stock exchanges if its auditor is not subject to the PCAOB inspections for
two consecutive “non-inspection” years instead of three and thus, reduces the time before Solowin’s securities may be
prohibited from trading or delisted. In December 2022, an omnibus spending bill was passed by Congress and later signed into law, which
included the enactment of provisions under the AHFCAA to accelerate the timeline for implementation of trading prohibitions under the
HFCA Act from three consecutive years to two consecutive years. Pursuant to the HFCA Act, on December 16, 2021, the PCAOB issued its determination
that the PCAOB was unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China
or in Hong Kong, because of positions taken by authorities in the jurisdictions, and the PCAOB included in the report of its determination
a list of the accounting firms that are headquartered in mainland China or Hong Kong. This list does not include our auditor, WWC, P.C.,
as our auditor is based in the U.S. and is registered with the PCAOB and subject to the PCAOB inspection. On August 26, 2022, the CSRC,
the Ministry of Finance of the PRC, or the MOF, and the PCAOB signed a Statement of Protocol, or the Protocol, governing inspections and
investigations of accounting firms based in mainland China and Hong Kong, taking the first step toward opening access for the PCAOB to
inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong. On December 15, 2022, the PCAOB
made a statement announcing that it was able, in 2022, to inspect and investigate completely issuer audit engagements of PCAOB-registered
public accounting firms headquartered in mainland China and Hong Kong and as a result, PCAOB vacated its previous 2021 determination.
However, uncertainties still exist as to whether the PCAOB will have continued access for complete inspections and investigations in the
future. The PCAOB has indicated that it will act immediately to consider the need to issue new determinations if needed. While our auditor
is based in the U.S. and is subject to the PCAOB inspection, in the event the PCAOB later determines that it is unable to inspect or investigate
completely our auditor, then such lack of inspection could cause Solowin’s securities to be delisted from the U.S. stock exchange.
See “Risk Factors — Risks Related to Doing Business in Jurisdictions We Operate — The Ordinary Shares may be prohibited
from trading in the United States under the HFCA Act in the future if the PCAOB is unable to inspect or investigate completely auditors
located in China or Hong Kong. The delisting of the Ordinary Shares, or the threat of their being delisted, may materially and adversely
affect the value of your investment.” In addition, we cannot assure you that Nasdaq or other regulatory agencies will not apply
additional or more stringent requirements to us. Such uncertainty could cause the market price of the Ordinary Shares to be materially
and adversely affected.
Corporate Information
The current legal and
commercial name of the Company is SOLOWIN HOLDINGS. SOLOWIN HOLDINGS is an exempted limited liability company incorporated under the laws
of the Cayman Islands on July 23, 2021. The registered office of the Company is at the offices of Conyers Trust Company (Cayman) Limited,
Cricket Square, Hutchins Drive, PO Box 2681, Grand Cayman, KY1-1111, Cayman Islands. The address of our principal place of business is
Room 1910-1912A, Tower 3, China Hong Kong City, 33 Canton Road, Tsim Sha Tsui, Kowloon, Hong Kong. Our telephone number is +852 3428-3893.
The Company’s Ordinary
Shares commenced trading on the Nasdaq Capital Market on September 7, 2023 under the ticker symbol “SWIN”.
The Company’s agent
for service of process in the United States is Cogency Global Inc., 122 East 42nd Street, 18th Floor, New York, NY 10168.
The Company’s website
can be found at https://www.solomonwin.com.hk. The information contained on our website is not a part of this prospectus, nor is such
content incorporated by reference herein, and should not be relied upon in determining whether to make an investment in our securities.
The Securities We May Offer
We may use this prospectus to offer any of the
following types of securities having an aggregate public offering price of $200,000,000:
We may issue securities of the types listed above which are convertible
or exchangeable for other securities so listed. In addition, this prospectus relates to the resale, from time to time, of up to an aggregate
of 2,960,000 Ordinary Shares by the selling shareholder named in this prospectus, including its donees, pledgees, transferees, assignees
or other successors-in-interest. We will not receive any proceeds from sales of the Ordinary Shares offered by the selling shareholder
although we will incur certain expenses in connection with such offering. When we or the selling shareholder decides to sell a particular
class or series of securities, we or the selling shareholder will provide specific terms of the offered securities in a prospectus supplement.
A prospectus supplement will describe the specific types, amounts, prices, and detailed terms of any of these offered securities and may
describe certain risks associated with an investment in the securities. Terms used in the prospectus supplement will have the meanings
described in this prospectus, unless otherwise specified.
Implications of Being an Emerging Growth Company
We qualify as an “emerging
growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) and may take advantage
of reduced public reporting requirements. These provisions include, but are not limited to:
| ● | being permitted to present
only two years of audited financial statements and only two years of related Management’s Discussion and Analysis of Financial
Condition and Results of Operations; |
| ● | not being required to comply
with the auditor attestation requirements in the assessment of our internal control over financial reporting; |
| ● | reduced disclosure regarding
executive compensation in periodic reports, proxy statements and registration statements; and |
| ● | exemptions from the requirements
of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously
approved. |
We may take advantage
of these provisions until the last day of our fiscal year following the fifth anniversary of the date of the first sale of the Ordinary
Shares pursuant to our initial public offering. However, if certain events occur before the end of such five-year period, including if
we become a “large accelerated filer,” if our annual gross revenues exceed $1.235 billion or if we issue more than $1.0 billion
of non-convertible debt in any three-year period, we will cease to be an emerging growth company before the end of such five-year period.
Section 107 of the JOBS
Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the
Securities Act of 1933, as amended (the “Securities Act”), for complying with new or revised accounting standards.
Implications of Being a Foreign Private Issuer
We report under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), as a non-U.S. company with “foreign private issuer”
status. Even after we no longer qualify as an emerging growth company, so long as we qualify as a foreign private issuer under the Exchange
Act, we will be exempt from certain provisions of the Exchange Act and the rules thereunder that are applicable to U.S. domestic public
companies, including:
| ● | the rules under the Exchange
Act that require U.S. domestic public companies to issue financial statements prepared under U.S. GAAP; |
| ● | sections of the Exchange Act
that regulate the solicitation of proxies, consents or authorizations in respect of any securities registered under the Exchange Act; |
| ● | sections of the Exchange Act
that require insiders to file public reports of their share ownership and trading activities and that impose liability on insiders who
profit from trades made in a short period of time; and |
| ● | the rules under the Exchange
Act that require the filing with the SEC of quarterly reports on Form 10-Q, containing unaudited financial and other specified
information, and current reports on Form 8-K, upon the occurrence of specified significant events. |
We will file with the
SEC, within four months after the end of each fiscal year (or such other reports required by the SEC), an annual report on Form 20-F containing
financial statements audited by an independent registered public accounting firm.
We may take advantage
of these exemptions until such time as we are no longer a foreign private issuer. We would cease to be a foreign private issuer at such
time as more than 50% of our outstanding voting securities are held by U.S. residents and any of the following three circumstances applies:
(i) the majority of our executive officers or directors are U.S. citizens or residents, (ii) more than 50% of our assets are
located in the United States or (iii) our business is administered principally in the United States.
Both foreign private
issuers and emerging growth companies are also exempt from certain of the more extensive SEC executive compensation disclosure rules.
Therefore, if we no longer qualify as an emerging growth company but remain a foreign private issuer, we will continue to be exempt from
such rules and will continue to be permitted to follow our home country practice as to the disclosure of such matters.
Risk Factors Summary
There are a number of risks that you should consider
and understand before making an investment decision regarding securities that we are offering. You should carefully consider all of the
information set forth in this prospectus and, in particular, should evaluate the specific factors set forth or incorporated by reference
in the section titled “Risk Factors” and before deciding whether to invest in our securities. These risks include, but are
not limited to:
| ● | Hong Kong’s securities
brokerage industry is highly competitive, and Solomon JFZ is subject to extensive and evolving regulatory requirements in the jurisdictions
in which it operates. |
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We may not be able to obtain or maintain all necessary licenses, permits and approvals and to make all necessary registrations and filings for our business activities in multiple jurisdictions and related to residents therein, especially in the PRC or otherwise relating to PRC residents. |
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Our level of commission and fee rates may decline in the future. Any material reduction in our commission or fee rates could reduce our profitability. |
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We derived a substantial portion of revenue from a small number of key clients. |
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Solowin relies on dividends and other distributions on equity paid by its subsidiaries to fund any cash and financing requirements Solowin may have, and any limitation on the ability of its subsidiaries to make payments to Solowin could have a material adverse effect on our ability to conduct our business. |
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Substantially all our operations are in Hong Kong. However, the legal and operational risks associated with operations in China may also apply to operations in Hong Kong. Changes in the policies, regulations, rules, and the enforcement of laws of the Chinese government may also be quick with little advance notice and our assertions and beliefs of the risk imposed by the PRC legal and regulatory system cannot be certain. |
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The enactment of Law of the PRC on Safeguarding the Hong Kong National Security Law could impact our Hong Kong operating subsidiaries. |
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There are political risks associated with conducting business in Hong Kong. |
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The Ordinary Shares may be delisted under the HFCA At if the PCAOB is unable to inspect our auditors. The delisting of the Ordinary Shares, or the threat of such delisting, may materially and adversely affect the value of your investment. In December 2022, an omnibus spending bill was signed into law, which included the enactment of provisions under the AHFCAA to accelerate the timeline for implementation of trading prohibitions under the HFCA Act from three consecutive years to two consecutive years. On December 16, 2021, the PCAOB issued its determination that the PCAOB is unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong, because of positions taken by authorities in the jurisdictions, and the PCAOB included in the report of its determination a list of the accounting firms that are headquartered in mainland China or Hong Kong. This list does not include our auditor, WWC, P.C. While our auditor is based in the U.S. and is registered with the PCAOB and subject to the PCAOB inspection, in the event it is later determined that the PCAOB is unable to inspect or investigate completely our auditor, then such lack of inspection could cause our securities to be delisted from the stock exchange. |
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We may become subject to certain new PRC laws and regulations regarding cyber security, data protection and overseas listing. |
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The Ordinary Shares experienced extreme price volatility unrelated to our actual or expected operating performance, financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of the Ordinary Shares and investors may experience losses on their investment. |
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We may not be able to maintain a listing of the Ordinary Shares on Nasdaq. |
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We have not historically declared or paid dividends on the Ordinary Shares and, consequently, your ability to achieve a return on your investment will depend on appreciation in the price of the Ordinary Shares. |
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Solowin’s directors, officers and principal shareholders have significant voting power. |
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We are exempt from certain provisions under the Exchange Act applicable to U.S. domestic public companies. |
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As a foreign private issuer, we are permitted to rely on exemptions from certain Nasdaq corporate governance standards applicable to domestic U.S. issuers. This may afford less protection to holders of the Ordinary Shares. |
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You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because Solowin is incorporated under Cayman Islands law. |
RISK FACTORS
An investment in our
securities involves a high degree of risk. We operate in a highly competitive environment in which there are numerous factors which can
influence our business, financial position or results of operations and which can also cause the market value of our Ordinary Shares to
decline. Many of these factors are beyond our control and therefore, are difficult to predict. Prior to making a decision about investing
in our securities, you should carefully consider the risk factors discussed in the section entitled “Risk Factors” contained
in our most recent Annual Report on Form 20-F filed with the SEC, and in any applicable prospectus supplement and our other filings with
the SEC and incorporated by reference in this prospectus or any applicable prospectus supplement, together with all of the other information
contained in this prospectus or any applicable prospectus supplement. If any of the risks or uncertainties described in our SEC filings
or any prospectus supplement or any additional risks and uncertainties actually occur, our business, financial condition and results of
operations could be materially and adversely affected. In that case, the trading price of our securities could decline and you might lose
all or part of your investment.
Risks Relating to Our Business and Industry
We operate in a heavily regulated industry,
and are subject to extensive and evolving regulatory requirements in the jurisdictions in which we operate.
We operate in a highly-regulated industry and
must comply with the applicable regulatory requirements in the jurisdictions we operate. Our major regulators include Cayman Islands Monetary
Authority (CIMA) and Securities and Futures Commission of Hong Kong, or HKSFC. These regulators and self-regulatory organizations
govern our business operations in a variety of ways and conduct regular examinations of our business to monitor our compliance with applicable
regulations. Among other things, we are subject to regulations with regard to (i) our sales practices, including our interaction
with and solicitation of clients and our marketing activities; (ii) the custody, control and safeguarding of our clients’ assets;
(iii) maintaining specified minimum amounts of capital and limiting withdrawals of funds from our regulated operating subsidiaries;
(iv) submitting regular financial and other reports to regulators; (v) licensing for our operating subsidiaries and our employees;
and (vi) the conduct of our directors, officers, employees and affiliates. In addition, as the online brokerage service industry
in Hong Kong is at a relatively early stage of development, interpretation and enforcement of the applicable regulatory regime are
subject to significant uncertainties, which may result in difficulties in determining whether our existing practices violate any applicable
laws and regulations.
Compliance with these regulations is complicated,
time-consuming and expensive. Our ability to comply with all applicable laws and regulations is largely dependent on our internal compliance
system, as well as our ability to attract and retain qualified compliance personnel. While we maintain systems and procedures designed
to ensure that we comply with applicable laws and regulations, we cannot assure you that we are able to prevent all possible violations.
Non-compliance with applicable laws or regulations could result in sanctions being levied against us, including the imposition of fines
or penalties, censures, restrictions on certain business activities, suspension or expulsion from a jurisdiction or market or the revocation
or limitation of licenses, which could adversely affect our reputation, prospects, revenues and earnings. Furthermore, any future change
in the regulatory, legal and industry environment for the securities brokerage, investment advisory, corporate finance and asset management
may have a significant impact on our business.
In addition, we are subject to regular investigations,
inquiries and inspections from the relevant regulatory bodies. For example, from time to time, Solomon JFZ, our HKSFC-licensed subsidiary,
may be subject to or required to assist in inquiries or investigations by regulatory authorities in Hong Kong, principally the HKSFC.
The HKSFC conducts on-site reviews and off-site monitoring to ascertain and supervise Solomon JFZ’s business conduct and compliance
with relevant regulatory requirements and to assess and monitor, among other things, its financial soundness. Similarly, Solowin may be
subject to CIMA’s on-site inspections and inquiries from time to time. If any misconduct is identified as a result of inquiries,
reviews, investigation or inspections, the relevant regulatory authorities may take disciplinary actions against us. There also remains
a risk that we may not be able to rectify our practices to be in compliance with the relevant rules and regulations following the identification
of any such misconduct or material non-compliance, which may result in regulators taking additional actions against it. We have not been
inspected by HKSFC so far. We have an external audit carried out every year, and we have hired an external compliance consulting company
since September 1, 2021 on compliance review and checking.
We may not be able to obtain or maintain
all necessary licenses, permits and approvals and to make all necessary registrations and filings for our business activities in multiple
jurisdictions and related to residents therein, especially in the PRC or otherwise relating to PRC residents.
We operate in a heavily regulated industry, which
requires various licenses, permits and approvals in different jurisdictions to conduct our businesses. Our clients include people who
live in jurisdictions where we do not have licenses issued by the local regulatory bodies. It is possible that authorities in those jurisdictions
may in the future take the position that we are required to obtain licenses or otherwise comply with local laws and regulations in order
to conduct our business with residents living in those jurisdictions. In any jurisdictions, if we fail to comply with the regulatory requirements,
we may risk being disqualified for our existing businesses or being rejected for renewal of our qualifications and/or licenses upon expiry
by the regulatory authorities as well as other penalties, fines or sanctions. In addition, in respect of any new business that we may
contemplate, we may not be able to obtain the relevant approvals for developing such new business if we fail to comply with the relevant
regulations and regulatory requirements. As a result, we may fail to develop new business as planned, or we may fall behind our competitors
in such businesses.
Specifically, we do not hold any licenses or permits
from any PRC regulatory bodies for Solomon JFZ’s securities related business. Currently, a large number of our clients are PRC residents
and some independent contractors are providing supporting services remotely from the PRC. We believe that since the transactions on Solomon
JFZ’s trading platform are all conducted outside PRC, Solomon JFZ’s current activities in China do not require a securities
brokerage license, a making license or permit under existing PRC securities laws and regulations. However, it is noted on December 30,
2022, CSRC issued a rectification request to similarly situated companies, specifically described as “Futu Holdings and UP Fintech
Holding Limited have conducted cross-border securities business for domestic investors without the approval of the CSRC, which constitutes
illegal operation of securities business under the Securities Law and other relevant laws and regulations, and the CSRC intends to require
Futu Holdings and UP Fintech Holding Limited to rectify the aforementioned violations.” Moreover, CSRC has promulgated Administrative
Measures on Securities Brokerage Services effective on February 28, 2023, which clarifies that CSRC will strengthen the daily supervision
of illegal cross-border brokerage business and steadily and orderly promote the rectification and standardization of such activity. Therefore,
we tend to believe that CSRC is now gradually strengthening its regulation of this cross-border online brokerage business, and Solomon
JFZ’s business involving PRC residents may also need to comply with the new regulatory requirements in the future. As a result,
there remains uncertainties as to how the current and any future PRC laws and regulations will be interpreted or implemented in the context
of operating securities-related business in China. We cannot assure you that our current operating model will not be deemed as operating
securities brokerage business in China, subjecting us to further inquiries or rectifications. If certain of Solomon JFZ’s activities
in China were deemed by PRC regulators to be providing securities brokerage services, investment consulting services or stock options
brokerage business in China, we would be required to obtain the required licenses or permits from the relevant regulatory bodies, including
CSRC. The failure to obtain such licenses or permits may subject us to regulatory actions and penalties, including fines, suspension of
parts or all of Solomon JFZ’s business relations with PRC individuals and entities, and temporary suspension or removal of our websites
and mobile application in China. In such cases, our business, financial condition, results of operations and prospects may be materially
and adversely affected.
PRC governmental control of currency conversion,
cross-border remittance and offshore investment could have a direct impact on the trading volume on our platform, and the PRC government
could further tighten restrictions on converting Renminbi to foreign currencies and/or deems our practices to be in violation of PRC laws
and regulations.
A majority of our clients are PRC residents and
are therefore subject to the restrictions under the rules and regulations promulgated by the State Administration of Foreign Exchange
(the “SAFE”), regarding the conversion of Renminbi into foreign currencies and the remittance and the use of such funds outside
China. Under current PRC foreign exchange regulations, which are Administrative Measures on Individual Foreign Exchange issued in December
2006 and Implementation Regulations for the Administrative Measures on Individual Foreign Exchange issued in January 2007, each PRC citizen
is permitted to convert up to an aggregate of $50,000 equivalent Renminbi each year for appropriate personal use. Such appropriate use
does not include direct investment into secondary stock markets, futures, insurances, asset management products or other trading. PRC
residents who intend to convert Renminbi into U.S. dollars exceeding such quota are required to go through additional application and
review procedures with commercial banks designated by the SAFE. In fact, according to the Notice of the State Administration of Foreign
Exchange on Issues Relating to Foreign Exchange Control for Overseas Investment and Financing and Round-tripping by Chinese Residents
through Special Purpose Vehicles (Hui Fa [2014] No.37), except for the red chip model (individuals in China set up SPVs abroad and return
to invest) recognized by SAFE , PRC residents can only invest in overseas markets indirectly through channels such as Shanghai-Shenzhen-Hong
Kong Stock Exchange, mutual recognition of funds between the Mainland and Hong Kong or purchase of QDII/RQDII products. Although we require
our clients to comply with the relevant rules and regulations pursuant to the agreements we enter into with them, we cannot assure you
that our clients will follow the rules and regulations or the provisions in the agreements at all times. We have not accepted any direct
Renminbi deposit from mainland China since start-up and do not handle the Renminbi cross-border currency conversion for our Chinese clients
through any of our accounts or entities, and we do not require our clients to submit evidence of approval or registration with respect
to the foreign currency used for offshore investments. We cannot assure you that our current operating model, which includes redirecting
our clients to open accounts with third party service provider, will be not deemed as assisting with the currency conversion by SAFE.
In such cases, we may face regulatory warnings, correction orders, condemnation and fines, and may not be able to conduct our current
business in the future. In addition, any misbehavior or violation by our clients of applicable laws and regulations could lead to regulatory
inquiries, investigations or penalties that involve us. Moreover, in accordance with the rectification requirements imposed by the CSRC
on December 30, 2022 in respect of Futu Holdings and UP Fintech Holding Limited, it cannot be ruled out that we will not
subsequently be penalized by the relevant PRC authorities due to foreign exchange control issues for our PRC residents clients and Solomon
JFZ may also be prohibited from accepting incremental fund transfers to such investors’ accounts in violation of PRC foreign exchange
control regulations due to this issue, like above mentioned those two companies, which may make it more difficult for us to develop new
PRC residents customers subsequently.
Since the PRC authorities and the commercial banks
designated by the SAFE to conduct foreign exchange services have significant discretion in interpreting, implementing and enforcing the
foreign exchange rules and regulations, and due to many other factors that are beyond our control and ability to anticipate, we may face
more severe consequences, including being asked to take additional and burdensome measures to monitor the source and use of the foreign
currency funds in the accounts of our clients, remove our account opening functions, or suspend our operations pending an investigation
or indefinitely. In such cases, we may face regulatory warnings, correction orders, condemnation, fines and confiscation of income, and
may not be able to conduct our current business in the future. We may also be subject to regular inspections from relevant authorities
from time to time. If such situations occur, our business, financial condition, results of operations and prospects would be materially
and adversely affected.
In addition, if the PRC government further tightens
the amount of currency exchange allowed for PRC residents, increases control over the remittance of currency out of the PRC, restricts
the assistance or participation of any non-resident entities in the currency conversion, or specifically prohibits any exchanges for securities-related
investment purposes, the trading activities of Chinese residents on our platform could be restricted, which would significantly reduce
the trading volume on our platform. As our revenues from brokerage commission and market making income depends heavily on the total trading
volume facilitated on our platform, the occurrence of any of the above regulatory changes would have a material and adverse impact on
our business, operating and financial results.
If we were deemed to be an investment company
under the Investment Company Act of 1940, we may be required to institute burdensome compliance requirements and our activities may be
restricted, which could adversely affect the price of the Ordinary Shares and our business.
An entity will generally be deemed an “investment
company” under Section 3(a)(1) of the Investment Company Act of 1940, as amended (the “1940 Act”) if: (a) it is or holds
itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities,
or (b) absent an applicable exemption, it owns or proposes to acquire investment securities having a value exceeding 40% of the value
of its total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. We believe we are not an “investment
company” and do not intend to become registered as an “investment company” within the meaning of the 1940 Act, as we
do not hold ourselves out as being primarily engaged in the business of investing, reinvesting, or trading in securities. As of March
31, 2024, Solomon JFZ’s operations mainly consisted of four business segments: (i) securities related services, (ii) investment
advisory services, (iii) corporate consultancy services, and (iv) asset management services to our customers. Solomon JFZ charges brokerage
commission fees to clients for trades made using its trading platform based on the transaction amount, subject to a minimum charge per
transaction. Solomon JFZ provides investment advice to our clients based on their financial needs and risk appetite, and it charges them
an investment advisory fee based on a percentage of the AUM. Solomon JFZ also provides corporate consultancy services to unlisted and
listed companies that are looking for high-quality and value-added corporate finance advisory services at reasonable costs. It charges
our clients advisory fees according to the type and size of the transactions, duration of the engagement, complexity of the transaction
and the expected manpower requirements. For its asset management services, Solomon JFZ generates revenue through fund subscription fees,
fund management fees, and performance fees. Solomon JFZ’s management funds provide eligible investors with the chance to invest
under professional management. The subscription fees for asset management services vary based on the subscription amount, ranging from
1% to 5% for specific funds and investors. In addition, as of March 31, 2024, Solomon JFZ’s investment securities represented less
than 40% of the value of our total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis calculated
in accordance with Section 3(a)(1)(C) of the 1940 Act. The Company does not own any securities as defined as “investment securities”
under Section 3(a)(2) of the 1940 Act. Because neither Solowin nor Solomon JFZ owns securities of other companies, they will not receive
any dividend or interest income, nor will they recognize gains or losses from sales of securities and there is no expectation that these
circumstances will change in the foreseeable future. We intend to continue to conduct our operations so that we will not be deemed an
investment company.
If, at any time, we become or are determined to
be primarily engaged in the business of investing, reinvesting or trading in securities, we could become subject to regulation under the
1940 Act. If we were to become subject to the 1940 Act, any violation of the 1940 Act could subject us to material adverse consequences,
including potentially significant regulatory penalties and the possibility that certain of our contracts would be deemed unenforceable.
Additionally, as a foreign private issuer, we would not be eligible to register under the 1940 Act. Accordingly, we would either have
to obtain exemptive relief from the SEC, modify our contractual rights or dispose of investments in order to fall outside the definition
of an investment company, each of which may have a material adverse effect on the Company. Additionally, we may have to forego potential
future acquisitions of interests in companies that may be deemed to be investment securities within the meaning of the 1940 Act. Finally,
failure to avoid being deemed an investment company under the 1940 Act could also make us unable to comply with our reporting obligations
as a public company in the United States and lead to our being delisted from Nasdaq, which would have a material adverse effect on the
liquidity and value of the Ordinary Shares.
We may be unable to retain existing clients
or attract new clients, or we may fail to offer services to address the needs of our clients as they evolve.
We derive a significant portion of our revenues
from Solomon JFZ’s commissions based upon the trading volume or the number of relevant transaction contracts executed by our clients.
The historically rapidly growing trading volume on Solomon JFZ’s platform was primarily driven by the increasing number of our active
clients in the past. However, our total revenue-generating clients have declined over the past three fiscal years. As of March 31, 2024,
2023 and 2022, we had 1,240, 1,400 and 2,100 revenue-generating clients, respectively. Revenue-generating clients are active clients who
have assets in their trading accounts and have trading activities. We have seen a significant decrease in this group of clients, primarily
due to a sharp increase in withdrawals and limited growth in new clients depositing money after opening their accounts. The high number
of withdrawals is directly tied to a decline in investor confidence because of bad performance in the Hong Kong stock market, which was
evidenced by a 22% drop in the HSI index over a six-month period from March 31 2022 to September 30, 2022. Investors who lost interest
in trading chose to withdraw their money and avoid making impulsive trading. The limited growth in new client deposits is largely due
to the absence of appealing initial public offerings in the Hong Kong stock market. According to statistical data from HKEX, the number
of IPOs in the Hong Kong stock market declined significantly during the past years from 154 in 2020 to 90 in 2022, or a compounded decrease
of 24%. Additionally, in 2022, 31 of the 90 IPOs had trading prices falling on their first day of trading, while 49 companies underperformed
their initial offering prices throughout the year, representing 34% and 54% of the total number of IPOs in the year, respectively. To
further grow our business and expand our operation, we rely on continuous efforts in retaining existing clients and attracting new ones.
Our ability to retain existing clients is dependent
upon multiple factors, some of which are beyond our control. Our clients may not continue to place trading orders or increase the level
of their trading activities on Solomon JFZ’s platform if we cannot match the prices offered by other market players or if we fail
to deliver satisfactory services. Failure to deliver services in a timely manner at competitive prices and provide a satisfactory experience
will cause our clients to lose confidence in us and use our platform less frequently or even stop using Solomon JFZ’s platform altogether.
Even if we are able to provide high-quality and satisfactory services on Solomon JFZ’s platform in a timely manner and at favorable
pricing terms, we cannot assure you that we will be able to retain existing clients, encourage repeat and increase trading transactions,
in part due to reasons beyond our control, such as the personal financial situation of our clients or the deterioration of capital markets
generally. We have taken efforts in attracting new clients and expanding our brand influence, and we plan to continue doing so. However,
these efforts may not be cost effective and we cannot assure you that we will be able to grow our client base as we expect, which may
in turn materially and adversely affect our business operations and prospects.
Our level of commission and fee rates may
decline in the future. Any material reduction in our commission or fee rates could reduce our profitability.
A significant portion of our revenue is derived
from advisory fees charged to clients for Solomon JFZ’s investment advisory services. Revenues generated from investment advisory
fees amounted to approximately $2.86 million, or 67%, approximately $2.52 million, or 56% and approximately $0.73 million, or 22% of our
total revenue for the fiscal years ended March 31, 2024, 2023 and 2022, respectively.
Solomon JFZ generates revenue through advisory
fees utilizing a pricing model that carefully balances cost, value, and affordability. When determining the cost elements, factors such
as human resources, sales commissions, and operational expenses are taken into consideration. Additionally, Solomon JFZ may implement
a reduced percentage fee structure to accommodate affordability or to attract new clients.
Revenue from commissions charged to clients for
Solomon JFZ’s securities related services amounted to $51,000, or 1%, $74,000, or 2% and $1.84 million, or 57% of our total revenue
for the fiscal years ended March 31, 2024, 2023 and 2022. The significant decrease in the fiscal year ended March 31, 2024 was mainly
due to the poor equity market performance in Hong Kong and a lack of attractive IPOs in the Hong Kong stock market.
In terms of online trading commission fees, our
fees are about 60% lower than those of banks, which charge high fees due to their reputation for securing assets and providing convenient
access to purchasing power. However, our fees are less competitive compared to those of larger online securities companies with a larger
client base, such as Futu Securities. For IPO subscription fees, we offer competitive rates similar to those of banks, charging a fee
of HKD 100 per subscription and winning lot charge.
We may experience pressure on our commission or
fee rates as a result of competition in the financial service industry and online brokerage industry. Some of our competitors offer a
broader range of services to a larger client base and enjoy higher trading volumes than we do. Consequently, our competitors may be able
to offer trading services at lower commissions or fee rates than we currently offer or may be able to offer. For example, some banks in
Hong Kong and the United States have started offering zero commission fees or similar promotions to attract clients. As a result
of this pricing competition, we could lose both market share and revenues. We believe that any downward pressure on commission or fee
rates would likely continue and intensify as we continue to develop our business and gain recognition in our markets. A decline in our
commission or fee rates could lower our revenues, which would adversely affect our profitability. In addition, our competitors may offer
other financial incentives we may not be able to offer, such as rebates or discounts in order to induce trading in their systems, which
may in turn materially and adversely affect our operating and financial results.
We cannot guarantee the profitability of
our clients’ investments or ensure that our clients will make rational investment judgements.
We cannot guarantee the profitability of the investments
made by clients on Solomon JFZ’s trading platform. The profitability of our clients’ investments is directly affected by elements
beyond our control, such as economic and political conditions, broad trends in business and finance, changes in volume of securities and
futures transactions, changes in the markets in which such transactions occur and changes in how such transactions are processed.
Moreover, many of our clients are retail investors,
who are less sophisticated compared with institutional investors. Although we include prominent risk warnings and disclaimers on our apps
throughout the transaction process and, in accordance with relevant regulations, have designed an appropriateness test to assess the level
of experience and risk level of the client to assess whether certain services or products are appropriate for such client, there is no
guarantee that the appropriateness test for any product is adequate.
Clients who have suffered from unfavorable trading
results, financial losses, or even liquidity issues in connection with the financial losses may attribute their losses to us and/or may
discontinue trading with us, which may have a material and adverse effect on our business and results of operation. Some clients who have
suffered substantial losses on Solomon JFZ’s platform may seek to recover their damages from us or bring lawsuits against us. These
allegations against us, regardless of their veracity, may negatively affect our reputation and clients’ confidence with us. If we
were to become the subject of any unfavorable allegations or lawsuits, whether such allegations are proven to be true or untrue and regardless
of the outcome of the lawsuits, we may have to expend a significant amount of resources to investigate and/or defend itself, which could
divert our management’s attention from the day-to-day operations. In addition, if any litigation or other legal proceeding to which
we are a party is resolved adversely, we may be ordered to pay a substantial amount of damages or compensation to the other party, which
could adversely affect our business, financial condition and results of operations.
Failure to comply with regulatory capital
requirements set by local regulatory authorities could materially and negatively affect our business operation and overall performance.
Solomon JFZ, our major operating subsidiary in
Hong Kong, is subject to various regulatory capital requirements, including minimum capital requirements, capital ratios and buffers established
by competent authorities in their respective jurisdiction. Failure to meet minimum capital requirements can initiate certain mandatory,
and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on our business and
financial position.
As of the date of this prospectus, Solomon JFZ
is in compliance with its respective regulatory capital requirements. However, if Solomon JFZ fails to remain well-capitalized for regulatory
purposes, CIMA and HKSFC may take actions against it and its business operation, and we may face penalties, including limitations and
prohibitions on our business activities or suspension or revocation of our licenses and trading rights. This could affect client confidence,
our ability to grow, our costs of funds and professional insurance costs, our ability to pay dividends on Ordinary Shares, our ability
to make acquisitions, and in turn, our business, results of operations and financial condition.
Our risk management policies and procedures
may not be adequate and effective, which may expose us to unidentified or unexpected risks.
Our business activities expose us to various risks,
including regulatory environment risk, market condition risk, credit risk, liquidity risk, capital adequacy risk and operational risk.
We are dependent on our risk management policies and procedures and adherence to our Internal Control and Compliance Manual as well as
the latest regulatory policies and procedures by our staff to manage the risks inherent in our business. Nonetheless, our policies and
procedures to identify, monitor and manage risks may not be fully effective in mitigating our risk exposure in all market environments
or against all types of risks. Some of our methods for managing risks are discretionary by nature and are based on internally developed
controls and observed historical market behavior, and also involve reliance on standard industry practices. Many of our risk management
policies are based upon observed historical market behavior or statistics based on historical models. During periods of market volatility
or due to unforeseen events, the historically derived correlations upon which these methods are based may not be valid. As a result, these
methods may not predict future exposures accurately, which could be significantly greater than what our models indicate. This could cause
us to incur losses or cause our risk management strategies to be ineffective.
In addition, we may fail to update our risk management
system as needed or as fast as the industry evolves, which may weaken our ability to identify, monitor and control new risks. Other risk
management methods depend upon the evaluation of information regarding markets, clients, catastrophe occurrence or other matters that
are publicly available or otherwise accessible to us, which may not always be accurate, complete, up-to-date or properly evaluated. These
may adversely affect our results of operations and financial conditions.
Fluctuations in exchange rates could have
a material adverse effect on our results of operations.
The functional currency for HK Subsidiaries is
Hong Kong dollars. However, the financial statements we provided to you and filed with the SEC are presented in U.S. dollars. Our
assets and liabilities denominated in foreign currencies are translated at year-end rates of exchange, whereas the income statement accounts
are translated at average rates of exchange for the year. Any such translation may result in gains or losses, which are recorded under
other comprehensive income (loss) in the financial statements. Changes in the exchange rates between the Hong Kong dollars or other
currencies to the U.S. dollars could have a material effect on our results of operations. The value of Hong Kong dollars against
U.S. dollars and other currencies is affected by a variety of factors which are beyond our control, including, among other things, changes
in Hong Kong’s or China’s political and economic conditions. Changes in the conversion rate between the U.S. dollar and
the Hong Kong dollar will affect that amount of proceeds we will have available for our business.
Since 1983, Hong Kong dollars have been pegged
to the U.S. dollars at the rate of approximately HK$7.80 to $1.00. We cannot assure you that this policy will not be changed in the future.
If the pegging system collapses and Hong Kong dollars suffer devaluation, the Hong Kong dollar cost of our expenditures denominated in
foreign currency may increase. This would in turn adversely affect the operations and profitability of our business.
Our reputation, or the reputation of our
industry as a whole, may be harmed.
The reputation of our brand is critical to our
business and competitiveness. If we fail, or are perceived to have failed, to deal with issues that may give rise to reputational risk,
our business and prospects may be harmed. Such issues may include mishandling client complaints, potential conflicts of interest, privacy
breaches, client data leak, improper sales practices, as well as failures to identify legal, credit, liquidity, and market risks inherent
in our business. Failure to appropriately address these issues could reduce clients’ confidence in us or increase client attrition
rate, which may adversely affect our reputation and business. In addition, any malicious or negative allegation made by the media or other
parties about the foregoing or other aspects of us, including our management, business, compliance with law, financial condition or prospects,
whether with merit or not, could severely compromise our reputation and harm our business and operating results.
Negative publicity about the securities brokerage
industry in general may also have a negative impact on our reputation, regardless of whether we have engaged in any inappropriate activities.
Moreover, negative publicity about our partners, service providers or other counterparties, such as negative publicity about their client
complaints and any failure by them to adequately protect the information of our investors and borrowers, to comply with applicable laws
and regulations or to otherwise meet required quality and service standards could harm our reputation. If any of the foregoing takes place,
our business and results of operations could be materially and adversely affected.
We had incurred net losses in the past,
and we may incur losses again in the future.
We recorded a net income of $1.35 million in the
fiscal year ended March 31, 2023. However, we had a net loss of $4.56 million and $0.98 million in the fiscal years ended March 31, 2024
and 2022, respectively. We cannot assure you that we will be able to generate net income in the future. We anticipate that our operating
costs and expenses will increase in the foreseeable future as we continue to grow our business, attract new clients, enhance our risk
management capabilities and increase our brand recognition. These efforts may prove more costly than we currently anticipate, and we may
not succeed in increasing our revenue sufficiently to offset these higher expenses. There are other external and internal factors that
could negatively affect our financial condition. For example, the trading volume achieved on Solomon JFZ’s platform may be lower
than expected, which may lead to lower than expected revenues. Furthermore, we may adopt a new share incentive plan in the future, which
will result in significant share based compensations to us. We generated approximately 1%, 2% and 57%, of our total revenues from securities
related services charged to our clients who trade on our platform in fiscal years ended March 31, 2024, 2023 and 2022, respectively. Any
material decrease in our commissions would have a substantial impact on our financial conditions. As a result of the foregoing and other
factors, we may continue to incur net losses in the future.
We rely on a number of external service
providers for technology, processing and supporting functions, and if they fail to provide these services, it could adversely affect our
business and harm our reputation.
We collaborate with a number of external service
providers in providing services to our clients for technology, processing and supporting functions, including, other market makers to
which we pass on certain orders, referring brokers we collaborate with for client acquisition, custody banks, securities exchanges, clearing
agents and online payment service providers. Furthermore, external content providers provide us with financial information, market news,
charts, option and stock quotes and other fundamental data that we offer to our clients.
These service providers face technical, operational
and security risks of their own. Any significant failures by them, including improper use or disclosure of their confidential client,
employee or company information, deterioration in their performance, interruption in these third-party services or software, or other
improper operation could interfere with our trading activities, cause losses due to erroneous or delayed responses, harm our reputation
or otherwise be disruptive to our business. For instance, when there is a sudden surge in trading volume caused by a large amount of concurrent
orders, usually subsequent to a major social event, we may not be able to retrieve the real-time quote due to delays or interruptions
of third party systems, which may cause a delay in the exercise of automatic settlements initiated by our risk management system. Such
delays may result in negative balance in our clients’ account and a potential loss to it. Also, we have contracted with external
payment service providers to facilitate our clients’ payment procedures for trading and transactions through our platform. Any failure
by these service providers to continue with good business operations, comply with applicable laws and regulations or any negative publicity
on these parties could damage our reputation, expose us to significant penalties and decrease our total revenues and profitability.
Furthermore, if our arrangements with any of these
external service providers are terminated, we may not be able to find an alternative source to support us on a timely basis or on commercially
reasonable terms. This could also have a material adverse effect on our business, financial condition and results of operations. For instance,
Solomon JFZ’s online trading business is conducted through the Solomon VA+ platform, which is licensed from third-party Hundsun
Ayers Technologies Limited (“Hundsun Ayers”) and can be easily accessed via our app, software, and websites. The platform
offers clients seamless, efficient, and secure access to comprehensive brokerage and value-added services such as trade execution, account
management, and customer support. The license is renewed annually, and we may change providers based on cost, technical support, and customization
needs. However, if we are unable to continue obtaining licenses from Hundsun Ayers, it would take us several months to launch a new platform
that meets our user experience needs. In addition, Solomon JFZ conducts the securities trading management and settlement services through
Hundsun UFG 3.0 system, which was supported by third party Hundsun Ayers. The system has been customized for our use and provides client
account management and trade settlement services. Due to Hundsun Ayers’ leading position with over 50% market share in one-stop
trading solutions, we have limited options for changing service providers. Furthermore, our KYC procedures are performed through the World-Check
One screening system, supported by Refinitiv, a leading provider of financial market data and infrastructure. Solomon JFZ uses World-Check
One for essential screening during account opening and ongoing risk monitoring, which supports its due diligence efforts against financial
crime, bribery, and corruption. However, if World-Check One’s service becomes unavailable, our compliance efficiency may be adversely
impacted.
A failure in our information technology,
or IT, systems could cause interruptions in our services, undermine the responsiveness of our services, disrupt our business, damage our
reputation and cause losses.
Our IT systems support all phases of our operations.
If our systems fail to perform, we could experience disruptions in operations, slower response time or decreased client satisfaction.
We must process, record and monitor a large number of transactions and our operations are highly dependent on the integrity of our technology
systems and our ability to make timely enhancements and additions to our systems. System interruptions, errors or downtime can result
from a variety of causes, including unexpected interruptions to the internet infrastructure, technological failures, changes to our systems,
changes in client usage patterns, linkages with third-party systems and power failures. Our systems are also vulnerable to disruptions
from human error, execution errors, errors in models such as those used for risk management and compliance, employee misconduct, unauthorized
trading, external fraud, computer viruses, distributed denial of service attacks, computer viruses or cyber-attacks, terrorist attacks,
natural disaster, power outage, capacity constraints, software flaws, events impacting our key business partners and vendors, and other
similar events.
It could take an extended period of time to restore
full functionality to our IT systems or other operating systems in the event of an unforeseen occurrence, which could affect our ability
to process and settle client transactions. Moreover, instances of fraud or other misconduct might also negatively impact our reputation
and client confidence in us, in addition to any direct losses that might result from such instances. Despite our efforts to identify areas
of risk, oversee operational areas involving risks, and implement policies and procedures designed to manage these risks, there can be
no assurance that we will not suffer unexpected losses, reputational damage or regulatory actions due to technology or other operational
failures or errors, including those of our vendors or other third parties.
While we devote substantial attention and resources
to the reliability, capacity and scalability of our systems, extraordinary trading volume could cause our computer systems to operate
at unacceptably slow speeds or even fail, affecting our ability to process client transactions and potentially resulting in some clients’
orders being executed at prices they did not anticipate. Disruptions in service and slower system response time could result in substantial
losses and decreased client satisfaction. We are also dependent on the integrity and performance of securities exchanges, clearinghouses
and other intermediaries to which client orders are routed for execution and clearing. System failures and constraints and transaction
errors at such intermediaries could result in delays and erroneous or unanticipated execution prices, cause substantial losses for our
clients and for ourselves, and subject us to claims from our clients for damages.
We currently maintain a disaster recovery and
business continuity plan, which is intended to minimize service interruptions and secure data integrity, however, our plan may not work
effectively during an emergency. IT system failures may lead to interruption of our operations, which in turn will prevent our clients
from trading and hence significantly reduce client satisfaction and confidence in us, cause loss or reduce potential gain for our clients,
or cause regulatory authorities’ investigation and penalization. Any such system failure could impair our reputation, damage our
brand, subject us to claims and materially and adversely affect our business, financial condition, operating results or prospects.
Failure of third-party systems upon which
we rely could adversely affect our business operation.
Due to the rapid pace of technological changes
in online securities brokerage industry, as described above parts of our business rely on technologies developed or licensed by third
parties, for example, Solomon JFZ conducts securities related and online trading business through a trading platform licensed from third
parties. Any interruption in the third parties’ services, or deterioration in the third parties’ performance or quality could
adversely affect Solomon JFZ’s business operation. Moreover, Solomon JFZ may not be able to obtain or continue to obtain licenses
and technologies from these third parties on reasonable terms, or at all, which could materially impact our business and results of operations.
We may be subject to cyber-attacks, computer
viruses, physical or electronic break-ins or similar disruptions on us our external service providers.
Solomon JFZ’s platform collects, stores
and processes certain personal and other sensitive data from our users. The massive data that we have processed and stored makes us or
external service providers who host our servers a target and potentially vulnerable to cyber-attacks, computer viruses, physical or electronic
break-ins or similar disruptions. While we have taken steps to protect the confidential information that we have access to, our security
measures could be breached. Because techniques used to sabotage or obtain unauthorized access to systems change frequently and generally
are not recognized until they are launched against a target, we may be unable to anticipate these techniques or to implement adequate
preventative measures. Any accidental or willful security breaches or other unauthorized access to our platform could cause confidential
information to be stolen and used for criminal purposes. As personally identifiable and other confidential information is increasingly
subject to legislation and regulation in numerous jurisdictions, any inability to protect confidential information of our clients could
result in additional cost and liability for us, damage our reputation, inhibit the use of our platform and harm our business.
We also face indirect technology, cybersecurity
and operational risks relating to the third parties whom we work with to facilitate or enable our business activities. As a result of
increasing consolidation and interdependence of technology systems, a technology failure, cyber-attack or other information or security
breach that significantly compromises the systems of one entity could have a material impact on our counterparties. Any cyber-attack,
computer virus, physical or electronic break-ins or similar disruptions of such third-party service providers could, among other things,
adversely affect our ability to serve our users, and could even result in the misappropriation of funds of our investors and borrowers.
If that were to occur, both we and third-party service providers could be held liable to clients who suffer losses from the misappropriation.
Security breaches or unauthorized access to confidential
information could also expose us to risk relating to misappropriation of funds of our clients, which may subject us to liabilities, reduce
the attractiveness of our marketplace and cause reputational harm and adversely impact our results of operations and financial condition.
We invest significantly in research and
development, and to the extent our research and development investments are not directed efficiently or do not result in material enhancements
to our technology competencies, our business and results of operations would be harmed.
A key element of our strategy is to invest significantly
in our research and development efforts to enhance the features, functionality, performance, security, availability and ease of use of
Solomon JFZ’s platform and software offerings to address additional applications and use cases that will broaden the appeal of Solomon
JFZ’s platform and facilitate the broad use of its platform across customers with digital transformation needs. If we do not spend
our research and development budget efficiently or effectively on compelling enhancements, innovations and technologies, our business
may be harmed, and we may not realize the expected benefits of our strategy at all or on the timeline we expect. We will need to appropriately
deploy our human resources and may need to hire new employees with highly technical skills, or we may not be able to effectively execute
on our research and development strategy. Moreover, research and development projects can be technically challenging and expensive. As
a result of the nature of research and development cycles, there will be delays between the time we incur expenses associated with research
and development activities and the time we are able to offer compelling enhancements to Solomon JFZ’s platform and software offerings
and generate revenue, if any, from those activities. Additionally, anticipated customer demand for a platform or application enhancement
we are developing could decrease after the development cycle has commenced. If we expend a significant amount of resources on research
and development efforts that do not lead to the successful introduction of functionality or platform improvements that are competitive
in our current or future markets, our business and results of operations will suffer.
We may encounter potential conflicts of
interest from time to time, and the failure to identify and address such conflicts of interest could adversely affect our business.
We face the possibility of actual, potential,
or perceived conflicts of interest in the ordinary course of our business operations. Conflicts of interest may exist between (i) our
different businesses; (ii) us and our clients; (iii) our clients; (iv) us and our employees; and (v) our clients and
our employees. As we expand the scope of our business and client base, it is critical for us to be able to timely address potential conflicts
of interest, including situations where two or more interests within our businesses naturally exist but are in competition or conflict.
However, appropriately identifying and managing actual, potential, or perceived conflicts of interest is complex and difficult, and our
reputation and our clients’ confidence in us could be damaged if we fail, or appears to fail, to deals appropriately with one or
more actual, potential, or perceived conflicts of interest. It is possible that actual, potential, or perceived conflicts of interest
could also give rise to client dissatisfaction, litigation, or regulatory enforcement actions. Regulatory scrutiny of, or litigation in
connection with, conflicts of interest could have a material adverse effect on our reputation, which could materially and adversely affect
our business in a number of ways, including a reluctance of some potential clients and counterparties to do business with us. Any of the
foregoing could materially and adversely affect our reputation, business, financial condition, and results of operations.
We derived a substantial portion of revenue
from a small number of key clients.
We derived a substantial portion of our revenue
from a small number of key clients. We had a concentration of revenues of 92%, 78% and 84% from the top five customers for the years ended
March 31, 2024, 2023 and 2022, respectively.
We have experienced significant growth in the
number of customers due to our reliable and secure trading platform, comprehensive brokerage and value-added services and superior user
experience. From the fiscal year 2022 to the fiscal year 2024, our client base increased at a CAGR of 0.4% from approximately 15,300 to
15,500. As of March 31, 2024, we had more than 15,500 clients who had opened trading accounts with us and over 1,200 active clients who
were registered and had assets in their trading accounts. However, a fast increase in client base did not immediately result in revenue
growth due to poor equity market performance in Hong Kong and a lack of attractive IPOs in the Hong Kong stock market.
Our revenue was initially primarily derived from
securities-related services which is typically highly correlated with the size of the client base. We successfully diversified our revenue
sources during fiscal years 2024 and 2023. Our significant growth in revenue, at a CAGR of 15%, from the fiscal year 2022 to the fiscal
year 2024, was mainly attributable to our revenue diversification strategy by adding investment advisory services, corporate consultancy
services and asset management services. In the fiscal year ended March 31, 2024, our top five customers represented approximately 29%,
26%, 19%, 12% and 6% of the total revenue, respectively, which consisted of one from the securities brokerage segment, three from the
investment advisory service segment, and one from the asset management service segment. In the fiscal year ended March 31, 2023, our top
five customers represented approximately 30%, 13%, 13%, 11% and 11% of the total revenue, respectively, which consisted of one from the
securities brokerage segment, three from the investment advisory service segment, and one from the corporate consultancy service segment.
In the fiscal year ended March 31, 2022, our top five customers represented approximately 51%, 17%, 10%, 3% and 3% of the total revenue,
respectively, which consisted of two from securities brokerage, two from investment advisory service, and one from asset management service.
There are inherent risks whenever a large percentage
of revenues are concentrated in a limited number of clients. It is not possible for us to predict the future level of demand for our services
that will be generated by these key clients. In addition, revenues from our larger clients have historically fluctuated and may continue
to fluctuate based on their trading volume. If these key clients trade less frequently on our platform or suspend or terminate their relationship
with us, our business and results of operation will be adversely affected.
We may fail to implement new business lines,
or introduce new products and services to our clients, or we may fail to successfully expand our business.
Our future success is dependent upon on our ability
to implement new business lines and offer new products and services, to better respond to market changes and clients’ evolving needs.
There are substantial risks and uncertainties associated with these efforts, particularly in instances where the markets are not fully
developed. We may invest significant time and resources in developing and marketing new lines of business and/or new products and services.
Initial timetables for the introduction and development of new lines of business and/or new products or services may not be achieved and
price and profitability targets may not prove feasible. External factors, such as compliance with regulations, competitive alternatives
and shifting market preferences, may also impact the successful implementation of a new line of business or a new product or service.
In addition, new service offerings may not be accepted by the market or be as profitable as we expect. Furthermore, any new line of business
and/or new product or service could have a significant impact on the effectiveness of our system of internal controls. Failure to successfully
manage these risks in the development and implementation of new lines of business or new products or services could have a material adverse
effect on our business, results of operations and financial condition.
In addition, our strategy to expand business operation
and enter into new markets may subject us to additional risks. As we enter into markets that are new to us, we must tailor our services
and business model to the unique circumstances of such countries and markets, which can be complex, difficult, costly and divert management
and personnel resources. In addition, we may face competition in other countries from companies that may have more experience with operations
in such countries or with global operations in general. To continue to expand our services internationally, we may have to comply with
the regulatory controls of each country in which we conduct or intend to conduct business, the requirements of which may not be clearly
defined. Even if we expand our businesses into new jurisdictions or areas, the expansion may not yield intended profitable results.
Fraud, misconduct or errors by our directors,
officers, employees, agents and other third-party service providers could harm our business and reputation.
It is not always possible to identify and deter
fraud, misconduct or errors by directors, employees, agents or external service providers, and the precautions we take to detect and prevent
this activity may not be effective in controlling unknown or unmanaged risks or losses. Fraud or misconduct by any of these persons or
entities may cause us to suffer significant reputational harm and financial loss or result in regulatory disciplinary actions. The potential
harm to our reputation and to our business caused by such fraud or misconduct is impossible to quantify.
We are subject to a number of obligations and
standards arising from our business. The violation of these obligations and standards by any of our directors, officers, employees, agents,
clients, or other third parties could materially and adversely affect us and our investors. For example, we are required to properly handle
confidential information. If our directors, officers, employees, agents, clients, or other third parties were to improperly use or disclose
confidential information, we could suffer serious harm to our reputation, financial position, and existing and future business relationships.
Although we have not identified any material fraud or misconduct by our directors, officers, employees, agents, clients, or other third
parties since Solomon JFZ commenced its current business in 2016, if any of these persons or entities were to engage in fraud or misconduct
or were to be accused of such fraud or misconduct, our business and reputation could be materially and adversely affected.
A significant decrease in our liquidity
could negatively affect our business and financial management as well as reduce client confidence in us.
Maintaining adequate liquidity is crucial to our
business operations. We are subject to liquidity and capital adequacy requirements in Hong Kong, China and Cayman Islands. We meet
our liquidity needs primarily through cash generated by operating activities and capital contribution, as well as cash provided by external
financing. Fluctuations in client cash or deposit balances, as well as changes in regulatory treatment of client deposits or market conditions,
may affect our ability to meet our liquidity needs. A reduction in our liquidity position could reduce our clients’ confidence,
which could result in the loss of client trading accounts or cause us to fail to satisfy liquidity requirements of regulatory authorities.
In addition, failure to meet regulatory capital guidelines can result in investigations and regulatory actions, which may lead to penalties,
including reprimands, fines, limitations or prohibitions on our future business activities or suspension or revocation of our licenses
or trading rights.
In addition, our ability to satisfy our liquidity
and capital needs may be affected by a variety of factors, some of which are beyond our control, including, macroeconomic and socio-political
conditions, fluctuations in cash or deposit balances, increased capital requirements, changes in regulatory guidance or interpretations,
or other regulatory changes. If cash generated by client trading activities and operating earnings is not sufficient for our liquidity
needs, we may be forced to seek external financing. During periods of disruptions in the credit and capital markets, potential sources
of external financing could be reduced, and borrowing costs could increase. Financing may not be available on acceptable terms, or at
all, due to market conditions or disruptions in the credit markets. If we experience any significant decrease in our liquidity, our business,
financial condition and results of operations could be adversely impacted.
We may not succeed in promoting and sustaining
our brand.
We believe that developing and maintaining awareness
of our brand effectively is critical to attracting new and retaining existing clients to our platform. This depends largely on the effectiveness
of our marketing efforts and the success of the channels we use to promote our marketplace. If any of our current marketing channels become
less effective, if we are unable to continue to use any of these channels, if the cost of using these channels were to significantly increase
or if we are not successful in generating new channels, we may not be able to attract new investors and borrowers in a cost-effective
manner or convert potential investors and borrowers into active investors and borrowers on our marketplace.
Our efforts to build our brand may not result
in increased revenues in the immediate future or at all and, even if they do, any increases in revenues may not offset the expenses incurred.
If we fail to successfully promote and maintain our brand while incurring substantial expenses, our results of operations and financial
condition would be adversely affected, which may impair our ability to grow our business.
We face risks related to our know-your-customer,
or KYC procedures when our clients provide outdated, inaccurate, false or misleading information.
We collect client information during the account
opening and during registration for members and we screen accounts against public databases and collaborate with external know-your-customer
(KYC)/ anti-money laundering (AML) vendors for the purpose of verifying client identity and detecting risks. Although we require our clients
to submit documents for proof of their identity and address for completing the account registration and to update such information from
time to time, we face risks as the information provided by our clients may be outdated, inaccurate, false or misleading. We cannot fully
confirm the accuracy, currency and completeness of such information beyond reasonable effort. For example, to reduce the risk of being
subject to complex U.S. laws and regulations, we do not allow U.S. citizens or residents to open an account with us. We require our potential
clients to provide their passports or identity cards as well as self declaration about the foreign status of beneficial owner, we have
licensed personnel review the applications and resolve KYC results before approving for account opening. However, if a potential client
only provides his PRC identity card, which is usually valid for 10 years or more, and misinforms us that he does not also possess
a U.S. passport or permanent resident card, we might not be able to detect such misinformation. In addition, as a client who is not a
U.S. citizen or resident at the time of account registration may later obtain U.S. citizenship or residential status and fail to update
us in a timely manner, our customer database might not be entirely accurate at all times. Despite our efforts to exclude persons who reside
in jurisdictions where we have no license or permit such as the United States, our provision of products and services to such clients
could be in violation of the applicable laws and regulations in those jurisdictions, of which we may have no awareness until we are warned
by the relevant supervising authorities. Despite our safeguards, we could still be subject to certain legal or regulatory sanctions, fines
or penalties, financial loss, or damage to reputation resulting from such violations. In particular, following the consummation of the
Business Combination, as we become increasingly renowned in the United States and worldwide, there is no assurance that we will be
able to successfully identify and exclude all persons who resides in jurisdictions where we have no license or permit to operate, including
the United States. If U.S. citizens and residents were to register on and begin using our platform, we may be subject to the scrutiny
of U.S. regulatory agencies and required to comply with applicable laws and regulations in the United States, including the requirements
to obtain relevant licenses and permits for providing our products to U.S. citizens and residents. We currently do not intend to apply
for such licenses and permits in the United States, and if we determine to do so, there is no guarantee that we will successfully
obtain such licenses in a timely fashion, or at all. We could be subject to disciplinary or other actions by the U.S. regulatory agencies
due to claimed noncompliance which could have a material adverse effect on our business, financial condition and results of operations.
Our clients may engage in fraudulent or
illegal activities on our platform.
We have implemented stringent internal control
policies, insider trading, anti-money laundering and other anti-fraud rules and mechanisms on our platform, for example, we cooperated
with third party search system service provider to check if our clients are politically exposed persons or on certain sanction lists (including
but not limited to the lists of money laundering, terrorist financing or other crimes). Nevertheless, we remain subject to the risk of
fraudulent or illegal activities both on our platform and associated with our clients, funding and other business partners, and third
parties handling client information. Our resources, technologies and fraud detection tools may be insufficient to accurately detect and
prevent fraudulent or illegal activities.
Any misbehavior of or violation by our clients
of applicable laws and regulations could lead to regulatory inquiries and investigations that involve it, which may affect our business
operation and prospects. We might also incur higher costs than expected in order to take additional steps to reduce risks related to fraudulent
and illegal activities. High-profile fraudulent or illegal activities, for example, money laundering, insider trading and securities fraud,
could also lead to regulatory intervention, and may divert our management’s attention and cause us to incur additional regulatory
and litigation expenses and costs. Although our client agreements require clients to acknowledge that they will observe all insider trading,
money laundering and securities fraud laws and regulations in applicable jurisdictions and to assume liabilities for all restrictions,
penalties and other responsibilities arising from conducts suspected to constitute insider trading, money laundering and/or, securities
fraud, we cannot verify whether every transaction conducted by our clients is in compliance with such laws and regulations because our
clients may circumvent our due diligence measures to commit insider trading and/or money laundering. Significant increases in fraudulent
or illegal activities could negatively impact our brand and reputation, reduce the trading volume on our platform and therefore harm our
operating and financial results.
In addition, we could also suffer serious harm
to our reputation, financial condition, client relationships and even be subject to regulatory sanctions and significant legal liability,
if any of our employees engage in illegal or suspicious activities or other misconduct. Although we have not experienced any material
business or reputational harm as a result of fraudulent or illegal activities in the past, we cannot rule out the possibility that any
of the foregoing may occur, causing harm to our business or reputation in the future. If any of the foregoing were to occur, our results
of operations and financial conditions could be materially and adversely affected.
Legislative and regulatory changes may
adversely affect the use, transfer, exchange and value of virtual assets.
Residents, tax residents or persons having a relevant
connection with certain jurisdictions are excluded from carrying out virtual asset transactions in Hong Kong. Changes in the investor’s
place of domicile or the applicable laws may result in the investor violating any legal or regulatory requirements of the applicable jurisdiction
with respect to virtual assets. The investor is responsible for ensuring that any virtual assets transaction is, and remains lawful despite
changes to applicable laws, the investor’s place of domicile and circumstances.
Securities related to virtual assets such as virtual
asset ETFs may be overseen by the legal and regulatory authorities of a number of jurisdictions globally. We may receive notices, queries,
warnings, requests or rulings from one or more authorities upon short notice, or may even be ordered to suspend or terminate any action
in connection with any virtual asset related securities as a whole without prior notice. Furthermore, many aspects of virtual asset related
securities involve untested areas of law and regulation and could be subject to new laws or regulations. Therefore, their legal and regulatory
outcome in all relevant jurisdictions is not possible to predict. The planning, development, marketing, promotion, execution or otherwise
of the virtual assets may be seriously affected, hindered, postponed or terminated as a result of such new laws and/or regulations. Since
regulatory policies can change with or without prior notice, any existing regulatory permissions for or tolerance of virtual assets in
any jurisdiction may be withdrawn without warning. Cryptographic-tokens and cryptocurrencies could be deemed from time to time as a commodity
or virtual commodity, a digital asset or even as money, securities or currency in various jurisdictions and therefore virtual asset related
securities could be prohibited from being purchased, traded or held in certain jurisdictions pursuant to local regulations. In turn, the
virtual assets could be deemed to be a regulated or restricted product. There is no guarantee that virtual assets can maintain any particular
legal or regulatory status in any particular jurisdiction at any time. Changes in regulatory circumstances may impact our
ability to provide virtual assets trading or advisory services.
The nature of virtual assets exposes us
to an increased risk of fraud or cyberattack.
Attempts to steal virtual assets on Solomon JFZ’s
trading platform may occur due to the inherent nature of virtual assets, which exposes customers to an increased risk of fraud or cyberattack. Virtual
assets, investor accounts, custodian exchange services, and our system may be targeted by malicious actors who may attempt to steal virtual
assets or fiat currency, or otherwise intervene in a virtual asset transaction or any service provided by the Company. These threats
include, without limitation, distributed denial of service, cyberattacks, phishing, social engineering, hacking, smurfing, malware, double
spending, majority-mining, consensus-based or other mining attacks, misinformation campaigns, forking and spoofing. Such
events can adversely affect our operations, preventing us from providing services, and potentially result in regulatory investigations.
Under new Item 106 of Regulation S-K, we are required to promptly report material cybersecurity incidents. If we suffer a significant
cybersecurity breach, the market price of our Ordinary Shares could be negatively impacted.
Malicious entities may also target the investor
directly in an attempt to steal any asset held by the investor, or to claim any asset that the investor may have purchased. This may involve
unauthorized access to accounts with us, private keys, addresses, passwords, email or social media accounts, log-in details or devices
such as computers and smartphones used by the investor. Even if the loss of virtual assets is due to investor error, dissatisfaction with
our services may arise, adversely affecting our reputation.
We may not have adequate sources of recovery
if the virtual assets held by us are lost, stolen or destroyed due to third-party virtual assets custodial services or if we cannot redeem
or withdraw our virtual assets invested in crypto lending or investing activities. Such incidents could have a material adverse effect
on our business, financial condition and results of operations.
Solomon JFZ provides trading of various virtual
assets trading in the regulated digital assets trading exchanges, including Bitcoin, Ethereum, Bitcoin spot ETF and Ethereum spot ETF,
supporting in kind subscription of virtual assets spot ETF. Substantially all of our virtual assets were held in custody on Solomon VA+,
licensed from third-party Hundsun Ayers. We believe that the security procedures that Hundsun Ayers utilizes, such as issuing username,
password and hardware tokens, are reasonably designed to safeguard Bitcoin, Ethereum, Bitcoin spot ETF and Ethereum spot ETF and other
virtual assets from theft, loss, destruction or other issues relating to hackers and technological attack. Nevertheless, the security
procedures cannot guarantee the prevention of any loss due to a security breach, software defect or act of God that may be borne by us.
If such virtual assets are lost, stolen or destroyed under circumstances rendering a third party liable to us, it is possible that Hundsun
Ayers may not have the financial resources or insurance sufficient to satisfy any or all of our claims against the third party, or have
the ability to retrieve, restore or replace the lost, stolen or destroyed cryptocurrencies due to governing network protocols and the
strength of the cryptographic systems associated with such virtual assets. To the extent that we are unable to recover on any of our claims
against any such third party, such loss could have a material adverse effect on our business, financial condition and results of operations.
If such services are commercially available, we
will consider adding regulated banks, rather than solely relying on crypto custodian, as the custodian for a material amount of our cryptocurrencies.
Obtaining cryptocurrency custody services from a regulated bank may confer benefits such as improved security and reduced fraud. Nevertheless,
until now, banks have generally declined to provide custody services for cryptocurrencies and other virtual assets, due to the absence
of clarity on permissibility and on regulators’ views of these activities generally in Hong Kong.
Our business depends on the continued efforts
of our senior managements, Mr. Shing Tak Tam, Ms. Lili Liu, Mr. Tze Bun Cheng and Mr. Pong Ming Ting. If one or more of our key executives
were unable or unwilling to continue in their present positions, our business may be severely disrupted.
Our business operations depend on the continued
services of our senior management. While we provide a variety of attractive incentives to our management, we cannot assure you that we
can continue to retain their services. We cannot assure you that our existing senior management members will not terminate their employment
with us in the future. In addition, we do not have any key man insurance for our executive officers or key employees. If one or more of
our key executives were unable or unwilling to continue in their present positions, we may not be able to replace them easily or at all,
our future growth may be constrained, our business may be severely disrupted and our financial condition and results of operations may
be materially and adversely affected, and we may incur additional expenses to recruit, train and retain qualified personnel. In addition,
there is no assurance that any member of our management team will not join one of our competitors or form a competing business. If any
dispute arises between us and our current or former officers, we may have to incur substantial costs and expenses in order to enforce
such agreements in China or we may be unable to enforce them at all.
User growth and activity on mobile devices
depend upon effective use of mobile operating system, networks and standards, over which we do not have control.
As of the date of this prospectus, a majority
of our clients access our services through PC, however, we expect to see a growing number of our clients access our services through our
mobile apps in the future. As new mobile devices and platforms are released, it is difficult to predict the problems we may encounter
in developing applications for these new devices and platforms, and we may need to devote significant resources to the development, support
and maintenance of such applications. In April 2021, Solomon JFZ launched its newly developed all-in-one Solomon app. There are substantial
uncertainties associated with the newly launched app, including compatibility with mobile operating systems, and we cannot assure you
we could operate successfully or as we expected.
In addition, our future growth and our results
of operations could suffer if we experience difficulties in the future in integrating our services into mobile devices or if problems
arise with our relationships with providers of mobile operating systems or mobile app stores, or if we face increased costs to distribute
or have users utilize our services on mobile devices. We are further dependent on the interoperability of providing our services on popular
mobile operating systems that we do not control, such as iOS, Android and PC platform, and any changes in such systems that degrade the
accessibility of our services or give preferential treatment to competing products could adversely affect the usability of our services
on mobile devices. In the event that it is more difficult for our users to access and utilize our services on their mobile devices, or
if our users choose not to access or utilize our services on their mobile devices or to use mobile operating systems that do not offer
access to our services, our user growth could be harmed and our business, financial condition and operating results may be adversely affected.
We may not be able to prevent others from
unauthorized use of our intellectual property, which could harm our business and competitive position.
We regard our trademarks, domain names, know-how,
proprietary technologies and similar intellectual property as critical to our success, and we rely on a combination of intellectual property
laws and contractual arrangements, including confidentiality, invention assignment and non-compete agreements with our employees and others
to protect our proprietary rights. Despite these measures, any of our intellectual property rights could be challenged, invalidated, circumvented
or misappropriated, or such intellectual property may not be sufficient to provide us with competitive advantages.
It is often difficult to maintain and enforce
intellectual property rights. Statutory laws and regulations are subject to judicial interpretation and enforcement and may not be applied
consistently due to the lack of clear guidance on statutory interpretation. Confidentiality, invention assignment and non-compete agreements
may be breached by counterparties, and there may not be adequate remedies available to us for any such breach. Accordingly, we may not
be able to effectively protect our intellectual property rights or to enforce our contractual rights. Preventing any unauthorized use
of our intellectual property is difficult and costly and the steps we take may be inadequate to prevent the misappropriation of our intellectual
property. In the event that we resort to litigation to enforce our intellectual property rights, such litigation could result in substantial
costs and a diversion of our managerial and financial resources. We can provide no assurance that we will prevail in such litigation.
In addition, our trade secrets may be leaked or otherwise become available to, or be independently discovered by, our competitors. To
the extent that our employees or consultants use intellectual property owned by others in their work for us, disputes may arise as to
the rights in related know-how and inventions. Any failure in protecting or enforcing our intellectual property rights could have a material
adverse effect on our business, financial condition and results of operations.
We may be subject to intellectual property
infringement claims, which may be expensive to defend and may disrupt our business and operations.
We cannot be certain that our operations or any
aspects of our business do not or will not infringe upon or otherwise violate trademarks, patents, copyrights, know-how or other intellectual
property rights held by third parties. We may be from time to time in the future subject to legal proceedings and claims relating to the
intellectual property rights of others. In addition, there may be third-party trademarks, patents, copyrights, know-how or other intellectual
property rights that are infringed by our products, services or other aspects of our business without our awareness. Holders of such intellectual
property rights may seek to enforce such intellectual property rights against us in Hong Kong, PRC, the Cayman Islands, the United States
or other jurisdictions. If any third-party infringement claims are brought against us, we may be forced to divert management’s time
and other resources from our business and operations to defend against these claims, regardless of their merits. If we were found to have
violated the intellectual property rights of others, we may be subject to liability for our infringement activities or may be prohibited
from using such intellectual property, and we may incur licensing fees or be forced to develop alternatives of our own. As a result, our
business and results of operations may be materially and adversely affected.
We have no business liability or disruption
insurance, which could expose us to significant costs and business disruption.
The insurance industry in Hong Kong is still at
an early stage of development, and insurance companies in China currently offer limited business-related insurance products. We do not
have any business liability or disruption insurance to cover our HK Subsidiaries’ business operations. We have determined that the
costs of insuring for these risks and the difficulties associated with acquiring such insurance on commercially reasonable terms make
it impractical for us to have such insurance. Any uninsured risks may result in substantial costs and the diversion of resources, which
could adversely affect our results of operations and financial condition.
Solowin relies on dividends and other distributions
on equity paid by its subsidiaries to fund any cash and financing requirements Solowin may have, and any limitation on the ability of
its subsidiaries to make payments to Solowin could have a material adverse effect on our ability to conduct our business.
Solowin is a holding company, and it relies on
dividends and other distributions on equity paid by its subsidiaries for Solowin’s cash and financing requirements, including the
funds necessary to pay dividends and other cash distributions to its shareholders and service any debt it may incur. While Solowin does
not expect to pay cash dividends in the foreseeable future, if any of its subsidiaries incurs debt on their own behalf in the future,
the instruments governing the debt may restrict such subsidiary’s ability to pay dividends or make other distributions to Solowin.
The Companies Act (As Revised) of the Cayman Islands
permits, subject to a solvency test and the provisions, if any, of the Company’s Amended and Restated Memorandum and Articles of
Association, the payment of dividends and distributions out of the share premium account. With the exception of the foregoing, there are
no statutory provisions relating to the payment of dividends. Based upon English case law, which is regarded as persuasive in the Cayman
Islands, dividends may be paid only out of profits.
Under Hong Kong law, dividends could only be paid
out of distributable profits (that is, accumulated realized profits less accumulated realized losses) or other distributable reserves.
Dividends cannot be paid out of share capital. Under the current practice of the Inland Revenue Department of Hong Kong, no tax is payable
in Hong Kong in respect of dividends paid by us.
However, in the future, funds may not be available
to fund operations or for other use outside of Hong Kong, due to interventions in, or the imposition of restrictions and limitations on,
our ability or on our subsidiaries’ ability by the PRC government to transfer cash. Any limitation on the ability of our HK Subsidiaries
to pay dividends or make other distributions to us could materially and adversely limit our ability to grow, make investments or acquisitions
that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business. In addition, if any of our HK subsidiaries
incur debt on its own behalf in the future, the instruments governing such debt may restrict their ability to pay dividends.
We incur substantially increased costs
as a result of being a public company.
We incur significant legal, accounting, and other
expenses as a public company that we did not incur as a private company. The Sarbanes-Oxley Act of 2002, as well as rules subsequently
implemented by the SEC and Nasdaq, impose various requirements on the corporate governance practices of public companies.
Compliance with these rules and regulations increases
our legal and financial compliance costs and makes some corporate activities more time-consuming and costlier. In addition, we will incur
additional costs associated with our public company reporting requirements. It may also be more difficult for us to find qualified persons
to serve on our board of directors or as executive officers.
We are an “emerging growth company,”
as defined in the JOBS Act and will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following
the fifth anniversary of the completion of our initial public offering, (b) in which we have total annual gross revenue of at least $1.235
billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of the Ordinary Shares that is held
by non-affiliates exceeds $700 million as of the prior September 30, and (2) the date on which we have issued more than $1.0 billion in
non-convertible debt during the prior three-year period. An emerging growth company may take advantage of specified reduced reporting
and other requirements that are otherwise applicable generally to public companies. These provisions include exemption from the auditor
attestation requirement under Section 404 in the assessment of the emerging growth company’s internal control over financial reporting
and permission to delay adopting new or revised accounting standards until such time as those standards apply to private companies.
After we are no longer an “emerging growth
company,” or until five years following the completion of our initial public offering, whichever is earlier, we expect to incur
significant additional expenses and devote substantial management effort toward ensuring compliance with the requirements of Section 404
and the other rules and regulations of the SEC.
We are currently evaluating and monitoring developments
with respect to these rules and regulations, and we cannot predict or estimate with any degree of certainty the amount of additional costs
we may incur or the timing of such costs.
A resurgence of the COVID-19 pandemic could
have a material adverse impact on our business, operating results and financial condition.
The COVID-19 outbreak led governments across
the globe to impose a series of measures intended to contain its spread, including border closures, travel bans, quarantine measures,
social distancing, and restrictions on business operations and large gatherings. The outbreak of COVID-19 caused companies like us and
our business partners to implement temporary adjustments to work schedules and travel plans, mandating employees to work from home and
collaborate remotely. As a result, we may have experienced lower efficiency and productivity, internally and externally, which may adversely
affect our service quality. Moreover, our business depends on our employees. If any of our employees has contracted or is suspected of
having contracted COVID-19, these employees will be required to be quarantined and they could pass it to other of our employees, potentially
resulting in severe disruption to our business.
Furthermore, our results of operations were severely
affected by the COVID-19 outbreak. Due to the instability of global financial markets and other economic and financial challenges
brought about by COVID-19, our businesses and clients were adversely affected by travel restrictions preventing PRC residents from travelling
to Hong Kong. More broadly, the COVID-19 outbreak slowed down the global economy and caused significant market volatility and declines
in general economic activities. This may continue to dampen confidence in global markets and potential clients.
Our IPO business, which consists of IPO handling
fees and IPO subscription financing, was severely impacted by the decline of the Hong Kong IPO market activities during the outbreak of
COVID-19. For the fiscal year ended March 31, 2024, revenue from securities brokerage commissions and handling income was $51,000, compared
to $74,000 for the fiscal year ended March 31, 2023, representing a 31% decline. The main reason for this decrease was the drop in handling
income from IPO subscriptions in Hong Kong, which was impacted by the COVID-19 pandemic and continuous uncertain economic conditions in
Hong Kong continuously.
According to the statistical data from HKEX, the
number of IPOs in the Hong Kong stock market has decreased continuously for the past 3 years, reaching 73 in 2023 compared to 90 in 2022
and 98 in 2021. The consistent decline also adversely affected investor confidence. In terms of fundraising, the total amount raised in
the Hong Kong IPO market in 2023 was HK$46.32 billion, down 55.7% from HK$104.57 billion in 2022. The COVID-19 outbreak made it challenging
for clients to open accounts and slowed our active client effective rate. Our active client effective rates for periods during the fiscal
years ended March 31, 2022, 2023 and 2024, which rates are accounted by active client/account opening client, were 53%, 66%, 28%, respectively.
Most of the restrictive measures previously adopted
by the Hong Kong and mainland Chinese governments at various levels to control the spread of the COVID-19 virus have been revoked or replaced
with more flexible measures since December 2022. As a result, we have gradually resumed normal operations since January 2023. We have
recorded a total revenue of $4,291,000 for the fiscal year ended March 31, 2024, compared to $4,453,000 for the year ended March 31, 2023,
a slightly decrease of $162,000, or 4%. However, the extent to which the COVID-19 pandemic may continue to impact our results will depend
on future developments, which are highly uncertain and cannot be certain, including the effectiveness of vaccines and other treatments
for COVID-19, and other new information that may emerge concerning the severity of the pandemic and steps taken to contain the pandemic
or treat its impact, among others. Given the general slowdown in economic conditions globally, volatility in the capital markets as well
as the general negative impact of the COVID-19 outbreak on the corporate finance markets, we cannot assure you that we will be able
to maintain the growth rate we have experienced or projected.
Risks Relating to Doing Business in Jurisdictions
We Operate
Substantially all our operations are in
Hong Kong. However, the legal and operational risks associated with operations in China may also apply to our operations in Hong Kong.
The Chinese government may exercise significant oversight and control over the conduct of our business and may intervene in or influence
our operations at any time, which could result in a material change in our operations and may significantly limit or completely hinder
our ability to offer or continue to offer Ordinary Shares to investors and cause the value of the Ordinary Shares to significantly decline
or be worthless. Changes in the policies, regulations, rules, and the enforcement of laws of the Chinese government may also be quick
with little advance notice and our assertions and beliefs of the risk imposed by the PRC legal and regulatory system cannot be certain.
Solowin is a holding company and we conduct our
operation primarily through our operating subsidiaries in Hong Kong. Solomon JFZ’s operations are primarily located in Hong Kong
and most of our clients are residing in PRC, New Zealand, and Australia. Hong Kong is a Special Administrative Region of the PRC. The
laws previously enacted in Hong Kong, that is, the common law, rules of equity, ordinances, subordinate legislation and customary law
are maintained. As at the date of this prospectus, we are not materially affected by recent statements by the Chinese Government indicating
an extent to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers.
However, the legal and operational risks associated with operations in China may also apply to our operations in Hong Kong, should recent
statements and regulatory actions by China’s government apply to us in the future. Due to long arm provisions under the current
PRC laws and regulations, there remains regulatory uncertainty with respect to the implementation and interpretation of laws in China.
The PRC government may choose to exercise significant oversight and discretion, and the policies, regulations, rules, and the enforcement
of laws of the Chinese government to which we are subject may change rapidly and with little advance notice to us or our shareholders.
As a result, the application, interpretation, and enforcement of new and existing laws and regulations in the PRC and our assertions and
beliefs of the risk imposed by the PRC legal and regulatory system are often uncertain. In addition, these laws and regulations may be
interpreted and applied inconsistently by different agencies or authorities, and inconsistently with our current policies and practices.
New laws, regulations, and other government directives in the PRC may also be costly to comply with, and such compliance or any associated
inquiries or investigations or any other government actions may:
| ● | delay or impede our development; |
| ● | result in negative publicity
or increase our operating costs; |
| ● | require significant management
time and attention; and |
| ● | subject us to remedies, administrative
penalties and even criminal liabilities that may harm our business, including fines assessed for our current or historical operations,
or demands or orders that we modify or even cease our business practices. |
We are aware that recently, the PRC government
initiated a series of regulatory actions and statements to regulate business operations in certain areas in China with little advance
notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies
listed overseas using variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding
the efforts in anti-monopoly enforcement. Since these statements and regulatory actions are new, it is highly uncertain how soon
legislative or administrative regulation making bodies will respond and what existing or new laws or regulations or detailed implementations
and interpretations will be modified or promulgated, if any, and the potential impact such modified or new laws and regulations will have
on our daily business operation, the ability to accept foreign investments and list on an U.S. or other foreign exchange. Specifically
the revised CRM provides that operators of critical information infrastructure purchasing network products and services, and online platform
operators (together with the operators of critical information infrastructure, the “operators”) carrying out data processing
activities that affect or may affect national security, shall conduct a cybersecurity review, and any online platform operator who controls
more than one million users’ personal information must go through a cybersecurity review by the cybersecurity review office if it
seeks to be listed in a foreign country. We believe that we are not subject to PRC cybersecurity review for the following reasons: (i)
we do not hold critical information infrastructure; (ii) we believe our operations will not affect national security; (iii) we do not
hold personal information of more than one million users. In addition, as of the date of this prospectus, we are not subject to the review
or prior approval of the CAC nor the CSRC. We have not received any notice of and is not currently subject to any proceedings initiated
by the CAC or any other PRC regulatory authority. However, since Solomon JFZ’s Solomon VA+ is available to download in the
app stores of China and most of our users are PRC citizens, which may subject us to certain laws and regulations in China. According to
PRC regulations, the content provider engaged in disseminating analysis, forecasting, advisory of other information related to security
needs to obtain the Securities Investment Consultancy Qualifications. Currently, we do not apply for any PRC license regarding the Solomon
VA+. We believe that the Solomon VA+ does not need any PRC license for the following reasons: (i) we do not have any entity
or subsidiary in the PRC; (ii) we conduct our business and operations primarily through our operating subsidiaries in Hong Kong. However,
the PRC government has the ultimate authority to decide whether we have to get the licenses and we cannot assure that without any PRC
license, we will not be subject to regulatory measures including warnings, public condemnation, suspension of Solomon VA+ in the
PRC and other measures. We can assure that we will follow any PRC government’s rule, regulation or instruction regarding Solomon
VA+ as soon as we were informed of the requirements. As such, we collect certain personal data from our customers in connection with
our business and operations and we are subject to various regulatory requirements relating to the security and privacy of data in various
jurisdictions. In addition, we may be subject to heightened regulatory scrutiny from PRC governmental authorities in the future. As there
remains significant uncertainty in the interpretation and enforcement of the DSL and the PRC PIPL, we cannot assure you that we will comply
with such regulations in all respects. In the event that (i) the PRC government expands the categories of industries and companies whose
foreign securities offerings are subject to review by the CSRC or the CAC such that we are required to obtain such permissions or approvals;
or (ii) we inadvertently concluded that relevant permissions or approvals were not required or that we did not receive or maintain relevant
permissions or approvals required, any action taken by the PRC government could significantly limit or completely hinder our operations,
significantly limit or completely hinder our ability to offer the Ordinary Shares to investors, and cause the value of such shares to
significantly decline or become worthless. Any non-compliance with these laws and regulations may subject us to fines, orders to rectify
or terminate any actions that are deemed illegal by regulatory authorities, other penalties, including but not limited to removal of our
apps in China market, as well as reputational damage or legal proceedings against us, which may affect our business, financial condition
or results of operations.
The enactment of Law of the PRC on Safeguarding
the Hong Kong National Security Law could impact our Hong Kong operating subsidiaries.
On June 30, 2020, the SCNPC adopted the Hong Kong
National Security Law (the “Hong Kong National Security Law”). This law defines the duties and government bodies of the Hong
Kong National Security Law for safeguarding national security and four categories of offenses — secession, subversion, terrorist
activities, and collusion with a foreign country or external elements to endanger national security — and their corresponding penalties.
On July 14, 2020, former U.S. President Donald Trump signed the Hong Kong Autonomy Act (“HKAA”) into law, authorizing the
U.S. administration to impose blocking sanctions against individuals and entities who are determined to have materially contributed to
the erosion of Hong Kong’s autonomy. On August 7, 2020, the U.S. government imposed HKAA-authorized sanctions on 11 individuals,
including then-HKSAR chief executive Carrie Lam and John Lee, who later replaced Carrie Lam as chief executive on July 1, 2022.
In July 2021, President Biden warned investors
about the risks of doing business in Hong Kong, issuing an advisory saying China’s push to exert more control over Hong Kong threatens
the rule of law and endangers employees and data. The HKAA further authorizes secondary sanctions, including the imposition of blocking
sanctions, against foreign financial institutions that knowingly conduct a significant transaction with foreign persons sanctioned under
this authority. The imposition of sanctions may directly affect the foreign financial institutions as well as any third parties or customers
dealing with any foreign financial institution that are targeted. It is difficult to predict the full impact of the Hong Kong National
Security Law and HKAA on Hong Kong and companies located in Hong Kong. If we and our subsidiaries are determined to be in violation of
the Hong Kong National Security Law or the HKAA by competent authorities, our business operations could be materially and adversely affected.
A downturn in the Hong Kong, China
or the global economy, and changes in economic and political policies of China, could materially and adversely affect our business and
financial condition.
Our business, prospects, financial condition and
results of operations may be influenced to a significant degree by political, economic and social conditions in Hong Kong and China
generally and by continued economic growth in Hong Kong and China as a whole. The Chinese economy differs from the economies of most
developed countries in many respects, including the fact that it:
| ● | has a high level of government
involvement; |
| ● | is in the early stages of development
of a market-oriented economy; |
| ● | has experienced rapid growth;
and |
| ● | has a tightly controlled foreign
exchange policy |
While the Chinese economy has experienced significant
growth over the past decades, growth has been uneven, both geographically and among various sectors of the economy. The Chinese government
has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures may benefit
the overall Chinese economy, but may have a negative effect on us.
Economic conditions in Hong Kong and China
are sensitive to global economic conditions. Any prolonged slowdown in the global or Chinese economy may affect potential clients’
confidence in financial market as a whole and have a negative impact on our business, results of operations and financial condition. Additionally,
continued turbulence in the international markets may adversely affect our ability to access the capital markets to meet liquidity needs.
There are political risks associated with
conducting business in Hong Kong.
Any adverse economic, social, and/or political
conditions, material social unrest, strike, riot, civil disturbance, or disobedience, as well as significant natural disasters, may affect
the market may adversely affect the business operations of Solomon JFZ. Hong Kong is a special administrative region of the PRC and the
basic policies of the PRC regarding Hong Kong are reflected in the Basic Law, namely, Hong Kong’s constitutional document, which
provides Hong Kong with a high degree of autonomy and executive, legislative, and independent judicial powers, including that of final
adjudication under the principle of “one country, two systems.” However, there is no assurance that there will not be any
changes in the economic, political, and legal environment in Hong Kong in the future. Since our operation is based in Hong Kong, any change
of such political arrangements may pose immediate threat to the stability of the economy in Hong Kong, thereby directly and adversely
affecting our results of operations and financial positions. Under the Basic Law, Hong Kong is exclusively in charge of its internal affairs
and external relations, while the government of the PRC is responsible for its foreign affairs and defense. As a separate customs territory,
Hong Kong maintains and develops relations with foreign states and regions. Based on certain recent development, including the Hong Kong
National Security Law enacted by the SCNPC in June 2020, the U.S. State Department has indicated that the United States no longer considers
Hong Kong to have significant autonomy from China and, at the time, President Donald Trump signed an executive order and HKAA to remove
Hong Kong’s preferential trade status and to authorize the U.S. administration to impose blocking sanctions against individuals
and entities who are determined to have materially contributed to the erosion of Hong Kong’s autonomy. The United States may impose
the same tariffs and other trade restrictions on exports from Hong Kong that it places on goods from mainland China.
These and other recent actions may represent an
escalation in political and trade tensions involving the United States, China, and Hong Kong, which could potentially harm our business.
Given the relatively small geographical size of Hong Kong, any of such incidents may have a widespread effect on our business operations,
which could in turn adversely and materially affect our business, results of operations, and financial condition. It is difficult to predict
the full impact of the HKAA on Hong Kong and companies with operations in Hong Kong like us. Furthermore, legislative or administrative
actions in respect to China-U.S. relations could cause investor uncertainty for affected issuers, including us, and the market price of
the Ordinary Shares could be adversely affected.
The Ordinary Shares may be prohibited from
trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate completely auditors located
in China or Hong Kong. The delisting of the Ordinary Shares, or the threat of their being delisted, may materially and adversely affect
the value of your investment.
U.S. public companies that have substantially
all of their operations in China and Hong Kong have been the subject of intense scrutiny, criticism and negative publicity by investors,
financial commentators and regulatory agencies, such as the SEC. Much of the scrutiny, criticism and negative publicity has centered on
financial and accounting irregularities and mistakes, a lack of effective internal controls over financial accounting, inadequate corporate
governance policies or a lack of adherence thereto and, in many cases, allegations of fraud.
On May 20, 2020, the U.S. Senate passed the HFCA
Act requiring a foreign company to certify it is not owned or controlled by a foreign government if the PCAOB is unable to audit specified
reports because the company uses a foreign auditor not subject to PCAOB inspection. In addition, if the PCAOB is unable to inspect the
company’s auditors for three consecutive years, the issuer’s securities are prohibited to trade on a national exchange. On
December 2, 2020, the U.S. House of Representatives approved the HFCA Act and it was signed into law on December 18, 2020.
On June 22, 2021, the U.S. Senate passed the AHFCAA,
which, if enacted, would amend the HFCA Act and require the SEC to prohibit an issuer’s securities from trading on any U.S. stock
exchanges if its audit work cannot be inspected when its auditor is subject to PCAOB inspections for two consecutive years instead of
three and, thus, would reduce the time before the Ordinary Shares may be prohibited from trading or delisted. In December 2022, an omnibus
spending bill was signed into law, which included the enactment of provisions under the AHFCAA to accelerate the timeline for implementation
of trading prohibitions under the HFCA Act from three consecutive years to two consecutive years.
On December 2, 2021, the SEC adopted amendments
to finalize rules implementing the submission and disclosure requirements in the HFCA Act. The rules apply to registrants the SEC identifies
as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction
and that the PCAOB is unable to inspect or investigate (“Commission-Identified Issuers”). The final amendments require Commission-Identified
Issuers to submit documentation to the SEC establishing that, if true, it is not owned or controlled by a governmental entity in the public
accounting firm’s foreign jurisdiction. The amendments also require that a Commission-Identified Issuer that is a “foreign
issuer,” as defined in Exchange Act Rule 3b-4, provide certain additional disclosures in its annual report for itself and any of
its consolidated foreign operating entities. A Commission-Identified Issuer will be required to comply with the submission and disclosure
requirements in the annual report for each year in which it was identified. Accordingly, if we are determined by the SEC to be a Commission-Identified
Issuer, we will incur additional costs in complying with the submission and disclosure requirements in the annual report for each year
in which we are identified. In the event that we are deemed to have had two consecutive “non-inspection” years by the SEC,
our securities will be prohibited from trading on any national securities exchange or over-the-counter markets in the United States.
On December 16, 2021, pursuant to the HFCA Act,
the PCAOB issued a Determination Report which found that the PCAOB is unable to inspect or investigate completely registered public accounting
firms headquartered in the PRC and Hong Kong, because of a position taken by one or more authorities in such jurisdictions. In addition,
the PCAOB’s report identified specific registered public accounting firms which are subject to these determinations. Our current
registered public accounting firm, WWC, P.C., is not headquartered in the PRC or Hong Kong and was not identified in this prospectus as
a firm subject to the PCAOB’s determination. WWC, P.C. is a U.S.-based accounting firm that is registered with the PCAOB and can
be inspected by the PCAOB. We have no current intention of engaging any auditor not based in the U.S. and not subject to regular inspection
by the PCAOB. Furthermore, the PCAOB is able to inspect the audit workpapers of our Hong Kong subsidiaries, as such workpapers are electronic
files possessed by our registered public accounting firms. However, if the PCAOB determines in the future that it cannot inspect or fully
investigate our auditor at such future time, trading in our securities would be prohibited under the HFCA Act.
On August 26, 2022, CSRC, the MOF, and the PCAOB
signed the Protocol, governing inspections and investigations of audit firms based in China and Hong Kong. The Protocol remains unpublished
and is subject to further explanation and implementation. Pursuant to the fact sheet with respect to the Protocol disclosed by the SEC,
the PCAOB shall have independent discretion to select any issuer audits for inspection or investigation and has the unfettered ability
to transfer information to the SEC. On December 15, 2022, the PCAOB made a statement announcing that it was able, in 2022, to inspect
and investigate completely issuer audit engagements of PCAOB-registered public accounting firms headquartered in China and Hong Kong and
as a result, vacated its December 16, 2021 determination. However, uncertainties still exist as to whether the PCAOB will have continued
access for complete inspections and investigations in the future. When the PCAOB reassesses its determinations in the future, it could
still determine that it is unable to inspect and investigate completely accounting firms based in mainland China and Hong Kong. The PCAOB
has also indicated that it will act immediately to consider the need to issue new determinations with the HFCA Act if needed. There can
be no assurance that we will continue to be able to comply with requirements imposed by U.S. regulators if there is significant change
to current political arrangements between mainland China and Hong Kong or if the PCAOB is not able to fully inspect any component of our
auditor’s work papers in the future. Delisting of the Ordinary Shares would force holders of the Ordinary Shares to sell their Ordinary
Shares. The market price of the Ordinary Shares could be adversely affected as a result of anticipated negative impacts of these executive
or legislative actions, regardless of whether these executive or legislative actions are implemented and regardless of our actual operating
performance.
PRC regulations relating to offshore investment
activities by PRC residents may subject us or our PRC resident beneficial owners to liability or penalties, limit our ability to conduct
business in the PRC or may otherwise adversely affect us.
On July 4, 2014, SAFE issued the Circular on Issues
Concerning Foreign Exchange Control over the Overseas Investment and Financing and Round-trip Investment by Domestic Residents via Special
Purpose Vehicles, or “SAFE Circular 37.” According to SAFE Circular 37, prior registration with the local SAFE branch is required
for PRC residents, (including PRC individuals and PRC corporate entities as well as foreign individuals that are deemed as PRC residents
for foreign exchange administration purpose), in connection with their direct or indirect contribution of domestic assets or interests
to offshore special purpose vehicles, or “SPVs.” SAFE Circular 37 further requires amendments to the SAFE registrations in
the event of any changes with respect to the basic information of the offshore SPV, such as change of a PRC individual shareholder, name,
and operation term, or any significant changes with respect to the offshore SPV, such as an increase or decrease of capital contribution,
share transfer or exchange, or mergers or divisions. SAFE Circular 37 is applicable to beneficial owners of the Ordinary Shares who are
PRC residents. In February 2015, SAFE promulgated a Circular on Further Simplifying and Improving Foreign Exchange Administration Policy
on Direct Investment, or “SAFE Circular 13,” effective in June 2015. Under SAFE Circular 13, applications for foreign exchange
registration of inbound foreign direct investments and outbound overseas direct investments, including those required under SAFE Circular
37, will be filed with qualified banks instead of SAFE. The qualified banks will directly examine the applications and accept registrations
under the supervision of SAFE.
We cannot provide any assurance that our current
or future PRC resident beneficial owners will always comply with our request to make or obtain any applicable registrations or continuously
comply with all registration procedures set forth in these SAFE regulations. Such failure or inability of our PRC resident beneficial
owners to comply with these SAFE regulations may subject us or our PRC resident beneficial owners to fines and legal sanctions, or restrict
our cross-border business activities, as a result of which our business operations and our ability to distribute profits to you could
be materially and adversely affected.
The Hong Kong and China legal systems
are evolving and embody uncertainties which could limit the legal protections available to us. Uncertainties with respect to the PRC legal
system, including uncertainties regarding the enforcement of laws, and sudden or unexpected changes in laws and regulations in China could
adversely affect us.
Hong Kong is a Special Administrative Region
of the PRC. Following British colonial rule from 1842 to 1997, China assumed sovereignty under the “one country, two systems”
principle. The Hong Kong Special Administrative Region’s constitutional document, the Basic Law, ensures that the current political
situation will remain in effect for 50 years. Hong Kong has enjoyed the freedom to function in a high degree of autonomy for
its affairs, including currencies, immigration and custom, independent judiciary system and parliamentary system. On July 14, 2020, the
United States signed an executive order to end the special status enjoyed by Hong Kong post-1997. As the autonomy currently enjoyed were
compromised, it could potentially impact Hong Kong’s common law legal system and may in turn bring about uncertainty in, for
example, the enforcement of our contractual rights. This could, in turn, materially and adversely affect our business and operation. Additionally,
intellectual property rights and confidentiality protections in Hong Kong may not be as effective as in the United States or
other countries. Accordingly, we cannot predict the effect of future developments in the Hong Kong legal system, including the promulgation
of new laws, changes to existing laws or the interpretation or enforcement thereof, or the pre-emption of local regulations by national
laws. These uncertainties could limit the legal protections available to us, including our ability to enforce our agreements with our
clients.
By contrast, China’s legal system is a civil
law system based on written statutes. Unlike common law systems, it is a system in which prior court decisions have limited value as precedents.
Since 1979, the PRC government has promulgated laws and regulations governing economic matters in general, such as foreign investment,
corporate organization and governance, commerce, taxation and trade. However, China has not developed a fully integrated legal system.
As a result, recently enacted laws and regulations may not sufficiently cover all aspects of economic activities in China. In particular,
because these laws and regulations are relatively new and the limited volume of published cases and their non-binding nature, interpretation
and enforcement of these newer laws and regulations involve greater uncertainties than those in jurisdictions available to you. In addition,
China’s legal system is based in part on government policies and administrative rules, and many have retroactive effects. Since
the PRC legal system continues to evolve rapidly, the interpretations of many laws, regulations and rules are not always uniform and enforcement
of these laws, regulations and rules involves uncertainties, which may limit legal protections available to us. As a result, we cannot
predict the effect of future developments in China’s legal system, including the promulgation of new laws, changes to existing laws,
or the interpretation or enforcement thereof, or the pre-emption of local regulations by national laws. We may not be aware of our violation
of these policies and rules until sometime after the violation. Such uncertainties could adversely affect our business that relates to
China or PRC citizens.
Hong Kong regulatory requirement of prior
approval for transfer of shares in excess of certain threshold may restrict future takeovers and other transactions.
Section 132 of Securities and Futures Ordinance
(Cap. 571 of the laws of Hong Kong) (the “SFO”) requires a person (including a corporation) to apply for prior approval
from the HKSFC to become a substantial or continue to be shareholder of a HKSFC-licensed company in Hong Kong. Under the SFO, a person
is regarded as a “substantial shareholder” of a licensed company if he, either alone or with associates, has an interest in
share in the licensed company the aggregate number of which shares is equal to more than 10% of the total number of issued shares of the
licensed company, or is entitled to, either directly or indirectly, exercise or control the exercise of the voting power of more than
10% of the voting power at general meetings of the licensed company, or hold shares in any other corporation which entitles the person,
either alone or with any of his associates and either directly or indirectly, exercises or control the exercise of 35% or more of the
voting power at the general meetings of the other corporation, of or a further corporation, that controls either alone or with any of
its associates and either directly or indirectly, more than 10% of the voting power at general meetings of the licensed company. Further,
all potential parties who will be new substantial shareholder(s) of Solomon JFZ, our HKSFC-licensed subsidiary, is required to seek prior
approval from the HKSFC. This regulatory requirement may discourage, delay or prevent a change in control of Solomon JFZ, which could
deprive our shareholders the opportunity to receive a premium for their shares as part of a future sale and may reduce the price of the
Ordinary Shares upon the consummation of a future proposed business combination.
We may become subject to a variety of PRC
laws and other obligations regarding cyber security, data protection, overseas offerings and/or foreign investment in China-based issuers,
and any failure to comply with applicable laws and obligations could have a material and adverse effect on our business, financial condition,
and results of operations and may hinder our ability to offer or continue to offer Ordinary Shares to investors and cause the value of
the Ordinary Shares to significantly decline or be worthless.
We may become subject to a variety of laws and
regulations in the PRC regarding privacy, data security, cybersecurity, data protection and overseas offering. These laws and regulations
are continuously evolving and developing. The scope and interpretation of the laws that are or may be applicable to us are often uncertain
and may be conflicting, particularly with respect to foreign laws. In particular, there are numerous laws and regulations regarding privacy
and the collection, sharing, use, processing, disclosure, and protection of personal information and other user data. Such laws and regulations
often vary in scope, may be subject to differing interpretations, and may be inconsistent among different jurisdictions.
On June 10, 2021, the SCNPC enacted the PDSL,
which took effect on September 1, 2021. The law requires data collection to be conducted in a legitimate and proper manner, and stipulates
that, for the purpose of data protection, data processing activities must be conducted based on data classification and hierarchical protection
system for data security and no organization or individual within the territory of the PRC may provide foreign judicial or law enforcement
authorities with the data stored within the territory of the PRC without the approval of the competent authorities of the PRC.
On July 6, 2021, the General Office of the Communist
Party of China Central Committee and the General Office of the State Council jointly issued a document to crack down on illegal activities
in the securities market and promote the high-quality development of the capital market, which, among other things, requires the relevant
governmental authorities to strengthen cross-border oversight of law-enforcement and judicial cooperation, to enhance supervision over
China-based companies listed overseas, and to establish and improve the system of extraterritorial application of the PRC securities laws.
These opinions proposed to take effective measures, such as promoting the construction of relevant regulatory systems, to deal with the
risks and incidents facing China-based overseas-listed companies and the demand for cybersecurity and data privacy protection. On February
17, 2023, with the approval of the State Council, the CSRC issued the New Overseas Listing Rules, which became effective on March 31,
2023. According to the New Overseas Listing Rules, domestic enterprises are required to file with CSRC by submitting filing reports, legal
opinions and other relevant materials in the following two situations: (i) a domestic company that seeks to offer or list securities overseas,
both directly and indirectly, should fulfill the filing procedures with the CSRC; (2) where a domestic company seeks to indirectly offer
and list securities in an overseas market, the issuer shall designate a major domestic operating entity responsible for all filing procedures
with the CSRC. In addition, if the issuer meets both of the following conditions, the overseas offering and listing shall be determined
as an indirect overseas offering and listing by a domestic company: (i) any of the revenues, profits, total assets or net assets of the
domestic operating entity in the most recent fiscal year accounts for more than 50% of the corresponding figure in the issuer’s
audited consolidated financial statements for the same period; (ii) its major operational activities are carried out in mainland China
or its main places of business are located in mainland China, or the senior managers in charge of operation and management of the issuer
are mostly Chinese citizens or mainland China residents. The determination will be based on the “substance over form” principle,
requiring securities companies and law firms to conduct comprehensive verification and identification to determine whether the filing
documents fail to prove whether the enterprise falls into the above situations that require the filing. When an issuer makes an application
for an initial public offering in an overseas market, the issuer shall submit filings with the CSRC within three business days after such
application is submitted overseas.
On July 10, 2021, the CAC issued the Revised Draft,
which required that, among others, in addition to “operator of critical information infrastructure” any “data processor”
controlling personal information of no less than one million users which seeks to list in a foreign stock exchange should also be subject
to cybersecurity review. Pursuant to Article 6 of the Revised Draft, companies holding data or more than one million users must apply
for cybersecurity approval when seeking overseas listings because of the risk that such data and personal information could be “affected,
controlled, and maliciously exploited by foreign governments.” On December 28, 2021, the CAC published the revised CRM, which further
restates and expands the applicable scope of the cybersecurity review. The revised CRM took effect on February 15, 2022, and replaced
the Revised Draft issued on July 10, 2021. The revised CRM provides that operators of critical information infrastructure purchasing network
products and services, and online platform operators (together with the operators of critical information infrastructure, the “operators”)
carrying out data processing activities that affect or may affect national security, shall conduct a cybersecurity review, and any online
platform operator who controls more than one million users’ personal information must go through a cybersecurity review by the cybersecurity
review office if it seeks to be listed in a foreign country.
Given that (1) our HK Subsidiaries are incorporated
and located in Hong Kong and none of them controls more than one million users’ personal information; (2) we have no subsidiary,
VIE structure, nor any direct operations in mainland China; (3) the primary focus of our business operations is located outside mainland
China and the majority of our senior management personnel, who are responsible for the daily operation and management, are Hong Kong citizens
and do not reside in mainland China; (4) we possess minimum amount of personal information to achieve the purpose of processing in our
business operations with minimal impact on the rights and interests of individuals; (5) all of the data and personal information of our
clients are securely stored on equipment owned by an HKEX certified server provider located in Hong Kong; (6) data processed in our business
does not have a bearing on national security and thus may not be classified as core or important data by the authorities ; and (7) pursuant
to the Basic Law, which is a national law of the PRC and the constitutional document for Hong Kong, national laws of the PRC shall not
be applied in Hong Kong except for those listed in Annex III of the Basic Law (which is confined to laws relating to defense and foreign
affairs, as well as other matters outside the autonomy of Hong Kong), We do not currently expect the revised CRM, the DSL, the PRC PIPL,
and the New Overseas Listing Rules to have an impact on our business, operations, or future offerings.
Nevertheless, the legal and operational risks
associated with operations in China may apply to our operations in Hong Kong, should recent statements and regulatory actions by China’s
government apply to us in the future. Since these statements and regulatory actions are relatively new, it is highly uncertain how soon
the legislative or administrative regulation-making bodies will respond and what existing or new laws or regulations or detailed implementations
and interpretations will be modified or promulgated, if any. It is also highly uncertain what the potential impact such modified or new
laws and regulations will have on the daily business operations of our operating subsidiaries, their abilities to accept foreign investments
and the listing of the Ordinary Shares on a U.S. or other foreign exchanges. There remains significant uncertainty in the interpretation
and enforcement of relevant PRC cybersecurity laws and regulations. If the New Overseas Listing Rules further expand their scope of application,
we may be required to make a filing with the CSRC. If the revised CRM or the PRC PIPL or any other PRC regulations like the Draft Assessment
Measures for the Security of Personal Information Leaving the Country are required to be applicable to our operating HK Subsidiaries by
PRC authorities, our business operation could be subject to the CAC’s cybersecurity review or a CSRC review in the future. If any
of our operating subsidiaries becomes subject to the CAC or CSRC review, we cannot assure you that our operating subsidiaries will be
able to comply with the regulatory requirements in all respects, and the current practice of collecting and processing personal information
may be ordered to be rectified or terminated by regulatory authorities. In the event of a failure to comply, our operating subsidiaries
may become subject to fines and other penalties that may have a material adverse effect on our business, operations, and financial condition
and may hinder our ability to offer or continue to offer Ordinary Shares to investors and cause the value of the Ordinary Shares to significantly
decline or be worthless.
We may be treated as a non-resident enterprise
for PRC tax purposes under the PRC Enterprise Income Tax Law, and we may therefore be subject to income tax on our income from PRC residents.
Under the PRC Enterprise Income Tax Law and its
implementation rules, a foreign enterprise which has no establishment or place in the PRC but derives profit from sources in the PRC will
be subject to the enterprise income tax on its PRC income. We believe that our income from PRC residents may not be the profit from sources
in the PRC and hence, we are not a non-resident enterprise subject to PRC income tax for the following reasons: (i) we conduct our operations
through our operating subsidiaries in Hong Kong; (ii) we have no subsidiary, VIE structure, nor any direct operations in the PRC; (iii)
we do not have income directly from PRC accounts. However, whether we have income from sources in the PRC is subject to determination
by the PRC tax authorities. There is uncertainty that with the development of our business, part of our profit might be deemed as profit
from sources in the PRC and we might be subject to PRC income tax.
In addition to the uncertainty as to the application
of the “non-resident enterprise” classification, we cannot assure you that the PRC government will not amend or revise the
taxation laws, rules and regulations to impose stricter tax requirements, such as the potential imposition of transaction taxes, or higher
tax rates. Any of such changes could materially and adversely affect our financial condition and results of operations.
Risks Relating
to Ownership of the Ordinary Shares
We have experienced extreme stock price
volatility unrelated to our actual or expected operating performance, financial condition or prospects, making it difficult for prospective
investors to assess the rapidly changing value of the Ordinary Shares.
The US stock market has
witnessed instances of extreme stock price run-ups followed by rapid price declines in 2022 and such share price volatility seemed unrelated
to the issuers’ performance subsequent to their recent initial public offerings, especially among companies with relatively smaller
public floats. As a relatively small-capitalized company with a small public float, the share price of the Ordinary Shares has experienced
extreme volatility after they were listed in September 2023. Additionally, we may also experience lower trading volume and less liquidity
than large-capitalized companies. Although the specific cause of such volatility is unclear, our anticipated small public float may amplify
the impact the actions taken by a few shareholders have on the price of the Ordinary Shares, which may cause our share price to deviate,
potentially significantly, from a price that better reflects the underlying performance of our business. The extreme volatility may confuse
public investors regarding the value of our shares, distort the market perception of our share price and our company’s financial
performance and public image, and negatively affect the long-term liquidity of the Ordinary Shares, regardless of our actual or expected
operating performance. Should the Ordinary Shares continue to experience run-ups and declines that are seemingly unrelated to our actual
or expected operating performance and financial condition or prospects, prospective investors may have difficulty assessing the rapidly
changing value of the Ordinary Shares and our ability to access the capital market may be materially adversely affected. In addition,
if the trading volumes of the Ordinary Shares are low, holders of the Ordinary Shares may also not be able to readily liquidate their
investment or may be forced to sell at depressed prices due to low volume trading. As a result of this volatility, investors may experience
losses on their investment in the Ordinary Shares.
We may not be able to maintain a listing
of the Ordinary Shares on Nasdaq.
If we fail to meet Nasdaq’s continued listing
requirements, the Ordinary Shares may be delisted. In addition, our board of directors may determine that the cost of maintaining our
listing on a national securities exchange outweighs the benefits of such listing. A delisting of the Ordinary Shares from Nasdaq may materially
impair our shareholders’ ability to buy and sell the Ordinary Shares and could have an adverse effect on the market price of, and
the efficiency of the trading market for, the Ordinary Shares. The delisting of the Ordinary Shares could significantly impair our ability
to raise capital and the value of your investment.
If securities or industry analysts publish
unfavorable research, or do not continue to cover us, our share price and trading volume could decline.
The trading market for the Ordinary Shares depends
in part on the research and reports that securities or industry analysts publish about us. We do not have any control over these analysts.
If an analyst downgrades the Ordinary Shares or publishes unfavorable research about our business, the price of Ordinary Shares would
likely decline. If an analyst ceases coverage of us or fails to publish reports on us regularly, we could lose visibility in the financial
markets and demand for the Ordinary Shares could decrease, which could cause the share price or trading volume to decline.
We have not historically declared or paid
dividends on the Ordinary Shares and, consequently, your ability to achieve a return on your investment will depend on appreciation in
the price of the Ordinary Shares.
We have not historically declared or paid dividends
on the Ordinary Shares. We currently intend to invest our future earnings, if any, to fund our growth, to develop business, for working
capital needs, to reduce debt and for general corporate purposes. We do not expect to declare or pay any dividends in the foreseeable
future. Therefore, the success of an investment in the Ordinary Shares will depend upon any future appreciation in their value. There
is no guarantee that the Ordinary Shares will appreciate in value or even maintain their current value.
Any decision to pay dividends in the future will
be at the full discretion of our board of directors and will depend upon various factors then existing, including earnings, financial
condition, results of operations, capital requirements, level of indebtedness, restrictions imposed by applicable law, general business
conditions and other factors that our board of directors may deem relevant.
We may issue additional equity or debt securities,
which are senior to the Ordinary Shares as to distributions and in liquidation, which could materially adversely affect the market price
of the Ordinary Shares.
In the future, we may attempt to increase our
capital resources by entering into additional debt or debt-like financing that is secured by all or up to all of our assets, or issuing
debt or equity securities, which could include issuances of commercial paper, medium-term notes, senior notes, subordinated notes or shares.
In the event of our liquidation, our lenders and holders of our debt securities would receive a distribution of our available assets before
distributions to our shareholders of Ordinary Shares. In addition, any additional preferred shares, if issued by our company, may have
a preference with respect to distributions and upon liquidation, which could further limit our ability to make distributions to our shareholders
of Ordinary Shares. Because our decision to incur debt and issue securities in our future offerings will depend on market conditions and
other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings and debt financing.
Further, market conditions could require us to
accept less favorable terms for the issuance of our securities in the future. Thus, you will bear the risk of our future offerings reducing
the value of your Ordinary Shares and diluting your interest in our company.
Our directors, officers and principal shareholders
have significant voting power and may take actions that may not be in the best interests of our other shareholders.
Our directors, officers and principal shareholders
hold in aggregate approximately 68.84% of our shares. We are not considered a “controlled company” under Nasdaq corporate
governance rules as we do not currently expect that more than 50% of our voting power will be held by an individual, a group or another
company. These shareholders, however, if they act together, will be able to control the management and affairs of our company and most
matters requiring shareholder approval, including the election of directors and approval of significant corporate transactions. The interests
of these shareholders may not be the same as or may even conflict with your interests. For example, these shareholders could attempt to
delay or prevent a change in control of us, even if such change in control would benefit our other shareholders, which could deprive our
shareholders of an opportunity to receive a premium for their Ordinary Shares as part of a sale of us or our assets, and might affect
the prevailing market price of the Ordinary Shares due to investors’ perceptions that conflicts of interest may exist or arise.
As a result, this concentration of ownership may not be in the best interests of our other shareholders.
We are a foreign
private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to
U.S. domestic public companies.
Because we qualify as
a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the securities rules and regulations in the
United States that are applicable to U.S. domestic issuers, including:
| ● | the rules under the Exchange
Act requiring the filing with the SEC of quarterly reports on Form 10-Q or current reports on Form 8-K; |
| ● | Section 14 of the Exchange
Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act; |
| ● | Section 16 of the Exchange
Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from
trades made in a short period of time; and |
| ● | the selective disclosure rules
by issuers of material nonpublic information under Regulation FD. |
We are required to file
an annual report on Form 20-F within four months of the end of each fiscal year. In addition, we may publish our results on a quarterly
basis as press releases, distributed pursuant to the rules and regulations of the Nasdaq Stock Market. Press releases relating to financial
results and material events will also be furnished to the SEC in reports on Form 6-K. However, the information we are required to file
with or furnish to the SEC will be less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic
issuers. As a result, you may not be afforded the same protections or information that would be made available to you were you investing
in a U.S. domestic issuer.
As a foreign private issuer, we are permitted
to rely on exemptions from certain Nasdaq corporate governance standards applicable to domestic U.S. issuers. This may afford less protection
to holders of our shares.
We are exempted from certain corporate governance
requirements of Nasdaq by virtue of being a foreign private issuer. As a foreign private issuer, we are permitted to follow the governance
practices of our home country, the Cayman Islands, in lieu of certain corporate governance requirements of Nasdaq. As result, the standards
applicable to us are considerably different than the standards applied to domestic U.S. issuers. For instance, we are not required to:
| ● | have a majority of the board
be independent (although all of the members of the audit committee must be independent under the Exchange Act); |
| ● | have a compensation committee
and a nominating committee to be comprised solely of “independent directors”; or |
| ● | hold an annual meeting of shareholders
no later than one year after the end of our fiscal year. |
Nasdaq listing rules may require shareholder approval
for certain corporate matters, such as requiring that shareholders be given the opportunity to vote on all equity compensation plans and
material revisions to those plans, certain Ordinary Share issuances. We intend to comply with the requirements of Nasdaq listing rules
to have a majority of the board be independent and to appoint a compensation committee and a nominating and corporate governance committee.
We may, however, in the future consider following home country practice in lieu of the requirements under Nasdaq listing rules with respect
to certain corporate governance standards which may afford less protection to investors than they would otherwise enjoy under the Nasdaq
corporate governance listing standards applicable to U.S. domestic issuers.
We may lose our foreign private issuer status
in the future, which could result in significant additional costs and expenses.
We would lose our foreign private issuer status
if, for example, more than 50% of the Ordinary Shares are directly or indirectly held by residents of the United States and we fail to
meet additional requirements necessary to maintain our foreign private issuer status. If we lose our foreign private issuer status on
this date, we will be required to file with the SEC periodic reports and registration statements on U.S. domestic issuer forms, which
are more detailed and extensive than the forms available to a foreign private issuer. We will also have to mandatorily comply with U.S.
federal proxy requirements, and our officers, directors, and principal shareholders will become subject to the short-swing profit disclosure
and recovery provisions of Section 16 of the Exchange Act. In addition, we will lose our ability to rely upon exemptions from certain
corporate governance requirements under the Nasdaq rules. As a U.S.-listed public company that is not a foreign private issuer, we will
incur significant additional legal, accounting, and other expenses that we will not incur as a foreign private issuer in order to maintain
a listing on a U.S. securities exchange.
You may be unable to present proposals before
annual general meetings or extraordinary general meetings not called by shareholders.
Cayman Islands law provides shareholders with
only limited rights to convene a general meeting and does not provide shareholders with any right to put any proposal before a general
meeting. However, these rights may be provided in a company’s articles of association.
Solowin’s Amended and Restated Memorandum
and Articles of Association do not provide its shareholders with any right to requisition a general meeting or to put any proposals before
annual general meetings or extraordinary general meetings not called by such shareholders.
Certain judgments obtained against us by
Solowin’s shareholders may not be enforceable.
Solowin is a Cayman Islands company and substantially
all of our assets are located outside of the United States. Substantially all of our current operations are conducted in Hong Kong by
Solomon JFZ.
In addition, all of our directors and officers
are nationals or residents of Hong Kong and all or a substantial portion of their assets are located outside the U.S. As a result, it
may be difficult for investors to effect service of process within the U.S. upon us or these persons, or to enforce against us or them
judgments obtained in U.S. courts, including judgments predicated upon the civil liability provisions of the U.S. federal securities laws
or securities laws of any U.S. state. Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands and
of Hong Kong may render you unable to enforce a judgment against our assets or the assets of our directors and officers.
You may face difficulties
in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because Solowin is incorporated
under Cayman Islands law.
Solowin is an exempted
company incorporated under the laws of the Cayman Islands. Its corporate affairs are governed by its Amended and Restated Memorandum and
Articles of Association, the Companies Act (As Revised) of the Cayman Islands and the common law of the Cayman Islands. The rights of
the shareholders to take action against our directors, actions by our minority shareholders and the fiduciary duties of our directors
to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands
is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from the common law of England, the
decisions of whose courts are of persuasive authority, but are not binding, on a court in the Cayman Islands. The rights of the shareholders
and the fiduciary duties of our directors under Cayman Islands law are not as clearly established as they would be under statutes or judicial
precedent in some jurisdictions in the United States. In particular, the Cayman Islands have a less developed body of securities
laws than the United States. Some U.S. states, such as Delaware, have more fully developed and judicially interpreted bodies
of corporate law than the Cayman Islands. In addition, Cayman Islands companies may not have standing to initiate a shareholder derivative
action in a federal court of the United States.
Shareholders of Cayman Islands exempted companies
like Solowin have no general rights under Cayman Islands law to inspect corporate records or to obtain copies of lists of shareholders
of these companies. Solowin’s Amended and Restated Memorandum and Articles of Association have provisions that provide our shareholders
with the right to inspect the register of members without charge, and to receive the annual audited financial statements of the Company.
Subject to the foregoing, our directors have discretion under the Amended and Restated Memorandum and Articles of Association to determine
whether or not, and under what conditions, our corporate records may be inspected by our shareholders, but are not obliged to make them
available to our shareholders. This may make it more difficult for you to obtain the information needed to establish any facts necessary
for a shareholder resolution or to solicit proxies from other shareholders in connection with a proxy contest.
As a result of all of
the above, our public shareholders may have more difficulty in protecting their interests in the face of actions taken by our management,
members of our board of directors or our controlling shareholders than they would as public shareholders of a company incorporated in
the United States.
Solowin’s Amended and Restated Memorandum
and Articles of Association contain anti-takeover provisions that could discourage a third party from acquiring us, which could limit
Solowin’s shareholders’ opportunity to sell their shares at a premium.
Solowin’s Amended and Restated Memorandum
and Articles of Association contain provisions to limit the ability of others to acquire control of our company or cause us to engage
in change-of-control transactions. These provisions could have the effect of depriving Solowin’s shareholders of an opportunity
to sell their shares at a premium over prevailing market prices by discouraging third parties from seeking to obtain control of our company
in a tender offer or similar transaction. For example, Solowin’s board of directors has the authority, without further action by
its shareholders, to issue one or more classes or series of preferred shares and to fix the designations, powers, preferences and relative,
participating, optional and other rights, if any, and the qualifications, limitations and restrictions thereof, if any, including, without
limitation, the number of shares constituting each such class or series, dividend rights, conversion rights, redemption privileges, voting
powers, full or limited or no voting powers, and liquidation preferences, and to increase or decrease the size of any such class or series
(but not below the number of shares of any class or series of preferred shares then outstanding) to the extent permitted by the Companies
Act (As Revised) of the Cayman Islands. Preferred shares could be issued quickly with terms calculated to delay or prevent a change in
control of our company or make removal of management more difficult. If Solowin’s board of directors decides to issue preferred
shares, the price of the Ordinary Shares may fall and the voting and other rights of the holders of the Ordinary Shares may be materially
and adversely affected. In addition, Solowin’s Amended and Restated Memorandum and Articles of Association contain other provisions
that could limit the ability of third parties to acquire control of our company or cause us to engage in a transaction resulting in a
change of control.
There is a risk
that we will be a passive foreign investment company for any taxable year, which could result in adverse U.S. federal income tax consequences
to U.S. investors in the Ordinary Shares.
In general, a non-U.S.
corporation is a passive foreign investment company, or PFIC, for any taxable year in which (i) 75% or more of its gross income consists
of passive income or (ii) 50% or more of the average quarterly value of its assets consists of assets that produce, or are held for
the production of, passive income. For purposes of the above calculations, a non-U.S. corporation that owns at least 25% by value of the
shares of another corporation is treated as if it held its proportionate share of the assets of the other corporation and received directly
its proportionate share of the income of the other corporation. Passive income generally includes dividends, interest, rents, royalties
and certain gains. Cash is a passive asset for these purposes.
Based on the expected
composition of our income and assets and the value of our assets, including goodwill, we do not expect to be a PFIC for our current taxable
year. However, the proper application of the PFIC rules to a company with a business such as ours is not entirely clear. Because the proper
characterization of certain components of our income and assets is less than certain, and because our PFIC status for any taxable year
will depend on the composition of our income and assets and the value of our assets from time to time (which may be determined, in part,
by reference to the market price of the Ordinary Shares, which could be volatile), there can be no assurance that we will not be a PFIC
for our current taxable year or any future taxable year.
If we were a PFIC for
any taxable year during which a U.S. investor holds the Ordinary Shares, certain adverse U.S. federal income tax consequences could apply
to such U.S. investor.
Cayman Islands economic substance requirements
may have an effect on our business and operations.
Pursuant to the International Tax Cooperation
(Economic Substance) Act, 2018 of the Cayman Islands (“ES Act”) that came into force on January 1,2019, a “relevant
entity” is required to satisfy the economic substance test set out in the ES Act. A “relevant entity” includes an exempted
company incorporated in the Cayman Islands as is Solowin; however, it does not include an entity that is tax resident outside the Cayman
Islands. Accordingly, for so long as the Company is a tax resident outside the Cayman Islands, including in Hong Kong, it is not required
to satisfy the economic substance test set out in the ES Act.
FORWARD-LOOKING STATEMENTS
This prospectus contains
or incorporates forward-looking statements within the meaning of section 27A of the Securities Act and section 21E of the Exchange Act.
These forward-looking statements are management’s beliefs and assumptions. In addition, other written or oral statements that constitute
forward-looking statements are based on current expectations, estimates and projections about the industry and markets in which we operate
and statements may be made by or on our behalf. Words such as “should,” “could,” “may,” “expect,”
“anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate,”
variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees
of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. There are a number of important
factors that could cause our actual results to differ materially from those indicated by such forward-looking statements.
We describe material
risks, uncertainties and assumptions that could affect our business, including our financial condition and results of operations, under
“Risk Factors” and may update our descriptions of such risks, uncertainties and assumptions in any prospectus supplement.
We base our forward-looking statements on our management’s beliefs and assumptions based on information available to our management
at the time the statements are made. We caution you that actual outcomes and results may differ materially from what is expressed, implied
or forecast by our forward-looking statements. Accordingly, you should be careful about relying on any forward-looking statements. Reference
is made in particular to forward-looking statements regarding growth strategies, financial results, product and service development, competitive
strengths, intellectual property rights, litigation, mergers and acquisitions, market acceptance or continued acceptance of our products
and services, accounting estimates, financing activities, ongoing contractual obligations and sales efforts. Except as required under
the federal securities laws, the rules and regulations of the SEC, stock exchange rules, and other applicable laws, regulations and rules,
we do not have any intention or obligation to update publicly any forward-looking statements after the distribution of this prospectus,
whether as a result of new information, future events, changes in assumptions, or otherwise.
USE OF PROCEEDS
Unless otherwise indicated
in an accompanying prospectus supplement, the net proceeds from the sale of the securities offered hereby will be used for general corporate
purposes, which may include working capital, capital expenditures, debt repayment, or acquisitions. Depending on future events and others
changes in the business climate, we may determine at a later time to use the net proceeds for different purposes. As a result, our management
will have broad discretion in the allocation of the net proceeds and investors will be relying on the judgment of our management regarding
the application of the proceeds of any sale of the securities. In the event that any net proceeds are not immediately applied, we may
temporarily hold them as cash, deposit them in banks or invest them in cash equivalents or securities. We have not allocated any portion
of the net proceeds for any particular use at this time. Specific information concerning the use of proceeds from the sale of any securities
will be included in the prospectus supplement relating to the particular offering in which they are sold.
We will not receive any
proceeds from the sale of Ordinary Shares owned by the selling shareholder. The selling shareholder will receive all of the net proceeds
from the sale of any securities offered by it under this prospectus. We have agreed to bear expenses incurred by the selling shareholder
that relate to the registration of the Ordinary Shares being offered and sold by the selling shareholder, including the SEC registration
fee and legal, accounting, printing and other expenses of this offering.
CAPITALIZATION AND INDEBTEDNESS
Our capitalization and indebtedness will be set
forth in a prospectus supplement to this prospectus or in a report of foreign private issuer on Form 6-K subsequently furnished to the
SEC and specifically incorporated herein by reference.
DESCRIPTION OF SHARE CAPITAL
The authorized share
capital of the Company is $100,000 divided into 1,000,000,000 shares, with a nominal or par value of $0.0001 each.
As of October 4, 2024,
there were 15,980,000 Ordinary Shares issued and outstanding, and no preferred shares issued and outstanding.
For a description of
our Ordinary Shares and preferred shares, including the rights and obligations attached thereto, please refer to Exhibit 2.1 to our Annual
Report on Form 20-F for the fiscal year ended March 31, 2024, which is incorporated by reference herein.
DESCRIPTION OF DEBT SECURITIES
The following is a summary of the general terms
of the debt securities that we may issue and is not intended to be complete. If debt securities are issued, we will describe in the applicable
prospectus supplement the particular terms and provisions of any series of the debt securities and a description of how the general terms
and provisions described below may apply to that series of the debt securities. The terms presented here, together with the terms in a
related prospectus supplement, will be a description of the material terms of the debt securities. You should also read the indenture
under which the debt securities are to be issued.
We may issue, from time to time, debt securities,
in one or more series, that will consist of senior debt, senior subordinated debt or subordinated debt. We refer to the subordinated debt
securities and the senior subordinated debt securities together as the subordinated securities. Debt securities, whether senior, senior
subordinated or subordinated, may be issued as convertible debt securities or exchangeable debt securities. It is likely that convertible
debt securities will not be issued under an indenture. We may issue the debt securities independently or together with any underlying
securities, and debt securities may be attached or separate from the underlying securities. We may also issue the debt securities under
an indenture between us and an entity, identified in the applicable prospectus supplement, as trustee. We have filed with the SEC a form
of indenture governing different types of debt securities that we may offer as an exhibit to the registration statement of which this
prospectus is a part. The following is a summary of the material provisions of the indenture filed as an exhibit to the registration statement
of which this prospectus is a part. All capitalized terms have the meanings specified in the indenture.
As you read this section, please remember that
for each series of debt securities, the specific terms of your debt security as described in the applicable prospectus supplement will
supplement and, if applicable, may modify or replace the general terms described in the summary below. The statement we make in this section
may not apply to your debt security. Prospective investors should rely on information in the applicable prospectus supplement and not
on the following information to the extent that the information in such prospectus supplement is different from the following information.
General Terms of the Indenture
The indenture does not limit the amount of debt
securities that we may issue. It provides that we may issue debt securities up to the principal amount that we may authorize and may be
in any currency or currency unit that we may designate. We may, without the consent of the holders of any series, increase the principal
amount of securities in that series in the future, on the same terms and conditions and with the same CUSIP numbers as that series. Except
for the limitations on consolidation, merger and sale of all or substantially all of our assets contained in the indenture, the terms
of the indenture do not contain any covenants or other provisions designed to give holders of any debt securities protection against changes
in our operations, financial condition or transactions involving us.
We may issue the debt securities issued under
the indenture as “discount securities,” which means they may be sold at a discount below their stated principal amount. These
debt securities, as well as other debt securities that are not issued at a discount, may be issued with “original issue discount”,
or OID, for U.S. federal income tax purposes because of interest payment and other characteristics. Material U.S. federal income tax considerations
applicable to debt securities issued with original issue discount will be described in more detail in any applicable prospectus supplement.
The applicable prospectus supplement for a series
of debt securities that we issue will describe, among other things, the following terms of the offered debt securities:
| ● | the title and authorized denominations
of the series of debt securities; |
| ● | any limit on the aggregate
principal amount of the series of debt securities; |
| ● | whether such debt securities
will be issued in fully registered form without coupons or in a form registered as to principal only with coupons or in bearer form with
coupons; |
| ● | whether issued in the form
of one or more global securities and whether all or a portion of the principal amount of the debt securities is represented thereby; |
| ● | the price or prices at which
the debt securities will be issued; |
| ● | the date or dates on which
principal is payable; |
| ● | the place or places where and
the manner in which principal, premium or interest, if any, will be payable and the place or places where the debt securities may be
presented for transfer and, if applicable, conversion or exchange; |
|
● |
interest rates, and the dates from which interest, if any, will accrue, and the dates when interest is payable and the maturity; |
| ● | the right, if any, to extend
the interest payment periods and the duration of the extensions; |
| ● | our rights or obligations to
redeem or purchase the debt securities; |
| ● | any sinking fund or other provisions
that would obligate us to repurchase or otherwise redeem some or all of the debt securities; |
| ● | conversion or exchange provisions,
if any, including conversion or exchange prices or rates and adjustments thereto; |
| ● | the currency or currencies
of payment of principal or interest; |
| ● | the terms applicable to any
debt securities issued at a discount from their stated principal amount; |
| ● | the terms, if any, under which
any debt securities will rank junior to any of our other debt; |
| ● | whether and upon what terms
the debt securities may be defeased, if different from the provisions set forth in the indenture; |
| ● | if the amount of payments of
principal or interest is to be determined by reference to an index or formula, or based on a coin or currency other than that in which
the debt securities are stated to be payable, the manner in which these amounts are determined and the calculation agent, if any, with
respect thereto; |
| ● | the provisions, if any, relating
to any collateral provided for the debt securities; |
| ● | if other than the entire principal
amount of the debt securities when issued, the portion of the principal amount payable upon acceleration of maturity as a result of a
default on our obligations; |
| ● | the events of default and covenants
relating to the debt securities that are in addition to, modify or delete those described in this prospectus; |
| ● | the nature and terms of any
security for any secured debt securities; and |
| ● | any other specific terms of
any debt securities. |
The applicable prospectus supplement will present
material U.S. federal income tax considerations for holders of any debt securities and the securities exchange or quotation system on
which any debt securities are to be listed or quoted.
Senior Debt Securities
Payment of the principal of, premium and interest,
if any, on senior debt securities will rank on a parity with all of our other secured/unsecured and unsubordinated debt.
Senior Subordinated Debt Securities
Payment of the principal of, premium and interest,
if any, on senior subordinated debt securities will be junior in right of payment to the prior payment in full of all of our unsubordinated
debt, including senior debt securities and any credit facility. We will state in the applicable prospectus supplement relating to any
senior subordinated debt securities the subordination terms of the securities as well as the aggregate amount of outstanding debt, as
of the most recent practicable date, that by its terms would be senior to the senior subordinated debt securities. We will also state
in such prospectus supplement limitations, if any, on issuance of additional senior debt.
Subordinated Debt Securities
Payment of the principal of, premium and interest,
if any, on subordinated debt securities will be subordinated and junior in right of payment to the prior payment in full of all of our
senior debt, including our senior debt securities and senior subordinated debt securities. We will state in the applicable prospectus
supplement relating to any subordinated debt securities the subordination terms of the securities as well as the aggregate amount of outstanding
indebtedness, as of the most recent practicable date, that by its terms would be senior to the subordinated debt securities. We will also
state in such prospectus supplement limitations, if any, on issuance of additional senior indebtedness.
Conversion or Exchange Rights
Debt securities may be convertible into or exchangeable
for other securities being registered in this registration statement, including, for example, shares of our equity securities. The terms
and conditions of conversion or exchange will be stated in the applicable prospectus supplement. The terms will include, among others,
the following:
| ● | the conversion or exchange
price; |
| ● | the conversion or exchange
period; |
| ● | provisions regarding the ability
of us or the holder to convert or exchange the debt securities; |
| ● | events requiring adjustment
to the conversion or exchange price; and |
| ● | provisions affecting conversion
or exchange in the event of our redemption of the debt securities. |
Consolidation, Merger or Sale
We cannot consolidate or merge with or into, or
transfer or lease all or substantially all of our assets to, any person, and we cannot permit any other person to consolidate with or
merge into us, unless (1) we will be the continuing corporation or (2) the successor corporation or person to which our assets are transferred
or leased is a corporation organized under the laws of the United States, any state of the United States or the District of Columbia and
it expressly assumes our obligations under the debt securities and the indenture. In addition, we cannot complete such a transaction unless
immediately after completing the transaction, no event of default under the indenture, and no event which, after notice or lapse of time
or both, would become an event of default under the indenture, shall have occurred and be continuing. When the person to whom our assets
are transferred or leased has assumed our obligations under the debt securities and the indenture, we shall be discharged from all our
obligations under the debt securities and the indenture except in limited circumstances.
This covenant would not apply to any recapitalization
transaction, a change of control of us or a highly leveraged transaction, unless the transaction or change of control were structured
to include a merger or consolidation or transfer or lease of all or substantially all of our assets.
Events of Default
The term “Event of Default,” when
used in the indenture, unless otherwise indicated, means any of the following:
| ● | failure to pay interest for
30 days after the date payment is due and payable; |
| ● | failure to pay principal or
premium, if any, on any debt security when due, either at maturity, upon any redemption, by declaration or otherwise; |
| ● | failure to make sinking fund
payments when due; |
| ● | failure to perform other covenants
for 60 days after notice that performance was required; |
| ● | events in bankruptcy, insolvency
or reorganization relating to us; or |
| ● | any other Event of Default
provided in the applicable officer’s certificate, resolution of our board of directors or the supplemental indenture under which
we issue a series of debt securities. |
An Event of Default for a particular series of
debt securities does not necessarily constitute an Event of Default for any other series of debt securities issued under the indenture.
If an Event of Default with respect to any series
of senior debt securities occurs and is continuing, then either the trustee for such series or the holders of a majority in aggregate
principal amount of the outstanding debt securities of such series, by notice in writing, may declare the principal amount of and interest
on all of the debt securities of such series to be due and payable immediately; provided, however, unless otherwise provided in the applicable
prospectus supplement, if such an Event of Default occurs and is continuing with respect to more than one series of senior debt securities
under the indenture, the trustee for such series or the holders of a majority in aggregate principal amount of the outstanding debt securities
of all such series of senior debt securities of equal ranking (or, if any of such senior debt securities are discount securities, such
portion of the principal amount as may be specified in the terms of that series), voting as one class, may make such declaration of acceleration
as to all series of such equal ranking and not the holders of the debt securities of any one of such series of senior debt securities.
If an Event of Default with respect to any series
of subordinated securities occurs and is continuing, then either the trustee for such series or the holders of a majority in aggregate
principal amount of the outstanding debt securities of such series, by notice in writing, may declare the principal amount of and interest
on all of the debt securities of such series to be due and payable immediately; provided, however, unless otherwise provided in the applicable
prospectus supplement, if such an Event of Default occurs and is continuing with respect to more than one series of subordinated securities
under the indenture, the trustee for such series or the holders of a majority in aggregate principal amount of the outstanding debt securities
of all such series of subordinated securities of equal ranking (or, if any of such subordinated securities are discount securities, such
portion of the principal amount as may be specified in the terms of that series), voting as one class, may make such declaration of acceleration
as to all series of equal ranking and not the holders of the debt securities of any one of such series of subordinated securities. The
holders of not less than a majority in aggregate principal amount of the debt securities of all affected series of equal ranking may,
after satisfying certain conditions, rescind and annul any of the above-described declarations and consequences involving such series.
If an Event of Default relating to events in bankruptcy,
insolvency or reorganization of us occurs and is continuing, then the principal amount of all of the debt securities outstanding, and
any accrued interest, will automatically become due and payable immediately, without any declaration or other act by the trustee or any
holder.
The indenture imposes limitations on suits brought
by holders of debt securities against us. Except for actions for payment of overdue principal or interest, no holder of debt securities
of any series may institute any action against us under the indenture unless:
| ● | the holder has previously given
to the trustee written notice of default and continuance of such default; |
| ● | the holders of not less than
a majority in principal amount of the outstanding debt securities of the affected series of equal ranking have requested that the trustee
institute the action; |
| ● | the requesting holders have
offered the trustee reasonable indemnity for expenses and liabilities that may be incurred by bringing the action; |
| ● | the trustee has not instituted
the action within 60 days of the request; and |
| ● | the trustee has not received
inconsistent direction by the holders of a majority in principal amount of the outstanding debt securities of the affected series of
equal ranking. |
We will be required to file annually with the
trustee a certificate, signed by one of our officers, stating whether or not the officer knows of any default by us in the performance,
observance or fulfillment of any condition or covenant of the indenture.
Registered Global Securities and Book Entry
System
The debt securities of a series may be issued
in whole or in part in book-entry form and may be represented by one or more fully registered global securities or in unregistered form
with or without coupons. We will deposit any registered global securities with a depositary or with a nominee for a depositary identified
in the applicable prospectus supplement and registered in the name of such depositary or nominee. In such case, we will issue one or more
registered global securities denominated in an amount equal to the aggregate principal amount of all of the debt securities of the series
to be issued and represented by such registered global security or securities. This means that we will not issue certificates to each
holder.
Unless and until it is exchanged in whole or in
part for debt securities in definitive registered form, a registered global security may not be transferred except as a whole:
| ● | by the depositary for such
registered global security to its nominee; |
| ● | by a nominee of the depositary
to the depositary or another nominee of the depositary; or |
| ● | by the depositary or its nominee
to a successor of the depositary or a nominee of the successor. |
The prospectus supplement relating to a series
of debt securities will describe the specific terms of the depositary arrangement involving any portion of the series represented by a
registered global security. We anticipate that the following provisions will apply to all depositary arrangements for registered debt
securities:
| ● | ownership of beneficial interests
in a registered global security will be limited to persons that have accounts with the depositary for such registered global security,
these persons being referred to as “participants,” or persons that may hold interests through participants; |
| ● | upon the issuance of a registered
global security, the depositary for the registered global security will credit, on its book-entry registration and transfer system, the
participants’ accounts with the respective principal amounts of the debt securities represented by the registered global security
beneficially owned by the participants; |
| ● | any dealers, underwriters,
or agents participating in the distribution of the debt securities represented by a registered global security will designate the accounts
to be credited; and |
| ● | ownership of beneficial interest
in such registered global security will be shown on, and the transfer of such ownership interest will be effected only through, records
maintained by the depositary for such registered global security for interests of participants, and on the records of participants for
interests of persons holding through participants. |
The laws of some states may require that specified
purchasers of securities take physical delivery of the securities in definitive form. These laws may limit the ability of those persons
to own, transfer or pledge beneficial interests in registered global securities.
So long as the depositary for a registered global
security, or its nominee, is the registered owner of such registered global security, the depositary or such nominee, as the case may
be, will be considered the sole owner or holder of the debt securities represented by the registered global security for all purposes
under the indenture. Except as stated below, owners of beneficial interests in a registered global security:
| ● | will not be entitled to have
the debt securities represented by a registered global security registered in their names; |
| ● | will not receive or be entitled
to receive physical delivery of the debt securities in the definitive form; and |
| ● | will not be considered the
owners or holders of the debt securities under the relevant indenture. |
Accordingly, each person owning a beneficial interest
in a registered global security must rely on the procedures of the depositary for the registered global security and, if the person is
not a participant, on the procedures of a participant through which the person owns its interest, to exercise any rights of a holder under
the indenture.
We understand that under existing industry practices,
if we request any action of holders or if an owner of a beneficial interest in a registered global security desires to give or take any
action that a holder is entitled to give or take under the indenture, the depositary for the registered global security would authorize
the participants holding the relevant beneficial interests to give or take the action, and the participants would authorize beneficial
owners owning through the participants to give or take the action or would otherwise act upon the instructions of beneficial owners holding
through them.
We will make payments of principal and premium,
if any, and interest, if any, on debt securities represented by a registered global security registered in the name of a depositary or
its nominee to the depositary or its nominee, as the case may be, as the registered owners of the registered global security. None of
us, the trustee or any other agent of ours or the trustee will be responsible or liable for any aspect of the records relating to, or
payments made on account of, beneficial ownership interests in the registered global security or for maintaining, supervising or reviewing
any records relating to the beneficial ownership interests.
We expect that the depositary for any debt securities
represented by a registered global security, upon receipt of any payments of principal and premium, if any, and interest, if any, in respect
of the registered global security, will immediately credit participants’ accounts with payments in amounts proportionate to their
respective beneficial interests in the registered global security as shown on the records of the depositary. We also expect that standing
customer instructions and customary practices will govern payments by participants to owners of beneficial interests in the registered
global security held through the participants, as is now the case with the securities held for the accounts of customers in bearer form
or registered in “street name.” We also expect that any of these payments will be the responsibility of the participants.
If the depositary for any debt securities represented
by a registered global security is at any time unwilling or unable to continue as depositary or stops being a clearing agency registered
under the Exchange Act, we will appoint an eligible successor depositary. If we fail to appoint an eligible successor depositary within
90 days, we will issue the debt securities in definitive form in exchange for the registered global security. In addition, we may at any
time and in our sole discretion decide not to have any of the debt securities of a series represented by one or more registered global
securities. In that event, we will issue debt securities of the series in a definitive form in exchange for all of the registered global
securities representing the debt securities. The trustee will register any debt securities issued in definitive form in exchange for a
registered global security in the name or names as the depositary, based upon instructions from its participants, who shall instruct the
trustee.
We may also issue bearer debt securities of a
series in the form of one or more global securities, referred to as “bearer global securities.” The prospectus supplement
relating to a series of debt securities represented by a bearer global security will describe the applicable terms and procedures. These
will include the specific terms of the depositary arrangement and any specific procedures for the issuance of debt securities in definitive
form in exchange for a bearer global security, in proportion to the series represented by a bearer global security.
Discharge, Defeasance and Covenant Defeasance
We can discharge or decrease our obligations under
the indenture as stated below.
We may discharge obligations to holders of any
series of debt securities that have not already been delivered to the trustee for cancellation and that have either become due and payable
or are by their terms to become due and payable, or are scheduled for redemption, within sixty (60) days. We may effect a discharge
by irrevocably depositing with the trustee cash or U.S. government obligations, as trust funds, in an amount certified to be enough to
pay when due, whether at maturity, upon redemption or otherwise, the principal of, premium and interest, if any, on the debt securities
and any mandatory sinking fund payments.
Unless otherwise provided in the applicable prospectus
supplement, we may also discharge any and all of our obligations to holders of any series of debt securities at any time, which we refer
to as defeasance. We may also be released from the obligations imposed by any covenants of any outstanding series of debt securities and
provisions of the indenture, and we may omit to comply with those covenants without creating an event of default under the trust declaration,
which we refer to as covenant defeasance. We may effect defeasance and covenant defeasance only if, among other things:
| ● | we irrevocably deposit with
the trustee cash or U.S. government obligations, as trust funds, in an amount certified to be enough to pay at maturity, or upon redemption,
the principal, premium and interest, if any, on all outstanding debt securities of the series; |
| ● | we deliver to the trustee an
opinion of counsel from a nationally recognized law firm to the effect that the holders of the series of debt securities will not recognize
income, gain or loss for U.S. federal income tax purposes as a result of the defeasance or covenant defeasance and that defeasance or
covenant defeasance will not otherwise alter the holders’ U.S. federal income tax treatment of principal, premium and interest,
if any, payments on the series of debt securities; and |
| ● | in the case of subordinated
debt securities, no event or condition shall exist that, based on the subordination provisions applicable to the series, would prevent
us from making payments of principal of, premium and interest, if any, on any of the applicable subordinated debt securities at the date
of the irrevocable deposit referred to above or at any time during the period ending on the 91st day after the deposit date. |
In the case of a defeasance by us, the opinion
we deliver must be based on a ruling of the Internal Revenue Service issued, or a change in U.S. federal income tax law occurring, after
the date of the indenture, since such a result would not occur under the U.S. federal income tax laws in effect on such date.
Although we may discharge or decrease our obligations
under the indenture as described in the two preceding paragraphs, we may not avoid, among other things, our duty to register the transfer
or exchange of any series of debt securities, to replace any temporary, mutilated, destroyed, lost or stolen series of debt securities
or to maintain an office or agency in respect of any series of debt securities.
Modification of the Indenture
The indenture provides that we and the trustee
may enter into supplemental indentures without the consent of the holders of debt securities to:
| ● | secure any debt securities
and provide the terms and conditions for the release or substitution of the security; |
| ● | evidence the assumption by
a successor corporation of our obligations; |
| ● | add covenants for the protection
of the holders of debt securities; |
| ● | add any additional events of
default; |
| ● | cure any ambiguity or correct
any inconsistency or defect in the indenture; |
| ● | add to, change or eliminate
any of the provisions of the indenture in a manner that will become effective only when there is no outstanding debt security which is
entitled to the benefit of the provision as to which the modification would apply; |
| ● | establish the forms or terms
of debt securities of any series; |
| ● | eliminate any conflict between
the terms of the indenture and the Trust Indenture Act of 1939; |
| ● | evidence and provide for the
acceptance of appointment by a successor trustee and add to or change any of the provisions of the indenture as is necessary for the
administration of the trusts by more than one trustee; and |
| ● | make any other provisions with
respect to matters or questions arising under the indenture that will not be inconsistent with any provision of the indenture as long
as the new provisions do not adversely affect the interests of the holders of any outstanding debt securities of any series created prior
to the modification. |
The indenture also provides that we and the trustee
may, with the consent of the holders of not less than a majority in aggregate principal amount of debt securities of all series of senior
debt securities or of Subordinated Securities of equal ranking, as the case may be, then outstanding and affected, voting as one class,
add any provisions to, or change in any manner, eliminate or modify in any way the provisions of, the indenture or modify in any manner
the rights of the holders of the debt securities. We and the trustee may not, however, without the consent of the holder of each outstanding
debt security affected thereby:
| ● | extend the final maturity of
any debt security; |
| ● | reduce the principal amount
or premium, if any; |
| ● | reduce the rate or extend the
time of payment of interest; |
| ● | reduce any amount payable on
redemption or impair or affect any right of redemption at the option of the holder of the debt security; |
| ● | change the currency in which
the principal, premium or interest, if any, is payable; |
| ● | reduce the amount of the principal
of any debt security issued with an original issue discount that is payable upon acceleration or provable in bankruptcy; |
| ● | alter provisions of the relevant
indenture relating to the debt securities not denominated in U.S. dollars; |
| ● | impair the right to institute
suit for the enforcement of any payment on any debt security when due; |
| ● | if applicable, adversely affect
the right of a holder to convert or exchange a debt security; or |
| ● | reduce the percentage of holders
of debt securities of any series whose consent is required for any modification of the indenture. |
The indenture provides that the holders of not
less than a majority in aggregate principal amount of the then outstanding debt securities of any and all affected series of equal ranking,
by notice to the relevant trustee, may on behalf of the holders of the debt securities of any and all such series of equal ranking waive
any default and its consequences under the indenture except:
| ● | a continuing default in the
payment of interest on, premium, if any, or principal of, any such debt security held by a non-consenting holder; or |
| ● | a default in respect of a covenant
or provision of the indenture that cannot be modified or amended without the consent of the holder of each outstanding debt security
of each series affected. |
Concerning the Trustee
The indenture provides that there may be more
than one trustee under the indenture, each for one or more series of debt securities. If there are different trustees for different series
of debt securities, each trustee will be a trustee of a trust under the indenture separate and apart from the trust administered by any
other trustee under that indenture.
Except as otherwise indicated in this prospectus
or any prospectus supplement, any action permitted to be taken by a trustee may be taken by such trustee only on the one or more series
of debt securities for which it is the trustee under the indenture. Any trustee under the indenture may resign or be removed from one
or more series of debt securities. All payments of principal of, premium and interest, if any, on, and all registration, transfer, exchange,
authentication and delivery of, the debt securities of a series will be effected by the trustee for that series at an office designated
by the trustee.
If the trustee becomes a creditor of ours, the
indenture places limitations on the right of the trustee to obtain payment of claims or to realize on property received in respect of
any such claim as security or otherwise. The trustee may engage in other transactions. If it acquires any conflicting interest relating
to any duties concerning the debt securities, however, it must eliminate the conflict or resign as trustee.
The holders of a majority in aggregate principal
amount of any and all affected series of debt securities of equal ranking then outstanding will have the right to direct the time, method
and place of conducting any proceeding for exercising any remedy available to the trustee concerning the applicable series of debt securities,
provided that the direction:
| ● | would not conflict with any
rule of law or with the relevant indenture; |
| ● | would not be unduly prejudicial
to the rights of another holder of the debt securities; and |
| ● | would not involve any trustee
in personal liability. |
The indenture provides that in case an Event of
Default shall occur, not be cured and be known to any trustee, the trustee must use the same degree of care as a prudent person would
use in the conduct of his or her own affairs in the exercise of the trustee’s power. The trustee will be under no obligation to
exercise any of its rights or powers under the indenture at the request of any of the holders of the debt securities, unless they shall
have offered to the trustee security and indemnity satisfactory to the trustee.
No Individual Liability of Incorporators, Stockholders,
Officers or Directors
No recourse under or upon any obligation, covenant
or agreement of this Indenture, or of any debt security thereunder, or for any claim based thereon or otherwise in respect thereof, shall
be had against any incorporator, stockholder, officer or director, as such, past, present or future, of the Company or of any successor
corporation, either directly or through the Company, whether by virtue of any constitution, statute or rule of law, or by the enforcement
of any assessment or penalty or otherwise; it being expressly understood that this Indenture and the obligations issued hereunder are
solely corporate obligations of the Company, and that no such personal liability whatever shall attach to, or is or shall be incurred
by, the incorporators, stockholders, officers or directors, as such, of the Company or of any successor corporation, or any of them.
Governing Law
The indenture and the debt securities will be
governed by, and construed in accordance with, the laws of the State of New York.
DESCRIPTION OF WARRANTS
We may issue warrants for the purchase of our
Ordinary Shares, preferred shares, and/or debt securities in one or more series. We may issue warrants independently or together with
our Ordinary Shares, preferred shares and/or debt securities, and the warrants may be attached to or traded separate and apart from these
securities. Each series of warrants will be issued under a warrant agreement as set forth in the prospectus supplement. The applicable
prospectus supplement or term sheet will describe the terms of the warrants offered thereby, any warrant agreement relating to such warrants
and the warrant certificates, including but not limited to the following:
| ● | the title of the warrants; |
| ● | the offering price or prices
of the warrants, if any; |
| ● | the minimum or maximum amount
of the warrants which may be exercised at any one time; |
| ● | the currency or currency units
in which the offering price, if any, and the exercise price are payable; |
| ● | the number of securities, if
any, with which such warrants are being offered and the number of such warrants being offered with each security; |
| ● | the date, if any, on and after
which such warrants and the related securities, if any, will be transferable separately; |
| ● | the amount of securities purchasable
upon exercise of each warrant and the price at which the securities may be purchased upon such exercise, and events or conditions under
which the amount of securities may be subject to adjustment; |
| ● | the date on which the right
to exercise such warrants shall commence and the date on which such right shall expire; |
| ● | the circumstances, if any,
which will cause the warrants to be deemed to be automatically exercised; |
| ● | any material risk factors,
if any, relating to such warrants; |
| ● | the identity of any warrant
agent; and |
| ● | any other material terms of
the warrants. |
Prior to the exercise of any warrants, holders
of such warrants will not have any rights of holders of the securities purchasable upon such exercise, including the right to receive
payments of dividends or the right to vote such underlying securities. Prospective purchasers of warrants should be aware that material
U.S. federal income tax, accounting and other considerations may be applicable to instruments such as warrants.
DESCRIPTION OF RIGHTS
We may issue rights to purchase our Ordinary Shares,
preferred shares, debt securities or other securities. Rights may be issued independently or together with any other offered security
and may or may not be transferable by the person purchasing or receiving the rights. In connection with any rights offering, we may enter
into a standby underwriting or other arrangement with one or more underwriters or other persons pursuant to which such underwriters or
other persons would purchase any offered securities remaining unsubscribed for after such rights offering. Each series of rights will
be issued under a separate rights agent agreement to be entered into between us and one or more banks, trust companies, or other financial
institutions, as rights agent, that we will name in the applicable prospectus supplement. The rights agent will act solely as our agent
in connection with the rights and will not assume any obligation or relationship of agency or trust for or with any holders of rights
certificates or beneficial owners of rights.
The prospectus supplement relating to any rights
that we offer will include specific terms relating to the offering, including, among other matters:
| ● | the date of determining the security holders entitled to the rights distribution; |
| ● | the aggregate number of rights issued and the aggregate amount of securities purchasable upon exercise
of the rights; |
| ● | the exercise price for the rights; |
| ● | the conditions to completion of the rights offering; |
| ● | the date on which the right to exercise the rights will commence and the date on which the right will
expire; |
| ● | the extent to which such subscription rights are transferable; |
| ● | if applicable, a discussion of the material Cayman Islands or United States federal income tax considerations
applicable to the issuance or exercise of such subscription rights; |
| ● | any other terms of the rights, including terms, procedures and limitations relating to the exchange and
exercise of the rights; |
| ● | the extent to which the rights include an over-subscription privilege with respect to unsubscribed securities;
and |
| ● | the material terms of any standby underwriting agreement or other arrangement entered into by us in connection
with the rights offering. |
Each right would entitle the holder of the rights
to purchase for cash the principal amount of securities at the exercise price set forth in the applicable prospectus supplement. Rights
may be exercised at any time up to the close of business on the expiration date for the rights provided in the applicable prospectus supplement.
After the close of business on the expiration date, all unexercised rights will become void.
If less than all of the rights issued in any rights
offering are exercised, we may offer any unsubscribed securities directly to persons other than our security holders, to or through agents,
underwriters, or dealers, or through a combination of such methods, including pursuant to standby arrangements, as described in the applicable
prospectus supplement.
DESCRIPTION OF UNITS
We may issue units comprised of one or more of
the other securities described in this prospectus in any combination. Each unit will be issued so that the holder of the unit is also
the holder of each security included in the unit. Thus, the holder of a unit will have the rights and obligations of a holder of each
included security. The unit agreement under which a unit is issued may provide that the securities included in the unit may not be held
or transferred separately, at any time or at any time before a specified date.
The applicable prospectus supplement may describe:
| ● | the designation and terms of
the units and of the securities comprising the units, including whether and under what circumstances those securities may be held or
transferred separately; |
| ● | any provisions for the issuance,
payment, settlement, transfer or exchange of the units or of the securities comprising the units; and |
| ● | any additional terms of the
governing unit agreement. |
The applicable prospectus supplement will describe
the terms of any units. The preceding description and any description of units in the applicable prospectus supplement does not purport
to be complete and is subject to and is qualified in its entirety by reference to the unit agreement and, if applicable, collateral arrangements
and depositary arrangements relating to such units.
SELLING SHAREHOLDER
This prospectus relates
to the possible resale by the selling shareholder listed in the table below, of up to 2,960,000 Ordinary Shares. These shares were acquired
by the selling shareholder in 2022 through a private transaction consummated prior to our initial public offering in September 2023.
Pursuant to this prospectus,
the selling shareholder may from time to time offer and sell any or all of the Ordinary Shares set forth below. When we refer to the “selling
shareholder” in this prospectus, we mean the selling shareholder listed in the table below and the pledgees, donees, transferees,
assignees, successors and others who later come to hold any of the selling shareholder’s interest in such Ordinary Shares other
than through a public sale.
The following table is based on information supplied
to us by the selling shareholder and sets forth, as of October 4, 2024, information regarding the selling shareholder’s beneficial
ownership of our Ordinary Shares offered by it. Beneficial ownership is determined in accordance with the rules of the SEC. In computing
the number of Ordinary Shares beneficially owned by the selling shareholder and the percentage of ownership of such selling shareholder,
Ordinary Shares and underlying shares of convertible securities, options or warrants held by such selling shareholder that are convertible
or exercisable, as the case may be, within 60 days of October 4, 2024 are included. The selling shareholder’s percentage of ownership
in the following table is based upon 15,980,000 Ordinary Shares of the Company outstanding as of October 4, 2024.
| |
Before the Offering | | |
| | |
After the Offering | |
Name of Selling Shareholder | |
Number of Ordinary Shares Beneficially Owned(1) | | |
Percentage of Outstanding Ordinary | | |
Number of Ordinary Shares Being Offered | | |
Number of Ordinary Shares Beneficially Owned | | |
Percentage of Outstanding Ordinary Shares | |
Vulcan Worldwide Holdings Limited (2) | |
| 2,960,000 | | |
| 18.52 | % | |
| 2,960,000 | | |
| 0 | | |
| 0 | |
| (1) | This table is based upon information supplied by the selling shareholder, which information may not be accurate as of the date hereof.
We have determined beneficial ownership in accordance with the rules of the SEC. Except as indicated by the footnotes below, we believe,
based on the information furnished to us, that the selling shareholder named in the table above has sole voting and investment power with
respect to all ordinary shares that it beneficially owns. |
| (2) | Vulcan Worldwide Holdings Limited is incorporated in the British Virgin Islands. Xiaohang Zhang, the sole director and sole shareholder,
has sole voting and investment power over the Ordinary Shares held by Vulcan Worldwide Holdings Limited. |
The registration of these Ordinary Shares does
not mean that the selling shareholder will sell or otherwise dispose of all or any of those securities. The selling shareholder may sell
or otherwise dispose of all, a portion or none of such shares from time to time. We do not know the number of Ordinary Shares, if any,
that will be offered for sale or other disposition by the selling shareholder under this prospectus. Furthermore, the selling shareholder
may have sold, transferred or disposed of the Ordinary Shares covered hereby in transactions exempt from the registration requirements
of the Securities Act since the date on which we filed this prospectus.
We will not receive any
proceeds from the sales by the selling shareholder. We have agreed to bear expenses incurred by the selling shareholder that relate to
the registration of the Ordinary Shares being offered and sold by the selling shareholder, including the SEC registration fee and legal,
accounting, printing and other expenses of this offering.
TAXATION
Our most recent Annual Report on Form 20-F provides
a discussion of certain tax considerations that may be relevant to prospective investors in our securities. The applicable prospectus
supplement may also contain information about certain material tax considerations relating to the securities covered by such prospectus
supplement. You should consult your own tax advisors prior to acquiring any of our securities.
PLAN OF DISTRIBUTION
We, or the selling shareholder, as applicable,
may sell the securities offered by this prospectus in any one or more of the following ways (or in any combination) from time to time:
| ● | directly to investors, including
through privately negotiated transactions, a specific bidding, auction or other process; |
| ● | to investors through agents; |
| ● | to or through underwriters
or dealers; |
| ● | in “at the market”
offerings, within the meaning of the Rule 415(a)(4) of the Securities Act, to or through a market maker or into an existing trading market
on an exchange or otherwise; |
| ● | through a combination of any
such methods of sale; or |
| ● | through any other method permitted
by applicable law and described in the applicable prospectus supplement. |
The accompanying prospectus supplement will set
forth the terms of the offering and the method of distribution and will identify any firms acting as underwriters, dealers or agents in
connection with the offering, including:
| ● | the names and addresses of
any underwriters, dealers or agents; |
| ● | the purchase price of the securities
and the proceeds to us from the sale, if any; |
| ● | any over-allotment options
under which underwriters may purchase additional securities from us; |
| ● | any underwriting discounts
and other items constituting compensation to underwriters, dealers or agents; |
| ● | any public offering price,
any discounts or concessions allowed or reallowed or paid to dealers; and |
| ● | any securities exchange or
market on which the securities offered in the prospectus supplement may be listed. |
If underwriters are used in the sale, the underwriters
will acquire the offered securities for their own account and may resell them from time to time in one or more transactions, including
negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. The offered securities
may be offered either to the public through underwriting syndicates represented by one or more managing underwriters or by one or more
underwriters without a syndicate. Unless otherwise set forth in a prospectus supplement, the obligations of the underwriters to purchase
any series of securities will be subject to certain conditions precedent and the underwriters will be obligated to purchase all of such
series of securities if any are purchased. Only those underwriters identified in such prospectus supplement are deemed to be underwriters
in connection with the securities offered in the prospectus supplement. Any underwritten offering may be on a best efforts or a firm commitment
basis.
In connection with the sale of our securities,
underwriters or agents may receive compensation (in the form of discounts, concessions or commissions) from us, the selling shareholder
or from purchasers of securities for whom they may act as agents. Underwriters may sell securities to or through dealers, and such dealers
may receive compensation in the form of discounts, concessions or commissions from the underwriters and/or commissions from the purchasers
for whom they may act as agents. Underwriters, dealers and agents that participate in the distribution of our securities may be deemed
to be “underwriters” as that term is defined in the Securities Act, and any discounts allowed or commissions paid, and any
profit on the resale of the securities they realize may be deemed to be underwriting discounts and commissions under the Securities Act.
Any person who may be deemed to be an underwriter will be identified, and the compensation received from us will be described, in the
prospectus supplement. Maximum compensation to any underwriters, dealers or agents will not exceed any applicable Financial Industry Regulatory
Authority, Inc. (“FINRA”) limitations.
Underwriters and agents may be entitled to indemnification
by us or the selling shareholder against some civil liabilities, including liabilities under the Securities Act, or to contributions with
respect to payments which the underwriters or agents may be required to make relating to these liabilities. Underwriters and agents may
be customers of, engage in transactions with, or perform services for us or the selling shareholder in the ordinary course of business.
Unless otherwise specified in the related prospectus
supplement, each series of securities will be a new issue with no established trading market, other than our Ordinary Shares, which are
listed on the Nasdaq Capital Market. Any Ordinary Shares sold pursuant to a prospectus supplement will be listed on the Nasdaq Capital
Market, subject to official notice of issuance. We may elect to list any preferred shares, warrants, debt securities, rights, or units
on an exchange, but we are not obligated to do so. It is possible that one or more underwriters may make a market in the securities, but
such underwriters will not be obligated to do so and may discontinue any market making at any time without notice. No assurance can be
given as to the liquidity of, or the trading market for, any offered securities.
The aggregate proceeds to us or the selling shareholder
from the sale of the securities will be the purchase price of our securities less discounts or commissions, if any. We and the selling
shareholder reserve the right to accept and, together with our agents from time to time, to reject, in whole or in part, any proposed
purchase of our securities to be made directly or through agents. We will not receive any of the proceeds from any offering by the selling
shareholder.
To facilitate the offering of the securities offered
by us or the selling shareholder, certain persons participating in the offering may engage in transactions that stabilize, maintain or
otherwise affect the price of our securities. This may include over-allotments or short sales, which involve the sale by persons participating
in the offering of more shares than were sold to them. In these circumstances, these persons would cover such over-allotments or short
positions by making purchases in the open market or by exercising their over-allotment option, if any. In addition, these persons may
stabilize or maintain the price of our securities by bidding for or purchasing shares in the open market or by imposing penalty bids,
whereby selling concessions allowed to dealers participating in the offering may be reclaimed if shares sold by them are repurchased in
connection with stabilization transactions. The effect of these transactions may be to stabilize or maintain the market price of our securities
at a level above that which might otherwise prevail in the open market. These transactions may be discontinued at any time.
The selling shareholder may, from time to time,
pledge or grant a security interest in some of the Ordinary Shares owned by them and, if the selling shareholder defaults in the performance
of their secured obligations, the pledgees or secured parties may offer and sell the Ordinary Shares, from time to time, under this prospectus,
or under an amendment or supplement to this prospectus amending the list of the selling shareholder to include the pledgee, transferee
or other successors in interest as the selling shareholder under this prospectus. The selling shareholder also may transfer the Ordinary
Shares in other circumstances, in which case the transferees, pledgees or other successors in interest will be the selling beneficial
owners for purposes of this prospectus.
The selling shareholder may use this prospectus
in connection with resales of the Ordinary Shares. The selling shareholder may be deemed to be an underwriter under the Securities Act
in connection with the Ordinary Shares they resell and any profits on the sales may be deemed to be underwriting discounts and commissions
under the Securities Act. Unless otherwise set forth in a prospectus supplement, the selling shareholder will receive all the net proceeds
from the resale of the Ordinary Shares sold by them.
The selling
shareholder also may in the future resell a portion of the Ordinary Shares in open market transactions in reliance upon Rule 144 under
the Securities Act, provided that they meet the criteria and conform to the requirements of that rule, or pursuant to other available
exemptions from the registration requirements of the Securities Act.
EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets
forth the various expenses in connection with the sale and distribution of the securities being registered. We will bear all of the expenses
shown below.
SEC registration fee | |
$ | 31,873.03 | |
Printing expenses | |
| * | |
Legal fees and expenses | |
| * | |
Accounting fees and expenses | |
| * | |
Transfer agent fees and expenses | |
| * | |
Miscellaneous | |
| * | |
Total | |
$ | * | |
| * | The amount of securities and number of offerings are indeterminable,
and the expenses cannot be estimated at this time. The applicable prospectus supplement will set forth the estimated aggregate amount
of expenses payable in respect of any offering of securities. |
LEGAL MATTERS
Except as otherwise set forth in the applicable
prospectus supplement, certain legal matters in connection with the securities offered pursuant to this prospectus will be passed upon
for us by Conyers Dill & Pearman to the extent governed by the laws of the Cayman Islands, and by Bevilacqua PLLC to the extent governed
by the laws of the State of New York.
If legal matters in connection with offerings
made pursuant to this prospectus are passed upon by counsel to underwriters, dealers or agents, such counsel will be named in the applicable
prospectus supplement relating to any such offering.
EXPERTS
Our consolidated financial statements as of March
31, 2024, 2023 and 2022, and for the years then ended incorporated in this prospectus by reference to the Annual Report on Form 20-F for
the year ended March 31, 2024 have been so incorporated in reliance on the report of WWC, P.C., an independent registered public accounting
firm, given on the authority of said firm as experts in auditing and accounting.
The offices of WWC, P.C. are located at 2010 Pioneer
Court, San Mateo, CA 94403.
INDEMNIFICATION
Insofar
as indemnification by us for liabilities arising under the Securities Act may be permitted to our directors, officers or persons controlling
the company pursuant to provisions of our constitution, or otherwise, we have been advised that in the opinion of the SEC, such indemnification
is against public policy as expressed in the Securities Act and is therefore unenforceable. In the event that a claim for indemnification
by such director, officer or controlling person of us in the successful defense of any action, suit or proceeding is asserted by such
director, officer or controlling person in connection with the securities being offered, we will, unless in the opinion of our counsel
the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification
by us is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
ENFORCEMENT OF CIVIL LIABILITIES
Cayman Islands
Solowin is incorporated under the laws of the
Cayman Islands as an exempted company with limited liability. It is incorporated in the Cayman Islands because of certain benefits associated
with being a Cayman Islands company, such as political and economic stability, an effective judicial system, a favorable tax system, the
absence of foreign exchange control or currency restrictions and the availability of professional and support services. However, the Cayman
Islands has a less developed body of securities laws as compared to the United States and provides less protection for investors.
In addition, Cayman Islands companies may not have standing to sue before the federal courts of the United States.
Solowin’s constitutional documents do not
contain provisions requiring that disputes, including those arising under the securities laws of the United States, between the company,
its officers, directors and shareholders, be subject to arbitration.
Substantially all of our assets are located outside
the United States. In addition, all of our directors and executive officers are nationals or residents of jurisdictions other than
the United States and all or a substantial portion of their assets are located outside the United States. As a result, it may
be difficult for investors to effect service of process within the United States upon us or these persons, or to enforce judgments
obtained in U.S. courts against us or them, including judgments predicated upon the civil liability provisions of the securities
laws of the United States or any state in the United States. It may also be difficult for you to enforce judgments obtained
in U.S. courts based on the civil liability provisions of the U.S. federal securities laws against us and the officers and directors.
There is uncertainty as to whether the courts
of the Cayman Islands would (i) recognize or enforce judgments of U.S. courts obtained against us or the directors or officers
that are predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States,
or (ii) entertain original actions brought in the Cayman Islands against us or the directors or officers that are predicated upon
the securities laws of the United States or any state in the United States.
Although there is no
statutory enforcement in the Cayman Islands of judgments obtained in the federal or state courts of the United States (and the Cayman
Islands are not a party to any treaties for the reciprocal enforcement or recognition of such judgments), the courts of the Cayman Islands
would recognize as a valid judgment, a final and conclusive judgment in personam obtained in the federal or state courts of the
United States against the Company under which a sum of money is payable (other than a sum of money payable in respect of multiple damages,
taxes or other charges of a like nature or in respect of a fine or other penalty) or, in certain circumstances, an in personam
judgment for non-monetary relief, and would give a judgment based thereon provided that (a) such courts had proper jurisdiction over the
parties subject to such judgment; (b) such courts did not contravene the rules of natural justice of the Cayman Islands; (c) such judgment
was not obtained by fraud; (d) the enforcement of the judgment would not be contrary to the public policy of the Cayman Islands; (e) no
new admissible evidence relevant to the action is submitted prior to the rendering of the judgment by the courts of the Cayman Islands;
and (f) there is due compliance with the correct procedures under the laws of the Cayman Islands. However, the Cayman Islands courts are
unlikely to enforce a judgment obtained from United States courts under civil liability provisions of the U.S. federal securities law
if such judgment is determined by the courts of the Cayman Islands to give rise to obligations to make payments that are penal or punitive
in nature. Because such a determination has not yet been made by a court of the Cayman Islands, it is uncertain whether such civil liability
judgments from U.S. courts would be enforceable in the Cayman Islands. A Cayman Islands court may stay enforcement proceedings if concurrent
proceedings are being brought elsewhere.
Hong Kong
All of our directors
and officers are nationals or residents of Hong Kong and all or a substantial portion of their assets are located outside the U.S. As
a result, it may be difficult for investors to effect service of process within the U.S. upon us or these persons, or to enforce against
us or them judgments obtained in U.S. courts, including judgments predicated upon the civil liability provisions of the U.S. federal securities
laws or securities laws of any U.S. state.
There is uncertainty
as to whether the courts of Hong Kong would recognize or enforce judgments of U.S. courts obtained against us or our directors or officers
predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States, but Hong
Kong courts do not entertain original actions brought in Hong Kong against us or our directors or officers predicated upon the securities
laws of the United States or any state in the United States.
A judgment of a court
in the United States predicated upon U.S. federal or state securities laws may be enforced in Hong Kong at common law by bringing an action
in a Hong Kong court on that judgment for the amount due thereunder and then seeking summary judgment on the strength of the foreign judgment,
provided that the foreign judgment, among other things, is (1) for a monetary sum (not being taxes or similar charges to a foreign government
taxing authority or a fine or other penalty), and (2) final and conclusive on the merits of the claim, but not otherwise. Such a judgment
may not, in any event, be so enforced in Hong Kong if (a) it was obtained by fraud, (b) the proceedings in which the judgment was obtained
were opposed to natural justice, (c) its enforcement or recognition would be contrary to the public policy of Hong Kong, (d) the court
of the United States was not jurisdictionally competent, or (e) the judgment was in conflict with a prior Hong Kong judgment.
Hong Kong has no arrangement for the reciprocal
enforcement of judgments with the United States. As a result, there is uncertainty as to the enforceability in Hong Kong in actions for
enforcement of judgments of U.S. courts of civil liabilities predicated solely upon the federal securities laws of the United States or
the securities laws of any state or territory within the United States, whereas original actions predicated solely upon the federal securities
laws of the United States or the securities laws of any state or territory within the United States would not be entertained by Hong Kong
courts.
Our agent
for service of process in the United States is Cogency Global Inc.,122 East 42nd Street, 18th Floor, New York, NY 10168, (800) 221-0102.
MATERIAL CHANGES
Except as otherwise disclosed in this prospectus,
there have been no reportable material changes that have occurred since March 31, 2024, and that have not been described in a report on
Form 6-K furnished under the Exchange Act and incorporated by reference into this prospectus.
WHERE YOU CAN FIND MORE INFORMATION
This prospectus is part
of a registration statement on Form F-3 that we filed with the SEC registering the securities that may be offered and sold hereunder.
This prospectus, which constitutes a part of the registration statement, does not contain all of the information set forth in the registration
statement, the exhibits filed therewith or the documents incorporated by reference therein. For further information about us and the securities
offered hereby, reference is made to the registration statement, the exhibits filed therewith and the documents incorporated by reference
therein. Statements contained in this prospectus regarding the contents of any contract or any other document that is filed as an exhibit
to the registration statement are not necessarily complete, and in each instance, we refer you to the copy of such contract or other document
filed as an exhibit to the registration statement. We are required to file reports and other information with the SEC pursuant to the
Exchange Act, including annual reports on Form 20-F and reports on Form 6-K.
The SEC maintains a website that contains reports
and other information regarding issuers, like us, that file electronically with the SEC. The address of the website is www.sec.gov. The
information on our website (https://www.solomonwin.com.hk), other than our SEC filings, is not, and should not be, considered part of
this prospectus and is not incorporated by reference into this document.
As a foreign private issuer, we are exempt under
the Exchange Act from, among other things, the rules prescribing the furnishing and content of proxy statements, and our officers, directors
and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange
Act. In addition, we are not required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently
or as promptly as U.S. companies whose securities are registered under the Exchange Act.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The SEC allows us to “incorporate by reference”
the information we file with it into this prospectus. This means that we can disclose important information about us and our financial
condition to you by referring you to another document filed separately with the SEC instead of having to repeat the information in this
prospectus. The information incorporated by reference is considered to be part of this prospectus and later information that we file with
the SEC will automatically update and supersede this information. We incorporate by reference into this prospectus the information contained
in the documents listed below and any future filings made by us with the SEC under Section 13(a), 13(c) or 15(d) of the Exchange Act,
except for information “furnished” to the SEC which is not deemed filed and not incorporated by reference into this prospectus
(unless otherwise indicated below), until the termination of the offering of securities described in the applicable prospectus supplement:
| ● | the Company’s Annual Report on Form 20-F for the fiscal year ended March 31, 2024, filed with the
SEC on July 26, 2024; and |
| ● | the description of the Company’s Ordinary Shares contained in the Company’s Registration Statement
on Form 8-A (File No. 001-41776) filed with the SEC on August 9, 2023, pursuant to Section 12(b) of the Exchange Act, including any amendment
or report filed for the purpose of updating such description. |
We also incorporate by reference any future annual
reports on Form 20-F we file with the SEC under the Exchange Act after the date of this prospectus and prior to the termination of the
offering of securities by means of this prospectus, and any future reports of foreign private issuer on Form 6-K we furnish with the SEC
during such period that are identified in such reports as being incorporated by reference in this prospectus.
Any reports filed by us with the SEC after the
date of this prospectus and before the date that the offering of securities by means of this prospectus is terminated will automatically
update and, where applicable, supersede any information contained in this prospectus or incorporated by reference in this prospectus.
This means that you must look at all of the SEC filings that we incorporate by reference to determine if any of the statements in this
prospectus or in any documents incorporated by reference have been modified or superseded. Unless expressly incorporated by reference,
nothing in this prospectus shall be deemed to incorporate by reference information furnished to, but not filed with, the SEC.
We will provide without charge to any person (including
any beneficial owner) to whom this prospectus is delivered, upon oral or written request, a copy of any document incorporated by reference
in this prospectus but not delivered with the prospectus (except for exhibits to those documents unless a document states that one of
its exhibits is incorporated into the document itself). Such request should be directed to: SOLOWIN HOLDINGS, Room 1910-1912A, Tower 3,
China Hong Kong City, 33 Canton Road, Tsim Sha Tsui, Kowloon, Hong Kong, and telephone number +852 3428-3893.
SOLOWIN HOLDINGS
$200,000,000
Ordinary Shares
Preferred Shares
Debt Securities
Warrants
Rights
Units
And
2,960,000 Ordinary Shares Offered by the Selling
Shareholder
PROSPECTUS
_______, 2024
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 8. Indemnification of Directors and Officers.
Cayman Islands law does not limit the extent to
which a company’s memorandum and articles of association may provide for indemnification of officers and directors, except to the
extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification
against civil fraud or the consequences of committing a crime. Solowin’s Amended and Restated Memorandum and Articles of Association
provide that Solowin shall indemnify its directors and officers, and their personal representatives, against all actions, proceedings,
costs, charges, expenses, losses, damages or liabilities incurred or sustained by such persons, other than by reason of such person’s
dishonesty, willful default or fraud, in or about the conduct of the company’s business or affairs (including as a result of any
mistake of judgment) or in the execution or discharge of his or her duties, powers, authorities or discretions, including without prejudice
to the generality of the foregoing, any costs, expenses, losses or liabilities incurred by such director or officer in defending (whether
successfully or otherwise) any civil proceedings concerning the Company or its affairs in any court whether in the Cayman Islands or elsewhere.
Under indemnification agreements between Solowin
and each of its directors and officers, Solowin has agreed to indemnify its directors and executive officers against certain liabilities
and expenses incurred by such persons in connection with claims made by reason of their being such a director or executive officer.
Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to our directors, officers or persons controlling us under the foregoing provisions, we have
been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is
therefore unenforceable.
We have purchased D&O insurance with a maximum
liability coverage of $2,500,000 for our directors and officers.
At present, there is no pending litigation or
proceeding involving any of our directors or officers where indemnification will be required or permitted. We are not aware of any threatened
litigation or proceeding that might result in a claim for such indemnification.
Item 9. Exhibits.
* | To be filed, if applicable,
as an exhibit to a post-effective amendment to this registration statement or as an exhibit to a report of the registrant filed pursuant
to the Securities Exchange Act of 1934 and incorporated herein by reference. |
** | To be filed separately pursuant
to Section 305(b)(2) of the Trust Indenture Act of 1939, if applicable. |
Item 10. Undertakings.
| (a) | The undersigned registrant
hereby undertakes: |
| (1) | To file, during any period
in which offers or sales are being made, a post-effective amendment to this registration statement: |
| (i) | to include any prospectus required
by Section 10(a)(3) of the Securities Act of 1933; |
| (ii) | to reflect in the prospectus
any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding
the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected
in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent
no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table
in the effective registration statement; and |
| (iii) | to include any material information
with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information
in the registration statement, |
provided, however, that subsections
(i), (ii) and (iii) above do not apply if the information required to be included in a post-effective amendment by those subsections is
contained in reports filed with or furnished to the SEC by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to
Rule 424(b) that is part of the registration statement.
| (2) | That, for the purpose of determining
any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof. |
| (3) | To remove from registration
by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
| (4) | To file a post-effective amendment
to the registration statement to include any financial statements required by Item 8.A of Form 20-F at the start of any delayed offering
or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of the Act (15 U.S.C.
77j(a)(3)) need not be furnished, provided that the registrant includes in the prospectus, by means of a post-effective amendment, financial
statements required pursuant to this paragraph (a)(4) and other information necessary to ensure that all other information in the prospectus
is at least as current as the date of those financial statements. Notwithstanding the foregoing, with respect to registration statements
on Form F-3, a post-effective amendment need not be filed to include financial statements and information required by Section 10(a)(3)
of the Act or Item 8.A of Form 20-F if such financial statements and information are contained in periodic reports filed with or furnished
to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the Form F-3. |
| (5) | That, for the purpose of determining
liability under the Securities Act of 1933, as amended, to any purchaser: |
| (i) | Each prospectus filed by the
registrant pursuant to Rule 424(b)(3) shall be deemed to be part of this registration statement as of the date the filed prospectus was
deemed part of and included in this registration statement; and |
| (ii) | Each prospectus required to
be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of this registration statement in reliance on Rule 430B relating to an
offer made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by section 10(a) of the
Securities Act of 1933, as amended, shall be deemed to be part of and included in this registration statement as of the earlier of the
date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering
described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter,
such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement
to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering
thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration
statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is
part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or
modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in
any such document immediately prior to such effective date. |
| (6) | That, for the purpose of determining
liability of the registrant under the Securities Act of 1933, as amended, to any purchaser in the initial distribution of the securities: |
The undersigned registrant undertakes
that in an offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting
method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following
communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to
such purchaser:
| (i) | Any preliminary prospectus or
prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
| (ii) | Any free writing prospectus
relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; |
| (iii) | The portion of any other free
writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided
by or on behalf of the undersigned registrant; and |
| (iv) | Any other communication that
is an offer in the offering made by the undersigned registrant to the purchaser. |
| (b) | That, for purposes of determining
any liability under the Securities Act of 1933, as amended, each filing of the registrant’s annual report pursuant to Section 13(a)
or 15(d) of the Securities Exchange Act of 1934, as amended (and, where applicable, each filing of an employee benefit plan’s annual
report pursuant to Section 15(d) of the Securities Exchange Act of 1934, as amended), that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof. |
| (c) | Insofar as indemnification
for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that
a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel
has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. |
| (d) | The undersigned registrant
hereby undertakes that: |
|
(1) |
For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b) (1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. |
| (2) | For the purpose of determining
any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be
a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof. |
| (e) | To file an application for
the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act in accordance
with the rules and regulations prescribed by the Securities and Exchange Commission under Section 305(b)(2) of the Trust Indenture
Act. |
SIGNATURES
Pursuant to the requirements of the Securities
Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form
F-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Hong
Kong SAR, on October 8, 2024.
|
SOLOWIN HOLDINGS |
|
|
|
By: |
/s/ Shing Tak Tam |
|
|
Shing Tak Tam |
|
|
Chief Executive Officer |
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each
person whose signature appears below hereby constitutes and appoints Shing Tak Tam and Lili Liu, and each of them, his or her true and
lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place
and stead, in any and all capacities, to sign any and all amendments, including post-effective amendments, to this registration statement,
and any registration statement relating to the offering covered by this registration statement and filed pursuant to Rule 462(b) under
the Securities Act of 1933, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities
and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform
each and every act and thing requisite and necessary to be done, as fully for all intents and purposes as he or she might or could do
in person, hereby ratifying and confirming all that each of said attorneys in fact and agents or their substitute or substitutes may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities
Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
Signature |
|
Title |
|
Date |
|
|
|
|
|
/s/ Shing Tak Tam |
|
Chief Executive Officer |
|
October 8, 2024 |
Shing Tak Tam |
|
(Principal Executive Officer), and Director |
|
|
|
|
|
|
|
/s/ Lili Liu |
|
Chief Financial Officer |
|
October 8, 2024 |
Lili Liu |
|
(Principal Financial and Accounting Officer) |
|
|
|
|
|
|
|
/s/ Ling Ngai Lok |
|
Chairman |
|
October 8, 2024 |
Ling Ngai Lok |
|
|
|
|
|
|
|
|
|
/s/ Tze Bun Cheng |
|
Chief Operating Officer |
|
October 8, 2024 |
Tze Bun Cheng |
|
|
|
|
|
|
|
|
|
/s/ Wing Yan Ho |
|
Director |
|
October 8, 2024 |
Wing Yan Ho |
|
|
|
|
|
|
|
|
|
/s/ Cha Hwa Chong |
|
Director |
|
October 8, 2024 |
Cha Hwa Chong |
|
|
|
|
|
|
|
|
|
/s/ Ho Kuen Tam |
|
Director |
|
October 8, 2024 |
Ho Kuen Tam |
|
|
|
|
SIGNATURE OF AUTHORIZED
REPRESENTATIVE IN THE UNITED STATES
Pursuant to the Securities
Act of 1933, the undersigned, the duly authorized representative in the United States of SOLOWIN HOLDINGS has signed this registration
statement or amendment thereto in New York on October 8, 2024.
|
Cogency Global Inc. |
|
|
|
Authorized U.S. Representative |
|
|
|
By: |
/s/ Colleen A. De Vries |
|
Name: |
Colleen A. De Vries |
|
Title: |
Senior Vice President on
behalf of Cogency Global Inc. |
II-6
Exhibit 4.1
SOLOWIN HOLDINGS
TO
[ ]
Trustee
Indenture
Dated as of ____, 20__
TABLE OF CONTENTS
|
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Page |
ARTICLE I |
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DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION |
|
|
|
|
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Section 101. |
|
Definitions |
|
1 |
Section 102. |
|
Compliance Certificates and Opinions |
|
7 |
Section 103. |
|
Form of Documents Delivered to Trustee |
|
7 |
Section 104. |
|
Acts of Holders |
|
8 |
Section 105. |
|
Notices, Etc. to Trustee and Company |
|
9 |
Section 106. |
|
Notice to Holders; Waiver |
|
9 |
Section 107. |
|
Conflict With Trust Indenture Act |
|
9 |
Section 108. |
|
Effect of Headings and Table of Contents |
|
9 |
Section 109. |
|
Successors and Assigns |
|
10 |
Section 110. |
|
Separability Clause |
|
10 |
Section 111. |
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Benefits of Indenture |
|
10 |
Section 112. |
|
Governing Law |
|
10 |
Section 113. |
|
Legal Holidays |
|
10 |
Section 114. |
|
Rules by Trustee and Agents |
|
10 |
Section 115. |
|
No Recourse Against Others |
|
10 |
|
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ARTICLE II |
| |
|
| |
SECURITY FORMS |
| |
|
| |
Section 201. | |
Forms Generally |
| 10 |
Section 202. | |
Form of Trustee’s Certificate of Authentication |
| 11 |
| |
|
| |
ARTICLE III |
| |
|
| |
THE SECURITIES |
| |
|
| |
Section 301. | |
Amount Unlimited; Issuable in Series |
| 11 |
Section 302. | |
Denominations |
| 15 |
Section 303. | |
Execution, Authentication, Delivery and Dating |
| 15 |
Section 304. | |
Temporary Securities |
| 16 |
Section 305. | |
Registration, Registration of Transfer and Exchange |
| 17 |
Section 306. | |
Mutilated, Destroyed, Lost and Stolen Securities |
| 18 |
Section 307. | |
Payment of Interest; Interest Rights Preserved |
| 18 |
Section 308. | |
Persons Deemed Owners |
| 19 |
Section 309. | |
Cancellation |
| 20 |
Section 310. | |
Computation of Interest |
| 20 |
Section 311. | |
Global Securities; Exchanges; Registration and Registration of Transfer |
| 20 |
Section 312. | |
Extension of Interest Payment |
| 21 |
| |
|
| |
ARTICLE IV |
| |
|
| |
SATISFACTION AND DISCHARGE |
| |
|
| |
Section 401. | |
Satisfaction and Discharge of Indenture |
| 21 |
Section 402. | |
Application of Trust Money |
| 22 |
Section 403. | |
Satisfaction, Discharge and Defeasance of Securities of Any Series |
| 23 |
ARTICLE V |
| |
|
| |
REMEDIES |
| |
|
| |
Section 501. | |
Events of Default |
| 24 |
Section 502. | |
Acceleration of Maturity; Rescission and Annulment |
| 25 |
Section 503. | |
Collection of Indebtedness and Suits for Enforcement by Trustee |
| 26 |
Section 504. | |
Trustee May File Proofs of Claim |
| 26 |
Section 505. | |
Trustee May Enforce Claims Without Possession of Securities or Coupons |
| 27 |
Section 506. | |
Application of Money Collected |
| 27 |
Section 507. | |
Limitation on Suits |
| 27 |
Section 508. | |
Unconditional Right of Holders to Receive Principal, Premium and Interest |
| 28 |
Section 509. | |
Restoration of Rights and Remedies |
| 28 |
Section 510. | |
Rights and Remedies Cumulative |
| 28 |
Section 511. | |
Delay or Omission Not Waiver |
| 28 |
Section 512. | |
Control by Holders |
| 28 |
Section 513. | |
Waiver of Past Defaults |
| 29 |
Section 514. | |
Undertaking for Costs |
| 29 |
Section 515. | |
Waiver of Stay or Extension Laws |
| 29 |
| |
|
| |
ARTICLE VI |
| |
|
| |
THE TRUSTEE |
| |
|
| |
Section 601. | |
Certain Duties and Responsibilities |
| 29 |
Section 602. | |
Notice of Defaults |
| 30 |
Section 603. | |
Certain Rights of Trustee |
| 31 |
Section 604. | |
Not Responsible for Recitals or Issuance of Securities |
| 31 |
Section 605. | |
May Hold Securities |
| 31 |
Section 606. | |
Money Held in Trust |
| 32 |
Section 607. | |
Compensation and Reimbursement |
| 32 |
Section 608. | |
Disqualification; Conflicting Interests |
| 32 |
Section 609. | |
Corporate Trustee Required; Eligibility |
| 32 |
Section 610. | |
Resignation and Removal; Appointment of Successor |
| 33 |
Section 611. | |
Acceptance of Appointment by Successor |
| 34 |
Section 612. | |
Merger, Conversion, Consolidation or Succession to Business |
| 34 |
Section 613. | |
Preferential Collection of Claims Against Company |
| 34 |
Section 614. | |
Appointment of Authenticating Agent |
| 34 |
| |
|
| |
ARTICLE VII |
| |
|
| |
HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND COMPANY |
| |
|
| |
Section 701. | |
Company to Furnish Trustee Names and Addresses of Holders |
| 35 |
Section 702. | |
Preservation of Information; Communications to Holders |
| 36 |
Section 703. | |
Reports by Trustee |
| 37 |
Section 704. | |
Reports by Company |
| 38 |
| |
|
| |
ARTICLE VIII |
| |
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| |
CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER |
| |
|
| |
Section 801. | |
Company May Consolidate, Etc. Only on Certain Terms |
| 38 |
Section 802. | |
Successor Corporation Substituted |
| 38 |
ARTICLE IX |
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SUPPLEMENTAL INDENTURES |
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Section 901. | |
Supplemental Indentures Without Consent of Holders |
| 39 |
Section 902. | |
Supplemental Indentures With Consent of Holders |
| 40 |
Section 903. | |
Execution of Supplemental Indentures |
| 41 |
Section 904. | |
Effect of Supplemental Indentures |
| 41 |
Section 905. | |
Conformity With Trust Indenture Act |
| 42 |
Section 906. | |
Reference in Securities to Supplemental Indentures |
| 42 |
Section 907. | |
Revocation and Effect of Consents |
| 42 |
Section 908. | |
Modification Without Supplemental Indenture |
| 42 |
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ARTICLE X |
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COVENANTS |
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Section 1001. | |
Payment of Principal, Premium and Interest |
| 42 |
Section 1002. | |
Maintenance of Office or Agency |
| 43 |
Section 1003. | |
Money for Securities Payments to Be Held in Trust |
| 44 |
Section 1004. | |
Corporate Existence |
| 45 |
Section 1005. | |
Defeasance of Certain Obligations |
| 45 |
Section 1006. | |
Statement by Officers as to Default |
| 46 |
Section 1007. | |
Waiver of Certain Covenants |
| 46 |
Section 1008. | |
Maintenance of Properties |
| 47 |
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ARTICLE XI |
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REDEMPTION OF SECURITIES |
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Section 1101. | |
Applicability of Article |
| 47 |
Section 1102. | |
Election to Redeem; Notice to Trustee |
| 47 |
Section 1103. | |
Selection by Trustee of Securities to Be Redeemed |
| 47 |
Section 1104. | |
Notice of Redemption |
| 48 |
Section 1105. | |
Securities Payable on Redemption Date |
| 49 |
Section 1106. | |
Securities Redeemed in Part |
| 49 |
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ARTICLE XII |
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SINKING FUNDS |
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Section 1201. | |
Applicability of Article |
| 49 |
Section 1202. | |
Satisfaction of Sinking Fund Payments With Securities |
| 50 |
Section 1203. | |
Redemption of Securities for Sinking Fund |
| 50 |
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ARTICLE XIII |
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REPAYMENT OF SECURITIES AT OPTION OF HOLDERS |
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Section 1301. | |
Applicability of Article |
| 50 |
Section 1302. | |
Notice of Repayment Date |
| 50 |
Section 1303. | |
Securities Payable on Repayment Date |
| 51 |
Section 1304. | |
Securities Repaid in Part |
| 51 |
INDENTURE, dated as of [ ],
20__, between SOLOWIN HOLDINGS, an exempted company incorporated under the laws of the Cayman
Islands (herein called the “Company”), and [ ] (herein called the “Trustee”).
Recitals
Of The Company
The Company has duly authorized
the execution and delivery of this Indenture to provide for the issuance from time to time of its unsecured debentures, notes or other
evidences of indebtedness (each herein called a “Security” or collectively the “Securities”),
in an unlimited aggregate principal amount to be issued in one or more series as in this Indenture provided.
All things necessary to make
this Indenture a valid agreement of the Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE
WITNESSETH:
For and in consideration of
the premises and the purchase of the Securities by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate
benefit of all Holders of the Securities or of any series thereof, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires;
(1) the
terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular;
(2) all
other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned
to them therein;
(3) all
accounting terms not otherwise defined herein have the meanings assigned to them in accordance with international financial reporting
standards, and, except as otherwise herein expressly provided, the term “international financial reporting standards”
with respect to the international financial reporting standards (IFRS) issued by the International Accounting Standards Board (IASB);
(4) the
word “or” is not exclusive; and
(5) the
words “herein”, “hereof” and “hereunder” and other words of similar import refer to this Indenture
as a whole and not to any particular Article, Section or other subdivision.
Certain terms, used principally
in Article VI, are defined in that Article.
“Act”,
when used with respect to any Holder, has the meaning specified in Section 104.
“Affiliate”
of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition, “control” when used with respect to any specified
Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative
to the foregoing.
“Authenticating
Agent” means any Person authorized by the Trustee to act on behalf of the Trustee to authenticate Securities.
“Authorized Newspaper”
means a newspaper of general circulation, in an official language of the country of publication or in the English language, customarily
published on a daily basis (including newspapers published on a daily basis except not published on Legal Holidays, as defined in Section
113) in such country. Whenever successive weekly publications in an Authorized Newspaper are required hereunder, they may be made
(unless otherwise expressly provided herein) on the same or different days of the week and in the same or different Authorized Newspapers.
“Authorized Officer”
means the Chairman of the Board, the Chief Executive Officer, the Chief Financial Officer, the Secretary, any Assistant Secretary or any
other officer or agent of the Company duly authorized by the Board of Directors to act in respect of matters relating to this Indenture.
“Board of Directors”
means either the board of directors of the Company or any duly authorized committee of that board.
“Board Resolution”
means a copy of a resolution certified by the Secretary, an Assistant Secretary or director of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee.
“Business Day”,
when used with respect to any Place of Payment or any other particular location specified in the Securities or this Indenture, means each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in that Place of Payment such other location,
or the city in which the Corporate Trust Office of the Trustee is located, are authorized or obligated by law to close, except as may
be otherwise specified as contemplated by Section 301.
“Code”
means the Internal Revenue Code of 1986, as amended.
“Commission”
means the Securities and Exchange Commission, as from time to time constituted, created under the Securities Exchange Act of 1934, or,
if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.
“Company”
means the Person named as the “Company” in the first paragraph of this instrument until a successor Person shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter “Company” shall mean such successor Person.
“Company Request”
or “Company Order” means a written request or order signed in the name of the Company by an Authorized Officer
and delivered to the Trustee.
“Corporate Trust
Office” means the principal office of the Trustee at which at any particular time its corporate trust business shall be
administered and, with respect to [ ], shall be located in [ ].
“Corporation”
includes corporations, associations, joint stock companies, limited liability companies and business trusts.
“Defaulted Interest”
has the meaning specified in Section 307.
“Depository”
means, with respect to any series of Securities issuable or issued in the form of a Global Security, an entity named as such in the Indenture,
or, if no entity is so named, an entity, if any, named by the Company as such by Board Resolution, or its successor. The Depository is
the entity which holds a Global Security, if any, and operates the computerized book-entry system through which ownership interests in
the Securities are recorded. Such entity shall at all times be a registered clearing agency under the Securities Exchange Act of 1934,
as amended, and in good standing thereunder or, in the case of an entity that holds a Global Security issued outside of the United States,
such entity shall at all times be in compliance with any applicable registration requirements and in good standing under application regulations.
“Dollar”
or “$” means a dollar or other equivalent unit in such coin or currency of the United States as at the time
shall be legal tender for the payment of public and private debts.
“Eligible Obligations”
means:
(a) with respect to Securities
denominated in Dollars, U.S. Government Obligations; or
(b) with respect to Securities
denominated in a currency other than Dollars or in a composite currency, such other obligations or instruments as shall be specified with
respect to such Securities, as contemplated by Section 301(24).
“Event of Default”
has the meaning specified in Section 501.
“Global Security”
means a Security, if any, issued to evidence all or a part of a series of Securities in accordance with Section 301.
“Holder”
means the bearer of an Unregistered Security or coupon appertaining thereto or a Person in whose name a Registered Security is registered
in the Security Register or the Person who is the record owner of any ownership interests in a Global Security.
“Indenture”
means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof and shall include the terms of particular series of Securities established
as contemplated by Section 301.
“Indexed Security”
means a Security the terms of which provide that the principal amount thereof payable at Stated Maturity may be more or less than the
principal face amount thereof at original issuance.
“Interest”,
when used with respect to an Original Issue Discount Security that by its terms bears interest only after Maturity, means interest payable
after Maturity.
“Interest Payment
Date”, when used with respect to any Security, means the Stated Maturity of an installment of interest on such Security.
“Maturity”,
when used with respect to any Security, means the date on which the principal of such Security or an installment of principal becomes
due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, upon call for redemption,
exercise of repayment option or otherwise.
“Officer’s
Certificate” means a certificate signed by an Authorized Officer and delivered to the Trustee.
“Opinion of Counsel”
means a written opinion of counsel, who may be an employee of, or counsel for, the Company or an Affiliate of the Company, and who shall
be acceptable to the Trustee.
“Original Issue
Discount Security” means any Security that provides for an amount less than the principal amount thereof to be due and payable
upon a declaration of acceleration of the Maturity thereof pursuant to Section 502.
“Outstanding”,
when used with respect to Securities, means, as of the date of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:
(a) Securities
theretofore cancelled by the Trustee or delivered to the Trustee for cancellation;
(b) Securities
or portions thereof for whose payment or redemption (a) money in the necessary amount has been theretofore deposited with the Trustee
or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as
its own Paying Agent) for the Holders of such Securities or (b) Eligible Obligations as contemplated by Sections 401 and 403
in the necessary amount have been theretofore deposited with the Trustee, in trust, for the Holders of such Securities (whether or
not the Company’s indebtedness in respect thereof shall be satisfied and discharged for purposes of this Indenture or otherwise),
provided that, if such Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture
or provision therefor satisfactory to the Trustee has been made; and
(c) Securities
that have been paid pursuant to Section 306 or in exchange for or in lieu of which other Securities have been authenticated and
delivered pursuant to this Indenture, other than any such Securities in respect of which there have been presented to the Trustee proof
satisfactory to it and the Company that such Securities are held by a bona fide purchaser in whose hands such Securities are valid obligations
of the Company;
provided, however, that in determining
whether the Holders of the requisite principal amount of the Outstanding Securities have given any request, demand, authorization, direction,
notice, consent or waiver hereunder,
(w) Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor (unless the Company,
such Affiliate or such obligor owns (i) all Securities Outstanding under this Indenture or (ii) except for the purposes of actions to
be taken by Holders of more than one series or Tranche voting as a class, all Outstanding Securities of each such series and each such
Tranche, as the case may be, determined without regard to this clause) shall be disregarded and deemed not to be Outstanding, except that,
in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent
or waiver, only Securities which the Trustee knows to be so owned shall be so disregarded. Securities so owned which have been pledged
in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so
to act with respect to such Securities and that the pledgee is not the Company or any other obligor upon the Securities or any Affiliate
of the Company or of such other obligor;
(x) in determining
whether the Holders of the requisite principal amount of Securities of any series or Tranche have concurred in any direction, waiver or
consent, the principal amount of Original Issue Discount Securities that shall be deemed to be outstanding shall be the amount of the
principal thereof that would be due and payable as of the date of such determination upon acceleration of the maturity thereof pursuant
to Section 502;
(y) in the case of
any Security the principal of which is payable from time to time without presentment or surrender, the principal amount of such Security
that shall be deemed to be Outstanding at any time for all purposes of this Indenture shall be the original principal amount thereof less
the aggregate amount of principal thereof theretofore paid; and
(z) the principal
amount of any Security which is denominated in a currency other than Dollars or in a composite currency that shall be deemed to be Outstanding
for such purposes shall be the amount of Dollars that could have been purchased by the principal amount (or, in the case of an Original
Issue Discount Security, the Dollar equivalent on the date determined as set forth below of the amount determined as provided in (x) above)
of such currency or composite currency evidenced by such Security, in each such case certified to the Trustee in an Officer’s Certificate
based (i) on the average of the mean of the buying and selling spot rates quoted by three banks which are members of the New York Clearing
House Association selected by the Company in effect at 11:00 A.M. (New York time) in The City of New York on the fifteenth Business Day
preceding any such determination or (ii) if on such fifteenth Business Day it is not possible or practicable to obtain such quotations
from such three banks, on such other quotations or alternative methods of determination that shall be as consistent as practicable with
the method set forth in (i) above.
“Paying Agent”
means any Person, including the Company, authorized by the Company to pay the principal of (and premium, if any) or interest on any Securities
on behalf of the Company.
“Periodic Offering”
means an offering of Securities of a series from time to time any or all of the specific terms of which Securities, including without
limitation the rate or rates of interest, if any, thereon, the Stated Maturity or Maturities thereof and the redemption provisions, if
any, with respect thereto, are to be determined by the Company or its agents from time to time subsequent to the initial request for the
authentication and delivery of such Securities by the Trustee, all as contemplated in Section 301 and clause (2) of Section
303.
“Person”
means any individual, corporation, partnership, limited liability company, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency or political subdivision thereof.
“Place of Payment”,
when used with respect to the Securities of any series, or any Tranche thereof, means the place or places where the principal of (and
premium, if any) and interest, if any, on the Securities of that series or Tranche are payable as specified as contemplated by Section
301.
“Predecessor Security”
of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular
Security, and, for the purposes of this definition, any Security authenticated and delivered under Section 306 in exchange for
or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost
or stolen Security.
“Redemption Date”,
when used with respect to any Security to be redeemed, means the date fixed for such redemption by or pursuant to Section 301 of
this Indenture.
“Redemption Price”,
when used with respect to any Security to be redeemed, means the price at which it is to be redeemed pursuant to this Indenture, exclusive
of accrued and unpaid interest, if any.
“Registered Security”
means any Security issued hereunder and registered by the Security Registrar or any recorded interest in a Global Security issued hereunder.
“Regular Record
Date” for the interest payable on any Interest Payment Date on the Securities of any series means the date specified for
that purpose as contemplated by Section 301.
“Repayment Date”,
when used with respect to any Security of any series to be repaid or repurchased, means the date, if any, fixed for such repayment or
for such repurchase (whether at the option of the Holders or otherwise) pursuant to Section 301 of this Indenture.
“Repayment Price”,
when used with respect to any Security of any series to be repaid, means the price, if any, at which it is to be repaid pursuant to Section
301.
“Responsible Officer”,
when used with respect to the Trustee, means any officer within the corporate trust department or any other successor group of the Trustee,
including any vice president, assistant vice president, assistant secretary or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust
matter, any other officer of the Trustee to whom such matter is referred because of his knowledge of and familiarity with the particular
subject.
“Security”
or “Securities” has the meaning stated in the first recital of this Indenture and more particularly means any
Security or Securities authenticated and delivered under this Indenture.
“Security Register”
and “Security Registrar” have the respective meanings specified in Section 305.
“Senior Securities”
means Securities other than Subordinated Securities.
“series”
or “series of Securities” means a series of Securities issued under this Indenture as determined by Board Resolution
or as otherwise determined under this Indenture, and except as otherwise provided in Section 608.
“Special Record
Date” for the payment of any Defaulted Interest means a date fixed by the Trustee pursuant to Section 307.
“Stated Maturity”,
when used with respect to any Security or any installment of principal thereof or interest thereon, means the date specified in such Security
as the fixed date on which the principal of such Security or such installment of principal or interest is due and payable.
“Subordinated
Securities” means Securities that by the terms established pursuant to Subsection 301(10) are subordinate to any specified
debt of the Company.
“Subsidiary”
means (i) any corporation, association or other business entity of which more than 50% of the outstanding total voting stock entitled
(without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by the Company or by one or more other Subsidiaries, or by the Company and one or more other
Subsidiaries or (ii) any partnership the sole general partner or the managing general partner of which is the Company or a Subsidiary
of the Company or the only general partners of which are the Company or of one or more Subsidiaries of the Company (or any combination
thereof). For the purposes of this definition, “voting stock” means, in the case of a corporation, stock which ordinarily
has voting power for the election of directors, whether at all times or only so long as no senior class of capital stock has such voting
power by reason of any contingency, in the case of an association or business entity, any and all shares, interests, participations, rights
or other equivalents (however designated) of corporate stock, in the case of a partnership or limited liability company, partnership or
membership interests (whether general or limited), and any other interest or participation that confers on a Person the right to receive
a share of the profits and losses of, or distributions of assets of, the issuing Person.
“Tranche”
means a group of Securities which (a) are of the same series and (b) have identical terms except as to principal amount or date of issuance.
“Trustee”
means the Person named as the “Trustee” in the first paragraph of this instrument until a successor Trustee shall have been
appointed with respect to one or more series of Securities pursuant to the applicable provisions of this Indenture, and thereafter “Trustee”
shall mean or include each Person who is then a Trustee hereunder, and if at any time there is more than one such Person, “Trustee”
as used with respect to the Securities of any series shall mean the Trustee with respect to Securities of that series.
“Trust Indenture
Act” means the Trust Indenture Act of 1939 as in force at the date as of which this instrument was executed, except as provided
in Section 905.
“U.S. Government
Obligations” means (a) direct obligations of the United States for the payment of which its full faith and credit is pledged,
or obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States and the payment
of which is unconditionally guaranteed by the United States and (b) certificates, depositary receipts or other instruments which evidence
a direct ownership interest in obligations described in clause (a) above or in any specific interest or principal payments due in respect
thereof; provided, however, that the custodian of such obligations or specific interest or principal payments shall be a bank or
trust company (which may include the Trustee or any Paying Agent) subject to federal or state supervision or examination with a combined
capital and surplus of at least $50,000,000; and provided, further, that except as may be otherwise required by law, such custodian
shall be obligated to pay to the holders of such certificates, depositary receipts or other instruments the full amount received by such
custodian in respect of such obligations or specific payments and shall not be permitted to make any deduction therefrom.
“U.S. Person”
means a citizen, national or resident of the United States, a corporation, partnership, limited liability company, or other entity created
or organized in or under the laws of the United States or any political subdivision thereof, or an estate or trust whose income from sources
without the United States is includible in gross income for United States federal income tax purposes regardless of its connection with
the conduct of a trade or business within the United States.
“Unregistered
Security” means any Security issued hereunder which is not a Registered Security.
“Vice President”,
when used with respect to the Company or the Trustee, means any vice president, whether or not designated by a number or a word or words
added before or after the title “vice president”.
“Yield to Maturity”
means the yield to maturity, calculated by the Company at the time of issuance of a series of Securities or, if applicable, at the most
recent determination of interest on such series in accordance with accepted financial practice.
Section 102. Compliance
Certificates and Opinions. Except as otherwise expressly provided in this Indenture upon any application or request by the
Company to the Trustee to take any action under any provision of this Indenture, the Company shall, if requested by the Trustee,
furnish to the Trustee an Officer’s Certificate stating that all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel all
such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which
the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application
or request, no additional certificate or opinion need be furnished.
Every certificate or opinion
with respect to compliance with a condition or covenant provided for in this Indenture (other than certificates provided pursuant to Section
704(4)) shall include:
(1) a
statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating
thereto;
(2) a
brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a
statement that, in the opinion of each such individual, he has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition has been complied with; and
(4) a
statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with.
Section 103. Form of
Documents Delivered to Trustee. In any case where several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person,
or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to
some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.
Any certificate or opinion
of an officer of the Company may be based, insofar as it relates to legal matters, upon an Opinion of Counsel. Any such Opinion of Counsel
may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers
of the Company stating that the information with respect to such factual matters is in the possession of the Company.
Where any Person is required
to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this
Indenture, they may, but need not, be consolidated and form one instrument.
Section 104. Acts of
Holders.
(a) Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to be made, given or taken by Holders may be embodied in
and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed
in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee and, where it is hereby expressly required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent, or of the holding
by any Person of Unregistered Securities, shall be sufficient for any purpose of this Indenture and (subject to Section 601) conclusive
in favor of the Trustee and the Company, if made in the manner provided in this Section.
(b) The
fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution
or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual
signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity
other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and
date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any
other manner acceptable to the Trustee.
(c) The
amount of Unregistered Securities held by any Person executing any such instrument or writings as the Holder thereof, and the numbers
of such Unregistered Securities, and the date of his holding the same, may be proved by the production of such Unregistered Securities
or by a certificate executed, as depositary, by any trust company, bank, banker or member of a national securities exchange (wherever
situated), if such certificate is in form satisfactory to the Trustee, showing that at the date therein mentioned such Person had on deposit
with such depositary, or exhibited to it, the Unregistered Securities therein described; or such facts may be proved by the certificate
or affidavit of the Person executing such instrument or writing as the Holder thereof, if such certificate or affidavit is in form satisfactory
to the Trustee. The Trustee and the Company may assume that such ownership of any Unregistered Securities continues until (1) another
certificate bearing a later date issued in respect of the same Unregistered Securities is produced, or (2) such Unregistered Securities
are produced by some other Person, or (3) such Unregistered Securities are registered as to principal or are surrendered in exchange for
Unregistered Securities, or (4) such Unregistered Securities are no longer Outstanding.
(d) The
fact and date of execution of any such instrument or writing and the amount and number of Unregistered Securities held by the Person so
executing such instrument or writing may also be proved in any other manner that the Trustee deems sufficient; and the Trustee may in
any instance require further proof with respect to any of the matters referred to in this Section.
(e) The
principal amount (except as otherwise contemplated in clause (x) of the proviso to the definition of “Outstanding”) and serial
numbers of Securities held by any Person, and the date of holding the same, shall be proved by the Security Register.
(f) Any
request, demand, authorization, direction, notice, consent, election, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor
or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company in reliance thereon, whether
or not notation of such action is made upon such Security.
(g) The
Company may set a record date for purposes of determining the identity of Holders of any Securities of any series entitled to vote or
consent to any action by vote or consent authorized or permitted by Section 512 or 513. Such record date shall be the later
of 30 days prior to the first solicitation of such consent or the date of the most recent list of Holders of such Securities furnished
to the Trustee pursuant to Section 701 prior to such solicitation.
(h) If
the Company solicits from Holders any request, demand, authorization, direction, notice, consent, waiver or other Act, the Company may,
at its option, fix in advance a record date for the determination of Holders entitled to give such request, demand, authorization, direction,
notice, consent, waiver or other Act, but the Company shall have no obligation to do so. If such a record date is fixed, such request,
demand, authorization, direction, notice, consent, waiver or other Act may be given before or after such record date, but only the Holders
of record at the close of business on the record date shall be deemed to be Holders for the purposes of determining whether Holders of
the requisite proportion of the Outstanding Securities have authorized or agreed or consented to such request, demand, authorization,
direction, notice, consent, waiver or other Act, and for that purpose the Outstanding Securities shall be computed as of the record date.
Section 105. Notices,
Etc. to Trustee and Company. Except as otherwise provided herein, any request, demand, authorization, direction, notice,
consent, election, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with,
(1) the
Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing
to or with the Trustee at its Corporate Trust Office, Attention: [ ], [ ], or
(2) the
Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if
in writing and mailed, first-class postage prepaid, to the Company addressed to it at the address of its principal office specified in
the first paragraph of this instrument or at any other address previously furnished in writing to the Trustee by the Company.
Section 106. Notice
to Holders; Waiver. Except as otherwise expressly provided herein, where this Indenture provides for notice of any event or
reports to Holders, such notice or report shall be sufficiently given if in writing and mailed, first-class postage prepaid, to each
Holder of Registered Securities affected by such event, at the address of such Holder as it appears in the Security Register and to
addresses filed with the Trustee or preserved on the Trustee’s list pursuant to Section 702(a) for other Holders (and
to such other addressees as may be required in the case of such notice or report under Section 313(c) of the Trust Indenture Act),
not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice or report.
In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall
affect the sufficiency of such notice with respect to other Holders.
Notice shall be sufficiently
given to Holders of Unregistered Securities if published in an Authorized Newspaper in each of The City of New York and, if such Securities
are listed on any stock exchange outside of the United States, in the city in which such stock exchange is located, or in such other city
or cities as may be specified in the Securities, once in each of two different calendar weeks, the first publication to be not earlier
than the earliest date, and not later than the last date, if any, prescribed for the giving of such notice.
Where this Indenture provides
for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the
event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.
In case by reason of the suspension
of regular mail service or by reason of any other cause is impracticable to give such notice by mail, then such notification that is made
with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder.
If it is impractical in the
opinion of the Trustee or the Company to make any publication of any notice required hereby in an Authorized Newspaper, any publication
or other notice in lieu thereof that is made or given with the approval of the Trustee shall constitute a sufficient publication of such
notice.
Section 107. Conflict
With Trust Indenture Act. If any provision hereof limits, qualifies or conflicts with the duties imposed by operation of
subsection (c) of Section 318 of the Trust Indenture Act, the imposed duties shall control.
Section 108. Effect
of Headings and Table of Contents. The Article and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
Section 109. Successors
and Assigns. All covenants and agreements in this Indenture by the Company shall bind its successors and assigns, whether so
expressed or not.
Section 110. Separability
Clause. In case any provision in this Indenture or in the Securities is invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
Section 111. Benefits
of Indenture. Nothing in this Indenture or in the Securities, express or implied, shall give to any Person, other than the
parties hereto (including any Paying Agent appointed pursuant to Section 1002 and Authenticating Agent appointed pursuant to Section
614 to the extent provided herein) and their successors hereunder and the Holders, any benefit or any legal or equitable right,
remedy or claim under this Indenture.
Section 112. Governing
Law. This Indenture and the Securities shall be governed by and construed in accordance with the laws of the State of New
York.
Section 113. Legal
Holidays. In any case where any Interest Payment Date, Redemption Date, Repayment Date or Stated Maturity of any Security is not
a Business Day at any Place of Payment or the city in which the Corporate Trust Office of the Trustee is located, then
(notwithstanding any other provision of this Indenture or of the Securities other than a provision in Securities of any series, or
any Tranche thereof, or in the Board Resolution or Officer’s Certificate that establishes the terms of such Securities or
Tranche, that specifically states that such provision shall apply in lieu of this Section) payment of interest or principal (and
premium, if any) need not be made at such Place of Payment on such date, but may be made on the next succeeding Business Day at such
Place of Payment with the same force and effect as if made on the Interest Payment Date or Redemption Date, Repayment Date, or at
the Stated Maturity, provided that no interest shall accrue with respect to such payment for the period from and after such
Interest Payment Date, Redemption Date, Repayment Date or Stated Maturity, as the case may be.
Section 114. Rules by
Trustee and Agents. The Trustee may make reasonable rules for action by or at a meeting of Holders of one or more series. The
Paying Agent or Security Registrar may make reasonable rules and set reasonable requirements for its functions.
Section 115. No
Recourse Against Others. No past, present or future director, officer, stockholder or employee, as such, of the Company or any
successor corporation shall have any liability for any obligation of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their creation. Each Holder by accepting a Security waives and
releases all such liability. The waiver and release are part of the consideration for the execution of this Indenture and the issue
of the Securities.
ARTICLE II
SECURITY FORMS
Section 201. Forms
Generally. The Securities of each series and related coupons, if any, shall be in substantially the form as shall be established
by or pursuant to a Board Resolution or in one or more indentures supplemental hereto, in each case with such appropriate
insertions, omissions, substitutions and other variations as are required or permitted by this Indenture and may have such letters,
numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules
of any securities exchange or as may, consistently herewith, be determined by the officers executing such Securities, as evidenced
by their execution of the Securities. When the form of Securities of any series is established by action taken pursuant to a Board
Resolution, a copy of an appropriate record of such action shall be delivered to the Trustee at or prior to the delivery of the
Company Order contemplated by Section 303 for the authentication and delivery of such Securities.
If required or appropriate
under applicable law, Unregistered Securities and their coupons must have the following statement on their face: “Any United States
person who holds this obligation will be subject to limitations under the United States income tax laws, including the limitations provided
in Sections 165(j) and 1287(a) of the Internal Revenue Code”. If required or appropriate under applicable law, Unregistered Securities
and their coupons must have the following statement on their face: “By accepting this obligation, the Holder represents and warrants
that it is not a U.S. Person (other than an exempt recipient described in section 6049(b)(4) of the Internal Revenue Code and the regulations
thereunder) and that it is not acting for or on behalf of a U.S. Person (other than an exempt recipient described in section 6049(b)(4)
of the Internal Revenue Code and the regulations thereunder).”
The definitive Securities
shall be produced in such manner or combination of manners, all as determined by the officers executing such Securities, as evidenced
by their execution of such Securities.
Section 202. Form of
Trustee’s Certificate of Authentication. The Trustee’s certificate of authentication shall be in substantially the
following form:
This is one of the Securities
of the series designated herein, referred to in the within-mentioned Indenture.
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Authorized Officer |
ARTICLE III
THE SECURITIES
Section 301. Amount
Unlimited; Issuable in Series. The aggregate principal amount of Securities that may be authenticated and delivered under this
Indenture is unlimited.
The Securities may be issued
in one or more series. There may be Registered Securities and Unregistered Securities within a series. Registered and Unregistered Securities
may be in temporary or permanent global form. Unregistered Securities may be issued with or without coupons attached. Unregistered Securities
may be subject to such restrictions, and contain such legends, as may be required by United States laws and regulations. Subject to the
last paragraph of this Section, there shall be established in or pursuant to a Board Resolution, and set forth in an Officer’s Certificate,
or established in one or more indentures supplemental hereto, prior to the issuance of Securities of any series,
(1) the
title of the Securities of the series (which shall distinguish the Securities of the series from all other Securities);
(2) any
limit upon the aggregate principal amount of the Securities of the series that may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities
of the series pursuant to Section 304, 305, 306, 906, 1107 or 1305 and except for any Securities
that, pursuant to Section 303, are deemed never to have been authenticated and delivered hereunder);
(3) the
price or prices (expressed as a percentage of the principal amount thereof) at which the securities will be issued and the date or dates
on which the principal (and premium, if any) of the Securities of the series, or any Tranche thereof, is payable;
(4) the
date or dates on which the principal of the Securities of such series, or any Tranche thereof, is payable or any formula or other method
or other means by which such date or dates shall be determined, by reference to an index or other fact or event ascertainable outside
of this Indenture or otherwise (without regard to any provisions for redemption, prepayment, acceleration, purchase or extension);
(5) the
rate or rates at which the Securities of such series, or any Tranche thereof, shall bear interest, if any (including the rate or rates
at which overdue principal shall bear interest, if different from the rate or rates at which such Securities shall bear interest prior
to Maturity, and, if applicable, the rate or rates at which overdue premium or interest shall bear interest, if any), or any formula or
other method or other means by which such rate or rates shall be determined, by reference to an index or other fact or event ascertainable
outside of this Indenture or otherwise; the date or dates from which such interest shall accrue; the Interest Payment Dates on which such
interest shall be payable and the Regular Record Date, if any, for the interest payable on such Securities on any Interest Payment Date;
the right of the Company, if any, to extend the interest payment periods and the duration of any such extension as contemplated by Section
312; and the basis of computation of interest, if other than as provided in Section 310;
(6) the
place or places where the principal of (and premium, if any) and interest, if any, on Securities of the series, or any Tranche thereof,
shall be payable, any Registered Securities of the series, or any Tranche thereof, may be surrendered for registration of transfer, Securities
of the series, or any Tranche thereof, may be surrendered for exchange, and where notices and demands to or upon the Company in respect
of the Securities of the series, or any Tranche thereof, and this Indenture may be served and notices to Holders pursuant to Section
106 will be published; the Security Registrar and any Paying Agent or Agents for such series or Tranche; and if such is the case,
that the principal of such Securities shall be payable without presentment or surrender thereof;
(7) if
applicable, the period or periods within which, the price or prices at which and the terms and conditions upon which Securities of the
series, or any Tranche thereof, may be redeemed, in whole or in part, at the option of the Company;
(8) the
obligation, if any, of the Company to redeem or purchase Securities of the series, or any Tranche thereof, pursuant to any sinking fund
or analogous provisions and the period or periods within which, the price or prices at which and the terms and conditions upon which Securities
of the series, or any Tranche thereof, shall be redeemed or purchased, in whole or in part, pursuant to such obligation;
(9) the
obligation, if any, of the Company to offer to repay or repurchase Securities of the series, or any Tranche thereof, in circumstances
described therein, and the period or periods within which, the price or prices at which and the terms and conditions upon which Securities
of the series, or any Tranche thereof, shall be repaid or repurchased, in whole or in part, at the option of the Holders;
(10) the
terms, if any, on which the Securities of such series will be subordinate in right and priority of payment to other debt of the Company;
(11) the
right, if any, of the Company to execute and deliver to the Trustee, and to direct the Trustee to authenticate and deliver in accordance
with a Company Order, a Security of any series, or any Tranche thereof, in lieu of or in exchange for any Securities of such series, or
any Tranche thereof, cancelled upon redemption or repayment;
(12) the
denominations in which any Registered Securities of the series, or any Tranche thereof, shall be issuable, if other than denominations
of $1,000 and any integral multiple thereof, and the denomination or denominations in which any Unregistered Securities of the series,
or any Tranche thereof, shall be issuable, if other than the denomination of $5,000;
(13) if
other than the principal amount thereof, the portion of the principal amount of Securities of the series, or any Tranche thereof, that
shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 502;
(14) whether
Securities of the series are to be issuable as Registered Securities, Unregistered Securities, or both, whether Securities of the series
are to be issuable with or without coupons, whether any Securities of the series are to be issuable initially in temporary global form
(and, if so, the identity of the depositary for such Securities) and the circumstances under which such Securities in temporary global
form may be exchanged for definitive Securities, and whether any Securities of the series are to be issuable in permanent global form
(and, if so, the identity of the depositary for such Securities) with or without coupons and, if so, whether beneficial owners of interests
in any such permanent Global Security may exchange such interests for Securities of such series and of like tenor of any authorized form
and denomination and the circumstances under which any such exchanges may occur, if other than in the manner provided in Section 311;
(15) whether
and under what circumstances the Company will pay additional amounts on the Securities of that series held by a person who is not a U.S.
Person in respect of taxes or similar charges withheld or deducted and, if so, whether the Company will have the option to redeem such
Securities rather than pay such additional amounts;
(16) the
currency or currencies, including composite currencies, in which payment of the principal of (and premium, if any) and interest, if any,
on the Securities of the series, or any Tranche thereof, shall be payable (if other than the currency of the United States of America)
and the formula or other method or other means by which the equivalent of any such amount in Dollars is to be determined for any purpose,
including for the purpose of determining the principal amount of such Securities deemed to be Outstanding at any time;
(17) if
the principal of or premium, if any, or interest, if any, on the Securities of such series, or any Tranche thereof, are to be payable,
at the election of the Company or a Holder thereof, in a coin or currency other than that in which the Securities are stated to be payable,
the period or periods within which, and the terms and conditions upon which, such election may be made;
(18) if
the principal of or premium, if any, or interest, if any, on the Securities of such series, or any Tranche thereof, are to be payable,
or are to be payable at the election of the Company or a Holder thereof, in securities or other property, the type and amount of such
securities or other property, or the formula or other method or other means by which such amount shall be determined, and the period or
periods within which, and the terms and conditions upon which, any such election may be made;
(19) if
the amount of payments of principal of (and premium, if any) or interest on the Securities of the series may be determined with reference
to an index or other fact or event ascertainable outside of this Indenture, the manner in which such amounts shall be determined to the
extent not established pursuant to paragraph (5) of this Section;
(20) the
form or forms of the Securities, including such legends as may be required by United States laws or regulations, the form of any coupons
or temporary Global Security, if any, which may be issued and the forms of any certificates which may be required hereunder or under United
States laws or regulations in connection with the offering, sale, delivery or exchange of Unregistered Securities, if any;
(21) the
Person to whom any interest on any Registered Security of the series, or any Tranche thereof, shall be payable, if other than the Person
in whose name that Security is registered at the close of business on the Regular Record Date for such interest, and the manner in which,
or the Person to whom, any interest on any Unregistered Security of the series, or any Tranche thereof, shall be payable, if otherwise
than upon presentation and surrender of the coupons appertaining thereto as they severally mature, and the extent to which, or the manner
in which, any interest payable on a temporary or permanent Global Security on an interest payment date will be paid;
(22) any
Events of Default, in addition to those specified in Section 501, with respect to the Securities of such series, and any covenants
of the Company for the benefit of the Holders of the Securities of such series, or any Tranche thereof, in addition to those set forth
in Article X;
(23) the
terms, if any, pursuant to which the Securities of such series, or any Tranche thereof, may be converted into or exchanged for shares
of capital stock or other securities of the Company or any other Person, provided always that (x) any variation of class rights shall
be subject to the Company’s Articles of Association, (y) the Company shall ensure that the applicable class of shares into which
the Securities are convertible has been created, and (z) the Company shall maintain sufficient authorized share capital to permit the
conversion of the Securities into the applicable class of shares;
(24) the
obligations or instruments, if any, that shall be considered to be Eligible Obligations in respect of the Securities of such series, or
any Tranche thereof, denominated in a currency other than Dollars or in a composite currency, and any additional or alternative provisions
for the reinstatement of the Company’s indebtedness in respect of such Securities after the satisfaction and discharge thereof as
provided in Section 401;
(25) any
exceptions to Section 113, or variation in the definition of Business Day, with respect to the Securities of such series, or any
Tranche thereof;
(26) any
collateral security, assurance or guarantee for the Securities of such series;
(27) the
non-applicability of Section 608 to the Securities of such series or any exceptions or modifications of Section 608 with
respect to the Securities of such series;
(28) any
rights or duties of another Person to assume the obligations of the Company with respect to the Securities of such series (whether as
joint obligor, primary obligor, secondary obligor or substitute obligor) and any rights or duties to discharge and release any obligor
with respect to the Securities of such series or this Indenture to the extent related to such series;
(29) if
a service charge will be made for the registration of transfer or exchange of Securities of such series, or any Tranche thereof, the amount
or terms thereof; and
(30) any
other terms, conditions and rights of the series (which terms, conditions and rights shall not be inconsistent with the provisions of
this Indenture, except as permitted by Section 901(5)).
All Securities of any one
series and the coupons appertaining to any Unregistered Securities of such series shall be substantially identical except in the case
of Registered Securities as to denomination and except as may otherwise be provided in or pursuant to such Board Resolution and set forth
in such Officer’s Certificate or in any such indenture supplemental hereto and as reasonably acceptable to the Trustee. Securities
of different series may differ in any respect.
If the terms and form or forms
of any series of Securities are established by or pursuant to a Board Resolution, the Company shall deliver a copy of such Board Resolution
to the Trustee at or prior to the issuance of such series with (1) the form or forms of Security that have been approved attached thereto,
or (2) if such Board Resolution authorizes a specific officer or officers to approve the terms and form or forms of the Securities, a
certificate of such officer or officers approving the terms and form or forms of Security with such form or forms of Securities attached
thereto. Such Board Resolution or certificate may provide general terms or parameters for Securities of any series and may provide that
the specific terms of particular Securities of a series may be determined in accordance with or pursuant to the Company Order referred
to in Section 303 hereof.
With respect to Securities
of a series subject to a Periodic Offering, the indenture supplemental hereto or the Board Resolution that establishes such series, or
the Officer’s Certificate pursuant to such supplemental indenture or Board Resolution, as the case may be, may provide general terms
or parameters for Securities of such series and provide either that the specific terms of Securities of such series, or any Tranche thereof,
shall be specified in a Company Order or that such terms shall be determined by the Company or its agents in accordance with procedures
specified in a Company Order as contemplated by the third paragraph of Section 303.
Unless otherwise specified
with respect to a series of Securities pursuant to paragraph (2) of this Section, any limit upon the aggregate principal amount of a series
of Securities may be increased without the consent of any Holders and additional Securities of such series may be authenticated and delivered
up to the limit upon the aggregate principal amount authorized with respect to such series as so increased.
Section 302. Denominations.
The Securities of each series shall be issuable in registered or unregistered form with or without coupons in such denominations as
shall be specified as contemplated by Section 301. In the absence of any such provisions with respect to the Securities of
any series, the Registered Securities of such series shall be issuable in denominations of $1,000 and any integral multiple thereof
and the Unregistered Securities of the series shall be issuable in denominations of $5,000 and any integral multiple thereof.
Section 303. Execution,
Authentication, Delivery and Dating. The Securities shall be executed on behalf of the Company by its Chairman of the Board and
Chief Executive Officer, its President, its Senior Vice President, Finance, or its Treasurer, under its corporate seal reproduced
thereon attested by its Secretary or one of its Assistant Secretaries. The signature of any of these officers on the Securities may
be manual or facsimile. The coupons, if any, of Unregistered Securities shall bear the manual or facsimile signature of any one of
the officers or assistant officers referred to in the first sentence of this Section.
Securities bearing the manual
or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding
that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did
not hold such offices at the date of such Securities.
At any time and from time
to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series executed by the Company to
the Trustee for authentication, together with a Company Order for the authentication and delivery of such Securities, and the Trustee
in accordance with the Company Order shall authenticate and deliver such Securities provided, however, that, with respect to Securities
of a series subject to a Periodic Offering, (a) such Company Order may be delivered by the Company to the Trustee prior to the delivery
to the Trustee of such Securities for authentication and delivery, (b) the Trustee shall authenticate and deliver Securities of such series
for original issue from time to time, in an aggregate principal amount not exceeding the aggregate principal amount established for such
series, all pursuant to a Company Order or pursuant to such procedures acceptable to the Trustee as may be specified from time to time
by a Company Order, (c) the maturity date or dates, original issue date or dates, interest rate or rates and any other terms of Securities
of such series shall be determined by Company Order or pursuant to such procedures and (d) if provided for in such procedures, such Company
Order may authorize authentication and delivery pursuant to oral or electronic instructions from the Company or its duly authorized agent
or agents, which oral instructions shall be promptly confirmed in writing.
In authenticating such Securities,
and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an Opinion of Counsel stating:
(a) that
such form of Securities has been established in conformity with the provisions of this Indenture;
(b) that
such terms have been established in conformity with the provisions of this Indenture; and
(c) that
such Securities, when authenticated and delivered by the Trustee and issued by the Company in the manner and subject to any conditions
specified in such Opinion of Counsel, will constitute valid and legally binding obligations of the Company, enforceable in accordance
with their terms, subject to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’
rights generally and to general equity principles.
Notwithstanding the provisions
of Section 301 and of the preceding paragraphs, if all Securities of a series are not to be originally issued at one time, it shall
not be necessary to deliver the Officer’s Certificate otherwise required pursuant to Section 301 or the Company Order and
Opinion of Counsel otherwise required pursuant to such preceding paragraphs at or prior to the time of authentication of each Security
of such series if such documents are delivered at or prior to the authentication upon original issuance of the first Security of such
series to be issued.
If such form or terms have
been so established, the Trustee shall not be required to authenticate such Securities if the issuance of such Securities pursuant to
this Indenture will affect the Trustee’s own rights, duties or immunities under the Securities and this Indenture or otherwise in
a manner which is not reasonably acceptable to the Trustee.
Each Registered Security shall
be dated the date of its authentication and each Unregistered Security shall be dated the date of its original issuance.
No Security shall be entitled
to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication
substantially in the form provided for herein executed by the Trustee by manual signature and no coupon shall be valid until the Security
to which it appertains has been so authenticated, and such certificate upon any Security shall be conclusive evidence, and the only evidence,
that such Security has been duly authenticated and delivered hereunder and is entitled to the benefits of this Indenture.
Notwithstanding the foregoing,
until the Company has delivered an Officer’s Certificate to the Trustee and the Security Registrar stating that, as a result of
the action described, the Company would not suffer adverse consequences under the provisions of United States law or regulations in effect
at the time of the delivery of Unregistered Securities, the Trustee or the Security Registrar will (i) deliver Unregistered Securities
only outside the United States and its possessions and (ii) release Unregistered Securities in definitive form to the person entitled
to physical delivery thereof only upon presentation of a certificate in the form prescribed by the Company.
Section 304. Temporary
Securities. Pending the preparation of definitive Registered Securities of any series (including Global Securities), the Company
may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary Registered Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the
definitive Registered Securities in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as evidenced by their execution of such Securities. Every
temporary Registered Security shall be executed by the Company and authenticated by the Trustee, and registered by the Security
Registrar, upon the same conditions, and with like effect, as a definitive Registered Security.
If temporary Securities of
any series are issued, the Company will cause definitive Registered Securities of that series to be prepared without unreasonable delay.
After the preparation of definitive Registered Securities of such series, the temporary Registered Securities of such series shall be
exchangeable for definitive Registered Securities of such series upon surrender of the temporary Registered Securities of such series
at the office or agency of the Company in a Place of Payment for that series, without charge to the Holder. Upon surrender for cancellation
of any one or more temporary Registered Securities of any series the Company shall execute and the Trustee shall authenticate and deliver
in exchange therefor a like principal amount of definitive Registered Securities of the same series of authorized denominations. Until
so exchanged the temporary Registered Securities of any series shall in all respects be entitled to the same benefits under this Indenture
as definitive Registered Securities of such series.
Until definitive Unregistered
Securities of any series (including Global Securities) are ready for delivery, the Company may prepare and execute and the Trustee shall
authenticate one or more temporary Unregistered Securities, which may have coupons attached or which may be in the form of one or more
temporary Global Unregistered Securities of that series without coupons. The temporary Unregistered Security or Securities of any series
shall be substantially in the form approved by or pursuant to a Board Resolution and shall be delivered to one of the Paying Agents located
outside the United States and its possessions or to such other person or persons as the Company shall direct against such certification
as the Company may from time to time prescribe by or pursuant to a Board Resolution. The temporary Unregistered Security or Securities
of a series shall be executed by the Company and authenticated by the Trustee upon the same conditions, and with like effect, as a definitive
Unregistered Security of such series, except as provided herein or in the Board Resolution or supplemental Indenture relating thereto.
A temporary Unregistered Security or Securities shall be exchangeable for definitive Unregistered Securities at the time and on the conditions,
if any, specified in the temporary Security.
Upon any exchange of a part
of a temporary Unregistered Security of a series for definitive Unregistered Securities of such series, the temporary Unregistered Security
shall be endorsed by the Trustee or Paying Agent to reflect the reduction of its principal amount by an amount equal to the aggregate
principal amount of the definitive Unregistered Securities of such series so exchanged and endorsed.
Section 305. Registration,
Registration of Transfer and Exchange. The Company shall cause to be kept at the Corporate Trust Office of the Trustee a
register (the register maintained in such office and in any other office or agency of the Company in a Place of Payment being herein
sometimes collectively referred to as the “Security Register”) in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration of Securities and of transfers of Securities. The
Trustee is hereby appointed “Security Registrar” for the purpose of registering Securities and transfers
of Securities as herein provided.
Except in the case of Securities
issued in the form of a Global Security, upon surrender for registration of transfer of any Registered Security of any series at the office
or agency of the Company in a Place of Payment for that series, the Company shall execute, and the Trustee shall authenticate and deliver,
in the name of the designated transferee or transferees, one or more new Registered Securities of the same series, of any authorized denominations
and of a like aggregate principal amount.
If both Registered and Unregistered
Securities are authorized for a series of Securities and the terms of such Securities permit, (i) Unregistered Securities may be exchanged
for an equal principal amount of Registered or Unregistered Securities of the same series and date of maturity in any authorized denominations
upon delivery to the Security Registrar (or a Paying Agent (as herein defined), if the exchange is for Unregistered Securities) of the
Unregistered Security with all unmatured coupons and all matured coupons in default appertaining thereto and if all other requirements
of the Security Registrar (or such Paying Agent) and such Securities for such exchange are met, and (ii) Registered Securities, other
than Securities issued in the form of a Global Security (except as provided in Section 311), may be exchanged for an equal principal
amount of Unregistered Securities of the same series and date of maturity in any authorized denominations (except that any coupons appertaining
to such Unregistered Securities which have matured and have been paid shall be detached) upon delivery to the Security Registrar of the
Registered Securities and if all other requirements of the Security Registrar and such Securities for such exchange are met.
Notwithstanding the foregoing,
the exchange of Unregistered Securities for Registered Securities or Registered Securities for Unregistered Securities will be subject
to the satisfaction of the provisions of United States law and regulations in effect at the time of such exchange, and no exchange of
Registered Securities for Unregistered Securities will be made until the Company has notified the Trustee in an Officer’s Certificate
and the Security Registrar that, as a result of such exchange, the Company would not suffer adverse consequences under such law or regulations.
All Securities issued upon
any registration of transfer or exchange of Securities shall be the valid obligations of the Company, evidencing the same debt, and entitled
to the same benefits under this Indenture, as the Securities surrendered upon such registration of transfer or exchange.
Every Security presented or
surrendered for registration of transfer or for exchange shall (if so required by the Company or the Trustee) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by the Holder
thereof or his attorney duly authorized in writing.
Unless otherwise provided
in a Board Resolution or an Officer’s Certificate pursuant to a Board Resolution, or in an indenture supplemental hereto, with respect
to Securities of any series, or any Tranche thereof, no service charge shall be made to the Holder for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may
be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursuant to Section 304,
906 or 1106 not involving any transfer.
The Company shall not be required
(i) to issue, register the transfer of or exchange Securities of any series during a period beginning at the opening of business 15 days
before the day of the mailing of a notice of redemption of Securities of that series selected for redemption under Section 1103
and ending at the close of business on the day of such mailing, or (ii) to register the transfer of or exchange any Security so selected
for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part. Unregistered Securities or any
coupons appertaining thereto shall be transferable by delivery thereof.
Section 306. Mutilated,
Destroyed, Lost and Stolen Securities. If any mutilated Security or a Security with a mutilated coupon or coupons appertaining
to it is surrendered to the Trustee, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a
replacement Registered Security, if such surrendered security was a Registered Security, or a replacement Unregistered Security with
coupons corresponding to the coupons appertaining to the surrendered Security, if such surrendered Security was an Unregistered
Security, of the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding.
If there shall be delivered
to the Company and the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Security or any coupon or coupons
appertaining thereto, and (ii) such bond, security or indemnity as may be required by them to save each of them and any agent of either
of them harmless, then, in the absence of actual notice to the Company or the Trustee that such Security or any coupon or coupons appertaining
thereto has been acquired by a bona fide purchaser, the Company shall execute and upon its request the Trustee shall authenticate and
deliver, a replacement Registered Security, if such Holder’s claim pertains to a Registered Security, or a replacement Unregistered
Security with coupons corresponding to the coupons appertaining to the destroyed, lost or stolen Unregistered Security or the Unregistered
Security to which such destroyed, lost or stolen coupon or coupons appertains, if such Holder’s claim pertains to an Unregistered
Security, of the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding.
In case any such mutilated,
destroyed, lost or stolen Security or any coupon or coupons appertaining thereto has become or is about to become due and payable, the
Company in its discretion may, instead of issuing a new Security, pay such Security or any coupon or coupons appertaining thereto.
Upon the issuance of any new
Security under this Section or any coupon or coupons appertaining thereto, the Company may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses
of the Trustee) connected therewith.
Every new Security or any
coupon or coupons appertaining thereto of any series issued pursuant to this Section in lieu of any destroyed, lost or stolen Security
or any coupon or coupons appertaining thereto shall constitute an original additional contractual obligation of the Company, whether or
not the destroyed, lost or stolen Security or any coupon or coupons appertaining thereto is at any time enforceable by anyone, and shall
be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities or any coupon or coupons
appertaining thereto of that series duly issued hereunder.
The provisions of this Section
are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities or any coupon or coupons appertaining thereto.
Section 307. Payment
of Interest; Interest Rights Preserved. Unless otherwise provided as contemplated by Section 301 with respect to the
Securities of any series, or any Tranche thereof, interest on any Registered Security that is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Registered Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest. In case an Unregistered
Security of any series is surrendered in exchange for a Registered Security of such series after the close of business (at an office
or agency of the Company in a Place of Payment for such series) on any Regular Record Date and before the opening of business (at
such office or agency) on the next succeeding Interest Payment Date, such Unregistered Security shall be surrendered without the
coupon relating to such Interest Payment Date and interest will not be payable on such Interest Payment Date in respect of the
Registered Security issued in exchange for such Unregistered Security, but will be payable only to the Holder of such coupon when
due in accordance with provisions of this Indenture.
Any interest on any Registered
Security of any series that is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called “Defaulted
Interest”) shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having been
such Holder, and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in clause (1) or (2) below:
(1) The
Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Registered Securities of such series (or
their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Registered Security of such series and the date of the proposed payment, and at the same time the Company
shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest
or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited
to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this clause provided. Thereupon the Trustee
shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days
prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment.
The Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first-class postage prepaid,
to each Holder of Registered Securities of such series at the address of such Holder as it appears in the Security Register, not less
than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date
therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names the Registered Securities of such
series (or their respective Predecessor Securities) are registered at the close of business on such Special Record Date and shall no longer
be payable pursuant to the following clause (2). In case an Unregistered Security of any series is surrendered at the office or agency
of the Company in a Place of Payment for such series in exchange for a Registered Security of such series after the close of business
at such office or agency on any Special Record Date and before the opening of business at such office or agency on the related proposed
date for payment of Defaulted Interest, such Unregistered Security shall be surrendered without the coupon relating to such proposed date
of payment and Defaulted Interest will not be payable on such proposed date of payment in respect of the Registered Security issued in
exchange for such Unregistered Security, but will be payable only to the Holder of such coupon when due in accordance with the provisions
of this Indenture.
(2) The
Company may make payment of any Defaulted Interest on the Registered Securities of any series in any other lawful manner not inconsistent
with the requirements of any securities exchange on which such Securities may be listed, and upon such notice as may be required by such
exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment
shall be deemed practicable by the Trustee.
Subject to the foregoing provisions
of this Section, each Registered Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu
of any other Registered Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other
Registered Security.
Subject to the limitations
set forth in Section 1002, the Holder of any coupon appertaining to an Unregistered Security shall be entitled to receive the interest
payable on such coupon upon presentation and surrender of such coupon on or after the Interest Payment Date of such coupon at an office
or agency maintained for such purpose pursuant to Section 1002.
Section 308. Persons
Deemed Owners. Prior to due presentment of a Registered Security for registration of transfer, the Company, the Trustee and any
agent of the Company or the Trustee may treat the Person in whose name such Registered Security is registered as the owner of such
Registered Security for the purpose of receiving payment of principal of (and premium, if any) and (subject to Section 301 and Section
307) interest, if any, on such Registered Security and for all other purposes whatsoever, whether or not such Registered
Security be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to
the contrary.
Ownership of Registered Securities
of a series shall be proved by the computerized book-entry system of the Depository in the case of Registered Securities issued in the
form of a Global Security. Ownership of Unregistered Securities may be proved by the production of such Unregistered Securities or by
a certificate or affidavit executed by the person holding such Unregistered Securities or by a depository with whom such Unregistered
Securities were deposited, if the certificate or affidavit is satisfactory to the Trustee and the Company. The Company, the Trustee and
any agent of the Company may treat the bearer of any Unregistered Security or coupon and the person in whose name a Registered Security
is registered as the absolute owner thereof for all purposes.
None of the Company, the Trustee,
any Paying Agent or the Security Registrar will have any responsibility or liability for any aspect of the records relating to or payments
made on account of beneficial ownership interests of a Global Security or for maintaining, supervising or reviewing any records relating
to such beneficial ownership interests.
Section 309. Cancellation.
Except as otherwise specified as contemplated by Section 301 for Securities of any series, all Securities and coupons
surrendered for payment, redemption, registration of transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee and, if not theretofore cancelled, shall be promptly
cancelled by it. Except as otherwise specified as contemplated by Section 301 for Securities of any series, the Company may
at any time deliver to the Trustee for cancellation any Securities or coupons previously authenticated and delivered hereunder that
the Company may have acquired in any manner whatsoever or that the Company has not issued and sold, and all Securities or coupons so
delivered shall be promptly cancelled by the Trustee. No Securities shall be authenticated in lieu of or in exchange for any
Securities or coupons cancelled as provided in this Section, except as expressly permitted by this Indenture. All cancelled
Securities or coupons held by the Trustee shall be destroyed and the Trustee shall furnish an affidavit to the Company (setting
forth the serial numbers of such Securities) attesting to such destruction unless by a Company Order the Company shall direct that
the cancelled Securities or coupons be returned to it.
Section 310. Computation
of Interest. Except as otherwise specified as contemplated by Section 301 for Securities of any series, interest on the
Securities of each series shall be computed on the basis of a year of twelve 30-day months.
Section 311. Global
Securities; Exchanges; Registration and Registration of Transfer. If specified as contemplated by Section 301, the
Securities may be issued in the form of one or more Global Securities, which shall be deposited with the Depository, and, unless
otherwise specified in the form of Global Security adopted pursuant to Section 301, be registered in the name of the
Depository’s nominee.
Except as otherwise specified
as contemplated by Section 301, any permanent Global Security shall be exchangeable only as provided in this paragraph. If the
beneficial owners of interests in a permanent Global Security are entitled to exchange such interests for Securities of such series of
like tenor and principal amount of another authorized form, as specified as contemplated by Section 301, then without unnecessary
delay but in any event not later than the earliest date on which such interests may be so exchanged, the Company shall deliver to the
Trustee definitive Securities of that series in aggregate principal amount equal to the principal amount of such permanent Global Security,
executed by the Company. On or after the earliest date on which such interests may be so exchanged, such permanent Global Security shall
be surrendered from time to time in accordance with instructions given to the Trustee and the Depository (which instructions shall be
in writing but need not comply with Section 102 or be accompanied by an Opinion of Counsel) by the Depository or such other depository
as shall be specified in the Company Order with respect thereto to the Trustee, as the Company’s agent for such purpose, to be exchanged,
in whole or in part, for definitive Securities of the same series without charge and the Trustee shall authenticate and deliver, in exchange
for each portion of such permanent Global Security, a like aggregate principal amount of definitive Securities of the same series of authorized
denominations and of like tenor as the portion of such permanent Global Security to be exchanged which, unless the Securities of the series
are not issuable both as Unregistered Securities and as Registered Securities, as specified as contemplated by Section 301, shall
be in the form of Unregistered Securities or Registered Securities, or any combination thereof, as shall be specified by the beneficial
owner thereof; provided, however, that no such exchanges may occur during the periods specified by Section 305; and
provided, further, that no Unregistered Security delivered in exchange for a portion of a permanent Global Security shall
be mailed or otherwise delivered to any location in the United States unless the Company has complied with the fourth paragraph of Section
305. Promptly following any such exchange in part, such permanent Global Security shall be returned by the Trustee, to the Depository
or such other depository referred to above, in accordance with the instructions of the Company referred to above.
The Global Security may be
transferred to another nominee of the Depository, or to a successor Depository selected by the Company, and upon surrender for registration
of transfer of the Global Security to the Trustee, the Company shall execute, and the Trustee shall authenticate and deliver, in the name
of the designated transferee, a new Global Security in the same aggregate principal amount. If at any time the Depository notifies the
Company that it is unwilling or unable to continue as Depository and a successor Depository satisfactory to the Company is not appointed
within 90 days after the Company receives such notice, the Company will execute, and the Trustee will authenticate and deliver, Securities
in definitive form to the Depository in exchange for the Global Security. In addition, if at any time the Company determines that it is
not in the best interest of the Company or the beneficial owners of Securities to continue to have a Global Security representing all
of the Securities held by a Depository, the Company may, at its option, execute, and the Trustee will authenticate and deliver, Securities
in definitive form to the Depository in exchange for all or a portion of the Global Security. Promptly after any such exchange of Securities
in definitive form for all or a portion of the Global Security pursuant to this paragraph, the Company shall promulgate regulations governing
registration of transfers and exchanges of Securities in definitive form, which regulations shall be reasonably satisfactory to the Trustee
and shall thereafter bind every Holder of such Securities.
Section 312. Extension
of Interest Payment. The Company shall have the right at any time, so long as the Company is not in default in the payment of
interest on the Securities of any series hereunder, to extend interest payment periods on all Securities of one or more series, if
so specified as contemplated by Section 301 with respect to such Securities and upon such terms as may be specified as
contemplated by Section 301 with respect to such Securities. If the Company ever so extends any such interest payment period,
the Company shall promptly notify the Trustee.
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 401. Satisfaction
and Discharge of Indenture. (a) This Indenture shall upon Company Request cease to be of further effect (except as to any
surviving rights of registration of transfer or exchange of Securities herein expressly provided for), and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when
(1) either
(A) all
Securities theretofore authenticated and delivered (other than (i) Securities which have been destroyed, lost or stolen and which have
been replaced or paid as provided in Section 306 and (ii) Securities that are deemed paid and discharged pursuant to Section
403) have been delivered to the Trustee for cancellation; or
(B) all
such Securities not theretofore delivered to the Trustee for cancellation
(i) have become
due and payable, or
(ii) will become
due and payable at their Stated Maturity within one year, or
(iii) are to
be called for redemption pursuant to Article XI hereof under arrangements satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the expense, of the Company, or
(iv) are deemed
paid and discharged pursuant to Section 403, as applicable, and the Company, in the case of clause (i), (ii) or (iii) above,
has deposited or caused to be deposited with the Trustee as trust funds in trust for such purpose an amount of (a) money, or (b) (I)
Eligible Obligations which through the payment of interest and principal in respect thereof in accordance with their terms will
provide on or before the Stated Maturity or Redemption Date, as the case may be, money in an amount, or (II) a combination of money
or Eligible Obligations as provided in clause (I) above, in each case sufficient, in the opinion of a nationally recognized firm of
independent certified public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge
the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancellation, for principal (and premium, if
any) and interest, if any, to the date of such deposit (in the case of Securities that have become due and payable) or to the Stated
Maturity or Redemption Date, as the case may be;
(2) the
Company has paid or caused to be paid all other sums payable hereunder by the Company; and
(3) the
Company has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this Indenture have been met.
Notwithstanding the satisfaction
and discharge of this Indenture, the obligations of the Company to the Trustee under Section 607, the obligations of the Trustee
to any Authenticating Agent under Section 614 and, if money or Eligible Obligations have been deposited with the Trustee pursuant
to subclause (B) of clause (1) of this Section or if money or Eligible Obligations shall have been deposited with or received by the Trustee
pursuant to Section 403, the obligations of the Trustee under Section 402 and the last paragraph of Section 1003
shall survive.
(b) Upon satisfaction and discharge
of this Indenture as provided in this Section 401, the Trustee shall assign, transfer and turn over to the Company, subject to
the lien provided by Section 607, any and all money, securities and other property then held by the Trustee for the benefit of
the Holders of the Securities other than money and Eligible Obligations held by the Trustee pursuant to Section 402.
Section 402. Application
of Trust Money. (a) Neither the Eligible Obligations nor the money deposited with the Trustee pursuant to Section 403(e),
nor the principal or interest payments on any such Eligible Obligations, shall be withdrawn or used for any purpose other than, and
shall be held in trust for, the payment of the principal of and premium, if any, and interest, if any, on the Securities or portions
of principal amount thereof in respect of which such deposit was made, all subject, however, to the provisions of Section
1003; provided, however, that, so long as there shall not have occurred and be continuing an Event of Default, any cash
received from such principal or interest payments on such Eligible Obligations deposited with the Trustee, if not then needed for
such purpose, shall, to the extent practicable, be invested in Eligible Obligations of the type described in Section
403(e)(2)(A) maturing at such times and in such amounts as shall be sufficient to pay when due the principal of and premium, if
any, and interest, if any, due and to become due on such Securities or portions thereof on and prior to the Maturity thereof, and
interest earned from such reinvestment shall be paid over to the Company as received by the Trustee, free and clear of any trust,
lien or pledge under this Indenture except the lien provided by Section 607; and provided, further, that, so long as
there shall not have occurred and be continuing an Event of Default, any moneys held by the Trustee in accordance with this Section
on the Maturity of all such Securities in excess of the amount required to pay the principal of and premium, if any, and interest,
if any, then due on such Securities shall be paid over to the Company free and clear of any trust, lien or pledge under this
Indenture except the lien provided by Section 607.
(b) The
Company shall pay and shall indemnify the Trustee against any tax, fee or other charge imposed on or assessed against Eligible Obligations
deposited pursuant to Section 401, 403 or 1007 or the interest and principal received in respect of such obligations
other than any payable by or on behalf of Holders.
Section 403. Satisfaction,
Discharge and Defeasance of Securities of Any Series. The Company shall be deemed to have paid and discharged the entire
indebtedness on all the Outstanding Securities of any series or Tranche, or any portion of the principal amount thereof, on the 91st
day after the date of the deposit referred to in subparagraph (e) hereof, and the provisions of this Indenture, as it relates to
such Outstanding Securities of such series, shall be satisfied and discharged and shall no longer be in effect (and the Trustee, at
the expense of the Company, shall at Company Request execute proper instruments acknowledging the same), except as to:
(a) the
rights of Holders of Securities of such series to receive, solely from the trust funds described in subparagraph (e) hereof, (i) payment
of the principal of (and premium, if any) and each installment of principal of (and premium, if any) or interest, if any, on the Outstanding
Securities of such series, or portions thereof, on the Stated Maturity of such principal or installment of principal or interest or to
and including the Redemption Date irrevocably designated by the Company pursuant to subparagraph (k) hereof and (ii) the benefit of any
mandatory sinking fund payments applicable to the Securities of such series on the day on which such payments are due and payable in accordance
with the terms of this Indenture and the Securities of such series;
(b) the
obligations of the Company and the Trustee with respect to such Securities of such series under Sections 304, 305, 306, 614,
1002, 1003 and 1203 and, if the Company shall have irrevocably designated a Redemption Date pursuant to subparagraph (k) hereof, Sections
1104 and 1106; and
(c) the
Company’s obligations with respect to the Trustee under Section 607;
provided that, the following
conditions shall have been satisfied:
(d) the
Company has deposited or caused to be irrevocably deposited (except as provided in Section 402) with the Trustee as trust funds
in trust, specifically pledged as security for, and dedicated solely to, the benefit of the Holders of the Securities of such series,
(i) money in an amount, or (ii) (A) Eligible Obligations which through the payment of interest and principal in respect thereof in accordance
with their terms will provide on or before the due date of any payment referred to in clause (x) or (y) of this subparagraph (e) money
in an amount or (B) a combination thereof, sufficient, in the opinion of a nationally recognized firm of independent certified public
accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge (x) the principal of (and premium,
if any) and each installment of principal (and premium, if any) and interest, if any, on such Securities on the Stated Maturity of such
principal or installment of principal or interest or to and including the Redemption Date irrevocably designated by the Company pursuant
to subparagraph (k) hereof and (y) any mandatory sinking fund payments applicable to the Securities of such series on the day on which
such payments are due and payable in accordance with the terms of this Indenture and of the Securities of such series;
(e) such
deposit will not result in a breach or violation of, or constitute a default under, this Indenture or any other agreement or instrument
to which the Company is a party or by which it is bound;
(f) such
provision would not cause any Outstanding Securities of such series then listed on the Nasdaq Capital Market or other securities exchange
to be delisted as a result thereof;
(g) no
Event of Default or event that with notice or lapse of time would become an Event of Default with respect to the Securities of such series
has occurred and is continuing on the date of such deposit or during the period ending on the 91st day after such date;
(h) the
Company has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel to the effect that (x) the Company has received
from, or there has been published by, the Internal Revenue Service a ruling or (y) there has been a change in law or regulation occurring
after the date hereof, to the effect that Holders of the Securities of such series will not recognize income, gain or loss for federal
income tax purposes as a result of such deposit, defeasance and discharge and will be subject to federal income tax on the same amount
and in the same manner and at the same times, as would have been the case if such deposit, defeasance and discharge had not occurred;
(i) the
Company has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent
provided for relating to the defeasance contemplated by this Section have been complied with; and
(j) if
the Company has deposited or caused to be deposited money or Eligible Obligations to pay or discharge the principal of (and premium, if
any) and interest on the Outstanding Securities of a series to and including a Redemption Date pursuant to subparagraph (e) hereof, such
Redemption Date shall be irrevocably designated by a Board Resolution delivered to the Trustee on or prior to the date of deposit of such
money or Eligible Obligations, and such Board Resolution shall be accompanied by an irrevocable Company Request that the Trustee give
notice of such redemption in the name and at the expense of the Company not less than 30 nor more than 60 days prior to such Redemption
Date in accordance with Section 1104.
ARTICLE V
REMEDIES
Section 501. Events
of Default. “Event of Default”, wherever used herein with respect to Securities of any series, means
any one of the following events:
(1) default
in the payment of any interest upon any Security of that series when it becomes due and payable, and continuance of such default for a
period of 30 days; provided, however, that a valid extension of the interest payment period by the Company as contemplated in Section
312 shall not constitute a failure to pay interest for this purpose; or
(2) default
in the payment of the principal of (or premium, if any, on) any Security of that series at its Maturity; or
(3) default
in the deposit of any sinking fund payment, when and as due by the terms of a Security of that series; or
(4) default
in the performance, or breach, of any covenant or warranty of the Company in this Indenture (other than a covenant or warranty a default
in whose performance or whose breach is elsewhere in this Section specifically dealt with or which has expressly been included in this
Indenture solely for the benefit of one or more series of Securities other than that series), and continuance of such default or breach
for a period of 60 days after there has been given, by registered or certified mail, to the Company by the Trustee or to the Company and
the Trustee by the Holders of at least 25% in aggregate principal amount of the Outstanding Securities of such series a written notice
specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default”
hereunder; or
(5) the
entry by a court having jurisdiction in the premises of (A) a decree or order for relief in respect of the Company in an involuntary case
or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization or other similar law or (B) a decree or order
adjudging the Company a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment
or composition of or in respect of the Company under any applicable federal or state law, or appointing a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the Company or of any substantial part of its property, or ordering the winding
up or liquidation of its affairs, and the continuance of any such decree or order for relief or any such other decree or order unstayed
and in effect for a period of 60 consecutive days; or
(6) the
commencement by the Company of a voluntary case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization
or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to the entry of
a decree or order for relief in respect of the Company in an involuntary case or proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it,
or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable federal or state law, or
the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee,
trustee, sequestrator or similar official of the Company or of any substantial part of its property, or the making by it of an assignment
for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or the
taking of corporate action by the Company in furtherance of any such action; or
(7) any
other Event of Default provided with respect to Securities of such series as contemplated by Sections 301 and 901(3).
Section 502. Acceleration
of Maturity; Rescission and Annulment. If an Event of Default with respect to any series or Tranche of Senior Securities at the
time Outstanding occurs and is continuing, then, unless the principal of and interest on such series or Tranche of Senior Securities
has already become due and payable, either the Trustee or the Holders of a majority in aggregate principal amount of such series or
Tranche of Senior Securities then outstanding, by notice in writing to the Company (and to the Trustee if given by such Holders),
may declare the principal of and interest on all the Senior Securities of such series or Tranche (or if any of the Senior Securities
are Original Issue Discount Securities or Indexed Securities, such portion of the principal amount of such Securities as may be
specified in the terms thereof) to be due and payable immediately and upon any such declaration the same shall become immediately
due and payable, anything in this Indenture or in the Senior Securities of such series or Tranche contained to the contrary
notwithstanding; provided, however, that if an Event of Default has occurred and is continuing with respect to more
than one series or Tranche of Senior Securities, the Trustee or the Holders of a majority in aggregate principal amount of the
Outstanding Senior Securities (or if any of the Senior Securities are Original Issue Discount Securities or Indexed Securities, such
portion of the principal amount of such Securities as may be specified in the terms thereof) of all such series or Tranches (voting
as one class) may make such declaration of acceleration, and not the Holders of the Senior Securities of any one of such series or
Tranches.
If an Event of Default with
respect to any series or Tranche of Subordinated Securities at the time Outstanding occurs and is continuing, then, unless the principal
of and interest on such series or Tranche of Subordinated Securities has already become due and payable, either the Trustee or the Holders
of a majority in aggregate principal amount of the Subordinated Securities of such series or Tranche then outstanding, by notice in writing
to the Company (and to the Trustee if given by such Holders), may declare the principal of and interest on all the Subordinated Securities
of such series or Tranche (or if any of the Subordinated Securities are Original Issue Discount Securities or Indexed Securities, such
portion of the principal amount of such Securities as may be specified in the terms thereof) to be due and payable immediately and upon
any such declaration the same shall become immediately due and payable, anything in this Indenture or in the Subordinated Securities of
such series contained to the contrary notwithstanding; provided, however, that if an Event of Default has occurred and is
continuing with respect to more than one series or Tranche of Subordinated Securities, the Trustee or the Holders of a majority in aggregate
principal amount of the Outstanding Subordinated Securities (or if any of the Subordinated Securities are Original Issue Discount Securities
or Indexed Securities, such portion of the principal amount of such Securities as may be specified in the terms thereof) of all such series
or Tranche (voting as one class) may make such declaration of acceleration, and not the Holders of the Subordinated Securities of any
one of such series or Tranches.
In the case of any declaration
of acceleration of the Stated Maturity of any Original Issue Discount Securities or Indexed Securities of a series, the Company shall
furnish the Trustee with an Officer’s Certificate stating the amount of principal to be paid to a Holder of $1,000 principal amount
of such Securities.
At any time after such a declaration
of acceleration with respect to Securities of any series has been made and before a judgment or decree for payment of the money due has
been obtained by the Trustee as hereinafter in this Article provided, the Event or Events of Default giving rise to such declaration of
acceleration shall, without further act, be deemed to have been waived, and such declaration and its consequences shall, without further
act, be deemed to have been rescinded and annulled, if
(1) the
Company has paid or deposited with the Trustee a sum sufficient to pay
(A) all
overdue interest on all Securities of any such series,
(B) the
principal of (and premium, if any, on) any Securities of such series that have become due otherwise than by such declaration of acceleration
and interest thereon at the rate or rates prescribed therefor in such Securities,
(C) to
the extent that payment of such interest is lawful, interest upon overdue interest at the rate or rates prescribed therefor in such Securities,
and
(D) all
amounts due to the Trustee under Section 607;
and
(2) all
Events of Default with respect to Securities of that series, other than the non-payment of the principal of Securities of that series
that have become due solely by such declaration of acceleration, have been cured or waived as provided in Section 513.
No such rescission shall affect
any subsequent Event of Default or impair any right consequent thereon.
Section 503. Collection
of Indebtedness and Suits for Enforcement by Trustee. If an Event of Default described in clause (1) or (2) of Section
501 has occurred and is continuing, the Company shall, upon demand of the Trustee, pay to it, for the benefit of the Holders of
the Securities of the series with respect to which such Event of Default has occurred, the whole amount then due and payable on such
Securities for principal (and premium, if any) and interest, if any, and, to the extent that payment of such interest shall be
legally enforceable, interest on any overdue principal (and premium, if any) and on any overdue interest, at the rate or rates
prescribed therefor in such Securities, and, in addition thereto, such further amount as shall be sufficient to cover any amounts
due to the Trustee under Section 607.
If the Company fails to pay
such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding
for the collection of the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may enforce the same against
the Company or any other obligor upon such Securities and collect the moneys adjudged or decreed to be payable in the manner provided
by law out of the property of the Company or any other obligor upon such Securities, wherever situated.
If an Event of Default with
respect to Securities of any series occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights
and the rights of the Holders of Securities of such series by such appropriate judicial proceedings as the Trustee deems most effectual
to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid
of the exercise of any power granted herein, or to enforce any other proper remedy.
Section 504. Trustee
May File Proofs of Claim. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to the Company or any other obligor upon the Securities
or the property of the Company or of such other obligor or their creditors, the Trustee (irrespective of whether the principal of
the Securities shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the
Trustee shall have made any demand on the Company for the payment of overdue principal or interest) shall be entitled and empowered,
by intervention in such proceeding or otherwise,
(i) to file
and prove a claim for the whole amount of principal (and premium, if any) and interest, if any, owing and unpaid in respect of the Securities
and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any
claim for amounts due to the Trustee under Section 607 and of the Holders allowed in such judicial proceeding, and
(ii) to collect
and receive any moneys or other property payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver,
assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder
to make such payments to the Trustee and, if the Trustee consents to the making of such payments directly to the Holders, to pay to the
Trustee any amount due it under Section 607.
Nothing herein contained shall
be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Securities or the rights of any Holder thereof or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding.
Section 505. Trustee
May Enforce Claims Without Possession of Securities or Coupons. All rights of action and claims under this Indenture or the
Securities or coupons may be prosecuted and enforced by the Trustee without the possession of any of the Securities or coupons or
the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its
own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the amounts due to
the Trustee under Section 607, be for the ratable benefit of the Holders of the Securities and coupons in respect of which
such judgment has been recovered.
Section 506. Application
of Money Collected. Any money collected by the Trustee pursuant to this Article shall be applied in the following order, at the date
or dates fixed by the Trustee, and, in case of the distribution of such money on account of principal (or premium, if any) or interest,
if any, upon presentation of the Securities in respect of which or for the benefit of which such money shall have been collected and
the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all
amounts due the Trustee under Section 607;
SECOND: To the payment of the
amounts then due and unpaid for principal of (and premium, if any) and interest, if any, on the Securities in respect of which or for
the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due
and payable on such Securities for principal (and premium, if any) and interest, if any, respectively; and
THIRD: The balance, if any,
to the Company.
The Trustee may fix a record
date (with respect to Registered Securities) and payment date for any such payment to Holders of Securities.
Section 507. Limitation
on Suits. No Holder of any Security of any series shall have any right to institute any proceeding,
judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder,
unless
(1) such
Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to the Securities of that series;
(2) the
Holders of not less than a majority in aggregate principal amount of the Outstanding Securities of all series of Senior Securities in
respect of which an Event of Default has occurred and is continuing, considered as one class, shall have made written request to the Trustee
to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder if such holder is a Holder of Senior
Securities or the Holders of not less than a majority in aggregate principal amount of the Outstanding Securities of all series of Subordinated
Securities in respect of which an Event of Default has occurred and is continuing, considered as one class, shall have made written request
to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder if such Holder is a Holder
of Subordinated Securities;
(3) such
Holder or Holders have offered to the Trustee indemnity against the reasonable costs, expenses and liabilities to be incurred in compliance
with such request;
(4) the
Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and
(5) no
direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority
in aggregate principal amount of the Outstanding Securities of all series;
it being understood and intended
that (subject to Section 508) no one or more of such Holders shall have any right in any manner whatever by virtue of, or by availing
of, any provision of this Indenture to affect, disturb or prejudice the rights of any other of such Holders, or to obtain or to seek to
obtain priority or preference over any other of such Holders or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all of such Holders.
Section 508. Unconditional
Right of Holders to Receive Principal, Premium and Interest. Notwithstanding any other provision in
this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the principal
of (and premium, if any) and (subject to Section 307) interest, if any, on such Security on the Stated Maturity or Maturities
expressed in such Security (or, in the case of redemption, on the Redemption Date, or, in the case of repayment at the option of the
Holder, on the Repayment Date) and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without
the consent of such Holder.
Section 509. Restoration
of Rights and Remedies. If the Trustee or any Holder has instituted any proceeding to enforce any right
or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely
to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Trustee
and such Holder shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies
of the Trustee and such Holder shall continue as though no such proceeding had been instituted.
Section 510. Rights and
Remedies Cumulative. Except as otherwise provided with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities in the last paragraph of Section 306, no right or remedy herein conferred upon or reserved
to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or
in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 511. Delay or
Omission Not Waiver. No delay or omission of the Trustee or of any Holder of any Securities to exercise any right or remedy accruing
upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence
therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time,
and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.
Section 512. Control by
Holders. If an Event of Default shall have occurred and be continuing in respect of a series of Securities,
the Holders of a majority in aggregate principal amount of the Outstanding Securities of such series shall have the right to direct the
time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred
on the Trustee, with respect to the Securities of such series or Tranche; provided, however, that if an Event of Default has occurred
and is continuing with respect to more than one series of Senior Securities, the Holders of a majority in aggregate principal amount
of the Outstanding Securities of all such series, considered as one class, shall have the right to make such direction, an not the Holders
of the Senior Securities of any one of such series, and if an Event of Default has occurred and is continuing with respect to more than
one series of Subordinated Securities, the Holders of a majority in aggregate principal amount of all such series, considered as one
class, shall have the right to make such direction, and not the Holders of the Subordinated Securities of any one of such series; provided,
further that
(1) such
direction shall not be in conflict with any rule of law or with this Indenture, and
(2) the
Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction.
Section 513. Waiver of
Past Defaults. The Holders of not less than a majority in aggregate principal amount of the Outstanding Securities of any series
may on behalf of the Holders of all the Securities of such series waive any past default hereunder with respect to such series and its
consequences; provided that if any such past default has occurred with respect to more than one series of Senior Securities, the
Holders of a majority in aggregate principal amount of the Outstanding Securities of all such series, considered as one class, may make
such waiver, and not the Holders of any one of such series; provided further that if any such past default has occurred with respect
to more than one series of Subordinated Securities, the Holders of a majority in aggregate principal amount of the Outstanding Securities
of all such series, considered as one class, may make such waiver, and not the Holders of any one of such series, in each case except
a default
(1) in
the payment of the principal of (or premium, if any) or interest, if any, on any Security of such series, or
(2) in
respect of a covenant or provision hereof that under Section 902 cannot be modified or amended without the consent of the Holder
of each Outstanding Security of such series affected.
Upon any such waiver, such
default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon.
Section 514. Undertaking
for Costs. All parties to this Indenture agree, and each Holder of any Security by his acceptance thereof shall be deemed to have
agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or
in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable
attorneys’ fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses
made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by the Company, to any suit instituted
by the Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in aggregate principal
amount of the Outstanding Securities of all series in respect of which such suit may be brought, considered as one class, or to any suit
instituted by any Holder for the enforcement of the payment of the principal of (or premium, if any) or interest, if any, on any Security
on or after the Stated Maturity or Maturities expressed in such Security (or, in the case of redemption, on or after the Redemption Date,
or, in the case of repayment at the option of the Holder, on or after the Repayment Date).
Section 515. Waiver
of Stay or Extension Laws. The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company (to the
extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not
hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
ARTICLE VI
THE TRUSTEE
Section 601. Certain Duties
and Responsibilities. (a) Except during the continuance of an Event of Default with respect to Securities of any series,
(1) the
Trustee undertakes to perform, with respect to Securities of such series, such duties and only such duties as are specifically set forth
in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and
(2) in
the absence of bad faith on its part, the Trustee may, with respect to Securities of such series, conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming
to the requirements of this Indenture; but in the case of any such certificates or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform
to the requirements of this Indenture.
(b) If
an Event of Default with respect to Securities of any series has occurred and is continuing, the Trustee shall exercise, with respect
to Securities of such series, such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill
in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs.
(c) No
provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure
to act, or its own wilful misconduct, except that
(1) this
subsection shall not be construed to limit the effect of sub-section (a) of this Section;
(2) the
Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(3) the
Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction
of the Holders of a majority in aggregate principal amount of the Outstanding Securities of any one or more series, as provided herein,
relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee, under this Indenture with respect to the Securities of such series; and
(4) no
provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it has reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.
(d) Whether
or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
Section 602. Notice
of Defaults. Within 90 days after the occurrence of any default hereunder with
respect to the Securities of any series, the Trustee shall transmit by mail to all Holders of Securities of such series entitled to
receive reports pursuant to Section 704(3) (and, if Unregistered Securities of that series are outstanding, shall cause to be
published at least once in an Authorized Newspaper in The City of New York and, if Securities of that series are listed on any stock
exchange outside of the United States, in the city in which such stock exchange is located) notice of such default hereunder known
to the Trustee, unless such default shall have been cured or waived; provided, however, that, except in the case of a
default in the payment of the principal of (or premium, if any) or interest, if any, on any Security of such series or in the
payment of any sinking fund installment with respect to Securities of such series, the Trustee shall be protected in withholding
such notice if and so long as the board of directors, the executive committee or a trust committee of directors or Responsible
Officers of the Trustee in good faith determine that the withholding of such notice is in the interest of the Holders of Securities
of such series; and provided, further, that in the case of any default of the character specified in Section 501(4)
with respect to Securities of such series, no such notice to Holders shall be given until at least 75 days after the occurrence
thereof. For the purpose of this Section, the term “default” means any event that is, or after notice or
lapse of time or both would become, an Event of Default with respect to Securities of such series.
Section 603. Certain Rights
of Trustee. Subject to the provisions of Section 601 and to the applicable provisions of the
Trust Indenture Act:
(a) the
Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document reasonably
believed by it to be genuine and to have been signed or presented by the proper party or parties;
(b) any
request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order, or as otherwise
expressly provided herein, and any resolution of the Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever
in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering
or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith
on its part, rely upon an Officer’s Certificate or a certificate of an officer or officers delivered pursuant to Section 301
and such Officer’s Certificate or certificate of an officer or officers, in the absence of negligence or bad faith on the part of
the Trustee, shall be full warrant to the Trustee for any action taken, suffered or omitted by it under the provisions of this Indenture
upon the faith thereof;
(d) the
Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon;
(e) the
Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities that might be incurred by it in compliance with such request or direction;
(f) the
Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document,
but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and,
if the Trustee shall determine to make such further inquiry or investigation, it shall (subject to applicable legal requirements) be entitled
to examine, during normal business hours, the books, records and premises of the Company, personally or by agent or attorney; and
(g) the
Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys
and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care
by it hereunder; no Depository or Paying Agent shall be deemed an agent of the Trustee and the Trustee shall not be responsible for any
act or omission by any of them.
Section 604. Not Responsible
for Recitals or Issuance of Securities. The recitals contained herein and in the Securities, except
the Trustee’s certificate of authentication, shall be taken as the statements of the Company, and the Trustee or any Authenticating
Agent assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities of any series or any coupons. The Trustee or any Authenticating Agent shall not be accountable for the
use or application by the Company of Securities or the proceeds thereof. The Trustee shall not be responsible for and makes no representations
as to the Company’s ability or authority to issue the Unregistered Securities or the lawfulness thereof.
Section 605. May Hold
Securities. The Trustee, any Authenticating Agent, any Paying Agent, any Security Registrar or any
other agent of the Company or the Trustee, in its individual or any other capacity, may become the owner or pledgee of Securities and,
subject to Sections 608 and 613, may otherwise deal with the Company with the same rights it would have if it were not
Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other agent.
Section 606. Money Held
in Trust. Money held by the Trustee or by any Paying Agent (other than the Company if the Company shall
act as Paying Agent) in trust hereunder need not be segregated from other funds except to the extent required by law. Neither the Trustee
nor any Paying Agent shall be liable for interest on any money received by it hereunder except as expressly provided herein or otherwise
agreed with the Company.
Section 607. Compensation
and Reimbursement. The Company agrees
(1) to
pay to the Trustee from time to time reasonable compensation for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of an express trust);
(2) except
as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence,
wilful misconduct or bad faith; and
(3) to
indemnify the Trustee for, and to hold it harmless against, any loss, liability or expense reasonably incurred without negligence, wilful
misconduct or bad faith on its part, arising out of or in connection with the acceptance or administration of the trust or trusts hereunder
or performance of its duties hereunder, including the costs and expenses of defending itself against any claim or liability in connection
with the exercise or performance of any of its powers or duties hereunder.
As security for the performance
of the obligations of the Company under this Section, the Trustee shall have a claim prior to the Securities and any coupons upon all
property and funds held or collected by the Trustee as such, except property and funds held in trust for the payment of principal of (and
premium, if any) or interest, if any, on particular Securities or any coupons.
Section 608. Disqualification;
Conflicting Interests. If the Trustee has or acquires any conflicting interest within the meaning of
the Trust Indenture Act with respect to the Securities of any series, it shall either eliminate such conflicting interest or resign to
the extent, in the manner and with the effect, and subject to the conditions, provided in the Trust Indenture Act and this Indenture.
For purposes of Section 310(b)(1) of the Trust Indenture Act and to the extent permitted thereby, the Trustee, in its capacity as trustee
in respect of the equally ranked and unsecured Securities of any series, shall not be deemed to have a conflicting interest arising from
its capacity as trustee in respect of the equally ranked and unsecured Securities of any other series under this Indenture or any securities
issued under the Indenture dated as of [ ] between the Company and the Trustee [specifically describe other outstanding indentures
with the Trustee].
Section 609. Corporate
Trustee Required; Eligibility. There shall at all times be a Trustee hereunder that shall be a corporation organized and doing
business under the laws of the United States of America, any State thereof or the District of Columbia (or such other Person as may
be permitted to act as Trustee by the Commission), authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least $50,000,000, subject to supervision or examination by federal or state authority and qualified and
eligible under this Article, provided that, neither the Company nor any Affiliate of the Company may serve as Trustee of any
Securities. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any
time the Trustee ceases to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.
Section 610. Resignation
and Removal; Appointment of Successor. (a) No resignation or removal of the Trustee and no appointment of a successor Trustee
pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
(b) The
Trustee may resign at any time with respect to the Securities of one or more series by giving written notice thereof to the Company. If
the instrument of acceptance by a successor Trustee required by Section 611 has not been delivered to the Trustee within 30 days
after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment
of a successor Trustee with respect to the Securities of such series.
(c) The
Company may at any time by a Board Resolution remove the Trustee with respect to the Securities of any or all series.
(d) The
Trustee may be removed at any time with respect to the Securities of any series by Act of the Holders of a majority in aggregate principal
amount of the Outstanding Securities of such series, delivered to the Trustee and to the Company.
(e) If
at any time:
(1) the
Trustee fails to comply with Section 608 with respect to the Securities of any series, after written request therefor by the Company
or by any Holder who has been a bona fide Holder of a Security of such series for at least six months, or
(2) the
Trustee ceases to be eligible under Section 609 and fails to resign after written request therefor by the Company or by any such
Holder, or
(3) the
Trustee becomes incapable of acting or becomes adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property is appointed
or any public officer takes charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation
or liquidation,
then, in any such case, subject
to Section 514, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee with respect to all Securities
and the appointment of a successor Trustee or Trustees.
(f) If
the Trustee resigns, is removed or becomes incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, with
respect to the Securities of one or more series, the Company, by a Board Resolution, shall promptly appoint a successor Trustee or Trustees
with respect to the Securities of that or those series (it being understood that any such successor Trustee may be appointed with respect
to the Securities of one or more or all of such series and that at any time there shall be only one Trustee with respect to the Securities
of any particular series) and shall comply with the applicable requirements of Section 611. If, within one year after such resignation,
removal or incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Securities of any series is appointed
by Act of the Holders of a majority in aggregate principal amount of the Outstanding Securities of such series delivered to the Company
and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with
the applicable requirements of Section 611, become the successor Trustee with respect to the Securities of such series and to that
extent supersede the successor Trustee appointed by the Company. If no successor Trustee with respect to the Securities of any series
has been so appointed by the Company or the Holders and accepted appointment in the manner required by Section 611, any Holder
who has been a bona fide Holder of a Security of such series for at least six months may, subject to Section 514, on behalf of
himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee with
respect to the Securities of such series.
(g) The
Company shall give notice of each resignation and each removal of the Trustee with respect to the Securities of any series and each appointment
of a successor Trustee with respect to the Securities of any series by mailing written notice of such event by first-class mail, postage
prepaid, to all Holders of Securities of such series entitled to receive reports pursuant to Section 704(3) and, if any Unregistered
Securities are outstanding, by publishing notice of such event once in an Authorized Newspaper in The City of New York and, if any Unregistered
Securities are listed on any stock exchange outside of the United States, in the city in which such stock exchange is located. Each notice
shall include the name of the successor Trustee with respect to the Securities of such series and the address of its Corporate Trust Office.
(h) All
provisions of this Section except subparagraph (d) and Section 611(b) (except for the last clause, after omitting the words “after
deducting all amounts owed to the retiring Trustee pursuant to Section 607,” which shall apply) shall apply also to any Paying
Agent located outside the United States and its possessions.
Section 611. Acceptance
of Appointment by Successor. (a) In case of the appointment hereunder of a successor Trustee with respect to the Securities of
all series, every such successor Trustee so appointed shall execute, acknowledge and deliver to the Company and to the retiring
Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers,
trusts and duties of the retiring Trustee; but, on the request of the Company or the successor Trustee, such retiring Trustee shall,
upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and
trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder, subject nevertheless to its lien provided for in Section 607.
(b) In
case of the appointment hereunder of a successor Trustee with respect to the Securities of one or more (but not all) series, the Company,
the retiring Trustee and each successor Trustee with respect to the Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such appointment and which (1) shall contain such provisions as shall
be necessary or desirable to transfer and confirm to, and to vest in, each successor Trustee all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates,
(2) if the retiring Trustee is not retiring with respect to all Securities, shall contain such provisions as shall be deemed necessary
or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that
or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (3) shall add
to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees
co-trustees of the same trust and that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust
or trusts hereunder administered by any other such Trustee; and upon the execution and delivery of such supplemental indenture the resignation
or removal of the retiring Trustee shall become effective to the extent provided therein and each such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect
to the Securities of that or those series to which the appointment of such successor Trustee relates; but, on request of the Company or
any successor Trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor Trustee, after deducting all amounts
owed to the retiring Trustee pursuant to Section 607, all property and money held by such retiring Trustee hereunder with respect
to the Securities of that or those series to which the appointment of such successor Trustee relates.
(c) Upon
request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all such rights, powers and trusts referred to in paragraph (a) or (b) of this Section, as the case may be.
(d) No
successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
Section 612. Merger, Conversion,
Consolidation or Succession to Business. Any corporation into which the Trustee may be merged
or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which
the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Trustee,
shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities
shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation
to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such
successor Trustee had itself authenticated such Securities. In case any Securities shall not have been authenticated by such predecessor
Trustee, any such successor Trustee may authenticate and deliver such Securities, in either its own name or that of its predecessor Trustee,
with the full force and effect which this Indenture provides for the certificate of authentication of the Trustee.
Section 613. Preferential
Collection of Claims Against Company. The Trustee shall comply with TIA § 311(a), excluding any creditor relationship listed
in TIA § 311(b). A Trustee who has resigned or been removed shall be subject to TIA § 311(a) to the extent indicated
therein.
Section 614. Appointment
of Authenticating Agent. At any time when any of the Securities remain Outstanding the Trustee may
appoint an Authenticating Agent or Agents (which may include any Person that owns, directly or indirectly, all of the capital stock of
the Trustee or a corporation that is a wholly-owned subsidiary of the Trustee or of such other Person) with respect to one or more series
of Securities, or any Tranche thereof, that shall be authorized to act on behalf of the Trustee to authenticate Securities of such series
or Tranche issued upon original issuance, exchange, registration of transfer or partial redemption thereof or pursuant to Section
306, and Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. The Trustee shall mail written notice of such appointment by first-class mail,
postage prepaid, to all Holders of Securities of the series or Tranche with respect to which such Authenticating Agent will serve, and
which are entitled to receive reports pursuant to Section 704(3) and, if any Unregistered Securities are outstanding, by publishing
notice of such event once in an Authorized Newspaper in The City of New York and, if any Unregistered Securities are listed on any stock
exchange outside of the United States, in the city in which such stock exchange is located. Wherever reference is made in this Indenture
to the authentication and delivery of Securities by the Trustee or the Trustee’s certificate of authentication, such reference
shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication
executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the Company and shall
at all times be a corporation organized and doing business under the laws of the United States of America, any state thereof or the District
of Columbia, authorized under such laws to act as Authenticating Agent, having a combined capital and surplus of not less than $1,000,000
and subject to supervision or examination by federal or state authority. If such Authenticating Agent publishes reports of condition
at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section,
the combined capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and surplus as set forth in
its most recent report of condition so published. If at any time an Authenticating Agent ceases to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section.
Any corporation into which
an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation succeeding to the corporate agency
or corporate trust business of an Authenticating Agent, shall continue to be an Authenticating Agent, provided such corporation
shall be otherwise eligible under this Section, without the execution or filing of any paper or any further act on the part of the Trustee
or the Authenticating Agent.
An Authenticating Agent may
resign with respect to one or more series of Securities at any time by giving written notice thereof to the Trustee and to the Company.
The Trustee may at any time terminate the agency of an Authenticating Agent with respect to one or more series of Securities by giving
written notice thereof to such Authenticating Agent and to the Company. Upon receiving such a notice of resignation or upon such a termination,
or in case at any time such Authenticating Agent ceases to be eligible in accordance with the provisions of this Section, the Trustee
may appoint a successor Authenticating Agent that is acceptable to the Company and shall provide notice of such appointment to all Holders
of Securities of the series or Tranche with respect to which such Authenticating Agent will serve, as provided in paragraph (a) of this
Section. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers
and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating
Agent shall be appointed unless eligible under the provisions of this Section. An Authenticating Agent appointed pursuant to this Section
shall be entitled to rely on Sections 111, 308, 604 and 605 hereunder.
The Trustee agrees to pay
to each Authenticating Agent from time to time reasonable compensation for its services under this Section, and the Trustee shall be entitled
to be reimbursed for such payments, subject to the provisions of Section 607.
If an appointment with respect
to the Securities of one or more series, or any Tranche thereof, is made pursuant to this Section, the Securities of such series or Tranche
may have endorsed thereon, in addition to the Trustee’s certificate of authentication, an alternate certificate of authentication
in the following form:
This is one of the Securities
of the series designated pursuant to and issued under the within-mentioned Indenture.
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As Trustee |
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By |
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As Authenticating Agent on behalf of the Trustee |
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By |
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Authorized Officer of Authenticating Agent |
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Dated:______________________ |
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If all of the Securities of
a series may not be originally issued at one time, and if the Trustee does not have an office capable of authenticating Securities upon
original issuance located in a Place of Payment where the Company wishes to have Securities of such series authenticated upon original
issuance, the Trustee, if so requested by the Company in writing (which writing need not comply with Section 102 and need not be
accompanied by an Opinion of Counsel), shall appoint, in accordance with this Section and in accordance with such procedures as shall
be acceptable to the Trustee, an Authenticating Agent (which, if so requested by the Company, may be an Affiliate of the Company) having
an office in a Place of Payment designated by the Company with respect to such series of Securities.
ARTICLE VII
HOLDERS’
LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 701. Company to
Furnish Trustee Names and Addresses of Holders. The Company will furnish or cause to be furnished to
the Trustee
(a) semi-annually,
not later than the 15th day after each Regular Record Date for each series of Registered Securities at the time Outstanding or on June
30 and December 31 of each year with respect to each series of Securities for which there are no Regular Record Dates, a list, in such
form as the Trustee may reasonably require, containing all the information in the possession or control of the Company, or any of its
Paying Agents other than the Trustee, of the names and addresses of the Holders of Registered Securities of such series, including Holders
of interests in Global Securities, as of such preceding Regular Record Date or on June 15 or December 15, as the case may be, or, in the
case of a series of non-interest bearing Securities, on a date to be determined as contemplated pursuant to Section 301, and
(b) at
such other times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the time such list is furnished;
excluding from any such
list names and addresses received by the Trustee in its capacity as Security Registrar for Registered Securities other than Global Securities.
Section 702. Preservation
of Information; Communications to Holders. (a) The Trustee shall preserve, in as current a form as is reasonably practicable,
the names and addresses of Holders of Registered Securities contained in the most recent list furnished to the Trustee as provided
in Section 701 and the names and addresses of Holders of Registered Securities received by the Trustee in its capacity as
Security Registrar or Paying Agent. The Trustee may destroy any list furnished to it as provided in Section 701 upon receipt
of a new list so furnished.
(b) If
three or more Holders (herein referred to as “applicants”) apply in writing to the Trustee, and furnish to the Trustee reasonable
proof that each such applicant has owned a Security for a period of at least six months preceding the date of such application, and such
application states that the applicants desire to communicate with other Holders with respect to their rights under this Indenture or under
the Securities and is accompanied by a copy of the form of proxy or other communication that such applicants propose to transmit, then
the Trustee shall, within five business days after the receipt of such application, at its election, either
(i) afford
such applicants access to the information preserved at the time by the Trustee in accordance with Section 702(a), or
(ii) inform
such applicants as to the approximate number of Holders whose names and addresses appear in the information preserved at the time by the
Trustee in accordance with Section 702(a), and as to the approximate cost of mailing to such Holders the form of proxy or other
communication, if any, specified in such application.
If the Trustee elects not
to afford such applicants access to such information, the Trustee shall, upon the written request of such applicants, mail to each Holder
whose name and address appear in the information preserved at the time by the Trustee in accordance with Section 702(a) a copy
of the form of proxy or other communication that is specified in such request, with reasonable promptness after a tender to the Trustee
by the applicants of the material to be mailed and of payment, or provision for the payment, of the reasonable expenses of mailing, unless
within five days after such tender the Trustee shall mail to such applicants and file with the Commission, together with a copy of the
material to be mailed, a written statement to the effect that, in the opinion of the Trustee, such mailing would be contrary to the best
interest of the Holders or would be in violation of applicable law. Such written statement shall specify the basis of such opinion. If
the Commission, after opportunity for a hearing upon the objections specified in the written statement so filed, enters an order refusing
to sustain any of such objections or if, after the entry of an order sustaining one or more of such objections, the Commission finds,
after notice and opportunity for hearing, that all the objections so sustained have been met and enters an order so declaring, the Trustee
shall mail copies of such material to all such Holders with reasonable promptness after the entry of such order and the renewal of such
tender by such applicants; otherwise the Trustee shall be relieved of any obligation or duty to such applicants respecting their application.
(c) Every
Holder of Securities or coupons, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor
the Trustee nor any agent of either of them shall be held accountable by reason of the disclosure of any such information as to the names
and addresses of the Holders in accordance with Section 702(b), regardless of the source from which such information was derived,
and that the Trustee shall not be held accountable by reason of mailing any material pursuant to a request made under Section 702(b).
Section 703. Reports
by Trustee. (a) Within 60 days after May 15 of each year commencing with the year 20__, the Trustee shall transmit by mail to
all Holders of Registered Securities of any series, as their names and addresses appear in the Security Register and to all other
Holders who are entitled to receive reports pursuant to Section 704(3), a brief report dated as of such May 15 with respect
to any of the following events which may have occurred within the previous 12 months (but if no such event has occurred within such
period no report need be transmitted):
(1) any
change to its eligibility under Section 609 and its qualifications under Section 608;
(2) the
creation of or any material change to a relationship specified in paragraphs (1) through (10) of Section 310(b) of the Trust Indenture
Act;
(3) the
character and amount of any advances (and if the Trustee elects so to state, the circumstances surrounding the making thereof) made by
the Trustee (as such) which remain unpaid on the date of such report, and for the reimbursement of which it claims or may claim a lien
or charge, prior to that of the Securities of such series or any related coupons, on any property or funds held or collected by it as
Trustee, except that the Trustee shall not be required (but may elect) to report such advances if such advances so remaining unpaid aggregate
not more than one-half of 1% of the principal amount of the Securities of such series Outstanding on the date of such report;
(4) the
amount, interest rate and maturity date of all other indebtedness owing by the Company (or by any other obligor on the Securities of such
series) to the Trustee in its individual capacity, on the date of such report, with a brief description of any property held as collateral
security therefor, except an indebtedness based upon a creditor relationship arising in any manner described in paragraphs (2),
(3), (4) or (6) of Section 311(b) of the Trust Indenture Act;
(5) any
change to the property and funds, if any, physically in the possession of the Trustee as such on the date of such report;
(6) any
additional issue of Securities which the Trustee has not previously reported; and
(7) any
action taken by the Trustee in the performance of its duties hereunder which it has not previously reported and which in its opinion materially
affects the Securities of such series, except action in respect of a default, notice of which has been or is to be withheld by the Trustee
in accordance with Section 602.
(b) The
Trustee shall transmit by mail to all Holders of Registered Securities of any series, as their names and addresses appear in the Security
Register and to all Holders who are entitled to receive reports pursuant to Section 704(3), a brief report with respect to the
character and amount of any advances (and if the Trustee elects so to state, the circumstances surrounding the making thereof) made by
the Trustee (as such) since the date of the last report transmitted pursuant to subsection (a) of this Section (or if no such report has
yet been so transmitted, since the date of execution of this instrument) for the reimbursement of which it claims or may claim a lien
or charge, prior to that of the Securities of such series, on property or funds held or collected by it as Trustee and which it has not
previously reported pursuant to this subsection, except that the Trustee shall not be required (but may elect) to report such advances
if such advances remaining unpaid at any time aggregate 10% or less of the principal amount of the Securities of such series Outstanding
at such time, such report to be transmitted within 90 days after such time.
(c) A
copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each stock exchange upon which
any Securities are listed, with the Commission and with the Company. The Company will notify the Trustee in writing when any Securities
are listed on any stock exchange.
Section 704. Reports by
Company. The Company shall:
(1) file
with the Trustee, within 45 days after the Company is required to file the same with the Commission, copies of the annual reports and
of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may from time to
time by rules and regulations prescribe) that the Company may be required to file with the Commission pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934; or, if the Company is not required to file information, documents or reports pursuant to
either of said Sections, then it shall file with the Trustee and the Commission, in accordance with rules and regulations prescribed from
time to time by the Commission, such of the supplementary and periodic information, documents and reports that may be required pursuant
to Section 13 of the Securities Exchange Act of 1934 in respect of a security listed and registered on a national securities exchange
as may be prescribed from time to time in such rules and regulations;
(2) file
with the Trustee and the Commission, in accordance with rules and regulations prescribed by the Commission, such additional information,
documents and reports with respect to compliance by the Company with the conditions and covenants of this Indenture as may be required
from time to time by such rules and regulations; and
(3) transmit
by mail to all Holders of Registered Securities, as their names and addresses appear in the Security Register, to such Holders of Unregistered
Securities as have, within the two years preceding such transmission, filed their names and addresses with the Trustee for that purpose
and to each Holder whose name and address is then preserved on the Trustee’s list pursuant to the first sentence of Section 702(a),
within 30 days after the filing thereof with the Trustee, such summaries of any information, documents and reports required to be filed
by the Company pursuant to paragraphs (1) and (2) of this Section as may be required by rules and regulations prescribed from time to
time by the Commission.
ARTICLE VIII
CONSOLIDATION,
MERGER, CONVEYANCE OR TRANSFER
Section 801. Company May
Consolidate, Etc. Only on Certain Terms. The Company shall not consolidate with or merge into any other
corporation or convey, transfer or lease all or substantially all of its properties and assets to any Person, unless:
(1) the
corporation formed by such consolidation or into which the Company is merged or the Person that acquires by conveyance, transfer or lease
the properties and assets of the Company substantially as an entirety shall be a Person organized and existing under the laws of the United
States of America, any State thereof or the District of Columbia and shall expressly assume, by an indenture supplemental hereto, executed
and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of (and premium, if any)
and interest, if any, on all the Outstanding Securities and the performance of every covenant of this Indenture on the part of the Company
to be performed or observed;
(2) immediately
after giving effect to such transaction, no Event of Default and no event that, after notice or lapse of time or both, would become an
Event of Default, shall have occurred and be continuing;
(3) the
Company has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and such supplemental indenture comply with this Article and that all conditions precedent herein provided
for relating to such transaction have been met.
Section 802. Successor
Corporation Substituted. Upon any consolidation or merger or any conveyance, transfer or lease of all
or substantially all the properties and assets of the Company in accordance with Section 801, the successor corporation formed
by such consolidation or into which the Company is merged or to which such conveyance, transfer or lease is made shall succeed to, and
be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor
corporation had been named as the Company herein and thereafter, in the case of a conveyance, transfer or lease of properties and assets
of the Company substantially as an entirety, such conveyance, transfer or lease shall have the effect of releasing the Person named as
the “Company” in the first paragraph of this instrument or any successor corporation which shall theretofore have become
such in the manner prescribed in this Article from its liability as obligor and maker on any of the Securities.
ARTICLE IX
SUPPLEMENTAL
INDENTURES
Section 901. Supplemental
Indentures Without Consent of Holders. Without the consent of any Holders, the Company and the Trustee,
at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for
any of the following purposes:
(1) to
evidence the succession of another Person to the Company and the assumption by any such successor of the covenants of the Company herein
and in the Securities; or
(2) to
add to the covenants of the Company for the benefit of the Holders of all or any series of Securities, or any Tranche thereof (and if
such covenants are to be for the benefit of less than all series of Securities, stating that such covenants are expressly being included
solely for the benefit of such series), or to surrender any right or power herein conferred upon the Company; or
(3) to
add any additional Events of Default with respect to all or any series of Securities Outstanding hereunder; or
(4) to
add to or change any of the provisions of this Indenture to such extent as shall be necessary to permit or facilitate the issuance of
Securities in bearer form, registrable or not registrable as to principal, and with or without interest coupons; or
(5) to
change or eliminate any of the provisions of this Indenture, or to add any new provision to this Indenture, in respect of one or more
series or Tranches of Securities; provided, however, that any such change, elimination or addition (A) shall neither (i)
apply to any Security Outstanding on the date of such indenture supplemental hereto nor (ii) modify the rights of the Holder of any such
Security with respect to such provision in effect prior to the date of such indenture supplemental hereto or (B) shall become effective
only when no Security of such series or Tranche remains Outstanding; or
(6) to
secure the Securities pursuant to the requirements of any covenant on liens in respect of such series of Securities or otherwise; or
(7) to
establish for the issuance of and establish the form or terms and conditions of Securities of any series or Tranche as permitted by Section
301, and to establish the form of any certificates required to be furnished pursuant to the terms of this Indenture or any series
of Securities; or
(8) to
provide for uncertificated Securities in addition to or in place of all, or any series or Tranche of, certificated Securities; or
(9) to
evidence and provide for the acceptance of appointment hereunder by a separate or successor Trustee or co-trustee with respect to the
Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for
or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 611(b);
or
(10) to
change any place or places where (a) the principal of or premium, if any, or interest, if any, on all or any series of Securities, or
any Tranche thereof, shall be payable, (b) all or any series of Securities, or any Tranche thereof, may be surrendered for registration
or transfer, (c) all or any series of Securities, or any Tranche thereof, may be surrendered for exchange and (d) notices and demands
to or upon the Company in respect of all or any series of Securities, or any Tranche thereof, and this Indenture may be served;
(11) to
cure any ambiguity, to correct or supplement any provision herein that may be defective or inconsistent with any other provision herein,
provided such action shall not adversely affect the interests of the Holders of Securities of any series or Tranche in any material
respect; or
(12) to
make any other provisions with respect to matters or questions arising under this Indenture, provided such action shall not adversely
affect the interests of the Holders of any Securities of any series or Tranche Outstanding on the date of such indenture supplemental
hereto.
Without limiting the generality
of the foregoing, if the Trust Indenture Act as in effect at the date of the execution and delivery of this Indenture or at any time thereafter
becomes amended and
(x) if
any such amendment requires one or more changes to any provisions hereof or the inclusion herein of any additional provisions, or by operation
of law is deemed to effect such changes or incorporate such provisions by reference or otherwise, this Indenture shall be deemed to have
been amended so as to conform to such amendment to the Trust Indenture Act, and the Company and the Trustee may, without the consent of
any Holders, enter into an indenture supplemental hereto to effect or evidence such changes or additional provisions; or
(y) if
any such amendment permits one or more changes to, or the elimination of, any provisions hereof that, at the date hereof or at any time
thereafter, are required by the Trust Indenture Act to be contained herein (or if it is no longer required by the TIA for the Indenture
to contain one or more provisions), this Indenture shall be deemed to have been amended to effect such changes or elimination, and the
Company and the Trustee may, without the consent of any Holders, enter into an indenture supplemental hereto to evidence such amendment
hereof; or
(z) if,
by reason of any such amendment, it shall be no longer necessary for this Indenture to contain one or more provisions that, at the date
of the execution and delivery hereof, are required by the Trust Indenture Act to be contained herein, the Company and the Trustee may,
without the consent of any Holders, enter into an indenture supplemental hereto to effect the elimination of such provisions.
Section 902. Supplemental
Indentures With Consent of Holders. (a) Except as set forth in paragraph (c) below, with the consent of the Holders of not less
than a majority in aggregate principal amount of the Senior Securities of all series then Outstanding (considered as one class), the
Company, when authorized by a resolution of its Board of Directors (which resolution may provide general terms or parameters for
such action and may provide that the specific terms of such action may be determined in accordance with or pursuant to a Company
Order), and the Trustee may, from time to time and at any time, enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of any
supplemental indenture or of modifying in any manner the rights of the Holders of the Securities of each such series or Tranche or
of the Coupons appertaining to such Securities or of modifying in any manner the rights of the Holders of Securities of such series
or Tranche under this Indenture; provided, however, that if there are Senior Securities of more than one series Outstanding
hereunder and if a proposed supplemental indenture shall directly affect the rights of the Holders of Senior Securities of one or
more, but less than all, of such series, then the consent only of the Holders of a majority in aggregate principal amount of the
Outstanding Securities of all series so directly affected, considered as one class, shall be required; and provided, further,
that if the Securities of any series have been issued in more than one Tranche and if the proposed supplemental indenture shall
directly affect the rights of the Holders of Senior Securities of one or more, but less than all, of such Tranches, then the consent
only of the Holders of a majority in aggregate principal amount of the Outstanding Securities of all Tranches so directly affected,
considered as one class, shall be required.
(b) Except
as set forth in paragraph (c) below, with the consent of the Holders of not less than a majority in aggregate principal amount of the
Subordinated Securities of all series then Outstanding (considered as one class), the Company, when authorized by a resolution of its
Board of Directors (which resolution may provide general terms or parameters for such action and may provide that the specific terms of
such action may be determined in accordance with or pursuant to a Company Order), and the Trustee may, from time to time and at any time,
enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture or of any supplemental indenture or of modifying in any manner the rights of the Holders of the
Securities of each such series or of the Coupons appertaining to such Securities or of modifying in any manner the rights of the Holders
of Securities of such series or Tranche under this Indenture; provided, however, that if there are Subordinated Securities of more
than one series Outstanding hereunder and if a proposed supplemental indenture shall directly affect the rights of the Holders of Subordinated
Securities of one or more, but less than all, of such series, then the consent only of the Holders of a majority in aggregate principal
amount of the Outstanding Securities of all series so directly affected, considered as one class, shall be required; and provided,
further, that if the Securities of any series have been issued in more than one Tranche and if the proposed supplemental indenture
shall directly affect the rights of the Holders of Subordinated Securities of one or more, but less than all, of such Tranches, then the
consent only of the Holders of a majority in aggregate principal amount of the Outstanding Securities of all Tranches so directly affected,
considered as one class, shall be required.
(c)
No such supplemental indenture or waiver shall, without the consent of the Holder of each Outstanding Security affected thereby,
(1) change
the Stated Maturity of the principal of, or any installment of principal of or interest on, any Security, or reduce the principal amount
thereof or the rate of interest thereon (or the amount of any installment of interest thereon) or any premium payable upon the redemption
thereof, or change the method of calculating the rate of interest thereon, or reduce the amount of the principal of an Original Issue
Discount Security that would be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 502,
or change the coin or currency (or other property) in which, any Security or any premium or the interest thereon is payable, or impair
the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption,
on or after the Redemption Date, or, in the case of repayment at the option of the Holders, on or after the Repayment Date), or modify
any provisions of this Indenture with respect to the conversion or exchange of the Securities into Securities of another series or into
any other debt or equity securities in a manner adverse to the Holders, or
(2) reduce
the percentage in principal amount of the Outstanding Securities of any series, or any Tranche thereof, the consent of whose Holders is
required for any such supplemental indenture, or the consent of whose Holders is required for any waiver of compliance with certain provisions
of this Indenture or certain defaults hereunder and their consequences provided for in this indenture, or
(3) modify
any of the provisions of this Section, Section 513 or Section 1007, except to increase any such percentage or to provide
that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Security
affected thereby, provided, however, that this clause shall not be deemed to require the consent of any Holder with respect
to changes in the references to “the Trustee” and concomitant changes in this Section and Section 1007, or the deletion
of this proviso, in accordance with the requirements of Sections 611(b) and 901(9).
A supplemental indenture that
changes or eliminates any covenant or other provision of this Indenture that has expressly been included solely for the benefit of one
or more particular series of Securities, or one or more Tranches thereof, or that modifies the rights of the Holders of Securities of
such series or Tranches with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture
of the Holders of Securities of any other series or Tranche.
It shall not be necessary
for any Act of Holders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient
if such Act shall approve the substance thereof. A waiver by a Holder of such Holder’s rights to consent under this Section shall
be deemed to be a consent of such Holder.
Section 903. Execution
of Supplemental Indentures. In executing, or accepting the additional trusts created by, any supplemental
indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and (subject to Section 601) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution
of such supplemental indenture is authorized or permitted by this Indenture. The Trustee may, but shall not be obligated to, enter into
any such supplemental indenture that affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.
Section 904. Effect of
Supplemental Indentures. Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes;
and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby. Any supplemental
indenture permitted by this Article may restate this Indenture in its entirety, and, upon the execution and delivery thereof, any such
restatement shall supersede this Indenture as theretofore in effect for all purposes.
Section 905. Conformity
With Trust Indenture Act. Every supplemental indenture executed pursuant to this Article shall conform
to the requirements of the Trust Indenture Act as then in effect.
Section 906. Reference
in Securities to Supplemental Indentures. Securities of any series, or any Tranche thereof, authenticated
and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear
a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company so determines,
new Securities of any series, or any Tranche thereof, and any appertaining coupons so modified as to conform, in the opinion of the Trustee
and the Company, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series or Tranche and any appertaining coupons.
Section 907. Revocation
and Effect of Consents. Until an amendment or waiver becomes effective, a consent to it by a Holder
of a Security is a continuing consent by the Holder and every subsequent Holder of a Security or portion of a Security that evidences
the same debt as the consenting Holder’s Security, even if notation of the consent is not made on any Security. However, any such
Holder or subsequent Holder may revoke the consent as to his Security or portion of a Security if the Trustee receives the notice of
revocation before the date on which the Trustee receives an Officer’s Certificate certifying that the Holders of the requisite
principal amount of Securities have consented to the amendment or waiver. After an amendment or waiver becomes effective, it shall bind
every Holder of each series of Securities affected by such amendment or waiver.
The Company may, but shall
not be obligated to, fix a record date for the purpose of determining the Holders entitled to consent to any amendment or waiver. If a
record date is fixed, then notwithstanding the provisions of the immediately preceding paragraph, those persons who were Holders at such
record date (or their duly designated proxies), and only those persons, shall be entitled to consent to such amendment or waiver or to
revoke any consent previously given, whether or not such persons continue to be Holders after such record date.
After an amendment or waiver
becomes effective it shall bind every Holder, unless it is of the type described in any of clauses (1) through (3) of Section 902(c).
In such case, the amendment or waiver shall bind each Holder of a Security who has consented to it and every subsequent Holder of a Security
that evidences the same debt as the consenting Holder’s Security.
Section 908. Modification
Without Supplemental Indenture. If the terms of any particular series of Securities have been established
in a Board Resolution or an Officer’s Certificate as contemplated by Section 301, and not in an indenture supplemental hereto,
additions to, changes in or the elimination of any of such terms may be effected by means of a supplemental Board Resolution or Officer’s
Certificate, as the case may be, delivered to, and accepted by, the Trustee; provided, however, that such supplemental Board Resolution
or Officer’s Certificate shall not be accepted by the Trustee or otherwise be effective unless all conditions set forth in this
Indenture that would be required to be satisfied if such additions, changes or elimination were contained in a supplemental indenture
shall have been appropriately satisfied. Upon the acceptance thereof by the Trustee, any such supplemental Board Resolution or Officer’s
Certificate shall be deemed to be a “supplemental indenture” for purposes of Sections 904 and 906.
ARTICLE X
COVENANTS
Section 1001. Payment
of Principal, Premium and Interest. Subject to the following provisions, the Company will pay to the Trustee the amounts, in such
coin or currency as is at the time legal tender for the payment of public or private debt, in the manner, at the times and for the purposes
set forth herein and in the text of the Securities for each series, and the Company hereby authorizes and directs the Trustee from funds
so paid to it to make or cause to be made payment of the principal of and premium, if any, and interest, if any, on the Securities and
coupons of each series as set forth herein and in the text of such Securities and coupons. Unless otherwise provided in the Securities
of a series, the Trustee will arrange directly with any Paying Agents for the payment, or the Trustee will make payment, from funds furnished
by the Company, of the principal of and premium, if any, and interest, if any, on the Securities and coupons of each series by check
or draft.
Unless otherwise provided
in the Securities of a series, interest, if any, on Registered Securities of a series shall be paid by check or draft on each Interest
Payment Date for such series to the Holder thereof at the close of business on the relevant record dates specified in the Securities of
such series. The Company may pay such interest by check or draft mailed to such Holder’s address as it appears on the register for
Securities of such series. Unless otherwise provided in the Securities of a series, principal of Registered Securities shall be payable
by check or draft and only against presentation and surrender of such Registered Securities at the office of the Paying Agent, unless
the Company shall have otherwise instructed the Trustee in writing.
Unless otherwise provided
in the Securities of a series, (i) interest, if any, on Unregistered Securities shall be paid by check or draft and only against presentation
and surrender of the coupons for such interest installments as are evidenced thereby as they mature and (ii) original issue discount (as
defined in Section 1273 of the Code), if any, on Unregistered Securities shall be paid by check or draft and only against presentation
and surrender of such Securities, in either case at the office of a Paying Agent located outside of the United States and its possessions,
unless the Company has otherwise instructed the Trustee in an Officer’s Certificate. Unless otherwise provided in the Securities
of a series, principal of and premium, if any, of Unregistered Securities shall be paid by check or draft and only against presentation
and surrender of such Securities as provided in the Securities of a series. If at the time a payment of principal of and premium, if any,
or interest, if any, or original issue discount, if any, on an Unregistered Security or coupon becomes due and the payment of the full
amount so payable at the office or offices of all the Paying Agents outside the United States and its possessions is illegal or effectively
precluded because of the imposition of exchange controls or other similar restrictions on the payment of such amount in United States
currency, then the Company may instruct the Trustee in an Officer’s Certificate to make such payments at the office of a Paying
Agent located in the United States. The Company hereby covenants and agrees that it shall not so instruct the Trustee with respect to
payment in the United States if such payment would cause such Unregistered Security to be treated as a “registration-required obligation”
under United States law and regulations.
At the election of the Company,
any payments by the Company provided for in this Indenture or in any of the Securities may be made by electronic funds transfer.
Section 1002. Maintenance
of Office or Agency. The Company will maintain in each Place of Payment for any series of Securities,
or any Tranche thereof, an office or agency where Registered Securities, or any Tranche thereof, of that series may be surrendered for
registration of transfer or exchange and a Place of Payment where (subject to Sections 305 and 307) Securities may be presented
for payment or exchange and where notices and demands to or upon the Company in respect of the Securities of that series and this Indenture
may be served. Unless otherwise specified pursuant to Section 301 with respect to any such series, the Company shall maintain
such offices or agencies in connection with each series in the Borough of Manhattan, The City of New York, State of New York. With respect
to any series of Securities issued in whole or in part as Unregistered Securities, the Company shall maintain one or more Paying Agents
located outside the United States and its possessions and shall maintain such Paying Agents for a period of one year after the principal
of such Unregistered Securities has become due and payable. During any period thereafter for which it is necessary in order to conform
to United States tax law or regulations, the Company will maintain a Paying Agent outside the United States and its possessions to which
the Unregistered Securities or coupons appertaining thereto may be presented for payment and will provide the necessary funds therefor
to such Paying Agent upon reasonable notice. The Security Registrar shall keep a register with respect to each series of Securities issued
in whole or in part as Registered Securities and to their transfer and exchange. The Company may appoint one or more co-Security Registrars
acceptable to the Trustee and one or more additional Paying Agents for each series of Securities, and the Company may terminate the appointment
of any co-Security Registrar or Paying Agent at any time upon written notice. The term “Security Registrar” includes any
co-Security Registrar. The term “Paying Agent” includes any additional Paying Agent. The Company shall notify the Trustee
of the name and address of any Agent not a party to this Indenture. Subject to Section 305, if the Company fails to maintain a
Security Registrar or Paying Agent, the Trustee shall act as such. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any time the Company fails to maintain any such required office
or agency or fails to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations,
surrenders, notices and demands.
The Company may also from
time to time designate one or more other offices or agencies where the Securities of one or more series may be presented or surrendered
for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation
or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in each Place of Payment for Securities
of any series for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and
of any change in the location of any such other office or agency.
In the case of Original Issue
Discount Securities of a series, the Company shall, prior to any Redemption Date or any Repayment Date applicable thereto, furnish the
Trustee with an Officer’s Certificate stating the amount of principal to be paid to a Holder of $1,000 principal amount of such
Securities.
Anything herein to the contrary
notwithstanding, any office or agency required by this Section may be maintained at any office of the Company in which event the Company
shall perform all functions to be performed at such office or agency.
Section 1003. Money for
Securities Payments to Be Held in Trust. If the Company at any time acts as its own Paying Agent with
respect to any series of Securities, or any Tranche thereof, it will, on or before each due date of the principal of (and premium, if
any) or interest, if any, on any of such Securities, segregate and hold in trust for the benefit of the Persons entitled thereto a sum
sufficient to pay the principal (and premium, if any) or interest so becoming due until such sums are paid to such Persons or otherwise
disposed of as herein provided and will promptly notify the Trustee of its action or failure so to act.
Whenever the Company has one
or more Paying Agents for any series of Securities, it will, on or prior to (and if on, then before 11:00 a.m. (New York City time)) each
due date of the principal of (and premium, if any) or interest, if any, on such Securities, deposit with a Paying Agent a sum sufficient
(in immediately available funds, if payment is made on the due date) to pay the principal (and premium, if any) or interest so becoming
due, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium or interest, and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of its action or failure so to act.
The Company will cause each
Paying Agent for any series of Securities, or any Tranche thereof, other than the Trustee, to execute and deliver to the Trustee an instrument
in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will:
(1) hold
all sums held by it for the payment of the principal of (and premium, if any) or interest, if any, on Securities of such series or Tranche
in trust for the benefit of the Persons entitled thereto until such sums are paid to such Persons or otherwise disposed of as herein provided;
(2) give
the Trustee notice of any default by the Company (or any other obligor upon the Securities of such series or Tranche) in the making of
any payment of principal (and premium, if any) or interest, if any, on the Securities of such series or Tranche; and
(3) at
any time during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company may at any time,
for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order direct
any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying
Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money.
Any money deposited with the
Trustee or any Paying Agent, or received by the Trustee in respect of Eligible Obligations deposited with the Trustee pursuant to Section
401, 403 or 1007, or then held by the Company, in trust for the payment of the principal of (and premium, if any) or
interest, if any, on any Security of any series and remaining unclaimed for two years (or such shorter period for the return of such moneys
to the Company under applicable abandoned property laws) after such principal (and premium, if any) or interest has become due and payable
shall be paid to the Company on Company Request, or (if then held by the Company) shall be discharged from such trust; and the Holder
of such Security shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of
the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at
the expense of the Company cause to be published once, in a newspaper published in the English language, customarily published on each
Business Day and of general circulation in the Borough of Manhattan, The City of New York, notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of
such money then remaining will be repaid to the Company.
Section 1004. Corporate
Existence. Subject to Article VIII, the Company will do or cause to be done all things necessary
to preserve and keep in full force and effect its corporate existence, rights (charter and statutory) and franchises; provided, however,
that the Company shall not be required to preserve any such right or franchise if, in the judgment of the Company, the preservation thereof
is no longer desirable in the conduct of the business of the Company and the loss thereof is not disadvantageous in any material respect
to the Holders of Securities of any series or Tranche in any material respect.
Section 1005. Defeasance
of Certain Obligations. The Company may omit to comply with its obligations under the covenants contained
in Sections 1002, 1004 (except with respect to maintaining its corporate existence), 1006, 1008 and Article VIII
with respect to any Security or Securities of any series or Tranche or any portion of the principal amount thereof (and in respect of
any term, provision or condition set forth in the covenants or restrictions specified for such Securities pursuant to Section 301,
in any supplemental indenture, Board Resolution or Officer’s Certificate establishing such Security), provided that the
following conditions shall have been satisfied:
(1) With
reference to this Section, the Company has deposited or caused to be irrevocably deposited (except as provided in Section 402)
with the Trustee as trust funds in trust, specifically pledged as security for, and dedicated solely to, the benefit of the Holders of
such Securities or portions thereof, (i) money in an amount, or (ii) if Securities of such series are not subject to repayment at the
option of Holders, (A) Eligible Obligations which through the payment of interest and principal in respect thereof in accordance with
their terms will provide not later than one day before the due date of any payment referred to in clause (x) or (y) of this subparagraph
(1) money in an amount, or (B) a combination thereof, sufficient, in the opinion of a nationally recognized firm of independent certified
public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge (x) the principal of (and
premium, if any) and each installment of principal (and premium, if any) and interest, if any, on the Outstanding Securities of such series
or portions thereof on the Stated Maturity of such principal or installment of principal or premium or interest or to and including the
Redemption Date irrevocably designated by the Company pursuant to subparagraph (7) of this Section and (y) any mandatory sinking fund
payments applicable to the Securities of such series or portions thereof on the day on which such payments are due and payable in accordance
with the terms of the Indenture and of such Securities or portions thereof;
(2) Such
deposit shall not, as specified in an Opinion of Counsel, cause the Trustee with respect to the Securities of such series to have a conflicting
interest as defined in Section 608 and for purposes of the Trust Indenture Act with respect to the Securities of such series;
(3) Such
deposit will not result in a breach or violation of, or constitute a default under, this Indenture or any other agreement or instrument
to which the Company is a party or by which it is bound;
(4) No
Event of Default or event which with notice or lapse of time would become an Event of Default with respect to the Securities of such series
shall have occurred and be continuing on the date of such deposit and no Event of Default specified in Section 501(6) or (7)
shall have occurred at any time from the date of such deposit to the 91st calendar day thereafter (it being understood that this condition
to defeasance may not be satisfied until such 91st calendar day after the date of deposit);
(5) The
Company shall have delivered to the Trustee an Opinion of Counsel to the effect that Holders of the Securities of such series will not
realize income, gain or loss for federal income tax purposes as a result of such deposit and defeasance of certain obligations and will
be subject to federal income tax on the same amount and in the same manner and at the same times, as would have been the case if such
deposit and defeasance had not occurred;
(6) The
Company has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the defeasance contemplated by this Section have been met; and
(7) If
the Company has deposited or caused to be deposited money or Eligible Obligations to pay or discharge the principal of (and premium, if
any) and interest, if any, on the Outstanding Securities of such series or portion thereof to and including a Redemption Date pursuant
to subparagraph (1) of this Section, such Redemption Date shall be irrevocably designated by a Board Resolution delivered to the Trustee
on or prior to the date of deposit of such money or Eligible Obligations, and such Board Resolution shall be accompanied by an irrevocable
Company Request that the Trustee give notice of such redemption in the name and at the expense of the Company not less than 30 nor more
than 60 days prior to such Redemption Date in accordance with Section 1104.
Section 1006. Statement
by Officers as to Default. The Company will deliver to the Trustee, within 120 days after the end of each fiscal year of the Company
ending after the date hereof, a written statement, which need not comply with Section 102, signed by the principal executive officer,
the principal financial officer or the principal accounting officer of the Company stating, as to each signer thereof, that
(1) a
review of the activities of the Company during such year and of performance under this Indenture has been made under his supervision,
and
(2) to
the best of his knowledge, based on such review, the Company has fulfilled all its obligations under this Indenture throughout such year,
or, if there has been a default in the fulfillment of any such obligation, specifying each such default known to him and the nature and
status thereof.
Section 1007. Waiver
of Certain Covenants. (a) The Company may omit in any particular instance to comply with any term, provision or condition set
forth in (i) any additional covenants or restrictions specified with respect to the Senior Securities of any series, or any Tranche
thereof, as contemplated by Section 301 if before the time for such compliance the Holders of not less than a majority in
aggregate principal amount (or such larger proportion as may be required in respect of waiving a past default of any such additional
covenant or restriction) of the Outstanding Securities of all series and Tranches with respect to which such covenant or restriction
was so specified, considered as one class, by Act of such Holders, either waives such compliance in such instance or generally waive
compliance with such term, provision or condition and (ii) Sections 1002, 1004, 1006 and 1008 and Article VIII
if before the time for such compliance the Holders of at least a majority in principal amount of Senior Securities Outstanding under
this Indenture by Act of such Holders, either waives such compliance in such instance or generally waive compliance with such term,
provision or condition; but, in the case of (i) or (ii) of this paragraph (a), no such waiver shall extend to or affect such term,
provision or condition except to the extent so expressly waived, and, until such waiver becomes effective, the obligations of the
Company and the duties of the Trustee in respect of any such term, provision or condition shall remain in full force and effect.
(b) The
Company may omit in any particular instance to comply with any term, provision or condition set forth in (i) any additional covenants
or restrictions specified with respect to the Subordinated Securities of any series, or any Tranche thereof, as contemplated by Section
301 if before the time for such compliance the Holders of not less than a majority in aggregate principal amount (or such larger proportion
as may be required in respect of waiving a past default of any such additional covenant or restriction) of the Outstanding Securities
of all series and Tranches with respect to which such covenant or restriction was so specified, considered as one class, by Act of such
Holders, either waives such compliance in such instance or generally waive compliance with such term, provision or condition and (ii)
Sections 1002, 1004, 1006 and 1008 and Article VIII if before the time for such compliance the Holders of at least
a majority in principal amount of Subordinated Securities Outstanding under this Indenture by Act of such Holders, either waives such
compliance in such instance or generally waive compliance with such term, provision or condition; but, in the case of (i) or (ii) of this
paragraph (b), no such waiver shall extend to or affect such term, provision or condition except to the extent so expressly waived, and,
until such waiver becomes effective, the obligations of the Company and the duties of the Trustee in respect of any such term, provision
or condition shall remain in full force and effect.
Section 1008. Maintenance
of Properties. The Company shall cause (or, with respect to property owned in common with others, make
reasonable effort to cause) all its properties used or useful in the conduct of its business to be maintained and kept in good condition,
repair and working order and shall cause (or, with respect to property owned in common with others, make reasonable effort to cause)
to be made all necessary repairs, renewals, replacements, betterments and improvements thereof, all as, in the judgment of the Company,
may be necessary so that the business carried on in connection therewith may be properly conducted; provided, however, that nothing
in this Section shall prevent the Company from discontinuing, or causing the discontinuance of, the operation and maintenance of any
of its properties if, in the judgment of the Company, such discontinuance (i) is desirable in the conduct of its business and (ii) will
not adversely affect the interests of the Holders of Securities of any series or Tranche in any material respect.
ARTICLE XI
REDEMPTION
OF SECURITIES
Section 1101. Applicability
of Article. Securities of any series, or any Tranche thereof, that are redeemable before their Stated
Maturity (or, if the principal of the Securities of any series is payable in installments, the Stated Maturity of the final installment
of the principal thereof) shall be redeemable in accordance with their terms and (except as otherwise specified as contemplated by Section
301 for Securities of any series or Tranche) in accordance with this Article.
Section 1102. Election
to Redeem; Notice to Trustee. The election of the Company to redeem any Securities shall be evidenced
by a Board Resolution or an Officer’s Certificate. In case of any redemption at the election of the Company of less than all the
Securities of any series, the Company shall, at least 45 days prior to the Redemption Date fixed by the Company (unless a shorter notice
is satisfactory to the Trustee), notify the Trustee of such Redemption Date and of the principal amount of Securities of such series
or Tranche to be redeemed. In the case of any redemption of Securities (a) prior to the expiration of any restriction on such redemption
provided in the terms of such Securities or elsewhere in this Indenture, or (b) pursuant to an election of the Company that is subject
to a condition specified in the terms of such Securities the Company shall furnish the Trustee with an Officer’s Certificate evidencing
compliance with such restriction.
Section 1103. Selection
by Trustee of Securities to Be Redeemed. If less than all the Securities of any series, or any Tranche thereof, are to be redeemed,
the particular Securities to be redeemed shall be selected by the Trustee not more than 45 days prior to the Redemption Date by the Trustee,
from the Outstanding Securities of such series or Tranche not previously called for redemption, by such method as is provided for any
particular series, or, in the absence of any such provision, by such method as the Trustee deems fair and appropriate and which may provide
for the selection for redemption of portions (equal to the minimum authorized denomination for Securities of that series or Tranche or
any integral multiple thereof) of the principal amount of Securities of such series or Tranche of a denomination larger than the minimum
authorized denomination for Securities of that series or Tranche; provided, however, that if, as indicated in an Officer’s
Certificate, the Company has offered to purchase all or any principal amount of the Securities then Outstanding of any series, or any
Tranche thereof, and less than all of such Securities as to which such offer was made have been tendered to the Company for such purchase,
the Trustee, if so directed by Company Order, shall select for redemption all or any principal amount of such Securities that have not
been so tendered.
The Trustee shall promptly
notify the Company and the Security Registrar in writing of the Securities selected for redemption and, in the case of any Securities
selected for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture,
unless the context otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Securities
redeemed or to be redeemed only in part, to the portion of the principal amount of such Securities that has been or is to be redeemed.
Section 1104. Notice of
Redemption. Unless otherwise specified as contemplated by Section 301 with respect to any series
of Securities, notice of redemption shall be given by first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days
prior to the Redemption Date, to each Holder of Securities to be redeemed, at his address appearing in the Security Register.
If Unregistered Securities
are to be redeemed, notice of redemption shall be published in an Authorized Newspaper in The City of New York and, if such Securities
to be redeemed are listed on any stock exchange outside of the United States, in the city in which such stock exchange is located, or
in such other city or cities as may be specified in the Securities, once in each of two different calendar weeks, the first publication
to be not less than 30 nor more than 90 days before the redemption date.
All notices of redemption
shall state:
(1) the
Redemption Date,
(2) the
Redemption Price, or the formula pursuant to which the Redemption Price is to be determined if the Redemption Price cannot be determined
at the time of notice is given,
(3) if
less than all the Outstanding Securities of any series or Tranche are to be redeemed, the identification (and, in the case of partial
redemption, the principal amounts) of the particular Securities to be redeemed, and the portion of the principal amount of any Security
to be redeemed in part and, in the case of any such Security of such series to be redeemed in part, that, on and after the Redemption
Date, upon surrender of such Security, a new Security or Securities of such series in principal amount equal to the remaining unpaid principal
amount thereof will be issued as provided in Section 1106,
(4) that
on the Redemption Date the Redemption Price will become due and payable upon each such Security to be redeemed and, if applicable, that
interest thereon will cease to accrue on and after said date,
(5) the
place or places where such Securities and all unmatured coupons are to be surrendered for payment of the Redemption Price and accrued
interest, if any,
(6) that
the redemption is for a sinking fund, if such is the case,
(7) the
CUSIP numbers, if any, assigned to such Securities; provided however, that such notice may state that no representation is made
as to the correctness of CUSIP numbers, and the redemption of such Securities shall not be affected by any defect in or omission of such
number, and
(8) such
other matters as the Company shall deem desirable or appropriate.
Unless otherwise specified
with respect to any Securities in accordance with Section 301, with respect to any notice of redemption of Securities at the election
of the Company, unless, upon the giving of such notice, such Securities are deemed to have been paid in accordance with Section 401,
such notice may state that such redemption shall be conditional upon the receipt by the Paying Agent or Agents for such Securities, on
or prior to the date fixed for such redemption, of money sufficient to pay the principal of and premium, if any, and interest, if any,
on such Securities and that if such money has not been so received such notice shall be of no force or effect and the Company shall not
be required to redeem such Securities. In the event that such notice of redemption contains such a condition and such money is not so
received, the redemption shall not be made and within a reasonable time thereafter notice shall be given, in the manner in which the notice
of redemption was given, that such money was not so received and such redemption was not required to be made, and the Paying Agent or
Agents for the Securities otherwise to have been redeemed shall promptly return to the Holders thereof any of such Securities that had
been surrendered for payment upon such redemption.
Notice of redemption of Securities
to be redeemed at the election of the Company, and any notice of non-satisfaction of a condition for redemption as aforesaid, shall be
given by the Company or, at the Company’s request, by the Security Registrar in the name and at the expense of the Company. Notice
of mandatory redemption of Securities shall be given by the Security Registrar in the name and at the expense of the Company.
Section 1105. Securities
Payable on Redemption Date. Notice of redemption having been given as aforesaid, and the conditions,
if any, set forth in such notice having been satisfied, the Securities or portions thereof so to be redeemed shall, on the Redemption
Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Company defaults in
the payment of the Redemption Price and accrued interest, if any) such Securities, or portions thereof, if interest-bearing, shall cease
to bear interest. Upon surrender of any such Security for redemption in accordance with said notice, such Security or portion thereof
together with all unmatured coupons, if any, shall be paid by the Company at the Redemption Price, together with accrued interest, if
any, to the Redemption Date but in the case of Unregistered Securities installments of interest due on or prior to the Redemption Date
will be payable to the bearers of the coupons for such interest by check or draft upon surrender of such coupons; provided, however,
that installments of interest whose Stated Maturity is on or prior to the Redemption Date shall be payable to the Holders of such Securities,
or one or more Predecessor Securities, registered as such at the close of business on the relevant Regular Record Dates according to
their terms and the provisions of Section 307.
If any Security called for
redemption shall not be so paid upon surrender thereof for redemption, the principal (and premium, if any) shall, until paid, bear interest
from the Redemption Date at the rate prescribed therefor in the Security.
Section 1106. Securities
Redeemed in Part. Any Security that is to be redeemed only in part shall be surrendered at a Place of Payment therefor (with, if
the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or his or her attorney duly authorized in writing), and the Company shall execute, and
the Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new Security or Securities of the
same series, of any authorized denomination as requested by such Holder, and of like tenor and in aggregate principal amount equal to
and in exchange for the unredeemed portion of the principal of the Security so surrendered.
ARTICLE XII
SINKING
FUNDS
Section 1201. Applicability
of Article. The provisions of this Article shall be applicable to any sinking fund for the retirement of Securities of any series,
or any Tranche thereof, except as otherwise specified as contemplated by Section 301 for Securities of such series or Tranche.
The minimum amount of any
sinking fund payment provided for by the terms of Securities of any series, or any Tranche thereof, is herein referred to as a “mandatory
sinking fund payment”, and any payment in excess of such minimum amount provided for by the terms of Securities of any series, or
any Tranche thereof, is herein referred to as an “optional sinking fund payment”. If provided for by the terms of Securities
of any series, or any Tranche thereof, the cash amount of any sinking fund payment may be subject to reduction as provided in Section
1202. Each sinking fund payment shall be applied to the redemption of Securities of the series or Tranche in respect of which it was
made as provided for by the terms of Securities of such series.
Section 1202. Satisfaction
of Sinking Fund Payments With Securities. The Company (1) may deliver Outstanding Securities of a series
or Tranche (other than any previously called for redemption) together, in the case of Unregistered Securities, with all unmatured coupons
appertaining thereto, in respect of which a mandatory sinking fund payment is to be made and (2) may apply as a credit Securities of
such series or Tranche that have been redeemed either at the election of the Company pursuant to the terms of such Securities or through
the application of permitted optional sinking fund payments pursuant to the terms of such Securities, in each case in satisfaction of
all or any part of any sinking fund payment with respect to the Securities of such series required to be made pursuant to the terms of
such Securities as provided for by the terms of such series, provided that such Securities have not been previously so credited.
Such Securities shall be received and credited for such purpose by the Trustee at the Redemption Price specified in such Securities for
redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly.
Section 1203. Redemption
of Securities for Sinking Fund. Not less than 45 days prior to each sinking fund payment date for any series of Securities, or any
Tranche thereof, the Company will deliver to the Trustee an Officer’s Certificate specifying the amount of the next ensuing sinking
fund payment for that series or Tranche pursuant to the terms of that series, the portion thereof, if any, which is to be satisfied by
payment of cash and the portion thereof, if any, which is to be satisfied by delivering and crediting Securities of that series pursuant
to Section 1202 and will also deliver to the Trustee any Securities to be so delivered. If the Company has not delivered such
Officer’s Certificate and, to the extent applicable, all such Securities, the next succeeding sinking fund payment for such series
or Tranche shall be made entirely in cash in the amount of the mandatory sinking fund payment. Not less than 30 days before each such
sinking fund payment date the Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the manner specified
in Section 1103 and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the
manner provided in Section 1104. Such notice having been duly given, the redemption of such Securities shall be made upon the
terms and in the manner stated in Sections 1105 and 1106.
ARTICLE XIII
REPAYMENT
OF SECURITIES AT OPTION OF HOLDERS
Section 1301. Applicability
of Article. Securities of any series or Tranche that are repayable before their Stated Maturity at
the option of the Holders shall be repayable in accordance with their terms and (except as otherwise specified as contemplated by Section
301 for Securities of any series) in accordance with this Article.
Section 1302. Notice of
Repayment Date. Notice of any Repayment Date with respect to Securities of any series or Tranche thereof
shall be given by the Company not less than 45 nor more than 60 days prior to such Repayment Date (or at such other times as may be specified
for such repayment or repurchase pursuant to Section 301 of this Indenture) to each Holder of Securities of such series in accordance
with Section 106.
The notice as to the Repayment
Date shall state (unless otherwise specified for such repayment or repurchase pursuant to Section 301 of this Indenture):
(1) the
Repayment Date, which date shall be no earlier than 30 days and no later than 60 days from the date on which such notice is mailed;
(2) the
principal amount of the Securities required to be repaid or repurchased and the Repayment Price (or the formula pursuant to which the
Repayment Price is to be determined if the Repayment Price cannot be determined at the time the notice is given);
(3) the
place or places where such Securities are to be surrendered for payment of the Repayment Price, and accrued interest, if any, and the
date by which Securities must be so surrendered in order to be repaid or repurchased;
(4) that
any Security not tendered or accepted for payment shall continue to accrue interest;
(5) that,
unless the Company defaults in making such payment or the Paying Agent is prohibited from paying such money to the Holders on that date
pursuant to the terms of this Indenture, Securities accepted for payment pursuant to any such offer of repayment or repurchase shall cease
to accrue interest after the Repayment Date;
(6) that
Holders electing to have a Security repaid or purchased pursuant to such offer may elect to have all or any portion of such Security purchased;
(7) that
Holders electing to have a Security repaid or repurchased pursuant to any such offer shall be required to surrender the Security, with
such customary documents of surrender and transfer as the Company may reasonably request, duly completed, or transfer by book-entry transfer,
to the Company or the Paying Agent at the address specified in the notice at least two Business Days prior to the Repayment Date;
(8) that
Holders shall be entitled to withdraw their election if the Company or the Paying Agent, as the case may be, receives, not later than
the expiration of the offer to repay or repurchase, a telegram, facsimile transmission or letter setting forth the name of the Holder,
the principal amount of the Security the Holder delivered for purchase and a statement that such Holder is withdrawing its election to
have such Security purchased;
(9) that,
in the case of a repayment or repurchase of less than all Outstanding Securities of a series or Tranche thereof, the method of selection
of Securities to be repaid or repurchased to be applied by the Trustee if the principal amount of properly tendered Securities exceeds
the principal amount of the Securities to be repaid or repurchased;
(10) that
Holders whose Securities are purchased only in part shall be issued new Securities of the same series or Tranche thereof equal in principal
amount to the unpurchased portion of the Securities surrendered (or transferred by book-entry transfer); and
(11) the
CUSIP or other identification number, if any, printed on the Securities being repurchased and that no representation is made as to the
correctness or accuracy of the CUSIP or other identification number, if any, listed in such notice or printed on the Securities.
Section 1303. Securities
Payable on Repayment Date. The form of option to elect repurchase or repayment having been delivered as specified in the form of
Security for such series, the Securities of such series or Tranche so to be repaid (after application of the method of selection described
pursuant to clause (9) of Section 1302, if the principal amount of properly tendered Securities exceeds the principal amount of
the Securities to be repaid or repurchased) shall, on the Repayment Date, become due and payable at the Repayment Price applicable thereto
and from and after such date (unless the Company defaults in the payment of the Repayment Price and accrued interest) such Securities
shall cease to bear interest. Upon surrender of any such Security for repayment in accordance with said notice, such Security shall be
paid by the Company at the Repayment Price together with accrued interest, if any, to the Repayment Date; provided, however, that
if a Security is repaid or repurchased on or after a Record Date but on or prior to the Stated Maturity of any installments of interest,
then any accrued and unpaid interest due on such Stated Maturity shall be payable to the Holders of such Securities, or one or more Predecessor
Securities, registered as such at the close of business on the relevant Record Dates according to their terms and the provisions of Section
307.
If any Security is not paid
upon surrender thereof for repayment, the principal (and premium, if any) shall, until paid, bear interest from the Repayment Date at
the rate prescribed therefor in such Security.
Section 1304. Securities
Repaid in Part. Any Security that by its terms may be repaid in part at the option of the Holder and that is to be repaid only
in part shall be surrendered at any office or agency of the Company designated for that purpose pursuant to Section 1002
(with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to
the Company and the Trustee duly executed by, the Holder thereof or his or her attorney duly authorized in writing), and the Company
shall execute, and the Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new Security
or Securities of the same series, as provided in Section 305, of any authorized denomination as requested by such Holder, in
aggregate principal amount equal to and in exchange for the unrepaid portion of the principal of the Security so surrendered.
This instrument may be executed
in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute
but one and the same instrument.
IN WITNESS WHEREOF, the parties
hereto have caused this Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as
of the date first above written.
|
SOLOWIN HOLDINGS |
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[CORPORATE SEAL] |
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By: |
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Name: |
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Title: |
Chief Executive Officer |
STATE OF [ ] |
) |
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) ss: |
CITY OF [ ] AND COUNTY OF [ ]) |
On the day of [ ] 20__, before
me personally came _______, to me known, who, being by me duly sworn, did depose and say that [he/she] is a director of SOLOWIN HOLDINGS,
one of the companies described in and which executed the foregoing instrument; that [he/she] knows the seal of said corporation; that
the seal affixed to said instruments is such corporate seal; that it was so affixed by authority of the memorandum and articles of association
of said corporation, and that [he/she] signed [his/her] name thereto by authority of the Board of Directors of said corporation.
SOLOWIN HOLDINGS
Reconciliation and tie between Trust Indenture
Act of 1939 and
Indenture, dated as of __, 20__
Trust Indenture Act Section |
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Indenture Sections |
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§ 310 |
(a)(1) |
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609 |
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(a)(2) |
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609 |
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(a)(3) |
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Not Applicable |
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(a)(4) |
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Not Applicable |
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(a)(5) |
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609 |
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(b) |
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608 |
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610 |
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§ 311 |
(a) |
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613(a) |
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(b) |
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613(b) |
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(b)(2) |
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703(a)(2) |
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703(b) |
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§ 312 |
(a) |
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701 |
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702(a) |
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(b) |
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702(b) |
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(c) |
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702(c) |
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§ 313 |
(a) |
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703(a) |
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(b) |
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703(b) |
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(c) |
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703(a), 703(b) |
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(d) |
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703(c) |
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§ 314 |
(a) |
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704 |
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(b) |
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Not Applicable |
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(c)(1) |
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102 |
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(c)(2) |
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102 |
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(c)(3) |
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Not Applicable |
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(d) |
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Not Applicable |
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(e) |
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102 |
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§ 315 |
(a) |
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601(a) |
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(b) |
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602 |
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703(a)(7) |
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(c) |
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601(b) |
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(d) |
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601(c) |
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(d)(l) |
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601(a)(1) |
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(d)(2) |
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601(c)(2) |
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(d)(3) |
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601(c)(3) |
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(e) |
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514 |
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§ 316 |
(a) |
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101 |
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(a)(1)(A) |
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502 |
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512 |
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(a)(1)(B) |
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513 |
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(a)(2) |
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Not Applicable |
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(b) |
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508 |
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(c) |
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104(g) |
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§ 317 |
(a)(l) |
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503 |
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(a)(2) |
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504 |
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(b) |
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1003 |
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§ 318 |
(a) |
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107 |
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Note: This reconciliation and tie shall not, for any purpose, be deemed
to be a part of the Indenture.
Exhibit 5.1
|
|
CONYERS
DILL & PEARMAN
29th
Floor
One
Exchange Square
8
Connaught Place
Central
Hong
Kong
T
+852 2524 7106 | F +852 2845 9268
conyers.com
|
8
October 2024
Matter
No. 1002895/110311140
852
2842 9530
Richard.Hall@conyers.com
SOLOWIN
HOLDINGS
Room
1910-12A, Tower 3
China
Hong Kong City
33
Canton Road, Tsimshatsui
Hong
Kong
Re:
SOLOWIN HOLDINGS (the “Company”)
We
have acted as special Cayman Islands legal counsel to the Company in connection with the Company’s shelf registration statement
on Form F-3 (the “Registration Statement”, which term does not include any other document or agreement whether or
not specifically referred to therein or attached as an exhibit or schedule thereto) filed by the Company with the U.S. Securities
and Exchange Commission (the “Commission”) on 8 October 2024 relating to the registration under the U.S. Securities
Act of 1933, as amended (the “Securities Act”) of a prospectus (the “Prospectus”) in connection
with (1) an offering by the Company of up to an aggregate principal amount of US$200,000,000 from time to time, on a delayed or continuous
basis, separately or in any combination in one or more series of (i) ordinary shares of par value US$0.0001 per share of the Company
(the “Ordinary Shares”); (ii) preferred shares of par value US$0.0001 per share of the Company (the “Preferred
Shares”) and, together with the Ordinary Shares, the “Company Shares”), (iii) debt securities that may include
debt securities entitling the holders to convert or exchange, for redemption or purchase in extinguishment of debt, an amount of Company
Shares at the conversion or exchange price or rate a price as set out in one or more indentures (the ”Debt Securities”);
(iv) warrants to purchase Company Shares or Debt Securities as set out in in one or more warrant agreements relating to the warrants
to be made between the Company and a bank or trust company, as warrant agent (the “Warrants”); (v) subscription rights
to purchase Company Shares, Debt Securities or other securities as set out in one or more subscription rights agreements to be made between
the Company and one or more selling agents and/or underwriters or directly by the Company (the “Subscription Rights”);
and (vi) units as set out in one or more unit agreements to be made between the Company and one or more selling agents and/or underwriters
or directly by the Company consisting of any combination of Company Shares, Debt Securities, Warrants and/or Subscription Rights (the
“Units” and together with the Debt Securities, the Warrants and the Subscription Rights, the “Non-Equity
Securities” and collectively with the Company Shares, the “Securities”), and (2) the resale, from time to
time, of up to an aggregate of 2,960,000 Ordinary Shares (the “Sale Shares”) by Vulcan Worldwide Holdings Limited
(the “Selling Shareholder”), each as described in the Registration Statement (the “Offering”).
Partners: Piers J. Alexander, Christopher W. H. Bickley, Peter H. Y. Ch’ng,
Anna W. T. Chong, Angie Y. Y. Chu, Vivien C. S. Fung, Richard J. Hall, Norman Hau, Wynne Lau, Paul M. L. Lim, Ryan A. McConvey, Teresa
F. Tsai, Flora K. Y. Wong, Lilian S. C. Woo, Mark P. Yeadon
Consultant: David M. Lamb
BERMUDA
| BRITISH VIRGIN ISLANDS | CAYMAN ISLANDS
For
the purposes of giving this opinion, we have examined copies of the following documents:
1.1 | the
Registration Statement; |
1.2 | the
amended and restated memorandum and articles of association of the Company; |
1.3 | the
resolutions in writing of all the directors of the Company dated 7October 2024 (the “Resolutions”); |
1.4 | the
register of members of the Company dated 7 October 2024 and certified by a director of the
Company (the “Register of Members”); |
1.5 | a
Certificate of Good Standing issued by the Registrar of Companies in relation to the Company
on 4 October 2024 (the “Certificate Date”); and |
1.6 | such
other documents and made such enquiries as to questions of law as we have deemed necessary
in order to render the opinion set forth below. |
We
have assumed:
2.1 | the
genuineness and authenticity of all signatures and the conformity to the originals of all
copies (whether or not certified) examined by us and the authenticity and completeness of
the originals from which such copies were taken; |
2.2 | that
where a document has been examined by us in draft form, it will be or has been executed and/or
filed in the form of that draft, and where a number of drafts of a document have been examined
by us all changes thereto have been marked or otherwise drawn to our attention; |
2.3 | the
capacity, power and authority of each of the parties to the definitive agreements relating
to the Debt Securities, Warrants, Subscription Rights and Units (the “Non-Equity
Securities Agreements”) other than the Company, to enter into and perform its respective
obligations under the Non-Equity Securities Agreements. |
2.4 | the
accuracy and completeness of all factual representations made in the Non-Equity Securities
Agreements, the Registration Statement, the Prospectus and other documents reviewed by us; |
2.5 | that
the Resolutions were passed at one or more duly convened, constituted and quorate meetings
or by unanimous written resolutions, remain in full force and effect and have not been rescinded
or amended; |
2.6 | that
there is no provision of the law of any jurisdiction, other than the Cayman Islands, which
would have any implication in relation to the opinions expressed herein; |
2.7 | that
on the date of allotment (where applicable) and issuance of any Securities, the Company is,
and after any such allotment and issuance the Company is and will be able to, pay its liabilities
as they become due; |
2.8 | that
the Company will issue the Securities in furtherance of its objects as set out in its memorandum
of association; |
2.9 | that
the memorandum and articles of association of the Company will not be amended in any manner
that would affect the opinions expressed herein; |
2.10 | that
the Company will have sufficient authorised and unissued share capital to effect the issue
of Company Shares at the time of issuance, whether as a principal issue or on the conversion,
exchange, or exercise of any Non-Equity Securities; |
2.11 | that
the form and terms of any and all Securities, the issuance and sale of any Securities by
the Company, and the Company’s incurrence and performance of its obligations thereunder
or in respect thereof (including, without limitation, its obligations under any related agreement,
indenture or supplement thereto) in accordance with the terms thereof will not violate the
memorandum and articles of association of the Company nor any applicable law, regulation,
order or decree in the Cayman Islands; |
2.12 | that
no invitation has been or will be made by or on behalf of the Company to the public in the
Cayman Islands to subscribe for any Securities or purchase any of the Sale Shares; |
2.13 | that
all necessary corporate action will be taken to authorise and approve any issuance of the
Securities, the terms of any offering thereof and related matters, and that the Non-Equity
Security Agreements and any applicable supplements to the Prospectus (each, a “Prospectus
Supplement”), and any other purchase, underwriting or similar agreement thereto
will be duly approved, executed and delivered by or on behalf of the Company and all other
parties thereto; |
2.14 | that
upon the issue of any Company Shares to be sold by the Company or upon exercise of the conversion
or exchangeable rights or purchase rights to the Non-Equity Securities, the Company will
receive consideration for the full issue price thereof which shall be equal to at least the
par value of the Company Shares; |
2.15 | that
the Securities to be offered and sold, will be, legal, valid, binding and enforceable against
all relevant parties in accordance with their terms pursuant to the applicable governing
law and jurisdiction (except to the extent that we expressly opine herein on matters of Cayman
Islands law); |
2.16 | that
neither the Company nor any of its shareholders is a sovereign entity of any state and none
of them is a subsidiary direct or indirect of any sovereign entity or state; |
2.17 | that
the issuance and sale of and payment for the Securities will be in accordance with the Non-Equity
Security Agreements and any other purchase, underwriting or similar agreement duly approved
by the board of directors of the Company and/or where so required, the shareholders of the
Company and the Registration Statement (including the Prospectus, any post-effective amendment
thereto and any Prospectus Supplement); |
2.18 | the
validity and binding effect under the laws of the United States of America of the Registration
Statement and that the Registration Statement will be duly filed with the Commission; |
2.19 | there
is no contractual or other prohibition or restriction (other than as arising under Cayman
Islands law) binding on the Company prohibiting or restricting it from entering into and
performing its obligations under the Registration Statement and the Securities; |
2.20 | no
restrictions notice (the “Restrictions Notice”) under the Companies Act
(the “Act”) has been issued or will be issued with respect to or that
may affect, directly or indirectly, any of the shares, interest, rights or obligations of
the Company that are the subject of the transactions referred to in the Non-Equity Securities
Agreements (the “Relevant Interests”); |
2.21 | that
the Selling Shareholder will continue to be the holder of a number of Ordinary Shares equal
to the number of the Sale Shares; |
2.22 | that
the Registration Statement has been declared effective by the Commission prior to, or concurrent
with, the sale of the Securities pursuant to the Registration Statement; and |
2.23 | that
the Offering and the transactions contemplated thereunder comply with the requirements of
the applicable rules of the Nasdaq Stock Market LLC. |
3.1 | The
obligations of the Company in connection with any offer, issuance and sale of any Securities: |
| (a) | will
be subject to the laws from time to time in effect relating to bankruptcy, insolvency, liquidation,
possessory liens, rights of set off, reorganisation, amalgamation, merger, consolidation,
moratorium, bribery, corruption, money laundering, terrorist financing, proliferation financing
or any other laws or legal procedures, whether of a similar nature or otherwise, generally
affecting the rights of creditors as well as applicable international sanctions; |
| (b) | will
be subject to statutory limitation of the time within which proceedings may be brought; |
| (c) | will
be subject to general principles of equity and, as such, specific performance and injunctive
relief, being equitable remedies, may not be available; |
| (d) | may
not be given effect to by a Cayman Islands court, whether or not it was applying foreign
laws, if and to the extent they constitute the payment of an amount which is in the nature
of a penalty; |
| (e) | in
the case of any applicable purchase, underwriting, or similar agreement and any other agreement
or document relating to the issue of the Company Shares, may be subject to the common law
rules that damages against the Company are only available where the purchaser of the Company
Shares rescinds such agreement; and |
| (f) | may
not be given effect by a Cayman Islands court to the extent that they are to be performed
in a jurisdiction outside the Cayman Islands and such performance would be illegal under
the laws of that jurisdiction. Notwithstanding any contractual submission to the exclusive
or non-exclusive jurisdiction of specific courts, a Cayman Islands court has inherent discretion
to stay or allow proceedings in the Cayman Islands against the Company under the Securities
if there are other proceedings in respect of those Securities simultaneously underway against
the Company in another jurisdiction. |
3.2 | We
express no opinion as to the enforceability of any provision of any document which provides
for the payment of a specified rate of interest on the amount of a judgment after the date
of judgment or which purports to fetter the statutory powers of the Company or which purports
to grant exclusive jurisdiction to any courts. |
3.3 | Enforcement
of the Non-Equity Securities Agreements to the extent they relate to the Relevant Interests
may be affected or prohibited if a Restrictions Notice is issued in respect of such Relevant
Interests in accordance with the Act. |
3.4 | We
express no opinion as to the meaning, validity or effect of any references to foreign (non-Cayman Islands)
statutes, rules, regulations, codes, judicial authority or any other promulgations and any
references to them in the Non-Equity Securities Agreements. |
3.5 | Except
as specifically stated herein, we make no comment with respect to any representations and
warranties which may be made by or with respect to the Company in any of the documents or
instruments cited in this opinion or otherwise with respect to the commercial terms of the
transactions, which are the subject of this opinion. |
3.6 | We
have not reviewed any of the Non-Equity Securities Agreements to be issued thereunder and
our opinions are qualified accordingly. |
3.7 | We
have made no investigation of and express no opinion in relation to the laws of any jurisdiction
other than the Cayman Islands. This opinion is to be governed by and construed in accordance
with the laws of the Cayman Islands and is limited to and is given on the basis of the current
law and practice in the Cayman Islands. This opinion is issued solely for the purposes of
the filing of the Registration Statement and is not to be relied upon in respect of any other
matter. |
On
the basis of and subject to the foregoing, we are of the opinion that:
4.1 | The
Company is duly incorporated and existing under the law of the Cayman Islands and, based
on the Certificate of Good Standing, is in good standing as at the Certificate Date. Pursuant
to the Act, a company is deemed to be in good standing if all fees and penalties under the
Act have been paid and the Registrar of Companies has no knowledge that the Company is in
default under the Act. |
4.2 | When
issued and paid for as contemplated in the Registration Statement, the Prospectus, any post-effective
amendment thereto and any Prospectus Supplement, the Company Shares will be validly issued,
fully paid and non-assessable (which term when used herein means that no further sums are
required to be paid by the holders thereof in connection with the issue thereof). |
4.3 | When
issued, executed, delivered and paid for as contemplated in the Non-Equity Securities Agreements,
the Registration Statement, the Prospectus, any post-effective amendment thereto and any
Prospectus Supplement, the Non-Equity Securities will be validly issued and constitute the
legal, valid and binding obligations of the Company in accordance with the terms thereof. |
4.4 | Based
solely on our review of the Register of Members, the Selling Shareholder was the registered
holder of 2,960,000 Ordinary Shares and such Ordinary Shares are validly issued, fully paid
and non-assessable (which term when used herein means that no further sums are required to
be paid by the holders thereof in connection with the issue thereof). |
We
hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the references to our firm under the
captions “Enforceability of Civil Liabilities” and “Legal Matters” in the prospectus forming a part of the Registration
Statement. In giving this consent, we do not hereby admit that we are experts within the meaning of Section 11 of the Securities Act
or that we are within the category of persons whose consent is required under Section 7 of the Securities Act or the Rules and Regulations
of the Commission promulgated thereunder.
Yours
faithfully,
/s/
Conyers Dill & Pearman
conyers.com
| 5
Exhibit 5.2
BEVILACQUA PLLC
1050 Connecticut Avenue, NW,
Suite 500
Washington, DC 20036
October 8, 2024
SOLOWIN HOLDINGS
Room 1910-1912A, Tower 3, China Hong Kong City
33 Canton Road, Tsim Sha Tsui, Kowloon
Hong Kong
Re: Registration Statement on Form F-3
Ladies and Gentlemen:
We have acted as United States counsel to SOLOWIN
HOLDINGS, an exempted company incorporated in the Cayman Islands (the “Company”), in connection with its filing of the Registration
Statement on Form F-3 on the date hereof (the “Registration Statement”) relating to the registration under the Securities
Act of 1933, as amended (the “Securities Act”) for the issue and sale by the Company of up to $200,000,000 or the equivalent
thereof in one or more foreign currencies, foreign currency units or composite currencies of (a) ordinary Shares, $0.0001 par value per
share (the “Ordinary Shares”), (b) preferred shares, $0.0001 par value per share (the “Preferred Shares”), (c)
debt securities, in one or more series to issued pursuant to the applicable indenture (the “Debt Securities”), (d) warrants
to purchase Ordinary Shares, Preferred Shares, Debt Securities, or any combination thereof, which may be issued pursuant to one or more
warrant agreements of the Company, proposed to be entered into with one or more warrant agents to be named therein (the “Warrants”),
(e) rights to purchase Ordinary Shares, Preferred Shares, Debt Securities or other securities of the Company (the “Rights”)
and (f) units consisting of any of the securities describe above, or any combination thereof. The Ordinary Shares, the Preferred Shares,
the Debt Securities, the Warrants, the Rights and the Units are collectively referred to herein as the “Securities” and individually
as a “Security”. The Securities shall include any additional amounts of such securities the offer and sale of which are registered
pursuant to a registration statement filed pursuant to Rule 462(b) under the Securities Act in connection with one or more offerings contemplated
by such Registration Statement.
We have reviewed the Registration Statement and
such other agreements, documents, records, certificates and other materials, and have reviewed and are familiar with such corporate proceedings
and satisfied ourselves as to such other matters, as we have considered relevant or necessary as a basis for this opinion. In such review,
we have assumed the accuracy and completeness of all agreements, documents, records, certificates and other materials submitted to us,
the conformity with the originals of all such materials submitted to us as copies (whether or not certified and including facsimiles),
the authenticity of the originals of such materials and all materials submitted to us as originals, the genuineness of all signatures
and the legal capacity of all natural persons.
On the basis of the assumptions and subject to
the qualifications and limitations set forth herein, we are of the opinion that:
I. |
With respect to the Debt Securities to be issued under the applicable indenture to be entered into by the Company, when (a) the specific terms of any particular series of Debt Securities have been duly established in accordance with the indenture and applicable law and authorized by all necessary corporate action of the Company (including the adoption by the board of directors of the Company (the “Board”) of resolutions duly authorizing the issuance and delivery of such Debt Securities and the Securities that such Debt Securities may be exchangeable for and/or convertible into), and (b) any such Debt Securities have been duly executed and issued by the Company, authenticated and duly delivered by or on behalf of the Company against payment therefor in accordance with the applicable indenture and in the manner contemplated by the Registration Statement and/or the related prospectus and by such corporate action, such Debt Securities will be the legally valid and binding obligations of the Company, enforceable against the Company in accordance with their terms. |
II. |
With respect to the Warrants to be issued by the Company, when (a) the specific terms of any such Warrants have been duly established in accordance with applicable law and authorized by all necessary corporate action of the Company (including the adoption by the Board of resolutions duly authorizing the issuance and delivery of such Warrants and the Securities that such Warrants may be exercisable for), and (b) any such Warrants have been duly executed and issued by the Company and such Warrants have been duly delivered by or on behalf of the Company against payment therefor in accordance with the Warrants and/or any warrant agreement and in the manner contemplated by the Registration Statement and/or the related prospectus and by such corporate action, such Warrants will be the legally valid and binding obligations of the Company, enforceable against the Company in accordance with their terms. |
|
|
III. |
With respect to the Rights to be issued by the Company, when: (a) the Board has taken all necessary corporate action to approve the issuance and establish the terms of the Rights, the terms of the offering thereof, and related matter, (b) the rights agreement under which the Rights are to be issued has been duly authorized and validly executed and delivered by the Company, (c) such Rights have been duly executed and authenticated or countersigned in accordance with the terms of such applicable rights agreement and (d) the Rights have been issued and sold in the manner contemplated by the Registration Statement and in accordance with such rights agreement, such Rights will constitute the valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms. |
|
|
IV. |
With respect to the Units to be issued by the Company, when (a) the Board has taken all necessary corporate action to approve the issuance and establish the terms of securities underlying such Units in connection therewith, the terms of such Units, the terms of the offering of such Units, and related matters, (b) if applicable, one or more unit agreements incorporating the terms and other provisions of such Units has been duly authorized, executed and delivered by the Company and a unit agent to be selected by the Company and named therein, (c) such Units have been duly executed and authenticated or countersigned in accordance with the terms of such unit agreement and (d) the Units have been issued and sold in the manner contemplated by the Registration Statement and in accordance with such unit agreement, such Units will constitute the valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms. |
Each opinion in this letter that any Security
is a valid and binding obligation or is enforceable in accordance with its terms is subject to: (i) the effect of bankruptcy, insolvency,
fraudulent conveyance and other similar laws and judicially developed doctrines in this area such as substantive consolidation and equitable
subordination; (ii) the effect of general principles of equity; and (iii) other commonly recognized statutory and judicial constraints
on enforceability including statutes of limitations. In addition, we do not express any opinion as to the enforceability of any rights
to contribution or indemnification which may be violative of public policy underlying any law, rule or regulation (including any federal
or state securities law, rule or regulation). “General principles of equity” include, but are not limited to: Principles limiting
the availability of specific performance and injunctive relief; principles which limit the availability of a remedy under certain circumstances
where another remedy has been elected; principles requiring reasonableness, good faith and fair dealing in the performance and enforcement
of an agreement by the party seeking enforcement; principles which may permit a party to cure a material failure to perform its obligations;
and principles affording equitable defenses such as waiver, laches and estoppel. It is possible that terms in a particular contract covered
by our opinion may not prove enforceable for reasons other than those explicitly cited in this letter should an actual enforcement action
be brought, but (subject to all the exceptions, qualifications, exclusions and other limitations contained in this letter) such unenforceability
would not in our opinion prevent the party entitled to enforce that contract from realizing the principal benefits purported to be provided
to that party by the terms in that contract which are covered by our opinion.
Except as noted below, our advice on every legal
issue addressed in this letter is based exclusively on the internal law of the State of New York as in effect on the date hereof and we
express no opinion with respect to the applicability thereto, or the effect thereon, of the laws of any other jurisdiction or as to any
matters or municipal law or the laws of any local agencies within any state. For purposes of the opinions herein, we have assumed that
the governing law under each of the Debt Securities, the Warrants, the Rights, the Units and the applicable indenture, warrant agreements,
rights agreements and unit agreements governing such Securities (collectively, the “Documents”) shall be the laws of the State
of New York. We express no opinion as to what law might be applied by any other courts to resolve any issue addressed by our opinion and
we express no opinion as to whether any relevant differences exist between the laws upon which our opinions are based and any other laws
which may actually be applied to resolve issues which may arise under any of the Documents. The manner in which any particular issue would
be treated in any actual court case would depend in part on facts and circumstances particular to the case and would also depend on how
the court involved chose to exercise the wide discretionary authority generally available to it. This letter is not intended to guarantee
the outcome of any legal dispute that may arise in the future. In addition, the Securities may be issued from time to time on a delayed
or continuous basis, and this opinion is limited to the laws, including the rules and regulations, as in effect on the date hereof, which
laws are subject to change with possible retroactive effect. This opinion speaks only as of the date hereof, and we assume no obligation
to revise or supplement this opinion after the date hereof.
We have not undertaken any search of court records
for purposes of this letter. We have assumed that each applicable party to the Documents (i) is an entity duly incorporated or organized,
validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization; (ii) has adopted by requisite
vote of its board of directors, board of managers or analogous governing body the resolutions or approvals necessary to authorize such
party’s execution, delivery and performance of such Documents; (iii) has duly authorized, executed and delivered such Documents;
(iv) has all corporate and other organizational power and authority (including without limitation the power and authority under the laws
of its jurisdiction of organization) to execute and deliver such Documents and perform its respective obligations under such Documents;
(v) has satisfied all legal requirements that are applicable to such party to the extent necessary to entitle such party to enforce such
Documents; and (vi) is not required by any law to obtain any consent, approval, authorization or order of any court or governmental agency
in order to obtain the right to enter into such Documents or to take any action taken by it in connection with the consummation of the
transactions contemplated in the Documents in accordance with their terms, and the execution and delivery by such party of the Documents,
and that the consummation of the transactions contemplated thereby in accordance with the terms thereof will not violate any existing
provisions of the organizational documents of such party or any law or governmental regulation. For purposes of the opinions above, we
have assumed, without conducting any research or investigation with respect thereto, the corporate or other power of, and the due authorization,
execution and delivery of the Documents by, the Company, the absence of any conflicts with the organizational documents of the Company
and the absence of any conflicts with, or consents required under, the laws, rules and regulations of any jurisdiction other than the
State of New York. Various issues pertaining to Cayman Islands law are addressed in the opinion of Conyers Dill & Pearman filed as
an exhibit to the Registration Statement. We express no opinion with respect to those matters herein, and to the extent elements of those
opinions are necessary to the conclusions expressed herein, we have, with your consent, assumed such elements.
In preparing this letter
we have relied without independent verification upon: (i) information contained in certificates obtained from governmental authorities;
and (ii) factual information provided to us by the Company. We have assumed that there has been no relevant change or development between
the dates as of which the information cited in the preceding sentence was made available to us and the date of this letter and that the
information upon which we have relied is accurate and does not omit disclosures necessary to prevent such information from being misleading.
Whenever this letter provides advice about (or based upon) our knowledge of any particular information, such advice is based entirely
on the actual knowledge at the time this letter is delivered on the date it bears by the lawyers with Bevilacqua PLLC who have represented
or are representing the Company in connection with the issuance of the Securities after consultation with other lawyers with Bevilacqua
PLLC who have represented the Company on other substantive matters.
None of the opinions or other advice contained
in this letter considers or covers: (a) any antifraud laws, rules or regulations; (b) any state securities (or “blue sky”)
laws or regulations or securities laws or regulations of jurisdictions outside the United States; (c) any financial statements or supporting
schedules (or any notes to any such statements or schedules) or other financial or statistical information derived therefrom set forth
in (or omitted from) the Registration Statement and/or the related prospectus; or (d) any laws, statutes, governmental rules or regulations
or decisions which in our experience are not usually considered for or covered by opinions like those contained in this letter or are
not generally applicable to transactions of the kind covered by the Documents including any regulatory laws or requirements specific to
the industry in which you or the Company is engaged. In addition, none of the opinions or other advice contained in this letter covers
or otherwise addresses any of the following types of provisions which may be contained in the Documents: (i) provisions mandating contribution
towards judgments or settlements among various parties; (ii) waivers of benefits and rights to the extent they cannot be waived under
applicable law; (iii) provisions providing for liquidated damages, late charges and prepayment charges, in each case if deemed to constitute
penalties; or (iv) requirements in the Documents specifying that provisions thereof may only be waived in writing (these provisions may
not be valid, binding or enforceable to the extent that an oral agreement or an implied agreement by trade practice or course of conduct
has been created modifying any provision of such documents).
The foregoing opinion is limited to the laws of
the State of New York. The opinions set forth in this letter are being furnished in accordance with the requirements of Item 601(b)(5)
of Regulation S-K promulgated under the Securities Act, and no opinion is expressed herein as to any matter pertaining to the contents
of the Registration Statement, other than as to the specific issues addressed herein, and no opinion may be inferred or implied beyond
that expressly stated herein.
We hereby consent to the use of this opinion letter
as Exhibit 5.2 to the Registration Statement and to the use of our name under the caption “Legal Matters” in the Registration
Statement and in the Prospectus forming a part thereof and any supplement thereto. In giving this consent, we do not thereby admit that
we are within the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations promulgated
thereunder.
|
Very truly yours, |
|
|
|
/s/ Bevilacqua PLLC |
4
Exhibit 23.1
Board of Directors and Shareholders of
Solowin Holdings
Consent of Independent Registered Public Accounting
Firm
We hereby consent to the incorporation by reference
in the Registration Statement on Form F-3 of Solowin Holdings and its subsidiaries (collectively the “Company”) of our report
dated July 26, 2024, with respect to the consolidated balance sheets of the Company as of March 31, 2024 and 2023, and the related
consolidated statements of (loss) income and comprehensive (loss) income, changes in shareholders’ equity, and cash flows for each
of the three years in the period ended March 31, 2024, and the related notes, which appears in the Annual Report on Form 20-F of the Company
for the year ended March 31, 2024.
We also consent to the reference of our firm under
the caption “Experts” in such Registration Statement.
|
|
San Mateo, California |
WWC, P.C. |
October 8, 2024 |
Certified Public Accountants |
|
PCAOB ID No.1171 |
Exhibit 107
Calculation of Filing Fee Tables
|
SOLOWIN
HOLDINGS |
|
|
(Exact Name of Registrant as Specified in its Charter) |
|
Table 1: Newly Registered and Carry Forward
Securities
| |
Security
Type | |
Security
Class Title | |
Fee
Calculation
or Carry
Forward Rule | |
Amount
Registered (1) | | |
Proposed
Maximum
Offering Price
Per Unit(2) | | |
Maximum
Aggregate
Offering
Price(1)(2) | | |
Fee
Rate | | |
Amount
of
Registration
Fee | |
Fees
to be Paid
(Primary Shares to be offered by SOLOWIN HOLDINGS) | |
Equity | |
Ordinary
Shares, $0.0001 par value per share | |
Rule
457(o) | |
| | (2) | |
| | (2) | |
| | (2) | |
| — | | |
| — | |
| |
Equity | |
Preferred
Shares, $0.0001 par value per share | |
Rule
457(o) | |
| | (2) | |
| | (2) | |
| | (2) | |
| — | | |
| — | |
| |
Debt | |
Debt Securities | |
Rule
457(o) | |
| | (2) | |
| | (2) | |
| | (2) | |
| — | | |
| — | |
| |
Other | |
Warrants | |
Rule
457(o) | |
| | (2) | |
| | (2) | |
| | (2) | |
| — | | |
| — | |
| |
Other | |
Subscription
Rights | |
Rule
457(o) | |
| | (2) | |
| | (2) | |
| | (2) | |
| — | | |
| — | |
| |
Other | |
Units | |
Rule
457(o) | |
| | (2) | |
| | (2) | |
| | (2) | |
| — | | |
| — | |
| |
Unallocated
(Universal) Shelf | |
| |
Rule
457(o) | |
| | (2) | |
| | (2) | |
$ | 200,000,000 | | |
| $153.10
per $1,000,000 | | |
$ | 30,620.00 | (3) |
Fees to
be Paid (Secondary Shares offered by Selling Shareholder) | |
Equity | |
Ordinary
Shares, $0.0001 par value per share | |
Rule
457(c) | |
| 2,960,000 | (4) | |
$ | 2.765 | (5) | |
$ | 8,184,400 | | |
| $153.10
per $1,000,000 | | |
$ | 1,253.03 | (5) |
| |
Total
Offering Amounts | |
| | | |
$ | 208,184,400 | | |
| | | |
$ | 31,873.03 | |
| |
Total
Fees Previously Paid | |
| | | |
| | | |
| | | |
$ | 0.00 | |
| |
Total
Fee Offsets | |
| | | |
| | | |
| | | |
$ | 0.00 | |
| |
Net
Fee Due | |
| | | |
| | | |
| | | |
$ | 31,873.03 | |
| (1) | There are being registered hereunder such indeterminate (a) number of Ordinary Shares, $0.0001 par value
per share (“Ordinary Shares”), (b) number of preferred shares, $0.0001 par value per share (“Preferred Shares”),
(c) principal amount of debt securities, (d) number of warrants to purchase Ordinary Shares, Preferred Shares or debt securities; (e)
number of rights to purchase Ordinary Shares, Preferred Shares, debt securities or other securities, and (f) number of units, as shall
have an aggregate initial offering price not to exceed $100,000,000. If any debt securities are issued at an original issue discount,
then the offering price of such debt securities shall be in such greater principal amount as shall result in an aggregate initial offering
price not to exceed $100,000,000. Any securities registered hereunder may be sold separately or as units with other securities registered
hereunder. The securities registered also include such indeterminate number of Ordinary Shares, Preferred Shares, and debt securities
as may be issued upon conversion, exercise or exchange of convertible, exercisable or exchangeable securities being registered hereunder
or pursuant to the antidilution provisions of any such securities. In addition, pursuant to Rule 416 under the Securities Act of 1933,
as amended (the “Securities Act”), the securities being registered hereunder include such indeterminate number of securities
as may be issuable with respect to the securities being registered hereunder as a result of share splits, share dividends or similar transactions. |
| (2) | The proposed maximum aggregate offering price for each class of securities will be determined from time
to time by the registrant in connection with the issuance by the registrant of the securities registered hereunder and is not specified
as to each class of securities pursuant to General Instruction II.G. of Form F-3 under the Securities Act. |
| (3) | Estimated solely for the purposes of calculating the registration fee pursuant to Rule 457(o) of Regulation
C under the Securities Act. |
| (4) | Pursuant to Rule 416 under the Securities Act, the amount of Ordinary Shares being registered on behalf
of the selling shareholder shall be adjusted to include any additional Ordinary Shares that may become issuable as a result of any share
split, share dividend or similar transactions. |
| (5) | With respect to the Ordinary Shares being registered hereunder and may be sold by the selling shareholder,
estimated pursuant to Rule 457(c) of the Securities Act, solely for the purpose of computing the amount of the registration fee, based
upon the average of the high and low sales price of the registrant’s Ordinary Shares reported on the Nasdaq Capital Market on October
1, 2024. |
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