SECURITIES AND EXCHANGE COMMISSION
 
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
 
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 
Date of Report (Date of earliest event reported): April 20, 2015 (April 15, 2015)


HDS INTERNATIONAL CORP.
(Exact name of registrant as specified in its charter)


Nevada
000-53949
26-3988293
(State or other jurisdiction of Incorporation)
(Commission File Number)
(IRS Employer Identification Number)


9272 Olive Boulevard
St. Louis, MO  63132
(Address of principal executive offices)

(401) 400-0028
(Registrant's Telephone Number)

10 Dorrance St.
#700
Providence, RI  02003
(Former name or former address, if changed since last report)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
£    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

£    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

£    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

£    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 






ITEM 1.01                       ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

On April 15, 2015, we entered into a convertible promissory note with HGT Capital, LLC (the "Investor"), wherein the Investor will make available to us a under convertible promissory note (the "Note") the aggregate principal amount of up to $100,000, bearing simple interest of 10.0% per annum.  The Investor provided $50,000.00 to us on April 16, 2015, and is expected to deliver the second tranche of $50,000.00 at the Investor's discretion over the next 12 months. Any outstanding principal and accrued interest shall become due on October 16, 2016 (the "Due Date").  After the Due Date, all outstanding principal will incur interest at a rate of 22% per annum.  The terms of the Note provide the Investor with certain rights to convert all or a portion of the outstanding principal and accrued interest into fully paid and non-assessable shares of our common stock at a discount to our market price during a certain period of time in the future.

On April 15, 2015, we entered into a warrant agreement with the Investor, granting the Investor the right to purchase from us 100,000,000 shares of our common stock at an exercise price of $0.001 per share.  The warrants are subject to a cashless conversion feature. 


ITEM 9.01                       FINANCIAL STATEMENTS AND EXHIBITS.

(d)
Exhibits

Exhibit No.
Description of Exhibit
   
10.1
Convertible Note Agreement with HGT Capital, LLC
10.2
Sale and Purchase Agreement with HGT Capital, LLC
10.3
Warrant Agreement with HGT Capital, LLC










SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date:
April 21, 2015
HDS International Corp.
       
       
   
By:
PAUL RAUNER
   
Name:
Paul Rauner
   
Title:
President







 
 
 
Exhibit 10.1

ORIGINAL ISSUE CONVERTIBLE PROMISSORY NOTE

Face Amount:   $100,000.00                                                                                                                              April 15 2015
Purchase Price: $100,000.00

               FOR VALUE RECEIVED, HDS International, a Nevada corporation (the "Borrower"), with its principal offices located at 9272 Olive Boulevard, St. Louis, MO 63132 promises to pay to the order of HGT CAPITAL LLC, or its registered assigns (the "Payee" "HGT"), upon the terms set forth below, the principal amount of One Hundred Dollars ($100,000.00) (this "Note").

1.      Payments.

(a)            The purchase price ($100,000.00) of this Note plus interest on the principal amount outstanding hereunder at the rate of 10% per annum commencing on April 15, 2015 shall be due on October 15, 2016 or such later date as is agreed to in writing by the Payee (the "Maturity Date"), unless due earlier in accordance with the terms of this Note (see Section c below).

(b)            All overdue unpaid principal to be paid hereunder shall entail a late fee at the rate of 22% per annum (or such lower maximum amount of interest permitted to be charged under applicable law) which will accrue daily, from the date such principal is due hereunder through and including the date of payment.

(c)      Upon Closing, the Borrower will be obligated to pay HGT Fees in the amount of $2,500.00 to conduct due diligence and prepare documentation for the proposed transaction. This can be taken out of the funding. The Company shall pay any and all legal fees that may be incurred or charged in connection with the issuance of shares of the Company's Common Stock to the Holder arising out of or relating to the conversion of this Note.

2.
Payment Schedule. $50,000.00 to the Borrower upon written proof that the transfer agent and corporate attorney have been paid and up to date and the execution by the Borrower.  HGT will make payments to these entities and deduct from the $50,000.00 to the Borrower if these entities are owed monies over $500 as of April 30, 2015.

3.
Prepayment. Notwithstanding anything to the contrary contained in this Note, at any time during the periods set forth on the table immediately following this paragraph (the "Prepayment Periods"), the Borrower shall have the right, exercisable on not less than three (3) Trading Days prior written notice to the Holder of the Note to prepay the outstanding Note (principal and accrued interest), in full, in accordance with this Section 3. Any notice of prepayment hereunder (an "Optional Prepayment Notice") shall be delivered to the Holder of the Note at its registered addresses and shall state: (1) that the Borrower is exercising its right to prepay the Note, and (2) the date of prepayment which shall be not more than three (3) Trading Days from the date of the Optional Prepayment Notice.  On the date fixed for prepayment (the "Optional Prepayment Date"), the Borrower shall make payment of the Optional Prepayment Amount (as defined below) to Holder, or upon the order of the Holder as specified by the Holder in writing to the Borrower, at least one (1) business day prior to

 

the Optional Prepayment Date.  If the Borrower exercises its right to prepay the Note, the Borrower shall make payment to the Holder of an amount in cash (the "Optional Prepayment Amount") equal to the percentage ("Prepayment Percentage") as set forth in the table immediately following this paragraph opposite the applicable Prepayment Period, multiplied by the sum of: (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the Optional Prepayment Date plus (y) Default Interest, if any on the amounts referred to in clauses (w) and (x) plus (z) any amounts owed to the Holder pursuant to Section 4 hereof.  If the Borrower delivers an Optional Prepayment Notice and fails to pay the Optional Prepayment Amount due to the Holder of the Note within two (2) business days following the Optional Prepayment Date, the Borrower shall forever forfeit its right to prepay the Note pursuant to this Section 3.


Prepayment Period
Prepayment Percentage
             1.    The period beginning on the Issue Date and ending on the date which is thirty (30) days following the Issue Date.
118%
2.      The period beginning on the date which is thirty-one (31) days following the Issue Date and ending on the date which is sixty (60) days following the Issue Date
124%
3.     The period beginning on the date which is sixty-one (61) days following the Issue Date and ending on the date which is ninety (90) days following the Issue Date
130%
4.    The period beginning on the date that is ninety-one (91) day from the Issue Date and ending one hundred twenty (120) days following the Issue Date
136%
5.     The period beginning on the date that is one hundred twenty-one (121) day from the Issue Date and ending one hundred fifty (150) days following the Issue Date
142%
6.     The period beginning on the date that is one hundred fifty-one (151) day from the Issue Date and ending one hundred eighty (180) days following the Issue Date
148%

After the expiration of one hundred eighty (180) days following the Issue Date, the Borrower shall have no right of prepayment.


 



  4.    Events of Default.

(a)            "Event of Default", wherever used herein, means any one of the following events (whatever the reason and whether it shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental body):


(ii)             Borrower or any of its subsidiaries shall fail to observe or perform any of their respective obligations owed to Payee under this Note or any other covenant, agreement, representation or warranty contained in, or otherwise commit any breach hereunder or in any other agreement executed in connection herewith and such failure or breach shall not have been remedied within ten days after the date on which notice of such failure or breach shall have been delivered;

(iii)            Borrower or any of its subsidiaries shall commence, or there shall be commenced against Borrower or any subsidiary, a case under any applicable bankruptcy or insolvency laws as now or hereafter in effect or any successor thereto, or Borrower or any subsidiary commences any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction whether now or hereafter in effect relating to Borrower or any subsidiary, or there is commenced against Borrower or any subsidiary any such bankruptcy, insolvency or other proceeding which remains undismissed for a period of 60 days; or Borrower or any subsidiary is adjudicated insolvent or bankrupt; or any order of relief or other order approving any such case or proceeding is entered; or Borrower or any subsidiary suffers any appointment of any custodian or the like for it or any substantial part of its property which continues undischarged or unstayed for a period of 60 days; or Borrower or any subsidiary makes a general assignment for the benefit of creditors; or Borrower or any subsidiary shall call a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts; or Borrower or any subsidiary shall by any act or failure to act expressly indicate its consent to, approval of or acquiescence in any of the foregoing; or any corporate or other action is taken by Borrower or any subsidiary for the purpose of effecting any of the foregoing;

(iv)           Borrower or any subsidiary shall default in any of its respective obligations under any other note or any mortgage, credit agreement or other facility, indenture agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement of Borrower or any subsidiary, whether such indebtedness now exists or shall hereafter be created and such default shall result in such indebtedness becoming or being declared due and payable prior to the date on which it would otherwise become due and payable; or

(v)            Borrower shall (a) be a party to any Change of Control Transaction (as defined below), (b) agree to sell or dispose all or in excess of 33% of its assets in one

 


or more transactions (whether or not such sale would constitute a Change of Control Transaction), (c) redeem or repurchase more than a de minimis number of shares of Common Stock or other equity securities of Borrower or (d) make any distribution or declare or pay any dividends (in cash or other property, other than common stock) on, or purchase, acquire, redeem, or retire any of Borrower's capital stock, of any class, whether now or hereafter outstanding. "Change of Control Transaction" means the occurrence of any of: (i) an acquisition after the date hereof by an individual or legal entity or "group" (as described in Rule 13d-5(b)(1) promulgated under the Securities Exchange Act of 1934, as amended) of effective control (whether through legal or beneficial ownership of capital stock of Borrower, by contract or otherwise) of in excess of 33% of the voting securities of Borrower, (ii) a replacement at one time or over time of more than one-half of the members of Borrower's board of directors which is not approved by a majority of those individuals who are members of the board of directors on the date hereof (or by those individuals who are serving as members of the board of directors on any date whose nomination to the board of directors was approved by a majority of the members of the board of directors who are members on the date hereof), (iii) the merger of Borrower with or into another entity that is not wholly-owned by Borrower, consolidation or sale of 33% or more of the assets of Borrower in one or a series of related transactions, or (iv) the execution by Borrower of an agreement to which Borrower is a party or by which it is bound, providing for any of the events set forth above in (i), (ii) or (iii).

However, in no event shall the acquisition of any assets of SirenGPS, Inc. be considered a Change of Control Transaction regardless of the proportion of the Company's assets that may be involved in such transaction, as SirenGPS is the company that currently owns the emergency management platform the monetization of which constitutes the Company's principal operations.

(vi)           Failure to complete the preparation and filing of the financial statements with the SEC. HGT must be notified 7 business days ahead of failure to complete the preparation and filing of the financial statements with the SEC in a timely manner.

(b)       If any Event of Default occurs (unless such Event of Default is waived in writing by the Payee), the full principal amount of this Note shall become, at the Payee's election, immediately due and payable in cash. Commencing 5 days after the occurrence of any Event of Default that results in the acceleration of this Note, the interest rate on this Note shall accrue at the rate of 22% per annum, or such lower maximum amount of interest permitted to be charged under applicable law.  The Payee need not provide and Borrower hereby waives any presentment, demand, protest or other notice of any kind, and the Payee may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such declaration may be rescinded and annulled by Payee at any time prior to payment hereunder. No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.



 



  5.       Conversion

(a) (i)            Holder's Conversion Right.  At any time after the Maturity Date until this Note is no longer outstanding, this Note, including interest and principal, The Holder of this Note is entitled, at its option, at any time, to convert all or any amount of the principal face amount of this Note then outstanding into shares of the Company's common stock (the "Common Stock"), at a price ("Conversion Price") for each share of Common Stock equal to 50% of the average of the three lowest closing bid prices of the Common Stock as reported on the National Quotations Bureau OTCQB exchange which the Company's shares are traded or any exchange upon which the Common Stock may be traded in the future ("Exchange"), for the twenty prior trading days including the day upon which a Notice of Conversion is received by the Company (provided such Notice of Conversion is delivered by fax or other electronic method of communication to the Company after 4 P.M. Eastern Standard or Daylight Savings Time if the Holder wishes to include the same day closing price).

However, if the Borrower's share price, at any time before October 14, 2015 loses the bid (ex: .0001 on the ask with zero market Borrowers on the bid on level 2), then the fixed conversion price resets to .00001 with immediate conversion. If the Borrower gets a "DTC chill", any time before July 14, 2015, then the fixed price will be .00005.


The Holder shall effect conversions by delivering to the Borrower the form of Notice of Conversion attached hereto as Annex A (a "Notice of Conversion"), specifying the date on which such conversion is to be effected (a "Conversion Date"). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion is provided hereunder. To effect conversions hereunder, the Holder shall not be required to physically surrender Notes to the Borrower until the entire amount of this Note has been satisfied. The Borrower shall deliver any objection to any Notice of Conversion within TWO (2) Business Days of receipt of such notice. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error. If the Borrower does not request the issuance of the shares underlying this Note after receipt of a Notice of Conversion within TWO (2) Business days following the period allowed for any objection, the Borrower shall be responsible for any differential in the value of the converted shares underlying this Note between the value of the closing price on the date the shares should have been delivered and the date the shares are delivered. In addition, if the Borrower fails to timely (within 72 hours, 3 business days), deliver the shares per the instructions of the Payee, if permitted under Rule 144 of the rules and regulations of the Securities and Exchange Commission, free and clear of all legends in legal free trading form, the Borrower shall allow Payee to add two (2) days to the look-back (the mechanism used to obtain the conversion price along with discount) for each day the Borrower fails to timely (within 72 hours, 3 business days)) deliver shares, on the next conversion.
 
The Holder and any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note may be less than the amount stated on the face hereof. Any Opinion Letter required to effectuate the issuance of the shares pursuant to this Paragraph4 (a) and the Notice of Conversion shall be provided and issued by HGT CAPITAL LLC. The parties

 


hereby agree that the Payee will cover all reasonable legal costs associated with the issuance of the Opinion Letter to the Transfer Agent.


(ii)            Whenever the Set Price is adjusted pursuant to any of Section 4, the Borrower shall promptly mail to each Holder a notice setting forth the Set Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.

(iii)            If (A) the Borrower shall declare a dividend (or any other distribution) on the Common Stock; (B) the Borrower shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock; (C) the Borrower shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights; (D) the approval  of any stockholders of the Borrower shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Borrower is a party, any  sale or transfer of all or substantially all of the assets of the Borrower, of any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property; (E) the Borrower shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Borrower; then, in each case, the Borrower shall cause to be filed at each office or agency maintained for the purpose of conversion of the Notes, and shall cause to be mailed to the Holders at their last addresses as they shall  appear upon the stock books of the Borrower, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided, that the failure to mail such notice or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified in such notice. Holders are entitled to convert Notes during the 20-day period commencing the date of such notice to the effective date of the event triggering such notice.

(iv)            If, at any time while this Note is outstanding, (A) the Borrower effects any merger or consolidation of the Borrower with or into another Person, (B) the Borrower effects any sale of all or substantially all of its assets in one or a series of related transactions, (C) any tender offer or exchange offer (whether by the Borrower or another Person) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, or (D) the Borrower effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (in any such case, a "Fundamental Transaction"), then upon any subsequent conversion of this Note, the Holder shall have the right to receive, for each Underlying Share that would have been issuable upon such conversion absent such Fundamental Transaction, the same kind and amount of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to  such Fundamental Transaction, the holder of one share of  Common Stock (the "Alternate Consideration"). For purposes of any such conversion, the determination of the Set

 


Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Borrower shall apportion the Set Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate consideration it receives upon any conversion of this Note following such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any successor to the Borrower or surviving entity in such Fundamental Transaction shall issue to the Holder a new note consistent with the foregoing provisions and     evidencing the Holder's right to convert such note into Alternate Consideration. The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this paragraph and insuring that this Note (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction.  If any Fundamental Transaction constitutes or results in a Change of Control Transaction, then at the request of the Holder delivered before the 90th day after such Fundamental Transaction, the Borrower (or any such successor or surviving entity) will purchase the Note from the Holder for a purchase price, payable in cash within 5 trading days after such request (or, if later, on the effective date of the Fundamental Transaction), equal to the 200% of the remaining unconverted principal amount of this Note on the date of such request, plus all accrued and unpaid interest thereon, plus all other accrued and unpaid amounts due hereunder.

(b)               The Borrower covenants that it will beginning upon the maturity date and continuing for all times thereafter until the note is resolved through payment or conversion; reserve and keep available out of its authorized and unissued shares of Common Stock solely for the purpose of issuance upon conversion of this Note.

(c)               Any and all notices or other communications or deliveries to be provided by the Holders hereunder, including, without limitation, any Notice of Conversion, shall be in writing and delivered personally, by facsimile, sent by a nationally recognized overnight courier service, addressed to the Borrower, at the address set forth or such other address or facsimile number as the Borrower may specify for such purposes by notice to the Holders delivered in accordance with this Section. Any and all notices or other communications or deliveries to be provided by the Borrower hereunder shall be in writing and delivered personally, by facsimile, sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile telephone   number or address of such Holder appearing on the books of the Borrower, or if no such facsimile telephone number or address appears, at the principal place of business of the Holder. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Section prior to 5:30 p.m. (New York City time), (ii) the date after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Section later than 5:30 p.m. (New York City time) on any date and earlier than 11:59 p.m. (New York City  time) on such date, (iii) the second Business Day following the date of  mailing, if sent by nationally recognized overnight courier service, or  (iv) upon actual receipt by the party to whom such notice is required to be given.

(d)               Notwithstanding anything to the contrary herein contained, the Holder may not convert this Note to the extent such conversion would result in the Holder, together with any affiliate

 


thereof, beneficially owning (as determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and the rules promulgated thereunder) in excess of 4.99% of the then issued and outstanding shares of Common Stock, including shares issuable upon such conversion and held by the Holder after application of this section.  The provisions of this section may be waived by the Holder (but only as to itself and not to any other Holder) upon not less than 61 days prior notice to the Borrower. Other Holders shall be unaffected by any such waiver.
 
  6.        Right of First Refusal. The Buyer shall have no right of first refusal on financing events.


  7.       Negative Covenants.  So long as any portion of this Note is outstanding, the Borrower will not and will not permit any of its Subsidiaries to directly or indirectly, unless consented to in writing by the Payee:

i.
amend its certificate of incorporation, bylaws or other charter documents so as to adversely affect any rights of the Payee;


  8.        No Waiver of Payee's Rights.    All payments of principal and interest shall be made without setoff, deduction or counterclaim. No delay or failure on the part of the Payee in exercising any of its options, powers or rights, nor any partial or single exercise of its options, powers or rights shall constitute a waiver thereof or of any other option, power or right, and no waiver on the part of the Payee of any of its options, powers or rights shall constitute a waiver of any other option, power or right. Borrower hereby waives presentment of payment, protest, and all notices or demands in connection with the delivery, acceptance, performance, default or endorsement of this Note. Acceptance by the Payee of less than the full amount due and payable hereunder shall in no way limit the right of the Payee to require full payment of all sums due and payable hereunder in accordance with the terms hereof.

  9.       Modifications.   No term or provision contained herein may be modified, amended or waived except by written agreement or consent signed by the party to be bound thereby.

  10.   Cumulative Rights and Remedies; Usury.   The rights and remedies of Payee expressed herein are cumulative and not exclusive of any rights and remedies otherwise available under this. The election of Payee to avail itself of any one or more remedies shall not be a bar to any other available remedies, which Borrower agrees Payee may take from time to time. If it shall be found that any interest due hereunder shall violate applicable laws governing usury, the applicable rate of interest due hereunder shall be reduced to the maximum permitted rate of interest under such law.

  11.   Use of Proceeds.  Borrower shall use the proceeds from this Note hereunder for general working capital purposes.

  12.   Collection Expenses.   If Payee shall commence an action or proceeding to enforce this Note, then Borrower shall reimburse Payee for its costs of collection and reasonable attorney's fees incurred with the investigation, preparation and prosecution of such action or proceeding.

 



  13.            Severability.    If any provision of this Note is declared by a court of competent jurisdiction to be in any way invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if any provision is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder shall violate applicable laws governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum permitted rate of interest.

  14.   Successors and Assigns.   This Note shall be binding upon Borrower and its successors and shall inure to the benefit of the Payee and its successors and assigns. The term "Payee" as used herein, shall also include any endorsee, assignee or other holder of this Note.

  15.  Lost or Stolen Promissory Note.   If this Note is lost, stolen, mutilated or otherwise destroyed, Borrower shall execute and deliver to the Payee a new promissory note containing the same terms, and in the same form, as this Note. In such event, Borrower may require the Payee to deliver to Borrower an affidavit of lost instrument and customary indemnity in respect thereof as a condition to the delivery of any such new promissory note.

  16.    Due Authorization.   This Note has been duly authorized, executed and delivered by Borrower and is the legal obligation of Borrower, enforceable against Borrower in accordance with its terms except as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors' rights generally.  No consent of any other party and no consent, license, approval or authorization of, or registration or declaration with, any governmental authority, bureau or agency is required in connection with the execution, delivery or performance by the Borrower, or the validity or enforceability of this Note other than such as have been met or obtained. The execution, delivery and performance of this Note and all other agreements and instruments executed and delivered or to be executed and delivered pursuant hereto or thereto or the securities issuable upon conversion of this Note will not  violate any provision of any existing law or regulation or any order or decree of any court, regulatory body or administrative agency or the certificate of incorporation or by-laws of the Borrower or any mortgage, indenture, contract or other agreement to which the Borrower is a party or by which the Borrower or any property or assets of the Borrower may be bound.

  17.   Governing Law.   All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each of Borrower and Payee agree that all legal proceedings concerning the interpretations, enforcement and defense of this Note shall be commenced in the state and federal courts sitting in the City of New York, Borough of Manhattan (the "New York Courts"). Each of Borrower and Payee hereby irrevocably submit to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder (including with respect to the enforcement of this Note), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper. Each of Borrower and Payee hereby irrevocably waive personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to the other at the address in effect for notices to it under this Note and agrees that such service shall constitute good

 


and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Each of Borrower and Payee hereby irrevocably waive, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Note or the transactions contemplated hereby.

  18.            Notice.  Any and all notices or other communications or deliveries to be provided by the Payee hereunder, including, without limitation, any conversion notice, shall be in writing and delivered personally, by facsimile, sent by a nationally recognized overnight courier service or sent by certified or registered mail, postage prepaid, addressed to the Borrower, or such other address or facsimile number as the Borrower may specify for such purposes by notice to the Payee delivered in accordance with this paragraph.  Any and all notices or other communications or deliveries to be provided by the Borrower hereunder shall be in writing and delivered personally, by facsimile, sent by a nationally recognized overnight courier service or sent by certified or registered mail, postage prepaid, addressed to the Payee at the address of the Payee appearing on the books of the Borrower, or if no such address appears, at the principal place of business of the Payee. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission if delivered by hand or by telecopy that has been confirmed as received by 5:00 p.m. on a business day, (ii) one business day after being sent by nationally recognized overnight courier or received by telecopy after 5:00 p.m. on any day, or (iii) five business days after being sent by certified or registered mail, postage and charges prepaid, return receipt requested.

  19.            Equity Blocker. The Holder shall not convert this debenture into shares of common stock in an amount greater than 4.99% (9.99% if the Borrower is not a fully reporting Borrower under  the Securities Exchange Act of 1934 ("Non-Reporting)) of the total issued and outstanding shares of common stock of the Borrower, at any time during the term of this Debenture. Any attempt to do so by the Holder or Payee shall not be effectuated. The calculation of the Holder's 4.99% (9.99% if the Borrower is Non-Reporting) holding shall include any and all shares of common stock beneficially held by the Holder at such time or within the next 60 days.


The undersigned signs this Note as a Borrower and not as a surety or guarantor or in any other capacity.


 
HDS INTERNATIONAL
 
     
 
By:  PAUL RAUNER
 
 
Name:  Paul Rauner
 
 
Title: Chief Executive
 
     
     
 
HGT CAPITAL LLC
 
 
By: SYLVESTER GBEWONYO JR.
 
 
Sylvester Gbewonyo Jr
 
 
MANAGING PARTNER
 




 
HDS INTERNATIONAL CORP.
NON-SHELL LETTER


In connection with the above referenced agreement and exhibits and related agreements and     instruments, herein the Agreement, and any present and any future conversion requests of HGT Capital, LLC ("HGT") we irrevocably confirm:

1.
HDS INTERNATIONAL CORP. (HDSI) is not, has not been for at least twelve months, a shell issuer as described in Rule 144 promulgated with reference to the Securities Act of 1933, as amended (the "Securities Act") nor is or was a "shell" as otherwise commonly understood;

2.
HDS INTERNATIONAL CORP. is, unless noted "Not Applicable," subject to the reporting requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act").

3.
HDS INTERNATIONAL CORP. has to the extent it has been subject to Exchange Act requirements for filing reports, filed all reports and other materials required to be filed by Section 13 or 15(d) of the Exchange Act, as applicable, during the preceding 12 months and or has filed with the trading exchange or over the counter disclosure system all such reports and information to be deeded current in all public reporting;

4.
HDS INTERNATIONAL CORP. is now and will remain current with all obligations with its stock transfer agent and the   Securities and Exchange Commission and the state of incorporation. Your Borrower and officers and owners and affiliates are not officers, Directors or material shareholders of HDS INTERNATIONAL CORP. or affiliates of HDS INTERNATIONAL CORP., HGT is not an affiliate.

5.
Any and all approvals needed in relation to the above referenced Agreement, this letter, for the assistance of our transfer agent, etc., is obtained. The Agreement reflects, among other things, conversion rights we otherwise afford to the non-affiliate debt holders.

Representations herein survive the issuance or closing of any instrument or matter, and we will cooperate as needed to give effect to and protect your rights including as to the transfer agent and you may rely upon these promises and representations.

Effective Date: 04/15/2015


 
Very truly yours,
 
     
     
 
By:  PAUL RAUNER
 
 
Name:  Paul Rauner
 
 
Title: Chief Executive
 


 

Resolution approved by the Board of Directors of HDS INTERNATIONAL CORP.

UNANIMOUS CONSENT IN LIEU OF A SPECIAL
MEETING OF DIRECTORS OF HDS INTERNATIONAL CORP.

The undersigned, being all of the directors of HDS INTERNATIONAL CORP.; a corporation of the State of Nevada, (the "Corporation"), do hereby authorize and approve the actions set forth in the following resolutions without the formally of convening a meeting, and do hereby consent to the following actions of this Corporation, which actions are hereby deemed affective as of the date hereof:

RESOLVED: that the officers of this Corporation are authorized and directed to enter into the Securities Settlement Agreement in the amount of $100,000.00 with HGT Capital, LLC, dated 04/15/2015 to provide conversion features with Common Stock at a 50% discount from the average of the three lowest closing bid prices for the 20 days prior to each conversion. Conversion for such notes as well as 10% interest, and come due on 10/14/2015; or twelve months earlier upon a change of SEC Reporting Standards

RESOLVED: that the officers of this Corporation hereby certify this corporation has never been a "blank check shell" or "shell Borrower" (an issuer as described in Rule 144(i)(1)(i) promulgated under the Securities Act of 1933 or as defined in SEC Rule 405) and is in compliance with Rule 144 (i)(2); and

FURTHER RESOLVED, that each of the officers of the Corporation be, and they hereby are authorized and empowered to execute and deliver such documents, instruments and papers and to take any and all other action as they or any of them may deem necessary or appropriate of the purpose of carrying out the intent of the foregoing resolutions and the transactions contemplated thereby; and that the authority of such officers to execute and deliver any such documents, instruments and papers and to take any such other action shall be conclusively evidenced by their execution and delivery thereof or their taking thereof.

The undersigned, by affixing their signatures hereto, do hereby consent to, authorize and approve the foregoing actions in their capacity as a majority of the direction of HDS INTERNATIONAL CORP.

Effective on the aforementioned Due Date.

By:  PAUL RAUNER
 
Name:  Paul Rauner
 
Title: Chief Executive
 




 

 
NOTICE OF CONVERSION


The undersigned hereby elects to convert principal under the Original Issue Discount Secured Promissory Note of HDS INTERNATIONAL CORP. (the "Borrower") dated 04/15/2015 into shares of common stock (the "Common Stock") according to the conditions hereof, as of the date written below. If shares are to be issued in the name of a person other than the undersigned, the undersigned will pay a reasonable transfer expense payable with respect thereto.  No fee will be charged to the Payee for any conversion, except for such transfer expense, if any.

Conversion calculations:

Borrower Name: HDS INTERNATIONAL CORP.
Date to Effect Conversion: ___/____/___

Conversion Price: At any time after the Maturity Date until this Note is no longer outstanding, this Note, including interest and principal, shall be convertible into shares of Common Stock at a 50% discount from the average of the three lowest closing bid prices for the 20 days prior to each conversion. However, if the Borrower's share price, at any time before October 14, 2015 loses the bid (ex: .0001 on the ask with zero market Borrowers on the bid on level 2), then the fixed conversion price resets to .00001 with immediate conversion. If the Borrower gets a "DTC chill", any time before July 14, 2015, then it shall be convertible into shares of Common Stock at a fixed price of .00005




Principal Amount of Agreement to be converted: $ ______________

Interest Amount of Agreement to be converted: $________________

Number of shares of Common Stock to be issued: _______________

Principal to Remain: $___________________



By: ____________________
Name: Sylvester Gbewonyo Jr
Title: MANAGING PARTNER

HGT CAPITAL LLC
135 East 57th Street
4th Floor
New York, NY 10022






 

10/14/2015

Action Stock Transfer Corporation
2469 E.Fort Union Blvd
Suite 214
Salt Lake City, UT 84121

To Whom It May Concern:

HDS INTERNATIONAL CORP., a Nevada State corporation (the "Borrower") and HGT CAPITAL LLC (the "Investor") have entered into an Original Issue Convertible Note dated as of 04/15/2015 (the "Note").

A copy of the Note is attached hereto. You should familiarize yourself with your issuance and delivery obligations, as Transfer Agent, contained therein. The shares to be issued are to be registered in the names of the registered holder of the securities submitted for conversion or exercise.

You are hereby irrevocably authorized and instructed that upon October 15, 2015, the maturity date of the HGT CAPITAL LLC NOTE, you should reserve 300,000,000 shares of common stock ("Common Stock") of the Borrower (initially, shares) for issuance upon full conversion of the debt in accordance with the terms thereof. The Borrower is required at all times to have authorized and reserved five times the number of shares that is actually issuable upon full conversion of the Note (based on the Conversion Price of the Notes in effect from time to time)(the "Reserved Amount") (in the event the Reserved Amount exceeds five times the Holder will release the portion of the reserve in excess of five times back to the Borrower). The Reserved Amount shall be increased from time to time in accordance with the Borrower's obligations hereunder.  The Borrower represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable.  In addition, if the Borrower shall issue any securities or make any change to its capital structure which would change the number of shares of Common Stock into which the Notes shall be convertible at the then current Conversion Price, the Borrower shall at the same time make proper provision so that thereafter there shall be a sufficient number of shares of Common Stock authorized and reserved, free from preemptive rights, for conversion of the outstanding Notes.

The ability to convert the Note in a timely manner is a material obligation of the Borrower pursuant to the Note. Your firm is hereby irrevocably authorized and instructed to issue shares of Common Stock of the Borrower (without any restrictive legend) to the Investor without any further action or  confirmation  by the Borrower: (A) upon your receipt from the Investor of: (i) a notice of conversion ("Conversion Notice") executed by the Investor; and (ii) an opinion of counsel of the Investor, in form, substance and scope customary for opinions of counsel in comparable transactions (and satisfactory to the transfer agent), to the effect that the shares of Common Stock of the Borrower issued to the Investor pursuant to the Conversion Notice are not "restricted securities" as defined in Rule 144 and should be issued to the Investor without any restrictive legend; and (B) the number of shares to be issued is less than 4.99% (or 9.99% if the Borrower is a non-reporting entity) of the total issued common stock of the Borrower.

The Borrower hereby requests that your firm act immediately, without delay and without the need for ANY ACTION or CONFIRMATION by the Borrower with respect to the issuance of Common Stock pursuant to any Conversion Notices received from the Investor.


 



The Borrower shall indemnify you and your officers, directors, principals, partners, agents and representatives, and hold each of them harmless from and against any and all loss, liability, damage, claim or expense (including the reasonable fees and disbursements of its attorneys) incurred by or asserted against you or any of them arising out of or in connection with the instructions set forth herein, the performance of your duties hereunder and otherwise in respect hereof, including the costs and expenses of defending yourself or themselves against any claim or liability hereunder, except that the Borrower shall not be liable hereunder as to matters in respect of which it is determined that you have acted with gross negligence or in bad faith. You shall have no liability to the Borrower in respect to any action taken or any failure to act in respect of this if such action was taken or omitted to be taken in good faith, and you shall be entitled to rely in this regard on the advice of counsel.


The Board of Directors of the Borrower has approved the foregoing (irrevocable instructions) and does hereby extend the Borrower's irrevocable agreement to indemnify your firms for all loss, liability or expense in carrying out the authority and direction herein contained on the terms herein set forth.

The Borrower agrees that in the event that you resign as the Borrower's transfer agent, the Borrower shall engage a suitable replacement transfer agent that will agree to serve as transfer agent for the Borrower and be bound by the terms and conditions of these Irrevocable Instructions within five (5) business days.

The Investor is intended to be and are third party beneficiaries hereof, and no amendment or modification to the instructions set forth herein may be made without the consent of the Investor.

The investor and Borrower expressly understand and agree that nothing in this irrevocable Transfer instruction Agreement shall require or be construed in any way to require the transfer agent to do, take or not do take any action that would be contrary to any Federal or State law, rule, or regulation including but expressly not limited to both the Securities Act of 1933 and the Securities and Exchange Act of 1934 as amended and the rules and regulations promulgated there under.

Very truly yours,

By: PAUL A. RAUNER                                                                                                        
Name: Paul Rauner
Title:  Chief Executive, HDS International


Acknowledged and Agreed:

Action Stock Transfer Corporation

By:                                                                                  
Name:                                                                                  
Title:                                                                                    





Exhibit 10.2

 
SALE AND PURCHASE AGREEMENT
 
      
 
      THIS AGREEMENT is made as of the Effective Date below by and between the undersigned Seller ("Seller" or the "Company") and the undersigned Investor ("Investor" and with Seller, the "Parties"), on the signature page hereof, for the express purpose stated.


W I T N E S S E T H:

WHEREAS, the Investor, to provide the Company with additional resources to conduct its business, the Investor is willing to loan to the Company in one or more disbursements up to an aggregate amount of $100,000.00, subject to the conditions specified herein.


NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants contained herein, and for other good and valuable considerations, the receipt and sufficiency of which are hereby acknowledged, the Parties and trading company agree as follows:

1. The Loan.  Subject to the terms of this Agreement, the Investor agrees to lend to the Company at the Closing (as hereinafter defined) the amount stated above against the issuance and delivery by the Company of a convertible promissory note for such amount, in substantially the form attached hereto as Exhibit A (a "Note"). The closing of the sale and purchase of the Notes (the "Closing") shall be held on the Effective Date, or at such other time as the Company and Investor may mutually agree (such date is hereinafter referred to as the "Closing Date"). At any time on or before the 10th day following the Closing, the Company may sell Notes representing up to the balance of the authorized principal amount not sold at the Closing (the "Additional Investor").  All such sales made at any additional closings (each an "Additional Closing") shall be made on the terms and conditions set forth in this Agreement and (i) the representations and warranties of the Company set forth in Section 7 hereof shall speak as of the Closing and the Company shall have no obligation to update any disclosure related thereto, and (ii) the representations and warranties of the Additional Investor in Section 7 hereof shall speak as of such Additional Closing.  This Agreement may be amended by the Company without the consent of the Investor to include any Additional Investor upon the execution by such Additional Investor of a counterpart signature page hereto.  Any Notes sold pursuant to this Section 1 shall be deemed to be "Notes," for all purposes under this Agreement and any Additional Investor thereof shall be deemed to be "Investor" for all purposes under this Agreement. At the Closing, (i) Investor shall deliver to the Company a check or wire transfer funds in the amount of Investor's Loan Amount; and (ii) the Company shall issue and deliver to the Investor a Note in favor of the Investor payable in the principal amount of the Investor's Loan Amount. The Company shall pay any and all legal fees that may be incurred or charged in connection with the issuance of shares of the Company's Common Stock to the Holder arising out of or relating to the conversion of this Note.

2. Seller Bound. Company hereby accepts the foregoing PURCHASE and transfer and promises to be bound by and upon all the covenants, agreements, terms and conditions set forth therein.

3. Benefit and PURCHASEs. This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and assigns; provided that no party shall assign or transfer all or any portion of this Agreement without the prior written consent of the other party, and any such attempted PURCHASE shall be null and void and of no force or effect.



4.
Representations. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada. The Company has the requisite corporate power to own and operate its properties and assets and to carry on its business as now conducted and as proposed to be conducted.  The Company is duly qualified and is authorized to do business and is in good standing as a foreign corporation in all jurisdictions in which the nature of its activities and of its properties (both owned and leased) makes such qualification necessary, except for those jurisdictions in which failure to do so would not have a material adverse effect on the Company or its business. All corporate action on the part of the Company, its directors and its stockholders necessary for the authorization of the Loan Documents and the execution, delivery and performance of all obligations of the Company under the Loan Documents, including the issuance and delivery of the Notes and the reservation of the equity securities issuable upon conversion of the Notes (collectively, the "Conversion Securities") has been taken or will be taken prior to the issuance of such Conversion Securities.  The Loan Documents, when executed and delivered by the Company, shall constitute valid and binding obligations of the Company enforceable in accordance with their terms, subject to laws of general application relating to bankruptcy, insolvency, the relief of debtors and, with respect to rights to indemnity, subject to federal and state securities laws.  The Conversion Securities, when issued in compliance with the provisions of the Loan Documents will be validly issued, fully paid and non-assessable and free of any liens or encumbrances and issued in compliance with all applicable federal and securities laws.

5.
Right of First Refusal. The buyer shall have no right of first refusal on subsequent financing transactions.

6.
Waiver. Any party hereto shall have the right to waive compliance by the other of any term, condition or covenant contained herein. Such waiver shall not constitute a waiver of any subsequent failure to comply with the same or any different term, condition or covenant. No waiver, however, is valid unless in writing and the other Party is notified of same, except if the waiver is from the assignee and relates to any dealing between the trading company and the Assignee in which case notice to the Seller is not relevant.

7.
Applicable Law and Venue. The laws of the State of New York, without reference to conflict of laws principles, shall govern this Agreement and the sole venue for any suit relating hereto shall be a court in New York County, New York.

8.
Further Representations. The Investor and Company represent they are both (1) an "accredited investor" within the meaning of Rule 501 of Regulation D promulgated in relation to the Securities Act of 1933, as amended, and (2) sophisticated and experienced in making investments, and (3) capable, by reason of their business and financial experience, of evaluating the relative merits and risks of an investment in the securities, and (4) they are able to afford the loss of investment in the securities. Wherever the context shall require, all words herein in the masculine gender shall be deemed to include the feminine or neuter gender, all singular words shall include the plural, and all plural shall include the singular. From and after the date of this Agreement, Company agrees to execute whatever additional documentation or instruments as are necessary to carry out the intent and purposes of this Agreement or to comply with any law. The failure of any party at any time to insist upon strict performance of any condition, promise, agreement or understanding set forth herein, shall not be construed as a waiver or relinquishment of any other condition, promise, agreement or understanding set forth herein or of the right to insist upon strict performance of such waived condition, promise, agreement or understanding at any other time. Except as otherwise provided herein, each party hereto shall bear all expenses incurred by each such party in connection with this Agreement and in the consummation of the transactions contemplated hereby and in preparation thereof. This Agreement may only be amended or modified at any time, and from time to time, in writing, executed by the parties hereto. Any notice, communication, request, reply or advice (hereinafter severally and collectively called "Notice") in this Agreement provided or permitted to be given, shall be made or be served by delivering same by overnight mail or by delivering the same by a hand-delivery service, such Notice shall be deemed given when so delivered. For all purposes of Notice, the addresses of the parties shall be the last known address of the party. The Company agrees to co-operate in respect of this Agreement, including reviewing and executing any document necessary for the performance of this Agreement, to comply with law or as reasonably requested by any party hereto, or legal counsel to any party

 
   hereto. Representations of the Seller shall survive the closing of this Agreement.

9.
Headings. The paragraph headings of this Agreement are for convenience of reference only and do not form a part of the terms and conditions of this Agreement or give full notice thereof.

10.
Severability. Any provision hereof that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability, without HDSI validating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not HDSI validate or render unenforceable such provision in any other jurisdiction.

11.
Entire Agreement. This Agreement contains the entire understanding between the parties, no other representations, warranties or covenants having induced either party to execute this Agreement, and supersedes all prior or contemporaneous agreements with respect to the subject matter hereof. This Agreement may not be amended or modified in any manner except by a written agreement duly executed by the party to be charged, and any attempted amendment or modification to the contrary shall be null and void and of no force or effect.








12.
Joint Drafting. The parties agree that this Agreement hereto shall be deemed to have been drafted jointly by all parties hereto, and no construction shall be made other than with the presumption of such joint drafting. This Agreement may be executed by the parties hereto in one or more counterparts, each of which shall be deemed an original and which together shall constitute one and the same instrument. In lieu of the original documents, a facsimile transmission or copy of the original documents shall also be as effective and enforceable as the original.

13.
It is hereby agreed that in the event any Installment Payment noted above is not paid by Bank transfer within 10 days of the Due Date, for any reason, then at the option of the Company this agreement may be immediately cancelled and sent to HGT Capital, LLC in writing to reflect an PURCHASE amount of the amount actually paid to date of cancellation. Upon cancellation of PURCHASE made under this agreement, the Note and the debt under the note will revert back to the Seller and the Seller has the right to treat this Agreement as rescinded and to revert to all its rights under the Assigned Loan Agreement. Upon the rescission of this Agreement, any installments it has paid to the Seller shall be applied towards debt.







 
Each of the parties hereto has caused this SALE and PURCHASE Agreement to be executed as of Effective Date below.

Effective Date:  04/15/2015

Amount of Debt: $100,000.00
Payable as follows: $50,000.00 upon the Investor's Clearing Firm's approval with the second tranche of $50,000.00 payable at the Investor's discretion over the next 12 months.


Name of Trading Company: HDS International Corp. ("HDSI")

Debt Conversion Feature: The Investor shall be permitted to convert any portion of the convertible note at any time after the Maturity Date until this Note is no longer outstanding, this Note, including interest and principal, shall be convertible into shares of Common Stock at a discount of 50% off the average of the three lowest closing bid prices during the prior 20 trading days to the conversion.

Name of Investor: HGT Capital, LLC

Investor:
 
HGT Capital, LLC
 
Company:
 
HDS International Corp.
 
           
           
           
By:
SYLVESTER GBEWONYO JR
 
By:
PAUL RAUNER
 
           
Print Name:
Sylvester Gbewonyo Jr
 
Print Name:
Paul Rauner
 






PURCHASE and Assumption Agreement between HDS International Corp. and HGT
Capital, LLC Dated 04/15/2015


In connection with the above referenced agreement and exhibits and related agreements and instruments, herein the Agreement, and any present and any future conversion requests of HGT Capital, LLC ("HGT") we irrevocably confirm:

1.
HDS International Corp. ("HDSI") is not, and has not in the last 12 months been, a shell issuer as described in   Rule 144 promulgated with reference to the Securities Act of 1933, as amended (the "Securities Act") nor is or was a "shell" as otherwise commonly understood;

2.
HDS International Corp. is, unless noted "Not Applicable," subject to the reporting requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). This is not applicable to HDS International Corp.

3.
HDS International Corp. has to the extent it has been subject to Exchange Act requirements for filing reports, filed all reports and other materials required to be filed by Section 13 or 15(d) of the Exchange Act, as applicable, during the preceding 12 months and or has filed with the trading exchange or over the counter disclosure system all such reports and information to be deeded current in all public reporting;

4.
HDS International Corp. is now and will remain current with all obligations with its stock transfer agent, OTC Markets and its State of incorporation. Your company and officers and owners and affiliates are not officers, Directors or material shareholders of HDS International Corp. or affiliates of HDS International Corp. HGT is not an affiliate.

5.
Any and all approvals needed in relation to the above referenced Agreement, this letter, for the assistance of our transfer agent, etc., is obtained. The Agreement reflects, among other things, conversion rights we otherwise afford to the non-affiliate debt holders.

Representations herein survive the issuance or closing of any instrument or matter, and we will cooperate as needed to give effect to and protect your rights including as to the transfer agent and you may rely upon these promises and representations.


Effective Date: 04/15/2015
     
       
 
Very truly yours,
 
       
 
By:
PAUL RAUNER
 
 
Name:
Paul Rauner
 
 
Title:
Chief Executive Office
 





Resolution approved by the Board of Directors of HDS International Corp.
UNANIMOUS CONSENT IN LIEU OF A SPECIAL
MEETING OF DIRECTORS OF
HDS International Corp.

The undersigned, being all of the directors of HDS International Corp., a corporation of the State of Nevada, (the "Corporation"), do hereby authorize and approve the actions set forth in the following resolutions without the formally of convening a meeting, and do hereby consent to the following actions of this Corporation, which actions are hereby deemed affective as of the date hereof:

RESOLVED: That the officers of this Corporation are authorized and directed to Enter into the SALE and Purchase Agreement in the amount of $100,000.00 with HGT Capital, LLC, dated 04/15/2015 to provide conversion features in which the assignee shall be permitted to convert any portion of the assigned debt at any time after the Maturity Date until this Note is no longer outstanding. This Note, including interest and principal, shall be convertible into shares of Common Stock at a discount of 50% off the average of the three lowest closing bid prices during the prior 20 trading days to each conversion.

RESOLVED: that the officers of this Corporation herby certify this corporation has never been a blank check shell; and

FURTHER RESOLVED, that each of the officers of the Corporation be, and they hereby are authorized and empowered to execute and deliver such documents, instruments and papers and to take any and all other action as they or any of them may deem necessary or appropriate of the purpose of carrying out the intent of the foregoing resolutions and the transactions contemplated thereby; and that the authority of such officers to execute and deliver any such documents, instruments and papers and to take any such other action shall be conclusively evidenced by their execution and delivery thereof or their taking thereof.

The undersigned, by affixing their signatures hereto, do hereby consent to, authorize and approve the foregoing actions in their capacity as a majority of the direction of HDS International Corp.


Dated: 04/15/2015




By:
PAUL RAUNER
Name:
Paul Rauner
Title:
Chief Executive Office







CONVERSION NOTICE


The undersigned hereby elects to convert the attached Convertible Note into free trading shares of common stock (the "Common Stock"), of HDS International Corp. (the "Company") according to the conditions hereof, as of the date written below. No fee will be charged to the holder for any conversion, except for such transfer taxes, if any.

Conversion request:

_______________________
Date to Effect Conversion

                                                      
_______________________
Number of FREE-trading shares of Common Stock to be Issued


                                                      
_______________________
Principal Amount Converted


This Note, including interest and principal, shall be convertible into shares of Common Stock at a discount of 50% off the average of the three lowest closing bid prices during the prior 20 trading days to each conversion.

Applicable Conversion Price:

                                                      
_______________________
Principal Amount Remaining


WE HEREIN CERTIFY that HGT Capital does not and will not own more than 9.99% or more of the Company's Common Stock after the above conversion.

HGT Capital, LLC



By: ___________________________
       Sylvester Gbewonyo Jr

Certificate can be registered to:

HGT Capital, LLC.






INVESTOR'S NON-AFFILIATE LETTER



April 15, 2015


RE:              HDS International Corp. ("Company") and HGT CAPITAL, LLC ("Investor")

To Whom It May Concern:

This letter is to confirm to you that I, HGT CAPITAL, LLC, am not now, and have not been during the preceding 90 days, an officer, director, 9.99% or more shareholder of the Company, or in any other way an "affiliate" of the Company (as that term is defined in Rule 144(a)(l) of the Securities Act of 1933). This representation includes any conversion or exchange rights to equity in the Company, if any, that I may own or did own during the preceding 90 days, and that the exercise of same, will not cause me to become an "affiliate" of the Company.

Sincerely,

HGT CAPITAL, LLC



SYLVESTER GBEWONYO JR______
Sylvester Gbewonyo Jr
Managing Partner









DISBURSEMENT REQUEST


HGT CAPITAL, LLC hereby request disbursement of funds in the amount and manner described below.


Please disburse to:
HDS INTERNATIONAL CORP.
 
9272 Olive Road
 
St Louis, MO 63132


Amount to disburse:
$47,500.00
Form of distribution:
Wire Payee:
     
 
Bank Name:
Triad Bank
 
Bank Address:
10375 Clayton Road, St Louis, MO 63131
 
Bank Phone #:
314.993.4333
 
Bank Fax #:
314.993.4334
 
ABA:
*****
 
SWIFT CODE:
*****
 
Account #:
*****





Total: $47,500.00



HDS International Corp.
     
         
         
         
By:
PAUL RAUNER
 
Dated:
April 15, 2015
 
Name:
Paul Rauner
     
 
Title:
Chief Executive
     


HGT Capital, LLC
     
         
     
Dated:
April 15, 2015
         
By:
SYLVESTER GBEWONYO JR
     
 
Name:
Sylvester Gbewonyo Jr
     
 
Title:
Managing Partner
     


*****                          Account information omitted.




EXHIBIT A

****** ORIGINAL PROMISSORY NOTE ATTACHED*****
















 
Exhibit 10.3

THIS WARRANT AND ANY SHARES OF COMMON STOCK ISSUED UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE AFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.



HDS INTERNATIONAL CORP.



WARRANT TO PURCHASE 100,000,000 SHARES
(SUBJECT TO ADJUSTMENT)
OF COMMON STOCK
(Void after April 14, 2020)





This certifies that for value HGT CAPITAL LLC, or registered assigns ("Holder"), is entitled, subject to the terms set forth below, at any time from and after April 15, 2015 (the "Original Issuance Date") and before 5:00 p.m., Eastern Time, on April 15, 2020, to purchase from HDS International Corp., Inc., a Nevada state corporation (the "Company"), 100,000,000 shares (subject to adjustment as described herein), of common stock (the "Common Stock") of the Company, as constituted on the Original Issuance Date, upon surrender hereof, at the principal office of the Company referred to below, with a duly executed subscription form in the form attached hereto as Exhibit A and simultaneous payment therefor in lawful money of the United States or otherwise as hereinafter provided, at the exercise price per share equal to $.001  per share, as may be adjusted as provided elsewhere herein (the "Purchase Price"). Term "Common Stock" shall include, unless the context otherwise requires, the stock and other securities and property at the time receivable upon the exercise of this Warrant. The term "Warrants" as used herein shall include this Warrant and any warrants delivered in substitution or exchange therefor as provided herein. This Warrant was issued to the Holders in connection with the sale by the Company to the Holder of the Company's Original Convertible Note dated April 15, 2015 in the aggregate principal amount of $100,000 (the "Note").



 


1.            Exercise.  The Holder, at its option, may exercise this Warrant at any time or from time to time and after the Original Issuance Date and before 5:00 p.m., Eastern Time, on April 14, 2020, on any business day in a cashless exercise transaction. In order to effect a Cashless Exercise, the Holder shall surrender this Warrant at the principal office of the Company at 972 Olive Boulevard, St. Louis, MO 63132, together with Subscription Form, completed and executed, indicating Holders election to effect a Cashless Exercise, in which event the Company shall issue Holder a number of shares of Common Stock equal to:

X = Y (A-B)/A

where:
X= the number of shares of Common Stock to be issued to Holder.
   
 
Y=the number of shares of Common Stock purchasable under this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.
   
 
B = the exercise price of this Warrant as adjusted hereunder; and
   
 
A = the VWAP of the trading day immediately preceding the date on which Holder elects to exercise this Warrant by means of a "cashless exercise" as set forth in the applicable Notice of Exercise.


The Company represents, warrants and covenants that it shall reserve for issuance that number of shares of Common Stock equal to 100% of the shares of Common Stock issuable upon exercise of this Warrant within 90 days of the execution of this Agreement.


A.     "Fair Market Value" shall mean, as of any date, (i) if shares of the Common Stock are listed on a national securities exchange, the average of the closing prices as reported for composite transactions during the ten (10) consecutive trading days preceding the trading day immediately prior to such date or, if no sale occurred on a trading day, then the mean between the closing bid and asked prices on such exchange on such trading day; (ii) if shares of the Common Stock are not so listed but are traded on the Nasdaq SmallCap Market www.nasdaq.com  ("NSCM"), the average of the closing prices as reported on the NSCM during the ten (10) consecutive trading days preceding the trading day immediately prior to such date or, if no sale occurred on a trading day, then the mean between the highest bid and lowest asked prices as of the close of business on such trading day, as reported on the NSCM; or if applicable, the Nasdaq National Market ("NNM"), or if not then included for quotation on the  NNM or NSCM, the average of the highest reported bid and lowest reported asked prices as reported by the OTC Bulletin Board or the National Quotations Bureau, as the case may be, or (iii) if the shares of the Common Stock are not then publicly traded, the fair market price, not less than book value thereof, of the Common Stock as determined in good faith by the Holder.
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2.            Shares Fully Paid; Payment of Taxes. All shares of Common Stock issued upon the exercise of a Warrant shall be validly issued, fully paid and non-assessable, and the Company shall pay all taxes and other governmental charges (other than income taxes to the holder) that may be imposed in respect of the issue or delivery thereof.

3.            Transfer and Exchange. This Warrant and all rights hereunder are transferable, in whole or in part, on the books of the Company maintained for such purpose at its principal office referred to above by Holder in person or by duly authorized attorney, upon surrender of this Warrant together with a completed and executed assignment form in the form attached as Exhibit B, payment of any necessary transfer tax or other governmental charge imposed upon such transfer and an opinion of counsel reasonably acceptable the Company stating that such transfer is exempt from the registration requirements of the Securities Act of 1933, as amended. Upon any partial transfer, the Company will issue and deliver to Holder a new Warrant or Warrants with respect to the shares of Common Stock not so transferred. Each taker and holder of this Warrant, by taking or holding the same, consents and agrees that this Warrant when endorsed in blank shall be deemed negotiable and that when this Warrant shall have been so endorsed, the holder hereof may be treated by the Company and all other persons dealing with this Warrant as the absolute owner hereof for any purpose and as the person entitled to exercise the rights represented hereby, or to the transfer hereof on the books of the Company, any notice to the contrary notwithstanding; but until such transfer on such books, the Company may treat the registered Holder hereof as the owner for all purposes.

This Warrant is exchangeable at such office for Warrants for the same aggregate number of shares of Common Stock, each new Warrant to represent the right to purchase such number of shares as the Holder shall designate at the time of such exchange.

4.            Anti‑Dilution Provisions.

A.                     Adjustment for Dividends in Other Stock and Property Reclassifications. In case at any time or from time to time the holders of the Common Stock (or any shares of stock or other securities at the time receivable upon the exercise of this Warrant) shall have received, or, on or after the record date fixed for the determination of eligible shareholders, shall have become entitled to receive, without payment therefor,

(1)            other or additional stock or other securities or property (other than cash) by way of dividend,

(2)            any cash or other property paid or payable out of any source other than retained earnings (determined in accordance with generally accepted accounting principles), or

(3)            other or additional stock or other securities or property (including cash) by way of stock-split, spin-off, reclassification, combination of shares or similar corporate rearrangement, (other than (x) additional shares of Common Stock or any other stock or securities into which such Common Stock shall have been changed, (y) any other stock or securities convertible into or exchangeable for such Common Stock or such other stock or securities or (z) any Stock Purchase Rights (as defined below), issued as a stock dividend or

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stock-split, adjustments in respect of which shall be covered by the terms of Section 4, then and in each such case Holder, upon the exercise hereof as provided in Section 1, shall be entitled to receive the amount of stock and other securities and property (including cash in the cases referred to in clauses (2) and (3) above) which such Holder would hold on the date of such exercise if on the Original Issuance Date Holder had been the holder of record of the number of shares of Common Stock called for on the face of this Warrant, as adjusted in accordance with the first paragraph of this Warrant, and had thereafter, during the period from the Original Issuance Date to and including the date of such exercise, retained such shares and/or all other or additional stock and other securities and property (including cash in the cases referred to in clause (2) and (3) above) receivable by it as aforesaid during such period, giving effect to all adjustments called for during such period by Section 4.A and Section 4.B.

   B.                       Adjustment for Reorganization, Consolidation and Merger. In case of any reorganization of the Company (or any other corporation the stock or other securities of which are at the time receivable on the exercise of this Warrant) after the Original Issuance Date, or in case, after such date, the Company (or any such other corporation) shall consolidate with or merge into another corporation or entity or convey all or substantially all its assets to another corporation or entity, then and in each such case Holder, upon the exercise hereof as provided in Section 1 at any time after the consummation of such reorganization, consolidation, merger or conveyance, shall be entitled to receive, in lieu of the stock or other securities and property receivable upon the exercise of this Warrant prior to such consummation, the stock or other securities or property to which such Holder would have been entitled upon such consummation if Holder had exercised this Warrant immediately prior thereto, all subject to further adjustment as provided in this Section 4; in each such case, the terms of this Warrant shall be applicable to the shares of stock or other securities or property receivable upon the exercise of this Warrant after such consummation.

C.                     Sale of Shares Below Purchase Price.

(1)            If at any time or from time to time on or after the Original Issuance Date, the Company issues or sells, or is deemed by the express provisions of this Section 4.C to have issued or sold, Additional Shares of Common Stock (as hereinafter defined), other than as a dividend or other distribution on any class of stock or upon a subdivision or combination of shares of Common Stock, for an Effective Price (as hereinafter defined) less than the then existing Purchase Price, then and in each such case the Purchase Price shall each time be reduced to the Effective Price at the number of shares of Common Stock issuable upon exercise of these Warrants shall be increased proportionally.

(2)            For the purpose of making any adjustment required under this Section 4.C, the consideration received by the Company for any issue or sale of securities shall (i) to the extent it consists of cash be computed at the amount of cash received by the Company, (ii) to the extent it consists of property other than cash, be computed at the fair value of that property as determined in good faith by the Holder, and (iii) if Additional Shares of Common Stock, Convertible Securities (as hereinafter defined) or rights or options to purchase either Additional Shares of Common Stock or Convertible Securities are issued or sold together with other stock or securities or other assets of the Company for a consideration which covers both, be computed as the portion of the consideration so received that may be reasonably determined in
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good faith by the Holder to be allocable to such Additional Shares of Common Stock, Convertible Securities or rights or options.

(3)            For the purpose of the adjustment required under this Section 4.C, if the Company issues or sells any rights or options for the purchase of, or stock or other securities convertible into or exchangeable for, Additional Shares of Common Stock (such convertible or exchangeable stock or securities being hereinafter referred to as "Convertible Securities") and if the Effective Price of such Additional Shares of Common Stock is less than either the Fair Market Value or the Purchase Price then in effect, then in each case the Company shall be deemed to have issued at the time of the issuance of such rights or options or Convertible Securities the maximum number of Additional Shares of Common Stock issuable upon exercise, conversion or exchange thereof and to have received as consideration for the issuance of such shares an amount equal to the total amount of the consideration, if any, received by the Company for the issuance of such rights or options or Convertible Securities, plus, in the case of such rights or options, the minimum amounts of consideration, if any, payable to the Company upon the exercise of such rights or options, plus, in the case of Convertible Securities, the minimum amounts of consideration, if any, payable to the Company (other than by cancellation of liabilities or obligations evidenced by such Convertible Securities) upon the conversion or exchange thereof.

(4)            For the purpose of the adjustment required under this Section 4.C, if the Company issues or sells, or is deemed by the express provisions of this subsection to have issued or sold, any rights or options for the purchase of Convertible Securities and if the Effective Price of the Additional Shares of Common Stock underlying such Convertible Securities is less than either the Fair Market Value or the Purchase Price then in effect, then in each such case the Company shall be deemed to have issued at the time of the issuance of such rights or options the maximum number of Additional Shares of Common Stock issuable upon conversion or exchange of the total amount of Convertible Securities covered by such rights or options and to have received as consideration for the issuance of such Additional Shares of Common Stock an amount equal to the amount of consideration, if any, received by the Company for the issuance of such rights or options, plus the minimum amounts of consideration, if any, payable to the Company upon the exercise of such rights or options and plus the minimum amount of consideration, if any, payable to the Company (other than by cancellation of liabilities or obligations evidenced by such Convertible Securities) upon the conversion or exchange of such Convertible Securities.

(5)            "Additional Shares of Common Stock" shall mean all shares of Common Stock issued by the Company on or after the Original Issuance Date, whether or not subsequently reacquired or retired by the Company other than (i) shares of Common Stock issuable upon exercise of this Warrant of the Note and  (ii) shares of Common Stock issuable upon exercise of warrants, options or other convertible securities to purchase Common Stock issued and outstanding as of the Original Issuance Date (provided that the exercise price and other terms of such warrants, options or other convertible securities  are not modified after the Original Issuance Date to adjust the exercise price).  The "Effective Price" of Additional Shares of Common Stock shall mean the quotient determined by dividing the total number of Additional Shares of Common Stock issued or sold, or deemed to have been issued or sold by the Company under this Section 4.C, into the aggregate consideration received, or deemed to have been


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received, by the Company for such issue under this Section 4.C, for such Additional Shares of Common Stock. "Other Securities" with respect to an issue or sale of Additional Shares of Common Stock shall mean Convertible Securities other than the Warrants including this Warrant; "the number of shares of Common Stock underlying Other Securities" on a particular date shall mean the number of shares of Common Stock issuable upon the exercise, conversion or exchange, as the case may be, of such Other Securities at the close of business on such date.

(6)            Other than a reduction pursuant to its applicable anti‑dilution provisions, any reduction in the conversion price of any Convertible Security, whether outstanding on the Original Issuance Date or thereafter, or the subscription price of any option, warrant or right to purchase Common Stock or any Convertible Security (whether such option, warrant or right is outstanding on the Original Issuance Date or thereafter), to an Effective Price less than the Fair Market Value or the then Purchase Price shall be deemed to be an issuance of such Convertible Security and the issuance of all such options, warrants or subscription rights, and the provisions of Sections 4.C. shall apply thereto mutatis mutandis.

(7)            In case any shares of stock or other securities, other than Common Stock, shall at the time be receivable upon the exercise of this Warrant, and in case any additional shares of such stock or any additional such securities (or any stock or other securities convertible into or exchangeable for any such stock or securities) shall be issued or sold for a consideration per share such as to dilute the purchase rights evidenced by this Warrant, then and in each such case the Purchase Price shall forthwith be adjusted, substantially in the manner provided for above in this Section 4.C, so as to protect the Holder of this Warrant against the effect of such dilution.

(8)            In case the Company shall take a record of the holders of shares of its stock of any class for the purpose of entitling them (a) to receive a dividend or a distribution payable in Common Stock or in Convertible Securities, or (b) to subscribe for, purchase or otherwise acquire Common Stock or Convertible Securities, then such record date shall be deemed to be the date of the issue or sale of the Additional Shares of Common Stock issued or sold or deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution, or the date of the granting of such rights of subscription, purchase or other acquisition, as the case may be.

   D.                       Adjustment for Certain Dividends and Distributions. If the Company at any time or from time to time makes, or fixes a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable in additional shares of Common Stock, then and in each such event

(1)            the Purchase Price then in effect shall be decreased as of the time of such issuance or, in the event such record date is fixed, as of the close of business on such record date, by multiplying the Purchase Price then in effect by a fraction (A) the numerator of which is the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date, and (B) the denominator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such


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record date as the case may be, plus the number of shares of Common Stock issuable in payment of such dividend or distribution; provided, however, that if such record date is fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixed therefor, the Purchase Price shall be recomputed accordingly as of the close of business on such record date, and thereafter the Purchase Price shall be adjusted pursuant to this Section 4.D as of the time of actual payment of such dividends or distributions; and

(2)            the number of shares of Common Stock theretofore receivable upon the exercise of this Warrant shall be increased, as of the time of such issuance or, in the event such record date is fixed, as of the close of business on such record date, in inverse proportion to the decrease in the Purchase Price.

   E.                       Stock Split and Reverse Stock Split. If the Company at any time or from time to time effects a reverse stock split or subdivision of the outstanding Common Stock, the Purchase Price then in effect immediately before that stock split or subdivision shall be proportionately decreased and the number of shares of Common Stock theretofore receivable upon the exercise of this Warrant shall be proportionately increased. If the Company at any time or from time to time effects a reverse stock split or combines the outstanding shares of Common Stock into a smaller number of shares, the Purchase Price then in effect immediately before that reverse stock split or combination shall be proportionately increased and the number of shares of Common Stock theretofore receivable upon the exercise of this Warrant shall be proportionately decreased. Each adjustment under this Section 4.E shall become effective at the close of business on the date the stock split, subdivision, reverse stock split or combination becomes effective.

   F.                       No Impairment. The Company will not, by amendment of its Amended and Restated Articles of Incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company but will at all times in good faith assist in the carrying out of all the provisions of this Section 4 and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Holders of the Warrants against impairment.

   G.                      Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price pursuant to this Section 4, the Company at its expense shall promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish to each holder of a Warrant a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Company shall, upon the written request at any time of any holder of a Warrant, furnish or cause to be furnished to such holder a like certificate setting forth (i) such adjustments and readjustments, (ii) Purchase Price at the time in effect, and (iii) the number of shares of Common Stock and the amount, if any, of other property which at the time would be received upon the exercise of the Warrant.

   H.                      Adjustment for Certain Events.  If at any time after the Original Issuance Date the share price, of a share of common stock loses the bid (ex: $.01 on the ask with zero


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market makers on the bid on level 2), loses DTC eligibility, and/or gets "chilled for deposit", then the Purchase Price resets to $.00001 if it is not then below $.01.

5.            Notices of Record Date. In case:

A.            the Company shall take a record of the holders of its Common Stock (or other stock or securities at the time receivable upon the exercise of the Warrants) for the purpose of entitling them to receive any dividend or other distribution, or any right to subscribe for or purchase any shares of stock of any class or any other securities, or to receive any other right, or

B.            of any capital reorganization of the Company, any reclassification of the capital stock of the Company, any consolidation or merger of the Company with or into another corporation, or any conveyance of all or substantially all of the assets of the Company to another corporation, or

C.            of any voluntary dissolution, liquidation or winding-up of the Company,
then, and in each such case, the Company will mail or cause to be mailed to each holder of a Warrant at the time outstanding a notice specifying, as the case may be, (a) the date on which a record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character of such dividend, distribution or right, or (b) the date on which such reorganization, reclassification, consolidation, merger, conveyance, dissolution, liquidation or winding-up is expected to take place, and the time, if any is to be fixed, as of which the holders of record of Common Stock (or such stock or securities at the time receivable upon the exercise of the Warrants) shall be entitled to exchange their shares of Common Stock (or such other stock or securities) for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, conveyance, dissolution, liquidation or winding-up, such notice shall be mailed at least twenty (20) days prior to the date therein specified.

6.            Stock Purchase Rights. If at any time or from time to time, the Company grants or issues to the record holders of the Common Stock any options, warrants or subscription rights (collectively, the "Stock Purchase Rights") entitling a holder to purchase Common Stock or any security convertible into or exchangeable for Common Stock or to purchase any other stock or securities of the Company, the Holder shall be entitled to acquire, upon the terms applicable to such Stock Purchase Rights, the aggregate Stock Purchase Rights which Holder could have acquired if Holder had been the record holder of the maximum number of shares of Common Stock issuable upon exercise of this Warrant on both (x) the record date for such grant or issuance of such Stock Purchase Rights, and (y) the date of the grant or issuance of such Stock Purchase Rights.

7.            Loss or Mutilation. Upon receipt by the Company of evidence satisfactory to it (in the exercise of reasonable discretion) of the ownership of and the loss, theft, destruction or mutilation of any Warrant and (in the case of loss, theft or destruction) of indemnity satisfactory to it (in the exercise of reasonable discretion), and (in the case of mutilation) upon surrender and cancellation thereof, the Company will execute and deliver in lieu thereof a new Warrant of like tenor.


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8.            Reservation of Common Stock. Starting six months from execution of this Agreement the Company shall, thereafter, at all times reserve and keep available for issue upon the exercise of Warrants such number of its authorized but unissued shares of Common Stock as will be sufficient to permit the exercise in full of all outstanding Warrants.

9.            No Redemption of Warrant. This Warrant may not be redeemed.

10.        Notices. All notices and other communications from the Company to the Holder of this Warrant shall be mailed by first class, registered or certified mail, postage prepaid, to the address furnished to the Company in writing by the last holder of this Warrant who shall have furnished an address to the Company in writing.

11.        Change; Modifications; Waiver. The terms of this Warrant may only be amended, waived and or modified by written agreement of the Company and the Holder

12.        Headings. The headings in this Warrant are for purposes of convenience in reference only, and shall not be deemed to constitute a part hereof.

[Remainder of page intentionally left blank]







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13.            Law; Etc. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York without regard to the conflicts of laws principles thereof. The parties hereto hereby irrevocably agree that any suit or proceeding arising directly and/or indirectly pursuant to or under this Agreement, shall be brought solely in a federal or state court located in the City, County and State of New York. By its execution hereof, the parties hereby covenant and irrevocably submit to the in personam jurisdiction of the federal and state courts located in the City, County and State of New York and agree that any process in any such action may be served upon any of them personally, or by certified mail or registered mail upon them or their agent, return receipt requested, with the same full force and effect as if personally served upon them in New York City. The parties hereto waive any claim that any such jurisdiction is not a convenient forum for any such suit or proceeding and any defense or lack of in personam jurisdiction with respect thereto. In the event of any such action or proceeding, the party prevailing therein shall be entitled to payment from the other party hereto of its reasonable counsel fees and disbursements.

Dated:
15 April 2015
   
   
 
HDS INTERNATIONAL CORP.
       
       
   
By:
PAUL RAUNER
   
Name:
Paul Rauner
   
Title:
Chief Executive









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EXHIBIT A

SUBSCRIPTION FORM

(To be executed only upon exercise of Warrant)

The undersigned registered owner of this Warrant irrevocably exercises this Warrant and purchases _______ of the number of shares of Common Stock of HDS International Corp., purchasable with this Warrant, and herewith makes payment therefor, all at the price and on the terms and conditions specified in this Warrant.


Dated:
     
       
       
       
       
     
(Signature of Registered Owner)
       
       
       
     
(Street Address)
       
       
       
     
(City / State / Zip Code)












EXHIBIT B

FORM OF ASSIGNMENT



FOR VALUE RECEIVED the undersigned registered owner of this Warrant hereby sells, assigns and transfers unto the Assignee named below all of the rights of the undersigned under the within Warrant, with respect to the number of shares of Common Stock set forth below:

Name of Assignee
Address
No. of Shares



and does hereby irrevocably constitute and appoint __________________________ Attorney to make such transfer on the books of HDS International Corp., maintained for the purpose, with full power of substitution in the premises.


Dated:
     
       
       
       
     
(Signature)
       
       
     
(Witness)


The undersigned Assignee of the Warrant hereby makes to HDS International Corp., Inc., as of the date hereof, with respect to the Assignee, all of the representations and warranties made by the Holder, and the undersigned Assignee agrees to be bound by all the terms and conditions of the Warrant, dated April 14, 2015 of HDS International Corp.


Dated:
     
       
       
       
     
(Signature)



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