Exhibit 10.1

NONE OF THE SECURITIES TO WHICH THIS SUBSCRIPTION AGREEMENT RELATES HAVE BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE “U.S. SECURITIES
ACT”), OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY BE
OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR TO U.S. PERSONS
(AS DEFINED HEREIN) EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S
UNDER THE U.S. SECURITIES ACT, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE U.S. SECURITIES ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN
A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE U.S.
SECURITIES ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS.  IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY
NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE U.S. SECURITIES ACT.

 

SUBSCRIPTION AGREEMENT OF COOL HOLDINGS, INC.

TO:

Cool Holdings, Inc. (the “Company”)

Purchase of securities of the Company are subject to the terms and conditions
contained in this Subscription Agreement (the “Subscription Agreement”),
including the terms and conditions set forth in Schedule “A” hereto.  The
Purchaser hereby irrevocably subscribes for and on Closing will purchase from
the Company the aggregate amount of unsecured convertible notes (the “Notes”)
and warrants (the “Warrants” and together with the Notes the “Purchased
Securities”) of the Company set forth below.  The Notes when issued will be
unsecured obligations of the Company, convertible into common shares (the
“Conversion Shares”) of the Company beginning on the date that is six-months
following their issuance at a conversion price of USD$4.40.  The Notes will
carry a one-year term. One-half common-share purchase warrant shall be issued
for each Conversion Share issuable under the Notes.  Warrants shall have a
36-month term and shall be exercisable beginning on the date that is six-months
following their issuance at an exercise price of USD$4.40.

 

(Name of Purchaser - please print)

 

Aggregate amount of Notes:

Aggregate Number of Warrants: ________________

 

 

 

By:
(Authorized Signature)

 

Aggregate Subscription Price: USD$

(Official Capacity or Title – please print)

 

If the Purchaser is signing as agent for a principal and the Purchaser is not a
trust company or a portfolio manager, in either case, purchasing as trustee or
agent for accounts fully managed by it, complete the following:

(Please print name of individual whose signature appears above if different than
the name of the Purchaser printed above.)

 

 

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(Purchaser’s Address)

 

(Telephone Number)

(Fax Number)

 

(Name of Principal)

 

(Principal’s Address)

 

 

 

 

 

 

 

 

Register the Securities as set forth below:

(Name)

 

Deliver the Securities as set forth below:

(Name)

(Account reference, if applicable)

 

(Account reference, if applicable)

(Purchaser’s Address)

 

 

 

 

 

(Contact Name)

(Address)

 

 

 

 

(Telephone Number)

 

Additional Forms:  

U.S. Purchasers (as defined herein)

Non-U.S. Purchasers

Please complete the attached IRS form W-9

Please complete the attached IRS form W-8BEN

 

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The Purchased Securities subscribed for hereunder are hereinafter also referred
to as the “Purchased Securities”.  Unless otherwise noted, all dollar amounts
referred to in this Subscription Agreement are in U.S. dollars.

TERMS NOT EXPRESSLY DEFINED HEREIN HAVE THE MEANING ASCRIBED THERETO IN THE
AGREEMENT UNLESS THE CONTEXT REQUIRES OTHERWISE.

ACCEPTANCE: The Company hereby accepts the above subscription this _____ day of
November, 2018.

 

 

COOL HOLDINGS, INC.

 

 

 

 

 

 

 

Per:

 

 

 

Vernon A. LoForti

Vice President & Secretary

 

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SCHEDULE “A”

TERMS AND CONDITIONS OF
SUBSCRIPTION FOR NOTES AND WARRANTS
OF COOL HOLDINGS, INC.

1.

Certain terms and abbreviations used in this Agreement shall have the meaning
given below

 

(a)

“Offering” means the offering of the Notes and the Warrants.

2.

Acknowledgements and Agreements re: Hold Periods, Resale Restrictions and
Offering

The Purchaser understands and acknowledges the following:

 

(a)

the Purchaser has been advised to consult its own legal advisers in connection
with the applicable statutory hold periods and resale restrictions relating to
the Purchased Securities and no representation has been made respecting
applicable statutory hold periods or resale restrictions relating to such
securities;

 

(b)

the Purchaser understands that none of the Purchased Securities nor the
securities issuable upon conversion or exercise thereof have been registered
under the United States Securities Act of 1933, as amended (the “U.S. Securities
Act”) or any applicable state securities laws and that the Company does not
intend to register same under the U.S. Securities Act, or the securities laws of
any such state and has no obligation to do so.  None of the Purchased Securities
nor any of the securities issuable upon conversion or exercise thereof may be
offered or sold absent such registration or an available exemption from such
registration requirements;

 

(c)

upon the issuance of the Purchased Securities and the securities issuable upon
conversion or exercise thereof, the certificates representing such securities
(and any replacement certificate issued prior to the expiry of the applicable
hold period) will, if required by applicable laws, bear the following legend in
accordance with such legal requirements:

“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES
ACT”).  THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
ONLY (A) TO THE COMPANY, (B) IF THE SECURITIES HAVE BEEN REGISTERED IN
COMPLIANCE WITH THE REGISTRATION REQUIREMENTS UNDER THE U.S. SECURITIES ACT AND
IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, (C) IN COMPLIANCE WITH THE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE U.S. SECURITIES ACT IN
ACCORDANCE WITH RULE 144 THEREUNDER, IF APPLICABLE, AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS, OR (D) IN A TRANSACTION THAT DOES NOT REQUIRE
REGISTRATION UNDER THE U.S. SECURITIES ACT OR ANY APPLICABLE STATE LAWS AND
REGULATIONS GOVERNING THE OFFER AND SALE OF SECURITIES, AND THE HOLDER HAS,
PRIOR TO SUCH SALE, FURNISHED TO THE COMPANY AN OPINION OF COUNSEL OF RECOGNIZED
STANDING, OR OTHER EVIDENCE

 

 

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OF EXEMPTION, REASONABLY SATISFACTORY TO THE COMPANY.  HEDGING TRANSACTIONS
INVOLVING THE SECURITIES REPRESENTED HEREBY MAY NOT BE CONDUCTED UNLESS IN
COMPLIANCE WITH U.S. SECURITIES LAWS.”

if the certificates representing the Purchased Securities have been held for a
period of at least six months and if Rule 144 under the U.S. Securities Act is
applicable (there being no representations by the Company that Rule 144 is
applicable), then the undersigned may make sales of the Purchased Securities or
the securities issuable upon the exercise or conversion thereof only under the
terms and conditions prescribed by Rule 144 of the U.S. Securities Act or other
exemptions therefrom;

 

(d)

in addition to the legend set forth in Section 2(c) above, all Warrant
certificates and each Warrant certificate issued in exchange therefor or in
substitution thereof shall bear the following legend`s or such variations
thereof as the Company may prescribe from time to time:

“THESE WARRANTS MAY NOT BE EXERCISED IN THE UNITED STATES OR BY OR ON BEHALF OF,
OR FOR THE ACCOUNT OR BENEFIT OF, A U.S. PERSON UNLESS THIS SECURITY AND THE
COMMON SHARES ISSUABLE UPON EXERCISE OF THIS SECURITY HAVE BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT AND THE APPLICABLE STATE SECURITIES LEGISLATION OR AN
EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS IS AVAILABLE. “UNITED STATES” AND
“U.S. PERSON” ARE AS DEFINED BY REGULATION S UNDER THE U.S. SECURITIES ACT.”;

 

(e)

the Purchaser acknowledges that if the Company is deemed to be a “shell company”
as that term is defined under the U.S. Securities Act, Rule 144 of the U.S.
Securities Act may not be available for resales of the Purchased Securities nor
the securities issuable upon conversion or exercise thereof;

 

(f)

the Purchaser consents to the Company making a notation on its records or giving
instruction to the registrar and transfer agent of the Company in order to
implement the restrictions on transfer set forth and described herein;

 

(g)

the Purchaser is solely responsible (and the Company is not in any way
responsible) for compliance with applicable hold periods and resale
restrictions, including without limitation the filing of any documentation and,
if applicable, the payment of any fees with any applicable securities regulatory
authority, and that the Purchaser is aware that it, and (if applicable) such
others, may not be able to resell the Purchased Securities nor the securities
issuable upon conversion or exercise thereof, except in accordance with limited
exceptions under applicable securities legislation and regulatory policy and it
will not sell, resell or otherwise transfer the Purchased Securities not the
securities issuable upon the exercise or conversion thereof, except in
compliance with applicable laws; and

 

(h)

the Purchased Securities are being acquired as part of the Offering.

 

 

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3.

Delivery and Payment

The Purchaser agrees that the following must be delivered to the Company, care
of Dorsey & Whitney LLP, Suite 4310, 161 Bay Street, Toronto, Ontario M5J 2S1,
Attention:  Richard Raymer, email raymer.richard@dorsey.com, fax number
416-865-6636, not later than 10:00 a.m. (Toronto time) on the date that is one
day prior to the Closing Date:

 

(a)

all other documentation as may be required by applicable securities legislation;

 

(b)

a wire transfer made payable to and directed as set forth in Schedule “B”
representing the aggregate purchase price payable by the Purchaser for the
Purchased Securities, unless other payment arrangements acceptable to the
Company have been made. For details concerning the payment procedure, please see
Schedule “B”;

 

(c)

one completed and duly signed copy of this Subscription Agreement;

 

(d)

if the Purchaser is a Canadian accredited investor, one completed and duly
signed copy of the certification in the form of Schedule “C” hereto including
Appendix A and Appendix B thereto from the Purchaser and, if the Purchaser is
contracting hereunder as agent for one or more other purchasers, from each such
other purchaser including all exhibits thereto;

 

(e)

if the Purchaser is a purchaser resident of the securities legislation of a
jurisdiction other than the United States or Canada, one completed and duly
signed copy of the certification in the form of Schedule “D” hereto from the
Purchaser and, if the Purchaser is contracting hereunder as agent for one or
more purchasers, from each such other purchaser including all exhibits thereto;

 

(f)

if the Purchaser is a U.S. Purchaser (as defined herein), one completed and duly
signed copy of the U.S. Accredited Investor Certificate attached hereto as
Schedule “E”; and

 

(g)

such other documents as may be required pursuant to terms of this Subscription
Agreement.

4.

Closing

 

(a)

Delivery of and payment for the Purchased Securities (the “Closing”) will be
completed at the offices of Dorsey & Whitney LLP, at 10:00 a.m. (Toronto time)
(the “Time of Closing”) on the Closing Date which shall be the date so
determined by the Company and on subsequent dates as determined by the Company
(each, a “Closing Date” for the purposes of this Subscription Agreement) or such
earlier or later date or time as may be determined by the Company and Purchaser
provided that the Company has determined to proceed with a Closing.

 

(b)

This subscription is subject to acceptance by the Company as described below.
Unless other arrangements have been made with the Company, certificates endorsed
by the Company representing the Purchased Securities will be available for
delivery to the Purchaser in Toronto, Ontario, at the Time of Closing against
payment of the aggregate purchase price for the Purchased Securities. If the
Purchaser chooses not to attend the Closing to receive the certificates
evidencing the Purchased Securities, then the Company will deliver such
certificates to the Purchaser to the address set out for delivery on page 2 of
this Subscription Agreement promptly after the Closing.

 

 

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(c)

The Company’s obligation to complete the purchase and sale of the Purchased
Securities shall be subject to the following conditions:

 

(i)

the Purchaser shall have complied with the requirements of Section 3 and the
applicable documents and payment shall have been received as contemplated;

 

(ii)

the representations and warranties made by the Purchaser in this Subscription
Agreement (including its Schedules) shall be true and correct as of the date
when made and as of the Closing Date as though made at that time (except for
representations and warranties that speak as of a specific date) and the
undertakings of the Purchaser shall have been performed, satisfied and complied
with on or before the Closing Date; and

 

(iii)

receipt of such other documents relating to the transactions contemplated by
this Subscription Agreement as the Company or its counsel may reasonably
request.

 

(d)

The Purchaser’s obligation to complete the purchase and sale of the Purchased
Securities shall be subject to the following conditions:

 

(i)

the representations and warranties made by the Company in this Subscription
Agreement shall be true and correct as of the Closing Date (except for
representations and warranties that speak as of a specific date) and the
covenants of the Company shall have been performed, satisfied and complied with,
where applicable, on or before the Closing Date;

the Company shall have delivered to the Purchaser the following items:

(ii)the Company shall have delivered to the Purchaser the following items:

 

(A)

a copy of the certificates representing the Purchased Securities purchased by
the Purchaser registered in the name of the Purchaser or its nominee; and

 

(B)

a copy of this Subscription Agreement duly executed by the Company.

5.

Offering

The Purchaser acknowledges (on its own behalf and, if applicable, on behalf of
each person on whose behalf the Purchaser is contracting) that the Purchased
Securities subscribed for by it hereunder form part of a larger Offering by the
Company.

 

 

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6.

Acceptance of Subscription

This subscription may be accepted or rejected in whole or in part and the right
is reserved to the Company to allot to any purchaser less than the amount of
Purchased Securities subscribed for. Confirmation of acceptance or rejection of
this subscription will be forwarded to the Purchaser promptly after the
acceptance or rejection of this subscription by the Company. If this
subscription is rejected in whole, the Purchaser understands that any certified
cheques or bank drafts delivered by the Purchaser to the Company representing
the purchase price for the Purchased Securities will be promptly returned to the
Purchaser without interest or deduction. If this subscription is accepted only
in part, the Purchaser understands that a cheque representing the portion of the
purchase price for that portion of its subscription for Purchased Securities
which is not accepted will be promptly delivered to the Purchaser, without
interest or deduction.

7.

Acknowledgements re: Prospectus Exemptions, etc.

The Purchaser, if resident in Canadian, acknowledges and agrees that the sale of
the Purchased Securities to the Purchaser is conditional upon, among other
things, such sale being exempt from the prospectus filing requirements and the
requirements for the delivery of an offering memorandum (as defined in any
applicable Canadian securities legislation) of all applicable securities
legislation relating to such sale or upon the issuance of such rulings, orders,
consents or approvals as may be required to permit such sale without the
requirement of filing a prospectus or delivering an offering memorandum.

The Purchaser acknowledges and agrees that:

 

(a)

the Purchaser has not received, requested or been provided with, nor has any
need to receive, a prospectus, offering memorandum (as defined in any applicable
Canadian securities legislation) or similar disclosure document relating to the
Offering and/or the business and affairs of the Company and that the decision to
enter into this Subscription Agreement and purchase the Purchased Securities has
not been based upon any verbal or written representation as to fact or otherwise
made by or on behalf of the Company or any officer, director, employee or agent
of the Company and that such decision is based entirely upon the information set
out in the this Subscription Agreement;

 

(b)

there has not been any advertisement of the Purchased Securities in printed
public media, radio, television or telecommunications, including electronic
display such as the Internet or any seminar or meeting whose attendees have been
invited by general solicitation or general advertising;

 

(c)

no agency, governmental authority, regulatory body, stock exchange or other
entity has made any finding or determination as to the merit for investment of,
nor have any such agencies or governmental authorities made any recommendation
or endorsement with respect to the Purchased Securities;

 

(d)

no prospectus has been filed by the Company with a securities commission or
other securities regulatory authority in any province of Canada or any other
jurisdiction in connection with the issuance of the Purchased Securities and
such issuances are exempt from the prospectus requirements otherwise applicable
under the provisions of Canadian securities laws and, as a result, in connection
with our purchase of the Purchased Securities hereunder:

 

(i)

the Purchaser is restricted from using most of the civil remedies available
under securities laws;

 

 

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(ii)

the Purchaser will not receive information that would otherwise be required to
be provided to the Purchaser under applicable securities laws or contained in a
prospectus prepared in accordance with applicable securities laws; and

 

(iii)

the Company is relieved from certain obligations that would otherwise apply
under such applicable securities laws;

 

(e)

the Purchased Securities are being offered for sale only on a “private
placement” basis;

 

(f)

the Purchaser shall:

 

(i)

not sell, transfer, hypothecate or otherwise dispose of any Purchased Securities
or any of the securities issuable upon conversion or exercise thereof, except in
compliance with the requirements of  all applicable securities laws (and, in
particular, will not resell such securities in Canada except in accordance with
the applicable securities laws, regulations and rules of, and the blanket
rulings and policies and written interpretations of, any multi-lateral or
national instruments adopted by, any provincial securities regulatory
authority); and

 

(ii)

if, during the applicable “hold period”, the Purchaser or such beneficial
purchaser, as the case may be, sells, transfers, hypothecates or otherwise
disposes of any Purchased Securities or any of the securities issuable upon
conversion or exercise thereof to a person other than a resident of Canada, the
Purchaser or such beneficial purchaser, as the case may be, agrees to obtain
from such purchaser a covenant in the same form as provided in subparagraph
7(f)(i) and representations, warranties and covenants in the same form as
provided in Section 9 and shall comply with such other requirements as the
Company may reasonably require; and

 

(g)

Stikeman Elliott LLP is acting as Canadian counsel to the Company and Dorsey &
Whitney LLP is acting as U.S. counsel to the Company and neither is acting as
counsel to the Purchasers of the Purchased Securities.

 

(h)

The Company has no present intention of becoming a reporting issuer in any
jurisdiction in Canada and therefore the Purchased Securities or any of the
securities issuable upon conversion or exercise thereof will be subject to an
indefinite hold period and the Purchaser may not be able to resell the Purchased
Securities except in accordance with limited exemptions under applicable
securities laws.

The Purchaser acknowledges that the Company may be required to provide
applicable securities regulatory authorities with a report or list setting forth
information about the beneficial purchasers of the Purchased Securities
containing certain personal information about the Purchaser.  Any report or list
will include, among other information, the full name, residential or business
address and telephone number of the Purchaser, the number and type of Purchased
Securities purchased, the total purchase price expressed in Canadian dollars,
the prospectus exemption under applicable Canadian securities laws relied upon
by the Company to distribute the Purchased Securities to the Purchaser and the
date of the distribution. The Purchaser authorizes the indirect collection of
the information described in this section by all applicable securities
regulatory authorities and stock exchanges and consents to the disclosure of
such information to the public through the filing of a list or report of trade
with all applicable securities regulatory authorities or stock exchanges. The
Purchaser agrees to provide the Company upon request with any information
concerning the Purchaser and its investment in the Purchased Securities
necessary to enable the Company to make any reports or other filings that they
may be required to make under applicable law, or to assist the

 

 

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Company in determining the availability to them of exemptions from requirements
under applicable law or their compliance with applicable law.

8.

Conditions to Closing

The Purchaser acknowledges and agrees that, as the offering of the Purchased
Securities will not be qualified by a prospectus, the offering of the Purchased
Securities is subject to the condition that the Purchaser execute and return to
the Company, all relevant documentation required by this Subscription Agreement,
applicable securities legislation, regulations, rules and policies and
applicable stock exchange rules.

The Purchaser agrees to: (i) provide the Company with such information and
documents, including certificates, statutory declarations and undertakings, as
the Company may reasonably require from time to time to comply with any filing
or other requirements under applicable securities legislation, regulations,
rules and policies and applicable stock exchange rules; and (ii) comply with the
provisions of any applicable securities legislation, regulations, rules and
policies and applicable stock exchange rules concerning any resale of the
Purchased Securities or any of the securities issuable upon conversion or
exercise thereof.

9.

Representations, Warranties and Covenants of the Purchaser

The Purchaser, on its own behalf and on behalf of any underlying beneficial
Purchaser, represents, warrants, certifies and covenants to and with the Company
(and acknowledges that the Company is relying thereon) as follows:

 

(a)

Jurisdiction of Residence – the Purchaser, or others for whom it is contracting
hereunder, is resident or otherwise subject to the applicable securities
legislation in the jurisdiction set out under “Purchaser’s Address” on page 1 of
this Subscription Agreement, and the purchase by and sale to the Purchaser, and
any such others, of the Purchased Securities has occurred only in such
jurisdiction;

 

(b)

Canadian Purchasers –

 

(i)

The Purchaser, on its own behalf and, if the Purchaser is acting as a trustee,
agent, representative, nominee, custodian or in a similar agency capacity for
another person or entity, on behalf of any beneficial owner, the term
“Purchaser” is understood to refer as well to such underlying beneficial;

 

(ii)

The Purchaser is aware that the Purchased Securities are being offered on a
“private placement” basis only in Canada, will be subject to resale restrictions
under applicable Canadian securities laws and are restricted securities in
Canada and, accordingly, any resale of such Purchased Securities will be
required to be made in accordance with prospectus and registration requirements
under applicable Canadian securities laws, pursuant to statutory exemptions from
the prospectus and registration requirements under applicable Canadian
securities law or under a discretionary exemption from the prospectus and
registration requirements under applicable Canadian securities laws granted by
the applicable Canadian securities regulatory authorities;

 

(iii)

No prospectus has been filed with any Canadian securities regulatory authority
in connection with the offering of the Purchased Shares in Canada and no
securities regulatory authority in Canada has made any finding or determination
as to the

 

 

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merits of an investment in the Shares or has otherwise made any recommendation
or endorsement with respect to the Shares;

 

(iv)

The Purchaser is entitled under applicable Canadian securities laws to purchase
the Purchased Securities without the benefit of a prospectus qualified under
such applicable Canadian securities laws and, without limiting the generality of
the foregoing, is an “accredited investor” as such term is defined in section
1.1 of National Instrument 45-106 Prospectus Exemptions (NI 45-106), or, in
Ontario, in section 73.3(1) of the Securities Act (Ontario), as applicable, by
virtue of satisfying the criteria in Schedule “C”.  The Purchaser is not a
person created or used solely to purchase or hold securities as an “accredited
investor” as described in paragraph (m) of the definition of “accredited
investor” in section 1.1 of NI 45-106;

 

(v)

The offer and sale of the Purchased Securities in Canada to the Purchaser was
note made through an advertisement of the Purchased Securities in any printed
media of general and regular paid circulation, radio, television or
telecommunications, including electronic display, or any other form of
advertising in Canada;

 

(vi)

Where required by applicable Canadian securities laws, the Purchaser is
purchasing the Purchased Securities as principal, or is deemed to be investing
as principal in accordance with applicable Canadian securities laws of the
province in which the Purchaser is resident, for its own account and not as
agent for the benefit of another person, and for investment only and not with a
view to resale or distribution; and

 

(vii)

to the best of the Purchaser’s knowledge, none of the funds to be provided by
the Purchaser to the Company are being tendered on behalf of a person or entity
who has not been identified to the Purchaser.

 

(c)

Prospectus Exemptions – if the Purchaser is a resident of any jurisdiction
outside of the United States other Canada and it is purchasing pursuant to an
exemption from prospectus and registration requirements (particulars of which
are enclosed herewith) available to it under applicable securities legislation,
it shall deliver to the Company such further particulars of the exemption(s) and
the Purchaser’s qualifications thereunder as the Company may request including
the execution of the certificate attached hereto as Schedule “D”;

 

(d)

U.S. Purchasers – if the purchaser is a (i) “U.S. person” as defined in
Regulation S under the U.S. Securities Act, which definition includes, but is
not limited to, an individual resident in the United States, an estate or trust
of which any executor or administrator or trustee, respectively, is a “U.S.
person” and any partnership or corporation organized or incorporated under the
laws of the United States (“U.S. Person”), (ii) any person purchasing securities
for the account or benefit of any U.S. Person or any person in the United
States, (iii) any person that receives or received an offer of the securities
while in the United States, or (iv) any person that is in the United States at
the time their buy order was made or this Subscription Agreement was executed or
delivered (collectively, “U.S. Purchasers”), then such U.S. Purchaser has
concurrently executed and delivered the U.S. Accredited Investor Certificate in
the form attached as Schedule “E” to this Subscription Agreement;

 

 

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(e)

No Registration in U.S. – the Purchaser is aware that the Purchased Securities
have not been and will not be registered under the U.S. Securities Act,
understands and agrees that the Purchased Securities are being offered and sold
to the Purchaser in reliance upon applicable exemptions provided under rule 903
of Regulation S under the U.S. Securities Act or Rule 506 of Regulation D and/or
Section 4(a)(2) under the U.S. Securities Act, and acknowledges that these
securities may not be offered or sold in the United States without registration
under the U.S. Securities Act or compliance with requirements of an exemption
from registration;

 

(f)

Not a U.S. Person – unless the Purchaser is a U.S. Purchaser and has completed
and delivered the U.S. Accredited Investor Certificate (Schedule “E” hereto),
the Purchaser, or others for whom it is contracting hereunder, is not a U.S.
Person and is not acquiring the Purchased Securities for the account or benefit
of a U.S. Person or a person in the United States;

 

(g)

No Offering in U.S. – unless the Purchaser is a U.S. Purchaser and has completed
and delivered the U.S. Accredited Investor Certificate (Schedule “E” hereto),
the Purchased Securities have not been offered to the Purchaser, or others for
whom it is contracting hereunder, in the United States, and the individuals
making the order to purchase the Purchased Securities and executing and
delivering this Subscription Agreement on behalf of the Purchaser were not in
the United States when the order was placed and this Subscription Agreement was
executed and delivered;

 

(h)

No Distribution in U.S. – the Purchaser undertakes and agrees that it, or others
for whom it is contracting hereunder, will not offer or sell the Purchased
Securities or any of the securities issuable upon conversion or exercise
thereof, in the United States unless such securities are registered under the
U.S. Securities Act and the securities laws of all applicable states of the
United States or an exemption from such registration requirements is available,
and further that it, or others for whom it is contracting hereunder, will not
resell the Purchased Securities nor any of the securities issuable upon
conversion or exercise thereof, except in accordance with the provisions of
applicable securities legislation, regulations, rules, policies and orders and
stock exchange rules;

 

(i)

No Directed Selling Efforts – the Purchaser is not purchasing the Purchased
Securities nor any of the securities issuable upon conversion or exercise
thereof as the result of any “directed selling efforts”, as that term is defined
in Rule 902(c) of the U.S. Securities Act;

 

(j)

Not A Scheme To Avoid Registration – the current structure of this transaction
and all transactions and activities contemplated hereunder is not a scheme to
avoid the registration requirements of the U.S. Securities Act;

 

(k)

Resale Restrictions – the Purchaser has been independently advised as to and is
aware of the restrictions with respect to the resale and trading in the
Purchased Securities pursuant to the applicable securities laws and any
applicable stock exchanges; furthermore, the Purchaser is not an underwriter and
acquired the Purchased Securities solely for investment for its own account and
not with a view to, or for, resale in connection with any distribution of
securities within the meaning of the U.S. Securities Act; and the Purchased
Securities are not being purchased with a view to or for the resale,
distribution, subdivision or fractionalization thereof; and the undersigned has
no contract, undertaking, understanding, agreement, or arrangement, formal or
informal, with any person to sell, transfer, or pledge to any person the
Purchased Securities for which it hereby subscribes, or any part thereof;

 

 

A-9

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and it understands that the legal consequences of the foregoing representations
and warranties to mean that it must bear the economic risk of the investment for
an indefinite period of time because the Purchased Securities have not been
registered under the U.S. Securities Act, and, therefore, may be resold only if
registered under the U.S. Securities Act or if an exemption from such
registration is available;

 

(l)

Restricted Securities – the Purchased Securities subscribed for herein may not
be transferred, encumbered, sold, hypothecated, or otherwise disposed of to any
person, except in compliance with the U.S. Securities Act and applicable state
securities laws.  The Purchaser acknowledges that the Purchased Securities are
“restricted securities,” as such term is defined under Rule 144 of the U.S.
Securities Act, and may not be offered, sold, transferred, pledged, or
hypothecated to any person in the absence of registration under the U.S.
Securities Act or an opinion of counsel satisfactory to the Company that
registration is not required and in accordance with all applicable state
securities laws.  Without limiting the generality or application of any other
covenants, representations, warranties or acknowledgements of the Purchaser
respecting resale of the Purchased Securities, if the Purchaser decides to
offer, sell or otherwise transfer any of the Purchased Securities, it will not
offer, sell or otherwise transfer any of such securities directly or indirectly,
unless:

 

(i)

the sale is to the Company;

 

(ii)

the sale is made outside the United States in a transaction satisfying the
requirements of Regulation S under the U.S. Securities Act and in compliance
with applicable local laws and regulations;

 

(iii)

the sale is made pursuant to the exemption from the registration requirements
under the U.S. Securities Act provided by Rule 144 thereunder and in accordance
with any applicable state securities laws and the Subscriber has, prior to such
sale, furnished to the Company an opinion of counsel to that effect, which
opinion and counsel shall be reasonably satisfactory to the Company;

 

(iv)

the Purchased Securities are sold in a transaction that does not require
registration under the U.S. Securities Act or any applicable state laws and
regulations governing the offer and sale of the Purchased Securities, and it has
prior to such sale furnished to the Company an opinion of counsel to that
effect, which opinion and counsel shall be  reasonably satisfactory to the
Company; or

 

(v)

the Purchased Securities are registered under the U.S. Securities Act and any
applicable state laws and regulations governing the offer and sale of such
Purchased Securities, and the Purchaser understands that the Company may
instruct its registrar and transfer agent not to record any transfer of the
Purchased Securities without first being notified by the Company that it is
satisfied that such transfer is exempt from or not subject to the registration
requirements of the U.S. Securities Act and applicable state securities laws;

 

(m)

No Obligation To Register – the Purchaser understands that the Company is under
no obligation to register the Purchased Securities or seek an exemption under
the U.S. Securities Act or any applicable state laws for the Securities, or to
cause or permit the Purchased Securities to be transferred in the absence of any
such registration or exemption,

 

 

A-10

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and understands that the Purchaser must hold the Purchased Securities and the
securities issuable upon conversion or exercise thereof indefinitely unless the
Purchased Securities are subsequently registered under U.S. Securities Act and
applicable state securities laws or an exemption from registration is available;

 

(n)

Due Execution and Delivery – the Purchaser is responsible for obtaining such
legal advice as it considers necessary in connection with the execution,
delivery and performance by the Purchaser of this Subscription Agreement and the
transactions contemplated herein and the Purchaser represents and warrants that
such execution, delivery and performance shall not contravene any applicable
laws of the jurisdiction in which the Purchaser, or others for whom it is
contracting hereunder, is resident;

 

(o)

Independent Tax Advice – the Purchaser, or others for whom it is contracting
hereunder, is solely responsible for obtaining such advice concerning the tax
consequences of its investment in the Purchased Securities and it is not relying
on the Company for advice concerning such tax consequences;

 

(p)

Agent Purchasing for Principal(s) – if the Purchaser is contracting hereunder as
agent for one or more other purchasers: (i) each such other purchaser is
purchasing as principal for its own account and not for the benefit of any other
person; and (ii) each of such principals can, and does, make the
representations, warranties and covenants set out in this Section 9 and in
Schedules “C”, “D” or “E”, as applicable, to this Subscription Agreement as are
applicable to such principal by virtue of its jurisdiction of residence or by
virtue of being subject to the applicable securities legislation of such
jurisdiction;

 

(q)

Capacity – if the Purchaser: (i) is an individual, he/she has attained the age
of majority and is legally competent to execute this Subscription Agreement and
to perform all actions required pursuant hereto; or (ii) is a corporation,
partnership, unincorporated association or other entity, it has the legal
capacity and competence to enter into and be bound by this Subscription
Agreement and the Purchaser further certifies that all necessary approvals of
directors, shareholders or otherwise have been given and obtained;

 

(r)

Authority – (i) the Purchaser is not contracting hereunder as agent for one or
more other purchasers; and (ii) the entering into of this Subscription Agreement
and the completion of the transactions contemplated herein will not result in
the violation of any of the terms and provisions of any law applicable to, or
the constating documents of, the Purchaser or of any agreement, written or oral,
to which the Purchaser is a party or by which the Purchaser is bound;

 

(s)

Enforceability – this Subscription Agreement has been duly and validly
authorized, executed and delivered by the Purchaser and, upon acceptance by the
Company this Subscription Agreement will constitute a legal, valid and binding
contract of the Purchaser enforceable against it in accordance with its terms;

 

(t)

No Representation re: Resale, Refund, Future Price or Listing – no person has
made any written or oral representation to the Purchaser:

 

(i)

that any person will resell or repurchase the Purchased Securities nor the
securities issuable upon conversion or exercise thereof;

 

 

A-11

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(ii)

that any person will refund the purchase price of the Purchased Securities other
than as may be provided in this Subscription Agreement;

 

(iii)

relating to the future price or value of the Purchased Securities or

 

(iv)

that the Company will become a reporting issuer in any country, province or
territory or that the Purchased Securities will be listed on any stock exchange;

 

(u)

Investment Experience – the Purchaser, or others for whom it is contracting
hereunder, has knowledge and experience with respect to investments of this type
enabling it to evaluate the merits and risks thereof and the capacity to obtain
competent independent business, legal and tax advice regarding this investment;

 

(v)

Highly Speculative – the Purchaser, or others for whom it is contracting
hereunder, understands that the acquisition of the Purchased Securities is
highly speculative and that the Purchaser may lose the entire amount of its
investment;

 

(w)

Due Diligence – the Purchaser, or others for whom it is contracting hereunder,
is solely responsible for conducting its own due diligence in the affairs of the
Company and it is not relying on any information about the proposed operations
of the Company provided by any third party to make its decision to acquire the
Purchased Securities; and

The Purchaser acknowledges that the foregoing representations and warranties are
made by it with the intent that they may be relied upon in determining its
eligibility to purchase the Purchased Securities under relevant securities
legislation and the Purchaser hereby agrees to indemnify the Company against all
losses, claims, costs, expenses and damages and other liabilities which either
of them may suffer or incur as the result of or arising from the reliance by the
Company on any such representation or warranty. The Purchaser further agrees
that by accepting the Purchased Securities on the Closing Date it shall be
representing and warranting that the foregoing representations and warranties
are true as at the Closing Date, with the same force and effect as if they had
been made by the Purchaser on such date and that they will survive the purchase
by the Purchaser of the Purchased Securities and will continue in full force and
effect notwithstanding any subsequent disposition by the Purchaser of any of the
Purchased Securities.

10.

Representations, Warranties and Covenants of the Company

The Company represents, warrants and covenants to and with the Purchaser on its
own behalf (and acknowledges that the Purchaser is relying thereon) as follows:

 

(a)

the Company is a valid and subsisting limited liability company duly
incorporated and in good standing under the laws of the jurisdictions in which
it is incorporated, continued or amalgamated and has all the requisite corporate
power and capacity to carry on its business as now conducted and as presently
proposed to be conducted by it and to own its assets;

 

(b)

the Company has full power and authority to enter into the Subscription
Agreement and perform its obligations hereunder and do all other acts which may
be necessary to consummate the transaction contemplated hereby;

 

(c)

the Purchased Securities and the securities issuable upon conversion or exercise
thereof to be issued to the Purchaser in accordance with the provisions hereof
will, upon receipt by the Company of the Subscription Price and upon the due
allotment and issuance, be validly issued and outstanding securities of the
Company;

 

 

A-12

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(d)

this Agreement has been duly executed and delivered by the Company and is a
valid agreement enforceable in accordance with its terms and the entering into
of this Agreement and the completion of the transactions contemplated hereby
does not and will not result in a violation of any other terms and provisions of
any indenture or agreement, written or oral, to which the Company may be a party
or the Company's constating documents, operating agreement or any resolutions of
its members or managers;

 

(e)

the Company is licensed, registered or qualified as an extra-provincial or
foreign corporation in all jurisdictions where the character of the property or
assets thereof owned or leased or the nature of the activities conducted by it
make licensing, registration or qualification necessary and is carrying on the
business thereof in compliance with all applicable laws, rules and regulations
of each such jurisdiction;

 

(f)

all necessary action has been taken to authorize the issue and sale of, and the
delivery of certificates representing, the Purchased Securities and, upon
payment of the requisite consideration therefor, the Purchased Securities and
the securities issuable upon conversion or exercise thereof will be validly
issued as fully paid and non-assessable securities;

 

(g)

the Company has complied and will comply fully with the requirements of all
applicable corporate and securities laws and regulations in all matters relating
to the Offering;

 

(h)

there are no judgments against the Company which are unsatisfied, nor are there
any consent decrees or injunctions to which the Company is subject; and

 

(i)

no order ceasing or suspending trading in securities of the Company nor
prohibiting the sale of such securities has been issued to and is outstanding
against the Company or its directors, officers or promoters or against any other
companies that have common directors, officers or promoters and, to the best of
the Company's knowledge, no investigations or proceedings for such purposes are
pending or threatened.

11.

Proceeds of Crime

The Purchaser represents and warrants that the funds representing the purchase
price of the Purchased Securities being subscribed for herein which will be
advanced by the Purchaser to the Company hereunder will not represent proceeds
of crime for the purposes of the Proceeds of Crime (Money Laundering) and
Terrorist Financing Act (Canada) (the “PCMLTFA”) or the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act (the “PATRIOT Act”) and the Purchaser acknowledges that
the Company may in the future be required by law to disclose the Purchaser’s
name and other information relating to this Subscription Agreement and the
Purchaser’s subscription hereunder, on a confidential basis, pursuant to the
PCMLTFA, the PATRIOT Act or similar legislation.  In addition, the Purchaser is
not a person or entity identified on a list established under Part II.1 of the
Criminal Code (Canada) (the “Criminal Code”) or under the Freezing Assets of
Corrupt Foreign Officials Act (Canada) (the “FACFOA”), the Special Economic
Measures Act (Canada) (the “SEMA”), sanctions resolutions and regulations of the
United Nations adopted by Canada under the United Nations Act (Canada)
(collectively, the “UN Sanctions”), the Justice for Victims of Corrupt Foreign
Officials Act (Canada) (the “JVCFOA”), or any regulations in force in the United
States or Canada implementing or amending the foregoing.

To the best of its knowledge: (a) none of the subscription funds to be provided
by the Purchaser (i) have been or will be derived from or related to any
activity that is deemed criminal under the laws of Canada or

 

 

A-13

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the United States of America or any other jurisdiction, or (ii) are being
tendered on behalf of a person or entity who has not been identified to the
Purchaser; and (b) it shall promptly notify the Company if the Purchaser
discovers that any of such representations ceases to be true, and to provide the
Company with appropriate information in connection therewith.  

12.

Survival

This Subscription Agreement, including without limitation the representations,
warranties and covenants contained herein, shall survive and continue in full
force and effect and be binding upon the Company for a period of one (1) year
from the Closing Date notwithstanding the completion of the purchase of the
Purchased Securities.

13.

Governing Law

This Subscription Agreement shall be governed by and construed in accordance
with the laws of the State of Maryland and all federal laws applicable
therein.  The parties hereby irrevocably attorn to the jurisdiction of the
courts of the State of Maryland with respect to any matters arising out of this
Subscription Agreement.

14.

Costs

All costs and expenses (including any fees and disbursements of any legal
counsel) incurred in connection with this Subscription Agreement and the
transactions contemplated therein shall be paid by the party incurring such
expenses.

15.

Assignment

This Subscription Agreement is not transferable or assignable by the parties
hereto, in whole or in part, without the express written consent of the other
party to this Subscription Agreement.

16.

Enurement

This Subscription Agreement will be binding upon and enure to the benefit of the
parties hereto and their respective successors and assigns.

17.

Entire Agreement and Headings

This Subscription Agreement (including the schedules hereto) contains the entire
agreement of the parties hereto relating to the subject matter hereof and there
are no representations, covenants or other agreements relating to the subject
matter hereof except as stated or referred to herein. This Subscription
Agreement may be amended or modified in any respect by written instrument only.
The headings contained herein are for convenience only and shall not effect the
meanings or interpretation hereof.

18.

Time of Essence

Time shall be of the essence of this Subscription Agreement.

19.

Independent Legal Advice

The Purchaser hereby represents and warrants to the Company and acknowledges and
agrees that he/she had the opportunity to seek and was not prevented nor
discouraged by the Company from seeking independent legal advice prior to the
execution and delivery of this Subscription Agreement and that, in the event
that he/she did not avail himself/herself of that opportunity prior to signing
this Subscription

 

 

A-14

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Agreement, he/she did so voluntarily without any undue pressure and agrees that
his/her failure to obtain independent legal advice shall not be used by him/her
as a defence to the enforcement of his/her obligations under this Subscription
Agreement.

20.

Counterparts and Facsimile or Electronic Deliveries

This Subscription Agreement may be executed in one or more counterparts, each of
which counterparts when executed shall constitute an original and all of which
counterparts so executed shall constitute one and the same instrument.  The
Company shall be entitled to rely on delivery of a facsimile or electronic copy
of this Subscription Agreement, including the completed schedules attached
hereto, and acceptance by the Company of any such facsimile or electronic copy
shall be legally effective to create a valid and binding agreement between the
parties hereto in accordance with the terms hereof. Notwithstanding the
foregoing, the Purchaser shall deliver to the Company, at the address specified
in Section 3 hereof, an originally executed copy of this Subscription Agreement,
including the schedules attached hereto, within one day of the Closing Date.

 

 

 

 

A-15

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SCHEDULE “B”

PAYMENT INSTRUCTIONS

The subscription price shall be paid in Canadian currency by bank draft,
certified cheque or wire transfer. Bank drafts and certified cheques should be
made payable to Dorsey & Whitney LLP, in Trust.

If paying by wire transfer to the Company, wire the funds to:

Bank: Silicon Valley Bank

 

Address: 3003 Tasman Drive

Santa Clara, CA 95054

 

 

 

Account Name: InfoSonics Corporation

 

Address: 4445 Eastgate Mall, Suite 200 San Diego, CA 92121

 

 

 

Account No.: 3302419343

 

 

 

Swift Code: SVBKUS6S

 

 

 

 

 

 

 

 

B-1

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SCHEDULE “C”

ACCREDITED INVESTORS

REPRESENTATION LETTER

TO:COOL HOLDINGS, INC. (the “Company”)

In connection with the purchase by the undersigned purchaser (the “Purchaser”)
of the Purchased Securities of the Company (the “Purchased Securities”), the
Purchaser hereby represents, warrants, covenants and certifies to the Company
that:

1.the Purchaser is resident in or is subject to the laws of the province of
(check one):

☐ British Columbia

☐ Alberta

☐ Saskatchewan

☐ Manitoba

☐ Ontario

☐ Québec

☐ New Brunswick

☐ Nova Scotia

☐ Prince Edward Island

☐ Newfoundland and Labrador

 

 

2.the Purchaser is purchasing the Purchased Securities as principal for its own
account;

3.the Purchaser is an “accredited investor” as such term is defined in section
1.1 of National Instrument 45-106 Prospectus Exemptions, or, in Ontario, in
section 73.3(1) of the Securities Act (Ontario), as applicable, by virtue of
satisfying the indicated criteria in Appendix “A” to this Canadian Certificate;

4.the Purchaser has not been provided with any offering memorandum as such term
is defined under applicable Canadian securities laws in connection with the
Purchaser’s investment in the Purchased Securities;

5.the above representations, warranties, covenants and certifications will be
true and correct both as of the execution of this Representation Letter and as
of the Closing Time and will survive the completion of the issuance of the
Purchased Securities; and

5.the foregoing representations, warranties and covenants are made by the
undersigned with the intent that they may be relied upon in determining its
suitability as a purchaser of the of Purchased Securities and the undersigned
agrees to indemnify the Company, and its respective directors and officers
against all losses, claims, costs, expenses and damages or liabilities which any
of them may suffer or incur caused or arising from reliance thereon.  The
undersigned undertakes to immediately notify Dorsey & Witney LLP, Suite 4310,
161 Bay Street, Toronto, Ontario M5J 2S1, Attention:  Richard Raymer, of any
change in any statement or other information relating to the Purchaser set forth
herein which takes place prior to the Closing Time.

 

 

D-1

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All capitalized terms not defined herein shall have the meanings set forth in
the Subscription Agreement to which this exhibit is attached.

Dated:  ___________________, 201___.

 

 

 

Print Name of Purchaser

By:

 

 

Signature

 

Title

IMPORTANT: PLEASE SELECT THE APPLICABLE CRITERIA SET OUT IN
APPENDIX “A” HERETO AND INITIAL ON EACH PAGE.

 

 

C-2

 

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APPENDIX “A”
(TO SCHEDULE “C”)

NOTE:  THE PURCHASER MUST INITIAL BESIDE THE APPLICABLE PORTION OF THE
DEFINITION BELOW.

Accredited Investor (defined in National Instrument 45-106) means:

 

(a)a Canadian financial institution, or a Schedule III bank;

 

(b)the Business Development Bank of Canada incorporated under the Business
Development Bank of Canada Act (Canada);

 

(c)a subsidiary of any person referred to in paragraphs (a) or (b), if the
person owns all of the voting securities of the subsidiary, except the voting
securities required by law to be owned by directors of that subsidiary;

 

(d)a person registered under the securities legislation of a jurisdiction of
Canada as an adviser or dealer;

 

(e)an individual registered or formerly registered under the securities
legislation of a jurisdiction of Canada as a representative of a person referred
to in paragraph (d);

 

(e.1) an individual formerly registered under the securities legislation of a
jurisdiction of Canada, other than an individual formerly registered solely as a
representative of a limited market dealer under one or both of the Securities
Act (Ontario) or the Securities Act (Newfoundland and Labrador);

 

(f)the Government of Canada or a jurisdiction of Canada, or any crown
corporation, agency or wholly owned entity of the Government of Canada or a
jurisdiction of Canada;

 

(g)a municipality, public board or commission in Canada and a metropolitan
community, school board, the Comité de gestion de la taxe scolaire de l’île de
Montréal or an intermunicipal management board in Québec;

 

(h)any national, federal, state, provincial, territorial or municipal government
of or in any foreign jurisdiction, or any agency of that government;

 

(i)a pension fund that is regulated by the Office of the Superintendent of
Financial Institutions (Canada), a pension commission or similar regulatory
authority of a jurisdiction of Canada;

 

(j.1) an individual who beneficially owns financial assets having an aggregate
realizable value that, before taxes but net of any related liabilities, exceeds
$5,000,000;

 

(m)a person, other than an individual or investment fund, that has net assets of
at least $5,000,000 as shown on its most recently prepared financial statements
and that has not been created or used solely to purchase and hold securities as
an accredited investor as defined in this paragraph (m);

 

(n)an investment fund that distributes or has distributed its securities only
to:

 

(i)a person that is or was an accredited investor at the time of the
distribution;

 

(ii)a person that acquires or acquired securities in the circumstances referred
to in sections 2.10 [Minimum amount investment], or 2.19 [Additional investment
in investment funds] of NI 45-106; or

 

(iii)a person described in paragraph (i) or (ii) that acquires or acquired
securities under section 2.18 [Investment fund reinvestment] of NI 45-106;

 

C-3

 

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(o)an investment fund that distributes or has distributed securities under a
prospectus in a jurisdiction of Canada for which the regulator or, in Québec,
the securities regulatory authority, has issued a receipt;

 

(p)a trust company or trust corporation registered or authorized to carry on
business under the Trust and Loan Companies Act (Canada) or under comparable
legislation in a jurisdiction of Canada or a foreign jurisdiction, acting on
behalf of a fully managed account managed by the trust company or trust
corporation, as the case may be;

 

(q)a person acting on behalf of a fully managed account managed by that
person,  if that person is registered or authorized to carry on business as an
adviser or the equivalent under the securities legislation of a jurisdiction of
Canada or a foreign jurisdiction;

 

(r)a registered charity under the Income Tax Act (Canada) that, in regard to the
trade, has obtained advice from an eligibility adviser or an adviser registered
under the securities legislation of the jurisdiction of the registered charity
to give advice on the securities being traded;

 

(s)an entity organized in a foreign jurisdiction that is analogous to any of the
entities referred to in paragraphs (a) to (d) or paragraph (i) in form and
function;

 

(t)a person in respect of which all of the owners of interests, direct, indirect
or beneficial, except the voting securities required by law to be owned by
directors, are persons that are accredited investors;

 

(u)an investment fund that is advised by a person registered as an adviser or a
person that is exempt from registration as an adviser; or

 

(v)a person that is recognized or designated by the securities regulatory
authority or, except in Ontario and Québec, the regulator as an accredited
investor.

 

(w)a trust established by an accredited investor for the benefit of the
accredited investor’s family members of which a majority of the trustees are
accredited investors and all of the beneficiaries are the accredited investor’s
spouse, a former spouse of the accredited investor or a parent, grandparent,
brother, sister, child or grandchild of that accredited investor, of that
accredited investor’s spouse or of that accredited investor’s former spouse.

 

FOR THE PURPOSES HEREOF

(a)

“Canadian financial institution” means:  (i) an association governed by the
Cooperative Credit Associates Act (Canada) or a central cooperative credit
society for which an order has been made under section 473(1) of that Act; or
(ii) a bank, loan corporation, trust company, trust corporation, insurance
company, treasury branch, credit union, caisse populaire, financial services
cooperative, or league that, in each case, is authorized by an enactment of
Canada or a jurisdiction of Canada to carry on business in Canada or a
jurisdiction of Canada;

(b)

“control person” has the same meaning as in securities legislation except in
Manitoba, Newfoundland and Labrador, Northwest Territories, Nova Scotia,
Nunavut, Ontario, Prince Edward Island and Québec, where control person means
any person that holds or is one of a combination of persons that holds: (i) a
sufficient number of any of the securities of an issuer so as to affect
materially the control of the issuer; or (ii) more than 20%of the outstanding
voting securities of an issuer except where there is evidence showing that the
holding of those securities does not affect materially the control of the
issuer;

(c)“eligibility adviser” means:

 

(i)

a person that is registered as an investment dealer or in an equivalent category
of registration under the securities legislation of the jurisdiction of a
purchaser and authorized to give advice with respect to the type of security
being distributed; and

 

C-4

 

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(ii)

in Saskatchewan or Manitoba, also means a lawyer who is a practicing member in
good standing with a law society of a jurisdiction of Canada or a public
accountant who is a member in good standing of an institute or association of
chartered accountants, certified general accountants or certified management
accountants in a jurisdiction of Canada provided that the lawyer or public
accountant must not:

 

1.

have a professional, business or personal relationship with the issuer, or any
of its directors, executive officers, founders, or control persons; and

 

2.

have acted for or been retained personally or otherwise as an employee,
executive officer, director, associate or partner of a person that has acted for
or been retained by the issuer or any of its directors, executive officers,
founders or control persons within the previous 12 months;

(d)

“financial assets” means (i) cash; (ii) securities; or (iii) a contract of
insurance, a deposit or an evidence of a deposit that is not a security for the
purposes of securities legislation;

(e)

“foreign jurisdiction” means a country other than Canada or a political
subdivision of a country other than Canada;

(f)

“fully managed account” means an account of a client for which a person makes
the investment decisions if that person has full discretion to trade in
securities for the account without requiring the client’s express consent to a
transaction;

(g)

“investment fund” has the same meaning as in National Instrument 81-106 –
Investment Fund Continuous Disclosure;

(h)

“jurisdiction” means a province or territory of Canada except when used in the
term foreign jurisdiction;

(i)

“local jurisdiction” means the jurisdiction in which the Canadian securities
regulatory authority is situate;

(j)

“person” includes: (i) an individual; (ii) a corporation; (iii) a partnership,
trust, fund and an association, syndicate, organization or other organized group
of persons, whether incorporated or not; and (iv) an individual or other person
in that person’s capacity as a trustee, executor, administrator or personal or
other legal representative;

(k)

“related liabilities” means: (i) liabilities incurred or assumed for the purpose
of financing the acquisition or ownership of financial assets; or (ii)
liabilities that are secured by financial assets;

(l)

“Schedule III bank” means an authorized foreign bank named in Schedule III of
the Bank Act (Canada); and

(m)

“spouse” means, an individual who:

 

(i)

is married to another individual and is not living separate and apart within the
meaning of the Divorce Act (Canada), from the other individual;

 

(ii)

is living with another individual in a marriage-like relationship, including a
marriage-like relationship between individuals of the same gender; or

 

(iii)

in Alberta, is an individual referred to in paragraph (i) or (ii), or is an
adult interdependent partner within the meaning of the Adult Interdependent
Relationships Act (Alberta).

ALL MONETARY REFERENCES ARE IN CANADIAN DOLLARS.

 

 

C-5

 

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SCHEDULE “D”

CERTIFICATE OF OFFSHORE PURCHASER
ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS
FOR NON-US PURCHASERS
(OTHER THAN CANADIAN PURCHASERS)

The Purchaser, on its own behalf and (if applicable) on behalf of others for
whom it is acting hereunder, further represents, warrants and covenants to and
with COOL HOLDINGS, INC. (the “Company”) (and acknowledges that the Company is
relying thereon) that it is, and (if applicable) any beneficial purchaser for
whom it is acting hereunder is, a resident of, or otherwise subject to, the
securities legislation of a jurisdiction other than the United States or Canada,
and:

(a)the Purchaser is, and (if applicable) any other purchaser for whom it is
acting hereunder, is:

 

(i)

a purchaser that is recognized by the securities regulatory authority in the
jurisdiction in which it is, and (if applicable) any other purchaser for whom it
is acting hereunder is resident or otherwise subject to the securities laws of
such jurisdiction, as an exempt purchaser and is purchasing the Purchased
Securities as principal for its, or (if applicable) each such other purchaser’s,
own account, and not for the benefit of any other person, for investment only
and not with a view to resale or distribution; or

 

(ii)

a purchaser which is purchasing the Purchased Securities pursuant to an
exemption from any prospectus or securities registration requirements
(particulars of which are enclosed herewith) available to the Company, the
Purchaser and any such other purchaser under applicable securities laws of their
jurisdiction of residence or to which the Purchaser and any such other purchaser
are otherwise subject to, and the Purchaser and any such other purchaser shall
deliver to the Company such further particulars of the exemption and their
qualification thereunder as the Company may reasonably request;

(b)

the purchase of the Purchased Securities by the Purchaser, and (if applicable)
each such other purchaser, does not contravene any of the applicable securities
laws in such jurisdiction and does not trigger: (i) any obligation to prepare
and file a prospectus, an offering memorandum or similar document, or any other
ongoing reporting requirements with respect to such purchase or otherwise; or
(ii) any registration or other obligation on the part of the Company; and

(c)

the Purchaser, and (if applicable) any other purchaser for whom it is acting
hereunder will not sell or otherwise dispose of any Purchased Securities except
in accordance with applicable Canadian securities laws, and if the Purchaser, or
(if applicable) such beneficial purchaser sell or otherwise dispose of any
Purchased Securities to a person other than a resident of Canada, the Purchaser,
and (if applicable) such beneficial purchaser, will obtain from such purchaser
representations, warranties and covenants in the same form as provided in this
Schedule “D” and shall comply with such other requirements as the Company may
reasonably require.

DATED at this day of , 201___.

 

 

Name of Purchaser

By:

 

 

Signature

Title:

 

 

 

 

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SCHEDULE “E”

 

U.S. ACCREDITED INVESTOR CERTIFICATE

 

TO:COOL HOLDINGS, INC.

The Purchaser understands and agrees that the Purchased Securities have not been
and will not be registered under the United States Securities Act of 1933, as
amended (the “U.S. Securities Act”), or applicable state securities laws, and
the Purchased Securities are being offered and sold to the Purchaser in reliance
upon Rule 506(b) of Regulation D under the U.S. Securities Act and/or Section
4(a)(2) of the U.S. Securities Act.

Capitalized terms used in this Schedule “E” and defined in the Agreement to
which the Schedule “E” is attached have the meaning defined in the Agreement
unless otherwise defined herein.

The undersigned (the “Purchaser”) represents, warrants and covenants (which
representations, warranties and covenants shall survive the Closing) to the
Company (and acknowledges that the Company is relying thereon) that:

(a)it is purchasing the Purchased Securities for its own account or for the
account of one or more persons for whom it is exercising sole investment
discretion, (a “Beneficial Purchaser”), for investment purposes only and not
with a view to resale or distribution and, in particular, neither it nor any
Beneficial Purchaser for whose account it is purchasing the Purchased Securities
has any intention to distribute either directly or indirectly any of the
Purchased Securities in the United States; provided, however, that this
paragraph shall not restrict the Purchaser from selling or otherwise disposing
of any of the Purchased Securities pursuant to registration thereof pursuant to
the U.S. Securities Act and any applicable state securities laws or under an
exemption from such registration requirements;

 

(b)

it, and if applicable, each Beneficial Purchaser for whose account it is
purchasing the Securities is a an “accredited investor” that satisfies one or
more of the criteria set forth in Rule 501(a) of Regulation D of the U.S.
Securities Act, as indicated below (the Purchaser must initial “SUB” for the
Purchaser, and “BP” for each Beneficial Purchaser, if any, on the appropriate
line(s)):

 

  Category 1.A bank, as defined in Section 3(a)(2) of the U.S. Securities Act,
whether acting in its individual or fiduciary capacity; or

 

  Category 2.A savings and loan association or other institution as defined in
Section 3(a)(5)(A) of the U.S. Securities Act, whether acting in its individual
or fiduciary capacity; or

 

  Category 3.A broker or dealer registered pursuant to Section 15 of the United
States Securities Exchange Act of 1934, as amended; or

 

  Category 4.An insurance company as defined in Section 2(13) of the U.S.
Securities Act; or

 

  Category 5.An investment company registered under the United States Investment
Corporation Act of 1940; or

 

  Category 6.A business development company as defined in Section 2(a)(48) of
the United States Investment Corporation Act of 1940; or

 

  Category 7.A small business investment company licensed by the U.S. Small
Business Administration under Section 301 (c) or (d) of the United States Small
Business Investment Act of 1958; or

 

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Category 8.A plan established and maintained by a state, its political
subdivisions or any agency or instrumentality of a state or its political
subdivisions, for the benefit of its employees, with total assets in excess of
U.S. $5,000,000; or

 

  Category 9.An employee benefit plan within the meaning of the United States
Employee Retirement Income Security Act of 1974 in which the investment decision
is made by a plan fiduciary, as defined in Section 3(21) of such Act, which is
either a bank, savings and loan association, insurance company or registered
investment adviser, or an employee benefit plan with total assets in excess of
U.S. $5,000,000 or, if a self-directed plan, with investment decisions made
solely by persons who are accredited investors; or

 

  Category 10.A private business development company as defined in Section
202(a)(22) of the United States Investment Advisers Act of 1940; or

 

  Category 11.An organization described in Section 501(c)(3) of the United
States Internal Revenue Code, a corporation, a Massachusetts or similar business
trust, or a partnership, not formed for the specific purpose of acquiring the
securities offered, with total assets in excess of U.S. $5,000,000; or

 

  Category 12.Any director or executive officer of the Issuer; or

 

  Category 13.A natural person whose individual net worth, or joint net worth
with that person's spouse, at the time of this purchase exceeds US$1,000,000;
provided, however, that (i) person’s primary residence shall not be included as
an asset; (ii) indebtedness that is secured by the person’s primary residence,
up to the estimated fair market value of the primary residence at the time of
the sale of securities, shall not be included as a liability (except that if the
amount of such indebtedness outstanding at the time of the sale of securities
exceeds the amount outstanding 60 days before such time, other than as a result
of the acquisition of the primary residence, the amount of such excess shall be
included as a liability); and (iii) indebtedness that is secured by the person’s
primary residence in excess of the estimated fair market value of the primary
residence at the time of the sale of securities shall be included as a
liability; or

 

  Category 14.A natural person who had an individual income in excess of U.S.
$200,000 in each of the two most recent years or joint income with that person’s
spouse in excess of U.S. $300,000 in each of those years and has a reasonable
expectation of reaching the same income level in the current year; or

 

  Category 15.A trust, with total assets in excess of U.S. $5,000,000, not
formed for the specific purpose of acquiring the securities offered, whose
purchase is directed by a sophisticated person as described in Rule
506(b)(2)(ii) under the U.S. Securities Act; or

 

  Category 16.Any entity in which all of the equity owners meet the requirements
of at least one of the above categories;

 

The Purchaser undertakes to notify the Company immediately of any change in any
representation, warranty or other information relating to the Purchaser or any
Beneficial Purchaser set forth herein which takes place prior to the Closing.

 

E-2

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IN WITNESS WHEREOF, the undersigned has executed this U.S. Accredited Investor
Certificate as of the ____ day of _______________, 2018.

 

 

If a Corporation, Partnership or Other Entity:If an Individual:

 

 

 

Print or Type NamePrint or Type Name

 

 

 

SignatureSignature

 

 

Name and Title of Signatory

 

 

 

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