Document:

Exhibit 10.2

 

THE SECURITIES REPRESENTED HEREBY HAVE BEEN ISSUED IN AN OFFSHORE TRANSACTION TO PERSONS WHO ARE NOT U.S. PERSONS (AS DEFINED HEREIN) PURSUANT TO REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”).

 

NONE OF THE SECURITIES REPRESENTED HEREBY, NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE, HAVE BEEN REGISTERED UNDER THE 1933 ACT OR ANY U.S. STATE SECURITIES LAWS AND, UNLESS SO REGISTERED, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, A U.S. PERSON EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE 1933 ACT, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT, AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE AND FOREIGN SECURITIES LAWS. IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933 ACT. “UNITED STATES” AND “U.S. PERSON” ARE AS DEFINED BY REGULATION S UNDER THE 1933 ACT.

	
Issue Date: October 30, 2017

	
Principal Amount: $_____________

 

10% UNSECURED CONVERTIBLE NOTE

	
 

1.

	
 

General

 

1.1 FOR VALUE RECEIVED, APPCOIN INNOVATIONS INC. (the “Company”) promises to pay to _____________________, having an address at ________________________ (or its registered assigns) (email: ____________, facsimile: _____________) (the “Holder”), the principal sum of ____________________ ($___________) in lawful currency of the United States (the “Principal Amount”) on or before October 30, 2020 (the “Maturity Date”), and to pay interest to the Holder on the Principal Amount at the rate of 10.0% per annum, in accordance with Section 4.

	
 

2.

	
 

Definitions

 

2.1 For the purposes hereof, in addition to the terms defined elsewhere in this Note: (i) capitalized terms not otherwise defined herein have the meanings given to such terms in the Subscription Agreement, and (ii) the following terms shall have the following meanings:

	
 

(a)

	
 

“Business Day” means any day except Saturday, Sunday and any day which is a federal legal holiday in the United States or a day on which banking institutions in the State of California are authorized or required by law or other government action to close;

	
 

(b)

	
 

“Conversion Date” means the Business Day after the Holder provides the Conversion Notice to the Company for the conversion of any portion of the Principal Amount and accrued interest thereon into Conversion Shares pursuant to the terms of this Note;

	
 

(c)

	
 

“Conversion Notice” has the meaning set forth in Section 5.2;

	
 

(d)

	
 

“Conversion Price” means $0.10 per Conversion Share, subject to adjustment as provided in Section 5.7;

	
 

(e)

	
 

“Conversion Share” means a Share into which the Principal Amount, and accrued interest thereon, may be converted pursuant to the terms of this Note;

	
 

(f)

	
 

“Issue Date” has the meaning set forth on the first page of this Note;

	
 

(g)

	
 

“Party” means either the Company or the Holder, as applicable, and “Parties” means both of them;

 

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(h)

	
 

“Person” means any individual, sole proprietorship, limited or unlimited liability corporation, partnership, unincorporated association, unincorporated syndicate, unincorporated organization, body corporate, joint venture, trust, pension fund, union, governmental authority, and a natural person including in such person’s capacity as trustee, heir, beneficiary, executor, administrator or other legal representative;

	
 

(i)

	
 

“Share” means a share of common stock in the capital of the Company; and

	
 

(j)

	
 

“Subscription Agreement” means the private placement subscription agreement between the Parties dated as of the Issue Date, as amended, modified or supplemented from time to time in accordance with its terms.

	
 

3.

	
 

Subscription Agreement

 

3.1 The Holder has acquired this Note, and this Note has been issued, pursuant to the Subscription Agreement and this Note is subject in all respects to the terms of the Subscription Agreement and incorporates the terms of the Subscription Agreement, provided that, in the event of a conflict between this Note and the Subscription Agreement, the terms of this Note shall prevail.

	
 

4.

	
 

Interest

 

4.1 The Company agrees to pay interest to the Holder on the Principal Amount at the rate of 10.0% per annum, compounded annually. Interest will be payable on the earlier of: (a) the Maturity Date, (b) any Conversion Date, and (c) the date that all amounts owing under this Note are prepaid by the Company in accordance with Section 7. Interest shall be calculated on the basis of a 365-day year and shall accrue daily, commencing on the date of the issuance of this Note, until payment in full of the Principal Amount and all other amounts that may become owing under this Note.

	
 

5.

	
 

Conversion

 

5.1 The Parties agree that the Principal Amount, plus any accrued interest thereon, will, at the election of the Holder, be convertible into Conversion Shares subject to the limitations set forth in this Note. Notwithstanding anything to the contrary contained in this Note, this Note shall not be convertible by the Holder, and the Company shall not effect any conversion of this Note or otherwise issue any Conversion Shares pursuant hereto, to the extent (but only to the extent) that, after giving effect to such conversion, the Holder or any of its affiliates would beneficially own in excess of 4.99% (the “Maximum Percentage”) of the issued and outstanding Shares after such conversion. To the extent the above limitation applies, the determination of whether this Note shall be convertible (vis-à-vis other convertible, exercisable or exchangeable securities owned by the Holder or any of its affiliates) and of which such securities shall be convertible, exercisable or exchangeable (as among all such securities owned by the Holder and its affiliates) shall, subject to the Maximum Percentage limitation, be determined on the basis of the first submission to the Company for conversion, exercise or exchange (as the case may be). No prior inability to convert this Note or to issue Conversion Shares pursuant to this Section 5.1 shall have any effect on the applicability of the provisions of this Section 5.1 with respect to any subsequent determination of convertibility. For purposes of this Section 5.1, beneficial ownership and all determinations and calculations (including, without limitation, with respect to calculations of percentage ownership) shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the ”1934 Act”) and the rules and regulations promulgated thereunder. The provisions of this Section 5.1 shall only be implemented in a manner otherwise than in strict conformity with the terms of this Section 5.1 to correct this Section 5.1 (or any portion hereof) which may be defective or inconsistent with the intended Maximum Percentage limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to the Maximum Percentage limitation. The limitations contained in this Section 5.1 shall apply to a successor holder of this Note. For any reason at any time, upon the written or oral request of the Holder, the Company shall within one Business Day confirm orally and in writing to the Holder the number of Shares then outstanding, including by virtue of any prior conversion or exercise of convertible or exercisable securities into Shares, including, without limitation, pursuant to this Note. By written notice to the Company, the Holder may increase or decrease the Maximum Percentage to any other percentage not in excess of 9.99% specified in such notice; provided that: (a) any such increase will not be effective until the 61st day after such notice is delivered to the Company, and (b) any such increase or decrease will apply only to the Holder sending such notice.

 

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5.2 In order to effect any conversion under this Note and subject to the limitations set forth in this Note, the Holder must provide written notice (the “Conversion Notice”) to the Company setting out the portion of the Principal Amount, and accrued interest thereon, that is to be converted into Conversion Shares.

 

5.3 The number of Conversion Shares issuable upon conversion of the Principal Amount to be converted shall be determined by the quotient obtained by dividing (x) by (y) where (x) is equal to the Principal Amount to be converted and (y) is the Conversion Price.

 

5.4 The number of Conversion Shares issuable upon conversion of any accrued and outstanding interest on this Note shall be determined by the quotient obtained by dividing (x) by (y) where (x) is equal to the amount of accrued interest on the Principal Amount to be converted and (y) is the Conversion Price.

 

5.5 Not later than five Business Days after any Conversion Date, the Company will deliver to the Holder a certificate representing the Conversion Shares (bearing such legends as may be required by applicable law) representing the aggregate number of Conversion Shares being acquired.

 

5.6 Upon any conversion hereunder, the Company shall not be required to issue any fraction of a Conversion Share, and the number of Conversion Shares shall be rounded down to the nearest whole number.

 

5.7 If the Company, at any time while this Note is outstanding: (a) subdivides outstanding Shares into a larger number of Shares, (b) combines (including by way of reverse split) outstanding Shares into a smaller number of Shares, or (c) issues, by reclassification of Shares, any equity securities of the Company, then the Conversion Price shall be multiplied by a fraction of which the numerator shall be the number of Shares outstanding before such event and the denominator shall be the number of Shares outstanding after such event. Any adjustment made pursuant to this Section 5.7 shall become effective after the effective date of such subdivision, combination or re‐classification.

	
 

6.

	
 

Repayment

 

6.1 Payment of this Note (less any tax required to be withheld by the Company) shall be paid to the Holder by the Company by cheque, wire transfer or such other method as may be mutually agreed to by the Parties from time to time.

	
 

7.

	
 

Prepayment

 

7.1 Subject to Sections 5 and 7 of this Note, the Company shall pay to the Holder the Principal Amount, and accrued interest thereon, in cash on the Maturity Date. The Company may, at any time prior to the Maturity Date, upon ten calendar days’ prior written notice to the Holder (a “Prepayment Notice”), prepay any portion of the Principal Amount and accrued interest thereon, without the prior written consent of the Holder, provided that at the time of such prepayment the Holder is able to convert all amounts being prepaid without exceeding the Maximum Percentage.

 

7.2 The Prepayment Notice shall set forth the date on which prepayment is to occur, such date being no earlier than ten calendar days after the date of the Prepayment Notice and no later than the Maturity Date (in any case, the “Prepayment Date”), and shall set forth that portion of the Principal Amount to be prepaid, along with the calculated accrued interest thereon, as through and including the Prepayment Date (the “Prepayment Amount”).

 

7.3 The Prepayment Amount (less any tax required to be withheld by the Company) shall be paid to the Holder by the Company by cheque, wire transfer or such other method as may be mutually agreed to by the Parties from time to time. The mailing of such cheque, or payment by other means, by the Company on or before the Prepayment Date shall be deemed to be payment on the Prepayment Date unless the cheque is not paid upon presentation, or payment by such other means as may be mutually agreed to by the Parties is not received prior to the 

 

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Prepayment Date. If only a part of the Principal Amount is to be prepaid, a new certificate for the balance of the Principal Amount shall be issued at the expense of the Company and delivered to the Holder, together with the cheque representing the Prepayment as provided for in this Section 7.3.

 

7.4 At any time after a Prepayment Notice is given, the Company shall have the right to deliver to the Holder, or to such other Person as may be directed by the Holder, the Prepayment Amount. Upon the delivery of the Prepayment Amount to the Holder being made, or upon the Prepayment Date, whichever is later, the Note shall be, and be deemed to be, paid and the rights of the Holder shall be limited to receiving, without interest, the amount so deposited. Any interest allowed on such deposit shall accrue to the Company.

	
 

8.

	
 

Event of Default

 

8.1 For the purposes of this Note, the Company shall be in default upon the occurrence of any one or more of the following events (each such event being, an “Event of Default”):

	
 

(a)

	
 

the Company defaults in the payment of any amounts owing under this Note when due and the Company fails to cure such default within ten (10) Business Days after written notice of default is sent by the Holder to the Company;

	
 

(b)

	
 

the Company fails to issue the Conversion Shares within ten (10) Business Days after a Conversion Notice is delivered to the Company;

	
 

(c)

	
 

the Company files a voluntary petition in bankruptcy or is adjudicated bankrupt or insolvent, or files any petition or answer seeking or acquiescing in any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief for itself under any present or future federal, state or other statute, law or regulation relating to bankruptcy, insolvency or other relief for debtors; or seeks, consents to, or acquiesces in, the appointment of any trustee, receiver or liquidator of the Company;

	
 

(d)

	
 

a court of competent jurisdiction enters an order, judgment or decree approving a petition filed against the Company seeking any reorganization, dissolution or similar relief under any present or future federal, state or other statute, law or regulation relating to bankruptcy, insolvency or other relief for debtors, and such order, judgment or decree remains unvacated and unstayed for an aggregate of 60 Business Days (whether or not consecutive) from the first date of entry thereof; or any trustee, receiver or liquidator of the Company is appointed without the consent or acquiescence of the Company and such appointment remains unvacated and unstayed for an aggregate of 60 Business Days (whether or not consecutive); or

	
 

(e)

	
 

the Company ceases or threatens to cease to carry on its business.

 

8.2 If any Event of Default occurs, subject to any cure period, the full Principal Amount, together with interest thereon accrued to the date of the Event of Default, shall become, at the Holder’s election, immediately due and payable in cash.  Upon payment of the full Principal Amount, together with accrued interest and any other amounts owing under this Note, this Note shall promptly be surrendered to or as directed by the Company.  The Holder need not provide and the Company hereby waives any presentment, demand, protest or other notice of any kind, and the Holder may immediately, subject to any cure 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 the Holder at any time prior to payment hereunder and the Holder shall have all rights as a Note holder until such time, if any, as the full payment of amounts owing under this Note shall have been received by it.  No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.

 

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9.

	
 

Notices

 

9.1 Any and all notices or other communications or deliveries to be provided by the Holder hereunder, including, without limitation, any Conversion Notice, shall be in writing, addressed to the Company, and delivered personally or by facsimile, email or overnight courier service to: 3250 Oakland Hills Court, Fairfield, CA 94534; Email: jgeiskopf@aol.com, Attn: Jimmy Geiskopf, or such other email address or physical address as the Company may notify the Holder of from time to time in accordance with Section 9.2.

 

9.2 Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing, addressed to the Holder, and delivered personally or by facsimile, email or overnight courier service to the address of the Holder appearing on the first page of this Note, or such other address as the Holder may notify the Company of from time to time in accordance with Section 9.1.

 

9.3 Any notice or other communication or delivery hereunder shall be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication is delivered by facsimile or email transmission prior to 5:30 p.m. (Pacific Standard Time) on a Business Day, (b) the second Business Day following the date of mailing, if sent by overnight courier service, or (c) upon actual receipt by the Party to whom such notice is required to be given.

	
 

10.

	
 

Replacement of Note if Lost or Destroyed

 

If this Note shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen or destroyed Note, a new Note for the balance outstanding at such time with respect to the Principal Amount, but only upon receipt of evidence of such loss, theft or destruction of such Note, and of the ownership hereof, and indemnity, if requested, all reasonably satisfactory to the Company.

	
 

11.

	
 

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 Nevada, without regard to the principles of conflicts of law thereof.

	
 

12.

	
 

Waivers

 

Any waiver by a Party of a breach of any provision of this Note shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Note.  The failure of a Party to insist upon strict adherence to any term of this Note on one or more occasions shall not be considered a waiver or deprive that Party of the right thereafter to insist upon strict adherence to that term or any other term of this Note.  Any waiver must be in writing.

	
 

13.

	
 

Usury

 

If any provision of this Note is 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 violates applicable laws governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum permitted rate of interest.

 

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14.

	
 

Next Business Day

 

Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment or other obligation shall be made on the next succeeding Business Day.

 

 

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

 

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15.

	
 

Counterparts and Electronic Means

 

This Note may be executed in counterparts, each of which, when so executed and delivered, will constitute an original, and all of which together will constitute one instrument. Delivery of an executed copy of this Note by email transmission or other means of electronic communication capable of producing a printed copy, will be deemed to be execution and delivery of an original copy of this Note as of the Issue Date.

 

IN WITNESS WHEREOF, the Parties have caused this Note to be duly executed as of the Issue Date.

 

	
APPCOIN INNOVATIONS INC.

 

Per: ______________________________________________

        Authorized Signatory

Name: ____________________________________________

	
___________________________

  

Per: ______________________________________________

 Authorized Signatory

Name:_____________________________________________Exhibit 10.3

 

 

APPCOIN INNOVATIONS INC.

 (the “Issuer”)

 

PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT

 

INSTRUCTIONS TO SUBSCRIBER

 

 

	1.	
You must complete all the information in the boxes on page 2 and sign where indicated with an “X”.

 

	2.	
If you are resident in Canada, you must complete and sign Exhibit A “Canadian Investor Questionnaire” that starts on page 12. The purpose of this form is to determine whether you meet the standards for participation in a private placement under applicable Canadian securities laws. In order for the Issuer to satisfy its obligations under applicable Canadian securities laws, you may be required to provide additional evidence to verify the information you have provided in Exhibit A “Canadian Investor Questionnaire” that starts on page 12.

 

	3.	
If you are a “U.S. Purchaser”, as defined in Exhibit B, you must complete and sign Exhibit B “United States Accredited Investor Questionnaire” that starts on page 21.

 

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APPCOIN INNOVATIONS INC.

 

PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT

 

The undersigned (the “Subscriber”) hereby irrevocably subscribes for and agrees to purchase from AppCoin Innovations Inc. (the “Issuer”) shares of common stock of the Issuer (each, a “Share”) at a price of $0.10 per Share. The Subscriber agrees to be bound by the terms and conditions set forth in the attached “Terms and Conditions of Subscription for Shares”.

 

	
Subscriber Information

  

 

____________________________________________________________________

	 	
Shares to be Purchased

 

Number of Shares: ________________________________

 

Total Subscription Price:   $__________________________

                                                        (the “Subscription Amount”)

	
(Name of Subscriber)

	 	 
	 	 	 
	
Account Reference (if applicable): __________________________________________ 

	 	 
	
 

X____________________________________________________________________

	 	 
	
(Signature of Subscriber – if the Subscriber is an Individual)

	 	 
	
 

X____________________________________________________________________ 

	 	 
	
(Signature of Authorized Signatory – if the Subscriber is not an Individual)

 

____________________________________________________________________ 

(Name and Title  of Authorized Signatory – if the Subscriber is not an Individual)

 

____________________________________________________________________

(SIN, SSN, or other Tax Identification Number of the Subscriber)

 

____________________________________________________________________

(Subscriber’s Address, including City and Postal Code)

 

____________________________________________________________________

 

____________________________________________________________________

  

(Telephone Number)_________________________________  (Email Address)__________________________

	 	 
	
 

Register the Shares as set forth below:

 

____________________________________________________________________

(Name to Appear on Share Certificate)

 

____________________________________________________________________

(Account Reference, if applicable)

 

____________________________________________________________________

(Address, including Postal Code)

	 	 

  

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ACCEPTANCE

 

The Issuer hereby accepts the Subscription (as defined herein) on the terms and conditions contained in this private placement subscription agreement (this “Agreement”) as of the ____  day of ______________, 2017 (the “Closing Date”).

 

APPCOIN INNOVATIONS INC.

Per: ____________________________________________________

 Authorized Signatory

 

		Address:	
AppCoin Innovations Inc.

3250 Oakland Hills Court

Fairfield, CA  94534

 USA

 

		Email:	
jgeiskopf@aol.com

 

		Attention:	
James P. Geiskopf

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TERMS AND CONDITIONS OF SUBSCRIPTION FOR SHARES

 

1. Subscription

 

1.1 The Subscriber hereby irrevocably subscribes for and agrees to purchase Shares for the Subscription Amount as shown on page 2 of this Subscription Agreement, which is tendered herewith (such subscription and agreement to purchase being the “Subscription”), pursuant to the terms and conditions of this Agreement and the Issuer agrees to sell the Shares to the Subscriber, effective upon the Issuer’s acceptance of this Agreement.

 

1.2 The Subscriber acknowledges that the Shares has been offered to the Subscriber as part of an offer by the Issuer of unsecured convertible notes and common shares in the aggregate principal amount of $500,000, or such other number as may be determined by the board of directors of the Issuer in its sole discretion (the “Offering”).

 

1.3 Unless otherwise provided, all dollar amounts referred to in this Agreement are in lawful money of the United States.

 

2. Payment

 

2.1 The Subscription Amount must accompany this Subscription.  The Subscriber authorizes the Issuer to treat the Subscription Amount as an interest free loan until the closing of the Offering (the “Closing”).

 

2.2 The Subscriber acknowledges and agrees that this Agreement, the Subscription Amount and any other documents delivered in connection herewith will be held by the Issuer.  In the event that this Agreement is not accepted by the Issuer for whatever reason, which the Issuer expressly reserves the right to do, the Issuer will return the Subscription Amount (without interest thereon) to the Subscriber at the address of the Subscriber as set forth on page 2 of this Agreement, or as otherwise directed by the Subscriber.

 

3. Documents Required from Subscriber

 

3.1 The Subscriber must complete, sign and return to the Issuer the following documents:

	
 

(a)

	
 

this Agreement;

	
 

(b)

	
 

if the Subscribers is a resident of Canada, the Canadian Investor Questionnaire (the “Canadian Questionnaire”) attached as Exhibit A that starts on page , along with any additional evidence that may be requested by the Issuer to verify the information provided in the Canadian Questionnaire;

	
 

(c)

	
 

if the Subscriber is a U.S. Purchaser (as defined in Exhibit B), the United States Accredited Investor Questionnaire (the “U.S. Questionnaire” and, together with the Canadian Questionnaire, the “Questionnaires”) attached as Exhibit B that starts on page ; and

	
 

(d)

	
 

such other supporting documentation that the Issuer or counsel of the Issuer (the “Issuer’s Counsel”) may request to establish the Subscriber’s qualification as a qualified investor,

 

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(e)

	
 

and the Subscriber acknowledges and agrees that the Issuer will not consider the Subscription for acceptance unless the Subscriber has provided all of such documents to the Issuer.

 

3.2 As soon as practicable upon any request by the Issuer, the Subscriber will complete, sign and return to the Issuer any additional documents, questionnaires, notices and undertakings as may be required by any regulatory authorities or applicable laws.

 

3.3 The Issuer and the Subscriber acknowledge and agree that the Issuer’s Counsel has acted as counsel only to the Issuer and is not protecting the rights and interests of the Subscriber.  The Subscriber acknowledges and agrees that the Issuer and the Issuer’s Counsel have given the Subscriber the opportunity to seek, and are hereby recommending that the Subscriber obtain, independent legal advice with respect to the subject matter of this Agreement and, further, the Subscriber hereby represents and warrants to the Issuer and the Issuer’s Counsel that the Subscriber has sought independent legal advice or waives such advice.

 

4. Conditions and Closing

 

4.1 The Closing Date will occur on such date as may be determined by the Issuer in its sole discretion.  The Issuer may, at its discretion, elect to close the Offering in one or more closings, in which event the Issuer may agree with one or more purchasers (including the Subscriber) to complete delivery of the Shares to such purchaser(s) against payment therefor at any time on or prior to the Closing Date.

 

4.2 The Closing is conditional upon and subject to:

	
 

(a)

 

	
 

the Issuer having obtained all necessary approvals and consents, including regulatory approvals for the Offering; and

 

	
(b)

 

	
the issue and sale of the Shares being exempt from the requirement to file a prospectus and the requirement to deliver an offering memorandum under applicable securities laws relating to the sale of the Shares, or the Issuer having received such orders, consents or approvals as may be required to permit such sale without the requirement to file a prospectus or deliver an offering memorandum.

 

 

4.3 The Subscriber acknowledges that the certificates representing the Shares will be available for delivery within two business days of the Closing Date, provided that the Subscriber has satisfied the requirements of Section 3.1 hereof and the Issuer has accepted this Agreement.

 

5. Acknowledgements and Agreements of the Subscriber

 

5.1 The Subscriber acknowledges and agrees that:

	
 

(a)

	
 

none of the Shares have been or will be registered under the United States Securities Act of 1933, as amended, (the “1933 Act”), or under any securities or “blue sky” laws of any state of the United States, and, unless so registered, may not be offered or sold in the United States or, directly or indirectly, to any U.S. Person (as defined in Section 6.2), except in accordance with the provisions of Regulation S under the 1933 Act (“Regulation S”), pursuant to an effective registration statement under the 1933 Act, or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the 1933 Act and in each case only in accordance with applicable state, provincial and foreign securities laws;

 

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(b)

	
 

the Issuer has not undertaken, and will have no obligation, to register any of the Shares under the 1933 Act or any other applicable securities laws;

	
 

(c)

	
 

the Issuer will refuse to register the transfer of any of the Shares to a U.S. Person not made pursuant to an effective registration statement under the 1933 Act or pursuant to an available exemption from the registration requirements of the 1933 Act and in each case in accordance with applicable laws;

	
 

(d)

	
 

the decision to execute this Agreement and to acquire the Shares has not been based upon any oral or written representation as to fact or otherwise made by or on behalf of the Issuer and such decision is based entirely upon a review of any public information which has been filed by the Issuer with the United State Securities and Exchange Commission (collectively, the “Public Record”);

	
 

(e)

	
 

the Issuer and others will rely upon the truth and accuracy of the acknowledgements, representations, warranties, covenants and agreements of the Subscriber contained in this Agreement and the Questionnaires, as applicable, and agrees that if any of such acknowledgements, representations and agreements are no longer accurate or have been breached, the Subscriber will promptly notify the Issuer;

	
 

(f)

	
 

there are risks associated with the purchase of the Shares, as more fully described in the Issuer’s periodic disclosure forming part of the Public Record;

	
 

(g)

	
 

the Subscriber and the Subscriber’s advisor(s) have had a reasonable opportunity to ask questions of and receive answers from the Issuer in connection with the distribution of the Shares hereunder, and to obtain additional information, to the extent possessed or obtainable without unreasonable effort or expense, necessary to verify the accuracy of the information about the Issuer;

	
 

(h)

	
 

a portion of this Offering may be sold pursuant to an agreement between the Issuer and one or more agents registered in accordance with applicable securities laws, in which case the Issuer will pay a fee and/or compensation securities on terms as set out in such agency agreement;

	
 

(i)

	
 

finder’s fees or broker’s commissions may be payable by the Issuer to finders who introduce subscribers to the Issuer;

	
 

(j)

	
 

the books and records of the Issuer were available upon reasonable notice for inspection, subject to certain confidentiality restrictions, by the Subscriber during reasonable business hours at its principal place of business, and all documents, records and books in connection with the distribution of the Shares hereunder have been made available for inspection by the Subscriber, the Subscriber’s legal counsel and/or its advisor(s);

	
 

(k)

	
 

all of the information which the Subscriber has provided to the Issuer is correct and complete and if there should be any change in such information prior to the Closing, the Subscriber will immediately notify the Issuer, in writing, with the details of any such change;

	
 

(l)

	
 

the Issuer is entitled to rely on the representations and warranties of the Subscriber contained in this Agreement and the Questionnaires, as applicable, and the Subscriber will hold harmless the Issuer from any loss or damage it or they may suffer as a result of the Subscriber’s failure to correctly complete this Agreement or the Questionnaires, as applicable;

 

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(m)

	
 

any resale of the Shares by the Subscriber will be subject to resale restrictions contained in the securities laws applicable to the Issuer, the Subscriber and any proposed transferee and it is the responsibility of the Subscriber to find out what those restrictions are and to comply with such restrictions before selling any of the Shares;

	
 

(n)

	
 

the Subscriber has been advised to consult the Subscriber’s own legal, tax and other advisors with respect to the merits and risks of an investment in the Shares and with respect to applicable resale restrictions, and it is solely responsible (and the Issuer is not in any way responsible) for compliance with:

	
 

(i)

	
 

any applicable laws of the jurisdiction in which the Subscriber is resident in connection with the distribution of the Shares hereunder, and

	
 

(ii)

	
 

applicable resale restrictions;

	
 

(o)

	
 

there may be material tax consequences to the Subscriber of an acquisition or disposition of the Shares and the Issuer gives no opinion and makes no representation to the Subscriber with respect to the tax consequences to the Subscriber under federal, state, provincial, local or foreign tax laws that may apply to the Subscriber’s acquisition or disposition of the Shares;

	
 

(p)

	
 

the Subscriber consents to the placement of a legend or legends on any certificate or other document evidencing any of the Shares setting forth or referring to the restrictions on transferability and sale thereof contained in this Agreement;

	
 

(q)

	
 

the Issuer has advised the Subscriber that the Issuer is relying on an exemption from the requirements to provide the Subscriber with a prospectus and to sell the Shares through a person registered to sell securities under provincial securities laws and other applicable securities laws, and, as a consequence of acquiring the Shares pursuant to such exemption, certain protections, rights and remedies provided by applicable securities laws (including the various provincial securities acts), including statutory rights of rescission or damages, will not be available to the Subscriber;

	
 

(r)

	
 

no securities commission or similar regulatory authority has reviewed or passed on the merits of any of the Shares;

	
 

(s)

	
 

there is no government or other insurance covering any of the Shares; and

	
 

(t)

	
 

this Agreement is not enforceable by the Subscriber unless it has been accepted by the Issuer, and the Issuer reserves the right to reject this Subscription for any reason.

 

6. Representations and Warranties of the Subscriber

 

6.1 The Subscriber hereby represents and warrants to the Issuer (which representations and warranties will survive the Closing) that:

	
 

(a)

	
 

unless the Subscriber has completed Exhibit B, the Subscriber is not a U.S. Person;

	
 

(b)

	
 

the Subscriber is resident in the jurisdiction set out on page 2 of this Agreement;

 

- 8 -

 

 

	
 

(c)

	
 

if the Subscriber is resident outside of Canada:

	
 

(i)

	
 

the Subscriber is knowledgeable of, or has been independently advised as to, the applicable securities laws having application in the jurisdiction in which the Subscriber is resident (the “International Jurisdiction”) which would apply to the offer and sale of the Shares,

	
 

(ii)

	
 

the Subscriber is purchasing the Shares pursuant to exemptions from prospectus or equivalent requirements under applicable securities laws or, if such is not applicable, the Subscriber is permitted to purchase the Shares under the applicable laws of the International Jurisdiction without the need to rely on any exemptions,

	
 

(iii)

	
 

the applicable laws of the authorities in the International Jurisdiction do not require the Issuer to make any filings or seek any approvals of any kind whatsoever from any securities regulator of any kind whatsoever in the International Jurisdiction in connection with the offer, issue, sale or resale of any of the Shares,

	
 

(iv)

	
 

the purchase of the Shares by the Subscriber does not trigger:

	
 

A.

	
 

any obligation to prepare and file a prospectus or similar document, or any other report with respect to such purchase in the International Jurisdiction, or

	
 

B.

	
 

any continuous disclosure reporting obligation of the Issuer in the International Jurisdiction, and

	
 

(v)

	
 

the Subscriber will, if requested by the Issuer, deliver to the Issuer a certificate or opinion of local counsel from the International Jurisdiction which will confirm the matters referred to in subparagraphs (ii), (iii) and (iv) above to the satisfaction of the Issuer, acting reasonably;

	
 

(d)

	
 

the Subscriber has the legal capacity and competence to enter into and execute this Agreement and to take all actions required pursuant hereto and, if the Subscriber is a corporate entity, it is duly incorporated and validly subsisting under the laws of its jurisdiction of incorporation and all necessary approvals by its directors, shareholders and others have been obtained to authorize execution and performance of this Agreement on behalf of the Subscriber;

	
 

(e)

	
 

the entering into of this Agreement and the transactions contemplated hereby do not result in the violation of any of the terms and provisions of any law applicable to, or, if applicable, the constating documents of, the Subscriber or of any agreement, written or oral, to which the Subscriber may be a party or by which the Subscriber is or may be bound;

	
 

(f)

	
 

the Subscriber has duly executed and delivered this Agreement and it constitutes a valid and binding agreement of the Subscriber enforceable against the Subscriber;

	
 

(g)

	
 

the Subscriber has received and carefully read this Agreement;

 

- 9 -

 

 

	
 

(h)

	
 

the Subscriber is aware that an investment in the Issuer is speculative and involves certain risks (including those risks disclosed in the Public Record), including the possible loss of the entire investment;

	
 

(i)

	
 

the Subscriber has made an independent examination and investigation of an investment in the Shares and the Issuer and agrees that the Issuer will not be responsible in any way for the Subscriber’s decision to invest in the Shares and the Issuer;

	
 

(j)

	
 

the Subscriber is not an underwriter of, or dealer in, any of the Shares, nor is the Subscriber participating, pursuant to a contractual agreement or otherwise, in the distribution of the Shares;

	
 

(k)

	
 

the Subscriber is not aware of any advertisement of any of the Shares and is not acquiring the Shares as a result of any form of general solicitation or general advertising, including advertisements, articles, notices or other communications published in any newspaper, magazine or similar media, or broadcast over radio or television, or any seminar or meeting whose attendees have been invited by general solicitation or general advertising; and

	
 

(l)

	
 

no person has made to the Subscriber any written or oral representations:

	
 

(i)

	
 

that any person will resell or repurchase any of the Shares,

	
 

(ii)

	
 

that any person will refund the purchase price of any of the Shares, or

	
 

(iii)

	
 

as to the future price or value of any of the Shares.

 

6.2 In this Agreement, the term “U.S. Person” will have the meaning ascribed thereto in Regulation S, and for the purpose of this Agreement includes, but is not limited to: (a) any person in the United States; (b) any natural person resident in the United States; (c) any partnership or corporation organized or incorporated under the laws of the United States; (d) any partnership or corporation organized outside the United States by a U.S. Person principally for the purpose of investing in securities not registered under the 1933 Act, unless it is organized or incorporated, and owned, by accredited investors who are not natural persons, estates or trusts; or (e) any estate or trust of which any executor or administrator or trustee is a U.S. Person.

 

7. Representations and Warranties will be Relied Upon

 

7.1 The Subscriber acknowledges that its representations and warranties contained herein and in the Questionnaires  are made by it with the intention that such representations and warranties will be relied upon by the Issuer and the Issuer’s Counsel in determining the Subscriber’s eligibility to purchase the Shares under applicable laws, or (if applicable) the eligibility of others on whose behalf it is contracting hereunder to purchase the Shares under applicable laws. The Subscriber further agrees that, by accepting delivery of the certificate for the Shares, it will be representing and warranting that its representations and warranties contained herein and in the Questionnaires are true and correct as at the Closing Date with the same force and effect as if they had been made by the Subscriber on the Closing Date and that they will survive the purchase by the Subscriber of the Shares and will continue in full force and effect notwithstanding any subsequent disposition by the Subscriber of the Shares.

 

- 10 -

 

 

8. Acknowledgement and Waiver

 

8.1 The Subscriber has acknowledged that the decision to acquire the Shares was solely made on the basis of the Public Record.  The Subscriber hereby waives, to the fullest extent permitted by law, any rights of withdrawal, rescission or compensation for damages to which the Subscriber might be entitled in connection with the distribution of any of the Shares.

 

9. Legending and Registration of Subject Securities

 

9.1 The Subscriber hereby acknowledges that a legend or legends may be placed on the certificates representing the Shares to the effect that the Shares represented by such certificates are subject to a hold period and may not be traded until the expiry of such hold period except as permitted by applicable securities laws, and the Subscriber consent to the placement of such legend(s) on any certificate representing the Shares.

 

9.2 The Subscriber hereby acknowledges and agrees to the Issuer making a notation on its records or giving instructions to the registrar and transfer agent of the Issuer in order to implement the restrictions on transfer set forth and described in this Agreement.

 

10. Collection of Personal Information

 

10.1 The Subscriber acknowledges and consents to the fact that the Issuer is collecting the Subscriber’s personal information for the purpose of fulfilling this Agreement and completing the Offering.  The Subscriber acknowledges that its personal information (and, if applicable, the personal information of those on whose behalf the Subscriber is contracting hereunder) may be included in record books in connection with the Offering and may be disclosed by the Issuer to: (a) stock exchanges or securities regulatory authorities, (b) the Issuer's registrar and transfer agent, (c) Canadian tax authorities, (d) authorities pursuant to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) and (e) any of the other parties involved in the Offering, including the Issuer’s Counsel.  By executing this Agreement, the Subscriber is deemed to be consenting to the foregoing collection, use and disclosure of the Subscriber's personal information (and, if applicable, the personal information of those on whose behalf the Subscriber is contracting hereunder) for the foregoing purposes and to the retention of such personal information for as long as permitted or required by applicable laws.  Notwithstanding that the Subscriber may be purchasing the Shares as agent on behalf of an undisclosed principal, the Subscriber agrees to provide, on request, particulars as to the nature and identity of such undisclosed principal, and any interest that such undisclosed principal has in the Issuer, all as may be required by the Issuer in order to comply with the foregoing. Furthermore, the Subscriber is hereby notified that:

	
 

(a)

	
 

the Issuer may deliver to any securities commission having jurisdiction over the Issuer, the Subscriber or this Subscription, including any Canadian provincial securities commissions, the United States Securities and Exchange Commission and/or any state securities commissions (collectively, the “Commissions”), certain personal information pertaining to the Subscriber, including the Subscriber’s full name, residential address and telephone number, the number of securities of the Issuer owned by the Subscriber, the number of Shares purchased by the Subscriber, the total Subscription Amount paid, the prospectus exemption relied on by the Issuer and the date of distribution of the Shares;

	
 

(b)

	
 

such information is being collected indirectly by the Commissions under the authority granted to them in applicable securities laws;

 

- 11 -

 

 

	
 

(c)

	
 

such information is being collected for the purposes of the administration and enforcement of applicable securities laws; and

	
 

(d)

	
 

the Subscriber may contact the following public official in Ontario with respect to questions about the Ontario Securities Commission’s indirect collection of such information at the following address and telephone number:

	
 

(e)

	
 

Administrative Assistant to the Director of Corporate Finance

Ontario Securities Commission

Suite 1903, Box 55

20 Queen Street West

Toronto, ON  M5H 3S8

 Telephone:  (416) 593-8086

 

11. Costs

 

11.1 The Subscriber acknowledges and agrees that all costs and expenses incurred by the Subscriber (including any fees and disbursements of any special counsel retained by the Subscriber) relating to the purchase of the Shares will be borne by the Subscriber.

 

12. Execution of Subscription Agreement

 

12.1 The Issuer and the Issuer’s Counsel will be entitled to rely on delivery by facsimile machine or other means of electronic communication capable of producing a printed copy of an executed copy of this Agreement, and acceptance by the Issuer of such facsimile or electronic copy will be equally effective to create a valid and binding agreement between the Subscriber and the Issuer in accordance with the terms hereof. If less than a complete copy of this Agreement is delivered to the Issuer or the Issuer’s Counsel prior to or at Closing, the Issuer and the Issuer’s Counsel are entitled to assume that the Subscriber accepts and agrees to all of the terms and conditions of the pages not delivered prior to or at Closing unaltered.

 

12.2 The Subscriber hereby authorizes the Issuer to correct any minor errors in, or complete any minor information missing from any part of this Agreement and any other acknowledgements, provisions, forms, certificates or documents executed by the Subscriber and delivered to the Issuer or the Issuer’s Counsel in connection with the Subscription.

 

13. Beneficial Subscribers

 

13.1 Whether or not explicitly stated in this Agreement, any acknowledgement, representation, warranty, covenant or agreement made by the Subscriber in this Agreement, including the exhibits hereto, will be treated as if made by the Disclosed Principal, if any.

 

14. Governing Law

 

14.1 This Agreement is governed by the laws of the State of Nevada.

 

15. Survival

 

15.1 This Agreement, including, without limitation, the representations, warranties and covenants contained herein, will survive and continue in full force and effect and be binding upon the Issuer and the Subscriber, notwithstanding the completion of the purchase of the Shares by the Subscriber.

 

- 12 -

 

 

16. Assignment

 

16.1 This Agreement is not transferable or assignable.

 

17. Severability

 

17.1 The invalidity or unenforceability of any particular provision of this Agreement will not affect or limit the validity or enforceability of the remaining provisions of this Agreement.

 

18. Entire Agreement

 

18.1 Except as expressly provided in this Agreement and in the exhibits, agreements, instruments and other documents attached hereto or contemplated or provided for herein, this Agreement contains the entire agreement between the Issuer and the Subscriber with respect to the sale of the Shares and there are no other terms, conditions, representations or warranties, whether expressed, implied, oral or written, by statute or common law, by the Issuer or by anyone else.

 

19. Notices

 

19.1 All notices and other communications hereunder will be in writing and will be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication, including facsimile, electronic mail or other means of electronic communication capable of producing a printed copy.  Notices to the Subscriber will be directed to the address of the Subscriber set forth on page 2 of this Agreement and notices to the Issuer will be directed to it at the address of the Issuer set forth on page 3 of this Agreement.

 

20. Counterparts and Electronic Means

 

20.1 This Agreement may be executed in any number of counterparts, each of which, when so executed and delivered, will constitute an original and all of which together will constitute one instrument.  Delivery of an executed copy of this Agreement by electronic facsimile transmission or other means of electronic communication capable of producing a printed copy will be deemed to be execution and delivery of this Agreement as of the Closing Date.

 

21. Exhibits

 

21.1 The exhibits attached hereto form part of this Agreement.

 

22. Indemnity

 

22.1 The Subscriber will indemnify and hold harmless the Issuer and, where applicable, its directors, officers, employees, agents, advisors and shareholders, from and against any and all loss, liability, claim, damage and expense whatsoever (including, but not limited to, any and all fees, costs and expenses whatsoever reasonably incurred in investigating, preparing or defending against any claim, lawsuit, administrative proceeding or investigation whether commenced or threatened) arising out of or based upon any representation or warranty of the Subscriber contained in this Agreement, the Questionnaires, as applicable, or in any document furnished by the Subscriber to the Issuer in connection herewith being untrue in any material respect or any breach or failure by the Subscriber to comply with any covenant or agreement made by the Subscriber to the Issuer in connection therewith.

 

- 13 -

 

 

EXHIBIT A

 

CANADIAN INVESTOR QUESTIONNAIRE

 

 

(ALBERTA, BRITISH COLUMBIA, MANITOBA, NEWFOUNDLAND AND LABRADOR, NEW BRUNSWICK, NOVA SCOTIA, ONTARIO, PRINCE EDWARD ISLAND, QUEBEC, AND SASKATCHEWAN)

 

TO: APPCOIN INNOVATIONS INC. (the “Issuer”)

 

RE: Purchase of Shares of Common Stock (the “Shares”) of the Issuer

 

Capitalized terms used in this Canadian Questionnaire (this “Questionnaire”) and not specifically defined have the meaning ascribed to them in the Private Placement Subscription Agreement between the Subscriber and the Issuer to which this Exhibit A is attached.

 

In connection with the purchase by the Subscriber (being the undersigned, or if the undersigned is purchasing the Shares as agent on behalf of a disclosed beneficial Subscriber, such beneficial Subscriber, will be referred herein as the “Subscriber”) of the Shares, the Subscriber hereby represents, warrants and certifies to the Issuer that the Subscriber:

 

		(i)	
is purchasing the Shares as principal (or deemed principal under the terms of National Instrument 45-106 - Prospectus Exemptions adopted by the Canadian Securities Administrators (“NI 45-106”));

 

		(ii) 	(A) 	is resident in or is subject to the laws of one of the following (check one):

	
☐ Alberta

	
☐ New Brunswick

	
☐ Prince Edward Island

	
☐ British Columbia

	
☐ Nova Scotia

	
☐ Quebec

	
☐ Manitoba

	
☐ Ontario

	
☐ Saskatchewan

	
☐ Newfoundland and Labrador

	 
	
☐ United States:  _________________________ (List State of Residence)

 

or

 

		(B)	
☐ is resident in a country other than Canada or the United States; and

 

		(iii)	
has not been provided with any offering memorandum in connection with the purchase of the Shares.

 

In connection with the purchase of the Shares, the Subscriber hereby represents, warrants, covenants and certifies that the Subscriber meets one or more of the following criteria:

 

	
I. SUBSCRIBERS PURCHASING UNDER THE “ACCREDITED INVESTOR” EXEMPTION

 

	
(a)  

	
the Subscriber is not a trust company or trust company registered under the laws of Prince Edward Island that is not registered or authorized under the Trust and Loan Companies Act (Canada) or under comparable legislation in another jurisdiction of Canada;

 

- 14 -

 

  

	
(b)  

	
the Subscriber is an “accredited investor” within the meaning of NI 45-106, by virtue of satisfying the indicated criterion as set out in Appendix “A” to this certificate (YOU MUST ALSO INITIAL OR PLACE A CHECK-MARK ON THE APPROPRIATE LINE IN APPENDIX “A” ATTACHED TO THIS CERTIFICATE)

 

	
(c)  

	
If the Subscriber is an “accredited investor” within the meaning of NI 45-106 by virtue of satisfying the indicated criterion as set out in paragraphs (d), (f) or (g) of Appendix “A” to this certificate, the Subscriber has provided the Issuer with the signed risk acknowledgement form set out in Appendix “B” to this certificate;

	
II. MINIMUM AMOUNT INVESTMENT

 

	
(a)  

	
the Subscriber is not an individual as that term is defined in applicable Canadian securities laws.

	
 

(b)  

 

	
 

the Subscriber is purchasing the Shares as principal for its own account and not for the benefit of any other person;

	
 

(c)  

	
 

the Shares have an acquisition cost to the Subscriber of not less than $150,000, payable in cash at the Closing; and

	
 

(d)  

	
 

the Subscriber was not created and is not being used solely to purchase or hold securities in reliance on the prospectus exemption provided under Section 2.10 of NI 45-106, it pre-existed the Offering and has a bona fide purpose other than investment in the Shares.

 

For the purposes of the Canadian Investor Questionnaire and Appendix “A” attached to the Canadian Investor Questionnaire:

 

(a) an issuer is “affiliated” with another issuer if

 

		(i)	
one of them is the subsidiary of the other, or

 

		(ii)	
each of them is controlled by the same person;

 

(b) “control person” means

 

		(i)	
a person who holds a sufficient number of the voting rights attached to all outstanding voting securities of an issuer to affect materially the control of the issuer, or

 

		(ii)	
each person in a combination of persons, acting in concert by virtue of an agreement, arrangement, commitment or understanding, which holds in total a sufficient number of the voting rights attached to all outstanding voting securities of an issuer to affect materially the control of the issuer,

 

and, if a person or combination of persons holds more than 20% of the voting rights attached to all outstanding voting securities of an issuer, the person or combination of persons is deemed, in the absence of evidence to the contrary, to hold a sufficient number of the voting rights to affect materially the control of the issuer;

 

(c) “director” means

 

- 15 -

 

 

		(i)	
a member of the board of directors of a company or an individual who performs similar functions for a company, and

 

		(ii)	
with respect to a person that is not a company, an individual who performs functions similar to those of a director of a company;

 

(d) “eligibility adviser” means

 

		(i)	
a person that is registered as an investment dealer and authorized to give advice with respect to the type of security being distributed; and

 

		(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:

 

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

 

		(B)	
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;

 

(e) “executive officer” means, for an issuer, an individual who is

 

		(i)	
a chair, vice-chair or president,

 

		(ii)	
a vice-president in charge of a principal business unit, division or function including sales, finance or production, or

 

		(iii)	
performing a policy-making function in respect of the issuer;

 

(f) “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;

 

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

 

(h) “founder” means, in respect of an issuer, a person who,

 

- 16 -

 

 

		(i)	
acting alone, in conjunction, or in concert with one or more persons, directly or indirectly, takes the initiative in founding, organizing or substantially reorganizing the business of the issuer, and

 

		(ii)	
at the time of the distribution or trade is actively involved in the business of the issuer;

 

		(i)	
“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;

 

		(j)	
“individual” means a natural person, but does not include

 

		(i)	
a partnership, unincorporated association, unincorporated syndicate, unincorporated organization or trust, or

 

		(ii)	
a natural person in the person's capacity as a trustee, executor, administrator or personal or other legal representative;

 

		(k)	
“investment fund” means a mutual fund or a non-redeemable investment fund, and, for great certainty in British Columbia, includes an employee venture capital corporation and a venture capital corporation as such terms are defined in National Instrument 81-106 Investment Fund Continuous Disclosure;

 

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

 

		(m)	
“non-redeemable investment fund” means an issuer:

 

(i) whose primary purpose is to invest money provided by its securityholders;

 

(ii) that does not invest

 

		(A)	
for the purpose of exercising or seeking to exercise control of an issuer, other than an issuer that is a mutual fund or a non-redeemable investment fund, or

 

		(B)	
for the purpose of being actively involved in the management of any issuer in which it invests, other than an issuer that is a mutual fund or a non-redeemable investment fund, and

 

(iii) that is not a mutual fund;

 

(n) “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

 

- 17 -

 

 

		(iv)	
an individual or other person in that person’s capacity as a trustee, executor, administrator or personal or other legal representative;

 

(o) “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; and

 

(p) “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).

 

The Subscriber agrees that the above representations and warranties will be true and correct both as of the execution of this Questionnaire and as of the Closing and acknowledges that they will survive the completion of the issue of the Shares.

 

The Subscriber acknowledges that the foregoing representations and warranties are made by the Subscriber with the intent that they be relied upon in determining the suitability of the Subscriber to acquire the Shares and that this Questionnaire is incorporated into and forms part of the Agreement.

 

The Subscriber undertakes to immediately notify the Issuer of any change in any statement or other information relating to the Subscriber set forth in the Agreement or in this Questionnaire which takes place prior to the Closing.

 

By completing this Questionnaire, the Subscriber authorizes the indirect collection of this information by each applicable regulatory authority or regulator and acknowledges that such information is made available to the public under applicable laws.

 

DATED as of _______ day of __________________, 2017.

 

	 	 	
X

	 	 	
Signature of individual (if Subscriber is an individual)

	 	 	 
	 	 	 
	 	 	
X

	 	 	
Authorized signatory (if Subscriber is not an individual)

	 	 	 
	 	 	 
	 	 	
Name of Subscriber (please print)

	 	 	 
	 	 	 
	 	 	
Name of authorized signatory (please print)

 

- 18 -

 

APPENDIX “A”

 TO CANADIAN INVESTOR QUESTIONNAIRE

 

Accredited Investors only: Please check the appropriate box and initial

	
☐

	
(a)  

	
except in Ontario, a person registered under the securities legislation of a jurisdiction of Canada as an adviser or dealer,

 

	
☐

	
(b)  

	
an individual registered under the securities legislation of a jurisdiction of Canada as a representative of a person referred to in paragraph (a),

 

	
☐

	
(c)  

	
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),

 

	
☐

	
(d)  

	
an individual who, either alone or with a spouse, beneficially owns financial assets having an aggregate realizable value that, before taxes but net of any related liabilities, exceeds $1,000,000 (YOU MUST INDICATE YOUR FINANCIAL ASSETS HERE: $__________________________ ☐ WITH SPOUSE / ☐ WITHOUT SPOUSE AND ALSO COMPLETE THE RISK ACKNOWLEDGEMENT FORM IN APPENDIX “B” ATTACHED TO THIS CERTIFICATE),

 

	
☐

	
(e)  

	
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,

 

	
☐

	
(f)  

	
an individual whose net income before taxes exceeded $200,000 in each of the 2 most recent calendar years or whose net income before taxes combined with that of a spouse exceeded $300,000 in each of the 2 most recent calendar years and who, in either case, reasonably expects to exceed that net income level in the current calendar year (YOU MUST INDICATE YOUR NET INCOME HERE: $__________________________ ☐ WITH SPOUSE / ☐ WITHOUT SPOUSE AND ALSO COMPLETE THE RISK ACKNOWLEDGEMENT FORM IN APPENDIX “B” ATTACHED TO THIS CERTIFICATE),

 

	
☐

	
(g)  

	
an individual who, either alone or with a spouse, has net assets of at least $5,000,000 (YOU MUST INDICATE YOUR NET ASSETS HERE: $__________________________ ☐ WITH SPOUSE / ☐ WITHOUT SPOUSE AND ALSO COMPLETE THE RISK ACKNOWLEDGEMENT FORM IN APPENDIX “B” ATTACHED TO THIS CERTIFICATE),

 

	
☐

	
(h)  

	
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 or hold securities as an accredited investor as defined in this paragraph (h),

 

	
☐

	
(i)  

	
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] of NI 45-106, 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,

 

 

- 19 -

 

 

 

	
☐

	
(j)  

	
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,

 

	
☐

	
(k)  

	
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,

 

	
☐

	
(l)  

	
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,

 

	
☐

	
(m)  

	
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,

 

	
☐

	
(n)  

	
an entity organized in a foreign jurisdiction that is analogous to the entity referred to in paragraph (a) in form and function,

 

	
☐

	
(o)  

	
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,

 

	
☐

	
(p)  

	
an investment fund that is advised by a person registered as an adviser or a person that is exempt from registration as an adviser,

 

	
☐

	
(q)  

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

 

	
☐

	
(r)  

	
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.

 

Dated _____________________________, 2017.

 

	 	 	
X

	 	 	
Signature of individual (if Subscriber is an individual)

	 	 	 
	 	 	 
	 	 	
X

	 	 	
Authorized signatory (if Subscriber is not an individual)

	 	 	 
	 	 	 
	 	 	
Name of Subscriber (please print)

	 	 	 
	 	 	 
	 	 	
Name of authorized signatory (please print)

 

 

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APPENDIX “B”

 TO CANADIAN INVESTOR QUESTIONNAIRE

 

Form 45-106F9

 

Form of Individual Accredited Investors

 

	
WARNING!

This investment is risky. Don’t invest unless you can afford to lose all the money you pay for this investment.

 

	
SECTION 1 TO BE COMPLETED BY THE ISSUER OR SELLING SECURITY HOLDER

 

	
1. About your investment

 

	
Type of securities: Shares of Common Stock

	
Issuer: AppCoin Innovations Inc.

 

	
Purchased from: Issuer

 

	
SECTIONS 2 TO 4 TO BE COMPLETED BY THE PURCHASER

 

	
2. Risk acknowledgement

	
This investment is risky. Initial that you understand that:

	
Your

 initials

	
 

Risk of loss – You could lose your entire investment of $__________. [Instruction: Insert the total dollar amount of the investment.]

 

	 
	
Liquidity risk – You may not be able to sell your investment quickly – or at all.

 

	 
	
Lack of information – You may receive little or no information about your investment.

 

	 
	
Lack of advice – You will not receive advice from the salesperson about whether this investment is suitable for you unless the salesperson is registered. The salesperson is the person who meets with, or provides information to, you about making this investment. To check whether the salesperson is registered, go to www.aretheyregistered.ca.

 

	 
	
3. Accredited investor status

 

	
You must meet at least one of the following criteria to be able to make this investment. Initial the statement that applies to you. (You may initial more than one statement.) The person identified in section 6 is responsible for ensuring that you meet the definition of accredited investor. That person, or the salesperson identified in section 5, can help you if you have questions about whether you meet these criteria.

	
Your

 initials

	
 

· Your net income before taxes was more than $200,000 in each of the 2 most recent calendar years, and you expect it to be more than $200,000 in the current calendar year. (You can find your net income before taxes on your personal income tax return.)

 

	 
	
 

· Your net income before taxes combined with your spouse’s was more than $300,000 in each of the 2 most recent calendar years, and you expect your combined net income before taxes to be more than $300,000 in the current calendar year.

 

	 

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· Either alone or with your spouse, you own more than $1 million in cash and securities, after subtracting any debt related to the cash and securities.

 

	 
	
 

· Either alone or with your spouse, you have net assets worth more than $5 million. (Your net assets are your total assets (including real estate) minus your total debt.)

 

	 
	
4. Your name and signature

 

	
By signing this form, you confirm that you have read this form and you understand the risks of making this investment as identified in this form.

 

	
First and last name (please print):

 

	
Signature:

	
Date:

 

	
SECTION 5 TO BE COMPLETED BY THE SALESPERSON

 

	
5. Salesperson information

 

	
First and last name of salesperson (please print):

 

 

	
Telephone:

 

	
Email:

	
Name of firm (if registered):  not applicable

 

	
SECTION 6 TO BE COMPLETED BY THE ISSUER OR SELLING SECURITY HOLDER

 

	
6. For more information about this investment

 

	
For investment in a non-investment fund

	
AppCoin Innovations Inc.

	
3250 Oakland Hills Court

 Fairfield, CA  94534

USA

	
James P. Geiskopf

	
(707) 208-6368

	
jgeiskopf@aol.com

	 
	
For more information about prospectus exemptions, contact your local securities regulator. You can find contact information at www.securities-administrators.ca.

 

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EXHIBIT B

 

UNITED STATES ACCREDITED INVESTOR QUESTIONNAIRE

 

Capitalized terms used in this U.S. Questionnaire (this “Questionnaire”) and not specifically defined have the meaning ascribed to them in the Private Placement Subscription Agreement between the Subscriber and the Issuer to which this Exhibit B is attached.

 

This Questionnaire applies only to persons that are U.S. Purchasers.  A “U.S. Purchaser” is (a) any U.S. Person, (b) any person purchasing the Shares on behalf of any U.S. Person, (c) any person that receives or received an offer of the Shares while in the United States, or (d) any person that is in the United States at the time the Subscriber’s buy order was made or this Agreement was executed or delivered.

 

The Subscriber understands and agrees that none of the Shares have been or will be registered under the 1933 Act, or applicable state, provincial or foreign securities laws, and the Shares are being offered and sold to the Subscriber in reliance upon the exemption provided in Section 4(2) of the 1933 Act and Rule 506 of Regulation D under the 1933 Act for non-public offerings. The Shares are being offered and sold within the United States only to “accredited investors” as defined in Rule 501(a) of Regulation D.  The Shares offered hereby are not transferable except in accordance with the restrictions described herein.

 

The Subscriber represents, warrants, covenants and certifies (which representations, warranties, covenants and certifications will survive the Closing) to the Issuer (and acknowledges that the Issuer is relying thereon) that:

	
 

1.

	
 

it is not resident in Canada;

	
 

2.

	
 

it has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Shares and it is able to bear the economic risk of loss of its entire investment;

	
 

3.

	
 

the Issuer has provided to it the opportunity to ask questions and receive answers concerning the terms and conditions of the Offering and it has had access to such information concerning the Issuer as it has considered necessary or appropriate in connection with its investment decision to acquire the Shares;

	
 

4.

	
 

it is acquiring the Shares for its own account, for investment purposes only and not with a view to any resale, distribution or other disposition of the Shares in violation of the United States securities laws;

	
 

5.

	
 

it (i) has adequate net worth and means of providing for its current financial needs and possible personal contingencies, (ii) has no need for liquidity in this investment, and (iii) is able to bear the economic risks of an investment in the Shares for an indefinite period of time;

	
 

6.

	
 

if the Subscriber is an individual (that is, a natural person and not a corporation, partnership, trust or other entity), then it satisfies one or more of the categories indicated below (please place an “X” on the appropriate lines):

 

	
___________

	
a natural person whose individual net worth, or joint net worth with their spouse, exceeds US$1,000,000, excluding the value of the primary residence of such person(s) and the related amount of indebtedness secured by the primary residence up to its fair market value,

 

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___________

	
a natural person who had an individual income in excess of US$200,000 in each of the two most recent years, or joint income with their spouse in excess of US$300,000 in each of those years, and has a reasonable expectation of reaching the same income level in the current year, or

	
 

___________

	
a director or executive officer of the Issuer;

	
 

7.

	
 

if the Subscriber is a corporation, partnership, trust or other entity), then it satisfies one or more of the categories indicated below (please place an “X” on the appropriate lines):

 

	
___________

	
an organization described in Section 501(c)(3) of the United States Internal Revenue Code, a corporation, a Massachusetts or similar business trust or partnership, not formed for the specific purpose of acquiring the Shares, with total assets in excess of US$5,000,000,

 

	
___________

	
a “bank” as defined under Section (3)(a)(2) of the 1933 Act or savings and loan association or other institution as defined in Section 3(a)(5)(A) of the 1933 Act acting in its individual or fiduciary capacity; a broker dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934 (United States); an insurance company as defined in Section 2(13) of the 1933 Act; an investment company registered under the Investment Company Act of 1940 (United States) or a business development company as defined in Section 2(a)(48) of such Act; a Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958 (United States); a plan with total assets in excess of US$5,000,000 established and maintained by a state, a political subdivision thereof, or an agency or instrumentality of a state or a political subdivision thereof, for the benefit of its employees; an employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 (United States) whose investment decisions are 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 if the employee benefit plan has total assets in excess of US$5,000,000, or, if a self-directed plan, whose investment decisions are made solely by persons that are accredited investors,

 

	
___________

	
a private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940 (United States),

 

	
___________

	
a trust with total assets in excess of US$5,000,000, not formed for the specific purpose of acquiring the Shares, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii) under the 1933 Act, or

 

	
___________

	
an entity in which all of the equity owners satisfy the requirements of one or more of the categories set forth in Section 6 above.

	
 

8.

	
 

it has not purchased the Shares as a result of any form of general solicitation or general advertising, including advertisements, articles, notices or other communications published in any newspaper, magazine or similar media or broadcast over radio, internet, television or other form of telecommunications, or any seminar or meeting whose attendees have been invited by general solicitation or general advertising;

 

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9.

	
 

if the Subscriber decides to offer, sell or otherwise transfer any of the Shares, it will not offer, sell or otherwise transfer any of such Shares directly or indirectly, unless:

	
 

(a)

	
 

the sale is to the Issuer,

	
 

(b)

	
 

the sale is made outside the United States in a transaction meeting the requirements of Rule 904 of Regulation S under the 1933 Act and in compliance with applicable local laws and regulations in which such sale is made;

	
 

(c)

	
 

the sale is made pursuant to the exemption from the registration requirements under the 1933 Act provided by Rule 144 thereunder and in accordance with any applicable state securities or “blue sky” laws, or

	
 

(d)

	
 

the Shares are sold in a transaction that does not require registration under the 1933 Act or any applicable state laws and regulations governing the offer and sale of securities, and

	
 

(e)

	
 

it has prior to such sale pursuant to subsection (c) or (d) furnished to the Issuer an opinion of counsel of recognized standing reasonably satisfactory to the Issuer, to such effect;

	
 

10.

	
 

it understands and acknowledges that upon the issuance thereof, and until such time as the same is no longer required under the applicable requirements of the 1933 Act or applicable U.S. state laws and regulations, the certificates representing the Shares, and all securities issued in exchange therefor or in substitution thereof, will bear a legend in substantially the following form:

 

“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”).  THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF APPCOIN INNOVATIONS INC. (THE “ISSUER”) THAT SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE ISSUER; (B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT OR (C) IN ACCORDANCE WITH THE EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS; OR (D) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS, AND, IN THE CASE OF PARAGRAPH (C) OR (D), THE SELLER FURNISHES TO THE ISSUER AN OPINION OF COUNSEL OF RECOGNIZED STANDING IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO SUCH EFFECT.  DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE GOOD DELIVERY IN SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN CANADA.”

 

Delivery of certificates bearing such a legend may not constitute “good delivery” in settlement of transactions on Canadian stock exchanges or over-the-counter markets. If the Issuer is a “foreign issuer” with no “substantial U.S. market interest” (all within the meaning of Regulation S under the 1933 Act) at the time of sale, a new certificate, which will constitute “good delivery”, will be made available to the purchaser upon provision by the Subscriber of a declaration together with such other evidence of the availability of an exemption as the Issuer or its transfer agent may reasonably require;

 

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11.

	
 

it understands and agrees that there may be material tax consequences to the Subscriber of an acquisition or disposition of any of the Shares. The Issuer gives no opinion and makes no representation with respect to the tax consequences to the Subscriber under United States, state, local or foreign tax law of the Subscriber’s acquisition or disposition of the Shares;

	
 

12.

	
 

it consents to the Issuer making a notation on its records or giving instructions to any transfer agent of the Issuer in order to implement the restrictions on transfer set forth and described in this Questionnaire and the Agreement;

	
 

13.

	
 

it is resident in the United States of America, its territories and possessions or any state of the United States or the District of Columbia (collectively the “United States”), is a “U.S. Person” as such term is defined in Regulation S or was in the United States at the time the Shares were offered or the Agreement was executed; and

	
 

14.

	
 

it understands that the Issuer has no obligation to register any of the Shares or to take action so as to permit sales pursuant to the 1933 Act (including Rule 144 thereunder).

 

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

Dated _____________________________, 2017.

 

	 	 	
X

	 	 	
Signature of individual (if Subscriber is an individual)

	 	 	 
	 	 	 
	 	 	
X

	 	 	
Authorized signatory (if Subscriber is not an individual)

	 	 	 
	 	 	 
	 	 	
Name of Subscriber (please print)

	 	 	 
	 	 	 
	 	 	
Name of authorized signatory (please print)

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