Document:

Blueprint

 

 Exhibit 4.2

 

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY
NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE
ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN
OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER),
IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES
MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR
OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
SECURITIES.

 

	
 

	

Right
to Purchase ___________ shares of Common Stock of Blockchain
Industries, Inc. (subject to adjustment as provided
herein)

 

COMMON STOCK PURCHASE WARRANT

 

No.                                                                                                 

Issue Date:
DATE

 

 

BLOCKCHAIN INDUSTRIES, INC., a corporation organized under
the laws of the State of Nevada (the “Company”), hereby certifies that,
for value received, [GRANTEE], with an address at
[ADDRESS], or its assigns (the
“Holder”), is
entitled, subject to the terms set forth below, to purchase from
the Company at any time after the Issue Date until 5:00 p.m., E.T.
on the five (5) year anniversary of the Issue Date (the
“Expiration
Date”), up to [SHARES] fully paid and non-assessable
shares of the Company’s common stock, par value $0.001 per
share (the “Common Stock”) at a per share purchase
price of $______. The aforedescribed purchase price per share, as
adjusted from time to time as herein provided, is referred to
herein as the “Purchase
Price.” The number and character of such shares of
Common Stock and the Purchase Price are subject to adjustment as
provided herein. The Company may reduce the Purchase Price for some
or all of the Warrants, temporarily or permanently, provided such reduction is made as to
all outstanding Warrants for all Holders of such
Warrants. Capitalized terms used and not otherwise defined
herein shall have the meanings set forth in that certain Securities
Purchase Agreement (the “Purchase Agreement”) entered into
by the Company and Holder pursuant to which this Warrant has been
issued.

 

As used
herein the following terms, unless the context otherwise requires,
have the following respective meanings:

 

(a)

The term
“Company” shall
mean Blockchain Industries, Inc., a Nevada
corporation.

 

(b) The
term “Common
Stock” includes (i) the Company’s Common Stock,
$0.001 par value per share and (ii) any other securities into which
or for which any of the securities described in (i) may be
converted or exchanged pursuant to a plan of recapitalization,
reorganization, merger, sale of assets or otherwise.

 

(c) The
term “Other
Securities” refers to any stock (other than Common
Stock) and other securities of the Company or any other person
(corporate or otherwise) which the holder of the Warrant at any
time shall be entitled to receive, or shall have received, on the
exercise of the Warrant, in lieu of or in addition to Common Stock,
or which at any time shall be issuable or shall have been issued in
exchange for or in replacement of Common Stock or Other Securities
pursuant to Section
3 hereof or otherwise.

 

(d) The
term “Warrant
Shares” shall mean the Common Stock issuable upon
exercise of this Warrant.

  

1.
Exercise of
Warrant.

 

1.1.
Number of Shares Issuable
upon Exercise. From and after the Issue Date through and
including the Expiration Date, the Holder shall be entitled to
receive, upon exercise of this Warrant in whole in accordance with
the terms of Section
1.2 hereof or upon exercise of this Warrant in part in
accordance with Section
1.3 hereof, shares of Common Stock of the Company, subject
to adjustment pursuant to Section 3 hereof.

 

1.2.
Full Exercise. This
Warrant may be exercised in full by the Holder hereof by delivery
to the Company of an original or facsimile copy of the form of
subscription attached as Exhibit A hereto (the
“Subscription
Form”) duly executed by such Holder and delivered
within two (2) business days thereafter of payment, in cash, wire
transfer or by certified or official bank check payable to the
order of the Company, in the amount obtained by multiplying the
number of shares of Common Stock for which this Warrant is then
exercisable by the Purchase Price then in effect. The original
Warrant is not required to be surrendered to the Company until it
has been fully exercised.

 

1.3.
Partial Exercise.
This Warrant may be exercised in part (but not for a fractional
share) by delivery of a Subscription Form in the manner and at the
place provided in Section
1.2 hereof, except that the amount payable by the Holder on
such partial exercise shall be the amount obtained by multiplying
(a) the number of whole shares of Common Stock designated by the
Holder in the Subscription Form by (b) the Purchase Price then in
effect. On any such partial exercise, upon the written request of
the Holder, provided the Holder has surrendered the original
Warrant, the Company, at its expense, will forthwith issue and
deliver to or upon the order of the Holder a new Warrant of like
tenor, in the name of the Holder hereof or as such Holder (upon
payment by such Holder of any applicable transfer taxes) may
request, the whole number of shares of Common Stock for which such
Warrant may still be exercised.

 

1.4.
Fair Market Value.
For purposes of this Warrant, the Fair Market Value of a share of Common
Stock as of a particular date (the “Determination Date”) shall
mean:

 

(a) If
the Company’s Common Stock is traded on an exchange or on the
NASDAQ Global Market, NASDAQ Global Select Market, the NASDAQ
Capital Market, the New York Stock Exchange or the NYSE AMEX
Equities, then the average of the closing sale prices of the Common
Stock for the five (5) trading days immediately prior to (but not
including) the Determination Date;

 

(b) If
the Company’s Common Stock is not traded on an exchange or on
the NASDAQ Global Market, NASDAQ Global Select Market, the NASDAQ
Capital Market, the New York Stock Exchange or the NYSE AMEX
Equities, but is traded on the OTC Bulletin Board or in the
over-the-counter market or Pink Sheets, then the average of the
closing bid and ask prices reported for the five (5) trading days
immediately prior to (but not including) the Determination
Date;

 

(c)
Except as provided in clause (d) below, if the Company’s
Common Stock is not publicly traded, then as the Holder and the
Company shall mutually agree, or in the absence of such an
agreement after good faith efforts of the Company and the Holder to
reach an agreement, by arbitration in accordance with the rules
then standing of the American Arbitration Association, before a
single arbitrator to be chosen from a panel of persons qualified by
education and training to pass on the matter to be decided;
or

 

(d) If
the Determination Date is the date of a liquidation, dissolution or
winding up, or any event deemed to be a liquidation, dissolution or
winding up pursuant to the Company’s charter, then all
amounts to be payable per share to holders of the Common Stock
pursuant to the charter in the event of such liquidation,
dissolution or winding up, plus all other amounts to be payable per
share in respect of the Common Stock in liquidation under the
charter, assuming for the purposes of this clause (d) that all of
the shares of Common Stock then issuable upon exercise of all of
the Warrants are outstanding at the Determination
Date.

 

1.5.
Company
Acknowledgment. The Company will, at the time of the
exercise of the Warrant, upon the request of the Holder hereof,
acknowledge in writing its continuing obligation to afford to such
Holder any rights to which such Holder shall continue to be
entitled after such exercise in accordance with the provisions of
this Warrant. If the Holder shall fail to make any such request,
such failure shall not affect the continuing obligation of the
Company to afford to such Holder any such rights.

 

1.6.
Delivery of Stock
Certificates, etc. on Exercise. The Company agrees that,
provided the purchase price listed in the Subscription Form is
received as specified in Section 1 hereof, the shares of
Common Stock purchased upon exercise of this Warrant shall be
deemed to be issued to the Holder hereof as the record owner of
such shares as of the close of business on the date on which
delivery of a Subscription Form shall have occurred and payment
made for such shares as aforesaid. As soon as practicable after the
exercise of this Warrant in full or in part and the payment is
made, and in any event within five (5) business days thereafter
(“Warrant Share Delivery
Date”), the Company, at its expense (including the
payment by it of any applicable issue taxes), will cause to be
issued in the name of, and delivered to, the Holder hereof, or as
such Holder (upon payment by such Holder of any applicable transfer
taxes) may direct in compliance with applicable securities laws, a
certificate or certificates for the number of duly and validly
issued, fully paid and non-assessable shares of Common Stock (or
Other Securities) to which such Holder shall be entitled on such
exercise, plus, in lieu of any fractional share to which such
Holder would otherwise be entitled, cash equal to such fraction
multiplied by the then Fair Market Value of one full share of
Common Stock, together with any other stock or other securities and
property (including cash, where applicable) to which such Holder is
entitled upon such exercise pursuant to Section 1 hereof or otherwise.
The Company understands that a delay in the delivery of the Warrant
Shares after the Warrant Share Delivery Date could result in
economic loss to the Holder. As compensation to the Holder for such
loss, the Company agrees to pay (as liquidated damages and not as a
penalty) to the Holder for late issuance of Warrant Shares upon
exercise of this Warrant the proportionate amount of $100 per
business day after the Warrant Share Delivery Date for each $10,000
of Purchase Price of Warrant Shares for which this Warrant is
exercised which are not timely delivered. The Company shall
promptly pay any payments incurred under this Section in
immediately available funds upon demand. Furthermore, in addition
to any other remedies which may be available to the Holder, in the
event that the Company fails for any reason to effect delivery of
the Warrant Shares by the Warrant Share Delivery Date, the Holder
may revoke all or part of the relevant Warrant exercise by delivery
of a written notice to such effect to the Company, whereupon the
Company and the Holder shall each be restored to their respective
positions immediately prior to the exercise of the relevant portion
of this Warrant, except that the liquidated damages described above
shall be payable through the date notice of revocation or
rescission is given to the Company.

 

2.
Payment of Purchase Price;
Cashless Exercise.

 

(a)
Payment upon exercise may be made at the written option of the
Holder either in (i) cash, wire transfer or by certified or
official bank check payable to the order of the Company equal to
the applicable aggregate Purchase Price, (ii) by delivery of Common
Stock issuable upon exercise of the Warrants in accordance with
Section (b) below or (iii) by a combination of any of the foregoing
methods, in each case accompanied by delivery of a properly
endorsed Subscription Form, for the number of Common Stock
specified in such form (as such exercise number shall be adjusted
to reflect any adjustment in the total number of shares of Common
Stock issuable to the Holder per the terms of this Warrant) and the
Holder shall thereupon be entitled to receive the number of duly
authorized, validly issued, fully-paid and non-assessable shares of
Common Stock (or Other Securities) determined as provided herein.
Notwithstanding the immediately preceding sentence, payment upon
exercise may be made in the manner described in Section 2(b) below only with
respect to Warrant Shares not included for unrestricted
public resale in an effective registration statement on the date
notice of exercise is given by the Holder.

 

(b) If
the Fair Market Value of one share of Common Stock is greater than
the Purchase Price (at the date of calculation as set forth below),
in lieu of exercising this Warrant for cash, the Holder, eligible
at any time, may elect to receive shares equal to the value (as
determined below) of this Warrant (or the portion thereof being
cancelled) by delivery of a properly endorsed Subscription Form
delivered to the Company by any means described in Section 11 hereof, in which
event the Company shall issue to the holder a number of shares of
Common Stock computed using the following formula:

 

X=Y (A-B)

          A

 

	
 

	

Where
X= the number of shares of Common Stock to be issued to the
Holder

	
 

	
 

	
 

	
 

	

Y=

	

the
number of shares of Common Stock purchasable under the Warrant or,
if only a portion of the Warrant is being exercised, the portion of
the Warrant being exercised (at the date of such
calculation)

 

	
 

	

A=

	

Fair
Market Value

 

	
 

	

B=

	

Purchase
Price (as adjusted to the date of such calculation)

 

For
purposes of Rule 144 promulgated under the 1933 Act, it is
intended, understood and acknowledged that the Warrant Shares
issued in a cashless exercise transaction in the manner described
above shall be deemed to have been acquired by the Holder, and the
holding period for the Warrant Shares shall be deemed to have
commenced, on the date this Warrant was originally
issued.

 

 

3.
Extraordinary Events
Regarding Common Stock. In the event that the Company shall
(a) issue additional shares of Common Stock as a dividend or other
distribution on outstanding Common Stock, (b) subdivide its
outstanding shares of Common Stock, or (c) combine its outstanding
shares of the Common Stock into a smaller number of shares of
Common Stock, then, in each such event, the Purchase Price shall,
simultaneously with the happening of such event, be adjusted by
multiplying the then Purchase Price by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding
immediately prior to such event and the denominator of which shall
be the number of shares of Common Stock outstanding immediately
after such event, and the product so obtained shall thereafter be
the Purchase Price then in effect. The Purchase Price, as so
adjusted, shall be readjusted in the same manner upon the happening
of any successive event or events described in this Section 3. The number of shares
of Common Stock that the Holder of this Warrant shall thereafter,
on the exercise hereof, be entitled to receive shall be adjusted to
a number determined by multiplying the number of shares of Common
Stock that would otherwise (but for the provisions of this
Section 3) be
issuable on such exercise by a fraction of which (a) the numerator
is the Purchase Price that would otherwise (but for the provisions
of this Section 3)
be in effect, and (b) the denominator is the Purchase Price in
effect on the date of such exercise.

 

4.
Certificate as to
Adjustments. In each case of any adjustment or readjustment
in the shares of Common Stock (or Other Securities) issuable on the
exercise of the Warrants or in the Purchase Price, the Company at
its expense will promptly cause its Chief Financial Officer or
other appropriate designee to compute such adjustment or
readjustment in accordance with the terms of the Warrant and
prepare a certificate setting forth such adjustment or readjustment
and showing in detail the facts upon which such adjustment or
readjustment is based, including a statement of (a) the
consideration received or receivable by the Company for any
additional shares of Common Stock (or Other Securities) issued or
sold or deemed to have been issued or sold, (b) the number of
shares of Common Stock (or Other Securities) outstanding or deemed
to be outstanding, and (c) the Purchase Price and the number of
shares of Common Stock to be received upon exercise of this
Warrant, in effect immediately prior to such adjustment or
readjustment and as adjusted or readjusted as provided in this
Warrant. The Company will forthwith mail a copy of each such
certificate to the Holder of the Warrant. Holder will be entitled
to the benefit of the adjustment regardless of the giving of such
notice. The timely giving of such notice to Holder is a material
obligation of the Company.

 

5.
Reservation of Stock, etc.
Issuable on Exercise of Warrant; Financial Statements. The
Company will at all times reserve and keep available, solely for
issuance and delivery on the exercise of the Warrants, all shares
of Common Stock (or Other Securities) from time to time issuable on
the exercise of the Warrant. This Warrant entitles the Holder
hereof, upon written request, to receive copies of all financial
and other information distributed or required to be distributed to
the holders of the Company’s Common Stock.

 

6.
Assignment; Exchange of
Warrant. Subject to compliance with applicable securities
laws, this Warrant, and the rights evidenced hereby, may be
transferred by any registered holder hereof (a “Transferor”). On the surrender for
exchange of this Warrant, with the Transferor’s endorsement
in the form of Exhibit
B attached hereto (the “Transferor Endorsement Form”) and
together with an opinion of counsel reasonably satisfactory to the
Company that the transfer of this Warrant will be in compliance
with applicable securities laws, the Company will issue and deliver
to or on the order of the Transferor thereof a new Warrant or
Warrants of like tenor, in the name of the Transferor and/or the
transferee(s) specified in such Transferor Endorsement Form (each a
“Transferee”),
calling in the aggregate on the face or faces thereof for the
number of shares of Common Stock called for on the face or faces of
the Warrant so surrendered by the Transferor.

 

7.
Replacement of
Warrant. On receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction or mutilation of this
Warrant and, in the case of any such loss, theft or destruction of
this Warrant, on delivery of an indemnity agreement or security
reasonably satisfactory in form and amount to the Company or, in
the case of any such mutilation, on surrender and cancellation of
this Warrant, the Company at its expense, twice only, will execute
and deliver, in lieu thereof, a new Warrant of like
tenor.

 

8.
Maximum Exercise.
The Holder shall not be entitled to exercise this Warrant on an
exercise date, in connection with that number of shares of Common
Stock which would be in excess of the sum of (i) the number of
shares of Common Stock beneficially owned by the Holder and its
affiliates on an exercise date, and (ii) the number of shares of
Common Stock issuable upon the exercise of this Warrant with
respect to which the determination of this limitation is being made
on an exercise date, which would result in beneficial ownership by
the Holder and its affiliates of more than 4.99% of the outstanding
shares of Common Stock on such date. For the purposes of the
immediately preceding sentence, beneficial ownership shall be
determined in accordance with Section 13(d) of the 1934 Act and
Rule 13d-3 thereunder. Subject to the foregoing, the Holder shall
not be limited to aggregate exercises which would result in the
issuance of more than 4.99%. The Holder may allocate which of the
equity of the Company deemed beneficially owned by the Holder shall
be included in the 4.99% amount described above and which shall be
allocated to the excess above 4.99%. The restriction described in
this paragraph may be waived, in whole or in part, upon sixty-one
(61) days’ prior notice from the Holder to the Company to
increase such percentage.

	
 

	
 

 

9.
Transfer on the
Company’s Books. Until this Warrant is transferred on
the books of the Company, the Company may treat the registered
holder hereof as the absolute owner hereof for all purposes,
notwithstanding any notice to the contrary.

  

10.
Notices. All
notices, demands, requests, consents, approvals, and other
communications required or permitted hereunder shall be in writing
and, unless otherwise specified herein, shall be (i) personally
served, (ii) deposited in the mail, registered or certified, return
receipt requested, postage prepaid, (iii) delivered by reputable
air courier service with charges prepaid, or (iv) transmitted by
hand delivery, email, or facsimile addressed as set forth below or
to such other address as such party shall have specified most
recently by written notice. Any notice or other communication
required or permitted to be given hereunder shall be deemed
effective (a) upon hand delivery or delivery by email or delivery
by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated
below (if delivered on a business day during normal business hours
where such notice is to be received), or the first business day
following such delivery (if delivered other than on a business day
during normal business hours where such notice is to be received),
or (b) on the second business day following the date of mailing by
express courier service, fully prepaid, addressed to such address,
or upon actual receipt of such mailing, whichever shall first
occur. The addresses for such communications shall be: (i) if to
the Company, to Blockchain Industries, Inc., 1730 Arizona Ave.,
Suite 220, Santa Monica, California 90401, Attn: Patrick Moynihan,
and (ii) if to the Holder, to the address and facsimile number
listed on the first paragraph of this Warrant.

 

11.
Law Governing This
Warrant. This Warrant shall be governed by and construed in
accordance with the laws of the State of New York without regard to
its principles of conflicts of laws or of any other State. Any
action brought by either party hereto against the other concerning
the transactions contemplated by this Warrant shall be brought only
in the state courts of New York or in the federal courts located in
the state of New York. The parties to this Warrant hereby
irrevocably waive any objection to jurisdiction and venue of any
action instituted hereunder and shall not assert any defense based
on lack of jurisdiction or venue or based upon forum non conveniens.
The Company and the Holder waive
trial by jury. The prevailing party shall be entitled to
recover from the other party its reasonable attorney’s fees
and costs. In the event that any provision of this Warrant or any
other agreement delivered in connection herewith is invalid or
unenforceable under any applicable statute or rule of law, then
such provision shall be deemed inoperative to the extent that it
may conflict therewith and shall be deemed modified to conform to,
such statute or rule of law. Any such provision which may prove
invalid or unenforceable under any law shall not affect the
validity or enforceability of any other provision of any agreement.
Each party hereto hereby irrevocably waives personal service of
process and consents to process being served in any suit, action or
proceeding in connection with this Warrant or any other transaction
document by mailing a copy thereof via registered or certified mail
or overnight delivery (with evidence of delivery) to such party at
the address in effect for notices to it under this Warrant and
agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in
any other manner permitted by law.

 

[-Signature Page Follows-]

 

	
 

	
 

 

 

 

IN
WITNESS WHEREOF, the Company has executed this Warrant as of the
date first written above.

 

	
 

	

BLOCKCHAIN INDUSTRIES, INC.

	
 

	
 

	
 

	
 

	
 

	

By:

	
 

	
 

	
 

	

Name: 

	

Patrick
Moynihan

	
 

	
 

	

Title: 

	

Chief
Executive Officer

	
 

 

	
 

 

 

 

 

 

	
 

 

Exhibit A

FORM OF
EXERCISE

(to be
signed only on exercise of Warrant)

 

TO:
BLOCKCHAIN INDUSTRIES, INC.

 

The
undersigned, pursuant to the provisions set forth in the attached
Warrant (No.____), hereby irrevocably elects to purchase (check
applicable box):

 

___
________ shares of the Common Stock covered by such Warrant;
or

	

___

	

the
maximum number of shares of Common Stock covered by such Warrant
pursuant to the cashless exercise procedure set forth in Section 2
of the Warrant.

 

The
undersigned herewith makes payment of the full purchase price for
such shares at the price per share provided for in such Warrant,
which is $______. Such payment takes the form of (check applicable
box or boxes):

 

___
$__________ in lawful money of the United States;
and/or

	

___

	

the
cancellation of such portion of the attached Warrant as is
exercisable for a total of _______ shares of Common Stock (using a
Fair Market Value of $_______ per share for purposes of this
calculation); and/or

 

	

___

	

the
cancellation of such number of shares of Common Stock as is
necessary, in accordance with the formula set forth in Section 2 of
the Warrant, to exercise this Warrant with respect to the maximum
number of shares of Common Stock purchasable pursuant to the
cashless exercise procedure set forth in Section 2.

 

After
application of the cashless exercise feature as described above,
_____________ shares of Common Stock are required to be delivered
pursuant to the instructions below.

 

The
undersigned requests that the certificates for such shares be
issued in the name of, and delivered to
__________________________________________, whose address is
___________________________
__________________________________________________________________________________________________.

 

The
undersigned represents and warrants that all offers and sales by
the undersigned of the securities issuable upon exercise of the
within Warrant shall be made pursuant to registration of the Common
Stock under the Securities Act of 1933, as amended (the
“Securities Act”), or pursuant to an exemption from
registration under the Securities Act.

 

 

 

 

 

 

	

Dated:___________________

	
 

	
 

	
 

	
 

	

(Signature
must conform to name of holder as

specified
on the face of the Warrant)

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

(Address)

 

	
 

	
 

 

 

 

 

Exhibit B

 

FORM OF
TRANSFEROR ENDORSEMENT

(To be
signed only on transfer of Warrant)

 

For
value received, the undersigned hereby sells, assigns, and
transfers unto the person(s) named below under the heading
“Transferees” the right represented by the within
Warrant to purchase the percentage and number of shares of Common
Stock of BLOCKCHAIN INDUSTRIES, INC. to which the within Warrant
relates specified under the headings “Percentage
Transferred” and “Number Transferred,”
respectively, opposite the name(s) of such person(s) and appoints
each such person Attorney to transfer its respective right on the
books of BLOCKCHAIN INDUSTRIES, INC., with full power of
substitution in the premises.

 

	

Transferees

	
 

	

Percentage
Transferred

	
 

	

Number
Transferred

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

 

	

Dated:
__________________, _______

	
 

	
 

	
 

	
 

	

(Signature
must conform to name of holder as specified

on the
face of the warrant)

	
 

	
 

	
 

	

Signed
in the presence of: 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

(Name)

	
 

	
 

	
 

	
 

	

(address)

	
 

	
 

	
 

	

ACCEPTED
AND AGREED:

	
 

	
 

	

[TRANSFEREE]

	
 

	
 

	
 

	
 

	

(address)

	
 

	
 

	
 

	
 

	
 

	
 

	

(Name)Blueprint

 

 Exhibit 10.1

 

EQUITY
TOKEN PURCHASE AGREEMENT

 

This
Equity Token Purchase Agreement (this “Agreement”) is dated December 19,
2017, by and between Chimes Broadcasting, Inc., a Delaware
corporation (“Chimes”) and Blockchain
Industries, Inc, a Nevada Corporation (“Purchaser”).

 

RECITALS

 

WHEREAS, Chimes is
a Delaware corporation engaged in the business of creating a
blockchain based music database and service (“Chimes Network” or the
“Project”);

 

WHEREAS, Chimes
plans to create and distribute and ERC-20 compatible utility token
for use on the Chimes Network as well as equity tokens (the
“Equity Tokens”)
which shall have the rights and preferences of the Chimes Series T
Equity Tokens; and

 

WHEREAS, Chimes
desires to sell, and Purchaser desires to purchase a certain number
of the Equity Tokens on the terms and subject to the conditions set
forth herein;

 

NOW
THEREFORE, in consideration of the foregoing, the covenants set
forth in this Agreement and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as
follows:

 

AGREEMENT

 

1. Issuance of the Equity Tokens. Subject
to the terms and conditions of this Agreement, Chimes hereby issues
to Purchaser and Purchaser hereby receives from Chimes, 250,000
Equity Tokens (the “Purchased
Tokens”) in exchange for an aggregate purchase price
of $200,000 ($.80 per token) (collectively, the “Purchase Price”). Chimes
acknowledges that the Purchase Price constitutes full and adequate
consideration for the Equity Tokens.

 

2. Restrictions on Transfer. The Equity
Tokens are “restricted securities” and may not be
transferred except in accordance with applicable laws and the
Certificate of Incorporation, as amended.

 

3. Seller’s Representations and
Warranties. (i) Chimes is a corporation duly organized,
validly existing and in good standing under the laws of its
jurisdiction of incorporation, (ii) Chimes has the absolute and
unrestricted right, power and authority to execute, deliver and
perform its obligations under this Agreement and any other
document, agreement or instrument entered into in connection with
this Agreement, (iii) the execution, delivery and performance of
this Agreement by Chimes and consummation of the transactions
contemplated hereby by Chimes have been duly authorized by all
necessary action on the part of Chimes and no other act on the part
of or on behalf of Chimes or the shareholders of Chimes is
necessary to approve the execution and delivery of this Agreement
and performance by Chimes of its obligations hereunder, (iv) the
board of directors of Chimes has, by unanimous written consent,
adopted resolutions approving this Agreement transactions
contemplated hereby and thereby and such resolutions have not been
subsequently withdrawn or modified in any respect, (v) the
stockholders of Chimes have, by written consent, adopted
resolutions approving this Agreement and any and all of the
transactions contemplated hereby and thereby and such resolutions
have not been subsequently withdrawn or modified in any respect.
and (vi) this Agreement has been duly executed and delivered by
Chimes and, subject to the execution hereof by Purchaser,
constitutes a valid and binding obligation of Chimes, enforceable
against it in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, moratorium
or other similar laws affecting or relating to creditors’
rights generally, or general principles of equity.

 

1

 

 

4. Purchaser Representations and
Warranties. In connection with Purchaser’s receipt of
the Equity Tokens, Purchaser hereby makes the investment
representations listed on Exhibit
A to Chimes as
of the date of this Agreement. In addition, Purchase acknowledges
and agrees that the Equity Tokens are not currently ERC-20
compatible and may never be developed as a distributed ledger
token.

 

5. Right of First Refusal. The Purchaser
hereby agrees that the Equity Tokens are subject to a right of
first refusal in favor of Chimes as set forth on Exhibit
B.

 

6. Risk
Factors.

 

(a) Ethereum Blockchain. The
Ethereum blockchain is prone to periodic congestion during which
transactions can be delayed or lost. Individuals may also
intentionally spam the Ethereum network in an attempt to gain an
advantage in purchasing cryptographic tokens. Purchaser
acknowledges and understands that Ethereum block producers may not
include Purchaser’s transaction when Purchaser wants or
Purchaser’s transaction may not be included at
all.

 

(b) Third Party Attacks.
Transactions within the Project may be delayed or lost due to
operational error or malicious attacks by third parties. Purchaser
acknowledges and understands that the last-closed ledger may not
include Purchaser’s transaction when Purchaser wants or
expects and that Purchaser’s transaction may be excluded or
discarded entirely.

 

(c) Ability to Transact or Resell.
Purchaser may be unable to sell or otherwise transact in Equity
Tokens at any time, or for the price Purchaser paid. By purchasing
Equity Tokens, Purchaser acknowledges, understands and agrees that:
(a) there is no guarantee or representation of liquidity for the
Equity Tokens; and (b) Company is not and shall not be responsible
for or liable for the market value of Equity Tokens, the
transferability and/or liquidity of Equity Tokens and/or the
availability of any market for Equity Tokens through third parties
or otherwise.

 

(d) Token Security. Equity Tokens
may be subject to expropriation and or/theft. Hackers or other
malicious groups or organizations may attempt to interfere with the
Equity Tokens in a variety of ways, including, but not limited to,
malware attacks, denial of service attacks, consensus-based
attacks, Sybil attacks, smurfing and spoofing. Furthermore, because
the Ethereum platform rests on open source software and Equity
Tokens are based on open source software, there is the risk that
Ethereum smart contracts may contain intentional or unintentional
bugs or weaknesses which may negatively affect the Equity Tokens or
result in the loss of Purchaser’s Equity Tokens, the loss of
Purchaser’s ability to access or control Purchaser’s
Equity Tokens or the loss of ETH in Purchaser’s account. In
the event of such a software bug or weakness, there may be no
remedy and holders of Equity Tokens are not guaranteed any remedy,
refund or compensation.

 

(e) Access to Private Keys. Equity
Tokens purchased by Purchaser may be held by Purchaser in
Purchaser’s digital wallet or vault, which requires a private
key, or a combination of private keys, for access. Accordingly,
loss of requisite private key(s) associated with Purchaser’s
digital wallet or vault storing Equity Tokens will result in loss
of such Equity Tokens, access to Purchaser’s Equity Token
balance and/or any initial balances in blockchains created by third
parties. Moreover, any third party that gains access to such
private key(s), including by gaining access to login credentials of
a hosted wallet or vault service Purchaser uses, may be able to
misappropriate Purchaser’s Equity Tokens. Company is not
responsible for any such losses.

 

(f) New Technology. The Project and
all of the matters set forth in the White Paper are new and
untested. The Project might not be capable of completion,
implementation or adoption. It is possible that no blockchain
utilizing the Project will ever be launched and there may never be
an operational

 

2

 

 

platform. Even if
the Project is completed, implemented and adopted, it might not
function as intended, and any tokens associated with a blockchain
adopting the Project may not have functionality that is desirable
or valuable. Also, technology is changing rapidly, so the Equity
Tokens and the Project may become outdated.

 

(g) Tax Consequences. The purchase
and receipt of Equity Tokens may have tax consequences for
Purchaser. Purchaser is solely responsible for Purchaser’s
compliance with Purchaser’s tax obligations. Purchaser
explicitly bears the sole responsibility to determine whether the
purchase and/or the ownership and/or use of the Token, the
potential appreciation or depreciation in the value of the Token
over time, the sale and purchase of the Token and/or any other
action or transaction related to the Project have tax implications
for Purchaser.

 

(h) Reliance on Third-Parties. Even
if completed, the Project will rely, in whole or partly, on third
parties to adopt and implement it and to continue to develop,
supply, and otherwise support it.

 

There
is no assurance or guarantee that those third parties will complete
their work, properly carry out their obligations, or otherwise meet
anyone’s needs, all of might have a material adverse effect
on the Project.

 

(i) Failure to Map a Public Key to
Purchaser’s Account. Failure of Purchaser to map a
public key to Purchaser’s account may result in third parties
being unable to recognize Purchaser’s Equity Token balance on
the Ethereum blockchain.

 

(j) Exchange & Counterparty
Risks. If Purchaser sends ETH from an exchange or an account
that Purchaser does not control, Equity Tokens will be allocated to
the account that has sent ETH; therefore, Purchaser may never
receive or be able to recover Purchaser’s Equity Tokens.
Furthermore, if Purchaser chooses to maintain or hold Equity Tokens
through a cryptocurrency exchange or other third party,
Purchaser’s Equity Tokens may be stolen or lost. In addition,
third parties may not recognize Purchaser’s claim to any
derivative tokens if and when launched by third parties according
to the distribution rules set in the Project. By purchasing Equity
Tokens, Purchaser acknowledges and agrees that Purchaser sends ETH
through an exchange account and/or holds Equity Tokens on a
cryptocurrency exchange or with another third party at
Purchaser’s own and sole risk.

 

(k) Changes to the Project. The
Project is still under development as the Company is seeking to
move the Project to the block chain and Smart Contract System. The
Project may undergo significant changes over time. Although Company
intends for the Project to have the features and specifications set
forth in the White Paper, Company may make changes to such features
and specifications for any number of reasons, any of which may mean
that the Chimes Network does not meet Purchaser’s
expectations.

 

(l) Project Completion. The
development of the Project may be abandoned for a number of
reasons, including, but not limited to, lack of interest from the
public, lack of funding, lack of commercial success or prospects,
or departure of key personnel.

 

(m) Lack of Interest. Even if the
Project is finished, launched and adopted, the ongoing success of
the Project relies on the interest and participation of third
parties. There can be no assurance or guarantee that there will be
sufficient interest or participation in the Project.

 

(n) Uncertain Regulatory Framework.
The regulatory status of cryptographic tokens, digital assets and
blockchain technology is unclear or unsettled in many
jurisdictions. It is difficult to predict how or whether
governmental authorities will regulate such technologies. It is
likewise difficult to predict how or whether any governmental
authority may make changes to existing laws, regulations and/or
rules that will affect cryptographic tokens, digital assets,
blockchain technology and its applications.

 

3

 

 

7. General
Provisions.

 

(a) Choice of Law. This Agreement shall be
governed by the internal substantive laws, but not the conflict of
law rules, of Delaware.

 

(b) Integration. This Agreement, including
all exhibits hereto, represents the entire agreement between the
parties with respect to the receipt of the Equity Tokens by
Purchaser and supersedes and replaces any and all prior written or
oral agreements regarding the subject matter of this Agreement
including, but not limited to, any representations made during any
interviews, relocation discussions or negotiations whether written
or oral.

 

(c) Notices. Any notice or other
communication required or permitted to be given by either party
hereto pursuant to the terms of this Agreement shall be in writing
and shall be deemed effectively given the earlier of (i) receipt,
(ii) personal delivered, (iii) transmission by facsimile or email
(with evidence of transmission by the transmitting device), (iv)
one business day after being deposited with an overnight courier
service or (v) four days after being deposited in the U.S. mail,
first class with postage prepaid and return receipt requested, and
addressed to the parties at their respective principal business or
residential (as applicable) address or number or such other address
or number as the party receiving such communication shall give the
other party in writing.

 

(d) Successors. Any successor to Chimes
(whether direct or indirect and whether by purchase, merger,
consolidation, liquidation or otherwise) to all or substantially
all of Chimes’s business or assets shall assume the rights
and obligations under this Agreement and agree expressly to perform
the obligations under this Agreement in the same manner and to the
same extent as Chimes would be required to perform such obligations
in the absence of a succession. For all purposes under this
Agreement, the term “Company” shall include any
successor to Chimes’s business or assets which executes and
delivers the assumption agreement described in this section or
which becomes bound by the terms of this Agreement by operation of
law. Subject to the restrictions on transfer set forth in this
Agreement, this Agreement shall be binding upon Purchaser and his
or her heirs, executors, administrators, successors and
assigns.

 

(e) Assignment; Transfers. Except as set
forth in this Agreement, this Agreement, and any and all rights,
duties and obligations hereunder, shall not be assigned,
transferred, delegated or sublicensed by Purchaser without the
prior written consent of Chimes. Any attempt by Purchaser without
such consent to assign, transfer, delegate or sublicense any
rights, duties or obligations that arise under this Agreement shall
be void. Except as set forth in this Agreement, any transfers in
violation of any restriction upon transfer contained in any section
of this Agreement shall be void, unless such restriction is waived
in accordance with the terms of this Agreement.

 

(f) Waiver. Either party’s failure to
enforce any provision of this Agreement shall not in any way be
construed as a waiver of any such provision, nor prevent that party
from thereafter enforcing any other provision of this Agreement.
The rights granted both parties hereunder are cumulative and shall
not constitute a waiver of either party’s right to assert any
other legal remedy available to it. No waiver of any provision
hereof shall be effective except in writing and signed by the party
against which such waiver is to be enforced, and no waiver shall
constitute a future waiver except as expressly provided in such
waiver.

 

(g) Further Assurances. Purchaser shall
execute any documents or instruments necessary or reasonably
desirable in the view of Chimes to carry out the purposes or intent
of this Agreement.

 

(h) Survival. Notwithstanding anything to
the contrary herein, Sections 2 through 5 of this Agreement shall
survive consummation of the transactions contemplated
hereby.

 

4

 

 

(i) Severability. Should any provision of
this Agreement be found to be illegal or unenforceable, the other
provisions shall nevertheless remain effective and shall remain
enforceable to the greatest extent permitted by law.

 

(j) Rights as Holder of Equity Tokens.
Subject to the terms and conditions of this Agreement, Purchaser
shall be subject to the provisions of the Certificate of
Incorporation of Chimes (as amended, the “Certificate”)
as they apply to holders of Equity Tokens thereunder, at such time
as Purchaser delivers to Chimes a fully executed copy of this
Agreement and full payment for the Equity Tokens.

 

(k) Splits, Dividends and
Recapitalizations. All references to the number and Purchase
Price of the Equity Tokens in this Agreement shall be adjusted to
reflect any Share split, Share dividend or other change in the
Equity Tokens which may be made after the date of this Agreement.
If, from time to time there is (i) any interest dividend, interest
split or other change in the Equity Tokens, (ii) any dividend of
cash or other property on the Equity Tokens, (iii) any merger or
sale of all or substantially all of the assets or other acquisition
of Chimes or (iv) any conversion of the Equity Tokens into another
class or series of securities, any and all new, substituted or
additional securities or cash or other consideration to which
Purchaser is entitled by reason of Purchaser’s ownership of
the Equity Tokens shall immediately be included thereafter as
“Equity Tokens” for purposes of this
Agreement.

 

(l) Arbitration. Any and all controversies,
claims or disputes with anyone (including Chimes and any employee,
officer, director, stockholder or benefit plan of Chimes, in its
capacity as such or otherwise) arising out of, relating to or
resulting from this Agreement, including any breach of this
Agreement, shall be subject to binding arbitration to be held in
the State of Utah and administered by the American Arbitration
Association (“AAA”) in accordance with the
AAA’s rules then in effect for the resolution of commercial
disputes (the “Rules”) and California law.
Disputes which Purchaser agrees to arbitrate, and thereby AGREE TO
WAIVE ANY RIGHT TO A TRIAL BY JURY, include any statutory claims
under state or federal law, including, but not limited to, claims
under Title VII of the Civil Rights Act of 1964, the Americans with
Disabilities Act of 1990, the Age Discrimination in Employment Act
of 1967 and the Older Workers Benefit Protection Act. This
agreement to arbitrate applies to any disputes Chimes may have with
Purchaser.

 

(m) Reliance on Counsel and Advisors.
Purchaser acknowledges that he or she has had the opportunity to
review this Agreement, including all attachments hereto, and the
transactions contemplated by this Agreement with his or her own
legal counsel, tax advisors and other advisors. Purchaser is
relying solely on his or her own counsel and advisors and not on
any statements or representations of Chimes or its agents for
legal, tax or other advice with respect to this investment or the
transactions contemplated by this Agreement. Purchaser is executing
this Agreement voluntarily and without any duress or undue
influence by Chimes or anyone else.

 

(n) Counterparts. This Agreement may be
executed in one or more counterparts, each of which will be deemed
an original, but all of which together will constitute one and the
same agreement. Facsimile copies of signed signature pages shall be
binding originals.

 

(Signature Page
Follows)

 

 

5

 

 

IN
WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.

 

COMPANY:

 

CHIMES
BROADCASTING, INC.

 

By: /s/ Joseph
Mohen

Name:
Joseph Mohen

Title:
Chief Executive Officer

 

PURCHASER:

 

 

BLOCKCHAIN
INDUSTRIES, INC.

 

By: /s/
Patrick Moynihan

 

 Name: Patrick Moynihan

Title:
CEO, Blockchain Industries Inc Date: 19 December 2017

 

	

[Signature Page to
Purchase Agreement]

 

6

 

 

Exhibit A

 

INVESTMENT
REPRESENTATION STATEMENT

 

1. Purchasing for Own Investment.
Purchaser is purchasing the Equity Tokens solely for investment
purposes, and not for further distribution. Purchaser’s
entire legal and beneficial ownership interest in the Equity Tokens
is being purchased and shall be held solely for Purchaser’s
account, except to the extent Purchaser intends to hold the Equity
Tokens jointly with Purchaser’s spouse. Purchaser is not a
party to, and does not presently intend to enter into, any contract
or other arrangement with any other person or entity involving the
resale, transfer, grant of participation with respect to or other
distribution of any of the Equity Tokens. Purchaser’s
investment intent is not limited to its present intention to hold
the Equity Tokens for the minimum capital gains period specified
under any applicable tax law, for a deferred sale, for a specified
increase or decrease in the market price of the Equity Tokens, or
for any other fixed period in the future.

 

2. Qualified Purchaser. The
Purchaser represents that it is a “Qualified
Purchaser”, meaning Purchaser is either (i) an
“Accredited
Investor” within the meaning of Rule 501 under the
Securities Act of 1933 (the “Securities
Act”) in accordance with Exhibit C, (ii) a Non-US Person
within the meaning of Regulation S, or (iii) a non-accredited
investor and the Purchaser’s investment in the Equity Tokens
is within the limitations set forth in Section 4(a)(6) of
Regulation CF.

 

3. Ability to Protect Own
Interests. Purchaser can properly evaluate the merits and
risks of an investment in the Equity Tokens and can protect its own
interests in this regard, whether by reason of Purchaser’s
own business and financial expertise, the business and financial
expertise of certain professional advisors unaffiliated with Chimes
with whom Purchaser has consulted, or Purchaser’s preexisting
business or personal relationship with Chimes or any of its
officers, directors or controlling persons.

 

4. Informed About Chimes.
Purchaser is sufficiently aware of Chimes’ business affairs
and financial condition to reach an informed and knowledgeable
decision to acquire the Equity Tokens. Purchaser has had
opportunity to discuss the plans, operations and financial
condition of Chimes with its officers, directors or controlling
persons, and have received all information it deems appropriate for
assessing the risk of an investment in the Equity
Tokens.

 

5. Economic Risk. Purchaser
realizes that the receipt of the Equity Tokens involves a high
degree of risk, and that Chimes’s future prospects are
uncertain. Purchaser is able to hold the Equity Tokens indefinitely
if required, and is able to bear the loss of its entire investment
in the Equity Tokens.

 

6. Restricted Securities.
Purchaser understands that the Equity Tokens are “restricted
securities” in that the sale of the Equity Tokens has not
been registered under the Securities Act in reliance upon an
exemption for non-public offerings. In this regard, Purchaser also
understands and agrees that: (a) Purchaser must hold the Equity
Tokens for a period of not less than twelve (12) months, unless any
subsequent proposed resale is registered under the under the
Securities Act of 1933, as amended (the “Securities Act”), or unless an
exemption from registration is otherwise available (such as Rule
4(a)(6) or 144) and Chimes permits such resale and (b) Chimes is
under no obligation to register any subsequent proposed resale of
the Equity Tokens.

 

(Remainder of Page
Intentionally Left Blank)

 

 

7

 

 

Exhibit B

 

RIGHT
OF FIRST REFUSAL

 

Before
any Equity Tokens acquired by the Purchaser pursuant to this
Agreement (or any beneficial interest in such Equity Tokens) may be
sold, transferred, encumbered or otherwise disposed of in any way
(whether by operation of law or otherwise) by the Purchaser or any
subsequent transferee (each a “Holder”), such Holder must first
offer such Equity Tokens or beneficial interest to Chimes or its
assignee as follows:

 

1. Notice of Proposed Transfer.
The Holder shall deliver to Chimes a written notice stating: (i)
the Holder’s bona fide intention to sell or otherwise
transfer the Equity Tokens; (ii) the name of each proposed
transferee; (iii) the number of Equity Tokens to be transferred to
each proposed transferee; (iv) the bona fide cash price or other
consideration for which the Holder proposes to transfer the Equity
Tokens; and (v) that by delivering the notice, the Holder offers
all such Equity Tokens to Chimes or its assignee pursuant to this
Section and on the same terms described in the notice.

 

2. Exercise of Right of First
Refusal. At any time within 30 days after receipt of the
Holder’s notice, Chimes or its assignee may, by giving
written notice to the Holder, elect to purchase all, but not less
than all, of the Equity Tokens proposed to be transferred to any
one or more of the proposed transferees.

 

3. Purchase Price. The purchase
price for the Equity Tokens purchased by Chimes or its assignee
under this Section shall be the price listed in the Holder’s
notice. If the price listed in the Holder’s notice includes
consideration other than cash, the cash equivalent value of the
noncash consideration shall be determined by the Board of Directors
of Chimes in its sole discretion.

 

4. Payment. Payment of the
purchase price shall be made, at the option of Chimes or its
assignee, in cash (by check), by cancellation of all or a portion
of any outstanding indebtedness of the Holder to Chimes or its
assignee, or by any combination thereof within 30 days after
receipt by Chimes of the Holder’s notice (or at such later
date as is called for by such notice).

 

5. Holder’s Right to
Transfer. If all of the Equity Tokens proposed in the notice
to be transferred to a given proposed transferee are not purchased
by Chimes or its assignee as provided in this Section, then the
Holder may sell or otherwise transfer such Equity Tokens to that
proposed transferee, provided that: (i) the transfer
is made only on the terms provided for in the notice, with the
exception of the purchase price, which may be either the price
listed in the notice or any higher price; (ii) such transfer is
consummated within 60 days after the date the notice is delivered
to Chimes; (iii) the transfer is effected in accordance with any
applicable securities laws, and if requested by Chimes, the Holder
shall have delivered an opinion of counsel acceptable to Chimes to
that effect; and (iv) the proposed transferee agrees in writing
that the provisions of this Section shall continue to apply to the
transferred Equity Tokens in the hands of such proposed transferee.
If any Equity Tokens described in a notice are not transferred to
the proposed transferee within the period provided above, then
before any such Equity Tokens may be transferred, a new notice
shall be given to Chimes, and Chimes or its assignees shall again
be offered the right of first refusal described in this
Section.

 

6. Exception for Certain Family
Transfers. Notwithstanding anything to the contrary
contained elsewhere in this Section, the transfer of any or all of
the Equity Tokens during the Holder’s lifetime or on the
Holder’s death by will or intestacy to the Holder’s
spouse, child, father, mother, brother, sister, father- in-law,
mother-in-law, brother-in-law, sister-in-law, grandfather,
grandmother, grandchild, cousin, aunt, uncle, niece, nephew,
stepchild, or to a trust or other similar estate planning vehicle
for the benefit of the Holder or any such person, shall be exempt
from the provisions of this Section; provided that, in each such
case, the transferee shall agree in writing to receive and hold the
Equity Tokens so transferred subject to all

 

8

 

 

of the
provisions of this Agreement, including but not limited to this
Section, and there shall be no further transfer of such Equity
Tokens except in accordance with the terms of this
Section.

 

 

7. Change of Control. For purposes
of this Exhibit B, a
“Change of
Control” means either: (i) the acquisition of Chimes
by another person or entity by means of any transaction or series
of related transactions (including without limitation, any
reorganization, merger or consolidation or stock transfer, but
excluding any such transaction effected primarily for the purpose
of changing the domicile of Chimes or issuance by Chimes of its
securities primarily for capital raising purposes), unless
Chimes’s stockholders of record immediately prior to such
transaction or series of related transactions hold, immediately
after such transaction or series of related transactions, at least
50% of the voting power of the surviving or acquiring entity; or
(ii) a sale of all or substantially all of the assets of
Chimes.

 

(Remainder of Page
Intentionally Left Blank)

 

9

 

 

Exhibit C

 

INVESTOR
STATUS

 

The
Purchaser hereby represents and warrants, pursuant to Section 2 of
Exhibit A, that he, she or it is correctly and in all respects
described by the category or categories set forth below directly
under which the Investor or its authorized representative has
signed his, her or its name (or initialed or otherwise indicated
that each such category describes the Purchaser).

 

INVESTOR
REPRESENTATIONS

 

Purchaser has
represented and warranted on the website/platform that (i) it is
either an “Accredited
Investor”

 

(within
the meaning of Rule 501 under the Securities Act) because it meets
one of the following items below,

 

(ii)

is a Non US Person
under Regulation S, or (iii) is not an Accredited
Investor:1

 

□
(i) If an individual,
Purchaser has a net worth, either individually or upon a joint
basis with Purchaser’s spouse, of at least $1,000,000,
or has had an individual
income in excess of

$200,000 for each
of the two most recent years, or a joint income with
Purchaser’s spouse in excess of $300,000 in each of those
years, and has a reasonable expectation of reaching the same income
level in the current year.

 



(ii) Purchaser is an irrevocable trust with total assets in
excess of $5,000,000 whose purchase is directed by a person with
such knowledge and experience in financial and business matters
that such person is capable of evaluating the merits and risks of
the prospective investment.

 



(iii) Purchaser is a bank, insurance
company, investment company registered under Chimes Act, a broker
or dealer registered pursuant to Section 15 of the Securities
Exchange Act of 1934 (the “Exchange
Act”), a business development company, a Small
Business Investment

 

1 The meaning of “net worth”
(for purposes of determining whether Purchaser is an
“accredited investor”) means the excess of total assets
at fair market value over total liabilities. For purposes of this
calculation,

 

(a)

the amount of
Purchaser’s total assets shall exclude the fair market value
of Purchaser’s primary residence, and

 

(b)

the amount of
Purchaser’s total liabilities shall include the amount of such
Purchaser’s mortgage and other indebtedness that is secured
by Purchaser’s primary residence which

 

(i)

exceeds the fair
market value of Purchaser’s primary residence at the time of
Purchaser’s admission to Chimes, or

 

(ii)

has been incurred
by Purchaser within the 60 day period prior to Purchaser’s
admission to Chimes and remains outstanding on the date of
Purchaser’s admission to Chimes (unless such indebtedness was
incurred as a result of the acquisition of Purchaser’s
primary residence).

 

If, at
the time of Purchaser’s admission to Chimes, Purchaser has
mortgage and other indebtedness that is described in both of
clauses (i) and (ii) above, then both amounts of indebtedness shall
be included in the calculation of Purchaser’s total
liabilities.

 

 

10

 

 

Company
licensed by the United States Small Business Administration, a plan
with total assets in excess of $5,000,000 established and
maintained by a state for the benefit of its employees, or a
private business development company as defined in Section
202(a)(22) of the United States Investment Advisers Act of 1940, as
amended.

 



(iv) Purchaser is an employee benefit
plan and either all
investment decisions are made by a bank, savings and loan
association, insurance company, or registered investment advisor,
or Purchaser has total
assets in excess of $5,000,000 or, if such plan is a self-directed
plan, investment decisions are made solely by persons who are
accredited investors.

 



(v) Purchaser is a corporation,
partnership, limited liability company or business trust, not
formed for the purpose of acquiring the Interests, or an
organization described in Section 501(c)(3) of the Code, in each
case with total assets in excess of $5,000,000.

 



(vi) Purchaser is an entity in which
all of the equity owners, or
a grantor or revocable
trust in which all of
the grantors and trustees, qualify under clause (i), (ii), (iii),
(iv) or (v) above or this clause (vi).

 



(vii)
Purchaser cannot make any of the representations set forth in
clauses (i) through (vi) above and is therefore not an Accredited
Investor.

 



(viii)              Purchaser
is a Non-US Person under Regulation S.

 

11

 

 

Exhibit D

 

 

Purchaser shall
wire funds to:

 

 

 

Bank:                              

Citibank,
N.A.

 

 

 

Account
Name:                                           

Chimes
Broadcasting, Inc. Routing (ABA):021000089

Account
Number: 4993952337

 

 

12

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