Attached files
Exhibit
10.17
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (this
“Agreement”),
dated as of August 14, 2018, by and between Blockchain Industries,
Inc., a Nevada corporation with its headquarters located at 730
Arizona Ave., Suite 220, Santa Monica, California 90401 (the
“Company”), and
the investors identified on the signature page hereto (the
“Purchaser”).
WHEREAS, the Company deems it in the
best interests of the Company and its stockholders to conduct a
private placement offering consisting of a promissory note and
warrants up to the principal aggregate amount of up to $250,000
(the “Offering”);
WHEREAS, the Company and Purchaser are
executing and delivering this Agreement in reliance upon an
exemption from securities registration afforded by the provisions
of Section 4(a)(2) and/or Regulation D (“Regulation D”) promulgated by the
United States Securities and Exchange Commission (the
“Commission”)
under the Securities Act of 1933, as amended (the
“Securities
Act”); and
WHEREAS, the parties hereto desire that,
upon the terms and subject to the conditions contained herein, the
Company shall issue and sell to Purchaser, and Purchaser shall
purchase, (i) a Secured Promissory Note in the form of Exhibit A hereto (the
“Note”) in the
principal amount set forth on the signature page hereto (the
“Note Price”)
and (ii) a warrant in the form of Exhibit C permitting the
Purchaser to purchase that certain amount of common stock, par
value $0.001 per share, of the Company (the “Common Stock”) as is set forth on
the signature page hereto, subject to the terms and conditions
therein contained (the “Warrant”, and together with the
Note, the “Securities”).
NOW, THEREFORE, in consideration of the
mutual covenants and other agreements contained in this Agreement,
the Company and Purchaser hereby agree as follows:
1. Purchase
and Sale. Upon the terms and subject to the conditions set
forth in this Agreement, the Company hereby agrees to (i) sell,
assign, transfer and deliver to Purchaser, and Purchaser hereby
agrees to purchase and accept delivery from the Company, the Note
free of all liens, pledges, mortgages, security interests, charges,
restrictions, adverse claims or other encumbrances of any kind or
nature whatsoever (“Encumbrances”), for the
consideration specified herein and (ii) in consideration of the
Note Price delivered by the Purchaser to the Company, the Company
hereby agrees to issue the Warrant to the Purchaser.
2. Purchaser
Representations and Warranties. Each Purchaser, for itself
and for no other Purchaser, hereby acknowledges, represents and
warrants as follows (with the understanding that the Company will
rely on such representations and warranties in determining, among
other matters, the suitability of this investment for the Purchaser
in order to comply with federal and state securities
laws):
(a) The
Purchaser has read this Agreement. The Purchaser acknowledges that
this Securities Purchase Agreement is not intended to set forth all
of the information which might be deemed pertinent by an investor
who is considering an investment in the Securities. It is the
responsibility of the Purchaser (i) to determine what additional
information he desires to obtain in evaluating this investment, and
(ii) to obtain such information from the Company;
(b) Standing
of Purchaser. If Purchaser is an entity, such Purchaser is duly
organized, validly existing and in good standing under the laws of
the jurisdiction of its formation. If Purchaser is a natural
person, such Purchaser is not a minor and has the legal capacity to
enter into this Agreement;
(c) Authorization
and Power. Purchaser has the requisite power and authority to enter
into and perform this Agreement and to purchase the Note and accept
the Warrants. The execution, delivery and performance of this
Agreement by Purchaser and, if Purchaser is an entity, the
consummation by Purchaser of the transactions contemplated hereby
have been duly authorized by all necessary company action, and no
further consent or authorization of Purchaser, its board of
directors or similar governing body, or stockholders is required,
as applicable. This Agreement has been duly authorized, executed
and delivered by Purchaser and constitutes, or shall constitute
when executed and delivered, a valid and binding obligation of
Purchaser, enforceable against Purchaser in accordance with the
terms thereof;
(d) No
Conflicts. If Purchaser is an entity, the execution,
delivery and performance of this Agreement and the consummation by
Purchaser of the transactions contemplated hereby do not and will
not result in a violation of Purchaser’s charter documents,
bylaws or other organizational documents, as
applicable;
(e) Information
on Purchaser. Such Purchaser is an “accredited investor,” as such term
is defined in Rule 501(a) of Regulation D promulgated by the
Commission under the Securities Act and affirmed by Purchaser in
the completed Purchaser Questionnaire attached hereto as
Exhibit B, is
experienced in investments and business matters, has made
investments of a speculative nature and has purchased securities of
United States publicly-owned companies in private placements in the
past and, with its representatives, has such knowledge and
experience in financial, tax and other business matters as to
enable Purchaser to utilize the information made available by the
Company to evaluate the merits and risks of and to make an informed
investment decision with respect to the proposed purchase, which
represents a speculative investment. Purchaser is able to bear the
risk of such investment for an indefinite period and to afford a
complete loss thereof. The information in any documents delivered
by the Purchaser in connection with this Agreement, including, but
not limited to the Purchaser Questionnaire, is true, correct and
complete in all respects as of the date hereof. The Purchaser
agrees promptly to notify the Company in writing of any change in
such information after the date hereof. Purchaser is not required
to be registered as a broker-dealer under Section 15 of the
Securities Exchange Act of 1934, as amended (the
“Exchange
Act”);
(f) Purchase
of Note and Warrants. Purchaser will purchase the Securities
for its own account for investment and not with a view toward, or
for resale in connection with, the public sale or any distribution
thereof in violation of the Securities Act or any applicable state
securities law, and has no direct or indirect arrangement or
understandings with any other person or entity to distribute or
regarding the distribution of such Securities;
(g) Compliance
with Securities Act. Purchaser understands and agrees that
the Securities are “restricted securities” and have not
been registered under the Securities Act or any applicable state
securities laws by reason of their issuance in a transaction that
does not require registration under the Securities Act, and that
such Securities must be held indefinitely unless a subsequent
disposition is registered under the Securities Act or any
applicable state securities laws or is exempt from such
registration;
(h) Transfer
or Resale. Such Purchaser understands that: (i) the
Securities have not been and are not being registered under the
Securities Act or any state securities laws, and may not be offered
for sale, sold, assigned or transferred unless (A) subsequently
registered thereunder, (B) such Purchaser shall have delivered to
the Company (if requested by the Company) an opinion of counsel to
such Purchaser, in a form reasonably acceptable to the Company, to
the effect that such Securities to be sold, assigned or transferred
may be sold, assigned or transferred pursuant to an exemption from
such registration, or (C) such Purchaser provides the Company with
reasonable assurance that such Securities can be sold, assigned or
transferred pursuant to Rule 144 or Rule 144A promulgated under the
Securities Act (or a successor rule thereto) (collectively,
“Rule 144”); (ii) any sale of the Securities made in
reliance on Rule 144 may be made only in accordance with the terms
of Rule 144, and further, if Rule 144 is not applicable, any resale
of the Securities under circumstances in which the seller (or the
Person through whom the sale is made) may be deemed to be an
underwriter (as that term is defined in the Securities Act) may
require compliance with some other exemption under the Securities
Act or the rules and regulations of the Commission promulgated
thereunder; and (iii) neither the Company nor any other Person is
under any obligation to register the Securities under the
Securities Act or any state securities laws or to comply with the
terms and conditions of any exemption thereunder.
(i) Legends.
The Purchaser understands that the Securities and the shares of
Common Stock to be issued pursuant to the Warrant, may bear one or
all of the following legends:
THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY
MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A
REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION
THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE
501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH
SECURITIES.
(j) Communication
of Offer. Purchaser has a preexisting personal or business
relationship with the Company or one or more of its directors,
officers or control persons, and the offer to sell the Securities
was directly communicated to Purchaser by the Company. At no time
was Purchaser presented with or solicited by any leaflet, newspaper
or magazine article, radio or television advertisement, or any
other form of general advertising or solicited or invited to attend
a promotional meeting otherwise than in connection and concurrently
with such communicated offer;
(k) No
Governmental Endorsement. Purchaser understands that no
United States federal or state agency or any other governmental or
state agency has passed on or made recommendations or endorsement
of the Securities or the suitability of the investment in the
Securities, nor have such authorities passed upon or endorsed the
merits of the offering of the Securities;
(l) Receipt
of Information. Purchaser believes it has received all the
information it considers necessary or appropriate for deciding
whether to purchase the Securities. Purchaser further represents
that through its representatives it has had an opportunity to ask
questions and receive answers from the Company regarding the terms
and conditions of the offering of the Securities and the business,
properties and financial condition of the Company and to obtain
additional information (to the extent the Company possessed such
information or could acquire it without unreasonable effort or
expense) necessary to verify the accuracy of any information
furnished to it or to which it had access. The Purchaser
understands and acknowledges that the Company has not made any
filings with the Commission or the OTC Markets Group Inc. with
regard to any events or periods ending after January 31, 2018, and,
as a result, the Company is not current in its financial reporting;
and
(m) No
Market Manipulation. Purchaser and Purchaser’s
affiliates have not taken, and will not take, directly or
indirectly, any action designed to, or that might reasonably be
expected to, cause or result in stabilization or manipulation of
the price of the Common Stock, to facilitate the sale or resale of
the Securities or affect the price at which the Securities may be
issued or resold.
3. Company
Representations and Warranties. The Company represents and
warrants to, and agrees with, Purchaser that:
(a) Due
Incorporation. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws
of the jurisdiction of its incorporation;
(b) Authority;
Enforceability. This Agreement has been duly authorized,
executed and delivered by the Company and is the valid and binding
agreement of the Company, enforceable in accordance with their
terms, except as may be limited by bankruptcy, insolvency,
moratorium or other similar laws affecting the enforcement of
creditors’ rights generally, or principles of equity. The
Company has full corporate power and authority necessary to enter
into and deliver this Agreement and to perform its obligations
thereunder;
(c) Capitalization
and Additional Issuances. The Company has authorized 405
million (405,000,000) shares of which 400 million is Common Stock
and 5 million is preferred stock. As of the date hereof, there are
41,190,247 shares of the Common Stock issued and outstanding and
24,956,523 shares of the Common Stock which may be issued hereafter
in respect of stock options, warrants, convertible securities
preferred stock or other Company Securities (as defined below)
issued or outstanding as of the date hereof. All of the outstanding
shares of the Common Stock are, and the shares of Common Stock to
be issued pursuant to the Warrant will be, duly authorized and
validly issued, fully paid and non-assessable and are not (and will
not be) subject to preemptive or similar rights affecting the
Common Stock. As of the date hereof, except as described on
Schedule 3(c) hereto, there are no (i) contracts to which the
Company is a party obligating the Company to accelerate the vesting
of any company equity award as a result of the transactions
contemplated by this Agreement (whether alone or upon the
occurrence of any additional or subsequent events), (ii)
outstanding securities of the Company convertible into or
exchangeable for shares of the Common Stock, (iii) outstanding
options, warrants or other agreements or commitments to acquire
from the Company, or obligations of the Company to issue, shares of
capital stock of (or securities convertible into or exchangeable
for shares of capital stock of) the Company or (iv) restricted
shares, restricted stock units, stock appreciation rights,
performance shares, profit participation rights, contingent value
rights, “phantom” stock or similar securities or rights
that are derivative of, or provide economic benefits based,
directly or indirectly, on the value or price of, any shares of
capital stock of the Company, in each case that have been issued by
the Company (the items in clauses (i), (ii) and (iii), together
with the capital stock of the Company, being referred to
collectively as “Company
Securities”). There are no outstanding contracts
requiring the Company to repurchase, redeem or otherwise acquire
any Company Securities and the Company is not a party to any voting
agreement with respect to any Company Securities;
(d) Commission
Filings; Financial Statements; Absence of Undisclosed
Liabilities.
(i) Shell
Company Status. The Purchaser has been provided an
opportunity for a reasonable period of time prior to the date
hereof to obtain additional information concerning this Agreement,
the Company and all other information the undersigned deems
relevant, to the extent the Company possesses such information or
can acquire it without unreasonable effort or expense; and the
Purchaser understands that as of the date of this Agreement and
perhaps for the foreseeable future, the Company is not a reporting
company under nor has it fully complied with the Exchange Act.
Notwithstanding the foregoing, the undersigned acknowledges that
the Company has filed certain reports with the Commission The
Investor understands that Blockchain Industries, Inc. may have once
been considered a “shell company” as defined in Rule
405 of the Exchange Act and therefore the shares of Common Stock to
be issued pursuant to the Warrant will not be able to be sold
pursuant to Rule 144 until twelve (12) months have elapsed from the
filing of “Form 10 information” (as defined in
Securities Act Rule 144(i)(3)) with the Commission;
(ii) Financial
Statements. Each of the consolidated financial statements
(including, in each case, any related notes thereto) contained in
the filings the Company has filed with the Commission (the
“SEC
Documents”): (i) complied as to form in all material
respects with the published rules and regulations of the Commission
with respect thereto as of their respective dates; (ii) was
prepared in accordance with United States generally accepted
accounting principles (“GAAP”) applied on a consistent
basis throughout the periods involved (except as may be indicated
in the notes thereto and, in the case of unaudited interim
financial statements, as may be permitted by the Commission for
Quarterly Reports on Form 10-Q); and (iii) fairly presented in all
material respects the consolidated financial position of the
Company at the respective dates thereof and the consolidated
results of the Company’s operations and cash flows for the
periods indicated therein, subject, in the case of unaudited
interim financial statements, to normal and year-end audit
adjustments as permitted by GAAP and the applicable rules and
regulations of the Commission. As of the date hereof, BF Borgers
CPA PC has not resigned or been dismissed as independent public
accountants of the Company as a result of or in connection with any
disagreements with the Company on a matter of accounting principles
or practices, financial statement disclosure or auditing scope or
procedure;
(iii) No
Undisclosed Liabilities. Neither the Company nor any of its
subsidiaries has any liability, indebtedness or obligation of any
kind (whether accrued, absolute, contingent, matured, unmatured or
otherwise, and whether or not required to be recorded or reflected
on a balance sheet under GAAP) (“Liability”) except for Liabilities
that (a) are reflected or recorded on the Company’s most
recent balance sheet included in the SEC Documents (including in
the notes thereto but only to the extent it is reasonably apparent
that the disclosure in such notes is of a Liability required to be
reflected on a balance sheet prepared in accordance with GAAP)
contained in the SEC Documents or (b) are current Liabilities
(within the meaning of GAAP) which were incurred since the date of
such balance sheet in the ordinary course of business consistent
with past practice;
(e) Consents.
No consent, approval, authorization or order of any court,
governmental agency or body having jurisdiction over the Company or
of any other person is required for the execution by the Company of
this Agreement and compliance and performance by the Company of its
obligations hereunder;
(f) No
Violation or Conflict. Neither the issuance of the Warrant
nor the issuance and sale of the Note nor the performance of the
Company’s obligations under this Agreement will:
(i) violate,
conflict with, result in a breach of, or constitute a default (or
an event which with the giving of notice or the lapse of time or
both would be reasonably likely to constitute a default) under (a)
the charter or bylaws of the Company or (b) any decree, judgment,
order or determination applicable to the Company of any court,
governmental agency or body having jurisdiction over the Company or
over the properties or assets of the Company or (c) any contract,
agreement, instrument or undertaking to which the Company or any
subsidiary is a party; or
(ii) result
in the creation or imposition of any lien, charge or encumbrance
upon the Securities except in favor of Purchaser as described
herein;
(g) Litigation.
There is no pending or, to the knowledge of the Company, threatened
action, suit, proceeding or investigation before or by any court,
governmental agency or body having jurisdiction over the Company
including, without limitation, any such that would affect the
execution by the Company or the complete and timely performance by
the Company of its obligations under this Agreement. The Company
has not, since inception, been a party to any material litigation,
arbitration or other proceeding, other than what has been
previously disclosed by the Company in the SEC
Documents;
(h) No
General Solicitation. Neither the Company, nor any of its
affiliates, nor any person or entity acting on its or their behalf,
has engaged in any form of general solicitation or general
advertising (within the meaning of Regulation D under the
Securities Act) in connection with the offer or sale of the
Securities;
(i)
No Defaults. Except
as described on schedule 3(j) or the SEC Documents, no
material default exists in the due performance and observance of
any term, covenant or condition of any permit, license, contract,
indenture, mortgage, deed of trust, note, loan or credit agreement,
or any other agreement or instrument evidencing an obligation for
borrowed money, or any other agreement or instrument to which the
Company is a party or by which the Company may be bound or to which
any of the properties or assets of the Company is subject the
effect of which would have a material adverse effect. Except as
described in the SEC Documents, the Company is not in violation of
any material term or provision of its charter or bylaws or in
material violation of any franchise, license, permit, applicable
law, rule, regulation, judgment or decree of any governmental
agency or court, domestic or foreign, having jurisdiction over the
Company or any of its properties or business.
(j)
No Preemptive Rights;
Options. Except as set forth on schedule 3(j) or the
SEC Documents, there are no preemptive or other rights to subscribe
for or purchase, or any restriction upon the voting or transfer of,
any shares of Common Stock, or other securities of the
Company.
(k)
Registration Rights of
Third Parties. Except as set forth schedule 3(k), no holders
of any securities of the Company or of any options or warrants of
the Company exercisable for or convertible or exchangeable into
securities of the Company have the right to require the Company to
register any such securities of the Company under the Act or to
include any such securities in a registration statement to be filed
by the Company.
4.
Adjustments for Stock
Splits. In the event and to the extent that the Company
consummates a reverse stock split or forward stock split prior to
the closing of this transaction, the number of shares of Common
Stock issuable pursuant to the Warrant shall be proportionately and
equitably adjusted.
5. Broker’s
Commission/Finder’s Fee. The Company has not yet
incurred any obligation for any finder’s, broker’s or
agent’s fees or commissions in connection with the
transaction contemplated hereby. The Company, may however, incur
obligations for any registered broker’s or agent’s fees
or commissions in connection with the transaction contemplated
hereby.
6. Covenants
Regarding Indemnification. Each party hereto agrees to
indemnify, hold harmless, reimburse and defend the other party and
the other party’s officers, directors, agents, counsel,
affiliates, members, managers, control persons, and principal
shareholders, as applicable, against any claim, cost, expense,
liability, obligation, loss or damage (including reasonable legal
fees) of any nature, incurred by or imposed upon the indemnified
party or any such person which results, arises out of or is based
upon (i) any breach of any representation or warranty by the
indemnifying party in this Agreement or (ii) any breach or default
in performance by the indemnifying party of any covenant or
undertaking to be performed by the indemnifying party.
7. Intellectual
Property Rights. The Company and its subsidiaries own or
possess adequate rights or licenses to use all trademarks, trade
names, service marks, service mark registrations, service names,
patents, patent rights, copyrights, inventions, licenses,
approvals, governmental authorizations, trade secrets and rights
necessary to conduct their respective businesses as now conducted.
The Company and its subsidiaries do not have any knowledge of any
infringement by the Company or its subsidiaries of trademark, trade
name rights, patents, patent rights, copyrights, inventions,
licenses, service names, service marks, service mark registrations,
trade secret or other similar rights of others, or of any such
development of similar or identical trade secrets or technical
information by others and, except as set forth on Schedule 3, there
is no claim, action or proceeding being made or brought against, or
to the Company’s knowledge, being threatened against, the
Company or its subsidiaries regarding trademarks, trade name
rights, patents, patent rights, inventions, copyrights, licenses,
service names, service marks, service mark registrations, trade
secrets or other.
8. Foreign
Corrupt Practices Act. To the Company’s knowledge,
neither the Company, nor any director, officer, agent, employee or
other person acting on behalf of the Company or any subsidiary has,
in the course of acting for, or on behalf of, the Company, directly
or indirectly used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expenses
relating to political activity; directly or indirectly made any
direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; violated or
is in violation of any provision of the U.S. Foreign Corrupt
Practices Act of 1977, as amended, or any similar treaties of the
United States; or directly or indirectly made any bribe, rebate,
payoff, influence payment, kickback or other unlawful payment to
any foreign or domestic government or party official or
employee.
9. Miscellaneous.
(a) 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 or facsimile, addressed as set forth on the signature
pages hereto 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 facsimile,
with accurate confirmation generated by the transmitting facsimile
machine, at the address or number designated on the signature page
hereto (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.
(b) Entire
Agreement; Assignment. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject
matter hereof and may be amended only by a writing executed by both
parties hereto. Neither the Company nor Purchaser has relied on any
representations not contained or referred to in this Agreement and
the documents delivered herewith.
(c) Counterparts/Execution.
This Agreement may be executed in any number of counterparts and by
the different signatories hereto on separate counterparts, each of
which, when so executed, shall be deemed an original, but all such
counterparts shall constitute but one and the same instrument. This
Agreement may be executed by facsimile transmission, PDF,
electronic signature or other similar electronic means with the
same force and effect as if such signature page were an original
thereof.
(d) Law
Governing this Agreement. This Agreement shall be governed
by and construed in accordance with the laws of the State of New
York without regard to principles of conflicts of laws. Any action
brought by either party hereto against the other concerning the
transactions contemplated by this Agreement 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 Agreement 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
parties hereto agree to submit to the in personam jurisdiction of
such courts and hereby irrevocably waive trial by jury. The
prevailing party shall be entitled to recover from the other party
its reasonable attorney’s fees and costs.
(e) Severability.
In the event that any provision of this Agreement 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 with
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 Agreement 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 Agreement 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.
(f) Captions.
The captions of the various sections and paragraphs of this
Agreement have been inserted only for the purposes of convenience;
such captions are not a part of this Agreement and shall not be
deemed in any manner to modify, explain, enlarge or restrict any of
the provisions of this Agreement.
(g) Confidentiality.
The Purchaser covenants and agrees that it will keep confidential
and will not disclose or divulge any confidential or proprietary
information that such Purchaser may obtain from the Company
pursuant to financial statements, reports, and other materials
submitted by the Company to such Purchaser in connection with this
Offering or as a result of discussions with or inquiry made to the
Company, unless such information is known, or until such
information becomes known, to the public through no action by the
Purchaser; provided, however, that a Purchaser may disclose such
information to its attorneys, accountants, consultants, and other
professionals to the extent necessary in connection with his or her
investment in the Company so long as any such professional to whom
such information is disclosed is made aware of the
Purchaser’s obligations hereunder and such professional
agrees to be likewise bound as though such professional were a
party hereto.
(h) Entire
Agreement. This Securities Purchase Agreement (including the
Exhibits attached hereto) and other offering documents delivered at
the closing pursuant hereto, contain the entire understanding of
the parties in respect of its subject matter and supersedes all
prior agreements and understandings between or among the parties
with respect to such subject matter. The Exhibits constitute a part
hereof as though set forth in full above.
(i) Amendment;
Waiver. This Securities Purchase Agreement may not be
modified, amended, supplemented, canceled or discharged, except by
written instrument executed by both parties. No failure to exercise
and no delay in exercising, any right, power or privilege under
this Securities Purchase Agreement shall operate as a waiver, nor
shall any single or partial exercise of any right, power or
privilege hereunder preclude the exercise of any other right, power
or privilege. No waiver of any breach of any provision shall be
deemed to be a waiver of any proceeding or succeeding breach of the
same or any other provision, nor shall any waiver be implied from
any course of dealing between the parties. No extension of time for
performance of any obligations or other acts hereunder or under any
other agreement shall be deemed to be an extension of the time for
performance of any other obligations or any other acts. The rights
and remedies of the parties under this Securities Purchase
Agreement are in addition to all other rights and remedies, at law
or equity, that they may have against each other.
[signature page follows]
SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT
INFORMATION IN RESPONSE TO THIS SECTION WILL BE KEPT STRICTLY
CONFIDENTIAL
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DOLLAR AMOUNT INVESTED:
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$
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250,000
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AMOUNT INVESTED TO BE SENT VIA: ☐ Check
(enclosed) X Wire
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Name in Which Note and Warrants Should Be
Issued:
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IC,
LLC
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Name of Subscriber:
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IC,
LLC
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Taxpayer ID Number:
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27-0970688
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OR
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Social Security Number:
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Address Information:
For
individual subscribers this address should be the
Subscriber’s primary legal residence. For entities other than
individual subscribers, please provide address information for the
entities primary place of business. Information regarding a joint
subscriber should be included in the column at right.
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659
Stonequarry Rd.
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Legal
Address
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Legal
Address
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Dayton,
OH 45414
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City,
State, and Zip Code
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City,
State, and Zip Code
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AGREED AND SUBSCRIBED
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ACCEPTED
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This ___ day of _________, 2018
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This ___ day of _______, 2018
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By:
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By:
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Name: Timothy O’Loughlin
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Name: Patrick Moynihan
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Title (if any): Managing Member
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Title: Chief Executive Officer
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CERTIFICATE OF SIGNATORY
(To be
completed if the Securities are
being
subscribed for by an entity)
I,
Timothy O’Loughlin, am
the Managing Member of
IC, LLC (the
“Entity”).
I
certify that I am empowered and duly authorized by the Entity to
execute and carry out the terms of the Securities Purchase
Agreement and to purchase and hold the Note and Warrants, and
certify further that the Securities Purchase Agreement has been
duly and validly executed on behalf of the Entity and constitutes a
legal and binding obligation of the Entity.
IN
WITNESS WHEREOF, I have set my hand this ____ day of
_______________, 2018.
______________________________________
(Signature)
Exhibit B
BLOCKCHAIN INDUSTRIES, INC.
INVESTOR QUESTIONNAIRE
This Questionnaire must be answered fully and returned along with
your completed Subscription Agreement (the “Subscription
Agreement”) by and among you and Blockchain Industries, Inc.
(the “Company”) in connection with your prospective
acquisition of the Securities from the Company. Capitalized terms
used herein without definition shall have the respective meanings
given such terms as set forth in the Subscription
Agreement.
The undersigned represents and warrants that he, she or it comes
within at least one category as marked below, and that for any
category marked, he, she or it has truthfully set forth, where
applicable, the factual basis or reason the undersigned comes
within that category. ALL INFORMATION IN RESPONSE TO THIS SECTION
WILL BE KEPT STRICTLY
CONFIDENTIAL. The undersigned agrees to furnish any additional
information which the Company deems necessary in order to verify
the answers set forth below.
GENERAL INFORMATION
Name:
IC,
LLC
Date of
Birth:
N/A
Residence
Address:
Business
Address:
659
Stonequarry Rd., Dayton, OH 45414
Home Telephone
No.:
Business Telephone
No.:
E-mail
Address:
Preferred Mailing
Address:
Business
or
Home
(check one)
Tax ID or Social Sec. No.: 27-0970688
Marital
Status:
(1)
STATUS.
The undersigned represents and warrants that he, she or it comes
within at least one category marked below, and that for any
category marked, he, she or it has truthfully set forth, where
applicable, the factual basis or reason the undersigned comes
within that category. The undersigned agrees to furnish any
additional information which the Company deems necessary in order
to verify the answers set forth below.
The
undersigned is an individual (not a partnership, corporation, etc.)
whose individual net worth, or joint net worth with his or her
spouse, presently exceeds $1,000,000.
Note:
When determining net worth, you must exclude the value of your
primary residence. The related amount of indebtedness secured by
your primary residence up to its fair market value should also be
excluded. However, indebtedness secured by your primary residence
in excess of the value of your home should be considered a
liability and deducted from your net worth.
The
undersigned is an individual (not a partnership, corporation,
limited liability company, trust, etc.) who had an income in excess
of $200,000 in each of the two most recent years, or joint income
with his or her spouse in excess of $300,000 in each of those years
(in each case including foreign income, tax exempt income and full
amount of capital gains and losses but excluding any income of
other family members and any unrealized capital appreciation) and
has a reasonable expectation of reaching the same income level in
the current year.
The
undersigned is a director or executive officer of the Company which
is selling the Securities.
The
undersigned is a bank, as defined in Section 3(a)(2) of the
Securities Act; a savings and loan association or other institution
as defined in Section 3(a)(5)(A) of the Securities Act, whether
acting in its individual or fiduciary capacity; any broker or
dealer registered pursuant to Section 15 of the Exchange Act; any
insurance company as defined in Section 2(13) of the Securities
Act; any investment company registered under the Investment Company
Act of 1940 or a business development company as defined in Section
2(a)(48) of such act; any 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; any
plan established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or its
political subdivisions, for the benefit of its employees, if such
plan has total assets in excess of $5,000,000; any employee benefit
plan within the meaning of the Employee Retirement Income Security
Act of 1974 if the investment decision is made by a plan fiduciary,
as defined in Section 3(21) of such act, which is either a bank,
savings and loan association, insurance company, or registered
investment advisor, or if the employee benefit plan has total
assets in excess of $5,000,000 or, if a self-directed plan, with
investment decisions made solely by persons that are accredited
investors (describe entity).
The
undersigned is a private business development company as defined in
Section 202(a)(22) of the Investment Advisors Act of 1940 (describe
entity).
The
undersigned is either a corporation, partnership, Massachusetts or
similar business trust, or non profit organization within the
meaning of Section 501(c)(3) of the Internal Revenue Code, in each
case not formed for the specific purpose of acquiring the
Securities and with total assets in excess of $5,000,000 (describe
entity).
The
undersigned is a trust with total assets in excess of $5,000,000,
not formed for the specific purpose of acquiring the Securities,
where the purchase is directed by a “sophisticated
person” as defined in Rule 506(b)(2)(ii) of the Securities
Act.
The
undersigned is an entity (other than a trust) in which all of the
equity owners are “accredited investors” within one or
more of the above categories. If relying upon this category alone,
each equity owner must complete a separate copy of this
questionnaire (describe entity).
The
undersigned is not a U.S. Person (as described in Regulation S
under the Securities Act). The undersigned is not within any of the
categories above.
THE UNDERSIGNED AGREES THAT THE UNDERSIGNED WILL NOTIFY THE COMPANY
AT ANY TIME ON OR PRIOR TO THE CLOSING DATE IN THE EVENT THAT THE
REPRESENTATIONS AND WARRANTIES MADE BY THE UNDERSIGNED IN THIS
AGREEMENT SHALL CEASE TO BE TRUE, ACCURATE AND
COMPLETE.
(2)
SUITABILITY (please answer each question below).
(a)
For
an individual Investor, please describe your current employment,
including the company by which you are employed, its principal
business, and your title:
(b)
For
an individual Investor, please describe any college or graduate
degrees held by you:
(c)
For
all Investors, please list types of prior investments:
(d)
For all Investors, please state whether you have
participated in private placements in the past:
YES NO
(e)
If
your answer to question (d) above is “YES”, please
indicate the frequency of such prior participation in private
placements of:
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Public Companies
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Private
Companies
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Frequently
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Occasionally
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Never
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(f)
For
individual Investors, do you expect your current level of income to
significantly decrease in the foreseeable future?
YES
NO
(g)
For
trust, corporate, partnership and other institutional Investors, do
you expect your total assets to significantly decrease in the
foreseeable future?
YES
NO
(h)
For
all Investors, do you have any other investments or contingent
liabilities which you reasonably anticipate could cause you to need
sudden cash requirements in excess of cash readily available to
you?
YES
NO
(i)
For
all Investors, are you familiar with the risk aspects and the
non-liquidity of investments such as the Securities for which you
seek to subscribe?
YES
NO
(j)
For
all Investors, do you understand that there is no guarantee of
financial return on this investment and that you run the risk of
losing your entire investment?
YES
NO
(3)
MANNER
IN WHICH TITLE IS TO BE HELD (please check the appropriate
box).
Individual
Ownership Community Property
Joint
Tenant with Right of Survivorship (both parties must sign)
Partnership*
Tenants
in Common Company*
Trust*
Other *
IF SECURITIES ARE BEING PURCHASED BY AN ENTITY, THE CERTIFICATE OF
SIGNATORY ATTACHED AS SCHEDULE A HERETO MUST ALSO BE
COMPLETED.
(4)
FINRA AFFILIATION.
Are
you affiliated or associated with a FINRA member firm (please check
one)?
YES
NO
If
your answer to the question above is “YES”, please
describe:
If
the Investor is a Registered Representative with a FINRA member
firm, have the following acknowledgment signed by the appropriate
party:
The
undersigned FINRA member firm acknowledges receipt of the notice
required by the Rules of Fair Practice.
Name
of FINRA Member Firm
By:
Authorized
Officer
Date:
(5)
FOR
TRUST INVESTORS.
(a)
Certain
trusts generally may not qualify as accredited investors except
under special circumstances. Therefore, if you intend to purchase
the Securities in whole or in part through a trust, please answer
each of the following questions.
(i)
Certain
trusts generally may not qualify as accredited investors except
under special circumstances. Therefore, if you intend to purchase
the Securities in whole or in part through a trust, please answer
each of the following questions.
YES
NO
(ii)
Does
this investment in the Company exceed 10% of the trust
assets?
YES
NO
(b)
If
the trust is a revocable trust, please complete question (i) below.
If the trust is an irrevocable trust, please complete question (ii)
below.
(i)
Can
the trust be amended or revoked at any time by its
grantors?
YES
NO
If
your answer to the question above is “YES”, answer the
following questions relating to EACH grantor (please add sheets if
necessary):
(A)
Grantor
Name:
(1)
Net
worth of grantor (including spouse, if applicable) exceeds
$1,000,000?
Note:
When determining net worth, the value of the grantor’s
primary residence must be excluded. The related amount of
indebtedness secured by the grantor’s primary residence up to
its fair market value should also be excluded. However,
indebtedness secured by the grantor’s primary residence in
excess of the value of the grantor’s home should be
considered a liability and deducted from the grantor’s net
worth.
YES
NO
OR
(2)
Income
(exclusive of any income attributable to spouse) was in excess of
$200,000 for 2016 and 2017 and is reasonably expected to be in
excess of $200,000 for 2018?
YES
NO
OR
[Question
continued on next page]
(3)
Income
(including income attributable to spouse) was in excess of $300,000
for 2016 and 2017 and is reasonably expected to be in excess of
$300,000 for 2018?
YES
NO
(ii)
(A) Please
provide the name of each trustee of the trust:
(B)
Does
the trust have assets greater than $5 million?
YES
NO
(C)
Does
the trust have assets greater than $5 million?
YES
NO
[Signature Page follows]
By
signing this Questionnaire, I hereby confirm the following
statements:
(a) I
am aware that the sale of the Securities will involve securities
that are not transferable and for which no market exists, thereby
requiring my investment to be maintained for an indefinite period
of time.
(b) I
acknowledge that any delivery to me of transactions documents
relating to the Securities prior to the determination by the
Company of my suitability as an investor, shall not constitute an
offer of such Securities until such determination of suitability
shall be made, and I agree that I shall promptly return the
transaction documents to the Company upon request.
(c) My
answers to the foregoing questions are, and were on any date (if
any) that I previously purchased securities in the Company, true
and complete to the best of my information and belief and were true
on any date that I previously as of, and I will promptly notify the
Company of any changes in the information I have
provided.
Executed:
Dated:
INDIVIDUAL INVESTOR:
(Print
Name)
(Signature)
(Print Name of Joint
Investor)
(Signature
of Joint Investor)
PARTNERSHIP, CORPORATION, TRUST, LLC OR OTHER ENTITY:
IC, LLC
(Print Name of
Entity)
(Signature)
Timothy
O’Loughlin
(Print
Name and Title of Person Signing)
CERTIFICATE OF SIGNATORY
I,
Timothy
O’Loughlin
,
am
the
Managing
Member
of
IC,
LLC
(the
“Entity”).
I
certify that I am empowered and duly authorized by the Entity to
execute and carry out the terms of that certain Subscription
Agreement dated as of August 14, 2018, by and between the Entity
and Blockchain Industries, Inc. (the “Subscription
Agreement”), and to purchase and hold the Securities (as
defined in the Subscription Agreement), and certify further that
the Subscription Agreement has been duly and validly executed on
behalf of the Entity and constitutes a legal and binding obligation
of the Entity.
IN WITNESS WHEREOF, I have set my hand this day
of
,
201_.
(Signature)