8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________________________

FORM 8-K_________________________________________

Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  November 30, 2018 (November 29, 2018)

_________________________________________

Cool Holdings, Inc.
(Exact name of registrant as specified in its charter)

Commission File Number: 001-32217

Maryland	33-0599368
(State or other jurisdiction of incorporation)	(IRS Employer Identification No.)

48 NW 25th Street, Suite 108

Miami, FL 33127
(Address of principal executive offices, including zip code)

(786) 675-5246
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 1.01. Entry into a Material Definitive Agreement.

On November 29, 2018, Cool Holdings Inc. (the “Company”) closed a private placement of 12% unsecured convertible notes (the “Notes”) in which it raised gross proceeds of $1,220,000. The Notes mature 12 months after issuance and are convertible into shares of the Company’s common stock (the “Conversion Shares”) beginning six months after the date of issuance at $4.40 per share.  Interest on the Notes is payable in shares of common stock of the Company at the same rate at the earlier of conversion or maturity.  Investors in the Notes also received a warrant to purchase one-half of one share of common stock for each Conversion Share issuable under the notes at an exercise price of $4.40 per share (each full warrant, a “Warrant”). The Warrants are exercisable beginning six months after issuance and expire 36 months from the date of issuance and up to 138,638 common shares of the Company are issuable on exercise of the Warrants. The Notes and Warrants were issued pursuant to a subscription agreement.

The Notes were issued offshore pursuant to Rule 903 of Regulation S under the United States Securities Act of 1933, as amended.

The foregoing is a summary of certain material terms and conditions of the Notes, the Warrants, and the Subscription Agreements and are not a complete discussion of such agreements. Accordingly, the foregoing is qualified in its entirety by reference to the full text of the form of Notes, the form of Warrants, and the form Subscription Agreements attached to this Current Report on Form 8-K in Exhibits 4.1, 4.2 and 10.1 respectively, and incorporated herein by reference.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information disclosed in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.    

Item 3.02. Unregistered Sales of Equity Securities.

The information disclosed in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 3.02.

Item 9.01.  Financial Statements and Exhibits.

(d)       Exhibits.

Exhibit No.	Description
4.1	Form of Unsecured Convertible Note.
4.2	Form of Warrant.
10.1	Form of Subscription Agreement.

Signature

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

		Cool Holdings, Inc.
Date:	November 30, 2018	By:	/s/ Alfredo Carrasco
			Alfredo Carrasco
			Chief Financial Officer

EX-4.1

Exhibit 4.1

THIS NOTE AND THE SECURITIES INTO WHICH THIS NOTE MAY BE CONVERTED HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE OR SOLD, ASSIGNED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION UNLESS WRITTEN EVIDENCE REASONABLY SATISFACTORY TO THE BORROWER IS SUPPLIED TO THE BORROWER TO THE EFFECT THAT THE PROPOSED OFFER, SALE, ASSIGNMENT OR OTHER TRANSFER MAY BE EFFECTED WITHOUT SUCH REGISTRATION.

unSECURED CONVERTIBLE note

$______________November 29, 2018

FOR VALUE RECEIVED, COOL HOLDINGS, INC., a Maryland corporation (the “Borrower”), hereby promises to pay [___________] (the “Holder”), the principal sum of [_____________] and No/100 Dollars ($[__________]), together with simple interest thereon.  Interest shall accrue at a rate of twelve percent (12%) per annum commencing on the date hereof, and shall be calculated based on a 360-day year of twelve 30-day months.  Unless earlier converted into shares of Equity Securities (as defined below) pursuant to the terms of this Note or paid in full in accordance with the terms hereof, (a) accrued interest shall be payable to the Holder in stock of the Borrower upon maturity of the Note, and (b) the outstanding principal amount and any unpaid accrued interest shall be due and payable by Borrower on demand by the Holder at any time after the earlier of: (i) the date 12 months following the original issuance date of this Note (“Maturity Date”) and (ii) an Event of Default (as defined below).  

1.Payment.  Except in connection with the conversion of principal and unpaid accrued interest hereunder into the common stock of the Borrower (the “Equity Securities”) as provided for herein, all payments shall be made in lawful money of the United States of America at the principal office of the Borrower, or at such other place as the holder hereof may from time to time designate in writing to the Borrower.    

2.Unsecured Obligation.  This Note is an unsecured obligation of the Borrower.

3.Conversion of the Note.  This Note shall be convertible according to the following terms:

(a)The principal and unpaid accrued interest of this Note will be automatically converted into Equity Securities at the election of the Holder which may be exercised at any time after the date that is 6 months following the issuance of this note.  The number of Equity Securities to be issued upon such conversion shall be equal to the quotient obtained by dividing the outstanding principal and unpaid accrued interest due on this Note on the date of conversion, by the Conversion Price. “Conversion Price” shall mean $4.40.

(b)Upon the conversion of this Note, the Holder shall surrender this Note, duly endorsed, at the principal office of the Borrower.  As soon as practicable thereafter, the Borrower will issue in the name of and deliver to the Holder, a certificate or certificates for the number of

shares of the Equity Securities to which the Holder shall be entitled on such conversion.  Such conversion shall be deemed to have been made immediately prior to the close of business on the date of conversion.

4.Events of Defaults and Remedies.  The following events shall be considered Events of Default with respect to this Note: (a) the Borrower shall default in the payment of any part of the principal or unpaid accrued interest on this Note when due; (b) the Borrower or any of its subsidiaries shall make an assignment for the benefit of creditors, or shall admit in writing its inability to pay its debts as they become due, or shall file a voluntary petition for bankruptcy, or shall file any petition or answer seeking for itself any reorganization, arrangement, composition, readjustment, dissolution or similar relief under any present or future statute, law or regulation, or shall file any answer admitting the material allegations of a petition filed against the Borrower or any subsidiary in any such proceeding, or shall seek or consent to or acquiesce in the appointment of any trustee, receiver or liquidator of the Borrower or any subsidiary, or of all or any substantial part of the properties of the Borrower or any subsidiary, or the Borrower or any subsidiary or any of their respective directors or majority stockholders shall take any action looking to the dissolution or liquidation of the Borrower or any subsidiary; (c) within thirty (30) days after the commencement of any proceeding against the Borrower or any subsidiary seeking any bankruptcy reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any present or future statute, law or regulation, such proceeding shall not have been dismissed, or within thirty (30) days after the appointment without the consent or acquiescence of the Borrower or any subsidiary of any trustee, receiver or liquidator of the Borrower or any subsidiary or of all or any substantial part of the properties of the Borrower or any subsidiary, such appointment shall not have been vacated; (d) any material representation or warranty made by the Borrower or any subsidiary in this Note or any agreement or instrument provided to the Holder in accordance with the specific terms and conditions of this Note shall prove to have been incorrect when made in any material respect; (e) the Borrower or any subsidiary fails to perform or observe any covenant contained in this Note where the failure to do so could reasonably be expected to have a material adverse effect on the business, assets or financial condition of the Borrower; (f) any material judgment, writ, warrant of attachment or execution or similar process shall be issued or levied against a material part of the property of the Borrower and such judgment, writ, warrant of attachment or execution or similar process shall not be released, vacated or fully bonded within sixty (60) days after its issue or levy; or (g) this Note is deemed to be unenforceable.  Upon the occurrence of an Event of Default under Section 4 hereof, at the option and upon the declaration of the Holder of this Note, the entire unpaid principal and accrued and unpaid interest on this Note shall, without presentment, demand, protest, or notice of any kind, all of which are hereby expressly waived, be forthwith due and payable, and such holder may, immediately and without expiration of any period of grace, enforce payment of all amounts due and owing under this Note and exercise any and all other remedies granted to it at law, in equity or otherwise. The Borrower shall promptly notify the Holder of the occurrence of any Event of Default.

5.Miscellaneous.

(a)Successors and Assigns.  Except as otherwise provided herein, the terms and conditions of this Note shall inure to the benefit of and be binding upon the respective successors and assigns of the parties.  Nothing in this Note, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any

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rights, remedies, obligations, orliabilities under or by reason of this Note, except as expressly provided in this Note.  This Note shall be transferable and assignable by the Holder at any time subsequent to the datehereof subject to the requirement (i) that any transferee or assignee of this Note must first agree inwriting, in a form acceptable to the Borrower, to be bound by the terms of this Note, (ii) that any suchassignment or transfer be, in the reasonable opinion of the Borrower’s counsel, in full compliance withapplicable state and federal securities laws.

(b)Governing Law.  This Note shall be governed by and construed under the laws of the State of New York, without giving effect to the principles of conflicts of law thereof. Any claims or legal actions arising hereunder shall be commenced and maintained in any state or federal court of competent jurisdiction located in the State of New York, and the Holder consents and submits to the exclusive jurisdiction and venue of any such court.

(c)Severability.  If one or more provisions of this Note are held to be unenforceable under applicable law, such provision shall be excluded from this Note and the balance of this Note shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.

(Signature Page Follows)

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IN WITNESS WHEREOF, the Borrower has caused this Unsecured Convertible Note to be signed in its name and executed as of the date first above written.

COOL HOLDINGS, INC.

By:  ______________________________

Name: Vernon A. LoForti

Title: Vice President & Secretary

ACKNOWLEDGED AND AGREED:

HOLDER:

____________________________

Signature:  

Name:  

Title:  

[Signature Page to Unsecured Convertible Note]

EX-4.2

Exhibit 4.2

COMMON STOCK PURCHASE WARRANT

COOL HOLDINGS, INC.

Warrant Shares: ________ Issue Date: November 29, 2018

THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, ● (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the date that is 6 months following the Original Issue Date (as defined below) (the “Exercisability Date”) and on or prior to the close of business on the third anniversary of the Original Issue Date (the “Termination Date”) but not thereafter, to subscribe for and purchase from Cool Holdings, Inc., a Delaware corporation (the “Company”), up to _______ shares (the “Warrant Shares”) of common stock, par value $0.001 (the “Common Stock”), of the Company.

Section 1. Definitions. Capitalized terms used herein shall have the meanings given to them herein. As used herein, “Original Issue Date” means November 29, 2018 and “business day” means any day on which NASDAQ, Inc. is open for trading.

Section 2. Exercise.

a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Exercisability Date and on or before the Termination Date by delivery to the Company (or such other office or agency of the Company as it may designate by notice in writing to the registered Holder at the address of the Holder appearing on the books of the Company) of a duly executed facsimile copy of the Notice of Exercise Form annexed hereto; and, within three (3) business days of the date said Notice of Exercise is delivered to the Company, the Company shall have received payment of the aggregate Exercise Price of the shares thereby purchased by wire transfer or cashier’s check drawn on a United States bank or, if available, pursuant to the cashless exercise procedure specified in Section 2(c) below. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) business days of the date the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased or, in the case of a cashless exercise in accordance with Section 2(c), the number of Warrant Shares that would have been issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.

b) Exercise Price. The exercise price per share of the Common Stock under this Warrant shall be $4.40 (the “Exercise Price”).

c) Cashless Exercise.  At the election of the Company, this Warrant may also be exercised (and the Company shall be permitted to satisfy its obligation to issue the Warrant Shares to be issued on exercise of this Warrant by issuing to the Holder), in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a certificate for the number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

(A) = the VWAP on the business day immediately preceding the date on which Holder elects to exercise this Warrant by means of a “cashless exercise,” as set forth in the applicable Notice of Exercise;

(B) =	the Exercise Price of this Warrant, as adjusted hereunder; and
(X) =	the number of Warrant Shares that would be issuable upon the requested exercise (or partial exercise, as the case may be) of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.

“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a market or exchange, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on such market or exchange on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a business day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the OTC Bulletin Board is not a market or exchange, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the OTC Bulletin Board, (c) if the Common Stock is not then listed or quoted for trading on the OTC Bulletin Board and if prices for the Common Stock are then quoted by The OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of quoting prices), the most recent bid price per share of the Common Stock so quoted, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Company and reasonably acceptable to the Required Holders (as defined herein), the fees and expenses of which shall be paid by the Company.

d) Mechanics of Exercise.

i. Delivery of Certificates Upon Exercise. Certificates for shares purchased hereunder shall be transmitted by the transfer agent to the Holder by crediting the account of the Holder’s prime broker with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either (A) there is an effective Registration Statement covering the issuance of the Warrant Shares to the Holder or (B) this Warrant is being exercised via cashless exercise, and otherwise by physical delivery to the address specified by the Holder in the Notice of Exercise, in either case, by the date that is three (3) business days after the delivery to the Company of the Notice of Exercise Form (such date, the “Warrant Share Delivery Date”). This Warrant shall be deemed to have been exercised on the first date on which all of the foregoing have been delivered to the Company. The Warrant Shares shall be deemed to have been issued, and Holder or any other person so designated to be named therein shall be deemed to have become a holder of record of such shares for all purposes, as of the date the Warrant has been properly exercised, with payment to the Company of the Exercise Price (or by cashless exercise, if permitted) and all taxes required to be paid by the Holder, if any, pursuant to Section 2(d)(vi) prior to the issuance of such shares, having been paid.

ii. Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of the Holder and upon surrender of this Warrant certificate, at the time of delivery of the certificate or certificates representing Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.

iii. Rescission Rights. If the Company fails to cause the transfer agent to transmit to the Holder a certificate or the certificates representing the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then, the Holder will have the right to rescind such exercise.

iv. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.

v. Charges, Taxes and Expenses. Issuance of certificates for Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses shall be paid by the

Company, and such certificates shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that in the event certificates for Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.

vi. Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.

e) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s affiliates), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its affiliates shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its affiliates and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company including, without limitation, any other securities of the Company or any Company subsidiary consolidated in the Company’s financial statements which would entitle the holder thereof to acquire at any time Common Stock (“Common Stock Equivalents”) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its affiliates. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any affiliates) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any affiliates) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination and shall have no liability for exercises of the Warrant that are in non-compliance with the Beneficial Ownership Limitation. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Securities and Exchange Commission (the “Commission”), as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the transfer agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within two (2) business days confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding as established by (A), (B) or (C) above, as applicable. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its affiliates since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon not less than 61 days’ prior notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any such increase or decrease will not be effective until the 61^st

day after such notice is delivered to the Company and shall only be effective with respect to such Holder. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.

Section 3. Certain Adjustments.

a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant or any other warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

b) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (other than as provided for under Section 3(a)), or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of clarity, no bona fide underwritten offering of the Company’s securities will be deemed to be a Fundamental Transaction. For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the

same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.

The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant in accordance with the provisions of this Section 3(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant with the same effect as if such Successor Entity had been named as the Company herein.

(c) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

(d) Notice to Holder.

i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly mail to the Holder a notice setting forth the Exercise Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.

ii. Notice to Allow Exercise by Holder. If during the term in which this Warrant may be exercised by the Holder (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be mailed to the Holder at its last address as it shall appear upon the Warrant Register of the Company, at least ten (10) calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure

to mail such notice or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.

Section 4. Transfer of Warrant.

a) Transferability. Subject to compliance with applicable securities laws, this Warrant and all rights hereunder are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.

b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall include reference to the initial issuance date set forth on the first page of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto and the Warrant number.

c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual written notice to the contrary.

Section 5. Miscellaneous.

a) No Rights as Stockholder Until Exercise. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i).

b) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it, and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor, in lieu of such Warrant or stock certificate.

c) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a business day, then, such action may be taken or such right may be exercised on the next succeeding business day.

d) Authorized Shares. The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable

action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. “Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE AMEX, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange or the OTC Bulletin Board (or any successors to any of the foregoing). The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).

Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of the Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be necessary to enable the Company to perform its obligations under this Warrant.

Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

e) Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance with the laws of the State of New York.

f) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.

g) Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice Holder’s rights, powers or remedies. Without limiting any other provision of this Warrant, if the Company or the Holder willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the other party, then such party shall pay to the other party such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by such party in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

h) Notices. The Company shall provide the Holder with prompt written notice of all actions taken pursuant to this Warrant.  Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in writing, will be mailed (a) if within the domestic United States by first-class registered or certified airmail, or nationally recognized overnight express courier, postage prepaid, or by facsimile or (b) if delivered from outside the United States, by International Federal Express or facsimile, and (c) will be deemed given (i) if delivered by first-class registered or certified mail domestic, three business days after so mailed, (ii) if delivered by nationally recognized overnight carrier, one business day after so mailed, (iii) if delivered by International Federal Express, two business days after so mailed and (iv) if delivered by facsimile, upon electronic confirmation of receipt, and will be delivered and addressed as follows:

(i) if to the Company, to:

Cool Holdings, Inc.
48 NW 25^th Street, Suite 108
Miami, FL 33127
Attention:  Chief Financial Officer

with a copy to:

Dorsey & Whitney LLP

TD Canada Trust Tower

Brookfield Place, 161 Bay Street, Suite 4310

Toronto, Ontario M5J 2S1 Canada

Attention: Richard Raymer

(ii) if to the Holder, at the address of the Holder appearing on the books of the Company.

i) Limitation of Liability. No provision hereof, in the absence of any affirmative action by Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of Holder, shall give rise to any liability of Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

j) Remedies. The Holder and the Company, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant.

k) Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.

l) Amendment. This Warrant is one of a series of Warrants of like tenor issued by the Company. Any term of this Warrant may be amended or waived upon the written consent of the Company and the holders of Warrants representing at least 66 2/3% of the number of shares of Common Stock then subject to all outstanding August Warrants (the “Required Holders”).

m) Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

n) Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

********************

(Signature Page Follows)

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

COOL HOLDINGS, INC.
By:
	Name:	Vernon A. LoForti
	Title:	Vice President & Secretary

NOTICE OF EXERCISE

TO: COOL HOLDINGS, INC.

(1) The undersigned hereby elects to purchase __________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any. By executing this notice, the undersigned Holder represents that it has complied with the Holder’s Exercise Limitations set forth in Section 2(e) of this Warrant.

(2) Payment shall take the form of (check applicable box):

☐ in lawful money of the United States; or

☐ if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).

(3) Please issue a certificate or certificates representing said Warrant Shares in the name of the undersigned or in such other name as is specified below:

____________________________________________________

The Warrant Shares shall be delivered to the following DWAC Account Number or by physical delivery of a certificate to:

____________________________________________________

____________________________________________________

____________________________________________________

[SIGNATURE OF HOLDER]

Name of Investing Entity:

Signature of Authorized Signatory of Investing Entity:

Name of Authorized Signatory:

Title of Authorized Signatory:

Date:

ASSIGNMENT FORM

(To assign the foregoing warrant, execute this form and supply required information. Do not use this form to exercise the warrant.)

FOR VALUE RECEIVED, [   ] all of or [                   ] shares of the foregoing Warrant and all rights evidenced thereby are hereby assigned to __________________________

whose address is

.

Dated: ________ __, ____

Holder’s Signature:

Holder’s Address:

Signature Guaranteed:

NOTE: The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank or trust company. Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant.

EX-10.1

Exhibit 10.1

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

SUBSCRIPTION AGREEMENT OF COOL HOLDINGS, INC.

TO: Cool Holdings, Inc.(the “Company”)

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

(Name of Purchaser - please print)	Aggregate amount of Notes: Aggregate Number of Warrants: ________________
By:(Authorized Signature)	Aggregate Subscription Price: USD$
(Official Capacity or Title – please print)	If the Purchaser is signing as agent for a principal and the Purchaser is not a trust company or a portfolio manager, in either case, purchasing as trustee or agent for accounts fully managed by it, complete the following:
(Please print name of individual whose signature appears above if different than the name of the Purchaser printed above.)

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(Purchaser’s Address) (Telephone Number) (Fax Number)	(Name of Principal)
	(Principal’s Address)
Register the Securities as set forth below:(Name)	Deliver the Securities as set forth below:(Name)
(Account reference, if applicable)	(Account reference, if applicable)
(Purchaser’s Address)	(Contact Name) (Address)
	(Telephone Number)

Additional Forms:  

U.S. Purchasers (as defined herein)	Non-U.S. Purchasers
Please complete the attached IRS form W-9	Please complete the attached IRS formW-8BEN

2

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

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

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

	COOL HOLDINGS, INC.
Per:
	Vernon A. LoForti Vice President & Secretary

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SCHEDULE “A”

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

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

(a) “Offering” means the offering of the Notes and the Warrants.

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

The Purchaser understands and acknowledges the following:

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

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

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

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

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

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

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

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

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

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

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

(h) the Purchased Securities are being acquired as part of the Offering.

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3. Delivery and Payment

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

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

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

(c) one completed and duly signed copy of this Subscription Agreement;

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

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

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

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

4. Closing

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

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

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

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

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

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

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

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

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

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

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

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

5. Offering

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

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6. Acceptance of Subscription

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

7. Acknowledgements re: Prospectus Exemptions, etc.

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

The Purchaser acknowledges and agrees that:

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

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

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

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

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

A-5

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

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

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

(f) the Purchaser shall:

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

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

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

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

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

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

8. Conditions to Closing

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

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

9. Representations, Warranties and Covenants of the Purchaser

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

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

(b) Canadian Purchasers –

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(i) the sale is to the Company;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(iii) relating to the future price or value of the Purchased Securities or

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

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

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

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

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

10. Representations, Warranties and Covenants of the Company

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

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

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

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

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

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

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

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

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

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

11. Proceeds of Crime

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

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

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

12. Survival

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

13. Governing Law

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

14. Costs

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

15. Assignment

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

16. Enurement

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

17. Entire Agreement and Headings

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

18. Time of Essence

Time shall be of the essence of this Subscription Agreement.

19. Independent Legal Advice

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

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

20. Counterparts and Facsimile or Electronic Deliveries

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

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SCHEDULE “B”

PAYMENT INSTRUCTIONS

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

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

Bank:Silicon Valley Bank

Address:3003 Tasman Drive

Santa Clara, CA 95054

Account Name:InfoSonics Corporation

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

Account No.: 3302419343

Swift Code: SVBKUS6S

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SCHEDULE “C”

ACCREDITED INVESTORS

REPRESENTATION LETTER

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

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

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

☐ British Columbia	☐ Alberta	☐ Saskatchewan
☐ Manitoba	☐ Ontario	☐ Québec
☐ New Brunswick	☐ Nova Scotia	☐ Prince Edward Island
☐ Newfoundland and Labrador

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

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

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

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

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

D-1

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

Dated:  ___________________, 201___.

	Print Name of Purchaser
By:
	Signature
	Title

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

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APPENDIX “A”
(TO SCHEDULE “C”)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

FOR THE PURPOSES HEREOF

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

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

(c)“eligibility adviser” means:

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

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

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

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

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

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

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

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

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

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

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

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

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

(m) “spouse” means, an individual who:

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

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

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

ALL MONETARY REFERENCES ARE IN CANADIAN DOLLARS.

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SCHEDULE “D”

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

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

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

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

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

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

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

DATED at this day of , 201___.

Name of Purchaser
By:
	Signature Title:

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SCHEDULE “E”

U.S. ACCREDITED INVESTOR CERTIFICATE

TO:COOL HOLDINGS, INC.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Print or Type NamePrint or Type Name

SignatureSignature

Name and Title of Signatory

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