Subscription Agreement
Exhibit 3.4
THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE OR ANY OTHER JURISDICTION. THERE ARE FURTHER RESTRICTIONS ON THE TRANSFERABILITY OF THE SECURITIES DESCRIBED HEREIN.
THE PURCHASE OF THE SECURITIES INVOLVES A HIGH DEGREE OF RISK AND SHOULD BE CONSIDERED ONLY BY PERSONS WHO CAN BEAR THE RISK OF THE LOSS OF THEIR ENTIRE INVESTMENT.
Ladies and Gentlemen:
The undersigned understands that Andina Gold Corp., a corporation organized under the laws of Nevada (the “Corporation”), is offering up to 1,900 units at a price of US$1,000 per unit for an aggregate of US$1,900,000 principal amount (“Units”) to accredited investors, each Unit consisting of a (1) a convertible note with face value of US$1,000, due September 30, 2022 at 12% interest per annum, which interest is payable quarterly (the “Note”), and (2) one Common Stock purchase warrant exercisable to purchase 5,000 additional shares of the Corporation’s common stock (each share a “Warrant Share”) at an exercise price of US$0.40 per Warrant Share (the “Warrant”) with an expiration date of April 30, 2023. The Notes are convertible into shares of the Corporation’s common stock, par value US$0.001 per share (the “Shares”), at a conversion price of US$0.20 per Share. The Units, Notes, Shares, Warrants and the Warrant Shares are referred to herein as the “Securities”. The minimum subscription amount is US$20,000.
The undersigned further understands that the offering is being made without registration of the Securities under the Securities Act of 1933, as amended (the “Securities Act”), or any securities law of any state of the United States or of any other jurisdiction, and is being made only to “accredited investors” (as defined in Rule 501 of Regulation D under the Securities Act).
1. Subscription. Subject to the terms and conditions hereof and the provisions of the Offering Documents, the undersigned hereby irrevocably subscribes for the Units set forth in Appendix A hereto for the aggregate purchase price set forth in Appendix A, which is payable as described in Section 4 hereof. The undersigned acknowledges that the Securities will be subject to restrictions on transfer as set forth in this subscription agreement (the “Subscription Agreement”).
2. Acceptance of Subscription and Issuance of Securities. It is understood and agreed that the Company shall have the sole right, at its complete discretion, to accept or reject this subscription, in whole or in part, for any reason and that the same shall be deemed to be accepted by the Company only when it is signed by a duly authorized officer of the Company and delivered to the undersigned at the Closing referred to in Section 3 hereof. Subscriptions need not be accepted in the order received, and the Units may be allocated among subscribers. Notwithstanding anything in this Subscription Agreement to the contrary, the Company shall have no obligation to issue any of the Securities to any person who is a resident of a jurisdiction in which the issuance of Securities to such person would constitute a violation of the securities, “blue sky” or other similar laws of such jurisdiction (collectively referred to as the “State Securities Laws”).
3. The Closing. The closing of the and sale of the Units (the “Closing”) shall take place at the offices of purchase Company, by electronic signature, from time to time as subscriptions are accepted, but in any event no later than May 15, 2021.
4. Payment for Securities. Payment for the Units shall be received by the Company from the undersigned by wire transfer of immediately available funds or other means approved by the Company at or prior to the Closing, to the account indicated in Schedule C, in the amount as set forth in Appendix A hereto. The Company shall deliver the Notes and the Warrants representing the Units to the undersigned at the Closing
5. Representations and Warranties of the Company. As of the Closing, the Company represents and warrants that:
(a) The Company is duly formed and validly existing under the laws of Nevada, with full power and authority to conduct its business as it is currently being conducted and to own its assets; and has secured any other authorizations, approvals, permits and orders required by law for the conduct by the Company of its business as it is currently being conducted.
(b) The Units have been duly authorized and, when issued, delivered and paid for in the manner set forth in this Subscription Agreement, will be validly issued, fully paid and nonassessable.
6. Representations and Warranties of the Undersigned. The undersigned hereby represents and warrants to and covenants with the Company that:
(a) General.
(i) The undersigned has all requisite authority (and in the case of an individual, the capacity) to purchase the Units, enter into this Subscription Agreement and to perform all the obligations required to be performed by the undersigned hereunder, and such purchase will not contravene any law, rule or regulation binding on the undersigned or any investment guideline or restriction applicable to the undersigned.
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(ii) The undersigned is a resident of the state set forth on the signature page hereto and is not acquiring the Units as a nominee or agent or otherwise for any other person.
(iii) The undersigned will comply with all applicable laws and regulations in effect in any jurisdiction in which the undersigned purchases or sells Securities and obtain any consent, approval or permission required for such purchases or sales under the laws and regulations of any jurisdiction to which the undersigned is subject or in which the undersigned makes such purchases or sales, and the Company shall have no responsibility therefor.
(b) Information Concerning the Company.
(i) The undersigned has had access to the Company’s filings with the Securities Exchange Act of 1934, as amended (the “SEC Filings”). The undersigned acknowledges that the Company’s business is in transition and the SEC Filings do not reflect the Company’s proposed business operations. In purchasing the Units the undersigned is relying upon its assessment of management’s ability to develop and implement a new business plan. There can be no assurance that it will be successful in doing so.
(ii) The undersigned understands and accepts that the purchase of the Units involves various risks, including the risks outlined in the SEC Filings and in this Subscription Agreement. The undersigned represents that it is able to bear any loss associated with an investment in the Units.
(iii) The undersigned confirms that it is not relying on any communication (written or oral) of the Company or any of its affiliates, as investment advice or as a recommendation to purchase the Units. It is understood that information and explanations related to the terms and conditions of the Units provided by the Company or any of its affiliates shall not be considered investment advice or a recommendation to purchase the Units, and that neither the Company nor any of its affiliates or advisors is acting or has acted as an advisor to the undersigned in deciding to invest in the Units. The undersigned acknowledges that neither the Company nor any of its affiliates has made any representation regarding the proper characterization of the Units for purposes of determining the undersigned’s authority to invest in the Units.
(iv) The undersigned has had access to such information concerning the Company and the Units as it deems necessary to enable it to make an informed investment decision concerning the purchase of the Units.
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(v) The undersigned understands that, unless the undersigned notifies the Company in writing to the contrary at or before the Closing, each of the undersigned’s representations and warranties contained in this Subscription Agreement will be deemed to have been reaffirmed and confirmed as of the Closing, taking into account all information received by the undersigned.
(vi) The undersigned acknowledges that the Company has the right in its sole and absolute discretion to abandon this private placement at any time prior to the completion of the offering. This Subscription Agreement shall thereafter have no force or effect and the Company shall return the previously paid subscription price of the Units, without interest thereon, to the undersigned.
(vii) The undersigned understands that no federal or state agency has passed upon the merits or risks of an investment in the Units or made any finding or determination concerning the fairness or advisability of this investment.
(c) Non-reliance.
(i) The undersigned represents that it is not relying on (and will not at any time rely on) any communication (written or oral) of the Company, as investment advice or as a recommendation to purchase the Units, it being understood that information and explanations related to the terms and conditions of the Units and the other transaction documents that are described in the Offering Documents shall not be considered investment advice or a recommendation to purchase the Units.
(ii) The undersigned confirms that the Company has not (A) given any guarantee or representation as to the potential success, return, effect or benefit (either legal, regulatory, tax, financial, accounting or otherwise) of an investment in the Units or (B) made any representation to the undersigned regarding the legality of an investment in the Units under applicable legal investment or similar laws or regulations. In deciding to purchase the Units, the undersigned is not relying on the advice or recommendations of the Company and the undersigned has made its own independent decision that the investment in the Units is suitable and appropriate for the undersigned.
(d) Status of Undersigned.
(i) The undersigned has such knowledge, skill and experience in business, financial and investment matters that the undersigned is capable of evaluating the merits and risks of an investment in the Securities. With the assistance of the undersigned’s own professional advisors, to the extent that the undersigned has deemed appropriate, the undersigned has made its own legal, tax, accounting and financial evaluation of the merits and risks of an investment in the Securities and the consequences of this Subscription Agreement. The undersigned has considered the suitability of the Securities as an investment in light of its own circumstances and financial condition and the undersigned is able to bear the risks associated with an investment in the Securities and its authority to invest in the Securities.
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(ii) The undersigned is an “accredited investor” as defined in Rule 501(a) under the Securities Act. The undersigned agrees to furnish any additional information requested by the Company or any of its affiliates to assure compliance with applicable U.S. federal and state securities laws in connection with the purchase and sale of the Securities. The undersigned acknowledges that the undersigned has completed the Investor Questionnaire contained in Appendix B and that the information contained therein is complete and accurate as of the date thereof and is hereby affirmed as of the date hereof. Any information that has been furnished or that will be furnished by the undersigned to evidence its status as an accredited investor is accurate and complete, and does not contain any misrepresentation or material omission.
(e) Restrictions on Transfer or Sale of Units. As applies to the Purchaser:
(i) The undersigned is acquiring the Units solely for the undersigned’s own beneficial account, for investment purposes, and not with a view to, or for resale in connection with, any distribution of the Units. The undersigned understands that the Securities have not been registered under the Securities Act or any State Securities Laws by reason of specific exemptions under the provisions thereof which depend in part upon the investment intent of the undersigned and of the other representations made by the undersigned in this Subscription Agreement. The undersigned understands that the Company is relying upon the representations and agreements contained in this Subscription Agreement (and any supplemental information) for the purpose of determining whether this transaction meets the requirements for such exemptions.
(ii) The undersigned understands that the Securities are “restricted securities” under applicable federal securities laws and that the Securities Act and the rules of the U.S. Securities and Exchange Commission (the “Commission”) provide in substance that the undersigned may dispose of the Securities only pursuant to an effective registration statement under the Securities Act or an exemption therefrom, and the undersigned understands that the Company has no obligation or intention to register any of the Securities, or to take action so as to permit sales pursuant to the Securities Act (including Rule 144 thereunder). Accordingly, the undersigned understands that under the Commission’s rules, the undersigned may dispose of the Securities principally only in “private placements” which are exempt from registration under the Securities Act, in which event the transferee will acquire “restricted securities” subject to the same limitations as in the hands of the undersigned. Consequently, the undersigned understands that the undersigned must bear the economic risks of the investment in the Securities for an indefinite period of time.
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(iii) The undersigned agrees: (A) that the undersigned will not sell, assign, pledge, give, transfer or otherwise dispose of the Securities or any interest therein, or make any offer or attempt to do any of the foregoing, except pursuant to a registration of the Securities under the Securities Act and all applicable State Securities Laws, or in a transaction which is exempt from the registration provisions of the Securities Act and all applicable State Securities Laws; (B) that the certificates representing the Securities will bear a legend making reference to the foregoing restrictions; and (C) that the Company and it affiliates shall not be required to give effect to any purported transfer of such Securities except upon compliance with the foregoing restrictions.
7. Conditions to Obligations of the Undersigned and the Company. The obligations of the undersigned to purchase and pay for the Units specified in Appendix A and of the Company to sell the Units are subject to the satisfaction at or prior to the Closing of the following conditions precedent: the representations and warranties of the Company contained in Section 5 hereof and of the undersigned contained in Section 6 hereof shall be true and correct as of the Closing in all respects with the same effect as though such representations and warranties had been made as of the Closing.
8. Obligations Irrevocable. The obligations of the undersigned shall be irrevocable.
9. Legend. The certificates representing the shares and Warrant Shares acquired pursuant to the Note conversion or, respectively, through the exercise of the Warrant sold pursuant to this Subscription Agreement will be imprinted with a legend in substantially the following form:
“THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. THE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE STATE SECURITIES LAWS AND THE SECURITIES LAWS OF OTHER JURISDICTIONS, AND IN THE CASE OF A TRANSACTION EXEMPT FROM REGISTRATION, UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT AND SUCH OTHER APPLICABLE LAWS.”
10. Waiver, Amendment. Neither this Subscription Agreement nor any provisions hereof shall be modified, changed, discharged or terminated except by an instrument in writing, signed by the party against whom any waiver, change, discharge or termination is sought.
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11. Assignability. Neither this Subscription Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by either the Company or the undersigned without the prior written consent of the other party.
12. Waiver of Jury Trial. THE UNDERSIGNED IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING ARISING OUT OF THE TRANSACTIONS CONTEMPLATED BY THIS SUBSCRIPTION AGREEMENT.
13. Governing Law. This Subscription Agreement shall be governed by and construed in accordance with the laws of the State of Nevada.
14. Section and Other Headings. The section and other headings contained in this Subscription Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Subscription Agreement.
15. Counterparts. This Subscription Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which together shall be deemed to be one and the same agreement.
16. Notices. All notices and other communications provided for herein shall be in writing and shall be deemed to have been duly given if delivered personally or sent by registered or certified mail, return receipt requested, postage prepaid to the following addresses (or such other address as either party shall have specified by notice in writing to the other):
| If to the Company: | Andina Gold Corp. |
| 0000 Xxxxx Xxxxxx Xxxxx X000 | |
| Xxxxxxxxx, Xxxxxxxx 00000 | |
| Email: x.xxxxxx@xxxxxxxxxx.xxx | |
| To the Investor: | To the address on Appendix A |
17. Binding Effect. The provisions of this Subscription Agreement shall be binding upon and accrue to the benefit of the parties hereto and their respective heirs, legal representatives, successors and assigns.
18. Survival. All representations, warranties and covenants contained in this Subscription Agreement shall survive (i) the acceptance of the subscription by the Company and the Closing, (ii) changes in the transactions, documents and instruments described in the Offering Documents which are not material or which are to the benefit of the undersigned and (iii) the death or disability of the undersigned.
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19. Notification of Changes. The undersigned hereby covenants and agrees to notify the Company upon the occurrence of any event prior to the closing of the purchase of the Securities pursuant to this Subscription Agreement which would cause any representation, warranty, or covenant of the undersigned contained in this Subscription Agreement to be false or incorrect.
20. Severability. If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the undersigned has executed this Subscription Agreement ___ day of ___________2021.
| PURCHASER (if an individual): | PURCHASER (if an entity): |
| By | |||
| Name: | Legal Name of Entity | ||
| By | |||
| Name: | |||
| Title: | |||
| Tax ID Number:________________________ | |||
| Address: | |||
| State/Country of Domicile or Formation: | |
| Aggregate Subscription Amount: | ||
| US$ | ||
The offer to purchase Units as set forth above is confirmed and accepted by the Company as to __________ principal amount of Units.
| ANDINA GOLD CORP. |
| By | ||
| Name: | Xxxxxx X. Xxxxxx | |
| Title: | Chief Financial Officer |
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APPENDIX A
Consideration To Be Delivered
| Securities to Be Acquired | Aggregate Purchase Price to be Paid | |
| _________ Principal Amount of Units | US$_______________________ | |
| Address: | ||
| PURCHASER | ||
| Name:_______________________ | ||
| Title: |
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Exhibit B
Investor Questionnaire
The categories listed herein contain certain specifically defined terms. If you are unsure as to the meanings of those terms, or are unsure as to the applicability of any category below, please contact your broker and/or legal advisor before completing this certificate.
In connection with the purchase of Securities of the Company (“Purchased Securities”) by the undersigned, as an integral part of the accompanying Subscription Agreement, the undersigned hereby represents and warrants to the Company that, satisfies one or more of the following categories of Accredited Investor:
| 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 | ||
| 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 | ||
| 3. _______ | A broker or dealer registered pursuant to Section 15 of the United States Securities Exchange Act of 1934; or | ||
| 4 ._______ | An insurance company as defined in Section 2(a)(13) of the U.S. Securities Act; or | ||
| 5. _______ | An investment company registered under the United States Investment Company Act of 1940; or | ||
| 6. _______ | A business development company as defined in Section 2(a)(48) of the United States Investment Company Act of 1940; or | ||
| 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 | ||
| 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 US$5,000,000; or |
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| 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 US$5,000,000 or, if a self-directed plan, with investment decisions made solely by persons who are Accredited Investors; or | ||
| 10. _______ | A private business development company as defined in Section 202(a)(22) of the United States Investment Advisers Act of 1940; or | ||
| 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 US$5,000,000; or | ||
| 12. _______ | Any director or executive officer of the Corporation; or | ||
| 13. _______ | A natural person that has a net worth (or joint net worth together with his or her spouse) excluding the “net value” of his or her primary residence, in excess of US$1,000,000 and no reason to believe that net worth will not remain in excess of US$1,000,000 for the foreseeable future. “Net value” for such purposes is the fair value of the residence less any mortgage indebtedness or other obligation secured by the residence, provided that any amount of the secured obligation in excess of the value of the residence is considered a liability and must be deducted from the investor’s net worth; | ||
| 14. _______ | A natural person who had an individual income in excess of US$200,000 in each of the two most recent years or joint income with that person’s spouse in excess of US$300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year; or | ||
| 15. _______ | A trust, with total assets in excess of US$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 | ||
| 16. _______ | Any entity in which all of the equity owners meet the requirements of at least one of the above categories. |
Terms used herein but not otherwise defined have the meaning ascribed hereto in the accompanying Subscription Agreement.
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| Dated: | Signed: | |||
| Print the Name of Subscriber | ||||
| Print Name and Title of Authorized Signing Officer | ||||
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