This Subscription Agreement and Investment Representation Questionnaire (the “Subscription Agreement”), is made by and between web3 Holdings, Inc., a Florida corporation, (the “Company”) and the undersigned person (the “Subscriber”).
The Company desires to obtain for itself in the amount of up to a maximum of $500,000 by selling up to a maximum of 500,000 shares of Class A common stock, at $1.00 per-share (par-value $0.0001 per-share), (the “Shares”), privately to accredited investors only pursuant to the terms and conditions set forth in this Offering Memorandum dated January 1, 2023 (the “Memorandum”), a copy of which the Subscriber acknowledges that the Subscriber has received and carefully reviewed. As used in this Subscription Agreement, the capitalized terms shall have the same meanings as they have in the Memorandum. Subject to the terms and conditions hereinafter set forth, the Subscriber hereby subscribes for and agrees to purchase the Shares.
In consideration of the Company’s agreement to sell Shares to the Subscriber, and the Subscriber’s agreement to purchase the Shares from the Company upon the terms and conditions set forth herein, the Subscriber hereby agrees and represents as follows:
- The Subscriber hereby acknowledges receipt of a copy of the Memorandum. The Subscriber understands, acknowledges and agrees that this Subscription Agreement does not constitute an offer by the Company to sell the Shares to the Subscriber, but rather constitutes an irrevocable offer by the Subscriber to purchase the Shares. The Subscriber hereby subscribes to invest in the Company and to acquire Shares in the amount set forth on the signature page of this Subscription Agreement. The Company reserves the right, in its discretion, to accept or reject the Subscriber’s offer, in whole or in part. The Subscriber understands that if the Subscriber’s offer to purchase Shares is accepted, the Company will return to Subscriber a copy of the signature page of this Subscription Agreement with the acceptance form filled out below, along with appropriate certificates. If the offer of the Subscriber is not accepted for any reason whatsoever, the Subscriber’s payment for the Shares tendered with the offer from the Subscriber shall be promptly returned to the Subscriber, and this Subscription Agreement shall be rendered null and void and of no further force or effect.
- The Subscriber acknowledges that the Subscriber (i) must be an “accredited investor”, as defined by Rule 501 promulgated under the Securities Act of 1933, as amended (the “Act”), to qualify for this investment; (ii) is competent to understand and does understand the nature of the investment; and (iii) must be able to bear the economic risk of this investment.
- The Subscriber represents that the Subscriber has significant prior investment experience or has employed the services of an investment advisor, attorney or accountant to evaluate the merits and risks of such an investment on the Subscriber’s behalf; and that the Subscriber recognizes the highly speculative nature of this investment and is able to bear the economic risk the Subscriber hereby assumes.
- The Subscriber acknowledges that this offering has not been reviewed by the Securities and Exchange Commission (“Commission”) because of the Company’s representations that this is intended to be a non-public offering pursuant to Section 4(a)(2) of the Act and Rule 506(b) of Regulation D promulgated under the Act. The Subscriber represents that the Shares are being purchased for the Subscriber’s own account, for investment and not for distribution or resale to others.
- The Subscriber agrees that the Subscriber will not sell, transfer, pledge, offer for sale or otherwise transfer any of the Shares in the absence of an effective registration statement relating thereto under the Act and such Shares are registered or qualified under applicable state “blue sky” laws (collectively, the “Securities Laws”) or evidence that such registration and/or qualification under the Securities Laws is not required in connection with such transfer, including, at the Company’s option, an opinion of counsel satisfactory to the Company to that effect. The Subscriber agrees to hold the Company and its directors, officers and controlling persons and their respective heirs, representatives, successors and assigns harmless and to indemnify them against all liabilities, costs and expenses incurred by them as a result of any sale or distribution by the Subscriber in violation of any Securities Laws.
- The Subscriber consents to the placement of a legend on the Shares when issued to Subscriber in connection with the offering stating that they have not been registered under the Act and setting forth or referring to the restrictions of transferability and sale thereof. The Subscriber is aware that the Company will make a notation in its appropriate records with respect to the restrictions on the transferability of such Shares.
- The Subscriber acknowledges and agrees that the Company is relying on the Subscriber’s representations contained in this Subscription Agreement and the related subscription documents in determining whether to accept this subscription. The Subscriber hereby gives the Company authority to review the financial standing of the Subscriber, and it is further agreed that the Company reserves the unrestricted right to reject or limit any subscription and to close the offer at any time.
- The Subscriber is aware that there is presently no market for the resale of any of the Shares and that no market may exist in the future for such resale.
- The Company has entered into separate but substantially identical subscription agreements (the “Other Subscription Agreements”) with other purchasers (the “Other Purchasers”), providing for the sale to the Other Purchasers of Shares pursuant to the offering described in the Memorandum. This Subscription Agreement and the Other Subscription Agreements are separate agreements, and the acceptance by the Company of this Subscription Agreement is not conditioned upon the Company accepting or rejecting any of the Other Subscription Agreements.
- The offering of the Shares is being made by the Company on a “best efforts” basis with respect to the sale of the Shares. There is no minimum amount that must be raised before funds are available to the Company. If the offering is oversubscribed, the Company may allocate Shares among all prospective investors, as it deems appropriate, in its sole discretion. No subscription will be accepted until the Company has received a fully executed Subscription Agreement and any other documents that may be required by the Company.
- The offering is scheduled to terminate at 5:00 PM EST, on December 31, 2023, unless extended for ninety (90) day intervals thereafter by the Company (the “Termination Date”). Closings will be held as the Company deems necessary until the earlier of (i) acceptance of subscriptions for the entire offering, or (ii) the Termination Date. If the Subscriber’s subscription is not accepted, the Subscriber’s subscription funds will be returned to the Subscriber without interest or deduction therefrom.
REPRESENTATIONS AND WARRANTIES
The Subscriber hereby represents and warrants to the Company, the Company’s officers, the Company’s directors and the Company’s counsel that:
- The Subscriber understands that no federal or state agency has passed upon the merits or risks of an investment in the Shares or made any finding or determination concerning the fairness or advisability of this investment.
- The Subscriber is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D under the Act. The Subscriber is acquiring the Shares for investment for the Subscriber’s own account and not with a view to distribution or resale.
- The Subscriber has all requisite authority to enter into this Subscription Agreement and to perform all the obligations required to be performed by the Subscriber hereunder. The Subscriber has the financial ability and an adequate net worth and means of providing for the Subscriber’s current needs and possible personal contingencies to sustain a complete loss of the Subscriber’s investment in the Company, and the Subscriber has no need for liquidity in this investment.
- The Subscriber’s overall commitment to investments which are not readily marketable is not disproportionate to the Subscriber’s net worth, and the Subscriber’s investment in the Company will not cause such overall commitment to become excessive.
- The Subscriber has evaluated and understands the high risks and terms of investing in the Company. The Subscriber possesses experience and sophistication as an investor, which are adequate for the evaluation of the merits and risks associated with the Company.
- Prior to subscribing for Shares, the Subscriber has made an independent investigation of the offering of the Shares and the Company and its proposed business. The Subscriber has received from the Company all documents that the Subscriber has requested from the Company relating to an investment in the Company and the Shares and has received from the Company answers to all of the Subscriber’s questions concerning an investment in the Company and the Shares. In evaluating an investment in the Company and acquiring the Shares subscribed for herein, the Subscriber has not been furnished with or relied upon any representations or other information (whether oral or written) other than as set forth in the Memorandum or as contained in any documents or written answers to questions furnished to the Subscriber by the Company.
- The Subscriber understands that the estimates and projections contained in the Memorandum, by their nature, involve significant elements of subjective judgment and analysis that may or may not be correct; that there can be no assurance that such projections or goals will be obtained; and that the projections and estimates contained in the Memorandum should not be relied upon as a promise or representation of the future performance of the Company.
- The Subscriber understands that the Shares will be “restricted securities” under applicable federal securities laws and that the Act and the rules of the Commission provide in substance that the Subscriber may dispose of the Shares only pursuant to an effective registration statement under the Act or pursuant to an exemption from registration under the Act.
- If this Subscription Agreement is executed and delivered on behalf of a partnership, corporation, trust or other entity, the undersigned is duly authorized to execute and deliver this Subscription Agreement and the signature of the undersigned on this Subscription Agreement is binding upon such partnership, corporation, trust or other entity.
- The Subscriber, (i) if an individual, is a bona-fide resident of the state set forth in the Subscriber’s residence address below or (ii) if a corporation, trust, partnership or other entity, has its principal place of business in the state set forth in the Subscriber’s address below.
- The Subscriber is directed to review the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) website at www.treas.gov before making the following representations. The Subscriber represents that the amounts contributed by the Subscriber to the Company were not and are not directly or indirectly derived from activities that may contravene federal, state or international laws and regulations, including anti-money laundering laws and regulations. Federal regulations and executive orders administered by OFAC prohibit, among other things, the engagement in transactions with, and the provision of services to, certain foreign countries, territories, entities and individuals. The lists of OFAC prohibited countries, territories, persons and entities can be found at the OFAC website. In addition, the programs administered by OFAC prohibit dealing with individuals or entities in certain countries regardless of whether such individuals or entities appear on the OFAC lists. The Subscriber hereby represents that none of the following is named on the OFAC list, nor is a person or entity prohibited under the OFAC programs: (i) the Subscriber, (ii) any person controlling or controlled by the Subscriber, (iii) if the Subscriber is an entity, any person having a beneficial interest in the Subscriber, or (iv) any person for whom the Subscriber is acting as agent or nominee in connection with this investment. The Subscriber is advised that, by law, the Company may be required to disclose the identity of the investor to OFAC.
- The Subscriber warrants and represents that all representations made by the Subscriber hereunder are true and correct in all material respects as of the date of execution hereof. Unless Subscriber notifies the Company in writing to the contrary at or before the date the Company accepts the subscription, each of Subscriber’s representations and warranties contained in this Subscription Agreement will be deemed to have been reaffirmed and confirmed as of the date the subscription is accepted by the Company.
- The Subscriber understands that the foregoing representations, warranties, agreements, undertakings and acknowledgments are made by the Subscriber with the intent that they be relied upon in determining the Subscriber’s suitability as a purchaser of Shares. In addition, the Subscriber agrees to immediately notify the Company, in writing, of any change in any representation, warranty or other information that relates to the Subscriber.
- If more than one person is signing this Subscription Agreement, each representation, warranty and undertaking herein shall be a joint and several representation, warranty and undertaking of each such person. If the Subscriber is a partnership, corporation, trust or other entity, the Subscriber further represents and warrants that (i) the Subscriber has enclosed with this Subscription Agreement copies of its constituent documents evidencing its formation and current existence and appropriate evidence of the authority of the individual executing this Subscription Agreement to act on behalf of the Subscriber, and (ii) the Subscriber was not specifically formed to acquire the Shares subscribed for herein.
- All pronouns contained herein and any variations thereof shall be deemed to refer to the masculine, feminine or neuter, singular or plural, as the identity of the parties thereto may require.
- This Subscription Agreement shall be irrevocable, unless otherwise required by law. This Subscription Agreement and the Subscriber’s investment shall be governed by and construed in accordance with the laws of the State of Florida.
- This Subscription Agreement may not be assigned by the Subscriber and any attempt by the Subscriber to assign this Subscription Agreement shall nullify and void this Subscription Agreement. Subject to the preceding sentence, this Subscription Agreement shall be binding upon and inure to the benefit of the heirs, executors, administrators, legal representatives, successors and permitted assigns of the Subscriber.
- This Subscription Agreement may be executed in any number of counterparts, each of which, when so executed and delivered will be deemed to be an original and all of which together will be deemed to be one and the same Subscription Agreement. In the event that any signature is delivered by facsimile transmission, PDF, electronic signature or other similar electronic means, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such signature page were an original thereof.