Terms of Issue

    General Information Agatobwe Token Bond (ATT)

    Issuer
    Agatobwe Hydro Power Ltd. (AHPL), Kigali, Nyarugenge, Umujyi wa Kigali, Rwanda, with registration number 106851732 (“Issuer”)
    Statutory set
    Kigali, Rwanda
    Purpose of the Issuer
    Issuer to repay intra-group debt, to finance the construction of other hydropower facilities in the area
    Issued instrument
    Discounted bond issue (zero bond issue) with registered bonds (Obligationen) of $ 5,466,356 total face value
    Initial Nominal Value
    USD 3,000,000
    Interest rate
    As outlined in section 3.2 below
    Initial Issue Date, Subscription Period
    Bonds will be available for subscription as of 30.09.2022 ("Initial Issue Date") and may be subscribed throughout 1 year following the Initial Issue Date ("Subscription Period").
    Term
    15 years following the Initial Issue Date.
    Form
    Ledger-based securities in accordance with art. 973d et seq. of the Swiss Code of Obligations ("CO").
    Additional Sources of Information
    https://www.agatobwe.eco (the “Microsite”)
    Current Nominal Value
    See the Microsite
    Number of Bonds in Circulation
    See the Microsite

    Scope

    Based on a resolution (“Circular resolution of the board of directors”) signed on 19.09.2022 of the board of directors of the Issuer, the Issuer issues bonds (each a “Bond” and together the “Issue”) in accordance with title thirty-four of the Swiss Code of Obligations, as well as with the terms set out in these Terms and section 3 Issuance of Bonds as Token Bonds in particular.

    The proceeds of the Issue will be used by the Issuer to repay intra-group senior debt, to finance the construction of other hydropower facilities (reference is made to 10 General Informationfor further details on the Issuer and the purpose of the Issue).

    In accordance with the registration agreement (“Registration Agreement”) published separately to these Terms on the Microsite, the Bonds are issued as ledger-based securities within the meaning of article 973d CO. These terms of issue (“Terms”) set out the terms of the Issue, whereas the Registration Agreement sets out the terms related to the Bonds’ legal form as ledger-based securities, or “Token Bonds”.

    These Terms may be updated by the Issuer from time to time to reflect

    1. the latest legal and technical developments, and
    2. formal, minor, or technical amendments correcting a manifest error and not materially impairing the interests of the Bond holders (each a “Creditor”).

    Such updates and amendments bind the Creditors as per their publication. The Issuer makes the currently applicable version of these Terms available on the Microsite.

    These Terms do not constitute, and shall not be understood as, an offer or invitation for the acquisition of Bonds.

    Issuance of Bonds as Token Bonds

    Nominal Value, Denomination

    The Issuer issues discounted bonds with an initial total nominal value of USD 3,000,000 (the “Issue”) and a face value of USD 5,466,356.

    Interest Rate

    The Bonds do not bear interest. Rather, the Issuer shall repay the remainder of the Issue at face value at theEnd of Term (see section 3.5 Term and Repayment below) via the Microsite.

    As outlined in 3.4 Secondary Market, the bonds trade in the secondary market at the market determined value. In addition, the Issuer will use annual proceeds from operations to repurchase Bonds in the secondary market to maintain a fair market price development until the end of the Term.

    Issuance

    During the Subscription Period, the Bonds are available for subscription on the Microsite. Each Bond unit price is fixed to 1 USDC, a stable coin issued by Circle , throughout the Subscription Period.

    The Issuer may suspend or terminate the Subscription Period any time and without prior notice (e.g., if Bonds are sold out prior to the duration of the Subscription Period). Upon the suspension or termination of the Subscription Period, the Issuer shall inform Creditors as soon as reasonably possible and in accordance with section 3.10 (Notices) below.

    Secondary Market

    Upon termination of the Subscription Period, the Issuer will set up a liquidity pool on Uniswap , a decentralized exchange (“DEX”) [1]. committing to provide liquidity in the form of USDC with total worth of equivalent to 10% of the proceeds from the Issuance which is used to facilitate peer-to-peer trading.

    Creditors may also become liquidity providers. By doing so, they earn fees as other Creditors make use of the liquidity pools to facilitate swaps between Bond Tokens and other crypto currencies. [2]

    Term and Repayment

    The Issue has a fixed term of 15 years (“Term”). The Issuer shall repay the Issue without prior request for payment on the 30.09.2037 (“End of Term”) at face value (see section 3.6 below).

    The Issuer may at any time acquire any number of Bonds in the secondary market for own investment or repayment purposes, in which case the Issuer shall update the Current Total Nominal Value on the Microsite within reasonable time.

    The Issuer commits to reserve 4.0%, each year, of the initial nominal value of total issued Bonds to repurchase Bonds in the secondary market.

    Payments, Limitation

    The Issuer shall reimburse Creditors the face value at the End of Term via the Microsite, whereby Issuer transfers USDC to the Creditors registered wallet address.

    Claims for repayment of the face value expire 10 (ten) years after the End of Term.

    Status

    The Bonds and interest payments are direct, unsecured, unconditional and unsubordinated obligations of the Issuer with seniority over all other current and future unsecured and unsubordinated liabilities of the Issuer.

    Security

    No special security is provided in favor of this Issue. As long as the Issue and interest payments are outstanding, i.e., until the date on which par value and interest is repaid to Creditors (as defined below) entirely in accordance with sections 3.3 and 3.6 above (“Full Repayment”), the Issuer undertakes not to provide any other bonds, bills, cash bills, debentures or similar debt obligations with special security without providing this Issue with the same or equivalent security.

    Prior to Full Repayment, the Issuer shall not create or have outstanding any mortgages, liens, rights of retention or other forms of encumbrance against all or any part of any present or future assets or revenues to secure any Relevant Obligation or to secure any guarantee or indemnity given in respect of any Relevant Obligation without providing the Issue with equal or equivalent security (subject to the provision of Permissible Collateral, as defined below).

    Prior to Full Repayment, the Issuer will exercise its influence over its subsidiaries (if any) to ensure that they do not create or have outstanding any mortgages, liens, rights of retention or other forms of encumbrance against all or any part of any present or future assets or revenues to secure any Relevant Obligation or to secure any guarantee or indemnity given in respect of any Relevant Obligation without providing the Issue with the same or equivalent security. The granting of Permissible Collateral is reserved.

    In these Terms, “Relevant Obligation” means any present or future obligation of the Issuer and its subsidiaries (if any), including purchase commitments, sureties and guarantees. This shall also apply if such obligation is secured or evidenced by notes, bonds, debentures, debenture stock or other securities which are currently or may in the future be admitted to trading or listed on a stock exchange, traded over-the-counter or on other securities markets.

    In these Terms, “Permitted Collateral” means collateral (existing or to be created) in the form of a mortgage, pledge or other form of charge or security interest to secure Relevant Obligations (and, as the case may be, other indebtedness or obligations) provided that the Relevant Obligations secured by the Permitted Collateral do not exceed 70% of the fair market value of the investment properties and development properties of the Issuer or its subsidiaries, according to the most recently published annual or semi-annual financial statements of the Issuer.

    No Transfer

    The Issuer may not transfer any obligations under or in connection with this Bond to any Subsidiary or to any other third party.

    Notices

    All notices relating to this Issue will be published by the Issuer in a timely manner on the Microsite.

    Creditor Registration

    In accordance with the Registration Agreement, the Issuer keeps an off-chain register (the “Bond Register”). Only persons registered in the Bond Register are entitled to the rights as a Creditor. Until registration, all rights remain with the previously registered Creditor.

    Reference is made to the Registration Agreement for the terms governing Creditor registration in the Bond Register.

    Exclusion of Representations / Liability

    To the extent permitted by law, all representations and warranties with regard to the Bonds and any liability by the Issuer or any person acting on behalf of the Issuer with regard thereto are herewith excluded. The Creditor herewith waives any and all claims related to misrepresentations or breaches of warranties it may have under the applicable law.

    Taxes

    The Creditor bears the sole responsibility to determine if its purchase of the Bonds, the potential appreciation or depreciation in the Bonds over time, the sale and purchase of Bonds and/or any other action or transaction related to the Bonds has tax implications for the Creditor. The Issuer shall make all payments to the Creditors after deducting applicable withholding taxes.

    General Provisions

    Severability / Good Faith

    Should any part or provision of these Terms be held to be invalid by any competent court, governmental or administrative authority having jurisdiction, the other provisions of these Terms shall nonetheless remain valid. In this case, the Issuer shall dictate a substitute provision that best reflects the economic intentions without being unenforceable and shall execute all agreements and documents required in this connection. The same shall apply if and to the extent that these Terms is found to contain any gaps or omissions.

    Governing Law and Jurisdiction

    These Terms, as well as the Issue as a whole and the Bonds in particular, shall be governed by and construed in accordance with the substantive laws of Switzerland. All disputes arising out of or in connection with these Terms, including disputes on its conclusion, binding effect, amendment and termination, as well as with the Issue or a Bond, shall be resolved by the ordinary courts of Zug, Switzerland.

    Loss of Tokens

    General Risks

    Purchasing Bonds may offer an opportunity for capital gains but also entail a high degree of business and financial risks, including the possibility of a complete loss of the investment. This document does not represent any solicitation for the purchase or sale of Bonds. Instead, each purchaser is requested to engage in his own independent research and make his own decisions with respect to the purchase of Bonds. It is assumed that prospective Creditors, to the extent necessary, consult a lawyer, accountant, and/or tax professional to evaluate the risks entailed.

    The risks described herein are not the only risks that come into question and are by no means intended to represent a comprehensive list. Potential purchasers should be aware that buying Bonds may also be exposed to other risks of another nature. The order in which the individual risks were chosen to be presented does not provide any indication of the probability of occurrence or the seriousness or importance of the individual risks or their impact in the event that they occur. Additional risks that are not business-specific and that are not yet currently known to the Issuer or that the Issuer does not currently deem to be relevant may likewise have an impact. 

    Prospective Creditors should ensure that they fully understand the nature of the Bonds and the extent of their exposure to risks and they should consider the suitability of the Bonds as an investment in the light of their own circumstances and financial condition. 

    The Bonds involve a high degree of risk, including the potential risk of expiring worthless. Potential buyers should be prepared in certain circumstances to sustain a total loss of the capital invested to purchase the Bonds.

    Regulatory Risks

    The blockchain technology allows new forms of interaction and it is possible that certain jurisdictions will apply existing regulations on or introduce new regulations addressing blockchain technology-based applications which may be contrary to the current setup of the Token Bonds. This may, inter alia, result in substantial modifications of the Token Bonds including their loss.

    Operational and IT Risks

    The smart-contract concept on which the Token Bonds are built and the blockchain technology in general are still in an early development stage and unproven, therefore there is no warranty that the process of creating, receiving, holding, using and storing Token Bonds will be uninterrupted or error-free and there is an inherent risk that the software could contain weaknesses, vulnerabilities or bugs causing, inter alia, the complete loss of Token Bonds. Furthermore, it is possible that there may take place hacking attacks and other unexpected activities which could result in the theft or loss of Token Bonds. Moreover, the underlying protocol may be subject to future changes and unforeseen problems which can affect the proper functioning of the smart-contract and cannot be influenced by the Issuer.

    In particular, blockchains are susceptible to mining attacks, including but not limited to doublespend attacks, majority mining power attacks, “selfish-mining” attacks, timestamp manipulation, and race condition attacks. Any successful attacks present a risk to the Token Bonds, expected proper execution and sequencing of transactions in Token Bonds, and expected proper execution and sequencing of contract computations and may result in the loss of Token Bonds.

    In some applications, it may be desirable to use a smart contract to autonomously manage Token Bonds. Depending on the precise implementation, this could lead to a situation where a malicious claim on the Token Bonds held by the contract address cannot be cleared by the rightful owner. The Issuer cannot be held liable for loss of tokens resulting from incompatible implementation of third-party smart contracts.

    Loss of Keys

    Token Bonds may be lost or become inaccessible in particular if the holder of Token Bonds loses the respective private key to their Token Bonds or due to malfunctioning or incompatibilities of the wallet in which the Token Bonds are stored. This could also lead to the loss of the Token Bonds. Moreover, it is the responsibility of the Creditor not to lose the key or password that allows access to the wallet.

    Restrictions

    The Issue has not been registered and will not be registered under the U.S. Securities Act of 1993 and may not be offered or sold to residents of the United States of America.

    The Issue is offered only to persons (aged 18 years or older) or entities who are not residents of, citizens of, are incorporated in, or have a registered office in any “Restricted Territory.”

    The term Restricted Territory includes the United States of America (including its territories) or any jurisdictions in which the sale of cryptocurrencies are prohibited, restricted or unauthorized in any form or manner whether in full or in part under the laws, regulatory requirements or rules in such jurisdiction; or any state, country, or region that is subject to sanctions enforced by the United States, such as the Specially Designed Nationals and Blocked Persons List (“SDN List”) and Consolidated Sanctions List (“Non-SDN Lists”), the United Kingdom, or the European Union.

    Third-party solution providers are responsible for conducting AML screening of the ultimate beneficial owner(s) and/or controlling person(s) results in an exact match with a sanctions list, watchlist, or PEP list. They are also responsible for wallet screening of the wallet address is associated with sanctions activity above our internally defined threshold. The Issuer bears no legal obligation nor responsibility for conducting such restrictions.

    This document does not constitute a prospectus within the meaning of the Swiss Financial Services Act or EU Regulation 2017/1129 (as amended from time to time). Any decision to acquire Bonds from the Issuer shall be based exclusively on the acquirer’s own assessment and interpretation of the information available. The acquirer is solely responsible for such decisions.

    Additional Information

    To avoid all doubts regarding the applicability of the Swiss Banking Act, the following information will be publicly available at all times during the offering of the Bonds:

    1. Name, statutory seat, and purpose of the Issuer.
    2. Implied Interest rate, issue price, subscription period, term, and repayment conditions.
    3. Audited financial report (and published annually) of the issuer on the Microsite.

    Solicitation

    In connection with the prospective interest in the Issue, it is acknowledged and confirmed that the following is true: with respect to solicitation, the Creditor has approached the Issuer on its own initiative. The Creditor interest in the Issuance did not come about as a result of any direct or indirect contact, intervention, marketing, offering or placement efforts by or on behalf of the Issuer.

    Registration & Resolution Agreement