Exhibit 10.4
AMA Delivery No: 01
MOT Control No: MOT 530362-102 LBTG
USA Control No: USA 530362-102 LBTG
AMA Control No: AMA 530362-102 LBTG
ACCOUNT MANAGEMENT AGREEMENT
For Management of the Unit Subscription Agreements
USA 530362-102 LBTG No's: 01-11
Date: August 17, 2012
Between:
Liberty Coal Energy
00 00xx Xxxxxx, Xxxxx 0000, Xxxxxx XX
Xxxxxx, Xxxxxxxx 00000
0-000-000-0000
A Company
xxxx://xxx.xxxxxxxxxxx.xxx/
And:
Those Investors Individually Signed in the Investors Blocks of the
Unit Subscription Agreements
(the "Investor(s)")
And Managed By:
Elco Securities, Ltd. ("Intermediary")
Loyalist Plaza, Xxx Xxxxxx Blvd.
P.O. Box AB-20377
Xxxxx Harbor
Abaco, Bahamas
INTRODUCTION.
This agreement will serve as the Account Control Agreement between the
Investor(s), and Liberty Coal Energy (the "Company"). This Agreement to be held
and managed by Elco Securities, Ltd. (the "Intermediary").
RECITALS.
WHEREAS: Investor(s) have separately and individually agreed to purchase
securities from the Company and the Company has agreed to sell said Securities
to Investor(s) under separate Unit Subscription Agreement(s) a copy of which is
attached hereto in Exhibit B.
WHEREAS: The Investor(s) wish to monitor and enforce the Use of Proceeds to
ensure that it meets the projected Use of Proceeds agreed to in the Memorandum
of Terms (the "MOT").
WHEREAS: The Investor(s) have taken substantial risk in assigning an advanced
valuation to the shares of this offering based on the Company's projections and
assertions of success. To provide for monitoring the success of these
projections and assertions, a detailed Use Of Proceeds with Capital
Breakout/Workouts according to those same projections was developed and agreed
to in the MOT. In order to administer such Breakout/Workout schedule and monitor
the Use of Proceeds, a third party must be engaged to manage and monitor the
Agreements and distributions.
WHEREAS: Elco Securities, Ltd. (the Intermediary"), a registered Investment Bank
in The Commonwealth of the Bahamas has agreed to act as Intermediary in the
Offering and to provide account management services for the Parties.
WHEREAS: Having signed the Unit Subscription Agreement, the Company and
Investor(s) have each individually agreed to consent to this separate Account
Management Agreement to enact certain controls over the monitoring and
management of the investments and Use of Proceeds, which controls, the
Intermediary shall manage and monitor.
THEREFORE: This Account Management Agreement (the "AMA") between the parties to
provide Use of Proceeds (UOP) direction and confirmation, invested capital
security, capital flow management, share distribution management and terms
management.
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ARTICLE I.
DEFINITIONS & CONSTRUCTION.
1.1 Definitions
"AFFILIATE" means, with respect to a Person, a Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, the first Person. For the purposes of this
definition, "control" means, when used with respect to any Person, the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract, or otherwise, and the terms
"controlling" and "controlled" have correlative meanings.
"ASSETS" means:
(a) All of the Company's ownership interests in the Cash Account; and
(b) All of the Company's interest in the Business, including: easements, rights
of way and other matters related thereto or necessary for the operation thereof;
and
(c) All of the Company's interest in any and all of the real property forming a
part of or in any way associated with the Business together with all buildings,
other constructions and component parts thereof; and
(d) All of the Company's interest in all licenses and similar instruments owned
by the Company; and
(e) All contracts and agreements of the Company; and
(f) All of the Company's interest in any and all equipment, personal property,
fixtures and other improvements; and
(g) All vehicles, motorized equipment, trailers, tractors, dozers and other
similar items used in the operation of the Business; and
(h) All permits and licenses; and
(i) The Working Capital of the business, including all Inventory.
"BREAKOUT" means that transfer of cash from the Cash Account with the
Intermediary to the Working Account while simultaneously uncovering that portion
of Ordinary Shares previously purchased by the Investor(s). Breakout/Workouts
are delivered once Market and Company milestones are reached as described in the
MOT Sections II and III. Breakouts are automatically divided into 30 day
"Workout" periods.
"BUSINESS" shall mean the commercial activities conducted by the Company
utilizing any of the Assets.
"BUSINESS DAY" means a day, not being a Saturday or Sunday, on which banks are
open for business in the Bahamas.
"BUSINESS MILESTONES" means those items called for in the MOT Section II.11 and
which includes any reporting and publicly traded status as called for in the
MOT.
"CASH ACCOUNT" means the Capital Account formed in the name of Company at Elco
Securities, Ltd. to manage the funds disbursal.
"CERTIFICATE" means those official instruments representing the Common or
Ordinary shares and Warrants to purchase Common or Ordinary shares of the
Company sold to the Investor(s). Such certificates will be delivered to the
Intermediary in the names of the individual investors.
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"CLOSING" means that time when cash has been delivered by the Investor(s) to the
Company's account with Intermediary, Company's share certificates have been
delivered to Intermediary's care and credited to the Investor(s) accounts.
Closing is to be determined as the closing date of the purchase agreement
between the Investor(s) and the Company. Immediately following Closing, this
Account Management Agreement will be enacted by Intermediary and all further
instructions will be provided according to this agreement.
"COMPLIANCE CHECK" means that study by Intermediary to ensure that all proper
documents have been executed, all accounts are opened properly and all actions
conform to local law and the agreements contemplated herein.
"CUSTOMER AGREEMENT" means the agreement entered into on or around the date of
this Agreement between Company and the Intermediary to open the Cash Account.
"DEAL" MEANS to sell, dispose of, gift, transfer, assign, mortgage, hold in
trust, or otherwise deal with. Does not include the deposit of such securities
from certificated form to electronic form or vice a versa.
"FEES" are those fees to be paid pursuant to Article VI.
"GAAP" means U.S. generally accepted accounting principles consistently applied
by a specified Person, as in effect on the date hereof.
"INTERMEDIARY" means the party who will hold all agreements, cash and securities
which is/are part of this agreement. The Intermediary for this transaction is to
be Elco Securities Ltd. of Abaco, Bahamas.
"INVESTOR(S)" means the parties which are purchasing (Pre-Close) or have
purchased (Post Close) the Company's securities. Herein to be those entities
listed in Appendix C.
"PERSON" means an individual, partnership, limited liability company,
corporation, joint stock company, trust, estate, joint venture, association or
unincorporated organization, or any other form of business or professional
entity.
"SECURITIES" are those instruments of certificated and un-certificated Stock and
Warrants evidencing the Investor(s) ownership in Company.
"SECURITIES ACCOUNT" are those accounts in the names of the Investor(s) which
the uncovered un-certificated (Electronic) Shares are held and/or sold or
disbursed (the "Securities Account").
"MEMORANDUM OF TERMS" means the Final Terms between the Company and the
Investor(s) and referred to within this Document as the "MOT". The MOT number
for tracking is MOT 530362-102 LBTG issued on
"UN-CERTIFICATED" means Securities of Company owned by the Investor(s) which is
held in street (electronic) form by and/or in the name of the Intermediary at
its/their designated custodian.
"UNDERTAKING" is that Authorization from the Company with appropriate
resolutions and legal opinions to prove the corporate action is taken in proper
compliance and that it is a legal binding obligation of the Company. A form of
the Corporate Undertaking is to be located in Exhibit H.
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"UNIT SUBSCRIPTION AGREEMENT" is that subscription identifying the portion of
the Unit Offering to be purchased by the Investor(s) and numbered separately for
each investor and referred to in this document as the "USA". The USA number for
tracking is USA 530362-102 LBTG issued on
1.2 Construction.
In construing this Agreement, the following principles shall be followed:
(a) the terms "herein," "hereof," "hereby," and "hereunder," or other similar
terms refer to this Agreement as a whole and not only to the particular Article
or other subdivision in which any such terms may be employed;
(b) a reference to any Person shall include such Person's predecessors and
successors;
(c) all accounting terms not otherwise defined herein have the meanings assigned
to them in accordance with U.S. GAAP;
(d) no consideration shall be given to the captions of the articles, sections,
subsections, or clauses, which are inserted for convenience in locating the
provisions of this Agreement and not as an aid in its construction;
(e) examples shall not be construed to limit, expressly or by implication, the
matter they illustrate;
(f) the word "includes" and its syntactical variants mean "includes, but is not
limited to" and corresponding syntactical variant expressions;
(g) a defined term has its defined meaning throughout this Agreement, regardless
of whether it appears before or after the place in this Agreement where it is
defined;
(h) the plural shall be deemed to include the singular, and vice versa;
(i) each exhibit, attachment, and schedule to this Agreement is a part of this
Agreement, but if there is any conflict or inconsistency between the main body
of this Agreement and any exhibit, attachment, or schedule, the provisions of
the main body of this Agreement shall prevail; and
(j) a reference to the Company shall mean Liberty Coal Energy; and
(k) references to Article headings contained in this Agreement are inserted for
convenience of reference only and will not affect the meaning or interpretation
of this Agreement. All references to Articles contained herein mean Articles of
this Agreement unless otherwise stated; and
(l) references to Section or Sections contained in this Agreement are inserted
for convenience of reference only and will not affect the meaning or
interpretation of this Agreement. All references to Section or Sections
contained herein mean Sections of either the USA or MOT unless otherwise stated;
and
(m) for purposes of clarity, the term Article used alone to refer to a location
in a document shall, unless modified by the Title of a specific document which
is separate from this Agreement, be taken as identifying a location within this
Agreement.
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ARTICLE II.
INTERMEDIARY INSTRUCTIONS.
2.1. Account Formation
2.1.1. Account Opening
2.1.1.1. Company
Intermediary shall open and style a non-interest bearing account in the name of
the Company suitable for management of monies, (the "Cash Account"), from which,
invested monies will be held and eventually debited from by this Agreement. The
account will be opened following receipt of the Customer Agreement and proper
account opening documentation and ancillary supporting documentation necessary
to meet the Intermediaries Know Your Client (KYC) and Anti-Money Laundering
compliance. All such documentation according to Bahamian Banking regulations
shall be treated as Confidential communications between the Company and the
Intermediary. Such documentation must be accompanied by the initial opening fee
of $1,500.00.
2.1.1.2. Investor(s)
Intermediary shall have opened and styled account(s) in the name of the
Investor(s) suitable for the management of securities (the "Securities
Account(s)") in the name of the Investor(s) into which purchased Securities will
be deposited by the Intermediary pursuant to the Unit Subscription Agreement and
this Agreement. All such documentation according to Bahamian Banking regulations
shall be treated as Confidential communications between the Investor(s) and the
Intermediary.
2.1.2. Capital Delivery
2.1.2.1. Capital Undertaking(s)
Intermediary will be in receipt of capital "Undertaking(s)" from Investor(s). At
Closing, the Intermediary shall secure such monies for credit to the Cash
Account. No interest will be applied to monies managed by the Intermediary.
Intermediary shall not deal with such monies from Investor(s) in any way save
for those instructions within this Agreement. All such Undertakings according to
Bahamian Banking regulations shall be treated as a Confidential communication
between the Investor(s) and Intermediary.
2.1.2.2. Evidentiary Letter
Intermediary will issue a letter to Investor(s), Advisor and Company in evidence
that such monies are secured and Pre-Closing is awaiting deposit of Certificated
Securities.
2.1.3. Certificated Security Trust
2.1.3.1. Certificate Delivery
The Company shall deliver to the Intermediary prior to Closing start, in the
Investor(s) name(s) and in the denominations called for in Exhibit A, those
share certificates as listed in Exhibit A, evidencing the total purchase
according to the Unit Subscription Agreement. The Company must issue
certificates as listed in Exhibit A, or the Intermediary is instructed to send
back those certificates not according to the certificate schedule for
cancellation and reissuance prior to Closing.
2.1.3.2. Evidentiary Letter
Upon Receipt, the Intermediary shall verify that the certificates delivered by
the Company match in denomination and number as those certificates listed in
Exhibit A. Should the certificates not match, the Intermediary will return those
certificates which are out of sync with Exhibit A and will specify those
certificates in the Evidentiary Letter.
2.1.3.3. Certificate Reissuance
Should the Evidentiary letter call for it, the Company will cancel those
certificates issued in error and reissue the correct securities certificates.
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Such corrected certificates shall be delivered to the Intermediary as soon as
possible.
2.1.3.4. Secondary Evidentiary Letter
Upon receipt and verification of the corrected certificates, the Intermediary
shall start the process of Articles 2.1.3.1.through 2.1.3.3. anew, until all
certificates matching Exhibit A have been issued and delivered to the
Intermediary.
2.1.4. Closing Checklist
2.1.4.1 Closing Establishment
Following issuance of the Undertaking and Certificate Evidentiary Letters, the
Intermediary shall check to ensure that the proper documentation is in place and
all actions necessary to approve the close have been delivered before ordering
the close of this Agreement.
2.1.4.2. Deficiency
Should the Intermediary determine that a deficiency exists in the documentation
provided, the Intermediary shall issue a request immediately to the party
responsible for the documentation. The Intermediary shall await the delivery of
the required documentation before issuing any evidentiary letters.
2.1.4.3. Company Undertaking
The Company shall deliver a letter to the Intermediary (the Company
"Undertaking" to be lodged as Exhibit H) stating:
(a) That the Unit Subscription Agreement and this Account Management Agreement
are signed and uploaded to the Online Portal provided by the Advisor for this
transaction; and
(b) Confirming that, the Certificated Securities in the possession of the
Intermediary as detailed in Exhibit A, have been properly and validly issued
with a Legal Opinion stating as such to be included as Exhibit E, and
(c) Formally requesting that Intermediary close the transaction contemplated in
the Unit Subscription Agreement, and delivered with
(d) A legal opinion that the signing of the USA and AMA are binding obligations
of the Company and were entered into in accordance with Corporate Bylaws and
State and Federal regulations. Such Legal Opinion is to be included as Exhibit I
to this AMA.
2.1.4.4. Pre-Closing Checklist
(a) Investor(s) shall have delivered all Unit Subscription Agreement signatures
and their cash Undertakings to the Intermediary.
(b) Company shall have delivered all Unit Subscription Agreement signatures and
their cash Undertakings to the Intermediary.
(c) Investor(s) shall have delivered all Account Management Agreement signatures
to the Intermediary.
(d) Company shall have delivered all Account Management Agreement signatures to
the Intermediary.
(e) Investor(s) shall have delivered all required Undertakings in the proper
denomination(s) to the Intermediary.
(f) Company shall have delivered all required Undertakings to the Intermediary.
(g) Company shall have delivered all Securities Certificates in the required
denominations as detailed in Exhibit A to the Intermediary.
(h) Company shall have delivered all necessary legal opinions required by the
MOT, USA and this Agreement.
2.1.4.5. Evidentiary Letter
Upon verification and completion of its Compliance and Closing Checklists,
Intermediary will issue a letter to Investor(s), Advisor and Company evidencing
that the Certificated Securities have been received and start the 72 hour
closing window.
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2.1.5. Closing Window Compliance
During the Closing Window period (72 hours), the Intermediary will confirm the
following:
(a) Status of Parties
(b) Signature Authorization
(c) Signature Coverage
(d) Legal Opinion Issuance
(e) Corporate Resolution Issuance
(f) Due Diligence List Completion
(g) Conflicts Check
(h) Closing Milestone Accomplishments from the MOT Section II.11
(i) Certificate Verification
(j) Money Laundering Compliance
2.1.6. Closing
Closing shall take place as follows:
2.1.6.1. Capital and Securities Transfer
Intermediary shall credit monies from Investor(s) to Cash Account, and
Certificated Securities from Company to Investor(s) Accounts.
2.1.6.2. AMA Assumption
Intermediary will immediately operate those accounts under this Agreement.
2.1.6.3. Closing Fees
No Fees will be paid at Closing to any party including the Intermediary. All
Account, Annual and Monthly fees shall be paid out of the Breakout/Workouts
according to the schedule in the MOT Section II.4 and Section III.
2.1.7. Reversing Transactions
Intermediary shall not from the time of closing forward, entertain requests from
Company or Investor(s) individually to "Reverse" the transactions by returning
or exchanging monies for purchased securities. Intermediary shall only entertain
formally submitted Breakup Agreements as per Article 2.7.
2.1.8. Evidenced Transaction Documents
2.1.8.1. Closing Notice
Intermediary shall provide a letter to Advisor, Company and Investor(s) by the
end of the same Business Day as Closing, evidencing the closing of the
transaction and stating the amount of capital credited to the Company's Account.
2.1.8.2. Agreement Dominance Letter
Intermediary shall state in the letter that this Account Management Agreement is
in full force and effect.
2.1.9. Post Closing Conversion
2.1.9.1. Certificated Share Status
Post Closing, Intermediary will be in possession of restricted Common Share
Certificates for each Investor(s)'s Breakout/Workout Portion.
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2.1.9.2. Preferred Conversion
(Intentionally Omitted)
2.1.9.3. Company Conversion
(Intentionally Omitted)
2.1.9.3. Securities Management
Intermediary shall hold said Common Shares in its name in its trust account on
behalf of the Investor(s) until they are uncovered due to satisfaction of a
Breakout/Workout. Once uncovered, the Intermediary is instructed to deliver to
the appropriate Investor(s) their portion of the Common Shares held in trust for
that Breakout/Workout. Such delivery will allow the Investor(s) to transfer,
sell or pledge such securities as they deem necessary. Nothing in this Agreement
is meant to act as a control over the Investor(s) right to deal with those
securities. Nothing in this Agreement signifies that the Investor(s) are acting
together in the sales of the shares. Intermediary may manage the securities in
any manner it deems necessary to fulfill this Agreement.
2.1.9.4. Registration or Opinion Letter
Intermediary shall await delivery of a Registration Statement or opinion letter
from the Company's attorneys providing the Intermediary and its Depository
evidence of the free trading status of the shares.
2.1.9.5. Electronic Deposit
Once the Intermediary has the Common Shares deposited with its Depository as
free trading shares, the Breakout/Workout Period(s) attached to those shares
will commence.
2.1.9.6. Breakout/Workout Start
Once those items called for in Articles 2.1.9.1 through 2.1.9.5 have been
accomplished, the Intermediary shall deliver a letter to the Company, the
Advisor and the Investor(s) stating that the Breakout/Workout periods have
started.
2.2 Breakout/Workouts
2.2.1. Breakout/Workout Period
Each Breakout/Workout shall encompass that period of time necessary to meet the
Market Metric Requirements as established in the MOT Section II.5.
2.2.1.1. Breakout/Workout Period
Each Breakout/Workout will be divided up into as many Workout Periods as is/are
necessary to fully deliver the Breakout/Workout Cash from the Cash Account to
the Working Account. Each Workout will be no longer than 30 calendar days, but
may be shortened if the Market Metrics have fulfilled that Breakout/Workout
before the expiration of the 30 day period. The Intermediary will track the
Breakout/Workout Periods for each Breakout/Workout (the "Breakout/Workout").
2.2.1.2. Breakout/Workout Start Requirements
In order for cash to be transferred from the Cash Account to the Working
Account, the following items must be completed and verified by the Intermediary:
(a) Market Metrics have been met
(Stated in the MOT Section II.5)
(b) Business Milestones have been met
(Stated in the MOT Section II.11)
(c) Conversion of Preferred to Common
(d) Deposit of Common Shares as Free Trading
(e) Verification that the Company is in Compliance with the MOT, USA and this
Agreement
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2.2.1.2.1 Intermediary Accounting
The Intermediary will track the daily volume which is above the Minimum Bid
Price to calculate the Accountable Volume as per the MOT Section II.4-7.
2.2.1.2.2 Uncovered Shares
The Intermediary shall calculate the Available Uncovered Shares as per the MOT
Section II.4-7.
2.2.1.2.3 Share Release Percentage
The Intermediary shall calculate the Share Release Percentage as per the MOT
Section II.4-7.
2.2.1.2.4 Cash Release
The Intermediary will calculate the Cash Release amount for the given
Breakout/Workout as per the MOT Section II.4-7. The Intermediary will keep a
running total of all Cash Released in all Breakout/Workout(s). The Intermediary
will continue to produce Breakout/Workouts until such time as the full Breakout
Cash Amount as stated in the MOT Section II.4 has been uncovered and released.
2.2.1.3. Rolling Effect
Should a Breakout/Workout not occur due to deficiencies of requirements during
the current 30 day period, the Breakout/Workout period will continue on a day by
day basis until such time as the proceeding 30 day period meets the
Breakout/Workout requirements.
2.2.1.4 Breakout/Workout Continuity
One day following the completion of the current Breakout/Workout, the
Intermediary will establish the next Breakout/Workout by following Articles
2.1.9 through 2.2.1.3.
2.2.2. Breakout/Workout Payments
2.2.2.1. Cash Delivery
One week following the end of a Breakout/Workout, the Intermediary shall deliver
via wire transfer from the Cash Account to the Working Account the Workout
Release Cash amount as determined by the Intermediary as per Article 2.2.1.2.4.
During the given 7 day period, the Intermediary will continue to monitor Company
Milestones and Compliance as per the MOT Section II.10-12 and Section IV.8.
2.2.2.2. Delivery Instructions
The Intermediary shall deliver the Breakout/Workout Cash Amount to the Working
Account via the Instructions provided in Exhibit B. Should the Intermediary wish
to amend these instructions; they may be permitted to do so with the permission
of the Advisor and the Company. Such Amendment will replace the instructions
provided in Exhibit B.
2.2.2.3. Confirmation
The Intermediary cannot confirm or verify that a wire is received in the Working
Account. The Intermediary can only confirm that the wire has pulled monies from
the Cash Account. The Company must verify the receipt of the wire and notify the
Intermediary if the wire was not received within 72 hours of delivery by the
Intermediary. In such instances, the Intermediary shall request the wire be
investigated and redelivered by their correspondent bank. In instances of faulty
instructions, the Intermediary will make every effort to retrieve and redeliver
the wire to the correct account. Should it be discovered that the wire was
delivered according to the instructions provided in Exhibit B or as provided in
Article 2.2.2.2., and that such instructions were faulty, and the Intermediary
is not able to retrieve the wire, the Company and Investor(s) shall hold the
Intermediary harmless for any loss. The Company is therefore responsible to
deliver to the Intermediary correct wire instructions to the Working Account.
2.2.3. Market Metric & Milestone Sufficiency and Deficiency
2.2.3.1. Sufficiency Verification
Should Intermediary determine that the Market Metric Requirements set out in the
MOT Section II.5 and Business Milestones set out in the MOT Section II.11 have
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met their respective criteria, there exists a "sufficiency" to deliver said
Breakout/Workout (which means that the relevant criteria has been satisfied).
Intermediary shall then deliver the cash from the Cash Account for that
Breakout/Workout to the Working Account according to the instructions in Exhibit
B. Any cash transfers are subject to the deduction of any fees and expenses as
are due and owing with or without instructions from the Company pursuant to this
Agreement, the MOT and the Unit Subscription Agreement.
2.2.3.2. Notification of Market Metric Deficiency
Should the Market Metric Requirements set out in the MOT Section II.5 be at a
level where they are not meeting their minimum levels for a period of 15 days,
the Intermediary shall provide notification to the Advisor of such deficiency.
Intermediary shall continue to monitor the Market Requirements in a daily 30 day
rolling period until such time as the Market Requirements have been met.
2.2.3.3 Notification of Business Milestone Deficiency
Should the Business Milestones listed in the MOT in Section II.11 be unfulfilled
30 days following the initial Deficiency Notification described in Article
2.2.3.2., the Intermediary shall issue a "Notice of Deficiency" to Company and
Investor(s) describing the deficiency. Intermediary will then await a correction
to the deficiency by Company or an Alteration Amendment to the instructions for
that period signed by the Investor(s) and Company.
2.2.3.3. Deficiency Effect
Upon receipt of said "Deficiency Letter", Company and Investor(s) may make
alternate agreements. Should alternate agreements be made, these agreements need
to be evidenced in writing signed by both Company and Investor(s).
2.2.4. Breakout/Workout Instructions
2.2.4.1. Breakout/Workout Schedule
Intermediary shall follow the Breakout/Workout schedule, as set forth in the MOT
Section II, to determine when Breakout/Workouts shall be delivered unless
amended instructions signed by both Company and Investor(s) have been lodged
with Intermediary for that Breakout/Workout.
2.2.4.2. Fee Transfers
Any transfers of Fees shall be made from the Cash Account at the same time as
the Breakout/Workout payment to Company is executed by Intermediary.
2.2.4.3. Company Cash Transfer Rights
Company shall have the rights to transfer the cash available for transfer, as
per Article 2.2.1.2.4., only to the Working Account or to any account which is
rightfully owned by the Company, or any member (subsidiary) of its corporate
Group (as requested by the Company in writing from time to time provided details
of the same have been provided and approved in advance to Intermediary), and
such ownership can be demonstrated to the Intermediary under the Anti-Money
laundering regulations. Third party transfers will not be entertained unless
pursuant to Article 2.2.5.1.
2.2.4.4. Investor(s) Share Availability
Following the completion of any given Breakout/Workout, that portion of Common
Shares available for "uncovering", as per Article 2.2.1.2.2., will become
"uncovered" and available to the Investor(s) for sale, transfer or to Deal with
in any other way.
2.2.5. Wire Transfers
2.2.5.1. Instructions
Any instruction for wire delivery, as included in Exhibit B, may be modified by
the respective party through delivery of new instructions evidencing those
instructions and requesting to have those instructions modify the existing
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instructions. Instructions shall be accepted to any account which is rightfully
owned by the requesting party and such ownership can be demonstrated to the
satisfaction of the Intermediaries Anti-Money laundering compliance. Such proof
can be through ownership letters from the current bank, proper instructions
evidencing ownership by the requesting party. Third party transfers will not be
entertained to any party's solicitor, broker or other party unless a designated
client account name and number can verify the ownership. Any such third party
transfer must be requested in writing and a statement as to whether it is a
onetime transfer or continuous instructions.
2.2.5.2. Requests
Any such Transfer Requests and or Instructions must specify whether they are to
replace those instructions in Exhibit B, in which case an amendment to Exhibit B
must be submitted and agreed to, otherwise, the Instructions must specify that
they are one time only.
2.2.5.3. Verification of Receipt
Intermediary is not responsible for following up with Company or Investor(s) on
any transfers of capital. Once instructions have been executed by Intermediary
to transfer, it is up to the Company to verify such wire arrived. Intermediary
makes no representations as to the length of time necessary to complete any
given wire. Time frames depend on the Bank conduit, international regulations,
Anti-Money Laundering controls and any governmental requirements.
2.2.5.4. Troubleshooting
In the event that a given wire does not appear, Intermediary shall take all such
steps as it has available to it to track such wire through to the Working
Account or such other account the money may have been sent to pursuant to
Article 2.2.4.3 or to cancel the previous wire and reissue the wire request.
2.2.6. Breakout/Workout Accounting
2.2.6.1. Audit Request Letters
Intermediary be available to verify account balances through any audit request
letter issued by the Company's auditors. Intermediary shall charge $250.00 per
audit request letter verification. Intermediary's response will be limited to
the amount of capital within any account in the Company's name or in the name of
any member of its Group at that given point and any previous account
demonstrations previously issued by Intermediary. Intermediary is not
responsible for any accounting or financial discrepancies of Company.
Intermediary will at no time allow an in office audit of their records by the
Company or its auditors.
2.2.6.2. Transfers
Intermediary evidences external transfers through debits of cash in an account.
2.2.6.3. Statements
Intermediary shall prepare statements showing the cash remaining in the account
following any given Breakout/Workout.
2.3. Warrants
2.3.1. Exercise
Intermediary shall act as a conduit for exercise of warrants through an
identical methodology as that in the Unit Subscription Agreement. Such exercise
shall utilize the Cash Account Intermediary has created for Company. Warrant
Exercise is not subject to any market conditions and will therefore not require
any additional market controls. Additional requirements of capital release and
the Warrant Exercise Schedule can be found in the MOT Section III. All Warrants
purchased by the Investor(s) may be exercised at any time up to their expiration
date.
2.3.2. Notification
The Intermediary shall notify the Company of any Investor(s) intention to
exercise their warrants. The Warrant Exercise Notification (the "WEN"), as
12
detailed in the USA Exhibit D, must specify the Warrant Series, Investor(s)
exercising the Warrant Series, the number of Warrants of the Series being
exercised, the number of Certificates and the share amounts of those
Certificates and the purchase amount for the exercise.
2.3.3 Company Delivery
Upon notification, the Company will issue Common Share Certificates, free of
restrictive legend, in the name and amounts specified in the Warrant Exercise
Notification. These Certificates will be delivered to the Intermediary for
deposit.
2.3.4 Additional Documentation
Should the Intermediary or its Depository require additional documentation from
the Company in order to deposit the Certificates, the Company will provide that
documentation as requested in a rapid and time efficient manner. Should legal
opinions, Registrations or other expenses be necessary to provide the
Certificates free of restrictive legend, the Company shall bear these expenses.
2.3.5 Cash Transfer
Intermediary shall secure monies from the Investor(s). Pending delivery of the
underlying share certificates free of restrictive legend and the accompanying
legal opinion on the issuance and tradability of the Common Shares, the monies
will then be transferred from the Cash Account to the Working Account.
2.3.6. Capital Delivery
2.3.6.1. Capital Undertaking(s)
Intermediary will be in receipt of capital "Undertaking(s)" from Investor(s)
sufficient to acquire the underlying Securities of that Warrant Series as
identified in the MOT Section III. At Closing, the Intermediary shall secure
such monies for credit to the Cash Account. No interest will be applied to
monies managed by the Intermediary. Intermediary shall not deal with such monies
from Investor(s) in any way save for those instructions within this Agreement.
All such Undertakings according to Bahamian Banking regulations shall be treated
as a Confidential communication between the Investor(s) and Intermediary.
2.3.6.2. Evidentiary Letter
Intermediary will issue a letter to Investor(s), Advisor and Company in evidence
that such monies are secured and Pre-Closing is awaiting deposit of Free Trading
Securities for that Warrant Series.
2.3.7. Certificated Security Trust
2.3.7.1. Certificate Delivery
The Company shall deliver to the Intermediary prior to Closing start, in the
Investor(s) name(s) and in the denominations called for in Exhibit A, those free
trading share certificates evidencing the purchase for that Warrant Series which
is being exercised as per Article 2.3.2. Along with the certificates, the
Company must deliver the required Registration Proxy or opinion letter
evidencing the free trading nature of the shares. The Company must issue
certificates in the amount requested by the WEN, or the Intermediary is
instructed to send back those certificates not according to the certificate
schedule for cancellation and reissuance prior to Closing.
2.3.7.2. Evidentiary Letter
Upon Receipt, the Intermediary shall verify that the certificates delivered by
the Company match in denomination and number as those certificates listed in
WEN. Should the certificates not match, the Intermediary will return those
certificates which are out of sync with the WEN and will specify those
certificates in the Evidentiary Letter.
2.3.7.3. Certificate Reissuance
Should the Evidentiary letter call for it, the Company will cancel those
13
certificates issued in error and reissue the correct securities certificates.
Such corrected certificates shall be delivered to the Intermediary as soon as
possible.
2.3.7.4. Secondary Evidentiary Letter
Upon receipt and verification of the corrected certificates, the Intermediary
shall start the process of Article 2.3.7. anew, until all certificates matching
the WEN have been issued and delivered to the Intermediary.
2.3.8. Closing Checklist
2.3.8.1 Closing Establishment
Following issuance of the WEN and Evidentiary Letters, the Intermediary shall
check to ensure that the proper documentation is in place and all actions
necessary to approve the close of the Warrant purchase identified in that WEN
have been delivered before ordering the close.
2.3.8.2. Deficiency
Should the Intermediary determine that a deficiency exists in the documentation
provided, the Intermediary shall issue a request immediately to the party
responsible for the documentation. The Intermediary shall await the delivery of
the required documentation before issuing any evidentiary letters.
2.3.9. Closing Window Compliance
During the Closing Window period (72 hours), the Intermediary will confirm the
following:
(a) Status of parties
(b) Signature authorization
(c) Signature Coverage
(d) Legal Opinion Issuance
(e) Corporate Resolution Issuance
(f) Due Diligence List Completion
(g) Conflicts Check
(h) Certificate Verification
(i) Money Laundering Compliance
(j) Undertaking Verification
2.3.10. Closing
Closing shall take place as follows:
2.3.10.1. Intermediary shall credit monies from Investor(s) to Cash Account, and
Certificated Securities from Company to Investor(s) Accounts.
2.1.5.3. Upon delivery of capital, the Intermediary will wire transfer that
capital, minus the Cash Holdback and fees, to the instructions lodged in Exhibit
B.
2.1.3.4. Upon transfer of the Securities to the Investor(s) account, the
Investors may deal with those Securities at will as they wish.
2.3.11. Cash Holdback
The Intermediary shall withhold that portion of the Warrant Exercise as called
for in the MOT Section III Figure 9 for Cash Holdback and Monthly and Annual
Account Fee's.
2.3.11.1. Cash Holdback Distribution
Intermediary is instructed to cover all expenses of the Investors, including
general and service expenses and other billable expenses from the Cash Holdback.
Any amounts owing to the Intermediary over and above the expenses already
covered will be billed to the Cash Holdback. Any amounts not expensed shall be
returned to the Cash Account.
2.3.12. Reversing Transactions
Intermediary shall not from the time of closing forward, entertain requests from
14
Company or Investor(s) individually to "Reverse" the transactions by returning
or exchanging monies for purchased securities.
2.3.13. Evidenced Transaction Documents
2.3.13.1. Closing Notice
Intermediary shall provide a letter to Advisor, Company and Investor(s) by the
end of the same Business Day as Closing, evidencing the closing of the
transaction and stating the amount of capital credited to the Company's Account.
2.3.13.2. Agreement Dominance Letter
Intermediary shall state in the letter that this Account Management Agreement is
in full force and effect.
2.4. Windup
2.4.1. Completion of this Agreement
Following the completion of all Breakout/Workouts, payout of all monies in Cash
Account, payment of all fees and exercise of all Warrants, this Agreement will
cease.
2.4.2. Account Windup
Intermediary shall not require permission of either Company or Investor(s) to
wind up the Cash Account following completion of this Agreement. Prior to
windup, all cash remaining in the Cash Account will be wired to the Company
minus any outstanding fees.
2.4.3. Notifications
Intermediary shall evidence such winding up through notice to Company, Advisor
and Investor(s) that this Agreement is no longer in force and effect and that
the Cash Account has been closed.
2.5 Use of Proceeds Accounting
2.5.1. Use of Proceeds
The Use of Proceeds Agreed to is included in the MOT Exhibit F.
2.5.2. Company Reporting
The Company will provide Quarterly and annual reports to the Intermediary on the
Use of the Proceeds. The Report must specify the following:
a. Where monies in the Working Account were spent
b. Specifying any deviations from the Use of Proceeds listed in the MOT Exhibit
F
c. Quarterly statements from the auditors attesting to a. and b. above
2.5.3. Deviation Communication
If the Company is expecting any deviation from the Use of Proceeds in excess of
$20,000, the Company must communicate with the Advisor ahead of such deviation
to secure an amendment to the Use of Proceeds. Any such request should identify
the valuation accretion created by the deviation, or specify the special issues
causing the deviation.
2.5.4. Deviation Acceptance
The Advisor will be appointed to arbitrate the acceptance of a deviation. The
Advisor shall notify the Company and the Intermediary of its acceptance or
rejection of the Deviation in question. Any rejection should specify the reasons
for rejection and offer an alternative to the Deviation.
2.5.5. Deviation Negotiation
Until the Company and the Advisor come to an agreement on the Deviation, the
Company shall refrain from such Deviation. The Advisor will not unnecessarily
withhold its agreement to the Deviation, but will utilize value creation as its
guide. Nothing herein is a release of Advisors rights to determine whether the
Deviation creates value and hence whether it should be approved or denied.
15
2.5.6. Non-Compliant Deviation
Should the Company deviate from the Use of Proceeds without gaining Advisor
approval, the Advisor shall have the right to request the Intermediary to turn
the matter over to the Compliance Attorney for resolution. Should the Advisor
not make such request, will in no way relieve the Company of its obligation to
seek such approval in the future, nor alleviate the Advisors right to challenge
the deviation.
2.6 Company Compliance
The Company will have deposited 500,000 super voting Class C Preferred Shares
with the Compliance Attorney. The Compliance Attorney contact information can be
found in Exhibit C.
2.6.1. Notification
Should the Intermediary require assistance from the Compliance Attorney in order
to compel the Company to Act, perform or satisfy a rectification of any
deviation from the Use of Proceeds, the Intermediary is instructed to
communicate the Compliance issue to the Compliance Attorney. Such Notification
shall be in writing and be delivered via the Advisor to the Compliance Attorney.
The Notification must specify the Compliance issue, the requests made to rectify
and the dates of such requests.
2.6.2. Breakout/Workout Pause
Should the Company not come into Compliance within 30 days, the Intermediary is
instructed to pause any Breakout/Workout until such time as the Intermediary is
made aware that Compliance has been reestablished.
2.6.3. Response
The Compliance Attorney will be able to force Compliance through the Compliance
Attorney Agreement (the "CAA"). Upon attaining Compliance, the Compliance
Attorney shall deliver a notification to Intermediary and Advisor notifying them
that Compliance has been reestablished and providing any documentation or action
requested by the Intermediary. Upon this finding, the Intermediary may continue
to carry out instructions.
2.6.4. Breakout/Workout Restart
The Intermediary is instructed to start the clock on the current
Breakout/Workout afresh and not to account for any previous volume or pricing
which may have been accounted for before the Compliance Attorney turnover
occurred.
2.7 Breakup
2.7.1. Notification of Breakup
Should the Company and Investor(s) decide to enter into a Breakup Agreement,
such Agreement must be signed by the Company, each Investor(s) and the
Intermediary.
2.7.2. Breakup Timing
Should a Breakout/Workout be in process of delivery, the Breakup shall occur
following the delivery of that Breakout/Workout. If no deliveries are expected
to occur, the Intermediary may cease the Breakout/Workout in order to Breakup
the transaction.
2.7.3. Fees
Any Breakup must include the payment of the Intermediaries monthly and annual
fees for the next 12 months in cash.
2.7.4. Certificates
Should the Breakup call for a transfer of Securities to the Investor(s), those
Certificates must be delivered with all legal opinions, registrations or other
documentation to allow the Investor(s) to deposit the securities. Such delivery
of Certificates must occur prior to Breakup Closing. Should the Certificates not
be delivered, the Intermediary is instructed to continue to operate according to
the Instructions of this Account Management Agreement until such time as those
Certificates are delivered and deposited.
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2.7.5. Non Performance
Should the Company fail to deliver the required share Certificates or agreed
upon fees within 30 days of signing the Breakup Agreement, the Breakup Agreement
shall be considered null and void, and the Intermediary is hereby instructed to
continue with the Instructions from this Agreement.
2.8 Terms Verification
Should the Intermediary be made aware of any breach of the Terms of the Offering
as per the Memorandum of Terms, Unit Subscription Agreement or this Agreement,
the Intermediary shall notify the Advisor, Compliance Attorney and the Company
of such breach immediately.
2.8.1. Rectification
The Company will have 30 days to return to Compliance with the Terms of the
Offering or to obtain an Amendment to the Offering Terms with the Investor(s)
which would provide new instructions to the Intermediary.
ARTICLE III.
INTERMEDIARY REPS AND WARRANTIES.
The undersigned, on behalf of Elco Securities, Ltd. a registered Level 2 Broker
Dealer and having an address of Loyalist Plaza, Xxx Xxxxxx Boulevard Xxxxx
Harbor, Abaco operating under license by the Bahamian Government
("Intermediary"), hereby warrants and represents as follows:
3.1 Representations:
3.1.1. Intermediary has taken all corporate and legal actions necessary to enact
this Agreement and to execute its activities under this Agreement.
3.1.2. That Intermediary is licensed to act in this capacity and to offer the
services of an Intermediary as the definition describes. That Intermediary is a
licensed Broker Dealer with the Securities Commission of the Bahamas. As part of
its duties, the Intermediary will provide brokerage services for the Investor(s)
and effect share transfers. That Intermediary holds all necessary consents
required to accept the cash deposits within the Cash Account as a registered
broker dealer.
3.1.3. As of the date hereof, Intermediary has not received notice of any liens,
claims or encumbrances with respect to the Cash Account, except with respect to
Company pursuant to this Agreement, and Intermediary has not confirmed any
interest in the Cash Account to any persons other than pursuant to this
Agreement.
3.1.4. Intermediary agrees that it will not debit the Cash Account to satisfy
obligations of any party other than the Company and/or not related to this
Agreement or the accepted UOP.
3.1.5. Intermediary has a first lien and security interest in the Cash and
Securities Account(s) as security for the payment and performance of all
obligations to Intermediary arising out of the management of this Agreement.
3.1.6. Intermediary shall not deliver to Company or the Investor(s) any property
whatsoever from the Cash Account or Investor(s) Account including, but not
limited to (1) cash distributions including cash dividends or interest paid on
assets held in the relevant Account; or, (2) stock dividends; or, (3)
distributions in property except upon instructions from this Agreement as
specifically listed in Article II.
3.1.7. Intermediary acting as principle agent provides and gives no assurances
as to the legality of this Agreement, marketability of the securities or the
tradable volumes and will only act as broker and custodian to facilitate this
Agreement.
3.1.8. Intermediary shall act as principle agent in addition to its role as
17
Intermediary. Intermediary understands that this means they will be making all
decisions regarding this Agreement and executing those transactions.
3.1.9. Intermediary shall keep the Cash Account as a segregated account where
such monies shall not be mixed with any other monies and shall remain clearly
identifiable.
ARTICLE IV.
COMPANY REPS & WARRANTIES.
The Company warrants as at the date of this Agreement the following:
4.1 Warranties
4.1.1. By signing below the Company confirms to Intermediary that Company has
instructed Intermediary to open the Cash Account.
4.1.2. Company further agrees and acknowledges that the rights and obligations
of the parties hereto relating to the Cash Account are governed by this
Agreement executed by Company with Intermediary, regardless of whether Company
has executed a Customer Agreement in connection with the Cash Account or not and
that this Agreement shall take precedence over the terms of any Customer
Agreement.
4.1.3. That Company has taken all necessary corporate and legal actions
necessary to transact this Agreement. That Company has full right and authority
to issue said Securities and to enter into the Unit Subscription Agreement in
connection with said Securities.
4.1.4. Company represents and warranties that this Agreement is an Account
Management Agreement and is not part in any way of illegal or deceptive means of
transferring funds.
4.1.5. Company hereby agrees that the Intermediary hereof shall not be required
first to institute suit or exhaust its remedies hereon against the Company to
enforce this agreement.
4.1.6. Company hereby agrees to consult and act in a responsible and legal
manner in its transactions with Intermediary. Company understands that
Intermediary and Investor(s) take no responsibility for breaches of Securities
Regulations here or abroad which Company may commit.
4.1.7. Company hereby agrees to release, discharge, indemnify and hold harmless
Intermediary, its affiliates, officers and employees from and against any and
all losses, claims, causes of action, liabilities, lawsuits, demands and/or
damages, including, without limitation, any and all court costs and reasonable
attorneys' fees and expenses arising out of or incurred in connection with
Intermediary complying with instructions from the Company in relation to the
Cash Account in accordance with this Agreement.
4.1.8. Company agrees that it will not act outside of this Agreement to induce
any contravention of this Agreement. Company shall not make any attempts to
cancel or otherwise reduce the effect of this Agreement upon the Cash Account or
Investor(s) Securities.
4.1.9. In the event that Intermediary becomes involved in litigation as a result
of complying with this Agreement, Company agrees that Intermediary shall be
entitled to charge all the costs and fees (including reasonable attorneys' fees
and expenses) it incurs in connection with such litigation to the assets in the
Cash Account and to the assets of Company held by Intermediary and to withdraw
such sums as the costs and charges accrue, and Company shall be liable to
Intermediary and Investor(s) for any deficiency resulting from this indemnity
and for any legal fees in the construct, execution or defense of this agreement.
4.1.10. Company confirms that the Cash Account shall contain cash. Company
acknowledges that this entails risk. Intermediary is not instructed to operate
any capital appreciation program and the Cash Account will not bear interest.
4.1.11. Company formally states that as of the date hereof, there is not any
notice of liens, claims or encumbrances with respect to the Shares or the
Warrants to be issued pursuant to the Unit Subscription Agreement.
18
4.1.12. Company understands and agrees that pursuant to this Agreement,
Intermediary has a first lien and security interest in the Cash Account as
security for the payment and performance of all obligations of Company to
Intermediary arising out of the Account. Company agrees to that language in
Article II.
4.1.13. Company consents and agrees that the only communications that shall be
given to Intermediary by Company shall be given by the authorized officer or
person of Company. Such Person will have been the person authorized by Company
to issue such communication as evidenced by a board resolution and provision of
the appropriate documents to Intermediary.
4.1.14. Company understands that Intermediary shall not, deliver to Company any
property whatsoever from the Cash Account including, but not limited to (1) cash
distributions including cash dividends or interest paid on assets held in the
Account; (2) stock dividends; (3) distributions in property; or (4) cash returns
of capital from the Account unless otherwise specified herein.
4.1.15. Company further understands that in event that a Breakout/Workout
requirement is not met, as evidenced by an opinion letter from Intermediary to
Company and Investor(s), that Company shall not be entitled to receive such
Breakout/Workout until such time as the requirements are met. If negotiations
are undertaken between the Company and Investor(s), any such agreement must be
evidenced in writing to the Intermediary and signed by both parties in order to
make an alteration to the Instructions of this Agreement.
4.1.16. The Company hereby agrees to hold Intermediary harmless in event of loss
from misdirection from Intermediary as a result of incorrect instructions from
Company or from any loss relating to the currency held in the Cash Account
pursuant to this Agreement. Should misdirection occur as a result of fraud,
theft or other means not as a result of Intermediaries actions, Company and
Intermediary agree to cooperate in suit against such responsible party. At no
time shall Company institute suit against Intermediary to recover funds from
Intermediary which were misdirected through no fault of Intermediary.
ARTICLE V.
INVESTOR(S) REPS AND WARRANTIES.
By signature below, each respective Secured party, individually, hereby agrees,
represents and warrants to Intermediary the following:
5.1. Representations
5.1.1. The Investor(s) agree to hold Intermediary harmless in event of loss from
misdirection from Intermediary other than illegal misappropriation by
Intermediary or from forces outside of the control of the Intermediary.
5.1.2. The Investor(s) have taken all necessary corporate action to enable them
to enter into this transaction.
5.1.3. Investor(s) agree to allow Intermediary to make decisions regarding their
security interest in the assets of the account based on this Agreement, and
further agree to hold the Intermediary harmless in any matter short of theft,
loss of securities or illegal activity on the part of the Intermediary.
5.1.4. Investor(s) hereby represent and warranty that this Agreement is not a
Securities purchase and sale agreement and not part in any way of illegal or
deceptive means of transferring funds.
5.1.5. Investor(s) shall deliver all necessary documents and sign all necessary
transfer letters on opinion from Intermediary. Investor(s) shall not
unnecessarily withhold their signature from any document except in the case of
substantive discrepancy in any Breakout/Workout provision, modification of
payment or transfer due.
5.1.6. Investor(s) agree that only their authorized representatives will be
allowed to provide instructions to and communicate with Intermediary.
19
5.1.7. Investor(s) confirm that their accounts will contain securities and that
Intermediary makes no claim, guarantee or warrantee on the tradability or market
of those securities and that these securities entail risk.
5.1.8. Investor(s) hereby agree to consult and act in a responsible and legal
manner in its transactions with Intermediary.
5.1.9. Investor(s) represent and warranty that this Agreement is an Account
Management Agreement and not part in any way of illegal or deceptive means of
transferring funds.
5.1.10. Investor(s) further agree and acknowledge that the rights and
obligations of the parties hereto relating to the Securities Account(s) are
governed by the Customer Agreement executed by Investor(s) with the
Intermediary, regardless of whether Investor(s) has executed a Customer
Agreement in connection with the Account or not.
5.1.11. Investor(s) agree to the instructions and requirements of this
Agreement.
5.1.12. Investor(s) hereby agree that the Intermediary hereof shall not be
required first to institute suit or exhaust its remedies hereon against the
Investor(s) to enforce this Agreement.
5.1.13. Investor(s) shall not make any attempts to cancel or otherwise reduce
the effect of this Agreement upon the cash in Cash Account or the Securities.
ARTICLE VI.
FEES.
6.1.1. Agreement to Pay Fees
Company and Investor(s) agree to pay fees as part of the Use of Proceeds. Such
payments will be made directly from the Cash Account on satisfaction of the
respective Breakout/Workout.
6.1.2. Cash Holdback
Intermediary shall holdback $5,000 per Breakout/Workout on the Equity
Breakout/Workouts and that portion of the Warrants as described in the MOT
Section III. Such Holdback shall be retained by the Intermediary and used to
cover expenses billed to the Intermediary for the management and execution of
the Offering. Any cash not used to cover expenses shall be returned to the
Company at the completion of the offering.
(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)
20
ARTICLE VII.
FURTHER PROVISIONS.
7.1. Modification:
This Agreement may not be amended or modified without the written consent of the
Company, the Intermediary and the Investor(s). Any such amendments shall be add
ended to this agreement and labeled as to (AMA (Title), Addendum # Date).
7.2. Adjudication:
This Agreement shall be governed by and construed in accordance with the laws of
the Commonwealth of the Bahamas, without giving effect to any conflicts of law
provisions thereof, and shall be binding upon Company's and Investor(s)' estate,
executors and heirs, and upon the successors and assigns of Intermediary,
Investor(s) and Company. Any suits brought due to this agreement shall be filed
and adjudicated in the Bahamas.
7.3. Counterparts:
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original and all of which together shall be deemed to
be one and the same instrument.
7.4. Notices:
All notices shall be sent to the addresses listed in Exhibit C.
7.5. Confidentiality:
This Agreement and all counterparts thereof shall be deemed confidential except
any disclosure required by law or any stock exchange or as may be disclosed to
any shareholders. All standards of confidentiality shall apply. No party shall
discuss this Agreement with any party outside of this agreement without the
written consent of the Company, Intermediary and Investor(s). The following
parties are herewith agreed recipients of information regarding this
transaction, its agreements and all aspects of said documents. The parties to
this Agreement are hereby bound by confidentiality as per these agreements.
7.6. Termination:
Company and Investor(s) may jointly elect to terminate this Agreement at any
time up to 2 hours prior to the Closing of the Offering by the Intermediary.
7.7. Severability:
If any part of this Agreement is found to be unlawful, the remaining provisions
shall inure to the parties and shall continue in full force and effect.
7.8. Monetary Equivalent:
Any financial values or monetary amounts in this Agreement, and any and all
addendums and corollaries shall be construed and represented as being US Dollars
($) unless otherwise specified.
7.9. Amendments and Waivers:
Any term of this Agreement may be amended, only in a writing signed by the
Company and the Investor(s). Any amendment or waiver affected in accordance with
this Article shall be binding upon the Company and each Investor(s).
7.10. Entire Agreement:
This agreement will uphold and add to the MOT and USA upon closing.
7.11. Titles and Subtitles:
The titles and subtitles used in this Agreement are used for convenience only
and are not to be considered in construing or interpreting this Agreement.
7.12. Transfer; Successors and Assigns
The provisions of this Agreement shall inure to the benefit of, and shall be
binding upon, the successors and permitted assigns of the parties hereto. The
Company may not assign its rights and obligations hereunder without the consent
of the Investor(s), the Advisor and the Intermediary (which consent shall not be
unreasonably withheld or delayed). The provisions of this Article 7.12 shall not
limit the Investor(s)' ability to assign their rights and obligations under any
21
Transaction Document. The Intermediary shall be notified immediately of any
change in ownership, rights or obligations and provided with the new contact for
the ownership. Any purchaser, transferee or obligator will be subject to the
original Unit Subscription Agreement and this Account Management Agreement.
7.13. Survival of Reps and Warranties
The Representations and Warranties in this Agreement, including any rights
arising out of any breach of such Representations and Warranties, shall survive
the Closing for a period of two years.
7.14. Adjustments for Stock Splits, Etc.:
Where in this Agreement there is a reference to a specific number of Securities
or value of such Shares, then, upon the occurrence of any subdivision,
combination, stock dividend or stock split, the specific number or value of
shares so referenced in this Agreement shall automatically be proportionally
adjusted to reflect the effect of such subdivision, combination, stock dividend
or stock split on the outstanding shares of stock.
22
IN WITNESS WHEREOF, the undersigned hereby execute this Agreement and cause it
to be put in action. Copies of this agreement shall be delivered in triplicate
to Company, Intermediary and Investor(s) with a copy uploaded to the Company's
Online Portal hosted by the Advisor, as of the date indicated below.
I, Xxxxx Xxxxxx hereby execute this agreement and assert my agreement to its
covenants and responsibilities.
By: /s/ Xxxxx Xxxxxx Date: 08.17.12
Name: Xxxxx Xxxxxx
Title: Account Manager (Intermediary)
I, Xxxxxx Xxxxxxx of Liberty Coal Energy hereby execute this agreement and
assert my agreement to its covenants and responsibilities.
By: /s/ Xxxxxx Xxxxxxx Date: 08.17.12
Name: Xxxxxx Xxxxxxx
Title: Company
Corporate Seal: (No Corporate Seal)
(Insert Investor(s) Block for Signatures)
23
EXHIBIT A
Certificate List
Copperbottom Investments, Ltd. Absentia Holdings, Ltd.
Com. Cert # # Com Shrs. Cash Amount Com. Cert # # Com Shrs. Cash Amount
----------- ----------- ----------- ----------- ----------- -----------
1125 1,702,500 $ 25,537.50 1161 1,702,500 $ 25,537.50
1126 1,590,640 $ 25,537.50 1162 1,590,640 $ 25,537.50
1127 1,486,210 $ 25,537.50 1163 1,486,210 $ 25,537.50
1128 1,388,690 $ 25,537.50 1164 1,388,690 $ 25,537.50
1129 1,297,640 $ 25,537.50 1165 1,297,640 $ 25,537.50
1130 1,212,610 $ 25,537.50 1166 1,212,610 $ 25,537.50
1131 1,133,210 $ 25,537.50 1167 1,133,210 $ 25,537.50
1132 1,059,060 $ 25,537.50 1168 1,059,060 $ 25,537.50
1133 989,800 $ 25,537.50 1169 989,800 $ 25,537.50
1134 925,120 $ 25,537.50 1170 925,120 $ 25,537.50
1135 864,700 $ 25,537.50 1171 864,700 $ 25,537.50
1136 808,260 $ 25,537.50 1172 808,260 $ 25,537.50
1137 755,900 $ 25,550.00 1173 755,900 $ 25,550.00
1138 706,630 $ 25,550.00 1174 706,630 $ 25,550.00
1139 660,590 $ 25,550.00 1175 660,590 $ 25,550.00
1140 617,570 $ 25,550.00 1176 617,570 $ 25,550.00
1141 577,390 $ 25,550.00 1177 577,390 $ 25,550.00
1142 539,830 $ 25,550.00 1178 539,830 $ 25,550.00
1143 504,740 $ 25,550.00 1179 504,740 $ 25,550.00
1144 471,950 $ 25,550.00 1180 471,950 $ 25,550.00
1145 441,310 $ 25,550.00 1181 441,310 $ 25,550.00
1146 412,670 $ 25,550.00 1182 412,670 $ 25,550.00
1147 385,910 $ 25,550.00 1183 385,910 $ 25,550.00
1148 360,890 $ 25,550.00 1184 360,890 $ 25,550.00
1149 337,510 $ 25,550.00 1185 337,510 $ 25,550.00
1150 315,650 $ 25,550.00 1186 315,650 $ 25,550.00
1151 295,220 $ 25,550.00 1187 295,220 $ 25,550.00
1152 276,130 $ 25,550.00 1188 276,130 $ 25,550.00
1153 258,270 $ 25,550.00 1189 258,270 $ 25,550.00
1154 241,580 $ 25,550.00 1190 241,580 $ 25,550.00
1155 225,980 $ 25,550.00 1191 225,980 $ 25,550.00
1156 211,390 $ 25,550.00 1192 211,390 $ 25,550.00
1157 197,750 $ 25,550.00 1193 197,750 $ 25,550.00
1158 184,990 $ 25,550.00 1194 184,990 $ 25,550.00
1159 173,060 $ 25,550.00 1195 173,060 $ 25,550.00
1160 161,910 $ 25,550.00 1196 161,910 $ 25,550.00
23,773,260 $ 919,650.00 23,773,260 $ 919,650.00
Britania Securities International, Ltd AgriTechnologies International, Ltd.
Com. Cert # # Com Shrs. Cash Amount Com. Cert # # Com Shrs. Cash Amount
----------- ----------- ----------- ----------- ----------- -----------
1197 1,702,500 $ 25,537.50 1233 1,702,500 $ 25,537.50
1198 1,590,640 $ 25,537.50 1234 1,590,640 $ 25,537.50
1199 1,486,210 $ 25,537.50 1235 1,486,210 $ 25,537.50
1200 1,388,690 $ 25,537.50 1236 1,388,690 $ 25,537.50
1201 1,297,640 $ 25,537.50 1237 1,297,640 $ 25,537.50
1202 1,212,610 $ 25,537.50 1238 1,212,610 $ 25,537.50
1203 1,133,210 $ 25,537.50 1239 1,133,210 $ 25,537.50
1204 1,059,060 $ 25,537.50 1240 1,059,060 $ 25,537.50
1205 989,800 $ 25,537.50 1241 989,800 $ 25,537.50
1206 925,120 $ 25,537.50 1242 925,120 $ 25,537.50
1207 864,700 $ 25,537.50 1243 864,700 $ 25,537.50
1208 808,260 $ 25,537.50 1244 808,260 $ 25,537.50
1209 755,900 $ 25,550.00 1245 755,900 $ 25,550.00
1210 706,630 $ 25,550.00 1246 706,630 $ 25,550.00
1211 660,590 $ 25,550.00 1247 660,590 $ 25,550.00
1212 617,570 $ 25,550.00 1248 617,570 $ 25,550.00
1213 577,390 $ 25,550.00 1249 577,390 $ 25,550.00
1214 539,830 $ 25,550.00 1250 539,830 $ 25,550.00
1215 504,740 $ 25,550.00 1251 504,740 $ 25,550.00
1216 471,950 $ 25,550.00 1252 471,950 $ 25,550.00
1217 441,310 $ 25,550.00 1253 441,310 $ 25,550.00
1218 412,670 $ 25,550.00 1254 412,670 $ 25,550.00
1219 385,910 $ 25,550.00 1255 385,910 $ 25,550.00
1220 360,890 $ 25,550.00 1256 360,890 $ 25,550.00
1221 337,510 $ 25,550.00 1257 337,510 $ 25,550.00
1222 315,650 $ 25,550.00 1258 315,650 $ 25,550.00
1223 295,220 $ 25,550.00 1259 295,220 $ 25,550.00
1224 276,130 $ 25,550.00 1260 276,130 $ 25,550.00
1225 258,270 $ 25,550.00 1261 258,270 $ 25,550.00
1226 241,580 $ 25,550.00 1262 241,580 $ 25,550.00
1227 225,980 $ 25,550.00 1263 225,980 $ 25,550.00
1228 211,390 $ 25,550.00 1264 211,390 $ 25,550.00
1229 197,750 $ 25,550.00 1265 197,750 $ 25,550.00
1230 184,990 $ 25,550.00 1266 184,990 $ 25,550.00
1231 173,060 $ 25,550.00 1267 173,060 $ 25,550.00
1232 161,910 $ 25,550.00 1268 161,910 $ 25,550.00
23,773,260 $ 919,650.00 23,773,260 $ 919,650.00
On Time Investments, Ltd. RnD Company, Ltd.
Com. Cert # # Com Shrs. Cash Amount Com. Cert # # Com Shrs. Cash Amount
----------- ----------- ----------- ----------- ----------- -----------
1269 1,702,500 $ 25,537.50 1305 1,702,500 $ 25,537.50
1270 1,590,640 $ 25,537.50 1306 1,590,640 $ 25,537.50
1271 1,486,210 $ 25,537.50 1307 1,486,210 $ 25,537.50
1272 1,388,690 $ 25,537.50 1308 1,388,690 $ 25,537.50
1273 1,297,640 $ 25,537.50 1309 1,297,640 $ 25,537.50
1274 1,212,610 $ 25,537.50 1310 1,212,610 $ 25,537.50
1275 1,133,210 $ 25,537.50 1311 1,133,210 $ 25,537.50
1276 1,059,060 $ 25,537.50 1312 1,059,060 $ 25,537.50
1277 989,800 $ 25,537.50 1313 989,800 $ 25,537.50
1278 925,120 $ 25,537.50 1314 925,120 $ 25,537.50
1279 864,700 $ 25,537.50 1315 864,700 $ 25,537.50
1280 808,260 $ 25,537.50 1316 808,260 $ 25,537.50
1281 755,900 $ 25,550.00 1317 755,900 $ 25,550.00
1282 706,630 $ 25,550.00 1318 706,630 $ 25,550.00
1283 660,590 $ 25,550.00 1319 660,590 $ 25,550.00
1284 617,570 $ 25,550.00 1320 617,570 $ 25,550.00
1285 577,390 $ 25,550.00 1321 577,390 $ 25,550.00
1286 539,830 $ 25,550.00 1322 539,830 $ 25,550.00
1287 504,740 $ 25,550.00 1323 504,740 $ 25,550.00
1288 471,950 $ 25,550.00 1324 471,950 $ 25,550.00
1289 441,310 $ 25,550.00 1325 441,310 $ 25,550.00
1290 412,670 $ 25,550.00 1326 412,670 $ 25,550.00
1291 385,910 $ 25,550.00 1327 385,910 $ 25,550.00
1292 360,890 $ 25,550.00 1328 360,890 $ 25,550.00
1293 337,510 $ 25,550.00 1329 337,510 $ 25,550.00
1294 315,650 $ 25,550.00 1330 315,650 $ 25,550.00
1295 295,220 $ 25,550.00 1331 295,220 $ 25,550.00
1296 276,130 $ 25,550.00 1332 276,130 $ 25,550.00
1297 258,270 $ 25,550.00 1333 258,270 $ 25,550.00
1298 241,580 $ 25,550.00 1334 241,580 $ 25,550.00
1299 225,980 $ 25,550.00 1335 225,980 $ 25,550.00
1300 211,390 $ 25,550.00 1336 211,390 $ 25,550.00
1301 197,750 $ 25,550.00 1337 197,750 $ 25,550.00
1302 184,990 $ 25,550.00 1338 184,990 $ 25,550.00
1303 173,060 $ 25,550.00 1339 173,060 $ 25,550.00
1304 161,910 $ 25,550.00 1340 161,910 $ 25,550.00
23,773,260 $ 919,650.00 23,773,260 $ 919,650.00
24
Rooftop Holdings, Ltd. Sequence Investments, Ltd.
Com. Cert # # Com Shrs. Cash Amount Com. Cert # # Com Shrs. Cash Amount
----------- ----------- ----------- ----------- ----------- -----------
1341 1,702,500 $ 25,537.50 1377 1,702,500 $ 25,537.50
1342 1,590,640 $ 25,537.50 1378 1,590,640 $ 25,537.50
1343 1,486,210 $ 25,537.50 1379 1,486,210 $ 25,537.50
1344 1,388,690 $ 25,537.50 1380 1,388,690 $ 25,537.50
1345 1,297,640 $ 25,537.50 1381 1,297,640 $ 25,537.50
1346 1,212,610 $ 25,537.50 1382 1,212,610 $ 25,537.50
1347 1,133,210 $ 25,537.50 1383 1,133,210 $ 25,537.50
1348 1,059,060 $ 25,537.50 1384 1,059,060 $ 25,537.50
1349 989,800 $ 25,537.50 1385 989,800 $ 25,537.50
1350 925,120 $ 25,537.50 1386 925,120 $ 25,537.50
1351 864,700 $ 25,537.50 1387 864,700 $ 25,537.50
1352 808,260 $ 25,537.50 1388 808,260 $ 25,537.50
1353 755,900 $ 25,550.00 1389 755,900 $ 25,550.00
1354 706,630 $ 25,550.00 1390 706,630 $ 25,550.00
1355 660,590 $ 25,550.00 1391 660,590 $ 25,550.00
1356 617,570 $ 25,550.00 1392 617,570 $ 25,550.00
1357 577,390 $ 25,550.00 1393 577,390 $ 25,550.00
1358 539,830 $ 25,550.00 1394 539,830 $ 25,550.00
1359 504,740 $ 25,550.00 1395 504,740 $ 25,550.00
1360 471,950 $ 25,550.00 1396 471,950 $ 25,550.00
1361 441,310 $ 25,550.00 1397 441,310 $ 25,550.00
1362 412,670 $ 25,550.00 1398 412,670 $ 25,550.00
1363 385,910 $ 25,550.00 1399 385,910 $ 25,550.00
1364 360,890 $ 25,550.00 1400 360,890 $ 25,550.00
1365 337,510 $ 25,550.00 1401 337,510 $ 25,550.00
1366 315,650 $ 25,550.00 1402 315,650 $ 25,550.00
1367 295,220 $ 25,550.00 1403 295,220 $ 25,550.00
1368 276,130 $ 25,550.00 1404 276,130 $ 25,550.00
1369 258,270 $ 25,550.00 1405 258,270 $ 25,550.00
1370 241,580 $ 25,550.00 1406 241,580 $ 25,550.00
1371 225,980 $ 25,550.00 1407 225,980 $ 25,550.00
1372 211,390 $ 25,550.00 1408 211,390 $ 25,550.00
1373 197,750 $ 25,550.00 1409 197,750 $ 25,550.00
1374 184,990 $ 25,550.00 1410 184,990 $ 25,550.00
1375 173,060 $ 25,550.00 1411 173,060 $ 25,550.00
1376 161,910 $ 25,550.00 1412 161,910 $ 25,550.00
23,773,260 $ 919,650.00 23,773,260 $ 919,650.00
Anybright Investments, Ltd. Orange Investments, Ltd.
Com. Cert # # Com Shrs. Cash Amount Com. Cert # # Com Shrs. Cash Amount
----------- ----------- ----------- ----------- ----------- -----------
1413 1,702,500 $ 25,537.50 1449 1,702,500 $ 25,537.50
1414 1,590,640 $ 25,537.50 1450 1,590,640 $ 25,537.50
1415 1,486,210 $ 25,537.50 1451 1,486,210 $ 25,537.50
1416 1,388,690 $ 25,537.50 1452 1,388,690 $ 25,537.50
1417 1,297,640 $ 25,537.50 1453 1,297,640 $ 25,537.50
1418 1,212,610 $ 25,537.50 1454 1,212,610 $ 25,537.50
1419 1,133,210 $ 25,537.50 1455 1,133,210 $ 25,537.50
1420 1,059,060 $ 25,537.50 1456 1,059,060 $ 25,537.50
1421 989,800 $ 25,537.50 1457 989,800 $ 25,537.50
1422 925,120 $ 25,537.50 1458 925,120 $ 25,537.50
1423 864,700 $ 25,537.50 1459 864,700 $ 25,537.50
1424 808,260 $ 25,537.50 1460 808,260 $ 25,537.50
1425 755,900 $ 25,550.00 1461 755,900 $ 25,550.00
1426 706,630 $ 25,550.00 1462 706,630 $ 25,550.00
1427 660,590 $ 25,550.00 1463 660,590 $ 25,550.00
1428 617,570 $ 25,550.00 1464 617,570 $ 25,550.00
1429 577,390 $ 25,550.00 1465 577,390 $ 25,550.00
1430 539,830 $ 25,550.00 1466 539,830 $ 25,550.00
1431 504,740 $ 25,550.00 1467 504,740 $ 25,550.00
1432 471,950 $ 25,550.00 1468 471,950 $ 25,550.00
1433 441,310 $ 25,550.00 1469 441,310 $ 25,550.00
1434 412,670 $ 25,550.00 1470 412,670 $ 25,550.00
1435 385,910 $ 25,550.00 1471 385,910 $ 25,550.00
1436 360,890 $ 25,550.00 1472 360,890 $ 25,550.00
1437 337,510 $ 25,550.00 1473 337,510 $ 25,550.00
1438 315,650 $ 25,550.00 1474 315,650 $ 25,550.00
1439 295,220 $ 25,550.00 1475 295,220 $ 25,550.00
1440 276,130 $ 25,550.00 1476 276,130 $ 25,550.00
1441 258,270 $ 25,550.00 1477 258,270 $ 25,550.00
1442 241,580 $ 25,550.00 1478 241,580 $ 25,550.00
1443 225,980 $ 25,550.00 1479 225,980 $ 25,550.00
1444 211,390 $ 25,550.00 1480 211,390 $ 25,550.00
1445 197,750 $ 25,550.00 1481 197,750 $ 25,550.00
1446 184,990 $ 25,550.00 1482 184,990 $ 25,550.00
1447 173,060 $ 25,550.00 1483 173,060 $ 25,550.00
1448 161,910 $ 25,550.00 1484 161,910 $ 25,550.00
23,773,260 $ 919,650.00 23,773,260 $ 919,650.00
25
EXHIBIT B
Working Account Wire Instruction
Xxxxx Fargo Bank
Edgewood Tahoe Branch
000 Xxx 00 X.X Xxx 0000
Xxxxxxxxx XX 00000
Ph. 000 000-0000 Fax 000 000-0000
Account ID information
Liberty Coal Energy Corp
Mailing address
Box 0000
Xxxxx Xxxx Xxxxx, XX 00000 XXX
Physical Address:
0000 Xxxxxx Xxxxx
Xxxxx Xxxx Xxxxx, XX 00000 XXX
PH. 000 000-0000 Fax 000 000-0000
ABA Number 000000000
For incoming domestic wires: the routing number is 000000000
Account Number 2527746529
Swift Code for foreign wires: XXXXXX0X
26
EXHIBIT C
Notice Addresses
If to Intermediary:
Elco Securities
Xxxxx Xxxxxx
Loyalist Plaza, Xxx Xxxxxx Blvd.
P.O. Box AB-20377
Xxxxx Harbor
Abaco, Bahamas
If to Investor(s):
(Send all correspondence to Intermediary with a copy to Catwalk Capital, LLC.)
If to Company:
Liberty Coal Energy
00 00xx Xxxxxx, Xxxxx 0000, Xxxxxx XX
Xxxxxx, Xxxxxxxx 00000
With a copy to:
Catwalk Capital, LLC
0000 XxXxxxxx Xx Xxx-0, #000
Xxxxxxxx, XX 00000
And Copy to:
Xx Xxxxxx
Box 0000
Xxxxx Xxxx Xxxxx, XX 00000
27
