Document:

Exhibit 10.1

                            OWSLEY PURCHASE AGREEMENT

This agreement to purchase the coal mineral rights and the surface rights on the
property specified herein is made effective this 24th day of August 2012 (the
"Agreement"). The Agreement is between and among Liberty Coal Energy, a Nevada
Corporation with an address at 99 18th street, Suite 3000, Denver, Colorado
80202 ("Buyer"), AMS Development LLC, a Kentucky Limited Liability Company, with
an address at 103Ohio Lane, London, KY 40741, ("AMS") and Colt Resources Inc, a
Nevada Corporation, with an address at 2756 N. Green Valley Parkway, Suite 225,
Henderson, NV 89014 ("Colt"). Collectively AMS and Colt are sellers (the "
Sellers"). Collectively, Buyer, AMS and Colt are the "Parties" and any one of
the entities is a "Party".

WHEREAS, Sellers own approximately 1,000 acres of surface rights and 100% of the
coal mineral rights on property located in Owsley County, KY (the "Property"),
which is fully described in the legal description in Schedule A attached hereto;
and

WHEREAS, AMS owns 50% of the coal mineral rights on the Property and Colt owns
100% of the surface rights and 50% of the coal mineral rights on the Property;
and

WHEREAS, Buyer has a surface coal lease on about 40% of the Property (the
"Lease"); and

WHEREAS, Buyer desires to purchase the Property and Sellers desire to sell the
Property; and

WHEREAS, Buyers and Seller desire to maintain the lease in an active state until
the Property is purchased by Buyer from Seller; and

WHEREAS, There is a first mortgage with a note of about $150,000 owed to Larry
Bruce Herald (the "Former Owner"); and

WHEREAS, Darrel Herald, an attorney in Jackson County, KY serves as an escrow
agent for payments made to the Former Owner; and

WHEREAS, the Parties desire to pay in full the note underlying the mortgage to
the Former Owner upon the closing of this Agreement.

NOW THEREFORE, The Parties hereby agree to the following terms and conditions
for the purchase of the Property by Buyer and sale of the Property by Sellers.

     1.   The Purchase price for the Property is $3,890,000, which was allocated
          among surface rights of the Property ("Surface Rights", Recoverable
          Coal Value on an "in place basis" and underground coal rights as
          follows:
          a.   Surface Rights of the Property, independent of coal revenue:
               $600,000 or about $600/acre.

                                       1
<PAGE>
          b.   Recoverable coal value: $2,700,000 based on an estimated
               3,600,000 tons in place at $0.75, plus $150,000 payment on first
               mortgage to Former Owner.
          c.   Underground coal rights: $440,000 based on an estimated 2,200,000
               tons (($0.20/ton).
          d.   Total Purchase Price: $3,450,000.

     2.   The Purchase Price of $3,890,000 is payable through a combination of
          cash/promissory note ($3,450,000) and Buyer common shares ($440,000)
          as specified herein.
          a.   The Cash component: A $500,000 cash payment shall be made at
               closing. Said cash payment shall be used first to retire the
               mortgage note to the Former Owner, with the balance distributed
               to AMS and Colt as shall be specified in Schedule B.
          b.   The Promissory Note component ($2,950,000), collateralized by a
               mortgage on the Property, which shall be paid on the following
               schedule.
               i.   Monthly payments equal to 5% of the gross coal revenue
                    defined as it is in the current lease by Liberty of a
                    portion of the property. Said monthly payments shall
                    continue until the Note is paid in full.
               ii.  A $650,000 cash payment shall be due and payable on the
                    six-month anniversary of the purchase Closing. Interest on
                    the unpaid portion shall increase to 9% on this date.
               iii. The unpaid balance on the Note shall be due and payable on
                    the eighteen-month anniversary of the purchase closing date.
               iv.  There shall be no penalty for prepayment of the Note.
               v.   The Promissory Note may be assigned for payment to a third
                    party in order to facilitate conversion of debt to equity
                    for Liberty. Said assignment is subject to the approval of
                    Colt, which shall not be unreasonably withheld. The
                    collateral for the Promissory Note shall remain unchanged if
                    the Promissory Note is assigned to a third party for
                    payment.
          c.   The Common Stock component: Buyer shall issue Sellers $440,000 in
               common stock value at Closing. The formula for this valuation
               shall be mutually agreed to by Sellers and Buyer at Closing after
               the capital structure of buyer is known, following ongoing
               efforts to rise capital and reorganize.

     3.   Status of the Lease through the Closing of the Agreement. The Lease
          shall remain in full force and effect, as entering into this Agreement
          does not amend the Lease. When the purchase Agreement is closed, the
          Lease shall become null and void as the ongoing relationship between
          Buyer and Sellers shall then be governed by the terms of this
          Agreement. Although the Lease is not amended, the Parties hereby agree
          to the following as pertains to the Lease minimum payments.
          a.   The Lease required $20,000 monthly payments, with provisions for
               a payment holiday for the May 20, 2012 and June 20, 2012 payments

                                       2
<PAGE>
               provided that certain mining milestones were met. The May and
               June payments were not made and the mining milestones were not
               performed.
          b.   The Sellers, who are also the recipients of the monthly minimum
               payments, agree to allow the Buyer to retain the May and June
               payment holiday even though the mining milestones were not met
               provided that Buyer resumes the monthly minimum payments as
               follows.
               i.   Buyer shall pay the $20,000 minimum payments due under the
                    terms of the Lease for July 20, 2012 through the Close of
                    this Agreement. Said payments shall be treated as Lease
                    payments per the term of the Lease Agreement if this
                    Agreement does not close.
               ii.  Upon the Close of this Agreement, the total amount paid for
                    the minimum payments from July to the Close shall be
                    credited against the principal amount of the Promissory Note
                    ($2,950,000).
               iii. The minimum payments shall be distributed according to the
                    schedule on Schedule C.

     4.   The Close for this Agreement shall occur when the Buyer completes a
          funding sufficient to make the initial $500,000 cash payment. The
          Parties anticipate that the Close shall be on or before December 1,
          2012; however, as long as Buyers make all monthly minimum payments
          referenced in 3.b.i., the Close date can be extended to March 1, 2013,
          provided the Buyer also performs the milestones referenced in the
          Lease to qualify for the minimum payment holiday. In the event that
          the Buyer fails to make the monthly payments and meet the Lease
          milestones by March 1, 2013, the Sellers shall have the right, but not
          the obligation, to terminate the Lease and the purchase Agreement. If
          the Sellers terminate the Lease and the Agreement as permitted, the
          Sellers shall retain all monies paid as liquidated damages and the
          Buyers shall assign the mining permit to Sellers. If the Buyers make
          all monthly payments and meet the mining milestones by March 1, 2013,
          the Buyers may continue to mine the property under the terms of the
          Lease Agreement.

     5.   The Parties shall each pay there own expenses as incurred under the
          terms of this Agreement. The closing cost associated with the transfer
          of the property from Sellers to Buyer shall be prorated as is
          customary for transactions of this type.

     6.   This Agreement shall not create a partnership, joint venture, agency,
          employer/employee or similar relationship among the Parties.

     7.   The rights and duties of each Party under this Agreement are personal
          and may not be assigned or delegated without prior written consent of
          the other Parties.

     8.   Each Party hereby indemnifies the other Parties and their officers,
          directors, shareholders, employees, affiliates, subsidiaries, agents
          and assigns, and holds the other Parties, and their officers,
          directors, shareholders, employees, affiliates, subsidiaries, agents
          and assigns, harmless from, any losses, liabilities, obligations,
          damages, costs or expenses (including without limitation, reasonable

                                       3
<PAGE>
          attorneys' fees) resulting from or relating to any negligent acts or
          omissions by a Party in performing their respective Services under
          this Agreement, or any breach of any representation, duty, covenant or
          obligation hereunder of each Party or any owner, officer, director or
          employee of each Party. This Section 8 shall survive termination or
          expiration of this Agreement.

     9.   This Agreement and all matters relating to this Agreement shall be
          governed by and construed in accordance with the law of the State of
          Nevada applicable to contracts made and to be wholly performed within
          such state. Any dispute or claim between the parties hereto arising
          out of this Agreement including, but not limited to, any dispute
          regarding the formation of this Agreement, their validity,
          interpretation, effect, performance or breach (an "Arbitrable
          Dispute") shall be submitted to and resolved by arbitration in Clark
          County, Nevada before a panel of three (3) arbitrators in accordance
          with the commercial rules then obtaining of the American Arbitration
          Association ("AAA"). If the parties are unable to reach agreement on
          the selection of the arbitrators, all three (3) will be selected
          pursuant to the rules of the AAA. The arbitrators in any Arbitrable
          Dispute shall not have authority to modify or change this Agreement in
          anyrespect. The prevailing party in any such Arbitrable Dispute shall
          be awarded its costs, expenses and reasonable attorneys' fees incurred
          in connection with the arbitration. The arbitrators' decision and/or
          award will be fully enforceable and subject to an entry of judgment by
          any Nevada court of competent jurisdiction

     10.  Except as otherwise provided herein, all notices that either party is
          required or may desire to give the other party hereunder shall be in
          writing and shall be sufficiently given if (i) delivered in person,
          (ii) sent by registered or certified mail, postage prepaid, return
          receipt requested or (iii) delivered by prepaid overnight courier
          (e.g. Federal Express, U.S. Post Office Express Mail, United Parcel
          Service). All such notices shall be addressed to each party as
          follows:

                  Liberty Coal Energy
                  99 18th St. Suite 3000
                  Denver, CO  80202
                  Mr. Ed Morrow CEO
                  Mr. Robert Malasek, CFO

                  Colt Resources Inc
                  2756 N. Green Valley Parkway, Suite 225
                  Henderson, NV 89014
                  Mr. Johnny Thomas, CEO

                                       4
<PAGE>
                  AMS Development LLC
                  103 Ohio Lane
                  London, KY 40741
                  Mr. David Altizer, Member

                  AMS Development LLC
                  % Black Hollow Mining LLC
                  1426 Hidden Timber Drive
                  Pittsburg, PA 15220
                  Mr. Glenn Sitter, Member

                  AMS Development LLC
                  P.O. Box 902
                  Bonnyman, KY 41719
                  Mr. Pat Mitchell, Member

          All notices shall be deemed given when received in the case of
          delivery in person or by prepaid overnight courier, or within three
          (3) days of posting in the United States mail in case of notice by
          registered or certified mail, postage prepaid, return receipt
          requested.

     11.  No Party may assign this Agreement or any rights or obligations
          hereunder, without the prior written consent of the other Parties;
          except as permitted herein.

     12.  This Agreement constitutes the entire agreement with respect to the
          subject matter hereof, supersedes any prior or contemporaneous
          agreement among or between the Parties, whether written or oral, with
          respect to the subject matter hereof and may be modified or amended
          only by a writing signed by the Parties hereto.

     13.  In the event of a breach or threatened breach of any of the provisions
          of this Agreement by any Party, the other Parties shall be entitled to
          injunctive relief against the offending Party. Nothing herein shall be
          construed as prohibiting any Party from pursuing any other remedies
          available to it, legal or equitable, for such breach or threatened
          breach, including the recovery of damages from any Party. This Section
          13 shall survive termination of this Agreement.

     14.  Any provision of this Agreement which is held to be prohibited,
          invalid or unenforceable in any jurisdiction shall, as to such
          jurisdiction, be ineffective to the extent of such prohibition,
          invalidity or unenforceability without invalidating the remaining
          provisions thereof; that any such prohibition, invalidity or
          unenforceability in any jurisdiction shall not invalidate or render
          unenforceable such provision in any other jurisdiction; and that any
          prohibited, invalid or unenforceable provision shall be deemed,
          without further action, modified, amended and limited solely to the
          extent necessary to render the same valid and enforceable.

                                       5
<PAGE>
     15.  A waiver by a Party of any term or condition of this Agreement in any
          instance shall not be deemed or construed to be a waiver of such term
          or condition for the future, or of any subsequent breach thereof. All
          rights, remedies, undertakings, or obligations contained in this
          Agreement shall be cumulative and none of them shall be in limitation
          of any other right, remedy, undertaking or obligation.

     16.  Section headings contained herein are solely for convenience and are
          not in any sense to be given weight in the construction of this
          Agreement.

     17.  This Agreement (or the signature pages hereof) may be executed in any
          number of counterparts; all such counterparts shall be deemed to
          constitute one and the same instrument; and each of said counterparts
          shall be deemed an original hereof.

                           [SIGNATURE PAGE TO FOLLOW]

                                       6
<PAGE>
LIBERTY COAL ENERGY

/s/ Ed Morrow
---------------------------------------------
Ed Morrow, CEO & President

COLT RESOURCES INC.

/s/ Johnny R. Thomas
----------------------------------------------
Johnny R. Thomas, CEO & President

AMS DEVELOPMENT LLC

/s/ David Altizer
----------------------------------------------
David Altizer, Member

/s/ Glenn Sitter
---------------------------------------------
Glenn Sitter, Member

/s/ Pat Mitchell
---------------------------------------------
Pat Mitchell, Member

                                       7Exhibit 10.2

                                             Memorandum of Terms Delivery No: 01
                                          Memorandum of Terms Identification No:
                                                             MOT 530362-102 LBTG

                           [LIBERTY COAL ENERGY LOGO]

                      This Confidential Memorandum of Terms
                             Ref #: 530362-102 LBTG

                               Is being issued by:
                             Mr. Robert Malasek, CFO
                         Liberty Coal Energy ("Company")
                      99 18th Street, Suite 3000, Denver CO
                             Denver, Colorado 80202
                              Phone: 1-760-448-1146
                      Website: http://www.libertycoal.com/
                              Public Market: OTCBB
                                  Symbol: LBTG
                               Cusip#: 530362-102

                                       To:
                          Investors listed in Exhibit A
                                 Issuance Date:
                                 August 17, 2012
<PAGE>
This  is an all or  none  offer  to  sell  securities  of  Liberty  Coal  Energy
("Company") to those  Investor(s)  executing  copies of this Memorandum of Terms
(the "MOT"). Should the full offer not be committed to within 7 business days of
the Company  execution  date, this MOT will be null and void. This Memorandum of
Terms is  conditional  on obtaining  appropriate  legal  opinions and signing of
completed offering documents  ("Closing  Documents" as also described in Section
II.2).  This document  will be followed by  appropriate  offering  documents and
other agreements between the parties should this full sales offer be executed in
its entirety.

THE OFFER AND SALE OF THE COMMON SHARES AND WARRANTS ("UNITS")  DESCRIBED HEREIN
ARE NOT BEING ISSUED UNDER A  REGISTRATION  THROUGH THE U.S.  SECURITIES  ACT OF
1933, AS AMENDED, OR THROUGH  REGISTRATION WITH ANY STATE'S SECURITIES ACTS, BUT
ARE  BEING  ISSUED  IN  RELIANCE  UPON  AVAILABLE  EXEMPTIONS  FROM  SUCH  ACTS'
REGISTRATION  REQUIREMENTS.  UNITS PURCHASED HEREUNDER MAY BE SUBJECT TO CERTAIN
RESTRICTIONS ON SALE, TRANSFER, HYPOTHECATION OR OTHERWISE. THESE UNITS HAVE NOT
BEEN APPROVED OR DISAPPROVED  BY THE  SECURITIES AND EXCHANGE  COMMISSION OR ANY
STATE SECURITIES COMMISSION,  AND NO SUCH COMMISSION HAS PASSED UPON OR ENDORSED
THE MERITS OF THESE UNITS OR THE  ACCURACY OR  ADEQUACY OF THE  MEMORANDUM.  ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL  OFFENSE.  THIS MEMORANDUM DOES NOT
CONSTITUTE  AN OFFER TO SELL OR A  SOLICITATION  OF AN OFFER TO  PURCHASE IN ANY
JURISDICTION IN WHICH SUCH AN OFFER OR  SOLICITATION IS NOT AUTHORIZED.  CHANGES
IN INFORMATION  OCCURRING  AFTER THE DATE OF THIS MEMORANDUM ARE NOT NECESSARILY
REFLECTED HEREIN. PURCHASE OF THESE UNITS INVOLVES A HIGH DEGREE OF RISK.

US NOTICE:  Any  dissemination  of these possible  terms to the general  public,
distribution within the borders of the United States of America, distribution to
United States citizens abroad,  or to other funding or investment  sources could
void any exemptions for Private  Placement  status under US Securities  Law. The
Company and Investor(s)  agree that no public  announcements or dissemination of
any  information  to any  source  other  than  the  Company,  the  Advisor,  the
Intermediary or the Investor(s)  without an opinion from legal counsel attesting
that such  announcement  or  dissemination  will not void the private  placement
exemption or violate  Regulation D, Section 4(2) or Section 5 of the  Securities
Acts of the U.S..

                                       2
<PAGE>
SECTION I. INVESTMENT ASSUMPTION & DEFINITIONS
1. INVESTMENT ASSUMPTIONS:
Company:                            Liberty Coal Energy
Anticipated Closing Date:           To be determined.
Current Capital Structure:          (See Exhibit B)
Pre-Money Valuation:                $13,137,963
Share Consolidation Necessary:      (15-1) See Business Milestones

ADDITIONAL ASSUMPTIONS:

1. If any  consolidation  or split of shares is  contemplated by this Agreement,
the  terms,  prices  and  amounts  listed  in  Sections  II  through V are to be
considered post share adjustment.
2. Class of Security  and Series of Security  shall be defined in terms of their
Share  Attributes,  and unless specified as a Series of a Class of Share,  shall
encompass the whole Class of Securities.
3. Ownership percentages,  save for the final Share structure, are calculated on
the issued and outstanding at the time of calculation and not on a fully diluted
basis. The Final Share structure is calculated on the fully diluted basis.

2. DEFINITIONS:
BREAKOUT:  That separation of cash transfer from the Cash Account to the Working
Account following attainment of all requirements for such Breakout.

CASH  ACCOUNT:  That  account with the  Intermediary  in the name of the Company
which  Investor(s) cash was delivered and such cash  distribution to the Working
Account is managed by the Intermediary.

CLOSE:  That  statement by the  Intermediary  which formally puts the investment
into effect  following:  receipt by Intermediary  of all  Investor(s)  cash, all
Company shares to be purchased (Fully registered or with an exchange  agreement)
and all  signatures  on all  documents  required to prove full  agreement to the
terms of the investment.

CORPORATE UNDERTAKING:  That letter to the Intermediary stating that the Company
has delivered all necessary  documents and taken all necessary corporate actions
and requesting that the Intermediary close the transaction.

INTERMEDIARY:  That institution responsible for closing, managing and monitoring
the  Cash  Breakouts  and  the  Use Of  Proceeds  ("UOP")  through  the  Account
Management Agreement ("AMA").

INVESTOR(S): Refers to any and all purchasers of this offering.

OFFERING DOCUMENTS: The Unit Subscription Agreement ("USA"),  detailing the sale
of  securities,  the Account  Management  Agreement  ("AMA") and any  additional
agreements   necessary  to  complete  the  transaction.   The  AMA  details  the
instructions  for the  Intermediary  to manage  the  distribution  of assets and
monitor the milestones and requirements.

UNIT:  That  combination  of Common  Shares and Warrants to purchase  additional
Common Shares which encompass the securities of the transaction.

                                       3
<PAGE>
USE OF PROCEEDS:  That capital inflow and outflow which includes the utilization
of the capital from this offering to create valuation.

WORKOUT:  That period  where each  Breakout is  delivered  from the Company Cash
Account to the Company Working  Account.  Workouts assess  deliverable  Breakout
Cash as per Market metrics as described in Section II.6. The  Intermediary  will
monitor and account for those  requirements  necessary to calculate  the release
amounts during each Workout.  A Workout is a maximum 30 calendar day, minimum 20
day market trading period.

WORKING ACCOUNT:  That domestic  unrestricted  account designated by the Company
for  cash to be  distributed  for use by the  Company  following  attainment  of
Breakout, Workout and Business Milestone requirements.

WORKOUT PERIOD:  A Workout Period is a maximum of 30 days. If the Workout is not
fully delivered during the current Breakout Period,  additional Workout Periods,
each of 30 days,  would  be  employed.  A  Workout  Period  may be as short as 1
trading day.

SECTION II. INVESTMENT
1. OFFER TERMS:
This is an "All or None" offer to sell securities through a private placement of
capital  into Units of Common  Shares  and  Warrants  for  Common  Shares of the
Company.  This Private  Placement  will rely upon the US Securities  Act of 1933
Sections  3(b) or 4(2) for its  structure  and on Regulation D for its exemption
from  registration.  An S-1 registration or registrations to register the shares
of this  offering  would be required.  Investor(s)  will purchase that number of
"Units" of securities as detailed in their signature  block.  Each Unit shall be
comprised of that number of Common Shares and Warrants as described in Figure 1:

Figure 1. (Unit Structure)

<TABLE>
<CAPTION>
<S>                       <C>                    <C>                           <C>                     <C>
               OFFERING TOTAL                                                                            UNIT
-----------------------------------------------------------------------                            ---------------
UNITS                           TOTAL UNIT PURCHASE                                                PRICE PER. UNIT
-----                           -------------------                                                ---------------
1000                               $ 9,196,500.00                                                   $ 9,196.50

         TOTAL COMMON SHARES    DILUTION EQUITY %    COMMON AVG. PRICE
         -------------------    -----------------    -----------------
              237,732,600            44.30%               $ 0.04

NUMBER OF INVESTORS       TOTAL WARRANTS       TOTAL WARRANT EXERCISE      AVG. WARRANT PRICE    COMMON SHARES PER UNIT
-------------------       --------------       ----------------------      ------------------    ----------------------
     10                    250,095,421            $ 18,393,000.00               $ 0.11                  237,733

COMMON TO REGISTER(1)       BREAKOUTS              FULL DILUTION %(2)                              WARRANTS PER UNIT(3)
---------------------       ---------              ------------------                              ------------------
   77,263,714                  36                       61.05%                                            250,095
</TABLE>

Notes:

1.   Assumes current  outstanding  common,  common for first 6 Breakouts and VAM
     for first 2 quarters. Discussion with counsel is advised.
2.   Includes  all  equity  and  warrants  and  assumes  no sales of  shares  by
     Investors.
3.   Warrants  carry rights to purchase that number of registered  common shares
     as the Warrant  Certificate shows in warrant rights.  Each Unit carries the
     rights to purchase that amount of registered common shares in those amounts
     and at those prices as specified in Section III Figure 8, Column 2 and 3.

                                       4
<PAGE>
2. CLOSING DOCUMENTS:
Prior to funds  deposit,  the Due  Diligence  and Closing  Agenda  items must be
completed ("Closing Agenda" shall be completed following full commitment of this
Memorandum of Terms.).  The Closing Agenda may include the following  items, but
may include additional items as Investor(s) or Company counsel calls for:

OFFERING DOCUMENTS (USA, AMA, CAA AND ANY OTHER NECESSARY DOCUMENTS)
ACCOUNT DOCUMENTATION
OFFICIAL CORPORATE RESOLUTIONS
CORPORATE UNDERTAKING
COMPLIANCE ATTORNEY UNDERTAKING
ATTORNEY OPINION ON CORPORATE ACCEPTANCE AND UNDERTAKING
COPIES OF SHARE CERTIFICATES AND OPINION LETTERS

3. INVESTMENT CLOSE:
Investor(s)  cash  will be  placed  into an  account  with  an  Intermediary  of
Investor(s)  choosing.  The Company will deposit the Units of Common  Shares and
Warrants in certificate form with the Intermediary.  Once all closing items have
been  executed and are in place,  the  Intermediary  will transfer the Investors
cash to the account of the Company with the Intermediary,  (the "Cash Account"),
and will  deposit  the  share  certificates  in each  Investor(s)  account  (the
"Close").

4. REGISTRATION:
Following  Close,  the Company will perform a shareholder  Registration  of that
number of  Preferred  and the  accompanying  underlying  shares as  described in
Figure 1 "Common to Register",  see note 1, to cover at a minimum,  the first 12
Breakouts,  no later than the time frame  requested in Section  IV.10 under Item
"Registration".  Additional  Registrations  to cover  the  remaining  underlying
common will later be filed to provide  continuity to the Breakout Schedule found
in II.5 below.

5. CASH BREAKOUTS:
Once those requirements  detailed in this Section II.2-4 have been accomplished,
apportioned  "Breakouts"  of cash  from  the Cash  Account  would be made to the
Company's Working Account according to the Breakout requirements as described in
Section  II.5-8.  These  Breakouts  of cash are divided  according to the Use of
Proceeds  (UOP).  The total  offering is divided  into 36  Breakouts  of Cash as
described in Figure 2. Breakouts must always be delivered in numerical order.

                                       5
<PAGE>
Figure 2. (Breakout Detail)

                            OFFERING BREAKOUT DETAIL
<TABLE>
<CAPTION>
Breakout #   Break out Amount   Common Shares    Cash Holdback    Acct Fee Monthly   Acct Fee Annual   Cash to Company
----------   ----------------   -------------    -------------    ----------------   ---------------   ---------------
<S>           <C>               <C>                <C>                <C>               <C>              <C>
     1         $ 255,375         17,025,000         $ 5,000            $ 125             $ 250            $ 250,000
     2         $ 255,375         15,906,400         $ 5,000            $ 125             $ 250            $ 250,000
     3         $ 255,375         14,862,100         $ 5,000            $ 125             $ 250            $ 250,000
     4         $ 255,375         13,886,900         $ 5,000            $ 125             $ 250            $ 250,000
     5         $ 255,375         12,976,400         $ 5,000            $ 125             $ 250            $ 250,000
     6         $ 255,375         12,126,100         $ 5,000            $ 125             $ 250            $ 250,000
     7         $ 255,375         11,332,100         $ 5,000            $ 125             $ 250            $ 250,000
     8         $ 255,375         10,590,600         $ 5,000            $ 125             $ 250            $ 250,000
     9         $ 255,375          9,898,000         $ 5,000            $ 125             $ 250            $ 250,000
    10         $ 255,375          9,251,200         $ 5,000            $ 125             $ 250            $ 250,000
    11         $ 255,375          8,647,000         $ 5,000            $ 125             $ 250            $ 250,000
    12         $ 255,375          8,082,600         $ 5,000            $ 125             $ 250            $ 250,000
    13         $ 255,375          7,559,000         $ 5,000            $ 125             $ 250            $ 250,000
    14         $ 255,375          7,066,300         $ 5,000            $ 125             $ 250            $ 250,000
    15         $ 255,375          6,605,900         $ 5,000            $ 125             $ 250            $ 250,000
    16         $ 255,375          6,175,700         $ 5,000            $ 125             $ 250            $ 250,000
    17         $ 255,375          5,773,900         $ 5,000            $ 125             $ 250            $ 250,000
    18         $ 255,375          5,398,300         $ 5,000            $ 125             $ 250            $ 250,000
    19         $ 255,375          5,047,400         $ 5,000            $ 125             $ 250            $ 250,000
    20         $ 255,375          4,719,500         $ 5,000            $ 125             $ 250            $ 250,000
    21         $ 255,375          4,413,100         $ 5,000            $ 125             $ 250            $ 250,000
    22         $ 255,375          4,126,700         $ 5,000            $ 125             $ 250            $ 250,000
    23         $ 255,375          3,859,100         $ 5,000            $ 125             $ 250            $ 250,000
    24         $ 255,375          3,608,900         $ 5,000            $ 125             $ 250            $ 250,000
    25         $ 255,375          3,375,100         $ 5,000            $ 125             $ 250            $ 250,000
    26         $ 255,375          3,156,500         $ 5,000            $ 125             $ 250            $ 250,000
    27         $ 255,375          2,952,200         $ 5,000            $ 125             $ 250            $ 250,000
    28         $ 255,375          2,761,300         $ 5,000            $ 125             $ 250            $ 250,000
    29         $ 255,375          2,582,700         $ 5,000            $ 125             $ 250            $ 250,000
    30         $ 255,375          2,415,800         $ 5,000            $ 125             $ 250            $ 250,000
    31         $ 255,375          2,259,800         $ 5,000            $ 125             $ 250            $ 250,000
    32         $ 255,375          2,113,900         $ 5,000            $ 125             $ 250            $ 250,000
    33         $ 255,375          1,977,500         $ 5,000            $ 125             $ 250            $ 250,000
    34         $ 255,375          1,849,900         $ 5,000            $ 125             $ 250            $ 250,000
    35         $ 255,375          1,730,600         $ 5,000            $ 125             $ 250            $ 250,000
    36         $ 255,375          1,619,100         $ 5,000            $ 125             $ 250            $ 250,000
             -----------        -----------       ---------          -------           -------          -----------
   TOTAL     $ 9,193,500        237,732,600       $ 180,000          $ 4,500           $ 9,000          $ 9,000,000
             ===========        ===========       =========          =======           =======          ===========
</TABLE>

In order for a Breakout period to commence,  freely traded Common Shares must be
on deposit with the Intermediary. Breakout Accounting will commence once deposit
and  clearance of the  underlying  free trading  common  shares into  electronic
street  form  is  verified  by  the  Intermediary.  These  actions  may  require
additional   paperwork   from  the  Company  and  opinions  from  the  Company's
attorney's.

(ALL INVESTED  AMOUNTS WOULD BE SUBJECT TO DEDUCTIONS OF ACCOUNT  MANAGEMENT AND
INVESTOR(S)  EXPENSES (INCLUDING LEGAL,  ACCOUNTING,  ACCOUNT MANAGEMENT,  WIRE,
TRANSFER  AND BANK  FEES) AND  PAYMENTS  PRIOR TO  TRANSFER  FROM THE  COMPANY'S
CAPITAL  ACCOUNT TO THEIR WORKING FUNDS ACCOUNT.  ANY TRANSFERS OF CAPITAL WOULD
HAVE WIRE AND OR CHECK COSTS AND FEES  DEDUCTED FROM THEM.  THESE  TRANSFER FEES
MAY VARY DEPENDING ON THE SIZE AND DESTINATION OF THE TRANSFER.)

6. BREAKOUT MARKET METRIC REQUIREMENTS:
Volume of sales at or above the  Minimum  Bid Price will  release  cash from the
account. Figure 3 lists each Breakouts Minimum Bid Price and the Release Volume,
(the total volume at or above the Minimum Bid Price necessary to release 100% of
the Breakout), which Breakout cash amounts were previously shown in Figure 2.

                                       6
<PAGE>
Figure 3. (Market Metric Requirements)

                                 MARKET METRICS
<TABLE>
<CAPTION>
Breakout #    Bid Price Minimum     Release Volume     Breakout #    Bid Price Minimum    Release Volume
----------    -----------------     --------------     ----------    -----------------    --------------
<S>              <C>                <C>                  <C>            <C>               <C>
    1              $ 0.0300           113,500,000          19             $ 0.0932          33,649,333
    2              $ 0.0320           106,042,667          20             $ 0.0993          31,463,333
    3              $ 0.0340            99,080,667          21             $ 0.1057          29,420,667
    4              $ 0.0362           925,879,333         222             $ 0.1126          27,511,333
    5              $ 0.0386            86,509,333          23             $ 0.1199          25,727,333
    6              $ 0.0411            80,840,667          24             $ 0.1277          24,059,333
    7              $ 0.0438            75,547,333          25             $ 0.1360          22,500,667
    8              $ 0.0466            70,604,000          26             $ 0.1448          21,043,333
    9              $ 0.0496            65,986,667          27             $ 0.1542          19,681,333
    10             $ 0.0529            61,674,667          28             $ 0.1643          18,408,667
    11             $ 0.0563            57,656,667          29             $ 0.1749          17,218,000
    12             $ 0.0600            53,884,000          30             $ 0.1863          16,105,333
    13             $ 0.0639            50,393,333          31             $ 0.1984          15,065,333
    14             $ 0.0680            47,108,667          32             $ 0.2113          14,092,667
    15             $ 0.0724            44,039,333          33             $ 0.2255          13,183,333
    16             $ 0.0775            41,171,333          34             $ 0.2397          12,332,667
    17             $ 0.0822            38,492,667          35             $ 0.2553          11,537,333
    18             $ 0.0875            35,988,667          36             $ 0.2719          10,794,000
</TABLE>

7. BREAKOUT WORKOUT PROVISION:
Each Breakout may be divided up into 1 or more Workouts to divide the accounting
periods into 30 calendar day,  (Minimum 20 trading day),  periods.  Breakouts of
cash will be Worked  Out,  (the  "Workout"),  of the Cash  Account  as price and
volume meeting or exceeding the market  metrics found in Figure 3 occur.  Should
the price or volume be lacking so as not to deliver  the full  Breakout of cash,
the  Breakout  may  utilize as many  Workout  periods as is  necessary  to fully
deliver  the  Breakout  Cash  Amount.  Each  Workout  will  begin as soon as the
previous Workout schedule is exhausted.

Should a Workout  fully  account for full  delivery of the Breakout  Cash Amount
prior to the maximum calendar or trading days, the next Breakout would start the
following  trading day provided that all items  necessary to start such Breakout
as described in Section II.2-4, Section II.10-11 and any items called for in the
Closing Documents, have previously been completed.

Breakout Cash Workout metrics will be accounted as follows:

        Accountable Volume = Total Trading Volume above Minimum Bid Price
              Accountable Volume X 15% = Available Uncovered Shares
      Available Uncovered Shares / Breakout Common Shares = Share Release %
          Share Release % X Breakout Cash Amount = Workout Release Cash

So if given the following  theoretical  parameters the release for a theoretical
Workout Period would be as follows:

Figure 4. (Theoretical Workout for Breakout 1)

                               THEORETICAL WORKOUT
<TABLE>
<CAPTION>
               Breakout                        Theoretical          Available                             Workout
Breakout #   Cash Amount   Common Shares    Accountable Volume   Uncovered Shares    Share Release %    Cash Release
----------   -----------   -------------    ------------------   ----------------    ---------------    ------------
<S>          <C>            <C>               <C>                  <C>                  <C>             <C>
    1         $ 255,375      17,025,000        56,750,000           8,512,500            50.00%          $127,687.50
</TABLE>

8. BREAKOUT PRICE WORKOUT:
PRICE WORKOUT FOR BID PRICING GREATER THAN BREAKOUT MINIMUM BID PRICE
In the event the  Average Bid Price for the 30 day  Workout  Period,  defined as
where the  cumulative  bid prices  averaged  daily,  is greater than 130% of the
Breakout  Minimum Bid Price  metric,  as described in Section II.6 Figure 3, the
Average  Bid  Price  will  adjust  the  Breakout   Common  Share  volume  metric
requirement as follows:

                                       7
<PAGE>
Breakout (Workout) Cash Amount / Avg. Bid Price = Breakout Common Shares

This Breakout  Common Share metric  adjustment does not impact the actual shares
purchased  by the  Investor(s)  for that  Breakout,  which will  remain at their
original amount as described in Section II.5 Figure 2.

PRICE WORKOUT FOR PRICING LESS THAN BREAKOUT MINIMUM BID PRICE
A pool of additional  shares would be deposited with the Intermediary to be held
for  use as the  Pricing  Workout  Pool,  (the  "PWP").  The PWP  would  provide
additional  shares to make up additional  shares  necessary in the event pricing
does not meet the  expected  levels.  The  existence  of the PWP will  allow the
offering to go ahead in a smooth and timely manner.

PWP DRAW STEPS
1. Company determines pricing for the Breakout
2. Advisor redrafts Breakout structure utilizing the new Breakout Bid Price
3. Amendment to the Original USA and AMA signed by all parties
4. Amendment delivered to Intermediary to adjust current instructions

PWP CAVEATS
1. No Investor  from this  offering  shall control more than 9.9% of the company
common shares at any given time
2. PWP Shares to be held in the  Intermediaries  name in Certificate  form until
drawn
3. Neither Investors nor Intermediary shall vote PWP shares until drawn
4. PWP shall in no event be larger than 30% of the total offering share amount
5. PWP shares are added to the end of the offering  timeline,  current  Breakout
shares will be drawn first from:
    a. Registered Shares
    b. 144 Eligible Shares
6.  Should  the PWP be drawn in the last 6  Breakouts,  a  registration  must be
completed to provide free trading shares

The PWP will be funded for the amount of shares described in Figure 5:

Figure 5. (Pricing Workout Pool)

PWP Preferred            PWP Common
-------------            ----------
  71,319,780             71,319,780

9. CASH FLOW WATERFALL DURING WORKOUT:
Capital to Company  during the  Workout  period  must be spent in the  following
order:
I.   EXPENSES, FEES AND CASH HOLDBACK PAYABLE
II.  PUBLIC AND INVESTOR RELATIONS AS DESCRIBED IN THE USE OF PROCEEDS
III. DEBT SERVICE
IV.  USE OF PROCEEDS

10. ADDITIONAL TERMS:
The company will be in compliance  with the following  terms prior to and during
all Breakouts and through the period of warrant exercise.  If such terms are out

                                       8
<PAGE>
of compliance,  the company agrees it will not have access to the funds in their
account  until the  compliance  issue is  remedied or a  workaround  is mutually
agreed to with the Investor(s).

i.  Anti  share  consolidation  provision  whereby  the  company  agrees  not to
consolidate  its issued  preferred or common shares without the agreement of the
Investor(s)  in this  offering for a period of 48 months or 12 months  following
the complete exercise of the warrants whichever is the longer time period.

ii. Corporate compliance with applicable jurisdictional regulations.

(Section II.10 Continued)
iii.  The  Company  agrees to provide  and  maintain  full  corporate  authority
evidenced by:
     a.   Certificate  of Good  Standing or Proof of Corporate  Compliance  with
          State authority.
     b.   Corporate  Undertaking secured by a Corporate  Resolution  authorizing
          the issuance of the shares and  acceptance of the offering  documents.
          Such resolution must be suitable to the  Intermediary  for purposes of
          share deposit.
     c.   Proper filings of Corporate Capital Structure  alterations such as 14C
          securities filings, state filings and shareholder votes if required by
          state regulations or corporate bylaws.

iv.  Company  will file and maintain  fully  reported  financials  to the proper
regulatory  agency so as to maintain fully reporting status with the exchange or
regulatory  authority they are subject to during all Breakout  periods and until
all Warrants are exercised or expired.

v. Company will at all times be publicly traded on an exchange acceptable to the
investor(s),  or will  upgrade to such  exchange as required.  Minimum  exchange
requirements are the US Over the Counter Market by the 13th Breakout.

vi. The Company agrees not to perform any sale,  merger or spin-off of more than
5% of the underlying  assets (Including  Intellectual  Property) or revenue base
for a period of 1 year  following  completion  of full  capital  delivery by the
Intermediary unless prior written approval has been obtained from the investors.

vii. The Company will be restricted from performing any equity or debt offerings
which have, or would have, a negative  effect on the valuation of the underlying
shares  without the approval of the  Investor(s).  Any  offering,  investment or
loan, will be cleared with Investor(s) prior to acceptance. Catwalk Capital, LLC
(the  Investor(s)  "Advisor")  will be the  arbiter  of the impact of any equity
offering.  As such, the Company must inform and communicate with the Advisor the
terms,  conditions  and covenants of any such  offering and await  acceptance of
terms  individually  by the  Investor(s).  Acceptance  will not be  unreasonably
withheld,  but the offering  must operate in the best  interests of  shareholder
value creation.

viii.  The  management  team of the  Company  will be issued a Value Added Model
("VAM") as shown in Figure 6. The VAM will bonus shares on a quarterly basis for
performance of corporate  valuation.  Each series of VAM must be preceded by the
fulfillment  (Delivery or exercise) of either the completed  Breakout or Warrant
Series exercise for that VAM  disbursement  period as detailed in Figure 6. Such
bonus pool will be divided as the Company sees fit, but a complete  plan will be
approved by the Investor(s),  and reported to the market.  Bonus amounts will be
paid quarterly as follows:

                                       9
<PAGE>
(Section II.10.viii Continued)
Figure 6. (Value Added Model)

<TABLE>
<CAPTION>
Value Added Model          % of Breakout Shares           100%              Warrant               Common
Nreakout Bonus Period         Pref. Shr. Amt.       Common Shr. Amt.      Series VAM            Shares 100%
---------------------         ---------------       ----------------      ----------            -----------
<S>                            <C>                   <C>                                       <C>
Breakout 1-3                     477,935               47,793,500             A-C                48,021,165
Breakout 4-6                     389,894               38,989,400             D-F                39,754,278
Breakout 7-9                     318,207               31,820,700             G-I                32,910,543
Breakout 10-12                   259,808               25,980,800             J-L                27,244,963
Breakout 13-15                   212,312               21,231,200             M-O                22,565,758
Breakout 16-18                   173,479               17,347,900             P-R                18,681,042
Breakout 19-21                   141,800               14,180,000             S-U                15,465,084
Breakout 22-24                   115,947               11,594,700             V-X                12,802,755
Breakout 25-27                    94,838                9,483,800             Y-AA               10,598,750
Breakout 28-30                    77,598                7,759,800             AB-AD               8,774,165
Breakout 31-33                    63,512                6,351,200             AE-AG               7,263,685
Breakout 34-36                    51,996                5,199,600             AH-AJ               6,013,235
                               ---------              -----------                               -----------
Total Equity VAM:              2,377,326              237,732,600         Total Warrant VAM     250,095,423
</TABLE>

Underlying  Shares and warrants of this Unit Offering will be accompanied by the
following in order for Breakouts to start:

ix. The  Company  understands  that  Breakouts  of capital  may only occur if an
accepted  Registration  statement or Attorney  opinion  letter,  suitable to the
Intermediaries  depository  and  transfer  groups,  evidencing  the free trading
ability of the shares is presented to the Intermediary by the Company,  and such
registration  proxy  accompanies  the Common  Shares and the  underlying  Common
Shares of the Warrants.  Unless an effective Registration or an attorney opinion
letter,  suitable to the Intermediary and their  depositories,  is/are available
and such status  provides  sufficient  free trading shares to cover the complete
offering,  a Registration or additional  Registrations of the underlying  common
shares shall commence  immediately  and must be effective  prior to the start of
the Breakout the underlying shares are attached to.

x.  Company  agrees to adhere to the Use of  Proceeds  schedule  as set forth in
Section IV.1 during the term of this  investment  (Full Cash  Delivery  from the
account and full warrant  exercise).  Quarterly and annual reviews of the use of
proceeds,  by the corporate accountant and signed by the CFO, would be delivered
to the Investor(s) through the Advisor. Any deviance from this UOP schedule must
be cleared with the Investor(s),  through the Advisor,  prior to such deviation.
Any  such  acceptance  would  be in  writing  and  signed  individually  by  the
Investor(s).

Company  agrees not use funds from this offering for any of the following  items
unless  previously agreed to and included in the Use of Proceeds in Section IV.1
of this Terms Memorandum:

a. Leasing vehicles,  aircraft or boats for senior  management's or consultant's
personal use
b. Legal or G&A not related to corporate  operations,  public company listing or
those items contained in the Closing Documents or this Agreement
c. Management or shareholder loan or past due salary repayments
d. Settlement of legal liabilities
e. Severance package payment
f. Payment of license fee's,  royalties or any billing which will  ultimately be
paid to Senior Management or Directors or their heirs, family,  trusts,  estates
or businesses. (Unless included in the UOP)

(Section II.10 Continued)
xi. The  management  team of the Company will be issued  100,000 shares of super
voting Class C Preferred shares.  The Attributes of these shares may be found in

                                       10
<PAGE>
Exhibit D. These shares will be deposited with the  Compliance  Attorney for use
in the event the Company  defaults on its  obligations  in this  Agreement  (See
Section IV.8).

11. BUSINESS MILESTONES:
These items must be accomplished prior to closing:
     i.   Arrangement of Bridge Equity
     ii.  Creation of the Preferred C Shares, Filing of 14C with State
These items would be accomplished prior to Breakout:
(These are in addition to other compliance items listed in this document)
     i.   Bridge Equity completion
     ii.  Registration
These Items would be accomplished within the given time frames:
     i.   An Investment Bank, acceptable to Investors,  would be retained by the
          Company no later than Month 13 following Registration acceptance.  The
          Investment Bank would provide the following:
          1.   Retail investor support
          2.   Analyst coverage support
          3.   Uplisting strategy & support
          4.   Aid in secondary offering structure
          5.   Aid in Acquisitions and or Mergers
          6.   Management acquisition, strategy & support
          7.   Deal optics improvement
          8.   Road show support
          9.   Industry research coverage and strategy
          10.  Sarbanes Oxley strategy and transparency increase

     ii.  The Company will make  application to a higher exchange  acceptable to
          the  Investors  as soon as the common share market price allows such a
          listing to be obtained,  but at latest by month 24. (Set  according to
          price of valuation)
     iii. The Company will perform a consolidation  of its shares of 1 share for
          every 10 shares no later than month 12 following Breakout start.

12. RESTRICTIONS ON CAPITAL USE:
The Company  agrees not to engage in any of the  following  activities  and will
abstain from  supporting,  monetarily,  through gift of asset,  use of assets or
through  public  message,  such  activities  during  the term of the  investment
(defined as having all breakouts  accomplished and the expiration or exercise of
all warrants) as described below:
i. Pornography or Prostitution
ii. Human Embryo Abortion or Abortive Support
iii.  Child  Labor   (According  to  the  United   Nations-International   Labor
Organizations, 1976 Minimum Age Convention No.138)
iv.  Support  for  Terrorist  or Hate  Groups  either  monetarily  or by gift of
resources
v. Human Trafficking
vi. Slavery
vii. Supplying of Weapons in contravention of International law
viii.  To  suppress,  prohibit  or  elevate  any  person or group due to ethnic,
religious,  racial,  sexual or  political  viewpoints  or to support  persons or
groups in their pursuit of such suppression of other groups

13. (INTENTIONALLY OMITTED)

                                       11
<PAGE>
14. REGISTRATION EXPENSES:

All expenses  incurred in connection  with a registration  required  pursuant to
Section  II.4,   including  (without   limitation)  all  registration,   filing,
qualification,  legal,  accounting and any other expenses  necessary to complete
the  Registration  shall be borne  by the  Company.  The  Company  shall  not be
required to pay any  underwriters'  or brokers' fees or commissions  relating to
the Registrable  Securities,  or the fees or expenses of separate counsel to the
Investor(s), unless such expenses were incurred as a result of requests for data
or documents by Company counsel or auditors.

SECTION III. WARRANT FUNDING

Warrants will provide the holder the right to purchase  registered  free trading
Common Shares at the prices and amounts set forth in Figure 6.

Figure 7. (Offering Warrant Rights)

                                 WARRANT RIGHTS
<TABLE>
<CAPTION>
  Warrant Series        Warrants Per Unit        Warrant Price      Exercise P/Unit     Total Warrants
  --------------        -----------------        -------------      ---------------     --------------
<S>                           <C>                   <C>             <C>                   <C>
 Warrant A Shares             17025                 $ 0.0300        $    510.75           17025000
 Warrant B Shares             15986                 $ 0.0320        $    510.75           15985915
 Warrant C Shares             15010                 $ 0.0340        $    510.75           15010249
 Warrant D Shares             14094                 $ 0.0362        $    510.75           14094131
 Warrant E Shares             13234                 $ 0.0386        $    510.75           13233926
 Warrant F Shares             12426                 $ 0.0411        $    510.75           12426221
 Warrant G Shares             11668                 $ 0.0438        $    510.75           11667813
 Warrant H Shares             10956                 $ 0.0466        $    510.75           10955693
 Warrant I Shares             10287                 $ 0.0496        $    510.75           10287036
 Warrant J Shares              9659                 $ 0.0529        $    510.75            9659189
 Warrant K Shares              9070                 $ 0.0563        $    510.75            9069661
 Warrant L Shares              8516                 $ 0.0600        $    510.75            8516113
 Warrant M Shares              8000                 $ 0.0639        $    511.00            8000265
 Warrant N Shares              7512                 $ 0.0680        $    511.00            7511986
 Warrant O Shares              7054                 $ 0.0724        $    511.00            7053508
 Warrant P Shares              6623                 $ 0.0775        $    511.00            6623012
 Warrant Q Shares              6219                 $ 0.0822        $    511.00            6218790
 Warrant R Shares              5839                 $ 0.0875        $    511.00            5839240
 Warrant S Shares              5483                 $ 0.0932        $    511.00            5482854
 Warrant T Shares              5148                 $ 0.0993        $    511.00            5148220
 Warrant U Shares              4834                 $ 0.1057        $    511.00            4834009
 Warrant V Shares              4539                 $ 0.1126        $    511.00            4538976
 Warrant W Shares              4262                 $ 0.1199        $    511.00            4261949
 Warrant X Shares              4002                 $ 0.1277        $    511.00            4001830
 Warrant Y Shares              3758                 $ 0.1360        $    511.00            3757587
 Warrant Z Shares              3528                 $ 0.1448        $    511.00            3528251
Warrant AA Shares              3313                 $ 0.1542        $    511.00            3312912
Warrant AB Shares              3111                 $ 0.1643        $    511.00            3110715
Warrant AC Shares              2921                 $ 0.1749        $    511.00            2920859
Warrant AD Shares              2743                 $ 0.1863        $    511.00            2742591
Warrant AE Shares              2575                 $ 0.1984        $    511.00            2575203
Warrant AF Shares              2418                 $ 0.2113        $    511.00            2418031
Warrant AG Shares              2270                 $ 0.2255        $    511.00            2270451
Warrant AH Shares              2132                 $ 0.2397        $    511.00            2131879
Warrant AI Shares              2002                 $ 0.2553        $    511.00            2001764
Warrant AJ Shares              1880                 $ 0.2719        $    511.00            1879591
                              ------                --------        -----------          ---------
      Total                   250097                $ 0.1109        $ 18,393.00          250095421
                              ======                ========        ===========          =========
</TABLE>

                                       12
<PAGE>
Figure 8. (Offering Warrant Cash)

                         OFFERING WARRANT CASH BREAKOUTS
<TABLE>
<CAPTION>
  Warrant Series     Total Exercise       Cash Holdback      Acct Fee Annual   Acct Fee Monthly     Cash to Company
  --------------     --------------       -------------      ---------------   ----------------     ---------------
<S>                    <C>                 <C>                  <C>               <C>                 <C>
 Warrant A Shares      $510,750.00         $ 61,290.00          $ 250.00          $ 250.00            $ 448,960.00
 Warrant B Shares      $510,750.00         $ 61,290.00          $ 250.00          $ 250.00            $ 448,960.00
 Warrant C Shares      $510,750.00         $ 61,290.00          $ 250.00          $ 250.00            $ 448,960.00
 Warrant D Shares      $510,750.00         $ 61,290.00          $ 250.00          $ 250.00            $ 448,960.00
 Warrant E Shares      $510,750.00         $ 61,290.00          $ 250.00          $ 250.00            $ 448,960.00
 Warrant F Shares      $510,750.00         $ 61,290.00          $ 250.00          $ 250.00            $ 448,960.00
 Warrant G Shares      $510,750.00         $ 61,290.00          $ 250.00          $ 250.00            $ 448,960.00
 Warrant H Shares      $510,750.00         $ 61,290.00          $ 250.00          $ 250.00            $ 448,960.00
 Warrant I Shares      $510,750.00         $ 61,290.00          $ 250.00          $ 250.00            $ 448,960.00
 Warrant J Shares      $510,750.00         $ 61,290.00          $ 250.00          $ 250.00            $ 448,960.00
 Warrant K Shares      $510,750.00         $ 61,290.00          $ 250.00          $ 250.00            $ 448,960.00
 Warrant L Shares      $510,750.00         $ 61,290.00          $ 250.00          $ 250.00            $ 448,960.00
 Warrant M Shares      $511,000.00         $ 61,290.00          $ 250.00          $ 250.00            $ 449,180.00
 Warrant N Shares      $511,000.00         $ 61,290.00          $ 250.00          $ 250.00            $ 449,180.00
 Warrant O Shares      $511,000.00         $ 61,290.00          $ 250.00          $ 250.00            $ 449,180.00
 Warrant P Shares      $511,000.00         $ 61,290.00          $ 250.00          $ 250.00            $ 449,180.00
 Warrant Q Shares      $511,000.00         $ 61,290.00          $ 250.00          $ 250.00            $ 449,180.00
 Warrant R Shares      $511,000.00         $ 61,290.00          $ 250.00          $ 250.00            $ 449,180.00
 Warrant S Shares      $511,000.00         $ 61,290.00          $ 250.00          $ 250.00            $ 449,180.00
 Warrant T Shares      $511,000.00         $ 61,290.00          $ 250.00          $ 250.00            $ 449,180.00
 Warrant U Shares      $511,000.00         $ 61,290.00          $ 250.00          $ 250.00            $ 449,180.00
 Warrant V Shares      $511,000.00         $ 61,290.00          $ 250.00          $ 250.00            $ 449,180.00
 Warrant W Shares      $511,000.00         $ 61,290.00          $ 250.00          $ 250.00            $ 449,180.00
 Warrant X Shares      $511,000.00         $ 61,290.00          $ 250.00          $ 250.00            $ 449,180.00
 Warrant Y Shares      $511,000.00         $ 61,290.00          $ 250.00          $ 250.00            $ 449,180.00
 Warrant Z Shares      $511,000.00         $ 61,290.00          $ 250.00          $ 250.00            $ 449,180.00
Warrant AA Shares      $511,000.00         $ 61,290.00          $ 250.00          $ 250.00            $ 449,180.00
Warrant AB Shares      $511,000.00         $ 61,290.00          $ 250.00          $ 250.00            $ 449,180.00
Warrant AC Shares      $511,000.00         $ 61,290.00          $ 250.00          $ 250.00            $ 449,180.00
Warrant AD Shares      $511,000.00         $ 61,290.00          $ 250.00          $ 250.00            $ 449,180.00
Warrant AE Shares      $511,000.00         $ 61,290.00          $ 250.00          $ 250.00            $ 449,180.00
Warrant AF Shares      $511,000.00         $ 61,290.00          $ 250.00          $ 250.00            $ 449,180.00
Warrant AG Shares      $511,000.00         $ 61,290.00          $ 250.00          $ 250.00            $ 449,180.00
Warrant AH Shares      $511,000.00         $ 61,290.00          $ 250.00          $ 250.00            $ 449,180.00
Warrant AI Shares      $511,000.00         $ 61,290.00          $ 250.00          $ 250.00            $ 449,180.00
Warrant AJ Shares      $511,000.00         $ 61,290.00          $ 250.00          $ 250.00            $ 449,180.00
                    --------------       -------------         ---------         ---------          --------------
      Total         $18,393,000.00       $2,206,440.00         $9,000.00         $9,000.00          $16,167,840.00
                    ==============       =============         =========         =========          ==============
</TABLE>

Individual  Investor(s)  Warrant Rights will be detailed in the USA.  Underlying
Common  Shares of the Warrants  must be free trading prior to release of capital
to the  Company.  The Company  will include the  Underlying  Common  Shares in a
registration  prior to Month 24 following  closing.  Warrant  exercise is at the
discretion of the Investor(s). The Warrant exercise shall take place through the
Intermediary.  Upon  delivery  of both the  underlying  Common  Shares,  free of
restrictive  legend,  and the Investor(s) cash, the Intermediary will administer
closing and transfer of monies to the Company.  Closing shall be the exchange of
the monies  payable to the Company,  for that series of Warrant,  and the Common
Shares,  free of restrictive  legend,  of the Warrant Series  deliverable to the
Investor(s).  The  full  exercise  instructions  will be  detailed  in the  AMA.
Warrants would be available for exercise for 48 months following registration of
the  Warrants  or 24  months  following  the  final  cash  disbursement  by  the
Intermediary whichever is longer. All Invested Amounts are subject to deductions
of expenses and fees (INCLUDING LEGAL,  ACCOUNTING,  ACCOUNT  MANAGEMENT,  WIRE,
TRANSFER  AND BANK FEES) prior to transfer  from the Cash Account to the Working
Account.

SECTION IV. MANAGEMENT

1. USE OF PROCEEDS (UOP):
The Company  would adhere to the Use of Proceeds  set forth in the  accompanying
file  titled  "LBTG UOP (TN June 8,  2012)".  The  Company has agreed not to use
funds from this  offering  for any  purpose  not  listed in the Use of  Proceeds
("UOP") without previous approval from the Investor(s).  The Company understands
that any such  deviation  from the UOP may alter the  valuation  metrics used to
evaluate the risk of this offer.  Company  further agrees that any deviance from
this UOP is approved in writing by the Investor(s),  through the Advisor,  prior
to such  deviation.  Nothing in this  document  would  restrict the Company from

                                       13
<PAGE>
utilizing  funds not included in the UOP, or received  from a separate  offering
previously  approved by the  Investor(s),  for purposes as the Company sees fit.
The UOP may be found in Exhibit F to this document.

2. COMMUNICATIONS & CONTROL:
The  Securities  Sections  this  offering  will  utilize  for  its  registration
exemption,   have  certain  requirements  for  offering  origination,   offering
management, document preparation,  material notices and Blue Sky administration.
The Company wishes to maintain its exemption under these  Sections.  In order to
do so, the  Company  and its  officers,  directors  and  employees  agree not to
communicate directly with the Investor(s) at any time. Any verbal communications
to the  Investor(s)  may entail  unintentional  or material  representations  or
disclosures and would therefore be avoided.

The Company understands that the Investor(s) have retained Catwalk Capital, LLC,
(the "Advisor") as their Purchase Advisor to perform Due Diligence, opine on the
investment  opportunity  and manage and  monitor  the  investment  process.  All
communications  with Intermediary and Investor(s) shall be conducted through the
Advisor.  The Company may utilize the Advisors  online portal in written form as
representations to both the Intermediary and the Investor(s).  Any discussion of
items  needed,  document  delivery  or general  questions  would be  directed to
Advisor.  Advisor  would  consult  to  the  Investor(s)  on  the  worth  of  the
investment. Any additions,  changes or representations which Advisor may request
or suggest to Company,  if acted upon by Company,  would be provided in writing.
Company counsel shall opine on any and all agreements. The Company requests that
neither   the  Company  nor  the   Investor(s)   communicate   verbally  to  the
Intermediary.  Any offers,  alterations or communications  would be presented in
writing and any agreements  signed by all parties before such offer,  alteration
or communication is considered accepted or finalized.  All communications  would
be in writing.

3. EXPENSES AND FEES:
The Company understands that:
1.   Advisor  will incur  expenses  for the  placement  and  management  of this
     Investment.
2.   Advisor receives no compensation for expenses  incurred to place and manage
     this Investment from the Investors.  Any Expenses  incurred will be paid by
     the  Company  either  through  billings  or  through  the  Monthly  Service
     Retainer.
3.   Prior to signing of this Terms  Memorandum,  any previous expenses owing by
     the Company to the Advisor must be paid.
4.   Following execution of this Terms Memorandum, Advisor will be authorized by
     Company  to  incur   whatever   expenses  are  customary  to  complete  the
     Investment.  Advisor  will  rely  on the  payment  of the  Monthly  Service
     Retainer to recover any expenses related to the Investment.

(Section IV.3 Continued)
5.   The Company  represents  through its  Execution of this Terms  Notification
     that  it will  provide  Advisor  with  such  Monthly  Expense  Retainer  as
     described  in  Section  IV.4  below.   Advisor  will  be  relying  on  this
     representation  and the accompanying  Expense Retainer amounts to cover its
     expenses related to this offering.
6.   Advisor  will  include  such  expense  billing  amounts  within the Monthly
     Service  Retainer.  Any amounts over and above the Monthly Service Retainer
     will be moved to any  upcoming  retainer  payments.  All  expenses  must be
     repaid prior to Breakout Start.  Should the expenses  incurred be in excess
     of the  retainer(s)  paid,  the excess amount will be repaid by the Company
     out of their first Breakout of cash.

                                       14
<PAGE>
7.   Company may pay the Monthly Expense Retainer by either:  wire, credit card,
     paypal or cashiers check. Any Personal Checks will be automatically charged
     a 10% fee for interest due to the waiting  period imposed by Advisors bank.
     Any checks which return Non Sufficient  Funds to the Advisors  account will
     be  charged 2 times the  expenses  and  losses  incurred  by Advisor in the
     account.  Any expenses related to legal,  collection or accounting  charges
     during any collection  action by Advisor  against the Company will be added
     to the  outstanding  balance.  Any account 60 days past due will be sent to
     collections  and any funding may be impaired or broken up  according to the
     Breakup  Agreement.  Any credit,  wire or other charges will be paid by the
     Company and will be added to future Invoices if not already included in the
     current invoice.
8.   Following  execution  of this Terms  Memorandum  and payment of the initial
     Monthly  Service  Retainer,  Company  represents  to  Advisor  that it will
     continue to provide such Monthly  Service  Retainer as described in Section
     IV.4 below.

4. POST MEMORANDUM OF TERMS EXPENSES:
Immediately upon signing of the Memorandum of Terms, the following expenses will
be necessary to securitize the binding offer:
     a.   Breakup Escrow                     $750.00
     b.   Compliance Attorney                $750.00-1,500.00
     c.   Intermediary Account Opening       $1,500.00

Following  Memorandum  of Terms  execution,  and during any time that no cash is
being  released  from the Cash  Account up to final cash  release for the equity
portion of the  Investment,  the Company  will begin  provide a Monthly  Service
Retainer to Advisor as follows:
     a.   Month 1                            $5,000.00
     b.   Additional Months                  $3,500.00

This retainer will cover the following:
     a.   Preparation of the Unit Subscription Agreement
     b.   Preparation of the Account Management Agreement
     c.   Monthly Portal Expense

The retainer will not cover the following:
     a.   Intermediary Account Setup
     b.   Breakup Fee
     c.   Breakup Fee Escrow Setup
     d.   Compliance Attorney Setup
     e.   Portal IT not pertaining to this transaction

5. POST-CLOSE EXPENSES:
(These Expenses shall be paid from cash transfers to the Company)
Cash Withholding per Breakout:               $5,000.00
Cash Withholding per Workout:                $1,000.00
Annual Account Fee (Annual):                 $3,000.00
Account Service Fee (Annual):                $3,000.00
Price Workout Pool Adjustment:               $1,500.00

Cash  withholding  of $5,000.00 per month will be withheld from each Workout for
ongoing expenses of legal, accounting and bank/wire fees. Should a Breakout have
more than 1 Workout,  subsequent  Workouts  will each have  $1,000.00  deducted.
Should  Workout  1  not  deliver  sufficient  capital  to  cover  the  $5,000.00
withholding, the Withholding will be extended to subsequent Workouts.

                                       15
<PAGE>
ADDITIONAL STANDARD EXPENSE RATES:
1.   Application Programming hourly:         $  150.00
2.   Terms Notification Initial Draft:       $  500.00
3.   Catwalk Staff Time hourly:              $  150.00
4.   Due Diligence Portal Monthly1:          $  250.00
5.   Due Diligence Portal IT hourly:         $   75.00
6.   Memorandum of Terms Initial Draft:      $  500.00
7.   Intermediary Account Opening:           $1,500.00
8.   Breakup Fee Escrow Setup:               $  750.00
9.   Compliance Attorney Setup:              $  750.00
10.  Legal Document Alteration (hourly):     $  250.00
11.  Accounting (hourly):                    $  150.00

Notes:
1. The cost of the monthly Due Diligence  portal is aggregated  into the Monthly
Service Retainer following signing of the Memorandum of Terms.

TRAVEL EXPENSES: (If Company Requests Advisor to Travel)

1.   Daily Retainer:                         $1,500.00
2.   Daily Expense Monies:                   $  300.00
3.   Business Class Air tickets
     a.   Bellingham, WA to destination and back
     b.   No more than 2 stops
4.   Rental car at destination of SUV or luxury class car or
5.   Town car to take to destination or pick up at airport
6.   4 star or better hotel
     a.   No smoking room
     b.   Queen or better bed

6. MEMORANDUM OF TERMS BREAK UP:

The Company understands that following Memorandum of Terms signing, that it will
deposit:
1.   Common Shares (the "Breakup Shares") in certificate form with a stock power
     to allow transfer to Elco Securities, Ltd. (the "Intermediary"),  2,000,000
     shares,  or,  $50,000 in cash,  either  payable in the events stated in 6.4
     below.
2.   Should  the  total  shares  be  in  excess  of  999,999  shares,   multiple
     Certificates  will be issued,  so that no certificate shall be comprised of
     more than 999,999 shares. The certificate or certificates will be comprised
     of restricted  securities and will be  accompanied by the proper  documents
     required to have the certificate deposited in trust.
3.   The  certificate  or  certificates,  will be deposited  with an attorney of
     Advisors choosing under a Breakup Escrow Agreement.
4.   The Shares will be deliverable to Intermediary in the following events:
     a.   Company cancels the investment prior to Close, or
     b.   Company breaks the exclusivity covenant of the Memorandum of Terms, or
     c.   Material  discoveries  are  uncovered in due  diligence  that were not
          disclosed by the Company in its Portal upload,  and which  discoveries
          adversely  affect the Investor(s)  belief that the Company will attain
          its projected Financial UOP, or
     d.   The Company declares bankruptcy, or
     e.   The  Company  becomes  subject  to  an  investigation  or  suit  by  a
          securities agency of a recognized government prior to the close.

                                       16
<PAGE>
5.   Should the  Investor(s)  cancel the investment  for any reason,  other than
     those specified in #4 above, the shares will be returned to the Company.
6.   Following close, the Breakup will be returned to the Company.

7. BREAKUP FOLLOWING CLOSE:
The Company understands that:
1.   Following  Close,  there  shall be no ability for either the Company or the
     Investor(s)  to rescind or cancel the  transaction  without  mutual written
     agreement of all parties.
2.   Any Breakup following Close will require a negotiated  "Breakup  Agreement"
     between the parties.  The Company  understands  that the  Investors are not
     investing or managing shares jointly,  and as such, each Investor may agree
     or disagree  with such  settlement  proposal.  There will be no  pre-agreed
     Breakup Agreement once Close occurs.
3.   Should a negotiated Breakup of the transaction occur following closing, any
     such agreement must provide an allotment to cover costs and expenses of the
     Advisor.
4.   The  Investor(s) are under no obligation to agree to any such Breakup offer
     unless satisfied with the terms of such Breakup settlement.
5.   The Company may not cancel or Breakup the investment by delay or refusal to
     provide documentation.
6.   Any  public   dissemination  or  filing  of  documents   stating  that  the
     transaction  has been  broken up or  cancelled  without a  mutually  agreed
     Breakup must be considered as a material untrue statement and would subject
     the Company to potential regulatory actions.
7.   Any Breakup  Settlement  Agreement will not be considered as complete until
     all items  necessary  to complete  such  Agreement  have been  accomplished
     including share issuance, registration,  delivery of shares to Intermediary
     and any other items called for in the Settlement Agreement.

8. COMPLIANCE BY COMPANY:
At close,  the Company  shall deposit the 100,000 super voting Class C Preferred
Shares with an attorney of the Advisors  choosing under an escrow and compliance
agreement (the "Compliance Attorney Agreement" or the "CAA"). The escrow will be
accompanied  by stock  powers for  transfer  of the super  voting  shares to the
Advisor in the event the Compliance  Attorney is forced to compel the Company to
act should the following  circumstances described in 8.1-2 below not be resolved
and the  Compliance  Attorney is forced to take those  actions  described in 8.3
below:

The Company understands that:

1.   Should the Company be out of compliance with the following:
     a.   Failure  to  file  a  Registration  with  the US  Securities  Exchange
          Commission  ("SEC")  within the given time period  covering the shares
          described in Section II.4, or any  registration  that may be necessary
          to continue the offering contemplated herein, or;
     b.   Failure to provide proper documents necessary to deposit  certificates
          attached to this offering, or;
     c.   Failure to provide  legal  opinions  as needed for shares  attached to
          this offering, or;
     d.   Failure of the  Company  to  communicate  with the  Advisor to resolve
          issues and maintain communications, or;
     e.   Failure to maintain  compliance  with  requirements  set in the USA or
          AMA, or;
     f.   Failure  to be a  going  concern  by  the  filing  of a  petition  for
          bankruptcy,  either  voluntary  or  involuntary,  or  the  ceasing  of
          business activity, or;
     g.   Failure to meet the requirements of Section II.10-12, or;

                                       17
<PAGE>
2.   Should the Company Institute any of the following:
     a.   Attempted  cancellation of  certificates  attached to this offering to
          force Breakup, or;
     b.   Institution of any suits to force a Breakup, or;
     c.   Filing of any documents  stating that the  transaction  is canceled or
          Broken up when in fact it is not, or,
     d.   Filing of any disclosure  notifications  or dissemination of any press
          release stating that there is a negotiated settlement unless and until
          all deliveries  necessary to make such settlement  effective have been
          made, then;

3.   Immediately upon discovery of an instance of non-compliance, the Compliance
     Attorney  shall demand the Company come into  compliance  within 30 days of
     receiving  notice.  During  the 30  day  Notice  Period,  the  Company  may
     communicate   a  plan  to  the   Investor(s),   through  the  Advisor  with
     Notification  to the  Compliance  Attorney,  to rectify such  non-Compliant
     situation.  If the  Investors  have not agreed to such  plan,  or issued an
     extension  to the  Company,  during the Notice  Period,  with notice to the
     Compliance Attorney of same, the Compliance Attorney shall:
     a.   Transfer the super voting privilege to the Advisor, who may then;
     b.   Institute a shareholder vote to:
          i.   Force compliance through shareholder directives, or:
          ii.  Call for a Shareholder vote to replace the board should the board
               be  obstructionist  or if the  actions of the board  continue  to
               leave the Company out of compliance, or:
          iii. Bring additional management or replace management as necessary to
               put a plan in place to force compliance.

(Section IV.8.3 Continued)

     c.   Once  compliance  is  reestablished,  the Super Voting  Shares will be
          transferred to the Board of Directors in percentage  proportion to the
          number of board  seats.  The new  holders  will be required to produce
          additional stock powers prior to this  transference to reestablish the
          escrow and Compliance Attorney Agreement to continue the offering.
     d.   Any legal  expenses in addition to the  original  Compliance  Attorney
          setup will be paid by the Company.

9. EXCLUSIVITY:
Full  execution  of this  Memorandum  of Terms by the Company  signifies  to the
Investor(s) as inducement to enter into such agreement:
1.   The Company  will not accept or enter into any other  offers of  investment
     which  would  have an adverse  effect on the  valuation  of the  underlying
     common shares  without  approval of the Advisor and the  Investor(s) to the
     offering contemplated herein.
2.   The Company will keep this and other investment  documents  confidential in
     their  entirety  and will not  disclose  either the  documents or the terms
     thereof  to any party  which is not a party to this  investment  until such
     time as the offering is closed.  At which time,  the Company will limit its
     disclosure to any public filings which must be made to maintain  compliance
     with  applicable   Securities   regulations  unless  such  disclosures  are
     previously approved by the Advisor.

                                       18
<PAGE>
10. REQUESTED CLOSING TIMEFRAME:

<TABLE>
<CAPTION>
DAY                      ITEM                             PREREQUISITE
---                      ----                             ------------
<S>      <C>                                         <C>
1-7      Memorandum of Terms (MT) signing            Due diligence completion
         Initial Monthly Service Retainer            MT signing
         Deposit of Breakup Fee                      Memorandum of Terms signing
7-15     Offering document creation (USA)            Breakup Fee Deposit
15-21    Account Management Agreement (AMA)          Offering document preparation
         Account opening                             to Final Versions
22-30    Closing                                     Signed Documents, Share Deposit,
                                                     Breakup Fee Deposit and
                                                     legal opinions
45-60    Registration Filing                         Close and Conversion of Breakout 1-6
</TABLE>

11. OFFERING CONTROLS:
FUNDS MANAGEMENT
An Account  Management  Agreement  ("AMA") will be established which will manage
the pre-closing,  closing and post closing  administration of this offering. The
Intermediary will obtain capital  commitments from the Investor(s).  The Company
shall deliver the Unit  securities to  Intermediary  (Common  Shares and Warrant
Certificates). At close, the Investors Capital will be credited to the Company's
Cash Account with the Intermediary. Common Shares and Warrants would be credited
to Investor(s)  accounts thus closing the transaction.  All invested funds would
remain in the Cash Account until such time as the instructions  contained in the
AMA may be carried out. The Investor(s) may not request capital return following
close without the  agreement of the Company and a Breakup  Agreement is enacted.
The Company may not request to unwind or alter the transaction, following close,
without a Breakup or  Alteration  Agreement  signed by both the  Company and the
Investor(s).  The  Cash  Account  would  be  administered  by  the  Intermediary
according to the AMA. The AMA will manage the Breakout Cash Amount  releases and
provide Use of Proceeds oversight.

SHARE MANAGEMENT
Following the Close and the Registration covering the specific Breakout(s),  and
prior to each Breakout,  the Intermediary will deposit the Common Shares for the
upcoming Breakout electronically and await the Workout cash release, as detailed
in Section II.5-8, before release of the shares to the Investor(s) Account.

SECTION V.  ACCEPTANCE OF TERMS
By issuing this  Memorandum of Terms,  the Company  signifies that it will enter
into such offer with the Investor(s).  This is an offer to sell securities under
these terms by the Company to the Investor(s).

This  Memorandum of Terms is good for  acceptance  for 7 business days after the
Issuance Date located on the title page of this document. If at that time, there
are not enough  committed  funds to purchase all the Units being  offered,  this
Memorandum of Terms will become invalid. Upon full commitment of capital,  these
terms will be implemented  into the offering  documents  (The Unit  Subscription
Agreement ("USA") and the corresponding Account Management Agreement ("AMA")).

                                       19
<PAGE>
This Securities Offer is made by:

Mr. Robert Malasek
CFO
Liberty Coal Energy

/s/ Robert Malasek Signed this day of August 17, 2012

A  corporate  resolution  and any  authorization  documents  necessary  for full
authorization for signing will be included with this offer.

                                       20
<PAGE>
EXHIBIT A

INVESTOR SIGNATURES

By signature below, the given Investor  signifies their intent to subscribe that
number of Units for such amount as is  detailed  in the name  block.  Nothing in
this document or in the location of signatures signifies any pooling of interest
or common share sales  agreement among the Investors.  Each Investor  represents
that they are purchasing for their own account and not for the account of others
and not with a view to sell or distribute such securities although such Investor
will still  retain  any  rights to sell as  provided  by  applicable  securities
regulation.  Further, each Investor(s) certify and herby represent that they are
an  "Accredited  Investor"  as  defined in the US  Securities  Act of 1933 under
Regulation D, Rule 501 (a copy of which is included in Exhibit G.).

(Insert Name Block for each Investor on a separate Page with the  Disclaimer and
Notice)

                                       21
<PAGE>
EXHIBIT B
CAPITAL STRUCTURE

<TABLE>
<CAPTION>
COMMON SHARES                                     NUMBER OF SHARES     PAR/FACE VALUE    EXERCISE PRICE
-------------                                     ----------------     --------------    --------------
<S>                                               <C>                  <C>               <C>
Authorized
  SERIES A                                        1,500,000,000.00         $0.001
  SERIES B                                                    None
  SERIES C                                                    None
  SERIES D                                                    None
  SERIES E                                                    None
                                                                --         $   --            $   --
                                                  ----------------         ------            ------
     TOTAL COMMON AUTHORIZED                      1,500,000,000.00

OUTSTANDING
  SERIES A                                           60,566,667.00         $0.001
  SERIES B                                                    None
  SERIES C                                                    None
  SERIES D                                                    None
  SERIES E                                                    None
                                                                --         $   --            $   --
                                                  ----------------         ------            ------
     TOTAL COMMON ISSUED                             60,566,667.00

ISSUED OPTIONS ON COMMON SHARES
  SERIES A                                              566,667.00
  SERIES B
  SERIES C
  SERIES D
  SERIES E
                                                                --         $   --            $   --
                                                  ----------------         ------            ------
      TOTAL OPTIONS                                     566,667.00

ISSUED WARRANTS FOR COMMON SHARES
  SERIES A
  SERIES B
  SERIES C
  SERIES D
  SERIES E
                                                                --         $   --            $   --
                                                  ----------------         ------            ------
     TOTAL WARRANTS                                             --

Current Authorized                                1,500,000,000.00
Current Outstanding                                  60,566,667.00
Converted Preferred                                             --
Fully Diluted                                        61,133,334.00
</TABLE>

                                       22
<PAGE>
EXHIBIT C

(INTENTIONALLY LEFT BLANK)

                                       23
<PAGE>
EXHIBIT D
SUPERVOTING PREFERRED ATTRIBUTES

--------------------------------------------------------------------------------
                           Preferred Shares Attributes
                                    Series C
--------------------------------------------------------------------------------

Issued By:                    LIBERTY COAL ENERGY
                              99 18TH STREET, SUITE 3000, DENVER CO
                              DENVER, COLORADO 80202

Par/Face Value:               $ --

Conversion Price:             $ --

Conversion Rate:              0

Conversion Rights:            No Conversion Rights

Dividend Payable:             "Dividend Percentage" per annum per share when, as
                              and if declared by the Board, and subject to the
                              rights of senior securities.

Dividend Percentage:          TBD

Company CALL:                 The Company shall have a CALL option at the CALL
                              Value 60  months following issuance.

CALL Value:                   $1.00 per share

PUT Rights:                   There are no PUT rights.

Exemption for Issuance:       These shares will be issued pursuant to an
                              Employee Stock Ownership Plan ("ESOP").

Voting Rights:                Each outstanding share of this Series of Preferred
                              Stock shall be entitled to 547 votes.

Negative Covenants:           At any time when shares of this Series of
                              Preferred Stock are outstanding, without the
                              written consent or affirmative vote of the holders
                              of a majority of the outstanding shares of this
                              Series of Preferred Stock together as a single
                              class, the Corporation shall not, either directly
                              or indirectly, affect the powers, preferences, or
                              special rights, of this Series of Preferred Stock.

Liquidation Preference:       None

Anti-Dilution                 To be set by the Directors and approved by
                              shareholders.

Redemption:                   None

Redemption Value:             See CALL Value

                                       24
<PAGE>
EXHIBIT E
CORPORATE RESOLUTION FOR THIS OFFER

                                CONSENT TO ACTION

                          BY THE BOARD OF DIRECTORS OF

                            LIBERTY COAL ENERGY INC.
                                 (the "Company")

The  undersigned,  being  the  Board  of  Directors  of the  Company,  a  Nevada
corporation, by unanimous consent in writing pursuant to the authority contained
in the  corporate  law of the State of  Nevada  and  without  the  formality  of
convening a meeting,  do hereby consent to the following actions of the Company,
to be effective as of the June 13, 2012.

LIBERTY FINANCE PROPOSAL MEMORANDUM OF TERMS MOT530362-102 LBTG

RESOLVED THAT:

1.   EXECUTION IN CONTERPART

     It is RESOLVED  that this  resolution  may be signed by the directors in as
many counterparts as necessary, each of which so signed shall be deemed to be an
original,  (including each signed counterpart copy sent by electronic  facsimile
transmission,  each of  which  shall  be  deemed  to be an  original)  and  such
counterparts   together   shall   constitute   one  and  same   instrument   and
notwithstanding  the date of  execution  shall be deemed to bear the date as set
forth below.

2.   It is RESOLVED that the Board of Directors of Liberty Coal Energy  approves
     the terms and execution of the above referenced memorandum.

/s/ Edwin G. Morrow                        /s/ Robert Malasek
--------------------------------           --------------------------------
EDWIN G. MORROW                            Robert Malasek
President and Director                     CFO and Director

                                       25
<PAGE>
EXHIBIT F
USE OF PROCEEDS

                                       26
<PAGE>
EXHIBIT G
US SECURITIES ACT OF 1933, REGULATION D, RULE 501

Rule 501 -- Definitions and Terms Used in Regulation D

As used in Regulation D, the following terms shall have the meaning indicated:

A.  Accredited  investor.  Accredited  investor  shall mean any person who comes
within any of the following  categories,  or who the issuer reasonably  believes
comes  within any of the  following  categories,  at the time of the sale of the
securities to that person:

1. Any bank as defined in section  3(a)(2) of the Act,  or any  savings and loan
association  or other  institution  as defined in section  3(a)(5)(A) of the Act
whether  acting in its  individual or fiduciary  capacity;  any broker or dealer
registered  pursuant to section 15 of the  Securities  Exchange Act of 1934; any
insurance  company as defined in section  2(a)(13)  of the Act;  any  investment
company  registered  under  the  Investment  Company  Act of 1940 or a  business
development  company  as  defined in  section  2(a)(48)  of that Act;  any Small
Business  Investment Company licensed by the U.S. Small Business  Administration
under section  301(c) or (d) of the Small  Business  Investment Act of 1958; any
plan established and maintained by a state, its political  subdivisions,  or any
agency or  instrumentality  of a state or its  political  subdivisions,  for the
benefit of its employees, if such plan has total assets in excess of $5,000,000;
any employee benefit plan within the meaning of the Employee  Retirement  Income
Security Act of 1974 if the investment decision is made by a plan fiduciary,  as
defined in section 3(21) of such act,  which is either a bank,  savings and loan
association,  insurance company,  or registered  investment  adviser,  or if the
employee  benefit  plan has  total  assets  in  excess  of  $5,000,000  or, if a
self-directed  plan, with  investment  decisions made solely by persons that are
accredited investors;

2. Any private business  development company as defined in section 202(a)(22) of
the Investment Advisers Act of 1940;

3. Any organization described in section 501(c)(3) of the Internal Revenue Code,
corporation, Massachusetts or similar business trust, or partnership, not formed
for the specific purpose of acquiring the securities offered,  with total assets
in excess of $5,000,000;

4. Any  director,  executive  officer,  or general  partner of the issuer of the
securities being offered or sold, or any director, executive officer, or general
partner of a general partner of that issuer;

5. Any natural person whose  individual net worth,  or joint net worth with that
person's spouse, at the time of his purchase exceeds $1,000,000;

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

7. Any trust,  with  total  assets in excess of  $5,000,000,  not formed for the
specific purpose of acquiring the securities offered, whose purchase is directed
by a sophisticated person as described in Rule 506(b)(2)(ii) and

8. Any entity in which all of the equity owners are accredited investors

                                       27

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00208-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00208-of-00352.parquet"}]]