Document:

eflo_ex104.htm

Exhibit 10.4

 

SETTLEMENT AGREEMENT

This Settlement Agreement (the “Agreement”) by and between the signatories hereto (each a “Party”, and jointly the “Parties”) sets forth binding commitments with respect to certain matters, liabilities and relationships amongst the Parties and between the Parties and EFLO Energy, Inc. inclusive of its subsidiary companies (“EFLO”).

This Agreement is made effective this 12th day of January, 2015 (the “Effective Date”)

WHEREAS, the Parties desire to reduce costs, settle certain liabilities, enhance EFLO’s ability to attract capital and support its exploration plans.

NOW THEREFORE, for valuable consideration, the sufficiency of which is hereby acknowledged, the Parties agree as follows:

1. The named Parties hereby agree to settle the amounts currently payable to them by EFLO (the “Original Liability Amounts”) for the Settlement Amounts set forth below. Such Settlement Amounts to be paid using shares of EFLO common stock at a price of $0.13 per share.

	
 

Name

	 	
Description

of Liability

	 	
Original Liability Amount ($)

	 	 	
Settlement Amount ($)

	 
	
Keith Macdonald

	 	
Directors fees

	 	 	65,000.00	 	 	 	27,950.00	 
	
Keith Macdonald

	 	
Consulting fees(1)

	 	 	140,000.00	 	 	 	24,175.00	 
	
Keith Macdonald

	 	
Consulting fees(2)

	 	 	2,250.00	 	 	 	2,250.00	 
	
Robert Wesolek

	 	
Directors fees

	 	 	65,000.00	 	 	 	27,950.00	 
	
Robert Wesolek

	 	
Consulting fees

	 	 	41,448.07	 	 	 	39,500.00	 
	
Wayne Hamal

	 	
Consulting fees

	 	 	50,150.00	 	 	 	50,150.00	 
	
Holloman Corporation

	 	
Serkasevich fees(3)

	 	 	33,427.66	 	 	 	0.00	 
	
Hutton Capital Corporation

	 	
Note(4)

	 	 	350,000.00	 	 	 	350,000.00	 
	
Pacific World Energy Corporation

	 	
Note(4)

	 	 	1,000,000.00	 	 	 	1,000,000.00	 

 

Notes:

	
(1)  

	
Consulting fees: October 2013 through October 2014

	
(2)  

	
Consulting fees: December 2014

	
(3)  

	
Includes all amounts owed to any subsidiary of Holloman Corporation.

	
(4)  

	
Add accrued interest and fees (not included here) to both Original Liability Amount and Settlement Amount.

 

2. Keith Macdonald and Robert Wesolek will resign as officers and members of the Board of Directors of EFLO effective January 15, 2015.

3. Nico Civelli and Conrad Kerr will be appointed as members of the Board of Directors of EFLO effective January 15, 2015.

 

  

  

  

4. The newly constituted Board of Directors of EFLO will appoint new officers as soon as practicable following the resignation of Keith Macdonald and Robert Wesolek.

5. Wayne Hamal will continue to use his best efforts to collect all amounts due EFLO from Apache Corp and other joint venture partners.

6. All directors' fees owed to the following persons are hereby cancelled:

	
●

	
Henry Aldorf

	
●

	
James Ebeling

	
●

	
Eric Prim

	
●

	
James Hutton

 

7. All amounts, including any and all finders’ fees, owed to the following persons not otherwise covered by this Agreement are cancelled:

	
●

	
Henry Aldorf

	
●

	
Keith Macdonald

	
●

	
Bamako Investment Management Ltd.

	
●

	
Country Rock Resources Ltd.

	
●

	
Robert Wesolek

	
●

	
James Ebeling

	
●

	
Eric Prim

	
●

	
James Hutton

8. Except for the obligations contemplated by this Agreement, EFLO, Pacific World Energy Corp., Hutton Capital Corporation, Holloman Corporation, Bamako Investment Management Ltd., Country Rock Resources Ltd., Henry Aldorf, Keith Macdonald, Robert Wesolek, James Ebeling, Eric Prim, Wayne Hamal, James Hutton, and their affiliates, and their respective officers, directors, shareholders, employees, servants, agents, successors and assigns, (the “Releasors”) hereby release and forever discharge each other Party to this Agreement and their affiliates, and their respective officers, directors, shareholders, employees, servants, agents, successors and assigns (the “Releasees”) from any and all actions, causes of action, claims, demands, contracts, debts, liabilities, damages, losses, injury, costs and expenses of every nature and kind whatsoever (the “Claims”) which the Releasors ever had, now have or may hereafter have against the Releasees, or any of them, for or by reason of or in any way arising out of any cause, matter or thing existing up to and including the date of this Agreement.

The Releasors agree not to, directly or indirectly, join, assist, or act in concert in any manner whatsoever with any other person in the making of any claim or demand or in the bringing of any proceeding in any manner whatsoever against any of the Releasees arising out of or in connection with any of the Claims released herein.

 

 

  

  

  

The Releasors represent, warrant and agree that the Releasors have not assigned, and will not assign, to any person or entity, any of the Claims which are released herein.

AGREED TO AND ACCEPTED:

 

	 	EFLO ENERGY, INC	 
	 	 	 	 
	
 

	
By: 

	/s/ Robert Wesolek	 
	 	 	Robert Wesolek	 
	 	 	Authorized Officer	 

 

NOTE HOLDERS –

 

	 	
PACFIC WORLD ENERGY CORP

	 
	 	 	 	 
	
 

	
By: 

	/s/ Carlo Civelli	 
	 	 	Carlo Civelli	 
	 	 	Authorized Officer	 

	 	
HUTTON CAPITAL CORPORATION

	 
	 	 	 	 
	
 

	
By: 

	/s/ James Hutton	 
	 	 	James Hutton	 
	 	 	Authorized Officer	 

OTHER SETTLORS –

 

	 	HOLLOMAN CORPORATION	 
	 	 	 	 
	
 

	
By: 

	/s/ James Ebeling	 
	 	 	James Ebeling	 
	 	 	Authorized Officer	 

 

	
 

	
By: 

	/s/ Henry Aldorf	 
	 	 	Henry Aldorf	 

 

	
 

	
By: 

	/s/ Keith Macdonald	 
	 	 	Keith Macdonald	 

 

	 	 Bamako Investment Management Ltd.	 
	 	 	 	 
	
 

	
By: 

	/s/ Keith Macdonald	 
	 	 	Keith Macdonald	 
	 	 	Authorized Officer	 

 

  

  

  

 

	 	
Country Rock Resources Ltd.

	 
	 	 	 	 
	
 

	
By: 

	/s/ Keith Macdonald	 
	 	 	Keith Macdonald	 
	 	 	Authorized Officer	 

	
 

	
By: 

	/s/ Robert Wesolek	 
	 	 	Robert Wesolek	 

 

	
 

	
By: 

	/s/ James Hutton	 
	 	 	James Hutton	 

 

	
 

	
By: 

	/s/ James Ebeling	 
	 	 	James Ebeling	 

 

	
 

	
By: 

	/s/ Eric Prim	 
	 	 	Eric Prim	 

 

	
 

	
By: 

	/s/ Wayne Hamal	 
	 	 	Wayne Hamal	 

 

	 	
HDH Resources LLC

	 
	 	 	 	 
	
 

	
By: 

	/s/ Wayne Hamal	 
	 	 	Wayne Hamal, Authorized Officer	 

 

INCOMING DIRECTORS –

 

	
 

	
By: 

	/s/ Nico Civelli	 
	 	 	Nico Civelli	 

  

	
 

	
By: 

	/s/ Conrad Kerr	 
	 	 	Conrad KerrExhibit 4.1

 

	
Number *0*
    	
Shares *0*
    

 

	
 
    	
SEE   REVERSE FOR IMPORTANT
    
	
 
    	
NOTICE   ON TRANSFER RESTRICTIONS
    
	
 
    	
AND   OTHER INFORMATION
    

 

	
THIS   CERTIFICATE IS TRANSFERABLE
    	
CUSIP
    
	
IN THE CITIES OF                 
    

 

SUTHERLAND ASSET MANAGEMENT CORPORATION

a Corporation Formed Under the Laws of the State of Maryland

 

THIS CERTIFIES THAT **Specimen** is the owner of **Zero (0)**  fully paid and nonassessable shares of Common Stock, 0.01 par value per share, of

 

Sutherland Asset Management Corporation

 

(the “Corporation”) transferable on the books of the Corporation by the holder hereof in person or by its duly authorized attorney, upon surrender of this Certificate properly endorsed.  This Certificate and the shares represented hereby are issued and shall be held subject to all of the provisions of the charter of the Corporation and the Bylaws of the Corporation and any amendments thereto.  This Certificate is not valid unless countersigned and registered by the Transfer Agent and Registrar.

 

IN WITNESS WHEREOF, the Corporation has caused this Certificate to be executed on its behalf by its duly authorized officers.

 

 

	
DATED
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Countersigned   and Registered:
    	
 
    	
 
    	
 
    
	
Transfer Agent
    	
 
    	
 
    	
(SEAL)
    
	
and Registrar
    	
 
    	
President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
Authorized Signature
    	
 
    	
Secretary
    
						

 

1

 

IMPORTANT NOTICE

 

The Corporation will furnish to any stockholder, on request and without charge, a full statement of the information required by Section 2-211(b) of the Corporations and Associations Article of the Annotated Code of Maryland with respect to the designations and any preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications, and terms and conditions of redemption of the stock of each class which the Corporation has authority to issue and, if the Corporation is authorized to issue any preferred or special class in series, (i) the differences in the relative rights and preferences between the shares of each series to the extent set, and (ii) the authority of the Board of Directors to set such rights and preferences of subsequent series.  The foregoing summary does not purport to be complete and is subject to and qualified in its entirety by reference to the charter of the Corporation (the “Charter”), a copy of which will be sent without charge to each stockholder who so requests.  Such request must be made to the Secretary of the Corporation at its principal office.

 

The shares represented by this certificate are subject to restrictions on Beneficial Ownership and Constructive Ownership and Transfer for the purpose, among others, of the Corporation’s maintenance of its qualification as a real estate investment trust under the Internal Revenue Code of 1986, as amended (the “Code”). Subject to certain further restrictions and except as expressly provided in the Charter, (i) no Person may Beneficially Own or Constructively Own shares of Common Stock in excess of 9.8 percent (in value or number of shares, whichever is more restrictive) of the outstanding shares of Common Stock unless such Person is exempt from such limitation or is an Excepted Holder (in which case the Excepted Holder Limit shall be applicable); (ii) no Person may Beneficially Own or Constructively Own shares of any class or series of Preferred Stock in excess of 9.8 percent (in value or number of shares, whichever is more restrictive) of the outstanding shares of such class or series of Preferred Stock unless such Person is exempt from such limitation or is an Excepted Holder (in which case the Excepted Holder Limit shall be applicable); (iii) no Person may Beneficially Own or Constructively Own shares of Capital Stock in excess of 9.8 percent (in value or number of shares, whichever is more restrictive) of the total outstanding shares of Capital Stock, unless such Person is exempt from such limitation or is an Excepted Holder (in which case the Excepted Holder Limit shall be applicable); (iv) no Person may Beneficially Own or Constructively Own Capital Stock that would result in the Corporation being “closely held” under Section 856(h) of the Code (without regard to whether the ownership interest is held during the last half of a taxable year) or otherwise cause the Corporation to fail to qualify as a REIT; and (v) any Transfer of shares of Capital Stock that, if effective would result in the Capital Stock being beneficially owned by less than 100 persons (as determined under the principles of Section 856(a)(5) of the Code) shall be void ab initio, and the intended transferee shall acquire no rights in such shares of the Capital Stock. Any Person who Beneficially Owns or Constructively Owns or attempts to Beneficially Own or Constructively Own shares of Capital Stock which causes or will cause a Person to Beneficially Own or Constructively Own shares of Capital Stock in excess or in violation of the above limitations must immediately notify the Corporation or, in the case of such a proposed or attempted transaction, give at least 15 days prior written notice. If any of the restrictions on transfer or ownership as set forth in (i) through (iv) above are violated, the shares of Capital Stock in excess or in violation of the above limitations will be automatically transferred to a Trustee of a Trust for the benefit of one or more Charitable Beneficiaries. In addition, the Corporation may redeem shares upon the terms and conditions specified by the Board of Directors in its sole discretion if the Board of Directors determines that ownership or a Transfer or other event may violate the restrictions described above. Furthermore, upon the occurrence of certain events, attempted Transfers in violation of the restrictions described in (i) through (iv) above may be void ab initio. All capitalized terms in this legend have the meanings defined in the Charter, as the same may be amended from time to time, a copy of which, including the restrictions on transfer and ownership, will be furnished to each holder of Capital Stock on request and without charge. Requests for such a copy may be directed to the Secretary of the Corporation at its principal office.

 

 

KEEP THIS CERTIFICATE IN A SAFE PLACE.  IF IT IS LOST, STOLEN

OR DESTROYED, THE CORPORATION WILL REQUIRE A BOND OF INDEMNITY AS A

CONDITION TO THE ISSUANCE OF A REPLACEMENT CERTIFICATE.

 

 

The following abbreviations, when used in the inscription on the face of this Certificate, shall be construed as though they were written out in full according to applicable laws or regulations:

 

	
TEN   COM
    	
-
    	
as tenants in   common
    	
UNIF GIFT MIN   ACT
    	
                  Custodian
    
	
TEN   ENT
    	
-
    	
as tenants by   the entireties
    	
 
    	
(Custodian)            (Minor)
    
	
JT   TEN
    	
-
    	
as joint tenants   with right of
    	
 
    	
under Uniform Gifts   to Minors Act of
    
	
 
    	
 
    	
survivorship and not as   tenants
    	
 
    	
 
    
	
 
    	
 
    	
in common
    	
 
    	
(State)
    

 

Additional abbreviations may also be used though not in the above list.

 

FOR VALUE RECEIVED,                                     HEREBY SELLS, ASSIGNS AND TRANSFERS UNTO

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

 

(Please Print or Typewrite Name and Address, Including Zip Code, of Assignee)

 

(              ) shares of Common Stock of the Corporation represented by this Certificate and do hereby irrevocably constitute and appoint                                      attorney to transfer the said shares of Common Stock on the books of the Corporation, with full power of substitution in the premises.

 

	
Dated
    	
 
    	
 
    	
 
    
	
 
    	
 
    

 

2

 

	
 
    	
NOTICE:  The Signature To This Assignment Must   Correspond With The Name As Written Upon The Face Of The Certificate In Every   Particular, Without Alteration Or Enlargement Or Any Change Whatever.
    

 

3

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