Document:

EXHIBIT 10.1

BINDING LETTER OF INTENT

This Binding Letter of Intent (this "LOI") is entered into by and between UA Granite Corporation, a Nevada corporation (the "Company"), and Vortex Blockchain, LLC, an Iowa limited liability corporation ("Vortex").

BACKGROUND AND PURPOSE

A. The Company is a fully reporting publicly traded company in good standing on the United States OTCQB marketplace.

B. The Company wishes to acquire Vortex through a reverse acquisition and believes Vortex to have a valuable cryptocurrency assets and intellectual property rights.

C. The Company and Vortex wish to enter into a voluntary share exchange (the "Exchange") transaction whereby the Company would acquire all of the issued and outstanding membership interest of Vortex in exchange for the issuance to the members of Vortex of approximately 65,000,000 shares of common stock of the Company.

D. The parties wish to enter into this LOI which states that the Closing of the Exchange will occur upon completion of the conditions as set forth herein and in a formal, definitive agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual agreements and representations contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

1. This LOI constitutes a binding agreement with regard to the various matters set forth herein and shall become effective on execution of this LOI. The Company understands that time is of the essence with respect to an advance in the amount of USD$1,500,000 and hereby agrees to provide such an advance of USD$1,500,000, in immediately available funds, with $750,000 due within five (5) business days of the execution of this LOI and the remaining $750,000 subject to the completion or waiver by the Company, of the following conditions: (a) completion by Vortex of the audit of its financial statements as required to be filed by the Company upon the Closing (as defined below) in accordance with the Securities Exchange Act of 1934, as amended (the "Exchange Act"); (b) evidence that Vortex has access to at least 1,000 Bitmain S9 miners directly from Bitmain; (c) a valid power contract confirming both the available power on the property under which Vortex operates and the cost per kilowatt; and (d) a valid lease agreement for the property under which Vortex operates. Such advances will be subject to the terms and conditions of a Secured Promissory Note and Security Agreement in the form of Exhibit A attached hereto (the "LOI Advances").

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2. The Company and Vortex agree that they will enter into a mutually agreed upon definitive agreement containing substantially the same terms and provisions as set forth in Paragraphs 3-14 of this LOI within thirty (30) calendar days from the date of execution of this LOI (the "Definitive Agreement").

3. Upon the satisfaction of the conditions set forth herein and in the Definitive Agreement, the Company will acquire all of the issued and outstanding membership interest of Vortex in exchange for the issuance to the members of Vortex of 65,000,000 shares of common stock of the Company. At the Closing, Vortex shall become wholly-owned by the Company and the Secured Promissory Notes and its associated Security Agreements evidencing the respective LOI Advances shall be cancelled as an intercompany loan in connection with the Exchange. The Security Agreement shall also be simultaneously extinguished in this event.

4. The closing of the Exchange (the "Closing") shall occur on or before thirty (30) calendar days from the date on which Vortex completes the audit of its financial statements as required to be filed by the Company upon the Closing in accordance with the Exchange Act and approval by Vortex members and note holders (if any) of the Definitive Agreement and the transactions contemplated thereunder and hereunder. Immediately prior to the Closing, the Company will have 10,000,000 shares of common stock, on a fully diluted basis, issued and outstanding (excluding any shares issued under the Financings, as defined below).  At the Closing, after giving effect to the Exchange, the capitalization of the Company will be as set forth on Exhibit B.

5. After the Closing, the Company will be managed by Vortex's current management and board of directors.  The existing board of directors and officers of the Company will resign effective as of the Closing and be replaced by officers and directors to be designated by Vortex.

6. In consideration for the proposed transactions, the Company shall, upon completion of the Closing, issue 65,000,000 shares of common stock of the Company to the currently existing members of Vortex (the "Vortex Members"). Within sixty (60) days of the execution of this LOI, the Company commits to offer and sell  up to 2,500,000 shares of its common stock at a price of $1.00 per share (or such price as calculated on a pre-stock split basis) and warrants to purchase up to 2,500,000 shares of its common stock (the "First Financing") in part to satisfy the amounts under the LOI Advances. The warrants will be issued in two series, Series A and B, each series exercisable for a period of twelve (12) months (subject to acceleration in certain circumstances) at a price of $1.25 per share (as adjusted for stock splits and dividends) for Series A and at a price of $1.50 per share for Series B, provided, however, the Company has call options to exercise each series of warrants for cash if the volume weighted average price ("VWAP") of the Company's common stock is above $1.25 per share or above $1.50 per share (as adjusted for stock splits and dividends), according to each Series' exercise prices, respectively, over a consecutive five (5) trading day period. If the Company exercises either call option, the Company shall issue to the holder(s) of such warrant, a new twelve month warrant to purchase up to the equivalent number shares of its common stock for the respective Series A or Series B warrant, with an exercise price for the respective Series equal to the greater of: (a) 90% of the VWAP of the Company's common stock for the 5 trading days preceding such call option exercise; or (b) the same exercise prices as the respective original Series A or B warrants. The Company shall be obligated to file a registration statement on Form S-1 with the Securities Exchange Commission to register all of such shares and warrants underlying the First Financing no later than ninety (90) days of the Closing. If the registration statement is not declared effective by the Securities Exchange Commission within six (6) months of the filing date, then the warrants shall be exerciseable on a cashless basis.

Within sixty (60) days of the effective date of the registration statement underlying the First Financing, the Company shall use best efforts to raise additional capital in the amount of up to $10,000,000 by offering to sell  up to 10,000,000 shares of its common stock at a price equal to no greater than 75% of the VWAP of the Company's common stock over a consecutive twenty (20) trading day period (the "Purchase Price Per Share") and warrants to purchase up to 5,000,000 shares of its common stock (the "Second Financing," and together with the First Financing, the "Financings"). The warrants will be exercisable for a period of twelve (12) months (subject to acceleration in certain circumstances) at a price per share equal to 1.5 multiplied by the Purchase Price Per Share. The Company shall be obligated to file a registration statement on Form S-1 with the Securities Exchange Commission to register all of such shares and warrants underlying the Second Financing either in advance of, or no later than thirty (30) days of the closing of the Second Financing.  If the registration statement is not declared effective by the Securities Exchange Commission within six (6) months of the filing date, then the warrants shall be exerciseable on a cashless basis. After the Closing and the Financings, the current Vortex Members will hold approximately 74% of the outstanding shares of capital stock of the Company.

7. The Company shall have no more than 87,500,000 shares of common stock issued and outstanding after completion of the Financings and Exchange, excluding any shares of common stock issuable under outstanding warrants or options. In the event the Company fails to meet the terms of the Financings, unless waived by the parties hereto, the Company and Vortex will mutually agree to take all necessary actions to rescind the Exchange in the most cost-effective and expeditious manner.

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8. At the Closing, the Company will have no more than USD$1,000 in liabilities outstanding and no undisclosed liabilities, commitments or other obligations of any kind other than the Company's obligations to Vortex pursuant to this LOI and the Definitive Agreement.

9. All of the  legal, accounting or other fees and expenses related to the transactions contemplated under this LOI shall be paid for by the Company, and shall be offset against the First Financing amount.

10. The board of directors of Vortex and Vortex's members have approved this LOI and the transactions contemplated hereunder.

11. The parties intend for the post-Closing and post-Financings capitalization table of the Company to be substantially as attached hereto as Exhibit B. Any update to Exhibit B between now and the execution of the Definitive Agreement will have no effect on total number of shares (65,000,000) issued by Company to Vortex.

12. The Company shall advance any audit fees necessary to obtain an audit and comply with the filing requirements of the Exchange Act.  Any advances by the Company under this Paragraph 12 for audit fees prior to the Closing shall be in addition to the Advance, and shall be offset against the First Financing amount.

13. The Definitive Agreement shall contain customary representation and warranties, covenants and indemnification provisions as shall be mutually agreed upon by Vortex and the Company.

14. Vortex hereby grants to the Company a limited and non-exclusive license to use the names "Vortex Blockchain" and "Liberty Coin Farms". Vortex further agrees to provide consents, as may be required by the Company to make filings for the use of such name; provided, however, that in no event shall Vortex be precluded from continuing to use any names currently used by Vortex. In the event Closing does not occur, the Company agrees to immediately change its name to one unrelated to Vortex.

15. In consideration of the time and effort the Company will incur to pursue this transaction, Vortex agrees that, from the date of execution of this LOI (or, if sooner, until such time as this LOI is terminated) until the Closing, neither Vortex nor any person or entity acting on its behalf will in any way directly or indirectly (i) solicit, initiate, encourage or facilitate any offer to directly or indirectly purchase Vortex or any of its material assets, intellectual property or equity, (ii) enter into any discussions, negotiations or agreements with any person or entity which provide for such purchase, or (iii) provide to any persons other than its members or shareholders or the Company or its representatives any information or data related to such purchase or afford access to the properties, books or records of Vortex to any such persons.  If Vortex, or its representatives receive any inquiry or proposal offering to purchase Vortex or any part of its assets or equity, Vortex will promptly notify the Company. This exclusivity period will expire if (i) this LOI is terminated or (ii) either party is not able to fulfill its obligations hereunder as evidenced by written notice to the other party. No party hereto will make any disclosure or public announcements of the proposed transactions, the LOI or the terms thereof without the prior consent of the other party, which shall not be unreasonably withheld, or except, and only to the extent, as required by the applicable rules and regulations of the Securities and Exchange Commission.

16. Prior to the Closing, the Company and its representatives shall maintain the confidentiality of all confidential information that is provided to the Company by Vortex or its representatives except to the extent such disclosure is required by law.  Each party agrees and acknowledges that such party and its directors, officers, employees, agents and representatives will disclose business information and information about the proposed transaction in the course of securing financings for the Company and Vortex and that the parties and their representatives may be required to disclose that information under the continuous disclosure requirements of the Exchange Act.

17. This LOI shall be construed in accordance with, and governed by, the laws of the State of Nevada, and each party separately and unconditionally subjects to the jurisdiction of any court of competent authority in the State of Nevada, and the rules and regulations thereof, for all purposes related to this agreement and/or their respective performance hereunder.

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18. The parties shall prepare, execute and file any and all documents necessary to comply with all applicable federal and state securities laws, rules and regulations in any jurisdiction where they are required to do so.

19. If any term or provision hereof shall be held illegal or invalid, this LOI shall be construed and enforced as if such illegal or invalid term or provision had not been contained herein.

20. This LOI may be executed in counterparts, by original or facsimile signature, with the same effect as if the signatures to each such counterpart were upon a single instrument; and each counterpart shall be enforceable against the party actually executing such counterpart.  All counterparts shall be deemed an original copy.

21. The delay or failure of a party to enforce at any time any provision of this LOI shall in no way be considered a waiver of any such provision, or any other provision of this LOI.  No waiver of, delay or failure to enforce any provision of this LOI shall in any way be considered a continuing waiver or be construed as a subsequent waiver of any such provision, or any other provision of this LOI.

22. This LOI may be terminated prior to entering into the Definitive Agreement (i) by mutual written agreement of the parties, (ii) by either party if the Definitive Agreement has not been entered into by March 31, 2018 through no fault of terminating party, or (iii) by either party in the event of a material breach of this LOI by the other party. Except for any monies advanced or loaned under this LOI, neither party shall be entitled to any compensation or damages on any ground whatsoever which may be due to or arising from any termination of this LOI.

[SIGNATURE PAGE FOLLOWS]

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DATED EFFECTIVE: March 7, 2018.

UA Granite Corporation

By: /s/ Angel Luis Reynoso Vasquez

Name:          Angel Luis Reynoso Vasquez

Title:            Authorized Signatory

Vortex Blockchain, LLC

By: /s/ Craig Bergman 

Name:  Craig Bergman

Title:  Managing Member

Address: 315 SW 14th St,

Des Moines, IA

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EXHIBIT A

SECURED PROMISSORY NOTE AND SECURITY AGREEMENT

(Attached)

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EXHIBIT B

CAPITALIZATION TABLE

 

 

	 	
Shares at Closing

	
Percentage

	
Shares after

 Closing and Financings

	
Percentage

	
Current (Company) Shareholders

	
10,000,000

	
13.33%

	
10,000,000

	
11.43%

	 	 	 	 	 
	
Vortex Members

	
65,000,000

	
86.67%

	
65,000,000

	
74.29%

	 	 	 	 	 
	
New Investors under Financings

	 	 	
12,500,000

	
14.28%

	 	 	 	 	 
	
Total

	
75,000,000

	
100.00%

	
87,500,000

	
100.00%

	 	 	 	 	 
	
Warrant Holder

	
Price

	 	 	 	 
	
Financing Warrants

	
$1.00

	 	 	
12,500,000

	 
	 	 	 	 	 
	
Fully Diluted Number

	
75,000,000

	 	
100,000,000

	 

7EXHIBIT 10.2

THE TRANSFER OF THIS NOTE IS SUBJECT TO RESTRICTIONS CONTAINED HEREIN.  THIS NOTE HAS BEEN ISSUED IN RELIANCE UPON THE REPRESENTATION OF THE HOLDER THAT IT HAS BEEN ACQUIRED FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TOWARD THE RESALE OR OTHER DISTRIBUTION THEREOF.  THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS.

SECURED PROMISSORY NOTE

	
$750,000   

	
 

	
March 7, 2018

	
 

	
 

	
Des Moines, Iowa

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

For Value Received, Vortex Blockchain, LLC, an Iowa limited liability company, ("Borrower"), hereby unconditionally promises to pay to the order of UA Granite Corporation, a Nevada corporation ("Lender"), in lawful money of the United States of America and in immediately available funds, the principal sum of SEVEN HUNDRED FIFTY THOUSAND DOLLARS ($750,000) (the "Loan"), together with accrued and unpaid interest, in the manner set forth below.

This Secured Promissory Note (this "Note") is the Note referred to in and is executed and delivered in connection with that certain Binding Letter of Intent (the "LOI") dated as of March 7, 2018, between Borrower and Lender.  This Note is secured pursuant to the terms and conditions set forth in that certain Security Agreement dated as of even date herewith and executed and delivered by Borrower in favor of Lender (as the same may from time to time be amended, modified, supplemented or restated, the "Security Agreement"), a copy of which is attached hereto as Exhibit A.  Additional rights of Lender are set forth in the Security Agreement.  All capitalized terms used herein and not otherwise defined herein shall have the respective meanings given to them in the Security Agreement.

1. Principal Repayment; Maturity.  Unless this Note has been satisfied in accordance with the terms of Section 5 below, the entire outstanding principal balance and all unpaid accrued interest shall become fully due and payable on maturity (the "Maturity Date").  The Maturity Date shall be the first to occur of: (a) an Event of Default (as hereinafter defined); (b) the closing of a reverse merger acquisition transaction between Borrower and Lender, as contemplated by the LOI; or (c) six (6) months from the date of termination of the LOI by Lender.  All payments under this Note shall be made in lawful money of the United States of America to Lender at 31C Principal Torre Alta, San Felipe, Puerto Plata, Dominican Republic EH009E3, or at such other place as Lender may designate in writing to Borrower.

2. Interest Rate and Payment.

2.1 Interest on the outstanding principal amount hereof on and from the date hereof shall accrue at the simple interest rate of eight and one-quarter percent (8.25%) per annum or the maximum rate permissible by applicable law, whichever is less.  Interest shall be calculated on the basis of a 365-day year for the actual number of days elapsed.  Upon the occurrence and during the continuance of an Event of Default pursuant to Section 6 below, all amounts owing hereunder shall bear interest at a per annum simple interest rate of twelve percent (12%) or the maximum rate permissible by applicable law, whichever is less.

2.2 Accrued and unpaid interest shall be due and payable on a quarterly basis following the date of this Note (i.e., every 90 days following the date of this Note).

3. Application of Payments.  Payments on this Note shall be applied first to accrued interest, and thereafter to principal.

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4. Payment Dates.  Any payment date under this Note that falls on a Saturday, Sunday or other day on which banks are generally closed in the State of Nevada shall be due on the next business day on which such banks are open.

5. Satisfaction of Principal Repayment.  Lender and Borrower acknowledge that the consummation of the reverse merger acquisition transaction between Borrower and Lender, as contemplated by the LOI, shall extinguish the loan repayment obligation and that of any accrued interest under this Note.  Upon the closing of the reverse merger acquisition transaction between Borrower and Lender, as contemplated by the LOI, the Security Agreement shall cease to exist and all necessary releases as to any secured items shall be provided by Lender immediately thereafter.

6. Default and Remedies.  The occurrence of any one or more of the following events shall constitute a default under this Note (an "Event of Default"):

6.1 Borrower's failure to pay any outstanding principal amount of or accrued unpaid interest under this Note when due, which such amount is not paid within five (5) days of the date due;

6.2 Borrower's breach of any material provision of this Note or any material provision of the Security Agreement, which such breach is not cured within thirty (30) days after sends written notice to Borrower specifying such breach;

6.3 (i) Borrower files any petition or action for relief under any bankruptcy, reorganization, insolvency or moratorium law or any other law for the relief of, or relating to, debtors, now or hereafter in effect, or makes any assignment for the benefit of creditors or takes any action in furtherance of any of the foregoing or (ii) an involuntary petition is filed against Borrower, which such petition is not dismissed or discharged within ninety (90) days) under any bankruptcy statute now or hereafter in effect, or a custodian, receiver, trustee, assignee for the benefit of creditors (or other similar official) is appointed to take possession, custody or control of any material property of Borrower;

6.4 Borrower sells, transfers, conveys, assigns or pledges a majority of its equity or a substantial part of its assets to any third party; or

6.5 The reverse merger acquisition transaction between Borrower and Lender, as contemplated by the LOI, does not close on or before June 8, 2018.

In the event that one or more Events of Default shall have occurred and be continuing, (i) Lender may, upon written notice to Borrower, declare this Note in default and all unpaid outstanding principal on and accrued interest under this Note shall be immediately due and payable, without presentment, demand, protest, further notice, and all other notices and demands whatsoever, all of which are hereby waived by Borrower, and (ii) Lender may exercise any or all of his rights, powers or remedies under this Note, the Security Agreement, and applicable law.

7. Security.  Until the principal of this Note, accrued interest and any other amounts that may be payable hereunder are paid in full, the full amount of this Note is secured by the collateral identified and described as security therefore in the Security Agreement.

8. Use of Proceeds.  Borrower shall use the principal amount of this Note for general working capital purposes.

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9. Restricted Securities.  By acceptance of this Note, Lender represents and acknowledges to Borrower that (a) this Note will constitute "restricted securities" as such term is used in the rules and regulations under the Securities Act of  and that such securities have not been and will not be registered under the Securities Act or any state securities laws, and that such securities must be held indefinitely unless registration is effected or transfer can be made pursuant to appropriate exemptions; (b) Lender has read, and fully understands, the terms of this Note; (c) Lender is purchasing this Note for investment for its own account and not with a view to or for sale in connection with any distribution of this Note and it has no intention of selling such securities in a public distribution in violation of the federal securities laws or any applicable state securities laws; (d) Lender is an "accredited investor" within the meaning of Rule 501 of Regulation D promulgated by the Securities and Exchange Commission; (e) by reason of its business and financial experience, Lender has the capacity to protect its own interests in this transaction; and (f) Lender understands that an investment in this Note contains substantial risk, that Lender may suffer a complete loss of its investment, and Lender can afford and withstand a complete loss of its investment without economic hardship.

10.  Ranking of Priority/Consent Required for New Borrowings.  The indebtedness evidenced by this Note shall senior to any other debt obligation of Borrower.

11. Waiver.  Borrower waives presentment and demand for payment, notice of dishonor, protest and notice of protest of this Note, and shall pay all costs of collection when incurred, including, without limitation, reasonable attorneys' fees, costs and other expenses.

12.  Governing Law.  This Note shall be governed by, and construed and enforced in accordance with, the laws of the State of Nevada, excluding conflict of laws principles that would cause the application of laws of any other jurisdiction.

13.   Successors and Assigns.  The provisions of this Note shall inure to the benefit of and be binding on any successor to Borrower and shall extend to any holder hereof.  Lender may assign this Note, subject to compliance with applicable securities and other laws and the prior written consent of Borrower, not to be unreasonably withheld.  Lender shall provide written notice to Borrower of any such proposed assignment, indicating the name and address of the assignee and the date of the assignment.  Upon any such permitted assignment, the assignee shall become the Lender under this Note for all intents and purposes.

14. Notices. All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by electronic mail if sent during normal business hours of the recipient, if not, then on the next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to Borrower at Vortex Blockchain, LLC, 315 14th Street, Des Moines, Iowa 50309, Attention Craig Bergman, email: craig@vortexblockchain.com, and to Lender at 31C Principal Torre Alta, San Felipe, Puerto Plata, Dominican Republic EH009E3, email: angelreynosouagz@gmail.com or at such other address or email address as Borrower or Lender may designate by ten (10) days advance written notice to the other parties hereto.

 [Signature Page Follows]

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IN WITNESS WHEREOF, Borrower has caused this Secured Promissory Note to be duly executed and delivered on and as of the day and year first written above.

	 	
Borrower

 

VORTEX BLOCKCHAIN,  LLC

By:  /s/ Craig Bergman

Name: Craig Bergman

Title: Managing Member

 

 

 

Accepted and Agreed to:

 

Lender

UA GRANITE CORPORATION

By:  /s/ Angel Luis Reynoso Vasquez

Name: Angel Luis Reynoso Vasquez

Title: Authorized Signatory

	 	 

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EXHIBIT A

Security Agreement

[See Attached]

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