Document:

EX-4.1

 

Exhibit 4.1

THE SECURITIES REPRESENTED BY THIS WARRANT HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (“1933 ACT”) OR ANY STATE SECURITIES LAWS.
SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
THEREFROM UNDER THE 1933 ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

THE SALE, ASSIGNMENT, CONVEYANCE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE SECURITIES REPRESENTED
BY THIS WARRANT IS PROHIBITED EXCEPT PURSUANT TO REGISTRATION UNDER THE 1933 ACT; OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT, AND ANY CERTIFICATE REPRESENTING
WARRANT SHARES SHALL BEAR A LEGEND TO SUCH EFFECT.

2007-A-                    

WARRANT TO PURCHASE SHARES

OF THE COMMON STOCK OF

CONSOLIDATION SERVICES, INC..

(Void after Expiration Date – December 31, 2009)

Issue Date: February 21, 2007

     This
certifies that _______ or his successors or assigns (“Holder”) shall be entitled
to purchase from Consolidation Services, Inc., a Delaware corporation (“Company”), having its
principal place of business at 2756 N. Green Valley Parkway,
Suite 225, Henderson, NV 89014, _______ fully paid and non-assessable shares (“Warrant Shares”) of the Company’s common stock, par
value $.001 per share (“Common Stock”), at a price per share equal to the Exercise Price (as
defined below).

     This Warrant is being issued to the Holder in connection with the February 9, 2007 offering
(the “Offering”) of up to 1,000,000 shares (the “Shares”) at a price of $0.05 per Share or an
aggregate of $50,000. For each share issued in the Offering the Holder will receive warrants to
purchase (one) share of Common Stock. This Warrant is one of several which will be identical
except for names and amounts. Capitalized terms used herein and not otherwise defined shall have
the respective meanings set forth in the Subscription Agreement.

     The initial exercise price (“Exercise Price”) of this Warrant will be equal to $3.00 per
share, subject to redemption and/or a temporary reduction by the Company as described in Sections
16 and 2.1, respectively, below.

     This Warrant shall be immediately exercisable into shares of Common Stock at any time, or from
time-to-time, up to and including 5:00 p.m. (Pacific Coast time) on December 31, 2009 (“Expiration
Date”), unless previously called or extended by the

 

 

Company on thirty (30) days’ prior written notice; provided, however, if such date is not a
Business Day, then on the Business Day immediately following such date. This Warrant is
exercisable in whole or in part upon the surrender to the Company at its principal place of
business (or at such other location as the Company may advise the Holder in writing) of this
Warrant properly endorsed with a form of subscription in substantially the form attached hereto
duly filled in and signed and, if applicable, upon payment in cash or by check of the aggregate
Exercise Price for the number of shares for which this Warrant is being exercised as determined in
accordance with the provisions hereof.

     Upon the exercise of this Class A Warrant for the $3.00 Exercise Price, the holder shall
receive one share of Common Stock and a Class B Common Stock Purchase Warrant (“Class B Warrant”)
to purchase one share of Common Stock at $6.00 per share, subject to redemption and/or temporary
reduction by the Company. The Class B Warrant shall be exercisable into shares of Common Stock at
any time, or from time-to-time, up to and including 5:00 p.m. (Pacific Coast time) on December 31,
2011 (“Class B Expiration Date”), unless previously called or extended by the Company on thirty
(30) days’ prior written notice; provided, however, if such date is not a Business Day, then on the
Business Day immediately following such date.

     Upon the exercise of the Class B Warrant for the $6.00 Exercise Price, the holder shall
receive one share of Common Stock and a Class C Common Stock Purchase Warrant (“Class C Warrant”)
to purchase one share of the Common Stock at $12.00 per share, subject to redemption and/or
temporary reduction by the Company. The Class C Warrant shall be exercisable into shares of Common
Stock at any time, or from time-to-time, up to and including 5:00 p.m. (Pacific Coast time) on
December 31, 2013 (“Class C Expiration Date”), unless previously called or extended by the Company
on thirty (30) days prior written notice; provided, however, if such date is not a Business Day,
then on the Business Day immediately following such date.

	1.	 	Exercise; Issuance of Certificates; Payment for Shares.

	 	1.1	 	General. This Warrant is exercisable in full, or in part for 100 or more
 shares, in increments of 100 shares, except for the final exercise which may be for the
remainder, at the option of the Holder of record at any time or from time, to time, up
to the Expiration Date for all of the shares of Common Stock (but not for a fraction of
a share) which may be purchased hereunder. In the case of the exercise of less than
all of the Warrants represented hereby, the Company shall cancel this Warrant
Certificate upon the surrender hereof and shall execute and deliver a new Warrant
Certificate or Warrant Certificates of like tenor for the balance of such
Warrants. The Company agrees that the shares of Common Stock purchased under
this Warrant shall be and are deemed to be issued to the Holder hereof as the record
owner of such shares as of the close of business on the date on which the exercise
notice (attached hereto as Schedule A or B) is delivered to the Company via facsimile;
provided, however, that in such case this Warrant shall be surrendered to the

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	 	 	 	Company within three (3) business days. Certificates for the shares of Common Stock
so purchased, together with any other securities or property to which the Holder is
entitled upon such exercise, shall be delivered to the Holder by the Company at the
Company’s expense within a reasonable time after the rights represented by this
Warrant have been so exercised, and in any event, within three business days of such
exercise and delivery of the Exercise Price. The Company shall, no later than the
close of business on the first business day following the date on which the Company
receives the exercise notice by facsimile transmission issue and deliver to the
Company’s Transfer Agent irrevocable instructions to issue and deliver or cause to
be delivered to such Holder the number of Warrant Shares exercised within two
business days thereafter by either express mail or hand delivery. Notwithstanding
the foregoing, delivery of the Warrant Shares is contingent upon receipt of the
Exercise Price in cleared U.S. funds within two business days following the
Company’s receipt of the exercise notice. Each Common Stock certificate so
delivered shall be in such denominations of 100 or more shares of Common Stock, in
increments of 100 or more, as may be requested by the Holder hereof and shall be
registered on the Company’s books in the name designated by such Holder.
	 
	 	1.2	 	Exercise for Cash
	 
	 	 	 	This Warrant may be exercised, in whole at any time or in part from time to time,
prior to 5:00 P.M., Pacific Coast time, December 31, 2009, unless previously called
or extended by the Company, by the Holder by the facsimile delivery of the exercise
notice, as attached hereto, on the date of the exercise and by surrender of this
Warrant within three (3) business days from the exercise day at the address set
forth hereof, together with proper payment of the aggregate Exercise Price payable
hereunder for the Warrant Shares (“Aggregate Warrant Price”), or the proportionate
part thereof if this Warrant is exercised in part. Payment for the Warrant Shares
shall be made by wire, certified or bank check or check payable to the order of the
Company. If this Warrant is exercised in part, this Warrant must be exercised for a
number of whole shares of the Common Stock, and the Holder is entitled to receive a
new Warrant covering the Warrant Shares which have not been exercised and setting
forth the proportionate part of the Aggregate Warrant Price applicable to such
Warrant Shares. Upon such surrender of this Warrant, the Company will (a) issue a
certificate or certificates in the name of the Holder for the largest number of
whole shares of the Common Stock to which the Holder shall be entitled and (b)
deliver the other securities and properties receivable upon the exercise of this
Warrant, or the proportionate part thereof if this Warrant is exercised in part,
pursuant to the provisions of this Warrant.

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	 	1.3	 	Cashless Exercise
	 
	 	 	 	The Holder may effect a Cashless Exercise by surrendering this Warrant to the
Company and noting on the Exercise Notice that the Holder wishes to effect a Cashless
Exercise, upon which the Company shall issue to the Holder the number of Warrant
Shares determined as follows:

X = Y x (A-B)/A

     where:

X = the number of Warrant Shares to be issued to the Holder;

Y = the number of Warrant Shares with respect to which this Warrant is being exercised;

A = the Market Price (as defined elsewhere in this Warrant) as of the
Exercise Date; and

B = the Exercise Price.

	 	 	 	For purposes of Rule 144, it is intended and acknowledged that the Warrant Shares
issued in a Cashless Exercise transaction shall be deemed to have been acquired by
the Holder, and the holding period for the Warrant Shares required by Rule 144 shall
be deemed to have been commenced, on the Issue Date.
	 
	 	1.4	 	Exercise for Non-Cash Consideration:
	 
	 	 	 	In case any portion of the consideration to be received by the Company shall be in a
form other than cash, then such Exercise Price shall be measured to that extent by
the fair market value of such non-cash consideration. The Exercise Price may be
tendered in shares of the Company’s Common Stock owned by the Holder and having a
fair market value equal to the Exercise Price. Such non-cash consideration may also
be in the form of notes, exchanges, services, goods and any and all consideration
deemed acceptable by the Company. The fair market value shall be determined solely
in good faith by the Board of Directors of the Company, without need for disclosure
of fair market value calculation.
	 
	 	1.5	 	Shares to be Fully Paid; Reservation of Shares.  The Company covenants and
agrees that all shares of Common Stock which may be issued upon the exercise of the
rights represented by this Warrant will, upon issuance, be duly authorized, validly
issued, fully paid and nonassessable and free from all preemptive rights of any
shareholder and free of all taxes, liens and charges with respect to the issue thereof.
The Company further covenants and agrees that, during the period within

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	 	 	 	which the rights represented by this Warrant may be exercised, the Company will at
all times have authorized and reserved, for the purpose of issue or transfer upon
exercise of the subscription rights evidenced by this Warrant, a sufficient number
of shares of authorized but unissued Common Stock, when and as required to provide
for the exercise of the rights represented by this Warrant. The Company will take
all such action as may be necessary to assure that such shares of Common Stock may
be issued as provided herein without violation of any applicable law or regulation,
or of any requirements of any domestic securities exchange upon which the Common
Stock or other securities may be listed; provided, however, that the Company shall
not be required to effect a registration under federal or state securities laws with
respect to such exercise other than as required by Section 7.7 herein. The Company
will not take any action which would result in any adjustment of the Exercise Price
if the total number of shares of Common Stock issuable after such action upon
exercise of all outstanding warrants, together with all shares of Common Stock then
outstanding and all shares of Common Stock then issuable upon exercise of all
options and upon the conversion of all convertible securities then outstanding,
would exceed the total number of shares of Common Stock or equity securities then
authorized by the Company’s Certificate of Incorporation, as amended (“Company
Charter”).
	 
	 	1.6	 	BUY-IN. In addition to any other rights available to a Holder, if the Company
fails to deliver to the Holder a certificate representing Warrant Shares by the third
Trading Day after the date on which delivery of such certificate is required by this
Warrant, and if after such third Trading Day the Holder purchases (in an open market
transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale
by the Holder on or after the Exercise Date of the Warrant Shares that the Holder
anticipated receiving from the Company (a “Buy-In”), then the Company shall, within
three Trading Days after the Holder’s request and in the Holder’s discretion, either
(i) pay cash to the Holder in an amount equal to the Holder’s total purchase price
(including brokerage commissions, if any) for the shares of Common Stock so purchased
(the “Buy-In Price”), at which point the Company’s obligation to deliver such
certificate (and to issue such Common Stock) shall terminate, or (ii) promptly honor
its obligation to deliver to the Holder a certificate or certificates representing such
Common Stock and pay cash to the Holder in an amount equal to the excess (if any) of
the Buy-In Price over the product of (A) such number of shares of Common Stock, times
(B) the Closing Price on the date of the event giving rise to the Company’s obligation
to deliver such certificate. Notwithstanding the foregoing, the Company shall have no
liability under this subsection for the Buy-In Price if it has compiled with the
requirements of subsection 1.1 above and, notwithstanding it using its best efforts to
have its transfer agent deliver the Warrant Shares to the Holders within three trading
days of the Holder’s request, such Warrant Shares are not delivered on a timely basis.

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2. Determination or Adjustment of Exercise Price and Number of Shares. The Exercise Price
and the number of shares purchasable upon the exercise of this Warrant shall be subject to
adjustment from time to time upon the occurrence of certain events described in this Section 2.
Upon each adjustment of the Exercise Price, the Holder of this Warrant shall thereafter be entitled
to purchase, at the Exercise Price resulting from such adjustment, the number of shares obtained by
multiplying the Exercise Price in effect immediately prior to such adjustment by the number of
shares purchasable pursuant hereto immediately prior to such adjustment, and dividing the product
thereof by the Exercise Price resulting from such adjustment.

	 	2.1	 	Adjustment of Exercise Price: Temporary Reduction. Upon written Notice as
provided for herein, at the sole discretion of the Company, the Exercise Price of this
Warrant may be temporarily reduced. At the end of such discretionary reduction period,
the price shall revert back to the defined Exercise Price.
	 
	 	2.2	 	Subdivision or Combination of Common Stock. In case the Company shall at
any time subdivide or reclassify its outstanding shares of Common Stock into a greater
number of shares, the Exercise Price in effect immediately prior to such subdivision
shall be proportionately reduced, and conversely, in case the outstanding shares of
Common Stock of the Company shall be combined or reclassified into a smaller number of
 shares, the Exercise Price in effect immediately prior to such combination shall be
proportionately increased.
	 
	 	2.3	 	Dividends in Common Stock, Other Stock, Property, Reclassification. If at any
time or from time to time the holders of Common Stock (or any shares of stock or other
securities at the time receivable upon the exercise of this Warrant) shall have
received or become entitled to receive, without payment therefore:

	 	2.3.1	 	Stock, Common Stock or any shares of capital stock or other
securities which are at any time directly or indirectly convertible into or
exchangeable for Common Stock, or any rights or options to subscribe for,
purchase or otherwise acquire any of the foregoing by way of dividend or other
distribution,
	 
	 	2.3.2	 	Any cash paid or payable otherwise than as a cash dividend, or
	 
	 	2.3.3	 	Stock, Common Stock or additional capital stock or other
securities or property (including cash) by way of spinoff, split-up,
reclassification, combination of shares or similar corporate rearrangement,
(other than shares of Common Stock issued as a stock split or adjustments in
respect of which shall be covered by the terms of Section 2.1 above), then and
in each such case, the Holder hereof shall, upon the exercise of this Warrant,
be entitled

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	 	 	 	to receive, in addition to the number of shares of Common Stock or other
capital stock receivable thereupon, and without payment of any additional
consideration therefor, the amount of stock and other securities and
property (including cash in the cases referred to in clause (2.2.2) above
and this clause (2.2.3)) which such Holder would hold on the date of such
exercise had he been the holder of record of such Common Stock as of the
date on which holders of Common Stock received or became entitled to
receive such shares or all other additional stock and other securities and
property.

	 	2.4	 	Reorganization, Reclassification, Consolidation, Merger or Sale.

	 	2.4.1	 	If any recapitalization, reclassification or reorganization of
the capital stock of the Company, or any consolidation or merger of the Company
with another corporation, or the sale of all or substantially all of its assets
or other transaction shall be effected in such a way that holders of Common
Stock shall be entitled to receive stock, securities, or other assets or
property (an “Organic Change”), then, as a condition of such Organic Change,
lawful and adequate provisions shall be made by the Company whereby the Holder
hereof shall thereafter have the right, upon exercise of this Warrant, to
purchase and receive (in lieu of the shares of the Common Stock of the Company
immediately theretofore purchasable and receivable upon the exercise of the
rights represented by this Warrant) such shares of stock, securities or other
assets or property as may be issued or payable with respect to or in exchange
for a number of outstanding shares of such Common Stock equal to the number of shares of such stock immediately theretofore purchasable and receivable upon
the exercise of the rights represented by this Warrant. In the event of any
Organic Change, appropriate provision shall be made by the Company with respect
to the rights and interests of the Holder of this Warrant to the end that the
provisions hereof (including, without limitation, provisions for adjustments of
the Exercise Price and of the number of shares purchasable and receivable upon
the exercise of this Warrant) shall thereafter be applicable, in relation to
any shares of stock, securities or assets thereafter deliverable upon the
exercise hereof. The Company will not effect any such consolidation, merger or
sale unless, prior to the consummation thereof, the successor corporation (if
other than the Company) resulting from such consolidation or the corporation
purchasing such assets shall assume by written instrument executed and mailed
or delivered to the Holder hereof at the

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	 	 	 	last address of such Holder appearing on the books of the Company,
the obligation to deliver to such Holder, upon Holder’s exercise of
this Warrant and payment of the purchase price in accordance with the
terms hereof, such shares of stock, securities or assets as, in
accordance with the foregoing provisions, such Holder may be entitled
to purchase.
	 
	 	2.4.2	 	No adjustment of the Exercise Price, however, shall be made in
an amount less than $.01 per Share, but any such lesser adjustment shall be
carried forward and shall be made at the time and together with the next
subsequent adjustment which together with any adjustments so carried forward
shall amount to $.01 per Share or more.

2.5 Certain Events. If any change in the outstanding Common Stock of the Company or any
other event occurs as to which the other provisions of this Section 2 are not strictly
applicable or if strictly applicable would not fairly protect the purchase rights of the
Holder of the Warrant in accordance with such provisions, then the Board of Directors of the
Company shall make an adjustment in the number and class of shares available under the
Warrant, the Exercise Price or the application of such provisions, so as to protect such
purchase rights as aforesaid. The adjustment shall be such as will give the Holder of the
Warrant upon exercise for the same aggregate Exercise Price the total number, and kind of
 shares as he would have owned had the Warrant been exercised prior to the event and had he
continued to hold such shares until after the event requiring adjustment.

	 	2.6	 	Notices of Change.

	 	2.6.1	 	Upon any determination or adjustment in the number or class of
 shares subject to this Warrant and of the Exercise Price, the Company shall
give written notice thereof to the Holder, setting forth in reasonable detail
and certifying the calculation of such determination or adjustment.
	 
	 	2.6.2	 	The Company shall give written notice to the Holder at least
20 business days prior to the date on which the Company closes its books or
takes a record for determining rights to receive any dividends or
distributions.
	 
	 	2.6.3	 	The Company shall also give written notice to the Holder at
least 20 days prior to the date on which an Organic Change shall take place.

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3. Issue Tax.  The issuance of certificates for shares of Common Stock upon the exercise
of the Warrant shall be made without charge to the Holder of the Warrant for any issue tax (other
than any applicable income taxes) in respect thereof; provided, however, that the Company shall not
be required to pay any tax which may be payable in respect of any transfer involved in the issuance
and delivery of any certificate in a name other than that of the then Holder of the Warrant being
exercised.

4. Closing of Books. The Company will at no time close its transfer books against the
transfer of any warrant or of any shares of stock issued or issuable upon the exercise of any
warrant in any manner which interferes with the timely exercise of this Warrant.

5. No Voting or Dividend Rights; Limitation of Liability. Nothing contained in
this Warrant shall be construed as conferring upon the Holder hereof the right to vote as a
shareholder of the Company. No dividends or interest shall be payable or accrued in respect of
this Warrant, the interest represented hereby, or the shares purchasable hereunder until, and only
to the extent that, this Warrant shall have been exercised, subject to the Holder’s rights under
Section 2 of this Warrant. The Holder of this Warrant shall receive all notices as if a
shareholder of the Company. No provisions hereof, in the absence of affirmative action by the
Holder to purchase shares of Common Stock, and no mere enumeration herein of the rights or
privileges of the Holder hereof, shall give rise to any liability of such Holder for the Exercise
Price or as a shareholder of the Company, whether such liability is asserted by the Company or by
its creditors.

6. Rights and Obligations Survive Exercise of Warrant.  The rights and obligations of the
Company, of the Holder of this Warrant and of the holder of shares of Common Stock issued upon
exercise of this Warrant, shall survive the exercise of this Warrant.

7. Further Representations, Warranties and Covenants of the Company.

	 	7.1	 	Articles and Bylaws. The Company has made available to the Holder true,
complete and correct copies of the Company’s Charter and Bylaws, as amended, through
the date hereof.
	 
	 	7.2	 	Due Authority. The execution and delivery by the Company of this Warrant and
the performance of all obligations of the Company hereunder, including the issuance to
Holder of the right to acquire the shares of Common Stock, have been duly authorized by
all necessary corporate action on the part of the Company, and the Warrant is not
inconsistent with the Company Charter or Bylaws and constitutes a legal, valid and
binding agreement of the Company, enforceable in accordance with its terms.
	 
	 	7.3	 	Consents and Approvals. No consent or approval of, giving of notice to,
registration with, or taking of any other action in respect of any state, federal or
other governmental authority or agency is required with respect to the execution,
delivery and performance by the Company of its

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	 	 	 	obligations under this Warrant, except for any filing required by applicable federal
and state securities laws, which filing will be effective by the time required
thereby.
	 
	 	7.4	 	Issued Securities. All issued and outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid and
nonassessable. All outstanding shares of capital stock were issued in full compliance
with all federal and state securities laws.
	 
	 	7.5	 	Exempt Transaction. Subject to the accuracy of the Holders’ representations in
Section 8 hereof, the issuance of the Common Stock upon exercise of this Warrant will
constitute a transaction exempt from (i) the registration requirements of Section 5 of
the 1933 Act, in reliance upon Section 4(2) thereof, or upon the applicable exemption
under Regulation D, and (ii) the qualification requirements of the applicable state
securities laws.
	 
	 	7.6	 	Compliance with Rule 144. At the written request of the Holder, who proposes
to sell Common Stock issuable upon the exercise of the Warrant in compliance with Rule
144 promulgated by the SEC, the Company shall furnish to the Holder, within five (5)
days after receipt of such request, a written statement confirming the Company’s
compliance with the filing requirements of the SEC as set forth in such Rule, as such
Rule may be amended from time to time.
	 
	 	7.7	 	Registration. The Company hereby grants to the Holder in respect of the
Warrant Shares, and any securities of the Company into which the Warrant Shares are
convertible, “piggy-back” registration rights. For a seven-year period commencing with
the final closing of the Offering, if the Company shall file a registration statement
other than on Form S-4, S-8, or their successor forms, it shall provide the Holder with
at least ten (10) days prior notice of its filing such registration statement and the
opportunity for the Holder to register its Shares, subject to any limitations issued by
an underwriter in an underwritten public offering.

	8.	 	Representations and Covenants of the Holder.

	 	8.1	 	This Warrant has been entered into by the Company in reliance upon the
following representations and covenants of the Holder:

	 	8.1.1	 	Investment Purpose. The Warrant or the Common Stock issuable
upon exercise of the Warrant will be acquired for investment and not with a
view to the sale or distribution of any part thereof, and the Holder has no
present intention of selling or engaging in any public distribution of the same
except pursuant to a registration or exemption.

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	 	8.1.2	 	Private Issue. The Holder understands (i) that the Warrant
and the Common Stock issuable upon exercise of this Warrant are not registered
under the 1933 Act or qualified under applicable state securities laws on the
ground that the issuance contemplated by this Warrant will be exempt from the
registration and qualifications requirements thereof, and (ii) that the
Company’s reliance on such exemption is predicated on the representations set
forth in this Section 8.
	 
	 	8.1.3	 	Disposition of Holders Rights. In no event will the Holder
make a disposition of the Warrant or the Common Stock issuable upon exercise of
the Warrant unless and until (i) it shall have notified the Company of the
proposed disposition, and (ii) if requested by the Company, it shall have
furnished the Company with an opinion of counsel (which counsel may either be
inside or outside counsel to the Holder) satisfactory to the Company and its
counsel to the effect that (A) appropriate action necessary for compliance with
the 1933 Act has been taken, or (B) an exemption from the registration
requirements of the 1933 Act is available. Notwithstanding the foregoing, the
restrictions imposed upon the transferability of any of its rights to acquire
Common Stock issuable on the exercise of such rights do not apply to transfers
from the beneficial owner of any of the aforementioned securities to its
nominee or from such nominee to its beneficial owner, and shall terminate as to
any particular share of stock when (1) such security shall have been
effectively registered under the 1933 Act and sold by the Holder thereof in
accordance with such registration or (2) such security shall have been sold
without registration in compliance with Rule 144 under the 1933 Act, or (3) a
letter shall have been issued to the Holder at its request by the staff of the
SEC or a ruling shall have been issued to the Holder at its request by the SEC
stating that no action shall be recommended by such staff or taken by the SEC,
as the case may be, if such security is transferred without registration under
the 1933 Act in accordance with the conditions set forth in such letter or
ruling and such letter or ruling specifies that no subsequent restrictions on
transfer are required. Whenever the restrictions imposed hereunder shall
terminate, as hereinabove provided, the Holder or holder of a share of stock
then outstanding as to which such restrictions have terminated shall be
entitled to receive from the Company, without expense to such Holder, one or
more new certificates for the Warrant or for such shares of stock not bearing
any restrictive legend.
	 
	 	8.1.4	 	Financial Risk. The Holder has such knowledge and experience
in financial and business matters as to be capable of

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	 	 	 	evaluating the merits and risks of its investment, and has the ability to
bear the economic risks of its investment.
	 
	 	8.1.5	 	Risk of No Registration. The Holder understands that if the
Company does not file reports pursuant to Section 15(d) and/or Section 12(g),
of the Securities Exchange Act of 1934 (“1934 Act”), or if a registration
statement covering the securities under the 1933 Act is not in effect when it
desires to sell (i) the Warrant, or (ii) the Common Stock issuable upon
exercise of the Warrant, it may be required to hold such securities for an
indefinite period. The Holder also understands that any sale of the Warrant or
the Common Stock issuable upon exercise of the Warrant which might be made by
it in reliance upon Rule 144 under the 1933 Act may be made only in accordance
with the terms and conditions of that Rule.

9. Modification and Waiver. This Warrant and any provision hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by (a) the party against which
enforcement of the same is sought or (b) the Company and the holders of at least a majority of the
number of shares into which the Warrants are exercisable (without regard to any limitation
contained herein on such exercise), it being understood that upon the satisfaction of the
conditions described in (a) and (b) above, each Warrant (including any Warrant held by the Holder
who did not execute the agreement specified in (b) above) shall be deemed to incorporate any
amendment, modification, change or waiver effected thereby as of the effective date thereof.
Notwithstanding the foregoing, no modification to this Section 9 will be effective against any
Holder without his consent.

10. Transfer of this Warrant. The Holder may sell, transfer, assign, pledge or otherwise dispose
of this Warrant, in whole or in part, as long as such sale or other disposition is made pursuant to
an effective registration statement or an exemption from the registration requirements of the 1933
Act. Upon such transfer or other disposition (other than a pledge), the Holder shall deliver this
Warrant to the Company together with a written notice to the Company, substantially in the form of
the Transfer Notice attached hereto as Exhibit B (the “Transfer Notice”), indicating the
person or persons to whom this Warrant shall be transferred and, if less than all of this Warrant
is transferred, the number of Warrant Shares to be covered by the part of this Warrant to be
transferred to each such person. Within three (3) Business Days of receiving a Transfer Notice and
the original of this Warrant, the Company shall deliver to the each transferee designated by the
Holder another Warrant(s) of like tenor and terms for the appropriate number of Warrant Shares and,
if less than all this Warrant is transferred, shall deliver to the Holder another Warrant for the
remaining number of Warrant Shares.

11. Notices. Any notice required or permitted hereunder shall be given in
writing (unless otherwise specified herein) and shall be deemed effectively given upon (i) personal
delivery, against written receipt thereof, (ii) delivery via facsimile or e-mail as set forth below
(iii) two business days after deposit with Federal Express or another

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nationally recognized overnight courier service, or (iv) five business days after being forwarded,
postage paid, via certified or registered mail, return receipt requested, addressed to each of the
other parties thereunto entitled at the following addresses, or at such other addresses as a party
may designate by ten days advance written notice.

12. Binding Effect on Successors; Benefit.  As provided in Section 2.3 above,
this Warrant shall be binding upon any corporation succeeding the Company by merger, consolidation
or acquisition of all or substantially all of the Company’s assets. All of the obligations of the
Company relating to the Common Stock issuable upon the exercise of this Warrant shall survive the
exercise and termination of this Warrant. All of the covenants and agreements of the Company shall
inure to the benefit of the successors and assigns of the Holder hereof. This Warrant shall be for
the sole and exclusive benefit of the Holder and nothing in this Warrant shall be construed to
confer upon any person other than the Holder any legal or equitable right, remedy or claim
hereunder.

13. Descriptive Headings and Governing Law. The description headings of the
several sections and paragraphs of this Warrant are inserted for convenience only and do not
constitute a part of this Warrant. This Warrant shall be construed and enforced in accordance
with, and the rights of the parties shall be governed by the laws of the State of Delaware.

14. Lost Warrants. The Company represents and warrants to the Holder hereof that
upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or
mutilation of this Warrant and, in the case of any such loss, theft or destruction, upon receipt of
an indemnity reasonably satisfactory to the Company, or in the case of any such mutilation upon
surrender and cancellation of such Warrant, the Company, at its expense, will make and deliver a
new Warrant, of like tenor, in lieu of the lost, stolen, destroyed or mutilated Warrant.

15. Fractional Shares. No fractional shares shall be issued upon exercise of
this Warrant. The Company shall, in lieu of issuing any fractional share, pay the Holder entitled
to such fraction a sum in cash equal to such fraction multiplied by the then effective Exercise
Price.

16. Redemption. This Warrant may be redeemed at the option of the Company, at a
redemption price (the “Redemption Price”) of $.001 per Warrant at any time upon twenty (20) days’
prior written notice. On and after the date fixed for redemption, the Holder shall have no rights
with respect to this Warrant except to receive the $.001 per Warrant upon surrender of this
Certificate. The Company covenants and agrees that it will honor all Exercise Notices tendered
through the Business Day immediately preceding the Redemption Date. The redemption payment shall
be made in cash on the date fixed for redemption in the Company’s notice of redemption, as
described below (the “Redemption Date”). The redemption payment is due in full on the Redemption
Date. Notwithstanding anything to the contrary contained in this Warrant, the Company shall have
the option, without further compensation to the Holder other than the payment of the Redemption
Price per Warrant, to cause any or all of the Warrants (each, a “non-Exercised Warrant”) which were
not properly exercised on or before the Redemption

13

 

Date to be assigned to one or more third parties (each, a “Standby Purchaser”), effectively
immediately upon the Redemption Date, for the consideration equal to $.001 per Non-Exercised
Warrant payable to the Company, and (c) each Standby Purchaser shall have the right to exercise the
Non-Exercised Warrants so assigned to such Standby Purchaser through the tenth business day
following the Redemption Date.

     The notice of redemption shall specify: (i) the Redemption Price; (ii) the date not more than
twenty (20) days from mailing which is fixed for redemption (the “Redemption Date”); (iii) the
place where Warrant Certificates shall be delivered and the redemption price paid; and (iv) that
the right to exercise the Warrants shall terminate at 5:00 p.m. (Pacific Coast Time) on the
Business Day immediately preceding the Redemption Date. An affidavit of the Secretary or an
Assistant Secretary of the Company that notice of redemption has been mailed shall, in the absence
of fraud, be conclusive evidence of the facts stated therein.

     From and after the Redemption Date, the Company shall, at the place specified in the notice of
redemption, upon presentation and surrender to the Company by or on behalf of the Holder thereof of
this Warrant, deliver or cause to be delivered to or upon the written order of such holder a sum of
cash equal to the Redemption Price of each such Warrant. From and after the Redemption Date and
upon the deposit or setting aside by the Company of a sum sufficient to redeem all the Warrants
called for redemption, such Warrants shall expire and become void and all rights hereunder and
shall cease, except the right, if any, to receive payment of the Redemption Price.

     In Witness Whereof, the Company has caused this Warrant to be duly executed by its
officers, thereunto duly authorized this

     21st day of February, 2007.

	 	 	 	 	 
	 	Consolidation Services, Inc.

a Delaware corporation

 	 
	 	By:  	 	 
	 	 	Name:  	Johnny R. Thomas 	 
	 	 	Title:  	CEO	 
	 	 	Address:

Consolidation Services, Inc.

2756 N. Green Valley Parkway, Suite 225

Henderson, NV 89014 	 
	 	  	 	 
	 

14

 

SCHEDULE A

SUBSCRIPTION FORM

Date:                                         ,                     

Consolidation Services, Inc. — Attn: President

Ladies and Gentlemen:

     The undersigned hereby elects to exercise the Warrant issued to it by Consolidation Services
Inc. (“Company”) and dated February 21, 2007, (“Warrant”) and to purchase thereunder
_______ shares of the Common Stock of the Company (“Shares”) at a purchase
price of
           
($_____) per Share or an aggregate purchase price
of ______ ______
Dollars ($___) (“Exercise Price”).

     Pursuant to the terms of the Warrant, the undersigned has delivered the Exercise Price
herewith in full in cash or by certified check or wire transfer.

Very truly yours,

 

 

ASSIGNMENT

To Be Executed by the Holder

in Order to Assign Warrants

FOR VALUE RECEIVED, 

                                                             hereby sells, assigns
and transfers unto

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER

	 	 	 	 	 
	 

	 	 
 

	 	  
	 
	 	 	 	 
	 

	 	 
 

	 	  
	 
	 	 	 	 
	 

	 	 
 

	 	  
	 

	 	[please print or type name and address]	 	 

                                         of the Warrants represented by this Warrant Certificate, and hereby
irrevocably constitutes and appoints                                          Attorney to transfer
this Warrant Certificate on the books of the Company, with full power of substitution in the
premises.

	 	 	 	 	 	 	 	 	 	 	 
	Dated:

	 	 
 

	 	 	 	 	x 
	  

Signature Guaranteed
	 	 

THE SIGNATURE TO THE ASSIGNMENT OR THE SUBSCRIPTION FORM MUST CORRESPOND TO THE NAME AS WRITTEN
UPON THE FACE OF THIS WARRANT CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR
ANY CHANGE WHATSOEVER, AND MUST BE GUARANTEED BY A COMMERCIAL BANK OR TRUST COMPANY OR A MEMBER
FIRM OF THE AMERICAN STOCK EXCHANGE, NEW YORK STOCK EXCHANGE, PACIFIC STOCK EXCHANGE OR MIDWEST
STOCK EXCHANGE.EX-10.1

 

Exhibit 10.1

ESCROW AGREEMENT

     This
Escrow Agreement is dated and effective as of the 3rd day of
April, 2007 and is made by
and among ICON Securities Corp. (the “Dealer-Manager”), ICON Leasing Fund Twelve, LLC, a Delaware
limited liability company (the “Company”), ICON Capital Corp., a Connecticut corporation and the
manager of the Company (the “Manager”) and JPMorgan Chase
Bank, N.A., national association (the “Escrow Agent”).

RECITALS

     A. The Company proposes to offer and sell up to 400,000 shares (the “Shares”) of limited
liability company interests to investors at $1,000 per Share pursuant to a registration statement
(the “Registration Statement”) filed with, and declared effective by, the U.S. Securities and
Exchange Commission (the “SEC”).

     B. The Company has agreed that the subscription price paid in cash by subscribers will be
refunded to subscribers if less than 1,200 Shares (the “Minimum Offering”) have been sold and
payment therefor received by the earlier to occur of the date which is (1) the first anniversary of
the date on which the Offering Period (as defined in the Registration Statement) commenced or (2)
any earlier date on which the Manager may elect to terminate the Offering (as defined in Company’s
Prospectus) (such date shall be referred to herein as the “Escrow Termination Date”).

     C. The Company desires to establish an escrow account (the “Escrow Account”) with Escrow Agent
for subscription payments pending receipt of aggregate subscriptions for not less than One Thousand
Two Hundred (1,200) Shares ($1,200,000 of subscriptions) (the time at which the escrow established
by this Agreement as to subscriptions from residents of all states other than Pennsylvania may be
released) or Twenty Thousand (20,000) Shares ($20,000,000 of subscriptions) have been received (the
time at which the escrow established by this Agreement as to subscriptions from residents of all
states, including Pennsylvania may be released).

     D. The Escrow Agent is willing to serve as Escrow Agent upon the terms and conditions
hereinafter set forth.

     NOW, THEREFORE, in consideration of the premises and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged by the parties, the parties covenant
and agree as follows:

     1. Deposit with Escrow Agent. The Escrow Agent agrees that it will, from time to time,
accept subscription payments for Shares (the “Escrow Deposit”) received by it from the Manager or
the Dealer-Manager. Until such time as (1) at least 1,200 Shares have been sold, all checks for
such subscription payments received from all subscribers shall be made payable to “JPMorgan
Chase Bank as Escrow Agent for ICON Leasing Fund Twelve, LLC”
and (2) at least 20,000 Shares have been sold, all checks for subscription payments from residents of the
Commonwealth of Pennsylvania shall be made payable to “JPMorgan Chase Bank as
Escrow Agent for
ICON Leasing Fund Twelve, LLC.” Subscription Agreements for the Shares received

 

 

by
the Manager
shall be reviewed for accuracy by the Manager and, immediately thereafter, the Manager shall
deliver to Escrow Agent information describing the name and address of the subscriber.

     2. Escrow
Deposits. The Escrow Agent shall, upon receipt of the checks
remitted to it, deposit all Escrow Deposits in the Escrow Account. The Escrow Account shall be
invested in (a) such obligations issued or guaranteed by the United States Government
or any agency thereof, (b) such bank accounts, (c) such short-term certificates
of deposit issued by a bank, or (d) such bank money-market accounts, as shall be
designated in writing from time to time by the Company, such writing to specify the
particular investment. Periodic statements will be provided to the Dealer-Manager and
the Company reflecting transactions executed on behalf of the Escrow Account. The
Dealer-Manager and the Company, upon written request, will receive a
statement of transaction details upon completion of any securities transaction in
the Escrow Account without any
additional cost. Receipt of the Escrow Deposits shall be confirmed by Escrow Agent
as soon as practicable by account statement, and any discrepancies in any
such account statement shall be noted by Parties to Escrow Agent
within 30 calendar days after receipt thereof. The Escrow Deposits in the Escrow Account
are not subject to claims by creditors, the Company, the Company's affiliates, the
Escrow Agent or any selling agents until the Escrow Deposits are released pursuant to
the terms of this Agreement.

     3. Distribution of Escrow Deposits. The Escrow Agent shall distribute the Escrow
Deposits as set forth in this Section 3, and the Escrow Agent’s obligations (other than those of
Sections 3.3 and 5 hereof which, by their nature, must survive this Agreement) shall terminate upon
such distributions, and the Escrow Agent shall be irrevocably released and discharged from any and
all further responsibility or liability with respect to this Agreement.

          3.1(a) At any
time following sale of at least 1,200 Shares (exclusive of subscriptions
from residents of the Commonwealth of Pennsylvania), the Manager shall (1) certify (in the
form of Schedule 1 attached hereto) that the sale of such Shares has satisfied
the Minimum Offering required for the Company to break escrow as to the subscription payments
of residents of states other than the Commonwealth of Pennsylvania and (2) stipulate the
date on which the Initial Closing Date and the release of the Escrow Deposits with respect to
such investors and all related earnings thereon to the Company shall occur. Upon collection
by the Escrow Agent of good funds for such subscription payments, the Escrow Agent shall
make such distributions on the Initial Closing Date. Certification by an officer of the
Manager as provided in Schedule 1 hereto shall constitute
sufficient evidence for the purposes of this Section 3.1(a) that such events have occurred.

          (b) At any time following sale of at least 20,000 Shares (inclusive of subscriptions by
residents of all States including subscriptions from residents of the Commonwealth of
Pennsylvania), the Manager shall (a) certify (in the form of
Schedule 2 attached hereto) that the
sale of such Shares has satisfied the Minimum Offering required for the Company to break escrow as
to all subscription payments (including those from residents of the Commonwealth of Pennsylvania)
and (b) stipulate the date on which the next Closing Date of the Company and the release of the
Escrow Deposits then being held on behalf of all investors and

2

 

all related earnings thereon
(including, without limitation, residents of the Commonwealth of Pennsylvania) to the Company shall
occur. Certification by an officer of the Manager as provided
in Schedule 2 hereto shall constitute sufficient evidence for the purposes of this
Section 3.1 that such events have occurred.

          3.2 After satisfaction of the conditions of Section 3.1(a) above as to residents of all states
other than residents of the Commonwealth of Pennsylvania, all checks received that are made payable
to the Escrow Agent, shall, upon receipt by Escrow Agent, be endorsed (without recourse to Escrow
Agent) for deposit into such accounts as directed by the Company. The Escrow Agent shall have no
duty to solicit any payments which may be due it hereunder. After satisfaction of the conditions of
Section 3.1(b) above as to residents of all states including residents of the Commonwealth of
Pennsylvania, all checks received that are made payable to the Escrow Agent, shall, upon receipt by
Escrow Agent, be endorsed (without recourse to Escrow Agent) for deposit into such accounts as
directed by the Company.

          3.3 If any Escrow Deposits do not become deliverable to the Company pursuant to Section 3.1
above on or prior to the Escrow Termination Date, the Escrow Agent shall return such Escrow
Deposits to the applicable subscribers in an amount equal to the subscription amount theretofore
paid by each of them together with interest earned thereon. In the event that (a) rescission of an
individual subscription is required to be offered to a subscriber under provisions of applicable
state law or (b) a subscription for a resident of a state may only be held in escrow for a shorter
period of time than provided in the preceding sentence under provisions of applicable state law,
then the Escrow Agent shall promptly, following receipt of such subscriber’s duly executed request
for rescission (in the case of rescission) or the Manager’s direction to release such subscription
(in the case of expiration of an applicable state statutory maximum escrow period), return such
subscriber’s Escrow Deposit to him in an amount equal to the subscription amount theretofore paid
by him together with interest earned thereon. For purposes of the preceding sentence, rescission
must be offered to each Pennsylvania subscriber for whom an Escrow Deposit is held by the Escrow
Agent at the end of the 120-day period which began with the Escrow Agent’s receipt of his or her
subscription payment. If such rescission offer is not accepted, such Escrow Deposit may continue to
be held for one or more successive 120-day periods at the end of each of which rescission must
again be offered to each such subscriber.

     In no event shall any Escrow Deposit be held in escrow for more than one year before either
being (a) released to the Company (upon a closing pursuant to Section 3.1 and 3.2) or (b) returned
to the applicable subscriber (in the event such Escrow Deposit shall be returned to the applicable
subscriber for whom it is being held pursuant to Section 3.3). The Escrow Agent will not be
required to communicate with any subscriber(s). All inquiries on behalf of the subscriber(s) shall
be coordinated through the Company.

     4. Distribution of Interest. If the Escrow Deposit become deliverable to the Company
pursuant to Section 3.1 or to the subscribers pursuant to Section 3.3 above, the Manager shall
compute the pro rata share of the investment earnings of each Escrow Deposit for the distribution
in accordance with such computations. Each subscriber’s pro rata share of investment earnings shall
be computed as follows:

3

 

	 	 	 	 	 	 	 
	Investment Earnings multiplied by

	 	 	 	(individual subscription amount
multiplied by

the number of days held)                               
 

(Total subscription amount multiplied by       

the number of days held)                              	 	 

     Such pro rata share of investment earnings shall be distributed to each subscriber by the
Company upon admission of the subscriber as a member of the Company or upon return of his/her
subscription amounts.

     5. Duties and Liability of Escrow Agent.

          5.1
The Manager, the Dealer-Manager and the Company each represent that its correct Taxpayer Identification Number
(“TIN”) assigned by the Internal Revenue Service or any other taxing authority is set forth in
Schedule 1. Upon execution of this Agreement, each party shall provide the Escrow Agent with a
fully executed Internal Revenue Service Form W-8 or W-9. Any interest or other income earned under
the Escrow Account shall be allocated and paid as provided herein and reported by the recipient to
the Internal Revenue Service as having been so allocated and paid. Notwithstanding such written
directions, the Escrow Agent shall report and, if required, withhold any taxes as it determines may
be required by any law or regulation in effect at the time of the distribution. In the absence of
timely direction, all proceeds of the Escrow Account shall be retained in the Escrow Account and
reinvested from time to time by the Escrow Agent as provided in Section 3. In the event that any
earnings remain undistributed at the end of any calendar year, the Escrow Agent shall report to the
Internal Revenue Service or such other authority such earnings as it deems appropriate or as
required by any applicable law or regulation or, to the extent consistent therewith, as directed in
writing by the Manager and the Company. In addition, the Escrow Agent shall withhold any taxes it deems
appropriate and shall remit such taxes to the appropriate authorities.

          5.2 The Escrow Agent shall have the right to liquidate any investments held in the Escrow
Account in order to provide funds necessary to make required payments under this Agreement. The
Escrow Agent, in its capacity as escrow agent hereunder, shall not have any liability for any loss
sustained as a result of any investment made pursuant to the Instructions of the parties hereto or
as a result of any liquidation of any investment prior to its maturity or for the failure of the
parties to give the Escrow Agent instructions to invest or reinvest the Escrow Account or any
earnings thereon. Any such investment of the Escrow Account shall be made in compliance with Rule
15c2-4 of the Securities Exchange Act of 1934, as amended.

          5.3 Any corporation into which the Escrow Agent in its individual capacity may be merged or
converted or with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Escrow Agent in its individual capacity shall be a party,
or any corporation to which substantially all the escrow business of the Escrow Agent in
its individual capacity may be transferred, shall be the Escrow Agent under this Agreement without
further act of the parties hereto.

4

 

          5.4
Notwithstanding anything in this Agreement to the contrary, in no
event shall the Escrow Agent be liable for special, indirect or
consequential losses or damages of any kind whatsoever (including, but not limited to, lost profits), except for any losses or
damages caused by the gross negligence or willful misconduct of the Escrow Agent.

          5.5 The duties and obligations of the Escrow Agent shall be determined solely by the express
provisions of this Agreement and shall be limited to the performance of such duties and obligations
as are specifically set forth herein.

          5.6 In performing any of its duties under this Agreement, or upon the claimed failure to
perform its duties hereunder, Escrow Agent shall not be liable to anyone for any damages, losses or
expenses which it may incur as a result of the Escrow Agent so acting, or failing to act; provided,
however, that the Escrow Agent shall be liable for damages arising out of its willful misconduct or
gross negligence under this Agreement, as determined by a court of competent jurisdiction.
Accordingly, Escrow Agent shall not incur any such liability with respect to (i) any action taken
or omitted to be taken in good faith upon advice of its counsel or counsel for the Company given
with respect to any questions relating to the duties and responsibilities of the Escrow Agent
hereunder or (ii) any action taken or omitted to be taken in reliance upon any document, including
any written notice or instructions provided for in this Agreement, not only as to its due execution
and to the validity and effectiveness of its provisions but also as to the truth and accuracy of
any information contained therein, which the Escrow Agent shall in good faith believe to be
genuine, to have been signed or presented by proper person or persons and to conform with the
provision of this Agreement. The Escrow Agent may execute any of its powers and perform any of its
duties hereunder directly or through agents or attorneys (and shall be liable only for the careful
selection of any such agent or attorney) and may consult with such counsel, accountants and other
skilled persons to be selected and retained by it. The Escrow Agent shall not be liable for
anything done, suffered or omitted in good faith by it in accordance with the advice or opinion of
any such counsel, accountants or other skilled persons.

          5.7 Each of the Company, the Manager and Dealer-Manager hereby respectively agree to indemnify
and hold harmless the Escrow Agent, and its directors, officers, agents and employees (the
“indemnitees”), against any and all losses, claims, damages, liabilities and expenses, including,
without limitation, reasonable costs of investigation and counsel fees and disbursement which may
be incurred by it resulting from any act or omission of the Company, the Manager or the
Dealer-Manager; except, that if Escrow Agent shall be found guilty of willful misconduct or gross
negligence under this Agreement by any court of competent jurisdiction, then, in that event, Escrow
Agent shall bear all such losses, claims, damages and expenses. The indemnity provided by this
Section 5.7 shall survive the termination of this Agreement.

          5.8 In the event that the Escrow Agent shall be uncertain as to its duties or rights hereunder
or shall receive instructions, claims or demands from any party hereto which, in its opinion,
conflict with any of the provisions of this Agreement, it shall be entitled to refrain from taking
any action and its sole obligation shall be to keep safely all property held in escrow until it
shall be directed otherwise in writing by all of the other parties hereto or by a final order or
judgment of a court of competent jurisdiction.

5

 

          5.9 In the event funds transfer instructions are given (other than in writing at the time of
execution of this Agreement), whether in writing, by facsimile or otherwise, the Escrow Agent is
authorized to seek confirmation of such instruction by telephone call-back to the person or persons
designated on Schedule 2 hereto, and the Escrow Agent may rely upon the confirmations of anyone
purporting to be the person or persons so designated. The undersigned is authorized to certify that the signatories on Schedule 2
are authorized signatories. The persons and telephone numbers for
call-backs may be changed only in a writing actually received and acknowledged by the Escrow Agent.
The parties to this Agreement acknowledge that such security procedure is commercially reasonable.

          5.10 It is understood that the Escrow Agent and the beneficiary’s bank in any funds transfer
may rely solely upon any account numbers or similar identifying number provided by either of the
parties hereto to identify (a) the beneficiary, (b) the beneficiary’s bank, or (c) an intermediary
bank. The Escrow Agent may apply any of the Escrow Deposits for any payment order it executes using
any such identifying number, even where its use may result in a person other than the beneficiary
being paid, or the transfer of funds to a bank other than the beneficiary’s bank, or an
intermediary bank designated.

     6. Uncollectible Checks. If any checks or other instruments deposited in the Escrow
Account prove uncollectible, the Company shall promptly reimburse the Escrow Agent therefor upon
request and the Escrow Agent shall deliver the returned checks or other instruments to the Company.

     7. Notices. All notices, requests, demands and other communication or deliveries
required or permitted to be given hereunder shall be in writing and shall be deemed to have been
duly given if delivered personally, deposited with a guaranteed overnight delivery service such as
Fedex or deposited for mailing, first class, postage prepaid, registered or certified mail, as
follows:

	 	 	 
	If to the subscribers for Shares:

	 	To their respective addresses
	 

	 	as specified in their Subscription Agreements.
	 
	 	 
	If to the Company or the Manager:

	 	ICON Leasing Fund Twelve, LLC,
	 

	 	a Delaware limited liability company
	 

	 	c/o ICON Capital Corp., its Manager
	 

	 	100 5th  Avenue – 4th Floor
	 

	 	New York, NY 10011
	 

	 	Attention- Michael A. Reisner,
Executive Vice President and CFO
	 
	 	 
	If to the Dealer-Manager:

	 	ICON Securities Corp.
	 

	 	100
5th  Avenue – 4th Floor
	 

	 	New York, NY 10011
	 

	 	Attention: Thomas W. Martin, President
	 
	 	 

6

 

	 	 	 
	If to the Escrow Agent:

	 	JP Morgan Chase Bank
	 

	 	4 New York Plaza –
21st  Floor

	 

	 	New York, NY 10004
	 

	 	Attention: Rola Tseng

Any
notices, requests, demands and other communications received after
5 pm EST shall be deemed received the next Business day. ‘‘Business day’’ shall mean any day other
than Saturday, Sunday or any other day on which the Escrow Agent
located at the notice address set forth in this Section is authorized
or required by law or executive order to remain closed.

     8. Resignation or Removal of Escrow Agent. The Escrow Agent, or any successor to it
hereafter appointed, may at any time resign and be discharged from the duties and obligations
created by this Agreement by giving at least thirty (30) days prior written notice to the Company
and the Manager and accounting in full for all sums delivered to, and held by, it and all earnings
thereon while Escrow Agent hereunder to the Company, the Manager and any successor Escrow Agent.
The Escrow Agent may be removed at any time upon sixty (60) days prior written notice by any
instrument purportedly signed by an authorized representative of the Company and the Manager. Any
successor Escrow Agent shall deliver to the Escrow Agent, the Company and the Manager a written
instrument accepting such appointment hereunder and shall accept delivery of the Escrow Account to
hold and distribute same in accordance with the terms of this Agreement. If no successor Escrow
Agent shall have been appointed within thirty (30) days after the Company and the Manager receive
notice of the Escrow Agent’s intention to resign or within sixty (60) days of the Escrow Agent’s
receipt of notice of its removal, the Escrow Agent shall deliver all amounts deposited with it in
the Escrow Account and all earnings thereon to a national bank with a net worth of not less than
$100,000,000 designated by the Escrow Agent which has agreed in writing to accept such monies and
to act as substitute Escrow Agent in compliance with the terms of this Agreement. Upon such
delivery and acceptance, the Escrow Agent shall be discharged from any future obligations under
this Agreement.

     9. General.

          9.1 This Escrow Agreement shall be governed by and be construed and enforced in accordance
with the laws of the State of New York, exclusive of conflicts of laws provisions thereunder. The
parties hereto consent to the jurisdiction of all courts of the State of New York and the venue of
the courts located in the county in which the Escrow Agent is located to resolve all disputes
pertaining to this Agreement and any ancillary agreements entered into in furtherance of the
purposes hereof and agree that such jurisdiction shall be exclusive. Each party hereto irrevocably
waives any objection on the grounds of venue, forum non-conveniens or any similar grounds and
irrevocably consents to service of process by mail or in any other manner permitted by applicable
law and consents to the jurisdiction of the courts located in the State of New York. The parties
further hereby waive any right to a trial by jury with respect to any lawsuit or judicial
proceeding arising or relating to this Escrow Agreement. No party to this Escrow Agreement is
liable to any other party for losses due to, or if it is unable to perform its obligations under
the terms of this Escrow Agreement because of, acts of God,

7

 

fire, floods, strikes, equipment or
transmission failure, or other causes reasonably beyond its control.

          9.2 The section headings contained herein are for reference purposes only and shall not in any
way affect the meaning or interpretation of this Agreement.

          9.3 This Agreement sets forth the entire agreement and understanding of the parties in respect
to this Agreement and supersedes all prior agreements, arrangements and understandings relating to
the subject matter hereof.

          9.4 This Agreement may be amended, modified, superseded or canceled, and any of the terms or
conditions hereof may be waived, only by a written instrument executed by each party hereto or, in
the case of a waiver, by the party waiving compliance. The failure of any party at any time or
times to require performance of any provision hereof shall in no manner affect the right at a later
time to enforce the same. No waiver of any party of any condition, or of the breach of any term
contained in this Agreement, whether by conduct or otherwise, in any one or more instances shall be
deemed to be construed as a further or continuing waiver of any such condition or breach or a
waiver of any other condition or of the breach of any other terms of this Agreement.

          9.5 This Agreement may be executed simultaneously in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and the same
instrument. All signatures of the parties to this Agreement may be transmitted by facsimile, and
such facsimile will, for all purposes, be deemed to be the original signature of such party whose
signature it reproduces, and will be binding upon such party.

          9.6 This Agreement shall inure to the benefit of the parties hereto and their respective
successors and assigns.

          9.7 The Escrow Agent shall have the right to withhold an amount equal to the amount due and
owing to the Escrow Agent, plus any costs and expenses the Escrow Agent shall reasonably believe
may be incurred by the Escrow Agent in connection with the termination of this Agreement.

     10. Representation of the Company. The Company hereby acknowledges that the status of
the Escrow Agent with respect to the offering of the Shares is that of agent only for the limited
purposes herein set forth, and hereby agrees it will not represent or imply that Escrow Agent, by
serving as Escrow Agent hereunder or otherwise, has investigated the desirability or advisability
of an investment in the Shares, or has approved, endorsed or passed upon the merits of the Shares
or the Offering, nor shall the Company use the name of Escrow Agent in any manner whatsoever in
connection with the offer or sale of the Shares, other than by acknowledgment that it has agreed to
serve as Escrow Agent for the limited purposes herein set forth.

     11. Fees. Upon execution of this Agreement, the Company will pay the Escrow Agent
Fee’s outlined in Schedule I attached hereto.

8

 

     12. Force Majeure.  In the event that any party or the Escrow Agent is unable to perform its obligations under the terms of this Agreement because of acts of God, strikes, equipment or transmission failure or damage reasonably beyond its control, or other cause reasonably beyond its control, the Escrow Agent shall not be liable for damages to the other parties for any damages resulting from such failure to perform otherwise from such causes.  Performance under this Agreement shall resume when the Escrow Agent is able to perform substantially.

     13. Compliance with Court Orders.  In the event that any escrow property shall be attached, garnished or levied upon by any court order, or the delivery thereof shall be stayed or enjoined by an order of a court, or any order, judgment or decree shall be made or entered by any court order affecting the property deposited under this Agreement, the Escrow Agent is hereby expressly authorized, in its sole discretion, to obey and comply with all writs, orders or decrees so entered or issued, which it is advised by legal counsel of its own choosing is binding upon it, whether with or without jurisdiction, and in the event that the Escrow Agent obeys or complies with any such writ, order or decree it shall not be liable to any of the parties hereto or to any other person, firm or corporation, by reason of such compliance notwithstanding such writ, order or decree be subsequently reversed, modified, annulled, set aside or vacated.

     14. Account Opening Information. IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT: To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account.  When an account is opened, the Escrow Agent will ask for information that will allow it to identify relevant parties.

[Signatures on following page]

9

 

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.

ICON
Leasing Fund Twelve, LLC, a Delaware limited liability company

By: ICON Capital Corp., Its Manager

	 	 	 	 	 
	By:
	 	/s/ Thomas W. Martin	 	 
	           Thomas W. Martin	 	 
	           President	 	 

ICON Capital Corp., a Connecticut corporation

	 	 	 	 	 
	By:
	 	/s/ Thomas W. Martin	 	 
	           Thomas W. Martin	 	 
	           President	 	 
	 
	 	 	 	 
	ICON Securities Corp.,	 	 
	as Dealer-Manager	 	 

	 	 	 	 	 
	By:
	 	/s/ Thomas W. Martin	 	 
	           Thomas W. Martin	 	 
	           President	 	 
	 
	 	 	 	 
	JPMORGAN CHASE BANK,
N.A.	 	 
	as Escrow Agent	 	 
	 
	By:
	 	/s/ Rola Tseng	 	 
	           Name: Rola Tseng	 	 
	           Title: Vice President	 	 

10

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