, Korb and Co. Investments Mining Fund has been restructured as per popular vote.
This means KCIM is no longer based on Secured Promissory Notes, and instead has been switched to a Revenue Sharing model.
All previously agreed upon updates, contractual arrangements, and amendments (noted on HavelockInvestments.com, KorbInvestments.com, or on the BitcoinTalk.org forums), have been voided as they no longer apply to the current model of the fund.
::: Korb and Co. Investments Revised Agreement :::
The Korb and Co. Investments Mining Fund is a small Vermont based operation that provides bi-weekly dividends based on net income from ASIC mining.
There are currently 86900 units outstanding. To stave off dilution, this number will not increase unless a supermajority of votes (viewed as greater than two-thirds) agree to release additional shares. Each share represents a proportional amount of ownership of all mining equipment, granting a similar fraction of the mining net income for each two week period.
The current dividend model is set to distribute 75% of all net income with the remaining 25% set aside for hardware purchases.
Payments will be made every two weeks.
As the network difficulty increases, bi-weekly dividends are expected to decrease until new hardware comes online. The dividend, however, will always be a minimum 0.000025 BTC per two week period for as long as the fund is able to continue its operations.
Hardware purchases will be made solely at the operators discretion. I will always use all available information to make the most logical purchasing decision, including accounting for efficiency, hashing speed, price, size, and the manufacturer's reputation.
Each share represents one vote.
For any proposed general motion, a minimum of 60% of all submitted votes must agree with the change.
For any proposed motion pertaining to an increase in fund units, a minimum of 67% of all submitted votes must agree with the change.
Any changes to the fund and/or agreement will be voted on prior to going into effect.
In the event the fund is required to cease operations, either through insolvency, legal force, or an extraordinary circumstance that leaves the operator unable to continue their duties, all mining equipment will be auctioned to the highest bidder(s). Proceeds from the sale, in conjunction with any remaining funds, will be distributed to all investors as a Final Dividend.
Contracts:Here’s where we get serious.The previous contract I had created…though more substantial than most other funds…wasn’t cutting it from my point of view. As a result, I spent about a month drafting, revising, and fine tuning new documents that will help to cover all bases.
The contracts and informational documents I’ve created have one ultimate goal:
To Ensure I’m Held to High StandardsTo that end, I will link each document in this post and then give an explanation of what the document entails in normal “conversational” speak, compared to the formal language I used when writing up each one. Under each contract area I will denote ‘Section Numbers’ that will correlate to the section in the document. It would probably make the most sense if you read (or reference) the docs so the answers I provide make sense
NOTE: Each of these documents can be found on my website under the “Investors Area” as well. I reserve the right to modify/update them until the day before the public offering of the Fund.Letter of IntentRevision 4.0 – Last updated October 25th, 2012Though the Letter of Intent may resemble a contract, it’s actually a legally non-binding document that sort of acts as a prelude to my General Agreement. In this case, it’s to give a brief overview of my obligations and what I expect of Investors as well.
Section #:1. The proposed transaction lays out details of what is expected from both parties. Essentially saying that after purchasing into the fund I will provide all documentation and manage everything to the best of my ability under any circumstances.
2. Each transaction (“share”) is valued at 1.00BTC and held in the fund.
3. The idea here is to invest with the fund before the end of December 2012 (so I can have a solid understanding of how many Notes are left, publicly held, etc). [NOTE: I may extend this date out by a month depending on the general market sentiment].
4. Essentially states that if you agree to the proposed transaction, then I know you’ve done your due diligence.
5. States that you will notify me when ready to proceed…but this isn’t necessary since it’s all based on a Fund.
6. The document is non-binding, but references to the Final Agreement, which is in the Secured Promissory Note agreement.
7. If you want to know anything about the Fund or my Company, ask and I’ll fill you in.
8. No matter what happens, we each cover our own expenses.
9. Again, not legally binding and you can withdrawal at anytime (essentially just not investing in the Fund).
General AgreementRevision 4.0 – Last updated October 25th, 2012This is the contract leading up to the Note. The premise here is reaffirming what was stated in the Letter of Intent, but instead as a legally binding document.
Section #:1. Describes my Obligations to investors, including transparency, Fund and Company management, and promise fulfillment.
2. Describes what I am expecting of Investors. Obviously, investing in the Fund is a key part here (otherwise none of these docs would apply to you). IF you are looking to purchase 1,000 or more Notes, I ask for your identifiable information (name, address, phone, etc). The
ONLY PURPOSE for this is to make sure my top investors are taken care of first. I want to make sure that I know who you are just as you know who I am, and in case anything goes wrong I know who to get in touch with as quickly as possible.
3. States that I [Andrew Korb] will represent my company in all dealings.
4. If an event happens that is outside of either party’s control, neither is liable. Notify the other party of the impact as a result of the event and make a reasonable effort to maintain obligations.
5. Since I live in Vermont, I will abide by the laws of my State.
6. No changes to the agreement will be made unless otherwise agreed upon.
7. Rights/obligations within the agreement can’t be transferred between people unless agreed upon.
8. The Bitcoin address you use when investing counts as a signature, agreeing to the documents I’ve laid out.
9. If something happens that makes part of the contract illegal or invalid, the rest of the agreement will continue as long as feasibly possible.
10. If you want to talk, there’s a ton of different ways to do so.
11. Nothing can be cancelled unless we both agree on it.
12. States that this document is agreed upon and you weren’t forced into it.
13. [Self-explanatory]
14. Once you invest, the agreement becomes effective.
15. We’ll both try our best to be awesome.
Secured Promissory NoteRevision 4.0 – Last updated October 25th, 2012As the Core of the Fund, this contract is the most important because it assigns legally binding obligations to ME and only ME. Each “share” of the Fund is in effect a ‘Note’, granted by this contract.
Section #:1. I promise to pay back the original principal plus interest to the Bitcoin Address that you provide me or otherwise update during the lifetime of the Note.
2. Prior to March 1st, 2013, monthly coupon rates are 1% and distributed on the last day each month. From March through September, the rate increases to 2%. From October through November, it goes up to 4%. Finally in December it goes up to 6%. Interest isn’t distributed on principal already paid. If for some reason I am not able to maintain stable payments (Force Majeure, “Acts of God”, or otherwise), I reserve the right to modify the interest rate to reflect the current circumstances (higher or lower, but will never go below the minimum) as a last resort to maintain financial stability and payments to investors.
3. I will start paying the principal back after February 28th, 2013 on the first day of each month, starting at 1.10BTC from March through September. October through November warrants a 1.15BTC Note buyback. December through the beginning of January increases the buyback to 1.20BTC per Note, and all Notes will be bought back by then. If for some reason I am not able to maintain stable payments (Force Majeure, “Acts of God”, or otherwise), I reserve the right to modify the principal rate to reflect the current circumstances (higher or lower, but will never go below the minimum) as a last resort to maintain financial stability and payments to investors.
4. First interest payment is the end of November, and the first principal payment is the first of March 2013.
5. Should I have excess funds, I reserve the right to buyback any outstanding Notes before maturity (March 2013) at a rate 1.005x the Par Value [1.00 BTC].
6. Everything will be paid back and finalized by or before the last day of January 2014.
7. Details of how the Secured Promissory Note is “Secured” are detailed in the Security Agreement.
8. In the event of default the Investors are notified….
9. …and everything is liquidated to pay them back.
10. In short – I mess up, I can get sued.
11. [Self-explanatory]
12. This agreement applies to any successors should something happen to either Party.
13. If you want to talk, there’s a ton of different ways to do so.
14. I’m abiding by the laws of my State.
15. This Note is the Final Agreement, superseding all others.
16. Just because the Investor doesn’t do anything, doesn’t mean they gave up their right.
17. I’ll cover any costs associated with Investors getting their payment.
18. If something happens that makes part of the contract illegal or invalid, the rest of the agreement will continue as long as feasibly possible.
19. [Self-explanatory]
20. [Not a Section] – By investing in the Fund, your Bitcoin Address represents your signature, stating your agreement to the terms herein.
Security AgreementRevision 3.0 – Last updated October 25th, 2012This is sub-agreement to the Secured Promissory Note, detailing how the assets purchased with Investor funds will be “Secured”.
Section #:1. Investors have a secured interest in all assets (inventory, equipment, etc) purchased as a result of the Note. I value the 2 Mini Rigs at the Fund value of 10,000 BTC, which I am obligated to secure.
2. The collateral will be kept at a datacenter (TechVault) near me unless otherwise not feasible (financially, logistically, or as a result of outside influence). I will not do anything with the assets unless agreed upon. I will maintain all assets to the best of my ability.
3. Should the Company go into default, the assets will be liquidated to cover Investor expenses.
Amendment to the Secured Promissory NoteRevision 2.0 - Last updated December 30th, 2012This is an amendment to the Secured Promissory Note, detailing the payment schedule changes and extensions as a result of ASIC manufacturer delays.
Section #:1. States that this is the first amendment to the original contract. I briefly describe the purpose and reason for the change, noting Third Party influences (delays) and current financial infeasibility.
2. Here is where I describe the changes I propose, which focuses on the second and third sections of the original contract.
...a. Interest at 1% has been extended by three [3] months, going from November 2012 to the end of May 2013. Interest is at 2% from June 2013 to the end of December 2013. Interest is increased to 4% from January 2014 through March 2014. Interest is increased one last time to 6% for the final months of April and May (though everything should be purchased back in April).
...b. Principal payments no longer begin in March 2013. Instead, they have been pushed back to June 2013, where they start at the normal 1.10BTC per Note until the end of December 2013. January 2014 starts the purchase at 1.15BTC per Note, and April 2014 marks the final purchase of 1.20BTC per Note.
...c. An error in the third section has been corrected to note that the Principal rate (previously said “Interest”, which voided that part of the section) will never go below the minimum, which is 1.005x the Par Value (1.0BTC).
3. The Amendment is valid as of January 7th, 2013, which marks seven [7] days after I give notice (as per the original contract).
4. In the event of a conflict between the original document and the Amendment, the Amendment governs.
5. The other unchanged parts of the original contract are still valid.
6. The original document and the included Amendment now constitute the Final Agreement.
7. This Amendment may be modified after agreeing with both parties.
8. In the event of illegality, unenforceability, invalidity, etc, the remainder of the contract and its Amendments are still valid.
9. Electronic communication (or other forms of communication) is valid statements of agreement, recognized in the same effect as a signature.
10. You confirm you have the power to agree and bind to the contracts outlined.
11. [Self Explanatory]
Second Amendment to the Secured Promissory NoteRevision 2.0 - Last updated April 15th, 2013This is the second amendment to the Secured Promissory Note, further detailing the payment schedule changes and extensions as a result of ASIC manufacturer delays.
Section #:1. States that this is the second amendment to the original contract and overrules the first amendment. I briefly describe the purpose and reason for the change, noting Third Party influences (delays) and current financial infeasibility.
2. Here is where I describe the changes I propose, which focuses on the second and third sections of the original contract, but changes are also made to the fourth and sixth sections (which should have been changed before to make sense with the later Amendments).
a. Interest at 1% has been extended indefinitely, essentially meaning I will keep paying it until we receive our equipment or I choose to buy back the Notes early. Interest is at 2% starting 2 months after receiving the equipment. Interest is increased to 4% 10 months from the receive date. Interest is increased one last time to 6% for the final months, concluding 14 months after receiving the equipment.
b. The minimum Interest rate has been lowered from 1% to 0.5% to grant the Borrower flexibility during extreme financial pressure or other unforeseen events.
c. Principal payments no longer begin in June 2013. Instead, they have been pushed back indefinitely, being 100% contingent on when the equipment is received. Two months after receiving the equipment, the previous schedule resumes, where they start at the normal 1.10BTC per month for 7 months. After which starts the purchase at 1.15BTC per Note lasting for 3 months, and the next two months after that marks the final purchase of 1.20BTC per Note.
d. The fourth section has been updated, specifically to reflect the change in the Principal payment schedule.
e. The sixth section has been updated to reflect the change in End date.
3. The Amendment is valid as of May 1st, 2013, which marks greater than seven [7] days after I give notice (as per the original contract).
4. In the event of a conflict between the original document and the Amendment, the Amendment governs.
5. The other unchanged parts of the original contract are still valid.
6. The original document and the included Amendment now constitute the Final Agreement.
7. This Amendment may be modified after agreeing with both parties.
8. In the event of illegality, unenforceability, invalidity, etc, the remainder of the contract and its Amendments are still valid.
9. Electronic communication (or other forms of communication) is valid statements of agreement, recognized in the same effect as a signature.
10. You confirm you have the power to agree and bind to the contracts outlined.
11. [Self Explanatory]
