EFTA00603348.pdf

The Zerocoin Electric Coin Company From: Jack Gavigan Subject: December 2016 Auction of ZEC Date: 21st December 2016 1. The Zerocoin Electric Coin Company LLC ("ZECC") intends to conduct an auction in order to sell an amount of ZEC for US Dollars (USD). 2. Interested parties should register their interest by emailing and supplying the following information: a. The name, address and state of registration of the company taking part in the auction (the "Participant"), b. The name, email address and phone number of the person who will participate in the auction on behalf of the Participant (the "Trader"), c. The name, email address and phone number of the person who is authorised to sign the bill of sale on behalf of the Participant (the "Signatory"), d. The transparent Zcash payment address ("t-address") to which ZEC should be transferred in the event that the Participant submits a winning bid. 3. ZECC will draft a simple, non-binding Letter of Intent, indicating: a. ZECC's intent to conduct an auction, b. the Participant's intent to participate in the auction, c. the participating company's intent, in the event that it submits a winning bid, to pay the appropriate amount of USD (the "Funds"), by wire transfer directly to ZECC's bank account, by the end of the first business day following the conclusion of the auction, and d. ZECC's intent to remit the corresponding amount of ZEC to the Participant's t-address within 24 hours of confirming receipt of the Funds. The details listed in paragraph 2 above, ZECC's bank wire transfer details, and a copy of this memorandum will be attached to the Letter of Intent (see example below). Both Zooko (acting in his capacity as CEO of ZECC) and the Signatory will digitally sign the Letter of Intent using the DocuSign service. EFTA00603348 4. The Participants' t-addresses will be tested by transferring a small amount of ZEC. Participants should verify that they can access and move the transferred ZEC, and confirm that the test was successful by emailing 5. The auction will be conducted on behalf of ZECC by Jack Gavigan ("Jack"). In the event that Jack believes that the auction cannot be completed in an orderly fashion, he may delay, suspend, reschedule or cancel it. 6. On the day of the auction, Jack will email the Participants' Traders individually (from the email address), to inform them of the amount of ZEC to be auctioned, and the deadline for submitting bids (to be no less than two hours after the email is sent). 7. The Trader should acknowledge receipt of Jack's email by replying to it. If Jack does not receive an acknowledgement within a reasonable amount of time, he will attempt to contact the Trader by telephone. If there is no answer or response, the auction will continue. 8. We are aware that some bidders may prefer to purchase the full amount being auctioned, so we will run a hybrid auction, to allow bidders to bid different prices for purchasing the full amount versus purchasing a portion of the full amount (in a clearing auction). 9. Participants may submit the following types of bid: a. a Single Bid for the full amount of the ZEC being auctioned, and b. one or more Clearing Bids, indicating both the amount of ZEC desired, and the price the Participant is willing to pay per ZEC in a clearing auction. Participants may submit either or both types of bid. Participants should submit no more than 20 Clearing Bids. 10. Bids must be submitted by email to in the following format: Bid type: USD X per ZEC for Q ZEC where Bid type is one of "Single bid" or "Clearing bid", Xis the bid price in USD, and Q is the quantity. There must be only one bid to a line. Bid prices must have no greater than six decimal places. For example, if the auction amount was 10,000 ZEC, and a Participant wished to submit a Single Bid of $40 per ZEC, and two Clearing Bids of $42 per ZEC for 4,000 ZEC, and $41 per ZEC for 5,650 ZEC, their submission should read as follows: Single bid: USD 40 per ZEC for 10000 ZEC Clearing bid: USD 41 per ZEC for 5650 ZEC Clearing bid: USD 42 per ZEC for 4000 ZEC EFTA00603349 All bids are binding. Bids will remain confidential. 11. Jack will acknowledge receipt of bids by replying to the email submission. 12. Following receipt of all Participants' bids (or at the deadline), Jack will collate the bids and calculate the results of the auction as follows: a. As a preliminary step, he will first calculate a Clearing Price based on the submitted Clearing Bids, as follows: i. He will serve the highest clearing bid first, allocating to it the number of ZEC requested, then the second-highest clearing bid and so forth until the supply of ZEC is exhausted. V. The Clearing Price will be equal to the lowest winning clearing bid (i.e. the lowest bid which received an allocation of ZEC). b. Jack will then compare the Clearing Price to the highest Single Bid. i. if the highest Single Bid is higher than the Clearing Price, the Participant who submitted the highest Single Bid will win the auction. U. If the Clearing Price is higher than the highest Single Bid, the auction will be won by the Participants who submitted Clearing Bids equal to or above the Clearing Price. Any Participant who submits a Clearing Bid that is equal to Clearing Price might not receive the full amount of ZEC they bid for. iii. If there are two or more highest Single Bids that exceed the Clearing Price, the winning bid shall be the bid that was received first. 13. Jack will then email the successful Participant(s) to inform them of the result of the auction (i.e. the auction-winning price, and the amount of ZEC they have been allocated). 14. Jack will then email the unsuccessful Participants to inform them of the result of the auction (i.e. the winning price, and whether the result was a Clearing Price or the highest Single Bid). 15. Shortly after the auction, Jack will email to the successful Participant(s) an invoice (in PDF format) issued by ZECC, setting out the amount of ZEC the Participant is purchasing, the price per ZEC to be paid, and the amount of Funds the Participant should transfer to ZECC's bank account. 16. The successful Participant(s) will transfer the necessary Funds to complete the purchase of ZEC by the end of the business day following the completion of the auction. EFTA00603350 17. ZECC will transfer the appropriate amount of ZEC to each winning Participant's t-address within 24 hours of confirming receipt of all Funds. 18. When the exchange of Funds and ZEC is complete, ZECC will draft a simple Bill of Sale, for each successful Participant, with the details of the sale (see example below). Contingencies 19. In the event that a successful Participant fails to transfer the required Funds, ZECC will either: a. recalculate the result of the auction with that Participant's bids excluded, or b. re-run the auction. 20. If the result of the auction is recalculated, all Participants will be notified of the new result. In the event that: a. the original auction was won by multiple Participants who submitted Clearing Bids equal to or above the Clearing Price, and b. the recalculated auction result is a lower Clearing Price, any Participants who have already transferred Funds to ZECC will be reimbursed accordingly. 21. In the event that ZECC is unable to transfer the relevant amount of ZEC to the Participant's t-address, ZECC will return the Funds within a reasonable amount of time, not exceeding five business days after the Participant transferred the Funds to ZECC. EFTA00603351 Clarifications to the Memo The following clarifications were sent to the Participants via email in response to questions they raised regarding the content of the memo above. 1. As indicated by paragraph 12(b)(ii) of the Memo, if the Clearing Price is higher than the highest Single Bid, the auction will be won by the Participants who submitted Clearing Bids equal to or above the Clearing Price. For the avoidance of doubt, in this eventuality, all winning Participants will pay the same price per ZEC (i.e. the Clearing Price). See Examples 4 and 6. 2. To clarify paragraph 12(b)(iii) of the Memo: If there are two or more highest Single Bids (i.e. if two or more bidders submitted identical Single Bids that are tied for the position of highest Single Bid) that exceed the Clearing Price, the winning bid shall be the bid that was received first. See Example 2. 3. If two or more bidders submit Clearing Bids at the Clearing Price, precedence for the allocation of ZEC shall be granted in the order that the bids were received. See Examples 4, 5 and 6. 4. Clearing bids are accumulative. This means that if a bidder submits multiple Clearing Bids, they might be allocated ZEC equal to the sum total of the quantities of their Clearing Bids. See Example 6. Below are some examples of different auction scenarios and the corresponding outcomes. All examples are based on an hypothetical auction amount of 10,000 ZEC. EFTA00603352 Example]. Participant A's bit frectivedfirst) Single bid: USD 40 per ZEC for 10900 ZEC Clearing bad: USD 42 per ZEC for 4000 ZEC Clearing bid: ISSO al per ZEC for 5650 ZEC Participant D'sblds frectired second) Participant Cs bids iterated third/ Single bid: USD 42 per ZEC for 14000 ZEC Clearing Old: USD 41 per ZEC for 501)(1 ZEC Clearing 050 40 per ZEC for 10800 ZEC Cleadog~ $41 Highest Shape Bid: $42 Result $42 Per EEC limbed Single Bid) Participant 8 rotapes 10.000 ZEC me ~err grvik Rd is Note, than the Chor.no Price. Otadraduatikod: Participant A: IND 42 perEECfor400(12EG Participant A: USD 41 per ZEC for 5650 ZEC Participant C: USD 41 per ZEC for 5088 ZEC Participant II: USD 40 per ZEC for 10900 ZEC Clearing allacalian .WA WA WA WA Example 2 Pargdparit A's bit freaked first) Single bid: USD 42 per ZEC for 10004 ZEC Clearing bid: IND 42 per ZEC for ago ZEC Clearing Old: USD 41 per ZEC for 5650 ZEC Participant We bids frectired second) Participant Cs blds freaked third/ Single Old: USO 41 per EEC for 10908 ZEC Clearing Old: USD 41 per EEC for 5000 ZEC Clearing bid: USD 90 per ZEC far 10000 ZEC ClitatingPrirm $41 Highest Single Bid: $42 Rends $42 per ZEC peened Sing» Bid) ParticipantrtroccconsIDOCOZEC CbtatlAtMatikrA030A; Part icipant A: IND 42 per ZEC for 4010 ZEC Participant A: USD 41 par ZEC for 5658 ZEC Participant C: IND 41 per ZEC for 5000 ZEC WA Participant II: IND 4(1 per EEC for 113800 ZEC WA Porticipant A's Smite Bid takes precedence owe Pink/pant a's because Pattletpent Rs bids were reraed before ParthrJpont Erg Clearing ~gin WA WA Example 3 ranizant41/2 alds (retbred first) Single bid: USD 90 per ZEC for 10000 ZEC Clearing Old: IND 42 per ZEC for 4000 ZEC Clearing Old: IND 41 per ZEC for 5650 ZEC Participant e's bids (manta:nod) Participant Cs bids freaked third/ Single bid: USD 41 par ZEC for 180418 ZEC Clearing bid: USD 42 per ZEC for 5088 ZEC Clearing bid: USD 40 per ZEC for 10000 EEC (StarkePrice: $41 IffightstIlfl $41 Rut $41 per MC liaghest Single Bid) Participant B receives 10.000 ZEC °canna Olds ranked: Participant A: USD 42 par ZEC for 4088 ZEC Participant C: USD 42 per ZEC for 5046 ZEC Participant A: USD 41 per ZEC for 565B ZEC Participant B: USD 48 par ZEC for 10880 ZEC The foohest Sigh &V end the among Price are ay& the Highest Stook MI totes precedence over the Clear/no Pike. Cleagnit allocation WA WA WA WA Example 4 Participant A's bleistrectiredikst) Single Old: IND 40 per ZEC for 10000 ZEC Clearing bid: IND 42 per ZEC for 4000 ZEC Clearing bid: IND 41 per ZEC for 5858 ZEC Participant Be' bids tracerred second) Participant Cs blds irereiVed Wm" Single Old: USD 40 per 2EC for 10000 ZEC Clearing bid: USD 43 per ZEC for Salle ZEC Clearing bid: USD 40 per ZEC for 10000 EEC øfficlogliks $41 Highest Single Bid: $40 $41 pa ZEC Kleanng Price/ Pancipant C receives 5,030 ZEC Pancipant A romves 5.000ZEC Cleating naldn8.11" , nails* Magadan Participant C: USD 43 per ZEC for 5900 ZEC 5000 Participant A: US() 42 per ZEC for 4480 ZEC 4000 Participant A: ND El per ZEC for 5658 ZEC 1000 Participant B: USD 40 per ZEC for 10000 ZEC me Charing Price H lather dim the >West Single Bid. Both winning Portingorws pay the ~le pike ($41 Per 22 ). Note that both Pottirlpool A's ~flog Bids «cent ZEC ~Warw. Example 5 Participant At alt freaked fast) Single bid: USD 40 per ZEC for 10000 ZEC Clearing Old: IND 41 per ZEC for 4000 ZEC Clearing bid: USD 48 per ZEC for 5650 ZEC Participant We bids irconVed second) Single bid: USD 41 per ZEC for 10000 /EC Clearing bid: USD 42 per ZEC for 8889 ZEC Pardolpant Cs bids (nailed third? Clearing bid: USD 42 per ZEC for 5900 ZEC crtannc Peke: $42 tlithtw5lottlellid; $41 Rena $42 per ZEC 'Clean% Price/ Participant B receives 8.000 Zit Participant C receives 2000 ZEC Clearing Bids ranked: Participant 0: USD 42 par ZEC for 80110 ZEC Participant C: IND 42 per ZEC for 51300 ZEC Participant A: USD 41 par ZEC for 40110 ZEC 0 Participant A: USD 40 per ZEC for 5658 ZEC 0 Both sywnng PorboOonts 18 .4 QM the some price ($42 per Ha Participant B's cleodoo &el I soh« pnalev for ouocotwo of ZEC because Pottle-4,mM B's bids were tacked before Participant Cs Undo& allocation 8000 2000 Example 6 Participant AY alt freaked Prig Single bid: USD 40 per ZEC for 10000 ZEC Clearing bid: USD Al per ZEC for 4000 IEC Clearing Old: USD 40 per EEC for 5650 ZEC Panldpant. bids (rreeired fourthi Clearing bid: USD 45 per ZEC for 2000 ZEC Clearing bid: IND 44 per ZEC for 2898 ZEC Clearing bid: IND 43 per 2EC for 2040 2EC Participant lEs bids Peaked secood) Single 010: USO 41 per 2EC for 10004 EEC Clearing bid: 050 42 per ZEC for 8000 ZEC Pastelpant bis (received fifth ,/ Clearing bid: USD 43 per ZEC for 1000 Zee Clearing USD 42 per ZEC for 1080 EEC Clearing bid: USD 41 per ZEC for 1000 2C Clearing bid: USD 90 per ZEC for 1080 EEC Partipal Cs bids (recited third) Clearing Old: IND 42 per ZEC for 5088 ZEC Participant Ps Olds pectWedstitn) Single Old: USD 41 per ZEC for 10001 ZEC Clearing bid: USD 41 per ZEC for 10888 ZEC ClfaciDpittlge.: $42 tIlabsst.SIaalsAisL $41 Result: $42 per ZEC 'Cleating Price/ Participant D roteins 6,000 MC Participant E receives 1.003ZEC Participant B receives 3.000 ZEC mhwoniooportwieooNpoydwsomepncef$420aZW. PortinOzot B's ckonOg bid of USO 42 per ZEC Is ran pnontylor olfaction ofZEC !mediae Participant z' bids writ received before Portfripont Cs and PartIcipani Note that oil of Participant leaeorlAg Bids rem* EEC &Nations, totoffing &POO ZEC. Clearing. allocation Participant D: USD 45 per EEC for MG ZEC 2000 Participant D: USD 44 per ZEC for 2880 ZEC 2000 Participant D: USD 43 per ZEC for 2000 ZEC 2000 Participant E: USD 43 per ZEC for 1908 ZEC 1000 Participant 8: USD 42 per ZEC for BOBO ZEC 3000 Participant C: USD 42 per ZEC for 501)(1 ZEC 0 Participant E: USD 42 par ZEC for 1080 EEC 0 Participant A: USD 41 per ZEC for 4019 ZEC Participant E: USD 41 par ZEC for 1080 EEC 0 Participant F: USD 41 per ZEC for 10090 ZEC Participant A: USD 40 per ZEC for 5658 ZEC Participant E: USD 40 per ZEC for 1008 ZEC 0 EFTA00603353 Letter of Intent (Template) THIS LETTER OF INTENT (the "Letter") made as of this 25th day of December, 2016 (the "Execution Date"), BETWEEN: Signatory's Name of Participant Company Name of Participant Company's Address, (the "Participant") - AND - Zooko Wilcox of The Zerocoin Electric Coin Company LLC of ZECC's address (the "Seller"). BACKGROUND A. The Seller is the owner of certain assets that it intends to sell in an auction (the "Auction"). B. The Participant intends to participate in the Auction. This Letter will establish the basic terms to be used in the Auction. The terms contained in this Letter are not comprehensive and it is expected that additional terms may be added, and existing terms may be changed or deleted. The basic terms are as follows: Non-Binding 1. This Letter does not create a binding agreement between the Participant and the Seller and will not be enforceable. Only the future Bill of Sale, duly executed by the Seller and the Participant, will be enforceable. The terms and conditions of any future Bill of Sale will supersede all terms and conditions contained in this Letter. Transaction Description 2. The following is a complete description of the assets (the "Assets") to be sold in the Auction: an amount (to be specified at the time of the Auction) of Zcash virtual currency units ("ZEC") Representations 3. The Seller represents and warrants that the Assets are free and clear of any liens, charges, encumbrances or rights of other which will not be satisfied out of the sales proceeds. EFTA00603354 Conduct of the Auction 4. The Seller represents that it intends to conduct the Auction in the manner described in the attached memorandum ("the Memo"). 5. The Participant represents that it intends to participate in the Auction. 6. The Participant represents that if it submits a winning bid it will pay to the Seller the relevant amount of USD (the "Funds") by wire transfer directly to ZECC's Bank Account by the end of the first business day following the conclusion of the Auction. 7. The Seller represents that it will transfer to the Participant's t-address, the relevant amount of ZEC within 24 hours of confirming receipt of the Funds. 8. The following is the name, email address and phone number of the person who will conduct the Auction on behalf of the Seller ("Jack"): Name: Email address: Phone Number: Jack Gavigan 9. The following is the name, email address and phone number of the person who will participate in the auction on behalf of the Participant (the "Trader"): Name: Email address: Phone Number: 10. The following is the name, email address and phone number of the person who is authorised to sign the Bill of Sale on behalf of the Participant (the "Signatory"): Name: Email address: Phone Number: 11. The following is the bank account ("ZECC's Bank Account") to which the relevant amount of USD (the "Funds") will be paid by the Participant if it submits a winning bid ABA Routing Number: Account Number: Bank information: EFTA00603355 Destination account information: 12. The following is the Participant's transparent Zcash payment address (the "t-address") to which the relevant amount of ZEC will be transferred by the Seller in the event that the Participant submits a winning bid. Participant's t-address: This letter accurately reflects the understanding between the Seller and the Participant, signed on this 25th day of December, 2016. Signatory's Name of Participant Company Name (Participant) Zooko Wilcox of The Zerocoin Electric Coin Company LLC (Seller) EFTA00603356 Invoice (Template) Bill to: Participant Company Name Participant Company's Address Participant Company's Address Participant Company's Address Invoice #: Date: Due Date: ZECC-001 25th December 2016 26th December 2016 Item Zcash Currency Units (ZEC) From: The Zerocoin Electric Coin Company LLC ZECC's address ZECC's address ZECC's address Quantity xxxxx Price xx Amount xxx,xxx Balance Due: $xxx,xxx Payment Terms Payment due by close of business on 26th December 2016 to the following account: ABA Routing Number: Account Number: Bank information: Destination account information: EFTA00603357 Bill of Sale (Template) This Bill of Sale is made this 26th day of December, 2016 by The Zerocoin Electric Coin Company LLC of ZECC's address ("the Seller") and Participant Company Name of Participant Company's Address ("the Buyer"). For and in consideration of one hundred and twenty three thousand and four hundred and fifty six Dollars ($123,456), the receipt of which is hereby acknowledged, the Seller does hereby sell and convey to the Buyer the following property ("the Property"): XX,000 Zcash virtual currency units (ZEC) The Property was transferred to the Buyer by Zcash transaction transaction id. The Seller affirms that the Property is free and clear of any liens, charges, encumbrances or rights of other which will not be satisfied out of the sales proceeds. The Property is being sold on an "AS IS" basis and the Seller expressly disclaims all warranties, whether expressed or implied, including but not limited to, any implied warranty of merchantability or fitness for a particular purpose. The Seller does not assume, or authorize any other person to assume on the behalf of the Seller, any liability in connection with the sale of the Property. The Buyer acknowledges receipt of the Property and of this Bill of Sale. The Buyer agrees to indemnify the Seller for legal costs and expenses related to any legal action or dispute that arises out of this Sale. Further, the Buyer shall indemnify Seller for all Losses arising out of any actions (or omissions to act) of Seller or any of its Affiliates taken at the direction of the Buyer or any of its Affiliates. Zooko Wilcox of The Zerocoin Electric Coin Company LLC (Seller) Date Signatory's Name of Participant Company Name (Buyer) Date EFTA00603358