WHEREAS, the Parties desire to enter into periodic Purchase Orders for the purchase and sale of cryptocurrency as set forth herein and therein.
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
I. SALE AND PURCHASE OF THE PURCHASED CRYPTOCURRENCY
Section 1.1 Purchase Orders.
From time to time during the Term of this Agreement, either Party may engage the other Party in discussions regarding the purchase or sale of a specified amount of a given cryptocurrency at a specified price (“Transaction”). Such discussions may be completed via email, telephone, Skype, Zoom, Telegram, or any other means of communication setting forth the specific terms for such Transaction (each, a “Purchase Order”). Once both Parties have agreed to the sale and purchase of a specified cryptocurrency including: (i) the specific cryptocurrency, (ii) the amount of such cryptocurrency, and (iii) the price per cryptocurrency, such obligation shall become binding on both parties, subject to the further terms contained in this Agreement and the specific terms for such Transaction as set forth on the relevant Purchase Order.
Section 1.2 Purchase and Sale.
(a) On each Settlement Date, Counterparty or QCFL, as the case may be, shall sell, transfer and deliver the QCFL Purchased Cryptocurrency or the Counterparty Purchased Cryptocurrency, respectively, as specified in a Purchase Order, to the other Party, and such purchaser shall purchase all of the other party’s right, title and interest in and to such cryptocurrency from the seller.
(b) Promptly following the agreement to terms of a Purchase Order in accordance with Section 1.1, (i) if Counterparty is purchasing the Counterparty Purchased Cryptocurrency from QCFL, then Counterparty shall deliver or shall direct its agents or designees to deliver, the Counterparty Purchase Price to QCFL by transfer of immediately available funds or cryptocurrencies on the applicable Cryptocurrency Network to QCFL’s applicable location, bank account, wallet, address, account or storage device designated in Exhibit A attached hereto, or provided to Counterparty in other correspondence (each a “QCFL Wallet”) or (ii) if QCFL is purchasing the QCFL Purchased Cryptocurrency from Counterparty, then Counterparty shall deliver, or shall direct its agents or designees to deliver, the QCFL Purchased Cryptocurrency to QCFL by transfer of immediately available cryptocurrencies on the applicable Cryptocurrency Network to the applicable QCFL Wallet.
(c) Promptly following payment of the Counterparty Purchase Price or transfer of the QCFL Purchased Cryptocurrency by Counterparty, as set forth in Section 1.2(b) herein, (i) if Counterparty is purchasing the Counterparty Purchased Cryptocurrency from QCFL, then QCFL shall deliver, or shall direct its agents or designees to deliver, the Counterparty Purchased Cryptocurrency to Counterparty by transfer of immediately available cryptocurrencies on the applicable Cryptocurrency Network to Counterparty’s applicable location, wallet, address, account or storage device provided to QCFL during the counterparty onboarding process or in other correspondence (each a “Counterparty Wallet”) or (ii) if QCFL is purchasing the QCFL Purchased Cryptocurrency from Counterparty, then QCFL shall deliver or shall direct its agents or designees to deliver, the QCFL Purchase Price to Counterparty by transfer of immediately available funds or cryptocurrencies on the applicable Cryptocurrency Network the applicable Counterparty Wallet.
(d) In the event a Purchase Order is not settled on the Settlement Date, QCFL shall have the right to terminate such Purchase Order in QCFL’s sole discretion.
Section 1.3 Taxes.
The QCFL Purchase Price or Counterparty Purchase Price for the QCFL Purchased Cryptocurrency or Counterparty Purchased Cryptocurrency, as applicable, is exclusive of any applicable taxes. To the extent any taxes are applicable on the sale of the QCFL Purchased Cryptocurrency or Counterparty Purchased Cryptocurrency, the purchaser shall be obligated to pay all applicable taxes. To the extent that the seller does not collect any applicable taxes but it is later determined that taxes were collectible by the seller, the purchaser shall pay such applicable taxes to the seller upon notice of the applicable taxes. The seller is not liable for any taxes that the purchaser is legally obligated to pay, in any jurisdiction, which are incurred or arise in connection with or related to the purchaser’s business activities (under this Agreement or otherwise), and all such taxes will be the financial responsibility of the purchaser.
Section 1.4 Authorized Traders.
No person other than the signatory to this Agreement shall have the ability to place orders with QCFL on behalf of Counterparty; provided, however, that Counterparty may designate authorized individuals to trade with QCFL on its behalf (each an “Authorized Trader”) by listing the names and titles of such individuals in Exhibit B attached hereto. At any time after entering into this Agreement, Counterparty may designate additional Authorized Traders by sending an email to info@queencapitalfinance.com stating Counterparty’s intent to authorize such individual(s) to trade on its behalf. Such designation shall only be valid if sent by Counterparty from the email address specified in Exhibit B or, if no email address is so specified, from the email address designated for receipt of notices in Section 6.12(b) below.
Section 1.5 Forks.
Unless specifically contemplated by a Purchase Order, this Agreement shall not be construed to include in the QCFL Purchased Cryptocurrency or Counterparty Purchased Cryptocurrency any additional cryptocurrencies resulting from a Fork of any cryptocurrency.
II. DEFINITIONS
Section 2.1 In addition to the capitalized terms defined elsewhere in this Agreement, the following capitalized terms in this Agreement shall have the meanings specified in this Article II:
“Claim” shall mean any claim, action, audit, investigation, inquiry or other proceeding brought or instituted against a Party or any of its affiliates (and/or one or more of their representative employees, shareholders, directors or representatives) by a person or entity other than the other Party or its affiliates or subsidiaries.
“Counterparty Purchase Price” shall mean the price per applicable cryptocurrency set forth in a Purchase Order multiplied by the number of Counterparty Purchased Cryptocurrency set forth in such Purchase Order.
“Counterparty Purchased Cryptocurrency” shall mean the number and type of cryptocurrency Counterparty is obligated to purchase from QCFL pursuant to a Purchase Order.
“Cryptocurrency Network” shall mean the peer-to-peer computer network that governs the transfer of the applicable cryptocurrency.
“Foreign Bank” shall mean an organization that (i) is organized under the laws of a foreign country, (ii) engages in the business of banking, (iii) is recognized as a bank by the bank supervisory or monetary authority of the country of its organization or principal banking operations, (iv) receives deposits to a substantial extent in the regular course of its business, and (v) has the power to accept demand deposits, but does not include the U.S. branches or agencies of a foreign bank.
“Foreign Shell Bank” shall mean a Foreign Bank without a Physical Presence in any country, but does not include a regulated affiliate.
“Fork” shall mean a change to the protocol of a cryptocurrency wherein a permanent divergence in the blockchain results in two or more versions of a single cryptocurrency. By way of example, on August 1, 2017, a fork of Bitcoin occurred which resulted in two separate blockchains (Bitcoin and Bitcoin Cash), each supporting a distinct, tradeable cryptocurrency.
“Loss” shall mean any claim, cost, loss, damage, judgment, penalty, interest, and/or expense (including reasonable attorneys’ fees) arising out of any Claim.
“Non-Cooperative Jurisdiction” shall mean any country or territory that has been designated as non-cooperative with international anti-money laundering principles or procedures by an intergovernmental group or organization, such as the Financial Action Task Force on Money Laundering (“FATF”), of which the United States is a member and with which designation the United States representative to the group or organization continues to concur. See http://www.fatf- gafi.org for FATF’s list of non-cooperative countries and territories.
“OFAC” shall mean the United States Office of Foreign Assets Control. The lists of OFAC prohibited countries, territories, persons and entities can be found on the OFAC website at http://www.treas.gov/offices/enforcement/ofac/.
“Person” shall mean any individual, corporation, partnership, association, limited liability company, trust, estate or other entity, either individually or collectively.
“Physical Presence” shall mean a place of business that is maintained by a Foreign Bank and is located at a fixed address, other than solely a post office box or an electronic address, in a country in which the Foreign Bank is authorized to conduct banking activities, at which location the Foreign Bank (i) employs one or more individuals on a full-time basis, (ii) maintains operating records related to its banking activities, and (iii) is subject to inspection by the banking authority that licensed the Foreign Bank to conduct banking activities.
“Prohibited Transaction” means any transfer of any kind whereby any property or economic advantage is derived from the proceeds of a crime, or is involved in money laundering, or is derived from terrorist financing.
“Settlement Date” shall mean the date of each Purchase Order.
“QCFL Purchase Price” shall mean the price per applicable cryptocurrency set forth in a Purchase Order multiplied by the number of QCFL Purchased Cryptocurrency set forth in such Purchase Order.
“QCFL Purchased Cryptocurrency” shall mean the number and type of cryptocurrency QCFL is obligated to purchase from Counterparty pursuant to a Purchase Order.
III. REPRESENTATIONS AND WARRANTIES AND COVENANTS
Section 3.1 QCFL Representations and Warranties.
QCFL represents and warrants to Counterparty, as of the date hereof and on each Settlement Date:
(a) QCFL is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation. QCFL has all necessary corporate power and authority to enter into this Agreement, to carry out its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery by QCFL of this Agreement, the performance by QCFL of its obligations hereunder and the consummation by QCFL of the transactions contemplated hereby have been duly authorized by all requisite company action on the part of QCFL.
(b) This Agreement has been duly executed and delivered by QCFL and (assuming due authorization, execution and delivery by Counterparty), this Agreement constitutes a valid and legally binding obligation of QCFL, enforceable against QCFL in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and any other laws of general application affecting enforcement of creditors’ rights generally.
(c) Neither the execution and delivery of this Agreement, nor the consummation of the transactions contemplated hereby, does or will violate any statute, regulation, rule, judgment, order, decree, ruling, charge or other restriction of any government, governmental agency, or court to which QCFL is subject or conflict with, violate or constitute a default under any agreement, debt or other instrument to which QCFL is a party.
(d) Neither QCFL, nor any Person who controls QCFL or any Person for whom QCFL is acting as an agent or nominee, as applicable (1) bears a name that appears on the List of Specially Designated Nationals and Blocked Persons maintained by OFAC from time to time; (2) is a Foreign Shell Bank; or (3) resides in or whose subscription funds are transferred from or through an account in a Non- Cooperative Jurisdiction.
(e) With respect to any Counterparty Purchased Cryptocurrency, QCFL sells, transfers and delivers to Counterparty under any Purchase Order, QCFL is the lawful owner of such Counterparty Purchased Cryptocurrency with good and marketable title thereto, and QCFL has the absolute right to sell, assign, convey, transfer and deliver such Counterparty Purchased Cryptocurrency. Such Counterparty Purchased Cryptocurrency is free and clear of any and all security interests, liens, pledges, claims (pending or threatened), charges, escrows, encumbrances or similar rights.
(f) QCFL is the lawful owner of each QCFL Wallet, and has good title thereto. Each QCFL Wallet is owned and operated solely for the benefit of QCFL, and no Person, other than QCFL, has any right, title or interest in any QCFL Wallet.
Section 3.2 Counterparty Representations and Warranties.
Counterparty hereby represents and warrants to QCFL, as of the date hereof and on each Settlement Date:
(a) If Counterparty is an entity, that (i) it is duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is organized; (ii) it has all necessary power and authority to enter into this Agreement, to carry out its obligations hereunder and to consummate the transactions contemplated hereby; and the execution and delivery by Counterparty of this Agreement, the performance by Counterparty of its obligations hereunder and the consummation by Counterparty of the transactions contemplated hereby have been duly authorized by all requisite company action on the part of Counterparty. If Counterparty is an individual, that it is of sound mind, has the legal capacity to enter into this Agreement, has entered into this Agreement on his or her own will, understands the nature of the obligations to be assumed by him or her under this Agreement and this Agreement will be legally binding on Counterparty.
(b) This Agreement has been duly executed and delivered by Counterparty and (assuming due authorization, execution and delivery by QCFL), this Agreement constitutes a valid and legally binding obligation of Counterparty, enforceable against Counterparty in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and any other laws of general application affecting enforcement of creditors’ rights generally.
(c) Neither the execution and delivery of this Agreement, nor the consummation of the transactions contemplated hereby, does or will violate any statute, regulation, rule, judgment, order, decree, ruling, charge or other restriction of any government, governmental agency, or court to which Counterparty is subject or conflict with, violate or constitute a default under any agreement, debt or other instrument to which Counterparty is a party.
(d) It does not require approval from any governmental authority or person to execute, deliver or perform obligations under this Agreement, and there is no proceeding or investigation pending or, to the knowledge of the Counterparty, threatened by any governmental authority, that would reasonably be expected to become the basis for the disqualification of the Counterparty from entering into a Transaction;
(e) Neither Counterparty, nor any Person who controls Counterparty or any Person for whom Counterparty is acting as an agent or nominee (each, a “Prohibited Person”), as applicable, (1) bears a name that appears on the List of Specially Designated Nationals and Blocked Persons maintained by OFAC from time to time; (2) is a Foreign Shell Bank; or (3) resides in or whose subscription funds are transferred from or through an account in a Non- Cooperative Jurisdiction.
(f) With respect to any QCFL Purchased Cryptocurrency, Counterparty sells, transfers and delivers to QCFL under any Purchase Order, Counterparty is the lawful owner of such QCFL Purchased Cryptocurrency with good and marketable title thereto, and Counterparty has the absolute right to sell, assign, convey, transfer and deliver such QCFL Purchased Cryptocurrency. Such QCFL Purchased Cryptocurrency is free and clear of any and all security interests, liens, pledges, claims (pending or threatened), charges, escrows, encumbrances or similar rights.
(g) That the QCFL Purchased Cryptocurrency to be sold and delivered to QCFL pursuant to this Agreement is not, and has not been, derived from any Prohibited Transaction or accepted from any Prohibited Person or has otherwise been obtained in violation of applicable law.
(h) Counterparty is the lawful owner of each Counterparty Wallet, and has good title thereto. Each Counterparty Wallet is owned and operated solely for the benefit of Counterparty, and no Person, other than Counterparty, has any right, title or interest in any Counterparty Wallet.
(i) Counterparty agrees, understands and acknowledges that (i) QCFL engages in the bilateral purchase and sale of cryptocurrencies, including any such transaction contemplated by this Agreement, solely on a proprietary basis for investment purposes for its own account; (ii) if QCFL transacts with Counterparty it does so solely on a bilateral basis; and (iii) QCFL is not providing and will not provide any fiduciary, advisory, exchange or other similar services with respect to Counterparty, any person related to or affiliated with Counterparty, or any transaction subject to this Agreement. Counterparty further agrees, represents and warrants that (x) Counterparty is solely responsible for any decision to enter into a transaction subject to this Agreement, including the evaluation of any and all risks related to any such transaction; and (y) in entering into any such transaction, Counterparty has not relied on any statement or other representation of QCFL other than as expressly set forth herein.
Section 3.3 Counterparty Covenants.
Counterparty hereby covenants to QCFL:
(a) That in order to comply with measures aimed at the prevention of money laundering and terrorism financing, it undertakes to and upon written demand from QCFL and/or any of its delegates or agents provide: (a) such relevant information and documentation as QCFL and/or any of its delegates or agents may reasonably request to verify any information about it in compliance with applicable anti- money laundering laws and regulations; and (b) any further relevant information and documentation as the QCFL and/or any of its delegates or agents may request from time to time to ensure ongoing compliance with applicable laws and regulations, or any other related policies. It shall furnish all relevant information requested by QCFL for the conduct of Anti-Money Laundering / Countering the Financing of Terrorists (“AML/CFT”) checks within the requested time frame, provided that the time frame is reasonable. QCFL and/or any of its delegates or agents, may require verification of the identity of it and the source of its funds (as applicable) before the Transaction can be processed. The Counterparty agrees and acknowledges that each Transaction is subject to the requirement that the Counterparty passes all AML/CFT checks.
(b) It will not directly or indirectly violate or assist any Person in violating any law, statute, ordinance, regulation or any rule of any self-regulatory or similar organization.
IV. INDEMNIFICATION
Section 4.1 Indemnity.
The Counterparty (the “Indemnifying Party”) shall defend, indemnify, and hold harmless QCFL and its affiliates (and each of their employees, shareholders, directors, and representatives) (each an “Indemnified Party”) from and against and Claim or Loss to the extent any Claim or Loss is based on (a) the breach of any representation, warranty or covenant of this Agreement by the Indemnifying Party or caused by the Indemnifying Party’s employees, contractors, or agents; (b) the Indemnifying Party or the Indemnifying Party’s employees, contractors or agents violation of applicable law, gross negligence, fraud, or intentional misconduct; or (c) any claim of a third party or QCFL arising out of or occurring in connection with any Transaction in connection with this Agreement.
Section 4.2 Indemnification Procedure.
In connection with any Claim or Loss described in Section 4.1, the Indemnified Party shall: (a) give the Indemnifying Party prompt notice of Claim or Loss (however, any delay in notification will not relieve the Indemnifying Party of its obligations under Section 4.1 except and solely to the extent that the delay materially impairs Indemnifying Party’s ability to defend the Claim or Loss), (b) cooperate reasonably with Indemnifying Party (at the Indemnifying Party’s sole expense) in connection with the defense and settlement of the Claim or Loss, and (c) permit the Indemnified Party to control the defense and settlement of the Claim or Loss, except that the Indemnifying Party shall not enter into any settlement or compromise of any Claim or Loss without Indemnified Party’s prior written consent if such settlement or compromise arises from or is part of any criminal action, suit or proceeding or contains a stipulation to or admission or acknowledgement of, any liability or wrongdoing (whether in contract, tort or otherwise) on the part of Indemnified Party or otherwise requires Indemnified Party to take or refrain from taking any material action (such as the payment of fees). The Indemnified Party (at its cost) may participate in the defense or settlement of the Claim or Loss with counsel of its own choosing.
V. LIMITATION OF LIABILITY
Section 5.1 Unless otherwise expressly provided for in this Agreement, QCFL shall not be liable to the Counterparty for any consequential, indirect, incidental, special, exemplary, punitive, or enhanced damages of any kind, or lost profits, or revenues, or diminution in value to the other Party, arising out of or in any way related the sale or use of the QCFL Purchased Cryptocurrency or Counterparty Purchased Cryptocurrency or any matter otherwise related to this Agreement and the Transaction, regardless of the form of action, whether based in contract, tort, or any other legal or equitable theory; and in no event will the aggregate liability of QCFL, whether in contract, warranty, tort, or other theory, arising out of or in any way related to the sale or use of the QCFL Purchased Cryptocurrency or Counterparty Purchased Cryptocurrency, the Transaction, this Agreement, or the use of or inability to use the QCFL Purchased Cryptocurrency or Counterparty Purchased Cryptocurrency, exceed the Counterparty Purchase Price.
VI. MISCELLANEOUS
Section 6.1 Term and Termination.
(a) This Agreement shall remain in full force and effect until terminated in writing by either Party with thirty (30) days’ of written notice to the other Party.
(b) QCFL may terminate this Agreement with immediate effect:
(i) In the event any applicable law prohibits or renders illegal the Transaction; or
(ii) If the Counterparty has breached its obligation pursuant to this Agreement or there is an inaccuracy in its representations and warranties hereunder, where the effect of such breach or inaccuracy prevents the Counterparty from performing its obligations pursuant to the Transaction.
Section 6.2 Post Termination.
Upon termination of this Agreement for any reason whatsoever, the obligations of the Parties to each other shall cease unless otherwise expressly provided for in this Agreement. No termination shall release any Party from any liability or obligations which at any time of such termination has already accrued to the non-breaching Party or which may accrue thereafter in respect of any act, omission or breach prior to such termination.
Section 6.3 Amendments; Waivers.
The provisions of this Agreement may be amended only if the other Party has consented in writing to such amendment, action or omission. No such consent with respect to any such action or omission shall operate as a consent to, waiver of, or estoppel with respect to, any other or subsequent action or omission. No failure to exercise and no delay in exercising any right, remedy or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy or power hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy or power provided herein or by law or at equity.
Section 6.4 Assignment; Successors and Assigns.
This Agreement shall be binding on and inure to the benefit of the Parties and their respective successors, heirs, personal representatives, and permitted assigns. Counterparty may not assign or delegate its rights or obligations hereunder without the prior written consent of QCFL, which may be withheld in QCFL’s sole discretion.
Section 6.5 Severability.
Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.
Section 6.6 Descriptive Headings and Construction.
The descriptive headings of this Agreement are inserted for convenience only and do not constitute a part of this Agreement. Unless otherwise indicated, references to Articles and Sections herein are references to Articles and Sections of this Agreement.
Section 6.7 Force Majeure.
Neither Party shall be liable, and each disclaims all liability to the other Party in connection with any force majeure event, including acts of God, labour disputes or other industrial disturbances, or utility failures, software or smart contract bugs or weaknesses, or nature- related events, blockages, embargoes, riots, acts or orders of government, acts of terrorism or war, technological change, changes in interest rates or other monetary conditions, or any technology failure and/or cybersecurity breach not attributable to the Parties.
Section 6.8 Governing Law.
This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the British Virgin Islands, without giving effect to the principles of conflicts of law thereof. Any dispute, controversy, difference or claim arising out of or relating to this Agreement, including the existence, validity, interpretation, performance, breach or termination thereof or any dispute regarding non-contractual obligations arising out of or relating to it shall be referred to and finally resolved by arbitration administered by the Hong Kong International Arbitration Centre (“HKIAC”) under the HKIAC Administered Arbitration Rules in force when the Notice of Arbitration is submitted. The law of this arbitration clause shall be Hong Kong law. The seat of arbitration shall be Hong Kong. The number of arbitrators shall be one (1). The arbitration proceedings shall be conducted in English.
Section 6.9 Confidentiality.
Each of QCFL and Counterparty hereby agrees to not disclose, and to otherwise keep confidential, the transactions contemplated hereby, the existence or nature of any relationship between the Parties, the name of the other Party or the fact that the Parties engaged in any transaction (“Confidential Information”), provided, however, that each Party may disclose Confidential Information to its directors, officers, members, employees, agents, affiliates, and professional advisers or to financial institutions providing services to a Party in connection with any applicable anti-money laundering or compliance requirements. If either Party is required by law, rule or regulation, or advised by legal counsel to disclose such information (the “Required Party”), the Required Party will, to the extent legally permissible, provide the other Party (the “Subject Party”) with prompt written notice of such requirement so that such Subject Party may seek an appropriate protective order or waive compliance with this Section 6.9. The Subject Party shall promptly respond to such request in writing by either authorizing the disclosure or advising of its election to seek such a protective order, or, if such Subject Party fails to respond promptly, such disclosure shall be deemed approved. The confidentiality obligations set forth in this Section 6.9 shall survive for two (2) years after the termination or expiration date of this Agreement.
Section 6.10 Entire Agreement.
This Agreement and each Purchase Order executed on or after the date hereof contain the entire agreement among the Parties with respect to the subject matter hereof and supersede all prior agreements and understandings, written or oral, among the Parties with respect thereto.
Section 6.11 Counterparts.
This Agreement may be executed in one or more counterparts, each of which when so executed and delivered shall be an original, but all such counterparts taken together shall constitute one and the same instrument. Transmission by telecopy, email or other form of electronic transmission of an executed counterpart of this Agreement shall be deemed to constitute due and sufficient delivery of such counterpart.
Section 6.12 Notices, Consents, etc.
Any notices, consents or other communications required or permitted to be sent or given hereunder by either of the Parties shall in every case be in writing and shall be deemed properly served if (i) delivered personally, (ii) sent by registered or certified mail, in all such cases with first class postage prepaid, return receipt requested, (iii) delivered by a recognized overnight courier service or (iv) sent via email, to the Parties, at the addresses as set forth below or at such other addresses as may be furnished in writing.
(a) If to QCFL, to:
Queen Capital Finance Limited
Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands
Email: info@queencapitalfinance.com
(b) If to Counterparty, to: