POST QUALIFICATION AMENDMENT
This is a post-qualification amendment to an offering statement on Form 1-A filed by Mythic Collection, LLC (the “Company”). The offering statement was originally filed by the Company on July 31, 2019 and has been amended by the Company on multiple occasions since that date. The offering statement was initially qualified by the U.S. Securities and Exchange Commission (the “SEC”) on August 5, 2019.
Different Series of the Company have already been offered or have been qualified but not yet launched as of the date hereof, by the Company under the offering statement, as amended and qualified. Each such Series of the Company will continue to be offered and sold by the Company following the filing of this post-qualification amendment subject to the offering conditions contained in the offering statement, as qualified.
The purpose of this post-qualification amendment is to add to the offering statement, as amended and qualified, the offering of additional Series of the Company and to amend, update and/or replace certain information contained in the Offering Circular, including information with respect to certain Series previously qualified but not yet launched. The Series already offered, or qualified but not yet launched as of the date hereof, under the offering statement, and the additional Series being added to the offering statement by means of this post-qualification amendment, are outlined in the Master Series Table contained in the section titled “The Interest in Series Covered by This Amendment” of the Offering Circular to this post-qualification amendment.
This Post-Qualification Offering Circular Amendment No. 4 amends the Offering Circular of Mythic Collection LLC, dated July 31, 2019, as qualified on August 5, 2019, and as may be amended and supplemented from time to time (the “Offering Circular”), to add additional securities to be offered pursuant to the Offering Circular. Unless otherwise defined below, capitalized terms used herein shall have the same meanings as set forth in the Offering Circular. See “Incorporation by Reference of Offering Circular” below. An offering statement pursuant to Regulation A relating to these securities has been filed with the Securities and Exchange Commission. Information contained in this Preliminary Offering Circular is subject to completion or amendment. To the extent not already qualified under Regulation A, these securities may not be sold nor may offers to buy be accepted before the offering statement filed with the Commission is qualified. We may elect to satisfy our obligation to deliver a Final Offering Circular by sending you a notice within two business days after the completion of our sale to you that contains the URL where the Final Offering Circular or the offering statement in which such Final Offering Circular was filed may be obtained.
POST-QUALIFICATION OFFERING CIRCULAR AMENDMENT NO. 4
SUBJECT TO COMPLETION; DATED June 29, 2020
Securities may not be sold nor may offers to buy be accepted before the offering statement filed with the Commission is qualified. This Preliminary Offering Circular shall not constitute an offer to sell or the solicitation of an offer to buy nor may there be any sales of these securities in any state in which such offer, solicitation or sale would be unlawful before registration or qualification under the laws of any such state. We may elect to satisfy our obligation to deliver a Final Offering Circular by sending you a notice within two business days after the completion of our sale to you that contains the URL where the Final Offering Circular or the offering statement in which such Final Offering Circular was filed may be obtained.
OFFERING CIRCULAR
MYTHIC COLLECTION, LLC
16 LAGOON CT, SAN RAFAEL, CA 94903
(415-335-6370) Telephone Number
www.mythicmarkets.com
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| Series Membership Interests Overview |
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| Price to Public | Underwriting Discounts and Commissions (1) | Proceeds to Issuer | Proceeds to Other Persons | ||
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| Series MTG-ABL90 | Per Unit (2) | $45.00 |
| $45.00 | |
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| Total Minimum | $56,250.00 |
| $56,250.00 | |
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| Total Maximum | $90,000.00 |
| $90,000.00 | |
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| Series MTG-94BOX | Per Unit (2) | $27.50 | $0.77 | $26.73 | |
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| Total Minimum | $34,375.00 | $ 1,336.88 | $33,038.12 | |
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| Total Maximum | $55,000.00 | $ 1,539.00 | $53,461.00 | |
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| Series ART-GGMTG | Per Unit (2) | $71.50 | $1.20 | $70.30 | |
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| Total Minimum | $143,000.00 | $2,401.40 | $140,598.60 | |
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| Total Maximum | $143,000.00 | $2,401.40 | $140,598.60 | |
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| Series COM-AF157 | Per Unit (2) | $46.00 | $0.95 | $45.05 | |
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| Total Minimum | $55,000.00 | $1,539.00 | $53,461.00 | |
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| Total Maximum | $92,000.00 | $1,901.60 | $90,098.40 | |
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| Series ART - BHERO | Per Unit (2) | $4 2 .00 | $ 1 . 41 | $4 0 . 59 |
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| Total Minimum | $42,000.00 | $ 1,411.60 | $ 40,588.40 |
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| Total Maximum | $42,000.00 | $ 1,411.60 | $ 40,588.40 |
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| Series COM-FF160 | Per Unit (2) | $ 32 .00 | $ 1 . 31 | $ 30 . 69 |
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| Total Minimum | $ 32 ,000.00 | $ 1,313.60 | $30,686.40 |
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| Total Maximum | $ 32 ,000.00 | $ 1,313.60 | $30,686.40 |
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(1) North Capital Private Securities Corporation, or the “Broker”, will be acting as our executing broker in connection with each offering. The fees paid to the Broker consist of three parts, which will be referred to as the “Initial Fee”, the “Series Fee”, and “Secondary Series Fee”, together, the “Brokerage Fees”. The Initial Fee consists of a 1% commission paid on gross proceeds raised through all series offerings. The Series Fee consists of a 7.5% commission on gross proceeds in this offering for all series until the Broker has received $10,000 in fees. The Series Fee is paid by our manager without reimbursement by the company. Following receipt of the Series Fee by the Broker, the Broker will then receive a Secondary Series Fee consisting of a 7.5% commission on the gross proceeds for each series until the Broker has received up to $1,000. The Brokerage fee indicated in the table is based on our manager purchasing 2% of the interests of each series. We intend to distribute each series of our interests principally through the Mythic Markets Platform. See “Plan of Distribution and Subscription Procedure.”
(2) Assuming the maximum amount of applicable Offering is sold.
Mythic Collection, LLC, a Delaware series limited liability company (“we,” “us,” “our,” “Mythic Collection” or the “Company”) is offering, on a best efforts basis, membership interests of each of the following series of the Company, highlighted in blue or yellow in the “Interests in Series Covered by this Amendment” section. The sale of membership interests is being facilitated by the Broker, a broker-dealer registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and member of FINRA and is registered in each state where the offer or sales of the Interests will occur.
It is anticipated that Interests will be offered and sold only in states where the Broker is registered as a broker-dealer. For the avoidance of doubt, the Broker does not and will not solicit purchases of Interests or make any recommendations regarding the Interests to prospective investors.
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All of the series of the Company offered hereunder may collectively be referred to herein as the “Series” and each, individually, as a “Series”. The interests of all Series described above may collectively be referred to herein as the “Interests” and each, individually, as an “Interest” and the offerings of the Interests may collectively be referred to herein as the “Offerings” and each, individually, as an “Offering.” See “Description of the Interests Offered” on below for additional information regarding the Interests.
The Company is managed by Mythic Markets, Inc., a Delaware corporation (the “Manager”). Mythic Markets will also serve as the asset manager (the “Asset Manager”) for each Series of the Company and provides services to the Underlying Assets in accordance with a Shared Services and Management Agreement that it expects to enter into with the Manager (the “Management Agreement”).
It is anticipated that the Company’s core business will be the identification, acquisition, marketing and management of collectible assets for the benefit of the investors. The Series assets referenced in the Interests in Series Covered by this Amendment section may be referred to herein, collectively, as the “Underlying Assets” or each, individually, as an “Underlying Asset.” Any individuals, dealers or auction company which owns an Underlying Asset prior to a purchase of an Underlying Asset by the Company in advance of a potential offering or the closing of an offering from which proceeds are used to acquire the Underlying Asset may be referred to herein as a “Seller” or the “Asset Seller”. See “Description of the Business” for additional information regarding the Asset Class.
The Interests represent an investment in a particular Series and thus indirectly the Underlying Asset and do not represent an investment in the Company or the Manager generally. We do not anticipate that any Series will own any assets other than the Underlying Asset associated with such Series. However, we expect that the operations of the Company, including the issuance of additional Series of Interests and their acquisition of additional assets, will benefit Investors by enabling each Series to benefit from economies of scale and by allowing Investors to enjoy the Company’s collection of Underlying Assets at the Membership Experience Programs.
A purchaser of the Interests may be referred to herein as an “Investor” or “Interest Holder.” There will be a separate closing with respect to each Offering (each, a “Closing”). The Closing of an Offering will occur on the earliest to occur of (i) the date subscriptions for the Total Maximum Interests for a Series have been accepted or (ii) a date determined by the Manager in its sole discretion, provided that subscriptions for the Total Minimum Interests of such Series have been accepted. If Closing has not occurred, an Offering shall be terminated upon (i) the date which is one year from the date such Offering Circular or Amendment, as applicable, is qualified by the U.S. Securities and Exchange Commission, or the “Commission”, which period may be extended with respect to a particular Series by an additional six months by the Manager in its sole discretion, or (ii) any date on which the Manager elects to terminate the Offering for a particular Series in its sole discretion, such date not to exceed the date which is 18 months from the date the Offering Circular or amendment thereto, as applicable, is qualified by the SEC.
No securities are being offered by existing security-holders.
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A purchase of Interests in a Series does not constitute an investment in either the Company or an Underlying Asset directly, or in any other Series of Interest. This results in limited voting rights of the Investor, which are solely related to a particular Series, and are further limited by the Operating Agreement of the Company, described further herein. Investors will have voting rights only with respect to certain matters, primarily relating to amendments to the Operating Agreement that would adversely change the rights of the Interest Holders and removal of the Manager for “cause”. The Manager and the Asset Manager thus retain significant control over the management of the Company, each Series and the Underlying Assets. Furthermore, because the Interests in a Series do not constitute an investment in the Company as a whole, holders of the Interests in a Series are not expected to receive any economic benefit from, or be subject to the liabilities of, the assets of any other Series. In addition, the economic interest of a holder in a Series will not be identical to owning a direct undivided interest in an Underlying Asset because, among other things, a Series will be required to pay corporate taxes before distributions are made to the holders, and the Asset Manager will receive a fee in respect of its management of the Underlying Asset.
GENERALLY, NO SALE MAY BE MADE TO YOU IN THIS OFFERING IF THE AGGREGATE PURCHASE PRICE YOU PAY IS MORE THAN 10% OF THE GREATER OF YOUR ANNUAL INCOME OR NET WORTH. DIFFERENT RULES APPLY TO ACCREDITED INVESTORS AND NON-NATURAL PERSONS. BEFORE MAKING ANY REPRESENTATION THAT YOUR INVESTMENT DOES NOT EXCEED APPLICABLE THRESHOLDS, WE ENCOURAGE YOU TO REVIEW RULE 251(d)(2)(i)(C) OF REGULATION A. FOR GENERAL INFORMATION ON INVESTING, WE ENCOURAGE YOU TO REFER TO WWW.INVESTOR.GOV.
The United States Securities and Exchange Commission does not pass upon the merits of or give its approval to any securities offered or the terms of the offering, nor does it pass upon the accuracy or completeness of any offering circular or other solicitation materials. These securities are offered pursuant to an exemption from registration with the Commission; however, the Commission has not made an independent determination that the securities offered are exempt from registration. This Offering Circular shall not constitute an offer to sell or the solicitation of an offer to buy, nor may there be any sales of these securities in, any state in which such offer, solicitation or sale would be unlawful before registration or qualification of the offer and sale under the laws of such state.
NOTICE REGARDING AGREEMENT TO ARBITRATE
THIS OFFERING MEMORANDUM REQUIRES THAT ALL INVESTORS ARBITRATE ANY DISPUTE, OTHER THAN THOSE RELATED TO CLAIMS UNDER FEDERAL SECURITIES LAWS AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER, ARISING OUT OF THEIR INVESTMENT IN THE COMPANY. ALL INVESTORS FURTHER AGREE THAT THE ARBITRATION WILL BE BINDING AND HELD IN THE STATE OF DELAWARE. EACH INVESTOR ALSO AGREES TO WAIVE ANY RIGHTS TO A JURY TRIAL. OUT OF STATE ARBITRATION MAY FORCE AN INVESTOR TO ACCEPT A LESS FAVORABLE SETTLEMENT FOR DISPUTES. OUT OF STATE ARBITRATION MAY ALSO COST AN INVESTOR MORE TO ARBITRATE A SETTLEMENT OF A DISPUTE.
An investment in the Interests involves a high degree of risk. See “Risk Factors” on Page 9 for a description of some of the risks that should be considered before investing in the Interests.
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MYTHIC COLLECTION, LLC
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| USE OF PROCEEDS – ALL SERIES | 26 |
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| MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION | 44 |
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| F-1 |
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| F-2 |
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| STATEMENT OF OPERATIONS FOR THE PERIOD FROM JANUARY 30, 2019 (INCEPTION) THROUGH DECEMBER 31, 2019 | F-3 |
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| F-4 |
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| STATEMENT OF CASH FLOWS FOR THE PERIOD FROM JANUARY 30, 2019 (INCEPTION) THROUGH DECEMBER 31, 2019 | F-5 |
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| F-6 |
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
The information contained in this Offering Circular includes some statements that are not historical and that are considered “forward-looking statements.” Such forward-looking statements include, but are not limited to, statements regarding our development plans for our business; our strategies and business outlook; anticipated development of the Company, the Manager, each series of the Company and the Mythic Markets Platform (defined below); and various other matters (including contingent liabilities and obligations and changes in accounting policies, standards and interpretations). These forward- looking statements express the Manager’s expectations, hopes, beliefs, and intentions regarding the future. In addition, without limiting the foregoing, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipates”, “believes”, “continue”, “could”, “estimates”, “expects”, “intends”, “may”, “might”, “plans”, “possible”, “potential”, “predicts”, “projects”, “seeks”, “should”, “will”, “would” and similar expressions and variations, or comparable terminology, or the negatives of any of the foregoing, may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.
The forward-looking statements contained in this Offering Circular are based on current expectations and beliefs concerning future developments that are difficult to predict. Neither the Company nor the Manager can guarantee future performance, or that future developments affecting the Company, the Manager or the Mythic Markets Platform will be as currently anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements.
All forward-looking statements attributable to us are expressly qualified in their entirety by these risks and uncertainties. These risks and uncertainties, along with others, are also described below under the heading “Risk Factors.” Should one or more of these risks or uncertainties materialize, or should any of the parties’ assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. You should not place undue reliance on any forward-looking statements and should not make an investment decision based solely on these forward- looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
Interests in series covered by this amendment
The master series table below, referred to at times as the “Master Series Table”, shows key information related to each Series. This information will be referenced in the following sections when referring to the Master Series Table. In addition, see the “Description of Underlying Asset” and “Use of Proceeds – All Series” section for each individual Series for further details.
The Series assets referenced in the Master Series Table below may be referred to herein, collectively, as the “Underlying Assets” or each, individually, as an “Underlying Asset”. Any individuals, dealers or auction company which owns an Underlying Asset prior to a purchase of an Underlying Asset by the Company in advance of a potential offering or the closing of an offering from which proceeds are used to acquire the Underlying Asset may be referred to herein as an “Asset Seller”.
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| Table of Contents |
| Series / Series Name | Qualification Date | Underlying Asset | Offering Price per Interest | Minimum Offering Size | Maximum Offering Size | Agreement Type | Opening Date (1) | Closing Date (1) | Status | Actual Offering Size | Minimum Membership Interests (2) | Maximum Membership Interests (2) | Comments |
| MTGABL90 / Series Alpha Black Lotus | 8/5/2019 | Alpha Black Lotus | $45.00 | $56,250.00 | $90,000.00 | Upfront Purchase | 8/19/2019 | 11/1/2019 | Closed | $90,000 | 2,000 | * Manager acquired the Underlying Asset for $51,000 on 10/15/2018
* The Company entered into a Purchase and Sale Agreement to acquire the Underlying Asset from the Manager for $79,000
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| MTG94BOX / Series 1994 Booster Boxes |
| Antiquities, Revised, Legends, The Dark, and Fallen Empires Booster boxes | $27.50 | $34,375.00 | $55,000.00 | Upfront Purchase | Q2 2020 | Q2 2020 | Upcoming |
| 2,000 | * Manager acquired the Underlying Asset for $61,000 on 6/17/2019
* The Company entered into a Purchase and Sale Agreement to acquire the Underlying Asset from the Manager for $47,850 | |
| ARTGGMTG / Alpha Giant Growth Art |
| Alpha Giant Growth Art | $71.50 | $143,000.00 | $143,000.00 | Upfront Purchase | Q4 2020 | Q4 2020 | Upcoming |
| 2,000 | * The Company entered into a Purchase and Sale Agreement to acquire the Underlying Asset from a Third Party Seller for $130,000 | |
| COMAF157 / Amazing Fantasy #15 |
| 1962 Amazing Fantasy #15 CGC FN/VF 7.0
| $46.00 | $55,000.00
| $92,000.00
| Upfront Purchase | Q3 2020 | Q3 2020 | Upcoming |
| 2,000 | * Manager acquired the Underlying Asset for $110,000 on 3/20/2020
* The Company entered into a Purchase and Sale Agreement to acquire the Underlying Asset from the Manager for $103,500 | |
| ARTBHERO / Alpha Benalish Hero Art |
| Magic: The Gathering Alpha Benalish Hero Art | $ 42 .00 | $ 42,000 .00
| $ 42,000.00
| Upfront Purchase | Q 4 2020 | Q 4 2020 | Upcoming |
| 1,000 | * Manager entered into a Purchase and Sale Agreement to acquire the Underlying Asset from a Third Party Seller for $39,000
* The Company entered into a Purchase and Sale Agreement to acquire the Underlying Asset from the Manager for $39,000 | |
| COM F F 160 / Fantastic Four #1 |
| 1961 Fantastic Four #1 CGC FN 6.0 | $ 32 .00 | $ 32 ,000.00
| $ 3 2,000.00
| Upfront Purchase | Q 3 2020 | Q 3 2020 | Upcoming |
| 1,000 | * Manager acquired the Underlying Asset for $ 29 ,000 on 6 / 1 0/2020
* The Company entered into a Purchase and Sale Agreement to acquire the Underlying Asset from the Manager for $ 29 , 0 00 | |
Note: Upcoming or Hold Status represents Series for which no Closing of an Offering has occurred and therefore these values represent expected values.
(1) If exact offering dates (specified as Month Day, Year) are not shown, then expected offering dates are presented.
(2) Interests sold in a Series is limited to 2,000 Qualified Purchasers with a maximum of 500 Non-Accredited Investors.
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| Table of Contents |
The following summary is qualified in its entirety by the more detailed information appearing elsewhere herein and in the Exhibits hereto. You should read the entire Offering Circular and carefully consider, among other things, the matters set forth in the section captioned “Risk Factors.” You are encouraged to seek the advice of your attorney, tax consultant, and business advisor with respect to the legal, tax, and business aspects of an investment in the Interests. All references in this Offering Circular to “$” or “dollars” are to United States dollars.
| The Company: | The Company is Mythic Collection, LLC, a Delaware series limited liability company formed January 30, 2019. |
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| Underlying Asset and Offering Price Per Interest: | The Company’s core business is the identification, acquisition, marketing and management of vintage comic books, collectible cards and fantasy art, the collectible Assets, collectively as the Underlying Assets of the Company.
It is not anticipated that any Series would own any assets other than its respective Underlying Asset, plus cash reserves for storage, insurance and other expenses pertaining to each Underlying Asset and amounts earned by each Series from the monetization of the Underlying Asset.
The Underlying Asset for each Series and the Offering Price per Interest for each Series is detailed in the Master Series Table. |
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| Securities offered: | Investors will acquire membership interests in a Series of the Company, each of which is intended to be separate for purposes of assets and liabilities. It is intended that owners of Interest in a Series will only have an interest in assets, liabilities, profits and losses pertaining to the specific Underlying Assets owned by that Series. For example, an owner of Interests in Series MTG-ABL90 will only have an interest in the assets, liabilities, profits and losses pertaining to the Series Alpha Black Lotus and its related operations. See the “Description of Interests Offered” section for further details. The Interests will be non-voting except with respect to certain matters set forth in the Amended and Restated Limited Liability Company Agreement of the Company (as amended, the “Operating Agreement”). The purchase of membership interests in a Series of the Company is an investment only in that Series (and with respect to that Series’ Underlying Asset) and not, for the avoidance of doubt, in (i) the Company, (ii) any other Series of Interests, (iii) the Manager, (iv) the Series Manager, (v) the Platform or (vi) the Underlying Asset associated with the Series or any Underlying Asset owned by any other Series of Interests. |
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| Investors: | Each Investor must be a “qualified purchaser.” See “Plan of Distribution and Subscription Procedure – Investor Suitability Standards” for further details. The Manager may, in its sole discretion, decline to admit any prospective Investor, or accept only a portion of such Investor’s subscription, regardless of whether such person is a “qualified purchaser”. Furthermore, the Manager anticipates only accepting subscriptions from prospective Investors located in states where the Broker is registered. |
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| Manager: | Mythic Markets, Inc., a Delaware corporation, is the manager of the Company and the Series. Mythic Markets, Inc. also owns and operates a web-based (desktop & mobile) investment platform called Mythic Markets (the Mythic Markets platform and any successor platform used by the Company for the offer and sale of interests, the “Mythic Markets Platform”) through which the Series Interests and other series interests are sold. The Manager will, together with its affiliates, own a minimum of 2% of the Series Interests upon the Closing of each Offering. However, the Manager may sell some or all of the Interests acquired pursuant to this Offering Statement from time to time after the Closing of an Offering. |
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| Advisory Board: | The Manager intends to assemble an expert network of advisors with experience in relevant industries (an “Advisory Board”) to assist the Manager in identifying, acquiring and managing vintage comic books, collectible cards and fantasy art pieces. |
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| Broker: | The Company has engaged the services of North Capital Private Securities Corporation to act as broker. See “Plan of Distribution and Subscription Procedure” |
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| Table of Contents |
| Minimum and Maximum Interest purchase: | The minimum subscription by an Investor is one (1) Interest in the Series and the maximum subscription by any Investor (other than the Manager) is for Interests representing 25% of the total Interests in the Series, although such maximum thresholds may be waived by the Manager in its sole discretion. Such limits do not apply to the Manager and/or affiliates of the Manager. The Manager and/or its affiliates must purchase a minimum of 2% of Interests of each Series at the Closing of its each Offering. The Manager may purchase greater than 2% of Interests of any Series at the applicable Closing, in its sole discretion. The purchase price, the Offering Price per Interest times the number of Interests purchased, will be payable in cash at the time of subscription. |
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| Offering Size: | The Company may offer a Total Minimum and a Total Maximum of Interests in each Series Offering as detailed for each Series in the Master Series Table.
The Manager and/or its affiliates must own a minimum of 2% of Interests of each Series at the Closing of its applicable Offering. The Manager may purchase greater than 2% of Interests of any Series at the applicable Closing, in its sole discretion. |
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| Escrow Agent: | North Capital Private Securities Corporation. |
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| Escrow: | The subscription funds advanced by prospective Investors as part of the subscription process will be held in a non-interest bearing escrow account with the Escrow Agent and will not be commingled with the operating account of the Series, until if and when there is a Closing with respect to that Investor.
When the Escrow Agent has received instructions from the Manager and the Broker that an Offering will close and the Investor’s subscription is to be accepted (either in whole or part), then the Escrow Agent shall disburse such Investor’s subscription proceeds in its possession to the account of the Series. Amounts paid to the Escrow Agent are categorized as Offering Expenses.
If an Offering is terminated without a Closing, or if a prospective Investor’s subscription is not accepted or is cut back due to oversubscription or otherwise, such amounts placed into escrow by prospective Investors will be returned promptly to them without interest. Any costs and expenses associated with a terminated offering will be borne by the Manager. |
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| Offering Period: | There will be a separate closing for each Offering. The Closing of an Offering for a particular Series will occur on the earliest to occur of (i) the date subscriptions for the Total Maximum Interests of such Series have been accepted by the Manager or (ii) a date determined by the Manager in its sole discretion, provided that subscriptions for the Total Minimum Interests of such Series have been accepted. If the Closing for a Series has not occurred, the applicable Offering shall be terminated upon (i) the date which is one year from the date this Offering Circular is qualified by the Commission, which period may be extended by an additional six months by the Manager in its sole discretion, or (ii) any date on which the Manager elects to terminate such Offering in its sole discretion. In the case, where the Company enters into a purchase options agreement, an Offering may never be launched, or a Closing may not occur, in the case the Company does not exercise the purchase option before the purchase option agreement’s expiration date, or the expiration date is not extended. |
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| Additional Investors: | The Asset Seller may purchase a portion of the Interests in each Series or may be offered Interests of such Series as a portion of the purchase price for such Underlying Asset. |
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| Table of Contents |
| Use of Proceeds: | The proceeds received by the Series from an Offering will be applied in the following order of priority of payment:
(i) Acquisition Cost of the Underlying Asset: Actual cost of the Underlying Asset paid to the Asset Seller (which may have occurred prior to the Closing).
The Company acquires Underlying Assets through the following methods:
1.Upfront purchase - the Company acquires an Underlying Asset from an Asset Seller prior to the launch of the offering related to the Series
2.Purchase agreement - the Company enters into an agreement with an Asset Seller to acquire an Underlying Asset, which acquisition may become effective prior to the closing of the offering for the related Series, in which case the Company is obligated to acquire the Underlying Asset prior to the closing
3.Purchase option agreement - the Company enters into a purchase option agreement with an Asset Seller, which gives the Company the right, but not the obligation, to acquire the Underlying Asset
The Company’s acquisition method for each Underlying Asset is noted in the Master Series Table.
(ii) Offering Expenses: In general these costs include actual legal, accounting, escrow, underwriting, filing and compliance costs incurred by the Company in connection with the offering of a Series of Interests (and exclude ongoing costs described in Operating Expenses), as applicable, paid to legal advisors, brokerage (if the Company enlists the services of a broker-dealer), escrow, underwriters, printing and accounting firms, as the case may be.
(iii) Acquisition Expenses: These include costs associated with the evaluation, investigation and acquisition of the Underlying Asset, plus any interest accrued on loans made to the Company by the Manager, a director, an officer or a third person for funds used to acquire the Underlying Asset or any options in respect of such purchase. Except as otherwise noted, any such loans to affiliates of the Company accrue interest at the Applicable Federal Rate (as defined in the Internal Revenue Code) and other loans and options accrue as described herein.
(iv) Sourcing Fee to the Manager: A fee paid to the Manager as compensation for identifying and managing the acquisition of the Underlying Asset, which fee is up to five percent (5%) of the purchase price of the applicable Underlying Asset, as detailed in Master Series Table for each Series.
The Manager pays the Offering Expenses and Acquisition Expenses on behalf of each Series and is reimbursed by the Series from the proceeds of a successful Offering. See “Use of Proceeds – All Series” and “Plan of Distribution and Subscription Procedure - Fees and Expenses” sections for further details. |
1 http://www.polygon.com/2019/3/5/18251623/magic-the-gathering-black-lotus-auction-price
2 http://icv2.com/articles/news/view/42632/rare-m-tg-alpha-black-lotus-nearly-doubles-price-last-ebay-auction
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| Table of Contents |
| Operating Expenses: | “Operating Expenses” are costs and expenses attributable to the activities of the Series (collectively, “Operating Expenses”) including: | |
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| · | costs incurred in managing the Underlying Asset, including, but not limited to storage, maintenance and transportation costs (other than transportation costs described in Acquisition Expenses); |
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| · | costs incurred in preparing any reports and accounts of the Series, including any tax filings and any annual audit of the accounts of the Series (if applicable) or costs payable to any third party registrar or transfer agent and any reports to be filed with the Commission including periodic reports on Forms 1-K, 1-SA and 1-U; |
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| · | any indemnification payments; and |
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| · | any and all insurance premiums or expenses in connection with the Underlying Asset, including insurance required for utilization at and transportation of the Underlying Asset to events under Fan Club Experiences (as described in “Description of the Business – Business of the Company”) (excluding any insurance taken out by a corporate sponsor or individual paying to showcase an asset at an event but including, if obtained, directors and officers insurance of the directors and officers of the Manager or the Series Manager). |
| · | The Manager has agreed to pay and not be reimbursed for Operating Expenses incurred prior to the Closing. Operating Expenses incurred post-Closing shall be the responsibility of the Series. However, if the Operating Expenses exceed the amount of revenues generated from the Underlying Asset, the Manager may (a) pay such Operating Expenses and not seek reimbursement, (b) loan the amount of the Operating Expenses to the Series, on which the Manager may impose a reasonable rate of interest, which shall not be lower than the Applicable Federal Rate (as defined in the Internal Revenue Code), and be entitled to reimbursement of such amount from future revenues generated by the Series (“Operating Expenses Reimbursement Obligation(s)”), and/or (c) cause additional Interests to be issued in order to cover such additional amounts. | |
| · | We do not anticipate that the Series will generate any revenues in 2019 and expect the Series to either incur Operating Expenses Reimbursement Obligations or that the Manager pays such Operating Expenses incurred and will not seek reimbursement. See discussion of “Description of the Business – Operating Expenses” for additional information. | |
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| Further Issuance of Interests: | A further issuance of Interests of the Series may be made in the event the Operating Expenses exceed the income generated from the Underlying Asset and any cash reserves and the Company does not take out sufficient amounts under the Operating Expenses Reimbursement Obligation to pay such excess Operating Expenses, nor does the Manager pay such amounts and does not seek reimbursement. | |
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| Series Manager: | Mythic Markets, Inc. will serve as the Series Manager responsible for managing each Series’ Underlying Asset (the “Series Manager”) as described in the Series Operating Agreement for each Series.
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| Platform: | Mythic Markets owns and operates a desktop and mobile web-based platform called Mythic Markets (the Mythic Markets platform and any successor platform used by the Company for the offer and sale of Interests (facilitated through the Broker), the “Mythic Markets Platform” or the “Platform”) through which the Interests are sold. | |
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| Free Cash Flow: | Free Cash Flow for a particular Series equals its net income (as determined under U.S. generally accepted accounting principles (“GAAP”)) plus any change in net working capital and depreciation and amortization (and any other non-cash Operating Expenses) and less any capital expenditures related to the Underlying Asset; provided that Free Cash Flow does not include proceeds from a sale of an Underlying Asset.
The Manager may maintain Free Cash Flow funds in separate deposit accounts or investment accounts for the benefit of each Series.
There is currently no public trading market for our Interests, and an active market may not develop or be sustained. If an active public trading market for our securities does not develop or is not sustained, it may be difficult or impossible for you to resell your Interests at any price. Even if a public market does develop, the market price could decline below the amount you paid for your Interests. Therefore, our only liquidity event, until such time, is the distribution of Free Cash Flow, once we commence generating revenues, if any. | |
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| Management Fee: | As compensation for the services provided by the Series Manager under the Series Agreement for each Series, the Series Manager will be paid a semi-annual fee equal to 50% of any Free Cash Flow generated by a particular Series. The Management Fee will only become due and payable if there is sufficient Free Cash Flow to distribute as described in Distribution Rights below. For tax and accounting purposes the Management Fee will be accounted for as an expense on the books of the Series. | |
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| Distribution Rights: | The Manager has sole discretion in determining what distributions of Free Cash Flow, if any, are made to Members of a Series of Interests. Any Free Cash Flow generated by a Series of Interests from the utilization of the Underlying Asset shall be applied by that Series of Interests in the following order of priority: | ||
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| · | repay any amounts outstanding under Operating Expenses Reimbursement Obligations for that Series, plus accrued interest; | |
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| · | thereafter to create such reserves for that Series as the Manager deems necessary, in its sole discretion, to meet future Operating Expenses of that Series; and; | |
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| · | thereafter, no less than 50% (net of corporate income taxes applicable to that Series of Interests) by way of distribution to the Interest Holders of that Series of Interests, which may include the Asset Sellers (as defined below) of its Underlying Asset or the Manager or any of its affiliates, and; | |
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| · | up to 50% to the Series Manager in payment of the Management Fee for that Series. | |
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| After tax proceeds from the sale of any underlying Asset shall be distributed: (i) first, to any third party creditors, (ii) second, to any creditors that are the Manager or its affiliates (e.g., payment of any outstanding Operating Expenses Reimbursement Obligation and accrued Management Fees), and thereafter, (iii) to the Interest Holders of the relevant Series of Interests, allocated pro rata based on the number of Interests held by each Interest Holder (which may include the Manager, any of its affiliates and the Asset Seller and which distribution within a Series will be made consistent with any preferences which exist within such Series). | ||
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| Liquidation Rights | As further described below, a Series shall remain in existence until the earlier of the following: (i) the dissolution of the Company, (ii) the election of the Manager to dissolve such series; (iii) the sale, exchange or other disposition of substantially all of the assets of the series; or (iv) at any time that the Series no longer has any members.
Upon the occurrence of any such event, the Manager (or a liquidator selected by the Manager) is charged with winding up the affairs of the Series of Interests or the Company as a whole, as applicable, and liquidating its assets, including any Underlying Assets. Upon the liquidation of a Series of Interests or the Company as a whole, as applicable, the Underlying Assets will be liquidated and any after-tax proceeds distributed: (i) first, to any third party creditors, (ii) second, to any creditors that are the Manager or its affiliates (e.g., payment of any outstanding Operating Expenses Reimbursement Obligation and accrued Management Fees), and thereafter, (iii) to the Interest Holders of the relevant Series of Interests, allocated pro rata based on the number of Interests held by each Interest Holder (which may include the Manager, any of its affiliates and the Asset Seller and which distribution within a Series will be made consistent with any preferences which exist within such Series). | ||
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| Timing of Distributions: | The Manager may make semi-annual distributions of Free Cash Flow remaining to Interest Holders of a Series, subject to the Manager’s right, in its sole discretion, to withhold distributions, including the Management Fee, to meet anticipated costs and liabilities of each Series. The Manager may change the timing of potential distributions to a Series in its sole discretion. It is expected that distributions will not happen until 2021 when the Company launches its Fan Club Experiences. | ||
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| Fiduciary Duties: | The Manager may not be liable to the Company, any series or the Investors for errors in judgment or other acts or omissions not amounting to willful misconduct or gross negligence, since provision has been made in the Operating Agreement for exculpation of the Manager. Therefore, Investors have a more limited right of action than they would have absent the limitation in the Operating Agreement. | ||
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| Indemnification: | None of the Indemnified Parties, Manager, or its affiliates, Mythic Markets, nor any current or former directors, officers, employees, partners, shareholders, members, controlling persons, agents or independent contractors of the Manager, members of the Advisory Board, nor persons acting at the request of the Company or any series in certain capacities with respect to other entities (collectively, the “Indemnified Parties”) will be liable to the Company, any Series, or any Members for any act or omission taken by the Indemnified Parties in connection with the business of the Company or a Series of Interests that has not been determined in a final, non- appealable decision of a court, arbitrator or other tribunal of competent jurisdiction to constitute fraud, willful misconduct or gross negligence.
The Company or, where relevant, each Series (whether offered hereunder or otherwise) will indemnify the Indemnified Parties out of its assets against all liabilities and losses (including amounts paid in respect of judgments, fines, penalties or settlement of litigation, including legal fees and expenses) to which they become subject by virtue of serving as Indemnified Parties with respect to any act or omission that has not been determined by a final, non-appealable decision of a court, arbitrator or other tribunal of competent jurisdiction to constitute fraud, willful misconduct or gross negligence. Unless attributable to a specific Series of Interests or a specific Underlying Asset, the costs of meeting any indemnification will be allocated pro rata across each of Series of Interests based on the value of each Underlying Asset. | ||
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| Transfers: | The Manager may refuse a transfer by an Interest Holder of its Interest(s) if such transfer would result in (a) there being more than 2,000 beneficial owners in the Series or more than 500 beneficial owners that are not “accredited investors”, (b) the assets of the Series being deemed “plan assets” for purposes of ERISA, (c) such Interest Holder holding in excess of 19.9% of the Series, (d) result in a change of U.S. federal income tax treatment of the Company and/or the Series, or (e) the Company, the Series of Interests or the Manager being subject to additional regulatory requirements. Furthermore, as the Interests are not registered under the Securities Act of 1933, as amended (the “Securities Act”), transfers of Interests may only be effected pursuant to exemptions under the Securities Act and permitted by applicable state securities laws. See “Description of Interests Offered – Transfer Restrictions” for more information. | ||
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| Governing Law: | To the fullest extent permitted by applicable law, the Company and the Operating Agreement will be governed by Delaware law and any dispute in relation to the Company and the Operating Agreement is subject to the exclusive jurisdiction of the Court of Chancery of the State of Delaware, except where Federal law requires that certain claims be brought in Federal courts, as in the case of claims brought under the Securities Exchange Act of 1934, as amended. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. Furthermore, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. If an Interest Holder were to bring a claim against the Company or the Manager pursuant to the Operating Agreement, it would be required to do so in the Delaware Court of Chancery to the extent the claim isn’t vested in the exclusive jurisdiction of a court or forum other than the Delaware Court of Chancery, or for which the Delaware Court of Chancery does not have subject matter jurisdiction, or where exclusive jurisdiction is not permitted under applicable law. | ||
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By purchasing Interests, Subscribers are bound by the dispute resolution provisions contained in our Operating Agreement which limits your ability to bring class action lawsuits or seek remedy on a class basis. The dispute resolution process provisions do not apply to claims under the federal securities laws. By agreeing to the dispute resolution process, including mandatory arbitration, investors will not be deemed to have waived the company’s compliance with the federal securities laws and the rules and regulations thereunder.
The Interests offered hereby are highly speculative in nature, involve a high degree of risk and should be purchased only by persons who can afford to lose their entire investment. There can be no assurance that the Company’s investment objectives will be achieved or that a secondary market would ever develop for the Interests, whether via the Mythic Markets Platform, via third party registered broker-dealers or otherwise. The risks set out below are not the only risks we face. Additional risks and uncertainties not presently known to us or not presently deemed material by us might also impair our operations and performance and/or the value of the Interests. If any of these risks actually occurs, the value of the Interests may be materially adversely affected. Prospective Investors should obtain their own legal and tax advice prior to making an investment in the Interests and should be aware that an investment in the Interests may be exposed to other risks of an exceptional nature from time to time. The following considerations are among those that should be carefully evaluated before making an investment in the Interests.
Risks relating to the structure, operation and performance of the Company
The COVID-19 outbreak may have a material adverse impact on our results of operations.
In December 2019, a novel strain of coronavirus, referred to as COVID-19, was reported in Wuhan, China. COVID-19 has since spread to other countries, including the United States, and was declared a pandemic by the World Health Organization. Efforts to contain the spread of COVID-19 have intensified, and the United States and countries in Europe and Asia have implemented severe travel and social restrictions, including social distancing and “shelter-in-place” orders. The impacts of the outbreak are unknown and rapidly evolving. The COVID-19 outbreak, or public perception of the outbreak, could adversely affect the value of the underlying assets and the financial condition of our investors or prospective investors, resulting in reduced demand for our offerings and alternative asset classes generally.
The continued spread of COVID-19 has also led to severe disruption and volatility in the global financial markets, which could increase our cost of capital and adversely affect our liquidity and ability to access capital markets in the future. The continued spread of COVID-19 has caused an economic slowdown and may cause a recession or other unpredictable events, each of which could adversely affect our business, results of operations or financial condition. The pandemic has had, and could have a significantly greater, material adverse effect on the United States economy as a whole and in our industry in particular.
If the spread of COVID-19 cannot be slowed and, ideally, contained, our business operations could be further delayed or interrupted. We expect that government and health authorities to announce new, or extend existing, restrictions, which could require us to make further adjustments to our operations in order to comply with any such restrictions. We may also experience limitations in employee resources. In addition, our operations could be disrupted if any employee of our manager is suspected of having the virus, which could require quarantine of any such employees. The duration of any business disruption cannot be reasonably estimated at this time but may materially affect our ability to operate our business and result in additional costs.
The extent to which COVID-19 may impact our results will depend on future developments, which are highly uncertain and cannot be predicted as of the date of this offering circular, including new information that may emerge concerning the severity of the pandemic and steps taken to contain the pandemic or treat its impact, among others. Nevertheless, the pandemic; the current financial, economic and capital markets environment; and future developments in the global supply chain and other areas present material uncertainty and risk with respect to our performance, financial condition, results of operations and cash flows.
An investment in an Offering constitutes only an investment in that Series and not in the Company or the Underlying Asset.
An Investor in an Offering will acquire an ownership interest in the Series of Interests related to that Offering and not, for the avoidance of doubt, in (i) the Company, (ii) any other Series of Interests, (iii) the Manager, (iv) the Series Manager, (v) the Platform or (vi) directly in the Underlying Asset associated with the Series or any Underlying Asset owned by any other Series of Interests. This results in limited voting rights of the Investor, which are solely related to a particular Series. Investors will have voting rights only with respect to certain matters, primarily relating to amendments to the Operating Agreement that would adversely change the rights of the Interest Holders and removal of the Manager for “cause”. The Manager and the Series Manager thus retain significant control over the management of the Company and the Underlying Assets. Furthermore, because the Interests in a Series do not constitute an investment in the Company as a whole, holders of the Interests in a Series are not expected to receive any economic benefit from, or be subject to the liabilities of, the assets of any other Series of Interest. In addition, the economic interest of a holder in a Series will not be identical to owning a direct undivided interest in an underlying Series Asset because, among other things, a Series will be required to pay corporate taxes before distributions are made to the holders, and the Series Manager will receive a fee in respect of its management of the Series Asset.
Our independent auditor’s report contains an emphasis-of-matter paragraph regarding substantial doubt about our ability to continue as a going concern.
The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they become due.
There is currently no public trading market for our securities.
There is currently no public trading market for any Interests, and an active market may not develop or be sustained. If an active public or private trading market for our securities does not develop or is not sustained, it may be difficult or impossible for you to resell your Interests at any price. Even if a public or private market does develop, the market price could decline below the amount you paid for your Interests.
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There may be state law restrictions on an Investor’s ability to sell the Interests.
Each state has its own securities laws, often called “Blue Sky” laws, which (1) limit sales of securities to a state’s residents unless the securities are registered in that state or qualify for an exemption from registration and (2) govern the reporting requirements for broker-dealers and stock brokers doing business directly or indirectly in the state. Before a security is sold in a state, there must be a registration in place to cover the transaction, or it must be exempt from registration. Also, the broker must be registered in that state. We do not know whether our securities will be registered, or exempt, under the laws of any states. A determination regarding registration will be made by the broker-dealers, if any, who agree to serve as the market-makers for our Interests. There may be significant state “Blue Sky” law restrictions on the ability of Investors to sell, and on purchasers to buy, our Interests. In addition, Tier 2 of Regulation A limits qualified resales of our Interests to 30% of the aggregate offering price of a particular offering. Investors should consider the resale market for our securities to be limited. Investors may be unable to resell their securities, or they may be unable to resell them without the significant expense of state registration or qualification, or opinions to our satisfaction that no such registration or qualification is required.
Lack of operating history.
The Company and each Series of Interests were recently formed and have not generated any revenues and have no operating history upon which prospective Investors may evaluate their performance. No guarantee can be given that the Company and any Series of Interests will achieve their investment objectives, the value of any Underlying Asset will increase or that any Underlying Asset will be successfully monetized.
There can be no guarantee that the Company will reach its funding target from potential investors with respect to any Series or future proposed Series of Interests.
Due to the start-up nature of the Company and the Manager, there can be no guarantee that the Company will reach its funding target from potential Investors with respect to any Series of Interests or future proposed Series of Interests. In the event the Company does not reach a funding target, it may not be able to achieve its investment objectives by acquiring additional Underlying Assets through the issuance of further Series of Interests and monetizing them to generate distributions for Investors. In addition, if the Company is unable to raise funding for additional Series of Interests, this may impact any Investors already holding interests as they will not see the benefits which arise from economies of scale following the acquisition by other Series of Interests of additional Underlying Assets and other monetization opportunities (e.g., hosting events with the collection of Underlying Assets).
There are few, if any, businesses that have pursued a strategy or investment objective similar to the Company’s.
We believe the number of other companies crowdfunding the Asset Class or proposing to run a platform for crowdfunding of Interests in the Asset Class is very limited to date. The Company and the Interests may not gain market acceptance from potential Investors, potential Asset Sellers or service providers within the Asset Class’ industry, including insurance companies, storage facilities or maintenance partners. This could result in an inability of the Manager to operate the Underlying Asset profitably. This could impact the issuance of further Series of Interests and additional Underlying Assets being acquired by the Company. This would further inhibit market acceptance of the Company and if the Company does not acquire any additional Underlying Assets, Investors would not receive any benefits which arise from economies of scale (such as reduction in storage costs as a large number of Underlying Assets are stored at the same facility, discounts on collectibles insurance and the ability to monetize Underlying Assets through collectible museums or other Fan Club Experiences, as described below, that would require the Company to own a substantial number of Underlying Assets).
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The Company does not expect to generate revenues or launch Fan Club Experiences until 2021.
Investors should be advised and aware that the Company does not expect to generate revenue until 2021 when it intends to launch its Fan Club Experiences. It is expected that the Fan Club Experiences will not happen until such time because it will be at that time that the Company will have enough Series with Underlying Assets in order to justify the launch of such experiences. The Company has not entered into any agreements to launch such events. To this end, investors should look to invest for the long term and for the time being, look to the increase in value of the Underlying Asset of their Series in order to realize any appreciation or increase in value in the value of the securities. However, for this reason, investors should look to the investment as highly speculative, risky and as a long-term investment.
Offering amount exceeds value of Underlying Asset.
The size of each Offering will exceed the purchase price of the related Underlying Asset as at the date of such Offering (as the proceeds of an Offering in excess of the purchase price of the Underlying Asset will be used to pay fees, costs and expenses incurred in making such Offering and acquiring the Underlying Asset). If an Underlying Asset had to be sold and there has not been substantial appreciation of the value of the Underlying Asset prior to such sale, there may not be sufficient proceeds from the sale of the Underlying Asset to repay Investors the amount of their initial investment (after first paying off any liabilities on the Underlying Asset at the time of the sale including but not limited to any outstanding Operating Expenses Reimbursement Obligation) or any additional profits in excess of this amount.
Excess Operating Expenses
Operating Expenses related to a particular Series incurred post-Closing shall be the responsibility of the Series. However, if the Operating Expenses of a particular Series exceed the amount of revenues generated from the Underlying Asset of such Series, the Manager may (a) pay such Operating Expenses and not seek reimbursement, (b) loan the amount of the Operating Expenses to the particular Series, on which the Manager may impose a reasonable rate of interest, and be entitled to reimbursement of such amount from future revenues generated by the applicable Underlying Asset (“Operating Expenses Reimbursement Obligation(s)”), or (c) cause additional Interests to be issued in such Series in order to cover such additional amounts.
If there is an Operating Expenses Reimbursement Obligation, this reimbursable amount between related parties would be repaid from the Free Cash Flow generated by the applicable Series and could reduce the amount of any future distributions payable to Investors in that Series. If additional Interests are issued in a particular Series, this would dilute the current value of the Interests of that Series held by existing Investors and the amount of any future distributions payable to such existing Investors. Further, any additional issuance of Interests of a Series could result in dilution of the holders of that Series.
The Company may not launch enough Series or have enough Underlying Assets to realize economies of scale.
It is the intention of the Company to launch approximately 10 to 15 additional offerings in the next twelve months. It is the hope that through the scale of offerings, the Company may reduce Operating Expenses for each Series through economies of scale. However, it is possible, and very likely, that the Company may not be able to launch as many offerings as it intends and thus, will not be able to realize reduced Operating Expenses per Series through economies of scale.
We are reliant on the Manager and its personnel. Our business and operations could be adversely affected if the Manager loses key personnel.
The successful operation of the Company (and therefore, the success of the Interests) is in part dependent on the ability of the Manager and the Series Manager to source, acquire and manage the Underlying Assets and for the Manager to maintain the Platform. As the Series Manager has only been in existence since July 2018 and is an early-stage startup company, it has no significant operating history within the vintage comic book, collectible card and fantasy art sector, which evidences its ability to source, acquire, manage and utilize the Underlying Assets.
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In addition, the success of the Company (and therefore, the Interests) will be highly dependent on the expertise and performance of the Manager and the Series Manager and their respective teams, the Manager’s expert network and other investment professionals (which may include third parties) to source, acquire and manage the Underlying Assets. There can be no assurance that these individuals will continue to be associated with the Manager or the Series Manager. The loss of the services of one or more of these individuals could have a material and adverse effect on the Underlying Assets and, in particular, their ongoing management and use to support the investment of the Interest Holders.
Furthermore, the success of the Company and the value of the Interests is dependent on there being critical mass from the market for the Interests and also that the Company is able to acquire a number of Underlying Assets in multiple Series of Interests so that the Investors can benefit from economies of scale which arise from holding more than one Underlying Asset (e.g., a reduction in transport costs if a large number of Underlying Assets are shipped at the same time). In the event that the Company is unable to source additional Underlying Assets due to, for example, competition for such Underlying Assets or lack of Underlying Assets available in the marketplace, then this could materially impact the success of the Company and each Series by hindering its ability to acquire additional Underlying Assets through the issuance of further Series of Interests and monetizing them together with the Underlying Assets at the Fan Club Experiences to generate distributions for Investors. It is not expected to launch Fan Club Experiences until 2021.
If the Company’s series limited liability company structure is not respected, then Investors may have to share any liabilities of the Company with all Investors and not just those who hold the same Series of Interests as them.
The Company is structured as a Delaware series limited liability company that issues different Series of Interests for each Underlying Asset. Each Series of Interests will merely be a separate series and not a separate legal entity. Under the Delaware Limited Liability Company Act (the “LLC Act”), if certain conditions (as set forth in Section 18- 215(b) of the LLC Act) are met, the liability of Investors holding one Series of Interests is segregated from the liability of Investors holding another Series of Interests and the assets of one Series of Interests are not available to satisfy the liabilities of other Series of Interests. Although this limitation of liability is recognized by the courts of Delaware, there is no guarantee that if challenged in the courts of another U.S. State or a foreign jurisdiction, such courts will uphold a similar interpretation of Delaware corporation law, and in the past certain jurisdictions have not honored such interpretation. If the Company’s series limited liability company structure is not respected, then Investors may have to share any liabilities of the Company with all Investors and not just those who hold the same Series of Interests as them. Furthermore, while we intend to maintain separate and distinct records for each Series of Interests and account for them separately and otherwise meet the requirements of the LLC Act, it is possible a court could conclude that the methods used did not satisfy Section 18-215(b) of the LLC Act and thus potentially expose the assets of a Series to the liabilities of another Series of Interests. The consequence of this is that Investors may have to bear higher than anticipated expenses which would adversely affect the value of their Interests or the likelihood of any distributions being made by the Series to the Investors. In addition, we are not aware of any court case that has tested the limitations on inter-series liability provided by Section 18-215(b) in federal bankruptcy courts and it is possible that a bankruptcy court could determine that the assets of one Series of Interests should be applied to meet the liabilities of the other Series of Interests or the liabilities of the Company generally where the assets of such other Series of Interests or of the Company generally are insufficient to meet our liabilities.
If any fees, costs and expenses of the Company are not allocable to a specific Series of Interests, they will be borne proportionately across all of the Series of Interests (which may include future Series of Interests to be issued). Although the Manager will allocate fees, costs and expenses acting reasonably and in accordance with its allocation policy (see “Description of the Business – Allocations of Expenses” section), there may be situations where it is difficult to allocate fees, costs and expenses to a specific Series of Interests and therefore, there is a risk that a Series of Interests may bear a proportion of the fees, costs and expenses for a service or product for which another Series of Interests received a disproportionately high benefit.
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We are currently expanding and improving our information technology systems and use security measures designed to protect our systems against breaches and cyber-attacks. If these efforts are not successful, our business and operations could be disrupted, our operating results and reputation could be harmed, and the value of the Interests could be materially and adversely affected.
The highly automated nature of the Mythic Markets Platform through which potential Investors acquire or transfer interests may make it an attractive target and potentially vulnerable to cyber-attacks, computer viruses, physical or electronic break-ins or similar disruptions. The Mythic Markets Platform processes certain confidential information about Investors, the Asset Sellers and the Underlying Assets. While we intend to take commercially reasonable measures to protect our confidential information and maintain appropriate cybersecurity, the security measures of the Mythic Markets Platform, the Company, the Manager or the Company’s service providers could be breached. Any accidental or willful security breaches or other unauthorized access to the Mythic Markets Platform could cause confidential information to be stolen and used for criminal purposes or have other harmful effects. Security breaches or unauthorized access to confidential information could also expose the Company to liability related to the loss of the information, time-consuming and expensive litigation and negative publicity, or loss of the proprietary nature of the Manager’s and the Company’s trade secrets. If security measures are breached because of third-party action, employee error, malfeasance or otherwise, or if design flaws in the Mythic Markets Platform software are exposed and exploited, the relationships between the Company, Investors, users and the Asset Sellers could be severely damaged, and the Company or the Manager could incur significant liability or have their attention significantly diverted from utilization of the Underlying Assets, which could have a material negative impact on the value of interests or the potential for distributions to be made on the Interests.
Because techniques used to sabotage or obtain unauthorized access to systems change frequently and generally are not recognized until they are launched against a target, the Company, the third-party hosting used by the Mythic Markets Platform and other third-party service providers may be unable to anticipate these techniques or to implement adequate preventative measures. In addition, federal regulators and many federal and state laws and regulations require companies to notify individuals of data security breaches involving their personal data. These mandatory disclosures regarding a security breach are costly to implement and often lead to widespread negative publicity, which may cause Investors, the Asset Sellers or service providers within the industry, including insurance companies, to lose confidence in the effectiveness of the secure nature of the Mythic Markets Platform. Any security breach, whether actual or perceived, would harm the reputation of the Company and the Mythic Markets Platform and the Company could lose Investors and the Asset Sellers. This would impair the ability of the Company to achieve its objectives of acquiring additional Underlying Assets through the issuance of further Series of Interests and monetizing them at the Fan Club Experiences.
System limitations or failures could harm our business and may cause the Manager to intervene into activity on our Platform.
Our business depends in large part on the integrity and performance of the technology, computer and communications systems supporting them. If new systems fail to operate as intended or our existing systems cannot expand to cope with increased demand or otherwise fail to perform, we could experience unanticipated disruptions in service, slower response times and delays in the introduction of new products and services. These consequences could result in service outages, adverse effects on primary issuance or trading periods, through the Platform, resulting in decreased customer satisfaction and regulatory sanctions.
Our Platform has experienced systems failures and delays in the past and could experience future systems failures and delays. In such cases the Manager has and may in future take corrective actions as it reasonably believes are in the best interests of Investors or potential Investors.
If subscription or trading volumes in future increase unexpectedly or other unanticipated events occur, we may need to expand and upgrade our technology, transaction processing systems and network infrastructure. We do not know whether we will be able to accurately project the rate, timing or cost of any volume increases, or expand and upgrade our systems and infrastructure to accommodate any increases in a timely manner.
While we have programs in place to identify and minimize our exposure to vulnerabilities and to share corrective measures with our business partners, we cannot guarantee that such events will not occur in the future. Any system issue that causes an interruption in services, including the Platform, decreases the responsiveness of our services or otherwise affects our services could impair our reputation, damage our brand name and negatively impact our business, financial condition and operating results.
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Our Platform is highly technical and may be at a risk to malfunction.
Our Platform is a complex system composed of many interoperating components and incorporates software that is highly complex. Our business is dependent upon our ability to prevent system interruption on our Platform. Our software, including open source software that is incorporated into our code, may now or in the future contain undetected errors, bugs, or vulnerabilities. Some errors in our software code may only be discovered after the code has been released. Bugs in our software, third-party software including open source software that is incorporated into our code, misconfigurations of our systems, and unintended interactions between systems could cause downtime that would impact the availability of our service to Platform users. We have from time to time found defects or errors in our system and may discover additional defects in the future that could result in Platform unavailability or system disruption. In addition, we have experienced outages on our Platform due to circumstances within our control, such as outages due to software limitations. We rely on Amazon Web Services, Inc. (“AWS”) data centers for the operation of our Platform. If the AWS data centers fail, our Platform users may experience down time. If sustained or repeated, any of these outages could reduce the attractiveness of our Platform to Platform users. In addition, our release of new software in the past has inadvertently caused, and may in the future cause, interruptions in the availability or functionality of our Platform. Any errors, bugs, or vulnerabilities discovered in our code or systems after release could result in an interruption in the availability of our Platform or a negative experience for users and Investors and could also result in negative publicity and unfavorable media coverage, damage to our reputation, loss of Platform users, loss of revenue or liability for damages, regulatory inquiries, or other proceedings, any of which could adversely affect our business and financial results.
We do not anticipate the use of Manager-owned Interests for liquidity or to facilitate the resale of Interests held by Investors.
Currently, the Manager does not intend to sell any Interests which it holds or may hold prior to the liquidation of an Underlying Asset. Thus, the Manager does not currently intend to take any action which might provide liquidity or facilitate the resale of Interests held by Investors by selling its own Interests. However, the Manager may from time to time transfer a small number of Interests to unrelated third parties for promotional purposes.
Abuse of our advertising or social platforms may harm our reputation or user engagement.
Mythic Markets provides content or posts ads about the Company and Series through various social media platforms that may be influenced by third parties. Our reputation or user engagement may be negatively affected by activity that is hostile or inappropriate to other people, by users impersonating other people or organizations, by disseminating information about us or to us that may be viewed as misleading or intended to manipulate the opinions of our users, or by the use of Mythic Markets’ products or services, including the Platform, that violates our terms of service or otherwise for objectionable or illegal ends. Preventing these actions may require us to make substantial investments in people and technology and these investments may not be successful, adversely affecting our business.
If we are unable to protect our intellectual property rights, our competitive position could be harmed, or we could be required to incur significant expenses to enforce our rights.
Our ability to compete effectively is dependent in part upon our ability to protect our proprietary technology. We rely on trademarks, trade secret laws, and confidentiality procedures to protect our intellectual property rights. There can be no assurance these protections will be available in all cases or will be adequate to prevent our competitors from copying, reverse engineering or otherwise obtaining and using our technology, proprietary rights or products. To prevent substantial unauthorized use of our intellectual property rights, it may be necessary to prosecute actions for infringement and/or misappropriation of our proprietary rights against third parties. Any such action could result in significant costs and diversion of our resources and management’s attention, and there can be no assurance we will be successful in such action. If we are unable to protect our intellectual property, it could have a material adverse effect on our business and on the value of the Interests.
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Use of broker to facilitate liquidity
The Manager may arrange for some of the Interests it holds in a specific Series of Interests to be sold by a broker pursuant to a “10b5-1 trading plan”. There is a risk that this may result in too many interests being available for resale and the price of the relevant Series of Interests decreasing as supply outweighs demand.
Unpredictable and/or uncontrollable events, such as the COVID-19 outbreak, could adversely affect our business.
Our business could be subject to unpredictable and uncontrollable events, such as earthquakes, power shortages, telecommunications failures, water shortages, floods, hurricanes, typhoons, fires, extreme weather conditions, medical epidemics or pandemics, such as the COVID-19 outbreak, and other natural or manmade disasters or business interruptions. The occurrence of any of these business disruptions could seriously harm our operations and financial condition and increase our costs and expenses. The risk, or public perception of the risk, of a pandemic, or media coverage of infectious diseases, could adversely affect the value of the underlying assets and the financial condition of our investors or prospective investors, resulting in reduced demand for our offerings and alternative asset classes generally. Moreover, an epidemic, pandemic, outbreak or other public health crisis, such as COVID-19, could adversely affect employees of our manager, which serves as the asset manager and in which we rely to manage the logistics of our business. “Shelter-in-place” or other such orders by governmental entities could also disrupt our operations if employees of our manager who cannot perform their responsibilities from home are not able to report to work or carry out necessary actions related to the logistics of our business. Risks related to an epidemic, pandemic or other health crisis, such as COVID-19, could also lead to the complete or partial closure of one or more of our facilities or the storage facility in which we lease space, which could prevent us from accessing the underlaying assets. Further, risks related to an epidemic, pandemic or other health crisis, such as COVID-19, could lead to complete or partial cessation of operations of our sourcing partners for the underlying assets.
Risks relating to each Offering
We are offering our Interests pursuant to Tier 2 of Regulation A and we cannot be certain if the reduced disclosure requirements applicable to Tier 2 issuers will make our Interests less attractive to Investors as compared to a traditional initial public offering.
As a Tier 2 issuer, we are subject to scaled disclosure and reporting requirements which may make an investment in our Interests less attractive to Investors who are accustomed to enhanced disclosure and more frequent financial reporting. In addition, given the relative lack of regulatory precedent regarding the recent amendments to Regulation A, there is some regulatory uncertainty in regard to how the Commission or the individual state securities regulators will regulate both the offer and sale of our securities, as well as any ongoing compliance that we may be subject to. For example, a number of states have yet to determine the types of filings and amount of fees that are required for such an offering. If our scaled disclosure and reporting requirements, or regulatory uncertainty regarding Regulation A, reduces the attractiveness of the Interests, we may be unable to raise the funds necessary to fund future offerings, which could impair our ability to develop a diversified portfolio of Underlying Assets and create economies of scale, which may adversely affect the value of the Interests or the ability to make distributions to Investors.
There may be deficiencies with our internal controls that require improvements, and if we are unable to adequately evaluate internal controls, we may be subject to sanctions.
As a Tier 2 issuer, we will not need to provide a report on the effectiveness of our internal controls over financial reporting, and we will be exempt from the auditor attestation requirements concerning any such report so long as we are a Tier 2 issuer. We are in the process of evaluating whether our internal control procedures are effective and therefore there is a greater likelihood of undiscovered errors in our internal controls or reported financial statements as compared to issuers that have conducted such evaluations.
Furthermore, the Company is not registered and will not be registered as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”), and the Manager is not registered and will not be registered as an investment adviser under the Investment Advisers Act of 1940, as amended (the “Investment Advisers Act”) and the Interests do not have the benefit of the protections of the Investment Company Act or the Investment Advisers Act. The Company, the Manager and the Series Manager have taken the position that the Underlying Assets are not “securities” within the meaning of the Investment Company Act or the Investment Advisers Act, and thus the Company’s assets will consist of less than 40% investment securities under the Investment Company Act and the Manager and the Series Manager are not and will not be advising with respect to securities under the Investment Advisers Act. This position, however, is based upon applicable case law that is inherently subject to judgments and interpretation. If the Company were to be required to register under the Investment Company Act or the Manager or the Series Manager were to be required to register under the Investment Advisers Act, it could have a material and adverse impact on the results of operations and expenses of each Series and the Manager and the Series Manager may be forced to liquidate and wind up each Series of Interests or rescind an Offering for any Series or an offering for any other Series of Interests.
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Possible Changes in Federal Tax Laws.
The Code is subject to change by Congress, and interpretations of the Code may be modified or affected by judicial decisions, by the Treasury Department through changes in regulations and by the Internal Revenue Service through its audit policy, announcements, and published and private rulings. Although significant changes to the tax laws historically have been given prospective application, no assurance can be given that any changes made in the tax law affecting an investment in any Series of Interests of the Company would be limited to prospective effect. For instance, prior to effectiveness of the Tax Cuts and Jobs Act of 2017, an exchange of the Interests of one Series for another might have been a non-taxable ‘like-kind exchange’ transaction, while transactions now only qualify for that treatment with respect to real property. Accordingly, the ultimate effect on an Investor’s tax situation may be governed by laws, regulations or interpretations of laws or regulations which have not yet been proposed, passed or made, as the case may be.
Risks specific to the Industry and the Asset Class
The global economy and financial markets and political conditions of various countries can adversely affect the supply of and demand for art and collectibles, and unpredictable and/or uncontrollable events, such as the COVID-19 outbreak, may cause a disruption in the art and collectibles industry.
The art and collectibles industry may be influenced by the overall strength and stability of the global economy and financial markets of various countries, although any correlation may not be immediately evident. In addition, global political conditions and world events may affect our business through their effect on the economies of various countries, as well as on the willingness of potential buyers to purchase art and collectibles in the wake of economic uncertainty. Accordingly, weakness in the global economy and financial markets of various countries may cause a downturn in the art and collectibles industry, which is likely to impact the value of the underlying assets, and consequently the value of the interests.
The COVID-19 outbreak has caused unprecedented levels of global uncertainty and may impact the value of art and other collectables. We expect the COVID-19 outbreak will result in low transaction volume until confidence in the global economy is restored. The extent and duration of this disruption cannot be accurately estimated, and the art and collectibles industry may a significant amount of time to recover. Although we intend to hold and manage all of the assets marketed on our Platform for an average of five to ten years, the COVID-19 outbreak and resulting economic uncertainty may impact the value of the underlying assets, and consequently the value of the interests.
Potential negative changes within the Asset Class.
The Asset Class is subject to various risks, including, but not limited to, currency fluctuations, changes in tax rates, consumer confidence and brand exposure, as well as risks associated with the Asset Class in general, including, but not limited to, economic downturns and the availability of desirable Underlying Assets. Changes in the Asset Class could have a material and adverse effect upon the Company’s ability to achieve its investment objectives by acquiring additional Underlying Assets through the issuance of further Series of Interests and monetizing them at the Fan Club Experiences to generate distributions for Investors. Further, Fan Club Experiences are not expected to launch until 2021.
Lack of Diversification.
It is not anticipated that any Series would own any assets other than its respective Underlying Asset, plus potential cash reserves for storage, insurance and other expenses pertaining to the Underlying Asset and amounts earned by such Series from the monetization of the Underlying Asset. Investors looking for diversification will have to create their own diversified portfolio by investing in other opportunities in addition to any one Series.
Industry concentration and general downturn in industry.
Given the concentrated nature of the Underlying Assets (i.e., only vintage comic books, collectible cards and fantasy art pieces) any downturn in the Asset Class is likely to impact the value of the Underlying Assets, and consequently the value of the Interests. Furthermore, as vintage comic books, collectible cards and fantasy art are a collectible item, the value of such collectible assets may be impacted if an economic downturn occurs and there is less disposable income for individuals to invest in the Asset Class. In the event of a downturn in the industry, the value of the Underlying Assets is likely to decrease.
Volatile demand for the assets in the Asset Class.
The vintage comic book, collectible card and fantasy art market has been subject to volatility in demand in recent periods, particularly around certain categories of assets and Investor tastes (ex. Marvel Cinematic Universe characters). Demand for high value vintage comic books, collectible cards and fantasy art pieces depends to a large extent on general, economic, political and social conditions in a given market as well as the tastes of the vintage comic book, collectible card and fantasy art enthusiast community resulting in changes of which vintage comic book, collectible card and fantasy art brands and genres are most sought after. Demand for vintage comic books, collectible cards and fantasy art may also be affected by factors directly impacting vintage comic book, collectible card and fantasy art prices or the cost of purchasing and operating these assets, such as the availability and cost of financing, insurance, storage, transport, and other taxes, including taxes on collectible goods, resulting in limitations to the use of vintage comic books, collectible cards and fantasy art, or collectible goods more generally.
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Volatility in demand may lead to volatility in the value of the Underlying Assets, which may result in further downward price pressure and adversely affect the Company’s ability to achieve its objective of acquiring additional Underlying Assets through the issuance of further Series of Interests and monetizing them at the Fan Club Experiences to generate distributions for Investors which is not expected until at least 2021. In addition, the lack of demand may reduce any further issuance of Series of Interests and acquisition of more Underlying Assets, thus limiting the benefits the Investors already holding Series of Interests could receive from there being economies of scale (e.g., cheaper insurance due to a number of Underlying Assets requiring insurance) and other monetization opportunities (e.g., hosting museum and trade show exhibits with the collection of Underlying Assets). These effects may have a more pronounced impact given the limited number of Underlying Assets held by the Company in the short-term.
rely on data from past auction sales data, among other sources, in determining the value of the Underlying Assets, and have not independently verified the accuracy or completeness of this information. As such, valuations of the Underlying Assets may be subject to a high degree of uncertainty and risk.
As explained in the “Description of the Business” section, the Asset Class is difficult to value and it is hoped the Mythic Markets Platform will help create a market by which the Interests (and, indirectly, the Underlying Assets) may be more accurately valued due to the creation of a larger market for the Asset Class than exists from current means. Until the Mythic Markets Platform has created such a market, valuations of the Underlying Assets will be based upon the subjective approach taken by the members of the Manager’s expert network and members of the Advisory Board, valuation experts appointed by the Asset Seller or other data provided by third parties (e.g., auction results and previous sales history). Due to the lack of third-party valuation reports and potential for one-of-a-kind assets, the value of the Underlying Assets may be more difficult for potential investors to compare against a market benchmark. Furthermore, if similar assets to the Underlying Assets are created or discovered it could in turn negatively impact the value of the Underlying Assets. The Manager sources data from reputable valuation providers in the industry, including but not limited to the Overstreet Comic Book Price Guide, Heritage Auctions, Beckett Grading Services, Certified Guaranty Company, and others; however, it may rely on the accuracy of the underlying data without any means of detailed verification. Consequently, valuations may be uncertain.
Risks relating to the Underlying Asset
The value of the Underlying Assets and, consequently, the value of an Investor’s Interests can go down as well as up.
Valuations are not guarantees of realizable price, do not necessarily represent the price at which the Interests may be sold on the Mythic Markets Platform and the value of the Underlying Assets may be materially affected by a number of factors outside the control of the Company, including any volatility in the economic markets, the condition of the Underlying Assets and physical matters arising from the state of their condition.
An Underlying Asset may be lost or damaged by causes beyond the Company’s control while being transported or when in storage or on display. There can be no guarantee that insurance proceeds will be sufficient to pay the full market value of an Underlying Asset which has been damaged or lost which will result in a material and adverse effect in the value of the related Interests.
Any Underlying Asset may be lost or damaged by causes beyond the Company’s reasonable control when in storage or on display. There is also a possibility that the Underlying Asset could be lost or damaged at Fan Club Experiences. Any damage to an Underlying Asset or other liability incurred as a result of participation in these programs could adversely impact the value of the Underlying Asset or adversely increase the liabilities or Operating Expenses of its related Series of Interests. Further, when the Underlying Asset has been purchased, it will be necessary to transport it to the Manager’s preferred storage location or as required to participate in Fan Club Experiences. An Underlying Asset may be lost or damaged in transit, and transportation, insurance or other expenses may be higher than anticipated due to the locations of particular events.
Although we intend for the Underlying Assets to be insured at replacement cost (subject to policy terms and conditions), in the event of any claims against such insurance policies, there can be no guarantee that any losses or costs will be reimbursed, that the Underlying Asset can be replaced on a like-for-like basis or that any insurance proceeds would be sufficient to pay the full market value (after paying for any outstanding liabilities including, but not limited to any outstanding balances under Operating Expenses Reimbursement Obligations), if any, of the Interests. In the event that damage is caused to an Underlying Asset, this will impact the value of the Underlying Asset, and consequently, the Interests related to the Underlying Asset, as well as the likelihood of any distributions being made by the applicable Series to its Investors.
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In addition, at a future date, the Manager may decide to expand the Fan Club Experiences to include items where individual Investors or independent third parties may be able to become the caretaker of Underlying Assets, for a certain period of time for an appropriate fee, assuming that the Manager believes that such models are expected to result in higher overall financial returns for all Investors in any Underlying Assets used in such models. The feasibility from an insurance, safety, technological and financial perspective of such models has not yet been analyzed but may significantly increase the risk profile and the chance for loss of or damage to any Underlying Asset if utilized in such models.
Competition in the vintage comic book, collectible card and fantasy art industry from other business models.
There is potentially significant competition for the Underlying Assets from many different market participants. While the majority of transactions continue to be peer-to-peer with very limited public information, other market players such as vintage comic book, collectible card and fantasy art dealers and auction houses continue to play an increasing role. In addition, the underlying market is being driven by the increasing number of widely popular vintage comic book, collectible card and fantasy art-focused TV and online shows, including Comic Book Men, Geek & Sundry, OpenBoosters and ChannelFireball.
This competition may impact the liquidity of the Interests, as it is dependent on the Company acquiring attractive and desirable Underlying Assets to ensure that there is an appetite of potential Investors for the Interests. In addition, there are companies that are developing crowd funding models for other alternative asset classes such as art and collectible cars, who may decide to enter the vintage comic book, collectible card and fantasy art market as well.
Potentially high storage, maintenance and insurance costs for the Underlying Assets.
In order to protect and care for the Underlying Assets, the Manager must ensure adequate storage facilities and insurance coverage. The cost of care may vary from year to year depending on changes in the insurance rates for covering the Underlying Assets and changes in the cost of storage for the Underlying Assets. It is anticipated that as the Company acquires more Underlying Assets, the Manager may be able to negotiate a discount on the costs of storage, maintenance and insurance due to economies of scale. These reductions are dependent on the Company acquiring a number of Underlying Assets and service providers being willing to negotiate volume discounts and, therefore, are not guaranteed.
If costs turn out to be higher than expected, this would impact the value of the Interests related to the Underlying Asset, the amount of distributions made to Investors holding the Interests, on potential proceeds from a sale of the Underlying Asset (if ever), and any capital proceeds returned to Investors after paying for any outstanding liabilities, including but not limited to any outstanding balances under Operating Expenses Reimbursement Obligation. See “Lack of distributions and return of capital” section for further details of the impact of these costs on returns to Investors.
Insurance may not cover all losses.
Insurance of the Underlying Asset may not cover all losses. There are certain types of losses, generally of a catastrophic nature, such as earthquakes, floods, hurricanes, terrorism or acts of war that may be uninsurable or not economically insurable. Inflation, environmental considerations and other factors, including terrorism or acts of war, also might make insurance proceeds insufficient to replace an asset if it is damaged or destroyed. Under such circumstances, the insurance proceeds received might not be adequate to restore the Company’s economic position with respect to any affected Underlying Assets. Furthermore, the Series of Interests related to such affected Underlying Assets would bear the expense of the payment of any deductible. Any uninsured loss could result in both loss of cash flow from and the value of the affected Underlying Assets and, consequently, the Series of Interests that relate to such Underlying Assets.
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Third party liability.
Each Series will assume all of the ownership risks attached to its Underlying Asset, including third party liability risks. Therefore, a Series may be liable to a third party for any loss or damages incurred by such third party in connection with the Underlying Asset. This would be a loss to the Series and, in turn, adversely affect the value of the Series and would negatively impact the ability to make distributions.
Dependence on the brand of the publisher of Underlying Assets.
The Underlying Assets will comprise vintage comic books, collectible cards and fantasy art from a very wide variety of publishers, many of which are still in operation today. The demand for the Underlying Assets, and therefore, each Series of Interests, may be influenced by the general perception of the Underlying Assets that publishers are producing today. In addition, the publishers’ business practices may result in the image and value of the Underlying Assets produced by certain publishers being damaged. This in turn may have a negative impact on the Underlying Assets made by such publishers and in particular, the value of the Underlying Assets and consequently, the value of the Series of Interests that relate to such Underlying Assets.
Dependence of an Underlying Asset on prior user or association.
The value of an Underlying Asset may be connected with its prior use by, or association with, a certain person or group or in connection with certain pop culture events or films (prior to or following the acquisition of the Underlying Asset by the Company). In the event that such person or group loses public affection, then this may adversely impact the value of the Underlying Asset and therefore, the Series of Interests that relate to such Underlying Asset.
Title, authenticity, or infringement claims on an Underlying Asset.
There is no guarantee that an Underlying Asset will be free of any claims regarding title and authenticity (e.g., counterfeit or previously stolen vintage comic books, collectible cards and fantasy art), or that such claims may arise after acquisition of an Underlying Asset by a Series of Interests. The Company may not have complete ownership history for an Underlying Asset. In the event of an authenticity claim against the Company, the Company may not have recourse against the Asset Seller or the benefit of insurance and the value of the Underlying Asset and the Series of Interests that relate to the Underlying Asset may be diminished.
Forced sale of the Underlying Asset.
The Company may be forced to cause its various Series to sell one or more of the Underlying Assets (e.g., upon the bankruptcy of the Manager) and such a sale may occur at an inopportune time or at a lower value than when the Underlying Asset was first acquired or at a lower price than the aggregate of costs, fees and expenses used to purchase the Underlying Asset. In addition there may be liabilities related to the Underlying Assets, including, but not limited to Operating Expenses Reimbursement Obligations on the balance sheet of any Series at the time of a forced sale, which would be paid off prior to Investors receiving any distributions from a sale. In such circumstances, the capital proceeds from any Underlying Asset, and therefore, the return available to Investors of the applicable Series of Interests which relate to the Underlying Asset, may be lower than could have been obtained if the Series held the Underlying Asset and sold at a later date.
Lack of distributions and return of capital.
The revenue of each Series is expected to be primarily derived from the use of its Underlying Asset in Fan Club Experiences including “museum” style locations to visit assets and trade show exhibits. Fan Club Experiences have not been proven with respect to the Company, and there can be no assurance that Fan Club Experiences will generate sufficient proceeds to cover fees, costs and expenses with respect to any Series of Interests. In the event that the revenue generated in any given year does not cover the Operating Expenses of the applicable Series, the Manager may (a) pay such Operating Expenses and not seek reimbursement, (b) provide a loan to the Company in the form of an Operating Expenses Reimbursement Obligation, on which the Manager may impose a reasonable rate of interest, and/or (c) cause additional Interests to be issued in the applicable Series in order to cover such additional amounts.
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Any amount paid to the Manager in satisfaction of an Operating Expenses Reimbursement Obligation would not be available to Investors as a distribution. In the event additional Interests in a Series are issued, Investors in such Series of Interests would be diluted or would receive a smaller portion of distributions from future Free Cash Flows, if any. Furthermore, if a Series of Interests or the Company is dissolved, there is no guarantee that the proceeds from liquidation will be sufficient to repay the Investors their initial investment or the market value, if any, of the interests at the time of liquidation. See “Potentially high storage, maintenance and insurance costs for the Underlying Assets” for further details on the risks of escalating costs and expenses of the Underlying Assets. Further, Fan Club Experiences are not expected to launch until at least 2021.
Assets may not be held long term
The Company intends to hold the series for an extended period but may receive unsolicited offers to purchase the series’ Underlying Asset in its entirety. If the Manager deems the sale to be generally beneficial to the majority of shareholders, the Underlying Asset would be sold, exited from the Platform with proceeds of the sale distributed to its series’ interest holders. Even though the Manager deems the sale to be generally beneficial to the majority of shareholders, there might be unique circumstances where not all shareholders align with the Manager’s decision.
Risks Related to Ownership of our Interests
Lack of voting rights.
The Manager has a unilateral ability to amend the Operating Agreement and the allocation policy in certain circumstances without the consent of the Investors. The Investors only have limited voting rights in respect of the Series of Interests. Investors will therefore be subject to any amendments the Manager makes (if any) to the Operating Agreement and allocation policy and also any decision it takes in respect of the Company and the applicable Series of Interests, which the Investors do not get a right to vote upon. Investors may not necessarily agree with such amendments or decisions, and such amendments or decisions may not be in the best interests of all of the Investors as a whole but only a limited number.
Furthermore, the Manager can only be removed as manager of the Company and each Series of Interests in very limited circumstances, following a non-appealable judgment of a court of competent jurisdiction to have committed fraud in connection with the Company or a Series of Interests. Investors would therefore not be able to remove the Manager merely because they did not agree, for example, with how the Manager was operating an Underlying Asset.
The offering price for the Interests determined by us may not necessarily bear any relationship to established valuation criteria such as earnings, book value or assets that may be agreed to between purchasers and sellers in private transactions or that may prevail in the market if and when our Interests can be traded publicly.
The price of the Interests was derived as a result of our negotiations with Asset Sellers based upon various factors including prevailing market conditions, our future prospects and our capital structure, as well as certain expenses incurred in connection with each Offering and the acquisition of the Underlying Asset. These prices do not necessarily accurately reflect the actual value of the Interests or the price that may be realized upon disposition of the Interests.
If a market ever develops for the Interests, the market price and trading volume of our Interests may be volatile.
If a market develops for the Interests, the market price of the Interests could fluctuate significantly for many reasons, including reasons, including reasons unrelated to our performance, any Underlying Asset or any Series of Interests, such as reports by industry analysts, Investor perceptions, or announcements by our competitors regarding their own performance, as well as general economic and industry conditions. For example, to the extent that other companies, whether large or small, within our industry experience declines in their share price, the value of Interests may decline as well.
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In addition, fluctuations in operating results of a particular Series of Interests or the failure of operating results to meet the expectations of Investors may negatively impact the price of our securities. Operating results may fluctuate in the future due to a variety of factors that could negatively affect revenues or expenses in any particular reporting period, including vulnerability of our business to a general economic downturn; changes in the laws that affect our operations; competition; compensation related expenses; application of accounting standards; seasonality; and our ability to obtain and maintain all necessary government certifications or licenses to conduct our business.
Funds from purchasers accompanying subscriptions for the Interests will not accrue interest while in escrow.
The funds paid by a subscriber for Interests will be held in a non-interest bearing escrow account until the admission of the subscriber as an Investor in the applicable Series of Interests, if such subscription is accepted. Purchasers will not have the use of such funds or receive interest thereon pending the completion of each Offering. No subscriptions will be accepted, and no Interests will be sold unless valid subscriptions for such Offering are received and accepted prior to the termination of the applicable Offering Period. If we terminate an Offering prior to accepting a subscriber’s subscription, escrowed funds will be returned promptly, without interest or deduction, to the proposed Investor.
POTENTIAL CONFLICTS OF INTEREST
We have identified the following conflicts of interest that may arise in connection with the Interests, in particular, in relation to the Company, the Manager and the Underlying Assets. The conflicts of interest described in this section should not be considered as an exhaustive list of the conflicts of interest that prospective Investors should consider before investing in the Interests.
Our Operating Agreement contains provisions that reduce or eliminate duties (including fiduciary duties) of the Manager.
Our Operating Agreement provides that the Manager, in exercising its rights in its capacity as the Manager, will be entitled to consider only such interests and factors as it desires, including its own interests, and will have no duty or obligation (fiduciary or otherwise) to give any consideration to any interest of or factors affecting us or any of our Investors and will not be subject to any different standards imposed by our operating agreement, the Delaware Limited Liability Company Act or under any other law, rule or regulation or in equity. These modifications of fiduciary duties are expressly permitted by Delaware law.
We do not have a conflicts of interest policy.
The Company, the Manager and their affiliates will try to balance the Company’s interests with their own. However, to the extent that such parties take actions that are more favorable to other entities than the Company, these actions could have a negative impact on the Company’s financial performance and, consequently, on distributions to Investors and the value of the Interests. The Company has not adopted, and does not intend to adopt in the future, either a conflicts of interest policy or a conflicts resolution policy.
Payments from the Company to the Manager, the Series Manager and their respective employees or affiliates.
The Manager and the Series Manager will engage with, on behalf of the Company, a number of brokers, dealers, Asset Sellers, insurance companies, storage and maintenance providers and other service providers and thus may receive in-kind discounts, for example, free shipping or storage. In such circumstances, it is likely that these in-kind discounts may be retained for the benefit of the Manager or the Series Manager and not the Company, or may apply disproportionately to other Series of Interests. The Manager or the Series Manager may be incentivized to choose a broker, dealer or Asset Seller based on the benefits they are to receive or all Series of Interests collectively are to receive rather than that which is best for the Series of Interests.
Members of the expert network and the Advisory Board are often dealers and brokers within the Asset Class themselves and therefore will be incentivized to sell the Company their own Underlying Assets at potentially inflated market prices. In certain cases, a member of the Advisory Board could be the Asset Seller and could receive an identification fee for originally locating the asset. In the case of the Series Alpha Black Lotus, for example, a member of the Advisory Board is the seller of the Underlying Asset. The Manager believes the purchase price of the Underlying Assets of each Series to be at or below fair market value.
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An Asset Seller may retain partial ownership of an Underlying Asset and in such circumstances the Asset Seller may benefit from the Manager’s advice, along with the potential for returns without incurring fees to manage the asset.
Members of the expert network and the Advisory Board may also be Investors, in particular, if they are holding Interests acquired as part of a sale of an Underlying Asset (i.e., as they were the Asset Seller). They may therefore promote their own self- interests when providing advice to the Manager or the Series Manager regarding an Underlying Asset (e.g., by encouraging the liquidation of such Underlying Asset so they can receive a return in their capacity as an Investor).
In the event that the Operating Expenses exceed the revenue from the Underlying Asset and any cash reserves, the Manager has the option to cause the Series to incur an Operating Expenses Reimbursement Obligation to cover such excess. As interest may be payable on such loan, the Manager may be incentivized to cause the Series to which the Underlying Asset relates, to incur an Operating Expenses Reimbursement Obligation to pay Operating Expenses rather than look elsewhere for additional sources of income or to repay any outstanding Operating Expenses Reimbursement Obligation as soon as possible rather than make distributions to Investors. The Manager may also choose to issue additional Interests to pay for Operating Expenses instead of causing the Company to incur an Operating Expenses Reimbursement Obligation, even if any interest payable by a particular Series of Interests on any Operating Expenses Reimbursement Obligation may be economically more beneficial to Interest Holders of that Series than the dilution incurred from the issuance of additional Interests.
The Manager determines the timing and amount of distributions made to Investors from Free Cash Flow of a particular Series of Interests. As a consequence, the Manager also determines the timing and amount of payments made to the Series Manager, since payments to the Series Manager are only made if distributions of Free Cash Flow are made to the Investors. Since the Manager has been appointed as the Series Manager, the Manager may thus be incentivized to make distributions of Free Cash Flow more frequently and in greater quantities rather than leaving excess Free Cash Flow on the balance sheet of a particular Series to cover future Operating Expenses, which may be more beneficial to a particular Series.
Potential future brokerage activity.
The Company intends to utilize a broker-dealer other than the Manager or an affiliate of the Manager. However, either the Manager or one of its affiliates may in the future register with the Commission as a broker-dealer in order to be able to facilitate liquidity in the Interests via the Mythic Markets Platform. The Manager, or its affiliates, may be entitled to receive fees based on volume of trading and volatility of the Interests on the Mythic Markets Platform, and such fees may be in excess of what the Series Manager receives via the Management Fee or the appreciation in the Interests it holds in each Series of Interests. Although an increased volume of trading and volatility will benefit Investors as it will assist in creating a market for those wishing to transfer their Interests, there is the potential that there is a divergence of interests between the Manager and those Investors; for instance, if the Underlying Asset does not appreciate in value, this will impact the price of the Interests but may not adversely affect the profitability related to the brokerage activities of the Manager (i.e., the Manager would collect brokerage fees whether the price of the Underlying Asset increases or decreases).
Ownership of multiple Series of Interests.
The Manager or its affiliates will acquire interests in each Series of Interests for their own accounts. While the Manager or its affiliates do not currently intend to transfer these Interests prior to the liquidation of an Underlying Asset, in the future, they may, from time to time, transfer these interests, either directly or through brokers, via the Mythic Markets Platform or otherwise, subject to the restrictions of applicable securities laws and filing any necessary amendment to this Offering Circular. Depending on the timing of the transfers, this could impact the interests held by the Investors (e.g., driving price down because of supply and demand and over availability of Interests). This ownership in each of the Series of Interests may result in a conflict of interest between the Manager or its affiliates and the Investors who only hold one or certain Series of Interests (e.g., the Manager or its affiliates, once registered as a broker-dealer with the Commission, may disproportionately market or promote a certain Series of Interests, in particular, where they are a significant owner, so that there will be more demand and an increase in the price of such Series of Interests).
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Allocations of income and expenses as between Series of Interests.
The Manager may appoint a service provider to service the entire collection of the Underlying Assets (e.g., for insurance, storage, maintenance or media material creation). Although appointing one service provider may reduce cost due to economies of scale, such service provider may not necessarily be the most appropriate for the Underlying Asset (e.g., it may have more experience in maintaining certain types of collectibles whereas, the Company will own many different types of collectibles). In such circumstances, the Manager would be conflicted from acting in the best interests of the Underlying Assets as a whole or those of one particular Underlying Asset.
There may be situations when it is challenging or impossible to accurately allocate income, costs and expenses to a specific Series of Interests, and certain Series of Interests may get a disproportionate percentage of the cost or income, as applicable. In such circumstances, the Manager would be conflicted from acting in the best interests of the Company as a whole or the individual Series of Interests. While we presently intend to allocate expenses as described in “Description of the Business – Allocations of Expenses”, the Manager has the right to change this allocation policy at any time without further notice to Investors.
Conflicting interests of the Manager, the Series Manager and the Investors.
The Manager or its affiliates are obligated to purchase a minimum of 2% of Interests of all offerings, at the same terms as all other Investors. However, the Manager may, in its sole discretion, acquire additional Interests, at the same terms as all other Investors. If there is a lack of demand for Interests in a particular Series during such Series’ initial offering, the Manager in its sole discretion may acquire additional Interests (at the same terms as all other Investors) in order for an offering for such Series of Interests to have a Closing. The Manager will engage in such activity in the future if it reasonably believes at such time this to be in the best interests of Investors or potential Investors. Such activity may result in a reduced level of liquidity in the secondary trading market for any Series in which it makes such a decision. See “Principal Interests Holders” for additional information.
The Manager will determine whether or not to liquidate a particular Underlying Asset, should an offer to acquire the whole Underlying Asset be received. As the Manager or an affiliates, once registered as a broker-dealer with the Commission, will receive fees on the trading volume in the Interests connected with an Underlying Asset, they may be incentivized not to realize such Underlying Asset even though Investors may prefer to receive the gains from any appreciation in value of such Underlying Asset. Furthermore, when determining to liquidate an Underlying Asset, the Manager will do so considering all of the circumstances at the time, which may include obtaining a price for an Underlying Asset that is in the best interests of a substantial majority but not all of the Investors.
The Manager may be incentivized to use more popular Underlying Assets at Fan Club Experiences as this may generate higher Free Cash Flow to be distributed to the Series Manager, an affiliate of the Manager, and Investors in the Series associated with that particular Underlying Asset. This may lead certain Underlying Assets to generate lower distributions than the Underlying Assets of other Series of Interests. The use of Underlying Assets at the Fan Club Experiences could increase the risk of the Underlying Assets getting damaged and could impact the value of the Underlying Asset and, as a result, the value of the related Series of Interests. The Manager may therefore be conflicted when determining whether to use the Underlying Asset at the Fan Club Experiences to generate revenue or limit the potential of damage being caused to them. Furthermore, the Manager may be incentivized to utilize Underlying Assets that help popularize the Interests via the Mythic Markets Platform or general participation or membership in the Platform, which means of utilization may not generate as much immediate returns as other potential utilization methods.
The Manager has the ability to unilaterally amend the Operating Agreement and allocation policy.
As the Manager is party, or subject, to these documents, it may be incentivized to amend them in a manner that is beneficial to it as manager of the Company or any Series or may amend it in a way that is not beneficial for all Investors. In addition, the Operating Agreement seeks to limit the fiduciary duties that the Manager owes to its Investors. Therefore, the Manager is permitted to act in its own best interests rather than the best interests of the Investors. See “Description of the Interests Offered” for more information.
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The Purchase and Sale Agreement is not an arms’ length transaction.
The Company, on behalf of a Series, may enter into a Purchase and Sale Agreement for such Series’ Underlying Asset that is not an arms’ length transaction, for example the Purchase and Sale Agreement for the Series Alpha Black Lotus. In such transactions, the Manager purchases the Underlying Asset for the Series and may sell it to the Series for a value greater than its original cost of such Underlying Asset to adjust for changes in the fair market value of the Underlying Asset. Please see the recent sales, footnoted throughout this Offering Circular.
Manager’s Fees and Compensation
None of the compensation set forth under “Compensation of the Manager” was determined by arms’ length negotiations. Investors must rely upon the duties of the Manager of good faith and fair dealing to protect their interests, as qualified by the Operating Agreement. While the Manager believes that the consideration is fair for the work being performed, there can be no assurance made that the compensation payable to the Manager will reflect the true market value of its services.
Fees for arranging events or monetization in addition to the Management Fee.
As the Manager will acquire a percentage of each Series of Interests, it may be incentivized to attempt to generate more earnings with those Underlying Assets owned by those Series of Interests in which it holds a higher stake.
Any profits generated from the Mythic Markets Platform (e.g., through advertising) and from issuing additional Interests in Underlying Assets on the Mythic Markets Platform will be for the benefit of the Manager (e.g., more Sourcing Fees). In order to increase its revenue stream, the Manager may therefore be incentivized to issue additional Series of Interests and acquire more Underlying Assets rather than focus on monetizing any Underlying Assets already held by existing Series of Interests.
Conflicts between the Advisory Board and the Company.
The Operating Agreement of the Company provides that the resolution of any conflict of interest approved by the Advisory Board shall be deemed fair and reasonable to the Company and the Members and not a breach of any duty at law, in equity or otherwise. As part of the remuneration package for Advisory Board members, they may receive an ownership stake in the Manager. This may incentivize the Advisory Board members to make decisions in relation to the Underlying Assets that benefit the Manager rather than the Company.
As a number of the Advisory Board members are in the vintage comic book, collectible card and fantasy art industry, they may seek to sell Underlying Assets to, or acquire Underlying Assets from, the Company.
The Company, the Asset Manager, the Manager, and their respective affiliates do not have separate counsel.
The counsel of the Company (“Legal Counsel”) is also counsel to the Manager, the Asset Manager and their respective affiliates, including other series LLC entities of Mythic Markets and other Series of Interests (collectively, the “Mythic Markets Parties”). Because legal counsel represents both the Company and the Mythic Markets Parties, certain conflicts of interest exist and may arise. To the extent that an irreconcilable conflict develops between the Company and any of the Mythic Markets Parties, legal counsel may represent the Mythic Markets Parties and not the Company or the Series. Legal Counsel may, in the future, render services to the Company or the Mythic Markets Parties with respect to activities relating to the Company as well as other unrelated activities. Legal counsel is not representing any prospective Investors of any Series of Interests in connection with any Offering and will not be representing the members of the Company other than the Manager. Prospective Investors are advised to consult their own independent counsel with respect to the other legal and tax implications of an investment in any Series.
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Our affiliates’ interests in other Mythic Markets Parties.
The officers and directors of Mythic Markets, which serves as the Manager and Asset Manager of the Company, are also officers and directors and/or key professionals of other Mythic Markets Parties. These persons have legal obligations with respect to those entities that are similar to their obligations to us. As a result of their interests in other Mythic Markets Parties, their obligations to other investors and the fact that they engage in and will continue to engage in other business activities on behalf of themselves and others, they will face conflicts of interest in allocating their time among us and other Mythic Markets Parties and other business activities in which they are involved.
NOTICE REGARDING AGREEMENT TO ARBITRATE
THIS OFFERING MEMORANDUM REQUIRES THAT ALL INVESTORS ARBITRATE ANY DISPUTE, OTHER THAN THOSE CLAIMS UNDER FEDERAL SECURITIES LAWS AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER, ARISING OUT OF THEIR INVESTMENT IN THE COMPANY. ALL INVESTORS FURTHER AGREE THAT THE ARBITRATION WILL BE BINDING AND HELD IN THE STATE OF DELAWARE. EACH INVESTOR ALSO AGREES TO WAIVE ANY RIGHTS TO A JURY TRIAL. OUT OF STATE ARBITRATION MAY FORCE AN INVESTOR TO ACCEPT A LESS FAVORABLE SETTLEMENT FOR DISPUTES. OUT OF STATE ARBITRATION MAY ALSO COST AN INVESTOR MORE TO ARBITRATE A SETTLEMENT OF A DISPUTE.
The waiver of jury trial provision does not apply to claims under the federal securities laws. Please see Article 14 of our Operating Agreement.
ADDITIONAL RISK FACTOR REGARDING ARBITRATION:
The Operating Agreement contains a mandatory dispute resolution process which may limit the rights of investors to some legal remedies and forums otherwise available. This Agreement contains a provision which requires that all claims arising from Member’s investment in the Company be resolved through arbitration.
For Members’ information:
(a) Arbitration is final and binding on the parties;
(b) The parties are waiving their right to seek remedies in court, including the right to jury trial;
(c) Prearbitration discovery is generally more limited than and potentially different in form and scope from court proceedings.
(d) The Arbitration Award is not required to include factual findings or legal reasoning and any party’s right to appeal or to seek modification of a ruling by the arbitrators is strictly limited;
(e) The panel of arbitrators may include a minority of persons engaged in the securities industry. Such arbitration provision limits the rights of an investor to some legal remedies and rights otherwise available.
The dispute resolution process provisions do not apply to claims under the federal securities laws. By agreeing to the dispute resolution process, including mandatory arbitration, investors will not be deemed to have waived the company’s compliance with the federal securities laws and the rules and regulations thereunder.
Dilution means a reduction in value, control or earnings of the Interests the Investor owns. There will be no dilution to any Investors associated with any Offering. However, from time to time, additional Interests in the Series offered under this Offering Circular may be issued in order to raise capital to cover the Series’ ongoing Operating Expenses. See “Description of the Business – Operating Expenses” for further details.
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The Manager must acquire a minimum of 2% of the Interests in connection with any Offering, however, the Manager, in its sole discretion, may acquire greater than 2% of the Interests in any Offering. The Manager will pay the price per Interest offered to all other potential Investors hereunder.
The gross proceeds of the Series offered pursuant to this Offering Circular shall be used as set forth in the Section entitled “Use of Proceeds- All Series” that follow.
The gross proceeds of the Series MTG-ABL90 Offering (including from Series Interests acquired by the Manager) equal $90,000, and were, and will, be used as follows:
| Uses |
|
|
|
| |
|
|
|
|
|
| |
| Asset Cost |
|
| $ | 79,000 |
|
| Acquisition Expenses (1) |
|
|
| - |
|
| Offering Expenses (2) |
|
| $ | 6,683 |
|
| Operating Expenses (estimate) (3) |
|
|
|
|
|
| --Storage Expenses |
|
| $ | 967 |
|
| --Insurance Expenses |
|
| $ | 300 |
|
| --Reserves for Miscellaneous Expenses |
|
| $ | 500 |
|
| --Transfer Agent Fee |
|
|
| - |
|
| Sourcing Fee (4) |
|
| $ | 2,550 |
|
| Management Fee |
|
|
| - |
|
| Total Fees and Expenses |
|
| $ | 11,000 |
|
|
|
|
|
|
|
|
| Total Proceeds |
|
| $ | 90,000 |
|
| (1) | The Manager incurred approximately $500 in Acquisition Expenses in connection with the procurement of the Series Alpha Black Lotus through October 31, 2019. The Manager will not seek reimbursement for these expenses from Series MTG-ABL90. |
|
|
|
| (2) | The Manager was reimbursed $6,683 in aggregate Offering Expenses by Series ABL90 and will not seek additional reimbursement for Offering Expenses for the Offering of Series ABL90. |
|
|
|
| (3) | Amounts reflect estimates that may be incurred by or on behalf of Series MTG-ABL90 by the Manager or Series MTG-ABL90 directly. |
|
|
|
| (4) | The Manager is entitled to a Sourcing Fee of up to five percent (5%) of the purchase price of an applicable Underlying Asset. The Manager may elect to receive a reduced Sourcing Fee in connection with an Offering. See “Plan of Distribution and Subscription Procedure – Fees and Expenses” for additional information. |
Our Manager acquired the Series Alpha Black Lotus from the Asset Seller for a total cost of $51,000, which was paid in cash by the Manager. The Company has entered into a purchase and sale agreement with the Manager (the “Series MTG-ABL90 PSA”) for the purchase of the Series Alpha Black Lotus for $79,000 (the “Asset Cost”). The original basis of the Series Alpha Black Lotus is $51,000 plus the Manager incurred additional holding costs. For this asset only, the Manager is not seeking reimbursement of costs. The Company raised $90,000 in the Series MTG-ABL90 Offering, which was enough to substantially perform on the Series MTG-ABL90 PSA and have enough in reserves for the ongoing expected costs related to the Series Alpha Black Lotus’ storage, insurance, and other costs. The Manager has been fully divested of its interest in the Series Alpha Black Lotus pursuant to the terms of the Series MTG-ABL90 PSA. The Manager, separate from its original ownership and purchase of the Series Alpha Black Lotus, acquired approximately 5.85% of the Series MTG-ABL90 at the closing of the Series MTG-ABL90 Offering. “Asset Seller(s)” means an individual(s), dealer or auction company, which owns an Underlying Asset prior to i) a purchase of an Underlying Asset by the Company in advance of a potential offering or ii) the closing of an offering from which proceeds are used to acquire the Underlying Asset. In the case of the Series Alpha Black Lotus, the Asset Seller is not an affiliate of the Company, the Manager or any of their respective officers or directors.
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The Series MTG-ABL90 expects to incur additional expenses related to custody and maintenance of the Series Alpha Black Lotus. It is expected that the Manager, or the Company, on behalf of the Series, will obtain most of the applicable services (such as storage and insurance). It may be that any such costs will be accrued and deferred until such time that the Company has enough Series with assets to justify the costs of such expenses and where the Company can take advantage of economies of scale.
The allocation of the net proceeds of the Series MTG-ABL90 Offering set forth above represents our intentions based upon our current plans and assumptions regarding industry and general economic conditions, our future revenues and expenditures. The amounts and timing of our actual future Operating Expenses will depend upon numerous factors, including market conditions, cash generated by our operations, business developments, and related rate of growth. The Manager reserves the right to modify the use of proceeds based on the factors set forth above. Neither the Company nor the Series are expected to keep any of the proceeds from the Offering. In the event that less than the Maximum Series MTG-ABL90 Interests are sold in connection with this Offering, the Manager may pay, and not seek reimbursement for, Offering Expenses and Acquisition Expenses and may waive the Sourcing Fee.
DESCRIPTION OF THE SERIES ALPHA BLACK LOTUS
Summary Overview
|
| · | The Series MTG- ABL90 purchased a Magic: The Gathering Alpha Black Lotus (at times described as the Alpha Black Lotus or Black Lotus throughout this Offering Circular) as the Series MTG-ABL90 Asset (the “Series Alpha Black Lotus” or the “Underlying Asset”), the specifications of which are set forth below. |
|
| · | When Wizards of the Coast released Magic: The Gathering in 1993, they printed only 1,100 Black Lotuses for their first-edition (Alpha) card set. It was the world’s first trading card game and the cards quickly sold out. So did the next set (Beta), and the set after that (Unlimited). In those early days, the designers were still tweaking the game mechanics. It didn’t take long for them to realize that the Black Lotus gave whoever wielded one an unfair advantage. As a result, the Black Lotus was removed from subsequent editions of the core set and only reprinted in limited edition Collectors Edition bundles that were restricted from play. In March 1996, Wizards of the Coast added the Black Lotus to the “Reserved List” (cards that will never be reprinted again) to preserve their value as collectibles. |
|
| · | Of 1,100 Alpha Black Lotus cards produced in 1993, the Series Alpha Black Lotus represents 1 of just 100 graded 9.0 or above (out of 10) by Beckett Grading Services. BGS sealed the Series Alpha Black Lotus in an airtight plastic sleeve, encased the card in their proprietary tamper-proof plastic case, and issued the unique serial number #0010606601. The serial number can be used to verify the card’s grade and authenticity in the BGS registry. |
|
| · | Magic: The Gathering is one of Hasbro’s most profitable brands, with sustained year-over-year growth in popularity and revenue.3 With an estimated 20 million players and collectors worldwide, we believe that the Black Lotus’ status as the rarest and most desirable cards give it global appeal. |
|
| · | Based upon the authentication and grading performed by BGS (Beckett Grading Services) on June 19, 2018, we believe this example to be “Mint” condition. BGS also issued subgrades of 9.5 centering, 9.0 edges, 8.5 corners, and 9.0 surface for this example. BGS identifies only 41 examples receiving a higher overall grade. |
Asset Description
Ownership and Pricing History
Prior to authentication and grading by BGS in June 2018, the provenance of Series Alpha Black Lotus is unknown. Originally published by Wizards of the Coast in August 1993, the Black Lotus was originally distributed in 15 card “booster packs” for $2.45, or roughly $4.27 in 2018 dollars, and 60 card “Starter Decks” for $7.95 MSRP, or roughly $13.87 in 2018 dollars.
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Grading Overview
Series Alpha Black Lotus was thoroughly inspected, authenticated, and graded by BGS (Beckett Grading Services) on June 19, 2018 and given a 9.0 “Mint” condition grade. BGS identifies only 41 examples receiving a higher overall grade.
______________
3 Hasbro Reports Third Quarter 2018 Financial Results. (n.d.). Retrieved from http://investor.hasbro.com/news-releases/news-release-details/hasbro-reports-third-quarter-2018-financial-results
BGS issued the following subgrades for Series Alpha Black Lotus:
|
| · | 9.5 Centering - Centering 50/50 one way, 55/45 the other. |
|
| · | 9.0 Edges - Smooth edges, with a handful of specks or one minor spot. |
|
| · | 8.5 Corners - Slight imperfections under intense scrutiny. |
|
| · | 9.0 Surface - Original color borders and gloss. |
Market Assessment
We believe that rare Alpha- edition Magic: The Gathering cards like the Black Lotus have a special place in collectible card gaming and popular culture, with the iconic status necessary to supersede typical generational preferences.4 We believe the Series Alpha Black Lotus to be a particularly good Alpha Black Lotus due to its 9.0 “Mint” grade given by Beckett Grading Services. We believe that an Alpha-edition Black Lotus represents a more unique investment over the Beta (approximately 3,200 printed), Unlimited (approximately 18,500 printed), and Collectors’ Edition (approximately 15,000 printed), compared with approximately 1,100 printed for Alpha-edition.
We believe Black Lotus values have the potential to continue to appreciate going forward, driven by the successful September 2018 introduction of Magic: The Gathering Arena, a film series in development by 20th Century Fox, and the debut of Magic eSports in 2019.
History
When Wizards of the Coast released Magic: The Gathering in 1993, they printed only 1,100 Black Lotuses for their first-edition (Alpha) card set. It was the world’s first trading card game, where players become dueling wizards who unleash fantastical creatures and spells on each other. The cards quickly sold out, as did the next set (Beta), and the set after that (Unlimited).
In those early days, the designers were still tweaking the game mechanics. It didn’t take long for them to realize that the Black Lotus gave whoever wielded one an unfair advantage, making it way too easy to defeat less fortunate opponents. As a result, the card was restricted from play and it was not included in subsequent releases of the core set.
Today, an estimated 20 million people play Magic worldwide.5 The Black Lotus was printed in 1993. Most of them started playing after the Black Lotus went out of print.6 Many have never seen one in person. It has become so iconic that even people who’ve never played have heard of it. We believe that the Black Lotus is extremely rare, extremely powerful, and therefore extremely desirable to an engaged and growing fanbase.
________________
4 Baird, S. (2019, March 11). Yet Another Black Lotus Has Been Sold At Auction, This Time For $166K. Retrieved from http://www.thegamer.com/black-lotus-sold-auction-166k/
5 http://www.theguardian.com/technology/2015/jul/10/magic-the-gathering-pop-culture-hit-where-next
6 http://www.echomtg.com/blog/post/45/the-number-of-magic-players-worldwide-by-year/
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Magic is one of Hasbro’s most profitable brands, with sustained year-over-year growth in popularity and revenue. Wizards of the Coast released an open beta of their digital game, Magic: The Gathering Arena, in September 2018. In 2014, 20th Century Fox acquired rights to a Magic movie franchise. The first film is currently in development.
Depreciation
The Company treats assets as collectible and therefore will not depreciate or amortize the Series Alpha Black Lotus going forward.
USE OF PROCEEDS – Series MTG-94BOX
We estimate that the gross proceeds of the Series MTG-94BOX Offering (including from Series Interests acquired by the Manager) will be approximately the amount listed in the Use of Proceeds Table assuming the full amount of the Series Offering is sold, and will be used as follows:
| Uses |
|
| Minimum |
|
| 75% |
|
| 100% |
| |||
|
|
|
|
|
|
|
|
|
|
|
| |||
| Asset Cost |
|
| $ | 27,225 |
|
| $ | 34,100 |
|
| $ | 47,850 |
|
| Acquisition Expenses (1) |
|
|
| - |
|
|
| - |
|
|
| - |
|
| Offering Expenses |
|
| $ | 4,150 |
|
| $ | 4,150 |
|
| $ | 4,150 |
|
| Operating Expenses (estimate) (2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| --Storage Expenses |
|
| $ | 200 |
|
| $ | 200 |
|
| $ | 200 |
|
| --Insurance Expenses |
|
| $ | 300 |
|
| $ | 300 |
|
| $ | 300 |
|
| --Reserves for Miscellaneous Expenses |
|
| $ | 375 |
|
| $ | 375 |
|
| $ | 375 |
|
| --Transfer Agent Fee |
|
| $ | 125 |
|
| $ | 125 |
|
| $ | 125 |
|
| Sourcing Fee (3) |
|
| $ | 2,000 |
|
| $ | 2,000 |
|
| $ | 2,000 |
|
| (assuming the Manager acquires 2% of Interests) | |||||||||||||
| Management Fee |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
| Disposition Fee |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
| Total Fees and Expenses |
|
| $ | 7,150 |
|
| $ | 7,150 |
|
| $ | 7,150 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total Proceeds |
|
| $ | 34,375 |
|
| $ | 41,250 |
|
| $ | 55,000 |
|
| (1) | The Manager incurred approximately $500 in Acquisition Expenses in connection with the procurement of the Series MTG 1994 Booster Boxes through April 2, 2020. The Manager will not seek reimbursement for these expenses from Series MTG-94BOX |
|
|
|
| (2) | Amounts reflect estimates that may be incurred by or on behalf of Series MTG-94BOX by the Manager or Series MTG-94BOX directly. |
|
|
|
| (3) | The Manager is entitled to a Sourcing Fee of up to five percent (5%) of the purchase price of an applicable Underlying Asset. The Manager may elect to receive a reduced Sourcing Fee in connection with an Offering. See “Plan of Distribution and Subscription Procedure – Fees and Expenses” for additional information. |
Our Manager acquired the Series MTG 1994 Booster Boxes from the Asset Seller for a total cost of $61,000, which was paid in cash by the Manager.
The original basis of the Series MTG 1994 Booster Boxes is $61,000 plus the Manager incurred additional holding costs (Acquisition Costs), for which the Manager is not seeking reimbursement. The Company has entered into a purchase and sale agreement (“PSA”) with the Manager for the purchase of the Series MTG 1994 Booster Boxes for $47,850 (the “Asset Cost”). The Company is committed to raising a minimum of $34,375, which is enough to substantially perform on the purchase and sale agreement and have enough in reserves for the ongoing expected costs related to the Series MTG 1994 Booster Boxes’ storage, insurance, and other costs. As funds are raised after the minimum, the Manager will be divested of its interest until the maximum of $55,000 is raised. The Manager may at any time during the term of the Offering, elect to acquire Series Interests by way of cancelation of such amount owed to it by the Company under this Agreement equivalent to the value of the Series Interests acquired. The Manager, separate from its original ownership and purchase of the Series MTG 1994 Booster Boxes, may maintain at least 2% of the Series as described herein. “Asset Seller(s)” means an individual(s), dealer or auction company, which owns an Underlying Asset prior to i) a purchase of an Underlying Asset by the Company in advance of a potential offering or ii) the closing of an offering from which proceeds are used to acquire the Underlying Asset. In the case of the Series MTG 1994 Booster Boxes, the Asset Seller is not an affiliate of the Company, the Manager or any of their respective officers or directors.
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| Table of Contents |
The Manager will accept a down payment of $27,225 and will begin to divest from the asset. In other words, the Manager will continue to own, in joint tenancy with the Series, the asset until such time that a.) the full $55,000 is raised from purchasers in the Offering or through a contribution of the Manager’s interest in the asset in exchange for Interests of equivalent value, at which time title will completely be relinquished to the Series or b.) the Offering is closed at which time the title still will be relinquished to Series, but the Manager will receive any unsold Interests. It is expected that the Series and Manager will have multiple closings to effect the change in title.
The Manager has incurred certain expenses to date which are covered as part of the purchase and sale agreement, however, is not seeking reimbursement of those costs. The Company expects to incur additional expenses related to the Series 1994 MTG Booster Boxes and has accounted for such costs based on a minimum raise of $34,375. It is expected that the Manager, or the Company, on behalf of the Series, will not obtain most of the services (such as insurance) listed above until the Minimum Offering amount is raised and the Series can substantially perform on the purchase and sale agreement. It may be that any costs above will be deferred until such time that the Company has enough Series with assets to justify the costs of such expenses and where the Company can take advantage of economies of scale. The Company has also budgeted for miscellaneous costs not foreseen.
Upon the Closing of the Offering, proceeds from the sale of the Interests will be distributed to the account of the Series. The Series will then perform on the purchase and sale agreement (“PSA”). As the Series makes payments to the Manager, the Manager will be divested of its interest in the Series MTG 1994 Booster Boxes and the Series will own the Series MTG 1994 Booster Boxes. Upon full payment under the terms of the PSA, the Series MTG 1994 Booster Boxes will be owned by the Series and not subject to any liens or encumbrances.
In addition to the costs of acquiring the Underlying Asset, proceeds from the Offering will be used to pay (i) approximately $4,150 of Offering Expenses (including but not limited to the items described in the table above), in part which will be paid to the Manager and its affiliates, except as to the extent that Offering Expenses are lower than anticipated, any overage will be maintained in an operating account for future Operating Expenses, and (ii) $2,000 to the Manager as consideration for assisting in the sourcing of the Series 1994 MTG Booster Boxes. See “Plan of Distribution and Subscription Procedure – Fees and Expenses” for additional information.
The allocation of the net proceeds of this Offering set forth above represents our intentions based upon our current plans and assumptions regarding industry and general economic conditions, our future revenues and expenditures. The amounts and timing of our actual expenditures will depend upon numerous factors, including market conditions, cash generated by our operations, business developments, and related rate of growth. The Manager reserves the right to modify the use of proceeds based on the factors set forth above. Neither the Company nor the Series are expected to keep any of the proceeds from the Offering. In the event that less than the Maximum Series MTG-94BOX Interests are sold in connection with this Offering, the Manager may pay, and not seek reimbursement for, Offering Expenses and Acquisition Expenses and may waive the Sourcing Fee.
DESCRIPTION OF THE SERIES 1994 MTG Booster Boxes
Investment Overview
| · | Upon completion of the Series MTG-94BOX Offering, Series MTG-94BOX will purchase the 1994 Magic: The Gathering Booster Boxes including Antiquities, Revised, Legends, The Dark, and Fallen Empires (at times described as the “1994 MTG Booster Boxes” throughout this Offering Circular) as the collection of underlying assets for Series MTG-94BOX (the “Series 1994 MTG Booster Boxes” or the “Underlying Asset” with respect to Series MTG-94BOX, as applicable), the specifications of which are set forth below. |
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| · | The Series MTG 1994 Booster Boxes includes five unopened, factory-sealed booster boxes (also called expansion sets). Each box represents one of the five sets that Wizards of the Coast released in 1994. |
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| · | Antiquities was released on March 4, 1994 and is the second Magic: The Gathering expansion set. The booster box contains 60 booster packs of eight cards. Each pack includes six common and two uncommon cards from the 100-card set. The factory wrapper has a small split on one corner of the box. |
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| Table of Contents |
| · | The Revised Edition, also known as “Revised”, is the third edition of the Magic core sets. Wizards of the Coast released Revised in April 1994, just one month after Antiquities. The box includes 36 packs of 15 cards. The factory wrapper is slightly split along three corners, with some wear on the box corners. |
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| · | Legends was released in mid-June 1994 and is the third Magic: The Gathering expansion set. The box includes 36 packs of 15 cards. |
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| · | The Dark is the fourth Magic expansion and was released on August 8, 1994. The box includes 60 packs of eight cards. There is a tear in the factory wrapper on one side, with no damage to the box. |
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| · | Fallen Empires is the fifth Magic expansion and was released in November 1994. The box includes 60 packs of 8 cards. |
Asset Description
Ownership & Maintenance History
| · | The Underlying Assets were purchased from a private collector who acquired them over the past five years in private transactions. |
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| · | The Underlying Assets are individually encased in hard-plastic display cases. |
Notable Features
| · | The Underlying Assets are factory-sealed and have never been opened or searched. |
Notable Defects
| · | The Underlying Asset presents in excellent condition, commensurate with storage in a temperature and humidity-controlled environment. |
Details
| Series 1994 MTG Booster Boxes | |
| Year | 1994 |
| Production Total (approx.) | Antiquities - 31,000 boxes Revised - 245,000 boxes Legends - 65,000 boxes The Dark - 129,000 boxes Fallen Empires - 729,000 boxes |
| Condition | Sealed: Near Mint - Mint |
Depreciation
The Company treats assets as collectible and therefore will not depreciate or amortize the Series 1994 MTG Booster Boxes going forward.
| 31 |
| Table of Contents |
USE OF PROCEEDS – Series ART-GGMTG
We estimate that the gross proceeds of the Series ART-GGMTG Offering (including from Series Interests acquired by the Manager) will be approximately the amount listed in the Use of Proceeds Table assuming the full amount of the Series Offering is sold, and will be used as follows:
| Uses |
|
|
| 100% | |
|
|
|
|
|
|
|
| Asset Cost |
|
| $ | 130,000 |
|
| Acquisition Expenses (1) |
|
|
|
|
|
| Offering Expenses |
|
| $ | 7,000 |
|
| Operating Expenses (estimate) (2) |
|
|
|
|
|
| --Storage Expenses |
|
| $ | 200 |
|
| --Insurance Expenses |
|
| $ | 300 |
|
| --Reserves for Miscellaneous Expenses |
|
| $ | 375 |
|
| --Transfer Agent Fees |
|
| $ | 125 |
|
| Sourcing Fee (3) |
|
| $ | 5,000 |
|
| (assuming the Manager acquires 2% of Interests) |
|
|
|
|
|
| Management Fee |
|
| $ | - |
|
| Disposition Fee |
|
| $ | - |
|
| Total Fees and Expenses |
|
| $ | 13,000 |
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|
|
|
|
|
|
|
| Total Proceeds |
|
| $ | 143,000 |
|
(1) The Manager incurred approximately $500 in Acquisition Expenses in connection with the procurement of the Series Alpha Giant Growth Art through June 29, 2020. The Manager will not seek reimbursement for these expenses from Series ART- GGMTG.
(2) Amounts reflect estimates that may be incurred by or on behalf of Series ART-GGMTG by the Manager or Series ART-GGMTG directly.
(3) The Manager is entitled to a Sourcing Fee of up to five percent (5%) of the purchase price of an applicable underlying asset. The Manager may elect to receive a reduced Sourcing Fee in connection with an Offering. See “Plan of Distribution and Subscription Procedure – Fees and Expenses” for additional information.
The Company has committed to acquire the Series Alpha Giant Growth Art from the Asset Seller for a total cost of $130,000 (the “Asset Cost”) pursuant to the terms of a purchase and sale agreement, of which $26,000 has been delivered as a deposit by the Manager on behalf of the Company (the “ GGMTG Upfront Payment”). The original basis of the Series Alpha Giant Growth Art is $130,000 plus the Manager incurred additional holding costs (Acquisition Costs), for which the Manager is not seeking reimbursement. The Company is committed to raising $143,000, which is the amount necessary to substantially perform on the purchase and sale agreement and have enough in reserves for the ongoing expected costs related to the Series Alpha Giant Growth Art’ storage, insurance, and other costs. The Asset Seller expects to obtain 20% of the Series Interests pursuant to the terms of the purchase and sale agreement. The Manager will acquire at least 2% of the Series as described herein. “Asset Seller(s)” means an individual(s), dealer or auction company, which owns an Underlying Asset prior to i) a purchase of an Underlying Asset by the Company in advance of a potential offering or ii) the closing of an offering from which proceeds are used to acquire the Underlying Asset. In the case of the Series Alpha Giant Growth Art, the Asset Seller is not an affiliate of the Company, the Manager or any of their respective officers or directors.
The Manager has incurred certain expenses to date which are covered as part of the purchase and sale agreement, however, is not seeking reimbursement of those costs. The Company expects to incur additional expenses related to the Series Alpha Giant Growth Art and has accounted for such costs based on a minimum raise of $143,000. It is expected that the Manager, or the Company, on behalf of the Series, will not obtain most of the services (such as insurance) listed above until the Offering amount is raised and the Series can substantially perform on the purchase and sale agreement. It may be that any costs above will be deferred until such time that the Company has enough Series with assets to justify the costs of such expenses and where the Company can take advantage of economies of scale. The Company has also budgeted for miscellaneous costs not foreseen.
Upon the Closing of the Offering, proceeds from the sale of the Interests will be distributed to the account of the Series. The Series will then perform on the purchase and sale agreement. As the Series makes payments to the Asset Seller, the Asset Seller will be divested of its interest in the Series Alpha Giant Growth Art and the Series will own the Series Alpha Giant Growth Art. Upon full payment under the terms of the PSA, the Series Alpha Giant Growth Art will be owned by the Series and not subject to any liens or encumbrances.
In addition to the costs of acquiring the Underlying Asset, proceeds from the Offering will be used to pay (i) approximately $7,000 of Offering Expenses (including but not limited to the items described in the table above), in part which will be paid to the Manager and its affiliates, except as to the extent that Offering Expenses are lower than anticipated, any overage will be maintained in an operating account for future Operating Expenses, (ii) $5,000 to the Manager as consideration for assisting in the sourcing of the Series Alpha Giant Growth Art ; and (iii) $26,000 to the Manager to repay the Manger for the GGMTG Upfront Payment. See “Plan of Distribution and Subscription Procedure – Fees and Expenses” for additional information.
The allocation of the net proceeds of this Offering set forth above represents our intentions based upon our current plans and assumptions regarding industry and general economic conditions, our future revenues and expenditures. The amounts and timing of our actual expenditures will depend upon numerous factors, including market conditions, cash generated by our operations, business developments, and related rate of growth. The Manager reserves the right to modify the use of proceeds based on the factors set forth above. Neither the Company nor the Series are expected to keep any of the proceeds from the Offering. In the event that less than the Maximum Series ART-GGMTG Interests are sold in connection with this Offering, the Manager may pay, and not seek reimbursement for, Offering Expenses and Acquisition Expenses and may waive the Sourcing Fee.
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| Table of Contents |
DESCRIPTION OF THE Series Alpha Giant Growth Art
Investment Overview
| • | Upon completion of the Series ART-GGMTG Offering, Series ART-GGMTG will purchase the Magic: The Gathering Alpha Giant Growth Art underlying asset for Series ART-GGMTG (the “Series Alpha Giant Growth Art” or the “Underlying Asset” with respect to Series ART-GGMTG, as applicable), the specifications of which are set forth below. |
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| • | The Underlying Asset is an original painting by Sandra Everingham depicting a giant rat standing over skeletons, which original painting is depicted on the Magic: The Gathering Giant Growth trading card. |
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| • | We believe that there is a growing demand for Sandra Everingham’s art, specifically her Alpha art produced in 1993. We believe less than 175 pieces of art from the original Alpha set exist today. The majority of those pieces are in the private collections of 3 prolific collectors. |
Asset Description
Ownership & Maintenance History
| • | The Underlying Asset was purchased from a private collector who acquired it in a private transaction. |
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| • | The Underlying Asset is framed in a floating frame. |
Notable Features
| • | The Underlying Asset is an original piece for one of the very first Magic: The Gathering cards ever printed. |
Notable Defects
| • | The Underlying Asset presents in excellent condition, commensurate with storage in a temperature and humidity-controlled environment. |
Details
| Series Alpha Giant Growth Art | |
| Artist | Sandra Everingham |
| Artwork | Giant Growth |
| Size | 7” x 5.5” |
| Medium | Acrylic on canvas |
| Creation year | 1993 |
| Purchased from | Private seller |
| Purchased for | $130,000 |
| Year purchased | 2019 |
Depreciation
The Company treats assets as collectible and therefore will not depreciate or amortize the Series Alpha Giant Growth Art going forward.
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| Table of Contents |
USE OF PROCEEDS – Series COM-AF157
We estimate that the gross proceeds of the Series COM-AF157 (1962 Amazing Fantasy #15) Offering (including from Series Interests acquired by the Manager) will be approximately the amount listed in the Use of Proceeds Table assuming the full amount of the Series Offering is sold, and will be used as follows:
| Uses |
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| Minimum |
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|
| 75 | % |
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| 100 | % | |
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|
|
|
|
|
|
|
|
|
|
| |
| Asset Cost |
|
| $ | 48,500 |
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| $ | 62,500 |
|
| $ | 85,500 |
|
| Acquisition Expenses (1) |
|
|
| - |
|
|
| - |
|
|
| - |
|
| Offering Expenses |
|
| $ | 3,000 |
|
| $ | 3,000 |
|
| $ | 3,000 |
|
| Operating Expenses (estimate) (2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| --Storage Expenses |
|
| $ | 200 |
|
| $ | 200 |
|
| $ | 200 |
|
| --Insurance Expenses |
|
| $ | 300 |
|
| $ | 300 |
|
| $ | 300 |
|
| --Reserves for Miscellaneous Expenses |
|
| $ | 375 |
|
| $ | 375 |
|
| $ | 375 |
|
| --Transfer Agent Fees |
|
| $ | 125 |
|
| $ | 125 |
|
| $ | 125 |
|
| Sourcing Fee (3) |
|
| $ | 2,500 |
|
| $ | 2,500 |
|
| $ | 2,500 |
|
| (assuming the Manager acquires 2% of Interests) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Management Fee |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
| Disposition Fee |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
| Total Fees and Expenses |
|
| $ | 6,500 |
|
| $ | 6,500 |
|
| $ | 6,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total Proceeds |
|
| $ | 55,000 |
|
| $ | 69,000 |
|
| $ | 92,000 |
|
(1) The Manager incurred approximately $100 in Acquisition Expenses in connection with the procurement of the Series COM-AF157 through June 29, 2020. The Manager will not seek reimbursement for these expenses from Series COM-AF157.
(2) Amounts reflect estimates that may be incurred by or on behalf of Series COM-AF157 by the Manager or Series COM-AF157 directly.
(3) The Manager is entitled to a Sourcing Fee of up to five percent (5%) of the purchase price of an applicable Underlying Asset. The Manager may elect to receive a reduced Sourcing Fee in connection with an Offering. See “Plan of Distribution and Subscription Procedure – Fees and Expenses” for additional information.
| 34 |
| Table of Contents |
Our Manager acquired the Series COM-AF157 from the Asset Seller for a total cost of $110,000, which was paid in cash by the Manager. The original basis of the Series COM-AF157 is $110,000 plus the Manager incurred additional holding costs (Acquisition Costs), for which the Manager is not seeking reimbursement. The Company has entered into a purchase and sale agreement (“PSA”) with the Manager for the purchase of the Series COM-AF157 for $85,500 (the “Asset Cost”). The Company is committed to raising a minimum of $55,000, which is enough to substantially perform on the purchase and sale agreement and have enough in reserves for the ongoing expected costs related to the COM-AF157’s storage, insurance, and other costs. As funds are raised after the minimum, the Manager will be divested of its interest until the maximum of $92,000 is raised. The Manager may at any time during the term of the Offering, elect to acquire Series Interests by way of cancelation of such amount owed to it by the Company under this Agreement equivalent to the value of the Series Interests acquired. The Manager, separate from its original ownership and purchase of the COM-AF157, plans to maintain at least 2% of the Series as described herein. “Asset Seller(s)” means an individual(s), dealer or auction company, which owns an Underlying Asset prior to i) a purchase of an Underlying Asset by the Company in advance of a potential offering or ii) the closing of an offering from which proceeds are used to acquire the Underlying Asset. In the case of the Series COM-AF157, the Asset Seller is not an affiliate of the Company, the Manager or any of their respective officers or directors.
Upon the closing of a minimum raise of $55,000, the Manager will accept a down payment of $48,500 and will begin to divest from the asset. In other words, the Manager will continue to own, in joint tenancy with the Series, the asset until such time that a.) the full $92,000 is raised from purchasers in the Offering or through a contribution of the Manager’s interest in the asset in exchange for Interests of equivalent value, at which time title will completely be relinquished to the Series or b.) the Offering is closed at which time the title still will be relinquished to Series, but the Manager will receive any unsold Interests. It is expected that the Series and Manager will have multiple closings to effect the change in title.
The Manager has incurred certain expenses to date which are covered as part of the purchase and sale agreement, however, is not seeking reimbursement of those costs. The Company expects to incur additional expenses related to the Series COM-AF157 and has accounted for such costs based on a minimum raise of $55,000. It is expected that the Manager, or the Company, on behalf of the Series, will not obtain most of the services (such as insurance) listed above until the Minimum Offering amount is raised and the Series can substantially perform on the purchase and sale agreement. It may be that any costs above will be deferred until such time that the Company has enough Series with assets to justify the costs of such expenses and where the Company can take advantage of economies of scale. The Company has also budgeted for miscellaneous costs not foreseen.
Upon the Closing of the Offering, proceeds from the sale of the Interests will be distributed to the account of the Series. The Series will then perform on the purchase and sale agreement (“PSA”). As the Series makes payments to the Manager, the Manager will be divested of its interest in the Series COM-AF157 and the Series will own the Series COM¬AF157. Upon full payment under the terms of the PSA, the Series COM¬AF157 will be owned by the Series and not subject to any liens or encumbrances.
In addition to the costs of acquiring the Underlying Asset, proceeds from the Offering will be used to pay (i) approximately $3,000 of Offering Expenses (including but not limited to the items described in the table above), in part which will be paid to the Manager and its affiliates, except as to the extent that Offering Expenses are lower than anticipated, any overage will be maintained in an operating account for future Operating Expenses, and (ii) $2,500 to the Manager as consideration for assisting in the sourcing of the Series COM-AF157. See “Plan of Distribution and Subscription Procedure – Fees and Expenses” for additional information.
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| Table of Contents |
The allocation of the net proceeds of this Offering set forth above represents our intentions based upon our current plans and assumptions regarding industry and general economic conditions, our future revenues and expenditures. The amounts and timing of our actual expenditures will depend upon numerous factors, including market conditions, cash generated by our operations, business developments, and related rate of growth. The Manager reserves the right to modify the use of proceeds based on the factors set forth above. Neither the Company nor the Series are expected to keep any of the proceeds from the Offering. In the event that less than the Maximum Series COM-AF157 Interests are sold in connection with this Offering, the Manager may pay, and not seek reimbursement for, Offering Expenses and Acquisition Expenses and may waive the Sourcing Fee.
DESCRIPTION OF THE SERIES COM AMAZING FANTASY #15
Investment Overview
| • | Upon completion of the Series COM-AF157 Offering, Series COM-AF157 will purchase a 1962 Amazing Fantasy #15 CGC FN/VF 7.0 comic book as the underlying asset for Series COM-AF157 (the “Series 1962 Amazing Fantasy #15” or the “Underlying Asset” with respect to Series COM-AF157, as applicable), the specifications of which are set forth below. |
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| • | Amazing Fantasy was an American comic book anthology series published by Marvel Comics from 1961 through 1962. The final Issue, Amazing Fantasy #15, introduced the popular superhero character Spider-Man. |
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| • | The Underlying Asset is an original copy of the Amazing Fantasy #15 comic book with a CGC grade of FN/VF 7.0. |
Asset Description
Overview & Authentication
| • | The Underlying Asset is the fifteenth comic book in the Amazing Fantasy series and was published by Marvel Comics on August 10, 1962. |
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| • | The Underlying Asset is the issue in which the characters Spider-Man (Peter Parker), Uncle Ben and Aunt May made their first appearance. |
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| • | The Underlying Asset has a CGC grade of FN/VF 7.0. |
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| • | The Underlying Asset is QES Certified: “Criteria met: impressive prime focal area + sharp right edge with no chipping + deep color strike (red, black & blue)”. |
Notable Features
| • | The Underlying Asset has cream to off-white pages. |
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| • | The cover of the Underlying Asset features Spider-Man flying in between buildings. |
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| Table of Contents |
Notable Defects
| • | The Underlying Asset shows signs of wear consistent with its age and condition grade from CGC. |
Details
| Series 1962 Amazing Fantasy #15 | |
| Title | Amazing Fantasy #15 |
| Key Issue | Origin & 1st appearance of Spider-Man (Peter Parker).1st appearance of Uncle Ben & Aunt May. |
| Publisher | Marvel |
| Issue Date | August 1962 |
| Cover Price | $0.12 |
| Editing | Stan Lee |
| Script | Stan Lee |
| Pencils | Jack Kirby, Steve Ditko |
| Inks | Steve Ditko |
| Colors | Stan Goldberg |
| Letters | Artie Simek, typeset |
| Authentication | CGC |
| Grade | 7.0 (Universal) |
| Grade Date | August 1, 2013 |
| CGC Certification Number | 1163723001 |
Depreciation
The Company treats assets as collectible and therefore will not depreciate or amortize the Series COM Amazing Fantasy #15 going forward.
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| Table of Contents |
USE OF PROCEEDS – Series ART-BHERO
We estimate that the gross proceeds of the Series MTG Alpha Benalish Hero Art Offering (including from Series Interests acquired by the Manager) (the “Series ART-BHERO”) will be approximately the amount listed in the Use of Proceeds Table assuming the full amount of the Series Offering is sold, and will be used as follows:
| Uses |
|
| 100% | |
|
|
|
|
|
|
| Asset Cost |
| $ | 39,000 |
|
| Acquisition Expenses (1) |
|
|
|
|
| Offering Expenses |
| $ | 1,000 |
|
| Operating Expenses (estimate) (2) |
|
|
|
|
| --Storage Expenses |
| $ | 200 |
|
| --Insurance Expenses |
| $ | 300 |
|
| --Reserves for Miscellaneous Expenses |
| $ | 375 |
|
| --Transfer Agent Fee s |
| $ | 125 |
|
| Sourcing Fee (3) |
| $ | 1,000 |
|
| (assuming the Manager acquires 2% of Interests) |
|
|
|
|
| Management Fee |
| $ | - |
|
| Disposition Fee |
| $ | - |
|
| Total Fees and Expenses |
| $ | 3,000 |
|
|
|
|
|
|
|
| Total Proceeds |
| $ | 42,000 |
|
(1) The Manager incurred approximately $100 in Acquisition Expenses in connection with the procurement of the Series ART Alpha Benalish Hero Art through June 29 , 2020. The Manager will not seek reimbursement for these expenses from Series ART- BHERO .
(2) Amounts reflect estimates that may be incurred by or on behalf of Series ART- BHERO by the Manager or Series ART- BHERO directly.
(3) The Manager is entitled to a Sourcing Fee of up to five percent (5%) of the purchase price of an applicable underlying asset. The Manager may elect to receive a reduced Sourcing Fee in connection with an Offering. See “Plan of Distribution and Subscription Procedure – Fees and Expenses” for additional information.
Our Manager acquired the Series ART - BHERO from the Asset Seller for a total cost of $ 39 ,000, which was paid in cash by the Manager. The original basis of the Series ART-BHERO is $ 39 ,000 plus the Manager incurred additional holding costs (Acquisition Costs), for which the Manager is not seeking reimbursement. The Company has entered into a purchase and sale agreement (“PSA”) with the Manager for the purchase of the Series ART-BHERO for $ 39 , 0 00 (the “Asset Cost”). The Manager may at any time during the term of the Offering, elect to acquire Series Interests by way of cancelation of such amount owed to it by the Company under this Agreement equivalent to the value of the Series Interests acquired. The Manager, separate from its original ownership and purchase of the ART-BHERO , plans to maintain at least 2% of the Series as described herein. “Asset Seller(s)” means an individual(s), dealer or auction company, which owns an Underlying Asset prior to i) a purchase of an Underlying Asset by the Company in advance of a potential offering or ii) the closing of an offering from which proceeds are used to acquire the Underlying Asset. In the case of the Series ART-BHERO , the Asset Seller is not an affiliate of the Company, the Manager or any of their respective officers or directors.
T he Manager will continue to own the asset until such time that a.) the full $ 4 2,000 is raised from purchasers in the Offering or through a contribution of the Manager’s interest in the asset in exchange for Series Interests of equivalent value, at which time title will completely be relinquished to the Series or b.) the Offering is closed at which time the title still will be relinquished to the Series, but the Manager will receive any unsold Series Interests.
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| Table of Contents |
The Manager has incurred certain expenses to date which are covered as part of the purchase and sale agreement, however, is not seeking reimbursement of those costs. The Company expects to incur additional expenses related to the Series ART-BHERO and has accounted for such costs based on a minimum raise of $ 42 ,000. It is expected that the Manager, or the Company, on behalf of the Series, will not obtain most of the services (such as insurance) listed above until the Offering amount is raised and the Series can substantially perform on the purchase and sale agreement. It may be that any costs above will be deferred until such time that the Company has enough Series with assets to justify the costs of such expenses and where the Company can take advantage of economies of scale. The Company has also budgeted for miscellaneous costs not foreseen.
Upon the Closing of the Offering, proceeds from the sale of the Interests will be distributed to the account of the Series. The Series will then perform on the purchase and sale agreement (“PSA”). As the Series makes payments to the Manager, the Manager will be divested of its interest in the Series ART-BHERO and the Series will own the Series ART-BHERO . Upon full payment under the terms of the PSA, the Series ART-BHERO will be owned by the Series and not subject to any liens or encumbrances.
In addition to the costs of acquiring the Underlying Asset, proceeds from the Offering will be used to pay (i) approximately $ 1 ,000 of Offering Expenses (including but not limited to the items described in the table above), in part which will be paid to the Manager and its affiliates, except as to the extent that Offering Expenses are lower than anticipated, any overage will be maintained in an operating account for future Operating Expenses, and (ii) $ 1 , 0 00 to the Manager as consideration for assisting in the sourcing of the Series ART-BHERO . See “Plan of Distribution and Subscription Procedure – Fees and Expenses” for additional information.
The allocation of the net proceeds of this Offering set forth above represents our intentions based upon our current plans and assumptions regarding industry and general economic conditions, our future revenues and expenditures. The amounts and timing of our actual expenditures will depend upon numerous factors, including market conditions, cash generated by our operations, business developments, and related rate of growth. The Manager reserves the right to modify the use of proceeds based on the factors set forth above. Neither the Company nor the Series are expected to keep any of the proceeds from the Offering. In the event that less than the Maximum Series ART-BHERO Interests are sold in connection with this Offering, the Manager may pay, and not seek reimbursement for, Offering Expenses and Acquisition Expenses and may waive the Sourcing Fee.
DESCRIPTION OF THE SERIES MTG ALPHA BENALISH HERO ART
Investment Overview
| · | Upon completion of the Series ART-BHERO Offering, Series ART-BHERO will purchase the Magic: The Gathering Alpha Benalish Hero Art underlying asset for Series ART-BHERO (the “Series MTG Alpha Benalish Hero Art” or the “Underlying Asset” with respect to Series ART-BHERO, as applicable), the specifications of which are set forth below. |
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| · | The Underlying Asset is an original painting by Douglas Shuler depicting a female warrior in black armor on a yellow background, which original painting is depicted on the Magic: The Gathering Benalish Hero trading card. |
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| · | We believe that there is a growing demand for Douglas Shuler's art, specifically his Alpha art produced in 1993. We believe less than 175 pieces of art from the original Alpha set exist today. The majority of those pieces are in the private collections of 3 prolific collectors. |
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Asset Description
Overview & Authentication
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| · | The Underlying Asset was purchased from a private collector who acquired it in a private transaction. |
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| · | The Underlying Asset is unframed. |
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| Notable Features | ||
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| · | The Underlying Asset is an original piece for one of the very first Magic: The Gathering cards ever printed. |
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| Notable Defects | ||
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| · | The Underlying Asset displays minor damage in the upper left-hand corner, approximately 0.5” square in size. The edges show minor chipping from the removal of masking tape by the artist. There is a small stain on the bottom left corner approximately 0.5” wide by 1” tall. |
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| · | The Underlying Asset is otherwise in good condition, commensurate with storage in a temperature and humidity-controlled environment. |
Details
| Series MTG Alpha Benalish Hero Art | |
| Artist | Douglas Shuler |
| Artwork | Benalish Hero |
| Size | 7” x 5.5” |
| Medium | |
| Creation year | 1993 |
| Purchased from | Private seller |
| Purchased for | $39,000 |
| Year purchased | 2020 |
Depreciation
The Company treats assets as collectible and therefore will not depreciate or amortize the Series ART-BHERO going forward.
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USE OF PROCEEDS – Series COM-FF160
We estimate that the gross proceeds of the Series Fantastic Four #1 Offering (including from Series Interests acquired by the Manager) (the “Series COM -FF160”) will be approximately the amount listed in the Use of Proceeds Table assuming the full amount of the Series Offering is sold, and will be used as follows:
| Uses |
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| 100% | |
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| Asset Cost |
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| $ | 29,000 |
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| Acquisition Expenses (1) |
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| Offering Expenses |
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| $ | 1,000 |
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| Operating Expenses (estimate) (2) |
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| --Storage Expenses |
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| $ | 200 |
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| --Insurance Expenses |
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| $ | 300 |
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| --Reserves for Miscellaneous Expenses |
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| $ | 375 |
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| --Transfer Agent Fees |
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| $ | 125 |
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| Sourcing Fee (3) |
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| $ | 1,000 |
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| (assuming the Manager acquires 2% of Interests) |
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| Management Fee |
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| $ | - |
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| Disposition Fee |
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| $ | - |
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| Total Fees and Expenses |
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| $ | 3,000 |
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| Total Proceeds |
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| $ | 3 2,000 |
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(1) The Manager incurred approximately $200 in Acquisition Expenses in connection with the procurement of the Series Fantastic Four #1 Offering through June 29, 2020. The Manager will not seek reimbursement for these expenses from Series COM -FF160 .
(2) Amounts reflect estimates that may be incurred by or on behalf of Series COM -FF160 by the Manager or Series COM -FF160 directly.
(3) The Manager is entitled to a Sourcing Fee of up to five percent (5%) of the purchase price of an applicable underlying asset. The Manager may elect to receive a reduced Sourcing Fee in connection with an Offering. See “Plan of Distribution and Subscription Procedure – Fees and Expenses” for additional information.
Our Manager acquired the Series COM -FF160 from the Asset Seller for a total cost of $ 2 9,000, which was paid in cash by the Manager. The original basis of the Series COM -FF160 is $ 2 9,000 plus the Manager incurred additional holding costs (Acquisition Costs), for which the Manager is not seeking reimbursement. The Company has entered into a purchase and sale agreement (“PSA”) with the Manager for the purchase of the Series COM -FF160 for $ 2 9,000 (the “Asset Cost”). The Manager may at any time during the term of the Offering, elect to acquire Series Interests by way of cancelation of such amount owed to it by the Company under this Agreement equivalent to the value of the Series Interests acquired. The Manager, separate from its original ownership and purchase of the COM-FF160 , plans to maintain at least 2% of the Series as described herein. “Asset Seller(s)” means an individual(s), dealer or auction company, which owns an Underlying Asset prior to i) a purchase of an Underlying Asset by the Company in advance of a potential offering or ii) the closing of an offering from which proceeds are used to acquire the Underlying Asset. In the case of the Series COM -FF160 , the Asset Seller is not an affiliate of the Company, the Manager or any of their respective officers or directors.
The Manager will continue to own the asset until such time that a.) the full $ 3 2,000 is raised from purchasers in the Offering or through a contribution of the Manager’s interest in the asset in exchange for Series Interests of equivalent value, at which time title will completely be relinquished to the Series or b.) the Offering is closed at which time the title still will be relinquished to the Series, but the Manager will receive any unsold Series Interests.
The Manager has incurred certain expenses to date which are covered as part of the purchase and sale agreement, however, is not seeking reimbursement of those costs. The Company expects to incur additional expenses related to the Series COM -FF160 and has accounted for such costs based on a minimum raise of $ 3 2,000. It is expected that the Manager, or the Company, on behalf of the Series, will not obtain most of the services (such as insurance) listed above until the Offering amount is raised and the Series can substantially perform on the purchase and sale agreement. It may be that any costs above will be deferred until such time that the Company has enough Series with assets to justify the costs of such expenses and where the Company can take advantage of economies of scale. The Company has also budgeted for miscellaneous costs not foreseen.
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Upon the Closing of the Offering, proceeds from the sale of the Interests will be distributed to the account of the Series. The Series will then perform on the purchase and sale agreement (“PSA”). As the Series makes payments to the Manager, the Manager will be divested of its interest in the Series COM -FF160 and the Series will own the Series COM -FF160 . Upon full payment under the terms of the PSA, the Series COM -FF160 will be owned by the Series and not subject to any liens or encumbrances.
In addition to the costs of acquiring the Underlying Asset, proceeds from the Offering will be used to pay (i) approximately $1,000 of Offering Expenses (including but not limited to the items described in the table above), in part which will be paid to the Manager and its affiliates, except as to the extent that Offering Expenses are lower than anticipated, any overage will be maintained in an operating account for future Operating Expenses, and (ii) $1,000 to the Manager as consideration for assisting in the sourcing of the Series COM -FF160 . See “Plan of Distribution and Subscription Procedure – Fees and Expenses” for additional information.
The allocation of the net proceeds of this Offering set forth above represents our intentions based upon our current plans and assumptions regarding industry and general economic conditions, our future revenues and expenditures. The amounts and timing of our actual expenditures will depend upon numerous factors, including market conditions, cash generated by our operations, business developments, and related rate of growth. The Manager reserves the right to modify the use of proceeds based on the factors set forth above. Neither the Company nor the Series are expected to keep any of the proceeds from the Offering. In the event that less than the Maximum Series COM -FF160 Interests are sold in connection with this Offering, the Manager may pay, and not seek reimbursement for, Offering Expenses and Acquisition Expenses and may waive the Sourcing Fee.
DESCRIPTION OF THE SERIES 1961 FANTASTIC FOUR #1
Investment Overview
| · | Upon completion of the Series COM-FF160 Offering, Series COM-FF160 will purchase a 1961 Fantastic Four #1 CGC FN 6.0 comic book as the Underlying Asset for Series COM-FF160 (The “Series Fantastic Four #1” or the “Underlying Asset” with respect to Series COM-FF160, as applicable), the specifications of which are set forth below. |
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| · | The Fantastic Four are a fictional superhero team in the Marvel Comics universe created by artist/co-plotter Jack Kirby and editor/co-plotter Stan Lee. In addition to comic books, The Fantastic Four has appeared in various forms of media including animated series, video games, feature films and merchandise. |
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| · | The Underlying Asset has a CGC grade of FN 6.0. |
Asset Description
Overview & Authentication
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| · | The Underlying Asset is the first comic book in The Fantastic Four series and was published by Marvel Comics on November, 1961. |
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| · | The Underlying Asset is the issue in which the characters Mister Fantastic (Reed Richards), Invisible Girl (Susan "Sue" Storm), Human Torch (Jonathan "Johnny" Storm), and Thing (Benjamin "Ben" Grimm) made their first appearances. |
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| · | The Underlying Asset has a CGC grade of FN 6.0. |
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| · | The Underlying Asset is in the top 10.5% of CGC graded copies (14.0% of CGC Universal-graded copies) of Fantastic Four #1. Out of 1,583 CGC Universal-graded copies, it is one of 54 graded at CGC 6.0. |
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Notable Features
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| · | The Underlying Asset has off-white to white pages. |
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| · | The cover of the Underlying Asset features Mister Fantastic, Invisible Girl, Human Torch, and Thing battling Giganto (servant of Mole Man) on city streets. |
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| · | The Fantastic Four is Marvel’s first superhero team. |
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| Notable Defects | ||
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| · | The Underlying Asset shows signs of wear consistent with its age and condition grade from CGC. |
Details
| Series 1961 Fantastic Four #1 | |
| Title | Fantastic Four #1 |
| Key Issue | Origin & 1st appearance of Mister Fantastic (Reed Richards), Invisible Girl (Susan "Sue" Storm), Human Torch (Jonathan "Johnny" Storm), and Thing (Benjamin "Ben" Grimm).1st appearance of Mole Man & Giganto. |
| Publisher | Marvel |
| Issue Date | November 1961 |
| Cover Price | $0.10 |
| Editing | Stan Lee |
| Pencils | Jack Kirby |
| Inks | George Klein & Christopher Rule |
| Colors | Stan Goldberg |
| Letters | Artie Simek |
| Authentication | CGC |
| Grade | 6.0 (Universal) |
| Grade Date | October 8, 2012 |
| CGC Certification Number | 1109853001 |
Depreciation
The Company treats assets as collectible and therefore will not depreciate or amortize the Series COM-FF160 going forward.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
We provide investment opportunities in investment grade vintage comic books, collectible cards and fantasy art to Investors through the Platform, financed through various methods including, loans from the Manager or other third-parties, if we purchase an Underlying Asset prior to the Closing of an Offering, and through purchase option agreements negotiated with third-parties or affiliates, if we finance the purchase of an Underlying Asset with the proceeds of an Offering. Additional information can be found below and in the Master Series Table.
We are devoting substantially all our efforts to establishing our business and planned principal operations only commenced in late 2018. As such and because of the start-up nature of the Company’s and the Manager’s business the reported financial information herein will likely not be indicative of future operating results or operating conditions. Because of our corporate structure, we are in large part reliant on the Manager and its employees to grow and support our business. There are a number of key factors that will have large potential impacts on our operating results going forward including the Managers ability to:
| • | continue to source high quality vintage comic books, collectible cards and fantasy art at reasonable prices to securitize through the Platform; |
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| • | market the Platform and the Offerings in individual series of the Company and attract investors to the Platform to acquire the interests issued by series of the Company; |
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| • | continue to develop the Platform and provide the information and technology infrastructure to support the issuance of interests in series of the Company; and |
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| • | find operating partners to manage the collection of vintage comic books, collectible cards and fantasy art at a decreasing marginal cost per vintage comic book, collectible card and fantasy art piece. |
We have not yet generated any revenues and do not anticipate doing so until 2021.
At the time of this filing, all of the Series designated as closed in the Master Series Table have commenced operations, are capitalized and have assets and various Series have liabilities. All assets and liabilities related to the Series described in the Master Series Table will be the responsibility of the Series from the time of the Closing of the respective Offerings. All other Series have not had a Closing, but we have, or are in the process of launching these and subsequent offerings for additional series.
For the Period Ended December 31, 2019
Operating Results
Revenues are generated at the Series level. As of June 29, 2020, the Series has not generated any revenue.
From inception, the Company and the Series have financed their business activities through capital contributions from the Manager to the Company and individual Series. The Company and each Series expect to continue to have access to ample capital financing from the Manager going forward. Until such time as the Series’ have the capacity to generate cash flows from operations, the Manager may cover any deficits by accruing expenses on behalf of the Company pursuant to the Management Agreement, through additional capital contributions or through the issuance of additional Interests in any individual Series. In addition, parts of the proceeds of future offerings may be used to create reserves for future Operating Expenses for individual Series at the sole discretion of the Manager.
As described, the Manager on behalf of the Company, including the Series MTG-ABL90, incurred $44,699.32 in operating expenses related to storage, transportation, insurance, maintenance and professional services fees associated with the Series asset we acquired, which expenses shall be accrued by the Company pursuant to the Management Agreement. Each Series of the Company will be responsible for its own operating expenses, such as storage, insurance or maintenance beginning on the closing date of the offering for such Series of interests.
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Liquidity and Capital Resources
As of December 31, 2019, the Company had $9,435 in cash or cash equivalents and the Company had no financial obligations.
On July 1, 2019, we entered into a Purchase and Sale Agreement to acquire the MTG-ABL90 for $79,000, which agreement provides that the Company shall pay the purchase price set forth in such agreement at the closing of the Offering of Interests in Series MTG-ABL90. On November 1, 2019, the Company closed this Offering and it is reflected on our balance sheet as of December 31, 2019.
Plan of Operations
At the time of the qualification of this offering statement, Series MTG-ABL90 has commenced its operations, and is capitalized. We intend for additional Series to start operations at the time of the Closing of such Series’ Offering. All assets and liabilities related to a Series that have been capitalized or incurred to date and will be capitalized or incurred until the Closing are the responsibility of the Company or the Manager and responsibility for any assets or liabilities related to the applicable Series will not transfer to such Series until such time as a Closing for such Series has occurred.
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The Company plans to launch approximately 10 to 15 additional offerings in the next 12 months. The proceeds from any offerings closed during the next 12 months will be used to acquire additional vintage comic books, collectible cards and fantasy art pieces, which we anticipate will enable the Company to reduce Operating Expenses for each series as we negotiate better contracts for storage, insurance and other Operating Expenses with a larger collection of assets. However, it should be noted that the Company may not launch enough Series or have enough Underlying Assets to realize economies of scale. Despite the Company’s best intentions, it is possible, and very likely, that the Company may not be able to launch as many offerings as it intends and thus, will not be able to realize reduced Operating Expenses per Series through economies of scale. If the Company, through, multiple Series, is able to purchase additional assets, then it is expected that for the next 12 months and beyond, such Series, collectively, will be able to manage the costs associated with maintaining the individual Series and their individual assets. We believe the Series will incur costs related to the storage and insurance of the assets. We believe, collectively, we will have sufficient cash through offerings to cover such costs until such time as individual assets are able to generate revenue. To this end, if the individual Series are unable to pay such costs, the Series and their assets may be exposed to liabilities such as not being insured and not being in a secured location. Through the Manager, the principals of the Manager are committed to providing capital to the individual Series in the event such a shortfall were to occur and to covering the costs of insurance and otherwise as may be necessary to secure and protect the assets of such Series. This commitment is not in writing.
We also intend to develop Fan Club Experiences (as described in “Description of the Business – Business of the Company” section of the Company’s Offering Circular), allowing Investors to enjoy the collection of vintage comic books, collectible cards and fantasy art pieces acquired by the Company through events, conventions, museums and other programs, which we anticipate will enable the Underlying Asset to generate revenues for the series to cover, in whole or in part, the ongoing post-closing Operating Expenses.
We do not anticipate generating any revenues in fiscal year 2019 from Fan Club Experiences to cover any of the Operating Expenses for any Series of Interests closed in fiscal year 2019 since we do not intend on launching such experiences until 2021. See the “Description of the Business – Operating Expenses” section of the Company’s Offering Circular for additional information regarding the payment of Operating Expenses.
PLAN OF DISTRIBUTION AND SUBSCRIPTION PROCEDURE
Plan of Distribution
We are managed by Mythic Markets, Inc. (“Mythic Markets” or the “Manager”), a Delaware corporation incorporated in 2018. Mythic Markets owns and operates a web-based (desktop & mobile) investment platform called Mythic Markets (the Mythic Markets platform and any successor platform used by the Company for the offer and sale of interests, the “Mythic Markets Platform”), through which Investors may indirectly invest, through a series of the Company’s interests, in vintage comic book, collectible card, and fantasy art opportunities that have been historically difficult to access for many market participants. Through the use of the Mythic Markets Platform, Investors can browse and screen the potential investments and sign legal documents electronically. We intend to distribute the Interests exclusively through the Mythic Markets Platform. Neither Mythic Markets, Inc. nor any other affiliated entity involved in the offer and sale of the Interests is a member firm of the Financial Industry Regulatory Authority, Inc., or FINRA, and no person associated with us will be deemed to be a broker solely by reason of his or her participation in the sale of the Interests.
The Mythic Markets platform refers to both the investment platform and potential future trading platform. The investment platform has been fully developed and launched in conjunction with the Series Alpha Black Lotus offering. To participate, investors must complete an application on the Mythic Markets platform to subscribe.
Each of the Offerings is being conducted under Regulation A under the Securities Act of 1933, as amended (the “Securities Act”) and therefore, only offered and sold to “qualified purchasers.” For further details on the suitability requirements an Investor must meet in order to participate in this Offering, see “Plan of Distribution and Subscription Procedure – Investor Suitability Standards”. As a Tier 2 offering pursuant to Regulation A under the Securities Act, these Offerings will be exempt from state law “Blue Sky” registration requirements, subject to meeting certain state filing requirements and complying with certain antifraud provisions, to the extent that our Interests are offered and sold only to “qualified purchasers” or at a time when our Interests are listed on a national securities exchange. It is anticipated that sales of securities will only be made in states where the Broker is registered.
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The initial offering price for each Series of Interests (the “Purchase Price”) was determined by the Manager and is equal to the aggregate of (i) the purchase price of the Underlying Asset, (ii) the Offering Expenses, (iii) the Acquisition Expenses, and (iv) the Sourcing Fee (in each case as described below) divided by the number of membership Interests sold in each Offering as described in the section “Use of Proceeds- All Series” above.
There will be different closing dates for each Offering. The Closing of an Offering will occur on the earliest to occur of (i) the date subscriptions for the Maximum Interests for a Series have been accepted or (ii) a date determined by the Manager in its sole discretion, provided that subscriptions for the Minimum Interests of such Series have been accepted. If Closing has not occurred, the Offering shall be terminated upon (i) the date which is one year from the date this Offering Circular is qualified by the U.S. Securities and Exchange Commission (the “Commission”) which period may be extended with respect to a particular Series by an additional six months by the Manager in its sole discretion, or (ii) any date on which the Manager elects to terminate the Offering in its sole discretion, such date not to exceed the date which is 18 months from the date the Offering Circular or amendment thereto, as applicable, is qualified by the SEC.
This Offering Circular does not constitute an offer or sale of any Series of Interests outside of the U.S.
Those persons who want to invest in the Interests must sign a Subscription Agreement, which will contain representations, warranties, covenants, and conditions customary for private placement investments in limited liability companies; see “How to Subscribe” below for further details. Copies of the form of Subscription Agreement for each Series are attached starting with Exhibit 4.1 and onwards.
The Manager, and not the Company, will pay all of the expenses incurred in these Offerings that are not covered by the Sourcing Fee, Offering Expenses or Acquisition Expenses, including fees to legal counsel, but excluding fees for counsel or other advisors to the Investors and fees associated with the filing of periodic reports with the Commission and future blue sky filings with state securities departments, as applicable. Any Investor desiring to engage separate legal counsel or other professional advisors in connection with an Offering will be responsible for the fees and costs of such separate representation.
The Manager shall ensure that certain conditions are met before an Offering is closed, including (1) verification of the status of the Asset Seller of the applicable Underlying Asset, and agreements related to the asset sale, (2) verification of the condition of the Underlying Asset, and (3) other specific market conditions that must be satisfied in the Manager’s sole discretion. If these conditions are not met, investors will be promptly refunded their investment.
From time to time, the Manager may promote the Mythic Markets platform, or certain Series, by distributing Interests in Series for less than fair value or for no specific value. The Manager’s distribution of such Interests will generally serve as an incentive for third party promotion of the Mythic Markets platform or certain Series.
Investor Suitability Standards
The Interests are being offered and sold only to “qualified purchasers” (as defined in Regulation A under the Securities Act). “Qualified purchasers” include: (i) “accredited investors” under Rule 501(a) of Regulation D and (ii) all other Investors so long as their investment in any of the interests of the Company (in connection with this Series or any other series offered under Regulation A) does not represent more than 10% of the greater of their annual income or net worth (for natural persons), or 10% of the greater of annual revenue or net assets at fiscal year-end (for non-natural persons). We reserve the right to reject any Investor’s subscription in whole or in part for any reason, including if we determine in our sole and absolute discretion that such Investor is not a “qualified purchaser” for purposes of Regulation A.
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For an individual potential Investor to be an “accredited investor” for purposes of satisfying one of the tests in the “qualified purchaser” definition, the Investor must be a natural person who has:
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| 1. | an individual net worth, or joint net worth with the person’s spouse, that exceeds $1,000,000 at the time of the purchase, excluding the value of the primary residence of such person and the mortgage on that primary residence (to the extent not underwater), but including the amount of debt that exceeds the value of that residence and including any increase in debt on that residence within the prior 60 days, other than as a result of the acquisition of that primary residence; or |
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| 2. | earned income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year. |
If the Investor is not a natural person, different standards apply. See Rule 501 of Regulation D for more details. For purposes of determining whether a potential Investor is a “qualified purchaser,” annual income and net worth should be calculated as provided in the “accredited investor” definition under Rule 501 of Regulation D. In particular, net worth in all cases should be calculated excluding the value of an Investor’s home, home furnishings and automobiles.
The Interests will not be offered or sold to prospective Investors subject to the Employee Retirement Income Security Act of 1974 and regulations thereunder, as amended (“ERISA”).
If you live outside the United States, it is your responsibility to fully observe the laws of any relevant territory or jurisdiction outside the United States in connection with any purchase, including obtaining required governmental or other consent and observing any other required legal or other formalities.
Our Manager and the Broker, in its capacity as broker of record for these Offerings, will be permitted to make a determination that the subscribers of Interests in each Offering are qualified purchasers in reliance on the information and representations provided by the subscriber regarding the subscriber’s financial situation. Before making any representation that your investment does not exceed applicable federal thresholds, we encourage you to review Rule 251(d)(2)(i)(C) of Regulation A. For general information on investing, we encourage you to refer to www.investor.gov.
An investment in our Interests may involve significant risks. Only Investors who can bear the economic risk of the investment for an indefinite period of time and the loss of their entire investment should invest in the Interests. See “Risk Factors.”
Minimum and Maximum Investment
The minimum subscription by an Investor in an Offering is one (1) Interest and the maximum subscription by any Investor (other than the Manager) in any Offering is for Interests representing 25% of the total Interests of the Series, where such maximum subscription limit may be waived for an Investor by the Manager in its sole discretion. Such limits do not apply to the Manager and/or affiliates of the Manager. The Manager and/or its affiliates must purchase a minimum of 2% of Interests of each Series at the Closing of its each Offering. The Manager may purchase greater than 2% of Interests of any Series at the applicable Closing, in its sole discretion.
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Broker
North Capital Private Securities Corporation is acting as our executing broker in connection with the sale of our interests pursuant to an amended and restated solicitation agreement, or the Solicitation Agreement. It is understood that the Broker does not and will not solicit purchases of Interests or make any recommendations regarding the Interests to prospective investors. The Company will be responsible to for marketing the Interests and will refer potential investors to the Mythic Markets Platform, which is powered by certain platform technology that our manager has licensed from the Broker. There, potential investors will be able to review this offering circular and all subscription documents and purchase securities in each offering. The Broker will have access to the subscription information provided by potential investors and will serve as broker of record for each offering by processing transactions by potential investors through the platform technology and providing investor qualification services (e.g. Know Your Customer and Anti Money Laundering checks). The Broker will not actively market or solicit for investors on behalf of the Company or its Series.
The Broker is a broker-dealer registered with the Commission and a member of FINRA and SIPC and will be registered in each state where each offering and sale of interests will occur, prior to the launch of each offering. The Broker will receive a Brokerage Fee but will not purchase any interests and, therefore, will not be eligible to receive any discounts, commissions or any underwriting or finder’s fees in connection with any offering.
In addition to the Brokerage Fee described below, if, within six (6) months after the termination of Solicitation Agreement, we complete any private financing of equity, equity-linked or debt or other capital raising activity (other than the exercise by any person or entity of any options, warrants or other convertible securities) with any investors in any offering that were identified by the Broker, we will pay the Broker upon the closing of such financing one percent (1%) of the amount of such investor’s investment in such offering.
Pursuant to the Solicitation Agreement, we agreed that we will not engage any person to perform services similar to those provided by the Broker under the Solicitation Agreement without the Broker’s written consent.
The amount recoverable under any claim by us against the Broker is limited to the aggregate of fees payable by us to the Broker under the Solicitation Agreement. We agreed to indemnify the Broker and each of its affiliates and their respective directors, officers and employees for any loss, claim, damage, expense or liability incurred by the other (including reasonable attorneys’ fees and other expenses in investigating, defending against or appearing as a third-party witness in connection with any action or proceeding) in any third party claim arising out of a material breach (or alleged breach) by us of any provision of the Solicitation Agreement, or as a result of a material violation of any law or regulation.
The Solicitation Agreement may be terminated by either party at any time upon the provision of sixty days prior written notice thereof to the other.
Transfer Agent
The transfer agent of the Series being offered hereby is West Coast Stock Transfer.
Escrow Agent
The Escrow Agent is North Capital Private Securities Corporation, who has been appointed as escrow agent for each offering pursuant to escrow agreements among the Broker, the Escrow Agent, and our company, on behalf of each series. Copies of the escrow agreements for each series are attached starting with Exhibit 8.1 and onwards.
Each series will generally be responsible for fees due to the Escrow Agent, which are categorized as part of the Offering Expenses described in “—Fees and Expenses” below; however, our manager has agreed to pay and not be reimbursed for fees due to the Escrow Agent.
We agreed to indemnify the Escrow Agent and each director, officer, employee, attorney, agent and affiliate of the Escrow Agent against any and all actions, claims (whether or not valid), losses, damages, liabilities, costs and expenses of any kind or nature whatsoever (including without limitation reasonable attorneys’ fees, costs and expenses) in any third party claim arising from or in connection with the negotiation, preparation, execution, performance or failure of performance of the escrow agreements or any transactions contemplated therein; provided, however, that no person shall have the right to be indemnified for any liability finally determined by a court of competent jurisdiction, subject to no further appeal, to have resulted from the gross negligence or willful misconduct of such person.
Fees and Expenses
Offering Expenses
Each Series of Interests will generally be responsible for certain fees, costs and expenses incurred in connection with the offering of the Interests associated with that Series (the “Offering Expenses”). Offering Expenses consist of legal, accounting, escrow, underwriting, filing, banking, compliance costs, and brokerage fees as applicable, related to a specific offering (and exclude ongoing costs described in Operating Expenses).
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As compensation for providing the services described in the Services Agreement to us in connection with each Offering, the Broker will receive certain brokerage fees beginning with and following the Series MTG-94BOX. The fees paid to the Broker consist of three parts, which will be referred to as the “Initial Fee”, the “Series Fee”, and “Secondary Series Fee”, together, the “Brokerage Fees”. The Initial Fee consists of a 1% commission paid on gross proceeds raised through all series offerings. The Series Fee consists of a 7.5% commission on gross proceeds in this offering for all series until the Broker has received $10,000 in fees. The Series Fee is paid by our manager without reimbursement by the company. Following receipt of the Series Fee by the Broker, the Broker will then receive a Secondary Series Fee consisting of a 7.5% commission on the gross proceeds for each series until the Broker has received up to $1,000. Notwithstanding the foregoing, the Broker will not receive any fee on funds raised from the sale of Interests to our manager, its affiliates or the asset sellers. The Broker shall also receive reimbursements for out-of-pocket expenses incurred in performance of the services under the Services Agreement. These reimbursements are not to exceed $10,000 in the aggregate in connection with the offerings.
Our manager will be responsible for payment of the Series Fee, while each Series of Interests will be responsible for paying the Initial Fee and the Secondary Series Fee to the Broker in connection with the sale of interests in such series. Our manager will not be reimbursed for payment of the Secondary Series Fees. The Brokerage Fee will be payable immediately upon the closing of each offering from the proceeds of such offering.
In addition to the Brokerage Fees, our manager pays North Capital Investment Technology, the parent company of the Broker, a monthly administrative fee of $500 for technology tools to facilitate our company’s offerings of the interests. Our manager will also pay North Capital Investment Technology a one-time installation and setup fee of $2,500. This fee is capped at $100,000 for the offerings in the aggregate, regardless of the number of series. The technology fees with respect to our company will be paid by our manager to North Capital Investment Technology.
The Broker will monitor all compensation, from any source, and will ensure that its total compensation for each offering, and all offerings, does not exceed 8% of the total offering proceeds in the aggregate.
Acquisition Expenses
Each Series of Interests will be responsible for any and all fees, costs and expenses incurred in connection with the evaluation, discovery, investigation, development and acquisition of the Underlying Asset related to such series incurred prior to the Closing, including brokerage and sales fees and commissions (but excluding the Brokerage Fee), appraisal fees, research fees, transfer taxes, third party industry and due diligence experts, bank fees and interest (if the Underlying Asset was acquired using debt prior to completion of an offering), auction house fees, travel and lodging for inspection purposes, transportation costs to transfer the Underlying Asset from the Asset Seller’s possession to the storage facility or to locations for creation of photography and videography materials (including any insurance required in connection with such transportation) and photography and videography expenses in order to prepare the profile for the Underlying Asset on the Mythic Markets Platform (the “Acquisition Expenses”). The Acquisition Expenses will be payable from the proceeds of each offering.
Sourcing Fee
The Manager is entitled to a Sourcing Fee of up to five percent (5%) of the purchase price of an applicable Underlying Asset as compensation for sourcing each Underlying Asset (the “Sourcing Fee”). The Manager may elect to receive a reduced Sourcing Fee in connection with an Offering.
Additional Information Regarding this Offering Circular
We have not authorized anyone to provide you with information other than as set forth in this Offering Circular. Except as otherwise indicated, all information contained in this Offering Circular is given as of the date of this Offering Circular. Neither the delivery of this Offering Circular nor any sale made hereunder shall under any circumstances create any implication that there has been no change in our affairs since the date hereof.
From time to time, we may provide an “Offering Circular Supplement” that may add, update or change information contained in this Offering Circular. Any statement that we make in this Offering Circular will be modified or superseded by any inconsistent statement made by us in a subsequent Offering Circular Supplement. The Offering Statement we filed with the Commission includes exhibits that provide more detailed descriptions of the matters discussed in this Offering Circular. You should read this Offering Circular and the related exhibits filed with the Commission and any Offering Circular Supplement together with additional information contained in our annual reports, semiannual reports and other reports and information statements that we will file periodically with the Commission.
The Offering Statement and all supplements and reports that we have filed or will file in the future can be read on the Commission website at www.sec.gov or in the legal section for the applicable Underlying Asset on the Mythic Markets Platform. The contents of the Mythic Markets Platform (other than the Offering Statement, this Offering Circular and the Appendices and Exhibits thereto) are not incorporated by reference in or otherwise a part of this Offering Circular.
How to Subscribe
Potential Investors who are “qualified purchasers” may subscribe to purchase Interests in the Series which have not had a Closing, as detailed in the Master Series Table.
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The subscription process for each Offering is a separate process. Any potential Investor wishing to acquire any Series of Interests must:
| 1. | Visit MythicMarkets.com and sign up for a user account on Mythic Markets’ marketplace. |
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| 2. | Verify your email address and Log in to Mythic Markets’ marketplace. |
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| 3. | Click on “Marketplace” which will bring you to the offerings page which will display all the available opportunities to invest. |
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| 4. | Select “Learn more” on the offering you are interested in. |
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| 5. | Carefully read this Offering Circular, and any current supplement, as well as any documents described in the Offering Circular and attached hereto or which you have requested. Consult with your tax, legal and financial advisors to determine whether an investment in any of the Series Interests is suitable for you. |
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| 6. | If you are ready to invest, click the “Buy shares” button on the Offering Details page. |
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| 7. | Complete the KYC process by entering your name, address, date of birth, and social security number. All data is encrypted. |
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| 8. | Enter your banking information for ACH transfer to the offering’s escrow account and confirm your investment. |
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| 9. | Input the number of Non-Voting Interests that you would like to purchase. |
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| 10. | Review and sign the Subscription Agreement that will be sent to you via HelloSign (including the “Investor Qualification and Attestation” attached thereto), which was pre-populated following your completion of certain questions on the Mythic Markets Platform application and if the responses remain accurate and correct, sign the completed Subscription Agreement using electronic signature. Except as otherwise required by law, subscriptions may not be withdrawn or cancelled by subscribers. |
Once the completed Subscription Agreement is signed for a particular Offering, an integrated online payment provider will transfer funds in an amount equal to the purchase price for the relevant Series of Interests you have applied to subscribe for (as set out on the front page of your Subscription Agreement) into the escrow account for the series. The only acceptable method of payment for this offering is by Automated Clearing House (“ACH”). The Escrow Agent will hold such subscription monies in escrow until such time as your Subscription Agreement is either accepted or rejected by the Manager and, if accepted, such further time until you are issued with Series Interests for which you subscribed.
The Manager and the Broker will review the subscription documentation completed and signed by you. You may be asked to provide additional information. The Manager or the Broker will contact you directly if required. We reserve the right to reject any subscriptions, in whole or in part, for any or no reason, and to withdraw an Offering at any time prior to Closing.
Once the review is complete, the Manager will inform you whether or not your application to subscribe for the Series Interests is approved or denied and if approved, the number of Series Interests you are entitled to subscribe for. If your subscription is rejected in whole or in part, then your subscription payments (being the entire amount if your application is rejected in whole or the payments associated with those subscriptions rejected in part) will be refunded promptly, without interest or deduction. The Manager accepts subscriptions on a first-come, first served basis subject to the right to reject or reduce subscriptions.
If all or a part of your subscription in a particular Series is approved, then the number of Series Interests you are entitled to subscribe for will be issued to you upon the Closing. Simultaneously with the issuance of the Series Interests, the subscription monies held by the Escrow Agent in escrow on your behalf will be transferred to the account of the Series as consideration for such Series Interests.
By executing the Subscription Agreement, you agree to be bound by the terms of the Subscription Agreement and the Amended and Restated Limited Liability Company Agreement of the Company (the “Operating Agreement”). The Company, the Manager and the Broker will rely on the information you provide in the Subscription Agreement, including the “Investor Qualification and Attestation” attached thereto and the supplemental information you provide in order for the Manager to verify your status as a “qualified purchaser”. If any information about your “qualified purchaser” status changes prior to you being issued Series Interests, please notify the Manager immediately using the contact details set out in the Subscription Agreement.
For further information on the subscription process, please contact the Manager using the contact details set out in the “Where to Find Additional Information” section.
The subscription funds advanced by prospective Investors as part of the subscription process will be held in a non-interest bearing account with the Escrow Agent and will not be commingled with the Series of Interests’ operating account, until if and when there is a Closing for a particular Offering with respect to that Investor. When the Escrow Agent has received instructions from the Manager and the Broker that an Offering will close and the Investor’s subscription is to be accepted (either in whole or part), then the Escrow Agent shall disburse such Investor’s subscription proceeds in its possession to the account of the applicable Series. If an Offering is terminated without a Closing, or if a prospective Investor’s subscription is not accepted or is cut back due to oversubscription or otherwise, such amounts placed into escrow by prospective Investors will be returned promptly to them without interest or deductions. Any costs and expenses associated with a terminated offering will be borne by the Manager.
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Overview
The vintage comic book, collectible card and fantasy art market, a global, multi-billion-dollar industry (based on estimates by Statista), is characterized by: (i) a very small number of collectors who have the financial means to acquire, enjoy and derive financial gains from vintage comic book, collectible card and fantasy art assets, and (ii) a very large number of vintage comic book, collectible card and fantasy art enthusiasts who have equivalent knowledge and passion for the assets, but no current mechanism to benefit financially from or enjoy certain benefits of ownership of the asset class.
The Company’s mission is to leverage technology and design, modern business models influenced by the sharing economy, and advancements in the financial regulatory environment to democratize the vintage comic book, collectible card and fantasy art market. The Company aims to provide enthusiasts with access to the market by enabling them to create a diversified portfolio of equity interests in “blue-chip” vintage comic book, collectible card and fantasy art assets through a seamless investment experience through the Mythic Markets Platform. It is expected that most of the value for investors of the Underlying Assets will be through appreciation, however, eventually, the Company, for its various Underlying Assets and Series, intends to launch certain fan experiences, called “Fan Club Experiences.” However, the Company has not entered into any agreements for such experiences and does not plan to launch any such experiences until 2021 when the Company has sufficient Underlying Assets in designated Series to justify the expense associated with such events as well as the effort. Eventually, it is the Company’s intention that investors will have the opportunity to participate in a unique collective ownership experience, including museum/retail locations and conventions, as part of the Fan Club Experiences. The objective is to use revenue generated from these Fan Club Experiences to fund the highest caliber of care for the vintage comic books, collectible cards and fantasy art pieces in the collection, which we expect ultimately to be offset by meaningful economies of scale in the form of lower costs for insurance and storage facilities, and to generate Free Cash Flow distributions to equity Investors in the Underlying Assets. “Free Cash Flow” is defined as the net income (as determined under U.S. generally accepted accounting principles (“GAAP”)) generated by the Series plus any change in net working capital and depreciation and amortization (and any other non-cash Operating Expenses) and less any capital expenditures related to the Underlying Asset, provided that Free Cash Flow does not include proceeds from a sale of an Underlying Asset. The Manager may maintain Free Cash Flow funds in a deposit account or an investment account for the benefit of the Series.
Collectors and brokers interested in selling their vintage comic books, collectible cards and fantasy art will benefit from greater liquidity, significantly lower transaction costs and overhead, and a higher degree of transparency as compared to traditional methods of transacting vintage comic books, collectible cards and fantasy art. Auction and consignment models can typically include upwards of ~20% of asset value in transaction costs and buyer premiums, as well as meaningful overhead in terms of asset preparation, shipping and marketing costs, and time value. The Company thus aims to align the interests of buyers and sellers, while opening up the market to a significantly larger number of participants than was previously possible, thereby driving market appropriate valuations and greater liquidity.
Business of the Company
The Interests represent an investment in a particular Series and thus indirectly the Underlying Asset and do not represent an investment in the Company or the Manager generally. We do not anticipate that any Series will own any assets other than the Underlying Asset associated with such Series. However, we expect that the operations of the Company, including the issuance of additional Series of Interests and their acquisition of additional assets, will benefit Investors by enabling each Series to benefit from economies of scale and by allowing Investors to enjoy the Company’s vintage comic book, collectible card and fantasy art collection at the Fan Club Experiences which are not expected to launch until 2021, for which we have not entered into any agreements.
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We anticipate that the Company’s core competency will be the identification, acquisition, marketing and management of blue-chip vintage comic books, collectible cards and fantasy art pieces for the benefit of the Investors. In addition, through the use of the Mythic Markets Platform, the Company aspires to offer innovative digital products that support a seamless, transparent and unassuming investment process as well as unique and enjoyable experiences that enhance the utility value of investing in passion assets. The Company, with the support of the Manager and through the use of the Mythic Markets Platform, aims to provide:
I. Investors with access to blue-chip vintage comic book, collectible card and fantasy art assets for investment, portfolio diversification and secondary market liquidity for their Interests (although there can be no guarantee that a secondary market will ever develop or that appropriate registrations to permit such secondary trading will ever be obtained).
II. Vintage Comic Book, Collectible Card and Fantasy Art Seller(s) with greater market transparency and insights, lower transaction costs, increased liquidity, a seamless and convenient sale process, portfolio diversification and the ability to retain minority equity positions in assets via the retention of equity interests in offerings conducted through the Mythic Markets Platform.
III. All Mythic Markets Platform users with a premium, highly curated, engaging media experience, including audiovisual content, virtual and augmented reality, community, and market sentiment (e.g. “fantasy collecting”) features. The investable assets on the platform will be supplemented with “private” assets, which will be used to generate conversation, support the “fantasy collecting” component of the platform and enable users to share personal sentiment on all types of assets.
IV. All Mythic Markets Platform users and others with opportunities to engage with the vintage comic books, collectible cards and fantasy art pieces in the Company’s collection through a diverse set of tangible interactions with assets on the platform and unique collective ownership experiences (together, the “Fan Club Experiences”) such as:
A. Grand Prix events (e.g., interactions with comic artists and game designers, casual drafts and competitive tournaments, major convention presence)
B. Visit & interact at Mythic Markets “museums” (i.e., Open HQ, pop-up experiences with partner businesses, or exhibitor booths at major auctions/events/conventions where users can view the assets in person and interact with each other in a social environment);
C. Asset sponsorship models (e.g. corporate sponsors or individuals pay for assets to appear in galleries or at events); and
D. Other asset related products (e.g., merchandise, social networking, communities).
A core principle of vintage comic book, collectible card and fantasy art collecting is the enjoyment of the assets. As such, the ultimate goal of the Fan Club Experiences will be to operate the asset profitably (i.e., generate revenues in excess of Operating Expenses at the Fan Club Experiences within mandated usage guidelines) while supporting the potential generation of financial returns for Investors in each series. The Fan Club Experiences, with appropriate controls and incentives, and active monitoring by the Series Manager, should enable a highly differentiated and enjoyable shared collecting experience while providing for premium care for assets in the Company’s collection. To the extent the Series Manager considers it beneficial to Investors, we plan to include the Series Alpha Black Lotus, Series 1994 MTG Boxes and other Series, from time to time, in the Fan Club Experiences.
Despite the plans of the Company, it should be noted that Fan Club Experiences are not expected to launch until 2021 and the Company has a significant amount of assets for the Fan Club Experiences will be an enjoyable and profitable experience. The Company has not entered into any contracts regarding Fan Club Experiences and Investors are discouraged from investing solely on the basis of the plans of Fan Club Experiences. Instead, Investors should invest because they believe that the Underlying Asset of their Series will increase in value based on the Underlying Asset and the marketplace itself.
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Our objective is to become the leading marketplace for investing in collector quality fandom and pop- culture assets (including vintage comic books, collectible cards and fantasy art pieces) and, through the Mythic Markets Platform, to provide Investors with financial returns commensurate with returns in the vintage comic book, collectible card and fantasy art market, to enable deeper and more meaningful participation by vintage comic book, collectible card and fantasy art enthusiasts in the hobby, to provide experiential and social benefits comparable to those of a world-class vintage comic book, collectible card and fantasy art collector, and to manage the collection in a manner that provides exemplary care to the assets and offers potential returns for Investors.
Competition
Although the Company’s business model is unique in the vintage comic book, collectible card and fantasy art industry, there is potentially significant competition for the underlying assets, which the Company securitizes through its offerings, from many different market participants. While the majority of transactions continue to be peer-to-peer with very limited public information, other market players such as high-end collectibles brokers and auction houses continue to play an increasing role.
Most of our current and potential competitors in the vintage comic book, collectible card and fantasy art industry, such as high-end collectibles brokers and auction houses, have significantly greater financial, marketing and other resources than we do and may be able to devote greater resources sourcing the underlying assets that the Company competes for. In addition, almost all of these competitors, in particular the auction houses, have longer operating histories and greater name recognition than we do and are focused on a more established business model.
There are also start-up models around shared ownership of collectible assets, developing in the industry, which will result in additional competition for underlying assets, but so far none of these models focus on the regulated securities market.
With the continued increase in popularity of the vintage comic book, collectible card and fantasy art market, we expect competition for the underlying assets to intensify in future. Increased competition may lead to increased vintage comic book, collectible card and fantasy art prices, which will reduce the potential value appreciation that interest holders may be able to achieve by owning Interests in the Company’s Offerings and will decreased the number of high-quality assets the Company can securitize through the Platform.
In addition, there are companies that are developing crowd funding models for other alternative asset classes such as art, collectibles, cars or wine, who may decide to enter the vintage comic book, collectible card and fantasy art market as well.
Customers
We target the broader U.S. vintage comic book, collectible card and fantasy art enthusiast and the 83.1 million U.S. millennial market (based on 2015 figures by the U.S. Census Bureau) as our key customer bases. The customers of the Company are the Investors in each Series that has closed an Offering.
Manager
The Operating Agreement designates the Manager as the managing member of the Company. The Manager will generally not be entitled to vote on matters submitted to the Interest Holders. The Manager will not have any distribution, redemption, conversion or liquidation rights by virtue of its status as the Manager.
The Operating Agreement further provides that the Manager, in exercising its rights in its capacity as the managing member, will be entitled to consider only such interests and factors as it desires, including its own interests, and will have no duty or obligation (fiduciary or otherwise) to give any consideration to any interest of or factors affecting the Company, any Series of Interests or any of the interest holders and will not be subject to any different standards imposed by the Operating Agreement, the LLC Act or under any other law, rule or regulation or in equity. In addition, the Operating Agreement provides that the Manager will not have any duty (including any fiduciary duty) to the Company, any series or any of the interest holders.
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In the event the Manager resigns as managing member of the Company, the holders of a majority of all interests of the Company may elect a successor managing member. Holders of interests in each series of the Company have the right to remove the Manager as manager of the Company, by a vote of two-thirds of the holders of all interests in each series of the Company (excluding the Manager), in the event the Manager is found by a non-appealable judgment of a court of competent jurisdiction to have committed fraud in connection with a Series of Interests or the Company. If so convicted, the Manager shall call a meeting of all of the holders of every Series of Interests within 30 calendar days of such non-appealable judgment at which the holders may vote to remove the Manager as manager of the Company and each series. If the Manager fails to call such a meeting, any interest holder will have the authority to call such a meeting. In the event of its removal, the Manager shall be entitled to receive all amounts that have accrued and are due and payable to it. If the holders vote to terminate and dissolve the Company (and therefore the series), the liquidation provisions of the Operating Agreement shall apply (as described in “Description of the Interests Offered – Liquidation Rights”). In the event the Manager is removed as manager of the Company, it shall also immediately cease to be manager of any series.
See “Management” for additional information regarding the Manager.
Advisory Board
The Manager intends to assemble an expert network of advisors with experience in relevant industries (the “Advisory Board”) to assist the Manager in identifying and acquiring the vintage comic books, collectible cards and fantasy art pieces, to assist the Series Manager in managing the vintage comic books, collectible cards and fantasy art pieces, and to advise the Manager and certain other matters associated with the business of the Company and the various Series of Interests.
The members of the Advisory Board are not managers or officers of the Company or any series and do not have any fiduciary or other duties to the interest holders of any series.
Operating Expenses
Operating Expenses are allocated to each series based on the Companies Allocation Policy (see “Allocation of expenses” below). Each series is only responsible for the Operating Expenses associated with such series, as determined by the Manager in accordance with the Allocation Policy, and not the Operating Expenses related to any other Series. Upon the Closing, the Series will be responsible for the following costs and expenses attributable to the activities of the Company related to the Series (together, the “Operating Expenses”):
I. any and all ongoing fees, costs and expenses incurred in connection with the management of the Underlying Asset related to a Series, including import taxes, income taxes, transportation (other than transportation costs described in Acquisition Expenses), storage (including its allocable portion of property rental fees should the Manager decide to rent a property to store a number of Underlying Assets), security, valuation, custodial, marketing, maintenance and utilization of the Underlying Asset;
II. fees, costs and expenses incurred in connection with preparing any reports and accounts of a Series of Interests, including any blue sky filings required in certain states and any annual audit of the accounts of such Series of Interests (if applicable);
III. fees, costs and expenses of a third party registrar and transfer agent appointed in connection with a Series of Interests;
IV. fees, costs and expenses incurred in connection with making any tax filings on behalf of the Series of Interests;
V. any indemnification payments;
VI. any and all insurance premiums or expenses incurred in connection with the Underlying Asset, including insurance required for utilization at and transportation of the Underlying Asset to events under Fan Club Experiences (excluding any insurance taken out by a corporate sponsor or individual paying to showcase an asset at an event but including, if obtained, directors and officers insurance of the directors and officers of the Manager or the Series Manager); and
VII. any similar expenses that may be determined to be Operating Expenses, as determined by the Manager in its reasonable discretion.
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The Manager has agreed to pay and not be reimbursed for Operating Expenses incurred prior to the Closing of any Series detailed in the Master Series Table. The Manager will bear its own expenses of an ordinary nature, including all costs and expenses on account of rent (other than for storage of the Underlying Asset), supplies, secretarial expenses, stationery, charges for furniture, fixtures and equipment, payroll taxes, remuneration and expenses paid to employees and utilities expenditures (excluding utilities expenditures in connection with the storage of the Underlying Assets).
If the Operating Expenses for a particular Series exceed the amount of revenues generated from the Underlying Asset of such Series and cannot be covered by any Operating Expense reserves on the balance sheet of the Series, the Manager may (a) pay such Operating Expenses and not seek reimbursement, (b) loan the amount of the Operating Expenses to the Series, on which the Manager may impose a reasonable rate of interest, and be entitled to reimbursement of such amount from future revenues generated by the Underlying Asset related to such Series (an “Operating Expenses Reimbursement Obligation(s)”), and/or (c) cause additional Interests to be issued in the Series in order to cover such additional amounts.
Indemnification of the Manager
The Operating Agreement provides that none of the Manager, nor any current or former directors, officers, employees, partners, shareholders, members, controlling persons, agents or independent contractors of the Manager, members of the Advisory Board, nor persons acting at the request of the Company in certain capacities with respect to other entities (collectively, the “Indemnified Parties”) will be liable to the Company, any series or any interest holders for any act or omission taken by the Indemnified Parties in connection with the business of the Company or any Series that has not been determined in a final, non-appealable decision of a court, arbitrator or other tribunal of competent jurisdiction to constitute fraud, willful misconduct or gross negligence.
Each Series will indemnify the Indemnified Parties out of its assets against all liabilities and losses (including amounts paid in respect of judgments, fines, penalties or settlement of litigation, including legal fees and expenses) to which they become subject by virtue of serving as Indemnified Parties with respect to the Company or the applicable Series and with respect to any act or omission that has not been determined by a final, non-appealable decision of a court, arbitrator or other tribunal of competent jurisdiction to constitute fraud, willful misconduct or gross negligence.
Description of the Series Agreement
The Series referenced in the Master Series Table; will each appoint the Manager to serve as Series Manager (the “Series Manager”) to manage the Underlying Asset pursuant to a Series Agreement (the “Series Agreement”).
The services provided by the Series Manager will include:
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| · | Together with members of the Advisory Board, creating the asset maintenance policies for the collection of assets; |
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| · | Investigating, selecting, and, on behalf of the applicable series, engaging and conducting business with such persons as the Series Manager deems necessary to ensure the proper performance of its obligations under the Series Agreement, including but not limited to consultants, insurers, insurance agents, maintenance providers, storage providers and transportation providers and any and all persons acting in any other capacity deemed by the Series Manager necessary or desirable for the performance of any of the services under the Series Agreement; and |
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| · | Developing standards for the transportation and care of the Underlying Assets. |
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The Series Agreement entered with each Series will terminate on the earlier of: (i) one year after the date on which the relevant Underlying Asset has been liquidated and the obligations connected to the Underlying Asset (including, contingent obligations) have been terminated, (ii) the removal of Mythic Markets, Inc. as managing member of the Company (and thus all Series of Interests), (iii) upon notice by one party to the other party of a party’s material breach of the Series Agreement or (iv) such other date as agreed between the parties to the Series Agreement.
Each series will indemnify the Series Manager out of its assets against all liabilities and losses (including amounts paid in respect of judgments, fines, penalties or settlement of litigation, including legal fees and expenses) to which they become subject by virtue of serving as Series Manager under the Series Agreement with respect to any act or omission that has not been determined by a final, non-appealable decision of a court, arbitrator or other tribunal of competent jurisdiction to constitute fraud, willful misconduct or gross negligence.
Management Fee
As consideration for managing the Underlying Asset, the Series Manager will be paid a semi-annual fee pursuant to the Series Agreement equal to 50% of any available Free Cash Flow generated by a Series for such six-month time period (the “Management Fee”). The Management Fee will only become payable if there are sufficient proceeds to distribute Free Cash Flow to the Interest Holders.
Asset selection
The Company targets a broad spectrum of assets globally in order to cater to a wide variety of tastes and investment strategies across the vintage comic book, collectible card and fantasy art market. We intend to acquire vintage comic book, collectible card and fantasy art assets ranging from Golden and Silver Age comic books, Magic: The Gathering, Pokemon cards, original fantasy art as well as various other categories across the spectrum of vintage comic book, collectible card and fantasy art assets. We will pursue acquisitions opportunistically on a global basis whenever we can leverage our industry specific knowledge or relationships to bring compelling investment opportunities to Investors. It is our objective to acquire only the highest caliber assets (Graded 9 and above as defined by Beckett Grading Services and Professional Sports Authenticator, Graded 4.5 and above as defined by Certified Guaranty Company and other similar industry grading companies, although we may opportunistically choose to acquire assets of lesser qualities from time to time if we consider these to be prudent investments for the Investors on the Mythic Markets Platform) and to appropriately maintain, monitor and manage the collection to support its continued value appreciation and to enable respectful enjoyment and utilization by the Investors.
We anticipate that our Advisory Board will assist in the identification of vintage comic books, collectible cards and fantasy art pieces and in finding and identifying collectible related service providers. We believe this will give the Company access to the highest quality assets and balanced information and decision making from information collected across a diverse set of constituents in the vintage comic book, collectible card and fantasy art market, as well as a network of partners to ensure the highest standards of care for the Underlying Assets.
Our asset selection criteria were established by the Manager in consultation with members of our Advisory Board and are continually influenced by Investor demand and current industry trends. The criteria are subject to change from time to time in the sole discretion of the Manager. Although we cannot guarantee positive investment returns on the assets we acquire, we endeavor to select assets that are projected to generate positive return on investment, primarily based upon the asset’s value appreciation potential. The Manager, along with our Advisory Board, will endeavor to only select assets with known ownership history, pre-purchase inspections, and other related records. The Manager, along with our Advisory Board, also considers the condition and grading of the assets, historical significance, provenance, the historical valuation of the specific asset or comparable assets and our ability to relocate the asset to offer tangible experiences to Investors and members of the Mythic Markets Platform. The Manager, together with the Advisory Board, will review asset selection criteria at least annually. The Manager will seek approval from the Advisory Board for any major deviations from these criteria.
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Through the Company’s network and Advisory Board, we believe that we will be able to identify and acquire vintage comic book, collectible card and fantasy art assets of the highest quality and known provenance, and obtain proprietary access to publisher limited production assets, with the intent of driving returns for Investors in the Series of Interests that owns the applicable asset. Concurrently, through the Mythic Markets Platform, we aim to bring together a significantly larger number of potential buyers with Asset Sellers than traditional auction houses or brokers are able to achieve. Through this process, we believe we can source and syndicate assets more efficiently than the traditional markets and with significantly lower transaction and holding costs.
Asset acquisition
The Company plans to acquire underlying assets through various methods:
1. Upfront purchase – the Company acquires an underlying asset from an Asset Seller prior to the launch of offering related to the series
2. Purchase agreement – the Company enters into an agreement with an Asset Seller to acquire an underlying asset, which may expire prior to the closing of the offering for the related series, in which case the Company is obligated to acquire the underlying asset prior to the closing
3. Purchase option agreement – the Company enters into a purchase option agreement with an Asset Seller, which gives the Company the right, but not the obligation, to acquire the underlying asset
In the case where an underlying asset is acquired prior to the launch or closing, as the case may be, of the offering process for the related series, the proceeds from the associated offering, net of any Offering Expenses or other Acquisition Expenses or Sourcing Fee, will be used to reimburse the Company for the acquisition of the Underlying Asset or repay any loans made to the Company, plus applicable interest, to acquire such underlying asset.
From time to time, and as was the case for the Series Alpha Black Lotus, the Company or its Affiliates may elect to acquire an asset opportunistically prior to the offering process. In such cases, the proceeds from the associated offering, Offering Expenses or other Acquisition Expenses or Sourcing Fee, will be used to reimburse the Company for the acquisition of the asset or repay any loans made to the Company, plus applicable interest, to acquire such assets.
In the case where, rather than pre-purchasing assets before the closing of an Offering, the Company plans to negotiate with Asset Sellers for the exclusive right to market, for a period of time (the “exclusivity period”) an asset on the Mythic Markets Platform to Investors. The Company plans to achieve this by pre-negotiating a purchase price (or desired amount of liquidity) and entering into an asset purchase agreement with an Asset Seller which would close simultaneously upon the closing of the offering of interests in the series associated with that asset. Then, upon closing a successful offering, the Asset Seller would be compensated with a combination of cash proceeds from the offering and, if elected, equity ownership in the series associated with the asset (as negotiated in the asset purchase agreement for such vintage comic book, collectible card or fantasy art pieces) and the asset would be held by, or for the benefit of, the applicable series.
Additional details on the acquisition method for each Underlying Asset can be found in the Master Series Table and in the “Use of Proceeds – All Series” section for each respective Series.
Asset liquidity
The Company intends to hold and manage all of the assets marketed on the Mythic Markets Platform indefinitely. Liquidity for Investors would be obtained by transferring their interests in a series (although there can be no guarantee that a secondary market for any Series of Interests will develop or that appropriate registrations to permit secondary trading will ever be obtained). However, should an offer to liquidate an entire asset materialize and be in the best interest of the Investors, as determined by the Manager, the Manager together with the Advisory Board will consider the merits of such offers on a case-by-case basis and potentially sell the asset. Furthermore, should an asset become obsolete (e.g. lack Investor demand for its interests) or suffer from a catastrophic event, the Manager may choose to sell the asset. As a result of a sale under any circumstances, the Manager would distribute the proceeds of such sale (together with any insurance proceeds in the case of a catastrophic event covered under the assets insurance contract) to the interest holders of the applicable series (after payment of any accrued liabilities or debt, including but not limited to balances outstanding under any Operating Expenses Reimbursement Obligation or accrued Management Fee, on the asset or of the series at that time).
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Facilities
The Manager intends to operate the Company and manage the collection in a manner that will focus on the ongoing security of all Underlying Assets. The Manager will store the Underlying Asset, along with other assets in a professional facility and in accordance with standards commonly expected when managing vintage comic books, collectible cards and fantasy art pieces of equivalent value and always as recommended by the Advisory Board.
The Company currently leases space in secure storage facilities in Oregon for the purposes of storing Underlying Assets in a controlled environment other than when some or all of the underlying assets are used in Fan Club Experiences or are otherwise being utilized for marketing or similar purposes.
The Company also currently leases several safe deposit boxes in the vault of a commercial banking facility in Oregon for the purposes of storing the Underlying Asset in a secure, highly controlled environment or is otherwise being utilized for marketing or similar purposes. The facility is monitored by staff approximately 49 hours per week and is under constant video surveillance. Each of the Underlying Assets in the collection are inspected and exercised appropriately on a regular basis according to the maintenance schedule defined for each Underlying Asset by the Series Manager in conjunction with members of the Advisory Board.
The Manager and the Series Manager is located at 16 Lagoon Ct, San Rafael, CA 94903 and presently has three full-time employees and five part-time contractors. The Company does not have any employees.
Government regulation
Regulation of the vintage comic book, collectible card and fantasy art industry varies from jurisdiction to jurisdiction and state to state. In any jurisdictions or states in which the Company operates, it may be required to obtain licenses and permits to conduct business and will be subject to local laws and regulations, including, but not limited to, import and export regulations, laws and regulations involving sales, use, value-added and other indirect taxes.
Claims arising out of actual or alleged violations of law could be asserted against the Company by individuals or governmental authorities and could expose the Company or each Series of Interests to significant damages or other penalties, including revocation or suspension of the licenses necessary to conduct business and fines.
Legal proceedings
None of the Company, any series, the Manager, the Series Manager or any director or executive officer of the Manager is presently subject to any material legal proceedings.
Allocations of expenses
To the extent relevant, Offering Expenses, Acquisition Expenses, Operating Expenses, revenue generated from Underlying Assets and any indemnification payments made by the Company will be allocated amongst the various interests in accordance with the Manager’s allocation policy, a copy of which is available to Investors upon written request to the Manager. The allocation policy requires the Manager to allocate items that are allocable to a specific series to be borne by, or distributed to (as applicable), the applicable Series of Interests. If, however, an item is not allocable to a specific series but to the Company in general, it will be allocated pro rata based on the value of Underlying Assets (e.g., in respect of collectible insurance) or the number of interests, as reasonably determined by the Manager or as otherwise set forth in the allocation policy. By way of example, as of the date hereof it is anticipated that revenues and expenses will be allocated as follows:
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| Revenue or Expense Item | Details | Allocation Policy (if revenue or expense is not clearly allocable to a specific Underlying Asset) |
| Revenue | Fan Club Experiences (Mythic Museum, Grand Prix Tournaments, etc.) (not expected until 2021) | Allocable pro rata to the value of each Underlying Asset |
| Offering Expenses | Filing expenses related to submission of regulatory paperwork for a series | Allocable pro rata to the number of Underlying Assets |
| Underwriting expense incurred | Allocable pro rata to the number of Underlying Assets | |
| Legal expenses related to the submission of regulatory paperwork for a series | Allocable pro rata to the number of Underlying Assets | |
| Audit and accounting work related to the regulatory paperwork of a series | Allocable pro rata to the number of Underlying Assets | |
| Escrow agent fees for the administration of escrow accounts related to the offering | Allocable pro rata to the number of Underlying Assets | |
| Compliance work including diligence related to the preparation of a series | Allocable pro rata to the number of Underlying Assets | |
| Bank transfer and other bank account related fees | Allocable to each underlying asset | |
| Acquisition Expense | Transportation of Underlying Asset as at time of acquisition | Allocable pro rata to the number of Underlying Assets |
| Insurance for transportation of Underlying Asset as at time of acquisition | Allocable pro rata to the value of each Underlying Asset | |
| Preparation of marketing materials | Allocable pro rata to the number of Underlying Assets | |
| Interest / purchase option expense in the case (i) an Underlying Asset was pre-purchased by the Company through a loan or (ii) the Company obtained a purchase option to acquire an underlying asset, prior to the closing of an offering | Allocable directly to the applicable Underlying Asset | |
| Operating Expense | Storage | Allocable pro rata to the number of Underlying Assets |
| Security (e.g., surveillance and patrols) | Allocable pro rata to the number of Underlying Assets | |
| Custodial fees | Allocable pro rata to the number of Underlying Assets | |
| Appraisal and valuation fees | Allocable pro rata to the number of Underlying Assets | |
| Marketing expenses in connection with Fan Club Experiences | Allocable pro rata to the value of each Underlying Asset | |
| Insurance | Allocable pro rata to the value of each Underlying Asset | |
| Transportation to Fan Club Experiences | Allocable pro rata to the number of Underlying Assets | |
| Ongoing reporting requirements (e.g. Reg A+ or Securities Act reporting) | Allocable pro rata to the number of Underlying Assets | |
| Audit, accounting and bookkeeping related to the reporting requirements of the series | Allocable pro rata to the number of Underlying Assets | |
| Other Fan Club Experience related expenses (e.g., special guest and artist fees, facility management, film and photography crew) | Allocable pro rata to the value of each Underlying Asset | |
| Indemnification Payments | Indemnification payments under the Operating Agreement | Allocable pro rata to the value of each Underlying Asset |
Notwithstanding the foregoing, the Manager may revise and update the allocation policy from time to time in its reasonable discretion without further notice to the Investors.
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The vintage comic book, collectible card and fantasy art market has truly become a globalized industry as vintage comic books, collectible cards and fantasy art pieces have begun trading hands internationally and collectors and enthusiasts are attending an increasing number of auctions and conventions across the globe.7 The core markets include the U.S., Europe and Asia; however, we believe growing markets for vintage comic books, collectible cards and fantasy art in places such as Latin America and Russia create more price insulation from localized market conditions as demand is less tied to the specific health of the general U.S. economy. We do not have a statistic on this matter.
We believe that the market for highly coveted, investment grade, vintage comic book, collectible card and fantasy art assets will continue to appreciate and generate financial returns for Investors. We further believe that The Walt Disney Company’s acquisition of Marvel Entertainment will lead to the development of new experiences and theme parks dedicated to the genre, and will exacerbate the trend. Similarly, to the extent the macro-investment environment continues to be defined by moderate interest rates and potentially volatile returns in traditional asset classes, high performing alternative asset classes should continue to gain in prominence and benefit from positive funds flows into these asset classes. Like art and other passion asset classes, we believe that vintage comic books, collectible cards and fantasy art will continue to become a more permanent part of many Investors’ investment thesis, further increasing transparency and liquidity in this market. Sharing economy business models, like those offered by the Fan Club Experiences, will become a more efficient and enjoyable way to participate in the vintage comic book, collectible card and fantasy art hobby independent of investment activities, particularly among younger generations that derive more value from living asset-light and experience-heavy lifestyles. In should be noted that Fan Club Experiences are not expected to launch until 2021.
The popularization of the vintage comic book, collectible card and fantasy art market has been accelerated through the growth of global collectible card game tournaments and eSports leagues (e.g. Magic: The Gathering Pro Tour and Grand Prix), the superhero film genre (e.g., Wonder Woman, Black Panther), mobile gaming (e.g., Pokemon Go), televised and streaming content (e.g., Twitch, YouTube Gaming), vintage comic book, collectible card and fantasy art auctions (e.g., Heritage Auctions, Comic Connect, Comic Link, PWCC Auctions), conventions (e.g., Comic-Con International, Gen Con, PAX, BlizzCon) and the aforementioned broadening of the collectible scope of vintage comic books, collectible card games and fantasy art pieces. These all lead to increased participation and interest in vintage comic books, collectible cards and fantasy art by a larger range of people and income classes.
Another factor pushing the growth of the vintage comic book, collectible card and fantasy art market is the introduction of new technologies and cultural norms including online gaming, digital asset collecting, and reimagining classic superhero characters to appeal to new and broader audiences. For example, the extreme price increase of All Star Comics #8 (first appearance of Wonder Woman) has been spurred by the cultural popularity and box office success of the Wonder Woman film. Similarly, the global success of the Pokemon Go mobile game has driven increased demand for key holofoil cards of the offline card game. In coming years, we anticipate continued growth and evolution in how comic books, collectible cards and fantasy art pieces are created and consumed.
____________________
7 Lewis, Al. 10 Reasons Comic Books Are the Best Investment. MarketWatch, 14 Aug. 2013, www.marketwatch.com/story/10-reasons-comic-books-are-the-best-investment-2013-08-14.
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Although the global market is significantly larger, the key available, reliable statistics are for the U.S. market only.
Comichron, ICV2 and Statista estimate the 2018 comic book, collectible card and fantasy art retail market in the U.S. involved approximately $1.5 billion in transaction value (growing 4.9% annually).89 This represents a ~42% increase since 2010.10 We believe that the majority of the market for buying and selling of vintage comic books, collectible cards and fantasy art is outside of the public eye with very little transparency and extremely limited access to a large number of potential market participants.
We believe the overall macro- economic environment remains favorable for high performing alternative asset classes, including vintage comic books, collectible cards and fantasy art. Interest rates are expected to remain moderate (albeit rising) across most developed economies and returns in traditional asset classes such as stocks and investment grade bonds may remain volatile. In addition to the increased transparency generally across alternative asset classes, we believe that these factors will support the trend for Investors to seek returns in alternative assets, which will continue to make these a more permanent component of investment strategies broadly.
Manager
The Manager of the Company is Mythic Markets, Inc., a Delaware corporation formed on July 23, 2018.
The Company operates under the direction of the Manager, which is responsible for directing the operations of our business, directing our day-to-day affairs, and implementing our investment strategy. The Manager will make decisions with respect to all asset acquisitions and dispositions. The Manager and its officers and directors are not required to devote all of their time to our business and are only required to devote such time to our affairs as their duties require. The Manager is responsible for determining maintenance required in order to maintain or improve the asset’s quality, determining how to monetize the Underlying Assets at Fan Club Experiences in order to generate profits and evaluating potential sale offers, which may lead to the liquidation of a Series as the case may be. In should be noted, Fan Club Experiences are not expected to launch until 2021.
The Company will follow guidelines adopted by the Manager and implement policies set forth in the Operating Agreement unless otherwise modified by the Manager. The Manager may establish further written policies and will monitor our administrative procedures, investment operations and performance to ensure that the policies are fulfilled. The Manager may change our objectives at any time without approval of our Interest Holders. The Manager itself has no track record and is relying on the track record of its individual officers, directors and advisors.
The Manager performs its duties and responsibilities pursuant to our Operating Agreement. The Manager maintains a contractual, as opposed to a fiduciary relationship, with us and our Members. Furthermore, we have agreed to limit the liability of the Manager and to indemnify the Manager against certain liabilities.
__________________
8 Comic Book Sales by Year. (n.d.). Retrieved from http://www.comichron.com/yearlycomicssales.html
9 Card Games - United States | Statista Market Forecast. Statista, www.statista.com/outlook/14030000/109/card-games/united-states#market-revenue.
10 Comics sales revenue in North America 2017 | Statistic. (n.d.). Retrieved from http://www.statista.com/statistics/576036/comics-revenue/
Responsibilities of the Manager
The responsibilities of the Manager include:
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Asset Sourcing and Disposition Services:
|
| • | Together with members of the Advisory Board, define and oversee the overall Underlying Asset sourcing and disposition strategy; |
Services in Connection with an Offering:
|
| • | Create and manage all series of interest for offerings related to Underlying Assets on the Mythic Markets Platform; |
|
| • | Develop offering materials, including the determination of its specific terms and structure and description of the Underlying Assets; |
|
| • | Create and submit all necessary regulatory filings including, but not limited to, Commission filings and financial audits and related coordination with advisors; |
|
| • | Prepare all marketing materials related to offerings; |
|
| • | Together with the broker of record, coordinate the receipt, collection, processing and acceptance of subscription agreements and other administrative support functions; |
|
| • | Create and implement various technology services, transactional services, and electronic communications related to any offerings; |
|
| • | All other necessary offering related services, which may be contracted out; |
Asset Monetization Services:
|
| • | Create and manage all Fan Club Experiences and determine participation in such programs by any Underlying Assets; |
|
| • | Evaluate and enter into service provider contracts related to the operation of Fan Club Experiences (the Company has not yet entered into any such agreements); |
|
| • | Allocate revenues and costs related to Fan Club Experiences to the appropriate series in accordance with our allocation policy which is not expected until 2021; |
|
| • | Approve potential joint ventures, limited partnerships and other such relationships with third parties related to asset monetization and Fan Club Experiences. The Company has not yet entered into any such relationships. |
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Interest Holder Relationship Services:
|
| • | Provide any appropriate updates related to Underlying Assets or offerings electronically or through the Mythic Markets Platform; |
|
| • | Manage communications with Interest Holders, including answering emails, preparing and sending written and electronic reports and other communications; |
|
| • | Establish technology infrastructure to assist in providing Interest Holder support and services; |
|
| • | Determine our distribution policy and determine amounts of and authorize Free Cash Flow distributions from time to time; |
|
| • | Maintain Free Cash Flow funds in deposit accounts or investment accounts for the benefit of a Series; |
Administrative Services:
|
| • | Manage and perform the various administrative functions necessary for our day-to-day operations; |
|
| • | Provide financial and operational planning services and collection management functions including determination, administration and servicing of any Operating Expenses Reimbursement Obligation made to the Company or any series by the Manager to cover any Operating Expense shortfalls; |
|
| • | Administer the potential issuance of additional Interests to cover any potential Operating Expense shortfalls; |
|
| • | Maintain accounting data and any other information concerning our activities as will be required to prepare and to file all periodic financial reports and required to be filed with the Commission and any other regulatory agency, including annual and semi-annual financial statements; |
|
| • | Maintain all appropriate books and records for the Company and all the Series of Interests; |
|
| • | Obtain and update market research and economic and statistical data in the Underlying Assets and the general vintage comic book, collectible card and fantasy art market; |
|
| • | Oversee tax and compliance services and risk management services and coordinate with appropriate third parties, including independent accountants and other consultants, on related tax matters; |
|
| • | Supervise the performance of such ministerial and administrative functions as may be necessary in connection with our daily operations; |
|
| • | Provide all necessary cash management services; |
|
| • | Manage and coordinate with the transfer agent, custodian or broker-dealer, if any, the process of making distributions and payments to Interest Holders or the transfer or re-sale of securities as may be permitted by law; |
|
| • | Evaluate and obtain adequate insurance coverage for the Underlying Assets based upon risk management determinations; |
|
| • | Track the overall regulatory environment affecting the Company, as well as managing compliance with regulatory matters; |
|
| • | Evaluate our corporate governance structure and appropriate policies and procedures related thereto; and |
|
| • | Oversee all reporting, record keeping, internal controls and similar matters in a manner to allow us to comply with applicable law. |
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Executive Officers, Directors and Key Employees of the Manager
The following individuals constitute the Board of Directors, executive management and significant employees of the Manager:
| Name |
| Age |
| Position |
| Term of Office (Beginning) |
| Joseph Mahavuthivanij |
| 39 |
| Chief Executive Officer, Director |
| 07/2018 |
| Debra Lin |
| 35 |
| Chief Product Officer |
| 07/2018 |
| Theodore Stiefel |
| 47 |
| Chief Financial Officer |
| 12/2018 |
| Nik Talreja |
| 35 |
| General Counsel |
| 11/2019 |
Background of Officers and Directors of the Manager
The following is a brief summary of the background of each director and executive officer of the Manager:
Joseph Mahavuthivanij, Chief Executive Officer
Joe is a serial entrepreneur with experience building businesses in the consumer internet space. From 2013 to 2015, Joe was the co-founder and CEO of Padworthy, a platform helping landlords perform online tenant screenings, credit reports, and background checks. Prior to Padworthy, Joe co-founded Yapsie, an online community of pet owners reviewing local pet-friendly experiences, where he worked from 2010 to 2012.
Prior to co- founding Mythic Markets, Joe worked in venture capital at Social Leverage, an early stage venture capital firm specializing in fintech and enterprise SaaS investments. Joe worked at Social Leverage from 2015 to 2018.
In 2017, Joe also served as the Head of US Partnerships for Onfido, a global ID verification company. Joe worked directly with the CEO to structure the sale of the company’s background checking business, as well as assisted in the company’s series B and series C rounds of financing.
Joe is the host of the popular VentureForth Podcast, sharing the stories of top performing entrepreneurs and investors.
Joe graduated from the University of California, San Diego with a degree in Psychology.
Debra Lin, Chief Product Officer
Debra is a user experience and product designer with eight years experience leading the development of software platforms across industries including healthcare, solar, finance, consumer internet, communities, and business tools.
Prior to co-founding Mythic Markets, Debra was a core contributor to digital health innovations at Siemens Healthineers (2017-2018), internal business tools at Google (2015-2017), product design and branding at Mosaic (2013-2014), and consumer applications at Ask (2013) and Wikia (2011-2012).
Debra was the founding designer at Yapsie, an online community of pet owners reviewing local pet-friendly experiences, where she worked from 2010 to 2012.
Debra earned her degree in Psychology with a professional certification in Graphic & Web Design from the University of California, San Diego.
Theodore Stiefel, Chief Financial Officer
Ted is an accounting and finance professional with over 10 years of experience and an expert understanding of business accounting principles and financial analysis. Ted is a California-licensed CPA and has led the finance organizations across industries including enterprise SaaS, private equity, biotechnology, pharmaceuticals, and real estate.
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Ted is currently leading the finance function at Innovapptive. Between 2014-2018, Ted led the tax, valuation, and back office function for CRG LP (fka Capital Royalty LP), a $2.5B private equity firm. Ted also led finance for BioNano Genomics (2012-2014), and Scantibodies Laboratory (2010- 2011).
Ted has a BS in Biology from the University of California, San Diego and an MBA with specialization in finance and entrepreneurship from San Diego State University.
Nik Talreja, General Counsel
Nik is an attorney and finance professional with over seven years of experience working with high-growth companies. Nik currently serves as a co-founder and managing partner of Talis Partners, LLP. Prior to co-founding Talis Partners, Nik was an associate at leading law firms Cooley, LLP and Weil, Gotshal & Manges.
Nik has a BS in Corporate Finance from the University of Southern California and a JD with specialization in Business Law from the UCLA School of Law.
Advisory Board
Responsibilities of the Advisory Board
The Advisory Board will support the Company, the Series Manager and the Manager and consists of members of our expert network and additional advisors to the Manager. It is anticipated that the Advisory Board will review the Company’s relationship with, and the performance of, the Manager, and generally approve the terms of any material or related-party transactions. In addition, it is anticipated that the Advisory Board will be responsible for the following:
I. Approving, permitting deviations from, making changes to, and annually reviewing the asset acquisition policy;
II. Evaluating all asset acquisitions;
III. Evaluating any third party offers for asset acquisitions and approving asset dispositions that are in the best interest of the Company and the Interest Holders;
IV. Providing guidance with respect to the appropriate levels of annual collectible insurance costs and maintenance costs specific to each individual asset;
V. Reviewing material conflicts of interest that arise, or are reasonably likely to arise with the managing member, on the one hand, and the Company, a series or the Economic Members, on the other hand, or the Company or a series, on the one hand, and another series, on the other hand;
VI. Approving any material transaction between the Company or a series, on the one hand, and the Manager or any of its affiliates, another series or an interest holder, on the other hand, other than for the purchase of interests;
VII. Reviewing the total fees, expenses, assets, revenues, and availability of funds for distributions to Members at least annually or with sufficient frequency to determine that the expenses incurred are reasonable in light of the investment performance of the assets, and that funds available for distributions to Members are in accordance with our policies; and
VIII. Approving any service providers appointed by the Manager in respect of the Underlying Assets.
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The resolution of any conflict of interest approved by the Advisory Board shall be conclusively deemed fair and reasonable to the Company and the Members and not a breach of any duty at law, in equity or otherwise. The Members of the Advisory Board are not managers or officers of the Company or any series and do not have fiduciary or other duties to the interest holders of any series.
Compensation of the Advisory Board
The Manager will compensate the Advisory Board or their nominees (as so directed by an Advisory Board member) for their service by issuing to them shares of common stock in the Manager subject to traditional vesting terms. As such, it is anticipated that the members of the Advisory Board will be compensated by the Manager and that their costs will not be borne by any given Series of Interests, although members of the Advisory Board may be reimbursed by a series for out-of-pocket expenses incurred by such Advisory Board member in connection with a Series of Interests (e.g. travel related to evaluation of an asset).
Members of the Advisory Board
We plan to continue to build the Advisory Board over time and are in advanced discussions with various experts in the vintage comic book, collectible card and fantasy art market. We have already established an informal network of expert advisors who support the Company in asset acquisitions, valuations and negotiations. To date one individual has formally joined the Manager’s Advisory Board:
Jon Saso
Jon is an industry leading expert in the sourcing and valuation of comic books, collectible card games, fantasy art and sports memorabilia. Jon is the founder and CEO of ChannelFireball, one of the largest retailers, communities and media companies for Magic: The Gathering products and content. ChannelFireball Events (CFBE), a subsidiary of ChannelFireball, is Wizards of the Coast’s exclusive global partner to run all Grand Prix events.
Compensation of Executive Officers
We do not currently have any employees nor do we currently intend to hire any employees who will be compensated directly by the Company. Each of the executive officers of the Manager manage our day-to-day affairs, oversee the review, selection and recommendation of investment opportunities, service acquired investments and monitor the performance of these investments to ensure that they are consistent with our investment objectives. Each of these individuals receives compensation for his or her services, including services performed for us on behalf of the Manager, from Mythic Markets, Inc. Although we will indirectly bear some of the costs of the compensation paid to these individuals, through fees we pay to the Manager, we do not intend to pay any compensation directly to these individuals.
Compensation of Manager
The Manager may receive Sourcing Fees and reimbursement for costs incurred relating to this and other offerings (e.g., Offering Expenses and Acquisition Expenses) and, in its capacity as Series Manager, a Management Fee. Neither the Manager nor its affiliates will receive any selling commissions or broker fees in connection with the offer and sale of the Interests.
The annual compensation of the Manager for Fiscal Year 2018 was as follows:
| Name | Capacities in which compensation was received (e.g., Chief Executive Officer, director, etc.) | Cash compensation ($) | Other compensation ($) | Total compensation ($) |
| Mythic Markets, Inc. | Manager | $0 | $0 | $0 |
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The Manager will receive Sourcing Fees for each subsequent offering for Series of Interests in the Company that closes as detailed in the “Use of Proceeds – All Series” section of the respective offerings. Additional details on Sourcing Fees received by the Manager can be found in the Master Series Table.
In addition, should a series revenue exceed its ongoing Operating Expenses and various other potential financial obligations of the series, the Manager in its capacity as the Series Manager may receive a Management Fee as described in “Description of the Business –Management Fee.” To date, no Management Fees have been paid by any series and we do not expect to pay any Management Fees in Fiscal Year 2019.
A more complete description of Management of the Company is included in “Description of the Business” and “Management”.
The Company is managed by Mythic Markets, Inc. At the Closing of each Offering, the Manager or an affiliate will own at least 2% of the Interests in the Series acquired on the same terms as the other Investors. The address of Mythic Markets, Inc. is 16 Lagoon Ct, San Rafael, CA 94903.
As of date of this filing, the securities of the Company are beneficially owned as follows:
| Title of class | Closing Date | Total Interests Offered | Interest Owned by Manager (1) (2) | Total Offering Value |
| Interests – Series MTG-ABL90 |
| 2,000 | 117 / 5.85% | $90,000 |
| Interests – Series MTG-94BOX |
| 2,000 | - | $54,000 |
| Interests – Series ART-GGMTG |
| 2,000 | - | $143,000 |
| Interests – Series COM-AF157 |
| 2,000 |
| $92,000 |
| Interests – Series ART-BHERO |
| 1,000 |
| $ 42 ,000 |
| Interests – Series COM-FF160 |
| 1,000 |
| $32,000 |
1. Mythic Markets, Inc., the Manager is the beneficial owner of these Interests.
2. Upon designation of the Series, Mythic Markets, Inc. became the initial member holding 100% of the interest in the Series. Upon the Closing of the Offering, Mythic Markets, Inc. expects to own at least 2% of each of the Series.
DESCRIPTION OF INTERESTS OFFERED
The following is a summary of the principal terms of, and is qualified by reference to the Operating Agreement, attached hereto as Exhibit 2.2, and the Subscription Agreement for each Series, attached hereto as Exhibit 4.1 and onwards, relating to the purchase of the applicable Series of Interests. This summary is qualified in its entirety by reference to the detailed provisions of those agreements, which should be reviewed in their entirety by each prospective Investor. In the event that the provisions of this summary differ from the provisions of the Operating Agreement or the Subscription Agreement (as applicable), the provisions of the Operating Agreement or the Subscription Agreement (as applicable) shall apply. Capitalized terms used in this summary that are not defined herein shall have the meanings ascribed thereto in the Operating Agreement.
Description of the Interests
The Company is a series limited liability company formed pursuant to Section 18-215 of the Delaware Limited Liability Company Act (the “LLC Act”). The purchase of Membership Interests in a Series of the Company is an investment only in that particular Series and not an investment in the Company as a whole. In accordance with the LLC Act, each Series of Interests is, and any other Series of Interests if issued in the future will be, a separate series of limited liability company interests of the Company and not in a separate legal entity. The Company has not issued, and does not intend to issue, any class of any Series of Interests entitled to any preemptive, preferential or other rights that are not otherwise available to the Interest Holders purchasing Interest in connection with any Offering.
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Title to the Underlying Assets will be held by, or for the benefit of, the applicable Series of Interests. We intend that each Series of Interests will own its own Underlying Asset. We do not anticipate that each Series of Interests will acquire any Underlying Assets other than the respective Underlying Assets. A new Series of Interests will be issued for future Underlying Assets. An Investor who invests in an Offering will not have any indirect interest in any other Underlying Assets unless the Investor also participates in a separate offering associated with that other Underlying Asset.
Section 18-215(b) of the LLC Act provides that, if certain conditions are met, (including that certain provisions are in the formation and governing documents of the series limited liability company, and upon the closing of an offering for a Series of Interests, the records maintained for any such Series account for the assets associated with such Series separately from the assets of the limited liability company, or any other Series), then the debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to a particular Series shall be enforceable only against the assets of such Series and not against the assets of the limited liability company generally or any other Series. Accordingly, the Company expects the Manager to maintain separate, distinct records for each Series and its associated assets and liabilities. As such, the assets of a Series include only the Underlying Asset associated with that Series and other related assets (e.g., cash reserves). As noted in the “Risk Factors” section, the limitations on inter-series liability provided by Section 18-215(b) have never been tested in federal bankruptcy courts and it is possible that a bankruptcy court could determine that the assets of one Series of Interests should be applied to meet the liabilities of the other Series of Interests or the liabilities of the Company generally where the assets of such other Series of Interests or of the Company generally are insufficient to meet the Company’s liabilities.
Section 18-215(c) of the LLC Act provides that a Series of Interests established in accordance with Section 18-215(b) may carry on any lawful business, purpose or activity, other than the business of banking, and has the power and capacity to, in its own name, contract, hold title to assets (including real, personal and intangible property), grant liens and security interests, and sue and be sued. The Company intends for each Series of Interests to conduct its business and enter into contracts in its own name to the extent such activities are undertaken with respect to a particular Series and title to the relevant Underlying Asset will be held by, or for the benefit of, the relevant Series.
All of the Series of Interests offered by this Offering Circular will be duly authorized and validly issued. Upon payment in full of the consideration payable with respect to the Series of Interests, as determined by the Manager, the Interest Holders of such Series of Interests will not be liable to the Company to make any additional capital contributions with respect to such Series of Interests (except for the return of distributions under certain circumstances as required by Sections 18- 215, 18-607 and 18-804 of the LLC Act). Holders of Series of Interests have no conversion, exchange, sinking fund, redemption or appraisal rights, no pre-emptive rights to subscribe for any Interests and no preferential rights to distributions.
In general, the Interest Holders of a particular Series of Interests (which may include the Manager, its affiliates or the Asset Sellers) will participate exclusively in at least 50% of the available Free Cash Flow derived from the Underlying Asset of such Series less expenses (as described in “Distribution rights” below). The Manager, an affiliate of the Company, will own a minimum of 2% of the Interests in each Series of Interests acquired for the same price as all other Investors. The Manager has the authority under the Operating Agreement to cause the Company to issue Interests to Investors as well as to other Persons for such cost (or no cost) and on such terms as the Manager may determine, subject to the terms of the Series Designation applicable to such Series of Interests.
The Series described in the Master Series Table will use the proceeds of the respective Offerings to perform on any purchase and sale agreements, repay any loans taken out or non-interest-bearing payments made by the Manager to acquire their respective Underlying Asset and pay the Asset Sellers pursuant to the respective asset purchase agreements, as well as pay certain fees and expenses related to the acquisition of each Offering (please see the “Use of Proceeds – All Series” section for each Offering for further details).
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Further issuance of Interests
Only the Series Interests, which are not annotated as closed, in the Master Series Table are being offered and sold pursuant to this Offering Circular. The Operating Agreement provides that the Company may issue Interests of each Series of Interests to no more than 2,000 qualified purchasers (no more than 500 of which may be non-”accredited investors”). The Manager, in its sole discretion, has the option to issue additional Interests (in addition to those issued in connection with an Offering) on the same terms as the applicable Series of Interests is being offered hereunder as may be required from time to time in order to pay any Operating Expenses related to the applicable Underlying Asset.
Distribution rights
The Manager has sole discretion in determining what distributions of Free Cash Flow, if any, are made to Interest Holders except as otherwise limited by law or the Operating Agreement. The Company expects the Manager to distribute any Free Cash Flow on a semi-annual basis as set forth below. However, the Manager may change the timing of distributions or determine that no distributions shall be made in its sole discretion.
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11 http://www.polygon.com/2019/3/5/18251623/magic-the-gathering-black-lotus-auction-price
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Any Free Cash Flow generated by the Series of Interests from the utilization of the associated Underlying Asset shall be applied, with respect to such Series, in the following order of priority: I. repay any amounts outstanding under Operating Expenses Reimbursement Obligation plus accrued interest, and
II. thereafter, to create such reserves as the Manager deems necessary, in its sole discretion, to meet future Operating Expenses, and
III. thereafter, 50% (net of corporate income taxes applicable to such Series of Interests) by way of distribution to the Interest Holders of the Series of Interests, which may include the Asset Sellers of the Underlying Asset or the Manager or any of its affiliates, and
IV. up to 50% to the Series Manager in payment of the Management Fee (treated as an expense on the statement of operations of the Series of Interests for accounting purposes).
No Series will distribute an Underlying Asset in kind to its Interest Holders.
The LLC Act (Section 18-607) provides that a member who receives a distribution with respect to a Series and knew at the time of the distribution that the distribution was in violation of the LLC Act shall be liable to the Series for the amount of the distribution for three years. Under the LLC Act, a series limited liability company may not make a distribution with respect to a series to a member if, after the distribution, all liabilities of such Series, other than liabilities to members on account of their limited liability company interests with respect to such Series and liabilities for which the recourse of creditors is limited to specific property of such Series, would exceed the fair value of the assets of such Series. For the purpose of determining the fair value of the assets of the Series, the LLC Act provides that the fair value of property of the Series subject to liability for which recourse of creditors is limited shall be included in the assets of such series only to the extent that the fair value of that property exceeds the nonrecourse liability. Under the LLC Act, an assignee who becomes a substituted member of a company is liable for the obligations of his assignor to make contributions to the company, except the assignee is not obligated for liabilities unknown to it at the time the assignee became a member and that could not be ascertained from the operating agreement.
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Redemption provisions
The Interests are not redeemable.
Registration rights
There are no registration rights in respect of the Interests.
Voting rights
The Manager is not required to hold an annual meeting of Interest Holders. The Operating Agreement provides that meetings of Interest Holders may be called by the Manager and a designee of the Manager shall act as chairman at such meetings. The Investor does not have any voting rights as an Interest Holder in the Company or a Series except with respect to:
I. the removal of the Manager;
II. the dissolution of the Company upon the for cause removal of the Manager, and
III. an amendment to the Operating Agreement that would:
A. enlarge the obligations of, or adversely effect, an Interest Holder in any material respect;
B. reduce the voting percentage required for any action to be taken by the holders of Interests in the Company under the Operating Agreement;
C. change the situations in which the Company and any Series can be dissolved or terminated;
D. change the term of the Company (other than the circumstances provided in the Operating Agreement); or
E. give any person the right to dissolve the Company.
When entitled to vote on a matter, each Interest Holder will be entitled to one vote per Interest held by it on all matters submitted to a vote of the Interest Holders of an applicable Series or of the Interest Holders of all Series of the Company, as applicable. The removal of the Manager as manager of the Company and all Series of Interests must be approved by two-thirds of the votes that may be cast by all Interest Holders in any Series of the Company. All other matters to be voted on by the Interest Holders must be approved by a majority of the votes cast by all Interest Holders in any Series of the Company present in person or represented by proxy.
The consent of the holders of a majority of the Interests of the Series is required for any amendment to the Operating Agreement that would adversely change the rights of such Series of Interests, result in mergers, consolidations or conversions of such Series of Interests and for any other matter as the Manager, in its sole discretion, determines will require the approval of the holders of the Interests voting as a separate class.
The Manager or its affiliates (if they hold Series of Interests) may not vote as an Interest in respect of any matter put to the Interest Holders. However, the submission of any action of the Company or a Series for a vote of the Interest Holders shall first be approved by the Manager and no amendment to the Operating Agreement may be made without the prior approval of the Manager that would decrease the rights of the Manager or increase the obligations of the Manager thereunder.
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The Manager has broad authority to take action with respect to the Company and any Series. See “Management” for more information. Except as set forth above, the Manager may amend the Operating Agreement without the approval of the Interest Holders to, among other things, reflect the following:
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| · | Acquire title or management control of Underlying Asset(s) (by purchase, lease, purchase option, installment contract) from any Person as the Series Manager(s) may determine, whether or not such Person is directly or indirectly affiliated or connected with the Founder or any Series Member; |
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| · | Borrow money for a Series (or their Subsidiaries) from banks, other lending institutions, other Series Members, or the Founder, on such terms as the Series Manager deems appropriate, and in connection therewith, to hypothecate, encumber and grant security Interests in the assets of a Series to secure repayment of the borrowed sums. No debt shall be contracted or liability incurred by or on behalf of any Series except by the Series Manager(s), or, to the extent permitted under the Act and this Agreement, by agents or employees associated with a Series or the Series Manager(s) expressly authorized by the Series Manager(s) to contract such debt or incur such liability; |
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| · | Purchase liability and other insurance to protect the property and business or the Company or Series, and/or directors and officers for the assets of a Series, the Series itself, the Series Manager, the Company, or its Founder; |
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| · | Hold, own and/or operate such assets in the name of a Series or its Subsidiary, as appropriate; |
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| · | To joint venture with other companies to accomplish the objectives of the Company or a Series; |
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| · | Form new, single purpose entities, e.g., limited liability companies, limited partnerships, corporations, or trusts, (Subsidiaries) to take title to or management control of a specific Underlying Asset(s), so long as the Subsidiary is managed by the Founder or an Affiliate; |
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| · | Sell or otherwise dispose of all or substantially all of the assets of a Series as part of a single transaction or plan as long as such disposition is not in violation of or a cause of a default under any other agreement to which such Series may be bound; |
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| · | Execute on behalf of a Series all instruments and documents, including, without limitation, checks; drafts; notes and other negotiable instruments; mortgages or deeds of trust; security agreements; financing statements; documents providing for the acquisition, mortgage or disposition of such Series’ property; assignments; bills of sale; leases; and any other instruments or documents necessary, appropriate, convenient, advisable or incidental to the business of such Series; |
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| · | Employ accountants, legal counsel, managing agents or other experts to perform services for the Company with respect to a Series; |
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| · | Pay, collect, compromise, litigate, arbitrate, or otherwise adjust or settle any and all other claims or demands of or against such Series or to hold such proceeds against the payment of contingent liabilities; |
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| · | Enter into any and all other agreements on behalf of the Company with respect to a Series, as appropriate; and |
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| · | Do and perform all other acts as may be necessary, appropriate, convenient, advisable or incidental to the conduct of such Series’ business. |
In each case, the Manager may make such amendments to the Operating Agreement provided the Manager determines that those amendments:
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| · | do not adversely affect the Interest Holders (including any particular Series of Interests as compared to other Series of Interests) in any material respect; |
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| · | are necessary or appropriate to satisfy any requirements, conditions or guidelines contained in any opinion, directive, order, ruling or regulation of any federal or state agency or judicial authority or contained in any federal or state statute; |
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| · | are necessary or appropriate to facilitate the trading of Interests or to comply with any rule, regulation, guideline or requirement of any securities exchange on which the interests may be listed for trading, compliance with any of which the Manager deems to be in the best interests of the Company and the Interest Holders; |
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| · | are necessary or appropriate for any action taken by the Manager relating to splits or combinations of Interests under the provisions of the Operating Agreement; or |
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| · | are required to effect the intent expressed in this prospectus or the intent of the provisions of the Operating Agreement or are otherwise contemplated by the Operating Agreement. |
Furthermore, the Manager retains sole discretion to create and set the terms of any new Series and will have the sole power to acquire, manage and dispose of Underlying Assets of each series.
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Liquidation rights
The Operating Agreement provides that the Company shall remain in existence until the earlier of the following:
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| · | By sale of all or substantially of the Series’ Underlying Asset(s) and dissolution of all Subsidiaries; |
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| · | By the unanimous written agreement of all Series Managers and the Founder; or |
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| · | Upon the entry of decree of judicial dissolution. |
The death, retirement, resignation, expulsion, bankruptcy or dissolution of any Series Manager or Series Member or the occurrence of any event that terminates the continued membership of any Series Member in a Series shall not in and of itself cause the dissolution of the Company.
If a Series Member who is an individual dies or a court of competent jurisdiction adjudges him to be incompetent to manage its person or property. The Series Member’s executor, administrator, guardian, conservator, or other legal representative may exercise all of the Series Member’s rights for the purpose of settling the Member’s estate or administering its property. If a Series Member is an entity and is dissolved or terminated, the powers of that Series Member may be exercised by its legal representative or successor.
A Series shall remain in existence until the earlier of the following:
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| · | Upon dissolution of the Company; |
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| · | On sale or disposition of all of the Underlying Asset(s) and dissolution of its Subsidiaries; or |
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| · | At the time in which there are no Series Members in a Series; |
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Other than in connection with a transfer of Membership Interests in accordance with this Agreement, a Series Member shall not take any voluntary action (including, without limitation, resignation) that directly causes it to cease to be a Series Member.
The termination and winding up of a Series shall not cause the dissolution of the Company (even if there are no remaining Series so long as the Founder is still a Member); nor shall it cause the termination of any other Series. The termination of a Series shall not affect the limitation on liabilities of such Series or any other Series formed by the Founder as provided in this Agreement and consistent with the Act.
Upon the occurrence of any such event, the Manager (or a liquidator selected by the Manager) is charged with winding up the affairs of the Series of Interests or the Company as a whole, as applicable, and liquidating its assets. Upon the liquidation of a Series of Interests or the Company as a whole, as applicable, the Underlying Assets will be liquidated and any after-tax proceeds distributed: (i) first, to any third party creditors, (ii) second, to any creditors that are the Manager or its affiliates (e.g., payment of any outstanding Operating Expenses Reimbursement Obligation), and thereafter, (iii) to the Interest Holders of the relevant Series of Interests, allocated pro rata based on the number of Interests held by each Interest Holder (which may include the Manager, any of its affiliates and the Asset Seller and which distribution within a Series will be made consistent with any preferences which exist within such Series).
Transfer restrictions
The Interests are subject to restrictions on transferability. An Interest Holder may not transfer, assign or pledge its Interests without the consent of the Manager. The Manager may withhold consent in its sole discretion, including when the Manager determines that such transfer, assignment or pledge would result in (a) there being more than 2,000 beneficial owners of the Series or more than 500 beneficial owners of the Series that are not “accredited investors”, (b) the assets of the Series being deemed “plan assets” for purposes of ERISA, (c) such Interest Holder holding in excess of 19.9% of the Series, (d) result in a change of US federal income tax treatment of the Company and the Series, or (e) the Company, the Series or the Manager being subject to additional regulatory requirements. The transferring Interest Holder is responsible for all costs and expenses arising in connection with any proposed transfer (regardless of whether such sale is completed) including any legal fees incurred by the Company or any broker or dealer, any costs or expenses in connection with any opinion of counsel and any transfer taxes and filing fees. The Manager or its affiliates will acquire Interests in each Series of Interests for their own accounts and may, from time to time and only in accordance with applicable securities laws (which may include filing an amendment to this Offering Circular), transfer these Interests, either directly or through brokers, via the Platform or otherwise. The restrictions on transferability listed above will also apply to any resale of Interests via the Platform through one or more third-party broker-dealers (
Additionally, unless and until the Interests of the Company are listed or quoted for trading, there are restrictions on the holder’s ability to the pledge or transfer the Interests. There can be no assurance that we will, or will be able to, register the Interests for resale and there can be no guarantee that a liquid market for the Interests will. Therefore, Investors may be required to hold their Interests indefinitely. Please refer to Exhibit 2.2 (the Operating Agreement) and Exhibit 4.1 (the form of Subscription Agreement) for additional information regarding these restrictions. To the extent certificated, the Interests issued in each Offering will bear a legend setting forth these restrictions on transfer and any legends required by state securities laws.
Agreement to be bound by the Operating Agreement; power of attorney
By purchasing Interests, the Investor will be admitted as a member of the Company and will be bound by the provisions of, and deemed to be a party to, the Operating Agreement. Pursuant to the Operating Agreement, each Investor grants to the Manager a power of attorney to, among other things, execute and file documents required for the Company’s qualification, continuance or dissolution. The power of attorney also grants the Manager the authority to make certain amendments to, and to execute and deliver such other documents as may be necessary or appropriate to carry out the provisions or purposes of, the Operating Agreement.
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Duties of officers
The Operating Agreement provides that, except as may otherwise be provided by the Operating Agreement, the property, affairs and business of each Series of Interests will be managed under the direction of the Manager. The Manager has the power to appoint the officers and such officers have the authority and exercise the powers and perform the duties specified in the Operating Agreement or as may be specified by the Manager. The Manager intends to appoint Mythic Markets, Inc. as the Series Manager of each Series of Interests to manage the Underlying Assets.
The Company may decide to enter into separate indemnification agreements with the directors and officers of the Company, the Manager or the Series Manager (including if the Manager or Series Manager appointed is not Mythic Markets, Inc.). If entered into, each indemnification agreement is likely to provide, among other things, for indemnification to the fullest extent permitted by law and the Operating Agreement against any and all expenses, judgments, fines, penalties and amounts paid in settlement of any claim. The indemnification agreements may also provide for the advancement or payment of all expenses to the indemnitee and for reimbursement to the Company if it is found that such indemnitee is not entitled to such indemnification under applicable law and the Operating Agreement.
Exclusive jurisdiction; waiver of jury trial
Any dispute in relation to the Operating Agreement is subject to the exclusive jurisdiction of the Court of Chancery of the State of Delaware, except where Federal law requires that certain claims be brought in Federal courts, as in the case of claims brought under the Securities Exchange Act of 1934, as amended. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. Furthermore, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. Each Investor will covenant and agree not to bring any claim in any venue other than the Court of Chancery of the State of Delaware, or if required by Federal law, a Federal court of the United States. If an Interest Holder were to bring a claim against the Company or the Manager pursuant to the Operating Agreement and such claim was governed by state law, it would have to do so in the Delaware Court of Chancery.
Our Operating Agreement, to the fullest extent permitted by applicable law and subject to limited exceptions, provides for Investors to consent to exclusive jurisdiction to Delaware Court of Chancery and for a waiver of the right to a trial by jury, if such waiver is allowed by the court where the claim is brought.
If we opposed a jury trial demand based on the waiver, the court would determine whether the waiver was enforceable under the facts and circumstances of that case in accordance with applicable case law. See “Risk Factors—Risks Related of Ownership of Our Interests.” Any dispute in relation to the Operating Agreement is subject to the exclusive jurisdiction of the Court of Chancery of the State of Delaware, except where Federal law requires that certain claims be brought in Federal courts. Our Operating Agreement, to the fullest extent permitted by applicable law, provides for Investors to waive their right to a jury trial”. Nevertheless, if this jury trial waiver provision is not permitted by applicable law, an action could proceed under the terms of the Operating Agreement with a jury trial. No condition, stipulation or provision of the Operating Agreement or our Interests serves as a waiver by any Investor or beneficial owner of our Interests or by us of compliance with the U.S. federal securities laws and the rules and regulations promulgated thereunder.
These provisions may have the effect of limiting the ability of Investors to bring a legal claim against us due to geographic limitations and may limit an Investor’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us. Furthermore, waiver of a trial by jury may disadvantage you to the extent a judge might be less likely than a jury to resolve an action in your favor. Further, if a court were to find this exclusive forum provision inapplicable to, or unenforceable in respect of, an action or proceeding against us, then we may incur additional costs associated with resolving these matters in other jurisdictions, which could adversely affect our business and financial condition.
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Listing
The Interests are not currently listed or quoted for trading on any national securities exchange or national quotation system.
MATERIAL UNITED STATES TAX CONSIDERATIONS
The following is a summary of the material United States federal income tax consequences of the ownership and disposition of the Interests to United States holders, but does not purport to be a complete analysis of all the potential tax considerations relating thereto. This summary is based upon the provisions of the Internal Revenue Code of 1986, as amended (the “Code”), Treasury regulations promulgated thereunder, administrative rulings and judicial decisions, all as of the date hereof. These authorities may be changed, possibly retroactively, so as to result in United States federal income tax consequences different from those set forth below. We have not sought any ruling from the Internal Revenue Service (the “IRS”), with respect to the statements made and the conclusions reached in the following summary, and there can be no assurance that the IRS will agree with such statements and conclusions.
This summary also does not address the tax considerations arising under the laws of any United States state or local or any non-United States jurisdiction or under United States federal gift and estate tax laws. In addition, this discussion does not address tax considerations applicable to an Investor’s particular circumstances or to Investors that may be subject to special tax rules, including, without limitation:
I. banks, insurance companies or other financial institutions;
II. persons subject to the alternative minimum tax;
III. tax- exempt organizations;
IV. dealers in securities or currencies;
V. traders in securities that elect to use a mark-to-market method of accounting for their securities holdings;
VI. persons that own, or are deemed to own, more than five percent of our Interests (except to the extent specifically set forth below);
VII. certain former citizens or long-term residents of the United States;
VIII. persons who hold our Interests as a position in a hedging transaction, “straddle,” “conversion transaction” or other risk reduction transaction;
IX. persons who do not hold our Interests as a capital asset within the meaning of Section 1221 of the Code (generally, for investment purposes); or
X. persons deemed to sell our Interests under the constructive sale provisions of the Code.
In addition, if a partnership, including any entity or arrangement, domestic or foreign, classified as a partnership for United States federal income tax purposes, holds Interests, the tax treatment of a partner generally will depend on the status of the partner and upon the activities of the partnership. Accordingly, partnerships that hold Interests, and partners in such partnerships, should consult their tax advisors.
On December 22, 2017, the United States enacted H.R. 1, informally titled the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act includes significant changes to the Code affecting the Company and its Interest Holders. Most of the changes applicable to individuals are temporary and, without further legislation, will not apply after 2025. The interpretation of the Tax Act by the IRS and the courts remains uncertain in many respects; Prospective investors should consult their tax advisors specifically regarding the potential impact of the Tax Act on their investment.
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You are urged to consult your tax advisor with respect to the application of the United States federal income tax laws to your particular situation, as well as any tax consequences of the purchase, ownership and disposition of our Interests arising under the United States federal estate or gift tax rules or under the laws of any United States state or local or any foreign taxing jurisdiction or under any applicable tax treaty.
Definitions
U.S. Holder. A “U.S. Holder” includes a beneficial owner of the Interests that is, for U.S. federal income tax purposes, an individual citizen or resident of the United States.
Taxation of each Series of Interests as a “C” Corporation
The Company, although formed as a Delaware series limited liability company eligible for tax treatment as a “partnership,” has affirmatively elected for each Series of Interests, including the series listed in the Master Series Table to be taxed as a “C” corporation under Subchapter C of the Code for all federal and state tax purposes. Thus each Series of Interests, will be taxed at regular corporate rates on its income before making any distributions to Interest Holders.
Taxation of Distributions to Investors
Distributions to U.S. Holders out of the Company’s current or accumulated earnings and profits will be taxable as dividends. A U.S. Holder who receives a distribution constituting “qualified dividend income” may be eligible for reduced federal income tax rates. U.S. Holders are urged to consult their tax advisors regarding the characterization of corporate distributions as “qualified dividend income”. Distributions in excess of the Company’s current and accumulated earnings and profits will not be taxable to a U.S. Holder to the extent that the distributions do not exceed the adjusted tax basis of the U.S. Holder’s Interests. Rather, such distributions will reduce the adjusted basis of such U.S. Holder’s Interests. Distributions in excess of current and accumulated earnings and profits that exceed the U.S. Holder’s adjusted basis in its Interests will be taxable as capital gain in the amount of such excess if the Interests are held as a capital asset. Investors should note that Section 1411 of the Code, added by the Health Care and Education Reconciliation Act of 2010, added a new 3.8% tax on certain investment income (the “3.8% NIIT”), effective for taxable years beginning after December 31, 2012. In general, in the case of an individual, this tax is equal to 3.8% of the lesser of (i) the taxpayer’s “net investment income” or (ii) the excess of the taxpayer’s adjusted gross income over the applicable threshold amount ($250,000 for taxpayers filing a joint return, $125,000 for married individuals filing separate returns and $200,000 for other taxpayers). In the case of an estate or trust, the 3.8% tax will be imposed on the lesser of (x) the undistributed net investment income of the estate or trust for the taxable year, or (y) the excess of the adjusted gross income of the estate or trust for such taxable year over a beginning dollar amount of the highest tax bracket for such year (for 2019, that amount is $12,950).
Taxation of Dispositions of Interests
Upon any taxable sale or other disposition of our Interests, a U.S. Holder will recognize gain or loss for federal income tax purposes on the disposition in an amount equal to the difference between the amount of cash and the fair market value of any property received on such disposition; and the U.S. Holder’s adjusted tax basis in the Interests. A U.S. Holder’s adjusted tax basis in the Interests generally equals his or her initial amount paid for the Interests and decreased by the amount of any distributions to the Investor in excess of the Company’s current or accumulated earnings and profits. In computing gain or loss, the proceeds that U.S. Holders receive will include the amount of any cash and the fair market value of any other property received for their Interests, and the amount of any actual or deemed relief from indebtedness encumbering their Interests. The gain or loss will be long-term capital gain or loss if the Interests are held for more than one year before disposition. Long-term capital gains of individuals, estates and trusts currently are taxed at a maximum rate of 20% (plus any applicable state income taxes) plus the 3.8% NIIT. The deductibility of capital losses may be subject to limitation and depends on the circumstances of a particular U.S. Holder; the effect of such limitation may be to defer or to eliminate any tax benefit that might otherwise be available from a loss on a disposition of the Interests. Capital losses are first deducted against capital gains, and, in the case of non-corporate taxpayers, any remaining such losses are deductible against salaries or other income from services or income from portfolio investments only to the extent of $3,000 per year.
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Backup Withholding and Information Reporting
Generally, the Company must report annually to the IRS the amount of dividends paid to you, your name and address, and the amount of tax withheld, if any. A similar report will be sent to you.
Payments of dividends or of proceeds on the disposition of the Interests made to you may be subject to additional information reporting and backup withholding at a current rate of 28% unless you establish an exemption. Notwithstanding the foregoing, backup withholding and information reporting may apply if either we or our paying agent has actual knowledge, or reason to know, that you are a United States person.
Backup withholding is not an additional tax; rather, the United States income tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund or credit may generally be obtained from the IRS, provided that the required information is furnished to the IRS in a timely manner.
The preceding discussion of United States federal tax considerations is for general information only. It is not tax advice. Each prospective investor should consult its own tax advisor regarding the particular United States federal, state and local and foreign tax consequences, if applicable, of purchasing, holding and disposing of our Interests, including the consequences of any proposed change in applicable laws.
WHERE TO FIND ADDITIONAL INFORMATION
The Manager will answer inquiries from potential Investors in Offerings concerning any of the Series of Interests, the Company, the Manager and other matters relating to the offer and sale of the Series Interests under this Offering Circular and Offering Circular Supplements. The Company will afford the potential Investors in the Interests the opportunity to obtain any additional information to the extent the Company possesses such information or can acquire such information without unreasonable effort or expense that is necessary to verify the information in this Offering Circular.
All potential Investors in the Interests are entitled to review copies of any other agreements relating to any Series of Interests described in this Offering Circular and Offering Circular Supplements, if any. In the Subscription Agreement, you will represent that you are completely satisfied with the results of your pre-investment due diligence activities.
Any statement contained herein or in any document incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Offering Circular and Offering Circular Supplements to the extent that a statement contained herein or in any other subsequently filed document that also is or is deemed to be incorporated by reference herein modifies or replaces such statement. Any such statement so modified or superseded shall not be deemed to constitute a part of this Offering Circular and Offering Circular Supplements, except as so modified or superseded.
Requests and inquiries regarding this Offering Circular should be directed to:
Mythic Collection, LLC
16 Lagoon Ct
San Rafael, CA 94903
E-Mail: team@mythicmarkets.com
Tel: 415-335-6370
Attention: Joseph Mahavuthivanij
We will provide requested information to the extent that we possess such information or can acquire it without unreasonable effort or expense.
| 77 |
| Table of Contents |
MYTHIC COLLECTION LLC
(a Delaware series limited liability company)
For the inception period of January 30, 2019 (inception) through December 31, 2019
| Page | |||
| F-1 | |||
| F-2 | |||
| F-3 | |||
| F-4 | |||
| F-5 | |||
| F-6 |
| 78 |
| Table of Contents |
INDEPENDENT AUDITOR’S REPORT
March 6, 2020
To: Board of Managers, Mythic Collection, LLC
Re: Inception period 2019 Financial Statement Audit
We have audited the accompanying financial statements of Mythic Collection, LLC (the “Company”), which comprise the balance sheets as of December 31, 2019, and the related statements of operations, stockholders’ equity/deficit, and cash flows for the inception period of January 30, 2019 (inception) through December 31, 2019, and the related notes to the financial statements.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of the Company’s financial statements in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2019, and the results of its operations, shareholders’ equity/deficit and its cash flows for the inception period of January 30, 2019 (inception) through December 31, 2019 in accordance with accounting principles generally accepted in the United States of America.
Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 – Going Concern to the financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. Management's evaluation of the events and conditions and management's plans regarding these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our opinion is not modified with respect to this matter.
Sincerely,
IndigoSpire CPA Group
IndigoSpire CPA Group, LLC
Aurora, Colorado
| F-1 |
| Table of Contents |
Balance Sheet
December 31, 2019
See Independent Auditor’s Report
| ASSETS |
| 2019 |
| |
| Current Assets |
|
|
| |
| Cash and cash equivalents |
| $ | 9,435 |
|
| Total Current Assets |
|
| 9,435 |
|
|
|
|
|
|
|
| Non-Current Assets |
|
|
|
|
| Collectible Assets (see Note 2) |
|
| 79,000 |
|
| Total Non-Current Assets |
|
| 79,000 |
|
|
|
|
|
|
|
| TOTAL ASSETS |
| $ | 88,435 |
|
|
|
|
|
|
|
| LIABILITIES AND MEMBERS' EQUITY/(DEFICIT) |
|
|
|
|
| Liabilities |
|
|
|
|
| Current Liabilities |
|
|
|
|
| Advances payable to Manager (see Note 5) |
| $ | 0 |
|
| Total Current Liabilities |
|
| 0 |
|
|
|
|
|
|
|
| Total Liabilities |
|
| 0 |
|
|
|
|
|
|
|
| Members' Equity/(Deficit) |
|
|
|
|
| Subscription in series, net of distributions (See Note 6) |
|
| 90,000 |
|
| Membership Interest |
|
| 1,000 |
|
| Accumulated deficit |
|
| (2,565 | ) |
| Total Members' Equity/(Deficit) |
|
| 88,435 |
|
|
|
|
|
|
|
| TOTAL LIABILITIES AND MEMBERS' EQUITY/(DEFICIT) |
| $ | 88,435 |
|
See the accompanying Notes which are integral to the financial statements
| F-2 |
| Table of Contents |
Statement of Operations
January 30, 2019 (inception) through December 31, 2019
See Independent Auditor’s Report
|
|
| 2019 |
| |
| Revenues |
| $ | 0 |
|
|
|
|
|
|
|
| Operating Expenses: |
|
|
|
|
| General and administrative |
|
| 2,550 |
|
| Management charges |
|
| - |
|
| Total Operating Expenses |
|
| 2,550 |
|
|
|
|
|
|
|
| Loss from operations |
|
| (2,550 | ) |
|
|
|
|
|
|
| Other Income/(Expense) |
|
|
|
|
| Bank service charges |
|
| (15 | ) |
| Total Other Expenses |
|
| (15 | ) |
|
|
|
|
|
|
| Provision for income taxes |
|
| - |
|
|
|
|
|
|
|
| Net loss |
| $ | (2,565 | ) |
See the accompanying Notes which are integral to the financial statements
| F-3 |
| Table of Contents |
Statement of Members’ Equity / (Deficit)
January 30, 2019 (inception) through December 31, 2019
See Independent Auditor’s Report
|
|
| Subscription in Series |
|
| Membership Interest |
|
| Accumulated Deficit |
|
| Total |
| ||||
| Balance at January 30, 2019 (inception) |
| $ | 0 |
|
|
|
|
| $ | 0 |
|
| $ | 0 |
| |
| Subscriptions received in collectible assets |
|
| 90,000 |
|
|
|
|
|
|
|
|
|
| 90,000 |
| |
| Initial Membership Interest |
|
|
|
|
|
| 1,000 |
|
|
|
|
|
|
| 1,000 |
|
| Net income (loss) |
|
|
|
|
|
|
|
|
|
| (2,565 | ) |
|
| (2,565 | ) |
| Balance at December 31, 2019 |
| $ | 90,000 |
|
| $ | 1,000 |
|
| $ | (2,565 | ) |
| $ | 88,435 |
|
See the accompanying Notes which are integral to the financial statements
| F-4 |
| Table of Contents |
Statement of Cash Flows
January 30, 2019 (inception) through December 31, 2019
See Independent Auditor’s Report
|
|
| 2019 |
| |
| Cash flows from operating activities |
|
|
| |
| Net income (loss) |
| $ | (2,565 | ) |
| Adjustments to reconcile net income (loss) to net cash |
|
|
|
|
| Net cash provided by (used in) operating activities |
|
| (2,565 | ) |
|
|
|
|
|
|
| Cash flows in investing activities |
|
|
|
|
| Purchase of collectible asset |
|
| (79,000 | ) |
| Net cash provided by (used in) investing activities |
|
| (79,000 | ) |
|
|
|
|
|
|
| Cash flows from financing activities |
|
|
|
|
| Issuance of series subscription |
|
| 90,000 |
|
| Issuance of Membership Interest |
|
| 1,000 |
|
| Net cash provided by (used in) financing activities |
|
| 91,000 |
|
|
|
|
|
|
|
| Net change in cash |
|
| 9,435 |
|
| Cash at beginning of period |
|
| - |
|
|
|
|
|
|
|
| Cash at end of period |
| $ | 9,435 |
|
See the accompanying Notes which are integral to the financial statements
| F-5 |
| Table of Contents |
Notes to Financial Statements
January 30, 2019 (inception) through December 31, 2019
See Independent Auditor’s Report
NOTE 1 - DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
Mythic Collection, LLC (the “Company”) is a Delaware series limited liability company formed on January 30, 2019. Mythic Markets, Inc. is the sole owner of interests of the Company (other than interests issued in a particular series to other investors). The Company was formed to engage in the business of acquiring and managing a collection of popular art collectibles. It is expected that the Company will create a number of separate series of interests (the “Series” or “Series of Interests”), including the Series #MTG-ABL90, which was created on February 1, 2019, and that each collectible will be owned by a separate Series, and that the assets and liabilities of each Series will be separate in accordance with Delaware law. Investors acquire membership interests (the “Interests”) in each Series and will be entitled to share in the return of that particular Series but will not be entitled to share in the return of any other Series.
The Company’s managing member is Mythic Markets, Inc. (the “Manager”). The Manager is a Delaware corporation formed on July 23, 2018. The Manager is a technology and marketing company that operates the Mythic Markets Platform ("Platform") and manages the Company and the assets owned by the Company in its roles as the Manager and manager of the assets of each Series (the “Asset Manager”).
The Company intends to sell Interests in a number of separate individual Series of the Company. Investors in any Series acquire a proportional share of income and liabilities as they pertain to a particular Series, and the sole assets and liabilities of any given Series at the time of an offering related to that particular Series a single collectible asset, (plus any cash reserves for future operating expenses), which in the case of Series #MTG-ABL90 is an Alpha Black Lotus card. All voting rights, except as specified in the operating agreement or required by law remain with the Manager (e.g., determining the type and quantity of general maintenance and other expenses required, determining how to best commercialize the applicable Series assets, evaluating potential sale offers and the liquidation of a Series). The Manager manages the ongoing operations of each Series in accordance with the operating agreement of the Company, as amended and restated from time to time (the “Operating Agreement”). The Company and each Series shall have perpetual existence unless terminated pursuant to the Operating Agreement or law.
Operating Agreement
In accordance with the Operating Agreement each interest holder in a Series grants a power of attorney to the Manager. The Manager has the right to appoint officers of the Company and each Series. The maximum number Interests in each Series, as of the date hereof, will be 2,000.
After the closing of an offering, each Series is responsible for its own Operating Expenses. Prior to the closing, Operating Expenses are borne by the Manager and not reimbursed by the economic members. Should post-closing Operating Expenses exceed revenues or cash reserves then the Manager may (a) pay such Operating Expenses and not seek reimbursement, (b) loan the amount of the Operating Expenses to the applicable Series and be entitled to reimbursement of such amount from future revenues generated by the applicable Series (“Operating Expenses Reimbursement Obligation(s)”), on which the Manager may impose a reasonable rate of interest, and/or (c) cause additional Interests to be issued in order to cover such additional amounts, which Interests may be issued to existing or new investors, which may include the Manager or its affiliates.
The Manager expects to receive a five percent (2.5%) fee at the closing of each successful offering for its services of sourcing the collectible (the “Sourcing Fee”), which may be waived by the Manager in its sole discretion.
At the discretion of the Manager, a Series may make distributions of Free Cash Flow (as defined in Note E) to both the holders of economic interests in the form of a dividend and the Manager in the form of a management fee. In the case that Free Cash Flow is available and such distributions are made, at the sole discretion of the Manager, the economics members will receive no less than 50% of Free Cash Flow and the Asset Manager will receive up to 50% of Free Cash Flow in the form of a management fee. The management fee is accounted for as an expense to the Series rather than a distribution from Free Cash Flow. The Manager is responsible for covering its own expenses.
Going Concern
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company or any of the Series have not generated profits since inception. The Company or any of the Series may lack liquidity to satisfy obligations as they come due. Future liabilities, other than ones for which the Manager does not seek reimbursement, will be covered through the proceeds of future offerings for the various Series of Interests.
Through December 31, 2019, none of the Series have recorded any revenues. The Company anticipates that it will commence commercializing the collection in fiscal year 2020, but does not expect to generate any revenues for any of the Series in the first year of operations. Each Series will continue to incur Operating Expenses including, but not limited to, storage, insurance, transportation and maintenance expenses, on an ongoing basis.
| F-6 |
| Table of Contents |
From inception through December 31, 2019, Mythic Markets, Inc. or an affiliate has borne all of the costs of the Company. The Company and each Series expect to continue to have access to ample capital financing from the Manager going forward. Until such time as the Series’ have the capacity to generate cash flows from operations, the Manager may cover any deficits through additional capital contributions or the issuance of additional Interests in any individual Series. In addition, parts of the proceeds of future offerings may be used to create reserves for future Operating Expenses for individual Series at the sole discretion of the Manager.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation:
The accompanying financial statements are presented in conformity with accounting principles generally accepted in the United States of America ("GAAP").
Use of estimates:
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from our estimates.
Cash and cash equivalents:
The Company considers all short-term investments with an original maturity of three months or less when purchased, or otherwise acquired, to be cash equivalents. The Company and its Series had $9,435 in cash on hand as of December 31, 2019.
Property and Equipment:
Property and equipment are recorded at cost. Expenditures for renewals and improvements that significantly add to the productive capacity or extend the useful life of an asset are capitalized. Expenditures for maintenance and repairs are expensed as incurred. When equipment is retired or sold, the cost and related accumulated depreciation, if applicable, are eliminated from the balance sheet accounts and the resultant gain or loss is reflected in income.
The Company reviews the carrying value of property and equipment for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of assets. The factors considered by management in performing this assessment include current operating results, trends and prospects, the manner in which the property is used, and the effects of obsolescence, demand, competition, and other economic factors.
As of December 31, 2019, the Company has $79,000, at cost, in collectible assets.
| F-7 |
| Table of Contents |
Income taxes:
The Company intends that the master series and separate Series will elect and qualify to be taxed as a C-corporation under the Internal Revenue Code. The separate Series will comply with the accounting and disclosure requirement of ASC Topic 740, "Income Taxes," which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
Fair Value of Financial Instruments
Financial Accounting Standards Board (“FASB”) guidance specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows:
Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 primarily consists of financial instruments whose value is based on quoted market prices such as exchange-traded instruments and listed equities.
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly (e.g., quoted prices of similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active).
Level 3 - Unobservable inputs for the asset or liability. Financial instruments are considered Level 3 when their fair values are determined using pricing models, discounted cash flows or similar techniques and at least one significant model assumption or input is unobservable.
The carrying amounts reported in the balance sheets approximate their fair value.
| F-8 |
| Table of Contents |
NOTE 3 - RELATED PARTY TRANSACTIONS
The Company, a Delaware series limited liability company, whose managing member is the Manager, will admit additional members to each of its series through the offerings for each Series. By purchasing an Interest in a Series of Interests, the investor is admitted as a member of the Company and will be bound by the Company's Operating Agreement. Under the Operating Agreement, each investor grants a power of attorney to the Manager. The Operating Agreement provides that the Manager with the ability to appoint officers. From time to time, officers, employees or agents of the Manager may participate in offerings of Series, on terms identical to those provided to third party purchasers of such Series.
NOTE 4 - REVENUE, EXPENSE AND COST ALLOCATION METHODOLOGY
The Company distinguishes expenses and costs between those related to the purchase of a particular collectible asset and Operating Expenses related to the management of such collectible assets.
Fees and expenses related to the purchase of an underlying collectible asset include the offering expenses, Acquisition Expenses, Brokerage Fee and Sourcing Fee.
Within Operating Expenses, the Company distinguishes between Operating Expenses incurred prior to the closing of an offering and those incurred after the close of an offering. Although these pre- and post- closing Operating Expenses are similar in nature and consist of expenses such as storage, insurance, transportation and maintenance, pre-closing Operating Expenses are borne by the Manager and are not expected to be reimbursed by the Company or the economic members. Post-closing Operating Expenses are the responsibility of each Series of Interest and may be financed through (i) revenues generated by the Series or cash reserves at the Series and/or (ii) contributions made by the Manager, for which the Manager does not seek reimbursement or (iii) loans by the Manager, for which the Manager may charge a reasonable rate of interest or (iv) issuance of additional Interest in a Series.
Allocation of revenues, expenses and costs will be made amongst the various Series in accordance with the Manager's allocation policy. The Manager's allocation policy requires items that are related to a specific Series to be charged to that specific Series. Items not related to a specific Series will be allocated pro rata based upon the value of the underlying collectible assets or the number of collectibles, as stated in the Manager’s allocation policy and as reasonably determined by the Manager. The Manager may amend its allocation policy in its sole discretion from time to time.
Revenue from the anticipated commercialization of the collectibles will be allocated amongst the Series whose underlying collectibles are part of the commercialization events, based on the value of the underlying collectible assets. No revenues have been generated to date. Offering expenses, other than those related to the overall business of the Manager are funded by the Manager and generally reimbursed through the Series proceeds upon the closing of an offering.
| F-9 |
| Table of Contents |
Acquisition expenses are funded by the Manager and reimbursed from the Series proceeds upon the closing of an offering.
The Sourcing Fee is paid to the Manager from the Series proceeds upon the close of an offering.
Operating Expenses, including storage, insurance, maintenance costs and other Series related Operating Expenses, are expensed as incurred.
NOTE 5 – ADVANCES FROM MANAGER
To fund its organizational and start-up activities as well as to advance funds on behalf of a series to purchase assets, the Manager expects to cover the expenses and costs of the Company and its series. The Manager reserves the right to invoice the Company or a Series from time to time for expenses it incurs in connection with the business and operations of the Company and its Series. Until such time, no amount is due and payable to Manager.
Offering expenses:
Offering expenses relate to the offering for a specific Series and consist of underwriting, legal, accounting, escrow, compliance, filing and other expenses incurred through the balance sheet date that are directly related to a proposed offering and will generally be charged to members' equity upon the completion of the proposed offering. Offering expenses that are incurred prior to the closing of an offering for such Series, are being funded by the Manager and will generally be reimbursed through the proceeds of the offering related to the Series. Should the proposed offering prove to be unsuccessful, these costs, as well as additional expenses to be incurred, will be charged to the Manager.
Operating expenses:
Operating Expenses are costs and expenses attributable to activities of a particular Series and include storage, insurance, transportation (other than the initial transportation from the card location to the Manager’s storage facility prior to the offering, which is treated as an “Acquisition Expense”, as defined below), annual audit and legal expenses and other specific expenses as detailed in the Manager’s allocation policy. We distinguish between pre-closing and post-closing Operating Expenses. Operating Expenses are expensed as incurred.
Except as disclosed with respect to any future offering, expenses of this nature that are incurred prior to the closing of an offering of Series of Interests are funded by the Manager and are not reimbursed by the Company, Series or economic members. These are accounted for as capital contributions by the Manager for expenses related to the business of the Company or a Series.
Upon closing of an offering, a Series becomes responsible for these expenses and finances them either through revenues generated by a Series or available cash reserves at the Series. Should revenues or cash reserves not be sufficient to cover Operating Expenses the Manager may (a) pay such Operating Expenses and not seek reimbursement, (b) loan the amount of the Operating Expenses to the Series at a reasonable rate of interest and be entitled to reimbursement of such amount from future revenues generated by the Series (“Operating Expenses Reimbursement Obligation(s)”), and/or (c) cause additional Interests to be issued in order to cover such additional amounts.
| F-10 |
| Table of Contents |
NOTE 6 – MEMBERS’ EQUITY/(DEFICIT)
The Company has received membership subscriptions for the one LLC series as of December 31, 2019:
| Series Name | Units Offered | Units Tendered | Subscription Amount |
| MTG-ABL90 | 2,000 | 2,000 | $90,000 |
NOTE 7 - DISTRIBUTIONS AND MANAGEMENT FEES
Any available Free Cash Flow of a Series of Interests shall be applied in the following order of priority, at the discretion of the Manager:
|
| 1. | Repayment of any amounts outstanding under Operating Expenses Reimbursement Obligations, plus accrued interest thereon. |
|
|
|
|
|
| 2. | Thereafter, reserves may be created to meet future Operating Expenses for a particular Series. |
|
|
|
|
|
| 3. | Thereafter, 50% (net of corporate income taxes applicable to such Series of Interests) may be distributed as dividends to interest holders of a particular Series. |
|
|
|
|
|
| 4. | The Manager may receive 50% in the form of a management fee, which is accounted for as an expense to the profit and loss statement of a particular Series and revenue to the Manager. |
|
| 5. | If less than the cost of the Underlying Asset(s)of capital is raised, the Manager may defer collection of Manager’s Fees shown in the Total Dollar Amount column and reimbursement for its expenses without forfeiting any right to collect. The Manager may also elect to defer the collection of Fees due the Manager. In either event the Series will pay the Manager ten percent (10%) annual interest on the deferral of the reimbursements or Fees. |
“Free Cash Flow” is defined as the net income (as determined under GAAP) generated by any Series of Interests plus any change in net working capital and depreciation and amortization (and any other non-cash Operating Expenses) and less any capital expenditures related to the relevant Series; provided that Free Cash Flow does not include proceeds from a sale of an Underlying Asset.
As of December 31, 2019, no distributions or management fees were paid by the Company or in respect of any Series.
NOTE 8 – COMMITMENTS, CONTINGENCIES, AND CONCENTRATIONS
Litigation
The Company is not currently involved with and does not know of any pending or threatening litigation against the Company or its member.
Long-term Lease Agreements
The Company does not have any material long-term commitments.
| F-11 |
| Table of Contents |
| Exhibit 4.2 - Form of Subscription Agreement for MTG - 94BOX |
| Exhibit 4.3 - Form of Subscription Agreement for ART – GGMTG |
__________
*Previously Filed
| 79 |
| Table of Contents |
SIGNATURES
Pursuant to the requirements of Regulation A, the issuer certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form 1-A and has duly caused this offering statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Francisco, State of California, on June 29, 2020.
|
| MYTHIC COLLECTION, LLC | ||
|
| By: | Mythic Markets, Inc., its managing member | |
|
| By: | /s/ Joseph Mahavuthivanij | |
|
| Name: | Joseph Mahavuthivanij | |
|
| Title: | CEO | |
|
| By: | /s/ Theodore Stiefel | |
|
| Name: | Theodore Stiefel | |
|
| Title: | CFO | |
This offering statement has been signed by the following persons in the capacities and on the dates indicated.
| Signature |
| Title |
| Date |
|
| ||||
| /s/ Joseph Mahavuthivanij |
| Chief Executive Officer of Mythic Markets, Inc. |
| June 29, 2020 |
| Name: Joseph Mahavuthivanij |
| (Principal Executive Officer) | ||
|
| ||||
| /s/ Theodore Stiefel |
| Chief Financial Officer of Mythic Markets, Inc. |
| June 29, 2020 |
| Name: Theodore Stiefel |
| (Principal Financial Officer) |
| 80 |
EXHIBIT 2.2
| SECOND AMENDED AND RESTATED |
| |
| SERIES LIMITED LIABILITY COMPANY AGREEMENT Mythic Collection, LLC | ||
| A Delaware Series Limited Liability Company |
| |
| April 2, 2020 |
|
|
TABLE OF CONTENTS
| 1. | Recitals |
| 1 |
|
| 1.1 | Headings & Definitions |
| 1 |
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| 2. | Formation of Company |
| 1 |
|
| 2.1 | Name of Company |
| 2 |
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| 2.2 | Principal Place of Business |
| 2 |
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| 2.3 | Registered Office and Registered Agent |
| 2 |
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| 2.4 | Term |
| 2 |
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| 2.5 | Founder Contributions and Compensation |
| 2 |
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| 3. | Series of the Company |
| 3 |
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| 3.1 | Series Creation |
| 3 |
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| 3.2 | Series Management |
| 3 |
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| 3.3 | Series Membership |
| 4 |
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| 3.4 | Subsidiaries of Series |
| 4 |
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| 3.5 | Series Debt Liability; Books and Records |
| 5 |
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| 4. | Business Purpose |
| 5 |
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| 4.1 | Business of Company, Its Series, and Their Subsidiaries |
| 5 |
|
| 4.2 | Affiliates of the Founder May Provide Services |
| 6 |
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| 5. | Members’ Names and Addresses; Member Classes |
| 5 |
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| 5.1 | Company and Series Members |
| 5 |
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| 5.2 | Series Member Classes |
| 6 |
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| 6. | Rights and Duties of Management |
| 6 |
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| 6.1 | Management of the Company and Series |
| 6 |
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| 6.2 | Exclusive Authority of the Series Managers |
| 7 |
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| 6.3 | Authority of the Series Members |
| 8 |
|
| 6.4 | Series Manager’s Liability for Certain Acts |
| 9 |
|
| 6.5 | Bank Accounts |
| 9 |
|
| 6.6 | Indemnity of the Series Managers, Employees and Other Agents |
| 9 |
|
| 6.7 | Salaries |
| 10 |
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| 6.8 | Resignation |
| 10 |
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| 6.9 | Removal |
| 10 |
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| 6.10 | Vacancies |
| 11 |
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| 7. | Rights and Obligations of Members |
| 11 |
|
| 7.1 | Limitation of Liability |
| 11 |
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| 7.2 | List of Members |
| 12 |
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| 7.3 | Company Books |
| 12 |
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| 7.4 | Priority and Return of Capital |
| 12 |
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| 7.5 | Liability of a Series Member to the Company |
| 12 |
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| 8. | Meetings of Members |
| 13 |
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| 8.1 | Meetings |
| 13 |
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| 8.2 | Place of Meetings |
| 13 |
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| 8.3 | Notice of Meetings |
| 13 |
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| Mythic Collection, LLC | Amended and Restated Company Agreement |
| ii |
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| 8.4 | Meetings of All Voting Members |
| 13 |
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| 8.5 | Record Date |
| 13 |
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| 8.6 | Quorum |
| 14 |
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| 8.7 | Manner of Acting |
| 14 |
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| 8.8 | Proxies |
| 14 |
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| 8.9 | Action by Members without a Meeting |
| 14 |
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| 8.10 | Waiver of Notice |
| 15 |
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| 9. | Contributions to the Company and Capital Accounts |
| 15 |
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| 9.1 | Capital Contributions |
| 15 |
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| 9.2 | Voluntary Additional Capital Contributions |
| 15 |
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| 9.3 | Time of Capital Contributions; Withdrawal Not Permitted |
| 16 |
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| 9.4 | Loans |
| 16 |
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| 9.5 | Company Interests |
| 16 |
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| 9.6 | Voting Units |
| 16 |
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| 9.7 | Series Ownership |
| 17 |
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| 9.8 | Capital Accounts |
| 17 |
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| 10. | Distributions |
| 17 |
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| 10.1 | Distributable Cash |
| 17 |
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| 10.2 | Distribution Rules |
| 17 |
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| 10.3 | Limitation upon Distributions |
| 18 |
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| 10.4 | No Interest on Capital Contributions |
| 18 |
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| 11. | Books and Records, Bank Accounts, Tax Matters |
| 18 |
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| 11.1 | Accounting Method |
| 18 |
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| 11.2 | Records, Audits and Reports |
| 18 |
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| 11.3 | Returns and Other Elections |
| 19 |
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| 12. | Voluntary Transfers; Additional and Substitute Members |
| 19 |
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| 12.1 | Transfers Restricted |
| 19 |
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| 12.2 | Percentage of Limitations or Transfers |
| 20 |
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| 12.3 | Voluntary Withdrawal, Resignation or Disassociation Prohibited |
| 20 |
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| 12.4 | Admission of Additional Series Members |
| 20 |
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| 12.5 | Transfer Prohibited Except as Expressly Authorized Herein |
| 20 |
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| 12.6 | Conditions for Permissible Voluntary Transfer |
| 21 |
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| 12.7 | Substitution |
| 21 |
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| 12.8 | Voluntary Transfer; Right of First Refusal |
| 22 |
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| 13. | Involuntary Transfer; Disassociation |
| 24 |
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| 13.1 | Disassociation for Cause |
| 24 |
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| 13.2 | Disassociation by Operation of Law |
| 24 |
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| 13.3 | Effect of Disassociation |
| 25 |
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| 13.4 | Sale and Valuation of a Disassociated Member’s Interest |
| 26 |
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| 13.5 | Closing on a Disassociated Members’ Interest |
| 26 |
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| 13.6 | Payment for a Disassociated Member’s Interest |
| 27 |
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| 13.7 | Transfer of Economic Interest; Rights of an Involuntary Transferee |
| 27 |
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| 14. | Dispute Resolution |
| 28 |
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| 14.1 | Notice of Disputes |
| 28 |
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| 14.2 | Negotiation of Disputes |
| 28 |
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| 14.3 | Mandatory Alternative Dispute Resolution |
| 29 |
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| Mythic Collection, LLC | Amended and Restated Company Agreement |
| iii |
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| 14.4 | Mediation |
| 30 |
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| 14.5 | Arbitration |
| 30 |
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| 15. | Termination of Series and Company |
| 31 |
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| 15.1 | Dissolution of the Company |
| 31 |
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| 15.2 | Termination of a Series |
| 32 |
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| 15.3 | Winding Up of a Series on Termination of Such Series |
| 32 |
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| 15.4 | Winding Up On Dissolution of the Company |
| 33 |
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| 15.5 | Certificate of Cancellation |
| 33 |
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| 15.6 | Effect of Filing Certificate of Cancellation or Equivalent |
| 33 |
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| 15.7 | Returns of Contributions Nonrecourse to Other Members |
| 33 |
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| 16. | Miscellaneous Provisions |
| 34 |
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| 16.1 | Notices |
| 34 |
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| 16.2 | Binding Effect |
| 34 |
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| 16.3 | Governing Law |
| 34 |
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| 16.4 | Waiver of Action for Partition |
| 34 |
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| 16.5 | Amendments |
| 33 |
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| 16.6 | Execution of Additional Instruments |
| 35 |
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| 16.7 | Construction |
| 35 |
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| 16.8 | Waivers |
| 35 |
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| 16.9 | Severability |
| 35 |
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| 16.10 | Creditors |
| 36 |
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| 16.11 | Counterparts |
| 36 |
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| 16.12 | Integration |
| 36 |
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| 17. | Signatures |
| 36 |
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| Appendix A: Capital Accounts and Allocations |
| A-1 |
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| Appendix B: Definitions |
| B-1 |
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| Appendix C: List of Series and Underlying Asset(s) of the Series |
| C-1 |
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| Mythic Collection, LLC | Amended and Restated Company Agreement |
| iv |
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SECOND AMENDED AND RESTATED
SERIES LIMITED LIABILITY COMPANY AGREEMENT
FOR
MYTHIC COLLECTION, LLC,
A DELAWARE LIMITED LIABILITY COMPANY
THIS AMENDED AND RESTATED SERIES LIMITED LIABILITY COMPANY AGREEMENT (Company Agreement) for Mythic Collection, LLC, a Delaware limited liability company (the Company) is effective as of the date executed below, and is the governing document by and between the Company, its Founder (Mythic Markets, Inc., a Delaware corporation), its Series, and the Series Managers and Series Members. This Agreement constitutes the entire agreement between its Founders, its Series, and its Series Managers, the Series Members and supersedes and cancels all prior written and oral agreements and understandings with respect to the subject matter of this Agreement.
1. Recitals
WHEREAS, the parties hereto desire to enter into this Agreement; and
WHEREAS, it is intended by the parties hereto that Underlying Asset(s) or Asset(s) shall be acquired by a Series of the Company and that the debts, liabilities and obligations incurred, contracted for or otherwise existing with respect to a particular Series of the Company will be enforceable against the assets of such Series only, and not against the assets of the Company generally or any other Series thereof, and none of the debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to the Company generally or any other Series thereof shall be enforceable against the assets of such Series; and
NOW, THEREFORE, in consideration of the mutual promises and obligations contained herein, the parties, intending to be legally bound, hereby agree as follows:
1.1 Headings & Definitions
The headings and subheadings in this Agreement are included for convenience and identification only and are in no way intended to describe, interpret, define or limit the scope, extent or intent of this Agreement, a Series Agreement or any provision hereof.
Capitalized terms in this Agreement (and any associated Series Agreements) are defined in Appendix B hereof.
2. Formation of Company
The Founder has executed and delivered a Certificate of Formation to the Delaware Secretary of State in accordance with and pursuant to the Delaware Limited Liability Company Act, as codified in the Delaware Code, Title 6, Chapter 18 (the Act). Upon execution of this Agreement, without the need for the consent or other action of any Person or members of any Series, the Founder shall be admitted as the sole Member of the Company not associated with any Series.
| Mythic Collection, LLC | Amended and Restated Company Agreement |
| 1 |
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The Founder (as the sole Member of the Company) hereby ratifies and approves formation of the Company as a Delaware Series limited liability company under and pursuant to the provisions of the Act and agrees that the rights, duties and liabilities of the Founder, Series Managers and Series Members shall be as provided in the Act, except as otherwise provided herein. The Company shall not acquire assets or incur liabilities or other obligations unless they are acquired or incurred on behalf of a Series and not with respect to the Company generally.
2.1 Name of Company
The name of the Company shall be Mythic Collection, LLC, a Delaware Series limited liability company. The business of the Company may be conducted in compliance with all applicable laws under the Company or its Series’ name, or such assumed name as may be designated by the Founder or a Series Manager.
2.2 Principal Place of Business
The principal place of business of the Company and the Founder is:
Mythic Collection, LLC
c/o Joe Mahavuthivanij
16 Lagoon Court
San Rafael, CA 94903
The Company and its Series may locate its place of business and registered office at any other place as the Founder may from time-to-time deem advisable. The Founder or Series Managers will convey any changes in addresses after inception of the Company by sending correspondence to all affected Persons.
2.3 Registered Office and Registered Agent
The Company shall maintain a registered agent in Delaware at all times during operation of the Company or any Series. The Founder may change the registered office and registered agent of the Company at any time by filing the address of the new registered office and/or the name of the new registered agent with the Secretary of State of the State of Delaware pursuant to the Act.
2.4 Term
The Company and each of its Series shall have perpetual existence unless the Company is earlier dissolved in accordance with the provisions of this Agreement or the terms of a Series Agreement.
2.5 Founder Contributions and Compensation
The Founder, through its members, has made such Capital Contributions to the Company as necessary for its formation. The Founder does not plan to collect Fees or Distributions from any of the Series on account of its role as the Founder, but it may receive Fees or Distributions to the extent it or an Affiliate acts as a Series Manager as described in a Series Agreement.
| Mythic Collection, LLC | Amended and Restated Company Agreement |
| 2 |
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The Founder (except in its capacity as a Series Manager or Series Member) shall not acquire assets for or incur liabilities or other obligations with respect to the Company or any Series unless the Founder (as a Series Manager) shall be deemed admitted as a Member of a newly created Series upon its execution of a counterpart signature page to a Series Agreement.
The Founder may be reimbursed pro rata from each Series for common expenses such as accounting, insurance, office space, asset managers or other employees who administer services to the Series’ on behalf of the Company. Additionally, the Founder may grant Interests in its Series to others who provide services to the Company and/or a Series. The Founder may determine and collect a pro-rata amount from each Series after considering the actual time spent on behalf of each Series, the relative revenue generated by a Series, or any other means the Founder deems fair and reasonable.
3. Series of the Company
In accordance with this Agreement, the Founder may from time to time form such Series of the Company as may be necessary to meet the Company’s business objectives (See Article 4.1).
3.1 Series Creation
Each Series will have the following characteristics:
| · | A separate business purpose or investment objective; |
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| · | Series Members who will make Capital Contributions or Non-Capital Contributions the Series to further its separate business objectives (see Article 4.1); |
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| · | Separate rights, powers or duties with respect to management, control, or disposition of Underlying Asset(s) of a Series; |
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| · | Separate obligations or rights to share in Profits and Losses associated with Underlying Asset(s) of a Series. |
Each Series Agreement and its exhibits will describe the purpose, Underlying Asset(s), characteristics, capital requirements, and investment strategies for a Series.
3.2 Series Management
Management of each Series will automatically be vested in the Founder (as the Series Manager) or an Affiliate of the Founder (owned or controlled by the Founder or its members), as designated by the Founder in a Series Agreement. The Founder has the exclusive authority to designate itself as the Series Manager or to designate a Series Manager, who may be an Affiliate of the Founder, its members, or a Series Member.
| Mythic Collection, LLC | Amended and Restated Company Agreement |
| 3 |
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The Founder may designate a Series Manager to accommodate:
| · | The request of a lender to include an additional loan guarantor for an acquisition, refinance or other loan against Underlying Asset(s) of the Series; |
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| · | Active participants who may participate in asset procurement, asset management, fundraising or other needed services on behalf of a Series; or |
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| · | For any other reason that the Founder, in its sole discretion, deems appropriate or beneficial for a Series. |
A Series Manager (or its members or Affiliates) may be a manager of one or more Series and may make Capital or Non-Capital Contributions to such Series in exchange for its Membership Interests, management designation, Fees and/or Distributions.
3.3 Series Membership
An Investor who makes Capital Contributions or Non-Capital Contributions to a Series and is accepted by the Series Manager shall become a “Series Member” of that Series, but not of the Company generally, or of any other Series. A Series Member may be a Member of one or more Series. A Series Member may earn Distributions only from the Series to which it is admitted as a Member.
The Founder shall maintain a list of all Series, the respective Series Members, and the Series Managers. Each Series Agreement will each identify all Series Members and the Series Manager. The Founder shall periodically update such lists as necessary to update the information contained therein, including, without limitation, the establishment of additional Series, the admission or Disassociation of Series Members, the respective Series Managers, and all relevant contact information.
3.4 Subsidiaries of Series
The Founder may form single purpose limited liability companies (Subsidiaries) on behalf of a Series as necessary to:
| · | Take title to Underlying Asset(s); |
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| · | Borrow money to finance the usually required by a lender; |
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| · | Execute a lease on a Underlying Asset(s) on behalf of a Series (as the lessee); |
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| · | Execute a purchase option on a Underlying Asset(s) (as an optionee). |
Where such Subsidiaries are formed, the sole Member of the Subsidiary will be a Series, unless the Series joint ventures with another entity or Person to acquire the Underlying Asset(s). In any case, the Founder or a designated Series Manager shall retain management control of the Subsidiary on behalf of the Series and its Members.
| Mythic Collection, LLC | Amended and Restated Company Agreement |
| 4 |
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3.5 Series Debt Liability; Books and Records
No debt, liability or obligation of a Series shall be a debt, liability or obligation of the Company or any other Series. The debts, liabilities and obligations incurred, contracted for or otherwise existing with respect to a Series shall be enforceable against the assets of such Series or its Subsidiaries only and not against any other assets of the Company generally or any other Series.
The Founder shall cause each Series to maintain separate and distinct records for its Subsidiaries and Property. All assets or liabilities associated with a Series shall be accounted for separately from the other assets or liabilities of the Company, or any other Series.
3.6 Operating Expenses
Operating Expenses are costs and expenses attributable to the activities of the Series (collectively, “Operating Expenses”) including:
| · | costs incurred in managing the Underlying Asset, including, but not limited to storage, maintenance and transportation costs (other than transportation costs described in Acquisition Expenses); |
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| · | costs incurred in preparing any reports and accounts of the Series, including any tax filings and any annual audit of the accounts of the Series (if applicable) or costs payable to any third-party registrar or transfer agent and any reports to be filed with the Commission including periodic reports on Forms 1-K, 1-SA and 1-U; |
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| · | any indemnification payments; and |
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| · | any and all insurance premiums or expenses in connection with the Underlying Asset, including insurance required for utilization at and transportation of the Underlying Asset to events under Fan Club Experiences (as described in “Description of the Business – Business of the Company”) (excluding any insurance taken out by a corporate sponsor or individual paying to showcase an asset at an event but including, if obtained, directors and officers insurance of the directors and officers of the Manager or the Series Manager). |
4. Business Purpose
4.1 Business of Company, Its Series, and Their Subsidiaries
The business objectives of the Company and each of its Series, and their Subsidiaries shall be:
| · | To acquire (by purchase, purchase option or installment contract) collectible assets for purposes of investment, management, operation, and disposition by sale or lease/option to a third-party or to an Affiliate of the Founder or its members. |
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| · | To transact any and all lawful business for which a limited liability company may be formed under the Act in furtherance of the business objectives stated in the preceding paragraph; and |
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| · | To transact all business necessary, appropriate, advisable, convenient or incidental to any of the foregoing provisions. |
| Mythic Collection, LLC | Amended and Restated Company Agreement |
| 5 |
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The Founder and each Series shall have the power to do any or all of the acts necessary, appropriate, advisable, incidental or convenient to or for the furtherance of the purposes and business described herein and for the protection or benefit of the Company and its Series. The Company and each Series shall have any or all of the powers that may be exercised on behalf of the Company or such Series by any Person in accordance with the Act.
4.2 Affiliates of the Founder May Provide Services
The Founder (or its members), or an Affiliate may provide or participate in Asset-related services for the Series and their Subsidiaries. So long as the rates a Series pays for such services are commensurate with third-party rates, this shall not be considered a conflict of interest, nor will contracts related to such services require the consent of any Person other than the Series Manager.
5. Members’ Names and Addresses; Member Classes
5.1 Company and Series Members
The name and address of the Founder is provided in Article 2.2 hereof. The name of respective Series Members will be provided in Appendices attached to the applicable Series Agreement.
5.2 Series Member Classes
On formation of a Series, the Founder will cause to be drafted a Series Agreement, designating such Member Classes as may be necessary, appropriate, or advantageous for operation of the Series and meeting its specific business objectives. On creation of a Series, the Founder may designate certain Member Classes having preferential rights to compensation or a return of capital over other, subordinate classes. Assignment of Series Member Classes may be based on the amount, character (loan v. equity), or timing of an investor’s Capital Contribution to a Series, as the Founder deems appropriate when forming the Series.
6. Rights and Duties of Management
6.1 Management of the Company and Series
The Founder shall be vested with the authority to act as and on behalf of the Company, and shall have the sole and exclusive authority to appoint an initial Manager for each Series. The business and affairs of a Series shall be vested in the Manager and Members of that Series in accordance with its Series Agreement. In the absence of a Series Manager, the Founder shall be vested with the authority to act as and on behalf of the Series as its Manager. A Series Manager need not be a member of that Series or a member of the Company. Series Managers may receive compensation in the form of Fees and/or Series Membership Interests for which they may receive Distributions.
| Mythic Collection, LLC | Amended and Restated Company Agreement |
| 6 |
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The Founder reserves the exclusive authority to enter into selling or other agreements with FINRA registered selling agents or brokers on behalf of the Company or its Series. The Company may such pay finder’s fees or commissions, or issue subordinate interests in a Series to such Persons for introducing or referring Investors who purchase Series Interests. The amount of cash paid by the Company for finder’s fees or commissions paid to such Persons, if any, may reduce the proceeds available for investment in a Series, although Investors so referred will be given full credit for the total amount of their Capital Contributions. However, any right to Distributions granted by the Manager to such Persons as compensation for Investor referrals will come from the Series Manager’s allocation, and will not impact the Distributions or dilute the Percentage Interests of Investors or their Member Class.
6.2 Exclusive Authority of the Series Managers
A Series Manager, if one or more are designated by the Founder, shall be vested with the authority to act as and on behalf of such Series. The Series Manager(s) shall serve until each of its successors are elected by the Members of that Series. Unless otherwise specified in a Series Agreement, the Series Manager for each Series will be Mythic Collection, LLC, a Delaware limited liability company (or its Affiliates).
Without limiting the general authority of a Series Manager provided in Article 6.2 a Series Manager shall have the sole power and authority, on behalf of a Series to:
| · | Acquire title or management control of Underlying Asset(s) (by purchase, lease, purchase option, installment contract) from any Person as the Series Manager(s) may determine, whether or not such Person is directly or indirectly affiliated or connected with the Founder or any Series Member; |
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| · | Borrow money for a Series (or their Subsidiaries) from banks, other lending institutions, other Series Members, or the Founder, on such terms as the Series Manager deems appropriate, and in connection therewith, to hypothecate, encumber and grant security Interests in the assets of a Series to secure repayment of the borrowed sums. No debt shall be contracted or liability incurred by or on behalf of any Series except by the Series Manager(s), or, to the extent permitted under the Act and this Agreement, by agents or employees associated with a Series or the Series Manager(s) expressly authorized by the Series Manager(s) to contract such debt or incur such liability; |
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| · | Purchase liability and other insurance to protect the property and business or the Company or Series, and/or directors and officers for the assets of a Series, the Series itself, the Series Manager, the Company, or its Founder; |
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| · | Hold, own and/or operate such assets in the name of a Series or its Subsidiary, as appropriate; |
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| · | To joint venture with other companies to accomplish the objectives of the Company or a Series; |
| Mythic Collection, LLC | Amended and Restated Company Agreement |
| 7 |
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| · | Form new, single purpose entities, e.g., limited liability companies, limited partnerships, corporations, or trusts, (Subsidiaries) to take title to or management control of a specific Underlying Asset(s), so long as the Subsidiary is managed by the Founder or an Affiliate; |
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| · | Sell or otherwise dispose of all or substantially all of the assets of a Series as part of a single transaction or plan as long as such disposition is not in violation of or a cause of a default under any other agreement to which such Series may be bound; |
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| · | Execute on behalf of a Series all instruments and documents, including, without limitation, checks; drafts; notes and other negotiable instruments; mortgages or deeds of trust; security agreements; financing statements; documents providing for the acquisition, mortgage or disposition of such Series’ property; assignments; bills of sale; leases; and any other instruments or documents necessary, appropriate, convenient, advisable or incidental to the business of such Series; |
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| · | Employ accountants, legal counsel, managing agents or other experts to perform services for the Company with respect to a Series; |
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| · | Pay, collect, compromise, litigate, arbitrate, or otherwise adjust or settle any and all other claims or demands of or against such Series or to hold such proceeds against the payment of contingent liabilities; |
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| · | Enter into any and all other agreements on behalf of the Company with respect to a Series, as appropriate; and |
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| · | Do and perform all other acts as may be necessary, appropriate, convenient, advisable or incidental to the conduct of such Series’ business. |
Each Series Manager shall have the exclusive power and authority to bind a Series on any matter described above, and shall be deemed to be authorized by the Series Members to act as an agent of the Company only with respect to such Series.
6.3 Authority of the Series Members
The Series Members shall have the authority to direct, manage and control the business and affairs of their respective Series on such matters, if any, on which they may be entitled to vote as described in a Series Agreement. Such voting rights shall be exercised by the Series Members in accordance with their Percentage Interests in the Series (or their Member Class) as to the management and conduct of that Series only (not generally with respect to the Company or any other Series). Unless otherwise specified in a Series Agreement, an affirmative vote of Series Members holding a Majority of Interests in a Series shall control on all such matters in which they are entitled to vote.
The affirmative vote of a Majority of Interests of all of the Members associated with a Series shall be required for the Company to merge or consolidate with or into, or convert into, another entity, (but not to joint venture). Unless authorized to do so by this Agreement or specifically by its Series Manager, no attorney-in-fact, employee or other agent of the Company or such Series shall have any power or authority to bind the Company or such Series in any way, to pledge the Company’s or a Series’ credit or to render the Company or a Series liable for any purpose.
| Mythic Collection, LLC | Amended and Restated Company Agreement |
| 8 |
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6.4 Series Manager’s Liability for Certain Acts
Each Series Manager shall perform its duties in good faith, in a manner it reasonably believes to be in the best interests of the Company and such Series, and with such care as an ordinarily prudent person in a like position would use under similar circumstances. A Series Manager shall not be liable to the Company, the Series with which it is associated, or to any other Series Member or Series for any loss or damage sustained by such Series or Series Member, unless the loss or damage shall have been the result of fraud, deceit, gross negligence, willful misconduct or a wrongful taking by the Series Manager.
6.5 Bank Accounts
A Series Manager or the Founder may from time to time open bank accounts in the name of the Company or such Series, or in the name of a Subsidiary, as appropriate, and the Founder and Series Manager shall be the only signatories thereon, unless such Series Manager determines otherwise.
6.6 Indemnity of the Series Managers, Employees and Other Agents
To the fullest extent permitted by applicable law, subject to approval of each Series Manager or the Founder, all officers, directors, shareholders, partners, members, employees, representatives or agents of the Founder or a Series Manager, or their respective affiliates, employees or agents (each, a “Covered Person”) shall be entitled to indemnification from such Series (and the Company generally) for any loss, damage or claim incurred by such Covered Person by reason of any act or omission performed or omitted by such Covered Person in good faith on behalf of the Founder or such Series and in a manner reasonably believed to be within the scope of authority conferred on such Covered Person by this Agreement and any Series Agreement, except that no Covered Person shall be entitled to be indemnified for any loss, damage or claim incurred by such Covered Person by reason of fraud, deceit, gross negligence, willful misconduct or a wrongful taking with respect to such acts or omissions; provided, however, that any indemnity under this Article 6.6 shall be provided out of and to the extent of the assets of the such Series only, and no other Covered Person or any other Series or the Company or the Founder shall have any liability on account thereof. Such Covered Persons will have no duty or obligation (fiduciary or otherwise) to give any consideration to any interest of or factors affecting us or any of our Members and will not be subject to any different standards imposed by our operating agreement, the Delaware Limited Liability Company Act or under any other law, rule or regulation or in equity. These modifications of fiduciary duties are expressly permitted by Delaware law.
To the fullest extent permitted by applicable law, subject to approval of the Founder or a Series Manager, all expenses (including legal fees) incurred by a Covered Person in defending any claim, demand, action, suit or proceeding shall, from time to time, be advanced by such Series prior to the final disposition of such claim, demand, action, suit or proceeding upon receipt by such Series of an undertaking by or on behalf of the Covered Person to repay such amount if it shall be determined that the Covered Person is not entitled to be indemnified as authorized in this Article 6.6.
The Founder (on behalf of the Company as a whole) or a Series may purchase and maintain insurance, to the extent and in such amounts as its Series Manager(s) and/or the Founder shall deem reasonable, on behalf of Covered Persons and such other Persons as the Founder or Series Manager(s) shall determine, against any liability that may be asserted against or expenses that may be incurred by any such Person in connection with the activities of the Company or a Series, or such indemnities in general, regardless of whether a Series would have the power to indemnify such Person against such liability under the provisions of this Agreement or a Series Agreement.
| Mythic Collection, LLC | Amended and Restated Company Agreement |
| 9 |
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The Founder (on behalf of the Company as a whole) or a Series may enter into indemnity contracts with Covered Persons and such other Persons as the Founder or a Series Manager shall determine and may, but are not required to, adopt written procedures pursuant to which arrangements are made for the advancement of expenses and the funding of obligations under this Article 6.6 and containing such other procedures regarding indemnification as are appropriate.
6.7 Salaries
Neither the Founder nor any Series Manager is expected to earn a salary. However, salaries, fees or other compensation (such as Distributions on account of its Series Membership Interest) of a Series Manager may be fixed from time to time, as specified in a Series Agreement or other relevant agreement, or subsequently by an affirmative vote of the Series Members holding at least a Majority of Interests of such Series. This provision is expected to accommodate the Series Members’ need to hire a replacement Series Manager (who may not be a Series Member or an Affiliate of the Founder), in the unlikely event that the initial Series Manager is removed or has resigned or is no longer able to serve as the Series Manager and the Founder is unable or unwilling to serve in its stead (see Articles 6.8 and 6.9 below).
6.8 Resignation
Any Series Manager may resign at any time by giving written notice to the Series Members and the Founder. The resignation of a Series Manager shall take effect upon receipt of notice thereof or at such later time as shall be specified in such notice; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. The resignation of a Series Manager who is also a Member of a Series shall not affect its Series Membership Interests and shall not constitute its withdrawal as a Series Member.
6.9 Removal
At a meeting called expressly for that purpose, a Series Manager may be removed at any time, for Good Cause, by the decision of such Series Members owning more than seventy-five percent (75%) of the Percentage Interests in that Series. Good Cause shall include only the following:
| · | Committing any of the acts described in Article 6.4 hereof (including fraud, deceit, gross negligence, willful misconduct or a wrongful taking); |
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| · | A breach of a Series Manager’s duties or authority hereunder; |
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| · | Bad faith; |
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| · | Death or disability wherein the Series Manager (or each of the members of the Manager with authority to Manage the Series) dies or becomes physically, mentally, or legally incapacitated such that it can no longer effectively function as the Series Manager or the dissolution, liquidation or termination of any entity serving as a Series Manager and no other member of the Series Manager is willing or able to effectively perform the Series Manager’s duties; |
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| · | Disappearance wherein the Series Manager (or each of the its members) fails to return phone calls and/or written correspondence (including email) for more than thirty days (30) without prior notice, or failure to provide the Series Members with new contact information; or |
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| · | Issuance of a legal charging order and/or judgment by any judgment creditor against the Manager’s Interest in Cash Distributions or Fees from the Company. |
6.10 Vacancies
A Series Manager’s vacancy shall be filled by:
| · | The Founder or its designee, unless the Founder is the Series Manager is the subject of the removal action. |
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| · | In that event the replacement Series Manager will be elected by a vote of a Majority of Interests of such Series Members at either a special meeting or by written consent. |
A Series Manager elected to fill a vacancy shall be elected for the un-expired term of its predecessor in office and shall hold office until expiration of such term and until its successor shall be elected and shall qualify or until its, resignation or removal.
7. Rights and Obligations of Members
7.1 Limitation of Liability
7.1.1 Limitation of Liability of the Company
Except as otherwise provided in this Agreement, or the Act, the debts, obligations and liabilities of the Company where such liabilities are incurred in its own name and not with respect to a Series, whether arising in contract, torts or otherwise, shall be solely the debts, obligations and liabilities only of the Company, and no Series, Series Member or Series Manager shall be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a Series Member or Series Manager.
7.1.2 Limitation of Liability of a Series
Except as otherwise provided in its Series Agreement, or the Act, the debts, obligations and liabilities of a Series, where such liabilities are incurred in its own name and not generally with respect to the Company, whether arising in contract, torts or otherwise, shall be solely the debts, obligations and liabilities only of that Series, and neither the Members or Manager of that Series (nor any other Series or its Members or Manager), shall be obligated personally for any such debt, obligation or liability solely by reason of being a Member or Manager of either the Series that is the subject of the liability or another Series of the Company. Each Series Member shall nevertheless be liable for its obligations to make Capital Contributions pursuant to Articles 9.1 and 9.2.
| Mythic Collection, LLC | Amended and Restated Company Agreement |
| 11 |
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7.2 List of Members
Upon the written request of any Series Member for any purpose reasonably related to such Member’s Interest in such Series, the Series Manager shall provide to such Member a list showing the names, and Membership Interests of all Series Members. The Series Manager will maintain as confidential all Members’ contact information to the extent provided by the Act and other applicable law.
7.3 Company Books
The Founder shall maintain and preserve, during the existence of such Series, the accounts, books and other relevant Series documents described in Article 11 at the Founder’s place of business. Notwithstanding anything in this Agreement to the contrary, the Founder, in concert with each Series Manager will be responsible for maintaining separate and distinct records for each and every Series, and the assets associated with each Series shall be held and accounted for separately from the other assets of the Company or of any other Series.
Upon reasonable written request stating the reason for the request, a Series Member shall have the right, at a time during ordinary business hours, as reasonably determined by such Series Manager(s), to inspect and copy, at the requesting Series Member’s expense, the books and records for such Series and its Subsidiaries for a business purpose reasonably related to such Series Member’s Interest with respect to such Series. The Series Manager may choose to provide the requested information electronically, at its option.
No Series Member or Series Manager will have the right to inspect and copy the books and records of any other Series of which it is not a Member or a Manager, nor of the Company generally, unless specifically required by the Act.
The Company, Founder, and Series Managers will maintain confidentiality of the Series Members contact information to the extent allowed under the Act.
7.4 Priority and Return of Capital
No Series Member shall have priority over any other Series Member either as to the return of Capital Contributions or as to allocation of Profits, Losses or Distributions; provided that this Article 7.4 shall not apply to loans made to the Company by the Founder, a Series Manager or Series Member with respect to a Series, unless Member Classes specifically having such priority are provided in a Series Agreement.
7.5 Liability of a Series Member to the Company
A Series Member who receives a Distribution from the Company with respect to a Series is liable to the Company with respect to such Series or to others only to the extent provided by the Act and other applicable law.
| Mythic Collection, LLC | Amended and Restated Company Agreement |
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8. Meetings of Members
8.1 Meetings
Meetings of Series Members, for any purpose or purposes, may be called by any Series Manager, or by the Series Members holding at least twenty-five percent (25%) of the Percentage Interests of such Series on notice to the Series Manager, but there shall be no requirement that there be an annual meeting.
8.2 Place of Meetings
A Series Manager may designate any place, either within or outside the State of Delaware, as the place of meeting for any meeting of the Series Members. If a designation is not made, or if a special meeting is otherwise called, the place of meeting shall be the principal place of business of the Company. Any meeting of Series Members may also take place by teleconferencing as long as a quorum (as defined in Article 8.6 below) participate in the same.
8.3 Notice of Meetings
Except as provided in Article 8.4, written notice stating the place, day and hour of the meeting and the purpose or purposes for which the meeting is called shall be delivered not less than three (3) nor more than thirty (30) days before the date of the meeting, either personally, by email, or by mail, by or at the direction of a Series Manager or Person calling the meeting, to each Member entitled to vote at such meeting. If email, such notice shall be deemed delivered one (1) business day after being sent, and if mailed, such notice shall be deemed to be delivered two (2) business days after being deposited in the United States mail, addressed to the Member at its address as it appears on the books of the Company, with postage thereon prepaid.
8.4 Meetings of All Voting Members
If all Members of a Series shall meet at any time and place, either within or outside the State of Delaware, or participate in a teleconference meeting, and consent to the holding of a meeting at such time and place or by teleconference, such meeting shall be valid without call or notice, and at such meeting lawful action may be taken.
8.5 Record Date
Unless otherwise stated in a Series Agreement, for the purpose of determining Series Members entitled to notice of or to vote at any meeting of Series Members or any adjournment thereof, or Series Members entitled to receive payment of any Distribution, or in order to make a determination of Series Members on a specific date for any other purpose, the day immediately prior to the date on which notice of the meeting is mailed or the day immediately prior to the latest date on which the such Distribution will be calculated (i.e., the day before the Distribution is made), as the case may be, shall be the record date for such determination of Series Members. When a determination of Series Members entitled to vote at any meeting of Series Members has been made as provided in this Article 8.5, such determination shall apply to any adjournment thereof.
| Mythic Collection, LLC | Amended and Restated Company Agreement |
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8.6 Quorum
Series Members holding at least two-thirds (2/3) of all Percentage Interests of such Series, represented in person or by proxy, shall constitute a quorum at any meeting of Series Members. In the absence of a quorum at any such meeting, Series Members holding a majority of the Percentage Interests so represented may adjourn the meeting from time to time for a period not to exceed sixty (60) days without further notice. However, if the adjournment is for more than sixty (60) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each Series Member of record entitled to vote at the meeting. If a quorum is present or represented at such adjourned meeting, any business may be transacted which might have been transacted at the meeting as originally noticed. The Series Members present at a duly noticed meeting may continue to transact business until adjournment, notwithstanding the withdrawal during such meeting of that number of Percentage Interests whose absence would cause less than a quorum.
8.7 Manner of Acting
If a quorum is present, the affirmative vote of Series Members holding a Majority Interest in a Series shall be the act of the Series Members, unless the vote of a greater or lesser proportion or number is otherwise required by the Act or expressly by this Agreement or a Series Agreement. Only the Series Members of each specific Series may vote or consent upon any matter concerning that Series, and their vote or consent, as the case may be, shall be counted in the determination of whether the matter was approved by the Series Members.
8.8 Proxies
At all meetings of Series Members, a Series Member may vote in person or by proxy executed in writing by the Member or by a duly authorized attorney-in-fact. Such proxy shall be filed with the Manager before or at the time of the meeting. No proxy shall be valid after eleven months from the date of its execution, unless otherwise provided in the proxy. A proxy may only be given verbally during a meeting taking place by teleconferencing and shall expire at the termination of said teleconference.
8.9 Action by Members without a Meeting
Action required or permitted to be taken at a meeting of Series Members may be taken without a meeting and without prior notice if consents, whether oral or written, of Series Members are received in writing (by email originating from a Members’ email account, or mail) representing the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all Members of such Series were present and voted, and all Series Members entitled to vote were notified of the meeting.
| Mythic Collection, LLC | Amended and Restated Company Agreement |
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8.10 Waiver of Notice
When any notice is required to be given to any Member, a waiver thereof in writing signed by the Member entitled to such notice, whether before, at, or after the time stated therein, or the participation in a teleconference meeting, shall be equivalent to the giving of such notice.
9. Contributions to the Company and Capital Accounts
9.1 Capital Contributions
The Founder may raise Capital Contributions for each Series by the sale of Units in each Series via the Company’s Private Placement Memorandum. The Founder will determine the minimum or maximum number of Units to be sold on behalf of a Series, and the minimum investment amount required of an individual Investor in a Series. Each Series Member shall contribute to such Series in the amount set forth in a Series Agreement as its Initial Capital Contribution to the Company with respect to such Series. The Founder will accept or reject the Subscription after making a determination of whether the Investor meets the suitability standards established by the Founder to invest in the Company. Each Series Member’s holdings of Units may but are not required to be evidenced by a certificate or receipt in a form approved by the Founder.
9.2 Voluntary Additional Capital Contributions
No Series Member will be required to make Additional Capital Contributions. If a Series’ funds are insufficient to meet the needs of the Series, the Series Manager shall notify the Series Members of the need for additional capital and the Series Members may be permitted, but not required, to make Additional Capital Contributions to the Series on a pro-rata basis. In the event all Series Members do not make Additional Capital Contributions proportionate to their previous Series Percentage Interests, the Series Manager will recalculate the Percentage Interests of the Series Members after collection of the Additional Capital Contributions by: a) calculating the sum of each Series Member’s initial Capital Contributions plus their Additional Capital Contributions, and b) dividing this amount by the sum of the total Capital Contributions and Additional Capital Contributions of all Series Members. If the Series Members make disproportionate Additional Capital Contributions, the Percentage Interests of the Series Members who made Additional Capital Contributions will be increased and the Percentage Interests of the Series Members who did not make Additional Capital Contributions will be decreased.
In the event the existing Series Members do not voluntarily make Additional Capital Contributions in amounts sufficient to meet a Series’ need; the Series Manager may request that the Founder seek the needed capital from other sources, which may include a loan from the Founder, a Series Manager, a Series Member, another Series (or its Members or Manager), a third-party; or the sale of additional Interests in such Series to new Series Members.
| Mythic Collection, LLC | Amended and Restated Company Agreement |
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The Series Members hereby acknowledge and agree that noncontributing Members’ Percentage Interests in a Series may be reduced: a) as a result of Additional Capital Contributions made by contributing Series Members, or b) by the sale of additional Interests to new Series Members, and that the Series Manager or Founder, as applicable, is authorized to take either action on behalf of a Series if additional funds are needed to meet the Series’ business objectives.
9.3 Time of Capital Contributions; Withdrawal Not Permitted
Capital Contributions shall be made by Series Members in full on admission to a Series. No portion of the capital of a Series may be withdrawn until dissolution of a Series or the Company, except as otherwise expressly provided in this Agreement or a Series Agreement.
9.4 Loans
Nothing in this Agreement shall prevent any Series Member from making secured or unsecured loans to a Series or its Subsidiary by agreement approved by such Series Manager, as the case may be.
9.5 Company Interests
Subject to the other provisions of this Agreement or a Series Agreement, each Series Interest shall have the rights, and be subject to the obligations, identical to those of every other Interest of the same Member Class in a Series.
The Founder retains the sole and exclusive right to establish Series, Series Member Classes, the quantity and value of Units in a Series to be sold in exchange for Capital Contributions to each Series as may be necessary to accomplish the objectives of the Series or the Company. The voting rights, if any associated with the Units will be specified in a Series Agreement.
If any non-voting Interests are issued by a Series, the non-voting Interest holders although Series Members, shall be passive, shall not have any power to vote, except as otherwise provided in such Series Agreement or by law, and shall only obtain a purely Economic Interest in the particular Series.
Initial Interest Allocation for Interests Issued by the Company to its Founder:
Mythic Markets, Inc.: 100%
9.6 Voting Units
Subject to the other provisions of this Agreement, each voting Unit in a Series shall have the rights, and be subject to the obligations, identical to those of each other voting Unit of the same Member Class in the Series. The holders of voting Units shall be entitled to one vote for each voting Unit held at all meetings of voting Series Members (and written actions in lieu of meetings), with no right to cumulative voting.
| Mythic Collection, LLC | Amended and Restated Company Agreement |
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9.7 Series Ownership
Membership Interests sold by the Company on behalf of a Series may be denominated in Units where one Unit equals an investment of One Thousand Dollars ($1,000), or such other increments or amounts as may be described in the Series Agreement. Each Unit shall have the rights, and be subject to the obligations, identical to those of other Units of the same Member Class within such Series.
9.8 Capital Accounts
See Appendix A for Capital Accounts and Allocations.
10. Distributions
This Article 10 pertains to Cash Distributions made to Series Members only. The Founder of the Company does not expect to receive any Distributions from the Company, and will only share in Distributions in accordance with its membership in a Series, or for management of a Series, in accordance with the Series Agreement for each such Series.
10.1 Distributable Cash
Except as otherwise provided in Article 15 hereof (relating to the dissolution of the Company), any Distribution of the Distributable Cash of a Series during any Fiscal Year shall: (a) be made to the Series Members in proportion to such Series Members’ respective Percentage Interests in a Series, prioritized by Member Class, if applicable, or (b) in any other manner described in an applicable Series Agreement.
10.2 Distribution Rules
All Distributions to Series Members pursuant to Article 10.1 shall made be at such times and in such amounts as shall be determined solely by the Series Manager; provided, however, that the Series Manager shall use its best efforts to cause the Series to distribute to such Series Members an amount of Distributable Cash sufficient to enable the Series Members to pay their federal and state income-tax liabilities attributable to their respective distributive Interests of the taxable income of a Series, as applicable.
All amounts withheld pursuant to the Code or any provision of any state or local tax law with respect to any payment, Distribution or allocation to Series Members shall be treated as amounts distributed to the Series Members pursuant to this Article 10 for all purposes of this Agreement and the Series Agreements.
A Series Manager is authorized to withhold from Distributions, or with respect to allocations, to the respective Series Members and to pay over to any federal, state or local government any amounts required to be so withheld pursuant to the Code or any provision of any other federal, state or local law and shall allocate such amounts to those Series Members with respect to which such amounts were withheld.
| Mythic Collection, LLC | Amended and Restated Company Agreement |
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10.3 Limitation upon Distributions
Notwithstanding any provision to the contrary contained in this Agreement, a Series shall not make any Distribution to any Person on account of its Interest in the Company with respect to such Series if such Distribution would violate the Act or other applicable law.
The Series Manager may base a determination that a Distribution or return of a Series Member’s Capital Contribution may be made under Article 10.1 in good faith reliance upon a balance sheet and profit and loss statement of such Series represented to be correct by the Person having charge of its books of account or by an independent public or certified public accountant or firm of accountants to fairly reflect the financial condition of such Series.
10.4 No Interest on Capital Contributions
No Series Member shall be entitled to interest on its Capital Contributions or to return of their Capital Contributions.
11. Books and Records, Bank Accounts, Tax Matters
11.1 Accounting Method
11.2 The Company, for accounting and income tax purposes, shall operate on a Fiscal Year ending December 31 of each year, and shall make such income tax elections and use such methods of depreciation as shall be determined by the Manager. The books and records of the Company will be kept on a GAAP basis in accordance with sound accounting practices to reflect all income and expenses of the Company. Records, Audits and Reports
At the expense of the Company or the relevant Series, each Series Manager shall maintain separate and distinct records and accounts of the operations and expenditures of the Company and each Series during the term of the Company or each such Series, and for seven (7) years thereafter. At a minimum, the Company and each Series shall keep at the principal place of business of the Company the following records:
| · | True and full information regarding the status of the business and financial condition of such Series and the Company; |
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| · | Promptly after becoming available, a copy of the Company’s federal, state and local income tax returns for each year; |
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| · | The current list of the name and last known business, residence or mailing address of each Series Member; |
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| · | A copy of this Agreement, Series Agreements, and the Certificate of Formation of the Company; |
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| · | True and full information regarding the amount of cash and a description and statement of the Gross Asset Value of any other property or services contributed by each Series Member to the Company with respect to such Series and which each Series Member has agreed to contribute in the future, and the date on which each became a Series Member; |
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| · | Minutes of every meeting held, if any; |
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| · | Any written consents obtained from Series Members for actions taken by such Members without a meeting; and |
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| · | Unless contained in the Certificate of Formation or this Agreement, a writing prepared by each Series Manager setting out the following: |
| · | The times at which or events on the happening of which any Additional Capital Contributions agreed to be made by each Series Member are to be made; and |
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| · | Any right of a Series Member to receive Distributions that include a return of all or any part of the Series Member’s contributions. |
11.3 Returns and Other Elections
The Founder and/or Series Managers, as applicable, shall cause the preparation and timely filing of all tax returns required to be filed by the Company or its Series, pursuant to the Code and all other tax returns deemed necessary and required in each jurisdiction in which the Company does business. Copies of such returns, or pertinent information therefrom, shall be furnished to the respective Series Members within a reasonable time after the end of the Company’s Fiscal Year. All elections permitted to be made by the Company under federal or state laws shall be made by the Series Managers and/or Founder in its sole discretion.
12. Voluntary Transfers; Additional and Substitute Members
The Founder, as the issuer of Interests in the Company and its Series, shall have the sole and exclusive authority to grant, convey, sell, transfer, hypothecate, disassociate or otherwise dispose of all or a portion of the Series’ Interests without input or vote of the Series Members or Series Managers consistent with the Series Agreement.
Once interests in a Series have been sold, the Series Manager may only affect a change in the Membership Interests of a Series Member by following the procedures described below:
12.1 Transfers Restricted
No Series Member shall voluntarily transfer all or any part of its Economic Interest in a Series, except as provided in this Article 12. In the event a Series Member or a Transferee of a Series Member violates any of the provisions of this Article, such transfer shall be null and void and of no force or effect.
| Mythic Collection, LLC | Amended and Restated Company Agreement |
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12.2 Percentage of Limitations or Transfers
Notwithstanding any other provision of this Agreement to the contrary, the Company or a Series Manager shall not be required to recognize any transfer of an Interest in a Series if the transfer, when considered with other transfers of the Interests in a Series made within the period of twelve (12) consecutive calendar months prior thereto, would constitute a sale or exchange of fifty percent (50%) or more of the total Series’ Interest and result in the tax termination of the Company under article 708(b) of the Internal Revenue Code of 1986, as amended.
12.3 Voluntary Withdrawal, Resignation or Disassociation Prohibited
No Series Member may withdraw, resign or voluntarily disassociate from a Series, unless such Series Member complies with the transfer provisions set forth in this Article. The provisions of this Article shall apply to all Voluntary Transfers of a Series Member’s Interests in a Series. Involuntary Transfers are addressed in Article 13.
Unless otherwise approved by a Series Manager, a Series Member who resigns as a Series Member (a “Resigning Member”), regardless of whether such termination was the result of a voluntary act by such Series Member, shall not be entitled to receive any further Distributions from the Company with respect to such Series. Damages for breach of this Article 12.3 shall be monetary damages only (and not specific performance), and such damages may be offset against Distributions by such Series to which the Resigning Member would otherwise be entitled.
12.4 Admission of Additional Series Members
Only the Founder may sell Interests in a Series or admit Series Members. Once the Company closes the offering period for the sale of Interests in a Series, no additional Interests in the Series may be sold, or any Additional Series Members admitted, unless: a) the admission of an Additional Series Member is approved by the Founder. The Founder reserves the exclusive right to sell additional Interests in a Series to new or existing Series Members, and to admit new Series Members whose Interests may be equal or senior to the existing Interests in a Series as necessary to raise needed capital for a Series.
12.5 Transfer Prohibited Except as Expressly Authorized Herein
No Series Member may voluntarily, involuntarily, or by operation of law assign, transfer, sell, pledge, hypothecate, or otherwise dispose of (collectively transfer) all or part of its Interest in the Company or a Series, except as is specifically permitted by this Agreement or a Series Agreement. In no event shall any Voluntary Transfer be made to a trust (including grantor trusts), a partnership, a disregarder entity, or any other Person whose Membership would preclude the Company from continuing to operate under the opt-out provisions of the BBA audit procedures pursuant to section of 6221(b) of the Code. Any Voluntary Transfer made in violation of this Article shall be void and of no legal effect.
Further, in no event shall any Voluntary Transfer be made within one (1) year of the initial sale of the Interests proposed for transfer unless the Transferor provides a letter from an attorney, acceptable to the Series Manager, stating that in the opinion of such attorney, the proposed transfer is exempt from registration under the Securities Act and under all applicable state securities laws or is otherwise compliant with Rule 144 under the Securities Act of 1933. The Series Manager is legally obligated to refuse to honor any transfer made in violation of this provision.
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12.6 Conditions for Permissible Voluntary Transfer
Notwithstanding anything contained in this Agreement or a Series Agreement to the contrary, Series Manager shall,
| · | On written request of a Series Member, transfer all or any part of its Interest with respect to a Series to another Series Member or to a transferee that bears one of the following relationships to the transferring Series Member: a spouse, a lineal descendant or a trust created for the exclusive benefit of the transferring Series Member, the transferring Series Member's spouse and/or the transferring Series Member's lineal descendant(s), or an Affiliate as a Substitute Member, or |
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| · | At the request of an IRA custodian or the Series Member, transfer all or any part of a Company or Series interest to the Series Member or another IRA Custodian. |
Approval of Substitute Membership shall not be unreasonably withheld on delivery of all requested documents to the Series Manager necessary to accomplish such transfer. However, any subsequent conveyance or transfer of ownership Interests within the Affiliate so that it no longer meets the definition of an Affiliate with respect to the original Series Member, shall make its membership in a Series subject to revocation or Disassociation (per Article 13) by the Series Manager. Unless the Affiliate requests and is approved by the Series Manager as a Substitute Member, an unauthorized Affiliate shall have only the Economic Interest of the former Series Member.
12.7 Substitution
A permitted transfer of any Series Member’s Interest shall only be granted as to that Member’s Economic Interest unless the Series Manager accepts a permitted transferee (Transferee) as a Substitute Member. A permitted Transferee shall become a Substitute Member only on satisfaction of all of the following conditions:
| · | Filing of a duly executed and acknowledged written instrument of assignment in a form approved by the Series Manager specifying the Member’s Percentage Interest being assigned and setting forth the intention of the assignor that the permitted assignee succeed to the assignor’s Economic Interest (or the portion thereof) and/or its Interest as a Series Member; |
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| · | Execution, acknowledgment and delivery by the assignor and assignee of any other instruments reasonably required by the Series Manager including an agreement of the permitted assignee to be bound by the provisions of this Agreement and the Series Agreement; and |
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| · | The Series Manager’s approval of the Transferee’s or assignee’s admission to the Series as a Substitute Member and concurrent and complete Disassociation of all of the Membership and Economic Interests of the Transferor with respect to such Series. |
| Mythic Collection, LLC | Amended and Restated Company Agreement |
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12.8 Voluntary Transfer; Right of First Refusal
| · | Notice of Sale. In the event any Series Member (a Selling Member) wishes to sell its Interest a Series, it must first present its offer to sell and proposed price (terms and conditions) in a Notice of Sale submitted in writing to the Series Manager. The Series Manager and/or the Series Members (Purchasing Members) shall have thirty (30) days to elect to purchase the entire Selling Member’s Interest, which shall be offered to each in the order of priority described below: |
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| · | First, the Series Manager (or its members) may elect to purchase the entire Interest proposed for sale on the same terms and conditions as contained in the Notice of Sale, but if they don’t; then |
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| · | Second, all or part of the Series Members may purchase the entire Selling Member’s Interest on the same terms and conditions as contained in the Notice of Sale; the Purchasing Members will be given priority to purchase in the same ratio as their existing Percentage Interest before allowing existing Series Members to purchase disproportionate amounts; |
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| · | Third, if the Series Members elect to purchase less than the entire Interest proposed for sale, the Series Manager (or its members) and/or Founder may combine in any ratio to purchase the remaining Interest, providing the overall purchase is of the entire Selling Member’s Interest and on the same terms and conditions as contained in the Notice of Sale; and |
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| · | Fourth, in the event the Series Members and/or Series Manager or the Founder fail to respond within thirty (30) days of the Selling Member’s Notice of Sale, or if the Series Manager and/or Members expressly elect not to purchase the entire Selling Member’s Interest, the Selling Member shall have the right to sell its Interest to the third-party on the same terms and conditions contained in the original Notice of Sale. |
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| · | Fifth, in the event the Selling Member receives or obtains a bona fide offer from a third-party to purchase all or any portion of its Interest in the Company or a Series, which offer it desires to accept, then prior to accepting such offer, the Selling Member shall give written notice (the Notice of Sale) of such offer to the Series Manager. The Notice of Sale shall set forth the material terms of such offer, including without limitation the identity of the third-party, and the purchase price and terms of payment. |
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| · | Sixth, if the terms are different than the original Notice of Sale offered to the Series Manager, the Selling Member must comply again with the terms of this Article (giving the Series Manager, the Series Members and/or the Founder the first right to purchase its Interest on the same terms and conditions offered by the third-party) with respect to the existing offer and all subsequent third-party offers. |
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| · | If a Series Manager and the Founder approves the sale to the third-party, it must be completed within three (3) months. If the sale to the third-party is not consummated on the terms contained in the approved Notice of Sale within three (3) months following the date of the Notice of Sale, then the Selling Member must seek a renewed approval from the Series Manager and Founder, who may require that the Selling Member again comply with the first right of refusal provisions of this Article. |
In any purchase by the Series Members, Series Manager, or Founder as described above, the Series Manager will automatically adjust the Membership Interests of the Purchasing Members and Selling Members to reflect the respective number and class of Units or Interests transferred, and the Series Manager shall update the list of Series Members and their Percentage Interests in the Series Agreement as appropriate to reflect such transfer.
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| · | Costs of Conveyance for Voluntary Transfer. In the event that the Series Manager, the Series Members, and/or the Founder elect to purchase as provided this Article, the cost of such transaction, including without limitation, recording fees, escrow fees, if any, and other fees, (excluding attorneys’ fees which shall be the sole expense of the party who retained them) shall be borne by the Selling Member. The Selling Member shall deliver all appropriate documents of transfer for approval by the Series Manager at least three (3) days prior to the closing of such sale for its review and approval. The Series Manager may deduct its costs of sale from the Capital Account of the Transferring Member, unless other reimbursement is received. |
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| · | Indemnification of Parties. From and after the date of such closing, whether the sale is made to the Series Manager, the Series Members, the Founder, or the third-party, the Selling Member shall have no further Interest in the Assets or income of the Series or the Company and, as a condition of the sale, the Person(s) or entities purchasing the Interests shall indemnify and hold harmless the Selling Member from and against any claim, demand, loss, liability, damage or expense, including without limitation, attorney’s fees arising from the subsequent operation of the Company or Series, and the Selling Member shall indemnify and hold harmless the Purchasing Members from and against any claim, demand, loss, liability, damage or expense, including without limitation, attorney’s fees arising from the subsequent operation of the Company or Series. |
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| · | Indemnification by Transferring Member. Any Member that Transfers all or any portion of its Membership Interest shall in each case as Indemnitor indemnify, defend, and hold harmless the Company and each other Member as Indemnitees to the fullest extent permitted by applicable law against all Losses of those Indemnitees caused by, resulting from, or arising out of (i) any failure by the Indemnitor to comply with any federal, state, local, or foreign securities, antitrust, or other laws or regulations applicable to such transfer (including those relating to payment of transfer taxes), (ii) any breach, default, or violation of any existing financing or future financing caused by or attributable to such transfer, or (iii) any federal or state income or other tax obligations attributable to such transferring Member (whether due to non-payment of taxes by the Member, deficiency determined upon audit or others) or to such Transfer. |
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| · | Rights and Interests of Voluntary Transferee; Adjustment of Voting Rights. If a Series Member transfers its Interest to a third-party Transferee pursuant to this Article, such Transferee shall only succeed to the Series Member’s Economic Interest unless and until it complies with the provisions of Article 12.4 and is approved by the Series Manager as a Substitute Member. Until such time, if ever, that the third-party Transferee becomes a Substitute Member, the voting Interests of the Remaining Members (i.e., all Members, other than the Selling Member) will be increased proportionate with their Percentage Interests in the Series as if they had purchased the Selling Member’s Interest. |
The obligations, rights and Interests of the Selling, purchasing, and any Substitute Members shall inure to and be binding upon the heirs, successors and permitted assignees of such Transferee subject to the restrictions of this Article. A third-party Transferee shall have no right of action against the Company, a Series (its Manager or Members), or the Founder for not being accepted as a Substitute Member.
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13. Involuntary Transfer; Disassociation
13.1 Disassociation for Cause
A Series Member may be disassociated (i.e., expelled) from the Series: a) pursuant to a judicial determination, or b) on application by the Series Manager, another Member of the same Series, or c) the Founder, for Cause (defined in the bullets below); upon a written finding by the Series Manager or applicable judicial body that such Series Member:
| · | Engaged in wrongful conduct that adversely and materially affected the business of a Series and/or the Company; |
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| · | Willfully or persistently committed a material breach of this Agreement; |
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| · | Engaged in conduct relating to the Series’ business, which makes it not reasonably practicable to carry on the business with the Series Member; or |
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| · | Engaged in willful misconduct related to its Membership in the Series. |
13.2 Disassociation by Operation of Law
Additionally, a Series Member may be disassociated by operation of law, affected solely by action of the Series Manager or Founder, upon the occurrence of any of the following triggering events:
| · | Upon Voluntary or Involuntary Transfer of all or part of a Member's Economic Interest with respect to a Series; |
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| · | Dissolution, suspension, or failure to maintain the legal operating status of a corporation, partnership or limited liability company that is a Member of a Series; or |
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| · | Any Series Member who meets the definition of a "covered person" and becomes subject to a "disqualifying event" at any time during operation of the Company (as those terms are defined in Regulation D, Rule 506(d)) may automatically, by action of the Founder: a) be disassociated, or b) be stripped of its voting rights, if any, as appropriate and necessary to preserve the Company's securities exemption under Regulation D, Rule 506. |
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| · | In the case of a Series Member that is a legal entity, the Member's: |
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| · | Becoming a debtor in Bankruptcy; |
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| · | Executing an assignment of all or substantially all of its Economic Interest for the benefit of creditors; |
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| · | The appointment of a trustee, receiver, or liquidator of the Member or of all or substantially all of the Member's property including its Interest in the Company pursuant to an action related to the Member’s insolvency; or |
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| · | In the case of a Member who is an individual: |
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| · | The Member's death; |
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| · | Becoming a debtor in Bankruptcy; |
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| · | The appointment of a guardian or conservator of the property of the Member; or |
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| · | A judicial determination of incapacity or other such determination indicating that the Member has become incapable of performing its duties under this Agreement or the Series Agreement; |
| · | In the case of a Member that is a trust or trustee of a trust, distribution of the trust's entire rights to receive Distributions from a Series, but not merely by reason of the substitution of a successor trustee; |
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| · | In the case of a Member that is an estate or personal representative of an estate, distribution of the estate's entire rights to receive Distributions from a Series, but not merely the substitution of a successor personal representative; or |
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| · | Termination of the existence of a Member if the Member is not an individual, estate, or trust, other than a business trust. |
13.3 Effect of Disassociation
Immediately on mailing of a notice of Disassociation sent by the Series Manager to a Series Member’s last known address, unless the reason for Disassociation can be and is cured within sixty (60) days, a Person will cease to be a Member of the Series and shall henceforth be known as a Disassociated Member. Any successor in Interest who succeeds to a Series Member’s Interest by operation of law (per Article 13.2) shall henceforth be known as an Involuntary Transferee.
Subsequently, the Disassociated Member’s right to vote or participate in management decisions will be automatically terminated. A Disassociated Member (or its legal successor) will continue to receive only the Disassociated Member’s Economic Interest in the Series, unless the Disassociated Member/Involuntary Transferee elects to sell its Interest following the procedures described in Article 12.8; and/or a Voluntary or Involuntary Transferee seeks admission and is approved by the Series Manager as a Substitute Member (per Article 12.7).
Until such time, if ever, that the Series Manager approves the transfer of the entire Disassociated Member’s Interest to the Purchasing Members or a Substitute Member, the voting Interests of the Remaining Members will be proportionately increased as necessary to absorb the Disassociated Member’s voting Interests.
If a Member objects to Disassociation, they will be bound to resolve the dispute in accordance with the Internal Dispute Resolution Procedure described in Article 14, unless the reason for the Disassociation can be resolved within sixty (60) days to the satisfaction of the Series Manager, in which case their full Membership Interest will be reinstated. If there is no Involuntary Transferee, and no third-party buyer is found and the Series Manager or Remaining Members do not wish to purchase the Disassociated Member’s Interest, the Disassociated Member will only be entitled to receive its Economic Interest (no voting rights), indefinitely, until such time as the Company or such Series is dissolved.
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13.4 Sale and Valuation of a Disassociated Member’s Interest
If no outside buyers can be found and the Disassociated Member still desires to sell its Interest, which the Remaining Members and/or Series Manager or Founder (Purchasing Members) wish to purchase, the buyout price for the Disassociated Member’s Interest may be determined using one of the following methods:
| · | Negotiated Price: If the Purchasing Members or legal representative of the Disassociated Member can agree on a negotiated price for the Interest, then that price will be used; if not, |
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| · | Estimated Market Value within 12 Months: The Series Manager may annually determine the Estimated Market Value of the Company and/or its Series and report it to the Series Members. An Estimated Market Value calculated by the Series Manager in any commercially accepted manner within the last twelve (12) months shall conclusively be used to determine the value of a Disassociated Member’s Interest. The purchase price of shall be the product of the Disassociated Member’s Percentage Interest in a Series and the Estimated Market Value of the Series adjusted for the Member Class, if applicable. |
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| · | Appraisal Method: If both of the above methods fail, the price for a Disassociated Member’s Interest shall be determined by appraisal of the Disassociated Member’s Interests by one or more independent, certified commercial business appraisers currently operating in the business of the Underlying Asset(s), as follows: |
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| · | The Disassociated Member shall hire and pay the first appraiser, who shall provide an Estimated Market Value for the Series. If acceptable to the parties, this Estimated Market Value will be used to calculate the value of the Disassociated Member’s Interest. |
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| · | If the first appraiser’s valuation is unacceptable, the Purchasing Members may hire their own appraiser and the average of the two appraisals (if within twenty percent (20%)) may be used to determine the value of the Series on which the purchase price will be based. If the two appraisals differ by more than twenty percent (20%) and the parties still cannot agree on the value, then, |
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| · | A third appraisal may be obtained (at the option of either party), the cost of which will be split between the Purchasing Members and the Disassociated Member. The average of the two appraisals closest in value will be conclusively used to establish the Estimated Market Value of the Series on which the value of the Interest will be based. |
13.5 Closing on a Disassociated Members’ Interest
Unless other terms have been agreed between the Disassociated and Purchasing Members, the following terms shall apply to closing of a Disassociated Member’s Interest. After determining value (per Article 12.8 or 13.4 above), the Purchasing Members shall give written notice fixing the time and date for the closing. The closing shall be conducted at the principal office of the Company or other agreed location on the date not less than thirty (30) days nor more than sixty (60) days after the date of such notice, or in the event of Bankruptcy, any request for an extension by any Bankruptcy Court having jurisdiction.
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13.6 Payment for a Disassociated Member’s Interest
At closing, the Purchasing Members shall pay to the Disassociated Member by certified or bank check an amount equal to the determined value of the Disassociated Member’s Interest, or, if such value shall be determined to be zero or another amount pursuant to an agreement of the Members, shall deliver an executed copy of such agreement or a copy of such appraisal report(s), or a memorandum of the negotiated value (per Article 12.8 above) as applicable.
Notwithstanding the foregoing, at the option of the Purchasing Members, the purchase price may be paid by the delivery of its promissory note in the principal amount of the purchase price, bearing interest at eight percent (8%), repayable early without penalty, in eight (8) equal quarterly installments, or other agreement between the parties. Simultaneously therewith the Disassociated Member shall execute, acknowledge and deliver to the Purchasing Members such instruments of conveyance, assignment and releases as shall be necessary or reasonably desirable to convey all of the right, title and Interest of the Member and the Assets thereof.
Because of the unique and distinct nature of an Interest in a Series of the Company, it is agreed that the Purchasing Members’ damages would not be readily ascertainable if they elect to purchase the Disassociated Member’s Interest as aforesaid and the conveyance thereof were not consummated, and, therefore, in such case the Purchasing Members shall be entitled to the remedy of specific performance in addition to any other remedies that may be available to them in law or in equity.
13.7 Transfer of Economic Interest; Rights of an Involuntary Transferee
If the Purchasing Members do not elect to purchase the Interest of a Disassociated Member as provided in Articles 13.4 through 13.6, or if by operation of law the Economic Interest of the Disassociated Member transfers to an Involuntary Transferee, the Series Manager shall hereby be granted power of attorney by the Disassociated Member to execute such documents as may be necessary and requisite to evidence and cause the transfer only of the Disassociated Member’s Economic Interest to the Involuntary Transferee, as applicable and appropriate for the circumstances.
An Involuntary Transferee shall not be deemed a Series Member until such time if ever, that they seek admission and are approved as a Substitute Member(s) of a Series. Until then, they shall only succeed to the Economic Interest of the Disassociated Member, including the right to any Distributions and a return of the Disassociated Member’s Unreturned Capital Contributions, if applicable, which shall be distributed only if and when such Distributions or return of Capital Contributions shall become due per the terms of the applicable Series Agreement. Any Distributions that may be due a Disassociated Member shall be held in trust by the Series Manager and no Distributions shall be made to an Involuntary Transferee until it produces and executes such documentation as the Series Manager deems necessary to evidence the Transfer of the Disassociated Member’s Economic Interest, and to indemnify the Company, the Series Manager or Members for any liability related to making Distributions directly to the holder of the Economic Interest.
Any further assignment of the Disassociated Member’s Economic or Membership Interest, or any request of an Involuntary Transferee to succeed to the Disassociated Member’s full Membership Interest (i.e., to become a Substituted Member in a Series of the Company), shall be subject to approval of the Series Manager.
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14. Dispute Resolution
The dispute resolution process provisions do not apply to claims under the federal securities laws. By agreeing to the dispute resolution process, including mandatory arbitration, investors will not be deemed to have waived the Company’s or Series’ compliance with the federal securities laws and the rules and regulations thereunder. Further, the waiver of jury trial provision does not apply to claims under the federal securities laws.
Because the nature of the Company and its Series is to generate Profits that it can share with its Series Members, it is imperative that one Series Member’s dispute with the Company, a Series Manager and/or other Series Members is not allowed to diminish the Profits available to other Series Members or resources necessary to operate the Company or assets of such Series. Litigation could require diversion of Company or Series Profits to pay attorney’s fees or could tie up Company funds necessary for operation of the Company or the affected Series, its Subsidiary or its assets, impacting the profitability of the investment for all such Series Members. The only way to prevent such needless expense is to have a comprehensive Internal Dispute Resolution Procedure (Procedure) in place, to which each of the Series Members have specifically agreed in advance of membership in the Company or in a Series. The Procedure described below requires an aggrieved party to take a series of steps designed to amicably resolve a dispute on terms that will preserve the interests of the Company or Series, and the other non-disputing Series Members, before invoking a costly remedy, such as arbitration.
In the event of a dispute, claim, question, or disagreement between Series Members or between a Series Manager or the Founder and/or one or more Series Members arising from or relating to this Agreement, the Series Agreement, the breach thereof, or any associated transaction, or to interpret or enforce any rights or duties under the Act (hereinafter Dispute), all Series Managers and Series Members hereby agree to resolve such Dispute by strictly adhering to the Procedure provided below. The following Procedure has been adapted for purposes of this Agreement from guidelines and rules published by the American Arbitration Association (AAA):
14.1 Notice of Disputes
Written notice of a Dispute must be sent to the Series Manager or Series Member by the aggrieved party as described in the notice requirements of Article 16.1 below.
14.2 Negotiation of Disputes
The parties hereto shall use their best efforts to settle any Dispute through negotiation before resorting to any other means of resolution. To this effect, they shall consult and negotiate with each other in good faith and, recognizing their mutual Interests, attempt to reach a just and equitable solution satisfactory to all parties. If, within a period of sixty (60) days after written notice of such Dispute has been served by either party on the other, the parties have not reached a negotiated solution, then upon further notice by either party, the Dispute shall be submitted to mediation administered by the AAA in accordance with the provisions of its Commercial Mediation Rules. The onus is on the complaining party to initiate each next step in this Procedure as provided below.
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14.3 Mandatory Alternative Dispute Resolution
On failure of negotiation provided above; mediation, and as a last resort, binding arbitration shall be used to ultimately settle the Dispute. The following provisions of this Article 14 shall apply to any subsequent mediation or arbitration.
Exception: On unanimous consent of all parties to a Dispute, the disputing party may initiate a small claims action or litigation in lieu of mandatory mediation and arbitration provided the parties shall further unanimously determine jurisdiction and venue. In any small claims action or litigation, the local rules of court shall apply in lieu of the remaining provisions of this Article.
| · | Preliminary Relief. Any party to the Dispute may seek preliminary relief at any time after negotiation has failed, but prior to arbitration, in accordance with the Optional Rules for Emergency Measures of Protection of the AAA Commercial Arbitration Rules and Mediation Procedures. The AAA case manager may appoint an arbitrator who will hear only the preliminary relief issues without going through the arbitrator selection process described in Article 14.5.1. |
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| · | Consolidation. Identical or sufficiently similar Disputes presented by more than one Series Member may, at the option of the Series Manager or Founder, be consolidated into a single Procedure. |
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| · | Location of Mediation or Arbitration. Any mediation or arbitration shall be in State of Delaware and each party to such mediation or arbitration must attend in person. |
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| · | Attorney’s Fees and Costs. Each party shall bear its own costs and expenses (including their own attorney’s fees) and an equal share of the mediator or arbitrators’ fees and any administrative fees, regardless of the outcome; however, if a Series Manager or the Founder is a party, their legal fees shall be paid by the Series (per the indemnification provision described in Article 6.6). |
Exception: A Series may reimburse a Series Member for attorney’s fees and costs in any legal action against the Series Manager or the Company in which the Series Member is awarded such fees and costs as part of a legal action.
| · | Maximum Award. The maximum amount a party may seek during mediation or be awarded by an arbitrator is the amount equal to the party’s Unreturned Capital Contributions and any Cash Distributions or Interest to which the party may be entitled. An arbitrator will have no authority to award punitive or other damages. |
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| · | AAA Commercial Mediation or Arbitration Rules. Any Dispute submitted for mediation or arbitration shall be subject to the AAA’s Commercial Mediation or Arbitration Rules. If there is a conflict between the Rules and this Article, the Article shall be controlling. |
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14.4 Mediation
Any Dispute that cannot be settled through negotiation as described in Article 14.2, may proceed to mediation. The parties shall try in good faith to settle the Dispute by mediation, which each of the parties to the Dispute must attend in person, before resorting to arbitration. If, after no less than three (3) face-to-face mediation sessions, mediation proves unsuccessful at resolving the Dispute, the parties may then, and only then, resort to binding arbitration as described in Article 14.5.
| · | Selection of Mediator. The complaining party shall submit a Request for Mediation to the AAA. The AAA will appoint a qualified mediator to serve on the case. The preferred mediator shall have specialized knowledge of securities law, unless the Dispute pertains to financial accounting issues, in which case the arbitrator shall be a C.P.A., or if no such person is available, shall be generally familiar with the subject matter involved in the Dispute. If the parties are unable to agree on the mediator within thirty (30) days of the Request for Mediation, the AAA case manager will make an appointment. |
If the initial mediation(s) does not completely resolve the Dispute, any party may request a different mediator for subsequent mediation(s) by serving notice of the request to the other party(ies) for approval, and subject to qualification per the requirements stated above.
14.5 Arbitration
Any Dispute that remains unresolved after good faith negotiation and three (3) failed mediation sessions shall be settled by binding arbitration. Judgment on the award rendered by the arbitrator(s) shall be final and may be entered in any court having jurisdiction thereof.
14.5.1 Selection of Arbitrator.
Prior to arbitration, the complaining party shall cause the appointment of an AAA case manager by filing of a claim with the AAA along with the appropriate filing fee, and serving it on the defending party. The AAA case manager shall provide each party with a list of proposed arbitrators who meet the qualifications described below, or if no such person is available, who are generally familiar with the subject matter involved in the Dispute. Each side will have fourteen (14) days to strike any unacceptable names, number the remaining names in order of preference, and return the list to the AAA. The case manager shall then invite persons to serve from the names remaining on the list, in the designated order of mutual preference. Should this selection procedure fail for any reason, the AAA case manager shall appoint an arbitrator as provided in the applicable AAA Commercial Arbitration Rules.
14.5.2 Qualifications of Arbitrator.
The selected or appointed arbitrator shall be selected from available candidates in Delaware and shall have specialized knowledge of securities law, unless the Dispute pertains to financial accounting issues, in which case the arbitrator shall be a C.P.A. Further, the selected arbitrator must agree to sign a certification stating that they have read all of the documents relevant to the Member’s subscription to the Series, including the Private Placement Memorandum, the Agreement, the subject Series Agreement, and the Subscription Booklet in their entirety, including and any relevant Appendices or Exhibits.
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14.5.3 Limited Discovery.
Discovery shall be limited to only those documents pertaining to the Member’s Subscription to the Series (and any relevant Appendices or Exhibits), the Subscription Booklet, any written correspondence between the parties, and any other documents specifically requested by the Arbitrator as necessary to facilitate his/her understanding of the Dispute. The parties may produce witnesses for live testimony at the arbitration hearing at their own expense. A list of all such witnesses and complete copies of any documents to be submitted to the arbitrator shall be served on the arbitrator and all other parties within forty-five (45) days of the arbitration hearing, at the submitting party’s expense.
14.5.4 Findings of Arbitrator
If, in any action against a Series Manager, the Company, or the Founder, the selected or appointed arbitrator, or judge (if applicable) makes a specific finding that the Series Manager, Founder or Company has violated Securities laws, or has otherwise engaged in any of the actions described in Article 6.4 for which the Series Manager or Company will not be indemnified, the Series Manager, Founder, or Company must bear the cost of its own legal defense. In such case, the Series Manager must reimburse the Company for any such costs previously paid by the Company. Until the Company has been fully reimbursed, the Series Manager will not be entitled to receive any fees or Distributions it may otherwise be due.
15. Termination of Series and Company
15.1 Dissolution of the Company
The Company shall be dissolved upon the occurrence of either of the following events:
| · | By sale of all or substantially of the Series’ Underlying Asset(s) and dissolution of all Subsidiaries; |
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| · | By the unanimous written agreement of all Series Managers and the Founder; or |
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| · | Upon the entry of decree of judicial dissolution. |
The death, retirement, resignation, expulsion, bankruptcy or dissolution of any Series Manager or Series Member or the occurrence of any event that terminates the continued membership of any Series Member in a Series shall not in and of itself cause the dissolution of the Company.
If a Series Member who is an individual dies or a court of competent jurisdiction adjudges him to be incompetent to manage its person or property. The Series Member’s executor, administrator, guardian, conservator, or other legal representative may exercise all of the Series Member’s rights for the purpose of settling the Member’s estate or administering its property. If a Series Member is an entity and is dissolved or terminated, the powers of that Series Member may be exercised by its legal representative or successor.
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15.2 Termination of a Series
A Series shall be terminated upon the occurrence of any of the following events:
| · | Upon dissolution of the Company; |
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| · | On sale or disposition of all of the Underlying Asset(s) and dissolution of its Subsidiaries; or |
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| · | At the time in which there are no Series Members in a Series; |
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| · | Upon the entry of a decree of judicial termination. |
Other than in connection with a transfer of Membership Interests in accordance with this Agreement, a Series Member shall not take any voluntary action (including, without limitation, resignation) that directly causes it to cease to be a Series Member.
The termination and winding up of a Series shall not cause the dissolution of the Company (even if there are no remaining Series so long as the Founder is still a Member); nor shall it cause the termination of any other Series. The termination of a Series shall not affect the limitation on liabilities of such Series or any other Series formed by the Founder as provided in this Agreement and consistent with the Act.
15.3 Liquidation and Winding Up of a Series on Termination of Such Series
Upon the occurrence of any such event, the Manager (or a liquidator selected by the Manager) is charged with winding up the affairs of the Series of Interests or the Company as a whole, as applicable, and liquidating its assets. Upon the liquidation of a Series of Interests or the Company as a whole, as applicable, the Underlying Assets will be liquidated and any after-tax proceeds distributed: (i) first, to any third party creditors, (ii) second, to any creditors that are the Manager or its affiliates (e.g., payment of any outstanding Operating Expenses Reimbursement Obligation), and thereafter, (iii) to the Interest Holders of the relevant Series of Interests, allocated pro rata based on the number of Interests held by each Interest Holder (which may include the Manager, any of its affiliates and the Asset Seller and which distribution within a Series will be made consistent with any preferences which exist within such Series).
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The Founder, Series Managers and Series Members, as applicable, shall comply with all requirements of applicable law pertaining to the winding up of the affairs of the Company with respect to such Series and the final disposition of its assets.
15.4 Winding Up On Dissolution of the Company
Upon the dissolution of the Company pursuant to Article 15.1, the Company shall be wound up by winding up each Series in the manner contemplated by Article 15.3, except that, for purposes of Article 15.3, paragraph 3, the separate Capital Accounts of each Member associated with more than one Series shall be combined into a single Capital Account of such Member.
15.5 Certificate of Cancellation
If a dissolution of the Company occurs and all debts, liabilities and obligations of the Company, whether or not associated with any Series, have been satisfied (whether by payment or reasonable provision for payment) and all of the remaining property and assets of the Company, whether or not associated with any Series, have been distributed, a certificate of cancellation as required by the Act shall be jointly executed and filed by the members of the Company, as authorized persons, within the meaning of the Act, with the Delaware Secretary of State.
15.6 Effect of Filing Certificate of Cancellation or Equivalent
Upon the filing of a certificate of cancellation or equivalent with the Delaware Secretary of State, pursuant to Article 15.5, the existence of the Company shall cease.
15.7 Returns of Contributions Nonrecourse to Other Members
Except as otherwise provided by applicable laws, upon termination of a Series, the Series Member shall look solely to the assets of such Series for the return of their Capital Contributions to such Series, and if the assets of such Series remaining after payment of or due provision for the debts and liabilities of the Company with respect to such Series are insufficient to return such Capital Contributions, such Series Members shall have no recourse against any other Series, the Company or any other Series Member, except as otherwise provided by law.
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16. Miscellaneous Provisions
16.1 Notices
All notices provided for by this Agreement shall be made in writing and deemed received (i) twenty-four (24) hours after emailing to the party entitled thereto, or (ii) on the mailing of the notice in the U.S. mail at the last known address of the party entitled thereto, certified mail, return receipt requested.
16.2 Binding Effect
This Agreement and the Series Agreements are binding upon and inure to the benefit of the Series Members, and, to the extent permitted by this Agreement, their respective legal representatives, successors and assigns.
16.3 Governing Law
This Agreement, Series Agreements, and the rights of the parties hereunder, shall be construed pursuant to the laws of the State of Delaware (without regard to conflict of laws principles).
16.4 Waiver of Action for Partition
Each Member irrevocably waives during the term of the Company and any Series for which it is a Member, any right that it may have to maintain any action for partition with respect to the property of the Company or any Series.
16.5 Amendments
This Agreement may not be amended except in writing except by unanimous consent of all Series Managers. A Series Agreement may only be modified by an affirmative vote of Series Members holding a Majority of Interests in the affected Series.
However, notwithstanding anything to the contrary herein, the Founder may amend this Agreement, a Series Agreement, or a Subsidiary Company Agreement in a manner not materially inconsistent with the principles set forth in this Agreement, without the approval or vote of the Series Members, including without limitation:
| · | To issue non-substantive amendment to this Agreement or a Series Agreement to correct minor technical errors; |
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| · | To accommodate a lender’s request with respect to a Series Agreement or a Subsidiary Company Agreement; |
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| · | To cure any ambiguity or to correct or supplement any provision therein which may be inconsistent with any other provision therein or in any associated document, or to add any other provisions with respect to matters or questions arising under this Agreement which will not be materially inconsistent with the provisions of this Agreement; and |
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| · | To take such steps as the Founder or a Series Manager deems advisable to preserve the tax status of the Company or a Series or to otherwise specify the tax status of a Series or the Company; |
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| · | To delete or add any provisions to this Agreement, a Series Agreement, or a Subsidiary Company Agreement as requested by the Securities and Exchange Commission, state securities officials which is deemed by such regulatory agency or official to be for the benefit or protection Company, its Members or the Series Members; or |
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| · | To make amendments similar to the foregoing so long as such action shall not materially and adversely affect the Interests or returns to the Series Members. |
16.6 Execution of Additional Instruments
Each Series Member hereby agrees to execute such other and further statements of Interest and holdings, designations and other instruments necessary to comply with any laws, rules or regulations, or reasonable requests of the Company, the Founder, or a Series Manager.
16.7 Construction
Whenever the singular number is used in this Agreement or a Series Agreement and when required by the context, the same shall include the plural and vice versa, and the masculine gender shall include the feminine and neuter genders and vice versa.
16.8 Waivers
The failure of any party hereto to seek redress for default of or to insist upon the strict performance of any covenant or condition of this Agreement or a Series Agreement shall not prevent a subsequent act, which would have originally constituted a default, from having the effect of an original default.
16.9 Severability
Every provision of this Agreement and the Series Agreements are intended to be severable. If any phrase, sentence, paragraph, or provision of this Agreement or a Series Agreement or its application thereof to any Person or circumstance is unenforceable, invalid, the affected phrase, sentence, paragraph, or provision shall be limited, construed, and applied in a manner that is valid and enforceable. If the conflict was with a non-waivable provision of the Act, phrase, sentence, paragraph, or provision, it shall be modified to conform to the Act. In any event, the remaining provisions of this Agreement, the Series Agreement, or Subsidiary Agreement shall be given their full effect without the invalid provision or application. If any term or provision hereof is illegal or invalid for any reason whatsoever, such legality or invalidity shall not affect the validity or legality of the remainder of this Agreement, the Series Agreement or the Subsidiary Agreement.
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16.10 Creditors
None of the provisions of this Agreement or a Series Agreement shall be for the benefit of or enforceable by any creditors of (i) the Company, (ii) any Series of the Company, (iii) any Series Member, or (iv) any Series Manager, or (v) the Founder.
16.11 Counterparts
This Agreement and any associated Series Agreements may be signed in multiple counterparts, all of which should be deemed an original and shall constitute one instrument.
16.12 Integration
This Series Limited Liability Agreement constitutes the entire agreement between the parties hereto pertaining to the subject matter hereof and supersedes all prior agreements and understandings pertaining thereto.
17. Signatures
IN WITNESS WHEREOF, the parties hereto, whose names and contact information follows, have caused their signatures or the signatures of their duly authorized representatives and seals to be set forth below as of the day and year first above written.
Dated: April 2, 2020 By: Mythic Collection, LLC
A Delaware Series Limited liability company
By: Its Manager,
Mythic Markets, Inc.,
A Delaware Corporation
/s/ Joe Mahavuthivanij
By: Its CEO,
Joe Mahavuthivanij
| Mythic Collection, LLC | Amended and Restated Company Agreement |
| 36 |
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Appendix A: Capital Accounts and Allocations
1. Capital Accounts
An individual Capital Account shall be maintained solely for the convenience of the Manager. Since the Company is treated as a corporation for U.S. federal and state tax purposes, the earnings and profits of the corporation are paid solely in conjunction with the Member’s Interests, and Capital Accounts do not serve a purpose for U.S. federal or state tax purposes.
2. Division of Profits and Losses for Income Tax Purposes
As an entity electing to be treated as a corporation for U.S. federal and state tax purposes, the Company will be responsible for accounting for its profit and loss in accordance with U.S. tax law prior to the distribution of cash.
3. Treatment of Distributions of Cash for Tax Purposes
3.1 Distributions of Cash
In the event that the Company generates Distributable Cash from Capital Transactions, the Company will make Cash Distributions to the Members as described in Article 4 of the Agreement.
3.2 In-Kind Distribution
Except as otherwise expressly provided herein, without the prior approval of the Manager, Assets of the Company, other than cash, shall not be distributed in-kind to the Members. If any Assets of the Company are distributed to the Members in-kind for purposes of this Agreement, such Assets shall be valued on the basis of the Gross Asset Value thereof (without taking into account section 7701(g) of the Code) on the date of Distribution; and any Member entitled to any Interest in such Assets shall receive such Interest as a tenant-in-common with the other Member(s) so entitled with an undivided Interest in such Assets in the amount and to the extent provided for in Articles 4 and 2.2 of the Agreement.
Upon such Distribution, the earnings and profits of the Company shall be
adjusted for any gain or loss pursuant to section 311(b) of the Code.
3.3 Prohibited Distribution; Duty to Return
A Distribution to any Member may not be made if it would cause the Company’s total liabilities to exceed the fair value of the Company’s total Assets. A Member receiving a Distribution in violation of this provision is required to return it, if the Member had knowledge of the violation.
| Mythic Collection, LLC | Amended and Restated Company Agreement |
| A-1 |
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4. Other Tax Matters
4.1 Company Tax Returns and Payment
The Manager shall use its best efforts to cause the Company’s tax return to be prepared prior to March 1 of each year. As an entity electing to be treated as a Corporation, the Company will be required to account for items of profit and loss on its own account and remit corporate tax due resulting from such calculation. This corporate tax will be viewed as an expense of the Company which will reduce Distributable Cash.
5. Tax Matters Related to Foreign Investors
5.1 Non-U.S. Investors
The discussion below is applicable solely to Non-U.S. Persons investing directly with the Company.
The Company will be required to withhold U.S. Federal income tax at the rate of up to thirty percent (30%), or lower treaty rate, if applicable on payments of fixed, determinable and periodic income to shareholders and debt obligation holders (including but not limited to dividends, interest, rents, royalties, etc.) to a Non-U.S. Person. Documentation is required by the Manager before the Company can apply a lower tax treaty rate.
The Company is authorized to withhold and pay over any such withholding taxes and treat such withholding as a payment to the Non-U.S. Person if the withholding was required. Such payment will be treated as a Distribution to the extent that the Non-U.S. Person is then entitled to receive a Distribution. To the extent that the aggregate of such payments to a Non-U.S. Person for any period exceeds the Distributions to which they are entitled for such period, the Company will notify the Non-U.S. Person as to the amount of such excess and the amount of such excess will be treated as a loan by the Company to the Non-U.S. Person. If a Non-U.S. Person owns a Membership Interest directly on the date of death, its estate could be further subject to U.S. estate tax with respect to such Interest.
It is intended that the holders of the Company’s debt obligations will qualify for the portfolio interest exemption contained in section 871(h) of the Code so long as their voting interest in the Company is less than 10 percent.
5.2 Foreign Person Withholding
The Company shall comply with all reporting and withholding requirements imposed with respect to Non-U.S. Persons, as defined in the Code, and any Member that is a Non-U.S. Person shall be obligated to contribute to the Company any funds necessary to enable the Company (to the extent not available out of such Member’s share of Distributable Cash or Net Proceeds of Capital Transactions) to satisfy any such withholding obligations. In the event any Member shall fail to contribute to the Company any funds necessary to enable the Company to satisfy any withholding obligation, the Manager shall have the right to offset against any payments due and owing to such Member, or its Affiliates, the amounts necessary to satisfy such withholding obligation, or, in the event the Company shall be required to borrow funds to satisfy any withholding obligation by reason of a Member’s failure to contribute such funds to the Company, the Manager shall have the right to offset against said Member’s present and future Distributions, an amount equal to the amount so borrowed plus the greater of (i) the Company’s actual cost of borrowing such funds, or (ii) the amount borrowed, multiplied by fifteen percent (15%).
5.3 Non-U.S. Taxes
The Company may be subject to withholding and other taxes imposed by, and the Non-U.S. Person might be subject to, taxation and reporting requirements in non-U.S. jurisdictions. It is possible that tax conventions between such countries and the U.S. (or another jurisdiction in which a non-U.S. Member is a resident) might reduce or eliminate certain of such taxes. It is also possible that in some cases, if the Non-U.S. Person is a taxable Member, it might be entitled to claim U.S. tax credits or deductions with respect to such taxes, subject to certain limitations under applicable law. The Company will treat any such tax withheld from or otherwise payable with respect to income allocated to the Company as cash the Company received and will treat the Non-U.S. Person as receiving a payment equal to the portion of such tax that is attributable to it. Similar provisions would apply in the case of taxes the Company is required to withhold.
| Mythic Collection, LLC | Amended and Restated Company Agreement |
| A-2 |
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Appendix B: Definitions
Defined terms are capitalized in this Agreement and may also appear in the Series Agreement. The singular form of any term defined below shall include the plural form and the plural form shall include the singular. Whenever they appear capitalized in this Agreement, the following terms shall have the meanings set forth below unless the context clearly requires a different interpretation:
Act shall mean the Delaware Limited Liability Company Act, as codified in the Delaware Code, Title 6, Chapter 18, as may be amended from time to time, unless a superseding Act governing limited liability companies is enacted by the state legislature and given retroactive effect or repeals this Act in such a manner that it can no longer be applied to interpret the Agreement or Series Agreement, in which case “Act” shall automatically refer to the new Act, where applicable, to the extent such re-interpretation is not contrary to the express provisions of the Agreement or a Series Agreement.
Additional Capital Contribution shall mean any voluntary contribution to the capital of a Series in cash, property, or services by a Member made subsequent to the Member’s initial Capital Contribution in response to a Series Manager’s requires for voluntary Additional Capital Contributions.
Additional Member shall mean any Person admitted to the Company or a Series as a new or additional member, subsequent to the sale of Units or Interests in a Series in exchange for initial Capital Contributions of the Series Members.
Affiliate or Affiliated shall mean any Person controlling or controlled by or under common control with the Founder (or its members), a Member of the Company or a Series wherein the Manager or Member retains greater than fifty percent (50%) control of the Affiliate if an entity.
Article when capitalized and followed by a number refers the provision of this Company Agreement and its Appendices or to provisions of a Series Agreement.
Capital Account shall mean the capital account maintained for each Member in accordance with the provisions of Article 9.8 and in Appendix A hereto. A separate Capital Account shall be maintained for each Series Member's Interest in a Series.
Capital Contribution shall mean, with respect to any Member, any contribution to the Company or a Series in cash or other property (at such other property's initial Gross Asset Value) by such Member whenever made. “Initial Capital Contribution” shall mean, with respect to any Member, the initial contribution by such Member to the Company or a Series pursuant to this Agreement. “Unreturned Capital Contribution” shall mean, with respect to any Member, the initial contribution by such Member to the Company or a Series pursuant to this Agreement, less any returned capital specified as such, that is not classified by the Manager as a return on investment.
Certificate of Formation shall mean the Certificate of Formation of the Company and any and all amendments thereto and restatements thereof filed on behalf of the Company with the office of the Secretary of State of the State of Delaware pursuant to the Act.
| Mythic Collection, LLC | Amended and Restated Company Agreement |
| B-1 |
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Code shall mean the Internal Revenue Code of 1986, as amended from time to time, or any superseding federal tax law. A reference herein to a specific Code section refers, not only to such specific section, but also to any corresponding provision of any superseding federal tax statute, as such specific section or such corresponding provision is in effect on the date of application of the provisions of this Agreement containing such reference.
Company shall refer to Mythic Collection, LLC, formed and continued under and pursuant to the Act and this Agreement.
Company Agreement or Agreement shall mean the Series Limited liability company Agreement, as amended, modified, supplemented or restated from time to time.
Company Minimum Gain has the meaning set forth in sections 1.704‑2(b)(2) and 1.704‑2(d) of the Treasury Regulations.
Covered Person, when capitalized, shall have the meaning as set forth in Article 6.6 hereof.
Depreciation shall mean, with respect to a Series, and for each Fiscal Year or other period, an amount equal to the depreciation, amortization or other cost recovery deduction allowable with respect to an asset associated with such Series for such Fiscal Year or other period; provided, however, that if the Gross Asset Value of an asset associated with such Series differs from its adjusted basis for federal income-tax purposes at the beginning of such Fiscal Year or other period, Depreciation shall be an amount that bears the same ratio to such beginning Gross Asset Value as the federal income-tax depreciation, amortization or other cost recovery deduction with respect to such asset for such Fiscal Year or other period bears to such beginning adjusted tax basis; and provided further, that if the federal income-tax depreciation, amortization or other cost recovery deduction for such Fiscal Year or other period is zero, Depreciation shall be determined with reference to such beginning Gross Asset Value using any reasonable method selected by the Series Manager or Founder.
Disassociated Member shall mean a Member who has been involuntarily disassociated from the Company or a Series by one of the actions described in Article 13.1 or 13.2, or by Voluntary Transfer of its Membership Interest to a Voluntary Transferee as described in Articles 12.3 through 12.8.
Disassociation shall mean an action of the Series Manager of a Series to remove a Series Member’s right to participate in management of the Series (i.e., removal of its voting Interest) for cause (per Article 13.1) or by operation of law (per Article 13.2).
Dispute, when capitalized, shall have the meaning set forth in Article 14 hereof
Distributable Cash shall mean all cash, revenues and funds received by a Series from operation of its Subsidiaries and its Underlying Asset(s), less the sum of the following to the extent paid or set aside by the Series: (i) all principal and interest payments on indebtedness of the Subsidiary of the Series and all other sums paid to lenders with respect to the Series; (ii) all cash expenditures incurred in the normal operation of the Series business; and (iii) such Reserves as the Founder deem reasonably necessary for the proper operation of the Series’ business.
| Mythic Collection, LLC | Amended and Restated Company Agreement |
| B-2 |
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Distribution or Distributions shall mean the cash paid to Series Members on account of their Series Membership Interests.
Economic Interest shall mean a Person’s right to share in the income, gains, losses, deductions, credit, or similar items of, and to receive Distributions from a Series, but does not include any other rights of a Series Member, including, without limitation, the right to vote or to participate in management, and any right to information concerning the business and affairs of the Series in which it is a Member.
Estimated Market Value shall mean the estimated market value of the Underlying Asset(s) owned by a Subsidiary of a Series, which shall be determined annually by the Manager of such Series and reported to the Members of such Series.
Fees refers to compensation received by a Series Manager for services provided to Series as a Series Manager.
Fiscal Year shall mean (i) the period commencing upon the formation of the Company and ending on December 31, (ii) any subsequent twelve (12) month period commencing on May 15 and ending on December 31, or (iii) any portion of the period described in Clause (ii) of this sentence for which the Company is required to allocate Profits, Losses and other items of a Series’ income, gain, loss or deduction pursuant to Article 9 and Appendix A hereof.
Founder shall initially mean Mythic Markets, Inc. a Delaware corporation, which is the initial and sole Member of the Company not associated with any Series.
Free Cash Flow is the net income (as determined under U.S. generally accepted accounting principles (“GAAP”)) generated by the Series plus any change in net working capital and depreciation and amortization (and any other non-cash Operating Expenses) and less any capital expenditures related to the Underlying Asset (“Free Cash Flow”); provided that Free Cash Flow does not include proceeds from a sale of an Underlying Asset. The Manager may maintain Free Cash Flow funds in a deposit account or an investment account for the benefit of the Series.
Gross Asset Value shall mean, with respect to any asset associated with a Series, such asset's adjusted basis for federal income-tax purposes, except as follows:
| (a) | The initial Gross Asset Value of any asset contributed by a Member to a Series shall be the gross fair market value of such asset, as agreed to by the manager of such Series; |
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| (b) | The Gross Asset Value of all assets of a Series shall be adjusted to equal their respective gross fair market values, as determined by the Series Manager, as of the following times: (a) the acquisition of an additional Interest in such Series by any new or existing Member in exchange for more than a de minimis Capital Contribution; (b) the distribution to a Member of such Series of more than a de minimis amount of Series assets as consideration for an Interest in the Series; and (c) the liquidation of the assets of a Series within the meaning of Treasury Regulation §1.704-1(b)(2)(ii)(g); provided, however, that adjustments pursuant to Clause (a) and Clause (b) of this sentence shall be made only if the Series Manager of such Series reasonably determines that such adjustments are necessary or appropriate to reflect the relative Economic Interests of the Members in such Series; and |
| Mythic Collection, LLC | Amended and Restated Company Agreement |
| B-3 |
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| (c) | The Gross Asset Value of any Series asset that is distributed to any Series Member shall be the gross fair market value of such asset on the date of Distribution, as determined by the Manager of such Series, which shall be determined by any commercially reasonable method. |
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| (d) | If the Gross Asset Value of an asset has been determined or adjusted pursuant to Paragraph (a) or Paragraph (b) above, such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing Series Profits and Losses. |
Interest or Membership Interest shall mean a Member’s rights in the Company (with respect to the Founder), or a Series (with respect to Series Members), including the Member’s Economic Interest in the Company of a Series, plus any additional right to vote or participate in management of the Company or Series, and any right to information concerning the business and affairs of the Company or Series provided by the Act and/or described in the Company Agreement or a Series Agreement.
Investor shall mean Persons who make Capital Contributions to a Series of the Company in exchange for Membership Interests in such Series.
Involuntary Transfer shall mean any transfer not specifically authorized under Article 12.
Involuntary Transferee shall mean a Series Member’s heirs, estate, or creditors that have taken by foreclosure, receivership, or inheritance and not as a result of a Voluntary Transfer.
Majority of Interests shall mean, with respect to a Series, the vote of Membership Interests of one or more Series Members that in the aggregate exceed fifty percent (50%) of all voting Percentage Interests owned by Members of that Series entitled to vote. Except as otherwise provided in a Series Agreement; non-voting Series Members, if applicable, shall have no voting rights.
Member Class shall mean a separate class of interests in a Series as described in Article 5.2 whose rights and duties are separate and distinct from other Members in a Series.
Member or Company Member, with respect to the Company, shall include Mythic Markets, Inc. a Delaware corporation, as the Founder of the Company. Member or Series Member shall include Persons later admitted as Members of a Series, who shall be admitted in accordance with this Agreement. Upon being admitted as a Member of a Series, unless otherwise specified such Series Agreement, such Series Member shall not be considered admitted as a Member of the Company or any other Series.
Member Nonrecourse Debt has the meaning set forth in section 1.704‑2(b)(4) of the Treasury Regulations.
Member Nonrecourse Debt Minimum Gain means an amount, with respect to each Member Nonrecourse Debt, equal to the Company Minimum Gain that would result if such Member Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with section 1.704‑2(i)(3) of the Treasury Regulations.
| Mythic Collection, LLC | Amended and Restated Company Agreement |
| B-4 |
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Member Nonrecourse Deductions has the meaning set forth in Treasury Regulation section 1.704-2(i)(2). For any Fiscal Year of the Company, the amount of Member Nonrecourse Deductions with respect to a Member Nonrecourse Debt equals the net increase during that Fiscal Year in Member Nonrecourse Debt Minimum Gain attributable to such Member Nonrecourse Debt during that Fiscal Year, reduced (but not below zero) by the amount of any Distributions during such year to the Member bearing the economic risk of loss for such Member Nonrecourse Debt if such Distributions are both from the proceeds of such Member Nonrecourse Debt and are allocable to an increase in Member Nonrecourse Debt Minimum Gain attributable to such Member Nonrecourse Debt, all as determined according to the provisions of Treasury Regulation section 1.704-2(i)(2). In determining Member Nonrecourse Deductions, the ordering rules of Treasury Regulation section 1.704-2(j) shall be followed.
Non-Capital Contributions shall mean the contributions made by Members of the Company or a Series other than cash.
Nonrecourse Deductions has the meaning set forth in Treasury Regulation section 1.704-2(c). The amount of Nonrecourse Deductions for a Company Fiscal Year equals the net increase in the amount of Company Minimum Gain during that Fiscal Year, reduced (but not below zero) by the aggregate amount of any Distributions during that Fiscal Year of proceeds of a Nonrecourse Liability that are allocable to an increase in Company Minimum Gain.
Nonrecourse Liability has the meaning set forth in section 1.704-2(b)(3) of the Treasury Regulations.
Notice of Sale shall have the meaning set forth in Article 12.8, pertaining to a Voluntary Transfer of a Series Member’s Interest.
Percentage Interest or Series Percentage Interest shall mean, for any Member associated with a Series, such Member’s Percentage Interest in such Series, as set forth herein or in a Series Agreement.
Person or Persons shall mean any individual or legal entity, their heirs, executors, administrators, legal representatives, successors, and assigns of such individual or entity where the context so permits.
Profits and Losses shall mean, with respect to a Series, and for each Fiscal Year, an amount equal to the Series’ taxable income or loss associated with such Series for a Fiscal Year, determined in accordance with §703(a) of the Code (but including in taxable income or loss, for this purpose, all items of income, gain, loss or deduction associated with such Series that are required to be stated separately pursuant to §703(a)(1) of the Code), with the following adjustments:
| Mythic Collection, LLC | Amended and Restated Company Agreement |
| B-5 |
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| (a) | Any income of a Series that is exempt from federal income tax and not otherwise taken into account in computing Profits or Losses pursuant to this definition shall be added to such taxable income or loss; |
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| (b) | Any expenditures of such Series that are described in §705(a)(2)(B) of the Code (or treated as expenditures described in §705(a)(2)(B) of the Code pursuant to Treasury Regulation §1.704-1(b)(2)(iv)(i)) and not otherwise taken into account in computing Profits or Losses pursuant to this definition shall be subtracted from such taxable income or loss; |
| (a) | In the event the Gross Asset Value of any asset associated with such Series is adjusted in accordance with Paragraph (ii) or Paragraph (iii) of the definition of “Gross Asset Value” above, the amount of such adjustment shall be taken into account as gain or loss from the disposition of such asset for purposes of computing Profits or Losses; |
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| (b) | Gain or loss resulting from any disposition of any asset of such Series with respect to which gain or loss is recognized for federal income-tax purposes shall be computed by reference to the Gross Asset Value of the asset disposed of, notwithstanding that the adjusted tax basis of such asset differs from its Gross Asset Value; and |
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| (c) | In lieu of the Depreciation, amortization and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation associated with such Series for such Fiscal Year or other period, computed in accordance with the definition of “Depreciation” above. |
Purchasing Member shall mean any current Series Member, Series Manager or Founder that agrees to purchase a selling Series Members Interest with respect to a Series, including the Series Member’s Economic Interest and/or voting rights referenced in Articles 12 and 13.
Remaining Members shall have the meaning set forth in Articles 12 and 13 hereof.
Reserves shall mean, with respect to a Series, funds set aside or amounts allocated to reserves that shall be maintained in amounts deemed sufficient by the Series Manager of such Series for working capital and to pay taxes, insurance, debt service or other costs or expenses incident to the ownership or operation of the business of the Company with respect to such Series, or incident to the liquidation of such Series pursuant to Article 15.3.
Section, when capitalized and followed by a number, refers the sections of the Appendices to this Company Agreement.
Selling Member shall mean any Series Member that sells, assigns, hypothecates, pledges, or otherwise transfers all or any portion of its rights of membership in a Series, including its Economic Interest and/or voting rights.
| Mythic Collection, LLC | Amended and Restated Company Agreement |
| B-6 |
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Series shall mean a designated Series with separate Members, Managers or Interests established in accordance with this Agreement, the Act, and a Series Agreement having separate rights, powers or duties with respect to Underlying Asset(s) or obligations or profits and losses associated with Underlying Asset(s) or obligations and, to the extent provided in this Agreement or a Series Agreement.
Series Agreement shall mean a separate, abbreviated Agreement (including amendments) establishing a Series, and executed by the Founder and Series Managers and adopted (via their Subscription Booklets) by the Series Members. To the extent that a Series Agreement conflicts with the Company Agreement, the Series Agreement shall control.
Series Manager shall mean a Person appointed by the Founder of the Company to manage a Series of the Company, or such Person as may be subsequently elected by the Series Members.
Series Member shall mean a Person who has made a Capital Contribution to the Company in exchange for Membership Interests in a Series of the Company.
Subsidiary or Subsidiaries shall mean the single purpose limited liability companies formed by the Founder to take title to individual Properties.
Substitute Member shall mean any Person or entity admitted to a Series as a Member of the Series, on approval by the Series Manager, with all the rights of a Series Member pursuant to Article 7 of this Agreement.
Transferee when capitalized, shall have the meaning set forth in Article 12 hereof.
Treasury Regulations shall mean the income-tax regulations, including temporary regulations, promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of superseding regulations).
Underlying Asset(s) or Asset shall mean those assets that an individual Series acquires to advance the purpose of the Company. The Company, via individual Series, intends to acquire such as, but not limited to, collectible cards, comic books, action figures, statutes, games, graphic novels, apparel, toys and other collectible assets. Underlying Assets shall be specified in separate Series Agreements.
Voluntary Transfer shall have the meaning set forth in Article 12.
| Mythic Collection, LLC | Amended and Restated Company Agreement |
| B-7 |
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Appendix C: List of Series and Underlying Asset(s) of the Series
List of Series
(FOR INTERNAL USE ONLY)
| Series Name | Underlying Asset(s) of the Series |
| Mythic Collection, LLC | Amended and Restated Company Agreement |
| C-1 |
EXHIBIT 2.3
| SERIES AGREEMENT SERIES MTG-ABL90, LLC |
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| A Delaware Series Limited Liability Company February 1, 2019 |
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TABLE OF CONTENTS
| 1. | New Series |
| 1 |
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| 1.1 | Purpose |
| 1 |
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| 1.2 | Name of Series |
| 2 |
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| 1.3 | Definitions |
| 2 |
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| 1.4 | Term |
| 2 |
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| 2. | Management |
| 2 |
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| 2.1 | Management of Series Business |
| 2 |
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| 2.2 | Series Manager’s Limitation of Liability |
| 2 |
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| 2.3 | Powers of the Series Manager |
| 2 |
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| 2.4 | Exculpation |
| 3 |
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| 3. | Members |
| 3 |
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| 3.1 | Class A Members |
| 3 |
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| 3.2 | Class B Members |
| 4 |
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| 4. | Offering Details |
| 4 |
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| 4.1 | Working Capital and Reserves |
| 4 |
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| 4.2 | Deferral of Reimbursements or Manager’s Fees |
| 4 |
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| 5. | Capital Contributions |
| 5 |
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| 5.1 | Initial Contributions |
| 5 |
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| 5.2 | Additional Contributions |
| 5 |
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| 6. | Profits, Losses and Distributions |
| 5 |
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| 6.1 | Profits and Losses |
| 5 |
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| 6.2 | Distributions |
| 5 |
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| 7. | Compensation |
| 6 |
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| 7.1 | Series Manager Fees |
| 6 |
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| 7.2 | Reimbursement |
| 6 |
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| 8. | Bookkeeping |
| 7 |
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| 9. | Transfers |
| 7 |
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| 10. | Dissolution |
| 7 |
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| 11. | Miscellaneous Provisions |
| 7 |
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| 11.1 | Agreement to Be Bound |
| 7 |
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| 11.2 | Headings |
| 7 |
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| 11.3 | Severability |
| 7 |
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| 11.4 | Integration |
| 8 |
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| 11.5 | Counterparts |
| 8 |
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| 11.6 | Governing Law |
| 8 |
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| 12. | Signatures |
| 9 |
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| Appendix A: SERIES MTG-ABL90 Members |
| A-1 |
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| SERIES MTG-ABL90, LLC |
| Series Agreement |
| ii |
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SERIES AGREEMENT
FOR
SERIES MTG-ABL90, LLC
A Delaware Series Limited Liability Company
THIS SERIES AGREEMENT, dated February 1, 2019 (“Series Agreement”), is entered into by and between the Mythic Collection, LLC (the “Company”), and the members of its associated and newly created Series (“SERIES MTG-ABL90”), and the Series Manager, Mythic Markets, Inc., a Delaware corporation (“Series Manager”), collectively the “parties” as further described below.
RECITALS
WHEREAS, the parties hereto have formed a Series limited liability company pursuant to the Delaware Limited Liability Company Act by filing the Certificate of Formation for the Company with the office of the Secretary of the State of Delaware and by entering into the Company Agreement of the Company accompanying this Series Agreement; and
WHEREAS, it is intended by the parties to create an additional Series with such Series having an address of 16 Lagoon Court, San Rafael, California 94903, which shall, acquire, own, and manage Series Underlying Asset(s) from that owned by the Company or associated with any other Series as may be formed by the Company; and
WHEREAS, it is intended by the parties hereto that the debts, liabilities and obligations incurred, contracted for or otherwise existing with respect to this Series and its Series Underlying Asset(s) be enforceable against the assets of this Series and its Series Underlying Asset(s) only, and not against the assets of the Company generally or any other Series thereof; and
NOW THEREFORE, in consideration of the mutual promises and obligations contained herein, the parties, intending to be legally bound, hereby agree as follows:
1. New Series
The Founding Members of the Company hereby create a new Series, which shall be called “SERIES MTG-ABL90, LLC” or “SERIES MTG-ABL90” for purposes of the Company Agreement and this Series Agreement.
1.1 Purpose
SERIES MTG-ABL90, LLC was formed to:
| (a) | To acquire, investment, manage, operate, liquidate, and dispose of Underlying Asset(s) by sale or lease to a third-party or to an Affiliate of the Company or its members; |
| SERIES MTG-ABL90, LLC | Series Agreement |
| 1 |
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| (b) | Transact all business necessary, appropriate, advisable, convenient, or incidental to the foregoing provisions and objectives. |
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| (c) | The Underlying Asset(s) of the Series is/are list in Appendix B hereto. |
1.2 Name of Series
The name of the Series created by this Series Agreement shall be SERIES MTG-ABL90, LLC.
1.3 Definitions
The definitions of capitalized terms not otherwise defined herein are provided in the Company Agreement for Mythic Collections, LLC to which this Agreement is attached as an Exhibit.
1.4 Term
The Series shall commence upon the execution of this Series Agreement, and its approval by the Company Manager.
The Series Agreement will terminate on the earlier of: (i) one year after the date on which the relevant Underlying Asset has been liquidated and the obligations connected to the Underlying Asset (including, contingent obligations) have been terminated, (ii) the removal of Mythic Markets, Inc. as managing member of the Company (and thus all Series of Interests), (iii) upon notice by one party to the other party of a party’s material breach of the Series Agreement or (iv) such other date as agreed between the parties to the Series Agreement.
2. Management
2.1 Management of Series Business
The management of the SERIES MTG-ABL90 is invested in a Manager. The Manager of SERIES MTG-ABL90 is Mythic Collections, LLC, a Delaware limited liability company (hereinafter “Series Manager”), whose manager is Mythic Markets, Inc., a Delaware corporation, whose CEO is Joe Mahavuthivanij.
2.2 Series Manager’s Limitation of Liability
The liability of the Series Manager shall be limited as provided pursuant to applicable law. The Series Manager is in control of the management, direction, and operation of the Series' affairs and shall have powers to bind the Series with any legally binding agreement, including setting up and operating separate bank accounts on behalf of the Series.
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2.3 Powers of the Series Manager
The services provided by the Series Manager will include:
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| · | Together with members of the Advisory Board, creating the asset maintenance policies for the collection of assets; |
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| · | Investigating, selecting, and, on behalf of the applicable series, engaging and conducting business with such persons as the Series Manager deems necessary to ensure the proper performance of its obligations under the Company and Series Agreement, including but not limited to consultants, insurers, insurance agents, maintenance providers, storage providers and transportation providers and any and all persons acting in any other capacity deemed by the Series Manager necessary or desirable for the performance of any of the services under the Company and Series Agreement; and |
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| · | Developing standards for the transportation and care of the Underlying Assets. |
2.4 Exculpation
The Series Manager shall not be subject to any liability to the Members for any act or omission, the effect of which may cause or result in loss or damage to the Series or the Members if done in good faith to promote the best interests of the Series.
3. Members
Each of the signatories to this Series Agreement shall be referenced herein as a “Member” or “Series Member” and collectively, as the “Members” or “Series Members” as defined herein and in the Definitions section of the Company Agreement. The Members shall immediately, and from time to time hereafter, execute all documents and do all filing, recording, and other acts as may be required to comply with the operation of the Company or Series under the Act. The Series Manager will maintain an updated list of all Members as shown on Appendix A to this Series Agreement.
3.1 Members (Investors)
Investors will purchase Interests in the Series exchange for their Capital Contributions, and in so doing, will become Members. Members will be entitled to priority returns on their investment and a return of their Capital Contributions before the Series Manager. Class A Members will own fifty percent (50%) of the Interests in the Company and will have a limited right to vote on certain matters described in the Company Agreement associated with this Series Agreement. The Class A Members will contribute ninety percent (90%) to ninety-eight percent (98%) of the Total Dollar Amount or total Capital Contributions. This is the total contribution of the class and will depend on the contribution by the Class B Members.
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3.2 Manager Members (Manager and related parties)
Interests will be distributed to the Series Manager and/or the Key Principals (“Manager Interests”) identified in the SERIES MTG-ABL90 Business Overview (and/or their Affiliates), or others to whom the Series Manager grants or sells Class B Interests. The Class B Members will own fifty percent (50%) of SERIES MTG-ABL90 in exchange for their contribution of services to SERIES MTG-ABL90. The Manager will contribute two percent (2%) to ten percent (10%) of the Total Dollar Amount or total Capital Contributions. This will establish a Capital Account Balance for the Manager.
4. Offering Details
An Offering for the sale of Interests in the Series shall commence upon qualification of the Form 1-A specifying the Series as filed with the Securities Exchange Commission.
Some of the proceeds will be used to reimburse the Manager, its Affiliates, or third-parties for expenses related to acquisition, improvements, or management of a Asset, including but not limited to such things as due diligence, maintenance, storage, escrow or loan fees associated with acquisition of an Asset, earnest money deposits, organizational expenses, loan guarantee fees, legal fees and other miscellaneous expenses.
The Manager will be reimbursed for legal and organizational expenses associated with setting up the Series.
4.1 Working Capital and Reserves
Proceeds of the Offering that are not used to acquire the Asset will be held in the Series bank account for use as Working Capital and Reserves during operation of the Series. If only a small amount of capital is raised, then additional Working Capital and Reserves may need to be accumulated from cash flow during operation of the Asset and any Distributions to the Members may be deferred until such time as sufficient Reserves have been accumulated, at the Manager’s sole discretion.
4.2 Deferral of Reimbursements or Manager’s Fees
If less than the cost of the Underlying Asset(s)of capital is raised, the Manager may defer collection of Manager’s Fees shown in the Total Dollar Amount column and reimbursement for its expenses without forfeiting any right to collect. The Manager may also elect to defer the collection of Fees due the Manager. In either event the Series will pay the Manager ten percent (10%) annual interest on the deferral of the reimbursements or Fees.
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4.3 Operating Expenses
The Manager has agreed to pay and not be reimbursed for Operating Expenses incurred prior to the Closing. Operating Expenses incurred post-Closing shall be the responsibility of the Series. However, if the Operating Expenses exceed the amount of revenues generated from the Underlying Asset, the Manager may (a) pay such Operating Expenses and not seek reimbursement, (b) loan the amount of the Operating Expenses to the Series, on which the Manager may impose a reasonable rate of interest, which shall not be lower than the Applicable Federal Rate (as defined in the Internal Revenue Code), and be entitled to reimbursement of such amount from future revenues generated by the Series Alpha Black Lotus (“Operating Expenses Reimbursement Obligation(s)”), and/or (c) cause additional Interests to be issued in order to cover such additional amounts.
We do not anticipate that the Series will generate any revenues in 2019 and expect the Series to either incur Operating Expenses Reimbursement Obligations or that the Manager pays such Operating Expenses incurred and will not seek reimbursement. See discussion of “Description of the Business – Operating Expenses” for additional information.
5. Capital Contributions
5.1 Initial Contributions
The Members initially shall contribute capital to the SERIES MTG-ABL90 as described in Appendix A to this Series Agreement.
5.2 Additional Contributions
No Member shall be obligated to make any additional contribution to the Series’ capital, except in the case of a capital call as described in the Company Agreement.
6. Profits, Losses and Distributions
6.1 Profits and Losses
For financial accounting and tax purposes the Series’ net profits or net losses shall be determined on an annual basis and shall be allocated to the Members in proportion to each Member's relative capital interest in the Series as set forth in Appendix A hereto as amended from time to time in accordance with Treasury Regulation 1.704-1.
6.2 Free Cash Flow Distributions
Free Cash Flow is the net income (as determined under U.S. generally accepted accounting principles (“GAAP”)) generated by the Series plus any change in net working capital and depreciation and amortization (and any other non-cash Operating Expenses) and less any capital expenditures related to the Underlying Asset (“Free Cash Flow.”) The Manager may maintain Free Cash Flow funds in a deposit account or an investment account for the benefit of the Series.
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The Manager has sole discretion in determining what distributions of Free Cash Flow, if any, are made to Members of the Series of Interests. Any Free Cash Flow generated by the Series of Interests from the utilization of the Underlying Asset shall be applied within the Series of Interests in the following order of priority:
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| · | repay any amounts outstanding under Operating Expenses Reimbursement Obligations plus accrued interest; |
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| · | thereafter to create such reserves as the Manager deems necessary, in its sole discretion, to meet future Operating Expenses; and; |
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| · | thereafter, 50% (net of corporate income taxes applicable to the Series of Interests) by way of distribution to the Interest Holders of the Series of Interests, which may include the Asset Sellers (as defined below) of the Underlying Asset or the Manager or any of its affiliates, and; |
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| · | 50% to the Series Manager in payment of the Management Fee. |
6.3 Timing of Free Cash Flow Distributions
The Manager may make semi-annual distributions of Free Cash Flow remaining to Interest Holders subject to it having the right, in its sole discretion, to withhold distributions including the Management Fee in order to meet anticipated costs and liabilities of the Series. The Manager may change the timing of potential distributions in its sole discretion.
7. Compensation
7.1 Series Manager Fees
The Series Manager (and/or its members or their Affiliates) will earn certain Fees for management of the Series, as described below:
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| · | The Series Manager will earn a Sourcing Fee of five percent (5%) of the purchase price of the Asset. The “Sourcing Fee” is a fee paid to the Series Manager as compensation for performing due diligence and purchasing a Series Underlying Asset(s) on behalf of the Series. |
7.2 Reimbursement
The Series shall reimburse the Series Manager for all direct out-of-pocket expenses incurred by the Series Manager in managing the Series. Further, any Members or Affiliates of the Series Manager who incur out-of-pocket expenses on behalf of the Series will be reimbursed.
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8. Bookkeeping
9. The Series, for accounting and income tax purposes, shall operate on a Fiscal Year ending December 31 of each year, and shall make such income tax elections and use such methods of depreciation as shall be determined by the Series Manager. The books and records of the Company will be kept on a GAAP basis in accordance with sound accounting practices to reflect all income and expenses of the Series. Transfers
Should any Member have a creditor with a judgment for an assignment of a Membership Interest, the creditor shall only obtain Economic Interest (no voting rights) that such Member has in the Series. The new assignee does not have any rights of the Member or have the ability to be involved in management of the Company or Series or the right to dissolve or partition the Company or Series. The new assignee will only be granted rights to the Member’s Distributions, if the Series Manager decides to distribute at all. The assignee must release the Member’s interests back to the Member upon payment of the judgment.
10. Dissolution
The Series Manager may dissolve the Series at any time once the Series Underlying Asset(s) has been sold. Upon dissolution the Series must pay its debts first before distributing cash, assets, and/or initial capital to the Members or the Membership Interests. The dissolution may only be ordered by the Series Manager or the Founder, not by an owner of Series Membership Interests or by any other member of the Company.
11. Miscellaneous Provisions
11.1 Agreement to Be Bound
Each of the undersigned agrees to be bound by the terms and provisions of this Series Agreement, and the terms of the Company Agreement to which this Series Agreement is attached as an Exhibit.
11.2 Headings
The headings in this Series Agreement are included for convenience and identification only and are in no way intend to describe, interpret, define or limit the scope, extent, or intent of this Series Agreement or any provision hereof.
11.3 Severability
The invalidity or unenforceability of any particular provision of this Series Agreement shall not affect the other provisions hereof, and this Series Agreement shall be construed in all respects as if such invalid or unenforceable provision was omitted.
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11.4 Integration
This Series Agreement and the Company Agreement collectively constitute the entire agreement among the parties hereto pertaining to the subject matter hereof and shall supersede all prior agreements and understandings pertaining thereto.
11.5 Counterparts
This Series Agreement may be executed in any number of counterparts with the same effect as if all parties had signed the same document. All counterparts shall be construed together and shall constitute one instrument.
11.6 Governing Law
This Series Agreement and the rights of the parties hereunder shall be interpreted in accordance with the laws of the State of Delaware pertaining to a Delaware Series limited liability company, and all rights and remedies shall be governed by such laws, without regard to principles of conflict of laws.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
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12. Signatures
IN WITNESS WHEREOF, the parties hereto have executed this Agreement of SERIES MTG-ABL90, LLC, as of the date and year first above written.
MASTER LIMITED LIABILITY COMPANY
Dated: February 1, 2019 By: SERIES MTG-ABL90, LLC
A Delaware Series Limited Liability Company
By: Its Series Manager,
Mythic Collection, LLC
A Delaware Series Limited Liability Company
By: Its Manager,
Mythic Market, Inc.
A Delaware Corporation
/s/ Joe Mahavuthivanij
By: Its CEO,
Joe Mahavuthivanij
SERIES MANAGER
Dated: February 1, 2019 By: Mythic Collection, LLC
A Delaware Series Limited Liability Company
By: Its Manager,
Mythic Market, Inc.
A Delaware Corporation
/s/ Joe Mahavuthivanij
By: Its CEO,
Joe Mahavuthivanij
| ALL SUBSCRIBERS INDICATE ACCEPTANCE OF THIS AGREEMENT BY COMPLETING, EXECUTING AND RETURNING THE SUBSCRIPTION AGREEMENT TO THE MANAGER AT THE ADDRESS PROVIDED HEREIN. |
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Appendix A: SERIES MTG-ABL90 Members
SERIES MTG-ABL90 Members
(Members and Manager)
(FOR INTERNAL USE ONLY)
| Entity/Name | Capital Contribution | Percentage Interests |
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| TOTAL |
| 100% |
*DUPLICATE THIS PAGE IF NECESSARY
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Appendix B: SERIES UNDERLYING ASSETS
1. Magic: The Gathering Alpha Black Lotus Collectible Card with serial number #0010606601
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EXHIBIT 2.4
| SERIES AGREEMENT SERIES MTG-94 Box, LLC |
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| A Delaware Series Limited Liability Company April 2, 2020 |
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TABLE OF CONTENTS
| 1. | New Series |
| 1 |
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| 1.1 | Purpose |
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| 1.2 | Name of Series |
| 2 |
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| 1.3 | Definitions |
| 2 |
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| 1.4 | Term |
| 2 |
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| 2. | Management |
| 2 |
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| 2.1 | Management of Series Business |
| 2 |
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| 2.2 | Series Manager’s Limitation of Liability |
| 2 |
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| 2.3 | Powers of the Series Manager |
| 2 |
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| 2.4 | Exculpation |
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| 3. | Members |
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| 3.1 | Investor Members |
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| 3.2 | Manager Members |
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| 4. | Offering Details |
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| 4.1 | Working Capital and Reserves |
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| 4.2 | Deferral of Reimbursements or Manager’s Fees |
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| 5. | Capital Contributions |
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| 5.1 | Initial Contributions |
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| 5.2 | Additional Contributions |
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| 6. | Profits, Losses and Distributions |
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| 6.1 | Profits and Losses |
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| 6.2 | Distributions |
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| 7. | Compensation |
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| 7.1 | Series Manager Fees |
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| 7.2 | Reimbursement |
| 6 |
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| 8. | Bookkeeping |
| 7 |
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| 9. | Transfers |
| 7 |
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| 10. | Dissolution |
| 7 |
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| 11. | Miscellaneous Provisions |
| 7 |
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| 11.1 | Agreement to Be Bound |
| 7 |
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| 11.2 | Headings |
| 7 |
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| 11.3 | Severability |
| 7 |
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| 11.4 | Integration |
| 8 |
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| 11.5 | Counterparts |
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| 11.6 | Governing Law |
| 8 |
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| 12. | Signatures |
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| Appendix A: SERIES MTG-94BOX Members |
| A-1 |
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| SERIES MTG-94BOX, LLC |
| Series Agreement |
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SERIES AGREEMENT
FOR
SERIES MTG-94BOX, LLC
A Delaware Series Limited Liability Company
THIS SERIES AGREEMENT, dated April 2, 2020 (“Series Agreement”), is entered into by and between the Mythic Collection, LLC (the “Company”), and the members of its associated and newly created Series (“SERIES MTG-94Box”), and the Series Manager, Mythic Markets, Inc., a Delaware corporation (“Series Manager”), collectively the “parties” as further described below.
RECITALS
WHEREAS, the parties hereto have formed a Series limited liability company pursuant to the Delaware Limited Liability Company Act by filing the Certificate of Formation for the Company with the office of the Secretary of the State of Delaware and by entering into the Company Agreement of the Company accompanying this Series Agreement; and
WHEREAS, it is intended by the parties to create an additional Series with such Series having an address of 16 Lagoon Court, San Rafael, California 94903, which shall, acquire, own, and manage Series Underlying Asset(s) from that owned by the Company or associated with any other Series as may be formed by the Company; and
WHEREAS, it is intended by the parties hereto that the debts, liabilities and obligations incurred, contracted for or otherwise existing with respect to this Series and its Series Underlying Asset(s) be enforceable against the assets of this Series and its Series Underlying Asset(s) only, and not against the assets of the Company generally or any other Series thereof; and
NOW THEREFORE, in consideration of the mutual promises and obligations contained herein, the parties, intending to be legally bound, hereby agree as follows:
1. New Series
The Founding Members of the Company hereby create a new Series, which shall be called “SERIES MTG-94BOX, LLC” or “SERIES MTG-94BOX” for purposes of the Company Agreement and this Series Agreement.
1.1 Purpose
SERIES MTG-94BOX, LLC was formed to:
| (a) | To acquire, investment, manage, operate, liquidate, and dispose of Underlying Asset(s) by sale or lease to a third-party or to an Affiliate of the Company or its members; |
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| (b) | Transact all business necessary, appropriate, advisable, convenient, or incidental to the foregoing provisions and objectives. |
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| (c) | The Underlying Asset(s) of the Series is/are list in Appendix B hereto. |
1.2 Name of Series
The name of the Series created by this Series Agreement shall be SERIES MTG-94BOX, LLC.
1.3 Definitions
The definitions of capitalized terms not otherwise defined herein are provided in the Company Agreement for Mythic Collections, LLC to which this Agreement is attached as an Exhibit.
1.4 Term
The Series shall commence upon the execution of this Series Agreement, and its approval by the Company Manager.
The Series Agreement will terminate on the earlier of: (i) one year after the date on which the relevant Underlying Asset has been liquidated and the obligations connected to the Underlying Asset (including, contingent obligations) have been terminated, (ii) the removal of Mythic Markets, Inc. as managing member of the Company (and thus all Series of Interests), (iii) upon notice by one party to the other party of a party’s material breach of the Series Agreement or (iv) such other date as agreed between the parties to the Series Agreement.
2. Management
2.1 Management of Series Business
The management of the SERIES MTG-94BOX is invested in a Manager. The Manager of SERIES MTG-94BOX is Mythic Collections, LLC, a Delaware limited liability company (hereinafter “Series Manager”), whose manager is Mythic Markets, Inc., a Delaware corporation, whose CEO is Joe Mahavuthivanij.
2.2 Series Manager’s Limitation of Liability
The liability of the Series Manager shall be limited as provided pursuant to applicable law. The Series Manager is in control of the management, direction, and operation of the Series' affairs and shall have powers to bind the Series with any legally binding agreement, including setting up and operating separate bank accounts on behalf of the Series.
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2.3 Powers of the Series Manager
The services provided by the Series Manager will include:
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| · | Together with members of the Advisory Board, creating the asset maintenance policies for the collection of assets; |
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| · | Investigating, selecting, and, on behalf of the applicable series, engaging and conducting business with such persons as the Series Manager deems necessary to ensure the proper performance of its obligations under the Company and Series Agreement, including but not limited to consultants, insurers, insurance agents, maintenance providers, storage providers and transportation providers and any and all persons acting in any other capacity deemed by the Series Manager necessary or desirable for the performance of any of the services under the Company and Series Agreement; and |
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| · | Developing standards for the transportation and care of the Underlying Assets. |
2.4 Exculpation
The Series Manager shall not be subject to any liability to the Members for any act or omission, the effect of which may cause or result in loss or damage to the Series or the Members if done in good faith to promote the best interests of the Series.
3. Members
Each of the signatories to this Series Agreement shall be referenced herein as a “Member” or “Series Member” and collectively, as the “Members” or “Series Members” as defined herein and in the Definitions section of the Company Agreement. The Members shall immediately, and from time to time hereafter, execute all documents and do all filing, recording, and other acts as may be required to comply with the operation of the Company or Series under the Act. The Series Manager will maintain an updated list of all Members as shown on Appendix A to this Series Agreement.
3.1 Members (Investors)
Investors will purchase Interests in the Series exchange for their Capital Contributions, and in so doing, will become Members. Members will be entitled to priority returns on their investment and a return of their Capital Contributions before the Series Manager. Members will own fifty percent (50%) of the Interests in the Company and will have a limited right to vote on certain matters described in the Company Agreement associated with this Series Agreement. The Members, other than the Manager, will contribute ninety percent (90%) to ninety-eight percent (98%) of the Total Dollar Amount or total Capital Contributions. This is the total contribution of the class and will depend on the contribution by the Manager.
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3.2 Manager Members (Manager and related parties)
Interests will be distributed to the Series Manager and/or the Key Principals (“Manager Interests”) and/or their Affiliates, or others to whom the Series Manager grants or sells Interests. The Series Manager, Key Principals, or those who provide services in exchange for Interests as determined by the Series Manager, will own fifty percent (50%) of SERIES MTG-94BOX in exchange for their contribution of services to SERIES MTG-94BOX. The Manager will contribute two percent (2%) to ten percent (10%) of the Total Dollar Amount or total Capital Contributions. This will establish a Capital Account Balance for the Manager.
4. Offering Details
An Offering for the sale of Interests in the Series shall commence upon qualification of the Form 1-A specifying the Series as filed with the Securities Exchange Commission.
Some of the proceeds will be used to reimburse the Manager, its Affiliates, or third-parties for expenses related to acquisition, improvements, or management of a Asset, including but not limited to such things as due diligence, maintenance, storage, escrow or loan fees associated with acquisition of an Asset, earnest money deposits, organizational expenses, loan guarantee fees, legal fees and other miscellaneous expenses.
The Manager will be reimbursed for legal and organizational expenses associated with setting up the Series.
4.1 Working Capital and Reserves
Proceeds of the Offering that are not used to acquire the Asset will be held in the Series bank account for use as Working Capital and Reserves during operation of the Series. If only a small amount of capital is raised, then additional Working Capital and Reserves may need to be accumulated from cash flow during operation of the Asset and any Distributions to the Members may be deferred until such time as sufficient Reserves have been accumulated, at the Manager’s sole discretion.
4.2 Deferral of Reimbursements or Manager’s Fees
If less than the cost of the Underlying Asset(s)of capital is raised, the Manager may defer collection of Manager’s Fees shown in the Total Dollar Amount column and reimbursement for its expenses without forfeiting any right to collect. The Manager may also elect to defer the collection of Fees due the Manager. In either event the Series will pay the Manager ten percent (10%) annual interest on the deferral of the reimbursements or Fees.
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4.3 Operating Expenses
The Manager has agreed to pay and not be reimbursed for Operating Expenses incurred prior to the Closing. Operating Expenses incurred post-Closing shall be the responsibility of the Series. However, if the Operating Expenses exceed the amount of revenues generated from the Underlying Asset, the Manager may (a) pay such Operating Expenses and not seek reimbursement, (b) loan the amount of the Operating Expenses to the Series, on which the Manager may impose a reasonable rate of interest, which shall not be lower than the Applicable Federal Rate (as defined in the Internal Revenue Code), and be entitled to reimbursement of such amount from future revenues generated by the Series \(“Operating Expenses Reimbursement Obligation(s)”), and/or (c) cause additional Interests to be issued in order to cover such additional amounts.
We do not anticipate that the Series will generate any revenues in 2020 and expect the Series to either incur Operating Expenses Reimbursement Obligations or that the Manager pays such Operating Expenses incurred and will not seek reimbursement. See discussion of “Description of the Business – Operating Expenses” for additional information.
5. Capital Contributions
5.1 Initial Contributions
The Members initially shall contribute capital to the SERIES MTG-94BOX as described in Appendix A to this Series Agreement.
5.2 Additional Contributions
No Member shall be obligated to make any additional contribution to the Series’ capital, except in the case of a capital call as described in the Company Agreement.
6. Profits, Losses and Distributions
6.1 Profits and Losses
For financial accounting and tax purposes the Series’ net profits or net losses shall be determined on an annual basis and shall be allocated to the Members in proportion to each Member's relative capital interest in the Series as set forth in Appendix A hereto as amended from time to time in accordance with Treasury Regulation 1.704-1.
6.2 Free Cash Flow Distributions
Free Cash Flow is the net income (as determined under U.S. generally accepted accounting principles (“GAAP”)) generated by the Series plus any change in net working capital and depreciation and amortization (and any other non-cash Operating Expenses) and less any capital expenditures related to the Underlying Asset (“Free Cash Flow”); provided that Free Cash Flow does not include proceeds from a sale of an Underlying Asset. The Manager may maintain Free Cash Flow funds in a deposit account or an investment account for the benefit of the Series.
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The Manager has sole discretion in determining what distributions of Free Cash Flow, if any, are made to Members of the Series of Interests. Any Free Cash Flow generated by the Series of Interests from the utilization of the Underlying Asset shall be applied within the Series of Interests in the following order of priority:
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| · | repay any amounts outstanding under Operating Expenses Reimbursement Obligations plus accrued interest; |
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| · | thereafter to create such reserves as the Manager deems necessary, in its sole discretion, to meet future Operating Expenses; and; |
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| · | thereafter, 50% (net of corporate income taxes applicable to the Series of Interests) by way of distribution to the Interest Holders of the Series of Interests, which may include the Asset Sellers (as defined below) of the Underlying Asset or the Manager or any of its affiliates, and; |
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| · | 50% to the Series Manager in payment of the Management Fee. |
6.3 Timing of Free Cash Flow Distributions
The Manager may make semi-annual distributions of Free Cash Flow remaining to Interest Holders subject to it having the right, in its sole discretion, to withhold distributions including the Management Fee in order to meet anticipated costs and liabilities of the Series. The Manager may change the timing of potential distributions in its sole discretion.
6.4 Disposition of an Underlying Asset
Upon the occurrence of the disposition of the Underlying Asset, any after-tax proceeds distributed: (i) first, to any third party creditors, (ii) second, to any creditors that are the Manager or its affiliates (e.g., payment of any outstanding Operating Expenses Reimbursement Obligation or accrued Management Fee), and thereafter, (iii) to the Interest Holders of the relevant Series of Interests, allocated pro rata based on the number of Interests held by each Interest Holder (which may include the Manager, any of its affiliates and the Asset Seller and which distribution within a Series will be made consistent with any preferences which exist within such Series).
7. Compensation
7.1 Series Manager Fees
The Series Manager (and/or its members or their Affiliates) will earn certain Fees for management of the Series, as described below:
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| · | The Series Manager will earn a Sourcing Fee of five percent (5%) of the purchase price of the Asset. The “Sourcing Fee” is a fee paid to the Series Manager as compensation for performing due diligence and purchasing a Series Underlying Asset(s) on behalf of the Series. |
7.2 Reimbursement
The Series shall reimburse the Series Manager for all direct out-of-pocket expenses incurred by the Series Manager in managing the Series. Further, any Members or Affiliates of the Series Manager who incur out-of-pocket expenses on behalf of the Series will be reimbursed.
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8. Bookkeeping
The Series, for accounting and income tax purposes, shall operate on a Fiscal Year ending December 31 of each year, and shall make such income tax elections and use such methods of depreciation as shall be determined by the Series Manager. The books and records of the Company will be kept on a GAAP basis in accordance with sound accounting practices to reflect all income and expenses of the Series.
9. Transfers
Should any Member have a creditor with a judgment for an assignment of a Membership Interest, the creditor shall only obtain Economic Interest (no voting rights) that such Member has in the Series. The new assignee does not have any rights of the Member or have the ability to be involved in management of the Company or Series or the right to dissolve or partition the Company or Series. The new assignee will only be granted rights to the Member’s Distributions, if the Series Manager decides to distribute at all. The assignee must release the Member’s interests back to the Member upon payment of the judgment.
10. Dissolution
The Series Manager may dissolve the Series at any time once the Series Underlying Asset(s) has been sold. Upon dissolution the Series must pay its debts first before distributing cash, assets, and/or initial capital to the Members or the Membership Interests. The dissolution may only be ordered by the Series Manager or the Founder, not by an owner of Series Membership Interests or by any other member of the Company.
11. Miscellaneous Provisions
11.1 Agreement to Be Bound
Each of the undersigned agrees to be bound by the terms and provisions of this Series Agreement, and the terms of the Company Agreement to which this Series Agreement is attached as an Exhibit.
11.2 Headings
The headings in this Series Agreement are included for convenience and identification only and are in no way intend to describe, interpret, define or limit the scope, extent, or intent of this Series Agreement or any provision hereof.
11.3 Severability
The invalidity or unenforceability of any particular provision of this Series Agreement shall not affect the other provisions hereof, and this Series Agreement shall be construed in all respects as if such invalid or unenforceable provision was omitted.
| SERIES MTG-94BOX, LLC | Series Agreement |
| 7 |
|
|
11.4 Integration
This Series Agreement and the Company Agreement collectively constitute the entire agreement among the parties hereto pertaining to the subject matter hereof and shall supersede all prior agreements and understandings pertaining thereto.
11.5 Counterparts
This Series Agreement may be executed in any number of counterparts with the same effect as if all parties had signed the same document. All counterparts shall be construed together and shall constitute one instrument.
11.6 Governing Law
This Series Agreement and the rights of the parties hereunder shall be interpreted in accordance with the laws of the State of Delaware pertaining to a Delaware Series limited liability company, and all rights and remedies shall be governed by such laws, without regard to principles of conflict of laws.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
| SERIES MTG-94BOX, LLC | Series Agreement |
| 8 |
|
|
12. Signatures
IN WITNESS WHEREOF, the parties hereto have executed this Agreement of SERIES MTG-94BOX, LLC, as of the date and year first above written.
MASTER LIMITED LIABILITY COMPANY
| Dated: April 2, 2020 | By: SERIES MTG-94BOX, LLC |
|
| A Delaware Series Limited Liability Company |
By: Its Series Manager,
Mythic Collection, LLC
A Delaware Series Limited Liability Company
By: Its Manager,
Mythic Market, Inc.
A Delaware Corporation
/s/ Joe Mahavuthivanij
By: Its CEO,
Joe Mahavuthivanij
SERIES MANAGER
| Dated: April 2, 2020 | By: Mythic Collection, LLC |
|
| A Delaware Series Limited Liability Company |
By: Its Manager,
Mythic Market, Inc.
A Delaware Corporation
/s/ Joe Mahavuthivanij
By: Its CEO,
Joe Mahavuthivanij
| ALL SUBSCRIBERS INDICATE ACCEPTANCE OF THIS AGREEMENT BY COMPLETING, EXECUTING AND RETURNING THE SUBSCRIPTION AGREEMENT TO THE MANAGER AT THE ADDRESS PROVIDED HEREIN. |
| SERIES MTG-94BOX, LLC | Series Agreement |
|
|
Appendix A: SERIES MTG-94BOX Members
SERIES MTG-94BOX Members
(Members and Manager)
(FOR INTERNAL USE ONLY)
| Entity/Name | Capital Contribution | Percentage Interests |
|
| ||
| TOTAL |
| 100% |
*DUPLICATE THIS PAGE IF NECESSARY
| SERIES MTG-94BOX, LLC | Series Agreement |
| A-1 |
|
|
Appendix B: SERIES UNDERLYING ASSETS
Booster Boxes from the Antiquities, Revised, Legends, The Dark, and Fallen Empire sets.
| SERIES MTG-94BOX, LLC | Series Agreement |
| B-1 |
EXHIBIT 2.5
| SERIES AGREEMENT SERIES ART-GGMTG, LLC |
|
|
| A Delaware Series Limited Liability Company April 2, 2020 |
TABLE OF CONTENTS
| 1. | New Series |
| 1 |
|
| 1.1 | Purpose |
| 1 |
|
| 1.2 | Name of Series |
| 2 |
|
| 1.3 | Definitions |
| 2 |
|
| 1.4 | Term |
| 2 | |
|
| ||||
| 2. | Management |
| 2 |
|
| 2.1 | Management of Series Business |
| 2 |
|
| 2.2 | Series Manager’s Limitation of Liability |
| 2 |
|
| 2.3 | Powers of the Series Manager |
| 3 |
|
| 2.4 | Exculpation |
| 3 | |
|
| ||||
| 3. | Members |
| 3 |
|
| 3.1 | Investor Members |
| 3 |
|
| 3.2 | Manager Members |
| 4 | |
|
| ||||
| 4. | Offering Details |
| 4 |
|
| 4.1 | Working Capital and Reserves |
| 4 |
|
| 4.2 | Deferral of Reimbursements or Manager’s Fees |
| 4 | |
|
| ||||
| 5. | Capital Contributions |
| 5 |
|
| 5.1 | Initial Contributions |
| 5 |
|
| 5.2 | Additional Contributions |
| 5 | |
|
| ||||
| 6. | Profits, Losses and Distributions |
| 5 |
|
| 6.1 | Profits and Losses |
| 5 |
|
| 6.2 | Distributions |
| 5 | |
|
| ||||
| 7. | Compensation |
| 6 |
|
| 7.1 | Series Manager Fees |
| 6 |
|
| 7.2 | Reimbursement |
| 6 | |
|
| ||||
| 8. | Bookkeeping |
| 7 | |
|
| ||||
| 9. | Transfers |
| 7 | |
|
| ||||
| 10. | Dissolution |
| 7 | |
|
| ||||
| 11. | Miscellaneous Provisions |
| 7 |
|
| 11.1 | Agreement to Be Bound |
| 7 |
|
| 11.2 | Headings |
| 7 |
|
| 11.3 | Severability |
| 7 |
|
| 11.4 | Integration |
| 8 |
|
| 11.5 | Counterparts |
| 8 |
|
| 11.6 | Governing Law |
| 8 | |
|
| ||||
| 12. | Signatures |
|
| |
|
| ||||
| Appendix A: SERIES ART-GGMTG Members |
| A-1 | ||
| SERIES ART-GGART, LLC |
| Series Agreement |
| ii |
SERIES AGREEMENT
FOR
SERIES ART-GGMTG, LLC
A Delaware Series Limited Liability Company
THIS SERIES AGREEMENT, dated April 2, 2020 (“Series Agreement”), is entered into by and between the Mythic Collection, LLC (the “Company”), and the members of its associated and newly created Series (“SERIES ART-GGMTG”), and the Series Manager, Mythic Markets, Inc., a Delaware corporation (“Series Manager”), collectively the “parties” as further described below.
RECITALS
WHEREAS, the parties hereto have formed a Series limited liability company pursuant to the Delaware Limited Liability Company Act by filing the Certificate of Formation for the Company with the office of the Secretary of the State of Delaware and by entering into the Company Agreement of the Company accompanying this Series Agreement; and
WHEREAS, it is intended by the parties to create an additional Series with such Series having an address of 16 Lagoon Court, San Rafael, California 94903, which shall, acquire, own, and manage Series Underlying Asset(s) from that owned by the Company or associated with any other Series as may be formed by the Company; and
WHEREAS, it is intended by the parties hereto that the debts, liabilities and obligations incurred, contracted for or otherwise existing with respect to this Series and its Series Underlying Asset(s) be enforceable against the assets of this Series and its Series Underlying Asset(s) only, and not against the assets of the Company generally or any other Series thereof; and
NOW THEREFORE, in consideration of the mutual promises and obligations contained herein, the parties, intending to be legally bound, hereby agree as follows:
1. New Series
The Founding Members of the Company hereby create a new Series, which shall be called “SERIES ART-GGMTG, LLC” or “SERIES ART-GGMTG” for purposes of the Company Agreement and this Series Agreement.
1.1 Purpose
SERIES ART-GGMTG, LLC was formed to:
| (a) | To acquire, investment, manage, operate, liquidate, and dispose of Underlying Asset(s) by sale or lease to a third-party or to an Affiliate of the Company or its members; |
| SERIES ART-GGMTG, LLC | Series Agreement |
| 1 |
| (b) | Transact all business necessary, appropriate, advisable, convenient, or incidental to the foregoing provisions and objectives. |
|
| |
| (c) | The Underlying Asset(s) of the Series is/are list in Appendix B hereto. |
1.2 Name of Series
The name of the Series created by this Series Agreement shall be SERIES ART-GGMTG, LLC.
1.3 Definitions
The definitions of capitalized terms not otherwise defined herein are provided in the Company Agreement for Mythic Collections, LLC to which this Agreement is attached as an Exhibit.
1.4 Term
The Series shall commence upon the execution of this Series Agreement, and its approval by the Company Manager.
The Series Agreement will terminate on the earlier of: (i) one year after the date on which the relevant Underlying Asset has been liquidated and the obligations connected to the Underlying Asset (including, contingent obligations) have been terminated, (ii) the removal of Mythic Markets, Inc. as managing member of the Company (and thus all Series of Interests), (iii) upon notice by one party to the other party of a party’s material breach of the Series Agreement or (iv) such other date as agreed between the parties to the Series Agreement.
2. Management
2.1 Management of Series Business
The management of the SERIES ART-GGMTG is invested in a Manager. The Manager of SERIES ART-GGMTG is Mythic Collections, LLC, a Delaware limited liability company (hereinafter “Series Manager”), whose manager is Mythic Markets, Inc., a Delaware corporation, whose CEO is Joe Mahavuthivanij.
2.2 Series Manager’s Limitation of Liability
The liability of the Series Manager shall be limited as provided pursuant to applicable law. The Series Manager is in control of the management, direction, and operation of the Series’ affairs and shall have powers to bind the Series with any legally binding agreement, including setting up and operating separate bank accounts on behalf of the Series.
| SERIES ART-GGMTG, LLC | Series Agreement |
| 2 |
2.3 Powers of the Series Manager
The services provided by the Series Manager will include:
|
| · | Together with members of the Advisory Board, creating the asset maintenance policies for the collection of assets; |
|
| · | Investigating, selecting, and, on behalf of the applicable series, engaging and conducting business with such persons as the Series Manager deems necessary to ensure the proper performance of its obligations under the Company and Series Agreement, including but not limited to consultants, insurers, insurance agents, maintenance providers, storage providers and transportation providers and any and all persons acting in any other capacity deemed by the Series Manager necessary or desirable for the performance of any of the services under the Company and Series Agreement; and |
|
| · | Developing standards for the transportation and care of the Underlying Assets. |
2.4 Exculpation
The Series Manager shall not be subject to any liability to the Members for any act or omission, the effect of which may cause or result in loss or damage to the Series or the Members if done in good faith to promote the best interests of the Series.
3. Members
Each of the signatories to this Series Agreement shall be referenced herein as a “Member” or “Series Member” and collectively, as the “Members” or “Series Members” as defined herein and in the Definitions section of the Company Agreement. The Members shall immediately, and from time to time hereafter, execute all documents and do all filing, recording, and other acts as may be required to comply with the operation of the Company or Series under the Act. The Series Manager will maintain an updated list of all Members as shown on Appendix A to this Series Agreement.
3.1 Members (Investors)
Investors will purchase Interests in the Series exchange for their Capital Contributions, and in so doing, will become Members. Members will be entitled to priority returns on their investment and a return of their Capital Contributions before the Series Manager. Members will own fifty percent (50%) of the Interests in the Company and will have a limited right to vote on certain matters described in the Company Agreement associated with this Series Agreement. The Members, other than the Manager, will contribute ninety percent (90%) to ninety-eight percent (98%) of the Total Dollar Amount or total Capital Contributions. This is the total contribution of the class and will depend on the contribution by the Manager.
| SERIES ART-GGMTG, LLC | Series Agreement |
| 3 |
3.2 Manager Members (Manager and related parties)
Interests will be distributed to the Series Manager and/or the Key Principals (“Manager Interests”) and/or their Affiliates, or others to whom the Series Manager grants or sells Interests. The Series Manager, Key Principals, or those who provide services in exchange for Interests as determined by the Series Manager, will own fifty percent (50%) of SERIES ART-GGMTG in exchange for their contribution of services to SERIES ART-GGMTG. The Manager will contribute at least two percent (2%) of the Total Dollar Amount or total Capital Contributions. This will establish a Capital Account Balance for the Manager.
4. Offering Details
An Offering for the sale of Interests in the Series shall commence upon qualification of the Form 1-A specifying the Series as filed with the Securities Exchange Commission.
Some of the proceeds will be used to reimburse the Manager, its Affiliates, or third-parties for expenses related to acquisition, improvements, or management of an Asset, including but not limited to such things as due diligence, maintenance, storage, escrow or loan fees associated with acquisition of an Asset, earnest money deposits, organizational expenses, loan guarantee fees, legal fees and other miscellaneous expenses.
The Manager will be reimbursed for legal and organizational expenses associated with setting up the Series.
4.1 Working Capital and Reserves
Proceeds of the Offering that are not used to acquire the Asset will be held in the Series bank account for use as Working Capital and Reserves during operation of the Series. If only a small amount of capital is raised, then additional Working Capital and Reserves may need to be accumulated from cash flow during operation of the Asset and any Distributions to the Members may be deferred until such time as sufficient Reserves have been accumulated, at the Manager’s sole discretion.
4.2 Deferral of Reimbursements or Manager’s Fees
If less than the cost of the Underlying Asset(s)of capital is raised, the Manager may defer collection of Manager’s Fees shown in the Total Dollar Amount column and reimbursement for its expenses without forfeiting any right to collect. The Manager may also elect to defer the collection of Fees due the Manager. In either event the Series will pay the Manager ten percent (10%) annual interest on the deferral of the reimbursements or Fees.
| SERIES ART-GGMTG, LLC | Series Agreement |
| 4 |
4.3 Operating Expenses
The Manager has agreed to pay and not be reimbursed for Operating Expenses incurred prior to the Closing. Operating Expenses incurred post-Closing shall be the responsibility of the Series. However, if the Operating Expenses exceed the amount of revenues generated from the Underlying Asset, the Manager may (a) pay such Operating Expenses and not seek reimbursement, (b) loan the amount of the Operating Expenses to the Series, on which the Manager may impose a reasonable rate of interest, which shall not be lower than the Applicable Federal Rate (as defined in the Internal Revenue Code), and be entitled to reimbursement of such amount from future revenues generated by the Series (“Operating Expenses Reimbursement Obligation(s)”), and/or (c) cause additional Interests to be issued in order to cover such additional amounts.
We do not anticipate that the Series will generate any revenues in 2020 and expect the Series to either incur Operating Expenses Reimbursement Obligations or that the Manager pays such Operating Expenses incurred and will not seek reimbursement. See discussion of “Description of the Business – Operating Expenses” for additional information.
5. Capital Contributions
5.1 Initial Contributions
The Members initially shall contribute capital to the SERIES ART-GGMTG as described in Appendix A to this Series Agreement.
5.2 Additional Contributions
No Member shall be obligated to make any additional contribution to the Series’ capital, except in the case of a capital call as described in the Company Agreement.
6. Profits, Losses and Distributions
6.1 Profits and Losses
For financial accounting and tax purposes the Series’ net profits or net losses shall be determined on an annual basis and shall be allocated to the Members in proportion to each Member’s relative capital interest in the Series as set forth in Appendix A hereto as amended from time to time in accordance with Treasury Regulation 1.704-1.
6.2 Free Cash Flow Distributions
Free Cash Flow is the net income (as determined under U.S. generally accepted accounting principles (“GAAP”)) generated by the Series plus any change in net working capital and depreciation and amortization (and any other non-cash Operating Expenses) and less any capital expenditures related to the Underlying Asset (“Free Cash Flow”); provided that Free Cash Flow does not include proceeds from a sale of an Underlying Asset. The Manager may maintain Free Cash Flow funds in a deposit account or an investment account for the benefit of the Series.
| SERIES ART-GGMTG, LLC | Series Agreement |
| 5 |
The Manager has sole discretion in determining what distributions of Free Cash Flow, if any, are made to Members of the Series of Interests. Any Free Cash Flow generated by the Series of Interests from the utilization of the Underlying Asset shall be applied within the Series of Interests in the following order of priority:
|
| · | repay any amounts outstanding under Operating Expenses Reimbursement Obligations plus accrued interest; |
|
| · | thereafter to create such reserves as the Manager deems necessary, in its sole discretion, to meet future Operating Expenses; and; |
|
| · | thereafter, 50% (net of corporate income taxes applicable to the Series of Interests) by way of distribution to the Interest Holders of the Series of Interests, which may include the Asset Sellers (as defined below) of the Underlying Asset or the Manager or any of its affiliates, and; |
|
| · | 50% to the Series Manager in payment of the Management Fee. |
6.3 Timing of Free Cash Flow Distributions
The Manager may make semi-annual distributions of Free Cash Flow remaining to Interest Holders subject to it having the right, in its sole discretion, to withhold distributions including the Management Fee in order to meet anticipated costs and liabilities of the Series. The Manager may change the timing of potential distributions in its sole discretion.
6.4 Disposition of an Underlying Asset
Upon the occurrence of the disposition of the Underlying Asset, any after-tax proceeds distributed: (i) first, to any third party creditors, (ii) second, to any creditors that are the Manager or its affiliates (e.g., payment of any outstanding Operating Expenses Reimbursement Obligation or accrued Management Fee), and thereafter, (iii) to the Interest Holders of the relevant Series of Interests, allocated pro rata based on the number of Interests held by each Interest Holder (which may include the Manager, any of its affiliates and the Asset Seller and which distribution within a Series will be made consistent with any preferences which exist within such Series).
7. Compensation
7.1 Series Manager Fees
The Series Manager (and/or its members or their Affiliates) will earn certain Fees for management of the Series, as described below:
|
| · | The Series Manager will earn a Sourcing Fee of five percent (5%) of the purchase price of the Asset. The “Sourcing Fee” is a fee paid to the Series Manager as compensation for performing due diligence and purchasing a Series Underlying Asset(s) on behalf of the Series. |
7.2 Reimbursement
The Series shall reimburse the Series Manager for all direct out-of-pocket expenses incurred by the Series Manager in managing the Series. Further, any Members or Affiliates of the Series Manager who incur out-of-pocket expenses on behalf of the Series will be reimbursed.
| SERIES ART-GGMTG, LLC | Series Agreement |
| 6 |
8. Bookkeeping
The Series, for accounting and income tax purposes, shall operate on a Fiscal Year ending December 31 of each year, and shall make such income tax elections and use such methods of depreciation as shall be determined by the Series Manager. The books and records of the Company will be kept on a GAAP basis in accordance with sound accounting practices to reflect all income and expenses of the Series.
9. Transfers
Should any Member have a creditor with a judgment for an assignment of a Membership Interest, the creditor shall only obtain Economic Interest (no voting rights) that such Member has in the Series. The new assignee does not have any rights of the Member or have the ability to be involved in management of the Company or Series or the right to dissolve or partition the Company or Series. The new assignee will only be granted rights to the Member’s Distributions, if the Series Manager decides to distribute at all. The assignee must release the Member’s interests back to the Member upon payment of the judgment.
10. Dissolution
The Series Manager may dissolve the Series at any time once the Series Underlying Asset(s) has been sold. Upon dissolution the Series must pay its debts first before distributing cash, assets, and/or initial capital to the Members or the Membership Interests. The dissolution may only be ordered by the Series Manager or the Founder, not by an owner of Series Membership Interests or by any other member of the Company.
11. Miscellaneous Provisions
11.1 Agreement to Be Bound
Each of the undersigned agrees to be bound by the terms and provisions of this Series Agreement, and the terms of the Company Agreement to which this Series Agreement is attached as an Exhibit.
11.2 Headings
The headings in this Series Agreement are included for convenience and identification only and are in no way intend to describe, interpret, define or limit the scope, extent, or intent of this Series Agreement or any provision hereof.
11.3 Severability
The invalidity or unenforceability of any particular provision of this Series Agreement shall not affect the other provisions hereof, and this Series Agreement shall be construed in all respects as if such invalid or unenforceable provision was omitted.
| SERIES ART-GGMTG, LLC | Series Agreement |
| 7 |
11.4 Integration
This Series Agreement and the Company Agreement collectively constitute the entire agreement among the parties hereto pertaining to the subject matter hereof and shall supersede all prior agreements and understandings pertaining thereto.
11.5 Counterparts
This Series Agreement may be executed in any number of counterparts with the same effect as if all parties had signed the same document. All counterparts shall be construed together and shall constitute one instrument.
11.6 Governing Law
This Series Agreement and the rights of the parties hereunder shall be interpreted in accordance with the laws of the State of Delaware pertaining to a Delaware Series limited liability company, and all rights and remedies shall be governed by such laws, without regard to principles of conflict of laws.
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| SERIES ART-GGMTG, LLC | Series Agreement |
| 8 |
12. Signatures
IN WITNESS WHEREOF, the parties hereto have executed this Agreement of SERIES ART-GGMTG, LLC, as of the date and year first above written.
MASTER LIMITED LIABILITY COMPANY
Dated: April 2, 2020
By: SERIES ART-GGMTG, LLC
A Delaware Series Limited Liability Company
By: Its Series Manager,
Mythic Collection, LLC
A Delaware Series Limited Liability Company
By: Its Manager,
Mythic Market, Inc.
A Delaware Corporation
/s/ Joe Mahavuthivanij
By: Its CEO,
Joe Mahavuthivanij
SERIES MANAGER
Dated: April 2, 2020
By: Mythic Collection, LLC
A Delaware Series Limited Liability Company
By: Its Manager,
Mythic Market, Inc.
A Delaware Corporation
/s/ Joe Mahavuthivanij
By: Its CEO,
Joe Mahavuthivanij
| ALL SUBSCRIBERS INDICATE ACCEPTANCE OF THIS AGREEMENT BY COMPLETING, EXECUTING AND RETURNING THE SUBSCRIPTION AGREEMENT TO THE MANAGER AT THE ADDRESS PROVIDED HEREIN. |
| SERIES ART-GGMTG, LLC | Series Agreement |
Appendix A: SERIES ART-GGMTG Members
SERIES ART-GGMTG Members
(Members and Manager)
(FOR INTERNAL USE ONLY)
| Entity/Name | Capital Contribution | Percentage Interests |
|
| ||
| TOTAL |
| 100% |
*DUPLICATE THIS PAGE IF NECESSARY
| SERIES ART-GGMTG, LLC | Series Agreement |
| A-1 |
Appendix B: SERIES UNDERLYING ASSETS
The art piece titled "Giant Growth" by Sandra Everingham, whose art was used on an original Magic: The Gathering Alpha card of the same name.
| SERIES ART-GGMTG, LLC | Series Agreement |
| B-1 |
EXHIBIT 2.6
| SERIES AGREEMENT |
| SERIES COM-AF157, LLC |
|
|
| A Delaware Series Limited Liability Company April 2, 2020 |
TABLE OF CONTENTS
| 1. | New Series |
| 1 |
|
| 1.1 | Purpose |
| 1 |
|
| 1.2 | Name of Series |
| 2 |
|
| 1.3 | Definitions |
| 2 |
|
| 1.4 | Term |
| 2 |
|
|
|
|
|
|
|
| 2. | Management |
| 2 |
|
| 2.1 | Management of Series Business |
| 2 |
|
| 2.2 | Series Manager’s Limitation of Liability |
| 2 |
|
| 2.3 | Powers of the Series Manager |
| 3 |
|
| 2.4 | Exculpation |
| 3 |
|
|
|
|
|
|
|
| 3. | Members |
| 3 |
|
| 3.1 | Investor Members |
| 3 |
|
| 3.2 | Manager Members |
| 3 |
|
|
|
|
|
|
|
| 4. | Offering Details |
| 4 |
|
| 4.1 | Working Capital and Reserves |
| 4 |
|
| 4.2 | Deferral of Reimbursements or Manager’s Fees |
| 4 |
|
|
|
|
|
|
|
| 5. | Capital Contributions |
| 5 |
|
| 5.1 | Initial Contributions |
| 5 |
|
| 5.2 | Additional Contributions |
| 5 |
|
|
|
|
|
|
|
| 6. | Profits, Losses and Distributions |
| 5 |
|
| 6.1 | Profits and Losses |
| 5 |
|
| 6.2 | Distributions |
| 5 |
|
|
|
|
|
|
|
| 7. | Compensation |
| 6 |
|
| 7.1 | Series Manager Fees |
| 6 |
|
| 7.2 | Reimbursement |
| 6 |
|
|
|
|
|
|
|
| 8. | Bookkeeping |
| 6 |
|
|
|
|
|
|
|
| 9. | Transfers |
| 7 |
|
|
|
|
|
|
|
| 10. | Dissolution |
| 7 |
|
|
|
|
|
|
|
| 11. | Miscellaneous Provisions |
| 7 |
|
| 11.1 | Agreement to Be Bound |
| 7 |
|
| 11.2 | Headings |
| 7 |
|
| 11.3 | Severability |
| 7 |
|
| 11.4 | Integration |
| 7 |
|
| 11.5 | Counterparts |
| 7 |
|
| 11.6 | Governing Law |
| 7 |
|
|
|
|
|
|
|
| 12. | Signatures |
| 8 |
|
|
|
|
|
| |
| Appendix A: SERIES COM-AF157 Members |
| 9 |
| |
| SERIES COM-AF157, LLC |
| Series Agreement |
SERIES AGREEMENT
FOR
SERIES COM-AF157, LLC
A Delaware Series Limited Liability Company
THIS SERIES AGREEMENT, dated April 2, 2020 (“Series Agreement”), is entered into by and between the Mythic Collection, LLC (the “Company”), and the members of its associated and newly created Series (“SERIES COM-AF157”), and the Series Manager, Mythic Markets, Inc., a Delaware corporation (“Series Manager”), collectively the “parties” as further described below.
RECITALS
WHEREAS, the parties hereto have formed a Series limited liability company pursuant to the Delaware Limited Liability Company Act by filing the Certificate of Formation for the Company with the office of the Secretary of the State of Delaware and by entering into the Company Agreement of the Company accompanying this Series Agreement; and
WHEREAS, it is intended by the parties to create an additional Series with such Series having an address of 16 Lagoon Court, San Rafael, California 94903, which shall, acquire, own, and manage Series Underlying Asset(s) from that owned by the Company or associated with any other Series as may be formed by the Company; and
WHEREAS, it is intended by the parties hereto that the debts, liabilities and obligations incurred, contracted for or otherwise existing with respect to this Series and its Series Underlying Asset(s) be enforceable against the assets of this Series and its Series Underlying Asset(s) only, and not against the assets of the Company generally or any other Series thereof; and
NOW THEREFORE, in consideration of the mutual promises and obligations contained herein, the parties, intending to be legally bound, hereby agree as follows:
1. New Series
The Founding Members of the Company hereby create a new Series, which shall be called “SERIES COM-AF157, LLC” or “SERIES COM-AF157” for purposes of the Company Agreement and this Series Agreement.
1.1 Purpose
SERIES COM-AF157, LLC was formed to:
| (a) | To acquire, investment, manage, operate, liquidate, and dispose of Underlying Asset(s) by sale or lease to a third-party or to an Affiliate of the Company or its members; |
SERIES COM-AF157, LLC
Series Agreement
| 1 |
| (b) | Transact all business necessary, appropriate, advisable, convenient, or incidental to the foregoing provisions and objectives. |
|
|
|
| (c) | The Underlying Asset(s) of the Series is/are list in Appendix B hereto. |
1.2 Name of Series
The name of the Series created by this Series Agreement shall be SERIES COM-AF157, LLC.
1.3 Definitions
The definitions of capitalized terms not otherwise defined herein are provided in the Company Agreement for Mythic Collections, LLC to which this Agreement is attached as an Exhibit.
1.4 Term
The Series shall commence upon the execution of this Series Agreement, and its approval by the Company Manager.
The Series Agreement will terminate on the earlier of: (i) one year after the date on which the relevant Underlying Asset has been liquidated and the obligations connected to the Underlying Asset (including, contingent obligations) have been terminated, (ii) the removal of Mythic Markets, Inc. as managing member of the Company (and thus all Series of Interests), (iii) upon notice by one party to the other party of a party’s material breach of the Series Agreement or (iv) such other date as agreed between the parties to the Series Agreement.
2. Management
2.1 Management of Series Business
The management of the SERIES COM-AF157 is invested in a Manager. The Manager of SERIES COM-AF157 is Mythic Collections, LLC, a Delaware limited liability company (hereinafter “Series Manager”), whose manager is Mythic Markets, Inc., a Delaware corporation, whose CEO is Joe Mahavuthivanij.
2.2 Series Manager’s Limitation of Liability
The liability of the Series Manager shall be limited as provided pursuant to applicable law. The Series Manager is in control of the management, direction, and operation of the Series’ affairs and shall have powers to bind the Series with any legally binding agreement, including setting up and operating separate bank accounts on behalf of the Series.
SERIES COM-AF157, LLC
Series Agreement
| 2 |
2.3 Powers of the Series Manager
The services provided by the Series Manager will include:
| · | Together with members of the Advisory Board, creating the asset maintenance policies for the collection of assets; |
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| · | Investigating, selecting, and, on behalf of the applicable series, engaging and conducting business with such persons as the Series Manager deems necessary to ensure the proper performance of its obligations under the Company and Series Agreement, including but not limited to consultants, insurers, insurance agents, maintenance providers, storage providers and transportation providers and any and all persons acting in any other capacity deemed by the Series Manager necessary or desirable for the performance of any of the services under the Company and Series Agreement; and |
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| · | Developing standards for the transportation and care of the Underlying Assets. |
2.4 Exculpation
The Series Manager shall not be subject to any liability to the Members for any act or omission, the effect of which may cause or result in loss or damage to the Series or the Members if done in good faith to promote the best interests of the Series.
3. Members
Each of the signatories to this Series Agreement shall be referenced herein as a “Member” or “Series Member” and collectively, as the “Members” or “Series Members” as defined herein and in the Definitions section of the Company Agreement. The Members shall immediately, and from time to time hereafter, execute all documents and do all filing, recording, and other acts as may be required to comply with the operation of the Company or Series under the Act. The Series Manager will maintain an updated list of all Members as shown on Appendix A to this Series Agreement.
3.1 Members (Investors)
Investors will purchase Interests in the Series exchange for their Capital Contributions, and in so doing, will become Members. Members will be entitled to priority returns on their investment and a return of their Capital Contributions before the Series Manager. Members will own fifty percent (50%) of the Interests in the Company and will have a limited right to vote on certain matters described in the Company Agreement associated with this Series Agreement. The Members, other than the Manager, will contribute ninety percent (90%) to ninety-eight percent (98%) of the Total Dollar Amount or total Capital Contributions. This is the total contribution of the class and will depend on the contribution by the Manager.
3.2 Manager Members (Manager and related parties)
Interests will be distributed to the Series Manager and/or the Key Principals (“Manager Interests”) and/or their Affiliates, or others to whom the Series Manager grants or sells Interests. The Series Manager, Key Principals, or those who provide services in exchange for Interests as determined by the Series Manager, will own fifty percent (50%) of SERIES COM-AF157 in exchange for their contribution of services to SERIES COM-AF157. The Manager will contribute at least two percent (2%) of the Total Dollar Amount or total Capital Contributions. This will establish a Capital Account Balance for the Manager.
SERIES COM-AF157, LLC
Series Agreement
| 3 |
4. Offering Details
An Offering for the sale of Interests in the Series shall commence upon qualification of the Form 1-A specifying the Series as filed with the Securities Exchange Commission.
Some of the proceeds will be used to reimburse the Manager, its Affiliates, or third-parties for expenses related to acquisition, improvements, or management of an Asset, including but not limited to such things as due diligence, maintenance, storage, escrow or loan fees associated with acquisition of an Asset, earnest money deposits, organizational expenses, loan guarantee fees, legal fees and other miscellaneous expenses.
The Manager will be reimbursed for legal and organizational expenses associated with setting up the Series.
4.1 Working Capital and Reserves
Proceeds of the Offering that are not used to acquire the Asset will be held in the Series bank account for use as Working Capital and Reserves during operation of the Series. If only a small amount of capital is raised, then additional Working Capital and Reserves may need to be accumulated from cash flow during operation of the Asset and any Distributions to the Members may be deferred until such time as sufficient Reserves have been accumulated, at the Manager’s sole discretion.
4.2 Deferral of Reimbursements or Manager’s Fees
If less than the cost of the Underlying Asset(s)of capital is raised, the Manager may defer collection of Manager’s Fees shown in the Total Dollar Amount column and reimbursement for its expenses without forfeiting any right to collect. The Manager may also elect to defer the collection of Fees due the Manager. In either event the Series will pay the Manager ten percent (10%) annual interest on the deferral of the reimbursements or Fees.
4.3 Operating Expenses
The Manager has agreed to pay and not be reimbursed for Operating Expenses incurred prior to the Closing. Operating Expenses incurred post-Closing shall be the responsibility of the Series. However, if the Operating Expenses exceed the amount of revenues generated from the Underlying Asset, the Manager may (a) pay such Operating Expenses and not seek reimbursement, (b) loan the amount of the Operating Expenses to the Series, on which the Manager may impose a reasonable rate of interest, which shall not be lower than the Applicable Federal Rate (as defined in the Internal Revenue Code), and be entitled to reimbursement of such amount from future revenues generated by the Series (“Operating Expenses Reimbursement Obligation(s)”), and/or (c) cause additional Interests to be issued in order to cover such additional amounts.
SERIES COM-AF157, LLC
Series Agreement
| 4 |
We do not anticipate that the Series will generate any revenues in 2020 and expect the Series to either incur Operating Expenses Reimbursement Obligations or that the Manager pays such Operating Expenses incurred and will not seek reimbursement. See discussion of “Description of the Business – Operating Expenses” for additional information.
5. Capital Contributions
5.1 Initial Contributions
The Members initially shall contribute capital to the SERIES COM-AF157 as described in Appendix A to this Series Agreement.
5.2 Additional Contributions
No Member shall be obligated to make any additional contribution to the Series’ capital, except in the case of a capital call as described in the Company Agreement.
6. Profits, Losses and Distributions
6.1 Profits and Losses
For financial accounting and tax purposes the Series’ net profits or net losses shall be determined on an annual basis and shall be allocated to the Members in proportion to each Member’s relative capital interest in the Series as set forth in Appendix A hereto as amended from time to time in accordance with Treasury Regulation 1.704-1.
6.2 Free Cash Flow Distributions
Free Cash Flow is the net income (as determined under U.S. generally accepted accounting principles (“GAAP”)) generated by the Series plus any change in net working capital and depreciation and amortization (and any other non-cash Operating Expenses) and less any capital expenditures related to the Underlying Asset (“Free Cash Flow”); provided that Free Cash Flow does not include proceeds from a sale of an Underlying Asset. The Manager may maintain Free Cash Flow funds in a deposit account or an investment account for the benefit of the Series.
SERIES COM-AF157, LLC
Series Agreement
| 5 |
The Manager has sole discretion in determining what distributions of Free Cash Flow, if any, are made to Members of the Series of Interests. Any Free Cash Flow generated by the Series of Interests from the utilization of the Underlying Asset shall be applied within the Series of Interests in the following order of priority:
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| · | repay any amounts outstanding under Operating Expenses Reimbursement Obligations plus accrued interest; |
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| · | thereafter to create such reserves as the Manager deems necessary, in its sole discretion, to meet future Operating Expenses; and; |
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| · | thereafter, 50% (net of corporate income taxes applicable to the Series of Interests) by way of distribution to the Interest Holders of the Series of Interests, which may include the Asset Sellers (as defined below) of the Underlying Asset or the Manager or any of its affiliates, and; |
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| · | 50% to the Series Manager in payment of the Management Fee. |
6.3 Timing of Free Cash Flow Distributions
The Manager may make semi-annual distributions of Free Cash Flow remaining to Interest Holders subject to it having the right, in its sole discretion, to withhold distributions including the Management Fee in order to meet anticipated costs and liabilities of the Series. The Manager may change the timing of potential distributions in its sole discretion.
6.4 Disposition of an Underlying Asset
Upon the occurrence of the disposition of the Underlying Asset, any after-tax proceeds distributed: (i) first, to any third party creditors, (ii) second, to any creditors that are the Manager or its affiliates (e.g., payment of any outstanding Operating Expenses Reimbursement Obligation or accrued Management Fee), and thereafter, (iii) to the Interest Holders of the relevant Series of Interests, allocated pro rata based on the number of Interests held by each Interest Holder (which may include the Manager, any of its affiliates and the Asset Seller and which distribution within a Series will be made consistent with any preferences which exist within such Series).
7. Compensation
7.1 Series Manager Fees
The Series Manager (and/or its members or their Affiliates) will earn certain Fees for management of the Series, as described below:
| · | The Series Manager will earn a Sourcing Fee of five percent (5%) of the purchase price of the Asset. The “Sourcing Fee” is a fee paid to the Series Manager as compensation for performing due diligence and purchasing a Series Underlying Asset(s) on behalf of the Series. |
7.2 Reimbursement
The Series shall reimburse the Series Manager for all direct out-of-pocket expenses incurred by the Series Manager in managing the Series. Further, any Members or Affiliates of the Series Manager who incur out-of-pocket expenses on behalf of the Series will be reimbursed.
8. Bookkeeping
The Series, for accounting and income tax purposes, shall operate on a Fiscal Year ending December 31 of each year, and shall make such income tax elections and use such methods of depreciation as shall be determined by the Series Manager. The books and records of the Company will be kept on a GAAP basis in accordance with sound accounting practices to reflect all income and expenses of the Series.
SERIES COM-AF157, LLC
Series Agreement
| 6 |
9. Transfers
Should any Member have a creditor with a judgment for an assignment of a Membership Interest, the creditor shall only obtain Economic Interest (no voting rights) that such Member has in the Series. The new assignee does not have any rights of the Member or have the ability to be involved in management of the Company or Series or the right to dissolve or partition the Company or Series. The new assignee will only be granted rights to the Member’s Distributions, if the Series Manager decides to distribute at all. The assignee must release the Member’s interests back to the Member upon payment of the judgment.
10. Dissolution
The Series Manager may dissolve the Series at any time once the Series Underlying Asset(s) has been sold. Upon dissolution the Series must pay its debts first before distributing cash, assets, and/or initial capital to the Members or the Membership Interests. The dissolution may only be ordered by the Series Manager or the Founder, not by an owner of Series Membership Interests or by any other member of the Company.
11. Miscellaneous Provisions
11.1 Agreement to Be Bound
Each of the undersigned agrees to be bound by the terms and provisions of this Series Agreement, and the terms of the Company Agreement to which this Series Agreement is attached as an Exhibit.
11.2 Headings
The headings in this Series Agreement are included for convenience and identification only and are in no way intend to describe, interpret, define or limit the scope, extent, or intent of this Series Agreement or any provision hereof.
11.3 Severability
The invalidity or unenforceability of any particular provision of this Series Agreement shall not affect the other provisions hereof, and this Series Agreement shall be construed in all respects as if such invalid or unenforceable provision was omitted.
11.4 Integration
This Series Agreement and the Company Agreement collectively constitute the entire agreement among the parties hereto pertaining to the subject matter hereof and shall supersede all prior agreements and understandings pertaining thereto.
11.5 Counterparts
This Series Agreement may be executed in any number of counterparts with the same effect as if all parties had signed the same document. All counterparts shall be construed together and shall constitute one instrument.
11.6 Governing Law
This Series Agreement and the rights of the parties hereunder shall be interpreted in accordance with the laws of the State of Delaware pertaining to a Delaware Series limited liability company, and all rights and remedies shall be governed by such laws, without regard to principles of conflict of laws.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SERIES COM-AF157, LLC
Series Agreement
| 7 |
12. Signatures
IN WITNESS WHEREOF, the parties hereto have executed this Agreement of SERIES COM-AF157, LLC, as of the date and year first above written.
MASTER LIMITED LIABILITY COMPANY
| Dated: April 2, 2020 | By: SERIES COM-AF157, LLC |
A Delaware Series Limited Liability Company
By: Its Series Manager,
Mythic Collection, LLC
A Delaware Series Limited Liability Company
By: Its Manager,
Mythic Market, Inc.
A Delaware Corporation
/s/ Joe Mahavuthivanij
By: Its CEO,
Joe Mahavuthivanij
SERIES MANAGER
| Dated: April 2, 2020 | By: Mythic Collection, LLC |
A Delaware Series Limited Liability Company
By: Its Manager,
Mythic Market, Inc.
A Delaware Corporation
/s/ Joe Mahavuthivanij
By: Its CEO,
Joe Mahavuthivanij
| ALL SUBSCRIBERS INDICATE ACCEPTANCE OF THIS AGREEMENT BY COMPLETING, EXECUTING AND RETURNING THE SUBSCRIPTION AGREEMENT TO THE MANAGER AT THE ADDRESS PROVIDED HEREIN. |
SERIES COM-AF157, LLC
Series Agreement
| 8 |
Appendix A: SERIES COM-AF157 Members
SERIES COM-AF157 Members (Members and Manager)
(FOR INTERNAL USE ONLY)
| Entity/Name | Capital Contribution | Percentage Interests |
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| TOTAL |
| 100% |
*DUPLICATE THIS PAGE IF NECESSARY
SERIES COM-AF157, LLC
Series Agreement
| 9 |
Appendix B: SERIES UNDERLYING ASSETS
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| 1962 Amazing Fantasy #15 CGC FN/VF 7.0 comic book. The Underlying Asset is an original copy of the Amazing Fantasy #15 comic book with a CGC grade of FN/VF 7.0. |
SERIES COM-AF157, LLC
Series Agreement
| 10 |
EXHIBIT 2.7
| SERIES AGREEMENT SERIES ART-BHERO, LLC |
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| A Delaware Series Limited Liability Company June 29, 2020 |
TABLE OF CONTENTS
| 1. | New Series |
| 1 |
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| 1.1 | Purpose |
| 1 |
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| 1.2 | Name of Series |
| 2 |
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| 1.3 | Definitions |
| 2 |
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| 1.4 | Term |
| 2 | |
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| 2. | Management |
| 2 |
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| 2.1 | Management of Series Business |
| 2 |
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| 2.2 | Series Manager’s Limitation of Liability |
| 2 |
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| 2.3 | Powers of the Series Manager |
| 3 |
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| 2.4 | Exculpation |
| 3 | |
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| 3. | Members |
| 3 |
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| 3.1 | Investor Members |
| 3 |
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| 3.2 | Manager Members |
| 4 | |
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| 4. | Offering Details |
| 4 |
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| 4.1 | Working Capital and Reserves |
| 4 |
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| 4.2 | Deferral of Reimbursements or Manager’s Fees |
| 4 | |
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| 5. | Capital Contributions |
| 5 |
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| 5.1 | Initial Contributions |
| 5 |
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| 5.2 | Additional Contributions |
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| 6. | Profits, Losses and Distributions |
| 5 |
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| 6.1 | Profits and Losses |
| 5 |
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| 6.2 | Distributions |
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| 7. | Compensation |
| 6 |
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| 7.1 | Series Manager Fees |
| 6 |
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| 7.2 | Reimbursement |
| 6 | |
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| 8. | Bookkeeping |
| 7 | |
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| 9. | Transfers |
| 7 | |
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| 10. | Dissolution |
| 7 | |
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| 11. | Miscellaneous Provisions |
| 7 |
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| 11.1 | Agreement to Be Bound |
| 7 |
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| 11.2 | Headings |
| 7 |
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| 11.3 | Severability |
| 7 |
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| 11.4 | Integration |
| 8 |
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| 11.5 | Counterparts |
| 8 |
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| 11.6 | Governing Law |
| 8 | |
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| 12. | Signatures |
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| Appendix A: SERIES ART-BHERO Members |
| A-1 | ||
| SERIES ART-BHERO, LLC | Series Agreement |
| ii |
SERIES AGREEMENT
FOR
SERIES ART-BHERO, LLC
A Delaware Series Limited Liability Company
THIS SERIES AGREEMENT, dated June 29, 2020 (“Series Agreement”), is entered into by and between the Mythic Collection, LLC (the “Company”), and the members of its associated and newly created Series (“SERIES ART-BHERO”), and the Series Manager, Mythic Markets, Inc., a Delaware corporation (“Series Manager”), collectively the “parties” as further described below.
RECITALS
WHEREAS, the parties hereto have formed a Series limited liability company pursuant to the Delaware Limited Liability Company Act by filing the Certificate of Formation for the Company with the office of the Secretary of the State of Delaware and by entering into the Company Agreement of the Company accompanying this Series Agreement; and
WHEREAS, it is intended by the parties to create an additional Series with such Series having an address of 16 Lagoon Court, San Rafael, California 94903, which shall, acquire, own, and manage Series Underlying Asset(s) from that owned by the Company or associated with any other Series as may be formed by the Company; and
WHEREAS, it is intended by the parties hereto that the debts, liabilities and obligations incurred, contracted for or otherwise existing with respect to this Series and its Series Underlying Asset(s) be enforceable against the assets of this Series and its Series Underlying Asset(s) only, and not against the assets of the Company generally or any other Series thereof; and
NOW THEREFORE, in consideration of the mutual promises and obligations contained herein, the parties, intending to be legally bound, hereby agree as follows:
1. New Series
The Founding Members of the Company hereby create a new Series, which shall be called “SERIES ART-BHERO, LLC” or “SERIES ART-BHERO” for purposes of the Company Agreement and this Series Agreement.
1.1 Purpose
SERIES ART-BHERO, LLC was formed to:
| (a) | To acquire, investment, manage, operate, liquidate, and dispose of Underlying Asset(s) by sale or lease to a third-party or to an Affiliate of the Company or its members; |
| SERIES ART-BHERO, LLC | Series Agreement |
| 1 |
| (b) | Transact all business necessary, appropriate, advisable, convenient, or incidental to the foregoing provisions and objectives. |
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| (c) | The Underlying Asset(s) of the Series is/are list in Appendix B hereto. |
1.2 Name of Series
The name of the Series created by this Series Agreement shall be SERIES ART-BHERO, LLC.
1.3 Definitions
The definitions of capitalized terms not otherwise defined herein are provided in the Company Agreement for Mythic Collections, LLC to which this Agreement is attached as an Exhibit.
1.4 Term
The Series shall commence upon the execution of this Series Agreement, and its approval by the Company Manager.
The Series Agreement will terminate on the earlier of: (i) one year after the date on which the relevant Underlying Asset has been liquidated and the obligations connected to the Underlying Asset (including, contingent obligations) have been terminated, (ii) the removal of Mythic Markets, Inc. as managing member of the Company (and thus all Series of Interests), (iii) upon notice by one party to the other party of a party’s material breach of the Series Agreement or (iv) such other date as agreed between the parties to the Series Agreement.
2. Management
2.1 Management of Series Business
The management of the SERIES ART-BHERO is invested in a Manager. The Manager of SERIES ART-BHERO is Mythic Collections, LLC, a Delaware limited liability company (hereinafter “Series Manager”), whose manager is Mythic Markets, Inc., a Delaware corporation, whose CEO is Joe Mahavuthivanij.
2.2 Series Manager’s Limitation of Liability
The liability of the Series Manager shall be limited as provided pursuant to applicable law. The Series Manager is in control of the management, direction, and operation of the Series’ affairs and shall have powers to bind the Series with any legally binding agreement, including setting up and operating separate bank accounts on behalf of the Series.
| SERIES ART-BHERO, LLC | Series Agreement |
| 2 |
2.3 Powers of the Series Manager
The services provided by the Series Manager will include:
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| · | Together with members of the Advisory Board, creating the asset maintenance policies for the collection of assets; |
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| · | Investigating, selecting, and, on behalf of the applicable series, engaging and conducting business with such persons as the Series Manager deems necessary to ensure the proper performance of its obligations under the Company and Series Agreement, including but not limited to consultants, insurers, insurance agents, maintenance providers, storage providers and transportation providers and any and all persons acting in any other capacity deemed by the Series Manager necessary or desirable for the performance of any of the services under the Company and Series Agreement; and |
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| · | Developing standards for the transportation and care of the Underlying Assets. |
2.4 Exculpation
The Series Manager shall not be subject to any liability to the Members for any act or omission, the effect of which may cause or result in loss or damage to the Series or the Members if done in good faith to promote the best interests of the Series.
3. Members
Each of the signatories to this Series Agreement shall be referenced herein as a “Member” or “Series Member” and collectively, as the “Members” or “Series Members” as defined herein and in the Definitions section of the Company Agreement. The Members shall immediately, and from time to time hereafter, execute all documents and do all filing, recording, and other acts as may be required to comply with the operation of the Company or Series under the Act. The Series Manager will maintain an updated list of all Members as shown on Appendix A to this Series Agreement.
3.1 Members (Investors)
Investors will purchase Interests in the Series exchange for their Capital Contributions, and in so doing, will become Members. Members will be entitled to priority returns on their investment and a return of their Capital Contributions before the Series Manager. Members will own fifty percent (50%) of the Interests in the Company and will have a limited right to vote on certain matters described in the Company Agreement associated with this Series Agreement. The Members, other than the Manager, will contribute ninety percent (90%) to ninety-eight percent (98%) of the Total Dollar Amount or total Capital Contributions. This is the total contribution of the class and will depend on the contribution by the Manager.
| SERIES ART-BHERO, LLC | Series Agreement |
| 3 |
3.2 Manager Members (Manager and related parties)
Interests will be distributed to the Series Manager and/or the Key Principals (“Manager Interests”) and/or their Affiliates, or others to whom the Series Manager grants or sells Interests. The Series Manager, Key Principals, or those who provide services in exchange for Interests as determined by the Series Manager, will own fifty percent (50%) of SERIES ART-BHERO in exchange for their contribution of services to SERIES ART-BHERO. The Manager will contribute at least two percent (2%) of the Total Dollar Amount or total Capital Contributions. This will establish a Capital Account Balance for the Manager.
4. Offering Details
An Offering for the sale of Interests in the Series shall commence upon qualification of the Form 1-A specifying the Series as filed with the Securities Exchange Commission.
Some of the proceeds will be used to reimburse the Manager, its Affiliates, or third-parties for expenses related to acquisition, improvements, or management of an Asset, including but not limited to such things as due diligence, maintenance, storage, escrow or loan fees associated with acquisition of an Asset, earnest money deposits, organizational expenses, loan guarantee fees, legal fees and other miscellaneous expenses.
The Manager will be reimbursed for legal and organizational expenses associated with setting up the Series.
4.1 Working Capital and Reserves
Proceeds of the Offering that are not used to acquire the Asset will be held in the Series bank account for use as Working Capital and Reserves during operation of the Series. If only a small amount of capital is raised, then additional Working Capital and Reserves may need to be accumulated from cash flow during operation of the Asset and any Distributions to the Members may be deferred until such time as sufficient Reserves have been accumulated, at the Manager’s sole discretion.
4.2 Deferral of Reimbursements or Manager’s Fees
If less than the cost of the Underlying Asset(s)of capital is raised, the Manager may defer collection of Manager’s Fees shown in the Total Dollar Amount column and reimbursement for its expenses without forfeiting any right to collect. The Manager may also elect to defer the collection of Fees due the Manager. In either event the Series will pay the Manager ten percent (10%) annual interest on the deferral of the reimbursements or Fees.
| SERIES ART-BHERO, LLC | Series Agreement |
| 4 |
4.3 Operating Expenses
The Manager has agreed to pay and not be reimbursed for Operating Expenses incurred prior to the Closing. Operating Expenses incurred post-Closing shall be the responsibility of the Series. However, if the Operating Expenses exceed the amount of revenues generated from the Underlying Asset, the Manager may (a) pay such Operating Expenses and not seek reimbursement, (b) loan the amount of the Operating Expenses to the Series, on which the Manager may impose a reasonable rate of interest, which shall not be lower than the Applicable Federal Rate (as defined in the Internal Revenue Code), and be entitled to reimbursement of such amount from future revenues generated by the Series (“Operating Expenses Reimbursement Obligation(s)”), and/or (c) cause additional Interests to be issued in order to cover such additional amounts.
We do not anticipate that the Series will generate any revenues in 2020 and expect the Series to either incur Operating Expenses Reimbursement Obligations or that the Manager pays such Operating Expenses incurred and will not seek reimbursement. See discussion of “Description of the Business – Operating Expenses” for additional information.
5. Capital Contributions
5.1 Initial Contributions
The Members initially shall contribute capital to the SERIES ART-BHERO as described in Appendix A to this Series Agreement.
5.2 Additional Contributions
No Member shall be obligated to make any additional contribution to the Series’ capital, except in the case of a capital call as described in the Company Agreement.
6. Profits, Losses and Distributions
6.1 Profits and Losses
For financial accounting and tax purposes the Series’ net profits or net losses shall be determined on an annual basis and shall be allocated to the Members in proportion to each Member’s relative capital interest in the Series as set forth in Appendix A hereto as amended from time to time in accordance with Treasury Regulation 1.704-1.
6.2 Free Cash Flow Distributions
Free Cash Flow is the net income (as determined under U.S. generally accepted accounting principles (“GAAP”)) generated by the Series plus any change in net working capital and depreciation and amortization (and any other non-cash Operating Expenses) and less any capital expenditures related to the Underlying Asset (“Free Cash Flow”); provided that Free Cash Flow does not include proceeds from a sale of an Underlying Asset. The Manager may maintain Free Cash Flow funds in a deposit account or an investment account for the benefit of the Series.
| SERIES ART-BHERO, LLC | Series Agreement |
| 5 |
The Manager has sole discretion in determining what distributions of Free Cash Flow, if any, are made to Members of the Series of Interests. Any Free Cash Flow generated by the Series of Interests from the utilization of the Underlying Asset shall be applied within the Series of Interests in the following order of priority:
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| · | repay any amounts outstanding under Operating Expenses Reimbursement Obligations plus accrued interest; |
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| · | thereafter to create such reserves as the Manager deems necessary, in its sole discretion, to meet future Operating Expenses; and; |
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| · | thereafter, 50% (net of corporate income taxes applicable to the Series of Interests) by way of distribution to the Interest Holders of the Series of Interests, which may include the Asset Sellers (as defined below) of the Underlying Asset or the Manager or any of its affiliates, and; |
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| · | 50% to the Series Manager in payment of the Management Fee. |
6.3 Timing of Free Cash Flow Distributions
The Manager may make semi-annual distributions of Free Cash Flow remaining to Interest Holders subject to it having the right, in its sole discretion, to withhold distributions including the Management Fee in order to meet anticipated costs and liabilities of the Series. The Manager may change the timing of potential distributions in its sole discretion.
6.4 Disposition of an Underlying Asset
Upon the occurrence of the disposition of the Underlying Asset, any after-tax proceeds distributed: (i) first, to any third party creditors, (ii) second, to any creditors that are the Manager or its affiliates (e.g., payment of any outstanding Operating Expenses Reimbursement Obligation or accrued Management Fee), and thereafter, (iii) to the Interest Holders of the relevant Series of Interests, allocated pro rata based on the number of Interests held by each Interest Holder (which may include the Manager, any of its affiliates and the Asset Seller and which distribution within a Series will be made consistent with any preferences which exist within such Series).
7. Compensation
7.1 Series Manager Fees
The Series Manager (and/or its members or their Affiliates) will earn certain Fees for management of the Series, as described below:
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| · | The Series Manager will earn a Sourcing Fee of five percent (5%) of the purchase price of the Asset. The “Sourcing Fee” is a fee paid to the Series Manager as compensation for performing due diligence and purchasing a Series Underlying Asset(s) on behalf of the Series. |
7.2 Reimbursement
The Series shall reimburse the Series Manager for all direct out-of-pocket expenses incurred by the Series Manager in managing the Series. Further, any Members or Affiliates of the Series Manager who incur out-of-pocket expenses on behalf of the Series will be reimbursed.
| SERIES ART-BHERO, LLC | Series Agreement |
| 6 |
8. Bookkeeping
The Series, for accounting and income tax purposes, shall operate on a Fiscal Year ending December 31 of each year, and shall make such income tax elections and use such methods of depreciation as shall be determined by the Series Manager. The books and records of the Company will be kept on a GAAP basis in accordance with sound accounting practices to reflect all income and expenses of the Series.
9. Transfers
Should any Member have a creditor with a judgment for an assignment of a Membership Interest, the creditor shall only obtain Economic Interest (no voting rights) that such Member has in the Series. The new assignee does not have any rights of the Member or have the ability to be involved in management of the Company or Series or the right to dissolve or partition the Company or Series. The new assignee will only be granted rights to the Member’s Distributions, if the Series Manager decides to distribute at all. The assignee must release the Member’s interests back to the Member upon payment of the judgment.
10. Dissolution
The Series Manager may dissolve the Series at any time once the Series Underlying Asset(s) has been sold. Upon dissolution the Series must pay its debts first before distributing cash, assets, and/or initial capital to the Members or the Membership Interests. The dissolution may only be ordered by the Series Manager or the Founder, not by an owner of Series Membership Interests or by any other member of the Company.
11. Miscellaneous Provisions
11.1 Agreement to Be Bound
Each of the undersigned agrees to be bound by the terms and provisions of this Series Agreement, and the terms of the Company Agreement to which this Series Agreement is attached as an Exhibit.
11.2 Headings
The headings in this Series Agreement are included for convenience and identification only and are in no way intend to describe, interpret, define or limit the scope, extent, or intent of this Series Agreement or any provision hereof.
11.3 Severability
The invalidity or unenforceability of any particular provision of this Series Agreement shall not affect the other provisions hereof, and this Series Agreement shall be construed in all respects as if such invalid or unenforceable provision was omitted.
| SERIES ART-BHERO, LLC | Series Agreement |
| 7 |
11.4 Integration
This Series Agreement and the Company Agreement collectively constitute the entire agreement among the parties hereto pertaining to the subject matter hereof and shall supersede all prior agreements and understandings pertaining thereto.
11.5 Counterparts
This Series Agreement may be executed in any number of counterparts with the same effect as if all parties had signed the same document. All counterparts shall be construed together and shall constitute one instrument.
11.6 Governing Law
This Series Agreement and the rights of the parties hereunder shall be interpreted in accordance with the laws of the State of Delaware pertaining to a Delaware Series limited liability company, and all rights and remedies shall be governed by such laws, without regard to principles of conflict of laws.
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| SERIES ART-BHERO, LLC | Series Agreement |
| 8 |
12. Signatures
IN WITNESS WHEREOF, the parties hereto have executed this Agreement of SERIES ART-BHERO, LLC, as of the date and year first above written.
MASTER LIMITED LIABILITY COMPANY
Dated: June 29, 2020
By: SERIES ART-BHERO, LLC
A Delaware Series Limited Liability Company
By: Its Series Manager,
Mythic Collection, LLC
A Delaware Series Limited Liability Company
By: Its Manager,
Mythic Market, Inc.
A Delaware Corporation
/s/ Joe Mahavuthivanij
By: Its CEO,
Joe Mahavuthivanij
SERIES MANAGER
Dated: June 29, 2020
By: Mythic Collection, LLC
A Delaware Series Limited Liability Company
By: Its Manager,
Mythic Market, Inc.
A Delaware Corporation
/s/ Joe Mahavuthivanij
By: Its CEO,
Joe Mahavuthivanij
| ALL SUBSCRIBERS INDICATE ACCEPTANCE OF THIS AGREEMENT BY COMPLETING, EXECUTING AND RETURNING THE SUBSCRIPTION AGREEMENT TO THE MANAGER AT THE ADDRESS PROVIDED HEREIN. |
| SERIES ART-BHERO, LLC | Series Agreement |
| 9 |
Appendix A: SERIES ART-BHERO Members
SERIES ART-BHERO Members
(Members and Manager)
(FOR INTERNAL USE ONLY)
| Entity/Name | Capital Contribution | Percentage Interests |
|
| ||
| TOTAL |
| 100% |
*DUPLICATE THIS PAGE IF NECESSARY
| SERIES ART-BHERO, LLC | Series Agreement |
| A-1 |
Appendix B: SERIES UNDERLYING ASSETS
Original painting by Douglas Shuler depicting a female warrior in black armor on a yellow background, which original painting is depicted on the Magic: The Gathering Benalish Hero trading card.
| SERIES ART-BHERO, LLC | Series Agreement |
| B-1 |
EXHIBIT 2.8
| SERIES AGREEMENT SERIES COM-FF160, LLC |
|
|
| A Delaware Series Limited Liability Company June 29, 2020 |
TABLE OF CONTENTS
| 1. | New Series |
| 1 |
|
| 1.1 | Purpose |
| 1 |
|
| 1.2 | Name of Series |
| 2 |
|
| 1.3 | Definitions |
| 2 |
|
| 1.4 | Term |
| 2 | |
|
| ||||
| 2. | Management |
| 2 |
|
| 2.1 | Management of Series Business |
| 2 |
|
| 2.2 | Series Manager’s Limitation of Liability |
| 2 |
|
| 2.3 | Powers of the Series Manager |
| 3 |
|
| 2.4 | Exculpation |
| 3 | |
|
| ||||
| 3. | Members |
| 3 |
|
| 3.1 | Investor Members |
| 3 |
|
| 3.2 | Manager Members |
| 4 | |
|
| ||||
| 4. | Offering Details |
| 4 |
|
| 4.1 | Working Capital and Reserves |
| 4 |
|
| 4.2 | Deferral of Reimbursements or Manager’s Fees |
| 4 | |
|
| ||||
| 5. | Capital Contributions |
| 5 |
|
| 5.1 | Initial Contributions |
| 5 |
|
| 5.2 | Additional Contributions |
| 5 | |
|
| ||||
| 6. | Profits, Losses and Distributions |
| 5 |
|
| 6.1 | Profits and Losses |
| 5 |
|
| 6.2 | Distributions |
| 5 | |
|
| ||||
| 7. | Compensation |
| 6 |
|
| 7.1 | Series Manager Fees |
| 6 |
|
| 7.2 | Reimbursement |
| 6 | |
|
| ||||
| 8. | Bookkeeping |
| 7 | |
|
| ||||
| 9. | Transfers |
| 7 | |
|
| ||||
| 10. | Dissolution |
| 7 | |
|
| ||||
| 11. | Miscellaneous Provisions |
| 7 |
|
| 11.1 | Agreement to Be Bound |
| 7 |
|
| 11.2 | Headings |
| 7 |
|
| 11.3 | Severability |
| 7 |
|
| 11.4 | Integration |
| 8 |
|
| 11.5 | Counterparts |
| 8 |
|
| 11.6 | Governing Law |
| 8 | |
|
| ||||
| 12. | Signatures |
|
| |
|
| ||||
| Appendix A: SERIES COM-FF160 Members |
| A-1 | ||
| SERIES COM-FF160, LLC |
| Series Agreement |
| ii |
SERIES AGREEMENT
FOR
SERIES COM-FF160, LLC
A Delaware Series Limited Liability Company
THIS SERIES AGREEMENT, dated June 29, 2020 (“Series Agreement”), is entered into by and between the Mythic Collection, LLC (the “Company”), and the members of its associated and newly created Series (“SERIES COM-FF160”), and the Series Manager, Mythic Markets, Inc., a Delaware corporation (“Series Manager”), collectively the “parties” as further described below.
RECITALS
WHEREAS, the parties hereto have formed a Series limited liability company pursuant to the Delaware Limited Liability Company Act by filing the Certificate of Formation for the Company with the office of the Secretary of the State of Delaware and by entering into the Company Agreement of the Company accompanying this Series Agreement; and
WHEREAS, it is intended by the parties to create an additional Series with such Series having an address of 16 Lagoon Court, San Rafael, California 94903, which shall, acquire, own, and manage Series Underlying Asset(s) from that owned by the Company or associated with any other Series as may be formed by the Company; and
WHEREAS, it is intended by the parties hereto that the debts, liabilities and obligations incurred, contracted for or otherwise existing with respect to this Series and its Series Underlying Asset(s) be enforceable against the assets of this Series and its Series Underlying Asset(s) only, and not against the assets of the Company generally or any other Series thereof; and
NOW THEREFORE, in consideration of the mutual promises and obligations contained herein, the parties, intending to be legally bound, hereby agree as follows:
1. New Series
The Founding Members of the Company hereby create a new Series, which shall be called “SERIES COM-FF160, LLC” or “SERIES COM-FF160” for purposes of the Company Agreement and this Series Agreement.
1.1 Purpose
SERIES COM-FF160, LLC was formed to:
| (a) | To acquire, investment, manage, operate, liquidate, and dispose of Underlying Asset(s) by sale or lease to a third-party or to an Affiliate of the Company or its members; |
| SERIES COM-FF160, LLC | Series Agreement |
| 1 |
| (b) | Transact all business necessary, appropriate, advisable, convenient, or incidental to the foregoing provisions and objectives. |
|
| |
| (c) | The Underlying Asset(s) of the Series is/are list in Appendix B hereto. |
1.2 Name of Series
The name of the Series created by this Series Agreement shall be SERIES COM-FF160, LLC.
1.3 Definitions
The definitions of capitalized terms not otherwise defined herein are provided in the Company Agreement for Mythic Collections, LLC to which this Agreement is attached as an Exhibit.
1.4 Term
The Series shall commence upon the execution of this Series Agreement, and its approval by the Company Manager.
The Series Agreement will terminate on the earlier of: (i) one year after the date on which the relevant Underlying Asset has been liquidated and the obligations connected to the Underlying Asset (including, contingent obligations) have been terminated, (ii) the removal of Mythic Markets, Inc. as managing member of the Company (and thus all Series of Interests), (iii) upon notice by one party to the other party of a party’s material breach of the Series Agreement or (iv) such other date as agreed between the parties to the Series Agreement.
2. Management
2.1 Management of Series Business
The management of the SERIES COM-FF160 is invested in a Manager. The Manager of SERIES COM-FF160 is Mythic Collections, LLC, a Delaware limited liability company (hereinafter “Series Manager”), whose manager is Mythic Markets, Inc., a Delaware corporation, whose CEO is Joe Mahavuthivanij.
2.2 Series Manager’s Limitation of Liability
The liability of the Series Manager shall be limited as provided pursuant to applicable law. The Series Manager is in control of the management, direction, and operation of the Series’ affairs and shall have powers to bind the Series with any legally binding agreement, including setting up and operating separate bank accounts on behalf of the Series.
| SERIES COM-FF160, LLC | Series Agreement |
| 2 |
2.3 Powers of the Series Manager
The services provided by the Series Manager will include:
|
| · | Together with members of the Advisory Board, creating the asset maintenance policies for the collection of assets; |
|
| · | Investigating, selecting, and, on behalf of the applicable series, engaging and conducting business with such persons as the Series Manager deems necessary to ensure the proper performance of its obligations under the Company and Series Agreement, including but not limited to consultants, insurers, insurance agents, maintenance providers, storage providers and transportation providers and any and all persons acting in any other capacity deemed by the Series Manager necessary or desirable for the performance of any of the services under the Company and Series Agreement; and |
|
| · | Developing standards for the transportation and care of the Underlying Assets. |
2.4 Exculpation
The Series Manager shall not be subject to any liability to the Members for any act or omission, the effect of which may cause or result in loss or damage to the Series or the Members if done in good faith to promote the best interests of the Series.
3. Members
Each of the signatories to this Series Agreement shall be referenced herein as a “Member” or “Series Member” and collectively, as the “Members” or “Series Members” as defined herein and in the Definitions section of the Company Agreement. The Members shall immediately, and from time to time hereafter, execute all documents and do all filing, recording, and other acts as may be required to comply with the operation of the Company or Series under the Act. The Series Manager will maintain an updated list of all Members as shown on Appendix A to this Series Agreement.
3.1 Members (Investors)
Investors will purchase Interests in the Series exchange for their Capital Contributions, and in so doing, will become Members. Members will be entitled to priority returns on their investment and a return of their Capital Contributions before the Series Manager. Members will own fifty percent (50%) of the Interests in the Company and will have a limited right to vote on certain matters described in the Company Agreement associated with this Series Agreement. The Members, other than the Manager, will contribute ninety percent (90%) to ninety-eight percent (98%) of the Total Dollar Amount or total Capital Contributions. This is the total contribution of the class and will depend on the contribution by the Manager.
| SERIES COM-FF160, LLC | Series Agreement |
| 3 |
3.2 Manager Members (Manager and related parties)
Interests will be distributed to the Series Manager and/or the Key Principals (“Manager Interests”) and/or their Affiliates, or others to whom the Series Manager grants or sells Interests. The Series Manager, Key Principals, or those who provide services in exchange for Interests as determined by the Series Manager, will own fifty percent (50%) of SERIES COM-FF160 in exchange for their contribution of services to SERIES COM-FF160. The Manager will contribute at least two percent (2%) of the Total Dollar Amount or total Capital Contributions. This will establish a Capital Account Balance for the Manager.
4. Offering Details
An Offering for the sale of Interests in the Series shall commence upon qualification of the Form 1-A specifying the Series as filed with the Securities Exchange Commission.
Some of the proceeds will be used to reimburse the Manager, its Affiliates, or third-parties for expenses related to acquisition, improvements, or management of an Asset, including but not limited to such things as due diligence, maintenance, storage, escrow or loan fees associated with acquisition of an Asset, earnest money deposits, organizational expenses, loan guarantee fees, legal fees and other miscellaneous expenses.
The Manager will be reimbursed for legal and organizational expenses associated with setting up the Series.
4.1 Working Capital and Reserves
Proceeds of the Offering that are not used to acquire the Asset will be held in the Series bank account for use as Working Capital and Reserves during operation of the Series. If only a small amount of capital is raised, then additional Working Capital and Reserves may need to be accumulated from cash flow during operation of the Asset and any Distributions to the Members may be deferred until such time as sufficient Reserves have been accumulated, at the Manager’s sole discretion.
4.2 Deferral of Reimbursements or Manager’s Fees
If less than the cost of the Underlying Asset(s)of capital is raised, the Manager may defer collection of Manager’s Fees shown in the Total Dollar Amount column and reimbursement for its expenses without forfeiting any right to collect. The Manager may also elect to defer the collection of Fees due the Manager. In either event the Series will pay the Manager ten percent (10%) annual interest on the deferral of the reimbursements or Fees.
| SERIES COM-FF160, LLC | Series Agreement |
| 4 |
4.3 Operating Expenses
The Manager has agreed to pay and not be reimbursed for Operating Expenses incurred prior to the Closing. Operating Expenses incurred post-Closing shall be the responsibility of the Series. However, if the Operating Expenses exceed the amount of revenues generated from the Underlying Asset, the Manager may (a) pay such Operating Expenses and not seek reimbursement, (b) loan the amount of the Operating Expenses to the Series, on which the Manager may impose a reasonable rate of interest, which shall not be lower than the Applicable Federal Rate (as defined in the Internal Revenue Code), and be entitled to reimbursement of such amount from future revenues generated by the Series (“Operating Expenses Reimbursement Obligation(s)”), and/or (c) cause additional Interests to be issued in order to cover such additional amounts.
We do not anticipate that the Series will generate any revenues in 2020 and expect the Series to either incur Operating Expenses Reimbursement Obligations or that the Manager pays such Operating Expenses incurred and will not seek reimbursement. See discussion of “Description of the Business – Operating Expenses” for additional information.
5. Capital Contributions
5.1 Initial Contributions
The Members initially shall contribute capital to the SERIES COM-FF160 as described in Appendix A to this Series Agreement.
5.2 Additional Contributions
No Member shall be obligated to make any additional contribution to the Series’ capital, except in the case of a capital call as described in the Company Agreement.
6. Profits, Losses and Distributions
6.1 Profits and Losses
For financial accounting and tax purposes the Series’ net profits or net losses shall be determined on an annual basis and shall be allocated to the Members in proportion to each Member’s relative capital interest in the Series as set forth in Appendix A hereto as amended from time to time in accordance with Treasury Regulation 1.704-1.
6.2 Free Cash Flow Distributions
Free Cash Flow is the net income (as determined under U.S. generally accepted accounting principles (“GAAP”)) generated by the Series plus any change in net working capital and depreciation and amortization (and any other non-cash Operating Expenses) and less any capital expenditures related to the Underlying Asset (“Free Cash Flow”); provided that Free Cash Flow does not include proceeds from a sale of an Underlying Asset. The Manager may maintain Free Cash Flow funds in a deposit account or an investment account for the benefit of the Series.
| SERIES COM-FF160, LLC | Series Agreement |
| 5 |
The Manager has sole discretion in determining what distributions of Free Cash Flow, if any, are made to Members of the Series of Interests. Any Free Cash Flow generated by the Series of Interests from the utilization of the Underlying Asset shall be applied within the Series of Interests in the following order of priority:
|
| · | repay any amounts outstanding under Operating Expenses Reimbursement Obligations plus accrued interest; |
|
| · | thereafter to create such reserves as the Manager deems necessary, in its sole discretion, to meet future Operating Expenses; and; |
|
| · | thereafter, 50% (net of corporate income taxes applicable to the Series of Interests) by way of distribution to the Interest Holders of the Series of Interests, which may include the Asset Sellers (as defined below) of the Underlying Asset or the Manager or any of its affiliates, and; |
|
| · | 50% to the Series Manager in payment of the Management Fee. |
6.3 Timing of Free Cash Flow Distributions
The Manager may make semi-annual distributions of Free Cash Flow remaining to Interest Holders subject to it having the right, in its sole discretion, to withhold distributions including the Management Fee in order to meet anticipated costs and liabilities of the Series. The Manager may change the timing of potential distributions in its sole discretion.
6.4 Disposition of an Underlying Asset
Upon the occurrence of the disposition of the Underlying Asset, any after-tax proceeds distributed: (i) first, to any third party creditors, (ii) second, to any creditors that are the Manager or its affiliates (e.g., payment of any outstanding Operating Expenses Reimbursement Obligation or accrued Management Fee), and thereafter, (iii) to the Interest Holders of the relevant Series of Interests, allocated pro rata based on the number of Interests held by each Interest Holder (which may include the Manager, any of its affiliates and the Asset Seller and which distribution within a Series will be made consistent with any preferences which exist within such Series).
7. Compensation
7.1 Series Manager Fees
The Series Manager (and/or its members or their Affiliates) will earn certain Fees for management of the Series, as described below:
|
| · | The Series Manager will earn a Sourcing Fee of five percent (5%) of the purchase price of the Asset. The “Sourcing Fee” is a fee paid to the Series Manager as compensation for performing due diligence and purchasing a Series Underlying Asset(s) on behalf of the Series. |
7.2 Reimbursement
The Series shall reimburse the Series Manager for all direct out-of-pocket expenses incurred by the Series Manager in managing the Series. Further, any Members or Affiliates of the Series Manager who incur out-of-pocket expenses on behalf of the Series will be reimbursed.
| SERIES COM-FF160, LLC | Series Agreement |
| 6 |
8. Bookkeeping
The Series, for accounting and income tax purposes, shall operate on a Fiscal Year ending December 31 of each year, and shall make such income tax elections and use such methods of depreciation as shall be determined by the Series Manager. The books and records of the Company will be kept on a GAAP basis in accordance with sound accounting practices to reflect all income and expenses of the Series.
9. Transfers
Should any Member have a creditor with a judgment for an assignment of a Membership Interest, the creditor shall only obtain Economic Interest (no voting rights) that such Member has in the Series. The new assignee does not have any rights of the Member or have the ability to be involved in management of the Company or Series or the right to dissolve or partition the Company or Series. The new assignee will only be granted rights to the Member’s Distributions, if the Series Manager decides to distribute at all. The assignee must release the Member’s interests back to the Member upon payment of the judgment.
10. Dissolution
The Series Manager may dissolve the Series at any time once the Series Underlying Asset(s) has been sold. Upon dissolution the Series must pay its debts first before distributing cash, assets, and/or initial capital to the Members or the Membership Interests. The dissolution may only be ordered by the Series Manager or the Founder, not by an owner of Series Membership Interests or by any other member of the Company.
11. Miscellaneous Provisions
11.1 Agreement to Be Bound
Each of the undersigned agrees to be bound by the terms and provisions of this Series Agreement, and the terms of the Company Agreement to which this Series Agreement is attached as an Exhibit.
11.2 Headings
The headings in this Series Agreement are included for convenience and identification only and are in no way intend to describe, interpret, define or limit the scope, extent, or intent of this Series Agreement or any provision hereof.
11.3 Severability
The invalidity or unenforceability of any particular provision of this Series Agreement shall not affect the other provisions hereof, and this Series Agreement shall be construed in all respects as if such invalid or unenforceable provision was omitted.
| SERIES COM-FF160, LLC | Series Agreement |
| 7 |
11.4 Integration
This Series Agreement and the Company Agreement collectively constitute the entire agreement among the parties hereto pertaining to the subject matter hereof and shall supersede all prior agreements and understandings pertaining thereto.
11.5 Counterparts
This Series Agreement may be executed in any number of counterparts with the same effect as if all parties had signed the same document. All counterparts shall be construed together and shall constitute one instrument.
11.6 Governing Law
This Series Agreement and the rights of the parties hereunder shall be interpreted in accordance with the laws of the State of Delaware pertaining to a Delaware Series limited liability company, and all rights and remedies shall be governed by such laws, without regard to principles of conflict of laws.
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| SERIES COM-FF160, LLC | Series Agreement |
| 8 |
12. Signatures
IN WITNESS WHEREOF, the parties hereto have executed this Agreement of SERIES COM-FF160, LLC, as of the date and year first above written.
MASTER LIMITED LIABILITY COMPANY
Dated: June 29, 2020
By: SERIES COM-FF160, LLC
A Delaware Series Limited Liability Company
By: Its Series Manager,
Mythic Collection, LLC
A Delaware Series Limited Liability Company
By: Its Manager,
Mythic Market, Inc.
A Delaware Corporation
/s/ Joe Mahavuthivanij
By: Its CEO,
Joe Mahavuthivanij
SERIES MANAGER
Dated: June 29, 2020
By: Mythic Collection, LLC
A Delaware Series Limited Liability Company
By: Its Manager,
Mythic Market, Inc.
A Delaware Corporation
/s/ Joe Mahavuthivanij
By: Its CEO,
Joe Mahavuthivanij
| ALL SUBSCRIBERS INDICATE ACCEPTANCE OF THIS AGREEMENT BY COMPLETING, EXECUTING AND RETURNING THE SUBSCRIPTION AGREEMENT TO THE MANAGER AT THE ADDRESS PROVIDED HEREIN. |
| SERIES COM-FF160, LLC | Series Agreement |
| 9 |
Appendix A: SERIES COM-FF160 Members
SERIES COM-FF160 Members
(Members and Manager)
(FOR INTERNAL USE ONLY)
| Entity/Name | Capital Contribution | Percentage Interests |
|
| ||
| TOTAL |
| 100% |
*DUPLICATE THIS PAGE IF NECESSARY
| SERIES COM-FF160, LLC | Series Agreement |
| A-1 |
Appendix B: SERIES UNDERLYING ASSETS
1961 Fantastic Four #1 CGC FN 6.0 comic book.
| SERIES COM-FF160, LLC | Series Agreement |
| B-1 |
EXHIBIT 4.1
SUBSCRIPTION AGREEMENT
SUBSCRIPTION AGREEMENT (the “Subscription Agreement”) made as of the date entered into below, by and between MTG-ABL90, LLC a series of Mythic Collection, LLC a Delaware Limited Liability Company (the “Issuer”), and the undersigned (the “Subscriber” or “You”).
WHEREAS, pursuant to the Offering Circular (the “Offering Circular”), the Issuer is offering in a Regulation A offering (the “Offering”) to investors up to 2,000 Interests (“Interests”) at a purchase price of $45.00 per Interest for a maximum aggregate purchase price of $90,000 (the “Maximum Offering”).
WHEREAS, the Subscriber desires to subscribe for the number and class of Interests set forth on the signature page hereof, on the terms and conditions hereinafter set forth.
NOW, THEREFORE, for and in consideration of the premises and the mutual covenants hereinafter set forth, the parties hereto do hereby agree as follows:
|
| I. | SUBSCRIPTION FOR AND REPRESENTATIONS AND COVENANTS OF SUBSCRIBER |
1.1 Subject to the terms and conditions hereinafter set forth, the Subscriber hereby subscribes for and agrees to purchase from the Issuer the number of Interests set forth on the signature page hereof, at a price equal to $45.00 per Interest, and the Issuer agrees to sell such Interests to the Subscriber for said purchase price, subject to the Issuer’s right to sell to the Subscriber such lesser number of (or no) Interests as the Issuer may, in its sole discretion, deem necessary or desirable. The purchase price is payable by wire or by check payable to the Issuer.
1.2 The Subscriber has full power and authority to enter into and deliver this Subscription Agreement and to perform its/his/her obligations hereunder, and the execution, delivery and performance of this Subscription Agreement has been duly authorized, if applicable, and this Subscription Agreement constitutes a valid and legally binding obligation of the Subscriber.
1.3 The Subscriber acknowledges receipt of the Offering Circular, all supplements to the Offering Circular, and all other documents furnished in connection with this transaction by the Issuer (collectively, the “Offering Documents”).
1.4 The Subscriber recognizes that the purchase of the Interests involves a high degree of risk in that (i) an investment in the Issuer is highly speculative and only investors who can afford the loss of their entire investment should consider investing in the Issuer and the Interests; (ii) the Interests are being sold pursuant to an exemption under Regulation A issued by the Securities and Exchange Commission (“SEC”) under the Securities Act of 1933, as amended (the “Act”), but they are not registered under the Act or any state securities law; (iii) there is only a limited trading market for the Interests, and there is no assurance that a more active one will ever develop, and thus, the Subscriber may not be able to liquidate his, her or its investment; and (iv) an investor could suffer the loss of his, her or its entire investment.
| 1 |
1.5 The Subscriber is an “accredited investor,” as such term is defined in Rule 501 of Regulation D promulgated under the Act, and the Subscriber is able to bear the economic risk of an investment in the Interests OR the purchase price tendered by Subscriber does not exceed 10% of the greater of the Subscriber’s annual income or net worth.
1.6 The Subscriber is not relying on the Issuer or its affiliates or agents with respect to economic considerations involved in this investment. The Subscriber has relied on the advice of, or has consulted with, only his, her or its advisors, if any. Each advisor, if any, is capable of evaluating the merits and risks of an investment in the Interests as such are described in the Offering Circular, and each advisor, if any, has disclosed to the Subscriber in writing (a copy of which is annexed to this Subscription Agreement) the specific details of any and all past, present or future relationships, actual or contemplated, between the advisor and the Issuer.
1.7 The Subscriber has prior investment experience (including investment in non-listed and non-registered securities), has (together with his, her or its advisors, if any) such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of the prospective investment in the Interests and has read and evaluated, or has employed the services of an investment advisor, attorney or accountant to read and evaluate, all of the documents furnished or made available by the Issuer to the Subscriber, including the Offering Circular, as well as the merits and risks of such an investment by the Subscriber. The Subscriber’s overall commitment to investments, which are not readily marketable, is not disproportionate to the Subscriber’s net worth, and the Subscriber’s investment in the Interests will not cause such overall commitment to become excessive. The Subscriber, if an individual, has adequate means of providing for his or her current needs and personal and family contingencies and has no need for liquidity in his or her investment in the Interests. The Subscriber is financially able to bear the economic risk of this investment, including the ability to afford holding the Interests for an indefinite period or a complete loss of this investment. If other than an individual, the Subscriber also represents it has not been organized solely for the purpose of acquiring the Interests.
1.8 The Subscriber acknowledges that any estimates or forward-looking statements or projections included in the Offering Circular were prepared by the management of the Issuer in good faith, but that the attainment of any such projections, estimates or forward-looking statements cannot be guaranteed by the Issuer, its management or its affiliates and should not be relied upon.
1.9 The Subscriber acknowledges that the purchase of the Interests may involve tax consequences to the Subscriber and that the contents of the Offering Documents do not contain tax advice. The Subscriber acknowledges that the Subscriber must retain his, her or its own professional advisors to evaluate the tax and other consequences to the Subscriber of an investment in the Interests. The Subscriber acknowledges that it is the responsibility of the Subscriber to determine the appropriateness and the merits of a corporate entity to own the Subscriber’s Interests and the corporate structure of such entity.
1.10 The Subscriber acknowledges that the Offering Circular and this Offering have not been reviewed by the SEC or any state securities commission, and that no federal or state agency has made any finding or determination regarding the fairness or merits of the Offering or confirmed the accuracy or determined the adequacy of the Offering Circular. Any representation to the contrary is a crime.
1.11 The Subscriber represents, warrants and agrees that the Interests are being purchased for his, her or its own beneficial account and not with a view toward distribution or resale to others. The Subscriber understands that the Issuer is under no obligation to register the Interests on his, her or its behalf or to assist them in complying with any exemption from registration under applicable state securities laws.
1.12 The Subscriber understands that the Interests have not been registered under the Act by reason of a claimed exemption under the provisions of the Act which depends, in part, upon his, her or its investment intention. The Subscriber realizes that, in the view of the SEC, a purchase with an intent to resell would represent a purchase with an intent inconsistent with his, her or its representation to the Issuer, and the SEC might regard such a sale or disposition as a deferred sale, for which such exemption is not available. The Subscriber does not have any such intentions.
| 2 |
1.13 The Subscriber agrees to indemnify and hold the Issuer, its manager, and controlling persons and their respective heirs, representatives, successors and assigns harmless against all liabilities, costs and expenses incurred by them as a result of any misrepresentation made by the Subscriber herein or as a result of any sale or distribution by the Subscriber in violation of the Act (including, without limitation, the rules promulgated thereunder), any state securities laws, or the Issuer’s Restated Certificate of Organization, Operating Agreement, and Series Operating Agreement as amended from time to time.
1.14 The Subscriber understands that the Issuer will review and rely on this Subscription Agreement without making any independent investigation; and it is agreed that the Issuer reserves the unrestricted right to reject or limit any subscription and to withdraw the Offering at any time.
1.15 The Subscriber hereby represents that the address of the Subscriber furnished at the end of this Subscription Agreement is the Subscriber’s principal residence, if the Subscriber is an individual, or its principal business address, if it is a corporation or other entity.
1.16 The Subscriber acknowledges that if the Subscriber is a Registered Representative of a Financial Industry Regulatory Authority (“FINRA”) member firm, the Subscriber must give such firm the notice required by FINRA’s Conduct Rules, receipt of which must be acknowledged by such firm on the signature page hereof.
1.17 The Subscriber hereby acknowledges that neither the Issuer nor any persons associated with the Issuer who may provide assistance or advice in connection with the Offering are or are expected to be members or associated persons of members of FINRA or registered broker-dealers under any federal or state securities laws.
1.18 The Subscriber hereby represents that, except as expressly set forth in the Offering Documents, no representations or warranties have been made to the Subscriber by the Issuer or by any agent, sub-agent, officer, employee or affiliate of the Issuer and, in entering into this transaction, the Subscriber is not relying on any information other than that contained in the Offering Documents and the results of independent investigation by the Subscriber.
1.19 No oral or written representations have been made, or oral or written information furnished, to the Subscriber or his, her or its advisors, if any, in connection with the offering of the Interests which are in any way inconsistent with the information contained in the Offering Documents.
1.20 All information provided by the Subscriber is true and accurate in all respects, and the Subscriber acknowledges that the Issuer will be relying on such information to its possible detriment in deciding whether the Issuer can sell these securities to the Subscriber without giving rise to the loss of the exemption from registration under applicable securities laws.
1.21 The Subscriber has taken no action which would give rise to any claim by any person for brokerage commissions, finders, fees or the like relating to this Subscription Agreement or the transactions contemplated hereby.
1.22 The Subscriber is not relying on the Issuer, or any of its employees, agents or sub-agents with respect to the legal, tax, economic and related considerations of an investment in the Interests, and the Subscriber has relied on the advice of, or has consulted with, only his, her or its own advisors, if any.
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1.23 (For ERISA plans only) The fiduciary of the ERISA plan (the “Plan”) represents that such fiduciary has been informed of and understands the Issuer’s business objectives, policies and strategies, and that the decision to invest “plan assets” (as such term is defined in ERISA) in the Issuer is consistent with the provisions of ERISA that require diversification of plan assets and impose other fiduciary responsibilities. The subscriber or Plan fiduciary (a) is responsible for the decision to invest in the Issuer; (b) is independent of the Issuer and any of its affiliates; (c) is qualified to make such investment decision; and (d) in making such decision, the subscriber or Plan fiduciary has not relied primarily on any advice or recommendation of the Issuer or any of its affiliates or its agents.
1.24 The foregoing representations, warranties and agreements shall survive the Closing.
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| II. | REPRESENTATIONS BY THE ISSUER |
The Issuer represents and warrants to the Subscriber that as of the date of the closing of the Offering (the “Closing Date”):
2.1 The Issuer is a Series Limited Liability Company duly organized, validly existing and in good standing under the laws of the State of Delaware, authorized to do business in the State of Delaware and has the corporate power to conduct the business which it conducts and proposes to conduct.
2.2 The execution, delivery and performance of this Subscription Agreement by the Issuer have been duly authorized by the Issuer and all other corporate action required to authorize and consummate the offer and sale of the Interests has been duly taken and approved. This Subscription Agreement is valid, binding and enforceable against the Issuer in accordance with its terms; except as enforcement may be limited by bankruptcy, insolvency, moratorium or similar laws or by legal or equitable principles relating to or limiting creditors’ rights generally, the availability of equity remedies, or public policy as to the enforcement of certain provisions, such as indemnification provisions.
2.3 The Interests have been duly and validly authorized and issued.
2.4 The Issuer knows of no pending or threatened legal or governmental proceedings to which the Issuer is a party which would materially adversely affect the business, financial condition or operations of the Issuer.
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| III. | TERMS OF SUBSCRIPTION |
3.1 Subject to Section 3.2 hereof, the subscription period will begin as of the date of the Offering Circular and will terminate at 11:59 PM Eastern Time, on the earlier of the date on which the Maximum Offering is sold or one (1) year from the commencement date or the date the Offering is terminated by the Issuer (the “Termination Date”).
3.2 The Subscriber has effected a wire transfer or ACH in the full amount of the purchase price for the Interests to the Issuer or has delivered a check in payment of the purchase price for the Interests.
3.3 Digital (“electronic”) signatures, often referred to as an “e-signature,” enable paperless contracts and help speed up business transactions. The 2001 E-Sign Act was meant to ease the adoption of electronic signatures.
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You may execute this Subscription Agreement by providing one of the following: (i) your original, scanned or faxed signature; or (ii) your electronic signature, as prescribed in the bulleted paragraphs below.
* The mechanics of the electronic signature requested herein include your execution of this Subscription Agreement, the Series Operating Agreement and the Operating Agreement for the Company in a single signature block. By typing in your name, with the underlying software recording your IP address, your browser identification, the timestamp, and a security hash within an SSL encrypted environment, you will have accepted and agreed, without reservation, to all of the terms and conditions contained within this Subscription Agreement, the Series Operating Agreement and the Operating Agreement. Your electronically signed Agreements will be stored by the Company in such a manner that the Company can access them at any time.
* You hereby consent and agree that the electronic signature below constitutes your signature, acceptance and agreement of this Subscription Agreement, the Series Operating Agreement and the Operating Agreement as if each of these documents were actually signed by you in writing. Further, all parties agree that no certification authority or other third-party verification is necessary to validate any electronic signature; and that the lack of such certification or third-party verification will not in any way affect the enforceability of your signature or resulting contract between you and the Company. You understand and agree that your e-signature executed in conjunction with the electronic submission of this Subscription Agreement, the Series Operating Agreement and the Operating Agreement shall be legally binding and that such transaction has been authorized by you. You agree that your electronic signature below is the legal equivalent of your manual signature on this Subscription Agreement, the Series Operating Agreement and the Operating Agreement and that you consent to be legally bound by terms and conditions of such Agreements. The Subscription Agreement, the Series Operating Agreement and the Operating Agreement may be executed in counterparts and by electronic signature, each of which shall be deemed an original, but all of which shall constitute one and the same instrument.
* Furthermore, you hereby agree that all current and future notices, confirmations and other communications regarding this Subscription Agreement, the Series Operating Agreement and the Operating Agreement specifically, and/or future communications in general between the parties, may be made by email, sent to the email address of record as set forth in the vesting information below or as otherwise from time to time changed or updated and disclosed to the other party, without necessity of confirmation of receipt, delivery or reading, and such form of electronic communication is sufficient for all matters regarding the relationship between the parties. If any such electronically sent communication fails to be received for any reason, including but not limited to such communications being diverted to the recipients’ spam filters by the recipients’ email service provider, or due to a recipients’ change of address, or due to technology issues by the recipients’ service provider, the parties agree that the burden of such failure to receive is on the recipient and not the sender, and that the sender is under no obligation to resend communications via any other means, including but not limited to postal service or overnight courier, and that such communications shall for all purposes, including legal and regulatory, be deemed to have been delivered and received. No physical, paper documents will be sent to you, and if you desire physical documents then you agree to be satisfied by directly and personally printing, at your own expense, the electronically sent communication(s) and maintaining such physical records in any manner or form that you desire.
* Your Consent is Hereby Given: By signing this Subscription Agreement, you are explicitly agreeing to receive documents electronically, including your copy of this signed Subscription Agreement, the Series Operating Agreement and the Operating Agreement, as well as ongoing disclosures, communications and notices.
* By signing this document, the Subscriber is agreeing to the Operating Agreement, the Series Operating Agreement and the Subscription Agreement and all provisions, clauses, representations, warranties, acknowledgments and covenants contained therein, each of which: (i) shall be binding on the heirs, executors, administrators, successors and permitted assigns of the undersigned, and (ii) may not be cancelled, withdrawn, revoked, or terminated by the undersigned except as set forth therein. If there is more than one signatory hereto, the representations, warranties, acknowledgments and agreements of the undersigned are made jointly and severally.
3.4 If the Subscriber is not a United States person, such Subscriber shall immediately notify the Issuer, and the Subscriber hereby represents that the Subscriber is satisfied as to the full observance of the laws of its jurisdiction in connection with any invitation to subscribe for the Interests or any use of this Subscription Agreement, including (i) the legal requirements within its jurisdiction for the purchase of the Interests, (ii) any foreign exchange restrictions applicable to such purchase, (iii) any governmental or other consents that may need to be obtained, and (iv) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale or transfer of the Interests. Such Subscriber’s subscription and payment for, and continued beneficial ownership of, the Interests will not violate any applicable securities or other laws of the Subscriber’s jurisdiction.
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| IV. | NOTICE TO SUBSCRIBERS |
4.1 THE INTERESTS HAVE BEEN QUALIFIED UNDER REGULATION A OF THE SECURITIES ACT OF 1933. THE INTERESTS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC, ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THE MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
4.2 FOR NON-U.S. RESIDENTS ONLY: NO ACTION HAS BEEN OR WILL BE TAKEN IN ANY JURISDICTION OUTSIDE THE UNITED STATES OF AMERICA THAT WOULD PERMIT AN OFFERING OF THESE SECURITIES, OR POSSESSION OR DISTRIBUTION OF OFFERING MATERIAL IN CONNECTION WITH THE ISSUE OF THESE SECURITIES, IN ANY COUNTRY OR JURISDICTION WHERE ACTION FOR THAT PURPOSE IS REQUIRED. IT IS THE RESPONSIBILITY OF ANY PERSON WISHING TO PURCHASE THESE SECURITIES TO SATISFY HIMSELF AS TO FULL OBSERVANCE OF THE LAWS OF ANY RELEVANT TERRITORY OUTSIDE THE UNTIED STATES OF AMERICA IN CONNECTION WITH ANY SUCH PURCHASE, INCLUDING OBTAINING ANY REQUIRED GOVERNMENTAL OR OTHER CONSENTS OR OBSERVING ANY OTHER APPLICABLE FORMALITIES.
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| V. | MISCELLANEOUS |
5.1 Any notice or other communication given hereunder shall be deemed sufficient if in writing and sent by electronic mail, reputable overnight courier, facsimile (with receipt of confirmation) or registered or certified mail, return receipt requested, addressed to the Issuer, at the address set forth in the first paragraph hereof, Attention: MANAGER and to the Subscriber at the email address or address indicated on the signature page hereof. Notices shall be deemed to have been given on the date when mailed or sent by e-mail or overnight courier, except notices of change of address, which shall be deemed to have been given when received.
5.2 This Subscription Agreement shall not be changed, modified or amended except by a writing signed by the parties against whom such modification or amendment is to be charged, and this Subscription Agreement may not be discharged except by performance in accordance with its terms or by a writing signed by the party to be charged.
5.3 This Subscription Agreement shall be binding upon and inure to the benefit of the parties hereto and to their respective heirs, legal representatives, successors and assigns. This Subscription Agreement sets forth the entire agreement and understanding between the parties as to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings of any and every nature among them.
5.4 This Subscription Agreement may be executed in counterparts. Upon the execution and delivery of this Subscription Agreement by the Subscriber, this Subscription Agreement shall become a binding obligation of the Subscriber with respect to the purchase of Interests as herein provided; subject, however, to the right hereby reserved by the Issuer to (i) enter into the same agreements with other subscribers, (ii) add and/or delete other persons as subscribers and (iii) reduce the amount of or reject any subscription.
5.5 The holding of any provision of this Subscription Agreement to be invalid or unenforceable by a court of competent jurisdiction shall not affect any other provision of this Subscription Agreement, which shall remain in full force and effect.
5.6 It is agreed that a waiver by either party of a breach of any provision of this Subscription Agreement shall not operate or be construed as a waiver of any subsequent breach by that same party.
5.7 The parties agree to execute and deliver all such further documents, agreements and instruments and take such other and further actions as may be necessary or appropriate to carry out the purposes and intent of this Subscription Agreement.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties have executed this Subscription Agreement as of the day and year first written above.
Subscription Amount:
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AT ANY TIME PRIOR TO USE OF SUBSCRIPTION FUNDS BY THE ISSUER, THE MANAGER MAY RETURN THE TENDERED SUBSCRIPTION FUNDS TO THE SUBSCRIBER AND REJECT THE SUBSCRIPTION AGREEMENT. THE MANAGER HAS THIS RIGHT TO REJECTION PURSUANT TO SECTION 1.14 HEREIN. |
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EXHIBIT 4.2
SUBSCRIPTION AGREEMENT
SUBSCRIPTION AGREEMENT (the “Subscription Agreement”) made as of the date set forth on the signature page hereof, by and between Series MTG-BOX94, LLC a series of Mythic Collection, LLC a Delaware Limited Liability Company (the “Issuer”), and the undersigned (the “Subscriber” or “You”).
WHEREAS, pursuant to the Offering Circular (the “Offering Circular”), the Issuer is offering in a Regulation A offering (the “Offering”) to investors up to 2,000 Interests (“Interests”) at a purchase price of $27.50 per Interest for a maximum aggregate purchase price of $55,000 (the “Maximum Offering”).
WHEREAS, the Subscriber desires to subscribe for the number and class of Interests set forth on the signature page hereof, on the terms and conditions hereinafter set forth.
NOW, THEREFORE, for and in consideration of the premises and the mutual covenants hereinafter set forth, the parties hereto do hereby agree as follows:
SUBSCRIPTION PROCEEDURES
In order to purchase Non-Voting Interests, you must take the following steps:
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| 1. | Visit MythicMarkets.com and sign up for a user account on Mythic Markets’ marketplace. |
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| 2. | Verify your email address and Log in to Mythic Markets’ marketplace. |
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| 3. | Click on “Marketplace” which will bring you to the offerings page which will display all the available opportunities to invest. |
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| 4. | Select “Learn more” on the offering you are interested in. |
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| 5. | Carefully read the Offering Circular, and any current supplement, as well as any documents described in the Offering Circular and attached hereto or which you have requested. Consult with your tax, legal and financial advisors to determine whether an investment in any of the Series Interests is suitable for you. |
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| 6. | If you are ready to invest, click the “Buy shares” button on the Offering Details page. |
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| 7. | Complete the KYC process by entering your name, address, date of birth, and social security number. All data is encrypted. |
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| 8. | Enter your banking information for ACH transfer to the offering’s escrow account and confirm your investment. |
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| 9. | Input the number of Non-Voting Interests that you would like to purchase. |
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| 10. | Review and sign the Subscription Agreement that will be sent to you via HelloSign. |
I. SUBSCRIPTION FOR AND REPRESENTATIONS AND COVENANTS OF SUBSCRIBER
1.1 Subject to the terms and conditions hereinafter set forth, the Subscriber hereby subscribes for and agrees to purchase from the Issuer the number of Interests set forth on the signature page hereof, at a price equal to $27.50 per Interest, and the Issuer agrees to sell such Interests to the Subscriber for said purchase price, subject to the Issuer’s right to sell to the Subscriber such lesser number of (or no) Interests as the Issuer may, in its sole discretion, deem necessary or desirable. The purchase price is payable by ACH to the Issuer.
1.2 The Subscriber has full power and authority to enter into and deliver this Subscription Agreement and to perform its/his/her obligations hereunder, and the execution, delivery and performance of this Subscription Agreement has been duly authorized, if applicable, and this Subscription Agreement constitutes a valid and legally binding obligation of the Subscriber.
1.3 The Subscriber acknowledges receipt of and agrees to, as appropriate, the Offering Circular, all supplements and exhibits to the Offering Circular, and all other documents furnished in connection with this transaction by the Issuer, including the Issuer Operating Agreement attached hereto as Exhibit A and the Series Agreement attached hereto as Exhibit B (collectively, the “Offering Documents”).
1.4 The Subscriber recognizes that the purchase of the Interests involves a high degree of risk in that (i) an investment in the Issuer is highly speculative and only investors who can afford the loss of their entire investment should consider investing in the Issuer and the Interests; (ii) the Interests are being sold pursuant to an exemption under Regulation A issued by the Securities and Exchange Commission (“SEC”) under the Securities Act of 1933, as amended (the “Act”), but they are not registered under the Act or any state securities law; (iii) there is only a limited trading market for the Interests, and there is no assurance that a more active one will ever develop, and thus, the Subscriber may not be able to liquidate his, her or its investment; and (iv) an investor could suffer the loss of his, her or its entire investment.
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1.5 The Subscriber is an “accredited investor,” as such term is defined in Rule 501 of Regulation D promulgated under the Act, and the Subscriber is able to bear the economic risk of an investment in the Interests OR the purchase price tendered by Subscriber does not exceed 10% of the greater of the Subscriber’s annual income or net worth.
1.6 The Subscriber is not relying on the Issuer or its affiliates or agents with respect to economic considerations involved in this investment. The Subscriber has relied on the advice of, or has consulted with, only his, her or its advisors, if any. Each advisor, if any, is capable of evaluating the merits and risks of an investment in the Interests as such are described in the Offering Circular, and each advisor, if any, has disclosed to the Subscriber in writing (a copy of which is annexed to this Subscription Agreement) the specific details of any and all past, present or future relationships, actual or contemplated, between the advisor and the Issuer.
1.7 The Subscriber has prior investment experience (including investment in non-listed and non-registered securities), has (together with his, her or its advisors, if any) such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of the prospective investment in the Interests and has read and evaluated, or has employed the services of an investment advisor, attorney or accountant to read and evaluate, all of the documents furnished or made available by the Issuer to the Subscriber, including the Offering Circular, as well as the merits and risks of such an investment by the Subscriber. The Subscriber’s overall commitment to investments, which are not readily marketable, is not disproportionate to the Subscriber’s net worth, and the Subscriber’s investment in the Interests will not cause such overall commitment to become excessive. The Subscriber, if an individual, has adequate means of providing for his or her current needs and personal and family contingencies and has no need for liquidity in his or her investment in the Interests. The Subscriber is financially able to bear the economic risk of this investment, including the ability to afford holding the Interests for an indefinite period or a complete loss of this investment. If other than an individual, the Subscriber also represents it has not been organized solely for the purpose of acquiring the Interests.
1.8 The Subscriber acknowledges that any estimates or forward-looking statements or projections included in the Offering Circular were prepared by the management of the Issuer in good faith, but that the attainment of any such projections, estimates or forward-looking statements cannot be guaranteed by the Issuer, its management or its affiliates and should not be relied upon.
1.9 The Subscriber acknowledges that the purchase of the Interests may involve tax consequences to the Subscriber and that the contents of the Offering Documents do not contain tax advice. The Subscriber acknowledges that the Subscriber must retain his, her or its own professional advisors to evaluate the tax and other consequences to the Subscriber of an investment in the Interests. The Subscriber acknowledges that it is the responsibility of the Subscriber to determine the appropriateness and the merits of a corporate entity to own the Subscriber’s Interests and the corporate structure of such entity.
1.10 The Subscriber acknowledges that the Offering Circular and this Offering have not been reviewed by any state securities commission, and that no federal or state agency has made any finding or determination regarding the fairness or merits of the Offering or confirmed the accuracy or determined the adequacy of the Offering Circular. Any representation to the contrary is a crime.
1.11 The Subscriber represents, warrants and agrees that the Interests are being purchased for his, her or its own beneficial account and not with a view toward distribution or resale to others. The Subscriber understands that the Issuer is under no obligation to register the Interests on his, her or its behalf or to assist them in complying with any exemption from registration under applicable state securities laws.
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1.12 The Subscriber understands that the Interests have not been registered under the Act by reason of a claimed exemption under the provisions of the Act which depends, in part, upon his, her or its investment intention. The Subscriber realizes that, in the view of the SEC, a purchase with an intent to resell would represent a purchase with an intent inconsistent with his, her or its representation to the Issuer, and the SEC might regard such a sale or disposition as a deferred sale, for which such exemption is not available. The Subscriber does not have any such intentions.
1.13 The Subscriber agrees to indemnify and hold the Issuer, its manager, and controlling persons and their respective heirs, representatives, successors and assigns harmless against all liabilities, costs and expenses incurred by them as a result of any misrepresentation made by the Subscriber herein or as a result of any sale or distribution by the Subscriber in violation of the Act (including, without limitation, the rules promulgated thereunder), any state securities laws, or the Issuer’s Restated Certificate of Organization, Operating Agreement, and Series Operating Agreement as amended from time to time.
1.14 The Subscriber understands that the Issuer will review and rely on this Subscription Agreement without making any independent investigation; and it is agreed that the Issuer reserves the unrestricted right to reject or limit any subscription and to withdraw the Offering at any time.
1.15 The Subscriber hereby represents that the address of the Subscriber furnished at the end of this Subscription Agreement is the Subscriber’s principal residence, if the Subscriber is an individual, or its principal business address, if it is a corporation or other entity.
1.16 The Subscriber acknowledges that if the Subscriber is a Registered Representative of a Financial Industry Regulatory Authority (“FINRA”) member firm, the Subscriber must give such firm the notice required by FINRA’s Conduct Rules, receipt of which must be acknowledged by such firm on the signature page hereof.
1.17 The Subscriber hereby acknowledges that neither the Issuer nor any persons associated with the Issuer who may provide assistance or advice in connection with the Offering are or are expected to be members or associated persons of members of FINRA or registered broker-dealers under any federal or state securities laws.
1.18 The Subscriber hereby represents that, except as expressly set forth in the Offering Documents, no representations or warranties have been made to the Subscriber by the Issuer or by any agent, sub-agent, officer, employee or affiliate of the Issuer and, in entering into this transaction, the Subscriber is not relying on any information other than that contained in the Offering Documents and the results of independent investigation by the Subscriber.
1.19 No oral or written representations have been made, or oral or written information furnished, to the Subscriber or his, her or its advisors, if any, in connection with the offering of the Interests which are in any way inconsistent with the information contained in the Offering Documents.
1.20 All information provided by the Subscriber is true and accurate in all respects, and the Subscriber acknowledges that the Issuer will be relying on such information to its possible detriment in deciding whether the Issuer can sell these securities to the Subscriber without giving rise to the loss of the exemption from registration under applicable securities laws.
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1.21 The Subscriber has taken no action which would give rise to any claim by any person for brokerage commissions, finders, fees or the like relating to this Subscription Agreement or the transactions contemplated hereby.
1.22 The Subscriber is not relying on the Issuer, or any of its employees, agents or sub-agents with respect to the legal, tax, economic and related considerations of an investment in the Interests, and the Subscriber has relied on the advice of, or has consulted with, only his, her or its own advisors, if any.
1.23 (For ERISA plans only) The fiduciary of the ERISA plan (the “Plan”) represents that such fiduciary has been informed of and understands the Issuer’s business objectives, policies and strategies, and that the decision to invest “plan assets” (as such term is defined in ERISA) in the Issuer is consistent with the provisions of ERISA that require diversification of plan assets and impose other fiduciary responsibilities. The subscriber or Plan fiduciary (a) is responsible for the decision to invest in the Issuer; (b) is independent of the Issuer and any of its affiliates; (c) is qualified to make such investment decision; and (d) in making such decision, the subscriber or Plan fiduciary has not relied primarily on any advice or recommendation of the Issuer or any of its affiliates or its agents.
1.24 The foregoing representations, warranties and agreements shall survive the Closing.
II. REPRESENTATIONS BY THE ISSUER
The Issuer represents and warrants to the Subscriber that as of the date of the closing of the Offering (the “Closing Date”):
2.1 The Issuer is a Series Limited Liability Company duly organized, validly existing and in good standing under the laws of the State of Delaware, authorized to do business in the State of Delaware and has the corporate power to conduct the business which it conducts and proposes to conduct.
2.2 The execution, delivery and performance of this Subscription Agreement by the Issuer have been duly authorized by the Issuer and all other corporate action required to authorize and consummate the offer and sale of the Interests has been duly taken and approved. This Subscription Agreement is valid, binding and enforceable against the Issuer in accordance with its terms; except as enforcement may be limited by bankruptcy, insolvency, moratorium or similar laws or by legal or equitable principles relating to or limiting creditors’ rights generally, the availability of equity remedies, or public policy as to the enforcement of certain provisions, such as indemnification provisions.
2.3 The Interests have been duly and validly authorized and issued.
2.4 The Issuer knows of no pending or threatened legal or governmental proceedings to which the Issuer is a party which would materially adversely affect the business, financial condition or operations of the Issuer.
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III. TERMS OF SUBSCRIPTION
3.1 Subject to Section 3.2 hereof, the subscription period will begin as of the date of the Offering Circular and will terminate at 11:59 PM Eastern Time, on the earlier of the date on which the Maximum Offering is sold or one (1) year from the commencement date or the date the Offering is terminated by the Issuer, such date not to exceed the date which is 18 months from the date the Offering Circular or amendment thereto, as applicable, is qualified by the SEC (the “Termination Date”).
3.2 The Subscriber has effected an ACH in the full amount of the purchase price for the Interests to the Issuer. Concurrent with the execution hereof, the Subscriber authorizes North Capital Private Securities Corporation, a Delaware corporation and a registered broker-dealer, member FINRA and SIPC, as escrow agent for the Company (the “Escrow Agent”), to request the subscription price from the Subscriber’s bank. The Company shall cause the Escrow Agent to maintain all such funds for the Subscriber’s benefit in a segregated non-interest-bearing account, in the name of North Capital Private Securities for further credit to “MTG-BOX94, LLC”, a Series of Mythic Collection LLC – [Investor Name],” until the earliest to occur of: (i) the Closing, (ii) the rejection of such subscription or (iii) the Termination Date.
3.3 Digital (“electronic”) signatures, often referred to as an “e-signature,” enable paperless contracts and help speed up business transactions. The 2001 E-Sign Act was meant to ease the adoption of electronic signatures.
You may execute this Subscription Agreement by providing one of the following: (i) your original, scanned or faxed signature; or (ii) your electronic signature, as prescribed in the bulleted paragraphs below.
* The mechanics of the electronic signature requested herein include your execution of this Subscription Agreement, the Series Operating Agreement and the Operating Agreement for the Company in a single signature block. By typing in your name, with the underlying software recording your IP address, your browser identification, the timestamp, and a security hash within an SSL encrypted environment, you will have accepted and agreed, without reservation, to all of the terms and conditions contained within this Subscription Agreement, the Series Operating Agreement and the Operating Agreement. Your electronically signed Agreements will be stored by the Company in such a manner that the Company can access them at any time.
* You hereby consent and agree that the electronic signature below constitutes your signature, acceptance and agreement of this Subscription Agreement, the Series Operating Agreement and the Operating Agreement as if each of these documents were actually signed by you in writing. Further, all parties agree that no certification authority or other third-party verification is necessary to validate any electronic signature; and that the lack of such certification or third-party verification will not in any way affect the enforceability of your signature or resulting contract between you and the Company. You understand and agree that your e-signature executed in conjunction with the electronic submission of this Subscription Agreement, the Series Operating Agreement and the Operating Agreement shall be legally binding and that such transaction has been authorized by you. You agree that your electronic signature below is the legal equivalent of your manual signature on this Subscription Agreement, the Series Operating Agreement and the Operating Agreement and that you consent to be legally bound by terms and conditions of such Agreements. The Subscription Agreement, the Series Operating Agreement and the Operating Agreement may be executed in counterparts and by electronic signature, each of which shall be deemed an original, but all of which shall constitute one and the same instrument.
* Furthermore, you hereby agree that all current and future notices, confirmations and other communications regarding this Subscription Agreement, the Series Operating Agreement and the Operating Agreement specifically, and/or future communications in general between the parties, may be made by email, sent to the email address of record as set forth in the vesting information below or as otherwise from time to time changed or updated and disclosed to the other party, without necessity of confirmation of receipt, delivery or reading, and such form of electronic communication is sufficient for all matters regarding the relationship between the parties. If any such electronically sent communication fails to be received for any reason, including but not limited to such communications being diverted to the recipients’ spam filters by the recipients’ email service provider, or due to a recipients’ change of address, or due to technology issues by the recipients’ service provider, the parties agree that the burden of such failure to receive is on the recipient and not the sender, and that the sender is under no obligation to resend communications via any other means, including but not limited to postal service or overnight courier, and that such communications shall for all purposes, including legal and regulatory, be deemed to have been delivered and received. No physical, paper documents will be sent to you, and if you desire physical documents then you agree to be satisfied by directly and personally printing, at your own expense, the electronically sent communication(s) and maintaining such physical records in any manner or form that you desire.
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* Your Consent is Hereby Given: By signing this Subscription Agreement, you are explicitly agreeing to receive documents electronically, including your copy of this signed Subscription Agreement, the Series Operating Agreement and the Operating Agreement, as well as ongoing disclosures, communications and notices.
* By signing this document, the Subscriber is agreeing to the Operating Agreement, the Series Operating Agreement and the Subscription Agreement and all provisions, clauses, representations, warranties, acknowledgments and covenants contained therein, each of which: (i) shall be binding on the heirs, executors, administrators, successors and permitted assigns of the undersigned, and (ii) may not be cancelled, withdrawn, revoked, or terminated by the undersigned except as set forth therein. If there is more than one signatory hereto, the representations, warranties, acknowledgments and agreements of the undersigned are made jointly and severally.
3.4 If the Subscriber is not a United States person, such Subscriber shall immediately notify the Issuer, and the Subscriber hereby represents that the Subscriber is satisfied as to the full observance of the laws of its jurisdiction in connection with any invitation to subscribe for the Interests or any use of this Subscription Agreement, including (i) the legal requirements within its jurisdiction for the purchase of the Interests, (ii) any foreign exchange restrictions applicable to such purchase, (iii) any governmental or other consents that may need to be obtained, and (iv) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale or transfer of the Interests. Such Subscriber’s subscription and payment for, and continued beneficial ownership of, the Interests will not violate any applicable securities or other laws of the Subscriber’s jurisdiction.
IV. NOTICE TO SUBSCRIBERS
4.1 THE INTERESTS HAVE BEEN QUALIFIED UNDER REGULATION A OF THE SECURITIES ACT OF 1933. THE INTERESTS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC, ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THE MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
4.2 FOR NON-U.S. RESIDENTS ONLY: NO ACTION HAS BEEN OR WILL BE TAKEN IN ANY JURISDICTION OUTSIDE THE UNITED STATES OF AMERICA THAT WOULD PERMIT AN OFFERING OF THESE SECURITIES, OR POSSESSION OR DISTRIBUTION OF OFFERING MATERIAL IN CONNECTION WITH THE ISSUE OF THESE SECURITIES, IN ANY COUNTRY OR JURISDICTION WHERE ACTION FOR THAT PURPOSE IS REQUIRED. IT IS THE RESPONSIBILITY OF ANY PERSON WISHING TO PURCHASE THESE SECURITIES TO SATISFY HIMSELF AS TO FULL OBSERVANCE OF THE LAWS OF ANY RELEVANT TERRITORY OUTSIDE THE UNTIED STATES OF AMERICA IN CONNECTION WITH ANY SUCH PURCHASE, INCLUDING OBTAINING ANY REQUIRED GOVERNMENTAL OR OTHER CONSENTS OR OBSERVING ANY OTHER APPLICABLE FORMALITIES.
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V. MISCELLANEOUS
5.1 Any notice or other communication given hereunder shall be deemed sufficient if in writing and sent by electronic mail, reputable overnight courier, facsimile (with receipt of confirmation) or registered or certified mail, return receipt requested, addressed to the Issuer, at the address set forth in the first paragraph hereof, Attention: MANAGER and to the Subscriber at the email address or address indicated on the signature page hereof. Notices shall be deemed to have been given on the date when mailed or sent by e-mail or overnight courier, except notices of change of address, which shall be deemed to have been given when received.
5.2 This Subscription Agreement shall not be changed, modified or amended except by a writing signed by the parties against whom such modification or amendment is to be charged, and this Subscription Agreement may not be discharged except by performance in accordance with its terms or by a writing signed by the party to be charged.
5.3 This Subscription Agreement shall be binding upon and inure to the benefit of the parties hereto and to their respective heirs, legal representatives, successors and assigns. This Subscription Agreement sets forth the entire agreement and understanding between the parties as to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings of any and every nature among them.
5.4 This Subscription Agreement may be executed in counterparts. Upon the execution and delivery of this Subscription Agreement by the Subscriber, this Subscription Agreement shall become a binding obligation of the Subscriber with respect to the purchase of Interests as herein provided; subject, however, to the right hereby reserved by the Issuer to (i) enter into the same agreements with other subscribers, (ii) add and/or delete other persons as subscribers and (iii) reduce the amount of or reject any subscription.
5.5 The holding of any provision of this Subscription Agreement to be invalid or unenforceable by a court of competent jurisdiction shall not affect any other provision of this Subscription Agreement, which shall remain in full force and effect.
5.6 It is agreed that a waiver by either party of a breach of any provision of this Subscription Agreement shall not operate or be construed as a waiver of any subsequent breach by that same party.
5.7 The parties agree to execute and deliver all such further documents, agreements and instruments and take such other and further actions as may be necessary or appropriate to carry out the purposes and intent of this Subscription Agreement.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties have executed this Subscription Agreement as of the day and year first written below.
Subscription Details:
| Number of Interests: | Price per Interest: | Aggregate Amount: |
| ________________ | $ 27.50 | $ ________________ |
Effective Date:
| Exact Name in Which Title is to be Held (As collected via the online form) | |
| Subscriber Name (Please Print) | |
| Residence: Number and Street | |
| City, State and Zip Code | |
| Telephone Number | |
| | |
| (Subscriber Signature) | |
| ACCEPTED BY SUBSCRIBER
AT ANY TIME PRIOR TO USE OF SUBSCRIPTION FUNDS BY THE ISSUER, THE MANAGER MAY RETURN THE TENDERED SUBSCRIPTION FUNDS TO THE SUBSCRIBER AND REJECT THE SUBSCRIPTION AGREEMENT. THE MANAGER HAS THIS RIGHT TO REJECTION PURSUANT TO SECTION 1.14 HEREIN. |
ACCEPTED AND ACKNOWLEDGED.
| SERIES MTG-BOX94, LLC a series of Mythic Collection, LLC a Delaware Limited Liability Company | |
| By: its Series Manager, Mythic Collection, LLC, a Delaware Series Limited Liability Company | |
| By: its Manager, Mythic Markets, Inc., a Delaware corporation | |
| Joe, Mahavuthivanij, Chief Executive Officer | |
| ACCEPTED BY ISSUER
AT ANY TIME PRIOR TO USE OF SUBSCRIPTION FUNDS BY THE ISSUER, THE MANAGER MAY RETURN THE TENDERED SUBSCRIPTION FUNDS TO THE SUBSCRIBER AND REJECT THE SUBSCRIPTION AGREEMENT. THE MANAGER HAS THIS RIGHT TO REJECTION PURSUANT TO SECTION 1.14 HEREIN. |
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Exhibit A
Issuer Operating Agreement
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Exhibit B
Series Agreement
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EXHIBIT 4.3
SUBSCRIPTION AGREEMENT
SUBSCRIPTION AGREEMENT (the “Subscription Agreement”) made as of the date set forth on the signature page hereof, by and between Series ART-GGMTG, LLC a series of Mythic Collection, LLC a Delaware Limited Liability Company (the “Issuer”), and the undersigned (the “Subscriber” or “You”).
WHEREAS, pursuant to the Offering Circular (the “Offering Circular”), the Issuer is offering in a Regulation A offering (the “Offering”) to investors up to 2,000 Interests (“Interests”) at a purchase price of $71.50 per Interest for a maximum aggregate purchase price of $143,000 (the “Maximum Offering”).
WHEREAS, the Subscriber desires to subscribe for the number and class of Interests set forth on the signature page hereof, on the terms and conditions hereinafter set forth.
NOW, THEREFORE, for and in consideration of the premises and the mutual covenants hereinafter set forth, the parties hereto do hereby agree as follows:
SUBSCRIPTION PROCEEDURES
In order to purchase Non-Voting Interests, you must take the following steps:
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| 1. | Visit MythicMarkets.com and sign up for a user account on Mythic Markets’ marketplace. |
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| 2. | Verify your email address and Log in to Mythic Markets’ marketplace. |
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| 3. | Click on “Marketplace” which will bring you to the offerings page which will display all the available opportunities to invest. |
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| 4. | Select “Learn more” on the offering you are interested in. |
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| 5. | Carefully read the Offering Circular, and any current supplement, as well as any documents described in the Offering Circular and attached hereto or which you have requested. Consult with your tax, legal and financial advisors to determine whether an investment in any of the Series Interests is suitable for you. |
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| 6. | If you are ready to invest, click the “Buy shares” button on the Offering Details page. |
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| 7. | Complete the KYC process by entering your name, address, date of birth, and social security number. All data is encrypted. |
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| 8. | Enter your banking information for ACH transfer to the offering’s escrow account and confirm your investment. |
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| 9. | Input the number of Non-Voting Interests that you would like to purchase. |
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| 10. | Review and sign the Subscription Agreement that will be sent to you via HelloSign. |
I. SUBSCRIPTION FOR AND REPRESENTATIONS AND COVENANTS OF SUBSCRIBER
1.1 Subject to the terms and conditions hereinafter set forth, the Subscriber hereby subscribes for and agrees to purchase from the Issuer the number of Interests set forth on the signature page hereof, at a price equal to $71.50 per Interest, and the Issuer agrees to sell such Interests to the Subscriber for said purchase price, subject to the Issuer’s right to sell to the Subscriber such lesser number of (or no) Interests as the Issuer may, in its sole discretion, deem necessary or desirable. The purchase price is payable by ACH to the Issuer.
1.2 The Subscriber has full power and authority to enter into and deliver this Subscription Agreement and to perform its/his/her obligations hereunder, and the execution, delivery and performance of this Subscription Agreement has been duly authorized, if applicable, and this Subscription Agreement constitutes a valid and legally binding obligation of the Subscriber.
1.3 The Subscriber acknowledges receipt of and agrees to, as appropriate, the Offering Circular, all supplements and exhibits to the Offering Circular, and all other documents furnished in connection with this transaction by the Issuer, including the Issuer Operating Agreement attached hereto as Exhibit A and the Series Agreement attached hereto as Exhibit B (collectively, the “Offering Documents”).
1.4 The Subscriber recognizes that the purchase of the Interests involves a high degree of risk in that (i) an investment in the Issuer is highly speculative and only investors who can afford the loss of their entire investment should consider investing in the Issuer and the Interests; (ii) the Interests are being sold pursuant to an exemption under Regulation A issued by the Securities and Exchange Commission (“SEC”) under the Securities Act of 1933, as amended (the “Act”), but they are not registered under the Act or any state securities law; (iii) there is only a limited trading market for the Interests, and there is no assurance that a more active one will ever develop, and thus, the Subscriber may not be able to liquidate his, her or its investment; and (iv) an investor could suffer the loss of his, her or its entire investment.
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1.5 The Subscriber is an “accredited investor,” as such term is defined in Rule 501 of Regulation D promulgated under the Act, and the Subscriber is able to bear the economic risk of an investment in the Interests OR the purchase price tendered by Subscriber does not exceed 10% of the greater of the Subscriber’s annual income or net worth.
1.6 The Subscriber is not relying on the Issuer or its affiliates or agents with respect to economic considerations involved in this investment. The Subscriber has relied on the advice of, or has consulted with, only his, her or its advisors, if any. Each advisor, if any, is capable of evaluating the merits and risks of an investment in the Interests as such are described in the Offering Circular, and each advisor, if any, has disclosed to the Subscriber in writing (a copy of which is annexed to this Subscription Agreement) the specific details of any and all past, present or future relationships, actual or contemplated, between the advisor and the Issuer.
1.7 The Subscriber has prior investment experience (including investment in non-listed and non-registered securities), has (together with his, her or its advisors, if any) such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of the prospective investment in the Interests and has read and evaluated, or has employed the services of an investment advisor, attorney or accountant to read and evaluate, all of the documents furnished or made available by the Issuer to the Subscriber, including the Offering Circular, as well as the merits and risks of such an investment by the Subscriber. The Subscriber’s overall commitment to investments, which are not readily marketable, is not disproportionate to the Subscriber’s net worth, and the Subscriber’s investment in the Interests will not cause such overall commitment to become excessive. The Subscriber, if an individual, has adequate means of providing for his or her current needs and personal and family contingencies and has no need for liquidity in his or her investment in the Interests. The Subscriber is financially able to bear the economic risk of this investment, including the ability to afford holding the Interests for an indefinite period or a complete loss of this investment. If other than an individual, the Subscriber also represents it has not been organized solely for the purpose of acquiring the Interests.
1.8 The Subscriber acknowledges that any estimates or forward-looking statements or projections included in the Offering Circular were prepared by the management of the Issuer in good faith, but that the attainment of any such projections, estimates or forward-looking statements cannot be guaranteed by the Issuer, its management or its affiliates and should not be relied upon.
1.9 The Subscriber acknowledges that the purchase of the Interests may involve tax consequences to the Subscriber and that the contents of the Offering Documents do not contain tax advice. The Subscriber acknowledges that the Subscriber must retain his, her or its own professional advisors to evaluate the tax and other consequences to the Subscriber of an investment in the Interests. The Subscriber acknowledges that it is the responsibility of the Subscriber to determine the appropriateness and the merits of a corporate entity to own the Subscriber’s Interests and the corporate structure of such entity.
1.10 The Subscriber acknowledges that the Offering Circular and this Offering have not been reviewed by any state securities commission, and that no federal or state agency has made any finding or determination regarding the fairness or merits of the Offering or confirmed the accuracy or determined the adequacy of the Offering Circular. Any representation to the contrary is a crime.
1.11 The Subscriber represents, warrants and agrees that the Interests are being purchased for his, her or its own beneficial account and not with a view toward distribution or resale to others. The Subscriber understands that the Issuer is under no obligation to register the Interests on his, her or its behalf or to assist them in complying with any exemption from registration under applicable state securities laws.
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1.12 The Subscriber understands that the Interests have not been registered under the Act by reason of a claimed exemption under the provisions of the Act which depends, in part, upon his, her or its investment intention. The Subscriber realizes that, in the view of the SEC, a purchase with an intent to resell would represent a purchase with an intent inconsistent with his, her or its representation to the Issuer, and the SEC might regard such a sale or disposition as a deferred sale, for which such exemption is not available. The Subscriber does not have any such intentions.
1.13 The Subscriber agrees to indemnify and hold the Issuer, its manager, and controlling persons and their respective heirs, representatives, successors and assigns harmless against all liabilities, costs and expenses incurred by them as a result of any misrepresentation made by the Subscriber herein or as a result of any sale or distribution by the Subscriber in violation of the Act (including, without limitation, the rules promulgated thereunder), any state securities laws, or the Issuer’s Restated Certificate of Organization, Operating Agreement, and Series Operating Agreement as amended from time to time.
1.14 The Subscriber understands that the Issuer will review and rely on this Subscription Agreement without making any independent investigation; and it is agreed that the Issuer reserves the unrestricted right to reject or limit any subscription and to withdraw the Offering at any time.
1.15 The Subscriber hereby represents that the address of the Subscriber furnished at the end of this Subscription Agreement is the Subscriber’s principal residence, if the Subscriber is an individual, or its principal business address, if it is a corporation or other entity.
1.16 The Subscriber acknowledges that if the Subscriber is a Registered Representative of a Financial Industry Regulatory Authority (“FINRA”) member firm, the Subscriber must give such firm the notice required by FINRA’s Conduct Rules, receipt of which must be acknowledged by such firm on the signature page hereof.
1.17 The Subscriber hereby acknowledges that neither the Issuer nor any persons associated with the Issuer who may provide assistance or advice in connection with the Offering are or are expected to be members or associated persons of members of FINRA or registered broker-dealers under any federal or state securities laws.
1.18 The Subscriber hereby represents that, except as expressly set forth in the Offering Documents, no representations or warranties have been made to the Subscriber by the Issuer or by any agent, sub-agent, officer, employee or affiliate of the Issuer and, in entering into this transaction, the Subscriber is not relying on any information other than that contained in the Offering Documents and the results of independent investigation by the Subscriber.
1.19 No oral or written representations have been made, or oral or written information furnished, to the Subscriber or his, her or its advisors, if any, in connection with the offering of the Interests which are in any way inconsistent with the information contained in the Offering Documents.
1.20 All information provided by the Subscriber is true and accurate in all respects, and the Subscriber acknowledges that the Issuer will be relying on such information to its possible detriment in deciding whether the Issuer can sell these securities to the Subscriber without giving rise to the loss of the exemption from registration under applicable securities laws.
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1.21 The Subscriber has taken no action which would give rise to any claim by any person for brokerage commissions, finders, fees or the like relating to this Subscription Agreement or the transactions contemplated hereby.
1.22 The Subscriber is not relying on the Issuer, or any of its employees, agents or sub-agents with respect to the legal, tax, economic and related considerations of an investment in the Interests, and the Subscriber has relied on the advice of, or has consulted with, only his, her or its own advisors, if any.
1.23 (For ERISA plans only) The fiduciary of the ERISA plan (the “Plan”) represents that such fiduciary has been informed of and understands the Issuer’s business objectives, policies and strategies, and that the decision to invest “plan assets” (as such term is defined in ERISA) in the Issuer is consistent with the provisions of ERISA that require diversification of plan assets and impose other fiduciary responsibilities. The subscriber or Plan fiduciary (a) is responsible for the decision to invest in the Issuer; (b) is independent of the Issuer and any of its affiliates; (c) is qualified to make such investment decision; and (d) in making such decision, the subscriber or Plan fiduciary has not relied primarily on any advice or recommendation of the Issuer or any of its affiliates or its agents.
1.24 The foregoing representations, warranties and agreements shall survive the Closing.
II. REPRESENTATIONS BY THE ISSUER
The Issuer represents and warrants to the Subscriber that as of the date of the closing of the Offering (the “Closing Date”):
2.1 The Issuer is a Series Limited Liability Company duly organized, validly existing and in good standing under the laws of the State of Delaware, authorized to do business in the State of Delaware and has the corporate power to conduct the business which it conducts and proposes to conduct.
2.2 The execution, delivery and performance of this Subscription Agreement by the Issuer have been duly authorized by the Issuer and all other corporate action required to authorize and consummate the offer and sale of the Interests has been duly taken and approved. This Subscription Agreement is valid, binding and enforceable against the Issuer in accordance with its terms; except as enforcement may be limited by bankruptcy, insolvency, moratorium or similar laws or by legal or equitable principles relating to or limiting creditors’ rights generally, the availability of equity remedies, or public policy as to the enforcement of certain provisions, such as indemnification provisions.
2.3 The Interests have been duly and validly authorized and issued.
2.4 The Issuer knows of no pending or threatened legal or governmental proceedings to which the Issuer is a party which would materially adversely affect the business, financial condition or operations of the Issuer.
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III. TERMS OF SUBSCRIPTION
3.1 Subject to Section 3.2 hereof, the subscription period will begin as of the date of the Offering Circular and will terminate at 11:59 PM Eastern Time, on the earlier of the date on which the Maximum Offering is sold or one (1) year from the commencement date or the date the Offering is terminated by the Issuer, such date not to exceed the date which is 18 months from the date the Offering Circular or amendment thereto, as applicable, is qualified by the SEC (the “Termination Date”).
3.2 The Subscriber has effected an ACH in the full amount of the purchase price for the Interests to the Issuer. Concurrent with the execution hereof, the Subscriber authorizes North Capital Private Securities Corporation, a Delaware corporation and a registered broker-dealer, member FINRA and SIPC, as escrow agent for the Company (the “Escrow Agent”), to request the subscription price from the Subscriber’s bank. The Company shall cause the Escrow Agent to maintain all such funds for the Subscriber’s benefit in a segregated non-interest-bearing account, in the name of North Capital Private Securities for further credit to “Series ART-GGMTG, LLC”, a Series of Mythic Collection LLC – [Investor Name],” until the earliest to occur of: (i) the Closing, (ii) the rejection of such subscription or (iii) the Termination Date.
3.3 Digital (“electronic”) signatures, often referred to as an “e-signature,” enable paperless contracts and help speed up business transactions. The 2001 E-Sign Act was meant to ease the adoption of electronic signatures.
You may execute this Subscription Agreement by providing one of the following: (i) your original, scanned or faxed signature; or (ii) your electronic signature, as prescribed in the bulleted paragraphs below.
* The mechanics of the electronic signature requested herein include your execution of this Subscription Agreement, the Series Operating Agreement and the Operating Agreement for the Company in a single signature block. By typing in your name, with the underlying software recording your IP address, your browser identification, the timestamp, and a security hash within an SSL encrypted environment, you will have accepted and agreed, without reservation, to all of the terms and conditions contained within this Subscription Agreement, the Series Operating Agreement and the Operating Agreement. Your electronically signed Agreements will be stored by the Company in such a manner that the Company can access them at any time.
* You hereby consent and agree that the electronic signature below constitutes your signature, acceptance and agreement of this Subscription Agreement, the Series Operating Agreement and the Operating Agreement as if each of these documents were actually signed by you in writing. Further, all parties agree that no certification authority or other third-party verification is necessary to validate any electronic signature; and that the lack of such certification or third-party verification will not in any way affect the enforceability of your signature or resulting contract between you and the Company. You understand and agree that your e-signature executed in conjunction with the electronic submission of this Subscription Agreement, the Series Operating Agreement and the Operating Agreement shall be legally binding and that such transaction has been authorized by you. You agree that your electronic signature below is the legal equivalent of your manual signature on this Subscription Agreement, the Series Operating Agreement and the Operating Agreement and that you consent to be legally bound by terms and conditions of such Agreements. The Subscription Agreement, the Series Operating Agreement and the Operating Agreement may be executed in counterparts and by electronic signature, each of which shall be deemed an original, but all of which shall constitute one and the same instrument.
* Furthermore, you hereby agree that all current and future notices, confirmations and other communications regarding this Subscription Agreement, the Series Operating Agreement and the Operating Agreement specifically, and/or future communications in general between the parties, may be made by email, sent to the email address of record as set forth in the vesting information below or as otherwise from time to time changed or updated and disclosed to the other party, without necessity of confirmation of receipt, delivery or reading, and such form of electronic communication is sufficient for all matters regarding the relationship between the parties. If any such electronically sent communication fails to be received for any reason, including but not limited to such communications being diverted to the recipients’ spam filters by the recipients’ email service provider, or due to a recipients’ change of address, or due to technology issues by the recipients’ service provider, the parties agree that the burden of such failure to receive is on the recipient and not the sender, and that the sender is under no obligation to resend communications via any other means, including but not limited to postal service or overnight courier, and that such communications shall for all purposes, including legal and regulatory, be deemed to have been delivered and received. No physical, paper documents will be sent to you, and if you desire physical documents then you agree to be satisfied by directly and personally printing, at your own expense, the electronically sent communication(s) and maintaining such physical records in any manner or form that you desire.
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* Your Consent is Hereby Given: By signing this Subscription Agreement, you are explicitly agreeing to receive documents electronically, including your copy of this signed Subscription Agreement, the Series Operating Agreement and the Operating Agreement, as well as ongoing disclosures, communications and notices.
* By signing this document, the Subscriber is agreeing to the Operating Agreement, the Series Operating Agreement and the Subscription Agreement and all provisions, clauses, representations, warranties, acknowledgments and covenants contained therein, each of which: (i) shall be binding on the heirs, executors, administrators, successors and permitted assigns of the undersigned, and (ii) may not be cancelled, withdrawn, revoked, or terminated by the undersigned except as set forth therein. If there is more than one signatory hereto, the representations, warranties, acknowledgments and agreements of the undersigned are made jointly and severally.
3.4 If the Subscriber is not a United States person, such Subscriber shall immediately notify the Issuer, and the Subscriber hereby represents that the Subscriber is satisfied as to the full observance of the laws of its jurisdiction in connection with any invitation to subscribe for the Interests or any use of this Subscription Agreement, including (i) the legal requirements within its jurisdiction for the purchase of the Interests, (ii) any foreign exchange restrictions applicable to such purchase, (iii) any governmental or other consents that may need to be obtained, and (iv) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale or transfer of the Interests. Such Subscriber’s subscription and payment for, and continued beneficial ownership of, the Interests will not violate any applicable securities or other laws of the Subscriber’s jurisdiction.
IV. NOTICE TO SUBSCRIBERS
4.1 THE INTERESTS HAVE BEEN QUALIFIED UNDER REGULATION A OF THE SECURITIES ACT OF 1933. THE INTERESTS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC, ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THE MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
4.2 FOR NON-U.S. RESIDENTS ONLY: NO ACTION HAS BEEN OR WILL BE TAKEN IN ANY JURISDICTION OUTSIDE THE UNITED STATES OF AMERICA THAT WOULD PERMIT AN OFFERING OF THESE SECURITIES, OR POSSESSION OR DISTRIBUTION OF OFFERING MATERIAL IN CONNECTION WITH THE ISSUE OF THESE SECURITIES, IN ANY COUNTRY OR JURISDICTION WHERE ACTION FOR THAT PURPOSE IS REQUIRED. IT IS THE RESPONSIBILITY OF ANY PERSON WISHING TO PURCHASE THESE SECURITIES TO SATISFY HIMSELF AS TO FULL OBSERVANCE OF THE LAWS OF ANY RELEVANT TERRITORY OUTSIDE THE UNTIED STATES OF AMERICA IN CONNECTION WITH ANY SUCH PURCHASE, INCLUDING OBTAINING ANY REQUIRED GOVERNMENTAL OR OTHER CONSENTS OR OBSERVING ANY OTHER APPLICABLE FORMALITIES.
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V. MISCELLANEOUS
5.1 Any notice or other communication given hereunder shall be deemed sufficient if in writing and sent by electronic mail, reputable overnight courier, facsimile (with receipt of confirmation) or registered or certified mail, return receipt requested, addressed to the Issuer, at the address set forth in the first paragraph hereof, Attention: MANAGER and to the Subscriber at the email address or address indicated on the signature page hereof. Notices shall be deemed to have been given on the date when mailed or sent by e-mail or overnight courier, except notices of change of address, which shall be deemed to have been given when received.
5.2 This Subscription Agreement shall not be changed, modified or amended except by a writing signed by the parties against whom such modification or amendment is to be charged, and this Subscription Agreement may not be discharged except by performance in accordance with its terms or by a writing signed by the party to be charged.
5.3 This Subscription Agreement shall be binding upon and inure to the benefit of the parties hereto and to their respective heirs, legal representatives, successors and assigns. This Subscription Agreement sets forth the entire agreement and understanding between the parties as to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings of any and every nature among them.
5.4 This Subscription Agreement may be executed in counterparts. Upon the execution and delivery of this Subscription Agreement by the Subscriber, this Subscription Agreement shall become a binding obligation of the Subscriber with respect to the purchase of Interests as herein provided; subject, however, to the right hereby reserved by the Issuer to (i) enter into the same agreements with other subscribers, (ii) add and/or delete other persons as subscribers and (iii) reduce the amount of or reject any subscription.
5.5 The holding of any provision of this Subscription Agreement to be invalid or unenforceable by a court of competent jurisdiction shall not affect any other provision of this Subscription Agreement, which shall remain in full force and effect.
5.6 It is agreed that a waiver by either party of a breach of any provision of this Subscription Agreement shall not operate or be construed as a waiver of any subsequent breach by that same party.
5.7 The parties agree to execute and deliver all such further documents, agreements and instruments and take such other and further actions as may be necessary or appropriate to carry out the purposes and intent of this Subscription Agreement.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties have executed this Subscription Agreement as of the day and year first written below.
Subscription Details:
| Number of Interests: | Price per Interest: | Aggregate Amount: |
| ________________ | $ 71.50 | $ ________________ |
Effective Date:
| Exact Name in Which Title is to be Held (As collected via the online form) | |
| Subscriber Name (Please Print) | |
| Residence: Number and Street | |
| City, State and Zip Code | |
| Telephone Number | |
| | |
| (Subscriber Signature) | |
| ACCEPTED BY SUBSCRIBER
AT ANY TIME PRIOR TO USE OF SUBSCRIPTION FUNDS BY THE ISSUER, THE MANAGER MAY RETURN THE TENDERED SUBSCRIPTION FUNDS TO THE SUBSCRIBER AND REJECT THE SUBSCRIPTION AGREEMENT. THE MANAGER HAS THIS RIGHT TO REJECTION PURSUANT TO SECTION 1.14 HEREIN. |
ACCEPTED AND ACKNOWLEDGED.
| SERIES ART-GGMTG, LLC a series of Mythic Collection, LLC a Delaware Limited Liability Company | |
| By: its Series Manager, Mythic Collection, LLC, a Delaware Series Limited Liability Company | |
| By: its Manager, Mythic Markets, Inc., a Delaware corporation | |
| Joe, Mahavuthivanij, Chief Executive Officer | |
| ACCEPTED BY ISSUER
AT ANY TIME PRIOR TO USE OF SUBSCRIPTION FUNDS BY THE ISSUER, THE MANAGER MAY RETURN THE TENDERED SUBSCRIPTION FUNDS TO THE SUBSCRIBER AND REJECT THE SUBSCRIPTION AGREEMENT. THE MANAGER HAS THIS RIGHT TO REJECTION PURSUANT TO SECTION 1.14 HEREIN. |
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Exhibit A
Issuer Operating Agreement
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Exhibit B
Series Agreement
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EXHIBIT 4.4
SUBSCRIPTION AGREEMENT
SUBSCRIPTION AGREEMENT (the “Subscription Agreement”) made as of the date set forth on the signature page hereof, by and between Series COM-AF157, LLC a series of Mythic Collection, LLC a Delaware Limited Liability Company (the “Issuer”), and the undersigned (the “Subscriber” or “You”).
WHEREAS, pursuant to the Offering Circular (the “Offering Circular”), the Issuer is offering in a Regulation A offering (the “Offering”) to investors up to 2,000 Interests (“Interests”) at a purchase price of $46.00 per Interest for a maximum aggregate purchase price of $92,000.00 (the “Maximum Offering”).
WHEREAS, the Subscriber desires to subscribe for the number and class of Interests set forth on the signature page hereof, on the terms and conditions hereinafter set forth.
NOW, THEREFORE, for and in consideration of the premises and the mutual covenants hereinafter set forth, the parties hereto do hereby agree as follows:
SUBSCRIPTION PROCEEDURES
In order to purchase Non-Voting Interests, you must take the following steps:
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| 1. | Visit MythicMarkets.com and sign up for a user account on Mythic Markets’ marketplace. |
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| 2. | Verify your email address and Log in to Mythic Markets’ marketplace. |
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| 3. | Click on “Marketplace” which will bring you to the offerings page which will display all the available opportunities to invest. |
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| 4. | Select “Learn more” on the offering you are interested in. |
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| 5. | Carefully read the Offering Circular, and any current supplement, as well as any documents described in the Offering Circular and attached hereto or which you have requested. Consult with your tax, legal and financial advisors to determine whether an investment in any of the Series Interests is suitable for you. |
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| 6. | If you are ready to invest, click the “Buy shares” button on the Offering Details page. |
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| 7. | Complete the KYC process by entering your name, address, date of birth, and social security number. All data is encrypted. |
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| 8. | Enter your banking information for ACH transfer to the offering’s escrow account and confirm your investment. |
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| 9. | Input the number of Non-Voting Interests that you would like to purchase. |
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| 10. | Review and sign the Subscription Agreement that will be sent to you via HelloSign. |
I. SUBSCRIPTION FOR AND REPRESENTATIONS AND COVENANTS OF SUBSCRIBER
1.1 Subject to the terms and conditions hereinafter set forth, the Subscriber hereby subscribes for and agrees to purchase from the Issuer the number of Interests set forth on the signature page hereof, at a price equal to $46.00 per Interest, and the Issuer agrees to sell such Interests to the Subscriber for said purchase price, subject to the Issuer’s right to sell to the Subscriber such lesser number of (or no) Interests as the Issuer may, in its sole discretion, deem necessary or desirable. The purchase price is payable by ACH to the Issuer.
1.2 The Subscriber has full power and authority to enter into and deliver this Subscription Agreement and to perform its/his/her obligations hereunder, and the execution, delivery and performance of this Subscription Agreement has been duly authorized, if applicable, and this Subscription Agreement constitutes a valid and legally binding obligation of the Subscriber.
1.3 The Subscriber acknowledges receipt of and agrees to, as appropriate, the Offering Circular, all supplements and exhibits to the Offering Circular, and all other documents furnished in connection with this transaction by the Issuer, including the Issuer Operating Agreement attached hereto as Exhibit A and the Series Agreement attached hereto as Exhibit B (collectively, the “Offering Documents”).
1.4 The Subscriber recognizes that the purchase of the Interests involves a high degree of risk in that (i) an investment in the Issuer is highly speculative and only investors who can afford the loss of their entire investment should consider investing in the Issuer and the Interests; (ii) the Interests are being sold pursuant to an exemption under Regulation A issued by the Securities and Exchange Commission (“SEC”) under the Securities Act of 1933, as amended (the “Act”), but they are not registered under the Act or any state securities law; (iii) there is only a limited trading market for the Interests, and there is no assurance that a more active one will ever develop, and thus, the Subscriber may not be able to liquidate his, her or its investment; and (iv) an investor could suffer the loss of his, her or its entire investment.
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1.5 The Subscriber is an “accredited investor,” as such term is defined in Rule 501 of Regulation D promulgated under the Act, and the Subscriber is able to bear the economic risk of an investment in the Interests OR the purchase price tendered by Subscriber does not exceed 10% of the greater of the Subscriber’s annual income or net worth.
1.6 The Subscriber is not relying on the Issuer or its affiliates or agents with respect to economic considerations involved in this investment. The Subscriber has relied on the advice of, or has consulted with, only his, her or its advisors, if any. Each advisor, if any, is capable of evaluating the merits and risks of an investment in the Interests as such are described in the Offering Circular, and each advisor, if any, has disclosed to the Subscriber in writing (a copy of which is annexed to this Subscription Agreement) the specific details of any and all past, present or future relationships, actual or contemplated, between the advisor and the Issuer.
1.7 The Subscriber has prior investment experience (including investment in non-listed and non-registered securities), has (together with his, her or its advisors, if any) such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of the prospective investment in the Interests and has read and evaluated, or has employed the services of an investment advisor, attorney or accountant to read and evaluate, all of the documents furnished or made available by the Issuer to the Subscriber, including the Offering Circular, as well as the merits and risks of such an investment by the Subscriber. The Subscriber’s overall commitment to investments, which are not readily marketable, is not disproportionate to the Subscriber’s net worth, and the Subscriber’s investment in the Interests will not cause such overall commitment to become excessive. The Subscriber, if an individual, has adequate means of providing for his or her current needs and personal and family contingencies and has no need for liquidity in his or her investment in the Interests. The Subscriber is financially able to bear the economic risk of this investment, including the ability to afford holding the Interests for an indefinite period or a complete loss of this investment. If other than an individual, the Subscriber also represents it has not been organized solely for the purpose of acquiring the Interests.
1.8 The Subscriber acknowledges that any estimates or forward-looking statements or projections included in the Offering Circular were prepared by the management of the Issuer in good faith, but that the attainment of any such projections, estimates or forward-looking statements cannot be guaranteed by the Issuer, its management or its affiliates and should not be relied upon.
1.9 The Subscriber acknowledges that the purchase of the Interests may involve tax consequences to the Subscriber and that the contents of the Offering Documents do not contain tax advice. The Subscriber acknowledges that the Subscriber must retain his, her or its own professional advisors to evaluate the tax and other consequences to the Subscriber of an investment in the Interests. The Subscriber acknowledges that it is the responsibility of the Subscriber to determine the appropriateness and the merits of a corporate entity to own the Subscriber’s Interests and the corporate structure of such entity.
1.10 The Subscriber acknowledges that the Offering Circular and this Offering have not been reviewed by any state securities commission, and that no federal or state agency has made any finding or determination regarding the fairness or merits of the Offering or confirmed the accuracy or determined the adequacy of the Offering Circular. Any representation to the contrary is a crime.
1.11 The Subscriber represents, warrants and agrees that the Interests are being purchased for his, her or its own beneficial account and not with a view toward distribution or resale to others. The Subscriber understands that the Issuer is under no obligation to register the Interests on his, her or its behalf or to assist them in complying with any exemption from registration under applicable state securities laws.
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1.12 The Subscriber understands that the Interests have not been registered under the Act by reason of a claimed exemption under the provisions of the Act which depends, in part, upon his, her or its investment intention. The Subscriber realizes that, in the view of the SEC, a purchase with an intent to resell would represent a purchase with an intent inconsistent with his, her or its representation to the Issuer, and the SEC might regard such a sale or disposition as a deferred sale, for which such exemption is not available. The Subscriber does not have any such intentions.
1.13 The Subscriber agrees to indemnify and hold the Issuer, its manager, and controlling persons and their respective heirs, representatives, successors and assigns harmless against all liabilities, costs and expenses incurred by them as a result of any misrepresentation made by the Subscriber herein or as a result of any sale or distribution by the Subscriber in violation of the Act (including, without limitation, the rules promulgated thereunder), any state securities laws, or the Issuer’s Restated Certificate of Organization, Operating Agreement, and Series Operating Agreement as amended from time to time.
1.14 The Subscriber understands that the Issuer will review and rely on this Subscription Agreement without making any independent investigation; and it is agreed that the Issuer reserves the unrestricted right to reject or limit any subscription and to withdraw the Offering at any time.
1.15 The Subscriber hereby represents that the address of the Subscriber furnished at the end of this Subscription Agreement is the Subscriber’s principal residence, if the Subscriber is an individual, or its principal business address, if it is a corporation or other entity.
1.16 The Subscriber acknowledges that if the Subscriber is a Registered Representative of a Financial Industry Regulatory Authority (“FINRA”) member firm, the Subscriber must give such firm the notice required by FINRA’s Conduct Rules, receipt of which must be acknowledged by such firm on the signature page hereof.
1.17 The Subscriber hereby acknowledges that neither the Issuer nor any persons associated with the Issuer who may provide assistance or advice in connection with the Offering are or are expected to be members or associated persons of members of FINRA or registered broker-dealers under any federal or state securities laws.
1.18 The Subscriber hereby represents that, except as expressly set forth in the Offering Documents, no representations or warranties have been made to the Subscriber by the Issuer or by any agent, sub-agent, officer, employee or affiliate of the Issuer and, in entering into this transaction, the Subscriber is not relying on any information other than that contained in the Offering Documents and the results of independent investigation by the Subscriber.
1.19 No oral or written representations have been made, or oral or written information furnished, to the Subscriber or his, her or its advisors, if any, in connection with the offering of the Interests which are in any way inconsistent with the information contained in the Offering Documents.
1.20 All information provided by the Subscriber is true and accurate in all respects, and the Subscriber acknowledges that the Issuer will be relying on such information to its possible detriment in deciding whether the Issuer can sell these securities to the Subscriber without giving rise to the loss of the exemption from registration under applicable securities laws.
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1.21 The Subscriber has taken no action which would give rise to any claim by any person for brokerage commissions, finders, fees or the like relating to this Subscription Agreement or the transactions contemplated hereby.
1.22 The Subscriber is not relying on the Issuer, or any of its employees, agents or sub-agents with respect to the legal, tax, economic and related considerations of an investment in the Interests, and the Subscriber has relied on the advice of, or has consulted with, only his, her or its own advisors, if any.
1.23 (For ERISA plans only) The fiduciary of the ERISA plan (the “Plan”) represents that such fiduciary has been informed of and understands the Issuer’s business objectives, policies and strategies, and that the decision to invest “plan assets” (as such term is defined in ERISA) in the Issuer is consistent with the provisions of ERISA that require diversification of plan assets and impose other fiduciary responsibilities. The subscriber or Plan fiduciary (a) is responsible for the decision to invest in the Issuer; (b) is independent of the Issuer and any of its affiliates; (c) is qualified to make such investment decision; and (d) in making such decision, the subscriber or Plan fiduciary has not relied primarily on any advice or recommendation of the Issuer or any of its affiliates or its agents.
1.24 The foregoing representations, warranties and agreements shall survive the Closing.
II. REPRESENTATIONS BY THE ISSUER
The Issuer represents and warrants to the Subscriber that as of the date of the closing of the Offering (the “Closing Date”):
2.1 The Issuer is a Series Limited Liability Company duly organized, validly existing and in good standing under the laws of the State of Delaware, authorized to do business in the State of Delaware and has the corporate power to conduct the business which it conducts and proposes to conduct.
2.2 The execution, delivery and performance of this Subscription Agreement by the Issuer have been duly authorized by the Issuer and all other corporate action required to authorize and consummate the offer and sale of the Interests has been duly taken and approved. This Subscription Agreement is valid, binding and enforceable against the Issuer in accordance with its terms; except as enforcement may be limited by bankruptcy, insolvency, moratorium or similar laws or by legal or equitable principles relating to or limiting creditors’ rights generally, the availability of equity remedies, or public policy as to the enforcement of certain provisions, such as indemnification provisions.
2.3 The Interests have been duly and validly authorized and issued.
2.4 The Issuer knows of no pending or threatened legal or governmental proceedings to which the Issuer is a party which would materially adversely affect the business, financial condition or operations of the Issuer.
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III. TERMS OF SUBSCRIPTION
3.1 Subject to Section 3.2 hereof, the subscription period will begin as of the date of the Offering Circular and will terminate at 11:59 PM Eastern Time, on the earlier of the date on which the Maximum Offering is sold or one (1) year from the commencement date or the date the Offering is terminated by the Issuer, such date not to exceed the date which is 18 months from the date the Offering Circular or amendment thereto, as applicable, is qualified by the SEC (the “Termination Date”).
3.2 The Subscriber has effected an ACH in the full amount of the purchase price for the Interests to the Issuer. Concurrent with the execution hereof, the Subscriber authorizes North Capital Private Securities Corporation, a Delaware corporation and a registered broker-dealer, member FINRA and SIPC, as escrow agent for the Company (the “Escrow Agent”), to request the subscription price from the Subscriber’s bank. The Company shall cause the Escrow Agent to maintain all such funds for the Subscriber’s benefit in a segregated non-interest-bearing account, in the name of North Capital Private Securities for further credit to “Series COM-AF157, LLC”, a Series of Mythic Collection LLC – [Investor Name],” until the earliest to occur of: (i) the Closing, (ii) the rejection of such subscription or (iii) the Termination Date.
3.3 Digital (“electronic”) signatures, often referred to as an “e-signature,” enable paperless contracts and help speed up business transactions. The 2001 E-Sign Act was meant to ease the adoption of electronic signatures.
You may execute this Subscription Agreement by providing one of the following: (i) your original, scanned or faxed signature; or (ii) your electronic signature, as prescribed in the bulleted paragraphs below.
* The mechanics of the electronic signature requested herein include your execution of this Subscription Agreement, the Series Operating Agreement and the Operating Agreement for the Company in a single signature block. By typing in your name, with the underlying software recording your IP address, your browser identification, the timestamp, and a security hash within an SSL encrypted environment, you will have accepted and agreed, without reservation, to all of the terms and conditions contained within this Subscription Agreement, the Series Operating Agreement and the Operating Agreement. Your electronically signed Agreements will be stored by the Company in such a manner that the Company can access them at any time.
* You hereby consent and agree that the electronic signature below constitutes your signature, acceptance and agreement of this Subscription Agreement, the Series Operating Agreement and the Operating Agreement as if each of these documents were actually signed by you in writing. Further, all parties agree that no certification authority or other third-party verification is necessary to validate any electronic signature; and that the lack of such certification or third-party verification will not in any way affect the enforceability of your signature or resulting contract between you and the Company. You understand and agree that your e-signature executed in conjunction with the electronic submission of this Subscription Agreement, the Series Operating Agreement and the Operating Agreement shall be legally binding and that such transaction has been authorized by you. You agree that your electronic signature below is the legal equivalent of your manual signature on this Subscription Agreement, the Series Operating Agreement and the Operating Agreement and that you consent to be legally bound by terms and conditions of such Agreements. The Subscription Agreement, the Series Operating Agreement and the Operating Agreement may be executed in counterparts and by electronic signature, each of which shall be deemed an original, but all of which shall constitute one and the same instrument.
* Furthermore, you hereby agree that all current and future notices, confirmations and other communications regarding this Subscription Agreement, the Series Operating Agreement and the Operating Agreement specifically, and/or future communications in general between the parties, may be made by email, sent to the email address of record as set forth in the vesting information below or as otherwise from time to time changed or updated and disclosed to the other party, without necessity of confirmation of receipt, delivery or reading, and such form of electronic communication is sufficient for all matters regarding the relationship between the parties. If any such electronically sent communication fails to be received for any reason, including but not limited to such communications being diverted to the recipients’ spam filters by the recipients’ email service provider, or due to a recipients’ change of address, or due to technology issues by the recipients’ service provider, the parties agree that the burden of such failure to receive is on the recipient and not the sender, and that the sender is under no obligation to resend communications via any other means, including but not limited to postal service or overnight courier, and that such communications shall for all purposes, including legal and regulatory, be deemed to have been delivered and received. No physical, paper documents will be sent to you, and if you desire physical documents then you agree to be satisfied by directly and personally printing, at your own expense, the electronically sent communication(s) and maintaining such physical records in any manner or form that you desire.
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* Your Consent is Hereby Given: By signing this Subscription Agreement, you are explicitly agreeing to receive documents electronically, including your copy of this signed Subscription Agreement, the Series Operating Agreement and the Operating Agreement, as well as ongoing disclosures, communications and notices.
* By signing this document, the Subscriber is agreeing to the Operating Agreement, the Series Operating Agreement and the Subscription Agreement and all provisions, clauses, representations, warranties, acknowledgments and covenants contained therein, each of which: (i) shall be binding on the heirs, executors, administrators, successors and permitted assigns of the undersigned, and (ii) may not be cancelled, withdrawn, revoked, or terminated by the undersigned except as set forth therein. If there is more than one signatory hereto, the representations, warranties, acknowledgments and agreements of the undersigned are made jointly and severally.
3.4 If the Subscriber is not a United States person, such Subscriber shall immediately notify the Issuer, and the Subscriber hereby represents that the Subscriber is satisfied as to the full observance of the laws of its jurisdiction in connection with any invitation to subscribe for the Interests or any use of this Subscription Agreement, including (i) the legal requirements within its jurisdiction for the purchase of the Interests, (ii) any foreign exchange restrictions applicable to such purchase, (iii) any governmental or other consents that may need to be obtained, and (iv) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale or transfer of the Interests. Such Subscriber’s subscription and payment for, and continued beneficial ownership of, the Interests will not violate any applicable securities or other laws of the Subscriber’s jurisdiction.
IV. NOTICE TO SUBSCRIBERS
4.1 THE INTERESTS HAVE BEEN QUALIFIED UNDER REGULATION A OF THE SECURITIES ACT OF 1933. THE INTERESTS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC, ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THE MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
4.2 FOR NON-U.S. RESIDENTS ONLY: NO ACTION HAS BEEN OR WILL BE TAKEN IN ANY JURISDICTION OUTSIDE THE UNITED STATES OF AMERICA THAT WOULD PERMIT AN OFFERING OF THESE SECURITIES, OR POSSESSION OR DISTRIBUTION OF OFFERING MATERIAL IN CONNECTION WITH THE ISSUE OF THESE SECURITIES, IN ANY COUNTRY OR JURISDICTION WHERE ACTION FOR THAT PURPOSE IS REQUIRED. IT IS THE RESPONSIBILITY OF ANY PERSON WISHING TO PURCHASE THESE SECURITIES TO SATISFY HIMSELF AS TO FULL OBSERVANCE OF THE LAWS OF ANY RELEVANT TERRITORY OUTSIDE THE UNTIED STATES OF AMERICA IN CONNECTION WITH ANY SUCH PURCHASE, INCLUDING OBTAINING ANY REQUIRED GOVERNMENTAL OR OTHER CONSENTS OR OBSERVING ANY OTHER APPLICABLE FORMALITIES.
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V. MISCELLANEOUS
5.1 Any notice or other communication given hereunder shall be deemed sufficient if in writing and sent by electronic mail, reputable overnight courier, facsimile (with receipt of confirmation) or registered or certified mail, return receipt requested, addressed to the Issuer, at the address set forth in the first paragraph hereof, Attention: MANAGER and to the Subscriber at the email address or address indicated on the signature page hereof. Notices shall be deemed to have been given on the date when mailed or sent by e-mail or overnight courier, except notices of change of address, which shall be deemed to have been given when received.
5.2 This Subscription Agreement shall not be changed, modified or amended except by a writing signed by the parties against whom such modification or amendment is to be charged, and this Subscription Agreement may not be discharged except by performance in accordance with its terms or by a writing signed by the party to be charged.
5.3 This Subscription Agreement shall be binding upon and inure to the benefit of the parties hereto and to their respective heirs, legal representatives, successors and assigns. This Subscription Agreement sets forth the entire agreement and understanding between the parties as to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings of any and every nature among them.
5.4 This Subscription Agreement may be executed in counterparts. Upon the execution and delivery of this Subscription Agreement by the Subscriber, this Subscription Agreement shall become a binding obligation of the Subscriber with respect to the purchase of Interests as herein provided; subject, however, to the right hereby reserved by the Issuer to (i) enter into the same agreements with other subscribers, (ii) add and/or delete other persons as subscribers and (iii) reduce the amount of or reject any subscription.
5.5 The holding of any provision of this Subscription Agreement to be invalid or unenforceable by a court of competent jurisdiction shall not affect any other provision of this Subscription Agreement, which shall remain in full force and effect.
5.6 It is agreed that a waiver by either party of a breach of any provision of this Subscription Agreement shall not operate or be construed as a waiver of any subsequent breach by that same party.
5.7 The parties agree to execute and deliver all such further documents, agreements and instruments and take such other and further actions as may be necessary or appropriate to carry out the purposes and intent of this Subscription Agreement.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties have executed this Subscription Agreement as of the day and year first written below.
Subscription Details:
| Number of Interests: | Price per Interest: | Aggregate Amount: |
| _______________________ | $ 46.00 | $ _______________________ |
Effective Date:
| Exact Name in Which Title is to be Held (As collected via the online form) | |
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| Subscriber Name (Please Print) | |
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| Residence: Number and Street | |
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| City, State and Zip Code | |
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| Telephone Number | |
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| (Subscriber Signature) | |
| ACCEPTED BY SUBSCRIBER
AT ANY TIME PRIOR TO USE OF SUBSCRIPTION FUNDS BY THE ISSUER, THE MANAGER MAY RETURN THE TENDERED SUBSCRIPTION FUNDS TO THE SUBSCRIBER AND REJECT THE SUBSCRIPTION AGREEMENT. THE MANAGER HAS THIS RIGHT TO REJECTION PURSUANT TO SECTION 1.14 HEREIN. |
ACCEPTED AND ACKNOWLEDGED.
| SERIES COM-AF157, LLC a series of Mythic Collection, LLC a Delaware Limited Liability Company | |
| By: its Series Manager, Mythic Collection, LLC, a Delaware Series Limited Liability Company | |
| By: its Manager, Mythic Markets, Inc., a Delaware corporation | |
| Joe, Mahavuthivanij, Chief Executive Officer | |
| ACCEPTED BY ISSUER
AT ANY TIME PRIOR TO USE OF SUBSCRIPTION FUNDS BY THE ISSUER, THE MANAGER MAY RETURN THE TENDERED SUBSCRIPTION FUNDS TO THE SUBSCRIBER AND REJECT THE SUBSCRIPTION AGREEMENT. THE MANAGER HAS THIS RIGHT TO REJECTION PURSUANT TO SECTION 1.14 HEREIN. |
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Exhibit A
Issuer Operating Agreement
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Exhibit B
Series Agreement
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EXHIBIT 4.5
SUBSCRIPTION AGREEMENT
SUBSCRIPTION AGREEMENT (the “Subscription Agreement”) made as of the date set forth on the signature page hereof, by and between Series ART-BHERO, LLC a series of Mythic Collection, LLC a Delaware Limited Liability Company (the “Issuer”), and the undersigned (the “Subscriber” or “You”).
WHEREAS, pursuant to the Offering Circular (the “Offering Circular”), the Issuer is offering in a Regulation A offering (the “Offering”) to investors up to 1,000 Interests (“Interests”) at a purchase price of $42.00 per Interest for a maximum aggregate purchase price of $42,000 (the “Maximum Offering”).
WHEREAS, the Subscriber desires to subscribe for the number and class of Interests set forth on the signature page hereof, on the terms and conditions hereinafter set forth.
NOW, THEREFORE, for and in consideration of the premises and the mutual covenants hereinafter set forth, the parties hereto do hereby agree as follows:
SUBSCRIPTION PROCEEDURES
In order to purchase Non-Voting Interests, you must take the following steps:
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| 1. | Visit MythicMarkets.com and sign up for a user account on Mythic Markets’ marketplace. |
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| 2. | Verify your email address and Log in to Mythic Markets’ marketplace. |
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| 3. | Click on “Marketplace” which will bring you to the offerings page which will display all the available opportunities to invest. |
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| 4. | Select “Learn more” on the offering you are interested in. |
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| 5. | Carefully read the Offering Circular, and any current supplement, as well as any documents described in the Offering Circular and attached hereto or which you have requested. Consult with your tax, legal and financial advisors to determine whether an investment in any of the Series Interests is suitable for you. |
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| 6. | If you are ready to invest, click the “Buy shares” button on the Offering Details page. |
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| 7. | Complete the KYC process by entering your name, address, date of birth, and social security number. All data is encrypted. |
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| 8. | Enter your banking information for ACH transfer to the offering’s escrow account and confirm your investment. |
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| 9. | Input the number of Non-Voting Interests that you would like to purchase. |
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| 10. | Review and sign the Subscription Agreement that will be sent to you via HelloSign. |
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I. SUBSCRIPTION FOR AND REPRESENTATIONS AND COVENANTS OF SUBSCRIBER
1.1 Subject to the terms and conditions hereinafter set forth, the Subscriber hereby subscribes for and agrees to purchase from the Issuer the number of Interests set forth on the signature page hereof, at a price equal to $42.00 per Interest, and the Issuer agrees to sell such Interests to the Subscriber for said purchase price, subject to the Issuer’s right to sell to the Subscriber such lesser number of (or no) Interests as the Issuer may, in its sole discretion, deem necessary or desirable. The purchase price is payable by ACH to the Issuer.
1.2 The Subscriber has full power and authority to enter into and deliver this Subscription Agreement and to perform its/his/her obligations hereunder, and the execution, delivery and performance of this Subscription Agreement has been duly authorized, if applicable, and this Subscription Agreement constitutes a valid and legally binding obligation of the Subscriber.
1.3 The Subscriber acknowledges receipt of and agrees to, as appropriate, the Offering Circular, all supplements and exhibits to the Offering Circular, and all other documents furnished in connection with this transaction by the Issuer, including the Issuer Operating Agreement attached hereto as Exhibit A and the Series Agreement attached hereto as Exhibit B (collectively, the “Offering Documents”).
1.4 The Subscriber recognizes that the purchase of the Interests involves a high degree of risk in that (i) an investment in the Issuer is highly speculative and only investors who can afford the loss of their entire investment should consider investing in the Issuer and the Interests; (ii) the Interests are being sold pursuant to an exemption under Regulation A issued by the Securities and Exchange Commission (“SEC”) under the Securities Act of 1933, as amended (the “Act”), but they are not registered under the Act or any state securities law; (iii) there is only a limited trading market for the Interests, and there is no assurance that a more active one will ever develop, and thus, the Subscriber may not be able to liquidate his, her or its investment; and (iv) an investor could suffer the loss of his, her or its entire investment.
1.5 The Subscriber is an “accredited investor,” as such term is defined in Rule 501 of Regulation D promulgated under the Act, and the Subscriber is able to bear the economic risk of an investment in the Interests OR the purchase price tendered by Subscriber does not exceed 10% of the greater of the Subscriber’s annual income or net worth.
1.6 The Subscriber is not relying on the Issuer or its affiliates or agents with respect to economic considerations involved in this investment. The Subscriber has relied on the advice of, or has consulted with, only his, her or its advisors, if any. Each advisor, if any, is capable of evaluating the merits and risks of an investment in the Interests as such are described in the Offering Circular, and each advisor, if any, has disclosed to the Subscriber in writing (a copy of which is annexed to this Subscription Agreement) the specific details of any and all past, present or future relationships, actual or contemplated, between the advisor and the Issuer.
1.7 The Subscriber has prior investment experience (including investment in non-listed and non-registered securities), has (together with his, her or its advisors, if any) such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of the prospective investment in the Interests and has read and evaluated, or has employed the services of an investment advisor, attorney or accountant to read and evaluate, all of the documents furnished or made available by the Issuer to the Subscriber, including the Offering Circular, as well as the merits and risks of such an investment by the Subscriber. The Subscriber’s overall commitment to investments, which are not readily marketable, is not disproportionate to the Subscriber’s net worth, and the Subscriber’s investment in the Interests will not cause such overall commitment to become excessive. The Subscriber, if an individual, has adequate means of providing for his or her current needs and personal and family contingencies and has no need for liquidity in his or her investment in the Interests. The Subscriber is financially able to bear the economic risk of this investment, including the ability to afford holding the Interests for an indefinite period or a complete loss of this investment. If other than an individual, the Subscriber also represents it has not been organized solely for the purpose of acquiring the Interests.
1.8 The Subscriber acknowledges that any estimates or forward-looking statements or projections included in the Offering Circular were prepared by the management of the Issuer in good faith, but that the attainment of any such projections, estimates or forward-looking statements cannot be guaranteed by the Issuer, its management or its affiliates and should not be relied upon.
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1.9 The Subscriber acknowledges that the purchase of the Interests may involve tax consequences to the Subscriber and that the contents of the Offering Documents do not contain tax advice. The Subscriber acknowledges that the Subscriber must retain his, her or its own professional advisors to evaluate the tax and other consequences to the Subscriber of an investment in the Interests. The Subscriber acknowledges that it is the responsibility of the Subscriber to determine the appropriateness and the merits of a corporate entity to own the Subscriber’s Interests and the corporate structure of such entity.
1.10 The Subscriber acknowledges that the Offering Circular and this Offering have not been reviewed by any state securities commission, and that no federal or state agency has made any finding or determination regarding the fairness or merits of the Offering or confirmed the accuracy or determined the adequacy of the Offering Circular. Any representation to the contrary is a crime.
1.11 The Subscriber represents, warrants and agrees that the Interests are being purchased for his, her or its own beneficial account and not with a view toward distribution or resale to others. The Subscriber understands that the Issuer is under no obligation to register the Interests on his, her or its behalf or to assist them in complying with any exemption from registration under applicable state securities laws.
1.12 The Subscriber understands that the Interests have not been registered under the Act by reason of a claimed exemption under the provisions of the Act which depends, in part, upon his, her or its investment intention. The Subscriber realizes that, in the view of the SEC, a purchase with an intent to resell would represent a purchase with an intent inconsistent with his, her or its representation to the Issuer, and the SEC might regard such a sale or disposition as a deferred sale, for which such exemption is not available. The Subscriber does not have any such intentions.
1.13 The Subscriber agrees to indemnify and hold the Issuer, its manager, and controlling persons and their respective heirs, representatives, successors and assigns harmless against all liabilities, costs and expenses incurred by them as a result of any misrepresentation made by the Subscriber herein or as a result of any sale or distribution by the Subscriber in violation of the Act (including, without limitation, the rules promulgated thereunder), any state securities laws, or the Issuer’s Restated Certificate of Organization, Operating Agreement, and Series Operating Agreement as amended from time to time.
1.14 The Subscriber understands that the Issuer will review and rely on this Subscription Agreement without making any independent investigation; and it is agreed that the Issuer reserves the unrestricted right to reject or limit any subscription and to withdraw the Offering at any time.
1.15 The Subscriber hereby represents that the address of the Subscriber furnished at the end of this Subscription Agreement is the Subscriber’s principal residence, if the Subscriber is an individual, or its principal business address, if it is a corporation or other entity.
1.16 The Subscriber acknowledges that if the Subscriber is a Registered Representative of a Financial Industry Regulatory Authority (“FINRA”) member firm, the Subscriber must give such firm the notice required by FINRA’s Conduct Rules, receipt of which must be acknowledged by such firm on the signature page hereof.
1.17 The Subscriber hereby acknowledges that neither the Issuer nor any persons associated with the Issuer who may provide assistance or advice in connection with the Offering are or are expected to be members or associated persons of members of FINRA or registered broker-dealers under any federal or state securities laws.
1.18 The Subscriber hereby represents that, except as expressly set forth in the Offering Documents, no representations or warranties have been made to the Subscriber by the Issuer or by any agent, sub-agent, officer, employee or affiliate of the Issuer and, in entering into this transaction, the Subscriber is not relying on any information other than that contained in the Offering Documents and the results of independent investigation by the Subscriber.
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1.19 No oral or written representations have been made, or oral or written information furnished, to the Subscriber or his, her or its advisors, if any, in connection with the offering of the Interests which are in any way inconsistent with the information contained in the Offering Documents.
1.20 All information provided by the Subscriber is true and accurate in all respects, and the Subscriber acknowledges that the Issuer will be relying on such information to its possible detriment in deciding whether the Issuer can sell these securities to the Subscriber without giving rise to the loss of the exemption from registration under applicable securities laws.
1.21 The Subscriber has taken no action which would give rise to any claim by any person for brokerage commissions, finders, fees or the like relating to this Subscription Agreement or the transactions contemplated hereby.
1.22 The Subscriber is not relying on the Issuer, or any of its employees, agents or sub-agents with respect to the legal, tax, economic and related considerations of an investment in the Interests, and the Subscriber has relied on the advice of, or has consulted with, only his, her or its own advisors, if any.
1.23 (For ERISA plans only) The fiduciary of the ERISA plan (the “Plan”) represents that such fiduciary has been informed of and understands the Issuer’s business objectives, policies and strategies, and that the decision to invest “plan assets” (as such term is defined in ERISA) in the Issuer is consistent with the provisions of ERISA that require diversification of plan assets and impose other fiduciary responsibilities. The subscriber or Plan fiduciary (a) is responsible for the decision to invest in the Issuer; (b) is independent of the Issuer and any of its affiliates; (c) is qualified to make such investment decision; and (d) in making such decision, the subscriber or Plan fiduciary has not relied primarily on any advice or recommendation of the Issuer or any of its affiliates or its agents.
1.24 The foregoing representations, warranties and agreements shall survive the Closing.
II. REPRESENTATIONS BY THE ISSUER
The Issuer represents and warrants to the Subscriber that as of the date of the closing of the Offering (the “Closing Date”):
2.1 The Issuer is a Series Limited Liability Company duly organized, validly existing and in good standing under the laws of the State of Delaware, authorized to do business in the State of Delaware and has the corporate power to conduct the business which it conducts and proposes to conduct.
2.2 The execution, delivery and performance of this Subscription Agreement by the Issuer have been duly authorized by the Issuer and all other corporate action required to authorize and consummate the offer and sale of the Interests has been duly taken and approved. This Subscription Agreement is valid, binding and enforceable against the Issuer in accordance with its terms; except as enforcement may be limited by bankruptcy, insolvency, moratorium or similar laws or by legal or equitable principles relating to or limiting creditors’ rights generally, the availability of equity remedies, or public policy as to the enforcement of certain provisions, such as indemnification provisions.
2.3 The Interests have been duly and validly authorized and issued.
2.4 The Issuer knows of no pending or threatened legal or governmental proceedings to which the Issuer is a party which would materially adversely affect the business, financial condition or operations of the Issuer.
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III. TERMS OF SUBSCRIPTION
3.1 Subject to Section 3.2 hereof, the subscription period will begin as of the date of the Offering Circular and will terminate at 11:59 PM Eastern Time, on the earlier of the date on which the Maximum Offering is sold or one (1) year from the commencement date or the date the Offering is terminated by the Issuer, such date not to exceed the date which is 18 months from the date the Offering Circular or amendment thereto, as applicable, is qualified by the SEC (the “Termination Date”).
3.2 The Subscriber has effected an ACH in the full amount of the purchase price for the Interests to the Issuer. Concurrent with the execution hereof, the Subscriber authorizes North Capital Private Securities Corporation, a Delaware corporation and a registered broker-dealer, member FINRA and SIPC, as escrow agent for the Company (the “Escrow Agent”), to request the subscription price from the Subscriber’s bank. The Company shall cause the Escrow Agent to maintain all such funds for the Subscriber’s benefit in a segregated non-interest-bearing account, in the name of North Capital Private Securities for further credit to “Series ART-BHERO, LLC”, a Series of Mythic Collection LLC – [Investor Name],” until the earliest to occur of: (i) the Closing, (ii) the rejection of such subscription or (iii) the Termination Date.
3.3 Digital (“electronic”) signatures, often referred to as an “e-signature,” enable paperless contracts and help speed up business transactions. The 2001 E-Sign Act was meant to ease the adoption of electronic signatures.
You may execute this Subscription Agreement by providing one of the following: (i) your original, scanned or faxed signature; or (ii) your electronic signature, as prescribed in the bulleted paragraphs below.
* The mechanics of the electronic signature requested herein include your execution of this Subscription Agreement, the Series Operating Agreement and the Operating Agreement for the Company in a single signature block. By typing in your name, with the underlying software recording your IP address, your browser identification, the timestamp, and a security hash within an SSL encrypted environment, you will have accepted and agreed, without reservation, to all of the terms and conditions contained within this Subscription Agreement, the Series Operating Agreement and the Operating Agreement. Your electronically signed Agreements will be stored by the Company in such a manner that the Company can access them at any time.
* You hereby consent and agree that the electronic signature below constitutes your signature, acceptance and agreement of this Subscription Agreement, the Series Operating Agreement and the Operating Agreement as if each of these documents were actually signed by you in writing. Further, all parties agree that no certification authority or other third-party verification is necessary to validate any electronic signature; and that the lack of such certification or third-party verification will not in any way affect the enforceability of your signature or resulting contract between you and the Company. You understand and agree that your e-signature executed in conjunction with the electronic submission of this Subscription Agreement, the Series Operating Agreement and the Operating Agreement shall be legally binding and that such transaction has been authorized by you. You agree that your electronic signature below is the legal equivalent of your manual signature on this Subscription Agreement, the Series Operating Agreement and the Operating Agreement and that you consent to be legally bound by terms and conditions of such Agreements. The Subscription Agreement, the Series Operating Agreement and the Operating Agreement may be executed in counterparts and by electronic signature, each of which shall be deemed an original, but all of which shall constitute one and the same instrument.
* Furthermore, you hereby agree that all current and future notices, confirmations and other communications regarding this Subscription Agreement, the Series Operating Agreement and the Operating Agreement specifically, and/or future communications in general between the parties, may be made by email, sent to the email address of record as set forth in the vesting information below or as otherwise from time to time changed or updated and disclosed to the other party, without necessity of confirmation of receipt, delivery or reading, and such form of electronic communication is sufficient for all matters regarding the relationship between the parties. If any such electronically sent communication fails to be received for any reason, including but not limited to such communications being diverted to the recipients’ spam filters by the recipients’ email service provider, or due to a recipients’ change of address, or due to technology issues by the recipients’ service provider, the parties agree that the burden of such failure to receive is on the recipient and not the sender, and that the sender is under no obligation to resend communications via any other means, including but not limited to postal service or overnight courier, and that such communications shall for all purposes, including legal and regulatory, be deemed to have been delivered and received. No physical, paper documents will be sent to you, and if you desire physical documents then you agree to be satisfied by directly and personally printing, at your own expense, the electronically sent communication(s) and maintaining such physical records in any manner or form that you desire.
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* Your Consent is Hereby Given: By signing this Subscription Agreement, you are explicitly agreeing to receive documents electronically, including your copy of this signed Subscription Agreement, the Series Operating Agreement and the Operating Agreement, as well as ongoing disclosures, communications and notices.
* By signing this document, the Subscriber is agreeing to the Operating Agreement, the Series Operating Agreement and the Subscription Agreement and all provisions, clauses, representations, warranties, acknowledgments and covenants contained therein, each of which: (i) shall be binding on the heirs, executors, administrators, successors and permitted assigns of the undersigned, and (ii) may not be cancelled, withdrawn, revoked, or terminated by the undersigned except as set forth therein. If there is more than one signatory hereto, the representations, warranties, acknowledgments and agreements of the undersigned are made jointly and severally.
3.4 If the Subscriber is not a United States person, such Subscriber shall immediately notify the Issuer, and the Subscriber hereby represents that the Subscriber is satisfied as to the full observance of the laws of its jurisdiction in connection with any invitation to subscribe for the Interests or any use of this Subscription Agreement, including (i) the legal requirements within its jurisdiction for the purchase of the Interests, (ii) any foreign exchange restrictions applicable to such purchase, (iii) any governmental or other consents that may need to be obtained, and (iv) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale or transfer of the Interests. Such Subscriber’s subscription and payment for, and continued beneficial ownership of, the Interests will not violate any applicable securities or other laws of the Subscriber’s jurisdiction.
IV. NOTICE TO SUBSCRIBERS
4.1 THE INTERESTS HAVE BEEN QUALIFIED UNDER REGULATION A OF THE SECURITIES ACT OF 1933. THE INTERESTS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC, ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THE MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
4.2 FOR NON-U.S. RESIDENTS ONLY: NO ACTION HAS BEEN OR WILL BE TAKEN IN ANY JURISDICTION OUTSIDE THE UNITED STATES OF AMERICA THAT WOULD PERMIT AN OFFERING OF THESE SECURITIES, OR POSSESSION OR DISTRIBUTION OF OFFERING MATERIAL IN CONNECTION WITH THE ISSUE OF THESE SECURITIES, IN ANY COUNTRY OR JURISDICTION WHERE ACTION FOR THAT PURPOSE IS REQUIRED. IT IS THE RESPONSIBILITY OF ANY PERSON WISHING TO PURCHASE THESE SECURITIES TO SATISFY HIMSELF AS TO FULL OBSERVANCE OF THE LAWS OF ANY RELEVANT TERRITORY OUTSIDE THE UNTIED STATES OF AMERICA IN CONNECTION WITH ANY SUCH PURCHASE, INCLUDING OBTAINING ANY REQUIRED GOVERNMENTAL OR OTHER CONSENTS OR OBSERVING ANY OTHER APPLICABLE FORMALITIES.
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V. MISCELLANEOUS
5.1 Any notice or other communication given hereunder shall be deemed sufficient if in writing and sent by electronic mail, reputable overnight courier, facsimile (with receipt of confirmation) or registered or certified mail, return receipt requested, addressed to the Issuer, at the address set forth in the first paragraph hereof, Attention: MANAGER and to the Subscriber at the email address or address indicated on the signature page hereof. Notices shall be deemed to have been given on the date when mailed or sent by e-mail or overnight courier, except notices of change of address, which shall be deemed to have been given when received.
5.2 This Subscription Agreement shall not be changed, modified or amended except by a writing signed by the parties against whom such modification or amendment is to be charged, and this Subscription Agreement may not be discharged except by performance in accordance with its terms or by a writing signed by the party to be charged.
5.3 This Subscription Agreement shall be binding upon and inure to the benefit of the parties hereto and to their respective heirs, legal representatives, successors and assigns. This Subscription Agreement sets forth the entire agreement and understanding between the parties as to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings of any and every nature among them.
5.4 This Subscription Agreement may be executed in counterparts. Upon the execution and delivery of this Subscription Agreement by the Subscriber, this Subscription Agreement shall become a binding obligation of the Subscriber with respect to the purchase of Interests as herein provided; subject, however, to the right hereby reserved by the Issuer to (i) enter into the same agreements with other subscribers, (ii) add and/or delete other persons as subscribers and (iii) reduce the amount of or reject any subscription.
5.5 The holding of any provision of this Subscription Agreement to be invalid or unenforceable by a court of competent jurisdiction shall not affect any other provision of this Subscription Agreement, which shall remain in full force and effect.
5.6 It is agreed that a waiver by either party of a breach of any provision of this Subscription Agreement shall not operate or be construed as a waiver of any subsequent breach by that same party.
5.7 The parties agree to execute and deliver all such further documents, agreements and instruments and take such other and further actions as may be necessary or appropriate to carry out the purposes and intent of this Subscription Agreement.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties have executed this Subscription Agreement as of the day and year first written below.
Subscription Details:
| Number of Interests: | Price per Interest: | Aggregate Amount: |
| ________________ | $ 42.00 | $ ________________ |
Effective Date:
| Exact Name in Which Title is to be Held (As collected via the online form) | |
| Subscriber Name (Please Print) | |
| Residence: Number and Street | |
| City, State and Zip Code | |
| Telephone Number | |
| | |
| (Subscriber Signature) | |
| ACCEPTED BY SUBSCRIBER
AT ANY TIME PRIOR TO USE OF SUBSCRIPTION FUNDS BY THE ISSUER, THE MANAGER MAY RETURN THE TENDERED SUBSCRIPTION FUNDS TO THE SUBSCRIBER AND REJECT THE SUBSCRIPTION AGREEMENT. THE MANAGER HAS THIS RIGHT TO REJECTION PURSUANT TO SECTION 1.14 HEREIN. |
ACCEPTED AND ACKNOWLEDGED.
| SERIES ART-BHERO, LLC a series of Mythic Collection, LLC a Delaware Limited Liability Company | |
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| By: its Series Manager, Mythic Collection, LLC, a Delaware Series Limited Liability Company | |
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| By: its Manager, Mythic Markets, Inc., a Delaware corporation | |
| Joe, Mahavuthivanij, Chief Executive Officer | |
| ACCEPTED BY ISSUER
AT ANY TIME PRIOR TO USE OF SUBSCRIPTION FUNDS BY THE ISSUER, THE MANAGER MAY RETURN THE TENDERED SUBSCRIPTION FUNDS TO THE SUBSCRIBER AND REJECT THE SUBSCRIPTION AGREEMENT. THE MANAGER HAS THIS RIGHT TO REJECTION PURSUANT TO SECTION 1.14 HEREIN. |
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Exhibit A
Issuer Operating Agreement
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Exhibit B
Series Agreement
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EXHIBIT 4.6
SUBSCRIPTION AGREEMENT
SUBSCRIPTION AGREEMENT (the “Subscription Agreement”) made as of the date set forth on the signature page hereof, by and between Series COM-FF160, LLC a series of Mythic Collection, LLC a Delaware Limited Liability Company (the “Issuer”), and the undersigned (the “Subscriber” or “You”).
WHEREAS, pursuant to the Offering Circular (the “Offering Circular”), the Issuer is offering in a Regulation A offering (the “Offering”) to investors up to 1,000 Interests (“Interests”) at a purchase price of $32.00 per Interest for a maximum aggregate purchase price of $32,000 (the “Maximum Offering”).
WHEREAS, the Subscriber desires to subscribe for the number and class of Interests set forth on the signature page hereof, on the terms and conditions hereinafter set forth.
NOW, THEREFORE, for and in consideration of the premises and the mutual covenants hereinafter set forth, the parties hereto do hereby agree as follows:
SUBSCRIPTION PROCEEDURES
In order to purchase Non-Voting Interests, you must take the following steps:
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| 1. | Visit MythicMarkets.com and sign up for a user account on Mythic Markets’ marketplace. |
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| 2. | Verify your email address and Log in to Mythic Markets’ marketplace. |
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| 3. | Click on “Marketplace” which will bring you to the offerings page which will display all the available opportunities to invest. |
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| 4. | Select “Learn more” on the offering you are interested in. |
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| 5. | Carefully read the Offering Circular, and any current supplement, as well as any documents described in the Offering Circular and attached hereto or which you have requested. Consult with your tax, legal and financial advisors to determine whether an investment in any of the Series Interests is suitable for you. |
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| 6. | If you are ready to invest, click the “Buy shares” button on the Offering Details page. |
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| 7. | Complete the KYC process by entering your name, address, date of birth, and social security number. All data is encrypted. |
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| 8. | Enter your banking information for ACH transfer to the offering’s escrow account and confirm your investment. |
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| 9. | Input the number of Non-Voting Interests that you would like to purchase. |
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| 10. | Review and sign the Subscription Agreement that will be sent to you via HelloSign. |
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I. SUBSCRIPTION FOR AND REPRESENTATIONS AND COVENANTS OF SUBSCRIBER
1.1 Subject to the terms and conditions hereinafter set forth, the Subscriber hereby subscribes for and agrees to purchase from the Issuer the number of Interests set forth on the signature page hereof, at a price equal to $32.00 per Interest, and the Issuer agrees to sell such Interests to the Subscriber for said purchase price, subject to the Issuer’s right to sell to the Subscriber such lesser number of (or no) Interests as the Issuer may, in its sole discretion, deem necessary or desirable. The purchase price is payable by ACH to the Issuer.
1.2 The Subscriber has full power and authority to enter into and deliver this Subscription Agreement and to perform its/his/her obligations hereunder, and the execution, delivery and performance of this Subscription Agreement has been duly authorized, if applicable, and this Subscription Agreement constitutes a valid and legally binding obligation of the Subscriber.
1.3 The Subscriber acknowledges receipt of and agrees to, as appropriate, the Offering Circular, all supplements and exhibits to the Offering Circular, and all other documents furnished in connection with this transaction by the Issuer, including the Issuer Operating Agreement attached hereto as Exhibit A and the Series Agreement attached hereto as Exhibit B (collectively, the “Offering Documents”).
1.4 The Subscriber recognizes that the purchase of the Interests involves a high degree of risk in that (i) an investment in the Issuer is highly speculative and only investors who can afford the loss of their entire investment should consider investing in the Issuer and the Interests; (ii) the Interests are being sold pursuant to an exemption under Regulation A issued by the Securities and Exchange Commission (“SEC”) under the Securities Act of 1933, as amended (the “Act”), but they are not registered under the Act or any state securities law; (iii) there is only a limited trading market for the Interests, and there is no assurance that a more active one will ever develop, and thus, the Subscriber may not be able to liquidate his, her or its investment; and (iv) an investor could suffer the loss of his, her or its entire investment.
1.5 The Subscriber is an “accredited investor,” as such term is defined in Rule 501 of Regulation D promulgated under the Act, and the Subscriber is able to bear the economic risk of an investment in the Interests OR the purchase price tendered by Subscriber does not exceed 10% of the greater of the Subscriber’s annual income or net worth.
1.6 The Subscriber is not relying on the Issuer or its affiliates or agents with respect to economic considerations involved in this investment. The Subscriber has relied on the advice of, or has consulted with, only his, her or its advisors, if any. Each advisor, if any, is capable of evaluating the merits and risks of an investment in the Interests as such are described in the Offering Circular, and each advisor, if any, has disclosed to the Subscriber in writing (a copy of which is annexed to this Subscription Agreement) the specific details of any and all past, present or future relationships, actual or contemplated, between the advisor and the Issuer.
1.7 The Subscriber has prior investment experience (including investment in non-listed and non-registered securities), has (together with his, her or its advisors, if any) such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of the prospective investment in the Interests and has read and evaluated, or has employed the services of an investment advisor, attorney or accountant to read and evaluate, all of the documents furnished or made available by the Issuer to the Subscriber, including the Offering Circular, as well as the merits and risks of such an investment by the Subscriber. The Subscriber’s overall commitment to investments, which are not readily marketable, is not disproportionate to the Subscriber’s net worth, and the Subscriber’s investment in the Interests will not cause such overall commitment to become excessive. The Subscriber, if an individual, has adequate means of providing for his or her current needs and personal and family contingencies and has no need for liquidity in his or her investment in the Interests. The Subscriber is financially able to bear the economic risk of this investment, including the ability to afford holding the Interests for an indefinite period or a complete loss of this investment. If other than an individual, the Subscriber also represents it has not been organized solely for the purpose of acquiring the Interests.
1.8 The Subscriber acknowledges that any estimates or forward-looking statements or projections included in the Offering Circular were prepared by the management of the Issuer in good faith, but that the attainment of any such projections, estimates or forward-looking statements cannot be guaranteed by the Issuer, its management or its affiliates and should not be relied upon.
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1.9 The Subscriber acknowledges that the purchase of the Interests may involve tax consequences to the Subscriber and that the contents of the Offering Documents do not contain tax advice. The Subscriber acknowledges that the Subscriber must retain his, her or its own professional advisors to evaluate the tax and other consequences to the Subscriber of an investment in the Interests. The Subscriber acknowledges that it is the responsibility of the Subscriber to determine the appropriateness and the merits of a corporate entity to own the Subscriber’s Interests and the corporate structure of such entity.
1.10 The Subscriber acknowledges that the Offering Circular and this Offering have not been reviewed by any state securities commission, and that no federal or state agency has made any finding or determination regarding the fairness or merits of the Offering or confirmed the accuracy or determined the adequacy of the Offering Circular. Any representation to the contrary is a crime.
1.11 The Subscriber represents, warrants and agrees that the Interests are being purchased for his, her or its own beneficial account and not with a view toward distribution or resale to others. The Subscriber understands that the Issuer is under no obligation to register the Interests on his, her or its behalf or to assist them in complying with any exemption from registration under applicable state securities laws.
1.12 The Subscriber understands that the Interests have not been registered under the Act by reason of a claimed exemption under the provisions of the Act which depends, in part, upon his, her or its investment intention. The Subscriber realizes that, in the view of the SEC, a purchase with an intent to resell would represent a purchase with an intent inconsistent with his, her or its representation to the Issuer, and the SEC might regard such a sale or disposition as a deferred sale, for which such exemption is not available. The Subscriber does not have any such intentions.
1.13 The Subscriber agrees to indemnify and hold the Issuer, its manager, and controlling persons and their respective heirs, representatives, successors and assigns harmless against all liabilities, costs and expenses incurred by them as a result of any misrepresentation made by the Subscriber herein or as a result of any sale or distribution by the Subscriber in violation of the Act (including, without limitation, the rules promulgated thereunder), any state securities laws, or the Issuer’s Restated Certificate of Organization, Operating Agreement, and Series Operating Agreement as amended from time to time.
1.14 The Subscriber understands that the Issuer will review and rely on this Subscription Agreement without making any independent investigation; and it is agreed that the Issuer reserves the unrestricted right to reject or limit any subscription and to withdraw the Offering at any time.
1.15 The Subscriber hereby represents that the address of the Subscriber furnished at the end of this Subscription Agreement is the Subscriber’s principal residence, if the Subscriber is an individual, or its principal business address, if it is a corporation or other entity.
1.16 The Subscriber acknowledges that if the Subscriber is a Registered Representative of a Financial Industry Regulatory Authority (“FINRA”) member firm, the Subscriber must give such firm the notice required by FINRA’s Conduct Rules, receipt of which must be acknowledged by such firm on the signature page hereof.
1.17 The Subscriber hereby acknowledges that neither the Issuer nor any persons associated with the Issuer who may provide assistance or advice in connection with the Offering are or are expected to be members or associated persons of members of FINRA or registered broker-dealers under any federal or state securities laws.
1.18 The Subscriber hereby represents that, except as expressly set forth in the Offering Documents, no representations or warranties have been made to the Subscriber by the Issuer or by any agent, sub-agent, officer, employee or affiliate of the Issuer and, in entering into this transaction, the Subscriber is not relying on any information other than that contained in the Offering Documents and the results of independent investigation by the Subscriber.
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1.19 No oral or written representations have been made, or oral or written information furnished, to the Subscriber or his, her or its advisors, if any, in connection with the offering of the Interests which are in any way inconsistent with the information contained in the Offering Documents.
1.20 All information provided by the Subscriber is true and accurate in all respects, and the Subscriber acknowledges that the Issuer will be relying on such information to its possible detriment in deciding whether the Issuer can sell these securities to the Subscriber without giving rise to the loss of the exemption from registration under applicable securities laws.
1.21 The Subscriber has taken no action which would give rise to any claim by any person for brokerage commissions, finders, fees or the like relating to this Subscription Agreement or the transactions contemplated hereby.
1.22 The Subscriber is not relying on the Issuer, or any of its employees, agents or sub-agents with respect to the legal, tax, economic and related considerations of an investment in the Interests, and the Subscriber has relied on the advice of, or has consulted with, only his, her or its own advisors, if any.
1.23 (For ERISA plans only) The fiduciary of the ERISA plan (the “Plan”) represents that such fiduciary has been informed of and understands the Issuer’s business objectives, policies and strategies, and that the decision to invest “plan assets” (as such term is defined in ERISA) in the Issuer is consistent with the provisions of ERISA that require diversification of plan assets and impose other fiduciary responsibilities. The subscriber or Plan fiduciary (a) is responsible for the decision to invest in the Issuer; (b) is independent of the Issuer and any of its affiliates; (c) is qualified to make such investment decision; and (d) in making such decision, the subscriber or Plan fiduciary has not relied primarily on any advice or recommendation of the Issuer or any of its affiliates or its agents.
1.24 The foregoing representations, warranties and agreements shall survive the Closing.
II. REPRESENTATIONS BY THE ISSUER
The Issuer represents and warrants to the Subscriber that as of the date of the closing of the Offering (the “Closing Date”):
2.1 The Issuer is a Series Limited Liability Company duly organized, validly existing and in good standing under the laws of the State of Delaware, authorized to do business in the State of Delaware and has the corporate power to conduct the business which it conducts and proposes to conduct.
2.2 The execution, delivery and performance of this Subscription Agreement by the Issuer have been duly authorized by the Issuer and all other corporate action required to authorize and consummate the offer and sale of the Interests has been duly taken and approved. This Subscription Agreement is valid, binding and enforceable against the Issuer in accordance with its terms; except as enforcement may be limited by bankruptcy, insolvency, moratorium or similar laws or by legal or equitable principles relating to or limiting creditors’ rights generally, the availability of equity remedies, or public policy as to the enforcement of certain provisions, such as indemnification provisions.
2.3 The Interests have been duly and validly authorized and issued.
2.4 The Issuer knows of no pending or threatened legal or governmental proceedings to which the Issuer is a party which would materially adversely affect the business, financial condition or operations of the Issuer.
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III. TERMS OF SUBSCRIPTION
3.1 Subject to Section 3.2 hereof, the subscription period will begin as of the date of the Offering Circular and will terminate at 11:59 PM Eastern Time, on the earlier of the date on which the Maximum Offering is sold or one (1) year from the commencement date or the date the Offering is terminated by the Issuer, such date not to exceed the date which is 18 months from the date the Offering Circular or amendment thereto, as applicable, is qualified by the SEC (the “Termination Date”).
3.2 The Subscriber has effected an ACH in the full amount of the purchase price for the Interests to the Issuer. Concurrent with the execution hereof, the Subscriber authorizes North Capital Private Securities Corporation, a Delaware corporation and a registered broker-dealer, member FINRA and SIPC, as escrow agent for the Company (the “Escrow Agent”), to request the subscription price from the Subscriber’s bank. The Company shall cause the Escrow Agent to maintain all such funds for the Subscriber’s benefit in a segregated non-interest-bearing account, in the name of North Capital Private Securities for further credit to “Series COM-FF160, LLC”, a Series of Mythic Collection LLC – [Investor Name],” until the earliest to occur of: (i) the Closing, (ii) the rejection of such subscription or (iii) the Termination Date.
3.3 Digital (“electronic”) signatures, often referred to as an “e-signature,” enable paperless contracts and help speed up business transactions. The 2001 E-Sign Act was meant to ease the adoption of electronic signatures.
You may execute this Subscription Agreement by providing one of the following: (i) your original, scanned or faxed signature; or (ii) your electronic signature, as prescribed in the bulleted paragraphs below.
* The mechanics of the electronic signature requested herein include your execution of this Subscription Agreement, the Series Operating Agreement and the Operating Agreement for the Company in a single signature block. By typing in your name, with the underlying software recording your IP address, your browser identification, the timestamp, and a security hash within an SSL encrypted environment, you will have accepted and agreed, without reservation, to all of the terms and conditions contained within this Subscription Agreement, the Series Operating Agreement and the Operating Agreement. Your electronically signed Agreements will be stored by the Company in such a manner that the Company can access them at any time.
* You hereby consent and agree that the electronic signature below constitutes your signature, acceptance and agreement of this Subscription Agreement, the Series Operating Agreement and the Operating Agreement as if each of these documents were actually signed by you in writing. Further, all parties agree that no certification authority or other third-party verification is necessary to validate any electronic signature; and that the lack of such certification or third-party verification will not in any way affect the enforceability of your signature or resulting contract between you and the Company. You understand and agree that your e-signature executed in conjunction with the electronic submission of this Subscription Agreement, the Series Operating Agreement and the Operating Agreement shall be legally binding and that such transaction has been authorized by you. You agree that your electronic signature below is the legal equivalent of your manual signature on this Subscription Agreement, the Series Operating Agreement and the Operating Agreement and that you consent to be legally bound by terms and conditions of such Agreements. The Subscription Agreement, the Series Operating Agreement and the Operating Agreement may be executed in counterparts and by electronic signature, each of which shall be deemed an original, but all of which shall constitute one and the same instrument.
* Furthermore, you hereby agree that all current and future notices, confirmations and other communications regarding this Subscription Agreement, the Series Operating Agreement and the Operating Agreement specifically, and/or future communications in general between the parties, may be made by email, sent to the email address of record as set forth in the vesting information below or as otherwise from time to time changed or updated and disclosed to the other party, without necessity of confirmation of receipt, delivery or reading, and such form of electronic communication is sufficient for all matters regarding the relationship between the parties. If any such electronically sent communication fails to be received for any reason, including but not limited to such communications being diverted to the recipients’ spam filters by the recipients’ email service provider, or due to a recipients’ change of address, or due to technology issues by the recipients’ service provider, the parties agree that the burden of such failure to receive is on the recipient and not the sender, and that the sender is under no obligation to resend communications via any other means, including but not limited to postal service or overnight courier, and that such communications shall for all purposes, including legal and regulatory, be deemed to have been delivered and received. No physical, paper documents will be sent to you, and if you desire physical documents then you agree to be satisfied by directly and personally printing, at your own expense, the electronically sent communication(s) and maintaining such physical records in any manner or form that you desire.
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* Your Consent is Hereby Given: By signing this Subscription Agreement, you are explicitly agreeing to receive documents electronically, including your copy of this signed Subscription Agreement, the Series Operating Agreement and the Operating Agreement, as well as ongoing disclosures, communications and notices.
* By signing this document, the Subscriber is agreeing to the Operating Agreement, the Series Operating Agreement and the Subscription Agreement and all provisions, clauses, representations, warranties, acknowledgments and covenants contained therein, each of which: (i) shall be binding on the heirs, executors, administrators, successors and permitted assigns of the undersigned, and (ii) may not be cancelled, withdrawn, revoked, or terminated by the undersigned except as set forth therein. If there is more than one signatory hereto, the representations, warranties, acknowledgments and agreements of the undersigned are made jointly and severally.
3.4 If the Subscriber is not a United States person, such Subscriber shall immediately notify the Issuer, and the Subscriber hereby represents that the Subscriber is satisfied as to the full observance of the laws of its jurisdiction in connection with any invitation to subscribe for the Interests or any use of this Subscription Agreement, including (i) the legal requirements within its jurisdiction for the purchase of the Interests, (ii) any foreign exchange restrictions applicable to such purchase, (iii) any governmental or other consents that may need to be obtained, and (iv) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale or transfer of the Interests. Such Subscriber’s subscription and payment for, and continued beneficial ownership of, the Interests will not violate any applicable securities or other laws of the Subscriber’s jurisdiction.
IV. NOTICE TO SUBSCRIBERS
4.1 THE INTERESTS HAVE BEEN QUALIFIED UNDER REGULATION A OF THE SECURITIES ACT OF 1933. THE INTERESTS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC, ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THE MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
4.2 FOR NON-U.S. RESIDENTS ONLY: NO ACTION HAS BEEN OR WILL BE TAKEN IN ANY JURISDICTION OUTSIDE THE UNITED STATES OF AMERICA THAT WOULD PERMIT AN OFFERING OF THESE SECURITIES, OR POSSESSION OR DISTRIBUTION OF OFFERING MATERIAL IN CONNECTION WITH THE ISSUE OF THESE SECURITIES, IN ANY COUNTRY OR JURISDICTION WHERE ACTION FOR THAT PURPOSE IS REQUIRED. IT IS THE RESPONSIBILITY OF ANY PERSON WISHING TO PURCHASE THESE SECURITIES TO SATISFY HIMSELF AS TO FULL OBSERVANCE OF THE LAWS OF ANY RELEVANT TERRITORY OUTSIDE THE UNTIED STATES OF AMERICA IN CONNECTION WITH ANY SUCH PURCHASE, INCLUDING OBTAINING ANY REQUIRED GOVERNMENTAL OR OTHER CONSENTS OR OBSERVING ANY OTHER APPLICABLE FORMALITIES.
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V. MISCELLANEOUS
5.1 Any notice or other communication given hereunder shall be deemed sufficient if in writing and sent by electronic mail, reputable overnight courier, facsimile (with receipt of confirmation) or registered or certified mail, return receipt requested, addressed to the Issuer, at the address set forth in the first paragraph hereof, Attention: MANAGER and to the Subscriber at the email address or address indicated on the signature page hereof. Notices shall be deemed to have been given on the date when mailed or sent by e-mail or overnight courier, except notices of change of address, which shall be deemed to have been given when received.
5.2 This Subscription Agreement shall not be changed, modified or amended except by a writing signed by the parties against whom such modification or amendment is to be charged, and this Subscription Agreement may not be discharged except by performance in accordance with its terms or by a writing signed by the party to be charged.
5.3 This Subscription Agreement shall be binding upon and inure to the benefit of the parties hereto and to their respective heirs, legal representatives, successors and assigns. This Subscription Agreement sets forth the entire agreement and understanding between the parties as to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings of any and every nature among them.
5.4 This Subscription Agreement may be executed in counterparts. Upon the execution and delivery of this Subscription Agreement by the Subscriber, this Subscription Agreement shall become a binding obligation of the Subscriber with respect to the purchase of Interests as herein provided; subject, however, to the right hereby reserved by the Issuer to (i) enter into the same agreements with other subscribers, (ii) add and/or delete other persons as subscribers and (iii) reduce the amount of or reject any subscription.
5.5 The holding of any provision of this Subscription Agreement to be invalid or unenforceable by a court of competent jurisdiction shall not affect any other provision of this Subscription Agreement, which shall remain in full force and effect.
5.6 It is agreed that a waiver by either party of a breach of any provision of this Subscription Agreement shall not operate or be construed as a waiver of any subsequent breach by that same party.
5.7 The parties agree to execute and deliver all such further documents, agreements and instruments and take such other and further actions as may be necessary or appropriate to carry out the purposes and intent of this Subscription Agreement.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties have executed this Subscription Agreement as of the day and year first written below.
Subscription Details:
| Number of Interests: | Price per Interest: | Aggregate Amount: |
| ________________ | $ 32.00 | $ ________________ |
Effective Date:
| Exact Name in Which Title is to be Held (As collected via the online form) | |
| Subscriber Name (Please Print) | |
| Residence: Number and Street | |
| City, State and Zip Code | |
| Telephone Number | |
| | |
| (Subscriber Signature) | |
| ACCEPTED BY SUBSCRIBER
AT ANY TIME PRIOR TO USE OF SUBSCRIPTION FUNDS BY THE ISSUER, THE MANAGER MAY RETURN THE TENDERED SUBSCRIPTION FUNDS TO THE SUBSCRIBER AND REJECT THE SUBSCRIPTION AGREEMENT. THE MANAGER HAS THIS RIGHT TO REJECTION PURSUANT TO SECTION 1.14 HEREIN. |
ACCEPTED AND ACKNOWLEDGED.
| SERIES COM-FF160, LLC a series of Mythic Collection, LLC a Delaware Limited Liability Company | |
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| By: its Series Manager, Mythic Collection, LLC, a Delaware Series Limited Liability Company | |
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| By: its Manager, Mythic Markets, Inc., a Delaware corporation | |
| Joe, Mahavuthivanij, Chief Executive Officer | |
| ACCEPTED BY ISSUER
AT ANY TIME PRIOR TO USE OF SUBSCRIPTION FUNDS BY THE ISSUER, THE MANAGER MAY RETURN THE TENDERED SUBSCRIPTION FUNDS TO THE SUBSCRIBER AND REJECT THE SUBSCRIPTION AGREEMENT. THE MANAGER HAS THIS RIGHT TO REJECTION PURSUANT TO SECTION 1.14 HEREIN. |
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Exhibit A
Issuer Operating Agreement
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Exhibit B
Series Agreement
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EXHIBIT 6.3
Purchase and Sale Agreement
THIS PURCHASE AGREEMENT (this “Agreement”) is made as of July 1, 2019, by and among Mythic Markets, Inc., a Delaware corporation (“Seller”), and Mythic Collection, LLC, a Delaware series limited liability company, (the “Buyer”), with respect to the following:
A. Seller owns certain personal property, described as BGS 9.0 MTG Alpha Black Lotus (the “Property”).
B. Buyer is interested in acquiring the Property on the terms described in this Agreement for the benefit of the holders of Series MTG-ABL90 membership interests in the Buyer (the “Series Interests”).
IN CONSIDERATION OF the premises and mutual covenants contained in this Agreement, and for good and valuable consideration, the parties, intending to be legally bound, agree as follows:
1. Purchase and Sale of Property. In consideration of the covenants, representations and obligations of Buyer hereunder, and subject to the conditions set forth in this Agreement, Seller agrees to sell, transfer and assign, and Buyer agrees to purchase, the Property as of the date of the initial closing of the sale and issuance of the Series Interests pursuant to the offering circular (“Offering”) filed with the SEC pursuant to Regulation A, in the form previously shared with Seller (the “Effective Date”).
1.1 Purchase Price. Buyer will pay to Seller for the Property and for all obligations specified in this Agreement, if any, as the full and complete purchase price including any applicable sales or other taxes, the sum of U.S. $79,000.00 (the “Purchase Price”).
1.2 Payments. Buyer shall pay and deliver the Purchase Price, net of any other consideration delivered to Seller prior to the Effective Date within five (5) business days of the Effective Date; provided, that, the Purchase Price may be paid in installments, which installments shall provide for a transfer of at least $45,250 of the Purchase Price to Seller within five (5) business days of the Effective Date with the remainder to be fully paid within twelve (12) months following the Effective Date. Buyer and Seller agree to take reasonable steps to confirm the method of payment of the Purchase Price on or around the Effective Date, including any information that Buyer requires to initiate a wire transfer to Seller.
2. Possession and Delivery. Absolute right to possession of the Property shall transfer to Buyer on the Effective Date. If delivery of the Property is to be made at a date after the Effective Date, it is Seller’s duty to ensure the Property is delivered in the same condition as when last inspected by Buyer. Seller shall remain partially entitled to Property until such time the entire Purchase Price is conveyed, prorata. If after one year after the Effective Date, the entire Purchase Price has not been transferred, the Seller shall be completely divested from the Property and shall receive, instead, interests in Buyer, prorata. The Seller may at any time during the term of the Offering, elect to acquire a maximum of 10% of the Series Interests by way of cancelation of such amount owed to it by Buyer under this Agreement equivalent to the value of the Series Interests acquired.
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3. Taxes. Seller will pay all personal property taxes associated with ownership of the Property and accrued for the period ending on the Effective Date and, subject to Seller’s actual delivery of the Property to Buyer pursuant to Section 2 hereof, Buyer will pay all such personal property taxes that accrue thereafter.
4. Seller Representations and Warranties. Seller represents and warrants that: (i) it has good and marketable title to the Property and full authority to sell the Property; (ii) the Property is sold free and clear of all liens, indebtedness, or liabilities; and (iii) the Property is of actual quality, authenticity, history and value as described or disclosed by Seller to Buyer from time to time (collectively, the “Seller Representations”). Buyer may request a Bill of Sale from the Seller for the Property.
5. Indemnification. Seller shall indemnify, defend and hold Buyer and its affiliates, directors, officers, shareholders, employees, attorneys, agents and other representatives from and against any and all demands, claims, actions, causes of action, proceedings, assessments, losses, damages, liabilities, settlements, judgments, fines, penalties, interest, costs and expenses (including fees and disbursements of counsel), arising out of (i) any breach of any representation, warranty or covenant of this Agreement, and (ii) Seller’s use of the Property after the Effective Date.
6. Miscellaneous.
6.1 Entire Agreement and Amendment. This Agreement constitutes the entire understanding among the parties with respect to the subject matter hereof, and supersedes all negotiations, prior discussions or other agreements, oral or written with respect to its subject matter. This Agreement may only be amended or modified by the written agreement of the parties.
6.2 Termination. Buyer may terminate this Agreement at any time prior to taking actual possession of the Property following the Effective Date pursuant to Section 2 hereof. In the event that Buyer terminates this Agreement for any reason other than Seller’s breach of the Seller Representations, Buyer’s obligations hereunder and any liabilities to Seller shall terminate effective immediately. In the event that Buyer terminates this Agreement in connection with Seller’s breach of the Seller Representations, Buyer’s obligations hereunder and any liabilities to Seller shall terminate effective immediately and Seller shall promptly return to Buyer any consideration delivered to Seller in connection with this Agreement.
6.3 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California, without giving effect to the conflict of laws principles thereof. The parties agree that any action brought by either party under or in relation to this Agreement, including without limitation to interpret or enforce any provision of this Agreement, shall be brought in, and each party agrees to and does hereby submit to the jurisdiction and venue of, any state or federal court located in the County of Santa Clara, California.
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6.4 Fees and Costs. Each party shall bear its own attorneys’ fees and expenses in connection with the negotiation, preparation and consummation of this Agreement.
6.5 Assignment. Buyer shall have the right to assign any of its rights or obligations under this Agreement to any affiliate or third party without Seller’s prior written consent. Seller shall not have the right to assign any of its rights or obligations under this Agreement without Buyer’s prior written consent. This Agreement shall be binding upon and inure to the benefit of the parties and their permitted successors and assigns.
6.6 Notices. All notices to be given by any party to this Agreement to the other party shall be in writing, and shall be (i) sent by email transmission; (ii) mailed by USPS® Certified Mail; or (ii) personally delivered, at the addresses set forth on the signature pages hereof (or at such other address for a party as specified by like notice) and shall be deemed given when received if sent by email transmission or personally delivered, or if mailed as provided herein, on the second business day after it is so placed in the mail. Any party at any time may give notice to the other party of a different address other than that set forth herein in accordance with the provisions of this Section.
6.7 Survival of Obligations. All representations and warranties of the parties set forth in this Agreement shall survive termination of this Agreement unless expressly waived by the parties hereof.
6.8 Counterparts. This Agreement may be executed in counterparts. Duly acknowledged facsimile signatures shall be deemed as originals.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be fully executed as of the day and year first above written.
Seller:
MYTHIC MARKETS, INC.
By: /s/ Joseph Mahavuthivanij
Name: Joseph Mahavuthivanij
Title: CEO
Address: 16 Lagoon Ct, San Rafael, CA 94903
Email: joe@mythicmarkets.com
Buyer:
Mythic Collection, LLC
By: /s/ Joseph Mahavuthivanij
Name: Joseph Mahavuthivanij
Title: Managing Member Mythic Markets, Inc
Address:
Email:
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EXHIBIT 6.4
Purchase and Sale Agreement
THIS PURCHASE AGREEMENT (this “Agreement”) is made as of April 2, 2020, by and among Mythic Markets, Inc., a Delaware corporation (“Seller”), and Series MTG-94BOX, LLC, a Delaware series limited liability company, (the “Buyer”), with respect to the following:
A. Seller owns certain personal property, described as a collection of Magic: The Gathering Booster Boxes from the Antiquities, Revised, Legends, The Dark, and Fallen Empires sets. (the “Property”).
B. Buyer is interested in acquiring the Property on the terms described in this Agreement for the benefit of the holders of Series MTG-94BOX membership interests in the Buyer (the “Series Interests”).
IN CONSIDERATION OF the promises and mutual covenants contained in this Agreement, and for good and valuable consideration, the parties, intending to be legally bound, agree as follows:
1. Purchase and Sale of Property. In consideration of the covenants, representations and obligations of Buyer hereunder, and subject to the conditions set forth in this Agreement, Seller agrees to sell, transfer and assign, and Buyer agrees to purchase, the Property as of the date of the initial closing of the sale and issuance of the Series Interests pursuant to the offering circular (“Offering”) filed with the SEC pursuant to Regulation A, in the form previously shared with Seller (the “Effective Date”).
1.1 Purchase Price. Buyer will pay to Seller for the Property and for all obligations specified in this Agreement, if any, as the full and complete purchase price including any applicable sales or other taxes, the sum of U.S. $47,850.00 (the “Purchase Price”).
1.2 Payments. Within five (5) business days of the Effective Date, Buyer shall pay and deliver to Seller the Purchase Price net of any other consideration delivered to Seller prior to such date; provided, that, the Purchase Price may be paid in installments, which installments shall provide for a transfer of at least $27,225.00 of the Purchase Price to Seller within five (5) business days of the Effective Date with the remainder to be fully paid within twelve (12) months following the Effective Date. Buyer and Seller agree to take reasonable steps to confirm the method of payment of the Purchase Price on or around the Effective Date, including any information that Buyer requires to initiate a wire transfer to Seller.
2. Possession and Delivery. Absolute right to possession of the Property shall transfer to Buyer on the Effective Date. If delivery of the Property is to be made at a date after the Effective Date, it is Seller’s duty to ensure the Property is delivered in the same condition as when last inspected by Buyer. Seller shall remain partially entitled to the Property until such time the full Purchase Price is conveyed to Buyer, on a pro rata basis. If after one year after the Effective Date, the entire Purchase Price has not been transferred, the Seller shall be completely divested from the Property and shall receive, instead, Series Interests on a pro rata basis. The Seller may at any time during the term of the Offering, elect to acquire Series Interests by way of cancelation of the equivalent amount owed to it by Buyer under this Agreement. For purposes of this section, the value of the Series Interests acquired by or transferred to Seller from time to time shall be based on the initial value of such Series Interests pursuant to the Offering.
3. Taxes. Seller will pay all personal property taxes associated with ownership of the Property and accrued for the period ending on the Effective Date and, subject to Seller’s actual delivery of the Property to Buyer pursuant to Section 2 hereof, Buyer will pay all such personal property taxes that accrue thereafter.
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4. Seller Representations and Warranties. Seller represents and warrants that: (i) it has good and marketable title to the Property and full authority to sell the Property; (ii) the Property is sold free and clear of all liens, indebtedness, or liabilities; and (iii) the Property is of actual quality, authenticity, history and value as described or disclosed by Seller to Buyer from time to time (collectively, the “Seller Representations”). Buyer may request a Bill of Sale from the Seller for the Property.
5. Indemnification. Seller shall indemnify, defend and hold Buyer and its affiliates, directors, officers, shareholders, employees, attorneys, agents and other representatives from and against any and all demands, claims, actions, causes of action, proceedings, assessments, losses, damages, liabilities, settlements, judgments, fines, penalties, interest, costs and expenses (including fees and disbursements of counsel), arising out of (i) any breach of any representation, warranty or covenant of this Agreement, and (ii) Seller’s use of the Property after the Effective Date.
6. Miscellaneous.
6.1 Entire Agreement and Amendment. This Agreement constitutes the entire understanding among the parties with respect to the subject matter hereof, and supersedes all negotiations, prior discussions or other agreements, oral or written with respect to its subject matter. This Agreement may only be amended or modified by the written agreement of the parties.
6.2 Termination. Buyer may terminate this Agreement at any time prior to taking actual possession of the Property following the Effective Date pursuant to Section 2 hereof. In the event that Buyer terminates this Agreement for any reason other than Seller’s breach of the Seller Representations, Buyer’s obligations hereunder and any liabilities to Seller shall terminate effective immediately. In the event that Buyer terminates this Agreement in connection with Seller’s breach of the Seller Representations, Buyer’s obligations hereunder and any liabilities to Seller shall terminate effective immediately and Seller shall promptly return to Buyer any consideration delivered to Seller in connection with this Agreement.
6.3 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California, without giving effect to the conflict of laws principles thereof. The parties agree that any action brought by either party under or in relation to this Agreement, including without limitation to interpret or enforce any provision of this Agreement, shall be brought in, and each party agrees to and does hereby submit to the jurisdiction and venue of, any state or federal court located in the County of Santa Clara, California.
6.4 Fees and Costs. Each party shall bear its own attorneys’ fees and expenses in connection with the negotiation, preparation and consummation of this Agreement.
6.5 Assignment. Buyer shall have the right to assign any of its rights or obligations under this Agreement to any affiliate or third party without Seller’s prior written consent. Seller shall not have the right to assign any of its rights or obligations under this Agreement without Buyer’s prior written consent. This Agreement shall be binding upon and inure to the benefit of the parties and their permitted successors and assigns.
6.6 Notices. All notices to be given by any party to this Agreement to the other party shall be in writing, and shall be (i) sent by email transmission; (ii) mailed by USPS® Certified Mail; or (ii) personally delivered, at the addresses set forth on the signature pages hereof (or at such other address for a party as specified by like notice) and shall be deemed given when received if sent by email transmission or personally delivered, or if mailed as provided herein, on the second business day after it is so placed in the mail. Any party at any time may give notice to the other party of a different address other than that set forth herein in accordance with the provisions of this Section.
6.7 Survival of Obligations. All representations and warranties of the parties set forth in this Agreement shall survive termination of this Agreement unless expressly waived by the parties hereof.
6.8 Counterparts. This Agreement may be executed in counterparts. Duly acknowledged facsimile signatures shall be deemed as originals.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be fully executed as of the day and year first above written.
Seller:
MYTHIC MARKETS, INC.
By: /s/ Joseph Mahavuthivanij
Name: Joseph Mahavuthivanij
Title: CEO
Address: 16 Lagoon Ct, San Rafael, CA 94903
Email: joe@mythicmarkets.com
Buyer:
Mythic Collection, LLC
By: /s/ Joseph Mahavuthivanij
Name: Joseph Mahavuthivanij
Title: Managing Member - Mythic Markets, Inc
Address: 16 Lagoon Ct, San Rafael, CA 94903
Email: joe@mythicmarkets.com
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EXHIBIT 6.5
EXHIBIT 6.6
Purchase and Sale Agreement
THIS PURCHASE AGREEMENT (this “Agreement”) is made as of December 10, 2019, by and among Joshua Patel, an individual residing at 214 East 1200 South, Bountiful, Utah 84010 (“Seller”), and Mythic Collection, LLC, a Delaware series limited liability company, (the “Buyer”), with respect to the following:
A. Seller owns certain personal property, described as an original painting by Sandra Everingham depicting a giant rat standing over skeletons, which original painting is depicted on the Magic: The Gathering Giant Growth trading card (the “Property”).
B. Buyer is interested in acquiring the Property on the terms described in this Agreement for the benefit of the holders of anticipated Series ART-GGMTG membership interests in the Buyer (the “Series Interests”).
IN CONSIDERATION OF the promises and mutual covenants contained in this Agreement, and for good and valuable consideration, the parties, intending to be legally bound, agree as follows:
1. Purchase and Sale of Property. In consideration of the covenants, representations and obligations of Buyer hereunder, and subject to the conditions set forth in this Agreement, Seller agrees to sell, transfer and assign, and Buyer agrees to purchase, the Property as of the date of the closing of the sale and issuance of the Series Interests (“Offering”) for an aggregate value of at least $130,000.00 (including the value of the Seller Participation) pursuant to the Buyer’s offering circular, as amended from time to time, filed with the SEC pursuant to Regulation A (the “Effective Date”).
1.1 Purchase Price. Buyer will pay to Seller for the Property and for all obligations specified in this Agreement, if any, as the full and complete purchase price including any applicable sales or other taxes, the sum of U.S. $130,000.00 (the “Purchase Price”).
1.2 Payments. Within five (5) business days of the Effective Date, Buyer shall pay and deliver to Seller the Purchase Price; provided, that, the Purchase Price may be paid in installments, which installments shall provide for a transfer of at least $26,000.00 (“Down Payment”) of the Purchase Price to Seller within five (5) business days of the Effective Date with the remainder to be fully paid within the earlier of: (a) thirty (30) days following the Effective Date or (b) April 1, 2020, subject to the terms of Section 2 hereof. Buyer and Seller agree to take reasonable steps to confirm the method of payment of the Purchase Price on or around the Effective Date, including any information that Buyer requires to initiate a wire transfer to Seller.
1.3 Seller Participation. The Seller shall retain 20% of the Series Interests (the “Seller Participation”). The Purchase Price shall be reduced by the value of the Series Interests retained by Seller. For purposes of this section, the value of the Series Interests retained by Seller in connection with the Seller Participation shall be based on the initial value of such Series Interests pursuant to the Offering.
2. Possession and Delivery. Seller shall make available to Buyer the Property promptly following receipt of the Down Payment. Absolute right to possession of the Property shall transfer to Buyer after the Purchase Price is paid in full. If delivery of the Property is to be made at a date after the Effective Date, it is Seller’s duty to ensure the Property is delivered in the same condition as when last inspected by Buyer. Seller shall remain entitled to the Property until such time the full Purchase Price is conveyed to Buyer, on a pro rata basis.
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Until the Purchase Price is paid in full, the Property shall remain in the condition in which it is received. It shall not be conserved, cleaned, repaired, retouched, or removed from mats, mounts or bases, rewired, duplicated, migrated to a new medium or altered in any way whatever except with Seller’s prior written permission.
3. Taxes. Seller will pay all personal property taxes associated with ownership of the Property and accrued for the period ending on the Effective Date and, subject to Seller’s actual delivery of the Property to Buyer pursuant to Section 2 hereof, Buyer will pay all such personal property taxes that accrue thereafter.
4. Seller Representations and Warranties. Seller represents and warrants that: (i) it has good and marketable title to the Property and full authority to sell the Property; (ii) the Property is sold free and clear of all liens, indebtedness, or liabilities; and (iii) the Property is of actual quality, authenticity, history and value as described or disclosed by Seller to Buyer from time to time (collectively, the “Seller Representations”). Buyer may request a Bill of Sale from the Seller for the Property.
5. Indemnification and Insurance.
5.1 Seller. Seller shall indemnify, defend and hold Buyer and its affiliates, directors, officers, shareholders, employees, attorneys, agents and other representatives from and against any and all demands, claims, actions, causes of action, proceedings, assessments, losses, damages, liabilities, settlements, judgments, fines, penalties, interest, costs and expenses (including fees and disbursements of counsel), arising out of (i) any breach of any representation, warranty or covenant of this Agreement, and (ii) Seller’s use of the Property after the Effective Date.
5.2 Buyer. Buyer shall indemnify, defend and hold Seller and its affiliates, directors, officers, shareholders, employees, attorneys, agents and other representatives from and against any and all demands, claims, actions, causes of action, proceedings, assessments, losses, damages, liabilities, settlements, judgments, fines, penalties, interest, costs and expenses (including fees and disbursements of counsel), arising out of or related to (i) any breach of any representation, warranty or covenant of this Agreement, and (ii) Buyer’s use of the Property after the Effective Date.
5.3 Insurance. During the term of this Agreement, Buyer shall, at its own expense, maintain and carry insurance on the Property in full force and effect which includes, but is not limited to, collectible insurance in a sum no less than $130,000 with financially sound and reputable insurers. Upon Seller’s request, Buyer shall provide Seller with a certificate of insurance from Buyer’s insurer evidencing the insurance coverage specified in this Agreement. Except where prohibited by law, Buyer shall require its insurer to waive all rights of subrogation against Seller’s insurers and Seller.
6. Miscellaneous.
6.1 Confidentiality. “Confidential Information” means information disclosed by Buyer that is not generally known to the public and at the time of disclosure, or is identified as, or would reasonably be understood by the receiving party to be, proprietary or confidential. Confidential Information may be disclosed by Buyer in oral, written, visual, electronic or other form. Seller agrees to use due care and discretion to avoid disclosure, publication or dissemination of any Confidential Information. Except as otherwise expressly permitted under this Agreement, Seller shall not: (a) disclose, duplicate, copy, transmit or otherwise disseminate in any manner whatsoever any Confidential Information; (b) use the Confidential Information (i) for Seller’s own benefit or that of any third party, (ii) to Buyer’s detriment, or (iii) for any purpose other than performance of this Agreement; (c) commercially exploit any Confidential Information; or (d) acquire any right in, or assert any lien against, the Confidential Information. Confidential Information shall also include the terms of this Agreement. This paragraph shall
survive the termination of this Agreement.
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6.2 Entire Agreement and Amendment. This Agreement constitutes the entire understanding among the parties with respect to the subject matter hereof, and supersedes all negotiations, prior discussions or other agreements, oral or written with respect to its subject matter. This Agreement may only be amended or modified by the written agreement of the parties.
6.3 Termination. Buyer may terminate this Agreement at any time prior to taking actual possession of the Property following the Effective Date pursuant to Section 2 hereof. In the event that Buyer terminates this Agreement prior to taking actual possession of the Property, Buyer’s obligations hereunder and any liabilities to Seller shall terminate effective immediately. In the event that Buyer terminates this Agreement in connection with Seller’s breach of the Seller Representations, Buyer’s obligations hereunder and any liabilities to Seller shall terminate effective immediately and Seller shall promptly return to Buyer any consideration delivered to Seller in connection with this Agreement after Buyer returns the Property to Seller in the same condition as it was received by Buyer, except that Seller shall retain the Down Payment.
6.4 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California, without giving effect to the conflict of laws principles thereof. The parties agree that any action brought by either party under or in relation to this Agreement, including without limitation to interpret or enforce any provision of this Agreement, shall be brought in, and each party agrees to and does hereby submit to the jurisdiction and venue of, any state or federal court located in the County of Santa Clara, California.
6.5 Fees and Costs. Each party shall bear its own attorneys’ fees and expenses in connection with the negotiation, preparation and consummation of this Agreement.
6.6 Assignment. Buyer shall have the right to assign any of its rights or obligations under this Agreement to any affiliate or third party without Seller’s prior written consent. Seller shall not have the right to assign any of its rights or obligations under this Agreement without Buyer’s prior written consent. This Agreement shall be binding upon and inure to the benefit of the parties and their permitted successors and assigns.
6.7 Notices. All notices to be given by any party to this Agreement to the other party shall be in writing, and shall be (i) sent by email transmission; (ii) mailed by USPS® Certified Mail; or (ii) personally delivered, at the addresses set forth on the signature pages hereof (or at such other address for a party as specified by like notice) and shall be deemed given when received if sent by email transmission or personally delivered, or if mailed as provided herein, on the second business day after it is so placed in the mail. Any party at any time may give notice to the other party of a different address other than that set forth herein in accordance with the provisions of this Section.
6.8 Survival of Obligations. All representations and warranties of the parties set forth in this Agreement shall survive termination of this Agreement unless expressly waived by the parties hereof.
6.9 Counterparts. This Agreement may be executed in counterparts. Duly acknowledged facsimile signatures shall be deemed as originals.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be fully executed as of the day and year first above written.
Seller:
Joshua Patel
Signature: /s/ Joshua Patel
Address: 214 East 1200 South, Bountiful, Utah
Email: pateljoshua@hotmail.com
Buyer:
Mythic Collection, LLC
By: /s/ Joseph Mahavuthivanij
Name: Joseph Mahavuthivanij
Title: Managing Member - Mythic Markets, Inc
Address: 16 Lagoon Ct, San Rafael, CA 94903
Email: joe@mythicmarkets.com
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EXHIBIT 6.7
Purchase and Sale Agreement
THIS PURCHASE AGREEMENT (this “Agreement”) is made as of April 2, 2020, by and among Mythic Markets, Inc., a Delaware corporation (“Seller”), and Series COM-AF157, a series of Mythic Collection, LLC, a Delaware series limited liability company, (the “Buyer”), with respect to the following:
A. Seller owns certain personal property, described as a 1962 Amazing Fantasy #15 CGC FN/VF 7.0 (the “Property”).
B. Buyer is interested in acquiring the Property on the terms described in this Agreement for the benefit of the holders of Series COM-AF157 membership interests in the Buyer (the “Series Interests”).
IN CONSIDERATION OF the promises and mutual covenants contained in this Agreement, and for good and valuable consideration, the parties, intending to be legally bound, agree as follows:
1. Purchase and Sale of Property. In consideration of the covenants, representations and obligations of Buyer hereunder, and subject to the conditions set forth in this Agreement, Seller agrees to sell, transfer and assign, and Buyer agrees to purchase, the Property as of the date of the initial closing of the sale and issuance of the Series Interests pursuant to the offering circular (“Offering”) filed with the SEC pursuant to Regulation A, in the form previously shared with Seller (the “Effective Date”).
1.1 Purchase Price. Buyer will pay to Seller for the Property and for all obligations specified in this Agreement, if any, as the full and complete purchase price including any applicable sales or other taxes, the sum of U.S. $85,500.00 (the “Purchase Price”).
1.2 Payments. Within five (5) business days of the Effective Date, Buyer shall pay and deliver to Seller the Purchase Price net of any other consideration delivered to Seller prior to such date; provided, that, the Purchase Price may be paid in installments, which installments shall provide for a transfer of at least $48,500.00 of the Purchase Price to Seller within five (5) business days of the Effective Date with the remainder to be fully paid within twelve (12) months following the Effective Date. Buyer and Seller agree to take reasonable steps to confirm the method of payment of the Purchase Price on or around the Effective Date, including any information that Buyer requires to initiate a wire transfer to Seller.
2. Possession and Delivery. Absolute right to possession of the Property shall transfer to Buyer on the Effective Date. If delivery of the Property is to be made at a date after the Effective Date, it is Seller’s duty to ensure the Property is delivered in the same condition as when last inspected by Buyer. Seller shall remain partially entitled to the Property until such time the full Purchase Price is conveyed to Buyer, on a pro rata basis. If after one year after the Effective Date, the entire Purchase Price has not been transferred, the Seller shall be completely divested from the Property and shall receive, instead, Series Interests on a pro rata basis. The Seller may at any time during the term of the Offering, elect to acquire Series Interests by way of cancelation of the equivalent amount owed to it by Buyer under this Agreement. For purposes of this section, the value of the Series Interests acquired by or transferred to Seller from time to time shall be based on the initial value of such Series Interests pursuant to the Offering.
3. Taxes. Seller will pay all personal property taxes associated with ownership of the Property and accrued for the period ending on the Effective Date and, subject to Seller’s actual delivery of the Property to Buyer pursuant to Section 2 hereof, Buyer will pay all such personal property taxes that accrue thereafter.
4. Seller Representations and Warranties. Seller represents and warrants that: (i) it has good and marketable title to the Property and full authority to sell the Property; (ii) the Property is sold free and clear of all liens, indebtedness, or liabilities; and (iii) the Property is of actual quality, authenticity, history and value as described or disclosed by Seller to Buyer from time to time (collectively, the “Seller Representations”). Buyer may request a Bill of Sale from the Seller for the Property.
5. Indemnification. Seller shall indemnify, defend and hold Buyer and its affiliates, directors, officers, shareholders, employees, attorneys, agents and other representatives from and against any and all demands, claims, actions, causes of action, proceedings, assessments, losses, damages, liabilities, settlements, judgments, fines, penalties, interest, costs and expenses (including fees and disbursements of counsel), arising out of (i) any breach of any representation, warranty or covenant of this Agreement, and (ii) Seller’s use of the Property after the Effective Date.
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6. Miscellaneous.
6.1 Entire Agreement and Amendment. This Agreement constitutes the entire understanding among the parties with respect to the subject matter hereof, and supersedes all negotiations, prior discussions or other agreements, oral or written with respect to its subject matter. This Agreement may only be amended or modified by the written agreement of the parties.
6.2 Termination. Buyer may terminate this Agreement at any time prior to taking actual possession of the Property following the Effective Date pursuant to Section 2 hereof. In the event that Buyer terminates this Agreement for any reason other than Seller’s breach of the Seller Representations, Buyer’s obligations hereunder and any liabilities to Seller shall terminate effective immediately. In the event that Buyer terminates this Agreement in connection with Seller’s breach of the Seller Representations, Buyer’s obligations hereunder and any liabilities to Seller shall terminate effective immediately and Seller shall promptly return to Buyer any consideration delivered to Seller in connection with this Agreement.
6.3 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California, without giving effect to the conflict of laws principles thereof. The parties agree that any action brought by either party under or in relation to this Agreement, including without limitation to interpret or enforce any provision of this Agreement, shall be brought in, and each party agrees to and does hereby submit to the jurisdiction and venue of, any state or federal court located in the County of Santa Clara, California.
6.4 Fees and Costs. Each party shall bear its own attorneys’ fees and expenses in connection with the negotiation, preparation and consummation of this Agreement.
6.5 Assignment. Buyer shall have the right to assign any of its rights or obligations under this Agreement to any affiliate or third party without Seller’s prior written consent. Seller shall not have the right to assign any of its rights or obligations under this Agreement without Buyer’s prior written consent. This Agreement shall be binding upon and inure to the benefit of the parties and their permitted successors and assigns.
6.6 Notices. All notices to be given by any party to this Agreement to the other party shall be in writing, and shall be (i) sent by email transmission; (ii) mailed by USPS® Certified Mail; or (ii) personally delivered, at the addresses set forth on the signature pages hereof (or at such other address for a party as specified by like notice) and shall be deemed given when received if sent by email transmission or personally delivered, or if mailed as provided herein, on the second business day after it is so placed in the mail. Any party at any time may give notice to the other party of a different address other than that set forth herein in accordance with the provisions of this Section.
6.7 Survival of Obligations. All representations and warranties of the parties set forth in this Agreement shall survive termination of this Agreement unless expressly waived by the parties hereof.
6.8 Counterparts. This Agreement may be executed in counterparts. Duly acknowledged facsimile signatures shall be deemed as originals.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be fully executed as of the day and year first above written.
Seller:
MYTHIC MARKETS, INC.
By: /s/ Joseph Mahavuthivanij
Name: Joseph Mahavuthivanij
Title: CEO
Address: 16 Lagoon Ct, San Rafael, CA 94903
Email: joe@mythicmarkets.com
Buyer:
Series COM-AF157, a series of Mythic Collection, LLC
By: /s/ Joseph Mahavuthivanij
Name: Joseph Mahavuthivanij
Title: Managing Member - Mythic Markets, Inc
Address: 16 Lagoon Ct, San Rafael, CA 94903
Email: joe@mythicmarkets.com
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EXHIBIT 6.8

TRANSFER AGENT AGREEMENT
This Transfer Agent Agreement (“Agreement”) is entered into on this 14th day of January, 2020 (“Effective Date”) by and between WEST COAST STOCK TRANSFER, INC. and MYTHIC COLLECTION, LLC (the “Company”). The Parties hereunder hereby agree to the following:
| I. | THE PARTIES |
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| WEST COAST STOCK TRANSFER INC (“Agent”) is a company organized under the laws of the State of California with its principle office at 721 N. Vulcan Ave. Ste. 205, Encinitas, CA 92024. The Agent is a transfer agent registered with the Securities and Exchange Commission in the business of maintaining stock ownership and transfer records on behalf of companies, both private and public. | |
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| Mythic Collection, LLC_(“Company”) is a limited liability company formed under the laws of the State of Delaware with its principle office located at 16 Lagoon Court, San Rafael, CA 94903. Company wishes to utilize the services of Agent as its transfer agent. |
| II. | APPOINTMENT |
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| The Company agrees to appoint Agent as the Company’s transfer agent under, and in accordance with, the terms of the Agreement for as long as this Agreement remains in effect. The appointment shall commence as of the Effective Date. | |
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| III. | EFFECTIVE TERM |
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| This Agreement shall commence on the Effective Date and shall remain in effect perpetually UNLESS one or all parties to the Agreement request its termination; OR any terms of the Agreement are violated or unfulfilled; OR and such violation or unfulfillment by one of the parties continues for a period of ten business days after notice thereof is given to such party. | |
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| IV. | OBLIGATIONS OF COMPANY |
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| A. | Initial Preparation Documents |
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| The Company agrees to deliver, or caused to be delivered, to the Agent: |
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| i. | A copy of the Company’s Certificate of Formation, including all amendments thereto; and a copy of the current company Operating Agreement. |
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| ii. | A copy of the resolution of the Manager of the Company identifying the persons who are authorized to execute this Agreement on behalf of the Company (for purposes hereof, such signatory shall be Mythic Markets, Inc., the Company’s sole Manager). |
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| West Coast Stock Transfer Inc. 721 N. Vulcan Ave. Ste. 205 Encinitas, CA 92024 | Transfer Agent Agreement | Company Initials |
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| iii. | A list of all officers, directors, or other persons authorized to provide instructions to the Agent on behalf of the Company (for purposes hereof, such person shall be Mythic Markets, Inc., the Company’s sole Manager). |
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| iv. | The names and specimen signatures of all officers who are, and have been, authorized to sign certificates or debt instruments on behalf of the Company (for purposes hereof, such person shall be Mythic Markets, Inc., the Company’s sole Manager). |
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| v. | A list of all shareholders, for all issued and/or outstanding securities for any class of securities the Company (and its applicable Series) requests the Agent to maintain ownership records. The shareholder or unitholder list must include the holder’s full name; address; Tax ID Number or other government issued ID number; number of shares held; certificate numbers on outstanding physical certificates; the date of issuance; and whether the shares are free trading or restricted. The list should include designations for any shareholder considered an “affiliate” or “control” person as defined in the Securities Act of 1933. |
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| vi. | Specimens of outstanding certificates for all classes of securities of the Company. Additionally provide issuance resolutions approved by the authorized officers and/or directors. |
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| vii. | A list of all stopped certificates in which an adverse action has been, or is in the process of being, filed. Also include any court order provided by a court of competent jurisdiction. |
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| viii. | The name and contact information for the Company’s legal counsel. |
| B. | Ongoing Disclosure |
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| In the event of amendments or modifications that supersede the initial documents provided by the Company, the Company agrees to provide the Agent with written notifications together with copies of the all relevant resolutions as deemed necessary by the Agent within five (5) business days of its effectiveness, creation or approval. | |
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| C. | Payment of Cash and Maintenance Fees to Agent |
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| i. | Payment of Cash Fee to Agent. In consideration for the services to be rendered by Agent and described in Exhibit A and B of this Agreement together with other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company shall compensate Agent a set-up fee as detailed in the Exhibit A (“Cash Setup Fee”). The Cash Setup Fee shall be due and delivered to Agent upon execution of this Agreement. The Parties further agree that the Cash Setup Fee shall be deemed fully earned by Agent and non-refundable upon execution of this Agreement. |
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| ii. | Payment of Non-Cash Fee to Agent. In addition to payment of the Cash Setup Fee set forth in Section C (i) of this Agreement, the Company shall compensate Agent as described in Exhibit B (“Non-Cash Fee”) if applicable. |
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| iii. | Maintenance Fees. Monthly or Annual maintenance fees will begin the month immediately following the execution of this agreement or will continue in the event this agreement amends or supersedes a prior agreement with the Company or its parent or subsidiary. |
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| iv. | Regulatory Related Fees/Expenses. Company agrees to promptly reimburse Agent for any and all reasonable and documented expenses resulting from the service upon agent of a subpoena by a Federal Agency, State Agency, any Federal or state court of the United States of America, or a foreign court of competent jurisdiction, as reasonably determined by Agent, or a request from one of said agencies or courts, requiring or requesting that agent produce information or documents relating to the Company or its shareholders to said agency or court. Said expenses shall include but not be limited to travel expenses, copying charges, copying expenses, employee time, attorney’s fees, etc. Notwithstanding the foregoing or anything to the contrary herein, such obligation to reimburse Agent for any and all fees or expenses shall not apply to any inquiries, investigations, claims or other matters that relate to Agent’s business generally and not specifically related to matters involving actions by the Company. |
| West Coast Stock Transfer Inc. 721 N. Vulcan Ave. Ste. 205 Encinitas, CA 92024 | Transfer Agent Agreement | Company Initials |
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| The Company agrees to pay all amounts due to agent under this contract or as set forth in the Fee Schedule within thirty (30) days of invoicing unless specified otherwise in the particular invoice. Company agrees to pay interest rate of two percent (2%) per month on all amounts not paid when payment is due. Company agrees that Agent shall have a lien against the Company records to secure any amounts owing to Agent and shall not be required to deliver the records or copies of the records to Company until payment of all amounts due under this Agreement. In addition, Company agrees that Agent may, at its discretion, refuse to make any transfers or issuances of Company’s securities until past due accounts have been paid. |
| D. | Issuance, Transfer and Cancellation of Shares |
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| In processing transfers, the Company authorizes Agent to refuse to transfer and register the same until Agent is satisfied that the requested transfer is legally in order and Company shall indemnify and hold harmless Agent and Agent shall incur no liability for the refusal, in good faith, to make transfers which it, in its judgment, deemed improper or unauthorized. | |
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| E. | Indemnities |
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| Agent shall not be liable for any error of judgment or for any act done or step taken or omitted by it in good faith, except for its own negligence or misconduct. No action taken by Agent at the written direction of the Company shall, under any circumstances, be deemed misconduct by Agent. The Company does hereby agree to indemnify and hold harmless Agent, and each of all its officers, directors, employees, attorneys, and agents from and against any loss, damage or expense which may arise directly or indirectly from any actions, suits, threats, or claims of any kind or nature, other than any such resulting from the negligence or misconduct of Agent and shall, at the request of Agent, defend any action brought against Agent arising out of its services as transfer agent for the Company other than any such resulting from the negligence or misconduct of Agent. Should Agent make such request it may have its counsel monitor the defense at the Company’s expense and shall have the right, for any reason, to remove the defense from the Company and have its own counsel defend the action at the Company’s expense. Company shall not be liable for any error of judgment or for any act done or step taken or omitted by it in good faith, except for its own negligence or misconduct. Agent does hereby agree to indemnify and hold harmless Company, and each and all of its managers, officers, directors, employees, attorneys, and agents from and against any loss, damage or expense which may arise directly or indirectly from any actions, suits, threats, or claims of any kind or nature, other than any such resulting from the negligence or misconduct of the Company and shall, at the request of the Company, defend any action brought against Company arising out of Agent’s services as transfer agent for the Company arising out of Agent’s negligence or misconduct. Should the Company make such request it may have its counsel monitor the defense at the Agent’s expense and shall have the right, for any reason, to remove the defense from the Agent and have its own counsel defend the action at the Agent’s expense. | |
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| F. | Rights to Termination |
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| Company may terminate this Agreement at any time by providing thirty (30) days notice in the form of a resolution from the Manager of the Company. Upon receipt of notice and payment of any and all outstanding invoices, expenses, and fees which may include a termination fee as described in the Fee Agreement, Agent shall promptly deliver to its successor or the Company, its records as Agent. Notwithstanding anything to the contrary herein, Section XI (Confidential Information) shall survive any termination of this Agreement. |
| West Coast Stock Transfer Inc. 721 N. Vulcan Ave. Ste. 205 Encinitas, CA 92024 | Transfer Agent Agreement | Company Initials |
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| V. | OBLIGATIONS OF AGENT |
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| Agent may rely upon the Uniform Commercial Code, Section 17 of the Securities Exchange Act of 1934 and rules promulgated thereunder by the Securities and Exchange Commission, generally accepted industry practices, or any other statute, rule, case law, or interpretation which, in the opinion of counsel, applies to and/or provides protection to Agent and Company in the registration or refusal of registration. | |
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| The Company specifically agrees that Agent may employ such legal counsel, as deemed necessary, to advise it as to compliance with regards to the transfer or issuance of the Issuer’s securities, requests from the Company, and any other matters for which the Agent feels legal review is necessary; that Agent shall not be liable for any action reasonably taken, suffered or omitted by it in accordance with the advice of such counsel; and Company will reimburse Agent for all costs of employing such counsel as described in the Fee Agreement. | |
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| Upon receipt and review of the Initial Preparation Documents and Fees described in Section IV(A) and (C) respectively, Agent will transact in a manner consistent with the Company’s requests and pursuant to generally acceptable industry standards applicable to transfer agents. | |
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| Agent shall ensure that it adopts and enforces adequate policies relating to the protection of confidential information of the Company, including the names and other personal and identifiable information of its managers, directors, officers, employees, agents and stakeholders. Agent shall promptly address any weaknesses in Agent’s policies and protection of such information. Further, Agent agrees to promptly notify the Company in the case of any data breaches or other access of such information and Agent shall take all reasonable actions to recover and protect such information and its confidentiality. Agent agrees to maintain adequate commercial and data privacy insurance at all times during the term of this Agreement at its sole expense. |
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| A. | Unit Issuances |
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| Agent will issue original units of the Company upon receipt of the following items; |
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| i. | A written request from the Company stating the name of the shareholder, address, Tax ID Number, number of shares issued, delivery instructions, and whether the shares are free trading, control, or restricted. |
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| ii. | An executed copy of the Manager Issuance Resolution authorizing the offering or unit issuances on behalf of the Company. |
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| iii. | At the discretion of the Agent, a legal opinion from an attorney appointed by the Company, or if reasonably deemed necessary, an attorney appointed by the Agent, approving the issuance of units requested by the Company. |
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| iv. | At the discretion of the Agent, any other documentation reasonably deemed necessary. |
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| v. | Payment by the Company for Issuance Fees and Delivery Fees as described in the Fee Agreement. |
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| The transfer of shares shall be made effective by Agent, and shall be registered and new certificates issued upon surrender of the old certificates, in a form deemed by Agent properly endorsed for transfer, with all the necessary endorser’s signatures guaranteed in such form and manner as Agent requires by a guarantor reasonably believed by Agent to be responsible, accompanied by such assurances as Agent shall deem necessary or appropriate to evidence the genuineness and effectiveness of such necessary endorsement, and satisfactory evidence of compliance with all applicable laws relating to collection of taxes, if any. |
| West Coast Stock Transfer Inc. 721 N. Vulcan Ave. Ste. 205 Encinitas, CA 92024 | Transfer Agent Agreement | Company Initials |
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| C. | Records |
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| Agent shall maintain customary records in connection with its agency, all of which shall be available for examination and inspection by the Company at all reasonable times. | |
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| D. | Rights to Termination |
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| Agent may terminate this Agreement at any time upon ten business days’ notice and for any reason by providing written notice to the Company. At such time, Agent will expedite preparation of its records as Agent and will deliver the records to its successor or the Company. |
| VI. | TRANSMISSION AND RECEIPT OF NOTICES |
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| All notices, demands, requests, consents, approvals, or other communications (collectively referred as “Notices”) required or permitted hereunder shall be in writing and, unless otherwise specified, shall be (i) hand delivered, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) transmitted by facsimile, addressed as set forth in this Agreement or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the first business day following the date of sending by reputable courier service, fully prepaid, addressed to such address, (c) upon actual receipt of such mailing, if mailed or (4) upon receipt of facsimile by recipient, evidenced by a facsimile transmittal record indicating a successful transmission. |
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| West Coast Stock Transfer, Inc. | Mythic Collection, LLC |
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| 721 N. Vulcan Ave. Ste. 205 | 16 Lagoon Court |
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| Encinitas, CA 92024 | San Rafael, CA 94903 |
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| Telephone (619) 664-4780 |
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| Facsimile (760) 452-4423 |
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| With Copies to (optional): |
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| West Coast Stock Transfer Inc. 721 N. Vulcan Ave. Ste. 205 Encinitas, CA 92024 | Transfer Agent Agreement
| Company Initials |
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| VII. | MODIFICATION, WAIVER, AND AMENDMENTS |
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| This Agreement may not be modified or amended unless accepted in writing duly executed by both parties. Any waiver or any breach of any of the terms or conditions of this Agreement shall not operate as a waiver of any other breach of such terms or conditions or any of the other term or condition, nor shall any failure to insist upon strict performance or to enforce any provision hereof on any one occasion operate as a waiver of such provision or of any other provision hereof or a waiver of the right to insist upon strict performance or to enforce such provision on any subsequent occasion. Any waiver must be in writing. | |
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| VIII. | SEVERABILITY |
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| In the event that any one or more of the provisions or portion of any provision contained herein shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this agreement or the remaining portions of such provision, but this agreement shall be construed as if such invalid, illegal or unenforceable provisions or portions of provision had never been contained herein. | |
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| IX. | SUCCESSORS AND ASSIGNS |
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| Neither party may assign, directly or indirectly, all or part of its rights or obligations under this Agreement without the prior written consent of the other party, which consent shall not be unreasonably withheld or delayed. | |
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| X. | GOVERNING LAW AND JURISDICTION |
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| This Agreement will be construed and enforced in accordance with and governed by the laws of the State of California without reference to principals of conflicts of law. Each of the parties consents to the exclusive jurisdiction of the federal court whose districts encompass any part of the State of California or the State courts of the State of California in connection with any dispute arising under this Agreement and hereby waives, to the maximum extent permitted by law, any objection. Including any objection based on forum non convenes, to the bringing of any such proceeding in such jurisdictions. Each of the parties hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. At the election of Agent any dispute between the parties may be arbitrated rather than litigated in the courts, before the American Arbitration Association in San Diego, California and pursuant to its rules. Upon demand made by Agent to the Company, the Company agrees to submit to and participate in such arbitration. |
| West Coast Stock Transfer Inc. 721 N. Vulcan Ave. Ste. 205 Encinitas, CA 92024 | Transfer Agent Agreement | Company Initials |
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| XI | CONFIDENTIAL INFORMATION |
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| Agent agrees that during the term of this Agreement and thereafter it will not use or permit the use of Agent’s Confidential Information in any manner or for any purpose not expressly set forth in this Agreement, will hold such Confidential Information in confidence and protect it from unauthorized use and disclosure, and will not disclose such Confidential Information to any third parties except as specifically contemplated hereby. “Confidential Information” as used in this Agreement shall mean all information disclosed by Company to Agent, whether during or before the term of this Agreement, that is not generally known in the Company’s trade or industry and shall include, without limitation: (a) concepts and ideas relating to the development and distribution of content in any medium or to the current, future and proposed products or services of Company or its subsidiaries or affiliates; (b) trade secrets, drawings, inventions, know-how, software programs, and software source documents; (c) information regarding plans for research, development, new service offerings or products, marketing and selling, business plans, business forecasts, budgets and unpublished financial statements, licenses and distribution arrangements, prices and costs, suppliers and customers; (d) existence of any business discussions, negotiations or agreements between the parties; and (e) any information regarding the skills and compensation of employees, contractors or other agents of Company or its subsidiaries or affiliates. Confidential Information also includes proprietary or confidential information of any third party who may disclose such information to Company or Agent in the course of Company’s business. Confidential Information does not include information that (x) is or becomes a part of the public domain through no act or omission of Agent, (y) is disclosed to Agent by a third party without restrictions on disclosure, or (z) was in Agent’s lawful possession prior to the disclosure and was not obtained by Agent either directly or indirectly from Company. In addition, this section will not be construed to prohibit disclosure of Confidential Information to the extent that such disclosure is required by law or valid order of a court or other governmental authority; provided, however, that Agent shall first have given notice to Company and shall have made a reasonable effort to obtain a protective order requiring that the Confidential Information so disclosed be used only for the purposes for which the order was issued. All Confidential Information furnished to Agent by Company is the sole and exclusive property of Company or its suppliers or customers. Upon request by Company, Agent agrees to promptly deliver to Company the original and any copies of the Confidential Information. | |
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| XII. | COUNTERPARTS |
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| This Agreement may be executed in any number or counterparts, each of which shall be deemed to be an original instrument, but all of which taken together shall constitute one and the same agreement. Facsimile signatures shall be deemed to be original signatures for all purposes. |
| West Coast Stock Transfer Inc. 721 N. Vulcan Ave. Ste. 205 Encinitas, CA 92024 | Transfer Agent Agreement | Company Initials |
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| XIII. | INTEGRATION |
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| “The Transfer Agent Agreement, including Schedules, Addenda and Exhibits” thereto, constitutes the parties complete, entire and final agreement about the subject matter of the TA agreement and supersedes all prior and contemporaneous agreements regarding the subject matter. The TA agreement is an integrated contract and any previous negotiations between or representations made by the parties are of no legal consequence. | |
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| XIV. | RELIANCE |
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| The Parties represent and warrant that: (a) each has relied on his or its own judgment regarding the consideration for and language of this Agreement; (b) each has been given a reasonable period of time to consider this Agreement, has been advised to consult with independent counsel before signing this Agreement, and has consulted with independent counsel with respect hereto; (c) no party has in any way coerced or unduly influenced any other party to execute this Agreement; (d) no party has relied upon any advice or any representation of any other party’s counsel; and (e) this Agreement is written in a manner that is understandable to all of the parties. | |
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| XV. | INTERPRETATION |
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| This Agreement has been negotiated at arm’s length between persons sophisticated and knowledgeable in these types of matters. In addition, each party has been represented by experienced and knowledgeable legal counsel, or had the opportunity to consult such counsel. Accordingly, any normal rule of construction or legal decision that would require a court to resolve any ambiguities against the drafting party is hereby waived and shall not apply in interpreting this Agreement. |
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| West Coast Stock Transfer Inc. 721 N. Vulcan Ave. Ste. 205 Encinitas, CA 92024 | Transfer Agent Agreement | Company Initials |
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the Effective Date listed above.
| AGENT |
| COMPANY |
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| West Coast Stock Transfer, Inc. |
| Mythic Collection, LLC |
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| By: | /s/ Eddie Tobler |
| By: | /s/ Joseph Mahavuthivanij |
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| West Coast Stock Transfer Inc. 721 N. Vulcan Ave. Ste. 205 Encinitas, CA 92024 | Transfer Agent Agreement | Company Initials |
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EXHIBIT C
Company documents to be delivered:
| A. | A copy of the Articles of Incorporation and bylaws of the Company, including all the amendments thereto, and a copy of the Certificate of Incorporation as issued by the State of Incorporation. |
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| B. | Specimens of all forms of outstanding certificates for all classes of securities of the Company, in the forms approved by the Manager. |
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| C. | A resolution certifying the authorized and outstanding securities of the Company including a list of all outstanding securities together with a statement that future transfers may be made without restriction on all securities, except as to securities subject to a restriction noted on the face of said securities and in the corporate unit records. |
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| D. | A certified list of all shareholders, including identification of shareholders deemed to be “insiders” or “control persons” as defined in the Securities Act of 1933 & 1934 and other acts of Congress and rules and regulations of the United States Securities and Exchange Commission when applicable. |
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| E. | The names and specimen signatures of all officers who are and have been authorized to sign certificate for securities on behalf of the Company and the names and addresses of any other Transfer Agents or Registrars of securities of the Company. |
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| F. | A copy of the Resolution of the Manager of the Company, authorizing its execution of this Agreement and approving the terms and conditions herein including the agreement that in the event that there are any amendments or changes to any of the foregoing, the Company will issue written notification of such change or changes, together with copies of the relevant resolutions, instruments or other documents, specimen signatures, certificates, opinions or the like as the Agent may deem necessary or appropriate. |
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| G. | List of “stopped” certificates, in which an adverse action had been, or is in process of being, filed. |
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| H. | Completed Company Contact Form |
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UNANIMOUS WRITTEN CONSENT OF
DIRECTORS IN LIEU OF MEETING OF
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| 16 Lagoon Ct, San Rafael, CA 94903 |
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| Organized under the laws and State of |
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Pursuant to the Authority granted to directors to take action by unanimous consent without a meeting pursuant to the articles of organization of the Company. The Manager (“Directors”) of the Company, hereby certify consent and approve, as of the date indicated below, the following recitals and resolutions, as evidenced by their signature below.
WHEREAS, the Directors have been presented with the proposal to grant signing and authority to conduct business to the following officer(s) of the company, (collectively, the “Officers”).
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| Joseph Mahavuthivanij |
| CEO of the Manager, Mythic Markets, Inc |
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WHEREAS, the Directors believe it is in the best interest of the Company to authorize and approve the agreement as set forth herein.
RESOLVED, that the Officers of the Company, or any one of such Officers are hereby fully authorized and empowered for and on behalf of the Company to act as a signatory and authorized officer to conduct all business matters as it relates to West Coast Stock Transfer, Inc. (“West Coast”). Notwithstanding the foregoing, West Coast is authorized in its discretion to require action by any combination of Officers with respect to any matter concerning the Company.
INWITNESS WHEREOF, The undersigned have set forth their hands in their capacity as of 14th day of January, 2020.
| By: | /s/ Joseph Mahavuthivanij |
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EXHIBIT 6.9
Purchase and Sale Agreement
THIS PURCHASE AGREEMENT (this “Agreement”) is made as of June 29, 2020, by and among Mythic Markets, Inc., a Delaware corporation (“Seller”), and Series ART-BHERO, a series of Mythic Collection, LLC, a Delaware series limited liability company, (the “Buyer”), with respect to the following:
A. Seller owns certain personal property, described as an original painting by Douglas Shuler depicting a female warrior in black armor on a yellow background, which original painting is depicted on the Magic: The Gathering Benalish Hero trading card (the “Property”).
B. Buyer is interested in acquiring the Property on the terms described in this Agreement for the benefit of the holders of Series ART-BHERO membership interests in the Buyer (the “Series Interests”).
IN CONSIDERATION OF the promises and mutual covenants contained in this Agreement, and for good and valuable consideration, the parties, intending to be legally bound, agree as follows:
1. Purchase and Sale of Property. In consideration of the covenants, representations and obligations of Buyer hereunder, and subject to the conditions set forth in this Agreement, Seller agrees to sell, transfer and assign, and Buyer agrees to purchase, the Property as of the date of the initial closing of the sale and issuance of the Series Interests pursuant to the offering circular (“Offering”) filed with the SEC pursuant to Regulation A, in the form previously shared with Seller (the “Effective Date”).
1.1 Purchase Price. Buyer will pay to Seller for the Property and for all obligations specified in this Agreement, if any, as the full and complete purchase price including any applicable sales or other taxes, the sum of U.S. $39,000.00 (the “Purchase Price”).
1.2 Payments. Within five (5) business days of the Effective Date, Buyer shall pay and deliver to Seller the Purchase Price net of any other consideration delivered to Seller prior to such date. Buyer and Seller agree to take reasonable steps to confirm the method of payment of the Purchase Price on or around the Effective Date, including any information that Buyer requires to initiate a wire transfer to Seller.
2. Possession and Delivery. Absolute right to possession of the Property shall transfer to Buyer on the Effective Date. If delivery of the Property is to be made at a date after the Effective Date, it is Seller’s duty to ensure the Property is delivered in the same condition as when last inspected by Buyer. Seller shall remain partially entitled to the Property until such time the full Purchase Price is conveyed to Buyer, on a pro rata basis. If after one year after the Effective Date, the entire Purchase Price has not been transferred, the Seller shall be completely divested from the Property and shall receive, instead, Series Interests on a pro rata basis. The Seller may at any time during the term of the Offering, elect to acquire Series Interests by way of cancelation of the equivalent amount owed to it by Buyer under this Agreement. For purposes of this section, the value of the Series Interests acquired by or transferred to Seller from time to time shall be based on the initial value of such Series Interests pursuant to the Offering.
3. Taxes. Seller will pay all personal property taxes associated with ownership of the Property and accrued for the period ending on the Effective Date and, subject to Seller’s actual delivery of the Property to Buyer pursuant to Section 2 hereof, Buyer will pay all such personal property taxes that accrue thereafter.
4. Seller Representations and Warranties. Seller represents and warrants that: (i) it has good and marketable title to the Property and full authority to sell the Property; (ii) the Property is sold free and clear of all liens, indebtedness, or liabilities; and (iii) the Property is of actual quality, authenticity, history and value as described or disclosed by Seller to Buyer from time to time (collectively, the “Seller Representations”). Buyer may request a Bill of Sale from the Seller for the Property.
5. Indemnification. Seller shall indemnify, defend and hold Buyer and its affiliates, directors, officers, shareholders, employees, attorneys, agents and other representatives from and against any and all demands, claims, actions, causes of action, proceedings, assessments, losses, damages, liabilities, settlements, judgments, fines, penalties, interest, costs and expenses (including fees and disbursements of counsel), arising out of (i) any breach of any representation, warranty or covenant of this Agreement, and (ii) Seller’s use of the Property after the Effective Date.
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6. Miscellaneous.
6.1 Entire Agreement and Amendment. This Agreement constitutes the entire understanding among the parties with respect to the subject matter hereof, and supersedes all negotiations, prior discussions or other agreements, oral or written with respect to its subject matter. This Agreement may only be amended or modified by the written agreement of the parties.
6.2 Termination. Buyer may terminate this Agreement at any time prior to taking actual possession of the Property following the Effective Date pursuant to Section 2 hereof. In the event that Buyer terminates this Agreement for any reason other than Seller’s breach of the Seller Representations, Buyer’s obligations hereunder and any liabilities to Seller shall terminate effective immediately. In the event that Buyer terminates this Agreement in connection with Seller’s breach of the Seller Representations, Buyer’s obligations hereunder and any liabilities to Seller shall terminate effective immediately and Seller shall promptly return to Buyer any consideration delivered to Seller in connection with this Agreement.
6.3 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California, without giving effect to the conflict of laws principles thereof. The parties agree that any action brought by either party under or in relation to this Agreement, including without limitation to interpret or enforce any provision of this Agreement, shall be brought in, and each party agrees to and does hereby submit to the jurisdiction and venue of, any state or federal court located in the County of Santa Clara, California.
6.4 Fees and Costs. Each party shall bear its own attorneys’ fees and expenses in connection with the negotiation, preparation and consummation of this Agreement.
6.5 Assignment. Buyer shall have the right to assign any of its rights or obligations under this Agreement to any affiliate or third party without Seller’s prior written consent. Seller shall not have the right to assign any of its rights or obligations under this Agreement without Buyer’s prior written consent. This Agreement shall be binding upon and inure to the benefit of the parties and their permitted successors and assigns.
6.6 Notices. All notices to be given by any party to this Agreement to the other party shall be in writing, and shall be (i) sent by email transmission; (ii) mailed by USPS® Certified Mail; or (ii) personally delivered, at the addresses set forth on the signature pages hereof (or at such other address for a party as specified by like notice) and shall be deemed given when received if sent by email transmission or personally delivered, or if mailed as provided herein, on the second business day after it is so placed in the mail. Any party at any time may give notice to the other party of a different address other than that set forth herein in accordance with the provisions of this Section.
6.7 Survival of Obligations. All representations and warranties of the parties set forth in this Agreement shall survive termination of this Agreement unless expressly waived by the parties hereof.
6.8 Counterparts. This Agreement may be executed in counterparts. Duly acknowledged facsimile signatures shall be deemed as originals.
[Signature Page Follows]
| 2 |
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be fully executed as of the day and year first above written.
| Seller:
MYTHIC MARKETS, INC. | ||
| By: | /s/ Joseph Mahavuthivanij | |
| Name: | Joseph Mahavuthivanij | |
| Title: | CEO | |
Address: 16 Lagoon Ct, San Rafael, CA 94903
Email: joe@mythicmarkets.com
| Buyer:
Series ART-BHERO, a series of Mythic Collection, LLC | ||
| By: | /s/ Joseph Mahavuthivanij | |
| Name: | Joseph Mahavuthivanij | |
| Title: | Managing Member - Mythic Markets, Inc | |
Address: 16 Lagoon Ct, San Rafael, CA 94903
Email: joe@mythicmarkets.com
| 3 |
EXHIBIT 6.10
Purchase and Sale Agreement
THIS PURCHASE AGREEMENT (this “Agreement”) is made as of June 29, 2020, by and among Mythic Markets, Inc., a Delaware corporation (“Seller”), and Series COM-FF160, a series of Mythic Collection, LLC, a Delaware series limited liability company, (the “Buyer”), with respect to the following:
A. Seller owns certain personal property, described as a 1961 Fantastic Four #1 CGC FN 6.0 comic book (the “Property”).
B. Buyer is interested in acquiring the Property on the terms described in this Agreement for the benefit of the holders of Series COM-FF160 membership interests in the Buyer (the “Series Interests”).
IN CONSIDERATION OF the promises and mutual covenants contained in this Agreement, and for good and valuable consideration, the parties, intending to be legally bound, agree as follows:
1. Purchase and Sale of Property. In consideration of the covenants, representations and obligations of Buyer hereunder, and subject to the conditions set forth in this Agreement, Seller agrees to sell, transfer and assign, and Buyer agrees to purchase, the Property as of the date of the initial closing of the sale and issuance of the Series Interests pursuant to the offering circular (“Offering”) filed with the SEC pursuant to Regulation A, in the form previously shared with Seller (the “Effective Date”).
1.1 Purchase Price. Buyer will pay to Seller for the Property and for all obligations specified in this Agreement, if any, as the full and complete purchase price including any applicable sales or other taxes, the sum of U.S. $29,000.00 (the “Purchase Price”).
1.2 Payments. Within five (5) business days of the Effective Date, Buyer shall pay and deliver to Seller the Purchase Price net of any other consideration delivered to Seller prior to such date. Buyer and Seller agree to take reasonable steps to confirm the method of payment of the Purchase Price on or around the Effective Date, including any information that Buyer requires to initiate a wire transfer to Seller.
2. Possession and Delivery. Absolute right to possession of the Property shall transfer to Buyer on the Effective Date. If delivery of the Property is to be made at a date after the Effective Date, it is Seller’s duty to ensure the Property is delivered in the same condition as when last inspected by Buyer. Seller shall remain partially entitled to the Property until such time the full Purchase Price is conveyed to Buyer, on a pro rata basis. If after one year after the Effective Date, the entire Purchase Price has not been transferred, the Seller shall be completely divested from the Property and shall receive, instead, Series Interests on a pro rata basis. The Seller may at any time during the term of the Offering, elect to acquire Series Interests by way of cancelation of the equivalent amount owed to it by Buyer under this Agreement. For purposes of this section, the value of the Series Interests acquired by or transferred to Seller from time to time shall be based on the initial value of such Series Interests pursuant to the Offering.
3. Taxes. Seller will pay all personal property taxes associated with ownership of the Property and accrued for the period ending on the Effective Date and, subject to Seller’s actual delivery of the Property to Buyer pursuant to Section 2 hereof, Buyer will pay all such personal property taxes that accrue thereafter.
4. Seller Representations and Warranties. Seller represents and warrants that: (i) it has good and marketable title to the Property and full authority to sell the Property; (ii) the Property is sold free and clear of all liens, indebtedness, or liabilities; and (iii) the Property is of actual quality, authenticity, history and value as described or disclosed by Seller to Buyer from time to time (collectively, the “Seller Representations”). Buyer may request a Bill of Sale from the Seller for the Property.
5. Indemnification. Seller shall indemnify, defend and hold Buyer and its affiliates, directors, officers, shareholders, employees, attorneys, agents and other representatives from and against any and all demands, claims, actions, causes of action, proceedings, assessments, losses, damages, liabilities, settlements, judgments, fines, penalties, interest, costs and expenses (including fees and disbursements of counsel), arising out of (i) any breach of any representation, warranty or covenant of this Agreement, and (ii) Seller’s use of the Property after the Effective Date.
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6. Miscellaneous.
6.1 Entire Agreement and Amendment. This Agreement constitutes the entire understanding among the parties with respect to the subject matter hereof, and supersedes all negotiations, prior discussions or other agreements, oral or written with respect to its subject matter. This Agreement may only be amended or modified by the written agreement of the parties.
6.2 Termination. Buyer may terminate this Agreement at any time prior to taking actual possession of the Property following the Effective Date pursuant to Section 2 hereof. In the event that Buyer terminates this Agreement for any reason other than Seller’s breach of the Seller Representations, Buyer’s obligations hereunder and any liabilities to Seller shall terminate effective immediately. In the event that Buyer terminates this Agreement in connection with Seller’s breach of the Seller Representations, Buyer’s obligations hereunder and any liabilities to Seller shall terminate effective immediately and Seller shall promptly return to Buyer any consideration delivered to Seller in connection with this Agreement.
6.3 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California, without giving effect to the conflict of laws principles thereof. The parties agree that any action brought by either party under or in relation to this Agreement, including without limitation to interpret or enforce any provision of this Agreement, shall be brought in, and each party agrees to and does hereby submit to the jurisdiction and venue of, any state or federal court located in the County of Santa Clara, California.
6.4 Fees and Costs. Each party shall bear its own attorneys’ fees and expenses in connection with the negotiation, preparation and consummation of this Agreement.
6.5 Assignment. Buyer shall have the right to assign any of its rights or obligations under this Agreement to any affiliate or third party without Seller’s prior written consent. Seller shall not have the right to assign any of its rights or obligations under this Agreement without Buyer’s prior written consent. This Agreement shall be binding upon and inure to the benefit of the parties and their permitted successors and assigns.
6.6 Notices. All notices to be given by any party to this Agreement to the other party shall be in writing, and shall be (i) sent by email transmission; (ii) mailed by USPS® Certified Mail; or (ii) personally delivered, at the addresses set forth on the signature pages hereof (or at such other address for a party as specified by like notice) and shall be deemed given when received if sent by email transmission or personally delivered, or if mailed as provided herein, on the second business day after it is so placed in the mail. Any party at any time may give notice to the other party of a different address other than that set forth herein in accordance with the provisions of this Section.
6.7 Survival of Obligations. All representations and warranties of the parties set forth in this Agreement shall survive termination of this Agreement unless expressly waived by the parties hereof.
6.8 Counterparts. This Agreement may be executed in counterparts. Duly acknowledged facsimile signatures shall be deemed as originals.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be fully executed as of the day and year first above written.
| Seller:
MYTHIC MARKETS, INC. | ||
| By: | /s/ Joseph Mahavuthivanij | |
| Name: | Joseph Mahavuthivanij | |
| Title: | CEO | |
Address: 16 Lagoon Ct, San Rafael, CA 94903
Email: joe@mythicmarkets.com
| Buyer:
Series COM-FF160, a series of Mythic Collection, LLC | ||
| By: | /s/ Joseph Mahavuthivanij | |
| Name: | Joseph Mahavuthivanij | |
| Title: | Managing Member - Mythic Markets, Inc | |
Address: 16 Lagoon Ct, San Rafael, CA 94903
Email: joe@mythicmarkets.com
| 3 |
EXHIBIT 8.1
ESCROW AGREEMENT
FOR
CONTINGENT SECURITIES OFFERING
THIS ESCROW AGREEMENT, effective as of ______---_______, (“Escrow Agreement”), is by, between and among North Capital Private Securities Corporation, a Delaware Corporation and a registered Broker-Dealer, member FINRA and SIPC, located at 623 E. Ft. Union Blvd, Suite 101, Salt Lake City, UT 84047 (“NCPS”) as escrow agent hereunder (“NCPS” or “Escrow Agent”); North Capital Private Securities Corporation (“Placement Agent”), a Delaware Corporation located at 623 E. Ft. Union Blvd, Suite 101, Salt Lake City, UT 84047; and ____________________________, a __________________________ (“Issuer”) located at ___________________________________________________________________.
SUMMARY
A. Issuer has engaged Placement Agent to offer for sale up to $________________ of securities (the “Securities”) on a “best efforts” basis, in an offering pursuant to Regulation A+.
B. In accordance with the Form 1-A (“Offering Document”), subscribers to the Shares (the “Subscribers” and individually, a “Subscriber”) will be required to submit full payment for their respective investments at the time they enter into subscription agreements.
C. In accordance with the Offering Document, all payments in connection with subscriptions for Shares shall be sent directly to NCPS, and NCPS has agreed to accept, hold, and disburse such funds deposited with it thereon in accordance with the terms of this Escrow Agreement and in compliance with the Securities Exchange Act of 1934 Rule 15(c)2-4 and related SEC guidance and FINRA rules.
D. In order to establish the escrow of funds and to effect the provisions of the Offering Document, the parties hereto have entered into this Escrow Agreement.
E. The parties to this agreement agree to the Transmittal of Funds for Deposit Into the Escrow Account procedures located in Exhibit B.
STATEMENT OF AGREEMENT
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, for themselves, their successors and assigns, hereby agree as follows:
1. Definitions. In addition to the terms defined above, the following terms shall have the following meanings when used herein:
“Business Days” shall mean days when banks are open for business in the State of Delaware.
“Cash Investment” shall mean the number of Shares to be purchased by any Subscriber multiplied by the offering price per Share as set forth in the Offering Document.
“Cash Investment Instrument” shall mean an Automated Clearing House (“ACH”), made payable to or endorsed to NCPS in the manner described in Section 3(c) hereof, in full payment for the Shares to be purchased by any Subscriber.
“Escrow Funds” shall mean the funds deposited with NCPS pursuant to this Escrow Agreement.
“Expiration Date” means the date so designated on Exhibit A.
“Minimum Offering” shall mean the number Shares so designated on Exhibit A hereto.
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“Minimum Offering Notice” shall mean a written notification, signed by Placement Agent, pursuant to which the Placement Agent shall represent (1) that subscriptions for the Minimum Offering have been received, (2) that, to the best of Placement Agent’s knowledge after due inquiry and review of its records, Cash Investment Instruments in full payment for that number of Shares equal to or greater than the Minimum Offering have been received, deposited with and collected by NCPS, (3) and that such subscriptions have not been withdrawn, rejected or otherwise terminated, and (4) that the Subscribers have no statutory or regulatory rights of rescission without cause or all such rights have expired.
“Subscription Accounting” shall mean an accounting of all subscriptions for Shares received and accepted by Placement Agent as of the date of such accounting, indicating for each subscription the Subscriber’s name, social security number and address, the number and total purchase price of subscribed Securities, the date of receipt by Placement Agent of the Cash Investment Instrument, and notations of any nonpayment of the Cash Investment Instrument submitted with such subscription, any withdrawal of such subscription by the Subscriber, any rejection of such subscription by Placement Agent, or other termination, for whatever reason, of such subscription.
2. Appointment of and Acceptance by NCPS. Issuer, Placement Agent hereby appoint NCPS to serve as Escrow Agent hereunder, and NCPS hereby accepts such appointment in accordance with the terms of this Escrow Agreement.
3. Deposits into Escrow.
a. All Cash Investment Instruments shall be delivered directly to NCPS for deposit into the Escrow Account described on Exhibit B hereto. Each such deposit shall be accompanied by the following documents:
(1) a report containing such Subscriber’s name, social security number or taxpayer identification number, address and other information required for withholding purposes;
(2) a Subscription Accounting; and
(3) written instructions regarding the investment of such deposited funds in accordance with Section 6 hereof.
ALL FUNDS SO DEPOSITED SHALL REMAIN THE PROPERTY OF THE SUBSCRIBERS ACCORDING TO THEIR RESPECTIVE INTERESTS AND SHALL NOT BE SUBJECT TO ANY LIEN OR CHARGE BY NCPS OR BY JUDGMENT OR CREDITORS’ CLAIMS AGAINST ISSUER UNTIL RELEASED OR ELIGIBLE TO BE RELEASED TO ISSUER IN ACCORDANCE WITH SECTION 4(a) HEREOF.
b. Placement Agent and Issuer understand and agree that all Cash Investment Instruments received by NCPS hereunder are subject to collection requirements of presentment and final payment. Upon receipt, NCPS shall process each Cash Investment Instrument for collection, and the proceeds thereof shall be held as part of the Escrow Funds until disbursed in accordance with Section 4 hereof. If, upon presentment for payment, any Cash Investment Instrument is dishonored, NCPS’s sole obligation shall be to notify Placement Agent of such dishonor and to return such Cash Investment Instrument to the Investor should NCPS have Investor information sufficient to effect such a return or to Placement Agent should sufficient Investor information be unavailable. Notwithstanding the foregoing, if for any reason any Cash Investment Instrument is uncollectible after payment or disbursement of the funds represented thereby has been made by NCPS, Issuer shall immediately reimburse NCPS upon receipt from NCPS of written notice thereof.
Upon receipt of any Cash Investment Instrument that represents payment of an amount less than or greater than the Cash Investment, NCPS’s sole obligation shall be to notify Issuer and Placement Agent, depending upon the source of the of the Cash Investment Instrument, of such fact and to return such Cash Investment Instrument to the Investor should NCPS have Investor information sufficient to effect such a return or to Placement Agent should sufficient Investor information be unavailable.
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c. All Cash Investment Instruments shall be made payable to the order of, or endorsed to the order of, “NCPS / _______________________________-Escrow Account,” and NCPS shall not be obligated to accept, or present for payment, any Cash Investment Instrument that is not payable or endorsed in that manner.
4. Disbursements of Escrow Funds.
a. Completion of Minimum Offering. Subject to the provisions of Section 10 hereof, NCPS shall pay to Issuer the liquidated value of the Escrow Funds, by wire no later than one (1) business day following receipt of the following documents:
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| (3) | Instruction Letter (as defined below); and |
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| (4) | The Manager shall ensure that certain conditions are met before an Offering is closed, including (1) verification of the status of the Asset Seller of the applicable Underlying Asset, and agreements related to the asset sale, (2) verification of the condition of the Underlying Asset, and (3) other specific market conditions that must be satisfied in the Manager’s sole discretion. If these conditions are not met, investors will be promptly refunded their investment. |
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| (5) | Such other certificates, notices or other documents as NCPS shall reasonably require. |
NCPS shall disburse the Escrow Funds by wire from the Escrow Account in accordance with joint written instructions signed by both the Issuer, Placement Agent as to the disbursement of such funds (the “Instruction Letter”) in accordance with this Section 4(a). Notwithstanding the foregoing, NCPS shall not be obligated to disburse the Escrow Funds to Issuer if NCPS has reason to believe that (a) Cash Investment Instruments in full payment for that number of Securities equal to or greater than the Minimum Offering have not been received, deposited with and collected by NCPS, or (b) any of the certifications and opinions set forth in the Minimum Offering Notice are incorrect or incomplete.
After the initial disbursement of Escrow Funds to Issuer pursuant to this Section 4(a), NCPS shall pay to Issuer any additional funds received with respect to the Securities, by wire, promplty after receipt. Additional disbursments shall be subject to the issuer providing the following documentation:
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| (1) | Subscription Accounting Spreadsheet substantiating the sale of the Minimum Offering which shall be made available for electronic access to Issuer by NCPS; |
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| (2) | Instruction Letter (as defined above) from Issuer; and |
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| (3) | Such other certificates, notices or other documents as NCPS shall reasonably require. |
It is understood that any ACH transaction must comply with U. S. laws and NACHA rules. However, NCPS is not responsible for errors in the completion, accuracy, or timeliness of any transfer properly initiated by NCPS in accordance with joint written instructions occasioned by the acts or omissions of any third party financial institution or a party to the transaction, or the insufficiency or lack of availability of your funds on deposit in an external account.
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b. Rejection of Any Subscription or Termination of the Offering. No later than three (3) business days after receipt by NCPS of written notice (i) from Issuer that the Issuer intends to reject a Subscriber’s subscription, (ii) from Issuer, Placement Agent that there will be no closing of the sale of Securities to Subscribers, (iii) from any federal or state regulatory authority that any application by Issuer to conduct a banking business has been denied, or (iv) from the Securities and Exchange Commission or any other federal or state regulatory authority that a stop or similar order has been issued with respect to the Offering Document and has remained in effect for at least twenty (20) days, NCPS shall pay to the applicable Subscriber(s), by ACH , the amount of the Cash Investment paid by each Subscriber.
c. Expiration of Offering Period. Notwithstanding anything to the contrary contained herein, if NCPS shall not have received a Minimum Offering Notice on or before the Expiration Date, NCPS shall, within three (3) business days after such Expiration Date and without any further instruction or direction from Placement Agent or Issuer, return to each Subscriber, by ACH, the Cash Investment made by such Subscriber.
5. Suspension of Performance or Disbursement Into Court. If, at any time, (i) there shall exist any dispute between Placement Agent, Issuer, NCPS, any Subscriber or any other person with respect to the holding or disposition of all or any portion of the Escrow Funds or any other obligations of NCPS hereunder, or (ii) if at any time NCPS is unable to determine, to NCPS’s reasonable satisfaction, the proper disposition of all or any portion of the Escrow Funds or NCPS’s proper actions with respect to its obligations hereunder, or (iii) if Placement Agent and Issuer have not within 30 days of the furnishing by NCPS of a notice of resignation pursuant to Section 7 hereof appointed a successor NCPS to act hereunder, then NCPS may, in its reasonable discretion, take either or both of the following actions:
a. suspend the performance of any of its obligations (including without limitation any disbursement obligations) under this Escrow Agreement until such dispute or uncertainty shall be resolved to the sole satisfaction of NCPS or until a successor NCPS shall have been appointed (as the case may be).
b. petition (by means of an interpleader action or any other appropriate method) any court of competent jurisdiction in any venue convenient to NCPS, for instructions with respect to such dispute or uncertainty, and to the extent required or permitted by law, pay into such court all funds held by it in the Escrow Funds for holding and disposition in accordance with the instructions of such court.
NCPS shall have no liability to Placement Agent, Issuer, any Subscriber or any other person with respect to any such suspension of performance or disbursement into court, specifically including any liability or claimed liability that may arise, or be alleged to have arisen, out of or as a result of any delay in the disbursement of the Escrow Funds or any delay in or with respect to any other action required or requested of NCPS.
6. Investment of Funds. NCPS will not commingle Escrow Funds received by it in escrow with funds of others and shall not invest such Escrow Funds. The Escrow Funds will be held in a non-interest bearing account.
7. Resignation of NCPS. NCPS may resign and be discharged from the performance of its duties hereunder at any time by giving fifteen (15) business days prior written notice to the Placement Agent and the Issuer specifying a date when such resignation shall take effect. Upon any such notice of resignation, the Placement Agent and Issuer jointly shall appoint a successor NCPS hereunder prior to the effective date of such resignation. The retiring NCPS shall transmit all records pertaining to the Escrow Funds and shall pay all Escrow Funds to the successor NCPS, after making copies of such records as the retiring NCPS deems advisable. After any retiring NCPS’s resignation, the provisions of this Escrow Agreement shall inure to its benefit as to any actions taken or omitted to be taken by it while it was escrow agent under this Escrow Agreement. Any corporation or association into which NCPS may be merged or converted or with which it may be consolidated shall be the escrow agent under this Escrow Agreement without further act.
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8. Liability of NCPS.
a. NCPS undertakes to perform only such duties as are expressly set forth herein and no duties shall be implied. NCPS shall have no liability under and no duty to inquire as to the provisions of any agreement other than this Escrow Agreement, including without limitation the Offering Document. NCPS shall not be liable for any action taken or omitted by it in good faith except to the extent that a court of competent jurisdiction determines that NCPS’s gross negligence or willful misconduct was the primary cause of any loss to the Issuer, Placement Agent or any Subscriber. NCPS’s sole responsibility shall be for the safekeeping and disbursement of the Escrow Funds in accordance with the terms of this Escrow Agreement. NCPS shall have no implied duties or obligations and shall not be charged with knowledge or notice of any fact or circumstance not specifically set forth herein. NCPS may rely upon any notice, instruction, request or other instrument, not only as to its due execution, validity and effectiveness, but also as to the truth and accuracy of any information contained therein, which NCPS shall believe to be genuine and to have been signed or presented by the person or parties purporting to sign the same. In no event shall NCPS be liable for incidental, indirect, special, consequential or punitive damages (including, but not limited to lost profits), even if NCPS has been advised of the likelihood of such loss or damage and regardless of the form of action. NCPS shall not be obligated to take any legal action or commence any proceeding in connection with the Escrow Funds, any account in which Escrow Funds are deposited, this Escrow Agreement or the Offering Document, or to appear in, prosecute or defend any such legal action or proceeding. Without limiting the generality of the foregoing, NCPS shall not be responsible for or required to enforce any of the terms or conditions of any subscription agreement with any Subscriber or any other agreement between Issuer, Placement Agent and/or any Subscriber. NCPS shall not be responsible or liable in any manner for the performance by Issuer or any Subscriber of their respective obligations under any subscription agreement nor shall NCPS be responsible or liable in any manner for the failure of Issuer, Placement Agent or any third party (including any Subscriber) to honor any of the provisions of this Escrow Agreement. NCPS may consult legal counsel selected by it in the event of any dispute or question as to the construction of any of the provisions hereof or of any other agreement or of its duties hereunder, or relating to any dispute involving any party hereto, and shall incur no liability and shall be fully indemnified from any reasonable liability whatsoever in acting in accordance with the reasonable opinion or instruction of such counsel. Issuer shall promptly pay, upon demand, the reasonable fees and expenses of any such counsel.
b. NCPS is authorized, in its sole discretion, to comply with orders issued or process entered by any court with respect to the Escrow Funds, without determination by NCPS of such court’s jurisdiction in the matter. If any portion of the Escrow Funds is at any time attached, garnished or levied upon under any court order, or in case the payment, assignment, transfer, conveyance or delivery of any such property shall be stayed or enjoined by any court order, or in case any order, judgment or decree shall be made or entered by any court affecting such property or any part thereof, then and in any such event, NCPS is authorized, in its reasonable discretion, to rely upon and comply with any such order, writ, judgment or decree which it is advised by legal counsel selected by it is binding upon it without the need for appeal or other action; and if NCPS complies with any such order, writ, judgment or decree, it shall not be liable to any of the parties hereto or to any other person or entity by reason of such compliance even though such order, writ, judgment or decree may be subsequently reversed, modified, annulled, set aside or vacated. Notwithstanding the foregoing, NCPS shall provide the Issuer, Placement Agent with immediate notice of any such court order or similar demand and the opportunity to interpose an objection or obtain a protective order.
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9. Indemnification of NCPS. From and at all times after the date of this Escrow Agreement, Issuer shall, to the fullest extent permitted by law, defend, indemnify and hold harmless NCPS and each director, officer, employee, attorney, agent and affiliate of NCPS (collectively, the “Indemnified Parties”) against any and all actions, claims (whether or not valid), losses, damages, liabilities, costs and expenses of any kind or nature whatsoever (including without limitation reasonable attorneys’ fees, costs and expenses) incurred by or asserted against any of the Indemnified Parties from and after the date hereof, whether direct, indirect or consequential, as a result of or arising from or in any way relating to any claim, demand, suit, action or proceeding (including any inquiry or investigation) by any person, including without limitation Issuer, Placement Agent whether threatened or initiated, asserting a claim for any legal or equitable remedy against any person under any statute or regulation, including, but not limited to, any federal or state securities laws, or under any common law or equitable cause or otherwise, arising from or in connection with the negotiation, preparation, execution, performance or failure of performance of this Escrow Agreement or any transactions contemplated herein, whether or not any such Indemnified Party is a party to any such action, proceeding, suit or the target of any such inquiry or investigation; provided, however, that no Indemnified Party shall have the right to be indemnified hereunder for any liability finally determined by a court of competent jurisdiction, subject to no further appeal, to have resulted from the gross negligence or willful misconduct of such Indemnified Party. Each Indemnified Party shall, in its sole discretion, have the right to select and employ separate counsel with respect to any action or claim brought or asserted against it, and the reasonable fees of such counsel shall be paid upon demand by the Issuer. The obligations of Issuer under this Section 9 shall survive any termination of this Escrow Agreement and the resignation or removal of NCPS.
10. Compensation to NCPS.
a. Fees and Expenses. Issuer shall compensate NCPS for its services hereunder in accordance with Exhibit A attached hereto and, in addition, shall reimburse NCPS for all of its reasonable pre-approved out-of-pocket expenses, including attorneys’ fees, travel expenses, telephone and facsimile transmission costs, postage (including express mail and overnight delivery charges), copying charges and the like. The additional provisions and information set forth on Exhibit A are hereby incorporated by this reference, and form a part of this Escrow Agreement. All of the compensation and reimbursement obligations set forth in this Section 10 shall be payable by Issuer upon demand by NCPS. The obligations of Issuer under this Section 10 shall survive any termination of this Escrow Agreement and the resignation or removal of NCPS.
b. Disbursements from Escrow Funds to Pay NCPS. NCPS is authorized to and may disburse from time to time, to itself or to any Indemnified Party from the Escrow Funds (but only to the extent of Issuer’s rights thereto), the amount of any compensation and reimbursement of out-of-pocket expenses due and payable hereunder (including any amount to which NCPS or any Indemnified Party is entitled to seek indemnification pursuant to Section 9 hereof). NCPS shall notify Issuer of any disbursement from the Escrow Funds to itself or to any Indemnified Party in respect of any compensation or reimbursement hereunder and shall furnish to Issuer copies of all related invoices and other statements.
c. Security and Offset. Issuer hereby grants to NCPS and the Indemnified Parties a security interest in and lien upon the Escrow Funds (to the extent of Issuer’s rights thereto) to secure all obligations hereunder, and NCPS and the Indemnified Parties shall have the right to offset the amount of any compensation or reimbursement due any of them hereunder (including any claim for indemnification pursuant to Section 9 hereof) against the Escrow Funds (to the extent of Issuer’s rights thereto.) If for any reason the Escrow Funds available to NCPS and the Indemnified Parties pursuant to such security interest or right of offset are insufficient to cover such compensation and reimbursement, Issuer shall promptly pay such amounts to NCPS and the Indemnified Parties upon receipt of an itemized invoice.
11. Representations and Warranties.
a. Each of Placement Agent and Issuer respectively makes the following representations and warranties to NCPS:
(1) It is a corporation or limited liability company duly organized, validly existing, and in good standing under the laws of the state of its incorporation or organization, and has full power and authority to execute and deliver this Escrow Agreement and to perform its obligations hereunder.
(2) This Escrow Agreement has been duly approved by all necessary corporate action, including any necessary shareholder or membership approval, has been executed by its duly authorized officers, and constitutes its valid and binding agreement, enforceable in accordance with its terms.
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(3) The execution, delivery, and performance of this Escrow Agreement will not violate, conflict with, or cause a default under its articles of incorporation, articles of organization or bylaws, operating agreement or other organizational documents, as applicable, any applicable law or regulation, any court order or administrative ruling or decree to which it is a party or any of its property is subject, or any agreement, contract, indenture, or other binding arrangement to which it is a party or any of its property is subject. The execution, delivery and performance of this Escrow Agreement is consistent with and accurately described in the Offering Document as set forth in Sections 4(b) and 4(c) hereof, has been properly described therein.
(4) It hereby acknowledges that the status of NCPS is that of agent only for the limited purposes set forth herein, and hereby represents and covenants that no representation or implication shall be made that NCPS has investigated the desirability or advisability of investment in the Securities or has approved, endorsed or passed upon the merits of the investment therein and that the name of NCPS has not and shall not be used in any manner in connection with the offer or sale of the Securities other than to state that NCPS has agreed to serve as escrow agent for the limited purposes set forth herein.
(5) All of its representations and warranties contained herein are true and complete as of the date hereof and will be true and complete at the time of any deposit to or disbursement from the Escrow Funds.
b. Issuer further represents and warrants to NCPS that no party other than the parties hereto and the prospective Subscribers have, or shall have, any lien, claim or security interest in the Escrow Funds or any part thereof. No financing statement under the Uniform Commercial Code is on file in any jurisdiction claiming a security interest in or describing (whether specifically or generally) the Escrow Funds or any part thereof.
c. Placement Agent further represent and warrant to NCPS that the deposit with NCPS by NCPS of Cash Investment Instruments pursuant to Section 3 hereof shall be deemed a representation and warranty by NCPS that such Cash Investment Instrument represents a bona fide sale to the Subscriber described therein of the amount of Securities set forth therein, subject to and in accordance with the terms of the Offering Document.
12. Identifying Information. Issuer and Placement Agent acknowledge that a portion of the identifying information set forth on Exhibit A is being requested by NCPS in connection with the USA Patriot Act, Pub.L.107-56 (the “Act”). 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. For a non-individual person such as a business entity, a charity, a Trust, or other legal entity, we ask for documentation to verify its formation and existence as a legal entity. We may also ask to see financial statements, licenses, identification and authorization documents from individuals claiming authority to represent the entity or other relevant documentation.
13. Compliance with Privacy Laws. NCPS represents and warrants that its collection, access, use, storage, disposal and disclosure of Personal Data does and will comply with all applicable federal and state privacy and data protection laws, as well as all other applicable regulations. Without limiting the foregoing, NCPS shall implement administrative, physical and technical safeguards to protect Personal Data that are no less rigorous than accepted industry, and shall ensure that all such safeguards, including the manner in which Personal Data is collected, accessed, used, stored, processed, disposed of and disclosed, comply with applicable data protection and privacy laws, as well as the terms and conditions of this Escrow Agreement. NCPS shall use and disclose Personal Data solely and exclusively for the purposes for which the Personal Data, or access to it, is provided pursuant to the terms and conditions of this Escrow Agreement, and not use, sell, rent, transfer, distribute, or otherwise disclose or make available Personal Data for NCPS’s own purposes or for the benefit of any party other than Issuer. For purposes of this section, “Personal Data” shall mean information provided to NCPS by or at the direction of the Issuer, or to which access was provided to NCPS by or at the direction of the Issuer, in the course of NCPS’s performance under this Escrow Agreement that: (i) identifies or can be used to identify an individual (also known as a “data subject”) (including, without limitation, names, signatures, addresses, telephone numbers, e-mail addresses and other unique identifiers); or (ii) can be used to authenticate an individual (including, without limitation, employee identification numbers, government-issued identification numbers, passwords or PINs, financial account numbers, credit report information, biometric or health data, answers to security questions and other personal identifiers), including the identifying information on individuals described in Section 12.
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13. Consent to Jurisdiction and Venue. In the event that any party hereto commences a lawsuit or other proceeding relating to or arising from this Escrow Agreement, the parties hereto agree that the United States District Court for the State of Utah shall have the sole and exclusive jurisdiction over any such proceeding. If such court lacks federal subject matter jurisdiction, the parties agree that the Circuit Court in and for State of Utah shall have sole and exclusive jurisdiction. Any of these courts shall be proper venue for any such lawsuit or judicial proceeding and the parties hereto waive any objection to such venue. The parties hereto consent to and agree to submit to the jurisdiction of any of the courts specified herein and agree to accept service of process to vest personal jurisdiction over them in any of these courts.
14. Notice. All notices, approvals, consents, requests, and other communications hereunder shall be in writing and shall be deemed to have been given when the writing is delivered if given or delivered by hand, overnight delivery service or facsimile transmitter (with confirmed receipt) to the address or facsimile number set forth on Exhibit A hereto, or to such other address as each party may designate for itself by like notice, and shall be deemed to have been given on the date deposited in the mail, if mailed, by first-class, registered or certified mail, postage prepaid, addressed as set forth on Exhibit A hereto, or to such other address as each party may designate for itself by like notice.
15. Amendment or Waiver. This Escrow Agreement may be changed, waived, discharged or terminated only by a writing signed by Placement Agent, Issuer and NCPS. No delay or omission by any party in exercising any right with respect hereto shall operate as a waiver. A waiver on any one occasion shall not be construed as a bar to, or waiver of, any right or remedy on any future occasion.
16. Severability. To the extent any provision of this Escrow Agreement is prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Escrow Agreement.
17. Governing Law. This Escrow Agreement shall be construed and interpreted in accordance with the internal laws of the State of Delaware without giving effect to the conflict of laws principles thereof.
18. Entire Agreement. This Escrow Agreement constitutes the entire agreement between the parties relating to the acceptance, collection, holding, investment and disbursement of the Escrow Funds and sets forth in their entirety the obligations and duties of NCPS with respect to the Escrow Funds.
19. Binding Effect. All of the terms of this Escrow Agreement, as amended from time to time, shall be binding upon, inure to the benefit of and be enforceable by the respective successors and assigns of Placement Agent, Issuer and NCPS.
20. Execution in Counterparts. This Escrow Agreement may be executed in two or more counterparts, which when so executed shall constitute one and the same agreement.
21. Termination. Upon the first to occur of the disbursement of all amounts in the Escrow Funds or deposit of all amounts in the Escrow Funds into court pursuant to Section 5 or Section 8 hereof, this Escrow Agreement shall terminate and NCPS shall have no further obligation or liability whatsoever with respect to this Escrow Agreement or the Escrow Funds.
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THIS SPACE INTENTIONALLY LEFT BLANK
22. Dealings. NCPS and any stockholder, director, officer or employee of NCPS may buy, sell, and deal in any of the securities of the Issuer and become pecuniary interested in any transaction in which the Issuer may be interested, and contract and lend money to the Issuer and otherwise act as fully and freely as though it were not NCPS under this Escrow Agreement. Nothing herein shall preclude NCPS from acting in any other capacity for the Issuer or any other entity.
IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement to be executed under seal as of the date first above written.
ISSUER:
By: _______________________________
Printed Name: _______________________
Title: _____________
PLACEMENT AGENT:
North Capital Privates Securities Corporation
By: ______________________________
Name: Linsey Harkness
Title: Director of Operations
ESCROW AGENT:
North Capital Privates Securities Corporation
By: ______________________________
Name: Linsey Harkness
Title: Director of Operations
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EXHIBIT A
| 1. Definitions. | “Minimum Offering” means ____________________ (including offline investments). “Expiration Date” means twelve months from the effective date of this Agreement. |
2. ACH Instructions For North Capital Private Securities, Inc.
Institution: TRISTATE CAPITAL BANK
ABA: 043019003
Account Name: North Capital Private Securities, Corp
Account Number: 0220003339
FFC: OFFERING NAME AND INVESTOR NAME
(Instructions should be requested from NCPS prior to any international wire being initiated.)
| 3. | NCPS Fees |
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| Escrow Administration Fee: |
| $500 for the first 90 days, then $100 per month (or part there of) per crowd funding sub account. |
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| Out-of-Pocket Expenses: |
| Billed at cost |
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| Escrow Amendment: |
| $100.00 per amendment |
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| Transactional Costs: |
| $100.00 for each additional escrow break |
The Escrow Administration Fee is payable upon execution of the escrow documents. In the event the escrow is not funded, the Fee and all related expenses, including attorneys’ fees, remain due and payable, and if paid, will not be refunded. Annual fees cover a full year in advance, or any part thereof, and thus are not pro-rated in the year of termination.
The fees quoted in this schedule apply to services ordinarily rendered in the administration of an Escrow Account and are subject to reasonable adjustment based on final review of documents, or when NCPS is called upon to undertake unusual duties or responsibilities, or as changes in law, procedures, or the cost of doing business demand. Services in addition to and not contemplated in this Escrow Agreement, including, but not limited to, document amendments and revisions, non-standard cash and/or investment transactions, calculations, notices and reports, and legal fees, will be billed as extraordinary expenses and capped at $5,000.
Extraordinary fees are payable to NCPS for duties or responsibilities not expected to be incurred at the outset of the transaction, not routine or customary, and not incurred in the ordinary course of business. Payment of extraordinary fees is appropriate where particular inquiries, events or developments are unexpected, even if the possibility of such things could have been identified at the inception of the transaction.
Unless otherwise indicated, the above fees relate to the establishment of one escrow account. Additional sub-accounts governed by the same Escrow Agreement may incur an additional charge. Transaction costs include charges for wire transfers, internal transfers and securities transactions.
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4. Notice Addresses.
If to Issuer at:
ATTN:
Telephone: ____________________
E-mail:
If to NCPS at: North Capital Private Securities Corp
623 E Ft. Union Blvd, Suite 101
Salt Lake City, UT 84047
ATTN: Linsey Harkness
Telephone: (415) 937-0573
E-mail: lharkness@northcapital.com
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EXHIBIT B
Transmittal of Funds for Deposit Into the Escrow Account
The Selected Dealer agrees that it is bound by the terms of the Escrow Agreement executed by North Capital Private Securities. ACH transfers are the only acceptable method of payment for this offering. ACH and transfers should be sent directly to the Escrow Agent.
The delivery instructions are as follows:
| 1. | ACH Instructions For North Capital Private Securities, Inc. |
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| Institution: TRISTATE CAPITAL BANK ABA: 043019003 Account Name: North Capital Private Securities, Corp Account Number: 0220003339 FFC: OFFERING NAME AND INVESTOR NAME |
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EXHIBIT 11.1
CONSENT OF INDEPENDENT PUBLIC
ACCOUNTING FIRM
March 25, 2020
Mythic Markets, Inc as Manager
Mythic Collection, LLC
We hereby consent to the inclusion in the Offering Circular filed under Regulation A tier 2 on Form 1-A of our reports dated March 6, 2010, with respect to the balance sheet of Mythic Collection, LLC as of December 31, 2019 and the related statements of operations, members’ equity/deficit and cash flows for the inception period from January 30, 2019 (inception) to December 31, 2019 and the related notes to the financial statements.
/s/ IndigoSpire CPA Group
IndigoSpire CPA Group, LLC
Aurora, Colorado
March 25, 2020
EXHIBIT 13.1

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