SECURITIES AND EXCHANGE COMMISSION

 

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

PURSUANT TO SECTION 13 OR 15 (D)

 

of the

 

SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported) December 29, 2014

 

 

American Liberty Petroleum Corp.

(a Nevada Corporation)

 

Nevada 000-54004 98-0599151
(State of Incorporation) (Commission File Number) (IRS Employer Identification Number)

 

11251 Richmond Avenue, Suite F101

Houston, Texas 77082

(281) 600 - 6000

(Telephone number, including area code of agent for service)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o Pre-commencement communications pursuant to Rule 13e-4 (c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 
 

 

Item 1.01 Entry into a Material Definitive Agreement

 

2014 Directors, Officers and Consultants Stock Option, Stock Warrant and Stock Award Plan

 

Effective December 29, 2014, American Liberty Petroleum Corp. (the “ Company ”) entered into a Directors, Officers and Consultants Stock Option, Stock Warrant and Stock Award Plan (the “ Plan ”), attached as Exhibit 9.01.1. The Plan dedicates eleven million (11,000,000) shares of the Company’s $0.00001 par value Common Stock for issuance under the Plan, which increases after each issuance such that there are never less than ten percent (10%) of the authorized Common Stock shares dedicated to the Plan.

 

Employment and Consulting Contracts

 

Effective December 29, 2014, the Company entered into consulting agreements with Mr. Robert C. Rhodes and his consulting firm Rhodes Holdings LLC, the current Chairman & CEO of the Company (“ Rhodes ”) and Mr. Steven M. Plumb, CPA and his consulting firm Clear Financial Solutions, Inc., the current CFO of the Company (“ Plumb ”). The Rhodes agreement provided Rhodes the right to purchase thirty four million (34,000,000) Common Stock shares of the Company. Mr. Rhodes has exercised this right and, as a result, has purchased the shares. The Plumb agreement provided Plumb the right to purchase thirty four million (34,000,000) Common Stock shares of the Company. Mr. Plumb has exercised this right and, as a result, has purchased the shares. Rhodes and Plumb each now own thirty one percent (31%) of the Company, for a total ownership by management of sixty two percent (62%) of the issued and outstanding shares of the Company.

 

Agreement and Plan of Reorganization

 

Effective December 29, 2014, American Liberty Petroleum Corp. (the “Company”) entered into a definitive Agreement and Plan of Reorganization, to acquire of 100% of the outstanding equity interests of Avant Diagnostics, Inc. (“Avant”). Avant agreed to merge with Avant Acquisition Corp., a wholly owned subsidiary of the Company. Avant shareholders will be issued Script which will be convertible into shares of the Company’s Common Stock, after certain corporate actions by the Company become effective. Avant shareholders will be issued Common Stock at a one for one conversion rate to the post reverse split Company Common Stock shares. There will be 74,354,139 shares of Avant Common Stock outstanding at the time of consummation of the acquisition.

 

The Company will effect a reverse stock split, 1 for 17, change its name, reauthorize 480,000,000 Common Stock shares, and authorize Preferred Stock prior to converting the Script into Company Common Stock; these actions require the Company to file SEC mandated disclosure filings prior to these actions’ effectiveness. The Company expects the effectiveness of the filings to occur within thirty (30) days after the filing is submitted.

 

Avant Diagnostics, Inc. (http://avantdiagnostics.com) is a medical technology company based on the completion of the human genome sequencing project. Avant is developing specialized tests that are cutting edge in medical diagnostic testing and the OvaDx® Pre-Symptomatic Ovarian Cancer Screening Test is a leading breakthrough in commercializing these tests.

 

ITEM 3.02 - Unregistered Sales of Equity Securities

 

In connection with the employment and consulting contracts described in Item 1.01, we issued Robert C. Rhodes and his consulting firm Rhodes Holdings LLC thirty four million (34,000,000) shares of the Company’s Common Stock and Steven M. Plumb, CPA and his consulting firm Clear Financial Solutions, Inc. thirty four million (34,000,000) shares of the Company’s Common Stock.

 

The shares were issued without registration in reliance on the exemption in Section 4(2) of the Securities Act of 1933 and Rule 506(b) of Regulation D thereunder. We believe the exemption is available because of the substantial preexisting relation with the parties and the offering was made solely and only to the parties without any public offering or solicitation.

 

Section 4 - Matters Related to Accountants and Financial Statements

 

The Plan and Agreement of Reorganization that resulted in the acquisition of Avant Diagnostics, Inc. represented a material acquisition. Item 2.01 of Form 8-K requires filing financial statements and exhibits as provided in Item 9.01 of Form 8-K. Item 9.01(a)(4) of Form 8-K provides: “Financial statements required by this item may be filed with the initial report, or by amendment not later than 71 calendar days after the date that the initial report on Form 8-K must be filed.”

 

 
 

 

Avant Diagnostics, Inc. has completed a PCAOB audit for its year ending September 30, 2014, prepared by the independent auditing firm of LBB & Associates Ltd., LLP. The Company expects to file the financial statements required by Item 9.01(a)(4) of Form 8-K no later than two (2) days following the effectiveness of the mandated SEC filings required for the aforementioned actions.

 

ITEM 9.01 – Financial Statements and Exhibits

 

Exhibit 99.1 American Liberty Petroleum Corp., 2014 Directors, Officers and Consultants Stock Option, Stock Warrant and Stock Award Plan

 

Exhibit 99.2 Rhodes Holdings LLC Consulting Agreement with American Liberty Petroleum Corp.

 

Exhibit 99.3 Clear Financial Solutions, Inc. Consulting Agreement with American Liberty Petroleum Corp.

 

Exhibit 99.4 Agreement and Plan of Reorganization between American Liberty Petroleum Corp., Avant Diagnostics, Inc., and Avant Acquisition Corp.

 

Exhibit 99.5 Press Release

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

   
  American Liberty Petroleum Corp.
   
Date: December 30, 2014 By:   /s/ Robert C. Rhodes
 

Name: Robert C. Rhodes

Title: President and Chief Executive Officer

 

 

 

 

 

Exhibit 99.1

 

AMERICAN LIBERTY PETROLEUM CORP.
2014 DIRECTORS, OFFICERS AND CONSULTANTS
STOCK OPTION, STOCK WARRANT AND STOCK AWARD PLAN


 

ARTICLE I - PLAN

 

1.1  Purpose. This Plan is a plan for key employees, officers, directors, and consultants of the Company and its Affiliates and is intended to advance the best interests of the Company, its Affiliates, and its stockholders by providing those persons who have substantial responsibility for the management and growth of the Company and its Affiliates with additional incentives and an opportunity to obtain or increase their proprietary interest in the Company, thereby encouraging them to continue in the employ of the Company or any of its Affiliates. 

 

1.2 Rule 16b-3 Plan . The Company is subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “ 1934 Act ”), and therefore the Plan is intended to comply with all applicable conditions of Rule 16b-3 (and all subsequent revisions thereof) promulgated under the 1934 Act. To the extent any provision of the Plan or action by the Board of Directors or Committee fails to so comply, it shall be deemed null and void, to the extent permitted by law and deemed advisable by the Committee. In addition, the Board of Directors may amend the Plan from time to time, as it deems necessary in order to meet the requirements of any amendments to Rule 16b-3 without the consent of the shareholders of the Company. 

 

1.3 Effective Date of Plan . The Plan shall be effective December 19 th , 2014 (the “ Effective Date ”), provided that within one year of the Effective Date, the Plan shall have been approved by at least a majority vote of stockholders voting in person or by proxy at a duly held stockholders’ meeting, or if the provisions of the corporate charter, by-laws or applicable state law prescribes a greater degree of stockholder approval for this action, the approval by the holders of that percentage, at a duly held meeting of stockholders. No Incentive Option, Nonqualified Option, Stock Appreciation Right, Restricted Stock Award or Performance Stock Award shall be granted pursuant to the Plan ten years after the Effective Date.

 

ARTICLE II - DEFINITIONS

 

The words and phrases defined in this Article shall have the meaning set out in these definitions throughout this Plan, unless the context in which any such word or phrase appears reasonably requires a broader, narrower, or different meaning.

 

2.1 “ Affiliate ” means any subsidiary corporation. The term “ subsidiary corporation ” means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if, at the time of the action or transaction, each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in the chain.

 

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2.2 “ Award ” means each of the following granted under this Plan: Incentive Option, Nonqualified Option, Stock Appreciation Right, Restricted Stock Award or Performance Stock Award.

 

2.3 “ Board of Directors ” means the board of directors of the Company.

 

2.4 “ Code ” means the Internal Revenue Code of 1986, as amended.

 

2.5 “ Committee ” means the Compensation Committee of the Board of Directors, or if no Compensation Committee has been formed, then it shall mean the entire Board of Directors. It is intended that the Committee shall be comprised solely of at least two members who are both Non-Employee Directors and Outside Directors; provided, however, that until such time as two such directors are available to serve in such roles, the failure to meet this requirement shall not affect the validity of any grants under this Plan.

 

2.6 “ Company ” means American Liberty Petroleum Corp., a Nevada corporation.

 

2.7 “ Consultant ” means any person, including an advisor, engaged by the Company or Affiliate to render services and who is compensated for such services.

 

2.8 “ Eligible Persons ” shall mean, with respect to the Plan, those persons who, at the time that an Award is granted, are (i) Employees and all other key personnel, including officers and directors, of the Company or Affiliate, or (ii) Consultants or independent contractors who provide valuable services to the Company or Affiliate as determined by the Committee.

 

2.9 “ Employee ” means a person employed by the Company or any Affiliate to whom an Award is granted.

 

2.10 “ Fair Market Value ” of the Stock as of any date means (a) the average of the high and low sale prices of the Stock on that date on the principal securities exchange on which the Stock is listed; or (b) if the Stock is not listed on a securities exchange, the average of the high and low sale prices of the Stock on that date as reported on the Nasdaq; or (c) if the Stock is not listed on the Nasdaq, the average of the high and low bid quotations for the Stock on that date as reported by the National Quotation Bureau Incorporated; or (d) if none of the foregoing is applicable, an amount at the election of the Committee equal to (x), the average between the closing bid and ask prices per share of Stock on the last preceding date on which those prices were reported or (y) that amount as determined by the Committee in good faith.

 

2.11 “ Incentive Option ” means an option to purchase Stock granted under this Plan which is designated as an “ Incentive Option ” and satisfies the requirements of Section 422 of the Code.

 

2.12 “ Non-Employee Directors ” means that term as defined in Rule 16b-3 under the 1934 Act.

 

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2.13 “ Nonqualified Option ” means an option to purchase Stock granted under this Plan other than an Incentive Option.

 

2.14 “ Option ” means both an Incentive Option and a Nonqualified Option granted under this Plan to purchase shares of Stock.

 

2.15 “ Option Agreement ” means the written agreement by and between the Company and an Eligible Person, which sets out the terms of an Option.

 

2.16 “ Outside Director ” shall mean a member of the Board of Directors serving on the Committee who satisfies Section 162(m) of the Code.

 

2.17 “ Plan ” means the American Liberty Petroleum Corp. 2014 Directors, Officers, and Consultants Stock options, Stock Warrant and Stock Award Plan, as set out in this document and as it may be amended from time to time.

 

2.18 “ Plan Year ” means the Company’s fiscal year.

 

2.19 “ Performance Stock Award ” means an award of shares of Stock to be issued to an Eligible Person if specified predetermined performance goals are satisfied as described in Article VII.

 

2.20 “ Restricted Stock ” means Stock awarded or purchased under a Restricted Stock Agreement entered into pursuant to this Plan, together with (i) all rights, warranties or similar items attached or accruing thereto or represented by the certificate representing the stock and (ii) any stock or securities into which or for which the stock is thereafter converted or exchanged. The terms and conditions of the Restricted Stock Agreement shall be determined by the Committee consistent with the terms of the Plan.

 

2.21 “ Restricted Stock Agreement ” means an agreement between the Company or any Affiliate and the Eligible Person pursuant to which the Eligible Person receives a Restricted Stock Award subject to Article VI.

 

2.22 “ Restricted Stock Award ” means an Award of Restricted Stock.

 

2.23 “ Restricted Stock Purchase Price ” means the purchase price, if any, per share of Restricted Stock subject to an Award. The Committee shall determine the Restricted Stock Purchase Price. It may be greater than or less than the Fair Market Value of the Stock on the date of the Stock Award.

 

2.24 “ Stock ” means the Common Stock of the Company, $0.00001 par value, or, in the event that the outstanding shares of Common Stock are later changed into or exchanged for a different class of stock or securities of the Company or another corporation, that other stock or security.

 

2.25 “ Stock Appreciation Right ” and “ SAR ” means the right to receive the difference between the Fair Market Value of a share of Stock on the grant date and the Fair Market Value of the share of Stock on the exercise date.

 

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2.26 “ 10% Stockholder ” means an individual who, at the time the Option is granted, owns Stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or of any Affiliate. An individual shall be considered as owning the Stock owned, directly or indirectly, by or for his brothers and sisters (whether by the whole or half-blood), spouse, ancestors, and lineal descendants; and Stock owned, directly or indirectly, by or for a corporation, partnership, estate, or trust, shall be considered as being owned proportionately by or for its stockholders, partners, or beneficiaries.

 

ARTICLE III - ELIGIBILITY

 

The individuals who shall be eligible to receive Awards shall be those Eligible Persons of the Company or any of its Affiliates as the Committee shall determine from time to time. However, no member of the Committee shall be eligible to receive any Award or to receive Stock, Options, Stock Appreciation Rights, or any Performance Stock Award under any other plan of the Company or any of its Affiliates, if to do so would cause the individual not to be a Non-Employee Director or Outside Director. The Board of Directors may designate one or more individuals who shall not be eligible to receive any Award under this Plan or under other similar plans of the Company.

 

ARTICLE IV - GENERAL PROVISIONS RELATING TO AWARDS

 

4.1 Authority to Grant Awards. The Committee may grant to those Eligible Persons of the Company or any of its Affiliates, as it shall from time to time determine, Awards under the terms and conditions of this Plan. The Committee shall determine subject only to any applicable limitations set out in this Plan, the number of shares of Stock to be covered by any Award to be granted to an Eligible Person.

 

4.2 Dedicated Shares. The total number of shares of Stock with respect to which Awards may be granted under the Plan shall be fifty one million (11,000,000) pre-split Common Stock shares. The shares may be treasury shares or authorized but unissued shares. The number of shares stated in this Section 4.2 shall be subject to adjustment in accordance with the provisions of Section 4.5. In the event that any outstanding Award shall expire or terminate for any reason or any Award is surrendered, the shares of Stock allocable to the unexercised portion of that Award may again be subject to an Award under the Plan.

 

Immediately upon the grant of any Award, the number of shares that may be issued or optioned under the Plan will be increased. The number of Shares of such increase shall be an amount such that immediately after such increase the total number of shares issuable under the Plan and reserved for issuance upon exercise of outstanding options, warrants or conversion of shares of preferred stock will equal ten percent (10%) of the total number of issued and outstanding shares. Such increase in the number of shares subject to the Plan shall occur without the necessity of any further corporate action of any kind or character.

 

4.3 Non-transferability . Awards shall not be transferable by the Eligible Person otherwise than by will or under the laws of descent and distribution, or pursuant to a qualified domestic relations order (as defined by the Code or the rules thereunder), and shall be exercisable, during the Eligible Person’s lifetime, only by him or a transferee permitted by this Section 4. Any attempt to transfer an Award other than under the terms of the Plan and the Agreement shall terminate the Award and all rights of the Eligible Person to that Award.

 

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4.4 Requirements of Law . The Company shall not be required to sell or issue any Stock under any Award if issuing that Stock would constitute or result in a violation by the Eligible Person or the Company of any provision of any law, statute, or regulation of any governmental authority. Specifically, in connection with any applicable statute or regulation relating to the registration of securities, upon exercise of any Option or pursuant to any Award, the Company shall not be required to issue any Stock unless the Committee has received evidence satisfactory to it to the effect that the holder of that Option or Award will not transfer the Stock except in accordance with applicable law, including receipt of an opinion of counsel satisfactory to the Company to the effect that any proposed transfer complies with applicable law. The determination by the Committee on this matter shall be final, binding, and conclusive. The Company may, but shall in no event be obligated to, register any Stock covered by this Plan pursuant to applicable securities laws of any country or any political subdivision. In the event the Stock issuable on exercise of an Option or pursuant to an Award is not registered, the Company may imprint on the certificate evidencing the Stock any legend that counsel for the Company considers necessary or advisable to comply with applicable law. The Company shall not be obligated to take any other affirmative action in order to cause the exercise of an Option or vesting under an Award, or the issuance of shares pursuant thereto, to comply with any law or regulation of any governmental authority.

 

4.5 Changes in the Company’s Capital Structure.

 

(a)  The existence of outstanding Options or Awards shall not affect in any way the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Company’s capital structure or its business, or any merger or consolidation of the Company, or any issue of bonds, debentures, preferred or prior preference stock ahead of or affecting the Stock or its rights, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise. If the Company shall effect a subdivision or consolidation of shares or other capital readjustment, the payment of a Stock dividend, or other increase or reduction of the number of shares of the Stock outstanding, without receiving compensation for it in money, services or property, then (a) the number, class, and per share price of shares of Stock subject to outstanding Options under this Plan shall be appropriately adjusted in such a manner as to entitle an Eligible Person to receive upon exercise of an Option, for the same aggregate cash consideration, the equivalent total number and class of shares he would have received had he exercised his Option in full immediately prior to the event requiring the adjustment; and (b) the number and class of shares of Stock then reserved to be issued under the Plan shall be adjusted by substituting for the total number and class of shares of Stock then reserved, that number and class of shares of Stock that would have been received by the owner of an equal number of outstanding shares of each class of Stock as the result of the event requiring the adjustment.

 

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(b)  If the Company is merged or consolidated with another corporation and the Company is not the surviving corporation, or if the Company is liquidated or sells or otherwise disposes of substantially all its assets while unexercised Options remain outstanding under this Plan (each of the foregoing referred to as a “Corporate Transaction”):

 

(i) Subject to the provisions of clause (ii) below, in the event of such a Corporate Transaction, any unexercised Options shall automatically accelerate so that they shall, immediately prior to the specified effective date for the Corporate Transaction become 100% vested and exercisable; provided, however, that any unexercised Options shall not accelerate if and to the extent such Option is, in connection with the Corporate Transaction, either to be assumed by the successor corporation or parent thereof (the “Successor Corporation”) or to be replaced with a comparable award for the purchase of shares of the capital stock of the Successor Corporation. Whether or not any unexercised Option is assumed or replaced shall be determined by the Company and the Successor Corporation in connection with the Corporate Transaction. The Board of Directors shall make the determination of what constitutes a comparable award to the unexercised Option, and its determination shall be conclusive and binding. The unexercised Option shall terminate and cease to remain outstanding immediately following the consummation of the Corporate Transaction, except to the extent assumed by the Successor Corporation.

 

(ii)  All outstanding Options may be canceled by the Board of Directors as of the effective date of any Corporate Transaction, if (i) notice of cancellation shall be given to each holder of an Option and (ii) each holder of an Option shall have the right to exercise that Option in full (without regard to any limitations set out in or imposed under this Plan or the Option Agreement granting that Option) during a period set by the Board of Directors preceding the effective date of the merger, consolidation, liquidation, sale, or other disposition and, if in the event all outstanding Options may not be exercised in full under applicable securities laws without registration of the shares of Stock issuable on exercise of the Options, the Board of Directors may limit the exercise of the Options to the number of shares of Stock, if any, as may be issued without registration. The method of choosing which Options may be exercised, and the number of shares of Stock for which Options may be exercised, shall be solely within the discretion of the Board of Directors.

 

(c)  After a merger of one or more corporations into the Company or after a consolidation of the Company and one or more corporations in which the Company shall be the surviving corporation, each Eligible Person shall be entitled to have his Restricted Stock and shares earned under a Performance Stock Award appropriately adjusted based on the manner the Stock was adjusted under the terms of the agreement of merger or consolidation.

 

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(d)  In each situation described in this Section 4.5, the Committee will make similar adjustments, as appropriate, in outstanding Stock Appreciation Rights.

 

(e)  The issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, for cash or property, or for labor or services either upon direct sale or upon the exercise of rights or warrants to subscribe for them, or upon conversion of shares or obligations of the Company convertible into shares or other securities, shall not affect, and no adjustment by reason of such issuance shall be made with respect to, the number, class, or price of shares of Stock then subject to outstanding Awards.

 

4.6 Election under Section 83(b) of the Code . No Employee shall exercise the election permitted under Section 83(b) of the Code without written approval of the Committee. Any Employee doing so shall forfeit all Awards issued to him under this Plan.

 

ARTICLE V - OPTIONS AND STOCK APPRECIATION RIGHTS

 

5.1 Type of Option . The Committee shall specify at the time of grant whether a given Option shall constitute an Incentive Option or a Nonqualified Option. Incentive Stock Options may only be granted to Employees.

 

5.2 Option Exercise Price . The price at which Stock may be purchased under an Incentive Option shall not be less than the greater of: (a) 100% of the Fair Market Value of the shares of Stock on the date the Option is granted or (b) the aggregate par value of the shares of Stock on the date the Option is granted. The Committee in its discretion may provide that the price at which shares of Stock may be purchased under an Incentive Option shall be more than 100% of Fair Market Value. In the case of any 10% Stockholder, the price at which shares of Stock may be purchased under an Incentive Option shall not be less than 110% of the Fair Market Value of the Stock on the date the Incentive Option is granted. The price at which shares of Stock may be purchased under a Nonqualified Option shall be such price as shall be determined by the Committee in its sole discretion but in no event lower than the par value of the shares of Stock on the date the Option is granted.

 

5.3 Duration of Options and SARS . No Option or SAR shall be exercisable after the expiration of ten (10) years from the date the Option or SAR is granted. In the case of a 10% Stockholder, no Incentive Option shall be exercisable after the expiration of five years from the date the Incentive Option is granted.

 

5.4 Amount Exercisable -- Incentive Options. Each Option may be exercised from time to time, in whole or in part, in the manner and subject to the conditions the Committee, in its sole discretion, may provide in the Option Agreement, as long as the Option is valid and outstanding. To the extent that the aggregate Fair Market Value (determined as of the time an Incentive Option is granted) of the Stock with respect to which Incentive Options first become exercisable by the optionee during any calendar year (under this Plan and any other incentive stock option plan(s) of the Company or any Affiliate) exceeds $100,000, the portion in excess of $100,000 of the Incentive Option shall be treated as a Nonqualified Option. In making this determination, Incentive Options shall be taken into account in the order in which they were granted.

 

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5.5 Exercise of Options . Each Option shall be exercised by the delivery of written notice to the Committee setting forth the number of shares of Stock with respect to which the Option is to be exercised, together with:

 

(a) cash, certified check, bank draft, or postal or express money order payable to the order of the Company for an amount equal to the option price of the shares;

 

(b) stock at its Fair Market Value on the date of exercise (if approved in advance in writing by the Committee);

 

(c) an election to make a cashless exercise through a registered broker-dealer (if approved in advance in writing by the Committee);

 

(d) an election to have shares of Stock, which otherwise would be issued on exercise, withheld in payment of the exercise price (if approved in advance in writing by the Committee); and/or

 

(e) any other form of payment which is acceptable to the Committee, including without limitation, payment in the form of a promissory note, and specifying the address to which the certificates for the shares are to be mailed.

 

As promptly as practicable after receipt of written notification and payment, the Company shall deliver to the Eligible Person certificates for the number of shares with respect to which the Option has been exercised, issued in the Eligible Person’s name. If shares of Stock are used in payment, the aggregate Fair Market Value of the shares of Stock tendered must be equal to or less than the aggregate exercise price of the shares being purchased upon exercise of the Option, and any difference must be paid by cash, certified check, bank draft, or postal or express money order payable to the order of the Company. Delivery of the shares shall be deemed effected for all purposes when a stock transfer agent of the Company shall have deposited the certificates in the United States mail, addressed to the Eligible Person, at the address specified by the Eligible Person.

 

Whenever an Option is exercised by exchanging shares of Stock owned by the Eligible Person, the Eligible Person shall deliver to the Company certificates registered in the name of the Eligible Person representing a number of shares of Stock legally and beneficially owned by the Eligible Person, free of all liens, claims, and encumbrances of every kind, accompanied by stock powers duly endorsed in blank by the record holder of the shares represented by the certificates (with signature guaranteed by a commercial bank or trust company or by a brokerage firm having a membership on a registered national stock exchange). The delivery of certificates upon the exercise of Options is subject to the condition that the person exercising the Option provides the Company with the information the Company might reasonably request pertaining to exercise, sale or other disposition.

 

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5.6 Stock Appreciation Rights . All Eligible Persons shall be eligible to receive Stock Appreciation Rights. The Committee shall determine the SAR to be awarded from time to time to any Eligible Person. The grant of a SAR to be awarded from time to time shall neither entitle such person to, nor disqualify such person from, participation in any other grant of awards by the Company, whether under this Plan or any other plan of the Company. If granted as a stand-alone SAR Award, the terms of the Award shall be provided in a Stock Appreciation Rights Agreement.

 

5.7 Stock Appreciation Rights in Tandem with Options . Stock Appreciation Rights may, at the discretion of the Committee, be included in each Option granted under the Plan to permit the holder of an Option to surrender that Option, or a portion of the part which is then exercisable, and receive in exchange, upon the conditions and limitations set by the Committee, an amount equal to the excess of the Fair Market Value of the Stock covered by the Option, or the portion of it that was surrendered, determined as of the date of surrender, over the aggregate exercise price of the Stock. In the event of the surrender of an Option, or a portion of it, to exercise the Stock Appreciation Rights, the shares represented by the Option or that part of it which is surrendered, shall not be available for reissuance under the Plan. Each Stock Appreciation Right issued in tandem with an Option (a) will expire not later than the expiration of the underlying Option, (b) may be for no more than 100% of the difference between the exercise price of the underlying Option and the Fair Market Value of a share of Stock at the time the Stock Appreciation Right is exercised, (c) is transferable only when the underlying Option is transferable, and under the same conditions, and (d) may be exercised only when the underlying Option is eligible to be exercised.

 

5.8 Conditions of Stock Appreciation Rights . All Stock Appreciation Rights shall be subject to such terms, conditions, restrictions or limitations as the Committee deems appropriate, including by way of illustration but not by way of limitation, restrictions on transferability, requirement of continued employment, individual performance, financial performance of the Company, or payment of any applicable employment or withholding taxes.

 

5.9 Payment of Stock Appreciation Rights . The amount of payment to which the Eligible Person who reserves an SAR shall be entitled upon the exercise of each SAR shall be equal to the amount, if any by which the Fair Market Value of the specified shares of Stock on the exercise date exceeds the Fair Market Value of the specified shares of Stock on the date of grant of the SAR. The SAR shall be paid in either cash or Stock, as determined in the discretion of the Committee as set forth in the SAR agreement. If the payment is in Stock, the number of shares to be paid shall be determined by dividing the amount of such payment by the Fair Market Value of Stock on the exercise date of such SAR.

 

5.10 Exercise on Termination of Employment . Unless it is expressly provided otherwise in the Option or SAR agreement, Options and SAR’s granted to Employees shall terminate three months after severance of employment of the Employee from the Company and all Affiliates for any reason, with or without Cause (defined below), other than death, retirement under the then established rules of the Company, or severance for disability. The Committee shall determine whether authorized leave of absence or absence on military or government service shall constitute severance of the employment of the Employee at that time. Notwithstanding anything contained herein, no Option or SAR may be exercised after termination of employment for any reason (whether by death, disability, retirement or otherwise) if it has not vested as at the date of termination of employment. Cause shall mean any of the following: (A) conviction of a crime (including conviction on a nolo contendere plea) involving a felony or dishonesty, or moral turpitude; (B) deliberate and continual refusal to perform employment duties reasonably requested by the Company or an affiliate after thirty (30) days’ written notice by certified mail of such failure to perform, specifying that the failure constitutes cause (other than as a result of vacation, sickness, illness or injury); (C) fraud or embezzlement as determined by an independent certified public accountant firm; or (D) gross misconduct or gross negligence in connection with the business of the Company or an affiliate which has substantial effect on the Company or the affiliate.

 

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5.11 Death . If, before the expiration of an Option or SAR, the Eligible Person, whether in the employ of the Company or after he has retired or was severed for disability, or otherwise dies, the Option or SAR may be exercised until the earlier of the Option’s or SAR’s expiration date or six months following the date of his death, unless it is expressly provided otherwise in the Option or SAR agreement. After the death of the Eligible Person, his executors, administrators, or any persons to whom his Option or SAR may be transferred by will or by the laws of descent and distribution shall have the right, at any time prior to the Option’s or SAR’s expiration or termination, whichever is earlier, to exercise it, to the extent to which he was entitled to exercise it immediately prior to his death, unless it is expressly provided otherwise in the Option or SAR’s agreement.

 

5.12 Retirement . Unless it is expressly provided otherwise in the Option Agreement, before the expiration of an Option or SAR, the Employee shall be retired in good standing from the employ of the Company under the then established rules of the Company, the Option or SAR may be exercised until the earlier of the Option’s or SAR’s expiration date or three months following the date of his retirement, unless it is expressly provided otherwise in the Option or SAR agreement.

 

5.13 Disability . If, before the expiration of an Option or SAR, the Employee shall be severed from the employ of the Company for disability, the Option or SAR shall terminate on the earlier of the Option’s or SAR’s expiration date or six months after the date he was severed because of disability, unless it is expressly provided otherwise in the Option or SAR agreement.

 

5.14 Substitution Options . Options may be granted under this Plan from time to time in substitution for stock options held by employees of other corporations who are about to become employees of or affiliated with the Company or any Affiliate as the result of a merger or consolidation of the employing corporation with the Company or any Affiliate, or the acquisition by the Company or any Affiliate of the assets of the employing corporation, or the acquisition by the Company or any Affiliate of stock of the employing corporation as the result of which it becomes an Affiliate of the Company. The terms and conditions of the substitute Options granted may vary from the terms and conditions set out in this Plan to the extent the Committee, at the time of grant, may deem appropriate to conform, in whole or in part, to the provisions of the stock options in substitution for which they are granted.

 

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5.15 Reload Options . Without in any way limiting the authority of the Board of Directors or Committee to make or not to make grants of Options hereunder, the Board of Directors or Committee shall have the authority (but not an obligation) to include as part of any Option Agreement a provision entitling the Eligible Person to a further Option (a “ Reload Option ”) in the event the Eligible Person exercises the Option evidenced by the Option Agreement, in whole or in part, by surrendering other shares of Stock in accordance with this Plan and the terms and conditions of the Option Agreement. Any such Reload Option (a) shall be for a number of shares equal to the number of shares surrendered as part or all of the exercise price of such Option; (b) shall have an expiration date which is the greater of (i) the same expiration date of the Option the exercise of which gave rise to such Reload Option or (ii) one year from the date of grant of the Reload Option; and (c) shall have an exercise price which is equal to one hundred percent (100%) of the Fair Market Value of the Stock subject to the Reload Option on the date of exercise of the original Option. Notwithstanding the foregoing, a Reload Option which is an Incentive Option and which is granted to a 10% Stockholder, shall have an exercise price which is equal to one hundred ten percent (110%) of the Fair Market Value of the Stock subject to the Reload Option on the date of exercise of the original Option and shall have a term which is no longer than five (5) years.

 

Any such Reload Option may be an Incentive Option or a Nonqualified Option, as the Board of Directors or Committee may designate at the time of the grant of the original Option; provided, however, that the designation of any Reload Option as an Incentive Option shall be subject to the provisions of the Code. There shall be no Reload Options on a Reload Option. Any such Reload Option shall be subject to the availability of sufficient shares under Section 4.2 herein and shall be subject to such other terms and conditions as the Board of Directors or Committee may determine which are not inconsistent with the express provisions of the Plan regarding the terms of Options.

 

5.16 No Rights as Stockholder . No Eligible Person shall have any rights as a stockholder with respect to Stock covered by his Option until the date a stock certificate is issued for the Stock.

 

ARTICLE VI - AWARDS

 

6.1 Restricted Stock Awards. The Committee may issue shares of Stock to an Eligible Person subject to the terms of a Restricted Stock Agreement. The Restricted Stock may be issued for no payment by the Eligible Person or for a payment below the Fair Market Value on the date of grant. Restricted Stock shall be subject to restrictions as to sale, transfer, alienation, pledge or other encumbrance and generally will be subject to vesting over a period of time specified in the Restricted Stock Agreement. The Committee shall determine the period of vesting, the number of shares, the price, if any, of Stock included in a Restricted Stock Award, and the other terms and provisions which are included in a Restricted Stock Agreement.

 

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6.2 Restrictions . Restricted Stock shall be subject to the terms and conditions as determined by the Committee, including without limitation, any or all of the following:

 

(a) a prohibition against the sale, transfer, alienation, pledge, or other encumbrance of the shares of Restricted Stock, such prohibition to lapse (i) at such time or times as the Committee shall determine (whether in annual or more frequent installments, at the time of the death, disability, or retirement of the holder of such shares, or otherwise);

 

(b) a requirement that the holder of shares of Restricted Stock forfeit, or in the case of shares sold to an Eligible Person, resell back to the Company at his cost, all or a part of such shares in the event of termination of the Eligible Person’s employment during any period in which the shares remain subject to restrictions;

 

(c) a prohibition against employment of the holder of Restricted Stock by any competitor of the Company or its Affiliates, or against such holder’s dissemination of any secret or confidential information belonging to the Company or an Affiliate;

 

(d) unless stated otherwise in the Restricted Stock Agreement, (i) if restrictions remain at the time of severance of employment with the Company and all Affiliates, other than for reason of disability or death, the Restricted Stock shall be forfeited; and (ii) if severance of employment is by reason of disability or death, the restrictions on the shares shall lapse and the Eligible Person or his heirs or estate shall be 100% vested in the shares subject to the Restricted Stock Agreement.

 

6.3 Stock Certificate. Shares of Restricted Stock shall be registered in the name of the Eligible Person receiving the Restricted Stock Award and deposited, together with a stock power endorsed in blank, with the Company. Each such certificate shall bear a legend in substantially the following form:

 

“The transferability of this certificate and the shares of Stock represented by it is restricted by and subject to the terms and conditions (including conditions of forfeiture) contained in the American Liberty Petroleum Corp. 2014 Directors, Officers, and Consultants Stock options, Stock Warrant and Stock Award Plan, and an agreement entered into between the registered owner and the Company. A copy of the Plan is on file in the office of the Secretary of the Company.”

 

6.4 Rights as Stockholder . Subject to the terms and conditions of the Plan, each Eligible Person receiving a certificate for Restricted Stock shall have all the rights of a stockholder with respect to the shares of Stock included in the Restricted Stock Award during any period in which such shares are subject to forfeiture and restrictions on transfer, including without limitation, the right to vote such shares. Dividends paid with respect to shares of Restricted Stock in cash or property other than Stock in the Company or rights to acquire stock in the Company shall be paid to the Eligible Person currently. Dividends paid in Stock in the Company or rights to acquire Stock in the Company shall be added to and become a part of the Restricted Stock.

 

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6.5 Lapse of Restrictions . At the end of the time period during which any shares of Restricted Stock are subject to forfeiture and restrictions on sale, transfer, alienation, pledge, or other encumbrance, such shares shall vest and will be delivered in a certificate, free of all restrictions, to the Eligible Person or to the Eligible Person’s legal representative, beneficiary or heir; provided the certificate shall bear such legend, if any, as the Committee determines is reasonably required by applicable law. By accepting a Stock Award and executing a Restricted Stock Agreement, the Eligible Person agrees to remit when due any federal and state income and employment taxes required to be withheld.

 

6.6  Restriction Period . No Restricted Stock Award may provide for restrictions continuing beyond ten (10) years from the date of grant.

 

ARTICLE VII - PERFORMANCE STOCK AWARDS

 

7.1 Award of Performance Stock . The Committee may award shares of Stock, without any payment for such shares, to designated Eligible Persons if specified performance goals established by the Committee are satisfied. The terms and provisions herein relating to these performance-based awards are intended to satisfy Section 162(m) of the Code and regulations issued thereunder. The designation of an employee eligible for a specific Performance Stock Award shall be made by the Committee in writing prior to the beginning of the period for which the performance is measured (or within such period as permitted by IRS regulations). The Committee shall establish the maximum number of shares of Stock to be issued to a designated Employee if the performance goal or goals are met. The Committee reserves the right to make downward adjustments in the maximum amount of an Award if in its discretion unforeseen events make such adjustment appropriate.

 

7.2 Performance Goals . Performance goals determined by the Committee may be based on specified increases in cash flow; net profits; Stock price; Company, segment, or Affiliate sales; market share; earnings per share; return on assets; and/or return on stockholders’ equity.

 

7.3 Eligibility . The employees eligible for Performance Stock Awards are the senior officers (i.e., chief executive officer, president, vice presidents, secretary, treasurer, and similar positions) of the Company and its Affiliates, and such other employees of the Company and its Affiliates as may be designated by the Committee.

 

7.4 Certificate of Performance . The Committee must certify in writing that a performance goal has been attained prior to issuance of any certificate for a Performance Stock Award to any Employee. If the Committee certifies the entitlement of an Employee to the Performance Stock Award, the certificate will be issued to the Employee as soon as administratively practicable, and subject to other applicable provisions of the Plan, including but not limited to, all legal requirements and tax withholding. However, payment may be made in shares of Stock, in cash, or partly in cash and partly in shares of Stock, as the Committee shall decide in its sole discretion. If a cash payment is made in lieu of shares of Stock, the number of shares represented by such payment shall not be available for subsequent issuance under this Plan.

 

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ARTICLE VIII - ADMINISTRATION

 

The Committee shall administer the Plan. All questions of interpretation and application of the Plan and Awards shall be subject to the determination of the Committee. A majority of the members of the Committee shall constitute a quorum. All determinations of the Committee shall be made by a majority of its members. Any decision or determination reduced to writing and signed by a majority of the members shall be as effective as if it had been made by a majority vote at a meeting properly called and held. This Plan shall be administered in such a manner as to permit the Options, which are designated to be Incentive Options, to qualify as Incentive Options. In carrying out its authority under this Plan, the Committee shall have full and final authority and discretion, including but not limited to the following rights, powers and authorities, to:

 

(a) determine the Eligible Persons to whom and the time or times at which Options or Awards will be made;

 

(b) determine the number of shares and the purchase price of Stock covered in each Option or Award, subject to the terms of the Plan;

 

(c) determine the terms, provisions, and conditions of each Option and Award, which need not be identical;

 

(d) accelerate the time at which any outstanding Option or SAR may be exercised, or Restricted Stock Award will vest;

 

(e) define the effect, if any, on an Option or Award of the death, disability, retirement, or termination of employment of the Employee;

 

(f) prescribe, amend and rescind rules and regulations relating to administration of the Plan; and

 

(g) make all other determinations and take all other actions deemed necessary, appropriate, or advisable for the proper administration of this Plan.

 

 The actions of the Committee in exercising all of the rights, powers, and authorities set out in this Article and all other Articles of this Plan, when performed in good faith and in its sole judgment, shall be final, conclusive and binding on all parties.

 

ARTICLE IX - AMENDMENT OR TERMINATION OF PLAN

 

The Board of Directors of the Company may amend, terminate or suspend this Plan at any time, in its sole and absolute discretion; provided, however, that to the extent required to qualify this Plan under Rule 16b-3 promulgated under Section 16 of the Securities Exchange Act of 1934, as amended, no amendment that would (a) materially increase the number of shares of Stock that may be issued under this Plan, (b) materially modify the requirements as to eligibility for participation in this Plan, or (c) otherwise materially increase the benefits accruing to participants under this Plan, shall be made without the approval of the Company’s stockholders; provided further, however, that to the extent required to maintain the status of any Incentive Option under the Code, no amendment that would (a) change the aggregate number of shares of Stock which may be issued under Incentive Options, (b) change the class of employees eligible to receive Incentive Options, or (c) decrease the Option price for Incentive Options below the Fair Market Value of the Stock at the time it is granted, shall be made without the approval of the Company’s stockholders. Subject to the preceding sentence, the Board of Directors shall have the power to make any changes in the Plan and in the regulations and administrative provisions under it or in any outstanding Incentive Option as in the opinion of counsel for the Company may be necessary or appropriate from time to time to enable any Incentive Option granted under this Plan to continue to qualify as an incentive stock option or such other stock option as may be defined under the Code so as to receive preferential federal income tax treatment.

 

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ARTICLE X - MISCELLANEOUS

 

10.1 No Establishment of a Trust Fund . No property shall be set aside nor shall a trust fund of any kind be established to secure the rights of any Eligible Person under this Plan. All Eligible Persons shall at all times rely solely upon the general credit of the Company for the payment of any benefit which becomes payable under this Plan.

 

10.2 No Employment Obligation . The granting of any Option or Award shall not constitute an employment contract, express or implied, nor impose upon the Company or any Affiliate any obligation to employ or continue to employ any Eligible Person. The right of the Company or any Affiliate to terminate the employment of any person shall not be diminished or affected by reason of the fact that an Option or Award has been granted to him.

 

10.3 Forfeiture . Notwithstanding any other provisions of this Plan, if the Committee finds by a majority vote after full consideration of the facts that an Eligible Person, before or after termination of his employment with the Company or an Affiliate for any reason (a) committed or engaged in fraud, embezzlement, theft, commission of a felony, or proven dishonesty in the course of his employment by the Company or an Affiliate, which conduct damaged the Company or Affiliate, or disclosed trade secrets of the Company or an Affiliate, or (b) participated, engaged in or had a material, financial, or other interest, whether as an employee, officer, director, consultant, contractor, stockholder, owner, or otherwise, in any commercial endeavor in the United States which is competitive with the business of the Company or an Affiliate without the written consent of the Company or Affiliate, the Eligible Person shall forfeit all outstanding Options and all outstanding Awards, and including all exercised Options and other situations pursuant to which the Company has not yet delivered a stock certificate. Clause (b) shall not be deemed to have been violated solely by reason of the Eligible Person’s ownership of stock or securities of any publicly owned corporation, if that ownership does not result in effective control of the corporation.

 

The decision of the Committee as to the cause of an Employee’s discharge, the damage done to the Company or an Affiliate, and the extent of an Eligible Person’s competitive activity shall be final. No decision of the Committee, however, shall affect the finality of the discharge of the Employee by the Company or an Affiliate in any manner.

 

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10.4 Tax Withholding. The Company or any Affiliate shall be entitled to deduct from other compensation payable to each Eligible Person any sums required by federal, state, or local tax law to be withheld with respect to the grant or exercise of an Option or SAR, lapse of restrictions on Restricted Stock, or award of Performance Stock. In the alternative, the Company may require the Eligible Person (or other person exercising the Option, SAR or receiving the Stock) to pay the sum directly to the employer corporation. If the Eligible Person (or other person exercising the Option or SAR or receiving the Stock) is required to pay the sum directly, payment in cash or by check of such sums for taxes shall be delivered within 10 days after the date of exercise or lapse of restrictions. The Company shall have no obligation upon exercise of any Option or lapse of restrictions on Stock until payment has been received, unless withholding (or offset against a cash payment) as of or prior to the date of exercise or lapse of restrictions is sufficient to cover all sums due with respect to that exercise. The Company and its Affiliates shall not be obligated to advise an Eligible Person of the existence of the tax or the amount which the employer corporation will be required to withhold.

 

10.5 Written Agreement. Each Option and Award shall be embodied in a written agreement which shall be subject to the terms and conditions of this Plan and shall be signed by the Eligible Person and by a member of the Committee on behalf of the Committee and the Company or an executive officer of the Company, other than the Eligible Person, on behalf of the Company. The agreement may contain any other provisions that the Committee in its discretion shall deem advisable which are not inconsistent with the terms of this Plan.

 

10.6 Indemnification of the Committee and the Board of Directors . With respect to administration of this Plan, the Company shall indemnify each present and future member of the Committee and the Board of Directors against, and each member of the Committee and the Board of Directors shall be entitled without further act on his part to indemnity from the Company for, all expenses (including attorney’s fees, the amount of judgments, and the amount of approved settlements made with a view to the curtailment of costs of litigation, other than amounts paid to the Company itself) reasonably incurred by him in connection with or arising out of any action, suit, or proceeding in which he may be involved by reason of his being or having been a member of the Committee and/or the Board of Directors, whether or not he continues to be a member of the Committee and/or the Board of Directors at the time of incurring the expenses, including, without limitation, matters as to which he shall be finally adjudged in any action, suit or proceeding to have been found to have been negligent in the performance of his duty as a member of the Committee or the Board of Directors. However, this indemnity shall not include any expenses incurred by any member of the Committee and/or the Board of Directors in respect of matters as to which he shall be finally adjudged in any action, suit or proceeding to have been guilty of gross negligence or willful misconduct in the performance of his duty as a member of the Committee and the Board of Directors. In addition, no right of indemnification under this Plan shall be available to or enforceable by any member of the Committee and the Board of Directors unless, within 60 days after institution of any action, suit or proceeding, he shall have offered the Company, in writing, the opportunity to handle and defend same at its own expense. This right of indemnification shall inure to the benefit of the heirs, executors or administrators of each member of the Committee and the Board of Directors and shall be in addition to all other rights to which a member of the Committee and the Board of Directors may be entitled as a matter of law, contract, or otherwise.

 

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10.7 Gender . If the context requires, words of one gender when used in this Plan shall include the others and words used in the singular or plural shall include the other.

 

10.8 Headings . Headings of Articles and Sections are included for convenience of reference only and do not constitute part of the Plan and shall not be used in construing the terms of the Plan.

 

10.9 Other Compensation Plans . The adoption of this Plan shall not affect any other stock option, incentive or other compensation or benefit plans in effect for the Company or any Affiliate, nor shall the Plan preclude the Company from establishing any other forms of incentive or other compensation for employees of the Company or any Affiliate.

 

10.10 Other Options or Awards . The grant of an Option or Award shall not confer upon the Eligible Person the right to receive any future or other Options or Awards under this Plan, whether or not Options or Awards may be granted to similarly situated Eligible Persons, or the right to receive future Options or Awards upon the same terms or conditions as previously granted.

 

10.11 Governing Law . The provisions of this Plan shall be construed, administered, and governed under the laws of the State of Nevada.

 

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EXHIBIT 99.2

 

Rhodes Holdings LLC Consulting Agreement
with American Liberty Petroleum Corp.

 

THIS AGREEMENT (the “ Agreement ”) is entered into as of this 2 9 th day of December, 2014 , by and among Rhodes Holdings LLC, a Texas limited liability company with offices at 615 Longview Drive, Sugar Land, Texas 77478-3728 (the “ Consultant ”) and American Liberty Petroleum Corp. , a Nevada corporation with principal offices at 11251 Richmond Avenue, Suite F101, Houston, Texas 77082 (the “ Company ”).

 

WHEREAS , the Consultant has developed expertise in providing strategic business advice and consulting services, including structuring public companies for optimal business operations and financing, helping companies in becoming SEC reporting 1934 Act companies, and other activities associated with public markets; and

 

WHEREAS , the Company desires to engage the services of the Consultant and the Consultant desires to provide services to the Company as set forth below, upon the terms and subject to the conditions set forth herein.

 

NOW, THEREFORE , in consideration of the foregoing and for such other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1. Engagement . Effective upon execution hereof, the Company hereby engages the Consultant to render to it for the period of twelve (12) months from the date of engagement of the Consultant, which was January 29 th , 2014 (the “ Term ”) the services described herein. The Term hereof may be extended or renewed upon the written agreement of the Company and the Consultant prior to expiration of the Term hereof upon such terms as the parties hereto may negotiate at the time of such extension or renewal.

 

2. Services . Consultant's services under this engagement shall, to the extent requested by the Company and appropriate under the circumstances, consist of the Consultants providing management services for the public company (the “ Project ”). In this connection the Consultant will perform the following services:

 

(a) management consulting strategies associated with the process of and continuance of being a publicly traded corporation and such other related management services as shall reasonably be requested by the board of directors of the Company in connection with the operation of the business of the Company;

 

(b) reviewing and evaluating the financial aspects of the proposed Project;

 

(c) developing a strategy to effectuate the Project;

 

(d) coordinating discussions and meetings to gather information regarding the Project;

 

(e) establishing appropriate corporate governance and compliance procedures, including, establishment of an audit committee, nominating committee, code of ethics, and employee stock option and compensation plan;

 

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(f) coordination with the professionals employed by the Company in connection with the Project, including, but not limited to, financial consultants, bankers, venture capitalists, accountants, attorneys;

 

(g) necessary negotiations necessary to establish a relationship between the Company and third parties required to implement the Project; and

 

(h) to the extent requested by the Company and appropriate under the circumstances, Consultant agrees to be available to meet with the Company's Board of Directors to discuss the Project and its financial and regulatory implications.

 

3. Compensation . In consideration for the performance of the services described above, upon signing of this Agreement, Company shall allow the Consultant to purchase Common Stock shares each at par ($0.00001) directly from the Company equal to:

 

Thirty four million (34,000,000) shares                       to                       Delta S Ventures LP (This is the one hundred percent (100%) owner and single member of Rhodes Holdings LLC).

 

Company shall also issue warrants (the “ Warrants ”) to purchase Common Stock shares of the Company up to:

 

None (0) warrants                       to                        Delta S Ventures LP .

 

These Warrants shall have an exercise price of the par value associated with the Common Stock shares of the Company, cashless exercise, with a term of five (5) years from the date of issuance thereof.

 

4. Information .

 

(a) During the period of Consultant's engagement hereunder, the Company will furnish or arrange to have furnished to Consultant all information concerning the Company and the Project that Consultant deems appropriate and will provide Consultant with access to the officers, directors, employees, affiliates, appraisers, independent accountants, legal counsel and other agents, consultants and advisors (collectively, its “ Representatives ”) of the Company.

 

(b) The Company recognizes and confirms that, in providing services pursuant to this Agreement, Consultant will rely upon and assume the accuracy and completeness of all financial and other information furnished by or discussed with the Company and Consultant does not assume responsibility for the accuracy or completeness of any such information. It is understood and agreed that (i) Consultant will not and will have no obligation to verify such information or to conduct any independent evaluation or appraisal of the assets or liabilities of the Company or any other party, and (ii) Consultant will assume that any financial projections or forecasts (including cost savings and synergies) that may be furnished by or discussed with the Company or its Representatives have been reasonably prepared and reflect the best then currently available estimates and judgments of the Company's management. The Company will promptly notify Consultant of any material inaccuracy or misstatement in, or material omission from, any information previously delivered to Consultant. Consultant's role in reviewing any information regarding the Company or otherwise relating to the Project will be limited solely to performing such review as it shall deem necessary to support its own advice and analysis and shall not be on behalf of the Company.

 

5. Certain Restrictions . The Consultant understands that:

 

(a) The Consultant has relationships and contacts with several investors, broker-dealers, investment funds, and other financial institutions. However Consultant’s participation in the actual sale of the Company securities shall be limited to that of an advisor to the Company. The Company acknowledges and agrees that the solicitation and consummation of any purchases of the Company’s securities shall be handled by the Company or one or more FINRA member firms engaged by the Company for such purpose and will only be undertaken and effected upon consultation with, and the receipt of advice from, counsel who are knowledgeable of the state and federal securities law that are applicable to any such Project(s) as well as the rules and regulations that may be applicable to any such Project(s). Consultant will not receive compensation in connection with any offer or sales of the Company’s securities.

 

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6. Representations and Warranties of Consultant . The Consultant hereby represents and warrants to the Company that:

 

(a) Consultant will not sell the securities transferred to the Consultant pursuant hereto without compliance with the U.S. Securities and Exchange Act of 1934 (the “ Act ”) and any applicable state securities laws;

 

(b) Consultant has received and carefully read certain business information about the Company provided to it by the Company and written or verbal responses to all questions that the Consultant has submitted to the Company regarding its acquisition of the securities described herein, all of which the Consultant acknowledges have been provided to the Consultant. Such information may be referred to hereinafter as the “ Corporate Materials .” Other than the Corporate Materials, the Consultant has not been furnished with any other materials or literature relating to the acquisition of the securities described herein. The Consultant has been given the opportunity to ask questions of and to receive answers from the Company concerning the terms and conditions of the acquisition of the securities described herein and the Corporate Materials, and to obtain such additional written information necessary to verify the accuracy of same as the Consultant desires in order to evaluate the acquisition offend investment in the securities described herein. The Consultant acknowledges and confirms that the written and/or oral responses provided to the Consultant by the Company in response to the Consultant’s questions are not contrary to or inconsistent with, nor do they conflict with the information set forth in the Corporate Materials. The Consultant further acknowledges that it understands the information contained in the Corporate Materials and the Consultant has had the opportunity to discuss any questions regarding the Corporate Materials with its counsel or other advisor. The only information upon which the Consultant has relied is that which is set forth in the Corporate Materials;

 

(c) Consultant understands that no federal or state agency or other authority: (i) has made any finding or determination regarding the fairness of the Project described herein, (ii) has made any recommendation or endorsement of the Project described herein, or (iii) has passed in any way upon this agreement or the Corporate Materials;

 

(d) Consultant: (i) is acquiring the securities described herein solely for its own account for investment purposes only and not with view toward resale or distribution thereof, either in whole or impart; and (ii) has no contract, undertaking, agreement or other arrangement, in existence or contemplated, to sell, pledge, assign or otherwise transfer the securities to any other person;

 

(e) Consultant has adequate means of providing for its current needs and contingencies and has no need for liquidity in the investment in the securities described herein. The Consultant has read, is familiar with and understands Rule 501 of Regulation D and represents that he is an “accredited investor” as defined in Rule 501(a) of Regulation D and the Act. The Consultant has no reason to anticipate any material change in its financial condition for the foreseeable future;

 

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(f) Consultant is aware that the acquisition of the securities described herein is a speculative investment involving a high degree of risk and that there is no guarantee that the Consultant will realize any gain from its acquisition of or investment in such securities;

 

(g) Consultant is financially able to bear the economic risk of an investment in the securities described herein, including the ability to hold such securities indefinitely and to afford a complete loss of an investment in such securities;

 

(h) Consultant's overall commitment to investments which are not readily marketable is not disproportionate to the Consultant's net worth, and the Consultant's investment in the securities described herein will not cause such overall commitment to become excessive; and

 

(i) Consultant has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of the acquisition of and an investment in the securities described herein.

 

7. Representations and Warranties of the Company . The Company hereby represents and warrants to the Consultant that:

 

(a) The execution, delivery and performance of this Agreement and consummation of the Project contemplated hereby have been duly authorized, adopted and approved by the board of directors of the Company. The Company has taken all necessary corporate action and has all the necessary corporate power and authority to enter into this Agreement and to consummate the Project contemplated hereby. This Agreement has been duly and validly executed and delivered by an authorized officer of the Company on its behalf and is the valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect, or by legal or equitable principles, relating to or limiting creditors rights generally and except that the remedy of specific performance and injunctive and other forms of equitable relief are subject to certain equitable defenses and to the discretion of the court before which any proceeding therefor may be brought;

 

(b) The Company is a Company duly organized, validly existing and in good standing under the laws of the State of Nevada . The Company has the corporate power and authority to own and lease its properties and assets and to carry on its business as it is now being conducted and is duly qualified to do business as a foreign Company in each jurisdiction where it owns or leases real property or conducts business, except where the failure to be so qualified would not have a material adverse effect on the business, operations or condition (financial or otherwise) of the Company;

 

(c) The Company has not issued any shares of capital stock which could give rise to claims for violation of any federal or state securities laws (including any rules or regulations promulgated hereunder) or the securities laws of any other jurisdiction (including any rules or regulations promulgated thereunder);

 

(d) There is no contract or agreement to which the Company is a party or by which it or its assets are bound which prohibits the Company from executing and delivering this Agreement or performing its obligations as set forth hereunder;

 

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(e) Neither the execution and delivery of this Agreement by the Company, nor consummation of the Project contemplated hereby, does or will: (i) violate or conflict with any provision of the certificate of formation of the Company or the regulations of the Company; (ii) violate or, with the passage of time, result in the violation of any provision of, or result in the acceleration of or entitle any party to accelerate any obligation under, or result in the creation or imposition of any lien, charge, pledge, security interest or other encumbrance upon any of the property or assets of the Company, pursuant to any provision of any mortgage, lien, lease, agreement, permit, indenture, license, instrument, law, order, arbitration award, judgment or decree to which the Company is a party or by which it or any of such property or assets are bound; (iii) violate or conflict with any other restriction of any kind whatsoever to which the Company is subject, or by which its properties or assets may be bound; or violate or constitute a breach under any provision of any agreement to which the Company is a party or is subject. No consent, authorization, order or approval of, or filing or registration with, any governmental commission, board or other regulatory body is required in connection with the execution, delivery and performance of the terms of this Agreement and consummation of the Project contemplated hereby by the Company;

 

(f) There is no action, suit, proceeding or investigation pending or threatened which could restrict the Company's ability to perform its obligations hereunder. There are no grounds for or facts, events or circumstances which could form the basis of any such action that could cause or result in any such action, suit, proceeding or investigation or which is probable of assertion. The Company is not in default in respect of any judgment, order, writ, injunction or decree of any court or any federal, state, local or other governmental agency, authority, body, board, bureau, commission, department or instrumentality, which default would in any way affect, impair or compromise the Company's ability to consummate the Project contemplated hereby or would otherwise compromise in any way the validity or legality of this Agreement or the Project contemplated hereby;

 

8. Confidentiality of Information . By reason of performance under this Agreement, the Consultant may have access to and may obtain specialized knowledge, trade secrets and confidential information about the business and operation of the Company, its subsidiaries and divisions thereof. Therefore, the Consultant hereby agrees that he shall keep secret and retain in confidence and shall not use, disclose to others, or publish, other than in connection with the performance of services hereunder and in accordance herewith, any information relating to the business, operation or other affairs of the Company, its subsidiaries and divisions thereof, which information is acquired in the course of providing services for the Company. To the extent that any of such information may be deemed from time to time to be “ material non-public information ” as construed under the Act, the Consultant hereby agrees not to purchase or sell (or offer to purchase or sell) any of the Company's securities while in possession of information which may be so deemed to be “ material non-public information.

 

9. Indemnification . The Consultant and the Company hereby agree as follows:

 

(a) The Company hereby agrees to indemnify and hold harmless the Consultant against and in respect of all damages, claims, losses and expenses (including, without limitation, attorneys' fees and disbursements) reasonably incurred (all such amounts may hereinafter be referred to as the “ Damages ”) by the Consultant arising out of: (i) any misrepresentation or breach of any warranty made by the Company pursuant to the provisions of this Agreement or in any statement, certificate or other document furnished by the Company pursuant to this Agreement, and (ii) the nonperformance or breach of any covenant, agreement or obligation of the Company contained in this Agreement which has not been waived by the Consultant;

 

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(b) The Company shall be obligated to indemnify the Consultant with respect to claims for Damages as to which the Consultant shall have given written notice to the Company on or before the close of business on the sixtieth day following the second anniversary hereof;

 

(c) In any case where the Company has indemnified the Consultant for any Damages and the Consultant recovers from third parties all or any part of the amount so indemnified by the Company, the Consultant shall promptly pay over to the Company the amount so recovered;

 

(d) With respect to claims or demands by third parties, whenever the Consultant shall have received notice that such a claim or demand has-been asserted or threatened which, if valid, would be subject to indemnification hereunder, the Consultant shall as soon as reasonably possible and in any event within thirty (30) days of receipt of such notice, notify the Company of such claim or demand and of all relevant facts within its knowledge which relate thereto. The Company shall then have the right at its own expense to undertake the defense of any such claims or demands utilizing counsel selected by the Company and approved by the Consultant, which approval shall not be unreasonably withheld. In the event that the Company should fail to give notice of the intention to undertake the defense of any such claim or demand within thirty (30) days after receiving notice that it has been asserted or threatened, the Consultant shall have the right to satisfy and discharge the same by payment, compromise or otherwise and shall give written notice of any such payment, compromise or settlement to the Company;

 

(e) The Consultant hereby agrees to indemnify and hold harmless the Company against and in respect of all Damages reasonably incurred by the Company arising out of: (i) any misrepresentation or breach of any warranty made by the Consultant pursuant to the provisions of this Agreement, and (ii) the nonperformance or breach of any covenant, agreement or obligation of the Consultant which has not been waived byte Company;

 

(f) The Consultant shall be obligated to indemnify the Company for Damages as to which the Company shall have given written notice to the Consultant on or before the close of business on the sixtieth (60) day following the second anniversary hereof;

 

(g) In any case where the Consultant has indemnified the Company for any Damages and the Company recovers from third parties all or any part of the amount so indemnified by the Consultant, the Company shall promptly pay over to the Consultant the amount so recovered;

 

(h) With respect to claims or demands by third parties, whenever the Company shall have received notice that such a claim or demand has-been asserted or threatened, which, if valid, would be subject to indemnification hereunder, the Company shall as soon as reasonably possible and in any event within thirty (30) days of receipt of such notice, notify the Consultant of such claim or demand and of all relevant facts within its knowledge which relate thereto. The Consultant shall have the right, at its expense, to undertake the defense of any such claim or demand utilizing counsel selected by the Consultant and approved by the Company, which approval shall not be unreasonably withheld. In the event that the Consultant should fail to give notice of its intention to undertake the defense of any such claim or demand within thirty (30) days after receiving notice that it has been asserted or threatened, the Company shall have the right to satisfy and discharge the same by payment, compromise or otherwise and shall give written notice of any such payment, compromise or settlement to the Consultant; and

 

6
 

 

(i) Without limiting any of the foregoing, the Company shall indemnify and hold harmless the Consultant against any losses, claims, damages or liabilities to which such Consultant becomes subject under federal or state securities (“ Blue Sky ” laws), insofar as such losses, claims, damages or liabilities (or actions in respect thereof) are based upon any untrue statement of a material fact contained in a registration statement filed pursuant hereto, a final prospectus contained in such registration statement, or an amendment or supplement thereto, or are based upon the omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The Company shall reimburse the Consultant for any legal or another expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, or liability provided that the Company shall not be liable in any case to the extent that any loss, claim, damage or liability arises out of, is based upon or is derived from any untrue state mentor omission made in such registration statement, final prospectus or any amendment or supplement thereto, in reliance upon and inconformity with information furnished in writing to the Company by or on behalf of the Consultant for use in preparation thereof.

 

10. Confidentiality . Except to the extent authorized by the Company or required by any federal or state law, rule or regulation or any decision or order by any court or regulatory authority, Consultant agrees that it will not disclose to any person, other than to any officer, director, employee, agent attorney, accountant or employee of Consultant who needs to know the information in connection with the performance of Consultant’s services under this Agreement, any confidential information received by Consultant from the Company or its officers, directors, employees, consultants, counsel and independent accountants in connection with the performance of Consultant’s services under this Agreement, provided that information shall not be deemed to be confidential if such information (i) is or becomes generally available to the public, other than as a result of a breach of this Agreement by Consultant from independent sources or (ii) is independently developed by Consultant without use of material non-public Company information. Consultant agrees that its agents and employees and persons retained by Consultant who shall perform services for or on behalf of Consultant in connection with the services to be performed by Consultant under this Agreement shall be advised by Consultant of the foregoing confidentiality obligations and thereby also be bound by the provision hereof.

 

Any advice proved to the Company by Consultant pursuant to this Agreement is solely for the information and assistance of the Board of Directors of the Company. Such advice shall be treated as confidential information, shall not be disclosed publicly in any manner without Consultant’s prior written approval and shall not be relied upon by the Company’s shareholders or any third party. Any reference to Consultant or to any affiliate of Consultant in any release or communication to any party outside the Company is subject to Consultant’s prior written approval. If this Agreement is terminated prior to any release or communication, no reference shall be made to Consultant without Consultant’s prior written approval.

 

7
 

 

Experience has indicated to us that our client relationship must be based upon mutual understanding, confidentiality, trust and respect. In this regard, the undersigned, as well as the other members of the firm, will rely upon the truth and accuracy of all information which may be made a part of the documentation, including “ due diligence ”, for the securities offering and our services rendered in connection with such offering. In the event that the undersigned or any member of the firm discovers that any information requested has been intentionally withheld, or that any information supplied, whether written or oral, has been intentionally misrepresented, or should you fail to promptly pay any invoices, Consultant shall have the absolute right to terminate this Agreement and withdraw from the engagement described herein, and all work and/or expenses incurred to such point shall be immediately due and payable. Accordingly, in such event, your files will be returned to you upon payment of the final invoices and any outstanding invoices. In this connection, it is understood and agreed that all information, data and documents collected by or furnished to Consultant are and shall remain the exclusive property of Consultant and will not be delivered or returned to the Company. However, Consultant agrees, at the expense of the Company, to make copies of any or all such documents for delivery to the Company at any reasonable time or times requested by the Company.

 

10. Governing Law and Arbitration . The validity, interpretation and construction of this agreement and each part thereof will be governed by the laws of the State of Texas, without giving effect to its conflict of law principles or rules. Further, Consultant and Company agree that any disputes between them will be determined by binding arbitration before a former or retired Texas Judge or Justice selected by the Ancillary Judge of the Harris County District Courts. Ten (10) days’ notice is required prior to contacting the Administrative Judge, allowing all parties an opportunity to participate.

 

11. Counterparts . This Agreement may be executed in any number of counterparts, each of which may be deemed an original and all of which together will constitute one and the same instrument.

 

12. Entire Agreement . This Agreement contains the entire agreement between the parties with respect to the Project and neither party is relying on any agreement, representation, warranty, or other understanding not expressly stated herein with respect to the Project.

 

8
 

 

If the foregoing correctly sets forth our entire agreement, please so indicate by signing both of the enclosed originals of this Agreement and returning one to the undersigned along with the required fees.

 

AGREED UPON

 

THE COMPANY

 

By: /S/ Steven M. Plumb                                   Date: December 29, 2014

Steven M. Plumb

American Liberty Petroleum Corp. / CFO, Executive Vice President

THE CONSULTANT(S)

 

By: /S/ Robert C. Rhodes                                   Date: December 29, 2014

Robert C. Rhodes
Rhodes Holdings LLC / Managing Member (representative of Delta S Management, Inc.)

 

9

 

 

 

EXHIBIT 99.3

 

Clear Financial Solutions, Inc. Consulting Agreement
with American Liberty Petroleum Corp.

 

This Consulting Agreement (the “ Agreement ”) is made and entered into as of December 29 th , 2014 by and between American Liberty Petroleum Corp., a Nevada corporation (the “ Company ”), and Steven M. Plumb and his corporation Clear Financial Solutions, Inc. (collectively as “ Executive ”).

 

RECITALS

 

The Company is a developmental organization, currently with assets in the oil & gas section, but which has currently entered into a Letter of Intent to purchase a developer, manufacturer and marketer of next-generation life science tools and integrated systems for the large scale analysis of genetic variation, biological function and diagnostics. The Company desires to employ Executive, and the Executive desires to accept such employment, on the terms and subject to the conditions set forth in this Agreement.

 

In consideration of the mutual promises set forth in this Agreement the parties hereto agree as follows:

 

ARTICLE I
Term of Employment

 

Subject to the provisions of Article V, and upon the terms and subject to the conditions set forth in this Agreement, the Company will employ Executive for the three-year period beginning on the date first written above (the “Commencement Date”) and ending on the third anniversary of the Commencement Date. This contract shall be automatically extended for an amount of time equal to any period in which any salaries are deferred without any effect to any vesting schedule as described herein.

 

ARTICLE II
Duties

 

2.01 Duties of Executive During the term of employment, Executive will:

 

(a) Promote the interests, within the scope of his duties, of the Company and devote his time and efforts to the Company’s business and affairs.

 

(b) Serve as the Chief Executive Officer and Chairman of the Board of Directors of the Company and

 

(c) Perform the duties and services consistent with the title and function of such office, including without limitation, those, if any, set forth in the bylaws of the Company or as specifically set forth from time to time by the Company’s Board of Directors (the “Board”).

 

2.02 Personal Investing . Nothing contained herein or under law shall be construed as preventing Executive from (i) investing Executive’s personal assets in such form or manner as will not require any services on the part of Executive in the operation or the affairs of the companies in which such investments are made and in which his participation is solely that of a passive investor.

 

ARTICLE III
Base Compensation

 

3.01 Semi-Monthly Payments . The Company will compensate Executive for the duties performed by him hereunder by payment of a base salary at the rate of three thousand dollars ($3,000) pre-funding and five thousand dollars ($5,000) post funding per month (the “Base”), subject to customary withholding for federal, state, and local taxes and other normal and customary withholding items.

 

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3.02 Commencement of Compensation .

 

 

[LEFT BLANK INTENTIONALLY]

 

3.03 Equity Bonus . For work done for the previous twenty four (24) months as Chief Financial Officer of the Company, the Company shall allow Executive to purchase thirty four million (34,000,000) Common Stock shares at par.

 

ARTICLE IV
Reimbursement and Employment Benefits

 

4.01 Health and Other Medical . Executive shall be provided with health, medical and dental coverage for himself and his family through his current insurance carrier, and under his current plan, unless he deems a change to either the carrier or plan acceptable, and in his best interest. Company shall reimburse employee, or pay said carrier directly, for the full amount of the premium, on the first day of each month in which the premium is due. In the event, such payments are not made, or any lapse of coverage occurs due to an act of non-payment on the part of the Company, Company shall be liable for any current or future medical claims that result from a lack of coverage. If they provide greater coverage, Executive shall be eligible to participate in all health, medical, dental, and employee benefits as are available from time to time to other key executive employees (and their families) of the Company, including Medical and Dental Insurance Plan, and a Long Term Disability Plan (the “Plans”). The Company shall pay 100% of all premiums with respect to the Executive and his family for such Plans.

 

4.02 Vacation . Executive shall be entitled to four (4) weeks of vacation per year, to be taken in such amounts and at such times as shall be mutually convenient for Executive and the Company. Any time not taken by Executive in one year shall be carried forward to subsequent years, up to and including four weeks. Each year, Executive may elect to receive up to two week’s pay in exchange for a corresponding number of vacation hours. Executive must have accrued at least two weeks of vacation at the time she makes the foregoing election.

 

4.03 Reimbursable Expenses . The Company shall in accordance with its standard policies in effect from time to time reimburse Executive for all reasonable out-of-pocket expenses actually incurred by him in the conduct of the business of the Company.

 

4.04 Savings Plan . Executive will be eligible to enroll and participate, and be immediately vested in, all Company savings and retirement plans, including any 401(k) plans, as are available from time to time to other key executive employees.

 

4.05 Common Stock Purchase Options .

 

[LEFT BLANK INTENTIONALLY]

 

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ARTICLE V
Termination

 

5.01 Events of Termination. This Agreement, Executive’s compensation under Article III, and any and all other rights of Executive under this Agreement or otherwise as an employee of the Company will terminate (except as otherwise provided in this Article V):

 

(a) upon termination of this Agreement by the Executive without Good Reason;

 

(b) upon the death of Executive;

 

(c) upon the disability of Executive (as defined in Section 5.02);

 

(d) for “Cause” (as defined in Section 5.03), immediately upon notice from the Company to Executive, or at such later time as such notice may specify; or

 

(e) for “Good Reason” (as defined in Section 5.04) upon not less than thirty days’ prior notice from Executive to the Employer.

 

5.02 Definition of Disability. For purposes of Section 5.01, Executive will be deemed to have a “disability” if, for physical or mental reasons, Executive is unable to perform the essential functions of Executive's duties under this Agreement for 120 consecutive days, or 180 days during any twelve-month period, as determined in accordance with this Section 5.02. The disability of Executive will be determined by a medical doctor selected by written agreement of the Company and Executive upon the request of either party by notice to the other. If the Company and Executive cannot agree on the selection of a medical doctor, each of them will select a medical doctor and the two medical doctors will select a third medical doctor who will determine whether Executive has a disability. The determination of the medical doctor selected under this Section 5.02 will be binding on both parties. The Executive must submit to a reasonable number of examinations by the medical doctor making the determination of disability under this Section 5.02, and the Executive hereby authorizes the disclosure and release to the Company of such determination and all supporting medical records. If Executive is not legally competent, Executive's legal guardian or duly authorized attorney-in-fact will act in Executive's stead, under this Section 5.02, for the purposes of submitting the Executive to the examinations, and providing the authorization of disclosure, required under this Section 5.02 .

 

5.03 Definition of “Cause. ” The term “Cause” shall mean the following:

 

(a) Any violation by Executive of any material provision of this Agreement (including without limitation any violation of any provision of Sections 6.01, 6.02 or 6.03 hereof any and all of which are material in all respects), upon notice of same by the Company describing in detail the breach asserted and stating that it constitutes notice pursuant to this Section 5.03(a), which breach, if capable of being cured, has not been cured within 30 days after such notice (except for breaches of any provisions of sections 6.01, 6.02 or 6.03 which are not subject to cure or any notice);

 

(b) Embezzlement by Executive of funds or property of the Company;

 

(c) Habitual absenteeism, bad faith, fraud, refusal to perform his duties, gross negligence or willful misconduct on the part of Executive in the performance of his duties as an employee of the Company, provided that the Company has given written notice of and an opportunity of not less than 30 days to cure such breach, which notice describes in detail the breach asserted and stating that it constitutes notice pursuant to this Section 5.03(c), provided that no such notice or opportunity needs to be given if such conduct would unnecessarily or unreasonably expose the Company to undue risk or harm or one previous notice had already been given under this section or under section (i) above; or

 

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(d) A felonious act, conviction, or plea of nolo contendere of Executive under the laws of the United States or any state (except for any conviction or plea based on a vicarious liability theory and not the actual conduct of the Executive and except further, any such act, conviction or plea arising out of conduct directed by the Company’s Board of Directors).

 

5.04 Definition of “Good Reason .” For purposes of Section 5.01(e), the phrase “Good Reason” means any of the following: (a) The Company’s material breach of this Agreement; or (b) the assignment of Executive without his consent to a position, responsibilities, or duties of a materially lesser status or degree of responsibility than his position, responsibilities, or duties at the Commencement Date or (c) any interference by either shareholders or Board of Directors that would materially affect his ability to perform the duties as outlined.

 

5.05 Termination Pay.

 

[LEFT BLANK ON PURPOSE]

 

5.06 General.

 

(a) Termination of this Agreement shall not affect the obligations of Executive under Article VI hereof that, pursuant to the express provi sions of this Agreement, continue in full force and effect. Upon termination of this Agreement for any reason, Executive shall promptly deliver to the Company all Company property including without limitation all writings, records, data, memoranda, contracts, orders, sales literature, price lists, client lists, data processing materials, and other documents, whether or not obtained from the Company or any Affiliate, which pertain to or were used by Executive in connection with his employment by the Company or which pertain to any Affiliate, including, but not limited to, Confidential Information, as well as any automobiles, computers or other furniture, fixtures or equipment which were purchased by the Company for Executive or otherwise in Executive’s possession or control.

 

5.07 Representations . Executive represents, warrants, and covenants to Company that (a) there is no other agreement or relationship which is binding on him which prevents him from entering into or fully performing under the terms hereof and (b) the Company may contact any past, present, or future entity with whom he has a business relationship and inform such entity of the existence of this Agreement and the terms and conditions set forth herein.

 

ARTICLE VI
Covenants

 

6.01 Competition/Solicitation .

 

(a) During the term of this Agreement and for a period of eighteen (18) months after termination of this Agreement, regardless of the reason, Executive hereby covenants and agrees that he shall not, directly or indirectly, except in connection with his duties hereunder or otherwise for the sole account and benefit of the Company, whether as a sole proprietor, partner, member, shareholder, employee, director, officer, guarantor, consultant, independent contractor, or in any other capacity as principal or agent, or through any person, subsidiary, affiliate, or employee acting as nominee or agent, except with the consent of the Company:

 

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(i) Conduct or engage in, or be interested in or associated with, any person or entity anywhere in North America (plus any such additional geographical markets to which the Company may have expanded during the course of Executive‘s employment) other than the Company and its affiliates which conducts or engages in the Business (plus any such additional product or service markets to which the Company may have expanded during the course of Executive‘s employment). For purposes of this Agreement, “Business” shall be defined as the development, manufacture and marketing of diagnostic tests for ovarian cancer using a microarray platform.

 

(ii) Induce, or attempt to induce, hire or attempt to hire, or cause to be induced or hired, any employee of the Company, or persons who were employees of the Company within the 180 days preceding the Termination Date, to leave or terminate him or his employment with the Company, or hire or engage as an independent contractor any such employee of the Company.

 

(b) Notwithstanding the foregoing, Executive shall not be prevented from (i) investing in or owning up to five percent (5%) of the outstanding stock of any corporation engaged in any business provided that such shares are regularly traded on a national securities exchange or in any over-the-counter market or (ii) retaining any shares of stock in any corporation which Executive owned before the date of his employment with the Company.

 

6.02 Confidential Information . Executive acknowledges that in his employment he is or will be making use of, acquiring, or adding to the Company’s confidential information which includes, but is not limited to, non-public and confidential memoranda and other materials or records of a proprietary nature; technical information regarding the operations of the Company; and records and policy matters relating to finance, personnel, market research, strategic planning, current and potential customers, lease arrangements, service contracts, management, and operations. Therefore, to protect the Company’s confidential information and to protect other employees who depend on the Company for regular employment, Executive agrees that during and after the Term of this Agreement, he will not in any way use any of said confidential information except in connection with his employment by the Company, and except in connection with the business of the Company he will not copy, reproduce, or take with him the original or any copies of said confidential information and will not directly or indirectly divulge any of said confidential information to anyone without the prior written consent of the Company.

 

6.03 Inventions . All discoveries, designs and inventions, whether patentable or not, relating to (or suggested by or resulting from) products, or other technology of the Company or any Affiliate or relating to (or suggested by or resulting from) methods or processes used or usable in connection with the business of the Company or any Affiliate that may be conceived, developed, or made by Executive during employment with the Company (hereinafter “Inventions”), either solely or jointly with others, shall automatically become the sole property of the Company or an Affiliate. Executive shall immediately disclose to the Company all such Inventions and shall, without additional compensation, execute all assignments and other documents deemed necessary to perfect the property rights of the Company or any Affiliate therein. These obligations shall continue beyond the termination of Executive’s employment with respect to Inventions conceived, developed, or made by Executive during employment with the Company. The provisions of this Section 6.03 shall not apply to any Invention for which no equipment, supplies, facility, or trade secret information of the Company or any Affiliate is used by Executive and which is developed entirely on Executive’s own time, unless (a) such Invention relates (i) to the business of the Company or an Affiliate or (ii) to the actual or demonstrably anticipated research or development of the Company or an Affiliate, or (b) such Invention results from work performed by Executive for the Company.

 

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6.04 Non-Disparagement . For a period commencing on the Commencement Date and continuing for a period of eighteen (18) months, Executive hereby covenants and agrees that he shall not, directly or indirectly, defame, disparage, create false impressions, or otherwise put in a false or bad light the Company, its products or services, its business, reputation, conduct, practices, past or present employees, financial condition or otherwise.

 

6.05 Blue Penciling .

 

[LEFT BLANK ON PURPOSE]

 

6.06 Remedies . Executive acknowledges that any breach by him of the provisions of this Article VI of this Agreement shall cause irreparable harm to the Company and that a remedy at law for any breach or attempted breach of Article VI of this Agreement will be inadequate, and agrees that, notwithstanding section 9.01 hereof, the Company shall be entitled to exercise all remedies available to it, including specific performance and injunctive and other equitable relief, without the necessity of posting any bond, in the case of any such breach or attempted breach.

 

ARTICLE VII
Assignment

 

This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Company. Neither this Agreement nor any rights hereunder shall be assignable by Executive and any such purported assignment by him shall be void.

 

ARTICLE VIII
Entire Agreement

 

This Agreement constitutes the entire understanding between the Company and Executive concerning his employment by the Company or subsidiaries and supersedes any and all previous agreements between Executive and the Company or any of its affiliates or subsidiaries concerning such employment, and/or any compensation, bonuses or incentives. Each party hereto shall pay its own costs and expenses (including legal fees), except as otherwise expressly provided herein incurred in connection with the preparation, negotiation, and execution of this Agreement. This Agreement may not be changed orally, but only in a written instrument signed by both parties hereto.

 

ARTICLE IX
Applicable Law; Miscellaneous

 

9.01 Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada.

 

9.02 Indemnification of Executive . The Company shall indemnify and hold harmless Executive to the full extent authorized or permitted by law with respect to any claim, liability, action, or proceeding instituted or threatened against or incurred by Executive or his legal representatives and arising in connection with Executive’s conduct or position at any time as a director, officer, employee, or agent of the Company or any subsidiary thereof. The Company shall not change, modify, alter, or in any way limit the existing indemnification and reimbursement provisions relating to and for the benefit of its directors and officers without the prior written consent of Executive, including any modification or limitation of any directors and officers liability insurance policy.

 

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9.03 Waiver . No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a continuing waiver or a waiver of any similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party hereto which are not set forth expressly in this Agreement.

 

9.04 Unenforceability . The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

 

9.05 Counterparts . This Agreement may be executed in several counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same instrument.

 

9.06 Section Headings . The section headings contained in this Agreement are inserted for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

 

[LEFT BLANK ON PURPOSE]

 

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

 

American Liberty Petroleum Corp.

 

By: /S/ Robert C. Rhodes
Robert C. Rhodes
American Liberty Petroleum Corp. (CEO, President)
     
     
  Executive
   
  By: /S/ Steven M. Plumb
    Steven M. Plumb, CPA
    Clear Financial Solutions, Inc. (President)

 

8

 

EXHIBIT 99.4

 

Agreement and Plan of Reorganization
between American Liberty Petroleum Corp., Avant Diagnostics, Inc., and Avant Acquisition Corp.

 

 

 

 

 

 

AGREEMENT AND PLAN OF REORGANIZATION

 

among

 

American Liberty Petroleum Corp.

 

(a Nevada corporation)

 

AVANT ACQUISITION CORP.

 

(a Nevada corporation)

 

AVANT DIAGNOSTICS, INC.

 

a Nevada corporation

 

and

 

THE STOCKHOLDERS OF AVANT DIAGNOSTICS, INC.

 

 

 

 

 

 

DATED AS OF DECEMBER 29, 2014

 

 

 
 

TABLE OF CONTENTS

RECITALS 1
ARTICLE 1  DEFINITIONS 1
ARTICLE 2.  THE REORGANIZATION 8
Section 2.01.  Basic Merger Transaction 8
Section 2.02.  Effective Time; Closing 8
Section 2.03.  Effect of the Merger 8
Section 2.04.  Certificate of Incorporation an Bylaws 8
Section 2.05.  Directors and Officers 8
Section 2.06.  Conversion of Securities 8
Section 2.07.  Exchange of Certificates 9
Section 2.08.  Stockholder Transfer Books 10
Section 2.09.  Dissenting Stockholders 10
Section 2.10.  Stock Options 11
Section 2.11.  Additional Covenants and Agreements 11
ARTICLE 3  REPRESENTATIONS AND WARRANTIES OF AVANT AND STOCKHOLDERS 11
Section 3.01.  Organization, Qualification and Corporate Power 12
Section 3.02.  No contravention 12
Section 3.03.  Capitalization 12
Section 3.04.  Brokers’ Fees 13
Section 3.05.  Title to Assets 13
Section 3.06.  Subsidiaries 13
Section 3.07.  Financial Statements 13
Section 3.08.  Undisclosed Liabilities 13
Section 3.09.  Legal Compliance 14
Section 3.10.  Real Property 14
Section 3.11.  Tangible Assets 14
Section 3.12.  Intentionally Omitted 14
Section 3.13.  Employees 14
Section 3.14.  Guaranties 14
Section 3.15.  Certain Business Practices 14
Section 3.16.  Parachute Payments 14
Section 3.17.  Information Statement 14
Section 3.18.  Environment, Health, and Safety 15
ARTICLE 4  REPRESENTATIONS AND WARRANTIES OF AMERICAN LIBERTY 16
Section 4.01.  Organization, Qualification, and Corporate Power 16
Section 4.02.  Capitalization 17
Section 4.03.  Noncontravention 17
Section 4.04.  Brokers’ Fees 17
Section 4.05.  Title to Assets 17
Section 4.06.  Subsidiaries 17
Section 4.07.  SEC Filings, Financial Statements 18
Section 4.08.  Absence of Certain Changes or Events 18
Section 4.09.  Undisclosed Liabilities 20
Section 4.10.  Legal Compliance 20
Section 4.11.  Tax Matters 20
Section 4.12.  Real Property 22
Section 4.13.  Intellectual Property 22
Section 4.14.  Tangible Assets 22
Section 4.15.  Contracts 22
Section 4.16.  Notes and Accounts Receivable 23
Section 4.17.  Intentionally Omitted 23

 

 
 

 

Section 4.18.  Insurance 23
Section 4.19.  Litigation 24
Section 4.20.  Employees 24
Section 4.21.  Employee Benefits 24
ARTICLE 5  PRE-CLOSING COVENANTS 25
Section 5.01.  General 25
Section 5.02.  Notices and Consents 25
Section 5.03.  Operation of Business 25
Section 5.04.  Preservation of Business 25
Section 5.05.  Full Access 25
Section 5.06.  Notice of Developments 25
Section 5.07.  Filing of Current Report on Form 8-K 26
Section 5.08.  Section 16(b) Board Approval 26
Section 5.09.  Intentionally Omitted 26
Section 5.10.  Change of Name and Trading Symbol 26
Section 5.11.  Information Statement 26
Section 5.12.  Confidentiality 27
ARTICLE 6  CLOSING COVENANTS 28
Section 6.01.  General 28
Section 6.02.  Intentionally Omitted 28
Section 6.03.  Application to Standard & Poor’s 28
Section 6.04.  Filing of Amended Form 8-K 28
Section 6.05.  Intentionally Omitted 28
Section 6.06.  Intended Federal Income Tax Consequences 28
Section 6.07.  Board of Directors of American Liberty 28
Section 6.08.  Public Announcements 28
Section 6.09.  Conveyance Taxes 29
ARTICLE 7  CONDITIONS TO OBLIGATION TO CLOSE 29
Section 701.  Conditions to Obligation of Avant 29
Section 7.02.  Conditions to Obligation of American Liberty 30
ARTICLE 8.  TERMINATION 31
Section 8.01.  Termination 31
Section 8.02.  Effect of Termination 32
Section 8.03.  Fees and Expenses 32
ARTICLE 9  MISCELLANEOUS 32
Section 9.01.  Press Releases and Public Announcements 32
Section 9.02.  No Third Party Beneficiaries 33
Section 9.03.  Entire Agreement 33
Section 9.04.  Succession and Assignment 33
Section 9.05.  Counterparts 33
Section 9.06.  Headings 33
Section 9.07.  Notices 33
Section 9.08.  Governing Law 35
Section 9.09.  Amendments and Waivers 35
Section 9.10.  Severability 35
Section 9.11.  Expenses 35
Section 9.12.  Construction 35
Section 9.13.  Incorporation of Exhibits and Schedules 35
Section 9.14.  Specific Performance 35
Section 9.15.  Submission to Jurisdiction 35
Section 9.16.  Indemnification; Remedies 36

 

 
 

 

Exhibit A - Certificates to be Exchanged

 

Exhibit B – Form of Officer’s Certificate of American Liberty Concerning Accuracy

 

Exhibit C – Form of Officer’s Certificate of Avant Concerning Accuracy

 

Exhibit D – Form of Transmittal Letter

 

Exhibit E – Form of Opinion of American Liberty’s Counsel

 

Exhibit F – Form of Opinion of Avant’s Counsel

 

Exhibit G – Form of Option Agreements

 

Exhibit H – Form of Cross Receipt

 

Exhibit I – Form of Convertible Script

 

 

Schedule 3

 

Schedule 4

 

 
 

 

AGREEMENT AND PLAN OF REORGANIZATION

 

This AGREEMENT AND PLAN OF REORGANIZATION (“Reorganization Agreement”) is entered into as of December 29, 2014, by and among American Liberty Petroleum Corp., a Nevada corporation (“ American Liberty ”), Avant Acquisition Corp., a Nevada corporation and a wholly owned subsidiary of American Liberty (“ Merger Sub ”), Avant Diagnostics, Inc., a Nevada corporation (“ Avant ”), and the stockholders of Avant are referred to as the (“ Avant Stockholders ”). American Liberty, Merger Sub, Avant and Avant Stockholders are referred to collectively herein as the “ Parties .”

 

R E C I T A L S :

 

A. Merger Sub, upon the terms and subject to the conditions of this Reorganization Agreement and in accordance with the applicable sections of the Nevada Revised Statutes (“ Nevada Law ”) will merge with and into Avant (the “Merger”).

 

B. The Board of Directors of American Liberty and sole shareholder of Merger Sub, have determined that the terms, conditions and transactions contemplated hereby are in the best interests of American Liberty and Merger Sub and have approved and adopted this Reorganization Agreement and in accordance with the applicable sections of Nevada Law (as defined below).

 

C. For federal income tax purposes, it is intended that the Reorganization will qualify as a tax-free reorganization under the provisions of Section 368(a)(2)(E) of the Code (as defined below).

 

D. Simultaneously with the Merger, without any action on the part of the Shareholders, their Avant shares will be exchanged for shares of American Liberty Common Stock.

 

E. Simultaneously with the Merger, without any action on the part of the option holders, their Avant options will be exchanged for options of American Liberty Options with identical terms.

 

F. The number of authorized and unissued shares of American Liberty is not sufficient to consummate the Reorganization Agreement in accordance with the terms. Therefore, the American Liberty Common Stock, as defined, will be represented by script that automatically converts to American Liberty Common Stock on the effective date of the action that creates sufficient shares for such conversion.

 

NOW, THEREFORE, in consideration of the premises and the mutual promises herein made, and in consideration of the representations, warranties, and covenants herein contained, the Parties agree as follows.

 

ARTICLE 1

 

DEFINITIONS

 

“Acquisition Proposal” has the meaning set forth in Section 5.06.

 

“Affiliate” has the meaning set forth in Rule 501 of Regulation D promulgated under the Securities Act.

 

“Affiliated Group” means any affiliated group within the meaning of Code Section 1504 or any similar group defined under a similar provision of state, local, or foreign law.

 

“American Liberty” has the meaning set forth in the preface to this Reorganization Agreement.

 

“American Liberty Balance Sheet” has the meaning set forth in Section 4.07(c).

 

“American Liberty Common Stock” means the convertible script that is convertible to common stock, par value $.00001 per share, of American Liberty in the form of Exhibit I.

 

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“American Liberty Disclosure Schedule” has the meaning set forth in Article 4.

 

“Avant” has the meaning set forth in the preface to this Reorganization Agreement.

 

“Avant Balance Sheet” has the meaning set forth in Section 3.07(c).

 

“Avant Common Stock” means the common stock, par value $.001 per share, of Avant.

 

“Avant Confidential Information” means any information concerning the businesses and affairs of Avant or Avant Sub that is not already generally available to the public.

 

“Avant Damages” has the meaning set forth in Section 9.16(a).

 

“Avant Disclosure Schedule” has the meaning set forth in Article 3.

 

“Avant Indemnified Persons” has the meaning set forth in 9.16 “Avant Capital Stock” has the meaning set forth in Section 2.06(a).

 

“Avant Most Recent Financial Statements” has the meaning set forth in Section 3.07(b).

 

“Avant Confidential Information” means any information concerning the businesses and affairs of Avant that is not already generally available to the public.

 

“Avant Damages” has the meaning set forth in Section 9.16(a).

 

“Avant Indemnified Persons” has the meaning set forth in Section 9.16(a).

 

“Avant Capital Stock” has the meaning set forth in Section 2.06(a).

 

“Avant Most Recent Financial Statements” has the meaning set forth in Section 3.07(b).

 

“Best Efforts” means the efforts that a prudent Person desirous of achieving a result would use in similar circumstances to ensure that such result is achieved as expeditiously as possible, provided, however, that an obligation to use Best Efforts under this Reorganization Agreement does not require the Person subject to that obligation to take actions that would result in a materially adverse change in the benefits to such Person from this Agreement and the Reorganization.

 

“Business Day” means a day of the year in which banks are not required or authorized to be closed in the City of Houston, Texas.

 

“CERCLA” means the United States Comprehensive Environmental Response, Compensation, and Liability Act.

 

“Certificates” has the meaning set forth in Section 2.07(a).

 

“Cleanup” means any investigative, monitoring, cleanup, removal, containment or other remedial or response action required by any Environmental Law or Occupational Safety and Health Law. The terms “removal,” “remedial,” and “response action” include the types of activities covered by CERCLA.

 

“Closing” has the meaning set forth in Section 2.02.

 

“Closing Date” has the meaning set forth in Section 2.02.

 

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“Code” means the Internal Revenue Code of 1986, as amended.

 

“Confidential Information” means any information concerning the businesses and affairs of Avant that is not already generally available to the public.

 

“Contravention” means an act or omission that would “Contravene” something if, as the context requires:

 

(i) the act or omission would conflict with it, violate it, and result in a breach or violation of or failure to comply with it, or constitute a default under it;

 

(ii) the act or omission would give any Governmental Body or other Person the right to challenge, revoke, withdraw, suspend, cancel, terminate, or modify it, to exercise any remedy or obtain any relief under it, or to declare a default or accelerate the maturity of any obligation under it; or

 

(iii) the act or omission would result in the creation of an Encumbrance on the stock or assets of the subject company.

 

“Controlled Group of Corporations” has the meaning set forth in Code Section 1563.

 

“Convertible Script” means the script that is convertible to common stock, par value $.00001 per share, of American Liberty in the form of Exhibit I.

 

“Cross Receipt” has the meaning set forth in Section 2.11(c).

 

“Deferred Intercompany Transaction” has the meaning set forth in Code Regulation Section 1.1502-13.

 

“Dissenting Shares” has the meaning set forth in Section 2.09.

 

“Effective Time” means the Effective Time of the Merger as defined in Section 2.02.

 

“Employee Benefit Plan” means any (a) nonqualified deferred compensation or retirement plan or arrangement which is an Employee Pension Benefit Plan, (b) qualified defined contribution retirement plan or arrangement which is an Employee Pension Benefit Plan, (c) qualified defined benefit retirement plan or arrangement which is an Employee Pension Benefit Plan (including any Multiemployer Plan), or (d) Employee Welfare Benefit Plan, cafeteria plan as defined in Section 125 of the Code, or material fringe benefit plan or program.

 

“Employee Pension Benefit Plan” has the meaning set forth in ERISA Section 3(2).

 

“Employee Welfare Benefit Plan” has the meaning set forth in ERISA Section 3(1).

 

“Encumbrance” means any charge, claim, mortgage, servitude, easement, right of way, community or other marital property interest, covenant, equitable interest, lien, option, pledge, security interest, preference, priority, right of first refusal, or similar restriction.

 

“Environment” means soil, land surface or subsurface strata, surface waters (including navigable water and ocean waters), groundwaters, drinking water supply, stream sediments, ambient air (including indoor air), plant and animal life, and any other similar medium or natural resource.

 

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“Environmental, Health, and Safety Liabilities” means any cost, damages, expense, Liability, or other responsibility arising from or under Environmental Law or Occupational Safety and Health Law, including those consisting of or relating to:

 

(i) any environmental, health, or safety matter or condition (including on-site or off-site contamination, occupational safety and health, and regulation of any chemical substance or product);

 

(ii) any fine, penalty, judgment, award, settlement, proceeding, damages, loss, claim, demand and response, investigative, monitoring, remedial, or inspection cost or expense arising under Environmental Law or Occupational Safety and Health Law;

 

(iii) financial responsibility under any Environmental Law or Occupational Safety and Health Law for Cleanup costs or corrective action, (whether or not such Cleanup has been required or requested by any Governmental Body or other Person) and for any natural resource damage; or

 

(iv) any other compliance, corrective, or remedial measures required under any Environmental Law or Occupational Safety and Health Law.

 

“Environmental Law” means CERCLA and any other Legal Requirement that requires or relates to:

 

(i) advising appropriate Governmental Bodies, employees, or the public of intended or actual Releases of pollutants or hazardous substances or materials, violations of discharge limits or other prohibitions and the commencement of activities, such as resource extraction or construction, that could have significant impact on the Environment;

 

(ii) preventing or reducing to acceptable levels the Release of pollutants or hazardous substances or materials into the Environment;

 

(iii) reducing the quantities, preventing the Release, or minimizing the hazardous characteristics of wastes that are generated;

 

(iv) assuring that products are designed, formulated, packaged, and used so that they do not present unreasonable risks to human health or the Environment when used or disposed of;

 

(v) protecting resources, species, or ecological amenities;

 

(vi) reducing to acceptable levels the risks inherent in the transportation of hazardous substances, pollutants, oil, or other potentially harmful substances;

 

(vii) Cleanup of pollutants that have been Released, preventing the threat of Release, or paying the costs of such Cleanup or prevention; or

 

(viii) making responsible parties pay private parties, or groups of them, for damages done to their health or the Environment, or permitting self-appointed representatives of the public interest to recover for injuries done to public assets.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 

“Facility” means any Real Property or tangible personal property interest owned or operated by Avant or American Liberty or their respective Subsidiaries.

 

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“FINRA” means the Financial Industry Regulatory Authority.

 

“GAAP” means United States generally accepted accounting principles as in effect from time to time.

 

“Governmental Body” means any:

 

(i) nation, region, state, county, city, town, village, district, or other jurisdiction;

 

(ii) federal, state, local, municipal, foreign or other government;

 

(iii) governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department, or other entity and any court or other tribunal);

 

(iv) multinational organization;

 

(v) body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, policy, regulatory, or taxing authority or power of any nature; and

 

(vi) official of any of the foregoing.

 

“Hazardous Activity” means the distribution, generation, handling, importing, management, manufacturing, processing, production, refinement, Release, storage, transfer, transportation, treatment, or use (including any withdrawal or other use of groundwater) of Hazardous Materials in, on, under, about, or from any of the Facilities or any part thereof into the Environment, and any other act, business, operation, or thing that increases the danger, or risk of danger, or poses an unreasonable risk of harm to individuals or property on or off the Facilities, or that may affect the value of any of the Facilities of Avant or American Liberty and its Subsidiaries.

 

“Hazardous Materials” means any waste or other substance that is listed, defined, designated, or classified as, or otherwise determined to be, hazardous, radioactive, or toxic or a pollutant or a contaminant under or pursuant to any Environmental Law, including any admixture or solution thereof, and specifically including petroleum and all derivatives thereof or synthetic substitutes therefore and asbestos or asbestos-containing materials.

 

“Including” has the meaning set forth in Section 9.12.

 

“Income Taxes” means all income and profits Taxes, capital taxes, franchise taxes and similar Taxes based on income, profits or capital (including any Taxes in lieu of such income or profits Taxes) imposed by any Federal, state, local or foreign governmental agency, whether in the form of assessments in the nature of Taxes or otherwise, together with all interest, penalties and additions imposed with respect to (a) such Taxes or (b) the late filing or no filing of returns relating to such Taxes.

 

“Information Statement” has the meaning set forth in Section 3.17.

 

“Intellectual Property” means (a) all inventions (whether patentable or unpatentable and whether or not reduced to practice), all improvements thereto, and all patents, patent applications, and patent disclosures, together with all reissuances, continuations, continuations-in-part, revisions, extensions, and reexaminations thereof, (b) all trademarks, service marks, trade dress, logos, trade names, and corporate names, together with all translations, adaptations, derivations, and combinations thereof and including all goodwill associated therewith, and all applications, registrations, and renewals in connection therewith, (c) all copyrightable works, all copyrights, and all applications, registrations, and renewals in connection therewith, (d) all mask works and all applications, registrations, and renewals in connection therewith, (e) all trade secrets and confidential business information (including ideas, research and development, know-how, formulas, compositions, manufacturing and production processes and techniques, technical data, designs, drawings, specifications, customer and supplier lists, pricing and cost information, and business and marketing plans and proposals), (f) all computer software (including data and related documentation), (g) all other proprietary rights, and (h) all copies and tangible embodiments thereof (in whatever form or medium).

 

5
 

 

“Knowledge” an individual will be deemed to have “Knowledge” of a particular fact or other matter if: (a) such individual is actually aware of such fact or other matter; or (b) a prudent individual could be expected to discover or otherwise become aware of such fact or other matter in the course of conducting a reasonably comprehensive investigation concerning the existence of such fact or other matter. A Person (other than an individual) will be deemed to have “Knowledge” of a particular fact or other matter if any individual who is serving, or who has at any time served, as a director, officer, partner, executor, or trustee of such Person (or in any similar capacity) has, or at any time had, Knowledge of such fact or other matter.

 

“Legal Requirement” means any constitution, law, statute, treaty, rule, regulation, ordinance, binding case law or principle of common law, notice, approval or Order of any Governmental Body, and any contract with any Governmental Body relating to compliance with any of the foregoing.

 

“Merger” has the meaning set forth in the Recitals above.

 

“Merger Consideration” has the meaning set forth in Section 2.06(b).

 

“Merger Sub” has the meaning set forth in the preface above.

 

“Multiemployer Plan” has the meaning set forth in ERISA Section 3(37).

 

“Occupational Safety and Health Law” means any Legal Requirement designed to provide safe and healthful working conditions and to reduce occupational safety and health hazards, and any program, whether governmental or private (such as those promulgated or sponsored by industry associations and insurance companies), designed to provide safe and healthful working conditions.

 

“Order” means any order, injunction, judgment, decree, ruling, assessment or arbitration award of any Governmental Body or arbitrator.

 

“Ordinary Course of Business” means any course of business, transaction or undertaking that, when consummated or undertaken, will not create a material adverse effect upon consummation of the transactions contemplated by the Reorganization Agreement.

 

“Outside Date” has the meaning set forth in Section 8.01(b).

 

“Outstanding Avant Capital Stock” means all Avant Capital Stock issued and outstanding immediately prior to the Effective Time.

 

“Parties” has the meaning set forth in the preface above.

 

“Person” means an individual, a partnership, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, or a governmental entity (or any department, agency, or political subdivision thereof).

 

6
 

 

“Real Property” means all real property of Avant or American Liberty and their respective Subsidiaries, including all parcels and tracts of land in which Avant or American Liberty and their respective Subsidiaries has a fee simple estate or a leasehold estate, and all improvements, easements and appurtenances thereto.

 

“Release” means any spilling, leaking, emitting, discharging, depositing, escaping, leaching, dumping, or other releasing into the Environment, whether intentional or unintentional.

 

“Reorganization” means, collectively, the Merger and corporate name change.

 

“Reorganization Agreement” has the meaning set forth in the preface above.

 

“Reportable Event” has the meaning set forth in ERISA Section 4043.

 

“SEC” means the United States Securities and Exchange Commission.

 

“SEC Reports” has the meaning set forth in Section 4.07(a).

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Securities Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Security Interest” means any mortgage, pledge, lien, encumbrance, charge, or other security interest, other than (a) mechanic’s, materialmen’s, and similar liens, (b) liens for Taxes not yet due and payable, and (c) purchase money liens and liens securing rental payments under capital lease arrangements.

 

“Stockholders” has the meaning set forth in the Recitals above.

 

“Subsidiary” means any corporation or other organization with respect to which a specified Person (or a Subsidiary thereof) owns a majority of the common stock or equity interests or has the power to vote or direct the voting of sufficient securities to elect a majority of the directors or other managing members.

 

“Surviving Company” has the meaning set forth in Section 2.01.

 

“Taxes” shall mean all excise, real and personal property, sales, use, customs duties, payroll, withholding, capital or franchise (based on capital and/or activity), estimated and other taxes, including Income Taxes, imposed by a federal, state, local or foreign governmental agency, whether in the form of assessments which are in the nature of Taxes or otherwise, together with all interest, penalties and additions imposed with respect to such amounts.

 

“Tax Returns” means returns, declarations, reports, claims for refund, information returns or other documents (including any related or supporting schedules, statements or information) filed or required to be filed in connection with the determination, assessment or collection of Taxes of any Party or the administration of any laws, regulations or administrative requirements relating to any Taxes.

 

“Threatened” means an action or matter would be considered to have been “Threatened” if a demand or statement has been made (whether orally or in writing) or a notice has been given (whether orally or in writing), or any other event has occurred or any other circumstances exist, that would lead a prudent Person to conclude that such action or matter is likely to be asserted, commenced, taken or otherwise pursued in the future.

 

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ARTICLE 2

 

THE REORGANIZATION

 

Section 2.01. Basic Merger Transaction . Upon the terms and subject to the conditions set forth in this Reorganization Agreement and in accordance with applicable Nevada Law, at the Effective Time, Merger Sub shall be merged with and into Avant. As set forth in Sections 2.06 and 2.07 hereunder, simultaneously with the Merger, the Avant Common Stock will be automatically converted to shares of American Liberty Common Stock. As a result of the Merger, all of the outstanding capital stock of Merger Sub and Avant Common Stock shall be converted or canceled in the manner provided in Section 2.06 of this Reorganization Agreement, the separate existence of Merger Sub shall cease and Avant will be the surviving corporation in the Merger.

 

Section 2.02. Effective Time; Closing . As promptly as practicable after Closing (defined below), and in no event later than the first Business Day following the satisfaction or, if permissible, waiver of the conditions set forth in Article 7 (or such other date as may be agreed in writing by each of the Parties), the Parties shall cause the Nevada Merger to be consummated by causing a certificate of merger (the “ Nevada Certificate of Merger ”) to become effective after filing with the Secretary of State of the State of Nevada(the “ Nevada Secretary ”) in such form as is required by, and executed in accordance with the relevant provisions of, Nevada Law. The term “ Effective Time ” means the date and time of the effective date specified in of the Nevada Certificate of Merger filed with the Nevada Secretary. Immediately prior to the effective time, a closing (the “ Closing ”) will be held at the Houston, Texas offices of Sonfield & Sonfield at 9:00 a.m., local time, on the first Business Day after the date on which the last of the conditions to Closing set forth in Article 7 hereof (other than conditions to be satisfied at the Closing) are fulfilled or waived by the appropriate Party, as the case may be (or such other time, date or place as the Parties may agree) (the “ Closing Date ”).

 

Section 2.03. Effect of the Merger . At the Effective Time, the effect of the Merger shall be as provided in the applicable provisions of Nevada Law.

 

Section 2.04. Certificate of Incorporation and Bylaws . At the Effective Time, the articles of incorporation and bylaws of Merger Sub, as in effect immediately prior to the Effective Time, shall be the articles of incorporation and bylaws of the Surviving Company, until thereafter amended as provided therein or by applicable law.

 

Section 2.05. Directors and Officers . At the Effective Time, the officers of Avant shall continue as the officers of the Surviving Company, to hold the office or position presently held with Avant and shall be added as officers and directors of American Liberty to hold office in accordance with the articles of incorporation and bylaws of American Liberty until a successor is elected or appointed and has qualified or until the earliest of such director’s death, resignation, removal or disqualification, or as otherwise provided in the bylaws of American Liberty.

 

Section 2.06. Conversion of Securities . At the Effective Time, by virtue of the Merger and without any action on the part of the Avant Stockholders, Merger Sub or Avant:

 

(a) The Avant Stockholders interest in Avant (the “ Avant Common Stock ”) issued and outstanding immediately prior to the Effective Time shall be converted into the right to receive the number of fully paid, non-assessable shares of American Liberty Common Stock issuable to the Persons set out in Exhibit A hereto (the “ Exchange Ratio ”).

 

(b) Shares of American Liberty Common Stock to be issued to holders of Avant Common Stock pursuant to Section 2.06(a) are referred to as the “ Merger Consideration .” If between the date of this Reorganization Agreement and the Effective Time, any Avant Common Stock held by a American Liberty stockholder shall be transferred to American Liberty and the Merger Consideration shall be correspondingly adjusted to the extent appropriate to reflect such transfer of shares.

 

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(c) In any event, if between the date of this Reorganization Agreement and the Effective Time, the outstanding shares of American Liberty Common Stock or Avant Common Stock shall have been changed into a different number of shares or interests or a different class, by reason of any declared or completed dividend, subdivision, reclassification, recapitalization, split, combination or exchange of shares or interests, the Merger Consideration shall be correspondingly adjusted to the extent appropriate to reflect such dividend, subdivision, reclassification, recapitalization, split, combination or exchange of shares. Upon surrender of the Avant Common Stock in accordance with Section 2.07, such holder of Avant Common Stock shall be entitled to receive the Merger Consideration.

 

(d) From and after the Effective Time, all Avant Capital Stock shall no longer be outstanding and shall automatically be canceled and retired and shall cease to exist, and all writings previously representing any such interests shall thereafter represent the right to receive the Merger Consideration into which such Avant Capital Stock were converted in the Merger upon surrender of the certificate(s) representing such interests in accordance with Section 2.07.

 

(e) Any Avant Capital Stock owned by Avant, American Liberty Merger Sub or any direct or indirect wholly owned subsidiary of Avant immediately prior to the Effective Time shall be canceled and extinguished without any conversion thereof and no payment shall be made with respect thereto.

 

(f) Each share of capital stock of Merger Sub issued and outstanding immediately prior to the Effective Time shall be converted into and become one validly issued, fully paid and nonassessable share of capital stock of the Surviving Company at the Effective Time, and the Surviving Company thereafter shall not have other equity securities.

 

(g) In addition to the shares of American Liberty Common Stock to be issued to holders of Avant Common Stock pursuant to Section 2.06(a), American Liberty will issue the number of options to purchase shares of common stock shown on Exhibit A substantially in the form attached as Exhibit G.

 

Section 2.07. Exchange of Certificates .

 

(a) At the Closing, each holder of record of a certificate or certificates (the “ Certificates ”) which immediately prior to the Effective Time represented Outstanding Avant Capital Stock shall tender such Certificates to American Liberty or its designated transfer or exchange agent along with a completed and executed transmittal letter substantially in the form of Exhibit D (“ Transmittal Letter ”), along with such other documents as American Liberty may reasonably request, including a stock power. Upon surrender of a Certificate for cancellation to American Liberty together with a completed and executed Transmittal Letter and such duly executed documents as may be required, the holder of such Certificate shall be entitled to receive in exchange therefore the Merger Consideration which such holder has the right to receive in respect of American Liberty Capital Stock formerly represented by such Certificates, together with any dividends or other distributions to which such holder is entitled pursuant to Section 2.07(b). The surrendered Certificates shall then be marked canceled. In the event of a transfer of ownership of Avant Capital Stock which is not registered in the transfer records of Avant and, the Merger Consideration may be paid in accordance with Article 2 to the transferee if the Certificates representing such shares of Avant Capital Stock are presented to American Liberty, accompanied by a completed and executed Transmittal Letter along with all documents required to evidence and effect such transfer and by evidence that any applicable stock transfer taxes have been paid. Until surrendered as contemplated by this Section 2.07(a), each Certificate shall be deemed at any time after the Effective Time to represent only the right to receive, upon such surrender, the Merger Consideration, and any dividends or other distributions to which such holder is entitled pursuant to Section 2.07(b). No interest shall be paid on the Merger Consideration.

 

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(b) No dividends or other distributions declared or made after the Effective Time with respect to American Liberty Common Stock with a record date after the Effective Time shall be paid to the holder of any unsurrendered Certificate with respect to the shares of Common Stock evidenced thereby until the holder of such Certificate shall surrender such Certificate. Subject to the effect of applicable laws, following surrender of any such Certificate, there shall be paid to the holder of such Certificate, in addition to the shares of American Liberty Common Stock as provided in Section 2.07(a), without interest, the amount of dividends or other distributions with a record date after the Effective Time theretofore paid with respect to the whole shares of Avant Common Stock evidenced by such Certificate.

 

(c) The Merger Consideration issued or paid upon conversion of the Outstanding Avant Capital Stock in accordance with the terms hereof (including any cash paid or other distributions pursuant to Sections 2.07(b) shall be deemed to have been issued or paid in full satisfaction of all rights pertaining to such Avant Capital Stock.

 

(d) Neither American Liberty nor the Surviving Company shall be liable to Avant and for any Merger Consideration (or dividends or distributions with respect thereto) which remains undistributed to the holders of Avant Capital Stock for one year after the Effective Time and is delivered to a public official pursuant to any applicable abandoned property, escheat or similar law.

 

(e) If the representation of ownership of any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Avant Stockholder claiming such Certificate to be lost, stolen or destroyed and, if required by Avant, the posting by such Avant Stockholder of a bond in such reasonable amount as Avant may direct as indemnity against any claim that may be made against it with respect to such Avant Certificate, American Liberty will issue in exchange for such lost, stolen or destroyed Certificate the Merger Consideration, and unpaid dividends and distributions on the Merger Consideration deliverable in respect thereof pursuant to this Reorganization Agreement.

 

(f) No certificates or script evidencing fractional shares of American Liberty Common Stock shall be issued upon the surrender for exchange of Certificates, but in lieu thereof each equity holder of Avant and who would otherwise be entitled to receive a fraction of a share of American Liberty Common Stock, after aggregating all fractional shares of Avant Common Stock which such holder would be entitled to receive under Section 2.06, shall receive the next larger number of whole shares of American Liberty Common Stock to which such holder would otherwise be entitled.

 

Section 2.08. Stockholder Transfer Books . At the Effective Time, the stockholders transfer books of Avant and shall be closed and there shall be no further registration of transfers of Avant Capital Stock thereafter on the records of Avant. On or after the Effective Time, any Certificates presented to American Liberty for any reason shall be converted into the Merger Consideration, and any dividends or other distributions to which they are entitled pursuant to Section 2.07(b) in accordance with the terms of this Reorganization Agreement.

 

Section 2.09. Dissenting Stockholders . Avant Capital Stock that have not been voted for adoption of the merger and with respect to which dissenter’s rights have been properly demanded in accordance with Nevada Law (“Dissenting Shares”), shall not be converted into the right to receive the Merger Consideration at or after the Effective Time unless and until the holder of such shares withdraws his demand for dissenter’s rights or becomes ineligible of dissenter’s rights. If a holder of Dissenting Shares withdraws his demand for dissenter’s rights or becomes ineligible of dissenter’s rights, then, as of the Effective Time or the occurrence of such event, whichever later occurs such holder’s Dissenting Shares shall cease to be Dissenting Shares and shall be converted into and represent the right to receive the Merger Consideration.

 

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Section 2.10. Stock Options . At the Effective Time, each then outstanding option to purchase Avant Common Stock listed on Exhibit A, shall, as of the Effective Time, automatically and without any action on the part of the holder thereof, be converted to options of American Liberty.

 

Section 2.11. Additional Covenants and Agreements .

 

(a) The parties will cause to be executed and filed and recorded any document or documents prescribed by Nevada Law that they will cause to be performed all necessary acts within the State of Nevada and elsewhere to effectuate the merger herein provided for.

 

(b) Avant will appoint the officers and directors, each acting alone, as its true and lawful attorneys in fact to do any and all acts and things, and to make, execute, deliver, file, and record any and all instruments, papers, and documents which shall be or become necessary, proper, or convenient to carry out or put into effect any of the provisions of this Reorganization Agreement.

 

(c) Upon completion of the exchange of Certificates as provided in Section 2.07, Stockholders and American Liberty will execute and deliver a cross receipt substantially in the form of Exhibit H hereto.

 

ARTICLE 3

 

REPRESENTATIONS AND WARRANTIES OF AVANT AND STOCKHOLDERS

 

Avant and Stockholders represent and warrant to American Liberty that, to their respective Knowledge, the statements contained in this Article 3 are correct and complete in all material respects as of the date of this Reorganization Agreement and will be correct and complete in all material respects as of the Closing Date (as though made then and as though the Closing Date were substituted for the date of this Reorganization Agreement throughout this Article 3), except as set forth in the disclosure schedule delivered by Avant to American Liberty on the date hereof and initialed by the Parties (the “Avant Disclosure Schedule”). Any disclosure in Avant Disclosure Schedule shall be deemed adequate to disclose an exception to a representation or warranty made herein, if Avant Disclosure Schedule identifies the exception with reasonable particularity, describes the relevant facts in reasonable detail and identifies the subsection of this Article 3 to which the exception applies. Without limiting the generality of the foregoing, the mere listing (or inclusion of a copy) of a document or other item shall not be deemed adequate to disclose an exception to a representation or warranty made herein (unless the representation or warranty has to do with the existence of the document or other item itself). Avant Disclosure Schedule will be arranged in paragraphs corresponding to the lettered and numbered paragraphs contained in this Article 3.

 

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Section 3.01. Organization, Qualification and Corporate Power . Avant is a corporation duly organized, validly existing, and in good standing under Nevada Law. Avant is duly authorized to conduct business and is in good standing under the laws of each jurisdiction where such qualification is required. Avant has full corporate power and authority and all licenses, permits and authorizations necessary to carry on the businesses in which it is engaged, to own and use the properties owned and used by it and to execute and deliver this Reorganization Agreement and to perform its obligations hereunder and to consummate the Merger and the transactions contemplated thereby. Section 3.01 of Avant Disclosure Schedule lists the directors and officers of Avant. Except as set forth on Section 3.01 of Avant Disclosure Schedule, each of Avant does not have and never has had any equity or ownership interests in any corporation, partnership, joint venture, limited liability company or other legal entity. The execution and delivery of this Reorganization Agreement and the other agreements, documents and instruments executed in connection herewith to which Avant are a party and the consummation by Avant of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action and no other corporate proceedings on the part of Avant are necessary to authorize this Reorganization Agreement or such other agreements, documents and instruments or to consummate the Mergers and the transactions contemplated thereby (other than the filing and recordation of the Nevada Certificate of Merger with the Nevada Secretary as required by Nevada Law. The Reorganization Agreement and the other agreements, documents and instruments executed in connection herewith to which Avant are a party has been duly and validly executed and delivered by Avant and constitute a legal, valid and binding obligation of Avant, enforceable against Avant in accordance with their respective terms. The minute books (containing the records of meetings of the directors and any committees of Avant) and the corporate record books of each of Avant are correct and complete. Avant is not in default under or in violation of any provision of its articles of incorporation and bylaws.

 

Section 3.02. No contravention . Except as set out on Section 3.02 of Avant Disclosure Schedule, neither the execution and the delivery of this Reorganization Agreement, nor the consummation of the transactions contemplated hereby, will (a) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which Avant is subject or any provision of its articles of incorporation or (b) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, contract, lease, license, instrument, or other arrangement to which Avant is a party or by which it is bound or to which any of its assets is subject (or result in the imposition of any Security Interest upon any of its assets). None of Avant needs to give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order for the Parties to consummate the transactions contemplated by this Reorganization Agreement, other than the filing and recordation of the Nevada Certificate of Merger with the Nevada Secretary.

 

Section 3.03. Capitalization . Section 3.03 of Avant Disclosure Schedule sets out the outstanding shares of capital stock of Avant. All of the issued and Outstanding Avant Capital Stock have been duly authorized, are validly issued, fully paid, and nonassessable. Except as set forth in Section 3.03(a) of Avant Disclosure Schedule, there are no outstanding or authorized options, warrants, purchase rights, subscription rights, conversion rights, exchange rights, or other contracts or commitments that could require Avant to issue, sell, or otherwise cause to become outstanding any of its Avant Capital Stock. Other than the Outstanding Avant Capital Stock, there is no outstanding or authorized appreciation, profit participation, or similar rights with respect to Avant. Except as set forth in Section 3.03(b) of Avant Disclosure Schedule, there are no voting trusts, proxies, or other agreements or understandings with respect to the voting of the Avant Capital Stock of Avant. Section 3.03(a) of Avant Disclosure Schedule shall set forth the date of grant, exercise price, number of Avant Capital Stock exercisable for and the expiration date for each outstanding option, warrant and other convertible security of Avant. Section 3.03(c) of Avant Disclosure Schedule shall set forth each outstanding option, warrant and other convertible security of Avant that is subject to registration rights.

 

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Section 3.04. Brokers’ Fees . None of Avant or Stockholders has any liability or obligation to pay any fees or commissions to any broker, finder, or agent with respect to the transactions contemplated by this Reorganization Agreement.

 

Section 3.05. Title to Assets . Except as set forth in Section 3.05 of Avant Disclosure Schedule, Avant have good and marketable title to, or a valid leasehold interest in, the properties and assets used by them, located on their premises, or shown on Avant Balance Sheet (as defined in Section 3.07) or acquired after the date thereof, free and clear of all Security Interests, except for properties and assets disposed of in the Ordinary Course of Business since the date of Avant Balance Sheet.

 

Section 3.06. Subsidiaries . Section 3.06 of Avant Disclosure Schedule sets forth for each Subsidiary of Avant (i) its name and jurisdiction of organization, (ii) the description of its equity interests, and (iii) the number of issued and outstanding equity interests, the names of the holders thereof, and the amount of equity interests held by each such holder.

 

Section 3.07. Financial Statements .

 

(a) The Avant audited financial Statements (including, in each case, any notes thereto) (i) are in accordance with the books and records of Avant; (ii) present fairly and accurately the financial condition of Avant, as of the dates of the balance sheets; (iii) present fairly and accurately the results of operations for the periods covered by such statements; (iv) present fairly and accurately the changes in shareholder’s equity and cash flows for the periods covered by such statements; (v) have been prepared in accordance with GAAP applied on a consistent basis; and (vi) include all adjustments (consisting of only normal recurring accruals) which are necessary for a fair presentation of the financial condition of Avant, and of the results of operations of Avant for the periods covered by such statements, and fairly present the financial position, results of operations and changes in shareholder’s equity and cash flows of Avant and its consolidated Subsidiaries as of the respective dates thereof and for the respective periods indicated therein.

 

(b) The audited balance sheet and statement of income and cash flow (“ Avant Most Recent Financial Statements ”) as of and for the year ended September 30, 2014 and September 30, 2013 for Avant have been prepared in accordance with GAAP applied on a consistent basis and present fairly the financial condition of Avant as of such dates and the results of operations of Avant for such periods.

 

(c) Except to the extent set forth on the audited consolidated balance sheet of Avant as of September 30, 2014 and September 30, 2013, including the notes to the audited financial statements of which such balance sheet is a part, for the year ended September 30, 2014 and September 30, 2013 (the “ Avant Balance Sheet ”), Avant has no liability or obligation of any nature (whether accrued, absolute, contingent or otherwise) which would be required to be reflected on a balance sheet, or in the notes thereto, prepared in accordance with generally accepted accounting principles applied on a consistent basis.

 

(d) Except as set forth herein or in Section 3.07 of Avant Disclosure Schedule, since December 31, 2012, there has not been any material adverse change in the financial condition of Avant.

 

Section 3.08. Undisclosed Liabilities . Except as set forth in Section 3.08 of Avant Disclosure Schedule, none of Avant have any liability (whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due, including any liability for Taxes), and there is no basis for any present or future action, suit, proceeding, hearing, investigation, charge, complaint, claim or demand against any of them giving rise to any liability, except for liabilities set forth on the face of Avant Balance Sheet (rather than in any notes thereto).

 

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Section 3.09. Legal Compliance . Except as set forth herein or in Section 3.09 of Avant Disclosure Schedule each of Avant and their respective predecessors and Affiliates has complied with all applicable laws (including rules, regulations, codes, plans, injunctions, judgments, orders, decrees, rulings, and charges thereunder) of federal, state, local, and foreign governments (and all agencies thereof), including all import and export laws relating to its products and business and the payment of all customs duties or other official charges incurred, due or owed by Avant and no action, suit, proceeding, hearing, investigation, charge, complaint, claim, demand, or notice has been filed or commenced against any of them alleging any failure so to comply.

 

Section 3.10. Real Property . Except as set forth in Section 3.10 of Avant Disclosure Schedule, Avant owns good and defensible title to all real property used in the operation of its business.

 

Section 3.11. Tangible Assets . The tangible assets that Avant own and lease are free from material defects (patent and latent), have been maintained in accordance with normal industry practice, and are in good operating condition and repair (subject to normal wear and tear), and is suitable for the purpose for which it presently is used.

 

Section 3.12. Intentionally Omitted .

 

Section 3.13. Employees . None of Avant is a party to or bound by any collective bargaining agreement, nor has it experienced any strike or material grievance, claim of unfair labor practices, or other collective bargaining dispute within the past three years. None of Avant have committed any material unfair labor practice. None of Avant or management of Avant has any Knowledge of any organizational effort presently being made or threatened by or on behalf of any labor union with respect to employees of Avant.

 

Section 3.14. Guaranties . None of Avant is a guarantor or otherwise is responsible for any liability or obligation (including indebtedness) of any other Person.

 

Section 3.15. Certain Business Practices . Avant and, to the knowledge of Avant and each director, officer, authorized agent or employee of Avant have not, directly or indirectly, (a) used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity, (b) made any unlawful payment to foreign or domestic government officials or employees or to foreign or domestic political parties or campaigns or violated any provision of the Foreign Corrupt Practices Act of 1977, as amended, (c) made any other unlawful payment, (d) violated any of the provisions of Section 999 of the Code or Section 8 of the Export Administration Act, as amended, or (e) established or maintained any fund or asset that has not been recorded in the books and records of Avant.

 

Section 3.16. Parachute Payments . Avant has not entered into any agreement that would result in the making of “parachute payments,” as defined in Section 280G of the Code, to any Person.

 

Section 3.17. Information Statement . The information supplied or to be supplied by or on behalf of Avant for inclusion or incorporated by reference in any Avant information statement that may be required pursuant to Regulation 14C pursuant to Section 14(c) of the Exchange Act, in definitive form (the “ Information Statement ”), will not, at the date mailed to the Avant stockholders, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. The Information Statement, insofar as it relates to Avant, will comply as to form in all material respects with the applicable provisions of the Exchange Act and rules and regulations thereunder.

 

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Section 3.18. Environment, Health, and Safety .

 

(a) Avant is, and at all times has been, in full compliance with, and has not been and is not in Contravention of or liable under, any Environmental Law or Occupational Safety and Health Law. None of Avant has any basis to expect, nor has any of them or any other Person for whose conduct they are or may be held responsible received, any actual or Threatened Order, notice, or other communication from (i) any Governmental Body or other Person acting in the public interest, or (ii) the current or prior owner or operator of any Facility, of any actual or potential violation or failure to comply with any Environmental Law, or of any actual or Threatened obligation to undertake or bear the cost of any Environmental, Health, and Safety Liabilities with respect to any Facility or other property or asset (whether real, personal, or mixed) in which any of Avant has had an interest, or with respect to any property or Facility at or to which Hazardous Materials were generated, manufactured, refined, transferred, imported, used, or processed by Avant or any other Person for whose conduct they are or may be held responsible, or from which Hazardous Materials have been transported, treated, stored, handled, transferred, disposed, recycled, or received.

 

(b) There are no pending or Threatened, claims, Encumbrances or other restrictions of any nature, resulting from any Environmental, Health, and Safety Liabilities or arising under or pursuant to any Environmental Law or Occupational Safety and Health Law, with respect to or affecting any Facilities or any other properties and assets (whether real, personal, or mixed) in which any of Avant has or had an interest.

 

(c) None of Avant has any basis to expect, nor has any of them or any other Person for whose conduct they are or may be held responsible, received, any citation, directive, inquiry, notice, Order, summons, warning, or other communication that relates to Hazardous Activity, Hazardous Materials, or any actual, alleged, possible or potential Contravention of or failure to comply with any Environmental Law or Occupational Safety and Health Law, or of any actual, alleged, possible or potential obligation to undertake or bear the cost of any Environmental, Health, and Safety Liabilities with respect to any Facility or other property or asset (whether real, personal, or mixed) in which any of Avant had an interest, or with respect to any property or facility to or by which Hazardous Materials generated, manufactured, refined, transferred, imported, used, or processed by any of Avant or any other Person for whose conduct they are or may be held responsible, have been transported, treated, stored, handled, transferred, disposed, recycled, or received. Neither Avant nor any other Person for whose conduct they are or may be held responsible, has any Environmental, Health, and Safety Liabilities with respect to any Facility or with respect to any other property or asset (whether real, personal, or mixed) in which any of Avant (or any predecessor), has or had an interest, or at any property geologically or hydrologically adjoining any Facility or any such other property or asset.

 

(d) There has been no Release or, to Avant’s Knowledge, Threat of Release, of any Hazardous Materials at or from any Facility or at any other location where any Hazardous Materials were generated, manufactured, refined, transferred, produced, imported, used, or processed from or by any Facility, or from any other property or asset (whether real, personal, or mixed) in which any of Avant has or had an interest, or any geologically or hydrologically adjoining property, whether by any of Avant or any other Person.

 

(e) Avant has delivered to American Liberty true and complete copies and results of any reports, studies, analyses, tests, or monitoring possessed or initiated by any of Avant pertaining to Hazardous Materials or Hazardous Activities in, on, or under any Facilities, or concerning compliance by any of Avant or any other Person for whose conduct they are or may be held responsible, with Environmental Laws.

 

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ARTICLE 4

 

REPRESENTATIONS AND WARRANTIES OF AMERICAN LIBERTY

 

American Liberty represents and warrants to Avant that, to its Knowledge, the statements contained in this Article 4 are correct and complete in all material respects as of the date of this Reorganization Agreement and will be correct and complete in all material respects as of the Closing Date (as though made then and as though the Closing Date were substituted for the date of this Reorganization Agreement throughout this Article 4), except as set forth in the disclosure schedule delivered by American Liberty to Avant on the date hereof and initialed by the Parties (the “ American Liberty Disclosure Schedule ”). Any disclosure in the American Liberty Disclosure Schedule shall be deemed adequate to disclose an exception to a representation or warranty made herein, if the American Liberty Disclosure Schedule identifies the exception with reasonable particularity, describes the relevant facts in reasonable detail and identifies the subsection of this Article 4 to which the exception applies. Without limiting the generality of the foregoing, the mere listing (or inclusion of a copy) of a document or other item shall not be deemed adequate to disclose an exception to a representation or warranty made herein (unless the representation or warranty has to do with the existence of the document or other item itself). The American Liberty Disclosure Schedule will be arranged in paragraphs corresponding to the lettered and numbered paragraphs contained in this Article.

 

Section 4.01. Organization, Qualification, and Corporate Power . American Liberty is a corporation duly organized, validly existing, and in good standing under the laws of the jurisdiction of its incorporation. American Liberty is duly authorized to conduct business and is in good standing under the laws of each jurisdiction where such qualification is required. American Liberty has full corporate power and authority and all licenses, permits and authorizations necessary to carry on the businesses in which it is engaged, to own and use the properties owned and used by it and to execute and deliver this Reorganization Agreement and to perform its obligations hereunder and to consummate the Merger and the transactions contemplated thereby. Section 4.01 of the American Liberty Disclosure Schedule lists the directors and officers of American Liberty. Except as set forth on Section 4.01 of the American Liberty Disclosure Schedule, American Liberty does not have and never has had any equity or ownership interests in any corporation, partnership, joint venture, limited liability company or other legal entity. The execution and delivery of this Reorganization Agreement by American Liberty and the other agreements, documents and instruments executed in connection herewith to which American Liberty is a party and the consummation by American Liberty of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action and no other corporate proceedings on the part of American Liberty are necessary to authorize this Reorganization Agreement or such other agreements, documents and instruments or to consummate the Merger and the transactions contemplated thereby (other than the filing and recordation of the Nevada Certificate of Merger with the Nevada Secretary by Merger Sub as required by Nevada Law). The Reorganization Agreement and the other agreements, documents and instruments executed in connection herewith to which American Liberty is a party has been duly and validly executed and delivered by American Liberty and constitute a legal, valid and binding obligation of American Liberty, enforceable against American Liberty in accordance with their respective terms. The minute books (containing the records of meetings of the stockholders, the board of directors, and any committees of the board of directors), the stock certificate books, and the stock record books of American Liberty are correct and complete. American Liberty is not in default under or in violation of any provision of its charter or bylaws.

 

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Section 4.02. Capitalization . Section 4.02 of the American Liberty Disclosure Schedule lists the outstanding warrants or options to purchase common stock of American Liberty and reflects, as of the Effective Time, the capitalization of American Liberty including: (i) the number of authorized shares of American Liberty Common Stock, (ii) the number of issued and outstanding shares of American Liberty Common Stock, (iii) the number of authorized shares of American Liberty Preferred Stock, (iv) the number and designation of issued and outstanding shares of American Liberty Preferred Stock, (v) the date of grant, exercise price, number of shares of American Liberty Common Stock exercisable for and the expiration date for each outstanding option, warrant and other convertible security of American Liberty, (vi) outstanding or authorized options, warrants, purchase rights, subscription rights, conversion rights, exchange rights, or other contracts or commitments that could require American Liberty to issue, sell, or otherwise cause to become outstanding any of its capital stock, (vii) each outstanding option, warrant and other convertible security of American Liberty, (viii) outstanding or authorized stock appreciation, phantom stock, profit participation, or similar rights. No American Liberty Common Stock shares were held in treasury. All of the issued and outstanding shares of American Liberty Common Stock have been duly authorized, are validly issued, fully paid and nonassessable and not subject to preemptive rights. There are no voting trusts, proxies, or other agreements or understandings with respect to the voting of the capital stock of American Liberty.

 

Section 4.03. Noncontravention . Neither the execution and the delivery of this Reorganization Agreement, nor the consummation of the transactions contemplated hereby, will (a) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which American Liberty is subject or any provision of the charter or bylaws of American Liberty or (b) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, contract, lease, license, instrument, or other arrangement to which American Liberty is a party or by which it is bound or to which any of its assets is subject (or result in the imposition of any Security Interest upon any of its assets). American Liberty needs to give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order for the Parties to consummate the transactions contemplated by this Reorganization Agreement, other than the filing and recordation of the Nevada Certificate of Merger with the Nevada Secretary.

 

Section 4.04. Brokers’ Fees . Except as set forth in Section 4.04 of the American Liberty Disclosure Schedule, American Liberty has no liability or obligation to pay any fees or commissions to any broker, finder, or agent with respect to the transactions contemplated by this Reorganization Agreement.

 

Section 4.05. Title to Assets . American Liberty have good and marketable title to, or a valid leasehold interest in, the properties and assets used by them, located on their premises, or shown on the American Liberty Balance Sheet (as defined in Section 4.07) or acquired after the date thereof, free and clear of all Security Interests, except for properties and assets disposed of in the Ordinary Course of Business since the date of the American Liberty Balance Sheet.

 

Section 4.06. Subsidiaries . Section 4.06 of the American Liberty Disclosure Schedule sets forth for each Subsidiary of American Liberty (i) its name and jurisdiction of incorporation, (ii) the number of shares of authorized capital stock of each class of its capital stock, (iii) the number of issued and outstanding shares of each class of its capital stock, the names of the holders thereof, and the number of shares held by each such holder, and (iv) the number of shares of its capital stock held in treasury. All of the issued and outstanding shares of capital stock of each Subsidiary of American Liberty have been duly authorized and are validly issued, fully paid, and nonassessable. American Liberty holds of record and owns beneficially all of the outstanding shares of each Subsidiary of American Liberty, free and clear of any restrictions on transfer (other than restrictions under the Securities Act and state securities laws), Taxes, Security Interests, options, warrants, purchase rights, contracts, commitments, equities, claims, and demands. There is no outstanding stock appreciation, phantom stock, profit participation, or similar rights with respect to American Liberty. There are no voting trusts, proxies, or other agreements or understandings with respect to the voting of any capital stock of any Subsidiary of American Liberty. American Liberty does not control directly or indirectly or have any direct or indirect equity participation in any corporation, partnership, trust, or other business association which is not a Subsidiary of American Liberty.

 

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Section 4.07. SEC Filings; Financial Statements .

 

(a) American Liberty has timely filed all forms, reports, statements and documents (collectively, the “ SEC Reports ”) required to be filed by it within the past twelve months with the SEC. The SEC Reports, after giving effect to any amendments thereto, (i) were prepared in accordance with the requirements of the Securities Act and the Exchange Act, as the case may be, and the rules and regulations thereunder and (ii) did not, at the time they were filed, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. No Subsidiary of American Liberty is currently required to file any form, report or other document with the SEC.

 

(b) Each of the financial statements (including, in each case, any notes thereto) contained in the SEC Reports (i) are in accordance with the books and records of American Liberty; (ii) present fairly and accurately the financial condition of American Liberty, as of the dates of the balance sheets; (iii) present fairly and accurately the results of operations for the periods covered by such statements; (iv) present fairly and accurately the changes in stockholders’ equity and cash flows for the periods covered by such statements; (v) have been prepared in accordance with GAAP applied on a consistent basis; (vi) include all adjustments (consisting of only normal recurring accruals which are necessary for a fair presentation of the financial condition of American Liberty, and of the results of operations of American Liberty for the periods covered by such statements; and (vii) fully comply with all requirements of SEC Regulation S-K and all applicable securities laws, and each fairly presented the financial position, results of operations and changes in stockholders’ equity and cash flows of American Liberty and its consolidated Subsidiaries as of the respective dates thereof and for the respective periods indicated therein.

 

(c) Except to the extent set forth on the audited consolidated balance sheet of American Liberty as of October 31, 2013, including the notes to the audited financial statements of which such balance sheet is a part and which is included in American Liberty’s Form 10-K for the year ended October 31, 2013 (the “ American Liberty Balance Sheet ”), and any subsequent quarterly filings on Form 10-K neither American Liberty nor any of its Subsidiaries has any liability or obligation of any nature (whether accrued, absolute, contingent or otherwise) which would be required to be reflected on a balance sheet, or in the notes thereto, prepared in accordance with generally accepted accounting principles applied on a consistent basis.

 

(d) American Liberty has heretofore made available to Avant, true, complete and correct copies of all amendments and modifications (if any) that have not been filed by American Liberty with the SEC to all agreements, documents and other instruments that previously had been filed by American Liberty as exhibits to the SEC Reports and are currently in effect.

 

Section 4.08. Absence of Certain Changes or Events . Since October 31, 2012, there has not been any material adverse change in the business, financial condition, operations, results of operations, or future prospects of American Liberty. Without limiting the generality of the foregoing, since that date:

 

(a) American Liberty has not sold, leased, transferred, or assigned any material assets, tangible or intangible, outside the Ordinary Course of Business;

 

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(b) American Liberty has not entered into any material agreement, contract, lease, or license (or series of related agreements, contracts, leases and licenses) outside the Ordinary Course of Business;

 

(c) no party (including American Liberty) has accelerated, terminated, modified, or cancelled any agreement, contract, lease, or license (or series of related agreements, contracts, leases, and licenses) involving more than $100,000 to which American Liberty is a party or by which any of them is bound;

 

(d) American Liberty has not imposed any Security Interest upon any of its assets, tangible or intangible;

 

(e) American Liberty has not made any capital expenditures (or series of related capital expenditures) in excess of $100,000;

 

(f) except as set forth in Section 4.08(f) of the American Liberty Disclosure Schedule, American Liberty has not made any capital investment in, any loan to, or any acquisition of the securities or assets of, any other Person;

 

(g) American Liberty has not issued any note, bond, or other debt security or created, incurred, assumed, or guaranteed any indebtedness for borrowed money and capitalized lease obligations either involving more than $10,000 singly or $100,000 in the aggregate;

 

(h) American Liberty has not granted any license or sublicense of any rights under or with respect to any Intellectual Property;

 

(i) there has been no change made or authorized in the charter or bylaws of American Liberty;

 

(j) American Liberty has not issued, sold, or otherwise disposed of any of its capital stock, or granted any options, warrants, or other rights to purchase or obtain (including upon conversion, exchange, or exercise) any of its capital stock, other than transactions identified in Form 8-K, Form 10-K or Form 10-Q as previously reported;

 

(k) except as set forth in Section 4.08(k) of the American Liberty Disclosure Schedule, American Liberty has not declared, set aside, or paid any dividend or made any distribution with respect to its capital stock (whether in cash or in kind) or redeemed, purchased, or otherwise acquired any of its capital stock;

 

(l) American Liberty has not experienced any damage, destruction, or loss (whether or not covered by insurance) to its property;

 

(m) except as set forth in Section 4.08(m) of the American Liberty Disclosure Schedule, American Liberty has not made any loan to, or entered into any other transaction with, any of its directors, officers, and employees;

 

(n) American Liberty has not entered into any employment contract, except for the ones entered into with American Liberty’s CEO and CFO, or collective bargaining agreement, written or oral, or modified the terms of any such existing contract or agreement;

 

(o) American Liberty has not granted any increase in the base compensation of any of its directors or officers or any of its other employees outside the Ordinary Course of Business;

 

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(p) American Liberty has not adopted, amended, modified, or terminated any bonus, profit-sharing, incentive, severance, or other plan, contract, or commitment for the benefit of any of its directors, officers, and employees (or taken any such action with respect to any other Employee Benefit Plan);

 

(q) American Liberty has not made any other change in employment terms for any of its directors, officers, and employees, outside of those made with American Liberty’s CEO and CFO; and

 

(r) except as set forth in Section 4.08(r) of the American Liberty Disclosure Schedule, American Liberty has not delayed or postponed the payment of accounts payable and other liabilities outside the Ordinary Course of Business;

 

(s) American Liberty has not cancelled, compromised, waived, or released any right or claim (or series of related rights and claims) either involving more than $10,000 or outside the Ordinary Course of Business;

 

(t) American Liberty has not made or pledged to make any charitable or other capital contribution outside the Ordinary Course of Business;

 

(u) there has not been any other occurrence, event, incident, action, failure to act, or transaction outside the Ordinary Course of Business involving American Liberty; and

 

(v) American Liberty has not committed to any of the foregoing.

 

Section 4.09. Undisclosed Liabilities . American Liberty has no liability (whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due, including any liability for Taxes), and there is no basis for any present or future action, suit, proceeding, hearing, investigation, charge, complaint, claim or demand against American Liberty giving rise to any liability, except for liabilities set forth on the face of the American Liberty Balance Sheet (rather than in any notes thereto).

 

Section 4.10. Legal Compliance . Each of American Liberty, its Subsidiaries, and their respective predecessors and Affiliates has complied with all applicable laws (including rules, regulations, codes, plans, injunctions, judgments, orders, decrees, rulings, and charges thereunder) of federal, state, local, and foreign governments (and all agencies thereof), including all import and export laws relating to its products and business and the payment of all customs duties or other official charges incurred, due or owed by American Liberty or its Subsidiaries, and no action, suit, proceeding, hearing, investigation, charge, complaint, claim, demand, or notice has been filed or commenced against any of them alleging any failure so to comply.

 

Section 4.11. Tax Matters .

 

(a) American Liberty has NOT filed or caused to be filed in a timely manner (within any applicable extension periods) all Tax Returns that it was required to file. All such Tax Returns were NOT complete and accurate in all material respects. All Taxes owed by American Liberty (whether or not shown on any Tax Return) have been paid. American Liberty is not currently the beneficiary of any extension of time within which to file any Tax Return. No claim has ever been made by an authority in a jurisdiction where American Liberty does not file Tax Returns that it is or may be subject to taxation by that jurisdiction. There are no Security Interests on any of the assets of American Liberty that arose in connection with any failure (or alleged failure) to pay any Tax.

 

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(b) American Liberty has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder, or other third party.

 

(c) No director or officer (or employee responsible for Tax matters) of American Liberty expects any authority to assess any additional Taxes for any period for which Tax Returns have been filed. There is no dispute, claim, notice or inquiry concerning any Tax liability of American Liberty or its Subsidiaries either claimed or raised by any authority in writing or as to which any of the directors and officers (and employees responsible for Tax matters) of American Liberty has Knowledge based upon personal contact with any agent of such authority. There are no material matters under discussion between American Liberty or its Subsidiaries and any governmental authority regarding claims for additional Taxes or assessments with reference to American Liberty or its Subsidiaries or the business or property of American Liberty or its Subsidiaries.

 

(d) Section 4.11(d) of the American Liberty Disclosure Schedule lists all federal, state, local, and foreign Tax Returns filed with respect to American Liberty for taxable periods ended on or after October 31, 2012, indicates those Tax Returns that have been audited, and indicates those Tax Returns that currently are the subject of audit. American Liberty has delivered to Avant correct and complete copies of all federal Tax Returns, examination reports, and statements of deficiencies assessed against, or agreed to by American Liberty or its Subsidiaries since October 31, 2012. American Liberty has not waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency.

 

(e) American Liberty has not filed consent under Code Section 341(f) concerning collapsible corporations. American Liberty has not made any material payments, is not obligated to make any material payments, or is a party to any agreement that under certain circumstances could obligate it to make any material payments that will not be deductible under Code Section 280G. American Liberty has not been a United States real property holding corporation within the meaning of Code Section 897(c)(2) during the applicable period specified in Code Section 897(c)(1)(A)(ii). American Liberty has disclosed on its federal income Tax Returns all positions taken therein that could give rise to a substantial understatement of federal income Tax within the meaning of Code Section 6662. American Liberty is not a party to any Tax allocation or sharing agreement. American Liberty (i) has not been a member of an Affiliated Group filing a consolidated federal Tax Return or (ii) has any liability for the Taxes of any Person (other than of American Liberty or any of its Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local, or foreign law), as a transferee or successor, by contract, or otherwise.

 

(f) Section 4.11(f) of the American Liberty Disclosure Schedule sets forth estimates of the following information with respect to American Liberty (or, in the case of clause (B) below, with respect to each of the Subsidiaries) as of the most recent practicable date: (A) the basis of American Liberty or Subsidiary in its assets; (B) the basis of the stockholder(s) of the Subsidiary in its stock; (C) the amount of any net operating loss, net capital loss, unused investment or other credit, unused foreign tax, or excess charitable contribution allocable to American Liberty or Subsidiary; and (D) the amount of any deferred gain or loss allocable to American Liberty or Subsidiary arising out of any Deferred Intercompany Transaction.

 

(g) The unpaid Taxes of American Liberty (i) did not, as of October 31, 2012, exceed by any material amount the reserve for Tax liability (rather than any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the face of the American Liberty Balance Sheet (rather than in any notes thereto) and (ii) will not exceed by any material amount that reserve as adjusted for operations and transactions through the Closing Date in accordance with the past custom and practice of American Liberty in filing their Tax Returns.

 

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Section 4.12. Real Property . Section 4.12 of the American Liberty Disclosure Schedule lists and describes briefly all real property leased or subleased to American Liberty. American Liberty has delivered to Avant correct and complete copies of the leases and subleases listed in Section 4.12 of the American Liberty Disclosure Schedule (as amended to date).

 

Section 4.13. Intellectual Property .

 

(a) The Intellectual Property of American Liberty does not interfere with, infringe upon, misappropriate, or violate any Intellectual Property rights of third parties, and none of the directors and officers of American Liberty has ever received any charge, complaint, claim, demand, or notice alleging any such interference, infringement, misappropriation, or violation (including any claim that American Liberty must license or refrain from using any Intellectual Property rights of any third party). No third party has interfered with, infringed upon, misappropriated, or violated any Intellectual Property rights of American Liberty.

 

(b) Section 4.13(b) of the American Liberty Disclosure Schedule identifies each license, sublicense, agreement, or permission granted by American Liberty or its Subsidiaries to any third party relating to Intellectual Property of American Liberty.

 

Section 4.14. Tangible Assets . The buildings, machinery, equipment, and other tangible assets that American Liberty own and lease are free from material defects (patent and latent), have been maintained in accordance with normal industry practice, and are in good operating condition and repair (subject to normal wear and tear), and is suitable for the purpose for which it presently is used .

 

Section 4.15. Contracts . Section 4.15 of the American Liberty Disclosure Schedule lists the following contracts and other agreements to which American Liberty is a party:

 

(a) any agreement (or group of related agreements) for the lease of personal property to or from any Person providing for lease payments in monthly excess of $5,000;

 

(b) any agreement (or group of related agreements) for the purchase or sale of raw materials, commodities, supplies, products, or other personal property, or for the furnishing or receipt of services, the performance of which will extend over a period of more than one year or involve consideration in excess of $5,000;

 

(c) any agreement concerning a partnership or joint venture;

 

(d) any agreement (or group of related agreements) under which it has created, incurred, assumed, or guaranteed any indebtedness for borrowed money, or any capitalized lease obligation, in excess of $5,000 or under which it has imposed a Security Interest on any of its assets, tangible or intangible;

 

(e) any agreement concerning confidentiality or noncompetition;

 

(f) any agreement, contract or understanding (including any agreement, contract or understanding evidencing any outstanding indebtedness or other similar obligations to American Liberty or its Subsidiaries) with any director, officer, Affiliate or “ associate ” (as such term is defined in Rule 12b-2 under the Securities Exchange Act) of American Liberty or its Subsidiaries;

 

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(g) any profit sharing, stock option, stock purchase, stock appreciation, deferred compensation, severance, or other material plan or arrangement for the benefit of its current or former directors, officers, and employees;

 

(h) any collective bargaining agreement;

 

(i) any agreement for the employment of any individual on a full-time, part-time, consulting, or other basis;

 

(j) any agreement under which it has advanced or loaned any amount to any of its directors, officers, and employees outside the Ordinary Course of Business;

 

(k) any agreement under which the consequences of a default or termination could have a material adverse effect on the business, financial condition, operations, results of operations, or future prospects of American Liberty; or

 

(l) any other agreement (or group of related agreements) the performance of which involves consideration in excess of $5,000.

 

American Liberty has delivered to Avant a correct and complete copy of each written agreement listed in Section 4.15 of the American Liberty Disclosure Schedule (as amended to date) and a written summary setting forth the material terms and conditions of each oral agreement referred to in Section 4.20 of the American Liberty Disclosure Schedule. With respect to each such agreement: (i) the agreement is legal, valid, binding, enforceable, and in full force and effect in all material respects; (ii) the agreement will continue to be legal, valid, binding, enforceable, and in full force and effect on identical terms following the consummation of the transactions contemplated hereby; (iii) no party is in breach or default, and no event has occurred which with notice or lapse of time would constitute a breach or default, or permit termination, modification, or acceleration, under the agreement; and (iv) no party has repudiated any provision of the agreement.

 

Section 4.16. Notes and Accounts Receivable . All notes and accounts receivable of American Liberty listed on Section 4.21 of the American Liberty Disclosure Schedule are reflected properly on their books and records, are valid receivables subject to no setoffs or counterclaims, are current and collectible, and will be collected in accordance with their terms at their recorded amounts, subject only to the reserve for bad debts set forth on the face of the American Liberty Balance Sheet (rather than in any notes thereto) as adjusted for operations and transactions in the Ordinary Course of Business through the Closing Date. With respect to the accounts receivable listed on Section 4.16 of the American Liberty Disclosure Schedule, no chargeback allowance or cooperative advertising allowance or related liability exists that is not fully and accurately reflected in such accounts receivable.

 

Section 4.17. Intentionally Omitted .

 

Section 4.18. Insurance . Section 4.18 of the American Liberty Disclosure Schedule sets forth the following information with respect to each insurance policy (including policies providing property, casualty, liability, and workers’ compensation coverage and bond and surety arrangements) with respect to which American Liberty has been a party, a named insured, or otherwise the beneficiary of coverage at any time within the past 3 years:

 

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(a) the name, address, and telephone number of the agent;

 

(b) the name of the insurer, the name of the policyholder, and the name of each covered insured;

 

(c) the policy number and the period of coverage;

 

(d) the scope (including an indication of whether the coverage is on a claims made, occurrence, or other basis) and amount (including a description of how deductibles and ceilings are calculated and operate) of coverage; and

 

(e) a description of any retroactive premium adjustments or other loss- sharing arrangements.

 

With respect to each such insurance policy: (i) the policy is legal, valid, binding, enforceable, and in full force and effect; (ii) the policy will continue to be legal, valid, binding, enforceable, and in full force and effect on identical terms following the consummation of the transactions contemplated hereby; (iii) neither American Liberty nor any other party to the policy is in breach or default (including with respect to the payment of premiums or the giving of notices), and no event has occurred which, with notice or the lapse of time, would constitute such a breach or default, or permit termination, modification, or acceleration, under the policy; and (iv) no party to the policy has repudiated any provision thereof. American Liberty has been covered during the past 3 years by insurance in scope and amount customary and reasonable for the businesses in which it has engaged during the aforementioned period. Section 4.18 of the American Liberty Disclosure Schedule describes any material self-insurance arrangements affecting American Liberty.

 

Section 4.19. Litigation . Section 4.19 of the American Liberty Disclosure Schedule sets forth each instance in which American Liberty (a) is subject to any outstanding injunction, judgment, order, decree, ruling, or charge or (b) is a party or, to its Knowledge, is Threatened to be made a party to any action, suit, proceeding, hearing, or investigation of, in, or before any court or quasi-judicial or administrative agency of any federal, state, local, or foreign jurisdiction or before any arbitrator. None of the actions, suits, proceedings, hearings, and investigations set forth in Section 4.19 of the American Liberty Disclosure Schedule could result in any adverse change in the business, financial condition, operations, results of operations, or future prospects of American Liberty. American Liberty and the directors and officers (and employees with responsibility for litigation matters) of American Liberty have any reason to believe that any such action, suit, proceeding, hearing, or investigation may be brought or Threatened against American Liberty.

 

Section 4.20. Employees . American Liberty has no employees, except as provided for by the agreements entered into with American Liberty’s CEO and CFO.

 

Section 4.21. Employee Benefits .

 

(a) American Liberty does not maintain or contribute, or has ever maintained or contributed to any Employee Benefit Plan.

 

(b) None of American Liberty, its Subsidiaries and the other stockholders of the Controlled Group of Corporations that includes American Liberty contributes to, ever has contributed to, or ever has been required to contribute to any Multiemployer Plan or has any liability (whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due), including any withdrawal liability, under any Multiemployer Plan.

 

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(c) American Liberty does not maintain or ever has maintained or contributes, ever has contributed, or ever has been required to contribute to any Employee Welfare Benefit Plan providing medical, health, or life insurance or other welfare-type benefits for current or future retired or terminated employees, their spouses, or their dependents (other than in accordance with Code Section 4980B).

 

(d) No former employee, officer or director of American Liberty has any outstanding agreement, contract or understanding that provides for bonus payments.

 

ARTICLE 5

 

PRE-CLOSING COVENANTS

 

The Parties agree as follows with respect to the period between the execution of this Reorganization Agreement and the Closing.

 

Section 5.01. General . Each of the Parties will use his, her or its reasonable Best Efforts to take all actions and to do all things necessary, proper, or advisable in order to consummate and make effective the transactions contemplated by this Reorganization Agreement (including satisfaction, but not waiver, of the closing conditions set forth in Article 7).

 

Section 5.02. Notices and Consents . Avant shall give any notices to third parties, and Avant shall use its Best Efforts to obtain any third party consents, that Avant and reasonably may request in connection with the matters referred to in Section 4.03. Each of the Parties will give any notices to, make any filings with, and use its reasonable Best Efforts to obtain any authorizations, consents, and approvals of governments and governmental agencies in connection with the matters referred to in Section 4.03.

 

Section 5.03. Operation of Business . Each of (i) Avant, and (ii) Avant and, shall not engage in any practice, take any action, or enter into any transaction outside the Ordinary Course of Business. Without limiting the generality of the foregoing, Avant and American Liberty shall not (a) declare, set aside, or pay any dividend or make any distribution with respect to any equity interest or redeem, purchase, or otherwise acquire any of capital stock, (b) become a party to any agreement of the type referred to in Section 4.21 (only with respect to Avant), or (c) otherwise engage in any practice, take any action, or enter into any transaction of the sort described in Section 5.07.

 

Section 5.04. Preservation of Business . Avant shall keep its business and properties substantially intact, including its present operations, physical facilities, working conditions, and relationships with lessors, licensors, suppliers, customers, and employees.

 

Section 5.05. Full Access . Avant shall permit representatives of American Liberty to have full access at all reasonable times, and in a manner so as not to interfere with the normal business operations of American Liberty, to all premises, properties, Personnel, books, records (including Tax records), contracts, and documents of or pertaining to American Liberty.

 

Section 5.06. Notice of Developments . Avant and American Liberty will give prompt written notice to the other party of any adverse development causing a breach of any of the representations and warranties in Article 3 or 4, respectively. No disclosure by any Party pursuant to this Section 5.06, however, shall be deemed to amend or supplement the Avant Disclosure Schedule or the American Liberty Disclosure Schedule, as applicable, or to prevent or cure any misrepresentation, breach of warranty, or breach of covenant.

 

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Avant Stockholders agree, that until such time, if any, as this Reorganization Agreement is terminated pursuant to Section 8, it shall not, directly or indirectly or shall it authorize or permit any Avant Stockholder, agent of, or any investment banker, attorney, accountant or other advisor or representative of Avant Stockholders to, directly or indirectly through another Person, solicit, initiate, encourage, induce or facilitate the making, submission or announcement of any Acquisition Proposal, or participate in any discussions or negotiations regarding, or furnish to any Person any information with respect to, or take any other action to facilitate any inquiries or the making of any proposal that constitutes, or would reasonably be expected to lead to, any Acquisition Proposal, or approve, endorse or recommend any Acquisition Proposal, or enter into any letter of intent, agreement in principle, acquisition agreement or other document or contract contemplating or otherwise relating to an Acquisition Proposal.

 

For purposes of this Section 5.07, “ Acquisition Proposal ” means any offer or proposal for (whether or not in writing and whether or not delivered to the stockholders of American Liberty generally), from any Person relating to any issuance or transfer of capital stock of American Liberty that, upon issuance or transfer thereof, will represent, directly or indirectly, a voting majority of the outstanding shares of American Liberty capital stock other than the transactions contemplated by this Reorganization Agreement.

 

Section 5.07. Filing of Current Report on Form 8-K . Promptly after execution of this Reorganization Agreement, American Liberty shall file a Current Report on Form 8-K with the SEC to report the execution of this Reorganization Agreement.

 

Section 5.08. Section 16(b) Board Approval . Prior to Closing, the board of directors of American Liberty shall, by resolution duly adopted by such board of directors or a duly authorized committee of “ non-employee directors ” thereof, approve and adopt, for purposes of exemption from “ short-swing ” liability under Section 16(b) of the Exchange Act, the acquisition of American Liberty Common Stock at the Effective Time by management of Avant who become, prior to, at, or following the Effective Time of the Merger, management of American Liberty as a result of the exchange of Avant Common Stock in the Merger. Such resolution shall set forth the name of the applicable “ insiders ” for purposes of Section 16 of the Exchange Act, the number of securities to be acquired by each individual that the approval is being granted to exempt the transaction under Rule 16b-3 under the Exchange Act.

 

Section 5.09. [INTENTIONALLY OMITTED].

 

Section 5.10. Change of Name and Trading Symbol . At the Effective Time of the last to occur of the Merger, or as soon thereafter as practicable, and in compliance with the applicable rules and regulations of FINRA, the SEC and the Nevada Revised Statutes, management of American Liberty will use its Best Efforts to change the name of American Liberty to Avant Diagnostics, Inc., or another name selected by the present management of Avant. American Liberty will request FINRA to not change the trading symbol of American Liberty to another symbol that is unique to the new corporate name of American Liberty.

 

Section 5.11. Information Statement . Promptly after execution of this Reorganization Agreement, American Liberty, with the cooperation and assistance of Avant and its counsel, will prepare and distribute to the holders of American Liberty Common Stock the Information Statement required pursuant to Rule 14f-1 under Regulation 14E of the Exchange Act, describing the Reorganization Agreement provision for a change to the board of directors of American Liberty. The record date for the American Liberty Shareholders entitled to notice of the actions described in the Information Statement shall be the date of mailing the Information Statement.

 

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At or about the same time, American Liberty, with the cooperation and assistance of Avant and its counsel, will also prepare and distribute to the holders of American Liberty Common Stock the Information Statement required by Regulation 14C pursuant to Section 14c of the Exchange Act.

 

Section 5.12. Confidentiality .

 

(a) American Liberty and its shareholders agree that, until the Effective Time:

 

(1) American Liberty will treat and hold as such all of the Avant Confidential Information, refrain from using any of the Avant Confidential Information except in connection with this Reorganization Agreement, and in the event this Reorganization Agreement is terminated as provided in Article 8, deliver promptly to Avant or destroy, at the request and option of Avant, all tangible embodiments (and all copies) of the Avant Confidential Information, including in electric or magnetic form, which are in his, her or its possession;

 

(2) in the event that American Liberty is requested or required (by oral question or request for information or documents in any legal proceeding, interrogatory, subpoena, civil investigative demand, or similar process) to disclose any Avant Confidential Information, that American Liberty will notify Avant promptly of the request or requirement so that Avant may seek an appropriate protective order or waive compliance with the provisions of this Section 5.13(a); and

 

(3) if, in the absence of a protective order or the receipt of a waiver hereunder, any of American Liberty or its Subsidiary is, on the advice of counsel, compelled to disclose any Avant Confidential Information to any tribunal or else stand liable for contempt, that American Liberty may disclose the Avant Confidential Information to the tribunal; provided, however, that the disclosing party shall use his, her or its reasonable Best Efforts to obtain, at the reasonable request of Avant, an order or other assurance that confidential treatment will be accorded to such portion of the Avant Confidential Information required to be disclosed as Avant shall designate.

 

(b) Avant Stockholders agree that, until the Effective Time:

 

(1) Avant Stockholders will treat and hold as such all of the American Liberty Confidential Information, refrain from using any of the American Liberty Confidential Information except in connection with this Reorganization Agreement, and in the event this Reorganization Agreement is terminated as provided in Article 8, deliver promptly to American Liberty or destroy, at the request and option of American Liberty, all tangible embodiments (and all copies) of the American Liberty Confidential Information, including in electric or magnetic form, which are in his, her or its possession;

 

(2) in the event that Avant Stockholders is requested or required (by oral question or request for information or documents in any legal proceeding, interrogatory, subpoena, civil investigative demand, or similar process) to disclose any American Liberty Confidential Information, that Avant Stockholders will notify American Liberty promptly of the request or requirement so that American Liberty may seek an appropriate protective order or waive compliance with the provisions of this Section 5.13(b); and

 

(3) if, in the absence of a protective order or the receipt of a waiver hereunder, Avant Stockholders is, on the advice of counsel, compelled to disclose any American Liberty Confidential Information to any tribunal or else stand liable for contempt, Avant Stockholders may disclose the American Liberty Confidential Information to the tribunal; provided, however, that the disclosing party shall use his, her or its reasonable Best Efforts to obtain, at the reasonable request of American Liberty, an order or other assurance that confidential treatment will be accorded to such portion of the American Liberty Confidential Information required to be disclosed as American Liberty shall designate.

 

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ARTICLE 6

 

CLOSING COVENANTS

 

The Parties agree as follows with respect to the Closing.

 

Section 6.01. General . In case at any time after the Closing any further action is necessary to carry out the purposes of this Reorganization Agreement, each of the Parties will take such further actions (including the execution and delivery of such further instruments and documents) as any other Party reasonably may request, all at the sole cost and expense of the requesting Party.

 

Section 6.02. [INTENTIONALLY OMITTED].

 

Section 6.03. Application to Standard & Poor’s. New management of American Liberty shall promptly make application to the Standard & Poor’s editorial board to approve American Liberty for a full description in Standard & Poor’s Standard Corporation Manual, Standard & Poor’s Daily News Section, coverage of American Liberty as part of the S&P Market Access Program and coverage on Standard & Poor’s Internet Site, www.advisorinsight.com, as well as S&P Marketscope and the S&P Stock Guide database.

 

Section 6.04. Filing of Amended Form 8-K. Within 71 days after the original report on Form 8-K must be filed, new management of American Liberty will prepare and file with the SEC an amendment to the Form 8-K described in Section 5.08 above that includes the financial statements and pro forma financial information prepared pursuant to Regulation S-X for the periods specified in Rule 3.05(b).

 

Section 6.05. [INTENTIONALLY OMITTED] .

 

Section 6.06. Intended Federal Income Tax Consequences. This Reorganization Agreement is intended to constitute a “plan of reorganization” within the meaning of Section 368(a)(2)(E) of the Code. From and after the date of this Reorganization Agreement and until the Effective Time, each party shall use its reasonable Best Efforts to cause the Exchange to qualify, and will not knowingly take any action, cause any action to be taken, fail to take any action or cause any action to fail to be taken which action or failure to act could prevent the Exchange from qualifying, as a reorganization under the provisions of Section 368(a) of the Code. Following the Effective Time, neither American Liberty nor any of its affiliates shall knowingly take any action, cause any action to be taken, fail to take any action or cause any action to fail to be taken, which action or failure to act could cause the Exchange to fail to qualify as reorganization under section 368(a) of the Code.

 

Section 6.07. Board of Directors of American Liberty . At the Effective Time, the present directors of American Liberty shall have caused the appointment of the Persons designated by Avant and to the board of directors of Avant

 

Section 6.08. Public Announcements . Subject to the exceptions described in Section 9.01, the initial press release relating to this Reorganization Agreement shall be a joint press release the text of which has been agreed to by each of Avant and American Liberty.

 

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Section 6.09. Conveyance Taxes . American Liberty shall be liable for and shall hold Avant and the holders of Avant Common Stock who are holders of Avant Common Stock immediately prior to the Effective Time harmless against any real property transfer or gains, sales, use, transfer, value added, stock transfer or stamp taxes, any transfer, recording registration, and other fees, and any similar Taxes which become payable in connection with the transactions contemplated by this Reorganization Agreement. The parties acknowledge that this Section 6.09 is specifically intended to benefit the Avant Stockholders immediately prior to the Effective Time.

 

ARTICLE 7

 

CONDITIONS TO OBLIGATION TO CLOSE

 

Section 7.01. Conditions to Obligation of Avant The obligation of Avant and to consummate the transactions to be performed by it in connection with the Closing is subject to satisfaction of the following conditions:

 

(a) the representations and warranties set forth in Article 4 shall be true and correct in all material respects at and as of the Closing Date;

 

(b) Avant shall have performed and complied with all of their Pre Closing Covenants described herein, including the covenants set forth in Article 5;

 

(c) Avant shall have procured all of the material third party consents specified in Section 5.02;

 

(d) no action, suit, or proceeding shall be pending or Threatened before any court or quasi-judicial or administrative agency of any federal, state, local, or foreign jurisdiction or before any arbitrator wherein an unfavorable injunction, judgment, order, decree, ruling, or charge would (i) prevent consummation of any of the transactions contemplated by this Reorganization Agreement, (ii) cause any of the transactions contemplated by this Reorganization Agreement to be rescinded following consummation, (iii) affect adversely the right of the Avant Stockholders to own American Liberty Common Stock and to control American Liberty, or (iv) affect materially and adversely the right of American Liberty to own its assets and to operate its businesses (and no such injunction, judgment, order, decree, ruling, or charge shall be in effect);

 

(e) American Liberty shall have delivered to Avant a certificate, substantially in the form of Exhibit B, to the effect that each of the conditions specified above in Section 7.01(a)-(d) is satisfied in all respects;

 

(f) American Liberty shall have received all other material authorizations, consents, and approvals of governments and governmental agencies referred to in Section 4.03;

 

(g) Avant shall have received from counsel to American Liberty and Merger Sub an opinion, substantially in the form of Exhibit E hereto, addressed to Avant and dated as of the Closing Date;

 

(h) at least ten (10) days prior to the Closing Date, American Liberty has mailed to its stockholders the Information Statement described in Section 5.12;

 

(i) At Closing, Avant shall have received from American Liberty:

 

(1) a copy of the articles of incorporation of American Liberty as in effect immediately prior to the Effective Time certified as of a recent date by the secretary of American Liberty;

 

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(2) certificates, as of the most recent practicable dates, as to the corporate good standing of American Liberty issued by the Secretary of State of the State of Nevada and any other state in which American Liberty is required to be qualified or licensed to transact business, confirming such good standing on or immediately prior to the Closing Date;

 

(3) a copy of the by-laws of American Liberty in effect on the Closing Date certified by the secretary of American Liberty as of the Closing Date;

 

(4) resolutions of the board of directors of American Liberty and Merger Sub authorizing and approving all matters in connection with this Reorganization Agreement (including matters set forth in Section 5.08) and the transactions contemplated hereby, certified by the secretary of American Liberty as of the Closing Date;

 

(5) stock certificates representing the American Liberty Common Stock issuable pursuant to Article 2 upon presentation of the Avant Common Stock and Transmittal Letter;

 

(6) such other documents as Avant may reasonably request;

 

(j) all actions to be taken by American Liberty in connection with consummation of the transactions contemplated hereby and all certificates, opinions, instruments, and other documents required to effect the transactions contemplated hereby will be reasonably satisfactory in form and substance to Avant.

 

Avant may waive any condition specified in this Section 7.01 if it executes a writing so stating at or prior to the Closing.

 

Section 7.02 Conditions to Obligation of American Liberty . The obligation of American Liberty to consummate the transactions to be performed by it in connection with the Closing is subject to satisfaction of the following conditions:

 

(a) the representations and warranties set forth in Article 3 shall be true and correct in all material respects at and as of the Closing Date;

 

(b) Avant shall have performed and complied with all of its covenants hereunder in all material respects through the Closing;

 

(c) no action, suit, or proceeding shall be pending before any court or quasi-judicial or administrative agency of any federal, state, local, or foreign jurisdiction or before any arbitrator wherein an unfavorable injunction, judgment, order, decree, ruling, or charge would (i) prevent consummation of any of the transactions contemplated by this Reorganization Agreement or (ii) cause any of the transactions contemplated by this Reorganization Agreement to be rescinded following consummation (and no such injunction, judgment, order, decree, ruling, or charge shall be in effect);

 

(d) Avant shall have delivered to American Liberty a certificate, substantially in the form of Exhibit C, to the effect that each of the conditions specified above in Section 7.02(a)-(c) is satisfied in all respects;

 

(e) the Parties and American Liberty shall have received all other material authorizations, consents, and approvals of governments and governmental agencies referred to in Section 4.03;

 

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(f) all actions to be taken by Avant in connection with consummation of the transactions contemplated hereby and all certificates, opinions, instruments, and other documents required to effect the transactions contemplated hereby will be reasonably satisfactory in form and substance to American Liberty.

 

(g) American Liberty shall have received from counsel to Avant an opinion, substantially in the form of Exhibit F hereto, addressed to American Liberty and dated as of the Closing Date;

 

(h) At Closing, American Liberty shall have received from Avant:

 

(1) a certified copy of the organizational documents of Avant as in effect immediately prior to the Effective Time certified as of a recent date by the secretary of Avant;

 

(2) certificates, as of the most recent practicable dates, as to the existence and good standing of Avant issued by the Secretary of State of the State of Nevada and any other state in which Avant is required to be qualified or licensed to transact business, confirming such good standing on or immediately prior to the Closing Date;

 

(3) a copy of the articles of incorporation of Avant in effect on the Closing Date certified by a duly authorized officer of Avant as of the Closing Date;

 

(4) resolutions of Avant, authorizing and approving all matters in connection with this Reorganization Agreement and the transactions contemplated hereby, certified by the secretary of Avant as of the Closing Date;

 

(5) the Avant Common Stock pursuant to Section 2.06;

 

(6) a Transmittal Letter for each Certificate; and

 

(7) such other documents as American Liberty may reasonably request;

 

(i) The period of time in which the Avant Stockholders may perfect appraisal rights, if any, with respect to the Merger shall have expired, and Dissenting Avant Stockholders shall constitute not more than 2% of the Avant Common Stock outstanding immediately prior to the Effective Time.

 

American Liberty may waive any condition specified in this Section 7.02 if it executes a writing so stating at or prior to the Closing.

 

ARTICLE 8

 

TERMINATION

 

Section 8.01. Termination . This Reorganization Agreement may be terminated at any time prior to the Effective Time (with respect to Sections 8.01(b) through 8.01(e) by written notice by the terminating party to the other party).

 

(a) by mutual written consent of American Liberty and Avant;

 

(b) by either American Liberty or Avant if the Merger shall not have been consummated by the thirtieth day after the date of this Reorganization Agreement (such date as it may be extended in accordance with this Section 8.01(b), the “ Outside Date ”), which date may be extended by mutual written consent of American Liberty, Merger Sub and Avant provided that all conditions to the Closing of the Merger set forth in Article 7 shall have been satisfied, other than those that by their nature can be satisfied only at Closing; provided that the right to terminate this Reorganization Agreement under this Section 8.01(b) shall not be available to any party whose material breach of this Reorganization Agreement has been a principal cause of or resulted in the failure of the Merger to occur on or before the Outside Date;

 

31
 

 

(c) by either American Liberty or Avant if a Governmental Body of competent jurisdiction shall have enacted a Legal Requirement or issued a nonappealable final order, decree, regulation or ruling or taken any other nonappealable final action, in each case having the effect of permanently restraining, enjoining or otherwise prohibiting the Merger;

 

(d) by American Liberty, following a breach of or failure to perform any representation, warranty, covenant or agreement on the part of Avant set forth in this Reorganization Agreement, which breach or failure to perform (i) would cause any of the conditions set forth in Section 7.02 not to be satisfied, and (ii) if curable, shall not have been cured prior to the earlier of five (5) days following receipt by Avant of written notice from American Liberty of such breach or failure to perform on the Outside Date;

 

(e) by Avant, if there has been a breach of or failure to perform any representation, warranty, covenant or agreement on the part of American Liberty or Merger Sub set forth in this Reorganization Agreement, which breach or failure to perform (i) would cause any of the conditions set forth in Section 7.01 not to be satisfied, and (ii) if curable, shall not have been cured prior to the earlier of twenty (20) days following receipt by American Liberty of written notice from Avant of such breach or failure to perform from Avant or the Outside Date; or

 

Section 8.02. Effect of Termination . In the event of termination of this Reorganization Agreement as provided in Section 8.01, this Reorganization Agreement shall immediately become void and there shall be no liability or obligation on the part of American Liberty, Avant, Merger Sub or their respective officers, directors, partners, stockholders or affiliates; provided that (i) any such termination shall not relieve any party from liability for any breach of this Reorganization Agreement, fraud or knowing misrepresentation and (ii) the provisions of Section 5.13 (Confidentiality), Section 8.02 (Effect of Termination), Section 8.03 (Fees and Expenses) and Article 9 (Miscellaneous) (to the extent applicable to such surviving sections) of this Reorganization Agreement and the Confidentiality Agreements shall remain in full force and effect and survive any termination of this Reorganization Agreement.

 

Section 8.03. Fees and Expenses . Except as set forth in this Section, all fees and expenses incurred in connection with this Reorganization Agreement and the transactions contemplated hereby shall be paid by the party incurring such fees and expenses, whether or not the Merger are consummated; provided, however, that American Liberty shall pay all fees and expenses, including accountants’ and attorneys’ fees, incurred with respect to the printing, filing and mailing of the Information Statement (including any related preliminary materials) and any amendments or supplements thereto.

 

ARTICLE 9

 

MISCELLANEOUS

 

Section 9.01. Press Releases and Public Announcements . No Party shall issue any press release or make any public announcement relating to the subject matter of this Reorganization Agreement prior to the Closing without the prior approval of American Liberty and Avant, provided, however, that any Party may make any public disclosure it believes in good faith is required by applicable law or any listing or trading agreement concerning its publicly-traded securities (in which case the disclosing Party will use its reasonable Best Efforts to advise the other Parties prior to making the disclosure).

 

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Section 9.02. No Third Party Beneficiaries . This Reorganization Agreement shall not confer any rights or remedies upon any Person other than the Parties and their respective successors and permitted assigns.

 

Section 9.03. Entire Agreement . This Reorganization Agreement (including the documents referred to herein) constitutes the entire agreement among the Parties and supersedes any prior understandings, agreements, or representations by or among the Parties, written or oral, to the extent they relate in any way to the subject matter hereof, except for any Confidentiality Agreement by and between American Liberty and Avant.

 

Section 9.04. Succession and Assignment . This Reorganization Agreement shall be binding upon and inure to the benefit of the Parties named herein and their respective successors and permitted assigns. No Party may assign either this Reorganization Agreement or any of his, her or its rights, interests, or obligations hereunder without the prior written approval of American Liberty and Avant.

 

Section 9.05. Counterparts . This Reorganization Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument.

 

Section 9.06. Headings . The section headings contained in this Reorganization Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Reorganization Agreement.

 

Section 9.07. Notices . All notices, requests, demands, claims, and other communications hereunder will be in writing. Any notice, request, demand, claim, or other communication hereunder shall be deemed duly given if (and then two business days after) it is sent by (a) confirmed facsimile; (b) overnight delivery; or (c) registered or certified mail, return receipt requested, postage prepaid, and addressed to the intended recipient as set forth below:

 

if to American Liberty and Merger Sub:

 

American Liberty Petroleum Corp.

 

11251 Richmond Avenue, Suite F101,

 

Houston, Texas 77082

 

Attn: Robert C. Rhodes, Chairman & CEO  

 

Telephone: (281) 435 - 3917

 

Email: robert.rhodes@rhodes-holdings.com

 

 

33
 

 

with a copy to (which shall not constitute notice to American Liberty) :

 

Joel Pensley, Esq.

 

201 East 66th street, Suite 3M

 

New York, New York 10065

 

Telephone: (917) 302-6505

 

Facsimile: (212) 898-1266

 

Email: joel@pensley.com

 

if to Avant:

 

Avant Diagnostics, Inc.

 

8561 East Anderson Drive, Suite 104

 

Scottsdale, Arizona 85225

 

Attn: Steven Scott, Chief Executive Officer

 

Telephone: (480) 478-6660

 

Facsimile: (480) 414-5566

 

Email: sscott@issuerscap.com

 

with a copy to (which shall not constitute notice to Avant) :

 

Sonfield & Sonfield

 

2500 Wilcrest Drive, Suite 300

 

Houston, Texas 77042

 

Attn: Robert L. Sonfield, Jr., Esq.

 

Telephone: (713) 877-8333

 

Facsimile: (713) 877-1547

 

Email: Robert@sonfield.com

 

Any Party may send any notice, request, demand, claim, or other communication hereunder to the intended recipient at the address set forth above using any other means (including personal delivery, expedited courier, messenger service, telecopy, telex, ordinary mail, or electronic mail), but no such notice, request, demand, claim, or other communication shall be deemed to have been duly given unless and until it actually is received by the intended recipient. Any Party may change the address to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving the other Parties notice in the manner herein set forth.

 

34
 

 

Section 9.08. Governing Law . This Reorganization Agreement shall be governed by and construed in accordance with the domestic laws of the State of Texas without giving effect to any choice or conflict of law provision or rule (whether of the State of Texas or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Texas.

 

Section 9.09. Amendments and Waivers . No amendment of any provision of this Reorganization Agreement shall be valid unless the same shall be in writing and signed by Avant and American Liberty. No waiver by any Party of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.

 

Section 9.10. Severability . Any term or provision of this Reorganization Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction.

 

Section 9.11. Expenses . Each of the Parties will bear his, her or its own costs and expenses (including legal fees and expenses) incurred in connection with this Reorganization Agreement and the transactions contemplated hereby.

 

Section 9.12. Construction . The Parties have participated jointly in the negotiation and drafting of this Reorganization Agreement. In the event an ambiguity or question of intent or interpretation arises, this Reorganization Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Reorganization Agreement. Any reference to any federal, state, local, or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. The word “ including ” shall mean including without limitation.

 

Section 9.13. Incorporation of Exhibits and Schedules . The Exhibits, Annexes, and Schedules identified in this Reorganization Agreement are incorporated herein by reference and made a part hereof.

 

Section 9.14. Specific Performance . Each of the Parties acknowledges and agrees that the other Parties would be damaged irreparably in the event any of the provisions of this Reorganization Agreement are not performed in accordance with their specific terms or otherwise are breached. Accordingly, each of the Parties agrees that the other Parties shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this Reorganization Agreement and to enforce specifically this Reorganization Agreement and the terms and provisions hereof in any action instituted in any court of the United States or any state thereof having jurisdiction over the Parties and the matter (subject to the provisions set forth in Section 9.15 below), in addition to any other remedy to which they may be entitled, at law or in equity.

 

Section 9.15. Submission to Jurisdiction . Each of the Parties submits to the jurisdiction of any state or federal court sitting in Houston, Texas, in any action or proceeding arising out of or relating to this Reorganization Agreement and agrees that all claims in respect of the action or proceeding may be heard and determined in any such court. Each Party also agrees not to bring any action or proceeding arising out of or relating to this Reorganization Agreement in any other court. Each of the Parties waives any defense of inconvenient forum to the maintenance of any action or proceeding so brought and waives any bond, surety, or other security that might be required of any other Party with respect thereto. Any Party may make service on any other Party by sending or delivering a copy of the process to the Party to be served at the address and in the manner provided for the giving of notices in Section 9.07 above. Each Party agrees that a final judgment in any action or proceeding so brought shall be conclusive and may be enforced by suit on the judgment or in any other manner provided by law or at equity.

 

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Section 9.16 Indemnification; Remedies .

 

(a) American Liberty will indemnify and hold harmless Avant, the Avant Stockholders, and their respective controlling Persons, and affiliates (collectively, the “ Avant Indemnified Persons ”) for, and will pay to the Indemnified Persons the amount of, any loss, liability, claim, damage (excluding incidental and consequential damages), expense (including costs of investigation and defense and reasonable attorneys' fees) or diminution of value, involving a third-party claim (collectively, “ Avant Damages ”), arising, directly from any breach of any representation or warranty made by American Liberty in this Reorganization Agreement, the Disclosure Schedule, the supplements to the Disclosure Schedule, or any other certificate or document delivered by American Liberty pursuant to this Reorganization Agreement.

 

(b) Avant will indemnify and hold harmless American Liberty, the American Liberty Stockholders, and their respective controlling Persons, and affiliates (collectively, the “ American Liberty Indemnified Parties ”) for, and will pay to the Indemnified Persons the amount of, any loss, liability, claim, damage (excluding incidental and consequential damages), expense (including costs of investigation and defense and reasonable attorneys' fees) or diminution of value, involving a third-party claim (collectively, “ American Liberty Damages ”), arising, directly from any breach of any representation or warranty made by American Liberty in this Reorganization Agreement, the Disclosure Schedule, the supplements to the Disclosure Schedule, or any other certificate or document delivered by American Liberty pursuant to this Reorganization Agreement.

 

(c) The right to indemnification, payment of Damages or other remedy based on such representations, warranties does not include any loss, liability, claim or damage that is the subject to any investigation conducted with respect to, or any Knowledge of any of the Indemnified Persons acquired (or capable of being acquired) at any time, whether before or after the execution and delivery of this Agreement or the Closing Date, with respect to the accuracy or inaccuracy of or compliance with, any such representation, warranty, covenant, or obligation. The waiver of any condition based on the accuracy of any representation or warranty, or on the performance of or compliance with any covenant or obligation, will not affect the right to indemnification, payment of Damages, or other remedy based on such representations, warranties, covenants, and obligations.

 

 

THE REMINDER OF THIS PAGE INTENTIONALLY LEFT BLANK

 

 

EXECUTION PAGE FOLLOWS

 

36
 

 

Execution Page

 

AGREEMENT AND PLAN OF REORGANIZATION

 

among

 

American Liberty Petroleum Corp.

 

(a Nevada corporation)

 

AVANT ACQUISITION CORP.

 

(a Nevada corporation)

 

AVANT DIAGNOSTICS, INC.

 

a Nevada corporation

 

and

 

THE STOCKHOLDERS OF AVANT DIAGNOSTICS, INC.

 

 

DATED AS OF DECEMBER 29, 2014

 

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

 

 

American Liberty Petroleum Corp.

 

a Nevada corporation

 

By: /S/ Robert C. Rhodes

Robert C. Rhodes, Chief Executive Officer

AVANT DIAGNOSTICS, INC.

 

A Nevada corporation

 

By: /S/ Steven Scott

Steven Scott, Chief Executive Officer

   
   

 

Avant Acquisition Corp.

 

 

a Nevada corporation

 
   

By: /S/ Robert C. Rhodes

Robert C. Rhodes, Chief Executive Officer

 

 

37

 

 

Exhibit 99.5

 

Press Release

 

American Liberty Petroleum Corp. agrees to acquire Avant Diagnostics, Inc.

 

Houston, Texas (Monday, December 29, 2014) – American Liberty Petroleum Corp. agreed to acquire Avant Diagnostics, Inc. (‘ Avant ’), a medical technology company developing specialized diagnostic tests, including the OvaDx® Ore-Symptomatic Ovarian Cancer Screening Test, signing the Agreement and Plan of Reorganization as of the close of business on Monday, December 29, 2014. The acquisition agreement comes after an in depth due diligence period, which included Avant Diagnostics, Inc. completing a PCAOB audit for its fiscal year ending September 31, 2014.

 

Acquiring a company such as Avant that has the ability to change lives is an important achievement for American Liberty Petroleum Corp. Avant has enough capital currently to start the next testing regimen that will allow the commercialization of OvaDx®, ” said Robert C. Rhodes, Chairman of American Liberty Petroleum Corp. The board of directors and a majority of shareholders of American Liberty Petroleum Corp. have authorized a number of corporate actions in order to complete required actions, including a reverse split, a name change, authorization of Preferred Stock, and filing the required SEC disclosure statements. Upon the effectiveness of these corporate actions, Gregg Linn, Avant’s CFO, will join the board of directors of the company and will be CEO and President.

 

“American Liberty Petroleum Corp. acquiring Avant opens up many opportunities for the commercialization of OvaDx® as well as other diagnostic tests. Our whole company is excited about our coming year,” said Gregg Linn, incoming CEO and President of American Liberty Petroleum Corp.

 

About American Liberty Petroleum Corp.

 

American Liberty Petroleum Corp. (‘OREO’, http://americanlibertypetroleum.com/) is a fully reporting, development stage publicly traded company seeking acquisitions in the Gulf Coast oil & gas services business segment. OREO’s current management team, Robert C. Rhodes (CEO) and Steven M. Plumb (CFO), are actively involved in the search for acquisitions.

 

About Avant Diagnostics Inc.

 

Avant Diagnostics, Inc. (‘Avant’, http://avantdiagnostics.com), soon to be a wholly owned subsidiary of American Liberty Petroleum Corp., is a medical technology company based on the completion of the human genome sequencing project. Avant is developing specialized tests that are cutting edge in medical diagnostic testing and the OvaDx® Pre-Symptomatic Ovarian Cancer Screening Test is a leading breakthrough in commercializing these tests.

 

Genetic research is increasingly focused on identifying the variations of the specific genes in the genome. These variations are what define individual characteristics, including disease states or a statistical propensity for disease. The implications are far-reaching and impact not only the research community, but also the individual patients and the medical providers. Diagnostic tests that detect diseases very early in their progression will provide options for earlier treatments that may improve the patient’s quality of life and prognosis by delaying or preventing disease progression or even death. Medical providers will incur major cost savings by avoiding costly late stage disease treatments.

 

 
 

 

Safe Harbor

 

The statements in this press release that relate to American Liberty Petroleum Corp.’s expectations with regard to the future impact on American Liberty Petroleum Corp.'s results from new products and services in development, including any planned acquisitions, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The results anticipated by any or all of these forward-looking statements might not occur. American Liberty Petroleum Corp. undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof, or to reflect the occurrence of unanticipated events or changes in American Liberty Petroleum Corp.'s plans or expectations.

 

Investor Contact

Robert C. Rhodes
American Liberty Petroleum Corp.
investors@americanlibertypetroleum.com

 

Gregg Linn
Avant Diagnostics, Inc.
investors@avantdiagnostics.com