UNITED STATES 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): June 30, 2014
INDIE GROWERS ASSOCIATION
(Exact name of registrant as specified in its charter)
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NEVADA
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333-139482
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98-0492900
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(State or Other Jurisdiction
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(Commission File
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(I.R.S. Employer
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of Incorporation)
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Number)
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Identification Number)
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311 Division St
Carson City NV 89703
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(Address of principal executive offices)
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1 (888) 648 0488
(Registrant's telephone number, including area code)
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 (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] 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
Acquisition of Interest in River Ridge Sunshine Farms LLC
On June 30, 2014 Indie Growers Association completed its due diligence and closed the transaction with Ricardo Esparza for the acquisition of River Ridge Sunshine Farms LLC. Under the terms of the agreement, Esparza transferred his 100% ownership in River Ridge Sunshine Farms LLC in exchange for 62,000,000 restricted shares of the common stock of Indie Growers Association.
River Ridge Sunshine Farms LLC holds a 10 year renewable lease on an agricultural property in Prosser, Washington. Currently construction is underway on approximately 1,412 square feet of warehouse space, 1,536 square feet of greenhouses, and twenty-one thousand square feet of outdoor growing area. The property is subleased to Cannabliss Organic Gardens, a licensed medical marijuana grower who expects to be approved for its Tier 3 license in time for the summer/fall outdoor growing season. Under the terms of the sublease, River Ridge Sunshine Farms LLC will receive sufficient rental income to expand construction onto adjacent properties. River Ridge Sunshine Farms LLC intends to sublease these adjacent properties to other Tier 3 licensees.
Item 9.01 Exhibits
Sublease Agreement dated June 27, 2014
Share Exchang Agreement dated June 30, 2014
SIGNATURES
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.
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INDIE GROWERS ASSOCIATION
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Date: Jun 30, 2014
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/s ROBERT COLERIDGE
______________________________
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SUBLEASE AGREEMENT
THIS SUBLEASE AGREEMENT (“Lease,” “Agreement,” “Lease Agreement,” “Sublease” or “Sublease Agreement”) is entered into and effective as of July 1, 2014 (“Effective Date”), and is between River Ridge Sunshine Farms LLC, a Washington State limited liability company, (“Landlord”) and Cannabliss Organic Gardens, a Washington State partnership (“Tenant”) (together, “Parties”).
This Lease Agreement constitutes the entire agreement between the Parties concerning the lease of the real estate located at 22604 Hosko Road, Prosser, Washington, as further described below, and supersedes all previous understandings and agreements between the parties, whether oral or written, and shall not be amended, altered, or changed except by a further writing signed by the Parties.
Recitals
1. Landlord has the legal right to enter into this Lease Agreement.
2. Tenant desires to enter in this Lease Agreement by which Tenant leases the parcel of real estate described at Exhibit A from Landlord.
To implement the purposes stated in the foregoing Recitals and in consideration of the respective undertakings, representations, and covenants of the Parties hereinafter set forth, the Parties agree as follows:
Section 1 – General
1.1 Premises
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1.1.1
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The leased real estate (the “Premises”) consists of the real property as described at
Exhibit A.
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1.1.2
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As of the Effective Date, the Premises include 1,412 square feet of warehouse and office space (“Warehouse Space”); 1,536 square feet of greenhouse space (“Greenhouse Space”); and no or zero (0) square feet of arable land (“Arable Land”). For purposes of this Lease Agreement, the Greenhouse Space and Arable Land are collectively referred to as the “Garden Canopy.”
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1.1.3
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Landlord and Tenant affirm that Landlord has informed Tenant that Landlord is currently leasing the premises from Ricardo Esparza and Lismar Properties LLC pursuant to lease agreements signed on June 25, 2014 (“Master Leases”) and that this Sublease Agreement is subject to the Master Leases’ terms and conditions in all respects and Landlord’s rights, interest, and obligations concerning the Premises thereunder.
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1.2 Lease Agreement Term
This Lease Agreement commences at 12:01 AM on the Effective Date and shall expire or terminate at 11:59 PM on June 30, 2015 (“Lease Term”). The Tenant shall have the right to extend the initial Lease Term as detailed in the Lease Agreement section entitled “Option to Renew.” Upon termination, this Agreement shall be of no further force or effect and the parties shall have no further obligation or liability hereunder.
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1.3 Base Rent
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1.3.1
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Tenant agrees to pay Landlord a monthly rent for the Premises (“Base Rent”) of
$9.52 per square foot of the total Garden Canopy.
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1.3.2
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All payments of rent shall be payable to Landlord at the following address or at such other place as Landlord shall from time to time designate by written notice to Tenant:
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River Ridge Sunshine Farms LLC
P.O. Box 1288
Prosser, WA 99350
1.4 Permitted Use
The Premises shall only be used and occupied for any commercial purposes authorized under Washington State Law, including commercial activities related to cannabis cultivation, production, growing, processing, and packaging in compliance with RCW 69.50 and other applicable Washington State laws (“Recreational Cannabis Laws”) as well as RCW 69.51A and other applicable Washington State laws (“Medical Cannabis Laws”) (collectively, “Permitted Use”).
1.5 Quiet Enjoyment
If Tenant pays the Base Rent and all other rent due to Landlord as specified in this Lease Agreement, and if Tenant performs its obligations under this Lease Agreement and complies with all Lease Agreement provisions, Landlord agrees that subject to the terms of this Lease Agreement, Tenant shall peaceably and quietly have, hold, and enjoy possession of the Premises during the Term without disturbance from Landlord or anyone claiming by, through, or under Landlord.
1.6 Notices
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1.6.1
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All notices, bills, statements, or communications under this Lease Agreement shall be in writing and effective upon either of the following:
1.6.1.1 upon delivery if delivered in person or via overnight courier to the other party;
1.6.1.2 three (3) days after being sent by registered or certified mail to the other party at the following addresses:
Landlord Tenant
River Ridge Sunshine Farms LLC Cannabliss Organic Gardens
P.O. Box 1288 22604 Hosko Road
Prosser, WA 99350 Prosser, WA 99350
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1.6.1.3 upon confirmed receipt from the other party of a transmission by email to the other party at the following email addresses:
Landlord
riverridgesunshinefarms@gmail.com
Tenant
Brandonsrussell81@icloud.com
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Section 2 – Premises
2.1 Use
Tenant shall not commit or allow to be committed any waste, or any public or private nuisance, upon the Premises.
2.2 Compliance
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2.2.1
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Tenant agrees to comply with all laws applicable to the Premises and its use of the
Premises. Tenant shall not cause or permit the Premises to be used in any way that violates any law, ordinance, regulation, or administrative order of Washington State or its subordinate authorities or entities.
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2.2.2
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Landlord represents to Tenant that, as of the Effective Date and to the best of Landlord’s knowledge, the Premises comply with all applicable laws, rules, regulations, and administrative orders, including the Americans With Disabilities
Act.
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2.2.3
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Landlord agrees to remedy, at its sole expense, any noncompliant aspects of the Premises that existed as of the Effective Date.
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2.2.4
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Tenant agrees that during the Term it is responsible for, at its sole cost and expense, altering the Premises as may be required by laws, rules, regulations, and administrative orders:
2.2.4.1 related to Tenant’s use of the Premises in furtherance of the Permitted Use; or
2.2.4.2 for any damage caused by willful misconduct or negligence by Tenant, Tenant’s agents, invitees, subtenants (“Subtenants”), or assignees (“Assignees”).
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2.2.5
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Landlord agrees that during the Term it is responsible for, at its sole cost and expense, altering the Premises as may be required by laws, rules, regulations, and administrative orders:
2.2.5.1 for reasons unrelated to Tenant’s use of the Premises in furtherance of the Permitted Use; or
2.2.5.2 for any damage that was not caused by or a result of the willful misconduct or negligence of Tenant, Tenant’s agents, invitees, Subtenants, or Assignees.
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2.2.6
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Tenant shall, from time to time, procure and maintain all licenses and permits necessary for any use or activity conducted at the Premises, at Tenant’s sole
expense.
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2.2.7
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Tenant shall observe and abide by the Rules and Regulations set forth in Exhibit B to this Lease and any amendments, revisions, or supplements to such Rules and Regulations that Landlord notifies in writing to Tenant. Tenant shall further be responsible for compliance with the Rules and Regulations by Tenant’s employees, servants, agents and visitors.
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2.3 {The section has been intentionally deleted}
2.4 Repairs, Improvements and Additions
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2.4.1
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Landlord shall, at its sole expenses, be responsible for all repairs and maintenance, whether structural or non-structural, to the roof structure (roof and roof membrane), subfloor, foundation, and exterior walls.
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2.4.2
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After Tenant takes possession of the Premises, Landlord may, after providing Tenant with 72-hour notice, enter the Premises and make additions and improvements to the Premises. Landlord must provide Tenant with the names of Landlord’s contractors and reasonably detailed plans and specifications for proposed additions or improvements.
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2.4.3
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Landlord shall, at its sole expense, be responsible for all normal repairs and maintenance, whether structural or non-structural, necessary to keep the Premises in safe operating condition, including keeping all utilities and other systems serving the Premises – such as heating, ventilation, and air conditioning (“HVAC”) equipment at the Premises – in good condition, and promptly repairing and replacing such equipment.
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2.4.4
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Notwithstanding anything in this Section to the contrary, Landlord shall not be responsible for any repairs to the Premises made necessary by the negligence or willful misconduct of Tenant, Subtenants, Assignees, or any of Tenant’s or Subtenants’ or Assignees’ employees, officers, agents, servants, contractors, customers, clients, visitors, guests, or other licensees or invitees (collectively, “Tenant Parties”).
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2.4.5
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If Tenant fails to perform its obligations under this Section, Landlord may at its discretion enter upon the Premises after ten (10) days’ prior written notice to ensure the Premises’ good order, condition and repair. Any costs incurred by the Landlord in furtherance of such efforts, together with interest thereon at the Default Rate as set forth and defined in this Lease Agreement, shall be due and payable as additional rent to Landlord with Tenant’s next installment of Base
Rent. Tenant’s failure to perform its obligations under this Section constitutes an Event of Default as subsequently defined under this Agreement.
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2.5 Alterations
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2.5.1
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Tenant may make alterations, additions or improvements to the Premises (“Alterations”) only with the prior written consent of Landlord which, with respect to alterations not affecting the structural components of the Premises or utility systems therein, shall not be unreasonably withheld, conditioned, or
delayed.
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2.5.2
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Tenant’s written request to Landlord for Alterations must include the names of Tenant’s contractors and reasonably detailed plans and specifications for proposed Alterations.
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2.5.3
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Landlord must respond to Tenant’s written request for Alterations within thirty
(30) days of receiving said request.
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2.5.4
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The term “Alterations” does not include installation of shelves, movable partitions, Tenant’s equipment, and trade fixtures that may be performed without damaging existing improvements or the structural integrity of the Premises; Landlord’s consent shall not be required for Tenant’s installation or removal of such items.
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2.5.5
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Tenant shall perform all work related to Alterations of the Premises at Tenant’s expense in compliance with all applicable laws and shall complete all Alterations in accordance with plans and specifications approved in writing by Landlord, using contractors approved in writing by Landlord.
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2.5.6
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Tenant shall pay when due, or furnish a bond for payment of, all claims for labor or materials furnished to or for Tenant at or for use in the Premises, which claims are or may be secured by any mechanics’ or materialmens’ liens against the Premises or any interest therein.
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2.5.7
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Tenant shall remove all Alterations at the end of the Lease Term unless Landlord consents in writing for Tenant to leave specified Alterations at the Premises, in which case Tenant shall not remove such Alterations and they shall become Landlord’s property. Tenant shall immediately repair any damage to the Premises caused by removal of Alterations.
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2.6 Access and Right of Entry
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2.6.1
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After 72 hours’ notice to Tenant from Landlord (except in cases of emergency, when no notice shall be required), Tenant shall permit Landlord and its agents, employees and contractors to enter the Premises at all reasonable times to make repairs, inspections, alterations, additions or improvements, provided that Landlord shall use reasonable efforts to minimize interference with Tenant’s use and enjoyment of the Premises.
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2.6.2
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After 72 hours notice to Tenant, Landlord shall have the right to enter the Premises for the purposes of:
2.6.2.1 showing the Premises to prospective purchasers or lenders;
2.6.2.2 showing the Premises to prospective tenants within thirty (30) days prior to the expiration or sooner of the termination of the Lease Term; and
2.6.2.3 posting signs and advertisements on the Premises indicating that the Premises may be rented (“For Lease” signs) within thirty (30) days prior to the expiration or sooner termination of the Lease Term.
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2.7 Signs and Advertisements
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2.7.1
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Tenant shall obtain Landlord’s written consent as to size, location, materials, method of attachment, and appearance before installing any signs or advertising materials upon the Premises.
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2.7.2
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Tenant shall install any approved signs or advertising materials at Tenant’s sole expense and in compliance with all applicable laws.
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2.7.3
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If Tenant damages or defaces the Premises in installing or removing signs or advertising materials, Tenant shall repair such injury or damage to the Premises within two (2) weeks of such damage or defacement.
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Section 3 – Lease Renewal and Termination
3.1 Option to Renew
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3.1.1
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Tenant may extend the initial Lease Term for additional one-year periods, each one-year period of which is an “Option Term”, provided:
3.1.1.1 Tenant gives Landlord written notice stating that Tenant is exercising its right to extend the initial Lease Term pursuant to this Lease Agreement (“Tenant’s Extension Notice”), and that Tenant gives the Landlord each such Tenant’s Extension Notice prior to sixty (60) days before the date on which the Lease Agreement terminates;
3.1.1.2 Landlord agrees to each Option Term in writing; and
3.1.1.3 Landlord and Tenant sign an addendum to this Lease Agreement specifying the Base Rent for each such Option Term.
3.1.1.4 If for any Option Term Tenant does not provide Landlord a Tenant’s Extension Notice, Landlord does not agree to an Option Term in writing, or no addendum to the Lease Agreement is signed by Tenant and Landlord for an additional Option Term, but Tenant submits and Landlord accepts a monthly rent payment, then the Lease Agreement shall continue for an Option Term at the previous Option Term’s rent
amount.
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3.1.2
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If the conditions of the preceding Section are satisfied, the Lease Term shall be extended for each Option Term, and all the Lease Agreement terms and conditions shall continue unchanged, except for the Base Rent adjustment as detailed in the preceding Agreement Section.
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3.2 Termination Due to Business Impracticability
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3.2.1
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This Lease Agreement shall automatically and immediately terminate and shall be null, void, and of no force or effect if federal, state, county, or municipal legal authorities notify Landlord or Tenant that Tenant’s use of the Premises is not in compliance with federal, state, county, or municipal law, or that Tenant or Landlord is subject to civil or criminal sanctions due to Tenant’s use or occupancy of the Premises, or that Tenant is not authorized to conduct its intended business activities on the Premises.
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3.2.2
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Notice from legal authorities giving rise to this section includes, but is not limited to:
3.2.2.1 licensing denials issued by the Washington State Liquor Control Board;
3.2.2.2 licensing revocations issued by the Washington State Liquor Control Board; and
3.2.2.3 official letters, raids, arrests, seizures, or any notice of any kind that legal action is pending against Landlord or Tenant for Tenant’s use and operation of the Premises.
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3.2.3
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Landlord, in its sole discretion, may allow Tenant opportunities to cure or remedy any legal or administrative issues to the satisfaction of the notifying governing body before terminating this Lease Agreement under this Section.
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3.3 Surrender Upon expiration of the Lease Term, whether by lapse of time or otherwise, Tenant shall promptly and peacefully surrender the Premises, together with all keys, to Landlord in as good condition as when received by Tenant from Landlord or as thereafter improved, excepting reasonable wear and tear and insured casualty damages.
3.4 Casualty and Taking
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3.4.1
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In the event that the Premises or any material part thereof shall be destroyed or damaged by fire or casualty, shall be taken by any public authority or for any public use or shall be condemned by the action of any public authority, then this Lease may be terminated at Landlord’s election.
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3.4.2
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Such election, which may be made notwithstanding the fact that Landlord’s entire interest may have been divested, shall be made by the giving of notice by Landlord to Tenant within fourteen (14) days after the date of the taking or
casualty.
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3.4.3
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If Landlord does not elect to so terminate, this Lease shall continue in force and as long as the damage is not caused by the negligence or other wrongful act of Tenant or Tenant Parties, Base Rent shall be proportionately suspended or abated until the Premises, excluding any improvements to the Premises made at Tenant’s expense, or what may remain thereof, shall be put by Landlord in proper condition for use, which Landlord covenants to do with reasonable diligence to the extent permitted by zoning and building codes or ordinances then in existence.
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3.4.4
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Irrespective of the form in which recovery may be had by law, all rights to seek reimbursement for damages or compensation from fire or other casualty or any taking by eminent domain or condemnation shall belong to Landlord in all cases.
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3.4.5
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Tenant hereby grants to Landlord all of Tenant’s rights to such claims for damages and compensation and covenants to deliver such further assignments thereof as Landlord may from time to time request.
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3.4.6
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Nothing contained herein shall be construed to prevent Tenant from prosecuting in any condemnation proceedings a claim for relocation expenses, provided that such action shall not affect the amount of compensation otherwise recoverable by Landlord from the taking authority.
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3.5 Holdover
3.5 Holdover
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3.5.1
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No holding over and remaining on the premises by Tenant after the Lease Term shall be construed to extend the Lease Term, and Landlord may at its sole discretion exercise any or all of its remedies pursuant to this Agreement or at law. Otherwise, all of the covenants, agreements and obligations of Tenant applicable during the Lease Term shall apply and be performed by Tenant during such period of holding over as if such period were part of the Lease Term.
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3.5.2
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Tenant shall also pay to Landlord all direct and indirect damages that Landlord sustains by reason of Tenant’s holding over.
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3.6 Insurance Termination
This Lease Agreement terminates immediately in the event Tenant’s insurance coverages required under this Lease Agreement are cancelled, lapse, end, or terminate for any reason.
Section 4 – Rent
4.1 Rent Payment
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4.1.1
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Tenant shall pay Landlord without notice, demand, deduction, or offset, in lawful money of the United States, the Base Rent on or before the fifth day of each month during the Lease Term.
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4.1.2
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Tenant shall pay any additional amounts due to Landlord (“Additional Rent”) (collectively, Base Rent and Additional Rent are “rent” or “Rent”) when required under this Lease Agreement.
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4.1.3
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All payments due to Landlord under this Lease Agreement, including late fees, interest, costs, charges, or expenses shall also constitute Additional Rent. If Tenant fails to pay any Additional Rent, Landlord shall have the same rights and remedies as otherwise provided in this Lease Agreement for Tenant’s failure to
pay Rent.
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4.2 {The section has been intentionally deleted}
4.3 Less Than Full Payment Landlord’s acceptance of less than the full amount of any payment or financial obligation due from Tenant shall not be deemed an accord and satisfaction or compromise of such payment or financial obligation unless Landlord specifically consents in writing to payment of such lesser amount as an accord and satisfaction or compromise of the amount that is due and payable to Landlord.
Section 5 – Utilities and Taxes
5.1 Utilities
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5.1.1
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Landlord shall not be responsible for providing any utilities to the Premises and shall not be liable for any loss, injury or damage to person or property caused by or resulting from any variation, interruption, or failure of utilities due to any cause whatsoever, and Rent shall not abate as a result thereof, except to the extent due to Landlord’s intentional misconduct or gross negligence.
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5.1.2
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Tenant shall be responsible for determining whether available utilities and their capacities satisfy Tenant’s needs.
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5.1.3
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Tenant shall connect and directly pay for all water, sewer, drainage, gas, janitorial, electricity, garbage removal, heat, cleaning, telephone, internet, cable services, and other utilities and services used by Tenant on the Premises during the Lease Term, regardless of whether such services are billed directly to Tenant.
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5.1.4
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Landlord will procure, or cause to be procured, without cost to Tenant, all necessary permits, licenses or other authorizations required for the lawful and proper installation, maintenance, replacement, and removal on or from the
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Premises of wires, pipes, conduits, tubes, and other equipment and appliances for use in supplying all utilities or services to the Premises. 5.1.5 Landlord, upon receiving Tenant’s written request, and at the sole expense and liability of Tenant, shall join with Tenant in any reasonable applications required for obtaining or continuing such utilities or services on or related to the Premises.
5.2 Taxes
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5.2.1
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Tenant shall pay all taxes, assessments, liens and license fees (“Taxes”) levied, assessed or imposed by any authority having the direct or indirect power to tax or assess any such Taxes, related to or required by Tenant’s use of the Premises, as well as all Taxes on Tenant’s personal property located on the Premises.
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5.2.2
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Landlord shall pay all real estate taxes and any Taxes resulting from a reassessment of the Premises due to a change of ownership or otherwise.
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Section 6 – Insurance
6.1 Tenant’s Liability Insurance
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6.1.1
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During the Lease Term, Tenant at its sole expense shall pay for and maintain commercial general liability insurance policies issued by a responsible company or companies authorized to conduct business in the State of Washington with broad form property damage and contractual liability endorsements that cover all of Tenant’s activities related to and its possession of the Premises (“Liability Insurance Policy”).
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6.1.2
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The Liability Insurance Policy shall name Landlord, its property manager (if any), and other parties designated by Landlord as additional insureds using an endorsement form acceptable to Landlord, and shall insure Tenant’s, Subtenants’, Assignees’, and Tenant Parties’ activities and those of such parties’ employees, officers, agents, servants, contractors, customers, clients, visitors, guests, or other licensees or invitees (collectively, “Insured Parties”) with respect to the Premises against loss, damage or liability for personal or bodily injury (including death) or loss or damage to property arising out of any one incident and arising from Insured Parties’, including Tenant’s and Subtenants’ and Assignees’ use or occupancy of the Premises, with a combined single limit of not less than $1,000,000, and a deductible of not more than $10,000.
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6.1.3
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Tenant’s liability insurance will be primary and noncontributory with any liability insurance carried by Landlord.
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6.1.4
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Landlord may also require Tenant to obtain and maintain business income coverage for at least six (6) months, business auto liability coverage, and, if applicable to Tenant’s Permitted Use, liquor liability insurance and/or warehouseman’s coverage.
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6.1.5
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Tenant shall cause to be provided to Landlord a certificate of insurance, setting forth the provisions of insurance coverages issued by the insuring company for each policy period applicable during the Lease Term.
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6.2 Tenant’s Property Insurance During the Lease Term, Tenant shall pay for and maintain special form clauses of loss coverage property insurance (with coverage for earthquake if required by Landlord’s
lender and, if the Premises are situated in a flood plain, flood damage) for all of Tenant’s, Subtenants’, Assignees’ and Tenant Parties’ personal property, fixtures, and equipment located on the Premises in the amount of their full replacement value, with a deductible of not more than $10,000. Tenant shall cause to be provided to Landlord a certificate of insurance, setting forth the provisions of insurance coverages issued by the insuring company for each policy period applicable during the Lease Term.
6.3 Landlord’s Insurance Landlord shall carry such insurance of such types and amounts as Landlord, in its sole discretion, shall deem reasonably appropriate.
6.4 Insurance Cancellation Notice All insurance policies referenced in this Section shall contain provisions that no policy cancellations, material changes, alterations, or amendments shall be effective without the insurer delivering to Landlord and Tenant written notices of such proposed cancellations, changes, alterations, or amendments not less than ten (10) days prior to the effective date thereof.
6.5 Waiver of Subrogation Each party shall provide notice to the property insurance carrier or carriers of the Parties’ mutual waiver of subrogation, and shall cause its respective property insurance carriers to waive all rights of subrogation against the other as well as against the property owners, Ricardo Esparza and Lismar Properties LLC. These waivers shall not apply to the extent of the deductible amounts to any such property policies or to the extent of liabilities exceeding the limits of such policies. All insurance policies carried by either party with respect to the Premises or such party’s activities thereon shall provide a waiver by the insurer of any rights of subrogation against Landlord, Tenant, and the property owners Ricardo Esparza and Lismar Properties LLC and their respective officers, directors, agents, and employees. Tenant shall sign and deliver to Landlord a waiver of Tenant’s subrogation against property owners Ricardo Esparza and Lismar Properties LLC prior to, and as a condition to concluding, this Lease Agreement.
6.6 Insurance Requirements for Subtenants or Assignees
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6.6.1
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If Tenant subleases or assigns any or all part or interests in the Premises to a Subtenant or Assignee, Tenant will require Subtenant or Assignee to comply with all provisions of this section.
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6.6.2
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Tenant may not execute a sublease with Subtenant or an assignment with an Assign until and on the following conditions:
6.6.2.1 such Subtenant or Assignee obtains insurance coverages of equal or greater coverage and value as required of Tenant and as detailed in this Section;
6.6.2.2 Tenant provides documentation of Subtenant’s insurance coverages to Landlord and Lismar Properties LLC; and
6.6.2.3 Tenant obtains signed written approvals of Subtenant’s insurance coverages from both Landlord and Lismar Properties LLC.
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6.6.3
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Tenant must include in any sublease concluded with Subtenant or assignment with an Assignee a provision that such sublease or assignment terminates
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immediately in the event that Subtenant’s or Assignee’s insurance coverage is cancelled, lapses, ends, or terminates for any reason and that Subtenant or Assignee must notify Tenant immediately in writing of any such insurance cancellation, lapse, ending, or termination.
Section 7 – Indemnification
7.1 Indemnification
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7.1.1
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Tenant shall defend, indemnify, and hold Landlord harmless against all liabilities, damages, costs, and expenses, including attorneys’ fees, for personal injury, bodily injury (including death) or property damage arising from any negligent or wrongful act or omission of Tenant or Tenant’s employees, officers, agents, servants, contractors, customers, clients, visitors, guests, or other licensees or invitees on or around the Premises, or arising from any breach of this Lease Agreement by Tenant.
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7.1.2
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Landlord shall defend, indemnify, and hold Tenant harmless against all liabilities, damages, costs, and expenses, including attorneys’ fees, for personal injury, bodily injury (including death) or property damage arising from any negligent or wrongful act or omission of Landlord or Landlord’s employees, officers, agents, servants, contractors, customers, clients, visitors, guests, or other licensees or invitees on or around the Premises, or arising from any breach of this Lease Agreement by Landlord.
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7.1.3
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Tenant shall neither hold nor attempt to hold Landlord or its employees or Landlord’s agents or their employees liable for, and Tenant shall indemnify and hold harmless Landlord, its employees and Landlord’s agents and their employees from and against, any and all demands, claims, causes of action, fines, penalties, damages, liabilities, judgments and expenses (including, without limitation, attorneys fees) incurred in connection with or arising from:
7.1.3.1 the use or occupancy or manner of use or occupancy of the Premises by Tenant or any person or entity claiming under Tenant or the Tenant Parties;
7.1.3.2 any matter occurring on the Premises during the Term;
7.1.3.3 any breach, violation or nonperformance by Tenant or any person or entity claiming under Tenant or the employees, agents, contractors, invitees or visitors of Tenant or the Tenant Parties or any such person of any term, covenant or provision of this Lease or any law, ordinance or governmental requirement of any kind; and
7.1.3.4 any injury or damage to the person, property or business of Tenant, its employees, agents, contractors, invitees, visitors or any other person entering upon the Property under the express or implied invitation of Tenant regardless of whether such claims result from the sole, joint, comparative or concurrent negligence or strict liability of Landlord, its agents, servants or employees.
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7.1.4
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If any action or proceeding is brought against Landlord or its employees or Landlord’s agents or their employees or the Landlord Parties by reason of any
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claims under this Section, Tenant upon notice from Landlord shall defend the same at Tenants expense with counsel reasonably satisfactory to Landlord.
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7.1.5
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Notwithstanding any provisions in this Section, in no event shall this Section require Tenant to indemnify or defend Landlord or its employees or Landlord’s agents or their employees or the Landlord Parties against any loss, cost, damage, liability, claim, or expense to the extent arising out of the gross negligence or willful misconduct of Landlord or its employees or Landlord’s agents or their
employees.
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7.1.6
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Personal Property. Tenant shall keep all of the furnishings, fixtures, equipment, effects and property of every kind, nature and description of Tenant and of all persons or entities claiming by, through or under Tenant which may be on the Property (“Personal Property”) at Tenant’s sole risk, and if the whole or any part thereof shall be lost, destroyed or damaged by fire, flood, theft or any other cause, Tenant shall hold harmless and indemnify Landlord and its manager from and against any and all injury, loss, damage or liability to Tenant or to any other person or entity arising out of said loss or damage to such Personal Property.
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7.2 Waiver of Immunity Landlord and Tenant each specifically and expressly waive any immunity that each may be granted under the Washington State Industrial Insurance Act, Title 51 RCW. Neither party’s indemnity obligations under this Lease Agreement shall be limited by any provision addressing the amount or type of damages, compensation, or benefits payable to or for any third party under the Worker Compensation Acts, Disability Benefit Acts, or other employee benefit acts.
7.3 Exemption of Landlord from Liability Except with regard to claims arising out of Landlord’s gross negligence or willful misconduct, Tenant agrees that Landlord shall not be liable for injury to Tenant’s business or assets or any loss of income therefrom or for damage to any property of Tenant or of its employees, officers, agents, servants, contractors, customers, clients, visitors, guests, or other licensees or invitees, or any other person in or about the Premises.
Section 8 – Assignment and Subletting
8.1 By Tenant
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8.1.1
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If Tenant is a partnership, limited liability company, corporation, or other entity, any transfer of this Lease Agreement by merger, consolidation, redemption or liquidation, or any change in the ownership of, or power to vote, which singularly or collectively represents a majority of the beneficial interest in Tenant, shall constitute a transfer under this Section.
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8.1.2
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Tenant shall not voluntarily or by operation of law, without first obtaining the written consent of Landlord and owners of the property:
8.1.2.1 mortgage, pledge, or encumber this Lease Agreement or any interest herein; or
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8.1.2.2 assign or transfer this Lease Agreement or any interest herein, sublease the Premises or any part thereof, or assign, transfer, or sublease any right or privilege appurtenant thereto, or allow any other person (the employees and invitees of Tenant excepted) to occupy or use the Premises or any portion thereof.
8.2 By Landlord
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8.2.1
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Landlord may assign this Lease Agreement without Tenant’s consent.
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8.2.2
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In the event Landlord transfers its interest in the Premises, other than a transfer for collateral purposes only, upon the assumption of this Lease Agreement by the transferee, Landlord shall be immediately relieved of any obligations and liabilities accruing in connection with the Premises after the date of such transfer, including liability for any retained security deposit or prepaid rent, for which the transferee shall be liable, and Tenant shall seek any applicable remedies from the transferee.
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Section 9 – Liens
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9.1
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Tenant shall not subject the Landlord’s assets to any liens or claims of lien.
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9.2
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Tenant shall keep the Premises free from any liens created by or through Tenant.
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9.3
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Tenant shall indemnify and hold Landlord harmless from liability for any such liens including, without limitation, liens arising from any Alterations.
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9.4
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If a lien is filed against the Premises by any person claiming by, through or under Tenant, Tenant shall notify Landlord of the lien within three (3) days of Tenant’s receiving notification of the lien. Within ten (10) days after Landlord’s demand and at Tenant’s expense, either remove the lien or furnish to Landlord a bond in form and amount and issued by a surety satisfactory to Landlord, indemnifying Landlord and the Premises against all liabilities, costs and expenses, including attorneys’ fees, which Landlord could reasonably incur as a result of such lien.
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Section 10 – Default
10.1 Tenant’s Default
The following occurrences shall each constitute a default by Tenant (an “Event of Default”):
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10.1.1
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Failure To Pay. Failure by Tenant to pay any sum, including Rent, due under this Lease Agreement following five (5) days’ notice from Landlord of the failure to
pay.
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10.1.2
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Abandonment. Tenant’s absence from the Premises of five (5) or more days while Tenant is in breach of one or more terms of this Lease Agreement (“Abandonment”). Landlord’s remedies for Tenant’s Abandonment shall not be subject to any obligation for Landlord to provide Tenant notice or a right to cure.
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10.1.3
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Insolvency. Tenant’s insolvency or bankruptcy, whether voluntary or involuntary, or appointment of a receiver, assignee or other liquidating officer for Tenant’s business; provided, however, that in the event of any involuntary bankruptcy or other insolvency proceeding, the existence of such proceeding shall constitute an Event of Default only if such proceeding is not dismissed or vacated within sixty
(60) days after its institution or commencement.
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10.1.4
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Levy or Execution. The taking of Tenant’s interest in this Lease Agreement or the Premises, or any part thereof, by execution or other process of law directed against Tenant, or attachment of Tenant’s interest in this Lease Agreement by any creditor of Tenant, if such attachment is not discharged within fifteen (15) days after being levied.
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10.1.5
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Other Non-Monetary Defaults. Tenant’s breach of any term, provision or covenant of this Lease Agreement other than one requiring the payment of money and not otherwise detailed in this Section or elsewhere in this Lease Agreement, which breach continues for a period of twenty (20) days after notice of such breach by Landlord to Tenant.
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10.1.6
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Failure to Take Possession. Failure by Tenant to take possession of the Premises on the Effective Date or failure by Tenant to commence any Tenant Improvement in a timely fashion.
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10.2 Landlord Default
Landlord will be considered in default if Landlord fails to perform its obligations under this Lease Agreement within twenty (20) days after notice by Tenant to Landlord, unless a reasonable cure is impossible within such time period.
10.3 Notice Regarding Default or Demand
Any notice periods granted herein shall be deemed to run concurrently with, and not in addition to, any default notice periods required by law.
Section 11 - Remedies
11.1 Event of Default and Termination
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11.1.1
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Upon an Event of Default, Landlord may immediately terminate this Lease Agreement and any of Tenant’s interests under the Lease Agreement and to exercise all available remedies against Tenant available at law or in equity.
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11.1.2
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Upon termination of this Lease Agreement for an Event of Default or for any other reason, Tenant will remain liable to Landlord for damages in an amount equal to the Rent and other amounts that would have been owing by Tenant under this Lease Agreement for the balance of the Lease Term less the proceeds, if any, from Landlord’s re-letting of the Premises subsequent to the termination after Landlord’s re-letting expenses are subtracted from the re-letting net proceeds. Such damages are calculated as follows: Tenant Damages Owed Landlord = [Rent/Owed Amounts for Lease Balance] – [Re-Letting Net Proceeds] – [Re-Letting Expenses]
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11.1.3
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Upon termination of this Lease Agreement for an Event of Default or any other reason, Landlord shall be entitled to either collect damages from Tenant monthly on the days on which rent or other amounts would have been payable under this Lease Agreement or, alternatively, Landlord may accelerate Tenant’s obligations under the Lease Agreement and recover from Tenant:
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11.1.3.1
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unpaid rent which had been earned at the time of termination
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11.1.3.2 |
the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of rent loss that Tenant proves could reasonably have been avoided; |
11.1.3.3 |
the amount by which the unpaid rent for the balance of the term of the Lease Agreement after the time of award exceeds the amount of rent loss that Tenant proves could reasonably be avoided; and |
11.1.3.4 |
any other amount necessary to compensate Landlord for all the detriment proximately caused by the Event of Default or Tenant's failure to perform its obligations under the Lease Agreement, or which in the ordinary course would be likely to result from the Event of Default including without limitation Re-Letting Expenses as defined in this Lease Agreement. |
11.2 Re-Entry and Re-Letting
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11.2.1
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For purposes of this Lease Agreement, expenses relating to the re-letting or re-leasing of the Premises ("Re-Letting Expenses") are defined so as to include all such expenses including but not limited to all repossession costs, brokerage commissions and costs for securing new tenants, attorneys' fees, remodeling and repair costs, costs for removing persons or property, costs for storing Tenant's property and equipment, and costs of improvements and rent concessions granted by Landlord to any new Tenant.
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11.2.2 |
Upon an Event of Default, Landlord may continue this Lease Agreement in full force and effect and, without demand or notice, re-enter and take possession of the Premises or any part thereof, expel Tenant and anyone claiming through or under Tenant from the Premises, and remove the personal property of Tenant or anyone claiming through or under Tenant. |
11.2.3 |
Upon an Event of Default and expulsion of Tenant and anyone claiming through or under Tenant, Landlord may re-let the Premises or any part of them in Landlord's name for such period of time and at such other terms and conditions as Landlord, in its sole discretion, may determine. |
11.2.4 |
To the fullest extent permitted by law, the proceeds of any re-letting or re-leasing of the Premises shall be applied as follows:
11.2.4.1 first, to pay Landlord all Re-Letting Expenses;
11.2.4.2 second, to pay any indebtedness of Tenant to Landlord other than rent;
11.2.4.3 third, to the rent due and unpaid hereunder; and
11.2.4.4 fourth, the residue, if any, shall be held by Landlord and applied in payment of other or future obligations of Tenant to Landlord as the same may become due and payable, and Tenant shall not be entitled to receive any portion of such revenue. |
11.2.5 |
Re-entry or taking possession of the Premises by Landlord under this Section shall not be construed as an election on Landlord's part to terminate this Lease Agreement, unless a notice of termination is given to Tenant. |
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11.2.6
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Landlord reserves the right under this Section following any re-entry or re-letting, or both, to exercise its right to terminate the Lease Agreement.
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11.2.7
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Tenant will pay Landlord the Rent and other sums which would be payable under this Lease Agreement if repossession had not occurred, less the net proceeds if any after Landlord re-lets the Premises and after deducting Landlord’s Re-Letting
Expenses.
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11.2.8
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Notwithstanding any provision to the contrary, if an Event of Default occurs and shall continue for twenty (20) days after receipt by Tenant of written notice thereof given by Landlord, then Landlord at its option may declare the term of this Lease Agreement ended and may re-enter the Premises either with or without process of law and remove Tenant therefrom.
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11.3 Costs and Attorney’s Fees If either party engages the services of an attorney to collect monies due and owing or to bring any action for relief against the other, declaratory or otherwise, arising out of this Lease Agreement, including any suit by Landlord for the recovery of Rent or other payments or possession of the Premises, the losing party shall pay the prevailing party a reasonable sum for attorneys’ fees in such action, whether in mediation or arbitration, at trial, on appeal, or in any bankruptcy proceeding.
11.4 Tenant’s Remedies
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11.4
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Tenant’s Remedies
11.4.1 Tenant’s sole remedy for a default by Landlord shall be to seek actual money damages, but not consequential or punitive damages, for any loss arising from Landlord’s default under this Lease Agreement.
11.4.2 Tenant shall neither assert nor seek to enforce any claim for breach of this Lease against any of Landlord’s assets other than Landlord’s interest in the Property, and Tenant agrees to look solely to such interest for the satisfaction of any liability or claim against Landlord under this Lease.
11.4.3 In no event shall Landlord be liable to Tenant for any loss of business or any indirect, special or consequential damages suffered by Tenant from whatever
cause.
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Section 12 – Other Provisions
12.1 Governing Law This Lease Agreement shall be governed by and construed in accordance with the laws of the State of Washington.
12.2 Severability Any provision of this Lease Agreement which shall be declared invalid, void, unenforceable or illegal by any court, political body or any other entity having competent jurisdiction shall in no way affect, impair or invalidate any other provision of this Lease Agreement.
12.3 Bar to Constructive Waiver
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12.3.1
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Landlord’s failure to insist, in any one or more instances, upon the strict performances of any of the terms, conditions, agreements and covenants set forth in the respective provisions of this Agreement, or to exercise any option herein conferred, shall not be considered as a waiver or relinquishment for the future of any such terms, conditions, agreements or covenants, or any such options, but the same shall continue and shall remain in full force and effect.
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12.3.2
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The failure of Landlord or Tenant to seek redress for violation of, or to insist upon the strict performance of, any covenant or condition of this Lease shall not be deemed a waiver of such violation nor prevent a subsequent act, which would have originally constituted a violation, from having all the force and effect of an original violation.
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12.3.3
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The receipt by Landlord of rent with knowledge of the breach of any covenant of this Lease shall not be deemed to have been a waiver of such breach by Landlord unless such waiver be in writing signed by the party to be charged.
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12.3.4
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No consent or waiver, express or implied, by Landlord to or of any breach of any agreement or duty shall be construed as a waiver or consent to or of any other breach of the same or any other agreement or duty. No acceptance by Landlord of a lesser sum than the Base Rent, Additional Rent or any other amount then due shall be deemed to be other than on account of the earliest installment of such rent or amount due, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as rent or other charge be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord’s right to recover the balance of such installment or pursue any other remedy set forth in this Lease.
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12.4 Authority to Contract Each party signing this Lease Agreement represents and warrants to the other that it has the authority to enter into this Lease Agreement, that the execution and delivery of this Lease Agreement has been duly authorized, and that upon such execution and delivery this Lease Agreement shall be binding upon and enforceable against the party.
12.5 Heirs and Assigns This Lease Agreement shall apply to and be binding upon Landlord and Tenant and their respective heirs, executors, administrators, representatives, successors and assigns.
12.6 Force Majeure Time periods for either party’s performance under any provisions of this Lease Agreement shall be extended for periods of time during which the party’s performance is prevented due to circumstances beyond such party’s control, including but not limited to fires, floods, earthquakes, acts of God, public enemy, war or other strife.
12.7 Confidentiality Tenant agrees that all terms and provisions included in this Lease are strictly confidential and shall not be disclosed to third parties. If Tenant makes any communication stating any of the terms or provisions of this Lease to any third party, it shall constitute a
material breach of this Lease, and Landlord may take appropriate legal action. Nothing in this section shall limit Tenants right to apply for specialized licensing from state, county, or municipal government or to communicate with government authorities concerning Tenants occupation and use of the Premises.
12.8 Public Disclosure Neither party shall make or permit to be made any press release or other similar public statement regarding this Lease without other party’s prior approval, which approval shall not be unreasonably withheld.
12.9 Financial Information Tenant shall throughout the Lease Term provide Landlord with such information about Tenant’s, or any person’s or entity’s claiming under Tenant or the Tenant Parties, financial condition and organizational structure as Landlord or the holder of any mortgage of any portion of the Property requires within fifteen (15) days of receiving such request.
12.10 {The section has been intentionally deleted}
12.11 Counterparts This Agreement may be executed in any number of counterparts, all of which constitute one and the same instrument, and any Party may execute this Agreement by signing and delivering one or more counterparts.
[Remainder of Page Intentionally Left Blank – Signature Page to Follow]
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease Agreement on the dates stated below.
LANDLORD:
River Ridge Sunshine Farms LLC
By: ___________________________ Name: Ricardo Esparza Title: Member Executed on: _______________, 2014
TENANT:
Cannabliss Organic Gardens
By: ___________________________ Name: Brandon Russell Title: Partner Executed on: _______________, 2014
By: ___________________________ Name: Jillian Eichler Title: Partner Executed on: _______________, 2014
By: ___________________________ Name: Manny Briceno Title: Partner Executed on: _______________, 2014
By: ___________________________ Name: Paula Testerman Title: Partner Executed on: _______________, 2014
By: ___________________________ Name: Leo Caballero Title: Partner Executed on: _______________, 2014
Exhibit A
Property Description
Street Address: 22604 Hosko Road, Prosser, WA
Parcel No.: 123953013124005
Legal Description: SECTION 23, TOWNSHIP 9 NORTH, RANGE 25 EAST, QUARTER SW: SHORT PLAT #3124, LOT 1 & 2, RECORDED 7/72008, UNDER AUDITOR’S FILE NO. 2008-019964. RECORDED IN VOLUME 1 OF SHORT PLATS, PAGE 3124, RECORDS OF BENTON COUNTY, WASHINGTON
Exhibit B
Rules and Regulations
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1.
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The Premises’ sidewalks, entries, and driveways shall not be obstructed by Tenant or its agents or used by them for any purposes other than ingress and egress to and from the
Premises.
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2.
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Tenant shall not install or operate any steam or gas engine or boiler, or other mechanical apparatus in the Premises, without obtaining Landlord’s written consent. The use of oil, gas, or inflammable liquids for heating, lighting or any other purpose is expressly prohibited. Explosives shall not be brought into the Property.
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3.
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Tenant shall maintain the Premises free from rodents, insects and other pests. Tenant, at its sole cost, shall be responsible for any pests or other extermination services, which Landlord shall be entitled to request of Tenant from time to time.
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4.
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Tenant shall not burn any trash or garbage of any kind in or about the Premises.
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5.
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Tenant shall not permit storage or dumping of waste or refuse or permit any harmful materials to be placed in any drainage system or sanitary system in or about the Premises.
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6.
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All moveable trash receptacles provided by the trash disposal firm for the Premises must be kept in the trash enclosure areas, if any, provided for that purpose.
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7.
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Tenant assumes full responsibility for protecting the Premises from theft, robbery, pilferage, arson, vandalism or other destruction of property and releases Landlord and its Property Manager from any and all claims arising therefrom.
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8.
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Tenant shall keep the Premises at a temperature sufficient to prevent freezing of water in pipes and fixtures. The plumbing facilities shall be used only in a manner consistent with the construction thereof. Tenant shall not deposit or permit to be deposited any foreign substance in the plumbing facilities. Tenant shall bear the expense of any breakage, stoppage or damage to the plumbing facilities.
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9.
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Landlord reserves the right at any time to change or rescind any one or more of these rules or regulations or to make such other and further reasonable rules and regulations as in Landlord’s judgment may from time to time be necessary for the management, safety, care and cleanliness of the Premises. Landlord shall not be responsible to Tenant or to any other person for the nonobservance or violation of the rules and regulations by any other person. Tenant shall be deemed to have read these rules and to have agreed to abide by them as a condition to its occupancy of the Premises herein leased. Any changes in rules and regulations shall become immediately effective upon delivery by Landlord or its Property
Manager.
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SHARE EXCHANGE AGREEMENT
dated as of
June 30, 2014
between
INDIE GROWERS ASSOCIATION
and
THE UNDERSIGNED UNITHOLDER
relating to the purchase and sale
of
100% of the Outstanding Member Units
of
RIVER RIDGE SUNSHINE FARMS LLC
SHARE EXCHANGE AGREEMENT
EFFECTIVE DATE OF AGREEMENT: June 30, 2014
THIS SHARE EXCHANGE AGREEMENT (this “Agreement”) is by and between INDIE GROWERS ASSOCIATION, a Nevada corporation (“Buyer”) and RICARDO ESPARZA, the selling unitholder outlined below (“Seller”).
W I T N E S S E T H :
WHEREAS the Seller is the beneficial owner of 100% of the Member Units of RIVER RIDGE SUNSHINE FARMS LLC, a Washington State LLC (“RRSF”), and desires to sell 100% of the Member Units allocated as described below to Buyer, a publicly traded company, and Buyer desires to purchase the Member Units from Seller upon the terms and subject to the conditions hereinafter set forth. The member Units of RRSF are held as follows:
100% Ricardo Esparza
AND WHEREAS River Ridge Sunshine Farms LLC or RRSF is the registered and beneficial owner of a variety of assets that are necessary for conducting the business of RRSF, the sufficiency and title of which has been verified by the Buyer.
AND WHEREAS the parties agree that the Shares of Indie Growers Association or the Buyer shall not be subject to a share consolidation for a period of two years from the date of this Agreement.
THEREFORE, the parties hereto agree as follows:
1.
Definitions
a.
Other Definitional and Interpretative Provisions.
Unless specified otherwise, in this Agreement the obligations of any party consisting of more than one Person are joint and several. The words “hereof”, “herein” and “hereunder” and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof. References to Articles and Sections are to Articles and Sections of this Agreement unless otherwise specified. Any singular term in this Agreement shall be deemed to include the plural, and any plural term the singular. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation,” whether or not they are in fact followed by those words or words of like import. “Writing,” “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible
form. References to any Person include the successors and permitted assigns of that Person. References from or through any date mean, unless otherwise specified, from and including or through and including, respectively.
2.
Purchase and Sale and Transfer of Rights, Closing Condition
a.
Purchase and Sale.
Upon the terms and subject to the conditions of this Agreement, Seller agrees to sell to Buyer and Buyer agrees to purchase from Seller, 100% of the outstanding Member Units of RRSF in exchange for 62,000,000 shares of common stock of the Buyer issued to the Seller. The Shares shall be issued as follows:
Ricardo Esparza 62,000,000 Common Shares
b.
Closing.
The Closing shall be on or before June 30, 2014.
c.
Buy-Back/Unwind Provision.
In the event that Indie Growers Union becomes bankrupt, insolvent, or is the subject of a state, federal or regulatory sanction such that it affects its ability to continue as a going concern, the Seller shall have the right to unwind the agreement such that the Buyer agrees to return the member units to the Seller, and the Seller agrees to return the Shares to the Buyer.
3.
Representations and Warranties of the Seller
Seller makes the following representations and warranties to Buyer with respect to RRSF as of the date hereof (except to the extent expressly relating to a specific
date, in which event such representation or warranty shall be made as of such date), which shall be unaffected by any investigation heretofore or hereafter made by or on behalf of Buyer:
a.
Corporate Existence and Power.
RRSF is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation and has all corporate powers required to carry on its
business as now conducted.
b.
Corporate Authorization and Binding Effect.
The execution, delivery and performance by Seller of this Agreement, and the consummation by the Seller and RRSF of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate and shareholder action by the Seller and RRSF. Seller and RRSF has full power and authority to execute and deliver this Agreement and to perform its obligations hereunder. This Agreement and each Related Agreement to which it is a party has been duly executed and delivered by Seller and RRSF and, assuming due and valid authorization, execution and delivery thereof by Buyer, this Agreement is a valid and binding obligation of Seller and RRSF party thereto, enforceable in accordance with its terms and conditions.
c.
Governmental Authorization.
The execution, delivery and performance by the Seller of this Agreement and the consummation by the Seller of the transactions contemplated hereby require no action by or in respect of, or filing with, any Governmental Authority.
d.
Noncontravention.
The execution, delivery and performance by the Seller of this Agreement and the consummation by Seller and RRSF of the transactions contemplated hereby and thereby do not and will not contravene or conflict with the certificates or articles of incorporation or bylaws of the Seller or RRSF; contravene or conflict with or constitute a violation of any provision of any Law binding upon or applicable to the Seller or RRSF or any of their respective properties or assets; result in a violation or a breach of, or constitute a default or require any consent under or give rise to a right of termination, cancellation or acceleration of any right or obligation of RRSF or to a loss of any benefit to which RRSF is entitled under any provision of any note, bond, mortgage, indenture, lease, agreement, contract, obligation or other instrument to which RRSF is bound, or any license, franchise, permit or other similar authorization held by RRSF; or result in the creation or imposition of any Lien on any asset of RRSF, except for any Permitted Liens.
e.
Capitalization.
All outstanding shares of capital stock of RRSF are duly authorized, validly issued, fully paid, nonassessable and free from preemptive rights. Except as set forth in this Section 3.05, there are no outstanding shares of capital stock or other voting securities of or other ownership interests in RRSF; ) securities of RRSF convertible into or exchangeable for shares of capital stock or voting securities of or other ownership interests in RRSF; or options or other rights to acquire from RRSF, or any obligation of RRSF to issue, transfer or sell, any capital stock or voting securities of or other ownership interests in RRSF or securities convertible into or exchangeable for capital stock or voting securities of or other ownership interests in RRSF (the items in clauses (i), (ii) and (iii) being referred to collectively as the “Company Securities”). There are no outstanding obligations of RRSF to repurchase, redeem or otherwise acquire any Company Securities. RRSF does not have any Subsidiaries.
f.
Ownership of Shares.
Seller is the record and beneficial owner of the Shares, free and clear of any Lien, and will transfer and deliver to Buyer at the Closing valid title to the Shares, free and clear of any Lien.
g.
Permits; Compliance.
RRSF is in possession of all franchises, grants, authorizations, licenses, permits, easements, variances, exceptions, consents, certificates, approvals, clearances and orders of any Governmental Authority necessary for RRSF to operate its repair and manufacturing business as currently conducted, to own, lease and operate its properties and to carry on the Business (the “Company Permits”) and the use and operation by RRSF of its properties and the conduct of the Business comply with the requirements and conditions of all Company Permits.
h.
Financial Statements.
RRSF is newly formed and does not yet have consolidated financial statements of RRSF, (collectively, the “Financial Statements”).
i.
Books and Records.
The books of account, minute books and stock record books of RRSF are complete and correct in all material respects and have been maintained in accordance with reasonable and customary business practices. The minute books of RRSF contain records that are complete and correct in all material respects of all meetings of, and corporate action taken by (including all actions by unanimous written consent), the shareholders and directors of RRSF since inception. True and complete copies of all minute books and all stock record books of RRSF have heretofore been made available to Buyer.
j.
Absence of Certain Changes.
RRSF has conducted its business in the ordinary course consistent with past practices and there has not been:
i. any event, occurrence or development which has had a Company Material Adverse Effect;
ii. any declaration, setting aside or payment of any dividend or other distribution with respect to any shares of capital stock of RRSF, or any repurchase, redemption or other acquisition by RRSF of any outstanding shares of capital stock or other securities of, or other ownership interests in, RRSF;
iii. any amendment of any material term of any outstanding security of RRSF;
iv. any incurrence, assumption, amendment or guarantee by RRSF of any indebtedness for borrowed money, or any foreign currency, hedging, financial derivatives or similar transactions, other than in the ordinary course of business and consistent with past practices;
v. any creation or assumption by RRSF of any Lien, other than Permitted Liens, on any asset of RRSF;
vi. any making of any loan, advance or capital contribution to or investment in any Person by RRSF other than loans, advances, capital contributions or investments made in the ordinary course of business consistent with past practices or any amendment of the terms of any loan to executive officers or directors;
vii. any transaction or commitment made, or any contract or agreement entered into, by RRSF relating to its assets or the Business (including the acquisition or disposition of any assets), in either case, material to RRSF, other than transactions and commitments in the ordinary course of business consistent with past practices and those contemplated by this Agreement;
viii. any material change in any method of accounting or accounting practice by RRSF;
ix. any payment, discharge or satisfaction of any material claim, liability or obligation, except in the ordinary course of business or pursuant to the terms of any Material Contract;
x. any material modification to a Material Contract;
xi. except as required under applicable law or pursuant to existing agreements, any grant of any severance or termination pay to any director, officer or employee of RRSF, increase in compensation, bonus or other benefits payable under any severance or retirement or termination pay policies of RRSF, entering into of any employment, deferred compensation or other similar agreement (or any amendment to any such existing agreement) with any director, officer or employee of RRSF or adoption of any new Employee Plan or modification of any Employee Plan, in the case of each of clauses (i) through (iv), other than in the ordinary course of business consistent with past practices; or
xii. any disposal or lapse of any rights to the use of any Intellectual Property Right, which would have a Company Material Adverse Effect.
k.
No Undisclosed Material Liabilities.
There are no liabilities or obligations of RRSF of any kind, other than:
i. liabilities or obligations disclosed or provided for in the Balance Sheet or the notes thereto;
ii. liabilities or obligations incurred in the ordinary course of business since the Balance Sheet Date;
iii. liabilities or obligations under this Agreement; and
iv. other liabilities or obligations which in the aggregate would not have a Company Material Adverse Effect.
l.
Litigation.
As of the date of this Agreement, there is no judicial or administrative action, suit or proceeding pending, or to the Knowledge of Seller, threatened against RRSF or relating to the Business, any of RRSF’s properties or any of the officers or directors of such companies before any court or arbitrator or before or by any Governmental Authority that would, individually or in the aggregate, have a Company Material Adverse Effect. RRSF is not subject to any judgment, order or decree that would result in a Company Material Adverse Effect.
m.
Taxes.
RRSF has also separately filed all material Tax Returns that it was required to file for each taxable period. All such Tax Returns were timely filed, correct and complete in all material respects and were prepared in substantial compliance with all applicable laws and regulations. RRSF has paid all material Taxes shown or required to be shown on such separate Tax Returns.
n. There are no Liens for Taxes (other than Taxes not yet due and payable) upon any of the assets of RRSF.
o. RRSF has withheld and paid all employment, sales, use and other Taxes required to have been withheld and paid in connection with any amounts paid or owing to any employee, independent contractor, creditor or other third party.
p. There is no pending or any threatened dispute or claim concerning any material Tax liability of RRSF for any taxable period during which RRSF was a member of the Seller’s Affiliated Group.
q.
Employees.
RRSF does not nor has ever had any employees.
r.
Certain Business Practices. N
either RRSF nor any of its directors, officers employees or any other person authorized to act on behalf of RRSF has used any corporate funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity, made any unlawful payment to foreign or domestic government officials or employees or to foreign or domestic political parties or campaigns from corporate funds, violated any provision of the Foreign Corrupt Practices Act of 1977, as amended, or made any bribe, rebate, payoff, influence payment, kickback or other similar unlawful payment to any foreign or domestic government official or employee from corporate funds.
s.
Environmental Matters.
Except as to matters that would not have a Company Material Adverse Effect:
i. no complaint has been filed, no penalty has been assessed, and no third-party investigation, claim, suit, proceeding or review is pending or is threatened by any Governmental Authority or other Person against RRSF and, in each case, alleging or relating to any violation by RRSF of any Environmental Law;
ii. RRSF is in compliance with all Environmental Laws and has obtained and is in compliance with all permits, licenses, franchises, certificates, approvals and other similar authorizations of any Governmental Authority (collectively, “Environmental Permits”) required by Environmental Laws to conduct the Business.
t.
Compliance With Laws and Court Orders.
RRSF is in compliance with all, and is not under investigation with respect to applicable Laws.
u.
Employee Matters.
RRSF is in compliance in all material respects with all applicable Laws respecting employment and employment practices, terms, and conditions of employment, and wages and hours and is not engaged in any unfair labor practice.
v.
Title to Assets; Liens.
RRSF has good title to all the properties and assets reflected in the Balance Sheet and all assets purchased by RRSF since the Balance Sheet Date free and clear of all Liens (other than Permitted Liens). At the time of the Closing, the assets of RRSF, taken together with the rights and benefits to Buyer arising under the Related Agreements, shall be adequate in all material respects to allow Buyer at such time to conduct the Business substantially as it is currently being conducted.
w.
Real Property.
RRSF has leases on, but no title to, any real property. To RRSF’s knowledge, there is no structural defect in any of the leased Real Property or the improvements thereon.
x.
Material Contracts. RRSF
is not a party to or bound by any agreement or contract except as disclosed.
y. Each agreement, contract, plan, lease, arrangement or commitment required to be disclosed pursuant to this Section (collectively, “Material Contracts”) is a valid and binding agreement of RRSF and is in full force and effect, and none of RRSF or, to the Knowledge of Seller, any other party thereto is in default or breach in any respect under the terms of any such agreement, contract, plan, lease, arrangement or commitment.
z.
Insurance.
Seller has made available to Buyer copies of all insurance policies providing coverage in favor of RRSF or any of its properties, including “all risk” insurance policies (collectively, the “Insurance Policies”). There are no material claims by RRSF pending under any of the Insurance Policies as to which coverage has been questioned, denied or disputed by the underwriters of such policies or in respect of which such underwriters have reserved their rights. As of the date hereof, all Insurance Policies are in full force and effect, all premiums due thereon have been paid and RRSF is in compliance in all material respects with the terms and provisions of the Insurance Policies.
aa.
Intellectual Property.
No Company Intellectual Property Right is subject to any outstanding judgment, injunction, order, decree or agreement restricting the use thereof by RRSF or restricting the licensing thereof by RRSF to any Person.
bb. Except as expressly disclosed to Buyer, RRSF has the sole and exclusive right to use RRSF Intellectual Property Rights, and no consent of any third party is required for the use thereof by RRSF following Closing. To the
Knowledge of Seller, no claims have been asserted by any person challenging the
use of any Company Intellectual Property Rights, or challenging or questioning the validity or effectiveness of any such license or agreement. No additional Intellectual Property Rights other than RRSF Intellectual Property Rights are necessary or material to the conduct of the Business.
4.
Representations and Warranties of Buyer
Buyer hereby makes the following representations and warranties to the Seller as of the date hereof (except to the extent expressly relating to a specific date, in which event such representation or warranty shall be made as of such date), which shall be unaffected by any investigation heretofore or hereafter made.
a.
Corporate Existence and Power.
Buyer is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation and has all corporate powers required to carry on its business as now conducted.
b.
Corporate Authorization.
The execution, delivery and performance by Buyer of this Agreement and each Related Agreement to which it is a party and the consummation by Buyer of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate and shareholder action by Buyer. Buyer has full power and authority to execute and deliver this Agreement and to perform its obligations hereunder. This Agreement has been duly executed and delivered by Buyer and, assuming due and valid authorization, execution and delivery thereof by each Seller party thereto, this Agreement is a valid and binding obligation of Buyer, enforceable in accordance with its terms and conditions.
c.
Governmental Authorization.
The execution, delivery and performance by Buyer of this Agreement and each Related Agreement and the consummation by Buyer of the transactions contemplated hereby and thereby require no action by or in respect of, or filing with, any Governmental Authority.
d.
Noncontravention.
The execution, delivery and performance by Buyer of this Agreement and the consummation by Buyer of the transactions contemplated hereby do not and will not contravene or conflict with the articles of incorporation or bylaws of Buyer, assuming compliance with the matters referred to in Section 4.03, contravene or conflict with or constitute a violation of any provision of any Law binding upon or applicable to Buyer, result in a violation or a breach of, or constitute a default or require any consent under or give rise to a right of termination, cancellation or acceleration of any right or obligation of Buyer or to a loss of any benefit to which Buyer is entitled under any provision of any note, bond, mortgage, indenture, lease, agreement, contract, obligation or other instrument to which Buyer is bound, or any license, permit or other similar authorization held by Buyer.
e.
Litigation.
As of the date of this Agreement, there is no judicial or administrative action, suit or proceeding pending, or to the knowledge of Buyer, threatened against Buyer before any Governmental Authority which in any manner challenges or seeks to prevent, enjoin, alter or materially delay the transactions contemplated by this Agreement.
5.
Covenants of the Seller
The Seller agrees that:
a.
Conduct of RRSF.
Except as expressly contemplated by this Agreement or as otherwise consented to by Buyer in writing, during the period from the date hereof and continuing, the Seller shall cause RRSF to:
i. conduct its business in the usual, regular and ordinary course consistent with past practices;
ii. not mortgage, pledge, sell or dispose of any assets with a value of $3,000 or more in the aggregate, and not waive, release, grant, transfer or permit to lapse any Company rights of value in excess of $5,000 in the aggregate;
iii. comply in all material respects with all provisions of any Material Contracts to which RRSF is a party;
iv. not take any action that would result in the representation set forth in Section 3.10(k) being untrue;
v. not enter into any new or amended contract, agreement, side letter or memorandum of understanding with any unions representing employees of RRSF;
vi. not enter into any agreement or understanding with any
other Person outside of the ordinary course of business consistent with past practices involving expenditures in excess of $3,000 in the aggregate or involving terms of duration or commitments in excess of 3 months;
vii. not enter into any agreement or understanding with any other Person containing any exclusivity, non-competition or similar provisions that would materially restrict the ability of RRSF to compete;
viii. not adopt or propose any change in its organizational documents (including bylaws); and
ix. not merge or consolidate with any other Person.
b.
Access to Information; Confidentiality.
After the Closing, Seller will hold, and will use their best efforts to cause their respective officers, directors, employees, accountants, counsel, consultants, advisors and agents to hold, in confidence, unless compelled to disclose by judicial or administrative process or by other requirements of law, all confidential documents and information concerning RRSF, except to the extent that such information can be shown to have been previously known on a nonconfidential basis by either Seller, in the public domain through no fault of Seller or their Affiliates or later lawfully acquired by any Seller from sources other than those related to its prior ownership of RRSF. The obligation of Seller and their Affiliates to hold any such information in confidence shall be satisfied if they exercise the same care with respect to such information as they would take to preserve the confidentiality of their own similar information.
c. On and after the Closing Date, Seller will afford, promptly to Buyer and its agents reasonable access to its books of account, financial and other records (including accountant’s work papers), information, employees and auditors to the extent reasonably necessary for Buyer in connection with any audit, investigation, dispute or litigation (other than any dispute or litigation involving either of the Seller) relating to the Business;
provided
that any such access by Buyer shall be conducted during normal business hours and shall not unreasonably interfere with the conduct of the business of the Seller, Buyer shall bear all of the out-of-pocket costs and expenses (including reasonable attorneys’ fees, but excluding reimbursement of Seller for general overhead, salaries and employee benefits) reasonably incurred in connection with the foregoing.
d.
Notices of Certain Events.
From the date hereof, Seller shall promptly notify Buyer of any actions, suits, claims, investigations or proceedings commenced against RRSF or in respect of which RRSF has an indemnification obligation and as to which Seller has Knowledge that, if pending on the date of this Agreement, would have been required to have been disclosed.
6.
Covenants of Buyer
Buyer agrees that:
a.
Confidentiality.
Prior to the Closing Date and after any termination of this Agreement, Buyer and its Affiliates will hold, and will use their best efforts to cause their respective officers, directors, employees, accountants, counsel, consultants, advisors and agents to hold, in confidence all confidential documents and information concerning RRSF furnished to Buyer or its Affiliates in connection with the transaction contemplated by this Agreement.
b.
Trademarks; Tradenames.
Buyer shall not permit RRSF to use any of the marks or names of Seller that the parties agree shall belong to Seller after closing.
7.
Covenants of Buyer and the Seller
Buyer and the Seller agree that:
a.
Best Efforts; Further Assurances.
Subject to the terms and conditions of this Agreement, Buyer and the Seller will use their best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary or desirable under applicable laws and regulations to consummate the transactions contemplated by this Agreement. Seller and Buyer shall, and the Seller shall cause RRSF prior to the Closing, and Buyer shall cause RRSF after the Closing, to execute and deliver such other documents, certificates, agreements and other writings and to take such other actions as may be necessary or desirable in order to consummate or implement expeditiously the transactions contemplated by this Agreement.
b.
Public Announcements.
The parties agree to consult with each other before issuing any press release or making any public statement with respect to this Agreement or the transactions contemplated hereby and, except for any press releases and public announcements the making of which may be required by applicable law or any listing agreement with any national securities exchange, will not issue any such press release or make any such public statement prior to such consultation.
c.
Operational Agreement.
Both parties agree that within 90 days of closing an operational partnership agreement shall be in place, inclusive of employment agreements for principal officers of the Seller. Buyer and Seller have to date negotiated most of the terms of the agreement and will use their best faith efforts to complete and ratify said agreement. In the event of a failure to complete an agreement Seller retains the right to purchase the shares sold to the Buyer for an equal amount of consideration expended by the Buyer.
8.
Employee Benefits
a.
Employee Benefits.
Nothing herein shall be construed to require RRSF or Buyer to continue after Closing the employment of any Company employee or to otherwise interfere with RRSF’s right to terminate any such employees at any time after Closing.
9.
Conditions to Closing
a.
Conditions to Obligations of Buyer and the Seller.
The obligations of Buyer and the Seller to consummate the Closing are subject to the satisfaction of the following conditions:
i. no provision of any Law shall prohibit the consummation of the Closing;
ii. there shall not be in effect any Law enacted, enforced, promulgated, issued or deemed applicable to the transactions contemplated hereby of any Governmental Authority that makes illegal or otherwise materially restrains or prohibits the consummation of the transactions contemplated hereby.
b.
Conditions to Obligation of Buyer.
The obligation of Buyer to consummate the Closing is subject to the satisfaction of the following further conditions:
i. the Seller shall have performed or complied with in all material respects all of the covenants and agreements required to be performed by it on or prior to the Closing Date under this Agreement, and the representations and warranties of the Seller set forth in this Agreement shall be true at and as of the Closing Date as if made at and as of such time (except as to any representation or warranty which speaks as of a specific date, which must be true as of such date;
ii. there shall not have occurred any Company Material Adverse Effect after the date hereof which is continuing on the Closing Date;
iii. Buyer shall have received all documents it may reasonably request relating to the existence of the Seller and the authority of the Seller for this Agreement, all in form and substance reasonably satisfactory to Buyer.
c.
Conditions to Obligation of the Seller.
The obligation of the Seller to consummate the Closing is subject to satisfaction of the following further conditions:
i. Buyer shall have performed or complied with in all material respects all of the covenants and agreements required to be performed by it on or prior to the Closing Date under this Agreement, and the representations and warranties of Buyer set forth in this Agreement shall be true at and as of the Closing Date as if made at and as of such time (except as to any representation or warranty which speaks as of a specific date, which must be true as of such date); and
ii. the Seller shall have received all documents it may reasonably request relating to the existence of Buyer and the authority of Buyer for this Agreement, all in form and substance reasonably satisfactory to the Seller.
10.
Survival; Indemnification
a.
Survival.
Except as specifically set forth below, the representations and warranties of the parties hereto contained in this Agreement or in any certificate or other writing delivered pursuant hereto or in connection herewith shall survive the Closing until the first anniversary of the Closing Date. The covenants and agreements of the parties hereto contained in this Agreement or in any certificate or other writing delivered pursuant hereto or in connection herewith shall survive the Closing indefinitely or for the shorter period explicitly specified therein, except that for such covenants and agreements that survive for such shorter period, breaches thereof shall survive indefinitely or until the latest date permitted by law. Notwithstanding the preceding sentences, any breach of representation, warranty, covenant or agreement in respect of which indemnity may be sought under this Agreement shall survive the time at which it would otherwise terminate pursuant to the preceding sentences, if notice of the inaccuracy or breach thereof giving rise to such right of indemnity shall have been given to the party against whom such indemnity may be sought prior to such time.
b.
Indemnification.
Effective at and after the Closing, Seller hereby indemnifies Buyer and its Affiliates against and agrees to hold each of them harmless from any and all damage, loss and expense (including reasonable expenses of investigation and reasonable attorneys’ fees and expenses and any fines or penalties imposed) (“Damages”, which shall not include amounts subject to indemnification by the Seller) actually suffered by Buyer or any of its Affiliates arising out of any misrepresentation or breach of representation or warranty (each such misrepresentation and breach, a “Warranty Breach”) or breach of covenant or agreement made or to be performed by the Seller pursuant to this Agreement.
c. Effective at and after the Closing, Buyer hereby indemnifies Seller and its Affiliates against and agrees to hold each of them harmless from any and all Damages actually suffered by Seller or any of its Affiliates arising out of any Warranty Breach or breach of covenant or agreement made or to be performed by Buyer pursuant to this Agreement.
d.
Procedures.
The party seeking indemnification (the “Indemnified Party”) agrees to give prompt notice to the party against whom indemnity is sought (the “Indemnifying Party”) of the assertion of any claim, or the commencement of any suit, action or proceeding (“Claim”) in respect of which indemnity may be sought under such Section and will provide the Indemnifying Party such information with respect thereto that the Indemnifying Party may reasonably request. The failure to so notify the Indemnifying Party shall not relieve the Indemnifying Party of its obligations hereunder, except to the extent such failure shall have adversely affected the Indemnifying Party.
e. The Indemnifying Party shall be entitled to participate in the defense of any Claim asserted by any third party (“Third Party Claim”) and, subject to the limitations set forth in this Section, shall be entitled to assume the control of and appoint lead counsel for such defense, in each case at its expense.
f. If the Indemnifying Party shall assume the control of the defense of any Third Party Claim, the Indemnifying Party shall obtain the prior written consent of the Indemnified Party (which shall not be unreasonably withheld, delayed or conditioned) before entering into any settlement of such Third Party Claim, but only if the settlement does not release the Indemnified Party from all liabilities and obligations with respect to such Third Party Claim or if the settlement imposes injunctive or other equitable relief against the Indemnified Party, and the Indemnified Party shall be entitled to participate in the defense of such Third Party Claim and to employ separate counsel of its choice for such purpose. The fees and expenses of such separate counsel shall be paid by the Indemnified Party. The Indemnifying Party shall have no indemnification obligations with respect to any Third Party Claim that shall be settled by the Indemnified Party without the prior written consent of the Indemnifying Party, which consent shall not be unreasonably withheld, delayed or conditioned.
g. Each party shall cooperate, and cause their respective Affiliates to cooperate, in the defense or prosecution of any Third Party Claim and shall furnish or cause to be furnished such records, information and testimony, and attend such conferences, discovery proceedings, hearings, trials or appeals, as may be reasonably requested in connection therewith. The Indemnified Party shall keep the Indemnifying Party fully informed of the defense of any Third Party Claim conducted by such Indemnified Party.
h. Each Indemnified Party shall use reasonable efforts to collect any amounts available under insurance coverage, or from any other Person alleged to be responsible for any Damages payable.
i.
Knowledge.
Notwithstanding anything in this Agreement to the contrary, the rights of the parties to indemnification based on the representations and warranties set forth in this Agreement shall not be affected by any investigation conducted with respect to, or any knowledge acquired (or capable of being acquired) about the accuracy or inaccuracy of or compliance with, any such representation or warranty.
11.
Termination
a.
Grounds for Termination.
This Agreement may be terminated at any time prior to the Closing:
i. by mutual written agreement of Seller and Buyer;
ii. by either Seller or Buyer if consummation of the transactions contemplated hereby would violate any nonappealable final order, decree or judgment of any Governmental Authority having competent jurisdiction; or
iii. by Buyer if Seller shall have filed a petition for relief under the Bankruptcy Code prior to the Closing or an involuntary petition for relief under the Bankruptcy Code is filed against Seller prior to the Closing by any party other than (x) Buyer or its Affiliates or (y) any Person acting at the direction of or in concert with Buyer or its Affiliates and such petition is not dismissed prior to the Closing.
b. The party desiring to terminate this Agreement shall give notice of such termination to the other party.
c.
Effect of Termination.
If this Agreement is terminated, such termination shall be without liability of any party (or any stockholder, director, officer, employee, agent, consultant or representative of such party) to any other party to this Agreement; provided that if such termination shall result from either party’s willful failure to fulfill a condition to the performance of the obligations of the other party, failure to perform a covenant set forth in this Agreement or breach of any representation or warranty or agreement contained herein, such failing or breaching party shall be fully liable for any and all Damages incurred or suffered by the other party as a result of such failure or breach.
12.
Miscellaneous
a.
Notices.
All notices and other communications hereunder shall be in writing (including facsimile transmission, with confirmation of receipt) and shall be deemed to have been duly given when delivered personally or by facsimile, when received by the addressee, if sent by Express Mail, Federal Express or other express delivery service (receipt requested), or three business days after being sent by registered or certified mail, return receipt requested, in each case to the other party at the following addresses (or to such other address for a party as shall be specified by like notice, provided that notices of a change of address shall be effective only upon receipt thereof)
provided
that any communication by facsimile shall be confirmed by a copy sent via overnight mail to the physical address of the recipient set forth above. All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5 p.m. in the place of receipt and such day is a Business Day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding Business Day in the place of receipt.
b.
Amendments and Waivers.
Any provision of this Agreement may be amended or waived only if such amendment or waiver is in writing and is signed, in the case of an amendment, by each party to this Agreement, or in the case of a waiver, by the party against whom the waiver is to be effective.
c. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.
d.
Expenses.
Except as otherwise provided herein, all costs and expenses incurred in connection with this Agreement shall be paid by the party incurring such cost or expense.
e.
Successors and Assigns.
The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided that no party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the consent of each other party hereto.
f.
Governing Law.
This Agreement shall be governed by and construed in accordance with the laws and courts of the State of Nevada, without regard to the conflicts of law rules of such country.
g.
Jurisdiction.
The parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in the State of Nevada. In any such suit, action or proceeding each party irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.
h.
Counterparts; Effectiveness; Third-Party Beneficiaries.
This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. No provision of this Agreement is intended to confer any rights, benefits, remedies, obligations or liabilities hereunder upon any Person other than the parties hereto and their respective successors and assigns.
i.
Entire Agreement.
This Agreement constitutes the entire agreement between the parties with respect to the subject matter of this Agreement and supersedes all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter of this Agreement.
j.
Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic and legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such a determination, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent
of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.
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By:
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SIGNATURE ON ORIGINAL
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Name: ROBERT COLERIDGE
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Title: President
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INDIE GROWERS ASSOCIATION
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INC.
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By:
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SIGNATURE ON ORIGINAL
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Name: RICARDO ESPARZA
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Title: Unitholder
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River Ridge Sunshine Farms LLC
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SIGNATURE ON ORIGINAL
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By:
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Name: RICARDO ESPARZA
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Title: Authorized Signatory
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RIVER RIDGE SUNSHINE
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FARMS LLC
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