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): December 29, 2017 (December 27, 2017)
GREEN SPIRIT INDUSTRIES INC.
(Exact name of registrant as specified in its charter)
| Nevada | 333-141929 | 14-1982491 | ||
| (State or other jurisdiction of incorporation) |
(Commission
|
(I.R.S.
Employer
|
Cond.
Madrid Suite 304, 1760 Loiza Street
San Juan, Puerto Rico 00911
(Address of principal executive offices) (zip code)
(787) 641-8447
(Registrant’s telephone number, including area code)
(Former name or former address, if changed since last report)
Copy to:
Darrin M. Ocasio, Esq.
Sichenzia Ross Ference Kesner LLP
1185 Avenue of the Americas, 37th Floor
New York, New York 10036
Phone: (212) 930-9700
Fax: (212) 930-9725
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.
On December 28, 2017, Green Spirit Industries Inc., a Nevada corporation (the “ Company ”) entered into a subscription agreement (the “ Subscription Agreement ”) with selected accredited investors (the “ Investors ”). Pursuant to the terms of the Subscription Agreement, the Company offered in a private placement (the “ Offering ”) up to Five Million Dollars ($5,000,000) of shares of the Company’s common stock, par value $0.001 per share (the “ Shares ”).
The Offering closed on December 28, 2017. The Company issued a total of 7,075,293 Shares for total gross proceeds of $5,000,000.
The foregoing description of the Subscription Agreement does not purport to be complete and is subject to, and qualified in its entirety by reference to the completed text of the Subscription Agreement, filed as Exhibit 10.1 hereto and incorporated herein by reference.
In connection with the foregoing issuances, the Company relied upon the exemption from securities registration provided by Section 4(a)(2) under the Securities Act of 1933, as amended (the “Securities Act”) for transactions not involving a public offering.
Item 2.01 Completion of Acquisition or Disposition of Assets.
On December 27, 2017, the Company’s wholly-owned operating subsidiary, Project 1493, LLC (“ 1493 ”), entered into a final purchasing agreement (the “ Agreement ”) with Healing Herbs Corporation, a corporation organized under the laws of the Commonwealth of Puerto Rico (“ HHC ”), pursuant to which 1493 acquired all of the legal rights, permits, licenses, leading contracts and assets pertaining to a medical marijuana dispensary (the “ Healing Herbs Dispensary ”) in exchange for $128,000 cash consideration. The Healing Herbs Dispensary was pre-qualified by the Department of Health of Puerto Rico (the “ DHPR ”) on October 24, 2016, and it will not be fully licensed until the DHPR issued the requisite operating permit. The Agreement contains customary representations and considerations of each of the parties.
In connection with the Agreement, 1493, HHC and the landlord of the location of the Healing Herbs Dispensary (the “ Landlord ”), entered into an assignment of lease on December 27, 2017 (the “ Lease Assignment ”), which transfers and/or assigns the rights under the lease agreement for the location of the Healing Herbs Dispensary to 1493. HHC entered into such lease agreement, dated October 6, 2016, with Landlord to lease approximately 1,150 square feet. The lease is for a term of three (3) years, commencing on November 1, 2016, with an option to renew as well as the first option to purchase the property should Landlord choose to sell it. The lease payments for such location will be $1,600 per month, with an increase of 5% every two years. In addition, the tenant must maintain public liability insurance which shall include the Landlord for up to $1,000,000.
The foregoing descriptions of the Agreement and the Lease Assignment do not purport to be complete and are subject to, and qualified in their entirety by reference to the completed text of the Agreement and Lease Assignment, filed as Exhibits 10.2 and 10.3, respectively, hereto and incorporated herein by reference.
Item 3.02 Unregistered Sales of Equity Securities.
Reference is made to the disclosure made under Item 1.01 which is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
The exhibits listed in the following Exhibit Index are filed as part of this Current Report on Form 8-K.
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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.
| GREEN SPIRIT INDUSTRIES INC. | ||
| Dated: December 29, 2017 | By: | /s/ Thomas Gingerich |
| Name: | Thomas Gingerich | |
| Title: | Chief Financial Officer | |
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SUBSCRIPTION AGREEMENT
This Subscription Agreement (this “ Agreement ”) is being delivered to the purchaser identified on the signature page to this Agreement (the “ Subscriber ”) in connection with its investment in Green Spirit Industries Inc., a Nevada corporation (the “ Company ”). The Company is conducting a private placement (the “ Offering ”) of up to Five Million Dollars ($5,000,000) (the “ Maximum Offering ”) of the Company’s shares of common stock, par value $0.001 per share (each, a “ Share ” and collectively, the “ Securities ”) at a purchase price of $0.71 per Share.
The subscription amount for the Securities will be held in escrow for the benefit of Subscriber by Sichenzia Ross Ference Kesner LLP (the “ Escrow Agent ”) until satisfaction of all the conditions to the closing have been met. The Initial Closing (as defined herein) of this Offering shall be subject to subscriptions being received from qualified Subscribers and accepted by the Company. Upon acceptance by the Company after the date hereof of subscriptions deemed sufficient by the Company, it shall have the right at any time thereafter, but prior to the Termination Date (as defined below), to effect an initial closing with respect to this Offering (the “ Initial Closing ”). Thereafter, the Company shall continue to accept, and continue to have closings (together with the Initial Closing, each a “ Closing ”) for, additional subscriptions for Securities from investors from time to time until the earlier of (i) the date upon which subscriptions for the Maximum Offering offered hereunder have been accepted, (ii) December 31, 2017, or (iii) the date upon which the Company elects to terminate the Offering (the “ Termination Date ”). The Offering will be made on a “reasonable efforts” basis for up to the Maximum Offering.
The Securities will not be listed on any securities exchange. The Company’s Securities is currently traded on the OTCPink under the symbol “GSRX.”
1 . SUBSCRIPTION AND PURCHASE PRICE
(a) Subscription . Subject to the conditions set forth in Section 2 hereof, the Subscriber hereby subscribes for and agrees to purchase the number of Securities indicated on the signature page hereof on the terms and conditions described herein.
(b) Purchase of Securities . The Subscriber understands and acknowledges that the purchase price to be remitted to the Company in exchange for the Securities shall be as set forth in the preamble to this Agreement, for an aggregate purchase price as set forth on the signature pages hereof (the “ Aggregate Purchase Price ”). The Subscriber’s delivery of this Agreement to the Company shall be accompanied by payment for the Securities subscribed for hereunder, payable in United States Dollars, by wire transfer of immediately available funds delivered contemporaneously with the Subscriber’s delivery of this Agreement to the Company in accordance with the Escrow Agreement and wire instructions attached hereto as Exhibit A . The Subscriber understands and agrees that, subject to Section 2 and applicable laws, by executing this Agreement, it is entering into a binding agreement.
2. Acceptance, Offering Term and Closing Procedures
(a) Acceptance or Rejection . The obligation of the Subscriber to purchase the Securities shall be irrevocable, and the Subscriber shall be legally bound to purchase the Securities subject to the terms set forth in this Agreement. The Subscriber understands and agrees that the Company reserves the right to reject this subscription for Securities in whole or part in any order at any time prior to the Closing for any reason, notwithstanding the Subscriber’s prior receipt of notice of acceptance of the Subscriber’s subscription. In the event of rejection of this subscription by the Company in accordance with this Section 2, or if the sale of the Securities is not consummated by the Company for any reason or no reason, this Agreement and any other agreement entered into between the Subscriber and the Company relating to this subscription shall thereafter have no force or effect, and the Company shall promptly return or cause to be returned to the Subscriber the purchase price remitted to the Company, without interest thereon or deduction therefrom.
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(b) Closing . The closing of the purchase and sale of the Securities hereunder (the “ Closing ”) shall take place at the offices of Sichenzia Ross Ference Kesner LLP, 1185 Avenue of the Americas, 37 th Floor., New York, NY 10036 or such other place as determined by the Company. The Closing shall take place on a Business Day promptly following the satisfaction of the conditions set forth in Section 6 below, as determined by the Company (the “ Closing Date ”). “ Business Day ” shall mean from the hours of 9:00 a.m. (Eastern Time) through 5:00 p.m. (Eastern Time) of a day other than a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required to be closed. The Securities purchased by the Subscriber will be delivered by the Company promptly following the Closing.
(c) Following Acceptance or Rejection . The Subscriber acknowledges and agrees that this Agreement and any other documents delivered in connection herewith will be held by the Company. In the event that this Agreement is not accepted by the Company for whatever reason, which the Company expressly reserves the right to do, this Agreement, the Aggregate Purchase Price received (without interest thereon) and any other documents delivered in connection herewith will be returned to the Subscriber at the address of the Subscriber as set forth in this Agreement. If this Agreement is accepted by the Company, the Company is entitled to treat the Aggregate Purchase Price received as an interest free loan to the Company until such time as the Subscription is accepted.
3. THE SUBSCRIBER’s Representations, Warranties AND cOVENANTS
The Subscriber hereby acknowledges, agrees with and represents, warrants and covenants to the Company, as follows:
(a) The Subscriber has full power and authority to enter into this Agreement, the execution and delivery of which has been duly authorized, if applicable, and this Agreement constitutes a valid and legally binding obligation of the Subscriber.
(b) The Subscriber acknowledges its understanding that the Offering and sale of the Securities is intended to be exempt from registration under the Securities Act of 1933, as amended (the “ Securities Act ”), by virtue of Section 4(2) of the Securities Act and the provisions of Regulation D promulgated thereunder (“ Regulation D ”). In furtherance thereof, the Subscriber represents and warrants to the Company and its affiliates as follows:
(i) The Subscriber realizes that the basis for the exemption from registration may not be available if, notwithstanding the Subscriber’s representations contained herein, the Subscriber is merely acquiring the Securities for a fixed or determinable period in the future, or for a market rise, or for sale if the market does not rise. The Subscriber does not have any such intention.
(ii) The Subscriber realizes that the basis for exemption would not be available if the Offering is part of a plan or scheme to evade registration provisions of the Securities Act or any applicable state or federal securities laws.
(iii) The Subscriber is acquiring the Securities solely for the Subscriber’s own beneficial account, for investment purposes, and not with a view towards, or resale in connection with, any distribution of the Securities. If other than an individual, the Subscriber also represents it has not been organized solely for the purpose of acquiring the Securities.
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(iv) The Subscriber has the financial ability to bear the economic risk of the Subscriber’s investment, has adequate means for providing for its current needs and contingencies, and has no need for liquidity with respect to an investment in the Company.
(v) The Subscriber and the Subscriber’s attorney, accountant, purchaser representative and/or tax advisor, if any (collectively, the “ Advisors ”) has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of a prospective investment in the Securities. The Subscriber has not authorized any person or entity to act as its Purchaser Representative (as that term is defined in Regulation D of the General Rules and Regulations under the Securities Act) in connection with the Offering.
(vi) The Subscriber (together with its Advisors, if any) has received all documents requested by the Subscriber, if any, has carefully reviewed them and understands the information contained therein, prior to the execution of this Agreement.
(c) The Subscriber is not relying on the Company or any of its employees, agents, sub-agents or advisors with respect to the legal, tax, economic and related considerations involved in this investment. The Subscriber has relied on the advice of, or has consulted with, only its Advisors. Each Advisor, if any, has disclosed to the Subscriber in writing (a copy of which is annexed to this Agreement) the specific details of any and all past, present or future relationships, actual or contemplated, between the Advisor and the Company or any affiliate or sub-agent thereof.
(d) The Subscriber has carefully considered the potential risks relating to the Company and a purchase of the Securities, and fully understands that the Securities are a speculative investment that involves a high degree of risk of loss of the Subscriber’s entire investment. Among other things, the Subscriber has carefully considered each of the risks described under the heading “Risk Factors” in the Company’s SEC Filings (as defined in Section 4(f) below), and those set forth in Exhibit C, which risk factors are incorporated herein by reference.
(e) The Subscriber will not sell or otherwise transfer any Securities without registration under the Securities Act or an exemption therefrom, and fully understands and agrees that the Subscriber must bear the economic risk of its purchase because, among other reasons, the Securities have not been registered under the Securities Act or under the securities laws of any state and, therefore, cannot be resold, pledged, assigned or otherwise disposed of unless they are subsequently registered under the Securities Act and under the applicable securities laws of such states, or an exemption from such registration is available. In particular, the Subscriber is aware that the Securities are “restricted securities,” as such term is defined in Rule 144 promulgated under the Securities Act (“ Rule 144 ”), and they may not be sold pursuant to Rule 144 unless all of the conditions of Rule 144 are met. The Subscriber also understands that the Company is under no obligation to register the Securities on behalf of the Subscriber or to assist the Subscriber in complying with any exemption from registration under the Securities Act or applicable state securities laws. The Subscriber understands that any sales or transfers of the Securities are further restricted by state securities laws and the provisions of this Agreement.
(f) No oral or written representations or warranties have been made, or information furnished, to the Subscriber or its Advisors, if any, by the Company or any of its officers, employees, agents, sub-agents, affiliates, advisors or subsidiaries in connection with the Offering, other than any representations of the Company contained herein, and in subscribing for the Securities, the Subscriber is not relying upon any representations other than those contained herein.
(g) The Subscriber’s overall commitment to investments that are not readily marketable is not disproportionate to the Subscriber’s net worth, and an investment in the Securities will not cause such overall commitment to become excessive.
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(h) The Subscriber understands and agrees that the certificates for the Securities shall bear substantially the following legend until (i) such Securities shall have been registered under the Securities Act and effectively disposed of in accordance with a registration statement that has been declared effective or (ii) in the opinion of counsel for the Company, such Securities may be sold without registration under the Securities Act, as well as any applicable “blue sky” or state securities laws:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS. SUCH SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES AND MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FILED BY THE ISSUER WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION COVERING SUCH SECURITIES UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH REGISTRATION IS NOT REQUIRED.
(i) Neither the SEC nor any state securities commission has approved the Securities or passed upon or endorsed the merits of the Offering. There is no government or other insurance covering any of the Securities.
(j) The Subscriber and its Advisors, if any, have had a reasonable opportunity to ask questions of and receive answers from a person or persons acting on behalf of the Company concerning the Offering and the business, financial condition, results of operations and prospects of the Company, and all such questions have been answered to the full satisfaction of the Subscriber and its Advisors, if any.
(k) The Subscriber is unaware of, is in no way relying on, and did not become aware of, the Offering through or as a result of, any form of general solicitation or general advertising, including, without limitation, any article, notice, advertisement or other communication published in any newspaper, magazine or similar media or broadcast over television or radio, or electronic mail over the Internet, in connection with the Offering and is not subscribing for Securities and did not become aware of the Offering through or as a result of any seminar or meeting to which the Subscriber was invited by, or any solicitation of a subscription by, a person not previously known to the Subscriber in connection with investments in securities generally.
(l) The Subscriber has taken no action that would give rise to any claim by any person for brokerage commissions, finders’ fees or the like relating to this Agreement or the transactions contemplated hereby.
(m) The Subscriber acknowledges that any estimates or forward-looking statements or projections furnished by the Company to the Subscriber were prepared by the management of the Company in good faith, but that the attainment of any such projections, estimates or forward-looking statements cannot be guaranteed by the Company or its management and should not be relied upon.
(n) (For ERISA plans only) The fiduciary of the ERISA plan (the “ Plan ”) represents that such fiduciary has been informed of and understands the Company’s investment objectives, policies and strategies, and that the decision to invest “plan assets” (as such term is defined in ERISA) in the Company is consistent with the provisions of ERISA that require diversification of plan assets and impose other fiduciary responsibilities. The Subscriber or Plan fiduciary (i) is responsible for the decision to invest in the Company; (ii) is independent of the Company and any of its affiliates; (iii) is qualified to make such investment decision; and (iv) in making such decision, the Subscriber or Plan fiduciary has not relied primarily on any advice or recommendation of the Company or any of its affiliates.
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(o) This Agreement is not enforceable by the Subscriber unless it has been accepted by the Company, and the Subscriber acknowledges and agrees that the Company reserves the right to reject any subscription for any reason.
(p) The Subscriber will indemnify and hold harmless the Company and, where applicable, its directors, officers, employees, agents, advisors, affiliates and shareholders, and each other person, if any, who controls any of the foregoing from and against any and all loss, liability, claim, damage and expense whatsoever (including, but not limited to, any and all fees, costs and expenses whatsoever reasonably incurred in investigating, preparing or defending against any claim, lawsuit, administrative proceeding or investigation whether commenced or threatened) (a “ Loss ”) arising out of or based upon any representation or warranty of the Subscriber contained herein or in any document furnished by the Subscriber to the Company in connection herewith being untrue in any material respect or any breach or failure by the Subscriber to comply with any covenant or agreement made by the Subscriber herein or therein; provided , however , that the Subscriber shall not be liable for any Loss that in the aggregate exceeds the Subscriber’s Aggregate Purchase Price tendered hereunder.
(q) The Subscriber is, and on each date on which the Subscriber continues to own restricted securities from the Offering will be, an “Accredited Investor” as defined in Rule 501(a) under the Securities Act. In general, an “Accredited Investor” is deemed to be an institution with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 (excluding the value of their primary residence) or annual income exceeding $200,000 or $300,000 jointly with his or her spouse.
(r) The Subscriber has reviewed, or had an opportunity to review, all of the SEC Filings.
(s) The Subscriber acknowledges receipt and careful review of all documents furnished in connection with this transaction by the Company (collectively, the “Offering Documents”) and has been furnished by the Company during the course of this transaction with all information regarding the Company which the Subscriber has requested or desires to know; and the Subscriber has been afforded the opportunity to ask questions of and receive answers from duly authorized officers or other representatives of the Company concerning the terms and conditions of the Offering, and any additional information which the Subscriber has requested.
(t) The Subscriber acknowledges that if the Subscriber is a Registered Representative of a Financial Industry Regulatory Authority, Inc. (“FINRA”) member firm, the Subscriber must give such firm the notice required by the FINRA’s Conduct Rules, receipt of which must be acknowledged by such firm on the signature page hereof.
(u) The Subscriber hereby acknowledges that neither the Company nor any persons associated with the Company who may provide assistance or advice in connection with the Offering (other than the placement agent, if one is engaged by the Company) are or are expected to be members or associated persons of members of the FINRA or registered broker-dealers under any federal or state securities laws. This Offering is made directly by the Company.
(v) The Subscriber hereby represents that, except as expressly set forth in the Offering Documents, no representations or warranties have been made to the Subscriber by the Company or any agent, employee or affiliate of the Company and, in entering into this transaction, the Subscriber is not relying on any information other than that contained in the Offering Documents and the results of independent investigation by the Subscriber.
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(w) All information provided by the Subscriber in the Investor Questionnaire attached hereto is true and accurate in all respects, and the Subscriber acknowledges that the Company will be relying on such information to its possible detriment in deciding whether the Company can sell these securities to the Subscriber without giving rise to the loss of the exemption from registration under applicable securities laws.
4. The Company’s Representations, Warranties and Covenants
The Company hereby acknowledges, agrees with and represents, warrants and covenants to the Subscriber, as follows:
(a) The Company has the corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder. This Agreement has been duly authorized, executed and delivered by the Company and is valid, binding and enforceable against the Company in accordance with its terms.
(b) The authorized and outstanding capital stock of the Company is set forth in the Company’s SEC filings, and except as set forth therein, there are no options, warrants, or rights to subscribe to, securities, rights, understandings or obligations convertible into or exchangeable for or giving any right to subscribe for any shares of capital stock or other equity interest of the Company or any of the Subsidiaries. The issued and outstanding capital of the Company following close of the Offering is as set forth on Exhibit B attached hereto. In addition to the securities listed on Exhibit B , the Company has 1,000 shares of Series A Preferred Stock currently issued in outstanding. The shares of Series A Preferred Stock are not convertible into shares of common stock.
(c) The only officer, director, employee and consultant stock option or stock incentive plan or similar plan currently in effect or contemplated by the Company is described in the Company’s SEC filings.
(d) The Securities to be issued to the Subscriber pursuant to this Agreement, when issued and delivered in accordance with the terms of this Agreement, will be duly and validly issued and will be fully paid and non-assessable.
(e) Neither the execution and delivery nor the performance of this Agreement by the Company will conflict with the Company’s organizational materials, as amended to date, or result in a breach of any terms or provisions of, or constitute a default under, any material contract, agreement or instrument to which the Company is a party or by which the Company is bound.
(f) The Company is subject to, and in full compliance with, the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”). The Company has made available to each Subscriber through the EDGAR system true and complete copies of each of the Company’s Quarterly Reports on Form 10-Q, Annual Reports on Form 10-K and Current Reports on Form 8-K (collectively, the “ SEC Filings ”), and all such SEC Filings are incorporated herein by reference. The SEC Filings, when they were filed with the SEC (or, if any amendment with respect to any such document was filed, when such amendment was filed), complied in all material respects with the applicable requirements of the Exchange Act and the rules and regulations thereunder and did not, as of such date, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. All reports and statements required to be filed by the Company under the Securities Act and the Exchange Act have been filed, together with all exhibits required to be filed therewith. The Company and each of its direct and indirect subsidiaries, if any (collectively, the “ Subsidiaries ”), are engaged in all material respects only in the business described in the SEC Filings, and the SEC Filings contain a complete and accurate description in all material respects of the business of the Company and the Subsidiaries.
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(g) The Company acknowledges and agrees that the Subscriber is acting solely in the capacity of an arm’s length purchaser with respect to the Securities and the transactions contemplated hereby. The Company further acknowledges that the Subscriber is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement and the transactions contemplated hereby and any advice given by the Subscriber or any of its representatives or agents in connection with this Agreement and the transactions contemplated hereby is merely incidental to the Subscriber’s purchase of the Securities. The Company further represents to the Subscriber that the Company’s decision to enter into this Agreement has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.
(h) The Company will indemnify and hold harmless the Subscriber and, where applicable, its directors, officers, employees, agents, advisors and shareholders, from and against any and all Loss arising out of or based upon any representation or warranty of the Company contained herein or in any document furnished by the Company to the Subscriber in connection herewith being untrue in any material respect or any breach or failure by the Company to comply with any covenant or agreement made by the Company to the Subscriber in connection therewith; provided , however , that the Company’s liability shall not exceed the Subscriber’s Aggregate Purchase Price tendered hereunder.
5. Use of Proceeds
The Company anticipates using the gross proceeds from the Offering for general corporate purposes including growth initiatives and capital expenditures.
6. CONDITIONS TO ACCEPTANCE OF SUBSCRIPTION
The Company’s right to accept the subscription of the Subscriber is conditioned upon satisfaction of the following conditions precedent on or before the date the Company accepts such subscription:
(a) As of the Closing, no legal action, suit or proceeding shall be pending that seeks to restrain or prohibit the transactions contemplated by this Agreement.
(b) The representations and warranties of the Subscriber contained in this Agreement shall have been true and correct in all material respects on the date of this Agreement and shall be true and correct as of the Closing as if made on the Closing Date.
7. MISCELLANEOUS PROVISIONS
(a) All parties hereto have been represented by counsel, and no inference shall be drawn in favor of or against any party by virtue of the fact that such party’s counsel was or was not the principal draftsman of this Agreement.
(b) Each of the parties hereto shall be responsible to pay the costs and expenses of its own legal counsel in connection with the preparation and review of this Agreement and related documentation.
(c) Neither this Agreement, nor any provisions hereof, shall be waived, modified, discharged or terminated except by an instrument in writing signed by the party against whom any waiver, modification, discharge or termination is sought.
(d) The representations, warranties and agreement of the Subscriber and the Company made in this Agreement shall survive the execution and delivery of this Agreement and the delivery of the Securities.
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(e) Any party may send any notice, request, demand, claim or other communication hereunder to the Subscriber at the address set forth on the signature page of this Agreement or to the Company at its primary office (including personal delivery, expedited courier, messenger service, fax, ordinary mail or electronic mail), but no such notice, request, demand, claim or other communication will be deemed to have been duly given unless and until it actually is received by the intended recipient. Any party may change the address to which notices, requests, demands, claims and other communications hereunder are to be delivered by giving the other parties written notice in the manner herein set forth.
(f) Except as otherwise provided herein, this Agreement shall be binding upon, and inure to the benefit of, the parties to this Agreement and their heirs, executors, administrators, successors, legal representatives and assigns. If the Subscriber is more than one person or entity, the obligation of the Subscriber shall be joint and several and the agreements, representations, warranties and acknowledgments contained herein shall be deemed to be made by, and be binding upon, each such person or entity and its heirs, executors, administrators, successors, legal representatives and assigns. This Agreement sets forth the entire agreement and understanding between the parties as to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings of any and every nature among them.
(g) This Agreement is not transferable or assignable by the Subscriber.
(h) This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to conflicts of law principles.
(i) The Company and the Subscriber hereby agree that any dispute that may arise between them arising out of or in connection with this Agreement shall be adjudicated before a court located in the City of New York, Borough of Manhattan, and they hereby submit to the exclusive jurisdiction of the federal and state courts of the State of New York located in the City of New York, Borough of Manhattan with respect to any action or legal proceeding commenced by any party, and irrevocably waive any objection they now or hereafter may have respecting the venue of any such action or proceeding brought in such a court or respecting the fact that such court is an inconvenient forum, relating to or arising out of this Agreement or any acts or omissions relating to the sale of the Securities hereunder, and consent to the service of process in any such action or legal proceeding by means of registered or certified mail, return receipt requested, postage prepaid, in care of the address set forth herein or such other address as either party shall furnish in writing to the other.
(j) This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
[Signature Pages Follow]
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ACCEPTED this [____] day of [_________], on behalf of Green Spirit Industries Inc.
| By: | ||
| Name: | Les Ball | |
| Title: | Chief Executive Officer |
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ALL SUBSCRIBERS MUST COMPLETE THIS PAGE
IN WITNESS WHEREOF, the Subscriber has executed this Agreement on the [___] day of [_______].
| x $0.71 = | ||||
| Securities subscribed for | Aggregate Purchase Price |
Manner in which Title is to be held (Please Check One ):
| 1. | ___ | Individual | 7. | ___ |
Trust/Estate/Pension or Profit sharing Plan
Date Opened:______________ |
| 2. | ___ | Joint Tenants with Right of Survivorship | 8. | ___ |
As a Custodian for
________________________________
Under the Uniform Gift to Minors Act of the State of
________________________________ |
| 3. | ___ | Community Property | 9. | ___ | Married with Separate Property |
| 4. | ___ | Tenants in Common | 10. | ___ | Keogh |
| 5. | ___ | Corporation/Partnership/ Limited Liability Company | 11. | ___ | Tenants by the Entirety |
| 6. | ___ | IRA |
ALTERNATIVE DISTRIBUTION INFORMATION
To direct distribution to a party other than the registered owner, complete the information below. YOU MUST COMPLETE THIS SECTION IF THIS IS AN IRA INVESTMENT .
Name of Firm (Bank, Brokerage, Custodian):
Account Name:
Account Number:
Representative Name:
Representative Phone Number:
Address:
City, State, Zip:
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IF
MORE THAN ONE SUBSCRIBER, EACH SUBSCRIBER MUST SIGN.
INDIVIDUAL SUBSCRIBERS MUST COMPLETE THIS PAGE 10.
SUBSCRIBERS WHICH ARE ENTITIES MUST COMPLETE PAGE 11.
EXECUTION BY NATURAL PERSONS
| Exact Name in Which Title is to be Held | ||
| Name (Please Print) | Name of Additional Purchaser | |
| Residence: Number and Street | Address of Additional Purchaser | |
| City, State and Zip Code | City, State and Zip Code | |
| Social Security Number | Social Security Number | |
| Telephone Number | Telephone Number | |
| Fax Number (if available) | Fax Number (if available) | |
| E-Mail (if available) | E-Mail (if available) | |
|
(Signature)
|
(Signature of Additional Purchaser) | |
| - 11 - |
EXECUTION BY SUBSCRIBER WHICH IS AN ENTITY
(Corporation, Partnership, LLC, Trust, Etc.)
| Name of Entity (Please Print) | |||
| Date of Incorporation or Organization: | |||
| State of Principal Office: | |||
| Federal Taxpayer Identification Number: | |||
| Office Address | |||
| City, State and Zip Code | |||
| Telephone Number | |||
| Fax Number (if available) | |||
| E-Mail (if available) | |||
| By: | |||
| Name: | |||
| Title: | |||
| [seal] | |||
| Attest: | |||
| (If Entity is a Corporation) | |||
| Address | |||
| - 12 - |
INVESTOR QUESTIONNAIRE
Instructions: Check all boxes below which correctly describe you.
| [ ] | You are ( i ) a bank, as defined in Section 3(a)(2) of the Securities Act of 1933, as amended (the “ Securities Act ”), ( ii ) a savings and loan association or other institution, as defined in Section 3(a)(5)(A) of the Securities Act, whether acting in an individual or fiduciary capacity, ( iii ) a broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), ( iv ) an insurance company as defined in Section 2(13) of the Securities Act, ( v ) an investment company registered under the Investment Company Act of 1940, as amended (the “ Investment Company Act ”), ( vi ) a business development company as defined in Section 2(a)(48) of the Investment Company Act, ( vii ) a Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301 (c) or (d) of the Small Business Investment Act of 1958, as amended, ( viii ) a plan established and maintained by a state, its political subdivisions, or an agency or instrumentality of a state or its political subdivisions, for the benefit of its employees and you have total assets in excess of $5,000,000, or ( ix ) an employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, as amended (“ ERISA ”) and (1) the decision that you shall subscribe for and purchase Securities, is made by a plan fiduciary, as defined in Section 3(21) of ERISA, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or (2) you have total assets in excess of $5,000,000 and the decision that you shall subscribe for and purchase the Securities is made solely by persons or entities that are accredited investors, as defined in Rule 501 of Regulation D promulgated under the Securities Act (“ Regulation D ”) or (3) you are a self-directed plan and the decision that you shall subscribe for and purchase the Securities is made solely by persons or entities that are accredited investors. |
| [ ] | You are a private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940, as amended. |
| [ ] | You are an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “ Code ”), a corporation, Massachusetts or similar business trust or a partnership, in each case not formed for the specific purpose of making an investment in the Securities and its underlying securities in excess of $5,000,000. |
| [ ] | You are a director or executive officer of the Company. |
| [ ] | You are a natural person whose individual net worth, or joint net worth with your spouse, exceeds $1,000,000 at the time of your subscription for and purchase of the Securities (excluding principal residence). |
| [ ] | You are a natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with your spouse in excess of $300,000 in each of the two most recent years, and who has a reasonable expectation of reaching the same income level in the current year. |
| [ ] | You are a trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Securities and whose subscription for and purchase of the Securities is directed by a sophisticated person as described in Rule 506(b)(2)(ii) of Regulation D. |
| [ ] | You are an entity in which all of the equity owners are persons or entities described in one of the preceding paragraphs. |
| - 13 - |
Check all boxes below which correctly describe you.
With respect to this investment in the Securities, your:
| Investment Objectives: | [ ] | Aggressive Growth | [ ] | Speculation |
| Risk Tolerance: | [ ] | Low Risk | [ ] | Moderate Risk | [ ] | High Risk |
Are you associated with a FINRA Member Firm? [ ]Yes [ ] No
Your initials (purchaser and co-purchaser, if applicable) are required for each item below:
| ____ ____ | I/We understand that this investment is not guaranteed. |
| ____ ____ | I/We are aware that this investment is not liquid. |
| ____ ____ | I/We are sophisticated in financial and business affairs and are able to evaluate the risks and merits of an investment in this offering. |
| ____ ____ | I/We confirm that this investment is considered “high risk.” (This type of investment is considered high risk due to the inherent risks including lack of liquidity and lack of diversification. Success or failure of private placements such as this is dependent on the corporate issuer of these securities and is outside the control of the investors. While potential loss is limited to the amount invested, such loss is possible.) |
FINRA Affiliation
Are you affiliated directly or indirectly with a member broker-dealer firm of the Financial Industry Regulatory Authority, Inc. as an employee, officer, director, partner or shareholder or as a relative or member of the same household of an employee, director, partner or shareholder of a FINRA member broker-dealer firm?
Yes____ No_____
If the answer is “yes,” then, in order to purchase securities in the offering, the Subscriber will need to provide the Issuer with a FINRA member affiliate certification whereby the FINRA member firm acknowledges the affiliation and its receipt of the notice required by Article 3, Sections 28(a) and (b) of the Rules of Fair Practice with respect to an investment in Securities pursuant to the offering described herein.
Anti-Money Laundering Rules
In order for the Company to comply with applicable anti-money laundering/U.S. Treasury Department Office of Foreign Assets Control (“OFAC”) rules and regulations, Subscriber is required to provide the following information:
(a) Payment Information
(i) Name and address (including country) of the bank from which Subscriber’s payment to the Company is being wired (the “Wiring Bank”):
| - 14 - |
(ii) Subscriber’s wiring instructions at the Wiring Bank:
(iii) Is the Wiring Bank located in the U.S. or another “FATF Country”*?
_____ Yes ______ No
(iv) Is Subscriber a customer of the Wiring Bank?
_____ Yes ______ No
(b) Additional Information
Investors wishing to subscribe must provide the following additional information or documents unless you have previously delivered such information to the Company or to a Placement Agent for the Offering as part of the establishment of your account at the Placement Agent.
For Individual Investors :
| ____ | A government issued form of picture identification (e.g., passport or drivers license). |
| ____ | Proof of the individual’s current address (e.g., current utility bill), if not included in the form of picture identification. |
| ____ | One or more of the above documentations has previously provided to Placement Agent. |
For Funds of Funds or Entities that Invest on Behalf of Third Parties :
| _____ | A certificate of due formation and organization and continued authorization to conduct business in the jurisdiction of its organization (e.g., certificate of good standing). |
| _____ | An “incumbency certificate” attesting to the title of the individual executing these subscription materials on behalf of the prospective investor. |
| _____ | A completed copy of a certification that the entity has adequate anti-money laundering policies and procedures (“AML Policies and Procedures”) in place that are consistent with the USA PATRIOT Act, OFAC and other relevant federal, state or non-U.S. anti-money laundering laws and regulations (with a copy of the entity’s current AML Policies and Procedures to which such certification relates). |
| _____ | A letter of reference for any entity not located in the U.S. or other FATF country, from the entity’s local office of a reputable bank or brokerage firm that is incorporated, or has its principal place of business located, in the U.S. or other FATF Country certifying that the prospective investor maintains an account at such bank/brokerage firm for a length of time and containing a statement affirming the prospective investor’s integrity. |
| _____ | One or more of the above documentations has previously provided to Placement Agent. |
* As of the date hereof, countries that are members of the Financial Action Task Force on Money Laundering (“ FATF Country ”) are: Argentina, Australia, Austria, Belgium, Brazil, Canada, Denmark, Finland, France, Germany, Greece, Hong Kong, Iceland, Ireland, Italy, Japan, Luxembourg, Mexico, Kingdom of the Netherlands, New Zealand, Norway, Portugal, Russian Federation, Singapore, South Africa, Spain, Sweden, Switzerland, Turkey, United Kingdom and the United States of America.
| - 15 - |
For all other Entity Investors :
| _____ | A certificate of due formation and organization and continued authorization to conduct business in the jurisdiction of its organization (e.g., certificate of good standing). |
| _____ | An “incumbency certificate” attesting to the title of the individual executing these subscription materials on behalf of the prospective investor. |
| _____ | A letter of reference from the entity’s local office of a reputable bank or brokerage firm that is incorporated, or has its principal place of business located, in the U.S. or other FATF Country certifying that the prospective investor maintains an account at such bank/brokerage firm for a length of time and containing a statement affirming the prospective investor’s integrity. |
| _____ | If the prospective investor is a privately-held entity, a certified list of the names of every person or entity who is directly or indirectly the beneficial owner of 25% or more of any voting or non-voting class of equity interests of the Subscriber, including (i) country of citizenship (for individuals) or principal place of business (for entities) and, (ii) for individuals, such individual’s principal employer and position. |
| If the prospective investor is a trust, a certified list of (i) the names of the current beneficiaries of the trust that have, directly or indirectly, 25% or more of any interest in the trust, (ii) the name of the settlor of the trust, (iii) the name(s) of the trustee(s) of the trust, and (iv) the country of citizenship (for individuals) or principal place of business (for entities). | |
| _____ | One or more of the above documentations has previously provided to Placement Agent. |
The Subscriber hereby represents and warrants that all of its answers to this Investor Questionnaire are true as of the date of its execution of the Subscription Agreement pursuant to which it purchased the Securities.
| - 16 - |
| - 17 - |
VERIFICATION OF INVESTMENT ADVISOR/BROKER
I state that I am familiar with the financial affairs and investment objectives of the investor named above and reasonably believe that a purchase of the Securities is a suitable investment for this investor and that the investor, either individually or together with his or her purchaser representative, understands the terms of and is able to evaluate the merits of this offering. I acknowledge:
| (a) | that I have reviewed the Subscription Agreement and forms of securities presented to me, and attachments (if any) thereto; | |
| (b) | that the Subscription Agreement and attachments thereto have been fully completed and executed by the appropriate party; and | |
| (c) | that the subscription will be deemed received by the Company upon acceptance of the Subscription Agreement. |
Deposit securities from this offering directly to purchaser’s account? [ ] Yes [ ]No
If “Yes,” please indicate the account number: _____________________________________
| Broker/Dealer | Account Executive | |
| (Name of Broker/Dealer) | (Signature) | |
| (Street Address of Broker/Dealer Office) | (Print Name) | |
| (City of Broker/Dealer Office) (State) (Zip) | (Representative I.D. Number) | |
| (Telephone Number of Broker/Dealer Office) | (Date) | |
| (Fax Number of Broker/Dealer Office) | (E-mail Address of Account Executive) |
| - 18 - |
FINAL PURCHASING AGREEMENT
BETWEEN
PUERTO RICO INDUSTRIAL COMMERCIAL HOLDINGS BIOTECH
CORPORATION AND PROJECT 1493, LLC.
I. Parties
This Final Purchasing Agreement (here on after the “Agreement”) is made and entered into by and between Healing Herbs Corporation , as Party of the First Part, and Project 1493, LLC , as Party of the Second Part.
The Party of the First Part official communication information is:
Ave. Tnte. César González 508,
Hato Rey, San Juan, PR. 00918
antonioiguina@gmail.com
The Party of the Second Part official communication information is:
Condominio Madrid, Ste. 304
Loíza Street, #1760
San Juan, P.R. 00911
office@cglawpr.com
II. Definitions
In the present Agreement, unless the context otherwise requires, the following words and expressions shall have the following meanings when used herein:
Department of Health = Refers to the Health Department of the Commonwealth of Puerto Rico, agency in charge of the regulations for the Medicinal Cannabis industry in Puerto Rico.
Department of State = Refers to the Department of State of the Commonwealth of Puerto Rico.
Dispensary = A registered establishment that has a valid license or authorization by the Department of Health of Puerto Rico to stock and dispense Medicinal Cannabis.
Material Breach = The following situations will be considered a material breach:
| a) | Lack of proper pre-qualification license and permits according to Regulation 8766 of the Department of Health of Puerto Rico; | |
| b) | False representations regarding the party, the documents submitted or the property subject to the present Agreement; | |
| c) | Failure to provide the corresponding lease assignment for the property; | |
| d) | Failure to comply with rectification of a material breach; and | |
| e) | Changes in the official communication information provided without proper notice. |
Medicinal Cannabis = Refers to all parts of the Cannabis Sativa L . and Cannabis Indica, any hybrid of said plants as well as any compound, derivate, concentrate, mix or confections produced with said plants (i.e. oils, edibles, beverages, etc.) as defined by Regulation No. 8766 of the Department of Health of Puerto Rico.
MOU = Refers to the Memorandum of Understanding signed between the Parties on December, 2017. A Memorandum of Understanding is a short form binding and enforceable agreement that stipulates the material terms and conditions that will ultimately become a purchase agreement if all the representations made by the seller are duly verified and confirmed during the Exclusivity Period.
Party of the First Part = Refers to Healing Herbs Corporation, who will be the seller of the Medicinal Cannabis dispensary subject to this Agreement. This includes any officers, directors and any other member that currently holds an office within the Corporation.
Party of the Second Part = Refers to Project 1493, LLC, a wholly owned subsidiary of Green Spirit Industries, Inc., who will be the buyer of the Medicinal Cannabis dispensary subject to this Agreement. This includes any officers, directors and any other member that currently holds an office within the Corporation.
Proposed Acquisition = The proposed acquisition of Medicinal Cannabis dispensary by the Party of the Second Part from the Party of the First Part as contemplated in this Agreement.
Regulation No. 8766 = Regulation Number 8766 of the Department of Health of Puerto Rico: Regulation for the Use, Possession, Growth, Manufacture, Fabrication, Dispensation, Distribution and Investigation of Medicinal Cannabis, approved on the 8th of July, 2016, and its subsequent amendments.
III. Purpose
The purpose of this Agreement is to establish the terms and conditions for the sale and acquisition of one (1) Medical Cannabis dispensary (described below) for the amount of one hundred and twenty-eight thousand dollar ($128,000 USD), as previously agreed in the MOU signed on December 22, 2017.
IV. Party Considerations and Representations
A. Party of the First Part Considerations and Representations
The Party of the First Part is a for-profit corporation established under the laws of Commonwealth of Puerto Rico, with its main offices in San Juan, P.R., with Department of State registration number 383827, represented by its President and duly authorized representative, Antonio Iguina González, Esq.
The Party of the First Part represents that it is currently in Good Standing with the Puerto Rico Department of State and Department of Treasury.
The Party of the First Part represents that it is the legally rightful owner of all assets, leasing contracts, permits and other related documents for the following proposed Medical Cannabis dispensary establishment, as pre-qualified by the Department of Health:
| 1) | “Healing Herbs” dispensary, located on 508 c/ César González, San Juan, Puerto Rico, 00918. The following representations apply to this establishment: | |
| a) | The dispensary was pre-qualified by the Puerto Rico Department of Health on October 24, 2016; | |
| b) | The dispensary application number is 2016-10-0048; | |
| c) | The property in question is owned by Norman Luis Santiago Gómez; | |
| d) | A lease agreement was signed between the above-mentioned owner and the Party of the First Part on October 6, 2016. A copy of said lease agreement has been furnished to the Party of the Second Part; | |
| e) | The Party of the First Part represents that to best of his knowledge, there are no impediments with the owner of the property for the signing of the corresponding Lease Assignment to the Party of the Second Part; | |
| f) | The property has an approximate capacity of 1,150 square feet and it is located on a residential zone with the corresponding commercial permits; | |
| g) | To the best of its knowledge there are no current proceedings or plans to change the zoning classification for the above named property; and | |
| h) | The dispensary is in full compliance with all requirements set forth in Regulation No. 8766 of the Puerto Rico Department of Health for the proposed business. Pertinent statutes and regulations. |
The Party of the First Part wishes to sell all legal rights, permits, licenses and assets in its power pertaining to the aforementioned dispensary for the total amount of $128,000 USD. Said amount was paid in full by way of wire transfer on December 22, 2017, and held by the Party of the First Part, in good faith, until the signing of the present Agreement.
The Party of the First Part represents that all of the assets, rights and licenses pertaining to the present Agreement have been acquired legally in accordance with the laws and regulations of the Commonwealth of Puerto Rico.
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The Party of the First Part represents that it has the capacity to transfer all pertinent documents, licenses and property of his ownership so that the dispensary remains operational during the condensed due diligence period until the Final Purchasing Agreement is executed.
The Party of the First Part represents that, to the best of its knowledge, there is no existing, pending or projected administrative or judicial process regarding the dispensary subject to this Agreement, including labor matters, other than those pertaining to the corresponding license procedures at the health Department.
The Party of the First Part represents that, to the best of its knowledge, there are no outstanding fines or any other obligations that under the laws of Puerto Rico, can be transferred to the party of the Second Part, other than those that pertain to the completion of the dispensary to be approved after the final inspection takes place.
The Party of the First Part represents that said party conducted and exhausted all due diligence in regards to compliance with all requirements set forth in Regulation No. 8766 of the Puerto Rico Department of Health for the proposed business, including zoning regulations, location requirements, and that the build out was made in compliance with said Regulation and applicable laws.
B. Party of the Second Part Considerations and Representations
The Party of the Second Part is a for-profit Limited Liability Company established under the laws of Commonwealth of Puerto Rico, with its main offices in San Juan, P.R., with Department of State registration number 3292, represented in this act by Alexis Colón Asencio, authorized representative of Green Spirit Industries, Inc., who is the Sole Member of Project 1493, LLC.
The Party of the Second Part represents its interest in purchasing the described Medicinal Cannabis dispensary from the Party of the First Part for the amount established herein and exclusively relying on the representations that the other party has made in the present Agreement.
The Party of the Second Part represents that it is solvent and in a condition to comply with all financial commitments subject to the present Agreement.
The Party of the Second Part represents that said party conducted and exhausted all due diligence in regards to compliance with all requirements set forth in Regulation No. 8766 of the Puerto Rico Department of Health for the proposed business, including zoning regulations, location requirements, and that the build out was made in compliance with said Regulation and applicable laws.
V. Transfer of Funds
The parties represent that the Purchase Price was paid in full by way of wire transfer on December 22, 2017. Said amount was held, in good faith, by the Party of the First Part until the signing of the present Agreement, upon which the transfer of assets and the corresponding payment are to be considered complete.
VI. Severability
Should any portion of this Agreement be judicially declared to be null and void or unenforceable, the remainder of the Agreement shall continue in full force and effect.
VII. Integration Clause
This Agreement constitutes the entire agreement and understanding between the parties and supersedes any and all prior agreements and understandings, collateral agreements or understandings, oral or written, related to the subject matter herein. Any and all prior agreements, collateral representations or understandings, oral or written, regarding the sale and acquisition subject to this Agreement are deemed to be null and void for all legal purposes. The present Agreement may only be amended by written consent of the Parties.
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VIII. Indemnification Clause
The Party of the First Part shall indemnify the Party of the Second Part for any and all causes of action, claims, suits, demands, damages, obligations, losses, settlements, potential liabilities and costs that may arise by acts or omissions occurred prior to the signing of this Agreement. This clause shall be interpreted as broad as legally possible and it extends to business partners, associates, advisors and relatives of the members entity.
The Party of the First Part will hold the Party of the Second Part harmless from and pay any loss, damage cost or expense (including, without limitation, legal fees and court costs) which the Party of the Second Part incurs by reason of any representation or warranty of the Party of the First Part being incorrect or by reason of any breach by the Party of the First Part of any of its covenants or obligations under this Agreement.
In the event that the Party of the First Part is compelled to indemnify the Party of the Second Part, the filing of bankruptcy will not allow the Party of the First Part to discharge the indemnification provision of the present Agreement under any condition. The Party of the First Part expressly waives any right that the bankruptcy code may furnish said party during a bankruptcy proceeding pertaining to the present obligation.
IX. Dispute Resolution/ Mediation and Arbitration Clause
Any dispute or reclamation that may arise in regards to the present Agreement, or any other circumstance that requires the intervention of an administrative or judicial forum, will be referred to mediation in the Commonwealth of Puerto Rico in accordance with the Regulation for Alternative Methods of Dispute Resolution. The mediator to be chosen must have a minimum of 15 years of experience in the private law practice.
If the parties fail to resolve any conflict through the mediation process, the issue will be resolved through arbitration in the Commonwealth of Puerto Rico and in accordance with the rules and regulations set forth by the American Arbitration Association. These rules require that a panel of three arbitrators resolve any dispute submitted to their consideration. The arbitrators must have a minimum of 15 years of experience in the private law practice. The decision of the majority of the arbitrators is a final one for the parties. The arbitrators shall resolve any dispute, including matters related to discovery of evidence that may arise during the arbitration process. The non-prevailing party will assume all of the costs of the proceedings, including all legal and attorney fees, the arbitrator fees, filing costs and any other fee incidental to the proceedings. The arbitration panel’s decision may be entered as a judicial sentence or court order in any court that has proper jurisdiction and venue. The Arbitrators will be empowered to concede for punitive damages, and may grant attorney fees to the prevailing party.
X. Confidentiality
Except as provided herein, the existence and the terms of this Agreement shall be maintained in confidence by the parties hereto and their respective officers, directors and employees. Except as compelled to be disclosed by judicial or administrative process or by other requirements of law, legal process, rule or regulation, all public announcements, notices or other communications regarding such matters to third parties, shall require the prior approval of all parties hereto. The Party of the First Part hereby agrees not to divulge any corporate, proprietary or financial information in regards to Project 1493, LLC and/or Green Spirit Industries, Inc., and/or any license, rights or property subject to this Agreement.
XI. Copyright Clause
The Party of the First Part hereby transfers any and all ideas, concepts, copyrighted materials and trademarks pertaining to the establishments in question to the Party of the Second Part. All of the rights conceded through the present Agreement are for the sole exploitation of the Party of the Second Part in all jurisdictions where it is legally permitted to dispense Medical Cannabis products.
| 4 |
XII. Governing Language
The governing language of the present document will be English. If the need for a translation arises, the document will be translated from English to Spanish.
XIII. Closing
The closing of the purchase and sale of the assets subject to this Agreement will take place at the time and place that the Parties mutually agree.
At closing, the Party of the First Part will provide the Party of the Second Part with duly executed forms and documents evidencing transfer of assets, where required including, but not limited to, bills of sale, assignments, assurances, and consents.
XIV. Signatures
IN WITNESS WHEREOF , the parties to this Agreement through their duly authorized representatives have executed this Agreement on the days and dates set out below, and certify that they have read, understood, and agreed to the terms and conditions of this Agreement as set forth herein.
The effective date of this Agreement is the date of the signature last affixed to this page. This Agreement does not require the simultaneous signing of the parties for its validity.
The Parties agree that the sale becomes absolutely final and irreversible upon the signing of the present Agreement. Once this process is complete, the Parties cannot withdraw from the present Agreement for any reason whatsoever, except by express and written consent from the other Party.
All personal guarantees contained in the MOU signed by the Parties, other than those provided by law, are considered terminated upon the signing of the present Agreement. No personal guarantees, other than those provided by law, are herein provided by any officers, directors or any other member of the either Party.
For the Party of the First Part:
| Antonio Iguina González, Esq. | Date |
President and Authorized Representative
Healing Herbs Corporation
For the Party of the Second Part:
| Alexis Colón Asencio | Date |
Authorized Representative of Green Spirit Industries, Inc.,
Sole Member of Project 1493, LLC.
| 5 |
ASSIGNMENT OF LEASE
THIS ASSIGNMENT OF LEASE (“ASSIGNMENT”) is made by and between Healing Herbs Corporation , a domestic corporation duly organized under the laws of the Commonwealth of Puerto Rico (“ASSIGNOR”); Project 1493, LLC , a Limited Liability Corporation duly organized under the laws of the Commonwealth of Puerto Rico (“ASSIGNEE”), and Norman Luis Santiago Gómez , owner of the property subject to this Assignment (“LANDLORD”).
FOR VALUABLE CONSIDERATION, the parties herein agree to the following terms and conditions set forth below:
| 1. | The Landlord and the Assignor have entered into a lease agreement, on October 6, 2016, regarding the premises described therein. A true and correct copy of the Lease is attached hereto and made a part hereof as “Exhibit A”. | |
| 2. | The Assignor hereby assigns and transfers to the Assignee all of Assignor’s rights and delegates all of Assignor’s duties under the Lease Agreement subscribed on October 6, 2016. | |
| 3. | Assignee hereby accepts this Assignment and assumes and agrees to fulfill all tenant obligations, terms and conditions of the Lease from this date forward for the remainder of the term thereof to the same extent as if it had been the original tenant under the Lease. The Assignee further agrees to indemnify and hold the Assignor harmless from any breach of Assignee’s duties hereunder. | |
| 4. | The Assignor agrees to transfer possession of the leased premises to the Assignee on the Effective Date. All rents and obligations of the Assignor under the Lease accruing before the Effective Date shall have been paid or discharged. The Landlord hereby assents to the assignment of the Lease hereunder and as of the Effective Date hereby releases and discharges the Assignor from all duties and obligations under the Lease accruing after the Effective Date. | |
| 5. | This assignment of the Lease also includes the transfer of the security deposit referenced therein. Assignor hereby releases unto Assignee all of Assignor’s right, title and interest in the deposit. Landlord shall continue to hold the deposit as security for the faithful performance of the Lease. | |
| 6. | There shall be no further assignment of the Lease without the written consent of the Landlord. | |
| 7. | This agreement shall bind the parties, their legal representatives, successors and assigns. The Assignee assumes and undertakes all of the terms and conditions of the lease as his own obligation. | |
| 8. | This agreement contains the entire understanding of the parties. It may not be changed orally. This agreement may be amended or modified only by written consent of the parties. |
IN WITNESS WHEREOF, the parties set their signatures on the date expressed below.
| Antonio Iguina Gonzalez, Esq. | Date | |
| President and Authorized Representative | ||
| Healing Herbs Corporation | ||
| “Assignor “ |
| Alexis Colón Asencio | Date | |
| Authorized Representative | ||
| Green Spirit Industries, Inc., | ||
| Sole Member of Project 1493, LLC | ||
| “Assignee” |
| Norman Luis Santiago Gómez | Date | |
| Landlord |