AMENDED ROYALTY AGREEMENT
EXHIBIT 10.2
This Amended Royalty Agreement (the “Agreement”) is entered into as of this 12th day of September, 2016 (the “Effective Date”) by and between Ecosphere Development Company LLC, a Washington limited liability company (the “Company”), and Xxxxxxx Water Solutions LLC (“Xxxxxxx” and together with the Company, the “Parties”). For good and valuable consideration, the receipt of which is hereby acknowledged, the Parties hereby agree as follows:
1.
Term. This Agreement shall remain in effect from the Effective Date through June 2, 2046 (the “Term”).
2.
Payment of Royalties. During the Term, the Company shall pay Xxxxxxx an amount equal to 7% of the gross lease revenue actually received by the Company on a cash basis from the Company’s first Tier 2 Grow Facility located in Finley County, Washington which becomes operational (the “Royalties”). The obligation to pay the Royalties shall not be dependant on the identity of the operator and shall continue regardless of changes in the identity of the operator during the Term. Royalties shall be paid within ten business days of actual receipt of lease funds by the Company. For avoidance of doubt, the Company plans to develop and build additional Tier 2 Grow Facilities on the land it is leasing in Finley County, Washington, and Xxxxxxx shall not be entitled to receive any Royalties from any other Tier 2 Grow Facilities. The Royalties shall have priority of payment over all other debts, obligations and liabilities of the Company other than (i) payments owed to _______________ pursuant to that certain Senior Secured Promissory Note and Business Consulting Agreement, each dated as of June 27, 2016, and (ii) all land lease payments by the Company with respect to the land on which the Tier 2 Grow Facility is located.
3.
Books and Records. The Company shall maintain full and accurate books and records related to the receipt of lease revenue and shall offer Xxxxxxx or his authorized representatives a reasonable opportunity, during business hours and on at least 24 hours' prior notice, to conduct an examination of the Company’s books and records relating to this Agreement in order to ensure that the Company is meeting its obligations to Xxxxxxx as provided in Section 2 of this Agreement. In the event that any review of the books and records of the Company indicates that it has failed to properly account to Xxxxxxx and the amount due Xxxxxxx is in excess of 5% of amounts actually paid, the Company shall promptly pay to Xxxxxxx the sum due together with 10% per annum interest calculated on a 360 day year and any costs including professional fees incurred by Xxxxxxx in reviewing the books and records of the Company.
4.
Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. The execution of this Agreement may be by actual or facsimile signature.
5.
Benefit. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their legal representatives, successors and assigns.
6.
Notices and Addresses. All notices, offers, acceptance and any other acts under this Agreement (except payment) shall be in writing, and shall be sufficiently given if delivered to the addressees in person, by FedEx or similar receipted next business day delivery, or by email followed by overnight next business day delivery as follows:
Xxxxxxx:
Xxxxxxx Water Solutions LLC
00 X. Xxxxx Xxxx
Xxxxxxx Xxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxx
Email: ___________________
with a copy to:
Xxxxxxxx & Shohl LLP
Fifth Third Center
Xxx Xxxxx Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxx, Esq.
Email: xxxxx.xxxxx@xxxxxxxx.xxx
The Company:
0000 XX Xxxxxx Xxxxxxx
Xxxxxx, Xxxxxxx 00000
Attention: Xxxxxx XxXxxxx
Email: xxxxxxxxxxxxx0@xxx.xxx
with a copy to:
Nason, Yeager, Gerson, White
& Xxxxx, P.A.
0000 XXX Xxxxxxxxx, Xxxxx 000
Xxxx Xxxxx Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Email: xxxxxxx@xxxxxxxxxxx.xxx
or to such other address as any of them, by notice to the other may designate from time to time. Time shall be counted to, or from, as the case may be, the date of delivery.
7.
Attorneys’ Fees. In the event that there is any controversy or claim arising out of or relating to this Agreement, or to the interpretation, breach or enforcement thereof, and any action or proceeding is commenced to enforce the provisions of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and expenses (including such fees and costs on appeal).
8.
Oral Evidence. This Agreement constitutes the entire Agreement between the parties and supersedes all prior oral and written agreements between the parties hereto with respect to the subject matter hereof. Neither this Agreement nor any provision hereof may be changed, waived, discharged or terminated orally, except by a statement in writing signed by the party or parties against which enforcement or the change, waiver, discharge or termination is sought.
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9.
Additional Documents. The parties hereto shall execute such additional instruments as may be reasonably required by their counsel in order to carry out the purpose and intent of this Agreement and to fulfill the obligations of the parties hereunder.
10.
Governing Law. All claims relating to or arising out of this Agreement, or the breach thereof, whether sounding in contract, tort, or otherwise, shall also be governed by the laws of the State of Washington without regard to choice of law considerations.
11.
Section or Paragraph Headings. Section headings herein have been inserted for reference only and shall not be deemed to limit or otherwise affect, in any matter, or be deemed to interpret in whole or in part any of the terms or provisions of this Agreement.
(Signature Page Follows)
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IN WITNESS WHEREOF the parties hereto have set their hand as of the date first above written.
| ECOSPHERE DEVELOPMENT COMPANY LLC | |
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| By: |
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| Xxxxxx XxXxxxx, Manager |
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| XXXXXXX WATER SOLUTIONS LLC | |
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| By: |
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| Xxxxxxx Xxxxxxx, Manager |
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