MASTER PROPERTY

 

PURCHASE AND SALE AGREEMENT

 

BETWEEN

 

DEEP BLUE ENTERPRISES, LLC

a Colorado Limited Liability Company

 

AS

 

SELLER

 

AND

 

CANNA-LIFE CORPORATION

a Colorado Corporation

 

AS

 

PURCHASER

 

 

 

 

April 30, 2014

 

 

 

 

 

 

 

MASTER PROPERTY

PURCHASE AND SALE AGREEMENT

 

THIS MASTER PROPERTY PURCHASE AND SALE AGREEMENT (the “Agreement”) is made as of
the 30th day of April, 2014 (the “Effective Date”), by and between Deep Blue
Enterprises LLC, a Colorado limited liability company (“Seller”), having an
office at 2855 Monaco Parkway Drive, Denver, CO 80207 and Canna-Life
Corporation, a Colorado corporation (“Purchaser”), having an office at 1624
Market Street, Suite 202, Denver, CO 80202. Seller and Purchaser are sometimes
referred to herein individually as a “Party” or collectively as the “Parties.”

 

RECITALS

 

A. WHEREAS, on April 30, 2014, Seller and New Alternatives Consulting LLC (“New
Alternatives”) entered into an assignment agreement, a true and correct copy of
which is attached as Annex I (the “New Alternatives Assignment Agreement”),
pursuant to which New Alternatives granted to Seller all of its rights, title
and interests to the Properties (as defined below).

 

B. WHEREAS, Seller has the right to sell and convey, without lien or
encumbrance, and wishes to sell and convey certain real property, improvements
and other property located in: (i) Lafayette, Boulder County, Colorado, commonly
known as the “Isabelle Property”; and (ii) Avondale, Pueblo County, Colorado,
commonly known as the “Pueblo Property.”

 

C. WHEREAS, Purchaser wishes to purchase that certain real property,
improvements and other property commonly known as the Isabelle Property and the
Pueblo Property in fee simple, without lien or encumbrance.

 

D. WHEREAS, Scott Weakly Family Properties (“Madison St. Property Owner”) and
Madison Growers, LLC (“Madison Growers”) entered into that certain “Lease and
Option to Purchase Agreement” on or about April 12, 2014, a true and correct
copy of which is attached hereto as Annex II and incorporated herein by
reference (“Madison St. Lease/Option Agreement”), pursuant to which Madison
Growers was given the contractual right to lease (the “Madison St. Lease”) and
the option to purchase in fee simple and without lien or encumbrance (the
“Madison St. Option”) that certain real property, improvements and other
property commonly known as the “Madison St. Property” located in Denver,
Colorado (the “Madison St. Lease/Option”).

 

E. WHEREAS, with the express written consent of Madison St. Property Owner,
Madison Growers and Seller entered into that certain assignment agreement on or
about April 12, 2014, a true and correct copy of which is attached hereto as
Annex III and incorporated herein by reference (“Madison St. Assignment
Agreement”), pursuant to which Madison Growers had duly assigned all of its
rights, title and interest in the Madison St. Lease/Option to New Alternatives.

 

F. WHEREAS, Seller has the right, and has obtained all necessary consents in
writing and paid all relevant fees, to sub-lease the Madison St. Property and
wishes to sub-lease the Madison St. Property to Purchaser in accordance with the
terms and conditions of this Agreement.

 

G. WHEREAS, the Madison St. Owner has provided written consent authorizing the
sub-lease of the Madison St. Property by Seller to Purchaser.

 

H. WHEREAS, upon payment by Purchaser of the Final Payment (as defined below),
Seller desires to exercise the Madison St. Option and obtain from the Madison
St. Property Owner the Madison St. Property in fee simple without lien or
encumbrance.

 

I. WHEREAS, upon payment by Purchaser of the Final Payment (as defined below)
and exercise of the Madison St. Option, Seller shall own in fee simple and have
the right to sell and convey, without lien or encumbrance, the Madison St.
Property to Purchaser.

 

J. WHEREAS, upon payment by Purchaser of the Final Payment (as defined below)
and exercise of the Madison St. Option, Purchaser wishes to purchase the Madison
St. Property in fee simple, without lien or encumbrance, from Seller.

 

K. WHEREAS, upon payment by Purchaser of the Final Payment (as defined below),
which the Parties agree includes all funds necessary to duly exercise the
Madison St. Option as set forth in the Madison St. Lease/Option Agreement, and
exercise of the Madison St. Option by Seller, the Madison St. Owner shall convey
all rights, title and interests in the Madison St. Property to Purchaser in fee
simple, without lien or encumbrance.

 

L. WHEREAS, in consideration of the premises, mutual promises, and obligations
set forth, both parties agree to the terms described herein below.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the mutual covenants and promises set forth
herein, Purchaser and Seller agree as follows:

 

ARTICLE I

PURCHASE; SALE; RIGHT TO USE

 

1.1 Agreement of Purchase and Sale of the Isabelle Property. Subject to the
terms and on the conditions set forth in this Agreement, Seller agrees to sell
and convey and Purchaser agrees to purchase the following, in fee simple:

 

(a)  that land situated in Lafayette, Boulder County, Colorado, more
particularly described on Exhibit A-1, together with all and singular the rights
and appurtenances pertaining to such property, including any right, title and
interest of Seller in and to adjacent streets, alleys or rights-of-way (the
property described in clause (a) of this Section 1.1 and Exhibit A-1 are
referred to collectively as the “Isabelle Land”);

 

(b)  the buildings, structures, fixtures and other improvements on the Isabelle
Land, including, without limitation, that certain greenhouse facility (“Isabelle
Greenhouse”) consisting of approximately 42,000 square feet, and related
facilities and improvements (collectively, the “Isabelle Improvements”);

 

(c)  all of Seller's right, title and interest in and to all tangible personal
property upon the Isabelle Land or within the Isabelle Improvements, and other
items of personal property used exclusively in connection with the operation of
the Isabelle Land and the Isabelle Improvements (the property described in
clause (c) of this Section 1.1 is referred to collectively as the “Isabelle
Personal Property”);

 

(d)  all of Seller's right, title and interest in and to those certain leases
(the “Isabelle Leases”) more fully described on Exhibit B-1 (the “Isabelle Lease
Schedule”);

 

(e)  all of Seller's right, title and interest in and to (i) all assignable
contracts and agreements (collectively, the “Isabelle Operating Agreements”)
listed and described on Exhibit C-1 (the “Isabelle Operating Agreements
Schedule”), relating to the upkeep, repair, maintenance or operation of the
Isabelle Land, Isabelle Improvements or Isabelle Personal Property which will
extend beyond the date of “Closing” (as such term is defined in Section 4.1),
and (ii) all assignable existing warranties and guaranties issued to Seller in
connection with the Improvements or the Isabelle Personal Property (the property
described in clause (e) of this Section 1.1 is referred to collectively as the
“Isabelle Intangibles”); and,

 

(f)  all transferable consents, authorizations, variances or waivers, licenses,
permits and approvals from any governmental or quasi-governmental agency,
department, board, commission, bureau or other entity or instrumentality
(collectively, the “Isabelle Licenses”), including, without limitation, those
with respect to use, utilities, building, fire, life safety, traffic and zoning
(collectively, the “Isabelle Approvals”) as listed on Exhibit D-1;

 

1.2 Agreement of Purchase and Sale of Pueblo Property. Subject to the terms and
on the conditions set forth in this Agreement, Seller agrees to sell and convey
and Purchaser agrees to purchase the following, in fee simple:

 

(a)  that land situated in Avondale, Pueblo County, Colorado, more particularly
described on Exhibit A-2, together with all and singular the rights and
appurtenances pertaining to such property, including any right, title and
interest of Seller in and to adjacent streets, alleys or rights-of-way (the
property described in clause (a) of this Section 1.2 and Exhibit A-2 are
referred to collectively as the “Pueblo Land”);

 

(b)  the buildings, structures, fixtures and other improvements on the Pueblo
Land, and related facilities and improvements (collectively, the “Pueblo
Improvements”);

 

(c)  all of Seller's right, title and interest in and to all tangible personal
property upon the Pueblo Land or within the Pueblo Improvements, and other items
of personal property used exclusively in connection with the operation of the
Pueblo Land and the Pueblo Improvements (the property described in clause (c) of
this Section 1.2 is referred to collectively as the “Pueblo Personal Property”);

 

(d)  all of Seller's right, title and interest in and to those certain leases
(the “Pueblo Leases”) more fully described on Exhibit B-2 (the “Pueblo Lease
Schedule”);

 

(e)  all of Seller's right, title and interest in and to (i) all assignable
contracts and agreements (collectively, the “Pueblo Operating Agreements”)
listed and described on Exhibit C-2 (the “Pueblo Operating Agreements
Schedule”), relating to the upkeep, repair, maintenance or operation of the
Pueblo Land, Pueblo Improvements or Pueblo Personal Property which will extend
beyond the date of “Closing” (as such term is defined in Section 4.1), and
(ii) all assignable existing warranties and guaranties issued to Seller in
connection with the Pueblo Improvements or the Pueblo Personal Property (the
property described in clause (e) of this Section 1.2 is referred to collectively
as the “Pueblo Intangibles”); and,

 

(f)  all transferable consents, authorizations, variances or waivers, licenses,
permits and approvals from any governmental or quasi-governmental agency,
department, board, commission, bureau or other entity or instrumentality
(collectively, the “Pueblo Licenses”), including, without limitation, those with
respect to use, utilities, building, fire, life safety, traffic and zoning
(collectively, the “Pueblo Approvals”) as listed on Exhibit D-2;

 

1.3 Sub-Lease of Madison St. Property; Exercise of Madison St. Option; Agreement
of Purchase and Sale of Madison St. Property.

 

(a) Sub-Lease of Madison St. Property. Pursuant to Section 9.01 of the Madison
St. Lease/Option Agreement and with the written consent of the Madison St.
Owner, Seller agrees to sub-lease to Purchaser the following property
(collectively referred to as the “Madison St. Property”):

 

(i)  that land situated in Denver, Colorado, more particularly described on
Exhibit A-3, together with all and singular the rights and appurtenances
pertaining to such property, including any right, title and interest of Seller
in and to adjacent streets, alleys or rights-of-way (the property described in
clause (a) of this Section 1.3 and Exhibit A-3 are referred to collectively as
the “Madison St. Land”);

 

(ii)  the buildings, structures, fixtures and other improvements on the Madison
St. Land, and related facilities and improvements (collectively, the “Madison
St. Improvements”);

 

(iii)  all of Seller's right, title and interest in and to all tangible personal
property upon the Madison St. Land or within the Madison St. Improvements, and
other items of personal property used exclusively in connection with the
operation of the Madison St. Land and the Madison St. Improvements (the property
described in clause (c) of this Section 1.3 is referred to collectively as the
“Madison St. Personal Property”);

 

(iv)  all of Seller's right, title and interest in and to those certain leases
(the “Madison St. Leases”) more fully described on Exhibit B-3 (the “Madison St.
Lease Schedule”);

 

(v)  all of Seller's right, title and interest in and to (i) all assignable
contracts and agreements (collectively, the “Madison St. Operating Agreements”)
listed and described on Exhibit C-3 (the “Madison St. Operating Agreements
Schedule”), relating to the upkeep, repair, maintenance or operation of the
Madison St. Land, Madison St. Improvements or Madison St. Personal Property
which will extend beyond the date of “Closing” (as such term is defined in
Section 4.1), and (ii) all assignable existing warranties and guaranties issued
to Seller in connection with the Madison St. Improvements or the Madison St.
Personal Property (the property described in clause (e) of this Section 1.3 is
referred to collectively as the “Madison St. Intangibles”); and,

 

(vi)  all transferable consents, authorizations, variances or waivers, licenses,
permits and approvals from any governmental or quasi-governmental agency,
department, board, commission, bureau or other entity or instrumentality
(collectively, the “Madison St. Licenses”), including, without limitation, those
with respect to use, utilities, building, fire, life safety, traffic and zoning
(collectively, the “Madison St. Approvals”) as listed on Exhibit D-3.

 

(b) Exercise of Madison St. Option. Upon payment by Purchaser of the “Final
Payment” (as defined below), Seller shall exercise the Madison St. Option and
obtain ownership of the Madison St. Property in fee simple without lien or
encumbrance.

 

(c) Agreement of Purchase and Sale of Madison St. Property. Upon payment by
Purchase of the “Final Payment” (as defined below) and exercise by Seller of the
Madison St. Option, Seller shall convey to Purchaser the Madison St. Property in
fee simple without lien or encumbrance.

 

1.4 Property Defined. The property described in Section 1.1, Section 1.2 and
Section 1.3 are referred to individually and collectively in this Agreement as
the “Property” or the “Properties.”

 

1.5 Permitted Exceptions. The Properties shall be conveyed subject to the
matters which are, or are deemed to be, permitted exceptions pursuant to
Article II (collectively, the “Permitted Exceptions”).

 

1.6 Purchase Price. Seller shall sell and Purchaser shall purchase the
Properties for a total of TWELVE MILLION FIVE HUNDRED THOUSAND DOLLARS
($12,500,000) (the “Purchase Price”), which shall be payable pursuant to the
following payment schedule:

 

(a) Deposit. Upon execution of this Agreement, Purchaser shall have remitted to
Seller, or Seller’s affiliate or assign, a non-refundable deposit in the
aggregate amount of Fifty Thousand ($50,000) dollars (the “Deposit”);

 

(b) Second Payment. Within 10 days from the date of execution of this Agreement,
Purchaser shall remit or have remitted to Seller One Million Five Hundred
Thousand ($1,500,000) dollars (the “Second Payment”);

 

(c) Third Payment. Within 90 days from the date of execution of this Agreement,
Purchaser shall remit or have remitted to Seller Two Million Five Hundred
($2,000,000) dollars (the “Third Payment”);

 

(d) Fourth Payment. Within 180 days from the date of execution of this
Agreement, Purchaser shall remit or have remitted to Seller Two Million Five
Hundred Thousand dollars ($2,500,000) (the “Fourth Payment”);

 

(e) Fifth Payment. Within 270 days from the date of execution of this Agreement,
Purchaser shall remit or have remitted to Seller Two Million Five Hundred
Thousand dollars ($2,500,000) (the “Fifth Payment”); and,

 

(f) Final Payment. Within 360 days from the date of execution of this Agreement
and subject to performance of Seller’s obligations under Section 2.2 of this
Agreement, Purchaser shall remit or have remitted to Seller Three Million Four
Hundred Fifty Thousand ($3,450,000) dollars (the “Final Payment”).1

 

1.7 Payments Remitted; Application in Satisfaction of Purchase Price. The
Parties hereby agree and acknowledge that a total of EIGHT HUNDRED AND FIFTY
THOUSAND DOLLARS ($850,000) (the “Prior Payment”) has been remitted to the
Seller as of the date of this Agreement and further hereby agree and acknowledge
that such Prior Payment shall be applied to the Deposit and the Second Payment
as set forth in Section 1.6(a) and Section 1.6(b), respectively, due to Seller
by Purchaser in accordance with the terms and conditions of this Agreement.

 

1.8 Delivery to Title Company. Upon payment in full of the Purchase Price as set
forth in Section 1.5 of this Agreement, the parties shall deposit an executed
copy of this Agreement with a to be determined Title Company (“Title Company”)
and this Agreement shall (along with such supplementary instructions not
inconsistent with this Agreement as either party hereto may deliver to Title
Company) serve as escrow instructions to Title Company for the consummation of
the purchase and sale contemplated hereby. Seller and Purchaser agree to execute
such additional escrow instructions as Title Company may reasonably require and
which are not inconsistent with the provisions hereof; provided, however, that
in the event of any conflict between the provisions of this Agreement and any
supplementary escrow instructions, the terms of this Agreement shall control.

 

1.9 Right to Use.

 

(a) Isabelle Property. Upon receipt by Seller of an aggregate amount of Three
Million Five Hundred Thousand ($3,500,000) dollars of the total Purchase Price
(the “Isabelle Right to Use Date”), Purchaser shall: (i) be granted the sole and
absolute right to collect and receive all rents and other revenue generated from
the Isabelle Property, (notwithstanding the foregoing, the right to receive and
collect revenue from the Isabelle Property, expressly excluded the right to
collect and receive any revenue generated from the sale or cultivation of
cannabis thereon, as fully set forth in Section 4.6, hereof), enter the Isabelle
Property without restriction, make additional improvements and have the sole and
absolute right to enjoy all benefits of unconditional ownership of the Isabelle
Property in fee simple, except as otherwise expressly provided for in this
Agreement; and (ii) be responsible for all costs of maintaining the property,
including the payment of all applicable property taxes (collectively the
“Isabelle Right to Use”). Seller has the right to grant to Purchaser the
Isabelle Right to Use in accordance with the terms and conditions of this
Agreement and shall evidence such right in the Seller’s Property Interest
Ownership Documents, as defined below.

 

(b) Pueblo Property. Upon receipt by Seller of an aggregate amount of Three
Million Five Hundred Thousand ($3,500,000) dollars of the total Purchase Price
(the “Pueblo Right to Use Date”), Purchaser shall: (i) be granted the sole and
absolute right to collect and receive all rents and other revenue generated from
the Pueblo Property, (notwithstanding the foregoing, the right to receive and
collect revenue from the Pueblo Property, expressly excluded the right to
collect and receive any revenue generated from the sale or cultivation of
cannabis thereon, as fully set forth in Section 4.6, hereof), enter the Pueblo
Property without restriction, make additional improvements and have the sole and
absolute right to enjoy all benefits of unconditional ownership of the Pueblo
Property in fee simple, except as otherwise expressly provided for in this
Agreement; and (ii) be responsible for all costs of maintaining the property,
including the payment of all applicable property taxes (collectively the “Pueblo
Right to Use”). Seller has the right to grant to Purchaser the Pueblo Right to
Use in accordance with the terms and conditions of this Agreement and shall
evidence such right in the Seller’s Property Interest Ownership Documents, as
defined below.

 

(c) Madison St. Property. Immediately upon execution of this Agreement (the
“Madison St. Right to Use Date”), Purchaser shall: (i) be granted the sole and
absolute right to the sole and absolute right to collect and receive all rents
and other revenue generated from the Madison St. Property, (notwithstanding the
foregoing, the right to receive and collect revenue from the Madison St.
Property, expressly excluded the right to collect and receive any revenue
generated from the sale or cultivation of cannabis thereon, as fully set forth
in Section 4.6, hereof), enter the Madison St. Property without restriction,
make additional improvements and have the sole and absolute right to enjoy all
benefits of unconditional ownership of the Madison St. Property, except as
otherwise expressly provided for in this Agreement; (ii) be granted the sole and
absolute right to enter into sub-leases or other similar assignments in
connection with the Madison St. Property; and (iii) be responsible for all costs
of maintaining the Madison St. Property, including the payment of all applicable
property taxes (collectively the “Madison St. Right to Use”). Seller has the
right to grant to Purchaser the Madison St. Right to Use in accordance with the
terms and conditions of this Agreement and shall evidence such right in the
Seller’s Property Interest Ownership Documents, as defined below.

 

(d) Definitions.

 

(i) Right to Use. The Isabelle Right to Use, the Pueblo Right to Use and the
Madison St. Right to Use shall be collectively referred to hereinafter as the
“Right to Use.”

 

(ii) Right to Use Date. The Isabelle Right to Use Date, the Pueblo Right to Use
Date and the Madison St. Right to Use Date shall be collectively referred to
hereinafter as the “Right to Use Date.”

 

1.10 Assignment and Renegotiation of Existing Leases. Upon payment in full of
the Deposit as set forth in Section 1.6 of this Agreement, Seller shall cause
the “Leases” (which hereinafter refers to the Isabelle Leases, Pueblo Leases and
Madison Leases in the aggregate) to be renegotiated and amended on behalf of and
for the benefit of Purchaser to reflect the assumption of all of Seller’s
rights, title and interests in the Leases by Purchaser and to include certain
additional revised terms and conditions, which shall be determined by Purchaser,
in its sole discretion, at the time of the amendment of the Leases.

 

ARTICLE II

CONFIRMATION OF SELLER’S PROPERTY INTEREST, TITLE AND SURVEY

 

2.1 Documents Evidencing Seller’s Property Interest Ownership. Seller owns the
Properties and/or has a contractual right to purchase the Properties in fee
simple and without lien or encumbrance (collectively the “Seller’s Property
Rights”). Seller shall obtain and deliver to Purchaser all documents evidencing
ownership by Seller of its rights, title and interest in the Properties
(“Seller’s Property Interest Ownership Documents”) within ten (10) days from the
date of execution hereof. The Seller’s Property Interest Ownership Documents
shall include, but are not limited to, the following: (i) identity of all of the
owners of an interest in the Properties (the “Owners”); (ii) documents
evidencing ownership of the Properties in fee simple by the Owners, in the
aggregate; (iii) documents evidencing ownership of the Seller’s Property Rights
by the Seller; (iv) documents evidencing Seller’s right to sub-lease to
Purchaser the Madison St. Property; (v) documents evidencing Seller’s right to
grant to Purchaser the Right to Use, as defined above; and (vi) certificates of
warranty executed by the Seller and the Owners, duly notarized by a Notary
Public, confirming that: (a) the Owners, in the aggregate, own fee simple title
to the Properties and that such title is marketable, insurable, alienable,
divisible, assignable and free and clear of all liens and encumbrances; (b)
Seller’s Property Rights were duly authorized, executed, and granted by the
Owners to Seller and thereby grants Seller the right to sell, transfer and/or
sub-lease the Properties to Purchaser in accordance with the terms of this
Agreement; (c) Seller has the right to grant to Purchaser the Right to Use; (d)
Seller is authorized and has the capacity to exercise the Seller’s Property
Rights; and (e) upon exercise of the Seller’s Property Rights in accordance with
the terms of this Agreement, Seller shall obtain title to the Properties from
the Owners in fee simple, without lien or encumbrance, and shall be authorized
and have the capacity to convey to Purchaser such title to the Properties in fee
simple without lien or encumbrance.

2.2 Exercise of Seller’s Property Rights. On or prior to receipt by Seller of
the Final Payment (unless otherwise agreed in writing by the Parties), Seller
shall: (i) have exercised the Seller’s Property Rights in accordance with its
terms and have full fee simple title to the Properties, which shall be
marketable, insurable and transferable to Purchaser without lien or encumbrance;
and (ii) convey to Purchaser documents evidencing: (a) valid exercise of the
Seller’s Property Rights by Seller; (b) valid conveyance of fee simple title to
the Properties from the Owners to the Seller; and (c) ownership of the
Properties by Seller in fee simple without lien or encumbrance. In the event
that Seller has not exercised its Seller’s Property Rights, obtained fee simple
title to the Properties or otherwise performed its obligations under this
Agreement by the date the Final Payment is due from Purchaser, Purchaser shall
have the right to withhold payment of the Final Payment to Seller until such
time Seller obtains fee simple title to the Properties that is marketable,
insurable and transferable to Purchaser without lien or encumbrance.

 

2.3 Title Examination. Seller shall obtain and deliver, to Purchaser from the
Title Company, a title insurance report (the “Title Commitment”) covering the
Properties within ten (10) days from the date of execution hereof (the Effective
Date of this Agreement through the expiration of the Inspection Period, as
defined below, shall the referred to hereinafter as the “Title Examination
Period”). The Title Commitment shall contain all customary warranties and
representations as to marketable and insurable fee simple title to the
Properties in the name of Seller, or the Owners, if any, free and clear of all
liens and encumbrances except as stated in this Agreement, and shall contain all
other standard warranties and representations upon which purchasers of property
may rely upon in acquiring properties with fee simple title.

 

2.4 Survey. During the Inspection Period, Seller shall deliver to Purchaser and
the Title Company, Seller's existing survey of the Properties (the “Survey”).
Purchaser may, at its sole cost and expense, update and recertify the Survey.

 

2.5 Title Objections; Cure of Title Objections. Purchaser shall have until the
date of expiration of the Inspection Period, as defined below, to notify Seller,
in writing, of such objections as Purchaser may have to anything contained in
the Title Commitment, the Survey or the Seller’s Property Interest Ownership
Documents. Any item contained in the Title Commitment, any matter shown on the
Survey or any matter contained in the Seller’s Property Interest Ownership
Documents to which Purchaser does not object prior to the expiration of the
Inspection Period shall be deemed a “Permitted Exception.” In the event
Purchaser shall notify Seller of objections to items in the Title Commitment,
matters shown on the Survey or matters shown on the Seller’s Property Interest
Ownership Documents prior to the expiration of the Inspection Period, Seller
shall have the right, but not the obligation, to cure such objections. Within
ten (10) days after receipt of Purchaser's notice of objections, Seller shall
notify Purchaser in writing whether Seller elects to attempt to cure such
objections. If Seller elects to attempt to cure, and provided that Purchaser
shall not have terminated this Agreement in accordance with Section 3.2, Seller
shall have until the date of Closing to attempt to remove, satisfy or cure the
same and for this purpose Seller shall be entitled to a reasonable adjournment
of the Closing if additional time is required, but in no event shall the
adjournment exceed sixty (60) days after the date for Closing set forth in
Section 4.1. If Seller elects not to cure any objections specified in
Purchaser's notice, or if Seller is unable to effect a cure prior to the Closing
(or any date to which the Closing has been adjourned), Purchaser shall have the
following options: (i) to accept a conveyance of the Properties subject to the
Permitted Exceptions, specifically including any matter objected to by Purchaser
which Seller is unwilling or unable to cure, and with reduction of the Purchase
Price; or (ii) to terminate this Agreement by sending written notice thereof to
Seller, and upon delivery of such notice of termination, this Agreement shall
terminate, and thereafter neither party shall have any further rights,
obligations or liabilities hereunder except to the extent that any right,
obligation or liability set forth herein expressly survives termination of this
Agreement. If Seller notifies Purchaser that Seller does not intend to attempt
to cure any title objection; or if, having commenced attempts to cure any
objection, Seller later notifies Purchaser that Seller will be unable to effect
a cure thereof; Purchaser shall, within five (5) days after such notice has been
given, notify Seller in writing whether Purchaser shall elect to accept the
conveyance under clause (i) or to terminate this Agreement under clause (ii) of
this Section 2.5. If any of Purchaser's objections consist of delinquent taxes,
mortgages, deeds of trust, security agreements, construction or mechanic's
liens, tax liens or other liens or charges in a fixed sum or capable of
computation as a fixed sum, then, to that extent, notwithstanding anything
herein to the contrary, Seller shall be obligated to pay and discharge (or bond
against in a manner sufficient to cause the Title Company to insure over such
objections) any such Purchaser's objections at Closing.

 

2.6 Conveyance of Title. At Closing, Seller shall convey and transfer to
Purchaser such titles to the Properties as will enable the Title Company to
issue to Purchaser, at Purchaser's expense, ALTA owner's policies of title
insurance (the “Title Policy”) covering the Properties, in the full amount of
the Purchase Price. Notwithstanding anything contained herein to the contrary,
the Properties shall be conveyed subject only to the following matters, which
shall be deemed to be Permitted Exceptions:

 

 

(a)  the rights of tenants, as tenant only, under the Leases;

 

(b)  the lien of all ad valorem real estate taxes and assessments not yet due
and payable as of the date of Closing, subject to adjustment as herein provided;

 

(c)  local, state and federal laws, ordinances or governmental regulations,
including but not limited to, building and zoning laws, ordinances and
regulations, now or hereafter in effect relating to the Properties; and,

 

(d)  items appearing of record or shown on the Survey, general and specific
plans and planned development permits, and, in either case, not objected to by
Purchaser or waived or deemed waived by Purchaser.

 

2.7 Pre-Closing “Gap” Title Defects. Whether or not Purchaser shall have
furnished to Seller any notice of title objections pursuant to the foregoing
provisions of this Agreement, Purchaser may, at or prior to Closing, notify
Seller in writing of any objections to title first raised by the Title Company
or the Surveyor between (a) the date of Purchaser's receipt of the Title
Commitment and (b) the date on which the transaction contemplated herein is
scheduled to close. With respect to any objections to title set forth in such
notice, Seller shall have the same option to cure and Purchaser shall have the
same option to accept title subject to such matters or to terminate this
Agreement as those which apply to any notice of objections made by Purchaser
before the expiration of the Inspection Period. If Seller elects to attempt to
cure any such matters, the date for Closing shall be automatically extended by a
reasonable additional time to effect such a cure, but in no event shall the
extension exceed sixty (60) days after the date for Closing. Seller shall not,
after the Effective Date, subject the Properties to or permit or suffer to exist
any liens, encumbrances, covenants, conditions, restrictions, easements or other
title matters or seek any zoning changes without Purchaser's prior written
consent.

 

ARTICLE III

INSPECTION PERIOD; CERTAIN AGREEMENTS

 

3.1 Right of Inspection. During the period beginning upon the Effective Date and
ending at 5:00 p.m. (local time at the Properties) on the date which is
twenty-five (25) days thereafter (hereinafter referred to as the “Inspection
Period”), Purchaser shall have the right to make a physical inspection of the
Properties and to examine at such place or places at the Properties designated
by Seller, or elsewhere as the same may be located, any operating files
maintained by Seller or Manager in connection with the operations, current
maintenance and management of the Properties, including, without limitation, the
Leases, lease files, insurance policies, bills, invoices, receipts and other
general records relating to the income and expenses of the Properties,
correspondence, surveys, plans and specifications, warranties for services and
materials provided to the Properties, environmental audits and similar
materials, but excluding materials not directly related to the operations,
current maintenance or management of the Properties such as, without limitation,
tax records and similar proprietary, elective or confidential information.
Purchaser understands and agrees that any on-site inspections of the Properties
shall be conducted upon at least twenty-four (24) hours’ prior written notice to
Seller and in the presence of Seller or its representative. Such physical
inspection shall not unreasonably interfere with the use of the Properties by
Seller or its tenants nor shall Purchaser's inspection damage the Properties in
any respect. Such physical inspection shall not be invasive in any respect
(unless Purchaser obtains Seller's prior written consent, not to be unreasonably
withheld), and in any event shall be conducted in accordance with standards
customarily employed in the industry and in compliance with all governmental
laws, rules and regulations. Following each entry by Purchaser with respect to
inspections or tests on the Properties, Purchaser shall restore the Properties
to a condition which is as near to its original condition as existed prior to
any such inspections or tests. Seller shall cooperate with Purchaser in its due
diligence but shall not be obligated to incur any liability or expense in
connection therewith. Purchaser shall not contact any tenants of the Properties
without obtaining Seller's prior consent and shall not disrupt Seller's or any
tenant's activities on the Properties. Purchaser agrees to indemnify against and
hold Seller harmless from any claim for liabilities, costs, expenses (including
reasonable attorneys’ fees actually incurred) damages or injuries arising out of
or resulting from the inspection of the Properties by Purchaser or its agents,
and notwithstanding anything to the contrary in this Agreement, such obligation
to indemnify and hold harmless Seller shall survive Closing or any termination
of this Agreement. All inspections shall occur at reasonable times agreed upon
by Seller and Purchaser. Seller has delivered to Purchaser or made the same
available for reviewing or printing the following (the “Submission Matters”):

 

1.Leases and agreements for any leased items of personal property.

2.To the extent in Seller's possession, copies of all Licenses (which
hereinafter refers to the Isabelle Licenses, Pueblo Licenses and Madison
Licenses in the aggregate) and Approvals (which hereinafter refers to the
Isabelle Approvals, Pueblo Approvals and Madison Approvals in the aggregate).

3.The operating and capital expenditure budget for the Properties for the
current calendar year.

3.The operating and capital expenditure budget for the Properties for the
current calendar year.

4.Copies of receipts for all personal property taxes and ad valorem taxes and
special assessments assessed against the Properties for the current calendar
year and prior three calendar years.

5.Copies of any environmental assessments for the Properties in Seller's
possession.

6.Copies of any parking, structural, mechanical or other engineering reports or
studies related to the Properties in Seller's possession.

7.A copy of Seller's title insurance policy and Survey.

8.A schedule of any pending litigation affecting the Properties.

9.Copies of any zoning and utility letters affecting the Properties.

10.Seller’s Property Interest Ownership Documents

 

3.2 Right of Termination. In the event Purchaser determines (such determination
to be made in Purchaser's sole discretion) that the Properties are not suitable
for its purposes, Purchaser shall have the right to terminate this Agreement by
giving written notice thereof to Seller prior to Closing.

 

ARTICLE IV

CLOSING

 

4.1 Time and Place. The Parties shall conduct an escrow closing (the “Closing”)
on such date which is five (5) days after the Final Payment of the Purchase
Price has been tendered by Purchaser to Seller, or such later date as the same
may be extended to pursuant to Section 2.5 or 2.7 (the “Closing Date”). In the
event the Closing does not occur on or before the Closing Date, the Title
Company shall, unless it is notified by both Seller and Purchaser to the
contrary within three (3) days after the Closing Date, return to the depositor
thereof items which were deposited thereunder; any such return shall not,
however, relieve either party of any liability it may have for its wrongful
failure to close. At Closing, Seller and Purchaser shall perform the obligations
set forth in, respectively, Section 4.2 and Section 4.3, the performance of
which obligations shall be concurrent conditions to the obligations of Seller
and Purchaser to close.

 

4.2 Seller's Obligations at Closing. Not less than one business day prior to
Closing, Seller shall deliver to Title Company:

 

(a)  a duly executed grant deed in the form of Exhibit H, conveying the “Land”
(which hereinafter refers to the Isabelle Land, Pueblo Land and Madison Land in
the aggregate) and “Improvements” (which hereinafter refers to the Isabelle
Improvements, Pueblo Improvements and Madison Improvements in the aggregate),
subject only to the Permitted Exceptions; the warranty of title in the Deed will
be only as to claims made by, through or under Seller and not otherwise;

 

(b)  four (4) duly executed counterparts of a bill of sale in the form of
Exhibit I in connection with each of the Properties;

 

(c)  four (4) duly executed counterparts of an assignment and assumption
agreement with respect to the Leases in the form of Exhibit J in connection with
each of the Properties;

 

(d)  duly executed notices in the form of Exhibit L which Purchaser shall send
to tenants informing them of the sale of the Properties and of the assignment to
Purchaser of Seller's interest in, and obligations under, the Leases (including,
if applicable any security deposits) and directing that all rent and other sums
payable after the Closing under the Leases shall be paid as set forth in the
notice;

 

(e)  a certificate, dated as of the date of Closing and executed on behalf of
Seller by a duly authorized officer thereof, stating that the representations
and warranties of Seller contained in this Agreement are true and correct in all
material respects as of the date of Closing (with appropriate modifications of
those representations and warranties made in Section 5 to reflect any changes
therein including without limitation any changes resulting from actions under
Section 5) or identifying any representation or warranty which is not, or no
longer is, true and correct and explaining the state of facts giving rise to the
change. In no event shall Seller be liable to Purchaser for, or be deemed to be
in default hereunder by reason of, any breach of representation or warranty
which results from any change that is expressly permitted under the terms of
this Agreement or is beyond the reasonable control of Seller to prevent;
provided, however, that the occurrence of a change which is not permitted
hereunder or is beyond the reasonable control of Seller to prevent shall, if
materially adverse to Purchaser, constitute the non-fulfillment of the condition
set forth in Section 4.18(b); if, despite changes or other matters described in
such certificate, the Closing occurs, Seller's representations and warranties
set forth in this Agreement shall be deemed to have been modified by all
statements made in such certificate;

 

(f)  such evidence as the Title Company may reasonably require as to the
authority of the person or persons executing documents on behalf of Seller;

 

(g)  the Leases and licenses and permits, if any, in the possession of Seller or
Seller's agents, together with such property files and records which are
material in connection with the continued operation, leasing and maintenance of
the Properties which, at Purchaser's election, may be delivered outside of
Escrow on the Closing Date; and,

 

(h)  such agreements, affidavits or other documents as may be required by the
Title Company to issue the title policies to Purchaser subject only to the
Permitted Title Exceptions and to eliminate such standard exceptions and to
issue such endorsements thereto which may be eliminated and issued under
applicable State law and which are customarily required by institutional
investors purchasing property comparable to the Properties.

 

Purchaser shall cooperate with Seller for a period of two (2) years after the
Closing in case of Seller's need in response to any legal requirements, tax
audits, tax return preparation or litigation threatened or brought against
Seller, by allowing Seller and its agents or representatives access, upon
reasonable advance notice (which notice shall identify the nature of the
information sought by Seller), at all reasonable times to examine and make
copies of any and all instruments, files and records, which right shall survive
the Closing.

 

4.3 Purchaser's Obligations at Closing. At or prior to Closing, Purchaser shall
deliver to Title Company or in the case of the Purchase Price to the Seller:

 

(a)  the full amount of the Purchase Price, it being agreed that at Closing the
Prior Payment shall be applied towards payment of the Purchase Price;

 

(b)  four (4) duly executed counterparts of the instruments described in
Sections 4.2(b), 4.2(c), 4.2(d), 4.2(h), 4.2(k) and 4.2(l) in connection with
each of the Properties;

 

(c)  such evidence as the Title Company may reasonably require as to the
authority of the person or persons executing documents on behalf of Purchaser;

 

(d)  such additional documents as shall be reasonably required to consummate the
transaction contemplated by this Agreement; and

 

(e)  the Closing Statement.

 

4.4 Title Company's Obligations at Closing. At Closing, Title Company shall:

 

(a)  at such time as Title Company holds notice that the entire Purchase Price
has been delivered to Seller, Title Company shall record and file the Deeds in
the Official Records of Boulder County, Colorado, the Official Records of Pueblo
County, Colorado and the Official Records of Denver County, Colorado (as
applicable).

 

(b)  deliver to each of Seller and Purchaser two (2) fully executed counterparts
of the instruments described in Sections 4.2(b), 4.2(c), 4.2(d), 4.2(h), 4.2(k)
and 4.2(l) in connection with each of the Properties;

 

(c)  deliver to Purchaser fully executed originals of the notices described in
Section 4.2(e) and the certificate described in Section 4.2(f), and deliver
copies of each of such instruments to Seller;

 

(d)  deliver to each of Seller and Purchaser a fully executed counterpart of the
documents described in Sections 4.2(j) and 4.2(m); and

 

(e)  deliver to Seller and Purchaser the Closing Statement prepared by Title
Company and approved by Seller and Purchaser. The parties will endeavor to cause
the Title Company to submit a preliminary draft of the Closing Statement not
less than two (2) business days prior to Closing.

 

4.5 Apportionments. The following apportionments shall be made between Seller
and Purchaser as of 11:59 P.M. local time at the Properties, on the day
immediately preceding the Right to Use Date of the respective Property (the
“Apportionment Date”). Where applicable, the apportionments shall be made by the
Purchaser and Seller pursuant to and as defined in Section 4.17.

 

(a)  Amounts paid or payable under the Leases, under any new leases executed
after the date of this Agreement pursuant to the provisions hereof. At the
Closing, Seller shall either deliver to Purchaser any security deposits actually
held by Seller pursuant to the Leases or credit to the account of Purchaser the
amount of such security deposits (to the extent such security deposits are not
applied against delinquent rentals or otherwise as provided in the Leases).
Unpaid and delinquent rent under the Leases collected by Seller and Purchaser
after the Closing Date shall be delivered as follows: (a) if Seller hereafter
collects any unpaid or delinquent rent for the Properties, Seller shall deliver
to Purchaser any such rent relating to the date of Closing and any period
thereafter within fifteen (15) days after the receipt thereof, and (b) if
Purchaser hereafter collects any unpaid or delinquent rent from the Properties,
Purchaser shall deliver to Seller any such rent relating to the period prior to
the date of Closing within fifteen (15) days after the receipt thereof. Seller
and Purchaser agree that (i) all rent received by Seller after the date of
Closing shall be applied first to delinquent rentals, if any, in the order of
their maturity, and then to current rentals, and (ii) all rent received by
Purchaser after the date of Closing shall be applied first to current rentals
and then to delinquent rentals, if any, in inverse order of maturity. Purchaser
will make a good faith effort after Closing to collect all rents in the usual
course of Purchaser's operation of the Properties, but Purchaser will not be
obligated to institute any lawsuit or other collection procedures to collect
delinquent rents. Purchaser hereby assumes responsibility for the payment of any
unpaid leasing commissions and tenant inducement costs with respect to the
Properties under the Leases from and after the Effective Date.

 

(b)  General real estate taxes, water or sewer rates and charges (if not
metered), personal property taxes, or any other governmental tax or charge
levied or assessed against the Properties (collectively, the “Taxes”), relating
to the Properties for the year in which Closing occurs. If the Closing shall
occur before the actual Taxes for the year of Closing are known, the
apportionment of Taxes shall-be upon the basis of the latest available tax rates
and assessed value of the Properties, provided that, if the Taxes for the year
of Closing are thereafter determined to be more or less than the Taxes for the
preceding year (after any appeal of the assessed valuation thereof is
concluded), Seller and Purchaser promptly (but no later than the date that is
thirty (30) days from and after the date that the final invoices for taxes for
the Properties for the year in which the Closing occurs are issued by the
applicable taxing authority, except in the case of an ongoing tax protest) shall
adjust the proration of such Taxes, and Seller or Purchaser, as the case may be,
shall pay to the other any amount required as a result of such adjustment.
Further, if Seller undertakes a tax protest with respect to all or any portion
of the Taxes for the year in which Closing occurs or any previous year, any
refund relating to any previous year shall be the property of Seller, and any
refund relating to the year in which Closing occurs shall be prorated as of the
Apportionment Date. All Taxes assessed for periods after the date of Closing
shall be paid by Purchaser.

 

(c)  With respect to electricity, telephone, gas, water and sewer services that
are metered and other utilities (collectively, the “Utilities”), Seller shall
endeavor to have the respective companies providing the Utilities read the
meters for the Utilities on or immediately prior to the Apportionment Date.
Seller shall be responsible for all charges based on such final meter reading,
and Purchaser shall be responsible for all charges thereafter. If such readings
are not obtainable, then, until such time as readings are obtained, charges for
all Utilities for which readings were not obtained shall be prorated as of the
Apportionment Date based upon the per diem rate obtained by using the last
period and bills for such Utilities that are available. Upon the taking of a
subsequent actual reading, such apportionment shall be adjusted to reflect the
actual per diem rate for the billing period in which the date of Closing falls,
and Seller or Purchaser, as the case may be, shall promptly deliver to the other
the amount determined to be due upon such adjustment.

     

4.6 Property Not Included In Sale. The following shall not be included in the
Properties to be sold, leased or otherwise owned by Purchaser hereunder, any
marijuana plants in whatever form, i.e. seeds, plants, stems, flowers, leaves or
any other things that may be derived therefrom, including any cash being kept on
the property which is derived in any way, either directly or indirectly, from
the production, sale or cultivation of marijuana belonging to any current tenant
occupying the Land or Improvements thereon. The foregoing exclusions shall not
apply to the collection and receipt of rents derived through the Purchasers
normal course of business.

 

4.7 Settlement of Apportionments. If the computation of the apportionments and
adjustments described in this Section 4 shows that a net amount is owed by
Seller to Purchaser, such amount shall be credited against the Purchase Price as
provided for in Section 1.6. If such computation shows that a net amount is owed
by Purchaser to Seller, such amount shall be paid by wire transfer to Seller by
Purchaser on the Closing Date in addition to the payment of the cash portion of
the Purchase Price to be made by Purchaser under Section 1.6.

 

4.8 Post-Closing Collections and Adjustments. Concurrently with the Closing,
representatives of Seller and Purchaser shall cause a preliminary closing
statement to be prepared reflecting their respective closing costs, the
apportionments, the payment of the Purchase Price and all other terms of this
Agreement affecting or relating to the amount of and adjustments to the
consideration to be paid for the Properties. In the event either Purchaser or
Seller becomes aware of any item in the closing statement which requires
adjustment as a result of new information or the ascertainment of actual amounts
for items which are the subject of estimates at Closing, it shall promptly
advise the other in writing and provide such supporting documentation as shall
reasonably be required. Upon the ninetieth (90th) day following the date of
Closing, or earlier upon mutual agreement of the parties, Purchaser or Seller,
as the case may be, shall make such additional payment or refund as shall be
required by the aggregate of any such post-Closing adjustments, and a final
closing statement shall be prepared to reflect such revisions, subject only to
subsequent adjustments provided for in Section 4.5. In addition, if accurate
allocations cannot be made at Closing or on the final closing statement because
current bills are not then obtainable (as, for example, in the case of utility
bills or real estate or personal property taxes), the parties shall allocate
such revenue or expenses at Closing on the best available information, subject
to adjustment upon receipt of the final bill or other evidence of the applicable
revenue or expense. The obligation to make the adjustment shall survive the
Closing. Any revenue received or expense incurred by Seller or Purchaser with
respect to the Properties after the date of Closing shall be promptly allocated
in the manner described herein and the parties shall promptly pay or reimburse
any amount due. This provision shall not merge with the grant deed delivered
hereunder but shall survive Closing.

 

4.9 Closing Statement. On the day of or on the day prior to the day of Closing,
Purchaser and Seller shall make such inventories and examinations as Purchaser
and Seller may deem necessary, make the apportionments, adjustments and
prorations required under this Agreement. Purchaser and Seller shall make the
apportionments described in this Article IV, except as specifically set forth to
the contrary herein. The determination shall be used in the preparation of the
Closing statement which will show the net amount of apportionments and
adjustments due either to Seller or to Purchaser as the result of the prorations
and credits specified in this Article IV.

 

4.10 Conditions Precedent to Obligation of Purchaser. The obligation of
Purchaser to consummate the transaction hereunder shall be subject to the
fulfillment on or before the date of Closing of all of the following conditions,
any or all of which may be waived by Purchaser in its sole discretion:

 

(a)  Seller shall have delivered to Purchaser all of the items required to be
delivered to Purchaser pursuant to the terms of this Agreement, including but
not limited to, those provided for in Section 2.1, Section 2.2, Section 2.3,
Section 2.4 and Section 4.2.

 

(b)  All of the representations and warranties of Seller contained in this
Agreement shall be true and correct in all material respects as of the date of
Closing (with appropriate modifications permitted under this Agreement or not
adverse to Purchaser).

 

(c)  Seller shall have performed and observed, in all material respects, all
covenants and agreements of this Agreement to be performed and observed by
Seller as of the date of Closing, including but not limited to, those provided
for in Article 5.

 

4.11 Conditions Precedent to Obligation of Seller. The obligation of Seller to
consummate the transaction hereunder shall be subject to the fulfillment on or
before the date of Closing of all of the following conditions, any or all of
which may be waived by Seller in its sole discretion:

 

(a)  Seller shall have received the Purchase Price pursuant to and payable in
substantially the manner provided for in this Agreement.

 

(b)  Purchaser shall have delivered to Seller all of the items required to be
delivered to Seller pursuant to the terms of this Agreement, including but not
limited to, those provided for in Section 4.3.

 

(c)  All of the representations and warranties of Purchaser contained in this
Agreement shall be true and correct in all material respects as of the date of
Closing.

 

(d)  Purchaser shall have performed and observed, in all material respects, all
covenants and agreements of this Agreement to be performed and observed by
Purchaser as of the date of Closing, including, but not limited to, those
provided for in Article V.

 

ARTICLE V

REPRESENTATIONS, WARRANTIES AND COVENANTS

 

5.1 Representations and Warranties of Seller. Seller hereby makes the following
representations and warranties to Purchaser as of the Effective Date:

 

(a)  Organization and Authority. Seller has been duly organized and is validly
existing and in good standing under the laws of Colorado. Seller has the full
right and authority to enter into this Agreement and, to transfer all of the
Properties to be conveyed by Seller pursuant hereto and to consummate or cause
to be consummated the transactions contemplated herein to be made by Seller. The
person signing this Agreement on behalf of Seller is authorized to do so. The
execution and delivery of, and the performance by Seller of its obligations
under this Agreement do not, and will not contravene, or constitute a default
under, any provision of applicable law or regulation or any agreement, judgment,
injunction, order, decree or other instrument binding upon Seller or to which
the Properties are subject, or result in the creation of any lien or other
encumbrance on any asset of Seller. Seller has not applied for or consented to
the appointment of, or the taking of possession by, a receiver, custodian,
trustee or liquidator of itself or of all or a substantial part of its property,
admitted in writing its inability to pay its debts as they become due, made a
general assignment for the benefit of its creditors, filed a voluntary petition
or commence a voluntary case or proceeding under the Federal Bankruptcy Code (as
now or hereafter in effect), been adjudicated a bankrupt or insolvent, failed to
controvert in a timely and appropriate manner, or acquiesced in writing to, any
petition filed against it in an involuntary case or proceeding under the Federal
Bankruptcy Code (as now or hereafter in effect), or taken any corporate or
partnership action for the purpose of effecting any of the foregoing.

 

(b)  Pending Actions. There is no action, suit, arbitration, unsatisfied order
or judgment, governmental investigation or proceeding pending, or to Seller's
knowledge, threatened against the Properties or the transaction contemplated by
this Agreement, except for those listed on Exhibit B to this Agreement, which,
if adversely determined, could individually or in the aggregate have a material
adverse effect on title to the Properties or any portion thereof, could
materially and adversely affect the business, financial position or results of
operations of Seller or the Properties, or which could in any material way
interfere with the consummation by Seller of the transaction contemplated by
this Agreement.

 

(c)  Leases. Except as set forth in the Lease Schedule, to Seller's knowledge,
there are no other leases or occupancy agreements to which Seller is a party
affecting the Properties. Seller has not received any advance rent or advance
compensation under any Leases in excess of one month. No brokerage commissions
or compensation of any kind shall hereafter be due in connection with the
Leases. To Seller's knowledge, no party is in default under any Lease. Seller
has received no notice of any intention by any of the parties to any of the
Leases to cancel the same. Seller does not represent or warrant that any of the
Leases will be in force or effect at Closing or that the tenants under the
Leases will have performed its or their obligations thereunder. The termination
of any of the Leases prior to Closing by reason of the tenant's default or
otherwise shall not affect the obligations of Purchaser under this Agreement in
any manner or entitle Purchaser to an abatement of or credit against the
Purchase Price or give rise to any other claim on the part of Purchaser.

 

(d)  Condemnation. No condemnation proceedings relating to the Properties are
pending or to Seller's knowledge, threatened.

 

(e)  Violations. Except as set forth on Exhibit T, to Seller's actual knowledge,
Seller has received no written notice that the use and operation of the
Properties is not in full compliance with applicable building codes,
environmental, zoning and land use laws, and other applicable local, state and
federal laws and regulations, and Seller has not received prior to the Effective
Date any written notification from any governmental or public authority (i) that
the Properties are in violation of any applicable fire, health, building, use,
occupancy or zoning laws where such violation remains outstanding and, if
unaddressed, would have a material adverse effect on the use of the Properties
as currently owned and operated or (ii) that any work is required to be done
upon or in connection with the Properties, where such work remains outstanding
and, if unaddressed, would have a material adverse effect on the use of the
Properties as currently owned and operated.

 

(f)  Taxes. To Seller's best knowledge, all federal, state and local employment
taxes, payroll taxes, excise taxes, occupancy or sales or use taxes and real
property (including secured personal property) taxes and assessments due and
payable as of the date of this Agreement in connection with the ownership or
operation of the Land have been paid. All such taxes due and payable as of the
date of Closing will be timely paid by Seller.

 

(g)  Insurance Notices. Except as set forth in Exhibit U, Seller has not
received prior to the Effective Date any written notice from any insurance
company or board of fire underwriters of any defects or inadequacies in or on
the Properties or any part or component thereof that would materially and
adversely affect the insurability of the Properties or cause any material
increase in the premiums for insurance for the Properties that have not been
cured or repaired.

 

(h)  Environmental Matters. Except as set forth in any environmental assessment
reports in Seller's possession and delivered to Purchaser or as otherwise
disclosed in Exhibit V, Seller has received no written notification that any
governmental or quasi-governmental authority has determined that there are any
violations of, or remediation obligations under any, environmental statutes,
ordinances or regulations affecting the Properties.

 

5.2 Survival of Seller's Representations and Warranties. The representations and
warranties of Seller set forth in Section 5.1, as updated by the certificate of
Seller to be delivered to Purchaser at Closing in accordance with
Section 4.2(f), shall survive Closing for a period of nine (9) months. No claim
for a breach of any representation or warranty of Seller shall be actionable or
payable (a) if the breach in question results from or is based on a condition,
state of facts or other matter of which Purchaser has notice under the further
provisions of this Section 5, or which otherwise was known to Purchaser prior to
Closing, (b) unless the valid claims for all such breaches collectively
aggregate more than Fifty Thousand and No/100 Dollars ($50,000), in which event
the full amount of such claims shall be actionable, and (c) unless written
notice containing a description of the specific nature of such breach shall have
been given by Purchaser to Seller prior to the expiration of said nine (9) month
period and an action shall have been commenced by Purchaser against Seller
within thirty (30) days after the termination of the survival period provided
for above in this Article 5. Purchaser agrees to first seek recovery under any
insurance policies or service contracts prior to seeking recovery from Seller,
and Seller shall not be liable to Purchaser if Purchaser's claim is satisfied
from such insurance policies or service contracts.

 

5.3 Covenants of Seller. Seller hereby covenants with Purchaser as follows:

 

(a)  From the Effective Date hereof until the Closing or earlier termination of
this Agreement, Seller shall use reasonable efforts to cause the Land to be
operated and shall maintain the Properties in a manner generally consistent with
the manner in which it has been operated and maintained prior to the date
hereof.

 

(b) A copy of any new lease or renewal or modification of any Lease which Seller
wishes to execute between the Effective Date and the date of Closing will be
submitted to Purchaser for its approval prior to execution by Seller. Purchaser
agrees to notify Seller in writing within five (5) business days after its
receipt thereof of either its approval or disapproval, including all tenant
inducement costs and leasing commissions to be incurred in connection therewith.
In the event Purchaser informs Seller that Purchaser does not approve such new
Lease the renewal or modification of any existing Lease, which approval shall
not be unreasonably withheld, Seller shall not enter into such agreement. In the
event Purchaser fails to notify Seller in writing of its approval or disapproval
within five (5) business days, such failure shall be deemed the approval by
Purchaser. At Closing, Purchaser shall reimburse Seller for any tenant
inducement costs, leasing commissions or other expenses, including legal fees,
incurred by Seller pursuant to a new Lease or a renewal or a modification
approved (or deemed approved) by Purchaser.

 

5.4 Representations and Warranties of Purchaser. Purchaser hereby represents and
warrants to Seller:

 

(a)  Purchaser has the full right, power and authority to purchase the
Properties as provided in this Agreement and to carry out Purchaser's
obligations hereunder, and all requisite action necessary to authorize Purchaser
to enter into this Agreement and to carry out its obligations hereunder have
been, or by the Closing will have been, taken. The person signing this Agreement
on behalf of Purchaser is authorized to do so. The execution and delivery of,
and the performance by Purchaser of its obligations under this Agreement do not,
and will not contravene, or constitute a default under, any provision of
applicable law or regulation or any agreement, judgment, injunction, order,
decree or other instrument binding upon Purchaser, or result in the creation of
any lien or other encumbrance on any asset of Purchaser. Purchaser has not
applied for or consented to the appointment of, or the taking of possession by,
a receiver, custodian, trustee or liquidator of itself or of all or a
substantial part of its property, admitted in writing its inability to pay its
debts as they become due, made a general assignment for the benefit of its
creditors, filed a voluntary petition or commence a voluntary case or proceeding
under the Federal Bankruptcy Code (as now or hereafter in effect), been
adjudicated a bankrupt or insolvent, failed to controvert in a timely and
appropriate manner, or acquiesced in writing to, any petition filed against it
in an involuntary case or proceeding under the Federal Bankruptcy Code (as now
or hereafter in effect), or taken any corporate or partnership action for the
purpose of effecting any of the foregoing.

 

(b) There is no action, suit, arbitration, unsatisfied order or judgment,
government investigation or proceeding pending, or to Purchaser's knowledge,
threatened against Purchaser which, if adversely determined, could individually
or in the aggregate materially interfere with the consummation of the
transaction contemplated by this Agreement.

 

(c)  Purchaser has or will have funds available to it (including cash, other
liquid assets and debt available for the within transaction) sufficient to pay
the Purchase Price and otherwise fulfill Purchaser's obligations under this
Agreement.

 

(d)  The execution, delivery and performance by Purchaser of this Agreement will
not (i) conflict with, or result in any breach or violation of or default (or
give rise to any right of termination, cancellation or acceleration) under any
note, bond, indenture, lease, license, permit, agreement or other instrument or
obligation to which Purchaser is a party or by which it is or may be bound, or
(ii) violate any law, order, rule, regulation, judgment, order, decree, writ or
injunction applicable to Purchaser.

 

5.5 Survival of Purchaser's Representations and Warranties. The representation
and warranties of Purchaser set forth in Section 5.4 shall survive Closing and
shall be a continuing representation and warranty without limitation. All other
representations and warranties of Purchaser shall survive Closing for a period
of nine (9) months.

 

5.6 Covenants of Purchaser. Purchaser hereby covenants with Seller that
Purchaser shall, in connection with its investigation of the Properties during
the Inspection Period and subject to Seller's consent to any invasive testing
(not to be unreasonably withheld), inspect the Properties for the presence of
hazardous substances, and shall furnish to Seller copies of any reports received
by Purchaser in connection with any such inspection. Except for any claim
Purchaser may have for a breach of the representations and warranties of Seller
contained in this Agreement, Purchaser hereby assumes full responsibility for
such inspections and irrevocably waives any claim against Seller arising from
the presence of hazardous substances on the Properties. Purchaser shall also
furnish to Seller copies of any other reports received by Purchaser relating to
any other inspections of the Properties conducted on Purchaser's behalf, if any.

 

ARTICLE VI

DEFAULT

 

6.1 Default by Purchaser. IF THE SALE IS NOT CONSUMMATED DUE TO ANY DEFAULT BY
PURCHASER HEREUNDER, THEN SELLER MAY TERMINATE THIS AGREEMENT AND RETAIN ANY
PORTION OF THE PURCHASE PRICE RECEIVED BY SELLER FROM PURCHASER AT THE TIME OF
THE DEFAULT. THE PARTIES HAVE AGREED THAT SELLER's ACTUAL DAMAGES, IN THE EVENT
OF A FAILURE TO CONSUMMATE THIS SALE DUE TO PURCHASER's DEFAULT, WOULD BE
EXTREMELY DIFFICULT OR IMPRACTICABLE TO DETERMINE. AFTER NEGOTIATION, THE
PARTIES HAVE AGREED THAT, CONSIDERING ALL THE CIRCUMSTANCES EXISTING ON THE DATE
OF THIS AGREEMENT, THE AMOUNT OF THE PURCHASE PRICE RECEIVED BY SELLER FROM
PURCHASER IS A REASONABLE ESTIMATE OF THE DAMAGES THAT SELLER WOULD INCUR IN
SUCH EVENT. BY PLACING THEIR INITIALS BELOW, EACH PARTY SPECIFICALLY CONFIRMS
THE ACCURACY OF THE STATEMENTS MADE ABOVE AND THE FACT THAT EACH PARTY WAS
REPRESENTED BY COUNSEL WHO EXPLAINED, AT THE TIME THIS AGREEMENT WAS MADE, THE
CONSEQUENCES OF THIS LIQUIDATED DAMAGES PROVISION. THE FOREGOING IS NOT INTENDED
TO LIMIT PURCHASER's INDEMNITY OBLIGATIONS UNDER OTHER SECTIONS HEREOF.

 

SELLER:                                                                        
     

PURCHASER:                                                                

 

6.2 Default by Seller. In the event that Seller breaches in any material respect
any of its obligations or representations or warranties contained in this
Agreement, or fails to consummate this Agreement for any reason other than
Purchaser's default or the permitted termination of this Agreement by Seller or
Purchaser as herein expressly provided, Purchaser shall be entitled, as its sole
remedy, either (a) to receive the return of the Deposit and Purchase Price paid
to Seller by Buyer, which return shall operate to terminate this Agreement and
release Seller from any and all liability hereunder; provided, however, if this
Agreement is terminated by Purchaser pursuant to any provision of this Agreement
as a result of a breach of a representation, warranty or covenant of Seller,
then Seller shall be obligated upon demand to reimburse Purchaser for
Purchaser's actual out-of-pocket inspection, financing and other costs related
to Purchaser's entering into this Agreement, including, without limitation,
Purchaser's attorneys' fees, but not to exceed $100,000, or (b) to enforce
specific performance of Seller's obligation to execute the documents required to
convey the Properties to Purchaser, it being understood and agreed that the
remedy of specific performance shall not be available to enforce any other
obligation of Seller hereunder. Except as provided above, Purchaser expressly
waives its rights to seek damages in the event of Seller's default hereunder.

 

6.3 Liability of Purchaser. Except for obligations expressly assumed or agreed
to be assumed by Purchaser hereunder, Purchaser is not assuming any obligations
of Seller or any liability for claims arising out of any act, omission or
occurrence which occurs, accrues or arises prior to the Closing Date, and Seller
hereby indemnifies and holds Purchaser harmless from and against any and all
claims, costs, penalties, damages, losses, liabilities and expenses (including
reasonable attorneys' fees) that may at any time be incurred by Purchaser as a
result of (i) obligations of Seller not expressly assumed or agreed to be
assumed by Purchaser hereunder, or (2) acts, omissions or occurrences which
occur, accrue or arise prior to the Closing Date. The provisions of this
Section 6.3 shall survive the Closing of the transaction contemplated hereby.

 

ARTICLE VII

RISK OF LOSS

 

7.1 Minor Damage. In the event of loss or damage to the Properties or any
portion thereof which is not “Major” (as hereinafter defined), this Agreement
shall remain in full force and effect provided Seller performs any necessary
repairs or, at Seller's option, assigns to Purchaser all of Seller's right,
title and interest to any claims and proceeds Seller may have with respect to
any casualty insurance policies or condemnation awards relating to the premises
in question. In the event that Seller elects to perform repairs upon the
Properties, Seller shall use reasonable efforts to complete such repairs
promptly and the date of Closing shall be extended a reasonable time in order to
allow for the completion of such repairs. If Seller elects to assign a casualty
claim to Purchaser, the Purchase Price shall be reduced by an amount equal to
the deductible amount under Seller's insurance policy. Upon Closing, full risk
of loss with respect to the Properties shall pass to Purchaser.

 

7.2 Major Damage. In the event of a “Major” loss or damage, either Seller or
Purchaser may terminate this Agreement by written notice to the other party, in
which event all deposits shall be returned to Purchaser. If neither Seller nor
Purchaser elects to terminate this Agreement within ten (10) days after Seller
sends Purchaser written notice of the occurrence of major loss or damage, then
Seller and Purchaser shall be deemed to have elected to proceed with Closing, in
which event Seller shall, at Seller's option, either (a) perform any necessary
repairs, or (b) assign to Purchaser all of Seller's right, title and interest to
any claims and proceeds Seller may have with respect to any casualty insurance
policies or condemnation awards relating to the premises in question. In the
event that Seller elects to perform repairs upon the Properties, Seller shall
use reasonable efforts to complete such repairs promptly and the date of Closing
shall be extended a reasonable time in order to allow for the completion of such
repairs. If Seller elects to assign a casualty claim to Purchaser, the Purchase
Price shall be reduced by an amount equal to the deductible amount under
Seller's insurance policy. Upon Closing, full risk of loss with respect to the
Properties shall pass to Purchaser.

 

7.3 Definition of “Major” Loss or Damage. For purposes of Sections 7.1 and 7.2,
“Major” loss or damage refers to the following: (i) loss or damage to the
Properties or any portion thereof such that the cost of repairing or restoring
the premises in question to a condition substantially identical to that of the
premises in question prior to the event of damage would be, in the opinion of an
architect selected by Seller and reasonably approved by Purchaser, equal to or
greater than Two Million and No/100 Dollars ($2,000,000), and (ii) any loss due
to a condemnation which permanently and materially impairs the current use of
the Properties. If Purchaser does not give notice to Seller of Purchaser's
reasons for disapproving an architect within five (5) business days after
receipt of notice of the proposed architect, Purchaser shall be deemed to have
approved the architect selected by Seller.

 

ARTICLE VIII

MISCELLANEOUS

 

8.1 Confidentiality. Purchaser and its representatives shall hold in confidence
all data and information obtained with respect to Seller or its business,
whether obtained before or after the execution and delivery of this Agreement,
and shall not disclose the same to others; provided, however, that it is
understood and agreed that Purchaser may disclose such data and information to
the employees, consultants, accountants and attorneys of Purchaser provided that
such persons agree in writing to treat such data and information confidentially.
In the event this Agreement is terminated or Purchaser fails to perform
hereunder, Purchaser shall promptly return to Seller any statements, documents,
schedules, exhibits or other written information obtained from Seller in
connection with this Agreement or the transaction contemplated herein. It is
understood and agreed that, with respect to any provision of this Agreement
which refers to the termination of this Agreement and the return of the Deposit
to Purchaser, such Deposit shall not be returned to Purchaser unless and until
Purchaser has fulfilled its obligation to return to Seller the materials
described in the preceding sentence. In the event of a breach or threatened
breach by Purchaser or its agents or representatives of this Section 8.1, Seller
shall be entitled to an injunction restraining Purchaser or its agents or
representatives from disclosing, in whole or in part, such confidential
information. Nothing herein shall be construed as prohibiting Seller from
pursuing any other available remedy at law or in equity for such breach or
threatened breach. The provisions of this Section 8.1 shall survive Closing.

 

8.2 Public Disclosure. Prior to Closing, any release to the public of
information with respect to the sale contemplated herein or any matters set
forth in this Agreement will be made only in the form approved by Purchaser and
Seller and their respective counsel. Notwithstanding the foregoing, it is
acknowledged that Purchaser is, or is an affiliate of, fully reporting company
under the Securities Exchange Act of 1933, as amended, and the Securities
Exchange Act of 1934. Consequently, Purchaser shall have the right, subject to
the provisions of this Section 8.2, to disclose any information regarding the
transaction contemplated by this Agreement required by law as solely determined
by Purchaser's attorneys to satisfy disclosure and reporting obligations of
Purchaser or its affiliates, and in that regard, the parties acknowledge that on
or immediately after the Effective Date Purchaser shall file with the United
States Securities Exchange Commission information regarding the transaction
contemplated by this Agreement. Seller and Purchaser and their representatives
are cautioned that United States securities laws restrict the purchase and sale
of securities by anyone who possesses non-public information about the issue of
such securities. Accordingly, neither Seller or any of its Affiliates nor its
representatives may buy or sell any of the securities of the Purchaser or any of
its Affiliates (other than any such securities owned as of the Effective Date
hereof) so long as any of them is in possession of any material non-public
information about the Purchaser or any of its Affiliates, including information
contained in or derived from confidential information.

 

8.3 Discharge of Obligations. The acceptance of the Deeds by Purchaser shall be
deemed to be a full performance and discharge of every representation and
warranty made by Seller herein and every agreement and obligation on the part of
Seller to be performed pursuant to the provisions of this Agreement, except
those which are herein specifically stated to survive Closing.

 

8.4 Assignment. Purchaser may assign its rights under this Agreement without
first obtaining Seller's written approval, however, any such assignment shall
not relieve Purchaser of its obligations under this Agreement.

 

8.5 Notices. Any notice pursuant to this Agreement shall be given in writing by
(a) personal delivery, or (b) nationally recognized overnight delivery service
with proof of delivery, or (c) United States Mail, postage prepaid, registered
or certified mail, return receipt requested, or (d) legible facsimile
transmission sent to the intended addressee at the address set forth below, or
to such other address or to the attention of such other person as the addressee
shall have designated by written notice sent in accordance herewith, and shall
be deemed to have been given either at the time of personal delivery, or, in the
case of expedited delivery service or mail, as of the date of first attempted
delivery at the address and in the manner provided herein, or, in the case of
facsimile transmission, as of the date of the facsimile transmission. Unless
changed in accordance with the preceding sentence, the addresses for notices
given pursuant to this Agreement shall be as follows:

 

If to Seller:

 

Deep Blue Enterprises, LLC

2855 Monaco Parkway Drive

Denver, CO 80207

Attention: Tom Waldron, Jr.

 

If to Purchaser:

 

Canna-Life Corp.

1624 Market Street, Suite 202

Denver, CO 80202

Attention:  Alan Smith

Tel: 303-544-2115

Fax: 303-544-2116

 

8.6 Binding Effect. This Agreement shall not be binding in any way upon Seller
unless and until Seller shall execute and deliver the same to Purchaser.

 

8.7 Modifications. This Agreement cannot be changed orally, and no executory
agreement shall be effective to waive, change, modify or discharge it in whole
or in part unless such executory agreement is in writing and is signed by the
parties against whom enforcement of any waiver, change, modification or
discharge is sought.

 

8.8 Tenant Notification Letter. Purchaser shall deliver to each Tenant a signed
statement acknowledging Purchaser's receipt and responsibility for the Tenant's
security deposit (to the extent delivered by Seller to Purchaser at Closing), if
any, all in compliance with and pursuant to the applicable provisions of
applicable law.

 

8.9 Calculation of Time Periods. Unless otherwise specified, in computing any
period of time described in this Agreement, the day of the act or event after
which the designated period of time begins to run is not to be included and the
last day of the period so computed is to be included, unless such last day is a
Saturday, Sunday or legal holiday under the laws of the State in which the
Properties is located, in which event the period shall run until the end of the
next day which is neither a Saturday, Sunday or legal holiday. The final day of
any such period shall be deemed to end at 5 p.m., local time at the Properties.

 

8.10 Successors and Assigns. The terms and provisions of this Agreement are to
apply to and bind the permitted successors and assigns of the parties hereto.

 

8.11 Entire Agreement. This Agreement, including the Exhibits, contains the
entire agreement between the parties pertaining to the subject matter hereof and
fully supersedes all prior written or oral agreements and understandings between
the parties pertaining to such subject matter.

 

8.12 Further Assurances. Each party agrees that it will without further
consideration execute and deliver such other documents and take such other
action, whether prior or subsequent to Closing, as may be reasonably requested
by the other party to consummate more effectively the purposes or subject matter
of this Agreement. Without limiting the generality of the foregoing, Purchaser
shall, if requested by Seller, execute acknowledgments of receipt with respect
to any materials delivered by Seller to Purchaser with respect to the
Properties. The provisions of this Section 8.12 shall survive Closing.

 

8.13 Counterparts; Signatures. This Agreement may be executed in counterparts,
and all such executed counterparts shall constitute the same agreement. It shall
be necessary to account for only one such counterpart in proving this Agreement.
Facsimile signatures on this Agreement shall be same as original signatures for
all purposes.

 

8.14 Severability. If any provision of this Agreement is determined by a court
of competent jurisdiction to be invalid or unenforceable, the remainder of this
Agreement shall nonetheless remain in full force and effect.

 

8.15 Applicable Law. THIS AGREEMENT IS PERFORMABLE IN THE STATE IN WHICH THE
PROPERTIES ARE LOCATED AND SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE SUBSTANTIVE STATE LAWS OF COLORADO. SELLER AND PURCHASER
HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF ANY STATE COURT SITTING IN THE
STATE IN WHICH THE PROPERTIES ARE LOCATED IN ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT AND HEREBY IRREVOCABLY AGREE THAT ALL
CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING SHALL BE HEARD AND DETERMINED IN
A STATE COURT SITTING IN THE STATE IN WHICH THE PROPERTIES ARE LOCATED.
PURCHASER AND SELLER AGREE THAT THE PROVISIONS OF THIS SECTION 8.15 SHALL
SURVIVE THE CLOSING OF THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT.

 

8.16 No Third Party Beneficiary. The provisions of this Agreement and of the
documents to be executed and delivered at Closing are and will be for the
benefit of Seller and Purchaser only and are not for the benefit of any third
party (including, without limitation, Title Company and Broker), and
accordingly, no third party shall have the right to enforce the provisions of
this Agreement or of the documents to be executed and delivered at Closing.

 

8.17 Exhibits. The following exhibits, which are attached to this Agreement, are
incorporated in and shall be deemed to be an integral part of this Agreement:

 

(a) Exhibits A-1, A-2 and A-3 - Legal Descriptions of the Land

(b) Exhibits B-1, B-2 and B-3 - Lease Schedules

(c) Exhibit C-1, C-2 and C-3 - Operating Agreements

(d) Exhibit D-1, D-2 and D-3 - Approvals

(e) Exhibit E - Deeds

(f) Exhibit F - Bills of Sale

(g) Exhibit G - Assignments and Assumptions of Lease

(h) Exhibit H - Notices to Tenants

(i) Exhibit I - Notices of Violations

(j) Exhibit J - Insurance Notices

(k) Exhibit K - Environmental Matters

(l) Annex I – New Alternatives Assignment Agreement

(m) Annex II – Madison St. Lease/Option Agreement

(n) Annex III – Madison St. Assignment Agreement

 

8.18 Captions. References in this Agreement to “Section” or “Articles” are to
the numbered Sections and Articles herein. The section headings appearing in
this Agreement are for convenience of reference only and are not intended, to
any extent and for any purpose, to limit or define the text of any section or
any subsection hereof.

 

8.19 Construction. The parties acknowledge that the parties and their counsel
have reviewed and revised this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement or
any exhibits or amendments hereto.

 

8.20 Termination of Agreement. It is understood and agreed that if either
Purchaser or Seller terminates this Agreement pursuant to a right of termination
granted hereunder, such termination shall operate to relieve Seller and
Purchaser from all obligations under this Agreement, except for such obligations
as are specifically stated herein to survive the termination of this Agreement.

  

8.21 Recitals. The Recitals set forth herein are hereby approved and accepted by
the Parties and incorporated into this Agreement.

 

 

 

[Signature page follows immediately]

 

 

 

 

[SIGNATURE PAGE TO MASTER PURCHASE AND SALE AGREEMENT]

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the Effective Date.

 

 

SELLER:

 

DEEP BLUE ENTERPRISES LLC,

a Colorado Limited Liability Company

 

 

/s/ Tom Waldron, Jr.

By: Tom Waldron, Jr.

Its: Managing Member

 

 

PURCHASER:

 

CANNA-LIFE CORP.,

a Colorado corporation

 

 

 

/s/ Alan Smith

By: Alan Smith,

Its: President & CEO

 

--------------------------------------------------------------------------------

1 The Final Payment includes the $2,000,000 to be applied to the exercise of the
Madison St. Option to purchase the Madison St. Property, as set forth under
Section 11.03 of the Madison St. Lease/Option Agreement. Upon payment of the
Final Payment to Seller by Purchaser, Seller shall be responsible for paying all
amounts to the Madison St. Owner that is required to exercise the Madison St.
Option and obtain clear title, in fee simple and without lien or encumbrance, to
the Madison St. Property.