TEMPORARY FORBEARANCE AGREEMENT

 

THIS TEMPORARY FORBEARANCE AGREEMENT (this "AGREEMENT"), dated as of August 26,
2013, as amended November 26, 2013, between IDS Industries, Inc., a Nevada
corporation (the "COMPANY") and Argent Offset LLC, a California corporation, the
"HOLDER"). Capitalized terms not otherwise defined herein shall have the
meanings specified in the Note (as defined below).

 

WHEREAS, on February 27, 2013, the Company issued a $33,850.00 Convertible
Promissory Note due August 26, 2013 (the "Note") to the Holder;

 

WHEREAS, on the Company has requested to pay and the Holder has agreed to accept
a fee of $1,000.00 (the “Forbearance Fee”) to be paid on the earlier of December
15,2013 or the occurrence of a Termination Event (as defined in Section 3).

 

WHEREAS, the Company has requested, and the Holder has agreed, subject to the
terms and conditions set forth in this Agreement, for the period commencing on
August 26, 2013 and ending on the earlier of December 15, 2013 (the "PAYMENT
DATE") or the occurrence of a Termination Event (as defined in Section 3) (the
"WAIVER PERIOD"), (i) to waive any Default or Event of Default existing solely
as a result of the failure of the Company to pay to Holder all amounts due
commencing August 26, 2013 and continuing through and including December 15,
2013, with payments to be made to the Holder on the Payment Date), and (ii) that
it shall refrain from exercising its rights and remedies against the Company in
connection with the Company's failure to pay Holder prior to the Payment Date;

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreement of the parties hereinafter set forth, the parties hereto hereby agree
as follows:

 

1.        WAIVER OF DEFAULT. The Holder hereby waives, until the expiration of
the Waiver Period, any Default or Event of Default existing solely as a result
of the Company's failure to pay to Holder the Forbearance Fee prior to the
Payment Date. The Company acknowledges that interest shall accrue at the rate of
18.0% per annum from the date each payment is due pursuant to the Note until all
amounts are paid in full in cash.

 

2.      STANDSTILL. Holder hereby agrees that during the Waiver Period it will
not exercise any remedy under the Note, at law or in equity, which it hereafter
may have in respect of any Default or Event of Default resulting solely from the
failure of the Company to pay to Holder the Forbearance Fee prior to the Payment
Date.

 

3.        TERMINATION. This Agreement shall terminate upon the earlier of (i)
the payment in full to Holder of the Forbearance Fee, plus all amounts owing
thereon pursuant to the Note and Section 1 hereof, (ii) the occurrence of an
Event of Default (other than in connection with the Forbearance Fee) and (iii)
any repurchase of the Note pursuant to Section 2 of the Note; provided, that
this Agreement shall only terminate with respect to the Note actually
repurchased from the Holder pursuant to the terms of the Note (a "TERMINATION
EVENT"). ABSENCE OF WAIVER. The parties hereto agree that, except to the extent
expressly set forth herein, nothing contained herein shall be deemed to:

 

(a)        be a consent to, or waiver of, any Default or Event of Default; or

 

(b)         prejudice any right or remedy which the Holder may now have or may
in the future have under the Note or otherwise, including, without limitation,
any right or remedy resulting from any Default or Event of Default.

 

4.        REPRESENTATIONS. Each party hereto hereby represents and warrants to
the other parties that:

 

(a)         each party is a corporation or partnership, as applicable, duly
organized, validly existing, and in good standing under the laws of the state of
its incorporation or formation, as applicable;

 

 

 

(b)        the execution, delivery and performance of this Agreement by such
party is within its corporate or trust powers, as applicable, has been duly
authorized by all necessary corporate or trust action, as applicable, has
received all necessary consents and approvals (if any shall be required), and
does not and will not contravene or conflict with any provisions of law or of
the charter or by-laws, or trust agreement, as applicable, of such party or of
any material agreement binding upon such party or its property; and

 

(c)        this Agreement will be a legal, valid and binding obligation of each
party, enforceable against it in accordance with its terms.

 

In addition, the Company represents and warrants that to the best of its
knowledge, except as set forth herein no Default or Event of Default under the
Note has occurred and is continuing.

 

5.      CONTINUING EFFECT, ETC. Except as expressly provided herein, the Company
hereby agrees that the Note shall continue unchanged and in full force and
effect, and all rights, powers and remedies of the Holder thereunder and under
applicable law are hereby expressly reserved. The Company also hereby agrees
that it will apply, to the maximum extent possible, any net proceeds from any
public offering by the Company in excess of the amounts invested in the public
offering by the Holder to pay to the Holder any amount of the Forbearance Fee
and balance due on the Note then outstanding.

 

6.        MISCELLANEOUS.

 

(a)        Section headings used in this Agreement are for convenience of
reference only and shall not affect the construction of this Agreement.

 

(b)         This Agreement may be executed in any number of counterparts and by
the different parties on separate counterparts and each such counterpart shall
be deemed to be an original, but all such counterparts shall together constitute
but one and the same agreement.

 

(c)        This Agreement shall be a contract made under and governed by the
laws of the State of California.

 

(d)        All obligations of the Company and rights of the Holder expressed
herein shall be in addition to and not in limitation of those provided by
applicable law.

 

(e)        This Agreement shall be binding upon the Company, the Holder and
their respective successors and assigns, and shall inure to the benefit of the
Company, the Holder and their respective successors and assigns.

 

(f)        All amendments or modifications of this Agreement and all consents,
waivers and notices delivered hereunder or in connection herewith shall be in
writing.

 

7.        WAIVER OF JURY TRIAL. THE COMPANY AND THE HOLDER HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized representatives as of the first date written above.

 

  “Company”: IDS Industries, Inc.   /s/ Scott Planiga Scott Plantinga
President/CEO     “Holder”: Argent Offset, LLC   /s/ Rick Narveson Rick
Narveson, Managing Member

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