EXHIBIT 10.23

 

CONFIDENTIAL PORTIONS OF THIS AGREEMENT DESIGNATED BY ASTERISKS HAVE BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT

 

CONSULTING AGREEMENT

 

CONSULTING AGREEMENT dated as of June 24, 2015 (this "Agreement") between
Monarch America, Inc., a corporation organized under the laws of the State of
Nevada ("Consultant"), having an address at 1150 W. Custer Place, Denver,
Colorado 80223, and FSST Pharms, LLC, a limited liability company organized
under the laws of the Flandreau Santee Sioux Tribe ("FSST"), having an address
at 603 W. Broad Avenue, Flandreau, South Dakota 57028.

 

BACKGROUND

 

Consultant has the expertise to consult all facets of the cultivation and
operations relating directly and indirectly to both medicinal and recreational
marijuana and marijuana-related products (collectively, the "Business"), from
growing, property management, technology and equipment leasing to inventory
control, staffing, logistical services and day-to-day operations. FSST wishes to
engage Consultant as its exclusive consultant to provide the services and its
expertise, and Consultant wishes to provide such services, all on the terms
described in this Agreement.

 

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and FSST agree as
follows:

 

1. Engagement. FSST hereby engages Consultant as its exclusive independent
contractor to perform, or arrange for the performance of, the services described
in this Agreement. FSST shall not directly or indirectly perform, or engage any
other party to perform, services similar to those to be performed by Consultant
during the term of this Agreement. Nothing in this Agreement shall be deemed to
constitute a partnership or joint venture between the parties, or to require or
imply that Consultant is engaged in the business of growing or distributing
marijuana or any other field or services requiring governmental licensing.

 

2. Marijuana Use. FSST represents and warrants that FSST is licensed to operate
a marijuana business pursuant to Title 29 of the Tribal Law and Order Code
entitled "Marijuana Control Ordinance," and is currently permitted to operate,
entitled to possess, use, cultivate, distribute, transport, sell and/or acquire
marijuana under the Ordinance. FSST shall maintain appropriate licensing as
required by applicable law with regard to the possession, cultivations,
distribution, acquisitions, transportation, sale or use of marijuana.

 

3. Services. The Consultant shall perform, or arrange for the performance of,
the following consultation services for FSST:

 

(a) consultation with FSST as to the selection of equipment and supplies, and
the selection and training of non-professional personnel;

 

Consulting Advisory Services Agreement

 
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 CONFIDENTIAL PORTIONS OF THIS AGREEMENT DESIGNATED BY ASTERISKS HAVE BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT

(b) recommending the purchase or lease of equipment, supplies and other
materials and services reasonably necessary to the operations of FSST;

 

(c) maintenance and repair of the facilities and equipment of FSST;

 

(d) supervision of the acquisition, installation and upgrading of equipment and
systems required by the operations of FSST and reasonably necessary in order for
the FSST to operate its growing facility;

 

(e) negotiation, on behalf of FSST, with third parties for services reasonably
necessary to the operations of FSST; provided, however, that Consultant shall
not enter (or be responsible for) into any contract with any such third party on
behalf of FSST without FSST's prior written approval; and

 

(f) such other services as FSST and Consultant may agree from time to time.

 

In connection with the foregoing, Consultant shall assist FSST with the design,
development, and operation of a 10,000 sq. ft. marijuana grow facility to supply
an on-site recreational consumption lounge in an existing structure near the
Royal River Casino and Hotel in Flandreau, South Dakota (the "Premises"). FSST
shall be responsible for all operational and fixed costs relating to the grow
facility on the Premises. Consultant agrees and acknowledges that all right,
title and the Premises and all improvements thereof shall belong to FSST and
Consultant shall have no rights therein.

 

If FSST desires to purchase nutrients, lights, equipment and other supplies from
The Big Tomato, a wholly-owned subsidiary of Consultant, FSST shall be provided
with a 25% discount of all retail prices offered by The Big Tomato.

 

Consultant shall also make available to FSST, on terms to be negotiated, all
proprietary products sold or distributed by Consultant.

 

4. Provision of Personnel. Upon the request of the FSST, and subject to the
availability of such personnel, Consultant shall arrange to provide to the FSST
the services of personnel whom Consultant believes are qualified to perform
services on behalf of FSST. Such personnel may be either employees or
independent contractors of Consultant; however, in the performance of their
services on behalf of the FSST, such personnel shall at all times be properly
directed and supervised by the FSST. The FSST shall have sole discretion as to
whether to accept the services of any person whose services are offered to the
FSST by Consultant. FSST shall be responsible for the payment of all such
personnel. In addition, all reasonable travel, room and board expenses of
officers, directors, employees, personnel and agents of Consultant shall be paid
by FSST.

 

Consulting Advisory Services Agreement

 
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CONFIDENTIAL PORTIONS OF THIS AGREEMENT DESIGNATED BY ASTERISKS HAVE BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT

 

5. Compensation for Consulting and Advisory Services. In consideration of the
consulting and advisory services ("The Services") provided by Consultant under
Section 3 hereof, FSST shall pay Consultant a consulting and advisory fee
("Consulting Fee") equal to * percent (*%) of Total Net Revenues generated by
the sale of marijuana, and/or marijuana products, by FSST. "Total Net Revenues"
shall be defined as the Total Gross Revenues minus the cost of goods sold, other
expenses directly related to the cultivation, processing, and sale of inventory,
depreciation, and taxes. The consulting fee shall be paid to Consultant for the
services on the 1Oth day of each calendar month and no later than 30 days'
following receipt of Total Gross Revenues by FSST. Consultant shall have the
right to inspect all accounting methods, books and records of FSST to determine
the veracity of the amount monthly amount received. If the consulting fee has
been found or declared to be understated, FSST shall pay the expenses incurred
by Consultant in ascertaining the appropriate amount due and payable.

 

6. Representations and Warranties.

 

(a) Each party represents that it has the full power, right, and authority to
enter into, execute and perform this Agreement.

 

(b) Each party represents that the individual executing and delivering this
Agreement to the other party has full right and title to execute and deliver
this Agreement on behalf of the entity to which it is signing.

 

7. Term.

 

(a) This Agreement shall commence as of the date above and shall terminate on
five (5) years thereafter. If either party shall have failed in any material
respect to perform its obligations hereunder (a "default") for a period of 10
business days after receipt of written notice specifying the nature of such
default, and if, by reason of the nature of such default, the same cannot
reasonably be remedied within such 10-day period, and the party so notified
shall have failed to proceed with reasonable diligence after receipt of the
written notice referred to in this clause to cure such default, then the
non-defaulting party can terminate this Agreement for cause. At the end of the
initial 5-year term, this Agreement shall automatically renew on an annual basis
until terminated by either party upon 30-days' prior written notice to the
other.

 

(b) Upon termination of this Agreement for any reason, the parties hereto shall
have no further rights or obligations hereunder, except for any unpaid fees and
expenses then due and payable to Consultant and those arising under Sections 8,
9, 10, and 11 hereof, all of which shall survive any such termination.

 

8. No Warranties. Consultant makes no warranties or representations, express or
implied, either in fact or by operation of law, statutory or otherwise,
including warranties of merchantability or fitness for a particular use. FSST
specifically agrees and acknowledges that Consultant shall not be liable to FSST
or any of FSST's officers, directors, employees, agents, contractors, affiliates
or representatives for any indirect, consequential, special, punitive, exemplary
or incidental damages of any kind, however caused, arising out of or related to
this Agreement or the services to be provided under this Agreement, even if FSST
had been advised of the possibility of those damages, including without
limitation, damages incurred by FSST for loss of profits, loss of revenues, loss
of goodwill, loss of anticipated savings, loss of date or cost of purchasing
replacement services. These limitations will apply regardless of the legal
theory of liability, whether under contract, tort (including negligence and
strict liability), or any other theory whatsoever. Notwithstanding, the
foregoing limitations will not apply to any claim arising out of (a) fraud,
gross negligence or willful misconduct by Consultant or (b) breach of Section 9
of this Agreement by Consultant or its Indemnitees (as defined below).

 

Consulting Advisory Services Agreement

 
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CONFIDENTIAL PORTIONS OF THIS AGREEMENT DESIGNATED BY ASTERISKS HAVE BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT

 

9. Indemnification. FSST will defend, indemnify and hold harmless Consultant and
its affiliates, subcontractors, officers, directors, shareholders, employees and
agents (Jointly and severally, the "Indemnitees") from and against any and all
claims, liabilities (including reasonable attorneys' fees and expenses) and
losses asserted directly or indirectly by any third party arising out of any
actual or alleged breach of this Agreement by FSST or any act or omission of the
Indemnitee, whether arising from or in connection with a demand, action,
regulatory action, lawsuit, proceeding, judgment, settlement, appeal or other
post judgment proceeding and whether asserted in contract, tort, strict
liability or otherwise.

 

10. Confidential Information. Each of FSST and Consultant covenants and agrees
that such party and such party's employees, officers, directors, stockholders,
agents, representatives, affiliates and the successors and assigns thereof,
shall retain in strict confidence, and shall not use for any purpose whatsoever,
or divulge, disseminate or disclose to any third party (other than in
furtherance of its business purposes or as may be required by law) any
proprietary or confidential information relating to such party or its business,
including, without limitation, financial information, development plans, pricing
information, business methods, management information systems and software,
customer lists, supplier lists, leads, solicitations and contacts, know-how,
show-how, inventions, techniques, improvements, specifications, trade secrets,
agreements, research and development, business plans and marketing plans of each
such party, whether or not any of the foregoing are copyrightable or patentable.

 

11. Restrictive Covenant. FSST acknowledges that Consultant has invested and
will invest substantial time, money and resources in the development and
retention of its confidential information (including trade secrets), customers,
accounts and business partners, and further acknowledges that during the course
of FSST's engagement with Consultant, FSST has had and will have access to
Consultant's confidential information (including trade secrets), and may be
introduced to existing and prospective suppliers, customers, accounts and
business partners of Consultant. FSST acknowledges and agrees that any and all
"goodwill" associated with any existing or prospective supplier, customer,
account or business partner belongs exclusively to Consultant, including, but
not limited to, any goodwill created as a result of direct or indirect contacts
or relationships between the FSST and any existing or prospective suppliers,
customers, accounts or business partners. In recognition of this, FSST hereby
covenants and agrees that during the term of this Agreement, neither FSST nor
any of its affiliates will engage in the practice of growing and distributing
marijuana in the State of South Dakota, whether as an employee, agent, owner,
partner, independent contractor, representative, shareholder, or in any other
capacity whatsoever, directly or indirectly.

 

FSST recognizes and acknowledges that this provision is a condition to
Consultant entering into this relationship and that, accordingly, in the event
of a breach or default, or threatened breach or default, by FSST of the terms
and conditions of this Agreement, including, without limitation, the provisions
of Section 11, the damages to Consultant may be impossible to ascertain and
Consultant will not have an adequate remedy at law. In the event of any such
breach or default, or such threatened breach or default, in the performance of
the terms and provisions of this Agreement, Consultant shall be entitled to
institute and prosecute proceedings in any court of competent jurisdiction,
either at law or in equity, to enforce the specific performance of the terms and
provisions of this Agreement, to enjoin further violations of the terms and
provisions of this Agreement and/or to obtain damages. Such remedies shall,
however, be cumulative and not exclusive and shall be in addition to any other
remedies which any party may have under this Agreement or at law. FSST hereby
waives any requirement for security or the posting of any bond or other surety
and proof of damages in connection with any temporary or permanent award of
injunctive, mandatory or other equitable relief and further agrees to waive the
defense in any action for specific performance that a remedy at law would be
adequate.

 

Consulting Advisory Services Agreement

 
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CONFIDENTIAL PORTIONS OF THIS AGREEMENT DESIGNATED BY ASTERISKS HAVE BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT

 

12. Finder's Fee. If FSST or any of its agents structures, leads to the
structuring, or assists with the structuring of a consulting or other
development agreement between consultant and another Tribe, tribally owned
company, or any other type of business entity, Consultant will provide FSST with
*% of all revenue generated as a result of such agreement by the Consultant. The
*% collected will be paid to FSST in cash within 10 business days of Consultant
receiving such funds. However, if FSST decides to utilize such proceeds to
purchase Consultant's common stock, Consultant agrees to sell FSST the
appropriate number of shares of common stock based on a discount rate of 10% of
the stock's then volume weighted average price for the twenty days prior to
receipt by Consultant of such notification by FSST. All Company stock purchased
by FSST within the first year of this agreement must be utilized only for the
purchase and installation of equipment and other materials necessary for
cultivation and processing of marijuana and marijuana products at the FSST
facility.

 

13. Miscellaneous.

 

(a) Any notice required or permitted to be given to either party under this
Agreement shall be duly given and shall be deemed to have been received three
business days after having been mailed by certified mail, return receipt
requested, or one business day after having been sent by overnight courier or
when personally delivered, addressed to the respective party at the address
first stated above, or to such other address as such party may designate by
written notice to the other party.

 

(b) This Agreement shall be binding upon, and inure to the benefit of, the
respective representatives, successors and permitted assigns of the parties
hereto. This Agreement may not be assigned by either party without prior written
consent.

 

(c) This Agreement shall be construed and enforced in accordance with the
procedural and substantive laws of the Flandreau Santee Sioux Tribe. If the
substantive law of the Tribe does not provide for a particular matter, then the
substantive law of the State of Colorado will apply.

 

(d) Should any provision of this Agreement be or become invalid, the validity of
the other provisions of this Agreement shall not be affected thereby. This
Agreement contains the entire agreement between the parties. No waiver,
modification or cancellation of any term or condition of this Agreement shall be
effective unless executed in writing by the party charged therewith. No written
waiver shall excuse the performance of any act other than those specifically
referred to therein.

 

(e) This Agreement may be executed in counterparts. Each counterpart will be
considered an original, and all of them, taken together, will constitute a
single Agreement. Facsimile and electronic signatures will be deemed original
signatures for all purposes under this Agreement. When properly signed, this
Agreement may be delivered by facsimile or electronically, and any such delivery
will have the same effect as physical delivery of a signed original.

 

Consulting Advisory Services Agreement

 
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CONFIDENTIAL PORTIONS OF THIS AGREEMENT DESIGNATED BY ASTERISKS HAVE BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT

 

(f) If any court finds any provision of this Agreement to be invalid or
otherwise unenforceable, that provision will be void to the extent it is
contrary to applicable law. However, that finding will not affect the validity
of any other provision of this Agreement, and the rest of this Agreement will
remain in full force and effect unless enforcement of this Agreement without the
invalidated provision would be grossly inequitable under all of the
circumstances or would frustrate the primary purposes of this Agreement.

 

(g) This Agreement shall be construed to effectuate the mutual intent of FSST
and Consultant. The parties and their counsel have cooperated in the drafting
and preparation of this Agreement, and this Agreement therefore shall not be
construed against any party by virtue of its role as the drafter thereof. No
drafts of this Agreement shall be offered by any party, nor shall any draft be
admissible in any proceeding, to explain or construe this Agreement. Each of
FSST and Consultant hereto acknowledges and agrees that it has received or has
had the opportunity to receive independent legal counsel of its own choice and
that it has been sufficiently apprised of its rights and responsibilities with
regard to the substance of this Agreement. The headings contained in this
Agreement are intended for convenience of reference only and are not intended to
be a part of or to affect the meaning or interpretation of this Agreement.

 

(h) FSST Pharms, LLC is a wholly owned limited liability company of the
Flandreau Santee Sioux Tribe, and therefore enjoys the right of sovereign
immunity. Nothing in this agreement shall expressly, or impliedly, waive the
sovereign immunity of FSST in any forum or tribunal, nor shall it waive the
sovereign immunity enjoyed by FSST's employees, agents, or board of directors.
If a dispute does arise regarding this agreement, the Flandreau Santee Sioux
Tribe Tribal Court will be the exclusive forum for adjudication. Consultant
agrees to purposefully avail itself to Tribal Court Jurisdiction, and agrees to
waive all rights regarding forum selection.

 

IN WITNESS WHEREOF, the parties have executed and delivered this Management &
Consulting Agreement as of the date first above written.

 

 

FSST PHARMS, LLC

          Date: June 24, 2015 By: /s/ Anthony Reider       Anthony Reider      
Board President            

MONARCH AMERICA, INC.

    Date: June 24, 2015 By: /s/ Eric M. Hagen Eric M. Hagen President and CEO

 

 

Consulting Advisory Services Agreement

 

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