Document:

edbl_ex104.htm

EXHIBIT 10.4
  
 SECURITY AGREEMENT
  
 THIS AGREEMENT, made this 30th day of March 2020, under the laws of the State of New Jersey.
  
 BETWEEN SAMENT CAPITAL INVESTMENTS, INC. (herein called the “Secured Party”) whose address is 2040 Main Street, Suite 225, Irvine CA 92614 and EDIBLE GARDEN INCORPORATED (herein called the “Debtor”), whose address is 283 Country Road 519, Belvidere, NJ 079823.
  
 WITNESSETH:
  
 To secure:
  
 1. The payment of an indebtedness of the Debtor to the Secured Party in the amount of Three Million ($3,000,000) Dollars as evidenced by the promissory note signed on the date herewith (the “Promissory Note”),
  
 2. Any other indebtedness or liability of the Debtor to the Secured Party hereafter arising, including all future advances or loans which may be made by Secured Party to Debtor, (all hereinafter called the “obligations”).
  
 3. All costs and expenses incurred by the Secured Party in the collection of the foregoing, including reasonable attorney’s fees and other expenses for pursuing, searching for, receiving, taking, keeping, storing, advertising, and selling the collateral. If the Debtor shall default, after written notice and a 10 day cure period in the performance of any of the provisions of this agreement on the Debtor’s part to be performed, Secured Party may perform same for the Debtor’s account and any monies expended in so doing shall be chargeable with interest to the Debtor and added to the indebtedness.
  
 Debtor hereby grants and conveys to the Secured Party, a security interest in, and mortgages to the Secured Party, the following collateral (the “Collateral”):
  
 a. All of the tangible greenhouse assets (“Assets”) of the Debtor located at 283 County Road 519, Belvidere, NJ 07823. The Debtor and Secured Party have agreed that all of the obligations of this agreement will be secured by the Assets.
  
 b. All proceeds thereof, if any,
  
 c. All substitutions, replacements and accessions thereto
  
 DEBTOR WARRANTS, COVENANTS AND AGREES AS FOLLOWS:
  
 1. To pay and perform all of the obligations secured by this Agreement according to their terms.
  
 2. To defend the title to the collateral granted Secured Party against all persons and against all claims and demands whatsoever, which collateral, except for the security interest granted hereby, is lawfully owned by the Debtor and is now free and clear of any and all liens, security interests, claims, charges, encumbrances, taxes and assessments except as may be set forth in the schedule attached hereto.
  
 3. On demand of the Secured Party to do the following: furnish further assurance of title, execute any written agreement or do any other acts reasonably necessary to effectuate the purposes and provisions of this Agreement, execute any instrument or statement required by law or otherwise in order to perfect, continue or terminate the security interest of the Secured Party in the collateral and pay all filing fees in connection therewith.
  
 	 
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 4. To retain possession of the collateral during the existence of this Agreement and not to sell, exchange, assign, loan, deliver, lease, mortgage or otherwise dispose of same, except in the ordinary course of business without the written consent of the Secured Party.
  
 5. Except as mutually agreed to by the parties, to keep the collateral free and clear of all liens, charges, encumbrances, taxes and assessments.
  
 6. To pay, when due, all taxes, assessments and license fees relating to the collateral.
  
 7. To keep the collateral, at Debtor’s own cost and expense, in good repair and condition and not to misuse, abuse, waste or allow it to deteriorate except for normal wear and tear and to make same available for inspection by the Secured Party at all reasonable times upon two (2) day written notice.
  
 8. To keep the collateral insured against loss by fire (including extended coverage), theft and other hazards as the Secured Party may reasonably require. Policies shall be in such form and in an aggregate amount equal to or exceeding the principal balance due under the Promissory Note at the time such policy is issued or renewed and with such companies as the Secured Party may approve, such approval not to be unreasonably withheld. Policies shall be obtained from responsible insurers authorized to do business in New Jersey. Certificates of insurance or policies, payable to the respective parties as their interest may appear, shall be deposited with the Secured Party who is authorized, but under no duty, to obtain such insurance upon failure of the Debtor to do so after written notice to Debtor and a 10-day cure period thereafter. Debtor shall give immediate written notice to the Secured Party and to insurers of loss or damage to the collateral and shall promptly file proofs of loss with insurers. Debtor hereby assigns to the Secured Party all sums which may become payable under such insurance, including return premiums and dividends, as additional security for the indebtedness, but such assignment may only be exercised by Secured Party if Debtor is in default and 10 days have passed since notice of such default was given to Debtor by Secured Party and such default remains substantially uncured. Any other return premiums and/or dividends shall be paid to Debtor.
  
 9. To immediately notify the Secured Party in writing of any change in or discontinuance of Debtor’s place or places of business.
  
 DEFAULT:
  
 1. The following shall constitute a default by Debtor:
  
 a. Failure to pay the principal or interest on the Promissory Note and any other indebtedness when due and to then cure such failure after 10 days written notice thereof by Secured Party to Debtor.
  
 b. Failure by Debtor to comply with or perform any provision of this agreement, after notice and a 10-day cure period.
  
 c. False or misleading written material representations or warranties made or given by Debtor in connection with this agreement to Secured Party.
  
 	 
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 d. Subjection of the collateral to levy of execution or other judicial process.
  
 e. Commencement of any insolvency proceeding by or against the Debtor or of any guarantor of or surety for the Debtor’s obligations which is not dismissed or otherwise disposed of within 60 days of commencement.
  
 2. Upon any default of the Debtor and at the option of the Secured Party, the obligations secured by this Agreement shall, after written notice thereof by Secured Party to Debtor and the passage of 10 days’ time without such default being substantially cured, immediately become due and payable in full and the Secured Party shall have all the rights, remedies and privileges with respect to repossession, retention and sale of the collateral and disposition of the proceeds as are accorded to a Secured Party by the applicable sections of the Uniform Commercial Code as enacted in New Jersey respecting “Default”, in effect as of the date of this Security Agreement.
  
 GENERAL PROVISIONS:
  
 1. Debtor consents to any extension of time or payment.
  
 2. All items of collateral shall not become part of the freehold regardless of the manner of affixation and be kept at Debtor’s places of business in Belvidere, New Jersey, except in the ordinary course of business.
  
 3. The Debtor shall remain liable for any deficiency resulting from a commercially reasonable sale of collateral, and Debtor shall pay any such deficiency forthwith on demand and upon presentment of proof of the deficiency amount.
  
 4. The Uniform Commercial Code as enacted in the State of New Jersey shall govern the rights, duties and remedies of the parties and any provisions herein declared invalid under any law shall not invalidate any other provision of this agreement. In addition to its statutory rights, the Secured Party may:
  
 a. require Debtor to assemble the collateral and make it available to the Secured Party at a place to be designated by the Secured Party, reasonably convenient to both parties;
  
 b. unless the collateral is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market, Secured Party will give Debtor reasonable notice of the time and place of any public sale thereof or of the time after which any private sale or any other intended disposition thereof is to be made. The requirements of reasonable notice will be met if such notice is mailed, postage prepaid, to the address of the Debtor shown above, at least three business days before the time of sale or disposition.
  
 5. In addition to any rights granted to Secured Party under the Uniform Commercial Code as enacted in the State of New Jersey, in the event of an unremedied default by the Debtor, Secured Party may elect to take over the operations of the Debtor in its Belvidere, New Jersey location and continue to operate said business. Such election shall be deemed to be full satisfaction of Debtor’s obligations to Secured Party hereunder and under the Promissory Note.
  
 6. Any waiver of or acquiescence in any default by the Debtor, or failure of the Secured Party to insist upon strict performance by the Debtor of any warranties or agreements in this Agreement, shall not constitute a waiver of any subsequent or other default or failure, except as provided otherwise at law or in equity.
  
 7. The terms, warranties and agreements herein contained shall bind and inure to the benefit of the respective parties hereto, and any legal representatives, successors and assignees.
  
 8. Secured Party may assign this agreement only upon written approval of Debtor, which approval shall not be unreasonably withheld and if assigned the assignee shall be entitled, upon notifying the Debtor, to performance of all of Debtor’s obligations and agreements hereunder and the assignee shall be entitled to all of the rights and remedies of the Secured Party hereunder.
  
 	 
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 9. The Secured Party is hereby authorized to file a Financing Statement as executed by Debtor. 
  
 10. Miscellaneous Provisions
  
 a. This Agreement supersedes any and all other agreements, either oral or in writing, between the parties hereto with respect to the subject matter hereof, and no other agreement, statement, or promise relating to the subject matter of this Agreement which is not contained herein shall be valid or binding.
  
 b. This Agreement shall be binding on the heirs, executors, administrators, legal representatives, successors, and assigns of the respective parties.
  
 c. The validity of this Agreement and any of its terms or provisions, as well as the rights and duties of the parties hereunder, shall be governed by the laws of the State of New Jersey. This Agreement is made, and is performable, in Warren County, New Jersey.
  
 d. This Agreement may only be amended by the mutual agreement of the parties herein in a properly executed written instrument specifically referencing this Agreement.
  
 e. The headings used in this Agreement are used for administrative purposes only and do not constitute substantive matter to be considered in construing the terms of this Agreement.
  
 f. Wherever the context shall so require, all words herein in the male gender shall be deemed to include the female or neuter gender, all singular words shall include the plural, and all plural words shall include the singular.
  
 g. Except as specifically provided otherwise herein, any and all notices or other communications required or permitted by this Agreement or by law to be delivered to, served on, or given to any party to this Agreement by any other party to this Agreement shall be in writing and shall be deemed properly delivered, given, or served when personally delivered to the party to whom it is directed, or in lieu of personal service, when deposited in the United States mail, first-class postage prepaid, certified mail, return receipt requested, at the hereafter indicated addresses for notice. Any party may change his, her, or its address for the purposes of this Paragraph by giving written notice of the change to all other parties in the manner provided in this Paragraph. The parties’ addresses for notice hereunder shall be as set forth on the first page of this Agreement.
  
 h. Any signatory to this Agreement who is the prevailing party in any legal proceeding against any other signatory under or with relation to this Agreement or the transaction(s) contemplated herein shall be additionally entitled to recover Court costs and reasonable attorneys’ fees from the non-prevailing party.
  
 i. This Agreement may be executed in multiple counterparts, each of which shall be an original, but all of which, when taken together, shall constitute but one Agreement.
  
 [Signature page follows]
  
 	 
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 IN WITNESS WHEREOF, the Parties have respectively signed and sealed these presents the day and year first above written.
  
 	 SAMENT CAPITAL INVESTMENTS, INC. 
	  
	 EDIBLE GARDEN INCORPORATED

	  
	  
	  
	  
	  
	  

	 By:
	 /s/ Michael Nahass
	  
	 By: 
	 /s/ Michael C. James
	  

	  
	  
	  
	  
	  
	  

	 Name: 
	 Michael Nahass
	  
	 Name:
	 Michael C. James
	  

	  
	  
	  
	  
	  
	  

	 Title: 
	 President/COO
	  
	 Title: 
	 Treasurer
	  

   
 	 
	5edbl_ex105.htm

EXHIBIT 10.5
  
 OPTION AGREEMENT #1
  
 This OPTION AGREEMENT (this “Agreement”) is effective as of March 30, 2020, by and between Sament Capital Investments, Inc., a California corporation (“Sament”), and Edible Garden Incorporated, a Wyoming corporation (the “Company” and together with Sament, each a “Party” and collectively, the “Parties”). 
  
 RECITALS 
  
 The Company desires to offer Sament an option to purchase shares (the “Shares”) of the Company’s common stock (the “Common Stock”), and Sament desires to accept such option from the Company, upon the terms and conditions set forth herein.
  
 NOW, THEREFORE, in consideration of the mutual promises and covenants herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows:
  
 AGREEMENT
  
 ARTICLE 1
 OPTION
  
 1.1 Grant of Option. On the terms and subject to the conditions set forth in this Agreement, the Company hereby grants Sament an option (the “Option”) to purchase eighty-nine (89) Shares (the “Option Shares”), upon the occurrence of one of the events described in clauses (a)-(e) below, or as otherwise mutually agreed to by the Parties, or at any time between the one (1) year and five (5) year anniversary of the date of this Agreement (the “Option Exercise Period”). 
  
 (a) an acquisition by an individual, entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Securities Exchange Act of 1934, as amended) of effective control (whether through legal or beneficial ownership of capital stock of the Company, by contract or otherwise) of fifty percent (50%) or more of the aggregate votes of the then-issued and outstanding voting securities of the Company, (b) the Company merges into or consolidates with any other individual or corporation, partnership, trust, association, limited liability company, or other entity of any kind (a “Person”), or any Person merges into or consolidates with the Company and, after giving effect to such transaction, the stockholders of the Company immediately prior to such transaction own fifty percent (50%) or less of the aggregate voting power of the Company or the successor entity of such transaction, (c) the Company sells or transfers all or substantially all of its assets to another Person and the stockholders of the Company immediately prior to such transaction own fifty percent (50%) or less of the aggregate voting power of the acquiring entity immediately after such transaction, (d) an underwritten public offering by the Company of its Common Stock, a registered direct offering by the Company of its Common Stock, or a reverse merger of the Company into a public company, or (e) the sale by the Company of Common Stock or securities that are convertible into or exercisable or exchangeable for Common Stock in one or a series of related transactions at a valuation of at least $10,000,000.
   
 	 
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 1.2 Exercise of Option
  
 (a) Notice of Intent to Exercise Option. The Option shall be exercised automatically immediately prior to the occurrence of one of the events described in clauses (a)-(e) above. If an event described in clauses (a)-(e) above does not occur prior to the one year anniversary of the date of this Agreement, Sament may exercise the Option during the Option Exercise Period by delivering written notice thereof to the Company (the “Exercise Notice”). 
  
 (b) Purchase of Shares. The closing (the “Closing”) of the purchase of the Option Shares shall take place immediately prior to the occurrence of one of the events described in clauses (a)-(e) above, or two (2) business days after receipt by the Company of the Exercise Notice. At the Closing, (i) the Company shall transfer all of its rights, title and interest in the Option Shares to Sament, and (ii) Sament shall deliver to the Company $1.00 by check or wire transfer of immediately available funds. Each Party hereby agrees to execute and deliver all documents and instruments reasonably necessary to effectuate the Closing. 
  
 ARTICLE 2
MISCELLANEOUS
  
 2.1 Notices. All notices, demands and requests required or permitted to be given under the provisions of this Agreement shall be in writing and shall be deemed delivered (i) upon personal delivery if during business hours or, if not, on the next business day, (ii) three (3) business days after deposit of the same in the U.S. mail if mailed by certified mail (return receipt requested), or (iii) one (1) business day after deposit of the same with a nationally recognized overnight courier service if mailed for next business day delivery, in each case, to the addressee thereof at its address set forth below (or at such other address of such Party as such Party shall have specified in a notice to the other Party):
  
 If to the Company:
  
 Edible Garden Incorporated
 283 County Road 519 
 Belvidere, NJ 07823
 Attention: Michael James
 Email: MJames@ediblegarden.com
  
 If to Sament:
  
 Sament Capital Investments, Inc.
 2040 Main Street, Suite 225
 Irvine, CA 92614
 Attention: Michael Nahass
  
 2.2 Successors and Assigns; Assignment. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective heirs, legal representatives, successors and assigns of the Parties hereto; provided, that, no Party may assign any of its rights or obligations under this Agreement without the prior written consent of the other non-assigning Party. Any purported assignment in contravention of the foregoing shall be deemed null and void. 
   
 	 
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 2.3 Severability. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. If the final judgment of a court of competent jurisdiction declares that any term or provision hereof is invalid or unenforceable, the Parties agree that the court making the determination of invalidity or unenforceability shall have the power to reduce the scope, duration or area of the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be enforceable as so modified after the expiration of the time within which the judgment may be appealed.
   
 2.4 Governing Law. All issues and questions concerning the construction, validity, interpretation and enforceability of this Agreement and the exhibits and schedules hereto shall be governed by, and construed in accordance with, the laws of the State of New Jersey, without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of New Jersey or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New Jersey.
  
 2.5 Arbitration. Any and all claims or disputes between the Parties that arise from or relate or pertain in any way to this Agreement, to the Parties’ rights or obligations under this Agreement, to the subject matter of this Agreement, or the arbitrability of any such claim or dispute shall be resolved solely and exclusively by binding arbitration in the State of New Jersey before a panel of three Arbitrators in a confidential arbitration proceeding to be conducted by JAMS in the English language pursuant to the JAMS International Arbitration Rules and Procedures. No person shall be eligible to serve as arbitrator in any such proceeding unless he or she shall have served as a state or federal Judge or Justice of a court within the State of New Jersey for at least five years. The prevailing Party or Parties to any such dispute shall be entitled to recover all of its or their reasonable attorneys' fees and other costs of the arbitration, and any related judicial proceedings, from the non-prevailing Party or Parties. Each Party to this Agreement hereby consents irrevocably to the jurisdiction of the state and federal courts located in the State of New Jersey for the purpose of enforcing this Agreement to arbitrate and for the purposes of any proceedings to confirm, vacate or modify any arbitration award rendered hereunder. Any Party may also apply to any court anywhere in the world for the purpose of enforcing any such arbitration award. Without limiting the foregoing, each Party agrees that service of process on such Party as provided in this Agreement shall be deemed effective service of process on such Party. 
  
 2.6 Counterparts. This Agreement and any amendments hereto may be executed in any number of counterparts, each of which shall be deemed to be an original but all of which together shall constitute but one and the same instrument.
  
 2.7 Entire Agreement. This Agreement constitutes the entire understanding among the Parties with respect to the subject matter hereof. Any agreement, discussions, or negotiations among the Parties prior to the date hereof with respect to the purchase of the Shares is superseded by this Agreement. Except as expressly provided herein, nothing in this Agreement, express or implied, is intended to confer upon any party, other than the Parties hereto, any rights, remedies, obligations or liabilities under or by reason of this Agreement.
   
 	 
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 2.8 Amendment; Waiver. No provision of this Agreement may be amended except in a written instrument signed by the Parties. No provision of this Agreement may be waived except in a written instrument signed by the Party waiving the benefit to which it is otherwise entitled. No waiver of any provision, condition, or requirement of this Agreement shall be deemed to be a waiver continuing into the future or a waiver on a subsequent occasion or a waiver of any other provision, condition, or requirement of this Agreement, nor shall any delay or omission of any Party to exercise any right hereunder in any manner impair such Party’s ability to exercise such right.
  
 2.9 Expenses. Each Party hereto shall pay its own costs and expenses involved in carrying out the transactions contemplated by this Agreement.
  
 2.10 Exclusive Remedies. The remedies provided in this Agreement for a breach of a Party’s obligations hereunder shall be exclusive and shall preclude the assertion by any Party hereto of any other rights or the seeking of any other remedies against any other Party hereto, whether at law or equity.
  
 2.11 Further Assurances. Subject to the terms and conditions of this Agreement, each of the Parties shall use all reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable, under applicable law or otherwise, to fulfill its obligations under this Agreement. 
  
 2.12 Stock Dividends and Stock Splits. If the Company, at any time while this Agreement is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock, (ii) subdivides outstanding shares of Common Stock into a larger number of shares, or (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares, then the number of Shares of Common Stock issuable to Sament pursuant to this Agreement shall be automatically adjusted proportionately.
  
 [remainder of page intentionally left blank; signature page follows]
  
 	 
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 IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first above written.
  
  
 	 	 SAMENT:
	
	  
	  
	  

	  
	 SAMENT CAPITAL INVESTMENTS, INC.
	  

	 	 	 	 
		By: 	 /s/ Michael Nahass
	
	  
	 Name: 
	 Michael Nahass
	 
	 	Title: 	 President/COO
	 
	 	 	 	 
	  
	  
	  
	  

	  
	 COMPANY:
	  

	  
	  
	  

	  
	 Edible Garden Incorporated 
	  

	  
	  
	  
	  

	  
	 By:
	 Michael C. James
	  

	  
	 Name: 
	 Michael C. James
	  

	  
	 Title: 
	 Treasurer
	  

   
 	 
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