Document:

Exhibit 10.2

 

SECURITIES PURCHASE AGREEMENT

 

This SECURITIES PURCHASE AGREEMENT
(the “Agreement”), dated as of August 8, 2019, by and between BIOSOLAR, INC., a Nevada corporation, with headquarters
located at 27936 Lost Canyon Road, Suite 202, Santa Clarita, CA 91387 (the “Company”), and CROWN BRIDGE PARTNERS,
LLC, a New York limited liability company, with its address at 1173a 2nd Avenue, Suite 126, New York, NY 10065 (the “Buyer”).

 

WHEREAS:

 

A. The Company and
the Buyer are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by the
rules and regulations as promulgated by the United States Securities and Exchange Commission (the “SEC”) under the
Securities Act of 1933, as amended (the “1933 Act”);

 

B. Buyer desires to
purchase and the Company desires to issue and sell, upon the terms and conditions set forth in this Agreement the 10% convertible
note of the Company, in the form attached hereto as Exhibit A, in the aggregate principal amount of US$53,500.00 (together
with any note(s) issued in replacement thereof or as a dividend thereon or otherwise with respect thereto in accordance with the
terms thereof, the “Note”), convertible into shares of common stock of the Company (the “Common Stock”),
upon the terms and subject to the limitations and conditions set forth in such Note.

 

C. The Buyer wishes
to purchase, upon the terms and conditions stated in this Agreement, such principal amount of Note as is set forth immediately
below its name on the signature pages hereto; and

 

NOW THEREFORE,
the Company and the Buyer severally (and not jointly) hereby agree as follows:

 

1. PURCHASE AND SALE
OF NOTE.

 

a. Purchase of Note.
On the Closing Date (as defined below), the Company shall issue and sell to the Buyer and the Buyer agrees to purchase from the
Company such principal amount of Note as is set forth immediately below the Buyer’s name on the signature pages hereto, subject
to the express terms of the Note.

 

b. Form of Payment.
On or around the Closing Date (as defined below), the Buyer shall pay the purchase price of $51,500.00 (the “Purchase Price”)
for the Note, by wire transfer of immediately available funds, in accordance with the Company’s written wiring instructions,
against delivery of the Note, and (i) the Company shall deliver such duly executed Note on behalf of the Company, to the Buyer.

 

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c. Closing Date.
Subject to the satisfaction (or written waiver) of the conditions thereto set forth in Section 6 and Section 7 below, the date
and time of the issuance and sale of the Note pursuant to this Agreement (the “Closing Date”) shall be 5:00 P.M., Eastern
Standard Time on or about August 8, 2019, or such other mutually agreed upon time. The closing of the transactions contemplated
by this Agreement (the “Closing”) shall occur on the Closing Date at such location as may be agreed to by the parties.

 

2. REPRESENTATIONS
AND WARRANTIES OF THE BUYER. The Buyer represents and warrants to the Company that:

 

a. Investment Purpose.
As of the date hereof, the Buyer is purchasing the Note and the shares of Common Stock issuable upon conversion of or otherwise
pursuant to the Note (including, without limitation, such additional shares of Common Stock, if any, as are issuable (i) on
account of interest on the Note or (ii) as a result of the events described in Sections 1.3 and 1.4(g) of the Note, such shares
of Common Stock being collectively referred to herein as the “Conversion Shares” and, collectively with the Note, the
“Securities”) for its own account and not with a present view towards the public sale or distribution thereof, except
pursuant to sales registered or exempted from registration under the 1933 Act; provided, however, that by making
the representations herein, the Buyer does not agree to hold any of the Securities for any minimum or other specific term and reserves
the right to dispose of the Securities at any time in accordance with or pursuant to a registration statement or an exemption under
the 1933 Act.

 

b. Reliance on Exemptions.
The Buyer understands that the Securities are being offered and sold to it in reliance upon specific exemptions from the registration
requirements of United States federal and state securities laws and that the Company is relying upon the truth and accuracy of,
and the Buyer’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Buyer
set forth herein in order to determine the availability of such exemptions and the eligibility of the Buyer to acquire the Securities.

 

c. Information.
The Buyer and its advisors, if any, have been, and for so long as the Note remain outstanding will continue to be, furnished with
all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of
the Securities which have been requested by the Buyer or its advisors. The Buyer and its advisors, if any, have been, and for so
long as the Note remain outstanding will continue to be, afforded the opportunity to ask questions of the Company. Notwithstanding
the foregoing, the Company has not disclosed to the Buyer any material nonpublic information and will not disclose such information
unless such information is disclosed to the public prior to or promptly following such disclosure to the Buyer. Neither such inquiries
nor any other due diligence investigation conducted by Buyer or any of its advisors or representatives shall modify, amend or affect
Buyer’s right to rely on the Company’s representations and warranties contained in Section 3 below. The Buyer understands
that its investment in the Securities involves a significant degree of risk. The Buyer is not aware of any facts that may constitute
a breach of any of the Company's representations and warranties made herein.

 

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d. Governmental
Review. The Buyer understands that no United States federal or state agency or any other government or governmental agency
has passed upon or made any recommendation or endorsement of the Securities.

 

e. Transfer or Re-sale.
The Buyer understands that (i) the sale or re-sale of the Securities has not been and is not being registered under the 1933 Act
or any applicable state securities laws, and the Securities may not be transferred unless (a) the Securities are sold pursuant
to an effective registration statement under the 1933 Act, (b) the Buyer shall have delivered to the Company, at the cost
of the Buyer, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in comparable
transactions to the effect that the Securities to be sold or transferred may be sold or transferred pursuant to an exemption from
such registration, which opinion shall be accepted by the Company, (c) the Securities are sold or transferred to an “affiliate”
(as defined in Rule 144 promulgated under the 1933 Act (or a successor rule) (“Rule 144”)) of the Buyer who agrees
to sell or otherwise transfer the Securities only in accordance with this Section 2(f) and who is an Accredited Investor, (d) the
Securities are sold pursuant to Rule 144, or (e) the Securities are sold pursuant to Regulation S under the 1933 Act (or a
successor rule) (“Regulation S”), and the Buyer shall have delivered to the Company, at the cost of the Buyer, an opinion
of counsel that shall be in form, substance and scope customary for opinions of counsel in corporate transactions, which opinion
shall be accepted by the Company; (ii) any sale of such Securities made in reliance on Rule 144 may be made only in accordance
with the terms of said Rule and further, if said Rule is not applicable, any re-sale of such Securities under circumstances in
which the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the
1933 Act) may require compliance with some other exemption under the 1933 Act or the rules and regulations of the SEC thereunder;
and (iii) neither the Company nor any other person is under any obligation to register such Securities under the 1933 Act or any
state securities laws or to comply with the terms and conditions of any exemption thereunder (in each case). Notwithstanding the
foregoing or anything else contained herein to the contrary, the Securities may be pledged as collateral in connection with a bona
fide margin account or other lending arrangement.

 

f. Legends.
The Buyer understands that the Note and, until such time as the Conversion Shares have been registered under the 1933 Act may be
sold pursuant to Rule 144 or Regulation S without any restriction as to the number of securities as of a particular date that can
then be immediately sold, the Conversion Shares may bear a restrictive legend in substantially the following form (and a stop-transfer
order may be placed against transfer of the certificates for such Securities):

 

“NEITHER THE ISSUANCE AND SALE
OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE
FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING
THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT
SECURED BY THE SECURITIES.”

 

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The legend set forth
above shall be removed and the Company shall issue a certificate without such legend to the holder of any Security upon which it
is stamped, if, unless otherwise required by applicable state securities laws, (a) such Security is registered for sale under an
effective registration statement filed under the 1933 Act or otherwise may be sold pursuant to Rule 144 or Regulation S without
any restriction as to the number of securities as of a particular date that can then be immediately sold, or (b) such holder provides
the Company with an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions,
to the effect that a public sale or transfer of such Security may be made without registration under the 1933 Act, which opinion
shall be accepted by the Company so that the sale or transfer is effected. The Buyer agrees to sell all Securities, including those
represented by a certificate(s) from which the legend has been removed, in compliance with applicable prospectus delivery requirements,
if any. In the event that the Company does not accept the opinion of counsel provided by the Buyer with respect to the transfer
of Securities pursuant to an exemption from registration, such as Rule 144 or Regulation S, at the Deadline, it will be considered
an Event of Default pursuant to Section 3.2 of the Note.

 

g. Authorization;
Enforcement. This Agreement has been duly and validly authorized. This Agreement has been duly executed and delivered on behalf
of the Buyer, and this Agreement constitutes a valid and binding agreement of the Buyer enforceable in accordance with its terms.

 

3. REPRESENTATIONS
AND WARRANTIES OF THE COMPANY. The Company represents and warrants to the Buyer that:

 

a. Organization
and Qualification. The Company and each of its Subsidiaries (as defined below), if any, is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it is incorporated, with full power and authority (corporate
and other) to own, lease, use and operate its properties and to carry on its business as and where now owned, leased, used, operated
and conducted. Schedule 3(a) sets forth a list of all of the Subsidiaries of the Company and the jurisdiction in which each is
incorporated. The Company and each of its Subsidiaries is duly qualified as a foreign corporation to do business and is in good
standing in every jurisdiction in which its ownership or use of property or the nature of the business conducted by it makes such
qualification necessary except where the failure to be so qualified or in good standing would not have a Material Adverse Effect.
“Material Adverse Effect” means any material adverse effect on the business, operations, assets, financial condition
or prospects of the Company or its Subsidiaries, if any, taken as a whole, or on the transactions contemplated hereby or by the
agreements or instruments to be entered into in connection herewith. “Subsidiaries” means any corporation or other
organization, whether incorporated or unincorporated, in which the Company owns, directly or indirectly, any equity or other ownership
interest.

 

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b. Authorization;
Enforcement. (i) The Company has all requisite corporate power and authority to enter into and perform this Agreement, the
Note and to consummate the transactions contemplated hereby and thereby and to issue the Securities, in accordance with the terms
hereof and thereof, (ii) the execution and delivery of this Agreement, the Note by the Company and the consummation by it of the
transactions contemplated hereby and thereby (including without limitation, the issuance of the Note and the issuance and reservation
for issuance of the Conversion Shares issuable upon conversion or exercise thereof) have been duly authorized by the Company’s
Board of Directors and no further consent or authorization of the Company, its Board of Directors, or its shareholders is required,
(iii) this Agreement has been duly executed and delivered by the Company by its authorized representative, and such authorized
representative is the true and official representative with authority to sign this Agreement and the other documents executed in
connection herewith and bind the Company accordingly, and (iv) this Agreement constitutes, and upon execution and delivery by the
Company of the Note, each of such instruments will constitute, a legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms.

 

c. Capitalization.
Except as disclosed in the SEC Documents, no shares are reserved for issuance pursuant to the Company’s stock option plans,
no shares are reserved for issuance pursuant to securities (other than the Note) exercisable for, or convertible into or exchangeable
for shares of Common Stock and sufficient shares are reserved for issuance upon conversion of the Note (as required by the Note
and transfer agent share reserve letter). All of such outstanding shares of capital stock are, or upon issuance will be, duly authorized,
validly issued, fully paid and non-assessable. No shares of capital stock of the Company are subject to preemptive rights or any
other similar rights of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to
act of the Company. Except as disclosed in the SEC Documents, as of the effective date of this Agreement, (i) there are no outstanding
options, warrants, scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements, understandings, claims or
other commitments or rights of any character whatsoever relating to, or securities or rights convertible into or exchangeable for
any shares of capital stock of the Company or any of its Subsidiaries, or arrangements by which the Company or any of its Subsidiaries
is or may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries, (ii) there are no
agreements or arrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of its or
their securities under the 1933 Act and (iii) there are no anti-dilution or price adjustment provisions contained in any security
issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the issuance of the
Note or the Conversion Shares. The Company has filed in its SEC Documents true and correct copies of the Company’s Certificate
of Incorporation as in effect on the date hereof (“Certificate of Incorporation”), the Company’s By-laws, as
in effect on the date hereof (the “By-laws”), and the terms of all securities convertible into or exercisable for Common
Stock of the Company and the material rights of the holders thereof in respect thereto. The Company shall provide the Buyer with
a written update of this representation signed by the Company’s Chief Executive on behalf of the Company as of the Closing
Date.

 

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d. Issuance of Shares.
The Conversion Shares are duly authorized and reserved for issuance and, upon conversion of the Note in accordance with its respective
terms, will be validly issued, fully paid and non-assessable, and free from all taxes, liens, claims and encumbrances with respect
to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the Company and will
not impose personal liability upon the holder thereof.

 

e. Acknowledgment
of Dilution. The Company understands and acknowledges the potentially dilutive effect to the Common Stock upon the issuance
of the Conversion Shares upon conversion of the Note. The Company further acknowledges that its obligation to issue Conversion
Shares upon conversion of the Note in accordance with this Agreement, the Note is absolute and unconditional regardless of the
dilutive effect that such issuance may have on the ownership interests of other shareholders of the Company.

 

f. No Conflicts.
The execution, delivery and performance of this Agreement, the Note by the Company and the consummation by the Company of the transactions
contemplated hereby and thereby (including, without limitation, the issuance and reservation for issuance of the Conversion Shares)
will not (i) conflict with or result in a violation of any provision of the Certificate of Incorporation or By-laws, or (ii) violate
or conflict with, or result in a breach of any provision of, or constitute a default (or an event which with notice or lapse of
time or both could become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation
of, any agreement, indenture, patent, patent license or instrument to which the Company or any of its Subsidiaries is a party,
or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities
laws and regulations and regulations of any self-regulatory organizations to which the Company or its securities are subject) applicable
to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound
or affected (except for such conflicts, defaults, terminations, amendments, accelerations, cancellations and violations as would
not, individually or in the aggregate, have a Material Adverse Effect). Neither the Company nor any of its Subsidiaries is in violation
of its Certificate of Incorporation, By-laws or other organizational documents and neither the Company nor any of its Subsidiaries
is in default (and no event has occurred which with notice or lapse of time or both could put the Company or any of its Subsidiaries
in default) under, and neither the Company nor any of its Subsidiaries has taken any action or failed to take any action that would
give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to
which the Company or any of its Subsidiaries is a party or by which any property or assets of the Company or any of its Subsidiaries
is bound or affected, except for possible defaults as would not, individually or in the aggregate, have a Material Adverse Effect.
The businesses of the Company and its Subsidiaries, if any, are not being conducted, and shall not be conducted so long as the
Buyer owns any of the Securities, in violation of any law, ordinance or regulation of any governmental entity. Except as specifically
contemplated by this Agreement and as required under the 1933 Act and any applicable state securities laws, the Company is not
required to obtain any consent, authorization or order of, or make any filing or registration with, any court, governmental agency,
regulatory agency, self-regulatory organization or stock market or any third party in order for it to execute, deliver or perform
any of its obligations under this Agreement, the Note in accordance with the terms hereof or thereof or to issue and sell the Note
in accordance with the terms hereof and to issue the Conversion Shares upon conversion of the Note. All consents, authorizations,
orders, filings and registrations which the Company is required to obtain pursuant to the preceding sentence have been obtained
or effected on or prior to the date hereof. The Company is not in violation of the listing requirements of the Over-the-Counter
Bulletin Board (the “OTCBB”), the OTCQB or any similar quotation system, and does not reasonably anticipate that the
Common Stock will be delisted by the OTCBB, the OTCQB or any similar quotation system, in the foreseeable future. The Company and
its Subsidiaries are unaware of any facts or circumstances which might give rise to any of the foregoing.

 

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g. SEC Documents;
Financial Statements. The Company has timely filed all reports, schedules, forms, statements and other documents required to
be filed by it with the SEC pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “1934
Act”) (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial statements and
schedules thereto and documents (other than exhibits to such documents) incorporated by reference therein, being hereinafter referred
to herein as the “SEC Documents”). The Company has delivered to the Buyer true and complete copies of the SEC Documents,
except for such exhibits and incorporated documents. As of their respective dates, the SEC Documents complied in all material respects
with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents,
and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. None of the statements made in any such SEC Documents is, or has been, required to
be amended or updated under applicable law (except for such statements as have been amended or updated in subsequent filings prior
the date hereof). As of their respective dates, the financial statements of the Company included in the SEC Documents complied
as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC
with respect thereto. Such financial statements have been prepared in accordance with United States generally accepted accounting
principles, consistently applied, during the periods involved and fairly present in all material respects the consolidated financial
position of the Company and its consolidated Subsidiaries as of the dates thereof and the consolidated results of their operations
and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments).
Except as set forth in the financial statements of the Company included in the SEC Documents, the Company has no liabilities, contingent
or otherwise, other than (i) liabilities incurred in the ordinary course of business, and (ii) obligations under contracts and
commitments incurred in the ordinary course of business and not required under generally accepted accounting principles to be reflected
in such financial statements, which, individually or in the aggregate, are not material to the financial condition or operating
results of the Company. The Company is subject to the reporting requirements of the 1934 Act. For the avoidance of doubt, filing
of the documents required in this Section 3(g) via the SEC’s Electronic Data Gathering, Analysis, and Retrieval system (“EDGAR”)
shall satisfy all delivery requirements of this Section 3(g).

 

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h. Absence of Certain
Changes. There have been no material adverse change and no material adverse development in the assets, liabilities, business,
properties, operations, financial condition, results of operations, prospects or 1934 Act reporting status of the Company or any
of its Subsidiaries.

 

i. Absence of Litigation.
There is no action, suit, claim, proceeding, inquiry or investigation before or by any court, public board, government agency,
self-regulatory organization or body pending or, to the knowledge of the Company or any of its Subsidiaries, threatened against
or affecting the Company or any of its Subsidiaries, or their officers or directors in their capacity as such, that could have
a Material Adverse Effect. Schedule 3(i) contains a complete list and summary description of any pending or, to the knowledge of
the Company, threatened proceeding against or affecting the Company or any of its Subsidiaries, without regard to whether it would
have a Material Adverse Effect. The Company and its Subsidiaries are unaware of any facts or circumstances which might give rise
to any of the foregoing.

 

j. Patents, Copyrights,
etc. The Company and each of its Subsidiaries owns or possesses the requisite licenses or rights to use all patents, patent
applications, patent rights, inventions, know-how, trade secrets, trademarks, trademark applications, service marks, service names,
trade names and copyrights (“Intellectual Property”) necessary to enable it to conduct its business as now operated
(and, as presently contemplated to be operated in the future); Except as disclosed in the SEC Documents, there is no claim or action
by any person pertaining to, or proceeding pending, or to the Company’s knowledge threatened, which challenges the right
of the Company or of a Subsidiary with respect to any Intellectual Property necessary to enable it to conduct its business as now
operated (and, as presently contemplated to be operated in the future); to the best of the Company’s knowledge, the Company’s
or its Subsidiaries’ current and intended products, services and processes do not infringe on any Intellectual Property or
other rights held by any person; and the Company is unaware of any facts or circumstances which might give rise to any of the foregoing.
The Company and each of its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value
of their Intellectual Property.

 

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k. No Materially
Adverse Contracts, Etc. Neither the Company nor any of its Subsidiaries is subject to any charter, corporate or other legal
restriction, or any judgment, decree, order, rule or regulation which in the judgment of the Company’s officers has or is
expected in the future to have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries is a party to any contract
or agreement which in the judgment of the Company’s officers has or is expected to have a Material Adverse Effect.

 

l. Tax Status.
The Company and each of its Subsidiaries has made or filed all federal, state and foreign income and all other tax returns, reports
and declarations required by any jurisdiction to which it is subject (unless and only to the extent that the Company and each of
its Subsidiaries has set aside on its books provisions reasonably adequate for the payment of all unpaid and unreported taxes)
and has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due
on such returns, reports and declarations, except those being contested in good faith and has set aside on its books provisions
reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations
apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the
officers of the Company know of no basis for any such claim. The Company has not executed a waiver with respect to the statute
of limitations relating to the assessment or collection of any foreign, federal, state or local tax. None of the Company’s
tax returns is presently being audited by any taxing authority.

 

m. Certain Transactions.
Except for arm’s length transactions pursuant to which the Company or any of its Subsidiaries makes payments in the ordinary
course of business upon terms no less favorable than the Company or any of its Subsidiaries could obtain from third parties and
other than the grant of stock options disclosed on Schedule 3(c), none of the officers, directors, or employees of the Company
is presently a party to any transaction with the Company or any of its Subsidiaries (other than for services as employees, officers
and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing
for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee
or, to the knowledge of the Company, any corporation, partnership, trust or other entity in which any officer, director, or any
such employee has a substantial interest or is an officer, director, trustee or partner.

 

n. Disclosure.
All information relating to or concerning the Company or any of its Subsidiaries set forth in this Agreement and provided to the
Buyer pursuant to Section 2(d) hereof and otherwise in connection with the transactions contemplated hereby is true and correct
in all material respects and the Company has not omitted to state any material fact necessary in order to make the statements made
herein or therein, in light of the circumstances under which they were made, not misleading. No event or circumstance has occurred
or exists with respect to the Company or any of its Subsidiaries or its or their business, properties, prospects, operations or
financial conditions, which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company
but which has not been so publicly announced or disclosed (assuming for this purpose that the Company’s reports filed under
the 1934 Act are being incorporated into an effective registration statement filed by the Company under the 1933 Act).

 

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o. Acknowledgment
Regarding Buyer’s Purchase of Securities. The Company acknowledges and agrees that the Buyer is acting solely in the
capacity of arm’s length purchasers with respect to this Agreement and the transactions contemplated hereby. The Company
further acknowledges that the Buyer is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity)
with respect to this Agreement and the transactions contemplated hereby and any statement made by the Buyer or any of its respective
representatives or agents in connection with this Agreement and the transactions contemplated hereby is not advice or a recommendation
and is merely incidental to the Buyer’ purchase of the Securities. The Company further represents to the Buyer that the Company’s
decision to enter into this Agreement has been based solely on the independent evaluation of the Company and its representatives.

 

p. No Integrated
Offering. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has directly or indirectly
made any offers or sales in any security or solicited any offers to buy any security under circumstances that would require registration
under the 1933 Act of the issuance of the Securities to the Buyer. The issuance of the Securities to the Buyer will not be integrated
with any other issuance of the Company’s securities (past, current or future) for purposes of any shareholder approval provisions
applicable to the Company or its securities.

 

q. No Brokers.
The Company has taken no action which would give rise to any claim by any person for brokerage commissions, transaction fees or
similar payments relating to this Agreement or the transactions contemplated hereby.

 

r. Permits; Compliance.
The Company and each of its Subsidiaries is in possession of all franchises, grants, authorizations, licenses, permits, easements,
variances, exemptions, consents, certificates, approvals and orders necessary to own, lease and operate its properties and to carry
on its business as it is now being conducted (collectively, the “Company Permits”), and there is no action pending
or, to the knowledge of the Company, threatened regarding suspension or cancellation of any of the Company Permits. Neither the
Company nor any of its Subsidiaries is in conflict with, or in default or violation of, any of the Company Permits, except for
any such conflicts, defaults or violations which, individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect. Neither the Company nor any of its Subsidiaries has received any notification with respect to possible
conflicts, defaults or violations of applicable laws, except for notices relating to possible conflicts, defaults or violations,
which conflicts, defaults or violations would not have a Material Adverse Effect.

 

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s. Environmental
Matters.

 

(i) There are, to the
Company’s knowledge, with respect to the Company or any of its Subsidiaries or any predecessor of the Company, no past or
present violations of Environmental Laws (as defined below), releases of any material into the environment, actions, activities,
circumstances, conditions, events, incidents, or contractual obligations which may give rise to any common law environmental liability
or any liability under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 or similar federal, state,
local or foreign laws and neither the Company nor any of its Subsidiaries has received any notice with respect to any of the foregoing,
nor is any action pending or, to the Company’s knowledge, threatened in connection with any of the foregoing. The term “Environmental
Laws” means all federal, state, local or foreign laws relating to pollution or protection of human health or the environment
(including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata), including, without
limitation, laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants contaminants, or toxic
or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating
to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials,
as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments, licenses, notices or notice letters,
orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.

 

(ii) Other than those
that are or were stored, used or disposed of in compliance with applicable law, no Hazardous Materials are contained on or about
any real property currently owned, leased or used by the Company or any of its Subsidiaries, and no Hazardous Materials were released
on or about any real property previously owned, leased or used by the Company or any of its Subsidiaries during the period the
property was owned, leased or used by the Company or any of its Subsidiaries, except in the normal course of the Company’s
or any of its Subsidiaries’ business.

 

(iii) There are no underground
storage tanks on or under any real property owned, leased or used by the Company or any of its Subsidiaries that are not in compliance
with applicable law.

 

t. Title to Property.
Except as disclosed in the SEC Documents the Company and its Subsidiaries have good and marketable title in fee simple to all real
property and good and marketable title to all personal property owned by them which is material to the business of the Company
and its Subsidiaries, in each case free and clear of all liens, encumbrances and defects or such as would not have a Material Adverse
Effect. Any real property and facilities held under lease by the Company and its Subsidiaries are held by them under valid, subsisting
and enforceable leases with such exceptions as would not have a Material Adverse Effect.

 

    11

     

    

 

u. Internal Accounting
Controls. Except as disclosed in the SEC Documents the Company and each of its Subsidiaries maintain a system of internal accounting
controls sufficient, in the judgment of the Company’s board of directors, to provide reasonable assurance that (i) transactions
are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset
accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization
and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.

 

v. Foreign Corrupt
Practices. Neither the Company, nor any of its Subsidiaries, nor any director, officer, agent, employee or other person acting
on behalf of the Company or any Subsidiary has, in the course of his actions for, or on behalf of, the Company, used any corporate
funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; made any direct
or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; violated or is in
violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, or made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment to any foreign or domestic government official or employee.

 

w. Solvency.
The Company (after giving effect to the transactions contemplated by this Agreement) is solvent (i.e., its assets have a
fair market value in excess of the amount required to pay its probable liabilities on its existing debts as they become absolute
and matured) and currently the Company has no information that would lead it to reasonably conclude that the Company would not,
after giving effect to the transaction contemplated by this Agreement, have the ability to, nor does it intend to take any action
that would impair its ability to, pay its debts from time to time incurred in connection therewith as such debts mature. The Company
did not receive a qualified opinion from its auditors with respect to its most recent fiscal year end and, after giving effect
to the transactions contemplated by this Agreement, does not anticipate or know of any basis upon which its auditors might issue
a qualified opinion in respect of its current fiscal year. For the avoidance of doubt any disclosure of the Borrower’s ability
to continue as a “going concern” shall not, by itself, be a violation of this Section 3(w).

 

x. No Investment
Company. The Company is not, and upon the issuance and sale of the Securities as contemplated by this Agreement will not be
an “investment company” required to be registered under the Investment Company Act of 1940 (an “Investment Company”).
The Company is not controlled by an Investment Company.

 

y. Insurance.
Upon written request the Company will provide to the Buyer true and correct copies of all policies relating to directors’
and officers’ liability coverage, errors and omissions coverage, and commercial general liability coverage, if any.

 

    12

     

    

 

z. Breach of Representations
and Warranties by the Company. If the Company breaches any of the representations or warranties set forth in this Section 3,
and in addition to any other remedies available to the Buyer pursuant to this Agreement, it will be considered an Event of default
under Section 3.4 of the Note.

 

4. COVENANTS.

 

a. Best Efforts.
The parties shall use their commercially reasonable best efforts to satisfy timely each of the conditions described in Section
6 and 7 of this Agreement.

 

b. Use of Proceeds.
The Company shall use the proceeds from the sale of the Note for working capital and other general corporate purposes and shall
not, directly or indirectly, use such proceeds for any loan to or investment in any other corporation, partnership, enterprise
or other person (except in connection with its currently existing direct or indirect Subsidiaries).

 

c. Financial Information.
The Company agrees to send or make available the following reports to the Buyer until the Buyer transfers, assigns, or sells all
of the Securities: (i) within ten (10) days after the filing with the SEC, a copy of its Annual Report on Form 10-K its Quarterly
Reports on Form 10-Q and any Current Reports on Form 8-K; (ii) within one (1) day after release, copies of all press releases
issued by the Company or any of its Subsidiaries; and (iii) contemporaneously with the making available or giving to the shareholders
of the Company, copies of any notices or other information the Company makes available or gives to such shareholders. For the avoidance
of doubt, filing the documents required in (i) above via EDGAR or releasing any documents set forth in (ii) above via a recognized
wire service shall satisfy the delivery requirements of this Section 4(f).

 

d. Listing.
The Company shall promptly secure the listing of the Conversion Shares upon each national securities exchange or automated quotation
system, if any, upon which shares of Common Stock are then listed (subject to official notice of issuance) and, so long as the
Buyer owns any of the Securities, shall maintain, so long as any other shares of Common Stock shall be so listed, such listing
of all Conversion Shares from time to time issuable upon conversion of the Note. The Company will obtain and, so long as the Buyer
owns any of the Securities, maintain the listing and trading of its Common Stock on the OTCBB, OTCQB, OTC Pink or any equivalent
replacement exchange, the Nasdaq National Market (“Nasdaq”), the Nasdaq SmallCap Market (“Nasdaq SmallCap”),
the New York Stock Exchange (“NYSE”), or the NYSE MKT and will comply in all respects with the Company’s reporting,
filing and other obligations under the bylaws or rules of the Financial Industry Regulatory Authority (“FINRA”) and
such exchanges, as applicable. The Company shall promptly provide to the Buyer copies of any material notices it receives from
the OTCBB, OTCQB and any other exchanges or quotation systems on which the Common Stock is then listed regarding the continued
eligibility of the Common Stock for listing on such exchanges and quotation systems.

 

    13

     

    

 

e. Corporate Existence.
So long as the Buyer beneficially owns any Note, the Company shall maintain its corporate existence and shall not sell all or substantially
all of the Company’s assets, except in the event of a merger or consolidation or sale of all or substantially all of the
Company’s assets, where the surviving or successor entity in such transaction (i) assumes the Company’s obligations
hereunder and under the agreements and instruments entered into in connection herewith and (ii) is a publicly traded corporation
whose Common Stock is listed for trading on the OTCBB, OTCQB, OTC Pink, Nasdaq, NasdaqSmallCap, NYSE or AMEX.

 

f. No Integration.
The Company shall not make any offers or sales of any security (other than the Securities) under circumstances that would require
registration of the Securities being offered or sold hereunder under the 1933 Act or cause the offering of the Securities to be
integrated with any other offering of securities by the Company for the purpose of any stockholder approval provision applicable
to the Company or its securities.

 

g. Failure to Comply
with the 1934 Act. So long as the Buyer beneficially owns the Note, the Company shall comply with the reporting requirements
of the 1934 Act; and the Company shall continue to be subject to the reporting requirements of the 1934 Act.

 

h. Trading Activities.
Neither the Buyer nor its affiliates has an open short position (or other hedging or similar transactions) in the common stock
of the Company and the Buyer agree that it shall not, and that it will cause its affiliates not to, engage in any short sales of
or hedging transactions with respect to the common stock of the Company.

i. Breach of Covenants.
If the Company breaches any of the covenants set forth in this Section 4, and in addition to any other remedies available to the
Buyer pursuant to this Agreement, it will be considered an event of default under Section 3.3 of the Note.

 

5. Transfer Agent
Instructions. Prior to registration of the Conversion Shares under the 1933 Act or the date on which the Conversion Shares
may be sold pursuant to Rule 144 without any restriction as to the number of Securities as of a particular date that can then be
immediately sold, all such certificates shall bear the restrictive legend specified in Section 2(g) of this Agreement.  The
Company warrants that: (i) no stop transfer instructions to give effect to Section 2(f) hereof (in the case of the Conversion Shares,
prior to registration of the Conversion Shares under the 1933 Act or the date on which the Conversion Shares may be sold pursuant
to Rule 144 without any restriction as to the number of Securities as of a particular date that can then be immediately sold),
will be given by the Company to its transfer agent and that the Securities shall otherwise be freely transferable on the books
and records of the Company as and to the extent provided in this Agreement and the Note; (ii) it will not direct its transfer agent
not to transfer or delay, impair, and/or hinder its transfer agent in transferring (or issuing) (electronically or in certificated
form) any certificate for Conversion Shares to be issued to the Buyer upon conversion of or otherwise pursuant to the Note as and
when required by the Note and this Agreement; and (iii) it will not fail to remove (or directs its transfer agent not to remove
or impairs, delays, and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions
in respect thereof) on any certificate for any Conversion Shares issued to the Buyer upon conversion of or otherwise pursuant to
the Note as and when required by the Note and this Agreement.  Nothing in this Section shall affect in any way the Buyer’s
obligations and agreement set forth in Section 2(g) hereof to comply with all applicable prospectus delivery requirements, if any,
upon re-sale of the Securities.  If the Buyer provides the Company, at the cost of the Buyer, with (i) an opinion of counsel
in form, substance and scope customary for opinions in comparable transactions, to the effect that a public sale or transfer of
such Securities may be made without registration under the 1933 Act and such sale or transfer is effected or (ii) the Buyer provides
reasonable assurances that the Securities can be sold pursuant to Rule 144, the Company shall permit the transfer, and, in the
case of the Conversion Shares, promptly instruct its transfer agent to issue one or more certificates, free from restrictive legend,
in such name and in such denominations as specified by the Buyer.  The Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the Buyer, by vitiating the intent and purpose of the transactions contemplated hereby. 
Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Section may be inadequate
and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Section, that the Buyer shall
be entitled, in addition to all other available remedies, to an injunction restraining any breach and requiring immediate transfer,
without the necessity of showing economic loss and without any bond or other security being required.

 

    14

     

    

 

6. CONDITIONS PRECEDENT
TO THE COMPANY’S OBLIGATIONS TO SELL. The obligation of the Company hereunder to issue and sell the Note to the Buyer
at the Closing is subject to the satisfaction, at or before the Closing Date of each of the following conditions thereto, provided
that these conditions are for the Company’s sole benefit and may be waived by the Company at any time in its sole discretion:

 

a. The Buyer shall
have executed this Agreement and delivered the same to the Company.

 

b. The Buyer shall
have delivered the Purchase Price in accordance with Section 1(b) above.

 

c. The representations
and warranties of the Buyer shall be true and correct in all material respects as of the date when made and as of the Closing Date
as though made at that time (except for representations and warranties that speak as of a specific date), and the Buyer shall have
performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement
to be performed, satisfied or complied with by the Buyer at or prior to the Closing Date.

 

d. No litigation, statute,
rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by or
in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the
matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.

 

    15

     

    

 

7. CONDITIONS PRECEDENT
TO THE BUYER’S OBLIGATION TO PURCHASE. The obligation of the Buyer hereunder to purchase the Note at the Closing is subject
to the satisfaction, at or before the Closing Date of each of the following conditions, provided that these conditions are for
the Buyer’s sole benefit and may be waived by the Buyer at any time in its sole discretion:

 

a. The Company shall
have executed this Agreement and delivered the same to the Buyer.

 

b. The Company shall
have delivered to the Buyer duly executed Note (in such denominations as the Buyer shall request) in accordance with Section 1(b)
above.

 

c. The representations
and warranties of the Company shall be true and correct in all material respects as of the date when made and as of the Closing
Date as though made at such time (except for representations and warranties that speak as of a specific date) and the Company shall
have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing Date. The Buyer shall have received
a certificate or certificates, executed by the chief executive officer of the Company, dated as of the Closing Date, to the foregoing
effect and as to such other matters as may be reasonably requested by the Buyer including, but not limited to certificates with
respect to the Company’s Certificate of Incorporation, By-laws and Board of Directors’ resolutions relating to the
transactions contemplated hereby.

 

d. No litigation, statute,
rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by or
in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the
matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.

 

e. No event shall have
occurred which could reasonably be expected to have a Material Adverse Effect on the Company including but not limited to a change
in the 1934 Act reporting status of the Company or the failure of the Company to be timely in its 1934 Act reporting obligations.

 

f. The Conversion Shares
shall have been authorized for quotation on the OTCBB, OTCQB or any similar quotation system and trading in the Common Stock on
the OTCBB, OTCQB or any similar quotation system shall not have been suspended by the SEC or the OTCBB, OTCQB or any similar quotation
system.

 

g. The Buyer shall
have received an officer’s certificate described in Section 3(c) above, dated as of the Closing Date.

 

    16

     

    

 

8. GOVERNING
LAW; MISCELLANEOUS.

 

a. Governing Law.
This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada without regard to principles
of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Agreement
shall be brought only in the state courts of New York or in the federal courts located in the state of New York. The parties to
this Agreement hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not
assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The Company and Buyer waive
trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs.
In the event that any provision of this Agreement or any other agreement delivered in connection herewith is invalid or unenforceable
under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid
or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. Each party
hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in
connection with this Agreement or any other Transaction Document by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and
agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall
be deemed to limit in any way any right to serve process in any other manner permitted by law.

 

b. Counterparts;
Signatures by Facsimile. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original
but all of which shall constitute one and the same agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party. This Agreement, once executed by a party, may be delivered to the other party hereto by
facsimile transmission of a copy of this Agreement bearing the signature of the party so delivering this Agreement.

 

c. Headings.
The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the interpretation of,
this Agreement.

 

d. Severability.
In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then
such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform
with such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect
the validity or enforceability of any other provision hereof.

 

    17

     

    

 

e. Entire Agreement;
Amendments. This Agreement and the instruments referenced herein contain the entire understanding of the parties with respect
to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor the
Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement
may be waived or amended other than by an instrument in writing signed by the majority in interest of the Buyer.

 

f. Notices.
All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing
and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return
receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted
by hand delivery, telegram, facsimile, or electronic mail addressed as set forth below or to such other address as such party shall
have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall
be deemed effective (a) upon hand delivery, delivery by facsimile, with accurate confirmation generated by the transmitting facsimile
machine, or delivery by electronic mail when sent, at the address or number designated below (if delivered on a business day during
normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other
than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following
the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing,
whichever shall first occur. The addresses for such communications shall be:

 

If to the
Company, to:

 

BIOSOLAR, INC.

27936 Lost Canyon Road, Suite
202

Santa Clarita, CA 91387

e-mail: ir@biosolar.com

 

If to the
Holder, to:

 

CROWN BRIDGE PARTNERS, LLC

1173a 2nd
Avenue, Suite 126

New York,
NY 10065

e-mail: Info@CrownBridgeCapital.com

 

Each party shall provide
notice to the other party of any change in address.

 

    18

     

    

 

g. Successors and
Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns. Neither
the Company nor the Buyer shall assign this Agreement or any rights or obligations hereunder without the prior written consent
of the other. Notwithstanding the foregoing, subject to Section 2(f), the Buyer may assign its rights hereunder to any person
that purchases Securities in a private transaction from the Buyer or to any of its “affiliates,” as that term is defined
under the 1934 Act, without the consent of the Company.

 

h. Third Party Beneficiaries.
This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is
not for the benefit of, nor may any provision hereof be enforced by, any other person.

 

i. Survival.
The representations and warranties of the Company and the agreements and covenants set forth in this Agreement shall survive the
closing hereunder. The Company agrees to indemnify and hold harmless the Buyer and all their officers, directors, employees and
agents for loss or damage arising as a result of or related to any breach by the Company of any of its representations, warranties
and covenants set forth in this Agreement or any of its covenants and obligations under this Agreement, including advancement of
expenses as they are incurred.

 

j. Further Assurances.
Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver
all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry
out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

 

k. No Strict Construction.
The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and
no rules of strict construction will be applied against any party.

 

l. Remedies.

 

(i) The Company
acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer by vitiating the intent
and purpose of the transaction contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach of
its obligations under this Agreement will be inadequate and agrees, in the event of a breach or threatened breach by the Company
of the provisions of this Agreement, that the Buyer shall be entitled, in addition to all other available remedies at law or in
equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any
breach of this Agreement and to enforce specifically the terms and provisions hereof, without the necessity of showing economic
loss and without any bond or other security being required.

 

[ - signature page follows - ]

 

    19

     

    

 

IN WITNESS WHEREOF,
the undersigned Buyer and the Company have caused this Agreement to be duly executed as of the date first above written.

 

	BIOSOLAR, INC.	 
	 	 	 
	By:	 	 
	Name:	David Lee	 
	Title:	Chief Executive Officer	 
	 	 	 
	 	 	 
	CROWN BRIDGE PARTNERS, LLC	 
	 	 	 
	By:	                	 
	Name: 	 	 
	Title:  	 	 

 

AGGREGATE SUBSCRIPTION AMOUNT:  

 

	Aggregate Principal Amount of Note:	 	US$53,500.00
	 	 	 
	Aggregate Purchase Price:	 	US$51,500.00*

 

		*	The purchase price of $51,500.00 for the Note shall be
paid within a reasonable amount of time after the full execution of the Note and related transaction documents.

 

 

 

20ex_155331.htm

EXHIBIT 10.1

 

AGREEMENT FOR PURCHASE

AND SALE OF REAL ESTATE

 

 

THIS AGREEMENT FOR PURCHASE AND SALE OF REAL ESTATE (this “Agreement”) is entered into as of August __, 2019 (the “Effective Date”), by and between EAST COAST LOGISTICS & DISTRIBUTION, INC., a Pennsylvania business corporation (“Seller”) and INNOVATIVE FOOD HOLDINGS, INC., a Florida corporation authorized to do business in the Commonwealth of Pennsylvania (“Purchaser”).

 

WITNESSETH:

 

WHEREAS, Seller is the owner of the Property (as defined below); and

 

WHEREAS, Purchaser desires to purchase from Seller and Seller desires to sell to Purchaser all of the Property on the terms and conditions set forth below.

 

NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

 

ARTICLE 1

AGREEMENT TO PURCHASE AND SELL

 

Seller agrees to sell and convey to Purchaser, and Purchaser agrees to purchase from Seller, upon the terms and conditions set forth in this Agreement, all of Seller’s right, title and interest in and to the following (collectively, the “Property”):

 

(a)     the land legally described on Exhibit A attached hereto and made a part hereof and commonly known as 220 Oak Hill Road, Mountain Top, Luzerne County, Pennsylvania 18707 together with all privileges, rights, easements, hereditaments, and appurtenances belonging to the land, and all right, title and interest of the titleholder thereof in and to any streets, alleys, passages, and other rights-of-way included therein or adjacent thereto (before or after the vacation thereof) (the “Land”) (To the extent the legal description provided in this Agreement is inconsistent with that of the Survey (as hereinafter defined) or the Title Commitment (as hereinafter defined), the language of the Survey or Title Commitment will control.);

 

(b)     all buildings, structures, parking areas and other improvements located on the Land and any and all fixtures attached thereto (collectively, the “Improvements”);

 

(c)     the articles of personal property owned by Seller as set forth on Exhibit B attached hereto and made a part hereof or used in connection with the operation of the Improvements (collectively, the “Personal Property”); and

 

(d)     all licenses, franchises, permits, authorizations and approvals used in connection with or relating to the ownership, occupancy or operation of any part of the Land, Improvements or Personal Property (collectively, the “Permits”).

 

1

 

 

ARTICLE 2

PURCHASE PRICE

 

2.1     Purchase Price.   The purchase price (the “Purchase Price”) to be paid by Purchaser to Seller for the Property will be Four Million Five Hundred Thousand and 00/100 Dollars ($4,500,000.00), subject to the adjustments, credits and prorations described below.

 

2.2     Payment of Purchase Price. 

 

	 	
			(a)

				
			Within five (5) business days following the Effective Date, Purchaser will deliver or cause to be delivered to Chicago Title Insurance Company (the "Title Company") the sum of Twenty Five Thousand Dollars ($25,000.00) (the "Deposit") to be held by the Title Company in an interest bearing escrow account.

			

 

	 	
			(b)

				
			Within five (5) business days following the expiration of the General Review Period (as defined below), provided that this Agreement has not been terminated in accordance with Section 3 below, Purchaser will deliver or cause to be delivered to the Title Company the additional sum of Twenty Five Thousand Dollars ($25,000.00), which sum will be added to and become part of the Deposit.

			

 

	 	
			(c)

				
			At Closing, Purchaser will pay to Seller the balance of the Purchase Price, which will include adjustments for the Deposit and the prorations, credits and closing costs allocated to the parties pursuant to this Agreement, in cash.

			

 

2.3     Closing Costs.   Seller will pay the cost of obtaining and recording any releases of any mortgages, liens (including, without limitation, liens on Personal Property) or other encumbrances that are not Permitted Exceptions (as defined below). Purchaser will pay the cost of: (a) the Title Policy (as defined below), including the cost of extended coverage over the standard printed exceptions; (b) the cost of the Survey; (c) the endorsements described in Section 4.2 below; (d) the premium for the lender’s title insurance policy (if any) and any related endorsements; and (e) the cost of recording the Deed and any other documents related to the financing of its purchase of the Property. The expense and cost of all state and local realty transfer taxes relating to the purchase of the Property shall be divided equally between the Seller and Purchaser. All other closing costs will be apportioned according to prevailing local custom and law. Except as expressly provided in this Agreement to the contrary, each party will pay its own legal fees.

 

2.4     Closing Prorations and Adjustments.   The following items will be prorated and adjusted as of 12:01 a.m. on the Closing Date (as defined below) as follows:

 

(a)     Seller will credit Purchaser at Closing real estate taxes, charges and assessments affecting the Property based upon 100% of the last ascertainable tax bill(s). Any such taxes

 

2

 

 

prorated on an estimated basis on the Closing Date will be reprorated by the parties when and as the actual amount of such taxes becomes known. Any adjustment due to reproration of taxes will be paid not later than thirty (30) days following the final determination of the amount of such taxes and delivery of the demand by the party to whom payment is due. The reproration obligations of the parties will survive the Closing.

 

(b)     Seller will pay all expenses necessary to repair, operate and maintain the Property in its current condition accrued up to and including the Closing Date. Any such expenses which are prepaid as of the Closing Date will be credited to Seller, and Purchaser will be responsible to pay such expenses accruing subsequent to the Closing Date. Any expenses that have accrued up to and including the Closing Date but have not been billed to or paid by Seller as of the Closing Date will, to the extent possible, be paid by Seller (with such payment evidenced to Purchaser) at the time of Closing, or, if not so payable, at Purchaser’s option, will be credited to Purchaser, provided that such credit will not release Seller of the obligation to make full payment if the credit is insufficient for any reason. Utility meters for utility services payable by Seller will be read on or immediately prior to the Closing Date, if possible, and the amounts due as disclosed by such readings will be paid by Seller or credited to Purchaser. Otherwise all utility charges and billings will be prorated using the prior month’s bill as of the Closing Date and will be reprorated upon receipt of actual bills for the period in question.

 

(c)     Any and all other items customarily prorated or required by any other provision of this Agreement to be prorated or adjusted.

 

2.5       Payment of Purchase Price. The Purchase Price, plus or minus any adjustments, credits or prorations provided for herein, will be paid to Seller at the Closing by wire transfer of immediately available funds.

 

2.6       Purchaser’s Financing. During the period of time beginning on the Effective Date and ending at 5:00 P.M. (Eastern Time Zone) on the date that is forty-five (45) days after the Effective Date (the “Financing Period”), Purchaser will obtain a written commitment for a loan in the amount of $3,855,000.00, with an interest rate not to exceed six percent (6.00%) per year, and an amortization period of at least twenty (20) years (the “Loan Commitment”). Purchaser will apply for the Loan Commitment within ten (10) days after the Effective Date. If Purchaser makes a good faith effort but is unable to obtain the Loan Commitment, then Purchaser will have the right to terminate this Agreement by providing written notice of termination to Seller prior to the expiration of the Financing Period. If Purchaser does not provide written notice of termination prior to the expiration of the Financing Period, then Purchaser will for all purposes be deemed to have secured the Loan Commitment. If Purchaser terminates this Agreement pursuant to Section 3, then the Title Company will return the Deposit to Purchaser and the parties will have no further obligations hereunder except for any obligations that expressly survive termination.

 

3

 

 

ARTICLE 3

PURCHASER’S DUE DILIGENCE

 

3.1     General Review Period; Termination Right. During the period of time beginning on the Effective Date and ending at 5:00 P.M. (Eastern Time Zone) on the date that is forty-five (45) days after the Effective Date (the “General Review Period”), Purchaser and its agents, employees, contractors and representatives will have the right to: (i) enter upon the Land and Improvements to conduct tests, inspections and investigations of the physical condition of the Land, Improvements and Personal Property (including, without limitation, environmental inspections and investigations); and (ii) review books, records and other due diligence materials relating to the Property as may be necessary for Purchaser to determine whether any matter or condition makes the Property unacceptable to Purchaser in Purchaser’s sole and absolute discretion. Purchaser agrees that a representative of Seller will be afforded not less than 24 hours prior notice to allow Seller or its representative to be present at each inspection or test of the Property.

 

Purchaser will repair any damage to the Property resulting from Purchaser’s activities on the Property under this Section 3.1. Purchaser will also defend (with counsel reasonably satisfactory to Seller), indemnify and hold harmless Seller from and against any and all loss, cost, damage, expense or liability arising out of Purchaser's activities on the Property and/or the cost thereof, or out of any negligence or willful misconduct of Purchaser in performing the surveys, tests and inspections contemplated hereby, provided that, without expanding by implication the scope of the foregoing indemnity, the foregoing agreement to indemnify and hold harmless will not apply to any loss, cost, damage, expense or liability arising out of or related to (i) any condition upon or under the Property not caused by Purchaser, (ii) any violation of law existing with respect to the Property not caused by Purchaser, or (iii) the negligence or willful misconduct of Seller or its shareholders, officers, directors, employees, agents or contractors. The foregoing indemnity will survive the expiration or earlier termination of this Agreement.

 

Within five (5) Business Days after the Effective Date, Seller will provide Purchaser with copies of materials in its possession relating to Purchaser’s due diligence investigations, including without limitation, existing surveys, title reports, service contracts, environmental reports, blueprints and warranties, third party reports and such other items in Seller’s possession that Purchaser reasonably requests.

 

If Purchaser, in its sole and absolute discretion, determines that the Property is unacceptable to Purchaser, then Purchaser may terminate this Agreement by delivering written notice of termination to Seller at any time on or before the end of the General Review Period and deliver a notice to the Title Company demanding that the Deposit be delivered to Purchaser at which time, the Deposit will be immediately returned to Purchaser. If Purchaser does not terminate this Agreement during the General Review Period as set forth herein, the Deposit will become non-refundable absent a Seller default.

 

Purchaser will maintain or cause its designated consultants, auditors or engineers to maintain in full force and effect such types of insurance as are reasonable and customary under the circumstances, covering all individuals employed by or retained by Purchaser or its representatives in connection with Purchaser’s surveys, tests and inspections; including, but not limited to comprehensive general liability insurance in the amount of $1,000,000.00. Certificates of such

 

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insurance naming Seller as an additional insured will be provided to Seller before any surveys, tests and inspections.

 

Purchaser will keep any information generated during its assessment of the Property (including its environmental assessment) as confidential unless required by law to do otherwise and will not disclose such to any third party other than Purchaser’s attorney or lender (or prospective lender), any prospective tenant, or any such prospect’s consultant(s), or other real estate consultant engaged specifically in connection with this acquisition or Purchaser’s efforts to secure a future lease encumbering all or a portion of the Property, without prior approval of Seller, which will be within Seller’s sole discretion; and if this transaction fails to close as required herein all documents supplied Purchaser by Seller will be promptly returned to Seller.

 

3.2     Existing Leases. Purchaser expressly acknowledges that the Property is encumbered by five (5) leases (the “Leases”). Within five (5) days of the Effective Date of this Agreement, Seller will furnish to Purchaser a copy of the Leases. On or before Closing (as defined below), Seller will provide Purchaser with tenant estoppel certificates, signed by the tenants, in a form reasonably acceptable to Purchaser.

 

3.3     Survey. Purchaser, at its cost, will obtain a survey certified to Seller, and the Title Insurer, and made by a registered Pennsylvania land surveyor, in accordance with February 23, 2016 ALTA/NSPS standards, including ALTA/NSPS Table A requirements, 1, 2, 3, 4, 6(a), 11(a), 13 16, 18 and 20 in the amount of $1,000,000 (the “Survey”). In all events, the Survey shall allow Title Insurer to remove all survey exceptions from the title commitment and grant an extended coverage endorsement to Purchaser, except for the Permitted Exceptions. The Survey shall reveal no encroachments onto the Property from any adjacent property, no encroachments by any of the improvements onto any adjacent property, and no violation by any of the improvements of any building line or easement affecting the Property. The Survey shall also state that the Property is not in a flood hazard area that would require flood insurance under the Federal Disaster Protection Act of 1973.

 

3.4     Due Diligence. No representation or warranty contained herein shall be affected or deemed waived or otherwise impaired or limited by reason of any investigation or due diligence conducted by Purchaser or by any agent or representative of Purchaser, except to the extent that on or before the Closing Date, the Purchaser obtains or acquires knowledge of any facts, events or circumstances that would cause a representation or warranty to be untrue or inaccurate. If Purchaser acquires such knowledge, Purchaser shall (i) provide written notice of termination to Seller on or before the Closing Date, in which case the Deposit will be immediately returned to Purchaser and neither party will have any further rights or obligations hereunder; or (ii) proceed to Closing, in which case Purchaser shall execute at Closing an affidavit attesting to the fact that, as of Closing, Purchaser is not aware of any facts or circumstances that would give rise to a claim for a breach of a representation or warranty by Seller.

 

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ARTICLE 4

TITLE INSURANCE

 

4.1     Title Commitment.   Within thirty (30) days after the Effective Date, Purchaser will order from the Title Company and deliver to Seller:

 

(a)     A commitment (the “Title Commitment”) from Chicago Title Insurance Company (the “Title Insurer”) having an effective date no earlier than thirty (30) days prior to the Effective Date; and

 

(b)     Legible photocopies of any documents identified in the Title Commitment.

 

4.2     Title Objections. Within ten (10) days after Purchaser delivers the later of the Survey and the Title Commitment to Seller, Purchaser will deliver to Seller’s attorney a list of any objections to title and survey matters with respect to the Land (the “Title Objections”). If Purchaser fails to submit a list of the Title Objections within the 10-day period described above, then the “Permitted Exceptions” will be deemed to be all matters appearing on the Survey and the Title Commitment.

 

If Purchaser delivers a list of Title Objections within the 10-day period described above in this Section 4.2, then Seller may, at its election, within ten (10) days after Seller receives the Title Objections: (a) cause the Title Objections to be deleted from the Title Commitment; (b) cause the Title Insurer to insure over or commit to insure over such Title Objections; (c) agree, in writing, to cause such Title Objections to be deleted or insured over at or prior to the Closing; or (d) terminate the Agreement, in which case the Deposit will be immediately returned to Purchaser and neither party shall have any further rights or obligations hereunder. If within the aforementioned 10-day cure period, Seller fails or elects not to take one or more of the actions described in clauses (a), (b), (c) or (d) above in this Section 4.2 with respect to all of the Title Objections, then Purchaser may by written notice to Seller within five (5) days after the expiration of Seller’s 10-day cure period elect, as its sole remedy, to: terminate this Agreement, in which case all of the Deposit will be returned to Purchaser.

 

4.3     Title Policy.   At the Closing, Purchaser will procure an ALTA 2006 Form Owner’s Title Insurance Policy from the Title Insurer or in lieu thereof a marked-up title commitment from the Title Insurer (either being referred to herein as the “Title Policy”) which in either case will: (i) be dated as of the date of the recording of the Deed; (ii) name Purchaser or its designee as the insured; (iii) have a liability amount equal to the Purchase Price; (iv) show Purchaser as the owner of the Property in fee simple subject to no exceptions other than the Permitted Exceptions; (v) include extended coverage over the standard printed exceptions; and (vi) include the following endorsements: (A) zoning 3.1 (with parking); (B) survey; (C) access; (D) owner’s comprehensive; (E) PIN; (F) contiguity, if applicable; and (H) such other endorsements as Purchaser or its lender may reasonably request.

 

4.4     No Further Liens.   Seller agrees that it will not, from and after the Effective Date, cause or permit any actions that result in any additional exceptions to title.

 

ARTICLE 5

REPRESENTATIONS AND WARRANTIES

 

5.1      Representations and Warranties of Seller.   Subject to the provisions of this Article 5, Seller represents to Purchaser that as of the date of this Agreement:

 

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(a)     Litigation. To the best of Seller’s knowledge, there is no material pending or threatened litigation or condemnation action against the Property or against Seller with respect to the Property as of the date of this Agreement.

 

(b)     No Insolvency; No General Assignment. Seller is not a debtor in any state or federal insolvency, bankruptcy, receivership proceeding and Seller has not made a general assignment for the benefit of creditors.

 

(c)     Non-Foreign Person. Seller is not a “foreign person” as defined in Section 1445 of the Internal Revenue Code of 1986, as amended (the “Code”).

 

(d)     Contracts. Seller has not entered into any service or equipment leasing contracts relating to the Property which will be in force after the Closing.

 

(e)     Due Authority. This Agreement and all agreements, instruments and documents provided to be executed or to be caused to be executed by Seller are, or on the Closing Date will be, duly authorized, executed and delivered by and are binding upon Seller. Seller is a corporation, duly organized and validly existing and in good standing under the laws of the Commonwealth of Pennsylvania, and is duly authorized and qualified to do all things required of it under this Agreement.

 

(f)     Assessments. To the best of Seller’s knowledge, there are no pending or threatened special or betterment assessments affecting the Property or any portion thereof.

 

(g)     Zoning. To the best of Seller’s knowledge, the Property is currently zoned for its current use by the applicable governmental authorities and except for any violations arising from the current tenant’s use (or misuse), the Property is in material compliance with that zoning classification.

 

(h)     Habitat; Wetlands. To the best of Seller’s knowledge, there are no archaeological, anthropological or historical finds, objects or sites or any endangered or threatened species in, on or about the Property. No portion of the Property constitutes a “critical habitat” as such term is defined in the Endangered Species Act of 1973, as amended. No part of the Property contains “wetlands” as that term is defined in 33 C.F.R. §328.3(b)(1989), flood plains or floodways.

 

(i)     Hazardous Substances. To the best of Seller’s knowledge, there are no Hazardous Substances located on the Property, and the Property is in compliance with all applicable Environmental Laws and there are no orders, judgments, claims, suits, actions or proceedings concerning or affecting the Property with respect to any Environmental Law. Seller has not received any notice of any threatened or pending suit, action or proceeding concerning the Property relating to any Environmental Law. To the best of Seller’s knowledge, there are no underground storage tanks located at the Property. As used in this Agreement, “Hazardous Substance” will mean and include all hazardous or toxic substances, wastes or materials, any pollutants or contaminants (including, without limitation, asbestos, petroleum products, and materials which include hazardous constituents) or any similar substances or materials which are included under or regulated by any Environmental Law. “Environmental Law” will mean and include all local, state or federal laws, rules, orders and regulations pertaining to environmental regulation or the use, processing, storage, disposal, generation or transportation of Hazardous Substances or any

 

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contamination, clean up or disclosure related thereto. Environmental Laws include, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Super Fund Amendments and Reauthorization Act of 1986, the Resource, Conservation and Recovery Act, the Hazardous and Solid Waste Amendments of 1984, the Toxic Substance Control Act, the Federal Insecticide, Fungicide and Rodenticide Act, the Federal Water Pollution Control Act, the Federal Safe Drinking Water Act, the Federal Clean Air Act, the Federal Clean Water Act, the National Environmental Protection Act, as any of the foregoing has heretofore been or is hereafter amended, and any regulations promulgated with respect to any of such statutes.

 

(j)     References to the “knowledge”, “best knowledge” and/or “actual knowledge” of Seller or words of similar import will refer only to the current actual (as opposed to implied) or constructive knowledge of Joseph Talarico, Seller’s president. Notwithstanding anything to the contrary contained in this Agreement, Joseph Talarico will have no personal liability hereunder. The provisions of this Section 5.1 will survive the Closing for a period of one (1) year.

 

5.2     Representations, Warranties and Covenants of Purchaser. Purchaser represents and warrants to Seller as follows:

 

(a)     This Agreement and all agreements, instruments and documents provided to be executed or caused to be executed by Purchaser are, or on the Closing Date will be, duly authorized, executed and delivered by and are binding upon Purchaser. Purchaser is a corporation, duly organized and validly existing and in good standing under the laws of the State of Florida, qualified to do business in the Commonwealth of Pennsylvania, and is duly authorized and qualified to do all things required of it under this Agreement.

 

(b)     No bankruptcy, insolvency, reorganization, arrangement or moratorium proceeding or allegation of fraudulent conveyance is now pending or threatened against Purchaser.

 

(c)     Execution by Purchaser of this Agreement and all documents provided for to be executed by Purchaser, and performance by Purchaser of the provisions hereof and thereof, will not violate or result in any breach of, or constitute a default under, any law, regulation, order or judgment of any governmental authority to which Purchaser is subject, or any agreement, indenture, mortgage, deed of trust, bank loan, credit agreement or any other instrument to which Purchaser is a party or by which Purchaser is bound, where such breach or default might adversely affect Purchaser's ability to perform its obligations hereunder or under such other documents. Purchaser is not in default under any note, evidence of indebtedness, lease, contract, license, undertaking or other agreement where the liability thereunder might adversely affect Purchaser's ability to perform its obligations under this Agreement or such other documents.

 

(d)     The provisions of this Section 5.2 will survive the Closing for a period of one (1) year.

 

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ARTICLE 6

ONGOING OPERATIONS AND RISK OF LOSS

 

6.1     Ongoing Operations.   During the period from the date of this Agreement to the Closing Date, Seller will not enter into any contracts, lease or other agreements affecting the use or occupancy of the Property, which contracts, leases or other agreements cannot be terminated on or before the Closing Date, without the prior written consent of Purchaser.

 

6.2     Casualty and Condemnation.   

(a)     If, at any time between the date of acceptance hereof and the Closing, all or any portion of the Property is Materially Damaged (defined below) by casualty or condemned by any legally constituted authority for any public use or purpose, then Purchaser may elect either: (i) to terminate this Agreement, in which event the Deposit will promptly be refunded to Purchaser, and thereupon neither Purchaser nor Seller will have any further liabilities, obligations or rights with regard to this Agreement except for matters that by the express terms hereof survive termination; or (ii) proceed to close in accordance with the terms of this Agreement and to collect at Closing (or at Closing receive a credit against the Purchase Price for) all proceeds from any condemnation or from any insurance policies insuring the Property from damage or destruction and have the terms of this Agreement remain in full force and effect and binding on the parties (with Purchaser receiving a credit against the Purchase Price for any deductibles and the amount of any uninsured casualty). In the event of a condemnation in which Purchaser does not elect to terminate this Agreement pursuant to the foregoing terms, then the term Property, as used herein, will thereafter refer to the Property less and except any portion thereof taken by such condemnation. “Materially Damaged” means, with respect to any Improvements, damage that: (a) in Purchaser’s reasonable estimation, exceeds $200,000 to repair; (b) in Purchaser’s reasonable estimation, will take longer than sixty (60) days to repair; or (c) is not insured.

 

(b)     In addition (and without limiting subparagraph (a) above), Purchaser will have no obligation to purchase the Property if any casualty, such as (without limitation) earthquake, sinkhole, contamination by hazardous substances or act of God, affects or threatens to affect the Property so as to make the ownership of operation of the Property more expensive, and upon any such occurrence, Purchaser may terminate this Agreement by notice to Seller given at any time prior to Closing, whereupon the Deposit will be immediately refunded to Purchaser, and thereupon the parties will be relieved of any and all further right, duty, liability or obligation under or with respect to this Agreement, except for matters that by the express terms of this Agreement will survive termination.

 

 

ARTICLE 7

PURCHASER’S CONDITIONS TO CLOSING

 

7.1     Conditions to Purchaser’s Obligation to Close.   Purchaser’s obligation to close on the purchase of the Property is conditioned on the following:

 

(a)     Seller will have performed all of the covenants and obligations to be performed by Seller under this Agreement at or before the Closing, and the representations and warranties of

 

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Seller set forth in this Agreement will be true in all material respects on and as of the Closing Date; and

 

(b)     There will have been no material adverse change from the Effective Date in the condition of the Property, other than as a result of a casualty or condemnation which will be governed by Section 6.2 hereof.

 

If one or more of the conditions set forth above in this Section 7.1 has not been satisfied as of the Closing Date, then Purchaser may, in its sole discretion, terminate this Agreement by delivering written notice of such termination to Seller at any time on or before the Closing Date, in which case, the Deposit will be immediately returned to Purchaser and neither party will have any further rights or obligations hereunder, except that if the failure to satisfy any such condition is due to a breach or default by Seller of any of its covenants, agreements, representations, warranties or other obligations hereunder, then the provisions of Section 9.2 will apply.

 

7.2     Waiver of Conditions. At any time or times, Purchaser may elect to waive in writing the benefit of any of the conditions set forth in Section 7.1. Purchaser will not be deemed to have waived any such condition, unless such waiver is set forth in a written document signed by Purchaser or its agent, and then only to the extent expressly set forth in such writing. If Purchaser waives any such condition, such waiver will not relieve Seller from, or modify or affect, Seller’s other covenants and obligations under this Agreement, and such covenants and obligations will survive such waiver and the Closing.

 

ARTICLE 8

THE CLOSING

 

8.1     Definition; Time and Place. The performance by Seller and Purchaser of their respective obligations under this Agreement directly or through the completion of the escrow deposits required of them to be made and the delivery of the Purchase Price to Seller by the Closing Escrowee (as defined below), will constitute the closing of the sale (the “Closing”). The date of the Closing (the “Closing Date”) will be the later of (i) September 30, 2019, or (ii) thirty (30) days after expiration of the General Review Period. The Closing will take place at the Title Insurer’s office closest to the Property, at a time as Seller and Purchaser will mutually agree. The Title Insurer will act as the closing escrowee (the “Closing Escrowee”).

 

8.2     Possession.   Possession of the Property will be delivered at the Closing subject to the terms of the Leases.

 

8.3     Escrow. This sale will be closed through a “New York style” escrow (the “Closing Escrow”) with the Closing Escrowee, in accordance with the general provisions of the usual form of escrow agreement then in use by the Closing Escrowee, with such special provisions inserted in the escrow agreement as may be required to conform with this Agreement (the “Escrow Agreement”). The Closing Escrow and the Escrow Agreement will be auxiliary to this Agreement, and this Agreement will not be merged into or in any manner superseded by the Closing Escrow or the Escrow Agreement. Upon the creation of the Closing Escrow, payment of the Purchase Price and delivery of the Deed and other closing documents will be made through the Closing Escrow and the Earnest Money will be deposited in the Closing Escrow. The attorneys for the

 

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parties are hereby authorized to execute the Escrow Agreement and any amendments thereto. Each party will have the right to inspect all documents prior to or at the time of deposit in the Closing Escrow. The escrow fee for the Closing Escrow will be shared equally by the parties.

 

8.4     Documents To Be Delivered By Seller At Closing. At the Closing, Seller will deliver or cause to be delivered to Purchaser directly or, if either party elects, through the Closing Escrow, the following, each of which will be in form reasonably satisfactory to Purchaser and (if applicable) the Title Insurer:

 

(a)      Such evidence that may be reasonably required by Purchaser or the Escrow Agent to evidence the status and capacity of Seller and the authority of the persons who are executing the various documents on behalf of the Seller;     

 

(b)      Special warranty deed (the “Deed”), duly executed and acknowledged by Seller, granting, conveying and warranting to Purchaser or Purchaser’s Assignee (as defined in Section 10.3), good and indefeasible fee simple absolute title to the Property subject only to the Permitted Exceptions;

 

(c)      Bill of sale (the “Bill of Sale”) executed by Seller, conveying to Purchaser good and marketable title to the Personal Property as described in the Bill of Sale, free and clear of all encumbrances and adverse claims;(d)      The Title Policy (as ordered by Purchaser and cleared by Seller per the provisions above);

 

(d)      An affidavit in compliance with Section 1445 of the Code and applicable regulations stating, under penalty of perjury, Seller's United States taxpayer identification number and that Seller is not a “foreign person” as that term is defined in said Section 1445;

 

(e)      An ALTA Statement and a gap undertaking as may be reasonably required by the Title Insurer in order to issue the Title Policy in the form required pursuant to Section 4.3 hereof;

 

(f)      If required by the Title Company to issue extended coverage title insurance (but not otherwise), all utility letters;

 

(g)      An assignment of the Leases and the forklift equipment leases (described in Exhibit B) in form reasonably acceptable to Purchaser;

 

(h)     Tenant estoppel certificates (5) in form reasonably acceptable to Purchaser;

 

(i)      Any other instruments, documents, affidavits and certificates as Purchaser or the Title Company may reasonably request in order to conform to the provisions of this Agreement, in such form as will be reasonably satisfactory to Title Company, and as may be reasonable and customary for transactions of this type.

 

8.5     Documents To Be Delivered By Purchaser At Closing. At the Closing, Purchaser will deliver or cause to be delivered to Seller directly, or if either party elects through the Closing Escrow, the following, each of which will be in form reasonably satisfactory to Seller and (if applicable) the Title Insurer:

 

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(a)     The Purchase Price, plus or minus adjustments, credits and prorations as provided for herein; and

 

(b)     All other documents required to be executed and/or delivered by Purchaser pursuant to other provisions of this Agreement or the Escrow Agreement.

 

8.6     Documents to be Jointly Delivered by Seller and Purchaser at Closing. At the Closing, Seller and Purchaser will each execute and deliver, directly, or if either party elects, through the Closing Escrow, the following, each of which will be in form reasonably satisfactory to both parties and (if applicable) the Title Insurer:

 

(a)     Applicable transfer tax declarations for the Commonwealth of Pennsylvania, Lucerne County, and any necessary municipal transfer tax declarations; and

 

(b)     A Closing or disbursement statement prepared by the Title Insurer.

 

ARTICLE 9

DEFAULTS; REMEDIES

 

9.1     Purchaser’s Default.   If Purchaser is in default under this Agreement and such default is not cured within five (5) Business Days after written notice of such default is given by Seller to Purchaser, then Seller may, as its sole and exclusive remedy, terminate this Agreement, in which case, the Deposit will be delivered to Seller as liquidated damages and as Seller’s sole and exclusive remedy. The parties acknowledge that Seller’s actual damages in the event of a default by Purchaser under this Agreement will be difficult to ascertain, and that Seller’s receipt of the Deposit as liquidated damages represents the parties’ best estimate of such damages. The parties agree that the foregoing provisions of this Section 9.1 are reasonable in light of the intent and circumstances surrounding the execution of this Agreement, and Seller expressly acknowledges and agrees that its rights and remedies will be limited as set forth above in this Section 9.1. However, notwithstanding anything contained in this Section 9.1 to the contrary, in the event of any breach or default by Purchaser of a post-Closing covenant or obligation or a covenant or obligation that expressly survives the Closing, Seller will also be entitled to any and all rights and remedies available at law or in equity.

 

9.2     Seller’s Default.   If Seller is in default under this Agreement and such default is not cured within five (5) Business Days after written notice of such default is given by Purchaser to Seller, then Purchaser may, at its option, pursue the following: (i) terminate this Agreement, the Deposit will be paid to Purchaser and Seller will pay Purchaser liquidated damages in the amount equal to the Deposit; or (ii) enforce specific performance of Seller's obligations hereunder, including specifically the conveyance of the Property in the condition required hereby, or (iii) if Seller’s default is due to Seller’s sale of the Property to a third party, then Purchaser may elect to pursue any and all damages provided by law or in equity. In addition, in the event of any breach or default by Seller of a post-Closing covenant or obligation or a covenant or obligation that expressly survives the Closing, Purchaser will be entitled to any and all rights and remedies available at law or in equity.

 

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9.3     Costs of Enforcement. In the event any action or proceeding is brought by either party to enforce the terms of this Agreement, each party will pay its own costs, fees (including, without limitation, attorneys’ fees) and expenses.

 

ARTICLE 10

MISCELLANEOUS

 

10.1     Notices.   All notices, requests or other communications which may be or are required to be given, served or sent by either party hereto to the other will be given in writing and will be deemed received upon acceptance or rejection of delivery if delivered (a) in person or email transmission, with receipt thereof confirmed by printed email acknowledgment, (b) by overnight delivery with any reputable overnight courier service, or (c) by deposit in any post office or mail depository regularly maintained by the United States Postal Office and sent by registered or certified mail, postage paid, return receipt requested, and, in each case, addressed as follows:

 

If to Seller:

East Coast Logistics & Distribution, Inc.

728 Moosic Road

Old Forge, PA 18518

Attention: Joseph Talarico

Phone: 570-237-5078

Email: joseph.c.talarico@dupontmotorlines.com

 

with a copy to:

Robert T. Kelly, Jr.

Myers, Brier & Kelly, LLP

425 Spruce Street, Suite 200

Scranton, Pennsylvania 18503

Phone: 570-342-6100

Email: rkelly@mbklaw.com 

 

If to Purchaser:

Innovative Food Holdings, Inc.

28411 Race Track Road

Bonita Springs, Florida 34135

Attention: Justin Wiernasz

Phone: 239-449-3239

E-mail: Jwiernasz@ivfh.com

 

with a copy to:

W. Roger Carlson, Esq.

Nisen & Elliott, LLC

200 West Adams Street, Suite 2500

Chicago, Illinois 60606

Phone: 312-346-7800

Email: Rcarlson@nisen.com

 

or to such other address as either party may from time to time specify as its address for the receipt of notices hereunder, in a notice to the other party.

 

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10.2    Entire Agreement. This Agreement embodies the entire understanding of the parties and there are no further or other agreements or understandings, written or oral, in effect between the parties relating to the subject matter hereof, except as may be set forth in a written instrument executed by all parties contemporaneously with or subsequent to this Agreement. This Agreement will not be construed more strictly against one party hereto than against the other party merely by virtue of the fact that it may have been prepared primarily by counsel for one of the parties. It is understood and recognized that both parties have contributed substantially and materially to the preparation of this Agreement.

 

10.3     Successors and Assigns; Assignment. This Agreement will be binding upon and will inure to the benefit of the parties hereto and their respective successors and permitted assigns.

 

10.4     Severability. If any term or provision of this Agreement or any application thereof will be invalid or unenforceable, the remainder of this Agreement and other applications thereof will not be affected thereby.

 

10.5     Captions; Number. The captions contained in this Agreement are for the convenience of reference only, and will not affect the meaning, interpretation or construction of this Agreement. As used in this Agreement, the singular form will include the plural and the plural will include the singular, to the extent that the context renders it appropriate.

 

10.6     Counterparts. This Agreement may be executed in two or more counterparts (including by means of facsimile, pdf or other electronic means), each of which will be deemed to be an original and all of which together will be deemed to be one and the same instrument.

 

10.7     Governing Law; Venue. This Agreement has been executed and delivered, and is to be performed, in the Commonwealth of Pennsylvania, and this Agreement and all rights, obligations and liabilities hereunder will be governed by, and construed in accordance with, the internal laws of the Commonwealth of Pennsylvania. Each party hereby irrevocably waives any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement brought in any federal or state court sitting in Luzerne County, Pennsylvania.

 

10.8     Time of the Essence. Time is of the essence of this Agreement.

 

10.9     Modification. The provisions of this Agreement may not be amended, changed or modified orally, but only by an agreement in writing signed by all of the parties hereto.

 

10.10    Waiver. Except as otherwise expressly provided in this Agreement, no waiver by a party of any breach of this Agreement or of any warranty or representation hereunder by the other party will be deemed to be a waiver of any other breach by such other party (whether preceding or succeeding and whether or not of the same or similar nature) and no acceptance of payment or performance by a party after any breach by the other party will be deemed to be a waiver of any breach of this Agreement or of any representation or warranty hereunder by such other party whether or not the first party knows of such breach at the time it accepts such payment or performance. Except as otherwise expressly provided in this Agreement, no failure or delay by a party to exercise any right it may have by reason of the default of the other party will operate as

 

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a waiver of default or modification of this Agreement or will prevent the exercise of any right by the first party while the other party continues to be so in default.

 

10.11     Business Days. If any date specified in this Agreement for the Closing Date or for commencement or expiration of time periods for termination or approvals or for notice occurs on a day other than a Business Day, then any such date will be postponed to the next following Business Day. As used herein, “Business Day” will mean any day other than a Saturday, Sunday or a holiday observed by national banks or the Title Insurer.

 

10.12     Payment of Real Estate Brokers and Consultants. Seller and Purchaser represent that the only broker involved in this transaction is Lewith & Freeman Real Estate, Inc. (the "Broker"). Seller will pay all applicable brokerage fees and commissions per the terms of a separate agreement. Each party will indemnify and hold harmless the other party for the indemnifying party’s dealings or other circumstances which give rise to additional brokerage commissions or claims from third parties other than the Broker. These indemnities will survive the Closing or the termination of this Agreement.

 

 

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

 

	 	
			SELLER:

			EAST COAST LOGISTICS & DISTRIBUTION, INC.

			 

			By:                                                                                                   

			 

			
	 	
			PURCHASER:

			INNOVATIVE FOOD HOLDINGS, INC.

			 

			By:                                                                                                  

			 

			

 

 

 

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