Document:

Exhibit 10.5

 

 

DAVID J. VAN HAVERMAAT (Cal. Bar No. 175761) 

Email: vanhavermaatd@sec.gov

JENNIFER T. CALABRESE (Cal. Bar No. 247976)

Email: calabresej@sec.gov

 

Attorneys for Plaintiff

Securities and Exchange Commission

Michele Wein Layne, Regional Director

Alka Patel, Associate Regional Director

Amy J. Longo, Regional Trial Counsel

444 South Flower Street, 9th Floor

Los Angeles, California 90071

Telephone: (323) 965-3998

Facsimile: (213) 443-1904

 

UNITED STATES DISTRICT COURT

 

DISTRICT OF NEVADA

 

 

 

	SECURITIES AND EXCHANGE COMMISSION,

 

Plaintiff,

 

vs.

 

CANNAVEST CORP. a/k/a/ CV SCIENCES, INC. and MICHAEL J. MONA,
JR.,

 

Defendants.

	
	Case No. CV-17-01681-APG-PAL

 

CONSENT OF DEFENDANT

CANNAVEST CORP. TO ENTRY OF FINAL JUDGMENT

 

 

 

    	 	1	 

     

    

 

1.          Defendant CannaVEST
Corp. (“Defendant”) acknowledges having been served with the complaint in this action, enters a general appearance,
and admits the Court’s jurisdiction over Defendant and over the subject matter of this action.

 

2.          Without admitting or
denying the allegations of the complaint (except as provided herein in paragraph 11 and except as to personal and subject matter
jurisdiction, which Defendant admits) , Defendant hereby consents to the entry of the final Judgment in the form attached hereto
(the “Final Judgment”) and incorporated by reference herein, which, among other things:

 

		(a)	permanently restrains and enjoins Defendant from violation of Sections 10(b), 13(a), 13(b)(2)(A),
and 13(b)(2)(B) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rules 10b-5, 12b-20, and 13a-13 thereunder;
and

		(b)	orders Defendant to pay a civil penalty in the amount of $150,000 pursuant to Section 21(d)(3)
of the Exchange Act, payable in 12 monthly installments to begin within 30 days after entry of the Final Judgment and to conclude
within 360 days after entry of the Final Judgment.

 

3.          Defendant agrees that
it shall not seek or accept, directly or indirectly, reimbursement or indemnification from any source, including but not limited to payment made pursuant to any insurance policy, with
regard to any civil penalty amounts that Defendant pays pursuant to the Final Judgment, regardless of whether such penalty amounts
or any part thereof are added to a distribution fund or otherwise used for the benefit of investors. Defendant further agrees that
it shall not claim, assert, or apply for a tax deduction or tax credit with regard to any federal, state, or local tax for any
penalty amounts that Defendant pays pursuant to the Final Judgment, regardless of whether such penalty amounts or any part thereof
are added to a distribution fund or otherwise used for the benefit of investors.

 

4.          Defendant waives the
entry of findings of fact and conclusions of law pursuant to Rule 52 of the Federal Rules of Civil Procedure.

 

5.          Defendant
waives the right, if any, to a jury trial and to appeal from the entry of the Final Judgment.

 

6.         Defendant enters into this Consent voluntarily and represents that no threats, offers, promises, or inducements of any kind
have been made by the Securities and Exchange Commission (“SEC”) or any member, officer, employee, agent, or representative
of the SEC to induce Defendant to enter into this Consent.

7.         Defendant agrees that this Consent shall be incorporated into the Final Judgment with the same force and effect as if fully
set forth therein.

 

8.         Defendant
will not oppose the enforcement of the Final Judgment on the ground, if any exists, that it fails to comply with Rule 65(d) of
the Federal Rules of Civil Procedure, and hereby waives any objection based thereon.

 

9.          Defendant
waives service of the Final Judgment and agrees that entry of the Final Judgment by the Court and filing with the Clerk of the
Court will constitute notice to Defendant of its terms and conditions. Defendant further agrees to provide counsel for plaintiff
Securities and Exchange Commission (“SEC”), within thirty days after the Final Judgment is filed with the Clerk of
the Court, with an affidavit or declaration stating that Defendant has received and read a copy of the Final Judgment.

 

10.         Consistent
with 17 C.F.R. 202.5(f), this Consent resolves only the claims asserted against Defendant in this civil proceeding. Defendant
acknowledges that no promise or representation has been made by the SEC or any member, officer, employee, agent,
or representative of the SEC with regard to any criminal liability that may have arisen or may arise from the facts
underlying this action or immunity from any such criminal liability. Defendant waives any claim of Double Jeopardy based upon
the settlement of this proceeding, including the imposition of any remedy or civil penalty herein. Defendant further
acknowledges that the Court’s entry of a permanent injunction may have collateral consequences under federal or state
law and the rules and regulations of self-regulatory organizations, licensing boards, and other regulatory organizations.
Such collateral consequences include, but are not limited to, a statutory disqualification with respect to membership or
participation in, or association with a member of, a self-regulatory organization. This statutory disqualification has
consequences that are separate from any sanction imposed in an administrative proceeding. In addition, in any disciplinary
proceeding before the SEC based on the entry of the injunction in this action, Defendant understands that it shall not be
permitted to contest the factual allegations of the complaint in this action.

 

 

 

    	 	2	 

     

    

 

11.         Defendant
understands and agrees to comply with the terms of 17 C.F.R. § 202.5(e), which provides in part that it is the
SEC’s policy “not to permit a defendant or respondent to consent to a judgment or order that imposes a sanction
while denying the allegations in the complaint or order for proceedings,” and “a refusal to admit the allegations
is equivalent to a denial, unless the defendant or respondent states that he neither admits nor denies the
allegations.” As part of Defendant’s agreement to comply with the terms of Section 202.5(e), Defendant: (i) will
not take any action or make or permit to be made any public statement denying, directly or indirectly, any allegation in the
complaint or creating the impression that the complaint is without factual basis; (ii) will not make or permit to be made any
public statement to the effect that Defendant does not admit the allegations of the complaint, or that this Consent contains
no admission of the allegations, without also stating that Defendant does not deny the allegations; (iii) upon the filing of
this Consent, Defendant hereby withdraws any papers filed in this action to the extent that they deny any allegation in the
complaint; and (iv) stipulates solely for purposes of exceptions to discharge set forth in Section 523 of the Bankruptcy
Code, 11 U.S.C. §523, that the allegations in the complaint are true, and further, that any debt for disgorgement,
prejudgment interest, civil penalty or other amounts due by Defendant under the Final Judgment or any other judgment, order,
consent order, decree or settlement agreement entered in connection with this proceeding, is a debt for the violation by
Defendant of the federal securities laws or any regulation or order issued under such laws, as set forth in Section
523(a)(19) of the Bankruptcy Code, 11 U.S.C. §523(a)(19 ). If Defendant breaches this agreement, the SEC may
petition the Court to vacate the Final Judgment and restore this action to its active docket. Nothing in this paragraph
affects Defendant's: (i) testimonial obligations; or (ii) right to take legal or factual positions in litigation or other
legal proceedings in which the SEC is not a party.

 

12.      
 Defendant hereby waives any rights under the Equal Access to Justice Act, the Small Business Regulatory Enforcement Fairness
Act of 1996, or any other provision of law to seek from the United States, or any agency, or any official of the United States
acting in his or her official capacity, directly or indirectly, reimbursement of attorney's fees or other fees, expenses, or costs
expended by Defendant to defend against this action. For these purposes, Defendant agrees that Defendant is not the prevailing
party in this action since the parties have reached a good faith settlement.

 

13.         Defendant
agrees that the SEC may present the Final Judgment to the Court for signature and entry without further notice.

 

14.         Defendant
agrees that this Court shall retain jurisdiction over this matter for the purpose of enforcing the terms of the Final Judgment.

 

	Dated: 12/19/17	/s/ Michael J. Mona, Jr.
	 	CannaVEST Corp.
	 	By Michael J. Mona, Jr.
	 	 
	 	 

 

Approved as to form:

 

/s/ S Todd Neal

S. Todd Neal

Procopio, Cory, Hargreaves & Savitch LLP

525 B. Street, Suite 2200

San Diego, CA 92101

Attorney for Defendant CannaVEST Corp.

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	3Exhibit 10.6

 

DAVID J. VAN HAVERMAAT (Cal. Bar No. 175761) 

Email: vanhavermaatd@sec.gov

JENNIFER T. CALABRESE (Cal. Bar No. 247976)

Email: calabresej@sec.gov

 

Attorneys for Plaintiff

Securities and Exchange Commission

Michele Wein Layne, Regional Director

Alka Patel, Associate Regional Director

Amy J. Longo, Regional Trial Counsel

444 South Flower Street, 9th Floor

Los Angeles, California 90071

Telephone: (323) 965-3998

Facsimile: (213) 443-1904

 

UNITED STATES DISTRICT COURT

 

DISTRICT OF NEVADA

 

 

 

	SECURITIES AND EXCHANGE COMMISSION,

 

Plaintiff,

 

vs.

 

CANNAVEST CORP. a/k/a/ CV SCIENCES, INC. and MICHAEL J. MONA,
JR.,

 

Defendants.

	
	Case No. CV-17-01681-APG-PAL

 

CONSENT OF DEFENDANT

MICHAEL J. MONA, JR. TO ENTRY OF
FINAL JUDGMENT

 

 

 

 

 

    	 	1	 

     

    

 

1.           Defendant Michael J. Mona, Jr. (“Defendant”) acknowledges having been served with the complaint in this action,
enters a general appearance, and admits the Court’s jurisdiction over Defendant and over the subject matter of this action.

 

2.         Without
admitting or denying the allegations of the complaint (except as provided herein in paragraph 11 and except as to personal and
subject matter jurisdiction, which Defendant admits) , Defendant hereby consents to the entry of the final Judgment in the form
attached hereto (the “Final Judgment”) and incorporated by reference herein, which, among other things:

 

		(a)	permanently restrains and enjoins Defendant from violation of Sections 10(b) and 13(b)(5) of
the Securities Exchange Act of 1934 (“Exchange Act”) and Rules 10b-5, 13a-14, 13b2-1, and 13b2-2 thereunder, and Section
304(a) of the Sarbanes-Oxley Act of 2002;

		(b)	permanently restrains and enjoins Defendant from controlling any person who violates Sections
13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules 12b-20 and 13a-13 thereunder;

		(c)	prohibits Defendant for a period of five years from entry of the Final Judgment from acting as
an officer or director of any issuer that has a class of securities registered pursuant to Section 12 of the Exchange Act or that
is required to file reports pursuant to Section 15(d) of the Exchange Act;

		(d)	orders Defendant to pay a civil penalty in the amount of $40,000 pursuant to Section 21(d)(3)
of the Exchange Act, payable in 12 monthly installments to begin within 30 days after entry of the Final Judgment and to conclude
within 360 days after entry of the Final Judgment; and

		(e)	orders Defendant to reimburse CannaVEST Corp. the amount of $10,000 pursuant to Section 304(a)
of the Sarbanes-Oxley Act of 2002, payable in 12 monthly installments to begin within 30 days after entry of the Final Judgment
and to conclude within 360 days after entry of the Final Judgment.

 

3.         Defendant agrees that he shall not seek or accept, directly or indirectly, reimbursement or indemnification from any source,
including but not limited to payment made pursuant to any insurance policy, with regard to any civil penalty amounts that Defendant
pays pursuant to the Final Judgment, regardless of whether such penalty amounts or any part thereof are added to a distribution
fund or otherwise used for the benefit of investors. Defendant further agrees that he shall not claim, assert, or apply for a tax
deduction or tax credit with regard to any federal, state, or local tax for any penalty amounts that Defendant pays pursuant to
the Final Judgment, regardless of whether such penalty amounts or any part thereof are added to a distribution fund or otherwise
used for the benefit of investors.

 

4.           Defendant waives the entry of findings of fact and conclusions of law pursuant to Rule 52 of the Federal Rules of Civil
Procedure.

 

5.         Defendant
waives the right, if any, to a jury trial and to appeal from the entry of the Final Judgment.

 

6.          Defendant enters into this Consent voluntarily and represents that no threats, offers, promises, or inducements of any kind
have been made by the Securities and Exchange Commission (“SEC”) or any member, officer, employee, agent, or representative
of the SEC to induce Defendant to enter into this Consent.

 

7.          Defendant agrees that this Consent shall be incorporated into the Final Judgment with the same force and effect as if fully
set forth therein.

 

8.          Defendant will not oppose the enforcement of the Final Judgment on the ground, if any exists, that it fails to comply with
Rule 65(d) of the Federal Rules of Civil Procedure, and hereby waives any objection based thereon.

 

9.         Defendant waives service of the Final Judgment and agrees that entry of the Final Judgment by the Court and filing with
the Clerk of the Court will constitute notice to Defendant of its terms and conditions. Defendant further agrees to provide counsel
for the SEC within thirty days after the Final Judgment is filed with the Clerk of the Court, with an affidavit or declaration
stating that Defendant has received and read a copy of the Final Judgment.

 

10.          Consistent with 17 C.F.R. 202.5(f), this Consent resolves only the claims asserted against Defendant in this civil proceeding.
Defendant acknowledges that no promise or representation has been made by the SEC or any member, officer, employee, agent, or representative
of the SEC with regard to any criminal liability that may have arisen or may arise from the facts underlying this action or immunity
from any such criminal liability. Defendant waives any claim of Double Jeopardy based upon the settlement of this proceeding, including
the imposition of any remedy or civil penalty herein. Defendant further acknowledges that the Court’s entry of a permanent
injunction may have collateral consequences under federal or state law and the rules and regulations of self-regulatory organizations,
licensing boards, and other regulatory organizations. Such collateral consequences include, but are not limited to, a statutory
disqualification with respect to membership or participation in, or association with a member of, a self-regulatory organization.
This statutory disqualification has consequences that are separate from any sanction imposed in an administrative proceeding. In
addition, in any disciplinary proceeding before the SEC based on the entry of the injunction in this action, Defendant understands
that he shall not be permitted to contest the factual allegations of the complaint in this action.

 

 

 

    	 	2	 

     

    

 

11.         Defendant
understands and agrees to comply with the terms of 17 C.F.R. § 202.5(e), which provides in part that it is the
SEC’s policy “not to permit a defendant or respondent to consent to a judgment or order that imposes a
sanction while denying the allegations in the complaint or order for proceedings,” and “a refusal to admit the
allegations is equivalent to a denial, unless the defendant or respondent states that he neither admits nor denies the
allegations.” As part of Defendant’s agreement to comply with the terms of Section 202.5(e), Defendant: (i) will
not take any action or make or permit to be made any public statement denying, directly or indirectly, any allegation in the
complaint or creating the impression that the complaint is without factual basis; (ii) will not make or permit to be made any
public statement to the effect that Defendant does not admit the allegations of the complaint, or that this Consent contains
no admission of the allegations, without also stating that Defendant does not deny the allegations; (iii) upon the filing of
this Consent, Defendant hereby withdraws any papers filed in this action to the extent that they deny any allegation in the
complaint; and (iv) stipulates solely for purposes of exceptions to discharge set forth in Section 523 of the Bankruptcy
Code, 11 U.S.C. §523, that the allegations in the complaint are true, and further, that any debt for disgorgement,
prejudgment interest, civil penalty or other amounts due by Defendant under the Final Judgment or any other judgment, order,
consent order, decree or settlement agreement entered in connection with this proceeding, is a debt for the violation by
Defendant of the federal securities laws or any regulation or order issued under such laws, as set forth in Section
523(a)(19) of the Bankruptcy Code, 11 U.S.C. §523(a)(19 ). If Defendant breaches this agreement, the SEC may petition
the Court to vacate the Final Judgment and restore this action to its active docket. Nothing in this paragraph affects
Defendant’s: (i) testimonial obligations; or (ii) right to take legal or factual positions in litigation or other legal
proceedings in which the SEC is not a party.

 

12.         Defendant hereby waives any rights under the Equal Access to Justice Act, the Small Business Regulatory Enforcement Fairness
Act of 1996, or any other provision of law to seek from the United States, or any agency, or any official of the United States
acting in his or her official capacity, directly or indirectly, reimbursement of attorney’s fees or other fees, expenses,
or costs expended by Defendant to defend against this action. For these purposes, Defendant agrees that Defendant is not the prevailing
party in this action since the parties have reached a good faith settlement.

 

13.         Defendant agrees that the SEC may present the Final Judgment to the Court for signature and entry without further notice.

 

14.        Defendant
agrees that this Court shall retain jurisdiction over this matter for the purpose of enforcing the terms of the Final Judgment.

 

 

	Dated: 12/19/17	/s/ Michael J. Mona, Jr.
	 	By Michael J. Mona, Jr.
	 	 
	 	 
	 	 

 

Approved as to form:

 

/s/ S Todd Neal

S. Todd Neal

Procopio, Cory, Hargreaves & Savitch LLP

525 B. Street, Suite 2200

San Diego, CA 92101

Attorney for Defendant CannaVEST Corp.

 

 

 

 

 

    	 	3

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