Document:

ex_331040.htm

Exhibit 10.34

  

 

CONTRACT FOR DEED

 

Date: July 1, 2018

 

This Contract for Deed (the “Contract”) is entered into effective as of the above date (the “Effective Date”) by Knochenmus Enterprises, LLP, a limited liability partnership under the laws of Minnesota (“Seller”), and The Tru Shrimp Company, a Delaware corporation (“Purchaser”).

 

Seller and Purchaser agree to the following terms:

 

	
			1.

				
			PROPERTY DESCRIPTION. Seller agrees to sell, and Purchaser agrees to buy, the real property and improvements, excluding the greenhouse and propane tank, located in Lyon County, Minnesota, legally described on the attached Exhibit A together with all hereditaments and appurtenances belonging thereto (the “Property”) pursuant to that certain Purchase Agreement between Seller and Purchaser dated July I, 2018 (the “Purchase Agreement”). Unless otherwise specified, Seller hereby delivers possession of the Property to Purchaser on the date hereof

			

 

Seller check applicable box:

 

	 	
			☐

				
			The Seller certifies that the seller does not know of any wells on the described real property.

			

 

	 	
			☐

				
			A well disclosure certificate accompanies this document.

			

 

	 	
			☒

				
			I am familiar with the property described in this instrument and I certify that the status and number of wells on the described real property have not changed since the last previously filed well disclosure certificate.

			

 

	
			2.

				
			TITLE. Seller warrants that title to the Property is, on the date of this Contract (the “Contract Date”), subject only to the following “Permitted Exceptions:”

			

 

	 	
			(a)

				
			That certain mortgage executed by Seller in favor of Currie State Bank dated February 28, 2011 and recorded March 2, 2011 as Document Number 189908, as amended (the “Currie State Bank Mortgage”);

			

 

 

 

 

 

	 	
			(b)

				
			That certain mortgage executed by Seller in favor of Prairieland Economic Development Corporation (“PEDC”) dated November 14, 2011 and recorded November 18, 2011 as document Number 192879 (the “Prairieland Mortgage”; collectively, the Currie State Bank Mortgage and the Prairieland Mortgage are referred to herein as the “Mortgages”);

			

 

	 	
			(c)

				
			Reservations of minerals or mineral rights by the State of Minnesota, if any;

			

 

	 	
			(d)

				
			Utility, sewer and drainage easements which do not interfere with present improvements;

			

 

	 	
			(e)

				
			Applicable laws, ordinances and regulations;

			

 

	 	
			(f)

				
			The lien of real estate taxes and installments of special assessments which are payable by Purchaser pursuant to paragraph 6 of this Contract;

			

 

	 	
			(g)

				
			Matters disclosed on an accurate survey of the Property.

			

 

	
			3.

				
			DELIVERY OF DEED AND EVIDENCE OF TITLE. Upon Purchaser’s prompt and full performance of this Contract, Seller shall execute, acknowledge and deliver to Purchaser a Limited Warranty Deed, in recordable form, conveying marketable title to the Properly to Purchaser, subject only to the following exceptions:

			

 

	 	
			(a)

				
			The Permitted. Exceptions (as defined in the attached Exhibit B) and

			

 

	 	
			(b)

				
			Liens, encumbrances, adverse claims or other matters which Purchaser has created, suffered or permitted to accrue after the date of this Contract.

			

 

Notwithstanding anything to the contrary in this Contract, Seller will cause the Mortgages to be paid in full or otherwise released as encumbrances against the Property before Seller’s delivery of a Limited Warranty Deed to Purchaser. Purchaser is not assuming Seller’s obligations under the Mortgages. Seller represents to Purchaser that there is no default under the Mortgages as of the Effective Date, and the execution and performance of this Contract will not violate any of the terms of the Mortgages. Seller will indemnify, defend and hold Purchaser harmless against title matters that are recorded against the Property between the date of the Seller’s title policy with an effective date of (November 5, 2010) and the Effective Date that are caused by Seller.

 

	
			4.

				
			PURCHASE PRICE. Purchaser shall pay to Seller the sum of One Million Three Hundred Thousand and No/I 00 Dollars ($1,300,000.00) as the purchase price (the “Purchase Price”) as follows:

			

 

	 	
			(a)

				
			Zero and No/100 Dollars ($0.00) as earnest money to be transferred by the Title Company in accordance with the Purchase Agreement.

			

 

	 	
			(b)

				
			Two Hundred Thousand and No/I 00 Dollars ($200,000.00) by certified check or wire transfer on the Contract Date.

			

 

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			(c)

				
			Interest shall accrue on the outstanding principal balance of the Purchase Price at a rate of six and three fourths percent (6.75%) per annum. Purchaser shall pay equal monthly installments of principal along with accrued interest commencing on the first (11’) day of the month following the date of this Contract and continuing for a period of fifteen (15) years.

			

 

	
			5.

				
			PREPAYMENT. Purchaser shall have the right to fully or partially prepay this Contract at any time without penalty. Any partial prepayment shall be applied first to payment of amounts then due under this Contract, including unpaid accrued interest, and the balance shall be applied to the principal installments to be paid in the inverse order of their maturity. Partial prepayment shall not postpone the due date of the installments to be paid pursuant to this Contract. Upon any partial prepayment the monthly installment payable pursuant to Paragraph 4 above shall be recalculated.

			

 

	
			6.

				
			REAL ESTATE TAXES AND ASSESSMENTS. Real estate taxes and installments of special assessments which are due and payable in 2018 shall prorated as of the Contract Date with Seller paying the portion of such taxes allocated to the period preceding the Contract Date and Purchaser paying the portion of such taxes allocated to the period commencing on the Contract Date through the remainder of 2018.

			

 

Purchaser shall pay, before penalty accrues, all real estate taxes and installments of special assessments assessed against the Property which are due and payable in all subsequent years. Seller warrants that the real estate taxes and installments of special assessments which were due and payable in the years preceding the year in which this Contract is dated are paid in full. If the Property is subject to a recorded declaration providing for assessments to be levied against the Property by any owners’ association, Purchaser shall promptly pay, when due, all assessments imposed by the owners’ association or other governing body as required by the provisions of the declaration or other related documents.

 

	
			7.

				
			PROPERTY INSURANCE.

			

 

	 	
			(a)

				
			INSURED RISKS AND AMOUNTS. Purchaser shall keep all buildings, improvements and fixtures now or later located on or a part of the Property insured against loss by fire, lightning and other such perils as are included in a standard “all-risk” endorsement, and against loss or damage by all other risks and hazards covered by a standard extended coverage insurance policy, including, without limitation, vandalism, malicious mischief, burglary, theft and, if applicable, steam boiler explosion. Such insurance shall be in an amount no less than the full replacement cost of the buildings, improvements and fixtures, without deduction for physical depreciation. If any of the buildings, improvements or fixtures are located in a federally designated flood prone area, and if flood insurance is available for that area, Purchaser shall procure and maintain flood insurance in amounts reasonably satisfactory to Seller.

			

 

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			(b)

				
			OTHER TERMS. The insurance policy shall contain a loss payable clause in favor of Seller and PEDC which provides that Seller’s right to recover under the insurance shall not be impaired by any acts or omissions of Purchaser or Seller, and that Seller and PEDC shall otherwise be afforded all rights and privileges customarily provided a mortgagee under the so-called standard mortgage clause.

			

 

	 	
			(c)

				
			NOTICE OF DAMAGE. In the event of damage to the Property by fire or other casualty, Purchaser shall promptly give notice of such damage to Seller and the insurance company.

			

 

	
			8.

				
			DAMAGE TO THE PROPERTY.

			

 

	 	
			(a)

				
			APPLICATION OF INSURANCE PROCEEDS. If the Property is damaged by fire or other casualty, the insurance proceeds paid on account of such damage shall be applied to payment of the amounts payable by Purchaser under this Contract, even if such amounts are not then due to be paid, unless Purchaser makes a permitted election described in the next paragraph. Such amounts shall be first applied to unpaid accrued interest and next to the installments to be paid as provided in this Contract in the inverse order of their maturity. Such payment shall not postpone the due date of the installments to be paid pursuant to this Contract or change the amount of such installments. The balance of insurance proceeds, if any, shall be the property of Purchaser.

			

 

	 	
			(b)

				
			PURCHASER’S ELECTION TO REBUILD If Purchaser is not in default under this Contract beyond any applicable cure period, or after curing any such default, Purchaser may elect to have that portion of such insurance proceeds necessary to repair, replace or restore the damaged Property (the “Repairs”) deposited in escrow with a bank or title insurance company qualified to do business in the State of Minnesota, or such other party as may be mutually agreeable to Seller and Purchaser. The election may only be made by written notice to Seller within sixty (60) days after the damage occurs. If such a permitted election is made by Purchaser, Seller and Purchaser shall jointly deposit, when paid, such insurance proceeds into such escrow. If such insurance proceeds are insufficient for the Repairs, Purchaser shall, before the commencement of the Repairs, deposit into such escrow sufficient additional money to insure the full payment for the Repairs. Even if the insurance proceeds are unavailable or are insufficient to pay the cost of the Repairs, Purchaser shall at all times be responsible to pay the full cost of the Repairs. All escrowed funds shall be disbursed by the escrowee in accordance with generally accepted sound construction disbursement procedures. The costs incurred or to be incurred on account of such escrow shall be deposited by Purchaser into such escrow before the commencement of the Repairs. Purchaser shall complete the Repairs as soon as reasonably possible and in a good and workmanlike manner. If, following the completion of and payment for the Repairs, there remain any undisbursed escrow funds, such funds shall be applied to payment of the amounts payable by Purchaser under this Contract in accordance with paragraph 8(a) above.

			

 

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			(c)

				
			OWNERS’ ASSOCIATION. If the Property is subject to a recorded declaration, so long as the owners’ association maintains a master or blanket policy of insurance against fire, extended coverage perils and such other hazards and in such amount as are required by this Contract, then: (i) Purchaser’s obligation in the Contract to maintain hazard insurance coverage on the Property is satisfied; (ii) the provisions of paragraph 8(a) of this Contract regarding application of insurance proceeds shall be superseded by the provisions of the declaration or other related documents; and (iii) in the event of a distribution of insurance proceeds in lieu of restoration or repair following an insured casualty loss to the Property, any such proceeds payable to Purchaser are hereby assigned and shall be paid to Seller for application to the sum secured by this Contract, with the excess, if any, paid to Purchaser.

			

 

	
			9.

				
			INJURY OR DAMAGE OCCURRING ON THE PROPERTY.

			

 

	 	
			(a)

				
			LIABILITY. Seller shall be free from liability and claims for damages by reason of injuries occurring on or after the date of this Contract to any person or persons or property while on or about the Property. Purchaser shall defend and indemnify Seller from all liability, loss, costs and obligations, including reasonable attorneys’ fees, on account of or arising out of any such injuries. However, Purchaser shall have no liability or obligation to Seller for such injuries which are caused by the negligence or intentional wrongful acts or omissions of Seller.

			

 

	 	
			(b)

				
			LIABILITY INSURANCE. Purchaser shall, at Purchaser’s own expense, procure and maintain liability insurance against claims for bodily injury, death and property damage occurring on or about the Property in amounts reasonably satisfactory to Seller and naming Seller as an additional insured.

			

 

	
			10.

				
			INSURANCE GENERALLY. The insurance which Purchaser is required to procure and maintain pursuant to paragraphs 7 and 9 of this Contract shall be issued by an insurance company or companies licensed to do business in the State of Minnesota. The insurance shall be maintained by Purchaser at all times while any amount remains unpaid under this Contract. The insurance policies shall provide for not less than ten days’ written notice to Seller and PEDC before cancellation, non-renewal, termination or change in coverage, and Purchaser shall deliver to Seller a duplicate original or certificate of such insurance policy or policies.

			

 

	
			11.

				
			CONDEMNATION. If all or any part of the Property is taken in condemnation proceedings instituted under power of eminent domain or is conveyed in lieu thereof under threat of condemnation, the money paid pursuant to such condemnation or conveyance in lieu thereof shall be applied to payment of the amounts payable by Purchaser under this Contract, even if such amounts are not then due to be paid. Such amounts shall be applied in the same manner as a prepayment, as provided in paragraph 5 of this Contract. Such payments shall not postpone the due date of the installments to be paid pursuant to this Contract or change the amount of such installments. The balance, if any, shall be the property of Purchaser.

			

 

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			12.

				
			WASTE, REPAIR AND LIENS. Purchaser shall not commit or allow waste of the Property. Purchaser shall maintain the Property in good condition and repair. Purchaser shall not create or permit to accrue liens or adverse claims against the Property which constitute a lien or claim against Seller’s interest in the Property. Purchaser shall pay to Seller all amounts, costs and expenses, including reasonable attorneys’ fees, incurred by Seller to remove any such liens or adverse claims.

			

 

	
			13.

				
			COMPLIANCE WITH LAWS. Except for matters which Seller has created, suffered or permitted to exist prior to the date of this Contract, Purchaser shall comply or cause compliance with all laws and regulations of any governmental authority which affect the Property or the manner of using or operating the same, and with all restrictive covenants, if any, affecting title to the Property or the use thereof.

			

 

	
			14.

				
			RECORDING OF CONTRACT; DEED TAX. Purchaser shall, at Purchaser’s expense, record this Contract in the office of the county recorder or registrar of titles in the county in which the Property is located within four (4) months after the execution of this Contract. Purchaser shall pay any penalty imposed under Minnesota Statutes Section 507.235 for failure to timely record the Contract. Seller shall, upon Purchaser’s MI performance of this Contract, pay the deed tax due upon the recording of the deed to be delivered by Seller.

			

 

	
			15.

				
			NOTICE OF ASSIGNMENT. A party may not assign its interest in the Property without the prior written consent of the other party (which consent shall not be unreasonably withheld); provided that either party may assign its interest in the Property to an affiliate without the other party’s consent and upon any such assignment the assigning party shall promptly furnish a copy of such assignment to the non-assigning party.

			

 

	
			16.

				
			PROTECTION OF INTERESTS. If Purchaser fails to pay any sum of money required under the terms of this Contract or fails to perform any of Purchaser’s obligations as set forth in this Contract and such failure is not cured within thirty (30) days of written notice from Seller to Purchaser (or, if an non-monetary obligation cannot be cured within thirty (30) days, Purchaser shall have such additional time as is reasonably required to cure so long as Purchaser commences its cure within the initial thirty (30) days and diligently pursues the cure to completion), Seller may, at Seller’s option, pay the same or cause the same to be performed, or both, and the amounts so paid by Seller and the cost of such performance shall be payable at once, with interest at the rate stated in paragraph 4 of this Contract, as an additional amount due Seller under this Contract. If there now exists, or if Seller hereafter creates, suffers or permits to accrue, any mortgage, contract for deed, lien or encumbrance against the Property which is not expressly assumed by Purchaser pursuant to this Contract, and provided Purchaser is not in default under this Contract, Seller shall timely pay all amounts due thereon, and if Seller fails to do so, Purchaser may, at Purchaser’s option, pay any such delinquent amounts or take any actions reasonably necessary to cure defaults thereunder and deduct the amounts so paid together with interest at the rate provided in this Contract from the payments next coming due under this Contract.

			

 

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			17.

				
			DEFAULTS AND REMEDIES. The time of performance by Purchaser of the terms of this Contract is an essential part of this Contract. If Purchaser fails to timely perform any term of this Contract and such failure is not cured within the time period stated in paragraph 16 above, Seller may, at Seller’s option, elect to declare this Contract cancelled and terminated by notice to Purchaser in accordance with applicable law or elect any other remedy available at law or in equity. If Seller elects to terminate this Contract, all right, tide, and interest acquired under this Contract by Purchaser shall then cease and terminate, and all improvements made to the Property and all payments made by Purchaser pursuant to this Contract (including escrow payments, if any) shall belong to Seller as liquidated damages for breach of this Contract. Neither the extension of the time for payment of any sum of money to be paid hereunder nor any waiver by Seller of Seller’s rights to declare this Contract forfeited by reason of any breach shall in any manner affect Seller’s right to cancel this Contract because of defaults subsequently occurring, and no extension of time shall be valid unless agreed to in writing. After service of notice of default and failure to cure such default within the period allowed by law, Purchaser shall, upon demand, surrender possession of the Property to Seller, but Purchaser shall be entitled to possession of the Property until the expiration of such period. Failure by Seller to exercise one or more remedies available under this paragraph 17 shall not constitute a waiver of the right to exercise such remedy or remedies thereafter.

			

 

	
			18.

				
			BINDING EFFECT. The terms of this Contract shall run with the land and bind the parties hereto and their successors in interest.

			

 

	
			19.

				
			HEADINGS. Headings of the paragraphs of this Contract are for convenience only and do not define, limit or construe the contents of such paragraphs.

			

 

	
			20.

				
			ADDITIONAL TERMS: Check here  ☒  if an Addendum to Contract for Deed containing additional terms and conditions is attached hereto.

			

 

[signatures on the following page]

 

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The parties have executed this Contract effective as of the Effective Date.

 

	SELLER: 	 	PURCHASER:	 
	 	 	 	 
	Knochenmus Enterprises, LLP	 	The Tru Shrimp Company	 
	 	 	 	 
	 	 	 	 
	/s/ Jon Knochenmus	 	/s/ Michael B. Ziebell   	 
	By:	Jon Knochenmus	 	By:	Michael B. Ziebell	 
	Its:	Partner	 	Its:	President & CEO	 

   

 

 

FAILURE TO RECORD OR FILE THIS CONTRACT FOR DEED MAY GIVE OTHER PARTIES PRIORITY OVER PURCHASER’S INTEREST IN THE PROPERTY

 

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CONTRACT FOR DEED ADDENDUM

 

THIS CONTRACT FOR DEED ADDENDUM (this “Addendum”) is attached to and made a part of that certain Contract for Deed dated July I, 2018 between Knochenmus Enterprises, LLP, a Minnesota limited liability partnership (“Seller”), and The Tru Shrimp Company, a Delaware corporation (“Purchaser”).

 

The terms and conditions contained in the Addendum shall supersede any conflicting provisions contained in this Contract. Unless defined in this Addendum, all capitalized terms have the same meaning as in the Contract. Only those provisions checked in the “Yes” column, below, shall be included and be part of this Addendum.

 

	
			Yes

				No	 
	☒	☐	
			A.         Late Payment Fee. If any payment is not received by Seller within ten (10) days of the date when due, Purchaser shall additionally pay to Seller, to the extent allowed by law, a late charge of five percent (5%) of the amount of the delinquent payment.

			
	 	 	 
	☒	☐	
			B.         Transfer Restrictions. Purchaser may not sell, assign, or otherwise transfer Purchaser’s interest in this Contract, or the Property, or any part thereof, or if Purchaser is an entity, the controlling interest in Purchaser may not be transferred without the written consent of Seller, which consent:

			
	 	 	 
	 	 	
			(check only one box) 

				
			☒  shall be granted or withheld in the sole discretion of Seller.

			 

			☐  shall not be unreasonably withheld, or delayed by Seller.

			
	 	 	 
	☐	☒	
			C.         Escrows. In Addition to the monthly payments of principal and interest, Purchaser shall deposit with Seller, with each payment, an amount representing one-twelfth (1/12) of the annual real estate taxes, installments of special assessments, and insurance premiums with respect to the Property (or such other amount as Seller is required to deposit under any underlying encumbrance on the Property). The amount of such taxes, special assessments, and insurance premiums, when unknown, shall be estimated by Seller. Such deposit shall be used by Seller to pay real estate taxes, installments of special assessments, and insurance premiums with respect to the Property when due. If Seller fails to do so, Purchaser may, at Purchaser’s option, pay any such delinquent amounts and deduct the amounts so paid from payments next coming due under this Contract. If the balance deposited with Seller is insufficient to pay such real estate taxes, special assessments and insurance premiums when due, Purchaser shall pay the deficiency to Seller upon written demand.

			

 

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	☒	☐	
			D.         Property Improvements. Except for work reasonably necessary to permit Purchaser to comply with Purchaser’s obligations under this Contract and the work described in the building plans described as ISO Project #17-20759 dated August 28, 2017, Purchaser shall not hire or perform any repairs or improvements to or replacements of the Property having an aggregate cost in excess of Two Hundred Fifty Thousand Dollars ($250,000) without securing the prior written consent of the Seller, which shall not be unreasonably withheld conditioned or delayed. Purchaser shall provide to Seller copies of all plans (including construction documents, interior finish selections, and an estimate of construction costs) for alterations prior to commencement of any work to be completed while the Contract for Deed is outstanding prior of delivery of the deed. In the event the Seller consents to making of any alterations, additions or improvements to the Property by Purchaser, the same shall be made by Purchaser with cost and expense to be agreed upon in writing between Purchaser and Seller in advance. Seller shall have the right to approve the contractor to perform the alterations. A fully executed construction contract must be submitted to Seller before any work can commence in the Property, and Seller may condition its approval upon review and approval of the construction contract (including approval of the costs of such alterations). Seller may also require Purchaser to provide to Seller, at Purchaser’s sole cost and expense, a lien and completion bond or other security acceptable to Seller in an amount equal to one and one-half (11/4) times any and all estimated cost of improvements, additions, or alterations in the Property, to insure Seller against any liability for mechanics’ and materialmen’s liens and to insure completion of the work. Purchaser shall keep the Property and the property in which the Property are situated free from any liens arising out of any work performed, materials furnished, or obligations incurred by Purchaser. Upon completion of the alterations, additions or improvements, at the request of Seller, Purchaser shall provide Seller with as-built drawings.

			 

			Purchaser will not cause or permit any mechanic’s lien to be recorded against the Property. Purchaser agrees to defend, indemnify, and hold Seller harmless from any loss, damage, or expense incurred by Seller with respect to any party asserting a mechanics’ lien claim, it being understood and agreed that this undertaking will survive cancellation of the Contract for Deed or delivery of the quit claim deed pursuant to the terms hereof If any mechanic’s lien is filed, Purchaser shall within twenty-four (24) hours of receipt thereof, give notice to Seller of such lien and Purchaser shall within ten (10) days after receiving notice of the filing of the lien, discharge such lien, or provide Seller with a bond or other security acceptable to Seller in an amount equal to one hundred twenty-five percent (125%) of the lien. Failure of Purchaser to discharge the lien or provide acceptable security therefore will constitute an immediate Default under the Contract for Deed and in addition to any other right or remedy of Seller, Seller may, but is not obligated to, discharge the same of record by paying the amount claimed to be due, and the amount so paid by Seller and all costs and expenses Purchaser to Seller.

			

 

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	☒	☐	
			E.         Hazardous Substances. Purchaser shall not bring, store, generate, or treat hazardous wastes or substances or petroleum products upon the Property, except for small quantities which are stored and used in compliance with applicable law. Purchaser hereby agrees to indemnify, defend and hold Seller harmless from any and all claims, demands, actions, causes of action, liabilities or rights which may be asserted against Seller with respect to such substances, or products, it being understood and agreed that this obligation will survive the cancellation of this Contract or the delivery of a deed pursuant to the terms hereof.

			
	 	 	 
	☐	☒	
			F.         Alternative Acceleration Remedy. If Purchaser fails to timely perform any term of this Contract, Seller may elect, on thirty (30) days written notice given to Purchaser, to declare the entire unpaid Purchase Price, together with accrued interest thereon, immediately due and payable in full and commence an action against Purchaser to collect all amounts due hereunder. Purchaser shall have the right to reinstate this Contract at any time before entry of final judgment against Purchaser for amounts due hereunder if Purchaser: (i) pays Seller all sums due hereunder as of the date of reinstatement; (ii) cures any other defaults existing under this Contract as of the date of reinstatement; and (iii) pays all expenses incurred by Seller in enforcing this Contract, including, but not limited to, reasonable attorneys’ fees and costs. Seller shall deliver the deed for the Property in the manner required by paragraph 3 of this Contract when all amounts due hereunder have been paid.

			
	 	 	 
	☒	☐	
			G.         Nonrecourse Obligation. Notwithstanding any other provision contained in this Contract to the contrary, if Purchaser defaults in Purchaser’s performance of this Contract, Seller’s sole remedy shall be to cancel this Contract in accordance with Minn. Stat. 559.21, as the same may from time to time be amended. Seller specifically waives any right it may have to commence an action for the specific performance of this Contract or any right it may have to seek an award of damages against Purchaser.

			
	 	 	 
	☒	☐	
			H.         Additional Provisions.

			 

			AS-IS Sale; Waiver of Disclosures. As a material inducement for Seller to enter into this Contract, Purchaser agrees that the Property is being sold in its as-is condition, with all faults, except as expressly provided herein. Purchaser and Seller agree to waive the written disclosures required under Minnesota Statutes, Section 513.52 through 513.61. Purchaser acknowledges and agrees that Seller makes no representations or warranties, express or implied, as to the condition of the Property, except as expressly provided herein. Purchaser agrees that in contracting to purchase the Property, Purchaser has not relied upon any representation made by the Seller or any parent, subsidiary, agent, or affiliate, or any of their partners, officers, agents, or representatives. Other than Seller’s breach of its obligations under this Contract, Purchaser shall have no other claim or recourse against Seller for any act in connection with the sale of the Property contemplated under this Contract or for any liabilities relating to the Property.

			

 

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			Personal Property. For purposes of Article 9 of the Uniform Commercial Code, the Contract for Deed will constitute a security agreement and financing statement with Purchaser being the Debtor and Seller being the Secured Party. The Contract for Deed also constitutes a financing statement filed as a fixture filing pursuant to Article 9 of the Uniform Commercial Code. The Contract for Deed constitutes a security agreement with respect to, and purchaser hereby grants to seller, a continuing security interest in all personal property and fixtures included within or upon the property including (a) any of the Property which, under applicable law, is not real property or effectively made part of the real property by the provisions of the Contract for Deed; and (b) any and all other property now or hereafter described on any Uniform Commercial Code Financing Statement naming Purchaser as Debtor and Seller as Secured Party and affecting property in any way connected with the use and enjoyment of the Property (any and all such other property constituting “Property” for purposes of the Contract for Deed); Purchaser authorizes Seller to file a financing statement covering such personal property and fixtures and to take such other steps as are reasonably necessary to perfect seller’s security interest, if this contract is canceled by seller, all right, title and interest in said personal property and fixtures will belong to seller without further action and purchaser shall have no interest herein. Upon receipt of all amounts owing pursuant to this contract, seller will execute and deliver to Purchaser a bill of sale covering said items.

			 

			Assignment of Rents. As additional security for the Contract for Deed, Purchaser hereby assigns to Seller all leases, rents and profits of the Property which before or after notice of cancellation is given or suit commences or during the period of cancellation or suit shall accrue and be owing for the use and occupancy of the Property or any part thereof Purchaser shall be entitled to collect and retain all such rents unless and until a default shall occur under the terms of the Contract for Deed. Upon such default, Seller will be entitled to give notice to the tenants, authorizing and directing the tenant to pay all rents directly to Seller, to collect all rents, to enforce payment thereof, to exercise all of the rights of the Purchaser under the tenants’ lease, to take possession of and manage the property, to cancel, modify and enforce the lease, to fix and modify rents and to take all other action Seller deems necessary to protect the security of its interest. Seller shall be entitled to engage in any of the foregoing immediately following a default under the terms of this Contract for Deed, with or without court order or appointment of a receiver, and regardless of the condition of the property, the solvency or the purchaser or the adequacy of the property to secure the amount owing to seller. Any amount received by Seller as a result of the foregoing shall not be deemed to be waiver of any of Seller’s right with respect to a statutory cancellation of the Contract for Deed, provided, however that any amounts so received shall be a credit by seller against amounts owing from Purchaser to cure the default.

			

 

[signatures on the following page]

 

12

 

 

The parties have executed this Contract Addendum effective as of the Effective Date.

 

	SELLER: 	 	PURCHASER:	 
	 	 	 	 
	Knochenmus Enterprises, LLP	 	The Tru Shrimp Company	 
	 	 	 	 
	 	 	 	 
	/s/ Jon Knochenmus	 	/s/ Michael B. Ziebell   	 
	By:	Jon Knochenmus	 	By:	Michael B. Ziebell	 
	Its:	Partner	 	Its:	President & CEO	 

 

 

 

FAILURE TO RECORD OR FILE THIS CONTRACT FOR DEED MAY GIVE OTHER PARTIES PRIORITY OVER PURCHASER’S INTEREST IN THE PROPERTY

 

13

 

 

EXHIBIT A

 

LEGAL DESCRIPTION

 

The real property located in Lyon County, Minnesota, described as follows:

 

All that part of the West Half (W 1/2) of Section Twenty-Three (23) in Township One Hundred Nine (109) North, Range Forty-two (42) West of the Fifth Principal Meridian, bounded as follows, to wit: On the northeasterly side by the southwesterly line of Summit Avenue Northwest of said town, on the northwesterly side by the southeasterly line of Second Street of said town produced or extended southwesterly to the West line or bounds of said section; on the west side by said west line or bounds of said section, and on the southerly side by the northwesterly line of Third Street of said town produced or continued southwesterly to the west line or bounds of said section, as said streets are laid down and described on the plat of said town as recorded in the registrar’s office in and for said county.

 

14

 

 

EXHIBIT B

 

PERMITTED ENCUMBRANCES

 

[insert]

 

15ex_331041.htm

Exhibit 10.35

 

INTELLECTUAL PROPERTY NONEXCLUSIVE LICENSE AGREEMENT

 

THIS AGREEMENT is made as of 15 September 2017 by and between Ralco Nutrition Inc., a Minnesota Corporation, with offices at 1600 Hahn Road, Marshall, MN 56258 (LICENSOR), and The tru Shrimp Company, a Delaware corporation (“tru Shrimp”) (LICENSEE) (collectively the “PARTIES”).

 

W I T N E S S E T H:

 

WHEREAS, LICENSOR is the sole and exclusive owner of intellectual property, including United States Letters Patents and patent applications, international patents and patent applications, trademarks, know-how, and confidential information, identified more fully in the attached Schedule A (collectively, the “Licensor IP”); and

 

WHEREAS, LICENSEE desires to acquire a nonexclusive and nontransferable license under the Licensor IP for use in the development and sale of products related to aquaculture and which utilize Licensor IP (the “Licensed Products”);

 

WHEREAS, LICENSOR has the power and authority to grant to LICENSEE such license.

 

NOW, THEREFORE, in consideration of the mutual promises and covenants herein contained, the parties hereto agree as follows:

 

1.            LICENSE

 

A.    LICENSOR here by grants to LICENSEE, upon and subject to all the terms and conditions of this Agreement, a nonexclusive license, except as to LICENSOR, under the Licensor IP to make, use, and sell worldwide the materials, systems, and methods embodying the invention(s) described in the Licensor IP as set forth in the attached Schedule A.

 

B.    As used in the Agreement, the Licensor IP shall mean and include the intellectual property identified more fully in the attached Schedule A, along with any intellectual property on improvements thereof. In addition, the Licensor IP shall mean and include the following:

 

1.    Any divisional, continuation, or substitute U.S. patent application that shall be based on the Licensor IP;

 

2.    Any patents that shall issue on any of the above-described patent applications or on any improvements thereof, and any reissues and extensions thereof; and

 

3.    Patents and patent applications corresponding to each of the above-described patents and patent applications that are issued, filed, or to be filed in any and all foreign countries; any patents (including but not limited to patents of importation, improvement, or addition, utility models, and inventors certificates) that shall subsequently issue thereof; and any renewals, divisions, reissues, continuations, or extensions thereof.

 

 

 

 

 

C.    The license granted herein is subject to a reserved, nonexclusive, non-assignable license in LICENSOR to make, use, and sell the materials, systems and methods embodying the invention(s) of the Patents.

 

D.    LICENSEE may not grant sublicenses under this agreement.

 

2.            TERM

 

A.    This Agreement shall be effective as of the date of execution by the Parties and shall expire 1 year therefrom, unless sooner terminated by the Parties pursuant to the terms of this Agreement (the Term). Each Term shall automatically renew for subsequent periods of the same length as the initial Term unless either party gives the other written notice of termination at least thirty (30) days prior to expiration of the then-current Term.

 

3.            COMPENSATION

 

A.    In consideration for the license granted hereunder, LICENSEE agrees to 1) pay to LICENSOR a per ton royalty recited in Schedule B (Consideration) based on LICENSEE’s tons of feed sold and/or shipped by LICENSEE, 2) issue LICENSOR common stock in LICENSEE (see Schedule B).

 

B.    Only one royalty shall be paid hereunder as to Licensed Product whether or not it is covered by more than one (1) claim of a patent, by the claims of more than one (1) patent, or by the claims of patents of more than one (1) country.

 

C.    The Royalty owed LICENSOR shall be calculated on a quarterly calendar basis (Royalty Period) and shall be payable no later than 15 days after the termination of the preceding quarterly period, i.e., commencing on the first sale of feed by LICENSEE AND on the first (1st) of each quarter thereafter, except that the first and last periods may be “short,” depending on the effective date of this Agreement.

 

D.    For each Royalty Period, LICENSEE shall provide LICENSOR with a written royalty statement in a form acceptable to LICENSOR. Such royalty statement shall be certified as accurate by a duly authorized officer of LICENSEE reciting, on a country-by-country basis, the stock number, item, units sold, description, quantity shipped, gross invoice, amount billed customers less discounts, allowances, returns, and reportable sales for each Licensed Product. Such statements shall be furnished to LICENSOR regardless of whether any Licensed Products were sold during the Royalty Period or whether any actual Royalty was owed.

 

E.    A Royalty obligation shall accrue upon the sale of the Licensed Products regardless of the time of collection by LICENSEE. A Licensed Product shall be considered “sold” when such Licensed Product is billed, invoiced, shipped, or paid for, whichever occurs first.

 

F.    The receipt or acceptance by LICENSOR of any royalty statement or payment shall not prevent LICENSOR from subsequently challenging the validity or accuracy of such statement or payment.

 

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G.    Upon expiration or termination of this Agreement, all Royalty obligations, including the Guaranteed Minimum Royalty, shall be accelerated and shall immediately become due and payable.

 

H.    All payments due LICENSOR shall be made in United States currency by check drawn on a U.S. bank, unless otherwise specified by LICENSOR.

 

I.    All payments due LICENSOR based on sales in countries outside the United States shall accrue in the currency of the country in which the sales are made. LICENSEE shall utilize its best efforts to effect U.S. dollar transfers with respect to such Royalties. However, any and all loss of exchange value, taxes, or other expenses incurred in the transfer or conversion of foreign currency into U.S. dollars, and any income, remittance, or other taxes on such Royalties required to be withheld at the source shall be the exclusive responsibility of LICENSOR.

 

J.    Late payments shall incur interest at the rate of Five Percent (5%) per month from the date such payments were originally due.

 

4.            RECORD INSPECTION AND AUDIT

 

A.    LICENSOR shall have the right, upon reasonable notice, to inspect LICENSEE’s books and records and all other documents and material in LICENSEE’s possession or control with respect to the subject matter of this Agreement. LICENSOR shall have free and full access thereto for such purposes and may make copies thereof. In no event shall LICENSOR have the right to examine information with respect to LICENSEE’s costs, pricing formulas, or percentages of markup.

 

B.    All books and records relative to LICENSEE’s obligations hereunder shall be maintained and made accessible to LICENSOR for inspection at a location in the United States for at least 1 year after termination of this Agreement.

 

5.            INTELLECTUAL PROPERTY PROTECTION

 

A.    In the event that LICENSEE wishes that a corresponding patent application of any other country, territory, or possession be filed, it shall notify LICENSOR of that wish, and LICENSOR shall thereupon promptly notify LICENSEE whether it will file such other patent application. Failing such agreement, LICENSOR shall at LICENSEE’s notification, permit LICENSEE to file such patent application and prosecute it to issuance or final rejection at its own expense. Such patent application, any patent issuing thereon, and any renewals and extensions thereof shall be added to the aforesaid LICENSOR IP, and LICENSOR shall have the title thereto.

 

6.            WARRANTIES AND OBLIGATIONS

 

A.    LICENSOR represents and warrants that, to the best of its knowledge and belief, it is the owner of the entire right, title, and interest in and to the Licensor IP; that it has the right and power to grant the licenses granted herein; that there are no other agreements with any other party in conflict with such grant; and that it knows of no prior art that would invalidate the Patents.

 

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B.    LICENSOR further represents and warrants that, to the best of its knowledge and belief, LICENSEE’s contemplated use of the Licensor IP as represented to LICENSOR does not infringe any valid rights of any third party, and that there are no actions for infringement against LICENSOR with respect to items it manufactures and sells embodying the invention of the Patents anywhere in the world.

 

C.    LICENSEE shall be solely responsible for the manufacture, production, sale, and distribution of the Licensed Products and will bear all costs associated therewith.

 

D.    In the event that LICENSOR shall develop any improvement to the materials, systems or methods claimed in the Licensor IP, and later incorporated in an improved or modified product by LICENSEE, such improved product shall be subject to the payment of a Royalty. All improvements made by the LICENSEE shall be promptly disclosed to LICENSOR and shall hereinafter become the property of LICENSOR. LICENSEE hereby agrees to execute any and all documents necessary to perfect LICENSOR’s rights in such improvements.

 

7.            MARKING AND SAMPLES

 

A.    LICENSEE shall fully comply with the patent marking provisions of the intellectual property laws of the applicable countries in the Licensed Territory.

 

8.            TERMINATION

 

The following termination rights are in addition to the termination rights that may be provided elsewhere in the Agreement

 

A.    Immediate Right of Termination. LICENSOR shall have the right to immediately terminate this Agreement by giving written notice to LICENSEE in the event that LICENSEE does any of the following:

 

1.    Files a petition in bankruptcy or is adjudicated as bankrupt or insolvent, or makes an assignment for the benefit of creditors or an arrangement pursuant to any bankruptcy law, or if the LICENSEE discontinues or dissolves its business or if a receiver is appointed for LICENSEE or for LICENSEE’s business and such receiver is not discharged within 90 days;

 

B.    Right to Terminate Upon Notice. Either party may terminate this Agreement upon 90 days’ written notice to the other party in the event of a breach of any provision of this Agreement by the other party, provided that, during the 90-day period, the breaching party fails to cure such breach.

 

9.            POST-TERMINATION RIGHTS

 

Upon expiration or termination of this Agreement, LICENSEE shall thereafter immediately, except for reason of termination because of expiration or a declaration of patent invalidity, cease all further use of the Licensor IP and all rights granted to LICENSEE under this Agreement shall forthwith terminate and immediately revert to LICENSOR.

 

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10.          INFRINGEMENTS

 

A.    LICENSOR shall have the sole and exclusive right, in its discretion, to institute and prosecute lawsuits against third persons for infringement of the rights licensed in this Agreement. All sums recovered in any such lawsuits, whether by judgment, settlement or otherwise, in excess of the amount of reasonable attorneys’ fees and other out of pocket expenses of such suit, shall be retained solely by LICENSOR.

 

B.    LICENSEE agrees to fully cooperate with LICENSOR in the prosecution of any such suit against a third party and shall execute all papers, testify on all matters, and otherwise cooperate in every way necessary and desirable for the prosecution of any such lawsuit. The LICENSOR shall reimburse the LICENSEE for any expenses incurred as a result of such cooperation.

 

11.           INDEMNITY

 

A.    LICENSEE agrees to defend, indemnify and hold LICENSOR and its officers, directors, agents, and employees, harmless against all costs, expenses, and losses (including reasonable attorney fees and costs) incurred through claims of third parties against LICENSOR based on the manufacture or sale of the Licensed Products including, but not limited to, actions founded on product liability.

 

B.    LICENSOR agrees to defend, indemnify and hold LICENSEE and its officers, directors, agents, employees, and customers, harmless against all costs, expenses, and losses (including reasonable attorney fees and costs) incurred through claims of third parties against LICENSEE based on a breach by LICENSOR of any representation and warranty made in this Agreement, including but not limited to claims by a third party of infringement based on the manufacture, use, or sale of items embodying the invention of the Patents.

 

12.          EXPORT CONTROL

 

Anything contained in this Agreement to the contrary notwithstanding, the obligations of the parties hereto and of the Subsidiaries of the parties shall be subject to all laws, present and future and including export control laws and regulations, of any government having jurisdiction over the parties hereto or the Subsidiaries of the parties, and to orders, regulations, directions, or requests of any such government. Each party shall undertake to comply with and be solely responsible for complying with such laws applicable to such party.

 

13.          TAXES AND GOVERNMENTAL APPROVALS

 

A.    LICENSEE shall be solely responsible for the payment of any and all taxes, fees, duties and other payments incurred in relation to the manufacture, use and sale of the systems and methods of the Licensor IP or Licensed Products.

 

B.    LICENSEE shall be solely responsible for applying for and obtaining any approvals, authorizations, or validations necessary to effectuate the terms of this Agreement under the laws of the appropriate national laws of each of the countries in the Licensed Territory.

 

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14.          NOTICE AND PAYMENT

 

A.    Any notice required to be given under this Agreement shall be in writing and delivered personally to the other designated party at the above stated address or mailed by certified, registered or Express mail, return receipt requested or by Federal Express.

 

B.    Either party may change the address to which notice or payment is to be sent by written notice to the other under any provision of this paragraph.

 

15.          JURISDICTION/DISPUTES

 

This Agreement shall be governed in accordance with the laws of the State of Minnesota. All disputes under this Agreement shall be resolved by litigation in the courts of the State of Minnesota including the federal com1s therein and the Parties all consent to the jurisdiction of such courts, agree to accept service of process by mail, and hereby waive any jurisdictional or venue defenses otherwise available to it.

 

16.          AGREEMENT BINDING ON SUCCESSORS

 

The provisions of the Agreement shall be binding upon and shall inure to the benefit of the Parties hereto, their heirs, administrators, successors and assigns.

 

17.          ASSIGNABILITY

 

Neither party may assign this Agreement or the rights and obligations thereunder to any third party without the prior express written approval of the other party which shall not be unreasonably withheld.

 

18.          WAIVER

 

No waiver by either party of any default shall be deemed as a waiver of prior or subsequent default of the same of other provisions of this Agreement.

 

19.          SEVERABILITY

 

If any term, clause or provision hereof is held invalid or unenforceable by a court of competent jurisdiction, such invalidity shall not affect the validity or operation of any other term, clause or provision and such invalid term, clause or provision shall be deemed to be severed from the Agreement.

 

20.          INTEGRATION

 

This Agreement constitutes the entire understanding of the Parties, and revokes and supersedes all prior agreements between the Parties and is intended as a final expression of their Agreement. It shall not be modified or amended except in writing signed by the Parties hereto and specifically referring to this Agreement. This Agreement shall take precedence over any other documents which may conflict with this Agreement.

 

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IN WITNESS WHEREOF, the Parties hereto, intending to be legally bound hereby, have each caused to be affixed hereto its or his/her hand and seal the day indicated.

 

	The trú Shrimp Company 	Ralco Nutrition, Inc.
	 	 
	 	 
	 	 
	
			/s/ Michael B. Ziebell                           

			By:    Michael B. Ziebell

			Title: President & Chief Executive Officer

			Date: 20 December 2017   

				
			/s/ Brian Knochenmus                           

			By:   Brian Knochenmus

			Title: President & Chief Executive Officer

			Date: 12-20-2017

			

              

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Schedule A

 

Licensor IP (Intellectual Property):

 

LICENSOR is the sole and exclusive owner of intellectual property, including United States Letters Patents and patent applications, international patents and patent applications, trademarks, know-how, and confidential information, at least, but not limited to, the following:

 

1)           All intellectual property related to MICROBRIAL CATALYST®, technology

 

a)         U.S. Trademark Registration 4,813,985 MICROBRIAL CATALYST®, including goodwill associated with the mark. Ralco requires quarterly updates on the usage of the mark for quality control purposes. Any foreign use of the mark and foreign registrations are similarly included.

 

b)         U.S. Patent 8,575,212 entitled ORGANICALLY CHELATED MINERAL COMPOSITIONS AND METHODS THEREOF, and all related US applications, foreign applications and foreign patents.

 

2)           All intellectual property related to MICROFUSED® Essential Oil technology

 

a)         U.S. Trademark Registration 5,197,395 MICROFUSED®, including goodwill associated with the mark. Ralco requires quarterly updates on the usage of the mark for quality control purposes. Any foreign use of the mark and foreign registrations are similarly included.

 

b)         U.S. Patent Application Serial No. 15/327,112 entitled ANTIVIRAL COMPOSITIONS AND METHODS, and all related US applications, foreign applications and foreign patents.

 

c)         U.S. Patent Application Serial No. 62/163,625 entitled ESSENTIAL OIL COMPOSITIONS AND APPLICATIONS UTILIZING ESSENTIAL OILS, and all related US applications, foreign applications and foreign patents.

 

3)           All intellectual property related to ENMAX FEED PHILOSOPHY

 

 

 

 

Schedule B

 

	 	
			●

				
			Royalty per ton of feed to-be-determined at a date later when formulations and process is complete.

			

 

	 	
			●

				
			1,000,000 Common Shares of The tru Shrimp Company upon execution of this agreement.

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