UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10


GENERAL FORM FOR REGISTRATION OF SECURITIES

Pursuant to Section 12(b) or (g) of The Securities Exchange Act of 1934


Jetblack Corp

(Exact name of registrant as specified in its charter)


Nevada

81-5151781

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer Identification No.)


4949 SW Macadam Ave 2nd Floor #84 Portland, OR 97239

(Address of principal executive offices) (Zip Code)


Registrant’s telephone number, including area code.

(888) 611-5825

 

 

Securities to be registered pursuant to Section 12(b) of the Act:

 

 

 

Securities to be registered pursuant to Section 12(g) of the Act:

Common Stock  $0.001 Par value

 

(Title of class)


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer

[  ]

 

Accelerated filer

[  ]

Non-accelerated filer

[  ]

 

Smaller reporting company

[X]

 

 

 

Emerging growth company

[  ]


If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.












EXPLANATORY NOTE


Jetblack Corp. is filing this General Form for Registration of Securities on Form 10, which we refer to as the Registration Statement, to register its common stock, par value $0.001 per share, pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Unless otherwise mentioned or unless the context requires otherwise, when used in this Registration Statement, the terms “Jetblack," "Company," "we," "us," and "our" refer to Jetblack Corp.


FORWARD-LOOKING STATEMENTS


This Registration Statement contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical fact, contained in this Registration Statement, including statements regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans and objectives of management, are forward-looking statements. The words "anticipate," "believe," "estimate," "expect," "intend," "may," "plan," "predict," "project," "target," "potential," "will," "would," "could," "should," "continue," and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.


We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have included important cautionary statements in this Registration Statement, particularly in the "Risk Factors" section, that we believe could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.


You should read this Registration Statement and the documents that we have filed as exhibits to this Registration Statement with the understanding that our actual future results may be materially different from what we expect. The forward-looking statements contained in this Registration Statement are made as of the date of this Registration Statement, and we do not assume any obligation to update any forward-looking statements except as required by applicable law.


WHERE YOU CAN FIND MORE INFORMATION ABOUT US


When this Registration Statement becomes effective, we will begin to file reports, proxy statements, information statements and other information with the United States Securities and Exchange Commission, or SEC. You may read and copy this information, for a copying fee, at the SEC's Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for more information on its Public Reference Room. Our SEC filings will also be available to the public from commercial document retrieval services, and at the website maintained by the SEC at http://www.sec.gov.


Our Internet website address is http://www.JetblackCorp.com. Information contained on the website does not constitute part of this Registration Statement. We have included our website address in this Registration Statement solely as a non-active reference. When this Registration Statement is effective, we will make available, through a link to the SEC's website, electronic copies of the materials we file with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, the Section 16 reports filed by our executive officers, directors and 10% stockholders and amendments to those reports.




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Item 1. Business


Overview


Jetblack Corp. (hereinafter the “Company”, “Our”, “We” or “Us”) is a small company with a focus on strategic acquisitions of companies and technologies, along with developing our own projects, in the areas of cannabis. Our subsidiaries offer cannabis opportunities in cultivation, processing and consulting services. We have acquired agreements to transfer ownership of licenses for cultivation and processing of marijuana in Oregon. We are networking and seeking to partner with key company management to acquire more licenses, to grow successful companies for acquisition, investment, partnerships for future growth of Jetblack Corp.


Jetblack Corp is also examining opportunities outside of cannabis. Such as Urban Farming and the Pet Industry. The company will continually assess new opportunities to increase shareholder value. We will seek to invest, develop, and acquire assets to increase shareholder value.


Background


The name of the issuer is Jetblack Corp. We were incorporated as Tortuga Mexican Imports Inc. on April 17, 2002 in the State of Nevada for the purpose of selling consumer products. Effective March 15, 2010, we changed our name to Jetblack Corp., by way of a merger with our wholly owned subsidiary, Jetblack Corp., which was formed solely for the purpose of effectuating the corporate reorganization and pursing new business in subsequent years.


On February 26, 2016 Barton Hollow, LLC, a stockholder of the Issuer, filed an Application for Appointment of Custodian pursuant to Section 78.347 of the Act in the District Court for Clark County, Nevada. Barton Hollow was subsequently appointed custodian of the Issuer by Order of the Court on April 5, 2016 (the “Order”). In accordance with the provisions of the Order, Barton Hollow thereafter moved to: (a) reinstate the Issuer with the State of Nevada; (b) provide for the election of interim officers and directors; and (c) call and hold a stockholder meeting.


Daniel A. Goldin was appointed CEO and Director on June 20, 2016. The former Custodian has since been discharged and full authority has been returned to the Board of Directors of Jetblack Corp. Mr. Goldin purchased the convertible note held by former custodian, making Mr. Goldin the holder of the only convertible note on the books of Jetblack Corp at this time. Under the leadership of Mr. Goldin, Jetblack has initiated the entry of Jetblack Corp into the new legal marijuana industry.


Our Company


We are seeking to acquire businesses, licenses, technologies, and execute on our own projects and brands through proprietary thought we call Jetblack iNSIGHT™, as well as achieve financing at reasonable terms.. We believe we can increase the quality of products and services across various markets, namely the cannabis sector. We currently have interests in the following subsidiaries:


1

CenAviv LLC - The company is in the process of transferring an Oregon marijuana tier 1 producer license from (Trailhead Farms LLC) and an Oregon marijuana processor license from (Landon’s Dream LLC) with OLCC. The company is requesting a change of ownership and locations for both licenses. The company leases an 8,400 square foot facility in Hillsboro, Oregon 97123. The facility will still need to be built out for processing and cultivation. Currently the company has not secured the funds for buildout but it is hopeful it will in the future. The company is pre-revenue. In addition the company has applications submitted for a marijuana wholesaler license in Oregon.


2

The Indica Company - A wholly-owned subsidiary. The company will focus on proprietary indica genetics in Oregon at the Hillsboro, Oregon location. The space is 8,400 square feet and will need to be adapted for cultivation.


3

Supreme Genetics LLC -  Soon to be dissolved. This Budz For You Farms LLC - Soon to be dissolved, Deal has been voided. Top Tier Science LLC - Soon to be dissolved.



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Since January 20, 2016, Daniel A. Goldin was appointed CEO and Director. The former Custodian has since been discharged and full authority has been returned to the Board of Directors of Jetblack Corp.


Mr. Goldin purchased the convertible note held by the former custodian, making Mr. Goldin the holder of the only convertible note on the books of Jetblack Corp at the time. As of recently, under the leadership of Mr. Goldin, Jetblack has initiated the entry of Jetblack Corp into the emerging markets of cannabis.


The company started with software development in the Cannabis space. Our first project was named MjXchange along with the addition of MjBids. The company built out a digital wholesale exchange, that had two main components. A backend exchange platform, which is an order matching engine and a front-end trading platform which the legal licensed operators would access to access the data available. Our first state where our software launched was Oregon, our second launch was California. We initially offered services at no cost and no obligation. Our contractors were based out of the Ukraine. Management felt they had the technical skills to execute the projects along with being reasonably priced. We found the services to be subpar and became difficult to execute a competitive product. Ultimately management could not find the capital needed to continue the project and didn’t see a favorable outcome with respect to seeing revenues in the near future.


The company had an additional product it began to focus on at the same time as the cannabis software. The project was name gabbb.com which was focused as a social network for the freelancing professional. Website offered options for freelancers to offer their services and products along with a payment system. The site also offered the standard social media services along with a scheduler. Ultimately management saw the same fate as the cannabis software. If the company did not receive funding, the ability to keep the project going would not be afforded to us. In 2018, the company decided to make a strategic shift, described below.


Around October of 2018 the Company was offered a tier 1 producer license in Oregon. The struggling operator “This Budz For You Farms LLC” asked our Chair and CEO for business development support. Mr. Goldin has extensive knowledge in the cannabis space, as well as experience being a consultant for Kaya Holdings in the past. Jetblack Corp decided to focus the company on transferring licenses and begin planting roots in the cannabis industry for future growth. This Budz For You Farms LLC was not able to successfully transfer their Tier 1 License to Jetblack or assignee, because the company lost control of their previous lease. Under OLCC rules, if a licensed operator loses control of their location, their license is in jeopardy. The company began searching for other entities for license transfer. The agreement with This Budz For You Farms has since been voided.


The company has diligently been networking with licensed marijuana businesses and operators along with financiers to fund its goals. Which is successfully transferring ownership of the producer and processor licenses and building out its Hillsboro location. The company has an agreement with Trailhead Farms LLC to transfer ownership and locations of their Oregon marijuana tier 1 producer license to Jetblack Corp’s wholly owned subsidiary CenAviv LLC. The company is transferring the license to its Hillsboro, Oregon location. The company has an agreement with Landon’s Dream LLC to transfer ownership and locations of their Oregon marijuana processors license to CenAviv LLC, to the Hillsboro, Oregon location. The Indica Company, an Oregon Corporation, will focus on proprietary indica strains.


Our Core Products


We intend for CenAviv TM to produce a proprietary high quality edible product for ingestion at our Hillsboro, Oregon location. Our markets will originally be Oregon with the hopes of expanding into California. We intend to make edibles solvent-less using no flammables, combustibles, or high pressure gas.


Our second focus is, The Indica Company, which will focus on a proprietary line of genetics. Cultivars solely indica strains. Cultivation will occur at our Hillsboro, Oregon location.


We currently have a trademark application submitted with USPTO for Budz TM . We plan on submitting future trademark applications.




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We own the following domains:


CenAviv.com

Jetblackcorp.com

Krinkov.org

Krinkov.com

îndica.com

TheIndicaCompany.com

TheIndicaCo.com

EndoCleanse.com

Aprictoindica.com

Appleindica.com

Blackberryindica.com

Blueberryindica.com

Citrusindica.com

Cranberryindica.com

Cherryindica.com

Mangoindica.com

Strawberryindica.com

Raspberryindica.com

Pineappleindica.com

Purpleindica.com

Cannabis.vc

Hemp.vc

MjXchange.com

MjBids.com


Intellectual Property


We generally rely upon copyright, trademark and trade secret laws to protect and maintain our proprietary rights for our technology and products.


We maintain a policy requiring our employees, consultants and other third parties to enter into confidentiality and proprietary rights agreements and to control access documentation and other proprietary information.


Notwithstanding the steps we have taken to protect our intellectual property rights, third parties may infringe or misappropriate our proprietary rights. Competitors may also independently develop technologies and methods that are substantially equivalent or superior to the technologies we employ in our products and services.


We currently have a trademark application submitted with USPTO for Budz™. We plan on submitting more trademark applications in the future.


Competition


The markets for our products are intensely competitive, continually evolving and subject to changing styles, fads, technologies, methodologies. In the future we will compete with large funds for licensing, locations, store space, wholesaler interest. Many of our competitors are substantially larger than us and have significantly greater name recognition, sales and marketing, financial, technical, sales, horticulture and urban farming. These competitors also may have more established distribution channels and stronger relationships with local municipalities and government entities. Our competitors have greater access to capital resources. These competitors may be able to respond more rapidly to new or emerging products and or services. Or to devote greater resources to the development, promotion and sale of their products. Devote much more resources R&D and IP protection, acquiring licenses and prime locations. Greater access to legal counsel, accounting and advisors.




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These competitors may enter our existing or future markets with products that may be less expensive, that may provide better quality and pricing. Key competitive factors in each of the markets in which we will compete, may compete in the future include: low cost of overhead,  new products, low pricing. We believe that our principal competitive advantages include:


·

Technical knowledge of the industry

·

Understanding the consumer

·

Excellent customer service

·

Proprietary Indica Strains

·

Processes to concentrate a marijuana edible

·

Business development and branding


We believe that we compete favorably with our competitors on the basis of these factors. However, if we are not able to compete successfully against our current and future competitors, it will be difficult to acquire and retain future customers or experienced employees, and we may experience continuation of not attaining revenues.


Government Regulation


Our cannabis business is subject to government regulation as the industry is as a whole. Currently, the suite of services and products will be offered through 2 states that have legalized cannabis. While the company believes the cannabis, industry is here to stay, it has developed technologies that could be rebranded and marketed to other industries should federal regulators change their current stance on the industry. Namely Urban Farming.


As of January 31, 2018, there are 30 states plus the District of Columbia that have laws and/or regulation that recognize in one form or another legitimate medical uses for cannabis and consumer use of cannabis in connection with medical treatment. Many other states are considering similar legislation. Conversely, the federal government regulates drugs through the Controlled Substances Act (“CSA”), which does not recognize the difference between medical and recreational use of cannabis. Under federal law, cannabis is treated like every other controlled substance, such as cocaine and heroin. The federal government places every controlled substance in a schedule, in principle according to its relative potential for abuse and medicinal value. Under the CSA, cannabis is classified as a Schedule I drug, which means that the federal government views medical cannabis as highly addictive and having no medical value. Pursuant to the CSA, it is unlawful for any person (1) to sell or offer for sale drug paraphernalia; (2) to use the mails or any other facility of interstate commerce to transport drug paraphernalia; or (3) to import or export drug paraphernalia.


The United States Congress previously used the rider provision in the fiscal years 2015, 2016, and 2017 known as the Consolidated Appropriations Acts (formerly the Rohrabacher-Farr Amendment) to thwart the federal government from using congressionally appropriated funds to prevent states from implementing their own laws that authorize the use, distribution, possession, or cultivation of medical marijuana.  The “Consolidated Appropriations Act, 2018” now known as the “Leahy Amendment,” is a $1.3 trillion-dollar spending bill, which will now allow continued protections for the implementation of state medical marijuana programs through fiscal year end, September 30, 2018.


The 2018 appropriations protection, continues this provision to 46 states, the District of Columbia, Guam, and Puerto Rico, with the exclusion of Idaho, Kansas, Nebraska, and South Dakota. The 2018 spending bill also continues existing provisions shielding state industrial hemp research programs from federal interference.










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FinCEN


The Financial Crimes Enforcement Network (“FinCEN”) provided guidance on February 14, 2014 about how financial institutions can provide services to cannabis-related businesses consistent with their Bank Secrecy Act ( BSA ) obligations. For purposes of the FinCEN guidelines, a financial institution includes any person doing business in one or more of the following capacities:


·

Bank

·

Broker Dealer Securities

·

Money Services Business

·

Telegraph

·

Casino

·

Charge Card


A person subject to supervision by any state or federal bank supervisory authority.


In assessing the risk of providing services to a cannabis-related business, a financial institution should conduct customer due diligence that includes: (i) verifying with the appropriate state authorities whether the business is duly licensed and registered; (ii) reviewing the license application (and related documentation) submitted by the business for obtaining a state license to operate its cannabis-related business; (iii) requesting from state licensing and enforcement authorities available information about the business and related parties; (iv) developing an understanding of the normal and expected activity for the business, including the types of products to be sold and the type of customers to be served (e.g., medical versus recreational customers); (v) ongoing monitoring of publicly available sources for adverse information about the business and related parties; (vi) ongoing monitoring for suspicious activity, including for any of the red flags described in this guidance; and (vii) refreshing information obtained as part of customer due diligence on a periodic basis and commensurate with the risk. With respect to information regarding state licensure obtained in connection with such customer due diligence, a financial institution may reasonably rely on the accuracy of information provided by state licensing authorities, where states make such information available.


As part of its customer due diligence, a financial institution should consider whether a cannabis-related business violates state law. This is a particularly important factor for a financial institution to consider when assessing the risk of providing financial services to a cannabis-related business. Considering this factor also enables the financial institution to provide information in BSA reports pertinent to law enforcement’s priorities. A financial institution that decides to provide financial services to a cannabis-related business would be required to file suspicious activity reports.


While we believe we do not qualify as a financial institution in the United States, we cannot be certain that we do not fall under the scope of the FinCEN guidelines. We plan to use the FinCEN Guidelines, as may be amended, as a basis for assessing our relationships with potential tenants, clients and customers. As such, as we engage in financing activities, we intend to adhere to the guidance of FinCEN in conducting and monitoring our financial transactions. Because this area of the law is uncertain but expected to evolve rapidly, we believe that FinCEN’s guidelines will help us best operate in a prudent, reasonable and acceptable manner. There is no assurance, however, that our activities will not violate some aspect of the CSA. If we are found to violate the federal statute or any other in connection with our activities, our company could face serious criminal and civil sanctions.


We intend to conduct rigorous due diligence to verify the legality of all activities that we engage in. We realize that there is a discrepancy between the laws in some states, which permit the distribution and sale of medical and recreational cannabis, from federal law that prohibits any such activities. The CSA makes it illegal under federal law to manufacture, distribute, or dispense cannabis. Many states impose and enforce similar prohibitions. Notwithstanding the federal ban, as of the date of this filing, twenty-six states and the District of Columbia have legalized certain cannabis-related activity.


Moreover, since the use of cannabis is illegal under federal law, we may have difficulty acquiring or maintaining bank accounts and insurance and our stockholders may find it difficult to deposit their stock with brokerage firms.




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MARKETING AND SALES


Marketing


Our marketing efforts (conducted by us in house, and by outside consultants DG Ventures, Inc.) currently focused on increasing awareness of our goals, intentions, future products and services. In addition, we may in the future generate awareness by participating in industry trade shows, issuing press releases through Jetblack Corp or our IR service provider DG Ventures, Inc., articulating our messaging through our website, and communications via Twitter. We conduct our marketing activities domestically to bring awareness. Future product and services information is available on our website, which will contain all relevant information once constructed. In addition, Twitter has been designated the companies main communication channel for company updates or material events.


Sales


We will market and distribute our products in the future, through a strategic partnership network of companies. In states where regulations allow vertical integration, the company may pursue retail operations.


We will need to hire a sales and support staff in various locations where products and services are located. Our in house sales group, our CEO and Administrative Assistant, are continually seeking out new partnerships and licenses. A partner is either one of our subsidiaries or one of the companies that we do business with.


RESEARCH AND DEVELOPMENT


The market for our products is characterized by rapidly changing technology, evolving industry compliance and regulations, and frequent product introductions in the marijuana industry. We believe that our future success depends in large part upon our ability to produce and also enhance cannabis products, services and cultivation techniques.


The majority of our knowledge in cannabis related services is in house. Our CEO and Chairman has extensive knowledge in the cannabis industry. The term in house represents that Jetblack will ultimately own any new technology or IP as its own. In the future we intend to use a small number of independent contractors to assist with certain product development and testing activities. We intend to continue to seek out strategic partners to enhance our products.


We intend in the future to focus on product innovation, quality improvement, product enhancement in marijuana cultivation techniques, products, and services. We are seeking growth opportunities through the acquisition of new licenses for cultivation, processing. As well as developing new cannabis farming techniques and services.


Employees


Currently Jetblack and its subsidiaries employ a total of 2 individuals. These individuals consist of management, as officers and directors. We plan to employ an additional 4-6 individuals at our Hillsboro, Oregon location once operational. The company has used independent contractors in the past for software development, bookkeeping, accounting, and legal services. The company plans to continue to use independent contractors in the future if needed.












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Item 1A. Risk Factors


Risks Related to Our Business


We may not be able to achieve our strategic initiatives and grow our business as anticipated.


Beginning in June of 2016, we made a strategic decision to transition from a jet reservation software solutions provider to a focus on software projects in the cannabis industry. In late of 2018, the company shifted focus from software to the cultivation, processing, and new products and services for the cultivation and processing of cannabis. Our success depends on our ability to raise capital and appropriately manage our expenses as we invest in these initiatives. If we are not able to execute on this strategy successfully or if our investments in these activities do not yield significant returns, our business may not grow as we anticipated, which could adversely affect our operating results. If we are not successful in raising capital our business may not grow as anticipated or even fail. If the company is not successful at raising capital, the company may not be able to continue operations.


Any disruption of service at our facilities or our third-party providers could interrupt or delay our customers’ access to products or solutions in the future, which could harm our future operating results.


Any damage to, or failure of, our systems generally could result in interruptions in our services, loss of products goods and revenues. Interruptions in our services may reduce our revenue, loss of entire crops, products, cause customers to terminate any purchase orders and our ability to attract new customers, all of which would reduce our revenue. Our business would also be harmed if our customers and potential customers believe our services are unreliable, question product quality or manufacturing practices.


Federal regulation and enforcement may adversely affect the implementation of medical marijuana regulations and laws which may negatively impact our revenues and profits.


Currently, there are 30 states plus the District of Columbia that have laws and/or regulation that recognize in one form or another legitimate medical uses for cannabis and consumer use of cannabis in connection with medical treatment. Many other states are considering similar legislation. Conversely, under the Controlled Substances Act (the “CSA”), the policy and regulations of the Federal government and its agencies is that cannabis has no medical benefit and a range of activities including cultivation and use of cannabis for personal use is prohibited. Until Congress amends the CSA with respect to medical marijuana, there is a risk that federal authorities may enforce current federal law, and we may be deemed to be facilitating the selling or distribution of drug paraphernalia in violation of federal law. Active enforcement of the current federal regulatory position on cannabis may thus indirectly and adversely affect revenues and profits of the Company in the future. The risk of strict enforcement of the CSA in light of congressional activity, judicial holdings and stated federal policy remains uncertain.


The Company may provide services to and potentially handle currency for businesses in the legal marijuana industry.


Selling or distributing medical or retail cannabis is deemed to be illegal under the Federal Controlled Substances Act even though such activities may be permissible under state law. A risk exists that our services may one day be deemed to be facilitating the selling or distribution of cannabis in violation of the federal Controlled Substances Act, or to constitute aiding or abetting, or being an accessory to, a violation of that Act. Such a finding, claim, or accusation would likely severely limit the Company’s ability to continue with operations in this field.


The legal cannabis industry has an uncertain legal environment on federal, state, and local levels.


Although we continually monitor the most recent legal developments affecting the legal cannabis industry, the legal environment could shift in a manner not currently contemplated by the Company. For example, while we think there will always be a place for compliance-related services, broader state and federal legalization could render the compliance landscape significantly less technical, which would render our suite of compliance services less valuable and marketable. Lending money to legal cannabis participants could also be subject to legal challenge if the federal government or another jurisdiction decides to more actively enforce applicable laws. These unknown legal developments could directly and indirectly harm our business and results of operations.



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We rely on third parties for certain financial and operational services which is essential to our ability to manage our business. A failure or disruption in these services could materially and adversely affect our ability to manage our business effectively.


We rely on third parties for certain essential financial and operational services. As a result, we depend upon these vendors providing us with services that are always available and are free of errors or defects that could cause disruptions in our business processes, which could adversely affect our ability to operate and manage our operations.


We intend to market and sell our services to small and medium sized businesses that are licensed marijuana businesses. In order for us to improve our operating results and continue to grow our business, it is important that we continually attract new customers, sell additional services to existing customers and encourage existing customers to use our services or products. However, selling to and retaining small  and medium sized businesses can be more difficult than selling to larger enterprises. If we are unable to cost-effectively market and sell our service to our target customers, our ability to grow our revenue and become profitable will be harmed.


We will need to raise additional capital. Such capital may not be available, or may be available on unfavorable terms, which would adversely affect our ability to operate our business.


We do not expect that our existing cash balances will be sufficient to meet our working capital and capital expenditure needs for the next twelve months. The company will need to raise additional funds, we cannot be certain that we will be able to obtain additional financing on favorable terms, if at all, and any additional financings could result in additional dilution to our existing stockholders.


Our market is subject to change at an acute rate; failure to keep up with these changes would result in our inability to gain market share, thus seriously harming our business, financial condition and results of operations.


Our customers and business partners will expect frequent product innovations and branding along with competitive pricing, which have changing requirements for new products and features. In order to be competitive, we need to develop and market new products and product enhancements that respond to these changing requirements on a timely and cost-effective basis. Our failure to do so promptly and cost effectively would seriously harm our business, financial condition and results of operations.


We could become involved in claims or litigations that may result in adverse outcomes.


Due to the nature of our business from time to time we may be involved in a variety of claims or litigations.


We have had a history of losses and may incur future losses, which may prevent us from attaining profitability.


We have had a history of operating losses since our inception and, as of March 31, 2019, we had an accumulated deficit of approximately $(800,985.56). We may incur operating losses in the future, and these losses could be substantial and impact our ability to attain profitability. We do expect to significantly increase expenditures for product development, general and administrative expenses, and sales and marketing expenses; however, if we are not successful at raising capital, we will not achieve build out of our Hillsboro, Oregon location, we will not achieve or sustain profitability or positive operating cash flows. Even if we achieve profitability and positive operating cash flows, we may not be able to sustain or increase profitability or positive operating cash flows on a quarterly or annual basis.


We cannot predict every event and circumstance that may impact our business and, therefore, the risks discussed herein may not be the only ones you should consider.


As we continue to grow our business, we may encounter other risks of which we are not aware as of the date of this Registration Statement. These additional risks may cause serious damage to our business in the future, the impact of which we cannot estimate at this time.





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We will need additional funding if we intend on growing our business and making future acquisitions. If we are unable to raise capital when needed, we would be forced to delay, reduce or eliminate our planned development.


We expect our expenses to increase in connection with our ongoing activities. Furthermore, upon the effectiveness of this Registration Statement, we expect to incur additional costs associated with operating as a public company. Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations. If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce or eliminate some or all of our research and development programs or commercialization efforts.


Raising additional capital may cause dilution to our stockholders or restrict our operations.


Until the time, if ever, we can raise sufficient capital for buildout and to commence operations, that we can generate substantial product revenues, we plan to finance our cash needs through some combination of equity offerings, debt financings, collaborations, strategic alliances and licensing arrangements. We do not have any committed external source of funds. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our existing stockholders will be diluted, and the terms of these new securities may include liquidation or other preferences that adversely affect the rights of our existing stockholders. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.


There is substantial doubt about our ability to continue as a going concern


We have not generated any profit from combined operations since our inception. We expect that our operating expenses will increase greatly over the next twelve months to continue our development activities. Based on our average monthly expenses and current burn rate, we estimate that our cash on hand as of December 31, 2018 will not sufficiently support our operation for the next twelve months. We do not expect to raise capital through debt financing from traditional lending sources since we are not currently generating a profit from operations. Therefore, we only expect to raise money through equity financing via the sale of our common stock or equity-linked securities such as convertible debt. If we cannot raise the money that we need in order to continue to operate our business, we will be forced to delay, scale back or eliminate some or all of our proposed operations. If any of these were to occur, there is a substantial risk that our business would fail. If we are unsuccessful in raising additional financing, we may need to curtail, discontinue or cease operations.


Risks Related to Employee Matters and Managing Growth


Our future success depends on our ability to retain our chief executive officer and other key executives and to attract, retain and motivate qualified personnel.


We are highly dependent, if not completely dependent on Daniel A. Goldin, our Chairman and Chief Executive Officer. Although we have entered into verbal employment agreements with Mr. Goldin providing for certain benefits, including severance in the event of a termination without cause, these agreements do not prevent them from terminating their employment with us at any time. We do not maintain "key person" insurance for any of our executives or other employees. The loss of the services of any of these persons could impede the achievement of our research, development and commercialization objectives.


In addition from time to time, we rely on consultants and advisors, to assist us in formulating our development, commercialization strategy and financial reporting. Our consultants and advisors may be employed by employers other than us and may have commitments under consulting or advisory contracts with other entities that may limit their availability to us.






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Risks Associated with Our Capital Stock


Because we will become a reporting company under the Exchange Act by means other than a traditional underwritten initial public offering, we may not be able to attract the attention of research analysts at major brokerage firms.


Because we will not become a reporting company by conducting an underwritten initial public offering, or IPO, of our common stock, and because we will not be listed on a national securities exchange, security analysts of brokerage firms may not provide coverage of our company. In addition, investment banks may be less likely to agree to underwrite secondary offerings on our behalf than they might if we were to become a public reporting company by means of an IPO because they may be less familiar with our company as a result of more limited coverage by analysts and the media, and because we became public at an early stage in our development.


Our common stock may become subject to the SEC's penny stock rules, which may make it difficult for broker-dealers to complete customer transactions and could adversely affect trading activity in our securities.


The SEC has adopted regulations which generally define "penny stock" to be an equity security that has a market price of less than $5.00 per share, subject to specific exemptions. The market price of our common stock may be less than $5.00 per share for some period of time and therefore would be a "penny stock" according to SEC rules, unless we are listed on a national securities exchange. Under these rules, broker-dealers who recommend such securities to persons other than institutional accredited investors must:


·

make a special written suitability determination for the purchaser;


·

receive the purchaser's prior written agreement to the transaction;


·

provide the purchaser with risk disclosure documents which identify certain risks associated with investing in "penny stocks" and which describe the market for these "penny stocks" as well as a purchaser's legal remedies; and


·

obtain a signed and dated acknowledgment from the purchaser demonstrating that the purchaser has actually received the required risk disclosure document before a transaction in a "penny stock" can be completed.


If required to comply with these rules, broker-dealers may find it difficult to effectuate customer transactions and trading activity in our securities may be adversely affected.


The market price of our common stock may be volatile and may fluctuate in a way that is disproportionate to our operating performance.


Our stock price may experience substantial volatility as a result of a number of factors, including:


·

sales or potential sales of substantial amounts of our common stock;

·

the success of competitive products or technologies;

·

announcements about us or about our competitors, including new product introductions and commercial results;

·

the recruitment or departure of key personnel;

·

developments concerning our licensors or manufacturers;

·

litigation and other developments;

·

actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts;

·

variations in our financial results or those of companies that are perceived to be similar to us; and

·

general economic, industry and market conditions.




12



Many of these factors are beyond our control. The stock markets in general, and the market for cannabis companies in particular, have historically experienced extreme price and volume fluctuations. These fluctuations often have been unrelated or disproportionate to the operating performance of these companies. Broad market and industry factors could reduce the market price of our common stock, regardless of our actual operating performance.


Our CEO and Chairman has voting control, majority control of the outstanding shares and will have rights that could limit our ability to undertake corporation transactions and inhibit changes of control.


We currently have outstanding one class of stock which is our common stock. The common stock holders are entitled to one vote per share.


As a result of our CEO and Chairman being a majority shareholder of the outstanding stock, we may not be able to undertake certain corporate transactions, including equity or debt offerings necessary to raise sufficient capital to run our business, change of control transactions or other transactions that may otherwise be beneficial to our businesses. These circumstances may discourage, delay or prevent a merger, acquisition or other change in control of us that stockholders may consider favorable, including transactions in which our common stockholders might otherwise receive a premium price for their shares. The market price of our common stock could be adversely affected if these circumstances affect our ability to raise capital, attract investors, and conduct corporate transactions.


We have never paid and do not intend to pay cash dividends.


We have never paid cash dividends on any of our capital stock and we currently intend to retain future earnings, if any, to fund the development and growth of our business. As a result, capital appreciation, if any, of our common stock will be our common stockholders' sole source of gain for the foreseeable future.


Our executive officers and directors have the ability to control all matters submitted to stockholders for approval.


Our Chief Executive Officer and Chairman hold 548,000,000 shares of our Common Stock (each share receives one vote) 89% of the Outstanding Shares, and as such, he would be able to control all matters submitted to our stockholders for approval, as well as our management and affairs. For example, this person, would control the election of directors and approval of any merger, consolidation or sale of all or substantially all of our assets, as well as any stock issuances. This concentration of voting power could delay or prevent an acquisition of our company on terms that other stockholders may desire.


Provisions in our articles of incorporation, employment agreements, by-laws, and under Nevada law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management.


Provisions in our articles of incorporation, by-laws, employment agreements, respectively, may discourage, delay or prevent a merger, acquisition or other change in control of us that stockholders may consider favorable, including transactions in which our common stockholders might otherwise receive a premium price for their shares. These provisions could also limit the price that investors might be willing to pay in the future for shares of our common stock, thereby depressing the market price of our common stock. In addition, because our board of directors is responsible for appointing the members of our management team, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors.







13



We will incur an increase in costs as a result of operating as a public reporting company, and our management will be required to devote substantial amount of time to new compliance initiatives.


As a public reporting company, we will incur significant legal, accounting and other expenses that we did not incur as a private company. In addition, the Sarbanes-Oxley Act of 2002 and rules subsequently implemented by the SEC, have imposed various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices. Our management and other personnel will need to devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations will increase our legal and financial compliance costs and will make some activities more time consuming and costly. For example, we expect that these rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance.


We currently do not have outstanding agreements, convertible into shares of common stock. We currently have an outstanding promissory note, holder is Daniel A. Goldin, CEO and Chairman.


We currently have an outstanding instrument which is a promissory note and we may need to issue similar instruments in the future. In the event the company will need to issue convertible instruments, these convertible instruments will be converted into shares of common stock outstanding stock, or that we make additional issuances of other convertible or exchangeable securities, you could experience additional dilution. Furthermore, we cannot assure you that we will be able to issue shares or other securities in any other offering at a price per share that is equal to or greater than the price per share paid by investors or the then current market price.


Item 2. Financial Information.


Management's Discussion and Analysis of Financial Condition and Results of Operations.


You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and related notes appearing at the end of this Registration Statement. Some of the information contained in this discussion and analysis or set forth elsewhere in this Registration Statement, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. You should read the "Risk Factors" section of this Registration Statement for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.


Plan of Operation


Jetblack Corp. (hereinafter the “Company”, “Our”, “We” or “Us”) is a small company with a focus on acquisitions of licenses, investing in new businesses or technologies, business development and general business growth of its subsidiaries. We are seeking to acquire, invest, help guide, develop, and manage companies with amazing growth potential, mainly in emerging markets such as cannabis. We also develop our own projects and concepts. Our subsidiaries include cannabis opportunities in cultivation, processing, and innovative products. We acquired agreements with cannabis companies in Oregon to acquire their licenses for cultivation and processing of marijuana. We are networking and looking to work with key personnel to acquire licenses, grow successful candidate companies for acquisition, investment and or partnerships.


We intend to build out our locations in Hillsboro, Oregon for cannabis cultivation and processing. Our wholly-owned subsidiary CenAviv will focus on high quality solvent-less edibles while, The Indica Company will focus on creating a proprietary line of cultivars. The company will continue to seek out new licenses, partnerships, technologies, and acquisitions.




14



Results from Operations - For the year ended December 31, 2017 as compared to December 31, 2018.


Net Revenue


For the years ended December 31, 2018 and 2017, the Company had no revenues. The company is currently pre-revenue with an operating loss. This will continue in the foreseeable future.


Cost of Revenue


The company is currently pre-revenue and has sustained a deficit and an operating loss.


Gross Profit


As a result of the foregoing, the company currently has an operating loss, no gross profits.


Operating Expenses


Total operating expenses increased from ($189,368.26) in 2017 to ($320,433.88) in 2018, an increase of $131,065.62. The increase was primarily due to an increase in operating expenses and amortization. We had an increase in legal and professional fees as in the year ended December 31, 2018 from the year ending December 31, 2017. This increase was due to an increase in the use of advisors and legal fees to assist the Company in its operations and filings. Compensation was $0 for the year ending December 31, 2017, as compared to $0 for the year ending December 31, 2018, no change, which was due to the company not having sufficient capital for its operations and to pay salaries. Professional and legal fees decreased from $21,886.58 for the year ending December 31, 2017, as compared to $17,549.73 for the year ending December 31, 2018, a decrease of $4,336.85, which was due to decreased auditing and legal expenses, primarily related to the audit of the Company’s financial statements in 2016, and accounting fees in 2017. Investor relations expenses were nil for the year ending December 31, 2017, as compared to nil for the year ending December 31, 2018, no change, which is due to marketing of the Company and subsidiaries by DG Ventures, Inc. General and administrative expenses decreased from $113,854.54 for the year ending December 31, 2017, as compared to $50,538.95 for the year ending December 31, 2018, a decrease of $63,315.59, which was due to an decrease in expenses related to our software development projects.


Other Income (Expense)


Other Income (Expense) increased from ($189,338.26) in 2017 to ($320,403.22) in 2018. This increase is due to operating expenses that have increased from investment activities in our operations


Net Loss


For the year ended December 31, 2018 the Company had a net loss of approximately $($320,403.22) compared to a net loss of approximately ($189,368.26) for the year ended December 31, 2017, an increase of $131,034.96. The increase is primarily due to an increase in increase of operating expenses for its operations and amortization costs.


Liquidity and Capital Resources


As of December 31, 2018, the Company had $192,002.04 in Total Assets, consisting of $100.00 in cash, $0 in prepaid expenses, $184,160.00 in Non-Current Assets, consisting primarily of Intangible assets $175,000. The Company’s total liabilities exceeded its consolidated current assets by approximately $25,717.58 as of December 31, 2018.






15



As of December 31, 2018, the Company has yet to achieve profitable operations, and while the Company hopes to achieve profitable operations in the future, if not it may need to raise capital from stockholders or other sources to sustain operations and to ultimately achieve viable operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. The Company’s principal sources of liquidity have been cash provided by the company Chairman and CEO to pay for expenditures. Going forward the company will need to raise capital from other sources. The Company’s operating results for future periods are subject to numerous uncertainties and it is uncertain if the Company will be able to become profitable or even continue operations for the foreseeable future. If management is not able to achieve revenue and/or manage operating expenses, the Company may not be able to achieve profitability or continue its operations. The Company’s ability to continue in existence is dependent on the Company’s ability to achieve profitable operations and raise sufficient amount of capital.


To continue operations for the next 12 months we will have a cash need of approximately $750,000. Should we not be able to fulfill our cash needs through achieving revenues in a timely manner, we will need to raise money through outside investors through convertible notes, debt or similar instrument(s). The Company has no committed external source of funds, and there is no guarantee we would be able to raise such funds. The Company plans to pay off current liabilities through financing activities as mentioned above.


Our cash flows for the year ended December 31, 2018 and 2017 are summarized below:


 

 

Year Ending

December 31,

2018

 

Year Ending

December 31,

2017

Net cash used in operating activities

 

$

(129,065.72)

 

$

600,810.21

Net cash used in investing activities

 

$

-

 

$

-

Net cash provided by financing activities

 

$

129,299.25

 

$

594,176.89

Net Change in Cash

 

$

233.53

 

$

(6,633.32)

Cash at beginning of year

 

$

6,234.30

 

$

(2,560.74)

Cash at end of year

 

$

6,467.83

 

$

(4,072.58)


Net Cash Used in Operating Activities


For the year ended December 31, 2018, net cash used in operating activities was $129,065.72. For the year ended December 31, 2017, $600,810.21 net cash used in operating activities was $600,810.21, which is higher due to total adjustments to reconcile net Income to net cash provided by operations.


Net Cash Used in Investing Activities


Nil


Net Cash Provided by Financing Activities


For the year ended December 31, 2018, net cash provided by financing activities was $594,176.89 as compared to $129,299.25 for the year ended December 31, 2017. The increase was due to increased expenses related to operating activities.


Results from Operations - For the three months ended March 31, 2018 as compared to March 31, 2019.


Net Revenue


For the three months ended March 31, 2019, the Company had no revenues as compared to no revenues for the three months ended March 31, 2018. This will continue for the foreseeable future until the company can achieve reasonable financing.




16



Cost of Revenue


Cost of Revenue are nil for the three months ended March 31, 2019 from nil for the three months ended March 31, 2018.


Gross Profit


As a result of the foregoing, our gross profit was nil, for the three months ended March 31, 2019, compared with nil, for the three months ended March 31, 2018. The will continue for the foreseeable future.


Operating Expenses


Total operating expenses decreased from $20,536.90 for the three months ended March 31, 2018 to $11,280.98 for the three months ended March 31, 2019, a decrease of $9,255.92. The decrease was primarily due to a decrease in general and administrative expenses related to our subsidiaries, and a decrease in development costs during the three months ended March 31, 2019.


Other Income (Expense)


Other Income (Expense) increased from $0 for the three months ended March 31, 2018 to ($11,280.98) for the three months ended March 31, 2019.


Net Loss


For the three months ended March 31, 2019 the Company had a net loss of approximately $(11,280.98) compared to a loss of $20,536.90 for the three months ended March 31, 2018, a decrease of $9,255.92. The decrease is primarily due to a decrease in general and administrative expenses during the three months ended March 31, 2019.


Liquidity and Capital Resources


As of March 31, 2019, the Company had $194,003.73 in Total Assets, consisting of $175,000 in IP,  $0 in accounts receivable, $0 in prepaid expenses, $0 in inventory and the remaining $189,160 in Non-Current Assets, consisting primarily of Intangible assets ($189,160). The Company’s total liabilities exceeded its consolidated current assets by approximately $36,998.56 as of March 31, 2019.


As of March 31, 2019, the Company has yet to achieve profitable operations and is dependent on its ability to raise capital from stockholders or other sources to sustain operations and to ultimately achieve viable operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. The Company’s principal sources of liquidity have been capital loans provided by our Chairman and CEO Daniel A. Goldin, as well as its ability to raise capital. The Company’s operating results for future periods are subject to numerous uncertainties and it is uncertain if the Company will be able to continue operations, become profitable, and continue growth for the foreseeable future. If management is not able to raise capital and manage operating expenses, the Company may not be able to maintain operations or continue with its business plan.


The Company’s ability to continue in existence is dependent on the Company’s ability to develop the Company’s business plan, to achieve profitable operations and ability to raise capital. Since the Company does not anticipate achieving profitable operations and/or adequate cash flows in the near term, management will continue to pursue additional equity financing through private placements of the Company’s common stock.






17



Our cash flows for the three months ended March 31, 2019 and 2018 are summarized below:


 

 

Three Months

Ended

March 31, 2019

 

Three Months

Ended

March 31, 2018

Net cash used in operating activities

 

$

(5,975.64)

 

$

(23,274.27)

Net cash used in investing activities

 

$

(5000)

 

$

-

Net cash provided by (used in) financing activities

 

$

(10,683.00)

 

$

10,250

Net Change in Cash

 

$

(292.64)

 

$

13,024.27

Cash at beginning of period

 

$

3,762.16

 

$

(4,072.82)

Cash at end of period

 

$

$3,469.52

 

$

17,097.09


Net Cash Used in Operating Activities


For the three months ended March 31, 2019, $(5975.64) net cash used in operating activities was primarily attributable to the net loss of $(11,280.98) and accrued expenses of $11,280.98


Net Cash Used in Investing Activities


For the three months ended March 31, 2019, net cash used in investing activities of $5,000 as compared to $0 for the three months ended March 31, 2018 as a result of investments during those periods.


Net Cash Provided by Financing Activities


For the three months ended March 31, 2019, net cash (used in) provided by financing activities was ($10,683) as compared to $10,250 for the three months ended March 31, 2018.


Critical Accounting Policies


The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Notes to the Consolidated Financial Statements describes the significant accounting policies and methods used in the preparation of the Consolidated Financial Statements. Estimates are used for, but not limited to, contingencies and taxes. Actual results could differ materially from those estimates. The following critical accounting policies are impacted significantly by assumptions, estimates, and judgements used in the preparation of the Consolidated Financial Statements.


Loss Contingencies


The Company is subject to various loss contingencies arising in the ordinary course of business. The Company considers the likelihood of loss or impairment of an asset or the incurrence of a liability, as well as its ability to reasonably estimate the amount of loss in determining loss contingencies. An estimated loss contingency is accrued when management concludes that it is probable that an asset has been impaired or a liability has been incurred and the amount of the loss can be reasonably estimated. The Company regularly evaluates current information available to us to determine whether such accruals should be adjusted.


Income Taxes


The company has a net loss for the period ending March 31, 2019 and December 31, 2018. This loss has a 20 year carryover period. The company continually evaluates its tax positions, changes in tax laws, and new authoritative rulings for potential implications to its tax status.


Recent Accounting Pronouncements


See Note 2 of the consolidated financial statements for discussion of Recent Accounting Pronouncements.



18



Off-Balance Sheet Arrangements


We have some capital expenditures paid by a related party on behalf of the company, which will be recorded in the second quarter. The expenditures total roughly $100,000. This will be recorded as a loan from related party for expenses on behalf of Jetblack.


Recently Adopted Accounting Standards


In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers: Topic 606, or ASU 2014-09. ASU 2014-09 establishes the principles for recognizing revenue and develops a common revenue standard for U.S. GAAP. The standard outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. In applying the new revenue recognition model to contracts with customers, an entity: (1) identifies the contract(s) with a customer; (2) identifies the performance obligations in the contract(s); (3) determines the transaction price; (4) allocates the transaction price to the performance obligations in the contract(s); and (5) recognizes revenue when (or as) the entity satisfies a performance obligation. The accounting standards update applies to all contracts with customers except those that are within the scope of other topics in the FASB Accounting Standards Codification. The accounting standards update also requires significantly expanded quantitative and qualitative disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. This guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2017. The Company has adopted ASU 2014-09 effective in 2018. The adoption of this standard had no material impact on the Company’s financial statements.


Item 3. Properties.


Currently the Company leases a co-working space at 4949 SW Macadam Ave 2nd Floor #84 Portland, OR 97239 at a monthly rent of $217. The lease term is month to month.


The Company leases a warehouse space at 630 SW Walnut St #106 & #110, Hillsboro, OR 97123, at a monthly rent of $12,200. The lease term is 5 years.


Item 4. Security Ownership of Certain Beneficial Owners and Management.


The following tables set forth, as of March 31, 2019, certain information concerning the beneficial ownership of our capital stock, including our common stock by:


·

each stockholder known by us to own beneficially 5% or more of any class of our outstanding stock;

·

each director;

·

each named executive officer;

·

all of our executive officers and directors as a group; and

·

each person, or group of affiliated persons, who is known by us to beneficially own more than 5% of any class of our outstanding stock.


As of March 31, 2019, the Company had authorized 1,350,000,000 shares of common stock. There were 615,422,000 shares of common stock outstanding as of March 31, 2019.


Beneficial ownership is determined in accordance with the rules and regulations of the SEC and includes voting or investment power with respect to our common stock. Shares of our common stock subject to options that are currently exercisable or exercisable within 60 days of March 31, 2019 are considered outstanding and beneficially owned by the person holding the options for the purpose of calculating the percentage ownership of that person but not for the purpose of calculating the percentage ownership of any other person. Except as otherwise noted, we believe the persons and entities in this table have sole voting and investing power with respect to all of the shares of our common stock beneficially owned by them, subject to community property laws, where applicable.




19




Security Ownership of Certain Beneficial Owners


Title

of Class

 

Name and Address of

Beneficial Owner

 

Amount and nature of

beneficial ownership

 

Percent

of Class

Common Stock

 

Daniel A. Goldin (1)

 

548,000,000

 

89.04%

___________

(1) Mr. Goldin serves as CEO and Chairman of the Board, from June of 2016 to present day.


Security Ownership of Management


Title

of Class

 

Name and Address of

Beneficial Owner (1)

 

Amount and nature of

beneficial ownership

 

Percent

of Class

Common Stock

 

Daniel A. Goldin

 

548,000,000

 

89.04%

 

 

Emilia S. Olvera

 

-

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Executive Officers and

Directors as a Group

 

548,000,000

 

89.04%


________


(1) The address for the above individuals is c/o Jetblack Corp. 4949 SW Macadam Ave. 2nd Floor #84, Portland, Oregon 97239.


Item 5. Directors and Executive Officers.


The names, ages, positions, terms, and periods served of the Company’s present directors are set forth in the following table:


Name

 

Age

 

Positions

 

Term (1)

 

Period of

Service Began

Daniel A. Goldin

 

42

 

Chairman of the

Board/CEO/CFO

 

Until 7/01/2022

 

06/20/2016

Emilia S. Olvera

 

29

 

Administrative Assistant

 

Until 7/01/2022

 

6/20/2016


______

(1) All directors hold office until the next annual meeting of stockholders and until their successors have been duly elected and qualified.


There are no agreements with respect to electing directors. The Board of Directors appoints officers annually and each executive officer serves at the discretion of the Board of Directors. The Company does not have any standing committees at this time, and due to its small size does not believe that committees are necessary at this time. As of the date of this Registration Statement the Company’s entire Board fulfills the duties of an audit committee. None of the directors held any directorships during the past five years in any company with a class of securities registered pursuant to Section 12 of the Exchange Act or subject to the requirements of Section 15(d) of such act, or of any company registered as an investment company under the Investment Company Act of 1940.


Director and Officer Biographical Information


Daniel A. Goldin - Chairman of the Board/CEO/CFO


As CEO and Chairman of the Company since June of 2016, Dan leads the company in its mission. He oversees all company operations including investor relations, the leadership of the Board of Directors, and daily business activities. Dan has experience in founding and leading small businesses. Mr. Goldin does not hold any college degrees or professional services licenses. This is Mr. Goldin’s first time leading a public company.



20



Emilia S. Olvera - Administrative Assistant


Emilia S. Olvera Administrative Assistant of the Company since June of 2016. Emilia has an immense knowledge of the inner workings of the business, otc compliance and regulations, being an integral part of the company since 2016. Emilia handles some of the day to day paperwork among other tasks. Ms. Olvera does not hold any professional licenses or college degrees.


Involvement in Certain Legal Proceedings


To the best of our knowledge, other than detailed in (2)(a) below, none of our directors or executive officers has, during the past ten years:


(1) had a petition under the Federal bankruptcy laws or any state insolvency law filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;


(2) has been convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);


(a) Yes. Daniel A. Goldin, company Chairman and CEO was convicted in January of 2012 in Cook County, Illinois, of felony possession of cannabis.


(3) has been the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities:


(i) Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;


(ii) Engaging in any type of business practice; or


(iii) Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws;


(4) has been the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in (3)(i) above, or to be associated with persons engaged in any such activity;


(5) has been found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;


(6) has been found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;


(7) has been the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:




21



(i) Any Federal or State securities or commodities law or regulation; or


(ii) Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or


(iii) Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or


(8) has been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.


Item 6. Executive Compensation.


Summary Compensation Table


The following table sets forth, for the fiscal years ended December 31, 2018 and December 31, 2017, certain information regarding the compensation earned by the Company’s named executive officers.


Summary Compensation Table


Name and

Principal Position

 

Fiscal Year Ended

December 31,

 

Salary($)

 

Total ($)

Daniel A. Goldin,

CEO/CFO (1)

 

2018

 

$

-

 

$

-

(1)

 

 

2017

 

$

-

 

$

-

 

Emilia S. Olvera

(AA) (2)

 

2018

 

$

-

 

$

-

(2)

 

 

2017

 

$

-

 

$

-

 


___________

(1) Does not include 48,000,000 shares issued to Daniel A. Goldin for cancellation of $48,000 in debt at par $.001. Currently Mr. Goldin is not receiving compensation. When compensation does begin, Mr. Goldin will receive $30,000 monthly ($360,000 annually) with a $1000 health insurance allowance monthly ($12,000 annually) and $500 vehicle allowance monthly ($6,000 annually).


(2) Currently Emilia S. Olvera is not receiving compensation. When compensation does begin, Ms. Olvera will receive $100,000 annually with a $1000 health insurance allowance monthly ($12,000 annually) and $500 vehicle allowance monthly ($6,000 annually).


Director Compensation


Directors do not receive compensation for serving as a Director of the Company, at this time.


Employment Agreements


Except for the following agreements, the Company does not have any written agreements with any of its executive officers. In May 2018 the Company entered into a Verbal Employment Agreement, which will be turned into a written agreement there after . The verbal agreement provided that Mr. Goldin would serve as CEO and CFO of the Company for a term of three years at an annual salary of $360,000, and an incentive bonus as determined by the board of directors. In addition, during the term the Company shall provide: an automobile allowance of Five Hundred Dollars ($500) Dollars per month, and health care reimbursement of One Thousand Dollars ($1,000) per month. The agreement shall automatically be renewed for additional three-year periods unless either party has provided written termination of this Agreement at least 90 days prior to the expiration of such Term.



22



If employment is terminated as a result of his death or Disability, the Company shall pay, his Base Salary and any accrued but unpaid Bonus and expense reimbursement amounts through the date of his Death or Disability and a lump sum payment equal to two years of Base Salary (at the time his Death or Disability occurs) within 30 days of his Death or Disability. In the event the Company does not have the cash flow to pay such amount within 30 days as set forth above, the Company may make such payments over 12 equal monthly installments. If employment is terminated by the Board of Directors of the Company for Cause, then the Company shall pay his Base Salary through the date of his termination and there shall be no further entitlement to any other compensation or benefits from the Company. If employment is terminated by the Company (or its successor) upon the occurrence of a Change of Control or within six (6) months thereafter, the Company (or its successor, as applicable) shall (i) continue to pay to his Base Salary for a period of thirty six (36) months following such termination, (ii) pay any accrued and any earned but unpaid Bonus, (iv) pay the Executive the Bonus he would have earned had he remained with the Company for six (6) months from the date which such termination occurs, (iv) pay expense reimbursement amounts through the date of termination. While the Company does not currently have a stock option plan, if one is created in the future and options are granted to Mr. Goldin, all such Stock Options that have not vested as of the date of such termination shall be accelerated and deemed to have vested as of such termination date and shall remain exercisable for a period as outlined in the Company’s Stock Option program, and (v) Mr. Goldin shall be entitled to receive equivalent share issuances as any executive officer, management or director of the Company receives for a period of 36 months thereafter. If employment is terminated by Mr. Goldin for Good Reason, or if this Agreement is not renewed, then the Company shall (i) pay a single lump sum cash payment within five business days of such termination equal to 17 times the then monthly Base Salary in effect regardless of when such termination occurs (provided, that in the event the Company does not have the cash flow to pay such amount within five business days as set forth above, the Company may make such payments over 12 equal monthly installments), and (ii) pay Executive the Bonus he would have earned had he remained with the Company for six (6) months from the date which such termination occurs, and (iii) pay Executive any expense reimbursement amounts owed, and payment for any unused vacation days, through the date of termination. All Stock Options that are scheduled to vest in the contract year of the date of such termination shall be accelerated and deemed to have vested as of the termination date. All Stock Options that have not vested (or deemed to have vested pursuant to the preceding sentence) shall be deemed expired, null and void. Any Stock Options that have vested as of the date of termination shall remain exercisable for a period as outlined in the Company’s Stock Option program.


In May 2018 the Company entered into a Verbal Employment Agreement, which will be turned into a written agreement there after. The verbal agreement provided that Emilia S. Olvera would serve as Administrative Assistant of the Company for a term of three years at an annual salary of $100,000, and an incentive bonus as determined by the board of directors. In addition, during the term the Company shall provide: an automobile allowance of Five Hundred Dollars ($500) Dollars per month, and health care reimbursement of One Thousand Dollars ($1,000) per month. The agreement shall automatically be renewed for additional three-year periods unless either party has provided written termination of this Agreement at least 90 days prior to the expiration of such Term. If employment is terminated as a result of his death or Disability, the Company shall pay, her Base Salary and any accrued but unpaid Bonus and expense reimbursement amounts through the date of her Death or Disability and a lump sum payment equal to two years of Base Salary (at the time her Death or Disability occurs) within 30 days of her Death or Disability. In the event the Company does not have the cash flow to pay such amount within 30 days as set forth above, the Company may make such payments over 12 equal monthly installments. If employment is terminated by the Board of Directors of the Company for Cause, then the Company shall pay her Base Salary through the date of her termination and there shall be no further entitlement to any other compensation or benefits from the Company. If employment is terminated by the Company (or its successor) upon the occurrence of a Change of Control or within six (6) months thereafter, the Company (or its successor, as applicable) shall (i) continue to pay to her Base Salary for a period of thirty six (36) months following such termination, (ii) pay any accrued and any earned but unpaid Bonus, (iv) pay the Bonus she would have earned had she remained with the Company for six (6) months from the date which such termination occurs, (iv) pay expense reimbursement amounts through the date of termination. While the Company does not currently have a stock option plan, if one is created in the future and options are granted to Ms. Olvera, all such Stock Options that have not vested as of the date of such termination shall be accelerated and deemed to have vested as of such termination date and shall remain exercisable for a period as outlined in the Company’s Stock Option program, and (v) Emilia S. Olvera shall be entitled to receive equivalent share issuances as any executive of the Company receives for a period of 36 months thereafter.




23



If employment is terminated by Ms. Olvera for Good Reason, or if this Agreement is not renewed, then the Company shall (i) pay a single lump sum cash payment within five business days of such termination equal to 17 times the then monthly Base Salary in effect regardless of when such termination occurs (provided, that in the event the Company does not have the cash flow to pay such amount within five business days as set forth above, the Company may make such payments over 12 equal monthly installments), and (ii) pay the Bonus she would have earned had she remained with the Company for six (6) months from the date which such termination occurs, and (iii) pay any expense reimbursement amounts owed, and payment for any unused vacation days, through the date of termination. All Stock Options that are scheduled to vest in the contract year of the date of such termination shall be accelerated and deemed to have vested as of the termination date. All Stock Options that have not vested (or deemed to have vested pursuant to the preceding sentence) shall be deemed expired, null and void. Any Stock Options that have vested as of the date of termination shall remain exercisable for a period as outlined in the Company’s Stock Option program.


Stock Option Plan and other Employee Benefits Plans


The Company does not maintain a Stock Option Plan or other Employee Benefit Plans.


Overview of Compensation Program


We currently do not maintain a Compensation Committee of the Board of Directors. Until a formal committee is established, our entire Board of Directors has responsibility for establishing, implementing and continually monitoring adherence with the Company’s compensation philosophy. The Board of Directors ensures that the total compensation paid to the executives is fair, reasonable, and competitive.


Compensation Philosophy and Objectives


The Board of Directors believes that the most effective executive compensation program is one that is designed to reward the achievement of specific annual, long-term and strategic goals by the Company and that aligns executives’ interests with those of the stockholders by rewarding performance above established goals, with the ultimate objective of improving stockholder value. As a result of the size of the Company, the Board evaluates both performance and compensation on an informal basis. Upon hiring additional executives, the Board intends to establish a Compensation Committee to evaluate both performance and compensation to ensure that the Company maintains its ability to attract and retain superior employees in key positions and that compensation provided to key employees remains competitive relative.


Role of Executive Officers in Compensation Decisions


The Board of Directors makes all compensation decisions for, and approves recommendations regarding equity awards to, the executive officers and directors of the Company.


Item 7. Certain Relationships and Related Transactions, and Director Independence.


Transactions with Related Persons


During the years ended December 31, 2018 and 2017 the Company issued shares of common stock to our Chairman and CEO (as listed above). As of December 31, 2017, a total of $48,000 in expenses was accrued and cancelation of debt was executed in exchange for 48,000,000 shares of our common stock.


Promoters and Certain Control Persons


DG Ventures, Inc. is Jetblack Corp’s IR service provider. The Founder and CEO of DG Ventures, Inc. is Daniel A. Goldin, who is also CEO of Jetblack Corp.





24



List of Parents


None.


Director Independence


The Company has one director. The current director is a majority shareholder, as well as the CEO of the Company, who also has voting control.


Item 8. Legal Proceedings.


From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are not presently a party to any material litigation, nor to the knowledge of management is any litigation threatened against us, which may materially affect us.


Item 9. Market Price of and Dividends on the Registrant's Common Equity and Related Stockholder Matters.


Market Information


The Common Stock of the Company is currently trading on the OTC PINK Marketplace under the symbol “JTBK.” The following information reflects the high and low bid prices of the Company’s common stock on the OTC PINK Markets.


Quarterly period

 

High

 

Low

Fiscal year ended December 31, 2018:

 

 

 

 

First Quarter

 

$

0.15

 

$

0.10

Second Quarter

 

$

0.85

 

$

0.01

Third Quarter

 

$

0.80

 

$

0.25

Fourth Quarter

 

$

0.30

 

$

0.20

 

 

 

 

 

 

 

Fiscal year ended December 31, 2017:

 

 

 

 

 

 

First Quarter

 

$

0.13

 

$

0.13

Second Quarter

 

$

0.15

 

$

0.13

Third Quarter

 

$

0.15

 

$

0.13

Fourth Quarter

 

$

0.15

 

$

0.15


Holders


As of March 31, 2019, there were 615,422,000 shares of common stock outstanding, which were held by approximately 73 record holders.


Dividends


We have never paid cash dividends on any of our capital stock and we currently intend to retain our future earnings, if any, to fund the development and growth of our business. We do not intend to pay cash dividends to holders of our common stock in the foreseeable future.


Securities Authorized for Issuance under Equity Compensation Plans


The Company does not currently maintain any Equity Compensation Plans.





25



Item 10. Recent Sales of Unregistered Securities.


Set forth below is information regarding shares of common stock and preferred stock issued, and options granted, by us during the last two fiscal years, that were not registered under the Securities Act. Also included is the consideration, if any, received by us, for such shares and options and information relating to the Securities Act, or rule of the SEC, under which exemption from registration was claimed.


Common Stock


2017


On March 16, 2017, the Company issued 48,000,000 shares of common stock to our Chairman and CEO, Daniel A. Goldin, for relief of $48,000 in debts payed on behalf of the company. The common stock is restricted bearing legend, and was issued at par $.001


A.

The nature of the offering (e.g., Securities Act Rule 504, intrastate, etc.); March 16, 2017. Non-public.


Preferred Stock


Nil.


Warrants


Nil.


Item 11. Description of Registrant's Securities to be Registered.


We are registering on this Registration Statement only our common stock, the terms of which are described below.


As of  May 1, 2019, we had 1,350,000,000 authorized shares of common stock, par value $0.001 per share.


Common Stock


At any meeting of the shareholders, every shareholder of common stock is entitled to vote and may vote in person or by proxy authorized by an instrument in writing filed in accordance with the procedure established for the meeting.


Each shareholder shall have one vote for every share of stock entitled to vote, which is registered in his name on the record date for the meeting, except as otherwise required by law or the Articles of Incorporation.


Convertible Instruments


The company does not have any convertible instruments which remain outstanding as of March 31, 2019


Promissory Notes


The company has entered into a written promissory note for $25,000. In 2016, Mr. Goldin purchased the only outstanding note of the company, becoming the only note holder in the company. which was a convertible note held by the former custodian. The Board proceeded to cancel the convertible note, held now by Mr. Goldin, and issue a promissory note in the amount of $25,000, with no conversion rights.


Secured Investor Notes


Nil


Warrants


Nil



26




Item 12. Indemnification of Directors and Officers.


Our Articles of Incorporation and bylaws both provide for the indemnification of our officers and directors to the fullest extent permitted by the Nevada Revised Statutes. These provisions state that certain persons (hereinafter called “lndemnitees”) may be indemnified by a Nevada corporation pursuant to the provisions of applicable law, namely, any person (or the heirs, executors or administrators of such person) who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a director, officer, employee or agent of such corporation, or is or was serving at the request of such corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise. The Company will indemnify the Indemnitees in each and every situation where the Company is obligated to make such indemnification pursuant to the aforesaid statutory provisions. The Company will also indemnify the Indemnitees in each and every situation where, under the aforesaid statutory provisions, the Company is not obligated, but is nevertheless permitted or empowered, to make such indemnification. Before making such indemnification with respect to any situation covered under the foregoing sentence, the Company will make a determination as to whether each Indemnitee acted in good faith and in a manner such Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, and, in the case of any criminal action or proceeding, had no reasonable cause to believe that such Indemnitees’ conduct was unlawful. No such indemnification shall be made (where not required by statute) unless it is determined that such Indemnitee acted in good faith and in a manner such Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, and, in the case of any criminal action or proceeding, had no reasonable cause to believe that such Indemnitee's conduct was unlawful.


Item 13. Financial Statements and Supplementary Data.


The information required by this item may be found beginning on page F-1 of this Registration Statement and are incorporated herein by reference.


Item 14. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.


We have had no disagreements with our auditors or accounting or financial disclosures.


Item 15. Financial Statements and Exhibits.


(a) Financial Statements






















27



Financial Statements:


For the Years Ended December 31, 2018 and 2017

 

 

 

Daniel A. Goldin preparation of the financial statements

F-1

 

 

Consolidated Balance Sheets as of December 31, 2018 and 2017

F-2

 

 

Consolidated Statements of Operations for the years ended December 31, 2018 and 2017

F-3

 

 

Consolidated Statements of Changes in Stockholders' Deficit for the years ended December 31, 2018 and 2017

F-4

 

 

Consolidated Statement of Cash Flows for the years ended December 31, 2018 and 2017

F-5

 

 

Notes to Consolidated Financial Statements

F-6

 

 

For the Three Months Ended March 31, 2019 (Unaudited)

 

 

 

Consolidated Balance Sheets as of March 31, 2019 and December 31, 2018

F-12

 

 

Consolidated Statements of Operations for the three months ended March 31, 2019 and 2018

F-13

 

 

Consolidated Statements of Changes in Stockholders' Deficit for the three months ended March 31, 2019

F-14

 

 

Consolidated Statement of Cash Flows for the periods ended March 31, 2019 and 2018

F-15

 

 

Notes to Consolidated Financial Statements

F-16


(b) Exhibits.


See the Exhibit Index attached hereto which is incorporated by reference.

























28













Financial Statements are Unaudited and prepared by Daniel A. Goldin


Company CEO CFO Chairman


/s/Daniel A. Goldin








JETBLACK CORP.


CONSOLIDATED FINANCIAL STATEMENTS


FOR THE YEARS ENDING DECEMBER 31, 2018 &


DECEMBER 31, 2017





















F-1



JETBLACK CORP.

CONSOLIDATED BALANCE SHEETS

PERIOD ENDING DECEMBER 31, 2018 AND DECEMBER 31, 2017



 

 

December 31,

2018

 

December 31,

2017

 

 

 

 

 

ASSETS

 

 

 

 

CURRENT ASSETS:

 

$

4,908.26

 

$

4,655.03

  Cash

 

 

100

 

 

(4,072.58)

 

 

 

 

 

 

 

Total Current Assets

 

 

4,908.26

 

 

(4,655.03)

 

 

 

 

 

 

 

NON-CURRENT ASSETS:

 

 

 

 

 

 

  Equipment, net

 

 

2,933.78

 

 

5,933.78

  Intangible asset

 

 

175,000

 

 

350,000.00

 

 

 

 

 

 

 

  Other assets

 

 

184,160.00

 

 

359,160.00

 

 

 

 

 

 

 

Total Assets

 

$

192,004.04

 

$

360,438.75

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

  Accrued expenses, including accrued officer salaries

 

 

3,971.01

 

 

8,781.62

 

 

 

 

 

 

 

Total Current Liabilities

 

 

3,971.01

 

 

8,782.58

 

 

 

 

 

 

 

LONG-TERM LIABILITIES:

 

 

 

 

 

 

  Advances from related party

 

 

213,748.61

 

 

49,514.55

 

 

 

 

 

 

 

Total Liabilities

 

$

217,719.62

 

$

65,731.97

 

 

 

 

 

 

 

STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

  Additional paid-in capital

 

 

149,648.00

 

 

150,930

  Accumulated deficit

 

 

(790,787.58)

 

 

(466,955.56)

Total Stockholders' Deficit

 

 

(25,717.58)

 

 

294,706.78

 

 

 

 

 

 

 

Total Liabilities and Stockholders' Deficit

 

$

192,002.04

 

$

360,438.75







The accompanying notes are an integral part of these financial statements.



F-2



JETBLACK CORP

CONSOLIDATED STATEMENTS OF OPERATIONS



 

For the Year

Ended

December 31,

2018

 

For the Year

Ended

December 31,

2017

 

 

 

 

 

REVENUE

 

 

 

 

Revenue

$

-

 

 

-

 

 

 

 

 

 

Total Revenue

 

-

 

 

-

 

 

 

 

 

 

Cost of Revenue

 

-

 

 

30.00

 

 

 

 

 

 

Gross profit

$

(320,423.16)

 

$

(189,368.26)

 

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

Professional and legal fees

$

17,549.73

 

$

21,886.58

Office Expenses

 

8,963.15

 

 

11,324.25

General and administrative

 

50,538.95

 

 

113,854.54

Lease

 

4,763.00

 

 

12,496.00

 

 

 

 

 

 

Operating expenses

 

320,433.88

 

 

189,338.26

 

 

 

 

 

 

LOSS FROM OPERATIONS

$

(320,403.22)

 

$

(189,368.26)

 

 

 

 

 

 

OTHER INCOME (EXPENSE):

 

 

 

 

 

Interest expense

$

(524.00)

 

$

(7,681.56)

Amortization

 

(175,000.00)

 

 

(161.00)

 

 

 

 

 

 

Other income (expense), net

$

(19.94)

 

$

(189,338.26)

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS

$

(320,423.16)

 

$

(189,368.26)

 

 

 

 

 

 

Net loss per share - basic

$

(0.00052)

 

$

(0.000307)

 

 

 

 

 

 

Weighted average number of common shares outstanding - basic

 

615,422,000

 

 

615,422,000










The accompanying notes are an integral part of these financial statements.



F-3



JETBLACK CORP

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017



 

 

Common Stock

Par Value $0.001

 

 

 

 

 

Number

of

Shares

 

Amount

Additional

Paid in

Capital

Accumulated

Deficit

Total

Shareholder

Equity

 

 

 

 

 

 

 

 

Balance, December 31, 2016

 

567,422,000

 

$

 

146,000.00

(277,587.00)

(65,587.00)

 

 

 

 

 

 

 

 

 

Issuance of common shares for debt relief

 

48,000,000

 

$

48,000.00

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2017

 

615,422,000

 

$

 

150,930.00

(466,955.56)

294,706.78

 

 

 

 

 

 

 

 

 

Balance, December 31, 2018

 

615,422,000

 

$

 

149,648.00

(790,78.58)

(25,717.58)


























The accompanying notes are an integral part of these financial statements.



F-4



JETBLACK CORP

CONSOLIDATED STATEMENT OF CASH FLOWS



 

 

December 31,

2018

 

December 31,

2017

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

Net loss

 

$

(320,423.16)

 

$

(137,951.61)

 

 

 

 

 

 

 

Adjustments to reconcile net loss to net cash used in operating activities

 

 

191,357.44

 

 

(462,858.60)

Changes in fair value of investments

 

 

 

 

 

 

Amortization

 

 

175,000.00

 

 

161.00

Depreciation

 

 

3,000.00

 

 

 

 

 

 

 

 

 

 

NET CASH PROVIDED BY OPERATING ACTIVITIES

 

 

(129,065.72)

 

 

(600,810.21)

 

 

 

 

 

 

 

Proceeds from advances from related party

 

 

129,299.25

 

 

49,514.55

 

 

 

 

 

 

 

NET CASH PROVIDED BY FINANCING ACTIVITIES:

 

 

129,299.25

 

 

594,176.89

 

 

 

 

 

 

 

NET CHANGE IN CASH

 

 

-

 

 

(6,633.32)

 

 

 

 

 

 

 

Cash at beginning of year

 

 

6,234.30

 

 

2,560.74

 

 

 

 

 

 

 

Cash at end of year

 

$

6,467.83

 

$

(4,072.58)

 

 

 

 

 

 

 

NON-CASH INVESTING AND FINANCING ACTIVITIES:

 

 

 

 

 

 

Common stock issued for conversion of debt

 

$

48,000.00

 

$

-




















The accompanying notes are an integral part of these financial statements.



F-5



JETBLACK CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - ORGANIZATION AND NATURE OF BUSINESS


History


The name of the issuer is Jetblack Corp. We were incorporated as Tortuga Mexican Imports Inc. on April 17, 2002 in the State of Nevada for the purpose of selling consumer products. Effective March 15, 2010, we changed our name to Jetblack Corp., by way of a merger with our wholly owned subsidiary, Jetblack Corp., which was formed solely for the purpose of effectuating the corporate reorganization and pursing new business in subsequent years.


On February 26, 2016 Barton Hollow, LLC, a stockholder of the Issuer, filed an Application for Appointment of Custodian pursuant to Section 78.347 of the Act in the District Court for Clark County, Nevada. Barton Hollow was subsequently appointed custodian of the Issuer by Order of the Court on April 5, 2016 (the “Order”). In accordance with the provisions of the Order, Barton Hollow thereafter moved to: (a) reinstate the Issuer with the State of Nevada; (b) provide for the election of interim officers and directors; and (c) call and hold a stockholder meeting.


Daniel A. Goldin was appointed CEO and Director on June 20, 2016. The former Custodian has since been discharged and full authority has been returned to the Board of Directors. Mr. Goldin purchased the convertible note held by the former custodian, making Mr. Goldin the holder of the only convertible note on the books of Jetblack Corp at this time. The convertible note has since been canceled and a promissory note was issued. Mr. Goldin, our Chairman/CEO/CFO is the only note holder of the company. Under the leadership of Mr. Goldin, Jetblack has initiated the entry of Jetblack Corp into the emerging markets of cannabis.


Jetblack Corp, is a company currently focused in the cannabis industry through its operating subsidiaries. Although, the company will not be pigeon holed to one sector, but will always search out emerging new markets for growth and shareholder value. We have researched and identified areas of the cannabis industry that present opportunities for the launch of improved products and services. These opportunities will be described more extensively at our website: www.JetblackCorp.com once it is complete. Also on our twitter feed @jetblackcorp which will give the latest news and company updates.


The company is in the process of transferring an Oregon Marijuana Producer License to CenAviv LLC and an Oregon Marijuana Processor License to CenAviv LLC, Jetblacks’ wholly-owned subsidiary in Oregon. The company leases a location in Hillsboro, Oregon. The facility is 8,400 square feet and will require some buildout. Currently Jetblack is searching for reasonable financing terms and partners for its projects.


Going Concern


The financial statements have been prepared assuming that the Company will continue as a going concern. As of December 31, 2018 and March 31, 2019, the Company has yet to achieve profitable operations and is dependent on its ability to raise capital from stockholders or other sources to sustain operations and to ultimately achieve viable operations. The financial statements do not include any adjustments that might result from the outcome of these uncertainties. These factors raise substantial doubt about the Company’s ability to continue as a going concern.


The Company’s ability to continue in existence is dependent on the Company’s ability to develop the Company’s business plan and to achieve profitable operations. Since the Company does not anticipate achieving profitable operations and/or adequate cash flows in the near term, management will continue to pursue additional equity financing through private placements of the Company’s common stock.





F-6



NOTE 2 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Basis of Presentation


The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).


Principles of Consolidation


The consolidated financial statements include the accounts of JETBLACK CORP., and subsidiaries for the year ended December 31, 2018.


Revenues


Revenue is recognized in accordance with ASC 605. As such, the Company identifies performance obligations and recognizes revenue over the period through which the Company satisfies these obligations. Any contracts that by nature cannot be broken down by specific performance criteria will recognize revenue on a straight line basis over the contractual term of the period of the contract.


Cash and Cash Equivalents


For purpose of the statements of cash flows, the Company considers cash and cash equivalents to include all stable, highly liquid investments with maturities of three months or less. The Company primarily transacts its business with one financial institution. The amount on deposit in that one institution varies but does not exceed the federally-insured limit $250,000 at this time.


Convertible Instruments


The company has no convertible instruments outstanding.


Income Taxes


The company has a net loss for the period ending December 31, 2018 and March 31, 2019. This loss has a 20 year carryover period. The company continually evaluates its tax positions, changes in tax laws, and new authoritative rulings for potential implications to its tax status.


Earnings (loss) Per Common Share


The Company reports earnings (loss) per share in accordance with ASC Topic 260-10, “Earnings per Share.” Basic earnings (loss) per share is computed by dividing income (loss) available to common shareholders by the weighted average number of common shares available. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Diluted earnings (loss) per share has not been presented as there are no dilutive securities.


Use of Estimates in the Preparation of Financial Statements


The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.





F-7



Fair Value Measurements


The Company’s financial instruments may consist of cash, inventory, investments, accounts payable, prepaid expenses, notes payable, advances from related parties, and liabilities. The estimated fair value of cash, prepaid expenses, inventory, investments, accounts payable, liabilities, notes payable and advances from related parties approximate their carrying amounts due to the short-term nature of these instruments. Certain non-financial assets are measured at fair value on a nonrecurring basis. Accordingly, these assets are not measured and adjusted to fair value on an ongoing basis but are subject to periodic impairment tests. These items primarily include other intangible assets.


Goodwill


The Company, if needed, reviews the carrying value of intangible assets not subject to amortization, including goodwill, to determine whether impairment may exist. Goodwill and certain intangible assets are assessed annually, or when certain triggering events occur, for impairment using fair value measurement techniques. These events could include a significant change in the business climate, legal factors, a decline in operating performance, competition, sale or disposition of a significant portion of the business, or other factors.


Recently Issued Accounting Pronouncements


The Company continually assesses any new accounting pronouncements to determine their applicability to the Company. Where it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company evaluates the situation to determine the consequence of the change to its financial statements and assures that there are proper controls in place to ascertain that the Company’s financials properly reflect the change.


NOTE 3 - INVESTMENTS, ACQUISITIONS AND GOODWILL


On March 16, 2017, the company issued 48,000,000 shares of restricted common stock to our Chairman and CEO in exchange for $48,000 in debt relief.


Intangible Asset


The Company periodically reviews the carrying value of intangible assets not subject to amortization to determine whether impairment may exist. Intangible assets are assessed annually, or when certain triggering events occur, for impairment using fair value measurement techniques. The Company performed this evaluation of our intangible asset as of December 31, 2018 and determined no impairment was necessary.


Goodwill


The Company periodically reviews the carrying value of intangible assets not subject to amortization, including goodwill, to determine whether impairment may exist. Goodwill and certain intangible assets are assessed annually, or when certain triggering events occur, for impairment using fair value measurement techniques. These events could include a significant change in the business climate, legal factors, a decline in operating performance, competition, sale or disposition of a significant portion of the business, or other factors.


NOTE 4 - CONVERTIBLE NOTES PAYABLE


The company has no convertible notes outstanding.


NOTE 5 - DERIVATIVE LIABILITY


Derivative Liability- Debt


The company has no derivative liabilities.




F-8



NOTE 6 - EARNINGS PER SHARE


The Company computes net loss per share in accordance with FASB ASC 260-10 “Earnings per Share”. Under the provisions of FASB ASC 260-10, basic net loss per share is computed by dividing the net loss available to common stockholders for the period by the weighted average number of shares of common stock outstanding during the period.


Diluted loss per share is computed using the weighted average number of shares and dilutive potential common shares arising from the conversion of preferred shares into common shares at the election of the holders thereof. Potentially dilutive common shares consist of employee stock options, warrants, and unissued restricted common stock, and are excluded from the diluted earnings per share computation in periods where the Company has incurred net losses.


For the year ended December 31, 2018 and 2017, the Company’s net loss per share was $0.00052 and $0.0003077, based on the weighted average number of shares outstanding of 615,422,000 and 615,422,000, respectively.


NOTE 7 - STOCKHOLDERS’ DEFICIT


Articles of Incorporation


As of December 31, 2018 the Company’s Amended Articles of Incorporation authorize it to issue up to One Billion Three Hundred and Fifty Million (1,350,000,000) shares, of which all shares are common stock, with a par value of one- tenth of one cent ($0.001) per share.


Common Shares


As of December 31, 2018, the Company’s authorized common stock is 1,350,000,000 shares at $0.001 par value, of which 615,422,000 shares were issued and outstanding as of December 31, 2018 and 2017, respectively.


Shares issued during the year ended December 31, 2017


During the year ended December 31, 2017, the Company issued 48,000,000 restricted common stock shares to our Chairman and CEO for the cancelation of $48,000 in debt relief.


See Note 3.


NOTE 8 - RELATED PARTY TRANSACTIONS


Share Issuance


The Company’s Chairman and CEO has funded the company since 2016. In 2017 the company issued Daniel A. Goldin 48,000,000 restricted shares of common stock, for the cancelation of $48,000 in debt. which were expenses paid on behalf of the company.


This practice has continued to this date. Mr. Goldin has continued the practice of funding the company operating expenses.


See Note 7 for related party share issuances to the Company’s CEO, CTO and directors.


NOTE 9 - COMMITMENTS


Month - to - month commitment for co-working office space at 4949 SW Macadam Ave 2nd Floor, Portland, OR 97239. This allows the company to be flexible and save on expenses. The company leases the co-working space for $215 monthly.




F-9



NOTE 10 - INCOME TAXES


The company has a net loss for the period ending December 31, 2018. This loss has a 20 year carryover period. The company continually evaluates its tax positions, changes in tax laws, and new authoritative rulings for potential implications to its tax status. The Company has net operating losses (“NOLs”) as of December 31, 2018 of approximately $790,000 for federal tax purposes, which will expire in varying amounts through 2039. The Company may be able to utilize its NOLs to reduce future federal and state income tax liabilities. However, these NOLs are subject to various limitations under Internal Revenue Code (“IRC”) Section 382. IRC Section 382 limits the use of NOLs to the extent there has been an ownership change of more than 50 percentage points. In addition, the NOL carry-forwards are subject to examination by the taxing authority and could be adjusted or disallowed due to such exams. Although the Company has not undergone an IRC Section 382 analysis, it is possible that the utilization of the NOLs could be substantially limited. The Company has no tax provision for the year ended December 31, 2018 due to the net losses and full valuation allowances against net deferred tax assets.


NOTE 11 - SUBSEQUENT EVENTS


Nil.






































F-10
















JETBLACK CORP.


CONSOLIDATED FINANCIAL STATEMENTS


MARCH 31, 2019


(UNAUDITED)

























F-11



JETBLACK CORP

CONSOLIDATED BALANCE SHEETS



 

 

March 31,

2019

 

March 31,

2018

 

 

 

 

 

ASSETS

 

 

 

 

CURRENT ASSETS:

 

$

3,469.52

 

$

(17,097.09)

  Cash

 

 

100.00

 

 

-

  Prepaid expenses

 

 

-

 

 

-

  Inventory

 

 

-

 

 

-

  Amortization

 

 

(175,490.00)

 

 

(490.00)

Total Current Assets

 

 

1,909.95

 

 

(18,656.66)

 

 

 

 

 

 

 

NON-CURRENT ASSETS:

 

 

 

 

 

5,933.78

  Equipment, net

 

 

4,445.98

 

 

4,445.98

  Investment

 

 

-

 

 

-

  Intangible asset

 

 

175,000.00

 

 

350,000.00

  Goodwill

 

 

-

 

 

-

Other assets

 

 

189,160.00

 

 

359,160.00

 

 

 

 

 

 

 

Total Assets

 

$

194,003.73

 

$

346,437.12

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

1,070.68

 

 

(12,497.07)

  Accounts payable

 

 

-

 

 

-

  Advances from related party

 

 

5,500.00

 

 

59,764.55

Total Current Liabilities

 

 

6,570.68

 

 

12,497.07

 

 

 

 

 

 

 

LONG-TERM LIABILITIES:

 

 

198,931.61

 

 

-

  Promissory Note payable

 

 

25,000.00

 

 

25,000.00

 

 

 

 

 

 

 

Total Liabilities

 

$

231,002.29

 

$

72,267.48

 

 

 

 

 

 

 

STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

  Additional paid-in capital

 

 

149,648.00

 

 

150,930.00

  Accumulated deficit

 

 

(800,985.56)

 

 

(487,492.70)

Total Stockholders' Deficit

 

 

36,998.56

 

 

274,169.64

 

 

 

 

 

 

 

Total Liabilities and Stockholders' Deficit

 

$

194,003.73

 

$

346,437.12






The accompanying notes are an integral part of these financial statements.



F-12



JETBLACK CORP

CONSOLIDATED STATEMENT OF OPERATIONS



 

Quarter

Ended

March 31,

2019

 

Quarter

Ended

March 31,

2018

 

 

 

 

REVENUE

 

 

 

Revenue

$

-

 

$

-

 

 

 

 

 

 

Total Revenue

 

-

 

 

-

 

 

 

 

 

 

Cost of Revenue

 

-

 

 

-

 

 

 

 

 

 

Gross profit

 

-

 

 

-

 

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

Professional and legal fees

 

440.00

 

 

905.75

Utilities

 

489.14

 

 

1,277.63

General and administrative

 

3,736.62

 

 

4,162.35

Expenses

 

1,883.51

 

 

8,548.17

 

 

 

 

 

 

Operating expenses

 

11,280.96

 

 

20,536.95

 

 

 

 

 

 

LOSS FROM OPERATIONS

 

(11,280.98)

 

 

(20,536.95)

 

 

 

 

 

 

OTHER INCOME (EXPENSE):

 

 

 

 

 

Interest expense

 

614.32

 

 

40.39

 

 

 

 

 

 

Other income (expense), net

 

11,280.98

 

 

-

 

 

 

 

 

 

NET LOSS

$

(11,280.98)

 

$

(20,536.90)

 

 

 

 

 

 

Net loss per share - basic

$

(0.000018)

 

$

(0.000333)

 

 

 

 

 

 

Weighted average number of common shares outstanding - basic

 

615,422,000

 

 

615,422,000










The accompanying notes are an integral part of these financial statements.



F-13



JETBLACK CORP

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017



 

 

Common Stock

Par Value $0.001

 

 

 

 

 

Number

of

Shares

 

Amount

Additional

Paid in

Capital

Accumulated

Deficit

Total

Shareholder

Equity

 

 

 

 

 

 

 

 

Balance, December 31, 2016

 

567,422,000

 

$

 

146,000.00

(277,587.00)

(65,587.00)

 

 

 

 

 

 

 

 

 

Issuance of common shares for debt relief

 

48,000,000

 

$

48,000

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2017

 

615,422,000

 

$

 

150,930.00

(466,955.56)

294,706.78

 

 

 

 

 

 

 

 

 

Balance, December 31, 2018

 

615,422,000

 

$

 

149,648.00

(790,78.58)

(25,717.58)




























The accompanying notes are an integral part of these financial statements.



F-14



JETBLACK CORP

CONSOLIDATED STATEMENT OF CASH FLOWS



 

 

Quarter

Ended

March 31,

2018

 

Quarter

Ended

March 31,

2017

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

Net loss

 

$

11,280.98

 

$

20,536.90

 

 

 

 

 

 

 

Adjustments to reconcile net loss to net cash used in operating activities

 

 

5,305.34

 

 

(2,737.37)

 

 

 

 

 

 

 

NET CASH PROVIDED BY OPERATING ACTIVITIES

 

 

(5,975.64)

 

 

(23,274.27)

 

 

 

 

 

 

 

NET CASH PROVIDED BY INVESTING ACTIVITIES:

 

 

(5,000.00)

 

 

-

 

 

 

 

 

 

 

Loan from related party

 

 

10,683.00

 

 

10,250.00

 

 

 

-

 

 

 

NET CASH PROVIDED BY FINANCING ACTIVITIES

 

 

10,683.00

 

 

10,250.00

 

 

 

 

 

 

 

NET CHANGE IN CASH

 

 

(292.64)

 

 

(13,024.27)

 

 

 

 

 

 

 

Cash at beginning of period

 

 

3,762.16

 

 

(4,072.82)

 

 

 

 

 

 

 

Cash at end of year

 

$

3,469.52

 

$

(17,097.09)



















The accompanying notes are an integral part of these financial statements.



F-15




JETBLACK CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)



NOTE 1 - ORGANIZATION AND NATURE OF BUSINESS


History


The name of the issuer is Jetblack Corp. We were incorporated as Tortuga Mexican Imports Inc. on April 17, 2002 in the State of Nevada for the purpose of selling consumer products. Effective March 15, 2010, we changed our name to Jetblack Corp., by way of a merger with our wholly owned subsidiary, Jetblack Corp., which was formed solely for the purpose of effectuating the corporate reorganization and pursing new business in subsequent years.


On February 26, 2016 Barton Hollow, LLC, a stockholder of the Issuer, filed an Application for Appointment of Custodian pursuant to Section 78.347 of the Act in the District Court for Clark County, Nevada. Barton Hollow was subsequently appointed custodian of the Issuer by Order of the Court on April 5, 2016 (the “Order”). In accordance with the provisions of the Order, Barton Hollow thereafter moved to: (a) reinstate the Issuer with the State of Nevada; (b) provide for the election of interim officers and directors; and (c) call and hold a stockholder meeting.


Daniel A. Goldin was appointed CEO and Director on June 20, 2016. The former Custodian has since been discharged and full authority has been returned to the Board of Directors of Jetblack Corp. Mr. Goldin purchased the convertible note held by the former custodian, making Mr. Goldin the holder of the only convertible note on the books of Jetblack Corp at the time. Under the leadership of Mr. Goldin, Jetblack has initiated the entry of Jetblack Corp into the emerging markets of cannabis.


Jetblack Corp, is a company focused in the cannabis industry through its operating subsidiaries. Although the company focus is in cannabis, the company will not be pigeon holed to one sector, but will always search out emerging new markets, products, and services for growth. We have researched and identified areas of the cannabis industry that present opportunities for the launch of improved products and services. These opportunities will be described more extensively at our website: www.JetblackCorp.com once it is complete. Also on our twitter feed @jetblackcorp which gives the latest news and company updates.


The company is in the process of transferring an Oregon Marijuana Producer License to CenAviv LLC and an Oregon Marijuana Processor License to CenAviv LLC, Jetblacks’ wholly-owned subsidiary in Oregon. The company leases a location in Hillsboro, Oregon. The facility is 8,400 square feet and will require some buildout for cultivation and processing of cannabis. Currently Jetblack is searching for reasonable financing terms and partners for its projects.


Going Concern


The financial statements have been prepared assuming that the Company will continue as a going concern. As of March 31, 2019, the Company has yet to achieve profitable operations and is dependent on its ability to raise capital from stockholders or other sources to sustain operations and to ultimately achieve viable operations. The financial statements do not include any adjustments that might result from the outcome of these uncertainties. These factors raise substantial doubt about the Company’s ability to continue as a going concern.


The Company’s ability to continue in existence is dependent on the Company’s ability to develop the Company’s business plan, raise capital, and to achieve profitable operations. Since the Company does not anticipate achieving profitable operations and/or adequate cash flows in the near term, management will continue to pursue additional equity financing through private placements of the Company’s common stock.




F-16



NOTE 2 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Basis of Presentation


The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). They should be read in conjunction with the unaudited consolidated financial statements, including the notes thereto, as of and for the year ended December 31, 2018. The information furnished in this report reflects all adjustments (consisting of normal recurring adjustments), which are, in the opinion of management, necessary for a fair presentation of our financial position, results of operations and cash flows for each period presented. The results of operations for the three months ended March 31, 2019 are not necessarily indicative of the results for the year ending December 31, 2019 or for any future period.


Principles of Consolidation


The consolidated financial statements include the accounts of JETBLACK CORP, and all of its subsidiaries for the three months ended March 31, 2019.


Revenues


The company is still pre-revenue. Revenue in the future is anticipated to arise from technologies, intellectual property rights, goods, services related to the Cannabis Marijuana Industry, Urban Farming, and Future Farming Technologies. Revenue is recognized in accordance with ASC 605. As such, the Company identifies performance obligations and recognizes revenue over the period through which the Company satisfies these obligations. Any contracts that by nature cannot be broken down by specific performance criteria will recognize revenue on a straight line basis over the contractual term of the period of the contract.


Cash and Cash Equivalents


For purpose of the statements of cash flows, the Company considers cash and cash equivalents to include all stable, highly liquid investments with maturities of three months or less.


Convertible Instruments


The company has no convertible instruments outstanding.


Income Taxes


The company has a net loss for the period ending March 31, 2019. This loss has a 20 year carryover period. The company continually evaluates its tax positions, changes in tax laws, and new authoritative rulings for potential implications to its tax status.


Earnings (loss) Per Common Share


The Company reports earnings (loss) per share in accordance with ASC Topic 260-10, “Earnings per Share.” Basic earnings (loss) per share is computed by dividing income (loss) available to common shareholders by the weighted average number of common shares available. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Diluted earnings (loss) per share has not been presented as there are no dilutive securities.






F-17



Use of Estimates in the Preparation of Financial Statements


The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.


Fair Value Measurements


The Company’s financial instruments may consist of cash, prepaid expenses, inventory, investments, accounts payable, liabilities, notes payable, and advances from related parties. The estimated fair value of cash, prepaid expenses, inventory, investments, accounts payable, liabilities, notes payable and advances from related parties approximate their carrying amounts due to the short-term nature of these instruments.


Certain non-financial assets are measured at fair value on a nonrecurring basis. Accordingly, these assets are not measured and adjusted to fair value on an ongoing basis but are subject to periodic impairment tests.


Goodwill


The Company periodically reviews the carrying value of intangible assets not subject to amortization, including goodwill, to determine whether impairment may exist. Goodwill and certain intangible assets are assessed annually, or when certain triggering events occur, for impairment using fair value measurement techniques. These events could include a significant change in the business climate, legal factors, a decline in operating performance, competition, sale or disposition of a significant portion of the business, or other factors.


Recently Issued Accounting Pronouncements


Revenue Recognition


Revenue is recognized in accordance with ASC 605. As such, the Company identifies performance obligations and recognizes revenue over the period through which the Company satisfies these obligations. Any contracts that by nature cannot be broken down by specific performance criteria will recognize revenue on a straight line basis over the contractual term of the period of the contract.


NOTE 3 - INVESTMENTS, ACQUISITIONS AND GOODWILL


For investments that will be acquired with common stock, the Company will record its investments at the fair value of the common stock issued for the ownership interests being acquired.


Intangible Asset


The Company periodically reviews the carrying value of intangible assets not subject to amortization to determine whether impairment may exist. Intangible assets are assessed annually, or when certain triggering events occur, for impairment using fair value measurement techniques. As of March 31, 2019 the company determined no impairment was necessary.


Goodwill


The Company periodically reviews the carrying value of intangible assets not subject to amortization, including goodwill, to determine whether impairment may exist. Goodwill and certain intangible assets are assessed annually, or when certain triggering events occur, for impairment using fair value measurement techniques. These events could include a significant change in the business climate, legal factors, a decline in operating performance, competition, sale or disposition of a significant portion of the business, or other factors




F-18



NOTE 4 - CONVERTIBLE NOTES PAYABLE


Nil


NOTE 5 - DERIVATIVE LIABILITY


Derivative Liability- Debt


Nil


NOTE 6 - EARNINGS PER SHARE


The Company computes net loss per share in accordance with FASB ASC 260-10 “Earnings per Share”. Under the provisions of FASB ASC 260-10, basic net loss per share is computed by dividing the net loss available to common stockholders for the period by the weighted average number of shares of common stock outstanding during the period.


Diluted loss per share is computed using the weighted average number of shares and dilutive potential common shares arising from the conversion of preferred shares into common shares at the election of the holders thereof. Potentially dilutive common shares consist of employee stock options, warrants, and unissued restricted common stock, and are excluded from the diluted earnings per share computation in periods where the Company has incurred net losses. As of May 1, 2019, the company has no dilutive instruments outstanding.


For the three months ended March 31, 2019 and 2018, the Company’s net loss per share was $0.000018 and $0.0003330, based on the weighted average number of shares outstanding of 615,422,000 and 615,422,000, respectively.


NOTE 7 - STOCKHOLDERS’ DEFICIT


Articles of Incorporation


The Company’s Articles of Incorporation authorize it to issue up to One Billion Three Hundred and Fifty Million (1,350,000,000) shares, of which all shares are common stock, with a par value of one- tenth of one cent ($0.001) per share.


Common Shares


As of March 31, 2019, the Company’s authorized common stock is 1,350,000,000 shares at $0.001 par value, of which 615,422,000 shares were issued and outstanding as of March 31, 2019 and December 31, 2018, respectively.


Shares issued during the three months ended March 31, 2019


Nil.


NOTE 8 - RELATED PARTY TRANSACTIONS


Accrued Officer Compensation


Nil, other than the following;


The Chairman and CEO, has continued the practice of funding the company with capital for operating expenses and has opted to not accrue compensation. Starting July 1, 2019, Mr. Goldin’s compensation will begin to accrue. Ms. Olvera has also opted to not accrue compensation. Starting on July 1, 2019 Ms. Olvera’s compensation will begin to accrue.



F-19



NOTE 9 - COMMITMENTS


In May of 2019, the Company entered into a three-year employment agreement with the Company’s CEO, Daniel A. Goldin. The agreement calls for compensation of $360,000 per year (in addition to allowances) and allows for incentive bonuses as determined by the Company’s board of directors.


In May of 2019, the Company entered into a three-year employment agreement with the Company’s Administrative Assistant, Emilia S. Olvera. The agreement calls for compensation of $100,000 per year (in addition to allowances) and allows for incentive bonuses as determined by the Company’s board of directors.


Currently the Company leases co-working office space at 4949 SW Macadam Ave. 2nd Floor #84, Portland, OR 97239 at a monthly rent of $215. The lease term is a month to month basis.


Currently the Company leases warehouse space at 630 SW Walnut St. Unit 106 & 110, Hillsboro, Oregon, 97123. The leased area has a 5 year lease, 8,400 square feet, at a price of $12,200 monthly.


The company signed a 5 year lease in Hillsboro. This expense has not been accounted for on the balance sheet but will be calculated for the second quarter financials of 2019. As of May 1, the company owes back rent of around $40,000 for this location. The facility is a state-of-the-art Cannabis Industrial space, which the company is searching for funding to build out its 8,400 square foot in the park. Some perks of the facility is water-cooled HVAC and inline CO2. If the company is not successful at raising capital in the very near future, the company may be forced to default on our lease agreement. The company would be forced to find another location that is affordable or come to a suitable agreement with a landlord to work out a partnership or other type of arrangement. At the time, our current landlord has been extremely kind, generous, and understanding, allowing us more time to find financing. We cannot guarantee this will continue in the future.


NOTE 10 - INCOME TAXES


The Company has net operating losses (“NOLs”) as of March 31, 2019 of approximately $800,000 for federal tax purposes, which will expire in varying amounts through 2039. The Company may be able to utilize its NOLs to reduce future federal and state income tax liabilities. However, these NOLs are subject to various limitations under Internal Revenue Code (“IRC”) Section 382. IRC Section 382 limits the use of NOLs to the extent there has been an ownership change of more than 50 percentage points. In addition, the NOL carry-forwards are subject to examination by the taxing authority and could be adjusted or disallowed due to such exams. Although the Company has not undergone an IRC Section 382 analysis, it is possible that the utilization of the NOLs could be substantially limited. The Company has no tax provision for the three months ended March 31, 2019 or 2018 due to the net losses and full valuation allowances against net deferred tax assets.


NOTE 11 - REVENUE CLASSES


The company is pre-revenue.


NOTE 12 - SUBSEQUENT EVENTS


Other than the following agreements, the Company does not have any written agreements with any of its executive officers. In May 2019 the Company entered into a Verbal Employment Agreement, which will be turned into a written agreement hereafter . The verbal agreement provided that Mr. Goldin would serve as CEO and CFO of the Company for a term of three years at an annual salary of $360,000, and an incentive bonus as determined by the board of directors. In addition, during the term the Company shall provide: an automobile allowance of Five Hundred Dollars ($500) Dollars per month, and health care reimbursement of One Thousand Dollars ($1,000) per month. The agreement shall automatically be renewed for additional three-year periods unless either party has provided written termination of this Agreement at least 90 days prior to the expiration of such Term. If employment is terminated as a result of his death or Disability, the Company shall pay, his Base Salary and any accrued but unpaid Bonus and expense reimbursement amounts through the date of his Death or Disability and a lump sum payment equal to two years of Base Salary within 30 days of his Death or Disability.




F-20



In the event the Company does not have the cash flow to pay such amount within 30 days as set forth above, the Company may make such payments over 12 equal monthly installments. If employment is terminated by the Board of Directors of the Company for Cause, then the Company shall pay his Base Salary through the date of his termination and there shall be no further entitlement to any other compensation or benefits from the Company. If employment is terminated by the Company upon the occurrence of a Change of Control or within six (6) months thereafter, the Company (or its successor, as applicable) shall (i) continue to pay to his Base Salary for a period of thirty six (36) months following such termination, (ii) pay any accrued and any earned but unpaid Bonus, (iv) pay the Executive the Bonus he would have earned had he remained with the Company for six (6) months from the date which such termination occurs, (iv) pay expense reimbursement amounts through the date of termination.


While the Company does not currently have a stock option plan, if one is created in the future and options are granted to Mr. Goldin, all such Stock Options that have not vested as of the date of such termination shall be accelerated and deemed to have vested as of such termination date and shall remain exercisable for a period as outlined in the Company’s Stock Option program, and (v) Mr. Goldin shall be entitled to receive equivalent share issuances as any executive officer, management or director of the Company receives for a period of 36 months thereafter. If employment is terminated by Mr. Goldin for Good Reason, or if this Agreement is not renewed, then the Company shall (i) pay a single lump sum cash payment within five business days of such termination equal to 17 times the then monthly Base Salary in effect regardless of when such termination occurs (provided, that in the event the Company does not have the cash flow to pay such amount within five business days as set forth above, the Company may make such payments over 12 equal monthly installments), and (ii) pay Executive the Bonus he would have earned had he remained with the Company for six (6) months from the date which such termination occurs, and (iii) pay Executive any expense reimbursement amounts owed, and payment for any unused vacation days, through the date of termination. All Stock Options that are scheduled to vest in the contract year of the date of such termination shall be accelerated and deemed to have vested as of the termination date. All Stock Options that have not vested (or deemed to have vested pursuant to the preceding sentence) shall be deemed expired, null and void. Any Stock Options that have vested as of the date of termination shall remain exercisable for a period as outlined in the Company’s Stock Option program.


In May 2018 the Company entered into a Verbal Employment Agreement, which will be turned into a written agreement there after. The verbal agreement provided that Emilia S. Olvera would serve as Administrative Assistant of the Company for a term of three years at an annual salary of $100,000, and an incentive bonus as determined by the board of directors. In addition, during the term the Company shall provide: an automobile allowance of Five Hundred Dollars ($500) Dollars per month, and health care reimbursement of One Thousand Dollars ($1,000) per month. The agreement shall automatically be renewed for additional three-year periods unless either party has provided written termination of this Agreement at least 90 days prior to the expiration of such Term. If employment is terminated as a result of her death or Disability, the Company shall pay, her Base Salary and any accrued but unpaid Bonus and expense reimbursement amounts through the date of her Death or Disability and a lump sum payment equal to two years of Base Salary (at the time her Death or Disability occurs) within 30 days of her Death or Disability. In the event the Company does not have the cash flow to pay such amount within 30 days as set forth above, the Company may make such payments over 12 equal monthly installments. If employment is terminated by the Board of Directors of the Company for Cause, then the Company shall pay her Base Salary through the date of her termination and there shall be no further entitlement to any other compensation or benefits from the Company. If employment is terminated by the Company (or its successor) upon the occurrence of a Change of Control or within six (6) months thereafter, the Company (or its successor, as applicable) shall (i) continue to pay to her Base Salary for a period of thirty six (36) months following such termination, (ii) pay any accrued and any earned but unpaid Bonus, (iv) pay the Bonus she would have earned had she remained with the Company for six (6) months from the date which such termination occurs, (iv) pay expense reimbursement amounts through the date of termination.


While the Company does not currently have a stock option plan, if one is created in the future and options are granted to Ms. Olvera, all such Stock Options that have not vested as of the date of such termination shall be accelerated and deemed to have vested as of such termination date and shall remain exercisable for a period as outlined in the Company’s Stock Option program, and (v) Emilia S. Olvera shall be entitled to receive equivalent share issuances as any executive of the Company receives for a period of 36 months thereafter.




F-21



If employment is terminated by Ms. Olvera for Good Reason, or if this Agreement is not renewed, then the Company shall (i) pay a single lump sum cash payment within five business days of such termination equal to 17 times the then monthly Base Salary in effect regardless of when such termination occurs (provided, that in the event the Company does not have the cash flow to pay such amount within five business days as set forth above, the Company may make such payments over 12 equal monthly installments), and (ii) pay the Bonus she would have earned had she remained with the Company for six (6) months from the date which such termination occurs, and (iii) pay any expense reimbursement amounts owed, and payment for any unused vacation days, through the date of termination. All Stock Options that are scheduled to vest in the contract year of the date of such termination shall be accelerated and deemed to have vested as of the termination date. All Stock Options that have not vested (or deemed to have vested pursuant to the preceding sentence) shall be deemed expired, null and void. Any Stock Options that have vested as of the date of termination shall remain exercisable for a period as outlined in the Company’s Stock Option program.


The Company has entered into a verbal service agreement which will be turned into a written service agreement there-after. DG Ventures Inc., an Oregon Corporation, who the sole shareholder is Daniel A. Goldin,  who is also the CEO CFO of Jetblack Corp. DG Ventures Inc., under agreement, will serve as Jetblack Corp’s Investor Relations Service Provider for a period of one year beginning on July 1, 2019 ending July 1, 2020. DG Ventures Inc. will begin to receive $5,000 monthly compensation on July 1, 2019. Compensation is accruable. DG Ventures, Inc. will help disseminate, redistribute news and information, about Jetblack Corp’s goals and efforts. DG Ventures,  Inc. will also help with strategy and management of the company IR services. The agreement is automatically renewable, if a new service provider is not chosen by the annual shareholder meeting, and unless written notice is given by either party. DG Ventures, Inc. has been chosen as the IR service provider to ensure the dissemination and distribution of information about the company efforts is accurate and ethical.


Mr. Goldin, in the second quarter of 2019, will conduct the following private transfers of stock in a non-issuer transaction:


·

Daniel A. Goldin will transfer to Emilia S. Olvera 60,000,000 shares of common stock, no effect on JTBK stock structure.

·

Mr. Goldin will transfer to Elena Goldin 30,000,000 shares of common stock, no effect on the stock structure of Jetblack Corp. or dilution.

·

Daniel A. Goldin will transfer to Wally D. Goldin 30,000,000 shares of common stock, no dilutive effect on Jetblack Corp.

·

Daniel A. Goldin will transfer to DG Ventures, Inc. 90,000,000 shares of common stock, no dilutive effect on Jetblack Corp.


Breakdown provided below of all shareholders to potentially hold over 5% if the above is executed:


Name

Age

Shares %

Common Stock

Daniel A. Goldin (1)

42

55.24%

338,000,000

Emilia S. Olvera (2)

29

9.7%

60,000,000

Wally D. Goldin (3)

81

4.8%

30,000,000

Elena Goldin (4)

81

4.8%

30,000,000

DG Ventures, Inc. (5)

17

14.5%

90,000,000

_______________

* All parties above can be considered related parties and as a group will hold 89.04% of the outstanding stock

(1)

Daniel A. Goldin is CEO CFO and Chairman

(2)

Emilia S. Olvera, Administrative Assistant, related party to Daniel A. Goldin

(3)

Wally D. Goldin is a related party to Daniel A. Goldin

(4)

Elena Goldin is a related party to Daniel A. Goldin

(5)

Sole Shareholder is Daniel A. Goldin


On May 1st, 2019, The Board of Directors and Majority Shareholders voted and approved the Amended Articles of Incorporation. The amended articles fixes the authorized share count at One Billion Three Hundred Fifty Million (1,350,000,000) shares of common stock and may not be increased in the future.




F-22



SIGNATURES

 

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.


Date: May 3, 2019

 

Jetblack Corp

 

 

 

(Registrant)

 

 

 

 

 

 

By:

/s/Daniel A. Goldin

 

 

 

Daniel A. Goldin

 

 

 

Chairman & CEO

 



































29



Exhibit Index


Exhibit No.

Description

 

 

3.1

Amended Articles of Incorporation

3.2

Bylaws

10.1

Revolving Demand Note

10.2

Hillsboro Lease Agreement

10.3

Processor Purchase Agreement

10.4

Producer Purchase Agreement



































30


EXHIBIT 3.1


AMENDED AND RESTATED

ARTICLES OF INCORPORATION

OF

JETBLACK CORP.


ARTICLE I


The name of the corporation shall be Jetblack Corp. (the "Corporation").


ARTICLE II


The period of its duration shall be perpetual.


ARTICLE III


The Corporation is organized purpose of conducting any lawful business for which a corporation may be organized under the laws of the State of Nevada.


ARTICLE IV


The aggregate number of shares that the Corporation will· have authority to issue is One Billion Three Hundred Fifty Million (1,350,000.000) shares will be Common Stock, with a par value of $0.001 per share. The aggregate number of shares is FIXED at One Billion Three Hundred Fifty Million (1,350,000,000) shares of common stock and may NOT be increased at any time in the future. Shares of common stock may be issued, without shareholder action, from time to time in one or more series as may from time to time be determined by the board of directors. The board of directors of this Corporation is hereby expressly granted authority, without shareholder action, and within the limits set forth in the Nevada Revised Statute, to:


(i)

designate in whole or in part, the powers, preferences, limitations, and relative rights, of any class of shares before the issuance of any shares of that class;


(ii)

create one or more series within a class of shares, fix the number of shares of each such series, and designate, in whole or part, the powers, preferences, limitations, and relative rights of the series, all before the issuance of any shares of that series;


(iii)

alter or revoke the powers, preferences, limitations, and relative rights granted to or imposed-upon any wholly unissued class of shares or any wholly unissued series of any class of shares;


(iv)

increase or decrease the number of shares constituting any series, the number of shares of which was originally fixed by the board of directors, either before or after the issuance of shares of the series; provided that, the number may not be decreased below the number of shares of the series then outstanding, or increased above the total number of authorized shares of the applicable class of shares available for designation as a part of the series;





(v)

determine the dividend rate on the shares of any class of shares or series of shares, whether dividends will be cumulative, and if so, from which date(s), and the relative rights of priority, if any, of payment of dividends on shares of that class of shares or series of shares;


(vi)

determine whether that class of shares or series of shares will have voting rights; in addition to the voting rights provided by law, and, if so, the terms of such voting rights;


(vii)

determine whether that class of shares or series of shares will have conversion privileges and, if so, the terms and conditions of such conversion, including provision for adjustment of the conversion rate in such events as the board of directors determines;


(viii)

determine whether or not the shares of that class of shares or series of shares will be redeemable and, if so, the terms and conditions of such redemption, including the date or date upon or after which they are redeemable, and the amount per share payable in case of redemption, which amount may vary under different conditions and at different redemption dates;


(ix)

determine whether that class of shares or series of shares will have a sinking fund for the redemption or purchase of shares of that class of shares or series of shares and, if so, the terms and amount of such sinking fund;


(x)

determine the rights of the shares of that class of shares or series of shares in the event of voluntary or involuntary liquidation, dissolution or winding up of the Corporation, and the relative rights of priority, if any, of payment of shares of that class of shares or series of shares; and


(xi)

determine any other relative rights, preferences and limitations of that class of shares or series of shares.


The allocation between the classes, or among the series of each class, of unlimited voting rights and the right to receive the net assets of the Corporation upon dissolution, shall be as designated by the board of directors. All rights accruing to the outstanding shares of the Corporation not expressly provided for to the contrary herein or in the Corporation’s bylaws or in any amendment hereto shall be vested in the common stock. Accordingly, unless and until otherwise designated by the board of directors of the Corporation, and subject to any superior rights as so designated, the Common Stock shall have unlimited voting rights and be entitled to receive the net assets of the Corporation upon dissolution.








2




ARTICLE V


Provisions for the regulation of the internal affairs of the Corporation will be contained in its Bylaws as adopted by the Board of Directors. The number of Directors of the Corporation shall be fixed by its Bylaws.


ARTICLE VI


The Corporation shall indemnify any person against expenses including without limitation, attorneys' fees, judgments, fines and amounts paid in settlement, actually and reasonably incurred by reason of the tact that he or she is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise. In all circumstances in which and to the extent that, such indemnification is permitted and provided for by the laws of the State of Nevada then in effect.


ARTICLE V


To the fullest extent permitted by Chapter 78 of the Nevada Revised Statutes, as the same exists or may hereafter be amended, an officer or director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages.


ARTICLE VIII


The Corporation expressly elects not to be governed by or be subject to the provisions of actions 78J78 through 78.3793 of the Nevada Revised Statutes or any similar or successor statutes adopted by any state which may be deemed to apply to the Corporation from time to time.


SIGNATURE


The undersigned hereby certifies on behalf of JETBLACK CORP, a corporation duly organized and existing under the laws of the State of Nevada (the “ Corporation ”) that:


1.

The undersigned is the President and Secretary, respectively, of the Corporation.


2.

The foregoing Amended and Restated Articles of Incorporation have been duly approved by a majority vote of the Board of Directors.


3.

The foregoing Amended and Restated Articles of Incorporation has been duly approved by the required vote of the shareholders in accordance with Nevada Corporations Code.


I further declare under penalty of perjury under the laws of the State of Nevada that the matters set forth in this certificate are true and correct of our own knowledge.





3




IN WITNESS WHEREOF, the undersigned officers have signed this Amendment and Restated Articles of Incorporation this 1 st day of May, 2019.



/s/ Daniel A. Goldin

By: Chairman, CFO, CEO of Jetblack Corp.

Name: Daniel A. Goldin



















4


EXHIBIT 3.2


RESTATED BYLAWS OF JETBLACK CORPORATION


A NEVADA CORPORATION


ARTICLE I

OFFICES


Section 1. REGISTERED OFFICE. The registered office of Jetblack Corporation (the " Corporation ") in the State of Nevada is 401 Ryland St. Suite 200-A Reno, Nevada. The name of its registered agent at such address is Registered Agents Inc. The registered office and/or registered agent of the Corporation may be changed from time to time by action of the Board of Directors of the Corporation (the " Board of Directors " or " Board ," and each member a " Director ").


Section 2. OTHER OFFICES. The Corporation may also have offices at such other places, both within and without the State of Nevada, as the Board of Directors may from time to time determine or the business of the Corporation may require.


ARTICLE II

MEETINGS OF STOCKHOLDERS


Section 1. PLACE AND TIME OF MEETINGS. An annual meeting of the stockholders shall be held each year for the purpose of electing Directors and conducting such other proper business as may come before the meeting. The date, time and place of the annual meeting may be determined by resolution of the Board of Directors or as set by the President (as defined below) of the Corporation. If the election of Directors is not held on the date fixed as provided herein and by a resolution for any annual meeting of the stockholders, or any adjournment thereof, the Board of Directors shall cause the election to be held at a special meeting of the stockholders as soon thereafter as may conveniently be held.


Section 2. SPECIAL MEETINGS. Special meetings of stockholders may be called for any purpose (including, without limitation, the filling of Board vacancies and newly created directorships), and may be held at such time and place, within or without the State of Nevada, as shall be stated in a notice of meeting or in a duly executed waiver of notice thereof. Such meetings may be called at any time by two or more members of the Board of Directors or the President, and shall be called by the President upon the written request of holders of shares entitled to cast not less than 30% of the outstanding shares of any series or class of the Corporation's capital stock.


Section 3. PLACE OF MEETINGS. The Board of Directors may designate any place, either within or without the State of Nevada, as the place of meeting for any annual meeting or for any special meeting called by the Board of Directors. If no designation is made, or if a special meeting be otherwise called, the place of meeting shall be the principal executive office of the Corporation.


Section 4. NOTICE. Whenever stockholders are required or permitted to take action at a meeting, written or printed notice stating the place, date, time, and, in the case of special meetings, the purpose or purposes, of such meeting shall be given to each stockholder entitled to vote at such




meeting not less than 10 nor more than 60 days before the date of the meeting. All such notices shall be delivered, either personally or by mail, by or at the direction of the Board of Directors, the President or the Secretary (as defined below), and if mailed, such notice shall be deemed to be delivered when deposited in the United States mail, postage prepaid, addressed to the stockholder at his, her or its address as the same appears on the records of the Corporation. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends for the express purpose of objecting to the transaction of any business at the beginning of the meeting because the meeting is not lawfully called or convened.


Section 5. STOCKHOLDERS LIST. The officer having charge of the stock ledger of the Corporation shall make, at least 10 days before every meeting of the stockholders, a complete list of the stockholders entitled to vote at such meeting arranged in alphabetical order, showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least 10 days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.


Section 6. QUORUM. Except as otherwise provided by applicable law or by the Articles of Incorporation, a majority of the outstanding shares of the Corporation entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of stockholders. If less than a majority of the outstanding shares are represented at a meeting, a majority of the shares so represented may adjourn the meeting from time to time in accordance with Section 7 of this Article II, until a quorum shall be present or represented.


Section 7. ADJOURNED MEETINGS. When a meeting is adjourned to another time and place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the Corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than 30 days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.


Section 8. VOTE REQUIRED. When a quorum is present, the affirmative vote of a majority of the shares present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders, unless the question is one upon which by express provision of an applicable law or of the Articles of Incorporation a different vote is required, in which case such express provision shall govern and control the decision of such question. If applicable, where a separate vote by class is required, the affirmative vote of the majority of shares of such class present in person or represented by proxy at the meeting shall be the act of such class.


Section 9. VOTING RIGHTS. Except as otherwise provided by the General Corporation Law of the State of Nevada or by the Articles of Incorporation of the Corporation or any amendments thereto and subject to Section 3 of Article VI hereof, every stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of common stock held by such stockholder.




2



Section 10. PROXIES. Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for him, her or it by proxy. Every proxy must be signed by the stockholder granting the proxy or by his, her or its attorney-in-fact. No proxy shall be voted or acted upon after 14 months from its date. A duly executed proxy shall not be irrevocable and if it states that it is irrevocable, the company will not recognize it after 14 months time. A proxy may not be made irrevocable regardless of whether the interest with which it is coupled is an interest in the stock itself or an interest in the Corporation generally. Irrevocable proxies are not recognized by the company after 14 months and not are not allowed indefintiely.


Section 11. ACTION BY WRITTEN CONSENT. Unless otherwise provided in the Articles of Incorporation, any action required to be taken at any annual or special meeting of stockholders of the Corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken and bearing the dates of signature of the stockholders who signed the consent or consents, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the Corporation by delivery to its registered office in the state of Nevada, or the Corporation's principal place of business, or an officer or agent of the Corporation having custody of the book or books in which proceedings of meetings of the stockholders are recorded. Delivery made to the Corporation's registered office shall be by hand or by certified or registered mail, return receipt requested provided, however, that no consent or consents delivered by certified or registered mail shall be deemed delivered until such consent or consents are actually received at the registered office. All consents properly delivered in accordance with this section shall be deemed to be recorded when so delivered. No written consent shall be effective to take the corporate action referred to therein unless, within 60 days of the earliest dated consent delivered to the Corporation as required by this section, written consents signed by the holders of a sufficient number of shares to take such corporate action are so recorded. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. Any action taken pursuant to such written consent or consents of the stockholders shall have the same force and effect as if taken by the stockholders at a meeting thereof.


ARTICLE III

DIRECTORS


Section 1. GENERAL POWERS. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors.


Section 2. NUMBER, QUALIFICATION, ELECTION AND TERM OF OFFICE. The number of Directors that constitute the first Board of Directors shall be no less than one and no more than five. Thereafter, the number of Directors shall be established from time to time by resolution of the Board. A Director shall be a natural person and at least 18 years of age. A Director need not be a resident of Nevada or a stockholder of the Corporation. The Directors shall be elected at each annual meeting of the stockholders, except as provided in Section 4 of this Article III. The Directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the annual meeting and entitled to vote in the election of Directors. Each Director elected shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as hereinafter provided.



3



Section 3. REMOVAL AND RESIGNATION. Any Director or the entire Board of Directors may be removed at any time, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of Directors. Whenever the holders of any class or series are entitled to elect one or more Directors by the provisions of the Corporation's Articles of Incorporation, the provisions of this section shall apply, in respect to the removal without cause or a Director or Directors so elected, to the vote of the holders of the outstanding shares of that class or series and not to the vote of the outstanding shares as a whole. Any Director may resign at any time upon written notice to the Corporation.


Section 4. VACANCIES. Except as otherwise provided by the Articles of Incorporation of the Corporation or any amendments thereto, vacancies and newly created directorships resulting from any increase in the authorized number of Directors may be filled by a majority vote of the Directors then in office. Each Director so chosen shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as herein provided.


Section 5. ANNUAL MEETINGS. The annual meeting of each newly elected Board of Directors shall be held without other notice than this Bylaw immediately after, and at the same place as, the annual meeting of stockholders.


Section 6. OTHER MEETINGS AND NOTICE. Regular meetings, other than the annual meeting, of the Board of Directors may be held without notice at such time and at such place as shall from time to time be determined by resolution of the Board. Special meetings of the Board of Directors may be called by or at the request of the President on at least 24 hours notice to each Director, either personally, by telephone, by mail, or by telegraph; in like manner and on like notice, the President must call a special meeting on the written request of at least a majority of the Directors.


Section 7. QUORUM, REQUIRED VOTE AND ADJOURNMENT. A majority of the total number of Directors shall constitute a quorum for the transaction of business. The vote of a majority of Directors present at a meeting at which a quorum is present shall be the act of the Board of Directors. If a quorum shall not be present at any meeting of the Board of Directors, the Directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.


Section 8. COMMITTEES. The Board of Directors may, by resolution passed by a majority of the whole Board, designate one or more committees, each committee to consist of one or more of the Directors of the Corporation, which to the extent provided in such resolution or these Bylaws shall have and may exercise the powers of the Board of Directors in the management and affairs of the Corporation except as otherwise limited by law. The Board of Directors may designate one or more Directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board of Directors. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.






4



Section 9. COMMITTEE RULES. Each committee of the Board of Directors may fix its own rules of procedure and shall hold its meetings as provided by such rules, except as may otherwise be provided by a resolution of the Board of Directors designating such committee. Unless otherwise provided in such a resolution, the presence of at least a majority of the members of the committee shall be necessary to constitute a quorum. In the event that a member and that member's alternate, if alternates are designated by the Board of Directors as provided in Section 8 of this Article III, of such committee is or are absent or disqualified, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in place of any such absent or disqualified member.


Section 10. COMMUNICATIONS EQUIPMENT. Members of the Board of Directors or any committee thereof may participate in and act at any meeting of the Board or such committee through the use of a conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in the meeting pursuant to this section shall constitute presence in person at the meeting.


Section 11. WAIVER OF NOTICE AND PRESUMPTION OF ASSENT. Any member of the Board of Directors or any committee thereof who is present at a meeting shall beconclusively presumed to have waived notice of such meeting except when such member attends for the express purpose of objecting to the transaction of any business at the beginning of the meeting because the meeting is not lawfully called or convened. Such member shall be conclusively presumed to have assented to any action taken, unless his or her dissent shall be entered in the minutes of the meeting or unless his or her written dissent to such action shall be filed with the person acting as the Secretary of the meeting before the adjournment thereof or shall be forwarded by registered mail to the Secretary of the Corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to any member who voted in favor of such action.


Section 12. ACTION BY WRITTEN CONSENT. Unless otherwise restricted by the Articles of Incorporation, any action required or permitted to be taken at any meeting of the Board of Directors, or of any committee thereof, may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board or committee.


ARTICLE IV OFFICERS


Section 1. NUMBER. The officers of the Corporation shall be elected by the Board of Directors and shall consist of a Chairman, if any is elected, a Chief Executive Officer, if any is elected, a President, a Secretary, a Treasurer, and such other officers and assistant officers asmay be deemed necessary or desirable by the Board of Directors (all as defined below). Any number of offices may be held by the same person. In its discretion, the Board of Directors may choose not to fill any office for any period as it may deem advisable.




5



Section 2. ELECTION AND TERM OF OFFICE. The officers of the Corporation shall be elected annually by the Board of Directors at its first meeting held after each annual meeting of stockholders or as soon thereafter as may be conveniently held. The President shall appoint other officers to serve for such terms as he or she deems desirable. Vacancies may be filled or new offices created and filled at any meeting of the Board of Directors. Each officer shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as hereinafter provided.


Section 3. REMOVAL. Any officer or agent elected by the Board of Directors may be removed by the Board of Directors whenever in its judgment the best interests of the Corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed.


Section 4. VACANCIES. Any vacancy occurring in any office because of death, resignation, removal, disqualification or otherwise, may be filled by the Board of Directors for the unexpired portion of the term by the Board of Directors then in office.


Section 5. COMPENSATION. Compensation of all officers shall be fixed by the Board of Directors, and no officer shall be prevented from receiving such compensation by virtue of his or her also being a Directors of the Corporation.


Section 6. THE CHAIRMAN OF THE BOARD. The "Chairman of the Board," if one shall have been elected, shall be a member of the Board of Directors, an officer of the Corporation, and, if present, shall preside at each meeting of the Board of Directors or shareholders. The Chairman of the Board shall, in the absence or disability of the President, act with all of the powers and be subject to all the restrictions of the President. He shall advise the President, and in the President's absence, other officers of the Corporation, and shall perform such other duties as may from time to time be assigned to him by the Board of Directors.


Section 7. THE CHIEF EXECUTIVE OFFICER. The "Chief Executive Officer," if any, shall be the chief executive officer of the Corporation. In the absence of the Chairman of the Board or if a Chairman of the Board shall have not been elected, the Chief Executive Officer shall preside at all meetings of the stockholders and Board of Directors at which he or she is present. Subject to the powers of the Board of Directors, the Chief Executive Officer shall have general charge of the business, affairs and property of the Corporation, and control over its officers, agents and employees, and shall see that all orders and resolutions of the Board of Directors are carried into effect. The Chief Executive Officer shall have such other powers and perform such other duties as may be prescribed by the Board of Directors or as may be provided in these Bylaws.





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Section 8. THE PRESIDENT. The "President" shall be the president of the Corporation. In the absence of the Chairman of the Board and the Chief Executive Officer, or if a Chairman of the Board and Chief Executive Officer shall not have been elected, the President shall preside at  all meetings of the stockholders and Board of Directors at which he or she is present. Subject to the powers of the Board of Directors, the President shall have general charge of the business, affairs and property of the Corporation, and control over its officers, agents and employees, and shall see that all orders and resolutions of the Board of Directors are carried into effect. The President shall have such other powers and perform such other duties as may be prescribed by the Board of Directors or as may be provided in these Bylaws.


Section 9. VICE-PRESIDENTS. The "Vice-President," if any, or if there shall be more than one, the "Vice-Presidents" in the order determined by the Board of Directors shall, in the absence or disability of the President, act with all of the powers and be subject to all the restrictions of the President. The Vice-Presidents shall also perform such other duties and have such other powers as the Board of Directors, the President or these Bylaws may, from time to time, prescribe.


Section 10. THE SECRETARY AND ASSISTANT SECRETARIES. The "Secretary" shall attend all meetings of the Board of Directors, all meetings of the committees thereof and all meetings of the stockholders and record all the proceedings of the meetings in a book or books to be kept for that purpose. Under the President's supervision, the Secretary shall give, or cause to be given, all notices required to be given by these Bylaws or by law; shall have such powers and perform such duties as the Board of Directors, the President or these Bylaws may, from time to time, prescribe; and shall have custody of the corporate seal of the Corporation. The Secretary, or an "Assistant Secretary," shall have authority to affix the corporate seal to any instrument requiring it and when so affixed, it may be attested by his or her signature or by the signature of such Assistant Secretary. The Board of Directors may give general authority to any other officer to affix the seal of the Corporation and to attest the affixing by his or her signature. The Assistant Secretary, or if there be more than one, the "Assistant Secretaries" in the order determined by the Board of Directors, shall, in the absence or disability of the Secretary, perform the duties and exercise the powers of the Secretary and shall perform such other duties and have such other powers as the Board of Directors, the President, or Secretary may, from time to time, prescribe.


Section 11. THE TREASURER AND ASSISTANT TREASURER. The "Treasurer" shall have custody of the corporate funds and securities; shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation; shall deposit all monies and other valuable effects in the name and to the credit of the Corporation as may be ordered by the Board of Directors; shall cause the funds of the Corporation to be disbursed when such disbursements have been duly authorized, taking proper vouchers for such disbursements; shall render to the President and the Board of Directors, at its regular meeting or when the Board of Directors so requires, an account of the Corporation; and shall have such powers and perform such duties as the Board of Directors, the President or these Bylaws may, from



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time to time, prescribe. If required by the Board of Directors, the Treasurer shall give the Corporation a bond (which shall be rendered every six years) in such sums and with such surety or sureties as shall be satisfactory to theBoard of Directors for the faithful performance of the duties of the office of Treasurer and for the restoration to the Corporation, in case of death, resignation, retirement, or removal from office, of all books, papers, vouchers, money, and other property of whatever kind in the possession or under the control of the Treasurer belonging to the Corporation. The "Assistant Treasurer," or if there shall be more than one, the "Assistant Treasurers" in the order determined by the Board of Directors, shall in the absence or disability of the Treasurer, perform the duties and exercise  the powers of the Treasurer. The Assistant Treasurers shall perform such other duties and have such other powers as the Board of Directors, the President or Treasurer may, from time to time, prescribe.


Section 12. OTHER OFFICERS, ASSISTANT OFFICERS AND AGENTS. Officers, assistant officers and agents, if any, other than those whose duties are provided for in these Bylaws, shall have such authority and perform such duties as may from time to time be prescribed by resolution of the Board of Directors.


Section 13. ABSENCE OR DISABILITY OF OFFICERS. In the case of the absence or disability of any officer of the Corporation and of any person hereby authorized to act in such officer's place during such officer's absence or disability, the Board of Directors may by resolution delegate the powers and duties of such officer to any other officer or to any Director, or to any other person whom it may select.


ARTICLE V INDEMNIFICATION OF OFFICERS, DIRECTORS AND OTHERS


Section 1. NATURE OF INDEMNITY. Each person who was or is made a party or is threatened to be made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a " proceeding "), by reason of the fact thathe or a person of whom he is the legal representative, is or was a Director or officer, of the Corporation or is or was serving at the request of the Corporation as a Director, officer, employee, fiduciary, or agent of another Corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such proceeding is alleged action in an official capacity as a Director, officer, employee, fiduciary or agent or in any other capacity while serving as a Director, officer, employee, fiduciary or agent, shall be indemnified and held harmless by the Corporation to the fullest extent which it is empowered to do so by the General Corporation Law of the State of Nevada, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment) against all expense, liability and loss (including attorneys' fees actually and reasonably incurred by such person in connection with such proceeding and such indemnification shall inure to the benefit of his or her heirs, executors and administrators; provided, however, that, except as provided in Section 2 of this Article V, the Corporation shall indemnify any such person seeking indemnification in connection with a proceeding initiated by such person only if such proceeding was authorized by the Board of Directors of the Corporation.


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The right to indemnification conferred in this Article V shall be a contract right and, subject to Sections 2 and 5 hereof, shall include the right to be paid by the Corporation the expenses incurred in defending any such proceeding in advance of its final disposition. The Corporation may, by action of its Board of Directors, provide indemnification to employees and agents of the Corporation with the same scope and effect as the foregoing indemnification of Directors and officers.


Section 2. PROCEDURE FOR INDEMNIFICATION OF DIRECTORS AND  OFFICERS. Any indemnification of a Director or officer of the Corporation under Section 1 of this Article  V or advance of expenses under Section 5 of this Article V shall be made promptly, and in any event within 30 days, upon the written request of the Director or officer. If a determination by the Corporation that the Director or officer is entitled to indemnification pursuant to this Article V, and the Corporation fails to respond within 60 days to a written request for indemnity, the Corporation shall be deemed to have approved the request. If the Corporation denies a written request for indemnification or advancing of expenses, in whole or in part, or if payment in full pursuant to such request is not made within 30 days, the right to indemnification or advances as granted by this Article V shall be enforceable by the Director or officer in any court of competent jurisdiction. Such person's costs and expenses incurred in connection with successfully establishing his or her right to indemnification, in whole or in part, in any such action shall also be indemnified by the Corporation. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any, has been tendered to the Corporation) that the claimant has not met the standards of conduct which make it permissible under the General Corporation Law of the State of Nevada for the Corporation to indemnify the claimant for the amount claimed, but the burden of such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the General Corporation Law of the State of Nevada, nor an actual determination by the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct.


Section 3. NONEXCLUSIVITY OF ARTICLE V. The rights to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Article V shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of the Articles of Incorporation, Bylaws, agreement, vote of stockholders or disinterested Directors or otherwise.


Section 4. INSURANCE. The Corporation may purchase and maintain insurance on its own behalf and on behalf of any person who is or was a Director, officer, employee, fiduciary, or agent of the Corporation or was serving at the request of the Corporation as a Director, officer, employee or agent of another Corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him or her and incurred by him or her in any such capacity, whether or not the Corporation would have the power to indemnify such person against such liability under this Article V.



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Section 5. EXPENSES. Expenses incurred by any person described in Section 1 of this Article V in defending a proceeding shall be paid by the Corporation in advance of such proceeding's final disposition unless otherwise determined by the Board of Directors in the specific case upon receipt of an undertaking by or on behalf of the Director or officer to repay such amount if it shall ultimately be determined that he or she is not entitled to be indemnified by the Corporation. Such expenses incurred by other employees and agents may be so paid upon such terms and conditions, if any, as the Board of Directors deems appropriate.


Section 6. EMPLOYEES AND AGENTS. Persons who are not covered by the foregoing provisions of this Article V and who are or were employees or agents of the Corporation, or who are or were serving at the request of the Corporation as employees or agents of another Corporation, partnership, joint venture, trust or other enterprise, may be indemnified to the extent authorized at any time or from time to time by the Board of Directors.


Section 7. CONTRACT RIGHTS. The provisions of this Article V shall be deemed to be a contract right between the Corporation and each Director or officer who serves in any such capacity at any time while this Article V and the relevant provisions of the General Corporation Law of the State of Nevada or other applicable law are in effect, and any repeal or modification of this Article V or any such law shall not affect any rights or obligations then existing with respect to any state of facts or proceeding then existing.


Section 8. MERGER OR CONSOLIDATION. For purposes of this Article V, references to " the Corporation " shall include, in addition to the resulting Corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its Directors, officers, and employees or agents, so that any person who is or was a Director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a Director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this Article V with respect to the resulting or surviving corporation as he or she would have with respect to such constituent corporation if its separate existence had continued.


ARTICLE VI CERTIFICATES OF STOCK


Section 1. FORM. Every holder of stock in the Corporation shall be entitled to have a certificate, signed by, or in the name of the Corporation by the Chairman of the Board, the President or a Vice-President and the Secretary or an Assistant Secretary of the Corporation, certifying the number of shares owned by such holder in the Corporation. If such a certificate is countersigned (1) by a transfer agent or an assistant transfer agent other than the Corporation or its employee or (2) by a registrar, other than the Corporation or its employee, the signature of any such Chairman of the Board, President, Vice-President, Secretary, or Assistant Secretary may be facsimiles. In case any officer or officers who have signed, or whose facsimile signature or signatures have been used on, any such certificate or certificates shall cease to be such officer or officers of the Corporation whether because of death, resignation or otherwise before such


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certificate or certificates have been delivered by the Corporation, such certificate or certificates may nevertheless be issued and delivered as though the person or persons who signed such certificate or certificates or whose facsimile signature or signatures have been used thereon had not ceased to be such officer or officers of the Corporation. All certificates for shares shall be consecutively numbered or otherwise identified. The name of the person to whom the shares represented thereby are issued, with the number of shares and date of issue, shall be entered on the books of the Corporation. Shares of stock of the Corporation shall only be transferred on the books of the Corporation by the holder of record thereof or by such holder's attorney duly authorized in writing, upon surrender to the Corporation of the certificate or certificates for such shares endorsed by the appropriate person or persons, with such evidence of the authenticity of such endorsement, transfer, authorization, and other matters as the Corporation may reasonably require, and accompanied by all necessary stock transfer stamps. In that event, it shall be the duty of the Corporation to issue a new certificate to the person entitled thereto, cancel the old certificate or certificates, and record the transaction on its books. The Board of Directors may appoint a bank or trust company organized under the laws of the United States or any state thereof to act as its transfer agent or registrar, or both in connection with the transfer of any class or series of securities of the Corporation.


Section 2. LOST CERTIFICATES. The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates previously issued by the Corporation alleged to have been lost, stolen, or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen, or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen, or destroyed certificate or certificates, or his or her legal representative, to give the Corporation a bond sufficient to indemnify the Corporation against any claim that may be made against the Corporation on account of the loss, theft or destruction of any such certificate or the issuance of such new certificate.


Section 3. FIXING A RECORD DATE FOR STOCKHOLDER MEETINGS. In order  that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than 60 nor less than 10 days before the date of such meeting. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be the close of business on the next day preceding the day on which notice is given, or if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.





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Section 4. FIXING A RECORD DATE FOR ACTION BY WRITTEN CONSENT. In order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which date shall not be more than 10 days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. If no record date has been fixed by the Board of Directors, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is requiredby statute, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in the State of Nevada, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation's registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the Board of Directors and prior action by the Board of Directors is required by statute, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action.


Section 5. FIXING A RECORD DATE FOR OTHER PURPOSES. In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment or any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purposes of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than 60 days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.


Section 6. SUBSCRIPTIONS FOR STOCK. Unless otherwise provided for in the subscription agreement, subscriptions for shares shall be paid in full at such time, or in such installments and at such times, as shall be determined by the Board of Directors. Any call made by the Board of Directors for payment on subscriptions shall be uniform as to all shares of the same class or as to all shares of the same series. In case of default in the payment of any installment or call when such payment is due, the Corporation may proceed to collect the amount due in the same manner as any debt due the Corporation.






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ARTICLE VII GENERAL PROVISIONS


Section 1. DIVIDENDS. Dividends upon the capital stock of the Corporation, subject to the provisions of the Articles of Incorporation, if any, may be declared by the Board of Directors at any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the Articles of Incorporation. Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the Directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or any other purpose and the Directors may modify or abolish any such reserve in the manner in which it was created.


Section 2. CHECKS, DRAFTS OR ORDERS. All checks, drafts, or other orders for the payment of money by or to the Corporation and all notes and other evidences of indebtedness issued in the name of the Corporation shall be signed by such officer or officers, agent or agents of the Corporation, and in such manner, as shall be determined by resolution of the Board of Directors or a duly authorized committee thereof.


Section 3. CONTRACTS. The Board of Directors may authorize any officer or officers, or any agent or agents, of the Corporation to enter into any contract or to execute and deliver any instrument in the name of and on behalf of the Corporation, and such authority may be general or confined to specific instances.


Section 4. LOANS. The Corporation may lend money to, or guarantee any obligation of, or otherwise assist any officer or other employee of the Corporation or of its subsidiary, including any officer or employee who is a Director of the Corporation or its subsidiary, whenever, in the judgment of the Directors, such loan, guaranty or assistance may reasonably be expected to benefit the Corporation. The loan, guaranty or other assistance may be with or without interest, and may be unsecured, or secured in such manner as the Board of Directors shall approve, including, without limitation, a pledge of shares of stock of the Corporation. Nothing contained in this section shall be deemed to deny, limit or restrict the powers of guaranty or warranty of the Corporation at common law or under any statute.


Section 5. FISCAL YEAR. The fiscal year of the Corporation shall end on December 31 of each year, unless otherwise fixed by resolution of the Board of Directors.


Section 6. CORPORATE SEAL. The Board of Directors may provide a corporate seal which shall be in the form of a circle and shall have inscribed thereon the name of the Corporation and the words "Seal, Nevada". The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.






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Section 7. VOTING SECURITIES OWNED BY CORPORATION. Voting securities in any other Corporation held by the Corporation shall be voted by the President, unless the Board of Directors specifically confers authority to vote with respect thereto, which authority may be general or confined to specific instances, upon some other person or officer. Any person authorized to vote securities shall have the power to appoint proxies, with general power of substitution.


Section 8. INSPECTION OF BOOKS AND RECORDS. Any stockholder of record, in person or by attorney or other agent, shall, upon written demand under oath stating the purpose thereof, have the right during the usual hours for business to inspect for any proper purpose the Corporation's stock ledger, a list of its stockholders, and its other books and records, and to make copies or extracts therefrom. A proper purpose shall mean any purpose reasonably related to such person's interest as a stockholder. In every instance where an attorney or other agent shall be the person who seeks the right to inspection, the demand under oath shall be accompanied by a power of attorney or such other writing which authorizes the attorney or other agent to so act on behalf of the stockholder. The demand under oath shall be directed to the Corporation at its registered office in the State of Nevada or at its principal place of business.


Section 9. SECTION HEADINGS. Section headings in these Bylaws are for convenience of reference only and shall not be given any substantive effect in limiting or otherwise construing any provision herein.


Section 10. INCONSISTENT PROVISIONS. In the event that any provision of these Bylaws is or becomes inconsistent with any provision of the Articles of Incorporation of the Corporation, any agreement entered into among the stockholders of the Corporation, the General Corporation Law of the State of Nevada or any other applicable law, the provision of these Bylaws shall not be given any effect to the extent of such inconsistency (but shall otherwise be given full force and effect) and the terms of such Articles of Incorporation, stockholders agreement, the General Corporation Law of the State of Nevada or applicable law shall govern with respect to, and to the extent of, such inconsistency.


ARTICLE VIII

AMENDMENTS


These Bylaws may be amended, altered, or repealed and new Bylaws adopted at any meeting of the Board of Directors by a majority vote. The fact that the power to adopt, amend, alter, or repeal the Bylaws has been conferred upon the Board of Directors shall not divest the stockholders of the same powers.








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CERTIFICATE


The undersigned hereby certifies that he is the duly elected, qualified, acting and hereunto authorized Secretary of the Corporation and that the foregoing and annexed Bylaws constitute a true and complete copy of the Bylaws of said Corporation presently in full force and effect.


IN WITNESS WHEREOF, the undersigned has signed this Certificate.


DATED as of May 1, 2019



/s/ Daniel A. Goldin

Daniel A. Goldin, CEO and Chairma



Signed before me this 1 st day of May, 2019



/s/ Notary Public


{Notary Seal}





















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EXHIBIT 10.1


REVOLVING DEMAND NOTE


$25,000.00

__________, 201____



FOR VALUE RECEIVED, Jetblack Corp., a Nevada corporation (“Maker”), hereby promises to pay to the order of Daniel A. Goldin (as successor-in-interest to Securities Compliance Group, Ltd.) (“Lender”), on demand, the sum of Twenty-Five Thousand and 00/100 Dollars ($25,000.00) or so much of that sum as may be advanced under this Revolving Demand Note (this “Note”), at the place and in the manner hereinafter provided, together with interest from the date hereof on the balance of principal remaining from time to time unpaid at an annual rate (“Loan Rate”) equal to nine and one-half percent (9.5%). The Loan Rate shall (a) be computed on the basis of a year consisting of 360 days, and (b) be charged for the actual number of days within the period for which interest is being charged.


During any period in which an uncured “Event of Default” (as hereinafter defined) exists under this Note, Maker shall pay interest on the balance of principal remaining unpaid during any such period at an annual rate equal to twenty-two percent (22%) (“Default Rate”). The interest accruing under this paragraph shall be immediately due and payable by Maker to the holder or holders (“Holder”) of this Note and shall be additional indebtedness evidenced by this Note.


Notwithstanding any provisions of this Note or any instrument securing payment of the indebtedness evidenced by this Note to the contrary, it is the intent of Maker and Lender that Lender shall never be entitled to receive, collect, or apply, as interest on principal of the indebtedness, any amount in excess of the maximum rate of interest permitted to be charged by applicable law; and if under any circumstance whatsoever, fulfillment of any provision of this Note, at the time performance of such provisions shall be due, shall involve transcending the limit of validity prescribed by applicable law, then, ipso facto, the obligation to be fulfilled shall be reduced to the limit of such validity; and in the event Lender ever receives, collects, or applies as interest any such excess, such amount that would be excess interest shall be deemed a permitted partial prepayment of principal without penalty or premium and treated hereunder as such; and if the principal of the indebtedness secured hereby is paid in full, any remaining excess funds shall forthwith be paid to Maker. In determining whether interest of any kind payable hereunder, under any specific contingency, exceeds the highest lawful rate, Maker and Lender shall, to the maximum extent permitted under applicable law, (a) characterize any non-principal payment as an expense, fee, or premium rather than as interest; and (b) amortize, prorate, allocate, and spread to the end such payment so that the interest on account of such indebtedness does not exceed the maximum amount permitted by applicable law; provided, that if the amount of interest received for the actual period of existence thereof exceeds the maximum lawful rate, Lender shall refund to Maker the amount of such excess. Lender shall not be subject to any penalties provided by any laws for contracting for, charging, or receiving interest in excess of the maximum lawful rate.



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All payments and prepayments on account of the indebtedness evidenced by this Note shall be first applied to accrued and unpaid interest on the unpaid principal balance of this Note and the remainder, if any, to said principal balance.


Provided no uncured default exists under this Note, the principal balance of this Note may be prepaid in whole or in part, without premium or penalty.


All payments of principal and interest hereunder shall be paid in coin or currency that, at the time or times of payment, is the legal tender for public and private debts in the United States of America, and shall be made at such place as Lender or the legal Holder of this Note may from time to time appoint, and in the absence of such appointment, then at the offices of Lender. Payment submitted in funds not available until collected shall continue to bear interest until collected. If payment hereunder becomes due and payable on a Saturday, Sunday, or legal holiday under the laws of the State of Illinois, the due date thereof shall be extended to the next succeeding business day, and interest shall be payable thereon at the Loan Rate during such extension.


At any time hereinafter, Holder shall have the right, but not the obligation, to cause the Maker to convert this Note into Common Stock of the Maker or any security convertible into Common Stock of the Maker (the “Conversion Shares”), based on a conversion price of $0.001 (the “Conversion Price”).


Holder shall give written notice of its decision to exercise its right to convert the Note or part thereof by delivering an executed and completed notice of conversion setting forth the amount of the Note to be converted, the conversion date and Conversion Price (“Notice of Conversion”) to Maker. Holder will not be required to surrender the Note until the Note has been fully converted or satisfied. Each date on which a Notice of Conversion is faxed to the Maker in accordance with the provisions of this paragraph shall be deemed a “Conversion Date” hereunder.


As promptly as practical after the conversion, Maker will instruct or cause the transfer agent to deliver certificates representing the Conversion Shares to Holder via express courier for receipt within three (3) business days after receipt by Maker of the Notice of Conversion (the “Delivery Date”). A new promissory note representing the balance of the Note not so converted and containing the same provisions and terms as set forth in this Note will be provided to Holder, if requested by Holder, provided the original Note is delivered to Maker. The issuance of certificates for Conversion Shares shall be made without charge to Holder thereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such certificate. No fractional shares of Common Stock shall be issued upon conversion. In lieu of Maker issuing any fractional shares to the Holder upon the conversion, Maker shall round such number of shares to be issued to Holder to the next highest number of shares.





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The occurrence of any one or more of the following events shall constitute an “Event of Default” under this Note:


(a)

The failure by Maker to make payment of principal or interest on the date when any such payment is due in accordance with the terms hereof; or


(b)

The sale or other disposition of the Premises or all or any portion of Maker’s interest in the property without Lender’s consent; or


(c)

The bankruptcy, dissolution, or liquidation of Maker.


In the case of the occurrence of any Event of Default, the holder or holders hereof shall have the right to elect, without additional notice, to declare the principal balance remaining unpaid under this Note, and all unpaid interest accrued thereon, immediately due and payable in full. Failure to exercise these options shall not constitute a waiver of the right to exercise the same in the event of any subsequent Event of Default.


If any Event of Default under this Note shall occur or if suit is filed herein or if proceedings are held in bankruptcy, receivership, reorganization, or other legal or judicial proceedings of the collection hereof, the non-prevailing party promises to pay all costs of collection of every kind, including but not limited to all appraisal costs, attorneys’ fees, court costs, and expenses of every kind, incurred by the prevailing party in connection with such collection or the protection or enforcement of any or all of the security for this Note, whether or not any lawsuit is filed with respect thereto.


Maker and all others who now or may at any time become liable for all or any part of the obligation evidenced hereby expressly agree hereby to be jointly and severally bound, and jointly and severally waive and renounce any and all homestead and exemption rights and any and all redemption rights and the benefit of all valuation and appraisement privileges as against the indebtedness evidenced hereby, or any renewal or extension thereof, waive presentment for payment, protest, and demand, notice of protest, of demand, and of dishonor and nonpayment of this Note, and expressly agree that this Note, or any payment hereunder, may be extended from time to time before, at, or after maturity without in any way affecting the liability of Maker or the Guarantor hereof.


This Note is to be governed and construed in accordance with the laws of the State of Illinois. Any action arising under this Note shall be heard in DuPage County, Illinois. This Note may not be changed or amended orally but only by an instrument in writing signed by the party against whom enforcement of the change or amendment is sought.


If any provision of this Note or any payments pursuant to the terms hereof shall be invalid or unenforceable to any extent, the remainder of this Note and any other payments hereunder shall not be affected thereby and shall be enforceable to the greatest extent permitted by law.



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Lender shall in no event be construed for any purpose to be a partner, joint venturer, agent, or associate of Maker or any beneficiary of Maker or of any lessee, operator, concessionaire, or licensee of Maker or any beneficiary of Maker in the conduct of their respective businesses.


All notices permitted or required pursuant to this Note shall be in writing and shall be deemed to have been properly given (a) upon delivery, if served in person or sent by facsimile with receipt acknowledged; (b) on the third (3rd) business day following the day such notice is deposited in any post office station or letter box if mailed by certified mail, return receipt requested, postage prepaid; or (c) on the first (1st) business day following the day such notice is delivered to the carrier if sent via a nationally recognized overnight delivery service (i.e., Federal Express) and addressed to the party to whom such notice is intended as set forth below:


If to Maker:

Jetblack Corp.

4949 SW Macadam Ave

2nd Floor, Suite 84

Portland, OR 97239


If to Lender:

Daniel A. Goldin

4949 SW Macadam Ave

2nd Floor, Suite 84

Portland, OR 97239


Either party may designate a different address for notice purposes by giving notice thereof in accordance with this paragraph; provided, however, that such notice shall not be deemed given until actually received by the addressee.


Time is hereby declared to be of the essence of this Note and of every part hereof.


ALL ACTIONS ARISING DIRECTLY AS A RESULT OR IN CONSEQUENCE OF THIS NOTE SHALL BE INSTITUTED AND LITIGATED ONLY IN COURT HAVING SITUS IN DUPAGE COUNTY, ILLINOIS, AND MAKER AND ALL PARTIES CLAIMING TO OR THROUGH MAKER HEREBY CONSENT TO THE EXCLUSIVE JURISDICTION AND VENUE OF ANY STATE OR FEDERAL COURT LOCATED AND HAVING ITS SITUS IN SAID COUNTY, AND WAIVE ANY OBJECTION BASED ON FORUM NON CONVENIENS, AND MAKER, OR ANY ONE OF THEM, HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS, AND CONSENTS THAT ALL SUCH SERVICES OF PROCESS MAY BE MADE BY CERTIFIED MAIL RETURN RECEIPT REQUESTED, DIRECTED TO THE MAKER AT THE ADDRESS INDICATED ABOVE, AND SERVICE SO MADE SHALL BE COMPLETE FIVE (5) DAYS AFTER THE SAME HAS BEEN DEPOSITED IN THE U.S. MAILS AS AFORESAID.


This Note has been made and delivered at Wheaton, Illinois and all funds disbursed to or for the benefit of Maker have been disbursed in Wheaton, Illinois.



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IN WITNESS WHEREOF, the undersigned has executed this Note as of the day first above written.



 

 

 

JETBLACK CORP

 

 

 

 

 

 



























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EXHIBIT 10.2

W.I.P.P. INDUSTRIAL LEASE

THIS Industrial Lease (“Lease”), is made and entered into as of this 15th day of December, 2018 (“Effective Date”), by and between W.I.P.P, LLC an Oregon limited liability company, (“Lessor”), and This Budz For You Farms LLC a Oregon limited liability company (“Lessee or tenant”) and .Daniel A. Goldin, Richard Chewning ,(“Guarantors”) Lessee, Lessor and Guarantors are sometimes collectively referred to herein as the “Parties” and individually as a “Party.” Lessee and Guarantor(s) are referred to herein collectively as Lessee.

NOW THEREFORE, the Parties, intending to be legally bound by the terms of this Lease, agree as follows:

Article 1 AGREEMENT TO LEASE

Lessor owns certain real estate, including land and improvements, commonly known as the Walnut Industrial Park (the “Property”), as shown and legally described on Exhibit A. Lessor hereby agrees to lease to Lessee, and Lessee hereby agrees to lease from Lessor, a portion of the Property as follows.

Article 2

2.1 Description

PREMISES

Lessor hereby leases to Lessee, on the terms and conditions stated below, certain space consisting of approximately 8,400 square feet of indoor space in Suite 106 & 110 located within the improved building (“Building”) on the Property, as shown and legally described on Exhibit B, together with all improvements located therein, or to be made thereto by either Lessor or Lessee (collectively the “Premises”) described on Exhibit C.

2.2 Permitted Use

Lessee will use the Premises only for the following purpose(s):

This Blank Space - Intentionally left blank




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Permitted / Not Permitted

Uses

Permitted

Producer : A producer is also known as the grower.

Permitted

Processor : A processor is a business that will transform the raw marijuana into another product (topicals, edibles, concentrates, or extracts). Operating a business that processes marijuana pursuant to a valid license issued by the Oregon Liquor Control Commission (“OLCC”) or registration with the Oregon Health Authority (“OHA”) Hemp outside of the recreational chain is regulated by the Oregon Department of Agriculture (ODA). (“Permitted Use”). Lessee may not use butane or any other volatile or flammable substance (such as Propane, Hexane, etc.) in connection with its processing of marijuana. High Pressure CO2 and Ethanol processing is allowed in connection with Tenant’s processing of marijuana, only upon all of City of Hillsboro permits, approvals and Lessor’s inspection and approval. Lessee must use a closed-loop system. Use of a non-closed-loop system is prohibited.

Permitted

Wholesaler : A wholesaler is a business that buys in bulk and sells to licensees rather than to consumers.

Not Permitted

Retailer : A retailer is a business that sells directly to consumers.

Not Permitted

Laboratory : A laboratory will test marijuana based on rules established by the Oregon Health Authority. To receive a Laboratory license a Lab must be accredited by the Oregon Environmental Laboratory Accreditation program (ORELAP).

Not Permitted

Certificate for Research :

Not Permitted

Hemp Certificate : The Hemp Certificate allows persons that are registered with the Oregon Department of Agriculture (ODA) to transfer hemp flower extracts, or concentrates to OLCC licensed processors who hold an Industrial hemp processor endorsement.

Permitted

Office Space - WITHOUT Office Equipment restrictions:

Not Permitted

General Office Space - WITH Office Equipment restrictions: used for _____________ holding only the following office equipment:

1. Computers and peripherals

2. Fax machine

3. Printer

4. Copier

5. Laminator

6. Desk lamps

7. Coffee machine

8. Other equipment (only with approval of Lessor and additional rent)




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2.2.1 Build-out Requirements for Premises

The following requirement shall apply to Lessee’s build-out of its Premises:

a) If Lessee requires HVAC, Lessee must install a water-cooled HVAC system which shall be connected to the Lessor’s Centralized Condenser Water Tower system. No equipment may be installed outside of the Premises.

b) If Lessee requires CO2 in gas form, Lessee may use the Lessor’s Centralized Bulk CO2 system. c) If any odors emanate from the Premises, Lessee must install adequate size and quantity of Agriair brand air purification systems or equivalent air purification systems that utilizes ionic oxidation technology and also generates and releases hydro-peroxides into the surrounding environment.

d) All plant growers and all other tenants creating or using moisture as part of the use of their Premises must have demising walls that are completely sealed and water proof. This may be accomplished using extruded plastic wall panels such as the following product: http://www.epiplastics.com .

All hook ups, controls and meters to any utilities or services including core systems such as: central water tower system and centralized bulk CO2 system must meet Lessor’s specifications and all related costs are to be borne by Lessee.

2.3 Compliance with Laws and Regulations

Lessee will comply with all applicable laws, ordinances, rules, and regulations of the State of Oregon, City of Hillsboro, County of Washington, the OLCC and all other state and local government authorities with jurisdiction over the Premises, including but not limited to, local fire codes, zoning regulations, and occupancy codes. This Lease is also subject to compliance with Lessor’s published Rules and Regulations for the Property (“Rules and Regulations”), as they may be reasonably amended from time to time. Lessee will promptly provide to Lessor copies of all communications to or from the OLCC or any other governmental entity that relate to Lessee’s noncompliance, or alleged noncompliance, with any laws or other government requirements impacting the Premises or the OLCC licensed business . Lessee hereby acknowledges receipt of a copy of the Rules and Regulations. The Rules and Regulations are attached as Exhibit F.

2.4 Limits on Use

Lessee will not use, nor permit anyone else to use, the Premises in a manner, nor permit anything to be done in the Premises, that



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(a) adversely impacts, or is likely to adversely impact, the Premises, the Property, or any element or part of the Premises or the Property, or the operations of the Premises or the Property;

(b) creates any condition that is a safety hazard, such as the using butane, propane, or hexane to process marijuana;

(c) creates a condition that may increase the rate of fire insurance for the Premises or the Property or would prevent Lessor from taking advantage of any ruling of an insurance rating bureau that would allow Lessor to obtain reduced rates for its insurance policies, or violates any requirements of Lessee’s insurance carrier; or

(d) creates a hazard or a nuisance to other tenants or occupants of the Property.

All processing equipment must be inspected and approved by Lessor prior to use in the Building. Lessee shall not bring equipment onto the ground floor of the Premises concrete slab that exceeds 500 PSI (pounds per square inch). Lessee shall not bring equipment onto the upper floors of the Premises that exceeds 80 pounds per square foot. Lessee may bring equipment onto the Premises that exceeds 80 pounds per square foot only upon notice to Lessor and Lessor's written consent. A violation of this weight limit shall constitute a breach of the Lease.

The maximum amount of ethanol stored in the Premises may not exceed the maximum amount of ethanol designated per control area (Exhibit H). A maximum of 480 gallons can be stored per control area. The maximum gallons any tenant may store is derived by dividing 480 gallons by the number of existing tenants using ethanol within that control area at any given time.

2.5 Condition of Premises / No Warranties / Utility Disruptions

The maximum power available from the switch gear for Lessee's space is 600 amps of 480 volts 3 phase power. If any additional power is required there will be a o ne time 'Electrical Development Charge' of $7,500.00 per 100 AMPS of 480 3 phase power. Lessor makes no warranties or representations regarding the condition of the Premises or the Property, including, without limitation, the suitability of the Premises for intended uses or the condition of the improvements. Lessee has inspected and accepts the Premises in its “AS IS” condition upon taking possession. Lessor will have no liability to Lessee, and Lessee will have no claim against Lessor, for any damage, injury, or loss of use caused by the condition of the Premises or the Property or any interruption in Utility service provided to the Building and Premises. Lessee is solely responsible for thoroughly inspecting the Premises and ensuring that it is in compliance with all laws.



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2.6 Lessor’s Maintenance / Repair Obligation

2.6.1. Building

Lessor is responsible for maintaining the structural integrity of the Building exterior walls, foundation, roof, all centralized systems, and any shared loading docks and doors. Lessee will promptly notify Lessor of any damages or noticed defect to any of the foregoing.

2.6.2 Deleted.

2.6.3 OLCC/OHA Compliant Video Surveillance and Alarms Systems.

Lessee is responsible for installing and maintaining the video surveillance and alarm system in the Premises in a manner compliant with the OLCC or OHA Rules, in accordance with Lessee’s OLCC license or OHA registration. Lessee shall give Lessor prompt notice of any failure of these systems or any notice from the OLCC or OHA of an alleged violation. Lessor will have no liability to Lessee, and Lessee will have no claim against Lessor, for any damage, injury, or loss of use caused by failure of these systems.

2.7 Americans with Disabilities Act

Compliance with the Americans with Disabilities Act (“ADA”) is dependent on Lessee’s specific use of the Premises. Lessor makes no warranties or representations about whether the Premises comply with the ADA or any similar state or local legislation. In the event that Lessee’s use of the Premises requires modifications or additions to the Premises to achieve ADA or other similar law compliance, Lessee agrees to make any such necessary modifications, additions, or both at Lessee’s expense.

Article 3 TERM

3.1 Initial Term

The term of this Lease will commence on December 20th, 2018 (the “Commencement Date”), and continue for a lease term of approximatly 60 months, expiring on December 31 st , 2023, (“Expiration Date”), unless sooner terminated under the terms of this Lease (“Initial Lease Term”). As used herein “Lease Term” means the Initial Lease Term. Although Lessor will use commercially reasonable efforts to deliver possession of the Premises to Lessee on the Commencement Date, Lessor will not be responsible for any delay in delivery of possession. No Rent will be due from Lessee until possession of the Premises has been delivered to Lessee. Delay in delivery of the Premises will not extend the Expiration Date, but if the delay in delivery of possession extends more than ninety (90) days beyond the Commencement Date, Lessee may elect to terminate this Lease without any liability to either Lessee or Lessor.



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3.2 Option to renew

If the Lessee is not then in Default of this Lease, Lessee will have an option to extend the Initial Lease Term (“Extension Option”) for two 1-year renewal terms, each an “Extension Term” on the same terms and conditions as herein provided, except for the Basic Rent, which will be increased at the beginning of any Extension Term as set forth below and will not include a further or any additional Extension Option. An Extension Option may be exercised only by Lessee by written notice given to Lessor not less than 90 days, nor more than 120 days before the expiration of the Initial Lease Term or any Extension Term. Failure to exercise any Extension Option will terminate any subsequent Extension Option(s).

First Extension Term: January 1, 2024 to December 31, 2024 $14,090.00 per month. Second Extension Term: January 1, 2025 to December 31, 2025 $15,500.00 per month.

Article 4 RENT

4.1 Basic Rent Amount and Due Date

The base monthly rent (“Basic Rent”) for the Initial Lease Term shall be as follows: December 20, 2018 to December 31, 2018 $4,380.00 per month.

January 1, 2019 to December 31, 2019 January 1, 2020to December 31, 2020 January 1, 2021 to December 31, 2021 January 1, 2022 to December 31, 2022 January 1, 2023 to December 31, 2023

$10,950.00 per month. $11,390.00 per month. $11,845.00 per month. $12,320.00 per month. $12,810.00 per month.

Lease shall be paid in advance by the twentieth

This Lease is a “triple net lease,” meaning that unless otherwise specifically provided herein, Lessee is responsible to pay all insurance, utilities, services, taxes, and other costs associated with the Premises, with some of those charges being billed directly to Lessee and others being included in the CAM Charges (defined in Section 4.7.2), of which Lessee will pay Lessee’s proportionate share, as more particularly described in Section 4.7.2. Charges specifically for Lessor provided (i) Condenser water for Lessee’s water-cooled HVAC system(s) required pursuant to Section 2.2.1(a), and (ii) CO2 for Lessee’s CO2 system required pursuant to Section 2.2.1(b) (collectively, “Lessor-Provided Efficiencies”) will be considered Additional Rent and billed directly to the Lessee. Amounts included and payable by Lessee as Additional Rent in connection with delivery by Lessor to Lessee’s Unit of the Lessor-Provided Efficiencies are set forth in the Lessor-Provided Efficiency Rate Disclosure attached as Exhibit I hereto and incorporated herein by this reference.




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The rates set forth in Exhibit I are subject to increases based on Lessor’s costs associated therewith at Lessor’s sole discretion upon 30 days notice from Lessor to Lessee of any such increases. All amounts due hereunder and items referenced as Additional Rent throughout the lease, in addition to the Basic Rent are deemed “Additional Rent” and are due on the same date as Basic Rent. Any reference to “Rent” herein includes Basic Rent and Additional Rent.

4.3 End of Lease Term

Lessor and Lessee may negotiate a new lease term and rent amount and the end of the Initial Lease term at their sole discretion, either through a new lease or an addendum to the Lease.

4.4 Security Deposit

4.4.1 Amount of Security Deposit

The Security Deposit shall be in the amount of $$65,700.00. $10,950.00 due at lease signing. The Balance of $54,750.00 is due before any construction can start.

4.4.2 Use of Security Deposit

The Security Deposit secures Lessee’s full and faithful performance and observance of all of Lessee’s obligations under this Lease and under any other written agreement between Lessee and Lessor specifically referring to the Security Deposit. The Security Deposit will not be considered to be held in trust by Lessor for the benefit of Lessee, may be commingled with other funds of Lessor, and will not be considered an advance payment of Rent or a measure of Lessor’s damages in the case of an Event of Default (defined in Section 12.1) by Lessee. Lessor may, but

Rent for each month of the term of this (20th) day of each prior calendar month without deduction, offset, prior notice or demand.

4.2 Additional Rent

will not be obligated to, after three (3) days’ advance written notice is delivered to Lessee in accordance with Section 17.9, draw on and apply the Security Deposit (including all interest earned thereon) to: (a) pay any delinquent Basic Rent or other Rent not paid within the applicable time period, if any, under Section 12.1.1; and/or (b) remedy any violation of this Lease, after Lessee has received notice and opportunity to cure under Section 12.1.2, if a notice and opportunity to cure is required under this Lease. If Lessor applies any of the Security Deposit to any of the above, Lessee will, immediately upon demand, replenish the Security Deposit to its full amount.




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If Lessee fully performs all of its obligations under this Lease, the Security Deposit, or any balance remaining thereof, will be returned to Lessee within 30 days after the Expiration Date or earlier termination of this Lease and delivery of the Premises back to Lessor. However, if a reasonable question exists concerning Lessee’s full compliance with this Lease, or if there is any obligation under this Lease to be performed after the Expiration Date or earlier termination of this Lease, Lessor may require that the Security Deposit remain in place until Lessor is satisfied that there has been no violation of this Lease and all obligations due under this Lease have been fully performed, even if it takes Lessor longer than 30 days to make such a determination to Lessor’s reasonable satisfaction.

4.4.3 Electricity Deposit

Upon taking occupancy of the premises, Lessee will deposit with Lessor and continuously maintain a “Electricity Deposit” in the amount of $500.00 or a total of any past 3 consecutive months electricity charges whichever is higher. In no event will a decrease in electrical usage decrease this deposit.

4.4.4. Use of Electricity Deposit

The Electricity Deposit secures Lessee’s full and faithful payment of its individual electrical bill. In case of default, any excess amount after paying the Electrical bill will be considered as additional Security Deposit and may be used as per Section 4.4.2.

4.5 Taxes

Lessee agrees to pay, on or before the date they become due, Lessee’s proportionate share of all taxes, personal property taxes, assessments, special assessments, user fees, and other charges, however named, that, after the Effective Date and before the expiration of this Lease, may become a lien or that may be levied by any state, county, city, district, or other governmental authority on the Premises, any interest of Lessee acquired under this Lease, or any possession right that Lessee may have in or to the Premises by reason of its occupancy thereof, as well as all taxes, Personal property taxes, assessments, user fees, or other charges on all property, real or personal, owned or leased by Lessee in or about the Premises (collectively, “Taxes”), together with any other charge levied wholly or partly in lieu thereof. Taxes are considered Additional Rent under this Lease. All Taxes are paid to the taxing authority by Lessor and are paid to Lessor by Lessee through the monthly CAM Charges (defined in Section 4.7.2).]





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4.6 Operating Expenses and Utilities

The "Utilities" consists of water, gas, electricity, garbage, Internet, Condenser Water service provided by Lessor, CO2 service provided by Lessor, and any other utility services that may be furnished directly to the Premises at Lessors discretion. Lessor will supply water, electricity, gas, and garbage as part of Rent only if ‘ General Office Space - WITH Office Equipment restrictions’ is permitted under Section 2.2. In case of all other Permitted Uses, Lessee will promptly pay for all "Utilities". Lessee will timely pay its apportioned share on a monthly basis.

Lessor will stub into the Premises the following: 1) Centralized water tower cooled water, 2) CO2 gas supply line, 3) Water, 4) Sewer trunk line access no farther than 75 feet from the closest perimeter point of Premises (Sewer access may not be in the Premises) at Lessor’s discretion. Lessor has no responsibility to provide any other utility services to the Premises that are not already in place, other than those stated in the section. Note: If adequate Electrical service is not present, Electricity will need to be accessed from the switch gear of Lessor’s choice, at Lessee’s expense. Lessee must install power to the space as a first step of construction. If additional services are required, Lessee will obtain Lessor’s permission for their installation, at Lessee’s sole cost and expense. Lessor will not unreasonably withhold such permission. Lessee also agrees to pay any Electrical Infrastructure Fee and its proportionate share of monthly CAM Charges (defined in section 4.7.2), which cover, among other things, Taxes, water, sewer, insurance, parking lot maintenance, certain Building repairs and capital expenditures, gate security, and lighting for the Common Areas (defined in section 4.7).

4.7 Common Areas

The “Common Areas” consist of certain not leased areas and facilities outside the Premises and within the exterior boundary line of the Property and interior utility raceways and installations that are designated by Lessor to be for the general nonexclusive use of Lessor, Lessee, all other lessees of the Property, and each of their respective employees, suppliers, shippers, customers, contractors, and invitees. The Common Areas include but are not limited to parking areas, certain loading and unloading areas, garbage and debris disposal areas, roadways, walkways, driveways, and landscaped areas. Lessee and Lessee’s employees, suppliers, shippers, contractors, customers, and invitees have the nonexclusive right to use, in common with others entitled to such use, the Common Areas as they exist from time to time, subject to any rights, powers, and privileges reserved by Lessor under the terms hereof or under the terms of the Rules and Regulations or restrictions governing the use of the Property. Under no circumstances does the right to use the Common Areas include the right to store any property, either temporarily or permanently, in the Common Areas. Any such storage will be permitted only by the prior written consent of Lessor, which consent will be within the sole discretion of Lessor and may be revoked at any time.




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If any unauthorized storage occurs, Lessor will have the absolute right, without notice and in addition to the other rights and remedies that it may otherwise have at law or under this Lease, to remove the property to Lessee’s Premises or a storage area and to charge the cost to Lessee, which cost will be immediately payable upon demand by Lessor or dispose off at Lessors discretion. The removal will not be considered any form of bailment. Lessor is not liable for any damage that may occur during any removal, moving, handling, misplacing, stealing or storing of such property. After 30 days of storage, the property will be deemed abandoned and Lessor may dispose of it in any manner without any liability to Lessee and Lessee shall remain liable for the storage fees.

4.7.1 Lessor’s Authority over Common Areas

Lessor, or such other person(s) as Lessor may appoint, have the exclusive control, management, and maintenance of the Common Areas and have the right, from time to time, to establish, modify, amend, and enforce Lessor’s Rules and Regulations for the management, safety, care, and cleanliness of the Common Areas, the parking and unloading of vehicles, and the preservation of good order, as well as for the convenience of other occupants or tenants of the Building and the Property and their invitees. Lessee agrees to abide by and conform to all the Rules and Regulations, and will use its best efforts to cause its employees, suppliers, shippers, customers, contractors, and invitees to so abide and conform. Lessor will not be responsible to Lessee for any noncompliance with the Rules and Regulations by other tenants of the Property. Lessor has the right, in Lessor’s sole discretion, from time to time: (a) to make changes to the Common Areas, including, without limitation, changes in the location, size, shape, and number of driveways, entrances, parking spaces, parking areas, loading and unloading areas, landscaped areas, walkways, and utility raceways, and changes to the ingress, egress, and direction of traffic; (b) to close any of the Common Areas temporarily for maintenance purposes as long as reasonable access to the Premises remains available; (c) to designate land outside the current boundaries of the Property to be a part of the Common Areas; (d) to add additional buildings and improvements to the Common Areas; (e) to utilize the Common Areas as Lessor deems appropriate while engaged in making additional improvements, repairs, or alterations to the Property, or any portion thereof; and (f) to retain at all times master keys or pass keys to the Building and Premises; (g) to display the Building and Premises to mortgagees, prospective mortgagees, prospective purchasers, and ground Lessors, and prospective Lessee’s at reasonable hours; (h) to perform any other acts and make any other changes in, to, or with respect to the Common Areas and Property as Lessor may, in the exercise of reasonable business judgment, deemed to be necessary or appropriate.





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4.7.2 Common-Area Maintenance and Operating Charges

Throughout the Lease Term, Lessee will pay to Lessor, as Additional Rent, Lessee’s proportionate share of all Common-Area Maintenance and Operating Expenses, as hereinafter defined, incurred by Lessor for maintenance of the Common Area. “Common-Area Maintenance and Operation Expenses” or “CAM Charges” are defined as all costs incurred by Lessor relating to the ownership, operation, repair, and maintenance of the Property, including, but not limited to, the following:

(a) All Common-Area improvements, including parking areas, loading and unloading areas, trash disposal areas, roadways, parking areas, security booths, sidewalks and walkways, driveways, landscaped areas, bumpers, irrigation systems, lighting, fences and gates, elevators, Building exteriors, roofs, and roof drainage systems.

(b)  Exterior signs and any tenant directories.

(c)  Any Building sprinkler systems.

(d)  Any Building heating and cooling systems.

(e)  The cost of water, gas, electricity, telephone, and any Internet to service the

Common Areas.

(f)Trash disposal, recycling, pest control services, property management, security services, the cost to repaint or repair the exterior of any structures, and the cost of any environmental inspections not attributable to a specific tenant.

(g) Reserves set aside for maintenance, repair, or replacement of Common-Area improvements and equipment, including the Building.

(h) Taxes (as defined in Section 4.5 and excluding any Taxes directly assessed to any Tenant).

(i) The cost of any insurance maintained by Lessor pursuant to Article 8.

(j)Any deductible portion of any insured loss concerning the Building or the Common Areas.

(k) Management, accounting, attorney fees, and all other costs related to the operation, maintenance, repair, and replacement of the Property.

(l) The cost of any reasonable capital improvement to the Building or the Property, as long as Lessor allocates the cost of any such capital improvement over the useful life of the capital improvement, as computed under the United State Tax Code.



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(m) The cost of a security system and video surveillance system for the Building and common areas.

(n) Any other services provided by Lessor that are stated elsewhere in this Lease to be CAM Charges.

Nothing contained herein imposes any obligation on Lessor to provide any of the improvements or services listed above that are not already provided to the Property.

4.7.3 CAM Exclusions

CAM Charges and Taxes that are specifically attributable to any tenant, to any other tenant in the Property, or to the operation, repair, and maintenance thereof, will be allocated entirely to that tenant. However, any CAM Charges and Taxes that are not specifically attributable to any tenant or to the operation, repair, and maintenance thereof, will be proportionally allocated by Lessor to all tenants within the Property, including Lessee, based on the approximate square footage of the Premises divided by the approximate square footage of 158,000 the Property, as that square footage may change from time to time. CAM Charges will not include any expenses paid by any tenant directly to third parties or expenses for which Lessor is otherwise reimbursed by any third party, other tenant, or insurance proceeds.

4.7.4 Common-Area Payments

Lessee’s Share of CAM Charges (and Taxes if not directly assessed) is payable monthly along with the Basic Rent. The amount of the payments will be based on Lessor’s estimate of the annual CAM Charges. Within 60 days after written request (but not more than once each year), Lessor will deliver to Lessee a reasonably detailed statement showing Lessee’s proportionate share of the actual CAM Charges incurred during the preceding year. If Lessee’s payments during that year exceed Lessee’s proportionate share, Lessor will credit the amount of the overpayment against Lessee’s future payments. If Lessee’s payments during that year were less than Lessee’s proportionate share, Lessee will pay to Lessor the amount of the deficiency within 30 days after delivery by Lessor to Lessee of the statement.

4.8 Late Charge

4.8.1 Late Payment Penalty

If Lessee fails to pay any amounts due under this such as Lease Rent, fees, charges, etc. within five (5) days after it is due, Lessor may elect to impose a late payment penalty of twelve (12) percent of the all overdue amounts.



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Lessor’s election not to impose a late payment penalty in any instance will not be a waiver of Lessor’s other rights and remedies for the late payment nor of Lessor’s right to later charge and collect a late payment penalty for the late payment. Acceptance of payment of a late payment penalty by Lessor will not constitute a waiver of Lessee’s default with respect to the overdue amount in question, nor will it prevent Lessor from exercising any other rights or remedies granted under this Lease, by law, or in equity.

4.8.2 Delinquency Interest Rate

In addition to the Late Payment Penalty Section 4.8.1, all past due amounts, such as Rent, fees, charges, penalties or delinquency interest amount, etc. will bear interest at a “Delinquency Rate” of fifteen percent (15%) per annum, or the highest rate allowed by law, if it is less, from the due date until paid in full.

4.9 Time, Place and Manner of Payments

Lessee will pay Lessor Basic Rent and Additional Rent monthly, in advance, and on the twentieth (20 th ) day of the month without abatement, deduction, or offset. Basic Rent and Additional Rent shall not be in cash and shall be by check or direct deposit. The business name on Lessee’s check shall not imply its involvement in the cannabis business. Payment of all Rent will be made to Lessor to the address set forth in Section 17.9 or such other place as Lessor may designate in accordance with the requirements of Section 17.9.

4.10 Acceptance of Rent

Lessor’s acceptance of a partial payment of Rent will not constitute a waiver of any Event of Default (defined in Section 12.1), nor will it prevent Lessor from exercising any of its other rights and remedies granted to Lessor under this Lease, by law, or in equity. Any endorsements or statements on checks of waiver, compromise, payment in full, or any other similar restrictive endorsement will have no legal effect. Lessee will remain in violation of this Lease and will remain obligated to pay all Rent due, even if Lessor has accepted a partial payment of Rent. Acceptance of a late but full payment of Rent (including Rent plus all interest due thereon at the Delinquency Rate) will constitute a waiver and satisfaction of that late payment, violation, or Default only and will not constitute a waiver of any other late payment, violation, or Default.





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Article 5 LESSEE OBLIGATIONS

5.1 Repairs and Maintenance

Lessee is responsible for all maintenance, repair, replacement, and refurbishment of the Premises, and other improvements thereon, whether owned by Lessor or Lessee, except for the centralized systems, which are Lessor’s responsibility unless damaged due to Lessee’s negligence, failure to perform its repair and maintenance responsibilities, improper performance of repair and maintenance responsibilities, or misuse of the Premises, and in that case Lessee will be assessed for the damage caused by Lessee. Lessor at its option may enter into a third-party maintenance contract for Lessor provided equipment, for which Lessee will reimburse Lessor its share of those costs. Lessor will also maintain the Common Areas, as more particularly described in Sections 4.7.1 and 4.7.2 above. Lessor has no other maintenance obligations to Lessee. If work performed by Lessor is required due to the negligence, neglect, or misconduct of Lessee, Lessee will promptly reimburse Lessor the cost of the work, plus interest thereon at the Delinquency Rate from the date the expense was incurred by Lessor until reimbursed by Lessee. Other than routine and customary repairs and maintenance, Lessee acknowledges that Lessee does not have the right to make any alterations to the Premises without the prior written consent of Lessor, which consent will not be unreasonably withheld. Lessee will keep the Premises in good repair and clean condition, free and clear of accumulation of rubbish, debris, scrap materials, and litter. Lessee will ensure that no Hazardous Substance release occurs on the Premises at any time, as more particularly described in Section 11.1.6. Lessee will commit no waste on the Premises or in the Common Areas, and Lessee will not permit any employee, supplier, shipper, customer, contractor or invitee to commit waste on the Premises or in the Common Areas. The Premises shall at all times be free of mold, mildew and pests. Lessee shall not attach anything to the Premises walls without prior written consent of Lessor.

5.2 Construction of Improvements

Lessee will undertake no construction, alteration, or changes on or to the Premises, without the prior written consent of Lessor, which consent will be at Lessor’s sole discretion and conditioned on submission of a reasonable construction plan (including, without limitation, professional architectural drawings sufficient for permitting) and schedule. In some cases, construction bonding may be required by Lessor, in Lessor’s reasonable judgment. Lessee will notify Lessor of any construction or repair work that might disturb any existing asbestos or lead paint, and Lessor will cooperate with Lessee to provide requested information concerning the same. Lessor will have no construction obligations except to maintain those systems described in Section 2.6. All electrical design installation and connection to switch gear must have oversight by the Lessor's electrician, at Lessee’s expense. Lessor may refuse to allow any construction, alteration or changes to the Premises in its sole discretion.



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5.3 Notice of Non-responsibility

At least three business days before commencing any approved work on the Premises that may give rise to a right to place a statutory lien on the Premises, Lessee will give written notice to Lessor of the date on which any such work is to commence so that Lessor may post, at appropriate places, statutory notices of non-responsibility.

5.4 No Liens

Lessee agrees to pay, when due, all sums for labor, services, materials, supplies, utilities, furnishings, machinery, or equipment that have been provided or ordered with Lessee’s consent to the Premises. If any lien is filed against the Premises that Lessee wishes to protest, then Lessee will immediately notify Lessor of the basis for its protest and must deposit cash with Lessor, or procure a bond acceptable to Lessor, in an amount sufficient to cover the cost of removing the lien from the Premises. Failure to remove the lien or furnish the cash or a bond acceptable to Lessor within fourteen (14) days will constitute an Event of Default (defined in Section 12.1) under this Lease, Lessor will be entitled to satisfy the lien without further notice to Lessee, and Lessee will immediately reimburse Lessor for any sums paid to remove any such lien.

5.5 Lessor Access to Premises

Lessor and its respective agents have the right to enter the Premises for the purposes of: (a) confirming the performance by Lessee of all obligations under this Lease, (b) doing any other act that Lessor may be obligated or have the right to perform under this Lease, (c) inspecting the Premises to ensure Tenant’s compliance with all Rules and Regulations, in addition to any OLCC rules and regulations; and (d) for any other lawful purpose. Such entry will be made on a minimum of twelve (12) hour notice and during normal business hours, when practical, except in cases of emergency or a suspected violation of this Lease, the Rules and Regulations, any OLCC rule or regulation, or the law. Lessee waives any claim against Lessor for damages for any injury or interference with Lessee’s business, any loss of occupancy or quiet enjoyment of the Premises, or any other loss occasioned by the entry except to the extent caused by the gross negligence or willful misconduct of Lessor. Lessor will use reasonable efforts to disturb Lessee’s operations as little as reasonably possible during any of Lessor’s repair and maintenance work. Lessee shall not change or add locks to the Premises.

5.6 Safety Requirements

Lessee will conduct its operations, activities, and duties under this Lease in a safe manner and in compliance with all safety standards imposed by applicable federal, state, and local laws and regulations, and the Rules and Regulations.



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Lessee will exercise due and reasonable care and caution to prevent and control fire on the Premises and to that end will provide and maintain fire suppression equipment approved by FM Global or an equivalent insurance company and other fire protection equipment as may be required under applicable governmental laws, ordinances, statutes, and codes for the purpose of protecting the improvements adequately and restricting the spread of any fire from the Premises to any property adjacent to the Premises, all at Lessee’s sole cost and expense. Lessee will be solely responsible for provision and maintenance of fire extinguishers, but not for sprinkler systems. Lessee will, however, promptly notify Lessor if Lessee observes any problems relating to the sprinkler system and will do nothing to damage or disable the sprinkler system or any smoke detectors located within the Premises or Property.

Lessee shall provide Lessor a copy of the safety manual for the processing equipment used in the Premises. Lessee covenants to use the processing equipment in accordance with the manufacturer’s safety instructions.

5.7 Signs

Lessee will not erect, install, nor permit on the Premises any sign or other advertising device without first having obtained Lessor’s written consent, which Lessor may withhold in its sole discretion. Lessee will remove all signs and sign hardware upon termination of this Lease and restore the sign location to its former state, unless Lessor, in its sole option, elects to retain all or any portion of the signage.

5.8 Labor Laws

Lessee must at all times, including during construction, comply with all applicable state laws pertaining to wage and hour and health and safety regulations. Lessee will also comply with all its own collective bargaining requirements to avoid labor disturbances in the Premises. Lessee should promptly notify Lessor in the event of any threatened labor action. Lessee will also reasonably cooperate with any directors of Lessor to mitigate the impact of labor disturbance on access to the Property and operations with the Property, regardless of the source of the labor dispute.

5.9 Continuous Operations / Licensing

During the Lease Term, Lessee will continuously maintain its operations on the Premises and will advise Lessor, in writing, if Lessee intends to cease operations for any period longer than ten (10) consecutive days. During any period when Lessee is not operating on the Premises, Lessee will nonetheless be required to abide by and comply with all provisions of this Lease. Lessee will not abandon the Premises. Lessee shall remain continuously licensed by the OLCC or registered with the OHA and shall immediately notify Lessor of any change to Lessee’s licensed or registered status.



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5.10. Access to Building

Lessee shall not grant access to the Building to any persons who would be unauthorized to access the Premises under the Rules and Regulations or the OLCC Rules.

5.11. Financial Statements .

Upon submission of this Lease to Lessor and at any time thereafter within thirty (30) days after Lessor’s request therefor, Lessee shall furnish to Lessor copies of true and accurate financial statements reflecting Lessee’s then current financial situation (including without limitation balance sheets, statements of profit and loss, and changes in financial condition), Lessee’s most recent audited annual financial statements, and Lessee’s most recent federal income tax returns pertaining to Lessee’s business, and in addition shall cause to be furnished to Lessor similar financial statements and tax returns for any guarantor(s) of this Lease. Lessee agrees to deliver to Lessor and/or any lender, prospective lender, purchaser or prospective purchaser designated by Lessor such financial statements of Lessee as may be reasonably requested by Lessor and/or such lender or purchaser. Lessee shall not be required to furnish financial statements pursuant to this Section more than two (2) times per calendar year. Lessor agrees to keep all furnished documents confidential.

Article 6 ACCESS, PARKING, AND SECURITY

6.1 Access

Access to the Property and Premises shall be governed by the Rules and Regulations. Tenant must not allow any persons in the Building or Premises in violation of any OLCC rule or regulation. Lessor’s security protocol must be followed at all times by Lessee and any of Lessee’s employees, contractors, agents, or invitees as set forth in the Rules and Regulations.

6.2 Parking

Lessee may purchase a limited number of reserved parking spaces on a monthly basis at the then-current rate charged by Lessor for the parking spaces. Lessee and its employees, suppliers, shippers, customers, contractors and invitees must otherwise park in the unreserved parking area. Lessor is not responsible for any loss or damage to any vehicle or personal property in any vehicle parked within the parking area. Lessee will provide Lessor with a list of names and vehicle license plate numbers for employees who are authorized to park within the parking area. Lessee will be responsible for any of its employees, customers, contractors, shippers, invitees, vendors, or suppliers who park in any reserved areas. Only vehicles no larger than a full-size vehicle or pickup truck may be parked in the general parking area. Delivery trucks must be parked in areas designated in the Rules and Regulations.



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No vehicle parking of any kind is allowed in the Common Areas other than in the designated parking lots or areas. Any such improperly parked vehicle is subject to towing by Lessor. No vehicle unloading is allowed off the Premises except in areas specifically identified by Lessor for such unloading, if any. All parking including Reserved parking spaces are strictly to be used for parking of vehicles. No other uses such as storing of goods, trash etc. is allowed.

6.3 Security

Security for the Property, Building and Premises shall be governed by the Rules and Regulations and the OLCC rules and regulations.

Lessee acknowledges that numerous other parties and tenants occupy or have access to the Property and that Lessee is solely responsible for any and all its property located on the Premises or within the Property. Lessee waives any claim against Lessor for any loss or damage to Lessee’s property. Lessor will not be responsible for the actions of any other tenants or other third parties who may come onto the Property or the Premises. Lessee warrants and represents, after review of the website identified below, that Lessee is not an entity or person (i) that is listed in the Annex to, or is otherwise subject to the provisions of, Executive Order 13224 , issued on September 23, 2001 (“EO13224”); (ii) whose name appears on the United States Treasury Department Office of Foreign Assets Control (“OFAC”) most current list of “Specially Designated Nationals and Blocked Persons” (which list may be published from time to time in various media including but not limited to the OFAC website, www.treas.gov/offices/enforcement/ofac/sdn/t11sdn.pdf);(iii) who commits, threatens to commit, or supports “terrorism,” as that term is defined in EO13224; or (iv) who, to the knowledge of Lessee, is otherwise affiliated with any entity or person listed in clauses (i)-(iv) of this Section. Any and all parties or persons described in clauses (i)-(iv) of this Section are herein referred to as “Prohibited Persons.” Lessee covenants and agrees that neither Lessee nor any of its officers, directors, shareholders, partners, members, or affiliates (including the holders of indirect equity interests in Lessee) will (a) knowingly conduct any business, nor engage in any transaction or dealing, with any Prohibited Person, including, but not limited to, the making or receiving of any contribution of funds, goods, or services to or for the benefit of a Prohibited Person; or (b) knowingly engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in EO13224. Lessee further covenants and agrees to deliver (from time to time) to Lessor any such certification as may be requested by Lessor in its reasonable discretion, confirming that, based on reasonable inquiry (x) neither Lessee nor any of it respective officers, directors, shareholders, partners, members, or affiliates (including the holders of indirect equity interests in Lessee) is a Prohibited Person and (y) neither Lessee nor its respective officers, directors, shareholders,



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partners, members, or affiliates (including the holders of indirect equity interests in Lessee) has (1) knowingly conducted any business, or engaged in any transaction or dealing, with any Prohibited Person, including but not limited to the making or receiving of any contribution of funds, goods, or services, to or for the benefit of a Prohibited Person; or (2) knowingly engaged in or conspired to engage in any transaction that evaded or avoided, or had the purpose of evading or avoiding, or attempted to violate, any of the prohibitions set forth in EO13224.

6.4 Handling of Trash

Lessee will be responsible for the adequate sanitary handling of all trash and other debris for the Premises and will provide for its timely removal to the holding area designated by Lessor as set forth in this Section and the Rules and Regulations. Lessee will gather, sort, and transport all garbage, refuse, and recyclable materials as needed from the Premises. Lessee will provide and use suitable fireproof receptacles for all trash and other refuse temporarily stored within the Premises. Lessee will not permit boxes, cartons, barrels, pallets, scrap piles, or other similar items to be piled or stored in the Common Areas or within view of the Common Areas or outside of the Premises, unless otherwise approved, in writing, by Lessor. Lessee will cooperate with Lessor in the implementation of any recycling program that Lessor may have in place from time to time. Lessee will not allow trash or debris of any nature to accumulate on the Premises and will store all trash and debris in a manner that will prevent it from being a health or safety hazard or creating an unsightly condition in and around the Premises.

Article 7 INSURANCE REQUIREMENTS

7.1 Insurance Amounts

Insurance requirements set forth below do not in any way limit the amount or scope of liability of Lessee under this Lease. The amounts listed indicate only the minimum amounts of insurance coverage that Lessor is willing to accept to help ensure full performance of all terms and conditions of this Lease. All insurance required of Lessee by this Lease must meet all the minimum requirements set forth in this Article 7.

7.2 Certificates; Notice of Cancellation

On or before the Commencement Date, Lessee will provide Lessor with certificates of insurance establishing the existence of all insurance policies required under this Lease. Thereafter, Lessor must receive notice of the expiration or renewal of any policy at least 30 days before the expiration or cancellation of any insurance policy. No insurance policy may be canceled, revised, terminated, or allowed to lapse without at least 30 days prior written notice to Lessor. Insurance must be maintained without any lapse in coverage continuously for the duration of this Lease. Cancellation of insurance without Lessor’s consent will be deemed an immediate Event of Default (defined in Section 12.1) under this Lease. Lessee will give Lessor certified copies of Lessee’s policies of insurance promptly upon request.



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7.3 Additional Insured

Lessor will be named as an additional insured in each required liability policy and, for purposes of damage to the Premises or cancellation of policy, as a loss payee. The insurance will not be invalidated by any act, neglect, or breach of contract by Lessee. On or before the Commencement Date, Lessee must provide Lessor with a policy endorsement naming Lessor as an additional insured as required by this Lease.

7.4 Primary Coverage and Deductible

The required policies will provide that the coverage is primary, and will not seek any contribution from any insurance or self-insurance carried by Lessor. Unless otherwise approved in writing and in Lessor’s sole discretion, the deductible on any insurance policy cannot exceed $5,000.00.

7.5 Company Ratings

All policies of insurance must be written by companies having an A.M. Best rating of “A” or better, or the equivalent. Lessor may, upon 30 days written notice to Lessee, require Lessee to change any carrier whose rating drops below an “A” rating.

7.6 Required Insurance

At all times during this Lease, Lessee will provide and maintain the following types of coverage:

7.6.1. General Liability Insurance

Lessee will maintain a commercial general liability policy (including coverage for broad form contractual liability, sudden and accidental spill coverage on land and on water, and any personal injury liability) for the protection of Lessee, and insuring Lessee and Lessor against liability for damages because of personal injury, bodily injury, death, or damage to property, including loss of use thereof, and occurring on or in any way related to the Premises or occasioned by reason of the operations or actions of Lessee. All such coverage must name Lessor as an additional insured. All such coverage must be in an amount not less than $2 million combined single limit per occurrence for bodily injury and property damage for all coverage specified herein.

7.6.2 Personal Property and Fire Legal Liability Insurance

Lessee will be responsible to insure all Lessee’s own Personal Property (as defined in Section 10.2), improvements, betterments, and trade fixtures, which items will not be covered by Lessor’s insurance and for which Lessor and its insurance carriers will have no liability. Furthermore, Lessee must at all times carry Fire Legal Liability insurance coverage in an amount not less than $500,000 combined single limit per occurrence.



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7.6.3 Automobile Liability Insurance

Lessee will maintain an occurrence form of commercial automobile liability policy insuring Lessee and Lessor against liability for damage because of bodily injury, death, or damage to property, including loss of use thereof, and occurring or in any way related to the use, loading, or unloading of Lessee’s owned, hired, and vehicles on and around the Premises. Such insurance will name Lessor as an additional insured. Coverage must be in an amount of not less than $1,000,000 combined single limit per occurrence.

7.6.4 Workers’ Compensation Insurance

Lessee will maintain, in full force and effect, Workers’ Compensation insurance for all Lessee’s employees, including coverage for employer’s liability, as required by Oregon law.

7.6.5 Additional Coverage Requirements if growing plants

Lessee will maintain crop insurance at all times in an amount of not less than $ 500,000 for tier 1 and 1,000,000 for tier 2 combined single limit per occurrence.

7.7. Waiver of Subrogation

Lessee and Lessor each waive any right of action that they and/or their respective insurance carriers might have against Lessor for any loss, cost, damage, or expense (collectively “Loss”) to the extent that the Loss is covered by any property insurance policy or policies required to be maintained under this Lease and to the extent that the proceeds (which proceeds are free and clear of any interest of third parties) are received by the party claiming the Loss. Lessee and Lessor also waive any right of action they and/or their insurance carriers might have against Lessor or Lessee (including their respective employees, officers, or agents) for any Loss to the extent the Loss is a property loss covered under any applicable automobile liability policy or policies required by this Lease. If any of Lessee’s or Lessor’s property or automobile insurance policies do not allow the insured to waive the insurer’s rights of subrogation before a Loss, each will cause the policies to be endorsed with a waiver of subrogation that allows the waivers of subrogation required by this Section 7.7. Nothing contained herein will be construed to relieve Lessee from any Loss suffered by Lessor that is not fully covered by Lessor’s insurance described in Article 8. Lessee will be liable for any uninsured Loss (including any deductible) if the Loss was caused by any act or omission of Lessee or any of Lessee’s employees, agents, contractors, or invitees.




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Article 8 LESSOR INSURANCE

Lessor will maintain liability insurance for the Property, as generally described in Section 7.6.1, in addition to, and not in lieu of, the insurance required to be maintained by Lessee in an amount not less than $2,000,000. Lessee will not, however, be named as an additional insured on the policy. Lessor will obtain and keep in force a policy or policies of insurance in the name of Lessor, with loss payable to Lessor and to any lender insuring loss or damage to the Building shell and Lessor-owned improvements located within the Building and Common Areas. Lessee- owned or installed improvements, alterations, utility installations, trade fixtures, and personal property will all be insured by Lessee as provided in Section 7.6.1. If the coverage is available and commercially appropriate, the policy or policies must insure against all risks of direct physical loss or damage (except the perils of flood and/or earthquake unless required by a lender), including coverage for debris removal and the enforcement of any applicable requirements for the upgrading, demolition, reconstruction, or replacement of any portion of the Property as the result of a covered loss. The policy or policies will also contain an agreed valuation provision in lieu of any coinsurance clause, waiver of subrogation, and inflation guard protection causing an increase in the annual property insurance coverage amount by a factor of not less than the CPI-U (Consumer Price Index for All Urban Consumers). Lessee pays a proportionate share of this insurance coverage through the CAM Charges (defined in Section 4.7.2). Lessor may elect to self- insure or partially self-insure. Lessor may also elect not to insure certain elements of the Common Areas if insurance coverage is not available at a commercially reasonable cost to the Building shell, foundation, or Building system.

Article 9 DAMAGE OR DESTRUCTION

In the event of partial or full damage or destruction to the Premises or the Property, the following will apply:

9.1 Definitions

9.1.1 Partial Damage

“Partial Damage” means damage or destruction that can reasonably be repaired in three (3) months or less from the date of the damage or destruction, and the cost thereof is equal to or less than 1 (one) months’ Basic Rent. Lessor will notify Lessee in writing within 30 days from the date of the damage or destruction about whether the damage is partial or total. Partial Damage does not include damage to windows, doors, or other similar improvements, or systems that Lessee has the responsibility to repair or replace under the provisions of this Lease.



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9.1.2 Total Destruction

“Total Destruction” means damage or destruction to the Building shell, foundation, roof, or building systems that cannot reasonably be repaired in three (3) months or less from the date of the damage or destruction and/or the cost thereof exceeds a sum equal to two (2) months’ Basic Rent. Lessor will notify Lessee in writing within 30 days from the date of the damage or destruction about whether the damage is partial or total.

9.1.3 Insured Loss

“Insured Loss” means damage or destruction to improvements on the Premises that was caused by an event required to be covered by Lessor’s insurance described in Article 8, irrespective of any deductible amounts or coverage limits involved.

9.1.4 Replacement Cost

“Replacement Cost” means the cost to repair or rebuild the improvements owned by Lessor at the time of the occurrence to their condition existing immediately prior thereto (or to a higher standard if required by current applicable law), including demolition and debris removal and without deduction for depreciation.

9.1.5 Hazardous Substance Condition

“Hazardous Substance Condition” means the occurrence or discovery of a condition involving the presence of, or a contamination by, a Hazardous Substance as defined in Section 11.1.6, in, on, or under the Premises or Building, that requires repair, remediation, or restoration.

9.2 Partial Damage - Insured Loss

If a Partial Damage that is an Insured Loss occurs, then Lessor will, at Lessor’s expense, repair the damage (but not to Lessee’s trade fixtures or Lessee’s other improvements) as soon as reasonably possible, and this Lease will continue in full force and effect. Notwithstanding the foregoing, if the required insurance was not in force or the insurance proceeds are not sufficient to effect the repair, Lessor will promptly contribute the shortage in proceeds as and when required to complete the repair. If, however, the shortage was due to the fact that, by reason of the unique nature of the Building, full-replacement cost insurance coverage was not commercially reasonable and available, Lessor will have no obligation to pay for the shortage in insurance proceeds or to fully restore the unique aspects of the Premises unless Lessee provides Lessor with the funds to cover same, or adequate assurance thereof, within 10 days following receipt of written notice of the shortage and request therefor. If Lessor receives the funds or adequate assurance thereof within the 10-day period, Lessor will complete the repairs as soon as reasonably possible, and this Lease will remain in full force and effect.



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If the funds or assurance are not received, Lessor may nevertheless elect by written notice to Lessee within 10 days thereafter to: (a) make such restoration and repair as is commercially reasonable with Lessor paying any shortage in proceeds, in which case this Lease will remain in full force and effect; or (b) have this Lease terminate 30 days thereafter. Lessee will not be entitled to reimbursement of any funds contributed by Lessee to repair any such damage or destruction. Lessee will be responsible to make any repairs to any of its own improvements to the Premises, including all of its trade fixtures.

9.3 Partial Damage - Uninsured Loss

If a Partial Damage that is not an Insured Loss occurs to the Building, unless caused by a negligent or willful act of Lessee (in which event Lessee will make all the repairs at Lessee’s expense), Lessor may either: (a) repair the damage as soon as reasonably possible at Lessor’s expense, in which event this Lease will continue in full force and effect; or (b) terminate this Lease by giving written notice to Lessee within 30 days after receipt by Lessor of knowledge of the occurrence of the damage. The termination will be effective 60 days following the date of the notice. If Lessor elects to terminate this Lease, Lessee will have the right within 10 days after receipt of the termination notice to give written notice to Lessor of Lessee’s commitment to pay for the repair of the damage without reimbursement from Lessor. Lessee will provide Lessor with the funds or satisfactory assurance thereof within 30 days after making such commitment. In that event, this Lease will continue in full force and effect, and Lessor will proceed to make the repair as soon as reasonably possible after the required funds are available. If Lessee does not make the required commitment, this Lease will terminate as of the date specified in the termination notice. To the extent that damages to the Common Areas constitute an Uninsured Loss, Lessor may elect to repair those damages and recover the uninsured portion thereof through CAM Charges. If the uninsured damage was caused by the negligence or misconduct of Lessee, Lessor will have the right to recover Lessor’s full damages from Lessee.

9.4 Total Destruction

If Total Destruction occurs, this Lease will terminate 30 days following the destruction. If the damage or destruction was caused by the negligence or misconduct of Lessee, Lessor will have the right to recover all of Lessor’s damages from Lessee, except as provided in the waiver of subrogation as set forth in Section 7.7, less any deductible, and including all Basic Rent that would otherwise have been due through the end of the Lease Term, mitigated only to the extent required by state law.

9.5 Damage near End of Lease

If at any time during the last six months of this Lease there is damage for which the cost to repair exceeds one month’s Basic Rent, whether or not an Insured Loss, Lessor may terminate this Lease effective 60 days following the date of occurrence of the damage by giving a written termination notice to Lessee within 30 days after the date of occurrence of the damage.



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9.6 Abatement of Rent; Lessee’s Remedies


9.6.1 Abatement


In the event of Partial Damage, Total Destruction, or a Hazardous Substance Condition for which Lessee is not responsible under this Lease, the Basic Rent payable by Lessee for the period required for the repair, remediation, or restoration of the damage will be abated in proportion to the degree to which Lessee’s use of the Premises is impaired. All other obligations of Lessee hereunder will be performed by Lessee, and Lessor will have no liability for any such damage, destruction, remediation, repair, or restoration, except as provided in Section 9.6.2.

9.6.2 Remedies

If Lessor is obligated to repair or restore the Premises and does not commence, in a substantial and meaningful way, the repair or restoration within 90 days after the obligation accrues, Lessee may, at any time before the commencement of the repair or restoration, give written notice to Lessor of Lessee’s election to terminate this Lease on a date not less than 60 days following the giving of the notice. If Lessee gives the notice and the repair or restoration is not commenced within 30 days thereafter, this Lease will terminate as of the date specified in the notice. If the repair or restoration is commenced within 30 days, this Lease will continue in full force and effect. “Commence” means either the unconditional authorization of the preparation of the required plans, or the beginning of the actual work on the Premises, whichever first occurs.

9.7 Waiver of Certain Alternative Rights

To the extent allowed by law, Lessor and Lessee agree that the terms of this Lease will govern the effect of any damage to or destruction of the Premises and Property with respect to the termination of this Lease and hereby waive the provisions of any present or future statute to the extent inconsistent herewith.

9.8. No Lessor Liability

Notwithstanding any of the provision of this Article 9, Lessor shall not be liable to Lessee for any damage or loss of Lessee’s crop for any reason.

Article 10 TERMINATION OF LEASE

10.0 Keys and Surrender Condition

Upon termination of this Lease, Lessee will deliver all keys to Lessor and surrender the Premises free of mold, mildew and pest, broom clean, in good condition, ordinary wear and tear excepted. Alterations constructed by Lessee with permission from Lessor are not to be removed or restored to the original condition unless required by Lessor, as provided in Section 10.1. All repairs for which Lessee is responsible will be completed before the surrender.



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10.1 Title to Lessee Improvements upon Termination


All improvements, excluding Personal Property (defined in Section 10.2) and Lessee’s trade fixtures, located on the Premises at the expiration or earlier termination of this Lease, will, at Lessor’s option, become the sole property of Lessor. Notwithstanding the foregoing, Lessor reserves the right, in its sole discretion, to require Lessee to remove some or all the improvements placed on the Premises by Lessee from the Premises upon termination of this Lease. Lessor will give Lessee at least 30 days’ advance written notice of the need to remove any improvements. Thereafter, Lessee will have the longer of 30 days after such notice is given or the last day of the Lease Term to remove the improvements that Lessor has designated for removal. Rent will continue to accrue at the holdover rate until all improvements that Lessor has designated for removal are removed.

10.2 Lessee’s Personal Property

Removable decorations, detached floor coverings, detached signs, detached blinds, detached furnishings, detached trade fixtures (does not include Growing Equipment or any other equipment or systems provided by Lessor), marijuana plants, and other personal property, and any fuel tanks placed on the Premises by Lessee (“Personal Property”) will remain the property of Lessee. At or before the termination of this Lease, Lessee, at Lessee’s expense, will remove from the Premises any and all of Lessee’s Personal Property and will repair any damage to the Premises resulting from the installation or removal of the Personal Property to Lessor’s satisfaction. Any items of Lessee’s Personal Property that remain on the Premises after the termination date of this Lease, subject to the provisions of Article 12.2.6 below, may either be: (a) retained by Lessor without any requirement to account to Lessee therefor; or (b) removed and disposed of by Lessor, without any requirement to account to Lessee therefor, with Lessor being entitled to recover all costs thereof from Lessee.

10.3 Time for Removal

The time for removal of any Personal Property or improvements made by Lessee that Lessee is required to remove from the Premises on termination will be as follows: (a) by the Expiration Date; or (b) if this Lease is terminated unexpectedly before the Expiration Date, then all removal must occur within three (3) days following the actual termination date, and Lessee must continue to pay all Rent due until such time as all of Lessee’s Personal Property and the improvements required to be removed have been properly and completely removed.




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10.4 Holdover

Lessee has no holdover rights. If Lessee fails to vacate the Premises at the time required, Lessor will have the option to treat Lessee as a holdover Lessee from month to month, subject to all the provisions of this Lease except that the Basic Rent will be 150 percent of the then-current Basic Rent, or to eject Lessee from the Premises by self-help and recover damages caused by wrongful holdover. If a month-to-month holdover tenancy results, it will be terminated at the end of any monthly rental period on 30 days’ written notice from Lessor, and Lessee waives any notice that would otherwise be provided by law with respect to such tenancy.

Article 11 ENVIRONMENTAL OBLIGATIONS OF LESSEE

11.1 Definitions

As used in this Lease, the following terms are defined as follows:

11.1.1 Aboveground Storage Facility

“Aboveground Storage Facility” or “AST Facility” includes aboveground storage tanks, aboveground piping, dispensers, related underground and aboveground structures and equipment, including without limitation associated spill containment features and oil-water separators, and the surrounding area used in connection with the operation for fueling and other management of Hazardous Substances.

11.1.2 Best Management Practices

“Best Management Practices” means those environmental or operational standards: (a) implemented by a business or industry group pertinent to Lessee’s operations as a matter of common and accepted practice, (b) articulated by a trade association or professional association pertinent to Lessee’s operations, (c) developed by Lessee for use in its operations, (d) developed by pertinent state or local regulatory agencies for a business or industry group pertinent to Lessee’s operations, including, without limitation, any standards developed by the OLCC or any other agency of the State of Oregon in connection wit the production of cannabis, now in effect or as hereafter may be promulgated, or (e) developed from time to time by Lessor in cooperation with Lessee.

11.1.3 Environmental Audit

“Environmental Audit” means an environmental site assessment and compliance audit satisfying, at a minimum, the “all appropriate inquiry” requirements of the Comprehensive Environmental Response, Compensation, and Liability Act, as amended, 42 USC § 9601(35)(B) ; the Oil Pollution Act, as amended, 33 USC §2703(d)(4) ; 40 CFR Part 312 ; ORS 465.255(6) ; ASTM E1527-13 (Standard Practice for Environmental Site Assessments:



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Phase 1 Environmental Site Assessment Process); and any other compliance assessment or auditing standards, including ASTM E2107-06 (Standard Practice for Environmental Regulatory Compliance Audits), relevant and appropriate to Lessee’s use of the Premises, or the successors to any of these criteria or standards. If as a result of such an Environmental Audit, additional evaluation, testing, or analysis, or supplemental audit work is recommended, then the Environmental Audit includes the additional evaluation, testing, or analysis, or supplemental audit work scoped and performed in accordance with commercially reasonable practices.

11.1.4 Environmental Costs

“Environmental Costs” will be interpreted in the broadest sense to include, but are not necessarily limited to: (a) costs or expenses relating to any actual or claimed violation of or noncompliance with any Environmental Law; (b) all claims of third parties, including governmental agencies, for damages, response costs, or other relief; (c) the cost, expense, or loss to Lessor as a result of any injunctive relief, including preliminary or temporary injunctive relief, applicable to Lessor or the Premises; (d) all expenses of evaluation, testing, analysis, cleanup, remediation, removal, and disposal relating to Hazardous Substances, including fees of attorneys, engineers, consultants, paralegals, and experts; (e) all expenses of reporting the existence of Hazardous Substances or the violation of Environmental Laws to any agency of the State of Oregon or the United States as required by applicable Environmental Laws; (f) any and all expenses or obligations, including without limitation attorney and paralegal fees, incurred at, before, and after any trial or appeal therefrom or any administrative proceeding or appeal therefrom, whether or not taxable as costs, including without limitation attorney and paralegal fees, witness fees (expert and otherwise), deposition costs, copying, telephone and telefax charges, and other expenses; and (g) any damages, costs, fines, liabilities, and expenses that are claimed to be owed by any federal, state, or local regulating or administrative agency.

11.1.5 Environmental Laws

“Environmental Laws” will be interpreted in the broadest sense to include any and all federal, state, and local statutes, regulations, rules, and ordinances (including those of the Oregon Department of Environmental Quality (DEQ) or any successor agency) now or hereafter in effect, as they may be amended from time to time, that in any way govern materials, substances, or products and/or relate to the protection of health, safety, or the environment.

11.1.6 Hazardous Substances

“Hazardous Substances” will be interpreted in the broadest sense to include any substance, material, or product defined or designated as hazardous, toxic, radioactive, or dangerous, regulated wastes or substances, pesticides banned by any state or federal agency, or any other similar term in or under any Environmental Laws including,



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without limitation, those banned for use in conjunction with marijuana by the OLCC, OHA and/or Oregon Department of Agriculture. No marijuana processing using butane, propane, hexane or other dangerous/flammable solvent will be allowed on the property, except the use of 100% ethanol is permitted on the Premises if stored and handled in compliance with all applicable laws, rules and regulations and as per the maximum storage designated for each control area (Exhibit H). Lessee shall test all plants for Hazardous Substances prior to their entry into the Premises.

11.1.7 Hazardous Substance Release

“Hazardous Substance Release” includes the spilling, discharge, deposit, injection, dumping, emitting, releasing, placing, leaking, migrating, leaching, and seeping of any Hazardous Substance into the air or into or on any land, sediment, or waters, except any release in compliance with Environmental Laws and specifically authorized by a current and valid permit issued under Environmental Laws with which Lessee is in compliance at the time of the release, but not including within the exception any such release in respect of which the State of Oregon has determined that application of the State’s Hazardous Substance removal and remedial action rules might be necessary to protect public health, safety, or welfare, or the environment.

11.1.8 Natural Resources Damage

“Natural Resources Damage” is the injury to, destruction of, or loss of natural resources resulting from a Hazardous Substance Release. The measure of damage is the cost of restoring injured natural resources to their pre-Hazardous Substance Release baseline condition, compensation for the interim loss of injured natural resources pending recovery, and the reasonable cost of a damage assessment. Natural resources include land, fish, wildlife, biota, air, water, groundwater, drinking water supplies, and other such resources belonging to, managed by, held in trust by, appertaining to, or otherwise controlled by the United States, any state, an Indian tribe, or a local government.

11.2 Limited Business Use of Hazardous Substances

Only upon prior written notice to Lessor and Lessor’s consent, which may be withheld under Lessor’s sole discretion, Lessee is permitted to use, handle, and store Hazardous Substances as necessary to conduct its Permitted Uses and in quantities needed to conduct its Permitted Uses, in compliance with applicable Environmental Laws, Best Management Practices, and the provisions of this Lease. Lessor acknowledges and agrees that Lessee may use ethanol on the Premises to conduct Lessee’s business and will abide by all applicable laws, rules and regulations and as per the maximum storage designated for each control area (Exhibit H)



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11.3 Hazardous Substance Storage Tanks

Lessee may not operate mobile storage tanks (including fueling trucks), Aboveground Storage Tanks (“AST”), or any AST Facility for the storage of Hazardous Substances except with the prior written consent of Lessor, which consent may be granted or denied in Lessor’s sole discretion. For the purposes of this Section 11.3, “Above ground Storage Tank” or “AST” means any tank with a capacity of greater than 55 gallons. No underground storage tanks are allowed to be installed by Lessee on the Premises.

11.3.1 Spill Prevention and Response Plan

If Lessee operates mobile storage tanks or an AST Facility, Lessee will provide to Lessor a written Spill Prevention and Response Plan (“SPAR Plan”) that addresses the measures to be followed by Lessee to prevent, control, and perform corrective actions in the event of a Hazardous Substance Release at or from the Premises. In addition to meeting all requirements of applicable law, the SPAR Plan will address the measures Lessee will take to prevent Hazardous Substances Releases and to respond immediately to any Hazardous Substance Release. A copy of the SPAR Plan will be maintained at the Premises, and a copy will be provided to Lessor within 30 days of the Effective Date of this Lease. The SPAR Plan will be revised and updated to reflect current operations of Lessee and Lessee’s representatives at the Property as necessary, but at a minimum every three (3) years. Lessor will be provided a copy of all such revisions and updates. In addition to any elements required by Environmental Laws, Lessee will address the following in its SPAR Plan, or at its option in a separate document: (a) procedures for the proper receipt, storage, and dispensing of Hazardous Substances authorized as a Permitted Use, including the maintenance, observation and monitoring, safety checks, and safe practices applicable to the Lessee AST Facility; (b) procedures for regular inspection of each AST system within the AST Facility, including but not limited to confirmation that each such system and key components, such as pumps, hoses, and fittings, are in good and safe working condition; (c) procedures for promptly, but in no case later than within 48 hours of acquiring relevant information or knowledge, notifying Lessor of any suspected or confirmed Hazardous Substance Release, and for verbal and written notification to appropriate regulatory agencies under applicable Environmental Laws required in connection therewith; (d) operating procedures for spill contingency and emergency response to Hazardous Substance Releases, including the designation of individuals responsible for directing the removal, response, and restoration actions for the releases; (e) procedures to address large Hazardous Substance Releases that on-site resources may be inadequate to manage, including but not limited to identification of an outside 24-hour emergency response contractor to handle large Hazardous Substance Releases; (f) procedures to keep Lessor timely informed during the course of Lessee’s response to a Hazardous Substance Release; (g) provision for prompt use of on-site spill response equipment designed to keep a Hazardous Substance Release from reaching other property,



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storm water or sanitary sewers, or area groundwater or surface waters; (h) provision for trained on-site personnel to operate any Lessee spill response equipment during filling and dispensing operations and to be available on call at all other times; (i) provision for prompt regular submission to Lessor of copies of all relevant permits, consents, approvals, reports, and other correspondence with any regulatory agencies pertaining to the AST Facility and their compliance in any material respect with Environmental Laws; and (j) provision for training of personnel to implement Lessee’s SPAR Plan and Lessee’s compliance with applicable Environmental Laws.

11.4 Soil or Waste

Lessee will not store, treat, deposit, place, or dispose of treated or contaminated soil, industry by-products, or any other form of waste on the Property or Premises, without the prior written consent of Lessor, which consent may be granted or denied in Lessor’s sole discretion.

11.5 Environmental Inspection

Lessor reserves the right to inspect for Hazardous Substances and/or Lessee’s management of Hazardous Substances on the Premises at any time, and from time to time, without notice to Lessee. If Lessor at any time during the Lease term or any extension thereof has reason to believe that Lessee is handling Hazardous Substances contrary to the requirements of this Lease, in violation of this Lease, or in any manner that may allow contamination of the Property or Premises, Lessor may, without limiting its other rights and remedies, cause to be conducted an Environmental Audit with respect to the matters of concern to Lessor. Lessee will cooperate with all such audits. If Lessor’s suspicions are confirmed by the audit, Lessee will reimburse Lessor for the full cost of the audit.

11.6 Safety

Under the terms of this Lease, Lessee must comply with all applicable state, federal (not including the Controlled Substance Act (CSA), 21 U.S.C ch. 13 §801 et. seq.), and local laws and ordinances regarding safety, including the handling of Hazardous Substances. As a part of this requirement, Lessee will maintain material safety data sheets for each and every Hazardous Substance used by Lessee, or Lessee’s agents, employees, contractors, licensees, or invitees on the Property or Premises, as required under the Hazard Communication Standard in 29 CFR Section 1910.1200 , as it may be amended, re-designated, or retitled from time to time, and comparable state and local statutes and regulations, including OLCC Rules. To ensure that such information is available to Lessor in the event of a spill or other emergency, all the information will be kept current at all times, and a copy of all such materials will be kept in a place known to and easily accessible to Lessor.



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11.7 Disposal of Hazardous Substances

Lessee will not dispose of any Hazardous Substance, regardless of the quantity or concentration, within the storm or sanitary sewer drains or plumbing facilities within the Premises or the Property. The disposal of Hazardous Substances will be in approved containers, and Hazardous Substances will be removed from the Property or Premises only in accordance with the law. If Lessee knows, or has reasonable cause to believe, that any Hazardous Substance Release has come to be located on or beneath the Property or Premises, Lessee must immediately give written notice of that condition to Lessor, whether or not the Hazardous Substance Release was caused by Lessee.

11.8 Lessee’s Liability

11.8.1 Hazardous Substance Releases

Except as provided in Section 11.8.3, Lessee will be responsible for any Hazardous Substance Release on the Property or Premises, on other properties, in the air, or in adjacent or nearby waterways (including groundwater) that results from or occurs in connection with Lessee’s occupancy or use of the Property or Premises.

11.8.2 Lessee’s Liability for Environmental Costs

Except as provided in Section 11.8.3, Lessee will be responsible for all Environmental Costs arising under this Lease.

11.8.3 Limitation of Lessee’s Liability

Notwithstanding anything to the contrary provided in this Lease, particularly in Section 11.9.2, Lessee will have no responsibility for any Hazardous Substances or Hazardous Substance Releases that: (a) existed on the Property or Premises before the Effective Date; (b) were caused by Lessor or the agents, employees, or contractors of Lessor; or (c) Lessee can demonstrate migrated into the Premises from a source off-Premises that was not caused by Lessee.

11.9 Environmental Remediation

11.9.1 Immediate Response

In the event of a violation of applicable Environmental Laws, a violation of an environmental provision of this Lease, a Hazardous Substance Release, or the threat of or reasonable suspicion of the same for which Lessee is responsible under this Lease, Lessee will immediately undertake and diligently pursue all acts necessary or appropriate to correct the violation or to investigate, contain, and stop the Hazardous Substance Release and remove the Hazardous Substance.



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11.9.2 Remediation

Lessee will promptly undertake all actions necessary or appropriate to ensure that any Hazardous Substance Release is re-mediated and that any violation of any applicable Environmental Laws or environmental provision of this Lease is corrected. Lessee will re-mediate, at Lessee’s sole expense, any Hazardous Substance Release for which Lessee is responsible under this Lease and will restore the Premises to its baseline condition, as established in the Initial Audit (defined in Section 11.14.1). Lessee will also re mediate any Hazardous Substance Release for which it is responsible under this Lease on any other impacted property, including the Building and Property, or bodies of water. The obligations of Lessee under this Section 11.9.2 are subject to the limitations on Lessee’s liability set forth in Section 11.8.3.

11.10 Natural Resources Damages Assessment and Restoration

Lessee will promptly undertake, at Lessee’s sole expense, all actions necessary to ensure that any Natural Resources Damage associated with Lessee’s use or occupancy of the Property or Premises and the violation of Environmental Laws, the environmental provisions of this Lease, or any Hazardous Substance Release is investigated, determined, quantified, assessed, and permanently restored and compensated for, to the extent legally required by any natural resource trustee with jurisdiction over the matter.

11.10.1 Report to Lessor

Within 30 days following completion of any investigatory, containment, remediation, or removal action required by this Lease, Lessee will provide Lessor with a written report outlining, in detail, what has been done and the results thereof.

11.10.2 Lessor’s Approval Rights

Except in the case of an emergency or an agency order requiring immediate action, Lessee will give Lessor advance notice before beginning any investigatory, remediation, or removal procedures. Lessor will have the right to approve or disapprove the proposed investigatory, remediation, or removal procedures and the company or companies and individuals conducting the procedures that are required by this Lease or by applicable Environmental Laws, whether on the Property, Premises, or any affected property or water. Lessor will have the right to require Lessee to contract for and fund oversight by any governmental agency with jurisdiction over any investigatory, containment, removal, remediation, and restoration activities and to require Lessee to seek and obtain a determination of no further action or an equivalent completion-of-work statement from the governmental agency.



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11.11 Notice to Lessor

Lessee will immediately notify Lessor upon becoming aware of: (a) a violation or alleged violation of any Environmental Law; (b) any leak, spill, release, or disposal of a Hazardous Substance on, under, or adjacent to the Property or Premises or threat of or reasonable suspicion of any of the same; and (c) any notice or communication to or from a governmental agency or any other person directed to Lessee or any other person relating to such Hazardous Substances on, under, or adjacent to the Property or Premises or any violation or alleged violation of, or noncompliance or alleged noncompliance with, any Environmental Laws with respect to the Property or Premises.

11.12 Certification

Not later than 30 days after receipt of written request from Lessor, Lessee will provide a written certification to Lessor, signed by Lessee, that certifies that Lessee has not received any notice from any governmental agency regarding a violation of or noncompliance with any Environmental Law; or, if such a notice was received, Lessee will explain the reason for the notice, explain what has been done to remedy the problem, and attach a copy of the notice. Lessee will also certify that Lessee has obtained and has in force all permits required under Environmental Law. Lessee will make copies of all such permits available to Lessor upon request.

11.13 Documentation of Hazardous Substances

Lessee will maintain for periodic inspection by Lessor and deliver to Lessor, at Lessor’s request, true and correct copies of the following documents (hereinafter referred to as the “Documents”) related to the handling, storage, disposal, and emission of Hazardous Substances, concurrently with the receipt from or submission to a governmental agency: permits; approvals; reports and correspondence; storage and management plans; material safety data sheets (MSDS); spill prevention control and countermeasure plans; other spill contingency and emergency response plans; documents relating to taxes for Hazardous Substances; notice of violations of any Environmental Laws; plans relating to the installation of any storage tanks to be installed in, under, or around the Property or Premises (but the installation of tanks will be permitted only after Lessor has given Lessee its written consent to do so, which consent may be withheld in Lessor’s sole discretion); and all closure plans or any other documents required by any and all federal, state, and local governmental agencies and authorities for any storage tanks or other facilities installed in, on, or under the Property or Premises.



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Article 12 LESSEE DEFAULT

12.1 Events of Default

The following will constitute an “Event of Default” if not cured within the applicable cure period as set forth below:

12.1.1 Default in Rent

Failure of Lessee to pay any Rent or other charge within ten (10) days of the due date.

12.1.2 Default in Other Covenants

Failure of Lessee to comply with any term or condition or fulfill any obligation of the Lease or Rules and Regulations (other than the payment of Rent or other charges) within seven (7) days after written notice by Lessor specifying the nature of the default with reasonable particularity. If the default is of such a nature that it cannot be completely remedied within the 7- day period, Lessee will be in compliance with this provision if Lessee begins correction of the default within the 7-day period and thereafter proceeds with reasonable diligence and in good faith to effect the remedy as soon as practicable. Notwithstanding the foregoing, if Lessee violates the same provision of this Lease more than two (2) times in any given 1-year period, then the violation will constitute an immediate Event of Default for which no further notice or cure period need be granted by Lessor.

12.1.3 Insolvency

·

(a)  An assignment by Lessee for the benefit of creditors;

·

(b)  Filing by Lessee of a voluntary petition under the Bankruptcy Code or commencement by Lessee of receivership or any insolvency proceeding under any law;

·

c) Adjudication that Lessee is bankrupt or insolvent;

(d) Appointment or designation of a receiver, trustee, custodian, turnaround officer or agent of any of the properties of Lessee;

(e) Commencement of an involuntary petition under the Bankruptcy Code, commencement of any proceeding to dissolve the Lessee or to wind up or liquidate the business or affairs of the Lessee or commencement of any other insolvency proceeding under any law against the Lessee and failure of the Lessee to secure a dismissal of the petition or proceeding within 15 days after the commencement date;



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(f)Attachment of or the levying of execution on the leasehold interest and failure of the Lessee to secure discharge of the attachment or release of the levy of execution within 15 days;

(g) The Lessee files or delivers to Secretary of State articles of dissolution or an application to withdraw from transacting business or a court enters a judgment of dissolution that directs the winding up and liquidation of the Lessee’s business and affairs.

(h) The Lessee abandons the Premises or ceases to operate the Lessee’s business as permitted under Section 2.2.

(i) The Lessee adopts a resolution that authorizes the dissolution or winding up of the Lessee’s business or affairs or that otherwise authorizes any of the actions in 12.1.3(a) through (h).

(j)If Lessee files a voluntary petition for relief under the Bankruptcy Code, Lessee unconditionally and irrevocably agrees that Lessor shall be entitled, and Lessee unconditionally consents, to relief from the automatic stay so as to allow Lessor to exercise its rights and remedies under this Lease, the Building or the Premises. In such event, Lessee hereby agrees it shall not, in any manner, oppose or otherwise delay any motion filed by Lessor for relief from the automatic stay. Lessor’s enforcement of the rights granted herein for relief from the automatic stay is subject to the approval of the bankruptcy court in which the case is then pending.

12.2 Remedies on Default

If an Event of Default occurs, Lessor, at Lessor’s sole option, may restrict Lessee’s access to the Premises and terminate this Lease by notice, in writing, in accordance with Section 17.9. The notice may be given before or within any of the above-referenced cure periods or grace periods for default and may be included in a notice of failure of compliance, but the termination will be effective only on the expiration of the above-referenced cure periods or grace periods. If the Premises is abandoned by Lessee in connection with any other default, termination may be automatic and without notice, at Lessor’s sole option.

Whether or not Lessor terminates the Lease, Lessor may retake possession of the Premises and any re-let or use of the Premises by Lessor shall not be deemed a surrender or waiver of Lessor’s right to damages. If Lessor retakes possession of the Premises, whether through self-help or otherwise, Lessor’s mitigation efforts shall be deemed sufficient if Lessor follows commercially reasonable procedures and otherwise complies with Oregon Law.




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12.2.1 Termination and Damages

If this Lease is terminated, Lessor will be entitled to recover promptly, without waiting until the due date, any past due Rent together with future Rent that would otherwise become due and owing up to and through the date fixed for expiration of the Lease Term; any damages suffered by Lessor as a result of the Event of Default, including without limitation all obligations of Lessee; and the reasonable costs of reentry and re-letting the Premises, including without limitation, the cost of any cleanup, refurbishing, removal of Lessee’s Personal Property including fixtures and any storage costs, or any other expense occasioned by Lessee’s failure to quit the Premises upon termination and to leave them in the condition required at the expiration of this Lease, any remodeling costs, attorney fees, court costs, broker commissions, and advertising costs. Except as required by Oregon law, Lessor will have no obligation to mitigate damages at the time of termination.

12.2.2 Reentry after Termination

If the Lease is terminated or abandoned for any reason, Lessee’s liability for damages will survive the termination, and the rights and obligations of the Parties will be as follows:

(a) Lessee will vacate the Premises immediately; remove any Personal Property of Lessee, including any fixtures that Lessee is required to remove at the end of the Lease Term; perform any cleanup, alterations, or other work necessary to leave the Premises in the condition required at the end of the term; and deliver all keys to Lessor.

(b) Lessor may reenter, take possession of the Premises, and remove any persons or Personal Property by legal action or by self-help with the use of reasonable force and without liability for damages. Lessee’s Personal Property found in the Premises shall be deemed abandoned and owned by Lessor, who may dispose of it as Lessor sees fit.

12.2.3 Re-letting

Following termination, reentry, or abandonment, Lessor may re-let the Premises and in that connection may:

(a) Make any suitable alterations, refurbish the Premises, or both, or change the character or use of the Premises, but Lessor will not be required to re-let for any use or purpose (other than that specified in the Lease) that Lessor may reasonably consider injurious to the Premises, or to any tenant that Lessor may reasonably consider objectionable.

(b) Re-let all or part of the Premises, alone or in conjunction with other properties, for a term longer or shorter than the term of this Lease, on any reasonable terms and conditions, including the granting of some rent-free occupancy or other rent concession.



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12.2.4 Right to Sue More Than Once

In an Event of Default, Lessor may elect to continue this Lease and to sue periodically to recover damages, and no action for damages will bar a later action for damages subsequently accruing.

12.2.5 Equitable Relief

Lessor may seek injunctive relief or an order of specific performance from any court of competent jurisdiction requiring that Lessee perform its obligations under this Lease.

12.2.6 Grant of Security Interest in Business

Pursuant to OLCC Rules 845-025-1260 and 845-025-1275, Lessee grants Lessor a limited security interest in its business as set forth in the attached Exhibit E. If Lessor retakes possession of the Premises either through the provisions of Article 12 or after the end of the Initial Lease Term or Extension Period and discovers marijuana plants and /or marijuana products within the Premises, Lessor shall be deemed a secured party for purposes of complying with the OLCC Rules to sell or otherwise dispose of the marijuana plants in accordance with OLCC Rules.

If Lessee is operating pursuant to a registration with the OHA, OHA rules and regulations shall apply in connection with disposal of the marijuana.

12.2.7. Federal Government Intervention

In the event Lessor receives a cease and desist letter from the U.S. Government concerning the operation of marijuana businesses in the Building or Premises, the Lease shall terminate on the date stated in the letter to cease operations. In the event that Lessor receives a cease and desist letter from the U.S. government concerning the operation of its business, Lessor shall notify Lessee immediately and provide Lessee a copy of the letter. Lessor shall not be liable to Lessee for any damages in connection with the termination of the Lease. In the event that Lessee receives a cease and desist letter from the U.S. government concerning the operation of its business, Lessee shall notify Lessor immediately and provide Lessor a copy of the letter. The Lease shall terminate on the date the U.S. Government provides to cease operations. Neither Lessor nor Lessee shall be liable to the other party for any damages in connection with the termination of the Lease. Nothing in this Section 12.2.7 shall limit Lessor’s remedies in rights in the other provisions of Section 12.

12.3 No Waiver of Default

No failure by Lessor to insist on the strict performance of any agreement, term, covenant, or condition of this Lease or to exercise any right or remedy consequent upon a breach, and no acceptance of partial Rent during the continuance of any breach, will constitute a waiver of the breach or of the agreement, term, covenant, or condition.



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No agreement, term, covenant, or condition to be performed or complied with by Lessee, and no breach by Lessee, will be waived, altered, or modified except by a written instrument executed by Lessor. No waiver of any breach will affect or alter this Lease, but each and every agreement, term, covenant, and condition of this Lease will continue in full force and effect with respect to any other then-existing or subsequent breach.

12.4 Remedies Cumulative and Nonexclusive

Each right and remedy of Lessor contained in this Lease will be cumulative and will be in addition to every other right or remedy in this Lease, or existing at law or in equity, including without limitation suits for injunctive relief and specific performance. The exercise or beginning of the exercise by Lessor of any such rights or remedies will not preclude the simultaneous or later exercise by Lessor of any other such rights or remedies. All such rights and remedies are nonexclusive.

12.5 Curing Lessee’s Default

If Lessee fails to perform any of Lessee’s obligations under this Lease, Lessor, without waiving the failure, may (but will not be obligated to) perform the same for the account of and at the expense of Lessee (using Lessee’s Security Deposit, Electricity Deposit or Lessor’s own funds, when required), after the expiration of the applicable cure period set forth in Section 12.1.2, or sooner in the case of an emergency. Lessor will not be liable to Lessee for any claim for damages resulting from such action by Lessor. Lessee agrees to reimburse Lessor, on demand, for any amounts Lessor spends in curing Lessee’s Default, including its attorney fees. Any sums to be so reimbursed will bear interest at the Delinquency Rate.

12.6 Administrative Costs

If Lessor gives Lessee one written notice of a violation of a specific provision of this Lease, and Lessee violates the same provision again during the subsequent 12-month period, then in addition to all other rights and remedies set forth herein, Lessee agrees to reimburse Lessor for Lessor’s administrative costs incurred in connection with any such subsequent violation. Failure by Lessee to pay the costs will be deemed an immediate Event of Default subject to all remedies set forth in this Article 12.





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Article 13 LESSOR DEFAULT

13.1 Breach by Lessor

13.1.1 Notice of Breach

Lessor will not be deemed in breach of this Lease unless Lessor fails within a reasonable time to perform an obligation required to be performed by Lessor. For purposes of this Section 13.1.1, a reasonable time will in no event be less than 30 days after receipt by Lessor, and any Lender whose name and address have been furnished to Lessee in writing for such purpose, of written notice specifying what obligation of Lessor has not been performed; however, a Lessor event of default will not occur if Lessor’s performance is commenced within the 30-day period and thereafter diligently pursued to completion.

13.1.2 No Self-Help

In the event that neither Lessor nor any Lender of Lessor cures any breach within the applicable cure period, Lessee will be entitled to seek any of the remedies provided in Section 13.1.3 but will not be entitled to take self-help action.

13.1.3 Remedies in the Event of a Lessor Default

If an uncured event of default is committed by Lessor, Lessee will be entitled to any remedies available at law or in equity for breach of lease; however, damages will be limited to actual damages, excluding consequential and punitive damages, and damages will also be limited to Lessor’s interest in the Property and will be subordinate to the rights of Lessor’s lenders.

Article 14 INDEMNITIES AND REIMBURSEMENT

14.1 General Indemnity

Lessee agrees to defend (using legal counsel reasonably acceptable to Lessor, taking into account insurance defense requirements), indemnify, and hold harmless Lessor from and against any and all actual or alleged claims, damages, expenses, costs, fees (including but not limited to attorney, accountant, paralegal, expert, and escrow fees), fines, liabilities, losses, penalties, proceedings, and/or suits (collectively “Costs”) that may be imposed on or claimed against Lessor, in whole or in part, directly or indirectly, arising from or in any way connected with (a) any act, omission, or negligence by Lessee or its partners, officers, directors, members, managers, agents, employees, invitees, or contractors; (b) any use, occupation, management, or control of the Premises or Property by Lessee, whether or not due to Lessee’s own act or omission; (c) any condition created in or about the Premises or Property by Lessee, including any accident, injury,



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or damage occurring on or about the Premises or Property during this Lease as a result of Lessee’s use thereof; (d) any breach, violation, or nonperformance of any of Lessee’s obligations under this Lease; or (e) any damage caused on or to the Premises or Property by Lessee’s use or occupancy thereof. As used throughout Article 14, “Lessee” includes all of Lessee’s partners, officers, directors, members, managers, agents, employees, invitees, and contractors.

14.2 Environmental Indemnity

Without in any way limiting the generality of the foregoing General Indemnity set forth in Section 14.1, Lessee will be solely responsible for and agrees to defend (using legal counsel reasonably acceptable to Lessor, taking into account insurance defense requirements), indemnify, and hold harmless Lessor from and against all Environmental Costs claimed against or assessed against Lessor arising, in whole or in part, directly or indirectly, from acts or omissions of Lessee on or about the Premises or Property. Notwithstanding the foregoing, Lessee will not be responsible for, and does not indemnify Lessor for, any actions of Lessor or any other tenant that cause environmental damage or a violation of any Environmental Law on the Premises or Property.

14.3 Reimbursement for Damages

Lessee will fully compensate Lessor for harm to Lessor’s real or personal property caused by the acts or omissions of Lessee. This compensation will include reimbursement to Lessor for any diminution in value of or lost revenue from the Premises or other areas of the Property or adjacent or nearby property caused by a Hazardous Substance Release, including damages for loss of, or restriction on use of, rentable or usable property or of any amenity of the Premises or Property, including without limitation damages arising from any adverse impact on the leasing or sale of the Premises or Property as a result thereof.

14.4 Survival

This Article 14 will survive the termination of this Lease with respect to all matters arising or occurring before surrender of the Premises by Lessee.

14.5 Scope of Indemnity

For purpose of this Article 14, references to “Lessor” are deemed to include its respective officers, directors, employees, agents, invitees, and contractors.




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Article 15 ASSIGNMENT AND ESTOPPELS

15.1 Consent Required

This Lease will not be assigned, subleased, or otherwise transferred except with the written consent of Lessor, which consent may be granted or denied in Lessor’s sole discretion. Any transfer of an ownership interest in Lessee of 51% or more will be deemed an assignment subject to this Section 15.1.

15.2 Estoppel Certificate

Each Party agrees to execute and deliver to the other, at any time and within 20 days after written request, a statement certifying, among other things: (a) that this Lease is unmodified and is in full force and effect (or if there have been modifications, stating the modifications); (b) the dates to which Rent has been paid; (c) whether the other Party is in default in performance of any of its obligations under this Lease and, if so, specifying the nature of each such default; and (d) whether any event has occurred that, with the giving of notice, the passage of time, or both, would constitute a default and, if so, specifying the nature of each such event. Each Party will also include any other information concerning this Lease as is reasonably requested. The Parties agree that any statement delivered under this Section 15.2 will be deemed a representation and warranty by the Party providing the estoppel that may be relied on by the other Party and by its potential or actual purchasers and lenders, regardless of independent investigation. If either Party fails to provide the statement within 20 days after the written request therefor, and does not request a reasonable extension of time, then that Party will be deemed to have given the statement as presented and will be deemed to have admitted the accuracy of any information contained in the request for the statement. A form of estoppel that has already been agreed to by both Parties is attached hereto as Exhibit D.

Article 16 CONDEMNATION

If the Premises or any interest therein is taken as a result of the exercise of the right of eminent domain or under threat thereof (a “Taking”), this Lease will terminate with regard to the portion that is taken. If either Lessee or Lessor determines that the portion of the Property or Premises taken does not feasibly permit the continuation of the operation of the facility by either the Lessee or Lessor, this Lease will terminate. The termination will be effective as of the date of the Taking. Any condemnation award relating to the Property or Premises will be the property of Lessor. Lessee will not be entitled to any proceeds of any such award, except Lessee will be entitled to any compensation attributed by the condemning authority to Lessee’s relocation expense, trade fixtures, or loss of business.



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Article 17 GENERAL PROVISIONS

17.1 Covenants, Conditions, and Restrictions

This Lease is subject and subordinate to the effect of any covenants, conditions, restrictions, easements, loans, mortgages, deeds of trust, ground leases, rights of way, and any other matters of record now or hereafter imposed on the Property and to any applicable land use or zoning laws or regulations. Lessee will, upon request of Lessor, execute and deliver agreements of subordination in the form reasonably requested by Lessor and described in Section 17.23.

17.2 Non-waiver

Waiver by either Party of strict performance of any provision of this Lease will not be a waiver of or prejudice the Party’s right to require strict performance of the same provision in the future or of any other provision.

17.3 Attorney Fees

If any suit, action, matter or other proceeding (including any contested matter or adversary proceeding under the U.S. Bankruptcy Code and/or Federal Rules of Bankruptcy Procedure) is instituted in connection with any controversy arising out of this Lease or to interpret or enforce any rights or obligations hereunder, the prevailing Party will be entitled to recover attorney, paralegal, accountant, and other expert fees and all other fees, costs, and expenses actually incurred and reasonably necessary in connection therewith, as determined by the court or body at trial or on any appeal or review, in addition to all other amounts provided by law. Payment of all such fees also applies to any administrative proceeding, petition for review, trial, and appeal. In addition, the Lessor will be entitled to recover from the Lessee all costs of collection of the Lessor (including but not limited attorney, paralegal, bookkeeper and accountant fees, out-of-pocket expenses, administrative costs and record keeping costs). Whenever this Lease requires one Party to defend the other Party, the defense will be by legal counsel acceptable to the Party to be defended, understanding that claims are often covered by insurance with the insurance carrier designating the defense counsel.

17.4 Time of Essence

Time is of the essence in the performance of all covenants and conditions to be kept and performed under the terms of this Lease.




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17.5 No Warranties or Guarantees

Lessor makes no warranty, guarantee, or averment of any nature whatsoever concerning the physical condition of the Premises or Property, or suitability of the Premises or Property for Lessee’s use. Lessor will not be responsible for any loss, damage, or costs that may be incurred by Lessee by reason of any such condition.

17.6 No Implied Warranty

In no event will any approval, consent, acquiescence, or authorization by Lessor be deemed a warranty, representation, or covenant by Lessor that the matter approved, consented to, acquiesced in, or authorized is appropriate, suitable, practical, safe, or in compliance with any applicable law or this Lease. Lessee will be solely responsible for such matters, and Lessor will have no liability therefor.

17.7 Construction

In construing this Lease, all headings and titles are for the convenience of the Parties only and are not considered a part of this Lease. Whenever required by the context, the singular includes the plural and vice versa.

17.8 Lessor Consent or Action

If this Lease is silent on the standard for any consent, approval, determination, or similar discretionary action, the standard is the sole discretion of Lessor, rather than any standard of implied good faith or reasonableness. If Lessee requests Lessor’s consent or approval under any provision of the Lease and Lessor fails or refuses to give the consent or approval, Lessee will not be entitled to any damages as a result of the failure or refusal, whether or not unreasonable. If Lessor has expressly agreed, in writing, not to act unreasonably in withholding its consent or may not unreasonably withhold its consent as a matter of law, and Lessor has, in fact, acted unreasonably in either of those instances, Lessee’s sole remedy will be an action for specific performance or injunction.

17.9 Notices

All notices required under this Lease will be deemed to be properly served when actually received or on the third Business Day (defined in Section 17.17) after mailing, if sent by certified mail, return receipt requested, to the last address previously furnished by the Parties hereto in accordance with the requirements of this Section 17.9 or after electronically mailing. Until hereafter changed by the Parties by notice in writing, sent in accordance with this Section 17.9, notices must be sent to the following addresses:



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If to Lessor: W.I.P.P.LLC

Attention: Richard Plainfield (Representative)


If to Lessee:

Lessee Business Name: This Budz For You Farms LLC Lessee


Signatory: _______________

Name: Daniel A. Goldin

Email: __________________

Secondary Email: ________________

Lessee's Attorney's Email: _______________


The addresses to which notices are to be delivered may be changed by giving notice of the change in address in accordance with this Notice provision. Lessor may provide notice by electronic mail, but Lessee must provide notice by certified mail.

17.10 Governing Law

This Lease is governed by and will be construed according to the laws of the State of Oregon, without regard to its choice-of-law provisions. Any action or suit to enforce or construe any provision of this Lease by either Party will be brought in the Circuit Court of the State of Oregon for Washington County.

17.11 Survival

Any covenant or condition (including, but not limited to, environmental obligations and all indemnification agreements) set forth in this Lease, the full performance of which is not specifically required before the expiration or earlier termination of this Lease, and any covenant or condition that by its terms is to survive, will survive the expiration or earlier termination of this Lease and will remain fully enforceable thereafter.

17.12 Partial Invalidity

If any provision of this Lease is held to be unenforceable or invalid, it will be adjusted rather than voided, if possible, to achieve the intent of the Parties to the extent possible. In any event, all the other provisions of this Lease will be deemed valid and enforceable to the fullest extent.



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17.13 Modification

This Lease may not be modified except by a writing signed by the Parties.

17.14 Successors

The rights, liabilities, and remedies provided in this Lease will extend to the heirs, legal representatives, and, as far as the terms of this Lease permit, successors and assigns of the Parties. The words “Lessor,” “Lessee,” and their accompanying verbs or pronouns, whenever used in the Lease, apply equally to all persons, firms, or corporations that may be or become parties to this Lease.

17.15 Limitation on Liability

The obligations under this Lease do not constitute any personal obligation of Lessor or any of its owners, members, partners, shareholders, officers, directors, or employees, and Lessee has no recourse against any of them. Lessor’s liability under this Lease is strictly limited to whatever interest it holds in the Premises, subject to and subordinate to any rights of the lenders or secured creditors of Lessor.

17.16 No Light or View Easement

The reduction or elimination of Lessee’s light or view will not affect Lessee’s obligations under this Lease, nor will it create any liability of Lessor to Lessee.

17.17 Calculation of Time

Unless referred to in this Lease as Business Days, all periods of time referred to in this Lease include Saturdays, Sundays, and Legal Holidays. However, if the last day of any period falls on a Saturday, Sunday, or Legal Holiday, then the period extends to include the next day that is not a Saturday, Sunday, or Legal Holiday. “Legal Holiday” means any holiday observed by the federal government. “Business Day” means any day Monday through Friday, excluding Legal Holidays.

17.18 Exhibits Incorporated by Reference

All exhibits attached to this Lease are incorporated by reference herein.

17.19 Brokers

Lessor will not pay any broker fees.



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17.20 Interpretation of Lease; Status of Parties

This Lease is the result of arms-length negotiations between Lessor and Lessee and will not be construed against Lessor by reason of its preparation of this Lease document. Nothing contained in this Lease will be deemed or construed as creating the relationship of principal and agent, partners, joint venturers, or any other similar relationship, between the Parties hereto.

17.21 No Recordation of Lease

This Lease will not be recorded.

17.22 Force Majeure

The time for performance of any of Lessee’s or Lessor’s obligations hereunder will be extended for a period equal to any hindrance, delay, or suspension in the performance of that Party’s obligations, beyond the Party’s reasonable control and directly impacting the Party’s ability to perform, caused by any of the following events: unusually severe acts of nature, including floods, earthquakes, hurricanes, and other extraordinary weather conditions; civil riots, war, terrorism, or invasion; any delay occurring in receiving approvals or consents from any governmental authority, including DEQ or other agency review of environmental reports (as long as an application for the approval or consent was timely filed and thereafter diligently pursued); major fire or other major unforeseen casualty; labor strike that precludes the Party’s performance of the work in progress; or extraordinary and unanticipated shortages of materials (each a “Force Majeure Event”). Lack of funds or willful or negligent acts of a Party will not constitute a Force Majeure Event. Further, it will be a condition to any extension of the time for a Party’s performance hereunder that the Party notify the other Party within five Business Days following the occurrence of the Force Majeure Event and diligently pursue the delayed performance as soon as is reasonably possible.

17.23 Subordination

This Lease is subordinate to any ground lease, mortgage, deed of trust, or other hypothecation or security device (collectively, “Security Device”), now or hereafter placed on the Property, to any and all advances made on the security thereof, and to all renewals, modifications, and extensions thereof. Lessee agrees that the holders of any Security Devices (in this Lease together referred to as “Lenders”) have no liability or obligation to perform any of the obligations of Lessor under this Lease.




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17.24 Attornment

If Lessor transfers title to the Property, or the Property is acquired by another upon the foreclosure or termination of any security interest to which this Lease is subordinated, (a) Lessee will, subject to the non-disturbance provisions of Section 17.25, attorn to the new owner and, on request, enter into a new lease containing all the terms and provisions of this Lease, with the new owner for the remainder of the term hereof, or, at the election of the new owner, this Lease will automatically become a new lease between Lessee and the new owner; and (b) Lessor will thereafter be relieved of any further obligations hereunder and the new owner will assume all of Lessor’s obligations, except that the new owner will not: (i) be liable for any act or omission of any prior lessor or with respect to events occurring before acquisition of ownership; (ii) be subject to any offsets or defenses that Lessee might have against any prior lessor; (iii) be bound by prepayment of more than one month’s rent, or (iv) be liable for the return of any security deposit paid to any prior lessor.

17.25 Non-disturbance

With respect to any loan agreement or other security agreement entered into by Lessor after the execution of this Lease (a “Subsequent Loan”), Lessee’s subordination of this Lease will be subject to Lessee’s receipt of a commercially reasonable non-disturbance agreement (a “Non- disturbance Agreement”) from the lender of the Subsequent Loan that provides that Lessee’s possession of the Premises, including any options to extend the term hereof, will not be disturbed as long as Lessee is not in default of this lease and attorns to the record owner of the Premises.

17.26 Capacity to Execute; Mutual Representations

Lessor and Lessee each warrant and represent to one another that this Lease constitutes a legal, valid, and binding obligation of that Party. Without limiting the generality of the foregoing, each Party represents that its governing board has authorized the execution, delivery, and performance of this Lease by it. The individuals executing this Lease each warrant that they have full authority to execute this Lease on behalf of the entity for whom they purport to be acting.

17.27 Entire Agreement

This Lease, together with all exhibits attached hereto and by this reference incorporated herein, constitutes the entire agreement between Lessor and Lessee with respect to the leasing of the Premises.

17.28 Counterparts

This Lease may be executed in one or more counterparts.



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17.29. No Joint Venture or Partnership

Nothing in this Lease creates a partnership or joint venture between Lessor and Lessee. Except as expressly provided by the terms of this Lease, nothing in this Lease shall be construed to limit the Lessor’s right to maintain and operate the Building and Premises in its sole discretion.

17.30 Personal Guaranty

The personal guaranty agreement is attached as Exhibit G. Guarantor shall promptly notify Lessor of any change of address from the address provided in Exhibit G. Every "license holder" as defined in OAR 845-025-1015 and / or owner and /or every partner and / or shareholder must sign a personal guaranty. This requirement applies to any new "license holders" or new partners or shareholders that Lessee may add during the Lease Term. A violation of this Section shall be considered an Event of Default as defined in Section 12.1 above.













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IN WITNESS WHEREOF, the Parties have executed this Lease to be effective as of the Effective Date.


________________________________________________

















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EXHIBIT A

[ Legal Description of the Property ]


EXHIBIT B

[ Description of the Building ]


EXHIBIT C

[ Description of Premises ]


EXHIBIT D

[ Form of Estoppel Certificate ]


EXHIBIT E

[ Limited Security Agreement ]


EXHIBIT F

[ Rules and Regulations ]


EXHIBIT G

[Personal Guaranty]


EXHIBIT H

[C ontrol Areas ]


EXHIBIT I

[ Lessor-Provided Efficiency Rate Disclosure ]







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Exhibit A

The following described property in Section 1, Township 1 South, Range 2 West, of the Willamette Meridian, in the City of Hillsboro, County of Washington and State of Oregon:

Beginning at the most Southerly Southeast corner of that tract of land conveyed to the Hillsboro Industrial Development Corporation, by Deed recorded in Book 393 Page 699, Washington County, Oregon Deed Records, a point on the Northerly line of the Southern Pacific Company's right of way and running thence along the East line of said Corporation Tract, North 00 degrees 30' East 136.01 feet and North 00 degrees 21' West 264.9 feet to the re-entrant corner on said East line; thence North 88 degrees 58' West 519.98 feet; thence South 01 degrees 14' East 53.1 3 feet; thence on a 426.26 foot radius curve right (the long chord of which bears South 39 degrees 38' 10” West 557.84 feet) 608.11 feet to a point on the Northerly line of the Southern Pacific Company's right of way; thence along said Northerly line on a 2834.82 foot radius curve concave to North (the long chord of which bears North 85 degrees 03' 18” East 846.89 feet) 850.07 feet to the point of beginning The Real Property or its address is commonly known as 630 SW Walnut Street, Hillsboro, OR 97123. The Real Property tax identification number is R399465.






















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[JTBKEX1021.JPG]




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[JTBKEX1022.JPG]



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EXHIBIT D

ESTOPPEL CERTIFICATE

The undersigned Lessee who is currently in possession of Suite 106-110 located within the Walnut Industrial Park located at 630 SW Walnut Street, Hillsboro, Oregon in Washington County, (the “Property”), hereby acknowledges receipt of notice that its Lessor, W.I.P.P, LLC (the “Lessor”), is about to sell, convey, or refinance the Property to/with _______________________ (“Buyer”).

The undersigned hereby represents and warrants to and covenants with Buyer and any transferee of its interest in the Property that:

1. The undersigned is now in possession of Suite 106 & 110 under a written Lease, a complete and up to date copy of which, together with all amendments, supplements, extensions and assignments, is attached hereto as Exhibit “A” (the “Lease”). There are no other agreements between the undersigned and Lessor with respect to the Suite or Property.

2. The undersigned is currently paying rent in the amount of $10,950.00 per month under the Lease and is not in default in the payment thereof. No rent or other sum payable to Lessor under the Lease has been paid for more than one (1) month in advance. The undersigned has paid a lease or security deposit in the sum of $$65,700.00 and an electricity deposit in the sum of $500.00. No other deposits or other payments under the Lease have been made by the undersigned or on its behalf.

3. The leased Suite consists of aproximatly 8,400 square feet at the Property.

4. The Lease is in full force and effect. The term of the Lease commenced on or about December 20th, 2018 and expires on December 31st, 2023. The next payment of rent is due on December 20th, 2018.

5. The undersigned has accepted the Suite 106 &110 and has no claim, defense, setoff or counterclaim against the Lessor under the Lease or otherwise.

6. The undersigned has received no notice of any assignment of the Lease to any person other than Buyer.

7. The undersigned is not in default in the performance of any of its obligations under the Lease and has not committed any breach of the Lease. The undersigned has received no notice of any default or claimed default under the Lease. 8. The undersigned acknowledges that Buyer is relying upon the truth and accuracy of the statement in purchasing/refinancing the Property from Lessor.



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Lessee: This Budz For You Farms LLC

Signature:

Its: President

12/17/18

Date :



















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EXHIBIT E

LIMITED SECURITY AGREEMENT

This Limited Security Agreement dated December 20th, 2018 is entered into between This Budz For You Farms LLC (“Lessee”) and W.I.P.P., LLC (“Lessor”) in connection with the Lease dated December 20 th , 2018 (“Lease”) between the parties.

RECITALS

A. The parties have entered into a Lease dated December 20 th , 2018, whereby Lessor has agreed to lease certain space to Lessee for the operation of a marijuana business licensed by the Oregon Liquor Control Commission (“OLCC”).

B. In connection with that Lease, Lessee has agreed to grant a security interest in its business so that Lessor may dispose of any marijuna left in the leased premises after Lessor retakes possession after Lessee defaults on the Lease or in some other manner.

C. Capitalized terms shall have the same meaning as defined in the Lease.

AGREEMENT

NOW, THEREFORE, in light of the above recitals and the mutual exchange of valuable consideration, the adequacy of which is acknowledged, the Parties hereby agree as follows:

Grant of Security Interest in Business
Lessee grants Lessor a limited security interest in its business, including but not limited

to, Lessee’s marijuana crop or other marijuana products, and Lessor shall be deemed a secured party as defined in ORS 79.0102. Upon Lessee’s default or Lessor retaking possession after the end of the Lease Term, and marijuana plants or other marijuana products remain in the leased Building, the security interest shall be deemed perfected and Lessor may continue to operate Lessee’s business for the purposes of disposing of the marijuana or marijuana products pursuant to OLCC Rules 845-025-1260 and 845-025-1275 (“OLCC Rules”). The proceeds from any such disposition, less any and all expenses connected with the taking of possession, holding, and selling of the marijuana or marijuana products, shall be applied as a credit against the indebtedness secured by the security interest granted here. Any surplus shall be paid to Lessee or as otherwise required by law; the Lessee shall pay any deficiencies forthwith. Lessee agrees to cooperate with Lessor in all ways to assist Lessor in complying with the requirements of the OLCC Rules and Oregon laws.



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EXHIBIT F

WALNUT INDUSTRIAL PARK RULES AND REGULATIONS

The following Rules and Regulations govern the operations in and about Walnut Industrial Park and may updated and amended from time to time. The most current OLCC Rules will always govern the lease and supersede anything to contrary that may be set forth on Exhibit F. The Rules and Regulations are fully incorporated by reference into the Lease, and capitalized terms have the same meaning herein.

I. GENERAL

1. The Premises is to be used by Tenant solely for lawful purposes in accordance with these Rules and Regulations and the other terms and conditions of the Lease. All capitalized terms used in this Policies and Procedures but not defined herein shall have the meanings given to them in the Lease.

2. Tenant Access - Tenant shall at all times comply with the OLCC Rules governing access to licensed marijuana facilities. Only Tenant and its employees may have access to the Property, Building or Premises. Tenant shall not allow any other persons on the Property, Building or Premises.

3. Tenant acknowledges that the security and access provisions employed by Landlord or an independent contractor on behalf of Landlord shall not be construed as Landlord’s acceptance of responsibility or liability or the security of persons or property within the Building or the Premises. Landlord does not guaranty the security of Tenant’s property or Equipment. Landlord shall have the right to access the Premises at all times in order to install or maintain infrastructure systems to support the Building and the Building systems.

4. Tenant shall provide Landlord with the names of all employees who will be working the Premises and these employees will be issued a Permanent Photo ID Access Card (“Access Card”). Landlord will charge no fee for the original issuance of a Permanent Photo ID Access Card. All issued identification must be worn at all times while in the Building. Access Cards (Permanent or Temporary) may be used only by the individual to whom it has been issued for obtaining access to the Building and the Premises. Access Cards may not be loaned or exchanged between individuals for any reason. Abuse or misuse of Access Cards may result in removal from the Building and denial of future access. At no time shall Tenant or its employees grant access to the Building or the Premises to anyone.

5. Tenant shall cooperate in maintaining the security of the Building and the Premises by restricting access to authorized personnel and complying with all security policies of Landlord.



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Tenant shall not obstruct corridors, halls, stairways, sidewalks, building entrance ramps, or site driveways at any time. Corridors, halls, stairways, sidewalks, building entrance ramps and site driveways shall be used for egress and ingress only. There shall be no congregating in hallways. Parking - Only Tenant may access the Building parking facility or parking areas. Parking is unreserved and permitted on a first come, first served basis while conducting business in the Building only. Tenant and its employees shall not authorize any unauthorized persons to have access to the parking area. Tenant shall park in the designated parking spaces or areas, if any. Any vehicles parked outside the designated areas will be subject to removal from parking area at owner’s expense.

6. The following items are banned from the Building, and Tenant agrees not to bring these items into the Building or the Premises: controlled substances (not including marijuana), explosives, flammable liquids, gases or chemicals, tape recorders, chemical agents, weapons of any kind, wet cell batteries and all similar equipment and materials. Tenant may take photographs within the Building, but only within Tenant Premises and Common Areas. There is no smoking permitted in the Building. There is also no smoking permitted in front of the Building front entrance. There will be a designated smoking area. No food or drink will be allowed in the Premises.

7. Landlord may, in Landlord’s sole discretion and at Landlord’s expense, change the configuration of the Building. Landlord and Tenant shall cooperate in good faith to minimize any disruption in Tenant’s operations that might be caused by such changes in the configuration of the Building.

8. Shipping and receiving - Landlord shall receive and store shipments addressed to Tenant, for shipments that arrive during normal business hours (8:00 a.m. through 5:00 p.m. Monday through Friday, federal and Oregon state holidays excluded), provided that such shipments arrive in good condition and in a form that can stored in Landlord’s storage facility. Landlord may reasonably reject any shipment that is not in good condition or otherwise cannot be stored in Landlord’s storage facility, in Landlord’s reasonable discretion. Tenant may, at Tenant’ sole option, receive any shipments directly, and Landlord shall have no liability to Tenant for any such shipments directly received.

9. No Landlord Equipment, including Growing Equipment, or any Equipment from outside the Tenant’s Premises will be permitted to be removed from the Building.

10.Tenant shall not inscribe, paint or affix advertisements, identifying signs or other notices on any part of the corridors, doors, public areas, common areas or the Premises or any portion thereof without prior approval of Landlord.



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11.Tenant shall be allowed the non-exclusive use of provided common areas of the Building (bathrooms, break room, lounge, hallways, etc.). Tenant shall not conduct activities in common areas that interfere with the activities of other Tenants of the Building or Landlord. Tenant should make a concerted effort to keep all such areas clean and neat at all times. Tenant shall only use the common areas of the Building for their designated purposes.

12.Failure by Tenant or Authorized Tenant Reps to comply with the Rules and Regulations in may result in (a) removal of Tenant from the Building, (b) restriction of Tenant’s access to the Building, and/or (c) impositions of additional charges (d) and an Event of Default under the Lease. Notwithstanding anything in the Lease to the contrary, none of the cure periods set forth in Section 12.1.2 of the Lease shall apply to breaches of the Rules and Regulations with respect to Landlord’s exercise of the remedies set forth in this Paragraph 12.

13.The Lease constitutes proprietary and confidential information of Landlord. Tenant shall not disclose the content or form of the Lease to any third party except its employees, agents, or professional advisors without Landlord’s prior written consent except as required by law. 14.Landlord reserves the right, in Landlord’s sole discretion, to amend these Policies and Procedures at any time. Landlord shall provide to Tenant written notice of any such additions or amendments to the Policies and Procedures.

15. Any walls, sheet rock wall panels and such must be constructed with screws only. No nails are allowed in any construction attached to the building. This will allow for easy removal if necessary.

16. Tenant shall use only the following contractors for fire and safety work on the building systems:

a. Sprinkler system: Western State Fire Protection 503-657-5155 b. Fire Alarm: Stanley security 503-387-2900

c. Fire cauking: SFS, Inc. 503-233-9784

II. OLCC COMPLIANCE

The following Rules and Regulations have been taken directly from the OLCC Rules and modified as necessary. Under the following Rules and Regulations, “licensee” refers to Tenant, and “Commission” refers to the OLCC, and “licensed premises” refers to the Premises.



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A. Changing, Altering, or Modifying Licensed Premises

(1) A licensee may not make any physical changes to the licensed premises that materially or substantially alter the licensed premises or the usage of the licensed premises from the plans originally approved by the Commission without the Commission’s prior written approval.

(2) A licensee who intends to make any material or substantial changes to the licensed premises must submit a form prescribed by the Commission, and submit any information identified in the form to be submitted, to the Commission, prior to making any such changes.

(3) The Commission must review the form and other information submitted under subSection (2) of this rule, and will approve the changes if the changes would not result in an initial or renewal application denial under OAR 845-025-1115.

(4) If the Commission denies the change the licensee must not make the proposed changes. If the licensee makes the proposed changes, the licensee must surrender the license or the Commission will propose to suspend or cancel the license.

(5) For purposes of this rule a material or substantial change requiring approval includes, but is not limited to:

(a) Any increase or decrease in the total physical size or capacity of the licensed premises;

(b) The sealing off, creation of or relocation of a common entryway, doorway, passage or other such means of public ingress or egress, when such common entryway, doorway or passage alters or changes limited access areas, such as the areas in which cultivation, harvesting, processing,or saleofmarijuanaitemsoccurswithinthelicensedpremises;or

(c) Any physical change that would require the installation of additional video surveillance cameras or a change in the security system.

B.Financial and Business Records

In addition to any other record-keeping requirements in these rules, a marijuana licensee must haveandmaintainrecordsthatclearlyreflectallfinancialtransactionsandthefinancial condition of the business. The following records must be kept and maintained for a three-year period and must be made available for inspection if requested by an employee of the Commission:

(1) Purchase invoices and supporting documents for items and services purchased for use in the production, processing, research, testing and sale of marijuana items that include from whom the itemswerepurchasedandthedateofpurchase;



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(2) Bank statements for any accounts relating to the licensed business; (3) Accounting and tax records related to the licensed business;

(4) Documentation of all financial transactions related to the licensed business, including contracts and agreements for services performed or received that relate to the licensed business; and

(5) All employee records, including training.

C. Licensed Premises Restrictions and Requirements (1) A licensee may not permit:

(a)  Any minor on a licensed premises except as described in Section (7) and (8) of this rule; or

(b)  On-site consumption of a marijuana item, alcohol, or other intoxicant by any individual, except that an employee who has a current registry identification card issued under ORS 475.309 may consume marijuana during his or her work shift on the licensed premises as necessary for his or her medical condition, if the employee is alone, in a closed room and not visible to others outside the room. An employee who consumes a marijuana item as permitted under this Sub-Section may not be intoxicated while on duty.

(2) Notwithstanding Section (6)(a) of this rule, a minor, other than a licensee’s employee, who has a legitimate business purpose for being on the licensed premises, may be on the premises for a limited period of time in order to accomplish the legitimate business purpose. For example, a minor plumber may be on the premises in order to make a repair.

(3) A licensee must clearly identify all limited access areas in accordance with OAR 845-025- 1245.

(4) A licensee must keep a daily log of all employees, contractors and license representatives whoperformworkonthelicensedpremises.Allemployees,contractorsand licensee representativesmustwearclothingorabadgeissuedbythelicenseethateasily identifiesthe individualasanemployee,contractororlicenseerepresentative.

(5) The general public is not permitted in limited access areas on a licensed premises, except for the licensed premises of a retailer and as provided by Section (14) of this rule. In addition to licensee representatives, the following individuals are permitted to be present in limited access areas on a licensed premises, subject to the requirements in Section (12) of this rule:

(a)  Laboratory personnel, if the laboratory is licensed by the Commission;



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(b)  A contractor, vendor or service provider authorized by a licensee representative to be on the licensed premises;

(c) Another licensee or that licensee’s representative;

(d) Up to seven invited guests per week subject to requirements of Section (12) of this rule;

or

(e) Tour groups as permitted under Section (14) of this rule.

(6) Prior to entering a licensed premises all visitors permitted by Section (11) of this rule must be documented and issued a visitor identification badge from a licensee representative that must remain visible while on the licensed premises. A visitor badge is not required for government officials. All visitors described in Sub-Section (11) of this rule must be accompanied by a licensee representative at all times.

(7) A licensee must maintain a log of all visitor activity. The log must contain the first and last name and date of birth of every visitor and the date they visited.

(8) A marijuana producer or research certificate holder may offer tours of the licensed premises, including limited access areas, to the general public if the licensee submits a control plan in writing and the plan is approved by the Commission.

(a) The plan must describe how conduct of the individuals on the tour will be monitored, how access to usable marijuana will be limited, and what steps the licensee will take to ensure that no minors are permitted on the licensed premises.

(b) The Commission may withdraw approval of the control plan if the Commission finds there is poor compliance with the plan. Poor compliance may be indicated by, for example, individuals on the tour not being adequately supervised, an individual on the tour obtaining a marijuana item while on the tour, a minor being part of a tour, or the tours creating a public nuisance.

(9) Nothing in this rule is intended to prevent or prohibit Commission employees or contractors, or other state or local government officials that have jurisdiction over some aspect of the licensed premises or licensee from being on the licensed premises.

(10) A licensee may not sublet any portion of a licensed premises.



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(11) A licensed premises may receive marijuana items only from a marijuana producer, marijuana processor, or marijuana wholesaler for whom a premises has been licensed by the Commission.

(12) A licensed wholesaler or retailer who sells or handles food, as that term is defined in ORS 616.695, or cannabinoid edibles must also be licensed by the Oregon Department of Agriculture under ORS 616.706.

D. Signage

(1) A licensee must post:

(a) At every licensed premises signs that read:

(A) “No Minors Permitted Anywhere on This Premises”; and

(B) “No On-Site Consumption of Marijuana”; and

(b) At all areas of ingress or egress to a limited access area a sign that reads: “Do Not Enter - Limited Access Area - Access Limited to Licensed Personnel and Escorted Visitors.”

(2) All signs required by this rule must be:

(a) Legible, not less than 12 inches wide and 12 inches long, composed of letters not less than one-half inch in height;

(b) In English and Spanish; and

(c) Posted in a conspicuous location where the signs can be easily read by individuals on the licenses premises.

E. Licensee Prohibitions

(1) A licensee may not:

(a) Import into this state or export from this state any marijuana items;

(b) Give marijuana items as a prize, premium or consideration for a lottery, contest, game of chanceorgameofskill,orcompetitionofanykind;

(c) ) Sell, give or otherwise make available any marijuana items to any person who is visibly intoxicated;



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(d) Make false representations or statements to the Commission in order to induce or prevent action by the Commission;

(e) Maintain a noisy, disorderly or insanitary establishment or supply adulterated marijuana items;

(f) Misrepresent any marijuana item to a customer or to the public; (g) Sell any marijuana item through a drive-up window;

(h) Deliver marijuana to any consumer off the licensed premises except as permitted by OAR 845-025-2880;

(i) Sell or offer to sell a marijuana item that does not comply with the minimum standards prescribed by the statutory laws of this state; or

(j) Use or allow the use of a mark or label on the container of a marijuana item that is kept for sale if the container does not precisely and clearly indicate the nature of the container’s contents or in any way might deceive a customer as to the nature, composition, quantity, age or quality of the marijuana item.

(2) No licensee or licensee representative may be under the influence of intoxicants while on duty.

(a) For purposes of this rule “on duty” means:

(A) The beginning of a work shift that involves the handling or sale of marijuana items, checking identification or controlling conduct on the licensed premises, to the end of the shift including coffee and meal breaks;

(B) For an individual working outside a scheduled work shift, the performance of acts on behalf of the licensee that involve the handling or sale of marijuana items, checking identification or controlling conduct on the licensed premises, if the individual has the authority to put himself or herself on duty; or

(C) A work shift that includes supervising those who handle or sell marijuana items, check identification or control the licensed premises.

(b) Whether a person is paid or scheduled for work is not determinative of whether the person is considered “on duty” under this Sub-Section.



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F. State and Local Safety Inspections

(1) All marijuana licensees may be subject to inspection of licensed premises by state or local government officials to determine compliance with state or local health and safety laws.

(2) A licensee must contact any utility provider to ensure that the licensee complies with any local ordinance or utility requirements such as water use, discharge into the sewer system, or electrical use.

G. General Sanitary Requirements

(1) A marijuana licensee must:

(a) Prohibit any individual working on a licensed premises who has or appears to have a communicable disease, open or draining skin lesion infected with Staphylococcus aureus or Streptococcus pyogenes, or any illness accompanied by diarrhea or vomiting for whom there is a reasonable possibility of contact with marijuana items from having contact with a marijuana item until the condition is corrected;

(b) Require all persons who work in direct contact with marijuana items conform to hygienic practices while on duty, including but not limited to:

(A) Maintaining adequate personal cleanliness; and

(B) Washing hands thoroughly in an adequate hand-washing area before starting work, prior to having contact with a marijuana item and at any other time when the hands may have become soiled or contaminated;

(c) Provide hand-washing facilities adequate and convenient, furnished with running water at a suitable temperature and provided with effective hand-cleaning and sanitizing preparations and sanitary towel service or suitable drying device;

(d) Properly remove all litter and waste from the licensed premises and maintain the operating systems for waste disposal in an adequate manner so that they do not constitute a source of contamination in areas where marijuana items are exposed;

(e) Provide employees with adequate and readily accessible toilet facilities that are maintained in a sanitary condition and good repair; and

(f) Hold marijuana items that can support pathogenic microorganism growth or toxic formation in a manner that prevents the growth of these pathogenic microorganism or formation toxins.



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(2) For purposes of this rule “communicable disease” includes but is not limited to: diphtheria, measles, Salmonella enterica serotype Typhi infection, shigellosis, Shiga-toxigenic Escherichia coli (STEC) infection, hepatitis A, and tuberculosis.

H. Definitions

As used in OAR 845-025-2000 to 845-025-2080:

(1) “Canopy” means the surface area utilized to produce mature marijuana plants calculated in square feet and measured using the outside boundaries of any area that includes mature marijuana plants including all of the space within the boundaries.

(2) “Indoor production” means producing marijuana in any manner: (a) Utilizing artificial lighting on mature marijuana plants; or (b) Other than “outdoor production” as that is defined in this rule.

H.1 Producer Privileges

(1) A producer may only plant, cultivate, grow, harvest and dry marijuana in the manner approved by the Commission and consistent with chapter 1, Oregon Laws 2015, chapter 614, Oregon Laws 2015 and these rules.

(2) A producer may engage in indoor or outdoor production of marijuana, or a combination of the two.

(3) A producer may sell or deliver: (a) Usable marijuana to the licensed premises of a marijuana processor, wholesaler, retailer, laboratory, or research certificate holder;

(b) Dried mature marijuana plants that have been entirely removed from any growing medium to the licensed premises of a marijuana processor or research certificate holder; or

(c) Immature marijuana plants and seeds to the licensed premises of a marijuana producer, wholesaler, retailer or research certificate holder.

(4) A producer may not sell a mature marijuana plant other than as provided in Section (3)(b) of this rule.

(5) A producer may provide a sample of usable marijuana to a marijuana wholesaler, retailer or processor licensee for the purpose of the licensee determining whether to purchase the product. The sample product may not be consumed on a licensed premises. Any sample provided to another licensee must be recorded in CTS.



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H.2. Licensed Premises of Producer

(1) The licensed premises of a producer authorized to cultivate marijuana indoors includes all public and private enclosed areas used in the business operated at the location and any areas outside of a building that the Commission has licensed.

(2) The licensed premises of a producer may not be located at the same physical location or address as a marijuana grow site registered under ORS 475.304 unless the producer is also a person responsible for a marijuana grow site and has been issued a license by the Commission in accordance with Section 116, chapter 614, Oregon Laws 2014, and OAR 845-025-1100.

H.3. Production Size Limitations

(1) Cultivation Batches and Cultivate Batch Sizes.

(a) A producer must establish cultivation batches and assign each cultivation batch a unique identification number.

(b) A cultivation batch may not have more than 100 immature plants.

(c) A producer may have an unlimited number of cultivation batches at any one time.

(2) Canopy Size Limits.

(a) Indoor Production.

(A) Tier I: Up to 5,000 square feet.

(B) Tier II: 5,001 to 10,000 square feet.

(b) For purposes of this Section, square footage of canopy space is measured starting from the outermost point of the furthest mature flowering plant in a designated growing space and continuing around the outside of all mature flowering plants located within the designated growing space.

(c) A producer may designate multiple grow canopy areas at a licensed premises but those spaces must be separated by a physical boundary such as an interior wall or by at least 10 feet of open space.

(d) If a local government adopts an ordinance that would permit a producer to have a higher canopy size limit than is permitted under this rule, the local government may petition the Commission for an increase in canopy size limits for that jurisdiction. If the Commission grants such a petition, the Commission may amend this rule in addition to considering changes to the license fee schedule.



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(e) On an annual basis, the Commission will evaluate market demand for marijuana items, the number of person applying for producer licenses or licensed as producers and whether the availability of marijuana items in this state is commensurate with the market demand. Following this evaluation the Commission may amend this rule as needed.

(3) Canopy Size Limit - Designation and Increases.

(a) ) A producer must clearly identify designated canopy areas and proposed canopy size in the initial license application. A producer may change a designated canopy area within a production type at any time with prior written notice to Commission, but a producer may only change canopy tiers at the time of renewal in accordance with Sub-Section (b) of this Section.

(b) A producer may submit a request to change canopy tiers at the time the producer submits an application for renewal of the license. The Commission will grant a request to increase the canopy tier for the producer’s next licensure term if:

(A) The producer’s renewal application is otherwise complete;

(B) There are no bases to deny or reject the producer’s renewal application;

(C) The producer has not already reached the applicable maximum canopy size set forth in Section (2) of this rule; and

(D) During the preceding year of licensure, the producer has not been found to be in violation, and does not have any pending allegations of violations of chapter 1, Oregon Laws 2015, chapter 614, Oregon Laws 2015, or these rules.

(c) The Commission shall give a producer an opportunity to be heard if a request is rejected under this Section.

H.4. Operating Procedures

Tenant must provide Landlord a copy of its operating procedures as set forth in the Rule, along with notice of any material changes as required

(1) A producer must:

(a) Establish written standard operating procedures for the production of marijuana. The standard operating procedures must, at a minimum, include when, and the manner in which, all pesticide and or other chemicals are to be applied during the production process; and

(b) Maintain a copy of all standard operating procedures on the licensed premises.



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(2) If a producer makes a material change to its standard operating procedures it must document the change and revise its standard operating procedures accordingly. Records detailing the material change must be maintained on the licensed premises by the producer.

H.5. Start-up Inventory

(1) Marijuana producers may not receive immature marijuana plants or seeds from any source other than from another licensee, except that between January 1, 2016 and December 31, 2016, a marijuana producer may receive immature marijuana plants and seeds from any source within Oregon for up to 90 days following initial licensure by the Commission.

(2) The marijuana producer shall, through CTS, report receipt of the number of immature marijuana plants or seeds received under this Section within 48 hours of the plants or seeds arriving at the licensed premises. A producer does not have to document the source of the immature plants or seeds during the 90 day start-up period.

(3) Failure to comply with this rule is a Category I violation and could result in license revocation.

H.6. Pesticides, Fertilizers and Agricultural Chemicals

(1) Pesticides. A producer may only use pesticides in accordance with ORS chapter 634 and OAR 603, Division 57.

(2) Fertilizers, Soil Amendments, Growing Media. A producer may only use fertilizer, agricultural amendments, agricultural minerals and lime products in accordance with ORS chapter 633.

(3) A producer may not treat or otherwise adulterate usable marijuana with any chemical, biologically active drug, plant, substance, including nicotine, or other compound that has the effect or intent of altering the usable marijuana’s color, appearance, weight or smell.

(4) In addition to other records required by these rules, a producer must maintain, at all times and on the licensed premises:

(a) The material safety data sheet (MSDS) for all pesticides, fertilizers or other agricultural chemicals used by the producer in the production of marijuana;

(b) The original label or a copy thereof for all pesticides, fertilizers or other agricultural chemicals used by the producer in the production of marijuana; and



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(c) A log of all pesticides, fertilizers or other agricultural chemicals used by the producer in the production of marijuana. The log must include:

The information required to be documented by a pesticide operator in ORS 634.146;

The unique identification tag number of the cultivation batch or individual mature marijuana plant to which the product was applied, or if applied to all plants on the licensed premises a statement to that affect.

(5) A producer may maintain the records required under this rule in electronic or written form. If electronic, a producer shall maintain a backup system or sufficient data storage so that records are retained for no less than two years after harvest of any marijuana on which documented products were used. If written, a producer shall ensure that the records are legible and complete, shall keep them in a safe and secure location, and shall retain the records for no less than two years after harvest of any marijuana on which documented products were used.

(6)  A producer may maintain the records required under this rule in electronic or written form. If electronic, a producer shall maintain a backup system or sufficient data storage so that records are retained for no less than two years after harvest of any marijuana on which documented products were used. If written, a producer shall ensure that the records are legible and complete, shall keep them in a safe and secure location, and shall retain the records for no less than two years after harvest of any marijuana on which documented products were used.

(7)  A producer must make the records required under this rule immediately available during an premises inspection by a Commission regulatory specialist. If the Commission requests copies of the records at any time other than during a premises inspection, a producer shall produce the records upon request.

H.7 Harvest Lot Segregation

(1) A producer must, within 45 days of harvesting a harvest lot, physically segregate the harvest lot from other harvest lots, place the harvest lot in a receptacle or multiple receptacles and assign a UID tag to each receptacle that is linked to each plant that was harvested.

(2) A producer may not combine harvest lots that are of a different strain, were produced using different growing practices or harvested at a different time.

I. SEED-TO-SALE TRACKING I.1. CTSRequirements

(1) A licensee must:

(a) Use CTS as the primary inventory and recording keeping system.



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(b) Have a CTS account activated and functional prior to operating or exercising any privileges of the license and must maintain an active account while licensed.

(2) A licensee must have at least one license holder who is a CTS administrator and a licensee may authorize additional license holders or licensee representatives to obtain Administrator accounts.

(3) In order to obtain a CTS administrator account, a license holder must attend and successfully complete all required CTS training. The Commission may also require additional ongoing, continuing education for an individual to retain his or her CTS administrator account.

A licensee may designate licensee representatives as CTS users. A designated user must trained by a CTS administrator in the proper and lawful use of CTS.

A licensee must:

(4)

be

(5) (a)

(b) Train and authorize any new CTS users before those users are permitted to access CTS or input, modify, or delete any information in CTS.

(c) Cancel any CTS administrator or user from an associated CTS account if that individual is no longer a licensee representative or the administrator or user has violated OAR 845-025- 7500 to845-025-7590.

(d) Correct any data that is entered into CTS in error.

(6) A licensee is accountable for all actions licensee representatives take while logged into CTS or otherwise conducting inventory tracking activities.

(7) Nothing in this rule prohibits a licensee from using secondary separate software applications to collect information to be used by the business including secondary inventory tracking or point of sale systems. Secondary software applications must use CTS data as the primary source of data and must be compatible with updating to CTS. If a licensee uses a separate software application it must get approval from the vendor contracting with the Commission to provide CTS and the software application must:

(a) Accurately transfer all relevant CTS data to and from CTS for the purposes of reconciliations with any secondary systems.



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(b) Preserve original CTS data when transferred to and from a secondary application.

(8) If at any point a licensee loses access to CTS for any reason, the licensee must keep and maintain comprehensive records detailing all tracking inventory activities that were conducted during the loss of access.

(a) Once access is restored, all inventory tracking activities that occurred during the loss of access must be entered into CTS.

(b) A licensee must document when access to the system was lost and when it was restored.

(c) A licensee may not transport any marijuana items to another licensed premises until such time as access is restored and all information is recorded into CTS.

I.2. UniqueIdentification(UID)Tags

A licensee must:

Maintain an accurate and complete list of all CTS administrators and CTS users for each licensed premises and must update the list when a new CTS user is trained.

(1) Use UID tags issued by a Commission-approved vendor that is authorized to provide UID tags for CTS. Each licensee is responsible for the cost of all UID tags and any associated vendor fees.

(2) Have an adequate supply of UID tags at all times.

(3) Properly tag all inventory that is required to have a UID tag.

(4) Place tags in a position that can be clearly read by an individual standing next to the item and the tag must be kept free from dirt and debris.

I.3. CTSUserRequirements

(1) A licensee and any designated CTS administrator or user shall enter data into CTS that fully and transparently accounts for all inventory tracking activities.

(2) A licensee is responsible for the accuracy of all information entered into CTS.

(3) An individual entering data into the CTS system may only use that individual’s CTS account. Each CTS administrator and CTS user must have a unique log-on and password, which may not be used by any other person.



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I.4. SystemNotifications

A licensee must:

(1) Monitor all compliance notifications from CTS and resolve the issues detailed in the compliance notification in a timely fashion. A licensee may not dismiss a compliance notification in CTS until the licensee resolves the compliance issues detailed in the notification.

(2) Take appropriate action in response to informational notifications received through CTS, including but not limited to notifications related to UID billing, enforcement alerts, and other pertinent information.

I.5. ReconciliationwithInventory

A licensee must:

(1) Use CTS for all inventory tracking activities at a licensed premises.

(2) Reconcile all on-premises and in-transit marijuana item inventories each day in CTS at the close of business.

I.6. InventoryAudits

The Commission may perform a physical audit of the inventory of any licensee at the agency’s discretion and with reasonable notice to the licensee. Variances between the physical audit and the inventory reflected in CTS at the time of the audit, which cannot be attributed to normal moisture variation in usable marijuana, are violations. The Commission may impose a civil penalty, suspend or cancel a licensee for violation of this Section.

J. Transportation and Delivery of Marijuana Items

(1) Marijuana items may only be transferred between licensed premises by a licensee or licensee representative.

(2) An individual authorized to transport marijuana items must have a valid Oregon Driver’s License.

(3) A licensee must:

(a) Use a vehicle for transport that is:

(A) Insured at or above the legal requirements in Oregon;



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(B) Capable of securing (locking) the marijuana items during transportation; and

(C) Capable of being temperature controlled if perishable marijuana items are being transported.

(b) Using CTS, generate a printed transport manifest that accompanies every transport of marijuana items that contains the following information:

(A) The name, contact information of a licensee representative, licensed premises address and license number of the licensee transporting the marijuana items;

(B) The name, contact information of the licensee representative, licensed premises address, and license number of the licensee receiving the delivery;

(C) Product name and quantities (by weight or unit) of each marijuana item contained in each transport, along with the UIDs for every item;

(D) The date of transport and approximate time of departure;

(E) Arrival date and estimated time of arrival;

(F) ) Delivery vehicle make and model and license plate number; and

(G) Name and signature of the licensee’s representative accompanying the transport.

(4) A licensee or licensee representative may transport marijuana items from an originating location to multiple licensed premises as long as each transport manifest correctly reflects specific inventory in transit and each recipient licensed premises provides the licensee with a printedreceiptformarijuanaitemsdelivered

(5) All marijuana items must be packaged in shipping containers and labeled in accordance with OAR 845-025-2880 prior to transport.

(6) A licensee must provide a copy of the transport manifest to each licensed premises receiving the inventory described in the transport manifest, but in order to maintain transaction confidentiality, may prepare a separate manifest for each receiving licensed premises.

(7) A licensee must provide a copy of the printed transport manifest and any printed receipts for marijuana items delivered to law enforcement officers or other representatives of a government agency if requested to do so while in transit.

(8) A licensee must contact the Commission immediately, or as soon as possible under the circumstances, if a vehicle transporting marijuana items is involved in any accident that involves product loss.



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(9) Upon receipt of inventory a receiving licensee must ensure that the marijuana items received are as described in the transport manifest.

(10) A receiving licensee must separately document any differences between the quantity specified in the transport manifest and the quantities received. Such documentation shall be made in CTS and in any relevant business records.

(11) A licensee must provide temperature control for perishable marijuana items during transport.

(12) Anyvehicletransportingmarijuanaitemsmusttraveldirectlyfromtheshippinglicensee to the receiving licensee and must not make any unnecessary stops in between except to other licensed premises receiving inventory.

(13) A licensee may transport marijuana for other licensees if the transporting licensee holds a wholesale license.

K. Waste Management

(1) A licensee must:

(a) ) Store, manage and dispose of solid and liquid wastes generated during marijuana production and processing in accordance with applicable state and local laws and regulations which may include but are not limited to:.

(A) ) Solid waste requirements in ORS 459 and OAR 340 Divisions 93 to 96;

(B) Hazardous waste requirements in ORS 466 and OAR 340, Divisions 100 to 106; and

(C) Wastewater requirements in ORS 468B and OAR 340, Divisions 41 to 42, 44 to 45, 53, 55 and 73.

(b) Store marijuana waste in a secured waste receptacle in the possession of and under the control of the licensee.

(2) A licensee may give or sell marijuana waste to a producer, processor or wholesale licensee or research certificate holder. Any such transaction must be entered into CTS pursuant to OAR 845- 025-7500.

(3) In addition to information required to be entered into CTS pursuant to OAR 845-025-7500, a licensee must maintain accurate and comprehensive records regarding waste material that accounts for, reconciles, and evidences all waste activity related to the disposal of marijuana.



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L. Advertising

L.1 Purpose and Application of Rules

(1) The Commission serves the interests of the citizens of Oregon by regulating and prohibiting advertising marijuana items in a manner:

(a) That is attractive to minors;

(b) That promotes excessive use;

(c) That promotes activity that is illegal under Oregon law; or

(d) That otherwise presents a significant risk to public health and safety.

(2) The Commission also serves the interests of Oregonians by allowing advertising for the purpose of informing the public of the availability and characteristics of marijuana.

(3) All marijuana advertising by a licensee must conform to these rules.

L.2 Definitions

As used in OAR 845-025-8000 through 845-025-8080:

(1) "Advertising" is publicizing the trade name of a licensee together with words or symbols referring to marijuana or publicizing the brand name of marijuana or a marijuana product. (2) "Handbill" is a flyer, leaflet, or sheet that advertises marijuana.

(3) "Radio" means a system for transmitting sound without visual images, and includes broadcast, cable, on-demand, satellite, or internet programming. Radio includes any audio programming downloaded or streamed via the internet.

(4) "Television" means a system for transmitting visual images and sound that are reproduced on screens, and includes broadcast, cable, on-demand, satellite, or internet programming. Television includes any video programming downloaded or streamed via the internet.

L.3 Advertising Restrictions

(1) Marijuanaadvertisingmaynot:

(a)  Contain statements that are deceptive, false, or misleading;



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(b)  Contain any content that can reasonably be considered to target individuals under the age of 21, including but not limited to cartoon characters, toys, or similar images and items typically marketed towards minors;

(c)  Specificallyencouragesthetransportationofmarijuanaitemsacrossstatelines;

(d)  Assert that marijuana items are safe because they are regulated by the Commission or have been tested by a certified laboratory or otherwise make claims that any government agency endorses or supports marijuana;

(e)  Make claims that recreational marijuana has curative or therapeutic effects;

(f)  Display consumption of marijuana items;

(g)  Contain material that encourages the use of marijuana because of its intoxicating effect; or

(h)  Contain material that encourages excessive or rapid consumption.

(2) A marijuana retailer may not make any deceptive, false, or misleading assertions or statements on any product, any sign, or any document provided to a consumer.

(3) A licensee must include the following statement on all advertising:

(a) ) “Do not operate a vehicle or machinery under the influence of this drug".

(b) "For use only by adults twenty-one years of age and older.”

(c) ) “Keep out of the reach of children."

L.4. Advertising Media, Coupons, and Promotions

(1) The Commission prohibits advertising through handbills that are posted or passed out in public areas such as parking lots and publicly owned property.

(2) A licensee may not utilize television, radio, print media or internet advertising unless the licensee has reliable evidence that no more than 30 percent of the audience for the program, publication or internet web site in or on which the advertising is to air or appear is reasonably expected to be under the age of 21.



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(3) A licensee may not engage in advertising via marketing directed towards location-based devices, including but not limited to cellular phones, unless the marketing is a mobile device application installed on the device by the owner of the device who is 21 years of age or older and includes a permanent and easy opt-out feature.

L.5. Removal of Objectionable and Non-Conforming Advertising

(1) A licensee must remove any sign, display, or advertisement if the Commission finds it violates these rules.

(2) The Commission will notify the licensee and specify a reasonable time period for the licensee to remove any sign, display or advertisement that the Commission finds objectionable.

M. Prohibited Conduct

(1) Sale to a Minor. A licensee or permittee may not sell, deliver, transfer or make available any marijuana item to a person under 21 years of age.

(a)  Violation of this Section for an intentional sale to a minor by a licensee, permittee or license representative is a Category II violation.

(b)  Violation of this Section for other than intentional sales is a Category III violation.

(2) Identification. A licensee or license representative must require a person to produce identification as required by Section 24, chapter 614, Oregon Laws 2015 before selling or providing a marijuana item to that person. Violation of this Section is a Category IV violation.

(3) Access to Premises. A licensee or permittee may not:

(a) During regular business hours for the licensed premises, refuse to admit or fail to promptly admit a Commission regulatory specialist who identifies him or herself and who enters or wants to enter a licensed premises to conduct an inspection to ensure compliance with chapter 1, Oregon Laws 2015; chapter 614, Oregon Laws 2014; chapter 699, Oregon Laws 2015 affecting the licensed privileges; or these rules;

(b) Outside of regular business hours or when the premises appear closed, refuse to admit or fail to promptly admit a Commission regulatory specialist who identifies him or herself and requests entry on the basis that there is a reason to believe a violation of chapter 1, Oregon Laws 2015; chapter 614, Oregon Laws 2014; chapter 699, Oregon Laws 2015 affecting the licensed privileges; or these rules is occurring; or



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(c) Once a regulatory specialist is on the licensed premises, ask the regulatory specialist to leave until the specialist has had an opportunity to conduct an inspection to ensure compliance with chapter 1, Oregon Laws 2015; chapter 614, Oregon Laws 2014; chapter 699, Oregon Laws 2015 affecting the licensed privileges; or these rules.

(d) Violation of this Section is a Category II violation.

(4) Use or Consumption of Intoxicants on Duty and Under the Influence on Duty.

(a)  No licensee, licensee representative, or permittee may consume any intoxicating substances while on duty, except for employees as permitted under OAR 845-025-1230(5)(b). Violation of this Sub-Section is a Category III violation.

(b)  No licensee, licensee representative, or permittee may be under the influence of intoxicating substances while on duty. Violation of this Sub-Section is a Category II violation.

(c) Whether a person is paid or scheduled for a work shift is not determinative of whether the person is considered “on duty.”

(d) As used in this Section:

(A) “On duty” means:

(i) From the beginning to the end of a work shift for the licensed business, including any and all coffee, rest or meal breaks; or

(ii) Performing any acts on behalf of the licensee or the licensed business outside of a work shift if the individual has the authority to put himself or herself on duty.

(B) “Intoxicants” means any substance that is known to have or does have intoxicating effects, and includes alcohol, marijuana, or any other controlled substances.

(5)  Permitting Use of Marijuana at Licensed Premises. A licensee or permittee may not permit the use or consumption of marijuana, or any other intoxicating substance, anywhere in or on the licensed premises, or in surrounding areas under the control of the licensee, except for employees as permitted under OAR 845-025-1230(5)(b). Violation of this Section is a Category III violation.

(6)  Import and Export. A licensee or permittee may not import marijuana items into this state or export marijuana items out of this state. Violation of this Section is a Category I violation and could result in license or permit revocation.



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(7) Permitting, Disorderly or Unlawful Conduct. A licensee or permittee may not permit disorderly activity or activity that is unlawful under Oregon state law on the licensed premises or in areas adjacent to or outside the licensed premises under the control of the licensee.

(a)  If the prohibited activity under this Section results in death or serious physical injury, or involves unlawful use or attempted use of a deadly weapon against another person, or results in a sexual offense which is a Class A felony such as first degree rape, sodomy, or unlawful sexual penetration, the violation is a Category I violation and could result in license or permit revocation.

(b)  If the prohibited activity under this Section involves use of a dangerous weapon against another person with intent to cause death or serious physical injury, it is a Category II violation.

(c) As used in this Section:

(A) "Disorderly activities" means activities that harass, threaten or physically harm oneself or another person.

(B) “Unlawful activity” means activities that violate the laws of this state, including but not limited to any activity that violates a state criminal statute.

(d) The Commission does not require a conviction to establish a violation of this Section except as Section 13(1)(f), chapter 614, Oregon Laws 2015 requires.

(8) Marijuana as a Prize, Premium or Consideration. No licensee or permittee may give or permit the giving of any marijuana item as a prize, premium, or consideration for any lottery, contest, game of chance or skill, exhibition, or any competition of any kind on the licensed premises.

(9) Visibly Intoxicated Persons. No licensee or permittee may sell, give, or otherwise make available any marijuana item to any person who is visibly intoxicated. Violation of this Section is a Category III violation.

(10) Additional Prohibitions. A licensee or permittee may not:

(a) Sell or deliver any marijuana item through a drive-up window.

(b) Sell or offer for sale any marijuana item for a price per item that is less than the licensee’s cost for the marijuana item;

(c) Use any device or machine that both verifies the age of the consumer and delivers marijuana to the consumer; or



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(d) Deliver marijuana to a consumer off the licensed premises, except that retail licensees may provide delivery as set forth in OAR 845-025-2880.

(e) Violation of this Sub-Section is a Category III violation.

N. Inspections

Tenant shall notify Landlord within 2 days upon receiving notice of an inspection by the OLCC of the Premises.

The Commission may conduct:

1) A complaint inspection at any time following the receipt of a complaint that alleges a licensee or permittee is in violation of chapter 1, Oregon Laws 2015, chapter 614, Oregon Laws 2015, chapter 699, Oregon Laws 2015, or these rules;

2) An inspection at any time if it believes, for any reason, that a licensee or permittee is in violation of chapter 1, Oregon Laws 2015; chapter 614, Oregon Laws 2015; chapter 699, Oregon Laws 2015; or these rules; or

3) Compliance transactions in order to determine whether a licensee or permittee is complying with chapter 1, Oregon Laws 2015; chapter 614, Oregon Laws 2015; chapter 699, Oregon Laws 2015; or these rules.

4) A licensee, licensee representative, or permittee must cooperate with the Commission during aninspection.

5) If licensee, licensee representative or permittee fails to permit the Commission to conduct an inspection the Commission may seek an investigative subpoena to inspect the premises and gather books, payrolls, accounts, papers, documents or records.

O. Suspended Licenses: Posting of Suspension Notice Sign, Activities Allowed During Suspension

(1) Before 7:00 a.m. on the date a license suspension goes into effect, and until the suspension is completed, Commission staff must ensure that a suspension notice sign is posted on each outside entrance or door to the licensed premises.

(2) The suspension notice sign must be posted in a way that allows any person entering the premises to read it. Licensees must use the suspension notice sign provided by the Commission. The sign will state that the license has been suspended by order of the Commission due to violations of the recreational marijuana laws (statutes or administrative rule) of Oregon. If there are multiple licenses at the location, the sign will specify which license privileges have been suspended.



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(3) During the period of license suspension, the licensee is responsible for ensuring: (a) ) Compliance with all applicable laws and rules; and

(b) That the suspension notice sign is not removed, altered, or covered.

(4) A licensee or licensee representative may not allow the sale, delivery to or from, or receipt of marijuana items at the licensed premises during the period of time that the license is under suspension. During a period of time that the license is under suspension, a recreational marijuana licensee may operate the business provided there is no sale, delivery to or from, or receiptofa marijuanaitem.

III. TENANT MANUAL

Tenant shall comply with all provisions set forth in the Walnut Industrial Park Tenant Manual, which is incorporated by reference into these Rules and Regulations.

EXHIBIT G

GUARANTY

In consideration of the agreement of W.I.P.P., LLC ("Lessor"), to enter into a Lease dated December 20 th , 2018 (the "Lease") between Lessor and This Budz For You Farms LLC ("Lessee"), pertaining to certain premises located within the Walnut Industrial Park located in Hillsboro, OR, the undersigned Daniel A. Goldin ("Guarantor") hereby unconditionally guarantees the punctual payment of all Rent, as defined in the Lease, and other payments required to be paid by Lessee, and the prompt performance of all other obligations of Lessee under the Lease. If Guarantor consists of more than one person or entity, all liability of Guarantor hereunder shall be joint and several.

Guarantor shall be directly and primarily liable to Lessor for any amount due from Lessee under the Lease, without requiring that Lessor first proceed against Lessee, join Lessee in any proceeding brought to enforce this Guaranty, or exhaust any security held by Lessor. Guarantor agrees that Lessor may deal with Lessee in any manner in connection with the Lease without the knowledge or consent of Guarantor and without affecting Guarantor's liability under this Guaranty. Without limiting the generality of the foregoing, Guarantor agrees that any extension of time, assignment of the Lease, amendment, or modification to the Lease, delay or failure by Lessor in the enforcement of any right under the Lease, or compromise of the amount of any obligation or liability under the Lease made with or without the knowledge or consent of Guarantor shall not affect Guarantor's liability under this Guaranty.



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Guarantor's liability under this Guaranty shall not be affected by any bankruptcy, reorganization, insolvency, or similar proceeding affecting Lessee, nor by any termination or disaffirmance of the Lease or any of Lessee's obligations thereunder in connection with such proceeding. This Guaranty shall remain in full force and effect until the performance in full to Lessor's satisfaction of all obligations of Lessee under the Lease.

Guarantor hereby waives any claim or other right now existing or hereafter acquired against Lessee that arises from the performance of Guarantor's obligations under this Guaranty, including, without limitation, any rights of contribution, indemnity, subrogation, reimbursement, or exoneration. Guarantor hereby agrees to indemnify Lessor and hold it harmless from and against all loss and expense, including legal fees, suffered or incurred by Lessor as a result of claims to avoid any payment received by Lessor from Lessee with respect to the obligations of Lessee under the Lease.

Guarantor hereby waives presentment, protest, notice of default, demand for payment, and all other suretyship defenses whatsoever with respect to any payment guaranteed under this Guaranty, and agrees to pay unconditionally upon demand all amounts owed under the Lease. Guarantor further waives any setoff, defense, or counterclaim that Lessee or Guarantor may have or claim to have against Lessor and the benefit of any statute of limitations affecting Guarantor's liability under this Guaranty.

If Lessor retains an attorney to enforce this Guaranty or to bring any action or any appeal in connection with this Guaranty, the Lease, or the collection of any payment under this Guaranty or the Lease, Lessor shall be entitled to recover its attorney fees, legal expenses, costs, and disbursements in connection therewith, as determined by the court before which such action or appeal is heard, in addition to any other relief to which Lessor may be entitled. Any amount owing under this Guaranty shall bear interest from the date such amount was payable to Lessor to the date of repayment at a rate equal to the lesser of fifteen percent (15%) and the maximum rate permitted by law.

Lessor shall have the unrestricted right to assign this Guaranty in connection with an assignment of the Lease without the consent of, or any other action required by, Guarantor. Each reference in this Guaranty to Lessor shall be deemed to include its successors and assigns, to whose benefit the provisions of this Guaranty shall also inure. Each reference in this Guaranty to Guarantor shall be deemed to include the successors and assigns of Guarantor, all of whom shall be bound by the provisions of this Guaranty. Within ten (10) days after delivery of written demand therefor from Lessor, Guarantor shall execute and deliver to Lessor a statement in writing certifying that this Guaranty is unmodified and in full force and effect, which statement may be conclusively relied upon by any prospective purchaser or encumbrancer of the premises or property. If any provision of this Guaranty is held to be invalid or unenforceable, the validity and enforceability of the other provisions of this Guaranty shall not be affected.



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GUARANTOR:

Name: Daniel A. Goldin

Signature:

State Issuing Driver's License: Oregon Country Issuing Driver's License:USA

Home Address for Notices:

12/17/18

Date:















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EXHIBIT G

GUARANTY

In consideration of the agreement of W.I.P.P., LLC ("Lessor"), to enter into a Lease dated December 20 th , 2018 (the "Lease") between Lessor and This Budz For You Farms LLC ("Lessee"), pertaining to certain premises located within the Walnut Industrial Park located in Hillsboro, OR, the undersigned Richard Chewning ("Guarantor") hereby unconditionally guarantees the punctual payment of all Rent, as defined in the Lease, and other payments required to be paid by Lessee, and the prompt performance of all other obligations of Lessee under the Lease. If Guarantor consists of more than one person or entity, all liability of Guarantor hereunder shall be joint and several.

Guarantor shall be directly and primarily liable to Lessor for any amount due from Lessee under the Lease, without requiring that Lessor first proceed against Lessee, join Lessee in any proceeding brought to enforce this Guaranty, or exhaust any security held by Lessor. Guarantor agrees that Lessor may deal with Lessee in any manner in connection with the Lease without the knowledge or consent of Guarantor and without affecting Guarantor's liability under this Guaranty. Without limiting the generality of the foregoing, Guarantor agrees that any extension of time, assignment of the Lease, amendment, or modification to the Lease, delay or failure by Lessor in the enforcement of any right under the Lease, or compromise of the amount of any obligation or liability under the Lease made with or without the knowledge or consent of Guarantor shall not affect Guarantor's liability under this Guaranty. Guarantor's liability under this Guaranty shall not be affected by any bankruptcy, reorganization, insolvency, or similar proceeding affecting Lessee, nor by any termination or disaffirmance of the Lease or any of Lessee's obligations thereunder in connection with such proceeding. This Guaranty shall remain in full force and effect until the performance in full to Lessor's satisfaction of all obligations of Lessee under the Lease.

Guarantor hereby waives any claim or other right now existing or hereafter acquired against Lessee that arises from the performance of Guarantor's obligations under this Guaranty, including, without limitation, any rights of contribution, indemnity, subrogation, reimbursement, or exoneration. Guarantor hereby agrees to indemnify Lessor and hold it harmless from and against all loss and expense, including legal fees, suffered or incurred by Lessor as a result of claims to avoid any payment received by Lessor from Lessee with respect to the obligations of Lessee under the Lease.

Guarantor hereby waives presentment, protest, notice of default, demand for payment, and all other suretyship defenses whatsoever with respect to any payment guaranteed under this Guaranty, and agrees to pay unconditionally upon demand all amounts owed under the Lease.



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Guarantor further waives any setoff, defense, or counterclaim that Lessee or Guarantor may have or claim to have against Lessor and the benefit of any statute of limitations affecting Guarantor's liability under this Guaranty.

If Lessor retains an attorney to enforce this Guaranty or to bring any action or any appeal in connection with this Guaranty, the Lease, or the collection of any payment under this Guaranty or the Lease, Lessor shall be entitled to recover its attorney fees, legal expenses, costs, and disbursements in connection therewith, as determined by the court before which such action or appeal is heard, in addition to any other relief to which Lessor may be entitled. Any amount owing under this Guaranty shall bear interest from the date such amount was payable to Lessor to the date of repayment at a rate equal to the lesser of fifteen percent (15%) and the maximum rate permitted by law. Lessor shall have the unrestricted right to assign this Guaranty in connection with an assignment of the Lease without the consent of, or any other action required by, Guarantor. Each reference in this Guaranty to Lessor shall be deemed to include its successors and assigns, to whose benefit the provisions of this Guaranty shall also inure. Each reference in this Guaranty to Guarantor shall be deemed to include the successors and assigns of Guarantor, all of whom shall be bound by the provisions of this Guaranty. Within ten (10) days after delivery of written demand therefor from Lessor, Guarantor shall execute and deliver to Lessor a statement in writing certifying that this Guaranty is unmodified and in full force and effect, which statement may be conclusively relied upon by any prospective purchaser or encumbrancer of the premises or property. If any provision of this Guaranty is held to be invalid or unenforceable, the validity and enforceability of the other provisions of this Guaranty shall not be affected.

GUARANTOR:

Name: Richard Chewning

Signature:


State Issuing Driver's License:Oregon

Country Issuing Driver's License:USA

Home Address for Notices:

Date:



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Exhibit H

Control Areas

[JTBKEX1023.JPG]









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EXHIBIT I

LESSOR-PROVIDED EFFICIENCY RATE DISCLOSURE

This Lessor-Provided Efficiency Rate Disclosure is provided pursuant to Section 4.2 of that certain Industrial Lease, made and entered into as of the 20th day of December, 2018 by and between W.I.P.P, LLC an Oregon limited liability company (“Lessor), and This Budz For You Farms LLC a Oregon Limited Liability Company (“Lessee”) (and Daniel A. Goldin, Richard Chewning, (“Guarantors”)(the “Lease), and sets forth the rates to be paid by Lessee as Additional Rent for the use of Lessor-Provided Efficiencies as set forth in Section 4.2 of the Lease. Lessor reserves the right to increase the rates and charges set forth herein based on Lessor’s costs to maintain and operate the systems related to the delivery of the Lessor-Provided Efficiencies.

1. Delivery of Condenser water from Centralized Condenser Water Tower system for Lessee’s water- cooled HVAC system(s) required pursuant to Section 2.2.1(a) of the Lease shall be charged as Additional Rent pursuant to Section 4.2 of the Lease at a rate of $0.10 per 100 gallons of cooling water delivered to Lessee’s Premises.

2. Delivery of centralized bulk CO2 to CO2 dispersal systems in Lessee’s Units, required pursuant to Section 2.2.1(b) of the Lease, shall be charged as Additional Rent pursuant to Section 4.2 of the Lease at a rate of $0.33 per each pound delivered to Lessee’s Premises.


W.I.P.P. Initial: LESSEE Initial:






EXHIBIT 10.3

AGREEMENT OF PURCHASE AND SALE OF an Oregon OLCC Marijuana Processor License # __________________________________ owned by Landon’s Dream LLC , “Seller” an Oregon LLC and CenAviv LLC , “Purchaser” an Oregon LLC.

This AGREEMENT OF PURCHASE AND SALE OF OLCC Marijuana License #____________________________________

(this “Agreement”) , dated ______Aril 10, 2019______________, is entered into between __________________________, an Oregon LLC, (“Seller”), and CenAviv LLC and/or it’s assignee, an Oregon Limited Liability Company (“Purchaser”).

RECITALS

A. The owner of the license, Landon’s Dream LLC , which is licensed to operate from address 2744 Woodland Dr Coos Bay, OR 97420 B. Seller wishes to sell, and Purchaser wishes to purchase the OLCC License.

AGREEMENT

The parties agree as follows:

SECTION 1. OLCC LICENSE PURCHASED

1.1 License Purchased. Seller agrees to sell to the Purchaser and the Purchaser agrees to purchase from the Seller, OLCC Marijuana License #________________________ (Hereinafter “OLCC License”).

SECTION 2. EFFECTIVE DATE

Assuming the transactions contemplated in this Agreement close as defined in Section 10, the effective date and time of transfer of title of the OLCC License shall be when OLCC Approves the Change of Ownership and Change of Location request documentation from Seller and Purchaser.



SECTION 3. PURCHASE PRICE

The purchase price for the OLCC License (the “Purchase Price”) shall be SIXTY THOUSAND DOLLARS ($60,000), to be paid in the following manner:

(a) $60,000.00 due upon OLCC approval of the Change of Ownership and Change of Location. (b) At Closing, as defined in Section 2, the entire sum of $60,000.00 shall be distributed to Seller.

SECTION 4. PURCHASE PRICE ALLOCATION

The parties agree that the Purchase Price will be allocated as determined by Seller following Closing

SECTION 5. REAL PROPERTY

The Seller’s farm is currently located at the real property location of 2744 Woodland Dr Coos Bay, OR 97420 (the “Real Property”).

SECTION 6. SELLER REPRESENTATIONS AND WARRANTIES Seller represents and warrants to Purchaser as follows:

6.1 Authority/Existence. Seller is an Oregon LLC and has all requisite power and authority to transfer the OLCC License. The execution, delivery, and performance of this Agreement and all other agreements contemplated by this Agreement to which Seller is a party have been duly authorized by the Seller. This Agreement, when executed and delivered by the Seller, will constitute the legal, valid, and binding obligation of Seller, enforceable against Seller, in accordance with their respective terms except as the enforceability thereof may be limited by the application of bankruptcy, insolvency, moratorium, or similar laws affecting the rights of creditors generally or judicial limits on the right of specific performance.

Seller is the owner of indefeasible title to all the OLCC License being sold under the terms of this Agreement.

6.2 No Encumbrances. The execution and delivery of this Agreement by the Seller, and the consummation of the transactions contemplated thereby, will not result in the creation or imposition of any valid lien, charge (except in the case of the transfer of domain name registrations), or encumbrance on any of the OLCC License, and will not require the authorization, consent, or approval of any third party, except



the OLCC authorizing the transfer.

6.3 Compliance with Laws. To the best of Seller’s knowledge, Seller has at all relevant times conducted his business in compliance with all applicable laws and regulations. The Seller is not subject to any outstanding order, writ, injunction, or decree, and the Seller has not been charged with a violation of any provision of federal, state, or local law or regulation.

6.4 Accuracy of Representations and Warranties. None of the representations or warranties of the Seller contain or will contain any untrue statement of a material fact or omit or will omit or misstate a material fact necessary in order to make Seller’s representations and warranties in this Agreement not misleading.

SECTION 7. PURCHASER REPRESENTATIONS AND WARRANTIES

Purchaser represents and warrants to Seller as follows:

7.1 Corporate Existence. Purchaser is a limited liability duly organized and legally existing under the laws of the State of Oregon. Purchaser has all requisite company power and authority to enter into this Agreement and the related agreements and to perform its obligations under them.

7.2 Authorization. The execution, delivery, and performance of this Agreement have been duly authorized and approved by Purchaser. This Agreement constitutes a valid and binding agreement of Purchaser, enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, reorganization, insolvency, or similar laws affecting the enforcement of creditors’ rights or by the application of general principles of equity.

7.3 No Conflict with Other Instruments or Agreements. The execution, delivery, and performance by Purchaser of this Agreement will not result in a breach or violation of, or constitute a default under any material agreement to which Purchaser is a party or by which Purchaser is bound.

7.4 Accuracy of Representations and Warranties. None of the representations or warranties of Purchaser contain or will contain any untrue statement of a material fact or omit or will omit or misstate a material fact necessary in order to make the Purchaser’s representations and warranties in this Agreement not misleading.



SECTION 8. COVENANTS OF SELLER

8.1 Conditions and Best Efforts. Seller agrees to use his best efforts to effectuate the transactions contemplated by this Agreement and to fulfill all the conditions of Purchaser’s obligations under this Agreement, and will do all acts and things as may be required to carry out Purchaser’s obligations and to consummate this Agreement.

SECTION 9. COVENANTS OF PURCHASER

9.1 Conditions and Best Efforts. Purchaser agrees to use his best efforts to effectuate the transactions contemplated by this Agreement and to fulfill all the conditions of Purchaser’s obligations under this Agreement, and will do all acts and things as may be required to carry out Purchaser’s obligations and to consummate this Agreement.

SECTION 10. CLOSING

10.1 Time and Place. The transactions provided for in this Agreement will be closed at the office of Seller’s Counsel upon receipt of written confirmation that the OLCC has received Change of Ownership documentation and Change of Location documentation, or at such a time both parties agree deal has been closed. (the “Closing”).

10.2 Obligations of Seller at Closing. At the Closing, Seller will deliver to the Purchaser the written confirmation that the OLCC has approved Seller’s and Buyer’s request to change ownership and change of location of the OLCC License from Seller to Purchaser.

10.3 Purchaser’s Obligations at Closing. At the Closing, upon receipt of written confirmation from the OLCC that they have approved change of ownership and location for the OLCC License from Seller to Purchaser, CenAviv or its assignee’s will disburse funds in the form of a wire payment or a cashier’s check.

10.4 Seller and Purchaser both agree. Purchaser gives the Seller the rights to convert any of the balance remaining after closing to restricted common stock of Jetblack Corp. a Nevada Corporation. CenAviv LLC is currently a wholly owned subsidiary of Jetblack Corp. Jetblack gives the seller the right to convert any part of the balance to shares of restricted common stock at a conversion of .20 a share. Jetblack Corp’s ticker symbol is JTBK. If Seller chooses to convert the entire $60,000 balance, the balance would convert to 300,000 shares of restricted common stock. The stock carries a restriction of 1 year before resale.



10.5 In the event the Purchaser is not able to make a $60,000 closing payment at closing. The seller has the right to convert to restricted stock or allow Purchaser to carry the balance at an interest rate of 1% a month.

SECTION 11. DEFAULT

11.1 Seller‘s Default. If Seller breaches or fails to perform any of the material terms, covenants, conditions, or obligations of this Agreement, time of payment and performance being of the essence, or commits a material breach of this Agreement, such failure or breach shall constitute an “Event of Default”. Upon the occurrence of a Seller’s Event of Default, Purchaser may either (i) terminate this Agreement after giving Seller Notice of Default and an opportunity to cure as provided in Section 17.3, below, or (ii) bring an action for specific performance of the terms of this Agreement for conveyance of the OLCC License in accordance with this Agreement, or (iii) exercise any other remedy available to Purchaser at law or equity.

11.2 Purchaser’s Default. If Purchaser breaches or fails to perform any of the material terms, covenants, conditions, or obligations of this Agreement, time of payment and performance being of the essence, such breach or failure shall constitute an “Event of Default”. Upon the occurrence of a Purchaser’s Event of Default, Seller may either (i) terminate this Agreement after giving Purchaser Notice of Default and an opportunity to cure as provided in Section 17.3, below, or (ii) bring an action for specific performance of the terms of this Agreement for conveyance of the OLCC License in accordance with this Agreement, or (iii) exercise any other remedy available to Seller at law or equity..

11.3 Notice of Default. Upon the occurrence of an Event of Default, the non-defaulting party may give notice of default and an opportunity to cure to the defaulting party in accordance with the Notice requirements of subsection 19.4 of this Agreement. No termination of this Agreement or exercise of other remedies available to the non-defaulting party may occur until written notice describing the alleged default with particularity has been given and the defaulting party has failed to completely cure the default within five (5) days after the notice is received for a default in the obligation to pay any sum of money when due, or within thirty (30) days in the case of any other default.



SECTION 12. TERMINATION OF AGREEMENT

12.1 Event of Default. Upon the occurrence of an Event of Default by a party, followed by failure of said party to cure the Event of Default after notice as required above, the non- defaulting party may terminate this Agreement on the date fixed for termination in the notice of default given and shall be entitled to pursue any and all remedies available to it at law or in equity for breach of contract. 12.2 Breach of Representations and Warranties; Failure of Conditions. Purchaser may elect by notice to Seller, and/or Seller may elect by notice to Purchaser, prior to Closing, to terminate this Agreement if:

12.2.1 The terminating party shall have discovered a material error, misstatement, or omission in the representations and warranties made in this Agreement by the other party.

12.2.2 All of the conditions precedent of the terminating party's obligations under this Agreement as set forth here in above have not occurred and have not been waived by the terminating party on or prior to the closing date.

12.3 Closing Notwithstanding the Right to Terminate. A party with a right to terminate this Agreement shall not be bound to exercise such right, and its failure to exercise such right shall not constitute a waiver of any other right it may have under this Agreement, including but not limited to remedies for breach of a representation, warranty, or covenant.

SECTION 13. MISCELLANEOUS PROVISIONS

13.1. Binding Effect. This Agreement shall be binding on and inure to the benefit of the parties and their respective heirs, personal representatives, successors, and assigns.

13.2. Assignment. Neither this Agreement nor any of the rights, interests, or obligations under this Agreement shall be assigned by any party prior to Closing unless it is a subsidiary, parent company or affiliate company of the named parties above, without the prior written consent of the other party.

13.3. No Third-Party Beneficiaries. Nothing in this Agreement, express or implied, is intended or shall be construed to confer on any person, other than the parties to this Agreement, any right, remedy, or claim under or with respect to this Agreement.



13.4. Notices. All notices and other communications under this Agreement must be in writing and shall be deemed to have been given if delivered personally, sent by facsimile (with confirmation), sent by email, mailed by certified mail, or delivered by an overnight delivery service (with confirmation) to the parties to the following addresses or facsimile numbers (or at such other address or facsimile number as a party may designate by like notice to the other parties):

SELLER: ______________ ______________

 ______________ ______________

With a copy to: (optional) ______________ ______________

 ______________

 ______________

PURCHASER:

Daniel A. Goldin CenAviv LLC

4949 SW Macadam Ave 2nd Floor Suite 84 Portland, Oregon 97239

Any notice or other communication shall be deemed to be given (a) on the date of personal delivery, (b) at the expiration of the 3rd day after the date of deposit in the United States mail, or (c) on the date of confirmed delivery by facsimile or overnight delivery service.

13.5. Amendments. This Agreement may be amended only by an instrument in writing executed by all the parties.

13.6. Construction. The captions used in this Agreement are provided for convenience only and shall not affect the meaning or interpretation of any provision of this Agreement. All references in this Agreement to "Section" or "Sections" without additional identification refer to the Section or Sections of this Agreement. All words used in this Agreement shall be construed to be of such gender or number as the circumstances require. Whenever the words include or including are used in this Agreement, they shall be deemed to be followed by the words without limitation.



13.7. Counterparts. This Agreement may be executed in counterparts, each of which will be considered an original and all of which together will constitute one and the same agreement.

13.8. Facsimile Signatures. Facsimile transmission of any signed original document, and retransmission of any signed facsimile transmission, shall be the same as delivery of an original. At the request of either party, the parties shall confirm facsimile transmitted signatures by signing an original document.

13.9. Further Assurances. Each party agrees (a) to execute and deliver such other documents and (b) to do and perform such other acts and things, as any other party may reasonably request, in order to carry out the intent and accomplish the purposes of this Agreement.

13.10. Time of the Essence. Time is of the essence with respect to all dates and time periods set forth or referred to in this Agreement.

13.11. Expenses. Except as otherwise expressly provided in this Agreement, each party to this Agreement will bear the party's own expenses in connection with the preparation, execution, and performance of this Agreement and the transactions contemplated by this Agreement.

13.12. Waiver. Any provision or condition of this Agreement may be waived at any time, in writing, by the party entitled to the benefit of such provision or condition. Waiver of any breach of any provision shall not be a waiver of any succeeding breach of the provision or a waiver of the provision itself or any other provision.

13.13. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Oregon, without regard to conflict-of-laws principles.

13.14. Attorney Fees. If any arbitration, suit, or action is instituted to interpret or enforce the provisions of this Agreement, to rescind this Agreement, or otherwise with respect to the subject matter of this Agreement, the party prevailing on an issue shall be entitled to recover with respect to such issue, in addition to costs, reasonable attorney fees incurred in preparation or in prosecution or defense of such arbitration, suit, or action as determined by the arbitrator or trial court, and if any appeal is taken from such decision, reasonable attorney fees as determined on appeal.



13.15. Injunctive and Other Equitable Relief. The parties agree that the remedy at law for any breach or threatened breach by a party may, by its nature, be inadequate, and that the other parties shall be entitled, in addition to damages, to a restraining order, temporary and permanent injunctive relief, specific performance, and other appropriate equitable relief, without showing or proving that any monetary damage has been sustained.

13.16. Severability. If any provision of this Agreement shall be invalid or unenforceable in any respect for any reason, the validity and enforceability of any such provision in any other respect and of the remaining provisions of this Agreement shall not be in any way impaired.

13.17. Entire Agreement. This Agreement (including the documents and instruments referred to in this Agreement) constitutes the entire agreement and understanding of the parties with respect to the subject matter of this Agreement and supersedes all prior understandings and agreements, whether written or oral, among the parties with respect to such subject matter.

SELLER: ________________________________

_____________________________ ______________________________ ______________ Signature Print Name and Title Date

SELLER: _________________________________

_____________________________ ______________________________ ______________ Signature Print Name and Title Date

PURCHASER: CenAviv LLC

_____________________________ ______________________________ _______________ Signature Print Name and Title Date





EXHIBIT 10.4

AGREEMENT OF PURCHASE AND SALE OF TRAILHEAD FARM OLCC MARIJUANA LICENSE 020 10000 357BC2

This AGREEMENT OF PURCHASE AND SALE OF OLCC Marijuana License 020 10000 357BC2

(this “Agreement”) , dated ____________________, is entered into between Trailhead Farms LLC, an Oregon LLC, (“Seller”), and CenAviv LLC and/or it’s assignee, an Oregon Limited Liability Company (“Purchaser”).

RECITALS

A. Trailhead Farms is the owner of OLCC Marijuana License 020 10000 357BC2 which is licensed to operate from 4180 Hayes Drive, Hood River, Oregon.

B. Seller wishes to sell, and Purchaser wishes to purchase the OLCC License.

AGREEMENT

The parties agree as follows:

SECTION 1. OLCC LICENSE PURCHASED

1.1 License Purchased. Seller agrees to sell to the Purchaser and the Purchaser agrees to purchase from the Seller, OLCC Marijuana License 020 10000 357BC2 (Hereinafter “OLCC License”).

SECTION 2. EFFECTIVE DATE

Assuming the transactions contemplated in this Agreement close as defined in Section 10, the effective date and time of transfer of title of the OLCC License shall be when OLCC Approves the Change of Ownership and Change of Location request documentation from Seller and Purchaser.



SECTION 3. PURCHASE PRICE

The purchase price for the OLCC License (the “Purchase Price”) shall be SIXTY THOUSAND DOLLARS ($60,000), to be paid in the following manner:

(a) $60,000.00 due upon OLCC approval of the Change of Ownership and Change of Location. (b) At Closing, as defined in Section 2, the entire sum of $60,000.00 shall be distributed to Seller.

SECTION 4. PURCHASE PRICE ALLOCATION

The parties agree that the Purchase Price will be allocated as determined by Seller following Closing 2/26/2019

SECTION 5. REAL PROPERTY LEASE

The Seller’s farm is currently located at the real property location of 4180 Hayes Drive, Hood River, Oregon (the “Real Property”). Purchaser hereby agrees to lease the real property from February 1, 2019 to February 1, 2020. The lease price is $1,000.00 per month and is included in the purchase price. The lease automatically terminates upon OLCC Change of Ownership Approval and Change of Location Approval.

SECTION 6. SELLER REPRESENTATIONS AND WARRANTIES

Seller represents and warrants to Purchaser as follows:

6.1 Authority/Existence. Seller is an Oregon LLC and has all requisite power and authority to transfer the OLCC License. The execution, delivery, and performance of this Agreement and all other agreements contemplated by this Agreement to which Seller is a party have been duly authorized by the Seller. This Agreement, when executed and delivered by the Seller, will constitute the legal, valid, and binding obligation of Seller, enforceable against Seller, in accordance with their respective terms except as the enforceability thereof may be limited by the application of bankruptcy, insolvency, moratorium, or similar laws affecting the rights of creditors generally or judicial limits on the right of specific performance.

Seller is the owner of indefeasible title to all the OLCC License being sold under the terms of this Agreement.



6.2 No Encumbrances. The execution and delivery of this Agreement by the Seller, and the consummation of the transactions contemplated thereby, will not result in the creation or imposition of any valid lien, charge (except in the case of the transfer of domain name registrations), or encumbrance on any of the OLCC License, and will not require the authorization, consent, or approval of any third party, except the OLCC authorizing the transfer.

6.3 Compliance with Laws. To the best of Seller’s knowledge, Seller has at all relevant times conducted his business in compliance with all applicable laws and regulations. The Seller is not subject to any outstanding order, writ, injunction, or decree, and the Seller has not been charged with a violation of any provision of federal, state, or local law or regulation.

6.4 Accuracy of Representations and Warranties. None of the representations or warranties of the Seller contain or will contain any untrue statement of a material fact or omit or will omit or misstate a material fact necessary in order to make Seller’s representations and warranties in this Agreement not misleading.

SECTION 7. PURCHASER REPRESENTATIONS AND WARRANTIES

Purchaser represents and warrants to Seller as follows:

7.1 Corporate Existence. Purchaser is a limited liability duly organized and legally existing under the laws of the State of Oregon. Purchaser has all requisite company power and authority to enter into this Agreement and the related agreements and to perform its obligations under them.

7.2 Authorization. The execution, delivery, and performance of this Agreement have been duly authorized and approved by Purchaser. This Agreement constitutes a valid and binding agreement of Purchaser, enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, reorganization, insolvency, or similar laws affecting the enforcement of creditors’ rights or by the application of general principles of equity.

7.3 No Conflict with Other Instruments or Agreements. The execution, delivery, and performance by Purchaser of this Agreement will not result in a breach or violation of, or constitute a default under any material agreement to which Purchaser is a party or by which Purchaser is bound.



7.4 Accuracy of Representations and Warranties. None of the representations or warranties of Purchaser contain or will contain any untrue statement of a material fact or omit or will omit or misstate a material fact necessary in order to make the Purchaser’s representations and warranties in this Agreement not misleading.

SECTION 8. COVENANTS OF SELLER

8.1 Conditions and Best Efforts. Seller agrees to use his best efforts to effectuate the transactions contemplated by this Agreement and to fulfill all the conditions of Purchaser’s obligations under this Agreement, and will do all acts and things as may be required to carry out Purchaser’s obligations and to consummate this Agreement.

SECTION 9. COVENANTS OF PURCHASER

9.1 Conditions and Best Efforts. Purchaser agrees to use his best efforts to effectuate the transactions contemplated by this Agreement and to fulfill all the conditions of Purchaser’s obligations under this Agreement, and will do all acts and things as may be required to carry out Purchaser’s obligations and to consummate this Agreement.

SECTION 10. CLOSING

10.1 Time and Place. The transactions provided for in this Agreement will be closed at the office of Seller’s Counsel upon receipt of written confirmation that the OLCC has received Change of Ownership documentation and Change of Location documentation, or at such a time both parties agree deal has been closed. (the “Closing”).

10.2 Obligations of Seller at Closing. At the Closing, Seller will deliver to the Purchaser the written confirmation that the OLCC has approved Seller’s and Buyer’s request to change ownership and change of location of the OLCC License from Seller to Purchaser.

10.3 Purchaser’s Obligations at Closing. At the Closing, upon receipt of written confirmation from the OLCC that they have approved change of ownership and location for the OLCC License from Seller to Purchaser, CenAviv or its assignee’s will disburse funds in the form of a wire payment or a cashier’s check.



10.4 Seller and Purchaser both agree. Purchaser gives the Seller the rights to convert any of the balance remaining after closing to restricted common stock of Jetblack Corp. a Nevada Corporation. CenAviv LLC is currently a wholly owned subsidiary of Jetblack Corp. Jetblack gives the seller the right to convert any part of the balance to shares of restricted common stock at a conversion of .20 a share. Jetblack Corp’s ticker symbol is JTBK. If Seller chooses to convert the entire $60,000 balance, the balance would convert to 300,000 shares of restricted common stock. The stock carries a restriction of 1 year before resale.

10.5 In the event the Purchaser is not able to make a $60,000 closing payment at closing. The seller has the right to convert to restricted stock or allow Purchaser to carry the balance at an interest rate of 1% a month.

SECTION 11. DEFAULT

11.1 Seller‘s Default. If Seller breaches or fails to perform any of the material terms, covenants, conditions, or obligations of this Agreement, time of payment and performance being of the essence, or commits a material breach of this Agreement, such failure or breach shall constitute an “Event of Default”. Upon the occurrence of a Seller’s Event of Default, Purchaser may either (i) terminate this Agreement after giving Seller Notice of Default and an opportunity to cure as provided in Section 17.3, below, or (ii) bring an action for specific performance of the terms of this Agreement for conveyance of the OLCC License in accordance with this Agreement, or (iii) exercise any other remedy available to Purchaser at law or equity.

11.2 Purchaser’s Default. If Purchaser breaches or fails to perform any of the material terms, covenants, conditions, or obligations of this Agreement, time of payment and performance being of the essence, such breach or failure shall constitute an “Event of Default”. Upon the occurrence of a Purchaser’s Event of Default, Seller may either (i) terminate this Agreement after giving Purchaser Notice of Default and an opportunity to cure as provided in Section 17.3, below, or (ii) bring an action for specific performance of the terms of this Agreement for conveyance of the OLCC License in accordance with this Agreement, or (iii) exercise any other remedy available to Seller at law or equity..



11.3 Notice of Default. Upon the occurrence of an Event of Default, the non-defaulting party may give notice of default and an opportunity to cure to the defaulting party in accordance with the Notice requirements of subsection 19.4 of this Agreement. No termination of this Agreement or exercise of other remedies available to the non-defaulting party may occur until written notice describing the alleged default with particularity has been given and the defaulting party has failed to completely cure the default within five (5) days after the notice is received for a default in the obligation to pay any sum of money when due, or within thirty (30) days in the case of any other default.

SECTION 12. TERMINATION OF AGREEMENT

12.1 Event of Default. Upon the occurrence of an Event of Default by a party, followed by failure of said party to cure the Event of Default after notice as required above, the non- defaulting party may terminate this Agreement on the date fixed for termination in the notice of default given and shall be entitled to pursue any and all remedies available to it at law or in equity for breach of contract. 12.2 Breach of Representations and Warranties; Failure of Conditions. Purchaser may elect by notice to Seller, and/or Seller may elect by notice to Purchaser, prior to Closing, to terminate this Agreement if:

12.2.1 The terminating party shall have discovered a material error, misstatement, or omission in the representations and warranties made in this Agreement by the other party.

12.2.2 All of the conditions precedent of the terminating party's obligations under this Agreement as set forth here in above have not occurred and have not been waived by the terminating party on or prior to the closing date.

12.3 Closing Notwithstanding the Right to Terminate. A party with a right to terminate this Agreement shall not be bound to exercise such right, and its failure to exercise such right shall not constitute a waiver of any other right it may have under this Agreement, including but not limited to remedies for breach of a representation, warranty, or covenant.

SECTION 13. MISCELLANEOUS PROVISIONS

13.1. Binding Effect. This Agreement shall be binding on and inure to the benefit of the parties and their respective heirs, personal representatives, successors, and assigns.



13.2. Assignment. Neither this Agreement nor any of the rights, interests, or obligations under this Agreement shall be assigned by any party prior to Closing unless it is a subsidiary, parent company or affiliate company of the named parties above, without the prior written consent of the other party.

13.3. No Third-Party Beneficiaries. Nothing in this Agreement, express or implied, is intended or shall be construed to confer on any person, other than the parties to this Agreement, any right, remedy, or claim under or with respect to this Agreement.

13.4. Notices. All notices and other communications under this Agreement must be in writing and shall be deemed to have been given if delivered personally, sent by facsimile (with confirmation), sent by email, mailed by certified mail, or delivered by an overnight delivery service (with confirmation) to the parties to the following addresses or facsimile numbers (or at such other address or facsimile number as a party may designate by like notice to the other parties):

SELLER:

David Henderson

4100 Belmont Drive Hood River, OR 97031


With a copy to:

Michael B. FitzSimons Jaques Sharp

205 3rd Street

Hood River, OR 97031 Fax: (541)386-8771


PURCHASER:

Daniel A. Goldin CenAviv, LLC

4949 SW Macadam Ave 2nd Floor Suite 84 Portland, Oregon 97239


Any notice or other communication shall be deemed to be given (a) on the date of personal delivery, (b) at the expiration of the 3rd day after the date of deposit in the United States mail, or (c) on the date of confirmed delivery by facsimile or overnight delivery service.



13.5. Amendments. This Agreement may be amended only by an instrument in writing executed by all the parties.

13.6. Construction. The captions used in this Agreement are provided for convenience only and shall not affect the meaning or interpretation of any provision of this Agreement. All references in this Agreement to "Section" or "Sections" without additional identification refer to the Section or Sections of this Agreement. All words used in this Agreement shall be construed to be of such gender or number as the circumstances require. Whenever the words include or including are used in this Agreement, they shall be deemed to be followed by the words without limitation.

13.7. Counterparts. This Agreement may be executed in counterparts, each of which will be considered an original and all of which together will constitute one and the same agreement.

13.8. Facsimile Signatures. Facsimile transmission of any signed original document, and retransmission of any signed facsimile transmission, shall be the same as delivery of an original. At the request of either party, the parties shall confirm facsimile transmitted signatures by signing an original document.

13.9. Further Assurances. Each party agrees (a) to execute and deliver such other documents and (b) to do and perform such other acts and things, as any other party may reasonably request, in order to carry out the intent and accomplish the purposes of this Agreement.

13.10. Time of the Essence. Time is of the essence with respect to all dates and time periods set forth or referred to in this Agreement.

13.11. Expenses. Except as otherwise expressly provided in this Agreement, each party to this Agreement will bear the party's own expenses in connection with the preparation, execution, and performance of this Agreement and the transactions contemplated by this Agreement.

13.12. Waiver. Any provision or condition of this Agreement may be waived at any time, in writing, by the party entitled to the benefit of such provision or condition. Waiver of any breach of any provision shall not be a waiver of any succeeding breach of the provision or a waiver of the provision itself or any other provision.

13.13. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Oregon, without regard to conflict-of-laws principles.



13.14. Attorney Fees. If any arbitration, suit, or action is instituted to interpret or enforce the provisions of this Agreement, to rescind this Agreement, or otherwise with respect to the subject