under the Consulting Agreement shall be completed concurrent with the Closing as the term is defined in Paragraph 4.1 of this Agreement.
2. Escrow; Payment of Purchase Price; Fees and Expenses.
2.1 Opening of Escrow. The parties hereby appoint United Escrow Co., a California corporation, located at 3440 Wilshire Boulevard, Suite 600, in the City of Los Angeles, County of Los Angeles, State of California, U.S.A., to act as escrow holder ("Escrow Holder") and to open and administer an escrow account ("Escrow") in a federally insured bank in the State of California for the consummation of the sale of the Shares to Purchaser pursuant to the terms of this Agreement. Escrow shall open not later than February 4, 2019 upon the execution of an Escrow Agreement (the "Escrow Agreement") which incorporates this Agreement executed by Purchaser, Sellers and Escrow Holder, and Escrow Holder's receipt of the Initial Deposit (as that term is defined in Section 2.2 hereof), Escrow Holder is authorized to act in accordance with the terms of this Agreement, Escrow Agreement and any other instructions duly executed by Purchaser and Sellers, as provided in the Escrow Agreement.
2.2 Deposit. Upon execution of this Agreement and the Escrow Agreement, whichever occurs later, Purchaser shall deliver to Escrow Holder a deposit ("Initial Deposit") in the amount of Forty Thousand Dollars (US$40,000.00)
2.3 Escrow Holder Fees. Sellers agree to pay one-half (½) of Escrow Holder's fees and Purchaser agrees to pay one-half(½) of Escrow Holder's fees under the Escrow Agreement. If any additional fees accrue to the Escrow Holder, each party shall pay its proportional share upon demand as provided in the Escrow Agreement.
2.4 Other Expenses. Except as otherwise specifically provided herein, each party hereto will be responsible for its own costs and expenses incurred in negotiating the transaction contemplated herein and in preparing for the execution of this Agreement and all investigations, due diligence, appraisals, inspections and proceedings in connection therewith, including without limitation fees and expenses of attorneys, accountants, appraisers, bankers and other third parties for which such party has contracted.
3. Due Diligence.
3.1 Due Diligence. Upon Purchaser's delivery of the Initial Deposit to Escrow Holder, Sellers shall grant Purchaser the opportunity to conduct due diligence activities pertaining to DJCC ("Due Diligence"). Sellers shall provide such reasonable cooperation as Purchaser may reasonably request in connection with the Due Diligence.
3.2 Due Diligence Period. Purchaser shall have the right to conduct its Due Diligence for a period through noon on Friday, February 1, 2019 ("Due Diligence Period") and prior to the submission of an application for an assignment of Commercial Cannabis Business Development Agreement Between City of Commerce and DJCC Corporation dated November 25, 2018 (the "Assignment") by Purchaser on or prior to the close of business on February I, 2019 ..
3.3 Provision of Due Diligence Materials. Purchaser acknowledges the receipt of the following from DJCC if any of such does exists: (i) copies of all material contracts including, but not I im ited to, the licenses and lease agreement, if any, (ii) copies of DJCC'S financial statements including, but not limited to, detailed list of account receivables and account payables, if any; (iii) copies of relevant litigation files involving DJCC and/or any of its shareholders, directors or officers within the last five (5) years including all matters that have been disposed of, if any; (iv) entire corporate formation documents of DJCC; (v) entire minutes of the regular and special meetings of the shareholders and the directors of DJCC; (vi) all documents evidencing issuance of stocks of DJCC; (vii) all documents showing the title to the assets owned by DJCC, if any; (viii) any and all documents showing debts, security agreement, financing statements, liens and/or encumbrances on the assets owned by DJCC, if any; (ix) any and all documents 3 XXXX
XXXXXXXXXXXXXXXXXXXX
other obligation of; or (4) the creation or imposition of any lien, charge, or encumbrance on any of the properties of DJCC.
6.9 Full Disclosure. The representations and warranties of contained in this Agreement, and the other provisions of this Agreement, when read together, do not contain any untrue statement of a material fact or omit any material fact necessary to make the statements contained therein or herein in view of the circumstances under which they were made not misleading
7. Representations and Warranties of Purchaser.
Purchaser hereby represents and warrants to Sellers as follows:
7. I Authority; Enforceability; Effect of Transaction Contracts. Purchaser has ful I legal power and authority to enter into, execute and deliver this Agreement and perform its obligations hereunder. The execution, delivery and performance of this Agreement by Purchaser are within Purchaser's power and have been duly and validly authorized, if required, by all necessary action of Purchaser. This Agreement constitutes a valid and legally binding obligation of Purchaser, enforceable against Purchaser in accordance with its terms. 7 .2 Purchaser's Representations.
(a) Purchaser is purchasing the Securities in its own name and for its own account, and no other person has any interest in or right with respect to the Securities, nor have the undersigned agreed to give any person any such interest or right in the future. (b) Purchaser is acquiring the Securities for investment and not with a view to or for sale in connection with any distribution of the Securities. The undersigned recognizes that the Securities have not been registered under the Federal Securities Act of 1933 or qualified under the California Corporate Securities Law of 1968, that any disposition of the Securities is subject to restrictions imposed by federal and state law, and that the ce1tificate representing the Securities will bear a restrictive legend. The undersigned also recognizes that the undersigned cannot dispose of the Securities absent registration and qualification, or an available exemption from registration and qualification, and that no undertaking has been made with regard to registering or qualifying the Securities in the future. The undersigned understands that the availability of an exemption in the future will depend in part on circumstances outside its control and that the undersigned may be required to hold the Securities for a substantial period. The undersigned recognizes that no public market exists with respect to the Securities and no representation has been made to it that such a public market will exist at a future date. The undersigned understands that the California Commissioner of Corporations has made no finding or determination relating to the fairness for investment of the Securities offered by the Company and that the Commissioner has not and will not recommend or endorse the Securities.
(c) Purchaser has not seen or received any advertisement or general solicitation with respect to the sale of the Securities.
(d) The total consideration to be paid by the undersigned for the Securities shall be Four Hundred Thousand Dollars ($400,000.00).
(e) Purchaser has a sufficient experience in the type of business that the Company is involve in and, therefore, is capable of evaluating the merits and risks of this investment and of protecting his own interests in connection with this investment. 7 xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx