TEMPORARY FORBEARANCE AGREEMENT
THISTEMPORARYFORBEARANCEAGREEMENT(this "AGREEMENT"),dated asofAugust26,2013,asamendedNovember26,2013,betweenIDSIndustries,Inc.,aNevadacorporation(the "COMPANY")andArgentOffset LLC,aCalifornia corporation,the"HOLDER"). Capitalizedtermsnot otherwisedefinedhereinshall have themeanings specifiedintheNote(asdefinedbelow).
WHEREAS,onFebruary27,2013, theCompanyissueda $33,850.00ConvertiblePromissoryNotedueAugust26,2013(the"Note")totheHolder;
WHEREAS,ontheCompanyhasrequested topayandtheHolderhas agreedtoacceptafeeof$1,000.00(the“Forbearance Fee”)tobepaid ontheearlierofDecember15,2013ortheoccurrenceofaTerminationEvent(asdefinedinSection3).
WHEREAS,theCompanyhasrequested,andtheHolderhasagreed,subjecttothetermsandconditions setforthinthisAgreement,forthe periodcommencing onAugust26,2013andendingontheearlierofDecember15,2013(the"PAYMENTDATE")ortheoccurrenceofaTermination Event(asdefinedinSection3)(the "WAIVER PERIOD"),(i)towaiveanyDefaultorEventofDefaultexistingsolelyas aresult ofthefailureoftheCompanyto paytoHolderallamounts duecommencingAugust26,2013andcontinuingthroughandincludingDecember15,2013,withpayments tobemadetotheHolderonthe PaymentDate),and(ii) thatitshallrefrainfromexercisingits rightsand remediesagainsttheCompanyinconnectionwiththeCompany'sfailuretopayHolderprior tothePayment Date;
NOW,THEREFORE,inconsiderationofthepremises and themutualcovenantsandagreementoftheparties hereinaftersetforth, thepartiesheretoherebyagree asfollows:
1. WAIVER OFDEFAULT. The Holderherebywaives,untiltheexpirationoftheWaiverPeriod,anyDefaultorEventofDefaultexisting solelyasaresultof theCompany'sfailuretopaytoHoldertheForbearanceFeeprior tothePaymentDate.TheCompany acknowledges thatinterestshallaccrue attherateof 18.0% perannumfrom thedate eachpaymentisduepursuanttothe Noteuntilallamounts arepaidinfullincash.
2. STANDSTILL.Holder herebyagreesthatduringtheWaiverPerioditwillnotexerciseanyremedyunderthe Note,atlaworinequity, whichithereafter mayhaveinrespectofanyDefaultorEventofDefaultresultingsolelyfromthefailureofthe CompanytopaytoHoldertheForbearanceFeeprior tothePaymentDate.
3. TERMINATION.ThisAgreement shallterminate upontheearlierof(i)thepaymentinfulltoHolderoftheForbearanceFee, plusallamounts owing thereonpursuanttotheNoteandSection1hereof,(ii)the occurrenceofan Event ofDefault(otherthaninconnectionwith theForbearanceFee)and(iii)anyrepurchaseofthe NotepursuanttoSection2oftheNote;provided,thatthisAgreement shallonlyterminate withrespecttothe Noteactuallyrepurchasedfrom theHolderpursuanttothetermsoftheNote (a"TERMINATION EVENT"). ABSENCEOFWAIVER. The parties hereto agreethat,excepttotheextentexpresslyset forthherein, nothingcontainedhereinshallbedeemedto:
(a) beaconsentto,orwaiverof,anyDefaultorEventofDefault;or
(b) prejudiceanyright orremedywhichtheHoldermaynow haveormayinthefuturehaveunderthe Noteorotherwise,including,without limitation,anyrightorremedyresulting from anyDefaultorEventofDefault.
4. REPRESENTATIONS. Eachpartyheretoherebyrepresentsandwarrants tothe otherpartiesthat:
(a) eachpartyis acorporationorpartnership,asapplicable,dulyorganized,validly existing,andingoodstanding underthelawsofthestate ofits incorporationorformation,asapplicable;
(b) theexecution,deliveryandperformanceofthisAgreementbysuchpartyiswithinitscorporateortrustpowers,asapplicable,hasbeendulyauthorizedbyallnecessarycorporateortrustaction,as applicable,hasreceivedallnecessaryconsentsandapprovals (ifanyshallberequired),anddoesnot and willnotcontraveneorconflictwithanyprovisionsoflaworofthe charterorby-laws,or trustagreement,asapplicable,ofsuchpartyorofanymaterialagreementbindinguponsuchpartyoritsproperty;and
(c) thisAgreementwillbe alegal,valid andbindingobligationofeachparty,enforceable againstitinaccordance withitsterms.
Inaddition,theCompanyrepresentsand warrantsthattothebestofitsknowledge,exceptassetforthhereinnoDefaultorEventofDefault underthe Notehasoccurredandiscontinuing.
5. CONTINUINGEFFECT,ETC.Exceptasexpresslyprovidedherein,theCompanyherebyagreesthattheNoteshallcontinueunchangedandinfullforceand effect,andallrights,powersandremediesoftheHolderthereunderandunderapplicablelaw arehereby expresslyreserved.TheCompanyalsoherebyagrees thatitwillapply,tothemaximum extentpossible, anynetproceeds from anypublicofferingbythe CompanyinexcessoftheamountsinvestedinthepublicofferingbytheHolderto paytotheHolderanyamount oftheForbearance Feeand balance dueontheNotethenoutstanding.
6. MISCELLANEOUS.
(a) Sectionheadings usedinthisAgreementareforconvenienceofreferenceonlyandshallnotaffecttheconstructionofthisAgreement.
(b) ThisAgreementmaybeexecutedinanynumberofcounterpartsandbythedifferentpartiesonseparate counterpartsandeachsuch counterpartshallbedeemed tobe anoriginal,butallsuchcounterpartsshalltogetherconstitutebutoneandthesame agreement.
(c) ThisAgreementshallbe acontractmade underandgovernedbythelawsoftheStateofCalifornia.
(d) AllobligationsoftheCompanyand rightsofthe Holderexpressedhereinshallbeinadditiontoandnotinlimitationofthoseprovided by applicablelaw.
(e) ThisAgreement shallbebindingupontheCompany,theHolderandtheirrespective successorsand assigns,andshallinuretothebenefitoftheCompany,theHolderandtheir respectivesuccessorsandassigns.
(f) Allamendmentsormodificationsofthis Agreementandallconsents, waiversandnoticesdelivered hereunderorinconnectionherewithshallbeinwriting.
7. WAIVER OFJURY TRIAL.THECOMPANYANDTHEHOLDERHEREBYIRREVOCABLY WAIVESALLRIGHTTOATRIALBYJURY INANYACTION,PROCEEDINGORCOUNTERCLAIMARISINGOUTOF ORRELATINGTOTHISAGREEMENTORTHETRANSACTIONSCONTEMPLATEDHEREBY.
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INWITNESSWHEREOF,theparties heretohavecausedthisAgreementtobeexecuted bytheirduly authorizedrepresentatives asofthefirstdatewrittenabove.
| “Company”:IDSIndustries,Inc. |
| /s/ Scott Planiga |
| ScottPlantingaPresident/CEO |
| “Holder”: ArgentOffset, LLC |
| /s/ Rick Narveson |
| RickNarveson,ManagingMember |
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