EXHIBIT 10.1

SECURITIES PURCHASE AGREEMENT

THIS SECURITIES PURCHASE AGREEMENT (this “Agreement”), dated as of August 13,
2014, is entered into by and between UNITED CANNABIS CORPORATION, a Colorado
corporation (“Company”), and TYPENEX CO-INVESTMENT, LLC, a Utah limited
liability company, its successors and/or assigns (“Investor”).

A.

Company and Investor are executing and delivering this Agreement in reliance
upon the exemption from securities registration afforded by the rules and
regulations promulgated by the United States Securities and Exchange Commission
(the “SEC”) under the Securities Act of 1933, as amended (the “1933 Act”).

B.

Investor desires to purchase and Company desires to issue and sell, upon the
terms and conditions set forth in this Agreement (i) a Secured Convertible
Promissory Note, in the form attached hereto as Exhibit A, in the original
principal amount of $1,657,500.00 (the “Note”), convertible into shares of
common stock, $0.001 par value per share, of Company (the “Common Stock”), upon
the terms and subject to the limitations and conditions set forth in such Note,
and (ii) six (6) Warrants to Purchase Common Stock, each in the form attached
hereto as Exhibit B (each, a “Warrant”, and collectively, the “Warrants”).

C.

This Agreement, the Note, the Warrants, the Security Agreement (as defined
below), the Investor Notes (as defined below), and all other certificates,
documents, agreements, resolutions and instruments delivered to any party under
or in connection with this Agreement, as the same may be amended from time to
time, are collectively referred to herein as the “Transaction Documents”.

D.

For purposes of this Agreement: “Conversion Shares” means all shares of Common
Stock issuable upon conversion of all or any portion of the Note; “Warrant
Shares” means all shares of Common Stock issuable upon the exercise of or
pursuant to the Warrants; and “Securities” means the Note, the Conversion
Shares, the Warrants and the Warrant Shares.

NOW, THEREFORE, Company and Investor hereby agree as follows:

1.

Purchase and Sale of Securities.

1.1.

Purchase of Securities. Company shall issue and sell to Investor and Investor
agrees to purchase from Company the Note and the Warrants. In consideration
thereof, Investor shall pay (i) the amount designated as the initial cash
purchase price on Investor’s signature page to this Agreement (the “Initial Cash
Purchase Price”), and (ii) issue to Company the Investor Notes (the sum of the
initial principal amount of the Investor Notes, together with the Initial Cash
Purchase Price, the “Purchase Price”). The Purchase Price and the OID (as
defined herein) are allocated to the Tranches (as defined in the Note) of the
Note and to the Warrants as set forth in the table attached hereto as Exhibit C.

1.2.

Form of Payment. On the Closing Date, (i) Investor shall pay the Purchase Price
to Company by delivering the following at the Closing: (A) the Initial Cash
Purchase Price, which shall be delivered by wire transfer of immediately
available funds to Company, in accordance with Company’s written wiring
instructions; (B) Investor Note #1 in the principal amount of $250,000.00 duly
executed and substantially in the form attached hereto as Exhibit D (“Investor
Note #1”); (C) Investor Note #2 in the principal amount of $250,000.00 duly
executed and substantially in the form attached hereto as Exhibit D (“Investor
Note #2”); (D) Investor Note #3 in the principal amount of $250,000.00 duly
executed and substantially in the form attached hereto as Exhibit D (“Investor
Note #3”); (E) Investor Note #4 in the principal amount of $250,000.00 duly
executed and substantially in the form attached hereto as Exhibit D (“Investor
Note #4”); and (F) Investor Note #5 in the principal amount of $250,000.00 duly
executed and substantially in the form attached hereto as Exhibit D “Investor
Note #5”, and together with Investor Note #1, Investor Note #2, Investor Note #3
and Investor Note #4, the “Investor Notes”); and (ii) Company shall deliver the
duly executed Note and Warrants on behalf of Company, to Investor, against
delivery of such Purchase Price.

1.3.

Closing Date. Subject to the satisfaction (or written waiver) of the conditions
set forth in Section 5 and Section 6 below, the date and time of the issuance
and sale of the Securities pursuant to this Agreement (the “Closing Date”) shall
be 5:00 p.m., Eastern Time on or about August 13, 2014, or such other mutually
agreed upon time. The closing of the transactions contemplated by this Agreement
(the “Closing”) shall occur on the Closing Date at the offices of Investor
unless otherwise agreed upon by the parties.

1.4.

Collateral for the Note. The Note shall be secured by the collateral set forth
in that certain Security Agreement attached hereto as Exhibit E listing all of
the Investor Notes as security for Company’s obligations under the Transaction
Documents (the “Security Agreement”).

1.5.

Collateral for Investor Notes. Initially, none of the Investor Notes will be
secured, but all or any of the Investor Notes may become secured subsequent to
the Closing by such collateral and at such time as determined by Investor in its
sole discretion. In the event Investor desires to secure any of the Investor
Notes, Company shall timely execute any and all amendments and documents and
take such other measures requested by Investor that are necessary or advisable
in order to properly secure the applicable Investor Notes.

1.6.

Original Issue Discount; Transaction Expenses. The Note carries an original
issue discount of $150,000.00 (the “OID”). In addition, Company agrees to pay
$7,500.00 to Investor to cover Investor’s legal fees, accounting costs, due
diligence, monitoring and other transaction costs incurred in connection with
the purchase and sale of the Securities (the “Transaction Expense Amount”), all
of which amount is included in the initial principal balance of this Note. The
Purchase Price, therefore, shall be $1,500,000.00, computed as follows:
$1,657,500.00 original principal balance, less the OID, less the Transaction
Expense Amount. The Initial Cash Purchase Price shall be the Purchase Price less
the sum of the initial principal amounts of the Investor Notes. The OID and the
Transaction Expense Amount allocated to the Initial Cash Purchase Price are set
forth on Exhibit C.

2.

Investor’s Representations and Warranties. Investor represents and warrants to
Company that: (i) this Agreement has been duly and validly authorized; (ii) this
Agreement constitutes a valid and binding agreement of Investor enforceable in
accordance with its terms; (iii) Investor is an “accredited investor” as that
term is defined in Rule 501(a) of Regulation D of the 1933 Act, and (iv) this
Agreement and the Investor Notes have been duly executed and delivered on behalf
of Investor.

3.

Representations and Warranties of Company. Company represents and warrants to
Investor that: (i) Company is a corporation duly organized, validly existing and
in good standing under the laws of its state of incorporation and has the
requisite corporate power to own its properties and to carry on its business as
now being conducted; (ii) Company is duly qualified as a foreign corporation to
do business and is in good standing in each jurisdiction where the nature of the
business conducted or property owned by it makes such qualification necessary;
(iii) Company has registered its Common Stock under Section 12(g) of the
Securities Exchange Act of 1934, as amended (the “1934 Act”), and is obligated
to file reports pursuant to Section 13 or Section 15(d) of the 1934 Act; (iv)
each of the Transaction Documents and the transactions contemplated hereby and
thereby, have been duly and validly authorized by Company; (v) this Agreement,
the Note, the Security Agreement, the Warrants, and the other Transaction
Documents have been duly executed and delivered by Company and constitute the
valid and binding obligations of Company enforceable in accordance with their
terms, subject as to enforceability only to general principles of equity and to
bankruptcy, insolvency, moratorium, and other similar laws affecting the
enforcement of creditors’ rights generally; (vi) the execution and delivery of
the Transaction Documents by Company, the issuance of Securities in accordance
with the terms hereof, and the consummation by Company of the other transactions
contemplated by the Transaction Documents do not and will not conflict with or
result in a breach by Company of any of the terms or provisions of, or
constitute a default under (a) Company’s formation documents or bylaws, each as
currently in effect, (b) any indenture, mortgage, deed of trust, or other
material agreement or instrument to which Company is a party or by which it or
any of its properties or assets are bound, including any listing agreement for
the Common Stock, or (c) to Company’s knowledge, any existing applicable law,
rule, or regulation or any applicable decree, judgment, or order of any court,
United States federal or state regulatory body, administrative agency, or other
governmental body having jurisdiction over Company or any of Company’s
properties or assets; (vii) no further authorization, approval or consent of any
court, governmental body, regulatory agency, self-regulatory organization, or
stock exchange or market or the stockholders or any lender of Company is
required to be obtained by Company for the issuance of the Securities to
Investor; (viii) none of Company’s filings with the SEC contained, at the time
they were filed, any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements
made therein, in light of the circumstances under which they were made, not
misleading; (ix) Company has filed all reports, schedules, forms, statements and
other documents required to be filed by Company with the SEC under the 1934 Act
on a timely basis or has received a valid extension of such time of filing and
has filed any such report, schedule, form, statement or other document prior to
the expiration of any such extension; (x) Company is not, nor has it ever been,
a “Shell Company,” as such type of “issuer” is described in Rule 144(i)(1) under
the 1933 Act; (xi) Company has taken no action which would give rise to any
claim by any person or entity for a brokerage commission, placement agent or
finder’s fees or similar payments by Investor relating to the Note or the
transactions contemplated hereby; (xii) except for such fees arising as a result
of any agreement or arrangement entered into by Investor without the knowledge
of Company (an “Investor’s Fee”), Investor shall have no obligation with respect
to such fees or with respect to any claims made by or on behalf of other persons
for fees of a type contemplated in this subsection that may be due in connection
with the transactions contemplated hereby and Company shall indemnify and hold
harmless each of Investor, Investor’s employees, officers, directors,
stockholders, managers, agents, and partners, and their respective affiliates,
from and against all claims, losses, damages, costs (including the costs of
preparation and attorneys’ fees) and expenses suffered in respect of any such
claimed or existing fees (other than an Investor’s Fee, if any), and (xiii) when
issued, each of the Securities (including, without limitation, the Conversion
Shares and the Warrant Shares), will be validly issued, fully paid for and
non-assessable, free and clear of all liens, claims, charges and encumbrances.

4.

Company Covenants. Until all of Company’s obligations hereunder are paid and
performed in full, or within the timeframes otherwise specifically set forth
below, Company shall comply with the following covenants: (i) from the date
hereof until the date that is six (6) months after all the Conversion Shares and
the Warrant Shares either have been sold by Investor, or may permanently be sold
by Investor without any restrictions pursuant to Rule 144, Company shall timely
make all filings required to be made by it under the 1933 Act, the 1934 Act,
Rule 144 or any United States securities laws and regulations thereof applicable
to Company or by the rules and regulations of its principal trading market, and
such filings shall conform to the requirements of applicable laws, regulations
and government agencies, and, unless such filings are publicly available on the
SEC’s EDGAR system (via the SEC’s web site at no additional charge), Company
shall provide a copy thereof to Investor promptly after such filings; (ii) so
long as Investor beneficially owns any of the Securities and for at least twenty
(20) Trading Days thereafter, Company shall file all reports required to be
filed with the SEC pursuant to Sections 13 or 15(d) of the 1934 Act, and shall
take all reasonable action under its control to ensure that adequate current
public information with respect to Company, as required in accordance with Rule
144, is publicly available, and shall not terminate its status as an issuer
required to file reports under the 1934 Act even if the 1934 Act or the rules
and regulations thereunder would permit such termination; (iii) the Common Stock
shall be listed or quoted for trading on any of (a) the NYSE Amex, (b) the New
York Stock Exchange, (c) the Nasdaq Global Market, (d) the Nasdaq Capital
Market, (e) the OTC Bulletin Board, (f) the OTCQX, or (g) the OTCQB; (iv) when
issued, each of the Securities (including, without limitation, the Conversion
Shares and the Warrant Shares), will be validly issued, fully paid for and
non-assessable, free and clear of all liens, claims, charges and encumbrances,
(v) Company shall use the net proceeds received hereunder for working capital
and general corporate purposes only; provided, however, Company will not use
such proceeds to pay fees payable (A) to any broker or finder relating to the
offer and sale of the Securities unless such broker, finder, or other party is a
registered investment adviser or registered broker-dealer and such fees are paid
in full compliance with all applicable laws and regulations, or (B) to any other
party relating to any financing transaction effected prior to the date hereof;
and (vi) from and after the date hereof and until all of Company’s obligations
hereunder and the Note are paid and performed in full, Company shall not
transfer, assign, sell, pledge, hypothecate or otherwise alienate or encumber
the Investor Notes in any way without the prior written consent of Investor.

5.

Conditions to Company’s Obligation to Sell. The obligation of Company hereunder
to issue and sell the Securities to Investor at the Closing is subject to the
satisfaction, at or before the Closing Date, of each of the following
conditions:

5.1.

Investor shall have executed this Agreement and the Investor Notes and delivered
the same to Company.

5.2.

Investor shall have delivered the Initial Cash Purchase Price in accordance with
Section 1.2 above.

6.

Conditions to Investor’s Obligation to Purchase. The obligation of Investor
hereunder to purchase the Securities at the Closing is subject to the
satisfaction, at or before the Closing Date, of each of the following
conditions, provided that these conditions are for Investor’s sole benefit and
may be waived by Investor at any time in its sole discretion:

6.1.

Company shall have executed this Agreement and delivered the same to Investor.

6.2.

Company shall have delivered to Investor the duly executed Note and Warrants in
accordance with Section 1.2 above.

6.3.

The Irrevocable Letter of Instructions to Transfer Agent shall have been
delivered to and acknowledged in writing by Company’s transfer agent (the
“Transfer Agent”) substantially in the form attached hereto as Exhibit F.

6.4.

Company shall have delivered to Investor a fully executed Secretary’s
Certificate evidencing Company’s approval of the Transaction Documents
substantially in the form attached hereto as Exhibit G.

6.5.

Company shall have delivered to Investor a fully executed Share Issuance
resolution to be delivered to the Transfer Agent substantially in the form
attached hereto as Exhibit H.

6.6.

Company shall have delivered to Investor fully executed copies of the Security
Agreement and all other Transaction Documents required to be executed by Company
herein or therein.

7.

Reservation of Shares. At all times during which the Note is convertible or the
Warrants are exercisable, Company will reserve from its authorized and unissued
Common Stock to provide for the issuance of Common Stock upon the full
conversion of the Note and full exercise of the Warrants. Company will at all
times reserve at least (i) three times the higher of (1) the Outstanding Balance
(as defined in and determined pursuant to the Note) divided by the Lender
Conversion Price (as defined in and determined pursuant to the Note), and (2)
the Outstanding Balance divided by the Market Price (as defined in and
determined pursuant to the Note), plus (ii) three times the number of Warrant
Shares (as determined pursuant to the Warrants) deliverable upon full exercise
of the Warrants (the “Share Reserve”), but in any event not less than 600,000
shares of Common Stock shall be reserved at all times for such purpose (the
“Transfer Agent Reserve”). Company further agrees that it will cause the
Transfer Agent to immediately add shares of Common Stock to the Transfer Agent
Reserve in increments of 50,000 shares as and when requested by Investor in
writing from time to time, provided that such incremental increases do not cause
the Transfer Agent Reserve to exceed the Share Reserve. In furtherance thereof,
from and after the date hereof and until such time that the Note has been paid
in full and the Warrants exercised in full, Company shall require the Transfer
Agent to reserve for the purpose of issuance of Conversion Shares under the Note
and Warrant Shares under the Warrants, a number of shares of Common Stock equal
to the Transfer Agent Reserve. Company shall further require the Transfer Agent
to hold such shares of Common Stock exclusively for the benefit of Investor and
to issue such shares to Investor promptly upon Investor’s delivery of a
conversion notice under the Note or a Notice of Exercise under any Warrant.
Finally, Company shall require the Transfer Agent to issue shares of Common
Stock pursuant to the Note and the Warrant to Investor out of its authorized and
unissued shares, and not the Transfer Agent Reserve, to the extent shares of
Common Stock have been authorized, but not issued, and are not included in the
Transfer Agent Reserve. The Transfer Agent shall only issue shares out of the
Transfer Agent Reserve to the extent there are no other authorized shares
available for issuance and then only with Investor’s written consent.

8.

Miscellaneous. The provisions set forth in this Section 8 shall apply to this
Agreement, as well as all other Transaction Documents as if these terms were
fully set forth therein.

8.1.

Original Signature Pages. Each party agrees to deliver its original signature
pages to the Transaction Documents to the other party within five (5) Trading
Days of the date hereof. Notwithstanding the foregoing, the Transaction
Documents shall be fully effective upon exchange of electronic signature pages
by the parties and payment of the Initial Cash Purchase Price by Investor. For
the avoidance of doubt, the failure by either party to deliver its original
signature pages to the other party shall not affect in any way the validity or
effectiveness of any of the Transaction Documents, provided that such failure to
deliver original signatures shall be a breach of the party’s obligations
hereunder.

8.2.

Cross Default. Any Event of Default (as defined in the Note) by Company under
the Note shall be deemed a default under this Agreement, and any default by
Company under this Agreement will be deemed an Event of Default under the Note.

8.3.

Governing Law; Venue. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Utah for contracts to be wholly
performed in such state and without giving effect to the principles thereof
regarding the conflict of laws. Each party consents to and expressly agrees that
venue for Arbitration (as defined in Exhibit I) of any dispute arising out of or
relating to any Transaction Document or the relationship of the parties or their
affiliates shall be in Salt Lake County or Utah County, Utah; provided, however,
that notwithstanding anything herein to the contrary, enforcement of Investor’s
rights under the Security Agreement will occur in accordance with the Uniform
Commercial Code of the applicable state(s) under the Security Agreement  and
enforcement of Company’s rights over the Collateral will occur in accordance
with the laws of the state in which the Collateral is located). Without
modifying the parties obligations to resolve disputes hereunder pursuant to the
Arbitration Provisions (as defined below), for any litigation arising in
connection with any of the Transaction Documents, each party hereto hereby (a)
consents to and expressly submits to the exclusive personal jurisdiction of any
state or federal court sitting in Salt Lake County, Utah, (b) expressly submits
to the venue of any such court for the purposes hereof, and (c) waives any claim
of improper venue and any claim or objection that such courts are an
inconvenient forum or any other claim or objection to the bringing of any such
proceeding in such jurisdictions or to any claim that such venue of the suit,
action or proceeding is improper.

8.4.

Arbitration of Claims. The parties shall submit all Claims (as defined in
Exhibit I) arising under this Agreement or any other Transaction Document or
other agreements between the parties and their affiliates to binding arbitration
pursuant to the arbitration provisions set forth in Exhibit I attached hereto
(the “Arbitration Provisions”). The parties hereby acknowledge and agree that
the Arbitration Provisions are unconditionally binding on the parties hereto and
are severable from all other provisions of this Agreement. Any capitalized term
not defined in the Arbitration Provisions shall have the meaning set forth in
this Agreement. By executing this Agreement, Company represents, warrants and
covenants that Company has reviewed the Arbitration Provisions carefully,
consulted with legal counsel about such provisions (or waived its right to do
so), understands that the Arbitration Provisions are intended to allow for the
expeditious and efficient resolution of any dispute hereunder, agrees to the
terms and limitations set forth in the Arbitration Provisions, and that Company
will not take a position contrary to the foregoing representations. Company
acknowledges and agrees that Investor may rely upon the foregoing
representations and covenants of Company regarding the Arbitration Provisions.

8.5.

Counterparts. Each Transaction Document may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one instrument. The parties hereto confirm that any
electronic copy of another party’s executed counterpart of a Transaction
Document (or such party’s signature page thereof) will be deemed to be an
executed original thereof.

8.6.

Headings. The headings of this Agreement are for convenience of reference only
and shall not form part of, or affect the interpretation of, this Agreement.

8.7.

Severability. In the event that any provision of this Agreement is invalid or
unenforceable under any applicable statute or rule of law, then such provision
shall be deemed inoperative to the extent that it may conflict therewith and
shall be deemed modified to conform to such statute or rule of law. Any
provision hereof which may prove invalid or unenforceable under any law shall
not affect the validity or enforceability of any other provision hereof.

8.8.

Entire Agreement; Amendments. This Agreement and the instruments and exhibits
referenced herein contain the entire understanding of the parties with respect
to the matters covered herein and therein and, except as specifically set forth
herein or therein, neither Company nor Investor makes any representation,
warranty, covenant or undertaking with respect to such matters. No provision of
this Agreement may be waived or amended other than by an instrument in writing
signed by the parties hereto.

8.9.

Notices. Any notice required or permitted hereunder shall be given in writing
(unless otherwise specified herein) and shall be deemed effectively given on the
earliest of: (a) the date delivered, if delivered by personal delivery as
against written receipt therefor or by email to an executive officer, or by
facsimile (with successful transmission confirmation), (b) the earlier of the
date delivered or the third Trading Day after deposit, postage prepaid, in the
United States Postal Service by certified mail, or (c) the earlier of the date
delivered or the third Trading Day after mailing by express courier, with
delivery costs and fees prepaid, in each case, addressed to each of the other
parties thereunto entitled at the following addresses (or at such other
addresses as such party may designate by five (5) calendar days’ advance written
notice similarly given to each of the other parties hereto):

If to Company:

United Cannabis Corporation

Attn: Paul Enright

Suite 200-883, 9249 South Broadway

Highlands Ranch, Colorado 80129

If to Investor:

Typenex Co-Investment, LLC

Attn: John Fife

303 East Wacker Drive, Suite 1200

Chicago, Illinois 60601

With a copy to (which copy shall not constitute notice):

Hansen Black Anderson Ashcraft PLLC

Attn: Jonathan K. Hansen

2940 West Maple Loop, Suite 103

Lehi, Utah 84043

8.10.

Successors and Assigns. This Agreement or any of the severable rights and
obligations inuring to the benefit of or to be performed by Investor hereunder
may be assigned by Investor to a third party, including its financing sources,
in whole or in part, without the need to obtain Company’s consent thereto.
Company may not assign its rights or obligations under this Agreement or
delegate its duties hereunder without the prior written consent of Investor.

8.11.

Survival. The representations and warranties of Company and the agreements and
covenants set forth in this Agreement shall survive the Closing hereunder
notwithstanding any due diligence investigation conducted by or on behalf of
Investor. Company agrees to indemnify and hold harmless Investor and all its
officers, directors, employees, attorneys, and agents for loss or damage arising
as a result of or related to any breach or alleged breach by Company of any of
its representations, warranties and covenants set forth in this Agreement or any
of its covenants and obligations under this Agreement, including advancement of
expenses as they are incurred.

8.12.

Publicity. Company and Investor shall have the right to review a reasonable
period of time before issuance of any press releases by the other party with
respect to the transactions contemplated hereby.

8.13.

Further Assurances. Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as the other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.

8.14.

Investor’s Rights and Remedies Cumulative; Liquidated Damages. All rights,
remedies, and powers conferred in this Agreement and the Transaction Documents
are cumulative and not exclusive of any other rights or remedies, and shall be
in addition to every other right, power, and remedy that Investor may have,
whether specifically granted in this Agreement or any other Transaction
Document, or existing at law, in equity, or by statute, and any and all such
rights and remedies may be exercised from time to time and as often and in such
order as Investor may deem expedient. The parties acknowledge and agree that
upon Company’s failure to comply with the provisions of the Transaction
Documents, Investor’s damages would be uncertain and difficult (if not
impossible) to accurately estimate because of the parties’ inability to predict
future interest rates and future share prices, Investor’s increased risk, and
the uncertainty of the availability of a suitable substitute investment
opportunity for Investor, among other reasons. Accordingly, any fees, charges,
and default interest due under the Note, the Warrant, and the other Transaction
Documents are intended by the parties to be, and shall be deemed, liquidated
damages (under Company’s and Investor’s expectations that any such liquidated
damages will tack back to the Closing Date for purposes of determining the
holding period under Rule 144). The parties agree that such liquidated damages
are a reasonable estimate of Investor’s actual damages and not a penalty, and
shall not be deemed in any way to limit any other right or remedy Investor may
have hereunder, at law or in equity. The parties acknowledge and agree that
under the circumstances existing at the time this Agreement is entered into,
such liquidated damages are fair and reasonable and are not penalties. All fees,
charges, and default interest provided for in the Transaction Documents are
agreed to by the parties to be based upon the obligations and the risks assumed
by the parties as of the Closing Date and are consistent with investments of
this type. The liquidated damages provisions of the Transaction Documents shall
not limit or preclude a party from pursuing any other remedy available at law or
in equity; provided, however, that the liquidated damages provided for in the
Transaction Documents are intended to be in lieu of actual damages.

8.15.

Ownership Limitation. Notwithstanding anything to the contrary contained in this
Agreement or the other Transaction Documents, if at any time Investor shall or
would be issued shares of Common Stock under any of the Transaction Documents,
but such issuance would cause Investor (together with its affiliates) to
beneficially own a number of shares exceeding the Maximum Percentage (as defined
in the Note), then Company must not issue to Investor the shares that would
cause Investor to exceed the Maximum Percentage. The shares of Common Stock
issuable to Investor that would cause the Maximum Percentage to be exceeded are
referred to herein as the “Ownership Limitation Shares”. Company will reserve
the Ownership Limitation Shares for the exclusive benefit of Investor. From time
to time, Investor may notify Company in writing of the number of the Ownership
Limitation Shares that may be issued to Investor without causing Investor to
exceed the Maximum Percentage. Upon receipt of such notice, Company shall be
unconditionally obligated to immediately issue such designated shares to
Investor, with a corresponding reduction in the number of the Ownership
Limitation Shares. For purposes of this Section, beneficial ownership of Common
Stock will be determined under Section 13(d) of the 1934 Act.

8.16.

Attorneys’ Fees and Cost of Collection. In the event of any arbitration or
action at law or in equity to enforce or interpret the terms of this Agreement
or any of the other Transaction Documents, the parties agree that the party who
is awarded the most money shall be deemed the prevailing party for all purposes
and shall therefore be entitled to an additional award of the full amount of the
attorneys’ fees, deposition costs, and expenses paid by such prevailing party in
connection with arbitration or litigation without reduction or apportionment
based upon the individual claims or defenses giving rise to the fees and
expenses. Nothing herein shall restrict or impair an arbitrator’s or a court’s
power to award fees and expenses for frivolous or bad faith pleading. If (a) the
Note or any Warrant is placed in the hands of an attorney for collection or
enforcement prior to commencing arbitration or legal proceedings, or is
collected or enforced through any arbitration or legal proceeding, or Investor
otherwise takes action to collect amounts due under the Note or to enforce the
provisions of the Note or any  Warrant; or (b) there occurs any bankruptcy,
reorganization, receivership of Company or other proceedings affecting Company’s
creditors’ rights and involving a claim under the Note or any  Warrant; then
Company shall pay the costs incurred by Investor for such collection,
enforcement or action or in connection with such bankruptcy, reorganization,
receivership or other proceeding, including, without limitation, attorneys’
fees, expenses, deposition costs, and disbursements.

8.17.

Waiver. No waiver of any provision of this Agreement shall be effective unless
it is in the form of a writing signed by the party granting the waiver. No
waiver of any provision or consent to any prohibited action shall constitute a
waiver of any other provision or consent to any other prohibited action, whether
or not similar. No waiver or consent shall constitute a continuing waiver or
consent or commit a party to provide a waiver or consent in the future except to
the extent specifically set forth in writing.

8.18.

Waiver of Jury Trial. EACH PARTY TO THIS AGREEMENT IRREVOCABLY WAIVES ANY AND
ALL RIGHTS SUCH PARTY MAY HAVE TO DEMAND THAT ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT OR THE
RELATIONSHIPS OF THE PARTIES HERETO BE TRIED BY JURY. THIS WAIVER EXTENDS TO ANY
AND ALL RIGHTS TO DEMAND A TRIAL BY JURY ARISING UNDER COMMON LAW OR ANY
APPLICABLE STATUTE, LAW, RULE OR REGULATION. FURTHER, EACH PARTY HERETO
ACKNOWLEDGES THAT SUCH PARTY IS KNOWINGLY AND VOLUNTARILY WAIVING SUCH PARTY’S
RIGHT TO DEMAND TRIAL BY JURY.

8.19.

Time of the Essence. Time is expressly made of the essence with respect to each
and every provision of this Agreement and the other Transaction Documents.

 

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IN WITNESS WHEREOF, the undersigned Investor and Company have caused this
Agreement to be duly executed as of the date first above written.

SUBSCRIPTION AMOUNT:

Principal Amount of Note:

$1,657,500.00

Initial Cash Purchase Price:

$250,000.00

INVESTOR:

TYPENEX CO-INVESTMENT, LLC

By: Red Cliffs Investments, Inc., its Manager

By:

/s/ John M. Fife                                       

John M. Fife, President

COMPANY:

UNITED CANNABIS CORPORATION

By:

/s/ Chadwick Ruby                                          

Printed Name:  Chadwick Ruby

Title: COO

ATTACHED EXHIBITS:

Exhibit A

Note

Exhibit B

Form of Warrants

Exhibit C

Allocation of Purchase Price

Exhibit D

Form of Investor Note

Exhibit E

Security Agreement

Exhibit F

Irrevocable Transfer Agent Instructions

Exhibit G

Secretary’s Certificate

Exhibit H

Share Issuance Resolution

Exhibit I

Arbitration Provisions

--------------------------------------------------------------------------------

EXHIBIT I

ARBITRATION PROVISIONS

1.

Dispute Resolution. For purposes of this Exhibit I, the term “Claims” means any
disputes, claims, demands, causes of action, liabilities, damages, losses, or
controversies whatsoever arising from related to or connected with the
transactions contemplated in the Transaction Documents and any communications
between the parties related thereto, including without limitation any claims of
mutual mistake, mistake, fraud, misrepresentation, failure of formation, failure
of consideration, promissory estoppel, unconscionability, failure of condition
precedent, rescission, and any statutory claims, tort claims, contract claims,
or claims to void, invalidate or terminate the Agreement or any of the other
Transaction Documents. The term “Claims” specifically excludes enforcement of
Investor’s rights and remedies against the personal property described in the
Security Agreement under the applicable provisions of the Uniform Commercial
Code. The parties hereby agree that the arbitration provisions set forth in this
Exhibit I (“Arbitration Provisions”) are binding on the parties hereto and are
severable from all other provisions in the Transaction Documents. As a result,
any attempt to rescind the Agreement or declare the Agreement or any other
Transaction Document invalid or unenforceable for any reason is subject to these
Arbitration Provisions. These Arbitration Provisions shall also survive any
termination or expiration of the Agreement.

2.

Arbitration. Except as otherwise provided herein, all Claims must be submitted
to arbitration (“Arbitration”) to be conducted in Salt Lake County, Utah or Utah
County, Utah and pursuant to the terms set forth in these Arbitration
Provisions. The parties agree that the award of the Arbitration Panel (as
defined below) shall be final and binding upon the parties; shall be the sole
and exclusive remedy between them regarding any Claims, counterclaims, issues,
or accountings presented or pleaded to the Arbitration Panel; and shall promptly
be payable in United States dollars free of any tax, deduction or offset (with
respect to monetary awards). Any costs or fees, including without limitation
attorneys’ fees, incident to enforcing the Arbitration Panel’s award shall, to
the maximum extent permitted by law, be charged against the party resisting such
enforcement. The award shall include Default Interest (as defined in the Note)
both before and after the award. Judgment upon the award of the Arbitration
Panel will be entered and enforced by a state court sitting in Salt Lake County,
Utah. The parties hereby incorporate herein the provisions and procedures set
forth in the Utah Uniform Arbitration Act, U.C.A. § 78B-11-101 et seq. (as
amended or superseded from time to time, the “Arbitration Act”). Pursuant to
Section 78B-11-105 of the Arbitration Act, in the event of conflict between the
terms of these Arbitration Provisions and the provisions of the Arbitration Act,
the terms of these Arbitration Provisions shall control.

3.

Arbitration Proceedings. Arbitration between the parties will be subject to the
following procedures:

3.1

Pursuant to Section 110 of the Arbitration Act, the parties agree that a party
may initiate Arbitration by giving written notice to the other party
(“Arbitration Notice”) in the same manner that notice is permitted under Section
8.9 of the Agreement; provided, however, that the Arbitration Notice may not be
given by email or fax. Arbitration will be deemed initiated as of the date that
the Arbitration Notice is deemed delivered under Section 8.9 of the Agreement
(the “Service Date”). After the Service Date, information may be delivered, and
notices may be given, by email or fax pursuant to Section 8.9 of the Agreement
or any other method permitted thereunder. The Arbitration Notice must describe
the nature of the controversy, the remedies sought, and the election to commence
Arbitration proceedings. All Claims in the Arbitration Notice must be pleaded
consistent with the Utah Rules of Civil Procedure.

3.2

The final Arbitration hearing will be heard by a three (3) person arbitration
panel (“Arbitration Panel”). Within ten (10) calendar days after the Service
Date, Investor shall select and submit to Company the names of five (5)
arbitrators that are designated as “neutrals” or qualified arbitrators by Utah
ADR Services (http://www.utahadrservices.com) (such five designated persons
hereunder are referred to herein as the “Proposed Arbitrators”). For the
avoidance of doubt, each Proposed Arbitrator must be qualified as a “neutral”
with Utah ADR Services. Within ten (10) calendar days after Investor has
submitted to Company the names of the Proposed Arbitrators, Company must select,
by written notice to Investor, three (3) of the Proposed Arbitrators to act as
the members of the Arbitration Panel. If Company fails to select three of the
Proposed Arbitrators in writing within such 10-day period, then Investor may
select such three arbitrators from the Proposed Arbitrators by providing written
notice of such selection to Company. If Investor fails to identify the Proposed
Arbitrators within the time period required above, then Company may at any time
prior to Investor designating the Proposed Arbitrators, select the names of the
five (5) Proposed Arbitrators. Investor may then, within ten (10) calendar days
after Company has submitted notice of its Proposed Arbitrators to Investor,
select, by written notice to Company, three (3) of the Proposed Arbitrators to
serve on the Arbitration Panel. If Investor fails to select in writing and
within such 10-day period the three members of the Arbitration Panel, then
Company may select such three members of the Arbitration Panel by providing
written notice of such selection to Investor. After the three members of the
Arbitration Panel are selected, Investor shall designate in writing to Company
the name of one of such three arbitrators to serve as the lead arbitrator (the
“Lead Arbitrator”). Subject to Paragraph 3.12 below, the cost of the arbitrators
must be paid equally by both parties; provided, however, that if one party
refuses or fails to pay its portion of the arbitrators’ fees, then the other
party can advance such unpaid amounts (subject to the accrual of Default
Interest thereupon), with such amount added to or subtracted from, as
applicable, the award granted by the Arbitration Panel. If Utah ADR Services
ceases to exist or to provide a list of neutrals, then the arbitrators shall be
selected under the then prevailing rules of the American Arbitration
Association. The date that all three selected arbitrators agree in writing to
serve as the arbitrators hereunder is referred to herein as the “Arbitration
Commencement Date”.

3.3

An answer and any counterclaims to the Arbitration Notice, which must be pleaded
consistent with the Utah Rules of Civil Procedure, shall be required to be
delivered to the other party within twenty (20) calendar days after the Service
Date. Upon request, the Arbitration Panel is hereby instructed to render a
default award, consistent with the relief requested in the Arbitration Notice,
against a party that fails to submit an answer within such time period.

3.4

The party that delivers the Arbitration Notice to the other party shall have the
option to also commence legal proceedings with any state court sitting in Salt
Lake County, Utah (“Litigation Proceedings”), subject to the following: (i) the
complaint in the Litigation Proceedings is to be substantially similar to the
claims set forth in the Arbitration Notice, provided that an additional cause of
action to compel arbitration will also be included therein, (ii) so long as the
other party files an answer to the complaint in the Litigation Proceedings and
an answer to the Arbitration Notice, the Litigation Proceedings will be stayed
pending an award of the Arbitration Panel hereunder, (iii) if the other party
fails to file an answer in the Litigation Proceedings or an answer in the
Arbitration Proceedings, then the party initiating Arbitration shall be entitled
to a default judgment consistent with the relief requested, to be entered in the
Litigation Proceedings, and (iv) any legal or procedural issue arising under the
Arbitration Act that requires a decision of a court of competent jurisdiction
may be determined in the Litigation Proceedings. Any award of the Arbitration
Panel may be entered in such Litigation Proceedings pursuant to the Arbitration
Act.

3.5

Pursuant to Section 118(8) of the Arbitration Act, the parties agree that
discovery shall be conducted in accordance with the Utah Rules of Civil
Procedure; provided, however, that incorporation of such rules will in no event
supersede the Arbitration Provisions set forth herein, including without
limitation the time limitation set forth in Paragraph 3.9 below, and the
following:

(a)

The Lead Arbitrator will be responsible for determining all issues regarding
discovery.

(b)

Discovery will only be allowed if the likely benefits of the proposed discovery
outweigh the burden or expense, and the discovery sought is likely to reveal
information that will satisfy a specific element of a claim or defense already
pleaded in the Arbitration. The party seeking discovery shall always have the
burden of showing that all of the standards and limitations set forth in these
Arbitration Provisions are satisfied. The scope of discovery in the Arbitration
proceedings shall also be limited as follows:

(i)

To facts directly connected with the transactions contemplated by the Agreement.

(ii)

To facts and information that cannot be obtained from another source that is
more convenient, less burdensome or less expensive.

(c)

No party shall be allowed (a) more than fifteen (15) interrogatories (including
discrete subparts), (b) more than fifteen (15) requests for admission (including
discrete subparts), (c) more than ten (10) document requests (including discrete
subparts), or (d) more than three depositions (excluding expert depositions) for
a maximum of seven (7) hours per deposition.

3.6

Any party submitting any written discovery requests, including interrogatories,
requests for production, subpoenas to a party or a third party, or requests for
admissions, must prepay the estimated attorneys’ fees and costs, as determined
by the Lead Arbitrator, before the responding party has any obligation to
produce or respond.

(a)

All discovery requests must be submitted in writing to the Lead Arbitrator and
the other party before issuing or serving such discovery requests. The party
issuing the written discovery requests must include with such discovery requests
a detailed explanation of how the proposed discovery requests satisfy the
requirements of these Arbitration Provisions and the Utah Rules of Civil
Procedure. Any party will then be allowed, within ten (10) calendar days of
receiving the proposed discovery requests, to submit to the Lead Arbitrator an
estimate of the attorneys’ fees and costs associated with responding to such
written discovery requests and a written challenge to each applicable discovery
request. After receipt of an estimate of attorneys’ fees and costs and/or
challenge(s) to one or more discovery requests, the Lead Arbitrator will make a
finding as to the likely attorneys’ fees and costs associated with responding to
the discovery requests and issue an order that (A) requires the requesting party
to prepay the attorneys’ fees and costs associated with responding to the
discovery requests, and (B) requires the responding party to respond to the
discovery requests as limited by the Lead Arbitrator within a certain period of
time after receiving payment from the requesting party. If a party entitled to
submit an estimate of attorneys’ fees and costs and/or a challenge to discovery
requests fails to do so within such 10-day period, the Lead Arbitrator will make
a finding that (A) there are no attorneys’ fees or costs associated with
responding to such discovery requests, and (B) the responding party must respond
to such discovery requests (as may be limited by the Lead Arbitrator) within a
certain period of time as determined by the Lead Arbitrator.

 (b)

In order to allow a written discovery request, the Lead Arbitrator must find
that the discovery request satisfies the standards set forth in these
Arbitration Provisions and the Utah Rules of Civil Procedure. The Lead
Arbitrator must strictly enforce these standards. If a discovery request does
not satisfy any of the standards set forth in these Arbitration Provisions or
the Utah Rules of Civil Procedure, the Lead Arbitrator may modify such discovery
request to satisfy the applicable standards, or strike such discovery request in
whole or in part.

(c)

Discovery deadlines will be set forth in a scheduling order issued by the Lead
Arbitrator. The parties hereby authorize and direct the Lead Arbitrator to take
such actions and make such rulings as may be necessary to carry out the parties’
intent for the arbitration proceedings to be efficient and expeditious.

3.7

Each party may submit expert reports (and rebuttals thereto), provided that such
reports must be submitted by the deadlines established by the Lead Arbitrator.
Expert reports must contain the following: (a) a complete statement of all
opinions the expert will offer at trial and the basis and reasons for them; (b)
the expert’s name and qualifications, including a list of all publications
within the preceding 10 years, and a list of any other cases in which the expert
has testified at trial or in a deposition or prepared a report within the
preceding 10 years; and (c) the compensation to be paid for the expert’s study
and testimony. The parties are entitled to depose any other party’s expert
witness one time for no more than 4 hours. An expert may not testify in a
party’s case-in-chief concerning any matter not fairly disclosed in the expert
report.

3.8

All information disclosed by either party during the Arbitration process
(including without limitation information disclosed during the discovery
process) shall be considered confidential in nature. Each party agrees not to
disclose any confidential information received from the other party during the
discovery process unless (i) prior to or after the time of disclosure such
information becomes public knowledge or part of the public domain, not as a
result of any inaction or action of the receiving party, (ii) such information
is required by a court order, subpoena or similar legal duress to be disclosed
if such receiving party has notified the other party thereof in writing and
given it a reasonable opportunity to obtain a protective order from a court of
competent jurisdiction prior to disclosure; or (iii) disclosed to the receiving
party’s agents, representatives and legal counsel on a need to know basis who
each agree in writing not to disclose such information to any third party.
Pursuant to Section 118(5) of the Arbitration Act, the Lead Arbitrator is hereby
authorized and directed to issue a protective order to prevent the disclosure of
privileged information and confidential information upon the written request of
either party.

3.9

The parties hereby authorize and direct the Arbitration Panel to take such
actions and make such rulings as may be necessary to carry out the parties’
intent for the arbitration proceedings to be efficient and expeditious. Pursuant
to Section 120 of the Arbitration Act, the parties hereby agree that an award of
the Arbitration Panel must be made within 150 days after the Arbitration
Commencement Date. The Lead Arbitrator is hereby authorized and directed to hold
a scheduling conference within ten (10) calendar days after the Arbitration
Commencement Date in order to establish a scheduling order with various binding
deadlines for discovery, expert testimony, and the submission of documents by
the parties to enable the Arbitration Panel to render a decision prior to the
end of such 150-day period. The Utah Rules of Evidence will apply to any final
hearing before the Arbitration Panel.

3.10

The decision of the Arbitration Panel shall be determined by majority vote of
the arbitrators. The Arbitration Panel shall have the right to award or include
in the Arbitration Panel’s award any relief which the Arbitration Panel deems
proper under the circumstances, including, without limitation, specific
performance and injunctive relief, provided that the Arbitration Panel may not
award exemplary or punitive damages. The Arbitration Panel shall select a single
arbitrator to prepare the written decision of the Arbitration Panel.

3.11

If any part of these Arbitration Provisions is found to violate applicable law
or to be illegal, then such provision shall be modified to the minimum extent
necessary to make such provision enforceable under applicable law.

3.12

The Arbitration Panel is hereby directed to require the losing party to (i) pay
the full amount of the costs and fees of the arbitrators, and (ii) reimburse the
prevailing party the reasonable attorneys’ fees, arbitrator costs, deposition
costs, and other discovery costs incurred by the prevailing party.

 

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