Exhibit 10.4

 

SHARE EXCHANGE AGREEMENT

 

BY AND AMONG

 

MEDICINE MAN TECHNOLOGIES INC.,

 

SUCCESS NUTRIENTS INC.

 

AND

 

THE SHAREHOLDERS OF SUCCESS NUTRIENTS INC.

 

THIS SHARE EXCHANGE AGREEMENT (the "Agreement") is made and entered into as of
February 27, 2017, by and among MEDICINE MAN TECHNOLOGIES, INC. a Nevada
corporation ("MMT"), whose principal place of business is located at 4880 Havana
Street, Suite 102 South, Denver, Colorado 80239; SUCCESS NUTRIENTS INC., a
Colorado corporation ("SN"), with its principal place of business located at
1850 Bassett St., No 1211, Denver, CO 80202; and all of the shareholders of SN
(the “Shareholders”), jointly and severally, who hereby agree as follows.

 

RECITALS

 

WHEREAS, Shareholders own all of the issued and outstanding Common Shares (as
defined in Section 1.1) of SN (the “SN Shares”), which constitute all of the
issued and outstanding securities of SN as of the date hereof; and

 

WHEREAS, MMT desires to acquire all of the SN Shares from the Shareholders and
the Shareholders desire to exchange their SN Shares for shares of MMT’s common
stock on the terms and conditions hereinafter set forth.

 

NOW, THEREFORE, in consideration of the covenants, promises and representations
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

 

ARTICLE I

 

EXCHANGE OF SHARES

 

1.1 Exchange of Shares. At the Effective Time (as defined below), and subject to
and upon the terms and conditions of this Agreement, the Shareholders agree to
exchange, sell, transfer and assign to MMT, and MMT agrees to acquire from the
Shareholders, all of their SN Shares in exchange for an aggregate of 3.5 million
shares of MMT’s common stock (the “MMT Shares”). As of Closing, the SN Shares
shall constitute one hundred percent (100%) of the issued and outstanding
securities of SN in the aggregate. The exchange of the SN Shares for the MMT
shares of common stock contemplated hereunder shall be referred to herein as the
"Transaction."

 

 

 

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1.2 Closing; Effective Time.

 

(a) The closing of the Transaction (the "Closing") shall take place at the
offices of counsel to MMT, or such other location as the parties may so agree on
or before March 1, 2017, after the satisfaction or waiver of the conditions set
forth in Article VI, or at such other time, date and location as the parties
hereto agree in writing (the "Closing Date" or the “Closing”). As soon as is
practicable after the Closing, the parties hereto shall cause the Transaction to
be consummated by delivering to the Secretary of State of the State of Colorado
Statement of Share Exchange (the “Statement of Share Exchange”), in such form as
required by, and executed and acknowledged in accordance with, the relevant
provisions of the Colorado Business Corporations Act (“CBCA”), and delivering to
the Secretary of State of the State of Nevada Articles of Exchange (the
“Articles of Exchange”), in such form as required by, and executed and
acknowledged in accordance with the Nevada Revised Statutes. The Transaction
shall become effective as of the date and at such time (the “Effective Time”) as
the Nevada Articles of Exchange is filed with the Secretary of State of the
State of Nevada and the Colorado Statement of Share Exchange is filed with the
Secretary of State of the State of Colorado.

 

(b) The Parties hereto hereby agree that, for accounting purposes, the effective
date of the Merger shall be March 1, 2017 (the “Effective Time”).

 

1.3 Delivery of Certificates Representing the SN Shares. On the Effective Time,
the Shareholders shall deliver their certificates representing their SN Shares,
duly endorsed to MMT or accompanied by stock powers or other assignments or
documents to effectuate transfer of the SN Shares duly endorsed to MMT, with (i)
all such other documents as may be required to vest in MMT good and marketable
title to the SN Shares free and clear of any and all Liens (as defined in
Section 2.3 hereof), and (ii) all necessary stock transfer and any other
required documentary stamps. The Shareholders shall cause SN to recognize and
record the transfers described in this Section 1.3 on its transfer books.

 

1.4 Issuance of Certificates Representing the MMT Shares. On the Effective Time,
or as soon thereafter as practical, MMT shall cause the MMT Shares to be issued
to the Shareholders as provided in Section 1.1 above, pro rata to their
respective ownership of the SN Shares or as the Shareholders shall direct, so
long as such direction is acceptable to legal counsel of MMT. Thirty-five (35)
shares of MMT’s common stock shall be issued for each shares of SN common stock
issued and outstanding at the Effective Time. A list of the Shareholders and
their respective shares owned in SN, as well as the number of MMT Shares to be
issued in the Transaction, is attached hereto as Exhibit “B.”

 

The MMT Shares, when issued, shall be “restricted” shares (as that term is
defined under the Securities Act of 1933, as amended) (the “Act”) and may not be
sold, transferred or otherwise disposed of by the Shareholders without
registration under the Act or an available exemption from registration under the
Act. The certificates representing the MMT Shares will contain the appropriate
restrictive legends. MMT shall cause its Transfer Agent to recognize and record
the transfers described in this Section 1.4 on its transfer books, and MMT shall
issue appropriate stop-transfer instructions to the Transfer Agent with respect
to the MMT Shares.

 

1.5 Taking of Necessary Action; Further Action. If, at any time after the
Closing, any further action is necessary or desirable to carry out the purposes
of this Agreement and to vest MMT with full right, title and possession to the
SN Shares, the Shareholders will take all such lawful and necessary action.

 

 

 

 

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ARTICLE II

 

REPRESENTATIONS AND WARRANTIES OF SN AND SHAREHOLDERS

 

SN and the Shareholders hereby represent and warrant to their respective
knowledge, and covenant with, MMT with respect to those matters set forth in
this Article II. For purposes of this Agreement, the disclosure of any matter in
a schedule to this Agreement (the “Disclosure Schedule”) shall serve as a
sufficient disclosure for purposes of any and all representations and warranties
in this Agreement to which such matter logically relates and where such deemed
inclusion can be reasonably inferred from the matter and shall be deemed to
modify such representation and warranty to the full extent of the disclosure. It
is understood that the listing (or inclusion of a copy) of a document or other
item on the Disclosure Schedule shall be deemed adequate disclosure of the
document or item and its contents. The Seller shall make a good faith effort to
list or cross reference matters on the Disclosure Schedule to which the matter
logically relates.

 

2.1 Ownership of Shares. Shareholders are the record and beneficial owners of
all of the issued and outstanding SN Shares.

 

2.2 Authority. The Shareholders have full power and authority and are competent
to (i) execute, deliver and perform this Agreement, and each ancillary document
which Shareholders have executed or delivered or are to execute or deliver
pursuant to this Agreement, and (ii) carry out Shareholders obligations
hereunder and thereunder, without the need for any Governmental Action/Filing
(as defined herein). The execution, delivery and performance by the Shareholders
to this Agreement and each ancillary document does not and will not conflict
with, result in a breach of, or constitute a default or require a consent or
action under, any agreement or other instrument to or by which such Shareholders
are a party or are bound or to which any of the properties or assets of the
Shareholders are subject, or any Legal Requirement (as defined herein) to which
such Shareholders are subject, or result in the creation of any Lien (as defined
in Section 2.3) on the Shares. This Agreement, and Shareholders ancillary
document to be executed and delivered by such Shareholders at the Closing, have
been duly executed and delivered by such Shareholders (and each ancillary
document to be executed and delivered by Shareholders at or after the Closing
will be duly executed and delivered by Shareholders), and this Agreement
constitutes, and each ancillary document, when executed and delivered by
Shareholders will constitute such Shareholders’ legal, valid and binding
obligation, enforceable against Shareholders in accordance with its terms. For
purposes of this Agreement, (x) the term "Governmental Action/Filing" shall mean
any franchise, license, certificate of compliance, authorization, consent,
order, permit, approval, consent or other action of, or any filing, registration
or qualification with, any federal, state, municipal, foreign or other
governmental, administrative or judicial body, agency or authority, and (y) the
term "Legal Requirements" means any federal, state, local, municipal, foreign or
other law, statute, constitution, principle of common law, resolution,
ordinance, code, edict, decree, rule, regulation, ruling or requirement issued,
enacted, adopted, promulgated, implemented or otherwise put into effect by or
under the authority of any Governmental Entity (as defined in Section 2.8(b)),
and all requirements set forth in applicable Contracts (as defined in Section
2.18(a)).

 

2.3 Title to Shares. The Shareholders have and shall transfer to MMT at the
Closing good and marketable title to all of their SN Shares, free and clear of
all liens, claims, charges, encumbrances, pledges, mortgages, security
interests, options, rights to acquire, proxies, voting trusts or similar
agreements, restrictions on transfer (other than federal and state securities
laws restrictions on transfer) or adverse claims of any nature whatsoever
("Liens").

 

 

 

 

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2.4 Acquisition of MMT Shares for Investment.

 

(a) The Shareholders are acquiring the MMT Shares to be issued to them for
investment for Shareholders own account and not as a nominee or agent, and not
with a view to the resale or distribution of any part thereof, and neither
Shareholder has any present intention of selling, granting any participation in,
or otherwise distributing the same. Each Shareholder further represents that
he/she does not have any contract, undertaking, agreement or arrangement with
any person to sell, transfer or grant participation to such person or to any
third person, with respect to any of the MMT Shares.

 

(b) The Shareholders understand that the MMT Shares are not and will not be
registered under the Securities Act, that the sale and the issuance of the MMT
Shares is intended to be exempt from registration under the Act pursuant to
Section 4(2) thereof, and that MMT's reliance on such exemption is predicated on
each Shareholders’ representations set forth herein. The Shareholders represent
and warrant that: (i) he or she can bear the economic risk of their investment,
and (ii) he or she possesses such knowledge and experience in financial and
business matters that they are capable of evaluating the merits and risks of the
investment in the MMT Shares.

 

(c) The Shareholders acknowledge that neither the US Securities and Exchange
Commission, nor the securities regulatory body of any state or other nation has
received, considered or passed upon the accuracy or adequacy of the information
and representations made in this Agreement.

 

(d) The Shareholders acknowledge that they have carefully reviewed such
information as they deemed necessary to evaluate an investment in the MMT
Shares. To their full satisfaction the Shareholders have been furnished all
materials requested relating to MMT and the issuance of the MMT Shares
hereunder, and the Shareholders has been afforded the opportunity to ask
questions of MMT's representatives to obtain any information necessary to verify
the accuracy of any representations or information made or given to the
Shareholders. Notwithstanding the foregoing, nothing herein shall derogate from
or otherwise modify the representations and warranties of MMT set forth in this
Agreement, on which the Shareholders have relied in making an exchange of their
Shares for the MMT Shares.

 

(e) The Shareholders understand that the MMT Shares may not be sold,
transferred, or otherwise disposed of without registration under the Act or an
exemption therefrom, and that in the absence of an effective registration
statement covering the MMT Shares or any available exemption from registration
under the Act, the MMT Shares must be held indefinitely. Shareholders further
acknowledge that the MMT Shares may not be sold pursuant to Rule 144 promulgated
under the Securities Act unless all of the conditions of Rule 144 are satisfied,
or the MMT Shares have been registered with the US Securities and Exchange
Commission.

 

2.5 Organization and Qualification of SN.

 

(a) SN is a corporation duly organized, validly existing and in good standing
under the laws of Colorado and has the requisite power and authority to own,
lease and operate its assets and properties and to carry on its business as it
is now being or currently planned by SN to be conducted. SN is in possession of
all franchises, grants, authorizations, licenses, permits, easements, consents,
certificates, approvals and orders ("Approvals") necessary to own, lease and
operate the properties it purports to own, operate or lease and to carry on its
business as it is now being or currently planned by SN to be conducted, except
where the failure to have such Approvals could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect (as defined
in Section 8.2(b)) on SN. Complete and correct copies of the Articles of
Incorporation, Bylaws and all corporate minutes (or other comparable governing
instruments with different names) (collectively referred to herein as "Charter
Documents") of SN, as amended and currently in effect, are attached hereto as
Schedule 2.5. SN is not in violation of any of the provisions of its Charter
Documents.

 

 

 

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(b) SN is duly qualified or licensed to do business as a foreign corporation and
is in good standing in each jurisdiction where the character of the properties
owned, leased or operated by it or the nature of its activities makes such
qualification or licensing necessary, except for such failures to be so duly
qualified or licensed and in good standing that could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect on SN.

 

(c) The minute books of SN contain true, complete and accurate records of all
meetings and consents in lieu of meetings of its Board of Directors (and any
committees thereof), similar governing bodies and Shareholders ("Corporate
Records") since the time of SN's organization. Copies of such Corporate Records
of SN have been heretofore delivered to MMT.

 

(d) The transfer records of SN contain true, complete and accurate records of
Shareholders transfers involving the SN Shares ("Shareholders Records") of SN
since the time of SN's organization.

 

2.6 Subsidiaries. SN has no subsidiary companies. SN does not own, directly or
indirectly, any other ownership, equity, profits or voting interest in any other
entity or Person or has any agreement or commitment to purchase any such
interest, and SN has not agreed and is not obligated to make nor is bound by any
written, oral or other agreement, contract, subcontract, lease, binding
understanding, instrument, note, option, warranty, purchase order, license,
sublicense, insurance policy, benefit plan, commitment or undertaking of any
nature, as of the date hereof or any date hereafter, under which it may be
obligated to make any future investment in or capital contribution to any other
entity or Person.

 

For purposes of this Agreement, (i) the term "Subsidiary" shall mean any entity
in which SN, directly or indirectly, owns beneficially securities or interests
representing 50% or more of (x) the aggregate equity or profit interests, or (y)
the combined voting power of voting interests ordinarily entitled to vote for
management or otherwise, and (ii) the term "Person" shall mean and include an
individual, a corporation, a partnership (general or limited), a joint venture,
an association, a trust or any other organization or entity, including a
government or political subdivision or an agency or instrumentality thereof.

 

2.7 Capitalization of SN.

 

(a) All issued and outstanding SN shares are legally issued, fully paid and
non-assessable, and are not issued in violation of the preemptive or other
rights of any person.

 

(b) There are no equity securities, partnership interests or similar ownership
interests of any class of any equity security of SN, or any securities
exchangeable or convertible into or exercisable for such equity securities,
partnership interests or similar ownership interests, issued, reserved for
issuance or outstanding. There are no subscriptions, options, warrants, equity
securities, partnership interests or similar ownership interests, calls, rights
(including preemptive rights), commitments or agreements of any character to
which SN is a party or by which it is bound obligating SN to issue, deliver or
sell, or cause to be issued, delivered or sold, or repurchase, redeem or
otherwise acquire, or cause the repurchase, redemption or acquisition of, any
Shares or similar ownership interests of SN or obligating SN to grant, extend,
accelerate the vesting of or enter into any such subscription, option, warrant,
equity security, call, right, commitment or agreement.

 

(c) There are no registration rights, and there is no voting trust, proxy,
rights plan, anti-takeover plan or other agreement or understanding to which SN
is a party or by which SN is bound with respect to any equity security of any
class of SN.

 

 

 

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2.8 No Conflict; Required Filings and Consents.

 

(a) The execution and delivery of this Agreement by the Shareholders does not,
and the performance of this Agreement by the Shareholders shall not, (i)
conflict with or violate SN's Charter Documents, (ii) subject to obtaining the
adoption of this Agreement and the Transaction by the Shareholders, conflict
with or violate any Legal Requirements, or (iii) result in any breach of or
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, or materially impair SN's rights or alter the
rights or obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or encumbrance on any of the properties or assets of SN
pursuant to, any Contracts, except, with respect to clauses (ii) or (iii), for
any such conflicts, violations, breaches, defaults or other occurrences that
would not, individually and in the aggregate, have a Material Adverse Effect on
SN.

 

(b) The execution and delivery of this Agreement by the Shareholders does not,
and the performance of their obligations hereunder will not, require any
consent, approval, authorization or permit of, or filing with or notification
to, any court, administrative agency, commission, governmental or regulatory
authority, self-regulatory organization, domestic or foreign (a "Governmental
Entity"), except (i) for applicable requirements, if any, of the Act, the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), state
securities laws ("Blue Sky Laws"), and the rules and regulations thereunder, and
appropriate documents with the relevant authorities of other jurisdictions in
which SN is qualified to do business, (ii) consents, approvals, authorizations,
permits, filings and notices to be obtained or made prior to Closing, and (iii)
where the failure to obtain such consents, approvals, authorizations or permits,
or to make such filings or notifications, would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on SN or,
after the Closing, MMT, or prevent consummation of the Transaction or otherwise
prevent the parties hereto from performing their obligations under this
Agreement.

 

2.9 Compliance. SN has complied with, is not in violation of, any Legal
Requirements with respect to the conduct of its business, or the ownership or
operation of its business, except for failures to comply or violations that,
individually or in the aggregate, have not had and are not reasonably likely to
have a Material Adverse Effect on SN. The businesses and activities of SN have
not been and are not being conducted in violation of any Legal Requirements. SN
is not in default or violation of any term, condition or provision of any
applicable Charter Documents or Contracts. Neither SN nor the Shareholders have
received any notice of non-compliance with any Legal Requirement (and the
Shareholders have no Knowledge of any such notice delivered to any other
Person). The Shareholders are not in violation of any term of any contract or
covenant (either with SN or another entity) relating to employment, patents,
proprietary information disclosure, non-competition or non-solicitation.

 

2.10 Financial Statements of SN.

 

(a) SN has delivered to MMT copies of its unaudited financial statements for the
period from its inception through December 31, 2016. The SN Financial Statements
present fairly the financial condition and results of operations of SN at the
dates and for the periods covered by the SN Financial Statements. SN represents
and warrants that there has been no material adverse change in the financial
condition of SN subsequent to December 31, 2016.

 

(b) The SN Financial Statements and any notes related thereto comply as to form
in all material respects with applicable accounting requirements, have been
prepared in accordance with United States generally accepted accounting
principles (“GAAP”) applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes thereto) and fairly present in
all material respects (subject, in the case of the unaudited interim financial
statements, to normal, recurring year-end adjustments none of which are or will
be material in amount, individually or in the aggregate) the consolidated
financial position of SN as at the dates thereof and the consolidated results of
their operations and cash flows for the periods then ended.

 

 

 

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(c) SN does not have any direct or indirect liabilities that were not fully and
adequately reflected or reserved against on the balance sheet or described in
the notes to the audited financial statements of SN. SN has no Knowledge of any
circumstance, condition, event or arrangement that has taken place at any time
that may hereafter give rise to any liabilities.

 

2.11 No Undisclosed Liabilities. SN has no liabilities (absolute, accrued,
contingent or otherwise) of a nature required to be disclosed on a balance sheet
which are, individually or in the aggregate, material to the business, results
of operations or financial condition of SN.

 

2.12 Litigation. There are no claims, suits, actions, proceedings pending or, to
Shareholders Knowledge, threatened against SN, before any court, governmental
department, commission, agency, instrumentality or authority, or any arbitrator
that seeks to restrain or enjoin the consummation of the transactions
contemplated by this Agreement or which could reasonably be expected, either
singularly or in the aggregate with all such claims, actions or proceedings, to
have a Material Adverse Effect on SN or have a Material Adverse Effect on the
ability of the parties hereto to consummate the Transaction.

 

2.13 Restrictions on Business Activities. There is no agreement, commitment,
judgment, injunction, order or decree binding upon SN or to which SN is a party
which has or could reasonably be expected to have the effect of prohibiting or
materially impairing any business practice of SN, any acquisition of property by
SN or the conduct of business by SN as currently conducted other than such
effects, individually or in the aggregate, which have not had and could not
reasonably be expected to have a Material Adverse Effect on SN.

 

2.14 Title to Property. Other than as described in Schedule 2.14 hereto, SN owns
no other properties.

 

2.15 Taxes.

 

(a) Filing of Tax Returns. SN has timely filed, or have had timely filed on
their behalf, with the appropriate Taxing authorities all Tax Returns in respect
of Taxes required to be filed by them. The Tax Returns filed (including any
amendments thereof) are complete and accurate in all material respects. SN has
not requested any extension of time within which to file any Tax Return in
respect of any Taxes, which Tax Return has not since been filed in a timely
manner. To the Knowledge of SN, no claim has ever been made by any Taxing
authority in a jurisdiction where SN does not file Tax Returns, or has Tax
Returns filed on their behalf, that they are or may be subject to taxation by
that jurisdiction, or liable for Taxes owing to that jurisdiction.

 

(b) Payment of Taxes. All Taxes owed by SN (whether or not shown as due on any
Tax Returns) have been paid in full or adequate reserves on their respective
books and/or records have been established. SN has withheld and paid all Taxes
required to have been withheld and paid in connection with amounts paid or owing
to any employee, independent contractor, creditor, stockholder, or other third
party. SN has made all required estimated Tax payments sufficient to avoid any
underpayment penalties. The unpaid Taxes of SN (A) do not, as of the Closing
Date, exceed the reserve for Tax liability (rather than any reserve for deferred
Taxes established to reflect the timing differences between book and Tax income)
set forth on the face of SN’s most recent balance sheets (rather than any notes
thereto) and (B) do not exceed that reserve as adjusted for the passage of time
through the Closing Date in accordance with the past custom and practice of SN
in filing, or having filed on their behalf, their Tax Returns. The charges,
accruals and reserves on the books of SN in respect of any liability for Taxes
(x) based on or measured by net income for any years not finally determined, (y)
with respect to which the applicable statute of limitations has not expired or
(z) that has been previously deferred, are adequate to satisfy any assessment
for such Taxes for any such years.

 

 

 

 

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(c) Audits, Investigations or Claims. There is no dispute or claim which has not
been resolved concerning any Tax liability of SN either (A) claimed or raised by
any Taxing authority in writing or (B) as to which any of the directors and
officers (and employees responsible for Tax matters) of SN has Knowledge. There
is no currently pending audit of any Tax Return of SN by any Taxing authority,
and SN has not ever been notified in writing that any Taxing authority intends
to audit any Tax Return of SN. SN has not executed any outstanding waivers or
consents regarding the application of the statute of limitations with respect to
any Taxes or Tax Returns.

 

(d) Lien. There are no encumbrances for Taxes (other than for current Taxes not
yet due and payable) on any assets of SN.

 

(e) Tax Elections. SN (i) has not agreed, or are required, to make any
adjustment under Section 481(a) of the Code by reason of a change in accounting
method or otherwise; (ii) have not made an election pursuant to Code Sections
338 or 336(e) or the regulations thereunder or any comparable provisions of any
foreign or state or local income tax law; (iii) is not subject to any
constructive elections under Code Section 338 or the regulations thereunder;
(iv) has not made any payments, are obligated to make any payments, or are a
party to any agreement that under certain circumstances could obligate it to
make any payments that will not be deductible under §280G and §162(m) of the
Code; and (v) has not made any of the foregoing elections or are required to
apply any of the foregoing rules under any comparable state or local income Tax
provision.

 

(f) Prior Affiliated Groups. SN (A) has never been a member of an affiliated
group of corporations within the meaning of Section 1504 of the Code and (B)
does not have any liability for the Taxes of any person under Treas. Reg.
§1502-6 (or any similar provision of state, local or foreign law), as a
transferee or successor, by contract or otherwise.

 

(g) Tax Sharing Agreements. SN is not a party to any Tax allocation, indemnity
or sharing or similar agreement.

 

(h) Section 355. SN has not distributed the stock of a “controlled corporation”
(within the meaning of that term as used in Section 355(a) of the Code) in a
transaction subject to Section 355 of the Code within the past two years.

 

(i) Partnerships. SN does not own an interest in a partnership for Tax purposes.

 

2.16 Brokers; Third Party Expenses. The Shareholders have not incurred, nor will
they incur, directly or indirectly, any liability for brokerage or finders' fees
or agent's commissions or any similar charges in connection with this Agreement
or any transaction contemplated hereby.

 

2.17 Intellectual Property. For the purposes of this Agreement, the following
terms have the following definitions:

 

"Intellectual Property" shall mean any or all of the following and all worldwide
common law and statutory rights in, arising out of, or associated therewith: (i)
patents and applications therefore and all reissues, divisions, renewals,
extensions, provisionals, continuations and continuations-in-part thereof
("Patents"); (ii) inventions (whether patentable or not), invention disclosures,
improvements, trade secrets, proprietary information, know how, technology,
technical data and customer lists, and all documentation relating to any of the
foregoing; (iii) copyrights, copyrights registrations and applications
therefore, and all other rights corresponding thereto throughout the world; (iv)
domain names, uniform resource locators ("URLs") and other names and locators
associated with the Internet ("Domain Names"); (v) industrial designs and any
registrations and applications therefore; (vi) trade names, logos, common law
trademarks and service marks, trademark and service mark registrations and
applications therefore (collectively, "Trademarks"); (vii) all databases and
data collections and all rights therein; (viii) all moral and economic rights of
authors and inventors, however denominated, and (ix) any similar or equivalent
rights to any of the foregoing (as applicable).

 

 

 

 

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"Company Intellectual Property" shall mean any Intellectual Property that is
owned by, or exclusively licensed to, SN or MMT, as applicable.

 

"Registered Intellectual Property" means all Intellectual Property that is the
subject of an application, certificate, filing, registration or other document
issued, filed with, or recorded by any private, state, government or other legal
authority.

 

"Company Registered Intellectual Property" means all of the Registered
Intellectual Property owned by, or filed in the name of, SN or MMT, as
applicable.

 

"Company Products" means all current versions of products or service offerings
of SN or MMT, as applicable.

 

(a) No Company Intellectual Property or Company Product is subject to any
material proceeding or outstanding decree, order, judgment, contract, license,
agreement or stipulation restricting in any manner the use, transfer or
licensing thereof by SN, or which may affect the validity, use or enforceability
of such Company Intellectual Property or Company Product, which in any such case
could reasonably be expected to have a Material Adverse Effect on SN.

 

(b) SN owns and has good and exclusive title to, each material item of Company
Intellectual Property owned by it free and clear of any Liens (excluding
non-exclusive licenses and related restrictions granted in the ordinary course);
and SN is the exclusive owner of all material Trademarks used in connection with
the operation or conduct of the business of SN, including the sale of any
products or the provision of any services by SN.

 

(c) The operation of the business of SN as such business currently is conducted,
including (i) the design, development, manufacture, distribution, reproduction,
marketing or sale of the products or services of SN (including Products), and
(ii) SN's use of any product, device or process, to SN's Knowledge and except as
could not reasonably be expected to have a Material Adverse Effect, has not and
does not and will not infringe or misappropriate the Intellectual Property of
any third party or constitute unfair competition or trade practices under the
laws of any jurisdiction.

 

2.18 Agreements, Contracts and Commitments.

 

(a) Schedule 2.18 hereto sets forth a complete and accurate list of all Material
Contracts (as hereinafter defined), specifying the parties thereto. For purposes
of this Agreement:

 

"Contracts" shall mean all contracts, agreements, leases, mortgages, indentures,
note, bond, liens, license, permit, franchise, purchase orders, sales orders,
arbitration awards, judgments, decrees, orders, documents, instruments,
understandings and commitments, or other instrument or obligation (including
without limitation outstanding offers or proposals) of any kind, whether written
or oral, to which SN is a party or by or to which any of the properties or
assets of SN may be bound, subject or affected (including without limitation
notes or other instruments payable to SN).

 

"Material Contracts" shall mean (x) each Contract (I) providing for payments
(past, present or future) to SN in excess of $50,000 in the aggregate or (II)
under which or in respect of which SN presently has any liability or obligation
of any nature whatsoever (absolute, contingent or otherwise) in excess of
$50,000, (y) each Contract which otherwise is or may be material to the
businesses, operations, assets, condition (financial or otherwise) or prospects
of SN and (z) without limitation of subclause (x) or subclause (y), each of the
following Contracts:

 

 

 

 

 

9 

 

 

(i) any mortgage, indenture, note, installment obligation or other instrument,
agreement or arrangement for or relating to any borrowing of money by or from
SN, any Subsidiary, or any officer, director or 5% or more stockholder
("Insider") of SN;

 

(ii) any guaranty, direct or indirect, by SN or any Insider of SN of any
obligation for borrowings, or otherwise, excluding endorsements made for
collection in the ordinary course of business;

 

(iii) any Contract made other than in the ordinary course of business or (x)
providing for the grant to any preferential rights to purchase or lease any
asset of SN, or (y) providing for any right (exclusive or non-exclusive) to sell
or distribute, or otherwise relating to the sale or distribution of, any product
or service of SN;

 

(iv) any obligation to register any Shares or other securities of SN with the
U.S. Securities and Exchange Commission ("SEC") or any state securities
commission or agency;

 

(v) any obligation to make payments, contingent or otherwise, arising out of the
prior acquisition of the business, assets or stock of other Persons;

 

(vi) any collective bargaining agreement with any labor union;

 

(vii) any lease or similar arrangement for the use by SN of Personal Property;
and

 

(viii) any Contract to which any Insider of SN is a party.

 

(b) Each Contract was entered into at arms' length and in the ordinary course,
is in full force and effect and is valid and binding upon and enforceable
against each of the parties thereto. True, correct and complete copies of all
Material Contracts (or written summaries in the case of oral Material Contracts)
and of all outstanding offers or proposals of SN have been heretofore delivered
to MMT.

 

(c) Neither SN nor any other party thereto is in breach of or in default under,
and no event has occurred which with notice or lapse of time or both would
become a breach of or default under, any Contract, and no party to any Contract
has given any notice of any claim of any such breach, default or event, which,
individually or in the aggregate, are reasonably likely to have a Material
Adverse Effect on SN. Each Contract to which SN is a party or by which it is
bound that has not expired by its terms is in full force and effect, except
where such failure to be in full force and effect is not reasonably likely to
have a Material Adverse Effect on SN.

 

2.19 Interested Party Transactions. No employee, officer, director or
Shareholder of SN or a Shareholder’s of his immediate family is indebted to SN,
nor is SN indebted (or committed to make loans or extend or guarantee credit) to
any of them, other than (i) for payment of salary for services rendered, (ii)
reimbursement for reasonable expenses incurred on behalf of SN, and (iii) for
other employee benefits made generally available to all employees. To each
Shareholders Knowledge, none of such individuals has any direct or indirect
ownership interest in any Person with whom SN is affiliated or with whom SN has
a contractual relationship, or any Person that competes with SN, except that
each employee, Shareholders, officer and director of SN and Shareholders of
their respective immediate families may own less than 5% of the outstanding
stock in publicly traded companies that may compete with SN. To each
Shareholders Knowledge, no manager or Shareholders or any Shareholders of their
immediate families is, directly or indirectly, interested in any material
contract with SN (other than such contracts as relate to any such individual
ownership of Shares or other securities of SN).

 

 

 

 

10 

 

 

2.20 Representations and Warranties Complete. The representations and warranties
of the Shareholders included in this Agreement and any list, statement, document
or information set forth in, or attached to, any Schedule provided pursuant to
this Agreement or delivered hereunder, are true and complete in all material
respects and do not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements contained therein not misleading, under the circumstance under which
they were made.

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES OF MMT

 

Except as set forth on the disclosure schedules, MMT hereby represents and
warrants to SN and the Shareholders as follows:

 

3.1 Organization and Qualification; MMT is a corporation, duly incorporated or
organized, validly existing and in good standing under the laws of Nevada, has
requisite power and authority and governmental approvals to own, lease and
operate its properties and to carry on its business as currently conducted. MMT
is duly qualified or licensed to do business and is in good standing in each
jurisdiction in which the ownership or leasing of its property or the conduct of
its business requires such qualification or licensing, except where the failure
to be so qualified or licensed or in good standing would not, individually or in
the aggregate, have a Material Adverse Effect on MMT.

 

3.2 Authority to Execute and Perform Agreement. MMT has the requisite power and
all authority required to enter into, execute and deliver this Agreement and the
Transaction Documents to which it is a party, to perform its obligations
hereunder and thereunder and to consummate the Transaction. The execution,
delivery and performance of this Agreement and the consummation of the
Transaction have been duly authorized by all necessary corporate action.

 

3.3 Binding Effect. This Agreement has been validly executed and delivered by
MMT and, assuming the due execution and delivery hereof by SN, constitutes a
valid and binding obligation of MMT, enforceable against MMT in accordance with
its terms, except to the extent such enforceability may be limited by (i)
bankruptcy, insolvency, reorganization, moratorium or other similar laws of
general applicability affecting or relating to enforcement of creditors’ rights
generally, and (ii) general equitable principles (regardless of whether such
enforceability is considered in equity or at law).

 

3.4 Capitalization of MMT.

 

(a) As of the date hereof, the authorized capital stock of MMT consists of (i)
Ninety Million (90,000,000) shares of Common Stock, par value $0.001 per share,
of which 10,470,944 shares of Common Stock are issued and outstanding, all of
which are validly issued, fully paid and non-assessable, and all of which have
been issued and granted in compliance with all applicable securities laws and
(in all material respects) other applicable Legal Requirements; and (ii)
10,000,000 shares of Preferred Stock, par value $0.001 per share, none of which
has been issued or is outstanding. MMT has no other authorized, issued or
outstanding class of capital stock.

 

(b) Obligations. There are no obligations, contingent or otherwise, of MMT to
repurchase, redeem or acquire shares of MMT.

 

(c) Options, Warrants, etc. As of the date hereof MMT has issued an aggregate of
$870,000 in convertible notes, convertible into 497,143 shares of MMT’s common
stock at a conversion price of $1.75 per share. There are no other existing
options, rights, subscriptions, warrants, unsatisfied preemptive rights, calls
or commitments relating to (i) the authorized and unissued capital stock of MMT,
or (ii) any securities or obligations convertible into or exchangeable for, or
giving any Person any right to subscribe for or acquire from MMT any shares of
capital stock of MMT and no such convertible or exchangeable securities or
obligations are outstanding.

 

 

 

 

11 

 

 

(d) Registration. The outstanding shares of the capital stock of MMT have been
issued in full compliance with the registration and prospectus delivery
requirements of the Securities Act or in compliance with applicable exemptions
therefrom, and the registration and qualification requirements of all applicable
securities laws of states of the United States.

 

(e) MMT Shares. The MMT Shares, when issued as provided in this Agreement, will
be duly authorized and validly issued, fully paid and non-assessable, and will
be free of any Liens or encumbrances and of restrictions on transfer, other than
restrictions on transfer under applicable state and federal securities laws or
the Transaction documents.

 

3.5 Board Approval. The Board of Directors of MMT, by resolutions duly adopted
at a meeting duly called and held at which a quorum was present or by the
written consent in lieu of such a meeting, has approved this Agreement and the
Transaction in accordance with the requirements of the State of Nevada.

 

3.6 No Material Adverse Change. There has been no change in the business,
properties, assets, operations or condition (financial or otherwise) which has
resulted or reasonably could be expected to result in or which MMT has reason to
believe could reasonably be expected to result in a Material Adverse Effect on
it, and MMT has no Knowledge of any such change that is threatened, nor has
there been any damage, destruction or loss affecting the assets, properties,
business, operations or condition (financial or otherwise), whether or not
covered by insurance which has resulted or reasonably could be expected to
result in or which MMT has reason to believe could reasonably be expected to
result in a Material Adverse Effect on MMT.

 

3.7 Books and Records. The books and records, financial and otherwise, of MMT
are in all material respects complete and correct and have been maintained in
accordance with sound business and bookkeeping practices so as to accurately and
fairly reflect, in reasonable detail, the transactions and dispositions of the
assets and liabilities of MMT.

 

3.8 Litigation. There are no Legal Proceedings pending or, to the Knowledge of
MMT, threatened against or involving MMT, or any of its respective property or
assets. There are no outstanding orders, judgments, injunctions, awards or
decrees of any court, governmental or regulatory body or arbitration tribunal
against or involving MMT.

 

3.9 No Undisclosed Liabilities. MMT has no liabilities (absolute, accrued,
contingent or otherwise) of a nature required to be disclosed on a balance sheet
or in the related notes to the financial statements which are, individually or
in the aggregate, material to the business, results of operations or financial
condition of SN.

 

3.10 Title to Properties; Absence of Liens. MMT has good and marketable title to
all of its respective assets and properties, whether real, personal or fixed,
free and clear of all Liens, except for Liens for Taxes not yet due and payable
or which MMT is contesting in good faith and for which adequate reserves have
been established.

 

3.11 Compliance with Laws. MMT is not in violation of, default under, or
conflict with, any applicable Order or any Applicable Law, except for any such
violations that would not, individually or in the aggregate, have a Material
Adverse Effect on MMT.

 

3.12 Intellectual Property. On the Effective Date MMT will not own, license or
otherwise have any rights in or to any Intellectual Property.

 

 

 

 

12 

 

 

3.13 Non-Contravention. The execution and delivery of this Agreement and the
Transaction documents by MMT, the performance by MMT of its obligations
hereunder and thereunder, and the consummation of the Transaction contemplated
hereby and thereby by such entities (A) do not and will not conflict with, or
result in a breach or violation of (i) any provision of the charter or bylaws of
any of MMT, (ii) any applicable laws, (iii) any material agreement, contract,
lease, license or instrument to which MMT is a party or by which MMT or any of
each of its properties or assets are bound and (B) will not result in the
creation or imposition of any Lien upon any of the property or assets of MMT
pursuant to any provision of any contract or Lien.

 

3.14 Consents and Approvals. Except for (i) those consents, approvals,
authorizations, filings or notices set forth on Schedule 3.15, (ii) applicable
requirements of the Securities Act or the Exchange Act, (iii) notices and
filings in connection with the Transaction, no consent, approval or
authorization of, filing with, or notice to, any Governmental Body is required
by MMT in connection with the execution, delivery and performance by MMT of this
Agreement, each and every agreement contemplated hereby, and the consummation by
MMT of the Transaction.

 

3.15 Material Contracts. MMT is not in default under any Material Contract, nor
to the Knowledge of MMT, does any condition exist that, with notice or lapse of
time or both, would constitute a default thereunder. To the Knowledge of MMT, no
other party to any such Material Contract of MMT is in default thereunder, nor
does any condition exist that with notice or lapse of time or both would
constitute a default thereunder. No approval or consent of any person is needed
in order that the Material Contracts of MMT shall continue in full force and
effect following the consummation of the transactions contemplated by this
Agreement.

 

3.16 Taxes.

 

(a) Filing of Tax Returns. MMT has timely filed, or have had timely filed on
their behalf, with the appropriate Taxing authorities all Tax Returns in respect
of Taxes required to be filed by them. The Tax Returns filed (including any
amendments thereof) are complete and accurate in all material respects. MMT has
not requested any extension of time within which to file any Tax Return in
respect of any Taxes, which Tax Return has not since been filed in a timely
manner. To the Knowledge of MMT, no claim has ever been made by any Taxing
authority in a jurisdiction where MMT does not file Tax Returns, or has Tax
Returns filed on their behalf, that they are or may be subject to taxation by
that jurisdiction, or liable for Taxes owing to that jurisdiction.

 

(b) Payment of Taxes. All Taxes owed by MMT (whether or not shown as due on any
Tax Returns) have been paid in full or adequate reserves on their respective
books and/or records have been established. MMT has withheld and paid all Taxes
required to have been withheld and paid in connection with amounts paid or owing
to any employee, independent contractor, creditor, stockholder, or other third
party. MMT has made all required estimated Tax payments sufficient to avoid any
underpayment penalties. The unpaid Taxes of MMT (A) do not, as of the Closing
Date, exceed the reserve for Tax liability (rather than any reserve for deferred
Taxes established to reflect the timing differences between book and Tax income)
set forth on the face of MMT’s most recent balance sheets (rather than any notes
thereto) and (B) do not exceed that reserve as adjusted for the passage of time
through the Closing Date in accordance with the past custom and practice of MMT
in filing, or having filed on their behalf, their Tax Returns. The charges,
accruals and reserves on the books of MMT in respect of any liability for Taxes
(x) based on or measured by net income for any years not finally determined, (y)
with respect to which the applicable statute of limitations has not expired or
(z) that has been previously deferred, are adequate to satisfy any assessment
for such Taxes for any such years.

 

 

 

 

13 

 

 

(c) Audits, Investigations or Claims. There is no dispute or claim which has not
been resolved concerning any Tax liability of MMT either (A) claimed or raised
by any Taxing authority in writing or (B) as to which any of the directors and
officers (and employees responsible for Tax matters) of MMT has Knowledge. There
is no currently pending audit of any Tax Return of MMT by any Taxing authority,
and MMT has not ever been notified in writing that any Taxing authority intends
to audit any Tax Return of MMT. MMT has not executed any outstanding waivers or
consents regarding the application of the statute of limitations with respect to
any Taxes or Tax Returns.

 

(d) Lien. There are no encumbrances for Taxes (other than for current Taxes not
yet due and payable) on any assets of MMT.

 

(e) Tax Elections. MMT (i) has not agreed, or are required, to make any
adjustment under Section 481(a) of the Code by reason of a change in accounting
method or otherwise; (ii) have not made an election pursuant to Code Sections
338 or 336(e) or the regulations thereunder or any comparable provisions of any
foreign or state or local income tax law; (iii) is not subject to any
constructive elections under Code Section 338 or the regulations thereunder;
(iv) has not made any payments, are obligated to make any payments, or are a
party to any agreement that under certain circumstances could obligate it to
make any payments that will not be deductible under §280G and §162(m) of the
Code; and (v) has not made any of the foregoing elections or are required to
apply any of the foregoing rules under any comparable state or local income Tax
provision.

 

(f) Prior Affiliated Groups. MMT (A) has never been a member of an affiliated
group of corporations within the meaning of Section 1504 of the Code and (B)
does not have any liability for the Taxes of any person under Treas. Reg.
§1502-6 (or any similar provision of state, local or foreign law), as a
transferee or successor, by contract or otherwise.

 

(g) Tax Sharing Agreements. MMT is not a party to any Tax allocation, indemnity
or sharing or similar agreement.

 

(h) Section 355. MMT has not distributed the stock of a “controlled corporation”
(within the meaning of that term as used in Section 355(a) of the Code) in a
transaction subject to Section 355 of the Code within the past two years.

 

(i) Partnerships. MMT does not own an interest in a partnership for Tax
purposes.

 

3.18 Environmental Matters. (i) MMT is in compliance in all material respects
with applicable Environmental Laws; (ii) MMT has all Permits required pursuant
to Environmental Laws and are in compliance in all material respects with the
terms thereof; (iii) there are no past or present events, activities, practices,
incidents, actions or plans in connection with the operations of MMT which have
given rise to or are reasonably likely to give rise to any liability on the part
of MMT under any Environmental Law; (iv) MMT has not generated, used,
transported, treated, stored, released or disposed of, or has suffered or
permitted anyone else to generate, use, transport, treat, store, release or
dispose of any Hazardous Substance in violation of any Environmental Laws; and
(v) there has not been any generation, use, transportation, treatment, storage,
release or disposal of any Hazardous Substance in connection with the conduct of
the business of MMT or the use of any property or facility by MMT, or to the
Knowledge of MMT, any nearby or adjacent properties, in each case, which has
created or might reasonably be expected to create any material liability under
any Environmental Law or which would require reporting to or notification of any
Governmental Body.

 

3.19 Real Property. MMT has not owned any real property or any interest in any
real property.

 

3.20 Broker’s Fees. No broker, finder, agent or similar intermediary has acted
on behalf of MMT in connection with this Agreement or the Transaction, and there
are no brokerage commissions, finders’ fees or similar fees or commissions
payable in connection therewith based on any agreement, arrangement or
understanding with MMT.

 

 

 

 

14 

 

 

3.21 Labor Matters. MMT is not now, and has not been in the last five years,
bound by or party to any collective bargaining agreement and, to the Knowledge
of MMT, no application for certification of a collective bargaining agent is
pending. MMT is in compliance with all Applicable Laws applicable to MMT
affecting employment practices and terms and conditions of employment.

 

3.22 Full Disclosure. This Agreement (including the information contained in the
disclosure schedules) and the Reports, do not (i) with respect to MMT, contain
any representation, warranty or information that is false or misleading with
respect to any material fact, or (ii) with respect to MMT, omit to state any
material fact necessary in order to make the representations, warranties and
information contained herein (including the information contained in the
disclosure schedules) and the Reports, in the context in which made or provided,
not false or misleading.

 

ARTICLE IV

 

CONDUCT PRIOR TO THE EFFECTIVE TIME

 

4.1 Conduct of Business by SN and MMT. During the period from the date of this
Agreement and continuing until the earlier of the termination of this Agreement
pursuant to its terms or the Closing Date (as herein defined), the Shareholders,
on behalf of SN, and MMT shall, except to the extent that the other party shall
otherwise consent in writing, carry on its business in the usual, regular and
ordinary course consistent with past practices, in substantially the same manner
as heretofore conducted and in compliance with all applicable laws and
regulations (except where noncompliance would not have a Material Adverse
Effect), pay its debts and taxes when due subject to good faith disputes over
such debts or taxes, pay or perform other material obligations when due, and use
its commercially reasonable efforts consistent with past practices and policies
to (i) preserve substantially intact its present business organization, (ii)
keep available the services of its present managers, officers and employees, and
(iii) preserve its relationships with customers, suppliers, distributors,
licensors, licensees, and others with which it has significant business
dealings. In addition, except as permitted or required by the terms of this
Agreement, without the prior written consent of the other party, during the
period from the date of this Agreement and continuing until the earlier of the
termination of this Agreement pursuant to its terms or the Closing, SN and MMT
shall not do any of the following:

 

(a) Waive any stock repurchase rights, accelerate, amend or change the period of
exercisability of options or restricted stock, or reprice options granted under
any employee, consultant, director or other stock plans or authorize cash
payments in exchange for any options granted under any of such plans;

 

(b) Grant any severance or termination pay to any officer or employee except
pursuant to applicable law, written agreements outstanding, or policies existing
on the date hereof and as previously or concurrently disclosed in writing or
made available to the other party, or adopt any new severance plan, or amend or
modify or alter in any manner any severance plan, agreement or arrangement
existing on the date hereof;

 

(c) Transfer or license to any person or otherwise extend, amend or modify any
material rights to any Intellectual Property of SN or MMT, or enter into grants
to transfer or license to any person future patent rights, other than in the
ordinary course of business consistent with past practices provided that in no
event shall SN or MMT license on an exclusive basis or sell any Intellectual
Property of SN or MMT, as applicable;

 

(d) Declare, set aside or pay any dividends on or make any other distributions
(whether in cash, stock, equity securities or property) in respect of any
capital stock or split, combine or reclassify any capital stock or issue or
authorize the issuance of any other securities in respect of, in lieu of or in
substitution for any capital stock;

 

(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of
capital stock or Shareholders interest of SN and MMT, as applicable;

 

 

 

 

15 

 

 

(f) Issue, deliver, sell, authorize, pledge or otherwise encumber, or agree to
any of the foregoing with respect to, any shares of capital stock, or any
securities convertible into or exchangeable for shares of capital stock, or
subscriptions, rights, warrants or options to acquire any shares of capital
stock or any securities convertible into or exchangeable for shares of capital
stock or Shares, or enter into other agreements or commitments of any character
obligating it to issue any such shares of capital stock, shares or convertible
or exchangeable securities;

 

(g) Except as provided herein or as disclosed to the other party, amend its
Charter Documents;

 

(h) Acquire or agree to acquire by merging or consolidating with, or by
purchasing any equity interest in or a portion of the assets of, or by any other
manner, any business or any corporation, partnership, association or other
business organization or division thereof, or otherwise acquire or agree to
acquire any assets which are material, individually or in the aggregate, to the
business of MMT or SN, as applicable, or enter into any joint ventures,
strategic partnerships or alliances or other arrangements that provide for
exclusivity of territory or otherwise restrict such party's ability to compete
or to offer or sell any products or services;

 

(i) Sell, lease, license, encumber or otherwise dispose of any properties or
assets, except sales of inventory in the ordinary course of business consistent
with past practice and, except for the sale, lease or disposition (other than
through licensing) of property or assets which are not material, individually or
in the aggregate, to the business of such party;

(j) Incur any indebtedness for borrowed money in excess of $1,000 in the
aggregate, except for indebtedness incurred in connection with the purchase of
endoscopy equipment, or guarantee any such indebtedness of another person, issue
or sell any debt securities or options, warrants, calls or other rights to
acquire any debt securities of MMT or SN, as applicable, enter into any "keep
well" or other agreement to maintain any financial statement condition or enter
into any arrangement having the economic effect of any of the foregoing;

 

(k) Adopt or amend any employee benefit plan, policy or arrangement, any
employee stock purchase or employee stock option plan, or enter into any
employment contract or collective bargaining agreement (other than offer letters
and letter agreements entered into in the ordinary course of business consistent
with past practice with employees who are terminable "at will"), pay any special
bonus or special remuneration to any manager, director or employee, or increase
the salaries or wage rates or fringe benefits (including rights to severance or
indemnification) of its managers, directors, officers, employees or consultants,
except in the ordinary course of business consistent with past practices;

 

(l) (i) pay, discharge, settle or satisfy any claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise), or
litigation (whether or not commenced prior to the date of this Agreement) other
than the payment, discharge, settlement or satisfaction, in the ordinary course
of business consistent with past practices or in accordance with their terms, or
liabilities recognized or disclosed in the most recent financial statements (or
the notes thereto) of SN or of MMT, as applicable, or incurred since the date of
such financial statements, or (ii) waive the benefits of, agree to modify in any
manner, terminate, release any person from or knowingly fail to enforce any
confidentiality or similar agreement to which SN is a party or of which SN is a
beneficiary or to which MMT is a party or of which MMT is a beneficiary, as
applicable;

 

(m) Except in the ordinary course of business consistent with past practices,
modify, amend or terminate any Contract of SN or MMT, as applicable, or other
material contract or material agreement to which SN or MMT is a party or waive,
delay the exercise of, release or assign any material rights or claims
thereunder;

 

(n) Except as appropriate to fairly represent SN’s financial condition or
results of operations, revalue any of its assets or adjust its revenue or
expenses;

 

 

 

 

16 

 

 

(o) Incur or enter into any agreement, contract or commitment requiring such
party to pay in excess of $10,000 in any 12 month period;

 

(p) Settle any litigation for a total sum of greater than $10,000;

 

(q) Make or rescind any Tax elections that, individually or in the aggregate,
could be reasonably likely to adversely affect in any material respect the Tax
liability or Tax attributes of such party, settle or compromise any material
income tax liability or, except as required by applicable law, materially change
any method of accounting for Tax purposes or prepare or file any Return in a
manner inconsistent with past practice;

 

(r) Form, establish or acquire any Subsidiary;

 

(s) Permit any Person to exercise any of its discretionary rights under any Plan
to provide for the automatic acceleration of any outstanding options, the
termination of any outstanding repurchase rights or the termination of any
cancellation rights issued pursuant to such plans; or

 

(t) Agree in writing or otherwise agree, commit or resolve to take any of the
actions described in Section 4.1 (a) through (s) above.

 

ARTICLE V

 

ADDITIONAL AGREEMENTS

 

5.1. Compliance with Laws. The Shareholders, SN and MMT shall cooperate with
each other and use their respective reasonable best efforts to take or cause to
be taken all actions, and do or cause to be done all things, necessary, proper
or advisable on their part under this Agreement and applicable laws to
consummate the Transaction and the other transactions contemplated hereby as
soon as practicable, including preparing and filing as soon as practicable of
all documentation to effect all necessary notices, reports and other filings and
to obtain as soon as practicable all consents, registrations, approvals, permits
and authorizations necessary or advisable to be obtained from any third party
and/or any Governmental Entity in order to consummate the Transaction or any of
the other transactions contemplated hereby. Subject to applicable laws relating
to the exchange of information and the preservation of any applicable
attorney-client privilege, work-product doctrine, self-audit privilege or other
similar privilege, each of the Shareholders and MMT shall have the right to
review and comment on in advance, and to the extent practicable each will
consult the other on, all the information relating to such party, and any
Subsidiaries, that appear in any filing made with, or written materials
submitted to, any third party and/or any Governmental Entity in connection with
the Transaction and the other transactions contemplated hereby. In exercising
the foregoing right, each of the parties hereto shall act reasonably and as
promptly as practicable.

 

5.2 Required Information. The Shareholders, on behalf of SN, and MMT each shall,
upon request by the other, furnish the other with all information concerning
themselves, their respective Subsidiaries, managers, directors, officers and
Shareholders and such other matters as may be reasonably necessary or advisable
in connection with the Transaction, or any other statement, filing, notice or
application made by or on behalf of SN and MMT to any third party and/or any
Governmental Entity in connection with the Transaction and the other
transactions contemplated hereby. Each party warrants and represents to the
other party that all such information shall be true and correct in all material
respects and will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading.

 

 

 

 

17 

 

 

5.3 Reasonable Efforts; Notification.

 

(a) Upon the terms and subject to the conditions set forth in this Agreement,
each of the parties agrees to use its commercially reasonable efforts to take,
or cause to be taken, all actions, and to do, or cause to be done, and to assist
and cooperate with the other parties in doing, all things necessary, proper or
advisable to consummate and make effective, in the most expeditious manner
practicable, the Transaction and the other transactions contemplated by this
Agreement, including using commercially reasonable efforts to accomplish the
following: (i) the taking of all reasonable acts necessary to cause the
conditions precedent set forth in Article VI to be satisfied, (ii) the obtaining
of all necessary actions or non-actions, waivers, consents, approvals, orders
and authorizations from Governmental Entities and the making of all necessary
registrations, declarations and filings (including registrations, declarations
and filings with Governmental Entities, if any) and the taking of all reasonable
steps as may be necessary to avoid any suit, claim, action, investigation or
proceeding by any Governmental Entity, (iii) the obtaining of all consents,
approvals or waivers from third parties required as a result of the transactions
contemplated in this Agreement, (iv) the defending of any suits, claims,
actions, investigations or proceedings, whether judicial or administrative,
challenging this Agreement or the consummation of the transactions contemplated
hereby, including seeking to have any stay or temporary restraining order
entered by any court or other Governmental Entity vacated or reversed, and (v)
the execution or delivery of any additional instruments reasonably necessary to
consummate the transactions contemplated by, and to fully carry out the purposes
of, this Agreement. In connection with and without limiting the foregoing, if
any takeover statute or similar statute or regulation is or becomes applicable
to the Transaction, this Agreement or any of the transactions contemplated by
this Agreement, the parties hereto shall use commercially reasonable efforts to
enable the Transaction and the other transactions contemplated by this Agreement
to be consummated as promptly as practicable on the terms contemplated by this
Agreement. Notwithstanding anything herein to the contrary, nothing in this
Agreement shall be deemed to require either of the parties hereto to agree to
any divestiture by itself or any of its affiliates of shares of capital stock,
Shareholders interest or of any business, assets or property, or the imposition
of any material limitation on the ability of any of them to conduct their
business or to own or exercise control of such assets, properties and stock.

 

(b) The Shareholders agree to monitor and amend the Disclosure Schedule through
Closing as information becomes available which warrants inclusion in the
Disclosure Schedule.

 

(c) MMT shall give prompt notice to the Shareholders upon becoming aware that
any representation or warranty made by it contained in this Agreement has become
untrue or inaccurate, or of any failure of MMT to comply with or satisfy in any
material respect any covenant, condition or agreement to be complied with or
satisfied by it under this Agreement, in each case, such that the conditions set
forth in Article VI would not be satisfied; provided, however, that no such
notification shall affect the representations, warranties, covenants or
agreements of the parties or the conditions to the obligations of the parties
under this Agreement.

 

5.4 Business Records. At Closing, SN shall cause to be delivered to MMT all
records and documents relating to SN including, without limitation, books,
records, government filings, Returns, Charter Documents, Corporate Records,
Stock Records, consent decrees, orders, and correspondence, director and
stockholder minutes and resolutions, stock ownership records, financial
information and records, electronic files containing any financial information
and records, and other documents used in or associated with SN ("Business
Records").

 

5.5 Employment Agreement. At Closing MMT and Josh Haupt shall enter into an
employment agreement for Josh Haupt to serve as Chief Cultivation Officer of
Medicine Man Consulting, Inc. following the Effective Date. A copy of the
Employment Agreement is attached as Exhibit “A” to this Agreement and
incorporated herein as if set forth.

 

 

 

 

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ARTICLE VI

 

CONDITIONS TO THE TRANSACTION

 

6.1 Conditions to Obligations of Each Party to Effect the Transaction. The
respective obligations of each party to this Agreement to effect the Transaction
shall be subject to the satisfaction at or prior to the Closing Date of the
following conditions:

 

(a) No Order. No Governmental Entity shall have enacted, issued, promulgated,
enforced or entered any statute, rule, regulation, executive order, decree,
injunction or other order (whether temporary, preliminary or permanent) which is
in effect and which has the effect of making the Transaction illegal or
otherwise prohibiting consummation of the Transaction, substantially on the
terms contemplated by this Agreement. All waiting periods, if any, in any
jurisdiction in which SN or MMT has material operations relating to the
transactions contemplated hereby will have expired or terminated early.

 

(b) Failure to Deliver Audit. SN shall fail to deliver the independent audit of
its financial statements discussed above in Section 2.10.

 

6.2 Additional Conditions to Obligations of Shareholders. The obligations of the
Shareholders to consummate and effect the Transaction shall be subject to the
satisfaction at or prior to the Closing Date of each of the following
conditions, any of which may be waived, in writing, exclusively by the
Shareholders:

 

(a) Representations and Warranties. Each representation and warranty of MMT
contained in this Agreement (i) shall have been true and correct as of the date
of this Agreement and (ii) shall be true and correct on and as of the Closing
Date with the same force and effect as if made on the Closing Date.

 

(b) Agreements and Covenants. MMT shall have performed or complied in all
material respects with all agreements and covenants required by this Agreement
to be performed or complied with by them on or prior to the Closing Date, except
to the extent that any failure to perform or comply (other than a willful
failure to perform or comply or failure to perform or comply with an agreement
or covenant reasonably within the control of MMT) does not, or will not,
constitute a Material Adverse Effect with respect to MMT taken as a whole.

 

(c) Consents. MMT shall have obtained all consents, waivers and approvals
required in connection with the consummation of the transactions contemplated
hereby, other than consents, waivers and approvals the absence of which, either
alone or in the aggregate, could not reasonably be expected to have a Material
Adverse Effect on MMT taken as a whole.

 

(d) Material Adverse Effect. No Material Adverse Effect with respect to MMT
shall have occurred since the date of this Agreement.

 

(e) Other Deliveries. At Closing, MMT shall have delivered to the Shareholders:
(i) certificates representing the MMT Shares of Common Stock to Shareholders in
accordance with Section 1.4, (ii) the Employment Agreement in the form attached
as Exhibit “A”, and (iii) such other documents or certificates as shall
reasonably be required by the Shareholders and their counsel in order to
consummate the transactions contemplated hereunder.

 

 

 

 

19 

 

 

6.3 Additional Conditions to the Obligations of MMT. The obligations of MMT to
consummate and effect the Transaction shall be subject to the satisfaction at or
prior to the Closing Date of each of the following conditions, any of which may
be waived, in writing, exclusively by MMT:

 

(a) Representations and Warranties. Each representation and warranty of the
Shareholders contained in this Agreement (i) shall have been true and correct as
of the date of this Agreement and (ii) shall be true and correct on and as of
the Effective Date with the same force and effect as if made on and as of the
Closing.

 

(b) Agreements and Covenants. The Shareholders shall have performed or complied
in all material respects with all agreements and covenants required by this
Agreement to be performed or complied with by them at or prior to the Closing
Date except to the extent that any failure to perform or comply (other than a
willful failure to perform or comply or failure to perform or comply with an
agreement or covenant reasonably within the control of Shareholders) does not,
or will not, constitute a Material Adverse Effect on SN.

 

(c) Consents. SN shall have obtained all consents, waivers and approvals
required in connection with the consummation of the transactions contemplated
hereby, other than consents, waivers and approvals the absence of which, either
alone or in the aggregate, could not reasonably be expected to have a Material
Adverse Effect on SN.

 

(d) Material Adverse Effect. No Material Adverse Effect with respect to SN shall
have occurred since the date of this Agreement.

 

(e) Other Deliveries. At Closing, the Shareholders shall have delivered to MMT:
(i) certificates representing the Shares owned by the Shareholders, together
with stock powers or other assignments or documents to effectuate transfer of
the SN Shares in accordance with Section 1.3; (ii) evidence of properly
conducted meetings or legally authorized consents of SN’s Shareholders and
Directors authorizing the matters referenced herein, including the approval of
the share exchange herein; and (iii) such other documents or certificates as
shall reasonably be required by MMT and its counsel in order to consummate the
transactions contemplated hereunder.

 

6.4 Additional Conditions to the Obligations of SN and Shareholders. The
obligations of SN and Shareholders to consummate and effect the Transaction
shall be subject to the satisfaction at or prior to the Effective Date of each
of the following conditions, any of which may be waived, in writing, exclusively
by SN and Shareholders:

 

(a) Representations and Warranties. Each representation and warranty of MMT
contained in this Agreement (i) shall have been true and correct as of the date
of this Agreement and (ii) shall be true and correct on and as of the Effective
Date with the same force and effect as if made on and as of the Closing.

 

(b) Agreements and Covenants. MMT shall have performed or complied in all
material respects with all agreements and covenants required by this Agreement
to be performed or complied with by them at or prior to the Effective Date
except to the extent that any failure to perform or comply (other than a willful
failure to perform or comply or failure to perform or comply with an agreement
or covenant reasonably within the control of MMT) does not, or will not,
constitute a Material Adverse Effect on MMT.

 

(c) Consents. MMT shall have obtained all consents, waivers and approvals
required in connection with the consummation of the transactions contemplated
hereby, other than consents, waivers and approvals the absence of which, either
alone or in the aggregate, could not reasonably be expected to have a Material
Adverse Effect on MMT.

 

 

 

20 

 

 

(d) Material Adverse Effect. No Material Adverse Effect with respect to MMT
shall have occurred since the date of this Agreement.

 

(e) Other Deliveries. At Closing, MMT shall have delivered to SN and the
Shareholders: (i) the stock certificates for the MMT Shares (ii) such other
documents or certificates as shall reasonably be required by SN and its counsel
in order to consummate the transactions contemplated hereunder.

 

6.5 Shareholders’ Indemnification Obligation with Respect to Representations.
The Shareholders hereby indemnify and hold harmless, and agree to indemnify and
hold harmless (from and after the Closing) MMT and its respective directors,
officers, Shareholders, employees and agents (collectively, the "MMT Indemnified
Parties") against (i) any and all liabilities, obligations, losses, damages,
claims, actions, Liens and deficiencies which exist, or which may be imposed on,
incurred by or asserted against any one or more of the MMT Indemnified Parties
based upon, resulting from or arising out of, or as to which there was, any
breach or inaccuracy of any representation or warranty contained in Article II
of this Agreement by the Shareholders which is not set forth on the Disclosure
Schedule, or any statement, agreement or covenant made by the Shareholders in or
pursuant to this Agreement, any Exhibit or Schedule hereto or thereto, or any
certificate or document delivered by such Shareholders at the Closing, and (ii)
any cost or expense (including reasonable attorneys' fees and court costs)
incurred by the MMT Indemnified Parties or any of them in connection with the
foregoing (including, without limitation, any cost or expense incurred by the
MMT Indemnified Parties in enforcing their rights pursuant to this Section 6.5)
(collectively, the "Damages" for purposes of this Section 6.5).

 

An MMT Indemnified Party may apply all demands or claims for indemnification
under this Article against any payment to be made by or on behalf of such MMT
Indemnified Party or any of its Affiliates to or for the account of the
Shareholders by means of set-off, reduction or otherwise. No MMT Indemnified
Party shall be required to make any claim or demand against any other Person
prior to the making of any claim or demand for indemnification or at any other
time. The rights of the MMT Indemnified Parties under this Section 6.5 are in
addition to such other rights and remedies which they may have under this
Agreement or otherwise. The amount of any and all Damages suffered by MMT
Indemnified Parties under this Section 6.5 shall be recovered, and all claims of
MMT Indemnified Parties pursuant to this Section 6.5 shall be brought by MMT on
behalf of such MMT Indemnified Parties.

 

Notwithstanding any other provision of this Agreement, no demand or claim for
indemnification under this Section 6.5 may be made (i) after the date six (6)
months following the Closing Date, or (ii) if such claim or demand is covered by
existing MMT or SN business insurance policy(ies).

 

For purposes of this Agreement, (1) the term "Misrepresentation Claim" means a
claim or demand for indemnification based upon, resulting from or arising out of
any material breach or inaccuracy of a warranty or representation and such
material breach or inaccuracy was the direct and primary cause of the Damages
for which indemnification is sought; and (2) the term "Knowledge" means in
respect of any Misrepresentation Claim, as of the Closing Date or at any time
prior thereto, (a) actual knowledge by one of the Shareholders of the material
breach or inaccuracy upon which such Misrepresentation Claim is based or (b)
actual knowledge of facts which would cause a reasonable person, having
knowledge and a full understanding of the terms of this Agreement, to be aware
of or recognize the material breach or inaccuracy upon which the
Misrepresentation Claim is based.

 

 

 

 

21 

 

 

6.6 Indemnification Obligation with Respect to MMT Representations. MMT hereby
indemnifies and hold harmless, and agree to indemnify and hold harmless, the
Shareholders, and their respective heirs, representatives and agents
(collectively, the “Shareholders Indemnified Parties”) from and after the
Closing, against (i) any and all liabilities, obligations (including Guaranty
Obligations, as defined below), losses, damages, claims, actions, Liens and
deficiencies which exist, or which may be imposed on, incurred by or asserted
against any one or more of the Shareholders Indemnified Parties, based upon,
resulting from or arising out of, or as to which there was, any breach or
inaccuracy of any representation or warranty by MMT contained in this Agreement,
or any agreement or covenant made by MMT in or pursuant to this Agreement, or in
any Exhibit or Schedule hereto or thereto, or any certificate or document
delivered by MMT at the Closing hereof, whether caused by the actions or
inactions MMT following Closing), and (ii) any cost or expense (including
reasonable attorneys' fees and court costs) incurred by the Shareholders
Indemnified Parties in connection with the foregoing (including, without
limitation, any cost or expense incurred by the Shareholders Indemnified Parties
in enforcing his rights pursuant to this Section 6.6) (collectively, the
"Damages").

 

MMT’s indemnification obligation set forth in this Section 6.6 extends to any
personal guaranty of any SN obligation by either of the Shareholders (“Guaranty
Obligations”). As such, MMT shall (i) pay off the Wells Fargo LOC at Closing,
and (ii) make reasonable efforts to remove the Shareholders as personal
guarantor(s) of any SN obligations. Furthermore, in the event that any assets of
either Shareholder are posted as security for any SN obligation, MMT shall also
make reasonable efforts to pay off such obligation or shall post its own assets
to replace those posted by Shareholders.

 

The Shareholders Indemnified Parties shall not be required to make any claim or
demand against any other Person prior to the making of any claim or demand for
indemnification or at any other time. The rights of the Shareholders Indemnified
Parties under this Section 6.6 are in addition to such other rights and remedies
which they may have under this Agreement or otherwise.

 

Notwithstanding any other provision of this Agreement, except for any
Misrepresentation Claim with respect to which MMT had Knowledge, no demand or
claim for indemnification under this Section 6.6 may be made after six (6)
months following the Closing Date. No demand or claim for indemnification under
this Section 6.6 for any Misrepresentation Claim may be made after the first
anniversary of the Closing Date if MMT had Knowledge with respect to such
Misrepresentation Claim.

 

6.7 Procedure for Indemnification Claims.

 

(a) The MMT Indemnified Parties and the Shareholders Indemnified Parties are
referred to collectively herein as "Indemnified Parties", and the Persons from
whom indemnification is sought pursuant to this Article VI are referred to
herein as "Indemnifying Parties."

 

(b) If at any time an Indemnified Party determines to assert a right to
indemnification hereunder, the Indemnified Party shall give to the Indemnifying
Party written notice describing the matter for which indemnification is sought
in reasonable detail. In the event that a demand or claim for indemnification is
made hereunder with respect to a matter the amount or extent of which is not yet
known or certain, the notice of demand for indemnification shall so state, and,
where practicable, shall include an estimate of the amount of the matter. The
failure of an Indemnified Party to give notice of any matter to the Indemnifying
Party shall not relieve the Indemnifying Party of any liability that the
Indemnifying Party may have to any Indemnified Party.

 

 

 

 

22 

 

 

(c) Within 15 days after receipt of the notice referred to in clause (b) above,
the Indemnifying Party from whom indemnification is sought shall (i) if true,
acknowledge in writing his responsibility for all or part of such matter, and
shall pay or otherwise satisfy the portion of such matter as to which
responsibility is acknowledged or take such other action as is reasonably
satisfactory to the Indemnified Party to resolve any such matter that involves
anyone not a party hereto, or (ii) give written notice to the Indemnified Party
of his intention to dispute or contest all or part of such responsibility. Upon
delivery of such notice of intention to contest, the parties shall negotiate in
good faith to resolve as promptly as possible any dispute as to responsibility
for, or the amount of, any such matter. Failure to respond to a notice claiming
indemnification shall be deemed a denial of responsibility therefore.

 

(d) In the event that the Indemnified Party is required to expend any amount in
enforcing his, her or its rights of indemnification hereunder, the Indemnifying
Parties will, jointly and severally, promptly upon request, pay such amounts to
the Indemnified Party if indemnification is required to be made hereunder.

 

(e) Each Indemnifying Party shall have the right to employ separate counsel in
any action or claim which is brought against any Indemnified Party in respect of
which indemnity may be sought from it, and to participate in the defense of such
action or claim, if such Indemnifying Party confirms in writing its
responsibility for such action or claim; provided, however, that (i) the
Indemnified Party or Parties shall retain control of such action or claim and
(ii) the fees and expenses of such separate counsel shall be at the expense of
the Indemnifying Party.

 

ARTICLE VII

 

TERMINATION, AMENDMENT AND WAIVER

 

7.1 Termination. This Agreement may be terminated at any time prior to the
Closing:

 

(a) by mutual written agreement of MMT and the Shareholders;

 

(b) by either MMT or the Shareholders if the Transaction shall not have been
consummated by ________________, 2017 (“Closing Deadline”) for any reason;

 

(c) by either MMT or the Shareholders if a Governmental Entity shall have issued
an order, decree or ruling or taken any other action, in any case having the
effect of permanently restraining, enjoining or otherwise prohibiting the
Transaction, which order, decree, ruling or other action is final and
nonappealable;

 

(d) by the Shareholders, upon a material breach of any representation, warranty,
covenant or agreement on the part of MMT set forth in this Agreement, or if any
representation or warranty of MMT shall have become materially untrue, in either
case such that the conditions set forth in Section 6.2(a) or Section 6.2(b)
would not be satisfied as of the time of such breach or as of the time such
representation or warranty shall have become untrue, provided, that if such
inaccuracy in MMT's representations and warranties or breach by MMT is curable
by MMT prior to the Closing Date, then the Shareholders may not terminate this
Agreement under this Section 7.1(d) for thirty (30) days after delivery of
written notice from Shareholders to MMT of such breach, provided MMT continues
to exercise commercially reasonable efforts to cure such breach (it being
understood that Shareholders may not terminate this Agreement pursuant to this
Section 7.1(d) if they shall have also materially breached this Agreement or if
such breach by MMT is cured during such thirty (30)-day period); or

 

 

 

 

23 

 

 

(e) by MMT, upon a material breach of any representation, warranty, covenant or
agreement on the part of the Shareholders set forth in this Agreement, or if any
representation or warranty of the Shareholders shall have become materially
untrue, in either case such that the conditions set forth in Section 6.3(a) or
Section 6.3(b) would not be satisfied as of the time of such breach or as of the
time such representation or warranty shall have become untrue, provided, that if
such inaccuracy in the Shareholders' representations and warranties or breach by
the Shareholders is curable by the Shareholders prior to the Closing Date, then
MMT may not terminate this Agreement under this Section 7.1(e) for thirty (30)
days after delivery of written notice from MMT to the Shareholders of such
breach, provided the Shareholders continue to exercise commercially reasonable
efforts to cure such breach (it being understood that MMT may not terminate this
Agreement pursuant to this Section 7.1(e) if it shall have materially breached
this Agreement or if such breach by the Shareholders is cured during such thirty
(30)-day period).

 

(f) by MMT, in its sole and absolute discretion, if following the Effective
Date, the net assets or the annual revenue of SN as included in the independent
audit of SN to be provided within seventy (70) days from the Effective Date,
deviate by more than ten percent (10%) from the unaudited financial information
provided by SN pursuant to Section 2.10 herein.

 

7.2 Notice of Termination; Effect of Termination. Any termination of this
Agreement under Section 7.1 above will be effective immediately upon (or, if the
termination is pursuant to Section 7.1(d) or Section 7.1(e) and the proviso
therein is applicable, thirty (30) days after the party in breach fails to cure
the breach) the delivery of written notice of the terminating party to the other
parties hereto. In the event of the termination of this Agreement as provided in
Section 7.1, this Agreement shall be of no further force or effect and the
Transaction shall be abandoned, except (i) as set forth in this Section 7.2,
Section 7.3 and Article VIII (General Provisions), each of which shall survive
the termination of this Agreement, and (ii) nothing herein shall relieve any
party from liability for any intentional or willful breach of this Agreement.

 

7.3 Fees and Expenses. All fees and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such expenses whether or not the Transaction is consummated.

 

7.4 Amendment. This Agreement may be amended by the parties hereto at any time
by execution of an instrument in writing signed on behalf of each of MMT, SN and
the Shareholders.

 

7.5 Extension; Waiver. At any time prior to the Closing, any party hereto may,
to the extent legally allowed, (i) extend the time for the performance of any of
the obligations or other acts of the other parties hereto, (ii) waive any
inaccuracies in the representations and warranties made to such party contained
herein or in any document delivered pursuant hereto, and (iii) waive compliance
with any of the agreements or conditions for the benefit of such party contained
herein. Any agreement on the part of a party hereto to any such extension or
waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party. Delay in exercising any right under this Agreement shall
not constitute a waiver of such right.

 

ARTICLE VIII

 

GENERAL PROVISIONS

 

8.1 Notices. All notices and other communications hereunder shall be in writing
and shall be deemed given if delivered personally or by commercial delivery
service, or sent via telecopy (receipt confirmed) to the parties at the
addresses indicated above, or such other address as a party may so designate in
the future, in writing.

 

 

 

24 

 

 

8.2 Interpretation.

 

(a) When a reference is made in this Agreement to Exhibits, such reference shall
be to an Exhibit to this Agreement unless otherwise indicated. When a reference
is made in this Agreement to Sections, such reference shall be to a Section of
this Agreement. Unless otherwise indicated the words "include," "includes" and
"including" when used herein shall be deemed in each case to be followed by the
words "without limitation." The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

 

(b) For purposes of this Agreement, the term "Material Adverse Effect" when used
in connection with an entity means any change, event, violation, inaccuracy,
circumstance or effect, individually or when aggregated with other changes,
events, violations, inaccuracies, circumstances or effects, that is materially
adverse to the business, assets (including intangible assets), revenues,
financial condition or results of operations of such entity, if any, taken as a
whole, it being understood that neither of the following alone or in combination
shall be deemed, in and of itself, to constitute a Material Adverse Effect: (a)
changes attributable to the public announcement or pendency of the transactions
contemplated hereby, (b) changes in general national or regional economic
conditions, or (c) changes affecting the industry generally in which SN or MMT
operate.

 

(c) For purposes of this Agreement, the term "Person" shall mean any individual,
corporation (including any non-profit corporation), general partnership, limited
partnership, limited liability partnership, joint venture, estate, trust,
company (including any limited liability company or joint stock company), firm
or other enterprise, association, organization, entity or Governmental Entity.

 

8.3 Counterparts Facsimile Execution. For purposes of this Agreement, a document
(or signature page thereto) signed and transmitted electronically or by
facsimile machine or telecopier is to be treated as an original document. The
signature of any party thereon, for purposes hereof, is to be considered as an
original signature, and the document transmitted is to be considered to have the
same binding effect as an original signature on an original document. At the
request of any party, an electronic, facsimile or telecopy document is to be
re-executed in original form by the parties who executed the facsimile or
telecopy document. No party may raise the use of a computer, facsimile machine
or telecopier machine as a defense to the enforcement of the Agreement or any
amendment or other document executed in compliance with this Section.

 

8.4 Entire Agreement; Third Party Beneficiaries. This Agreement and the
documents and instruments and other agreements among the parties hereto as
contemplated by or referred to herein, including the Schedules hereto constitute
the entire agreement among the parties with respect to the subject matter hereof
and supersede all prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof.

 

8.5 Severability. In the event that any provision of this Agreement, or the
application thereof, becomes or is declared by a court of competent jurisdiction
to be illegal, void or unenforceable, the remainder of this Agreement will
continue in full force and effect and the application of such provision to other
persons or circumstances will be interpreted so as reasonably to effect the
intent of the parties hereto. The parties further agree to replace such void or
unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve, to the extent possible, the economic, business and other
purposes of such void or unenforceable provision.

 

8.6 Survival. All representations, warranties, agreements and covenants
contained in or made pursuant to this Agreement, or any Exhibit or Schedule
hereto or thereto or any certificate delivered at the Closing, shall survive
(and not be affected by) the Closing, but all claims made by virtue of such
representations, warranties, agreements and covenants shall be made under, and
subject to the limitations set forth in this Article VIII.

 

 

 

 

25 

 

 

8.7 Other Remedies; Specific Performance. Except as otherwise provided herein,
any and all remedies herein expressly conferred upon a party will be deemed
cumulative with and not exclusive of any other remedy conferred hereby, or by
law or equity upon such party, and the exercise by a party of any one remedy
will not preclude the exercise of any other remedy. The parties hereto agree
that irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the parties shall be
entitled to seek an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof in any
court of the United States or any state having jurisdiction, this being in
addition to any other remedy to which they are entitled at law or in equity.

 

8.8 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Colorado, regardless of the laws that
might otherwise govern under applicable principles of conflicts of law thereof.

 

8.9 Rules of Construction. The parties hereto agree that they have been
represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding or rule of
construction providing that ambiguities in an agreement or other document will
be construed against the party drafting such agreement or document.

 

8.10 Assignment. No party may assign either this Agreement or any of his, her or
its rights, interests, or obligations hereunder without the prior written
approval of the other parties. Subject to the first sentence of this Section
8.10, this Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective heirs, successors and permitted assigns.

 

8.11 Attorneys Fees. The prevailing party in any litigation, arbitration,
insolvency or other proceeding (“Proceeding”) relating to the enforcement or
interpretation of this Agreement may recover from the unsuccessful party all
costs, expenses, and attorney’s fees (including expert witness and other
consultants’ fees and costs) relating to or arising out of (a) the Proceeding
(whether or not the Proceeding proceeds to judgment), and (b) any post-judgment
or post-award proceeding including, without limitation, one to enforce or
collect any judgment or award resulting from the Proceeding. All such judgments
and awards shall contain a specific provision for the recovery of all such
subsequently incurred costs, expenses, and attorney’s fees.

 

 

 

 

 

 

 

 

 

(Balance of page intentionally left blank – signature page follows.)

 

 

26 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first written above.

 

MEDICINE MAN TECHNOLOGIES INC.

 

By: s/ Andrew Williams

Andrew Williams, President

 

 

SUCCESS NUTRIENTS, INC.

 

By: s/ Joshua Haupt

Joshua Haupt, President

 

 

SHAREHOLDERS:

 

s/ Nicholas F. Costello

Nicholas F. Costello

 

s/ Angelo Harris

Angelo Harris

 

s/ Terence A. Fitch

Terence A. Fitch

 

s/ Gregory S. Schneider

Gregory S. Schneider

 

s/ Michael J. Walsh

Michael J. Walsh

 

s/ Brent D. Emerson

Brent D. Emerson

 

s/ Gregory E. Gluckman

Gregory E. Gluckman

 

s/ Maxwell J. Statler

Maxwell J. Statler

 

s/ Jorge M. Vivanco

Jorge M. Vivanco

 

 

 

27 

 

 

s/ Brian T. Herrmann

Brian T. Herrmann

 

s/ Paul E. Dowell

Paul E. Dowell

 

s/ Christopher E. Freiboth

Christopher E. Freiboth

 

s/ Brenda Billings

Brenda Billings

 

s/ Paula D. Upton

Paula D. Upton

 

s/ Christopher J. Lynch

Christopher J. Lynch

 

s/ Micah L. Mitchell

Micah L. Mitchell

 

s/ Adam A. Delorme

Adam A. Delorme

 

s/ Sean E. McMechen

Sean E. McMechen

 

s/ Cole R. Marone

Cole R. Marone

 

s/ Scott A. Rickard

Scott A. Rickard

 

 

 

 

 

 

 

28