Exhibit 10.5

 

MERGER AGREEMENT

 

BY AND AMONG

 

MEDICINE MAN TECHNOLOGIES, INC.,

 

MEDICINE MAN CONSULTING INC.

 

and

PONO PUBLICATIONS LTD.

 

 

 

AGREEMENT AND PLAN OF MERGER (“Agreement”) entered into and effective as of
February __, 2017 by and among MEDICINE MAN TECHNOLOGIES, INC., a Nevada
corporation (“MMT”), MEDICINE MAN CONSULTING INC., a Colorado corporation (the
“Merger Sub”) (MMT and the Merger Sub hereinafter jointly referred to as the
“MMT Companies”) and PONO PUBLICATIONS LTD., a Colorado corporation (the
“Company”) (MMT, the Merger Sub and the Company hereinafter jointly referred to
as the “Parties”).

 

WHEREAS, the Parties hereto desire to cause the Company to merge with and into
the Merger Sub, a wholly-owned subsidiary of MMT, with the Merger Sub as the
surviving corporation in such merger (the “Merger”) upon the terms and subject
to the conditions of this Agreement and in accordance with the Colorado Business
Corporation Act (the “CBCA”);

 

WHEREAS, the Board of Directors of the Company has (a) determined that the
Merger is advisable and is fair to and in the best interests of the holders of
its common stock, no par value per share (the “Company Common Stock”), and
(b) approved this Agreement, the Merger and the transactions contemplated hereby
and thereby, and recommended that the holders of the Company Common Stock adopt
this Agreement and approve the Merger;

 

WHEREAS, the Board of Directors of MMT has (a) determined that the Merger is
advisable and is fair to and in the best interests of the holders of its common
stock, par value $.001 per share; (b) approved this Agreement, the Merger and
the transactions contemplated hereby and thereby, and recommended that the
holders of a majority of the MMT issued and outstanding Common Stock adopt this
Agreement and approve the Merger; and (iii) as the sole stockholder of the
Merger Sub, has determined that the Merger is advisable and in the best
interests of Merger Sub and has adopted this Agreement and approved the Merger
and the transactions contemplated hereby and thereby;

 

WHEREAS, holders of a majority of both the Company’s issued and outstanding
securities and MMT’s issued and outstanding securities have agreed to the terms
and condition contained herein and have voted their respective securities in
favor of the adoption of this Agreement and the approval of the Merger;

 

 

 

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WHEREAS, the Parties hereto desire to make certain representations, warranties,
covenants and agreements in respect of the Merger and to prescribe various
conditions thereto, all as hereinafter set forth; and

 

WHEREAS, it is the intention of the Parties that, for United States federal
income tax purposes, (i) the Merger shall constitute a “tax-free reorganization”
within the meaning of Section 368 of the Internal Revenue Code of 1986, as
amended (the “Code”), and (ii) this Agreement shall constitute a “plan of
reorganization” for purposes of Sections 354 and 361 of the Code.

 

NOW, THEREFORE, in consideration of the premises and the mutual representations,
warranties, covenants and agreements contained herein, the Parties hereto,
intending to be legally bound, hereby agree as follows:

 

ARTICLE I

THE MERGER

 

SECTION 1.01 The Merger

 

Upon the terms and subject to the conditions set forth herein and in accordance
with the CBCA, at the Effective Time, the Company shall be merged with and into
the Merger Sub , whereupon the separate corporate existence of the Company shall
cease and the Merger Sub shall continue as the surviving corporation (the
“Surviving Corporation”).

 

SECTION 1.02 Effective Time; Closing

 

As promptly as practicable following the execution of this Agreement,
immediately after the satisfaction of the condition set forth in Article V and
herein, the Parties hereto shall cause the Merger to be consummated by filing a
statement of merger (the “Statement of Merger”) with the Secretary of State of
the State of Colorado, in such form as is required by and executed in accordance
with the CBCA (the “Effective Time”). Immediately prior to the filing of the
Statement of Merger, a closing will be held at the offices of Andrew I. Telsey,
P.C., 12835 E Arapahoe Road, Tower 1 #803, Centennial, CO 80112 (the “Closing”),
or such other place, date and time as the Parties mutually may agree.

 

SECTION 1.03 Effect of the Merger

 

From and after the Effective Time, all the property, rights, privileges, powers
and franchises of the Company and Merger Sub shall vest in the Surviving
Corporation, and all debts, liabilities, obligations, restrictions, disabilities
and duties of each of the Company and Merger Sub shall become the debts,
liabilities, obligations, restrictions, disabilities and duties of the Surviving
Corporation.

 

SECTION 1.04 Certificate of Incorporation; By-Laws.

 

(a)       At or prior to the Effective Time, the articles of incorporation of
the Surviving Corporation shall be the articles of incorporation of the
Surviving Corporation until thereafter changed or amended as provided therein or
by the CBCA.

 

 

 

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(b)       At or prior to the Effective Time, the by-laws of the Surviving
Corporation shall be the by-laws of the Surviving Corporation until thereafter
changed or amended as provided therein or by the CBCA.

 

SECTION 1.05 Directors

 

At the Effective Time, Charles Haupt shall be appointed to the Board of
Directors of both MMT and the MMT Sub. All other officers and directors of both
MMT and the MMT Sub shall remain in place.

 

SECTION 1.06 Tax Consequences

 

The Parties intend that, for United States federal income tax purposes, (a) the
Merger shall constitute a tax-free reorganization within the meaning of Section
368 of the Code, and MMT, Merger Sub and the Company each shall be a party
within the meaning of Section 368(b) of the Code to such reorganization, (b)
this Agreement shall constitute a “plan of reorganization” for purposes of
Sections 354 and 361 of the Code, and (c) the MMT Merger Stock shall be treated
as a “common stock” under Section 305 of the Code.

 

ARTICLE II

MERGER OF PONO INTO MMC; CONVERSION OF SECURITIES

 

SECTION 2.01 Merger.

 

(a)       At the Effective Time the Company shall be merged with and into Merger
Sub, which shall be the Surviving Corporation and the Company shall cease to
then exist. By virtue of the Merger and without any action on the part of the
holder of any shares of Company Stock, MMT or Merger Sub all shares of Company
Common Stock which are issued and outstanding immediately prior to the Effective
Time, shall collectively be converted into an aggregate of Three Million Five
Hundred Thousand Shares of MMT Common Stock, $.001 par value per share (the “MMT
Merger Stock”) on a 35:1 basis equal to such aggregate number of shares of
Company Common Stock.

 

 

 

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(b)       At the Effective Time, each share of Company Stock no longer shall be
deemed outstanding and automatically shall be canceled and retired and shall
cease to exist, and each holder of a certificate representing any such shares of
Company Stock shall cease to have any rights with respect thereto.

 

(c)       At the Effective Time all of the assets and liabilities of the Company
shall be assigned by MMT to the Merger Sub.

 

SECTION 2.02 Issuance of Certificates.

 

(a)       Certificates. As soon as reasonably practicable after the Effective
Time, MMT shall mail to each holder of record a certificate or certificates (the
“Certificates”) that immediately prior to the Effective Time evidenced
outstanding shares of Company Stock which were converted into the right to
receive such holder’s ratable portion of the MMT Merger Stock instructions for
use in effecting the surrender of the Certificates in exchange for such holder’s
ratable portion of the MMT Merger Stock. Upon surrender of a Certificate for
cancellation to MMT or to other agent or agents as may be appointed by MMT,
together with such letter of transmittal, duly executed, and such other
documents as reasonably may be required by MMT, the holder of such Certificate
shall be entitled to receive in exchange therefore the ratable portion of the
MMT Merger Stock into which the shares of Company Stock theretofore evidenced by
such Certificate shall have been converted pursuant to this Agreement, and the
Certificate so surrendered forthwith shall be canceled. In the event of a
transfer of ownership of Company Stock that is not registered in the transfer
records of the Company, delivery may be made to a Person other than the Person
in whose name the Certificate so surrendered is registered, if such Certificate
shall be properly endorsed or otherwise be in proper form for transfer and the
Person requesting such delivery shall pay all transfer and other Taxes required
by reason of the payment to a Person other than the registered holder of such
Certificate or establish to the satisfaction of MMT that such Tax has been paid
or is not applicable. Until surrendered as contemplated by this Section 2.02,
each Certificate shall be deemed at any time after the Effective Time to
represent only the right to receive upon such surrender the ratable portion of
the MMT Merger Stock into which the shares of Company Stock theretofore
evidenced by such Certificate shall have been converted pursuant to Section
2.01. No interest shall be paid or accrue on any MMT Merger Stock payable upon
surrender of any Certificate.

 

(b)       Lost Certificates. If any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the Person claiming
such Certificate to be lost, stolen or destroyed and, if required by MMT, the
posting by such Person of an indemnity bond, in such reasonable amount as the
Surviving Corporation may direct, as collateral security against any claim that
may be made against it with respect to such Certificate, MMT shall issue in
exchange for such lost, stolen or destroyed Certificate the applicable number of
shares of MMT Merger Stock.

 

(c)       Further Assurances. If, at any time after the Effective Time, the
Surviving Corporation shall consider or be advised that any deeds, bills of
sale, assignments, assurances or any other actions or things are necessary or
desirable to vest, perfect or confirm of record or otherwise in the Surviving
Corporation its right, title or interest in, to or under any of the rights,
properties or assets of either of the Merger Sub or the Company acquired or to
be acquired by the Surviving Corporation as a result of, or in connection with,
the Merger or otherwise to carry out this Agreement, the officers of the
Surviving Corporation shall be authorized to execute and deliver, in the name
and on behalf of each of the Merger Sub and the Company or otherwise, all such
deeds, bills of sale, assignments and assurances and to take and do, in such
names and on such behalves or otherwise, all such other actions and things as
may be necessary or desirable to vest, perfect or confirm any and all right,
title and interest in, to and under such rights, properties or assets in the
Surviving Corporation or otherwise to carry out the purposes of this Agreement.

 

SECTION 2.03 Stock Transfer Books

 

At the Effective Time, the stock transfer books of the Company shall be closed
and there shall be no further registration of transfers of shares of Company
Common Stock thereafter on the records of the Company. From and after the
Effective Time, the holders of Certificates shall cease to have any rights with
respect to such shares of Company Stock, except as otherwise provided herein or
by law. At or after the Effective Time, any Certificates presented to the
Surviving Corporation or MMT, for any reason shall represent only the right to
receive the applicable MMT Merger Stock, without any interest thereon.

 

 

 

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ARTICLE III

REPRESENTATIONS, WARRANTIES AND
COVENANTS OF THE MMT COMPANIES

 

As an inducement to, and to obtain the reliance of the Company, the MMT
Companies hereby represents, warrants and covenants as follows:

 

SECTION 3.01 Organization

 

MMT is a corporation duly organized, validly existing, and in good standing
under the laws of the State of Nevada. The Merger Sub is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Colorado. The MMT Companies have the corporate power and are duly authorized,
qualified, franchised, and licensed under all applicable laws, regulations,
ordinances, and orders of public authorities to own all of their properties and
assets and to carry on their business as it is now being conducted, including
qualification to do business as a foreign corporation in any states in which the
character and location of the assets owned by it or the nature of the business
transacted by it requires qualification, except where such failure would not
have a material adverse effect on business or financial condition of either of
the MMT Companies.

 

SECTION 3.02 Capitalization and Ownership.

 

(a)       MMT Capitalization. As of the date hereof, the authorized
capitalization of MMT consists of 90,000,000 shares of Common Stock, par value
$.001 per share, of which 10,470,944 shares are currently issued and
outstanding. All of the issued and outstanding shares of MMT Common Stock are
validly issued, fully paid, and non-assessable. There are 521,429 shares of MMT
Common Stock reserved for issuance underlying conversion of outstanding
convertible securities. The MMT Common Stock is not owned or held in violation
of any preemptive right of any other person or entity. There is no commitment,
plan, subscription rights, or arrangement to issue, no preemptive right to
acquire, and no outstanding option, warrant, or other right calling for the
issuance of, any shares of MMT Common Stock.

 

(b)       Assumption of Liabilities. Effective as of the Effective Time, the
Merger Sub will absolutely, unconditionally and irrevocably assume all
obligations and liabilities of the Company that exist prior to the Closing,
whether vested or contingent, accrued or unaccrued, liquidated or unliquidated,
arising out of contract, tort, statute, common law or otherwise.

 

SECTION 3.03 Subsidiaries

 

On the Effective Date MMT shall have two wholly owned subsidiaries, Success
Nutrients, Inc. and the Merger Sub. MMT does not have any other subsidiaries and
does not own, beneficially or of record, any shares of any other corporation.

 

 

 

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SECTION 3.04 Financial Condition

 

MMT has delivered to the Company MMT’s Annual Report on Form 10-K for the fiscal
year ended December 31, 2015 (“Form 10-K”) and its Quarterly Reports on Form
10-Q for the periods ended March 31, 2016, June 30, 2016 and September 30, 2016
(in the aggregate, the “Form 10-Qs”). Each of the Form 10-K and Form 10-Qs
presents fairly and accurately the information contained therein and does not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; each such statement of income and statement of retained earnings
presents fairly and accurately the results of operations of MMT for the period
indicated; and each such statement of changes in financial position presents
fairly and accurately the information purported to be shown therein. The
financial statements (including the notes thereto) referred to in this Section
3.04 have been prepared in accordance with United States generally accepted
accounting principles (“GAAP”) consistently applied throughout the periods
involved are in compliance with all applicable rules and regulations promulgated
by the Securities and Exchange Commission (the “SEC”), are correct and complete
and are in accordance with the books and records of MMT.

 

SECTION 3.05 Reports.

 

MMT has filed all forms, reports and documents with the SEC required to be filed
by it pursuant to the federal securities laws and SEC rules and regulations
thereunder, and all such forms, reports and documents, as amended, filed with
the SEC have complied with all applicable requirements of the federal securities
laws and the SEC rules and regulations promulgated thereunder.

 

SECTION 3.06 Tax and Other Liabilities.

 

(a)       MMT has filed all state and federal Tax returns that it was required
to file, and has paid all Taxes shown thereon as owing, except where the failure
to file Tax returns or to pay Taxes would not have a material adverse effect on
the financial condition of MMT and its subsidiaries taken as a whole.

 

(b)       MMT has not waived any statute of limitations in respect of any Taxes
or agreed to any extension of time with respect to any Tax assessment or
deficiency.

 

(c)       MMT is not a party to any Tax allocation or sharing agreement.

 

As used herein “Taxes” shall include all federal, state, local or foreign taxes,
including but not limited to income, gross receipts, windfall profits, goods and
services, value added, severance, property, production, sales, use, license,
excise, franchise, employment, withholding or similar taxes, together with any
interest, additions or penalties with respect thereto and any interest in
respect of such additions or penalties.

 

 

 

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SECTION 3.07 Absence of Certain Changes or Events

 

Except as set forth in this Agreement or in the Form 10-Q, since September 30,
2016:

 

(a)       To the best of MMT’s knowledge, there has not been (i) any adverse
change in the business, operations, properties, assets, or condition of MMT; or
(ii) any damage, destruction, or loss to MMT (whether or not covered by
insurance) adversely affecting the business, operations, properties, assets, or
condition of MMT;

 

(b)       Except as disclosed to the Company, MMT has not (i) amended its
articles of incorporation or bylaws; (ii) declared or made, or agreed to declare
or make, any payment of dividends or distributions of any assets of any kind
whatsoever to stockholders or purchased or redeemed, or agreed to purchase or
redeem, any of its capital stock; (iii) waived any rights of value which in the
aggregate are extraordinary or material considering the business of MMT; (iv)
made any change in its method of management, operation, or accounting; (v)
entered into any other transaction; (vi) made any accrual or arrangement for
payment of bonuses or special compensation of any kind or any severance or
termination pay to any present or former officer or employee; (vii) increased
the rate of compensation payable or to become payable by it to any of its
officers, directors or employees or (viii) made any increase in any profit
sharing, bonus, deferred compensation, insurance, pension, retirement, or other
employee benefit plan, payment, or arrangement made to, for, or with its
officers, directors, or employees; and

 

(c)       MMT has not (i) borrowed or agreed to borrow any funds or incurred, or
become subject to, any obligation or liability (absolute or contingent); (ii)
paid any obligation or liability (absolute or contingent) other than current
liabilities reflected in or shown on the most recent MMT balance sheet; (iii)
sold or transferred, or agreed to sell or transfer, any of its assets,
properties, or rights (except (A) the transactions contemplated by the Purchase
Agreement, and (B) assets, properties, or rights not used or useful in its
business which, in the aggregate have a value of less than $10,000), or
canceled, or agreed to cancel, any debts or claims (except debts or claims which
in the aggregate are of a value of less than $10,000); or (iv) made or permitted
any amendment or termination of any contract, agreement, or license to which it
is a party if such amendment or termination is material, considering the
business of MMT.

 

SECTION 3.08 Issuance

 

The shares of MMT Common Stock issued as consideration hereunder are duly
authorized and, upon issuance in accordance with the terms hereof, shall be
validly issued, fully paid and non-assessable, free from all taxes, liens and
charges with respect to the issue thereof, and shall not be subject to
preemptive rights or other similar rights of stockholders of MMT.

 

SECTION 3.09 Approval of Agreement

 

The board of directors of MMT has authorized the execution and delivery of this
Agreement and has approved the transactions contemplated hereby, and approved
the submission of this Agreement and the transactions contemplated hereby to the
stockholders of MMT for their approval with the recommendation that the
transaction be accepted if it has been deemed necessary.

 

SECTION 3.10 Litigation and Proceedings

 

There are no actions, suits, proceedings, or investigations pending or, to the
best of MMT’s knowledge, threatened by or against MMT or affecting MMT or its
properties, at law or in equity, before any court or other governmental agency
or instrumentality, domestic or foreign, or before any arbitrator that would
have a material adverse effect on its business. MMT does not have any knowledge
of any default on its part with respect to any judgment, order, writ,
injunction, decree, award, rule, or regulation of any court, arbitrator, or
governmental agency or instrumentality or of any circumstances which, after
reasonable investigation, would result in the discovery of such a default.

 

 

 

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SECTION 3.11 Contracts.

 

(a)       Except as disclosed to the Company, there are no material contracts,
agreements, franchises, license agreements, or other commitments to which MMT is
a party or by which it or any of its assets, products, or properties are bound
outside of the ordinary course of business;

 

(b)       Except as disclosed to the Company or in its SEC reports, MMT is not a
party to any oral or written (i) contract for the employment of any officer or
employee which is not terminable on 30 days or less notice; (ii) profit sharing,
bonus, deferred compensation, stock option, severance pay, pension benefit or
retirement plan, agreement, or arrangement covered by Title IV of the Employee
Retirement Income Security Act, as amended; (iii) agreement, contract, or
indenture relating to the borrowing of money; (iv) guaranty of any obligation,
other than one on which MMT is a primary obligor, for the borrowing of money or
otherwise, excluding endorsements made for collection and other guaranties of
obligations, which, in the aggregate do not exceed more than one year or
providing for payments in excess of $10,000 in the aggregate; (vi) collective
bargaining agreement; (vii) agreement with any present or former officer or
partner of MMT or (viii) contract, agreement, or other commitment involving
payments by it of more than $10,000 in the aggregate.

 

SECTION 3.12 Material Contract Defaults

 

To the best of MMT’s knowledge, MMT is not in default under the terms of any
outstanding contract, agreement, lease, or other commitment which is material to
the business, operations, properties, assets, or condition of MMT and there is
no event of default in any material respect under any such contract, agreement,
lease, or other commitment in respect of which MMT has not taken adequate steps
to prevent such a default from occurring.

 

SECTION 3.13 No Conflict With Other Instruments

 

The execution of this Agreement and the consummation of the transactions
contemplated by this Agreement will not result in the breach of any term or
provision of, or constitute an event of default under, any material indenture,
mortgage, deed of trust, or other material contract, agreement, or instrument to
which MMT is a party or to which any of its properties or operations are
subject.

 

SECTION 3.14 Governmental Authorizations

 

To the best of MMT’s knowledge, MMT has all licenses, franchises, permits, and
other governmental authorizations that are legally required to enable it to
conduct its business in all material respects as conducted on the date hereof;
except for compliance with federal and state securities and corporation laws, as
hereinafter provided, no authorization, approval, consent, or order of, or
registration, declaration, or filing with, any court or other governmental body
is required in connection with the execution and delivery by MMT of this
Agreement and the consummation by MMT of the transactions contemplated hereby.

 

 

 

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SECTION 3.15 Compliance With Laws and Regulations

 

To the best of MMT’s knowledge, MMT has complied with all applicable statutes
and regulations of any federal, state, or other governmental entity or agency
thereof, except to the extent that noncompliance would not materially and
adversely affect the business, operations, properties, assets, or condition of
MMT or except to the extent that noncompliance would not result in the
incurrence of any material liability for MMT.

 

SECTION 3.16 Insurance

 

All the insurable properties of MMT are insured in their full replacement value
against all risks customarily insured against by persons operating similar
properties in localities where such properties are located and under valid and
enforceable policies by insurers of recognized responsibility. Such policy or
policies containing substantially equivalent coverage will be outstanding on the
date of consummation of the transactions contemplated by this Agreement.

 

SECTION 3.17 Environmental Matters.

 

(a) To the best of MMT’s knowledge, MMT has no liability under, and each are
presently in compliance in all material respects with all Environmental Laws
applicable to MMT, its assets or business.

 

(b) MMT has no knowledge of the releasing, spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, disposing, or
dumping of Hazardous Substances into the soil, surface waters, ground waters,
land, stream sediments, surface of subsurface strata, ambient air, sewer system,
or any environmental medium at or from any property or asset owned, used or
occupied by MMT (“Environmental Condition”) in violation of any applicable
Environmental Law.

 

SECTION 3.18 No Undisclosed Liabilities

 

To the best of MMT’s knowledge, MMT has no liabilities or obligations of any
nature (whether known or unknown, asserted or unasserted, absolute or
contingent, accrued or unaccrued, liquidated or unliquidated, due or to become
due), including without limitation any liability for Taxes or any obligations or
liabilities of the nature or type required to be disclosed under GAAP, which
are, individually or in the aggregate, material to the business, results of
operations, assets or financial condition of MMT, taken as a whole, other than
such liabilities or obligations that have been specifically disclosed in the
Form 10-K or Form 10-Qs.

 

SECTION 3.19 Materiality

 

To the best of MMT’s knowledge, no representation or warranty in this Article
III contains any materially untrue statement of a material fact or omits to
state any material fact required to make the statements contained therein not
materially misleading or materially necessary in order to provide Company with
reasonably complete information as to MMT’ business or financial condition.

 

 

 

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ARTICLE IV

REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY

 

As an inducement to, and to obtain the reliance of MMT, the Company hereby
represents, warrants and covenants as follows:

 

SECTION 4.01 Organization

 

(a)       As of the date hereof, the authorized capitalization of the Company
consists of 1,000,000 shares of Common Stock, no par value per share (the “Pono
Common Stock”), of which 100,000 shares of Pono Common Stock are currently
issued and outstanding. All of the issued and outstanding shares of Pono Common
Stock are validly issued, fully paid, and non-assessable. There are no shares of
Pono Common Stock reserved for issuance underlying conversion of outstanding
Company convertible securities or outstanding options and warrants. Pono Common
Stock is not owned or held in violation of any preemptive right of any other
person or entity. There is no commitment, plan, subscription rights, or
arrangement to issue, no preemptive right to acquire, and no outstanding option,
warrant, or other right calling for the issuance of, any shares of Pono Common
Stock or any security or other instrument convertible into, exercisable for, or
exchangeable for Pono Common Stock.

 

(b)       The Company has furnished to MMT complete and correct copies of the
certificate of incorporation, and bylaws of Company as in effect on the date
hereof. The execution and delivery of this Agreement do not, and the
consummation of the transactions contemplated by this Agreement in accordance
with the terms hereof will not, violate any provision of such certificates of
incorporation or bylaws. The Company has taken all action required by law, its
certificate of incorporation, bylaws, or otherwise to authorize the execution
and delivery of this Agreement. The Company has full power, authority, and legal
right and has taken all action required by law, its incorporation and bylaws,
and otherwise to consummate the transactions herein contemplated.

 

SECTION 4.02 No Conflict With Other Instruments

 

The execution of this Agreement and the consummation of the transactions
contemplated by this Agreement will not result in the breach of any term or
provision of, or constitute an event of default under, any material indenture,
mortgage, deed of trust, or other material contract, agreement, or instrument to
which the Company is a party or to which any of its properties or operations are
subject.

 

SECTION 4.03 Approval of Agreement

 

The board of directors of the Company has authorized the execution and delivery
of this Agreement and has approved the transactions contemplated hereby, and
approved the submission of this Agreement and the transactions contemplated
hereby to the stockholders of the Company for their approval with the
recommendation that the transaction be accepted if it has been deemed necessary.

 

 

 

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SECTION 4.04 Financial Condition

 

The Company has delivered to MMT its unaudited financial statements through
December 31, 2016 (the “Pono Financial Statements”). The Pono Financial
Statements presents fairly and accurately the information contained therein and
does not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; each such statement of income and statement of retained
earnings presents fairly and accurately the results of operations of the Company
for the period indicated; and each such statement of changes in financial
position presents fairly and accurately the information purported to be shown
therein. The Pono Financial Statements (including the notes thereto) referred to
in this Section 4.04 have been prepared in accordance with United States
generally accepted accounting principles (“GAAP”), are correct and complete and
are in accordance with the books and records of the Company.

 

SECTION 4.05 Tax and Other Liabilities.

 

(a)       The Company has filed all state and federal Tax returns that it was
required to file, and has paid all Taxes shown thereon as owing, except where
the failure to file Tax returns or to pay Taxes would not have a material
adverse effect on the financial condition of the Company;

 

(b)       the Company has not waived any statute of limitations in respect of
any Taxes or agreed to any extension of time with respect to any Tax assessment
or deficiency.

 

(c)       the Company is not a party to any Tax allocation or sharing agreement.

 

As used herein “Taxes” shall include all federal, state, local or foreign taxes,
including but not limited to income, gross receipts, windfall profits, goods and
services, value added, severance, property, production, sales, use, license,
excise, franchise, employment, withholding or similar taxes, together with any
interest, additions or penalties with respect thereto and any interest in
respect of such additions or penalties.

 

SECTION 4.06 Absence of Certain Changes or Events

 

Except as set forth in this Agreement, since December 31, 2016:

 

(a)       To the best of the Company’s knowledge, there has not been (i) any
adverse change in the business, operations, properties, assets, or condition of
the Company; or (ii) any damage, destruction, or loss to the Company (whether or
not covered by insurance) adversely affecting the business, operations,
properties, assets, or condition of the Company;

 

 

 

 

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(b)       Except as disclosed to MMT, the Company has not (i) amended its
articles of incorporation or bylaws; (ii) declared or made, or agreed to declare
or make, any payment of dividends or distributions of any assets of any kind
whatsoever to stockholders or purchased or redeemed, or agreed to purchase or
redeem, any of its capital stock; (iii) waived any rights of value which in the
aggregate are extraordinary or material considering the business of the Company;
(iv) made any change in its method of management, operation, or accounting; (v)
entered into any other transaction; (vi) made any accrual or arrangement for
payment of bonuses or special compensation of any kind or any severance or
termination pay to any present or former officer or employee; (vii) increased
the rate of compensation payable or to become payable by it to any of its
officers, directors or employees or (viii) made any increase in any profit
sharing, bonus, deferred compensation, insurance, pension, retirement, or other
employee benefit plan, payment, or arrangement made to, for, or with its
officers, directors, or employees; and

 

(c)       the Company has not (i) borrowed or agreed to borrow any funds or
incurred, or become subject to, any obligation or liability (absolute or
contingent); (ii) paid any obligation or liability (absolute or contingent)
other than current liabilities reflected in or shown on the most recent Company
balance sheet; (iii) sold or transferred, or agreed to sell or transfer, any of
its assets, properties, or rights not used or useful in its business which, in
the aggregate have a value of less than $10,000), or canceled, or agreed to
cancel, any debts or claims (except debts or claims which in the aggregate are
of a value of less than $10,000); or (iv) made or permitted any amendment or
termination of any contract, agreement, or license to which it is a party if
such amendment or termination is material, considering the business of the
Company.

 

SECTION 4.07 No Undisclosed Liabilities

 

To the best of the Company’s knowledge, the Company has no liabilities or
obligations of any nature (whether known or unknown, asserted or unasserted,
absolute or contingent, accrued or unaccrued, liquidated or unliquidated, due or
to become due), including without limitation any liability for Taxes or any
obligations or liabilities of the nature or type required to be disclosed under
GAAP, which are, individually or in the aggregate, material to the business,
results of operations, assets or financial condition of the Company

 

SECTION 4.08 Litigation and Proceedings

 

There are no actions, suits, proceedings, or investigations pending or, to the
best of the Company’s knowledge, threatened by or against the Company or
affecting the Company or its properties, at law or in equity, before any court
or other governmental agency or instrumentality, domestic or foreign, or before
any arbitrator that would have a material adverse effect on its business. the
Company does not have any knowledge of any default on its part with respect to
any judgment, order, writ, injunction, decree, award, rule, or regulation of any
court, arbitrator, or governmental agency or instrumentality or of any
circumstances which, after reasonable investigation, would result in the
discovery of such a default.

 

SECTION 4.09 Contracts.

 

(a)       Except as disclosed to MMT, there are no material contracts,
agreements, franchises, license agreements, or other commitments to which the
Company is a party or by which it or any of its assets, products, or properties
are bound outside of the ordinary course of business;

 

(b)       Except as disclosed to MMT, the Company is not a party to any oral or
written (i) contract for the employment of any officer or employee which is not
terminable on 30 days or less notice; (ii) profit sharing, bonus, deferred
compensation, stock option, severance pay, pension benefit or retirement plan,
agreement, or arrangement covered by Title IV of the Employee Retirement Income
Security Act, as amended; (iii) agreement, contract, or indenture relating to
the borrowing of money; (iv) guaranty of any obligation, other than one on which
the Company is a primary obligor, for the borrowing of money or otherwise,
excluding endorsements made for collection and other guaranties of obligations,
which, in the aggregate do not exceed more than one year or providing for
payments in excess of $10,000 in the aggregate; (vi) collective bargaining
agreement; (vii) agreement with any present or former officer or partner of the
Company or (viii) contract, agreement, or other commitment involving payments by
it of more than $10,000 in the aggregate.

 

 

 

 12 

 

 

 

SECTION 4.10 Material Contract Defaults

 

To the best of the Company’s knowledge, the Company is not in default under the
terms of any outstanding contract, agreement, lease, or other commitment which
is material to the business, operations, properties, assets, or condition of the
Company and there is no event of default in any material respect under any such
contract, agreement, lease, or other commitment in respect of which the Company
has not taken adequate steps to prevent such a default from occurring.

 

SECTION 4.11 No Conflict With Other Instruments

 

The execution of this Agreement and the consummation of the transactions
contemplated by this Agreement will not result in the breach of any term or
provision of, or constitute an event of default under, any material indenture,
mortgage, deed of trust, or other material contract, agreement, or instrument to
which the Company is a party or to which any of its properties or operations are
subject.

 

SECTION 4.12 Governmental Authorizations

 

To the best of the Company’s knowledge, the Company has all licenses,
franchises, permits, and other governmental authorizations that are legally
required to enable it to conduct its business in all material respects as
conducted on the date hereof; except for compliance with federal and state
securities and corporation laws, as hereinafter provided, no authorization,
approval, consent, or order of, or registration, declaration, or filing with,
any court or other governmental body is required in connection with the
execution and delivery by the Company of this Agreement and the consummation by
the Company of the transactions contemplated hereby.

 

SECTION 4.13 Compliance With Laws and Regulations

 

To the best of the Company’s knowledge, the Company has complied with all
applicable statutes and regulations of any federal, state, or other governmental
entity or agency thereof, except to the extent that noncompliance would not
materially and adversely affect the business, operations, properties, assets, or
condition of the Company or except to the extent that noncompliance would not
result in the incurrence of any material liability for the Company.

 

SECTION 4.14 Insurance

 

All the insurable properties of the Company are insured in their full
replacement value against all risks customarily insured against by persons
operating similar properties in localities where such properties are located and
under valid and enforceable policies by insurers of recognized responsibility.
Such policy or policies containing substantially equivalent coverage will be
outstanding on the date of consummation of the transactions contemplated by this
Agreement.

 

 

 

 

 13 

 

 

SECTION 4.15 Environmental Matters.

 

(a)       To the best of the Company’s knowledge, the Company has no liability
under, and each are presently in compliance in all material respects with all
Environmental Laws applicable to the Company, its assets or business.

 

(b)       The Company has no knowledge of the releasing, spilling, leaking,
pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, disposing, or dumping of Hazardous Substances into the soil, surface
waters, ground waters, land, stream sediments, surface of subsurface strata,
ambient air, sewer system, or any environmental medium at or from any property
or asset owned, used or occupied by the Company (“Environmental Condition”) in
violation of any applicable Environmental Law.

 

SECTION 4.16 No Undisclosed Liabilities

 

To the best of the Company’s knowledge, the Company has no liabilities or
obligations of any nature (whether known or unknown, asserted or unasserted,
absolute or contingent, accrued or unaccrued, liquidated or unliquidated, due or
to become due), including without limitation any liability for Taxes or any
obligations or liabilities of the nature or type required to be disclosed under
GAAP, which are, individually or in the aggregate, material to the business,
results of operations, assets or financial condition of the Company.

 

SECTION 4.17 Materiality

 

To the best of the Company’s knowledge, no representation or warranty in this
Article IV contains any materially untrue statement of a material fact or omits
to state any material fact required to make the statements contained therein not
materially misleading or materially necessary in order to provide MMT with
reasonably complete information as to the Company’s business or financial
condition.

 

ARTICLE V

DELIVERIES AT CLOSING

 

SECTION 5.01 Effective Time.

 

The Effective Time of the Merger shall be the date on which the Statement of
Merger and Articles of Merger are filed with the Secretary of State for the
State of Colorado and Nevada, which shall be so filed no less than twenty (20)
days following the dissemination of the MMT Information Statement applicable
hereto.

 

SECTION 5.02 Taking of Necessary Action

 

An the Effective Time the Parties hereto shall take all such actions as may be
necessary or appropriate in order to effectuate the transactions contemplated by
this Agreement, including the following:

 

a. Pono shall deliver all of its stock certificates to MMT and MMT shall cause
to be issued certificates representing the Merger Stock to all of the
shareholders of Pono. If, at any time after the execution hereof, any further
action is necessary or desirable to carry out the purposes of this Agreement, to
(a) vest the Merger Sub with title to 100% of the issued and outstanding shares
of Company Stock, or (b) vest the Company Stockholders with title to 100% of the
issued and outstanding shares of MMT Merger Stock, the officers and directors of
Company or MMT, as the case may be, shall take such necessary or desirable
action in order to effectuate the transactions contemplated by this Agreement.

 

 

 

 14 

 

 

SECTION 5.03 Stock Legends

 

Certificates representing all shares of MMT Merger Stock shall bear a legend
restricting transfer of the shares of MMT Merger Stock represented by such
certificate in substantially the form set forth below:

 

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY BE OFFERED AND SOLD ONLY IF REGISTERED PURSUANT TO THE
PROVISIONS OF THE ACT OR IF AN EXEMPTION FROM REGISTRATION THEREUNDER IS
AVAILABLE, THE AVAILABILITY OF WHICH MUST BE ESTABLISHED TO THE SATISFACTION OF
THE COMPANY.

 

MMT shall, from time to time, make stop transfer notations in its records to
ensure compliance in connection with any proposed transfer of the shares with
the Securities Act, and all applicable state securities laws.

 

SECTION 5.04 Fees and Expenses

 

Each of the Parties hereto shall be responsible for all of their respective fees
and expenses incurred in connection with the negotiation, execution, delivery
and performance of this Agreement and the transactions contemplated hereby,
including, without limitation, the professional fees of counsel for each of the
Parties incurred in connection with this Agreement.

 

SECTION 5.05 Closing Events

 

At the Closing, each of the respective Parties hereto shall execute,
acknowledge, and deliver (or shall cause to be executed, acknowledged, and
delivered) any and all certificates, opinions, financial statements, schedules,
agreements, resolutions, rulings, or other instruments required by this
Agreement to be so delivered at or prior to the Closing, together with such
other items as may be reasonably requested by the Parties hereto and their
respective legal counsel in order to effectuate or evidence the transactions
contemplated hereby. Deliveries at Closing shall include, without limitation,
the certificates representing the MMT Merger Stock required to be delivered at
Closing pursuant to Section 2.02 hereof.

 

ARTICLE VI

SPECIAL COVENANTS AND AGREEMENTS OF THE PARTIES

 

SECTION 6.01 Required Filings

 

MMT shall timely file with the SEC any forms, statements, reports and documents
required to be filed by it pursuant to the federal securities laws and SEC rules
and regulations thereunder as a result of the Merger, this Agreement or any of
the transactions contemplated hereby, and shall use its best efforts to cause
all such forms, statements, reports and documents to be declared or become
effective as soon as practicable thereafter.

 

 

 

 15 

 

 

 

SECTION 6.02 Access to Properties and Records

 

MMT and the Company will each afford to the officers and authorized
representatives of the other full access to the properties, books, and records
of each other as the case may be, in order that each may have full opportunity
to make such reasonable investigation as it shall desire to make of the affairs
of the other, and each will furnish the other with such additional financial and
operating data and other information as to the business and properties of each
other, as the case may be, as the other shall from time to time reasonably
request.

 

SECTION 6.03 Special Covenants and Representations Regarding Issuance of MMT
Merger Stock

 

The consummation of this Agreement and the transactions herein contemplated,
including the issuance of MMT Merger Stock to the Company Stockholders as
contemplated hereby, constitutes the offer and sale of securities under the
Securities Act and applicable state statutes. Such transaction shall be
consummated in reliance on exemptions from the registration and prospectus
delivery requirements of such statutes which depend, inter alia, upon the
circumstances under which the Company Stockholders acquire such securities. In
connection with reliance upon exemptions from the registration and prospectus
delivery requirements for such transactions, at the Closing the Company
Stockholders shall deliver to MMT customary investment letters of
representation.

 

SECTION 6.04 Third party Consents and Certificates

 

MMT and the Company agree to cooperate with each other in order to obtain any
required third party consents to this Agreement and the transactions herein and
therein contemplated.

 

SECTION 6.05 Indemnification Provisions.

 

(a)       By Company. The Company hereby agrees to indemnify and hold harmless
MMT and its officer, directors and shareholders, against and in respect of any
loss, claim, liability, obligation or damage suffered or incurred by MMT
resulting from or arising in connection with any misrepresentation (in this
Agreement or the Memorandum), breach of warranty, or non-fulfillment of any
covenant or agreement on the part of the Company contained in this Agreement.

 

(b)       By MMT. MMT hereby agrees to indemnify and hold harmless the Company
and its officer, directors and shareholders, against and in respect of any loss,
claim, liability, obligation or damage suffered or incurred by the Company
resulting from or arising in connection with any misrepresentation (in this
Agreement or the Memorandum), breach of warranty, or non-fulfillment of any
covenant or agreement on the part of MMT contained in this Agreement;

 

(c)       Survival of Obligation to Indemnify. The indemnity obligations of this
Section 6.05 shall survive the Closing and the payment of the consideration
therefor for a period of one (1) year from the Closing and shall continue
thereafter with respect to: (a) matters which the party seeking indemnity
hereunder shall have given the other party written notice of as provided herein
prior to one (1) year from the Closing; and (b) any claims, actions, suits,
investigations or proceedings based on fraud or willful misconduct, willful
misrepresentation or willful breach of warranty.

 

 

 

 16 

 

 

 

(d)       Notice and Procedure. Any party claiming indemnity hereunder
(hereinafter referred to as the “Indemnified party”) shall give the party
against whom indemnity is sought (hereinafter referred to as the “Indemnifying
party”) prompt written notice after obtaining knowledge of any claim or the
existence of facts as to which recovery may be sought against it in respect of
which the Indemnifying party may be liable because of the indemnity provisions
set forth in this Section 6.05. If such claim for indemnity arises in connection
with a legal action instituted by a third party (hereinafter a “Third Party
Claim”), the Indemnified party hereby agrees that, within ten (10) Business Days
after it is served with notice of the assertion of any Third Party Claim for
which it may seek indemnity hereunder, the Indemnified party will notify the
Indemnifying party in writing of such Third Party Claim.

 

The Indemnifying party shall, within ten (10) Business Days after the date that
the Indemnified party gives notice of a claim (whether a Third Party Claim or
otherwise) as provided above, notify the Indemnified party whether it accepts or
contests its obligation of indemnity hereunder as claimed by the Indemnified
party.

 

If the claim for indemnity arises in connection with a Third Party Claim and the
Indemnifying party accepts its indemnity obligation hereunder, the Indemnifying
party shall have the right, after conceding in writing its obligation of
indemnity hereunder, to conduct the defense of such action at its sole expense
through counsel reasonably acceptable to the Indemnified party. The Indemnified
party shall cooperate in such defense as reasonably necessary to enable the
Indemnifying party to conduct its defense, including providing the Indemnifying
party with reasonable access to such records as may be relevant to its defense.
The Indemnifying party shall be entitled to settle any such Third Party Claim
without the prior written consent of the Indemnified party provided that the
Indemnifying party provides the Indemnified party with reasonable assurances
that the Indemnified party will be fully indemnified by the Indemnifying party
in connection with any such Third Party Claim. The Indemnified party shall be
entitled to retain its own counsel at its own expense in connection with any
Third Party Claim that the Indemnifying party has elected to defend. If the
Indemnifying party accepts its indemnity obligations hereunder in connection
with a Third Party Claim but elects not to conduct the defense thereof, the
Indemnified party may defend and/or settle such Third Party Claim and shall be
entitled to be indemnified for the full amount of such claim and all costs and
expenses, including attorneys’ fees, incurred in connection therewith pursuant
to this Section 6.05.

 

If the claim for indemnity arises in connection with a Third Party Claim and the
Indemnifying party contests or does not accept its indemnity obligation
hereunder, the Indemnified party shall have the right to defend and/or settle
such Third Party Claim and thereafter seek indemnity from the other party
pursuant to this Section 6.06; provided, however, that the Indemnified party
shall not settle any such claim without the prior written consent of the
Indemnifying party, which consent shall not be unreasonably withheld.

 

If the claim for indemnity arises other than in connection with a Third Party
Claim and the Indemnifying party accepts its indemnity obligation hereunder, the
Indemnifying party shall, upon the request of the Indemnified party, pay the
full amount of such claim to the Indemnified party or to the third party
asserting such claim as directed by the Indemnified party. If the claim for
indemnity arises other than in connection with a Third Party Claim and the
Indemnifying party contests its indemnity obligation hereunder, the Indemnified
party shall have the right to defend, settle or take any other action with
respect to such claim and thereafter seek indemnity pursuant to this Section
6.05; provided, however, that the Indemnified party shall not settle any such
claim without the prior written consent of the Indemnifying party, which consent
shall not be unreasonably withheld.

 

 

 

 

 17 

 

 

 

ARTICLE VII

RESOLUTION OF DISPUTES

 

 

 

Any controversy, dispute or claim arising out of or relating to this Agreement,
or involving the Parties hereto, shall be resolved by binding arbitration before
a retired judge at JAMS in the City and County of Denver, Colorado. The
prevailing party shall be awarded its attorney’s fees, costs and expenses.

 

In connection with the defense of any third party claims for which claims for
indemnification have been made hereunder, each party will provide reasonable
access to its and the Company’s books and records as and to the extent required
for the proper defense of such third party claim. Neither party shall consent to
any settlement or purport to bind any other party to any settlement without the
written consent of the other party.

 

ARTICLE VIII

MISCELLANEOUS

 

SECTION 8.01 No Brokers

 

MMT and the Company each agree that there are no other finders or brokers
involved in bringing the Parties together or who were instrumental in the
negotiation, execution, or consummation of this Agreement. The Parties hereto
each agree to indemnify the other against any claim by any third person for any
commission, brokerage, or finders’ fee arising from the transactions
contemplated hereby based on any alleged agreement or understanding between the
indemnifying party and such third person, whether express or implied from the
actions of the indemnifying party.

 

SECTION 8.02 Notices

 

Any notice, demand, request, offer, consent, approval or communications
(collectively, a “Notice”) to be provided under this Agreement shall be in
writing and sent by one of the following methods: (i) postage prepaid, United
States certified or registered mail with a return receipt requested, addressed
to a Party, as appropriate, at the addresses set forth below; (ii) overnight
delivery with a nationally recognized and reputable air courier (with electronic
tracking requested) addressed to the appropriate Party at the addresses set
forth below; (iii) personal delivery to the appropriate Party at the addresses
set forth below; or (iv) by confirmed electronic, facsimile or telecopier
transmission to a Party, as appropriate, at the address or numbers set forth
below which shall also be contemporaneously sent by one of the methods described
in the preceding clause (i), (ii) or (iii) of this Section (it being understood
and agreed, however, that such Notice shall be deemed received upon receipt of
electronic transmission). Any such Notice shall be deemed given upon receipt
thereof, or, in case of any Notice sent pursuant to clause (i), (ii) or (iii)
above, the refusal thereof by the intended receipt. Notwithstanding the
foregoing, in the event any Notice is sent by overnight delivery or personal
delivery and it is received (or delivery is attempted) during non-business hours
(i.e., other than during 8:30 a.m. to 5:30 p.m. MST, Monday through Friday,
excluding holidays), then such Notice shall not be deemed to have been received
until the next Business Day. Either party may designate a different address for
receiving Notices hereunder by notice to the other party in accordance with the
provisions of this Section. Further notwithstanding the foregoing, if any Notice
is sent by either party hereto to the other and such Notice has not been sent in
compliance with this Section but has in fact actually been received by the other
party, then such Notice shall be deemed to have been duly given by the sending
party and received by the recipient party effective as of such date of actual
receipt.

 

 

 

 18 

 

 

 

If to MMT or MMC:

Medicine Man Technologies, Inc.

4880 Havana Street, Suite 102 South

Denver, Colorado 80239

Attn: Andrew Williams, President

 

With a copy to:

Andrew I. Telsey, P.C.

12835 E. Arapahoe Road

Tower 1 #803

Centennial, Colorado 80112

 

If to Company:

Mr. Joshua Haupt

6660 East 47th Ave

Denver, CO 80216

 

With a copy to:

Douglas J. Becker, Esq.

Otten Johnson Robinson Neff + Ragonetti PC

Suite 1600

950 17th St.

Denver, CO 80202

 

Notwithstanding anything in this Section to the contrary, any Notice delivered
in accordance herewith to the last designated address of any person or party to
which a Notice may be or is required to be delivered pursuant to this Agreement
shall not be deemed ineffective if actual delivery cannot be made due to a
change of address of the person or party to which the Notice is directed or the
failure or refusal of such person or party to accept delivery of the Notice.

 

SECTION 8.03 No Third-Party Beneficiaries

 

This Agreement is not intended to confer upon any person, other than the Parties
hereto, any rights or remedies hereunder.

 

 

SECTION 8.04 Amendment; Waiver

 

This Agreement may not be modified, amended, supplemented, canceled or
discharged, except by written instrument executed by all Parties. No failure to
exercise, and no delay in exercising, any right, power or privilege under this
Agreement shall operate as a waiver, nor shall any single or partial exercise of
any right, power or privilege hereunder preclude the exercise of any other
right, power or privilege. No waiver of any breach of any provision shall be
deemed to be a waiver of any preceding or succeeding breach of the same or any
other provision, nor shall any waiver be implied from any course of dealing
between the Parties. No extension of time for performance of any obligations or
other acts hereunder or under any other agreement shall be deemed to be an
extension of the time for performance of any other obligations or any other
acts. The rights and remedies of the Parties under this Agreement are in
addition to all other rights and remedies, at law or equity, that they may have
against each other except as may be specifically limited herein.

 

 

 

 19 

 

 

 

SECTION 8.05 Rules of Interpretation

 

Except as otherwise expressly provided in this Agreement, the following rules
shall apply hereto: (i) the singular includes the plural and plural includes the
singular; (ii) “or” is not exclusive and “include” and “including” are not
limiting; (iii) a reference to any agreement or other contract includes any
permitted supplements and amendments; (iv) a reference in this Agreement to a
section or exhibit is a reference to a section or exhibit within or attached to
this Agreement unless otherwise expressly provided; (v) a reference to a section
or paragraph in this Agreement shall, unless the context clearly indicates to
the contrary, refer to all sub-parts or sub-components of any said section or
paragraph; (vi) words such as “hereunder,” “hereto,” “hereof,” and “herein,” and
other words of like import shall, unless the context clearly indicates to the
contrary, refer to the whole of this Agreement and not to any particular clause
hereof; (vii) the headings of the articles or sections and the ordering or
position thereof are for convenience only and shall not in any way be deemed to
affect the meaning of this Agreement; (viii) a reference in this Agreement to a
“person” or “party” (whether in the singular or the plural) shall (unless
otherwise indicated herein) include both natural persons and unnatural persons
(including, but not limited to, corporations, partnerships, limited liability
companies or partnerships, trusts, etc.); (ix) all accounting terms not
otherwise defined herein shall have the meanings assigned to them in accordance
with GAAP; and (x) any reference in this Agreement to a “Business Day” shall
include each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day
on which national banks in the United States are closed.

 

SECTION 8.06 Construction

 

The Parties agree and acknowledge that they have jointly participated in the
negotiation and drafting of this Agreement and that this Agreement has been
fully reviewed and negotiated by the Parties and their respective counsel. In
the event of an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the Parties and no
presumptions or burdens of proof shall arise favoring any party by virtue of the
authorship of any of the provisions of this Agreement. Any reference to any
federal, state, local, or foreign statute or law shall be deemed also to refer
to all rules and regulations promulgated thereunder, unless the context requires
otherwise. If any party has breached any representation, warranty, or covenant
contained herein in any respect, the fact that there exists another
representation, warranty, or covenant relating to the same subject matter
(regardless of the relative levels of specificity) which the party has not
breached shall not detract from or mitigate the fact that the party is in breach
of the first representation, warranty, or covenant. The mere listing (or
inclusion of copy) of a document or other item shall not be deemed adequate to
disclose an exception to a representation or warranty made herein (unless the
representation or warranty relates solely to the existence of the document or
other items itself).

 

 

 

 20 

 

 

 

SECTION 8.07 Governing Law and Waiver of Jury Trial

 

This Agreement is made in and shall be governed by the laws of the State of
California, and the sole and exclusive venue for any action relating to or
arising out of this Agreement shall be the City and County of Denver, Colorado.
The Parties hereto expressly waive any claim or defense therein that such courts
constitute an inconvenient forum. The Parties hereto expressly waive all rights
to trial by jury regarding all matters or disputes arising out of or related to
this Agreement. In no event shall any party be liable for any indirect, special,
exemplary, punitive or consequential damages arising out of or relating to this
Agreement.

 

SECTION 8.08 Severability

 

If any clause or provision of this Agreement is illegal, invalid or
unenforceable under applicable present or future laws effective during the term
of this Agreement, the remainder of this Agreement shall not be affected. In
lieu of each clause or provision of this Agreement that is illegal, invalid or
unenforceable, there shall be added as a part of this Agreement a clause or
provision as nearly identical as may be possible and as may be legal, valid and
enforceable. In the event any clause or provision of this Agreement is illegal,
invalid or unenforceable as aforesaid and the effect of such illegality,
invalidity or unenforceability is that either party no longer has the
substantial benefit of its bargain under this Agreement and a clause or
provision as nearly identical as may be possible cannot be added, then, in such
event, such party may in its discretion cancel and terminate this Agreement
provided such party exercises such right within a reasonable time after such
occurrence.

 

SECTION 8.09 Arm’s Length Negotiations

 

Each Party herein expressly represents and warrants to all other Parties hereto
that (a) before executing this Agreement, said party has fully informed itself
of the terms, contents, conditions and effects of this Agreement; (b) said party
has relied solely and completely upon its own judgment in executing this
Agreement; (c) said party has had the opportunity to seek and has obtained the
advice of counsel before executing this Agreement; (d) said party has acted
voluntarily and of its own free will in executing this Agreement; (e) said party
is not acting under duress, whether economic or physical, in executing this
Agreement; and (f) this Agreement is the result of arm’s length negotiations
conducted by and among the Parties and their respective counsel.

 

SECTION 8.10 Tax-Free Nature of Transaction

 

Each of the Parties shall use its best efforts to cause the Merger to constitute
a “tax-free reorganization” within the meaning of Section 368 of the Code, and
none of the Parties shall knowingly take or cause to be taken any action that,
or knowingly fail to take or cause not to be taken any action the failure of
which, would reasonably be expected to adversely affect the foregoing
qualifications under the Code. Except as otherwise required by applicable law,
following the Effective Time, each party agrees to file its Tax Returns in a
manner that is consistent with this Section 8.11.

 

 

 

 21 

 

 

SECTION 8.11 Binding Effect; Assignment

 

The rights and obligations of this Agreement shall bind and inure to the benefit
of the Parties and their respective successors and assigns. Nothing expressed or
implied herein shall be construed to give any other person any legal or
equitable rights hereunder. The rights and obligations of this Agreement may not
be assigned without the prior written consent of the other party which may be
granted or withheld in such Parties sole and absolute discretion.

 

SECTION 8.12 Counterparts

 

For purposes of this Agreement, a document (or signature page thereto) signed
and transmitted electronically, including but not limited to by facsimile
machine or telecopier, is to be treated as an original document. The signature
of any party thereon, or 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 a ny party, an electronic, facsimile or telecopy document is to be
re-executed in original form by the Parties who executed the electronic,
facsimile or telecopy document. No party may raise the use of any electronic,
facsimile or telecopier machine as a defense to the enforcement of this
Agreement or any amendment or other document execution in compliance with this
Section/

 

SECTION 8.13 Entire Agreement

 

This Agreement (including the exhibits and schedules attached hereto) and other
documents delivered at the Closing pursuant hereto, contains the entire
understanding of the Parties in respect of its subject matter and supersedes all
prior agreements and understandings (oral or written) between or among the
Parties with respect to such subject matter. The Parties agree that prior drafts
of this Agreement shall not be deemed to provide any evidence as to the meaning
of any provision hereof or the intent of the Parties with respect thereto. The
exhibits and schedules constitute a part hereof as though set forth in full
above. This Agreement is not intended to confer upon any person, other than the
Parties hereto, any rights or remedies hereunder.

 

 

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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
by their respective officers, hereunto duly authorized, as of the date first
above-written.

 

MEDICINE MAN TECHNOLOGIES, INC. MEDICINE MAN CONSULTING, INC.     By: s/ Andrew
Williams By: s/ Brett Roper       Andrew Williams, President       Brett Roper,
President     PONO PRODUCTIONS LTD.       By: s/ Joshua Haupt         Joshua
Haupt, President  

 

 

 

 

 

 

 

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