ACQUISITION AGREEMENT

 

This ACQUISITION AGREEMENT (the “Agreement”) is dated effective as of May ___,
2018 (the “Effective Date”), by and between LK Ventures, LLC, a Nevada limited
liability company (“LKV”), FUTURE FARM TECHNOLOGIES INC., a British Columbia
corporation (“FFT”), and MDM CULTIVATION, LLC, a Delaware limited liability
company (“MDM”), (collectively, “Sellers”) as the Members of YLK PARTNERS NV,
LLC, a Nevada limited liability company, with an address located at 100
Alexander Way, Edgewater, NJ 07020 (“Company”), and Solis tek inc, a Nevada
corporation, with an address located at 853 Sandhill Avenue CA 90746 (“Buyer”)
(Sellers and Buyer sometimes collectively referred to herein as the “Parties” or
individually as the “Party”).

 

RECITALS

 

WHEREAS, Company was formed on December 13, 2017, upon the submission and
incorporation of its Articles of Organization to the Nevada Secretary of State,
pursuant to the Nevada Revised Statues, Ch. 86, as amended from time to time,
Title 6, Section 18-101, et seq. (the “Act”);

 

WHEREAS, Sellers in the aggregate, hold, own and maintain One Hundred Percent
(100%) of the Membership Interests in Company (“Membership Interests”) allocated
as follows: LKV holds, owns and maintains Forty Five Percent (45%); MDM holds,
owns and maintains Forty Five Percent (45%); and FFT holds, owns and maintains
Ten Percent (10%);

 

WHEREAS, Buyer intends to purchase and acquire the Membership Interests in the
Company, as further described herein from Sellers (the “Transaction”); and

 

WHEREAS, the Parties desire and intend for this Agreement to govern the terms,
obligations and covenants of the Transaction;

 

AGREEMENT

 

NOW THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, and for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Parties agree as follows:

 

1. Purchase Price; Warrants. The total purchase price for the Membership
Interests will be paid by the issuance of warrants to purchase Five Million
(5,000,000) shares of Buyer’s common stock (“Shares”) at an exercise price of
One Cent ($0.01) per Share (the “Warrants”), as detailed and defined in Exhibit
A, attached and incorporated by reference herein.

 

(a) Issuance of Warrants. The Parties acknowledge and agree that the Warrants
shall be issued as follows:

 

  (i) 2,250,000 to LKV         (ii) 2,250,000 to MDM         (iii) 500,000 to
FFT

 

 

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(b) Piggy-Back Registration Rights. The Parties acknowledge and agree the Shares
underlying the Warrants (the “Warrant Shares”) shall have Piggy-Back
Registration rights, as defined herein this Section 1(b). Pursuant to the
Piggy-Back registration rights, granted herein, if Buyer proposes to register
any of its authorized, but unissued Shares (except: (i) pursuant to a Form S-8
registration statement; (i) pursuant to a registration statement filed to
register shares previously issued; or a registration statement filed to register
shares underlying warrants or convertible debt), it will give prompt written
notice to each of the Sellers, as the holder of the Warrants, of its intention
to effect such Registration (the “Incidental Registration”). Within ten (10)
business days of receiving such written notice of an Incidental Registration,
each of the Sellers may make a written request (the “Piggy-Back Request”) that
Buyer include in the proposed Incidental Registration all or a portion of the
Warrant Shares owned by the requesting Seller. In the event of a Piggy-Back
Request, Buyer will use all commercially reasonable efforts to include in any
Incidental Registration, the Warrant Shares which Buyer has been requested to
register pursuant to any timely Piggy-Back Request by Seller(s), to the extent
required to permit the disposition of the Warrant Shares, so to be registered;
however, Buyer shall not be obligated to effect a registration pursuant to
Seller(s) Piggy-Back Request, if Byer discontinues the related Incidental
Registration at any time prior to the effective date of any Incidental
Registration filing statement, filed in connection therewith. Notwithstanding
the foregoing, the Piggy-Back Registration Rights set forth herein shall not
apply to the initial Registration Statement to be filed by Buyer pursuant to
that certain Registration Rights Agreement of even date herewith between Buyer
and YA II PN, Ltd.

 

2. The Company’s Assets. The Parties acknowledge and agree that the Transaction
consists of the purchase of the Membership Interests. The Sellers agree theyhave
not caused, and will take no action to cause, the Company to assign, transfer or
dispose of any Assets prior to the date hereof. Parties acknowledge and agree
that “Assets” shall be defined as any tangible or intangible right, benefits,
contracts and agreements belonging to the Company, which shall include without
limitation (i) all patents, industrial designs, copyrights, trademarks, and
trade secrets (collectively, “Intellectual Property”); and (ii) Company’s wholly
owned subsidiary YLK Partners AZ, LLC, a Nevada limited liability company (“YLK
AZ”) and its assets, rights, benefits contracts and agreements. The Parties
further acknowledge and agree that YLK AZ provides certain services related to
the management, administration and operation of a duly-licensed medical
marijuana cultivation and processing facility in the State of Arizona, pursuant
to that certain Cultivation Management Services Agreement, dated January 5, 2018
(the “Management Agreement”), by and between YLK AZ and a duly licensed
Dispensary, as defined therein, pursuant to and in compliance with Title 9;
Chapter 17 of the Arizona Department of Health Services Medical Marijuana
Program (the “AZDHS Rules”) and A.R.S. § 36-2801 et seq., as amended from time
to time (the “Act”) (the AZDHS Rules and the Act collectively referred to herein
as the “AMMA”).

 

3. Due Diligence. Sellers have provided Buyer with all documents and materials
in its possession related to Company, and this Transaction, including but not
limited to financial data, tax records, business and corporate documentation,
business records, employee records, vendor contracts and agreements, records
regarding all monthly expenses and costs, environmental reports, operating
systems, managerial techniques, potential customer lists, engineering reports,
specifications and drawings, product and process data, applications, submittals
and approvals, all promissory notes, security agreements, contracts and
agreements evidencing any outstanding debt, liability or obligation which may
affect Sellers, Company, or YLK AZ, other similar documents and records related
to the business of Company, YLK AZ and/or Sellers, and any other information
reasonably requested by Buyer (the aforementioned collectively referred to as
the “Due Diligence Documents”). Buyer acknowledges that Sellers will deliver
many original documents and Buyer agrees to safeguard and keep in order all such
documents and return them, in the same condition as received either (i) upon
completion of the Due Diligence Period or, (ii) upon the earlier termination of
this Agreement.

 

 

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The Parties acknowledge and agree that the Due Diligence Period commenced upon
the effective date the LOI and shall continue through May 10, 2018 (the “Due
Diligence Period”). Buyer shall provide written notice to Sellers regarding any
concerns related to the Due Diligence Documents prior to the conclusion of the
Due Diligence Period. Upon the conclusion of the Due Diligence Period, Buyer
shall be deemed to have reviewed and accepted the Due Diligence Documents and
all the information contained therein.

 

4. Execution and Closing Date. The Parties acknowledge and agree to mutually act
in good faith to prepare, agree upon and execute this Agreement and all
ancillary documents described herein and required to complete the Transaction,
as further detailed and defined in Section 4, and the Parties further agree to
take all actions necessary to execute this Agreement and close the Transaction
(the “Closing”) on or before May 10, 2018 (“Closing Date”). The Parties shall
have the right to mutually agree in writing to extend the Closing Date for up to
one (1) week, until May 17, 2018.

 

5. Closing Deliverables. The Parties acknowledge and agree that on or before the
Closing Date, they shall have respectively provided the following:

 

(a) Sellers have provided Buyer a Resolution of Company, unanimously executed by
its Manager and Members, authorizing and approving the following: (i) the
Transaction; (ii) execution of this Agreement; (iii) the assignment, transfer
and conveyance of the Membership Interests to Buyer; and (iv) the adoption,
approval and execution of the restated and amended Operating Agreement of
Company reflecting the actions described herein and any additional agreed upon
terms and provisions regarding the governance, management and operation of
Company.

 

(b) Buyer has provided to Sellers the restated and amended Operating Agreement
of Company, reflecting the actions described herein and any additional required
terms, obligations and provisions related to the governance, management and
operation of Company requested by Buyer.

 

(c) Sellers have provided Buyer with all necessary assurances that evidence that
upon the Closing Date the Company has not nor is not seeking or requesting any
type of bankruptcy protection or bankruptcy procedure.

 

(d) Sellers have provided to Buyer all documents, agreements, or requested
documents pertaining to YLK AZ and the Management Agreement, pursuant to which,
YLK AZ shall continue to provide certain services related to the management,
administration and operation of the Dispensary’s Cultivation Facility (as
defined therein), pursuant to the AMMA and all rules, requirements and
regulations.

 

 

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(e) Buyer and Sellers have mutually prepared, secured, and/or executed, as
appropriate, all required governmental or third-party approvals, waivers,
disclosures or consents.

 

(f) Sellers have taken all actions necessary to acquire the necessary approvals
and authorizations and prepared and provided Buyer all documents necessary to
cause the assignment, transfer and conveyance of the Membership Interests and
all Assets, contracts and agreements in Company.

 

(g) Buyer has provided to Sellers the Warrant duly executed by the Company,
pursuant to and in accordance with Section 1 of this Agreement.

 

(h) Sellers shall take all reasonable actions, execute all documents, and
provide all assistance deemed reasonably necessary by Buyer to comply with the
intent of this Agreement.

 

(i) Buyer has taken all reasonable actions, executed all documents, and provided
all assistance deemed reasonably necessary by Sellers to comply with the intent
of this Agreement.

 

The deliverables described in the aforementioned (a) through (i) are
collectively referred to herein as the “Closing Deliverables”.

 

6. Representations and Warranties of Sellers. Each Seller represents, warrants,
and covenants severally but not jointly to Buyer, with the understanding Buyer
is relying upon such representations, warranties, and covenants that: (a) Each
Seller has the full right, power, and authority to enter into this Agreement and
be bound by the terms of this Agreement and have obtained the consent of any
other person or entity, other than as required herein; (b) the execution and
delivery of this Agreement and the performance by each Seller of its obligations
pursuant to this Agreement, do not and will not constitute a breach of or a
default under any other agreement or obligation applicable to such Seller; (c)
the execution and delivery of this Agreement by Sellers will constitute the
valid and binding obligation of such Seller; (d) to the knowledge of each
Seller, there are no actions, suits, proceedings, or investigations involving,
Company and/or YLK AZ, threatened against or involving such Seller, Company,
and/or YLK AZ, brought by any Seller, Company, and/or YLK AZ, affecting such
Seller, Company, and/or YLK AZ, or any of the rights and obligations described
therein, at law or in equity or before or by any federal, state, municipal, or
other governmental department, commission, board, agency, or instrumentality,
domestic or foreign, nor has any such action, suit, proceeding, or investigation
been pending during the twenty-four (24) month period preceding the Effective
Date; (e) all information supplied by any Seller, Company, and/or YLK AZ or its
agents to Buyer is, to such Seller’s knowledge, true, complete, and correct and
does not fail to state a material fact necessary to make any of such information
misleading; (f) each Seller has free, clear and unencumbered title to its
respective Membership Interests; (g) each Seller: (I) is acquiring the Warrants
pursuant to an exemption from registration under the Securities Act of 1934, as
amended (the “Securities Act”) solely for investment with no present intention
to distribute any of the securities to any person in violation of the Securities
Act or any other applicable securities laws, and (II) will not sell or otherwise
dispose of any of the Warrants, except in compliance with the registration
requirements or exemption provisions of the Securities Act and any other
applicable securities laws; and (i) each Seller has, will, and/or shall ensure
compliance of the Closing Deliverables applicable to such Seller, Company and/or
YLK AZ pursuant to Section 5 herein. The Parties agree the warranties provided
herein this Section 6 shall expire on the date that is twelve (12) months
following the Closing Date.

 

 

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7. Representations, Warranties, and Covenants of Buyer. Buyer represents,
warrants, and covenants to Sellers, with the understanding Sellers are relying
upon such representations, warranties, and covenants that: (a) Buyer has the
full right, power, and authority to enter into this Agreement and be bound by
the terms of this Agreement without the consent of any other person or entity;
(b) the execution and delivery of this Agreement, and the performance by Buyer
of its obligations pursuant to this Agreement, do not and will not constitute a
breach of or a default under any other agreement or obligation applicable to
Buyer; (c) the execution and delivery of this Agreement by Buyer will constitute
the valid and binding obligation of Buyer; (d) there are no material actions,
suits, proceedings, or investigations pending or, to the knowledge of Buyer,
threatened against or involving Buyer or its affiliates, or brought by Buyer or
its affiliates, affecting Buyer or its affiliates, or any of the rights and
obligations described herein, at law or in equity or before or by any federal,
state, municipal, or other governmental department, commission, board, agency,
or instrumentality, domestic or foreign, nor has any such action, suit,
proceeding, or investigation been pending during the twenty-four (24) month
period preceding the Effective Date; (e) all information supplied by Buyer or
its agents to Sellers or their agents is true, complete, and correct and does
not fail to state a material fact necessary to make any of such information
misleading; and (f) Buyer has or will comply with the Closing Deliverables
applicable to Buyer pursuant to Section 5 herein; and (g) Buyer has the
authority and ability to provide Sellers the Warrants in accordance with Section
1 herein. The Parties agree the warranties provided herein this Section 7 shall
expire on the date that is twelve (12) months following the Closing Date.

 

8. Indemnification. The Parties acknowledge and agree:

 

(a) Sellers shall severally but not jointly indemnify and hold Buyer, its
successors and assigns harmless from and against all losses, costs, damages,
claims, lawsuits and liabilities arising in connection with any third-party
claims concerning Company or YLK AZ arising prior to, or after the Closing Date
(each, a “Seller Claim”), if the basis of such Seller Claim stems from an act or
omission of Sellers prior to the Closing Date. Sellers shall be severally but
not jointly responsible for all reasonable attorneys’ fees, costs and expenses
incurred by Buyer in defense of any such Claim. The indemnification obligations
set forth herein, shall include by way of example and not limitation, the duty
to indemnify and hold Buyer harmless from and against any claims, demands,
actions, suits, arbitrations, assessments, adjustments, or other proceedings
regarding or resulting from any state or federal government tax filing,
including amendments to any such filing, on behalf of Company or YLK AZ, related
to the total revenue generated by Company or YLK AZ and reported to the any
State’s Department of Revenue and/or the Internal Revenue Service. The Parties
agree that Sellers’ obligation to defend, indemnify, and hold harmless Buyer as
described in this Agreement shall equally apply to Buyer and to Buyer’s former,
current, and future officers, directors, shareholders, subsidiaries, affiliates,
members, managers, principals, partners, agents, successors, and assigns.

 

(b) Buyer shall indemnify and hold Sellers, and their successors and assigns
harmless from and against all losses, costs, damages, claims, lawsuits and
liabilities arising in connection with any third-party claims concerning Buyer
arising prior to, or after the Closing Date (each, a “Buyer Claim”), if the
basis of such Buyer Claim stems from an act or omission of Buyer prior to the
Closing Date. Buyer shall be solely responsible for all reasonable attorneys’
fees, costs and expenses incurred by Sellers in defense of any such Claim. The
indemnification obligations set forth herein, shall include by way of example
and not limitation, the duty to indemnify and hold Sellers harmless from and
against any claims, demands, actions, suits, arbitrations, assessments,
adjustments, or other proceedings regarding or resulting from any state or
federal government tax filing, including amendments to any such filing, on
behalf of Buyer. The Parties agree that Buyer’s obligation to defend, indemnify,
and hold harmless Sellers as described in this Agreement shall equally apply to
Sellers and to Sellers’ former, current, and future officers, directors,
shareholders, subsidiaries, affiliates, members, managers, principals, partners,
agents, successors, and assigns.

 

 

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9. Alternative Dispute Resolution. The Parties acknowledge and agree, either
Party may elect to try and resolve any dispute, claim, or controversy arising
out of or relating to this Agreement by mediation. In the event such dispute
cannot be resolved by mediation, the dispute shall then be determined by
arbitration using the rules of the American Arbitration Association with three
(3) arbitrators selected in accordance with such rules, the venue for which will
be in Los Angeles, California. The arbitration judgment will be final and
binding upon the parties and may be entered in any court having jurisdiction
thereof.

 

10. Governing Law; Jurisdiction; Venue. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of California. Unless
otherwise resolved pursuant to Section 9, each Party: (a) consents to the
exclusive jurisdiction and venue of the Superior Court of the State of
California, located in Los Angeles County, California for the enforcement of
this Agreement and matters pertaining to the Transaction and activities
contemplated hereby; (b) waive any objection a Party might have to jurisdiction
or venue of such forum or that such forum is inconvenient; and (c) agree not to
bring any such action in any other jurisdiction or venue to which either Party
might be entitled by domicile or otherwise

 

11. Assignment; Parties Bound. This Agreement may not be assigned by either
Party without prior written consent of the other Party. This Agreement shall be
binding on and inure to the benefit of the Parties to this Agreement and their
respective heirs, executors, administrators, legal representatives, successors
and assigns as permitted by this Agreement.

 

12. Good Faith. The Parties hereto agree to operate and proceed in good faith to
accomplish the Transaction described herein. Any consent required under this
Agreement shall not be unreasonably withheld.

 

13. Notices. Any notices, demands, or communications required or permitted
hereunder shall be in writing and delivered in person, transmitted by facsimile,
or mailed via Federal Express or similar overnight delivery service, or by U.S.
registered or certified mail (return receipt requested), to the Parties at their
respective addresses as set forth herein. Any such notices shall be deemed to
have been duly given on the earlier of: (a) the date of its receipt; or (b) the
date that is three (3) days after its mailing as provided herein.

 

14. Severability. If any provision of this Agreement is held to be invalid or
unenforceable for any reason whatsoever, the remaining provisions shall remain
valid and unimpaired, and shall continue in full force and effect.

 

 

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15. Amendments. This Agreement may only be amended, revoked or otherwise changed
pursuant to the mutual written consent of the Parties.

 

16. Federal Government Action. The Parties hereby acknowledge that they are
aware of and fully understand that notwithstanding the State of Arizona’s
medical cannabis laws and the terms and conditions of this Agreement, Arizona
medical cannabis cultivators, transporters, distributors or possessors may still
be arrested by federal officers and prosecuted under federal law. In the event
of a federal arrest, seizure, or prosecution action associated with the Parties’
activities described herein, the Parties agree to hold each other and their
respective attorneys harmless and agree to be individually responsible for any
attorney’s fees associated with defending such actions. The Parties also agree
to waive illegality as a defense to any contract enforcement action related to
this Agreement and brought by either Party against the other Party.

 

17. Waiver. The failure of a Party to enforce any provision of this Agreement at
any time, to exercise any election or option provided herein, or to require at
any time the performance of any provisions herein will not in any way constitute
a waiver of such provision.

 

18. Attorneys’ Fees. Should any arbitration or litigation be commenced between
the Parties to this contract concerning the rights and duties of either Party in
relation to this Agreement, the substantially prevailing Party in the
arbitration or litigation shall be entitled to (in addition to any other relief
that may be granted) a reasonable sum as and for attorneys’ fees in the
arbitration or litigation, which sum shall be determined by the court or other
person presiding in the arbitration or litigation or in a separate action
brought for that purpose.

 

19. Entire Agreement. This Agreement supersedes all prior negotiations,
discussions, understandings and agreements between the Parties and constitutes
the sole and entire agreement of the Parties respecting the subject matter
hereof, and in no event, shall either Party be charged with any covenant,
representation, warranty, guaranty, indemnity or other agreement except to the
extent expressly stated in this Agreement.

 

20. Counterparts. To facilitate execution, this Agreement may be executed in as
many counterparts as may be deemed appropriate by the Parties, all of which when
taken together shall comprise one agreement.

 

 

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IN WITNESS WHEREOF, the Parties hereto have executed this Acquisition Agreement
as of the Effective Date.

 

“BUYER”         SOLIS TEK, INC.,   a Nevada corporation         By:     Name:
Alan Lien   Its: President         “SELLERS”         MDM CULTIVATION, LLC   a
Delaware limited liability company         By:     Name:     Its:           LK
VENTURES LLC,   a Nevada limited liability company         By:     Name:    
Its:           FUTURE FARM TECHNOLOGIES, INC.   a Canadian corporation        
By:     Name:     Its:           “COMPANY”   YLK PARTNERS NV, LLC, a Nevada
limited liability company, as Manager         By:     Name:     Its: Manager  

 

 

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EXHIBIT A

 

[See Attached Warrants]

 

 

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