mmen_ex1018.htm

EXHIBIT 10.18
  
 STOCK PURCHASE AGREEMENT
  
 By and between
  
 MATTHEW ABRAMS 
  
 JEREMY ABRAMS 
  
 JUDITH ABRAMS 
  
 SCOTT ANGONE 
  
 MARK MALAN
  
 and
  
 MM ENTERPRISES USA, LLC
  
 dated as of
  
 May 24, 2019
  
 	 
	1
	

	 

  
 TABLE OF CONTENTS
  
 	 ARTICLE I DEFINITIONS 
	  
	 5
	  

	 ARTICLE II PURCHASE AND SALE 
	  
	 10
	  

	 Section 2.01 Purchase and Sale 
	  
	 10
	  

	 Section 2.02 Purchase Price 
	  
	 10
	  

	 Section 2.03 Transactions to be Effected at the Closing 
	  
	 11
	  

	 Section 2.04 Purchase Price Adjustment 
	  
	 12
	  

	 Section 2.05 Closing 
	  
	 14
	  

	 Section 2.06 Withholding Tax 
	  
	 14
	  

	 ARTICLE III REPRESENTATIONS AND WARRANTIES Of the Equityholders and Company 
	  
	 14
	  

	 Section 3.01 Organization, Authority and Qualification of the Company 
	  
	 14
	  

	 Section 3.02 Capitalization 
	  
	 15
	  

	 Section 3.03 No Subsidiaries 
	  
	 15
	  

	 Section 3.04 No Conflicts; Consents 
	  
	 15
	  

	 Section 3.05 Financial Statements 
	  
	 16
	  

	 Section 3.06 Undisclosed Liabilities 
	  
	 16
	  

	 Section 3.07 Absence of Certain Changes, Events and Conditions 
	  
	 16
	  

	 Section 3.08 Material Contracts 
	  
	 19
	  

	 Section 3.09 Title to Assets; Real Property 
	  
	 20
	  

	 Section 3.10 Condition and Sufficiency of Assets. 
	  
	 21
	  

	 Section 3.11 Intellectual Property 
	  
	 21
	  

	 Section 3.12 Inventory 
	  
	 22
	  

	 Section 3.13 Accounts Receivable 
	  
	 22
	  

	 Section 3.14 Insurance 
	  
	 23
	  

	 Section 3.15 Legal Proceedings; Governmental Orders 
	  
	 23
	  

	 Section 3.16 Compliance With Laws; Permits 
	  
	 23
	  

	 Section 3.17 Environmental Matters 
	  
	 23
	  

	 Section 3.18 Employee Benefit Matters 
	  
	 24
	  

	 Section 3.19 Employment Matters 
	  
	 25
	  

	 Section 3.20 Taxes 
	  
	 25
	  

	 Section 3.22 Brokers. 
	  
	 26
	  

	 Section 3.23 Full Disclosure 
	  
	 26
	  


  
 	 
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 	 ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER 
	  
	 26
	  

	 Section 4.01 Organization and Authority of Buyer. 
	  
	 26
	  

	 Section 4.02 No Conflicts; Consents 
	  
	 27
	  

	 Section 4.03 Brokers. 
	  
	 27
	  

	 Section 4.04 Sufficiency of Funds 
	  
	 27
	  

	 Section 4.05 Legal Proceedings 
	  
	 27
	  

	 ARTICLE V COVENANTS 
	  
	 29
	  

	 Section 5.01 Conduct of Business Prior to the Closing 
	  
	 29
	  

	 Section 5.02 Access to Information 
	  
	 29
	  

	 Section 5.03 No Solicitation of Other Bids 
	  
	 30
	  

	 Section 5.04 Notice of Certain Events 
	  
	 30
	  

	 Section 5.05 Confidentiality 
	  
	 31
	  

	 Section 5.06 Non-competition; Non-solicitation 
	  
	 31
	  

	 Section 5.07 Governmental Approvals and Consents 
	  
	 32
	  

	 Section 5.08 Closing Conditions 
	  
	 32
	  

	 Section 5.09 Public Announcements 
	  
	 32
	  

	 Section 5.10 Employees 
	  
	 32
	  

	 Section 5.11 Further Assurances 
	  
	 33
	  

	 ARTICLE VI TAX MATTERS 
	  
	 33
	  

	 Section 6.01 Tax Covenants 
	  
	 33
	  

	 Section 6.02 Termination of Existing Tax Sharing Agreements 
	  
	 33
	  

	 Section 6.03 Tax Indemnification 
	  
	 33
	  

	 Section 6.04 Tax Treatment of Indemnification Payments 
	  
	 34
	  

	 Section 6.05 Survival. 
	  
	 34
	  

	 Section 6.06 Overlap 
	  
	 34
	  


  
 	 
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 	 ARTICLE VII CONDITIONS TO CLOSING 
	  
	 34
	  

	 Section 7.01 Conditions to Obligations of All Parties 
	  
	 34
	  

	 Section 7.02 Conditions to Obligations of Buyer. 
	  
	 34
	  

	 Section 7.03 Conditions to Obligations of Company 
	  
	 36
	  

	 ARTICLE VIII INDEMNIFICATION 
	  
	 37
	  

	 Section 8.01 Survival. 
	  
	 37
	  

	 Section 8.02 Indemnification By Company 
	  
	 37
	  

	 Section 8.03 Indemnification By Buyer. 
	  
	 37
	  

	 Section 8.04 Indemnification Procedures 
	  
	 38
	  

	 Section 8.05 Payments 
	  
	 40
	  

	 Section 8.06 Tax Treatment of Indemnification Payments 
	  
	 40
	  

	 Section 8.07 Effect of Investigation 
	  
	 40
	  

	 ARTICLE IX TERMINATION 
	  
	 40
	  

	 Section 9.01 Termination 
	  
	 40
	  

	 Section 9.02 Effect of Termination 
	  
	 41
	  

	 ARTICLE X MISCELLANEOUS 
	  
	 42
	  

	 Section 10.01 Expenses 
	  
	 42
	  

	 Section 10.02 Notices 
	  
	 42
	  

	 Section 10.03 Interpretation 
	  
	 42
	  

	 Section 10.04 Headings 
	  
	 43
	  

	 Section 10.05 Severability 
	  
	 43
	  

	 Section 10.06 Entire Agreement. 
	  
	 43
	  

	 Section 10.07 Successors and Assigns. 
	  
	 43
	  

	 Section 10.08 No Third-party Beneficiaries 
	  
	 43
	  

	 Section 10.09 Amendment and Modification; Waiver. 
	  
	 43
	  

	 Section 10.10 Governing Law; Submission to Jurisdiction; Waiver of Jury Trial. 
	  
	 44
	  

	 Section 10.11 Specific Performance 
	  
	 44
	  

	 Section 10.12 Counterparts 
	  
	 44
	  


  
 	 
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 STOCK PURCHASE AGREEMENT
  
 This Stock Purchase Agreement (this “Agreement”), dated as of May 24, 2019, is entered into by and between MM ENTERPRISES USA, LLC (“Buyer”) and each of Matthew Abrams, Jeremy Abrams, Judith Abrams, Scott Angone and Mark Malan (each an “Equityholder”, and collectively, the “Equityholders”).
  
 RECITALS
  
 WHEREAS, the Equityholders own 100% of the outstanding equity interests (the “Shares”) of MATTNJEREMY, INC., d/b/a ONE LOVE BEACH CLUB (the “Company”);
  
 WHEREAS, the Company owns and operates an adult use and medicinal cannabis dispensary under License Number M10-18-0000165-TEMP issued by the Bureau of Cannabis Control of California and City Cannabis License issued by the City of Long Beach (collectively, the “Cannabis Permits”) located at 2767 E Broadway St., Long Beach, CA 90803 (the “Business”);
  
 WHEREAS, the Equityholders wish to sell to Buyer, and Buyer wishes to purchase from the Equityholders, the Shares, subject to the terms and conditions set forth herein;
  
 NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
  
 ARTICLE I 
 DEFINITIONS
  
 The following terms have the meanings specified or referred to in this Article I:
  
 “Action” means any claim, action, cause of action, demand, lawsuit, arbitration, inquiry, audit, notice of violation, proceeding, litigation, citation, summons, subpoena or investigation of any nature, civil, criminal, administrative, regulatory or otherwise, whether at law or in equity.
  
 “Affiliate” of a Person means any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. The term “control” (including the terms “controlled by” and “under common control with”) means the possession, , of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract. Any Person owning more than 5% of the Company shall be deemed an Affiliate of the Company.
  
 “Agreement” has the meaning set forth in the preamble.
  
 “Annual Financial Statements” has the meaning set forth in Section 3.05.
  
 	 
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 “Business Day” means any day except Saturday, Sunday or any other day on which commercial banks located in Los Angeles, California are authorized or required by Law to be closed for business.
  
 “Buyer” has the meaning set forth in the preamble.
  
 “CERCLA” means the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. §§ 9601 et seq.
  
 “Code” means the Internal Revenue Code of 1986, as amended.
  
 “Company Intellectual Property” means all Intellectual Property that is owned by the Company.
  
 “Company IP Agreements” means all licenses, sublicenses, consent to use agreements, settlements, coexistence agreements, covenants not to sue, permissions and other Contracts (including any right to receive or obligation to pay royalties or any other consideration), whether written or oral, relating to Intellectual Property to which the Company is a party, beneficiary or otherwise bound.
  
 “Company IP Registrations” means all Company Intellectual Property that is subject to any issuance registration, application or other filing by, to or with any Governmental Authority or authorized private registrar in any jurisdiction, including registered trademarks, domain names and copyrights, issued and reissued patents and pending applications for any of the foregoing.
  
 “Contracts” means all contracts, leases, deeds, mortgages, licenses, instruments, notes, commitments, undertakings, indentures, joint ventures and all other agreements, commitments and legally binding arrangements, whether written or oral.
  
 “Disclosure Schedules” means the Disclosure Schedules delivered by the Company concurrently with the execution and delivery of this Agreement.
  
 “Dollars or $” means the lawful currency of the United States. 
  
 “Encumbrance” means any charge, claim, community property interest, pledge, condition, equitable interest, lien (statutory or other), option, security interest, mortgage, easement, encroachment, right of way, right of first refusal, or restriction of any kind, including any restriction on use, voting, transfer, receipt of income or exercise of any other attribute of ownership.
  
 “Environmental Claim” means any Action, Governmental Order, lien, fine, penalty, or, as to each, any settlement or judgment arising therefrom, by or from any Person alleging liability of whatever kind or nature (including liability or responsibility for the costs of enforcement proceedings, investigations, cleanup, governmental response, removal or remediation, natural resources damages, property damages, personal injuries, medical monitoring, penalties, contribution, indemnification and injunctive relief) arising out of, based on or resulting from: (a) the presence, Release of, or exposure to, any Hazardous Materials; or (b) any actual or alleged non-compliance with any Environmental Law or term or condition of any Environmental Permit.
   
 	 
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 “Environmental Law” means any applicable Law, and any Governmental Order or binding agreement with any Governmental Authority: (a) relating to pollution (or the cleanup thereof) or the protection of natural resources, endangered or threatened species, human health or safety, or the environment (including ambient air, soil, surface water or groundwater, or subsurface strata); or (b) concerning the presence of, exposure to, or the management, manufacture, use, containment, storage, recycling, reclamation, reuse, treatment, generation, discharge, transportation, processing, production, disposal or remediation of any Hazardous Materials. The term “Environmental Law” includes, without limitation, the following (including their implementing regulations and any state analogs): the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. §§ 9601 et seq.; the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976, as amended by the Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. §§ 6901 et seq.; the Federal Water Pollution Control Act of 1972, as amended by the Clean Water Act of 1977, 33 U.S.C. §§ 1251 et seq.; the Toxic Substances Control Act of 1976, as amended, 15 U.S.C. §§ 2601 et seq.; the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. §§ 11001 et seq.; the Clean Air Act of 1966, as amended by the Clean Air Act Amendments of 1990, 42 U.S.C. §§ 7401 et seq.; and the Occupational Safety and Health Act of 1970, as amended, 29 U.S.C. §§ 651 et seq.
  
 “Environmental Notice” means any written directive, notice of violation or infraction, or notice respecting any Environmental Claim relating to actual or alleged non-compliance with any Environmental Law or any term or condition of any Environmental Permit.
  
 “Environmental Permit” means any Permit, letter, clearance, consent, waiver, closure, exemption, decision or other action required under or issued, granted, given, authorized by or made pursuant to Environmental Law.
  
 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated thereunder.
  
 “ERISA Affiliate” means all employers (whether or not incorporated) that would be treated together with the Company or any of their Affiliates as a “single employer” within the meaning of Section 414 of the Code.
  
 “GAAP” means United States generally accepted accounting principles in effect from time to time.
  
 “Governmental Authority” means any federal, state, local or foreign government or political subdivision thereof, or any agency, including without limitation, the California Bureau of Cannabis Control, or instrumentality of such government or political subdivision, or any self- regulated organization or other non-governmental regulatory authority or quasi-governmental authority (to the extent that the rules, regulations or orders of such organization or authority have the force of Law), or any arbitrator, court or tribunal of competent jurisdiction.
  
 	 
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 “Governmental Order” means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority.
  
 “Hazardous Materials” means: (a) any material, substance, chemical, waste, product, derivative, compound, mixture, solid, liquid, mineral or gas, in each case, whether naturally occurring or manmade, that is hazardous, acutely hazardous, toxic, or words of similar import or regulatory effect under Environmental Laws; and (b) any petroleum or petroleum-derived products, radon, radioactive materials or wastes, asbestos in any form, lead or lead-containing materials, urea formaldehyde foam insulation, and polychlorinated biphenyls.
  
 “Intellectual Property” means all intellectual property and industrial property rights and assets, and all rights, interests and protections that are associated with, similar to, or required for the exercise of, any of the foregoing, however arising, pursuant to the Laws of any jurisdiction throughout the world, whether registered or unregistered, including any and all: (a) trademarks, service marks, trade names, brand names, logos, trade dress, design rights and other similar designations of source, sponsorship, association or origin, together with the goodwill connected with the use of and symbolized by, and all registrations, applications and renewals for, any of the foregoing; (b) internet domain names, whether or not trademarks, registered in any top-level domain by any authorized private registrar or Governmental Authority, web addresses, web pages, websites and related content, accounts with Twitter, Facebook and other social media of the Company, and URLs; (c) works of authorship, expressions, designs and design registrations, whether or not copyrightable, including copyrights, author, performer, moral and neighboring rights, and all registrations, applications for registration and renewals of such copyrights; (d) inventions, discoveries, trade secrets, business and technical information and know-how, databases, data collections and other confidential and proprietary information and all rights therein; (e) patents (including all reissues, divisionals, provisionals, continuations and continuations-in-part, re-examinations, renewals, substitutions and extensions thereof), patent applications, and other patent rights and any other Governmental Authority-issued indicia of invention ownership (including inventor's certificates, petty patents and patent utility models).
  
 “Knowledge or knowledge of the Company or the Company’s Knowledge” or any other similar knowledge qualification, means the actual or constructive knowledge of any manager or officer of the Company, after due inquiry.
  
 “Law” means any statute, law, ordinance, regulation, rule, code, order, constitution, treaty, common law, judgment, decree, other requirement or rule of law of any Governmental Authority.
  
 “Losses” means losses, damages, liabilities, deficiencies, Actions, judgments, interest, awards, penalties, fines, costs or expenses of whatever kind, including reasonable attorneys' fees and the cost of enforcing any right to indemnification hereunder and the cost of pursuing any insurance providers; provided, however, that “Losses” shall not include punitive damages, except in the case of fraud or to the extent actually awarded to a Governmental Authority or other third party.
  
 	 
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 “Material Adverse Effect” means any event, occurrence, fact, condition or change that is, or could reasonably be expected to become, individually or in the aggregate, materially adverse to (a) the business, results of operations, condition (financial or otherwise) or assets of the Company, or (b) the ability of the Company to consummate the transactions contemplated hereby (the “Transaction”) on a timely basis.
  
 “Permits” means all permits, licenses, franchises, approvals, authorizations, registrations, certificates, variances and similar rights obtained, or required to be obtained, from Governmental Authorities, including without limitation, the Cannabis Permits.
  
 “Person” means an individual, corporation, partnership, joint venture, limited liability company, Governmental Authority, unincorporated organization, trust, association or other entity.
  
 “Post-Closing Tax Period” means any taxable period beginning after the Closing Date and, with respect to any taxable period beginning before and ending after the Closing Date, the portion of such taxable period beginning after the Closing Date.
  
 “Post-Closing Taxes” means Taxes of the Company for any Post-Closing Tax Period. 
  
 “Pre-Closing Tax Period” means any taxable period ending on or before the Closing Date and, with respect to any taxable period beginning before and ending after the Closing Date, the portion of such taxable period ending on and including the Closing Date.
  
 “Pre-Closing Taxes” means Taxes of the Company for any Pre-Closing Tax Period. 
  
 “Real Property” means the real property owned, leased or subleased by the Company, together with all buildings, structures and facilities located thereon.
  
 “Release” means any actual or threatened release, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, abandonment, disposing or allowing to escape or migrate into or through the environment (including, without limitation, ambient air (indoor or outdoor), surface water, groundwater, land surface or subsurface strata or within any building, structure, facility or fixture).
  
 “Representative” means, with respect to any Person, any and all directors, officers, employees, consultants, financial advisors, counsel, accountants and other agents of such Person.
  
 “Restricted Business” means the retail business of dispensing marijuana or marijuana related products directly to the consumer.
   
 	 
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 “Taxes” means all federal, state, local, foreign and other income, gross receipts, sales, use, production, ad valorem, transfer, franchise, registration, profits, license, lease, service, service use, withholding, payroll, employment, unemployment, estimated, excise, severance, environmental, stamp, occupation, premium, property (real or personal), real property gains, windfall profits, customs, duties or other taxes, fees, assessments or charges of any kind whatsoever, together with any interest, additions or penalties with respect thereto and any interest in respect of such additions or penalties.
  
 “Tax Return” means any return, declaration, report, claim for refund, information return or statement or other document relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.
  
 “Territory” means the City of Long Beach and the 300-mile radius around it.
  
 “WARN Act” means the federal Worker Adjustment and Retraining Notification Act of 1988, and similar state, local and foreign laws related to plant closings, relocations, mass layoffs and employment losses.
  
 ARTICLE II 
 PURCHASE AND SALE
  
 Section 2.01 Purchase and Sale. Subject to the terms and conditions set forth herein, at the Closing, each Equityholder shall sell to Buyer, and Buyer shall purchase from each Equityholder, the Shares, free and clear of all Encumbrances, for the consideration specified in Section 2.02.
  
 Section 2.02 Purchase Price. The aggregate purchase price for the Shares shall be an amount equal to Thirteen Million Dollars ($13,000,000) (the “Purchase Price”) which shall be paid as follows:
  
 (a) at the Closing, One Million Dollars (US$1,000,000) in cash to a bank account designated by the Equityholders (the “Closing Cash”);
  
 (b) at the Closing, Ten Million United States Dollars ($10,000,000.00) of the Purchase Price (the “Closing Stock Value”) shall be payable in shares (“Closing Stock”) of Buyer’s publicly traded affiliate, MedMen Enterprises Inc., a British Columbia corporation (“Pubco”). The number of shares of Pubco which will be issued to comprise the Closing Stock shall be (i) the Closing Stock Value, divided by (ii) the product of (A) the volume-weighted average closing price Pubco on the Canadian Securities Exchange (“CSE”) during the 5-day period immediately prior to the Closing, and (B) the CAD to USD exchange rate as of the Closing. The Closing Stock shall not be sold or transferred for a period of one year pursuant to a Lock Up Agreement to be executed by the Equityholders at the Closing (the “Lock Up Agreement”). In exchange for the Lock Up Agreement, in the event that the Closing Stock Value decreases in value in between the Closing and one year after the Closing (the “Anniversary”), Buyer shall “true up” the Equityholders by issuing additional shares of Pubco stock such that on the Anniversary, the Pubco shares will still equal the Closing Stock Value. For illustrative purposes only, if the Closing Stock Value is $5.00 but on the Anniversary, the closing stock price is $4.00, Buyer will issue an additional 500,000 shares of Pubco such that the Equityholders will hold $10,000,000 in shares of Pubco on the Anniversary. There shall be no restrictions on transfer or sale of the Closing Stock; provided that the Closing Stock shall have customary 1933 Securities Act legends which will need to be removed prior to resale by the Equityholders prior to resale;
   
 	 
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 (c) One Million United States Dollars ($1,000,000.00) paid in cash to a bank account designated by the Equityholders six (6) months after the Closing (the “First Deferred Payment”); and
   
 (d) One Million United States Dollars ($1,000,000.00) paid in cash to a bank account designated by the Equityholders twelve (12) months after the Closing (together with the First Deferred Payment, the “Deferred Cash”). In the event Buyer is unable to make the Deferred Cash payment to Equityholders, Buyer’s publicly traded parent, MedMen Enterprises Inc., agrees to make such Deferred Cash payment on behalf of Buyer.
  
 (e) Any amount owing the Company by Buyer which is not paid on its due date shall bear a penalty of 5% of the amount owed.
  
 Section 2.03 Transactions to be Effected at the Closing.
  
 (a) At the Closing, Buyer shall deliver to the Equityholders:
  
 (i) the Closing Cash;
  
 (ii) the Closing Stock; and
  
 (iii) all other agreements, documents, instruments or certificates required to be delivered by Buyer at or prior to the Closing pursuant to Section 7.03 of this Agreement.
  
 (b) At the Closing, the Equityholders shall deliver to Buyer:
  
 (i) Stock certificates evidencing the transfer of the Shares to Buyer, free and clear of all Encumbrances, duly endorsed by each Equityholder, or such other evidence of transfer of the Shares satisfactory to Buyer, other than the equity interests of one of the Equityholders who is named as an Owner with the California Bureau of Cannabis Control (the “Remaining Owner”), which shall be placed in an escrow (the “Escrow”) mutually agreed to by the parties (the “Retained Interests”);.
  
 (ii) the Remaining Owner shall deposit with the Escrow the Retained Interests;
  
 (iii) all other agreements, documents, instruments or certificates required to be delivered by the Equityholders at or prior to the Closing pursuant to Section 7.02 of this Agreement.
   
 	 
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 Section 2.04 Purchase Price Adjustment.
  
 (a) Closing Adjustment.
  
 (i) At least three (3) Business Days before the Closing, the Equityholders shall prepare and deliver to Buyer a statement setting forth its good faith estimate of all inventory held by the Company (the “Estimated Closing Inventory”) using the same accounting methods, practices, principles, policies and procedures, with consistent classifications, judgments and valuation and estimation methodologies that were used in determining the Target Closing Inventory.
  
 (ii) The “Closing Adjustment” shall be an amount equal to the Estimated Closing Inventory minus $370,000 (the “Target Closing Inventory”). If the Closing Adjustment is a positive number, the Purchase Price shall remain the same. If the Closing Adjustment is a negative number, the Purchase Price shall be reduced by the amount of the Closing Adjustment (the Closing Cash first, then the Closing Stock second).
  
 (b) Post-Closing Adjustment.
  
 (i) Within 60 days after the Closing Date, Buyer shall have the option to prepare and deliver to the Equityholders a statement (“Closing Inventory Statement”) setting forth its calculation of the inventory held by the Company as of the Closing Date (the “Closing Inventory”).
  
 (ii) The post-closing adjustment shall be an amount equal to the Closing Inventory minus the Estimated Closing Inventory (the “Post-Closing Adjustment”). If the Post-Closing Adjustment is a positive number, Buyer shall not be required to make any additional payments pursuant to this Section 2.04. If the Post-Closing Adjustment is a negative number, the Equityholders shall pay to Buyer an amount equal to the Post-Closing Adjustment; provided that if the Estimated Closing Inventory exceeded the Target Closing Inventory, the Equityholders shall pay Buyer an amount of the difference between the Target Closing Inventory and the Closing Inventory.
  
 (c) Examination and Review.
  
 (i) Examination. After receipt of the Closing Inventory Statement, the Equityholders shall have 30 days (the “Review Period”) to review the Closing Inventory Statement.
  
 	 
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 (ii) Objection. On or prior to the last day of the Review Period, Equityholders may object to the Closing Inventory Statement by delivering to Buyer a written statement setting forth the Equityholders’ objections in reasonable detail, indicating each disputed item or amount and the basis for Equityholders’ disagreement therewith (the “Statement of Objections”). If the Equityholders fail to deliver the Statement of Objections before the expiration of the Review Period, the Closing Inventory Statement and the Post-Closing Adjustment, as the case may be, reflected in the Closing Inventory Statement shall be deemed to have been accepted by Equityholders. If the Equityholders deliver the Statement of Objections before the expiration of the Review Period, Buyer and Equityholders shall negotiate in good faith to resolve such objections within 30 days after the delivery of the Statement of Objections (the “Resolution Period”), and, if the same are so resolved within the Resolution Period, the Post-Closing Adjustment and the Closing Inventory Statement with such changes as may have been previously agreed in writing by Buyer and Equityholders, shall be final and binding.
  
 (iii) Resolution of Disputes. If the Equityholders and Buyer fail to reach an agreement with respect to all of the matters set forth in the Statement of Objections before expiration of the Resolution Period, then any amounts remaining in dispute (“Disputed Amounts” and any amounts not so disputed, the “Undisputed Amounts”) shall be submitted for resolution to the office of a nationally recognized firm of independent certified accountants which does not have a prior business relationship with either the Buyer or the Equityholders (the “Independent Accountant”) who, acting as experts and not arbitrators, shall resolve the Disputed Amounts only and make any adjustments to the Post-Closing Adjustment, as the case may be, and the Closing Inventory Statement. The Parties hereto agree that all adjustments shall be made without regard to materiality. The Independent Accountant shall only decide the specific items under dispute by the Parties and their decision for each Disputed Amount must be within the range of values assigned to each such item in the Closing Inventory Statement and the Statement of Objections, respectively.
  
 (iv) Fees of the Independent Accountant. The reasonable fees and expenses of the Independent Accountant shall be paid by Equityholders, on the one hand, and by Buyer, on the other hand, based upon the percentage that the amount actually contested but not awarded to Equityholders or Buyer, respectively, bears to the aggregate amount actually contested by Equityholders and Buyer.
  
 (v) Determination by Independent Accountant. The Independent Accountant shall make a determination as soon as practicable within 30 days (or such other time as the Parties hereto shall agree in writing) after their engagement, and their resolution of the Disputed Amounts and their adjustments to the Closing Inventory Statement and/or the Post-Closing Adjustment shall be conclusive and binding upon the Parties hereto.
  
 	 
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 (vi) Payments of Post-Closing Adjustment. Except as otherwise provided herein, any payment of the Post-Closing Adjustment shall (A) be due (x) within five Business Days of acceptance of the applicable Closing Inventory Statement or (y) if there are Disputed Amounts, then within five Business Days of the resolution described in clause (v) above; and (B) be paid in cash by wire transfer of immediately available funds to such account as is directed by Buyer or Equityholders, as the case may be.
  
 Section 2.05 Closing. Subject to the terms and conditions of this Agreement, the purchase and sale of the Shares and the other transaction contemplated hereby (the “Transaction”) shall take place electronically at a closing (the “Closing”) to be held at 10:00 a.m., Pacific Time, no later than two Business Days after the last of the conditions to Closing set forth in Article VII have been satisfied or waived (other than conditions which, by their nature, are to be satisfied on the Closing Date), or at such other time or on such other date or at such other place as the Equityholders and Buyer may mutually agree upon in writing (the day on which the Closing takes place being the “Closing Date”)
  
 Section 2.06 Withholding Tax. Buyer shall be entitled to deduct and withhold from the Purchase Price all Taxes that Buyer and the Company may be required to deduct and withhold under any provision of Tax Law. All such withheld amounts shall be treated as delivered to the Company hereunder.
  
 Section 2.07 Retained Interest Option. At any time after the Closing, Buyer shall have the right to purchase the Retained Interests from Remaining Owner for a purchase price of $100.00 by providing notice to the Escrow of its exercise. Upon notice to the Escrow and payment of the purchase price, Buyer shall take possession of the Retained Interest and shall be deemed the owner of the Retained Interest.
  
 ARTICLE III
 REPRESENTATIONS AND WARRANTIES OF THE COMPANY
  
 Except as set forth in the correspondingly numbered Section of the Disclosure Schedules, each Equityholder represents and warrants on a joint and several basis to Buyer that, the statements contained in this Article III are true and correct as of the date hereof and as of the Closing Date.
  
 Section 3.01 Organization, Authority and Qualification of the Company. The Company is a non-profit corporation duly formed, validly existing and in good standing under the Laws of the State of California and has full corporate power and authority to own, operate or lease the properties and assets now owned, operated or leased by it and to carry on its business as it has been and is currently conducted. Section 3.01 of the Disclosure Schedules sets forth each jurisdiction in which the Company are licensed or qualified to do business, and the Company are duly licensed or qualified to do business and are in good standing in each jurisdiction in which the properties owned or leased by them or the operation of the Business as currently conducted makes such licensing or qualification necessary. All corporate actions taken by the Company in
 connection with this Agreement will be duly authorized on or prior to the Closing. As of the Closing, the Company shall have converted from a non-profit corporation to a for profit corporation.
  
 	 
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 Section 3.02 Capitalization.
  
 (a) Section 3.02(a) of the Disclosure Schedules sets forth all of the equity interests issued and outstanding of the Company. All of the Shares have been duly authorized, are validly issued, fully paid and non-assessable, and are owned of record and beneficially by the Equityholders free and clear of all Encumbrances.
  
 (b) All of the Shares were issued in compliance with applicable Laws. None of the Shares were issued in violation of any agreement, arrangement or commitment to which the Company is a party or is subject to or in violation of any preemptive or similar rights of any Person.
  
 (c) Section 3.02(c) of the Disclosure Schedules sets forth authorized options, warrants, convertible securities or other rights, agreements, arrangements or commitments of any character relating to the capital stock of the Company or obligating the Company to issue or sell any shares of capital stock of, or any other interest in, the Company (collectively, the “Equity Instruments”). As of the Closing, all of the Equity Instruments will have been extinguished, paid in full or cancelled, with no further obligation to the Company or Buyer with respect to the Equity Instruments. The Company does not have outstanding or authorized any stock appreciation, phantom stock, profit participation or similar rights. There are no voting trusts, stockholder agreements, proxies or other agreements or understandings in effect with respect to the voting or transfer of any of the Shares.
  
 (d) Remaining Owner is named as an “owner” under the Company’s Cannabis Permit with the State of California
  
 Section 3.03 No Subsidiaries. The Company does not own or have any interest in any shares or have an ownership interest in any other Person.
  
 Section 3.04 No Conflicts; Consents. The execution, delivery and performance by the Company and Equityholder of this Agreement and the consummation of the transactions contemplated hereby do not and will not: (a) conflict with or result in a violation or breach of, or default under, any provision of the certificate of incorporation, bylaws, or other organizational documents of the Company; (b) conflict with or result in a violation or breach of any provision of any Law or Governmental Order applicable to the Company; (c) except as set forth in Section 3.4 of the Disclosure Schedules, require the consent, notice or other action by any Person under, conflict with, result in a violation or breach of, constitute a default or an event that, with or without notice or lapse of time or both, would constitute a default under, result in the acceleration of or create in any party the right to accelerate, terminate, modify or cancel any Contract to which the Company is a party or by which the Company is bound or to which any of its respective properties and assets are subject (including any Material Contract) or any Permit affecting the properties, assets or business of the Company; or (d) result in the creation or imposition of any Encumbrance other than Permitted Encumbrances on any properties or assets of the Company. Except as sets forth in Section 3.04(b) of the Disclosure Schedules, no consent, approval, Permit, Governmental Order, declaration or filing with, or notice to, any Governmental Authority is required by or with respect to the Company in connection with the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby.
  
 	 
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 Section 3.05 Financial Statements. Complete copies of the Company’s financial statements consisting of the balance sheets of the Company as at December 31 in each of the years 2018, 2017, 2016 and the related statements of income and retained earnings, member’s equity and cash flow for the years then ended (the “Annual Financial Statements”), and unaudited financial statements consisting of the balance sheet of the Company as at March 31, 2019 and the related statements of income and retained earnings, members' equity and cash flow for the period then ended (the “Interim Financial Statements” and together with the Annual Financial Statements, the “Financial Statements”) have been delivered to Buyer. The Financial Statements have been prepared in accordance with GAAP applied on a consistent basis throughout the period involved, subject, in the case of the Interim Financial Statements, to normal and recurring year-end adjustments (the effect of which will not be materially adverse) and the absence of notes. The Financial Statements are based on the books and records of the Company, and fairly present the financial condition of the Company as of the respective dates they were prepared and the results of the operations of the Company for the periods indicated. The balance sheet of the Company as of December 31, 2018 is referred to herein as the “Balance Sheet” and the date thereof as the “Balance Sheet Date” and the balance sheet of the Company as of March 31, 2019 is referred to herein as the “Interim Balance Sheet” and the date thereof as the “Interim Balance Sheet Date”. The Company maintain a standard system of accounting established and administered in accordance with GAAP.
  
 Section 3.06 Undisclosed Liabilities. To the Company’s knowledge Company has no liabilities, obligations or commitments of any nature whatsoever, asserted or unasserted, known or unknown, absolute or contingent, accrued or unaccrued, matured or unmatured or otherwise (“Liabilities”), except (a) those which are adequately reflected or reserved against in the Interim Balance Sheet as of the Interim Balance Sheet Date, and (b) those which have been incurred in the ordinary course of business consistent with past practice since the Interim Balance Sheet Date and which are not, individually or in the aggregate, material in amount. All Liabilities shall be paid and discharged as of the Closing. All unknown Liabilities that accrued prior to Closing but became known to Company after Closing shall be paid and discharged within thirty (30) days of receipt of notice.
  
 Section 3.07 Absence of Certain Changes, Events and Conditions. Since the Balance Sheet Date, and other than in the ordinary course of business consistent with past practice, there has not been, with respect to the Company, any:
  
 (a) event, occurrence or development that has had, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect;
  
 (b) material amendment of the charter, operating agreement or other organizational documents of the Company;
  
 	 
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 (c) split, combination or reclassification of any shares of its capital stock;
  
 (d) issuance, sale or other disposition of any of its capital stock, or grant of any options, warrants or other rights to purchase or obtain (including upon conversion, exchange or exercise) any of its capital stock;
  
 (e) declaration or payment of any dividends or distributions on or in respect of any of its capital stock or redemption, purchase or acquisition of its capital stock;
  
 (f) material change in any method of accounting or accounting practice of the Company, except as required by GAAP or as disclosed in the notes to the Financial Statements;
  
 (g) material change in the Company's cash management practices and its policies, practices and procedures with respect to collection of accounts receivable, establishment of reserves for uncollectible accounts, accrual of accounts receivable, inventory control, prepayment of expenses, payment of trade accounts payable, accrual of other expenses, deferral of revenue and acceptance of customer deposits;
  
 (h) entry into any Contract that would constitute a Material Contract, except for the assignment of Company’s option to purchase the Real Property (section 3.09(d);
  
 (i) incurrence, assumption or guarantee of any indebtedness for borrowed money except unsecured current obligations and Liabilities incurred in the ordinary course of business consistent with past practice;
  
 (j) transfer, assignment, sale or other disposition of any of the assets shown or reflected in the Balance Sheet or cancellation of any debts or entitlements;
  
 (k) transfer, assignment or grant of any license or sublicense of any material rights under or with respect to the Company Intellectual Property or Company IP Agreements;
  
 (l) material damage, destruction or loss (whether or not covered by insurance) to its property;
  
 (m) any capital investment in, or any loan to, any other Person;
  
 (n) acceleration, termination, material modification to or cancellation of any material Contract (including, but not limited to, any Material Contract) to which the Company is a party or by which it is bound, except for the assignment of Company’s option to purchase the Real Property (section 3.09(d);
  
 (o) any material capital expenditures;
  
 (p) imposition of any Encumbrance upon any of the Company’ properties, capital stock or assets, tangible or intangible;
  
 	 
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 (q) (i) grant of any bonuses, whether monetary or otherwise, or increase in any wages, salary, severance, pension or other compensation or benefits in respect of its current or former employees, officers, directors, independent contractors or consultants, other than as provided for in any written agreements or required by applicable Law or (ii) action to accelerate the vesting or payment of any compensation or benefit for any current or former employee, officer, director, independent contractor or consultant;
  
 (r) adoption, modification or termination of any: (i) employment, severance, retention or other agreement with any current or former employee, officer, director, independent contractor or consultant, (ii) Benefit Plan or (iii) collective bargaining or other agreement with a Union, in each case whether written or oral;
  
 (s) any loan to (or forgiveness of any loan to), or entry into any other transaction with, any of its stockholders or current or former directors, officers and employees;
  
 (t) purchase, lease or other acquisition of the right to own, use or lease any property or assets for an amount in excess of Ten Thousand Dollars ($10,000), individually (in the case of a lease, per annum) or Fifty Thousand Dollars ($50,000) in the aggregate (in the case of a lease, for the entire term of the lease, not including any option term), except for purchases of inventory or supplies in the ordinary course of business consistent with past practice;
  
 (u) acquisition by merger or consolidation with, or by purchase of a substantial portion of the assets or stock of, or by any other manner, any business or any Person or any division thereof;
  
 (v) action by the Company to make, change or rescind any Tax election, amend any Tax Return or take any position on any Tax Return, take any action, omit to take any action or enter into any other transaction that would have the effect of increasing the Tax liability or reducing any Tax asset of Buyer in respect of any Post-Closing Tax Period; or
  
 (w) any Contract to do any of the foregoing, or any action or omission that would result in any of the foregoing.
  
 	 
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 Section 3.08 Material Contracts.
  
 (a) Section 3.08(a) of the Disclosure Schedules lists each of the following Contracts of the Company (such Contracts, together with all Contracts concerning the occupancy, management or operation of any Real Property (including without limitation, brokerage contracts) listed or otherwise disclosed in Section 3.09(b) of the Disclosure Schedules and all Company IP Agreements set forth in Section 3.11(b) of the Disclosure Schedules, being “Material Contracts”):
  
 (i) each Contract of the Company involving aggregate consideration in excess of Ten Thousand Dollars ($10,000) and which, in each case, cannot be cancelled by the Company without penalty or without more than 90 days' notice;
  
 (ii) all Contracts that provide for the indemnification by the Company of any Person or the assumption of any Tax, environmental or other Liability of any Person;
  
 (iii) all Contracts that relate to the acquisition or disposition of any business, a material amount of stock or assets of any other Person or any real property (whether by merger, sale of stock, sale of assets or otherwise);
  
 (iv) all employment agreements and Contracts with independent contractors or consultants (or similar arrangements) to which the Company is a party;
  
 (v) all Contracts relating to indebtedness (including, without limitation, guarantees) of the Company;
  
 (vi) all Contracts with any Governmental Authority to which the Company is a party (“Government Contracts”);
  
 (vii) all Contracts that limit or purport to limit the ability of the Company to compete in any line of business or with any Person or in any geographic area or during any period of time;
  
 (viii) all Contracts between the Company on the one hand and any member or Affiliate of the Company on the other hand;
  
 (ix) all collective bargaining agreements or Contracts with any Union to which the Company is a party; and
  
 (x) any other Contract that is material to the Company and not previously disclosed pursuant to this Section 3.08.
  
 (b) Each Material Contract is valid and binding on the Company in accordance with its terms and is in full force and effect. To Company’s knowledge, the Company and the other party to each Material Contract is not in breach of or default under (or is alleged to be in breach of or default under), or has provided or received any notice of any intention to terminate, any Material Contract. No event or circumstance has occurred that, with notice or lapse of time or both, would constitute an event of default under any Material Contract or result in a termination thereof or would cause or permit the acceleration or other changes of any right or obligation or the loss of any benefit thereunder. Complete and correct copies of each Material Contract (including all modifications, amendments and supplements thereto and waivers thereunder) have been made available to Buyer.
  
 	 
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 Section 3.09 Title to Assets; Real Property.
  
 (a) The Company has a valid leasehold interest in, all Real Property and personal property and other assets reflected in the Annual Financial Statements or acquired after the Balance Sheet Date, other than properties and assets sold or otherwise disposed of in the ordinary course of business consistent with past practice since the Balance Sheet Date. All such properties and assets (including leasehold interests) are free and clear of Encumbrances except for the following (collectively referred to as “Permitted Encumbrances”):
  
 (i) liens for Taxes not yet due and payable; or
  
 (ii) mechanics, carriers', workmen's, repairmen's or other like liens arising or incurred in the ordinary course of business consistent with past practice or amounts that are not delinquent and which are not, individually or in the aggregate, material to the Business.
  
 (b) Section 3.09(b) of the Disclosure Schedules sets forth a true, correct and complete list of all Real Property and interests in Real Property leased or subleased by the Company as lessee (collectively, the “Leased Properties”) and identifies for each lease of Leased Property (individually, a “Lease” and, collectively, the “Leases”) the parties thereto, the address of the property subject thereto, the rent payable thereunder, the terms of any renewal options, the substance of any amendments or modifications thereto and any reciprocal easement or operating agreements relating thereto. The Company has a good, marketable and valid leasehold interest in each Leased Property, subject only to Permitted Liens. The Company has previously delivered to the Buyer, correct and complete copies of each Lease, together with all amendments, modifications, supplements, waivers and side letters related thereto. With respect to each Lease: (i) the Lease is legal, valid, binding, enforceable and in full force and effect; (ii) none of the Company, nor any other party to the Lease is in breach or default thereunder, and no event has occurred which, with notice or lapse of time or both, would constitute such a breach or default or permit termination, modification or acceleration under the Lease; (iii) no party to the Lease has repudiated any provision thereof; (iv) there are no disputes or oral agreements in effect as to the Lease; (v) the Lease has not been modified in any respect, except to the extent that such modifications are disclosed by the documents delivered to the Buyer; and (vi) no Company has assigned, transferred, conveyed, mortgaged, deeded in trust or encumbered any interest in the Lease. Notwithstanding the foregoing, Buyer agrees and acknowledges that Company had a contractual option to purchase the Real Property from Landlord, and Company has assigned that option to purchase to AAM Holdings, LLC. Matthew Abrams has exercised that option to purchase the Real Property, and upon the successful closing of that transaction, shall become the landlord to Buyer with respect to the Lease and Property
  
 (c) With respect to each Real Property: (i) the current use of such Real Property and the operation of Business thereon does not violate any instrument of record or Contract affecting such Real Property, or any applicable Law in any material respect (without any fines or monetary Liabilities attached); (ii) there are no leases, subleases, licenses, concessions or other Contracts, written or oral, granting to any Person the right of use or occupancy of any portion of such Real Property except in favor of the Company; and (iii) there are no Persons in possession of such Real Property except the Company.
  
 	 
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 (d) The Company has all certificates of occupancy and Permits necessary for the current use and operation of each Real Property. Such Permits have been validly issued by the appropriate Governmental Authority in compliance with all applicable Laws, and the applicable has fully complied with all conditions of the Permits applicable to it. All such Permits are in full force and effect without further consent or approval of any Person.
  
 (e) No part of any Real Property is subject to any building or use restrictions that would restrict or prevent the operation of the Business on such Real Property, and each Real Property is properly and duly zoned for its current use, and such current use is in all respects a conforming use. No Governmental Authority having jurisdiction over any Real Property has issued or, to the knowledge of the Company, threatened to issue any notice or order, injunction, judgment, decree, ruling, writ or arbitration award that adversely affects the use or operation of any Real Property.
  
 (f) There does not exist any actual or, to the knowledge of the Company, threatened or contemplated, condemnation or eminent domain proceedings that affect any Real Property or any part thereof, and no Company has received any notice, oral or written, of the intention of any Governmental Authority or other Person to take or use any Real Property or any part thereof.
  
 Section 3.10 Condition and Sufficiency of Assets. The, plants, , furniture, fixtures, machinery, equipment, vehicles and other items of tangible personal property of the Company are structurally sound, are in good operating condition and repair, and are adequate for the uses to which they are being put, and none of such, plants, structures, furniture, fixtures, machinery, equipment, vehicles and other items of tangible personal property is in need of maintenance or repairs except for ordinary, routine maintenance and repairs that are not material in nature or cost. The, plants, structures, furniture, fixtures, machinery, equipment, vehicles and other items of tangible personal property currently owned or leased by the Company, together with all other properties and assets of the Company, are sufficient for the continued conduct of the Business after the Closing in substantially the same manner as conducted prior to the Closing and constitute all of the rights, property and assets necessary to conduct the Business as currently conducted.
  
 Section 3.11 Intellectual Property.
  
 (a) The Company is the sole and exclusive legal and beneficial, and with respect to the Company IP Registrations, record, owner of all right, title and interest in and to the Company Intellectual Property, and has the valid right to use all other Intellectual Property used in or necessary for the conduct of the Company's current business or operations, in each case, free and clear of Encumbrances other than Permitted Encumbrances. Without limiting the generality of the foregoing, the Company has entered into binding, written agreements with every current and former employee of the Company, and with every current and former independent contractor, whereby such employees and independent contractors (i) assign to the Company any ownership interest and right they may have in the Company Intellectual Property; and (ii) acknowledge the Company's exclusive ownership of all Company Intellectual Property. The Company has provided Buyer with true and complete copies of all such agreements.
  
 	 
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 (b) The Company has taken all reasonable steps to maintain the Company Intellectual Property and to protect and preserve the confidentiality of all trade secrets included in the Company Intellectual Property, including requiring all Persons having access thereto to execute written non-disclosure agreements.
  
 (c) The conduct the Business as currently and formerly conducted, and the products, processes and services of the Company, have not infringed, misappropriated, diluted or otherwise violated, and do not and will not infringe, dilute, misappropriate or otherwise violate the Intellectual Property or other rights of any Person. No Person has infringed, misappropriated, diluted or otherwise violated, or is currently infringing, misappropriating, diluting or otherwise violating, the Company Intellectual Property.
  
 (d) There are no Actions (including any oppositions, interferences or re- examinations) settled, pending or threatened (including in the form of offers to obtain a license): (i) alleging any infringement, misappropriation, dilution or violation of the Intellectual Property of any Person by the Company; or (ii) challenging the validity, enforceability, registrability or ownership of the Company Intellectual Property or the Company’ rights with respect to the Company Intellectual Property. The Company are not subject to any outstanding or prospective Governmental Order (including any motion or petition therefor) that does or would restrict or impair the use of the Company Intellectual Property.
  
 Section 3.12 Inventory. All inventory of the Company, whether or not reflected in the Balance Sheet, consists of a quality and quantity usable and salable in the ordinary course of business consistent with past practice. All such inventory is owned by the Company free and clear of all Encumbrances, and no inventory is held on a consignment basis. As of the Closing, the Company will have a level of Inventory consistent with past practice and sufficient for the Business to be conducted after the Closing in the same manner as of the date hereof.
  
 Section 3.13 Accounts Receivable. The accounts receivable reflected on the Interim Balance Sheet and the accounts receivable arising after the date thereof (a) have arisen from bona fide transactions entered into by the Company involving the sale of goods or the rendering of services in the ordinary course of business consistent with past practice; (b) constitute only valid, undisputed claims of the Company not subject to claims of set-off or other defenses or counterclaims other than normal cash discounts accrued in the ordinary course of business consistent with past practice and (c) are fully collectable after the Closing.
  
 	 
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 Section 3.14 Insurance. Section 3.14 of the Disclosure Schedules sets forth a true and complete list of all current policies or binders of fire, liability, product liability, umbrella liability, real and personal property, workers' compensation, vehicular, directors and officers' liability, fiduciary liability and other casualty and property insurance maintained by the Company (collectively, the “Insurance Policies”) and true and complete copies of such Insurance Policies have been made available to Buyer. Such Insurance Policies are in full force and effect and shall remain in full force and effect following the consummation of the transactions contemplated by this Agreement. All premiums due on such Insurance Policies have either been paid or, if due and payable prior to Closing, will be paid prior to Closing in accordance with the payment terms of each Insurance Policy.
  
 Section 3.15 Legal Proceedings; Governmental Orders.
  
 (a) There are no Actions pending or, to the Company’s Knowledge, threatened (a) against or by the Company or which otherwise affects the Business; or (b) against or by the Company or any Affiliate of the Company that challenges or seeks to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement. No event has occurred or circumstances exist that may give rise to, or serve as a basis for, any such Action.
  
 (b) There are no outstanding Governmental Orders and no unsatisfied judgments, penalties or awards against or affecting the Company or any of their properties or assets.
  
 Section 3.16 Compliance With Laws; Permits.
  
 (a) Except as set forth in Section 3.16(a) of the Disclosure Schedules, to Company’s knowledge, the Company has complied, and is now complying, with all Laws applicable to it or its business, properties or assets.
  
 (b) All Permits required for the Company to conduct the Business, including without limitation the Cannabis Permits, have been obtained by it and are valid and in full force and effect. All fees and charges with respect to such Permits as of the date hereof have been paid in full. Section 3.16(b) of the Disclosure Schedules lists all current Permits issued to the Company, including the names of the Permits and their respective dates of issuance and expiration. No event has occurred that, with or without notice or lapse of time or both (including after the Closing), which would reasonably be expected to result in the revocation, suspension, lapse or limitation of any Permit.
  
 Section 3.17 Environmental Matters.
  
 (a) The Company is currently and has been in compliance with all Environmental Laws and has not received from any Person any: (i) Environmental Notice or Environmental Claim; or (ii) written request for information pursuant to Environmental Law, which, in each case, either remains pending or unresolved, or is the source of ongoing obligations or requirements as of the Closing Date.
  
 (b) The Company has obtained and are in material compliance with all Environmental Permits necessary for the Business.
  
 	 
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 (c) No real property currently or formerly owned, operated or leased by the Company is listed on, or has been proposed for listing on, the National Priorities List (or CERCLIS) under CERCLA, or any similar state list.
  
 (d) To Company’s knowledge, there has been no Release of Hazardous Materials in contravention of Environmental Law with respect to the business or assets of the Company or any real property currently or formerly owned, operated or leased by the Company, and the Company has not an Environmental Notice that any real property currently or formerly owned, operated or leased in connection with the Business (including soils, groundwater, surface water, buildings and other structure located on any such real property) has been contaminated with any Hazardous Material which could reasonably be expected to result in an Environmental Claim against, or a violation of Environmental Law or term of any Environmental Permit by the Company.
  
 (e) The Company has provided or otherwise made available to Buyer: (i) any and all environmental reports, studies, audits, records, sampling data, site assessments, risk assessments, economic models and other similar documents with respect to the business or assets of the Company or any currently or formerly owned, operated or leased real property which are in the possession or control of the Company related to compliance with Environmental Laws, Environmental Claims or an Environmental Notice or the Release of Hazardous Materials; and (ii) any and all material documents concerning planned or anticipated capital expenditures required to reduce, offset, limit or otherwise control pollution and/or emissions, manage waste or otherwise ensure compliance with current or future Environmental Laws (including, without limitation, costs of remediation, pollution control equipment and operational changes).
  
 Section 3.18 Employee Benefit Matters.
  
 (a) The Company does not have any Liability with respect any pension, benefit, retirement, compensation, employment, consulting, profit-sharing, deferred compensation, incentive, bonus, performance award, phantom equity, stock or stock- based, change in control, retention, severance, vacation, paid time off, welfare, fringe- benefit and other similar agreement, plan, policy, program or arrangement (and any amendments thereto), in each case whether or not reduced to writing and whether funded or unfunded, including each “employee benefit plan” within the meaning of Section 3(3) of ERISA, whether or not tax-qualified and whether or not subject to ERISA, which is or has been maintained, sponsored, contributed to, or required to be contributed to by the Company for the benefit of any current or former employee, officer, director, retiree, independent contractor or consultant of the Company or any spouse or dependent of such individual, or under which the Company or any of their ERISA Affiliates has or may have any Liability, or with respect to which Buyer or any of its Affiliates would reasonably be expected to have any Liability, contingent or otherwise (each, a “Benefit Plan”).
  
 	 
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 (b) Neither the execution of this Agreement nor any of the transactions contemplated by this Agreement will (either alone or upon the occurrence of any additional or subsequent events): (i) entitle any current or former director, officer, employee, independent contractor or consultant of the Company to severance pay or any other payment; (ii) accelerate the time of payment, funding or vesting, or increase the amount of compensation due to any such individual; (iii) limit or restrict the right of the Company to merge, amend or terminate any Benefit Plan; (iv) increase the amount payable under or result in any other material obligation pursuant to any Benefit Plan; (v) result in “excess parachute payments” within the meaning of Section 280G(b) of the Code; or (vi) require a “gross-up” or other payment to any “disqualified individual” within the meaning of Section 280G(c) of the Code.
  
 Section 3.19 Employment Matters.
   
 (a) Schedule 3.19(a) of the Disclosure Schedules contains a list of all persons who are employees, independent contractors or consultants of the Company as of the date hereof, including any employee who is on a leave of absence of any nature, paid or unpaid, authorized or unauthorized, and sets forth for each such individual the following: (i) name; (ii) title or position (including whether full or part time); (iii) hire date; (iv) current annual base compensation rate; (v) commission, bonus or other incentive-based compensation; and (vi) a description of the fringe benefits provided to each such individual as of the date hereof. As of the date hereof, all compensation, including wages, commissions and bonuses, payable to all employees, independent contractors or consultants of the Company for services performed on or prior to the date hereof have been paid in full and there are no outstanding agreements, understandings or commitments of the Company with respect to any compensation, commissions or bonuses.
  
 (b) The Company has been a party to, and is bound by, collective bargaining agreement or other Contract with a union, works council or labor organization (collectively, “Union”).
  
 (c) The Company is and has been in compliance all applicable Laws pertaining to employment and employment practices, including all Laws relating to labor relations, equal employment opportunities, fair employment practices, employment discrimination, harassment, retaliation, reasonable accommodation, disability rights or benefits, immigration, wages, hours, overtime compensation, child labor, hiring, promotion and termination of employees, working conditions, meal and break periods, privacy, health and safety, workers' compensation, leaves of absence and unemployment insurance.
  
 Section 3.20 Taxes.
  
 (a) All Tax Returns required to be filed on or before the Closing Date by the Company has been, or will be, timely filed. Such Tax Returns are, or will be, true, complete and correct in all respects. All Taxes due and owing by the Company (whether or not shown on any Tax Return) have been, or will be, timely paid.
  
 (b) The Company has withheld and paid each Tax required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, customer, shareholder or other party, and complied with all information reporting and backup withholding provisions of applicable Law.
  
 	 
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 (c) No claim has been made by any taxing authority in any jurisdiction where the Company does not file Tax Returns that it is, or may be, subject to Tax by that jurisdiction.
  
 (d) No extensions or waivers of statutes of limitations have been given or requested with respect to any Taxes of the Company.
  
 (e) All deficiencies asserted, or assessments made, against the Company as a result of any examinations by any taxing authority have been fully paid.
  
 (f) The Company is not a party to any Action by any taxing authority. There are no pending or threatened Actions by any taxing authority.
  
 (g) The Company has have delivered to Buyer copies of all federal, state, local and foreign income, franchise and similar Tax Returns, examination reports, and statements of deficiencies assessed against, or agreed to by, the Company.
  
 (h) There are no Encumbrances for Taxes (other than for current Taxes not yet due and payable) upon the assets of the Company.
  
 Section 3.21 Brokers. No broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Company.
  
 Section 3.22 Full Disclosure. No representation or warranty by the Company in this Agreement and no statement contained in the Disclosure Schedules to this Agreement or any certificate or other document furnished or to be furnished to Buyer pursuant to this Agreement contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements contained therein, in light of the circumstances in which they are made, not misleading.
  
 ARTICLE IV 
 REPRESENTATIONS AND WARRANTIES OF BUYER
  
 Buyer represents and warrants to the Equityholders that the statements contained in this Article IV are true and correct as of the date hereof.
  
 Section 4.01 Organization and Authority of Buyer. Buyer is a limited liability company duly formed, validly existing and in good standing under the Laws of the State of Delaware. Buyer has full limited liability company power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. The execution and delivery by Buyer of this Agreement, the performance by Buyer of its obligations hereunder and the consummation by Buyer of the transactions contemplated hereby have been duly authorized by all requisite limited liability action on the part of Buyer. This Agreement has been duly executed and delivered by Buyer, and (assuming due authorization, execution and delivery by Equityholder) this Agreement constitutes a legal, valid and binding obligation of Buyer enforceable against Buyer in accordance with its terms.
  
 	 
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 Section 4.02 No Conflicts; Consents. The execution, delivery and performance by Buyer of this Agreement, and the consummation of the transactions contemplated hereby do not and will not: (a) conflict with or result in a violation or breach of, or default under, any provision of the articles of incorporation, bylaws or other organizational documents of Buyer; (b) conflict with or result in a violation or breach of any provision of any Law or Governmental Order applicable to Buyer; or (c) require the consent, notice or other action by any Person under any Contract to which Buyer is a party.
  
 Section 4.03 Brokers. No broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Buyer.
  
 Section 4.04 Sufficiency of Funds. Buyer has sufficient cash on hand or other sources of immediately available funds to enable it to make payment of the Purchase Price and consummate the Transaction, as contemplated by this Agreement.
  
 Section 4.05 Legal Proceedings. There are no Actions pending or, to Buyer's knowledge, threatened against or by Buyer or any Affiliate of Buyer that challenges or seeks to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement. To Buyer’s knowledge, no event has occurred or circumstances exist that may give rise or serve as a basis for any such Action.
  
 	 
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 Neither Buyer nor any of its affiliates, nor, to Buyer’s knowledge, any of their respective partners, members, shareholders or other equity owners, or their respective employees, officers directors, representatives or agents is, nor will they become, a person or entity with whom U.S. persons or entities are restricted from doing business under any OFAC regulations (including those named on OFAC’s Specially Designated and Blocked Persons List) or under any statute, executive order (including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism), or other governmental action and is not and will not assign or otherwise transfer this Agreement to, contract with or otherwise engage in any dealings of transactions or be otherwise associated with such persons or entities.
  
 Buyer acknowledges and agrees that Buyer has made, or will make prior to Closing, such independent investigations, inspections, analyses and research as Buyer has deemed necessary or appropriate (or, in the alternative, Buyer has elected at its risk not to make such investigations, inspections, analyses and research), concerning the condition, ownership, use and operation of the Company and Property.
  
 In entering into this Agreement, Buyer is relying solely upon (i) its own inspections, investigations, research and analyses of the matters set forth above, and (ii) the express representations and warranties of Company set forth above and elsewhere in this Agreement and in any documents to be delivered by Company to Buyer at Closing or Disclosure Schedules, and Buyer is not relying in any way upon any other representations, warranties, statements, plans, specifications, cost estimates, studies, reports, descriptions, guidelines or other information or material furnished by Company or Equityholders or their representatives to Buyer or its representatives, whether oral or written, express or implied, of any nature whatsoever regarding any such matters.
  
 BUYER ACKNOWLEDGES AND AGREES THAT, EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN ANY CLOSING DOCUMENTS TO BE DELIVERED BY SELLER TO BUYER AT CLOSING, NEITHER COMPANY, EQUITYHOLDERS OR ANY OF THEIR AFFILIATES, NOR ANY OF THEIR RESPECTIVE SHAREHOLDERS, MEMBERS, PARTNERS, TRUSTEES, BENEFICIARIES, DIRECTORS, OFFICERS, MANAGERS, EMPLOYEES, ATTORNEYS, ACCOUNTANTS, CONTRACTORS, CONSULTANTS, AGENTS OR REPRESENTATIVES, NOR ANY PERSON PURPORTING TO REPRESENT ANY OF THE FOREGOING, HAVE MADE ANY REPRESENTATION, WARRANTY, GUARANTY, PROMISE, PROJECTION OR PREDICTION WHATSOEVER WITH RESPECT TO THE COMPANYT OR PROPERTY OR THE BUSINESS, WRITTEN OR ORAL, EXPRESS OR IMPLIED, ARISING BY OPERATION OF LAW OR OTHERWISE, INCLUDING, WITHOUT LIMITATION, ANY REPRESENTATION OR WARRANTY AS TO (I) THE CONDITION, SAFETY, QUANTITY, QUALITY, USE, OCCUPANCY OR OPERATION OF THE PROPERTY, (II) THE PAST, PRESENT OR FUTURE REVENUES OR EXPENSES WITH RESPECT TO THE COMPANY, PROPERTY OR THE BUSINESS
  
 	 
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 ARTICLE V 
 COVENANTS
  
 Section 5.01 Conduct of Business Prior to the Closing. From the date hereof until the Closing, except as otherwise provided in this Agreement or consented to in writing by Buyer (which consent shall not be unreasonably withheld or delayed), the Equityholders shall cause to the Company to (x) conduct the Business in the ordinary course of business consistent with past practice; and (y) use reasonable best efforts to maintain and preserve intact the current organization, business and franchise of the Company and to preserve the rights, franchises, goodwill and relationships of its employees, customers, lenders, suppliers, regulators and others having business relationships with the Company. Without limiting the foregoing, from the date hereof until the Closing Date, the Company shall:
  
 (a) preserve and maintain all of their Permits;
  
 (b) pay their debts, Taxes and other obligations when due;
  
 (c) maintain the properties and assets owned, operated or used by the Company in the same condition as they were on the date of this Agreement, subject to reasonable wear and tear;
  
 (d) perform all of their obligations, assets or business;
  
 (e) comply in all material respects with all applicable Laws; and
  
 (f) not take any action that would cause any of the changes, events or conditions described in Section 3.07 to occur.
  
 Section 5.02 Access to Information. From the date hereof until the Closing, the Equityholders shall (a) afford Buyer and its Representatives full and free access to and the right to inspect all of the Real Property, properties, assets, premises, books and records, Contracts and other documents and data related to the Company; (b) furnish Buyer and its Representatives with such financial, operating and other data and information related to the Company as Buyer or any of its Representatives may reasonably request; and (c) instruct the Representatives of the Company to cooperate with Buyer in its investigation of the Company. No investigation by Buyer or other information received by Buyer shall operate as a waiver or otherwise affect any representation, warranty or agreement given or made by the Company in this Agreement. Additionally, each Equityholder agrees for a period of 18 months after the Closing, to respond to reasonable requests for information regarding the Business from Buyer within seven Business Days of such request.
   
 	 
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 Section 5.03 No Solicitation of Other Bids.
  
 (a) Each Equityholder shall not and shall cause the Company not to authorize or permit any of its Affiliates or any of its or their Representatives to, directly or indirectly, (i) encourage, solicit, initiate, facilitate or continue inquiries regarding an Acquisition Proposal; (ii) enter into discussions or negotiations with, or provide any information to, any Person concerning a possible Acquisition Proposal; or (iii) enter into any agreements or other instruments (whether or not binding) regarding an Acquisition Proposal. The Company shall immediately cease and cause to be terminated, and shall cause its Affiliates and all of its and their Representatives to immediately cease and cause to be terminated, all existing discussions or negotiations with any Persons conducted heretofore with respect to, or that could lead to, an Acquisition Proposal. For purposes hereof, “Acquisition Proposal” shall mean any inquiry, proposal or offer from any Person (other than Buyer or any of its Affiliates) concerning (i) a merger, consolidation, liquidation, recapitalization, share exchange or other business combination transaction involving the Company; (ii) the issuance or acquisition of shares of capital stock or other equity securities of the Company; or (iii) the sale, lease, exchange or other disposition of any significant portion of the Company’ properties or assets.
  
 (b) Each Equityholder agrees that the rights and remedies for noncompliance with this Section 5.03 shall include having such provision specifically enforced by any court having equity jurisdiction, it being acknowledged and agreed that any such breach or threatened breach shall cause irreparable injury to Buyer and that money damages would not provide an adequate remedy to Buyer.
  
 Section 5.04 Notice of Certain Events.
  
 (a) From the date hereof until the Closing, the Equityholders shall promptly notify Buyer in writing of:
  
 (i) any fact, circumstance, event or action the existence, occurrence or taking of which (A) has had, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (B) has resulted in, or could reasonably be expected to result in, any representation or warranty made by the Company hereunder not being true and correct or (C) has resulted in, or could reasonably be expected to result in, the failure of any of the conditions set forth in Section 7.02 to be satisfied;
  
 (ii) any notice or other communication from any Person alleging that the consent of such Person is or may be required in connection with the transactions contemplated by this Agreement;
  
 (iii) any notice or other communication from any Governmental Authority in connection with the transactions contemplated by this Agreement; and
  
 (iv) any Actions commenced or, to the Company’s Knowledge, threatened against, relating to or involving or otherwise affecting the Company that, if pending on the date of this Agreement, would have been required to have been disclosed pursuant to Section 3.16 or that relates to the consummation of the transactions contemplated by this Agreement.
   
 	 
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 (b) Buyer's receipt of information pursuant to this Section 5.04 shall not operate as a waiver or otherwise affect any representation, warranty or agreement given or made by the Company in this Agreement and shall not be deemed to amend or supplement the Disclosure Schedules.
  
 Section 5.05 Confidentiality. From and after the Closing, the Equityholders shall, and shall cause its Affiliates to, hold, and shall use its reasonable best efforts to cause its Representatives to hold, in confidence any and all information, whether written or oral, concerning the Company, except to the extent that Equityholders can show that such information (a) is generally available to and known by the public through no fault of a Equityholder, any of its Affiliates or their respective Representatives; or (b) is lawfully acquired by a Equityholder, any of its Affiliates or their respective Representatives from and after the Closing from sources which are not prohibited from disclosing such information by a legal, contractual or fiduciary obligation.
  
 Section 5.06 Non-competition; Non-solicitation.
  
 (a) For a period of one year commencing on the Closing Date (the “Restricted Period”), each Equityholder shall not, and shall not permit any of his Affiliates to, directly or indirectly, (i) engage in or assist others in engaging in the Restricted Business in the Territory; (ii) have an interest in any Person that engages in the Restricted Business in the Territory in any capacity, including as a partner, shareholder, member, employee, principal, agent, trustee or; or (iii) intentionally interfere in any material respect with the business relationships (whether formed prior to or after the date of this Agreement) between the Company and customers or suppliers of the Company. Notwithstanding the foregoing, (i) an Equityholder may own, directly or indirectly, solely as an investment, securities of any Person traded on any national securities exchange if the Equityholder is not a controlling Person of, or a member of a group which controls, such Person and does not, directly or indirectly, own 5% or more of any class of securities of such Person. Nothwithstanding the foregoing, Equityholder may engage in or assist others in engaging in related Cannabis businesses, such as cultivation and manufacturing.
  
 (b) Each Equityholder acknowledges that a breach or threatened breach of this Section 5.07 would give rise to irreparable harm to Buyer, for which monetary damages would not be an adequate remedy, and hereby agrees that in the event of a breach or a threatened breach by a Equityholder of any such obligations, Buyer shall, in addition to any and all other rights and remedies that may be available to it in respect of such breach, be entitled to equitable relief, including a temporary restraining order, an injunction, specific performance and any other relief that may be available from a court of competent jurisdiction (without any requirement to post bond).
   
 	 
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 Section 5.07 Governmental Approvals and Consents.
  
 (a) Each party hereto shall, as promptly as possible, (i) make, or cause or be made, all filings and submissions required under any Law applicable to such party or any of its Affiliates; (ii) take all actions to ensure the valid transfer of all Permits from the Company to Buyer as of the Closing such that Buyer would not suffer any interruption in the operation of the Business as currently conduced after the Closing; and (iii) use reasonable best efforts to obtain, or cause to be obtained, all consents, authorizations, orders and approvals from all Governmental Authorities that may be or become necessary for its execution and delivery of this Agreement and the performance of its obligations pursuant to this Agreement. Each party shall cooperate fully with the other party and its Affiliates in promptly seeking to obtain all such consents, authorizations, orders and approvals. The parties hereto shall not willfully take any action that will have the effect of delaying, impairing or impeding the receipt of any required consents, authorizations, orders and approvals.
  
 (b) The Company and Buyer shall use reasonable best efforts to give all notices to, and obtain all consents from, all third parties that are described in Section 3.04 of the Disclosure Schedules.
  
 (c) Without limiting the generality of the parties' undertakings pursuant to subsections (a) and (b) above, each of the parties hereto shall use all reasonable best efforts to:
  
 (i) respond to any inquiries by any Governmental Authority regarding the transfer or deemed transfer of the Cannabis Permits or other matters with respect to the transactions contemplated by this Agreement;
  
 (ii) avoid the imposition of any order or the taking of any action that would restrain, alter or enjoin the transactions contemplated by this Agreement; and
  
 (iii) in the event any Governmental Order or communication which may adversely affect the ability of Buyer to enjoy the full benefit of the Permits through the purchase of the Company is made, to have such Governmental Order or communications vacated or lifted.
  
 Section 5.08 Closing Conditions From the date hereof until the Closing, each party hereto shall use reasonable best efforts to take such actions as are necessary to expeditiously satisfy the closing conditions set forth in Article VII hereof.
  
 Section 5.09 Public Announcements. Unless otherwise required by applicable securities laws (based upon the reasonable advice of counsel), the Company and the Equityholders shall not make any public announcements in respect of this Agreement or the transactions contemplated hereby or otherwise communicate with any news media.
  
 Section 5.10 Employees. Equityholders shall permit Buyer to meet with the employees of the Business and announcing to them the Transaction prior to the Closing. Prior to the Closing, Buyer shall be permitted to meet with employees of the Business who are employed by the Company for purposes of successfully transitioning the Business to Buyer after the Closing. Additionally, prior to the Closing, the Company shall terminate all Benefit Plans and pay off all outstanding Liabilities, bonuses, wages and payables accrued to employees and independent contractors as of the Closing. Notwithstanding the foregoing, Company shall not be responsible for paying employees for any unused or accrued paid time off or sick time.
   
 	 
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 Section 5.11 Indebtedness. The Equityholders shall pay off all indebtedness and other Liabilities of the Company existing immediately prior to the Closing.
  
 Section 5.12 Conversion to For Profit. The Equityholders shall take all actions necessary to convert the Company from a non-profit corporation to a for profit corporation, including by filing a Restated Articles of Incorporation as contemplated by the California Corporations Code (the “Conversion”).
  
 Section 5.13 Further Assurances. Following the Closing, each of the parties hereto shall, and shall cause their respective Affiliates to, execute and deliver such additional documents, instruments, conveyances and assurances and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Agreement. Notwithstanding the generality of the foregoing sentence, Remaining Owner shall take all actions and sign all documents required to retain any licenses, keep them in good standing and change the ownership of such licenses.
  
 ARTICLE VI 
 TAX MATTERS
  
 Section 6.01 Tax Covenants. All transfer, documentary, sales, use, stamp, registration, value added and other such Taxes and fees (including any penalties and interest) incurred in connection with this Agreement (including any real property transfer Tax and any other similar Tax) shall be deducted from the Purchase Price.
   
 Section 6.02 Termination of Existing Tax Sharing Agreements. Any and all existing Tax sharing agreements (whether written or not) binding upon the Company shall be terminated as of the Closing Date. After such date neither the Company, Equityholders nor any of their Affiliates and their respective Representatives shall have any further rights or liabilities thereunder.
  
 Section 6.03 Tax Indemnification. The Equityholders on a joint and several basis shall indemnify the Company, Buyer, and each Buyer Indemnitee and hold them harmless from and against (a) any Loss attributable to any breach of or inaccuracy in any representation or warranty made in Section 3.20; (b) any Loss attributable to any breach or violation of, or failure to fully perform, any covenant, agreement, undertaking or obligation in Article VI; (c) all Taxes of the Company or relating to the Business for all Pre-Closing Tax Periods; (d) all Taxes of any member of an affiliated, consolidated, combined or unitary group of which the Company (or any predecessor of the Company) is or was a member on or prior to the Closing Date by reason of a liability under Treasury Regulation Section 1.1502-6 or any comparable provisions of foreign, state or local Law; (e) all Taxes arising from the Conversion or from the Company’s status as a non profit corporation under the California Corporation Code; and (f) any and all Taxes of any person imposed on the Company arising under the principles of transferee or successor liability or by contract, relating to an event or transaction occurring before the Closing Date. In each of the above cases, together with any out-of-pocket fees and expenses (including attorneys' and accountants' fees) incurred in connection therewith. The Equityholders shall on a joint and several basis reimburse Buyer for any Taxes of the Company that are the responsibility of the Company pursuant to this Section 6.03 within ten Business Days after payment of such Taxes by Buyer.
  
 	 
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 Section 6.04 Tax Treatment of Indemnification Payments. Any indemnification payments pursuant to this Article VI shall be treated as an adjustment to the Purchase Price by the parties for Tax purposes, unless otherwise required by Law.
  
 Section 6.05 Survival. Notwithstanding anything in this Agreement to the contrary, the provisions of Section 3.20 and this Article VI shall survive for the full period of all applicable statutes of limitations (giving effect to any waiver, mitigation or extension thereof) plus 60 days.
  
 Section 6.06 Overlap. To the extent that any obligation or responsibility pursuant to Article VIII may overlap with an obligation or responsibility pursuant to this Article VI, the provisions of this Article VI shall govern.
  
 ARTICLE VII 
 CONDITIONS TO CLOSING
  
 Section 7.01 Conditions to Obligations of All Parties. The obligations of each party to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment, at or prior to the Closing, of each of the following conditions:
  
 (a) No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Governmental Order which is in effect and has the effect of making the transactions contemplated by this Agreement illegal, otherwise restraining or prohibiting consummation of such transactions or causing any of the transactions contemplated hereunder to be rescinded following completion thereof.
  
 Section 7.02 Conditions to Obligations of Buyer. The obligations of Buyer to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment or Buyer's waiver, at or prior to the Closing, of each of the following conditions:
  
 (a) The representations and warranties of the Company and the Equityholders in Article III shall be true and correct in all respects on and as of the date hereof and on and as of the Closing Date with the same effect as though made at and as of such date (except those representations and warranties that address matters only as of a specified date, the accuracy of which shall be determined as of that specified date in all respects).
  
 	 
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 (b) Equityholders shall have duly performed and complied in all material respects with all agreements, covenants and conditions required by this Agreement to be performed or complied with by it prior to or on the Closing Date.
  
 (c) No Action shall have been commenced against Buyer or the Company, which would prevent the Closing.
  
 (d) All approvals, consents and waivers that are listed on Section 3.04 of the Disclosure Schedules shall have been received, and executed counterparts thereof shall have been delivered to Buyer at or prior to the Closing.
  
 (e) From the date of this Agreement, there shall not have occurred any Material Adverse Effect, nor shall any event or events have occurred that, individually or in the aggregate, with or without the lapse of time, could reasonably be expected to result in a Material Adverse Effect.
  
 (f) Buyer shall have received a certificate, dated the Closing Date and signed by a duly authorized officer of the Company, that each of the conditions set forth in Section 7.02(a) and Section 7.02(b) have been satisfied.
  
 (g) Buyer shall have received a certificate of the Secretary or an Assistant Secretary (or equivalent officer) of the Company certifying that attached thereto are true and complete copies of all resolutions adopted (i) by the board of managers of the Company and (ii) the members of the Company required to authorize the Transaction, authorizing the execution, delivery and performance of this Agreement and the consummation of the Transactions, and that all such resolutions are in full force and effect and are all the resolutions adopted in connection with the transactions contemplated hereby.
  
 (h) The Company and the Business shall be in good standing with any state and local government, their political subdivisions and governmental agencies governing the Company and the Business.
  
 (i) The Company shall have paid off all indebtedness of the Company or otherwise affecting the Business or any assets of the Business existing immediately prior to the Closing and the Company shall have provided payoff letters and evidence of the release of all Encumbrances on all assets of the Company.
  
 (j) The landlord for the Lease shall have consented to the transactions contemplated by this Agreement and such landlord and the Buyer shall have entered into a triple-net lease on terms satisfactory to Buyer.
  
 (k) All Equity Instruments shall have been paid off, extinguished or otherwise cancelled with no further affect or obligation to any Person.
  
 	 
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 (l) The Company shall have delivered all Permits, and all consents and approvals from Governmental Authorities required to transfer the Business to Buyer, and such Permits and consents shall be in full force and effect and shall permit Buyer or its designee to operate the Business on the Closing Date without any interruption to the Business as conducted prior to the Closing Date.
  
 (m) The Company shall have executed the Conversion and the Buyer shall have received evidence satisfactory to it of the Conversion
  
 (n) Remaining Seller shall have delivered his Retained Interest to Buyer or the Escrow.
  
 (o) The Equityholders shall have signed and delivered the Lock Up Agreements.
  
 (p) The Company shall have delivered to Buyer such other documents or instruments as Buyer reasonably requests and are reasonably necessary to consummate the transactions contemplated by this Agreement.
  
 Section 7.03 Conditions to Obligations of the Equityholders. The obligations of the Equityholders to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment or the Company’s waiver, at or prior to the Closing, of each of the following conditions:
  
 (a) The representations and warranties of Buyer contained in Article IV shall be true and correct in all respects on and as of the date hereof and on and as of the Closing Date with the same effect as though made at and as of such date.
  
 (b) Buyer shall have duly performed and complied in all material respects with all agreements, covenants and conditions required by this Agreement to be performed or complied with by it prior to or on the Closing Date.
  
 (c) No Action shall have been commenced against Buyer or the Company, which would prevent the Closing.
  
 (d) Issuance of the Closing Stock.
   
 (e) From the date of this Agreement, there shall not have occurred a material devaluation of Pubco’s publicly traded stock value, or material degradation of goodwill withing the marketplace.
  
 (f) Buyer shall have delivered to the Company such other documents or instruments as the Company reasonably requests and are reasonably necessary to consummate the transactions contemplated by this Agreement.
   
 	 
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 ARTICLE VIII 
 SUVIVAL & INDEMNIFICATION
  
 Section 8.01 Survival. Subject to the limitations and other provisions of this Agreement, the representations and warranties contained herein (other than any representations or warranties contained in Section 3.20 which are subject to Article VI) shall survive the Closing and shall remain in full force and effect until the date that is 2 years from the Closing Date; provided, that the representations and warranties in (a) Section 3.01, Section 3.02, Section 3.06, Section 3.17, Section 3.18, Section 3.21, Section 4.01 and Section 4.03 shall survive indefinitely. All covenants and agreements of the parties contained herein (other than any covenants or agreements contained in Article VI which are subject to Article VI) shall survive the Closing indefinitely or for the period explicitly specified therein. Notwithstanding the foregoing, any claims asserted in good faith with reasonable specificity (to the extent known at such time) and in writing by notice from the non-breaching party to the breaching party prior to the expiration date of the applicable survival period shall not thereafter be barred by the expiration of the relevant representation or warranty and such claims shall survive until finally resolved.
  
 Section 8.02 Indemnification By the Equityholders. Subject to the other terms and conditions of this Article VIII, the Equityholders on a joint and several basis shall indemnify and defend each of Buyer and its Affiliates (including the Company) and their respective Representatives (collectively, the “Buyer Indemnitees”) against, and shall hold each of them harmless from and against, and shall pay and reimburse each of them for, any and all Losses incurred or sustained by, or imposed upon, the Buyer Indemnitees based upon, arising out of, with respect to or by reason of:
  
 (a) any inaccuracy in or breach of any of the representations or warranties of the Company or Equityholders contained in this Agreement or in any certificate or instrument delivered by or on behalf of the Company pursuant to this Agreement, as of the date such representation or warranty was made or as if such representation or warranty was made on and as of the Closing Date (except for representations and warranties that expressly relate to a specified date, the inaccuracy in or breach of which will be determined with reference to such specified date);
  
 (b) any breach or non-fulfillment of any covenant, agreement or obligation to be performed by the Company or Equityholders pursuant to this Agreement; or
  
 (c) any Liabilities of the Company arising prior to the Closing.
  
 Section 8.03 Indemnification By Buyer. Subject to the other terms and conditions of this Article VIII, Buyer shall indemnify and defend the Equityholders and their Affiliates and their respective Representatives (collectively, the “Seller Indemnitees”) against, and shall hold each of them harmless from and against, and shall pay and reimburse each of them for, any and all Losses incurred or sustained by, or imposed upon, the Seller Indemnitees based upon, arising out of, with respect to or by reason of:
  
 	 
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 (a) any inaccuracy in or breach of any of the representations or warranties of Buyer contained in this Agreement or in any certificate or instrument delivered by or on behalf of Buyer pursuant to this Agreement, as of the date such representation or warranty was made or as if such representation or warranty was made on and as of the Closing Date (except for representations and warranties that expressly relate to a specified date, the inaccuracy in or breach of which will be determined with reference to such specified date); or
  
 (b) any breach or non-fulfillment of any covenant, agreement or obligation to be performed by Buyer pursuant to this Agreement.
  
 Section 8.04 Indemnification Procedures. The party making a claim under this Article VIII is referred to as the “Indemnified Party”, and the party against whom such claims are asserted under this Article VIII is referred to as the “Indemnifying Party”.
  
 (a) Third Party Claims. If any Indemnified Party receives notice of the assertion or commencement of any Action made or brought by any Person who is not a party to this Agreement or an Affiliate of a party to this Agreement or a Representative of the foregoing (a “Third Party Claim”) against such Indemnified Party with respect to which the Indemnifying Party is obligated to provide indemnification under this Agreement, the Indemnified Party shall give the Indemnifying Party reasonably prompt written notice thereof, but in any event not later than 30 calendar days after receipt of such notice of such Third Party Claim. The failure to give such prompt written notice shall not, however, relieve the Indemnifying Party of its indemnification obligations, except and only to the extent that the Indemnifying Party forfeits rights or defenses by reason of such failure. Such notice by the Indemnified Party shall describe the Third Party Claim in reasonable detail, shall include copies of all material written evidence thereof and shall indicate the estimated amount, if reasonably practicable, of the Loss that has been or may be sustained by the Indemnified Party. The Indemnifying Party shall have the right to participate in, or by giving written notice to the Indemnified Party, to assume the defense of any Third Party Claim at the Indemnifying Party's expense and by the Indemnifying Party's own counsel, and the Indemnified Party shall cooperate in good faith in such defense; provided, that if the Indemnifying Party is an Equityholder, such Indemnifying Party shall not have the right to defend or direct the defense of any such Third Party Claim that (x) is asserted directly by or on behalf of a Person that is a supplier or customer of the Company, or (y) seeks an injunction or other equitable relief against the Indemnified Party. In the event that the Indemnifying Party assumes the defense of any Third Party Claim, subject to Section 8.04(b), it shall have the right to take such action as it deems necessary to avoid, dispute, defend, appeal or make counterclaims pertaining to any such Third Party Claim in the name and on behalf of the Indemnified Party. The Indemnified Party shall have the right to participate in the defense of any Third Party Claim with counsel selected by it subject to the Indemnifying Party's right to control the defense thereof. If the Indemnifying Party elects not to compromise or defend such Third Party Claim, fails to promptly notify the Indemnified Party in writing of its election to defend as provided in this Agreement, or fails to diligently prosecute the defense of such Third Party Claim, the Indemnified Party may, subject to Section 8.04(b), pay, compromise, defend such Third Party Claim and seek indemnification for any and all Losses based upon, arising from or relating to such Third Party Claim. Equityholders and Buyer shall cooperate with each other in all reasonable respects in connection with the defense of any Third Party Claim, including making available records relating to such Third Party Claim and furnishing, without expense (other than reimbursement of actual out-of-pocket expenses) to the defending party, management employees of the non-defending party as may be reasonably necessary for the preparation of the defense of such Third Party Claim.
   
 	 
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 (b) Settlement of Third Party Claims. Notwithstanding any other provision of this Agreement, the Indemnifying Party shall not enter into settlement of any Third Party Claim without the prior written consent of the Indemnified Party, except as provided in this Section 8.04(b). If a firm offer is made to settle a Third Party Claim without leading to liability or the creation of a financial or other obligation on the part of the Indemnified Party and provides, in customary form, for the unconditional release of each Indemnified Party from all liabilities and obligations in connection with such Third Party Claim and the Indemnifying Party desires to accept and agree to such offer, the Indemnifying Party shall give written notice to that effect to the Indemnified Party. If the Indemnified Party fails to consent to such firm offer within ten days after its receipt of such notice, the Indemnified Party may continue to contest or defend such Third Party Claim and in such event, the maximum liability of the Indemnifying Party as to such Third Party Claim shall not exceed the amount of such settlement offer. If the Indemnified Party fails to consent to such firm offer and also fails to assume defense of such Third Party Claim, the Indemnifying Party may settle the Third Party Claim upon the terms set forth in such firm offer to settle such Third Party Claim. If the Indemnified Party has assumed the defense pursuant to Section 8.04(a), it shall not agree to any settlement without the written consent of the Indemnifying Party (which consent shall not be unreasonably withheld or delayed).
  
 (c) Direct Claims. Any Action by an Indemnified Party on account of a Loss which does not result from a Third Party Claim (a “Direct Claim”) shall be asserted by the Indemnified Party giving the Indemnifying Party reasonably prompt written notice thereof, but in any event not later than 30 days after the Indemnified Party becomes aware of such Direct Claim. The failure to give such prompt written notice shall not, however, relieve the Indemnifying Party of its indemnification obligations, except and only to the extent that the Indemnifying Party forfeits rights or defenses by reason of such failure. Such notice by the Indemnified Party shall describe the Direct Claim in reasonable detail, shall include copies of all material written evidence thereof and shall indicate the estimated amount, if reasonably practicable, of the Loss that has been or may be sustained by the Indemnified Party. The Indemnifying Party shall have 30 days after its receipt of such notice to respond in writing to such Direct Claim. The Indemnified Party shall allow the Indemnifying Party and its professional advisors to investigate the matter or circumstance alleged to give rise to the Direct Claim, and whether and to what extent any amount is payable in respect of the Direct Claim and the Indemnified Party shall assist the Indemnifying Party's investigation by giving such information and assistance (including access to the Company' premises and personnel and the right to examine and copy any accounts, documents or records) as the Indemnifying Party or any of its professional advisors may reasonably request. If the Indemnifying Party does not so respond within such 30-day period, the Indemnifying Party shall be deemed to have rejected such claim, in which case the Indemnified Party shall be free to pursue such remedies as may be available to the Indemnified Party on the terms and subject to the provisions of this Agreement.
  
 	 
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 (d) Tax Claims. Notwithstanding any other provision of this Agreement, the control of any claim, assertion, event or proceeding in respect of Taxes of the Company (including, but not limited to, any such claim in respect of a breach of the representations and warranties in Section 3.20 hereof or any breach or violation of or failure to fully perform any covenant, agreement, undertaking or obligation in Article VI) shall be governed exclusively by Article VI hereof.
  
 Section 8.05 Payments. Once a Loss is agreed to by the Indemnifying Party or finally adjudicated to be payable pursuant to this Article VIII, the Indemnifying Party shall satisfy its obligations within 15 Business Days of such final, non-appealable adjudication by wire transfer of immediately available funds. The parties hereto agree that should an Indemnifying Party not make full payment of any such obligations within such 15 Business Day period, any amount payable shall accrue interest from and including the date of agreement of the Indemnifying Party or final, non-appealable adjudication to and including the date such payment has been made at a rate per annum equal to 15%. Such interest shall be calculated daily on the basis of a 365-day year and the actual number of days elapsed. In the event the Indemnifying Party is an Equityholder, Buyer may first, in its sole discretion, satisfy such indemnity obligations through setting off the amount remaining under the Deferred Payments.
  
 Section 8.06 Tax Treatment of Indemnification Payments. All indemnification payments made under this Agreement shall be treated by the parties as an adjustment to the Purchase Price for Tax purposes, unless otherwise required by Law.
  
 Section 8.07 Effect of Investigation. The representations, warranties and covenants of the Indemnifying Party, and the Indemnified Party's right to indemnification with respect thereto, shall not be affected or deemed waived by reason of any investigation made by or on behalf of the Indemnified Party (including by any of its Representatives) or by reason of the fact that the Indemnified Party or any of its Representatives knew or should have known that any such representation or warranty is, was or might be inaccurate or by reason of the Indemnified Party's waiver of any condition set forth in Section 7.02 or Section 7.03, as the case may be.
  
 ARTICLE IX 
 TERMINATION
  
 Section 9.01 Termination. This Agreement may be terminated at any time prior to the Closing:
  
 (a) by the mutual written consent of the Equityholders and Buyer;
   
 	 
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 (b) by Buyer by written notice to the Equityholders if:
  
 (i) Buyer is not then in material breach of any provision of this Agreement and there has been a breach, inaccuracy in or failure to perform any representation, warranty, covenant or agreement made by the Equityholders pursuant to this Agreement that would give rise to the failure of any of the conditions specified in Article VII and such breach, inaccuracy or failure has not been cured by the Equityholder within ten days of the Equityholders’ receipt of written notice of such breach from Buyer; or
  
 (ii) any of the conditions set forth in Section 7.01 or Section 7.02 shall not have been, or if it becomes apparent that any of such conditions will not be, fulfilled by September 30, 2019, unless such failure shall be due to the failure of Buyer to perform or comply with any of the covenants, agreements or conditions hereof to be performed or complied with by it prior to the Closing;
  
 (c) by the Equityholders by written notice to Buyer if:
  
 (i) the Equityholders are not then in material breach of any provision of this Agreement and there has been a breach, inaccuracy in or failure to perform any representation, warranty, covenant or agreement made by Buyer pursuant to this Agreement that would give rise to the failure of any of the conditions specified in Article VII and such breach, inaccuracy or failure has not been cured by Buyer within ten days of Buyer's receipt of written notice of such breach from the Equityholders; or
  
 (ii) any of the conditions set forth in Section 7.01 or Section 7.03 shall not have been, or if it becomes apparent that any of such conditions will not be, fulfilled by September 30, 2019 unless such failure shall be due to the failure of the Company to perform or comply with any of the covenants, agreements or conditions hereof to be performed or complied with by it prior to the Closing;
  
 (d) by Buyer or the Equityholders in the event that (i) there shall be any Law that makes consummation of the transactions contemplated by this Agreement illegal or otherwise prohibited or (ii) any Governmental Authority shall have issued a Governmental Order restraining or enjoining the transactions contemplated by this Agreement, and such Governmental Order shall have become final and non-appealable.
  
 Section 9.02 Effect of Termination. In the event of the termination of this Agreement in accordance with this Article IX, this Agreement shall forthwith become void and there shall be no liability on the part of any party hereto except:
  
 (a) as set forth in this Article IX, Section 5.05 and Article X hereof; and
  
 (b) that nothing herein shall relieve any party hereto from liability for any willful breach of any provision hereof.
   
 	 
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 ARTICLE X 
 MISCELLANEOUS
  
 Section 10.01 Expenses. Except as otherwise expressly provided herein, all costs and expenses, including, without limitation, fees and disbursements of counsel, financial advisors and accountants, incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs and expenses, whether or not the Closing shall have occurred.
  
 Section 10.02 Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 10.02):
  
 	 If to Equityholders or the Company:
	 [ ]
  
 Facsimile: [FAX NUMBER] 
 E-mail: [E-MAIL ADDRESS]
 Attention: [TITLE OF OFFICER TO RECEIVE NOTICES]

	 If to Buyer:
	 10115 Jefferson Boulevard 
 Culver City, CA 90232
 E-mail: tak.sato@medmen.com 
 Attention: Tak Sato


  
 Section 10.03 Interpretation. For purposes of this Agreement, (a) the words “include,” “includes” and “including” shall be deemed to be followed by the words “without limitation”; (b) the word “or” is not exclusive; (c) “provided to Buyer” or “made available to Buyer” shall mean that such information has been uploaded into the dataroom maintained by the Company and made available to the Buyer; and (d) the words “herein,” “hereof,” “hereby,” “hereto” and “hereunder” refer to this Agreement as a whole. Unless the context otherwise requires, references herein: (x) to Articles, Sections, Disclosure Schedules and Exhibits mean the Articles and Sections of, and Disclosure Schedules and Exhibits attached to, this Agreement; (y) to an agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof and (z) to a statute means such statute as amended from time to time and includes any successor legislation thereto and any regulations promulgated thereunder. This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted. The Disclosure Schedules and Exhibits referred to herein shall be construed with, and as an integral part of, this Agreement to the same extent as if they were set forth verbatim herein.
   
 	 
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 Section 10.04 Headings. The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.
  
 Section 10.05 Severability. If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or unenforceable, the parties hereto shall negotiate in good faith to modify this Agreement so as to affect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.
  
 Section 10.06 Entire Agreement. This Agreement constitutes the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein, and supersede all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter. In the event of any inconsistency between the statements in the body of this Agreement, the Exhibits and Disclosure Schedules (other than an exception expressly set forth as such in the Disclosure Schedules), the statements in the body of this Agreement will control.
  
 Section 10.07 Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Neither party may assign its rights or obligations hereunder without the prior written consent of the other party, which consent shall not be unreasonably withheld or delayed; provided, however, that prior to the Closing Date, Buyer may, without the prior written consent of the Company or Equityholders, assign all or any portion of its rights under this Agreement to one or more of its Affiliates.
  
 Section 10.08 No Third-party Beneficiaries. Except as provided in Article VIII, this Agreement is for the sole benefit of the parties hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.
  
 Section 10.09 Amendment and Modification; Waiver. This Agreement may only be amended, modified or supplemented by an agreement in writing signed by each party hereto. No waiver by any party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any right, remedy, power or privilege arising from this Agreement shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.
   
 	 
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 Section 10.10 Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.
  
 (a) This Agreement shall be governed by and construed in accordance with the internal laws of the State of California without giving effect to any choice or conflict of law provision or rule (whether of the State of California or any other jurisdiction).
  
 (b) ANY LEGAL SUIT, ACTION OR PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT MAY BE INSTITUTED IN THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA OR THE COURTS OF THE STATE OF CALIFORNIA IN EACH CASE LOCATED IN THE CITY OF LOS ANGELES AND COUNTY OF LOS ANGELES, AND EACH PARTY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING. SERVICE OF PROCESS, SUMMONS, NOTICE OR OTHER DOCUMENT BY MAIL TO SUCH PARTY'S ADDRESS SET FORTH HEREIN SHALL BE EFFECTIVE SERVICE OF PROCESS FOR ANY SUIT, ACTION OR OTHER PROCEEDING BROUGHT IN ANY SUCH COURT. THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR ANY PROCEEDING IN SUCH COURTS AND IRREVOCABLY WAIVE AND AGREE NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
  
 (c) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT. EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.10(c).
  
 Section 10.11 Specific Performance. The parties agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy to which they are entitled at law or in equity. The parties agree that any changes in Buyer’s stock price prior to the Closing shall not affect the parties’ obligation to perform its respective obligations pursuant to this Agreement.
  
 Section 10.12 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.
  
 [SIGNATURE PAGE FOLLOWS]
  
 	 
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 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.
  
  
 	 		 EQUITYHOLDERS
	
	 	 	 	 
			 /s/ Matthew Abrams 
	
	  
	  
	 Matthew Abrams
	 
	 	 		 
	 	 	 	 
	  
	  
	 /s/ Jeremy Abrams 
	  

	  
	  
	 Jeremy Abrams
	  

	  
	  
	  
	  

	  
	  
	  
	  

	  
	  
	 /s/ Judith Abrams 
	  

	  
	  
	 Judith Abrams
	  

	  
	  
	  
	  

	  
	  
	  
	  

	  
	  
	 /s/ Scott Angone 
	  

	  
	  
	 Scott Angone
	  

	  
	  
	  
	  

	  
	  
	  
	  

	  
	  
	 /s/ Mark Malan 
	  

	  
	  
	  Mark Malan
	  

	  
	  
	  
	  

	  
	  
	  
	  

	  
	 MM Enterprises USA, LLC
	  

	  
	  
	  
	  

	  
	 By:
	 /s/ Adam Bierman
	  

	  
	 Name: 
	 Adam Bierman
	  

	  
	 Title: 
	 CEO and Authorized Signatory
	  

	  
	  
	  
	  

	  
	  
	  
	  

	  
	 FOR PURPOSES ON SECTION 2.02(d) Only
	  

	  
	  
	  

	  
	  
	  

	  
	 MedMen Enterprises USA, Inc. 
	  

	  
	  
	  
	  

	  
	 By: 
	 /s/ Adam Bierman
	  

	  
	 Name: 
	 Adam Bierman
	  

	  
	 Title: 
	 CEO and Authorized Signatory
	  


   
 	 
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