# EDGAR Filing Document

**Accession Number:** 0001715611
**File Stem:** 0001640334-25-001441
**Filing Date:** 2025-8
**Character Count:** 202647
**Document Hash:** b8c7597746fc5369c8cb873c080dc091
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001640334-25-001441.hdr.sgml**: 20250813

**ACCESSION NUMBER**: 0001640334-25-001441

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 19

**CONFORMED PERIOD OF REPORT**: 20250805

**ITEM INFORMATION**: Entry into a Material Definitive Agreement

**ITEM INFORMATION**: Other Events

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20250813

**DATE AS OF CHANGE**: 20250813

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** BODY & MIND INC.
- **CENTRAL INDEX KEY:** 0001715611
- **STANDARD INDUSTRIAL CLASSIFICATION:** PHARMACEUTICAL PREPARATIONS [2834]
- **ORGANIZATION NAME:** 03 Life Sciences
- **EIN:** 981319227
- **STATE OF INCORPORATION:** NV
- **FISCAL YEAR END:** 0731

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-55940
- **FILM NUMBER:** 251212474

**BUSINESS ADDRESS:**
- **STREET 1:** 750 - 1095 WEST PENDER STREET
- **CITY:** VANCOUVER
- **STATE:** A1
- **ZIP:** V6E 2M6
- **BUSINESS PHONE:** 604-376-3567

**MAIL ADDRESS:**
- **STREET 1:** 750 - 1095 WEST PENDER STREET
- **CITY:** VANCOUVER
- **STATE:** A1
- **ZIP:** V6E 2M6

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** DEPLOY TECHNOLOGIES INC
- **DATE OF NAME CHANGE:** 20170825

?xml version='1.0' encoding='ASCII'? bmmj_8k.htm

**UNITED STATES** 

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 8-K**

**CURRENT REPORT** 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

**<u>August 5, 2025</u>**

Date of Report (Date of earliest event reported)

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| |
|:---|
| **BODY AND MIND INC.** |
| (Exact name of registrant as specified in its charter) |

---

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| | | |
|:---|:---|:---|
| **Nevada** | **000-55940** | **98-1319227** |
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |

---

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| | |
|:---|:---|
| **750 – 1095 West Pender Street**<br>**Vancouver, British Columbia, Canada** | **V6E 2M6** |
| (Address of principal executive offices) | (Zip Code) |

---

**<u>(800) 361-6312</u>**

Registrant's telephone number, including area code

**<u>Not applicable.</u>**

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

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| | | |
|:---|:---|:---|
| Title of each class | Trading Symbol (s) | Name of each exchange on which registered |
| N/A | N/A | N/A |

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Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (Section 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (Section 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

__________

**SECTION 1 – REGISTRANT'S BUSINESS AND OPERATIONS**

**Item 1.01 Entry into a Material Definitive Agreement**

*<u>Asset Purchase Agreement</u>*

On August 5, 2025, Body and Mind, Inc.'s ("**Company**") wholly owned subsidiary DEP Nevada, Inc. ("**DEP**") entered into an Asset Purchase Agreement (the "**APA**") with NMG San Diego, LLC, a California limited liability company ("**NMG SD**"), SJJR, LLC, a California limited liability company ("**SJJR**" together with DEP and NMG SD being, the "**Selling Parties**") and OTC Miramar, LLC, a California limited liability company ("**OTC**" and "**Buyer**") whereby certain key assets of NMG SD are being sold pursuant to the APA including an annual operating cannabis permit (the "**Local License**") issued by the City of San Diego, California (the "**City**"), along with certain other specified assets incidental to NMG SD's commercial cannabis retail business (such assets together with the Local License being, the "**Purchased Assets**"). DEP is a majority member of NMG SD and SJJR is a minority member.

The purchase price for the Purchased Assets is $1,600,000 (the "**Purchase Price**") to be paid as follows:

(a) $100,000 to be paid as a deposit, which amount was paid prior to the execution of the APA;

(b) $500,000 (the "**Cash Amount**") to be delivered into an escrow account to be released to NMG SD within 3 business days of the City approving the transfer of the Local License (being the "**Transfer Approval**") pursuant to an escrow agreement between NMG SD, OTC and Secured Trust Escrow, the escrow agent. The Cash Amount shall be used to satisfy NMG SD's existing tax liability (the "**Tax Liability**") with the California Department of Tax and Fee Administration (the "**CDTFA**"). Any positive difference between the Cash Amount and Tax Liability shall be delivered to NMG; any negative difference shall be satisfied by NMG SD;

(c) $570,382.56 (the "**Landlord Payment**") to be delivered directly by OTC to Green Road, LLC (the "**Landlord**") no later than the closing of the APA to satisfy the following obligations under the lease agreement between NMG SD and the Landlord (the "**Lease**"):

(i) a sales bonus payment of $500,000 due to the Landlord for the assignment of the Lease to OTC; and

(ii) The outstanding rent under the Lease as set out in the second lease amendment to be entered into by NMG SD, OTC and the Landlord before the closing of the APA (the "**Lease Amendment**"). The Lease Amendment shall assign the Lease to OTC effective upon the delivery of the Landlord Payment to the Landlord;

(d) $429,617.44 (the "**Note Payment**") to be paid pursuant to a secured promissory note dated August 5, 2025 (the "**Promissory Note**") which was issued by OTC to NMG SD.

The APA has a working capital adjustment of Current Assets minus Current Liabilities (which includes trade accounts and accounts payable) and the resulting number shall either increase or decrease the Purchase Price, with any adjustment to be made to the Note Payment. Pursuant to the APA, the Selling Parties and the Buyer agreed that based on historical operating data, the Current Liabilities shall likely exceed Current Assets such that the Note Payment shall be reduced once the working capital has been calculated pursuant to the terms set forth in the APA.

In addition, the APA provides that, starting on August 5, 2025, OTC shall assume all the liabilities of NMG relating to its management, control, and operation of the retail business pursuant to a Management Services Agreement between NMG SD and OTC. OTC shall continue to pay the Tax Liability to the CDTFA until the Cash Amount is released from escrow to NMG SD, with any such interim payments made by OTC to reduce the Note Payment amount.

NMG SD's closing deliverables of the Agreement include: (a) a bill of sale assigning and transferring the Purchased Assets to OTC; (b) the Transfer Approval; (c) the Escrow Agreement; (d) the Lease Amendment; (e) the countersigned Promissory Note and such other certificates and documents as may be requested by OTC. OTC shall deliver countersignatures to the above documents and full delivery of the Purchase Price.

Following the closing of the APA, OTC shall own the Purchased Assets and be the tenant/lessee under the Lease Amendment.

The foregoing description of the APA does not purport to be complete and is subject to, and qualified in its entirety by the APA, which is filed as Exhibit 10.1 hereto and is incorporated herein by reference.

*<u>Management Services Agreement</u>*

On August 5, 2025, NMG SD and OTC entered into a Management Services Agreement (the "**MSA**") whereby OTC shall operate NMG SD's commercial cannabis dispensary located at 7625 Carroll Road, San Diego, California 92121 (the "**Enterprise**") and provide management services, regulatory compliance services, human resource support and services, information technology services, financial services, as specifically outlined in the MSA (the "**Services**") at OTC's sole cost and expense without right of reimbursement from NMG SD or the Enterprise in exchange for OTC receiving a management services fee equal to 100% of the gross revenue and economic proceeds generated by and derived from the Enterprise.

Unless terminated sooner in accordance with the terms of the MSA, the term (the "**Term**") of the MSA shall commence on August 5, 2025 and continue until the earliest of the occurrence of any of the following events: (a) termination of the APA; (b) OTC fails to timely pay the Purchase Price as set forth in APA; (c) the California Department of Cannabis Control (the "**DCC**") makes a final non-appealable determination denying the approval of the MSA; (d) a Governmental Authority (as defined in the MSA) makes a final and non-appealable determination that the terms of the MSA are in contravention of Applicable Law; (e) a written notice by either non-breaching party to the breaching party, subject to a fifteen (15) day cure period (if permitted by Law), if a material breach of the MSA, the APA, or any related agreement could reasonably lead to a governmental order restraining the MSA; (f) the Local License and commercial cannabis retail license (the "**State License**", together with the Local License, the "**Licenses**") issued by the DCC are revoked by the applicable Governmental Authority, and the OTC is restricted from effectively performing the Services; or (g) upon the closing of the APA.

NMG SD and OTC acknowledge that, subject to the terms and conditions set forth in the MSA, OTC shall perform the Services as an independent contractor and shall indemnify, defend, and hold harmless NMG SD and DEP from and against any and all losses arising directly or indirectly out of OTC's management of NMG SD or the Enterprise.

The foregoing description of the MSA does not purport to be complete and is subject to, and qualified in its entirety by the MSA, which is filed as Exhibit 10.2 hereto and is incorporated herein by reference.

*<u>Secured Promissory Note</u>*

On August 5, 2025, to secure the Note Payment obligation of $429,617.44, OTC issued the Promissory Note pursuant to which: (a) OTC shall pay interest on the unpaid principal balance of the Note at the rate of 4.03% per annum, calculated on the basis of a 365-day or 366-day year and the actual number of days elapsed; and (b) all principal and accrued interest shall be due and payable on the earlier of: (i) November 4, 2025; or (ii) three (3) calendar days following receipt of the Transfer Approval.

The Promissory Note and Note Payment is secured by the security agreement dated August 5, 2025 made and delivered by OTC in favor of NMG SD (the "**Security Agreement**"). Upon full payment of the principal and all accrued interest under the Promissory Note, NMG SD shall: (a) assign and deliver to OTC any remaining collateral in NMG SD's possession; (b) execute instruments evidencing satisfaction and termination of the Promissory Note; and (c) terminate its security interest under the Security Agreement.

The foregoing description of the Promissory Note does not purport to be complete and is subject to, and qualified in its entirety by the Promissory Note, which is filed as Exhibit 10.3 hereto and is incorporated herein by reference.

*<u>Security Agreement</u>*

As security for the prompt and full performance and payment of all of the indebtedness, obligations, liabilities, and undertakings of OTC in connection with the Promissory Note and Note Payment, OTC and NMG SD entered into the Security Agreement, pursuant to which OTC granted NMG SD a security interest in and to: (a) all Purchased Assets; (b) all personal and fixture property located on or at the Enterprise; (c) money, deposit accounts, letters of credit, and letter-of-credit rights; (d) securities and all other investment property; and (e) other contracts rights or rights to the payment of money, insurance claims and proceeds, tort claims, and all general intangibles (including all payment intangibles).

The foregoing description of the Security Agreement does not purport to be complete and is subject to, and qualified in its entirety by the Security Agreement, which attached as Exhibit A to the Promissory Note that is filed as Exhibit 10.3 hereto and is incorporated herein by reference.

**SECTION 8 – OTHER EVENTS**

**Item 8.01 Other Events**

On August 11, 2025, the Company issued a news release to announce the agreement to divest the Purchased Assets.

A copy of the news release is attached as Exhibit 99.1 hereto.

**SECTION 9 – FINANCIAL STATEMENTS AND EXHIBITS**

**Item 9.01 Financial Statements and Exhibits**

**(d) Exhibits**

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| | |
|:---|:---|
| **Exhibit** | **Description** |
| [10.1](bmmj_ex101.htm) | [Asset Purchase Agreement by and between NMG San Diego, LLC, DEP Nevada, Inc., SJJR, LLC, and OTC Miramar, LLC, dated August 5, 2025](bmmj_ex101.htm) |
| [10.2](bmmj_ex102.htm) | [Management Services Agreement between NMG San Diego, LLC and OTC Miramar, LLC, dated August 5, 2025](bmmj_ex102.htm) |
| [10.3](bmmj_ex103.htm) | [Secured Promissory Note between NMG San Diego, LLC and OTC Miramar, LLC, dated August 5, 2025](bmmj_ex103.htm) |
| [99.1](bmmj_ex991.htm) | [News release dated August 11, 2025](bmmj_ex991.htm) |
| 104 | Cover Page Interactive Data File (the cover page XBRL tags are embedded within the inline XBRL document) |

---

__________

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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| | | |
|:---|:---|:---|
|  | **BODY AND MIND INC.** | **BODY AND MIND INC.** |
| **DATE:** August 13, 2025 | By: | */s/ Michael Mills* |
|  |  | **Michael Mills** |
|  |  | **President, CEO and Director** |

---

__________

## Exhibit 10.1

**EXHIBIT 10.1**

**ASSET PURCHASE AGREEMENT**

**THIS ASSET PURCHASE AGREEMENT** (this "**Agreement**") is made and entered into as of August 5, 2025 (the "**Effective Date**") by and among NMG San Diego, LLC, a California limited liability company (the "**Seller**" and "**Company**") , DEP Nevada, Inc., a Nevada corporation (the "<u>DEP</u>"), SJJR, LLC, a California limited liability company (collectively, the "**Members**" and together with Seller, the "**Seller Parties**"), and OTC Miramar, LLC, an California limited liability company ("**Buyer**" and collectively with the Seller Parties, the "**Parties**" and each individually, a "**Party**").

**BACKGROUND**

**WHEREAS,** the Members own all of the membership interests of Seller;

**WHEREAS**, the Company holds a valid commercial cannabis retail license (the "<u>State License</u>") issued by the California Department of Cannabis Control (the "<u>DCC</u>") pursuant to the Cannabis Laws (as defined in the Management Services Agreement), and an annual operating permit (the "<u>Local License</u>" together with the State License, being the "<u>Licenses</u>") issued by the City of San Diego (the "<u>City</u>") enabling the Company to operate a commercial cannabis dispensary at 7625 Carroll Road, San Diego California 92121 (the "<u>Dispensary</u>").

**WHEREAS**, the Parties are simultaneously entering into a Management Services Agreement (the "**MSA**"), whereby Buyer shall provide to the Company on an exclusive basis, the management services contemplated thereunder upon the terms and conditions set forth in the MSA;

**WHEREAS,** the Parties shall apply to the San Diego City Cannabis Business Division (the "CBD") to receive approval to transfer the Local License to Buyer (the "<u>Transfer Approval</u>"); and

**WHEREAS**, Buyer desires to purchase from the Seller Parties and the Seller Parties desire to sell and transfer, those enumerated assets of Seller, as set forth in <u>Schedule 1</u> attached hereto (the "<u>Purchased Assets</u>").

**NOW THEREFORE,** in consideration of the foregoing recitals and the mutual agreements that follow, the Parties agree to the following terms and conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1. <u>Incorporation of Recitals; Definitions.</u>** The foregoing Recitals to this Agreement are incorporated into this Agreement and are binding provisions hereof enforceable in accordance with their terms. The following terms, as used in this Agreement, shall have the following meanings:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) "<u>Action</u>" means any claim, charge, action, suit, arbitration, mediation, inquiry, hearing, audit, proceeding or investigation by or before any Governmental Authority, including any audit, claim, or assessment for Taxes or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) "<u>Affiliate</u>" means, with respect to any specified Person, any other Person that directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person. A Person shall be deemed to control another Person if such Person possesses, directly or indirectly, the power to direct, or cause the direction of, the management and policies of such other Person, whether through the ownership of voting securities, by contract or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) "<u>California Cannabis Laws</u>" means Laws regarding the cultivation, manufacture, possession, use, sale, or distribution of cannabis or cannabis products promulgated by the state and local Governmental Authorities in the State of California.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) "<u>CDTFA Debt</u>" shall mean that certain Tax Liability owed by the Company to the California Department of Tax and Fee Administration for certain excise taxes, and associated fees and penalties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) "<u>Crossover Date</u>" shall mean 12:01 a.m. PST on August 5, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) "<u>Crossover Working Capital</u>" means (a) the Current Assets of the Company, less (b) the Current Liabilities of the Company, determined as of the open of business of the Dispensary on the Crossover Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) "<u>Current Assets</u>" means cash and cash equivalents (on hand and in any Company account), accounts receivable, inventory, and pre-paid balance sheet items, as determined in accordance with the Company's prior historical accounting methods; provided "Current Assets" expressly excludes any CDTFA Penalty Relief.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) "<u>Current Liabilities</u>" means accounts payable, as determined in accordance with the Company's prior historical accounting methods.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) "<u>Escrow Agent</u>" means Secured Trust Escrow.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) "<u>Escrow Agreement</u>" means the Escrow Agreement, dated as of the Crossover Date, by and amount Escrow Agent, Buyer, and Seller, in the form attached as <u>Exhibit A</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) "<u>GAAP</u>" means United States generally accepted accounting principles and practices in effect from time to time applied consistently throughout the periods involved.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) "<u>Landlord Consent</u>" means that certain consent from the Landlord, giving consent to the change of control of the Company resulting from the Transaction, as required under Section 21 of the Original Lease, which consent is set forth in the Second Lease Amendment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) "<u>Law</u>" means any U.S. or foreign federal, state, local, municipal, foreign, international, multinational, or other administrative order, constitution, law, ordinance, principle of common law, regulation, statute or treaty; provided, that "<u>Law</u>" shall exclude U.S. Federal Cannabis Law to the extent such U.S. Federal Cannabis Law relates to conduct that is allowed or authorized under California Cannabis Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) "<u>Lien</u>" means any lien, pledge, mortgage, deed of trust, security interest, charge, claim, easement, encroachment, or other similar encumbrance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) "<u>Lease</u>" means collectively the (a) commercial lease, dated December 1, 2018 (the "<u>Original Lease</u>"), between Green Road, LLC (the "<u>Landlord</u>") and SGSD, LLC (the "<u>Prior Tenant</u>"), as amended by (b) that certain assignment and first amendment, dated June 13, 2019, among Landlord, Prior Tenant, and Company (being the "<u>First Lease Amendment</u>"), (c) the notice to extend the lease letter, dated August 1, 2023 (the "<u>Extension Letter</u>"), and (d) the Second Lease Amendment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) "<u>Liability</u>" means any debt, liability, commitment or obligation of any nature, whether pecuniary or not, asserted or unasserted, accrued or unaccrued, absolute or contingent, matured or unmatured, liquidated or unliquidated, determined or determinable, incurred or consequential, known or unknown, and whether due or to become due (whether or not required to be reflected or reserved for on a balance sheet prepared in accordance with GAAP), including those arising under any contract, Law, or Governmental Order.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) "<u>Losses</u>" means actual out-of-pocket losses, damages, liabilities, costs or expenses, including reasonable attorneys' fees, and the cost of enforcing any right to indemnification hereunder and the cost of pursuing any insurance providers; <u>provided</u>, <u>however</u>, that "<u>Losses</u>" shall not include punitive, speculative, special, or indirect damages, except in the case of fraud or to the extent actually awarded to a Governmental Authority or other third party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) "<u>Person</u>" means an individual, corporation, partnership (including a general partnership, limited partnership or limited liability partnership), limited liability company, association, trust or other entity or organization, including a government, domestic or foreign, or political subdivision thereof, or an agency or instrumentality thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) "<u>Representative</u>" with respect to any Person, any and all directors, officers, members, managers, employees, consultants, financial advisors, counsel, accountants and other agents of such Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) "<u>Second Lease Amendment</u>" means that second amendment to the Original Lease (as amended by the First Lease Amendment), in substantially the same form attached as <u>Exhibit B</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u) "<u>Senior Lender</u>" means Bengal Catalyst Fund, LP, a Delaware limited partnership.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(w) "<u>Senior Lender Release</u>" means that certain release executed and delivered by the Senior Lender evidencing its release of the Senior Lender Lien specific to the Subject Interests and the Company, which shall include any UCC financing statements, if applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) "<u>Senior Loan</u>" means that certain non-revolving credit facility agreement, dated October 24, 2024, as amended by that first amendment, dated April 7, 2025, entered into between the Senior Lender and Body and Mind, Inc., a Nevada corporation, as borrower, and the accompanying security agreement, dated September 9, 2024 (being the "<u>Senior Security Agreement</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(y) "<u>Tax(es)</u>" 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2. <u>Purchase and Sale</u>.** Subject to the terms and conditions of this Agreement, at the Closing, Seller agrees to sell, transfer, and assign to Buyer, and Buyer agrees to purchase and acquire from Seller, all of Seller's right, title, and interest in and to the Purchased Assets, free and clear of all Liens.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.1 <u>Excluded Assets</u>.** For sake of clarity, and notwithstanding anything to the contrary, other than the Purchased Assets, Buyer expressly understands and agrees that it is not purchasing or acquiring, and Seller is not selling or assigning, any other assets or properties of the Seller (or any Seller Party), and all such other assets and properties shall be excluded from the Purchased Assets (collectively, the "<u>Excluded Assets</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.2 <u>Purchase Price</u>.** The aggregate purchase price the Buyer shall pay for the Purchased Assets is One Million Six Hundred Thousand Dollars ($1,600,000) (the "<u>Purchase Price</u>"), plus assumption of the Assumed Liabilities. The Purchase Price shall be paid to Seller as follows (each being a "<u>Payment</u>"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Buyer shall pay a deposit in the amount of One Hundred Thousand Dollars ($100,000) (the "<u>Deposit</u>"). Seller acknowledges that, as of the Effective Date, Seller has received the Deposit from Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) On the later of the Crossover Date or one (1) Business Day after the Escrow Agent provides the Escrow Agreement, the Buyer, Seller, and the Escrow Agent shall enter into the Escrow Agreement, providing for the establishment with the Escrow Agent of a non-interest bearing escrow account (the "<u>Escrow Account</u>") in an amount equal to Five Hundred Thousand Dollars ($500,000) (the "<u>CDTFA Payment</u>"). Within three (3) Business Days following receipt of the Transfer Approval from the City, the Seller and Buyer shall jointly instruct the Escrow Agent to release the CDTFA Payment from the Escrow Account to the Seller. The Parties agree that the CDTFA Payment shall be utilized by the Seller to satisfy the CDTFA Debt and any balance shall belong to the Seller. Seller shall pay the CDTFA Debt and provide proof of payment to Buyer. The Parties agree to cooperate to ensure that the CDTFA Payment (i) funds are utilized to pay the entire CDTFA Debt, and (ii) the remainder, if any, is timely delivered to Seller. Additionally, if following the application of the CDTFA Payment to the CDTFA Debt there remains a balance on the CDTFA Debt, DEP shall pay such remainder balance within ten (10) Business Days and provide proof of payment to the Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) On or before the execution of the Second Lease Amendment (or at such time as necessary to induce Landlord to execute the Second Lease Amendment), the Buyer shall deliver to the Landlord an amount equal to Five Hundred Seventy Thousand Three Hundred Eighty Two and 56/100 Dollars ($570,382.56) (the "<u>Landlord Payment</u>") to satisfy the Sales Bonus Payment and Unpaid Rent Payment (as defined in the Second Lease Amendment). The Parties agree (i) that Buyer shall directly pay the Landlord Payment to the Landlord, and (ii) the Landlord Payment shall be considered part of the Purchase Price.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) On the Effective Date, Buyer shall deliver to Seller a secured promissory note (the "<u>Note</u>") in the principal amount of Four Hundred and Twenty Nine Thousand Six Hundred and Seventeen and 44/100 Dollars (the "<u>Note Payment</u>"), which Note shall be in substantially the same form as <u>Exhibit C</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.2 <u>Payment Mechanics</u>.** All payments made pursuant to this Agreement shall be made in U.S. dollars by wire transfer of immediately available funds to such bank account as shall be designated in advance by the Seller.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3. <u>Assumed Liabilities</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.1** Subject to the terms and conditions set forth herein, Buyer shall assume and agree to pay, perform and discharge when due any and all Liabilities of Seller arising out of or relating to the Dispensary or the Purchased Assets on or after the Crossover Date, other than the Excluded Liabilities (collectively, the "<u>Assumed Liabilities</u>"), including the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Until the CDTFA Payment has been released from the Escrow Account to the Seller, Buyer shall assume and be solely responsible for the Seller's monthly payments towards the CDTFA Debt, pursuant to the payment plan in place between the Seller and CDTFA with respect to the CDTFA Debt (being the "<u>CDTFA Liability</u>"). For sake of clarity, any amounts paid by Buyer to the CDTFA shall result in an offset, modification, or reduction of the Purchase Price, except Buyer shall be fully responsible for any interest accrued on the CDTFA Debt during the Term of the MSA. Provided however, that upon Seller's receipt of the CDTFA Payment, the Buyer shall have no obligation or liability with respect to the CDTFA Debt or payments thereunder after the date the CDTFA Payment is released from the Escrow Account to the Seller.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) all trade accounts payable of Seller to third parties in connection with the Dispensary that remain unpaid as of the Crossover Date (which shall be offset pursuant to <u>Section 4.3</u>). Buyer's assumption of trade accounts payable shall be limited to the extent any amounts owed are within the contemplated Purchase Price adjustment outlined in Section 4.3(c). Trade accounts payable liabilities shall not result in Buyer assuming a liability that would exceed the agreed upon Purchased Price;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) all Liabilities for (A) Taxes relating to the Dispensary, the Purchased Assets, or the Assumed Liabilities for any taxable period (or portion thereof) beginning after the Crossover Date and (B) Taxes for which Buyer is liable pursuant to <u>Section 4.4</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) all other Liabilities arising out of or relating to Buyer's management, control, operation, or ownership of the Dispensary and the Purchased Assets on or after the Crossover Date.

In the event of Termination, Buyer Assumed Liabilities should be limited to those Liabilities incurred during the Terms of this Agreement and the MSA.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.2** Other than the Assumed Liabilities, the Buyer shall not assume or be responsible for any Liabilities of the Seller Parties (the "<u>Excluded Liabilities</u>"), which Excluded Liabilities, include without limitation:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) any obligations under any agreement of the Seller Parties which are not expressly listed on <u>Schedule 1</u>, including agreements with credit card companies that exist as of the Crossover Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) any environmental Laws;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) any Tax obligations of the Seller Parties incurred, accrued, or arising prior to the Crossover Date whether by reason of operation of the Dispensary, consummation of the Agreement, or otherwise;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) any Liability of the Seller Parties with respect to any current or former Seller employees or any Affiliate of Seller, or any dependent or beneficiary thereof, arising, incurred, or accruing prior to the Crossover Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) any Liability with respect to indebtedness, including without limitation, any indebtedness for borrowed money to any of the Seller Parties or any Affiliates of the Seller Parties, any capital lease obligations, or any installment purchase obligations; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) any Liability or claim relating to the operation of the Dispensary, or the ownership, use, sale or warranty of the Purchased Assets prior to the Crossover Date, including, without limitation, any Liability or claim relating to breach of warranty, negligence, or breach of contract by any of the Seller Parties. Notwithstanding the foregoing, following the Crossover Date, Buyer shall be responsible for any Liability or claim relating to the operation of the Dispensary during the Term of this Agreement and the MSA.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. **<u>Closing</u>**. Subject to the terms and conditions of this Agreement, the sale, purchase, and transfer of the Purchased Assets shall take place at a closing (the "Closing") to be held remotely via the electronic exchange of counterpart signature pages on such date that is five (5) calendar days following the date that the last of the conditions to Closing set forth in Section 4.1 and Section 4.2 have been satisfied or waived (the "Closing Date") (except for those conditions that by their nature are to be satisfied by the delivery of documents or taking of actions at the Closing, but subject to the satisfaction of such conditions at the Closing or, if permissible, waiver by the party hereto entitled to the benefit of those conditions at the Closing) or at such other date, time and place as may be agreed in writing by the Parties. The date on which the Closing occurs in accordance with the preceding sentence is referred to in this Agreement as the "Closing Date." The Closing shall be deemed effective for all purposes at 5:00 p.m., Pacific time, on the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.1 <u>Closing Deliveries by</u> <u>Seller and the Members</u>**. At or before the Closing, The Seller (and as applicable, the Members) shall deliver or cause to be delivered to Buyer the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The MSA, duly executed by Seller;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Escrow Agreement, duly executed by the Seller and Escrow Agent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Note, duly executed by the Seller;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) A bill of sale in the form of <u>Exhibit D</u> (the "<u>Bill of Sale</u>") duly executed by Seller, transferring the Purchased Assets to Buyer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Second Lease Amendment duly executed by the Landlord, Members, and Seller (as applicable);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Written evidence of the Transfer Approval from the City;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) such other certificates, documents, schedules, agreements, resolutions, consents, approvals, rulings, or other instruments required by this Agreement to be so delivered at or prior to the Closing together with such other items as may be reasonably requested by Buyer in order to effectuate or evidence the transactions contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.2 <u>Closing Deliveries by the Buyer</u>**. At or before the Closing, as applicable, the Buyer shall deliver or cause to be delivered the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The MSA, duly executed by Buyer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Escrow Agreement, duly executed by the Buyer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Note, duly executed by the Buyer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Full (and timely) payment of the Purchase Price pursuant to <u>Section 2.1</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Second Lease Amendment, duly executed by Buyer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Written evidence of the Transfer Approval by the City (if applicable);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) such other certificates, documents, schedules, agreements, resolutions, consents, approvals, rulings or other instruments required by this Agreement to be so delivered at or prior to the Closing together with such other items as may be reasonably requested by Buyer in order to effectuate or evidence the transactions contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.3 <u>Working Capital Adjustment</u>.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Within three (3) business days of the Crossover Date, the Seller Parties shall prepare and deliver to Buyer a statement setting forth its good faith estimate of Crossover Working Capital (the "<u>Estimated Statement</u>"). The Estimated Statement is for informational purposes only and no adjustment shall be made to the Purchase Price based on the Estimated Statement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) No later than forty-five (45) calendar days following the Crossover Date, the Buyer shall prepare and deliver to Seller a statement showing its calculation of the Crossover Working Capital (the "<u>Crossover Statement</u>"). The Seller shall have fifteen (15) calendar days to review and object to the Crossover Statement. In the event of any objection or dispute, the Parties shall work in good faith to resolve the dispute.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Closing Adjustment shall be an amount equal to the Crossover Statement minus $0 (the "<u>Crossover Adjustment</u>"). If the Crossover Adjustment is a positive number, the Purchase Price shall be increased by the amount of the Crossover Adjustment. If the Crossover Adjustment is a negative number, the Purchase Price shall be reduced by the amount of the Crossover Adjustment, only to the extent that the Buyer pays any portion of the negative Crossover Adjustment balance during the term of the MSA. The Purchase Price adjustment shall occur with the Note Payment, either by a reduction or increase of the Note Payment, by the Crossover Adjustment amount.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Parties agree that, based on historical financial performance, the Crossover Adjustment shall *likely* be negative, such that the Purchase Price shall be reduced by a reduction of the Third Payment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.4 <u>Conveyance Taxes</u>.** 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 solely borne and paid by Buyer when due. Buyer shall, at its own expense, timely file any Tax return or other document with respect to such Taxes or fees (and the Seller Parties shall cooperate with respect thereto as necessary). Notwithstanding the foregoing, Seller shall be solely responsible for any and all Taxes, including but not limited to capital gains taxes, related to its receipt of the Purchase Price.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.5 <u>Post-Closing Owner Cooperation</u>.** From and after the Closing Date, each Party, upon the reasonable request of the other Party, shall do, execute, acknowledge and deliver all such further acts, assurances, deeds, assignments, transfers, conveyances and other instruments and papers as may be reasonably required or appropriate to carry out the purchase and sale of the Purchased Assets, prevent the disruption of business operations of Seller during the transition of ownership and to otherwise effectuate the purposes of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5. <u>Representations and Warranties of Seller</u>.** The Seller represents and warrants to the Buyer that the statements contained in this <u>Section 5</u> are true and correct as of the Effective Date and as of the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.1 <u>Organization and Authority of Seller; Enforceability</u>.** Seller is a limited liability company duly organized, validly existing and in good standing under the laws of the state of California. Seller has full company power and authority to enter into this Agreement and the documents to be delivered hereunder, to carry out its obligations hereunder, and to consummate the transactions contemplated hereby. The execution, delivery, and performance by Seller of this Agreement and the documents to be delivered hereunder and the consummation of the transactions contemplated hereby have been duly authorized by all requisite company action on the part of Seller. This Agreement and the documents to be delivered hereunder have been duly executed and delivered by Seller, and (assuming due authorization, execution and delivery by Buyer) this Agreement and the documents to be delivered hereunder constitute legal, valid and binding obligations of Seller, enforceable against Seller in accordance with their respective terms.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.2 <u>No Conflicts; Consents</u>.** Except for the Senior Lender Release, Transfer Approval, and Landlord Consent, the execution, delivery and performance by Seller of this Agreement and the documents to be delivered hereunder, and the consummation of the transactions contemplated hereby, do not and will not: (a) violate or conflict with the certificate of incorporation, by-laws or other organizational documents of Seller; (b) violate or conflict with any judgment, order, decree, statute, law, ordinance, rule or regulation applicable to Seller or the Purchased Assets; (c) conflict with, or result in (with or without notice or lapse of time or both) any violation of, or default under, or give rise to a right of termination, acceleration or modification of any obligation or loss of any benefit under any contract or other instrument to which Seller is a party or to which any of the Purchased Assets are subject; or (d) result in the creation or imposition of any Encumbrance on the Purchased Assets. No consent, approval, waiver or authorization is required to be obtained by Seller from any person or entity (including any governmental authority) in connection with the execution, delivery and performance by Seller of this Agreement and the consummation of the transactions contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.3 <u>Title to Purchased Assets</u>.** Seller owns and has good title to the Purchased Assets, free and clear of all Liens.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.4 <u>Permits</u>.** The Local License is valid and in full force and effect. All fees and charges with respect to the Local License as of the Effective Date have been paid in full. No event has occurred that, with or without notice or lapse of time or both, would reasonably be expected to result in the revocation, suspension, lapse or limitation of the Local License.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.5 <u>Legal Proceedings</u>.** There is no Action of any nature pending or, to Seller's knowledge, threatened against or by Seller or Seller Affiliates (a) relating to or affecting the Purchased Assets; or (b) 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.6 <u>Brokers</u>.** 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 Seller.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.7 <u>No Other Representations</u>.** Except for the representations and warranties contained in <u>Section 5</u>, neither the Seller, the Members, nor any other Person has made or makes any other express or implied representation or warranty, either written or oral, on behalf of the Seller or the Members, including any representation or warranty as to any management presentations made in expectation of the transactions contemplated hereby or as to the future revenue, profitability or success of the Dispensary or Seller, or any representation or warranty arising from statute or otherwise in law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6. <u>Representations and Warranties of Buyer</u>.** Buyer represents and warrants to the Seller Parties that the statements contained in this <u>Section 6</u> are true and correct as of the Effective Date and as of the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.1 <u>Organization and Authority of Buyer; Enforceability</u>.** Buyer is a limited liability company validly existing and in good standing under the laws of the State of California. Buyer has all necessary limited liability company power and authority to enter into this Agreement and the Transaction Documents, to carry out its obligations hereunder and thereunder, and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and the Transaction Documents by Buyer, the performance by Buyer of its obligations hereunder and thereunder, and the consummation by Buyer of the transactions contemplated hereby and thereby have been duly authorized by all requisite limited liability company action on the part of Buyer. This Agreement has been duly executed and delivered by Buyer, and (assuming due authorization, execution, and delivery by each other party hereto) this Agreement constitutes the legal, valid, and binding obligations of Buyer, enforceable against Buyer in accordance with their respective terms except to the extent enforcement may be affected by Laws relating to bankruptcy, insolvency, creditors' rights and by the availability of injunctive relief, specific performance and other equitable remedies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.2 <u>No Conflicts; Consents</u>.** 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 any Law or Governmental Order applicable to Buyer; or (b) conflict with, result in any breach of, constitute a default (or event which with the giving of notice or lapse of time, or both, would become a default) under, or give to others any rights of termination, amendment, acceleration, suspension, revocation or cancellation of, any contract to which Buyer is a party or by which Buyer is bound or by which any of Buyer's properties or assets are subject, or (c) conflict with or result in a violation or breach of any provision of the organizational documents of Buyer. Except for the Landlord Consent, the execution, delivery and performance by Buyer of this Agreement does not and will not require any consent, approval, authorization or other order of, action by, filing with or notification to, any Governmental Authority or any other Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.3 <u>Sufficiency of Funds</u>.** Buyer has immediately available funds (and shall continue to have such funds as of the Closing Date) in an aggregate amount sufficient to consummate the transactions contemplated by this Agreement including the payment of the Purchase Price on the terms set forth in Section 2.2 and all fees and expenses payable by Buyer in connection with transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.4 <u>Legal Proceedings</u>.** There are no Actions pending or, to Buyer's Knowledge, threatened, by or against Buyer or any Affiliate of Buyer that challenges or seeks to prevent, enjoin, or otherwise delay the transactions contemplated by this Agreement or the consummation of the transactions contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.5 <u>Brokers</u>.** No broker, finder, investment banker or financial advisor 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.6 <u>Independent Investigation</u>.** Buyer has conducted its own independent investigation, review and analysis of the Seller, Dispensary, Purchased Assets, results of operations, prospects, condition (financial or otherwise), or assets of the Seller and Dispensary, and acknowledges that it has been provided adequate access to the personnel, properties, assets, premise, books and records, and other documents and data of the Seller for such purpose. Buyer acknowledges and agrees that: (a) in making its decision to enter into this Agreement and to consummate the transactions contemplated hereby, Buyer has relied solely upon its own investigation and the express representations and warranties of the Seller set forth in <u>Section 5</u>, of this Agreement (including the related portions of the Disclosure Schedules) as well as the assumed accuracy of those documents, representations and warranties made in the course of Due Diligence; and (b) none of the Seller, Members, or any other Person has made any representation or warranty as to the Seller, Dispensary, Purchased Assets, or this Agreement, except as expressly set forth in <u>Section 5</u> of this Agreement (including the related portions of the Disclosure Schedules) and in relation to those documents provided in the course of Due Diligence preceding this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.7 <u>No Other Representations</u>.** Except for the representations and warranties contained in <u>Section 6</u>, neither the Buyer, nor any other Person has made or makes any other express or implied representation or warranty, either written or oral, on behalf of the Buyer, including any representation or warranty arising from statute or otherwise in law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7. <u>Indemnification</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.1 <u>Survival</u>.** Unless otherwise specified, the representations and warranties of the Seller and Buyer contained in this Agreement shall survive the Closing until the date that is twelve (12) months after the Closing Date (the "<u>General Survival Date</u>"). None of the covenants or other agreements contained in this Agreement shall survive the Closing Date other than those which by their terms contemplate performance after the Closing Date, and each such surviving covenant and agreement shall survive the Closing for the period contemplated by its terms. If written notice of a claim has been given prior to the expiration of the applicable representations and warranties by Buyer to the Seller, then the relevant representations and warranties shall survive as to such claim, until such claim has been finally resolved.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.2 <u>Indemnification by Seller Parties</u>.** Subject to the limitations set forth in this Section 7, the Seller Parties hereby covenant and agree to defend, indemnify, and hold harmless Buyer and its Affiliates and Representatives (each a "<u>Buyer Indemnified Party</u>") from and against any and all losses, damages, liabilities, deficiencies, Actions, judgments, interest, awards, penalties, fines, costs or expenses of whatever kind, including reasonable attorneys' fees (collectively, "<u>Losses</u>"), arising out of or resulting from:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) any inaccuracy in or breach of any of the representations or warranties of the Seller contained in this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b)** any breach or non-fulfillment of any covenant, agreement, or obligation to be performed by Seller pursuant to this Agreement; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(c)** any Excluded Asset or any Excluded Liability.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.3 <u>Indemnification by Buyer</u>.** Subject to the limitations set forth in this <u>Section 7</u>, the Buyer hereby covenants and agree to defend, indemnify, and hold harmless the Seller Parties and their respective Affiliates and Representatives (each a "<u>Seller Indemnified Party</u>") from and against any and all Losses, arising out of or resulting from:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)** any inaccuracy in or breach of any of the representations or warranties of Buyer contained in this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b)** any breach or non-fulfillment of any covenant, agreement, or obligation to be performed by Buyer pursuant to this Agreement; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(c)** any Assumed Liability.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.4 <u>Limitations</u>.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Indemnifying Party shall not be liable to the Indemnified Party for indemnification under this <u>Section 7</u> until the aggregate amount of all Losses in respect of indemnification under <u>Section 7</u> exceeds five thousand dollars ($5,000) (the "<u>Basket Amount</u>"), in which event the Indemnifying Party shall only be required to pay or be liable for Losses in excess of the Basket Amount.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each Indemnified Party shall use its commercially reasonable efforts to mitigate any Losses for which it is entitled to indemnification pursuant to this <u>Section 7</u> including incurring costs only to the minimum extent necessary to remedy the breach that gives rise to such Loss.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Notwithstanding the foregoing, the limitations set forth in this <u>Section 7.4</u> shall not apply to any Losses arising out of or related to fraud, willful misconduct, or criminal acts committed by or on behalf of an Indemnifying Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.5 <u>Notice of Loss; Third Party Claims; Direct Claims</u>.** For purposes of this <u>Section 7</u>, the term "<u>Indemnified Party</u>" means a Buyer Indemnified Party or a Seller Indemnified Party, as the case may be, and the term "<u>Indemnifying Party</u>" means the Seller pursuant to <u>Section 7.2</u> or Buyer pursuant to <u>Section 7.3</u>, as the case may be.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) An Indemnified Party shall give the Indemnifying Party written notice of any claim which an Indemnified Party has determined has given or could give rise to a right of indemnification under this Agreement stating the amount of the Loss, only to the extent then known by the Indemnified Party, and containing a reference to the provisions of this Agreement in respect of which such right of indemnification is claimed or arises; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations under this <u>Section 7</u> except to the extent that the Indemnifying Party is actually and materially prejudiced by such failure and shall not relieve the Indemnifying Party from any other obligation or Loss that it may otherwise have to any Indemnified Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If an Indemnified Party shall receive written notice of any Action, audit or demand (each, a "<u>Third Party Claim</u>") against it or which may give rise to a claim for Loss under this <u>Section 7</u>, within 30 days of the receipt of such notice, the Indemnified Party shall give the Indemnifying Party notice of such Third Party Claim; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations under this <u>Section 7</u>except to the extent that the Indemnifying Party is actually and materially prejudiced by such failure and shall not relieve the Indemnifying Party from any other obligation or Liability that it may have to any Indemnified Party otherwise than under this <u>Section 7</u>. If the Indemnifying Party acknowledges in writing its obligation to indemnify the Indemnified Party hereunder against any Losses that may result from such Third Party Claim, then the Indemnifying Party shall be entitled to assume and control the defense of such Third Party Claim at its expense and through counsel of its choice if (i) the Indemnifying Party gives notice of its intention to do so to the Indemnified Party within ten (10) days of the receipt of such notice from the Indemnified Party, (ii) the Indemnifying Party actively and diligently defends such Third Party Claim, or (iii) the Third Party Claim involves only claims for monetary damages and does not seek an injunction or other equitable relief; provided, however, that if there exists or is reasonably likely to exist a conflict of interest that would make it inappropriate in the judgment of the Indemnified Party in its sole and absolute discretion for the same counsel to represent both the Indemnified Party and the Indemnifying Party, then the Indemnified Party shall be entitled to retain its own counsel in each jurisdiction for which the Indemnified Party determines counsel is required, at the expense of the Indemnifying Party. In the event that the Indemnifying Party exercises the right to undertake any such defense against any such Third Party Claim as provided above, the Indemnified Party shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party, at the Indemnifying Party's expense, all witnesses, pertinent records, materials and information in the Indemnified Party's possession or under the Indemnified Party's control relating thereto as is reasonably required by the Indemnifying Party (provided that no party shall be required to provide information to the extent it is subject to attorney-client privilege or such information may be reasonably relevant to a direct claim among the parties). Similarly, in the event the Indemnified Party is, directly or indirectly, conducting the defense against any such Third Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnified Party in such defense and make available to the Indemnified Party, at the Indemnifying Party's expense, all such witnesses, records, materials and information in the Indemnifying Party's possession or under the Indemnifying Party's control relating thereto as is reasonably required by the Indemnified Party (provided that no party shall be required to provide information to the extent it is subject to attorney-client privilege or may be reasonably relevant to a direct claim among the parties). No such Third Party Claim may be settled by the Indemnifying Party without the prior written consent of the Indemnified Party which shall not be unreasonably withheld, conditioned or delayed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Any claim by an Indemnified Party on account of a Loss which does not result from a Third Party Claim (a "<u>Direct Claim</u>") shall be asserted by the Indemnified Party giving the Indemnifying Party prompt written notice thereof. The failure to give such prompt written notice shall not, however, relieve the Indemnifying Party of from any of its obligations under this <u>Section 7</u>except to the extent that the Indemnifying Party is actually and materially prejudiced by such failure and shall not relieve the Indemnifying Party from any other obligation or Liability that it may have to any Indemnified Party otherwise than under this <u>Section 7</u>. Such notice by the Indemnified Party shall describe the Direct Claim in reasonable detail based on the facts then known, and shall indicate the estimated amount, if reasonably practicable based on the facts then known, 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. During such 30-day period, the Indemnifying Person and Indemnified Person shall use good faith efforts to resolve the disputed matters. If the dispute is not resolved within such 30-day period, either party may seek resolution of the dispute in a court having jurisdiction over the parties and the matter. 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; provided, that, in no event shall any Indemnified Party be required to wait for such 30-day period prior to pursuing any remedies available to such Indemnified Party pursuant to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Notwithstanding anything contained in this Agreement to the contrary, no Party shall be liable to any other party for indirect, special, punitive, exemplary or consequential loss or damages arising out of this Agreement (collectively "<u>Consequential Damages</u>"), provided, however, the foregoing shall not preclude recovery by a Buyer Indemnified Party or Seller Indemnified Party for Consequential Damages payable to third parties as a result of Third Party Claims or Consequential Damages premised on or arising from an Action of fraud, willful misconduct, or criminal acts by a party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.6 <u>Effect of Investigation</u>.** 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 herein, as the case may be.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.7 <u>Exclusive Remedies</u>.** Except (a) for remedies that cannot be waived as a matter of applicable Law, (b) for specific performance, injunctive relief, or other equitable remedies, including pursuant to <u>Section 10,18</u>, or (c) in respect of claims based on fraud, criminal acts, or willful misconduct, the indemnification provisions of this <u>Section 7</u> shall be the sole and exclusive remedy for any breach of this Agreement from and after the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.8 <u>Tax Treatment of Indemnification Payments</u>.** 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8. <u>Termination.</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.1** This Agreement may be terminated at any time prior to the Closing:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) by the mutual written consent of the Buyer and Sellers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) by Buyer, if Seller breaches this Agreement which breach (i) would give rise to the failure of a condition set forth in <u>Section 4.1</u> and (ii) has not been cured within thirty (30) calendar days from the date that Seller is notified by Buyer in writing of such breach; provided that Buyer is not otherwise in material default or material breach of this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) by Seller, if Buyer breaches its representations, warranties, covenants, or agreements contained in this Agreement which breach (i) would give rise to the failure of a condition set forth in <u>Section 4.2</u> and (ii) has not been cured within thirty (30) calendar days from the date that Buyer is notified by Seller in writing of such breach; provided that Seller is not otherwise in material default or material breach of this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) by Seller or Buyer if the City expressly denies the transfer of the Local License to the Buyer and following good faith efforts by the Parties, the City expressly continues to deny the transfer of the Local License to the Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.2 <u>Effect of Termination</u>.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If any Party validly terminates this Agreement pursuant to, and in accordance with, <u>Section 8.1(a)-(c)</u>, this Agreement shall forthwith become void and of no further force and effect, except that (a) the obligations of the Parties set forth in this <u>Section 8.2(a)</u>, <u>Section 9</u>, <u>Section 10</u>, and <u>Section 10.4</u> shall survive such termination indefinitely, and (b) nothing herein shall relieve any party from Liability for fraud or for any intentional breach of this Agreement. If this Agreement is terminated pursuant to <u>Section 8.1(a)</u> or <u>Section 8.1(b)</u> then, after Buyer's satisfaction of its obligations in <u>Section 8.3</u>, Seller shall refund to Buyer the full amount of all consideration paid to Seller prior to such termination. If this Agreement is terminated pursuant to <u>Section 8.1(c)</u> then Seller shall be entitled to keep all consideration, payment, and monies paid to Seller prior to the termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding anything to the contrary, in the event this Agreement is terminated pursuant to <u>Section 8.1(d)</u>, the Parties agree and covenant to cooperate and work in good faith towards restructuring, modifying, and/or amending the transaction such that the end result is Buyer has control and ownership of the Dispensary and/or Local License. In the event of Termination pursuant to Section 8.1(d), all consideration paid to Seller prior to such termination shall be completely refunded to Buyer, with the delivery of the City's written express denial of the Local License Transfer being sufficient documentation for the full release of the CDTFA Payment from Escrow back to Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.3 <u>Post Termination Cooperation</u>.** Notwithstanding anything to the contrary, in the event of termination of this Agreement prior to Closing in accordance with this <u>Section 8</u> (except for a termination pursuant to <u>Section 8.1(d)</u>) Buyer covenants it shall within five (5) days of the date of termination (a) withdraw and/or void any ownership changes submitted or reported to the City (or the applicable Government Authorities), (b) take all necessary steps and acts to ensure the Lease is returned to the control of Seller and Company, (c) assign, transfer, or give back to Seller any Licenses, permits, assets, accounts, contracts, or agreements under the control of Buyer at the time of termination, (d) take all necessary steps to ensure the Licenses are updated, modified, or otherwise changed to reflect Seller as the owner of the Company and the Licenses, and (e) such other acts necessary to return the operational Enterprise to the control and operation of the Seller.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9. <u>Governing Law</u><u>; Dispute Resolution</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.1** This Agreement shall be governed by, enforced, and construed under and in accordance with the Laws of the State of California, without giving effect to the principles of conflicts of law thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.2** In the event of any Action arising out of or relating to any performance required under this Agreement or the interpretation, validity or enforceability of this Agreement, the parties hereto shall use their good faith efforts to settle the Action. To this effect, they shall consult and negotiate with each other in good faith and, recognizing their mutual interests, attempt to reach a just and equitable resolution satisfactory to the parties. If the Action cannot be settled through negotiation within a period of seven (7) days, the parties agree to attempt in good faith to settle the claim through mediation, administered by a mediator mutually agreeable to the parties, before resorting to arbitration. If they do not reach such resolution, or an agreed upon mediator cannot be identified, within a period of thirty (30) days, then, upon notice by either Party to the other they shall commence arbitration as set forth below. A party failing or refusing to submit an Action to mediation shall not be entitled to an award of attorney's fees even if later they are determined to be the prevailing party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.3** Subject to the foregoing, the parties agree to submit all Actions and any dispute related to this Agreement to binding arbitration before JAMS. The arbitration shall be held in accordance with the JAMS then-current Streamlined Arbitration Rules & Procedures (and no other JAMS rules), which currently are available at: https://www.jamsadr.com/rules-streamlined-arbitration. The arbitrator shall be either a retired judge, or an attorney who is experienced in commercial contracts and licensed to practice law in California, selected pursuant to the JAMS rules. The parties expressly agree that any arbitration shall be conducted in the Los Angeles County, California. <u>Each party understands and agrees that by signing this Agreement, such party is waiving the right to a jury</u>. The arbitrator shall apply California substantive law in the adjudication of all Actions. Notwithstanding the foregoing, any party to an Action may apply to the state courts located in Los Angeles County for a provisional remedy, including, but not limited to, a temporary restraining order or a preliminary injunction. The application for or enforcement of any provisional remedy by a party shall not operate as a waiver of the agreement to submit a dispute to binding arbitration pursuant to this provision. After a demand for arbitration has been filed and served, the parties may engage in reasonable discovery in the form of requests for documents, interrogatories, requests for admission, and depositions. The arbitrator shall resolve any disputes concerning discovery. The arbitrator shall award costs and reasonable attorneys' fees to the prevailing party, as determined by the arbitrator, to the extent permitted by California law unless the prevailing party failed or refused to first submit their claim to mediation in accordance with the subsection directly above. The arbitrator's decision shall be final and binding upon the parties. The arbitrator's decision shall include the arbitrator's findings of fact and conclusions of law and shall be issued in writing within thirty (30) days of the conclusion of the arbitration proceedings. The prevailing party may submit the arbitrator's decision to state courts located in Los Angeles County for an entry of judgment thereon. Any party's failure to pay their pro rata share of any arbitration fees and expenses shall not be grounds to delay the appointment of an arbitrator or to stay the arbitration. Further, any failure of a party to pay such fees and/or expenses within 30 days of the respective due date shall constitute a default by that party and entitle the non-defaulting party to the entry of a default judgment by the arbitrator against the defaulting party. Any default judgment awarded by an arbitrator shall be fully enforceable, and all defenses to entry, enforcement, or collection upon that default judgment are waived.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10. <u>Miscellaneous Provisions</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.1 <u>Amendment</u>.** No amendment, modification or discharge of this Agreement shall be valid or binding unless set forth in writing and duly executed by the Parties hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.2 <u>Severability</u>.** This Agreement is severable, and in the event that any one or more of the provisions hereof shall be deemed invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby. It is the intent of the Parties to be compliant with all applicable laws (other than Federal Cannabis Laws), and the Parties shall act in accordance with <u>Section 6.15</u> to further that objective.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.3 <u>Headings</u>.** The descriptive headings in this Agreement are for convenience only and shall not affect the construction of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.4 <u>Confidentiality</u>**. In addition to and not in abrogation of any confidentiality agreement, terms, or provisions previously entered into between and/or among the Parties, each party agrees that, unless and until the transactions contemplated by this Agreement have been consummated, it and its representatives will hold in strict confidence all data and information obtained with respect to another party or any subsidiary thereof from any representative, officer, director or employee, or from any books or records or from personal inspection, of such other party, and shall not use such data or information or disclose the same to others, except (i) to the extent such data or information is published, is a matter of public knowledge, or is required by Law to be published; or (ii) to the extent that such data or information must be used or disclosed in order to consummate the transactions contemplated by this Agreement. In the event of the termination of this Agreement, each party shall return to the applicable other party all documents and other materials obtained by it or on its behalf and shall destroy all copies, digests, work papers, abstracts or other materials relating thereto, and each party will continue to comply with the confidentiality provisions set forth herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.5 <u>Attorneys' Fees</u>**. In the event that any party institutes any Action to enforce this Agreement or to secure relief from any default hereunder or breach hereof, the prevailing party shall be reimbursed by the losing party for all costs, including reasonable outside attorneys' fees, incurred in connection therewith and in enforcing or collecting any judgment rendered therein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.6 <u>Expenses</u>**. Except as otherwise specified in this Agreement, all costs and expenses, including fees and disbursements of counsel, financial advisors and accountants, incurred in connection with this Agreement and the transactions contemplated by this Agreement shall be paid by the party incurring such costs and expenses, whether or not the Closing shall have occurred; <u>provided</u>, that the parties hereto agree that upon consummation of the transactions contemplated by this Agreement, Company shall pay all costs and expenses, including fees and disbursements of counsel, financial advisors and accountants, incurred by Buyer in connection with this Agreement and the transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.7 <u>Assignment</u>.** The Seller Parties shall not assign or transfer, in whole or in part, this Agreement or any of such Party's rights, duties or obligations under this Agreement without the prior written consent of the other Parties. Buyer may assign or transfer, in whole or in part, this Agreement or any of its rights, duties or obligations under this Agreement, to an Affiliate without the other Parties' prior written consent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.8 <u>Waiver</u>.** The waiver by any Party of a breach or violation of any provision in this Agreement shall not operate or be construed as a waiver of any subsequent breach or default, whether or not of a similar nature, or as a waiver of any other provisions, rights or privileges hereunder and no waiver shall be effective unless set forth in writing and executed by the Party waiving such provisions, rights or privileges. No course of dealing between or among any persons having any interest in this Agreement shall be deemed effective to modify, amend or waive any part of this Agreement or any rights or obligations of any Party. No failure to exercise, delay in exercising or single or partial exercise of any right, power or remedy by any Party hereunder shall constitute a waiver of, or shall preclude any other or further exercise of, the same or any other right, power or remedy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.9 <u>Binding Effect</u>.** This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.10 <u>No Third Party Beneficiaries</u>.** Except for the provisions of <u>Section 6</u> relating to indemnified parties, this Agreement shall be binding upon and inure solely to the benefit of the parties hereto and their respective successors and permitted assigns. Nothing herein, express or implied, is intended to or shall confer upon any other Person, including any employee or former employee of Company, any legal or equitable right, benefit or remedy of any nature whatsoever, including any rights of employment for any specified period, under or by reason of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.11 <u>Force Majeure</u>.** Any Party shall be excused for failures and delays in performance of its respective obligations under this Agreement due to any cause beyond the control and without the fault of such party, including without limitation, any act of God, war, terrorism, bio-terrorism, riot or insurrection, law or regulation, strike, flood, earthquake, water shortage, fire, explosion or inability due to any of the aforementioned causes to obtain necessary labor, materials or facilities (but excluding lack of funds). This provision shall not release such Party from using its best efforts to avoid, mitigate or remove such cause, and such Party shall continue performance hereunder with the utmost dispatch once such cause has been avoided, mitigated or removed. Upon claiming any such excuse or delay for non-performance, such Party shall give prompt written notice thereof to the other Party, provided that failure to give such notice shall not in any way limit the operation of this provision.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.12 <u>No Rule of Construction</u>.** This Agreement has been negotiated at arm's-length by parties of equal bargaining strength, each represented by counsel or having had but declined the opportunity to be represented by counsel and having participated in the drafting of this Agreement. This Agreement creates no fiduciary or other special relationship between the parties hereto, and no such relationship otherwise exists. No presumption in favor of or against any party in the construction or interpretation of this Agreement or any provision hereof shall be made based upon which Person might have drafted this Agreement or such provision.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.13 <u>Counterparts and Electronic Signatures</u>.** This Agreement and any amendments hereto may be executed in duplicate counterparts, each of which will be deemed to be an original and both of which, taken together, shall constitute one and the same agreement. Counterparts may be executed in either original or electronically transmitted form (e.g., via facsimile or e-mailed printable document format (.pdf) form), and the Parties hereby adopt as original any signatures received in electronically transmitted form.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.14 <u>Notice</u>** Any notice or other communications required or permitted hereunder shall be in writing and shall be sufficiently given if personally delivered to it or sent by email, overnight courier or registered mail or certified mail, postage prepaid, addressed as follows:

---

| | |
|:---|:---|
| If to Buyer, to:<br>OTC Miramar LLC<br> 15030 Ventura Blvd #169<br> Sherman Oaks, CA 91403<br> Attn: Norman Yousif<br> normanyousif11@gmail.com<br>| with a copy to (which shall not constitute notice): <br>Maddocks Law<br> 23 Corporate Plaza Dr. #150<br> Newport Beach, CA 92660<br> Attn: Sean Maddocks<br> maddocks@maddockslaw.com<br>|
| If to Seller (pre-Closing) or DEP:<br>DEP Nevada, Inc.<br> 6420 Sunset Corporate Drive<br> Las Vegas, NV 89120<br> Attn: Stephen Trip' Hoffman triphoffman@bodyandmind.com<br>| with a copy to (which shall not constitute notice): <br>Rimon Law<br> 2029 Century Park East, Suite 400N<br> Los Angeles, CA 90067<br> Attn: Lukian Kobzeff<br> lukian.kobzeff@rimonlaw.com <br>|
| If to SJJR:<br>SJJR, LLC<br> 9923 Campo Road<br> Spring Valley, CA 91977<br> Attn: James Tooma<br> Jamestooma1@gmail.com<br>|  |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Any party may change its address for notices hereunder upon notice to each other party in the manner for giving notices hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any notice hereunder shall be deemed to have been given (i) upon receipt, if personally delivered, (ii) on the day after dispatch, if sent by overnight courier, (iii) on the next business day if transmitted by email, and (iv) three (3) days after mailing, if sent by registered or certified mail.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.15 <u>Entire Agreement</u>.** This instrument and the instruments attached hereto as exhibits contain the entire agreement and understandings between the Parties hereto with respect to the matters discussed herein, and supersede any prior agreements or understandings, written or oral, with respect to the matters discussed herein. This Agreement may not be modified or amended except by mutual consent of the Parties, and any such modification or amendment must be in a writing duly executed by the Parties hereto, and shall be attached to, and become a part of, this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.16 <u>Waiver of Jury Trial</u>**. Each of the parties hereto hereby waives to the fullest extent permitted by applicable Law any right it may have to a trial by jury with respect to any litigation directly or indirectly arising out of or relating to this Agreement or the transactions contemplated by this Agreement. Each of the parties hereto hereby (a) certifies that no representative, agent or attorney of the other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce the foregoing waiver and (b) acknowledges that it has been induced to enter into this Agreement and the transactions contemplated by this Agreement, as applicable, by, among other things, the mutual waivers and certifications in this <u>Section 10.16</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.17 <u>Further Assurances</u>.** Each party shall execute and deliver such documents and take such action, as may reasonably be considered within the scope of such party's obligations hereunder, necessary to effectuate the transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.18 <u>Specific Performance</u>**. The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed by them in accordance with the terms hereof or were otherwise breached and that each party hereto shall be entitled to an injunction or injunctions, specific performance and other equitable relief to prevent breaches of the provisions hereof and to enforce specifically the terms and provisions hereof, without the proof of actual damages, in addition to any other remedy to which they are entitled at law or in equity. Each party agrees to waive any requirement for the security or posting of any bond in connection with any such equitable remedy, and agrees that it will not oppose the granting of an injunction, specific performance or other equitable relief on the basis that (a) the other party has an adequate remedy at law, or (b) an award of specific performance is not an appropriate remedy for any reason at law or equity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.19 <u>Non-Recourse</u>**. This Agreement may only be enforced against, and any claim, Action, suit, or other legal proceeding based upon, arising out of, or related to this Agreement, or the negotiation, execution or performance of this Agreement, may only be brought against the Parties hereto (including any party to whom the rights or obligations hereunder are assigned or any successor to a Party hereto) and then only with respect to the specific obligations set forth herein with respect to such Party. No past, present, or future director, officer, employee, incorporator, manager, member, partner, stockholder, Affiliate, agent, attorney, or other Representative of the Parties or of any Affiliate of the Parties, or any of their successors or permitted assigns (collectively, the "<u>Non-Party Affiliates</u>"), shall have any Liability for any obligations or Liabilities of any Party hereto under this Agreement or for any claim, Action, suit, or other legal proceeding based on, in respect of or by reason of the transactions contemplated hereby. This <u>Section 10.19</u> is intended for the benefit of, and shall be enforceable by, each of the Non-Party Affiliates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.20 <u>Time</u>.** If any date on which a Party is required to take any action pursuant to this Agreement falls on a weekend or a legal holiday, then such Party shall have the right to take such action on the first Business Day next following such date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.21 <u>Regulatory Compliance</u>.** This Agreement is subject to strict requirements for ongoing regulatory compliance by the Parties, including, without limitation, requirements that the Parties take no action in violation of the Cannabis Laws or the guidance or instruction of any applicable state regulatory body (together with any successor or regulator with overlapping jurisdiction, the "<u>Regulator</u>"). The Parties acknowledge and understand that the Cannabis Laws and/or the requirements of the Regulator are subject to change and are evolving as the marketplace for state-compliant cannabis businesses continues to evolve. If necessary or desirable to comply with the requirements of the Cannabis Laws and/or the Regulator, the Parties hereby agree to (and to cause their respective Affiliates and related parties and representatives to) use their respective commercially reasonable efforts to take all actions reasonably requested to ensure compliance with the Cannabis Laws and/or the Regulator, including, without limitation, negotiating in good faith to amend, restate, amend and restate, supplement or otherwise modify this Agreement to reflect terms that most closely approximate the Parties' original intentions but are responsive to and compliant with the requirements of the Cannabis Laws and/or the Regulator. In furtherance, not limitation, of the foregoing, the Parties further agree to cooperate with the Regulator to promptly respond to any informational requests, supplemental disclosure requirements or other correspondence from the Regulator and, to the extent permitted by the Regulator, keep all other parties hereto fully and promptly informed as to any such requests, requirements or correspondence.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.22 <u>Federal Cannabis Laws</u>.** Notwithstanding any other provision of this Agreement, the Parties agree and acknowledge that no Party makes, will make or shall be deemed to make or have made any representation or warranty of any kind regarding the compliance of this Agreement with any Federal Cannabis Laws. No Party hereto shall have any right of rescission or amendment arising out of or relating to any non-compliance with Federal Cannabis Laws unless such non-compliance also constitutes a violation of applicable state law as determined in accordance with the Cannabis Laws or by the Regulator, and no Party shall seek to enforce the provisions hereof in federal court unless and until the Parties have reasonably determined that the Cannabis Laws is fully compliant with Federal Cannabis Laws. As used herein, "**Federal Cannabis Laws**" means any U.S. federal laws, civil, criminal or otherwise, as such relate, either directly or indirectly, to the cultivation, harvesting, production, distribution, sale and possession of cannabis, marijuana or related substances or products containing or relating to the same, including, without limitation, the prohibition on drug trafficking under 21 U.S.C. § 841(a), et seq., the conspiracy statute under 18 U.S.C. § 846, the bar against aiding and abetting the conduct of an offense under 18 U.S.C. § 2, the bar against misprision of a felony (concealing another's felonious conduct) under 18 U.S.C. § 4, the bar against being an accessory after the fact to criminal conduct under 18 U.S.C. § 3, and federal money laundering statutes under 18 U.S.C. §§ 1956, 1957, and 1960 and the regulations and rules promulgated under any of the foregoing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.23 <u>Cross Default</u>.** A material breach by either Party of the MSA or any of the Transaction documents shall constitute a material breach of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.24 <u>Public Disclosure</u>**. No Party, nor any of their respective representatives, may make any press release or other public disclosure regarding the existence of this Agreement, its contents, or the transactions contemplated by this Agreement without the written consent of the other Party, in any case, as to the form, content, timing, and manner of distribution or publication of such press release or other public disclosure; provided that Buyer and Seller Parties shall each be entitled to make a press release or public disclosure after the Closing provided that it has given the other Party a copy of such press release or disclosure at least two (2) days in advance and considered any comments from such Party in good faith. Notwithstanding the foregoing, nothing in this Section 10.24 will prevent any Party or its representatives from making any press release or other disclosure required by applicable law or the rules of any stock exchange or governmental agency.

[Signatures of following page]

IN WITNESS WHEREOF, the Parties have each caused this Asset Purchase Agreement to be executed by their duly authorized officers or representatives as of the Effective Date.

**BUYER:**

OTC Miramar LLC

---

| | |
|:---|:---|
| By: | */s/ Norman Yousif* |

---

Name: Norman Yousif

Title: Manager

IN WITNESS WHEREOF, the Parties have each caused this Asset Purchase Agreement to be executed by their duly authorized officers or representatives as of the Effective Date.

**SELLER PARTIES:** 

---

| | | | |
|:---|:---|:---|:---|
| **MEMBERS:** <br>DEP Nevada, Inc.  | **MEMBERS:** <br>DEP Nevada, Inc.  | SJJR, LLC  | SJJR, LLC  |
| By: | */s/ Stephen 'Trip' Hoffman* | By: | */s/ James Tooma* |
| Name: Stephen 'Trip' Hoffman<br> Title: President | Name: Stephen 'Trip' Hoffman<br> Title: President | Name: James Tooma<br> Title: Authorized Signatory  | Name: James Tooma<br> Title: Authorized Signatory  |
| **COMPANY:** <br>NMG San Diego LLC  | **COMPANY:** <br>NMG San Diego LLC  |  |  |
| By: | */s/ Stephen 'Trip' Hoffman* |  |  |
| Name: Stephen 'Trip' Hoffman<br> Title: Manager | Name: Stephen 'Trip' Hoffman<br> Title: Manager |  |  |

---

**<u>Schedule 1</u>**

**<u>Purchased Assets</u>**

---

| |
|:---|
| Seller's San Diego City Annual Operating Permit, License No. XXXXXX-XX (the "**Local License**") |
| Seller's surveillance systems and all tangible and intangible assets related thereto, including any limited access systems and related tangible assets. |
| POS stations. |
| Computers and all tangible and intangible assets related thereto. |
| Fixtures and Furniture located at the Dispensary, including refrigerators. |
| Second Amended Lease. |
| Automated Teller Machines (ATMs), Safes and/or Smart Safes, and Money Counters. |
| Inventory (subject to the Crossover Working Capital adjustment in Section 4.3). |

---

**<u>EXHIBIT A</u>**

ESCROW AGREEMENT

**<u>EXHIBIT B</u>**

SECOND LEASE AMENDMENT

**<u>EXHIBIT C</u>**

SECURED PROMISSORY NOTE

**<u>EXHIBIT D</u>**

BILL OF SALE

For good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, NMG San Diego, LLC, a California limited liability company ("<u>Seller</u>"), does hereby grant, bargain, transfer, sell, assign, convey and deliver to OTC Miramar, LLC, a California limited liability company ("<u>Buyer</u>"), all of its right, title, and interest in and to the Purchased Assets, as such term is defined in the Asset Purchase Agreement, dated as of July 31, 2025 (the "<u>Purchase Agreement</u>") (to which this Bill of Sale is attached as <u>Exhibit D</u>), by and between Seller and Buyer, to have and to hold the same unto Buyer, its successors and assigns, forever.

Buyer acknowledges that Seller makes no representation or warranty with respect to the assets being conveyed hereby except as specifically set forth in the Purchase Agreement.

IN WITNESS WHEREOF, Seller has duly executed this Bill of Sale as of ___________________.

---

| |
|:---|
| NMG San Diego, LLC |
| By: |
| Name: Stephen 'Trip' Hoffman <br> Title: Manager |

---

## Exhibit 10.2

**EXHIBIT 10.2**

**<u>MANAGEMENT SERVICES AGREEMENT</u>**

This MANAGEMENT SERVICES AGREEMENT (this "**Agreement**") is made and entered into as of August 5, 2025 (the "**Execution Date**"), by and between OTC Miramar, LLC a California limited liability company ("**Manager**") and NMG San Diego, LLC, a California limited liability company (the "**Company**"). Manager and the Company are each individually referred to herein as a "**Party**" and, collectively, as the "**Parties**".

WHEREAS, the Company holds an annual operating permit (the "**Local License**") from the City of San Diego (the "**City**") and an adult use license (the "**State License**" together with the Local License, being the "**Licenses**") issued by the California Department of Cannabis Control (the "**DCC**"), and is in compliance with applicable Law (as defined below), including, without limitation, the Cannabis Laws, and currently operates a commercial cannabis dispensary located at 7625 Carroll Road, San Diego, California 92121 (the "**Enterprise**");

WHEREAS, contemporaneously with this Agreement, the Manager, the Company, and DEP Nevada, Inc., a Nevada corporation (the "**Seller**") have entered into that certain asset purchase agreement (the "**APA**"), whereby the Seller is purchasing from the Manager the Local License and other specified assets, on the terms and conditions set forth in the APA (the "**Proposed Acquisition**");

WHEREAS, as of the Execution Date, Stephen 'Trip' Hoffman (the "**Continuing Owner**") is the manager of the Company and is listed as an owner on the State License, and from and after the Execution Date, the Continuing Owner shall continue to serve as a manager of the Company, thereby continuing to qualify as an owner of the Company as that term is defined in Section 15003 of the Cannabis Laws.

WHEREAS, Manager has experience in establishing, building, managing, developing and operating cannabis dispensaries, including, without limitation, providing administrative support, business management, consulting and advisory services including, without limitation, complying with regulatory requirements, human resources and staffing, marketing and branding, financial planning and accounting, sales, security, inventory management and purchasing, and commercial scale cannabis operational management, in connection with operating and managing licensed medical and adult-use commercial cannabis businesses in the State of California; and

WHEREAS, subject to the approval by the DCC of this Agreement, the Manager will provide to the Company on an exclusive basis, the management services contemplated hereunder and set forth on <u>Schedule A</u> attached hereto (as the same may amended by the written agreement of the Parties from time to time, the "**Services**") upon the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the promises and mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

1. <u>Definitions</u>

For purposes of this Agreement, the following terms shall have the meanings and definitions set forth below:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1 **"Cannabis Laws"** shall mean collectively, (i) the Medicinal and Adult-Use Cannabis Regulation and Safety Act (found at Business and Professions Code, Division 10, Section 26000 et seq.), as may be further amended, (ii) the Medicinal and Adult Use Cannabis Regulations, as revised on April 1, 2025 (found at Cal. Code of Reg. Title 4, Div. 19), as may be further amended, and (iii) any ancillary or companion laws and regulations to (i) and (ii) as may currently exist or may be issued in the future.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2 "**Confidential Information**" shall mean any and all proprietary, confidential or other non-public information concerning this Agreement, the APA, or the Licenses (including, without limitation, the application materials and any correspondence with any Governmental Authority), the Enterprise and all analyses, compilations, information, data, studies, business and operating documents, policies and procedures, financial information, accounting records, real property leases, equipment leases, vendor information, marketing or advertising plans, details, documents and information related to the Parties, their respective businesses and affiliates, and any other documents, details and information, to the extent based on such furnished information or reflecting any Party's review of such furnished information. Confidential Information may be communicated orally, visually, in writing or in any other recorded or tangible form. All such data and information shall be considered to be "Confidential Information" whether or not marked or otherwise communicated as such. Notwithstanding anything contained herein to the contrary, Confidential Information shall not include information that: (a) is already known to the Receiving Party without restriction on use or disclosure prior to receipt of such information from the Disclosing Party; (b) is or becomes generally known by the public other than by breach of this Agreement by, or other wrongful act of, the Receiving Party; (c) is developed by the Receiving Party independently of, and without reference to, any Confidential Information of the Disclosing Party; or (d) is received by the Receiving Party from a third party who is not under any obligation to the Disclosing Party to maintain the confidentiality of such information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3 "**DCC Approval**" means approval by the DCC of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.4 "**Disclosing Party**" means a Party that discloses, directly or indirectly, Confidential Information under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.5 "**Governmental Authority**" shall mean any federal, state, local or foreign government or political subdivision thereof, or any agency 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, including without limitation, IDFPR.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.6 "**Governmental Order**" shall mean any Law, writ, injunction, stipulation, determination or award entered by or with any Governmental Authority.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.7 "**Law**" shall mean any statute (including the Cannabis Laws), law, ordinance, regulation, rule, code, order, constitution, treaty, common law, judgment, decree, other requirement or rule of law of any Governmental Authority; provided, however, the Parties hereby acknowledge that under United States federal law, and more specifically the Federal Controlled Substances Act, the possession, use, cultivation, marketing and transfer of cannabis is illegal and that, notwithstanding anything to the contrary, with respect to regulated cannabis business activities, "Law", "law", or "federal" shall only include such federal law, authority, agency, or jurisdiction as is not in conflict with the Laws, regulations, authority, agency, or jurisdiction of any state, district, or territory regarding such regulated cannabis business activities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.8 "**Losses**" means actual losses, damages, liabilities, costs or expenses, 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, speculative, special, or indirect damages, except in the case of fraud or to the extent actually awarded to a Governmental Authority or other third party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.9 "**Representative**" means with respect to a Party, its officers, directors, shareholders, members, managers, agents, representatives, and attorneys.

2. <u>Term; Termination</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 *Term*. Unless terminated sooner in accordance with the terms of this Agreement, the term of this Agreement shall commence on August 5, 2025 (the "<u>Effective Date</u>") and continue until the earliest of the occurrence of any of the following events (being the "<u>Term</u>"): (a) termination of the APA; (b) Manager fails to timely pay any of the Payments set forth in <u>Section 2.2</u> of the APA, including any failure to timely deliver the specified funds into the Escrow Account; (c) the DCC makes a final non-appealable determination denying the approval of this Agreement; (d) upon a Governmental Authority making a final determination that the terms of this Agreement are in contravention of applicable Law; (e) subject to a fifteen (15) day cure period (if allowable under applicable Law), by either Party that is not then in breach, upon written notice to the breaching Party (or their respective affiliates) if there is a material breach of any provision of this Agreement, the APA, or any ancillary agreement related hereto or thereto and such material breach could reasonably result in a Governmental Authority issuing a Governmental Order restraining or enjoining the transactions contemplated hereunder; (f) if either of the Licenses is revoked by the applicable Governmental Authority and as a result the Manager is restricted from effectively providing the Services; or (g) upon the closing of the transactions contemplated by the APA.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 *Revival of Agreement*. Notwithstanding anything contained herein or under the APA to the contrary, if any provision of this Agreement is in contravention of applicable Law, or deemed non-compliant by any Governmental Authority or pursuant to a Governmental Order, unless prohibited by Law, the Parties shall fully cooperate in good faith to become compliant, including, without limitation, amending, modifying or revising this Agreement to comply with such Governmental Authority, Governmental Order, or applicable Law, in a manner which most closely approximates the intent and economic effect of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3 *Effects of Termination; Survival*. Any termination of this Agreement shall not prejudice or otherwise affect the rights or liabilities of the Parties that have accrued prior to such termination, or which expressly survive its termination hereunder or that by its nature would reasonably be expected to extend beyond any such termination, including, without limitation, the following sections shall survive the termination of this Agreement: <u>Section 8</u> (Intellectual Property); <u>Section 9</u> (Non-Disclosure and Return of Confidential Information); and <u>Section 11</u> (Indemnification; Limitation of Liability).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4 *Cooperation*. In the event of termination or expiration of this Agreement (except due to <u>Section 2.1(g)</u>), in addition to any other obligations set forth in this Agreement (or the APA), the Manager shall promptly: (a) return to Company all Company-owned property, equipment, or materials in its possession or control; (b) remove any Manager-owned property, equipment, or materials located at the Enterprise; (c) cooperate and provide assistance to Company in transitioning the Services to an alternate service provider, if reasonably requested by Company; (d) cooperate and provide assistance to Company in transitioning and/or reinstating any permits, Licenses, or other regulatory approvals back to the Company (and/or the Company's control and possession); and (e) cooperate with Company in disclosing to the DCC (if applicable) the termination of this Agreement and removal of Manager from any Company permits, Licenses, and portals.

3. <u>Appointment</u>. Subject to the terms and conditions of this Agreement and applicable Law (including DCC Approval of this Agreement), during the Term, the Company hereby appoints Manager or its duly appointed individual representative, as the Company's true and lawful agent throughout the term of this Agreement for purposes of carrying out the Services on the terms and conditions set forth herein. Manager will be responsible for complying with regulations and the Cannabis Laws and other applicable Laws related to and on behalf of the Enterprise, subject to reasonable consultation and approval by the Company (not to be unreasonably withheld, conditioned, or delayed). Subject to the express terms of this Agreement or except as mutually agreed to by the Parties in writing, the Parties will not engage any other provider of the Services contemplated hereunder during the Term.

4. <u>Relationship Between the Parties</u>. The Parties agree that each Party shall be an independent contractor to the other hereunder and neither such Party nor any of such Party's representatives, agents, or employees shall be deemed to be the representative, agent, or employee of the other Party except as expressly contemplated hereunder. The Parties do not intend to create a partnership between them or any legal relationship other than that of independent contractors on the terms set forth herein. Manager may, but is not obligated to, cause some or all of the Services to be rendered by and/or through third-party contractors, affiliates, and/or assignees of Manager at its own discretion, at its expense and at its risk, provided any subcontracting compliant with applicable Law. Manager acknowledges that Manager and its Manager Advisors shall not be eligible for any Company employee benefits and, to the extent Manager otherwise would be eligible for any Company employee benefits but for the express terms of this Agreement, Manager (on behalf of itself and its employees and any Manager Advisors) hereby expressly declines to participate in such Company employee benefits. For purposes of this Agreement, "Manager Advisors" shall mean Manager's affiliates, or any of their respective contractors, advisors, personnel (including any employees or leased employees providing services to the Company), agents, consultants, or representatives.

5. <u>Services; Manager Obligations</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 *General Conduct*. As of the Effective Date, Manager shall provide all of the Services set forth on <u>Schedule A</u> to the Company in a timely, professional, and workmanlike manner, and in accordance with the terms and conditions of this Agreement and such other services that Manager determines to be reasonable and appropriate to provide the Services and effectuate the intent of this Agreement. <u>Schedule A</u> may be amended from time to time by the mutual written agreement of the Parties. The Manager warrants and covenants it shall perform the Services in accordance with the Cannabis Laws and all applicable Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 *Contracts*. Manager shall be responsible for the negotiation of vendor, contractor, service, and other contracts, as are reasonably necessary or desirable in connection with the operation of the Enterprise in the ordinary course of business. Unless required by applicable Law or as may be reasonably agreed by the Parties in writing, no contracts shall be entered into directly with the Company. If a contract with the Company is required or mutually agreed in writing, Manager will use its best efforts to negotiate contracts that are terminable at-will by the Company with sixty (60) days or less prior written notice. Any contracts that the Manager causes Company to enter into shall be enforceable against and an obligation of the Manager in the event of a termination of this Agreement. Furthermore, Manager agrees it will, in accordance with this Agreement, be liable for any expenses and costs incurred in connection with any such contract and indemnify the Company, the Seller, and their respective affiliates, for any breaches, damages, or obligations under such contracts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 *Working Capital*. All existing Current Assets and Current Liabilities (as defined in the APA) existing on the Effective Date shall be resolved pursuant to terms of the APA.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4 *Additional Covenants*. During the Term, the Manager covenants: (i) it shall timely pay all invoices, debts, liabilities, accounts payable, contracts, obligations, expenses, or any other amounts due (collectively "**Invoices**") of the Company, Enterprise, or incurred pursuant to this Agreement when such Invoices are due and shall not allow any Invoice or liability to go past any due date, become delinquent, or cause any event of default under such governing documents of the Invoices or liability, (ii) it shall not allow any mortgage, pledge, hypothecation, encumbrance, lien (statutory or other), charge, or other security interest to be placed on or against the Enterprise (including the lease or real property) or any Company asset, (iii) it shall maintain, at its sole cost and expense, all assets, properties, chattels, equipment, and the Enterprise in good working order and condition and shall not allow the disrepair or excessive wear and tear or depreciation of any such asset, except in the normal course of business, (iv) it shall maintain, at its sole cost and expense, the requisite amount (and no less than the amount required by applicable Law) of general liability insurance, workers' compensation insurance, commercial automobile insurance, and any other such insurance applicable to the Enterprise, and shall name the Company as an additional insured on all insurance certificates, and (v) shall provide Company a copy of each month's profit and loss statement within thirty (30) calendar days of the end of the preceding month

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5 *Manager Warranties*. The Manager represents, warrants, and covenants to the Company that as of the Effective Date and throughout the Term of this Agreement: (i) it has the full power and authority to carry on its activities as now conducted, to perform the Services, and has the authority and power to execute, deliver and perform this Agreement, (ii) this Agreement will constitute the legal, valid, and binding obligation of the Manager enforceable against the Manager in accordance with its terms except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or other similar laws affecting the enforcement of creditors' rights generally and by general equitable principles, and (iii) to the best of the Managers' knowledge, the Manager has not been the subject of, nor does the Manager have any reason to believe that its officers, members, or managers currently are or will be the subject of, any civil, criminal, or administrative investigation or proceeding brought by any Governmental Authority.

6. <u>Company Obligations</u>. The Company shall use its best efforts to cooperate and collaborate with Manager as reasonably necessary for Manager to provide the Services hereunder. The Parties agree to execute any document necessary or appropriate to evidence or otherwise confirm Manager's authorization to provide the Services and the Company further agrees to provide, promptly upon Manager request, all necessary materials to enable Manager to provide the applicable Services, including any filings or notices under applicable Law.

7. <u>Management Fee; Cost Responsibility</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1 *Intent*. The Parties intend that during the Term of this Agreement, the Manager receives all economic benefit of the Enterprise and fully assumes and is liable for all costs, expenses, and liabilities of the Enterprise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2 *Management Fee*. During the term of this Agreement, as compensation for the Services, the Company shall pay Manager a management fee equal to 100% of the Gross Revenue of the Enterprise (the "**Services Fee**"), provided however that the Manager is satisfying its obligations pursuant to <u>Section 7.2</u>. For purposes of this Agreement, "<u>Gross Revenue</u>" shall mean all of the gross revenue and economic proceeds generated by and derived from the Enterprise as reported on the financial statements of the Company, in accordance with the historical accounting practices of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3 *Cost Responsibility*. In addition to any terms in the APA, during the Term of this Agreement, the Manager is solely and exclusively responsible for all costs, expenses, accounts payable, liabilities, and fees incurred by, generated by, or arising in the course of business by the Enterprise and Company. This includes, but is not limited to, the following: (i) rent and lease expenses; (ii) all gross wages, salaries, benefits, and associated employment taxes and fees; (iii) inventory; (v) marketing; (vi) security; (vii) information technology; (viii) vendor expenses; (ix) regulatory and compliance costs and expenses, including License renewal fees; (x) all Invoices; (xi) sales taxes (both local and state), excise taxes, state income taxes, and federal income taxes (and any costs, fees, and penalties arising thereon); (xii) all other costs and expenses arising in the course of business of the Enterprise; (xiii) any costs, expenses, and fees incurred on behalf of the Company relating to or arising under or incurred by the Manager's performance of the Services or operation of the Enterprise, and (xiv) monthly payments to the California Department of Tax and Fee Administration ("CDTFA") pursuant to the existing payment plan between the Company and the CDTFA, which payments shall result in an offset or reduction of the Purchase Price. Notwithstanding the foregoing, *but* subject to the terms of the APA, Manager shall have no responsibility for any costs, expenses, accounts payable, liabilities, fees or other payables that arose prior to Manager's performance of the Services. To the extent Manager pays any costs, expenses, accounts payable, liabilities, fees or other payables that arose prior to Manager's performance of the Services such amount shall be credited against the Purchase Price outlined in the APA.

8. <u>Intellectual Property</u>. The following provision shall apply with respect to copyrightable works, ideas, brands, trademarks, trade names, trade dress, products, formulations, discoveries, inventions, applications for patents, patents, knowhow, and trade secrets (collectively, "**Intellectual Property**"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1 *Previously Developed Intellectual Property*. All Intellectual Property previously or hereafter developed by a Party or any of its directors, officers, employees, personnel, agents or affiliates, as between the Parties is, and shall remain, the sole and exclusive property of such Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2 *Development of Intellectual Property*. Any further development, extrapolation, enhancement, improvement or other change of a Party's Intellectual Property (each, an "IP Improvement") shall be deemed to be the property of such Party regardless of the Party that made such IP Improvement for all purposes, and, if the IP Improvement was made by the non-owning Party, such Party shall assign all rights and interests therein to the owning Party. Any new development of its Intellectual Property items by Manager in connection with the Services, and any new items of Intellectual Property discovered or developed by Manager or its employees, personnel, agents, or affiliates, during the term of this Agreement, shall be owned by Manager, unless otherwise agreed to in writing between the Parties. Except as set forth herein, this Agreement shall not be considered a "work for hire" with respect to the development of Intellectual Property. The non-owning Party shall sign all documents necessary to perfect the rights of the owning Party in any IP Improvement or other Intellectual Property, including the filing and/or prosecution of any applications for copyrights, trademarks or patents, consistent with this <u>Section 8.2</u>.

9. <u>Non-Disclosure and Return of Confidential Information.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1 *Return of Materials*. The Parties expressly acknowledge and agree that all files, lists, records, documents, drawings, specifications, computer programs and other materials which incorporate, embody or refer to any of the "Confidential Information" as defined in this Agreement shall remain the sole property of the Disclosing Party (as defined below), and such materials shall be promptly returned to the Disclosing Party upon termination of the term of this Agreement or otherwise upon the written request of the Disclosing Party; <u>provided</u> that the Parties may retain copies of Confidential Information of any other Party that would reasonably be required solely for recordkeeping purposes and not for any further use or disclosure; <u>provided</u> <u>further</u>, for the avoidance of doubt, that in the event this Agreement is terminated pursuant to a closing of the transactions contemplated by the Purchase Agreement, any Confidential Information received by Manager from the Company shall become the property of Manager as a result of the closing of the transactions contemplated by the Purchase Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2 *Confidential Information*. The Parties acknowledge and agree that in connection with the obligations, correspondence and negotiations related to this Agreement and all other required documents, contracts and agreements, the Parties have furnished and will continue to furnish one another with information and documentation that constitutes Confidential Information. The Parties acknowledge and agree the Confidential Information will be kept confidential and will not, without the prior written consent of the Disclosing Party or except as otherwise provided for in this Agreement, be disclosed in any manner whatsoever, in whole or in part, and will not be used directly or indirectly for any purpose other than the to perform the obligations contemplated by this Agreement. Moreover, the Receiving Party agrees to transmit the Confidential Information only to those representatives (including, but not limited to members, managers, partners, officers, directors, principal officers, auditors, legal counsel and tax professional) within their organization or those of their affiliates, or companies that are confidentially bound to said Receiving Party under the same terms set forth herein, who need to know the Confidential Information for the purposes contemplated hereby and who are informed of the confidential nature of the Confidential Information. Each Party will be responsible for any breach of this Agreement by any of its respective representatives. Each Party will immediately notify the other Party if it discovers Confidential Information has been disclosed in any manner whatsoever, in violation of the terms of this Agreement. The covenants of this <u>Section 9.2</u> shall survive the termination of this Agreement, regardless of whether it's terminated or the Parties satisfy the terms and requirements provided herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.3 *Exceptions*. The nondisclosure provisions of <u>Section 9.2</u> above shall not be deemed to be breached due to a Party's disclosure of Confidential Information to the extent required by applicable Law or pursuant to any statutory or regulatory provision or court order; *provided, that*, the Disclosing Party has been given prompt and adequate prior written notice and an opportunity to contest any such disclosure, and the Receiving Party shall cooperate with the Disclosing Party in all reasonable respects in connection therewith.

10. <u>Compliance with Applicable Laws</u>. The Parties shall at all times comply in all material respects with all applicable Laws, including the Cannabis Laws, now or hereafter in effect. Manager further agrees, subject to prior written notice to the Company, to make, obtain, and maintain in force at all times during the term of this Agreement, all filings, registrations, reports, Licenses, permits and authorizations required under applicable Law in order for Manager to perform the Services under this Agreement. In the event Manager becomes aware of any violation, or potential violation, of any Governmental Order or Law in carrying out the Services, Manager shall promptly report such violation or potential violation to the Company.

11. <u>Indemnification; Limitation of Liability</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.1 *Indemnification by Manager.* Manager shall, to the fullest extent allowable by applicable Law, , indemnify, defend, and hold harmless the Company and its Representatives (including the Seller and Continuing Owner), from and against any and all Losses arising directly or indirectly out of or resulting in any way from or in connection with Manager's management of the Company or Enterprise, its performance of the Services, and payment of all liabilities, costs, and expenses of the Company during the term. Manager shall further indemnify, defend, and hold harmless the Company and its Representatives from and against any and all Losses arising directly or indirectly out of or resulting in any way from or in connection with: (a) the breach of any of Manager's representations, covenants, or warranties; (b) any grossly negligent, reckless, or intentionally wrongful act or omission of Manager or Manager Advisors, (c) all costs, obligations, liabilities, and expenditures incurred from the Manager's management of the Enterprise and performance of the Services, (d) any failure by Manager to perform the Services in accordance with all applicable Laws including Cannabis Laws, and (e) any employee claims or liabilities arising under any applicable employment or wage Laws, incurred in connection with any personnel hired by or managed by the Manager (or by the Company at Manager's request) to perform services at the Enterprise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.2 *Indemnification by the Company*. In connection with this Agreement, the Company shall indemnify and hold harmless Manager and its Representatives from any and all Losses to the extent arising out of any material violation of Law (not including violations related to the terms or subject matter or terms of this Agreement), gross negligence, or willful misconduct by the Company or any of its officers, members, directors, employees or agents, or the continuing Owner, except where such Losses results from or is incurred in connection with actions taken by or on behalf of the Company (or Continuing Owner) at the recommendation, guidance, or direction of the Manager or a Manager Advisor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.3 *Indemnification by the Seller*. Seller shall indemnify, defend and hold harmless the Manager and its Representatives from any and all Losses arising directly or indirectly out of or resulting in any way from or in connection with Seller's management of the Company or Enterprise prior to the Effective Date, and payment of all liabilities, costs, and expenses of the Company that accrued prior to the Effective Date while the Company and Enterprise were under Seller's Management.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.4 *Specific Performance*. The Parties hereto acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Agreement are not performed in accordance with its specific terms or are otherwise breached. Accordingly, and notwithstanding anything to the contrary contained herein, the Parties agree that, in addition to any other right or remedy to which a Party may be entitled hereunder, each shall be entitled to immediately seek to enforce such provisions of this Agreement by a decree of specific performance and to obtain temporary, preliminary and permanent injunctive relief.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.5 *Limitation of Liability*.

IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR TO ANY THIRD PARTY (EXCEPT PURSUANT TO APPLICABLE LAW OR TO THE EXTENT AWARDED TO A THIRD PARTY BY A COURT OR OTHER TRIBUNAL) FOR ANY INCIDENTAL, INDIRECT, EXEMPLARY, SPECIAL, OR PUNITIVE DAMAGES WHETHER ARISING OUT OF BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE), OR OTHERWISE, REGARDLESS OF WHETHER SUCH DAMAGE WAS FORESEEABLE AND WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

12. <u>Regulatory Acknowledgement</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.1 *Regulatory Compliance*. The Parties acknowledge the contractual relationship contemplated hereby requires regulatory disclosure of the Manager as an "Owner" of Company's licenses under the DCC Regulations. Within fourteen (14) calendar days of Effective Date, the Parties shall submit a DCC *Form 27 Licensee Notification and Request Form* to the DCC notifying the DCC of this Agreement and disclosing the Manager as an "owner" pursuant to management and control pursuant to the Cannabis Laws. To such end, the Manager agrees to provide the Company with certain personal information relating to the Manager and its representatives as necessary to complete the disclosure to the DCC and the City (as applicable). The Manager authorizes and consents to Company's submission of all such required personal information of the Manager and its representatives to the DCC and City (as applicable) including any required Livescans. To facilitate the foregoing, the Manager shall cause all of its necessary representatives to complete Livescans and to completely and accurately provide the personal information as requested by the DCC or the City.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.2 *Reformation*. In the event that a Party receives written notice from DCC and/or other Governmental Authority that this Agreement is unlawful or requires reformation, the Parties agree to reform this Agreement while effecting its intent as nearly as possible. The Parties further covenant to promptly and completely provide all information requested by DCC and/or Governmental Authority related to its review and approval of this Agreement

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.3 *Regulatory Cooperation*. Each Party shall use its reasonable best efforts to consummate the transactions contemplated by this Agreement as promptly as practicable. In furtherance of the foregoing, each Party as promptly as possible shall (i) make, or cause or be made, all filings and submissions (including those required to obtain the state and local approvals) required under any Law applicable to such party or any of its affiliates; and (ii) 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.

13. <u>General Provisions</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.1 *No Implied Waiver*. The failure of any Party at any time to require performance by another Party of any provision of this Agreement shall in no way affect the right to require such performance at any time thereafter, nor shall the waiver of any Party of a breach of any provision of this Agreement constitute a waiver of any succeeding breach of the same or any other provision. Any waiver of the terms or conditions of this Agreement must be in writing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.2 *Entire Agreement and Amendments*. This Agreement (including agreements and exhibits incorporated herein) constitutes the entire agreement among the Parties with respect to the subject matter hereof and supersedes all prior agreements among the Parties, whether written or oral, relating to the subject matter of Services being provided by Manager to the Company. No modifications, amendments or supplements to this Agreement shall be effective for any purpose unless in writing and signed by Manager and the Company. Approvals or consents hereunder of a Party shall also be in writing. This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective representatives, successors and permitted assigns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.3 *Non-Assignment*. No Party may assign or delegate its rights or obligations under this Agreement without the other Party's prior written consent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.4 *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 (3<sup>rd</sup>) 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 <u>Section 13.4</u>):

Notices to Manager shall be addressed to:

OTC Miramar LLC

15030 Ventura Blvd #169

Sherman Oaks, CA 91403

Attn: Norman Yousif

Email: normanyousif11@gmail.com

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

Maddocks Law

23 Corporate Plaza Dr #150

Newport Beach, CA 92660

Attn: Sean Maddocks

Email: maddocks@greencp.com

Notices to the Company shall be addressed to:

NMG San Diego, LLC

6420 Sunset Corporate Drive

Las Vegas, NV 89120

Attn: Stephen Trip' Hoffman

Email: triphoffman@bodyandmind.com

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

Rimon Law

2029 Century Park East, Suite 400N

Los Angeles, CA 90067

Attn: Lukian Kobzeff

lukian.kobzeff@rimonlaw.com

or to such other address as such Party may indicate by a notice delivered to the other Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.5 *Federal Government Action.* The Parties hereby acknowledge that they are aware of and fully understand that despite the Cannabis Laws and the terms and conditions of this Agreement, those engaged in cannabis-related businesses in California, including cultivating, processing, dispensing, transporting, distributing, or possessing marijuana, may still be arrested by federal officers and prosecuted under federal law. In the event of Federal arrest, seizure or prosecution action associated with the Parties' activities described herein, the Parties hereby agree to hold each other harmless and agree to be individually responsible for any attorney's fees associated with defending such actions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.6 *Severability*. Wherever possible, each provision hereof shall be interpreted in such manner as to be effective and valid under applicable Law, but in case any one or more of the provisions contained herein shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such provision or provisions shall be ineffective to the extent, but only to the extent, of such invalidity, illegality or unenforceability without invalidating the remainder of such provision or provisions or any other provisions hereof, unless such a construction would be unreasonable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.7 *Counterparts*. This Agreement may be executed in multiple counterparts, each of which shall be deemed to be an original and shall be binding upon the parties who executed the same, but all of such counterparts shall constitute the same letter. Counterparts may be delivered via facsimile, electronic mail (including .pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.8 *Governing Law; Jurisdiction; Waiver of Jury Trial*. This Agreement shall be governed by and construed in accordance with the laws of the State of California, without giving effect to choice of law doctrines. The jurisdiction and venue for any dispute arising with respect to this Agreement shall be exclusively in the state courts located in Los Angeles County, California. Each of the Parties irrevocably agrees that any legal action or proceeding arising out of or relating to this Agreement or for recognition and enforcement of any judgment in respect hereof brought by any other Party or its successors or assigns may be brought in and determined by a state court seated in the Los Angeles County, California, and each of the Parties hereto hereby irrevocably submits to the exclusive jurisdiction of the aforesaid courts for itself and with respect to its property, generally and unconditionally, with regard to any such action or proceeding arising out of or relating to this Agreement and the transactions contemplated hereby (and agrees not to commence any action, suit or proceeding relating thereto except in such courts). The Parties also hereby agree to waive the doctrine of illegality as a claim or defense in any such legal action or proceeding. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.9 *Further Assurances*. Each party shall execute and deliver such documents and take such action, as may reasonably be considered within the scope of such party's obligations hereunder, necessary to effectuate the transactions contemplated by this Agreement.

***[Signature page follows]***

Management Services Agreement NMG San Diego -w- OTC Miramar

The Parties have caused this Agreement to be executed by their duly authorized representatives as of the Execution Date.

**MANAGER:** 

OTC Miramar LLC

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| | |
|:---|:---|
| By: | */s/ Norman Yousif* |

---

Name: Norman Yousif

Title: Manager

**COMPANY:** 

NMG San Diego LLC

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| | |
|:---|:---|
| By: | */s/ Stephen 'Trip' Hoffman* |

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Name: Stephen 'Trip' Hoffman

Title: Manager

**<u>Schedule A</u>**

**Services**

a. <u>Services</u>: In addition to the Services described elsewhere in this Agreement, Manager shall perform all business, operational, legal, corporate, finance, personnel and accounting functions of the Company to the fullest extent allowable under California Laws, including, but not limited to:

i. regulatory compliance services in furtherance of, in compliance with, or otherwise in any way related to any change whatsoever in any applicable Law, rule, statute, regulation, the entitlement and/or approval process, or other process or requirement relative to the procurement, entitlement, compliance, development, operation, or management of the Licenses or any other permit or license required to be owned by the Company to consummate the transactions contemplated hereby that comes into being, occurs, accrues, becomes effective, or otherwise becomes applicable or required after the Effective Date, including, but not limited to all services necessary to fully comply with and satisfy those requirements of the Cannabis Laws;

ii. services related to maintaining the Enterprise, including procuring relations on behalf of the Company with vendors, state and local agencies, Governmental Authorities, contractors, accountants, attorneys, financial advisors and other professionals;

iii. human resource support and services, including but not limited to, assistance with employment orientation and on-boarding, assistance with development of employment practices policies and procedures, assistance with employment practices regulatory compliance, and selecting and contracting with any employees, third party consultants, independent contractors, vendors or managers, which it deems to be necessary for the administration, operation, security, and management of the Company;

iv. information technology services, including but not limited to, use of office and retail technology and communications equipment (such as desk phones, printers, data processing, point-of-sale and inventory management systems, and copiers), assistance with hardware and software procurement, and hardware and communications equipment management and servicing, networking, file storage, and any other such databases as needed;

v. quality support services, including but not limited to, assistance with safety and quality control policies and procedures, oversight and assistance with safety control processes, and assistance with other matters as they arise;

vi. subject to any limitation of applicable Law, all marketing, advertising and public relations services for the Company, including but not limited to, assistance with sales and marketing materials, and website support services;

vii. financial services, including the collection, receipt and disbursement of funds generated by the Company; and

viii. such other services of a similar nature as required to conduct the operations of the Company and as agreed to by Manager or otherwise for Manager to perform its obligations under this Agreement.

b. <u>Company Bank Account</u>: If applicable, the Company will provide information related to its bank account(s).

c. <u>Manager Representative for Services</u>: The Services will be provided by certain employees of Manager, and/or through third-party contractors, affiliates and/or assignees of Manager and other personnel that are necessary and appropriate for daily operations of the Company's business, as Manager may determine in its sole discretion from time-to-time, at its sole cost and expense (collectively, "  **<u>Staff</u>** "). Without limiting the foregoing, Manager shall be responsible for all salary, bonus, benefits, taxes, workers' compensation insurance costs, and other payments for Staff, including personnel assigned by Manager to perform Manager's management, quality assurance, and oversight responsibilities during the term of this Agreement.

d. <u>Service Period for Services</u>: Until the expiration of the Term or the earlier termination of this Agreement.

## Exhibit 10.3

**EXHIBIT 10.3**

**Secured Promissory Note**

---

| | |
|:---|:---|
| US$429,617.44 | August 5, 2025 (the "<u>Note Date</u>") |

---

FOR VALUE RECEIVED, OTC Miramar, LLC, a California limited liability company ("<u>Borrower</u>"), hereby promises to pay to the order of NMG San Diego, LLC, a California limited liability company ("<u>Lender</u>"), the principal sum of **Four Hundred Twenty Nine Thousand Six Hundred and Seventy and 44/100 U.S. Dollars (US $429,617.44)** (the "<u>Loan</u>"), in lawful money of the United States of America and in immediately available funds. All monetary amounts referenced in this secured promissory note (the "<u>Note</u>") are set forth in United States dollars, including without limitation the Loan and the Amount Due from time to time.

This Note is being delivered in accordance with the conditions of that certain asset purchase agreement (the "<u>APA</u>") entered into among the Borrower, Lender, DEP Nevada, Inc. ("<u>DEP</u>"), and SJJR, LLC ("<u>SJJR</u>" together with DEP, the "<u>Members</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. **<u>Maturity; Interest</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Maturity</u>. The unpaid principal balance of this Note plus accrued and unpaid interest thereon (such amount, less any payments made or Purchase Price Offsets under the APA, the "<u>Amount Due</u>") shall be due and payable on the earlier of: (i) November 4, 2025, or (ii) three (3) calendar days following receipt of the Transfer Approval (as defined in the APA) from the City of San Diego (the "<u>Maturity Date</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Interest Rate</u>. Interest shall accrue on the unpaid principal amount of this Note at a rate per annum equal to 4.03% (the "<u>Interest Rate</u>"). Interest Rate will be computed on the basis of a 365 or 366-day year, as applicable, and the actual number of days elapsed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Interest Free Period</u>. Notwithstanding the foregoing, from the Note Date until the Maturity Date, the Note shall not accrue interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. **<u>Payment Mechanics</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Payment Obligations</u>. Borrower shall have no obligations to make any payments prior to the Maturity Date. Notwithstanding anything to the contrary, the entire Amount Due shall be paid on the Maturity Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Pre-Payment Allowed</u>. The Borrower has the right, but not the obligation, at its sole discretion, to pre-pay this Note (including interest) without penalty, fee, or premium, in whole or in part, prior to the Maturity Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Loan Reduction.</u> The Amount Due shall be reduced by any Crossover Adjustment (as defined in the APA) and any amounts paid to the CDTFA during the Term of the MSA pursuant to Section 3.1(a) of the APA.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Application of Payments</u>. All payments made hereunder shall be applied first to any fees or charges outstanding, then to accrued interest, and then to principal.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Place and Manner of Payment</u>. All payments of principal and interest of this Loan are payable in lawful money of the United States of America, by wire transfer in immediately available funds (or other form of payment as mutually agreed upon), to Lender as the Lender may designate from time to time by written notice to Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. **<u>Security; Release</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Security Agreement</u>. The performance of Borrower's obligations under this Note shall be secured by the collateral specified in the security agreement attached as <u>Exhibit A</u> (the "<u>Security Agreement</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Release Upon Complete Payment</u>. Upon Lender's receipt of complete payment of the entire principal amount and all accrued interest of the Note, Lender shall (a) duly assign, transfer and deliver to or at the direction of the Borrower such of the collateral as may then remain in the possession of the Lender, (b) execute and deliver to Borrower a proper instrument or instruments, acknowledging the satisfaction and termination of this Note, and (c) terminate Lender's security interest under the Security Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. **<u>Termination of APA</u>**. If the APA is terminated pursuant to <u>Section 8.1(a)</u>, <u>Section 8.1(b)</u>, or <u>Section 8.1(d)</u> of the APA, and provided that Section 8.3 of the APA has been satisfied in Lender's reasonable determination, then Parties expressly agree and acknowledge that this Note (and the Security Agreement) shall be void and of no further force and effect, and the Parties shall have no further obligation to each other under this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. **<u>Representations and Warranties of Borrower</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Organization and Authority</u>. Borrower is a limited liability company. Borrower has all the required company power and authority to own its properties and assets, to carry on its business as presently conducted, to enter into and perform this Note to which it is a party and to carry out the transactions contemplated hereby. Borrower is not in violation of any term or provision any applicable agreement as in effect as of this date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Authorization and Non-Contravention</u>. This Note is a valid and binding obligation of Borrower, enforceable in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar laws, from time to time in effect, which affect enforcement of creditors' rights generally. The execution, delivery, issuance and performance of this Note have been duly authorized by all necessary limited liability company action of the Borrower. The execution, delivery and issuance of this Note and the performance of any transactions contemplated by this Note will not: (i) violate or result in a violation of, conflict with or result in a violation of or default (whether after the giving of notice, lapse of time or both) under any contract or obligation to which the Borrower is a party or by which the Borrower is or its assets are bound; or (ii) violate, conflict with or result in a default (whether after the giving of notice, lapse of time or both) under, any provision of any law, regulation or rule, or any order of, or any restriction imposed by any court or other governmental agency applicable to Borrower, except for those which would not have, or be reasonably likely to have, a Material Adverse Effect. "<u>Material Adverse Effect</u>" means any event or circumstance that has or could reasonably be expected to have a material adverse effect on (a) the business, operations, financial condition, assets or liabilities (whether actual or contingent) of the Borrower, (b) the ability of the Borrower to pay the amounts due under this Note in accordance with the terms of this Note, (c) the rights and remedies of the Borrower under this Note or (d) the validity or enforceability of this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. **<u>Events of Default</u>**. The occurrence of any of the following events shall constitute an "<u>Event of Default</u>":

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Borrower shall fail to pay the entire Amount Due on the Maturity Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) except for a failure to pay, Borrower is in breach of or default under any provision contained in this Note and such breach shall not have been remedied within five (5) days after receipt of written notice from Lender;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The occurrence of a Borrower event of default under the Security Agreement (and such event of default has not been cured in the respective cure period as set forth in the Security Agreement) shall constitute an Event of Default under this Note;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The occurrence of a default by Borrower under the APA (and such event of default has not been cured in the respective cure period as set forth in the APA) shall constitute an Event of Default under this Note;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) A proceeding or case shall be commenced, without the application or consent of Borrower, in any court of competent jurisdiction, seeking (i) Borrower's reorganization, liquidation, dissolution, arrangement or winding-up, or the composition or readjustment of Borrower's debts, (ii) the appointment of a receiver, custodian, trustee, examiner, liquidator or the like of Borrower or of all or any substantial part of Borrower's assets, or (iii) similar relief in respect of Borrower under any law relating to bankruptcy, insolvency, reorganization, winding-up or composition or adjustment of debts, and such proceeding or case shall continue without being dismissed, or an order, judgment or decree approving or ordering any of the foregoing shall be entered and continue without being stayed and in effect, for a period of sixty (60) or more days;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) An order for relief against Borrower shall be entered in an involuntary case under the U.S. Federal Bankruptcy Code of 1978, as amended from time to time (the "<u>Bankruptcy Law</u>");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Borrower shall (i) apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee, examiner or liquidator of itself or of all or a substantial part of its assets, (ii) make a general assignment for the benefit of its creditors, (iii) commence a voluntary case under the Bankruptcy Law, (iv) file a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, liquidation, dissolution, arrangement or winding-up or composition or readjustment of debts, (v) fail to controvert in a timely and appropriate manner, or acquiesce in writing to, any petition filed against it in an involuntary case under the Bankruptcy Law or (vi) take any action for the purpose of effecting any of the foregoing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. **<u>Remedies</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Upon the occurrence and during the continuation of an Event of Default, the Lender may, in addition to any other rights or remedies provided for hereunder or by applicable law, do any one or more of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) declare that during the continuance of an Event of Default interest shall accrue on the outstanding balance of the principal and all accrued and unpaid interest at the Interest Rate, plus five percent (5%), or such lower maximum amount of interest permitted to be charged under applicable law, (the "<u>Default Rate</u>") until all outstanding amounts due under the Note have been paid in full.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) declare all or any portion of the principal of, and any and all accrued and unpaid interest on, the Loan to be immediately due and payable, whereupon the same shall become and be immediately due and payable and the Borrower shall be obligated to repay all of such obligations in full, without presentment, demand, protest or further notice or other requirements of any kind, all of which are hereby expressly waived by the Borrower;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) exercise its rights under the Security Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) exercise its rights under the APA;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) exercise all other rights and remedies available to Lender under applicable law, or in equity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The rights and remedies of the Lender under this Note shall be cumulative. The Lender shall have all other rights and remedies as provided under applicable law or in equity. No exercise by the Lender of one right or remedy shall be deemed an election, and no waiver by the Lender of any Event of Default shall be deemed a continuing waiver. No delay by the Lender in enforcing any rights hereunder shall constitute a waiver, election or acquiescence by it in the absence of a written waiver signed by the Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. **<u>Expenses</u>**. Except as set forth in this Note, each party will pay all costs and expenses that it incurs with respect to the negotiation, execution, and delivery of this Note. Borrower shall pay all expenses, charges, costs and fees (including attorneys' fees and expenses) of any nature whatsoever advanced, paid, or incurred by or on behalf of Lender in connection with (a) collection or enforcement of this Note and (b) the exercise by Lender of any rights or remedies available to it under the provisions of this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. **<u>Reinstatement</u>**. This Note shall continue to be effective or be automatically reinstated, as the case may be, if at any time payment, in whole or in part, of any of the Amount Due is rescinded or must otherwise be restored or returned by Lender as a preference, fraudulent conveyance or otherwise under any bankruptcy, insolvency or similar law, all as though such payment had not been made; provided that in the event payment of all or any part of the Amount Due is rescinded or must be restored or returned, all reasonable costs and expenses (including, without limitation, reasonable attorneys' fees and disbursements) incurred by Lender in defending and enforcing such reinstatement shall be deemed to be included as a part of the Amount Due.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. **<u>Notices</u>**. Any notice, demand, communication or other document required, permitted, or desired to be given hereunder shall be in writing and shall be delivered personally or sent by United States registered or certified mail, return receipt requested, postage prepaid, by reputable overnight courier, or by email, and addressed to the party at the respective numbers and/or addresses set forth below each Party's signature block, and the same shall be deemed given and effective (i) upon receipt or refusal if delivered personally or by hand delivered messenger service, (ii) the date received or refused if sent by reputable overnight courier, (iii) the date received or refused if mailed by United States registered or certified mail, return receipt requested, postage prepaid, and/or (iv) the next business day following transmittal of electronic mail. A party may change its address for receipt of notices by service of a notice of such change in accordance herewith.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. **<u>Amendment</u>**. This Note or any provision hereof may be waived, changed, modified, or discharged only by agreement in writing signed by Borrower and Lender. The Borrower may not assign or transfer its obligation hereunder without the prior written consent of the Lender, which consent may be withheld in its sole discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. **<u>Severability</u>**. If any provision of this Note shall for any reason be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provision of this Note, but this Note shall be construed as if this Note had never contained the invalid or unenforceable provision.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. **<u>Governing Law</u>**. All questions concerning the construction, validity, and interpretation of this Note will be governed by and construed in accordance with the domestic laws of the State of California, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of California or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of California.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. **<u>Dispute Resolution</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) In any claim or dispute arising out of or relating to any performance required under this Agreement, or the interpretation, validity or enforceability hereof ("<u>Claim</u>"), the parties to a Claim shall use their best efforts to settle the Claim informally. To this effect, they shall consult and negotiate with each other in good faith and, recognizing their mutual interests, attempt to reach a just and equitable resolution satisfactory to the parties. If the Claim cannot be settled through negotiation within a period of seven (7) days, the parties agree to attempt in good faith to settle the Claim through mediation, administered by a mediator mutually agreeable to the parties, before resorting to arbitration. If they do not reach such resolution, or an agreed upon mediator cannot be identified, within a period of thirty (30) days, then, upon notice by either party to the other they shall commence arbitration as set forth below. A party failing or refusing to submit a claim to mediation shall not be entitled to an award of attorney's fees even if later they are determined to be the prevailing party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The parties agree to submit all Claims and any dispute related to this Agreement to binding arbitration before JAMS. The arbitration shall be held in accordance with the JAMS then-current Streamlined Arbitration Rules & Procedures (and no other JAMS rules), which currently are available at: https://www.jamsadr.com/rules-streamlined-arbitration. The arbitrator shall be either a retired judge, or an attorney who is experienced in commercial contracts and licensed to practice law in California, selected pursuant to the JAMS rules. The parties expressly agree that any arbitration shall be conducted in Orange County, California. Each party understands and agrees that by signing this Agreement, such party is waiving the right to a jury. The arbitrator shall apply California substantive law in the adjudication of all Claims. Notwithstanding the foregoing, any party to a Claim may apply to the Superior Courts located in Orange County for a provisional remedy, including, but not limited to, a temporary restraining order or a preliminary injunction. The application for or enforcement of any provisional remedy by a party shall not operate as a waiver of the agreement to submit a dispute to binding arbitration pursuant to this provision. After a demand for arbitration has been filed and served, the parties may engage in reasonable discovery in the form of requests for documents, interrogatories, requests for admission, and depositions. The arbitrator shall resolve any disputes concerning discovery. The arbitrator shall award costs and reasonable attorneys' fees to the prevailing party, as determined by the arbitrator, to the extent permitted by California law, unless the prevailing party failed or refused to first submit their claim to mediation in accordance with subpart(a) above. The arbitrator's decision shall be final and binding upon the parties. The arbitrator's decision shall include the arbitrator's findings of fact and conclusions of law and shall be issued in writing within thirty (30) days of the conclusion of the arbitration proceedings. The prevailing party may submit the arbitrator's decision to Superior Courts located in Orange County for an entry of judgment thereon. Any party's failure to pay their pro rata share of any arbitration fees and expenses shall not be grounds to delay the appointment of an arbitrator or to stay the arbitration. Further, any failure of a party to pay such fees and/or expenses within 21 days of their due date shall constitute a default by that party and entitle the non-defaulting party to the entry of a default judgment by the arbitrator against the defaulting party. Any default judgment awarded by an arbitrator shall be fully enforceable, and all defenses to entry, enforcement, or collection upon that default judgment are waived.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15. **<u>Savings Clause</u>**. Nothing contained in this Note shall be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum interest rate permitted by applicable law. In the event that the rate of interest required to be paid or other charges hereunder exceed the maximum interest permitted by such law, any payments in excess of such maximum shall be credited against amounts owed by Borrower to Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16. **<u>Cumulative Remedies</u>**. Each right, power, and remedy of the Lender as provided for in this Note, or now or hereafter existing at law or in equity or by statute or otherwise shall be cumulative and concurrent and shall be in addition to every other such right, power, or remedy, and the exercise or beginning of the exercise by the Borrower of any one or more of such rights, powers, or remedies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17. **<u>No Waiver</u>**. No failure or delay by the Lender in insisting upon the strict performance of any term, condition, or covenant of this Note or in exercising any right, power, or remedy consequent upon an Event of Default shall constitute a waiver of any such term, condition or covenant or of any such Event of Default, or preclude the Lender from exercising any such right, power, or remedy at any later time or times. By accepting payment after the due date of any amount payable under this Note, the Lender shall not be deemed to waive the right either to require prompt payments when due of all the amounts payable under the this Note, or to declare a default for failure to effect such prompt payment of any such other amount.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18. **<u>Counterparts</u>**. This Note may be executed in counterparts, each of which will be deemed an original, but all of which together will be deemed to be one and the same agreement. Counterparts may be delivered via facsimile, electronic mail (including PDF or any electronic signature including, without limitation, AdobeSign) or other transmission method, and any counterpart so delivered will be deemed to have been duly and validly delivered and be valid and effective for all purposes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19. **<u>Time is of the Essence</u>**. Time is of the essence with respect to all of Borrower's obligations and duties under this Note.

[*Intentionally Blank—Signature Page Follows*]

**IN WITNESS WHEREOF**, the parties hereto have caused this Note to be executed as of the date first written above:

**BORROWER**:

OTC Miramar, LLC

---

| | |
|:---|:---|
| By: | */s/ Norman Yousif* |

---

Name: Norman Yousif

Its: Manager

Address:

OTC Miramar LLC

15030 Ventura Blvd #169

Sherman Oaks, CA 91403

Attn: Norman Yousif

Email: normanyousif11@gmail.com

**LENDER**:

NMG San Diego, LLC

---

| | |
|:---|:---|
| By: | */s/ Stephen 'Trip' Hoffman* |

---

Name: Stephen 'Trip' Hoffman

Its: Manager

Address:

DEP Nevada, Inc.

6420 Sunset Corporate Drive

Las Vegas, NV 89120

Attn: Stephen Trip' Hoffman

Email: triphoffman@bodyandmind.com

Secured Promissory Note Signature Page

**<u>Exhibit A</u>**

**SECURITY AGREEMENT**

This security agreement (the "<u>Agreement</u>"), dated as of August 5, 2025 (the "<u>Effective Date</u>"), is made by and among OTC Miramar, LLC, a California limited liability company (the "<u>Grantor</u>"), in favor of NMG San Diego, LLC, a California limited liability company (the "<u>Secured Party</u>").

WHEREAS, on the date hereof, the Grantor has entered into that certain secured promissory note, (to which this Agreement is attached as Exhibit A) (the "**<u>Loan Agreement</u>**"), with the Secured Party, pursuant to which the Secured Party, subject to the terms and conditions contained therein, is making a $429,617.44 loan to the Grantor;

WHEREAS, the Loan Agreement is being executed in connection with that certain asset purchase agreement (the "<u>APA</u>") wherein the Grantor is purchasing certain assets from the Secured Party, as more definitively described therein; and

WHEREAS, under the terms of this Agreement, the Grantor desires to grant to the Secured Party a security interest in the Collateral, as defined herein, to secure any and all Secured Obligations, as defined herein.

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. DEFINITIONS. All capitalized terms used herein without definitions shall have the respective meanings set forth in the Loan Agreement. Unless otherwise defined herein, terms used herein that are defined in the Uniform Commercial Code as in effect from time to time in the State of California (the "<u>UCC</u>") shall have the meanings assigned to them in the UCC. However, if a term is defined in Article 9 of the UCC differently than in another Article of the UCC, the term has the meaning specified in Article 9.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. GRANT OF SECURITY INTEREST. For value received, the Grantor hereby grants to the Secured Party, to secure the payment and performance in full of all of the Secured Obligations (as defined in <u>Section 3</u> of this Agreement), a security interest in and pledges and assigns to the Secured Party the following properties, assets, and rights of the Grantor, whether the Grantor now has or hereafter acquires an ownership or other interest or power to transfer, and all proceeds and products thereof, and all books and records relating thereto (all of the same being hereinafter called the "<u>Collateral</u>"): (i) all Purchased Assets (as defined in the APA) wherever located, (ii) all personal and fixture property of every kind and nature including all goods (including inventory, equipment, and any accessions thereto) located on or at 7625 Carroll Road, San Diego, California 92121 (the "<u>Premise</u>") (such Collateral being the "<u>Retail Assets</u>"), (iii) money, deposit accounts, letters of credit, letter-of-credit rights (whether or not the letter of credit is evidenced by a writing), (iv) securities and all other investment property, and (v) other contracts rights or rights to the payment of money, insurance claims and proceeds, tort claims, and all general intangibles (including all payment intangibles).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. SECURED OBLIGATIONS. This Agreement secures the prompt and full performance and payment of all of the indebtedness, obligations, liabilities, and undertakings of the Grantor to the Secured Party, of any kind or description, individually or collectively, whether direct or indirect, joint or several, absolute or contingent, due or to become due, voluntary or involuntary, now existing or hereafter arising (including, all interest, fees (including attorneys' fees), costs, and expenses that the Grantor is hereby or otherwise required to pay and perform pursuant to the Loan Agreement, this Agreement, or any other Loan Document, by law or otherwise accruing before and after the filing of any petition in bankruptcy or the commencement of any insolvency, reorganization or like proceeding relating to the Grantor, whether or not a claim for post-petition interest, fees or expenses is allowed in such proceeding), irrespective of whether for the payment of money, under or in respect of the Loan Agreement, this Agreement, or any other Loan Document, including instruments or agreements executed and delivered pursuant thereto or in connection therewith (the "<u>Secured Obligations</u>").

Exhibit A: Security Agreement

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. CHANGES IN LOCATION OF COLLATERAL. The Grantor hereby agrees to notify the Secured Party, in writing or via electronic communication, within three (3) business days upon any change in the location of any Collateral and provide the Secured Party with the new location of such Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. CHANGES IN GRANTOR. The Grantor hereby agrees to notify the Secured Party, in writing or via electronic communication, at least three (3) business days before any of the following actions: (a) change in the location of the Grantor's place of business; (b) change in the Grantor's name; (c) change in the Grantor's type of organization; (d) change in the Grantor's jurisdiction of organization; and (e) change in the Grantor's corporate structure.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. TRANSFER OF COLLATERAL. The Grantor shall not sell, offer to sell, assign, lease, license, or otherwise transfer, or grant, create, permit, or suffer to exist any option, security interest, lien, or other encumbrance in, any part of the Collateral (except for sales or leases of inventory or licenses of general intangibles in the ordinary course of business), without prior written approval from the Secured Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. GRANTOR COVENANTS AND INSURANCE. The Grantor hereby grants to the Secured Party the right to enter the Grantor's property to inspect the Collateral at any reasonable time, provided that the Secured Party gives the Grantor notice within three (3) business days of any inspection, however in no case shall notice be required if the Secured Party enters the Grantor's property for the purposes of remedying a breach of this Agreement as provided in Section 10 of this Agreement. The Grantor agrees to: (a) maintain the Collateral in good order, repair, and condition at all times; (b) timely pay all taxes, judgments, levies, fees, or charges of any kind levied or assessed on the Collateral; (c) timely pay all rent or mortgage payments of any kind as applicable to any real property upon which any part of the Collateral is located; and (d) have and maintain at all times a hazard insurance policy on the Collateral underwritten by an insurance company, and in an amount, approved by the Secured Party, but in no way shall the amount of insurance be less than the replacement cost of the Collateral. The insurance procured in this Section shall contain a standard Lender's Loss Payable Clause in favor of the Secured Party, and provide that the Secured Party will receive at least fifteen (15) business days' notice of any cancellation of the policy. The Grantor hereby assigns to the Secured Party all rights to any proceeds of any insurance procured under this Section, and authorizes the Secured Party to receive such payments and execute any and all documents required to receive such payments. If the Grantor fails to provide for the insurance as set out in this Section, the Secured Party may procure the requisite insurance on the Collateral on its own behalf and charge the Grantor with any and all costs of such procurement.

Exhibit A: Security Agreement

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. PERFECTION OF SECURITY INTEREST. The Grantor agrees that at any time and from time to time, at the expense of the Grantor, the Grantor will promptly execute and deliver all further instruments and documents, obtain such agreements from third parties, and take all further action, that may be necessary or desirable, or that the Secured Party may request, in order to create and/or maintain the validity, perfection or priority of and protect any security interest granted or purported to be granted hereby or to enable the Secured Party to exercise and enforce its rights and remedies hereunder or under any other agreement with respect to any Collateral. The Grantor hereby authorizes the Secured Party to file or record any document necessary to perfect, continue, amend, or terminate its security interest in the Collateral, including, but not limited to, any financing statements, including amendments, authorized to be filed under the UCC, without signature of the Grantor where permitted by law, including the filing of a financing statement describing the Collateral as all assets now owned or hereafter acquired by the Grantor, or words of similar effect. The Grantor also hereby ratifies any previously filed documents or recordings regarding the Collateral, including but not limited to, any and all previously filed financing statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. REMEDIES. If an Event of Default shall have occurred and be continuing, the Secured Party may do any or all of the following: (a) declare all Secured Obligations immediately due and payable; (b) enter the Grantor's property where the Collateral is located and take possession of the Collateral without demand or legal process; (c) require the Grantor to assemble and make available the Collateral at a specific time and place designated by the Secured Party; (d) sell, lease, or otherwise dispose of the Collateral at any public or private sale in accordance with the law; and (e) enforce payment of the Secured Obligations and exercise any rights and remedies available to the Secured Party under law, including, but not limited to, those rights and remedies available to the Secured Party under Article 9 of the UCC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. SECURED PARTY RIGHTS. Any and all rights of the Secured Party provided by this Agreement are in addition to any and all rights available to the Secured Party by law, and shall be cumulative and may be exercised simultaneously. No delay, omission, or failure on the part of the Secured Party to exercise or enforce any of its rights or remedies, either granted under this Agreement or by law, shall constitute an estoppel or waiver of such right or remedy or any other right or remedy. Any and all rights of the Secured Party provided by this Agreement shall inure to the benefit of its successors and assigns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. SEVERABILITY AND MODIFICATION. If any of the provisions in this Agreement is determined to be invalid, illegal, or unenforceable, such determination shall not affect the validity, legality, or enforceability of the other provisions in this Agreement. No waiver, modification or amendment of, or any other change to, this Agreement will be effective unless done so in a separate writing signed by the Secured Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. NOTICES. Any notice or other communication required or permitted to be given under this Agreement, including, without limitation, notices under Section 4 and Section 5 of this Agreement, shall be given and shall become effective in accordance with the Loan Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. ENTIRE AGREEMENT. This Agreement (including all documents referred to herein) represents the entire agreement between the Grantor and the Secured Party, and supersedes all previous understandings and agreements between the Grantor and the Secured Party, whether oral or written, regarding the subject matter hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15. JURISDICTION. This Agreement will be interpreted and construed according to the laws of the State of California, including, but not limited to, the UCC, without regard to choice-of-law rules in any jurisdiction.

Exhibit A: Security Agreement

IN WITNESS WHEREOF, the undersigned Grantor and Secured Party have executed this Security Agreement as of the date first above written.

---

| | |
|:---|:---|
| **GRANTOR**<br>OTC Miramar, LLC, as Grantor | **GRANTOR**<br>OTC Miramar, LLC, as Grantor |
| By: | */s/ Norman Yousif* |
| Name: | Norman Yousif |
| Title: | Manager |

---

---

| | |
|:---|:---|
| **SECURED PARTY**<br>NMG San Diego, as Secured Party | **SECURED PARTY**<br>NMG San Diego, as Secured Party |
| By: | */s/ Stephen 'Trip' Hoffman* |
| Name: | Stephen 'Trip' Hoffman |
| Title: | Manager |

---

Exhibit A: Security Agreement

## Exhibit 99.1

**EXHIBIT 99.1**

![](bmmj_ex991img1.jpg)

**NEWS RELEASE – For Immediate Dissemination**

**Body and Mind Inc. Announces Agreement to Divest San Diego Dispensary**

**LAS VEGAS, NV and VANCOUVER, B.C., CANADA – August 11, 2025** – Body and Mind Inc. (CSE: BAMM, OTC Pink: BMMJ) (the "**Company**" or "**BaM**") is pleased to announce the Company's wholly owned subsidiary, DEP Nevada, Inc. ("**DEP**") has entered into an Asset Purchase Agreement with OTC Miramar, LLC (the "**Purchaser**"), whereby DEP, which owns 60% of NMG San Diego LLC ("**NMG SD**") agrees to sell all of assets (the "**Interests**") in NMG SD, which owns and operates the Body and Mind San Diego dispensary, to the Purchaser.

The total consideration to be paid by the Purchaser to DEP for the acquisition of the Interests is US$1.6 million in cash, of which US$100,000 has already been paid as a deposit. Additional details on the transaction can be found in the Company's current report on Form 8-K, anticipated to be filed on EDGAR within the prescribed filing period of four business days.

Please visit <u>www.bodyandmind.com</u> for more information.

Twitter: @bodyandmindBaM

**For further information, please contact:**

**Company Contact:**

Michael Mills

President and CEO

Tel: 800-361-6312

ir@bodyandmind.com

*Neither the Canadian Securities Exchange nor its Market Regulator (as that term is defined in the policies of the Canadian Securities Exchange) accepts responsibility for the adequacy or accuracy of this release.*

***Safe Harbor Statement***

*Except for the statements of historical fact contained herein, the information presented in this news release constitutes "forward-looking statements" as such term is used in applicable United States and Canadian laws. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. Any other statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "expects" or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans, "estimates" or "intends", or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved) are not statements of historical fact and should be viewed as "forward-looking statements". Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such risks and other factors include, among others, the actual results of activities, variations in the underlying assumptions associated with the estimation of activities, the availability of capital to fund programs and the resulting dilution caused by the raising of capital through the sale of shares, accidents, labor disputes and other risks. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements contained in this news release and in any document referred to in this news release.*

*Certain matters discussed in this news release and oral statements made from time to time by representatives of the Company may constitute forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. Forward-looking information is subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected. Many of these factors are beyond the Company's ability to control or predict. Important factors that may cause actual results to differ materially and that could impact the Company and the statements contained in this news release can be found in the Company's filings with the Securities and Exchange Commission. The Company assumes no obligation to update or supplement any forward-looking statements whether as a result of new information, future events or otherwise. This press release shall not constitute an offer to sell or the solicitation of an offer to buy our securities.*