Document:

mblc_ex102.htm

EXHIBIT 10.2
  
 ASSET PURCHASE AGREEMENT
  
 This ASSET PURCHASE AGREEMENT dated June 1, 2017 (this “Agreement”), is by and among: GENESIS FLOAT SPA, LLC, a Nevada limited liability company (the “Purchaser”); THC THERAPEUTICS, INC., a Nevada corporation, the sole member and parent company of the Purchaser (the “Parent”); URBAN OASIS FLOAT CENTER, LLC, a Nevada limited liability company (the “Seller”); and the members of the Seller, AMANDA ESCAMILLA, CARLOS ESCAMILLA, JR., and DANIEL WILLIAM
 JONES (each a “Member” and all, collectively, the “Members”).
  
 RECITALS
  
 WHEREAS, the Purchaser desires to purchase from the Seller and the Seller desires to sell to the Purchaser all of Seller’s rights, title and interest in and to the Assets (as hereinafter defined), all upon the terms and conditions set forth in this Agreement.
  
 NOW, THEREFORE, in consideration of the representations, warranties and covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
  
 ARTICLE I
 CERTAIN DEFINITIONS
  
 1.1 CERTAIN DEFINITIONS.
  
 (a) The following terms, when used in this Agreement, shall have the respective meanings ascribed to them below:
  
 “ACTION” means any claim, action, suit, inquiry, hearing, investigation or other proceeding.
  
 “AFFILIATE” means, with respect to a Person, any other Person that, directly or indirectly, through one or more intermediaries, Controls, is controlled by or is under common Control with, such Person. For purposes of this definition, “CONTROL” (including, with correlative meanings, the terms “Controlled by” and “under common Control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of stock, as trustee or executor, by Contract or credit arrangement or otherwise.
  
 “AGREEMENT” has the meaning set forth in the preamble hereto.
   	 
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 “ANCILLARY AGREEMENTS” means each of: (i) the Secured Promissory Note attached as Exhibit A hereto; (ii) the Certificate of Designation for the Parent’s Series B Preferred Stock attached as Exhibit B hereto; (iii) the Parent Warrants attached as Exhibit C hereto; and (iv) the Bill of Sale attached as Exhibit D hereto.
  
 “ASSETS” has the meaning set forth in Section 2.1.
  
 “BILL OF SALE” has the meaning set forth in Section 3.2(b).
  
 “CLAIM NOTICE” means written notification pursuant to Section 7.2(a) of a Third-Party Claim as to which indemnity under Section 7.1 is sought by an Indemnified Party, enclosing a copy of all papers served, if any, and specifying the nature of and basis for such Third-Party Claim and for the Indemnified Party’s claim against the Indemnifying Party under Section 7.1, together with the amount or, if not then reasonably ascertainable, the estimated amount, determined in good faith, of the Indemnified Party’s Losses in respect of such Third-Party Claim.
  
 “CLOSING” has the meaning set forth in Section 3.1. “CLOSING DATE” has the meaning set forth in Section 3.1.
  
 “CONTRACT” means any agreement, lease, debenture, note, bond, evidence of Indebtedness, mortgage, indenture, security agreement, option or other contract or commitment (whether written or oral).
  
 “DISPUTE NOTICE” means a written notice provided by any party against which indemnification is sought under this Agreement to the effect that such party disputes its indemnification obligation under this Agreement.
  
 “DISPUTE PERIOD” means the period ending thirty calendar days following receipt by an Indemnifying Party of either a Claim Notice or an Indemnity Notice.
  
 “GAAP” means United States generally accepted accounting principles as in effect from time to time, consistently applied throughout the specified period and all prior comparable periods.
  
 “GOVERNMENTAL ENTITY” means any government or political subdivision thereof, whether foreign or domestic, federal, state, provincial, county, local, municipal or regional, or any other governmental entity, any agency, authority, department, division or instrumentality of any such government, political subdivision or other governmental entity, any court, arbitral tribunal or arbitrator, and any nongovernmental regulating body, to the extent that the rules, regulations or orders of such body have the force of Law.
  
  	 
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 “INDEBTEDNESS” means, as to any Person: (i) all obligations, whether or not contingent, of such Person for borrowed money (including, without limitation, reimbursement and all other obligations with respect to surety bonds, letters of credit and bankers’ acceptances, whether or not matured), (ii) all obligations of such Person evidenced by notes, bonds, debentures, capitalized leases or similar instruments, (iii) all obligations of such Person representing the balance of deferred purchase price of property or services, (iv) all interest rate and currency swaps, caps, collars and similar agreements or hedging devices under which payments are obligated to be made by such Person, whether periodically or upon the happening of a contingency, (v) all indebtedness created or arising under any conditional sale or other title retention Contract with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such Contract in the event of default are limited to repossession or sale of such property), (vi) all indebtedness secured by any Lien on any property or asset owned or held by such Person regardless of whether the indebtedness secured thereby shall have been assumed by such Person or is non-recourse to the credit of such Person, and (vii) all indebtedness referred to in clauses (i) through (vi) above of any other Person that is guaranteed, directly or indirectly, by such Person.
  
 “INDEMNIFIED PARTY” means any Person claiming indemnification under any provision of Article VII.
  
 “INDEMNIFYING PARTY” means any Person against whom a claim for indemnification is being asserted under any provision of Article VII.
  
 “INDEMNITY NOTICE” means written notification pursuant to Section 7.2(b) of a claim for indemnification under Article VII by an Indemnified Party, specifying the nature of and basis for such claim, together with the amount or, if not then reasonably ascertainable, the estimated amount, determined in good faith, of the Indemnified Party’s Losses in respect of such claim.
  
 “INTELLECTUAL PROPERTY” means: all (i) discoveries and inventions (whether patentable or unpatentable and whether or not reduced to practice), all improvements thereto, and all United States, international, and foreign patents, patent applications (either filed or in preparation for filing), patent disclosures and statutory invention registrations, including all reissuances, divisions, continuations, continuations in part, extensions and reexaminations thereof, all rights therein provided by international treaties or conventions, (ii) trademarks, service marks, trade dress, logos, trade names, corporate names, and other source identifiers (whether or not registered) including all common law rights, all registrations and applications for registration (either filed or in preparation for filing) thereof, all rights therein provided by international treaties or conventions, and all renewals of any of the foregoing, (iii) all copyrightable works and copyrights (whether or not registered), all registrations and applications for registration thereof, all rights therein provided by international treaties or conventions, and all data and documentation relating thereto, (iv) confidential and proprietary information, trade secrets, know-how (whether patentable or nonpatentable and whether or not reduced to practice), processes and techniques, research and development information including patent and/or copyright searches conducted by Seller and/or any third party, ideas, technical data, designs, drawings and specifications, (v) software, (vi) coded values, formats, data and historical or current databases, whether or not copyrightable, (vii) domain names, Internet websites or identities used or held for use by the Seller, (viii) other proprietary rights relating to any of the foregoing (including without limitation any and all associated goodwill and remedies against infringements thereof and rights of protection of an interest therein under the laws of all jurisdictions), and (ix) copies and tangible embodiments of any of the foregoing.
   	 
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 “KNOWLEDGE” means the actual or constructive knowledge after due inquiry of any Member or any current officer or manager of the Seller.
  
 “LAWS” means all laws, statutes, rules, regulations, ordinances and other pronouncements having the effect of law of the United States, any foreign country or any domestic or foreign state, county, city or other political subdivision or of any Governmental Entity.
  
 “LIABILITY” means all Indebtedness, obligations and other Liabilities of a Person, whether absolute, accrued, contingent, fixed or otherwise, and whether due or to become due (including for Taxes).
  
 “LIEN” means any mortgage, pledge, assessment, security interest, lease, lien, adverse claim, levy, charge or other encumbrance of any kind, whether voluntary or involuntary (including any conditional sale Contract, title retention Contract or Contract committing to grant any of the foregoing).
  
 “LOSS” means any and all damages, fines, fees, penalties, deficiencies, losses and expenses (including, without limitation, all interest, court costs, fees and expenses of attorneys, accountants and other experts or other expenses of litigation or other proceedings or of any claim, default or assessment).
  
 “MATERIAL ADVERSE EFFECT” means any material adverse effect on the condition, operations, business, prospects or results of sales of the Seller; PROVIDED, HOWEVER, that any adverse effect arising out of or resulting from the entering into of this Agreement or the consummation of the transactions contemplated hereby, shall be excluded in determining whether a Material Adverse Effect has occurred.
  
 “ORDER” means any writ, judgment, decree, injunction or similar order of any Governmental Entity (in each case whether preliminary or final).
   	 
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 “PERSON” means any individual, partnership, limited liability company, corporation, association, joint stock company, trust, estate, joint venture, unincorporated organization, Governmental Entity or any other entity of any kind.
  
 “PRIOR SECURED NOTE” means the Promissory Note issued by the Seller on May 13, 2016 to Go Float Yourself, LLC in the original principal amount of $50,000 (the “Secured Note”), a true and correct copy of which is attached hereto as Exhibit E.
  
 “PURCHASE PRICE” has the meaning set forth in Section 2.1. “PURCHASER” has the meaning set forth in the preamble hereto.
  
 “RESOLUTION PERIOD” means the period ending thirty days following receipt by an Indemnified Party of a Dispute Notice.
  
 “SELLER” has the meaning set forth in the preamble hereto.
  
 “SOFTWARE” means all computer software, including source code, object code, machine-readable code, HTML or other markup language, program listings, comments, user interfaces, menus, buttons and icons, web applications and all files, data, manuals, design notes, research and development documents, and other items and documentation related thereto or associated therewith.
  
 “SOLVENT” means, with respect to the Seller, that (a) the Seller is able to pay its Liabilities, as they mature in the normal course of business, and (b) the fair value of the assets of the Seller is greater than the total amount of Liabilities of the Seller.
  
 “TAXES” means all federal, state, local and foreign income, profits, franchise, license, social security, transfer, registration, estimated, gross receipts, environmental, customs duty, capital stock, severance, stamp, payroll, sales, employment, unemployment, disability, use, property, withholding, excise, production, value added, occupancy and other taxes, duties or assessments of any nature whatsoever together with all interest, penalties, fines and additions to tax imposed with respect to such amounts and any interest in respect of such penalties and additions to tax.
  
 “THIRD-PARTY CLAIM” has the meaning set forth in Section 7.2(a).
  
  “TRADEMARK ASSIGNMENT” has the meaning set forth in Section 3.2(c).
  
  “TRANSFER TAXES” means all sales, use, value added, excise, registration, documentary, stamps, transfer, real property transfer, recording, gains, stock transfer and other similar Taxes and fees.
   	 
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 (b) For purposes of this Agreement, except as otherwise expressly provided herein or unless the context otherwise requires: (i) words using the singular or plural number also include the plural or singular number, respectively, and the use of any gender herein shall be deemed to include the other genders; (ii) references herein to “Articles”, “Sections”, “subsections” and other subdivisions without reference to a document are to the specified Articles, Sections, subsections and other subdivisions of this Agreement; (iii) a reference to a subsection without further reference to a Section is a reference to such subsection as contained in the same Section in which the reference appears, and this rule shall also apply to other subdivisions within a Section or subsection; (iv) the words “herein”, “hereof”, “hereunder”, “hereby” and other words of similar import refer to this Agreement as a whole and not to any particular provision; and (v) the words “include”, “includes” and “including” are deemed to be followed by the phrase “without limitation”. All accounting terms used herein and not expressly defined herein shall have the meanings given to them under GAAP.
  
 1.2 MEMBERSHIP PURCHASE AGREEMENT CANCELLED AND REPLACED.
  
 The Membership Purchase Agreement previously executed by the Seller, the Members, and the Parent, dated May 12, 2017, is hereby cancelled and rescinded by the agreement of all parties thereto, and shall be deemed to be of no legal effect. In place and instead of the transaction described thereunder, the parties enter into this Asset Purchase Agreement effective as of May 12, 2017. The Secured Promissory Note, shares of Series B Preferred Stock, and Parent Warrants issued by the Parent, and the cash paid by the Parent, under the terms of such prior agreement shall be accepted by the Seller and the Members as payment of the Purchase Price under this Asset Purchase Agreement as described in Section 2.1, below.
  
 ARTICLE II
 PURCHASE AND SALE OF ASSETS
  
 2.1 PURCHASE AND SALE OF ASSETS.
  
 (a) At the Closing, as hereinafter defined, Purchaser and the Parent shall pay Seller and the Members for the Assets (the “PURCHASE PRICE”) as follows:
  
 i. Payment of Cash in the total amount of $20,000, to be paid to the Members as follows:
  
 Amanda Escamilla and Carlos Escamilla, Jr. (jointly) – $10,200 Daniel William Jones – $9,800
  
 The Members acknowledge their prior receipt of such cash payments.
   	 
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 ii. Issuance of a Secured Promissory Note in the principal amount of $60,000, to be issued by the Parent and payable jointly to the Members (the “Parent Note”), in the form attached hereto as Exhibit A. The Members acknowledge the Parent’s issuance and their receipt of the Secured Promissory Note on May 12, 2017.
  
 iii. Issuance of One hundred twenty thousand (120,000) shares of the Parent’s Series B Preferred Stock, stated value $1.00 per share (the “Parent Preferred Shares”), to be issued as follows:
  
 Amanda Escamilla and Carlos Escamilla, Jr. (jointly) – 61,200 shares Daniel William Jones – 58,800 shares
  
 The Members acknowledge the Parent’s prior issuance of the Parent Preferred Shares to them on May 12, 2017.
  
 The rights, preferences, privileges, qualifications, limitations and restrictions of the Parent Preferred Shares shall be as set forth in the Certificate of Designation included as Exhibit B hereto. The Certificate of Designation has been filed with the Nevada Secretary of State. The Seller and the Members acknowledge and agree that such Certificate of Designation may be later amended by the Board of Directors of the Parent to increase the number of authorized Series B Preferred Shares, with such additional authorized preferred shares to be issued by the Parent in settlement of certain secured debt encumbering the Assets.
  
 iv. Issuance of Warrants to purchase twenty-five thousand (25,000) shares of the Parent’s common stock at an exercise price of $2.00 per share, exercisable for a period of three (3) years from the date of issue (the “Parent Warrants”). The Parent Warrants shall be issued to the Members, in the form attached as Exhibit C hereto, as follows:
  
 Amanda Escamilla and Carlos Escamilla, Jr. (jointly) – 12,750 warrants Daniel William Jones – 12,250 warrants
  
 The Members acknowledge the Parent’s prior issuance of the Parent Warrants to them on May 12, 2017.
   	 
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 (b) In consideration of the payment by the Purchaser and the Parent of the PURCHASE PRICE, the Seller hereby agrees to sell, convey, transfer, assign, grant and deliver to the Purchaser, and the Purchaser hereby agrees to purchase, acquire and accept from the Seller, at the Closing, all of the Seller’s right, title and interest in and to all of the Assets, free and clear of all Liens, with the sole exception of the Prior Secured Note. The term “ASSETS” means the following assets of Seller only: four float pods and related equipment, Seller’s client list, and general intangibles relating to such client list. For clarity, Seller shall retain and is not selling to Purchaser any other assets of Seller related in any way to the ownership and operation of the “Go Float Yourself” floatation therapy center located at 4500 East Sunset Road in Henderson, Nevada (the “Business”), including (a) the inventory on hand, furniture, fixtures, equipment (other than that equipment included in the Assets being sold to Purchaser) and other tangible assets related to the Business; (b) all trade names, common law trademarks, domain names, websites, ecommerce sites, Twitter, Facebook and all other social media sites of any nature relating to the Business; 
  
 (c) all rights under any contracts to which Seller is bound; and (d) all general intangibles relating or associated with the operation of the Business; and all goodwill generated by, and associated with, the Business (other than general intangibles related to the client list included in the Assets being sold to Purchaser). 
  
 2.2 ASSUMPTION OF LIABILITIES. For greater certainty, the Purchaser and the Parent assume no Liabilities relating to the Assets, the Members, or the Seller or the Seller’s business (including Tax Liabilities).
  
 ARTICLE III
 THE CLOSING
  
 3.1 CLOSING. The closing of the transactions contemplated hereby (the “CLOSING”) shall take place upon the Parties’ execution of this Agreement, or on such other date as the parties hereto may mutually determine in writing (the “CLOSING DATE”).
  
 3.2 DELIVERY OF ITEMS BY THE SELLER. The Seller shall deliver to the Purchaser at the Closing the items listed below:
  
 (a) a Bill of Sale and General Assignment for the Assets, duly executed by the Seller, in the form attached hereto as EXHIBIT D (the “BILL OF SALE”); and
  
 (b) such other documents and instruments as the Purchaser may reasonably request.
   	 
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 3.3 DELIVERY OF ITEMS BY THE PURCHASER. The Purchaser shall deliver to the Seller at the Closing the items listed below:
  
 (a) Cash in the amount of $20,000 to be paid as set forth above, prior payment of which is hereby acknowledged by the Seller and the Members;
  
 (b) The Parent Note, the prior issuance and delivery of which is hereby acknowledged by the Seller and the Members;
  
 (c) The Parent Preferred Shares, the prior issuance and delivery of which is hereby acknowledged by the Seller and the Members;
  
 (d) The Parent Warrants, the prior issuance and delivery of which is hereby acknowledged by the Seller and the Members; and
  
 (b) such other documents and instruments as the Seller and the Members may reasonably request.
  
 ARTICLE IV
 REPRESENTATIONS AND WARRANTIES OF THE SELLER AND THE MEMBERS
  
 As an inducement to the Purchaser and Parent to enter into this Agreement, the Seller and the Members represent and warrant to the Purchaser and the Parent as follows:
  
 4.1 AUTHORIZATION. The Seller has full power and authority to execute and deliver this Agreement and the Ancillary Agreements, as applicable, and to perform its obligations hereunder and thereunder. This Agreement and the Ancillary Agreements have been duly executed and delivered by the Seller and, assuming the due authorization, execution and delivery hereto and thereof by the Purchaser and the Parent, constitute the valid and legally binding obligations of the Seller enforceable in accordance with their respective terms. Seller is a limited liability company organized under the laws of the State of Nevada, in good standing, and has obtained all consents and other approvals necessary under Nevada law, its Articles of Organization, and its Operating Agreement necessary for the execution, delivery and performance of this Agreement and the Ancillary Agreements.
  
 4.2 BROKERS’ FEES. No agent, broker, finder, investment banker, financial advisor or other similar Person will be entitled to any fee, commission or other compensation in connection with any of the transactions contemplated by this Agreement on the basis of any act or statement made or alleged to have been made by the Seller, any of its Affiliates, or any investment banker, financial advisor, attorney, accountant or other Person retained by or acting for or on behalf of the Seller or any such Affiliate.
  
 4.3 NONCONTRAVENTION.
  
  	 
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 (a) Neither the execution, delivery or performance of this Agreement or the Ancillary Agreements, as applicable, nor the consummation of the transactions contemplated hereby or thereby will, with or without the giving of notice or the lapse of time or both, (i) violate any Law or Order or other restriction of any Governmental Entity to which the Seller may be subject or (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of any right or obligation under, create in any party the right to accelerate, terminate, modify, cancel, require any notice under or result in the creation of a Lien on any of the Assets under, any Contract to which the Seller is a party or by which it is bound and to which any of its Assets is subject.
  
 (b) The execution and delivery of this Agreement and the Ancillary Agreements, as applicable, by the Seller do not, and the performance of this Agreement and the Ancillary Agreements by the Seller and the consummation of the transactions contemplated hereby and thereby will not, require any consent, approval, authorization or permit of, or filing with or notification to, any Governmental Entity.
  
 4.4 LITIGATION. There is no pending or, to the Knowledge of the Seller, threatened Action against or affecting the Assets. Neither the Seller nor the Assets are subject to any Order restraining, enjoining or otherwise prohibiting or making illegal any action by the Seller, this Agreement or any of the transactions contemplated hereby.
  
 4.5 CONTRACTS. There are no executory Contracts (whether license agreements, development agreements or otherwise), to which any of the Assets are bound or subject (other than this Agreement).
  
 4.6 INTELLECTUAL PROPERTY.
  
 (a) The Seller is the sole and exclusive owner of, and has good and marketable title to, all of the Intellectual Property in and to the Assets, free and clear of all Liens, with the sole exception of the Prior Secured Note. The Seller has sole and exclusive right to develop, perform, use, create derivative works of, operate, reproduce, market, sell, license, display, distribute, publish and transmit the Intellectual Property in and to the Assets. Upon the Closing, the Purchaser will have sole and exclusive right, title and interest in and to the Intellectual Property in and to the Assets, such that the Purchaser shall thereafter have sole and exclusive rights to perform, reproduce, create derivative works of, develop, use, operate, market, sell, license, display, publish, transmit and distribute the Assets, free of all encumbrances. The Seller has taken reasonable measures to protect the proprietary nature of the Intellectual Property in and to the Assets and to maintain in confidence the trade secrets and confidential information that it owns or uses. With the sole exception of the holder of the Prior Secured Note, no other Person has any rights to any of Intellectual Property in and to the Assets and, to the knowledge of the Seller, no other Person is infringing, violating or misappropriating any of the Intellectual Property in and to the Assets.
   	 
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 (c) With respect to the Seller’s Intellectual Property contributed to the Assets, such Intellectual Property does not infringe upon, violate or constitute a misappropriation of any Intellectual Property or other right of any other Person. In addition, to Seller’s knowledge, none of the activities or business presently conducted by the Seller with respect to the Assets infringes or violates, or constitutes a misappropriation of, any Intellectual Property or other right of any other Person. Neither the Seller nor any Affiliate of the Seller has received any written complaint, claim or notice alleging any such infringement, violation or misappropriation. Further, neither the Seller nor any Affiliate of the Seller has disclosed to any Person, any product formula, or any portion or aspect of any product formula, which is part of the Assets, including the Intellectual Property.
  
 4.7 COMPLIANCE WITH LAWS. The Seller is not in violation of, has not violated and, to the Knowledge of the Seller, is not under investigation with respect to any possible violation of, and has not been threatened to be charged with any violation of, any Order of Law applicable to the Assets.
  
 4.8 TITLE TO ASSETS. Except as to Intellectual Property (which warranty is contained in Section 4.6): (i) the Seller has good and marketable title to all of the Assets free and clear of all Liens with the sole exception of the Prior Secured Note; (ii) this Agreement and the instruments of transfer to be executed and delivered pursuant hereto will effectively vest in the Purchaser good and marketable title to all of the Assets free and clear of all Liens with the sole exception of the Prior Secured Note; (iii) and no Person other than the Seller has any ownership interest in any of the Assets. Following the Closing, the Purchaser and the Parent shall arrange for satisfaction of the Prior Secured Note on such terms as they deems advisable.
  
 4.9 SOLVENCY. The Seller is and, after consummation of the transactions contemplated by this Agreement, will be Solvent.
  
 4.10 DISCLOSURE. The representations and warranties on the part of the Seller and the Members contained in this Agreement, and the statements contained in any of the Schedules or in any certificates furnished to the Purchaser or the Parent pursuant to any provisions of this Agreement, including pursuant to Article VI hereof, do not contain any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements herein or therein, in light of the circumstances under which they were made, not misleading.
  
 4.11 ACQUISITION ENTIRELY FOR OWN ACCOUNT. The Parent Preferred Shares and the Parent Warrants proposed to be acquired by the Members hereunder will be acquired for investment for their own account, and not with a view to the resale or distribution of any part thereof, and the Members have no present intention of selling or otherwise distributing the Parent Preferred Shares or the Parent Warrants, except in compliance with applicable securities laws.
   	 
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 4.12 AVAILABLE INFORMATION. The Members have such knowledge and experience in financial and business matters that they are capable of evaluating the merits and risks of an investment in the Parent.
  
 4.13 NON-REGISTRATION. The Members understand that the Parent Preferred Shares and the Parent Warrants have not been registered under the Securities Act of 1933, as amended (the “Securities Act”) and, if issued in accordance with the provisions of this Agreement, will be issued by reason of a specific exemption from the registration provisions of the Securities Act that depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Members’ representations as expressed herein. The non-registration shall have no prejudice with respect to any rights, interests, benefits and entitlements attached to the Parent Preferred Shares and the Parent Warrants in accordance with the Parent charter documents or the laws of its jurisdiction of incorporation.
  
 4.14 RESTRICTED SECURITIES. The Members understand that the Parent Preferred Shares and the Parent Warrants are characterized as “restricted securities” under the Securities Act inasmuch as this Agreement contemplates that, if acquired by the Members pursuant hereto, the Parent Preferred Shares and the Parent Warrants would be acquired in a transaction not involving a public offering. The Members further acknowledge that if the Parent Preferred Shares and the Parent Warrants are issued to the Members in accordance with the provisions of this Agreement, the Parent Preferred Shares and the Parent Warrants may not be resold without registration under the Securities Act or the existence of an exemption therefrom. The Members represent that they are familiar with Rule 144 promulgated under the Securities Act, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act.
  
 4.15 LEGENDS. It is understood that the Parent Preferred Shares and the Parent Warrants will bear the following legend or another legend that is similar to the following:
  
 THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES.
   	 
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 and any legend required by the “blue sky” laws of any state to the extent such laws are applicable to the securities represented by the certificate so legended.
  
 4.16 ADDITIONAL REPRESENTATIONS AND WARRANTIES OF THE MEMBERS
  
 (a) The Members acknowledge that the acquisition of the Parent Preferred Shares and the Parent Warrants involves a high degree of risk in that the Parent has only recently commenced its current business operations and may require substantial additional funds;
  
 (b) The Members recognize that an investment in the Parent is highly speculative and only investors who can afford the loss of their entire investment should consider investing in the Parent, the Parent Preferred Shares, and the Parent Warrants;
  
 (c) The Members have such knowledge and experience in finance, securities, investments, including investment in unregistered securities, and other business matters so as to be able to protect their interests in connection with this transaction;
  
 (d) The Members acknowledge that the Parent Preferred Shares and the Parent Warrants, and the shares of Parent common stock underlying such securities, are subject to significant restrictions on transfer as imposed by state and federal securities laws, including but not limited to a minimum holding period of at least one (1) year;
  
 (e) The Members are not aware of any advertisement of the Parent Preferred Shares and the Parent Warrants or any general solicitation in connection with any offering of the Parent Preferred Shares and the Parent Warrants;
  
 (f) The Members acknowledge review of the Parent’s Articles of Incorporation and the bylaws of the Parent, together with the opportunity and the Purchaser’s encouragement to seek the advice and consultation of independent investment, legal and tax counsel; and
  
 (g) The Members acknowledge and agree that the Parent has previously made available to the Members the opportunity to ask questions of and to receive answers from representatives of the Parent concerning the Parent, the Parent Preferred Shares and the Parent Warrants, as well as to conduct whatever due diligence the Members, in their discretion, deems advisable. The Members are relying solely upon the information obtained during their due diligence investigation in making a decision to invest in the Parent, the Parent Preferred Shares and the Parent Warrants.
   	 
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 ARTICLE V
 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER AND THE PARENT
  
 As an inducement to the Seller and the Members to enter into this Agreement, the Purchaser and the Parent represent and warrant to the Seller and the Members as follows:
  
 5.1 AUTHORIZATION. The Purchaser and the Parent have full power and authority to execute and deliver this Agreement and the Ancillary Agreements, as applicable, and to perform its obligations hereunder and thereunder. This Agreement and the Ancillary Agreements have been duly executed and delivered by the Purchaser and the Parent and, assuming the due authorization, execution and delivery hereof and thereof by the Seller and the Members, constitute the valid and legally binding obligations of the Purchaser and the Parent enforceable in accordance with their respective terms. Purchaser is a limited liability company organized under the laws of the State of Nevada, in good standing. Parent is a corporation organized under the laws of the State of Nevada, in good standing. Purchaser and Parent have obtained all consents and other approvals necessary under Nevada law and their respective governing documents necessary for the execution, delivery and performance of this Agreement and the Ancillary Agreements.
  
 5.2 NONCONTRAVENTION.
  
 (a) Neither the execution, delivery or performance of this Agreement or the Ancillary Agreements, as applicable, nor the consummation of the transactions contemplated hereby or thereby will, with or without the giving of notice or the lapse of time or both, (i) violate any Law or Order or other restriction of any Governmental Entity to which the Purchaser or Parent may be subject.
  
 (b) The execution and delivery of this Agreement and the Ancillary Agreements, as applicable, by the Purchaser and the Parent does not, and the performance of this Agreement and the Ancillary Agreements by the Purchaser and the Parent and the consummation of the transactions contemplated hereby and thereby will not, require any consent, approval, authorization or permit of, or filing with or notification to, any Governmental Entity.
  
 5.3 BROKERS’ FEES. No agent, broker, finder, investment banker, financial advisor or other similar Person will be entitled to any fee, commission or other compensation in connection with any of the transactions contemplated by this Agreement on the basis of any act or statement made or alleged to have been made by the Purchaser and the Parent, any of their Affiliates, or any investment banker, financial advisor, attorney, accountant or other Person retained by or acting for or on behalf of the Purchaser or the Parent or any such Affiliate.
   	 
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 5.4 PARENT PREFERRED SHARES AND PARENT WARRANTS. Upon issue, the Parent Preferred Shares will be duly and validly issued, fully paid and non-assessable preferred stock in the capital of the Parent. Upon conversion or exercise in accordance with the terms thereof, the shares of common stock in the Parent to be issued to the Members upon conversion or exercise of the Parent Preferred Shares and the Parent Warrants shall be validly issued, fully paid, and non-assessable common stock in the capital of the Parent.
  
 ARTICLE VI
 CONDITIONS TO OBLIGATION TO CLOSE
  
 6.1 CONDITIONS TO CLOSING BY THE PURCHASER AND THE PARENT. The obligation of the Purchaser and the Parent to effect the transactions contemplated hereby is subject to the satisfaction or waiver by the Purchaser and the Parent of the following conditions:
  
 (a) The representations and warranties of the Seller and the Members set forth in this Agreement shall be true and correct in all material respects, with respect to representations and warranties not qualified by materiality, or in all respects, with respect to representations and warranties qualified by materiality, as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date.
  
 (b) The Seller shall have performed in all material respects the covenants required to be performed by it under this Agreement at or prior to the Closing Date.
  
 (c) The Seller shall have executed and delivered each of the Ancillary Agreements, as applicable.
  
 (d) There shall be no effective or pending Law or Order that would prohibit the Closing, and the Seller shall have obtained all necessary approvals of any Governmental Entities in connection with the transactions contemplated hereby and by the Ancillary Agreements.
  
 (e) The Seller shall have delivered each of the items described in Section 3.2.
  
 6.2 CONDITIONS TO CLOSING BY THE SELLER AND THE MEMBERS. The obligation of the Seller and the Members to effect the transactions contemplated hereby is subject to the satisfaction or waiver by the Seller and the Members of the following conditions:
  
 (a) The representations and warranties of the Purchaser and the Parent set forth in this Agreement shall be true and correct in all material respects, with respect to representations and warranties not qualified by materiality, and in all respects, with respect to representations and warranties qualified by materiality, in each case as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date.
   	 
	15
	 
 
	 

  
 (b) The Purchaser and the Parent shall have performed in all material respects the covenants required to be performed by them under this Agreement at or prior to the Closing Date.
  
 (c) The Purchaser and the Parent shall have executed and delivered each of the Ancillary Agreements, as applicable.
  
 (d) There shall be no effective or pending Law or Order that would prohibit the Closing, and the Purchaser and the Parent shall have obtained all necessary approvals of any Governmental Entities in connection with the transactions contemplated hereby and by the Ancillary Agreements.
  
 (e) The Purchaser and the Parent shall have delivered each of the items described in Section 3.3.
  
 ARTICLE VII
 INDEMNIFICATION
  
 7.1 INDEMNIFICATION OBLIGATIONS.
  
 (a) Purchaser and the Parent shall indemnify the Members, and the Seller and its officers, directors, employees, agents and Affiliates (each, an “INDEMNIFIED PARTY”) in respect of, and hold each harmless from and against, any and all Losses suffered, incurred or sustained by it or to which it becomes subject, resulting from, arising out of or relating to (i) any misrepresentation or breach of representation or warranty on the part of the Purchaser or Parent contained in this Agreement, (ii) any nonfulfillment of or failure to perform any covenant or agreement on the part of the Purchaser or Parent contained in this Agreement, and (iii) any Liabilities related to the Assets or the Business and arising from or related to facts, circumstances, or events occurring subsequent to the Closing.
  
 (b) Seller and the Members shall indemnify the Purchaser, the Parent and their officers, directors, employees, agents and Affiliates (each, an “INDEMNIFIED PARTY”) in respect of, and hold each harmless from and against, any and all Losses suffered, incurred or sustained by them or to which they becomes subject, resulting from, arising out of or relating to (i) any misrepresentation or breach of representation or warranty on the part of the Seller or the Members contained in this Agreement, (ii) any nonfulfillment of or failure to perform any covenant or agreement on the part of the Seller or the Members contained in this Agreement, and (iii) any Liabilities related to the Assets or the Business and arising from or related to facts, circumstances, or events occurring prior to the Closing.
   	 
	16
	 
 
	 

  
 (c) For purposes of indemnification under this Article VII only, all qualifications as to materiality and/or Material Adverse Effect contained in any representation or warranty shall be disregarded.
  
 7.2 METHOD OF ASSERTING CLAIMS. Claims for indemnification by an Indemnified Party under Section 7.1 will be asserted and resolved as follows:
  
 (a) THIRD-PARTY CLAIMS. In the event that any claim or demand in respect of which an Indemnified Party might seek indemnification under Section 7.1 in respect of, arising out of or involving a claim or demand made by any Person not a party to this Agreement against an Indemnified Party (a “THIRD-PARTY CLAIM”), the Indemnified Party shall deliver a Claim Notice to the either the Purchaser and Parent or the Seller and the Members, as appropriate, as the “Indemnifying Party” within sixty (60) days after receipt by such Indemnified Party of written notice of the Third Party Claim. If the Indemnified Party fails to provide the Claim Notice within such time period, the Indemnifying Party will not be obligated to indemnify the Indemnified Party with respect to such Third-Party Claim to the extent that the Indemnifying Party’s ability to defend is actually prejudiced by such failure of the Indemnified Party. The Indemnifying Party will notify the Indemnified Party as soon as practicable within the Dispute Period whether the Indemnifying Party accepts or disputes its liability to the Indemnified Party under Section 7.1 and whether the Indemnifying Party desires, at its sole cost and expense, to defend the Indemnified Party against such Third-Party Claim.
  
 (i) DEFENSE BY INDEMNIFYING PARTY. If the Indemnifying Party notifies the Indemnified Party within the Dispute Period that the Indemnifying Party desires to defend the Indemnified Party with respect to the Third-Party Claim pursuant to this Section 7.2, then the Indemnifying Party will have the right to defend, with counsel reasonably satisfactory to the Indemnified Party, at the sole cost and expense of the Indemnifying Party, such Third-Party Claim by all appropriate proceedings, which proceedings will be vigorously and diligently prosecuted or defended by the Indemnifying Party to a final conclusion or will be settled at the discretion of the Indemnifying Party (but only with the consent of the Indemnified Party in its sole discretion in the case of any settlement that provides for any relief other than the payment of monetary damages or that provides for the payment of monetary damages as to which the Indemnified Party will not be indemnified in full pursuant to Section 7.1). Subject to the immediately preceding sentence, the Indemnifying Party will have full control of such defense and proceedings, including any compromise or settlement thereof; PROVIDED, HOWEVER, that the Indemnified Party may, at the cost and expense of the Indemnifying Party, at any time prior to the Indemnifying Party’s delivery of notice to assume the defense of such Third Party Claim, file any motion, answer or other pleadings or take any other action that the Indemnified Party reasonably believes to be necessary or appropriate to protect its interests. The Indemnifying Party shall not be liable to the Indemnified Party for legal expenses incurred by the Indemnified Party in connection with the defense of such Third Party Claim after the Indemnifying Party’s delivery of notice to assume the defense. In addition, if requested by the Indemnifying Party, the Indemnified Party will, at the sole cost and expense of the Indemnifying Party, provide reasonable cooperation to the Indemnifying Party in contesting any Third- Party Claim that the Indemnifying Party elects to contest.
   	 
	17
	 
 
	 

  
 (ii) DEFENSE BY INDEMNIFIED PARTY. If the Indemnifying Party fails to notify the Indemnified Party within the Dispute Period that the Indemnifying Party desires to assume the defense of the Third-Party Claim, or if the Indemnifying Party fails to give any notice whatsoever within the Dispute Period, then the Indemnified Party will have the right to defend, at the sole cost and expense of the Indemnifying Party, the Third-Party Claim by all appropriate proceedings, which proceedings will be prosecuted by the Indemnified Party in good faith or will be settled at the discretion of the Indemnified Party. The Indemnified Party will have full control of such defense and proceedings, including any compromise or settlement thereof; PROVIDED, HOWEVER, that if requested by the Indemnified Party, the Indemnifying Party will, at the sole cost and expense of the Indemnifying Party, provide reasonable cooperation to the Indemnified Party and its counsel in contesting any Third-Party Claim which the Indemnified Party is contesting. Notwithstanding the foregoing provisions of this Section 7.2, if the Indemnifying Party has notified the Indemnified Party within the Dispute Period that the Indemnifying Party disputes its liability hereunder to the Indemnified Party with respect to such Third-Party Claim and if such dispute is resolved in all respects in favor of the Indemnifying Party in the manner provided in clause (iii) below, the Indemnifying Party will not be required to bear the costs and expenses of the Indemnified Party’s defense pursuant to this Section 7.2 or of the Indemnifying Party’s participation therein at the Indemnified Party’s request. The Indemnifying Party may participate in, but not control, any defense or settlement controlled by the Indemnified Party pursuant to this Section 7.2, and the Indemnifying Party will bear its own costs and expenses with respect to such participation.
  
 (iii) ACCEPTANCE BY INDEMNIFYING PARTY. If the Indemnifying Party notifies the Indemnified Party that it accepts its indemnification liability to the Indemnified Party with respect to the Third-Party Claim under Section 7.1, the Loss identified in the Claim Notice, as finally determined, will be conclusively deemed a liability of the Indemnifying Party under Section 7.1 and the Indemnifying Party shall pay the amount of such Loss to the Indemnified Party on demand. If the Indemnifying Party timely disputes its liability with respect to such Third-Party Claim or fails to notify the Indemnified Party within the Dispute Period whether the Indemnifying Party disputes its liability to the Indemnified Party with respect to such Third-Party Claim, the Indemnifying Party and the Indemnified Party will proceed in good faith to negotiate a resolution of such dispute, and if not resolved through negotiations with the Resolution Period, such dispute shall be resolved by litigation in a court of competent jurisdiction.
  
 (b) NON-THIRD PARTY CLAIMS. In the event any Indemnified Party should have a claim under Section 7.1 against any Indemnifying Party that does not involve a Third-Party Claim, the Indemnified Party shall deliver an Indemnity Notice with reasonable promptness to the Indemnifying Party. The failure or delay by any Indemnified Party to give the Indemnity Notice shall not impair such party’s rights hereunder except to the extent that the Indemnifying Party is actually prejudiced by such failure or delay. If the Indemnifying Party notifies the Indemnified Party that it does not dispute the claim described in such Indemnity Notice within the Dispute Period, the Loss indemnified in the Indemnity Notice will be conclusively deemed a Liability of the Indemnified Party under Section 7.1 and the Indemnifying Party shall pay the amount of such Loss to the Indemnified Party on demand. If the Indemnifying Party has timely disputed its liability with respect to such claim or fails to notify the Indemnified Party within the Dispute Period whether the Indemnifying Party disputes the claim described in such Indemnity Notice, the Indemnifying Party and the Indemnified Party will proceed in good faith to negotiate a resolution of such dispute and, if not resolved through negotiations within the Resolution Period, such dispute shall be resolved by litigation in a court of competent jurisdiction.
   	 
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 ARTICLE VIII
 POST-CLOSING COVENANTS
  
 8.1 TRANSFER TAXES. Notwithstanding anything herein to the contrary, Seller shall be liable for and shall pay any Transfer Taxes or other similar tax imposed in connection with the transfer of the Assets pursuant to this Agreement. The party responsible under applicable Law for remitting any such tax shall pay and remit such tax on a timely basis and, if such party is the Purchaser, the Purchaser shall notify the Seller of the amount of such tax, and the Seller shall promptly pay to the Purchaser the amount of such tax.
  
 8.2 FURTHER ACTION. From and after the Closing each of the parties hereto shall execute and deliver such documents and take such further actions as may reasonably be required to carry out the provisions of this Agreement and the Ancillary Agreements and to give effect to the transactions contemplated hereby and thereby, including to give the Purchaser effective ownership and control of the Assets.
  
 ARTICLE IX
 MISCELLANEOUS
  
 9.1 SURVIVAL. Notwithstanding any right of the Purchaser (whether or not exercised) to investigate the affairs of the Seller or any right of any party (whether or not exercised) to investigate the accuracy of the representations and warranties of the other party contained in this Agreement or the waiver of any condition to Closing, each of the parties hereto has the right to rely fully upon the representations, warranties, covenants and agreements of the other contained in this Agreement. The representations, warranties, covenants and agreements of the parties hereto contained in this Agreement and any certificate or other document provided hereunder or thereunder will survive the Closing.
  
 9.2 NO THIRD-PARTY BENEFICIARIES. The terms and provisions of this Agreement are intended solely for the benefit of the parties hereto and their respective successors and permitted assigns, and it is not the intention of the parties to confer third-party beneficiary rights, and this Agreement does not confer any such rights, upon any other Person, except for any Person entitled to indemnity under Article VII.
   	 
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 9.3 ENTIRE AGREEMENT. This Agreement (including the Exhibits and the Schedules hereto) constitute the entire agreement between the parties hereto with respect to the subject matter hereof and thereof and supersede any prior understandings, agreements or representations by or between the parties hereto, written or oral, with respect to such subject matter.
  
 9.4 SUCCESSION AND ASSIGNMENT. This Agreement shall be binding upon and inure to the benefit of the parties named herein and their respective successors and permitted assigns. No party hereto may assign either this Agreement or any of its rights, interests or obligations hereunder without the prior written approval of the other parties hereto.
  
 9.5 DRAFTING. The parties have participated jointly in the negotiation and drafting of this Agreement and, in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.
  
 9.6 NOTICES. All notices, requests and other communications hereunder must be in writing and will be deemed to have been duly given only if delivered personally against written receipt or by facsimile transmission or mailed (by registered or certified mail, postage prepaid, return receipt requested) or delivered by reputable overnight courier, fee prepaid, to the parties hereto at the following addresses or facsimile numbers:
  
 	  
	 IF TO PURCHASER OR
	 Genesis Float Spa, LLC

	  
	 PARENT, TO:
	 THC Therapeutics, Inc.

	  
	  
	 11700 W Charleston Blvd #73

	  
	  
	 Las Vegas, NV 89135

	  
	  
	 Attention: Brandon Romanek

	  
	   
	    

	  
	 With a copy to:
	 Laxague Law, Inc.
 Attn: Joe Laxague, Esq.
 1 East Liberty, Suite 600
 Reno, NV 899501
 (775) 996-3283 (fax)

	  
	     
	  

	  
	 IF TO SELLER OR THE
	 Urban Oasis Float Center, LLC

	  
	 MEMBERS, TO:
	 Amanda Escamilla and Carlos Escamilla, Jr.

	  
	  
	 Daniel William Jones
 _______________________
  
 _______________________

	  
		 Attention: _______________

  
  	 
	20
	 
 
	 

  
 Any party hereto may change the address to which notices, requests, demands, claims and other communications hereunder are to be delivered by giving the other parties hereto notice in the manner set forth herein.
  
 9.7 GOVERNING LAW. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Nevada, without giving effect to any choice of law or conflict of law provision or rule that would cause the application of the Laws of any jurisdiction other than the State of Nevada.
  
 9.8 [omitted].
  
 9.9 AMENDMENTS AND WAIVERS. No amendment of any provision of this Agreement shall be valid unless such amendment is in writing and signed by each of the parties hereto. No waiver by any party hereto of any default, misrepresentation or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence. No waiver shall be valid unless such waiver is in writing and signed by the party against whom such waiver is sought to be enforced.
  
 9.10 SEVERABILITY. If any provision of this Agreement is held to be illegal, invalid or unenforceable under any present or future Law, and if the rights or obligations of any party hereto under this Agreement will not be materially and adversely affected thereby, (a) such provision will be fully severable, (b) this Agreement will be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part hereof, (c) the remaining provisions of this Agreement will remain in full force and effect and will not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom and (d) in lieu of such illegal, invalid or unenforceable provision, there will be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar in terms of such illegal, invalid or unenforceable provision as may be possible.
  
 9.11 EXPENSES. Except as otherwise expressly set forth herein or therein, each of the parties hereto will bear its own costs and expenses (including legal fees and expenses) incurred in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby or thereby, whether or not the transactions contemplated hereby or thereby are consummated.
  
 9.12 INCORPORATION OF EXHIBITS AND SCHEDULES. The Exhibits, Annexes and Schedules identified in this Agreement are incorporated herein by reference and made a part hereof. Unless otherwise specified, no information contained in any particular numbered Schedule shall be deemed to be contained in any other numbered Schedule unless explicitly included therein (by cross reference or otherwise).
  
 9.13 SPECIFIC PERFORMANCE. The parties hereto agree that irreparable damage would occur in the event that any provision of this Agreement was not performed in accordance with the terms hereof and that the parties shall be entitled to specific performance of the terms hereof in addition to any other remedy available to them at law or equity.
  
 9.14 HEADINGS. The descriptive headings contained in this Agreement are included for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement.
  
 9.15 COUNTERPARTS. This Agreement may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.
  
 Remainder of page intentionally left blank; signature page follows
  
  	 
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 IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first written above.
  
 The Parent:
   
  	THC THERAPEUTICS, INC.	
	  		
	By:	/s/ Brandon Romanek	
	 Name:
	Brandon Romanek	
	Title:	President and CEO	
	 		
	 The Purchaser:
	
	  
		
	 GENESIS FLOAT SPA, LLC
	
	   
		
	 By: 
	/s/ Brandon Romanek	
	 Name:
	 Brandon Romanek
	
	 Title:
	 Manager
	
	   
		
	 The Seller:
	
	   
		
	 URBAN OAISIS FLOAT CENTER, LLC
	
	     
		
	 By: 
	 /s/ Carlos Escamilla, Jr.
	
	  
	  
	  

	 Print
 Name:
	 Carlos Escamilla, Jr.
	
	   
		
	 Title: 
		
	   
		
	 The Members:
	
	    
		
	  
	  

	 Amanda Escamilla
	
	    
		
	 /s/ Carlos Escamilla, Jr.
	  

	 Carlos Escamilla, Jr.
	
	   
		
	 /s/ Daniel William Jones
	  

	 Daniel William Jones
	

  
  	 
	22
	 
 
	 

  
 EXHIBIT A
  
 Parent Note
  
  
  
 	 
	23
	 
 
	 

  
 EXHIBIT B
  
 Certificate of Designation
  
  
  
  
  
  
  
  
 	 
	24
	 
 
	 

  
 EXHIBIT C
  
 Parent Warrant
  
  
  
  
  
  
  
 	 
	25
	 
 
	 

  
 EXHIBIT D
  
 Bill of Sale
  
  
  
  
  
  
  
  
  
  
  
  
  
 	 
	26
	 
 
	 

  
 EXHIBIT E
  
 Prior Secured Note
  
  
  
  
  
  
  
  
  
  
  
  
  	27mblc_ex103.htm

EXHIBIT 10.3
  
 THIS INSTRUMENT AND ANY SECURITIES ISSUABLE PURSUANT HERETO HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR AN EXEMPTION THEREFROM.
  
 BURSTIQ ANALYTICS CORPORATION
  
 SAFE
 (Simple Agreement for Future Equity)
  
 THIS CERTIFIES THAT in exchange for consideration provided by Millennium Blockchain, Inc., a Nevada corporation (the “Investor”) equal to or in the amount of $2,500,000 USD (the “Purchase Amount”) on or about March 31, 2018 (the “Execution Date”), BurstIQ Analytics Corporation, a Colorado corporation (the “Company”), hereby issues to the Investor the right (the “Right”) to certain shares of the Company’s capital stock, subject to the terms set forth below.
  
 1. Events
  
 (a) Equity Financing. If there is an Equity Financing before the expiration or termination of this instrument, the Company will automatically issue to the Investor a number of shares of Preferred Stock sold in the Equity Financing equal to the Purchase Amount divided by the Price Per Share of the Preferred Stock.
  
 In connection with the issuance of such shares of Preferred Stock to the Investor pursuant to this Section 1(a):
  
 (i) The Investor will execute and deliver to the Company all transaction documents related to the Equity Financing; provided, that such documents are the same documents to be entered into with the purchasers of Preferred Stock, and provided further, that such documents have customary exceptions to any drag-along applicable to the Investor, including, without limitation, limited representations and warranties and limited liability and indemnification obligations on the part of the Investor; and
  
 (ii) The Investor and the Company will execute a Pro Rata Rights Agreement, unless the Investor is already included in such rights in the transaction documents related to the Equity Financing.
  
 (b) Liquidity Event. If there is a Liquidity Event before the expiration or termination of this instrument, the Investor will, at its option, either (i) receive a cash payment equal to the Purchase Amount (subject to the following paragraph) or (ii) automatically receive from the Company a number of shares of Common Stock equal to the Purchase Amount divided by the fair market value of the Common Stock at the time of the Liquidity Event (determined by reference to the purchase price payable in connection with such Liquidity Event) (the “Liquidity Price”), if the Investor fails to select the cash option.
  
 In connection with Section (b)(i), the Purchase Amount will be due and payable by the Company to the Investor immediately prior to, or concurrent with, the consummation of the Liquidity Event. If there are not enough funds to pay the Investor and holders of other SAFEs (collectively, the “Cash-Out Investors”) in full, then all of the Company’s available funds will be distributed with equal priority and pro rata among the Cash-Out Investors in proportion to their Purchase Amounts, and the Cash-Out Investors will automatically receive the number of shares of Common Stock equal to the remaining unpaid Purchase Amount divided by the Liquidity Price. In connection with a Change of Control intended to qualify as a tax-free reorganization, the Company may reduce, pro rata, the Purchase Amounts payable to the Cash-Out Investors by the amount determined by its board of directors in good faith to be advisable for such Change of Control to qualify as a tax-free reorganization for U.S. federal income tax purposes, and in such case, the Cash-Out Investors will automatically receive the number of shares of Common Stock equal to the remaining unpaid Purchase Amount divided by the Liquidity Price.
  
  	 
	1
	 
 
	 

  
 (c) Dissolution Event. If there is a Dissolution Event before this instrument expires or terminates, the Company will pay an amount equal to the Purchase Amount, due and payable to the Investor immediately prior to, or concurrent with, the consummation of the Dissolution Event. The Purchase Amount will be paid prior and in preference to any Distribution of any of the assets of the Company to holders of outstanding Capital Stock by reason of their ownership thereof. If immediately prior to the consummation of the Dissolution Event, the assets of the Company legally available for distribution to the Investor and all holders of all other SAFEs (the “Dissolving Investors”), as determined in good faith by the Company’s board of directors, are insufficient to permit the payment to the Dissolving Investors of their respective Purchase Amounts, then the entire assets of the Company legally available for distribution will be distributed with equal priority and pro rata among the Dissolving Investors in proportion to the Purchase Amounts they would otherwise be entitled to receive pursuant to this Section 1(c).
  
 (d) Termination. This instrument will expire and terminate (without relieving the Company of any obligations arising from a prior breach of or non-compliance with this instrument) upon either (i) the issuance of stock to the Investor pursuant to Section 1(a) or Section 1(b)(ii); or (ii) the payment, or setting aside for payment, of amounts due the Investor pursuant to Section 1(b)(i) or Section 1(c).
  
 2. Definitions
  
 “Capital Stock” means the capital stock of the Company, including, without limitation, the “Common Stock” and the “Preferred Stock.”
  
 “Change of Control” means (i) a transaction or series of related transactions in which any “person” or “group” (within the meaning of Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), becomes the “beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended), directly or indirectly, of more than 50% of the outstanding voting securities of the Company having the right to vote for the election of members of the Company’s board of directors, (ii) any reorganization, merger or consolidation of the Company, other than a transaction or series of related transactions in which the holders of the voting securities of the Company outstanding immediately prior to such transaction or series of related transactions retain, immediately after such transaction or series of related transactions, at least a majority of the total voting power represented by the outstanding voting securities of the Company or such other surviving or resulting entity or (iii) a sale, lease or other disposition of all or substantially all of the assets of the Company.
  
 “Distribution” means the transfer to holders of Capital Stock by reason of their ownership thereof of cash or other property without consideration whether by way of dividend or otherwise, other than dividends on Common Stock payable in Common Stock, or the purchase or redemption of Capital Stock by the Company or its subsidiaries for cash or property other than: (i) repurchases of Common Stock held by employees, officers, directors or consultants of the Company or its subsidiaries pursuant to an agreement providing, as applicable, a right of first refusal or a right to repurchase shares upon termination of such service provider’s employment or services; or (ii) repurchases of Capital Stock in connection with the settlement of disputes with any stockholder.
  
  	 
	2
	 
 
	 

  
 “Dissolution Event” means (i) a voluntary termination of operations, (ii) a general assignment for the benefit of the Company’s creditors or (iii) any other liquidation, dissolution or winding up of the Company (excluding a Liquidity Event), whether voluntary or involuntary.
  
 “Equity Financing” means a bona fide transaction or series of transactions with the principal purpose of raising capital, pursuant to which the Company issues and sells shares of Preferred Stock at a fixed pre-money valuation with an aggregate sales price of not less than $250,000 (excluding all Subsequent Convertible Securities).
  
 “Initial Public Offering” means the closing of the Company’s first firm commitment underwritten initial public offering of Common Stock pursuant to a registration statement filed under the Securities Act.
  
 “Liquidity Event” means a Change of Control or an Initial Public Offering.
  
 “Price Per Share” means six dollars and fifty cents, represented in US Dollars ($6.50 USD).
  
 “Pro Rata Rights Agreement means a written agreement between the Company and the Investor (and holders of other SAFEs, as appropriate) giving the Investor a right to purchase its pro rata share of private placements of securities by the Company occurring after the Equity Financing, subject to customary exceptions. Pro rata for purposes of the Pro Rata Rights Agreement will be calculated based on the ratio of (1) the number of shares of Capital Stock owned by the Investor immediately prior to the issuance of the securities to (2) the total number of shares of outstanding Capital Stock on a fully diluted basis, calculated as of immediately prior to the issuance of the securities.
  
 “SAFE” means an instrument containing a future right to shares of Capital Stock, similar in form and content to this instrument, purchased by investors for the purpose of funding the Company’s business operations.
  
 “Subsequent Convertible Securities” means convertible securities that the Company may issue after the issuance of this instrument with the principal purpose of raising capital, including but not limited to, other SAFEs, convertible debt instruments and other convertible securities. Converting Securities excludes: (i) options issued pursuant to any equity incentive or similar plan of the Company; (ii) convertible securities issued or issuable to (A) banks, equipment lessors, financial institutions or other persons engaged in the business of making loans pursuant to a debt financing or commercial leasing or (B) suppliers or third party service providers in connection with the provision of goods or services pursuant to transactions; and (iii) convertible securities issued or issuable in connection with sponsored research, collaboration, technology license, development, OEM, marketing or other similar agreements or strategic partnerships.
  
 3. “MFN” Amendment Provision. If the Company issues any Subsequent Convertible Securities prior to termination of this instrument, the Company will promptly provide the Investor with written notice thereof, together with a copy of all documentation relating to such Subsequent Convertible Securities and, upon written request of the Investor, any additional information related to such Subsequent Convertible Securities as may be reasonably requested by the Investor. In the event the Investor determines that the terms of the Subsequent Convertible Securities are preferable to the terms of this instrument, the Investor will notify the Company in writing. Promptly after receipt of such written notice from the Investor, the Company agrees to amend and restate this instrument to be identical to the instrument(s) evidencing the Subsequent Convertible Securities.
  
 4. Company Representations
  
 (a) The Company is a corporation duly organized, validly existing and in good standing under the laws of the state of its incorporation, and has the power and authority to own, lease and operate its properties and carry on its business as now conducted.
  
  	 
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 (b) The execution, delivery and performance by the Company of this instrument is within the power of the Company and, other than with respect to the actions to be taken when equity is to be issued to the Investor, has been duly authorized by all necessary actions on the part of the Company. This instrument constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as limited by bankruptcy, insolvency or other laws of general application relating to or affecting the enforcement of creditors’ rights generally and general principles of equity. To the knowledge of the Company, it is not in violation of (i) its current certificate of incorporation or bylaws, (ii) any material statute, rule or regulation applicable to the Company or (iii) any material indenture or contract to which the Company is a party or by which it is bound, where, in each case, such violation or default, individually, or together with all such violations or defaults, could reasonably be expected to have a material adverse effect on the Company.
  
 (c) The performance and consummation of the transactions contemplated by this instrument do not and will not: (i) violate any material judgment, statute, rule or regulation applicable to the Company; (ii) result in the acceleration of any material indenture or contract to which the Company is a party or by which it is bound; or (iii) result in the creation or imposition of any lien upon any property, asset or revenue of the Company or the suspension, forfeiture, or nonrenewal of any material permit, license or authorization applicable to the Company, its business or operations.
  
 (d) No consents or approvals are required in connection with the performance of this instrument, other than: (i) the Company’s corporate approvals; (ii) any qualifications or filings under applicable securities laws; and (iii) necessary corporate approvals for the authorization of Capital Stock issuable pursuant to Section 1.
  
 (e) To its knowledge, the Company owns or possesses (or can obtain on commercially reasonable terms) sufficient legal rights to all patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses, information, processes and other intellectual property rights necessary for its business as now conducted and as currently proposed to be conducted, without any conflict with, or infringement of the rights of, others.
  
  	  
	(1)	Company realizes that (i) the purchase of the Investor Securities is a long-term investment; (ii) the holder of the Investor Securities must bear the economic risk of investment for an indefinite period of time because the Investor Securities have not been registered under the Securities Act of 1933, as amended (the “Securities Act”) or under the securities laws of any state; and (iii) the transferability of the Investor Securities are restricted, and a restrictive legend will be placed on any instrument or certificate representing the Investor Securities, substantially to the following effect:
	  
	  
	  

	  
	  
	 THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”). THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF A CURRENT AND EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT WITH RESPECT TO SUCH SECURITIES, OR AN OPINION SATISFACTORY TO THE ISSUER AND ITS COUNSEL TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT.

  
  	 
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	(2)	The Company represents and warrants that the Company comes within one of the categories of “accredited investor” as defined in Rule 501 of Regulation D promulgated under the Securities Act or that it has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the prospective investment in the Investor Securitiess. The Company agrees to furnish any additional information that the Investor deems necessary in order to verify the Company’s representation hereunder.

  
 5. Investor Representations
  
 (a) The Investor has full legal capacity, power and authority to execute and deliver this instrument and to perform its obligations hereunder. This instrument constitutes valid and binding obligation of the Investor, enforceable in accordance with its terms, except as limited by bankruptcy, insolvency or other laws of general application relating to or affecting the enforcement of creditors’ rights generally and general principles of equity.
  
 (b) The Investor has been advised that this instrument and the underlying securities have not been registered under the Securities Act, or any state securities laws and, therefore, cannot be resold unless they are registered under the Securities Act and applicable state securities laws or unless an exemption from such registration requirements is available. The Investor is purchasing this instrument and the securities to be acquired by the Investor hereunder for its own account for investment, not as a nominee or agent, and not with a view to, or for resale in connection with, the distribution thereof, and the Investor has no present intention of selling, granting any participation in, or otherwise distributing the same. The Investor has such knowledge and experience in financial and business matters that the Investor is capable of evaluating the merits and risks of such investment, is able to incur a complete loss of such investment without impairing the Investor’s financial condition and is able to bear the economic risk of such investment for an indefinite period of time.
  
 6. Procedures for Purchase of the Right and Payment of Purchase Amount.
  
 (a) Within five (5) business days after the Execution Date, Investor shall pay the Purchase Amount to Company by issuing to Company 2,500,000 shares (“Investor Securities”) of Investor’s common stock at a price per share equal to $1.00 USD per Investor Security.
  
 (b) Such Investor Securities will be conveyed, assigned, transferred, and delivered to Company free and clear of any mortgage, pledge, lien, encumbrance or other security interest.
  
 (c) In the event of a payment by Company to Investor pursuant to Section 1(b)(i) or Section 1(c), the parties agree that Investor Securities may serve as an instrument of payment (in whole or part) thereunder and that Company, in its sole discretion, shall determine whether any such payment shall comprise or include Investor Securities.
  
 7. Miscellaneous
  
 (a) Any provision of this instrument may be amended, waived or modified only upon the written consent of the Company and the Investor.
  
 (b) Any notice required or permitted by this instrument will be deemed sufficient when delivered personally or by overnight courier or sent by email to the relevant address listed on the signature page, or 48 hours after being deposited in the U.S. mail as certified or registered mail with postage prepaid, addressed to the party to be notified at such party’s address listed on the signature page, as subsequently modified by written notice.
  
  	 
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 (c) The Investor is not entitled, as a holder of this instrument, to vote or receive dividends or be deemed the holder of Capital Stock for any purpose, nor will anything contained herein be construed to confer on the Investor, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action or to receive notice of meetings, or to receive subscription rights or otherwise until shares have been issued upon the terms described herein.
  
 (d) Neither this instrument nor the rights contained herein may be assigned, by operation of law or otherwise, by either party without the prior written consent of the other; provided, however, that this instrument and/or the rights contained herein may be assigned without the Company’s consent by the Investor to any other entity who directly or indirectly, controls, is controlled by or is under common control with the Investor, including, without limitation, any general partner, managing member, officer or director of the Investor, or any venture capital fund now or hereafter existing which is controlled by one or more general partners or managing members of, or shares the same management company with, the Investor; and provided, further, that the Company may assign this instrument in whole, without the consent of the Investor, in connection with a reincorporation to change the Company’s domicile.
  
 (e) In the event any one or more of the provisions of this instrument is for any reason held to be invalid, illegal or unenforceable, in whole or in part or in any respect, or in the event that any one or more of the provisions of this instrument operate or would prospectively operate to invalidate this instrument, then and in any such event, such provision(s) only will be deemed null and void and will not affect any other provision of this instrument and the remaining provisions of this instrument will remain operative and in full force and effect and will not be affected, prejudiced, or disturbed thereby.
  
 (f) All rights and obligations hereunder will be governed by the laws of the State of Colorado, without regard to the conflicts of law provisions of such jurisdiction.
  
 (g) Each of the Company and the Investor agree to treat this instrument as a forward contract for U.S. federal, state and local income tax purposes, and will not take any position on any tax return, report, statement or other tax document that is inconsistent with such treatment, unless otherwise required by a change in law occurring after the date hereof, a closing agreement with an applicable tax authority or a final non-appealable judgment of a court of competent jurisdiction.
  
 (h) The Investor shall, and shall cause its affiliates to, execute and deliver such additional documents, instruments, conveyances and assurances and take such further actions as may be reasonably requested by Company to carry out the provisions of this instrument and give effect to the transactions contemplated by this instrument, including, without limitation, to enable the Company or the transactions contemplated by this instrument to comply with applicable laws.
  
 (i) The Company shall not be liable or responsible to the Investor, nor be deemed to have defaulted under or breached this instrument, for any failure or delay in fulfilling or performing any term of this instrument, including without limitation, completing an Equity Financing event, when and to the extent such failure or delay is caused by or results from acts beyond Company’s reasonable control, including, without limitation: (a) acts of God; (b) flood, fire, earthquake or explosion; (c) war, invasion, hostilities (whether war is declared or not), terrorist threats or acts, or other civil unrest; (d) Law; or (e) action by any Governmental Authority.
  
 (Signature page follows)
  
  	 
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 IN WITNESS WHEREOF, the undersigned have caused this instrument to be duly executed and delivered.
  
  	 BURSTIQ ANALYTICS CORPORATION 
	  
	 MILLENNIUM BLOCKCHAIN, INC.
	  

	  
	  
	  
	  
	  
	  

	 By: 
	 
	  
	  
 By: 
	 
	  

	  
	 Frank J. Ricotta Jr. 
	  
	  
	 Brandon Romanek
	  

	  
	 Chief Executive Officer 
	  
	  
	 Chief Executive Officer
	  

	  
	  
	  
	  
	  
	  

	 Address:
	 5790 Regal View Road 
 Colorado Springs, CO 80919 
	  
	 Address: 
	 11700 W. Charleston Blvd #73 
 Las Vegas, NV 89135
	  

	  
	  
	  
	  
	  
	  

	 Email:
	 frank.ricotta@burstiq.com 
	  
	 Email:
	 brandon@mblockchain.io
	  

	  
	  
	  
	  
	  
	  

	 Date:
	 3/31/2018 
	  
	 Date:
	 3/31/2018 
	  

  
  
  	 7

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