Document:

EXHIBIT
10.2

 

SECURITIES
PURCHASE AGREEMENT

This
SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of April 19, 2017, by and between COATES INTERNATIONAL,
LTD., a Delaware corporation, with its address at 2100 Highway 34, Wall Township, New Jersey 07719 (the “Company”),
and POWER UP LENDING GROUP LTD., a Virginia corporation, with its address at 111 Great Neck Road, Suite 216, Great Neck,
NY 11021 (the “Buyer”).

 

WHEREAS:

 

A.           The Company and the Buyer are executing and delivering this Agreement in reliance upon the exemption from securities registration
afforded by the rules and regulations as promulgated by the United States Securities and Exchange Commission (the “SEC”)
under the Securities Act of 1933, as amended (the “1933 Act”); and

 

B.            Buyer desires to purchase and the Company desires to issue and sell, upon the terms and conditions set forth in this Agreement
a convertible note of the Company, in the form attached hereto as Exhibit A, in the aggregate principal amount of $43,000.00 (together
with any note(s) issued in replacement thereof or as a dividend thereon or otherwise with respect thereto in accordance with the
terms thereof, the “Note”), convertible into shares of common stock, $0.0001 par value per share, of the Company (the
“Common Stock”), upon the terms and subject to the limitations and conditions set forth in such Note.

 

NOW
THEREFORE, the Company and the Buyer severally (and not jointly) hereby agree as follows:

 

1.            Purchase and Sale of Note.

 

a.             Purchase of Note. On the Closing Date (as defined below), the Company shall issue and sell to the Buyer and the Buyer agrees
to purchase from the Company such principal amount of Note as is set forth immediately below the Buyer’s name on the signature
pages hereto.

 

b.             Form of Payment. On the Closing Date (as defined below), (i) the Buyer shall pay the purchase price for the Note to be
issued and sold to it at the Closing (as defined below) (the “Purchase Price”) by wire transfer of immediately available
funds to the Company, in accordance with the Company’s written wiring instructions, against delivery of the Note in the
principal amount equal to the Purchase Price as is set forth immediately below the Buyer’s name on the signature pages hereto,
and (ii) the Company shall deliver such duly executed Note on behalf of the Company, to the Buyer, against delivery of such
Purchase Price. 

 

c.             Closing Date. Subject to the satisfaction (or written waiver) of the conditions thereto set forth in Section 6 and Section
7 below, the date and time of the issuance and sale of the Note pursuant to this Agreement (the “Closing Date”) shall
be 12:00 noon, Eastern Standard Time on or about April 21, 2017, or such other mutually agreed upon time. The closing of the transactions
contemplated by this Agreement (the “Closing”) shall occur on the Closing Date at such location as may be agreed to
by the parties.

 

2.            Buyer’s Representations and Warranties. The Buyer represents and warrants to the Company that:

 

a.             Investment Purpose. As of the date hereof, the Buyer is purchasing the Note and the shares of Common Stock issuable upon
conversion of or otherwise pursuant to the Note (such shares of Common Stock being collectively referred to herein as the “Conversion
Shares” and, collectively with the Note, the “Securities”) for its own account and not with a present view towards
the public sale or distribution thereof, except pursuant to sales registered or exempted from registration under the 1933 Act.

 

b.             Accredited Investor Status. The Buyer is an “accredited investor” as that term is defined in Rule 501(a) of
Regulation D (an “Accredited Investor”).

 

     

     

    

 

c.             Reliance on Exemptions. The Buyer understands that the Securities are being offered and sold to it in reliance upon specific
exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying
upon the truth and accuracy of, and the Buyer’s compliance with, the representations, warranties, agreements, acknowledgments
and understandings of the Buyer set forth herein in order to determine the availability of such exemptions and the eligibility
of the Buyer to acquire the Securities.

 

d.             Information. The Company has not disclosed to the Buyer any material nonpublic information and will not disclose such information
unless such information is disclosed to the public prior to or promptly following such disclosure to the Buyer.

 

e.             Legends. The Buyer understands that the Note and, until such time as the Conversion Shares have been registered under the
1933 Act; or may be sold pursuant to an applicable exemption from registration, the Conversion Shares may bear a restrictive legend
in substantially the following form:

 

"THE
SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR UNDER ANY STATE SECURITIES LAWS, AND MAY NOT BE PLEDGED, SOLD, ASSIGNED, HYPOTHECATED OR OTHERWISE TRANSFERRED
UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES
LAWS OR (2) THE ISSUER OF SUCH SECURITIES RECEIVES AN OPINION OF COUNSEL TO THE HOLDER OF SUCH SECURITIES, WHICH COUNSEL AND OPINION
ARE REASONABLY ACCEPTABLE TO THE ISSUER’S TRANSFER AGENT, THAT SUCH SECURITIES MAY BE PLEDGED, SOLD, ASSIGNED, HYPOTHECATED
OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS."

 

    	 	2	 

     

    

 

The
legend set forth above shall be removed and the Company shall issue a certificate without such legend to the holder of any Security
upon which it is stamped, if, unless otherwise required by applicable state securities laws, (a) such Security is registered for
sale under an effective registration statement filed under the 1933 Act or otherwise may be sold pursuant to an exemption from
registration without any restriction as to the number of securities as of a particular date that can then be immediately sold,
or (b) such holder provides the Company with an opinion of counsel, in form, substance and scope customary for opinions of counsel
in comparable transactions, to the effect that a public sale or transfer of such Security may be made without registration under
the 1933 Act, which opinion shall be accepted by the Company so that the sale or transfer is effected. The Buyer agrees to sell
all Securities, including those represented by a certificate(s) from which the legend has been removed, in compliance with applicable
prospectus delivery requirements, if any. In the event that the Company does not accept the opinion of counsel provided by the
Buyer with respect to the transfer of Securities pursuant to an exemption from registration, such as Rule 144, at the Deadline,
it will be considered an Event of Default pursuant to Section 3.2 of the Note.

 

f.              Authorization; Enforcement. This Agreement has been duly and validly authorized. This Agreement has been duly executed
and delivered on behalf of the Buyer, and this Agreement constitutes a valid and binding agreement of the Buyer enforceable in
accordance with its terms.

 

3.            Representations and Warranties of the Company. The Company represents and warrants to the Buyer that:

 

a.             Organization
and Qualification. The Company and each of its Subsidiaries (as defined below), if any, is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction in which it is incorporated, with full power and
authority (corporate and other) to own, lease, use and operate its properties and to carry on its business as and where
now owned, leased, used, operated and conducted. “Subsidiaries” means any corporation or other organization,
whether incorporated or unincorporated, in which the Company owns, directly or indirectly, any equity or other ownership
interest.

 

b.             Authorization; Enforcement. (i) The Company has all requisite corporate power and authority to enter into and perform this
Agreement, the Note and to consummate the transactions contemplated hereby and thereby and to issue the Securities, in accordance
with the terms hereof and thereof, (ii) the execution and delivery of this Agreement, the Note by the Company and the consummation
by it of the transactions contemplated hereby and thereby (including without limitation, the issuance of the Note and the issuance
and reservation for issuance of the Conversion Shares issuable upon conversion or exercise thereof) have been duly authorized
by the Company’s Board of Directors and no further consent or authorization of the Company, its Board of Directors, or its
shareholders is required, (iii) this Agreement has been duly executed and delivered by the Company by its authorized representative,
and such authorized representative is the true and official representative with authority to sign this Agreement and the other
documents executed in connection herewith and bind the Company accordingly, and (iv) this Agreement constitutes, and upon execution
and delivery by the Company of the Note, each of such instruments will constitute, a legal, valid and binding obligation of the
Company enforceable against the Company in accordance with its terms.

 

    	 	3	 

     

    

 

c.             Capitalization. As of the date hereof, the authorized common stock of the Company consists of 12,000,000,000
authorized shares of Common Stock, $0.0001 par value per share, of which 3,177,788,855
shares are issued and outstanding; and 1,057,377,049 shares are reserved for
issuance upon conversion of the Note. All of such outstanding shares of capital stock are, or upon issuance will be, duly authorized,
validly issued, fully paid and non-assessable. .

 

d.             Issuance of Shares. The Conversion Shares are duly authorized and reserved for issuance and, upon conversion of the Note
in accordance with its respective terms, will be validly issued, fully paid and non-assessable, and free from all taxes, liens,
claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights
of shareholders of the Company and will not impose personal liability upon the holder thereof.

 

e.             No Conflicts. The execution, delivery and performance of this Agreement, the Note by the Company and the consummation by
the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance and reservation for
issuance of the Conversion Shares) will not (i) conflict with or result in a violation of any provision of the Certificate of
Incorporation or By-laws, or (ii) violate or conflict with, or result in a breach of any provision of, or constitute a default
(or an event which with notice or lapse of time or both could become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture, patent, patent license or instrument to which the Company
or any of its Subsidiaries is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree
(including federal and state securities laws and regulations and regulations of any self-regulatory organizations to which the
Company or its securities are subject) applicable to the Company or any of its Subsidiaries or by which any property or asset
of the Company or any of its Subsidiaries is bound or affected (except for such conflicts, defaults, terminations, amendments,
accelerations, cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect). The
businesses of the Company and its Subsidiaries, if any, are not being conducted, and shall not be conducted so long as the Buyer
owns any of the Securities, in violation of any law, ordinance or regulation of any governmental entity. “Material Adverse
Effect” means any material adverse effect on the business, operations, assets, financial condition or prospects of the Company
or its Subsidiaries, if any, taken as a whole, or on the transactions contemplated hereby or by the agreements or instruments
to be entered into in connection herewith. 

 

    	 	4	 

     

    

 

f.              SEC Documents; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents
required to be filed by it with the SEC pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended
(the “1934 Act”) (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial
statements and schedules thereto and documents (other than exhibits to such documents) incorporated by reference therein, being
hereinafter referred to herein as the “SEC Documents”). Upon written request the Company will deliver to the Buyer
true and complete copies of the SEC Documents, except for such exhibits and incorporated documents. As of their respective dates
or if amended, as of the dates of the amendments, the SEC Documents complied in all material respects with the requirements of
the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the
SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. None of the statements made in any such SEC Documents is, or has been, required to
be amended or updated under applicable law (except for such statements as have been amended or updated in subsequent filings prior
the date hereof). As of their respective dates or if amended, as of the dates of the amendments, the financial statements of the
Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and
the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance
with United States generally accepted accounting principles, consistently applied, during the periods involved and fairly present
in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries as of the dates
thereof and the consolidated results of their operations and cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments). The Company is subject to the reporting requirements of the 1934 Act.

 

g.             Absence of Certain Changes. Since December 31, 2016, except as set forth in the SEC Documents, there has been no material
adverse change and no material adverse development in the assets, liabilities, business, properties, operations, financial condition,
results of operations, prospects or 1934 Act reporting status of the Company or any of its Subsidiaries.

 

h.             Absence of Litigation. Except as set forth in the SEC Documents, there is no action, suit, claim, proceeding, inquiry or
investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the
knowledge of the Company or any of its Subsidiaries, threatened against or affecting the Company or any of its Subsidiaries, or
their officers or directors in their capacity as such, that could have a Material Adverse Effect. The Company and its Subsidiaries
are unaware of any facts or circumstances which might give rise to any of the foregoing.

 

i.              No Integrated Offering. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has
directly or indirectly made any offers or sales in any security or solicited any offers to buy any security under circumstances
that would require registration under the 1933 Act of the issuance of the Securities to the Buyer. The issuance of the Securities
to the Buyer will not be integrated with any other issuance of the Company’s securities (past, current or future) for purposes
of any shareholder approval provisions applicable to the Company or its securities.

 

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j.              No Brokers. The Company has taken no action which would give rise to any claim by any person for brokerage commissions,
transaction fees or similar payments relating to this Agreement or the transactions contemplated hereby. 

 

k.             No Investment Company. The Company is not, and upon the issuance and sale of the Securities as contemplated by this Agreement
will not be an “investment company” required to be registered under the Investment Company Act of 1940 (an “Investment
Company”). The Company is not controlled by an Investment Company.

 

l.              Breach of Representations and Warranties by the Company. If the Company breaches any of the representations or warranties
set forth in this Section 3, and in addition to any other remedies available to the Buyer pursuant to this Agreement, it will
be considered an Event of default under Section 3.4 of the Note.

 

4.            COVENANTS.

 

a.             Best Efforts. The Company shall use its best efforts to satisfy timely each of the conditions described in Section 7 of
this Agreement. 

 

b.             Form D; Blue Sky Laws. The Company agrees to timely make any filings required by federal and state laws as a result of
the closing of the transactions contemplated by this Agreement.

 

c.             Use of Proceeds. The Company shall use the proceeds for general working capital purposes.

 

d.             Expenses. At the Closing, the Company’s obligation with respect to the transactions contemplated by this Agreement
is to reimburse Buyer’ expenses shall be $3,000.00 for Buyer’s legal fees and due diligence fee. 

 

e.             Corporate Existence. So long as the Buyer beneficially owns any Note, the Company shall maintain its corporate existence
and shall not sell all or substantially all of the Company’s assets, except with the prior written consent of the Buyer.

 

f.              Breach of Covenants. If the Company breaches any of the covenants set forth in this Section 4, and in addition to any other
remedies available to the Buyer pursuant to this Agreement, it will be considered an event of default under Section 3.4 of the
Note.

 

    	 	6	 

     

    

 

g.             Failure to Comply with the 1934 Act. So long as the Buyer beneficially owns the Note, the Company shall comply with the
reporting requirements of the 1934 Act; and the Company shall continue to be subject to the reporting requirements of the 1934
Act.

 

5.            Transfer Agent Instructions. In the event that the Company proposes to replace its transfer agent, the Company shall provide,
prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially
delivered pursuant to this Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock
in the Reserved Amount as such term is defined in the Note) signed by the successor transfer agent to Company and the Company.
Prior to registration of the Conversion Shares under the 1933 Act or the date on which the Conversion Shares may be sold pursuant
to an exemption from registration, all such certificates shall bear the restrictive legend specified in Section 2(e) of this Agreement. 
The Company warrants that: (i) no instruction will be given by the Company to its transfer agent and that the Securities shall
otherwise be freely transferable on the books and records of the Company as and to the extent provided in this Agreement and the
Note; (ii) it will not direct its transfer agent not to transfer or delay, impair, and/or hinder its transfer agent in transferring
(or issuing)(electronically or in certificated form) any certificate for Conversion Shares to be issued to the Buyer upon conversion
of or otherwise pursuant to the Note as and when required by the Note and this Agreement; and (iii) it will not fail to remove
(or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive
legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any Conversion Shares issued
to the Buyer upon conversion of or otherwise pursuant to the Note as and when required by the Note and/or this Agreement. 
If the Buyer provides the Company and the Company’s transfer, at the cost of the Buyer, with an opinion of counsel in form,
substance and scope customary for opinions in comparable transactions, to the effect that a public sale or transfer of such Securities
may be made without registration under the 1933 Act, the Company shall permit the transfer, and, in the case of the Conversion
Shares, promptly instruct its transfer agent to issue one or more certificates, free from restrictive legend, in such name and
in such denominations as specified by the Buyer.  The Company acknowledges that a breach by it of its obligations hereunder
will cause irreparable harm to the Buyer, by vitiating the intent and purpose of the transactions contemplated hereby.  Accordingly,
the Company acknowledges that the remedy at law for a breach of its obligations under this Section 5 may be inadequate and agrees,
in the event of a breach or threatened breach by the Company of the provisions of this Section, that the Buyer shall be entitled,
in addition to all other available remedies, to an injunction restraining any breach and requiring immediate transfer, without
the necessity of showing economic loss and without any bond or other security being required.

 

6.            Conditions to the Company’s Obligation to Sell. The obligation of the Company hereunder to issue and sell the Note
to the Buyer at the Closing is subject to the satisfaction, at or before the Closing Date of each of the following conditions
thereto, provided that these conditions are for the Company’s sole benefit and may be waived by the Company at any time
in its sole discretion:

 

a.             The Buyer shall have executed this Agreement and delivered the same to the Company.

 

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b.             The Buyer shall have delivered the Purchase Price in accordance with Section 1(b) above.

 

c.             The representations and warranties of the Buyer shall be true and correct in all material respects as of the date when made and
as of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date),
and the Buyer shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by the Buyer at or prior to the Closing Date. 

 

d.             No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having
authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this
Agreement.

 

7.           Conditions to The Buyer’s Obligation to Purchase. The obligation of the Buyer hereunder to purchase the Note at the
Closing is subject to the satisfaction, at or before the Closing Date of each of the following conditions, provided that these
conditions are for the Buyer’s sole benefit and may be waived by the Buyer at any time in its sole discretion:

 

a.             The Company shall have executed this Agreement and delivered the same to the Buyer.

 

b.             The Company shall have delivered to the Buyer the duly executed Note (in such denominations as the Buyer shall request) in accordance
with Section 1(b) above.

 

c.             [intentionally omitted].

 

d.             The representations and warranties of the Company shall be true and correct in all material respects as of the date when made
and as of the Closing Date as though made at such time (except for representations and warranties that speak as of a specific
date) and the Company shall have performed, satisfied and complied in all material respects with the covenants, agreements and
conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing Date.
The Buyer shall have received a certificate or certificates, executed by the chief executive officer of the Company, dated as
of the Closing Date, to the foregoing effect and as to such other matters as may be reasonably requested by the Buyer including,
but not limited to certificates with respect to the Board of Directors’ resolutions relating to the transactions contemplated
hereby.

 

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e.             No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having
authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this
Agreement.

 

f.              No event shall have occurred which could reasonably be expected to have a Material Adverse Effect on the Company including but
not limited to a change in the 1934 Act reporting status of the Company or the failure of the Company to be timely in its 1934
Act reporting obligations.

 

g.             The Conversion Shares shall have been authorized for quotation on an exchange or electronic quotation system and trading in the
Common Stock on such exchange or electronic quotation system shall not have been suspended by the SEC or an exchange or electronic
quotation system.

 

h.             The Buyer shall have received an officer’s certificate described in Section 3(d) above, dated as of the Closing Date.

 

8.           Governing Law; Miscellaneous.

 

a.             Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Virginia without
regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated
by this Agreement shall be brought only in the state courts of New York or in the federal courts located in the state and county
of Nassau. The parties to this Agreement hereby irrevocably waive any objection to jurisdiction and venue of any action instituted
hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The
Company and Buyer waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney's
fees and costs. In the event that any provision of this Agreement or any other agreement delivered in connection herewith is invalid
or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that
it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may
prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement.
Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding
in connection with this Agreement, the Note or any related document or agreement by mailing a copy thereof via registered or certified
mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

 

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b.             Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but
all of which shall constitute one and the same agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party. 

 

c.             Headings. The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the
interpretation of, this Agreement.

 

d.             Severability. In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute
or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform with such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any
law shall not affect the validity or enforceability of any other provision hereof.

 

e.             Entire Agreement; Amendments. This Agreement and the instruments referenced herein contain the entire understanding of
the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither
the Company nor the Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. No provision
of this Agreement may be waived or amended other than by an instrument in writing signed by the majority in interest of the Buyer
and an officer of the Company.

 

f.              Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder
shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered
or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid,
or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party
shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder
shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting
facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where
such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during
normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by
express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first
occur. The addresses for such communications shall be as set forth in the heading of this Agreement with a copy by fax only to
(which copy shall not constitute notice) to Naidich Wurman LLP, 111 Great Neck Road, Suite 214, Great Neck, NY 11021, Attn: Allison
Naidich, facsimile: 516-466-3555, e-mail: allison@nwlaw.com. Each party shall provide notice to the other party of any change
in address.

 

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g.             Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors
and assigns. Neither the Company nor the Buyer shall assign this Agreement or any rights or obligations hereunder without the
prior written consent of the other. Notwithstanding the foregoing, the Buyer may assign its rights hereunder to any person that
purchases Securities in a private transaction from the Buyer or to any of its “affiliates,” as that term is defined
under the 1934 Act, without the consent of the Company.

 

h.             Survival. The representations and warranties of the Company and the agreements and covenants set forth in this Agreement
shall survive the closing hereunder notwithstanding any due diligence investigation conducted by or on behalf of the Buyer. The
Company agrees to indemnify and hold harmless the Buyer and all their officers, directors, employees and agents for loss or damage
arising as a result of or related to any breach or alleged breach by the Company of any of its representations, warranties and
covenants set forth in this Agreement or any of its covenants and obligations under this Agreement, including advancement of expenses
as they are incurred.

 

i.              Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things,
and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably
request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions
contemplated hereby.

 

j.              No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to
express their mutual intent, and no rules of strict construction will be applied against any party.

 

k.             Remedies. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the
Buyer by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Company acknowledges that the
remedy at law for a breach of its obligations under this Agreement will be inadequate and agrees, in the event of a breach or
threatened breach by the Company of the provisions of this Agreement, that the Buyer shall be entitled, in addition to all other
available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining,
preventing or curing any breach of this Agreement and to enforce specifically the terms and provisions hereof, without the necessity
of showing economic loss and without any bond or other security being required.

 

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IN
WITNESS WHEREOF, the undersigned Buyer and the Company have caused this Agreement to be duly executed as of the date first above
written.

  

	COATES INTERNATIONAL, LTD.	 
	 	 	 
	By:	/s/
    Barry C. Kaye	 
	 	Barry C. Kaye	 
	 	Chief Financial Officer	 

 

	POWER UP LENDING GROUP LTD.	 
	 	 	 
	By:	/s/
    Curt Kramer	 
	Name:	Curt Kramer	 
	Title:	Chief Executive Officer	 
	 	111 Great Neck Road, Suite 216	 
	 	Great Neck, NY 11021	 

 

	AGGREGATE SUBSCRIPTION AMOUNT:	 	 	 	 
	 	 	 	 	 
	Aggregate Principal Amount of Note:	 	$	43,000.00	 
	 	 	 	 	 
	Aggregate Purchase Price:	 	$	43,000.00	 

 

 

12Exhibit 10.1 

 

EMPLOYMENT AGREEMENT 

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”)
by and among MJ Holdings., a Nevada corporation (the “ Company ”), and Adam Laufer, a resident
of the State of Florida (“ Executive ”) is entered into as of April 24, 2017. 

 

WITNESSETH: 

 

WHEREAS, the Board of Directors of the
Company (the “Board”) has determined that it is in the best interests of the Company and its shareholders
to enter into an employment agreement with Executive as Chief Executive Officer and also employ him as President of the Company
pursuant to the terms and subject to the conditions of this Agreement; and 

 

WHEREAS, the Executive, who has served
as Chief Executive Officer of the Company since February10, 2014, desires to enter into an employment agreement to serve as Chief
Executive Officer and also accept employment as the President of the Company pursuant to the terms and subject to the conditions
of this Agreement. 

 

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

 

1. EMPLOYMENT

 

Upon the terms and subject to the conditions
of this Agreement, the Company employs the Executive, and the Executive accepts employment. 

 

2. TERM, DATES AND PLACE OF PERFORMANCE

 

2.1 Term. The term of this Agreement
shall begin on April 24, 2017 (the “Effective Date”), and, unless sooner terminated in accordance with
the provisions of this Agreement, shall end on April 24, 2018 (the “Initial Term ”), and will thereafter
automatically extend for successive one-year periods (each a “Renewal Term”) unless either party gives
at least six months’ advance written notice to the other party of its intention not to extend the Initial Term or any Renewal
Term, as applicable (a “Notice of Non-Renewal”). 

 

2.2 Dates. This Agreement refers
to the dates defined in this Section as follows: (i) the period of time during which the Executive is an employee of the Company
during the Initial Term and any Renewal Term is hereinafter referred to as the “Term”; and (ii) each
year which begins with the Effective Date (or with the anniversary of the Effective Date) and continues until the next anniversary
of the Effective Date is hereinafter referred to as an “Employment Year”. 

 

3. POSITION AND DUTIES

 

3.1 Position and Duties. Executive
shall serve as the President and Chief Executive Officer of the Company and, at the request of the Board and for no compensation
beyond that specified in Section 4.1 hereof, in such other positions with the Company and its subsidiaries that are reasonably
acceptable to Executive. Executive shall have executive duties, functions, authority, and responsibilities commensurate with the
office of President and Chief Executive Officer or such other offices Executive from time to time holds with the Company, as a
public company, and its subsidiaries, subject, in accordance with applicable law, to the supervision and direction of the Board.
Executive currently serves as a Director of the Company. 

 

     

     

    

3.2 Devotion of Time and Effort.
Executive shall use Executive’s good faith, best efforts and judgment (a) in performing Executive’s duties required
hereunder and (b) to act in the best interests of the Company.

 

4. COMPENSATION

 

4.1 Base Salary. Executive shall
be entitled to receive base salary (“Base Salary”) at the annual rate as follows: (a) Seventy-Five
Thousand Dollars ($75,000) during the Initial Term less all applicable tax withholdings and deductions by the Company. The Base
Salary shall be payable in accordance with the Company’s customary payroll practices and net of all applicable tax withholding
and deductions by the Company. Notwithstanding the preceding sentence, the Board shall review Executive’s Base Salary annually
and may make adjustments to increase but not decrease such Base Salary, in accordance with the compensation practices and guidelines
of the Company in effect from time to time during the Term. In the Board’s annual review of Executive’s Base Salary,
it shall in good faith and in consultation with Executive consider any material increase in value of the Company during the Term
in determining any increase in the Base Salary. 

 

4.2 Annual
Bonus. Commencing on the Effective Date, Executive shall be eligible to participate in the Company’s annual performance
based bonus program, as the same may be established from time to time by the Board in consultation with the Executive for executive
officers of the Company and any annual bonus earned thereunder (the “ Annual Bonus ”) shall
be paid no later than the 15th day of the third month following the end of the fiscal year for which it is earned (and no earlier
than January 1 of the year following such fiscal year) and following certification by the Board of the achievement of agreed-upon
performance measures and the amount of the bonus to be paid to Executive for the applicable fiscal year; provided, that in
the event that such certification does not occur on or prior to the 15 th day
of the third month following the end of such fiscal year, the Annual Bonus will be paid no later than December 31 of the year
following such fiscal year. 

 

4.3 Retention Bonus. As an
inducement for Executive to enter into this Agreement, the Company hereby agrees to pay Executive a one-time retention bonus in
the amount of $75,000 on or before May 1, 2017, subject to applicable tax withholdings and deductions. 

 

4.4 Vacation. During the Term,
Executive shall be entitled to four (4) weeks of paid vacation Employment Year to be used and accrued in accordance with the
Company’s policy as it may be established from time to time. In addition, Executive shall receive other paid time-off in
accordance with the Company’s policies for senior executives as such policies may exist from time to time. 

 

4.5 Business Expenses. Executive
will be promptly reimbursed for all reasonable business expenses incurred by Executive in connection with Executive’s employment
subject to Executive’s compliance with the Company’s expense reimbursement policies as in effect from time to time
during the Term. 

 

5. TERMINATION; TERMINATION BENEFITS

 

5.1 By the Company Without “Cause”. 

 

(a) The Company may terminate Executive’s
employment without “Cause” (as defined below) at any time following the Effective Date upon delivery of a Notice of
Termination to Executive. 

 

(b) Upon termination of Executive’s
employment by the Company Without Cause, other than due to a Change of Control Termination Event, Executive shall be entitled to: 

 

(i) the balance of the Base Salary, less
payments made to Executive under this Agreement; 

 

(ii) subject to Executive’s execution
and delivery to the Company of (a) a letter of resignation resigning as a member of the Board, if applicable, and all other
positions with the Company and

     

     

    

its subsidiaries (the “Letter of Resignation”)
and (b) a general release of claims in such form as reasonably determined by the Company (which execution version of such
release will be provided no later than five (5) calendar days following the Date of Termination) and such general release
(the “ Release ”) has become irrevocable pursuant to its terms and applicable law.

 

5.2 By the Company For Cause. 

 

(a) The Company may terminate Executive’s
employment for “Cause” in accordance with the requirements of this Section 5.3. 

 

(b) Upon termination of Executive’s
employment by the Company for Cause, Executive shall be entitled to the Accrued Amounts. 

 

(c) For purposes of this Agreement, “Cause”
shall mean: 

 

(i) continuing and substantial willful
failure, neglect or refusal by Executive to perform his duties under this Agreement or to follow the lawful instructions of the
Board which has not been cured by Executive (if curable) within ten (10) days after written notice thereof to Executive from
the Company; 

 

(ii) Executive’s commission of
any material act of fraud or embezzlement against the Company; 

 

(iii) Executive’s material breach
of this Agreement, which breach has not been cured by Executive (if curable) within ten (10) days after written notice thereof
to Executive from the Company; 

 

(iv) Executive’s conviction of
(or pleading guilty or nolo contendere to) any felony; 

 

(v) alcohol or other substance abuse
by Executive which, in the reasonable discretion of the Board, materially and adversely affects Executive’s ability to perform
his duties required or requested consistent with Executive’s obligations under this Agreement and applicable law; or 

 

(vi) any finding by the Securities and Exchange
Commission pertaining to Executive which, in the opinion of independent counsel selected by the Company, could reasonably be expected
to impair or impede the Company’s ability to register, list, or otherwise offer its stock to the public, or to maintain itself
as a publicly-traded company in good standing with the Securities and Exchange Commission. 

 

(d) Cause shall not exist with respect
to clauses (i), (ii), (iii) or (v) unless and until there shall have been delivered to Executive a copy of a resolution,
duly adopted by the affirmative vote of not less than a majority of the members of the Board at a meeting of the Board held for
the purpose (after five (5) days’ prior written notice to Executive of such meeting and the purpose thereof and an opportunity
for Executive, together with his counsel, to be heard before the Board at such meeting), of a finding that, in the good faith opinion
of the Board, Executive was guilty of any of the conduct specified in any of such clauses. No act or failure to act by the Executive
shall be considered “willful” if done or omitted by Executive in good faith with reasonable belief that such action
or omission was in the best interests of the Company. 

 

 

5.3 By Executive For Good Reason. 

 

(a) Executive may terminate his employment
for “Good Reason” (as defined below) by providing a Notice of Termination to the Board within thirty (30) days
of the occurrence of the circumstances giving rise to such Good Reason. The foregoing notice shall describe the claimed event or
circumstance and set forth Executive’s intention to terminate his employment with the Company; provided, that,
the Company has not substantially cured such event within thirty (30) days after

     

     

    

receiving such notice. Upon termination by Executive of his employment
for “Good Reason”, Executive will be entitled to: 

(i) the Accrued Amounts payable in accordance
with Section 5.1(a); 

 

(ii) subject
to Executive’s execution and delivery to the Company of the Letter of Resignation and the Release, the Severance Payment
which payment will be made on the later of the 60 th day
following the Date of Termination or the date on which the Release has become irrevocable pursuant to its terms and applicable
law, subject to the delay of payment under Section 5.7.

 

(b) For purposes of this Agreement, “Good
Reason” shall mean: 

 

(i) any material failure of the Company
to fulfill its obligations under this Agreement, including the failure to make any material payment due hereunder when due, or
any other material breach of a term or condition of this Agreement; 

 

(ii) a material and adverse change to
the Company’s operations, business model and or business plans, or a material reduction of, Executive’s duties and
responsibilities to the Company, including no longer reporting to the Board or a change in title; provided however, that,
the hiring or engagement of any person or entity by the Company with the approval of Executive to perform any of Executive’s
duties and responsibilities to the Company shall not constitute Good Reason; or

 

(iii) a material reduction in Executive’s
Base Salary (unless such reduction is caused by bona fide financial exigencies and is part of an overall and nondiscriminatory
reduction by the Company to the base salaries of all of its senior executives and such reduction is proportional in amount to the
reductions suffered by all of such other senior executives). 

 

5.4 Termination Following a Change
of Control. 

 

(a) If, within 12 months following a Change of Control, the Company
terminates Executive’s employment without Cause, or there is a Termination for Good Reason (a “Change in Control Termination”),
the Executive shall be entitled to be paid by the Company following the Date of Termination: 

 

(i) the balance of the unpaid Base Salary
within five (5) days following the Date of Termination (the “Severance Payment”); 

 

(ii) subject
to Executive’s execution and delivery to the Company of the Release, the Severance Payment which payment will be made on
the later of the 60 th day following
the Date of Termination or the date on which the Release has become irrevocable pursuant to its terms and applicable law, subject
to the delay of payment under Section 5.7; and 

 

(b) For purposes of this Agreement, “Change of
Control” shall mean: 

 

(i) Any sale, lease, license, exchange
or other transfer (in one or a series of related transactions) of all or substantially all of the consolidated assets of the Company
and its subsidiaries, other than a sale, lease, license or other disposition of all or substantially all of the consolidated assets
of the Company and its subsidiaries to an entity, more than fifty percent (50%) of the combined voting power of the voting
securities of which are owned by shareholders of the Company in substantially the same proportion as their ownership of the Company
immediately prior to such sale, lease, license or other disposition; 

 

(ii) Any “person” as such
term is used in Section 13(d) and Section 14(d) of the Securities Exchange Act of 1934, as amended (the “ Exchange
Act ”) is or becomes, directly or indirectly, the “beneficial owner” as defined in Rule 13d-3
under the Exchange Act of securities of the Company that represent more than 50% of the combined voting power of the Company’s
then outstanding voting securities, other than by virtue of a merger, consolidation or similar transaction, provided that,
notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely because the level of

     

     

    

ownership held by any such person (the “Subject Person”)
exceeds the designated percentage threshold of the outstanding voting securities as a result of a repurchase or other acquisition
of voting securities by the Company reducing the number of shares outstanding, provided further that if a Change in Control would
occur (but for the operation of this proviso) as a result of the acquisition of voting securities by the Company, and after such
share acquisition, any such Subject Person becomes the owner of any additional voting securities of the Company that, assuming
the repurchase or other acquisition had not occurred, increases the percentage of the then outstanding voting securities owned
by such Subject Person over the designated percentage threshold, then a Change in Control shall be deemed to occur; 

 

(iii) During any period of 12 consecutive
months, individuals who at the beginning of such period constitute the Board cease for any reason to constitute at least a majority
thereof unless the election, or the nomination for election by stockholders, of each new director was approved by a vote of at
least a majority of the directors then still in office who were directors at the beginning of the period; or 

 

(iv) There is consummated a merger, consolidation
or similar transaction involving (directly or indirectly) the Company if, immediately after the consummation of such merger, consolidation
or similar transaction, the stockholders of the Company immediately prior thereto do not own, directly or indirectly, either (A) outstanding
voting securities representing more than fifty percent (50%) of the combined outstanding voting power of the surviving entity
in such merger, consolidation or similar transaction or (B) more than fifty percent (50%) of the combined outstanding
voting power of the parent of the surviving entity in such merger, consolidation or similar transaction. 

 

5.5 By Executive Without Good Reason. 

 

(a) Executive may terminate his employment
without Good Reason by providing a Notice of Termination to the Company at least thirty (30) days prior to the Date of Termination. 

 

(b) Upon termination by Executive of
his employment without Good Reason, Executive shall be entitled to receive the Accrued Amounts payable in accordance with Section 5.1(a). 

 

5.6 Non-Renewal of the Term. 

 

(a) Upon termination of Executive’s
employment as a result of non-renewal of the Initial Term or any Renewal Term by the Company, Executive will be entitled to the
Accrued Amounts payable in accordance with Section 5.1(a). 

 

(b) Upon termination of Executive’s
employment as a result of non-renewal of the Initial Term or any Renewal Term by the Executive, Executive will be entitled to the
Accrued Amounts payable in accordance with Section 5.1(a). 

 

5.7 Nonqualified Deferred Compensation.
Notwithstanding any provision of this Agreement to the contrary (but subject in all respects to Section 16.9 below), if all
or any portion of the payments due under Section 5 are determined to be “nonqualified deferred compensation” subject
to Section 409A of the Code, and the Company determines that Executive is a “specified employee” (as defined in
Section 409A(a)(2)(B)(i) of the Code and other guidance issued thereunder), then such Severance Payment will be made on the
first day of the seventh month following the month in which Executive’s termination of employment occurs.

 

5.8 Notice of Termination; Non-Renewal.
Any termination of employment pursuant to Sections 5.1 through 5.5 shall be communicated by a Notice of Termination to the
other party hereto given in accordance with Section 13.2. 

 

(a) For purposes of this Agreement, a
“Notice of Termination” means a written notice that

 

(i) indicates the specific termination
provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for

     

     

    

termination of Executive’s employment under the provision
so indicated and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies
the termination date. The failure by Executive or the Company to set forth in the Notice of Termination any fact or circumstance
that contributes to a showing of Good Reason or Cause shall not waive any right of Executive or the Company, as the case may be,
hereunder or preclude Executive or the Company, as the case may be, from asserting such fact or circumstance in enforcing Executive’s
or the Company’s rights hereunder. 

 

(b) For purposes of this Agreement, “Date
of Termination” means (i) if Executive’s employment is terminated pursuant to Sections 5.1 through
5.5, the date of receipt of the Notice of Termination (in the case of a termination with or without Good Reason, provided,
such Date of Termination is in accordance with Sections 5.4 or 5.5, as the case may be), (ii) if Executive’s employment
is terminated by reason of death, the date of death, and (iii) the expiration of the Initial Term or any Renewal Term, as
applicable. 

 

(c) A termination of employment pursuant
to Section 5.6 shall be communicated by a Notice of Non-Renewal to the other party hereto given in accordance with Section 2
and Section 13.2. Notwithstanding anything to the contrary set forth in the Agreement, Executive hereby agrees to execute
and deliver the Letter of Resignation to the Company if Executive’s employment is validly terminated for any reason other
than for death. 

 

6. CONFIDENTIALITY/TRADE SECRETS

 

Executive specifically agrees that Executive
will not at any time, whether during or subsequent to the Term, in any fashion, form or manner, except in furtherance of Executive’s
duties at the Company or with the specific written consent of the Company, either directly or indirectly use, divulge, disclose
or communicate to any person or entity in any manner whatsoever, any confidential information or trade secrets of any kind, nature
or description concerning any matters affecting or relating to the business of the Company (the “ Proprietary
Information ”), including, without limitation, (a) all information, design or software programs (including
object codes and source codes), techniques, drawings, plans, experimental and research work, inventions, patterns, processes and
know-how, whether or not patentable, and whether or not at a commercial stage related to the Company or any subsidiary thereof,
(b)  lists or other written records used in the Company’s business, (g) compensation paid to employees and other
terms of employment, or (h) any other confidential information of, about or concerning the business of the Company, its manner
of operation, or other confidential data of any kind, nature, or description (excluding any information that is or becomes publicly
known or available for use through no fault of Executive or as directed by court order). The parties hereto stipulate that as between
them, Proprietary Information constitutes trade secrets that derive independent economic value, actual or potential, from not being
generally known to the public or to other persons who can obtain economic value or cause economic harm to the Company from its
disclosure or use and that Proprietary Information is the subject of efforts which are reasonable under the circumstances to maintain
its secrecy and of which this Section 6 is an example, and that any breach of this Section 6 shall be a material breach
of this Agreement. All Proprietary Information shall be and remain the Company’s sole property. 

 

7. INJUNCTIVE RELIEF

 

Executive acknowledges that any violation of
any provision of Sections 6 hereof by Executive will cause irreparable damage to the Company, that such damages will be incapable
of precise measurement and that, as a result, the Company will not have an adequate remedy at law to redress the harm which such
violations will cause. Therefore, in the event of any violation or threatened violation of any provision of Sections 6 hereof
by Executive, in addition to any other rights at law or in equity the Company may have, Executive agrees that the Company will
be entitled to seek, without proof of an inadequate remedy at law, posting any bond or proof of damages, equitable relief in the
form of specific performance, temporary restraining order, temporary or permanent injunction or any other equitable remedy which
may then be available. 

 

     

     

    

8. COMPANY’S AND EXECUTIVE’S DUTIES ON TERMINATION

 

In the event of termination of Executive’s
employment pursuant to Section 5, Executive agrees to deliver promptly to the Company all Proprietary Information which is
or has been in Executive’s possession or under Executive’s control. Upon termination of Executive’s employment
by the Company for any reason whatsoever and at any earlier time the Company so requests, Executive will deliver to the custody
of the person designated by the Company all originals and copies of such documents and other property of the Company in Executive’s
possession, under Executive’s control or to which Executive may have access. 

 

9. NON-DISPARAGEMENT

 

During and after the Term, for any reason,
neither Executive nor his agents, on the one hand, nor the Company, or its senior executives or the Board, on the other hand, shall
directly or indirectly issue or communicate any public statement, or statement likely to become public, that maligns, denigrates
or disparages the other (including, in the case of communications by Executive or his agents, any of the Company’s officers,
directors or employees). The foregoing shall not be violated by truthful responses to legal process or governmental inquiry or
by private statements to any of the Company’s officers, directors or employees; provided, that, in
the case of Executive, such statements are made in the course of carrying out his duties pursuant to this Agreement. 

 

10. INDEMNIFICATION

 

The Company shall indemnify the Executive against
all losses, claims, expenses, or other liabilities of any nature arising by reason of the fact that Executive: (a) is or was
a director, officer, employee, or agent of the Company or any of its subsidiaries; or (b) while a director, officer, employee
or agent of the Company or any of its subsidiaries, is or was serving at the request of the Company as a director, officer, partner,
venturer, proprietor, trustee, employee, agent or similar functionary of another corporation, partnership, joint venture, trust,
employee benefit plan or other entity, in each case to the fullest extent permitted under the Nevada Revised Statutes, Private
Corporations Law, as the same exists or may hereafter be amended. Without limiting the generality of the foregoing, Executive shall
be entitled in connection with Executive’s employment and in connection with Executive’s services as an officer and/or
director of the Company to the benefit of the provisions relating to indemnification and advancement of defense costs and expenses
contained in the bylaws and articles of incorporation of the Company, as the same in the future may be amended (not including any
amendments or additions that limit or narrow, but including any that add to or broaden, the protection afforded to the Executive),
to the fullest extent permitted by applicable law. The Company shall advance to Executive all costs of investigation or defense
incurred by the Executive in connection with any pending or threatened claim for which Executive may be entitled to indemnification
hereunder, provided that the Executive shall agree to return to the Company any such reimbursed amounts, without interest, if it
is determined in a final, non-appealable judgment by a court of competent jurisdiction that the Executive is not entitled to indemnification
by the Company for losses incurred in connection with such claim. The indemnification obligations of the Employer shall survive
from the Effective Date of this Agreement and continue until three (3) months after the expiration of any applicable statute
of limitations with respect to any claim made against Executive for which Executive is or may be entitled to indemnification (the
“Survival Period ”), and shall survive after the Survival Period with respect to any indemnification
claim as to which the Company has received notice on or prior to the end of the Survival Period. During the Term of this Agreement
and during the Survival Period, the Company shall, to the extent that the Board determines it to be economically reasonable, maintain
for the benefit of Executive, on an “occurrence” basis, a directors and officers errors and omissions insurance policy,
or a similar insurance policy(ies), providing coverage from a financially reputable carrier. Anything in this Agreement to the
contrary notwithstanding, this Section 10 shall survive the termination of this Agreement for any reason, and no release which
may be entered into in connection with the termination of the Executive’s employment will be deemed to release the Employer
from its obligations under this Section 10. 

 

 

     

     

    
11. REPRESENTATIONS AND WARRANTIES

11.1 Executive hereby represents and warrants
to the Company, and Executive acknowledges, that the Company has relied on such representations and warranties in employing Executive
and entering into this Agreement, as follows: 

 

(a) Executive has the legal capacity
and right to execute and deliver this Agreement and to perform his obligations contemplated hereby, and this Agreement has been
duly executed by Executive; 

 

(b) the execution, delivery and performance
of this Agreement by Executive does not and will not, with or without notice or the passage of time, conflict with, breach, violate
or cause a default under any agreement, contract or instrument to which Executive is a party or any judgment, order or decree to
which Executive is subject; 

 

(c) Executive is not a party to or bound
by any employment agreement, consulting agreement, non-compete agreement, fee for services agreement, confidentiality agreement
or similar agreement with any other person or entity; 

 

(d) upon the execution and delivery of
this Agreement by the Company and Executive, this Agreement will be a legal, valid and binding obligation of Executive, enforceable
in accordance with its terms; and 

 

(e) Executive understands that the Company
will rely upon the accuracy and truth of the representations and warranties of Executive set forth herein and Executive consents
to such reliance. 

 

11.2 The Company hereby represents and warrants
to Executive, and the Company acknowledges that Executive has relied on such representations and warranties in entering into this
Agreement, as follows: 

 

(a) the Company has all requisite power
and authority to execute and deliver this Agreement and to perform its obligations hereunder, and this Agreement has been duly
executed by the Company;

 

(b) the execution, delivery and performance
of this Agreement by the Company does not and will not, with or without notice or the passage of time, conflict with, breach, violate
or cause a default under any agreement, contract or instrument to which the Company is a party or any judgment, order or decree
to which the Company is subject; 

 

(c) upon the execution and delivery of
this Agreement by the Company and Executive, this Agreement will be a legal, valid and binding obligation of the Company, enforceable
in accordance with its terms; and 

 

(d) the Company understands that Executive
will rely upon the accuracy and truth of the representations and warranties of the Company set forth herein and the Company consents
to such reliance. 

 

12. ARBITRATION

Any controversy arising out of or relating
to this Agreement, its enforcement or interpretation, or because of an alleged breach, default, or misrepresentation in connection
with any of its provisions, or any other controversy arising out of Executive’s employment with the Company or the termination
of Executive’s employment with the Company, including, but not limited to, any state or federal statutory claims, shall be
submitted to arbitration in Miami-Dade County, Florida, before a sole arbitrator selected from the American Arbitration Association,; provided, however,
that provisional injunctive relief may, but need not, be sought by either party to this Agreement in a court of law while arbitration
proceedings are pending, and any provisional injunctive relief granted by such court shall remain effective until the matter is
finally determined by the arbitrator. Final resolution of any dispute through arbitration may include any remedy or relief which
the arbitrator deems just and equitable, including any and all remedies provided by applicable state or federal statutes. The Company
shall bear all administrative costs of any arbitration initiated under this Section 12, including any filing fees and arbitrator
fees. 

 

     

     

    

At the conclusion of the arbitration, the arbitrator
shall issue a written decision that sets forth the essential findings and conclusions upon which the arbitrator’s award or
decision is based. Any award or relief granted by the arbitrator hereunder shall be final and binding on the parties hereto and
may be enforced by any court of competent jurisdiction. The parties hereto acknowledge and agree that they are hereby waiving any
rights to trial by jury in any action, proceeding or counterclaim brought by either of the parties against the other in connection
with any matter whatsoever arising out of or in any way connected with this Agreement. The arbitrator shall award reasonable attorney’s
fees (including reasonable disbursements) to the party that the arbitrator has determined to be the prevailing party in such arbitration.
Except as may be necessary to enter judgment upon the award or to the extent required by applicable law, all claims, defenses and
proceedings (including, without limiting the generality of the foregoing, the existence of the controversy and the fact that there
is an arbitration proceeding) shall be treated in a confidential manner by the arbitrator, the parties hereto and their counsel,
and each of their agents, employees and all others acting on behalf of or in concert with them. Without limiting the generality
of the foregoing, no one shall divulge to any person or entity not directly involved in the arbitration the contents of the pleadings,
papers, orders, hearings, trials, or awards in the arbitration, except as may be necessary to enter judgment upon an award as required
by applicable law. Any court proceedings relating to the arbitration hereunder, including, without limiting the generality of the
foregoing, to prevent or compel arbitration or to confirm, correct, vacate or otherwise enforce an arbitration award, shall be
filed under seal with the court, to the extent permitted by law. 

 

13. GENERAL PROVISIONS

 

13.1 Assignment, Binding Effect.
This Agreement, and Executive’s rights and obligations hereunder, may not be assigned or delegated, in whole or in part,
by Executive, and any prohibited assignment attempted by the Executive is void. This Agreement shall be binding on any successor
to the Company, whether by merger, acquisition of substantially all of the Company’s assets, or otherwise, as fully as if
such successor was a signatory hereto and the Company shall cause such successor to, and such successor shall, expressly assume
the Company’s obligations hereunder. Notwithstanding anything else herein contained, the term “Company” as used
in this agreement, shall include all such successors. 

 

13.2 Notices. 

 

(a) All notices, requests, demands or
other communications that are required or may be given under this Agreement shall be in writing and shall be given by personal
delivery, by certified or registered United States mail (postage prepaid, return receipt requested), by a nationally recognized
overnight delivery service for next day delivery, or by facsimile transmission, as follows (or to such other address as any party
may give in a notice given in accordance with the provisions hereof): 

 

MJ Holdings, Inc. 

4141 NE 2 Ave.

#204-A

Miami, FL 33137

 

If to Executive, 

 

Shawn Chemtov

c/o MJ Holdings, Inc. 

4141 NE 2 Ave.

#204-A

Miami, FL 33137

 

(b) All notices, requests or other communications
will be effective and deemed given only as follows: (i) if given by personal delivery, upon such personal delivery, (ii) if
sent by certified or registered mail, on the fifth business day after being deposited in the United States mail, (iii) if
sent for next day delivery by overnight delivery service, on the date of delivery as confirmed by written confirmation of delivery,
(iv) if sent by facsimile, upon the transmitter’s confirmation of receipt of such facsimile transmission, except that
if such confirmation is received after 5:00 p.m. (in the recipient’s time zone) on a

     

     

    

business day, or is received on a day that is not a business day,
then such notice, request or communication will not be deemed effective or given until the next succeeding business day. Notices,
requests and other communications sent in any other manner, including by electronic mail, will not be effective. 

 

13.3 Governing Law. This Agreement
is governed by, and is to be construed and enforced in accordance with, the laws of the State of Florida without regard to principles
of conflicts of laws. 

 

13.4 Amendment. No provisions of
this Agreement may be amended, modified or waived unless such amendment or modification is agreed to in writing signed by Executive
and by a duly authorized officer selected at such time by the Board, and such waiver is set forth in writing and signed by the
party to be charged. 

 

13.5 Entire Agreement. This Agreement
sets forth the entire agreement of the parties hereto in respect of the subject matter contained herein and supersedes all prior
or contemporaneous agreements, arrangements and understandings, whether oral or written, between the parties with respect to such
subject matter. Executive and the Company affirm that each fully understands this Agreement’s meaning and effect. Each party
hereto has participated fully and equally in the negotiation and drafting of this agreement. This Agreement contains section headings
for reference only. The headings in no way affect the meaning or interpretation of this Agreement. For purposes of Section 6, 8
and 9 of this Agreement, the “Company” as used therein shall be deemed to include the Company and its
subsidiaries and their respective successors and assigns. 

 

13.6 Withholding. All payments
hereunder shall be subject to any required withholding of federal, state and local taxes pursuant to any applicable law or regulation.  

 

13.7 Severability. The sections,
paragraphs and provisions of this Agreement are severable. If any such section, paragraph or provision is found to be unenforceable,
the remaining sections, paragraphs and provisions will remain in full force and effect. 

 

13.8 Counterparts. This Agreement
may be executed and delivered (by facsimile, PDF or other electronic transmission) in counterparts, each of which shall be deemed
an original but all of which together will constitute one and the same instrument. 

 

13.9 Section 409A. Notwithstanding
anything herein to the contrary, this Agreement is intended to be interpreted and applied so that the payment of the benefits set
forth herein either shall be exempt from the requirements of Section 409A of the Code, or shall comply with the requirements
of such provision. Furthermore, the Company and its respective officers, directors, employees or agents make no guarantee that
this Agreement complies with, or is exempt from, the provisions of Section 409A of the Code and none of the foregoing shall
have any liability for the failure of this Agreement to comply with, or be exempt from, the provisions of Code Section 409A.
The parties hereto agree to make such amendments from time to time to the terms and conditions of this Agreement as are necessary
to ensure that this Agreement complies with the terms of and in a manner permitted by Section 409A of the Code and any regulation
or other official guidance promulgated thereunder. Each payment due hereunder shall be treated as a separate payment under Section 409A
of the Code. To the extent required by Code Section 409A, “termination of employment” (or any similar terms) shall
mean “separation from service” (as defined in Treasury Regulations Section 1.409A-1(h) and the default presumptions
thereof). With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except
as permitted by Code Section 409A, (i) the right to reimbursement or in-kind benefits shall not be subject to liquidation
or exchange for another benefit, (ii) the amount of expenses eligible for reimbursement, or in-kind benefits, provided during
any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable
year, and (iii) such payments shall be made on or before the last day of Executive’s taxable year following the taxable
year in which the expense was incurred. 

 

 

     

     

    
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above. 

 

	 	 	 
	MJ HOLDINGS, INC.:
	 	 
	By:	 	
        /s/ Shawn Chemtov

	
        Name: Shawn Chemtov

        Title: Director & co-CEO

	 
	EXECUTIVE:
	 	 
	By:	 	
        /s/ Adam Laufer

	
        Name: Adam Laufer

        Title: co-Chief Executive Officer and Director

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