Document:

EX. 10.1

 

 

LETTER OF INTENT

 

March 27, 2019

 

From:    Magnolia Colombia Ltd. (the “Company”)

 

This binding letter of intent (the “Letter
of Intent”) sets out the general terms and conditions of the proposed business combination between the Company and the
Target (as defined below) by way of a merger or share exchange agreement or other similar form of transaction (collectively, with
any related transactions, the “Transaction”) pursuant to which the Company will acquire all of the issued and
outstanding common shares in the capital of the Target (the “Target Shares”). The Transaction will likely be
a reverse take-over and be considered a “Qualifying Transaction” pursuant to the policies of the TSX Venture Exchange
(the “TSXV”) or the Canadian Securities Exchange (“CSE”), subject to the Target confirming
this structure is acceptable.

The acceptance of this Letter of Intent will
be followed by the good faith negotiation of definitive documentation (the “Transaction Documents”), including
a definitive merger, amalgamation, arrangement or share exchange agreement (the “Definitive Agreement”).

All dollar amounts herein
refer to Canadian dollars unless otherwise noted.

	1.		The
                                         principal terms of the Transaction are as follows:

 

	TARGET:	PCT LTD. (the “Target”), a holding company located in Little River, South Carolina who, through its wholly-owned operating subsidiary Paradigm Convergence Technologies Corporation (“PCT”) is focused on the commercial launch of its patented tracking system and environmentally safe, non-toxic antimicrobial solutions.
	 	 
	TRANSACTION:	
        The Company is listed on the TSXV, and the
        Target will enter into the Definitive Agreement to complete the Transaction.  Upon completion of the Transaction, the combined
        entity (the “Resulting Issuer”) will continue to carry on the business of the Target under its name and will
        list on the TSXV, the CSE or other Canadian stock exchange. The domicile and operations of PCT shall remain in the United
        States. The Target will have, as of the date of the execution of the Definitive Agreement approximately 47,159,238 Target Shares
        issued and outstanding. The Target also has US$2,500,000 of debt of which the Target will use best efforts to on or before the
        Closing Date (as defined below), arrange to convert a minimum of US$1.4 million of the debt at a price of no less than US$0.10
        per Target Shares (the “Debt Conversion”) and restructure such remaining debt to be long-term debt (the “Debt
        Restructuring”). It is anticipated that the 47,159,238 Target Shares plus the Target Shares issued pursuant to the Debt
        Conversion and all current convertible securities of the Target, will be exchanged for common shares or convertible securities
        of the Company at a ratio resulting in the shareholders of the Target owning 60% of the Resulting Issuer and the shareholders of
        the Company owning 40% of the Resulting Issuer on a pre-money on an undiluted basis (the “Exchange Ratio”).

         

        The Transaction may proceed by way of plan
        of arrangement, triangular merger, share exchange or other mechanism deemed to be the most effective, as determined by mutual agreement
        of the parties. The Definitive Agreement will, among other things, set out in sequence the steps agreed to in this Letter of Intent
        with the result that, upon completion of the Transaction, all Target and Company securities will have become securities of the
        Resulting Issuer.

	 	 
	THE COMPANY:

         

         
	
        The Company has no material
liabilities, approximately $1,800,000 in cash and 57,977,098 common shares issued and outstanding along with options and warrants
outstanding.

	 	 
	
        CONCURRENT FINANCING:
	
        Prior to the completion of the Transaction,
the Company and the Target will work together to complete an equity financing private placement of common shares or units with
warrants of subscription receipts (the “Subscription Receipts”) directly into the Company for gross proceeds of up
to C$3,000,000 (the “Private Placement”). All Subscription Receipts issued would be convertible, for no additional
consideration, into securities of the Resulting Issuer on closing of the Transaction.

	 	 
	LOAN:	Subject to approval of the TSXV, the Company agrees to issue a secured loan of up to CAD$250,000 to the Target following the execution of this Letter of Intent, on mutually satisfactory terms to the Company and Target, which loan will convert into shares of the Resulting Issuer on closing of the Transaction.  Additionally, the Company agrees to arrange to have a third party issue a secured loan to the Target of up to CAD$400,000 to pay for liabilities and ongoing working capital requirements prior to closing the Transaction, with such loan converting on the closing of the Transaction.  
	 	 
	LOCK UP PERIOD:	
        The Company and Target agree that
officers, directors and certain shareholders of the Resulting Issuer may be compelled by the TSXV or the CSE to sign escrow or
lock-up agreements pursuant to which each of such individuals will agree not to sell, transfer, pledge, or otherwise dispose of
or transfer the economic consequences of any securities of the Target held by such individuals and may also be subject to such
escrow periods as may be imposed by any other applicable stock exchange in connection with the completion of the Transaction.

	 	 
	DEFINITIVE AGREEMENT:	In the Definitive Agreement, (i) Target shall, acting reasonably, make such representations and warranties and provide such covenants, conditions and indemnities to the Company, and (ii) the Company shall, acting reasonably, make such representations and warranties and provide such covenants, conditions and indemnities to Target and its stockholders (the “Target Stockholders”), in each case as are customary for transactions similar to the Transaction. For the avoidance of doubt, upon execution of the Definitive Agreement, the Definitive Agreement will supersede this Letter of Intent.  All documentation shall be in form and content satisfactory to each of the parties and their respective counsel.  The Transaction Documents shall also contain such other terms, conditions and agreements to which the parties hereto may reasonably request and agree in order to complete the transactions contemplated in this Letter of Intent.
	 	 
	CLOSING DATE:	The closing of the Transaction is subject to the execution of the Definitive Agreement incorporating the terms hereof on or before April 27, 2019 and the completion of all conditions thereto and closing to occur on or before July 15, 2019, or such other date as may be agreed upon by the Company and the Target (the “Closing Date”).
	 	 
	
        TIME OF ESSENCE:

         
	Each of the Company and Target shall use commercially diligent efforts to pursue all matters necessary to complete the Transaction, including, where necessary, obtaining necessary board approvals, shareholder approvals and to solicit proxies in favor of the Transaction.
	 	 
	
        DUE DILIGENCE:

         
	
        Prior to the execution and delivery
by the parties hereto of the Definitive Agreement, the Company and Target shall each be permitted, through their respective representatives
and advisors, to conduct customary due diligence investigations of all aspects of the business, property and affairs of the other
party. Each party shall make available to the other party, in a timely manner, all of their corporate records, including minute
books, share ledgers, financial statements, tax returns, material contracts and all records maintained in connection with their
business. The parties agree that due diligence will begin immediately upon execution of this Letter of Intent and shall be completed
by the parties prior to execution of the Definitive Agreement.

	 	 
	BOARD:	
        The board of directors of the Resulting
Issuer following the Transaction, subject to compliance with corporate laws and the receipt of all necessary regulatory approvals,
shall be comprised of six directors, with three directors nominated by the Company and three directors nominated by the Target,
with the Chairman being nominated by the Target and having a casting vote in the event of a deadlock.

	 	 
	MANAGEMENT SERVICES AGREEMENT:	Upon completion of the Transaction, the Resulting Issuer shall enter into consulting agreements (collectively, the “Consulting Agreements”) with members of the Forbes & Manhattan team to provide services as the Chief Financial Officer, Corporate Secretary, Controller, Legal Clerk and Investors Relations Manager, with monthly base fees under such Consulting Agreements not to exceed C$20,000.00 per month.  Draft copies of the Consulting Agreements will be provided to the Target during the Exclusivity Period (defined below).  The Resulting Issuer will enter into contracts with members of the management team of the Target, including specifically the contract for Jody Read (the “Read Contract”) on terms satisfactory to the Company, acting reasonably.  Draft copies of such management contracts will be provided to the Company during the Exclusivity Period (defined below).  The Company will use best efforts to reduce any obligations related to change of control, severance or similar type payments.
	 	 
	CONDITIONS:	
        The closing of the Transaction is subject to
        the following conditions:

         

	The parties entering into the Definitive Agreement
        and receipt by each party of all required consents, approvals and other authorizations of any regulatory authorities, shareholders
        or third parties;

        

	Satisfactory due diligence review by the Company,
        in its sole discretion, of all of the relevant corporate documents, contracts, liabilities and material agreements relating to
        the Target;

        

	The Resulting Issuer entering into the Read
        Contract on terms satisfactory to the Company; and

        

	Completion of the Debt Conversion and Debt
        Restructuring on terms satisfactory to the Company.

	2.	(a)	From
                                         the date hereof until the Termination Date (defined below) (the “Exclusivity
                                         Period”) the Parties hereby agrees to negotiate exclusively with a view to
                                         executing the Transaction Documents as soon as possible. Each Party agrees that, except
                                         as required by law, during the Exclusivity Period, neither it, its affiliates nor any
                                         of its representatives, officers, directors, employees, advisors or agents will, directly
                                         or indirectly, make, solicit or initiate enquiries from, or the submission of proposals
                                         or offers from, any other party or participate in any discussions or negotiations regarding,
                                         or furnish to any other party any further information with respect to any transaction
                                         involving a recapitalization, restructuring, amalgamation, arrangement, merger, consolidation,
                                         business combination or joint venture that would in any such case result in a direct
                                         or indirect disposition of the shares or assets of either Party, or a material portion
                                         thereof or any similar transaction involving the Company, the Target or their respective
                                         subsidiaries, or otherwise co-operate in any way with, or assist or participate in or
                                         facilitate, any effort or attempt by any person to do or seek to do any of the foregoing.
                                         In the event of a breach of this provision by either Party (the “Defaulting
                                         Party”), the Defaulting Party shall pay the reasonable legal, accounting and
                                         other professional fees and expenses incurred by the other Party in respect of negotiating
                                         this Letter of Intent and other Transaction Documents and in preparing for the closing
                                         of the Transaction, with fees and costs capped at $100,000. 

		(b)	In the event that Target or any of its stockholders obtains a bona
fide offer from a third party relating to a transaction which would materially interfere with the Transaction and which Target
wishes to pursue at the instruction of its board of directors or a committee thereof, including without in any way limiting the
generality of the foregoing, any such arrangement or agreement resulting from an unsolicited offer or proposal (such offer, a “Target
Offer”), then Target shall provide forthwith a copy of the Target Offer to the Company (and in any event within one business
day following receipt thereof). 

		(c)	During
                                         the Exclusivity Period, the Company and Target also agree to use commercially reasonable
                                         efforts to provide whatever information is required to complete the Transaction, including,
                                         without limitation, the approval of the TSXV and/or CSE and completion of the information
                                         circular, listing statement or any other filing requirements in connection with the Transaction,
                                         including specifically two years of audited financial statements of the Target.

	3.		From
                                         the date of the acceptance of this Letter of Intent until the earlier of the Closing
                                         Date or the Termination Date, the Company and Target will operate their respective businesses
                                         in a prudent and business-like manner in the ordinary course and in a manner consistent
                                         with past practice. 

	4.		Each
                                         party shall be responsible for its own costs and charges incurred with respect to the
                                         transactions contemplated herein including, without limitation, all costs and charges
                                         incurred prior to the date of this Letter of Intent and all legal and accounting fees
                                         and disbursements relating to preparing the Transaction Documents or otherwise relating
                                         to the transactions contemplated herein.

	5.		Each
                                         party shall permit the other party and its counsel to participate fully in the preparation
                                         of all documentation to be used in connection with the approval of the Transaction.

	6.	(a)	No
                                         disclosure or announcement, public or otherwise, in respect of this Letter of Intent
                                         or the transactions contemplated herein will be made by any party without the prior approval
                                         of the other party as to timing, content and method, hereto, provided that the obligations
                                         herein will not prevent any party from making, after consultation with the other party,
                                         such disclosure as its counsel advises is required by applicable law or the rules and
                                         policies of the TSXV or US Securities Laws. The parties agree that the Company will issue
                                         a press release following the execution of this Letter of Intent, which shall be approved
                                         by the Target prior to release, acting reasonably. 
	 	 	 
	 	(b)	All
                                         information discovered or acquired by each of the parties hereto (the “Confidential
                                         Information”), in any form whether written, electronic or verbal, as to financial
                                         condition, business, properties, title, assets and affairs (including any material contracts)
                                         as may reasonably be requested by the other party, will be kept confidential by each
                                         party hereto and not be utilized for any purpose except in connection with the Transaction,
                                         notwithstanding either the termination of this Letter of Intent or its completion, other
                                         than information that:

		(i)	was generally available to the public prior to the date of this Letter
of Intent or has become, other than due to the default of the other party, generally available to the public;

		(ii)	was available to a party on a non-confidential basis before the date
of this Letter of Intent;

		(iii)	has become available to a party on a non-confidential basis from a person who is not otherwise
bound by confidentiality obligations to the provider of such information or otherwise prohibited from transmitting the information
to the party; or

		(iv)	a party is legally required or compelled to disclose under applicable
law or in any governmental, administrative, or judicial process.

	 	(c)	No
                                         Confidential Information may be released to third parties other than legal counsel and
                                         other advisors to the parties without the prior consent of the provider thereof, except
                                         to the extent that such Confidential Information is compelled to be released by legal
                                         process or must be released to regulatory bodies, including the TSXV or included in public
                                         documents. Notwithstanding the generality of the foregoing, the parties hereto acknowledge
                                         and agree that the Definitive Agreement will be publicly filed by the Company under its
                                         profile on the SEDAR website at www.sedar.com and by the Target on www.sec.gov, as soon
                                         as practicable following execution.
	 	 	 
	 	(d)	All such Confidential
                                         Information in written form and documents will be returned to the party originally delivering
                                         them in the event that the Transaction is not consummated.

	7.		Subject
                                         to written agreement to extend this Letter of Intent, this Letter of Intent shall terminate
                                         with the parties having no obligations to each other, other than in respect of the expense
                                         payment and confidentiality provisions contained in paragraphs 4 and 6, respectively,
                                         on the day (the “Termination Date”) on which the earliest of the following
                                         events occurs:

		a.	written
                                         agreement of the parties to terminate this Letter of Intent;

		b.	the
                                         parties not entering into the Definitive Agreement on or before April 27, 2019; and

		c.	any
                                         applicable regulatory authority having notified in writing any of the parties that it
                                         will not permit the Transaction to proceed.

	8.		This
                                         Letter of Intent will constitute a legally binding agreement pending negotiation of the
                                         Transaction Documents and will inure to the benefit of and be enforceable by the parties
                                         hereto and their respective successors and permitted assigns. No assignment of this Letter
                                         of Intent will be permitted without the consent of the other party.

	9.		The
                                         binding obligation of this Letter of Intent, the Transaction Documents and other agreements
                                         contemplated herein and therein, if entered into, will be construed in all respects under
                                         and be subject to the laws of the Province of Ontario and the federal laws of Canada
                                         applicable therein which are applicable to agreements entered into and performed within
                                         the Province of Ontario.

	10.		All
                                         notices, requests, demands or other communications by the terms hereof required or permitted
                                         to be given by one party to another shall be given in writing by personal delivery, email
                                         transmission or by registered mail, postage prepaid, addressed to such other party or
                                         delivered to such other party as follows:
	 	 	 
	 	 	in
                                         the case of notice to be given to the Company, be addressed to:
	 	 	 
	 	 	Magnolia
                                         Colombia Ltd.

                                                                                              65
                                         Queen Street West, 8th Floor

                                                                                              Toronto,
                                         Ontario M5H 2M5

	 	 	 
	 	 	Attention:Neil
                                         Said

Email:nsaid@fmresources.ca

	 	 	 
	 	 	and, in
                                         the case of notice to be given to Target, be addressed to:
	 	 	 
	 	 	PCT
                                         LTD.

4235
Commerce Street

Little
River, SC 29566

	 	 	 
	 	 	Attention:Jody
                                         Read

Email:
jread@para-con.com

	 	 	 
	 	 	With
                                         a copy to:

DeMint
Law, PLLC

3753
Howard Hughes Parkway

Second
Floor, Suite 314

Las
Vegas, Nevada 89169

	 	 	 
	 	 	Attention:Anthony
                                         N. DeMint, Esq.

Email:anthony@demintlaw.com

	 	 	 
	 	 	or at such
                                         other address as may be given by any of them to the others in writing from time to time
                                         and such notices, requests, demands or other communications shall be deemed to have been
                                         received, if sent by email, on the first business day after sending or, if sent by registered
                                         mail, on the fifth business day after mailing or, if delivered, upon the date of delivery.

	11.		This
                                         Letter of Intent constitutes the entire agreement, and supersedes all other prior agreements
                                         and undertakings, both written and oral, between the parties with respect to the subject
                                         matter hereof.

	12.		Each
                                         party will, at its own cost, execute and deliver any further agreements and documents
                                         and provide any further assurances as may be reasonably required by the other party to
                                         give effect to this Letter of Intent and, without limiting the generality of the foregoing,
                                         will do or cause to be done all acts and things, execute and deliver or cause to be executed
                                         and delivered all agreements and documents and provide any assurances, undertakings and
                                         information as may be required from time to time by all governmental authorities, the
                                         TSXV and/or CSE or as may be required from time to time under applicable securities legislation.

	13.		Each
                                         party represents and warrants to the other that all negotiations relating to this Letter
                                         of Intent and the transactions contemplated by this Letter of Intent have been carried
                                         on between them directly, without the intervention of any other person on behalf of any
                                         party in such manner as to give rise to any valid claim against either of Target or the
                                         Company for a brokerage commission, finder’s fee or other similar payment. 

	14.		No
                                         supplement, modification, amendment, waiver, discharge or termination of this Letter
                                         of Intent is binding unless it is executed in writing by the party to be bound. No waiver
                                         of, failure to exercise or delay in exercising, any provision of this Letter of Intent
                                         constitutes a waiver of any other provision (whether or not similar) nor does any waiver
                                         constitute a continuing waiver unless otherwise expressly provided.

	15.		Each
                                         provision of this Letter of Intent is distinct and severable. If any provision of this
                                         Letter of Intent, in whole or in part, is or becomes illegal, invalid or unenforceable
                                         in any jurisdiction, the illegality, invalidity or unenforceability of that provision
                                         will not affect the legality, validity or enforceability of the remaining provisions
                                         of this Letter of Intent, or the legality, validity or enforceability of that provision
                                         in any other jurisdiction.

	16.		This
                                         Letter of Intent may be executed in counterpart and evidenced by a facsimile or other
                                         electronic copy thereof and all such counterpart execution or facsimile copies shall
                                         constitute one document.

[The remainder of this page is intentionally
left blank]

    	 

    	 

    

In witness whereof the Company and Target
have executed this Letter of Intent effective as of the date first above written.

 

	MAGNOLIA COLOMBIA LTD.	 	 
	 	 	 
	 	 	 
	Per:	/s/ James S. Lanthier	 	 
	 	Name: James S. Lanthier	 	 
	 	Title: CEO	 	 
	 	 	 
	 	 	 
	PCT LTD	 	 
	 	 	 	 	 
	 	 	 	 	 
	Per:	/s/ F. Jody
    Read	 	 	 
	 	Name: F. Jody Read	 	 	 
	 	Title: CEOExhibit
10.01

 

LOAN
AGREEMENT

 

THIS
LOAN AGREEMENT (“Agreement”) is made and entered into effective the 1st day of April 2019 by and between
EXTRACTING POINT, LLC, a Nevada limited liability company, (“Borrower”), GENERATION ALPHA, INC., A Nevada corporation,
(“Guarantor”) and MICHAEL CANNON AND JENNIFER CANNON, TRUSTEES OF THE CORE 4 TRUST DATED FEBRUARY 29, 2016 (“Lender”).

 

RECITALS

 

Borrower
wishes to borrow from Lender the principal sum of THREE MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($3,500,000.00), and
Lender has agreed to provide such sum in the form of a loan subject to the terms and conditions contained herein.

 

NOW,
THEREFORE, Lender and Borrower agree as follows:

 

1.
DEFINITIONS.

 

(a)
Collateral. The term “Collateral” means all of the Collateral covered by the Deed of Trust.

 

(b)
Debt. The term “Debt” means total liabilities which includes, but are not limited to, all loans, advances,
letters of credit, extensions of credit (provisional or otherwise), accounts payable, accruals, guaranties, overdrafts, indebtedness
and obligations of Borrower (collectively, “loans,” or each, “loan”) heretofore or hereafter made or incurred
by Borrower, together with interest thereon, and any renewals and extensions thereof, whether or not evidenced by notes, drafts,
this Agreement or other agreements by or on behalf of Borrower.

 

(c)
Deed of Trust. The term “Deed of Trust” means the Deed of Trust and Assignment of Rents to be executed
and delivered by Borrower conveying a lien interest to Lender on the real property located at 2601 W. Holly Street, Phoenix, Arizona
(“Property”), more particularly described in the Deed of Trust.

 

(d)
Environmental Laws. The term “Environmental Laws” means all federal, state and local statutes, regulations
and ordinances in effect at any time during the term of this Agreement relating to the protection of the environment or the health
of any organism.

 

(e)
Environmental Terms. All of the environmental terms used in this Agreement not otherwise specifically defined herein, including,
without limitation, “release” and “disposal,” will have the meaning given such terms in or as construed
in connection with Environmental Laws.

 

(f)
Hazardous Materials. The term “Hazardous Materials” means substances defined as hazardous substances
pursuant to the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. section 9601, et seq.,
or as hazardous, toxic or pollutant pursuant to the Hazardous Materials Transportation Act, 49 U.S.C. section 1801, et seq., or
any other applicable Environmental Laws, in each case as such Environmental Laws are amended from time to time.

 

    	 	 	 

    	 

    

 

(g)
Indebtedness. The term “Indebtedness” means, collectively, all of the following:

 

(i)
All loans, advances, letters of credit, extensions of credit (provisional or otherwise), guaranties, overdrafts, indebtedness
and obligations of Borrower to Lender (collectively, “loans,” or each, “loan”) heretofore or hereafter
made or incurred by Borrower to Lender, together with interest thereon, and any renewals and extensions thereof, whether or not
evidenced by notes, drafts, this Agreement or other agreements by or on behalf of Borrower, or evidenced by accounts maintained
by Lender; and

 

(ii)
All amounts, costs and expenses advanced, committed, expended or incurred by Lender pursuant to the terms of this Agreement, including,
without limitation, reasonable attorneys’ fees and expenses for enforcement of this Agreement and/or the maintenance and/or
preservation of any collateral in which Lender has been granted a security interest.

 

(h)
Loan Documents. The term “Loan Documents” means all notes, drafts, agreements, accounts or other documents
evidencing any Indebtedness, providing security for or relating to any Indebtedness, including, but not limited to, this Agreement,
the Installment Note-Interest Included the Deed of Trust and the Guaranty by the Guarantor The Loan Documents are conclusive evidence
of such Indebtedness at any time owing to Lender.

 

(i)
Transaction Documents. The term “Transaction Documents” means the Loan Documents and the Warrant (as
hereinafter defined) issued by the Guarantor.

 

(j)
Operation Commencement Date. The term “Operation Commencement Date” is the date (i) the “Approval
to Operate” is granted by the AZDHS (as hereinafter defined); and (ii) the Manager is entitled to Management Fees as described
in Section 2 (b) (v) (1).

 

(k)
Management Period. The term “Management Period” shall mean the period of thirty-six (36) months from
the Operation Commencement Date.

 

2.
THE LOAN.

 

(a)
Subject to the terms and conditions of this Agreement, Lender hereby agrees to advance to Borrower on the date of this Agreement
the aggregate principal sum of THREE MILLION FIVE HUNDRED THOUSAND AND 00/100 DOLLARS ($3,500,000.00) (the “Loan”).

 

(b)
The advance under the Loan shall be evidenced by an Installment Note- Interest Included (the “Note”) executed on the
date of this Agreement and substantially in the form of Exhibit “A” attached hereto and incorporated by reference
herein. In the event that there is any conflict between the terms of this Agreement and the terms of the Note, the terms and provisions
of this Agreement shall control. The Note shall contain the following terms:

 

    	 	2	 

    	 

    

 

		(i)	Interest
                                         at the rate of Ten Percent (10%) per annum, with a late charge of Five Percent (5%) on
                                         any overdue payments (which are subject to a 10 business day grace period);
	 	 	 
		(ii)	Maturity
                                         date of five (5) years from the date of the funding of the Note;
	 	 	 
		(iii)	Interest
                                         only for the first twelve (12) months, and after the first twelve (12) months, interest
                                         and principal shall be amortized payable over the remaining four (4) years;
	 	 	 
		(iv)	Borrower
                                         may prepay the Loan, however, if Borrower prepays the Loan prior to thirty-six (36) months
                                         from the date of the funding of the Loan, Borrower shall pay, as a prepayment penalty,
                                         all interest that would have accrued during the first thirty-six (36) months from the
                                         date of the funding of the Loan that has remain unpaid at the time of repayment;
	 	 	 
		(v)	As
                                         additional consideration, Borrower and/or Guarantor shall cause the following amounts
                                         to be paid to Lender for the Management Period:

 

		(1)	Five
                                         Percent (5%) of the management fees (“Management Fees”), defined in a Cultivation
                                         Management Services Agreement (“Management Agreement”), by and between Guarantor,
                                         or an affiliate thereof as “Manager” on behalf of the duly licensed entity
                                         (the “License Holder”), awarded a Medical Marijuana Dispensary Registration
                                         Certificate or any other applicable license, awarded in accordance with the laws of the
                                         State of Arizona (the “License”), by the Arizona Department of Health Services
                                         (“AZDHS”). A copy of the proposed Management Agreement as attached as Exhibit
                                         “B” to the Loan Agreement. Guarantor agrees that it shall take all action
                                         reasonably necessary and use its best efforts, to execute or cause an affiliate
                                         entity to execute, a Management Agreement and upon execution, Exhibit “B”
                                         shall be updated with the final and fully executed copy of the Management Agreement and
                                         such replacement of Exhibit “B” shall not require an amendment to the Agreement;
                                         however, Borrow and/or Guarantor shall provide written notice of the replacement and
                                         provide Lender copy of same. Parties agree any replacement of Exhibit “B”
                                         shall not alleviate Borrower of its obligation to comply with the terms of this Section.
                                         In compliance with Title 9; Chapter 17 Department of Health Services Medical Marijuana
                                         Program (the “AZDHS Rules”) and A.R.S. § 36-2801 et seq., as amended
                                         from time to time (the “Act”) (the AZDHS Rules and the Act collectively referred
                                         to herein as the “AMMA”), nothing contained herein shall be construed to
                                         be profit sharing or any other profit splitting which would violate the License Holder’s
                                         nonprofit status or its status of good standing with AZDHS.
	 	 	 
		(2)	If
                                         the Operation Commencement Date has not occurred within twenty-four (24) months of the
                                         funding date of the Loan, instead of the payments described in Section 2(b)(v)(1), Borrower
                                         shall pay to Lender an amount equal to five percent (5%) of the fair market value of
                                         the rent of the Property as if the Property were fully occupied regardless of the occupancy
                                         rate for a maximum of thirty-six months subject to the other terms of this Section 2(b)(v)(2).
                                         The fair market value of the Property shall be determined by an independent commercial
                                         real estate broker selected by Borrower and Lender using comparable lease rates for similarly
                                         situated properties and shall be deemed to increase at the rate of three percent (3%)
                                         per year. If the Operation Commencement Date occurs after the payments in this subsection
                                         have commenced, then the payments under this subsection shall cease and the payments
                                         described in Section 2(b)(v)(1) shall commence and Lender shall be entitled to receive
                                         a maximum of thirty-six (36) months of payments pursuant to Section 2(b)(v)(1) and any
                                         payments made pursuant to this Section 2(b)(v)(2) shall be credited towards any amounts
                                         owed pursuant to Section A(1).

 

    	 	3	 

    	 

    

 

		(3)	The
                                         amounts described in Section 2(b)(v)(1) or (2) shall be defined as the “Additional
                                         Consideration”.
	 	 	 
		(4)	The
                                         Additional Consideration shall be paid to Lender for any calendar month by the last day
                                         of the following calendar month. Borrower and/or Guarantor shall provide to Lender a
                                         statement of amounts received by Manager, Borrower and/or Guarantor to which Lender is
                                         entitled pursuant to this section and any additional backup information, reasonably available,
                                         as Lender may reasonably request. To the extent the provisions of Section 2(b)(v)(2)
                                         apply, the payments described therein shall commence on the last day of the 25th
                                         month following the funding of the Loan.
	 	 	 
		(5)	Lender
                                         acknowledges and agrees that neither the License Holder nor its affiliates is a party
                                         to this Agreement, and in accordance with Section 13 herein, Lender shall have no rights
                                         or remedies against the License Holder and/or its affiliates related to the Additional
                                         Consideration or otherwise related to this Agreement, whether in law or equity. Any rights
                                         or remedies that Lender may have related to the Additional Consideration or this Agreement
                                         is expressly limited to those against Borrower and/or Guarantor.

 

(c)
The Loan shall be secured by the Deed of Trust and Assignment of Rents and other documents as required by the Lender, which shall
hold a first lien position, or treated as holding such position to the extent applicable to Borrower and/or Guarantor.

 

(d)
In consideration for the Loan, Guarantor agrees to issue the Warrant to Lender in the form of Exhibit “C”,
granting the Lender the right to purchase up to one million (1,000,000) shares of common stock of the Guarantor at an exercise
price of one dollar ($1.00) per share (“Warrant”).

 

(e)
[Reserved]

 

(f)
No Waiver. Any decision by Lender not to require payment of any interest, fee, cost or other amount payable hereunder or
under any other document, instrument or agreement at any time executed in connection herewith on any occasion shall in no way
limit or be deemed a waiver of Lender’s right to require payment of any such amount on any subsequent occasion.

 

    	 	4	 

    	 

    

 

3.
CONDITION TO CREDIT. 

 

(a)
Lender’s obligation to grant, extend or continue the Loan to Borrower is subject to the following conditions:

 

		(i)	Documents.
                                         Lender shall have received the following in form and substance satisfactory to it:

 

		(1)	Executed
                                         Transaction Documents;
	 	 	 
		(2)	Certified
                                         copies of resolutions of the Board of Managers or other organizational authorization
                                         of Borrower approving and authorizing the execution, delivery and performance of the
                                         Transaction Documents and all other actions to be taken by Borrower pursuant to the Transaction
                                         Documents; and
	 	 	 
		(3)	Certified
                                         copies of resolutions of the Board of Directors of Guarantor or other organizational
                                         authorization of Guarantor approving and authorizing the execution, delivery and performance
                                         of the Transaction Documents and all other actions to be taken by Guarantor pursuant
                                         to the Transaction Documents.

 

		(ii)	Representations
                                         and Warranties. The representations and warranties contained in this Agreement are
                                         accurate and complete as of the date of this Agreement.
	 	 	 
		(iii)	Events
                                         of Default. No Event of Default and no event which, with the giving of notice or
                                         the lapse of time or both, would constitute an Event of Default under this Agreement,
                                         has occurred and is continuing.

 

(b)
Borrower’s and Guarantor’s obligation to enter into the Transaction Documents, issue the Installment Note-Interest
Included, the Deed of Trust and Warrant is subject to the following conditions:

 

		(i)	Documents.
                                         Borrower shall have received the following in form and substance satisfactory to it:

 

		(1)	The
                                         Loan Documents relating to the Loan; and
	 	 	 
		(2)	Certified
                                         copies of resolutions of the Trustee(s) or other organizational authorization of Lender
                                         approving and authorizing the execution, delivery and performance of the Transaction
                                         Documents and all other actions to be taken by Lender pursuant to the Transaction Documents.

 

		(ii)	Representations
                                         and Warranties. The representations and warranties contained in this Agreement are
                                         accurate and complete as of the date of this Agreement.
	 	 	 
		(iii)	Receipt
                                         of Funds. Borrower shall have received the sum of THREE MILLION FIVE HUNDRED THOUSAND
                                         AND NO/100 DOLLARS ($3,500,000.00) from Lender, by wire transfer of immediately available
                                         funds, pursuant to the wire instructions provided by Borrower.

 

    	 	5	 

    	 

    

 

4.
PROMISE TO PAY. Borrower hereby unconditionally promises to pay to Lender the Indebtedness in accordance with the
terms of this Agreement and the Loan Documents; provided, however, that if no such document or agreement evidences such Indebtedness,
then the same is payable upon demand to Lender.

 

5.
GUARANTOR. Guarantor will furnish Lender within one hundred twenty (120) days after the close of Guarantor’s
fiscal year a copy of Guarantor’s annual audited financial statements and statements of income and retained earnings prepared
in accordance with generally accepted accounting principles consistently applied, it being understood and agreed by Lender that
the Guarantor filing of an annual report on Form 10-K with the U.S. Securities and Exchange Commission (the “SEC”)
pursuant to the rules and regulations of the Securities Exchange Act of 1934, as amended, shall constitute compliance with this
Section.

 

6.
CROSS COLLATERAL/CROSS DEFAULT. Borrower and Guarantor specifically acknowledge that any default in or with respect
to any obligation that is included in the Indebtedness as set forth in this Agreement is and will be a default of this Agreement
and all obligations that comprise the Indebtedness. Borrower and Guarantor specifically acknowledge that any Collateral that secures
any Indebtedness secures this Agreement and all obligations that comprise the Indebtedness.

 

7.
REPRESENTATIONS AND WARRANTIES OF BORROWER AND GUARANTOR. Borrower and Guarantor represent and warrant that, except
as disclosed in the Guarantor’s filings with the SEC, the following are true as of the date of this Agreement:

 

(a)
Assets. Borrower and Guarantor each have good and marketable title to all real property and other assets reflected in any
balance sheet or financial statement of each of them, except real property and other assets sold or otherwise disposed of in the
ordinary course of business subsequent to that date. Neither Borrower nor Guarantor has any outstanding liens or encumbrances
on any of its real properties or other assets, except as reflected on such balance sheet or financial statement. Neither Borrower
nor Guarantor is a party to any security agreements or title retention agreements, whether in the form of leases or otherwise,
of any personal property, except as reflected on such balance sheet or financial statement. Borrower and Guarantor acknowledge
and agree that Lender shall have a first lien position on the Property, or shall be treated, to the extent legally possible, and/or
as applicable to this Agreement, as holding such position.

 

(b)
Litigation. There is no action, suit, proceeding or investigation pending or, to the knowledge of Borrower or Guarantor
upon reasonable inquiry, threatened in writing against or affecting Borrower or Guarantor at law, in equity, or before or by any
governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, which, if adversely determined,
would have a materially adverse effect on Borrower or Guarantor’s financial condition, business or operation, taken as a
whole. Neither Borrower nor Guarantor is in default of any order, writ, injunction or decree.

 

(c)
Burdensome Provisions. Neither Borrower nor Guarantor is not a party to any indenture, agreement, instrument or lease,
or subject to any charter, by-law or other restriction, or any law, rule, regulation, order, writ, judgment or injunction which
has a materially adverse effect on Borrower or Guarantor’s financial condition, business or operation.

 

(d)
Other Agreements. Neither Borrower nor Guarantor is in default in the performance, observance or fulfillment of any of
the obligations, covenants or conditions contained in any debenture, note or other evidence of indebtedness of Borrower or Guarantor
or in any indenture or agreement of Borrower or Guarantor.

 

    	 	6	 

    	 

    

 

(e)
Taxes. Borrower and Guarantor have filed all United States federal and state tax returns which are required to be filed
and has paid or made adequate provision for the payment of all material taxes which have or may become due pursuant to those returns,
any matters raised by audits, assessments received by Borrower or Guarantor, or any other causes known to it, including, but not
limited to, foreign taxes.

 

(f)
Accuracy of Reports. Subject to any limitations stated in writing therein or in connection therewith, all balance sheets,
earnings statements and other financial data on Borrower or Guarantor which have been or may be furnished to Lender fairly represent
the financial condition of Borrower and Guarantor as of their dates and the result of its operations for the periods for which
the same are furnished. All other information, reports and other data furnished by Borrower or Guarantor are, or will be at the
time furnished, complete, accurate and correct in all material respects.

 

(g)
Organization. Borrower is duly organized, existing and in good standing in the state of its organization. Guarantor is
duly organized, existing and in good standing in the state of its incorporation. Borrower and Guarantor are each duly licensed
or qualified in all jurisdictions wherein the character of the property owned or the nature of the business transacted by it makes
licensing or qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could
not have resulted in a material adverse effect.

 

(h)
Authority. The execution, delivery and performance of this Agreement and all Loan Documents are within Borrower and Guarantor’s
power, have been duly authorized, and are not in conflict with law or the terms of any charter, bylaw, or of any indenture, agreement
or undertaking to which Borrower or Guarantor is a party or by which Borrower or Guarantor is bound or affected.

 

(i)
Environmental Status. Borrower and Guarantor have no knowledge nor written notice of any release or discharge of any Hazardous
Materials or any other violation under or relating to any Environmental Laws on, under or relating to Borrower or Guarantor’s
property or business. Neither Borrower nor Guarantor has received any order, summons, citation, directive, letter or other communication,
written or oral, from any person, entity or governmental agency or department regarding any actual or alleged violation of any
Environmental Laws.

 

(j)
ERISA. Borrower and Guarantor are each in compliance in all material respects with all applicable provisions of the Employee
Retirement Income Security Act of 1974 (“ERISA”), and no “reportable event” or “prohibited transaction”
as defined in ERISA has occurred and is continuing with respect to any employee benefit plans which Borrower or Guarantor maintains
or to which Borrower or Guarantor contributes.

 

(k)
Private Placement. Assuming the accuracy of the representations and warranties of Lender contained as provided in Section
8, the issuance of the Warrant and the shares of common stock issuable upon exercise of the Warrants in accordance with the
terms of the Warrant (the “Warrant Shares, and collectively with the Warrant, the “Securities”) will be exempt
from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), and will be exempt
from registration and qualification under applicable state securities laws and regulations.

 

    	 	7	 

    	 

    

 

(l)
Valid Issuance. If and when issued in compliance with the provisions of the Warrant, and the exercise price paid therefore,
the Warrant Shares will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances; provided,
however, that the Warrant Shares may be subject to restrictions on transfer under state and/or federal securities laws
as set forth herein or as otherwise required by such laws at the time a transfer is proposed. Guarantor hereby agrees that it
shall at all times reserve and keep available out of its authorized and unissued common stock, solely for the purpose of providing
for issuance of the Warrant Shares upon exercise of the Warrant, such number of shares of common stock as shall, from time to
time, be sufficient therefor.

 

8.
LENDER’S REPRESENTATIONS AND WARRANTIES IN REGARD TO WARRANT. The Lender makes the representations and warranties
as described in this Section to the Guarantor. Any capitalized terms in this Section not otherwise defined in this Agreement shall
have the meaning set forth in the Warrant.

 

(a)
No Public Sale or Distribution. The Lender is (i) acquiring the Warrants and (ii) upon exercise of the Warrants will acquire
the Warrant Shares issuable upon exercise of the Warrants for its own account and not with a view towards, or for resale in connection
with, the public sale or distribution thereof, except pursuant to sales registered or exempted under the Securities Act; provided,
however, that by making the representations herein, the Lender does not agree to hold any of the Securities for any minimum
or other specific term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration
statement or an exemption under the Securities Act. The Lender is acquiring the Securities hereunder in the ordinary course of
its business. The Lender does not presently have any agreement or understanding, directly or indirectly, with any Person (as defined
below) to distribute any of the Securities. For purposes of this Agreement, “Person” means an individual, a
limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity
and any governmental entity or any department or agency thereof.

 

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

 

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

 

(d)
Information. The Lender and its advisors, if any, have been furnished with all materials relating to the business, finances
and operations of the Guarantor and materials relating to the offer and sale of the Securities that have been requested by the
Lender. The Lender and its advisors, if any, have been afforded the opportunity to ask questions of the Guarantor. Neither such
inquiries nor any other due diligence investigations conducted by the Lender or its advisors, if any, or its representatives shall
modify, amend or affect the Lender’s right to rely on the Guarantor’s representations and warranties contained herein.
The Lender understands that its investment in the Securities involves a high degree of risk. The Lender has sought such accounting,
legal and tax advice as it has considered necessary to make an informed investment decision with respect to its acquisition of
the Securities. The Lender and its advisors, if any, have reviewed all of the Guarantor’s filings with the SEC since January
1, 2017.

 

    	 	8	 

    	 

    

 

(e)
No Governmental Review. The Lender understands that no United States federal or state agency or any other government or
governmental agency has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of
the investment in the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities.

 

(f)
Transfer or Resale. The Lender understands that: (i) the Securities have not been and are not being registered under the
Securities Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless (A) subsequently
registered thereunder, (B) the Lender shall have delivered to the Guarantor an opinion of counsel, in a generally acceptable form,
to the effect that such Securities to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption
from such registration, or (C) the Lender provides the Guarantor with reasonable assurance that such Securities can be sold, assigned
or transferred pursuant to Rule 144 or Rule 144A promulgated under the Securities Act, as amended, (or a successor rule thereto)
(collectively, “Rule 144”); (ii) any sale of the Securities made in reliance on Rule 144 may be made only in accordance
with the terms of Rule 144 and further, if Rule 144 is not applicable, any resale of the Securities under circumstances in which
the seller (or the Person) through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the Securities
Act) may require compliance with some other exemption under the Securities Act or the rules and regulations of the SEC thereunder;
and (iii) neither the Guarantor nor any other Person is under any obligation to register the Securities under the Securities Act
or any state securities laws or to comply with the terms and conditions of any exemption thereunder.

 

(g)
Legends. The Lender understands that the certificates or other instruments representing the Warrants and the stock certificates
representing the Warrant Shares, except as set forth below, shall bear a restrictive legend in substantially the following form
(and a stop-transfer order may be placed against transfer of such stock certificates):

 

[NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE
HAVE BEEN] [THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN] REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED
(I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR (B) AN OPINION OF COUNSEL SELECTED BY THE HOLDER, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID
ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

The
legend set forth above shall be removed and the Guarantor shall issue a certificate without such legend to the holder of the Securities
upon which it is stamped or issue to such holder by electronic delivery at the applicable balance account at The Depository Trust
Guarantor (“DTC”) following request of Lender, if (i) such Securities are registered for resale under the Securities
Act, (ii) in connection with a sale, assignment or other transfer, such holder provides the Guarantor with an opinion of counsel,
in a generally acceptable form, to the effect that such sale, assignment or transfer of the Securities may be made without registration
under the applicable requirements of the Securities Act, or (iii) the Securities can be sold, assigned or transferred pursuant
to Rule 144 or Rule 144A.

 

    	 	9	 

    	 

    

 

(h)
Validity; Enforcement. This Agreement and the other Transaction Documents to which the Lender is a party have been duly
and validly authorized, executed and delivered on behalf of the Lender and shall constitute the legal, valid and binding obligations
of the Lender enforceable against the Lender in accordance with their respective terms, except as such enforceability may be limited
by general principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar
laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.

 

(i)
No Conflicts. The execution, delivery and performance by the Lender of this Agreement and the other Transaction Documents
to which the Lender is a party and the consummation by the Lender of the transactions contemplated hereby and thereby will not
(i) result in a violation of the organizational documents of the Lender or (ii) conflict with, or constitute a default (or an
event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture or instrument to which the Lender is a party, or (iii) result in a violation
of any law, rule, regulation, order, judgment or decree (including federal and state securities laws) applicable to the Lender,
except in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which would not, individually
or in the aggregate, reasonably be expected to have a material adverse effect on the ability of the Lender to perform its obligations
hereunder.

 

9.
AFFIRMATIVE COVENANTS OF BORROWER AND GUARANTOR. So long as any Indebtedness is outstanding and unpaid, Borrower
covenants and agrees as follows:

 

(a)
Inspection. Borrower and Guarantor will permit Lender and its designated officers, employees, agents and representatives
to inspect at reasonable times and upon reasonable advance notice at its principal office and to examine, check, or direct Borrower
and/or Guarantor to make copies of or extract from the books, accounts, orders, records and original correspondence of Borrower
and Guarantor, respectively, and Borrower and Guarantor will make available to Lender its books, records and files as it relates
to the Property and obligations under the Loan Documents for such purposes.

 

(b)
Insurance. Borrower and Guarantor will maintain at all times insurance in such form and in such amounts and against such
risks as is customarily carried by companies engaged in the same or a similar business and operating like properties, including,
but not limited to (i) adequate insurance against liability on account of or damage or injury to persons and property and under
all applicable workers’ compensation laws; and (ii) such other insurance as Lender may reasonably request, in amounts, containing
such terms, in such form, for such periods and written by such insurers as may be satisfactory to Lender, with all mortgagee payable
clauses on the Collateral payable solely to Lender. All policies of insurance related to the Collateral will provide for ten (10)
days written minimum cancellation notice to Lender. In the event of failure to maintain such insurance on the Collateral, Lender
may, at its option, provide such insurance as Lender may require at the expense of Borrower or Guarantor. Lender will notify Borrower,
in writing, regarding the payment of any insurance premiums and request reimbursement from Borrower for the cost of the insurance
premiums and any related expenses. If Lender does not receive reimbursement from Borrower and/or Guarantor within ten (10) days
of the date of written notice or Borrower is in default under the Loan Documents, such expense shall be considered part of the
Indebtedness. Borrower will furnish to Lender on an annual basis certificates of insurance or other evidence satisfactory to Lender
of compliance with the foregoing insurance provisions.

 

    	 	10	 

    	 

    

 

(c)
Periodic Financial Statements. Until notified of a change, Borrower and Guarantor will furnish Lender financial statements
and statements of income and retained earnings prepared in accordance with generally accepted accounting principles, consistently
applied, by Borrower and Guarantor’s chief financial officers within fifty (50) days following each quarter end. In addition,
if the Borrower or Guarantor are in default, and so long as either party is in default, Borrower and Guarantor will furnish Lender
balance sheets and statements of income and retained earnings and such additional financial information as the Lender may so reasonably
request in writing in such manner and at such times as Lender may specify and such other information as Lender may from time to
time reasonably request.

 

(d)
Annual Financial Statements. Borrower will furnish Lender within one hundred twenty (120) days after the close of each
fiscal year a copy of the annual financial statements and statements of income and retained earnings prepared in accordance with
generally accepted accounting principles, which shall be derived from the audited financial statements of the Guarantor.

 

(e)
Maintenance of Existence. Borrower will maintain and preserve its existence and all rights, privileges, permits and franchises
necessary or desirable in the conduct of its business; and will conduct its business in an orderly, efficient and customary manner.

 

(f)
Maintenance of Property. Borrower and Guarantor will maintain, preserve and keep the Property in good working order and
condition.

 

(g)
Compliance with Laws. Borrower and Guarantor will comply with the AMMA, and all applicable laws, requirements, regulations
and restrictions, related to the Property and any business related to the cannabis plant belonging to the family Cannabacaeae,
the genus cannabis, which exist currently or come into being after the date of this Agreement, including any local, environmental,
or other applicable laws. Notwithstanding the foregoing, the parties hereby acknowledge that they are aware of and fully understand
that despite the State of Arizona’s laws, Arizona marijuana cultivators, transporters, distributors or possessors may still
be arrested by federal officers and prosecuted under federal law. In the event of Federal arrest, seizure or prosecution action
associated with the parties’ activities described herein, the parties hereby agree to hold each other harmless and agree
to be individually responsible for any attorney’s fees associated with defending such actions. The parties also hereby agree
to waive illegality as a defense to any contract enforcement action.

 

(h)
Taxes and Claims. Borrower and Guarantor will pay and discharge promptly all taxes, assessments, governmental charges and
levies imposed upon it or upon its income or profits or upon any properties belonging to it, prior to the date on which penalties
would be imposed, and pay all lawful claims for labor, materials and supplies that, if unpaid, might become a lien or charge upon
the Property. Neither Borrower nor Guarantor is not required to pay any such tax, assessment, charge, levy or claim if the amount,
applicability or validity thereof is being contested in good faith and by proper proceedings and if the party objecting to the
tax has set aside on its books and maintained adequate reserves for the payment of the same in conformity with generally accepted
accounting principles.

 

    	 	11	 

    	 

    

 

(i)
Additional Documents. Borrower and Guarantor will execute and deliver to Lender all additional instruments or documents
and do all things which Lender from time to time may deem reasonably necessary to carry into effect the provisions of this Agreement.

 

(j)
Compliance with Arizona Cannabis Laws. Borrower and Guarantor covenant this Agreement was drafted in accordance with, and
all action taken pursuant to this Agreement, including as it relates to the Management Agreement and/or the Property shall be
completed, in accordance with the AMMA.

 

(k)
Liens and Encumbrances. Borrower and Guarantor covenant that there are no unrecorded liens or encumbrances (mechanic’s
liens or otherwise) on the Property. In the event such a lien or encumbrances is discovered, Borrower and Guarantor shall indemnify,
defend and holder Lender harmless for any breach of this covenant.

 

(l)
Notice. Borrower and/or Guarantor will give prompt written notice to Lender of (i) any Event of Default as defined in this
Agreement or of any event of default arising under any other Loan Documents or of any other agreement or matter which has resulted
in or might result in a materially adverse change in Borrower or Guarantor’s financial condition, business or operations;
(ii) any change in Borrower or Guarantor’s name or principal place of business; (iv) any litigation or proceedings affecting
any of the transactions contemplated by this Agreement or affecting Borrower or Guarantor which, if adversely determined, might
have a materially adverse effect upon Borrower or Guarantor’s financial condition, business or operations; (v) any dispute
between Borrower or Guarantor and any governmental regulatory body or other party that might materially affect the transactions
contemplated by this Agreement or have a materially adverse effect upon Borrower or Guarantor’s financial condition, business
or operations; (vi) any past or present release or disposal of any Hazardous Materials or violation, potential violation or alleged
violation of any Environmental Laws on, under or relating to the Property; and (vi) any notice received by Borrower or Guarantor
relating to any Environmental Laws involving the Property.

 

(m)
Compliance with Environmental Laws. Borrower and Guarantor will (i) cause all activities on the Property to comply with
all Environmental Laws and orders of any governmental authority; (ii) obtain, keep in effect, comply with, and provide copies
to Lender of, all governmental permits and authorizations relating to any Environmental Laws relating to the Property; (iii) take
all steps necessary to determine no Hazardous Materials has been disposed of or released on or under the Property, and if any
Hazardous Materials exists on the Property within Borrower or Guarantor’s control, Borrower or Guarantor will remove such
Hazardous Materials or take whatever action is required by Environmental Laws or any governmental authority, at Borrower or Guarantor’s
sole expense, promptly upon discovery of such Hazardous Materials; (iv) provide to Lender access to Borrower’s property
that is subject to a security interest with Lender and an irrevocable license to remove any Hazardous Materials or to take whatever
action Lender determines in its sole and absolute discretion with respect to such Hazardous Materials; (v) provide to Lender,
upon Lender’s request and at Borrower or Guarantor’s sole expense, an inspection or audit of Borrower’s property
in which Lender has a security interest by an engineering or environmental consulting firm acceptable to Lender, indicating the
presence or absence of any Hazardous Materials on such property; and (vi) provide to Lender, upon Lender’s request, all
documents in Borrower’s possession or to which it has access relating to the environmental history, condition or activity
on, under or relating to Borrower’s property subject to Lender’s security interest or business.

 

    	 	12	 

    	 

    

 

10.
NEGATIVE COVENANTS OF BORROWER. Borrower covenants and agrees that until the full and final payment of all Indebtedness
hereunder, unless Lender waives compliance in writing, Borrower agrees as follows:

 

(a)
Encumbrances and Liens. Borrower will not create, execute, assume or allow any mortgage, deed of trust, security agreement,
pledge, encumbrance, including, without limitation, the lien of an attachment, judgment or execution, securing a charge or obligation
on, or execute or allow to be filed any financing statement affecting, the Property, except:

 

(i)
Liens or charges for current taxes, assessments or other governmental charges which are not delinquent or which remain payable
without penalty, or the validity of which is contested in good faith by appropriate proceedings upon stay of execution of the
enforcement thereof, provided Borrower has set aside on its books and maintains adequate reserves for payment of such liens or
charges in conformity with generally accepted accounting principles;

 

(ii)
Liens, deposits or pledges made to secure statutory obligations, surety or appeal bonds, or bonds for the release of attachments
or for stay of execution, or to secure the performance of bids, tenders, contracts (other than for the payment of borrowed money),
leases or for purposes of like general nature in the ordinary course of its business; or

 

(iii)
Purchase money security interests for property hereafter acquired, conditional sale agreements, or other title retention agreements,
with respect to property hereafter acquired, provided, however, that no such security interest or agreement shall extend to any
property other than such after acquired property.

 

(b)
Borrowings. Borrower will not sell or discount any account or evidence of indebtedness or other right to payment of money,
nor incur, or have outstanding at any time, any indebtedness for borrowed money, nor incur, directly or indirectly, any other
liability or obligation for borrowed money, except for Indebtedness incurred pursuant to this Agreement, purchase money debt,
equipment leases, or subordinated debt.

 

(c)
Consolidation and Merger. Borrower will not liquidate or dissolve or enter into any consolidation, merger, partnership,
joint venture, syndicate or other combination, except that Borrower may be consolidated with or merged with any entity, provided
that, in any such merger or consolidation, Borrower shall be the surviving or resulting entity and, immediately after the effectiveness
of such merger or consolidation, there has occurred no continuing Event of Default, as described herein, or any event which with
notice or lapse of time or both would become an Event of Default under this Agreement.

 

(d)
Payment of Dividends. During the term of this Agreement, Borrower will not declare or make distributions of income or other
assets to its members as such, whether in cash, property or securities, provided, however, Borrower is allowed to make distributions
to Borrower’s parent company in an amount equal to the parent company’s income tax liability associated with the operation
of Borrower.

 

    	 	13	 

    	 

    

 

(e)
Purchase or Retirement of Membership Interests or Other Equity Interest. Borrower will not acquire, purchase, redeem or
retire any shares of its capital stock or any other equity interest in Borrower now or hereafter outstanding for value.

 

(f)
[Reserved]

 

(g)
Default Under Other Agreements or Indentures. Neither Borrower nor Guarantor will commit or do, or fail to commit or do,
any act or thing which would constitute an event of default under any of the terms or provisions of any other agreement, indenture,
contract, document or instrument executed, or to be executed by Borrower and/or Guarantor.

 

(h)
Purchase of Securities. Neither Borrower nor Lender will utilize any part of the proceeds of any loan from Lender to purchase
or carry any margin stock (within the meaning of Regulation U of the Board of Governors of the Federal Reserve Systems) or to
extend credit to others for the purpose of purchasing or carrying any margin stock.

 

(i)
[Reserved]

 

11.
ENVIRONMENTAL INDEMNIFICATION. Borrower and Guarantor, jointly and severally, hereby agree to indemnify, defend
and hold harmless Lender and its officers, directors, employees, attorneys and agents against any and all claims, demands, losses,
liabilities, costs and expenses (including attorneys’ fees at trial and on any appeal or petition for review) incurred by
Lender:

 

(a)
arising out of or relating to any investigatory or remedial action involving the Property, operations conducted on the Property
or any other operations of Borrower and required by any Environmental Laws or by orders of any governmental authority having jurisdiction
under any Environmental Laws relating to the Property; or

 

(b)
on account of injury to any person whatsoever or damage to the Property arising out of, in connection with or In any way relating
to (i) the breach of any covenant contained in this Agreement, (ii) the violation of any Environmental Laws, (iii) the use, treatment,
storage, generation, manufacture, transport, release, spill, disposal or other handling of Hazardous Materials on the Property,
(iv) the contamination of the Property by any Hazardous Materials by any means whatsoever (including, without limitation, any
presently existing contamination of such property), or (v) all reasonable costs incurred by Lender pursuant to this Environmental
Indemnification clause.

 

12.
EVENTS OF DEFAULT. 

 

(a)
Events of Default. Upon the happening of any one or more of the following events of default and said default is not cured
within ten (10) business days, provided that Lender shall give Borrower written notice of a default with sufficient detail to
allow Borrower to cure for any default, except that no written notice shall be provided for default under Section 12(a)(1), the
Indebtedness shall, at the option of Lender and without notice, demand, or presentment, all of which are hereby expressly waived
by Borrower, become due and payable. The following shall constitute events of default:

 

    	 	14	 

    	 

    

 

(1)
Borrower or Guarantor’s failure to pay or perform any obligations, liabilities or Indebtedness of Borrower to Lender, whether
under this Agreement or any other agreement, note or instrument, now or hereafter existing, as and when due (whether at maturity
or by acceleration and no prior demand therefor by Lender being necessary).

 

(2)
Borrower or Guarantor’s failure to perform any of the covenants, agreements or conditions of this Agreement or any other
agreement between Borrower and Lender.

 

(3)
Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings, voluntary or involuntary, for relief under
any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower and shall not be discharged
within sixty (60) days after such initiation, or the Borrower admits in writing its inability to pay its debts generally as they
mature.

 

(4)
Any representation or warranty made by Borrower or Guarantor to Lender is, or was, untrue or misleading in any material respect
when made and the breach of which has (or with the passage of time will have) a material adverse effect on the rights of the Lender
with respect to the Loan Documents.

 

(5)
The dissolution of Borrower or Guarantor.

 

(6)
The acquisition at any time of title to the whole or any part of any asset which is security for this Agreement or the Note by
a new person, partnership, corporation or any other legal entity other than Borrower, or if there is a change of control of Borrower,
which will occur if there is a change of 50% or more of the membership interests of Borrower from the ownership of the membership
interests in Borrower as of the date of this Agreement.

 

(7)
Any attachment, lien or additional security instrument is not removed within thirty (30) days within its operation and after being
placed upon any asset which is security for this Agreement or the Note.

 

(b)
Default Interest. In the event that any amount due under this Agreement is reduced to judgment, or if the Borrower is ten
(10) or more business days late in making any payment required to be made under the Note, or if any of the events of default shall
occur, the total unpaid principal balance of the Note and accrued and unpaid interest thereon (past due interest being compounded)
shall then begin accruing interest at the rate stated in the Note, plus Five Percent (5.0%) per annum (the “Default Rate”),
to the fullest extent permitted by law, until such time as all past due payments and accrued interest are paid. At that time,
the interest rate will revert to that rate provided in the Note. Borrower acknowledges that the effect of this Default Rate could
operate to compound some of the interest obligations due, and the Borrower hereby expressly assents to such compounding should
it occur.

 

13.
REMEDIES. Upon the occurrence of any event of default (including the passage of time given to Borrower to cure such
default), Lender may: (a) terminate forthwith any indebtedness; and/or (b) declare any such indebtedness to be forthwith due and
payable, whereupon the unpaid principal amount of such indebtedness, together with accrued interest thereon, shall become immediately
due and payable without presentment, demand or protest, or other notice of any kind, all of which are hereby expressly waived,
anything contained herein or in any Loan Documents to the contrary withstanding; and/or (c) proceed to enforce any of its remedies
under this Agreement, any Loan Documents or pursuant to applicable law. No remedy conferred upon or reserved to Lender herein
is intended to be exclusive of any other remedy given under this Agreement or the Loan Documents, or now or hereafter existing
at law or in equity or by statute. Notwithstanding the foregoing, in the event of a default, Lender acknowledges and agrees that
it has no right, interest, remedy or any other security related to License Holder, License Holder’s business, and/or the
License. Additionally, in the event of a default, in which Lender intends to exercise any remedy available related the Property,
Lender shall allow for Manager, Borrower, and/or Guarantor to take all action reasonably necessary to ensure compliance with the
AMMA, including without limitation providing a reasonable amount of time for Manager and License Holder to remove from the Property,
any and all equipment, product, or any other related materials used in the operation of the cultivation facility on the Property.

 

    	 	15	 

    	 

    

 

14.
PAYMENT FOR EXPENSES.

 

(a)
Each party shall be responsible for the fees and expenses incurred in connection with this Agreement, including fees, expenses
and disbursements of counsel.

 

(b)
If an Event of Default occurs, Borrower will pay all reasonable attorneys’ fees and other expenses incurred by Lender in
the enforcement of its rights hereunder, whether the default is ultimately cured or Lender is obligated to pursue its remedies
hereunder, including, without limitation, such expenses incurred before legal action, during the pendency of any such legal action
and in connection with any appeal to higher courts arising out of matters associated herewith and in protecting the rights of
Lender in any bankruptcy, reorganization, liquidation or insolvency proceeding, whether or not litigation is commenced.

 

15.
WAIVER. The waiver by Lender of any breach of any provision of this Agreement or warranty or representation herein
must be in writing and will not be construed as a waiver of any subsequent or additional breach. The failure to exercise any right
hereunder by Lender will not operate as a waiver of such right.

 

16.
ENTIRE AGREEMENT. This Agreement, together with the Loan Documents and any written instruments or documents that
are referred to in or are part of this Agreement, is the final expression of the understanding of Borrower, Guarantor and Lender
concerning the subject matter of this Agreement and may not be altered or amended except with the written consent of each of the
parties and may not be contradicted by evidence of any alleged oral agreement.

 

17.
CHANGE IN NAME OR FORM. The liability of Borrower and/or Guarantor hereunder or under the Loan Documents will not
be affected by a change in the name of Borrower or Guarantor or a change in the form of Borrower or Guarantor by reason of merger,
acquisition or consolidation or by a change in the type or nature of business carried on by Borrower or Guarantor or any sale,
lease or transfer of any or all of the assets or stock of Borrower or Guarantor.

 

18.
TERMINATION. Borrower or Lender may cancel this Agreement, under the terms of this Agreement, at any time as to
future transactions but any such cancellation will not affect the obligations of Borrower to Lender with respect to loans granted
to Borrower prior thereto. All agreements, representations, warranties and covenants made herein by Borrower will survive the
execution and delivery of this Agreement and will continue in effect so long as any Indebtedness is outstanding and unpaid, notwithstanding
any termination of this Agreement.

 

    	 	16	 

    	 

    

 

19.
JURISDICTION AND GOVERNING LAW. This Agreement was negotiated in Nevada and any loan or advance to Borrower will
be deemed to be made in Nevada. Borrower agrees to submit to the jurisdiction of a court in Nevada to resolve disputes arising
under this Agreement. This Agreement shall be construed and governed in accordance with Nevada law. It is further understood that
the Deed of Trust shall be governed by Arizona law.

 

20.
TIME. Time is of the essence of this Agreement.

 

21.
LEGALLY BINDING. The parties acknowledge that this is a legally binding Agreement and that each has entered into
this Agreement having had the opportunity to fully review the terms hereof in consultation with legal counsel. This Agreement
shall be binding upon and inure to the benefit of the respective heirs, executors, administrators, successors and assigns of the
parties. Borrower may not assign this Agreement or any of its rights without the prior written consent of Lender.

 

22.
ENFORCEABILITY. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall be
ineffective to the extent of such prohibition or unenforceability in such jurisdiction only and will not invalidate or render
unenforceable any other provision of this Agreement.

 

23.
PARAGRAPH HEADINGS. The paragraph headings are for convenience only and will not affect the construction hereof.

 

24.
NOTICES. All notices, demands or other communications required or permitted to be given hereunder shall be in writing,
and shall be: (a) personally delivered with a written receipt of delivery; (b) sent by a nationally recognized overnight delivery
service requiring a written acknowledgement of receipt or providing a certification of delivery or attempted delivery; (c) sent
by certified or registered mail, return receipt requested; or (d) transmitted by e-mail, or facsimile, (provided that such sent
e-mail is kept on file (whether electronically or otherwise) by the sending party and the sending party does not receive an automatically
generated message from the recipient’s e-mail server that such e-mail could not be delivered to such recipient). All notices
shall be deemed effective when actually delivered as documented in a delivery receipt; provided, however, that if a notice
was sent by overnight courier or mail as aforesaid and is affirmatively refused or cannot be delivered during customary business
hours by reason of the absence of a signatory to acknowledge receipt, or by reason of a change of address with respect to which
the addressor did not have written notice delivered in accordance with this section, then the first attempted delivery shall be
deemed to constitute delivery. Each notice shall be addressed, in each instance, to the parties hereto at the addresses below.
Each party shall be entitled to change its address for notices from time to time by delivering to the other party notice thereof
in the manner herein provided for the delivery of notices. The addresses for the parties are as set forth below:

 

LENDER,
effective April 5, 2019:

Core
4 Trust.

c/o
Cannon Nevada LLC

2520
Saint Rose Pkwy, Suite 218

Henderson,
NV 89074

Email:
mcannon@cannonnevada.com

 

    	 	17	 

    	 

    

 

WITH
A COPY TO (WHICH SHALL NOT CONSTITUTE NOTICE):

 

Walls
Law Firm

8861
W. Sahara Ave Ste 220

Las
Vegas, NV 89117

Attn:
Tina M. Walls, Esq.

E-mail:
tinawalls@wallslaw.com

 

BORROWER:

Extracting
Point, LLC

c/o
Generation Alpha, Inc.

853
Sandhill Avenue.

Carson,
CA 90746

Attn:
Tiffany Davis, Manager

E-mail:
info@genalphainc.com

 

GUARANTOR:

Generation
Alpha, Inc.

853
Sandhill Avenue

Carson,
CA 90746

Attn:
Alan S. Lien, President

E-mail:
info@genalphainc.com

 

WITH
A COPY TO (WHICH SHALL NOT CONSTITUTE NOTICE):

 

Sichenzia
Ross Ference LLP

1185
Avenue of the Americas, 37th Floor

New
York, NY 10036

Attn:
Marc J. Ross, Esq.

E-mail:
mross@srf.law

 

25.
LENDER’S RIGHT TO ASSIGN. Notwithstanding any other provision of this Agreement or this Section, (a) there
shall be no restrictions on Lender’s right to assign this Agreement, any Note or any of the other Loan Documents. Borrower
and Guarantor may not assign this Agreement or the Loan Documents.

 

[signature
page follows]

 

    	 	18	 

    	 

    

 

IN
WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and effective as of the date and year first above
written.

 

BORROWER:

 

Extracting
Point, LLC, a Nevada limited liability company

 

	By:
    	 	 	Date:
    	 
	 	Tiffany
    Davis, Manager	 	 	 
	 	 	 	 	 
	GUARANTOR:	 	 	 
	Generation
    Alpha, Inc., a Nevada corporation	 	 	 
	 	 	 	 	 
	By:
    	 	 	Date:
    	 
	 	Alan
    S. Lien, President	 	 	 
	 	 	 	 	 
	LENDER:
    	 	 	 
	Core
    4 Trust dated February 29, 2016	 	 	 
	 	 	 	 	 
	By:
    	 	 	Date:
    	 
	 	Michael
    Cannon, Trustee	 	 	 
	 	 	 	 	 
	By:
    	 	 	Date:
    	 
	 	Jennifer
    Cannon, Trustee	 	 	 

 

    	 	19	 

    	 

    

 

Exhibit
“A”

Installment
Note-Interest Included

See
Attached

 

    	 	20	 

    	 

    

 

Exhibit
“B”

Cultivation
Management Services Agreement

See
Attached

 

    	 	21	 

    	 

    

 

Exhibit
“C”

Common
Stock Purchase Warrant Generation Alpha, Inc.

See
Attached

 

    	 	22

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