Document:

Exhibit 10.1

 

 

 

MODIFICATION
OF INDEPENDENT CONSULTING AGREEMENT

This Modification
of Independent Consulting Agreement ("Agreement"), dated this 18th day of July 2020, is by and between Cannabis
Global, Inc. a Nevada Corporation having a principal place of business at 520 South Grand Avenue, Ste. 320, Los Angeles, CA 90071
("CGI"), and New Horizons Laboratory Services, Inc., a Wyoming corporation, having a principal place of business at
1077 Pacific Coast Highway #146, Seal Beach, CA 90740 ("New Horizons"). Both CGI and New Horizons may be individually
referred to as a “Party” and collectively referred to as the “Parties.”

RECITALS:

Whereas,
in writing dated February 12, 2019, CGI and New Horizons entered into
a written consulting agreement (hereafter referred to as the “Consulting Agreement”), a copy of which is attached
to this Agreement as Exhibit 1 and incorporated fully herein by reference.

WHEREAS,
as consideration for retaining New Horizons’ services under the Consulting Agreement,
CGI issued New Horizons the promissory note, (the “Compensation Note”), attached to this Agreement as Exhibit 2 and
incorporated fully herein by reference.

WHEREAS,
CGI and New Horizons met and conferred regarding the terms and conditions of the Consulting
Agreement and consideration payable pursuant thereto, including the terms and conditions of the Compensation Note.

WHEREAS,
CGI and New Horizons deem it to be in their mutual best interest to amend and modify the Consulting
Agreement pursuant to Section 9.5 thereof, including the Effective Date and the consideration payable under the Consulting Agreement;
and,

NOW
THEREFORE, in consideration for the mutual promises and covenants contained
herein, the sufficiency of which is hereby acknowledged, CGI and New Horizons hereto agree as follows:

 

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		Section	1.              
                                         Incorporation of the RECITALS clauses.

1.1.           
CGI and New Horizons acknowledge that all of the representations set forth in the RECITALS clauses of this Agreement are
incorporated herein by reference and made a material part of this Agreement with the same force and effect as if more fully set
forth here at. CGI and NEW HORIZONS agree to waive any rule of contract construction or legal presumption that would prohibit
any court of competent jurisdiction from construing or enforcing this Agreement based upon the contents of the RECITALS above.

		Section	2.              
                                         Confirmation and Modification of Consulting Agreement.

2.1.            
Correction of Effective Date. The Parties amend the Effective Date to correct a
scrivener’s error. Affiliates acquired control over the Company on June 19, 2019. CGI was thus operational as of June 19,
2019, and the Effective Date of the Consulting Agreement is amended to delete February 12, 2019, and replace it with June 19,
2019.

2.2.            
Confirmation of Section 3.1 Cash Compensation. The Parties acknowledge and confirm
the contents of Section 3.1 of the Consulting Agreement, requiring CGI to pay monthly cash payments due New Horizons in the amount
of six thousand dollars ($6,000.00), and an additional monthly deferred cash payment of four thousand dollars ($4,000.00), equaling
a total compensation of ten thousand dollars ($10,000.00) per month. The Parties also agree to amicably meet and confer regarding
resolution of the deferred monthly compensation upon the end of the term. 

2.3.            
Cancellation of Compensation Note. The Parties agree to modify the Consulting Agreement
pursuant to Section 9.5 thereof, and further agree to delete Section 3.2 of the Consulting Agreement and cancel the Compensation
Note in Exhibit 2 with prejudice.

2.4.            
Other Parts of Consulting Agreement Unaffected. Except as otherwise amended above,
the Parties confirm the ongoing parts of the Consulting Agreement as being in full force and effect.

 
 

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		Section	3.              
                                         Miscellaneous Provisions.

3.1.            
Notices. All notices, offers of other communications required or permitted to be
given pursuant to this Agreement shall be in writing and shall be considered as properly given or made (i) if delivered personally;
or (ii) upon receipt by facsimile transmission (with written confirmation of receipt) or confirmed electronic mail; or (iii) after
the expiration of the second business day following deposit with documented overnight delivery service; or (iv) five business
days of transmission by regular mail. All notices given or made pursuant hereto shall be so given or made to the parties at the
following addresses:

If to CGI: 

Cannabis Global, Inc.

Attention: Mr. Arman Tabatabaei

520 South Grand Avenue, Ste.
320

Los Angeles, CA 90071

 

 

If to NEW HORIZONS:

New Horizons Laboratory Services,
Inc.

Attention: Mr. Joe Noel

1077 Pacific Coast Highway #146

Seal Beach, CA 90740

The address of any
party hereto may be changed by a notice in writing given in accordance with the provisions hereof.

3.2.            
Severability. If any provision of this Agreement is held by a court of competent
jurisdiction to be invalid, illegal or unenforceable, such provision shall be severed and enforced to the extent possible or modified
in such a way as to make it enforceable, and the invalidity, illegality or unenforceability thereof shall not affect the validity,
legality or enforceability of the remaining provisions of this Agreement.

3.3.            
Binding on Affiliated Third Parties. This Agreement shall inure to the benefit of
and shall be binding upon CGI and New Horizons and their respective agents, representatives, executors, administrators, trustees,
personal representatives, partners, directors, officers, shareholders, agents, attorneys, insurers, employees, representatives,
predecessors, successors, heirs and assigns.

 

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3.4.            
Governing Law. This Agreement shall be governed by and construed in accordance with
the laws of the State of California without regard to principles of conflict of laws. Any controversy or claim arising out of
or relating to this Agreement or the Breach thereof, shall be settled by civil action in the state or federal courts sitting in
the City and County of Los Angeles, California. The prevailing party in any such action shall recover all attorney fees and costs.

3.5.            
Counterparts. This Agreement may be executed in multiple counterparts, all of which
shall be deemed originals, and with the same effect as if all Parties had signed the same document. All of such counterparts shall
be construed together with and shall constitute one Agreement, but in making proof, it shall only be necessary to produce one
such counterpart. A facsimile transmission shall be as valid and enforceable as an original.

3.6.            
Entire Understanding. This Agreement is the entire, final, and complete agreement
of the Parties relating to the subject of this Agreement, and supersedes and replaces all prior or existing written and oral agreements
between the Parties or their representatives relating thereto. 

3.7.            
Further Assurances. The parties agree to execute and deliver to each other such
other documents, and to do such other acts and things, all as the other party may reasonably request for the purpose of carrying
out the intent of this Agreement.

3.8.            
Amendments. This Agreement shall not be amended or otherwise modified unless in
writing signed by all of the parties hereto consistent with Section 9.5 of the Consulting Agreement.

3.9.            
Acknowledgment. CGI and NEW HORIZONS acknowledges (i) They have read this Agreement
and have consulted with their respective attorneys concerning its contents and legal consequences and have requested any change
in language necessary or desirable to effectuate their intent and expectations so that the rule of construction of contracts construing
ambiguities against the drafting party shall be inapplicable; (ii) They have taken all corporate actions and obtained all corporate
authorizations, consents and approvals as are conditions precedent to their authority to execute this Agreement, and thus warrant
that they are fully authorized to bind the Party for which they execute this Agreement; and, (iii) There has been and will be
no assignment or other transfer of any right modified or cancelled herein, or any part thereof, and each Party agrees to defend,
indemnify and hold harmless the other party from any claims, obligations, or other liabilities, including specifically attorney’s
fees and costs incurred, which result from the assertion by any third party of a right to any part of the Consulting Agreement
modified or cancelled by this Agreement. The foregoing warranties and representations shall survive the execution and delivery
of this Agreement.

 

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3.10.        
Assignment. This Agreement shall be binding upon and inure to the benefit of each
party hereto or to such party's heirs, executors, administrators, successors and assigns and nothing in this Agreement, express
or implied, is intended to confer upon any other person any rights or remedies of any nature whatsoever under or by reason of
this Agreement.

3.11.        
Confidentiality. Each of the parties represents and agrees that it will keep the
terms, provisions and amounts in this Agreement confidential and that it will not, without the consent of the other Party, disclose,
divulge or furnish such confidential information to any person other than their immediate families, their attorney and accountant
(all of whom will be informed of and bound by this confidentiality provision) except as required by law or, if necessary, to any
applicable taxing authorities.

 

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IN WITNESS WHEREOF,
the parties have signed this agreement upon the date first written above.

CANNABIS
GLOBAL, INC.

By: /s/ Arman Tabatabaei    

Name: ARMAN TABATABAEI

Title: CHIEF EXECUTIVE
OFFICER

 

 

NEW
HORIZONS LABORATORY SERVICES, INC.

By: /s/ Joel Noel     

Name: JOE NOEL

Title: AUTHORIZED SIGNATORY

 

 

 

 

    	6Exhibit 10.2

 

 

COMPENSATION NOTE

 

Principal Amount: $100,000.00 Issuance Date:
February 12, 2020

 

FOR VALUE CONSIDERATION relative to Independent
Consulting Agreement between MCTC Holdings, Inc. and New Horizon Laboratory Services, Inc., ("New Horizons") a Wyoming
Corporation, dated February 12, 2020, MCTC HOLDINGS, INC., a Delaware corporation (the "Company"), hereby promises to
pay to the order New Horizons or the Holder assigned (the "Holder") the amount set out above as the Principal Amount
when due, whether upon the Maturity Date (as defined herein), any acceleration, redemption or otherwise (in each case in accordance
with the terms hereof) and to pay interest ("Interest") on any outstanding Principal at the applicable Interest Rate
from the date set out above as the Issuance Date (the "Issuance Date") until the same becomes due and payable, whether
upon a Repayment Date, the Maturity Date or acceleration, conversion, redemption or otherwise (in each case in accordance with
the terms hereof). This Long Term Compensation Note was issued pursuant to the Independent Consulting Agreement dated February
12, 2020 (the "Consulting Agreement").

 

1. SECTION ONE - GENERAL TERMS

 

1.1. Maturity Date. The "Maturity Date"
shall be August 4, 2020, as may be extended at the option of the Holder, or as provided herein.

 

1.2. This Note is non-assignable, unless authorized
by the Company.

 

1.3. 1.3. Interest Rate. Interest shall accrue
on the outstanding principal balance hereof at an annual rate equal to eight percent (8%) ("Interest Rate"), provided
that if any Event of Default has occurred and is continuing and has not been cured within the time prescribed, interest shall accrue
on the outstanding principal balance hereof at an annual rate equal to fifteen percent (15%) ("Default Interest Rate").
Interest shall be calculated on the basis of a 365-day year and the actual number of days elapsed, to the extent permitted by applicable
law.

 

1.4. 1.4. Cash Repayment Period. The Company
shall pay to the Holder the Principal and Interest on or before the Maturity Date (the "Cash Repayment Period''). If the Company
does not pay Principal and Interest during the Cash Repayment Period and prior to the Maturity Date, the Company shall lose the
right for cash payment of Principal and Interest and shall pay off the Note upon demand of the Holder any time during the established
period and in accordance with the term outlined herein.

 

1.5. 1.5. Amended Maturity. Should the Company
not pay to the Holder the Principal and Interest on or before the Maturity Date, the Maturity Date shall be automatically modified
to five (5) years after the Issuance Date. The automatic modification shall not trigger a default.

 

1.6. 1.6. Alternative Payment. Should the
Company not pay the Holder the Principal and Interest during the Cash Repayment Period, the Holder will hold the right to receive
payment as outlined herein (the "Alternative Payment Stake"') or ("Buy Out Option").

 

 

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2. SECTION TWO - EVENTS OF DEFAULT

 

2.1. 2.1. "Event of Default", wherever
used herein, means any one of the following events (whatever the reason and whether it shall be voluntary or involuntary or effected
by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative
or governmental body):

 

2.1.1. 2.2. The Company's failure to pay to
the Holder any amount of Principal, Interest or other amounts when and as due and payable under this Note or provide for conversion
as outlined herein;

 

2.1.2. 2.3. The Company or any subsidiary
of the Company shall commence, or there shall be commenced against the Company or any subsidiary of the Company under any applicable
bankruptcy or insolvency laws as now or hereafter in effect or any successor thereto, or the Company or any subsidiary of the Company
commences any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency
or liquidation or similar law of any jurisdiction whether now or hereafter in effect relating to the Company or any subsidiary
of the Company or there is commenced against the Company or any subsidiary of the Company any such bankruptcy, insolvency or other
proceeding which, in all of such cases, remains undismissed for a period of 61 days; or the Company or any subsidiary of the Company
is adjudicated insolvent or bankrupt; or any order of relief or other order approving any such case or proceeding is entered; or
the Company or any subsidiary of the Company suffers any appointment of any custodian, private or court appointed receiver or the
like for it or any substantial part of its property which continues undischarged or unstayed for a period of sixty one (61) days;
or the Company or any subsidiary of the Company makes a general assignment for the benefit of creditors; or the Company or any
subsidiary of the Company shall fail to pay, or shall state that it is unable to pay, or shall be unable to pay, its debts generally
as they become due; or the Company or any subsidiary of the Company shall call a meeting of its creditors with a view to arranging
a composition, adjustment or restructuring of its debts; or the Company or any subsidiary of the Company shall by any act or failure
to act expressly indicate its consent to, approval of or acquiescence in any of the foregoing; or any corporate or other action
is taken by the Company or any subsidiary of the Company for the purpose of effecting any of the foregoing;

 

a. The Company or any subsidiary of the Company
shall default in any of its obligations under any other Note or any mortgage, credit agreement or other facility, indenture agreement,
factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced any indebtedness
for borrowed money or money due under any Long Term leasing or factoring arrangement of the Company or any subsidiary of the Company
in an amount exceeding $100,000, whether such indebtedness now exists or shall hereafter be created and such default shall result
in such indebtedness becoming or being declared due and payable prior to the date on which it would otherwise become due and payable
unless the Company is contesting such obligations in good faith;

 

 

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b. The Company's (A) failure to cure a Conversion
Failure by delivery of the required number of shares of Common Stock within five (5) Business Days after the applicable Conversion
Failure or by notice, written or oral, to any holder of the Notes, including by way of public announcement, at any time, of its
intention not to comply with a request for conversion of any Notes into shares of Common Stock that is tendered in accordance with
the provisions of the Notes;

 

c. The Company shall fail to observe or perform
any other material covenant, agreement or warranty contained in, or otherwise commit any material breach or default of any provision
of this Note.

 

2.2. 2.4. Default Prior to Original Maturity
Date. During the time that any portion of this Note is outstanding, if any Event of Default occurs prior to the original Maturity
Date, the full unpaid Principal amount of this Note, together with interest and other amounts owing in respect thereof, to the
date of acceleration shall become, at the Holder's election, immediately due and payable in cash.

 

2.3. 2.5. Default After the Original Maturity
Date. During the time that any portion of this Note is outstanding after the original Maturity Date, if any Event of Default, full
payment in cash shall be due to the Holder for the full value of the Note on an as converted to common stock basis. The price at
which this conversion will take place will be the average closing price of the common shares during the twenty (20) days preceding
the Default.

 

3. SECTION THREE — ALTERNATIVE PAYMENT
OF THE NOTE

 

4. In the event the Maturity Date is extended
due to non payment during the Cash Repayment Period, the holder shall two options for repayment:

1) An Alternative Payment Stake, or 2) Buy
Out Option.

 

5. 3.1. Alternative Payment Stake. In the
event the Maturity Date is extended due to non payment during the Cash Repayment Period, the Holder will have the option, not-withstanding
the limitations outlined in Section Six, but not the obligation, at anytime after August 4, 2020 to have the Note satisfied by
converting the outstanding value into an eight and one half percent (0.085) fully diluted ownership position in the Company in
an Alternative Payment Stake or a percentage of the outstanding value into a prorated amount of the outstanding value into a prorated
amount in into a prorated eight and one half (8.5%) fully diluted ownership position in the Company. Upon receiving the Alternative
Payment Stake, the Long Term Compensation Noteholder will forgive the accumulated interest amount and this forgiven interest will
not factor into any conversion calculation.

 

5.1. 3.2. Registration. At any time after
June 15, 2020, not-withstanding the limitation in Section 6, the Holder will have the right, but not the obligation, to request
registration of any common shares received or to be received under this Note and the Company shall have an obligation to register
the shares within 90 days of any such notification.

 

5.2. 3.3. Buy Out Option. In the event the
Maturity Date is extended due to non-payment during the Cash Repayment Period, the Holder will have the option, to force repayment
of the Note via exercise of a Buy Out Option. Any time after the Note is outstanding for at least one (1) year, the Holder has
the option to elect repayment of the Note in cash at forty percent (40%) of the value that would have been received if the option
for the Alternative Payment Stake had been exercised. The calculation for the Buy Out Option is as follows: On the date of the
election for the Buy Out Option, the cash value would be total outstanding common shares of the Company on the day of election,
times 8.5% (0.085), times the average closing price of the common shares over the preceding 30 trading days, times 40%. The Company
shall have ninety (90) days to make this payment in cash to the Holder.

 

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5.2.1. SECTION FOUR — ANTI-DILUTION
RIGHTS

 

5.2.2. 4.1. Absolute Anti-Dilution Rights.
Holders of Compensation Notes and Alternative Payments Stakes shall be protected by broadly defined anti-dilution rights. MCTC
shall not, by amendment of its Certificate of Incorporation or Bylaws, or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities, or any other voluntary action, or by any other means, avoid or seek to avoid
the observance or performance of any of the terms to be observed or performed relative to this absolute anti-dilution right and
shall furthermore at all times in good faith assist in the carrying out of all the provisions relating to this absolute anti- dilution
right and in the taking of all such action whether or not requested by the Holder or Conversion Shareholders in order to protect
these rights against dilution or other impairment, consistent with the tenor and purpose of these rights. Such rights shall pertain
to all class of securities on an as-converted to common shares basis.

 

5.2.3. 4.2. Further Anti-Dilution Rights for
Long Term Compensation Notes and Alternative Payment Stakes.

 

5.2.4. 4.2.1 Relative to any Alternative
Payments Stakes. Assuming the underlying shares held were registered by MCTC as outlined in Section 1.6 and converted, holders
of Alternative Payments Stakes shall have unlimited anti-dilution rights on the Alternative Payments Stake for one hundred eight
two (182) days after conversion. Should any dilutive issuance take place during this period, the Company shall issue additional
common shares to the Holder to return the Holder to the same percentage ownership in the Company, less any liquidated or sold
Long Term Compensation shares. If the underlying shares are not registered as outlined in Section 1.6, holders of Alternative
Payments Stakes shall hold anti-dilution rights for a period of three (3) years after receipt of Alternative Payments Stakes.
Should for ANY reason, any holder of Alternative Payments Stakes experience any dilution under the terms outlined above, for any
reason, including the issuance of any convertible or preferred security, or any other securities, of any type, the holder shall
be immediately granted additional shares so as to maintain percentage ownership. Such rights shall pertain to all class of securities
on an as-converted to common shares basis. These rights are absolute and shall be broadly interpreted in favor of the Holder.
Furthermore at all times the Company shall in good faith assist in the carrying out of all the provisions relating to this absolute
anti-dilution right and in the taking of all such action whether or not such actions are requested by the Alternative Payments
Stakeholders.

 

5.2.5. 4.2.2. Relative to Long Term Compensation
Notes. Holders of Long Term Compensation Notes shall have unlimited anti-dilution rights for a period of five (5) years from the
date of the Notes. These rights are absolute and shall be broadly interpreted in favor of the DocuSign Envelope ID: CC4701D2-B4CE-4F81-BCC6-0908F6B01524

 

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holder of the Long Term Compensation Notes.
Furthermore, at all times the Company shall in good faith assist in the carrying out of all the provisions relating to this absolute
anti- dilution right and in the taking of all such action whether or not such actions were requested by Long Term Compensation
Note holders.

 

5.2.6. SECTION FIVE - CONVERSION

 

5.2.7. 5.1. Conversion Mechanics from Alternative
Payment Stakes to Common Shares. The Long Term Compensation shall have limited conversion rights subject to limitations outlined
in Section 6. To convert into shares of Common Stock on any date (a "Conversion Date''), the Holder shall transmit by email
(or otherwise deliver), for receipt on or prior to 11:59 p.m., Los Angeles Time, on such date, a copy of an executed notice of
conversion in the form attached hereto as Exhibit I (the "Conversion Notice") to the Company. On or before the third
Business Day following the date of receipt of a Conversion Notice (the "Share Delivery Date"), the Company shall (X)
if legends are not required to be placed on certificates of Common Stock and provided that the Transfer Agent is participating
in the Depository Trust Company's ("DTC") Fast Automated Securities Transfer Program, credit such aggregate number of
shares of Common Stock to which the Holder shall be entitled to the Holder's or its designee's balance account with DTC through
its Deposit Withdrawal Agent Commission system or (Y) if the Transfer Agent is not participating in the DTC Fast Automated Securities
Transfer Program, issue and deliver to the address as specified in the Conversion Notice, a certificate, registered in the name
of the Holder or its designee, for the number of shares of Common Stock to which the Holder shall be entitled which certificates
shall not bear any restrictive legends unless required pursuant to rules and regulations of the Commission. If this Note is physically
surrendered for conversion and the outstanding Principal of this Note is greater than the Principal portion of the Conversion Amount
being converted, then the Company shall as soon as practicable and in no event later than three (3) Business Days after receipt
of this Note and at its own expense, issue and deliver to the holder a new Note representing the outstanding Principal not converted.
The Person or Persons entitled to receive the shares of Common Stock issuable upon a conversion of this Note shall be treated for
all purposes as the record holder or holders of such shares of Common Stock upon the transmission of a Conversion Notice.

 

5.2.8. 5.2. Company's Failure to Timely Convert.
If within five (5) Trading Days after the Company's receipt of a Conversion Notice the Company shall fail to issue and deliver
a certificate to the Holder or credit the Holder's balance account with DTC for the number of shares of Common Stock to which the
Holder is entitled upon such holder's conversion of any Conversion Amount (a "Conversion Failure"), and if on or after
such Trading Day the Holder purchases (in an open market transaction or otherwise) Common Stock to deliver in satisfaction of a
sale by the Holder of Common Stock issuable upon such conversion that the Holder anticipated receiving from the Company then the
Company shall, within five (5) Business Days after the Holder's request and in the Holder's discretion, the Company shall be placed
in Default of the Note and full payment in cash shall be due to the Holder for the full value of the Note on an as converted to
common stock basis. The price at which this conversion will take place will be the average closing price of the common shares during
the 20 days preceding the Default.

 

5.2.9. 5.3. Book-Entry. Notwithstanding anything
to the contrary set forth herein, upon conversion of any portion of this Note in accordance with the terms hereof, the Holder shall
not be required to physically surrender this Note to the Company unless (A) the full Principal amount and all accrued and unpaid
Interest represented by this Note is being converted or (B) the Holder has provided the Company with prior written notice (which
notice may be included in a Conversion Notice) requesting reissuance of this Note upon physical surrender of this Note. The Holder
and the Company shall maintain records showing the Principal and Interest converted and the dates of such conversions or shall
use such other method, reasonably satisfactory to the Holder and the Company, so as not to require physical surrender of this Note
upon conversion.

 

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5.3. SECTION SIX —- LIMITS TO CONVERSION
AND SALES OF ALTERNATIVE PAYMENTS STAKE

 

5.3.1. 6.1. Beneficial Ownership. The Holder
shall not have the right to convert any portion of this Note hereunder to the extent that after giving effect to such conversion,
the Holder, together with any affiliate thereof, would beneficially own (as determined in accordance with Section 13(d) of the
Exchange Act and the rules promulgated thereunder) in excess of 9.99% of the number of shares of Common Stock outstanding immediately
after giving effect to such conversion. Since the Holder will not be obligated to report to the Company the number of shares of
Common Stock it may hold at the time of a conversion hereunder, unless the conversion at issue would result in the issuance of
shares of Common Stock in excess of 9.99% of the then outstanding shares of Common Stock without regard to any other shares which
may be beneficially owned by the Holder or an affiliate thereof, the Holder shall have the authority and obligation to determine
whether the restriction contained in this Section will limit any particular conversion hereunder and to the extent that the Holder
determines that the limitation contained in this Section applies, the determination of which portion of the principal amount of
this Note is convertible shall be the responsibility and obligation of the Holder. If the Holder has delivered a Conversion Notice
for a principal amount of this Note that, without regard to any other shares that the Holder or its affiliates may beneficially
own, would result in the issuance in excess of the permitted amount hereunder, the Company shall notify the Holder of this fact
and shall honor the conversion for the maximum principal amount permitted to be converted on such Conversion Date and, any principal
amount tendered for conversion in excess of the permitted amount hereunder shall remain outstanding under this Note. The provisions
of this Section may be waived by a Holder (but only as to itself and not to any other Holder) upon not less than 65 days prior
notice to the Company. Other Holders shall be unaffected by any such waiver. To clarify, unless the Conversion Notice requests
a number of shares of Common Stock in excess of 9.99% of the outstanding number of shares of Common Stock, the Company may follow
the instructions of Holder contained in the Conversion Notice without liability.

 

5.3.2. 6.2. Other Conversion Limitations.
Conversions shall not be allowed should such a conversion (i) violate any provision of the charter, bylaws or other organizational
or constitutional documents, (ii) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling,
charge or other restriction of any Governmental Authority to which the holder is subject, (iii) conflict with, result in a breach
of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify or
cancel or require any notice under any agreement, contract, lease, license, instrument or other arrangement to which the holder
is a party or by which it is bound or to which any of its assets are subject.

 

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5.3.3. SECTION SEVEN OTHER PROVISIONS

 

5.4. 7.1. Security Interest. Security Interest/Waiver
of Automatic Stay. This Note is secured by a security interest granted to the Holder pursuant to a Security Agreement, as delivered
by the Company to Holder. The Company acknowledges and agrees that should a proceeding under any bankruptcy or insolvency law
be commenced by or against the Company, or if any of the Collateral (as defined in the Security Agreement) should become the subject
of any bankruptcy or insolvency proceeding, then the Holder should be entitled to, among other relief to which the Holder may
be entitled under the Transaction Documents and any other agreement to which the Company and Holder are parties and/or applicable
law, an order from the court granting immediate relief from the automatic stay pursuant to 11 U.S.C. Section 362 to permit the
Holder to exercise all of its rights and remedies pursuant to the Loan Documents and/or applicable law. THE COMPANY EXPRESSLY
WAIVES THE BENEFIT OF THE AUTOMATIC STAY IMPOSED BY 11 U.S.C. SECTION 362. FURTHERMORE, THE COMPANY EXPRESSLY ACKNOWLEDGES AND
AGREES THAT NEITHER 11 U.S.C. SECTION 362 NOR ANY OTHER SECTION OF THE BANKRUPTCY CODE OR OTHER STATUTE OR RULE (INCLUDING, WITHOUT
LIMITATION, 11 U.S.C. SECTION 105) SHALL STAY, INTERDICT, CONDITION, REDUCE OR INHIBIT IN ANY WAY THE ABILITY OF THE HOLDER TO
ENFORCE ANY OF ITS RIGHTS AND REMEDIES UNDER THE LOAN DOCUMENTS AND/OR APPLICABLE LAW. The Company hereby consents to any motion
for relief from stay that may be filed by the Holder in any bankruptcy or insolvency proceeding initiated by or against the Company
and, further, agrees not to file any opposition to any motion for relief from stay filed by the Holder. The Company represents,
acknowledges and agrees that this provision is a specific and material aspect of the Loan Documents, and that the Holder would
not agree to the terms of the Loan Documents if this waiver were not a part of this Note. The Company further represents, acknowledges
and agrees that this waiver is knowingly, intelligently and voluntarily made, that neither the Holder nor any person acting on
behalf of the Holder has made any representations to induce this waiver, that the Company has been represented (or has had the
opportunity to he represented) in the signing of this Note and the Loan Documents and in the making of this waiver by independent
legal counsel selected by the Company and that the Company has discussed this waiver with counsel.

 

5.5.7.2. Common Share Reserve. The Company
shall at all times reserve and keep available out of its authorized Common Stock the full number of shares of Common Stock issuable
upon conversion of all outstanding amounts under this Note; and within five (5) Business Days following the receipt by the Company
of a Holder's notice that such minimum number of Underlying Shares is not so reserved, the Company shall promptly reserve a sufficient
number of shares of Common Stock to comply with such requirement.

 

5.5.1. a. The Company covenants that it will
at all times reserve and keep available out of its authorized and unissued shares of Common Stock solely for the purpose of issuance
upon conversion of this Note and payment of interest on this Note, each as herein provided, free from preemptive rights or any
other actual contingent purchase rights of persons other than the Holder, not less than such number of shares of the Common Stock
as shall (subject to any additional requirements of the Company as to reservation of such shares set forth in this Note or in the
Transaction Documents) be issuable (taking into account the adjustments and restrictions set forth herein) upon the conversion
of the outstanding principal amount of this Note and payment of interest hereunder. The Company covenants that all shares of Common
Stock that shall be so issuable shall, upon issue, be duly and validly authorized, issued and fully paid.

 

    	7  

    	 

    

 

 

5.5.2. b. Nothing herein shall limit a Holder's
right to pursue actual damages or declare an Event of Default pursuant herein for the Company's failure to deliver certificates
representing shares of Common Stock upon conversion within the period specified herein and such Holder shall have the right to
pursue all remedies available to it at law or in equity including, without limitation, a decree of specific performance and/or
injunctive relief, in each case without the need to post a bond or provide other security. The exercise of any such rights shall
not prohibit the Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable law.

 

6. 7.3. Change of Control Conversion. In addition
to and not in substitution for any other rights hereunder, prior to the consummation of any Change of Control Transaction or a
Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets
with respect to or in exchange for shares of Common Stock (a "Corporate Event"), the Company shall make appropriate provision
to insure that the Holder will thereafter have the right to receive upon a conversion of this Note, at the Holder's option, (i)
in addition to the shares of Common Stock receivable upon such conversion, as adjusted for the terms of the Corporate Event, such
securities or other assets to which the Holder would have been entitled with respect to such shares of Common Stock had such shares
of Common Stock been held by the Holder upon the consummation of such Corporate Event (without taking into account any limitations
or restrictions on the convertibility of this Note) or (11) in lieu of the shares of Common Stock otherwise receivable upon such
conversion, such securities or other assets received by the Holder of shares of Common Stock in connection with the consummation
of such Corporate Event in such amounts as the Holder would have been entitled to receive had this Note initially been issued with
conversion rights for the form of such consideration (as opposed to shares of Common Stock) at a conversion rate for such consideration
commensurate with the Conversion Rate. The provisions of this Section shall apply similarly and equally to successive Corporate
Events and shall be applied without regard to any limitations on the conversion or redemption of this Note.

 

7. SECTION EIGHT REISSUANCE OF THIS NOTE

 

7.1. 8.1. Transfer. This Note is fully transferable.
If this Note is to be transferred, the Holder shall surrender this Note to the Company, whereupon the Company will forthwith issue
and deliver upon the order of the Holder a new Note (in accordance with Section 6(d)), registered in the name of the registered
transferee or assignee, representing the outstanding Principal being transferred by the Holder and, if less then the entire outstanding
Principal is being transferred, a new Note (in accordance with Section 6(d)) to the Holder representing the outstanding Principal
not being transferred. The Holder and any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions
of Section 4(b)(iii) following conversion or redemption of any portion of this Note, the outstanding Principal represented by this
Note may be less than the Principal stated on the face of this Note.

 

7.2. 8.2. Lost, Stolen or Mutilated Note.
Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of
this Note, and, in the case of loss, theft or destruction, of an indemnification undertaking by the Holder to the Company in customary
form and, in the case of mutilation, upon surrender and cancellation of this Note, the Company shall execute and deliver to the
Holder a new Note (in accordance with Section 6(d)) representing the outstanding Principal.

 

    	8  

    	 

    

 

 

7.3. 8.3. Issuance of New Notes. Whenever
the Company is required to issue a new Note pursuant to the terms of this Note, such new Note (1) shall be of like tenor with this
Note, (ii) shall represent, as indicated on the face of such new Note, the Principal remaining outstanding (or in the case of a
new Note being issued pursuant to Section 6(a) or Section 6(c), the Principal designated by the Holder which, when added to the
principal represented by the other new Notes issued in connection with such issuance, does not exceed the Principal remaining outstanding
under this Note immediately prior to such issuance of new Notes), (iii) shall have an issuance date, as indicated on the face of
such new Note, which is the same as the Issuance Date of this Note, (iv) shall have the same rights and conditions as this Note,
and (v) shall represent accrued and unpaid Interest from the Issuance Date.

 

9. SECTION NINE OTHER PROVISIONS

 

9. 9.1 NOTICES. Any notices, consents, waivers
or other communications required or permitted to be given under the terms hereof must be in writing by letter and email and will
be deemed to have been delivered: upon the later of (A) either (i) receipt, when delivered personally or (ii) one (1) Business
Day after deposit with an overnight courier service with next day delivery specified, in each case, properly addressed to the party
to receive the same and (B) receipt, when sent by electronic mail or at such other address and/or electronic email address and/or
to the attention of such other person as the recipient party has specified by written notice given to each other party 3 Business
Days prior to the effectiveness of such change. Written confirmation of receipt (i) given by the recipient of such notice, consent,
waiver or other communication, (ii) mechanically or electronically generated by the sender's computer containing the time, date,
recipient's electronic mail address and the text of such electronic mail or (iii) provided by a nationally recognized overnight
delivery service, shall be rebuttable evidence of personal service, receipt by electronic mail or receipt from a nationally recognized
overnight delivery service in accordance with clause (i), (ii) or (iii) above, respectively.

 

a) Except as expressly provided herein, no
provision of this Note shall alter or impair the obligations of the Company, which are absolute and unconditional, to pay the principal
of, interest and other charges (if any), or convert to common shares as outlined herein, on, this Note at the time, place, and
rate, and in the coin or currency, herein prescribed. This Note is a direct obligation of the Company.

 

b) This Note shall not entitle the Holder
to any of the rights of a stockholder of the Company, including without limitation, the right to vote, to receive dividends and
other distributions, or to receive any notice of, or to attend, meetings of stockholders or any other proceedings of the Company,
unless and to the extent converted into shares of Common Stock in accordance with the terms hereof.

 

C) No indebtedness of the Company is senior
to this Note in right of payment, whether with respect to interest, damages or upon liquidation or dissolution or otherwise. Without
the Holder's consent, the Company will not and will not permit any of their subsidiaries to, directly or indirectly, enter into,
create, incur, assume or suffer to exist any indebtedness of any kind, on or with respect to any of its property or assets now
owned or hereafter acquired or any interest therein or any income or profits there from that is senior in any respect to the obligations
of the Company under this Note.

 

    	9  

    	 

    

 

 

d) TO INDUCE HOLDER TO PURCHASE THIS CONVERTIBLE
NOTE, THE COMPANY IRREVOCABLY AGREES THAT ANY DISPUTE ARISING UNDER, RELATING TO, OR IN CONNECTION WITH, DIRECTLY OR INDIRECTLY,
THIS AGREEMENT OR RELATED TO ANY MATTER WHICH IS THE SUBJECT OF OR INCIDENTAL TO THIS AGREEMENT ANY OTHER TRANSACTION DOCUMENT
(WHETHER OR NOT SUCH CLAIM IS BASED UPON BREACH OF CONTRACT OR TORT) SHALL BE SUBJECT TO THE EXCLUSIVE JURISDICTION AND VENUE OF
THE STATE COURTS SITTING IN UNION COUNTY, NEW JERSEY AND THE FEDERAL COURTS SITTING IN NEWARK, NEW JERSEY; PROVIDED, HOWEVER, HOLDER
MAY, AT ITS SOLE OPTION, ELECT TO BRING ANY ACTION IN ANY OTHER JURISDICTION. THIS PROVISION IS INTENDED TO BE A "MANDATORY"
FORUM SELECTION CLAUSE AND GOVERNED BY AND INTERPRETED CONSISTENT WITH NEW JERSEY LAW. THE COMPANY HEREBY CONSENTS TO THE EXCLUSIVE
JURISDICTION AND VENUE OF ANY STATE OR FEDERAL COURT HAVING ITS SITUS IN SAID COUNTY, AND WAIVES ANY OBJECTION BASED ON FORUM NON
CONVENIENS. THE COMPANY HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND CONSENT THAT ALL SUCH SERVICE OF PROCESS MAY
BE MADE BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO THE COMPANY AS SET FORTH HEREIN IN THE MANNER PROVIDED BY APPLICABLE
STATUTE, LAW, RULE OF COURT OR OTHERWISE.

 

e) If the Company fails to materially comply
with the material terms of this Note, then, unless otherwise determined by the Court, the Company shall reimburse the Holder promptly
for all fees, costs and expenses, including, without limitation, reasonable attorneys' fees and expenses incurred by the Holder
in any action in connection with this Note, including, without limitation, those incurred: (i) during any workout, attempted workout,
and/or in connection with the rendering of legal advice as to the Holder's rights, remedies and obligations, (ii) collecting any
sums which become due to the Holder, (iii) defending or prosecuting any proceeding or any counterclaim to any proceeding or appeal;
or (iv) the protection, preservation or enforcement of any rights or remedies of the Holder

 

f) Any waiver by the Holder of a breach of
any provision of this Note shall not operate as or be construed to be a waiver of any other breach of such provision or of any
breach of any other provision of this Note. The failure of the Holder to insist upon strict adherence to any term of this Note
on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence
to that term or any other term of this Note. Any waiver must be in writing.

 

g) If any provision of this Note is invalid,
illegal or unenforceable, the balance of this Note shall remain in effect, and if any provision is inapplicable to any person or
circumstance, it shall nevertheless remain applicable to all other persons and circumstances. If it shall be found that any interest
or other amount deemed interest due hereunder shall violate applicable laws governing usury, the applicable rate of interest due
hereunder shall automatically be lowered to equal the maximum permitted rate of interest. The Company covenants (to the extent
that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit
or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying all or any
portion of the principal of or interest on this Note as contemplated herein, wherever enacted, now or at any time hereafter in
force, or which may affect the covenants or the performance of this indenture, and the Company (to the extent it may lawfully do
so) hereby expressly waives all benefits or advantage of any such law, and covenants that it will not, by resort to any such law,
hinder, delay or impeded the execution of any power herein granted to the Holder, but will suffer and permit the execution of every
such as though no such law has been enacted.

 

    	10  

    	 

    

 

 

h) Whenever any payment or other obligation
hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day. IN WITNESS
WHEREOF, the Company has caused this Seller's Long Term Compensation Note to be duly executed by a duly authorized officer as of
the date set forth above.

 

MCTC HOLDINGS, INC.

 

Name: Arman Tabatabaei

 

Title: CEO

 

Name: Robert Hymers

 

Title: CFO

 

 

    	11  

    	 

    

EXHIBIT I CONVERSION NOTICE

 

(To be executed by the Holder in order to
Convert the Note)

 

TO: MCTC HOLDINGS, INC. Via Email:

 

The undersigned hereby irrevocably elects
to convert a portion of the outstanding Note into Alternative Conversion Stakes as outlined in the Note Agreement.

 

Conversion Date:

 

Principal Amount:

 

Please issue the shares of Common Stock in
the following name and to the following address:

 

Issue to:

 

Authorized Signature:

 

Name: Title:

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