Document:

Exhibit 4.1

 

CONVERTIBLE
Promissory Note And Security Agreement

 

	$5,000,000.00	
        As of December 16, 2020

        

 

FOR VALUE RECEIVED,
the undersigned, Medicine Man Technologies, Inc., a Nevada corporation doing business as Schwazze (hereinafter referred to as "Maker"),
hereby promises to pay to the order of Dye Capital & Company, LLC (hereinafter referred to as "Payee"; Payee
and any subsequent holder hereof being hereinafter referred to as "Holder"), on the Maturity Date (as hereinafter
defined), without grace, at such place as Holder may designate to Maker in writing from time to time, the principal amount of FIVE
MILLION AND NO/100 DOLLARS ($5,000,000.00), together with interest on so much thereof as is from time to time outstanding and unpaid,
from the date hereof, at the rate hereinafter set forth, in lawful money of the United States of America, which shall, at the time
of payment, be legal tender in payment of all debts and dues, public and private, all upon the terms and conditions specified below.

 

ARTICLE
I

PAYMENT TERMS, CONVERSION AND CONDITIONS

 

1.01       
Accrual and Calculation of Interest. Commencing the date hereof, interest shall accrue at the rate of twelve percent
(12.0%) per annum. Interest shall be computed hereunder based on a 360-day year, and shall accrue for each and every day (365 days
per year, 366 days per leap year) on which any indebtedness remains outstanding hereunder. In computing the number of days during
which interest accrues, the day on which funds are initially advanced shall be included regardless of the time of day such advance
is made, and the day on which funds are repaid shall be included unless repayment is credited prior to close of business. Payment
in federal funds immediately available in the place designated for payment and received by Holder prior to 2:00 p.m. local time
at said place of payment shall be credited prior to close of business, while other payments may, at the option of Holder, not be
credited until immediately available to Holder in federal funds in the place designated for payment prior to 2:00 p.m. local time
at said place of payment on a day that Holder is open for business. Fifty percent (50%) of any interest payable hereunder shall
automatically accrue and be capitalized to the principal amount of this Promissory Note and Security Agreement (“PIK Interest”).
All PIK Interest that has accrued shall be payable in cash on the Maturity Date as part of the repayment of the principal amount
of this Promissory Note and Security Agreement.

 

1.02       
Payment of Principal and Interest. For so long as this Promissory Note and Security Agreement has not fully converted
pursuant to Section 1.05 hereof, on each of the first eleven Monthly Payment Dates (as defined below), Maker shall make payments
of interest due hereunder (but no principal repayments and excluding PIK Interest), which will be calculated by Maker based upon
the daily outstanding principal loan balance hereunder (including PIK Interest) for the immediately preceding Monthly Period (as
defined below). Thereafter, unless converted into securities of Maker pursuant to Section 1.05 hereof, the entire principal amount
of this Promissory Note and Security Agreement, as well as all accrued and unpaid interest hereunder, including all PIK Interest,
shall be repaid Maker on the twelfth Monthly Payment Date (the “Maturity Date”). For purposes hereof, “Monthly
Payment Date” means the last Business Day of each calendar month, commencing with the month in which the date of this
Promissory Note and Security Agreement occurred. For purposes hereof, “Monthly Period” means a calendar month.
For purpose hereof, “Business Day” means any day excluding Saturday, Sunday and any day which is a legal holiday
under the laws of the State of New York, or is a day on which banking institutions located in the State of New York are closed.

 

Both principal and
interest shall be payable without deduction for or on account of any present or future taxes, duties or other charges levied or
imposed on this Promissory Note and Security Agreement, the proceeds hereof or on the ownership hereof by any government or any
instrumentality, authority or political subdivision thereof. The Maker agrees, upon the request of Holder, to pay all such taxes
(other than taxes on or measured by net income of Holder), duties and other charges in addition to the principal and interest evidenced
by this Promissory Note and Security Agreement.

 

 

 

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All payments and prepayments
under this Promissory Note and Security Agreement shall first be applied to the extent thereof to all accrued but unpaid interest
on the outstanding principal balance, then to costs and expenses incurred by Holder in seeking enforcement of this Promissory Note
and Security Agreement, including reasonable attorneys' fees, with the remainder, if any, to be applied to the outstanding principal
due.

 

This Promissory Note
and Security Agreement is the "Promissory Note" referred to in that certain Secured Convertible Note Purchase
Agreement, dated as of December __, 2020, by and between Maker and Holder (the "Purchase Agreement") and is subject
to the terms and conditions of such Purchase Agreement.

 

1.03        
Prepayment. Subject to Holder’s option to convert pursuant to Section 1.05, the principal amount evidenced by
this Promissory Note and Security Agreement may be prepaid in whole or in part, without penalty or premium and without the consent
of Holder, at any time and from time to time by providing thirty (30) days of prior written notice (a “Prepayment Notice”).
All prepayments in whole or in part of principal on this Promissory Note and Security Agreement shall include interest accrued
but unpaid through the date of prepayment on the principal amount being prepaid.

 

1.04        
Default and Event of Default. 

 

It is further expressly
agreed that the following events shall constitute an "Event of Default" hereunder: (a) failure of Maker to pay
Holder (i) any principal on the Maturity Date or (ii) any accrued interest on each Monthly Payment Date or other payment obligation
as stipulated herein and such failure to pay shall remain unremedied for two (2) Business Days thereafter; (b) breach (each, a
"Default") by Maker of any other warranty, representation, covenant, term or condition of the Purchase Agreement
or this Promissory Note and Security Agreement and the same has not been cured by Maker within thirty (30) days after written notice
of such Default is provided by Holder to Maker; (c) a default under any loan or instrument in excess of $500,000, whether now existing
or hereafter committed or made, secured by the Collateral (as defined in Section 2.01 below), which default shall continue
after the applicable grace period, if any, specified in such loan or instrument, which would give rise to a right to accelerate
the indebtedness that is the subject of such loan or instrument; (d) the filing by Maker of a voluntary petition for relief under
Title 11 of the United States Code, as amended (the "United States Bankruptcy Code"), or a voluntary petition
or answer seeking reorganization, arrangement or readjustments of debts, or any other relief under the United States Bankruptcy
Code or any other insolvency act or law, state, federal or other governmental, now or hereafter existing, or any agreement by Maker
indicating consent to, or approval or acquiescence in, any such petition or proceeding; (e) the application by Maker for, or the
consent or acquiescence of Maker in the appointment of, a receiver or trustee for all or a substantial part of its property; (f)
the making by Maker of a general assignment for the benefit of creditors; (g) the inability of Maker, or the admission of Maker
in writing of its inability, to pay its debts as they mature; (h) the filing of an involuntary petition against Maker seeking reorganization,
arrangement or readjustment of its debts or for any other relief under the United States Bankruptcy Code or any other insolvency
act or law, state, federal or other governmental, now or hereafter existing, or the involuntary appointment of a receiver or trustee
of Maker for all or a substantial part of its property or assets, or the issuance of a warrant of attachment or execution of similar
process against a substantial part of the property of Maker and the continuance of such for thirty (30) days undismissed or undischarged;
(i) the dissolution of Maker (whether voluntarily or otherwise) or the merger, consolidation or reorganization of Maker as to which
Maker is not the surviving entity without the prior written consent of Holder, such consent not to be unreasonably withheld, conditioned
or delayed; (j) the sale, transfer or conveyance of all or a substantial part of the Collateral, other than as permitted by Section
2.03(b) below; (k) the entry of a judgment against Maker which would reasonably be expected to have a material and adverse effect
on Maker's ability to pay the Obligations which is not satisfied or payment thereof secured by a bond, letter of credit or similar
collateral acceptable to Holder, in Holder's sole discretion, within thirty (30) days after the rendition thereof; or (l) a Change
of Control (as defined below) occurs.

 

Commencing on the date
of any incurrence and during the continuance of any Event of Default hereunder, regardless of whether or not there has been an
acceleration of the indebtedness evidenced hereby, interest shall accrue on the outstanding principal balance of this Promissory
Note and Security Agreement at the interest rate that would be in effect hereunder absent such Default or Event of Default and,
in addition thereto, a default charge shall accrue at the rate of eight percent (8%) per annum on the daily outstanding principal
balance of this Promissory Note and Security Agreement, such default charge being due and payable together with and in the same
manner as interest as hereinabove provided, except that, if not sooner due and payable, all such interest and default charges shall
be paid at the time of and as a condition precedent to the curing of any such Default should this Promissory Note and Security
Agreement or Holder, at its sole option, allow such Default to be cured.

 

 

 

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Upon the occurrence
and during the continuance of any Event of Default hereunder (other than an Event of Default described in clause (d), (e), (f),
(g) or (h) of the definition thereof), any and all of the indebtedness evidenced by this Promissory Note and Security Agreement
(including the principal and all unpaid interest accrued thereon) may be immediately declared due and payable and thereupon shall
become immediately due and payable in full, and Holder shall have all of the rights and remedies described herein and may exercise
any or all of such remedies in its sole discretion. Upon the occurrence and during the continuance of an Event of Default described
in clause (d), (e), (f), (g) or (h) of the definition thereof, any and all of the indebtedness evidenced by this Promissory Note
and Security Agreement (including the principal and all unpaid interest accrued thereon), without demand or notice of any kind,
shall immediately become due and payable in full, and Holder shall have all of the rights and remedies described herein and may
exercise any or all of such remedies in its sole discretion. Further, Maker hereby agrees to pay all reasonable and actual out-of-pocket
costs and expenses, including reasonable attorneys' fees, incurred by Holder following an Event of Default in the collection of
the indebtedness evidenced by this Promissory Note and Security Agreement or in enforcing any of the rights, powers, remedies and
privileges of Holder hereunder, whether prior to the commencement of judicial proceedings and/or thereafter at the trial and/or
appellate level and/or in pre- and post-judgment or bankruptcy proceedings.

 

For purposes hereof,
“Change of Control” means (a) the failure of Maker to own and control 100% of the Equity Interests of any of
its subsidiaries, or (b) the occurrence of any event (whether in one or more related transactions) while this Promissory Note and
Security Agreement is outstanding that results in a transfer of control of Maker to a “person” or “group”
(as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934), but excluding (i) any employee benefit
plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or
administrator of any such plan and (ii) underwriters in the course of their distribution of voting stock in an underwritten registered
public offering provided such underwriters shall not hold such stock for longer than five Business Days) who is not in control
of Maker as of the date hereof. For purposes of this definition, “control of Maker” means the power, direct
or indirect, to vote more than 50% of the Equity Interests having ordinary voting power for the election of directors of Maker.
For purposes hereof, “Equity Interest” means, with respect to any Person, all shares, interests, participations
or other equivalents (however designated, whether voting or non-voting) of such Person’s capital including capital stock,
partnership, membership or other equity interests in such Person), whether or not certificated.

 

1.05        
Conversion.

 

(a)           
Voluntary Conversion upon a Qualified Financing or Prepayment. If a Qualified Financing occurs on or prior to the
Maturity Date or Holder receives a Prepayment Notice, then all (but not less than all) of the outstanding principal amount of this
Promissory Note and Security Agreement and all accrued and unpaid interest on this Promissory Note and Security Agreement shall
be convertible at the sole option of Holder into either (i) the securities issued in such Qualified Financing (“Qualified
Securities”), or (ii) shares of Maker’s Series A Cumulative Convertible Preferred Stock, par value $0.001 per share
(“Preferred Stock”), at the Conversion Price (as defined below).

 

For purposes hereof,
“Qualified Financing” means a transaction or series of transactions pursuant to which the Company issues and
sells shares of its capital stock or securities convertible into shares of its capital stock for aggregate gross proceeds of at
least $10,000,000 (excluding all proceeds from Holder or its affiliates and all proceeds from the incurrence of indebtedness that
is converted into such securities, or otherwise cancelled in consideration for the issuance of such securities) with the principal
purpose of raising capital.

 

(b)            Upon
any conversion of this Promissory Note and Security Agreement into Maker’s securities in accordance with Section 1.05, Holder
shall surrender this Promissory Note and Security Agreement (or a notice to the effect that the original Promissory Note and Security
Agreement has been lost, stolen or destroyed and an agreement acceptable to Maker whereby Holder agrees to indemnify Maker from
any loss incurred by it in connection with this Promissory Note and Security Agreement) and Holder shall give written notice to
Maker at its principal corporate office of the election to convert the same pursuant to Section 1.05(a).). Upon such conversion,
Holder and Maker hereby agree to execute and deliver the other transaction documents entered into by the other investors participating
in the Qualified Financing or the issuance of the Preferred Stock, as applicable, including any purchase agreement, investor rights
agreement and other ancillary agreements, as applicable, with customary representations and warranties and transfer restrictions.
Holder shall be entitled to all consideration offered to any investor in the Qualified Financing or the issuance of Preferred
Stock equitably adjusted to the extent any such consideration is based on the amount invested and shall receive the rights under
any applicable agreement most favorable to any investor if investors are not treated identically. Maker shall, as soon as practicable
after the applicable conversion event, issue and deliver to Holder a certificate or certificates for the securities to which Holder
shall be entitled upon such conversion, including a check payable to Holder for any cash amounts payable as described in Section
1.05(c). Any conversion of this Promissory Note and Security Agreement shall be deemed to have been made upon the satisfaction
of all of the conditions set forth in this Section and on and after such date the persons entitled to receive the securities issuable
upon such conversion shall be treated for all purposes as the record holder of such securities.

 

 

 

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(c)            No
fractional securities shall be issued upon conversion of this Promissory Note and Security Agreement. In lieu of Maker issuing
any fractional securities to Maker upon the conversion of this Promissory Note and Security Agreement, the Maker shall pay to
Holder an amount equal to the product obtained by multiplying the applicable Conversion Price or purchase price by the fraction
of a security not issued pursuant to the previous sentence. In addition, to the extent not converted into securities, Maker shall
pay to Holder any interest accrued on the amount converted and on the amount to be paid by Maker pursuant to the previous sentence.
Upon conversion of this Promissory Note and Security Agreement in full and the payment of the amounts specified in this paragraph,
Maker shall be forever released from all its obligations and liabilities under this Promissory Note and Security Agreement and
this Promissory Note and Security Agreement shall be deemed of no further force or effect, whether or not the original of this
Promissory Note and Security Agreement has been delivered to Maker for cancellation.

 

(d)            For purposes
hereof, “Conversion Price” means the price per share equal to the price per share paid by the other investors
in the Qualified Financing or the issuance of the Preferred Stock, as applicable.

 

ARTICLE
II

SECURITY AGREEMENT

 

2.01        
Security. As security for the due and punctual payment of all amounts due or to become due and the performance of all
obligations of Maker under this Promissory Note and Security Agreement and all extensions, renewals and amendments of any of the
foregoing (the "Obligations"), Maker hereby pledges, transfers, assigns, conveys and grants to Holder a continuing
first-priority lien upon and security interest in and to all of Maker's now owned or hereafter acquired, created or arising Property
identified in Exhibit A attached hereto, and in each case regardless of where such Property may be located and whether such
Property may be in the possession of Maker, Holder or a third party (the "Collateral"); provided, that
solely with respect to Starbuds Assets (as defined below), Maker’s security interest shall be second priority to Starbuds
(as defined below)). For purposes hereof, the term "Property" shall mean and include any right, title or interest
in or to property of any kind whatsoever, whether real, personal or mixed, and whether tangible or intangible, including the Collateral.

 

2.02        
Affirmative Covenants. Maker covenants and agrees that it shall, until the Obligations (other than contingent indemnification
obligations) have been paid in full:

 

(a)           
Maintain all "equipment" (as defined in Exhibit A) in good repair and condition, normal wear and tear and
casualty losses excepted, and shall provide all maintenance and service and make all repairs and replacements as necessary for
such purposes. All equipment, and accessories, parts and replacements that are added to or become attached to the equipment, shall
immediately without further action be deemed incorporated in the "equipment" and subject to the security interest granted
to Holder in this Promissory Note and Security Agreement.

 

(b)           
At Maker's own expense, obtain and maintain all-risk insurance covering the "inventory" and "equipment"
(as defined in Exhibit A) for its full replacement value. The insurance shall be in form and substance, and with companies,
reasonably satisfactory to Holder.

 

(c)           
Be privileged, prior to the occurrence and during the continuance of an Event of Default, to collect "accounts,"
"chattel paper," "instruments," "general intangibles," "investment property" and "documents"
(as defined in Exhibit A and collectively referred to herein as "Collection Collateral"), and until otherwise
notified by Holder upon or after the occurrence and during the continuance of an Event of Default, Maker shall at Maker's sole
cost and expense maintain and administer at all times current and complete books and records of the Collection Collateral.

 

 

 

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(d)           
Give Holder prompt (but in any event, within three (3) Business Days) written notice of the commencement of, or the threat
by any person to commence, any action (including self-help) or proceeding for the purpose of enforcing or protecting any actual
or alleged lien upon or security interest in any of the Collateral, and including any foreclosure, repossession, attachment, execution
or other process regarding any of the Collateral.

 

(e)           
Give Holder prompt (but in any event, within three (3) Business Days) written notice of any Default.

 

(f)            
At any time and from time to time, at the expense of Maker, promptly execute and deliver all further instruments and documents,
and take all further action, that may be necessary or desirable, or that Holder may reasonably request, in order to perfect and
protect the security interest granted or purported to be granted hereby or to enable Holder to exercise and enforce its rights
and remedies hereunder with respect to any Collateral.

 

(g)           
Comply with all applicable laws to the extent necessary to ensure that non-compliance with such applicable laws would not,
individually or in the aggregate, reasonably be expected to have a material adverse effect on Maker’s ability to pay the
Obligations.

 

(h)           
Take all such further actions and execute all such further documents and instruments as Holder may at any time reasonably
determine to be necessary to further carry out and consummate the transactions contemplated by the Purchase Agreement.

 

2.03         
Negative Covenants. Maker hereby covenants that it shall not, until the Obligations (other than contingent indemnification
obligations) have been paid in full:

 

(a)           
Create, incur, assume, or suffer to exist, any indebtedness except for Permitted Indebtedness.

 

For purposes
hereof, “Permitted Indebtedness” means (a) indebtedness of Maker in favor Holder arising hereunder, (b) Starbuds
Debt, (c) indebtedness of Maker under capital leases for equipment or Indebtedness secured by a Lien described in clause (d) of
the defined term “Permitted Liens,” provided such indebtedness does not exceed, at the time it is incurred,
the lesser of the cost or fair market value of the property financed with such indebtedness, (e) indebtedness to trade creditors
incurred in the ordinary course of business, (f) indebtedness in respect of taxes, assessments, governmental charges or levies
and claims for labor, materials and supplies, (g) indebtedness in respect of judgments or awards that have been in force for less
than the applicable period for taking an appeal so long as execution is not levied thereunder or in respect of which Maker or any
of its Subsidiaries shall at the time in good faith be prosecuting an appeal or proceedings for review and in respect of which
a stay of execution shall have been obtained pending such appeal or review, (h) indebtedness of Maker to any of its Subsidiaries,
(i) indebtedness which may be deemed to exist pursuant to any guaranties, performance, surety, statutory, appeal or similar obligations
incurred in the ordinary course of business and (j) other unsecured indebtedness of Maker other than the types listed in (a) through
(i) immediately above, which is subordinated to the Obligations in a manner satisfactory to Holder in an aggregate amount not to
exceed at any time $1,000,000.

 

For purposes
hereof, “Starbuds Debt” means indebtedness of Maker  to the Starbuds Entities (as defined below). For purposes
hereof, “Starbuds Assets” means the stores identified as (i) Colorado Health Consultants, (ii) Starbuds
Aurora, (iii) SB Arapahoe, (iv) Starbuds Commerce City, (v) Starbuds Pueblo, (vi) Starbuds Alameda, (vii) Citi-Med,
(viii) Starbuds Louisville, (ix) KEW, (x) Lucky Ticket, (xi) Starbuds Niwot, (xii) LM MJC, and (xiii) Mountain
View 44th  acquired from (i) Colorado Health Consultants LLC, (ii) Starbuds Aurora LLC, (iii) SB Arapahoe LLC, (iv) Starbuds
Commerce City LLC, (v) Starbuds Pueblo LLC, (vi) Starbuds Alameda LLC, (vii) Citi-Med LLC, (viii) Starbuds
Louisville LLC, (ix) KEW LLC, (x) Lucky Ticket LLC, (xi) Starbuds Niwot LLC, (xii) LM MJC LLC, and (xiii) Mountain
View 44th LLC (each a “Starbuds Entity” and collectively, the “Starbuds Entities”) by
Maker.

 

 

 

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(b)            Without
obtaining the prior written consent of Holder, such consent not to be unreasonably withheld, conditioned or delayed, sell or otherwise
dispose of, or grant any option with respect to, any of the Collateral, other than (i) the sale of "inventory" (as defined
in Exhibit A) in the ordinary course of business, (ii) transfers of "inventory" (as defined in Exhibit A) from Maker
to any of its Subsidiaries, (iii) transfers of cash or cash equivalents from Maker to any of its Subsidiaries to cover cash shortfalls
related to operating expenses at any Subsidiary of Maker, (iv) licensing intellectual property rights in the ordinary course of
business, (v) leasing or subleasing assets in the ordinary course of business, (vi) the disposition of used, obsolete, worn out
or surplus equipment or property in the ordinary course of business, provided, that in the case of this clause (vi), (a) within
ninety (90) days of receipt of the proceeds of any such sale, lease, or other disposition, such proceeds are used or committed
in writing to a supplier to be used to purchase replacement equipment, (vii) dispositions of any property from Maker to any of
its Subsidiaries and (viii) leases or subleases (as lessee or sublessee) or license or sub-license by Maker of any real or personal
property.

 

(c)            Create
or suffer to exist any Lien upon any of the Collateral, whether now owned or hereafter acquired, except Permitted Liens.

 

For purposes
hereof, “Lien” means any interest in property securing an obligation owed to, or a claim by, a person other
than the owner of the property, whether such interest is based on common law, statute or contract. The term “Lien”
shall also include reservations, exceptions, encroachments, easements, rights of way, covenants, conditions, restrictions, leases
and other title exceptions and encumbrances affecting property. For the purpose of this Promissory Note and Security Agreement,
Maker shall be deemed to be the owner of any property which it has acquired or holds subject to a conditional sale agreement or
other arrangement pursuant to which title to the property has been retained by or vested in some other person or entity for security
purposes.

 

For purposes
hereof, “Permitted Liens” means liens created or purported to be created or imposed (a) hereunder in favor of
Holder, (b) in Starbuds Assets (as defined below) in favor of Starbuds Entities (as defined below), (c) in favor of trade creditors
incurred in the ordinary course of business, (d) in respect of guaranties, performance, surety, statutory, appeal or similar obligations
incurred in the ordinary course of business, (e) securing indebtedness upon or in any equipment acquired or held by Maker in the
ordinary course of business to secure the purchase price of such equipment or indebtedness incurred solely for the purpose of financing
the acquisition or lease of such equipment or existing on such equipment at the time of its acquisition, (f) by law for taxes not
yet due or which are being contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate
reserves are being maintained in accordance with US generally accepted accounting principles (“GAAP”), (g) in
respect of judgments or awards, (h) in respect of licenses of patents, trademarks and other intellectual property rights granted
by Maker in the ordinary course of business, (i) that are statutory Liens of landlords, carriers, warehousemen, mechanics, repairers,
materialmen and other Liens imposed by law in the ordinary course of business for amounts not yet due or which are being contested
in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves are being maintained
in accordance with GAAP and (j) that secure indebtedness or other obligations of Maker in an aggregate amount not to exceed at
any time $1,000,000.

 

(d)            (i)
Engage in any business other than the businesses currently engaged in by Maker, as applicable, or reasonably related, ancillary
or incidental thereto; or (ii) without at least thirty (30) days’ prior written notice to Holder, (1) change its jurisdiction
of organization, (2) change its organizational structure or type, (3) change its legal name, or (4) change any organizational number
(if any) assigned by its jurisdiction of organization.

 

(e)            Directly
or indirectly make any Investment (including, without limitation, by the formation of any subsidiary) other than Permitted Investments,
or permit any of its subsidiaries to do so. For purposes hereof, “Investment” means any beneficial ownership interest
in any Person (including stock, partnership interests or other securities), and any loan, advance or capital contribution to any
Person. For purposes hereof, “Permitted Investments” means (a) Investments consisting of cash equivalents, (b) Investments
otherwise approved by Holder in its reasonable discretion (including in his capacity as a director of Maker) in advance of the
making thereof, and (c) the Starbuds Investments. For purposes hereof “Starbuds Investments” means SBUD, LLC.

 

 

 

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(f)             Declare,
pay or make any Restricted Payments unless approved by Holder in its reasonable discretion (including in his capacity as a director
of Maker). For purposes hereof, “Restricted Payments” means (a) any dividend or other distribution, direct or
indirect, on account of any shares of any class of capital stock of Maker now or hereafter outstanding, except any dividend payable
solely in shares of that class of capital stock to the holders of that class, (b) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect, of any shares of any class of capital stock of Maker now
or hereafter outstanding, and (c) any payment (whether in cash, securities or other property) made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire shares of any class of capital stock of Maker now or
hereafter outstanding.

 

(g)            Make
or permit any amendments to its organizational documents, which would, individually or in the aggregate, reasonably be expected
to result in a material adverse effect on Maker’s ability to pay the Obligations.

 

(i)             Use
any proceeds from the sale of this Promissory Note and Purchase Agreement for any purpose other than general company purposes.

 

2.04       
Remedies upon Event of Default. Upon the occurrence and during the continuance of any Event of Default, or at any time
thereafter, subject only to prior receipt by Holder of payment in full of all Obligations (other than contingent indemnification
obligations) then outstanding, Holder shall have all of the rights and remedies described herein, and Holder may exercise any one,
more or all of such remedies at its sole discretion.

 

Holder shall have all
of the rights and remedies of a secured party provided by law, as in effect on the date hereof, whether or not provided by applicable
law at the time of exercise, and such rights and remedies are incorporated herein and made a part of this Promissory Note and Security
Agreement by this reference. In addition, Holder may make any compromise or settlement deemed desirable with respect to the Collateral,
or extend the time for payment, arrange for payment in installments or otherwise modify the terms of, or release, any of the Collateral
without incurring responsibility to, or affecting any liability of, Maker.

 

Upon the occurrence
and during the continuance of any Event of Default, Holder is authorized at any time and from time to time, without notice to or
demand upon Maker, to set off and apply any indebtedness owing by Holder to Maker against any and all of the Obligations, irrespective
of whether or not Holder shall have made any demand for payment and although such Obligations may be then contingent or unmatured.
The Holder agrees to notify Maker after any such setoff and application; provided, however, the failure to give such notice shall
not affect the validity of such setoff and application.

 

2.05        
Authorization. Maker hereby authorizes the filing of an initial financing statement, and any amendments and continuations
thereto, covering the Collateral described herein by Holder.

 

2.06        
Appointment as Attorney-in-Fact. Maker hereby irrevocably designates and appoints Holder its true and lawful attorney-in-fact
either in the name of Holder or Maker to, following the occurrence and during the continuance of an Event of Default, ask for,
demand, sue for, collect, compromise, compound, receive, receipt for and give acquittances for any and all sums owing or which
may become due upon any items of Collateral and, in connection therewith, to take any and all actions as Holder may deem necessary
or desirable in order to realize upon the Collateral including, without limitation: (a) power to receive, endorse, assign or deliver
in the name of Maker any checks, drafts, acceptances, notes, money orders or other instruments received in payment of, or on account
of, the Collateral, and Maker hereby waives presentment, demand, protest and notice of demand, protest and non-payment of any instrument
so endorsed; (b) power to sign Maker's name on any affidavits and notices with regard to any lien rights, any proof of claim in
any bankruptcy or on any financing statement or continuation statement under the Uniform Commercial Code; (c) power to sign in
Maker's name any documents necessary to transfer title to the Collateral to Holder or any third party; and (d) power to sign Maker's
name on any financing statements, fixture filings, security agreements, chattel mortgages, assignments, certificates of title and
other documents which Holder may need to evidence, perfect or realize upon Holder's security interest in the Collateral. All acts
of said power of attorney are hereby ratified and approved and Holder shall not be liable for any mistake of law or fact made in
connection therewith. This power of attorney is coupled with an interest and shall be irrevocable so long as any amounts remain
unpaid on any of the Obligations (other than contingent indemnification obligations). Holder shall not be under any duty to exercise
any such power of authority.

 

 

 

    	 	7	 

     

    

 

ARTICLE
III

GENERAL TERMS AND CONDITIONS

 

3.01        
No Waiver by Holder; Amendment. No delay, indulgence, departure, extension of time for payment, acceptance of a partial
or past due installment, failure to accelerate by reason of an Event of Default or any other act or omission by Holder with respect
to Maker shall: (a) release, discharge, modify, change or otherwise affect the original liability of any party hereunder; (b) be
construed as a novation or reinstatement of the indebtedness evidenced hereby, or be construed as a waiver of any right of acceleration
or the right of Holder to insist upon strict compliance with the terms hereof; or (c) preclude Holder from exercising any right,
privilege or power granted herein or by law. Maker hereby expressly waives the benefit of any statute or rule of law or equity,
whether nor or hereafter provided, which would produce a result contrary to or in conflict with the foregoing. No right, power
or remedy conferred upon or reserved to Holder herein is intended to be exclusive of any other right, power or remedy, but each
and every such right, power or remedy shall be cumulative and concurrent and shall be in addition to any other right, power or
remedy given thereunder or now or hereafter existing. None of the terms or provisions of this Promissory Note and Security Agreement
may be waived, altered, modified or amended except as Holder and Maker may consent thereto in writing, and then only to the extent
and for the period of time expressly stated therein.

 

3.02        
Waivers by Maker. Presentment for payment, demand, protest and notice of demand, protest, nonpayment, dishonor, acceleration
and intent to accelerate and all other notices are hereby waived by Maker, who further waives and renounces, to the fullest extent
permitted by law, all rights to the benefits of any statute of limitations and any moratorium, reinstatement, marshalling, forbearance,
valuation, stay, extension, redemption, appraisement, exemption and homestead now or hereafter provided by the Constitution and
laws of the United States of America and of each state thereof, both as to itself and in and to all of its Property against the
enforcement and collection of the obligations evidenced by this Promissory Note and Security Agreement. In addition, Maker waives
any right that it has or may have under applicable law to have Holder file termination statements with respect to the Collateral,
or any part thereof, and Maker further agrees that Holder shall not be required to file such UCC termination statements unless
and until all Obligations have been paid in full (other than contingent indemnification obligations), in which case Holder must
so file within five (5) Business Days of such repayment in full. Maker hereby waives all rights that Maker has or may have under
and by virtue of applicable law, including, without limitation, any right of Maker to notice and to a judicial hearing prior to
seizure by Holder of any of the Collateral.

 

3.03        
Unconditional Payment. Maker is and shall be obligated to pay principal, interest and any other amounts which shall
become payable hereunder absolutely and unconditionally and without any abatement, postponement, diminution or deduction and without
any reduction for counterclaim or setoff. In the event that at any time any payment received by Holder hereunder shall be deemed
by a court of competent jurisdiction to have been a voidable preference or fraudulent conveyance under any bankruptcy, insolvency
or other debtor relief law, then the obligation to make such payment shall survive any cancellation or satisfaction of this Promissory
Note and Security Agreement or return thereof to Maker and shall not be discharged or satisfied with any prior payment thereof
or cancellation of the Promissory Note and Security Agreement, but shall remain a valid and binding obligation enforceable in accordance
with the terms and provisions hereof, and such payment shall be immediately due and payable upon demand. This Section 3.03 (other
than the first sentence thereof) shall survive any cancellation or satisfaction of this Promissory Note and Security Agreement
or return of this Promissory Note and Security Agreement to Maker.

 

3.04        
Governing Law. This Promissory Note and Security Agreement shall be governed by and construed in accordance with the
laws of the State of New York, except that the laws of another jurisdiction may govern the perfection, the effect of perfection
or nonperfection and the priority of a security interest in the Collateral in accordance with the Uniform Commercial Code.

 

 

 

    	 	8	 

     

    

 

3.05        
Jurisdiction and Venue. Maker, to the full extent permitted by law, hereby knowingly, intentionally, voluntarily and
irrevocably, with and upon the advice of counsel, (a) submits to personal jurisdiction in the states where the Collateral is located
and in the State of New York over any suit, action or proceeding by any person arising from or relating to this Promissory Note
and Security Agreement, (b) agrees that any such action, suit or proceeding may be brought, at the option of Holder, in any state
or federal court of competent jurisdiction in the county where the Collateral is located or in New York County, New York, (c) submits
to the jurisdiction of each such court in any such suit, action or proceeding, (d) waives any objection that it may have to the
laying of venue of any such action, suit or proceeding in any of such courts and, (e) to the fullest extent permitted by law, agrees
that Maker will not bring any action, suit or proceeding in any forum other than such courts in New York County, New York (but
nothing herein shall affect the right of Holder to bring any action, suit or proceeding in any other forum). Maker further consents
and agrees to service of any summons, complaint or other legal process in any such suit, action or proceeding by registered or
certified mail, postage prepaid, to Maker at the address for notices described in Section 3.09 herein, and consents and agrees
that such service shall constitute in every respect valid and effective service (but nothing herein shall affect the validity or
effectiveness of process served in any other manner permitted by law).

 

3.06       
Waiver of Jury Trial. THE HOLDER, BY ACCEPTANCE HEREOF, AND MAKER, BY EXECUTION HEREOF, HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON OR ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS PROMISSORY NOTE AND SECURITY AGREEMENT.

 

3.07        
Compliance with Law. It is the intention of the parties hereto to comply with all applicable usury laws. Accordingly,
it is agreed that notwithstanding any provisions to the contrary in this Promissory Note and Security Agreement, or in any other
documents securing payment hereof or otherwise relating hereto, in no event shall this Promissory Note and Security Agreement or
such other documents require the payment or permit the collection of interest in excess of the maximum amount permitted by such
laws. If any such excess of interest is contracted for, charged or received under this Promissory Note and Security Agreement,
or under the terms of any other documents securing payment hereof or otherwise relating hereto, or in the event the maturity of
the indebtedness evidenced hereby is accelerated in whole or in part, or in the event that all or part of the principal or interest
of this Promissory Note and Security Agreement shall be prepaid, so that under any of such circumstances the amount of interest
contracted for, charged or received under this Promissory Note and Security Agreement shall exceed the maximum amount of interest
permitted by applicable usury laws, then in any such event, (a) the provisions of this Section 3.07 shall govern or control, (b)
neither Maker nor any other person or entity now or hereafter liable for the payment of this Promissory Note and Security Agreement
shall be obligated to pay the amount of such interest to the extent that it is in excess of the maximum amount of interest permitted
by applicable usury laws, (c) any such excess which may have been collected shall be either applied as a credit against the then
unpaid principal amount hereof or refunded to Maker, at Holder's option, and (d) the effective rate of interest for the Promissory
Note and Security Agreement shall be automatically reduced to the maximum lawful rate allowed for this Promissory Note and Security
Agreement under the applicable usury jurisdiction thereof.

 

3.08       
Successors and Permitted Assigns. This Promissory Note and Security Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, executors, administrators, legal representatives, successors, successors-in-title
and permitted assigns, subject to the restrictions on transfer contained herein. As used herein, "Maker" and "Holder"
shall be deemed to include their respective heirs, executors, legal representatives, successors, successors-in-title and permitted
assigns, whether by voluntary action of the parties or by operation of law. Maker shall not assign this Promissory Note and Security
Agreement or any of its obligations hereunder without the prior written consent of Holder. Holder may only assign this Promissory
Note and Security Agreement to affiliates thereof without the prior written consent of Maker.

 

 

 

    	 	9	 

     

    

 

3.09        
Notices. Any notice, request or other communication required or permitted hereunder shall be in writing and shall be
deemed to have been duly given if personally delivered or if mailed by registered or certified mail, postage prepaid, or sent by
a nationally recognized overnight courier at the following respective addresses of the parties:

 

	Maker:	
        4880 Havana St., Suite 201

        Denver, CO 80239

        Attention: General Counsel

         

	Payee:	
        350 Camino Gardens Blvd., Ste. 200

        Boca Raton, FL 33432

        Attention: Justin Dye

 

Any party hereto may
by notice so given change its address for future notice hereunder. Notice shall conclusively be deemed to have been given and received
when personally delivered or when deposited in the mail or with the overnight courier in the manner set forth above.

 

3.10        
Severability. The unenforceability or invalidity of any provision of this Promissory Note and Security Agreement shall
not affect the enforceability or validity of any other provision herein.

 

3.11        
Time of Essence. Time is of the essence to all terms and provisions set forth in this Promissory Note and Security Agreement.

 

3.12        
Interpretation. All headings used herein are used for convenience only and shall not be used to construe or interpret
this Promissory Note and Security Agreement.

 

(Signatures begin on following page)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	10	 

     

    

 

IN WITNESS WHEREOF,
Maker has executed this Promissory Note and Security Agreement under seal on the date first above written.

 

 

	 	MEDICINE MAN TECHNOLOGIES, INC.
	 	 
	 	By: /s/ Nancy Huber                                    
	 	Name: Nancy Huber
	 	Title: Chief Financial Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to Secured Convertible Promissory
Note and Security Agreement]

 

 

 

    	 	11	 

     

    

 

EXHIBIT A

 

COLLATERAL

 

 

 

For purposes of this
Promissory Note and Security Agreement, "Collateral" shall mean and include the following:

 

All of Maker's now
owned and hereafter acquired, created or arising "accounts," including but not limited to "health care insurance
receivables" (as such terms are defined in Article 9 of the Uniform Commercial Code); and

 

All of Maker's now
owned and hereafter acquired, created or arising "chattel paper," including but not limited to "electronic chattel
paper" and "tangible chattel paper" (as such terms are defined in Article 9 of the Uniform Commercial Code); and

 

All of Maker’s
now owned and hereafter acquired, created or arising “commercial tort claims” (as defined in Article 9 of the Uniform
Commercial Code); and

 

All of Maker's now
owned and hereafter acquired, created or arising "deposit accounts" (as defined in Article 9 of the Uniform Commercial
Code); and

 

All of Maker's now
owned and hereafter acquired, created or arising "documents" (as defined in Article 9 of the Uniform Commercial Code);
and

 

All of Maker's now
owned and hereafter acquired, created or arising "equipment" (as defined in Article 9 of the Uniform Commercial Code);
and

 

All of Maker's now
owned and hereafter acquired, created or arising "general intangibles," including but not limited to "payment intangibles"
and "software" (as such terms are defined in Article 9 of the Uniform Commercial Code); and

 

All of Maker's now
owned and hereafter acquired, created or arising "instruments" (as defined in Article 9 of the Uniform Commercial Code);
and

 

All of Maker's now
owned and hereafter acquired, created or arising "inventory" (as defined in Article 9 of the Uniform Commercial Code);
and

 

All of Maker's now
owned and hereafter acquired, created or arising "investment property" (as defined in Article 9 of the Uniform Commercial
Code); and

 

All of Maker's now
owned and hereafter acquired, created or arising "letter of credit rights" (as defined in Article 9 of the Uniform Commercial
Code); and

 

All of Maker's now
owned and hereafter acquired, created or arising cash and non-cash "proceeds" (as defined in Article 9 of the Uniform
Commercial Code); and

 

All of Maker's now
owned and hereafter acquired, created or arising products of the foregoing Collateral; and

 

All of Maker's now
owned and hereafter acquired, created or arising books, records, documents, ledger cards, invoices, bills of lading and other shipping
evidence, credit files, computer programs, tapes, discs, diskettes and other data and software storage medium and devices, customer
lists, mailing lists, mailing labels, business forms and stationery and any other property and general intangibles evidencing or
relating to the foregoing Collateral (including any rights of Maker with respect to the foregoing maintained with or by any other
person).

 

For purposes hereof,
"Uniform Commercial Code" shall mean the Uniform Commercial Code in effect in the State of Nevada or in the jurisdiction
which is applicable under Nevada conflict of law rules.

 

Notwithstanding the
foregoing, Collateral shall not include any assets or property that would otherwise be included as Collateral but that is expressly
prohibited from being included as Collateral pursuant to applicable law to the extent such assets or property is expressly thereby
prohibited.

 

 

 

 

    	 	12Exhibit 10.1

 

SECURITIES PURCHASE AGREEMENT

 

SECURITIES PURCHASE
AGREEMENT (this “Agreement”), dated as of November 16, 2020 by and between Medicine Man Technologies, Inc.
a Nevada corporation (the “Company”), and each of the investors listed on the Schedule of Buyers attached hereto
(each individually a “Buyer” and collectively, the “Buyers”).

 

WHEREAS:

 

A.             The
Company and the Buyers, severally and not jointly, are executing and delivering this Agreement in reliance upon the exemption from
securities registration afforded by Section 4(a)(2) of the Securities Act of 1933, as amended (the “1933 Act”),
and Rule 506(b) of Regulation D (“Regulation D”) as promulgated by the United States Securities and Exchange
Commission (the “SEC”) under the 1933 Act.

 

B.             The
Buyers, severally and not jointly, wish to purchase, and the Company wishes to sell, upon the terms and conditions stated in this
Agreement, an aggregate of 12,400 shares (the “Shares”) of the Company’s Series A preferred stock, par
value $0.001 per share (the “Preferred Stock”), having the rights, preferences and privileges set forth in the
Certificate of Designation, the form of which is attached hereto as Exhibit A (the “Certificate of Designation”),
including the conversion of such Preferred Stock into shares of the Company’s common stock, par value $0.001 per share (“Common
Stock”). Such purchase and sale of Preferred Stock shall take place in a single closing (the “Closing,”),
subject to the terms and conditions of this Agreement.

 

C.             (i)
The Shares and (ii) the shares of Common Stock issued and issuable upon conversion of the Shares in accordance with the terms of
the Certificate of Designation (collectively, the “Underlying Shares”), are collectively referred to herein
as the “Securities.”

 

NOW, THEREFORE,
the Company and the Buyers hereby agree as follows:

 

1.             
PURCHASE AND SALE OF SHARES.

 

(a)           
Purchase of Shares. Subject to the satisfaction (or waiver) of the conditions set forth in Sections 5
and 6 below at the Closing, the Company shall issue and sell to the Buyers all of the Shares, and each Buyer, severally
and not jointly, agrees to purchase from the Company on the Closing (as defined below), the number of Shares set forth on the signature
page hereto executed by such Buyer on the terms set forth herein.

 

(b)           
Closing. The date of the Closing shall be on such date and time as is mutually agreed to by the Company and the Buyers
after notification of satisfaction (or waiver) of the conditions to the Closing set forth in Sections 5 and 6
below, and the Closing shall be undertaken remotely by electronic transfer of Closing documentation.

 

(c)           
Purchase Price. The purchase price for the Shares to be purchased by the Buyers at the Closing shall be $1,000 per
Share (the “Purchase Price”).

 

(d)           
Form of Payment. On or before the Closing, (i) each Buyer shall pay its aggregate Purchase Price to the Company for
the Shares to be issued and sold to such Buyer at the Closing by wire transfer of immediately available funds in accordance with
the Company’s written wire instructions; and (ii) the Company shall deliver to each Buyer one or more stock certificates,
evidencing the number of Shares such Buyer is purchasing at the Closing, duly executed on behalf of the Company and registered
in the name of such Buyer or its designee.

 

 

 

    	 	1	 

     

    

 

2.             
BUYERS’ REPRESENTATIONS AND WARRANTIES. Each Buyer, for itself and for no other Buyer, represents and warrants
to the Company that, as of the date hereof and as of the Closing (unless as of a specific date therein, in which case they shall
be accurate as of such date):

 

(a)           
No Public Sale or Distribution. The Buyer is (i) acquiring the Shares, and (ii) when issued in accordance with
the terms of the Certificate of Designation, will acquire the Underlying Shares, in the ordinary course of its business 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 1933 Act; provided, however, that by making the representations herein, except as otherwise
set forth herein or the other Transaction Documents (as defined in Section 3(b)), the Buyer 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 1933 Act. The Buyer does not presently have any
agreement or understanding, directly or indirectly, with any Person to distribute any of the Securities. As used herein, “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)           
Buyer Status and Experience. The Buyer is, and on each date on which the Buyer acquires any Underlying Shares it
will be, an “accredited investor” as that term is defined in Rule 501(a) of Regulation D (“Accredited Investor”).
The Buyer, either alone or together with its representatives, has such knowledge, sophistication and experience in business and
financial matters so as to be capable of evaluating the merits and risks of the investment in the Securities, and has so evaluated
the merits and risks of such investment. The Buyer is able to bear the economic risk of an investment in the Securities and, at
the present time, is able to afford a complete loss of such investment.

 

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

 

(d)           
Information. The Buyer and its advisors, if any, have been furnished with a copy of the Company’s Confidential
Private Placement Memorandum, dated November 6, 2020 (the “Confidential PPM”) and all materials relating to
the business, finances and operations of the Company and materials relating to the offer and sale of the Shares that have been
requested by the Buyer. The Buyer and its advisors, if any, have been afforded the opportunity to ask questions of the Company
and receive answers from the Company concerning the terms and conditions of the offering of the Securities, the merits and risks
of investing in the Securities and the business, finances and operations of the Company. Neither such inquiries nor any other due
diligence investigations conducted by the Buyer or its advisors, if any, or its representatives shall modify, amend or affect the
Buyer’s right to rely on the Company’s representations and warranties contained herein. The Buyer understands that
its investment in the Securities involves a high degree of risk, including the risks outlined in the Confidential PPM. The Buyer
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.

 

(e)           
No Governmental Review. The Buyer 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.

 

 

 

    	 	2	 

     

    

 

(f)            
Transfer or Resale. The Buyer understands that: (i) the Securities have not been and are not being registered under
the 1933 Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless (A) subsequently
registered thereunder, (B) the Buyer shall have delivered to the Company (if requested by the Company) an opinion of counsel, in
a form reasonably acceptable to the Company, 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 Buyer provides the Company with reasonable
assurance that such Securities can be sold, assigned or transferred pursuant to Rule 144 or Rule 144A promulgated under the
1933 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 1933 Act) may require compliance with some other exemption under the 1933
Act or the rules and regulations of the SEC thereunder; and (iii) except as otherwise provided herein, neither the Company nor
any other Person is under any obligation to register the Securities under the 1933 Act or any state securities laws or to comply
with the terms and conditions of any exemption thereunder. Notwithstanding the foregoing, the Securities may be pledged in connection
with a bona fide margin account with a FINRA registered broker/dealer or other loan or financing arrangement with an Accredited
Investor secured by the Securities and such pledge of Securities shall not be deemed to be a transfer, sale or assignment of the
Securities hereunder, and if the Buyer effects such a pledge of Securities it shall not be required to provide the Company with
any notice thereof or otherwise make any delivery to the Company pursuant to this Agreement or any other Transaction Document,
including, without limitation, this Section 2(f).

 

(g)           
Legends. The Buyer understands that the Securities are “restricted securities” under applicable federal
and state securities laws and that certificates or other instruments representing Securities 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 CONVERTIBLE 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 TO THE HOLDER (IF REQUESTED
BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS
SOLD OR ELIGIBLE TO BE 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 WITH A FINRA REGISTERED BROKER/DEALER OR OTHER LOAN OR FINANCING ARRANGEMENT
SECURED BY THE SECURITIES.

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	3	 

     

    

 

No later than two days on which the principal
Trading Market (as defined below) is open (“Trading Days”) following the delivery by the Buyer to the Company
or its transfer agent of a certificate representing Securities issued with a restrictive legend (such date, the “Legend
Removal Date”), such legend shall be removed and the Company shall issue a certificate without such legend to the Buyer
or issue to the Buyer such Securities by electronic delivery at the applicable balance account at The Depository Trust Company
(“DTC”), if such Securities are DTC-eligible at such time, if (i) such Securities are registered for resale
under the 1933 Act and the holder has provided the Company with such documents as are reasonably required by the Company in connection
with the removal of the legend, including but not limited to the Buyer’s representation letter indicating an intent to sell,
(ii) in connection with a sale, assignment or other transfer, such holder provides the Company 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 1933 Act, (iii) the Securities can be sold, assigned or transferred pursuant to Rule 144
without restriction or limitation, including without the requirement to be in compliance with Rule 144(c)(1), or Rule 144A, or
(iv) if such legend is not required under applicable requirements of the 1933 Act (including, without limitation, controlling judicial
interpretations and pronouncements issued by the SEC). The Company shall be responsible for the fees of its transfer agent and
all DTC fees associated with such issuance. If the Company shall fail for any reason or for no reason to issue to such Buyer,
a certificate without such legend to such holder or to issue to such Buyer such Securities by electronic delivery at the applicable
balance account at DTC, if such Securities are DTC-eligible at such time, on or before the applicable Legend Removal Date, and
if after such Legend Removal Date such Buyer purchases (in an open market transaction or otherwise) Securities to deliver in satisfaction
of a sale by such Buyer of all or any portion of the Securities that the holder anticipated receiving without legend from the Company,
then the Company shall, within five Trading Days after such Buyer’s request and in such Buyer’s discretion, either
(i) pay cash to such Buyer in an amount equal to such Buyer’s total purchase price (including brokerage commissions, if any)
for the Securities so purchased (the “Buy-In Price”), at which point the Company’s obligation to deliver
such unlegended Securities shall terminate, or (ii) promptly honor its obligation to deliver to such Buyer such unlegended Securities
as provided above and pay cash to such Buyer in an amount equal to the excess (if any) of the Buy-In Price over the product of
(A) such number Securities, times (B) any trading price of the Securities selected by such Buyer in writing as in effect at any
time during the period beginning on the applicable Legend Removal Date and the date the Company makes the applicable cash payment.
The Company shall be responsible for the fees of its transfer agent and all DTC fees associated with such issuance. The Company
shall issue irrevocable instructions to its transfer agent, and any subsequent transfer agent, in a form mutually acceptable to
the Company and each Buyer (the “Irrevocable Transfer Agent Instructions”). The Company represents and warrants that
no (x) instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 2(g) and (y) instructions
that are contradictory therewith, in each case, will be given by the Company to its transfer agent in connection with this Agreement,
and that the Securities shall otherwise be freely transferable on the books and records of the Company as and to the extent provided
in this Agreement and the other Transaction Documents and applicable law. The Company acknowledges that a breach by it of its obligations
under this Section 2(g) will cause irreparable harm to the Buyer. Accordingly, the Company acknowledges that the remedy
at law for a breach of its obligations under this Section 2(g) will be inadequate and agrees, in the event of a breach or
threatened breach by the Company of the provisions of this Section 2(g), that the Buyer shall be entitled, in addition to
all other available remedies, to an order and/or injunction restraining any breach and requiring immediate issuance and transfer,
without the necessity of showing economic loss and without any bond or other security being required.

 

(h)           
Validity; Enforcement. The Buyer is either an individual or an entity duly incorporated or formed, validly existing
and in good standing under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership,
limited liability company or similar power and authority to enter into and to consummate the transactions contemplated by the Transaction
Documents and otherwise to carry out its obligations hereunder and thereunder. This Agreement and each other Transaction Document
have been duly and validly authorized, executed and delivered on behalf of the Buyer and constitutes the legal, valid and binding
obligations of the Buyer enforceable against the Buyer 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 Buyer of this Agreement and each other Transaction
Document and the consummation by the Buyer of the transactions contemplated hereby and thereby will not (i) result in a violation
of the organizational documents of the Buyer 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 Buyer 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 Buyer, 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 Buyer to perform its obligations hereunder.

 

 

 

    	 	4	 

     

    

 

(j)             
Residency. The Buyer is a resident of the jurisdiction specified on the Schedule of Buyers attached hereto.

 

(k)           
No Conflicts with Sanctions Laws. Neither the Buyer nor any director, officer, employee, agent, affiliate or
other person associated with or acting on behalf of the Buyer is, or is directly or indirectly owned or controlled by, a Person
that is currently the subject or the target of any sanctions administered or enforced by the U.S. government (including, without
limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Departments of State or Commerce
and including, without limitation, the designation as a “Specially Designated National” or on the “Sectoral Sanctions
Identifications List”, collectively “Blocked Persons”), the United Nations Security Council, the European
Union, Her Majesty’s Treasury or any other relevant sanctions authority (collectively, “Sanctions Laws”);
neither the Buyer, nor any director, officer, employee, agent, affiliate or other person associated with or acting on behalf of
the Buyer is located, organized or resident in a country or territory that is the subject or target of a comprehensive embargo
or Sanctions Laws prohibiting trade with the country or territory, including, without limitation, Crimea, Cuba, Iran, North Korea,
Sudan and Syria (each, a “Sanctioned Country”); neither the Buyer nor any director, officer, employee, agent,
affiliate or other person associated with or acting on behalf of the Buyer, acting in any capacity in connection with the operations
of the Buyer, conducts any business with or for the benefit of any Blocked Person or engages in making or receiving any contribution
of funds, goods or services to, from or for the benefit of any Blocked Person, or deals in, or otherwise engages in any transaction
relating to, any property or interests in property blocked or subject to blocking pursuant to any applicable Sanctions Laws. No action
of the Buyer in connection with the execution, delivery and performance of this Agreement and the other Transaction Documents or
the consummation of any other transaction contemplated hereby or by the other Transaction Documents or the fulfillment of the terms
hereof or thereof. For the past five years, the Buyer has not knowingly engaged in and is not now knowingly engaged in any dealings
or transactions with any person that at the time of the dealing or transaction is or was the subject or the target of Sanctions
Laws or with any Sanctioned Country.

 

3.             
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

 

The Company represents
and warrants to the Buyers that, as of the date hereof and as of the Closing:

 

(a)           
Organization and Qualification. The Company and each of its “Subsidiaries” (which for purposes
of this Agreement means any entity in which the Company, directly or indirectly, owns any of the capital stock or holds an equity
or similar interest), if any, are entities duly organized and validly existing and in good standing under the laws of the jurisdiction
in which they are formed, and have the requisite power and authorization to own their properties and to carry on their business
as now being conducted and as presently proposed to be conducted. Each of the Company and each of its Subsidiaries is duly qualified
as a foreign entity to do business and is in good standing in every jurisdiction in which its ownership of property or the nature
of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or
be in good standing would not reasonably be expected to have a Material Adverse Effect. As used in this Agreement, “Material
Adverse Effect” means any fact, occurrence, circumstance, event or change that, individually or in the aggregate, has
had, or would reasonably be expected to have, a material adverse effect on the business, properties, assets, liabilities, operations,
results of operations, or condition (financial or otherwise) of the Company and its Subsidiaries taken as a whole, or on the transactions
contemplated hereby or on the other Transaction Documents or by the agreements and instruments to be entered into in connection
herewith or therewith, or on the authority or ability of the Company to perform any of its obligations under any of the Transaction
Documents, except to the extent related to: (i) a change in general political, economic, or financial market conditions (except
if such conditions have had, or would reasonably be expected to have, a disproportionately adverse effect on the Company and its
Subsidiaries, taken as a whole, relative to other Persons operating in the industries in which the Company or its Subsidiaries
operate generally); (ii) a change that affected the industries in which the Company or its Subsidiaries operate generally (except
if such change has had, or would reasonably be expected to have, a disproportionately adverse effect on the Company or its Subsidiaries,
taken as a whole, relative to other Persons operating in the industries in which the Company or its Subsidiaries operate generally);
(iii) the announcement or pendency of this Agreement and the transactions contemplated hereby; (iv) any changes after the date
of this Agreement in GAAP or Applicable Law or the enforcement, implementation or interpretation thereof (except if such changes
have had, or would reasonably be expected to have, a disproportionately adverse effect on the Company or its Subsidiaries, taken
as a whole, relative to other Persons operating in the industries in which the Company or its Subsidiaries operate generally);
(v) natural disaster, sabotage, acts of terrorism, civil unrest, rioting, looting or war (whether or not declared) or other outbreak
of hostilities or escalation thereof; or (vi) the failure of the Company to meet its financial projections. The Company has no Subsidiaries
except as set forth in Schedule 3(a). The outstanding shares of capital stock of each of the Subsidiaries have been duly
authorized and validly issued, are fully paid and non-assessable and are owned by the Company or another Subsidiary, if any, free
and clear of all liens, preemptive or similar rights, mortgages, defects, claims, pledges, charges, taxes, rights of first refusal,
encumbrances, security interests and other encumbrances (collectively, “Liens”) and equities and claims; and
no options, warrants or other rights to purchase, agreements or other obligations to issue or other rights to convert any obligations
into shares of capital stock or ownership interests in the Subsidiaries are outstanding.

 

 

 

    	 	5	 

     

    

 

(b)           
Authorization; Enforcement; Validity. The Company has the requisite corporate power and authority to enter into and
perform its obligations under this Agreement and each of the other agreements entered into by the parties hereto in connection
with the transactions contemplated by this Agreement (collectively, the “Transaction Documents”) and to issue
the Shares in accordance with the terms hereof and thereof. The execution and delivery of this Agreement and the other Transaction
Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby have been duly
authorized by the Company’s Board of Directors and other than (i) a waiver of certain covenants in the Securities Purchase
Agreement, by and between the Company and Dye Capital Cann Holdings, LLC, dated June 5, 2019, as amended by the Amendment to Securities
Purchase Agreement, by and between the Company and Dye Capital Cann Holdings, LLC, dated July 15, 2019, as further amended by the
Amendment to Securities Purchase Agreement, by and between the Company and Dye Capital Cann Holdings, LLC, dated May 20, 2020 to
the full extent required to give effect to the Proposed Transaction (the “Dye SPA Waiver”), (ii) a Form
D with the SEC and any other filings as may be required by any state securities agencies, and (iii) the 8-K Filing (collectively,
the “Required Filings and Approvals”), no further filing, consent or authorization is required by the Company,
its Board of Directors or its stockholders. This Agreement and the other Transaction Documents have been duly executed and delivered
by the Company, and constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance
with their respective terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable
creditors’ rights and remedies. Except as set forth in Schedule 3(b) there are no stockholder agreements, voting agreements,
or other similar arrangements with respect to the Company’s capital stock to which the Company is a party or, to the actual
knowledge after reasonable inquiry of the Company’s chief executive officer, chief financial officer and general counsel,
but without any obligation to conduct investigation of anyone outside of the Company or its Subsidiaries (collectively, the “Company’s
Knowledge”), between or among any of the Company’s stockholders.

 

(c)           
Issuance of Shares. The issuance of the Shares is duly authorized and, upon issuance in accordance with the terms
of the Transaction Documents, the Shares shall be validly issued and free from all preemptive or similar rights (except for those
which have been validly waived prior to the date hereof), taxes, liens and charges and other encumbrances with respect to the issue
thereof and the Shares shall be fully paid and nonassessable with the holders being entitled to all rights accorded to a holder
of Preferred Stock. As of the Closing, a number of shares of Common Stock shall have been duly authorized and reserved for issuance
which equals at least the number of shares of Common Stock issuable upon conversion of the Shares. Upon conversion of the Shares
in accordance with the terms of the Certificate of Designation, the Underlying Shares when issued will be validly issued, fully
paid and nonassessable and free from all preemptive or similar rights, taxes, liens, charges and other encumbrances with respect
to the issue thereof, with the holders being entitled to the rights accorded to a holder of Common Stock. Assuming the accuracy
of each of the representations and warranties set forth in Section 2, the offer and issuance by the Company of the
Shares is exempt from registration under the 1933 Act.

 

(d)          
No Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and the consummation
by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Shares and
the reservation for issuance and issuance of Underlying Shares) will not (i) result in a violation of the Articles of Incorporation
(as defined below) or Bylaws (as defined below) or other organizational documents of the Company or any of its Subsidiaries, any
capital stock of the Company or any of its Subsidiaries or bylaws of the Company or any of its Subsidiaries or (ii) except as set
forth in Schedule 3(d), conflict with, or constitute a default (or an event which with notice or lapse of time or both would
become a default) in any respect under, or give to others any rights of termination, amendment, acceleration or cancellation of,
any agreement, indenture or instrument to which the Company or any of its Subsidiaries is a party, other than conflicts or defaults
that would not reasonably be expected to have a Material Adverse Effect, or (iii) result in a violation of any law, rule, regulation,
order, judgment or decree (including foreign, federal and state securities laws and regulations and the rules and regulations of
the OTCQX market (the “Principal Market”) and including all applicable foreign, federal, state laws, rules and
regulations) applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its
Subsidiaries is bound or affected, assuming, with respect to subsections (ii) and (iii), the making and receipt of the Required
Filings and Approvals, other than violations that would not reasonably be expected to have a Material Adverse Effect.

 

 

 

    	 	6	 

     

    

 

(e)           
Consents. Other than the Required Filings and Approvals, the Company is not required to obtain any consent from,
authorization or order of, or make any filing or registration with, any court, governmental agency or any regulatory or self-regulatory
agency or any other Person in order for it to execute, deliver or perform any of its obligations under or contemplated by the Transaction
Documents, in each case, in accordance with the terms hereof or thereof. Other than the Required Filings and Approvals, all consents,
authorizations, orders, filings and registrations which the Company is required to obtain pursuant to the preceding sentence have
been obtained or effected on or prior to the Closing (or in the case of filings detailed above, will be made timely after the Closing),
and the Company is unaware of any facts or circumstances which might prevent the Company from obtaining or effecting any of the
registration, application or filings contemplated by the Transaction Documents. Except as set forth in Schedule 3(e), the
Company is not in violation of the listing requirements of the Principal Market and has no knowledge of any facts or circumstances
which would reasonably lead to the suspension of quotation of the Common Stock on the Principal Market in the foreseeable future.
The issuance by the Company of the Shares shall not have the effect of suspending of quotation of the Common Stock on the Principal
Market.

 

(f)            
Acknowledgment Regarding Buyers’ Purchase of Shares. The Company acknowledges and agrees that each Buyer is
acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions
contemplated hereby and thereby and that, except as set forth in Schedule 3(f), each Buyer is not (i) an officer or director
of the Company or any of its Subsidiaries, (ii) an “affiliate” of the Company or any of its Subsidiaries (as defined
in Rule 144), if any, or (iii) to the Company’s Knowledge, a “beneficial owner” of more than 10% of the Common
Stock (as defined for purposes of Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the “1934 Act”)).
The Company further acknowledges that each Buyer is not acting as a financial advisor or fiduciary of the Company or any of its
Subsidiaries (or in any similar capacity), if any, with respect to the Transaction Documents and the transactions contemplated
hereby and thereby, and any advice given by the Buyers or any of its representatives or agents in connection with the Transaction
Documents and the transactions contemplated hereby and thereby is merely incidental to the Buyers’ purchase of the Shares.
The Company further represents to the Buyers that the Company’s decision to enter into the Transaction Documents has been
based solely on the independent evaluation by the Company and its representatives.

 

(g)           
No General Solicitation; Placement Agent Fees. Neither the Company, nor any of its Subsidiaries or affiliates,
nor any Person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the
meaning of Regulation D) in connection with the offer or sale of the Shares. The Company shall be responsible for the payment of
any placement agent fees, financial advisory fees, or brokers’ commissions (other than for Persons engaged by any Buyer or
any Buyer’s investment advisor) relating to or arising out of the transactions contemplated hereby, in connection with the
sale of the Shares. The Company shall pay, and hold the Buyers harmless against, any liability, loss or expense (including, without
limitation, reasonable attorney’s fees and out-of-pocket expenses) arising in connection with any such claim.

 

(h)           
No Integrated Offering. None of the Company, its Subsidiaries or any of their affiliates, nor any Person acting
on their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security,
under circumstances that would require registration of the issuance of any of the Shares under the 1933 Act, whether through integration
with prior offerings or otherwise. None of the Company, its Subsidiaries, any of their affiliates nor any Person acting on their
behalf will take any action or steps that would require registration of the issuance of any of the Securities under the 1933 Act.

 

(i)            
Application of Takeover Protections; Rights Agreement. The Company and its Board of Directors have taken all necessary
action, if any, in order to render inapplicable any control share acquisition, interested stockholder, business combination, poison
pill (including, without limitation, any distribution under a rights agreement) or other similar anti-takeover provision under
the Articles of Incorporation, Bylaws or other organizational documents or the laws of the jurisdiction of its formation which
is or could become applicable to the Buyers as a result of the transactions contemplated by this Agreement, including, without
limitation, the Company’s issuance of the Securities and the Buyers’ ownership of the Securities. The Company and its
Board of Directors have taken all necessary action, if any, in order to render inapplicable any stockholder rights plan or similar
arrangement relating to accumulations of beneficial ownership of Preferred Stock or a change in control of the Company or any of
its Subsidiaries.

 

 

 

    	 	7	 

     

    

 

(j)            
SEC Documents; Financial Statements. Except as disclosed in Schedule 3(j), during the two years prior
to the date hereof, the Company has timely filed all reports, schedules, forms, statements and other documents required to be filed
by it with the SEC pursuant to the reporting requirements of the 1934 Act (all of the foregoing filed prior to the date hereof
or prior to the Closing, and all exhibits included therein and financial statements, notes and schedules thereto and documents
incorporated by reference therein being hereinafter referred to as the “SEC Documents”). The Company has delivered
to each Buyer or its representatives, upon request, true, correct and complete copies of the SEC Documents not available on the
EDGAR system. As of their respective filing dates, the SEC Documents complied in all material respects with the requirements of
the 1934 Act applicable to the Company and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents,
and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. As of their respective filing dates, the financial statements of the
Company included in the SEC Documents (the “Financial Statements”) complied as to form in all material respects
with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial
statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), consistently
applied during the periods involved (except (i) as may be otherwise indicated in such Financial Statements or the notes thereto,
or (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements)
and fairly present in all material respects the financial position of the Company and its Subsidiaries, as of the dates thereof
and the results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments which will not be material, either individually or in the aggregate). The Company is not currently contemplating
to amend or restate any of the Financial Statements, nor is the Company currently aware of facts or circumstances which would require
the Company to amend or restate any of the Financial Statements, in each case, in order for any of the Financial Statements to
be in material compliance with GAAP and the rules and regulations of the SEC. The Company has not been informed by its independent
accountants that they recommend that the Company amend or restate any of the Financial Statements or that there is any need for
the Company to amend or restate any of the Financial Statements.

 

(k)          
Absence of Certain Changes. Except as disclosed in Schedule 3(k)(i), since December 31, 2019, there has been
no  Material Adverse Effect. Except as disclosed in Schedule 3(k)(ii), since December 31, 2019, neither the Company nor any
of its Subsidiaries has (i) declared or paid any dividends, (ii) sold any assets, individually or in the aggregate, in excess of
$100,000 outside of the ordinary course of business or (iii) had capital expenditures, individually or in the aggregate, in excess
of $100,000. Neither the Company nor any of its Subsidiaries has taken any steps to seek protection pursuant to any law or statute
relating to bankruptcy, insolvency, reorganization, receivership, liquidation or winding up, nor to the Company’s Knowledge
does the Company or any Subsidiary believe that any of their respective creditors intend to initiate involuntary bankruptcy proceedings
or any actual knowledge of any fact which would reasonably lead a creditor to do so. The Company and its Subsidiaries as a whole
are not, as of the date hereof, and after giving effect to the transactions contemplated hereby to occur at the Closing, will not
be Insolvent (as defined below). For purposes of this Section 3(k), “Insolvent” means, with respect
to any Person, (w) the present fair saleable value of such Person’s assets is less than the amount required to pay such Person’s
total Indebtedness (as defined in Section 3(q)), (x) such Person is unable to pay its debts and liabilities, subordinated,
contingent or otherwise, as such debts and liabilities become absolute and matured, (y) such Person intends to incur or believes
that it will incur debts that would be beyond its ability to pay as such debts mature or (z) such Person has unreasonably small
capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted.

 

(l)            
No Undisclosed Events, Liabilities, Developments or Circumstances. Since December 31, 2019, no event, liability,
development or circumstance has occurred or exists, or is contemplated to occur with respect to the Company, its Subsidiaries,
or their respective business, properties, prospects, operations or financial condition, that would constitute a Material Adverse
Effect.

 

 

 

    	 	8	 

     

    

 

(m)          
Conduct of Business; Regulatory Permits. Neither the Company nor any of its Subsidiaries is in violation of any term
of or in default under its Articles of Incorporation, any certificate of designation, preferences or rights of any other outstanding
series of preferred stock of the Company or any of its Subsidiaries or Bylaws or their organizational charter, certificate of formation
or certificate of incorporation or bylaws, respectively. The Company and each of its Subsidiaries have been in material compliance
with all Applicable Laws (as defined below) since the incorporation of the Company and will continue to operate in compliance with
all Applicable Laws. “Applicable Law” means applicable provisions of federal, state or local law (including
common law), statute, rule, regulation, order, permit, judgment, injunction, decree or other decision of any court or other tribunal
or governmental authority legally binding on the Company, its properties, its Subsidiaries, or their properties, including applicable
state or local laws with respect to cannabis, all as may be amended, but excluding the Controlled Substances Act (21 U.S.C. §801,
et. seq.) federal law that prohibits the cultivation, processing, transportation, sale or possession of Cannabis or parts
of Cannabis including particular cannabinoids, the sale or possession of cannabis paraphernalia, or advertising the sale of Cannabis,
products containing Cannabis, or Cannabis paraphernalia. “Cannabis” means a plant in the genus Cannabis
including Cannabis sativa, Cannabis indica, Cannabis ruderalis, and all subspecies, hybrids, or yet to be discovered subspecies
and hybrids, and including the federal law definitions of Marijuana. “Marijuana” means any material, compound,
derivative, mixture, product or preparation that contains any quantity of the substances listed on Schedule 1 of the Controlled
Substances Act or in its implementing regulations, including without limitation 21 C.F.R. § 1308.11, 21 U.S.C. § 802(6)
as “Marihuana” or “Tetrahydrocannabinols,” except Hemp, as defined in 7 U.S.C. § 1639o and except
Cannabis Plant Materials defined in 21 C.F.R. 1308.35 or which contains any of their salts, isomers and salts of isomers, or any
derivative or mixture thereof or any synthetic equivalent or which would be a “controlled substance analogue” manufactured,
formulated, sold, distributed, or marketed with the intent to avoid the provisions of existing drug laws as defined under 21 U.S.C.
§ 813. The Company and each of its Subsidiaries possess all material certificates, authorizations and permits issued by the
appropriate foreign, federal or state regulatory authorities necessary to conduct their respective businesses. All such certificates,
authorizations and permits are valid and in full force and effect. During the period since the Company’s Common Stock was
designated for quotation on the Principal Market, (i) the Common Stock has been designated for quotation on the Principal Market,
(ii) trading in the Common Stock has not been suspended by the SEC or the Principal Market and (iii) the Company has received
no communication, written or oral, from the SEC or the Principal Market regarding the suspension of quotation of the Common
Stock on the Principal Market.

 

(n)          
Sarbanes-Oxley Act. The Company is in compliance with any and all applicable requirements of the Sarbanes-Oxley Act
of 2002, as amended, that are effective as of the date hereof, and any and all applicable rules and regulations promulgated by
the SEC thereunder that are effective as of the date hereof.

 

(o)           
Transactions With Affiliates. Except as set forth in Schedule 3(o), none of the current officers, directors
or employees (including, without limitation, any family member or affiliate thereof) of the Company or any of its Subsidiaries
is presently a party to (or has previously been a party to) any transaction with the Company or any of its Subsidiaries (other
than for ordinary course services as employees, officers or directors), including any contract, agreement or other arrangement
providing for the furnishing of goods or services to or by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any such officer, director or employee or, to the Company’s Knowledge, any corporation, partnership,
trust or other Person in which any such officer, director, or employee (or family member or affiliate thereof) has a substantial
interest or is an employee, officer, director, trustee or partner.

 

 

 

 

 

 

 

 

 

 

 

    	 	9	 

     

    

 

(p)           
Equity Capitalization. As of the date hereof, the authorized capital stock of the Company consists of (i) 250,000,000
shares of Common Stock, of which as of the date hereof, [will be filled in when all buyers finalized] are issued and outstanding,
[will be filled in when all buyers finalized] shares are reserved for issuance pursuant to the Company’s stock option and
purchase plans and [will be filled in when all buyers finalized] shares are reserved for issuance pursuant to securities (other
than the aforementioned options) exercisable or exchangeable for, or convertible into, Common Stock and (ii) 10,000,000 shares
of preferred stock, par value $0.001 per share, none of which are designated and issued and outstanding. [will be filled in when
all buyers finalized] shares of Common Stock are held in treasury. All of such outstanding shares are duly authorized, validly
issued and are fully paid and nonassessable. [will be filled in when all buyers finalized] shares of the Company’s issued
and outstanding Common Stock on the date hereof are as of the date hereof owned by Persons who are “affiliates” (as
defined in Rule 405 of the 1933 Act) of the Company or any of its Subsidiaries. (i) Except as disclosed in Schedule 3(p),
none of the Company’s or any Subsidiary’s capital stock is subject to preemptive rights or any other similar rights
or any liens or encumbrances suffered or permitted by the Company or any Subsidiary; (ii) except as disclosed in Schedule 3(p),
there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, or exercisable or exchangeable for, any capital stock of the Company or
any of its Subsidiaries, or contracts, commitments, understandings or arrangements by which the Company or any of its Subsidiaries,
is or may become bound to issue additional capital stock of the Company or any of its Subsidiaries, or options, warrants, scrip,
rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into,
or exercisable or exchangeable for, any capital stock of the Company or any of its Subsidiaries; (iii) except as disclosed in Schedule
3(p), there are no outstanding debt securities, notes, credit agreements, credit facilities or other agreements, documents
or instruments evidencing Indebtedness of the Company or any of its Subsidiaries, or by which the Company or any of its Subsidiaries,
is or may become bound; (iv) except as disclosed in Schedule 3(p), there are no financing statements securing obligations
in any amounts filed in connection with the Company or any of its Subsidiaries; (v) except as disclosed in Schedule 3(p),
there are no agreements or arrangements (other than as set forth herein) under which the Company or any of its Subsidiaries,
is obligated to register the sale of any of their securities under the 1933 Act; (vi) except as disclosed in Schedule 3(p),
there are no outstanding securities or instruments of the Company or any of its Subsidiaries, which contain any redemption
or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any
of its Subsidiaries is or may become bound to redeem a security of the Company or any of its Subsidiaries; (vii) except as disclosed
in Schedule 3(p), there are no securities or instruments containing anti-dilution or similar provisions that will be
triggered by the issuance of the Shares; (viii) except as disclosed in Schedule 3(p), neither the Company nor any Subsidiary,
if any, has any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement;
and (ix) neither the Company nor any of its Subsidiaries have any material non-public information, including any material liabilities
or obligations, that are required to be disclosed in the SEC Documents which are not so disclosed in the SEC Documents. True, correct
and complete copies of the Company’s articles of incorporation, as amended and as in effect on the date hereof (the “Articles
of Incorporation”), and the Company’s bylaws, as amended and as in effect on the date hereof (the “Bylaws”),
and the terms of all securities convertible into, or exercisable or exchangeable for, Common Stock and the material rights of the
holders thereof in respect thereto have heretofore been filed as part of the SEC Documents. Except as set forth in Schedule
3(p), each stock option granted by the Company was granted (x) in accordance with the terms of the applicable stock option
plan of the Company and (y) with an exercise price at least equal to the fair market value of the Common Stock on the date such
stock option would be considered granted under GAAP and applicable law. To the Company’s Knowledge, no stock option granted
under the Company’s stock option plan has been backdated. To the Company’s Knowledge, the Company has not granted,
and there is no and has been no policy or practice of the Company to grant, stock options prior to, or otherwise coordinate the
grant of stock options with, the release or other public announcement of material information regarding the Company or its Subsidiaries
or their financial results or prospects.

 

 

 

 

 

 

 

 

 

    	 	10	 

     

    

 

(q)          
Indebtedness and Other Contracts. Neither the Company nor any of its Subsidiaries, (i) except as disclosed in Schedule
3(q), has any outstanding Indebtedness (as defined below), (ii) except as disclosed in the SEC Documents, is a party to any
material definitive agreement (as defined in Item 1.01(b) of the Current Report on Form 8-K), or (iii) except as disclosed in Schedule
3(q), neither the Company nor such Subsidiary, nor any other party to a material definitive agreement (as defined in Item 1.01(b)
of the Current Report on Form 8-K) is in material violation of any term of, or in default under, such material definitive agreement,
including any material definitive agreement relating to any Indebtedness. For purposes of this Agreement: (x) “Indebtedness”
of any Person means, without duplication (A) all indebtedness for borrowed money, (B) all obligations issued, undertaken or assumed
as the deferred purchase price of property or services (including, without limitation, “capital leases” in accordance
with GAAP, consistently applied during the periods involved) (other than trade payables entered into in the ordinary course of
business consistent with past practice), (C) all reimbursement or payment obligations with respect to letters of credit, surety
bonds and other similar instruments, (D) all obligations evidenced by notes, bonds, debentures or similar instruments, including
obligations so evidenced incurred in connection with the acquisition of property, assets or businesses, (E) all indebtedness created
or arising under any conditional sale or other title retention agreement, or incurred as financing, in either case with respect
to any property or assets acquired with the proceeds of such indebtedness (even though the rights and remedies of the seller or
bank under such agreement in the event of default are limited to repossession or sale of such property), (F) all monetary
obligations under any leasing or similar arrangement which, in connection with GAAP, consistently applied for the periods covered
thereby, is classified as a capital lease, (G) all indebtedness referred to in clauses (A) through (F) above secured by (or
for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any mortgage, claim,
lien, tax, right of first refusal, pledge, charge, security interest or other encumbrance upon or in any property or assets (including
accounts and contract rights) owned by any Person, even though the Person which owns such assets or property has not assumed or
become liable for the payment of such indebtedness, and (H) all Contingent Obligations in respect of indebtedness or obligations
of others of the kinds referred to in clauses (A) through (G) above; and (y) “Contingent Obligation” means,
as to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to any indebtedness, capital
lease, dividend or other obligation of another Person if the primary purpose or intent of the Person incurring such liability,
or the primary effect thereof, is to provide assurance to the obligee of such liability that such liability will be paid or discharged,
or that any agreements relating thereto will be complied with, or that the holders of such liability will be protected (in whole
or in part) against loss with respect thereto.

 

(r)           
Absence of Litigation. Except as set forth in the SEC Documents, there is no material action, suit, proceeding,
inquiry or investigation before or by the Principal Market, any court, public board, arbitrator, panel, government agency, self-regulatory
organization or body pending or, to the Company’s Knowledge, threatened against or affecting the Company or any of its Subsidiaries,
the Preferred Stock, the consummation of the Proposed Transaction or any of the Company’s or its Subsidiaries’ officers
or directors, whether of a civil or criminal nature or otherwise, in their capacities as such. “Proposed Transaction”
means the acquisition by a wholly owned Subsidiary of the Company of substantially all of the assets of the Star Buds Group on
substantially the terms disclosed by the Company in its 8-K Filings prior to the date hereof. To the Company’s Knowledge,
no director, officer or employee of the Company or any of its Subsidiaries has willfully violated 18 U.S.C. §1519 or engaged
in spoliation in reasonable anticipation of litigation. Without limitation of the foregoing, there has not been, and to the Company’s
Knowledge, there is not pending, contemplated or anticipated, any inquiry or investigation by the SEC involving the Company, any
of its Subsidiaries or any current or former director or officer of the Company or any of its Subsidiaries. The SEC has not issued
any stop order or other order suspending the effectiveness of any registration statement filed by the Company under the 1933 Act
or the 1934 Act. Neither the Company nor any of its Subsidiaries is subject to any order, writ, judgment, injunction, decree, determination
or award of any governmental entity.

 

(s)           
Tax Status. The Company and each of its Subsidiaries (i) has timely made or filed all material foreign, federal and
state income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has
timely paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due
on such returns, reports and declarations, except those being contested in good faith and (iii) has set aside on its books adequate
reserves for the payment of all unpaid taxes. There are no unpaid taxes in any material amount claimed to be due by the taxing
authority of any jurisdiction, except for those being contested in good faith, and the officers of the Company and its Subsidiaries
know of no basis for any such claim.

 

 

 

    	 	11	 

     

    

 

(t)            
Internal Accounting and Disclosure Controls. The Company and each of its Subsidiaries, maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s
general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in
conformity with GAAP, consistently applied during the periods involved, and Applicable Law, and to maintain asset and liability
accountability, (iii) access to assets or incurrence of liabilities is permitted only in accordance with management’s general
or specific authorization and (iv) the recorded accountability for assets and liabilities is compared with the existing assets
and liabilities at reasonable intervals and appropriate action is taken with respect to any difference. The Company maintains disclosure
controls and procedures (as such term is defined in Rule 13a-15 under the 1934 Act) that are effective in ensuring that information
required to be disclosed by the Company in the reports that it files or submits under the 1934 Act is recorded, processed, summarized
and reported, within the time periods specified in the rules and forms of the SEC, including, without limitation, controls and
procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits
under the 1934 Act is accumulated and communicated to the Company’s management, including its principal executive officer
or officers and its principal financial officer or officers, as appropriate, to allow timely decisions regarding required disclosure.
Except as set forth in Schedule 3(s), during the twelve months prior to the date hereof neither the Company nor any of its
Subsidiaries, has received any written notice or correspondence from any accountant relating to any material weakness in any part
of the system of internal accounting controls of the Company or any of its Subsidiaries.

 

(u)          
Off Balance Sheet Arrangements. There is no transaction, arrangement, or other relationship between the Company
or any of its Subsidiaries and an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company
in its 1934 Act filings and is not so disclosed or that otherwise has had or would be reasonably likely to have a Material Adverse
Effect.

 

(v)           
Investment Company Status. Neither the Company nor any of its Subsidiaries, is, and upon consummation of the sale
of the Shares, and for so long as the Buyers hold any Shares, will not be, an “investment company,” an affiliate of
an “investment company,” a company controlled by an “investment company” or an “affiliated person”
of, or “promoter” or “principal underwriter” for, an “investment company” as such terms are
defined in the Investment Company Act of 1940, as amended.

 

(w)          
Acknowledgement Regarding Buyers’ Trading Activity. The Company acknowledges and agrees that, except as otherwise
set forth herein or in any other Transaction Document, (i) the Buyers have not been asked to agree, nor have the Buyers agreed,
to desist from purchasing or selling, long and/or short, securities of the Company, or “derivative” securities based
on securities issued by the Company or to hold the Securities for any specified term; (ii) the Buyers, and counter-parties
in “derivative” transactions to which any Buyer is a party, directly or indirectly, presently may have a “short”
position in the Common Stock; (iii) the Buyers shall not be deemed to have any affiliation with or control over any arm’s
length counter-party in any “derivative” transaction; and (iv) each Buyer may rely on the Company’s obligation
to timely deliver shares of Common Stock as and when required pursuant to the Transaction Documents for purposes of effecting trading
in the Common Stock of the Company. The Company further understands and acknowledges that (a) the Buyers may engage in hedging
and/or trading activities at various times during the period that the Securities are outstanding, and (b) such hedging and/or trading
activities, if any, can reduce the value of the existing stockholders’ equity interest in the Company both at and after the
time the hedging and/or trading activities are being conducted. The Company acknowledges that such aforementioned hedging and/or
trading activities do not constitute a breach of this Agreement or any of the documents executed in connection herewith.

 

(x)           
Manipulation of Price. The Company has not, and, to the Company’s Knowledge, no one acting on its behalf
has, (i) taken, directly or indirectly, any action designed to cause or to result, or that could reasonably be expected to cause
or result, in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of
any of the Securities, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Securities
(other than to placement agents), (iii) paid or agreed to pay to any person any compensation for soliciting another to purchase
any other securities of the Company, or (iv) paid or agreed to pay any Person for research services with respect to any securities
of the Company or any of its Subsidiaries.

 

 

 

    	 	12	 

     

    

 

(y)           
Shell Company Status. The Company is not, and has never been, an issuer identified in, or subject to, Rule 144(i)(1)
of the 1933 Act.

 

(z)           
Compliance with Anti-Money Laundering Laws. Other than as a result of non-compliance with the Controlled Substances
Act (21 U.S.C. §801, et. seq.)that prohibits the cultivation, processing, transportation, sale or possession of Cannabis
or parts of Cannabis including particular cannabinoids, the sale or possession of Cannabis paraphernalia, or advertising the sale
of Cannabis, products containing Cannabis, or Cannabis paraphernalia, the operations of the Company and its Subsidiaries are and
have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements and all other
applicable U.S. and non-U.S. anti-money laundering laws, rules and regulations, including, but not limited to, those of the Currency
and Foreign Transactions Reporting Act of 1970, as amended, the United States Bank Secrecy Act, as amended by the USA PATRIOT Act
of 2001, and the United States Money Laundering Control Act of 1986 (18 U.S.C. §§1956 and 1957), as amended, as well
as the implementing rules and regulations promulgated thereunder, and the applicable money laundering statutes of all applicable
jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered
or enforced by any governmental agency or self-regulatory body (collectively, the “Anti-Money Laundering Laws”),
and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving
the Company or any of its Subsidiaries with respect to the Anti-Money Laundering Laws is pending or, to the Company’s Knowledge,
threatened.

 

(aa)         
Sanctions. Neither the Company nor any of its Subsidiaries, nor any director, officer, employee, agent, affiliate
or other person associated with or acting on behalf of the Company or any of its Subsidiaries or affiliates is, or is directly
or indirectly owned or controlled by, a Person that is currently the subject or the target of any sanctions administered or enforced
by the U.S. government (including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury
or the U.S. Departments of State or Commerce and including, without limitation, the designation as a “Specially Designated
National” or on the “Sectoral Sanctions Identifications List”, collectively “Blocked Persons”),
the United Nations Security Council, the European Union, Her Majesty’s Treasury or any other relevant sanctions authority
(collectively, “Sanctions Laws”); neither the Company, any of its Subsidiaries, nor any director, officer, employee,
agent, affiliate or other person associated with or acting on behalf of the Company or any of its Subsidiaries or affiliates, is
located, organized or resident in a country or territory that is the subject or target of a comprehensive embargo or Sanctions
Laws prohibiting trade with the country or territory, including, without limitation, Crimea, Cuba, Iran, North Korea, Sudan and
Syria (each, a “Sanctioned Country”); the Company maintains in effect and enforces policies and procedures designed
to ensure compliance by the Company and its Subsidiaries with applicable Sanctions Laws; neither the Company, any of its Subsidiaries,
nor any director, officer, employee, agent, affiliate or other person associated with or acting on behalf of the Company or any
of its Subsidiaries or affiliates, acting in any capacity in connection with the operations of the Company, conducts any business
with or for the benefit of any Blocked Person or engages in making or receiving any contribution of funds, goods or services to,
from or for the benefit of any Blocked Person, or deals in, or otherwise engages in any transaction relating to, any property or
interests in property blocked or subject to blocking pursuant to any applicable Sanctions Laws; no action of the Company or any
of its Subsidiaries in connection with (i) the execution, delivery and performance of this Agreement and the other Transaction
Documents, (ii) the issuance and sale of the Securities, or (iii) the direct or indirect use of proceeds from the Securities or
the consummation of any other transaction contemplated hereby or by the other Transaction Documents or the fulfillment of the terms
hereof or thereof, will result in the proceeds of the transactions contemplated hereby and by the other Transaction Documents being
used, or loaned, contributed or otherwise made available, directly or indirectly, to any Subsidiary, joint venture partner or other
person or entity, for the purpose of (i) unlawfully funding or facilitating any activities of or business with any person that,
at the time of such funding or facilitation, is the subject or target of Sanctions Laws, (ii) unlawfully funding or facilitating
any activities of or business in any Sanctioned Country or (iii) in any other manner that will result in a violation by any Person
(including any Person participating in the transaction, whether as underwriter, advisor, investor or otherwise) of Sanctions Laws.
For the past five years, the Company and its Subsidiaries have not knowingly engaged in and are not now knowingly engaged in any
dealings or transactions with any person that at the time of the dealing or transaction is or was the subject or the target of
Sanctions Laws or with any Sanctioned Country.

 

 

 

    	 	13	 

     

    

 

(bb)        
Anti-Bribery. Neither the Company nor any of the Subsidiaries has made any contribution or other payment to any official
of, or candidate for, any federal, state or foreign office in violation of any law. Neither the Company, nor any of its Subsidiaries
or affiliates, nor any director, officer, agent, employee or other person associated with or acting on behalf of the Company, or
any of its Subsidiaries or affiliates, has (i) used any funds for any unlawful contribution, gift, entertainment or other unlawful
expense relating to political activity, (ii) made any direct or indirect unlawful payment to any foreign or domestic government
official or employee, to any employee or agent of a private entity with which the Company does or seeks to do business or to foreign
or domestic political parties or campaigns, (iii) violated or is in violation of any provision of any Applicable Law implementing
the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions or any applicable provision
of the U.S. Foreign Corrupt Practices Act of 1977, as amended, the U.K. Bribery Act 2010, or any other similar law of any other
jurisdiction in which the Company operates its business, including, in each case, the rules and regulations thereunder (the “Anti-Bribery
Laws”), (iv) taken, is currently taking or will take any action in furtherance of an offer, payment, gift or anything
else of value, directly or indirectly, to any person while knowing that all or some portion of the money or value will be offered,
given or promised to anyone to improperly influence official action, to obtain or retain business or otherwise to secure any improper
advantage or (v) otherwise made any offer, bribe, rebate, payoff, influence payment, unlawful kickback or other unlawful payment;
the Company and each of its respective Subsidiaries has instituted and has maintained, and will continue to maintain, policies
and procedures reasonably designed to promote and achieve compliance with the laws referred to in (iii) above and with this representation
and warranty; none of the Company, nor any of its Subsidiaries or affiliates will directly or indirectly use the proceeds of the
Shares or lend, contribute or otherwise make available such proceeds to any subsidiary, affiliate, joint venture partner or other
person or entity for the purpose of financing or facilitating any activity that would violate the laws and regulations referred
to in (iii) above; there are, and have been, no allegations, investigations or inquiries with regard to a potential violation of
any Anti-Bribery Laws by the Company, its Subsidiaries or affiliates, or any of their respective current or former directors, officers,
employees, stockholders, representatives or agents, or other persons acting or purporting to act on their behalf.

 

(cc)         
No Additional Agreements. Except as set forth in Schedule 3(cc), the Company does not have any agreement or
understanding with any Buyer with respect to the transactions contemplated by the Transaction Documents.

 

(dd)        
Disclosure. All disclosure provided to the Buyers regarding the Company and its Subsidiaries, their businesses and
the transactions contemplated hereby, including the schedules to this Agreement and the Confidential PPM, furnished by or on behalf
of the Company or any of its Subsidiaries, is true and correct and does not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under
which they were made, not misleading. All of the written information furnished after the date hereof by or on behalf of the Company
or any of its Subsidiaries, to the Buyers pursuant to or in connection with this Agreement and the other Transaction Documents,
taken as a whole, will be true and correct in all material respects as of the date on which such information is so provided and
will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements
made therein, in the light of the circumstances under which they are made, not misleading. Each press release issued by the Company
or any of its Subsidiaries, during the twelve months preceding the date of this Agreement did not at the time of release contain
any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they were made, not misleading. No event or circumstance
has occurred or information exists with respect to the Company or any of its Subsidiaries, or its or their business, properties,
liabilities, prospects, operations (including results thereof) or conditions (financial or otherwise), which, under Applicable
Law, requires public disclosure at or before the date hereof or announcement by the Company but which has not been so publicly
disclosed. The Company understands and confirms that each of the Buyers will rely on the foregoing representations in effecting
the transactions of securities of the Company. The Company acknowledges and agrees that the Buyers do not make and have not made
any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth
in Section 2.

 

 

 

    	 	14	 

     

    

 

(ee)         
No Disqualification Events. With respect to Securities to be offered and sold hereunder in reliance on Rule
506(b) under the 1933 Act, none of the Company, any of its predecessors, any affiliated issuer, any director, executive officer,
other officer of the Company participating in the offering hereunder, any beneficial owner of 20% or more of the Company’s
outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule
405 under the 1933 Act) connected with the Company in any capacity at the time of sale (each, an “Issuer Covered Person”
and, together, “Issuer Covered Persons”) is subject to any of the “Bad Actor” disqualifications
described in Rule 506(d)(1)(i) to (viii) under the 1933 Act (a “Disqualification Event”), except for a Disqualification
Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine whether any Issuer Covered Person
is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its disclosure obligations under
Rule 506(e), and has furnished to the Buyers a copy of any disclosures provided thereunder.

 

(ff)          
Other Covered Persons. Except as set forth on Schedule 3(ff), the Company is not aware of any Person that
has been or will be paid (directly or indirectly) remuneration for solicitation of Buyers or potential purchasers in connection
with the sale of the Securities.

 

(gg)        
Intellectual Property Rights. The Company and its Subsidiaries own or possess adequate rights or licenses to use
all trademarks, trade names, service marks, service mark registrations, service names, original works of authorship, patents, patent
rights, copyrights, inventions, licenses, approvals, governmental authorizations, trade secrets and other intellectual property
rights and all applications and registrations therefor (“Intellectual Property Rights”) necessary to conduct
their respective businesses as now conducted. To the Company’s Knowledge, there is not any infringement by the Company or
its Subsidiaries of Intellectual Property Rights of others. There is no claim, action or proceeding being made or brought, or to
the Company’s Knowledge, being threatened, against the Company or any of its Subsidiaries regarding its Intellectual Property
Rights, except where such claim, action or proceeding is not reasonably likely to result in a Material Adverse Effect. Neither
the Company nor any of its Subsidiaries has received any written notice alleging any such infringement or claim, action or proceeding.

 

(hh)        
Title. Each of the Company and its Subsidiaries holds good title, or a valid leasehold interests in, to all real
property, leases in real property, facilities or other interests in real property owned or held by the Company or any of its Subsidiaries
that is material to the business of the Company (the “Real Property”). The Real Property is free and clear of
all Liens and is not subject to any rights of way, building use restrictions, exceptions, variances, reservations, or limitations
of any nature except for (a) Liens for current taxes not yet due and payable, (b) zoning laws and other land use restrictions that
do not impair the present or anticipated use of the property subject thereto and (c) those that are not likely to result in a Material
Adverse Effect. Any Real Property held under lease by the Company or any of its Subsidiaries are held by them under valid, subsisting
and enforceable leases with such exceptions as are not material and do not interfere in any material respect with the use made
and proposed to be made of such property and buildings by the Company or any of its Subsidiaries.

 

(ii)           
Fixtures and Equipment. Each of the Company and its Subsidiaries (as applicable) has good title to, or a valid leasehold
interest in, all material tangible personal property, equipment, improvements, fixtures, and other personal property and appurtenances
that are used by the Company or its Subsidiary in connection with the conduct of its business (the “Fixtures and Equipment”).
Each of the Company’s and its Subsidiary’s Fixtures and Equipment are structurally sound, are in good operating condition
and repair, are adequate for the uses to which they are being put, are not in need of maintenance or repairs except for ordinary,
routine maintenance and repairs and are sufficient for the conduct of the Company’s and/or its Subsidiaries’ businesses
(as applicable) in the manner as conducted prior to the Closing. Each of the Company and its Subsidiaries owns all of its Fixtures
and Equipment free and clear of all Liens except for (i) Liens for current taxes not yet due and payable, and (ii) zoning laws
and other land use restrictions that do not impair the present or anticipated use of the property subject thereto.

 

 

 

    	 	15	 

     

    

 

(jj)           
Environmental Laws.

 

(i)            
The Company and its Subsidiaries (A) are in compliance with any and all Environmental Laws (as defined below), other than
those that are not likely to result in a Material Adverse Effect, (B) have received all permits, licenses or other approvals required
of them under applicable Environmental Laws to conduct their respective businesses and (C) are in compliance with all terms and
conditions of any such permit, license or approval where, except in each of the foregoing clauses (A), (B) and (C), where the failure
to so comply or having such permits, licenses or other approval would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect. The term “Environmental Laws” means all federal, state, local or foreign
laws relating to pollution or protection of human health or the environment (including, without limitation, ambient air, surface
water, groundwater, land surface or subsurface strata), including, without limitation, laws relating to emissions, discharges,
releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively,
“Hazardous Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees,
demands or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations issued,
entered, promulgated or approved thereunder.

 

(ii)           
No Hazardous Materials:

 

(1)           
to the Company’s Knowledge, have been disposed of or otherwise released by the Company or any of its Subsidiaries
from any Real Property of the Company or any of its Subsidiaries in violation of any Environmental Laws; or

 

(2)           
to the Company’s Knowledge, are present on, over, beneath, in or upon any Real Property or any portion thereof in
quantities that would constitute a violation of any Environmental Laws. To the Company’s Knowledge, no prior use by the Company
or any of its Subsidiaries of any Real Property has occurred that violates any Environmental Laws, which violation would have a
Material Adverse Effect.

 

(iii)          
To the Company’s Knowledge, neither the Company nor any of its Subsidiaries knows of any other person who or entity
which has stored, treated, recycled, disposed of or otherwise located on any Real Property any Hazardous Materials, including,
without limitation, such substances as asbestos and polychlorinated biphenyls.

 

(iv)          
To the Company’s Knowledge, none of the Real Property is on any federal or state “Superfund” list or Liability
Information System (“CERCLIS”) list or any state environmental agency list of sites under consideration for
CERCLIS, nor subject to any environmental related Liens.

 

(kk)         
Management. During the past five year period, to the Company’s Knowledge, no current named executive officer
(as defined in Item 402 of Regulation S-K) or director has been the subject of:

 

(i)            
a petition under bankruptcy laws or any other insolvency or moratorium law or the appointment by a court of a receiver,
fiscal agent or similar officer for such Person, or any partnership in which such person was a general partner, or any corporation
or business association of which such person was an executive officer;

 

(ii)           
a conviction in a criminal proceeding or a named subject of a pending criminal proceeding (excluding traffic violations
that do not relate to driving while intoxicated or driving under the influence);

 

 

 

    	 	16	 

     

    

 

(iii)          
any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining any such person from, or otherwise limiting, the following activities:

 

(1)           
Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker,
leverage transaction merchant, any other person regulated by the United States Commodity Futures Trading Commission or an associated
person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person,
director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing
any conduct or practice in connection with such activity;

 

(2)           
Engaging in any particular type of business practice; or

 

(3)           
Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any
violation of securities laws or commodities laws;

 

(iv)         
any order, judgment or decree, not subsequently reversed, suspended or vacated, of any authority barring, suspending or
otherwise limiting for more than 60 days the right of any such person to engage in any activity described in the preceding sub
paragraph, or to be associated with persons engaged in any such activity;

 

(v)           
a finding by a court of competent jurisdiction in a civil action or by the SEC or other authority to have violated any securities
law, regulation or decree and the judgment in such civil action or finding by the SEC or any other authority has not been subsequently
reversed, suspended or vacated; or

 

(vi)         
a finding by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have
violated any federal commodities law, and the judgment in such civil action or finding has not been subsequently reversed, suspended
or vacated.

 

(ll)          
Cybersecurity. The Company and its Subsidiaries’ information technology assets and equipment, computers, systems,
networks, hardware, software, websites, applications, and databases (collectively, “IT Systems”) are adequate
for, and operate and perform in all material respects as required in connection with the operation of the business of the Company
and its Subsidiaries as currently conducted, free and clear of all material bugs, errors, defects, Trojan horses, time bombs, malware
and other corruptants. The Company and its Subsidiaries have implemented and maintained commercially reasonable physical, technical
and administrative controls, policies, procedures, and safeguards to maintain and protect their material confidential information
and the integrity, continuous operation, redundancy and security of all IT Systems and data, including “Personal Data,”
used in connection with their businesses. “Personal Data” means (i) a natural person’s name, street address,
telephone number, e-mail address, photograph, social security number or tax identification number, driver’s license number,
passport number, credit card number, bank information, or customer or account number; (ii) any information which would qualify
as “personally identifying information” under the Federal Trade Commission Act, as amended; (iii) “personal data”
as defined by the European Union General Data Protection Regulation (“GDPR”) (EU 2016/679); and (iv) any other
piece of information that allows the identification of such natural person, or his or her family, or permits the collection or
analysis of any data related to an identified person’s health or sexual orientation. To the Company’s Knowledge, there
have been no material breaches, violations, outages or unauthorized uses of or accesses to same, except for those that have been
remedied without material cost or liability or the duty to notify any other person, nor any incidents under internal review or
investigations relating to the same. The Company and its Subsidiaries are presently in material compliance with all applicable
laws or statutes and all judgments, orders, rules and regulations of any court or arbitrator or governmental or regulatory authority,
internal policies and contractual obligations relating to the privacy and security of IT Systems and Personal Data and to the protection
of such IT Systems and Personal Data from unauthorized use, access, misappropriation or modification.

 

 

 

    	 	17	 

     

    

 

(mm)       
Compliance with Data Privacy Laws. The Company and its Subsidiaries are, and at all prior times were, in material
compliance with all applicable state and federal data privacy and security laws and regulations, and the Company and its Subsidiaries
have taken commercially reasonable actions to prepare to comply with, and since May 25, 2018, have been and currently are in compliance
with, the GDPR (EU 2016/679) (collectively, the “Privacy Laws”). To ensure compliance with the Privacy Laws,
the Company and its Subsidiaries have in place, comply with, and take appropriate steps reasonably designed to ensure compliance
in all material respects with their policies and procedures relating to data privacy and security and the collection, storage,
use, disclosure, handling, and analysis of Personal Data (the “Policies”). The Company and its Subsidiaries
have at all times made all disclosures to users or customers required by applicable laws and regulatory rules or requirements,
and none of such disclosures made or contained in any Policy have, to the Company’s Knowledge, been inaccurate or in violation
of any applicable laws and regulatory rules or requirements in any material respect. To the Company’s Knowledge, neither
the Company nor any Subsidiary: (i) has received notice of any actual or potential liability under or relating to, or actual or
potential violation of, any of the Privacy Laws, and has no knowledge of any event or condition that would reasonably be expected
to result in any such notice; (ii) is currently conducting or paying for, in whole or in part, any investigation, remediation,
or other corrective action pursuant to any Privacy Law; or (iii) is a party to any order, decree, or agreement that imposes any
obligation or liability under any Privacy Law.

 

(nn)        
Transfer Taxes. All transfer, stamp, registration, court or documentary, recording, filing or other similar taxes
(other than taxes imposed on or measured by net income (however denominated)) which are required to be paid by the Company in connection
with the issuance, registration, sale or transfer of the Securities to be sold to each Buyer hereunder will be, or will have been,
fully paid or provided for by the Company, and all laws imposing such taxes will be or will have been complied with in all material
respects.

 

(oo)         
Insurance. The Company and each of its Subsidiaries, if any, are insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as management of the Company believes to be prudent and customary in the businesses
in which the Company and its Subsidiaries, if any, are engaged. Neither the Company nor any such Subsidiary, if any, has been refused
any insurance coverage sought or applied for and, to the Company’s Knowledge, neither the Company nor any such Subsidiary,
if any, has any reason to believe that it will be unable to renew its existing insurance coverage as and when such coverage expires
or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have
a Material Adverse Effect.

 

(pp)        
U.S. Real Property Holding Corporation. Neither the Company nor any of its Subsidiaries, if any, is, or has ever
been, a U.S. real property holding corporation within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended,
and the Company and each Subsidiary shall so certify upon a Buyer’s request.

 

(qq)        
No Disagreements with Accountants and Lawyers. There are no material disagreements of any kind presently existing,
or reasonably anticipated by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed
by the Company and the Company is current with respect to any fees owed to its accountants and lawyers which could affect the Company’s
ability to perform any of its obligations under any of the Transaction Documents.

 

4.             
COVENANTS.

 

(a)           
Best Efforts. Each party hereto shall use its best efforts to timely satisfy each of the conditions to be satisfied
by it as provided in Sections 5 and 6.

 

(b)           
Form D and Blue Sky. The Company agrees to file a Form D with respect to the Securities as required under Regulation
D and to provide a copy thereof to the Buyers promptly after such filing. The Company shall, on or before the Closing, take such
action as the Company shall reasonably determine is necessary in order to obtain an exemption for or to qualify the Securities
for sale to the Buyers at the Closing pursuant to this Agreement under applicable securities or “Blue Sky” laws of
the states of the United States (or to obtain an exemption from such qualification), and shall provide evidence of any such action
so taken to the Buyers on or prior to the Closing. The Company shall make all filings and reports relating to the offer and sale
of the Securities required under applicable securities or “Blue Sky” laws of the states of the United States following
the Closing.

 

 

 

    	 	18	 

     

    

 

(c)           
Reporting Status. Until the date on which no Buyer holds any Shares (the “Reporting Period”),
the Company shall timely file all reports required to be filed with the SEC pursuant to the 1934 Act (reports filed in compliance
with the time period specified in Rule 12b-25 promulgated under the 1934 Act or SEC or SEC staff issued relief shall be considered
timely for this purpose), and the Company shall not terminate its status as an issuer required to file reports under the 1934 Act
even if the 1934 Act or the rules and regulations thereunder would no longer require or otherwise permit such termination,
and the Company shall take all actions necessary to maintain its eligibility to register the Underlying Shares for resale by the
Buyers on Form S-1.

 

(d)           
Use of Proceeds. The Company will use the proceeds from the Closing in the manner described in Exhibit D hereto,
provided that in no event may the proceeds be used, directly or indirectly, for the redemption or repurchase of any securities
of the Company or any of its Subsidiaries or repayment of any Indebtedness.

 

(e)           
Financial Information. The Company agrees to send the following to the Buyers that hold Shares during the Reporting
Period (i) unless the following are filed with the SEC through EDGAR and are available to the public through the EDGAR system,
within one Business Day after the filing thereof with the SEC, a copy of its Annual Reports on Form 10-K, any Quarterly Reports
on Form 10-Q, any Current Reports on Form 8-K (or any analogous reports under the 1934 Act) and any registration statements (other
than on Form S-8) or amendments filed pursuant to the 1933 Act, and (ii) copies of any notices and other information made available
or given to the stockholders of the Company generally, contemporaneously with the making available or giving thereof to the stockholders.
As used herein, “Business Day” means any day other than Saturday, Sunday or other day on which commercial banks
in The City of New York are authorized or required by law to remain closed.

 

(f)            
Listing. The Company shall promptly secure the listing of all of the Underlying Shares upon each national securities
exchange and automated quotation system, if any, upon which the Common Stock is then listed (subject to official notice of issuance)
and shall maintain such listing of all Underlying Shares from time to time issuable under the terms of the Preferred Stock. For
so long as any Buyer owns any Shares, (i) the Company shall maintain the authorization for quotation of the Common Stock on the
Principal Market or The New York Stock Exchange, the NYSE American, the Nasdaq Global Market, the Nasdaq Global Select Market,
the OTC Bulletin Board, the OTCQB or the OTCQX (or any successors to any of the foregoing) (“Trading Market”),
and (ii) neither the Company nor any of its Subsidiaries shall take any action which would be reasonably expected to result in
the suspension of quotation of the Common Stock on the Principal Market other than in connection with, as a result of or after
listing of the Common Stock on The New York Stock Exchange, the NYSE American, the Nasdaq Global Market, the Nasdaq Global Select
Market, or any other recognized stock exchange in North America, including, without limitation, the Toronto Stock Exchange, the
TSX Venture Exchange, the NEO Exchange Inc. or the Canadian Securities Exchange (or any successors to any of the foregoing). The
Company shall pay all fees and expenses in connection with satisfying its obligations under this Section 4(f).

 

(g)           
Fees. The Company shall be responsible for the payment of any placement agent fees, financial advisory fees, or broker’s
commissions (other than those for Persons engaged by any Buyer) relating to or arising out of the transactions contemplated hereby,
including, without limitation, any fees or commissions payable to placement agents, including any reasonable legal fees and expenses
of such placement agents. The Company shall pay, and hold the Buyers harmless against, any liability, loss or expense (including,
without limitation, reasonable attorney’s fees and out-of-pocket expenses) arising in connection with any claim relating
to any such payment. Except as otherwise set forth in the Transaction Documents, each party to this Agreement shall bear its own
expenses in connection with the sale of the Shares to the Buyers.

 

(h)           
Disclosure of Transactions and Other Material Information. On or before 9:00 AM New York City time four Business
Days after the date hereof, the Company shall (A) issue a press release disclosing all material terms of the transactions contemplated
hereby and (B) file a Current Report on Form 8-K describing the terms of the transactions contemplated by the Transaction Documents
in the form required by the 1934 Act and attaching the material Transaction Documents to the extent required by law (the “8-K
Filing”). Subject to the foregoing, neither the Company or its Subsidiaries nor the Buyers shall issue any press releases
or any other public statements with respect to the transactions contemplated hereby; provided, however, that the Company shall
be entitled, without the prior approval of the Buyers, to make any press release or other public disclosure with respect to such
transactions (i) in substantial conformity with the 8-K Filing and contemporaneously therewith and (ii) as is required by Applicable
Law. Except for any registration statement filed in accordance with this Agreement, the 8-K Filing and as required by Applicable
Law and Trading Market regulations, without the prior written consent of a Buyer, neither the Company nor any of its Subsidiaries
or affiliates shall disclose the name of such Buyer in any filing, announcement, release or otherwise.

 

 

 

    	 	19	 

     

    

 

(i)            
Reservation of Shares of Common Stock. So long as any Buyer owns any Shares, the Company shall take all action necessary
to at all times after the date hereof have authorized, and reserved for the purpose of issuance, no less than the number of
shares of Common Stock issuable upon conversion of the Shares then outstanding based on the then current conversion price. If at
any time the number of shares of Common Stock so authorized and reserved for issuance is not sufficient to meet the foregoing obligation,
the Company will promptly take all corporate action necessary to authorize and reserve a sufficient number of shares of Common
Stock, including, without limitation, calling a special meeting of stockholders to authorize additional shares of Common Stock
to meet such obligation.

 

(j)            
Buyers Lock-Up. Notwithstanding anything to the contrary contained herein, each Buyer agrees that it will not sell
any Underlying Shares prior to the first anniversary of the Original Issue Date. Each Buyer may sell, in the aggregate, (1) up
to 25% of the Underlying Shares purchased hereunder at any time following the first anniversary of the Original Issue Date until
the eighteen month anniversary of the Original Issue Date, (2) up to 50% of the Underlying Shares purchased hereunder at any time
following the eighteen month anniversary of the Original Issue Date until the second anniversary of the Original Issue Date, and
(3) all of the Underlying Shares purchased hereunder at any time following the second anniversary of the Original Issue Date; provided,
however, that each Buyer may sell all of the Underlying Shares purchased hereunder at any time following the first Listing Event
that occurs after the Original Issue Date; provided further, however, that this Section 4(j) shall not apply to a Buyer’s
Underlying Shares issued upon conversion of Shares in connection with an Anticipated Change of Control Notice or a Forced Redemption
Notice (in the latter case, solely with respect to Underlying Shares issued upon conversion of the Shares that are the subject
of such Forced Redemption Notice).

 

(k)           
Notice of Disqualification Events. The Company will notify the Buyers in writing prior to any Closing of (i) any
Disqualification Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time, become a
Disqualification Event relating to any Issuer Covered Person.

 

(l)             
Compliance with Cannabis Law. The Company shall take all action to comply with state cannabis laws and regulations,
including making all requisite filings under such laws and regulations as and when required.

 

(m)          
Registration.

 

(i)            
After the earlier to occur of (1) a Listing Event (as defined in the Certificate of Designation), and (2) the date that
is 12 months after the Original Issue Date, Buyers holding Shares convertible into shares of Common Stock with a market value that
is equal to at least $10,000,000 shall have the right to require the Company at any time, and from time to time, to file a registration
statement on Form S-1 (or if eligible to use Form S-3, a registration statement on Form S-3) with the SEC covering the resale of
the Underlying Shares (each such registration statement and each registration statement filed pursuant to Section 4(m)(ii),
a “Resale Registration Statement”).

 

(ii)           
The Company also agrees that to the extent it files any registration statement with the SEC, other than a registration statement
on Form S-8, Form S-4 or Form S-3, it will prior to filing such registration statement, give the Buyers reasonable written notice
in order to permit the Buyers to include in such registration statement, the resale of the Underlying Shares; provided, however,
that if, solely in connection with any primary underwritten public offering for the account of the Company, the managing underwriter(s)
thereof shall, in its reasonable discretion, impose a limitation on the number of Underlying Shares which may be included in such
registration statement because, in such underwriter(s)’ judgment, marketing or other factors dictate such limitation is necessary
to facilitate public distribution, then the Company shall be obligated to allocate for inclusion in such registration statement
the Underlying Shares of each participating holder of Underlying Shares in direct proportion (as nearly as practicable) to the
number of Underlying Shares requested to be included by such holder; provided, however, that the Buyers shall not be disproportionately
negatively affected as compared to other holders of Company securities to be registered.

 

 

 

    	 	20	 

     

    

 

(iii)          
The Company will promptly file and use best efforts to cause to become promptly effective such Resale Registration Statement
as well as any filings required under any applicable state securities laws or regulations. The Company shall keep such Resale Registration
Statement effective until the earlier of (1) such time as all of the Underlying Shares registered for resale under such Resale
Registration Statement have been sold pursuant to such Resale Registration Statement or otherwise, or (2) such time as the Underlying
Shares registered for resale under such Resale Registration Statement may be sold under Rule 144 without restriction or limitation
and without the requirement to be in compliance with Rule 144(c)(1). The Buyers’ right to demand registration of the Underlying
Shares shall not terminate until such time as all the Underlying Shares have been registered for resale with the SEC and the Buyers
have sold or otherwise transferred to Persons not affiliated with the Buyers all of such Underlying Shares. All costs related to
the preparation, filing and effectiveness of such registrations, including accounting and legal fees and expenses (including reasonable
fees and expenses of counsel for the Buyers) shall be borne by the Company. The Company will enter into an agreement with the Buyers
including customary terms and conditions for any such registration, including customary indemnification provisions.

 

(iv)          
Notwithstanding the foregoing obligations, the Company may, upon written notice to the Buyers, for a reasonable period of
time, not to exceed 45 days in the case of clauses (1) and (2) below, or 30 days in the case of clause (3) below (each, a “Suspension
Period”), delay the filing of a Resale Registration Statement or a request for acceleration of the effective date, or
suspend the effectiveness of any Resale Registration Statement, in the event that (1) the Company is engaged in any activity or
transaction or preparations or negotiations for any activity or transaction that the Company desires to keep confidential for business
reasons, if the Company’s board of directors determines in its reasonable good faith judgement that the public disclosure
requirements imposed on the Company under the Securities Act in connection with the Resale Registration Statement would require
at that time disclosure of such activity, transaction, preparations or negotiations and such disclosure could result in material
harm to the Company or its business transactions or activities, (2) the Company does not yet have appropriate financial statements
of any acquired or to be acquired entities necessary for filing, or (3) any other event occurs that makes any statement of a material
fact made in such Resale Registration Statement, including any document incorporated by reference therein, untrue or that requires
the making of any additions or changes in the Resale Registration Statement in order to make the statements therein not misleading.
The Company may not invoke its right to suspend or delay a registration statement pursuant to this Section 4(m)(iv) more than twice
in any twelve month period. If the Company suspends the effectiveness of a Resale Registration Statement pursuant to this Section
4(m)(iv), the Company shall, as promptly as reasonably practicable following the termination of the circumstance which entitled
the Company to do so, take such actions as may be necessary to reinstate the effectiveness of such Resale Registration Statement
and give written notice to the applicable Buyers authorizing the applicable Buyers to resume offerings and sales pursuant to such
Resale Registration Statement.

 

(v)           
It shall be a condition precedent to the obligations of the Company to file or effect any Resale Registration Statement
pursuant to this Section 4(m) that each Buyer who desires to include Underlying Shares in such Resale Registration Statement shall
furnish to the Company such information regarding itself, the Company securities held by it and the intended method of disposition
of the Underlying Shares held by it as shall be reasonably required to effect and maintain the effectiveness of the registration
of such Resale Registration Statement and shall execute such documents in connection with such registration as the Company may
reasonably request.

 

(vi)          
Notwithstanding anything contained herein to the contrary, the Company shall not be obligated to (1) effect a registration
pursuant to this Section 4(m) within 90 days after the effective date of a previous registration; (2) effect a registration pursuant
to this Section 4(m) unless the request is for a number of shares of Common Stock with a market value that is equal to at least
$3,000,000 as of the date of such request; (3) effect a registration if the Company has effected two registrations on a Resale
Registration Statement in the 12-month period prior to such request, or (4) file or effect a Resale Registration Statement with
respect to any Underlying Shares subject to a registration demand that may be sold under Rule 144 without restriction or limitation
and without the requirement to be in compliance with Rule 144(c)(1) limitation.

 

(n)           
Closing Documents. On or prior to 14 calendar days after each Closing, the Company agrees to deliver, or cause to
be delivered, to the Buyers a complete closing set of the executed Transaction Documents and any other documents required to be
delivered to any party hereto pursuant to Section 6 hereof or otherwise.

 

 

 

    	 	21	 

     

    

 

(o)           
Equity Incentive Plan Limitation. For as long as any Buyer holds any Shares, without the prior written consent of
Buyers holding at least a majority of the then-outstanding Shares, the Company shall not have issued and outstanding awards under
any equity incentive plan for the issuance of shares of Common Stock representing more than 12% of the then-issued and outstanding
shares of Common Stock (calculated on an as-converted, fully-diluted basis, excluding warrants) in the aggregate.

 

(p)           
Regulation M. The Company will not take any action prohibited by Regulation M under the 1934 Act, in connection with
the distribution of the Securities contemplated hereby.

 

(q)           
General Solicitation. None of the Company, any of its affiliates (as defined in Rule 501(b) under the 1933 Act) or
any person acting on behalf of the Company or such affiliate will solicit any offer to buy or offer or sell the Preferred Stock
by means of any form of general solicitation or general advertising within the meaning of Regulation D, including: (i) any advertisement,
article, notice or other communication published in any newspaper, magazine or similar medium or broadcast over television or radio;
and (ii) any seminar or meeting whose attendees have been invited by any general solicitation or general advertising.

 

(r)            
Integration. None of the Company, any of its affiliates (as defined in Rule 501(b) under the 1933 Act), or any person
acting on behalf of the Company or such affiliate will sell, offer for sale, or solicit offers to buy or otherwise negotiate in
respect of any security (as defined in the 1933 Act) which will be integrated with the sale of the Securities in a manner which
would require the registration of the Securities under the 1933 Act or require stockholder approval under the rules and regulations
of the Principal Market and the Company will take all action that is appropriate or necessary to assure that its offerings of other
securities will not be integrated for purposes of the 1933 Act or the rules and regulations of the Principal Market, with the issuance
of Securities contemplated hereby.

 

(s)           
Pledge of Securities. The Company acknowledges and agrees that the Securities may be pledged in connection with a
bona fide margin account with a FINRA registered broker/dealer or other loan or financing arrangement with an Accredited Investor
secured by the Securities and such pledge of Securities shall not be deemed to be a transfer, sale or assignment of the Securities
hereunder, and if the Buyer effects such a pledge of Securities it shall not be required to provide the Company with any notice
thereof or otherwise make any delivery to the Company pursuant to this Agreement or any other Transaction Document, including,
without limitation, this Section 2(f).

 

5.             
CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL.

 

(a)           
The obligation of the Company hereunder to issue and sell the Shares to the Buyers at the Closing is subject to the satisfaction,
at or before the Closing, of each of the following conditions, provided that these conditions are for the Company’s sole
benefit and may be waived by the Company at any time in its sole discretion by providing the Buyers with prior written notice thereof:

 

(i)             
Each Buyer shall have executed each of the Transaction Documents to which it is a party and delivered the same to the Company.

 

(ii)           
Each Buyer shall have delivered to the Company such Buyer’s aggregate Purchase Price, for the Shares being purchased
by such Buyer at the Closing by wire transfer of immediately available funds pursuant to the wire instructions provided by the
Company.

 

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

 

 

 

    	 	22	 

     

    

 

(iv)          
The Company shall have received the Dye SPA Waiver.

 

(v)           
The Company shall have raised or otherwise secured a minimum of $72 million of capital from any combination of the sale
of shares of Preferred Stock and proceeds to be disbursed to the Company from a loan under a credit facility evidenced by a commitment
to lend (provided that such commitment may be subject to conditions to draw on the credit facility and may be funded in tranches;
exclusive of original issue discount on the loan).

 

(vi)          
The Company shall have received a financial fairness opinion regarding the Preferred Stock and the rights, preferences and
privileges set forth in the Certificate of Designation.

 

6.             
CONDITIONS TO EACH BUYER’S OBLIGATION TO PURCHASE.

 

(a)           
The obligation of each Buyer hereunder to purchase the Shares that such Buyer is purchasing at the Closing is subject to
the satisfaction, at or before the Closing, of each of the following conditions, provided that these conditions are for such Buyer’s
sole benefit and may be waived by such Buyer at any time in its sole discretion by providing the Company with prior written notice
thereof:

 

(i)             
The Company shall have duly executed and delivered to such Buyer (A) each of the Transaction Documents, and (B) the Shares
being purchased by such Buyer at the Closing pursuant to this Agreement.

 

(ii)           
The Company shall have delivered to such Buyer evidence of the filing and acceptance of the Certificate of Designation from
the Nevada Secretary of State.

 

(iii)          
The Company shall have delivered to such Buyer a certificate, executed by the Secretary of the Company and dated as of the
Closing, as to (i) the resolutions consistent with Section 3(b) as adopted by the Company’s Board of Directors
in a form reasonably acceptable to such Buyer, (ii) the Articles of Incorporation and (iii) the Bylaws, each as in effect at the
Closing, in the form attached hereto as Exhibit B.

 

(iv)          
The representations and warranties of the Company shall be true and correct as of the date when made and as of the Closing
as though made at that time (except for representations and warranties that speak as of a specific date which shall be true and
correct as of such specified date) and the Company shall have performed, satisfied and complied in all material respects with the
covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by the Company
at or prior to the Closing. Such Buyer shall have received a certificate, executed by the Chief Executive Officer of the Company,
dated as of the Closing, to the foregoing effect and as to such other matters as may be reasonably requested by such Buyer in the
form attached hereto as Exhibit C.

 

(v)           
The Common Stock (I) shall be designated for quotation on the Principal Market and (II) shall not have been suspended, as
of the Closing, by the SEC or the Principal Market from trading on the Principal Market nor shall suspension by the SEC or the
Principal Market have been threatened, as of the Closing, either (A) in writing by the SEC or the Principal Market or (B) by falling
below the minimum listing maintenance requirements of the Principal Market.

 

(vi)         
The Company shall have obtained all governmental, regulatory or third party consents and approvals, if any, necessary for
the sale of the Shares and the consummation of the transactions contemplated hereby.

 

(vii)         
The Company shall have delivered to such Buyer such other documents relating to the transactions contemplated by this Agreement
as such Buyer or its counsel may reasonably request.

 

 

 

    	 	23	 

     

    

 

(viii)        
The Company shall have received the Dye SPA Waiver.

 

(ix)          
The Company shall have raised or otherwise secured a minimum of $72 million of capital from any combination of the sale
of shares of Preferred Stock and proceeds to be disbursed to the Company from a loan under a credit facility evidenced by a commitment
to lend (provided that such commitment may be subject to conditions to draw on the credit facility and may be funded in tranches;
exclusive of original issue discount on the loan).

 

(x)           
All of the conditions precedent to the obligations of the parties to the Proposed Transaction to consummate the Proposed
Transaction shall have been satisfied or waived, such that the Proposed Transaction shall close upon the funding pursuant to this
Agreement and the Transaction Documents.

 

7.             
TERMINATION. In the event that the Closing shall not have occurred on or before November 30, 2020 due to the Company’s
or the Buyers’ failure to satisfy the conditions set forth in Sections 5 and 6 above (and the nonbreaching
party’s failure to waive such unsatisfied condition(s)), the nonbreaching party shall have the option to terminate this Agreement
with respect to such breaching party at the close of business on such date by delivering a written notice to that effect to each
other party to this Agreement and without liability of any party to any other party; provided, however, that notwithstanding the
foregoing the Buyers shall not be deemed to have waived any right to seek damages in respect of any breach of this Agreement by
the Company and shall have all remedies available to it pursuant to this Agreement, under law or at equity.

 

8.             
MISCELLANEOUS.

 

(a)          
Governing Law; Jurisdiction; Jury Trial. All questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by the internal laws of the State of Nevada, without giving effect to any choice of law or
conflict of law provision or rule (whether of the State of Nevada or any other jurisdictions) that would cause the application
of the laws of any jurisdictions other than the State of Nevada. Each party hereby irrevocably submits to the exclusive jurisdiction
of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees
not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court,
that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit,
action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees
that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be
deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH
OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

(b)           
Counterparts. This Agreement may be executed in two or more counterparts, all of which shall be considered one and
the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party;
provided that a facsimile or .pdf signature shall be considered due execution and shall be binding upon the signatory thereto with
the same force and effect as if the signature were an original, not a facsimile or .pdf signature.

 

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

 

 

 

    	 	24	 

     

    

 

(d)          
Severability. If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable
by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed
amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such
provision shall not affect the validity of the remaining provisions of this Agreement so long as this Agreement as so modified
continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited
nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations
or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the
parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s)
with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).

 

(e)           
Entire Agreement; Amendments. This Agreement and the other Transaction Documents supersede all other prior oral or
written agreements between the Buyers, the Company, their affiliates and Persons acting on their behalf with respect to the matters
discussed herein, and this Agreement, the other Transaction Documents and the instruments referenced herein and therein contain
the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set
forth herein or therein, neither the Company nor the Buyers makes any representation, warranty, covenant or undertaking with respect
to such matters. No provision of this Agreement may be amended or waived other than by an instrument in writing signed by
the Company and the Buyers holding a majority of the then-outstanding Shares, and any amendment or waiver to this Agreement made
in conformity with the provisions of this Section 8(e) shall be binding on all holders of Securities and the Company;
provided, however, that no amendment shall be effective against any Buyer that is disproportionately affected by such amendment
as compared to any other Buyer without such Buyer’s written consent; provided, further, that no amendment requiring any Buyer
to purchase additional Securities shall be effective against a Buyer without such Buyer’s written consent; provided, further,
that no waiver of the provisions of Section 6(a) shall be effective against a Buyer without such Buyer’s written consent.
No such amendment shall be effective to the extent that it applies to less than all of the holders of the applicable Securities
then outstanding. No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification
of any provision of any of the Transaction Documents unless the same consideration (other than the reimbursement of legal fees)
also is offered to all of the parties to the Transaction Documents; provided, however, for clarity, any Person’s participation
in a subsequent securities offering of the Company shall not be consideration for this purpose. The Company has not, directly or
indirectly, made any agreements with the Buyers relating to the terms or conditions of the transactions contemplated by the Transaction
Documents except as set forth in the Transaction Documents. Without limiting the foregoing, the Company confirms that, except as
set forth in this Agreement, the Buyers has not made any commitment or promise or has any other obligation to provide any financing
to the Company or otherwise. Whenever this Agreement requires the consent or approval of the holders of the Preferred Stock, unless
otherwise expressly and specifically set forth in this Agreement, such consent or approval shall require the approval of the Buyers
holding a majority of the then-outstanding Shares.

 

(f)            
Notices. Any notices, consents, waivers or other communications required or permitted to be given under the terms
of this Agreement or any of the other Transaction Documents must be in writing and will be deemed to have been delivered: (i) upon
receipt, when delivered personally; (ii) upon delivery, when sent by facsimile (provided confirmation of transmission is mechanically
or electronically generated and kept on file by the sending party) or by electronic mail; (iii) upon delivery, when sent by electronic
mail (provided that the sending party does not receive an automated rejection notice); or (iv) upon receipt, when sent by overnight
courier service, in each case properly addressed to the party to receive the same. The addresses, facsimile numbers and e-mail
addresses for such communications shall be:

 

If to the Company:

 

Medicine Man Technologies, Inc.

4880 Havana Street, Suite 201

Denver, CO 80239

Telephone:       (303)
371-0387

Facsimile:       (303)
371-0598

Attention:       General
Counsel

E-mail:       dan@schwazze.com

 

 

 

    	 	25	 

     

    

 

If to a Buyer, to such Buyer’s address
and e-mail address set forth on the Schedule of Buyers hereto, with copies to such Buyer’s representatives as set forth on
its signature page hereto. Any notice address, facsimile number or email address for a party may be changed by delivering such
other address, facsimile number and/or e-mail address and/or to the attention of such other Person as the specified by written
notice given to the Company or the Buyers, as applicable, five calendar days prior to the effectiveness of such change. Written
confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically
or electronically generated by the sender’s facsimile machine or e-mail containing the time, date, recipient facsimile number
and an image of the first page of such transmission or (C) provided by an overnight courier service shall be rebuttable evidence
of personal service, receipt by facsimile or receipt from an overnight courier service in accordance with clause (i), (ii) or (iii)
above, respectively.

 

(g)           
Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective
successors and assigns. The Company shall not assign this Agreement or any rights or obligations hereunder without the prior written
consent of the Buyers holding a majority of the then-outstanding Shares. A Buyer shall not assign this Agreement or any rights
or obligations hereunder without the prior written consent of the Company.

 

(h)           
No Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective
permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

 

(i)            
Survival. Unless this Agreement is terminated under Section 7, the covenants and agreements of the Company and the
Buyer shall survive the Closing. Each Buyer shall be responsible only for its own representations, warranties, agreements and covenants
hereunder. The representations and warranties of the Company shall survive the Closing until the two year anniversary thereof.

 

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

 

(k)           
Indemnification.

 

(i)            
In consideration of each Buyer’s execution and delivery of the Transaction Documents and acquiring the Securities
thereunder and in addition to all of the Company’s other obligations under the Transaction Documents, the Company shall defend,
protect, indemnify and hold harmless each Buyer and all of their stockholders, partners, members, officers, directors, employees
and direct or indirect investors and any of the foregoing Persons’ agents or other representatives (including, without limitation,
those retained in connection with the transactions contemplated by this Agreement) (collectively, the “Indemnitees”)
from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages,
other than special, exemplary, incidental, punitive or consequential damages, including lost profits, diminution in value, damage
to reputation or the like unless any such damages are awarded to a third party, and expenses in connection therewith (irrespective
of whether any such Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable
attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred by any Indemnitee as a result
of, or arising out of, or relating to (x) any misrepresentation or breach of any representation or warranty made by the Company
or any Subsidiary in this Agreement, or (y) any breach of any covenant, agreement or obligation of the Company or any Subsidiary
contained in this Agreement or (z) any untrue or alleged untrue statement of a material fact contained in any Resale Registration
Statement or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading; provided, however, that the Company will not be liable
in any such case to the extent that any such Indemnified Liabilities (A) arise primarily out of or is based primarily upon the
inaccuracy of any representations and warranties made by such Buyer in this Agreement or (B) are caused by or contained in any
information furnished in writing to the Company by a Buyer expressly for use in a Resale Registration Statement or any amendment
thereof or supplement thereto. To the extent that the foregoing undertaking by the Company may be unenforceable for any reason,
the Company shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law. Notwithstanding anything to the contrary herein, the Company’s aggregate liability under
this Section 8(k) to any Indemnitee shall not exceed the Purchase Price paid by the applicable Buyer.

 

 

 

    	 	26	 

     

    

 

(ii)           
Promptly after receipt by an Indemnitee under this Section 8(k) of notice of the commencement of any action or proceeding
(including, without limitation, any governmental action or proceeding) involving an Indemnified Liability, such Indemnitee shall,
if a claim in respect thereof is to be made against any indemnifying party under this Section 8(k), deliver to the indemnifying
party a written notice of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to
the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of
the defense thereof with counsel mutually satisfactory to the indemnifying party and the Indemnitee; provided, however, that an
Indemnitee shall have the right to retain its own counsel with the fees and expenses of such counsel to be paid by the indemnifying
party if: (x) the indemnifying party has agreed in writing to pay such fees and expenses; (y) the indemnifying party shall have
failed promptly to assume the defense of such Indemnified Liability and to employ counsel reasonably satisfactory to such Indemnitee
in any such Indemnified Liability; or (z) the named parties to any such Indemnified Liability (including, without limitation, any
impleaded parties) include both such Indemnitee and the indemnifying party, and such Indemnitee shall have been advised by counsel
that a conflict of interest is likely to exist if the same counsel were to represent such Indemnitee and the indemnifying party
(in which case, if such Indemnitee notifies the indemnifying party in writing that it elects to employ separate counsel at the
expense of the indemnifying party, then the indemnifying party shall not have the right to assume the defense thereof and such
counsel shall be at the expense of the indemnifying party), provided further that in the case of clause (z) above the indemnifying
party shall not be responsible for the reasonable fees and expenses of more than one (1) separate legal counsel for such Indemnitee.
The Indemnitee shall reasonably cooperate with the indemnifying party in connection with any negotiation or defense of any such
action or claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the
Indemnitee which relates to such Indemnified Liability. The indemnifying party shall keep the Indemnitee reasonably apprised at
all times as to the status of the defense or any settlement negotiations with respect thereto. No indemnifying party shall be liable
for any settlement of any action, claim or proceeding effected without its prior written consent; provided, however, the indemnifying
party shall not unreasonably withhold, delay or condition its consent. No indemnifying party shall, without the prior written consent
of the Indemnitee, consent to entry of any judgment or enter into any settlement or other compromise which does not include as
an unconditional term thereof the giving by the claimant or plaintiff to such Indemnitee of a release from all liability in respect
to such Indemnified Liability, and such settlement shall not include any admission as to fault on the part of the Indemnitee. Following
indemnification as provided for hereunder, the indemnifying party shall be subrogated to all rights of the Indemnitee with respect
to all third parties, firms or corporations relating to the matter for which indemnification has been made. The failure to deliver
written notice to the indemnifying party within a reasonable time of the commencement of any such action shall not relieve such
indemnifying party of any liability to the Indemnitee under this Section 8(k), except to the extent that the indemnifying party
is materially and adversely prejudiced in its ability to defend such action. The indemnity agreements contained herein shall be
in addition to (A) any cause of action or similar right of the Indemnitees against the indemnifying party or others, and (B) any
liabilities the indemnifying party may be subject to pursuant to the law.

 

(l)             
Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied against any party. Each party hereto agrees that
such party and/or its legal counsel has reviewed and had an opportunity to revise the Transaction Documents and, therefore, the
normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and every reference to share prices
and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse and forward stock splits, stock
dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement.

 

(m)          
Remedies. The Buyers and each holder of the Securities shall have all rights and remedies set forth in the Transaction
Documents and all rights and remedies which such holders have been granted at any time under any other agreement or contract and
all of the rights which such holders have under any law. Any Person having any rights under any provision of this Agreement shall
be entitled to enforce such rights specifically (without posting a bond or other security), to recover damages by reason of any
breach of any provision of this Agreement and to exercise all other rights granted by law. Furthermore, the Company recognizes
that in the event that it fails to perform, observe, or discharge any or all of its obligations under the Transaction Documents,
any remedy at law may prove to be inadequate relief to the Buyers. The Company therefore agrees that the Buyers shall be entitled
to seek temporary and permanent injunctive relief in any such case without the necessity of proving actual damages and without
posting a bond or other security. The remedies provided in this Agreement and the other Transaction Documents shall be cumulative
and in addition to all other remedies available under this Agreement and the other Transaction Documents, at law or in equity (including
a decree of specific performance and/or other injunctive relief).

 

 

 

    	 	27	 

     

    

 

(n)           
Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions
of) this Agreement, whenever any Buyer exercises a right, election, demand or option under this Agreement and the Company or any
Subsidiary does not timely perform its related obligations within the periods therein provided, then such Buyer may rescind or
withdraw, in its sole discretion from time to time upon written notice to the Company or such Subsidiary (as the case may be),
any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights.

 

(o)          
Payment Set Aside. To the extent that the Company makes a payment or payments to a Buyer hereunder or pursuant to
any of the other Transaction Documents or a Buyer enforces or exercises its rights hereunder or thereunder, and such payment or
payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent
or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company,
a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, foreign, state or federal
law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement
or setoff had not occurred.

 

(p)           
Independent Nature of Buyers’ Obligations and Rights. The obligations of each Buyer under any Transaction Document
are several and not joint with the obligations of any other Buyer, and no Buyer shall be responsible in any way for the performance
or non-performance of the obligations of any other Buyer under any Transaction Document. Nothing contained herein or in any other
Transaction Document, and no action taken by any Buyer pursuant hereto or thereto, shall be deemed to constitute the Buyers as
a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Buyers are in any
way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents.
Each Buyer shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising
out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Buyer to be joined
as an additional party in any proceedings for such purpose. Each Buyer has been represented by its own separate legal counsel in
its review and negotiation of the Transaction Documents. The Company has elected to provide all Buyers with the same terms and
Transaction Documents for the convenience of the Company and not because it was required or requested to do so by any of the Buyers.
It is expressly understood and agreed that each provision contained in this Agreement and in each other Transaction Document is
between the Company and the Buyer, solely, and not between the Company and the Buyers collectively and not between and among the
Buyers.

 

(q)           
Enforcement Fees. The prevailing party in any dispute under or relating to this Agreement shall have the right to
collect from the other all costs and expenses incurred by such prevailing party as a result of enforcement of this Agreement and
the collection of any amounts owed to such prevailing party hereunder (whether in cash, equity or otherwise), including, without
limitation, reasonable attorneys’ fees and expenses.

 

[Signature Page(s) Follows]

 

 

 

 

 

 

 

 

 

 

 

    	 	28	 

     

    

 

IN WITNESS WHEREOF,
the Buyers and the Company have caused their respective signature page to this Securities Purchase Agreement to be duly executed
as of the date first written above.

 

	 	COMPANY:
	 	 	 
	 	MEDICINE MAN TECHNOLOGIES, INC.
	 	 	 
	 	By:	/s/ Leonardo Riera
	 	 	Name: Leonardo Riera
	 	 	Title: Member of the Special Committee 

 

 

IN WITNESS WHEREOF,
the Buyers and the Company have caused their respective signature page to this Securities Purchase Agreement to be duly executed
as of the date first written above.

 

	 	BUYERS:
	 	 	 
	 	Dye Capital Cann Holdings II, LLC
	 	 	 
	 	 	 
	 	 	 
	 	By:	/s/ Justin Dye
	 	 	Name: Justin Dye
	 	 	Title: Managing Member

 

	 	 
	 	Copies of notices to:
	 	 
	 	 
	 	 
	 	Attention: Justin Dye
	 	Email: justin@dyecapital.com

 

 

 

    	 	29

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