Document:

Exhibit
10.38

 

EMPLOYMENT
AGREEMENT

 

THIS
AGREEMENT (this “Agreement”), dated and effective as of August 17th, 2017 (the “Effective
Date”), by and among Trans-High Corporation, a corporation organized under the laws of the State of New York,
doing business as “High Times” (the “Company”); and Scott McGovern, an individual
(hereinafter sometimes referred to as the “Employee”). The Company and each of its subsidiaries and
divisions are hereinafter sometimes individually or collectively referred to as the “Employer.”

 

W
I T N E S S E T H:

 

WHEREAS,
the Company is engaged in the production and sale of one or more print and digital publications and/or the establishment and
production of seminars, conferences or events dedicated primarily to cannabis and the cannabis culture (collectively, the “Business”);
and

 

WHEREAS,
the Employer desires to retain the services of Employee, and Employee desires to be employed by the Employer; and

 

NOW,
THEREFORE, in consideration of the mutual promises and covenants herein contained, the parties hereto agree as follows:

 

1.
Employment. Subject to the provisions of Section 7, the Employer agrees to employ Employee, and Employee agrees
to accept such employment, upon the terms and conditions set forth herein.

 

2.
Duties.

 

2.1
Position. Employee will be employed as the Senior Vice President of Publishing of the Employer, responsible for the
oversight of the Company’s print and on-line publications. In such connection, the Employee shall report to the Chief Executive
Officer of the Company and Holdings and shall have the duties and responsibilities assigned by the Chief Executive Officer. Employee
shall perform faithfully and diligently all duties and responsibilities to be performed and assigned to him. The Boards of the
Employer or the Chief Executive Officer reserves the right to modify Employee’s position and duties at any time in its reasonable
discretion.

 

2.2
Best Efforts/Full-time. Employee will expend Employee’s best efforts on behalf of the Employer, and will abide
by all policies and decisions made by the Employer, as well as all applicable federal, state and local laws, regulations or ordinances.
Employee will act in the best interest of the Employer at all times. Employee shall devote Employee’s full business time
and efforts to the performance of Employee’s duties and responsibilities for the Employer. Notwithstanding any of the foregoing,
it is expressly agreed and understood that Employee shall be entitled to spend a reasonable amount of his working time on (i)
charitable activities and personal investments and (ii) other business-related ventures subject to approval by the Board.

 

    

     

    

 

2.3
Location. Employee will initially be located in New York. Employee will engage in such traveling as may be required
for the performance of his duties and responsibilities on behalf of the Employer.

 

3.
Duration of Employment; Termination. The employment relationship pursuant to this Agreement shall be for a term commencing
on and as of the Effective Date and continuing for the period ending September 30, 2020 (the “Contemplated
Term”), unless sooner terminated in accordance with Section 7 below (the “Term”).
The parties hereto may by mutual consent extend the Contemplated Term beyond September 30, 2020.

 

4.
Compensation.

 

4.1
Base Salary. During the Contemplated Term, the Employer shall pay to Employee an initial base salary at the annual
rate of Two Hundred and Fifty Thousand ($250,000) Dollars as compensation for Employee’s performance of Employee’s
duties hereunder (the “Base Salary”). Such Base Salary shall be made payable in accordance with the
normal payroll practices of the Employer, less required deductions for state and federal withholding tax, social security and
all other employment taxes and payroll deductions.

 

4.2 Annual
Bonus. During the period commencing on the Effective Date and ending each twelve (12) consecutive month period thereafter
during the Term of this Agreement (each an “Anniversary Period”), The Employee shall be entitled to
receive an annual bonus, the “Bonus”), not to exceed an additional Two Hundred and Fifty Thousand ($250,000)
Dollars in each Anniversary Period, subject to the Employee being directly responsible for the Employer achieving certain increases
in their consolidated net revenues (the “Revenue Targets”) at the end of each relevant Anniversary Period
which shall be in excess of such consolidated net revenues derived in the immediately preceding Anniversary Period.
Such Revenue Targets and other conditions to vesting of the Bonus shall be consistent with the Employee’s duties and position
with the Employer and shall be on such terms to be established by the Board of Directors of the Company (as such Board will be
constituted for purposes of obtaining a listing on a National Securities Exchange) within 120 days from the Effective Date and
set forth in a schedule to this Agreement, subject to shareholder approval intended to satisfy the rules under Section 162(m)
of the Internal Revenue Code of 1986, as amended (the “Code”) for performance-based compensation, for fiscal years
ending after December 31, 2017. Employer shall use its best efforts to procure such shareholder approval, and, failing to do so,
in consultation with Employee, Employer agrees to negotiate in good faith with Employee for the implementation of a reasonable
alternative, for which Employer will again use its best efforts to obtain shareholder approval. In the event the Employee’s
employment is terminated by the Employer prior to the end of any Anniversary Period, if a Bonus has been earned by the end of
such Anniversary Period, the amount of such Bonus shall be appropriately pro-rated. To the extent earned, the Bonus shall be payable
within 60 days following the expiration of each Anniversary Period. The Bonus shall be payable at the Company’s sole option
in stock or in cash, and if paid in stock it shall be based upon the price of stock as of the date that such Bonus was earned.

 

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4.3
Time Off. Employee shall accrue personal time of for sick leave, personal reasons, and holidays according to applicable
Company policy, except that Employee shall accrue personal time off for vacation in accordance with the Employee’s accrual rate
of 14 days per each calendar year (with an additional 7 days for each year of service), which may be rolled over (applied) to
the subsequent year in addition to each calendar’s year accrual.

 

5.
Fringe Benefits. Employee will be eligible for all customary and usual fringe benefits generally available to other
employees of the Employer as are described in the employee handbook of the Company and which may be changed at the Company’s
discretion from time to time. The Employer reserves the right to change or eliminate in its sole discretion fringe benefits on
a prospective basis, at any time. The Employee shall at all abide by the Employer’s policies, rules and standards. In addition,
the Employee shall sign an acknowledgment that he understands the Company’s rules of conduct which are included in the Company
Handbook.

 

6.
Business Expenses. Employee shall be reimbursed by the Employer for any actual out of pocket business expenses, including
reasonable travel, relocation, and other reasonable business expenses incurred by Employee in connection with Employee’s
services on behalf of the Employer in accordance with the Employer’s customary policies and procedures; provided that Employee
shall submit proof of such expenses prior to reimbursement within a reasonable amount of time following such expenses. Employee
will adhere to travel policies and expense submissions. The Employer reserves the right to change such policies and procedures
on a prospective basis, at any time, effective upon reasonable notice to Employee.

 

7.
Termination of Employee’s Employment.

 

7.1
Termination for Cause by Company. Although the Employer anticipates a mutually rewarding employment relationship with
Employee, the Employer may terminate Employee’s employment immediately at any time for Cause. For purposes of this Agreement,
“Cause” is defined as the occurrence of any one of the following: (a) any acts or omissions constituting
gross negligence or willful misconduct on the part of Employee that is materially injurious to the business of the Employer; (b)
Employee’s material breach of the provisions of Sections 10, 11, 12 or 13 of this Agreement that is materially injurious
to the Employer; (d) Employee’s conviction or entry of a plea of nolo contendere for fraud, misappropriation
or embezzlement, or any felony (other than traffic-related or similar offenses) or crime of moral turpitude; (e) Employee’s
inability to perform the essential functions of Employee’s position, with reasonable accommodation, due to a mental or physical
disability for a period of 90 days as defined in the Employer’s disability benefit plan applicable to senior Employee officers
of the Employer as in effect on the date thereof, and if no plan exists, then disability shall be determined in accordance with
Treas. Reg. Section 1.409A-3(i)(4)(i); or (f) Employee’s material and willful failure or refusal on more than one occasion
(in each case, of which he is made aware in writing by Employer promptly and in no event more than seven days after such failure
or refusal) to perform Employee’s duties in accordance with Section 2.1 hereof, if there is a demonstrable adverse effect to Employer.
In the event Employee’s employment is terminated in accordance with this Section 7.1, Employee shall be entitled
to receive only Employee’s Base Salary in accordance with Section 4.1 above, then in effect, prorated to the date
of termination, and all fringe benefits through the date of termination including without limitation all accrued and unused vacation.
All other Company obligations to Employee pursuant to this Agreement will be automatically terminated and completely extinguished.
In addition, Employee shall be subject to the surviving provisions of this Agreement as set forth below.

 

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7.2
Termination Without Cause by Company or for Good Reason by the Employee. The Employer may terminate Employee’s
employment under this Agreement without Cause and Employee may terminate his employment under this Agreement for Good Reason at
any time upon 60 days’ prior written notice to the other. In the event Employee’s employment is terminated in accordance
with this Section 7.2, Employee shall be entitled to receive an amount equal to (a) six (6) months Base Salary, in accordance
with Section 4.1 above, less all applicable taxes and deductions, and (b) any accrued and unpaid Bonus to which the Employee may
then be entitled (the “Severance Package”). The Severance Package shall be paid in equal installments
over a six (6) month period, in accordance with the normal payroll practices of the Employer commencing with the first payroll
date occurring on or after the 30th day following the date of Employee’s termination pursuant to this Section 7.2.

 

For
purposes of this Agreement, “Good Reason” shall mean, unless otherwise consented to in writing by Employee,

 

(i)
the material reduction of Employee’s title, authority, duties or responsibilities, or the assignment to Employee of duties
materially inconsistent with Employee’s positions with Employer as stated in Section 2.1 hereof;

 

(ii)
(A) a reduction in the annual Base Salary of Employee, (B) any failure to comply with the provisions of Section 4.2 (relating
to certain arrangements governing bonuses), or (C) without limiting the foregoing, any failure to pay the Annual Base Salary or
any bonus to Employee in accordance with Section 4.2, as applicable if such failure is not cured by Employer within five days
of notice of such failure (provided that Employer shall not have repeated rights to cure);

 

(iii)
the relocation of Employee’s office outside of New York city;

 

(iv)
Employer’s failure to pay Employee any amounts otherwise due hereunder or under any plan, policy, program, agreement, arrangement
or other commitment of Employer if such failure is not cured by Employer within 15 days of notice of such failure;

 

(v)
the failure by Employer to obtain an agreement in form and substance reasonably satisfactory to Employee from any successor to
the business of Employer to assume and agree to perform this Agreement;

 

(vi)
any other material breach by Employer of this Agreement; or

 

(vii)
the failure of the Company to complete a Qualified Pubco Transaction (as hereinafter defined) on or before April 20, 2018. For
purposes of this Agreement, a “Qualified Pubco Transaction” shall be defined as (a) a reverse merger or similar transaction
between the Company and a corporation whose securities are publicly traded in the United States or other jurisdiction, (b) the
quotation of the Company’s securities for purchase and sale on a U.S. or foreign quotation service or (c) the filing with
an applicable regulatory body which results in the Company becoming an entity whose securities are publicly traded on a United
States or foreign stock exchange.

 

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In
the event Employee’s employment is terminated in accordance with this Section 7.2, all other Company obligations
to Employee pursuant to this Agreement will be automatically terminated and completely extinguished. In addition, Employee shall
not be subject to any of the surviving provisions of this Agreement, including, but not limited to, the provisions of Sections
10, 11, 12 or 13 set forth below. Notwithstanding and in addition to anything to the foregoing, in the event Employee’s
employment is terminated in accordance with section (vii) of this Section 7.2, Employee shall also be entitled to cause
the Online Advertising Sales representation Agreement between Green Rush Daily, Inc. and Trans-High Corporation to be terminated.

 

Notwithstanding
anything to the contrary in this Section 7.2, in the event that Company completes a Qualified Pubco Transaction on or before
April 20, 2018, the Employee shall no longer have a right to terminate this Agreement for Good Reason pursuant to this Section
7.2.

 

7.3
Voluntary Resignation by Employee. Employee may voluntarily resign Employee’s position with the Employer at any
time on thirty (30) days’ advance written notice to the Employer, unless such resignation is due to a medical emergency
or family health crisis, in which case Employee may voluntarily resign upon reasonable notice. In the event of Employee’s
resignation, Employee will be entitled to receive only Employee’s Base Salary, subject to Section 4.1 above, prorated to
the date of termination of employment, and all fringe benefits through the date of termination including without limitation all
accrued and unused vacation. All other Company obligations to Employee pursuant to this Agreement will be automatically terminated
and completely extinguished. In addition, Employee shall be subject to the surviving provisions of this Agreement as set forth
in Sections 10, 11, 12 0r 13 below.

 

7.4
Expiration of Term. Upon the expiration of the Term, this Agreement will expire, Employee’s employment with the
Employer will terminate and Employee will only be entitled to Employee’s Base Salary and any accrued Bonus, subject to Section
4.2 above, then in effect paid through the last day of the then current term, and all fringe benefits through the last day of
the then current term. All other Company obligations to Employee pursuant to this Agreement will be automatically terminated and
completely extinguished. In addition, Employee shall be subject to the surviving provisions of this Agreement as set forth in
Sections 10, 11, 12 or 13 below.

 

7.5
Resignation on Boards or Other Positions. Employee agrees that should Employee’s employment be terminated under
Section 7.1, Section 7.2 or Section 7.3, Employee will immediately resign all other positions (including
membership on all of the Boards and any committees of the Boards) Employee may hold with the Employer, including its subsidiaries
and/or affiliate entities.

 

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8. Stock
Options. 100% of the capital stock of Employer is owned of record and beneficially by Hightimes Holding Corp.,
a Delaware corporation (“Holdings”). As at the Effective Date, Holdings is authorized to issue an aggregate
of 55,000,000 shares of its capital stock, $0.0001 par value per share, of which (i) 50,000,000 shares are designated as common
stock, with 40,000,000 shares designated as Class A voting common stock (“Holdings Class A Common Stock”) and
10,000,000 shares designated as Class B non-voting common stock (the “Holdings Class B Common Stock”, and together
with the Class A Common Stock, the “Holdings Common Stock”), and (ii) 5,000,000 shares designated as preferred
stock (the “Holdings Preferred Stock”) which may be issued in one or more series containing such rights, preferences
and privileges as the board of directors of the Company may, from time to time, designate. As at the Effective Date of this Agreement,
an aggregate of 10,169,746 shares of Holdings Class A Common Stock are issued and outstanding, and no shares of Holdings Class
B Common Stock have been issued. Subject to the approval of Holdings’ Board of Directors, the Employee will be granted an
option (the “Option”) to purchase up to 150,000 shares of Holdings Class B Common Stock (the “Option
Shares”) at an exercise price of $4.20 per share (the “Exercise Price”). Such Option will be subject
to the terms and conditions applicable to options granted under the Holdings Incentive Stock Option Plan and in the applicable
stock option agreement, which Employee will be required to sign. The Option and the Option Shares will vest at the rate of one-third
(1/3) of the Option Shares as of the end of each Anniversary Period following the Effective Date. Each of Holdings and the Employer
agree that the Exercise Price per Option Share is equal to the fair market value per share on the Effective Date of this Agreement,
being the date on which the Option is deemed to be granted, and is based on the last per share sale price of shares of Class A
Common Stock of Holdings, as determined by the Board of Directors of Holdings in good faith compliance with applicable guidance
in order to avoid having the Option be treated as deferred compensation under Section 409A of the Internal Revenue Code of 1986,
as amended. In the event Employee’s employment is terminated in accordance with Section 7.2 of this Agreement within
eighteen (18) months following the date of this Agreement, one-half (1/2) of the Option Shares will be deemed to have vested.
Further, in the event Employee’s employment is terminated in accordance with Section 7.2 of this Agreement on or
after the date that is eighteen (18) months following the date of this Agreement, all of the Option Shares will be deemed
to have vested. It is expressly acknowledged and agreed that, to the extent permitted by applicable law, the option to be granted
to Employee hereunder shall be qualified as an “incentive stock option,” as defined under Section 422(b) of the Internal
Revenue Code of 1986, as amended. Further, Employer shall (i) include the shares subject to all options granted to Employee in
any registration statement on Form S-8 or other applicable registration form that it may file for such purpose, and (ii) have
all option grants be exempt under Rule 16b-3 of the Securities and Exchange Commission.

 

9.
No Violation of Rights of Third Parties. Employee represents and warrants to the Employer that Employee is not currently
a party, and will not become a party, to any other agreement that is in conflict with, or will prevent Employee from complying
with, this Agreement. Employee further represents and warrants to the Employer that Employee’s performance of all of the
terms of this Agreement as an employee of the Employer does not breach any other agreement or violate any duty which Employee
may have to any other person or entity (such as a present or former employer), including obligations concerning providing services
(whether or not competitive) to others, confidentiality of proprietary information and assignment of inventions, ideas, patents
or copyrights, and Employee agrees that he will not do anything in the performance of services hereunder that would violate any
such duty.

 

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10.
Other Covenants. The parties hereto hereby make the following covenants, each of which are acknowledged and agreed
to be a material part of this Agreement:

 

10.1
During the Contemplated Term of employment with each Employer, Employee will not (a) breach any agreement to keep in confidence
any confidential or proprietary information, knowledge or data acquired by Employee prior to Employee’s employment with
Employer, or (b) disclose to the Employer, or use or induce the Employer to use, any confidential or proprietary information or
material belonging to any previous employer or any other third party. Employee acknowledges that the Employer has specifically
instructed Employee not to breach any such agreement or make any such disclosures to the Employer.

 

10.2
During the Term of Employee’s employment with the Employer and after the termination thereof, Employee and Employer
shall refrain from making any disparaging statements or remarks regarding or towards one another, including and extending to any
subsidiaries and/or affiliate entities of the Employee or Employer, their products, services, agents or employees or any of the
products, services, agents or employees of, including any subsidiaries and/or affiliate entities.

 

10.3
During the Term of Employee’s employment with the Employer and after the termination thereof, at the Employer’s
expense and upon its reasonable request, Employee will cooperate and assist Employer in its defense or prosecution of any disputes,
differences, grievances, claims, charges, or complaints between any Employer and any third party, which arise during the period
of Employee’s employment hereunder, which assistance will include testifying on the Employer’s behalf in connection
with any such matter or performing any other task reasonably requested by Employer in connection therewith.

 

11.
Confidential Information.

 

(a)
The term “Confidential Information” and “Trade Secrets” is used herein in
its legal sense and includes (without limitation) trade secrets and other confidential and proprietary information, as well as
any information in the possession of the Employer, including any of its subsidiaries and/or affiliate entities, whether created
by Employer or any of its subsidiaries and/or affiliate entities, which is kept or intended to be kept as a secret from others
whether or not the secret or confidential or proprietary information provides a measurable commercial benefit to Employer or any
of its subsidiaries and/or affiliate entities. Employee agrees to keep strictly confidential, and to use solely for purposes of
performing Employee’s employment-related duties, any intellectual property or Confidential Information and Trade Secrets
disclosed to Employee by Employer or any of its subsidiaries and/or affiliate entities or its customers and suppliers in the course
of Employee’s employment. For the purposes of this agreement, Confidential Information shall include, without limitation:
all business plans, strategies, corporate policies, financial information, operation of technical information, marketing information,
customer lists and preferences, current or anticipated customer requirements, price lists, marketing studies, sales analyses,
product plans, supplier information, employee information, organizational structure, employee lists, information regarding labor
relations, employee remuneration and any other confidential information concerning the business and affairs of Employer, any of
its subsidiaries and/or affiliate entities or its customers and suppliers, including information which, though technically not
trade secrets, the unauthorized dissemination or knowledge of which might prove prejudicial to the business interests of Employer
or any of its subsidiaries and/or affiliate entities. Employee understands that both the Confidential Information and intellectual
property are proprietary rights that the Employer or any of its subsidiaries and/or affiliate entities is entitled to protect,
and accordingly, Employee agrees not to disclose such information either during or subsequent to Employee’s employment without
the prior written consent of the Employer, or to make use of such information for Employee’s personal benefit, or for the
benefit of any other person, firm, corporation or entity. In addition, if requested at any time, Employee shall execute a separate
Employee Confidentiality Agreement in the form prescribed by the Employer as a condition of Employee’s continued employment.

 

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(b)
Notwithstanding Section 11(a) above, Employee will not be required to maintain as confidential any Confidential Information
or Trade Secrets that (i) becomes generally available to the public other than as a result of a disclosure by the Employee or
any of their Affiliates; or (ii) is required to be disclosed pursuant to the terms of a valid subpoena or order by any Governmental
Authority or under any Law or other legal requirement; and provided, further, that the Employee may disclose Confidential Information
(x) to their counsel, accountants and agents on a need-to-know basis (provided that any such person shall be informed of the confidential
nature of such information and directed not to disclose or make public such Confidential Information or Trade Secrets) and (y)
in any action, suit or proceeding between the parties. In the event that the Employee or any of their Affiliates are requested
or required to disclose any Confidential Information or Trade Secrets pursuant to the preceding clause (ii), the Employee shall
provide Employer with prompt written notice of the request or requirement so that Employer may, at the Employer’s cost,
seek a protective order or other appropriate remedy and/or waive compliance with the provisions of this Section 10.1(b).
If, in the absence of a protective order or other remedy or the receipt of a waiver by Employer, the Employee or one of their
Affiliates, as applicable, on the written advice of counsel, is required to disclose such Confidential Information or Trade Secrets
to any Governmental Authority or else stand liable for contempt or suffer other censure or penalty, the Employee or one of their
Affiliates, as applicable, may disclose that portion of the Confidential Information or Trade Secrets which such counsel advises
the Employee or one of their Affiliates, as applicable, is legally required to disclose; provided that the Employee shall use
their best efforts to obtain, at the request and cost of Employer, an order or other assurance that confidential treatment shall
be accorded to such portion of the Confidential Information or Trade Secret required to be disclosed as Employer shall designate.
Following the Closing, Employer and Employee shall treat the terms and conditions of this Agreement as Confidential Information.

 

12.
Non-Solicitation. Employee acknowledges that in the course of Employee’s employment with the Employer, Employee
will serve as a member of the Employer’s management and will become familiar with Employer trade secrets and with other
confidential and proprietary information and that Employee’s services will be of special, unique and extraordinary value
to Employer. Therefore, in consideration of the foregoing, Employee agrees that, during the Contemplated Term of this Agreement
and for a period of twenty-four (24) months following the Term, Employee shall not:

 

(a)
solicit individuals who are presently or may become employees of Employer, including it’s subsidiaries and/or affiliate
entities to be employees of any other business, other than through general advertising not targeted against Employer or any of
its subsidiaries and/or affiliate entities;

 

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(b)
directly or indirectly induce or attempt to induce any employee of Employer or any of its subsidiaries and/or affiliate entities
to leave the employment of Employer or any of its subsidiaries and/or affiliate entities, or in any way interfere with the relationship
between Employer, including its subsidiaries and/or affiliate entities and any employee thereof; or

 

(c)
induce or attempt to induce any customer, supplier, licensee or other business relation of Employer, including any of its subsidiaries
and/or affiliate entities, to cease doing business with, or modify its business relationship with, Employer, its subsidiaries
and/or affiliate entities, or in any way interfere with or hinder the relationship between any such customer, supplier, licensee
or business relation and Employer, or any of its subsidiaries and/or affiliate entities.

 

13.
Non-Competition. During the term of his employment and for a period of one year following the termination of this Agreement
(the “Restricted Period”), the Employee agrees that he shall not, without the prior written consent
of the Employer, own any equity interest in, be employed by, or act as a consultant to, any corporation, partnership, limited
liability company or other entity (each, an “Entity”) that is engaged in competition with the Business
of the Employer or Holdings (as the term “Business” is defined in this Section 13 below), except
that the Employee may be employed by, or act as a consultant to, any corporation, partnership, limited liability company or other
entity that has been specifically approved by the Board in accordance with the provisions of Section 2.2 hereof. The provisions
of this Section 13 shall not apply to any Entity in which the net revenues of the competing Business in the fiscal year
immediately preceding the acquisition did not exceed five (5%) percent of the aggregate net revenues of the Business of the Employer
or Holdings. For purposes of this Section 13, the term “Business” shall mean and be limited to
(a) the production and sale of one or more print and digital publications, (b) the establishment and production of seminars, conferences
or events, and (c) other e-commerce initiatives and licensing of the “High Times”® brand, including
the development of an e-commerce store offering clothing and other products; in each case, associated with cannabis or dedicated
primarily to cannabis and the cannabis culture.

 

14.
Rights to Intellectual Property. Employee acknowledges and agrees that any and all trademarks, copyrights, letters
patent, patent applications, and other intellectual property rights and design, software, form ware and related documentation,
and works of authorship, that are created by Employee during the period of Employee’s employment and related to this Agreement
and Employee’s employment with the Employer, shall belong to the Employer. There shall be no obligation on the Employer
or any of its direct or indirect licensees to designate Employee as author of any such design, software, form ware or related
documentation when distributed, publicly or otherwise, nor to make any distribution. Employee hereby waives and releases all of
Employee’s rights to the foregoing.

 

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15.
Injunctive Relief. Employee acknowledges that Employee’s breach of the covenants contained in Section 11
through Section 14 hereof would cause irreparable injury to Employer and agrees that in the event of any such breach, Employer
shall be entitled to seek temporary, preliminary and permanent injunctive relief without the necessity of proving actual damages
or posting any bond or other security in addition to any other relief to which Employer may be entitled and other remedies Employer
may exercise under this Agreement or otherwise.

 

16.
General Provisions.

 

16.1
Successors and Assigns. The rights and obligations of Employer under this Agreement shall inure to the benefit of and
shall be binding upon the successors and assigns of Employer. Employee shall not be entitled to assign any of Employee’s
rights or obligations under this Agreement.

 

16.2 Waiver.
Either party’s failure to enforce any provision of this Agreement shall not in any way be construed as a waiver of any such
provision, or prevent that party thereafter from enforcing each and every other provision of this Agreement.

 

16.3 Attorneys’
Fees. In the event of a dispute involving the interpretation or enforcement of this Agreement, a court shall award reasonable
attorneys’ fees and costs to the prevailing party.

 

16.4 Severability.
In the event any provision of this Agreement is found to be unenforceable by a court of competent jurisdiction, such provision
shall be deemed modified to the extent necessary to allow enforceability of the provision as so limited, it being intended that
the parties shall receive the benefit contemplated herein to the fullest extent permitted by law. If a deemed modification is
not satisfactory in the judgment of such court, the unenforceable provision shall be deemed deleted, and the validity and enforceability
of the remaining provisions shall not be affected thereby.

 

16.5 Interpretation;
Construction. The headings set forth in this Agreement are for convenience only and shall not be used in interpreting
this Agreement. This Agreement has been drafted by legal counsel representing Employer, but Employee has participated in the negotiation
of its terms. Furthermore, Employee acknowledges that Employee has had an opportunity to review and revise the Agreement and have
it reviewed by legal counsel, if desired, 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 this Agreement.

 

16.6 Dispute
Resolution. In the event of any dispute or claim relating to or arising out of the employment relationship described
herein, Employee and Employer agree that (i) any and all disputes between Employee and Employer shall be fully and finally resolved
by binding arbitration in accordance with the then binding procedures of the American Arbitration Association located in Los Angeles,
California, (ii) the Employee hereby waives any and all rights to a jury trial but the award of the arbitrators may be enforced
in any federal or state court referred to in Section 15.7 below, (iii) the arbitration shall provide for adequate discovery, and
(v) the losing party shall pay all but the first $125 of the arbitration fees.

 

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16.7 Governing
Law; Forum. This Agreement will be governed by and construed in accordance with the laws of the United States and the
State of California. Each party consents to the jurisdiction and venue of the state or federal courts in Los Angeles, California,
if applicable, in any action, suit, or proceeding arising out of or relating to this Agreement, and agrees that the state or federal
courts in Los Angeles, California shall have exclusive jurisdiction over any dispute arising between the parties related to this
Agreement or Employee’s employment with the Employer.

 

16.8 Notices.
Any notice required or permitted by this Agreement shall be in writing and shall be delivered as follows with notice deemed given
as indicated: (a) by personal delivery when delivered personally; (b) by overnight courier upon written verification of receipt;
(c) by telecopy or facsimile transmission upon acknowledgment of receipt of electronic transmission; or (d) by certified or registered
mail, return receipt requested, upon verification of receipt. Notice shall be sent to the addresses set forth under the signatures
below, or such other address as either party may specify in writing.

 

16.9  Survival.
Section 10 (“Other Covenants”), Section 11 (“Confidentiality Information”),
Section 12 (“Non-Solicitation”), Section 13 (“Non-Competition”), Section
14 (“Rights to Intellectual Property”), Section 15 (“Injunctive Relief”), Section
16 (“General Provisions”), and Section 17 (“Entire Agreement”) of this Agreement
shall survive termination of Employee’s employment with the Employer.

 

17.  Entire
Agreement. This Agreement constitutes the entire agreement between the parties relating to this subject matter and supersedes
all prior or simultaneous representations, discussions, negotiations, and agreements, whether written or oral. This Agreement
may be amended or modified only with the written consent of Employee and the Employer. No oral waiver, amendment or modification
will be effective under any circumstances whatsoever.

 

[signature
page follows] 

 

    11

     

    

 

IN
WITNESS WHEREOF, THE PARTIES TO THIS EMPLOYMENT AGREEMENT HAVE READ THE FOREGOING AGREEMENT AND FULLY UNDERSTAND EACH AND
EVERY PROVISION CONTAINED HEREIN. WHEREFORE, THE PARTIES HAVE EXECUTED THIS EMPLOYMENTAGREEMENT ON THE FIRST DATE WRITTEN ABOVE.

 

	 	EMPLOYEE:
	 	 
	 	/s/
    Scott McGovern
	 	Scott McGovern
	 	 
	 	TRANS-HIGH CORPORATION
	 	 	 
	 	By:	/s/
    Adam Levin
	 	Name:	Adam Levin
	 	Title:	Chairman of the Board of Directors
	 	 	 
	 	With respect to the provisions of
    Section 8 above:
	 	 
	 	HIGHTIMES HOLDING CORP.
	 	 	 
	 	By:	/s/
    Adam Levin
	 	Name:	Adam Levin
	 	Title:	Chief Executive Officer and Chairman of the
	 	 	Board of Directors

 

    

     

    

 

SCHEDULE
A

 

Terms
of Employee Stock Option or Stock AwardExhibit
10.39

 

STOCK
SUBSCRIPTION AND PURCHASE AGREEMENT

 

THIS
STOCK SUBSCRIPTION AND PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of August 31, 2017
by and between HIGHTIMES HOLDING CORP., a Delaware corporation (the “Company”) and SCOTT MCGOVERN,
an individual (the “Investor”).

 

W
I T N E S S E T H:

 

WHEREAS,
the Company has entered into a definitive stock purchase agreement dated as of December 27, 2016, as amended and restated (the
“Purchase Agreement”) with Trans-High Corporation, a New York corporation (“Trans-High”)
and existing holders of the capital stock of Trans-High (the “Trans-High Stockholders”), pursuant to which,
inter alia, the Company acquired 100% of the capital stock of Trans-High on February 4, 2017; and ;

 

WHEREAS,
the Investor desires to purchase from the Company, and the Company desires to sell to the Investor, the “Subject Shares”
(hereinafter defined), all upon the terms and subject to the conditions hereinafter set forth; and

 

WHEREAS,
all references in this Agreement to “U.S.” shall mean the United States and all references to “dollars”
or “$” shall mean United States dollars.

 

NOW,
THEREFORE, in consideration of the premises and the mutual representations and covenants hereinafter set forth, the parties hereto
do hereby agree as follows:

 

	I.	SALE AND PURCHASE
    OF THE SUBJECT SHARES AND REPRESENTATIONS BY PURCHASER

 

	 	A.	Sale and Purchase of Subject Shares

 

1.1       Sale
of Subject Shares. Subject to the terms and conditions hereinafter set forth, the Investor hereby agrees to purchase from
the Company, and the Company agrees to sell, transfer, convey and assign (collectively, “Transfer”) to the
Investor, an aggregate of Two Hundred and Ninety Nine Thousand, One Hundred and Ten (299,110) shares of Class A Common Stock of
the Company (the “Subject Shares”).

 

1.2       Purchase
Price.  The Purchase Price for the Subject Shares is one tenth of one cent ($.001) per share (the “Per Share Purchase
Price”). Accordingly, the purchase price for all Subject Shares shall be the sum of Two Hundred Ninety-Nine and 11/100
($299.11) Dollars (the “Purchase Price”). Such Purchase Price is payable by check or wire transfer of immediately
available funds to Company, as set forth below.

 

1.3       Deliveries
by Investor. Upon execution of this Agreement, in addition to the payment of the Purchase Price set forth in Section 1.2
above, and connection with the Investor’s subscription the Subject Shares, the Investor should:

 

1.       Date,
Complete and Sign (i) the Investor Signature Page to this Subscription Agreement.

 

2.       Email
this Agreement together with Investor’s check in the amount of the Purchase Price to:

 

	 	The Company at:
	 	 
	 	Hightimes Holding Corp.
	 	5514 Wilshire Boulevard
	 	Los Angeles, CA
	 	Email:  adam@hightimes.com
	 	Attention:  Adam E. Levin, CEO

 

    

     

    

 

3.       If
Investor is paying the Purchase Price by wire transfer, you should send a wire transfer for the exact U.S. dollar amount of
the Purchase to the Company in accordance with the following instructions:

 

	 	Bank:	Bank of America.
	 	ABA/Routing #:	121000358
	 	Account Name:	Hightimes Holding
    Corp.
	 	Swift Code:	BOFAUS3N
	 	Account #:	325069605121
	 	Beneficiary:	Hightimes Holding
    Corp.

 

	 	B.	Representations and Warranties by the Investor

 

1.9         The
Investor recognizes that (a) the purchase of the Subject Shares involves a high degree of risk. Such risks including, but not
limited to, the following: (a) Trans-High and its Subsidiaries may never achieve their anticipated growth and profitability, (b)
an investment in the Company is highly speculative, and only Persons who can afford the loss of their entire investment should
consider investing in the Company and the Subject Shares; (c) the Investor may not be able to liquidate his its investment; (d)
the other risks associated with the Business of Trans-High and its Subsidiaries, as reflected in the Purchase Agreement,, the
Schedules thereto and other information made available to the Investor.

 

1.10       The
Investor meets the requirements of at least one of the suitability standards for an “Accredited Investor” as that
term is defined in Rule 501(a)(3) of Regulation D, and as set forth on the Investor Certification attached hereto.

 

1.11       The
Investor hereby acknowledges and represents that (a) the Investor has knowledge and experience in business and financial matters,
prior investment experience, including investment in securities that are non-listed, unregistered and/or not traded on a national
securities exchange or the Investor has employed the services of a “purchaser representative” (as defined in Rule
501 of Regulation D), attorney and/or accountant to read all of the documents furnished or made available by the Company both
to the Investor and to all other prospective Investors in the Subject Shares to evaluate the merits and risks of such an investment
on the Investor’s behalf; (b) the Investor recognizes the highly speculative nature of this investment; and (c) the Investor
is able to bear the economic risk that the Investor hereby assumes.

 

1.12       The
Investor hereby acknowledges receipt of this Agreement an employment agreement, dated of even date herewith between Trans-High
and the Investor and such other documents and agreements as Investor deemed necessary (collectively, the “Transaction
Documents”), and has received any additional information from the Company or Trans-High that the Investor has requested,
and has been afforded the opportunity to ask questions of and receive answers from duly authorized officers or other representatives
of the Company and Trans-High concerning the Company, Trans-High and its Subsidiaries.

 

1.13       In
making the decision to invest in the Subject Shares the Investor has relied solely upon the information provided by the Company
and the Company in this Agreement and in the other Transaction Documents. To the extent necessary, the Investor has retained,
at its own expense, and relied upon appropriate professional advice regarding the investment, tax and legal merits and consequences
of this Agreement and the purchase of the Subject Shares hereunder. The Investor disclaims reliance on any statements made or
information provided by any person or entity in the course of Investor’s consideration of an investment in the Subject Shares
other than this Agreement.

 

1.14       The
Investor understands that the Subject Shares have not been registered under the Securities Act by reason of a claimed exemption
under the provisions of the Securities Act that depends, in part, upon the Investor’s investment intention and investment
qualification. In this connection, the Investor hereby represents that the Investor is purchasing the Subject Shares for the Investor’s
own account for investment and not with a view toward the resale or distribution to others; provided, however, that nothing contained
herein shall constitute an agreement by the Investor to hold the Subject Shares for any particular length of time and the Company
acknowledges that the Investor shall at all times retain the right to dispose of its property as it may determine in its sole
discretion, subject to any restrictions imposed by applicable law. The Investor, if an entity, further represents that it was
not formed for the purpose of purchasing the Subject Shares.

 

    2

     

    

 

1.15       The
Investor consents to the placement of a legend on any certificate or other document evidencing the Subject Shares that such securities
have not been registered under the Securities Act or any state securities or “blue sky” laws and setting forth or
referring to the restrictions on transferability and sale thereof contained in this Agreement. The Investor is aware that the
Company will make a notation in its appropriate records with respect to the restrictions on the transferability of such Subject
Shares.

 

1.16       The
Investor hereby represents that the address of the Investor furnished by Investor on the omnibus signature page hereof is the
Investor’s principal residence if Investor is an individual or its principal business address if it is a corporation or
other entity.

 

1.17       Such
Investor understands that the Subject Shares are “restricted securities” and have not been registered under the Securities
Act or any applicable state securities law and is acquiring the Subject Shares as principal for its own account and not with a
view to or for distributing or reselling such Subject Shares or any part thereof in violation of the Securities Act or any applicable
state securities law, has no present intention of distributing any of such Subject Shares in violation of the Securities Act or
any applicable state securities law and has no direct or indirect arrangement or understandings with any other persons to distribute
or regarding the distribution of such Subject Shares in violation of the Securities Act or any applicable state securities law.

 

1.18       The
Investor represents that the Investor has full power and authority to execute and deliver this Agreement and to purchase the Subject
Shares. This Agreement constitutes the legal, valid and binding obligation of the Investor, enforceable against the Investor in
accordance with its terms.

 

1.20       The
Investor acknowledges that certain information contained in this Agreement or otherwise made available to the Investor may be
deemed to be confidential and non-public and agrees that all such information shall be kept in confidence by the Investor and
neither used by the Investor for the Investor’s personal benefit (other than in connection with this subscription) nor disclosed
to any third party for any reason, notwithstanding that a Investor’s subscription may not be accepted by the Company; provided,
however, that (a) the Investor may disclose such information to its affiliates and advisors who may have a need for such information
in connection with providing advice to the Investor with respect to its investment in the Company so long as such affiliates and
advisors have an obligation of confidentiality, and (b) this obligation shall not apply to any such information that (i) is part
of the public knowledge or literature and readily accessible at the date hereof, (ii) becomes part of the public knowledge or
literature and readily accessible by publication (except as a result of a breach of this provision) or (iii) is received from
third parties without an obligation of confidentiality (except third parties who disclose such information in violation of any
confidentiality agreements or obligations, including, without limitation, any subscription or other similar agreement entered
into with the Company).

 

II.       REPRESENTATIONS
BY AND WARRANTIES OF THE COMPANY

 

The
Company hereby represents and warrants to the Investor that:

 

2.1         Organization,
Good Standing and Qualification. The Company is a corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware and has full corporate power and authority to own and use its properties and its assets and
conduct its business as currently conducted. The Company is not in violation of any of the provisions of their respective articles
of incorporation, by-laws or other organizational or charter documents, including, but not limited to the Charter Documents (as
defined below). The Company is duly qualified to conduct business and is in good standing as a foreign corporation in each jurisdiction
in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure
to be so qualified or in good standing, as the case may be, would not result in a direct and/or indirect (i) material adverse
effect on the legality, validity or enforceability of any of the Subject Shares and/or this Agreement, (ii) material adverse
effect on the results of operations, assets, business, condition (financial and other) or prospects of the Company, or (iii) material
adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under this
Agreement (any of (i), (ii) or (iii), a “Material Adverse Effect”).

 

    3

     

    

 

2.2       Capitalization.
Capitalization and Ownership of the Company. As at the date of this Agreement the Company is authorized to issue an
aggregate of 55,000,000 shares of its capital stock, $0.0001 par value per share, of which (i) 50,000,000 shares are designated
as common stock, with 40,000,000 shares designated as Class A voting common stock (“Class A Common Stock”)
and 10,000,000 shares designated as Class B non-voting common stock (the “Class B Common Stock”, and together
with the Class A Common Stock, the “Common Stock”), and (ii) 5,000,000 shares designated as preferred stock
(the “Preferred Stock”) which may be issued in one or more series containing such rights, preferences and privileges
as the board of directors of the Company may, from time to time, designate. As at the date of this Agreement, an aggregate of
10,169,746 shares of Class A Common Stock are issued and outstanding, and no shares of Class B Common Stock have been issued.
The Subject Shares, when issued, will be free and clear of all pledges, liens, encumbrances and other restrictions (other than
those arising under federal or state securities laws as a result of the issuance of the Subject Shares. The issue and sale of
the Subject Shares will not result in a right of any holder of Company securities to adjust the exercise, exchange or reset price
under such securities. The Company has made available to the Investor true and correct copies of the Company’s Certificate
of Incorporation, and as in effect on the date hereof (the “Certificate of Incorporation”), and the Company’s
By-laws, as in effect on the date hereof (the “By-laws”).

 

2.3       Authorization;
Enforceability. The Company has all corporate right, power and authority to enter into, execute and deliver this Agreement
and each other agreement, document, instrument and certificate to be executed by the Company in connection with the consummation
of the transactions contemplated hereby, including, but not limited to this Agreement and to perform fully its obligations hereunder
and thereunder. All corporate action on the part of the Company, its directors and stockholders necessary for the authorization
execution, delivery and performance of this Agreement by the Company has been taken. This Agreement has been duly executed and
delivered by the Company and each constitutes a legal, valid and binding obligation of the Company, enforceable against the Company
in accordance with its respective terms, subject to laws of general application relating to bankruptcy, insolvency and the relief
of debtors and rules of law governing specific performance, injunctive relief or other equitable remedies, and to limitations
of public policy. The Subject Shares are duly authorized and, when issued and paid for in accordance with the applicable this
Agreement, will be duly and validly issued, fully paid and non-assessable, free and clear of all Encumbrances other than restrictions
on transfer provided for in this Agreement. The issuance and sale of the Subject Shares contemplated hereby will not give rise
to any preemptive rights or rights of first refusal.

 

2.4       No
Conflict; Governmental Consents.

 

(a)       The
execution and delivery by the Company of this Agreement, the issuance and sale of the Subject Shares and the consummation of the
other transactions contemplated hereby or thereby do not and will not (i) result in the violation of any law, statute, rule, regulation,
order, writ, injunction, judgment or decree of any court or governmental authority to or by which the Company is bound including
without limitation all foreign, federal, state and local laws applicable to its business and all such laws that affect the environment,
except in each case as could not have or reasonably be expected to result in a Material Adverse Effect, (ii) conflict with or
violate any provision of the Company’s Certificate of Incorporation (the “Certificate”), as amended or the Bylaws,
(and collectively with the Certificate, the “Charter Documents”) of the Company, and (iii) conflict with, or result
in a material breach or violation of, any of the terms or provisions of, or constitute (with or without due notice or lapse of
time or both) a default or give to others any rights of termination, amendment, acceleration or cancellation (with or without
due notice, lapse of time or both) under any agreement, credit facility, lease, loan agreement, mortgage, security agreement,
trust indenture or other agreement or instrument to which the Company is a party or by which any of them is bound or to which
any of their respective properties or assets is subject, nor result in the creation or imposition of any Liens upon any of the
properties or assets of the Company.

 

(b)       No
approval by the holders of Company Common Stock, or other equity securities of the Company is required to be obtained by the Company
in connection with the authorization, execution, delivery and performance of this Agreement or in connection with the authorization,
issue and sale of the Subject Shares except as has been previously obtained.

 

    4

     

    

 

(c)       No
consent, approval, authorization or other order of any governmental authority or any other person is required to be obtained by
the Company in connection with the authorization, execution, delivery and performance of this Agreement or in connection with
the authorization, issue and sale of the Subject Shares and, upon issuance, the Subject Shares.

 

2.5       Consents
of Third Parties. No vote, approval or consent of any holder of capital stock of the Company or any other third parties is
required or necessary to be obtained by the Company in connection with the authorization, execution, deliver and performance of
this Agreement or in connection with the authorization, issue and sale of the Subject Shares, except as previously obtained, each
of which is in full force and effect.

 

2.6       Litigation.
The Company knows of no pending or threatened legal or governmental proceedings against the Company or the Trans-High Group which
could materially adversely affect the business, property, financial condition or operations of the Company or the Trans-High Group,
or which materially and adversely questions the validity of this Agreement or the right of the Company to enter into this Agreement,
or to perform its obligations hereunder and thereunder. Neither the Company nor the Trans-High Group is a party or subject to
the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality which could
materially adversely affect the business, property, financial condition or operations of the Company or the Trans-High Group.
There is no action, suit, proceeding or investigation by the Company or the Trans-High Group currently pending in any court or
before any arbitrator or that the Company or the Trans-High Group intends to initiate. Neither the Company or the Trans-High Group
nor any director or officer thereof, is or since the filing of the Registration Statement has been the subject of any action involving
a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has
not been, and to the Company’s knowledge, there is not pending or contemplated, any investigation by the SEC involving the
Company or the Trans-High Group or any current or former director or officer of the Company or the Trans-High Group.

 

2.7       Compliance.
Neither the Company nor the Trans-High Group is: (i) in default under or in violation of (and no event has occurred that has not
been waived that, with notice or lapse of time or both, would result in a default by the Company or the Trans-High Group), nor
has the Company or or the Trans-High Group received notice of a claim that it is in default under or that it is in violation of,
any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its
properties is bound (whether or not such default or violation has been waived), (ii) in violation of any judgment, decree or order
of any court, arbitrator or other governmental authority or (iii) in violation of any statute, rule, ordinance or regulation of
any governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental
protection, occupational health and safety, product quality and safety and employment and labor matters.

 

2.8       Regulatory
Permits. The Company and the Trans-High Group possesses all certificates, authorizations and permits issued by the appropriate
federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses, except where the failure
to possess such permits could not reasonably be expected to result in a Material Adverse Effect (“Material Permits”).

 

2.9       Disclosure.
The information set forth in this Agreement as of the date hereof contains no untrue statement of a material fact nor omits to
state a material fact necessary in order to make the statements contained therein, in light of the circumstances under which they
were made, not misleading.

 

2.10     Investment
Company. Neither the Company nor the Trans-High Group is an “investment company” within the meaning of such term
under the Investment Company Act of 1940, as amended, and the rules and regulations of the SEC thereunder.

 

2.11     Brokers.
Neither the Company nor any of the Company’s officers, directors, employees or stockholders has employed or engaged any broker
or finder in connection with the transactions contemplated by this Agreement and no fee or other compensation is or will be due
and owing to any broker, finder, underwriter, placement agent or similar person in connection with the transactions contemplated
by this Agreement. The Company is not party to any agreement, arrangement or understanding whereby any person has an exclusive
right to raise funds and/or place or purchase any debt or equity securities for or on behalf of the Company.

 

    5

     

    

 

2.12       Intellectual
Property; Employees.

 

(a)       The
Company and the Trans-High Group owns or possesses sufficient legal rights to all patents, trademarks, service marks, trade names,
copyrights, trade secrets, licenses, information and other proprietary rights and processes necessary for its business as now
conducted and as presently proposed to be conducted, without any known infringement of the rights of others and which the failure
to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”).

 

(b)       To
the Company’s knowledge, no employee of the Company or the Trans-High Group, nor any consultant with whom the Company or
the Trans-High Group has contracted, is in violation of any term of any employment contract, proprietary information agreement
or any other agreement and to the Company’s knowledge the continued employment by the Company or the Trans-High Group of
its present employees, and the performance of the Company’s or the Trans-High Group’s contracts with its independent
contractors, will not result in any such violation.

 

2.13       Title
to Properties and Assets; Liens, Etc. The Company and the Trans-High Group has good and marketable title to its properties
and assets, including the properties and assets reflected in the most recent balance sheet included in their respective financial
statements, and good title to its leasehold estates, in each case subject to no Encumbrances, other than (a) those resulting from
taxes which have not yet become delinquent; and (b) Encumbrances which do not materially detract from the value of the property
subject thereto or materially impair the operations of the Company or the Trans-High Group; and (c) those that have otherwise
arisen in the ordinary course of business, none of which are material. The Company and the Trans-High Group is in compliance with
all material terms of each lease to which it is a party or is otherwise bound.

 

2.14       Liabilities.
The Company has not incurred any liabilities (contingent or otherwise) other than trade payables, accrued expenses and other liabilities
incurred in connection with the transactions contemplated by the Purchase Agreement.

 

2.15       Disclosure.
All disclosure furnished by or on behalf of the Company to the Investor in this Agreement regarding the Company and the Trans-High
Group, its business and the transactions contemplated hereby 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 light of the circumstances
under which they were made, not misleading.

 

	III.	CONDITIONS TO
    OBLIGATIONS OF THE EQUITY INVESTOR

 

3.1         The
Investor’s obligation to purchase the Subject Shares at the Closing at which such purchase is to be consummated is subject
to the fulfillment on or prior to such Closing of the following conditions, which conditions may be waived at the option of each
Investor to the extent permitted by law:

 

(a)       Representations
and Warranties; Covenants. The representations and warranties made by the Company in Section 2 hereof qualified as to materiality
shall be true and correct as of the Initial Closing at all times prior to and on the Closing Date, except (i) to the extent any
such representation or warranty expressly speaks as of an earlier date, in which case such representation or warranty shall be
true and correct as of such earlier date, and, (ii) the representations and warranties made by the Company in Section 2 hereof
not qualified as to materiality shall be true and correct in all material respects at all times prior to and on the Closing Date,
except to the extent any such representation or warranty expressly speaks as of an earlier date, in which case such representation
or warranty shall be true and correct in all material respects as of such earlier date. All covenants, agreements and conditions
contained in this Agreement to be performed by the Company on or prior to the date of such Closing shall have been performed or
complied with in all material respects.

 

    6

     

    

 

(b)       No
Legal Order Pending. There shall not then be in effect any legal or other order enjoining or restraining the transactions
contemplated by this Agreement or the Purchase Agreement.

 

(c)       No
Law Prohibiting or Restricting Such Sale. There shall not be in effect any law, rule or regulation prohibiting or restricting
such sale or requiring any consent or approval of any person, which shall not have been obtained, to issue the Subject Shares
(except as otherwise provided in this Agreement).

 

(d)       Required
Consents. The Company shall have obtained any and all consents, permits, approvals, registrations and waivers necessary or
appropriate for consummation of the purchase and sale of the Subject Shares and the consummation of the other transactions contemplated
by this Agreement, all of which shall be in full force and effect.

 

(e)       Stockholders
Agreement. The Investor shall be entitled to the rights granted to Stockholders pursuant to Sections 4.3, 4.4 and 4.5 of Article
IV of the certain Stockholders Agreement, effective as of February 28, 2017, by and among (A) HIGHTIMES HOLDING CORP.,
a Delaware corporation; (B) the former stockholders of TRANS-HIGH CORPORATION, a New York corporation; (C) AEL IRREVOCABLE
TRUST., a California trust established for the benefit of Adam E. Levin and other members of his family; and (D) the other
Persons who have executed Stock Purchase Agreements under the designation “Investor Stockholders” on the signature
pages of the Stockholders Agreement.

 

IV.       MISCELLANEOUS.

 

4.1       Indemnification. 

 

(a)       The
Company agrees to indemnify and hold harmless the Investor, from and against any and all loss, liability, damage or deficiency
suffered or incurred by the Investor by reason of any misrepresentation or breach of warranty by the Company or, after any applicable
notice and/or cure periods, nonfulfillment of any covenant or agreement to be performed or complied with by the Company under
this Agreement, this Agreement; and will promptly reimburse the Indemnified Parties for all expenses (including reasonable fees
and expenses of legal counsel) as incurred in connection with the investigation of, preparation for or defense of any pending
or threatened claim related to or arising in any manner out of any of the foregoing, or any action or proceeding arising therefrom
(collectively, “Proceedings”), whether or not the Investor is a formal party to any such Proceeding.

 

(b)       If
for any reason (other than a final non-appealable judgment finding the Investor liable for losses, claims, damages, liabilities
or expenses for its gross negligence or willful misconduct) the foregoing indemnity is unavailable to the Investor or insufficient
to hold the Investor harmless, then the Company shall contribute to the amount paid or payable by the Investor as a result of
such loss, claim, damage, liability or expense in such proportion as is appropriate to reflect not only the relative benefits
received by the Company on the one hand and the Investor on the other, but also the relative fault by the Company and the Indemnified
Party, as well as any relevant equitable considerations.

 

4.2       Except
as otherwise provided herein, this Agreement shall not be changed, modified or amended except by a writing signed by the parties
to be charged, and this Agreement may not be discharged except by performance in accordance with its terms or by a writing signed
by the party to be charged. No waiver of any default with respect to any provision, condition or requirement of this Agreement
shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision,
condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair
the exercise of any such right.

 

4.3       This
Agreement shall be binding upon and inure to the benefit of the parties hereto and to their respective heirs, legal representatives,
successors and assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written
consent of Investor (other than by merger). Investor may assign any or all of its rights under this Agreement to any person to
whom Investor assigns or transfers any Subject Shares, provided that such transferee agrees in writing to be bound, with respect
to the transferred Subject Shares, by the provisions of this Agreement.

 

    7

     

    

 

4.4       This
Agreement, together with the exhibits and schedules thereto, contain the entire understanding of the parties with respect to the
subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which
the parties acknowledge have been merged into such documents, exhibits and schedules.

 

4.5       Upon
the execution and delivery of this Agreement by the Company and Investor and the consent of the Company, this Agreement shall
become a binding obligation of the Company with respect to the sale and Transfer of the Subject Shares and of the Investor with
respect to the purchase of Subject Shares as herein provided.

 

4.6       All
questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed
and enforced in accordance with the internal laws of the State of New York, United States, without regard to the principles of
conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense
of the transactions contemplated by this Agreement and any other this Agreement (whether brought against a party hereto or its
respective affiliates, directors, officers, shareholders, employees or agents) shall be commenced exclusively in the state and
federal courts sitting in the City of New York, located in the State of New York. 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 (including
with respect to the enforcement of any of this Agreement), 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 improper or is an inconvenient venue for such proceeding.

 

4.7       It
is agreed that a waiver by either party of a breach of any provision of this Agreement shall not operate, or be construed, as
a waiver of any subsequent breach by that same party.

 

4.8       The
Company agrees to execute and deliver all such further documents, agreements and instruments and take such other and further action
as may be necessary or appropriate to carry out the purposes and intent of this Agreement.

 

4.9       This
Agreement may be executed in two or more counterparts each of which shall be deemed an original, but all of which shall together
constitute one and the same instrument. In the event that any signature is delivered by facsimile transmission or by e-mail delivery
of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature
page were an original thereof.

 

4.10     Nothing
in this Agreement shall create or be deemed to create any rights in any person or entity not a party to this Agreement.

 

4.11     In
addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, the Investor
and the Company will be entitled to specific performance under this Agreement. The parties agree that monetary damages may not
be adequate compensation for any loss incurred by reason of any breach of obligations described in the foregoing sentence and
hereby agrees to waive in any action for specific performance of any such obligation the defense that a remedy at law would be
adequate.

 

*****************************

    8

     

    

 

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

 

	 	HIGHTIMES HOLDING CORP.
	 	 	 
	 	By:	/s/
    Adam E. Levin
	 	Name:	Adam E. Levin
	 	Title:	Chief Executive Officer

 

	 	/s/
    Scott McGovern
	 	Scott McGovern

 

Subject
Shares: 299,110

Shares
of Class A Common Stock.

Purchase
Price Per Share: $.001

Total
Purchase Price:        $299.11

 

    9

     

    

  

FORM
OF INVESTOR QUESTIONNAIRE

 

HIGHTIMES
HOLDING CORP.

 

For
Individual Investors Only

 

(All
individual Investors must INITIAL where appropriate. Where there are joint Investors both parties must INITIAL):

 

	Initial
        SPM_	I certify
    that I have a “net worth” of at least $1 million either individually or through aggregating my individual holdings
    and those in which I have a joint, community property or other similar shared ownership interest with my spouse.  For
    purposes of calculating net worth under this paragraph, (i) the primary residence shall not be included as an asset, (ii)
    to the extent that the indebtedness that is secured by the primary residence is in excess of the fair market value of the
    primary residence, the excess amount shall be included as a liability, and (iii) if the amount of outstanding indebtedness
    that is secured by the primary residence exceeds the amount outstanding 60 days prior to the execution of this Subscription
    Agreement, other than as a result of the acquisition of the primary residence, the amount of such excess shall be included
    as a liability.
	 	 
	Initial _SPM_	I certify that I
    have had an annual gross income for the past two years of at least $200,000 (or $300,000 jointly with my spouse) and expect
    my income (or joint income, as appropriate) to reach the same level in the current year.

 

For
Non-Individual Investors

 

(all
Non-Individual Investors must INITIAL where appropriate):

 

	Initial
    _______	The
    undersigned certifies that it is a partnership, corporation, limited liability company or business trust that is 100% owned
    by persons who meet either of the criteria for Individual Investors, above.
	 	 
	Initial _______	The undersigned
    certifies that it is a partnership, corporation, limited liability company or business trust that has total assets of at least
    $5 million and was not formed for the purpose of investing in Company.
	 	 
	Initial _______	The undersigned
    certifies that it is an employee benefit plan whose investment decision is made by a plan fiduciary (as defined in ERISA §3(21))
    that is a bank, savings and loan association, insurance company or registered investment adviser.
	 	 
	Initial _______	The undersigned
    certifies that it is an employee benefit plan whose total assets exceed $5,000,000 as of the date of the Subscription Agreement.
	 	 
	Initial _______	The undersigned
    certifies that it is a self-directed employee benefit plan whose investment decisions are made solely by persons who meet
    either of the criteria for Individual Investors, above.
	 	 
	Initial _______	The undersigned
    certifies that it is a U.S. bank, U.S. savings and loan association or other similar U.S. institution acting in its individual
    or fiduciary capacity.
	 	 
	Initial _______	The undersigned
    certifies that it is a broker-dealer registered pursuant to §15 of the Securities Exchange Act of 1934.

 

    10

     

    

 

	Initial
    _______	The
    undersigned certifies that it is an organization described in §501(c)(3) of the Internal Revenue Code with total assets
    exceeding $5,000,000 and not formed for the specific purpose of investing in Company.
	 	 
	Initial _______	The undersigned
    certifies that it is a trust with total assets of at least $5,000,000, not formed for the specific purpose of investing in
    Company, and whose purchase is directed by a person with such knowledge and experience in financial and business matters that
    he is capable of evaluating the merits and risks of the prospective investment.
	 	 
	Initial _______	The undersigned
    certifies that it is a plan established and maintained by a state or its political subdivisions, or any agency or instrumentality
    thereof, for the benefit of its employees, and which has total assets in excess of $5,000,000.
	 	 
	Initial _______	The undersigned
    certifies that it is an insurance company as defined in §2(a)(13) of the Securities Act of 1933, as amended, or a registered
    investment company.

 

	/s/
    Scott McGovern	 
	SCOTT McGOVERN	 

  

    11

     

    

 

HIGHTIMES
HOLDING CORP.

Investor
Questionnaire

(Must
be completed by Investor)

 

Section
A - Individual Investor Information

 

EXACT
Investor Name(s) in which securities are to be issued:                                                                                                                 

 

Individual
executing Profile or Trustee:                                                                                                                                                          

 

Social
Security Numbers / Federal I.D. Number:                                                                                                                                            

 

Date
of Birth: _________________ Marital Status: _________________ 

 

Joint
Party Date of Birth:_________________  

 

Investment
Experience (Years): ___________

 

Annual
Income: _________________ 

 

Net
Worth: ________________

 

Home
Street Address:                                                                                                                                                                          

 

Home
City, State & Zip Code: ________________________________________________________________________

 

Home
Phone: ________________________ Home Fax: _____________________

 

Home
Email: _______________________________

 

Employer:
________________________________________________________________________

 

Employer
Street Address: ________________________________________________________________________

 

Employer
City, State & Zip Code: ________________________________________________________________________

 

Bus.
Phone: __________________________ Bus. Fax: _______________________

 

Bus.
Email: ________________________________

 

Type
of Business: ________________________________________________________________________

 

Please
check if you are a FINRA member or affiliate of a FINRA member firm: _______

 

    12

     

    

 

Section
B – Entity Investor Information

 

EXACT
Investor Name(s) in which securities are to be issued:                                                                                                                 

 

Authorized
Individual executing Profile or Trustee:                                                                                                                                     

 

Social
Security Numbers / Federal I.D. Number:                                                                                                                                            

 

Investment
Experience (Years): ___________

 

Net
Worth: ________________

 

Was
the Trust formed for the specific purpose of purchasing the Securities?

 

☐
Yes ☐ No

 

Principal
Purpose (Trust)______________________________________

 

Type
of Business: ________________________________________________________

 

Street
Address: ________________________________________________________________________

 

City,
State & Zip Code: ________________________________________________________________________

 

Phone:
________________________      Fax: ________________________

 

Email:
__________________________

 

Please
check if you are a FINRA member or affiliate of a FINRA member firm: _______.

 

    13

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