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DESCRIPTION OF STEADFAST APARTMENT REIT, INC. 
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) 
OF THE SECURITIES EXCHANGE ACT OF 1934
The following is a summary of certain terms of Steadfast Apartment REIT Inc.’s (“STAR”) capital stock, STAR’s charter, STAR’s bylaws, and certain provisions of the Maryland General Corporation Law (“MGCL”) governing real estate investment trusts formed under Maryland law. The following summary is not complete and is subject to, and qualified in its entirety by reference to, the applicable provisions of STAR’s charter and bylaws and the applicable provisions of the MGCL. The following summary should be read in conjunction with STAR’s charter and bylaws and the applicable provisions of the MGCL for complete information on STAR’s capital stock. 
When used in this section, unless otherwise specifically stated or the context requires otherwise, the terms “we,” “us” or “our” refer to STAR and references to “our common stock” refer to shares of STAR’s common stock (“STAR Common Stock”).
Under STAR’s charter, we have authority to issue a total of 1,100,000,000 shares of capital stock. Of the total number of shares of capital stock authorized, 999,998,000 shares are classified as common stock with a par value of $0.01 per share, 1,000 shares are classified as Class A non-participating, non-voting convertible stock with a par value of $0.01 per share, 1,000 shares are classified as non-participating, non-voting convertible stock with a par value $0.01 per share and 100,000,000 shares are classified as preferred stock with a par value of $0.01 per share. Our board of directors, with the approval of a majority of the entire board of directors and without any action by our stockholders, may amend STAR’s charter from time to time to increase or decrease the aggregate number of shares of capital stock or the number of shares of capital stock of any class or series that we have authority to issue. 
Common Stock
The holders of shares of our common stock are entitled to one vote per share on all matters voted on by stockholders, including the election of our directors. STAR’s charter does not provide for cumulative voting in the election of directors. Therefore, the holders of a majority of the outstanding shares of our common stock can elect our entire board of directors. Subject to any preferential rights of any outstanding series of preferred stock, the holders of shares of our common stock are entitled to such distributions as may be authorized from time to time by our board of directors out of legally available funds and declared by us and, upon liquidation, are entitled to receive all assets available for distribution to stockholders. All shares of our common stock will be fully paid and non-assessable shares of common stock. Holders of shares of our common stock do not have preemptive rights, which means that stockholders will not have an automatic option to purchase any new shares of common stock that we issue, or have appraisal rights, unless our board of directors determines that appraisal rights apply, with respect to all or any classes or series of our common stock, to one or more transactions occurring after the date of such determination in connection with which stockholders would otherwise be entitled to exercise such rights. Stockholders are not liable for our acts or obligations.
Our board of directors has authorized the issuance of shares of our capital stock without certificates; therefore, we will not issue certificates for shares of our common stock. Shares of our common stock will be held in “uncertificated” form which will eliminate the physical handling and safekeeping responsibilities inherent in owning transferable share certificates and eliminate the need to return a duly executed share certificate to effect a transfer. DST Systems, Inc. acts as our registrar and as the transfer agent for shares of our common stock.
Preferred Stock
STAR’s charter authorizes our board of directors to classify and reclassify any unissued shares of our common stock and preferred stock into other classes or series of stock. Prior to issuance of shares of each class or series, our board of directors is required by the MGCL and by STAR’s charter to set, subject to STAR’s charter restrictions on ownership and transfer of our stock, the terms, preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications and terms or conditions of redemption for each class or series. Thus, our board of directors could authorize the issuance of shares of common stock or preferred stock with terms and conditions which could have the effect of delaying, deferring or preventing a transaction or change in control that might involve a premium price for holders of our common stock or otherwise be in their best interest. Our board of directors has no present plans to issue preferred stock, but may do so at any time in the future without stockholder approval. The issuance of preferred stock must be approved by a majority of our independent directors not otherwise interested in the transaction, who will have access, at our expense, to our legal counsel or to independent legal counsel.

Convertible Stock
Our authorized capital stock includes 1,000 shares of Class A Convertible Stock, par value $0.01 per share (“Class A Convertible Stock”) and 1,000 shares of convertible stock, par value $0.01 per share (the "Convertible Stock"). In connection with the Mergers (as defined herein), Steadfast Apartment Advisor, LLC, a Delaware limited liability company (the “Former Advisor”) exchanged the Convertible Stock for Class A Convertible Stock. Therefore, prior to the internalization of our management on September 1, 2020 (the “Internalization”), the Former Advisor owned the 1,000 shares of Class A Convertible Stock, for an aggregate purchase price of $1,000. In connection with the Internalization, we repurchased the 1,000 shares of Class A Convertible Stock from our Former Advisor for $1,000, and such Class A Convertible Stock were cancelled.  No Class A Convertible Stock or Convertible Stock are currently issued and outstanding.
Meetings, Special Voting Requirements and Access To Records
An annual meeting of the stockholders will be held each year on a specific date and time set by our board of directors. Special meetings of stockholders may be called only upon the request of a majority of the directors, a majority of the independent directors, the chairman, the chief executive officer or the president and will be called by our secretary to act on any matter that may properly be considered at a meeting of stockholders upon the written request of stockholders entitled to cast at least 10% of the votes entitled to be cast on such matter at the meeting. Upon receipt of a written request of eligible stockholders, either in person or by mail, stating the purpose of the meeting, we will provide all stockholders, within ten days after receipt of such request, with written notice either in person or by mail, of such meeting and the purpose thereof. Such meeting will be held on a date not less than 10 nor more than 90 days after the distribution of such notice, at a time and place specified in the request, or if none is specified, at a time and place convenient to stockholders. The presence either in person or by proxy of stockholders entitled to cast at least 50% of the votes entitled to be cast at the meeting on any matter will constitute a quorum. Generally, the affirmative vote of a majority of all votes cast is necessary to take stockholder action, except as provided in the following paragraph and except that the affirmative vote of a majority of the shares represented in person or by proxy at a meeting at which a quorum is present is required to elect a director.
Under the MGCL and STAR’s charter, stockholders are generally entitled to vote at a duly held meeting at which a quorum is present on (1) the amendment of STAR’s charter, (2) our dissolution or (3) our merger, conversion or consolidation, a statutory share exchange or the sale or other disposition of all or substantially all of our assets. These matters require the affirmative vote of stockholders entitled to cast at least a majority of the votes entitled to be cast on the matter.
With respect to stock owned by directors or any of their affiliates, neither directors nor any of their affiliates may vote or consent on matters submitted to stockholders regarding the removal of such directors or any of their affiliates or any transaction between us and any of them. In determining the requisite percentage in interest of shares necessary to approve a matter on which our directors or their affiliates may not vote or consent, any shares owned by any of them shall not be included.
Any stockholder will be permitted access to all of our corporate records at all reasonable times and may inspect and copy any of them for a reasonable copying charge. Inspection of our records by the office or agency administering the securities laws of a jurisdiction will be provided upon reasonable notice and during normal business hours. An alphabetical list of the names, addresses and telephone numbers of our stockholders, along with the number of shares of our common stock held by each of them, will be maintained as part of our books and records and will be available for inspection by any stockholder or the stockholder’s designated agent at our office. The stockholder list will be updated at least quarterly to reflect changes in the information contained therein. A copy of the list will be mailed to any stockholder who requests the list within ten days of the request. A stockholder may request a copy of the stockholder list in connection with matters relating to voting rights and the exercise of stockholder rights under federal proxy laws. A stockholder requesting a list will be required to pay the reasonable costs of postage and duplication. We have the right to request that a requesting stockholder represent to us that the list will not be used to pursue commercial interests unrelated to the stockholder’s interest in us. If a proper request for the stockholder list is not honored, then the requesting stockholder will be entitled to recover certain costs incurred in compelling the production of the list as well as actual damages suffered by reason of the refusal or failure to produce the list. However, a stockholder will not have the right to, and we may require a requesting stockholder to represent that it will not, secure the stockholder list or other information for the purpose of selling or using the list for a commercial purpose not related to the requesting stockholder’s interest in our affairs.
Tender Offers
STAR’s charter provides that any tender offer made by any person, including any “mini-tender” offer, must comply with most of the provisions of Regulation 14D of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including the notice and disclosure requirements. Among other things, the offeror must provide us notice of such tender offer at least ten business days before initiating the tender offer. If the offeror does not comply with the provisions set forth above, the non-

complying offeror will be responsible for all of our expenses in connection with that offeror’s noncompliance. STAR’s charter also prohibits any stockholder from transferring shares of stock to a person who makes a tender offer that does not comply with such provisions unless such stockholder has first offered such shares of stock to us at the tender offer price in the non-compliant tender offer.
Restriction on Ownership of Shares of Capital Stock
For us to qualify as a REIT, no more than 50% in value of the outstanding shares of our stock may be owned, directly or indirectly through the application of certain attribution rules under the Internal Revenue Code, by any five or fewer individuals, as defined in the Internal Revenue Code to include specified entities, during the last half of any taxable year. In addition, the outstanding shares of our stock must be owned by 100 or more persons independent of us and each other during at least 335 days of a 12-month taxable year or during a proportionate part of a shorter taxable year, excluding our first taxable year for which we elect to be taxed as a REIT. In addition, we must meet requirements regarding the nature of our gross income to qualify as a REIT. One of these requirements is that at least 75% of our gross income for each calendar year must consist of rents from real property and income from other real property investments. The rents received by our operating partnership from any resident will not qualify as rents from real property, which could result in our loss of REIT status, if we own, actually or constructively within the meaning of certain provisions of the Internal Revenue Code, 10% or more of the ownership interests in that resident. To assist us in preserving our status as a REIT, among other purposes, STAR’s charter contains limitations on the ownership and transfer of shares of stock which prohibit: (1) any person or entity from owning or acquiring, directly or indirectly, more than 9.8% of the value of our then outstanding capital stock or more than 9.8% of the value or number of shares, whichever is more restrictive, of our then outstanding common stock and (2) any transfer of or other event or transaction with respect to shares of capital stock that would result in the beneficial ownership of our outstanding shares of capital stock by fewer than 100 persons. In addition, STAR’s charter prohibits any transfer of, or other event with respect to, shares of our capital stock that (1) would result in us being “closely held” within the meaning of Section 856(h) of the Internal Revenue Code, (2) would cause us to own, actually or constructively, 9.8% or more of the ownership interests in a resident of our real property or the real property of our operating partnership or any direct or indirect subsidiary of our operating partnership or (3) would otherwise cause us to fail to qualify as a REIT.
STAR’s charter provides that the shares of our capital stock that, if transferred, would: (1) result in a violation of the 9.8% ownership limit; (2) result in us being “closely held” within the meaning of Section 856(h) of the Internal Revenue Code; (3) cause us to own an interest in a tenant that is described in Section 856(d)(2)(B) of the Internal Revenue Code if the income derived by us from such tenant would cause us to fail to satisfy any of the gross income requirements of Section 856(a)(5) of the Internal Revenue Code; or (4) otherwise cause us to fail to qualify as a REIT, will be transferred automatically to a trust effective on the day before the purported transfer of such shares of our capital stock. We will designate a trustee of the share trust that will not be affiliated with us or the purported transferee or record holder. We will also name a charitable organization as beneficiary of the share trust. The trustee will receive all distributions on the shares of our capital stock in the share trust and will hold such distributions in trust for the benefit of the beneficiary. The trustee also will vote the shares of capital stock in the share trust and, subject to Maryland law, will have the authority to rescind as void any vote cast by the intended transferee prior to our discovery that the shares have been transferred to the share trust and to recast the vote in accordance with the desires of the trustee acting for the benefit of the charitable beneficiary. However, if we have already taken irreversible corporate action, then the trustee will not have the authority to rescind and recast the vote. The intended transferee will acquire no rights in such shares of capital stock, unless, in the case of a transfer that would cause a violation of the 9.8% ownership limit, the transferee is exempted (prospectively or retroactively) by our board of directors from the ownership limit based upon receipt of information (including certain representations and undertakings from the intended transferee) that the ownership by such transferee would not violate the provisions of the Internal Revenue Code for our qualification as a REIT. If the transfer to the share trust would not be effective for any reason to prevent a violation of the foregoing limitations on ownership and transfer, then the transfer of that number of shares that otherwise would cause the violation will be null and void, with the intended transferee acquiring no rights in such shares. In addition, STAR’s charter provides that any transfer of shares of our capital stock that would result in shares of our capital stock being beneficially owned by fewer than 100 persons will be null and void and the intended transferee will acquire no rights in such shares of our capital stock.
Within 20 days of receiving notice from us that shares of our stock have been transferred to the trust, the trustee will sell the shares to a person designated by the trustee, whose ownership of the shares will not violate the above ownership limitations. Upon the sale, the interest of the charitable beneficiary in the shares sold will terminate and the trustee will distribute the net proceeds of the sale to the intended transferee and to the charitable beneficiary as follows. The intended transferee will receive the lesser of (1) the price paid by the intended transferee for the shares or, if the intended transferee did not give value for the shares in connection with the event causing the shares to be held in the share trust (e.g., a gift, devise or other similar transaction), the “market price” (as defined in STAR’s charter) of the shares on the day of the event causing the shares to be held in the share trust and (2) the price received by the trustee from the sale or other disposition of the shares. The trustee may 

reduce the amount payable to the intended transferee by the amount of dividends and other distributions which have been paid to the intended transferee and are owed by the intended transferee to the trustee. Any net sales proceeds in excess of the amount payable to the intended transferee will be paid immediately to the charitable beneficiary. If, prior to our discovery that shares of our stock have been transferred to the share trust, the shares are sold by the intended transferee, then (1) the shares shall be deemed to have been sold on behalf of the share trust and (2) to the extent that the intended transferee received an amount for the shares that exceeds the amount he was entitled to receive, the excess shall be paid to the trustee upon demand.
In addition, shares of our stock held in the share trust will be deemed to have been offered for sale to us, or our designee, at a price per share equal to the lesser of (1) the price per share in the transaction that resulted in the transfer to the share trust (or, in the case of a devise or gift, the market price at the time of the devise or gift) and (2) the market price on the date we, or our designee, accept the offer. We will have the right to accept the offer until the trustee has sold the shares. Upon a sale to us, the interest of the charitable beneficiary in the shares sold will terminate and the trustee will distribute the net proceeds of the sale to the intended transferee. We may reduce the amount payable to the intended transferee by the amount of dividends and other distributions which have been paid to the intended transferee and are owed by the intended transferee to the trustee. We may pay the amount of such reduction to the trustee for the benefit of the charitable beneficiary.
Any person who acquires or attempts or intends to acquire shares of our capital stock in violation of the foregoing restrictions or who owns shares of our capital stock that were transferred to any such trust is required to give immediate written notice to us or, in the case of a proposed or attempted transaction, at least 15 days prior written notice. In both cases, such persons must provide to us such other information as we may request to determine the effect, if any, of such event on our status as a REIT. The foregoing restrictions will continue to apply until our board of directors determines it is no longer in our best interest to attempt to, or to continue to, qualify as a REIT or that compliance is no longer required for REIT qualification.
The ownership limits do not apply to a person or persons that our board of directors exempts (prospectively or retroactively) from the ownership limit upon appropriate assurances that our qualification as a REIT is not jeopardized, including certain representations and undertakings required by STAR’s charter. Any person who owns more than 5.0% (or such lower percentage applicable under Treasury regulations) of the outstanding shares of our capital stock during any taxable year will be asked to deliver a statement or affidavit setting forth the number of shares of our capital stock beneficially owned.
Distributions
We expect to continue paying monthly distributions unless our results of operations, our general financial condition, the general economic condition or other factors prohibit us from doing so. The timing and amount of distributions will be determined by our board of directors in its discretion and may vary from time to time.
Generally, our policy is to pay distributions from cash flow from operations. Because we may receive income from interest or rents at various times during our fiscal year and because we may need cash flow from operations during a particular period to fund capital expenditures and other expenses, we expect that from time to time during our operational stage, we will declare distributions in anticipation of cash flow that we expect to receive during a later period, and we expect to pay these distributions in advance of our actual receipt of these funds. In these instances, our board of directors has the authority under our organizational documents, to the extent permitted by Maryland law, to fund distributions from sources such as borrowings or offering proceeds. If we pay distributions from sources other than cash flow from operations, we will have fewer funds available for investments and our stockholders’ overall return on their investment in us may be reduced. 
To maintain our qualification as a REIT, we must make aggregate annual distributions to our stockholders of at least 90% of our REIT taxable income (which is computed without regard to the dividends paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with GAAP). If we meet the REIT qualification requirements, we generally will not be subject to federal income tax on the income that we distribute to our stockholders each year.
 
We have not established a minimum distribution level, and STAR’s charter does not require that we make distributions to our stockholders.
Distribution Reinvestment Plan
Pursuant to our distribution reinvestment plan, stockholders may elect to have their cash distributions reinvested in shares of our common stock. Our board of directors may, in its sole discretion, from time to time, change the price based upon changes in our estimated value per share and other factors that our board of directors deems relevant. If we determine to change the price at which we offer shares pursuant to our distribution reinvestment plan, we do not anticipate that we will do so more frequently 

than quarterly. Stockholders may elect to participate in the distribution reinvestment plan by completing an enrollment form or by other written notice to the plan administrator. Participation in the plan will begin with the next distribution made after acceptance of such written notice. Our board of directors may terminate the distribution reinvestment plan at its discretion at any time upon ten days’ notice to our stockholders. Participation in the plan may also be terminated with respect to any person to the extent that a reinvestment of distributions in shares of our common stock would cause the share ownership limitations contained in STAR’s charter to be violated. Following any termination of our distribution reinvestment plan, all subsequent distributions to stockholders will be made in cash. No sales commissions or dealer manager fees are payable on shares sold through our distribution reinvestment plan.
Participants may acquire shares of our common stock pursuant to our distribution reinvestment plan until the earliest date upon which (1) all the common stock registered in this or future offerings to be offered under our distribution reinvestment plan is issued, (2) the offering related to our distribution reinvestment plan terminates, and we elect to deregister with the Securities and Exchange Commission (the “SEC”) the unsold amount of our common stock registered to be offered under our distribution reinvestment plan or (3) there is more than a de minimis amount of trading in shares of our common stock, at which time any registered shares of our common stock then available under our distribution reinvestment plan will be sold at a price equal to the fair market value of the shares of our common stock, as determined by our board of directors by reference to the applicable sales price with respect to the most recent trades occurring on or prior to the relevant distribution date. In any case, the price per share will be equal to the then-prevailing market price, which will equal the price on the national securities exchange on which such shares of common stock are listed at the date of purchase.
Holders of limited partnership interests in our operating partnership may also participate in the distribution reinvestment plan and have cash otherwise distributable to them by our operating partnership invested in our common stock at the same price as shares of our common stock.
Stockholders who elect to participate in the distribution reinvestment plan, and who generally are subject to United States federal income taxation laws, will incur a tax liability on an amount equal to the fair value on the relevant distribution date of the shares of our common stock purchased with reinvested distributions, even though such stockholders have elected not to receive the distributions used to purchase those shares of common stock in cash. However, the tax consequences of participating in our distribution reinvestment plan will vary depending upon each participant’s particular circumstances, and stockholders are urged to consult their tax advisor regarding the specific tax consequences of participation in the distribution reinvestment plan.
All material information regarding the distributions to stockholders and the effect of reinvesting the distributions, including tax consequences, will be provided to our stockholders at least annually. Each stockholder participating in the distribution reinvestment plan will have an opportunity to withdraw from the plan at least annually after receiving this information.
 
Share Repurchase Plan
Our share repurchase plan may provide an opportunity for stockholders to have their shares of common stock repurchased by us, subject to certain restrictions and limitations. Notwithstanding anything in this share repurchase plan to the contrary, we will only repurchase shares in connection with the death or disability (as defined below) of a stockholder in accordance with the terms described herein. 
No shares can be repurchased under our share repurchase plan until after the first anniversary of the date of purchase of such shares; provided, however, that this holding period shall not apply to repurchases requested within two years after the death or disability of a stockholder.
On March 14, 2018, our board of directors determined to amend the terms of our share repurchase plan effective as of April 15, 2018 to (1) limit the amount of shares repurchased pursuant to our share repurchase plan each quarter to $2,000,000 and (2) revise the repurchase price to an amount equal to 93% of the most recently publicly disclosed estimated value per share. The share repurchase price is further reduced based on how long the stockholder has held the shares as follows:
 

									
			
	Share Purchase Anniversary	  	Repurchase Price
on Repurchase Date(1)

	Less than 1 year	  	No Repurchase Allowed
	1 year	  	92.5% of the Share Repurchase Price(4)

	2 years	  	95.0% of the Share Repurchase Price(4)

	3 years	  	97.5% of the Share Repurchase Price(4)

	4 years	  	100.0% of the Share Repurchase Price(4)

	In the event of a stockholder’s death or disability(2)
	  	Average Issue Price for Shares(3)

 
						
	(1)	As adjusted for any stock dividends, combinations, splits, recapitalizations or any similar transaction with respect to the shares of common stock. Repurchase price includes the full amount paid for each share, including all sales commissions and dealer manager fees.

						
	(2)	The required one year holding period to be eligible for shares to be repurchased under our share repurchase plan does not apply in the event of death or disability of a stockholder. For purposes of our share repurchase plan, a “disability” means (a) the stockholder has received a determination of disability based upon a physical or mental condition or impairment arising after the date the stockholder acquired the shares to be repurchased, and (b) the determination of such disability was made by the governmental agency responsible for reviewing and awarding the disability retirement benefits that the stockholder could be eligible to receive, which we refer to as the “applicable governmental agency.” The applicable governmental agencies are limited to the following: (i) the Social Security Administration; (ii) the U.S. Office of Personnel Management with respect to disability benefits under the Civil Service Retirement System, or CSRS; or (iii) the Veteran’s Administration; and in each case, the agency charged with administering disability benefits at that time on behalf of one of the applicable governmental agencies. Disability determinations by governmental agencies other than those listed above, including, but not limited to, worker’s compensation insurance or the administration or enforcement of the Rehabilitation Act of 1973, as amended, or the ADA will not entitle a stockholder to the terms available for the repurchase of shares. Repurchase requests following an award by the applicable governmental agency of disability, such as the Social Security Administration Notice of Award, a U.S. Office of Personnel Management determination of disability under CSRS, a Veteran’s Administration record of disability-related discharge, as the case may be, or such other documentation issued by the applicable governmental agency that we deem acceptable and demonstrates an award of the disability benefits. As the following disabilities generally do not entitle a worker to Social Security or related disability benefits, they will not qualify as a “disability” for purposes of our share repurchase plan: (a) disabilities occurring after the legal retirement age; (b) temporary disabilities; and (c) disabilities that do not render a worker incapable of performing substantial gainful activity. However, where a stockholder requests the repurchase of shares due to a disability and the stockholder does not have a disability that meets the definition described above, but is subject to similar circumstances, we may repurchase the stockholder’s shares, in the sole discretion of our board of directors.

						
	(3)	The purchase price per share for shares repurchased upon the death or disability of a stockholder will be equal to the average issue price per share for all of the stockholder’s shares.

						
	(4)	The “Share Repurchase Price” equals 93% of the Estimated Value per Share. The “Estimated Value per Share” is the most recently publicly disclosed estimated value per share determined by our board of directors.

The purchase price per share for shares repurchased pursuant to our share repurchase plan will be further reduced by the aggregate amount of net proceeds per share, if any, distributed to our stockholders prior to the repurchase date as a result of the sale of one or more of our assets that constitutes a return of capital distribution as a result of such sales.
Repurchases of shares of our common stock will be made quarterly upon written request to us at least 15 days prior to the end of the applicable quarter. Repurchase requests will be honored approximately 30 days following the end of the applicable quarter, which end of the applicable quarter we refer to as the repurchase date. Stockholders may withdraw their repurchase request at any time up to three business days prior to the repurchase date.

In connection with the announcement of the then-proposed merger with Steadfast Income REIT, Inc. and Steadfast Apartment REIT III, Inc., on August 5, 2019 (the "Mergers"), our board of directors approved the Amended and Restated Share Repurchase Plan, or the Amended & Restated SRP, which became effective September 5, 2019, and applied with repurchases made on the repurchase dates subsequent to the effective date of the Amended & Restated SRP. Under the Amended & Restated SRP, we only repurchased shares of common stock in connection with the death or qualifying disability (as determined by our board of directors in its sole discretion) of a stockholder, subject to certain terms and conditions specified in the Amended & Restated SRP. Repurchases pursuant to the Amended and Restated SRP continued to be limited to $2,000,000 per quarter.

On March 3, 2020, in connection with the closing of the Mergers, our board of directors adopted a Second Amended and Restated Share Repurchase Plan to: (1) allow all stockholders to request repurchases (as opposed to death and disability only), (2) limit the amount of shares repurchased pursuant to the Amended & Restated SRP each quarter to $4,000,000 and (3) set the repurchase price in all instances (including death and disability) to an amount equal to 93% of the most recent publicly disclosed estimated value per share. The $4,000,000 quarterly limit and the repurchase price of 93% of the estimated value per share took effect upon 30 days’ notice to stockholders and were in effect on the repurchase date at the end of April 2020 with respect to redemptions for the fiscal quarter ending March 31, 2020, or the First Quarter Redemptions, and we continue to limit First Quarter Redemptions to death and disability only.

On January 12, 2021, our board of directors amended our share repurchase plan to: (1) limit repurchase requests to death and qualifying disability only and (2) limit the amount of shares repurchased pursuant to the share repurchase plan each quarter to $3,000,000. The amendment will be in effect on the repurchase date at April 30, 2021, with respect to repurchases for the three months ending March 31, 2021. Share repurchase requests that do not meet the requirements for death and disability will be cancelled (including any requests received during the first quarter of 2021).
We cannot guarantee that the funds set aside for the share repurchase plan will be sufficient to accommodate all repurchase requests made in any quarter. In the event that we do not have sufficient funds available to repurchase all of the shares of our common stock for which repurchase requests have been submitted in any quarter, priority will be given to repurchase requests in the case of the death or disability of a stockholder. If we repurchase less than all of the shares subject to a repurchase request in any quarter, with respect to any shares which have not been repurchased, our stockholders can (1) withdraw their request for repurchase or (2) ask that we honor their request in a future quarter, if any, when such repurchases can be made pursuant to the limitations of the share repurchase plan and when sufficient funds are available. Such pending requests will be honored among all requests for redemptions in any given repurchase period as follows: first, pro rata as to repurchases sought upon a stockholder’s death or disability; and, next, pro rata as to other repurchase requests.
We are not obligated to repurchase shares of our common stock under the share repurchase plan. The share repurchase plan limits the number of shares to be repurchased in any calendar year to (1) 5% of the weighted average number of shares of our common stock outstanding during the prior calendar year or the $3,000,000 limit for any quarter and (2) those that could be funded from the net proceeds from the sale of shares under our distribution reinvestment plan in the prior calendar year, plus such additional funds as may be reserved for that purpose by our board of directors. Such sources of funds could include cash on hand, cash available from borrowings and cash from liquidations of securities investments as of the end of the applicable month, to the extent that such funds are not otherwise dedicated to a particular use, such as working capital, cash distributions to stockholders or purchases of real estate assets. There is no fee in connection with a repurchase of shares of our common stock.
Our board of directors may, in its sole discretion, amend, suspend, or terminate the share repurchase plan at any time upon 30 days’ notice to our stockholders if it determines that the funds available to fund the share repurchase plan are needed for other business or operational purposes or that amendment, suspension or termination of the share repurchase plan is in the best interest of our stockholders. Therefore, our stockholders may not have the opportunity to make a repurchase request prior to any potential termination of our share repurchase plan. The share repurchase plan will terminate in the event that a secondary market develops for our shares of common stock.
 
Business Combinations
Under the MGCL, business combinations between a Maryland corporation and an interested stockholder or the interested stockholder’s affiliate are prohibited for five years after the most recent date on which the stockholder becomes an interested stockholder. For this purpose, the term “business combinations” includes mergers, consolidations, share exchanges or, in circumstances specified in the MGCL, asset transfers and issuances or reclassifications of equity securities. An “interested stockholder” is defined for this purpose as: (1) any person who beneficially, directly or indirectly, owns 10% or more of the voting power of the corporation’s outstanding voting stock; or (2) an affiliate or associate of the corporation who, at any time within the two-year period prior to the date in question, was the beneficial owner, directly or indirectly, of 10% or more of the 

voting power of the then outstanding stock of the corporation. A person is not an interested stockholder under the MGCL if the board of directors approved in advance the transaction by which he or she otherwise would become an interested stockholder. However, in approving the transaction, the board of directors may provide that its approval is subject to compliance, at or after the time of approval, with any terms and conditions determined by the board of directors.
After the five-year prohibition, any business combination between the corporation and an interested stockholder generally must be recommended by the board of directors of the corporation and approved by the affirmative vote of at least: (1) 80% of the votes entitled to be cast by holders of outstanding shares of voting stock of the corporation and (2) two-thirds of the votes entitled to be cast by holders of voting stock of the corporation other than shares of stock held by the interested stockholder or its affiliate with whom the business combination is to be effected, or held by an affiliate or associate of the interested stockholder, voting together as a single voting group.
These super majority vote requirements do not apply if the corporation’s common stockholders receive a minimum price, as defined under the MGCL, for their shares of common stock in the form of cash or other consideration in the same form as previously paid by the interested stockholder for its shares of common stock.
None of these provisions of the MGCL will apply, however, to business combinations that are approved or exempted by the board of directors of the corporation prior to the time that the interested stockholder becomes an interested stockholder. Pursuant to the business combination statute, our board of directors has exempted any business combination involving us and any person. Consequently, the five-year prohibition and the super majority vote requirements will not apply to business combinations between us and any person. As a result, any person may be able to enter into business combinations with us that may not be in the best interest of our stockholders, without compliance with the super majority vote requirements and other provisions of the statute.
Should our board of directors opt into the business combination statute in the future, it may discourage others from trying to acquire control of us and increase the difficulty of consummating any offer.
Control Share Acquisitions
The MGCL provides that control shares of a Maryland corporation acquired in a control share acquisition have no voting rights except to the extent approved by a vote of stockholders entitled to cast two-thirds of the votes entitled to be cast on the matter. Shares of common stock owned by the acquirer, by officers or by employees who are directors of the corporation are not entitled to vote on the matter. “Control shares” are voting shares of stock which, if aggregated with all other shares of stock owned by the acquirer or with respect to which the acquirer has the right to vote or to direct the voting of, other than solely by virtue of a revocable proxy, would entitle the acquirer to exercise voting power in electing directors within one of the following ranges of voting powers:
 
												
	 	●	 	one-tenth or more but less than one-third;

 
												
	 	●	 	one-third or more but less than a majority; or

 
												
	 	●	 	a majority or more of all voting power.

 
Control shares do not include shares of stock the acquiring person is then entitled to vote as a result of having previously obtained stockholder approval or shares acquired directly from the corporation. Except as otherwise specified in the statute, a “control share acquisition” means the acquisition of issued and outstanding control shares. Once a person who has made or proposes to make a control share acquisition has undertaken to pay expenses and has satisfied other required conditions, the person may compel the board of directors to call a special meeting of stockholders to be held within 50 days of demand to consider the voting rights of the shares of stock. If no request for a meeting is made, the corporation may itself present the question at any stockholders meeting. If voting rights are not approved for the control shares at the meeting or if the acquiring person does not deliver an “acquiring person statement” for the control shares as required by the statute, the corporation may redeem any or all of the control shares for their fair value, except for control shares for which voting rights have previously been approved. Fair value is to be determined for this purpose without regard to the absence of voting rights for the control shares, and is to be determined as of the date of any meeting of stockholders at which the voting rights for control shares are considered and not approved or, if no meeting is held, the date of the last control share acquisition.

If voting rights for control shares are approved at a stockholders’ meeting and the acquirer becomes entitled to vote a majority of the shares of stock entitled to vote, all other stockholders may exercise appraisal rights. The fair value of the shares of stock as determined for purposes of these appraisal rights may not be less than the highest price per share paid in the control share acquisition. Some of the limitations and restrictions otherwise applicable to the exercise of dissenters’ rights do not apply in the context of a control share acquisition.
The control share acquisition statute does not apply to shares of stock acquired in a merger or consolidation or on a stock exchange if the corporation is a party to the transaction or to acquisitions approved or exempted by the charter or bylaws of the corporation. As permitted by the MGCL, we have provided in our bylaws that the control share provisions of the MGCL will not apply to any acquisition by any person of shares of our stock, but our board of directors retains the discretion to opt into these provisions in the future.
Advance Notice of Director Nominations and New Business
Our bylaws provide that with respect to an annual meeting of stockholders, nominations of individuals for election to our board of directors and the proposal of business to be considered by a stockholder may be made only (1) pursuant to our notice of the meeting, (2) by or at the direction of our board of directors or (3) by a stockholder who is a stockholder of record both at the time of giving the advance notice required by our bylaws and at the time of the meeting, who is entitled to vote at the meeting in the election of each individual so nominated or on any such other business and who has complied with the advance notice procedures of our bylaws. With respect to special meetings of stockholders, only the business specified in our notice of the meeting may be brought before the meeting. Nominations of individuals for election to our board of directors at a special meeting may be made only (1) by or at the direction of our board of directors or (2) provided that the special meeting has been called in accordance with our bylaws for the purpose of electing directors, by a stockholder who is a stockholder of record both at the time of giving the advance notice required by our bylaws and at the time of the meeting, who is entitled to vote at the meeting in the election of each individual so nominated and who has complied with the advance notice provisions of our bylaws.
Subtitle 8
Subtitle 8 of Title 3 of the MGCL, or Subtitle 8, permits a Maryland corporation with a class of equity securities registered under the Exchange Act and at least three independent directors to elect to be subject, by provision in its charter or bylaws or a resolution of its board of directors and notwithstanding any contrary provision in its charter or bylaws, to any or all of five provisions:
 
												
	 	●	 	a classified board of directors;

 
												
	 	●	 	a two-thirds vote requirement for removing a director;

 
												
	  
	●	 	a requirement that the number of directors be fixed only by vote of the directors;

 
												
	 	●	 	a requirement that vacancies on the board of directors be filled only by the remaining directors and for the remainder of the full term of the class of directors in which the vacancy occurred; and

 
												
	 	●	 	a majority requirement for the calling of a stockholder-requested special meeting of stockholders.

We have elected to provide that, at such time as we are eligible to make a Subtitle 8 election, vacancies on our board of directors may be filled only by the remaining directors and for the remainder of the full term of the directorship in which the vacancy occurred. Through provisions in STAR’s charter and bylaws unrelated to Subtitle 8, we vest in our board of directors the exclusive power to fix the number of directorships provided that the number is not fewer than three. We have not elected to be subject to the other provisions of Subtitle 8.
Restrictions on Roll-Up Transactions
In connection with a proposed “roll-up transaction,” which, in general terms, is any transaction involving our acquisition, merger, conversion or consolidation, directly or indirectly, and the issuance of securities of an entity that would be created or would survive after the successful completion of the roll-up transaction, we will obtain an appraisal of all of our properties from 

an independent expert. In order to qualify as an independent expert for this purpose, the person or entity must have no material current or prior business or personal relationship with the Former Advisor or our directors and must be engaged to a substantial extent in the business of rendering opinions regarding the value of assets of the type held by us. Our properties will be appraised on a consistent basis, and the appraisal will be based on the evaluation of all relevant information and will indicate the value of our properties as of a date immediately prior to the announcement of the proposed roll-up transaction. If the appraisal will be included in a prospectus used to offer the securities of an entity that would be created or would survive after the successful completion of a roll-up transaction, the appraisal will be filed with the SEC and, if applicable, the states in which registration of such securities is sought, as an exhibit to the registration statement for the offering. The appraisal will assume an orderly liquidation of properties over a 12-month period. The terms of the engagement of such independent expert will clearly state that the engagement is for our benefit and the benefit of our stockholders. We will include a summary of the independent appraisal, indicating all material assumptions underlying the appraisal, in a report to the stockholders in connection with a proposed roll-up transaction.
In connection with a proposed roll-up transaction, the person sponsoring the roll-up transaction must offer to common stockholders who vote against the proposal a choice of:
 
												
	 	●	 	accepting the securities of the entity that would be created or would survive after the successful completion of the roll-up transaction offered in the proposed roll-up transaction; or

 
												
	 	●	 	one of the following:

 
												
	 	●	 	remaining stockholders and preserving their interests in us on the same terms and conditions as existed previously; or

												
	 	●	 	receiving cash in an amount equal to their pro rata share of the appraised value of our net assets.

We are prohibited from participating in any proposed roll-up transaction:
 
												
	 	●	 	which would result in common stockholders having voting rights in the entity that would be created or would survive after the successful completion of the roll-up transaction that are less than those provided in STAR’s charter, including rights with respect to the election and removal of directors, annual and special meetings, amendment of the charter and our dissolution;

 
												
	 	●	 	which includes provisions that would operate as a material impediment to, or frustration of, the accumulation of shares by any purchaser of the securities of the entity that would be created or would survive after the successful completion of the roll-up transaction, except to the minimum extent necessary to preserve the tax status of such entity, or which would limit the ability of an investor to exercise the voting rights of its securities of the entity that would be created or would survive after the successful completion of the roll-up transaction on the basis of the number of shares held by that investor;

												
	 	●	 	in which our common stockholders’ rights to access the records of the entity that would be created or would survive after the successful completion of the roll-up transaction will be less than those provided in STAR’s charter and described in “-Meetings, Special Voting Requirements and Access To Records” above; or

 
												
	 	●	 	in which we would bear any of the costs of the roll-up transaction if our common stockholders reject the roll-up transaction.

Reports to Stockholders
STAR’s charter requires that we prepare an annual report and deliver it to our stockholders within 120 days after the end of each fiscal year. Among the matters that must be included in the annual report are:
 

												
	 	●	 	financial statements that are prepared in accordance with GAAP and are audited by our independent registered public accounting firm;

 
												
	 	●	 	the ratio of the costs of raising capital during the year to the capital raised, if applicable;

 
												
	 	●	 	the aggregate amount of investment management fees and the aggregate amount of other fees paid to the Former Advisor by us or third parties doing business with us during the year, if applicable;

 
												
	 	●	 	our total operating expenses for the year, stated as a percentage of our average invested assets and as a percentage of our net income;

 
												
	 	●	 	a report from the independent directors that our policies are in the best interests of our stockholders and the basis for such determination; and

 
												
	 	●	 	separately stated, full disclosure of all material terms, factors and circumstances surrounding any and all transactions involving us and the Former Advisor (prior to Internalization), a director or any affiliate thereof during the year. Our independent directors are specifically charged with a duty to examine and comment in the report on the fairness of any such transactions.

We are also subject to the informational reporting requirements of the Exchange Act, and accordingly, we file annual reports, quarterly reports, proxy statements and other information with the SEC. In addition, we will provide our stockholders directly with periodic updates, including annual and quarterly reports.
Stockholders may authorize us to provide such periodic updates by sending instructions in writing in a form acceptable to us to receive such periodic updates electronically. Unless stockholders elect in writing to receive such periodic updates electronically, all documents will be provided in paper form by mail. Stockholders must have internet access to use electronic delivery. While we impose no additional charge for this service, there may be potential costs associated with electronic delivery, such as on-line charges. The periodic updates will be available on our website. Stockholders may access and print all periodic updates provided through this service. As periodic updates become available, we will notify our stockholders by sending them an e-mail message that will include instructions on how to retrieve the periodic updates. If our e-mail notification is returned to us as “undeliverable,” we will contact our stockholders to obtain their updated e-mail address. If we are unable to obtain a valid e-mail address for our stockholders, we will resume sending a paper copy by regular U.S. mail to their address of record. Our stockholders may revoke their consent for electronic delivery at any time and we will resume sending our stockholders a paper copy of all periodic updates. Our stockholders will have the option to “unsubscribe” from the election of electronic delivery of documents on our website. In addition, every electronic communication sent by us will include a website link that will direct our stockholders to the website page where such changes to the election to receive electronic delivery of documents can be made. However, in order for us to be properly notified, our stockholders’ revocation(s) must be given to us within a reasonable time before electronic delivery has commenced. We will provide our stockholders with paper copies at any time upon request. Such request will not constitute revocation of their consent(s) to receive periodic updates electronically.
In addition to providing information mandated by STAR’s charter and the Securities Act of 1933, as amended and Exchange Act as set forth above, we intend to post on our website at www.steadfastliving.com, and file with the SEC, certain operational data each quarter with respect to our portfolio. We believe that posting this additional operational data will benefit investors by consistently providing current information and greater transparency with respect to the performance of our investments.
Estimated Value Per Share
In addition to the information described under “-Reports to Stockholders” above, we expect to disclose an updated estimated NAV per share of our common stock on at least an annual basis, in a current report on Form 8-K or other periodic report. Our estimated value per share may not be indicative of the price that our stockholders would receive if they sold our shares in an arm’s-length transaction, if our shares were actively traded or if we were liquidated. In addition, the proceeds received from a liquidation of our assets is expected to be substantially less than the price a stockholder paid for such shares.
Exclusive Forum for Certain Claims

Our bylaws provide that, unless we consent in writing to the selection of an alternative forum, the Circuit Court for Baltimore City, Maryland, or, if that Court does not have jurisdiction, the United States District Court for the District of Maryland, Baltimore Division, will be the sole and exclusive forum for (a) any derivative action or proceeding brought on behalf of our company, (b) any action asserting a claim of breach of any duty owed by any of our directors or officers or employees to us or to our stockholders, (c) any action asserting a claim against us or any of our directors or officers or employees arising pursuant to any provision of the MGCL or STAR’s charter or bylaws or (d) any action asserting a claim against us or any of our directors or officers or employees that is governed by the internal affairs doctrine.ASSET PURCHASE
AGREEMENT

 

 

dated as
of

 

 

March 11,
2021

 

 

by and between

 

 

HOLLISTER
& BLACKSMITH, INC. doing business as

AMERICAN
CANNABIS COMPANY. a wholly owned subsidiary of

AMERICAN
CANNABIS COMPANY, INC.

 

 

and

 

 

MEDIHEMP,
LLC, and Its Wholly Owned Subsidiary, SLAM ENTERPRISES, LLC, and MEDICAL CANNABIS CAREGIVERS, INC., collectively doing business
as NATURALEAF

 

 

 

 

    	 

    	 

    

 

 

 

TABLE
OF CONTENTS

 

	ARTICLE
    1 PURCHASE AND SALE OF ASSETS AND ASSUMPTION OF LIABILITIES	1
	1.1
    Sale and Transfer of Assets.	1
	1.2
    Excluded Assets.	2
	1.3
    Assumed Liabilities.	2
	1.4
    Liabilities Not Assumed.	3
	ARTICLE
    2 CLOSING/PURCHASE PRICE	4
	2.1
    The Closing.	4
	2.2
    Purchase Price.	4
	2.3
    Payment.	4
	2.4
    Condition Precedent.	4
	2.5
    Closing Deliveries by Seller.	4
	2.6
    Closing Deliveries by Buyer.	5
	2.7
    Transaction Taxes.	5
	ARTICLE
    3 REPRESENTATIONS AND WARRANTIES OF SELLER	5
	3.1
    Organization, Power, Standing.	5
	3.2
    Authorization and Approval of Agreements.	6
	3.3
    No Conflict; Third-Party Consents.	6
	3.4
    Approvals.	6
	3.5
    Financial Information; No Undisclosed Liabilities.	6
	3.6
    Contracts.	6
	3.7
    Leased Real Property; Tangible Property; Title to Acquired Assets.	7
	3.8
    Intellectual Property.	7
	3.9
    Tax Matters.	8
	3.10
    Litigation.	8
	3.11
    Employee Matters.	8
	3.12
    Compliance with Laws.	8
	3.13
    Material Customers.	9
	3.14
    Insurance.	9
	3.15
    Permits.	9
	3.16
    Satisfaction of Financial Obligations.	10
	3.17
    Brokers and Finders.	10
	3.18
    Other Representations and Warranties.	10
	3.19
    Fair Consideration; No Fraudulent Conveyance.	11
	ARTICLE
    4 REPRESENTATIONS AND WARRANTIES OF SELLER REGARDING PURCHASE OF SECURITIES	11
	4.1
    Purchase Entirely for Own Account.	11
	4.2
    Disclosure of Information.	11
	4.3
    Restricted Securities.	12

    	 

    	 

    

	4.4
    Rule 144.	12
	4.5
    Resale Securities Restrictions.	12
	4.6
    No General Solicitation.	12
	4.7
    Reliance on Exemptions.	12
	ARTICLE
    5 REPRESENTATIONS AND WARRANTIES OF BUYER	12
	5.1
    Organization, Corporate Power and Authority.	12
	5.2
    Authorization of Agreement.	13
	5.3
    Effect of Agreement.	13
	5.4
    Approvals.	13
	5.5
    Legal Proceedings.	13
	5.6
    Capitalization.	13
	5.7
    Due Issuance.	13
	5.8
    Brokers and Finders.	14
	5.9
    Independent Investigation.	14
	ARTICLE
    6 ADDITIONAL COVENANTS	14
	6.1
    Confidentiality.	14
	6.2
    Financial Statement Cooperation.	14
	6.3
    Tax Cooperation.	14
	6.4
    All Reasonable Efforts.	14
	6.5
    Post-Closing Cooperation Relating to Acquired Assets.	14
	6.6
    Subsequent Distribution of Stock.	15
	6.7
    Blue Sky Laws.	15
	6.8
    Stop-Transfer Notice.	15
	6.9
    Restrictions on Transfer.	15
	6.10
    Legend.	15
	6.11
    Non-competition and Non Solicitation.	16
	ARTICLE
    7 INDEMNIFICATION; SURVIVAL	17
	7.1
    Indemnification by Seller.	17
	7.2
    Indemnification by Buyer.	17
	7.3
    Termination of Indemnification.	17
	7.4
    Procedures Relating to Indemnification for Third-Party Claims.	17
	7.5
    Procedures Relating to Indemnification for Non-Third-Party Claims.	18
	7.6
    Survival of Representations, Warranties, Covenants and Agreements.	19
	7.7
    Sole Remedy.	19
	7.8
    Right to Indemnification.	19
	7.9
    Characterization of Indemnification Payments.	19
	ARTICLE
    8 GENERAL	19
	8.1
    Amendments; Waivers.	19
	8.2
    Exhibits; Integration.	19
	8.3
    Governing Law; Submission to Jurisdiction.	19
	8.4
    No Assignment.	20
	8.5
    Headings.	20

    	 

    	 

    

	8.6
    Counterparts.	20
	8.7
    Publicity and Reports.	20
	8.8
    Remedies Cumulative.	20
	8.9
    Parties in Interest.	20
	8.10
    Notices.	20
	8.11
    Expenses and Attorneys’ Fees.	21
	8.12
    Specific Performance.	21
	ARTICLE
    9 DEFINITIONS	21
	9.1
    Definitions.	21

 

 

 

    	 

    	 

    

 

ASSET
PURCHASE AGREEMENT

This
Asset Purchase Agreement (this “Agreement”) is dated as of March 11, 2021 (the “Effective Date”),
by and among Hollister & Blacksmith, Inc., a Colorado corporation, doing business as American Cannabis Company, a wholly owned
subsidiary of American Cannabis Company, Inc., a Delaware corporation (collectively referred to as the “Buyer”),
and Medihemp, LLC, a Colorado limited liability company (“Medihemp”), and its wholly owned subsidiary, SLAM Enterprises,
LLC, a Colorado limited liability company (“SLAM”), and Medical Cannabis Caregivers, Inc., a Colorado corporation,
(“Medical Cannabis”) all collectively doing business as “Naturaleaf.” Medihemp, SLAM and Medical
Cannabis may be collectively referred to hereafter as the “Seller.” Seller and Buyer may be collectively referred
to as the “Parties.” Capitalized terms used herein without definition are defined in Article 9.

RECITALS

WHEREAS,
Medihemp, and SLAM respectively owns fixed assets and operates two retail Medical Marijuana Centers located at 1004 S. Tejon Street,
Colorado Springs, CO 80903, and 2727 Palmer Park Blvd. Suite A, Colorado Springs, CO 80909.

WHEREAS,
Medical Cannabis owns fixed assets and operates a retail Medical Marijuana Center located at 5875 Lehman Drive, Ste. 100, Colorado
Springs, CO 80918.

WHEREAS,
Medical Cannabis also owns and operates a Medical Marijuana Optional Premises Cultivation license, and a Medical Marijuana Infused
Product Manufacturer license, along with fixed assets all located at 2611 Durango Drive, Colorado Springs, CO 80910.

WHEREAS,
Medihemp, SLAM, and Medical Cannabis’ fixed assets, associated intellectual property, and respective Medical Marijuana Center
licenses, Medical Marijuana Infused Product Manufacturer license and Medical Marijuana Optional Premises Cultivation license are
hereafter referred to as Seller’s “Business.”

WHEREAS,
the Parties desire that Seller sell, transfer, assign, convey and deliver to Buyer the assets, properties and liabilities of Seller’s
Business, and that Buyer purchase, acquire, assume and accept the same, subject to the terms and conditions set forth in this
Agreement.

AGREEMENT

NOW,
THEREFORE, in consideration of the mutual covenants and agreements contained in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

ARTICLE
1

PURCHASE AND SALE OF ASSETS AND ASSUMPTION OF LIABILITIES

1.1
Sale and Transfer of Assets.     Upon
the terms and subject to the conditions set forth in this Agreement, at the Closing, Seller shall sell, transfer, assign, convey,
and deliver to Buyer, and Buyer shall purchase, acquire and accept from Seller, all of Seller’s right, title, and interest
in and to the properties, rights, and assets related to Seller’s Business (excluding the Excluded Assets), as and to the
extent existing on the Closing Date (such properties, rights and assets are hereinafter collectively referred to as the “Acquired
Assets”), free and clear of all Liens other than Permitted Liens, including:

		·	all
                                         Contracts associated with the Business, including, without limitation, the Contracts
                                         set forth on Schedule 1.1(a) (the “Assumed Contracts”);

		·	all
                                         SLAM, Medical Cannabis and Medihemp Medical Marijuana Center licenses; Medical Cannabis’
                                         Medical Marijuana Infused Product Manufacturer license, and Medical Marijuana Optional
                                         Premises Cultivation license issued by the Colorado Marijuana Enforcement Division (“MED”)
                                         and the corresponding City of Colorado Springs (“City”) licenses set forth
                                         in Schedule 1.1(b) (the “Licenses”);

    	 	1	 

     

    
		·	all
                                         Seller fixed assets, including fixtures and equipment associated with the Business;

		·	all
                                         Seller leases associated with the Business that are assignable with landlord authorization;

		·	all
                                         Customer Accounts associated with the Business; including, without limitation, the Customer
                                         Accounts set forth on Schedule 1.1(c) (the “Assumed Customer Accounts”);

		·	all
                                         of Seller’s claims, demands, deposits (excluding damage deposits for leases, utilities
                                         and any third parties that Seller paid), refunds, rebates, causes of action, rights of
                                         recovery, rights of set-off and rights of recoupment relating to the foregoing, arising
                                         on or after the Closing Date;

		·	all
                                         general, financial and personnel records, ledgers, sales invoices, accounts receivable
                                         records, files, books and documents, correspondence and other files and records, including
                                         customer lists and sales records, of Seller relating to the Business;

		·	all
                                         prepaid charges, expenses, sums and fees of Seller;

		·	all
                                         trade names, logos, common law trademarks, trade dress, registered trademarks and service
                                         marks of the Business and all other Intellectual Property used in the Business as set
                                         forth on Schedule 1.1(d);

		·	all
                                         goodwill of the Business owned by Seller; and

		·	all
                                         other properties, assets and rights, tangible or intangible, owned or held by Seller
                                         as of the Closing Date that are used in the operation of the Business, and which are
                                         not otherwise Excluded Assets.

1.2
Excluded Assets.Buyer is not acquiring,
and Seller shall retain after the Closing, the following assets, rights, and properties not specifically included in the Acquired
Assets (collectively, the “Excluded Assets”).  Without limiting the generality of the foregoing, and notwithstanding
anything to the contrary contained in Section 1.1 or elsewhere in this Agreement, the Excluded Assets shall include:

		·	the
                                         Contracts to which Seller is a party that are not Assumed Contracts set forth on Schedule
                                         1.2(a) (collectively, the “Excluded Contracts”);

		·	all
                                         amounts due to Seller from customers related to services provided by Seller up to the
                                         Closing Date;

		·	the
                                         documents relating to the Medihemp, SLAM and Medical Cannabis’ respective organization,
                                         maintenance and existence;

		·	all
                                         Tax records of Seller; provided, however, that Seller shall provide Buyer with copies
                                         of such records that relate to any of the Acquired Assets or Assumed Liabilities;

		·	all
                                         Seller cash, accounts receivable and cash equivalents as of the Closing Date;

		·	damage
                                         deposits on real estate, and any deposits to utilities or third parties that Seller paid
                                         prior to Closing.

1.3
Assumed Liabilities.     Subject
to the terms and conditions set forth in this Agreement, at the Closing, Buyer shall assume and thereafter pay, perform and discharge
as and when due only the following Liabilities (and specifically excluding the Excluded Liabilities) of Seller (the “Assumed
Liabilities”):

		·	all
                                         Liabilities incurred by Buyer under the Assumed Contracts and Assumed Customer Accounts,
                                         in each case excluding any such Liabilities to the extent arising from any occurrence
                                         or breach, default, misconduct, negligence or other form of noncompliance by Seller thereunder
                                         prior to the Closing Date; and,

		·	all
                                         Liabilities for or in respect of Taxes in respect of the Acquired Assets arising after
                                         the Closing Date with respect to periods after the Closing Date.

    	 	2	 

     

    

1.4
Liabilities Not Assumed.     Buyer
shall not assume or otherwise be responsible for any of the Excluded Liabilities.  The Excluded Liabilities shall be retained
by and shall remain the sole responsibility of Medical Cannabis, SLAM and Medihemp respectively, and Seller shall pay, perform
and discharge the Excluded Liabilities as and when due.  “Excluded Liabilities” shall mean every Liability
of Seller other than the Assumed Liabilities, including:

		·	any
                                         Liability relating to, based in whole or in part on events or conditions occurring or
                                         existing in connection with, or arising out of, the Business as operated prior to the
                                         Closing Date, or the ownership, possession, use, operation or sale or other disposition
                                         prior to the Closing Date of any Acquired Assets (or any other assets, properties, rights
                                         or interests associated, at any time prior to the Closing Date, with the Business);

		·	any
                                         Liability under the Assumed Contracts to the extent arising from any indemnification
                                         obligation, breach, default, misconduct, negligence or other form of noncompliance by
                                         Seller thereunder prior to the Closing Date;

		·	any
                                         Liability arising from any Contract of Seller (other than the Assumed Contracts after
                                         the Closing Date subject to the limitations set forth herein), including the Excluded
                                         Contracts;

		·	any
                                         Liability related to any Claim based in whole or in part on events or conditions occurring
                                         or existing in connection with, or arising out of, or otherwise relating to, the Business
                                         as operated by Seller or any of its Affiliates (or any of their respective predecessors-in-interest)
                                         prior to the Closing Date, or the ownership, possession, use, operation, sale or other
                                         disposition prior to the Closing Date of any of the Acquired Assets (or any other assets,
                                         properties, rights or interests associated, at any time prior to the Closing Date, with
                                         the Business);

		·	any
                                         Liability with respect to any Employee Plan or any Employee Benefit Arrangement of Seller
                                         (including under any employment, severance, deferred compensation, retention or termination
                                         agreement with any employee of Seller or relating to employee payroll, vacation, sick
                                         leave, workers compensation or unemployment benefits accrued through the Closing Date
                                         or thereafter;

		·	any
                                         Liability arising out of or relating to any employment-related claim or grievance of
                                         any current or former employee of Seller arising out of or relating to events occurring
                                         prior to the Closing Date;

		·	any
                                         Liability of Seller to any stockholder or other equity holder or former stockholder or
                                         other former equity holder of Seller;

		·	any
                                         Liability of Seller for Taxes;

		·	any
                                         Liability arising from any failure by Seller to comply with any applicable Law or Order;

		·	any
                                         Indebtedness of Seller (other than Assumed Liabilities as provided herein), including
                                         amounts owed to Affiliates of Seller;

		·	any
                                         Liability relating to litigation of or involving Seller or otherwise affecting any of
                                         its assets;

		·	any
                                         Liability of Seller under this Agreement or any other Transaction Document;

		·	any
                                         Liability of Seller arising in connection with the consummation of the Transactions;

		·	any
                                         Liability of Seller to the extent relating to any property or facility presently or formerly
                                         owned, operated, leased or used by Seller or their corporate predecessors, including
                                         any such Liability arising under or relating to Environmental, Health and Safety Laws;
                                         and

		·	any
                                         other Liability relating to the Excluded Assets.

    	 	3	 

     

    

ARTICLE
2

CLOSING/PURCHASE PRICE

2.1
The Closing. Subject to the terms and conditions of this Agreement, the consummation of the transactions contemplated
by this Agreement, the closing (the “Closing”), shall take place remotely via the electronic exchange of documents
and signatures on the date and at the time on which Seller and Buyer mutually agree and submit Schedule A of the MED’s Contingent
Approval Letter issued pursuant to 1 CCR 212-3:2-245 (B) & (D), which shall be within five (5) days of such Contingent Approval
Letter and wire transfer of the funds per Section 2.3 of this Agreement or at such other time, date, or place as Seller and Buyer
mutually agree in writing, but not to exceed thirty (30) days, the “Closing Date”).  The Closing will be deemed
effective as of 5:01 p.m. Mountain Time on the Closing Date.

2.2
Purchase Price. The aggregate purchase price for the Acquired Business, Assets and the Assumed Liabilities is two million,
two hundred thousand US dollars ($2,200,000) in cash and three million (3,000,000) shares of Buyer’s common stock (the “Purchase
Price”).

2.3
Payment. Upon execution of this Agreement, Buyer shall wire twenty-thousand US dollars ($20,000) into the bank account
designated by Seller, which shall be non-refundable. Within thirty (30) days of execution of this Agreement, the Parties shall
submit the Change of Ownership applications with the MED and the City (together “Licensing Authorities”). Upon receipt
of the Contingent Approval Letter of the Change of Ownership applications from the Licensing Authorities, Buyer shall wire one
million, eighty thousand US dollars ($1,080,000) into the bank account designated by Seller. On or before the Closing Date, Buyer
shall issue to Seller, or Seller’s designees, three million (3,000,000) shares of American Cannabis Company, Inc. restricted
common stock (OTCQB: “AMMJ”) (“Buyer Common Stock”) in book entry with Buyer’s transfer agent, Pacific
Stock Transfer Company. The cost basis for the Buyer Common Stock issued shall be the Closing Price (“Closing Price”)
of American Cannabis Company, Inc.’s common stock on the Closing Date as referenced on the OTC Markets Listing Service.

The
balance of one million, one hundred thousand US dollars ($1,100,000) due and payable shall be paid pursuant to a promissory note
executed by Buyer to Seller upon the Contingent Approval Letter, in a form substantially similar to Exhibit 2.3(a) (the “Promissory
Note”). The Promissory Note shall be guaranteed by American Cannabis Company, Inc, in a form substantially similar to Exhibit
2.3 (b). The maturity date of the Promissory Note shall be 365 days from the Closing Date. The Promissory Note shall include 10%
simple interest accruing annually. The Promissory Note shall not be subject to a pre-payment penalty. The Promissory note shall
be secured with the Acquired Assets (including any assets purchased to replace Acquired Assets) and the Licenses through a duly
executed security agreement in a form substantially similar to Exhibit 2.3 (b). Seller shall cooperate with Buyer in filing a
UCC filing for the purchased assets if Buyer elects to file.

2.4
Condition Precedent. Buyer shall have sixty (60) days to complete its due diligence (“Due Diligence Period”).
Buyer may terminate this Agreement if it is not satisfied with the due diligence. If Buyer terminates this Agreement during the
Due Diligence Period, the initial payment of twenty-thousand US Dollars ($20,000) will be deemed a termination fee. In the event
that the Parties do not obtain the approval of the Licensing Authorities transferring Seller’s respective Licenses to Buyer,
this Agreement will terminate, and (i) the initial payment of twenty-thousand US Dollars ($20,000) will be deemed a termination
fee; (ii) if issued to Seller, the three million (3,000,000) shares of Buyer’s common stock shall be cancelled and returned
to treasury by operation of this Section 2.4, with instructions to Buyer’s transfer agent, Pacific Stock Transfer Company;
and, (iv) the Promissory Note (referenced below in the following paragraph) shall be cancelled with prejudice.

2.5
Closing Deliveries by Seller. On the Closing Date, Seller shall deliver or cause to be delivered to Buyer:

		·	resolutions
                                         of Seller’s respective shareholders, members, directors and managers required to
                                         authorize the execution, delivery and performance of this Agreement and the consummation
                                         of the Transactions and a certificate of the Secretary of Sellers, dated as of the Closing
                                         Date, that such resolutions were duly adopted and are in full force and effect;

    	 	4	 

     

    

		·	a
                                         Bill of Sale and Assignment and Assumption, duly executed by Seller, in the form attached
                                         hereto as Exhibit A;

		·	a
                                         properly executed statement described in Treasury Regulations § 1.1445-2(b)(2)
                                         certifying that the Seller is not a foreign person for purposes of Code Section 1445
                                         in the form attached hereto as Exhibit B;

		·	copies
                                         of all consents to assignment to Buyer of each Acquired Asset, to the extent necessary
                                         for transfer, included in the Schedules; and,

		·	such
                                         other documents and instruments as may be required under this Agreement, or as are customary
                                         and reasonable and requested by Buyer to effect the Transactions contemplated by this
                                         Agreement.

2.6
Closing Deliveries by Buyer. On the Closing Date, Buyer shall deliver or cause to be delivered to Seller:

		·	resolutions
                                         of Buyer’s respective shareholders, members, directors and managers required to
                                         authorize the execution, delivery and performance of this Agreement and the consummation
                                         of the Transactions and a certificate of the Secretary of Buyers, dated as of the Closing
                                         Date, that such resolutions were duly adopted and are in full force and effect;

		·	subject
                                         to the terms and conditions in Article 2, the Purchase Price, including book entry confirmation
                                         of issuance of the Buyer restricted common stock to Sellers or Sellers’ designees;

		·	a
                                         Bill of Sale, duly executed by Seller;

		·	an
                                         Assignment and Assumption Agreement duly executed by Seller;

		·	a
                                         Consent to Assignment in the form attached hereto as executed by the authorized counterparty
                                         to each Assumed Contract listed on Schedule 1.1(a);

		·	a
                                         fully-executed copy of each Assumed Contract listed on Schedule 1.1(a); and,

		·	such
                                         other documents and instruments as may be required under this Agreement, or as are customary
                                         and reasonable and requested by Seller to effect the Transactions contemplated by this
                                         Agreement.

2.7
Transaction Taxes. Buyer shall be responsible for paying, shall promptly discharge when due, and shall reimburse, indemnify
and hold harmless Seller from, any sales or use, transfer, real property gains, excise, stamp, value added or other similar Taxes,
imposed on Seller or Buyer resulting from the sale of the Acquired Assets (“Transaction Taxes”).  Buyer
and Seller shall cooperate to the extent commercially reasonable and legally permitted to minimize any Transaction Taxes.

ARTICLE
3

REPRESENTATIONS AND WARRANTIES OF SELLER

Except
as set forth in the Seller Disclosure Schedules, Seller represents and warrants to Buyer that the statements contained in this
Article 3 are true and correct in all material respects as of the Effective Date:

3.1
Organization, Power, Standing. SLAM and Medihemp are limited liability companies duly organized, validly existing and
in good standing under the laws of the state of Colorado. Medical Cannabis Caregivers, Inc. is a corporation duly organized, validly
existing and in good standing under the laws of the state of Colorado.  Seller has all requisite limited liability company
and corporate power and authority to own, operate or lease the Acquired Assets owned, operated and leased by it to conduct the
Business as currently conducted as of the date of this Agreement.  Seller is duly authorized to conduct business and is in
good standing in each jurisdiction where such authorization is required to conduct the Business as currently conducted by it as
of the date of this Agreement.  True and complete copies of the Articles of Organization and Operating Agreement of Seller,
as the same may have been amended to-date, have been made available to Buyer.  Such organizational documents are in full
force and effect, and Seller is not in violation of any provision of such organizational documents.

    	 	5	 

     

    

There
are no options, warrants, calls, rights, pre-emptive rights, commitments, agreements or arrangements of any kind to which Seller
(or any Affiliates thereof), is a party or by which any of them is bound or to which they are subject, relating to the sale, issuance
or voting of, or the granting of rights to acquire, any equity interest in, Seller or any securities convertible or exchangeable
into or evidencing the right to purchase any equity interest in Seller, or obligating Seller or any of its Affiliates to grant,
extend or enter into any such option, warrant, call, right, commitment or agreement.  There is no Indebtedness having the
right to vote on matters involving Seller.  There are no existing rights to registration under the Securities Act, with respect
to any shares or interests of the capital stock of, or other equity interest in, Seller.

3.2
Authorization and Approval of Agreements.     Seller has sole power and authority to execute
this Agreement and the Transaction Documents to which it is a party.  The execution, delivery and performance by Seller of
the Transaction Documents, and the consummation by it of the Transactions, have been duly authorized by all necessary company
action by Seller and no further action by Seller or any of its managers, directors, shareholders, members or unit holders is required.
 This Agreement has been, and each other Transaction Document will be, at the Closing, duly executed and delivered by Seller
and constitute, or will, when delivered, constitute the legal, valid and binding obligation of Seller, enforceable against Seller
in accordance with their respective terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium and
other similar Laws and equitable principles relating to or limiting creditors’ rights generally.

3.3
No Conflict; Third-Party Consents.     The execution and delivery of this Agreement, and the
other Transaction Documents do not, and the performance and consummation of the Transactions will not (i) violate or conflict
with the provisions of the Articles of Organization, Incorporation, By-Laws or Operating Agreement of Seller, (ii) require any
consent, approval or notice under, violate or result in the violation of, conflict with or result in a breach of any provisions
of, constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, result in
the termination of, accelerate the performance required by or result in a right of termination or acceleration, result in the
loss of a benefit under or result in the creation of any Lien upon any of the Acquired Assets under the terms, conditions or provisions
of any Contract, instrument, or other obligation to which Seller is a party or any of Seller’s properties or assets are
subject, (iii) result in a breach or violation by Seller of any of the terms, conditions or provisions of any Law or Order, or
(iv) require on the part of Seller any Permit to be obtained or made.  

3.4
Approvals. Except for such approvals of the Licensing Authorities, no consent, approval or authorization of, or registration
or filing with, any Person or Governmental Entity is required in connection with the execution or delivery this Agreement or any
other Transaction Document by Seller or the consummation of the Transactions by Seller.

3.5
Financial Information; No Undisclosed Liabilities.     Seller has delivered to Buyer, and Section
3.5(a) of the Seller Disclosure Schedule contains, audited financial statements satisfying ASC 805 with true and complete
copies of the balance sheet and statement of operations of Seller as of December 31, 2020, with corresponding statements of income,
and statements of members’ equity and statements of cash flows for December 31, 2020 (collectively, the “Financial
Statements”).  The Financial Statements (i) fairly present, in all material respects, the financial condition of the
Business as of such date, the results of the Business’ operations and changes in members’ equity, and cash flows at
and as of the dates and during the periods specified, and (ii) were compiled from books and records regularly maintained by management
of Seller used to prepare the Financial Statements of the Business.  To the Knowledge of Seller, Seller has no liabilities
other than as set forth in the Financial Statements or other liabilities incurred in the ordinary course of business and consistent
with past practice. Seller has no material liabilities, obligations or commitments of any nature whatsoever, asserted or unasserted,
known or unknown, absolute or contingent, accrued or unaccrued, matured or unmatured or otherwise that would have a Material Adverse
Effect on Seller’s Business, except (a) those which are adequately reflected or reserved against in the Financial Statements,
and (b) those which have been incurred in the ordinary course of business consistent with past practice since which are not, individually
or in the aggregate, material in amount.  

    	 	6	 

     

    

3.6
Contracts.     Section 3.6(a) of the Seller Disclosure Schedule sets forth a list as of
the date of this Agreement of all the material written Contracts related to the Business to which Seller is a party.  Prior
to the date hereof, Seller has made available to Buyer true, correct and complete copies of all of such material written Contracts,
each such material written Contract is legal, valid, binding, enforceable, and in full force and effect, and except for any case
where a material written Contract expires in accordance with its terms after the date of this Agreement, Seller is not in breach
or default in any material respect under any such Contract, and to the Knowledge of Seller, no other party to any such Contract
is in breach or default thereof.  None of the material written Contracts is between Seller and any member, officer, director,
Affiliate of family member thereof.

3.7
Leased Real Property; Tangible Property; Title to Acquired Assets. Seller has not acquired or disposed of any ownership
interest in any real property.  Section 3.7(a) of the Seller Disclosure Schedule contains a list of all the addresses
of all real property leased by Seller (to the extent applicable to the Business), indicating the name and address of the lessor
and/or sublessor together with any amendments, modifications, extensions or other agreements thereto (the “Real Property
Leases”).  With respect to the premises subject of the Real Property Leases, (i) Seller has quiet possession thereof,
and has valid leasehold interests providing exclusive and legally enforceable rights to use such premises, free and clear of all
Liens other than Permitted Liens; (ii) the current use of the premises by Seller does not violate the certificate of occupancy
thereof, any local zoning or similar land use or other Laws or any of the terms and conditions of the applicable Real Property
Lease; and (iii) Seller has not received written notice of any pending or threatened condemnation proceeding, or of any sale or
other disposition in lieu of condemnation, affecting any of the same.  There are no leases, subleases, licenses, concessions
or other agreements granting to any party or parties other than Seller the right of use or occupancy of any portion of, or any
interest in, any of the premises that are the subject of the Real Property Leases, and, to the Knowledge of Seller, there are
no outstanding options or rights of first refusal to purchase any of the same.  No premises that are the subject of any Real
Property Lease are used for any material purpose other than the conduct of the Business.  

Seller
has good, marketable and valid title to, or a valid license and/or leasehold interest in, all of the Acquired Assets, free and
clear of any Liens.  The properties and assets of the Business are suitable for the purposes for which they are intended,
have been maintained in accordance with normal industry practices and are in good operating condition and repair in all material
respects and are usable in the ordinary course of business.

The
Acquired Assets constitute all of the property and assets (real, personal, tangible and intangible) used by Seller in the Business
as presently conducted and are sufficient to enable Buyer to operate the Business immediately after the Closing in substantially
the same manner as Seller conducted the Business on the Closing Date.

3.8
Intellectual Property.

		·	Business
                                         Intellectual Property.  Section 3.8(a) of the Seller Disclosure Schedule
                                         contains a complete and accurate list of the material Business Intellectual Property
                                         that is used to conduct the Business by Seller.

		·	License
                                         Agreements.  Seller is not a party to any license, sublicense or other agreement
                                         relating to Business Intellectual Property pursuant to which Seller either licenses any
                                         Business Intellectual Property owned by Seller or relating to the right of Seller to
                                         use the intellectual property or proprietary rights of any Person.

		·	No
                                         Infringement.  To the Knowledge of Seller, Seller’s operation of the Business
                                         does not infringe upon the Intellectual Property rights of any other Person.  To
                                         the Knowledge of Seller, no Person or any of such Person’s products or services,
                                         Intellectual Property or other operation of such Person’s business is infringing
                                         upon (including infringement by dilution), violating or misappropriating any Business
                                         Intellectual Property.  

		·	No
                                         Liens/Ownership.  To the Knowledge of Seller, Seller has all right, title and
                                         interest in to or all required rights to use the Business Intellectual Property free
                                         and clear of all Liens other than Permitted Liens.

 

    	 	7	 

     

    

3.9
Tax Matters.

Seller
has or will have (i) timely filed with the appropriate Taxing Authority (taking into account all available extensions) all Tax
Returns concerning Taxes applicable to the Acquired Assets or the Business that are required to be filed by applicable Law in
all federal, state, local or foreign jurisdictions in which such Tax Returns are required to be filed, and all such Tax Returns
are correct and complete in all material respects, and (ii) timely paid in full all Taxes required to be paid with respect to
the Acquired Assets or the Business (whether or not shown as due on such Tax Returns).

There
is no Action pending, nor to the Knowledge of Seller, threat or contemplation of Action, with regard to Taxes, that primarily
or exclusively relates to the Acquired Assets or the Business and that would be binding on Buyer or give rise to a Lien with respect
to Taxes upon any of the Acquired Assets.  

Seller
has not received (nor is subject to) any ruling from any Taxing Authority nor has it entered into (nor are any of them subject
to) any election, consent, or agreement (including a closing agreement) with a Taxing Authority with respect to any Acquired Asset
or the Business that would be binding on Buyer.

3.10
Litigation.     Except as set forth on Section 3.10 of the Seller Disclosure Schedule,
(i) there is no Action pending, nor to the Knowledge of Seller, threatened against Seller or that relates to the Acquired Assets,
the Assumed Liabilities or the Business, and (ii) there is no Order to which Seller is subject. There is no unsatisfied judgment
or any Order applicable to Seller, the Business, or the Acquired Assets.

3.11
Employee Matters.

Section
3.11(a) of the Seller Disclosure Schedule sets forth (i) a true, correct and complete list, as of the date hereof, of the
names or employee numbers, departments, job titles, location, hourly or weekly salary rate (and any change in salary rate or compensation
since December 31, 2020); and (ii) a true and complete list of all natural Persons who, as of the date of this Agreement, are
consultants or independent contractors to Seller.

To
the Knowledge of Seller, Seller is and, since the date of Seller’s organization, has been in compliance in all material
respects with all Laws relating to employment matters, including provisions thereof relating to wages, hours, equal opportunity,
collective bargaining, classification of employees, immigration, occupational health and safety, discrimination against race,
color, national origin, religious creed, physical or mental disability, sex, age, ancestry, medical condition, marital status
or sexual orientation, and the withholding and payment of social security and other Taxes.  No Actions are pending or, to
the Knowledge of Seller, threatened in any forum by or on behalf of any present employee of Seller alleging breach of any express
or implied Contract of employment, any Laws governing employment, or other unlawful, discriminatory, wrongful, tortuous conduct
in connection with the employment relationship.  Seller is not bound by or subject to (and none of their assets or properties
are bound by or subject to) any collective bargaining agreement. There has never been any strike, slowdown, work stoppage or lockout
involving Seller or the Business, and no such strike, slowdown, work stoppage, or lockout is pending, or to the Knowledge of Seller,
threatened.  

No
employee of Seller will become entitled to any bonus, retirement, severance or similar benefit or enhanced benefit, nor will the
vesting of, entitlement to, or receipt of any such benefit be accelerated, solely as a result of the Transactions.

3.12
Compliance with Laws.

To
the Knowledge of Seller, Seller is and at all times has been and the Business has been operated in compliance in all material
respects with all applicable Laws and Orders.  Seller has not nor, to the Knowledge of Seller, any officer, director, employee,
member, manager, partner or equity holder of Seller has received any notice and there are, to the Knowledge of Seller, no threatened
or alleged claims of violations, Liability or potential responsibility under any Law or Order to which any Seller is subject.
Seller has not conducted any internal investigation with respect to any actual, potential or alleged material violations of any
Law or Order by any of its directors, officers, members, managers, partners or employees.

    	 	8	 

     

    

Neither
Seller, nor to the Knowledge of Seller, any officer, director, employee, member, manager, partner or equity holder of Seller has,
directly or indirectly (i) offered or paid any illegal remuneration, in cash or in kind, to, or made any illegal financial arrangements
with, any current or former customers suppliers, contractors or third party payors of any Seller in order to obtain business or
payments from such Persons, (ii) made or agreed to make, or is aware that there has been made or that there is any agreement to
make, any contribution, payment or gift of funds or property to, or for the private use of, any governmental official, employee
or agent where either the contribution, payment or gift is or was illegal under state or federal Law.

Notwithstanding
anything to the contrary in this Agreement or any other Transaction Document, Seller and the Business make no representations
or warranties regarding compliance with the federal laws relating to controlled substances and aiding and abetting a criminal
offense.

Environmental
Matters. To Seller’s Knowledge, Seller is in compliance with all Environmental Laws and any other limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations, schedules and timetables contained in such Environmental Laws,
insofar as failure to comply with the same could result in any liability affecting, or other reduce the value of the Acquired
Assets. Seller has no Knowledge of any liabilities arising in connection with or in any way relating to the Acquired Assets of
any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise, arising under or relating to
any Environmental Law, and there are no facts, events, conditions, situations or set of circumstances which could reasonably be
expected to result in or be the basis for any such liability. Seller is not aware of any event, condition, circumstance, activity,
practice, incident, action or plan which will interfere with or prevent continued compliance with or which would give rise to
any liability under any Environmental Law or give rise to any common law or statutory liability, based on or resulting from Seller’s
or its agents’ manufacture, processing, distribution, use, treatment, storage, disposal, transport, or handling, or the
emission, discharge, or release into the environment, of any Hazardous Substance, that could result in any liability affecting,
or other reduce the value of, the Acquired Assets or Business. To Seller’s Knowledge, Seller has taken all actions necessary
under applicable requirements of Environmental Law to register any products or materials required to be registered by Seller (or
any of its agents) thereunder. To Seller’s Knowledge, there is no Proceeding, notice or demand letter pending or threatened
against Seller relating in any way to Environmental Laws, or notice or demand letter issued, entered, promulgated or approved
thereunder. To Seller’s Knowledge, no property now or previously owned, leased or operated by Seller, nor any property to
which Hazardous Substances located on or resulting from the use of any Asset or the Premises have been transported, is listed
or, proposed for listing on the National Priorities List promulgated pursuant to CERCLA, on CERCLIS (as defined in CERCLA) or
on any similar federal, state, local or foreign list of sites requiring investigation or cleanup.

3.13
Material Customers. There are no outstanding material disputes with any customers. The terms under which customers purchase
services from Seller are at market rates and are the result of arms-length Transactions.  Seller is in compliance with all
material conditions and compliance requirements contained in any agreement between Seller and any customer.  No customer
has notified Seller that it will stop, or materially decrease the rate of, buying services from the Business or otherwise materially
change the terms of its relationship with the Business after, or as a result of, the consummation of any of the Transactions.

3.14
Insurance.    Seller has been covered since January 1, 2020 by insurance in amount and scope customary
and reasonable for the business in which it has engaged during such period.

3.15
Permits.     Section 3.15(a) of the Seller Disclosure Schedule contains a true, correct
and complete list of all Permits issued to Seller, to the extent applicable to the Business, as of the Effective Date.  Seller
possess all material Permits and have made all notifications, registrations, certifications and filings with all Governmental
Authorities, necessary for the operation of the Business as presently conducted by Seller.  Seller is in compliance in all
material respects with all such Permits and all such Permits are in full force and effect.  Seller has not received written
notice from any Governmental Authority, which remains outstanding, regarding any proposed modification, non-renewal, suspension
or cancellation of any such Permits, and to the Knowledge of Seller, no event has occurred which could reasonably be expected
to result in the modification, non-renewal, suspension or cancellation
of any such Permits. There is no Action pending, or to the Knowledge of Seller, threatened by any Governmental Authority with
respect to (i) any alleged violation by Seller of any Law, policy or guideline of any Governmental Authority, (ii) any alleged
failure by Seller to have any Permit required in connection with the operation of the Business, or (iii) any revocation, cancellation,
rescission, modification, or refusal to renew in the ordinary course, any of the Permits.  No material Permit has ever been
revoked, cancelled, rescinded, modified or been subject to a refusal to renew.

    	 	9	 

     

    

3.16
Satisfaction of Financial Obligations.Seller has not, at any time, (i) made a general assignment for the benefit of
creditors, (ii) filed, or had filed against it, any bankruptcy or insolvency petition or similar filing, (iii) admitted in writing
its inability to pay its debts as they become due, (iv) been convicted of, or pleaded guilty or no contest to, any felony, or
(v) taken or been the subject of any action that could reasonably be expected to have an adverse effect on its ability to comply
with or perform any of its covenants or obligations under the Transaction Documents.

3.17
Brokers and Finders.     Seller has enlisted the services of a broker, MMJ Business Solutions
and Seller is liable to the broker. Buyer will not have, as a result of the transactions contemplated by this Agreement nor the
Seller’s broker, any valid right, interest or claim against or upon Buyer for any commission, fee or other compensation
pursuant to Seller’s agreement with MMJ Business Solutions or any other agreement, arrangement or understanding entered
into by or on behalf of Seller.

3.18
Other Representations and Warranties.     Since the date of the Financial Statements, and other
than in the ordinary course of business consistent with past practice, there has not been, with respect to the Business, any:
(a) event, occurrence or development that has had, or could reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect; (b) amendment of the charter, by-laws or other organizational documents of Seller; (c) material change
in any method of accounting or accounting practice of the Company, except as required by GAAP or as disclosed in the notes to
the Financial Statements; (d) material change in the Company’s cash management practices and its policies, practices and
procedures with respect to collection of accounts receivable, establishment of reserves for uncollectible accounts, accrual of
accounts receivable, inventory control, prepayment of expenses, payment of trade accounts payable, accrual of other expenses,
deferral of revenue and acceptance of customer deposits; (e) entry into any Contract that would constitute a Material Contract;
(f) incurrence, assumption or guarantee of any indebtedness for borrowed money except unsecured current obligations and Liabilities
incurred in the ordinary course of business consistent with past practice; (g) transfer, assignment, sale or other disposition
of any of the Acquired Assets shown or reflected in the Financial Statements or cancellation of any debts or entitlements; (h)
transfer or assignment of or grant of any license or sublicense under or with respect to any material Company Intellectual Property
or Company Intellectual Property Agreements except non-exclusive licenses or sublicenses granted in the ordinary course of business
consistent with past practice; (i) abandonment or lapse of or failure to maintain in full force and effect any material Company
IP Registration, or failure to take or maintain reasonable measures to protect the confidentiality or value of any material Trade
Secrets included in the Company Intellectual Property; (j) material damage, destruction or loss whether or not covered by insurance
to the Business or Acquired Assets; (k) any capital investment in, or any loan to, any other Person; (l) acceleration, termination,
material modification to or cancellation of any material Contract (including, but not limited to, any Material Contract) to which
Seller is a party or by which it is bound; (m) any material capital expenditures; (n) imposition of any Encumbrance upon any of
the Business or Acquired Assets, tangible or intangible; (o) grant of any bonuses, whether monetary or otherwise, or increase
in any wages, salary, severance, pension or other compensation or benefits in respect of its current or former employees, officers,
directors, independent contractors or consultants, other than as provided for in any written agreements or required by applicable
Law, (ii) change in the terms of employment for any employee or any termination of any employees for which the aggregate costs
and expenses exceed ten thousand dollars ($10,000), or (iii) action to accelerate the vesting or payment of any compensation or
benefit for any current or former employee, officer, director, independent contractor or consultant; (p) hiring or promoting any
person or employee except to fill a vacancy in the ordinary course of business; (q) adoption, modification or termination of any:
(i) employment, severance, retention or other agreement with any current or former employee, officer, director, independent contractor
or consultant, (ii) Benefit Plan or (iii) collective bargaining or other agreement with a Union, in each case whether written
or oral; (r) any loan to (or forgiveness of any loan to), or entry into any other transaction with, any
of its stockholders or current or former directors, officers and employees; (s) entry into a new line of Business or abandonment
or discontinuance of existing lines of Business; (t) adoption of any plan of merger, consolidation, reorganization, liquidation
or dissolution or filing of a petition in bankruptcy under any provisions of federal or state bankruptcy Law or consent to the
filing of any bankruptcy petition against it under any similar Law; (u) purchase, lease or other acquisition of the right to own,
use or lease any property or assets for an amount in excess of ten thousand dollars ($10,000); (v) acquisition by merger or consolidation
with, or by purchase of a substantial portion of the assets or stock of, or by any other manner, any business or any Person or
any division thereof; or, (w) action by Seller to make, change or rescind any Tax election, amend any Tax Return or take any position
on any Tax Return, take any action, omit to take any action or enter into any other transaction that would have the effect of
increasing the Tax liability or reducing any Tax asset of Buyer in respect of any Post-Closing Tax Period; or any Contract to
do any of the foregoing, or any action or omission that would result in any of the foregoing.

    	 	10	 

     

    

3.19
Fair Consideration; No Fraudulent Conveyance.      Seller is not entering into this Agreement
and the other agreements referenced in this Agreement with the intent to defraud, delay or hinder its creditors and the consummation
of the Transactions, and the other agreements referenced in this Agreement, will not have any such effect.  The Transactions
will not constitute a fraudulent conveyance, or otherwise give rise to any right of any creditor of Seller whatsoever to any of
the Acquired Assets after the Closing.

ARTICLE
4

REPRESENTATIONS AND WARRANTIES OF SELLER REGARDING PURCHASE OF SECURITIES

4.1
Purchase Entirely for Own Account.     Seller confirms that the shares of Buyer Common Stock
to be acquired by Seller or their respective designees will be acquired for investment for their own accounts, not as a nominee
or agent, and not with a view to the resale or distribution of any part thereof, and that Seller has no present intention of selling,
granting any participation in, or otherwise distributing the same (except for any distributions to Seller’s officers, directors,
managers, shareholders, members, or affiliates).  By executing this Agreement, Seller further represents that Seller does
not presently have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participations
to such person or to any third person, with respect to any of such shares of Buyer Common Stock.  Seller has not been formed
for the specific purpose of acquiring such shares of Buyer Common Stock.

4.2
Disclosure of Information.     Seller has had an opportunity to discuss Buyer’s business,
management, financial affairs and the terms and conditions of the offering of the shares of Buyer Common Stock to be acquired
by Seller with Buyer’s management and has had an opportunity to review Buyer’s facilities. Seller understands that
such discussions, as well as any written information delivered by Buyer to Seller, were intended to describe the aspects of Buyer’s
business which Buyer believes to be material. Seller reviewed American Cannabis Company, Inc.’s filings with the Securities
and Exchange Commission, including all of its audited financial statements, current reports and material quarterly and annual
disclosures. further acknowledges and agrees that its purchase of the restricted securities involves risks. Seller (i) either
alone or together with its representatives, has such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of this investment, and make an informed decision to so invest, and has so evaluated
the risks and merits of such investment; (ii) has the ability to bear the economic risks of this investment and can afford a complete
loss of such investment; (iii) understands the terms of, and the risks associated with the acquisition of the restricted shares,
including, without limitation, a lack of liquidity, price transparency or pricing availability and risks associated with the industry
in which Buyer operates; and, (iv) has had the opportunity to review such disclosures regarding its business, financial
condition and its prospects as Seller determined to be necessary in connection with the acquisition of the Buyer Common Stock.
Seller is an “accredited investor" as that term is defined in Regulation D promulgated under the 1933 Securities and
Exchange Act.

 

    	 	11	 

     

    

4.3
Restricted Securities.     Seller understands that the shares of Buyer Common Stock to be acquired
by Seller have not been registered under the Securities Act.  Seller understands that the shares of Buyer Common Stock are
being issued to Seller pursuant to Section 4(2) under the Securities Act or Regulation D promulgated under the Securities Act.
 Seller understands that such shares of Buyer Common Stock are “restricted securities” under applicable U.S.
federal and state securities laws and agrees to resell the shares of Buyer Common Stock only pursuant to registration under the
Securities Act, or pursuant to an available exemption from registration.  Seller agrees not to engage in hedging transactions
with regard to the shares of Buyer Common Stock unless in compliance with the Securities Act.  

4.4
Rule 144.     Seller is familiar with the provisions of Rule 144 promulgated under the Securities
Act, which, in substance, permits limited public resale of “restricted securities” acquired, directly or indirectly,
from the issuer of the securities (or from an affiliate of such issuer), in a non-public offering subject to the satisfaction
of certain conditions.  Seller understands that Buyer provides no assurances as to whether it will be able to resell any
or all of the shares of Buyer Common Stock pursuant to Rule 144, which rule requires, among other things, that Buyer be subject
to the reporting requirements of the Securities Exchange Act of 1934, as amended, that resales of securities take place only after
the holder of the shares has held the shares for certain specified time periods, and under certain circumstances, that resales
of securities be limited in volume and take place only pursuant to brokered transactions.  Notwithstanding this Section,
Seller acknowledges and agrees to the restrictions set forth in Section 4.5 below.

4.5
Resale Securities Restrictions.     Seller further understands that in the event all of the applicable
requirements of Rule 144 are not satisfied, registration under the Securities Act, compliance with Regulation A promulgated under
the Securities Act, or some other registration exemption will be required; and that, notwithstanding the fact that Rule 144 is
not exclusive, the staff of the Securities and Exchange Commission has expressed its opinion that Persons proposing to sell private
placement securities other than in a registered offering and otherwise than pursuant to Rule 144 will have a substantial burden
of proof in establishing that an exemption from registration is available for such offers or sales, and that such persons and
their respective brokers who participate in such transactions do so at their own risk.

4.6
No General Solicitation.     Seller acknowledges that neither Buyer, nor any of its officers,
employees, agents, directors, members or partners (a) has engaged the services of a broker, investment banker or finder to contact
any potential investor nor has Seller or any of Seller’s officers, employees, agents, directors, members or partners, agreed
to pay any commission, fee or other remuneration to any third party to solicit or contact any potential investor; (b) engaged
in any general solicitation; or (c) published any advertisement in connection with the offer and sale of the shares of Buyer Common
Stock being issued hereunder.

4.7
Reliance on Exemptions.     Seller understands that the Buyer Common Stock being offered and
issued to it in reliance on specific exemptions from the registration requirements of United States federal and state securities
laws and that Buyer is relying in part upon the truth and accuracy of, and Seller’s compliance with, the representations,
warranties, agreements, acknowledgements and understandings of Seller set forth in this Article 4 in order to determine the availability
of such exemptions and the eligibility of Seller to acquire the Buyer Common Stock.

ARTICLE
5

REPRESENTATIONS AND WARRANTIES OF BUYER

As
a material inducement to Seller to enter into and perform its obligations under this Agreement, as of the Closing Date, Buyer
represent and warrant to Seller as follows:

5.1
Organization, Corporate Power and Authority.     Hollister & Blacksmith, Inc., dba
American Cannabis Company, a Colorado corporation, and a wholly owned subsidiary of American Cannabis Company, Inc. are
corporations duly organized, validly existing and in good standing under the laws of the states of Colorado and Delaware, and
are duly qualified to do business as a foreign corporation in the jurisdictions in which Buyer conducts business, except
where the failure to so qualify will not have a material adverse effect on Buyer’s ability to perform its obligations
under the Transaction Documents
to which it is a party.  Buyer has all requisite corporate power and authority to execute and deliver the Transaction Documents
to which it is a party and to perform its obligations thereunder.

    	 	12	 

     

    

5.2
Authorization of Agreement.     The execution, delivery and performance by Buyer of the Transaction
Documents to which it is a party, and the consummation by it of the Transactions, have been duly authorized by all necessary corporate
action by Buyer.  This Agreement has been, and each other Transaction Document to which Buyer is a party will be at the Closing,
duly executed and delivered by Buyer and constitute, or will, when delivered, constitute, the legal, valid and binding obligations
of Buyer, enforceable against Buyer, as the case may be, in accordance with their respective terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar Laws and equitable principles relating to or limiting creditors’
rights generally.

5.3
Effect of Agreement.     The execution, delivery and performance by Buyer of the Transaction
Documents to which it is a party, and the consummation by it of the Transactions, will not violate the charter documents or bylaws
of Buyer or any Law to which Buyer is subject, or any judgment, award or decree or any material indenture, material agreement
or other material instrument to which Buyer is a party, or by which Buyer or its properties or assets are bound, or conflict with,
result in a breach of or constitute (with due notice or lapse of time or both) a default under, any such indenture, agreement
or other instrument, or result in the creation or imposition of any Lien of any nature whatsoever upon any of the properties or
assets of Buyer, except to the extent the effect thereof will not be materially adverse to Buyer’s ability to fulfill its
obligations under the Transaction Documents to which it is a party.

 

5.4
Approvals.     No Approval or Order or Action of, or filing with, any Governmental Entity or
other Person is required to be obtained by Buyer for the execution and delivery by Buyer of the Transaction Documents to which
it is a party or the consummation by Buyer of the Transactions other than such filings that may be required under applicable Securities
Law and Colorado law and the Licensing Authorities.

5.5
Legal Proceedings.     There is no Order or Action pending, or, to the knowledge of Buyer, threatened,
against or affecting Buyer in connection with Buyer’s performance of the Transactions.  There is no matter as to which
Buyer or, to the knowledge of Buyer, any Affiliate of Buyer has received any notice, claim or assertion, or, to the knowledge
of Buyer, which otherwise has been threatened against or affecting Buyer in connection with Buyer’s performance of the Transactions.

5.6
Capitalization.     The authorized capital stock of Buyer consists of 500,000,000 shares of common
stock, par value $0.00001 and 5,000,000 of preferred stock, $0.01 par value.  As of the Effective Date, 74,377,938 shares
of common stock of Buyer were issued or outstanding (“Issued Shares”) and no shares of preferred stock of buyer
were issued and outstanding.  All of the Issued Shares have been duly authorized, are validly issued, fully paid and are
non-assessable.  All of the Issued Shares were issued in compliance with applicable laws and none of the shares were issued
in violation of any agreement, arrangement or commitment to which Buyer is a party or is subject to or in violation of any preemptive
or similar rights of any Person.  Except as set forth on Schedule 5.6, there are no outstanding or authorized options,
warrants, convertible securities or other rights, agreements, arrangements or commitments of any character relating to the securities
of Buyer or obligating Buyer to issue or sell any shares of Buyer, or any interest in Buyer.  Buyer does not have outstanding
or authorized any stock appreciation, phantom stock, profit participation, or similar rights.  There are no voting trusts,
shareholder agreements, proxies or other agreements or understandings in effect with respect to the voting or transfer of any
of the shares of Buyer.

5.7
Due Issuance.     The shares of Buyer Common Stock to be acquired by Seller hereunder, when issued,
sold and delivered in accordance with the terms hereof for the consideration expressed herein, will be duly and validly issued,
fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under this Agreement, applicable
state and U.S. federal securities Laws and liens or encumbrances created by or imposed by Buyer or any distributee of Buyer.  The
shares of Buyer Common Stock to be acquired by Seller hereunder are not subject to any preemptive rights or rights of first refusal.

    	 	13	 

     

    

5.8
Brokers and Finders.     No person will have, as a result of the transactions contemplated by
this Agreement, any valid right, interest or claim against or upon Seller or Buyer for any commission, fee or other compensation
pursuant to any agreement, arrangement or understanding entered into by or on behalf of Buyer.

5.9
Independent Investigation.     Buyer has conducted its own independent investigation, review
and analysis of the Business, Acquired Assets, and Assumed Liabilities, and acknowledges that it has been provided adequate access
to the personnel, properties, assets, premises, books and records, and other documents and data of Seller for such purpose.  Buyer
acknowledges and agrees that: (a) in making its decision to enter into this Agreement and to consummate the Transactions, Buyer
has relied solely upon its own investigation and the express representations and warranties of Seller in Article 3; and
(b) neither Seller nor any other Person has made any representation or warranty as to the Business, the Acquired Assets, the Assumed
Liabilities, or this Agreement, except as expressly set forth in Article 3 of this Agreement.

ARTICLE
6

ADDITIONAL COVENANTS

6.1
Confidentiality. All non-public information disclosed by any party to any other party, whether before or after the date
hereof, in connection with the Transactions, or the discussions and negotiations preceding this Agreement shall be kept confidential
by the receiving party and shall not be used by any receiving party other than as contemplated by this Agreement, except to the
extent that such information shall have become public knowledge other than through a breach of this Agreement by receiving party
seeking to disclose the information, may otherwise be required by Law, or to the extent such duty as to confidentiality is waived
in writing by the disclosing party.

 

Seller,
shall not, and Seller shall use all reasonable efforts to cause its representatives and Affiliates to not, at any time after the
Closing, make use of, divulge or otherwise disclose, directly or indirectly, any trade secret, other proprietary data (including,
but not limited to, any customer list, record or financial information), or other confidential information, concerning the
Acquired Assets, except to the extent that such information may otherwise be required by Law or to the extent such duty as to
confidentiality is waived in writing by Buyer.  

The
obligations under this Section 6.1 shall not expire.

6.2
Financial Statement Cooperation.     After the Closing, Seller and Buyer shall provide, or cause
to be provided to each other, any records and other information in their respective possession (or reasonably available to them) as
may be reasonably requested by the other party in connection with the preparation of any financial statements determined to be
necessary to meet financial reporting obligations in connection with the consummation of the Transactions.

6.3
Tax Cooperation.     After the Closing, Seller and Buyer shall provide, or cause to be provided
to each other, any applicable records and other information in their respective possession (or reasonably available to them) requested
by such parties in connection with the preparation of any Tax Returns or in connection with any Tax investigation, audit or other
proceeding.  Any information obtained pursuant to this Section 6.3, or pursuant to any other Section hereof
providing for the sharing of confidential information, shall be subject to Section 6.1.

6.4
All Reasonable Efforts.     Subject to the terms and conditions herein provided, each of Seller
and Buyer shall use all commercially reasonable efforts to take, or cause to be taken, all action, and to do, or cause to be done,
all things necessary, proper and advisable under applicable Laws and regulations to consummate and make effective as promptly
as practicable the sale of the Acquired Assets to Buyer.  If at any time after the Closing any further action is necessary
to carry out the purposes of the Transaction Documents, including, without limitation, the execution of additional documents or
instruments, the parties to the Transaction Documents shall take all such necessary action.

6.5
Post-Closing Cooperation Relating to Acquired Assets.     For a period of 12 months following
the Closing Date, if reasonably requested by Buyer and reasonably performable by Seller, (a) Seller shall exercise commercially
reasonable efforts to cooperate with Buyer in enforcing the terms of any agreements
between Seller and any third party involving the activities associated with the Acquired Assets (at the cost and expense of Buyer,
if any); and (b) Seller shall cooperate fully with Buyer and make commercially reasonable efforts to provide access to any records
or personnel of Seller (that are then reasonably available to Seller) to the extent Buyer finds such access necessary in order
to transition the Acquired Assets into service of Buyer.

    	 	14	 

     

    

6.6
Subsequent Distribution of Stock.     Prior to the trading of the Buyer Common Stock pursuant
to Rule 144, in the event of a distribution of the shares of Buyer Common Stock by Seller upon a dissolution of Seller to its
members or consultants after the Closing Date or in satisfaction of existing obligations of Seller to creditors, Seller (and any
subsequent holders) shall obtain an investment representation statement respectively signed by the Person(s) to whom
such stock is distributed that states that such Person(s): (a) are acquiring the shares of Buyer Common Stock for their own
account and not directly or indirectly for the account of any other Person; (b) are acquiring the shares of Buyer Common
Stock for investment and not with a view to distribution or resale thereof except in compliance with the Securities Act and any
applicable state Law regulating securities; and (c) realize that they bear the economic risk of the investment for an indefinite
period of time because such shares of Buyer Common Stock have not been registered under the Securities Act and therefore cannot
and will not be sold unless they are subsequently registered or qualified under such Securities Act, or otherwise can be traded
pursuant to Rule 144.  Additionally, no fractional shares of Buyer Common Stock shall be issued upon any distribution, and
no certificates for any fractional shares shall be issued.  The obligations under this Section 6.6 shall not
expire.

6.7
Blue Sky Laws.     Buyer shall take such steps as may be necessary to comply with the securities
and blue sky laws of all jurisdictions which are applicable to the issuance of the Buyer Common Stock in connection with this
Agreement. Seller shall, at Buyer’s sole cost and expense, take such steps as may be necessary to assist Buyer as may be
necessary to comply with the securities and blue sky laws of all jurisdictions which are applicable in connection with the issuance
of Buyer Common Stock in connection with this Agreement.

6.8
Stop-Transfer Notice.     Each holder of Buyer Common Stock issued in this Agreement (“Holder”)
agrees that, in order to ensure compliance with the restrictions, terms and conditions referred to herein, Buyer may issue appropriate
“stop transfer” instructions to its transfer agent.

6.9
Restrictions on Transfer.     Unless the Buyer Common Stock becomes registered, or is traded
pursuant to Rule 144, Seller agrees not to sell, make any short sale of, loan, grant any option for the purchase of, or otherwise
transfer or assign its shares of Buyer Common Stock (a) except pursuant to a registration statement under the Securities Act and
applicable state securities Laws or a valid exemption thereunder, and in the case of such an exemption, shall agree to deliver
an opinion of counsel reasonably acceptable to Buyer that such registration is not required, and (b) without the prior written
consent of Buyer (except for any transfers to Seller’s Affiliates).  Any holder of shares of Buyer Common Stock, including
any distributee, desiring to transfer such stock or any interest in such stock shall give a written notice to Buyer describing
the proposed transfer, including the number of shares of stock proposed to be transferred, the price and terms at which such stock
is proposed to be transferred and the name and address of the proposed transferee.  The written consent of Buyer shall not
be unreasonably withheld, provided that the shares of Buyer Common Stock may not be transferred to a Person reasonably deemed
to be a competitor of Buyer or Buyer, and any distributee of such shares shall be required to assent to the terms of Sections
6.6 through 6.9.  The obligations under this Section 6.9 shall not expire. Notwithstanding anything to the
contrary in this Agreement, Seller may pledge as collateral its shares of Buyer Common Stock to any lender.

6.10
Legend.     Seller understands and acknowledges that the shares of Buyer Common Stock are not
registered under the Act, and that under the Securities Act and other applicable Laws Seller may be required to hold such common
stock or options for an indefinite period of time.  Each stock certificate representing shares of Buyer Common Stock shall
bear the following legends:

“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE RESTRICTIONS ON TRANSFER CONTAINED IN AN ASSET PURCHASE AGREEMENT
DATED MARCH 11, 2021, A COPY OF WHICH IS ON FILE AT THE REGISTERED OFFICE OF THE ISSUER. THESE RESTRICTIONS ARE BINDING ON TRANSFEREES
OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE.

    	 	15	 

     

    

THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933.  SUCH SHARES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION WITHOUT AN EXEMPTION
UNDER THE SECURITIES ACT AND AN OPINION OF LEGAL COUNSEL REASONABLY ACCEPTABLE TO THE ISSUER THAT SUCH REGISTRATION IS NOT REQUIRED.”

Any
legend required by the “Blue Sky” laws of any state to the extent such laws are applicable to the Shares represented
by the certificate so legended.

Seller
acknowledges and agrees that, in order to ensure compliance with the restrictions referred to herein, Buyer may issue appropriate
“stop transfer” instructions to its transfer agent.  The obligations under this Section 6.10 shall
not expire.

6.11
Non-competition and Non Solicitation.

Subject
to the exceptions and limitations set forth in Section 6.11(c), Seller covenants and agrees that, commencing on the Closing
Date and ending on the third (3rd) anniversary of the Closing Date (the “Noncompetition Period”), it shall
not, without the prior written consent of Buyer, directly or indirectly, in any capacity (including as an officer, director, manager,
member, stockholder, partner, employee, consultant, contractor,  investor or lender), engage in or have any direct or indirect
ownership interest in, any Competing Business located, operating or engaged in business in the State of Colorado.  

“Competing
Business” means operating a MED licensed Medical Cannabis Center business or operate under a Medical Marijuana Optional
Premises Cultivation license, and a Medical Marijuana Infused Product Manufacturer license businesses in the State of Colorado.

Nothing
in this Section 6.11 shall preclude Seller from investing in any publicly held company provided the aggregate beneficial
ownership or rights to ownership of any class of such company’s securities by such Persons does not exceed five percent
(5%) of the outstanding securities of such class.

Seller
covenants and agrees that during the Noncompetition Period, it shall not employ, retain, engage or solicit the employment or engagement
of services of any employee of Buyer, Buyer, the Business or any of their Affiliates on a full- or part-time basis in a Competing
Business.

Seller
acknowledges that any violation of this Section 6.11 may result in irreparable injury to Buyer and the Business and agrees
that Buyer shall be entitled to seek an injunction against Seller from any court having jurisdiction over the matter, restraining
any further violation of this Section 6.11, which rights shall be cumulative and in addition to any other rights or remedies
to which Buyer may be entitled.  Seller acknowledges that it has carefully read this Agreement and has given careful consideration
to the restraints imposed upon such Seller by this Section 6.11, and is in full accord as to their necessity for the reasonable
and proper protection of confidential information and other legitimate business interests relating to the Business now existing
and to be developed in the future.  Seller expressly acknowledges and agrees that each and every restraint imposed by this
Section 6.11 is reasonable with respect to subject matter, time period and geographical area.

In
the event that any covenant contained in this Section 6.11 should ever be adjudicated to exceed the time, geographic, product
or service or other limitations permitted by applicable Law in any jurisdiction, then any court is expressly empowered to reform
such covenant, and such covenant shall be deemed reformed, in such jurisdiction to the maximum time, geographic, product or service
or other limitations permitted by applicable Law.  The covenants contained in this Section 6.11 and each provision
thereof are severable and distinct covenants and provisions.  The invalidity or unenforceability of any such covenant or
provision as written shall not invalidate or render unenforceable the remaining covenants or provisions hereof, and any such invalidity
or unenforceability in any jurisdiction shall not invalidate or render unenforceable such covenant or provision in any other jurisdiction.

    	 	16	 

     

    

ARTICLE
7

INDEMNIFICATION; SURVIVAL

7.1
Indemnification by Seller.     Subject to the terms and conditions of this ARTICLE 7,
following the Closing, Seller shall indemnify, defend and hold harmless Buyer and each of its Affiliates, and their respective
stockholders, members, successors, assigns, managers, and representatives and each of their respective successors and assigns
(collectively, the “Buyer Indemnified Parties”), and hold them harmless from, any Loss suffered or incurred
by any such Buyer Indemnified Party, whether such Loss exists or accrues prior to, or subsequent to or on the Closing Date, to
the extent such Loss arose or resulted from:

		·	any
                                         inaccuracy or breach as of the date hereof or as of the Closing Date of any representation
                                         or warranty of Seller contained in this Agreement or any other Transaction Document;

		·	the
                                         nonfulfillment, nonperformance or other breach of any agreement, covenant, obligation
                                         or undertaking of Seller contained in this or any other Transaction Document;

		·	any
                                         Excluded Asset or Excluded Liability;

		·	any
                                         Tax imposed on the Seller as a result of the Transactions; and

		·	the
                                         operation of the Business prior to the Closing Date.

For
purposes of determining whether there has been a breach and the amount of any losses that are the subject matter of a claim for
indemnification, each representation and warranty in this Agreement will be read without regard and without giving effect to the
term “material” or “material adverse effect” (fully as if any such word or phrase were deleted from such
representation and warranty).

7.2
Indemnification by Buyer.     Subject to the terms and conditions of this ARTICLE 7, following
the Closing, Buyer shall indemnify the Seller and its respective officers, directors, shareholders, assigns, agents and Representatives
and each of their respective successors and assigns, heirs and beneficiaries (collectively, the “Seller Indemnified Parties”)
against, and hold them harmless from, any Loss suffered or incurred by any such Seller Indemnified Party, whether such Loss exists
or accrues prior or subsequent to the Closing Date, arising or resulting from or based upon:

		·	any
                                         inaccuracy or breach of any representation or warranty of Buyer contained in this Agreement
                                         or any other Transaction Document;

		·	the
                                         nonfulfillment, nonperformance or other breach of any agreement, covenant, obligation
                                         or undertaking of Buyer or Buyer contained in this or any other Transaction Document;
                                         and

		·	the
                                         operation of the Business by Buyer or Buyer after the Closing Date.

For
purposes of determining whether there has been a breach and the amount of any losses that are the subject matter of a claim for
indemnification, each representation and warranty in this Agreement will be read without regard and without giving effect to the
term “material” or “material adverse effect” (fully as if any such word or phrase were deleted from such
representation and warranty).

7.3
Termination of Indemnification.     The obligations to indemnify and hold harmless an Indemnified
Party (i) pursuant to Section 7.1 and Section 7.2 shall terminate when the applicable representation or warranty
terminates pursuant to Section 7.6; provided, however, that such obligations to indemnify and hold harmless shall not terminate
with respect to any specific matter as to which the Person to be indemnified shall have, before the expiration of the applicable
period, previously made a claim by delivering a written notice thereof (stating in reasonable detail the basis of such claim)
(a “Claim Notice”) to the Indemnifying Person.

7.4
Procedures Relating to Indemnification for Third-Party Claims.

In
order for an Indemnified Person to be entitled to any indemnification provided for under this ARTICLE 7 in respect of,
arising out of or involving a claim or demand made by any third-party against the Indemnified Person (a “Third-Party
Claim”), such Indemnified Person must provide the Indemnifying
Person with a Claim Notice regarding the Third-Party Claim promptly and in any event within thirty (30) days after receipt by
such Indemnified Person of written notice of the Third-Party Claim; provided, however, that failure to give such notification
shall not affect the indemnification provided hereunder except, and solely to the extent that, the Indemnifying Person shall have
been actually and materially prejudiced as a result of such failure; provided, further that only Seller, or Seller’s successors
or assigns, may make claims on behalf of Seller.

    	 	17	 

     

    

If
a Third-Party Claim is made against an Indemnified Person, the Indemnifying Person will be entitled to participate in the defense
thereof and, if it so chooses, to assume the defense thereof with counsel selected by the Indemnifying Person; provided, however,
that any such assumption of the defense by the Indemnifying Person shall constitute an acknowledgement and acceptance by the Indemnifying
Person of its obligation to indemnify the Indemnified Person for all Losses arising out of such Third-Party Claim.  If the
Third-Party Claim includes allegations for which the Indemnifying Person both would and would not be obligated to indemnify the
Indemnified Person, the Indemnifying Person and the Indemnified Person shall in that case jointly assume the defense thereof.
 If in the reasonable good faith opinion of any Indemnified Person a conflict of interest exists in respect of such claim
(including that the Indemnified Person has defenses available to it that may conflict with those of the Indemnifying Person),
such Indemnified Person shall have the right to employ separate counsel to represent such Indemnified Person and in that event
the legal fees and expenses subsequently incurred by the Indemnified Person in connection with the defense thereof shall be paid
by the Indemnifying Person.  If the Indemnifying Person assumes such defense, the Indemnified Person shall have the right
to participate in the defense thereof and, at its own expense, to employ counsel reasonably acceptable to the Indemnifying Person,
separate from the counsel employed by the Indemnifying Person, it being understood that the Indemnifying Person shall control
such defense.  The Indemnifying Person shall be liable for the fees and expenses of counsel employed by the Indemnified Person
for any period during which the Indemnifying Person has not assumed the defense thereof.  The Indemnified Person shall cooperate
with the Indemnifying Person in the defense or settlement thereof, and the Indemnifying Person shall reimburse the Indemnified
Person for all its reasonable out-of-pocket expenses in connection therewith.  The Indemnifying Person shall not, in the
defense of a third party claim, make any payment of any of such claims, consent to the entry of any judgment or enter into any
settlement with respect to any third party claim without the prior written consent of the Indemnified Person (which consent shall
not be unreasonably withheld or delayed) unless the judgment or proposed settlement (i) involves only the payment of money damages
and does not involve any finding or admission of any violation of Law, (ii) includes, as an unconditional term thereof, a release
of such Indemnified Person given by the claimant or the plaintiff from any liabilities arising from such Third Party Claim, and
(iii) does not impose an injunction or other equitable relief, directly or indirectly, upon such Indemnified Person or result
in an admission of any wrongdoing by the Indemnified Person.  If the Indemnifying Person fails to vigorously defend the Third
Party Claim, then the Indemnified Person will have the right to defend, at the sole cost and expense of the Indemnifying Person,
the Third Party Claim by all appropriate proceedings, which proceedings will be prosecuted by the Indemnified Person (with the
consent of the Indemnifying Person, which consent will not be unreasonable withheld conditioned or delayed), but only to the extent
that the Indemnified Person is entitled to indemnification pursuant to this ARTICLE 7.  

7.5
Procedures Relating to Indemnification for Non-Third-Party Claims.     In order for an Indemnified
Person to be entitled to any indemnification provided for under this Agreement in respect of, arising out of or involving a claim
or demand that is not a Third-Party Claim, such Indemnified Person must provide the Indemnifying Person with a Claim Notice; provided,
however, that failure to give such notification shall not affect the indemnification provided hereunder except, and solely to
the extent that, the Indemnifying Person shall have been actually and materially prejudiced as a result of such failure provided,
further that only Seller, or Seller’s successors or assigns, may make claims on behalf of Seller or Seller’s parties.
 The Claim Notice shall set forth the amount, if known, or, if not known, an estimate of the foreseeable maximum amount of
claimed Losses (which estimate shall not be conclusive of the final amount of such Losses) and a description of the basis for
such claim.  The Indemnifying Person will have thirty (30) days from receipt of such Claim Notice to dispute the claim and
will reasonably cooperate and assist the Indemnified Person in determining the validity of the claim for indemnification.  If
the Indemnifying Person does not give notice to the Indemnified
Person that it disputes such claim (which such dispute notice shall set forth in reasonable detail the reasons for such dispute)
within thirty (30) days after its receipt of the Claim Notice, the claim specified in such Claim Notice shall be conclusively
deemed a Loss subject to indemnification hereunder.

    	 	18	 

     

    

7.6
Survival of Representations, Warranties, Covenants and Agreements.     The representations and
warranties of Seller contained in this Agreement and the other Transaction Documents shall survive the Closing and remain in full
force (a) indefinitely, with respect to Section 3.1 (Organization, Power, Standing), Section 3.2 (Authorization
and Approval of Agreements), and Section 3.7 (Leased Real Property; Tangible Property; Title to Acquired Assets), (b) for
a period of sixty (60) days following the expiration of the applicable statute of limitations (including extensions), with respect
to matters covered by Section 3.9 (Tax Matters), and (c) for a period of twenty-four (24) months following the Closing
Date with respect to all other representations, warranties and covenants, except that any representation or warranty that would
otherwise terminate in accordance with clause (i), (ii), or (iii) will continue to survive if a written notice of a breach thereof
shall have been timely given to the breaching party by the other party on or prior to such termination date, until the related
claim for indemnification is satisfied or otherwise resolved as provided in this ARTICLE 7.  The representations and
warranties of Buyer or Buyer contained in this Agreement and the other Transaction Documents shall survive the Closing and remain
in full force (x) indefinitely, with respect to Section 5.1 (Organization, Corporate Power, Authority), Section 5.2
(Authorization of Agreement), and (y) for a period of period of twenty-four (24) months following the Closing Date with respect
to all other representations, warranties and covenants, except that any representation or warranty that would otherwise terminate
in accordance with clause (x) and (y) will continue to survive if a written notice of a breach thereof shall have been timely
given to the breaching party by the other party on or prior to such termination date, until the related claim for indemnification
is satisfied or otherwise resolved as provided in this ARTICLE 7.

7.7
Sole Remedy.     Provided that Closing has occurred, except with respect to claims related to
fraud or willful misconduct, claims made pursuant to this ARTICLE 7 shall constitute the sole remedy for Losses under the
terms of this Agreement and in connection with the Transactions.

7.8
Right to Indemnification.     The rights of Buyer to indemnification or any other remedy under
this Agreement shall not be impacted or limited by any knowledge that Buyer may have acquired, or could have acquired, whether
before or after the Closing Date, nor by any investigation or diligence by Buyer.  The Seller hereby acknowledges that, regardless
of any investigation made (or not made) by or on behalf of Buyer, and regardless of the results of any such investigation, Buyer
has entered into the Transactions in express reliance upon the representations and warranties of the Seller Parties made in this
Agreement.

7.9
Characterization of Indemnification Payments.     The parties shall treat any indemnification
payment made pursuant to this Article 7 as an adjustment to the purchase price unless the Indemnified Person provides an
opinion of a nationally recognized tax counsel that any such amount will not constitute an adjustment to the purchase price for
federal income tax purposes.

ARTICLE
8

GENERAL

8.1
Amendments; Waivers.     This Agreement and any Exhibit and Schedule attached hereto may be amended
only by agreement in writing of all parties.  No waiver of any provision nor consent to any exception to the terms of this
Agreement shall be effective unless in writing and signed by the party to be bound and then only to the specific purpose, extent
and instance so provided.

8.2
Exhibits; Integration.     Each Exhibit and Schedule delivered pursuant to the terms of this
Agreement shall be in writing and shall constitute a part of this Agreement.  This Agreement, together with such Exhibits
and Schedules, constitutes the entire agreement among the parties pertaining to the subject matter hereof and supersedes all prior
agreements and understandings of the parties in connection therewith.

8.3
Governing Law; Submission to Jurisdiction.     This Agreement shall be governed by, and construed
in accordance with, the internal Laws of the State of Colorado without regard to the choice of Law
principles thereof.  Each of the parties hereto irrevocably submits to the exclusive jurisdiction of the courts of the State
of Colorado located in Denver and the United States District Court for Denver Colorado for the purpose of any suit, action, proceeding
or judgment relating to or arising out of this Agreement and the Transactions.  Service of process in connection with any
such suit, action or proceeding may be served on each party hereto anywhere in the world by the same methods as are specified
for the giving of notices under this Agreement.  Each of the parties hereto irrevocably consents to the jurisdiction of any
such court in any such suit, action or proceeding and to the laying of venue in such court.  Each party hereto irrevocably
waives any objection to the laying of venue of any such suit, action or proceeding brought in such courts and irrevocably waives
any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum

    	 	19	 

     

    

8.4
No Assignment.     Neither this Agreement nor any rights or obligations hereunder are assignable
without the prior written consent of the other parties.

8.5
Headings.     The descriptive headings of the Articles, Sections and subsections of this Agreement
are for convenience only and do not constitute a part of this Agreement.

8.6
Counterparts.     This Agreement and any amendment hereto or any other agreement (or document) delivered
pursuant hereto may be executed in one or more counterparts and by different parties in separate counterparts.  All of such
counterparts shall constitute one and the same agreement (or other document) and shall become effective (unless otherwise
provided therein) when one or more counterparts have been signed by each party and delivered to the other party.  A
signed copy of this Agreement or any other Transaction Documents delivered by facsimile or by other means of electronic transmission
is deemed to have the same legal effect as delivery of an original signed copy.

8.7
Publicity and Reports.     No party shall issue a press release, public statement or other public
notice relating to this Agreement, or the Transactions, without obtaining the prior consent of the other party.  

8.8
Remedies Cumulative. All rights and remedies existing under this Agreement are cumulative to, and not exclusive of, any
rights or remedies otherwise available.  In addition, Article 9 shall not be deemed to preclude or otherwise limit
in any way the exercise of any other rights or pursuit of other remedies for the breach of this Agreement or with respect to any
misrepresentation.

8.9
Parties in Interest.     This Agreement shall be binding upon and inure to the benefit of each
party, and nothing in this Agreement, express or implied, is intended to confer upon any other Person any rights or remedies of
any nature whatsoever under or by reason of this Agreement.  Nothing in this Agreement is intended to relieve or discharge
the obligation of any third Person to any party to this Agreement.

8.10
Notices.     All notices and other communications required or permitted under this Agreement
or any other Transaction Documents shall be in writing and shall be either hand delivered in person, sent by facsimile, sent by
certified or registered first-class mail, postage prepaid, or sent by nationally recognized express courier service.  Such
notices and other communications shall be effective upon receipt if hand delivered or sent by facsimile, three Business Days after
mailing if sent by mail, and one Business Day after dispatch if sent by express courier, to the following addresses, or such other
addresses as any party may notify the other parties in accordance with this Section 8.10:

If
to Buyer, addressed to:

Hollister
& Blacksmith, Inc., dba

AMERICAN CANNABIS
COMPANY,

A Wholly-Owned
Subsidiary of

AMERICAN CANNABIS
COMPANY, INC.

2590 Walnut
Street #6

Denver, CO
80205

Corporate
Phone:  (303) 974-4700

Attention:
 Terry Buffalo

Email: buffalo@americancannabisconsulting.com

 

    	 	20	 

     

    

with a copy
(which shall not constitute notice) to:

 

MAILANDER LAW OFFICE, INC.

4811 49th Street

San Diego, CA 92115

Phone: (619) 239-9034

Fax:  (619) 537-7193

Attention:  Tad Mailander

Email: tad@mailanderlaw.net

 

If
to Seller, addressed to:

Scott Saunders

MEDIHEMP,
LLC, SLAM ENTERPRISES, LLC, MEDICAL CANNABIS CAREGIVERS, INC.

1221 Hermosa
Way

Colorado Springs,
CO 80905

Phone: 719-660-4532

Email: rssriparian@gmail.com

 

with a copy
(which shall not constitute notice) to:

 

Law Offices
of Clifton Black PC

c/o Clifton
Black

2 N. Cascade,
11th Floor

Colorado Springs,
CO 80903

Email: Cliff@Cliftonblacklaw.com

 

or to such other address
or to such other Person as either party shall have last designated by such notice to the other party.  

8.11
Expenses and Attorneys’ Fees.     Each party shall be responsible for its own expenses
and attorneys’ fees incurred in negotiating, executing, preparing and delivering the Transaction Documents, including but
not limited to all legal, accounting, broker, finder and financial advisor fees.

8.12
Specific Performance.     Each party acknowledges that, in view of the uniqueness of the Acquired
Assets and the Transactions, each party would not have an adequate remedy at Law for money damages in the event that this Agreement
has not been performed in accordance with its terms, and therefore agrees that the other party shall be entitled to specific enforcement
of the terms hereof in addition to any other remedy to which it may be entitled, at Law or in equity.

ARTICLE
9

DEFINITIONS

9.1
Definitions.     For all purposes of this Agreement, except as otherwise expressly provided:

		·	the
                                         terms defined in this Article 9 have the meanings assigned to them in this Article
                                         9 and include the plural as well as the singular;

		·	all
                                         accounting terms not otherwise defined herein have the meanings assigned under GAAP;

		·	all
                                         references in this Agreement to designated “Articles,” “Sections”
                                         and other subdivisions are to the designated Articles, Sections and other subdivisions
                                         of the body of this Agreement;

		·	unless
                                         the context clearly requires otherwise, the use of the terms “including,”
                                         “included,” “such as,” or terms of similar meaning, shall not
                                         be construed to imply the exclusion of any other particular elements and shall be deemed
                                         to be followed by the words “without limitation.”

		·	pronouns
                                         of either gender or neuter shall include, as appropriate, the other pronoun forms; and

    	 	21	 

     

    

		·	the
                                         words “herein,” “hereof” and “hereunder” and other
                                         words of similar import refer to this Agreement as a whole and not to any particular
                                         Article, Section or other subdivision.

As
used in this Agreement and the Exhibits delivered pursuant to this Agreement, the following definitions shall apply.

 “Action”
means any action, complaint, petition, investigation, suit or other proceeding, whether civil or criminal, in law or in equity,
or before any arbitrator or Governmental Entity.

“Affiliate”
means a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common
control with, a specified Person.  The term “control” (including, with correlative meaning, the terms “controlled
by” and “under common control with”), as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership
of voting securities, by contract or otherwise.

“Approval”
means any approval, authorization, consent, qualification or registration, or any waiver of any of the foregoing, required to
be obtained from, or any notice, statement or other communication required to be filed with or delivered to, any Governmental
Entity or any other Person.

“Assumed
Contracts” has the meaning set forth in Section 1.1(a).

“Assumed
Customer Accounts” has the meaning set forth in Section 1.1(b).

“Business”
has the meaning set forth in the Recitals.

 “Business
Day” means a day other than Saturday, Sunday or any day on which banks located in the States of Colorado are authorized
or obligated to close.

“Business
Intellectual Property” means all Intellectual Property that is used in the operation of the Business.

“Closing”
has the meaning set forth in Section 2.1.

“Closing
Date” has the meaning set forth in Section 2.1.

“Contract”
means all contracts, agreements, licenses (including implied licenses), sales order, purchase order, commitments, leases, liens,
debt instruments, indentures, settlements, obligations, liabilities, partnerships, arrangements and understandings, in any case
whether written or oral, which constitute contracts under applicable Laws.

“Customer
Accounts” means the Customer Accounts listed on Schedule 1.1(b) to this Agreement.

“Employee
Benefit Arrangements” means, whether written or oral, each and all pension, supplemental pension, deferred compensation,
incentive award or benefit, option or other equity-based program, accidental death and dismemberment, insurance coverage (including
self-insured arrangements) life and health benefits (including medical, dental, vision and hospitalization), short- and long-term
disability, fringe benefit, cafeteria plan, flexible spending account programs, employment, severance and other employee benefit
arrangements, plans, contracts, policies or practices maintained by Seller or Stockholder (as applicable to the Business) that
provides or provided employee or executive compensation or benefits to or for any employees or former employees of Seller or Stockholder
(as applicable to the Business), other than the Employee Plans.

“Employee
Plans” means each and all “employee benefit plans,” as defined in Section 3(3) of ERISA, maintained or contributed
to by Seller (as applicable to the Business) or in which Seller (as applicable to the Business) participates or participated and
that provides (or when in effect provided) benefits to or for employees of Seller that is (or when in effect was) subject to any
provision of ERISA (including Title IV of ERISA) and is maintained or contributed to by Seller or any of its Affiliates.  For
purposes of this Agreement, “Employee Plan” also includes any arrangement that would be defined as an “employee
benefit plan” under Section 3(3) of ERISA if it was not (i) otherwise exempt from ERISA by another section of ERISA or (ii)
maintained outside the United States.

    	 	22	 

     

    

“Environmental,
Health and Safety Laws” means, all Laws relating to or imposing Liability or standards of conduct concerning pollution or
protection of the environment, public health and safety, or employee health and safety, and all judgments, orders and decrees
of any Governmental Entity having the force and effect of law issued or promulgated thereunder, and all related common law theories
(including the Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Resource Conservation and Recovery
Act of 1976, the Occupational Safety and Health Act of 1970, each as amended).

“Exchange
Act” means the Securities Exchange Act of 1934, as amended.

“Excluded
Assets” shall have the meaning set forth in Section 1.2.

“Excluded
Contracts” has the meaning set forth in Section 1.2(a).

“Excluded
Liabilities” has the meaning set forth in Section 1.4.

“Financial
Statements” has the meaning set forth in Section 3.5.

 “GAAP”
means generally accepted accounting principles in the United States, as in effect from time to time.

“Governmental
Entity” means any government or any agency, district, bureau, board, commission, court, department, official, political
subdivision, tribunal or other instrumentality of any government, whether federal, state or local, domestic or foreign.

“Indebtedness”
means, as to any Person, without duplication, the aggregate amount of  (a) all obligations for borrowed money and all accrued
but unpaid prepayment premiums or penalties and any other fees and expenses paid to satisfy such indebtedness, (b) all obligations
evidenced by bonds, debentures, notes or similar instruments, (c) all obligations upon which interest charges are customarily
paid, (d) all obligations under conditional sale or other title retention agreements relating to property purchased, (e) all obligations
issued or assumed as the deferred purchase price of property or services (excluding obligations to creditors for goods and services
incurred in the ordinary course of business and accrued expenses), (f) all capitalized lease obligations, (g) all obligations
of others secured by any Lien on property or assets owned or acquired, whether or not the obligations secured thereby have been
assumed, (h) all obligations under standby letters of credit, (i) all obligations to purchase securities (or other property) which
arise out of or in connection with the sale of the same or substantially similar securities or property, and (j) all guarantees
and arrangements having the economic effect of a guarantee of any Indebtedness (as defined in the preceding clauses) of any other
Person.

“Intellectual
Property” means all intellectual property and proprietary rights throughout the world, including all forms of intellectual
property and proprietary rights, whether or not subject to registration or registered, including software, inventions (whether
or not patentable or reduced to practice) and all improvements thereto, trademarks, service marks, trade names, corporate names,
trade dress, logos, and other indicators of source (and the goodwill associated therewith), copyrightable works and all works
of authorship (whether or not copyrightable), “moral” rights, know-how, trade secrets, technologies, databases, processes,
techniques, protocols, methods, formulae, algorithms, layouts, designs, specifications, confidential information, testing information,
research and development information, plans, proposals and technical data, business and marketing plans, market surveys, market
know-how and customer lists, and copies and tangible embodiments of any of the forgoing.

“Knowledge
of Seller” or any similar phrase means the actual knowledge of Scott Saunders and knowledge that Scott Saunders would acquire
upon due inquiry.

“Law”
means any constitutional provision, statute or other law, rule, regulation, or interpretation of any Governmental Entity and any
Order.

“Liabilities”
means any direct or indirect liability, Indebtedness, guaranty, claim, loss, damage, deficiency, assessment, fine, penalty, obligation
or responsibility of any kind or nature, whether fixed or unfixed, choate or inchoate, liquidated or unliquidated, secured or
unsecured, asserted
or unasserted, due or to become due, accrued or unaccrued, absolute, known or unknown, matured or unmatured, contingent or otherwise.

    	 	23	 

     

    

“Lien”
means any claim, charge, easement, encumbrance, lease, covenant, security interest, lien, option, pledge, rights of others, or
restriction (whether on voting, sale, transfer, disposition or otherwise), whether imposed by agreement, understanding, Law, equity
or otherwise.

“Loss”
or “Losses” means any losses, expenses, fees, costs, damages, fines, penalties, judgments, awards, financial responsibility
for investigation, removal and clean-up costs and natural resource damage, actions, suit or proceedings and other Liabilities,
including fees and expenses of attorneys, accountants, third-party experts and consultants, less insurance recovery, if any.

“Order”
means any decree, injunction, judgment, order, ruling, assessment or writ.

“Buyer
Common Stock” has the meaning set forth in Section 2.2.

 “Permit”
means any license, permit, franchise, certificate of authority, or order, or any waiver of the foregoing, required to be issued
by any Governmental Entity.

“Permitted
Liens” means (i) Liens for Taxes not delinquent or being contested in good faith through appropriate proceedings, (ii) statutory
landlord’s, mechanic’s or other similar Liens arising or incurred in the ordinary course of business and for amounts
which are not delinquent and which are set forth on the face of the August 12, 2017 balance sheet, (iii) recorded easements,
covenants and other restrictions of record.

“Person”
means an association, a corporation, an individual, a partnership, a trust or any other entity or organization, including a Governmental
Entity.

“Real
Property Leases” has the meaning set forth in Section 3.7.

“Regulation
D” shall mean Rule 506 of Regulation D as promulgated under the Securities Act.

“Securities
Act” means the U.S. Securities Act of 1933, as amended.

“Tax”
means (a) any U.S. federal, state, local, or foreign income, gross receipts, license, payroll, employment, excise, severance,
stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock, franchise, profits, withholding, social
security, unemployment, disability, real property, personal property, escheat (whether or not considered a tax under applicable
law), sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, healthcare (whether or not considered
a tax under applicable law) or other tax of any kind whatsoever, including any interest, penalty, or addition thereto, whether
disputed or not, (b) any liability for a “Tax” (as described in clause (a)) of another Person resulting from any transferee,
secondary, contractual or other similar liability, or (c) any liability for a “Tax” (as described in clause (a)) of
another Person assumed by agreement or arising as a result of being (or ceasing to be) a member of any affiliated group (within
the meaning of Section 1504 of the Code or any similar applicable provision of state, local or foreign law) (or being included
(or required to be included) in any Tax Return relating thereto).

“Taxing
Authority” means any Governmental Entity that is authorized by law to assess, levy and collect taxes.

“Tax
Return” means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including
any schedule or attachment thereto, and including any amendment thereof.

“Transaction
Documents” means this Agreement, including all schedules and exhibits, the Bill of Sale, the Assignment and Assumption Agreement,
and the Promissory Note.

“Transactions”
means the transactions contemplated by the Transaction Documents.

 

    	 	24	 

     

    

IN
WITNESS WHEREOF, each of the parties hereto has caused this Asset Purchase Agreement to be executed by its duly authorized
officers as of the day and year first above written.

 

	 	 	 
	 	BUYER:

         

        HOLLISTER & BLACKSMITH,
        INC., dba AMERICAN CANNABIS COMPANY, a wholly-owned subsidiary of

        AMERICAN CANNABIS COMPANY,
        INC.

         

	 	By:	 
	 	Name:	Terry Buffalo
	 	Title:	Principal Executive Officer
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	SELLER:

         

        MEDIHEMP,
        LLC

        SLAM
        ENTERPRISES, LLC

        MEDICAL
        CANNABIS CAREGIVERS, INC.

         

	 	By:	 
	 	Name:	Scott Saunders
	 	Title:	Director

 

 

 

    	 	25

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