Document:

Exhibit 10.2

 

 

FORM OF

LEAK OUT AGREEMENT

 

This LEAK-OUT AGREEMENT (the
“Agreement”) is made as of June 29, 2021 (the “Effective Date”) by and between Marijuana Company of America, Inc.
a Utah corporation, (the “Company”), and the undersigned holder of common stock (the “Stockholder”) of the Company.

 

WHEREAS, to ensure the
development of an orderly trading market in the Company’s common stock (“Common Stock”), the Company and the Stockholder
intend to enter into this Agreement to provide for the circumstances under which the Stockholder may sell or otherwise dispose of shares
of the Company’s securities; and

 

WHEREAS, pursuant to that
certain plan of merger and exchange of even date herewith (the “Merger Agreement”), Stockholder is the holder of 265,164,070
shares of common stock of the Company, and pursuant to that certain earnout agreement of even date herewith (the “Earnout Agreement”),
Stockholder may hold additional shares of Common Stock under the Merger Agreement (such Common Stock acquired by the Stockholder pursuant
to the Merger Agreement and the Earnout Agreement, the “Leak-out Shares”);

 

NOW, THEREFORE, IN CONSIDERATION
of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the Company and the undersigned Stockholder agree as follows:

 

Six Month Restrictions on Sales;
Volume Limitations. Beginning on the Effective Date of this Agreement and continuing for six months following the Effective Date,
the Stockholder shall have the right to effect open market sales of his, her or its, as the case may be, Leak-out Shares in an aggregate
amount not to exceed the Total Monthly Volume month, or the Total Weekly Volume per week.

 

For purposes of this Agreement, “Total Weekly
Volume” and “Total Monthly Volume” shall mean 10% of the total number of shares of the
Company’s Common Stock that are actually traded (bought and sold) prior to the Stockholder’s open market sales, as calculated
by adding the daily volume of the Common Stock for the day(s) of that week prior to the open market sale. Leak-out Share amounts
that may be sold are not cumulative. If the Stockholder waives his, her or its, as the case may be, rights at any time during the Leak-out
Period, pursuant to this Section (b) (“Waivable Period”), the calculated Leak-out Share amounts that may be sold for those
Waivable Periods shall not accrue and not add to Leak-out Share amounts that may be sold in future period or periods.

 

Application of this Agreement
to Shares Sold or Otherwise Transferred. So long as such sales are made in compliance with the requirements of this Agreement, Leak-out
Shares sold in the public market shall thereafter not be subject to the restrictions on sale contained in this Agreement. 

 

Attempted Transfers. Any
attempted or purported sale or other Transfer of any Leak-out Shares by the Stockholder in violation or contravention of the terms of
this Agreement shall be null and void ab initio. The Company shall instruct its transfer agent to reject and refuse to transfer
on its books any Leak-out Shares that may have been attempted to be sold or otherwise transferred in violation or contravention of any
of the provisions of this Agreement and shall not recognize any person or entity.

 

Broker Authorization. The
Stockholder hereby authorizes any and all brokers, for all accounts holding the Stockholder’s Leak-out Shares, to provide directly
to the Company, immediately upon the Company’s request, a copy of all account statements showing the Leak-out Shares and all trading
activity in the Leak-out Shares during the Leak-out Period.

 

Acknowledgement of Representation.
The Stockholder represents and warrants to the Company that the Stockholder was or had the opportunity to be represented by legal counsel
and other advisors selected by Stockholder in connection with this Agreement. The Stockholder has reviewed this Agreement with his, her
or its legal counsel and other advisors and understands the terms and conditions hereof.

 

    	  

    	 

    

 

 

Legends on Certificates.
All Leak-out Shares now or hereafter owned by the Stockholder, except any shares purchased in open market transactions by Stockholders
that are not affiliates (as such term is defined under securities laws) of the Company, shall be subject to the provisions of this Agreement
and the certificates representing such Leak-out Shares shall bear the following legends:

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE
SOLD, ASSIGNED, PLEDGED OR OTHERWISE TRANSFERRED FOR VALUE UNLESS THEY ARE REGISTERED UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES
LAWS OR UNLESS THE CORPORATION RECEIVES AN OPINION OF COUNSEL SATISFACTORY TO IT, OR OTHERWISE SATISFIES ITSELF, THAT AN EXEMPTION FROM
REGISTRATION IS AVAILABLE.

  

THE SALE, ASSIGNMENT, GIFT, BEQUEST, TRANSFER, DISTRIBUTION,
PLEDGE, HYPOTHECATION OR OTHER ENCUMBRANCE OR DISPOSITION OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS RESTRICTED BY AND MAY BE MADE
ONLY IN ACCORDANCE WITH THE TERMS OF A LEAK-OUT AGREEMENT, A COPY OF WHICH MAY BE EXAMINED AT THE OFFICE OF THE CORPORATION.

 

Governing Law; Venue. All
disputes arising under this Agreement shall be governed by and interpreted in accordance with the laws of the State of Nevada, without
regard to principles of conflict of laws.  Any action brought by either party against the other concerning the transactions contemplated
by this Agreement must be brought only in the civil or state courts of Nevada or in the federal courts located in the State of Nevada. 
Both parties and the individual signing this Agreement on behalf of the Company agree to submit to the jurisdiction of such courts. 
The prevailing party shall be entitled to recover from the other party its reasonable attorney’s fees and costs.  In the event
that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then such provision shall
be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conformed with such statute or rule
of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or unenforceability of
any other provision of this Agreement. Nothing contained herein shall be deemed or operate to preclude the Stockholder from bringing suit
or taking other legal action against the Company in any other jurisdiction to collect on the Company’s obligations to the Stockholder,
to realize on any collateral or any other security for such obligations, or to enforce a judgment or other decision in favor of the Stockholder. 

 

Binding Effect. This Agreement
will be binding upon and inure to the benefit of the Company, its successors and assigns and to the Stockholder and their respective permitted
heirs, personal representatives, successors and assigns.

 

Entire Understanding. This
Agreement sets forth the entire agreement and understanding of the parties hereto in respect of the subject matter hereof and the transactions
contemplated hereby and supersedes all prior written and oral agreements, arrangements and understandings relating to the subject matter
hereof. This Agreement may only be changed by an agreement in writing, mutually signed by the Company and the Stockholder subject to this
Agreement.

 

Remedies. The parties hereto
acknowledge that money damages are not an adequate remedy for violations of this Agreement and that any party may, in such party’s
sole discretion, apply to any court of competent jurisdiction for specific performance or injunctive relief or such other relief as such
court may deem just and proper in order to enforce this Agreement or prevent any violation hereof and, to the extent permitted by applicable
law, each party hereto waives any objection to the imposition of such relief. All rights, powers and remedies provided under this Agreement
or otherwise available in respect hereof, whether at law or in equity, shall be cumulative and not alternative, and the exercise or beginning
of the exercise of any thereof by any party hereto shall not preclude the simultaneous or later exercise of any other such right, power
or remedy by such party.

  

Counterparts. This Agreement
may be executed by facsimile and in any number of counterparts, each of which shall be deemed to be an original, but all of which together
shall constitute one and the same instrument. Each counterpart may consist of a number of copies each signed by less than all, but together
signed by all, of the parties hereto.

 

IN WITNESS WHEREOF, this Agreement has been
signed as of the date first above written.

 

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MARIJUANA COMPANY OF AMERICA, INC.

 

 

__/s/ Jesus M. Quintero_________________________ 

By: Jesus M. Quintero

Title: Chief Executive Officer

 

IN WITNESS WHEREOF, the undersigned have caused
this Leak-out Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

 

Name of Stockholder:

 

BEACH LABS, INC.

 

 

__/s/ Ronald P. Russo, Jr._____________________

Name of Authorized Signatory: Ronald P. Russo,
Jr.

Title of Authorized
Signatory: CEO 

 

 

3Exhibit 10.3

 

 

FORM OF

OBSERVATION RIGHTS LETTER

 

Marijuana Company of America, Inc.

1340 West Valley Parkway, Suite 205

Escondido, CA 92029

 

June 29, 2021

 

Beach Labs Inc.

3450 S. Ocean Blvd., #122

Palm Beach, FL 33480

Attention: Ronald P. Russo, Jr.

Email: rr@cdistro.com

 

 

	 	Re:	Observation Rights

Dear Mr. Russo:

This letter will confirm our agreement that
effective upon the consummation of the merger and share exchange between Marijuana Company of America, Inc. (the “Company”),
cDistro Merger Sub, Inc. (“Merger Sub”), and cDistro, Inc. (“cDistro”) resulting in the Company’s acquisition
of cDistro from Beach Labs, Inc. ( “Beach Labs”), and for so long as you personally continue to serve as an executive member
of cDistro’s management, you will be entitled to the following board observation rights, in addition to rights to certain non-public
financial information, inspection rights and other rights that you may be entitled to pursuant to the Agreement and Plan of Merger, Exchange
Agreement, and Earnout Agreement among the Company and Beach Labs, each dated as of the date hereof:

The Company shall permit one representative
of the Beach Labs (the “Observer”) to attend all meetings of the Board of Directors in a non-voting observer capacity
(except as expressly provided herein), which observation right shall include the ability to participate in discussions of the Board of
Directors, and shall provide such representative with copies of all notices, minutes, written consents, and other materials that it provides
to members of the Board of Directors, at the time it provides them to such members. The observation right must be exercised in person.

Observer agrees, on behalf of itself and any
representative exercising the observation rights set forth herein, that so long as it shall exercise its observation right (i) it
shall hold in strict confidence all information and materials that it may receive or be given access to in connection with meetings of
the Board of Directors and to act in a fiduciary manner with respect to all information so provided (provided that this shall not limit
its ability to discuss such matters with its officers, directors or legal counsel, as necessary), and (ii) the Board of Directors
may withhold from it certain information or material furnished or made available to the Board of Directors or exclude it from certain
confidential “closed sessions” of the Board of Directors if the furnishing or availability of such information or material
or its presence at such “closed sessions” would jeopardize the Company’s attorney-client privilege or if the Board of
Directors otherwise reasonably so requires.

The rights described herein shall terminate
and be of no further force or effect upon the cessation of your employment as a member of management of cDistro.

[remainder of page intentionally left blank]

 

 

 

 

    	  

    	 

    

 

 

	 	 	 
	Very truly yours,
	 
	MARIJUANA COMPANY OF AMERICA, INC.
	 	 
	By:	 	
    /s/
    Jesus M. Quintero

	Name:	 	Jesus M. Quintero
	Title:	 	CEO

 

	 	 	 
	ACKNOWLEDGED AND AGREED:
	 
	Beach Labs, Inc.
	 	 
	By:	 	
    /s/
    Ronald P. Russo, Jr.

	Name:	 	Ronald P. Russo, Jr.
	Title:	 	CEO

 

 

[signature page to Beach Labs Observation Rights
Letter]

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