Document:

LOAN
AGREEMENT

 

January
15, 2019

 

WHEREAS
Arshad M Farooq (the “Lender”) and Petrolia Energy Corporation (the “Borrower”) wish
to enter into this loan agreement (the “Loan Agreement”) which provides a loan of US $125,000 at an interest rate
of 4%

 

NOW
THEREFORE, in consideration of the increase of the loan upon the terms hereof, the Lender and the Borrower covenant and agree
as follows:

 

	Borrower:	Petrolia
    Energy Corporation 
	 	 
	Lender:	Arshad
    M Farooq.
	 	 
	Loan:	US
    $125,000 (“Loan”).
	 	 
	Effective
    Date:	January
    15, 2019
	 	 
	Maturity
    Date:	January
    15, 2020
	 	 
	Renewal
    Option:	Borrow
    has an option to extend the Principal loan for one (1) additional year commencing January 15, 2020 by paying the Year 1 Interest
    payment and providing a written notice 14 days prior to the Maturity Date
	 	 
	Interest
    Rate:	The
    Borrower shall pay interest on the total Loan at a rate of 4% per annum or until Maturity. 
	 	 
	Repayment:	Principal
    and Accrued Interest paid January 15, 2020
	 	 
	Prepayment:	Prepayment
    is permitted any time subject to a written notification period of 5 calendar days. In the event of early payout, the Borrower
    shall ensure total interest paid to the lender for the entire term of this loan. 
	 	 
	Representations
    and

 Warranties:	Borrower
    represents and warrants to the Lender that:
	 	 
	 	1.	it
    has been duly incorporated and is in good standing under the legislation governing it, and it has the powers, permits, and
    licenses required to operate its business or enterprise and to own, manage, and administer its property;
	 	 	 
	 	2.	it
    has the right to pledge, charge, mortgage, or lien its assets in accordance with the Security contemplated by this Loan Agreement;
	 	 	 
	 	3.	it
    is not involved in any dispute or legal proceedings likely to materially affect its financial position or its capacity to
    operate its business;
	 	 	 
	 	4.	it
    has all the requisite power, authority and capacity to execute and deliver this Loan Agreement and the Security (to which
    it is a party) and to perform its obligations hereunder and thereunder;

 

    	 

    	Petrolia Energy Corporation

	2	 

    

 

	Affirmative
    Covenants:	Each
    of the Loan Parties covenants and agrees that it shall:
	 	 
	 	1.	pay
    all sums of money when due and payable by it to the Lender under this Loan Agreement and the Security;
	 	 	 
	 	2.	in
    the case of the Borrower, carry on business and operate its petroleum and natural gas reserves in accordance with good practices
    consistent with accepted industry standards and pursuant to applicable agreements, regulations, and laws;
	 	 	 
	 	3.	maintain
    its corporate existence and comply with all applicable laws;
	 	 	 
	 	4.	comply
    with all regulatory bodies and provisions regarding environmental procedures and controls;
	 	 	 
	 	5.	upon
    reasonable notice, allow the Lender access to its books and records and to visit and inspect its assets and place of business;
    and
	 	 
	Events
    of Default:	The
    Lender may accelerate the payment of any such outstanding amounts and cancel availability of any undrawn portion of any of
    the Loan at any time after the occurrence of anyone or more of the following events (each an “Event of Default”):
	 	 
	 	1.	failure
    by the Borrower to pay principal. interest and fees when due;
	 	 	 
	 	2.	any
    material representations and warranties made by a Loan Party are incorrect in any material respect;
	 	 	 
	 	3.	any
    breach of applicable law by a Loan Party;
	 	 	 
	 	4.	any
    cross default as a result of a failure in the performance or observance of any material term or condition in respect of any
    other indebtedness or obligation of a Loan Party under this Loan Agreement or any of the Security to which it is a party or
    under any other material agreement to which it is a party; or any event which has happened or is expected to happen which
    would have a material adverse effect on a Loan Party.

 

    	 

    	Petrolia Energy Corporation

	3	 

    

 

	Indemnity:	The
    Loan Parties jointly and severally indemnify the Lender against any loss, costs, claims, actions, suits, damages, expenses
    or liabilities of any and every kind which the Lender may sustain or incur, directly or indirectly, as a consequence of the
    entry into and performance of this Loan Agreement and any of the Security, the use of funds advanced under this Loan Agreement,
    the consummation of any transaction contemplated by this Loan Agreement, any litigation or claim commenced arising out of
    the execution, delivery or performance of, or the enforcement of any right under this Loan Agreement or any of the Security,
    a default by any Loan Party in the payment or performance of any obligations (including any representation or warranty made
    herein by a Loan Party being incorrect at the time it was made or deemed to have been made), the failure by a Loan Party to
    comply with any of its covenants in this Loan Agreement or in any of the Security, or the occurrence of any other default
    or Event of Default, except where such loss, costs, claims, actions, suits, damages, expenses or liabilities arise by reason
    of the gross negligence or willful misconduct of the Lender. The indemnities in this Loan Agreement shall extend to the agents
    and assignees of the Lender and. for certainty, those for whom the Lender acts as agent hereunder, and the Loan Parties shall
    hold the benefit of such indemnities in trust for such indemnified parties to the extent necessary to give effect hereto.
	 	 
	 	The
    provisions, undertakings, and indemnifications set out in this Loan Agreement, shall survive the satisfaction and release
    of the Security and payment and satisfaction of the indebtedness and liability of the Loan Parties to the Lender.
	 	 
	Costs:	Each
    party shall be responsible for its own legal costs.
	 	 
	Requirements:	The
    Borrower hereby agrees to provide to the Lender written notice of a change in name or address immediately.
	 	 
	Assignment:	The
    rights or obligations of the Borrower herein and the amount of the Loan may be transferred or assigned by the Borrower subject
    to written approval of the Lender, acting reasonably. The Lender may assign all or any part of the Loan, the Security and
    this Loan Agreement without the consent of the Borrower but shall notify the Borrow within a reasonable time frame of such
    assignment occurring.
	 	 
	Binding
    Agreement:	The
    terms and conditions of this Loan Agreement are binding and legal obligations and shall constitute a commitment on the part
    of the Borrower and the Lender.
	 	 
	Confidentiality:	This
    Loan Agreement is delivered to you on the understanding that neither it nor its contents shall be disclosed to any other party
    except to counsel, accountants, employees and agents of the Borrower who are specifically involved in the transaction.
	 	 
	Lender’s
    Role:	Nothing
    contained in this Loan Agreement, the Security or any related documentation shall in any way be deemed to be or be construed
    as creating the relationship of joint venturer or partner or co-venturer with the Loan Parties. The parties each acknowledge
    and agree that the relationship between them is solely and exclusively one of borrower and lender.
	 	 
	Counterparts:	This
    Loan Agreement may be executed by the parties hereto in any number of counterparts and by different parties in separate counterparts,
    each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and
    the same document. Executed copies may be delivered by facsimile transmission or electronic mail transmission and it shall
    not be necessary to confirm execution by delivery of originally executed documents.

 

    	 

    	Petrolia Energy Corporation

	4	 

    

 

	Currency:	All references to
    amounts in this agreement, unless otherwise described, are in United States Dollars.
	 	 
	Rights and Remedies

 Cumulative:	The rights, remedies
    and powers of the Lender under this Loan Agreement and the Security, at law and in equity are cumulative and not alternative
    and are not in substitution for any other remedies, rights or powers of the Lender, and no delay or omission in exercise of
    any such right, remedy or power shall exhaust such rights, remedies and powers to be construed as a waiver of any of them.
	 	 
	Waivers and

 Amendments:	No term, provision
    or condition of this Loan Agreement or any of the Security, may be waived, varied or amended unless in writing and signed
    by a duly authorized officer of the Lender.
	 	 
	Governing Law:	This Loan Agreement
    shall be construed, governed and enforced in accordance with, and the rights of the parties shall be governed by, the law
    of the State of Texas and the laws of the United States of America applicable therein.
	 	 
	Joint and Several

 Liability:	If more than one
    person is designated as Guarantor, then each such person shall be jointly and severally liable for all of the indebtedness,
    liabilities, covenants, representations, warranties and other obligations of the Guarantors set out in this Loan Agreement.
    If more than one person is designated as a Loan Party, then each such person shall be jointly and severally liable for all
    of the indebtedness, liabilities, covenants, representations, warranties and other obligations of the Loan Parties set out
    in this Loan Agreement.
	 	 
	Waiver of Jury Trial:	The Borrower hereby
    irrevocably waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in any legal
    proceeding directly or indirectly arising out of or relating to this Loan Agreement, the Security or any other document or
    the transactions contemplated hereby or thereby (whether based on contract, tort or any of other theory).

 

AGREED
AND ACCEPTED as of the 15th day of January 2019.

 

	 	 	 
	Witness	 	ARSHAD
    M FAROOQ 
	 	 	Lender
	 	 	 	 
	 	 	PETROLIA
    ENERGY CORPORATION
	 	 	Borrower
	 	 	 	 
	 	 	Per:	                                  
	 	 	Name:	Zel
    C. Khan
	 	 	Title:	CEO
    & PresidentExhibit
10.1

 

ASSET
PURCHASE AGREEMENT

 

This
Asset Purchase Agreement (“Agreement”) dated December 31, 2019, is by and between CQENS Technologies
Inc., formerly known as VapAria Corporation, a corporation organized under the laws of the State of Delaware and having an office
for the transaction of business at 5550 Nicollet Avenue, Minneapolis, MN 55419 (the “Buyer”), and Chong
Corporation, a corporation organized under the laws of the State of Minnesota and having an office for the transaction of business
at 5550 Nicollet Avenue, Minneapolis, MN 55419 (the “Seller”).

 

WHEREAS,
the Seller owns certain patent applications, patents, designs, embodiments, other intellectual property rights, and prototypes
in the fields of: (i) heat-not-burn methods of tobacco and other active ingredients, including hemp-CBD and cannabis; and (ii)
tobacco, nicotine, reduced tobacco risk and smoking cessation.

 

WHEREAS,
the Seller desires to convey, sell and assign to Buyer all of each Seller’s right, title and interest in and to the
Assets (as hereinafter defined), upon the terms and conditions contained in this Agreement.

 

WHEREAS,
the Buyer desires to purchase the Assets upon the terms and conditions contained in this Agreement.

 

WHEREAS,
the Seller is an Affiliate of the Buyer.

 

NOW
THEREFORE, in consideration of the mutual promises and other good and valuable consideration, the sufficiency of which is
hereby acknowledged, the parties agree as follows:

 

1.
Definitions and Interpretation.

 

1.1
Definitions. In this Agreement:

 

“Affiliate”
means, with respect to any Person, any other Person that, directly or indirectly, through one or more intermediaries, controls,
or is controlled by, or is under common control with, such Person, and the term “control” (including the terms “controlled
by” and “under common control with”) 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 ownership of voting securities, by contract
or otherwise;

 

“Assets”
shall have the definition set forth in Section 2.1 of this Agreement;

 

“Buyer’s
Common Stock” shall mean the common stock, par value $0.0001 per share, of the Buyer;

 

“Commission”
means the United States Securities and Exchange Commission;

 

“Closing”
shall have the meaning set forth in Section 6 of this Agreement;

 

“Closing
Date” shall have the meaning set forth in Section 6 of this Agreement;

 

“Exchange
Act” means the United States Securities Exchange Act of 1934, as amended;

 

    	 	 	 

    	 	 	 

    

 

“Governmental
Entity” means any federal, state or local government or any court, administrative or regulatory agency or commission
or other governmental authority or agency, domestic or foreign;

 

“Intellectual
Property” means any of the following, to the extent that any of the following are used by Seller or held for use
by Seller in connection with the Assets as of the Closing Date: (i) all United States and foreign patent applications, patents
and statutory invention registrations, (ii) all unpatented inventions that have not yet been the subject of a patent application,
(iii) all United States and foreign trademark, trade name, service mark, collective mark, and certification mark registrations
and applications therefor at the federal, state or local level, (iv) all trademarks, (vi) all copyrightable works of authorship
that have not been the subject of a copyright registration or application therefor, including but not limited to software (including
proprietary software, source code, executable code, object code, firmware, development tools, test suites, design specs, files,
records and data, processes, protocols, scripts, routines used to process data), web sites (including related computer code and
content) data, databases and related documentation, media on which any of the foregoing is recorded, and improvements, modifications,
enhancements, versions and releases relating thereto), software code, manuals and other text works, photographs, video recordings,
and audio recordings, admin rights and software support agreements (vii) all trade secrets, proprietary information, databases
and data, (viii) all mask works, (ix) all proprietary data formulae, (x) all rights in internet web sites and internet domain
names, and (xi) registrations and applications for registration of any of the foregoing;

 

“Intellectual
Property Rights” means all Intellectual Property that Seller owns in whole or in part and/or in which Seller has
a valid claim of ownership in whole or in part (such as a contract right of assignment from an employee or independent contractor);

 

“International
Device Patents and Patent Applications” shall have the meaning set forth on Schedule 2.1;

 

“Liability”
or “Liabilities” mean any and all debts, liabilities, commitments and obligations, whether fixed, contingent
or absolute, matured or unmatured, liquidated or unliquidated, accrued or not accrued, known or unknown, whenever or however arising
(including whether arising out of any contract or tort based on negligence or strict liability) and whether or not the same would
be required by U.S. generally accepted accounting principles;

 

“License
Agreement” means the License Agreement dated January 28, 2016 by and between the Buyer and the Seller;

 

“Lien”
means any right which (a) shall entitle any Person to terminate, amend, accelerate or cancel any agreement, option, license or
other instrument to which Buyer or Seller is a party by reason of the occurrence of (i) a violation, breach or default thereunder
by Buyer or Seller, as the case may be; or (ii) an event which with or without notice or lapse of time or both would become a
default thereunder; or (b) if exercised by the holder thereof, will (i) entitle such Person to accelerate the performance of any
obligations or the payment of any sums owed by Buyer or Seller, as the case may be, under any agreement, option, license or other
instrument, or (ii) result in any loss of any benefit under, or the creation of any pledges, claims, equities, options, liens,
charges, call rights, rights of first refusal, “tag” or “drag” along rights, encumbrances and security
interests of any kind or nature whatsoever on any of the property or assets of Buyer or Seller;

 

“Material
Adverse Effect” means any effect or change that would be materially adverse to the business, assets, condition (financial
or otherwise), operating results, operations, or business prospects of Buyer or Seller, as the case may be, taken as a whole,
or on the ability of any party to consummate timely the transactions contemplated hereby;

 

    	2 

    	 

    

 

“Person”
means a natural person, company, corporation, partnership, association, trust or any unincorporated organization;

 

“Purchase
Price” shall have the meaning set forth in Section 2.3 of this Agreement;

 

“Securities
Act” means the Securities Exchange Act of 1933, as amended; and

 

“U.S.
Device Patents” shall have the meaning set forth on Schedule 2.1.

 

1.2
Interpretation.

 

1.2.1
As used in this Agreement, unless the context clearly indicates otherwise:

 

(a)
words used in the singular include the plural and words in the plural include the singular;

 

(b)
reference to any Person includes such person’s successors and assigns, but only if such successors and assigns are permitted
by this Agreement, and reference to a Person in a particular capacity excludes such Person in any other capacity;

 

(c)
reference to any gender includes the other gender;

 

(d)
whenever the words “include,” “includes” or “including” are used in this Agreement, they shall
be deemed to be followed by the words “without limitation” or “but not limited to” or words of similar
import;

 

(e)
reference to any Section means such Section of this Agreement, and references in any Section or definition to any clause means
such clause of such Section or definition;

 

(f)
the words “herein,” “hereunder,” “hereof,” “hereto” and words of similar import
shall be deemed references to this Agreement as a whole and not to any particular Section or other provision hereof;

 

(g)
reference to any agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented
and modified from time to time to the extent permitted by the provisions thereof and by this Agreement;

 

(h)
reference to any law (including statutes and ordinances) means such law (including all rules and regulations promulgated thereunder)
as amended, modified, codified or reenacted, in whole or in part, and in effect at the time of determining compliance or applicability,
and reference to any particular provision of any law shall be interpreted to include any revision of or successor to that provision
regardless of how numbered or classified;

 

(i)
relative to the determination of any period of time, “from” means “from and including,” “to”
means “to but excluding” and “through” means “through and including”; and

 

(j)
the titles and headings of Sections contained in this Agreement have been inserted for convenience of reference only and shall
not be deemed to be a part of or to affect the meaning or interpretation of this Agreement.

 

    	3 

    	 

    

 

1.2.2
This Agreement was negotiated by the parties with the benefit of legal representation, and no rule of construction or interpretation
otherwise requiring this Agreement to be construed or interpreted against any party shall apply to any construction or interpretation
hereof. This Agreement shall be interpreted and construed to the maximum extent possible so as to uphold the enforceability of
each of the terms and provisions hereof, it being understood and acknowledged that this Agreement was entered into by the parties
after substantial negotiations and with full awareness by the parties of the terms and provisions hereof and the consequences
thereof.

 

1.2.3
Where a statement in this Agreement is qualified by the expression “to the best of Buyer’s knowledge,” “to
the best of Seller’s knowledge,” “so far as Buyer is aware,” or “so far as Seller is aware”
or any similar expression shall be deemed to include Buyer’s or Seller’s actual knowledge and what Buyer or Seller
should have known after due and careful inquiry of the President or Chief Executive Officer, the members of the Board of Directors
and any relevant person(s) involved in the management of the business of Buyer and Seller.

 

2.
Sale and Purchase of Assets.

 

2.1
Sale and Purchase of Assets. Subject to the terms and conditions of this Agreement, at the Closing (as hereinafter defined),
the Seller shall sell assign, transfer, convey and deliver to Buyer, and Buyer shall purchase from the Seller, free and clear
of any encumbrances all of the right, title and interest, in, and to those assets of Seller identified on Schedule 2.1
(the “Assets”).

 

2.2
Liabilities Excluded. Buyer shall not assume any Liabilities of Seller related to the Assets, either directly or indirectly,
and any and all such other Liabilities as they relate to the Assets shall be satisfied by Seller in full prior to the Closing
of this Agreement.

 

2.3.
Purchase Price. The purchase price for the Assets (the “Purchase Price”) is:

 

(a)
Fourteen million (14,000,000) shares of Buyer’s Common Stock;

 

(b)
modification of the License Agreement pursuant to which the Buyer was granted an exclusive license by the Seller for the U.S.
Patent App No. 14/629/279, subsequently granted U.S. Patent No. 9,283,180, limiting Buyer’s rights under the License Agreement
to the fields and applications of tobacco, hemp-CBD, cannabis, nicotine, reduced tobacco risk and smoking cessation; and

 

(c)
modification of the License Agreement pursuant to which the Buyer was granted an exclusive license by the Seller for the U.S.
Patent App No. 13/453,939, subsequently granted U.S. Patent No. 9,399,110, limiting Buyer’s rights under the License Agreement
to the fields and applications of tobacco, nicotine, hemp-CBD, cannabis, reduced tobacco risk and smoking cessation.

 

The
issuance of the shares of Buyer’s Common Stock shall be exempt from registration under the Securities Act in reliance on
an exemption provided by Section 4(a)(2) of that act.

 

3.
Representations and Warranties of Seller. The Seller hereby makes the following representations and warranties to the Buyer
as of the date hereof and as of the Closing Date (as hereinafter defined).

 

3.1
Organization and Good Standing. Seller is a corporation duly incorporated, validly existing and in good standing under
the laws of the jurisdiction of its organization, with full corporate power and authority to own, lease and operate its business
and properties and to carry on business in the places and in the manner as presently conducted or proposed to be conducted. Seller
is in good standing as a foreign corporation in each jurisdiction in which the properties owned, leased or operated, or the business
conducted, by it requires such qualification except where the failure to so qualify would not have a Material Adverse Effect the
consummation of the transactions contemplated hereby.

 

    	4 

    	 

    

 

3.2
Authority and Enforcement. Seller has all requisite corporate power and authority to execute and deliver this Agreement,
and to consummate the transactions contemplated hereby. Seller has taken all corporate action necessary for the execution and
delivery of this Agreement and the consummation of the transactions contemplated hereby, and this Agreement constitutes the valid
and binding obligation of Seller, enforceable against Seller in accordance with its terms, except as may be affected by bankruptcy,
insolvency, moratoria or other similar laws affecting the enforcement of creditors’ rights generally and subject to the
qualification that the availability of equitable remedies is subject to the discretion of the court before which any proceeding
therefor may be brought.

 

3.3
No Conflicts or Defaults. The execution and delivery of this Agreement by Seller and the consummation of the transactions
contemplated hereby do not and shall not with or without the giving of notice or the passage of time (i) violate, conflict with,
or result in a breach of, or a default or loss of rights under, any covenant, agreement, mortgage, indenture, lease, instrument,
permit or license to which the Seller is a party or by which the Seller or the Assets are bound, or any judgment, order or decree,
or any law, rule or regulation to which the Seller is subject, (ii) result in the creation of, or give any party the right to
create, any Lien upon any of the Assets, (iii) terminate or give any party the right to terminate, amend, abandon or refuse to
perform, any material agreement, arrangement or commitment relating to the Assets, or (iv) have a Material Adverse Effect on the
Assets or consummation of the transactions contemplated hereby.

 

3.4
Consents of Third Parties. The execution, delivery and performance of this Agreement and the consummation of the transactions
contemplated hereby by Seller does not require the consent of any Person or, if required, such consent has or will be obtained
in writing, prior to the Closing.

 

3.5
Actions Pending. There is no action, suit, claim, investigation or proceeding pending or, to the knowledge of Seller, threatened
against Seller, which questions the validity of this Agreement or the transactions contemplated hereby or any action taken or
to be taken pursuant hereto or thereto. There is no action, suit, claim, investigation or proceeding pending or, to the knowledge
of Seller, threatened against or involving Seller or any of the Assets. There are no outstanding orders, judgments, injunctions,
awards or decrees of any court, arbitrator or Governmental Entity against the Seller or any of the Assets.

 

3.6
Title to Assets. The Seller is the sole and exclusive owner of and has good, valid and marketable title to, free and clear
of all Liens, to the Assets, including all Intellectual Property Rights; Seller has not transferred ownership of, or granted any
exclusive or non-exclusive license with respect to, any of the Assets, including any Intellectual Property Rights, to any Person;
and Seller has not permitted the rights of Seller in Intellectual Property Rights to enter into the public domain. The consummation
of the transactions contemplated by this Agreement will not result in the loss or impairment of any of the Intellectual Property
Rights. To the Seller’s knowledge, there are no third parties using any of the Intellectual Property Rights. The Seller
has instituted, maintained and enforced commercially reasonable measures (including the entering into of appropriate written agreements
with present employees and consultants) to maintain the ownership and confidentiality of the Intellectual Property Rights. To
the best of Seller’s knowledge, such Intellectual Property Rights do not infringe upon or otherwise violate the rights of
any third person, and the Seller has not received notice of any such infringement or violation.

 

3.7
Brokers. All negotiations relative to this Agreement and the transactions contemplated hereby have been carried without
the intervention of any person in such a manner as to give rise to any valid claim by any person against Seller for a finder’s
fee, brokerage commission or similar payment.

 

    	5 

    	 

    

 

3.8
Investment Representations. The Seller is acquiring the shares of Buyer’s Common Stock for its own account with the
present intention of holding such securities for purposes of investment, and it has no intention of distributing such Buyer’s
Common Stock, or selling, transferring or otherwise disposing of such Buyer’s Common Stock in a public distribution, in
any of such instances, in violation of the federal securities laws of the United States of America. Seller understands that (a)
the shares of Buyer’s Common Stock are “restricted securities,” as defined in Rule 144 promulgated under the
Securities Act; (b) such shares of Buyer’s Common Stock have not been registered under the Securities Act, and are being
issued in reliance on exemptions for private offerings contained in Section 4(a)(2) of the Securities Act; (c) the Buyer has no
any obligation to so register the shares of Buyer’s Common Stock; and (d) the shares of Buyer’s Common Stock may not
be distributed, re-offered or resold except through a valid and effective registration statement or pursuant to a valid exemption
from the registration requirements under the Securities Act. The certificate evidencing the shares of Buyer’s Common Stock
shall contain the following legend:

 

“The
shares of common stock evidenced by this certificate have not been registered under the Securities Act of 1933, as amended (the
“Act”). Such shares may not be sold, transferred, pledged, hypothecated or otherwise disposed of unless they have
been so registered or the issuer shall have received an opinion of counsel satisfactory to it to the effect that registration
thereof for purposes of transfer is not required under the Act or the securities laws of any state.”

 

3.9
Information on the Buyer. The Seller has been provided access via the Commission’s public website at www.sec.gov/EDGAR
with access to copies of Buyer’s Annual Report on Form 10-K for the period ended December 31, 2018 and its other filings
with the Commission, and represents and warrants that it has read and reviewed these reports, together with Buyer’s other
filings with the Commission. The Seller is an accredited investor who has such knowledge and experience in financial, tax and
other business matters as to enable it to evaluate the merits and risks of, and to make an informed investment decision with respect
to, the shares of Buyer’s Common Stock and this Agreement. The Seller, either alone or together with its advisors, has such
knowledge and experience in financial, tax, and business matters, and, in particular, investments in securities, so as to enable
it to utilize the information made available to it in connection with the transactions contemplated hereby, to evaluate the merits
and risks of an investment in the shares of Buyer’s Common Stock and to make an informed investment decision with respect
thereto. The Seller understands that its acquisition of the shares of Buyer’s Common Stock is a speculative investment,
and the Seller represents that it is able to bear the risk of such investment for an indefinite period and can afford a complete
loss thereof. The Seller is an Affiliate of the Buyer; the principal executive officer and control person of the Seller is also
a member of the Board of Directors, Chief Executive Officer and principal stockholder of the Buyer.

 

3.10
Disclosure. The representations, warranties and acknowledgments of Seller set forth herein are true, complete and accurate
in all material respects, do not omit to state any material fact, or omit any fact necessary to make such representations, warranties
and acknowledgments, in light of the circumstances under which they are made, not misleading.

 

4.
Representations and Warranties of the Buyer. The Buyer hereby makes the following representations and warranties to Seller,
as of the date hereof and as of the Closing Date.

 

    	6 

    	 

    

 

4.1
Organization and Good Standing. Buyer is a corporation duly incorporated, validly existing and in good standing under the
laws of the jurisdiction of its organization, with full corporate power and authority to own, lease and operate its business and
properties and to carry on business in the places and in the manner as presently conducted or proposed to be conducted. Buyer
is in good standing as a foreign corporation in each jurisdiction in which the properties owned, leased or operated, or the business
conducted, by it requires such qualification except where the failure to so qualify would not have a Material Adverse Effect on
the consummation of the transactions contemplated hereby.

 

4.2
Authority and Enforcement. Buyer has all requisite corporate power and authority to execute and deliver this Agreement,
and to consummate the transactions contemplated hereby. Buyer has taken all corporate action necessary for the execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby, and this Agreement constitutes the valid and binding
obligation of the Buyer, enforceable against it in accordance with its terms, except as may be affected by bankruptcy, insolvency,
moratorium or other similar laws affecting the enforcement of creditors’ rights generally and subject to the qualification
that the availability of equitable remedies is subject to the discretion of the court before which any proceeding therefor may
be brought.

 

4.3
No Conflicts or Defaults. The execution and delivery of this Agreement by Buyer and the consummation of the transactions
contemplated hereby do not and shall not with or without the giving of notice or the passage of time (i) violate, conflict with,
or result in a breach of, or a default or loss of rights under, any covenant, agreement, mortgage, indenture, lease, instrument,
permit or license to which the Buyer is a party, or any judgment, order or decree, or any law, rule or regulation to which the
Buyer is subject, (ii) terminate or give any party the right to terminate, amend, abandon or refuse to perform, any material agreement,
arrangement or commitment, or (iii) have a Material Adverse Effect on the consummation of the transactions contemplated hereby.

 

4.4
Buyer’s Common Stock. The shares of Buyer’s Common Stock have been duly authorized, and upon issuance pursuant
to the provisions hereof, will be validly issued, fully paid and non-assessable.

 

4.5
Actions Pending. There is no action, suit, claim, investigation or proceeding pending or, to the knowledge of the Buyer,
threatened against the Buyer which questions the validity of this Agreement or the transactions contemplated hereby or any action
taken or to be taken pursuant hereto or thereto.

 

5.
Conditions to Closing.

 

5.1
Conditions Precedent to Buyer’s Obligation to Close. The obligation of Buyer to consummate the transactions contemplated
by this Agreement is subject to satisfaction of the following conditions on or prior to the Closing Date:

 

(a)
The representations and warranties of the Seller set forth in Section 3 above shall be true and correct in all material respects
at and as of the Closing Date;

 

(b)
The Seller shall have performed and complied with all of its covenants hereunder and the covenants it has made regarding the Seller
hereunder in all material respects through the Closing Date;

 

(c)
No action, suit, or proceeding shall be pending or threatened before any court or quasi-judicial or administrative agency of any
federal, state, local, or foreign jurisdiction or before any arbitrator wherein an unfavorable injunction, judgment, order, decree,
ruling, or charge would (i) prevent or adversely affect Seller’s consummation of any of the transactions contemplated by
this Agreement or (ii) cause any of the transactions contemplated by this Agreement to be rescinded following consummation (and
no such injunction, judgment, order, decree, ruling, or charge shall be in effect);

 

    	7 

    	 

    

 

(d)
No material adverse change shall have taken place with respect to the Business, the Seller or Assets, and no event shall have
occurred that results in a Material Adverse Effect;

 

(e)
Seller shall have delivered to Buyer a certificate stating that all of the conditions specified above in Section 5.1(d) - (e)
has been complied with;

 

(f)
All actions to be taken by Seller in connection with consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the transactions contemplated hereby will be reasonably satisfactory
in form and substance to the Buyer.

 

5.2
Conditions Precedent to Seller’s Obligation to Close. The obligation of the Seller to consummate the transactions
contemplated hereby is subject to satisfaction of the following conditions on or prior to the Closing Date:

 

(a)
The representations and warranties of the Buyer set forth in Section 4 above shall be true and correct in all material respects
at and as of the Closing Date;

 

(b)
The Buyer shall have performed and complied with all of its respective covenants hereunder in all material respects through the
Closing Date;

 

(c)
No action, suit, or proceeding shall be pending or threatened before any court or quasi-judicial or administrative agency of any
federal, state, local, or foreign jurisdiction or before any arbitrator wherein an unfavorable injunction, judgment, order, decree,
ruling, or charge would (i) prevent or adversely affect Buyer’s consummation of any of the transactions contemplated by
this Agreement or (ii) cause any of the transactions contemplated by this Agreement to be rescinded following consummation (and
no such injunction, judgment, order, decree, ruling, or charge shall be in effect);

 

(d)
No material adverse change shall have taken place with respect to the Buyer, and no event shall have occurred that results in
a Material Adverse Effect;

 

(e)
Buyer shall have delivered to the Seller a certificate to the effect that each of the conditions specified above in Sections 5.2(a)
- (d) has been complied with in all respects; and

 

(f)
All actions to be taken by the Buyer in connection with consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the transactions contemplated hereby will be reasonably satisfactory
in form and substance to Seller.

 

6.
Closing; Closing Date. A closing (the “Closing”) of the transactions contemplated hereby will
take place at the offices of Buyer within three (3) business days following the satisfaction of the Closing conditions described
in Section 5 herein (the “Closing Date”) or at such other place, and on such other date, as the parties
may agree in writing.

 

    	8 

    	 

    

 

7.
Documents to be Delivered at the Closing.

 

7.1
Documents to be Delivered by Seller. At the Closing, the Seller shall deliver, or cause to be delivered, to Buyer the following:

 

(a)
a duly executed bill of sale, dated the Closing Date, transferring to Buyer all of Seller’s right, title and interest in
and to the Assets together with possession of the Assets;

 

(b)
a duly executed assignment, transferring to Buyer all of Seller’s right, title and interest in and to the contracts, agreements,
contract rights and Intellectual Property included in the Assets, accompanied by any third party consents as may be required;

 

(c)
the certificate required by Section 5.1(e) above;

 

(d)
a duly executed agreement modifying the License Agreement pursuant to which the Buyer was granted an exclusive license for the
U.S. Patent App No. 14/629/279, subsequently granted U.S. Patent No. 9,283,180, limiting the Buyer’s rights under the License
Agreement to the fields and applications of tobacco, hemp-CBD, cannabis, nicotine, reduced tobacco risk and smoking cessation;

 

(e)
a duly executed agreement modifying the License Agreement pursuant to which the Buyer was granted an exclusive license for the
U.S. Patent App No. 13/453,939, subsequently granted U.S. Patent No. 9,399,110, limiting the Buyer’s rights under the License
Agreement to the fields and applications of tobacco, nicotine, hemp-CBD, cannabis, reduced tobacco risk and smoking cessation;

 

(f)
a duly executed exclusive license to the Buyer from the Seller for the U.S. Device Patents;

 

(g)
duly executed exclusive licenses from the Seller to the Buyer for the International Device Patents and Patent Applications; and

 

(h)
such other certificates, documents and instruments as Buyer may have reasonably requested in connection with the transaction contemplated
hereby.

 

7.2
Documents to be Delivered by Buyer. At the Closing, Buyer shall deliver to Seller the following:

 

(a)
the certificate required by Section 5.2(e);

 

(b)
a letter authorizing the Buyer’s transfer agent to issue shares of Buyer’s Common Stock the Seller’s account;

 

(c)
a duly executed addendum to the License Agreement pursuant to which the Buyer was granted an exclusive license for the U.S. Patent
App No. 14/629/279, subsequently granted U.S. Patent No. 9,283,180, limiting the Buyer’s rights under the License Agreement
to the fields and applications of tobacco, hemp-CBD, cannabis, nicotine, reduced tobacco risk and smoking cessation;

 

(d)
a duly executed addendum to the License Agreement pursuant to which the Buyer was granted an exclusive license for the U.S. Patent
App No. 13/453,939, subsequently granted U.S. Patent No. 9,399,110, limiting Buyer’s rights under this License Agreement
to the fields and applications of tobacco, nicotine, hemp-CBD, cannabis, reduced tobacco risk and smoking cessation;

 

(e)
duly executed exclusive licenses from the Buyer to the Seller for the U.S. Device Patents;

 

(f)
duly executed exclusive licenses from the Buyer to the Seller for the International Device Patents and Patent Applications; and

 

    	9 

    	 

    

 

(g)
such other certificates, documents and instruments as Seller may have reasonably requested in connection with the transaction
contemplated hereby.

 

8.
Further Assurances. If, at any time after the Closing, the parties shall consider or be advised that any further deeds,
assignments or assurances in law or that any other things are necessary, desirable or proper to complete the transactions contemplated
hereby in accordance with the terms of this agreement or to vest, perfect or confirm, of record or otherwise, the title to any
property or rights of the parties hereto, the parties agree that their proper officers and directors shall execute and deliver
all such proper deeds, assignments and assurances in law and do all things necessary, desirable or proper to vest, perfect or
confirm title to such property or rights and otherwise to carry out the purpose of this Agreement, and that the proper officers
and directors the parties are fully authorized to take any and all such action.

 

9.
Indemnification and Related Matters.

 

9.1
Indemnification by Seller. The Seller hereby indemnifies and holds each of Buyer harmless from and against any and all
damages, losses, Liabilities, obligations, costs or expenses incurred by Buyer and arising out of the breach of any representation
or warranty of Seller hereunder, and/or Seller’s failure to perform any covenant or obligation required to be performed
by it hereunder.

 

9.2
Indemnification by Buyer. Buyer hereby indemnify and hold Seller harmless from and against any and all damages, losses,
Liabilities, obligations, costs or expenses incurred by Seller arising out of the breach of any representation or warranty of
Buyer hereunder, and/or Buyer’s failure to perform any covenant or obligation required to be performed by it hereunder.

 

9.3
Procedure for Indemnification. Any party entitled to indemnification under this Section 9 (an “Indemnified
Party”) will give written notice to the indemnifying party of any matters giving rise to a claim for indemnification;
provided, that the failure of any party entitled to indemnification hereunder to give notice as provided herein shall not relieve
the indemnifying party of its obligations under this Section 9 except to the extent that the indemnifying party is actually prejudiced
by such failure to give notice. In case any action, proceeding or claim is brought against an Indemnified Party in respect of
which indemnification is sought hereunder, the indemnifying party shall be entitled to participate in and, unless in the reasonable
judgment of counsel to the Indemnified Party a conflict of interest between it and the indemnifying party may exist with respect
of such action, proceeding or claim, to assume the defense thereof with counsel reasonably satisfactory to the Indemnified Party.
In the event that the indemnifying party advises an Indemnified Party that it will contest such a claim for indemnification hereunder,
or fails, within 30 days of receipt of any indemnification notice to notify, in writing, such person of its election to defend,
settle or compromise, at its sole cost and expense, any action, proceeding or claim (or discontinues its defense at any time after
it commences such defense), then the Indemnified Party may, at its option, defend, settle or otherwise compromise or pay such
action or claim. In any event, unless and until the indemnifying party elects in writing to assume and does so assume the defense
of any such claim, proceeding or action, the Indemnified Party’s costs and expenses arising out of the defense, settlement
or compromise of any such action, claim or proceeding shall be losses subject to indemnification hereunder. The Indemnified Party
shall cooperate fully with the indemnifying party in connection with any settlement negotiations or defense of any such action
or claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the Indemnified
Party, which relates to such action or claim. The indemnifying party shall keep the Indemnified Party fully apprised at all times
as to the status of the defense or any settlement negotiations with respect thereto. If the indemnifying party elects to defend
any such action or claim, then the Indemnified Party shall be entitled to participate in such defense with counsel of its choice
at its sole cost and expense. The indemnifying party shall not be liable for any settlement of any action, claim or proceeding
affected without its prior written consent. Notwithstanding anything in this Section 9 to the contrary, the indemnifying party
shall not, without the Indemnified Party’s prior written consent, settle or compromise any claim or consent to entry of
any judgment in respect thereof which imposes any future obligation on the Indemnified Party or which does not include, as an
unconditional term thereof, the giving by the claimant or the plaintiff to the Indemnified Party of a release from all liability
in respect of such claim. The indemnity agreements contained herein shall be in addition to (a) any cause of action or similar
rights of the Indemnified Party against the indemnifying party or others, and (b) any liabilities the indemnifying party may be
subject to.

 

    	10 

    	 

    

 

9.4
Time for Assertion. No party to this Agreement shall have any liability (for indemnification or otherwise) with respect
to any representation, warranty or covenant or obligation to be performed and complied hereunder, unless notice of any such liability
is provided on or before thirty-six (36) months from the Closing Date.

 

10.
Termination.

 

10.1
Termination by Mutual Consent. This Agreement may be terminated by mutual consent of the parties, in writing, signed by
each of the parties hereto.

 

10.2
Termination by Buyer. This Agreement may be terminated by Buyer, by written notice to Seller, in the event of a material
breach of any representation or warranty of Seller hereunder, or in the event Seller fails to perform any material covenant or
obligation required to be performed by it hereunder and such failure remains uncured for ten (10) days following such written
notice.

 

10.4
Termination by Seller. This Agreement may be terminated by Seller, by written notice to Buyer, in the event of a material
breach of any representation or warranty of Buyer hereunder, or in the event Buyer fails to perform any material covenant or obligation
required to be performed by it hereunder and such failure remains uncured for ten (10) days following such written notice.

 

10.5
Effect of Termination. Termination of this Agreement under Section 10.02, 10.03 or 10.04 hereof shall not preclude the
parties from pursuing all remedies available to them under applicable law arising by reason of such termination.

 

11.
Miscellaneous.

 

11.1
Expenses. Except as specifically set forth herein, Buyer and the Seller shall bear their own respective expenses incurred
in connection with this Agreement and in connection with all obligations required to be performed by each of them under this Agreement.

 

11.2
Entire Agreement; No Waiver. This Agreement and any instruments and agreements to be executed pursuant to this Agreement,
sets forth the entire understanding of the parties hereto with respect to its subject matter, merges and supersedes all prior
and contemporaneous understandings with respect to its subject matter and may not be waived or modified, in whole or in part,
except by a writing signed by each of the parties hereto. No waiver of any provision of this Agreement in any instance shall be
deemed to be a waiver of the same or any other provision in any other instance. Failure of any party to enforce any provision
of this Agreement shall not be construed as a waiver of its rights under such provision.

 

    	11 

    	 

    

 

11.3
Jurisdiction and Governing Law. This Agreement shall be governed and construed under and in accordance with the laws of
the State of Delaware. Each of the parties hereto expressly and irrevocably (1) agree that any legal suit, action or proceeding
arising out of or relating to this Agreement will be instituted exclusively in United States District Court for the District of
Minnesota, (2) waive any objection they may have now or hereafter to the venue of any such suit, action or proceeding, and (3)
consent to the in person jurisdiction of United States District Court for the District of Minnesota in any such suit, action or
proceeding. Each of the parties hereto further agrees to accept and acknowledge service of any and all process which may be served
in any such suit, action or proceeding in the United States District Court for the District of Minnesota and agree that service
of process upon it mailed by certified mail to its address will be deemed in every respect effective service of process upon it,
in any such suit, action or proceeding. THE PARTIES HERETO AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DOCUMENT OR AGREEMENT CONTEMPLATED HEREBY. THE PARTY PREVAILING
THEREIN SHALL BE ENTITLED TO PAYMENT FROM THE OTHER PARTY HERETO OF ALL OF ITS REASONABLE COUNSEL FEES AND DISBURSEMENTS.

 

11.4
Role of Counsel. Seller acknowledges its understanding that this Agreement was prepared at the request of Buyer by Pearlman
Law Group LLP, its counsel, and that such firm did not represent Seller in conjunction with this Agreement or any of the related
transactions. Seller, as further evidenced by its signature below, acknowledges that it has had the opportunity to obtain the
advice of independent counsel of its choosing prior to its execution of this Agreement and that it has availed itself of this
opportunity to the extent it deemed necessary and advisable.

 

11.5
Construction. Headings contained in this Agreement are for convenience only and shall not be used in the interpretation
of this Agreement. References herein to Articles, Sections and Exhibits are to the articles, sections and exhibits, respectively,
of this Agreement. As used herein, the singular includes the plural, and the masculine, feminine and neuter gender each includes
the others where the context so indicates.

 

11.6
Notices. All notices and other communications under this Agreement shall be in writing and shall be deemed given when delivered
personally (including by confirmed legible telecopier transmission) or mailed by certified mail, return receipt requested, or
by overnight mail properly receipted to the parties at the addresses set forth earlier in this Agreement or to such address as
a party may have specified by notice given to the other party pursuant to this provision.

 

11.7
Separability. In the event that any provision hereof would, under applicable law, be invalid or enforceable in any respect,
such provision shall be construed by modifying or limiting it so as to be valid and enforceable to the maximum extent compatible
with, and permissible under, applicable law. The invalidity or unenforceability of any provision of this Agreement shall not affect
the validity or enforceability of any other provision of this Agreement which shall remain in full force and effect.

 

11.8
Binding Effect; Assignment. This Agreement shall be binding upon and inure to the benefit of the parties and their respective
successors and permitted assigns. Nothing in this Agreement shall create or be deemed to create any third party beneficiary rights
in any person or entity not a party to this Agreement. No assignment of this Agreement or of any rights or obligation hereunder
may be made by either party (by operation of law or otherwise) without the prior written consent of the other and any attempted
assignment without the required consent shall be void; provided, however, that no such consent shall be required of Buyer
to assign part or all of its rights under this Agreement to one or more of its subsidiaries or affiliates.

 

11.9
Counterparts. This Agreement may be executed in counterparts, each of which shall be an original, but which together shall
constitute one and the same Agreement.

 

    	12 

    	 

    

 

	 	CQENS Technologies Inc.
	 	 	 
	 	By:	/s/
    William P. Bartkowski
	 	 	William
    P. Bartkowski, President and Chief Operating Officer
	 	 	 
	 	Chong Corporation
	 	 	 
	 	By:	/s/
    Alexander Chong
	 	 	Alexander
    Chong, Chief Executive Officer

 

    	13 

    	 

    

 

Schedule
2.1

 

ASSETS

 

1.
The assignments of all documents related to all intellectual property held by Buyer in the field of heated tobacco/heat not burn
(HnB) methods and embodiments developed by Buyer (the “CQENS System”), consisting of the following:

 

a.
the provisional patent application filed by Buyer on January 3, 2018, the non-provisional patent application filed by Buyer on
June 28, 2018 and the PCT application filed by buyer on January 3, 2019;

 

b.
All documents and files related to device and tobacco consumable development;

 

c.
All versions of prototyped embodiments, consisting of both device and tobacco consumable embodiments; and

 

d.
All files, correspondence, communication, data and test results related to the toxicology testing undertaken by Seller related
to the CQENS System.

 

2.
Exclusive licenses to Buyer from Seller in the fields and applications
of tobacco, nicotine, reduced tobacco risk and smoking cessation, for device patents assigned to Seller pursuant to U.S. Patent
No. 9,770,564 and U.S. Patent No. 9,913,950 (collectively, the “U.S. Device Patents”); and

 

3.
Exclusive licenses to Buyer from Seller in the fields and applications
of tobacco, nicotine, reduced tobacco risk and smoking cessation, for international device patents and patent applications assigned
to Seller, including those issued in the People’s Republic of China, the European Union, Japan and Hong Kong, and those
pending in Germany, France, Brazil, Canada and Korea, and divisional patents pending in the European Union and Japan (collectively,
the “International Device Patents and Patent Applications”).

 

    	1

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