THIS PROXY
IS SOLICITED ON BEHALF OF THE COMPANY’S BOARD OF DIRECTORS WHO RECOMMEND VOTING
FOR
ALL ITEMS. IT WILL BE
VOTED AS SPECIFIED. IF NOT SPECIFIED, THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED
FOR
ALL ITEMS.
___________________, 2017
|
________________________________________
|
Date
|
Signature
|
|
|
_________________________
|
________________________________________
|
No. of Shares
|
Printed Name
|
Please sign
exactly as name(s) appear on this proxy. If joint account, each joint owner should sign. If signing for a corporation or partnership
or as agent, attorney or fiduciary, indicate the capacity in which you are signing.
ADDITIONAL SIGNATURES:
|
___________________________________________
|
(if necessary)
|
Signature
|
|
|
|
________________________________________
|
|
Printed Name
|
Appendix A
NOTICE TO MEDICINE MAN TECHNOLOGIES, INC.
OF INTENT TO EXERCISE
DISSENTING SHAREHOLDER RIGHTS.
Pursuant to NRS 92A.430(c), Medicine Man
Technologies, Inc. (the “Company”) hereby provides a form of notice to those shareholders of the Company who wish to
exercise their dissenting shareholder rights. In this regard, the Company states as follows:
1. Each dissenting shareholder must have
owned his or her shares in the Company on August 12, 2016, the date on which the Company first made a public announcement of its
intent to acquire Pono Publications Ltd. and Success Nutrients, Inc.;
2. This notice, duly executed below, must
be received by the Company’s legal counsel, Andrew I. Telsey, P.C., 12835 E. Arapahoe Road, Tower 1 Penthouse #803, Englewood,
Colorado 80112, not less than thirty (30) nor more than sixty (60) days following receipt by the dissenting shareholder of the
Company’s Information Statement, of which this Notice is a part.
3. Included herewith is a copy of NRS 92A
300 to 92A500, inclusive.
4. A dissenting shareholder who is eligible
to exercise dissenting shareholder rights and who adheres to the procedures established in the Nevada Revised Statutes for dissenting
shareholders shall receive payment for his shares within thirty (30) days after receipt by the Company of the demand for payment.
Such payment shall be determined by the Company by estimating the fair value of the shares based upon the Company’s balance
sheet as of December 31, 2016, the end of its most recent fiscal year, its statement of income, changes in its statement of stockholder
equity during its previous fiscal year and the Company’s interim financial statements for the three month period ended March
31, 2017.
A dissenting shareholder should complete
the information below, sign this notice before a notary public and return a completed form as described above.
I _________________________________, hereby
elect to exercise my dissenting shareholder rights to _____________ shares of the common stock of Medicine Man Technologies, Inc.,
a Nevada corporation. In support thereof, the undersigned, being duly sworn, hereby states as follows:
1. I am the beneficial owner of ___________
shares of common stock of Medicine Man Technologies, Inc., or have been duly authorized by the beneficial owner of such shares
to act on his behalf.
2. I acquired my beneficial ownership on
or before August 12, 2016.
3. Included herewith is the certificate
representing ownership of the common shares.
EXECUTED THIS ____ day of ___________________,
2017.
|
_____________________________
(signature)
_____________________________
(print name)
_____________________________
(address)
_____________________________
|
COUNTY OF __________
|
}
|
|
} ss.
|
STATE OF _______________
|
}
|
SUBSCRIBED AND SWORN
TO BEFORE me by
this ____ day of _____________, 2017.
My Commission
Expires:
_____________________________
|
_____________________________
Notary Public
Printed Name: __________________________
|
Appendix B
NRS 92A.380 Right of stockholder to
dissent from certain corporate actions and to obtain payment for shares.
1.
Except as
otherwise provided in
NRS 92A.370
and
92A.390
and subject to the limitation in paragraph (f), any stockholder is
entitled to dissent from, and obtain payment of the fair value of the stockholder's shares in the event of any of the following
corporate actions:
(a) Consummation of a plan of merger to which the
domestic corporation is a constituent entity:
(1)
If approval by the stockholders is required for the merger by
NRS 92A.120
to
92A.160,
inclusive, or the articles
of incorporation, regardless of whether the stockholder is entitled to vote on the plan of merger; or
(2)
If the domestic corporation is a subsidiary and is merged with its parent pursuant to
NRS 92A.180.
(b) Consummation of
a plan of conversion to which the domestic corporation is a constituent entity as the corporation whose subject owner's interests
will be converted.
(c) Consummation of
a plan of exchange to which the domestic corporation is a constituent entity as the corporation whose subject owner's interests
will be acquired, if the stockholder's shares are to be acquired in the plan of exchange.
(d) Any corporate action
taken pursuant to a vote of the stockholders to the extent that the articles of incorporation, bylaws or a resolution of the board
of directors provides that voting or nonvoting stockholders are entitled to dissent and obtain payment for their shares.
(e) Accordance of full
voting rights to control shares, as defined in
NRS 78.3784,
only to the extent provided for pursuant to
NRS 78.3793.
(f) Any corporate action
not described in this subsection that will result in the stockholder receiving money or scrip instead of a fraction of a share
except where the stockholder would not be entitled to receive such payment pursuant to
NRS 78.205,78.2055
or
78.207.
A dissent pursuant to this paragraph applies only to the fraction of a share, and the stockholder is entitled only to obtain payment
of the fair value of the fraction of a share.
2. A stockholder who
is entitled to dissent and obtain payment pursuant to
NRS 92A.300
to
92A.500,
inclusive, may not challenge the corporate
action creating the entitlement unless the action is unlawful or fraudulent with respect to the stockholder or the domestic corporation.
3. Subject to the limitations
in this subsection, from and after the effective date of any corporate action described in subsection 1, no stockholder who has
exercised the right to dissent pursuant to
NRS 92A.300
to
92A.500,
inclusive, is entitled to vote his or her shares
for any purpose or to receive payment of dividends or any other distributions on shares. This subsection does not apply to dividends
or other distributions payable to stockholders on a date before the effective date of any corporate action from which the stockholder
has dissented. If a stockholder exercises the right to dissent with respect to a corporate action described in paragraph (f) of
subsection 1, the restrictions of this subsection apply only to the shares to be converted into a fraction of a share and the dividends
and distributions to those shares.
(Added to NRS by
1995,
2087;
A
2001, 1414,
3199;
2003, 3189; 2005, 2204; 2007, 2438; 2009, 1721; 2011, 2814)
NRS 92A.390 Limitations
on right of dissent: Stockholders of certain classes or series; action of stockholders not required for plan of merger.
1. There is no right
of dissent with respect to a plan of merger, conversion or exchange in favor of stockholders of any class or series which is:
(a)
A covered security under section 18(b)(1)(A) or
(B)
of the Securities Act of 1933, 15 U.S.C. § 77r(b)(1)(A)
or
(B),
as amended;
(b)
Traded in an organized market and has at least 2,000 stockholders and a market value of at least $20,000,000, exclusive
of the value of such shares held by the corporation's subsidiaries, senior executives, directors and beneficial stockholders owning
more than 10 percent of such shares; or
(c)
Issued by an open end management investment company registered with the Securities and Exchange Commission under the Investment
Company Act of 1940, 15 U.S.C. §§ 80a-1 et seq., as amended, and which may be redeemed at the option of the holder at
net asset value,
è
unless the articles of incorporation of the corporation issuing the class or series or the resolution of the board of
directors approving the plan of merger, conversion or exchange expressly provide otherwise.
2. The applicability of subsection 1 must be determined
as of:
(a)
The record date fixed to determine the stockholders entitled to receive notice of and to vote at the meeting of stockholders
to act upon the corporate action requiring dissenter's rights; or
(b)
The day before the effective date of such corporate action if there is no meeting of stockholders.
3. Subsection 1 is
not applicable and dissenter's rights are available pursuant to
NRS 92A.380
for the holders of any class or series of shares
who are required by the terms of the corporate action requiring dissenter's rights to accept for such shares anything other than
cash or shares of any class or any series of shares of any corporation, or any other proprietary interest of any other entity,
that satisfies the standards set forth in subsection 1 at the time the corporate action becomes effective.
4.
There is no right of dissent for any holders of stock of the surviving domestic corporation if the plan of merger does not
require action of the stockholders of the surviving domestic corporation under
NRS 92A.130.
5.
There is no right of dissent for any holders of stock of the parent domestic corporation if the plan of merger does not
require action of the stockholders of the parent domestic corporation under
NRS 92A.180.
(Added to NRS by
1995, 2088;
A
2009, 1722; 2013, 1285)
NRS 92A.400 Limitations
on right of dissent: Assertion as to portions only to shares registered to stockholder; assertion by beneficial stockholder.
1.
A stockholder of record may assert dissenter's rights as to fewer than all of the shares registered in his or her name only
if the stockholder of record dissents with respect to all shares of the class or series beneficially owned by any one person and
notifies the subject corporation in writing of the name and address of each person on whose behalf the stockholder of record asserts
dissenter's rights. The rights of a partial dissenter under this subsection are determined as if the shares as to which the partial
dissenter dissents and his or her other shares were registered in the names of different stockholders.
2.
A beneficial stockholder may assert dissenter's rights as to shares held on his or her behalf only if the beneficial stockholder:
(a)
Submits to the subject corporation the written consent of the stockholder of record to the dissent not later than the time
the beneficial stockholder asserts dissenter's rights; and
(b)
Does so with respect to all shares of which he or she is the beneficial stockholder or over which he or she has power to
direct the vote. (Added to NRS by
1995, 2089;
A
2009, 1723)
NRS 92A.410 Notification of stockholders regarding
right of dissent.
1.
If a proposed corporate action creating dissenter's rights is submitted to a vote at a stockholders' meeting, the notice
of the meeting must state that stockholders are, are not or may be entitled to assert dissenter's rights under
NRS 92A.300
to
92A.500,
inclusive. If the domestic corporation concludes that dissenter's rights are or may be available, a copy of
NRS 92A.300
to
92A.500,
inclusive, must accompany the meeting notice sent to those record stockholders entitled to
exercise dissenter's rights.
2.
If the corporate action creating dissenter's rights is taken by written consent of the stockholders or without a vote of
the stockholders, the domestic corporation shall notify in writing all stockholders entitled to assert dissenter's rights that
the action was taken and send them the dissenter's notice described in
NRS 92A.430.
(Added to NRS by
1995, 2089;
A
1997, 730; 2009. 1723; 2013, 1286)
NRS 92A.420 Prerequisites to demand for payment
for shares.
1. If a proposed corporate
action creating dissenter's rights is submitted to a vote at a stockholders' meeting, a stockholder who wishes to assert dissenter's
rights with respect to any class or series of shares:
(a)
Must deliver to the subject corporation, before the vote is taken, written notice of the stockholder's intent to demand
payment for his or her shares if the proposed action is effectuated; and
(b)
Must not vote, or cause or permit to be voted, any of his or her shares of such class or series in favor of the proposed
action.
2. If a proposed corporate
action creating dissenter's rights is taken by written consent of the stockholders, a stockholder who wishes to assert dissenter's
rights with respect to any class or series of shares must not consent to or approve the proposed corporate action with respect
to such class or series.
3. A stockholder who
does not satisfy the requirements of subsection 1 or 2 and
NRS 92A.400
is not entitled to payment for his or her shares
under this chapter.
(Added to NRS by
1995, 2089;
A
1999. 1631;
2005, 2204; 2009, 1723; 2013, 1286)
NRS 92A.430 Dissenter's notice: Delivery to stockholders
entitled to assert rights; contents.
1.
The subject corporation shall deliver a written dissenter's notice to all stockholders of record entitled to assert dissenter's
rights in whole or in part, and any beneficial stockholder who has previously asserted dissenter's rights pursuant to
NRS 92A.400.
2.
The dissenter's notice must be sent no later than 10 days after the effective date of the corporate action specified in
NRS 92A.380,
and must:
(a)
State where the demand for payment must be sent and where and when certificates, if any, for shares must be deposited;
(b)
Inform the holders of shares not represented by certificates to what extent the transfer of the shares will be restricted
after the demand for payment is received;
(c)
Supply a form for demanding payment that includes the date of the first announcement to the news media or to the stockholders
of the terms of the proposed action and requires that the person asserting dissenter's rights certify whether or not the person
acquired beneficial ownership of the shares before that date;
(d)
Set a date by which the subject corporation must receive the demand for payment, which may not be less than 30 nor more
than 60 days after the date the notice is delivered and state that the stockholder shall be deemed to have waived the right to
demand payment with respect to the shares unless the form is received by the subject corporation by such specified date; and
(e)
Be accompanied by a copy of
NRS 92A.300
to
92A.500,
inclusive.
(Added to NRS by
1995, 2089;
A
2005,
2205; 2009, 1724; 2013, 1286)
NRS 92A.440 Demand
for payment and deposit of certificates; loss of rights of stockholder; withdrawal from appraisal process.
1. A stockholder who
receives a dissenter's notice pursuant to
NRS 92A.430
and who wishes to exercise dissenter's rights must:
(a)
Demand payment;
(b)
Certify whether the stockholder or the beneficial owner on whose behalf he or she is dissenting, as the case may be, acquired
beneficial ownership of the shares before the date required to be set forth in the dissenter's notice for this certification; and
(c)
Deposit the stockholder's certificates, if any, in accordance with the terms of the notice.
2. If a stockholder
fails to make the certification required by paragraph (b) of subsection 1, the subject corporation may elect to treat the stockholder's
shares as after-acquired shares under
NRS 92A.470.
3. Once a stockholder
deposits that stockholder's certificates or, in the case of uncertified shares makes demand for payment, that stockholder loses
all rights as a stockholder, unless the stockholder withdraws pursuant to subsection 4.
4. A stockholder who
has complied with subsection 1 may nevertheless decline to exercise dissenter's rights and withdraw from the appraisal process
by so notifying the subject corporation in writing by the date set forth in the dissenter's notice pursuant to
NRS 92A.430.
A stockholder who fails to so withdraw from the appraisal process may not thereafter withdraw without the subject corporation's
written consent.
5. The stockholder who does not
demand payment or deposit his or her certificates where required, each by the date set forth in the dissenter's notice, is not
entitled to payment for his or her shares under this chapter. (Added to NRS by
1995, 2090;
A
1997, 730; 2003, 3189; 2009,
1724)
NRS 92A.450 Uncertificated
shares: Authority to restrict transfer after demand for payment.
The subject corporation may restrict the transfer of shares
not represented by a certificate from the date the demand for their payment is received.
(Added to NRS by
1995, 2090;
A
2009, 1725)
NRS 92A.460 Payment for shares: General requirements.
1. Except as otherwise
provided in
NRS 92A.470,
within 30 days after receipt of a demand for payment pursuant to
NRS 92A.440,
the subject
corporation shall pay in cash to each dissenter who complied with
NRS 92A.440
the amount the subject corporation estimates
to be the fair value of the dissenter's shares, plus accrued interest. The obligation of the subject corporation under this subsection
may be enforced by the district court:
(a)
Of the county where the subject corporation's principal office is located;
(b)
If the subject corporation's principal office is not located in this State, in the county in which the corporation's registered
office is located; or
(c)
At the election of any dissenter residing or having its principal or registered office in this State, of the county where
the dissenter resides or has its principal or registered office.
è
The court shall dispose of the complaint promptly.
2. The payment must be accompanied by:
(a) The subject corporation's
balance sheet as of the end of a fiscal year ending not more than 16 months before the date of payment, a statement of income
for that year, a statement of changes in the stockholders' equity for that year or, where such financial statements are not reasonably
available, then such reasonably equivalent financial information and the latest available quarterly financial statements, if any;
(b)
A statement of the subject corporation's estimate of the fair value of the shares; and
(c)
A statement of the dissenter's rights to demand payment under
NRS 92A.480
and that if any such stockholder does not
do so within the period specified, such stockholder shall be deemed to have accepted such payment in full satisfaction of the corporation's
obligations under this chapter.
(Added to NRS by
1995, 2090;
A
2007, 2704; 2009, 1725; 2013, 1287)
NRS 92A.470 Withholding
payment for shares acquired on or after date of dissenter's notice: General requirements.
1.
A subject
corporation may elect to withhold payment from a dissenter unless the dissenter was the beneficial owner of the shares before the
date set forth in the dissenter's notice as the first date of any announcement to the news media or to the stockholders of the
terms of the proposed action.
2. To the extent the
subject corporation elects to withhold payment, within 30 days after receipt of a demand for payment pursuant to
NRS 92A.440,
the subject corporation shall notify the dissenters described in subsection 1:
(a)
Of the information required by paragraph (a) of subsection 2 of
NRS 92A.460;
(b)
Of the subject corporation's estimate of fair value pursuant to paragraph (b) of subsection 2 of
NRS 92A.460;
(c)
That they may accept the subject corporation's estimate of fair value, plus interest, in full satisfaction of their demands
or demand appraisal under
NRS 92A.480;
(d)
That those stockholders who wish to accept such an offer must so notify the subject corporation of their acceptance of the
offer within 30 days after receipt of such offer; and
(e)
That those stockholders who do not satisfy the requirements for demanding appraisal under
NRS 92A.480
shall be deemed
to have accepted the subject corporation's offer.
3. Within 10 days
after receiving the stockholder's acceptance pursuant to subsection 2, the subject corporation shall pay in cash the amount offered
under paragraph (b) of subsection 2 to each stockholder who agreed to accept the subject corporation's offer in full satisfaction
of the stockholder's demand.
4. Within 40 days
after sending the notice described in subsection 2, the subject corporation shall pay in cash the amount offered under paragraph
(b) of subsection 2 to each stockholder described in paragraph (e) of subsection 2.
(Added to NRS by
1995, 2091;
A
2009, 1725; 2013, 1287)
NRS 92A.480 Dissenter's
estimate of fair value: Notification of subject corporation; demand for payment of estimate.
1.
A dissenter paid pursuant to
NRS 92A.460
who is dissatisfied with the amount of the payment may notify the subject
corporation in writing of the dissenter's own estimate of the fair value of his or her shares and the amount of interest due, and
demand payment of such estimate, less any payment pursuant to
NRS 92A.460.
A dissenter offered payment pursuant to
NRS
92A.470
who is dissatisfied with the offer may reject the offer pursuant to NRS
92A.470
and demand payment of the fair
value of his or her shares and interest due.
2.
A dissenter waives the right to demand payment pursuant to this section unless the dissenter notifies the subject corporation
of his or her demand to be paid the dissenter's stated estimate of fair value plus interest under subsection 1 in writing within
30 days after receiving the subject corporation's payment or offer of payment under
NRS 92A.460
or
92A.470
and is
entitled only to the payment made or offered.
(Added to NRS by
1995, 2091;
A
2009, 1726)
NRS 92A.490 Legal
proceeding to determine fair value: Duties of subject corporation; powers of court; rights of dissenter.
1.
If a demand for payment pursuant to
NRS 92A.480
remains unsettled, the subject corporation shall commence a proceeding
within 60 days after receiving the demand and petition the court to determine the fair value of the shares and accrued interest.
If the subject corporation does not commence the proceeding within the 60-day period, it shall pay each dissenter whose demand
remains unsettled the amount demanded by each dissenter pursuant to NRS
92A.480
plus interest.
2.
A subject corporation shall commence the proceeding in the district court of the county where its principal office is located
in this State. If the principal office of the subject corporation is not located in this State, the right to dissent arose from
a merger, conversion or exchange and the principal office of the surviving entity, resulting entity or the entity whose shares
were acquired, whichever is applicable, is located in this State, it shall commence the proceeding in the county where the principal
office of the surviving entity, resulting entity or the entity whose shares were acquired is located. In all other cases, if the
principal office of the subject corporation is not located in this State, the subject corporation shall commence the proceeding
in the district court in the county in which the corporation's registered office is located.
3.
The subject corporation shall make all dissenters, whether or not residents of Nevada, whose demands remain unsettled, parties
to the proceeding as in an action against their shares. All parties must be served with a copy of the petition. Nonresidents may
be served by registered or certified mail or by publication as provided by law.
4.
The jurisdiction of the court in which the proceeding is commenced under subsection 2 is plenary and exclusive. The court
may appoint one or more persons as appraisers to receive evidence and recommend a decision on the question of fair value. The appraisers
have the powers described in the order appointing them, or any amendment thereto. The dissenters are entitled to the same discovery
rights as parties in other civil proceedings.
5.
Each dissenter who is made a party to the proceeding is entitled to a judgment:
(a)
For the amount, if any, by which the court finds the fair value of the dissenter's shares, plus interest, exceeds the amount
paid by the subject corporation; or
(b)
For the fair value, plus accrued interest, of the dissenter's after-acquired shares for which the subject corporation
elected to withhold payment pursuant to
NRS 92A.470.
(Added to NRS by
1995, 2091;
A
2007, 2705; 2009, 1727; 2011.
2815; 2013,
1288)
NRS 92A.500 Assessment
of costs and fees in certain legal proceedings.
1.
The court
in a proceeding to determine fair value shall determine all of the costs of the proceeding, including the reasonable compensation
and expenses of any appraisers appointed by the court. The court shall assess the costs against the subject corporation, except
that the court may assess costs against all or some of the dissenters, in amounts the court finds equitable, to the extent the
court finds the dissenters acted arbitrarily, vexatiously or not in good faith in demanding payment.
2. The court may also
assess the fees and expenses of the counsel and experts for the respective parties, in amounts the court finds equitable:
(a)
Against the subject corporation and in favor of all dissenters if the court finds the subject corporation did not substantially
comply with the requirements of
NRS 92A.300
to
92A.500,
inclusive; or
(b)
Against either the subject corporation or a dissenter in favor of any other party, if the court finds that the party against
whom the fees and expenses are assessed acted arbitrarily, vexatiously or not in good faith with respect to the rights provided
by
NRS 92A.300
to
92A.500,
inclusive.
3. If the court finds
that the services of counsel for any dissenter were of substantial benefit to other dissenters similarly situated, and that the
fees for those services should not be assessed against the subject corporation, the court may award to those counsel reasonable
fees to be paid out of the amounts awarded to the dissenters who were benefited.
4. In a proceeding
commenced pursuant to
NRS 92A.460,
the court may assess the costs against the subject corporation, except that the court
may assess costs against all or some of the dissenters who are parties to the proceeding, in amounts the court finds equitable,
to the extent the court finds that such parties did not act in good faith in instituting the proceeding.
5. To the extent the
subject corporation fails to make a required payment pursuant to NRS
92A.460, 92A.470
or
92A.480,
the dissenter may
bring a cause of action directly for the amount owed and, to the extent the dissenter prevails, is entitled to recover all expenses
of the suit.
6. This section does not preclude
any party in a proceeding commenced pursuant to
NRS 92A.460
or
92A.490
from applying the provisions of
N.R.C.P.
68.
(Added to NRS by
1995, 2092;
A
2009, 1727; 2015, 2566)
Appendix
C
MERGER
AGREEMENT
BY
AND AMONG
MEDICINE
MAN TECHNOLOGIES, INC.,
MEDICINE
MAN CONSULTING INC.
and
PONO
PUBLICATIONS LTD.
AGREEMENT AND PLAN
OF MERGER (“
Agreement
”) entered into and effective as of February __, 2017 by and among MEDICINE MAN TECHNOLOGIES,
INC., a Nevada corporation (“
MMT
”), MEDICINE MAN CONSULTING INC., a Colorado corporation (the “
Merger
Sub
”) (MMT and the Merger Sub hereinafter jointly referred to as the “
MMT Companies
”) and PONO PUBLICATIONS
LTD., a Colorado corporation (the “
Company
”) (MMT, the Merger Sub and the Company hereinafter jointly referred
to as the “
Parties
”).
WHEREAS
, the
Parties hereto desire to cause the Company to merge with and into the Merger Sub, a wholly-owned subsidiary of MMT, with the Merger
Sub as the surviving corporation in such merger (the “
Merger
”) upon the terms and subject to the conditions
of this Agreement and in accordance with the Colorado Business Corporation Act (the “
CBCA
”);
WHEREAS
, the
Board of Directors of the Company has (a) determined that the Merger is advisable and is fair to and in the best interests
of the holders of its common stock, no par value per share (the “
Company Common Stock
”), and (b) approved
this Agreement, the Merger and the transactions contemplated hereby and thereby, and recommended that the holders of the Company
Common Stock adopt this Agreement and approve the Merger;
WHEREAS
, the
Board of Directors of MMT has (a) determined that the Merger is advisable and is fair to and in the best interests of the
holders of its common stock, par value $.001 per share; (b) approved this Agreement, the Merger and the transactions contemplated
hereby and thereby, and recommended that the holders of a majority of the MMT issued and outstanding Common Stock adopt this Agreement
and approve the Merger; and (iii) as the sole stockholder of the Merger Sub, has determined that the Merger is advisable and in
the best interests of Merger Sub and has adopted this Agreement and approved the Merger and the transactions contemplated hereby
and thereby;
WHEREAS
, holders
of a majority of both the Company’s issued and outstanding securities and MMT’s issued and outstanding securities have
agreed to the terms and condition contained herein and have voted their respective securities in favor of the adoption of this
Agreement and the approval of the Merger;
WHEREAS
, the
Parties hereto desire to make certain representations, warranties, covenants and agreements in respect of the Merger and to prescribe
various conditions thereto, all as hereinafter set forth; and
WHEREAS
, it
is the intention of the Parties that, for United States federal income tax purposes, (i) the Merger shall constitute a “tax-free
reorganization” within the meaning of Section 368 of the Internal Revenue Code of 1986, as amended (the “
Code
”),
and (ii) this Agreement shall constitute a “plan of reorganization” for purposes of Sections 354 and 361 of the Code.
NOW, THEREFORE
,
in consideration of the premises and the mutual representations, warranties, covenants and agreements contained herein, the Parties
hereto, intending to be legally bound, hereby agree as follows:
ARTICLE I
THE MERGER
SECTION
1.01
The Merger
Upon the terms and
subject to the conditions set forth herein and in accordance with the CBCA, at the Effective Time, the Company shall be merged
with and into the Merger Sub , whereupon the separate corporate existence of the Company shall cease and the Merger Sub shall continue
as the surviving corporation (the “
Surviving Corporation
”).
SECTION
1.02
Effective Time; Closing
As promptly as practicable
following the execution of this Agreement, immediately after the satisfaction of the condition set forth in
Article V
and
herein, the Parties hereto shall cause the Merger to be consummated by filing a statement of merger (the “
Statement of
Merger
”) with the Secretary of State of the State of Colorado, in such form as is required by and executed in accordance
with the CBCA (the “
Effective Time
”). Immediately prior to the filing of the Statement of Merger, a closing
will be held at the offices of Andrew I. Telsey, P.C., 12835 E Arapahoe Road, Tower 1 #803, Centennial, CO 80112 (the “
Closing
”),
or such other place, date and time as the Parties mutually may agree.
SECTION
1.03
Effect of the Merger
From and after the
Effective Time, all the property, rights, privileges, powers and franchises of the Company and Merger Sub shall vest in the Surviving
Corporation, and all debts, liabilities, obligations, restrictions, disabilities and duties of each of the Company and Merger Sub
shall become the debts, liabilities, obligations, restrictions, disabilities and duties of the Surviving Corporation.
SECTION
1.04
Certificate of Incorporation; By-Laws
.
(a) At or prior to
the Effective Time, the articles of incorporation of the Surviving Corporation shall be the articles of incorporation of the Surviving
Corporation until thereafter changed or amended as provided therein or by the CBCA.
(b) At or prior to
the Effective Time, the by-laws of the Surviving Corporation shall be the by-laws of the Surviving Corporation until thereafter
changed or amended as provided therein or by the CBCA.
SECTION
1.05
Directors
At the Effective Time,
Charles Haupt shall be appointed to the Board of Directors of both MMT and the MMT Sub. All other officers and directors of both
MMT and the MMT Sub shall remain in place.
SECTION
1.06
Tax Consequences
The Parties intend
that, for United States federal income tax purposes, (a) the Merger shall constitute a tax-free reorganization within the meaning
of Section 368 of the Code, and MMT, Merger Sub and the Company each shall be a party within the meaning of Section 368(b) of the
Code to such reorganization, (b) this Agreement shall constitute a “plan of reorganization” for purposes of Sections
354 and 361 of the Code, and (c) the MMT Merger Stock shall be treated as a “common stock” under Section 305 of the
Code.
ARTICLE II
MERGER OF PONO
INTO MMC; CONVERSION OF SECURITIES
SECTION 2.01
Merger
.
(a) At the Effective
Time the Company shall be merged with and into Merger Sub, which shall be the Surviving Corporation and the Company shall cease
to then exist. By virtue of the Merger and without any action on the part of the holder of any shares of Company Stock, MMT or
Merger Sub
all
shares of Company Common Stock which are issued and outstanding immediately prior to the Effective
Time, shall collectively be converted into an aggregate of Three Million Five Hundred Thousand Shares of MMT Common Stock, $.001
par value per share (the “
MMT Merger Stock
”) on a 35:1 basis equal to such aggregate number of shares of Company
Common Stock.
(b) At the Effective
Time, each share of Company Stock no longer shall be deemed outstanding and automatically shall be canceled and retired and shall
cease to exist, and each holder of a certificate representing any such shares of Company Stock shall cease to have any rights with
respect thereto.
(c) At the Effective
Time all of the assets and liabilities of the Company shall be assigned by MMT to the Merger Sub.
SECTION 2.02
Issuance
of Certificates
.
(a)
Certificates.
As soon as reasonably practicable after the Effective Time, MMT shall mail to each holder of record a certificate or certificates
(the “
Certificates
”) that immediately prior to the Effective Time evidenced outstanding shares of Company Stock
which were converted into the right to receive such holder’s ratable portion of the MMT Merger Stock instructions for use
in effecting the surrender of the Certificates in exchange for such holder’s ratable portion of the MMT Merger Stock. Upon
surrender of a Certificate for cancellation to MMT or to other agent or agents as may be appointed by MMT, together with such letter
of transmittal, duly executed, and such other documents as reasonably may be required by MMT, the holder of such Certificate shall
be entitled to receive in exchange therefore the ratable portion of the MMT Merger Stock into which the shares of Company Stock
theretofore evidenced by such Certificate shall have been converted pursuant to this Agreement, and the Certificate so surrendered
forthwith shall be canceled. In the event of a transfer of ownership of Company Stock that is not registered in the transfer records
of the Company, delivery may be made to a Person other than the Person in whose name the Certificate so surrendered is registered,
if such Certificate shall be properly endorsed or otherwise be in proper form for transfer and the Person requesting such delivery
shall pay all transfer and other Taxes required by reason of the payment to a Person other than the registered holder of such Certificate
or establish to the satisfaction of MMT that such Tax has been paid or is not applicable. Until surrendered as contemplated by
this
Section 2.02
, each Certificate shall be deemed at any time after the Effective Time to represent only the right to
receive upon such surrender the ratable portion of the MMT Merger Stock into which the shares of Company Stock theretofore evidenced
by such Certificate shall have been converted pursuant to
Section 2.01
. No interest shall be paid or accrue on any MMT Merger
Stock payable upon surrender of any Certificate.
(b)
Lost Certificates
.
If any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming
such Certificate to be lost, stolen or destroyed and, if required by MMT, the posting by such Person of an indemnity bond, in such
reasonable amount as the Surviving Corporation may direct, as collateral security against any claim that may be made against it
with respect to such Certificate, MMT shall issue in exchange for such lost, stolen or destroyed Certificate the applicable number
of shares of MMT Merger Stock.
(c)
Further
Assurances
. If, at any time after the Effective Time, the Surviving Corporation shall consider or be advised that any deeds,
bills of sale, assignments, assurances or any other actions or things are necessary or desirable to vest, perfect or confirm of
record or otherwise in the Surviving Corporation its right, title or interest in, to or under any of the rights, properties or
assets of either of the Merger Sub or the Company acquired or to be acquired by the Surviving Corporation as a result of, or in
connection with, the Merger or otherwise to carry out this Agreement, the officers of the Surviving Corporation shall be authorized
to execute and deliver, in the name and on behalf of each of the Merger Sub and the Company or otherwise, all such deeds, bills
of sale, assignments and assurances and to take and do, in such names and on such behalves or otherwise, all such other actions
and things as may be necessary or desirable to vest, perfect or confirm any and all right, title and interest in, to and under
such rights, properties or assets in the Surviving Corporation or otherwise to carry out the purposes of this Agreement.
SECTION
2.03
Stock Transfer Books
At the Effective Time,
the stock transfer books of the Company shall be closed and there shall be no further registration of transfers of shares of Company
Common Stock thereafter on the records of the Company. From and after the Effective Time, the holders of Certificates shall cease
to have any rights with respect to such shares of Company Stock, except as otherwise provided herein or by law. At or after the
Effective Time, any Certificates presented to the Surviving Corporation or MMT, for any reason shall represent only the right to
receive the applicable MMT Merger Stock, without any interest thereon.
ARTICLE III
REPRESENTATIONS, WARRANTIES
AND
COVENANTS OF THE MMT COMPANIES
As an inducement to,
and to obtain the reliance of the Company, the MMT Companies hereby represents, warrants and covenants as follows:
SECTION
3.01
Organization
MMT is a corporation
duly organized, validly existing, and in good standing under the laws of the State of Nevada. The Merger Sub is a corporation duly
organized, validly existing, and in good standing under the laws of the State of Colorado. The MMT Companies have the corporate
power and are duly authorized, qualified, franchised, and licensed under all applicable laws, regulations, ordinances, and orders
of public authorities to own all of their properties and assets and to carry on their business as it is now being conducted, including
qualification to do business as a foreign corporation in any states in which the character and location of the assets owned by
it or the nature of the business transacted by it requires qualification, except where such failure would not have a material adverse
effect on business or financial condition of either of the MMT Companies.
SECTION 3.02
Capitalization and Ownership
.
(a)
MMT Capitalization
.
As of the date hereof, the authorized capitalization of MMT consists of 90,000,000 shares of Common Stock, par value $.001 per
share, of which 10,470,944 shares are currently issued and outstanding. All of the issued and outstanding shares of MMT Common
Stock are validly issued, fully paid, and non-assessable. There are 497,143 shares of MMT Common Stock reserved for issuance
underlying conversion of outstanding convertible securities. The MMT Common Stock is not owned or held in violation of any preemptive
right of any other person or entity. There is no commitment, plan, subscription rights, or arrangement to issue, no preemptive
right to acquire, and no outstanding option, warrant, or other right calling for the issuance of, any shares of MMT Common Stock.
(b)
Assumption
of Liabilities
. Effective as of the Effective Time, the Merger Sub will absolutely, unconditionally and irrevocably assume
all obligations and liabilities of the Company that exist prior to the Closing, whether vested or contingent, accrued or unaccrued,
liquidated or unliquidated, arising out of contract, tort, statute, common law or otherwise.
SECTION 3.03
Subsidiaries
On the Effective Date
MMT shall have two wholly owned subsidiaries, Success Nutrients, Inc. and the Merger Sub. MMT does not have any other subsidiaries
and does not own, beneficially or of record, any shares of any other corporation.
SECTION 3.04
Financial Condition
MMT has delivered to
the Company MMT’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015 (“
Form 10-K
”)
and its Quarterly Reports on Form 10-Q for the periods ended March 31, 2016, June 30, 2016 and September 30, 2016 (in the aggregate,
the “
Form 10-Qs
”). Each of the Form 10-K and Form 10-Qs presents fairly and accurately the information contained
therein and does not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; each such statement of income and statement of retained earnings presents
fairly and accurately the results of operations of MMT for the period indicated; and each such statement of changes in financial
position presents fairly and accurately the information purported to be shown therein. The financial statements (including the
notes thereto) referred to in this
Section 3.04
have been prepared in accordance with United States generally accepted accounting
principles (“
GAAP
”) consistently applied throughout the periods involved are in compliance with all applicable
rules and regulations promulgated by the Securities and Exchange Commission (the “
SEC
”), are correct and complete
and are in accordance with the books and records of MMT.
SECTION 3.05
Reports
.
MMT has filed all forms,
reports and documents with the SEC required to be filed by it pursuant to the federal securities laws and SEC rules and regulations
thereunder, and all such forms, reports and documents, as amended, filed with the SEC have complied with all applicable requirements
of the federal securities laws and the SEC rules and regulations promulgated thereunder.
SECTION 3.06
Tax and Other
Liabilities
.
(a) MMT has filed
all state and federal Tax returns that it was required to file, and has paid all Taxes shown thereon as owing, except where the
failure to file Tax returns or to pay Taxes would not have a material adverse effect on the financial condition of MMT and its
subsidiaries taken as a whole.
(b) MMT has not waived
any statute of limitations in respect of any Taxes or agreed to any extension of time with respect to any Tax assessment or deficiency.
(c) MMT is
not a party to any Tax allocation or sharing agreement.
As used herein “
Taxes
”
shall include all federal, state, local or foreign taxes, including but not limited to income, gross receipts, windfall profits,
goods and services, value added, severance, property, production, sales, use, license, excise, franchise, employment, withholding
or similar taxes, together with any interest, additions or penalties with respect thereto and any interest in respect of such additions
or penalties.
SECTION 3.07
Absence of Certain
Changes or Events
Except as set forth in this Agreement or
in the Form 10-Q, since September 30, 2016:
(a) To the best of
MMT’s knowledge, there has not been (i) any adverse change in the business, operations, properties, assets, or condition
of MMT; or (ii) any damage, destruction, or loss to MMT (whether or not covered by insurance) adversely affecting the business,
operations, properties, assets, or condition of MMT;
(b) Except as disclosed
to the Company, MMT has not (i) amended its articles of incorporation or bylaws; (ii) declared or made, or agreed to declare or
make, any payment of dividends or distributions of any assets of any kind whatsoever to stockholders or purchased or redeemed,
or agreed to purchase or redeem, any of its capital stock; (iii) waived any rights of value which in the aggregate are extraordinary
or material considering the business of MMT; (iv) made any change in its method of management, operation, or accounting; (v) entered
into any other transaction; (vi) made any accrual or arrangement for payment of bonuses or special compensation of any kind or
any severance or termination pay to any present or former officer or employee; (vii) increased the rate of compensation payable
or to become payable by it to any of its officers, directors or employees or (viii) made any increase in any profit sharing, bonus,
deferred compensation, insurance, pension, retirement, or other employee benefit plan, payment, or arrangement made to, for, or
with its officers, directors, or employees; and
(c) MMT has not (i)
borrowed or agreed to borrow any funds or incurred, or become subject to, any obligation or liability (absolute or contingent);
(ii) paid any obligation or liability (absolute or contingent) other than current liabilities reflected in or shown on the most
recent MMT balance sheet; (iii) sold or transferred, or agreed to sell or transfer, any of its assets, properties, or rights (except
(A) the transactions contemplated by the Purchase Agreement, and (B) assets, properties, or rights not used or useful in its business
which, in the aggregate have a value of less than $10,000), or canceled, or agreed to cancel, any debts or claims (except debts
or claims which in the aggregate are of a value of less than $10,000); or (iv) made or permitted any amendment or termination of
any contract, agreement, or license to which it is a party if such amendment or termination is material, considering the business
of MMT.
SECTION
3.08
Issuance
The shares of MMT Common
Stock issued as consideration hereunder are duly authorized and, upon issuance in accordance with the terms hereof, shall be validly
issued, fully paid and non-assessable, free from all taxes, liens and charges with respect to the issue thereof, and shall not
be subject to preemptive rights or other similar rights of stockholders of MMT.
SECTION 3.09
Approval of Agreement
The board of directors
of MMT has authorized the execution and delivery of this Agreement and has approved the transactions contemplated hereby, and approved
the submission of this Agreement and the transactions contemplated hereby to the stockholders of MMT for their approval with the
recommendation that the transaction be accepted if it has been deemed necessary.
SECTION
3.10
Litigation and Proceedings
There are no actions,
suits, proceedings, or investigations pending or, to the best of MMT’s knowledge, threatened by or against MMT or affecting
MMT or its properties, at law or in equity, before any court or other governmental agency or instrumentality, domestic or foreign,
or before any arbitrator that would have a material adverse effect on its business. MMT does not have any knowledge of any default
on its part with respect to any judgment, order, writ, injunction, decree, award, rule, or regulation of any court, arbitrator,
or governmental agency or instrumentality or of any circumstances which, after reasonable investigation, would result in the discovery
of such a default.
SECTION 3.11
Contracts
.
(a) Except as disclosed
to the Company, there are no material contracts, agreements, franchises, license agreements, or other commitments to which MMT
is a party or by which it or any of its assets, products, or properties are bound outside of the ordinary course of business;
(b) Except as disclosed
to the Company or in its SEC reports, MMT is not a party to any oral or written (i) contract for the employment of any officer
or employee which is not terminable on 30 days or less notice; (ii) profit sharing, bonus, deferred compensation, stock option,
severance pay, pension benefit or retirement plan, agreement, or arrangement covered by Title IV of the Employee Retirement Income
Security Act, as amended; (iii) agreement, contract, or indenture relating to the borrowing of money; (iv) guaranty of any obligation,
other than one on which MMT is a primary obligor, for the borrowing of money or otherwise, excluding endorsements made for collection
and other guaranties of obligations, which, in the aggregate do not exceed more than one year or providing for payments in excess
of $10,000 in the aggregate; (vi) collective bargaining agreement; (vii) agreement with any present or former officer or partner
of MMT or (viii) contract, agreement, or other commitment involving payments by it of more than $10,000 in the aggregate.
SECTION 3.12
Material Contract
Defaults
To the best of MMT’s
knowledge, MMT is not in default under the terms of any outstanding contract, agreement, lease, or other commitment which is material
to the business, operations, properties, assets, or condition of MMT and there is no event of default in any material respect under
any such contract, agreement, lease, or other commitment in respect of which MMT has not taken adequate steps to prevent such a
default from occurring.
SECTION
3.13
No Conflict With Other Instruments
The execution of this
Agreement and the consummation of the transactions contemplated by this Agreement will not result in the breach of any term or
provision of, or constitute an event of default under, any material indenture, mortgage, deed of trust, or other material contract,
agreement, or instrument to which MMT is a party or to which any of its properties or operations are subject.
SECTION
3.14
Governmental Authorizations
To the best of MMT’s
knowledge, MMT has all licenses, franchises, permits, and other governmental authorizations that are legally required to enable
it to conduct its business in all material respects as conducted on the date hereof; except for compliance with federal and state
securities and corporation laws, as hereinafter provided, no authorization, approval, consent, or order of, or registration, declaration,
or filing with, any court or other governmental body is required in connection with the execution and delivery by MMT of this Agreement
and the consummation by MMT of the transactions contemplated hereby.
SECTION
3.15
Compliance With Laws and Regulations
To the best of MMT’s
knowledge, MMT has complied with all applicable statutes and regulations of any federal, state, or other governmental entity or
agency thereof, except to the extent that noncompliance would not materially and adversely affect the business, operations, properties,
assets, or condition of MMT or except to the extent that noncompliance would not result in the incurrence of any material liability
for MMT.
SECTION
3.16
Insurance
All the insurable properties
of MMT are insured in their full replacement value against all risks customarily insured against by persons operating similar properties
in localities where such properties are located and under valid and enforceable policies by insurers of recognized responsibility.
Such policy or policies containing substantially equivalent coverage will be outstanding on the date of consummation of the transactions
contemplated by this Agreement.
SECTION 3.17
Environmental
Matters
.
(a) To the best of MMT’s
knowledge, MMT has no liability under, and each are presently in compliance in all material respects with all Environmental Laws
applicable to MMT, its assets or business.
(b) MMT has no knowledge
of the releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, disposing,
or dumping of Hazardous Substances into the soil, surface waters, ground waters, land, stream sediments, surface of subsurface
strata, ambient air, sewer system, or any environmental medium at or from any property or asset owned, used or occupied by MMT
(
“Environmental Condition”
) in violation of any applicable Environmental Law.
SECTION
3.18
No Undisclosed Liabilities
To the best of MMT’s
knowledge, MMT has no liabilities or obligations of any nature (whether known or unknown, asserted or unasserted, absolute or contingent,
accrued or unaccrued, liquidated or unliquidated, due or to become due), including without limitation any liability for Taxes or
any obligations or liabilities of the nature or type required to be disclosed under GAAP, which are, individually or in the aggregate,
material to the business, results of operations, assets or financial condition of MMT, taken as a whole, other than such liabilities
or obligations that have been specifically disclosed in the Form 10-K or Form 10-Qs.
SECTION
3.19
Materiality
To the best of MMT’s
knowledge, no representation or warranty in this
Article III
contains any materially untrue statement of a material fact
or omits to state any material fact required to make the statements contained therein not materially misleading or materially necessary
in order to provide Company with reasonably complete information as to MMT’ business or financial condition.
ARTICLE IV
REPRESENTATIONS,
WARRANTIES AND COVENANTS OF THE COMPANY
As an inducement to,
and to obtain the reliance of MMT, the Company hereby represents, warrants and covenants as follows:
SECTION
4.01
Organization
(a) As
of the date hereof, the authorized capitalization of the Company consists of 1,000,000 shares of Common Stock, no par value per
share (the “
Pono Common Stock
”), of which 100,000 shares of Pono Common Stock are currently issued and outstanding.
All of the issued and outstanding shares of Pono Common Stock are validly issued, fully paid, and non-assessable. There are no
shares of Pono Common Stock reserved for issuance underlying conversion of outstanding Company convertible securities or outstanding
options and warrants. Pono Common Stock is not owned or held in violation of any preemptive right of any other person or entity.
There is no commitment, plan, subscription rights, or arrangement to issue, no preemptive right to acquire, and no outstanding
option, warrant, or other right calling for the issuance of, any shares of Pono Common Stock or any security or other instrument
convertible into, exercisable for, or exchangeable for Pono Common Stock.
(b) The Company has
furnished to MMT complete and correct copies of the certificate of incorporation, and bylaws of Company as in effect on the date
hereof. The execution and delivery of this Agreement do not, and the consummation of the transactions contemplated by this Agreement
in accordance with the terms hereof will not, violate any provision of such certificates of incorporation or bylaws. The Company
has taken all action required by law, its certificate of incorporation, bylaws, or otherwise to authorize the execution and delivery
of this Agreement. The Company has full power, authority, and legal right and has taken all action required by law, its incorporation
and bylaws, and otherwise to consummate the transactions herein contemplated.
SECTION 4.02
No
Conflict With Other Instruments
The execution of this
Agreement and the consummation of the transactions contemplated by this Agreement will not result in the breach of any term or
provision of, or constitute an event of default under, any material indenture, mortgage, deed of trust, or other material contract,
agreement, or instrument to which the Company is a party or to which any of its properties or operations are subject.
SECTION 4.03
Approval of Agreement
The board of directors
of the Company has authorized the execution and delivery of this Agreement and has approved the transactions contemplated hereby,
and approved the submission of this Agreement and the transactions contemplated hereby to the stockholders of the Company for their
approval with the recommendation that the transaction be accepted if it has been deemed necessary.
SECTION
4.04
Financial Condition
The Company has delivered
to MMT its unaudited financial statements through December 31, 2016 (the “
Pono Financial Statements
”). The Pono
Financial Statements presents fairly and accurately the information contained therein and does not contain an untrue statement
of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not
misleading; each such statement of income and statement of retained earnings presents fairly and accurately the results of operations
of the Company for the period indicated; and each such statement of changes in financial position presents fairly and accurately
the information purported to be shown therein. The Pono Financial Statements (including the notes thereto) referred to in this
Section 4.04
have been prepared in accordance with United States generally accepted accounting principles (“
GAAP
”),
are correct and complete and are in accordance with the books and records of the Company.
SECTION 4.05
Tax and Other
Liabilities
.
(a) The Company has
filed all state and federal Tax returns that it was required to file, and has paid all Taxes shown thereon as owing, except where
the failure to file Tax returns or to pay Taxes would not have a material adverse effect on the financial condition of the Company;
(b) the Company has
not waived any statute of limitations in respect of any Taxes or agreed to any extension of time with respect to any Tax assessment
or deficiency.
(c) the Company
is not a party to any Tax allocation or sharing agreement.
As used herein “
Taxes
”
shall include all federal, state, local or foreign taxes, including but not limited to income, gross receipts, windfall profits,
goods and services, value added, severance, property, production, sales, use, license, excise, franchise, employment, withholding
or similar taxes, together with any interest, additions or penalties with respect thereto and any interest in respect of such additions
or penalties.
SECTION 4.06
Absence of Certain
Changes or Events
Except as set forth in this Agreement, since
December 31, 2016:
(a) To the best of
the Company’s knowledge, there has not been (i) any adverse change in the business, operations, properties, assets, or condition
of the Company; or (ii) any damage, destruction, or loss to the Company (whether or not covered by insurance) adversely affecting
the business, operations, properties, assets, or condition of the Company;
(b) Except as disclosed
to MMT, the Company has not (i) amended its articles of incorporation or bylaws; (ii) declared or made, or agreed to declare or
make, any payment of dividends or distributions of any assets of any kind whatsoever to stockholders or purchased or redeemed,
or agreed to purchase or redeem, any of its capital stock; (iii) waived any rights of value which in the aggregate are extraordinary
or material considering the business of the Company; (iv) made any change in its method of management, operation, or accounting;
(v) entered into any other transaction; (vi) made any accrual or arrangement for payment of bonuses or special compensation of
any kind or any severance or termination pay to any present or former officer or employee; (vii) increased the rate of compensation
payable or to become payable by it to any of its officers, directors or employees or (viii) made any increase in any profit sharing,
bonus, deferred compensation, insurance, pension, retirement, or other employee benefit plan, payment, or arrangement made to,
for, or with its officers, directors, or employees; and
(c) the Company has
not (i) borrowed or agreed to borrow any funds or incurred, or become subject to, any obligation or liability (absolute or contingent);
(ii) paid any obligation or liability (absolute or contingent) other than current liabilities reflected in or shown on the most
recent Company balance sheet; (iii) sold or transferred, or agreed to sell or transfer, any of its assets, properties, or rights
not used or useful in its business which, in the aggregate have a value of less than $10,000), or canceled, or agreed to cancel,
any debts or claims (except debts or claims which in the aggregate are of a value of less than $10,000); or (iv) made or permitted
any amendment or termination of any contract, agreement, or license to which it is a party if such amendment or termination is
material, considering the business of the Company.
SECTION 4.07
No Undisclosed
Liabilities
To the best of the
Company’s knowledge, the Company has no liabilities or obligations of any nature (whether known or unknown, asserted or unasserted,
absolute or contingent, accrued or unaccrued, liquidated or unliquidated, due or to become due), including without limitation any
liability for Taxes or any obligations or liabilities of the nature or type required to be disclosed under GAAP, which are, individually
or in the aggregate, material to the business, results of operations, assets or financial condition of the Company
SECTION
4.08
Litigation and Proceedings
There are no actions,
suits, proceedings, or investigations pending or, to the best of the Company’s knowledge, threatened by or against the Company
or affecting the Company or its properties, at law or in equity, before any court or other governmental agency or instrumentality,
domestic or foreign, or before any arbitrator that would have a material adverse effect on its business. the Company does not have
any knowledge of any default on its part with respect to any judgment, order, writ, injunction, decree, award, rule, or regulation
of any court, arbitrator, or governmental agency or instrumentality or of any circumstances which, after reasonable investigation,
would result in the discovery of such a default.
SECTION 4.09
Contracts
.
(a) Except as disclosed
to MMT, there are no material contracts, agreements, franchises, license agreements, or other commitments to which the Company
is a party or by which it or any of its assets, products, or properties are bound outside of the ordinary course of business;
(b) Except as disclosed
to MMT, the Company is not a party to any oral or written (i) contract for the employment of any officer or employee which is not
terminable on 30 days or less notice; (ii) profit sharing, bonus, deferred compensation, stock option, severance pay, pension benefit
or retirement plan, agreement, or arrangement covered by Title IV of the Employee Retirement Income Security Act, as amended; (iii)
agreement, contract, or indenture relating to the borrowing of money; (iv) guaranty of any obligation, other than one on which
the Company is a primary obligor, for the borrowing of money or otherwise, excluding endorsements made for collection and other
guaranties of obligations, which, in the aggregate do not exceed more than one year or providing for payments in excess of $10,000
in the aggregate; (vi) collective bargaining agreement; (vii) agreement with any present or former officer or partner of the Company
or (viii) contract, agreement, or other commitment involving payments by it of more than $10,000 in the aggregate.
SECTION
4.10
Material Contract Defaults
To the best of the
Company’s knowledge, the Company is not in default under the terms of any outstanding contract, agreement, lease, or other
commitment which is material to the business, operations, properties, assets, or condition of the Company and there is no event
of default in any material respect under any such contract, agreement, lease, or other commitment in respect of which the Company
has not taken adequate steps to prevent such a default from occurring.
SECTION
4.11
No Conflict With Other Instruments
The execution of this
Agreement and the consummation of the transactions contemplated by this Agreement will not result in the breach of any term or
provision of, or constitute an event of default under, any material indenture, mortgage, deed of trust, or other material contract,
agreement, or instrument to which the Company is a party or to which any of its properties or operations are subject.
SECTION
4.12
Governmental Authorizations
To the best of the
Company’s knowledge, the Company has all licenses, franchises, permits, and other governmental authorizations that are legally
required to enable it to conduct its business in all material respects as conducted on the date hereof; except for compliance with
federal and state securities and corporation laws, as hereinafter provided, no authorization, approval, consent, or order of, or
registration, declaration, or filing with, any court or other governmental body is required in connection with the execution and
delivery by the Company of this Agreement and the consummation by the Company of the transactions contemplated hereby.
SECTION
4.13
Compliance With Laws and Regulations
To the best of the
Company’s knowledge, the Company has complied with all applicable statutes and regulations of any federal, state, or other
governmental entity or agency thereof, except to the extent that noncompliance would not materially and adversely affect the business,
operations, properties, assets, or condition of the Company or except to the extent that noncompliance would not result in the
incurrence of any material liability for the Company.
SECTION
4.14
Insurance
All the insurable properties
of the Company are insured in their full replacement value against all risks customarily insured against by persons operating similar
properties in localities where such properties are located and under valid and enforceable policies by insurers of recognized responsibility.
Such policy or policies containing substantially equivalent coverage will be outstanding on the date of consummation of the transactions
contemplated by this Agreement.
SECTION 4.15
Environmental
Matters
.
(a) To the best of
the Company’s knowledge, the Company has no liability under, and each are presently in compliance in all material respects
with all Environmental Laws applicable to the Company, its assets or business.
(b) The Company has
no knowledge of the releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching,
disposing, or dumping of Hazardous Substances into the soil, surface waters, ground waters, land, stream sediments, surface of
subsurface strata, ambient air, sewer system, or any environmental medium at or from any property or asset owned, used or occupied
by the Company (
“Environmental Condition”
) in violation of any applicable Environmental Law.
SECTION
4.16
No Undisclosed Liabilities
To the best of the
Company’s knowledge, the Company has no liabilities or obligations of any nature (whether known or unknown, asserted or unasserted,
absolute or contingent, accrued or unaccrued, liquidated or unliquidated, due or to become due), including without limitation any
liability for Taxes or any obligations or liabilities of the nature or type required to be disclosed under GAAP, which are, individually
or in the aggregate, material to the business, results of operations, assets or financial condition of the Company.
SECTION
4.17
Materiality
To the best of the
Company’s knowledge, no representation or warranty in this
Article IV
contains any materially untrue statement of
a material fact or omits to state any material fact required to make the statements contained therein not materially misleading
or materially necessary in order to provide MMT with reasonably complete information as to the Company’s business or financial
condition.
ARTICLE V
DELIVERIES AT
CLOSING
SECTION 5.01
Effective
Time.
The Effective Time
of the Merger shall be the date on which the Statement of Merger and Articles of Merger are filed with the Secretary of State for
the State of Colorado and Nevada, which shall be so filed no less than twenty (20) days following the dissemination of the MMT
Information Statement applicable hereto.
SECTION 5.02
Taking
of Necessary Action
An the Effective Time
the Parties hereto shall take all such actions as may be necessary or appropriate in order to effectuate the transactions contemplated
by this Agreement, including the following:
a. Pono shall deliver
all of its stock certificates to MMT and MMT shall cause to be issued certificates representing the Merger Stock to all of the
shareholders of Pono. If, at any time after the execution hereof, any further action is necessary or desirable to carry out the
purposes of this Agreement, to (a) vest the Merger Sub with title to 100% of the issued and outstanding shares of Company Stock,
or (b) vest the Company Stockholders with title to 100% of the issued and outstanding shares of MMT Merger Stock, the officers
and directors of Company or MMT, as the case may be, shall take such necessary or desirable action in order to effectuate the transactions
contemplated by this Agreement.
SECTION 5.03
Stock
Legends
Certificates representing
all shares of MMT Merger Stock shall bear a legend restricting transfer of the shares of MMT Merger Stock represented by such certificate
in substantially the form set forth below:
THESE SECURITIES HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE OFFERED AND SOLD ONLY IF REGISTERED PURSUANT TO THE
PROVISIONS OF THE ACT OR IF AN EXEMPTION FROM REGISTRATION THEREUNDER IS AVAILABLE, THE AVAILABILITY OF WHICH MUST BE ESTABLISHED
TO THE SATISFACTION OF THE COMPANY.
MMT shall, from time
to time, make stop transfer notations in its records to ensure compliance in connection with any proposed transfer of the shares
with the Securities Act, and all applicable state securities laws.
SECTION 5.04
Fees and Expenses
Each of the Parties
hereto shall be responsible for all of their respective fees and expenses incurred in connection with the negotiation, execution,
delivery and performance of this Agreement and the transactions contemplated hereby, including, without limitation, the professional
fees of counsel for each of the Parties incurred in connection with this Agreement.
SECTION
5.05
Closing Events
At the Closing, each
of the respective Parties hereto shall execute, acknowledge, and deliver (or shall cause to be executed, acknowledged, and delivered)
any and all certificates, opinions, financial statements, schedules, agreements, resolutions, rulings, or other instruments required
by this Agreement to be so delivered at or prior to the Closing, together with such other items as may be reasonably requested
by the Parties hereto and their respective legal counsel in order to effectuate or evidence the transactions contemplated hereby.
Deliveries at Closing shall include, without limitation, the certificates representing the MMT Merger Stock required to be delivered
at Closing pursuant to
Section 2.02
hereof.
ARTICLE VI
SPECIAL COVENANTS
AND AGREEMENTS OF THE PARTIES
SECTION 6.01
Required Filings
MT shall timely file
with the SEC any forms, statements, reports and documents required to be filed by it pursuant to the federal securities laws and
SEC rules and regulations thereunder as a result of the Merger, this Agreement or any of the transactions contemplated hereby,
and shall use its best efforts to cause all such forms, statements, reports and documents to be declared or become effective as
soon as practicable thereafter.
SECTION 6.02
Access to Properties
and Records
MMT and the Company
will each afford to the officers and authorized representatives of the other full access to the properties, books, and records
of each other as the case may be, in order that each may have full opportunity to make such reasonable investigation as it shall
desire to make of the affairs of the other, and each will furnish the other with such additional financial and operating data and
other information as to the business and properties of each other, as the case may be, as the other shall from time to time reasonably
request.
SECTION 6.03
Special
Covenants and Representations Regarding Issuance of MMT Merger Stock
The consummation of
this Agreement and the transactions herein contemplated, including the issuance of MMT Merger Stock to the Company Stockholders
as contemplated hereby, constitutes the offer and sale of securities under the Securities Act and applicable state statutes. Such
transaction shall be consummated in reliance on exemptions from the registration and prospectus delivery requirements of such statutes
which depend, inter alia, upon the circumstances under which the Company Stockholders acquire such securities. In connection with
reliance upon exemptions from the registration and prospectus delivery requirements for such transactions, at the Closing the Company
Stockholders shall deliver to MMT customary investment letters of representation.
SECTION 6.04
Third party Consents
and Certificates
MMT and the Company
agree to cooperate with each other in order to obtain any required third party consents to this Agreement and the transactions
herein and therein contemplated.
SECTION 6.05
Indemnification
Provisions
.
(a)
By Company
.
The Company hereby agrees to indemnify and hold harmless MMT and its officer, directors and shareholders, against and in respect
of any loss, claim, liability, obligation or damage suffered or incurred by MMT resulting from or arising in connection with any
misrepresentation (in this Agreement or the Memorandum), breach of warranty, or non-fulfillment of any covenant or agreement on
the part of the Company contained in this Agreement.
(b)
By MMT
.
MMT hereby agrees to indemnify and hold harmless the Company and its officer, directors and shareholders, against and in respect
of any loss, claim, liability, obligation or damage suffered or incurred by the Company resulting from or arising in connection
with any misrepresentation (in this Agreement or the Memorandum), breach of warranty, or non-fulfillment of any covenant or agreement
on the part of MMT contained in this Agreement;
(c)
Survival
of Obligation to Indemnify
. The indemnity obligations of this
Section 6.05
shall survive the Closing and the payment
of the consideration therefor for a period of one (1) year from the Closing and shall continue thereafter with respect to: (a)
matters which the party seeking indemnity hereunder shall have given the other party written notice of as provided herein prior
to one (1) year from the Closing; and (b) any claims, actions, suits, investigations or proceedings based on fraud or willful misconduct,
willful misrepresentation or willful breach of warranty.
(d)
Notice and
Procedure
. Any party claiming indemnity hereunder (hereinafter referred to as the “
Indemnified party
”)
shall give the party against whom indemnity is sought (hereinafter referred to as the “
Indemnifying party
”)
prompt written notice after obtaining knowledge of any claim or the existence of facts as to which recovery may be sought against
it in respect of which the Indemnifying party may be liable because of the indemnity provisions set forth in this
Section 6.05
.
If such claim for indemnity arises in connection with a legal action instituted by a third party (hereinafter a “
Third
Party Claim
”), the Indemnified party hereby agrees that, within ten (10) Business Days after it is served with notice
of the assertion of any Third Party Claim for which it may seek indemnity hereunder, the Indemnified party will notify the Indemnifying
party in writing of such Third Party Claim.
The Indemnifying party
shall, within ten (10) Business Days after the date that the Indemnified party gives notice of a claim (whether a Third Party Claim
or otherwise) as provided above, notify the Indemnified party whether it accepts or contests its obligation of indemnity hereunder
as claimed by the Indemnified party.
If the claim for indemnity
arises in connection with a Third Party Claim and the Indemnifying party accepts its indemnity obligation hereunder, the Indemnifying
party shall have the right, after conceding in writing its obligation of indemnity hereunder, to conduct the defense of such action
at its sole expense through counsel reasonably acceptable to the Indemnified party. The Indemnified party shall cooperate in such
defense as reasonably necessary to enable the Indemnifying party to conduct its defense, including providing the Indemnifying party
with reasonable access to such records as may be relevant to its defense. The Indemnifying party shall be entitled to settle any
such Third Party Claim without the prior written consent of the Indemnified party provided that the Indemnifying party provides
the Indemnified party with reasonable assurances that the Indemnified party will be fully indemnified by the Indemnifying party
in connection with any such Third Party Claim. The Indemnified party shall be entitled to retain its own counsel at its own expense
in connection with any Third Party Claim that the Indemnifying party has elected to defend. If the Indemnifying party accepts its
indemnity obligations hereunder in connection with a Third Party Claim but elects not to conduct the defense thereof, the Indemnified
party may defend and/or settle such Third Party Claim and shall be entitled to be indemnified for the full amount of such claim
and all costs and expenses, including attorneys’ fees, incurred in connection therewith pursuant to this
Section 6.05
.
If the claim for indemnity
arises in connection with a Third Party Claim and the Indemnifying party contests or does not accept its indemnity obligation hereunder,
the Indemnified party shall have the right to defend and/or settle such Third Party Claim and thereafter seek indemnity from the
other party pursuant to this
Section 6.06
;
provided
,
however
, that the Indemnified party shall not settle
any such claim without the prior written consent of the Indemnifying party, which consent shall not be unreasonably withheld.
If the claim for indemnity
arises other than in connection with a Third Party Claim and the Indemnifying party accepts its indemnity obligation hereunder,
the Indemnifying party shall, upon the request of the Indemnified party, pay the full amount of such claim to the Indemnified party
or to the third party asserting such claim as directed by the Indemnified party. If the claim for indemnity arises other than in
connection with a Third Party Claim and the Indemnifying party contests its indemnity obligation hereunder, the Indemnified party
shall have the right to defend, settle or take any other action with respect to such claim and thereafter seek indemnity pursuant
to this
Section 6.05
;
provided
,
however
, that the Indemnified party shall not settle any such claim without
the prior written consent of the Indemnifying party, which consent shall not be unreasonably withheld.
ARTICLE
VII
RESOLUTION
OF DISPUTES
Any controversy, dispute
or claim arising out of or relating to this Agreement, or involving the Parties hereto, shall be resolved by binding arbitration
before a retired judge at JAMS in the City and County of Denver, Colorado. The prevailing party shall be awarded its attorney’s
fees, costs and expenses.
In connection with
the defense of any third party claims for which claims for indemnification have been made hereunder, each party will provide reasonable
access to its and the Company’s books and records as and to the extent required for the proper defense of such third party
claim. Neither party shall consent to any settlement or purport to bind any other party to any settlement without the written consent
of the other party.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01
No Brokers
MMT and the Company
each agree that there are no other finders or brokers involved in bringing the Parties together or who were instrumental in the
negotiation, execution, or consummation of this Agreement. The Parties hereto each agree to indemnify the other against any claim
by any third person for any commission, brokerage, or finders’ fee arising from the transactions contemplated hereby based
on any alleged agreement or understanding between the indemnifying party and such third person, whether express or implied from
the actions of the indemnifying party.
SECTION
8.02
Notices
Any notice, demand,
request, offer, consent, approval or communications (collectively, a “
Notice
”) to be provided under this Agreement
shall be in writing and sent by one of the following methods: (i) postage prepaid, United States certified or registered mail with
a return receipt requested, addressed to a Party, as appropriate, at the addresses set forth below; (ii) overnight delivery with
a nationally recognized and reputable air courier (with electronic tracking requested) addressed to the appropriate Party at the
addresses set forth below; (iii) personal delivery to the appropriate Party at the addresses set forth below; or (iv) by confirmed
electronic, facsimile or telecopier transmission to a Party, as appropriate, at the address or numbers set forth below which shall
also be contemporaneously sent by one of the methods described in the preceding clause (i), (ii) or (iii) of this
Section
(it being understood and agreed, however, that such Notice shall be deemed received upon receipt of electronic transmission). Any
such Notice shall be deemed given upon receipt thereof, or, in case of any Notice sent pursuant to clause (i), (ii) or (iii) above,
the refusal thereof by the intended receipt. Notwithstanding the foregoing, in the event any Notice is sent by overnight delivery
or personal delivery and it is received (or delivery is attempted) during non-business hours (
i.e.
, other than during 8:30
a.m. to 5:30 p.m. MST, Monday through Friday, excluding holidays), then such Notice shall not be deemed to have been received until
the next Business Day. Either party may designate a different address for receiving Notices hereunder by notice to the other party
in accordance with the provisions of this
Section
. Further notwithstanding the foregoing, if any Notice is sent by either
party hereto to the other and such Notice has not been sent in compliance with this
Section
but has in fact actually been
received by the other party, then such Notice shall be deemed to have been duly given by the sending party and received by the
recipient party effective as of such date of actual receipt.
If to MMT or MMC:
|
Medicine Man Technologies, Inc.
4880 Havana Street, Suite 102 South
Denver, Colorado 80239
Attn: Andrew Williams, President
|
|
|
With a copy to:
|
Andrew I. Telsey, P.C.
12835 E. Arapahoe Road
Tower 1 #803
Centennial, Colorado 80112
|
|
|
If to Company:
|
Mr. Joshua Haupt
6660 East 47
th
Ave
Denver, CO 80216
|
|
|
With a copy to:
|
Douglas J. Becker, Esq.
Otten Johnson Robinson Neff + Ragonetti PC
Suite 1600
950 17
th
St.
Denver, CO 80202
|
Notwithstanding anything
in this
Section
to the contrary, any Notice delivered in accordance herewith to the last designated address of any person
or party to which a Notice may be or is required to be delivered pursuant to this Agreement shall not be deemed ineffective if
actual delivery cannot be made due to a change of address of the person or party to which the Notice is directed or the failure
or refusal of such person or party to accept delivery of the Notice.
SECTION
8.03
No Third-Party Beneficiaries
This Agreement is not
intended to confer upon any person, other than the Parties hereto, any rights or remedies hereunder.
SECTION
8.04
Amendment; Waiver
This Agreement may
not be modified, amended, supplemented, canceled or discharged, except by written instrument executed by all Parties. No failure
to exercise, and no delay in exercising, any right, power or privilege under this Agreement shall operate as a waiver, nor shall
any single or partial exercise of any right, power or privilege hereunder preclude the exercise of any other right, power or privilege.
No waiver of any breach of any provision shall be deemed to be a waiver of any preceding or succeeding breach of the same or any
other provision, nor shall any waiver be implied from any course of dealing between the Parties. No extension of time for performance
of any obligations or other acts hereunder or under any other agreement shall be deemed to be an extension of the time for performance
of any other obligations or any other acts. The rights and remedies of the Parties under this Agreement are in addition to all
other rights and remedies, at law or equity, that they may have against each other except as may be specifically limited herein.
SECTION
8.05
Rules of Interpretation
Except as otherwise
expressly provided in this Agreement, the following rules shall apply hereto: (i) the singular includes the plural and plural includes
the singular; (ii) “or” is not exclusive and “include” and “including” are not limiting; (iii)
a reference to any agreement or other contract includes any permitted supplements and amendments; (iv) a reference in this Agreement
to a section or exhibit is a reference to a section or exhibit within or attached to this Agreement unless otherwise expressly
provided; (v) a reference to a section or paragraph in this Agreement shall, unless the context clearly indicates to the contrary,
refer to all sub-parts or sub-components of any said section or paragraph; (vi) words such as “hereunder,” “hereto,”
“hereof,” and “herein,” and other words of like import shall, unless the context clearly indicates to the
contrary, refer to the whole of this Agreement and not to any particular clause hereof; (vii) the headings of the articles or sections
and the ordering or position thereof are for convenience only and shall not in any way be deemed to affect the meaning of this
Agreement; (viii) a reference in this Agreement to a “person” or “party” (whether in the singular or the
plural) shall (unless otherwise indicated herein) include both natural persons and unnatural persons (including, but not limited
to, corporations, partnerships, limited liability companies or partnerships, trusts,
etc.
); (ix) all accounting terms not
otherwise defined herein shall have the meanings assigned to them in accordance with GAAP; and (x) any reference in this Agreement
to a “
Business Day
” shall include each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on
which national banks in the United States are closed.
SECTION
8.06
Construction
The Parties agree and
acknowledge that they have jointly participated in the negotiation and drafting of this Agreement and that this Agreement has been
fully reviewed and negotiated by the Parties and their respective counsel. In the event of an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumptions or burdens of
proof shall arise favoring any party by virtue of the authorship of any of the provisions of this Agreement. Any reference to any
federal, state, local, or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder,
unless the context requires otherwise. If any party has breached any representation, warranty, or covenant contained herein in
any respect, the fact that there exists another representation, warranty, or covenant relating to the same subject matter (regardless
of the relative levels of specificity) which the party has not breached shall not detract from or mitigate the fact that the party
is in breach of the first representation, warranty, or covenant. The mere listing (or inclusion of copy) of a document or other
item shall not be deemed adequate to disclose an exception to a representation or warranty made herein (unless the representation
or warranty relates solely to the existence of the document or other items itself).
SECTION
8.07
Governing Law and Waiver of Jury Trial
This Agreement is made
in and shall be governed by the laws of the State of California, and the sole and exclusive venue for any action relating to or
arising out of this Agreement shall be the City and County of Denver, Colorado. The Parties hereto expressly waive any claim or
defense therein that such courts constitute an inconvenient forum. The Parties hereto expressly waive all rights to trial by jury
regarding all matters or disputes arising out of or related to this Agreement. In no event shall any party be liable for any indirect,
special, exemplary, punitive or consequential damages arising out of or relating to this Agreement
.
SECTION
8.08
Severability
If any clause or provision
of this Agreement is illegal, invalid or unenforceable under applicable present or future laws effective during the term of this
Agreement, the remainder of this Agreement shall not be affected. In lieu of each clause or provision of this Agreement that is
illegal, invalid or unenforceable, there shall be added as a part of this Agreement a clause or provision as nearly identical as
may be possible and as may be legal, valid and enforceable. In the event any clause or provision of this Agreement is illegal,
invalid or unenforceable as aforesaid and the effect of such illegality, invalidity or unenforceability is that either party no
longer has the substantial benefit of its bargain under this Agreement and a clause or provision as nearly identical as may be
possible cannot be added, then, in such event, such party may in its discretion cancel and terminate this Agreement provided such
party exercises such right within a reasonable time after such occurrence.
SECTION
8.09
Arm’s Length Negotiations
Each Party herein expressly
represents and warrants to all other Parties hereto that (a) before executing this Agreement, said party has fully informed itself
of the terms, contents, conditions and effects of this Agreement; (b) said party has relied solely and completely upon its own
judgment in executing this Agreement; (c) said party has had the opportunity to seek and has obtained the advice of counsel before
executing this Agreement; (d) said party has acted voluntarily and of its own free will in executing this Agreement; (e) said party
is not acting under duress, whether economic or physical, in executing this Agreement; and (f) this Agreement is the result of
arm’s length negotiations conducted by and among the Parties and their respective counsel.
SECTION
8.10
Tax-Free Nature of Transaction
Each of the Parties
shall use its best efforts to cause the Merger to constitute a “tax-free reorganization” within the meaning of Section
368 of the Code, and none of the Parties shall knowingly take or cause to be taken any action that, or knowingly fail to take or
cause not to be taken any action the failure of which, would reasonably be expected to adversely affect the foregoing qualifications
under the Code. Except as otherwise required by applicable law, following the Effective Time, each party agrees to file its Tax
Returns in a manner that is consistent with this
Section 8.11
.
SECTION
8.11
Binding Effect; Assignment
The rights and obligations
of this Agreement shall bind and inure to the benefit of the Parties and their respective successors and assigns. Nothing expressed
or implied herein shall be construed to give any other person any legal or equitable rights hereunder. The rights and obligations
of this Agreement may not be assigned without the prior written consent of the other party which may be granted or withheld in
such Parties sole and absolute discretion.
SECTION
8.12
Counterparts
For purposes of this
Agreement, a document (or signature page thereto) signed and transmitted electronically, including but not limited to by facsimile
machine or telecopier, is to be treated as an original document. The signature of any party thereon, or purposes hereof, is to
be considered as an original signature, and the document transmitted is to be considered to have the same binding effect as an
original signature on an original document. At the request of a ny party, an electronic, facsimile or telecopy document is to be
re-executed in original form by the Parties who executed the electronic, facsimile or telecopy document. No party may raise the
use of any electronic, facsimile or telecopier machine as a defense to the enforcement of this Agreement or any amendment or other
document execution in compliance with this Section/
SECTION
8.13
Entire Agreement
This Agreement (including
the exhibits and schedules attached hereto) and other documents delivered at the Closing pursuant hereto, contains the entire understanding
of the Parties in respect of its subject matter and supersedes all prior agreements and understandings (oral or written) between
or among the Parties with respect to such subject matter. The Parties agree that prior drafts of this Agreement shall not be deemed
to provide any evidence as to the meaning of any provision hereof or the intent of the Parties with respect thereto. The exhibits
and schedules constitute a part hereof as though set forth in full above. This Agreement is not intended to confer upon any person,
other than the Parties hereto, any rights or remedies hereunder.
(balance of page intentionally left blank
– signature page follows)
IN WITNESS WHEREOF
,
the Parties hereto have caused this Agreement to be executed by their respective officers, hereunto duly authorized, as of the
date first above-written.
MEDICINE MAN TECHNOLOGIES, INC.
|
MEDICINE MAN CONSULTING, INC.
|
|
|
|
|
By:
s/ Andrew Williams
|
By:
s/ Brett Roper
|
Andrew Williams, President
|
Brett
Roper, President
|
PONO PRODUCTIONS LTD.
By:
s/ Joshua Haupt
Joshua
Haupt, President
Appendix
D
SHARE EXCHANGE AGREEMENT
BY AND AMONG
MEDICINE MAN TECHNOLOGIES INC.,
SUCCESS NUTRIENTS INC.
AND
THE SHAREHOLDERS OF SUCCESS NUTRIENTS
INC.
THIS SHARE EXCHANGE
AGREEMENT (the "Agreement") is made and entered into as of February 27, 2017, by and among MEDICINE MAN TECHNOLOGIES,
INC. a Nevada corporation ("MMT"), whose principal place of business is located at 4880 Havana Street, Suite 102 South,
Denver, Colorado 80239; SUCCESS NUTRIENTS INC.,
a Colorado corporation ("SN"), with its principal place of business
located at 1850 Bassett St., No 1211, Denver, CO 80202; and all of the shareholders of SN (the “Shareholders”), jointly
and severally, who hereby agree as follows.
RECITALS
WHEREAS
, Shareholders
own all of the issued and outstanding Common Shares (as defined in Section 1.1) of SN (the “SN Shares”), which constitute
all of the issued and outstanding securities of SN as of the date hereof; and
WHEREAS
, MMT
desires to acquire all of the SN Shares from the Shareholders and the Shareholders desire to exchange their SN Shares for shares
of MMT’s common stock on the terms and conditions hereinafter set forth.
NOW, THEREFORE,
in consideration of the covenants, promises and representations set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
ARTICLE I
EXCHANGE OF SHARES
1.1
Exchange of Shares
. At
the Effective Time (as defined below), and subject to and upon the terms and conditions of this Agreement, the Shareholders agree
to exchange, sell, transfer and assign to MMT, and MMT agrees to acquire from the Shareholders, all of their SN Shares in exchange
for an aggregate of 3.5 million shares of MMT’s common stock (the “MMT Shares”). As of Closing, the SN Shares
shall constitute one hundred percent (100%) of the issued and outstanding securities of SN in the aggregate. The exchange of the
SN Shares for the MMT shares of common stock contemplated hereunder shall be referred to herein as the "Transaction."
1.2
Closing
;
Effective Time
.
(a)
The closing of the Transaction (the "Closing") shall take place at the offices of counsel to MMT, or such other location
as the parties may so agree on or before March 1, 2017, after the satisfaction or waiver of the conditions set forth in Article
VI, or at such other time, date and location as the parties hereto agree in writing (the "Closing Date" or the “Closing”).
As soon as is practicable after the Closing, the parties hereto shall cause the Transaction to be consummated by delivering to
the Secretary of State of the State of Colorado Statement of Share Exchange (the “Statement of Share Exchange”), in
such form as required by, and executed and acknowledged in accordance with, the relevant provisions of the Colorado Business Corporations
Act (“CBCA”), and delivering to the Secretary of State of the State of Nevada Articles of Exchange (the “Articles
of Exchange”), in such form as required by, and executed and acknowledged in accordance with the Nevada Revised Statutes.
The Transaction shall become effective as of the date and at such time (the “Effective Time”) as the Nevada Articles
of Exchange is filed with the Secretary of State of the State of Nevada and the Colorado Statement of Share Exchange is filed with
the Secretary of State of the State of Colorado.
(b) The Parties hereto
hereby agree that, for accounting purposes, the effective date of the Merger shall be March 1, 2017 (the “
Effective Time
”).
1.3
Delivery of Certificates
Representing the SN Shares
. On the Effective Time, the Shareholders shall deliver their certificates representing their SN
Shares, duly endorsed to MMT or accompanied by stock powers or other assignments or documents to effectuate transfer of the SN
Shares duly endorsed to MMT, with (i) all such other documents as may be required to vest in MMT good and marketable title to the
SN Shares free and clear of any and all Liens (as defined in Section 2.3 hereof), and (ii) all necessary stock transfer and any
other required documentary stamps. The Shareholders shall cause SN to recognize and record the transfers described in this Section
1.3 on its transfer books.
1.4
Issuance of Certificates
Representing the MMT Shares
. On the Effective Time, or as soon thereafter as practical, MMT shall cause the MMT Shares to be
issued to the Shareholders as provided in Section 1.1 above, pro rata to their respective ownership of the SN Shares or as the
Shareholders shall direct, so long as such direction is acceptable to legal counsel of MMT. Thirty-five (35) shares of MMT’s
common stock shall be issued for each shares of SN common stock issued and outstanding at the Effective Time. A list of the Shareholders
and their respective shares owned in SN, as well as the number of MMT Shares to be issued in the Transaction, is attached hereto
as Exhibit “B.”
The MMT Shares, when issued, shall
be “restricted” shares (as that term is defined under the Securities Act of 1933, as amended) (the “Act”)
and may not be sold, transferred or otherwise disposed of by the Shareholders without registration under the Act or an available
exemption from registration under the Act. The certificates representing the MMT Shares will contain the appropriate restrictive
legends. MMT shall cause its Transfer Agent to recognize and record the transfers described in this Section 1.4 on its transfer
books, and MMT shall issue appropriate stop-transfer instructions to the Transfer Agent with respect to the MMT Shares.
1.5
Taking of Necessary Action;
Further Action
. If, at any time after the Closing, any further action is necessary or desirable to carry out the purposes of
this Agreement and to vest MMT with full right, title and possession to the SN Shares, the Shareholders will take all such lawful
and necessary action.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SN AND
SHAREHOLDERS
SN and the Shareholders
hereby represent and warrant to their respective knowledge, and covenant with, MMT with respect to those matters set forth in this
Article II. For purposes of this Agreement, the disclosure of any matter in a schedule to this Agreement (the “Disclosure
Schedule”) shall serve as a sufficient disclosure for purposes of any and all representations and warranties in this Agreement
to which such matter logically relates and where such deemed inclusion can be reasonably inferred from the matter and shall be
deemed to modify such representation and warranty to the full extent of the disclosure. It is understood that the listing (or inclusion
of a copy) of a document or other item on the Disclosure Schedule shall be deemed adequate disclosure of the document or item and
its contents. The Seller shall make a good faith effort to list or cross reference matters on the Disclosure Schedule to which
the matter logically relates.
2.1
Ownership of Shares.
Shareholders are the record and beneficial owners of all of the issued and outstanding SN Shares.
2.2
Authority
. The Shareholders
have full power and authority and are competent to (i) execute, deliver and perform this Agreement, and each ancillary document
which Shareholders have executed or delivered or are to execute or deliver pursuant to this Agreement, and (ii) carry out Shareholders
obligations hereunder and thereunder, without the need for any Governmental Action/Filing (as defined herein). The execution, delivery
and performance by the Shareholders to this Agreement and each ancillary document does not and will not conflict with, result in
a breach of, or constitute a default or require a consent or action under, any agreement or other instrument to or by which such
Shareholders are a party or are bound or to which any of the properties or assets of the Shareholders are subject, or any Legal
Requirement (as defined herein) to which such Shareholders are subject, or result in the creation of any Lien (as defined in Section
2.3) on the Shares. This Agreement, and Shareholders ancillary document to be executed and delivered by such Shareholders at the
Closing, have been duly executed and delivered by such Shareholders (and each ancillary document to be executed and delivered by
Shareholders at or after the Closing will be duly executed and delivered by Shareholders), and this Agreement constitutes, and
each ancillary document, when executed and delivered by Shareholders will constitute such Shareholders’ legal, valid and
binding obligation, enforceable against Shareholders in accordance with its terms. For purposes of this Agreement, (x) the term
"Governmental Action/Filing" shall mean any franchise, license, certificate of compliance, authorization, consent, order,
permit, approval, consent or other action of, or any filing, registration or qualification with, any federal, state, municipal,
foreign or other governmental, administrative or judicial body, agency or authority, and (y) the term "Legal Requirements"
means any federal, state, local, municipal, foreign or other law, statute, constitution, principle of common law, resolution, ordinance,
code, edict, decree, rule, regulation, ruling or requirement issued, enacted, adopted, promulgated, implemented or otherwise put
into effect by or under the authority of any Governmental Entity (as defined in Section 2.8(b)), and all requirements set forth
in applicable Contracts (as defined in Section 2.18(a)).
2.3
Title to Shares
. The
Shareholders have and shall transfer to MMT at the Closing good and marketable title to all of their SN Shares, free and clear
of all liens, claims, charges, encumbrances, pledges, mortgages, security interests, options, rights to acquire, proxies, voting
trusts or similar agreements, restrictions on transfer (other than federal and state securities laws restrictions on transfer)
or adverse claims of any nature whatsoever ("Liens").
2.4
Acquisition of MMT Shares
for Investment
.
(a) The Shareholders are acquiring
the MMT Shares to be issued to them for investment for Shareholders own account and not as a nominee or agent, and not with a view
to the resale or distribution of any part thereof, and neither Shareholder has any present intention of selling, granting any participation
in, or otherwise distributing the same. Each Shareholder further represents that he/she does not have any contract, undertaking,
agreement or arrangement with any person to sell, transfer or grant participation to such person or to any third person, with respect
to any of the MMT Shares.
(b) The Shareholders understand
that the MMT Shares are not and will not be registered under the Securities Act, that the sale and the issuance of the MMT Shares
is intended to be exempt from registration under the Act pursuant to Section 4(2) thereof, and that MMT's reliance on such exemption
is predicated on each Shareholders’ representations set forth herein. The Shareholders represent and warrant that: (i) he
or she can bear the economic risk of their investment, and (ii) he or she possesses such knowledge and experience in financial
and business matters that they are capable of evaluating the merits and risks of the investment in the MMT Shares.
(c) The Shareholders acknowledge
that neither the US Securities and Exchange Commission, nor the securities regulatory body of any state or other nation has received,
considered or passed upon the accuracy or adequacy of the information and representations made in this Agreement.
(d) The Shareholders acknowledge
that they have carefully reviewed such information as they deemed necessary to evaluate an investment in the MMT Shares. To their
full satisfaction the Shareholders have been furnished all materials requested relating to MMT and the issuance of the MMT Shares
hereunder, and the Shareholders has been afforded the opportunity to ask questions of MMT's representatives to obtain any information
necessary to verify the accuracy of any representations or information made or given to the Shareholders. Notwithstanding the foregoing,
nothing herein shall derogate from or otherwise modify the representations and warranties of MMT set forth in this Agreement, on
which the Shareholders have relied in making an exchange of their Shares for the MMT Shares.
(e) The Shareholders understand
that the MMT Shares may not be sold, transferred, or otherwise disposed of without registration under the Act or an exemption therefrom,
and that in the absence of an effective registration statement covering the MMT Shares or any available exemption from registration
under the Act, the MMT Shares must be held indefinitely. Shareholders further acknowledge that the MMT Shares may not be sold pursuant
to Rule 144 promulgated under the Securities Act unless all of the conditions of Rule 144 are satisfied, or the MMT Shares have
been registered with the US Securities and Exchange Commission.
2.5
Organization and Qualification
of SN
.
(a) SN is a corporation duly organized,
validly existing and in good standing under the laws of Colorado and has the requisite power and authority to own, lease and operate
its assets and properties and to carry on its business as it is now being or currently planned by SN to be conducted. SN is in
possession of all franchises, grants, authorizations, licenses, permits, easements, consents, certificates, approvals and orders
("Approvals") necessary to own, lease and operate the properties it purports to own, operate or lease and to carry on
its business as it is now being or currently planned by SN to be conducted, except where the failure to have such Approvals could
not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect (as defined in Section 8.2(b))
on SN. Complete and correct copies of the Articles of Incorporation, Bylaws and all corporate minutes (or other comparable governing
instruments with different names) (collectively referred to herein as "Charter Documents") of SN, as amended and currently
in effect, are attached hereto as Schedule 2.5. SN is not in violation of any of the provisions of its Charter Documents.
(b) SN is duly qualified or licensed
to do business as a foreign corporation and is in good standing in each jurisdiction where the character of the properties owned,
leased or operated by it or the nature of its activities makes such qualification or licensing necessary, except for such failures
to be so duly qualified or licensed and in good standing that could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect on SN.
(c) The minute books of SN contain
true, complete and accurate records of all meetings and consents in lieu of meetings of its Board of Directors (and any committees
thereof), similar governing bodies and Shareholders ("Corporate Records") since the time of SN's organization. Copies
of such Corporate Records of SN have been heretofore delivered to MMT.
(d) The transfer records of SN contain
true, complete and accurate records of Shareholders transfers involving the SN Shares ("Shareholders Records") of SN
since the time of SN's organization.
2.6
Subsidiaries
. SN has
no subsidiary companies. SN does not own, directly or indirectly, any other ownership, equity, profits or voting interest in any
other entity or Person or has any agreement or commitment to purchase any such interest, and SN has not agreed and is not obligated
to make nor is bound by any written, oral or other agreement, contract, subcontract, lease, binding understanding, instrument,
note, option, warranty, purchase order, license, sublicense, insurance policy, benefit plan, commitment or undertaking of any nature,
as of the date hereof or any date hereafter, under which it may be obligated to make any future investment in or capital contribution
to any other entity or Person.
For purposes of this Agreement,
(i) the term "Subsidiary" shall mean any entity in which SN, directly or indirectly, owns beneficially securities or
interests representing 50% or more of (x) the aggregate equity or profit interests, or (y) the combined voting power of voting
interests ordinarily entitled to vote for management or otherwise, and (ii) the term "Person" shall mean and include
an individual, a corporation, a partnership (general or limited), a joint venture, an association, a trust or any other organization
or entity, including a government or political subdivision or an agency or instrumentality thereof.
2.7
Capitalization of SN
.
(a) All issued and outstanding SN
shares are legally issued, fully paid and non-assessable, and are not issued in violation of the preemptive or other rights of
any person.
(b) There are no equity securities,
partnership interests or similar ownership interests of any class of any equity security of SN, or any securities exchangeable
or convertible into or exercisable for such equity securities, partnership interests or similar ownership interests, issued, reserved
for issuance or outstanding. There are no subscriptions, options, warrants, equity securities, partnership interests or similar
ownership interests, calls, rights (including preemptive rights), commitments or agreements of any character to which SN is a party
or by which it is bound obligating SN to issue, deliver or sell, or cause to be issued, delivered or sold, or repurchase, redeem
or otherwise acquire, or cause the repurchase, redemption or acquisition of, any Shares or similar ownership interests of SN or
obligating SN to grant, extend, accelerate the vesting of or enter into any such subscription, option, warrant, equity security,
call, right, commitment or agreement.
(c) There are no registration rights,
and there is no voting trust, proxy, rights plan, anti-takeover plan or other agreement or understanding to which SN is a party
or by which SN is bound with respect to any equity security of any class of SN.
2.8
No Conflict; Required Filings
and Consents
.
(a) The execution and delivery of
this Agreement by the Shareholders does not, and the performance of this Agreement by the Shareholders shall not, (i) conflict
with or violate SN's Charter Documents, (ii) subject to obtaining the adoption of this Agreement and the Transaction by the Shareholders,
conflict with or violate any Legal Requirements, or (iii) result in any breach of or constitute a default (or an event that with
notice or lapse of time or both would become a default) under, or materially impair SN's rights or alter the rights or obligations
of any third party under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in
the creation of a lien or encumbrance on any of the properties or assets of SN pursuant to, any Contracts, except, with respect
to clauses (ii) or (iii), for any such conflicts, violations, breaches, defaults or other occurrences that would not, individually
and in the aggregate, have a Material Adverse Effect on SN.
(b) The execution and delivery of
this Agreement by the Shareholders does not, and the performance of their obligations hereunder will not, require any consent,
approval, authorization or permit of, or filing with or notification to, any court, administrative agency, commission, governmental
or regulatory authority, self-regulatory organization, domestic or foreign (a "Governmental Entity"), except (i) for
applicable requirements, if any, of the Act, the Securities Exchange Act of 1934, as amended (the "Exchange Act"), state
securities laws ("Blue Sky Laws"), and the rules and regulations thereunder, and appropriate documents with the relevant
authorities of other jurisdictions in which SN is qualified to do business, (ii) consents, approvals, authorizations, permits,
filings and notices to be obtained or made prior to Closing, and (iii) where the failure to obtain such consents, approvals, authorizations
or permits, or to make such filings or notifications, would not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect on SN or, after the Closing, MMT, or prevent consummation of the Transaction or otherwise prevent the
parties hereto from performing their obligations under this Agreement.
2.9
Compliance
. SN has complied
with, is not in violation of, any Legal Requirements with respect to the conduct of its business, or the ownership or operation
of its business, except for failures to comply or violations that, individually or in the aggregate, have not had and are not reasonably
likely to have a Material Adverse Effect on SN. The businesses and activities of SN have not been and are not being conducted in
violation of any Legal Requirements. SN is not in default or violation of any term, condition or provision of any applicable Charter
Documents or Contracts. Neither SN nor the Shareholders have received any notice of non-compliance with any Legal Requirement (and
the Shareholders have no Knowledge of any such notice delivered to any other Person). The Shareholders are not in violation of
any term of any contract or covenant (either with SN or another entity) relating to employment, patents, proprietary information
disclosure, non-competition or non-solicitation.
2.10
Financial Statements of
SN
.
(a) SN has delivered
to MMT copies of its unaudited financial statements for the period from its inception through December 31, 2016. The SN Financial
Statements present fairly the financial condition and results of operations of SN at the dates and for the periods covered by the
SN Financial Statements. SN represents and warrants that there has been no material adverse change in the financial condition of
SN subsequent to December 31, 2016.
(b) The SN Financial
Statements and any notes related thereto comply as to form in all material respects with applicable accounting requirements, have
been prepared in accordance with United States generally accepted accounting principles (“
GAAP
”) applied on
a consistent basis throughout the periods involved (except as may be indicated in the notes thereto) and fairly present in all
material respects (subject, in the case of the unaudited interim financial statements, to normal, recurring year-end adjustments
none of which are or will be material in amount, individually or in the aggregate) the consolidated financial position of SN as
at the dates thereof and the consolidated results of their operations and cash flows for the periods then ended.
(c) SN does not have
any direct or indirect liabilities that were not fully and adequately reflected or reserved against on the balance sheet or described
in the notes to the audited financial statements of SN. SN has no Knowledge of any circumstance, condition, event or arrangement
that has taken place at any time that may hereafter give rise to any liabilities.
2.11
No Undisclosed Liabilities
.
SN has no liabilities (absolute, accrued, contingent or otherwise) of a nature required to be disclosed on a balance sheet which
are, individually or in the aggregate, material to the business, results of operations or financial condition of SN.
2.12
Litigation
. There are
no claims, suits, actions, proceedings pending or, to Shareholders Knowledge, threatened against SN, before any court, governmental
department, commission, agency, instrumentality or authority, or any arbitrator that seeks to restrain or enjoin the consummation
of the transactions contemplated by this Agreement or which could reasonably be expected, either singularly or in the aggregate
with all such claims, actions or proceedings, to have a Material Adverse Effect on SN or have a Material Adverse Effect on the
ability of the parties hereto to consummate the Transaction.
2.13
Restrictions on Business
Activities
. There is no agreement, commitment, judgment, injunction, order or decree binding upon SN or to which SN is a party
which has or could reasonably be expected to have the effect of prohibiting or materially impairing any business practice of SN,
any acquisition of property by SN or the conduct of business by SN as currently conducted other than such effects, individually
or in the aggregate, which have not had and could not reasonably be expected to have a Material Adverse Effect on SN.
2.14
Title to Property
. Other
than as described in Schedule 2.14 hereto, SN owns no other properties.
2.15
Taxes
.
(a)
Filing
of Tax Returns
. SN has timely filed, or have had timely filed on their behalf, with the appropriate Taxing authorities all
Tax Returns in respect of Taxes required to be filed by them. The Tax Returns filed (including any amendments thereof) are complete
and accurate in all material respects. SN has not requested any extension of time within which to file any Tax Return in respect
of any Taxes, which Tax Return has not since been filed in a timely manner. To the Knowledge of SN, no claim has ever been made
by any Taxing authority in a jurisdiction where SN does not file Tax Returns, or has Tax Returns filed on their behalf, that they
are or may be subject to taxation by that jurisdiction, or liable for Taxes owing to that jurisdiction.
(b)
Payment of
Taxes
. All Taxes owed by SN (whether or not shown as due on any Tax Returns) have been paid in full or adequate reserves on
their respective books and/or records have been established. SN has withheld and paid all Taxes required to have been withheld
and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder, or other third
party. SN has made all required estimated Tax payments sufficient to avoid any underpayment penalties. The unpaid Taxes of SN (A)
do not, as of the Closing Date, exceed the reserve for Tax liability (rather than any reserve for deferred Taxes established to
reflect the timing differences between book and Tax income) set forth on the face of SN’s most recent balance sheets (rather
than any notes thereto) and (B) do not exceed that reserve as adjusted for the passage of time through the Closing Date in accordance
with the past custom and practice of SN in filing, or having filed on their behalf, their Tax Returns. The charges, accruals and
reserves on the books of SN in respect of any liability for Taxes (x) based on or measured by net income for any years not finally
determined, (y) with respect to which the applicable statute of limitations has not expired or (z) that has been previously deferred,
are adequate to satisfy any assessment for such Taxes for any such years.
(c)
Audits, Investigations
or Claims
. There is no dispute or claim which has not been resolved concerning any Tax liability of SN either (A) claimed or
raised by any Taxing authority in writing or (B) as to which any of the directors and officers (and employees responsible for Tax
matters) of SN has Knowledge. There is no currently pending audit of any Tax Return of SN by any Taxing authority, and SN has not
ever been notified in writing that any Taxing authority intends to audit any Tax Return of SN. SN has not executed any outstanding
waivers or consents regarding the application of the statute of limitations with respect to any Taxes or Tax Returns.
(d)
Lien
. There
are no encumbrances for Taxes (other than for current Taxes not yet due and payable) on any assets of SN.
(e)
Tax
Elections
. SN (i) has not agreed, or are required, to make any adjustment under Section 481(a) of the Code by reason of a change
in accounting method or otherwise; (ii) have not made an election pursuant to Code Sections 338 or 336(e) or the regulations thereunder
or any comparable provisions of any foreign or state or local income tax law; (iii) is not subject to any constructive elections
under Code Section 338 or the regulations thereunder; (iv) has not made any payments, are obligated to make any payments, or are
a party to any agreement that under certain circumstances could obligate it to make any payments that will not be deductible under
§280G and §162(m) of the Code; and (v) has not made any of the foregoing elections or are required to apply any of the
foregoing rules under any comparable state or local income Tax provision.
(f)
Prior Affiliated
Groups
. SN (A) has never been a member of an affiliated group of corporations within the meaning of Section 1504 of the Code
and (B) does not have any liability for the Taxes of any person under Treas. Reg. §1502-6 (or any similar provision of state,
local or foreign law), as a transferee or successor, by contract or otherwise.
(g)
Tax Sharing
Agreements
. SN is not a party to any Tax allocation, indemnity or sharing or similar agreement.
(h)
Section 355
.
SN has not distributed the stock of a “controlled corporation” (within the meaning of that term as used in Section
355(a) of the Code) in a transaction subject to Section 355 of the Code within the past two years.
(i)
Partnerships
.
SN does not own an interest in a partnership for Tax purposes.
2.16
Brokers; Third Party Expenses
.
The Shareholders have not incurred, nor will they incur, directly or indirectly, any liability for brokerage or finders' fees or
agent's commissions or any similar charges in connection with this Agreement or any transaction contemplated hereby.
2.17
Intellectual Property
.
For the purposes of this Agreement, the following terms have the following definitions:
"Intellectual Property"
shall mean any or all of the following and all worldwide common law and statutory rights in, arising out of, or associated therewith:
(i) patents and applications therefore and all reissues, divisions, renewals, extensions, provisionals, continuations and continuations-in-part
thereof ("Patents"); (ii) inventions (whether patentable or not), invention disclosures, improvements, trade secrets,
proprietary information, know how, technology, technical data and customer lists, and all documentation relating to any of the
foregoing; (iii) copyrights, copyrights registrations and applications therefore, and all other rights corresponding thereto throughout
the world; (iv) domain names, uniform resource locators ("URLs") and other names and locators associated with the Internet
("Domain Names"); (v) industrial designs and any registrations and applications therefore; (vi) trade names, logos, common
law trademarks and service marks, trademark and service mark registrations and applications therefore (collectively, "Trademarks");
(vii) all databases and data collections and all rights therein; (viii) all moral and economic rights of authors and inventors,
however denominated, and (ix) any similar or equivalent rights to any of the foregoing (as applicable).
"Company Intellectual Property"
shall mean any Intellectual Property that is owned by, or exclusively licensed to, SN or MMT, as applicable.
"Registered Intellectual
Property"
means all Intellectual Property that is the subject of an application, certificate, filing, registration or
other document issued, filed with, or recorded by any private, state, government or other legal authority.
"Company Registered Intellectual
Property"
means all of the Registered Intellectual Property owned by, or filed in the name of, SN or MMT, as applicable.
"Company Products"
means all current versions of products or service offerings of SN or MMT, as applicable.
(a) No Company Intellectual Property
or Company Product is subject to any material proceeding or outstanding decree, order, judgment, contract, license, agreement or
stipulation restricting in any manner the use, transfer or licensing thereof by SN, or which may affect the validity, use or enforceability
of such Company Intellectual Property or Company Product, which in any such case could reasonably be expected to have a Material
Adverse Effect on SN.
(b) SN owns and has good and exclusive
title to, each material item of Company Intellectual Property owned by it free and clear of any Liens (excluding non-exclusive
licenses and related restrictions granted in the ordinary course); and SN is the exclusive owner of all material Trademarks used
in connection with the operation or conduct of the business of SN, including the sale of any products or the provision of any services
by SN.
(c) The operation of the business
of SN as such business currently is conducted, including (i) the design, development, manufacture, distribution, reproduction,
marketing or sale of the products or services of SN (including Products), and (ii) SN's use of any product, device or process,
to SN's Knowledge and except as could not reasonably be expected to have a Material Adverse Effect, has not and does not and will
not infringe or misappropriate the Intellectual Property of any third party or constitute unfair competition or trade practices
under the laws of any jurisdiction.
2.18
Agreements, Contracts and
Commitments
.
(a) Schedule 2.18 hereto sets forth
a complete and accurate list of all Material Contracts (as hereinafter defined), specifying the parties thereto. For purposes of
this Agreement:
"Contracts"
shall
mean all contracts, agreements, leases, mortgages, indentures, note, bond, liens, license, permit, franchise, purchase orders,
sales orders, arbitration awards, judgments, decrees, orders, documents, instruments, understandings and commitments, or other
instrument or obligation (including without limitation outstanding offers or proposals) of any kind, whether written or oral, to
which SN is a party or by or to which any of the properties or assets of SN may be bound, subject or affected (including without
limitation notes or other instruments payable to SN).
"Material Contracts"
shall mean (x) each Contract (I) providing for payments (past, present or future) to SN in excess of $50,000 in the aggregate or
(II) under which or in respect of which SN presently has any liability or obligation of any nature whatsoever (absolute, contingent
or otherwise) in excess of $50,000, (y) each Contract which otherwise is or may be material to the businesses, operations, assets,
condition (financial or otherwise) or prospects of SN and (z) without limitation of subclause (x) or subclause (y), each of the
following Contracts:
(i) any mortgage, indenture, note,
installment obligation or other instrument, agreement or arrangement for or relating to any borrowing of money by or from SN, any
Subsidiary, or any officer, director or 5% or more stockholder ("Insider") of SN;
(ii) any guaranty, direct or indirect,
by SN or any Insider of SN of any obligation for borrowings, or otherwise, excluding endorsements made for collection in the ordinary
course of business;
(iii) any Contract made other than
in the ordinary course of business or (x) providing for the grant to any preferential rights to purchase or lease any asset of
SN, or (y) providing for any right (exclusive or non-exclusive) to sell or distribute, or otherwise relating to the sale or distribution
of, any product or service of SN;
(iv) any obligation to register
any Shares or other securities of SN with the U.S. Securities and Exchange Commission ("SEC") or any state securities
commission or agency;
(v) any obligation to make payments,
contingent or otherwise, arising out of the prior acquisition of the business, assets or stock of other Persons;
(vi) any collective bargaining agreement
with any labor union;
(vii) any lease or similar arrangement
for the use by SN of Personal Property; and
(viii) any Contract to which any
Insider of SN is a party.
(b) Each Contract was entered into
at arms' length and in the ordinary course, is in full force and effect and is valid and binding upon and enforceable against each
of the parties thereto. True, correct and complete copies of all Material Contracts (or written summaries in the case of oral Material
Contracts) and of all outstanding offers or proposals of SN have been heretofore delivered to MMT.
(c) Neither SN nor any other party
thereto is in breach of or in default under, and no event has occurred which with notice or lapse of time or both would become
a breach of or default under, any Contract, and no party to any Contract has given any notice of any claim of any such breach,
default or event, which, individually or in the aggregate, are reasonably likely to have a Material Adverse Effect on SN. Each
Contract to which SN is a party or by which it is bound that has not expired by its terms is in full force and effect, except where
such failure to be in full force and effect is not reasonably likely to have a Material Adverse Effect on SN.
2.19
Interested Party Transactions
.
No employee, officer, director or Shareholder of SN or a Shareholder’s of his immediate family is indebted to SN, nor is
SN indebted (or committed to make loans or extend or guarantee credit) to any of them, other than (i) for payment of salary for
services rendered, (ii) reimbursement for reasonable expenses incurred on behalf of SN, and (iii) for other employee benefits made
generally available to all employees. To each Shareholders Knowledge, none of such individuals has any direct or indirect ownership
interest in any Person with whom SN is affiliated or with whom SN has a contractual relationship, or any Person that competes with
SN, except that each employee, Shareholders, officer and director of SN and Shareholders of their respective immediate families
may own less than 5% of the outstanding stock in publicly traded companies that may compete with SN. To each Shareholders Knowledge,
no manager or Shareholders or any Shareholders of their immediate families is, directly or indirectly, interested in any material
contract with SN (other than such contracts as relate to any such individual ownership of Shares or other securities of SN).
2.20
Representations and Warranties
Complete
. The representations and warranties of the Shareholders included in this Agreement and any list, statement, document
or information set forth in, or attached to, any Schedule provided pursuant to this Agreement or delivered hereunder, are true
and complete in all material respects and do not contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements contained therein not misleading, under the circumstance under
which they were made.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF MMT
Except as set forth
on the disclosure schedules, MMT hereby represents and warrants to SN and the Shareholders as follows:
3.1
Organization
and Qualification;
MMT is a corporation, duly incorporated or organized, validly existing and in good standing under the laws
of Nevada, has requisite power and authority and governmental approvals to own, lease and operate its properties and to carry on
its business as currently conducted. MMT is duly qualified or licensed to do business and is in good standing in each jurisdiction
in which the ownership or leasing of its property or the conduct of its business requires such qualification or licensing, except
where the failure to be so qualified or licensed or in good standing would not, individually or in the aggregate, have a Material
Adverse Effect on MMT.
3.2
Authority
to Execute and Perform Agreement
. MMT has the requisite power and all authority required to enter into, execute and deliver
this Agreement and the Transaction Documents to which it is a party, to perform its obligations hereunder and thereunder and to
consummate the Transaction. The execution, delivery and performance of this Agreement and the consummation of the Transaction
have been duly authorized by all necessary corporate action.
3.3
Binding
Effect
. This Agreement has been validly executed and delivered by MMT and, assuming the due execution and delivery hereof by
SN, constitutes a valid and binding obligation of MMT, enforceable against MMT in accordance with its terms, except to the extent
such enforceability may be limited by (i) bankruptcy, insolvency, reorganization, moratorium or other similar laws of general applicability
affecting or relating to enforcement of creditors’ rights generally, and (ii) general equitable principles (regardless of
whether such enforceability is considered in equity or at law).
3.4
Capitalization
of MMT
.
(a) As of the date
hereof, the authorized capital stock of MMT consists of (i) Ninety Million (90,000,000)
shares of Common Stock, par value
$0.001 per share, of which 10,470,944 shares of Common Stock are issued and outstanding, all of which are validly issued, fully
paid and non-assessable, and all of which have been issued and granted in compliance with all applicable securities laws and (in
all material respects) other applicable Legal Requirements; and (ii) 10,000,000 shares of Preferred Stock, par value $0.001 per
share, none of which has been issued or is outstanding. MMT has no other authorized, issued or outstanding class of capital stock.
(b)
Obligations
.
There are no obligations, contingent or otherwise, of MMT to repurchase, redeem or acquire shares of MMT.
(c)
Options, Warrants,
etc
. As of the date hereof MMT has issued an aggregate of $870,000 in convertible notes, convertible into 497,143 shares of
MMT’s common stock at a conversion price of $1.75 per share. There are no other existing options, rights, subscriptions,
warrants, unsatisfied preemptive rights, calls or commitments relating to (i) the authorized and unissued capital stock of MMT,
or (ii) any securities or obligations convertible into or exchangeable for, or giving any Person any right to subscribe for or
acquire from MMT any shares of capital stock of MMT and no such convertible or exchangeable securities or obligations are outstanding.
(d)
Registration
.
The outstanding shares of the capital stock of MMT have been issued in full compliance with the registration and prospectus delivery
requirements of the Securities Act or in compliance with applicable exemptions therefrom, and the registration and qualification
requirements of all applicable securities laws of states of the United States.
(e)
MMT Shares
.
The MMT Shares, when issued as provided in this Agreement, will be duly authorized and validly issued, fully paid and non-assessable,
and will be free of any Liens or encumbrances and of restrictions on transfer, other than restrictions on transfer under applicable
state and federal securities laws or the Transaction documents.
3.5
Board
Approval
. The Board of Directors of MMT, by resolutions duly adopted at a meeting duly called and held at which a quorum was
present or by the written consent in lieu of such a meeting, has approved this Agreement and the Transaction in accordance with
the requirements of the State of Nevada.
3.6
No
Material Adverse Change
. There has been no change in the business, properties, assets, operations or condition (financial or
otherwise) which has resulted or reasonably could be expected to result in or which MMT has reason to believe could reasonably
be expected to result in a Material Adverse Effect on it, and MMT has no Knowledge of any such change that is threatened, nor has
there been any damage, destruction or loss affecting the assets, properties, business, operations or condition (financial or otherwise),
whether or not covered by insurance which has resulted or reasonably could be expected to result in or which MMT has reason to
believe could reasonably be expected to result in a Material Adverse Effect on MMT.
3.7
Books
and Records
. The books and records, financial and otherwise, of MMT are in all material respects complete and correct and have
been maintained in accordance with sound business and bookkeeping practices so as to accurately and fairly reflect, in reasonable
detail, the transactions and dispositions of the assets and liabilities of MMT.
3.8
Litigation
.
There are no Legal Proceedings pending or, to the Knowledge of MMT, threatened against or involving MMT, or any of its respective
property or assets. There are no outstanding orders, judgments, injunctions, awards or decrees of any court, governmental or regulatory
body or arbitration tribunal against or involving MMT.
3.9
No Undisclosed
Liabilities
. MMT has no liabilities (absolute, accrued, contingent or otherwise) of a nature required to be disclosed on a
balance sheet or in the related notes to the financial statements which are, individually or in the aggregate, material to the
business, results of operations or financial condition of SN.
3.10
Title
to Properties; Absence of Liens
. MMT has good and marketable title to all of its respective assets and properties, whether
real, personal or fixed, free and clear of all Liens, except for Liens for Taxes not yet due and payable or which MMT is contesting
in good faith and for which adequate reserves have been established.
3.11
Compliance
with Laws
. MMT is not in violation of, default under, or conflict with, any applicable Order or any Applicable Law, except
for any such violations that would not, individually or in the aggregate, have a Material Adverse Effect on MMT.
3.12
Intellectual
Property
. On the Effective Date MMT will not own, license or otherwise have any rights in or to any Intellectual Property.
3.13
Non-Contravention
.
The execution and delivery of this Agreement and the Transaction documents by MMT, the performance by MMT of its obligations hereunder
and thereunder, and the consummation of the Transaction contemplated hereby and thereby by such entities (A) do not and will not
conflict with, or result in a breach or violation of (i) any provision of the charter or bylaws of any of MMT, (ii) any applicable
laws, (iii) any material agreement, contract, lease, license or instrument to which MMT is a party or by which MMT or any of each
of its properties or assets are bound and (B) will not result in the creation or imposition of any Lien upon any of the property
or assets of MMT pursuant to any provision of any contract or Lien.
3.14
Consents
and Approvals
. Except for (i) those consents, approvals, authorizations, filings or notices set forth on
Schedule 3.15
,
(ii) applicable requirements of the Securities Act or the Exchange Act, (iii) notices and filings in connection with the Transaction,
no consent, approval or authorization of, filing with, or notice to, any Governmental Body is required by MMT in connection with
the execution, delivery and performance by MMT of this Agreement, each and every agreement contemplated hereby, and the consummation
by MMT of the Transaction.
3.15
Material Contracts
. MMT is not in default under any Material Contract, nor to the Knowledge of MMT, does any condition
exist that, with notice or lapse of time or both, would constitute a default thereunder. To the Knowledge of MMT, no other party
to any such Material Contract of MMT is in default thereunder, nor does any condition exist that with notice or lapse of time or
both would constitute a default thereunder. No approval or consent of any person is needed in order that the Material Contracts
of MMT shall continue in full force and effect following the consummation of the transactions contemplated by this Agreement.
3.16
Taxes
.
(a)
Filing
of Tax Returns
. MMT has timely filed, or have had timely filed on their behalf, with the appropriate Taxing authorities all
Tax Returns in respect of Taxes required to be filed by them. The Tax Returns filed (including any amendments thereof) are complete
and accurate in all material respects. MMT has not requested any extension of time within which to file any Tax Return in respect
of any Taxes, which Tax Return has not since been filed in a timely manner. To the Knowledge of MMT, no claim has ever been made
by any Taxing authority in a jurisdiction where MMT does not file Tax Returns, or has Tax Returns filed on their behalf, that they
are or may be subject to taxation by that jurisdiction, or liable for Taxes owing to that jurisdiction.
(b)
Payment of
Taxes
. All Taxes owed by MMT (whether or not shown as due on any Tax Returns) have been paid in full or adequate reserves on
their respective books and/or records have been established. MMT has withheld and paid all Taxes required to have been withheld
and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder, or other third
party. MMT has made all required estimated Tax payments sufficient to avoid any underpayment penalties. The unpaid Taxes of MMT
(A) do not, as of the Closing Date, exceed the reserve for Tax liability (rather than any reserve for deferred Taxes established
to reflect the timing differences between book and Tax income) set forth on the face of MMT’s most recent balance sheets
(rather than any notes thereto) and (B) do not exceed that reserve as adjusted for the passage of time through the Closing Date
in accordance with the past custom and practice of MMT in filing, or having filed on their behalf, their Tax Returns. The charges,
accruals and reserves on the books of MMT in respect of any liability for Taxes (x) based on or measured by net income for any
years not finally determined, (y) with respect to which the applicable statute of limitations has not expired or (z) that has been
previously deferred, are adequate to satisfy any assessment for such Taxes for any such years.
(c)
Audits, Investigations
or Claims
. There is no dispute or claim which has not been resolved concerning any Tax liability of MMT either (A) claimed
or raised by any Taxing authority in writing or (B) as to which any of the directors and officers (and employees responsible for
Tax matters) of MMT has Knowledge. There is no currently pending audit of any Tax Return of MMT by any Taxing authority, and MMT
has not ever been notified in writing that any Taxing authority intends to audit any Tax Return of MMT. MMT has not executed any
outstanding waivers or consents regarding the application of the statute of limitations with respect to any Taxes or Tax Returns.
(d)
Lien
. There
are no encumbrances for Taxes (other than for current Taxes not yet due and payable) on any assets of MMT.
(e)
Tax
Elections
. MMT (i) has not agreed, or are required, to make any adjustment under Section 481(a) of the Code by reason of a
change in accounting method or otherwise; (ii) have not made an election pursuant to Code Sections 338 or 336(e) or the regulations
thereunder or any comparable provisions of any foreign or state or local income tax law; (iii) is not subject to any constructive
elections under Code Section 338 or the regulations thereunder; (iv) has not made any payments, are obligated to make any payments,
or are a party to any agreement that under certain circumstances could obligate it to make any payments that will not be deductible
under §280G and §162(m) of the Code; and (v) has not made any of the foregoing elections or are required to apply any
of the foregoing rules under any comparable state or local income Tax provision.
(f)
Prior Affiliated
Groups
. MMT (A) has never been a member of an affiliated group of corporations within the meaning of Section 1504 of the Code
and (B) does not have any liability for the Taxes of any person under Treas. Reg. §1502-6 (or any similar provision of state,
local or foreign law), as a transferee or successor, by contract or otherwise.
(g)
Tax Sharing
Agreements
. MMT is not a party to any Tax allocation, indemnity or sharing or similar agreement.
(h)
Section 355
.
MMT has not distributed the stock of a “controlled corporation” (within the meaning of that term as used in Section
355(a) of the Code) in a transaction subject to Section 355 of the Code within the past two years.
(i)
Partnerships
.
MMT does not own an interest in a partnership for Tax purposes.
3.18
Environmental
Matters
. (i) MMT is in compliance in all material respects with applicable Environmental Laws; (ii) MMT has all Permits required
pursuant to Environmental Laws and are in compliance in all material respects with the terms thereof; (iii) there are no past or
present events, activities, practices, incidents, actions or plans in connection with the operations of MMT which have given rise
to or are reasonably likely to give rise to any liability on the part of MMT under any Environmental Law; (iv) MMT has not generated,
used, transported, treated, stored, released or disposed of, or has suffered or permitted anyone else to generate, use, transport,
treat, store, release or dispose of any Hazardous Substance in violation of any Environmental Laws; and (v) there has not been
any generation, use, transportation, treatment, storage, release or disposal of any Hazardous Substance in connection with the
conduct of the business of MMT or the use of any property or facility by MMT, or to the Knowledge of MMT, any nearby or adjacent
properties, in each case, which has created or might reasonably be expected to create any material liability under any Environmental
Law or which would require reporting to or notification of any Governmental Body.
3.19
Real
Property
. MMT has not owned any real property or any interest in any real property.
3.20
Broker’s
Fees
. No broker, finder, agent or similar intermediary has acted on behalf of MMT in connection with this Agreement or the
Transaction, and there are no brokerage commissions, finders’ fees or similar fees or commissions payable in connection therewith
based on any agreement, arrangement or understanding with MMT.
3.21
Labor
Matters
. MMT is not now, and has not been in the last five years, bound by or party to any collective bargaining agreement
and, to the Knowledge of MMT, no application for certification of a collective bargaining agent is pending. MMT is in compliance
with all Applicable Laws applicable to MMT affecting employment practices and terms and conditions of employment.
3.22
Full
Disclosure
. This Agreement (including the information contained in the disclosure schedules) and the Reports, do not (i) with
respect to MMT, contain any representation, warranty or information that is false or misleading with respect to any material fact,
or (ii) with respect to MMT, omit to state any material fact necessary in order to make the representations, warranties and information
contained herein (including the information contained in the disclosure schedules) and the Reports, in the context in which made
or provided, not false or misleading.
ARTICLE IV
CONDUCT PRIOR TO THE EFFECTIVE TIME
4.1
Conduct of Business by SN
and MMT
. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement
pursuant to its terms or the Closing Date (as herein defined), the Shareholders, on behalf of SN, and MMT shall, except to the
extent that the other party shall otherwise consent in writing, carry on its business in the usual, regular and ordinary course
consistent with past practices, in substantially the same manner as heretofore conducted and in compliance with all applicable
laws and regulations (except where noncompliance would not have a Material Adverse Effect), pay its debts and taxes when due subject
to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable
efforts consistent with past practices and policies to (i) preserve substantially intact its present business organization, (ii)
keep available the services of its present managers, officers and employees, and (iii) preserve its relationships with customers,
suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except
as permitted or required by the terms of this Agreement, without the prior written consent of the other party, during the period
from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or
the Closing, SN and MMT shall not do any of the following:
(a) Waive any stock repurchase rights,
accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee,
consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Grant any severance or termination
pay to any officer or employee except pursuant to applicable law, written agreements outstanding, or policies existing on the date
hereof and as previously or concurrently disclosed in writing or made available to the other party, or adopt any new severance
plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof;
(c) Transfer or license to any person
or otherwise extend, amend or modify any material rights to any Intellectual Property of SN or MMT, or enter into grants to transfer
or license to any person future patent rights, other than in the ordinary course of business consistent with past practices provided
that in no event shall SN or MMT license on an exclusive basis or sell any Intellectual Property of SN or MMT, as applicable;
(d) Declare, set aside or pay any
dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital
stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of,
in lieu of or in substitution for any capital stock;
(e) Purchase, redeem or otherwise
acquire, directly or indirectly, any shares of capital stock or Shareholders interest of SN and MMT, as applicable;
(f) Issue, deliver, sell, authorize,
pledge or otherwise encumber, or agree to any of the foregoing with respect to, any shares of capital stock, or any securities
convertible into or exchangeable for shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares
of capital stock or any securities convertible into or exchangeable for shares of capital stock or Shares, or enter into other
agreements or commitments of any character obligating it to issue any such shares of capital stock, shares or convertible or exchangeable
securities;
(g) Except as provided herein or
as disclosed to the other party, amend its Charter Documents;
(h) Acquire or agree to acquire
by merging or consolidating with, or by purchasing any equity interest in or a portion of the assets of, or by any other manner,
any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire
or agree to acquire any assets which are material, individually or in the aggregate, to the business of MMT or SN, as applicable,
or enter into any joint ventures, strategic partnerships or alliances or other arrangements that provide for exclusivity of territory
or otherwise restrict such party's ability to compete or to offer or sell any products or services;
(i) Sell, lease, license, encumber
or otherwise dispose of any properties or assets, except sales of inventory in the ordinary course of business consistent with
past practice and, except for the sale, lease or disposition (other than through licensing) of property or assets which are not
material, individually or in the aggregate, to the business of such party;
(j) Incur any indebtedness for borrowed
money in excess of $1,000 in the aggregate, except for indebtedness incurred in connection with the purchase of endoscopy equipment,
or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights
to acquire any debt securities of MMT or SN, as applicable, enter into any "keep well" or other agreement to maintain
any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing;
(k) Adopt or amend any employee
benefit plan, policy or arrangement, any employee stock purchase or employee stock option plan, or enter into any employment contract
or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business
consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration
to any manager, director or employee, or increase the salaries or wage rates or fringe benefits (including rights to severance
or indemnification) of its managers, directors, officers, employees or consultants, except in the ordinary course of business consistent
with past practices;
(l) (i) pay, discharge, settle or
satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation
(whether or not commenced prior to the date of this Agreement) other than the payment, discharge, settlement or satisfaction, in
the ordinary course of business consistent with past practices or in accordance with their terms, or liabilities recognized or
disclosed in the most recent financial statements (or the notes thereto) of SN or of MMT, as applicable, or incurred since the
date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person
from or knowingly fail to enforce any confidentiality or similar agreement to which SN is a party or of which SN is a beneficiary
or to which MMT is a party or of which MMT is a beneficiary, as applicable;
(m) Except in the ordinary course
of business consistent with past practices, modify, amend or terminate any Contract of SN or MMT, as applicable, or other material
contract or material agreement to which SN or MMT is a party or waive, delay the exercise of, release or assign any material rights
or claims thereunder;
(n) Except as appropriate to fairly
represent SN’s financial condition or results of operations, revalue any of its assets or adjust its revenue or expenses;;
(o) Incur or enter into any agreement,
contract or commitment requiring such party to pay in excess of $10,000 in any 12 month period;
(p) Settle any litigation for a
total sum of greater than $10,000;
(q) Make or rescind any Tax elections
that, individually or in the aggregate, could be reasonably likely to adversely affect in any material respect the Tax liability
or Tax attributes of such party, settle or compromise any material income tax liability or, except as required by applicable law,
materially change any method of accounting for Tax purposes or prepare or file any Return in a manner inconsistent with past practice;
(r) Form, establish or acquire any
Subsidiary;
(s) Permit any Person to exercise
any of its discretionary rights under any Plan to provide for the automatic acceleration of any outstanding options, the termination
of any outstanding repurchase rights or the termination of any cancellation rights issued pursuant to such plans; or
(t) Agree in writing or otherwise
agree, commit or resolve to take any of the actions described in Section 4.1 (a) through (s) above.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1.
Compliance with Laws.
The Shareholders, SN and MMT shall cooperate with each other and use their respective reasonable best efforts to take or cause
to be taken all actions, and do or cause to be done all things, necessary, proper or advisable on their part under this Agreement
and applicable laws to consummate the Transaction and the other transactions contemplated hereby as soon as practicable, including
preparing and filing as soon as practicable of all documentation to effect all necessary notices, reports and other filings and
to obtain as soon as practicable all consents, registrations, approvals, permits and authorizations necessary or advisable to be
obtained from any third party and/or any Governmental Entity in order to consummate the Transaction or any of the other transactions
contemplated hereby. Subject to applicable laws relating to the exchange of information and the preservation of any applicable
attorney-client privilege, work-product doctrine, self-audit privilege or other similar privilege, each of the Shareholders and
MMT shall have the right to review and comment on in advance, and to the extent practicable each will consult the other on, all
the information relating to such party, and any Subsidiaries, that appear in any filing made with, or written materials submitted
to, any third party and/or any Governmental Entity in connection with the Transaction and the other transactions contemplated hereby.
In exercising the foregoing right, each of the parties hereto shall act reasonably and as promptly as practicable.
5.2
Required Information
.
The Shareholders, on behalf of SN, and MMT each shall, upon request by the other, furnish the other with all information concerning
themselves, their respective Subsidiaries, managers, directors, officers and Shareholders and such other matters as may be reasonably
necessary or advisable in connection with the Transaction, or any other statement, filing, notice or application made by or on
behalf of SN and MMT to any third party and/or any Governmental Entity in connection with the Transaction and the other transactions
contemplated hereby. Each party warrants and represents to the other party that all such information shall be true and correct
in all material respects and will not contain any untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements contained therein, in light of the circumstances under which they were
made, not misleading.
5.3
Reasonable Efforts; Notification
.
(a) Upon the terms and subject
to the conditions set forth in this Agreement, each of the parties agrees to use its commercially reasonable efforts to take, or
cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all
things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the Transaction
and the other transactions contemplated by this Agreement, including using commercially reasonable efforts to accomplish the following:
(i) the taking of all reasonable acts necessary to cause the conditions precedent set forth in Article VI to be satisfied, (ii)
the obtaining of all necessary actions or non-actions, waivers, consents, approvals, orders and authorizations from Governmental
Entities and the making of all necessary registrations, declarations and filings (including registrations, declarations and filings
with Governmental Entities, if any) and the taking of all reasonable steps as may be necessary to avoid any suit, claim, action,
investigation or proceeding by any Governmental Entity, (iii) the obtaining of all consents, approvals or waivers from third parties
required as a result of the transactions contemplated in this Agreement, (iv) the defending of any suits, claims, actions, investigations
or proceedings, whether judicial or administrative, challenging this Agreement or the consummation of the transactions contemplated
hereby, including seeking to have any stay or temporary restraining order entered by any court or other Governmental Entity vacated
or reversed, and (v) the execution or delivery of any additional instruments reasonably necessary to consummate the transactions
contemplated by, and to fully carry out the purposes of, this Agreement. In connection with and without limiting the foregoing,
if any takeover statute or similar statute or regulation is or becomes applicable to the Transaction, this Agreement or any of
the transactions contemplated by this Agreement, the parties hereto shall use commercially reasonable efforts to enable the Transaction
and the other transactions contemplated by this Agreement to be consummated as promptly as practicable on the terms contemplated
by this Agreement. Notwithstanding anything herein to the contrary, nothing in this Agreement shall be deemed to require either
of the parties hereto to agree to any divestiture by itself or any of its affiliates of shares of capital stock, Shareholders interest
or of any business, assets or property, or the imposition of any material limitation on the ability of any of them to conduct their
business or to own or exercise control of such assets, properties and stock.
(b) The Shareholders agree to monitor
and amend the Disclosure Schedule through Closing as information becomes available which warrants inclusion in the Disclosure Schedule.
(c) MMT shall give prompt notice
to the Shareholders upon becoming aware that any representation or warranty made by it contained in this Agreement has become untrue
or inaccurate, or of any failure of MMT to comply with or satisfy in any material respect any covenant, condition or agreement
to be complied with or satisfied by it under this Agreement, in each case, such that the conditions set forth in Article VI would
not be satisfied; provided, however, that no such notification shall affect the representations, warranties, covenants or agreements
of the parties or the conditions to the obligations of the parties under this Agreement.
5.4
Business Records
. At
Closing, SN shall cause to be delivered to MMT all records and documents relating to SN including, without limitation, books, records,
government filings, Returns, Charter Documents, Corporate Records, Stock Records, consent decrees, orders, and correspondence,
director and stockholder minutes and resolutions, stock ownership records, financial information and records, electronic files
containing any financial information and records, and other documents used in or associated with SN ("Business Records").
5.5
Employment Agreement.
At Closing MMT and Josh Haupt shall enter into an employment agreement for Josh Haupt to serve as Chief Cultivation Officer of
Medicine Man Consulting, Inc. following the Effective Date. A copy of the Employment Agreement is attached as Exhibit “A”
to this Agreement and incorporated herein as if set forth.
ARTICLE VI
CONDITIONS TO THE TRANSACTION
6.1
Conditions to Obligations
of Each Party to Effect the Transaction
. The respective obligations of each party to this Agreement to effect the Transaction
shall be subject to the satisfaction at or prior to the Closing Date of the following conditions:
(a)
No Order
. No Governmental
Entity shall have enacted, issued, promulgated, enforced or entered any statute, rule, regulation, executive order, decree, injunction
or other order (whether temporary, preliminary or permanent) which is in effect and which has the effect of making the Transaction
illegal or otherwise prohibiting consummation of the Transaction, substantially on the terms contemplated by this Agreement. All
waiting periods, if any, in any jurisdiction in which SN or MMT has material operations relating to the transactions contemplated
hereby will have expired or terminated early.
(b)
Failure to Deliver Audit.
SN shall fail to deliver the independent audit of its financial statements discussed above in Section 2.10.
6.2
Additional Conditions to
Obligations of Shareholders
. The obligations of the Shareholders to consummate and effect the Transaction shall be subject
to the satisfaction at or prior to the Closing Date of each of the following conditions, any of which may be waived, in writing,
exclusively by the Shareholders:
(a)
Representations and Warranties
.
Each representation and warranty of MMT contained in this Agreement (i) shall have been true and correct as of the date of this
Agreement and (ii) shall be true and correct on and as of the Closing Date with the same force and effect as if made on the Closing
Date.
(b)
Agreements and Covenants
.
MMT shall have performed or complied in all material respects with all agreements and covenants required by this Agreement to be
performed or complied with by them on or prior to the Closing Date, except to the extent that any failure to perform or comply
(other than a willful failure to perform or comply or failure to perform or comply with an agreement or covenant reasonably within
the control of MMT) does not, or will not, constitute a Material Adverse Effect with respect to MMT taken as a whole.
(c)
Consents
. MMT shall have
obtained all consents, waivers and approvals required in connection with the consummation of the transactions contemplated hereby,
other than consents, waivers and approvals the absence of which, either alone or in the aggregate, could not reasonably be expected
to have a Material Adverse Effect on MMT taken as a whole.
(d)
Material Adverse Effect
.
No Material Adverse Effect with respect to MMT shall have occurred since the date of this Agreement.
(e)
Other Deliveries
. At
Closing, MMT shall have delivered to the Shareholders: (i) certificates representing the MMT Shares of Common Stock to Shareholders
in accordance with Section 1.4, (ii) the Employment Agreement in the form attached as Exhibit “A”, and (iii) such other
documents or certificates as shall reasonably be required by the Shareholders and their counsel in order to consummate the transactions
contemplated hereunder.
6.3
Additional Conditions to
the Obligations of MMT
. The obligations of MMT to consummate and effect the Transaction shall be subject to the satisfaction
at or prior to the Closing Date of each of the following conditions, any of which may be waived, in writing, exclusively by MMT:
(a)
Representations and Warranties
.
Each representation and warranty of the Shareholders contained in this Agreement (i) shall have been true and correct as of the
date of this Agreement and (ii) shall be true and correct on and as of the Effective Date with the same force and effect as if
made on and as of the Closing.
(b)
Agreements and Covenants
.
The Shareholders shall have performed or complied in all material respects with all agreements and covenants required by this Agreement
to be performed or complied with by them at or prior to the Closing Date except to the extent that any failure to perform or comply
(other than a willful failure to perform or comply or failure to perform or comply with an agreement or covenant reasonably within
the control of Shareholders) does not, or will not, constitute a Material Adverse Effect on SN.
(c)
Consents
. SN shall have
obtained all consents, waivers and approvals required in connection with the consummation of the transactions contemplated hereby,
other than consents, waivers and approvals the absence of which, either alone or in the aggregate, could not reasonably be expected
to have a Material Adverse Effect on SN.
(d)
Material
Adverse Effect
. No Material Adverse Effect with respect to SN shall have occurred since the date of this Agreement.
(e)
Other Deliveries
. At
Closing, the Shareholders shall have delivered to MMT: (i) certificates representing the Shares owned by the Shareholders, together
with stock powers or other assignments or documents to effectuate transfer of the SN Shares in accordance with Section 1.3; (ii)
evidence of properly conducted meetings or legally authorized consents of SN’s Shareholders and Directors authorizing the
matters referenced herein, including the approval of the share exchange herein; and (iii) such other documents or certificates
as shall reasonably be required by MMT and its counsel in order to consummate the transactions contemplated hereunder.
6.4
Additional Conditions to
the Obligations of SN and Shareholders
. The obligations of SN and Shareholders to consummate and effect the Transaction shall
be subject to the satisfaction at or prior to the Effective Date of each of the following conditions, any of which may be waived,
in writing, exclusively by SN and Shareholders:
(a)
Representations and Warranties
.
Each representation and warranty of MMT contained in this Agreement (i) shall have been true and correct as of the date of this
Agreement and (ii) shall be true and correct on and as of the Effective Date with the same force and effect as if made on and as
of the Closing.
(b)
Agreements and Covenants
.
MMT shall have performed or complied in all material respects with all agreements and covenants required by this Agreement to be
performed or complied with by them at or prior to the Effective Date except to the extent that any failure to perform or comply
(other than a willful failure to perform or comply or failure to perform or comply with an agreement or covenant reasonably within
the control of MMT) does not, or will not, constitute a Material Adverse Effect on MMT.
(c)
Consents
. MMT shall have
obtained all consents, waivers and approvals required in connection with the consummation of the transactions contemplated hereby,
other than consents, waivers and approvals the absence of which, either alone or in the aggregate, could not reasonably be expected
to have a Material Adverse Effect on MMT.
(d)
Material Adverse Effect
.
No Material Adverse Effect with respect to MMT shall have occurred since the date of this Agreement.
(e)
Other Deliveries
. At
Closing, MMT shall have delivered to SN and the Shareholders: (i) the stock certificates for the MMT Shares (ii) such other documents
or certificates as shall reasonably be required by SN and its counsel in order to consummate the transactions contemplated hereunder.
6.5
Shareholders’ Indemnification
Obligation with Respect to Representations
. The Shareholders hereby indemnify and hold harmless, and agree to
indemnify
and hold harmless (from and after the Closing) MMT and its respective directors, officers, Shareholders, employees and agents (collectively,
the "MMT Indemnified Parties") against (i)
any and all liabilities, obligations, losses, damages, claims, actions,
Liens
and deficiencies which exist, or which may be imposed on, incurred by or
asserted against any one or more of
the MMT Indemnified Parties based
upon, resulting from or arising out of, or as to which there was, any breach or
inaccuracy
of any representation or warranty contained in Article II of this
Agreement by the Shareholders which is not set forth on
the Disclosure Schedule, or any statement, agreement or covenant made by the Shareholders in
or pursuant to this Agreement,
any Exhibit or Schedule hereto or thereto, or any
certificate or document delivered by such Shareholders at the
Closing,
and (ii) any cost or expense (including
reasonable attorneys' fees and court costs) incurred by the MMT Indemnified
Parties
or any of them in connection with the foregoing (including, without
limitation, any cost or expense incurred by the MMT
Indemnified Parties in
enforcing their rights pursuant to this Section 6.5) (collectively, the
"Damages"
for purposes of this Section 6.5).
An MMT Indemnified Party may apply
all demands or claims for indemnification under this Article against any payment to be made by or on behalf of such MMT Indemnified
Party or any of its Affiliates to or for the account of the Shareholders by means of set-off, reduction or otherwise. No MMT Indemnified
Party shall be required to make any claim or demand against any other Person prior to the making of any claim or demand for indemnification
or at any other time. The rights of the MMT Indemnified Parties under this Section 6.5 are in addition to such other rights and
remedies which they may have under this Agreement or otherwise. The amount of any and all Damages suffered by MMT Indemnified Parties
under this Section 6.5 shall be recovered, and all claims of MMT Indemnified Parties pursuant to this Section 6.5 shall be brought
by MMT on behalf of such MMT Indemnified Parties.
Notwithstanding any other provision
of this Agreement, no demand or claim for indemnification under this Section 6.5 may be made (i) after the date six (6) months
following the Closing Date, or (ii) if such claim or demand is covered by existing MMT or SN business insurance policy(ies).
For purposes of this Agreement,
(1) the term "Misrepresentation Claim" means a claim or demand for indemnification based upon, resulting from or arising
out of any material breach or inaccuracy of a warranty or representation and such material breach or inaccuracy was the direct
and primary cause of the Damages for which indemnification is sought; and (2) the term "Knowledge" means in respect of
any Misrepresentation Claim, as of the Closing Date or at any time prior thereto, (a) actual knowledge by one of the Shareholders
of the material breach or inaccuracy upon which such Misrepresentation Claim is based or (b) actual knowledge of facts which would
cause a reasonable person, having knowledge and a full understanding of the terms of this Agreement, to be aware of or recognize
the material breach or inaccuracy upon which the Misrepresentation Claim is based.
6.6
Indemnification Obligation
with Respect to MMT Representations
. MMT hereby indemnifies and hold harmless, and agree to indemnify and hold harmless, the
Shareholders, and their respective heirs, representatives and agents (collectively, the “Shareholders Indemnified Parties”)
from and after the Closing, against (i) any and all liabilities, obligations (including Guaranty Obligations, as defined below),
losses, damages, claims, actions, Liens and deficiencies which exist, or which may be imposed on, incurred by or asserted against
any one or more of the Shareholders Indemnified Parties, based upon, resulting from or arising out of, or as to which there was,
any breach or inaccuracy of any representation or warranty by MMT contained in this Agreement, or any agreement or covenant made
by MMT in or pursuant to this Agreement, or in any Exhibit or Schedule hereto or thereto, or any certificate or document delivered
by MMT at the Closing hereof, whether caused by the actions or inactions MMT following Closing), and (ii) any cost or expense (including
reasonable attorneys' fees and court costs) incurred by the Shareholders Indemnified Parties in connection with the foregoing (including,
without limitation, any cost or expense incurred by the Shareholders Indemnified Parties in enforcing his rights pursuant to this
Section 6.6) (collectively, the "Damages").
MMT’s indemnification
obligation set forth in this Section 6.6 extends to any personal guaranty of any SN obligation by either of the Shareholders (“Guaranty
Obligations”). As such, MMT shall (i) pay off the Wells Fargo LOC at Closing, and (ii) make reasonable efforts to remove
the Shareholders as personal guarantor(s) of any SN obligations. Furthermore, in the event that any assets of either Shareholder
are posted as security for any SN obligation, MMT shall also make reasonable efforts to pay off such obligation or shall post its
own assets to replace those posted by Shareholders.
The Shareholders Indemnified Parties
shall not be required to make any claim or demand against any other Person prior to the making of any claim or demand for indemnification
or at any other time. The rights of the Shareholders Indemnified Parties under this Section 6.6 are in addition to such other rights
and remedies which they may have under this Agreement or otherwise.
Notwithstanding any other provision
of this Agreement, except for any Misrepresentation Claim with respect to which MMT had Knowledge, no demand or claim for indemnification
under this Section 6.6 may be made after six (6) months following the Closing Date. No demand or claim for indemnification under
this Section 6.6 for any Misrepresentation Claim may be made after the first anniversary of the Closing Date if MMT had Knowledge
with respect to such Misrepresentation Claim.
6.7
Procedure for Indemnification
Claims
.
(a) The MMT Indemnified Parties
and the Shareholders Indemnified Parties are referred to collectively herein as "Indemnified Parties", and the Persons
from whom indemnification is sought pursuant to this Article VI are referred to herein as "Indemnifying Parties."
(b) If at any time an Indemnified
Party determines to assert a right to indemnification hereunder, the Indemnified Party shall give to the Indemnifying Party written
notice describing the matter for which indemnification is sought in reasonable detail. In the event that a demand or claim for
indemnification is made hereunder with respect to a matter the amount or extent of which is not yet known or certain, the notice
of demand for indemnification shall so state, and, where practicable, shall include an estimate of the amount of the matter. The
failure of an Indemnified Party to give notice of any matter to the Indemnifying Party shall not relieve the Indemnifying Party
of any liability that the Indemnifying Party may have to any Indemnified Party.
(c) Within 15 days after receipt
of the notice referred to in clause (b) above, the Indemnifying Party from whom indemnification is sought shall (i) if true, acknowledge
in writing his responsibility for all or part of such matter, and shall pay or otherwise satisfy the portion of such matter as
to which responsibility is acknowledged or take such other action as is reasonably satisfactory to the Indemnified Party to resolve
any such matter that involves anyone not a party hereto, or (ii) give written notice to the Indemnified Party of his intention
to dispute or contest all or part of such responsibility. Upon delivery of such notice of intention to contest, the parties shall
negotiate in good faith to resolve as promptly as possible any dispute as to responsibility for, or the amount of, any such matter.
Failure to respond to a notice claiming indemnification shall be deemed a denial of responsibility therefore.
(d) In the event that the Indemnified
Party is required to expend any amount in enforcing his, her or its rights of indemnification hereunder, the Indemnifying Parties
will, jointly and severally, promptly upon request, pay such amounts to the Indemnified Party if indemnification is required to
be made hereunder.
(e) Each Indemnifying Party shall
have the right to employ separate counsel in any action or claim which is brought against any Indemnified Party in respect of which
indemnity may be sought from it, and to participate in the defense of such action or claim, if such Indemnifying Party confirms
in writing its responsibility for such action or claim; provided, however, that (i) the Indemnified Party or Parties shall retain
control of such action or claim and (ii) the fees and expenses of such separate counsel shall be at the expense of the Indemnifying
Party.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
7.1
Termination
. This Agreement
may be terminated at any time prior to the Closing:
(a) by mutual written agreement
of MMT and the Shareholders;
(b) by either
MMT or the Shareholders if the Transaction shall not have been consummated by September 30, 2017
(“Closing Deadline”) for any reason;
(c) by either MMT or the Shareholders
if a Governmental Entity shall have issued an order, decree or ruling or taken any other action, in any case having the effect
of permanently restraining, enjoining or otherwise prohibiting the Transaction, which order, decree, ruling or other action is
final and nonappealable;
(d) by the Shareholders,
upon a material breach of any representation, warranty, covenant or agreement on the part of MMT set forth in this Agreement,
or if any representation or warranty of MMT shall have become materially untrue, in either case such that the conditions set forth
in Section 6.2(a) or Section 6.2(b) would not be satisfied as of the time of such breach or as of the time such representation
or warranty shall have become untrue, provided, that if such inaccuracy in MMT's representations and warranties or breach by MMT
is curable by MMT prior to the Closing Date, then the Shareholders may not terminate this Agreement under this Section 7.1(d)
for thirty (30) days after delivery of written notice from Shareholders to MMT of such breach, provided MMT continues to exercise
commercially reasonable efforts to cure such breach (it being understood that Shareholders may not terminate this Agreement pursuant
to this Section 7.1(d) if they shall have also materially breached this Agreement or if such breach by MMT is cured during such
thirty (30)-day period); or
(e) by MMT, upon a material breach
of any representation, warranty, covenant or agreement on the part of the Shareholders set forth in this Agreement, or if any representation
or warranty of the Shareholders shall have become materially untrue, in either case such that the conditions set forth in Section
6.3(a) or Section 6.3(b) would not be satisfied as of the time of such breach or as of the time such representation or warranty
shall have become untrue, provided, that if such inaccuracy in the Shareholders' representations and warranties or breach by the
Shareholders is curable by the Shareholders prior to the Closing Date, then MMT may not terminate this Agreement under this Section
7.1(e) for thirty (30) days after delivery of written notice from MMT to the Shareholders of such breach, provided the Shareholders
continue to exercise commercially reasonable efforts to cure such breach (it being understood that MMT may not terminate this Agreement
pursuant to this Section 7.1(e) if it shall have materially breached this Agreement or if such breach by the Shareholders is cured
during such thirty (30)-day period).
(f) by MMT, in its sole and absolute
discretion, if following the Effective Date, the net assets or the annual revenue of SN as included in the independent audit of
SN to be provided within seventy (70) days from the Effective Date, deviate by more than ten percent (10%) from the unaudited financial
information provided by SN pursuant to Section 2.10 herein.
7.2
Notice of Termination; Effect
of Termination
. Any termination of this Agreement under Section 7.1 above will be effective immediately upon (or, if the termination
is pursuant to Section 7.1(d) or Section 7.1(e) and the proviso therein is applicable, thirty (30) days after the party in breach
fails to cure the breach) the delivery of written notice of the terminating party to the other parties hereto. In the event of
the termination of this Agreement as provided in Section 7.1, this Agreement shall be of no further force or effect and the Transaction
shall be abandoned, except (i) as set forth in this Section 7.2, Section 7.3 and Article VIII (General Provisions), each of which
shall survive the termination of this Agreement, and (ii) nothing herein shall relieve any party from liability for any intentional
or willful breach of this Agreement.
7.3
Fees and Expenses
. All
fees and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party
incurring such expenses whether or not the Transaction is consummated.
7.4
Amendment
. This Agreement
may be amended by the parties hereto at any time by execution of an instrument in writing signed on behalf of each of MMT, SN and
the Shareholders.
7.5
Extension; Waiver
. At
any time prior to the Closing, any party hereto may, to the extent legally allowed, (i) extend the time for the performance of
any of the obligations or other acts of the other parties hereto, (ii) waive any inaccuracies in the representations and warranties
made to such party contained herein or in any document delivered pursuant hereto, and (iii) waive compliance with any of the agreements
or conditions for the benefit of such party contained herein. Any agreement on the part of a party hereto to any such extension
or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. Delay in exercising any
right under this Agreement shall not constitute a waiver of such right.
ARTICLE VIII
GENERAL PROVISIONS
8.1
Notices
. All notices
and other communications hereunder shall be in writing and shall be deemed given if delivered personally or by commercial delivery
service, or sent via telecopy (receipt confirmed) to the parties at the addresses indicated above, or such other address as a party
may so designate in the future, in writing.
8.2
Interpretation
.
(a) When a reference is made in
this Agreement to Exhibits, such reference shall be to an Exhibit to this Agreement unless otherwise indicated. When a reference
is made in this Agreement to Sections, such reference shall be to a Section of this Agreement. Unless otherwise indicated the words
"include," "includes" and "including" when used herein shall be deemed in each case to be followed
by the words "without limitation." The headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.
(b) For purposes of this Agreement,
the term "Material Adverse Effect" when used in connection with an entity means any change, event, violation, inaccuracy,
circumstance or effect, individually or when aggregated with other changes, events, violations, inaccuracies, circumstances or
effects, that is materially adverse to the business, assets (including intangible assets), revenues, financial condition or results
of operations of such entity, if any, taken as a whole, it being understood that neither of the following alone or in combination
shall be deemed, in and of itself, to constitute a Material Adverse Effect: (a) changes attributable to the public announcement
or pendency of the transactions contemplated hereby, (b) changes in general national or regional economic conditions, or (c) changes
affecting the industry generally in which SN or MMT operate.
(c) For purposes of this Agreement,
the term "Person" shall mean any individual, corporation (including any non-profit corporation), general partnership,
limited partnership, limited liability partnership, joint venture, estate, trust, company (including any limited liability company
or joint stock company), firm or other enterprise, association, organization, entity or Governmental Entity.
8.3
Counterparts Facsimile Execution
.
For purposes of this Agreement, a document (or signature page thereto) signed and transmitted electronically or by facsimile machine
or telecopier is to be treated as an original document. The signature of any party thereon, for purposes hereof, is to be considered
as an original signature, and the document transmitted is to be considered to have the same binding effect as an original signature
on an original document. At the request of any party, an electronic, facsimile or telecopy document is to be re-executed in original
form by the parties who executed the facsimile or telecopy document. No party may raise the use of a computer, facsimile machine
or telecopier machine as a defense to the enforcement of the Agreement or any amendment or other document executed in compliance
with this Section
.
8.4
Entire Agreement; Third Party
Beneficiaries
. This Agreement and the documents and instruments and other agreements among the parties hereto as contemplated
by or referred to herein, including the Schedules hereto constitute the entire agreement among the parties with respect to the
subject matter hereof and supersede all prior agreements and understandings, both written and oral, among the parties with respect
to the subject matter hereof.
8.5
Severability
. In the
event that any provision of this Agreement, or the application thereof, becomes or is declared by a court of competent jurisdiction
to be illegal, void or unenforceable, the remainder of this Agreement will continue in full force and effect and the application
of such provision to other persons or circumstances will be interpreted so as reasonably to effect the intent of the parties hereto.
The parties further agree to replace such void or unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve, to the extent possible, the economic, business and other purposes of such void or unenforceable provision.
8.6
Survival
. All representations,
warranties, agreements and covenants contained in or made pursuant to this Agreement, or any Exhibit or Schedule hereto or thereto
or any certificate delivered at the Closing, shall survive (and not be affected by) the Closing, but all claims made by virtue
of such representations, warranties, agreements and covenants shall be made under, and subject to the limitations set forth in
this Article VIII.
8.7
Other Remedies; Specific
Performance
. Except as otherwise provided herein, any and all remedies herein expressly conferred upon a party will be deemed
cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon such party, and the exercise by
a party of any one remedy will not preclude the exercise of any other remedy. The parties hereto agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms
or were otherwise breached. It is accordingly agreed that the parties shall be entitled to seek an injunction or injunctions to
prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in any court of the United States
or any state having jurisdiction, this being in addition to any other remedy to which they are entitled at law or in equity.
8.8
Governing Law
. This Agreement
shall be governed by and construed in accordance with the laws of the State of Colorado, regardless of the laws that might otherwise
govern under applicable principles of conflicts of law thereof.
8.9
Rules of Construction
.
The parties hereto agree that they have been represented by counsel during the negotiation and execution of this Agreement and,
therefore, waive the application of any law, regulation, holding or rule of construction providing that ambiguities in an agreement
or other document will be construed against the party drafting such agreement or document.
8.10
Assignment
. No party
may assign either this Agreement or any of his, her or its rights, interests, or obligations hereunder without the prior written
approval of the other parties. Subject to the first sentence of this Section 8.10, this Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective heirs, successors and permitted assigns.
8.11
Attorneys Fees
. The
prevailing party in any litigation, arbitration, insolvency or other proceeding (“Proceeding”) relating to the enforcement
or interpretation of this Agreement may recover from the unsuccessful party all costs, expenses, and attorney’s fees (including
expert witness and other consultants’ fees and costs) relating to or arising out of (a) the Proceeding (whether or not the
Proceeding proceeds to judgment), and (b) any post-judgment or post-award proceeding including, without limitation, one to enforce
or collect any judgment or award resulting from the Proceeding. All such judgments and awards shall contain a specific provision
for the recovery of all such subsequently incurred costs, expenses, and attorney’s fees.
(Balance of page intentionally left
blank – signature page follows.)
IN WITNESS WHEREOF,
the parties hereto have caused this Agreement to be executed as of the date first written above.
|
MEDICINE MAN TECHNOLOGIES INC.
By:
s/ Andrew Williams
Andrew Williams, President
SUCCESS NUTRIENTS, INC.
By:
s/ Joshua Haupt
Joshua Haupt, President
SHAREHOLDERS:
s/ Nicholas F. Costello
Nicholas F. Costello
s/ Angelo Harris
Angelo Harris
s/ Terence A. Fitch
Terence A. Fitch
s/ Gregory S. Schneider
Gregory S. Schneider
s/ Michael J. Walsh
Michael J. Walsh
s/ Brent D. Emerson
Brent D. Emerson
s/ Gregory E. Gluckman
Gregory E. Gluckman
s/ Maxwell J. Statler
Maxwell J. Statler
s/ Jorge M. Vivanco
Jorge M. Vivanco
|
|
s/ Brian T. Herrmann
Brian T. Herrmann
s/ Paul E. Dowell
Paul E. Dowell
s/ Christopher E.
Freiboth
Christopher E. Freiboth
s/ Brenda Billings
Brenda Billings
s/ Paula
D. Upton
Paula D. Upton
s/ Christopher
J. Lynch
Christopher
J. Lynch
s/ Micah
L. Mitchell
Micah L. Mitchell
s/ Adam
A. Delorme
Adam A. Delorme
s/ Sean
E. McMechen
Sean E. McMechen
s/ Cole
R. Marone
Cole R. Marone
s/ Scott
A. Rickard
Scott A. Rickard
|
Appendix
E – Stock Plan
Medicine
Man Technologies, Inc.
2017
Equity Incentive Plan
1.
Purpose
Medicine Man Technologies, Inc.’s
2017 Equity Incentive Plan is intended to promote the best interests of Medicine Man Technologies, Inc. and its stockholders by
(i) assisting the Corporation and its Affiliates in the recruitment and retention of persons with ability and initiative,
(ii) providing an incentive to such persons to contribute to the growth and success of the Corporation’s businesses
by affording such persons equity participation in the Corporation and (iii) associating the interests of such persons with
those of the Corporation and its Affiliates and stockholders.
2.
Definitions
As used in this Plan the following definitions
shall apply:
A.
“
Affiliate
” means (i) any Subsidiary, (ii) any Parent, (iii) any corporation, or trade or business
(including, without limitation, a partnership, limited liability company or other entity) which is directly or indirectly controlled
fifty percent (50%) or more (whether by ownership of stock, assets or an equivalent ownership interest or voting interest) by the
Corporation or one of its Affiliates, and (iv) any other entity in which the Corporation or any of its Affiliates has a material
equity interest and which is designated as an “Affiliate” by resolution of the Committee.
B.
“
Award
” means any Option or Stock Award granted hereunder.
C.
“
Board
” means the Board of Directors of the Corporation.
D.
“
Code
” means the Internal Revenue Code of 1986, and any amendments thereto.
E.
“
Committee
” means the Board or any Committee of the Board to which the Board has delegated any responsibility
for the implementation, interpretation or administration of this Plan.
F.
“
Common Stock
” means the common stock, $0.001 par value, of the Corporation.
G.
“
Consultant
” means (i) any person performing consulting or advisory services for the Corporation or any
Affiliate, or (ii) a director of an Affiliate.
H.
“
Corporation
” means Medicine Man Technologies, Inc., a Nevada corporation.
I.
“
Corporation Law
” means the Nevada Revised Statutes, as the same shall be amended from time to time.
J.
“
Date of Grant
” means the date that the Committee approves an Option grant; provided, that all terms of such
grant, including the amount of shares subject to the grant, exercise price and vesting are defined at such time.
K. “
Deferral Period
” means the period of time during which Deferred Shares are subject to deferral limitations under Section 7.D of this Plan.
L.
“
Deferred Shares
” means an award pursuant to Section 7.D of this Plan of the right to receive shares of Common
Stock at the end of a specified Deferral Period.
M.
“
Director
” means a member of the Board.
N.
“
Eligible Person
” means an employee of the Corporation or an Affiliate (including a corporation that becomes
an Affiliate after the adoption of this Plan), a Director or a Consultant to the Corporation or an Affiliate (including a corporation
that becomes an Affiliate after the adoption of this Plan).
O.
“
Exchange Act
” means the Securities Exchange Act of 1934, as amended.
P.
“
Fair Market Value
” means, on any given date, the current fair market value of the shares of Common Stock
as determined as follows:
|
(i)
|
If the Common Stock is traded on a national securities exchange, the closing price for the day of determination as quoted on such market or exchange, including the NASDAQ Global Market or NASDAQ Capital Market, which is the primary market or exchange for trading of the Common Stock or if no trading occurs on such date, the last day on which trading occurred, or such other appropriate date as determined by the Committee in its discretion, as reported in
The Wall Street Journal
or such other source as the Committee deems reliable;
|
|
(ii)
|
If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, its Fair Market Value shall be the mean between the high and the low asked prices for the Common Stock for the day of determination; or
|
|
(iii)
|
In the absence of an established market for the Common Stock, Fair Market Value shall be determined by the Committee in good faith.
|
Q.
“
Family Member”
means a parent, child, spouse or sibling.
R.
“
Incentive Stock Option
” means an Option (or portion thereof) intended to qualify for special tax treatment
under Section 422 of the Code.
S. “
Nonqualified Stock Option
” means an Option (or portion thereof) which is not intended or does not for
any reason qualify as an Incentive Stock Option.
T.
“
Option
” means any option to purchase shares of Common Stock granted under this Plan.
U.
“
Parent
” means any corporation (other than the Corporation) in an unbroken chain of corporations ending with
the Corporation if each of the corporations (other than the Corporation) owns stock possessing at least fifty percent (50%) of
the total combined voting power of all classes of stock in one of the other corporations in such chain.
V.
“
Participant
” means an Eligible Person who (i) is selected by the Committee or an authorized officer of
the Corporation to receive an Award and (ii) is party to an agreement setting forth the terms of the Award, as appropriate.
W.
“
Performance Agreement
” means an agreement described in Section 8 of this Plan.
X.
“
Performance Objectives
” means the performance objectives established by the Committee pursuant to this Plan
for Participants who have received grants of Awards. Performance Objectives may be described in terms of Corporation-wide objectives
or objectives that are related to the performance of the individual Participant or the Affiliate, division, department or function
within the Corporation or Affiliate in which the Participant is employed or has responsibility. Any Performance Objectives applicable
to Awards to the extent that such an Award is intended to qualify as “Performance Based Compensation” under Section
162(m) of the Code shall be limited to specified levels of or increases in the Corporation’s or a business unit’s return
on equity, earnings per share, total earnings, earnings growth, return on capital, return on assets, economic value added, earnings
before interest and taxes, earnings before interest, taxes, depreciation and amortization, sales growth, gross margin return on
investment, increase in the Fair Market Price of the shares, net operating profit, cash flow (including, but not limited to, operating
cash flow and free cash flow), cash flow return on investments (which equals net cash flow divided by total capital), internal
rate of return, increase in net present value or expense targets. The Awards intended to qualify as “Performance Based Compensation”
under Section 162(m) of the Code shall be pre-established in accordance with applicable regulations under Section 162(m) of the
Code and the determination of attainment of such goals shall be made by the Committee. If the Committee determines that a change
in the business, operations, corporate structure or capital structure of the Corporation (including an event described in Section
9), or the manner in which it conducts its business, or other events or circumstances render the Performance Objectives unsuitable,
the Committee may modify such Performance Objectives or the related minimum acceptable level of achievement, in whole or in part,
as the Committee deems appropriate and equitable; provided, however, that no such modification shall be made to an Award intended
to qualify as “Performance Based Compensation” under Section 162(m) of the Code unless the Committee determines that
such modification will not result in loss of such qualification or the Committee determines that loss of such qualification is
in the best interests of the Corporation.
Y.
“
Performance Period
” means a period of time established under Section 8 of this Plan within which the Performance
Objectives relating to a Stock Award are to be achieved.
Z.
“
Performance Share
” means an award pursuant to Section 8 of this Plan of the right to receive shares of Common
Stock upon the achievement of specified Performance Objectives.
AA. “
Plan
”
means this Medicine Man Technologies, Inc. 2017 Equity Incentive Plan.
BB. “
Repricing
”
means, other than in connection with an event described in Section 9 of this Plan, (i) lowering the exercise price of
an Option after it has been granted or (ii) canceling an Option at a time when the exercise price exceeds the then-Fair Market
Value of the Common Stock in exchange for another Option.
CC.
“Restricted
Stock Award”
means an award of Common Stock under Section 7.B.
DD.
“Securities
Act”
means the Securities Act of 1933, as amended.
EE.
“
Stock Award
” means a Stock Bonus Award, Restricted Stock Award, Stock Appreciation Right, Deferred Shares,
or Performance Shares.
FF.
“
Stock Bonus Award
” means an award of Common Stock under Section 7.A.
GG. “
Stock
Award Agreement
” means a written agreement between the Corporation and a Participant setting forth the specific terms
and conditions of a Stock Award granted to the Participant under Section 7. Each Stock Award Agreement shall be subject to the
terms and conditions of this Plan and shall include such terms and conditions as the Committee shall authorize.
HH. “
Stock
Option Agreement
” means an agreement (written or electronic) between the Corporation and a Participant setting forth
the specific terms and conditions of an Option granted to the Participant. Each Stock Option Agreement shall be subject to the
terms and conditions of this Plan and shall include such terms and conditions as the Committee shall authorize.
II.
“
Subsidiary
” means any corporation (other than the Corporation) in an unbroken chain of corporations beginning
with the Corporation if each of the corporations (other than the last corporation in the unbroken chain) owns stock possessing
at least fifty percent (50%) of the total combined voting power of all classes of stock in one of the other corporations in such
chain.
JJ.
“
Ten Percent Owner
” means any Eligible Person owning at the time an Option is granted more than ten percent
(10%) of the total combined voting power of all classes of stock of the Corporation or of a Parent or Subsidiary. An individual
shall, in accordance with Section 424(d) of the Code, be considered to own any voting stock owned (directly or indirectly) by or
for such Eligible Person’s brothers, sisters, spouse, ancestors and lineal descendants and any voting stock owned (directly
or indirectly) by or for a corporation, partnership, estate or trust shall be considered as being owned proportionately by or for
its stockholders, partners, or beneficiaries.
3.
implementation, interpretation and Administration
A.
Delegation
to Board Committee.
The Board shall have the sole authority to implement, interpret, and/or administer this Plan unless
the Board delegates all or any portion of its authority to implement, interpret, and/or administer this Plan to a Committee. To
the extent not prohibited by the Certificate of Incorporation or Bylaws of the Corporation, the Board may delegate all or a portion
of its authority to implement, interpret, and/or administer this Plan to a Committee of the Board appointed by the Board and constituted
in compliance with the applicable Corporation Law. The Committee shall consist solely of two (2) or more Directors who are
(i) Non-Employee Directors (within the meaning of Rule 16b-3 under the Exchange Act) for purposes of exercising administrative
authority with respect to Awards granted to Eligible Persons who are subject to Section 16 of the Exchange Act; (ii) to
the extent required by the rules of the market on which the Corporation’s shares are traded or the exchange on which the
Corporation’s shares are listed, “independent” within the meaning of such rules; and (iii) at such times
as an Award under this Plan by the Corporation is subject to Section 162(m) of the Code (to the extent relief from the limitation
of Section 162(m) of the Code is sought with respect to Awards and administration of the Awards by a committee of “outside
directors” is required to receive such relief), “outside directors” within the meaning of Section 162(m) of the
Code.
B.
Delegation
to Officers
. The Committee may delegate to one or more officers of the Corporation the authority to grant and administer Awards
to Eligible Persons who are not Directors or executive officers of the Corporation; provided that the Committee shall have fixed
the total number of shares of Common Stock that may be subject to such Awards. No officer holding such a delegation is authorized
to grant Awards to himself or herself. In addition to the Committee, the officer or officers to whom the Committee has delegated
the authority to grant and administer Awards shall have all powers delegated to the Committee with respect to such Awards.
C.
Powers
of the Committee
. Subject to the provisions of this Plan, and in the case of a Committee appointed by the Board, the specific
duties delegated to such Committee, the Committee (and the officers to whom the Committee has delegated such authority) shall have
the authority:
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(i)
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To construe and interpret all provisions of this Plan and all Stock Option Agreements, Stock Award Agreements, Performance Agreements, or any other agreement under this Plan.
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(ii)
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To determine the Fair Market Value of Common Stock in the absence of an established market for the Common Stock.
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(iii)
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To select the Eligible Persons to whom Awards are granted from time to time hereunder.
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(iv)
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To determine the number of shares of Common Stock covered by an Award; to determine whether an Option shall be an Incentive Stock Option or Nonqualified Stock Option; and to determine such other terms and conditions, not inconsistent with the terms of this Plan, of each such Award. Such terms and conditions include, but are not limited to, the exercise price of an Option, purchase price of Common Stock subject to a Stock Award, the time or times when Options or a Stock Award may be exercised or Common Stock issued thereunder, the vesting schedule of an Option, the right of the Corporation to repurchase Common Stock issued pursuant to the exercise of an Option or a Stock Award and other restrictions or limitations (in addition to those contained in this Plan) on the forfeitability or transferability of Options, Stock Awards or Common Stock issued upon exercise of an Option or pursuant to a Stock Award. Such terms may include conditions which shall be determined by the Committee and need not be uniform with respect to Participants.
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(v)
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To accelerate the time at which any Option or Stock Award may be exercised, or the time at which a Stock Award or Common Stock issued under this Plan may become transferable or non-forfeitable.
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(vi)
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To determine whether and under what circumstances an Option or Stock Award may be settled in cash, shares of Common Stock or other property under Section 6.H instead of in Common Stock.
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(vii)
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To waive, amend, cancel, extend, renew, accept the surrender of, modify or accelerate the vesting of or lapse of restrictions on all or any portion of an outstanding Award. Except as otherwise provided by this Plan, Stock Option Agreement, Stock Award Agreement or Performance Agreement or as required to comply with applicable law, regulation or rule, no amendment, cancellation or modification shall, without a Participant’s consent, adversely affect any rights of the Participant; provided, however, that (x) an amendment or modification that may cause an Incentive Stock Option to become a Nonqualified Stock Option shall not be treated as adversely affecting the rights of the Participant and (y) any other amendment or modification of any Stock Option Agreement, Stock Award Agreement or Performance Agreement that does not, in the opinion of the Committee, adversely affect any rights of any Participant, shall not require such Participant’s consent. Notwithstanding the foregoing, the restrictions on the Repricing of Options, as set forth in this Plan, may not be waived.
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(viii)
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To prescribe the form of Stock Option Agreements, Stock Award Agreements, Performance Agreements, or any other agreements under this Plan; to adopt policies and procedures for the exercise of Options or Stock Awards, including the satisfaction of withholding obligations; to adopt, amend, and rescind policies and procedures pertaining to the administration of this Plan; and to make all other determinations necessary or advisable for the administration of this Plan. Except for the due execution of the award agreement by both the Corporation and the Participant, the Award’s effectiveness will not be dependent on any signature unless specifically so provided in the award agreement.
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The express grant in this Plan of any specific
power to the Committee shall not be construed as limiting any power or authority of the Committee; provided that the Committee
may not exercise any right or power reserved to the Board. Any decision made, or action taken, by the Committee or in connection
with the implementation, interpretation, and administration of this Plan shall be final, conclusive and binding on all persons
having an interest in this Plan.
4.
Eligibility
A.
Eligibility
for Awards
. Awards, other than Incentive Stock Options, may be granted to any Eligible Person selected by the Committee. Incentive
Stock Options may be granted only to employees of the Corporation or a Parent or Subsidiary.
B.
Eligibility
of Consultants
. A Consultant shall be an Eligible Person only if the offer or sale of the Corporation’s securities would
be eligible for registration on Form S-8 Registration Statement (or any successor form) because of the identity and nature of
the service provided by such person, unless the Corporation determines that an offer or sale of the Corporation’s securities
to such person will satisfy another exemption from the registration under the Securities Act and complies with the securities
laws of all other jurisdictions applicable to such offer or sale. Accordingly, an Award may not be granted pursuant to this Plan
for the purpose of the Corporation obtaining financing or for investor relations purposes.
C.
Substitution
Awards
. The Committee may make Awards under this Plan by assumption, in substitution or replacement of performance shares,
phantom shares, stock awards, stock options or similar awards granted by another entity (including an Affiliate) in connection
with a merger, consolidation, acquisition of property or stock or similar transaction. Notwithstanding any provision of this Plan
(other than the maximum number of shares of Common Stock that may be issued under this Plan), the terms of such assumed, substituted,
or replaced Awards shall be as the Committee, in its discretion, determines is appropriate.
5.
Common Stock Subject to Plan
A.
Share
Reserve and Limitations on Grants
. The maximum aggregate number of shares of Common Stock that may be (i) issued under
this Plan pursuant to the exercise of Options (without regard to whether payment on exercise of the Stock Option is made in cash
or shares of Common Stock) and (ii) issued pursuant to Stock Awards, shall be 1,500,000 shares in the aggregate. The number of
shares of Common Stock subject to the Plan shall be subject to adjustment as provided in Section 9. Notwithstanding any provision
hereto to the contrary, shares subject to the Plan shall include shares forfeited in a prior year as provided herein. For purposes
of determining the number of shares of Common Stock available under this Plan, shares of Common Stock withheld by the Corporation
to satisfy applicable tax withholding obligations pursuant to Section 10 of this Plan shall be deemed issued under this Plan.
No single participant may receive more than 25% of the total Options awarded in any single year.
B.
Reversion
of Shares
. If an Option or Stock Award is terminated, expires or becomes unexercisable, in whole or in part, for any reason,
the unissued or unpurchased shares of Common Stock which were subject thereto shall become available for future grant under this
Plan. Shares of Common Stock that have been actually issued under this Plan shall not be returned to the share reserve for future
grants under this Plan; except that shares of Common Stock issued pursuant to a Stock Award which are forfeited to the Corporation
or repurchased by the Corporation at the original purchase price of such shares, shall be returned to the share reserve for future
grant under this Plan.
C.
Source
of Shares
. Common Stock issued under this Plan may be shares of authorized and unissued Common Stock or shares of previously
issued Common Stock that have been reacquired by the Corporation.
6.
Options
A.
Award
.
In accordance with the provisions of Section 4, the Committee will designate each Eligible Person to whom an Option is to
be granted and will specify the number of shares of Common Stock covered by such Option. The Stock Option Agreement shall specify
whether the Option is an Incentive Stock Option or Nonqualified Stock Option, the exercise price of such Option, the vesting schedule
applicable to such Option, the expiration date of such Option, events of termination of such Option, and any other terms of such
Option. No Option that is intended to be an Incentive Stock Option shall be invalid for failure to qualify as an Incentive Stock
Option.
B.
Option
Price
. The exercise price per share for Common Stock subject to an Option shall be determined by the Committee, but shall comply
with the following:
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(i)
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The exercise price per share for Common Stock subject to an Option shall not be less than one hundred percent (100%) of the Fair Market Value on the date of grant.
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(ii)
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The exercise price per share for Common Stock subject to an Incentive Stock Option granted to a Participant who is deemed to be a Ten Percent Owner on the date such option is granted, shall not be less than one hundred ten percent (110%) of the Fair Market Value on the date of grant.
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C.
Maximum
Option Period
. The maximum period during which an Option may be exercised shall be ten (10) years from the date such Option
was granted. In the case of an Incentive Stock Option that is granted to a Participant who is or is deemed to be a Ten Percent
Owner on the date of grant, such Option shall not be exercisable after the expiration of five (5) years from the date of grant.
D.
Maximum
Value of Options which are Incentive Stock Options
. To the extent that the aggregate Fair Market Value of the Common Stock
with respect to which Incentive Stock Options granted to any Participant are exercisable for the first time during any calendar
year (under all stock option plans of the Corporation or any Parent or Subsidiary) exceeds $100,000 (or such other amount provided
in Section 422 of the Code), the Options shall not be deemed to be Incentive Stock Options. For purposes of this section,
the Fair Market Value of the Common Stock will be determined as of the time the Incentive Stock Option with respect to the Common
Stock is granted. This section will be applied by taking Incentive Stock Options into account in the order in which they are granted.
E.
Nontransferability
.
Options granted under this Plan which are intended to be Incentive Stock Options shall be nontransferable except by will or by
the laws of descent and distribution and, during the lifetime of the Participant, shall be exercisable by only the Participant
to whom the Incentive Stock Option is granted. Except to the extent transferability of a Nonqualified Stock Option is provided
for in the Stock Option Agreement or is approved by the Committee, during the lifetime of the Participant to whom the Nonqualified
Stock Option is granted, such Option may be exercised only by the Participant. If the Stock Option Agreement so provides or the
Committee so approves, a Nonqualified Stock Option may be transferred by a Participant through a gift or domestic relations order
to the Participant’s family members to the extent such transfer complies with applicable securities laws and regulations
and provided that such transfer is not a transfer for value (within the meaning of applicable securities laws and regulations).
The holder of a Nonqualified Stock Option transferred pursuant to this section shall be bound by the same terms and conditions
that governed the Option during the period that it was held by the Participant. No right or interest of a Participant in any Option
shall be liable for, or subject to, any lien, obligation, or liability of such Participant, unless such obligation is to the Corporation
itself or to an Affiliate.
F.
Vesting
.
Options will vest as provided in the Stock Option Agreement.
G.
Termination
.
Options will terminate as provided in the Stock Option Agreement.
H.
Exercise
.
Subject to the provisions of this Plan and the applicable Stock Option Agreement, an Option may be exercised to the extent vested
in whole at any time or in part from time to time at such times and in compliance with such requirements as the Committee shall
determine. A partial exercise of an Option shall not affect the right to exercise the Option from time to time in accordance with
this Plan and the applicable Stock Option Agreement with respect to the remaining shares subject to the Option. An Option may not
be exercised with respect to fractional shares of Common Stock. The Participant may face certain restrictions on his/her ability
to exercise Options and/or sell underlying shares when such Participant is potentially in possession of insider information. The
Corporation will make the Participant aware of any formal insider trading policy it adopts, and the provisions of such insider
trading policy (including any amendments thereto) shall be binding upon the Participant.
I.
Payment
.
Unless otherwise provided by the Stock Option Agreement, payment of the exercise price for an Option shall be made in cash or a
cash equivalent acceptable to the Committee or if the Common Stock is traded on an established securities market, by payment of
the exercise price by a broker-dealer or by the Option holder with cash advanced by the broker-dealer if the exercise notice is
accompanied by the Option holder’s written irrevocable instructions to deliver the Common Stock acquired upon exercise of
the Option to the broker-dealer or by delivery of the Common Stock to the broker-dealer with an irrevocable commitment by the broker-dealer
to forward the exercise price to the Corporation. With the consent of the Committee, payment of all or a part of the exercise price
of an Option may also be made (i) by surrender to the Corporation (or delivery to the Corporation of a properly executed form
of attestation of ownership) of shares of Common Stock that have been held for such period prior to the date of exercise as is
necessary to avoid adverse accounting treatment to the Corporation, or (ii) any other method acceptable to the Committee.
If Common Stock is used to pay all or part of the exercise price, the sum of the cash or cash equivalent and the Fair Market Value
(determined as of the date of exercise) of the shares surrendered must not be less than the Option price of the shares for which
the Option is being exercised.
J.
Stockholder
Rights
. No Participant shall have any rights as a stockholder with respect to shares subject to an Option until the date of
exercise of such Option and the certificate for shares of Common Stock to be received on exercise of such Option has been issued
by the Corporation.
K.
Disposition
and Stock Certificate Legends for Incentive Stock Option Shares
. A Participant shall notify the Corporation of any sale or
other disposition of Common Stock acquired pursuant to an Incentive Stock Option if such sale or disposition occurs (i) within
two years of the grant of an Option or (ii) within one year of the issuance of the Common Stock to the Participant. Such notice
shall be in writing and directed to the Chief Financial Officer of the Corporation or is his/her absence, the Chief Executive Officer.
The Corporation may require that certificates evidencing shares of Common Stock purchased upon the exercise of Incentive Stock
Options issued under this Plan be endorsed with a legend in substantially the following form:
THE SHARES EVIDENCED BY THIS CERTIFICATE
MAY NOT BE SOLD OR TRANSFERRED PRIOR TO ___, 20___, IN THE ABSENCE OF A WRITTEN STATEMENT FROM THE CORPORATION TO THE EFFECT THAT
THE CORPORATION IS AWARE OF THE FACTS OF SUCH SALE OR TRANSFER.
The blank contained in this legend shall
be filled in with the date that is the later of (i) one year and one day after the date of the exercise of such Incentive Stock
Option or (ii) two years and one day after the grant of such Incentive Stock Option.
L.
No
Repricing
. In no event shall the Committee permit a Repricing of any Option without the approval of the stockholders of the
Corporation.
7.
Stock Awards
A.
Stock
Bonus Awards
. Stock Bonus Awards may be granted by the Committee. Each Stock Award Agreement for a Stock Bonus Award shall
be in such form and shall contain such terms and conditions (including provisions relating to consideration, vesting, reacquisition
of shares following termination, and transferability of shares) as the Committee shall deem appropriate. The terms and conditions
of Stock Award Agreements for Stock Bonus Awards may change from time to time and need not be uniform with respect to Participants,
and the terms and conditions of separate Stock Bonus Awards need not be identical.
B.
Restricted
Stock Awards
. Restricted Stock Awards may be granted by the Committee. Each Stock Award Agreement for a Restricted Stock Award
shall be in such form and shall contain such terms and conditions (including provisions relating to purchase price, consideration,
vesting, reacquisition of shares following termination, and transferability of shares) as the Committee shall deem appropriate.
The terms and conditions of the Stock Award Agreements for Restricted Stock Awards may change from time to time and need not be
uniform with respect to Participants, and the terms and conditions of separate Restricted Stock Awards need not be identical. Vesting
of any grant of Restricted Stock Awards may be further conditioned upon the attainment of Performance Objectives established by
the Committee in accordance with the applicable provisions of Section 8 of this Plan regarding Performance Shares.
C.
Deferred
Shares.
The Committee may authorize grants of Deferred Shares to Participants upon the recommendation of the Corporation’s
management, and upon such terms and conditions as the Committee may determine in accordance with the following provisions:
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(i)
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Each grant shall constitute the agreement by the Corporation to issue or transfer shares of Common Stock to the Participant in the future in consideration of the performance of services, subject to the fulfillment during the Deferral Period of such conditions as the Committee may specify.
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(ii)
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Each grant may be made without additional consideration from the Participant or in consideration of a payment by the Participant that is less than the Fair Market Value on the date of grant.
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(iii)
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Each grant shall provide that the Deferred Shares covered thereby shall be subject to a Deferral Period, which shall be fixed by the Committee on the date of grant, and any grant or sale may provide for the earlier termination of such period in the event of a change in control of the Corporation or other similar transaction or event.
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(iv)
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During the Deferral Period, the Participant shall not have any right to transfer any rights under the subject Award, shall not have any rights of ownership in the Deferred Shares and shall not have any right to vote such shares, but the Committee may on or after the date of grant, authorize the payment of dividend or other distribution equivalents on such shares in cash or additional shares on a current, deferred or contingent basis.
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(v)
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Any grant, or the vesting thereof, may be further conditioned upon the attainment of Performance Objectives established by the Committee in accordance with the applicable provisions of Section 8 of this Plan regarding Performance Shares.
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(vi)
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Each grant shall be evidenced by an agreement delivered to and accepted by the Participant and containing such terms and provisions as the Committee may determine consistent with this Plan. The terms and conditions of the agreements for Deferred Shares may change from time to time and need not be uniform with respect to Participants, and the terms and conditions of separate Deferred Shares need not be identical.
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8.
Performance Shares
A.
The Committee may authorize grants of Performance Shares, which shall become payable to the Participant upon the achievement of
specified Performance Objectives, upon such terms and conditions as the Committee may determine in accordance with the following
provisions:
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(i)
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Each grant shall specify the number of Performance Shares to which it pertains, which may be subject to adjustment to reflect changes in compensation or other factors.
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(ii)
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The Performance Period with respect to each Performance Share shall commence on the date established by the Committee and may be subject to earlier termination in the event of a change in control of the Corporation or similar transaction or event.
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(iii)
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Each grant shall specify the Performance Objectives that are to be achieved by the Participant.
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(iv)
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Each grant may specify in respect of the specified Performance Objectives a minimum acceptable level of achievement below which no payment will be made and may set forth a formula for determining the amount of any payment to be made if performance is at or above such minimum acceptable level but falls short of the maximum achievement of the specified Performance Objectives.
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(v)
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Each grant shall specify the time and manner of payment of Performance Shares that shall have been earned, and any grant may specify that any such amount may be paid by the Corporation in cash, shares of Common Stock or any combination thereof and may either grant to the Participant or reserve to the Committee the right to elect among those alternatives.
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(vi)
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Any grant of Performance Shares may specify that the amount payable with respect thereto may not exceed a maximum specified by the Committee on the date of grant.
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(vii)
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Any grant of Performance Shares may provide for the payment to the Participant of dividend or other distribution equivalents thereon in cash or additional shares of Common Stock on a current, deferred or contingent basis.
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(viii)
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If provided in the terms of the grant and subject to the requirements of Section 162(m) of the Code (in the case of awards intended to qualify for exception therefrom), the Committee may adjust Performance Objectives and the related minimum acceptable level of achievement if, in the sole judgment of the Committee, events or transactions have occurred after the date of grant that are unrelated to the performance of the Participant and result in distortion of the Performance Objectives or the related minimum acceptable level of achievement.
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(ix)
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Each grant shall be evidenced by an agreement that shall be delivered to and accepted by the Participant, which shall state that the Performance Shares are subject to all of the terms and conditions of this Plan and such other terms and provisions as the Committee may determine consistent with this Plan. The terms and conditions of the agreements for Performance Shares may change from time to time and need not be uniform with respect to Participants, and the terms and conditions of separate Performance Shares need not be identical.
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(x)
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Until the achievement of the Performance Objectives and the resulting issuance of the Performance Shares, the Participant shall not have any rights as a stockholder in the Performance Shares and shall not have any right to vote such shares, but the Committee may on or after the date of grant, authorize the payment of dividend or other distribution equivalents on such shares in cash or additional shares on a current, deferred or contingent basis.
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9.
Changes in Capital Structure
A.
No
Limitations of Rights
. The existence of outstanding Awards shall not affect in any way the right or power of the Corporation
or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Corporation’s
capital structure or its business, or any merger or consolidation of the Corporation, or any issuance of bonds, debentures, preferred
or prior preference stock ahead of or affecting the Common Stock or the rights thereof, or the dissolution or liquidation of the
Corporation, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether
of a similar character or otherwise.
B.
Changes
in Capitalization
. If the Corporation shall effect a subdivision or consolidation of shares or other capital readjustment,
the payment of a stock dividend, or other increase or reduction of the number of shares of the Common Stock outstanding, without
receiving consideration therefore in money, services or property, then (i) the number, class, and per share price of shares of
Common Stock subject to outstanding Options and other Awards hereunder and (ii) the number of and class of shares then reserved
for issuance under this Plan and the maximum number of shares for which Awards may be granted to a Participant during a specified
time period shall be appropriately and proportionately adjusted. The conversion of convertible securities of the Corporation shall
not be treated as effected “without receiving consideration.” The Committee shall make such adjustments, and its determinations
shall be final, binding and conclusive.
C.
Merger,
Consolidation or Asset Sale
. If the Corporation is merged or consolidated with another entity or sells or otherwise disposes
of substantially all of its assets to another company while Options or Stock Awards remain outstanding under this Plan, unless
provisions are made in connection with such transaction for the continuance of this Plan and/or the assumption or substitution
of such Options or Stock Awards with new options or stock awards covering the stock of the successor company, or parent or subsidiary
thereof, with appropriate adjustments as to the number and kind of shares and prices, then all outstanding Options and Stock Awards
which have not been continued, assumed or for which a substituted award has not been granted shall, whether or not vested or then
exercisable, unless otherwise specified in the Stock Option Agreement or Stock Award Agreement, terminate immediately as of the
effective date of any such merger, consolidation or sale.
D.
Limitation
on Adjustment
. Except as previously expressly provided, neither the issuance by the Corporation of shares of stock of any class,
or securities convertible into shares of stock of any class, for cash or property, or for labor or services either upon direct
sale or upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations of the Corporation
convertible into such shares or other securities, nor the increase or decrease of the number of authorized shares of stock, nor
the addition or deletion of classes of stock, shall affect, and no adjustment by reason thereof shall be made with respect to,
the number, class or price of shares of Common Stock then subject to outstanding Options or Stock Awards.
10.
Withholding of Taxes
The Corporation or an Affiliate shall have
the right, before any certificate for any Common Stock is delivered, to deduct or withhold from any payment owed to a Participant
any amount that is necessary in order to satisfy any withholding requirement that the Corporation or Affiliate in good faith believes
is imposed upon it in connection with U.S federal, state, or local taxes, including transfer taxes, as a result of the issuance
of, or lapse of restrictions on, such Common Stock, or otherwise require such Participant to make provision for payment of any
such withholding amount. Subject to such conditions as may be established by the Committee, the Committee may permit a Participant
to (i) have Common Stock otherwise issuable under an Option or Stock Award withheld to the extent necessary to comply with
minimum statutory withholding rate requirements; (ii) tender back to the Corporation shares of Common Stock received pursuant
to an Option or Stock Award to the extent necessary to comply with minimum statutory withholding rate requirements for supplemental
income; (iii) deliver to the Corporation previously acquired Common Stock; (iv) have funds withheld from payments of
wages, salary or other cash compensation due the Participant; (v) pay the Corporation or its Affiliate in cash, in order to
satisfy part or all of the obligations for any taxes required to be withheld or otherwise deducted and paid by the Corporation
or its Affiliate with respect to the Option of Stock Award; or (vi) establish a 10b5-1 trading plan for withheld stock designed
to facilitate the sale of stock in connection with the vesting of such shares, the proceeds of which shall be utilized to make
all applicable withholding payments in a manner to be coordinated by the Corporation’s Chief Financial Officer.
11.
Compliance with Law and Approval of Regulatory Bodies
A.
General
Requirements
. No Option or Stock Award shall be exercisable, no Common Stock shall be issued, no certificates for shares of
Common Stock shall be delivered, and no payment shall be made under this Plan except in compliance with all applicable federal
and state laws and regulations (including, without limitation, withholding tax requirements), any listing agreement to which the
Corporation is a party, and the rules of all domestic stock exchanges or quotation systems on which the Corporation’s shares
may be listed. The Corporation shall have the right to rely on an opinion of its counsel as to such compliance. In the absence
of an effective and current registration statement on an appropriate form under the Securities Act, or a specific exemption from
the registration requirements of the Securities Act, shares of Common Stock issued under this Plan shall be restricted shares.
Any share certificate issued to evidence Common Stock when a Stock Award is granted or for which an Option is exercised may bear
such restrictive legends and statements as the Committee may deem advisable to assure compliance with federal and state laws and
regulations. No Option or Stock Award shall be exercisable, no Stock Award shall be granted, no Common Stock shall be issued, no
certificate for shares shall be delivered, and no payment shall be made under this Plan until the Corporation has obtained such
consent or approval as the Committee may deem advisable from regulatory bodies having jurisdiction over such matters.
B.
Participant
Representations
. The Committee may require that a Participant, as a condition to receipt or exercise of a particular award,
execute and deliver to the Corporation a written statement, in form satisfactory to the Committee, in which the Participant represents
and warrants that the shares are being acquired for such person’s own account, for investment only and not with a view to
the resale or distribution thereof. The Participant shall, at the request of the Committee, be required to represent and warrant
in writing that any subsequent resale or distribution of shares of Common Stock by the Participant shall be made only pursuant
to either (i) a registration statement on an appropriate form under the Securities Act of 1933, which registration statement has
become effective and is current with regard to the shares being sold, or (ii) a specific exemption from the registration requirements
of the Securities Act of 1933, but in claiming such exemption the Participant shall, prior to any offer of sale or sale of such
shares, obtain a prior favorable written opinion of counsel, in form and substance satisfactory to counsel for the Corporation,
as to the application of such exemption thereto.
12.
General Provisions
A.
Effect
on Employment and Service
. Neither the adoption of this Plan, its operation, nor any documents describing or referring to this
Plan (or any part thereof) shall (i) confer upon any individual any right to continue in the employ or service of the Corporation
or an Affiliate, (ii) in any way affect any right and power of the Corporation or an Affiliate to change an individual’s
duties or terminate the employment or service of any individual at any time with or without assigning a reason therefor or (iii) except
to the extent the Committee grants an Option or Stock Award to such individual, confer on any individual the right to participate
in the benefits of this Plan.
B.
Use
of Proceeds.
The proceeds received by the Corporation from any sale of Common Stock pursuant to this Plan shall be used
for general corporate purposes.
C.
Unfunded
Plan
. This Plan, insofar as it provides for grants, shall be unfunded, and the Corporation shall not be required to segregate
any assets that may at any time be represented by grants under this Plan. Any liability of the Corporation to any Participant with
respect to any grant under this Plan shall be based solely upon any contractual obligations that may be created pursuant to this
Plan. No such obligation of the Corporation shall be deemed to be secured by any pledge of, or other encumbrance on, any property
of the Corporation.
D.
Rules
of Construction
. Headings are given to the Sections of this Plan solely as a convenience to facilitate reference. The reference
to any statute, regulation, or other provision of law shall be construed to refer to any amendment to or successor of such provision
of law.
E.
Choice
of Law
. This Plan and all Stock Option Agreements, Stock Award Agreements, and Performance Agreements (or any other agreements)
entered into under this Plan shall be interpreted under the Nevada Corporation Law excluding (to the greatest extent permissible
by law) any rule of law that would cause the application of the laws of any jurisdiction other than the Nevada Corporation Law.
F.
Fractional
Shares
. The Corporation shall not be required to issue fractional shares pursuant to this Plan. The Committee may provide for
elimination of fractional shares or the settlement of such fractional shares in cash.
G.
Foreign
Employees
. In order to facilitate the making of any grant or combination of grants under this Plan, the Committee may provide
for such special terms for Awards to Participants who are foreign nationals, or who are employed by the Corporation or any Affiliate
outside of the United States, as the Committee may consider necessary or appropriate to accommodate differences in local law, tax
policy or custom. Moreover, the Committee may approve such supplements to, or amendments, restatements or alternative versions
of, this Plan as it may consider necessary or appropriate for such purposes without thereby affecting the terms of this Plan, as
then in effect, unless this Plan could have been amended to eliminate such inconsistency without further approval by the stockholders
of the Corporation.
13.
Amendment and Termination
The Board may amend or terminate this Plan
from time to time; provided, however, stockholder approval shall be required for any amendment that (i) increases the aggregate
number of shares of Common Stock that may be issued under this Plan, except as contemplated herein; (ii) changes the class
of employees eligible to receive Incentive Stock Options; (iii) modifies the restrictions on re-pricings set forth in this Plan;
or (iv) is required by the terms of any applicable law, regulation or rule, including the rules of any market on which the
Corporation shares are traded or exchange on which the Corporation shares are listed. Except as specifically permitted by this
Plan, any Stock Option Agreement or any Stock Award Agreement or as required to comply with applicable law, regulation or rule,
no amendment shall, without a Participant’s consent, adversely affect any rights of such Participant under any Option or
Stock Award outstanding at the time such amendment is made; provided, however, that an amendment that may cause an Incentive Stock
Option to become a Nonqualified Stock Option shall not be treated as adversely affecting the rights of the Participant. Any amendment
requiring stockholder approval shall be approved by the stockholders of the Corporation within twelve (12) months of the date
such amendment is adopted by the Board.
14.
Effective Date of Plan; Duration of Plan
A.
This Plan shall be effective upon adoption by the Board, subject to approval within twelve (12) months by the stockholders
of the Corporation. Unless and until the Plan has been approved by the stockholders of the Corporation, no Option or Stock Award
may be exercised, no shares of Common Stock may be issued under this Plan. In the event that the stockholders of the Corporation
shall not approve the Plan within such twelve (12) month period, the Plan and any previously granted Options or Stock Awards
shall terminate.
B.
Unless previously terminated, this Plan will terminate ten (10) years after the earlier of (i) the date this Plan is
adopted by the Board, or (ii) the date this Plan is approved by the stockholders, except that Awards that are granted under
this Plan prior to its termination will continue to be administered under the terms of this Plan until the Awards terminate, expire
or are exercised.
IN WITNESS WHEREOF
, the Corporation
has caused this Plan to be executed by a duly authorized officer as of the date of adoption of this Plan by the Board of Directors.
MEDICINE MAN TECHNOLOGIES, INC.
By:
/s/ Andrew Williams
Andrew Williams
Chief Executive Officer