Nobody could be shocked that they’re discovering elevating capital just a little little bit of a problem.

 

SEC NOTICE

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 1-U

Current Report Pursuant to Regulation A

Date of Report: As of June 23, 2020

(Date of earliest occasion reported)

 

HIGHTIMES HOLDING CORP.

(Exact identify of issuer as laid out in its constitution)

Delaware 81-4706993
(State or different jurisdiction (I.R.S. Employer
of incorporation or group) Identification No.)

 

2110 Narcissus Ct.

Venice, California 90291

(Full mailing handle of principal government workplaces)

 

(844) 933-3287

(Issuer’s phone quantity, together with space code)

 

Title of every class of securities issued pursuant to Regulation A: Class A voting Common Stock, par worth $0.0001 per share

 

This Current Report on Form 1-U is issued in accordance with Rule 257(b)(4) of Regulation A, and is neither a proposal to promote any securities, nor a solicitation of a proposal to purchase, nor shall there be any sale of any such securities in any state or jurisdiction wherein such provide, solicitation or sale can be illegal previous to registration or qualification beneath the securities legal guidelines of any such state or jurisdiction.

Item 1- Entry right into a Material Definitive Agreement.

On June 23, 2020, a subsidiary of Hightimes Holdings Corp. (“Hightimes” or the “Company”) entered into an contingent inventory buy settlement to accumulate the fairness of Mountain High Recreation, Inc. (“Mountain High”), a enterprise that engages within the supply of hashish and hashish merchandise within the State of California. If and when acquired, Mountain High will enable the Company to ship hashish and hashish merchandise in Northern California and different places within the State.

The supply enterprise of Mountain High was valued by the events to the acquisition settlement at $2,800,000 of which $100,000 might be paid in money and the stability by supply of 245,455 shares of Hightimes Common Stock, which upon consummation of our beforehand introduced contemplated 11-for-1 inventory cut up will turn out to be 2,700,000 shares. In addition, for a interval of 18 months following the closing, Hightimes agreed to pay to the present stockholders of Mountain High a 3% royalty on the web gross sales value of all hashish and associated hashish merchandise offered and delivered by Mountain High, as much as a most quantity of royalty funds to not exceed $200,000. At closing, the 2 stockholders of Mountain High will enter into two-year employment agreements with Mountain High, every of which offer for a base wage of $125,000 every year plus bonus as decided by the Board of Directors of Mountain High and choices to buy 385,000 shares of Hightimes Common Stock which shall vest over a three-year interval.

Consummation of the acquisition of Mountain High is topic to satisfaction of sure situations, together with our acquiring the approval from Hightimes’ senior secured lender and approvals of Bureau of Cannabis Control of the State of California (“BCC”) in addition to the City of Sacramento, California the place Mountain High is situated, to the change of possession of Mountain High. There isn’t any assurance that we’ll achieve success in acquiring such approval or in any other case consummating the Mountain High acquisition.

The foregoing abstract of the phrases of the contingent buy settlement is certified in its entity by the definitive settlement annexed to this Form 1-U as Exhibit 6.1 that are included by this reference herein.

On June 30, 2020, Hightimes revealed a press launch relating to the above transaction. A replica of such press launch is connected to this Form 1-U Current Report as Exhibit 15.1.

 

ITEM 9. OTHER EVENTS

Extension of Regulation A+ Offering and Termination Date

On June 29, 2019, Hightimes elected to increase the surface termination date of its Regulation A+ public offering (the “Offering”) from June 30, 2020 until as late as September 30, 2020.

 

Accordingly, the Offering will terminate on the primary to happen of (i) the date on which all 4,545,454 shares of Hightimes Class A voting widespread inventory (“Class A Common Stock”) are offered, (ii) September 30, 2020, or (iii) such earlier termination date as deemed applicable by Hightimes’s administration (in every case, the “Termination Date”). In conjunction with the extension of the Termination Date, Hightimes has up to date the type of investor subscription settlement (the “Subscription Agreement”) for the Offering to (i) mirror the prolonged Termination Date and (ii) direct buyers to this Current Report on Form 1-U, which dietary supplements disclosures contained in Hightimes’ Offering Circular. In addition, inasmuch as Hightimes is extending the Termination Date of the Offering to as late as September 30, 2020, it would additionally prolong the date of submitting its accredited restated certificates of incorporation to implement the beforehand introduced 11-for-1 ahead inventory cut up to a date instantly following the revised Termination Date.

The up to date type of Subscription Agreement filed as Exhibit 4.1 to this Current Report on Form 1-U and any abstract of the phrases of such doc is topic to, and certified in its entirety by, the complete textual content of such paperwork, that are included herein by reference.

The info contained herein shall not be deemed “filed” for functions of Section 18 of the Securities Exchange Act of 1934, as amended, or in any other case topic to the liabilities of that part, nor shall the data be deemed included by reference into any of our Securities and Exchange Commission filings, besides as shall be expressly set forth by particular reference in such a submitting. The furnishing of the data on this Current Report on Form 1-U constitutes materials investor info that’s not in any other case publicly accessible.

 

Cautionary Note Regarding Forward-Looking Statements

This Current Report on Form 1-U comprises statements as to the Company’s beliefs and expectations of the result of future occasions which are forward-looking statements as outlined within the Private Securities Litigation Reform Act of 1995. You can establish these statements by the truth that they don’t relate strictly to historic or present info. Examples of those statements embrace, however will not be restricted to, statements relating to the anticipated affect of the Company’s supposed acquisitions, and the anticipated impact of such transactions on our outcomes of operations. In addition, these forward-looking statements are topic to dangers and uncertainties that would trigger precise outcomes to vary materially from the statements made. These dangers and uncertainties embrace, however will not be restricted to, the results of the COVID-19 outbreak on our enterprise, in addition to on closing the acquisition of Mountain High, in addition to ranges of client, enterprise and financial confidence usually. The length of the COVID-19 outbreak and severity of such outbreak, the tempo of restoration following the COVID-19 outbreak, the impact on our provide chain, our capacity to implement price containment and enterprise restoration methods, and the adversarial results of the COVID-19 outbreak on our enterprise or the market value of our Common Stock and the danger components described in our Regulation A Offering Circular, our annual stories on Form 1-Okay and semi-annual stories on Form 1-SA, in addition to our subsequent filings with the U.S. Securities and Exchange Commission, together with subsequent annual stories on Form 1-Okay, semi-annual stories on Form 1-SA and present stories on Form 1-U are unsure. Except as required by regulation, the Company doesn’t undertake any obligation to launch publicly any revisions to forward-looking statements made by it to mirror occasions or circumstances occurring after the date hereof or the incidence of unanticipated occasions.

 

SIGNATURES

 

Pursuant to the necessities of Regulation A, the issuer has duly brought about this report back to be signed on its behalf by the undersigned, thereunto duly approved.

Hightimes Holding Corp.
a Delaware company
by: /s/ Adam E. Levin
Name: Adam E. Levin
Its: Executive Chairman
Date: June 30, 2020

 

Exhibits to Form 1-U

 

Index to Exhibits

 

Exhibit 4.1

FORM OF

HIGHTIMES HOLDING CORP.

SUBSCRIPTION AGREEMENT

NOTICE TO INVESTORS

THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK. THIS INVESTMENT IS SUITABLE ONLY FOR PERSONS WHO CAN BEAR THE ECONOMIC RISK FOR AN INDEFINITE PERIOD OF TIME AND WHO CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT. FURTHERMORE, INVESTORS MUST UNDERSTAND THAT SUCH INVESTMENT IS ILLIQUID AND IS EXPECTED TO CONTINUE TO BE ILLIQUID FOR AN INDEFINITE PERIOD OF TIME. NO PUBLIC MARKET EXISTS FOR THE SECURITIES.

THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES OR BLUE SKY LAWS AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND STATE SECURITIES OR BLUE SKY LAWS. ALTHOUGH AN OFFERING STATEMENT HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE “SEC”), THAT OFFERING STATEMENT DOES NOT INCLUDE THE SAME INFORMATION THAT WOULD BE INCLUDED IN A REGISTRATION STATEMENT UNDER THE ACT. THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC, ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON THE MERITS OF THIS OFFERING OR THE ADEQUACY OR ACCURACY OF THE SUBSCRIPTION AGREEMENT OR ANY OTHER MATERIALS OR INFORMATION MADE AVAILABLE TO PROSPECTIVE INVESTOR IN CONNECTION WITH THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

THE SECURITIES CANNOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT. IN ADDITION, THE SECURITIES CANNOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH APPLICABLE STATE SECURITIES OR “BLUE SKY” LAWS. INVESTORS WHO ARE NOT “ACCREDITED INVESTORS” (AS THAT TERM IS DEFINED IN SECTION 501 OF REGULATION D PROMULGATED UNDER THE SECURITIES ACT) ARE SUBJECT TO LIMITATIONS ON THE AMOUNT THEY MAY INVEST, AS SET OUT IN SECTION 4(g). THE COMPANY IS RELYING ON THE REPRESENTATIONS AND WARRANTIES SET FORTH BY EACH INVESTOR IN THIS SUBSCRIPTION AGREEMENT AND THE OTHER INFORMATION PROVIDED BY INVESTOR IN CONNECTION WITH THIS OFFERING TO DETERMINE THE APPLICABILITY TO THIS OFFERING OF EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

PROSPECTIVE INVESTORS MAY NOT TREAT THE CONTENTS OF THE SUBSCRIPTION AGREEMENT, THE OFFERING CIRCULAR OR ANY OF THE OTHER MATERIALS PROVIDED BY THE COMPANY (COLLECTIVELY, THE “OFFERING MATERIALS”), OR ANY PRIOR OR SUBSEQUENT COMMUNICATIONS FROM THE COMPANY OR ANY OF ITS OFFICERS, EMPLOYEES OR AGENTS (INCLUDING “TESTING THE WATERS” MATERIALS) AS INVESTMENT, LEGAL OR TAX ADVICE. IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE COMPANY AND THE TERMS OF THIS OFFERING, INCLUDING THE MERITS AND THE RISKS INVOLVED. EACH PROSPECTIVE INVESTOR SHOULD CONSULT THE INVESTOR’S OWN COUNSEL, ACCOUNTANTS AND OTHER PROFESSIONAL ADVISORS AS TO INVESTMENT, LEGAL, TAX AND OTHER RELATED MATTERS CONCERNING THE INVESTOR’S PROPOSED INVESTMENT.

 

THE OFFERING MATERIALS MAY CONTAIN FORWARD-LOOKING STATEMENTS AND INFORMATION RELATING TO, AMONG OTHER THINGS, THE COMPANY, ITS BUSINESS PLAN AND STRATEGY, AND ITS INDUSTRY. THESE FORWARD-LOOKING STATEMENTS ARE BASED ON THE BELIEFS OF, ASSUMPTIONS MADE BY, AND INFORMATION CURRENTLY AVAILABLE TO THE COMPANY’S MANAGEMENT. WHEN USED IN THE OFFERING MATERIALS, THE WORDS “ESTIMATE,” “PROJECT,” “BELIEVE,” “ANTICIPATE,” “INTEND,” “EXPECT” AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS, WHICH CONSTITUTE FORWARD LOOKING STATEMENTS. THESE STATEMENTS REFLECT MANAGEMENT’S CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE THE COMPANY’S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN THE FORWARD-LOOKING STATEMENTS. INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE ON WHICH THEY ARE MADE. THE COMPANY DOES NOT UNDERTAKE ANY OBLIGATION TO REVISE OR UPDATE THESE FORWARD-LOOKING STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES AFTER SUCH DATE OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS.

 

SUBSCRIPTION AGREEMENT

This subscription settlement (this “Subscription Agreement” or the “Agreement”) is entered into by and between Hightimes Holding Corp., a Delaware company (hereinafter the “Company”) and the undersigned (hereinafter the “Investor”) as of the date set forth on the signature web page hereto. Any time period used however not outlined herein shall have the that means set forth within the Offering Circular (as outlined under).

 

RECITALS

WHEREAS, the Company needs to supply shares of Class A standard inventory, par worth $0.0001 per share (the “Class A Common Stock”) on a “best efforts” foundation pursuant to Regulation A of Section 3(6) of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to a Tier 2 choices (the “Offering”), of a minimal of 454,545 shares of Class A Common Stock of the Company, at a purchase order value of $11.00 per share (the “Per Share Purchase Price”), for whole gross proceeds of as much as $5,000,000 (the “Minimum Offering”), and for as much as 4,545,450 shares of Class A Common Stock, on the Per Share Purchase Price, for whole gross proceeds of as much as $50,000,000 (the “Maximum Offering”); and

WHEREAS, the Investor needs to accumulate that variety of shares of Class A Common Stock (the “Shares”) as set forth on the signature web page hereto on the buy value set forth herein; and

 

WHEREAS, the Offering will terminate on the primary to happen of: (i) the date on which the Maximum Offering is accomplished, (ii) September 30, 2020 or (iii) such earlier date because the Company elects to terminate the Offering (in every case, the “Termination Date”).

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

 

1. Subscription.

(a) The Investor hereby irrevocably subscribes for and agrees to buy the variety of Shares set forth on the signature web page hereto on the Per Share Purchase Price, upon the phrases and situations set forth herein. The mixture buy value for the Shares with respect to every Investor (the “Purchase Price”) is payable within the method offered in Section 2(a) under. The minimal variety of Shares that the Investor could buy is fifty shares for a subscription value of $550.00.

(b) Investor understands that the Shares are being provided pursuant to the Form 1-A Regulation A+ Offering Circular dated March 12, 2018 and its reveals as filed with and certified by the Securities and Exchange Commission (the “SEC”) on March 12, 2018 and the FORM 1-A Post Qualification Offering Circular filed with the SEC on June 11, 2018, as amended on June 15, 2018, as additional amended on June 25, 2018 and once more certified by the SEC on July 26, 2018 (collectively, the “Offering Circular”). The Investor can be urged to evaluation the Company’s Offering Circular Supplement, filed on May 31, 2019, the Company’s Form 1-Okay Annual Report for its fiscal yr ended December 31, 2018 and Form 1-SA Semi-Annual Report for the six month intervals ended June 30, 2018 and June 30, 2019, which has been filed by the Company with the SEC pursuant to Rule 257(b)(1) and Rule 257(b)(3), respectively, of Regulation A+ and all Form 1-U Current Reports pursuant to Regulation A+ that has been filed by the Company with the SEC, together with the Form 1-U Current Reports dated August 13, 2018, September 11, 2018, September 14, 2018, September 26, 2018, October 3, 2018, November 5, 2018, December 4, 2018, December 14, 2018, January 22, 2019, February 4, 2019, April 3, 2019, April 15, 2019, April 18, 2019, June 28, 2019, July 12, 2019, July 29, 2019, August 30, 2019, October 21, 2019, October 31, 2019, December 31, 2019, January 6, 2020, January 16, 2020, January 29, 2020, January 31, 2020, March 27, 2020, April 6, 2020, April 28, 2020, April 30, 2020, May 6, 2020, May 15, 2020, June 5, 2020, June 9, 2020, June 15, 2020, June 23, 2020 and June 30, 2020, in addition to any subsequent Form 1-U Current Reports that the Company could file with the SEC (all such stories, along with the Offering Circular are hereinafter collectively known as the “SEC Reports”). By subscribing to the Offering, the Investor acknowledges that Investor has acquired and reviewed a duplicate of the SEC Reports and some other info required by Investor to make an funding choice with respect to the Shares. The Company will settle for tenders of funds to buy the Shares. The Company will shut on investments on a “rolling basis,” pursuant to the phrases of the Offering Circular. As a consequence, not all buyers will obtain their Shares on the identical date.

(c) This subscription could also be accepted or rejected in complete or partly, for any purpose or for no purpose, at any time previous to the Termination Date, by the Company at its sole and absolute discretion. In addition, the Company, at its sole and absolute discretion, could allocate to Investor solely a portion of the variety of the Shares that Investor has subscribed for hereunder. The Company will notify Investor whether or not this subscription is accepted (whether or not in complete or partly) or rejected. If Investor’s subscription is rejected, Investor’s fee (or portion thereof if partially rejected) might be returned to Investor with out curiosity and all of Investor’s obligations hereunder shall terminate. In the occasion of rejection of this subscription in its entirety, or within the occasion the sale of the Shares (or any portion thereof) to an Investor isn’t consummated for any purpose, this Subscription Agreement shall haven’t any power or impact, apart from Section 5 hereof, which shall stay in full power and impact.

(d) The phrases of this Subscription Agreement shall be binding upon Investor and its permitted transferees, heirs, successors and assigns (collectively, the “Transferees”); offered, nevertheless, that for any such switch to be deemed efficient, the Transferee shall have executed and delivered to the Company prematurely an instrument in kind acceptable to the Company in its sole discretion, pursuant to which the proposed Transferee shall acknowledge and conform to be sure by the representations and warranties of Investor and the phrases of this Subscription Agreement. No switch of this Agreement could also be made with out the consent of the Company, which can be withheld in its sole and absolute discretion.

2. Payment and Purchase Procedure. The Purchase Price shall be paid concurrently with Investor’s subscription. Investor shall ship fee for the combination buy value of the Shares by examine, bank card, ACH deposit or by wire switch to an account designated by the Company in Section 8 under. The Investor acknowledges that, with a view to subscribe for Shares, he should absolutely adjust to the acquisition process necessities set forth in Section 8 under.

3. Representations and Warranties of the Company. The Company represents and warrants to Investor that the next representations and warranties are true and full in all materials respects as of the date of every Closing: (a) the Company is a company duly fashioned, validly present and in good standing beneath the legal guidelines of the State of Delaware. The Company has all requisite energy and authority to personal and function its properties and belongings, to execute and ship this Subscription Agreement, the Shares and some other agreements or devices required hereunder. The Company is duly certified and is permitted to do enterprise and is in good standing as a international company in all jurisdictions wherein the character of its actions and of its properties (each owned and leased) makes such qualification obligatory, apart from these jurisdictions wherein failure to take action wouldn’t have a fabric adversarial impact on the Company or its enterprise; (b) The issuance, sale and supply of the Shares in accordance with this Subscription Agreement have been duly approved by all obligatory company motion on the a part of the Company. The Shares, when issued, offered and delivered in opposition to fee therefor in accordance with the provisions of this Subscription Agreement, might be duly and validly issued, absolutely paid and non-assessable; (c) the acceptance by the Company of this Subscription Agreement and the consummation of the transactions contemplated hereby are inside the Company’s powers and have been duly approved by all obligatory company motion on the a part of the Company. Upon the Company’s acceptance of this Subscription Agreement, this Subscription Agreement shall represent a legitimate and binding settlement of the Company, enforceable in opposition to the Company in accordance with its phrases, besides (i) as restricted by relevant chapter, insolvency, reorganization, moratorium, and different legal guidelines of basic utility affecting enforcement of collectors’ rights usually, (ii) as restricted by legal guidelines referring to the supply of particular efficiency, injunctive aid, or different equitable cures and (iii) with respect to provisions referring to indemnification and contribution, as restricted by the Company’s certificates of incorporation, bylaws and the Delaware General Corporate Law usually.

4. Representations and Warranties of Investor. By subscribing to the Offering, Investor (and, if Investor is buying the Shares subscribed for hereby in a fiduciary capability, the individual or individuals for whom Investor is so buying) represents and warrants, which representations and warranties are true and full in all materials respects, as of the date of every Closing:

(a) Requisite Power and Authority. Investor has all obligatory energy and authority beneath all relevant provisions of regulation to subscribe to the Offering, to execute and ship this Subscription Agreement and to hold out the provisions thereof. All actions on Investor’s half required for the lawful subscription to the offering have been or might be successfully taken previous to the Closing. Upon subscribing to the Offering, this Subscription Agreement might be a legitimate and binding obligation of Investor, enforceable in accordance with its phrases, besides (i) as restricted by relevant chapter, insolvency, reorganization, moratorium or different legal guidelines of basic utility affecting enforcement of collectors’ rights and (ii) as restricted by basic rules of fairness that prohibit the supply of equitable cures.

 

(b) Company Offering Circular and SEC Reports. Investor acknowledges the public availability of the Company’s Offering Circular which could be seen on the SEC Edgar Database, beneath the CIK quantity 0001714420. This Offering Circular is made accessible within the Company’s certified offering assertion on SEC Form 1-A, as amended, and was initially certified by the SEC on March 12, 2018 and subsequently requalified on July 26, 2018. Such Offering Circular was amended and restated pursuant to a Form 1-A POS Offering Circular filed with the SEC on June 11, 2018, as amended on June 15, 2018 and as additional amended on June 25, 2018 and once more certified by the SEC on July 26, 2018. And an Offering Circular Supplement was filed with the SEC on May 31, 2019. In addition, included within the SEC Reports are the Company’s Form 1-Okay Annual Report for its fiscal yr ended December 31, 2017 and the Company’s Form 1-SA Semi-Annual Reports for the six month intervals ended June 30, 2018 and June 30, 2019, every of which have been filed with the SEC, and the Company’s Form 1-U Current Reports filed with the SEC on August 13, 2018, September 11, 2018, September 14, 2018, September 26, 2018, October 3, 2018, November 5, 2018, December 4, 2018, December 14, 2018, January 22, 2019, February 4, 2019, April 3, 2019, April 15, 2019, April 18, 2019, June 28, 2019, July 12, 2019, July 29, 2019, August 30, 2019, October 21, 2019, October 31, 2019, December 31, 2019, January 6, 2020, January 16, 2020, January 29, 2020, March 27, 2020, April 6, 2020, April 28, 2020, April 30, 2020, May 6, 2020, May 15, 2020, June 5, 2020, June 9, 2020, June 15, 2020, June 23, 2020 and June 30, 2020, in addition to any further Form 1-U Current Reports the Company has filed with the SEC subsequent thereto. In the Company’s Offering Circular and different SEC Reports it makes clear the phrases and situations of the offering of Shares and the dangers related therewith are described. Investor has had a chance to debate the Company’s enterprise, administration and monetary affairs with administrators, officers and administration of the Company and has had the chance to evaluation the Company’s operations and amenities. Investor has additionally had the chance to ask questions of and obtain solutions from the Company and its administration relating to the phrases and situations of this funding. Investor acknowledges that besides as set forth herein, no representations or warranties have been made to Investor, or to Investor’s advisors or consultant, by the Company or others with respect to the enterprise or prospects of the Company or its monetary situation.

(c) Investment Experience; Investor Determination of Suitability. Investor has adequate expertise in monetary and enterprise issues to be able to using such info to judge the deserves and dangers of Investor’s funding within the Shares, and to make an knowledgeable choice relating thereto. Alternatively, the Investor has utilized the companies of a purchaser consultant and collectively they’ve adequate expertise in monetary and enterprise issues that they’re able to using such info to judge the deserves and dangers of Investor’s funding within the Shares, and to make an knowledgeable choice relating thereto. Investor has evaluated the dangers of an funding within the Shares, together with these described within the part of the Offering Circular entitled “Risk Factors,” and has decided that the funding is appropriate for Investor. Investor has enough monetary sources for an funding of this character. Investor might bear an entire lack of Investor’s funding within the Company.

(d) No Registration. Investor understands that the Shares will not be being registered beneath the Securities Act on the bottom that the issuance is exempt beneath Regulation A of Section 3(b) of the Securities Act, and that reliance on such exemption relies partly on the reality and accuracy of Investor’s representations and warranties, and people of the opposite purchasers of the Shares, within the offering. Investor additional understands that, at current, the Company is offering the Shares solely by members of its administration. However, the Company reserves the proper to interact the companies of a dealer/seller who’s registered with the Financial Industry Regulatory Authority (“FINRA”). Accordingly, until such FINRA registered dealer/seller has been engaged as a placement or promoting agent, the Shares might not be “covered securities” beneath the National Securities Market Improvement Act of 1996, and the Company could also be required to register or qualify the Shares beneath the securities legal guidelines of these states wherein the Company intends to supply the Shares. In the occasion that Shares are so registered or certified, the Company will notify the Investor and all potential purchasers of the Shares as to these states wherein the Company is permitted to supply and promote the Shares. In the occasion that the Company engages a FINRA registered dealer/seller as placement or promoting agent, and FINRA approves the compensation of such dealer/seller, then the Shares will now not be required to be registered beneath state securities legal guidelines on the premise that the issuance thereof is exempt as a proposal and sale not involving a registrable public offering in such state, because the Shares might be “covered securities” beneath the National Securities Market Improvement Act of 1996. The Investor covenants to not promote, switch or in any other case get rid of any Shares except such Shares have been registered beneath the relevant state securities legal guidelines wherein the Shares are offered, or except exemptions from such registration necessities are in any other case accessible.

 

(e) Illiquidity and Continued Economic Risk. Investor acknowledges and agrees that there isn’t a prepared public marketplace for the Shares and that there isn’t a assure {that a} marketplace for their resale will ever exist. The Company has no obligation to checklist any of the Shares on any market or take any steps (together with registration beneath the Securities Act or the Securities Exchange Act of 1934, as amended) with respect to facilitating buying and selling or resale of the Shares. Investor should bear the financial danger of this funding indefinitely and Investor acknowledges that Investor is ready to bear the financial danger of shedding Investor’s complete funding within the Shares.

 

(f) Accredited Investor Status or Investment Limits. Investor represents that both:

(i) that Investor is an “accredited investor” inside the that means of Rule 501 of Regulation D beneath the Shares Act; or
(ii) that the Purchase Price, along with some other quantities beforehand used to buy Shares on this offering, doesn’t exceed Ten Percent (10%) of the larger of Investor’s annual revenue or web value (or within the case the place Investor is a non-natural individual, their income or web belongings for such Investor’s most just lately accomplished fiscal yr finish).

 

Investor represents that to the extent it has any questions with respect to its standing as an accredited investor, or the applying of the funding limits, it has sought skilled recommendation.

(g) Stockholder Information. Within 5 (5) days after receipt of a request from the Company, Investor hereby agrees to offer such info with respect to its standing as a stockholder (or potential stockholder) and to execute and ship such paperwork as could fairly be essential to adjust to any and all legal guidelines and laws to which the Company is or could turn out to be topic, together with, with out limitation, the necessity to decide the accredited investor standing of the Company’s stockholders. Investor additional agrees that within the occasion it transfers any Shares, it would require the transferee of such Shares to agree to offer such info to the Company as a situation of such switch.

(h) Valuation; Arbitrary Determination of Per Share Purchase Price by the Company. Investor acknowledges that the Per Share Purchase Price of the Shares to be offered on this offering was set by the Company on the premise of the Company’s inside valuation and no warranties are made as to worth. Investor additional acknowledges that future choices of securities of the Company could also be made at decrease valuations, with the consequence that Investor’s funding will bear a decrease valuation.

(i) Domicile. Investor maintains Investor’s domicile (and isn’t a transient or momentary resident) on the handle supplied with Investors subscription.

(j) Foreign Investors. If Investor isn’t a United States individual (as outlined by Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended), Investor hereby represents that it has happy itself as to the complete observance of the legal guidelines of its jurisdiction in reference to any invitation to subscribe for the Shares or any use of this Subscription Agreement, together with (i) the authorized necessities inside its jurisdiction for the acquisition of the Shares, (ii) any international alternate restrictions relevant to such buy, (iii) any governmental or different consents that will have to be obtained, and (iv) the revenue tax and different tax penalties, if any, which may be related to the acquisition, holding, redemption, sale, or switch of the Shares. Investor’s subscription and fee for and continued helpful possession of the Shares is not going to violate any relevant securities or different legal guidelines of Investor’s jurisdiction.

(ok) Fiduciary Capacity. If Investor is buying the Shares in a fiduciary capability for one more individual or entity, together with with out limitation a company, partnership, belief or some other entity, the Investor has been duly approved and empowered to execute this Agreement and all different subscription paperwork. Upon request of the Company, Investor will present true, full and present copies of all related paperwork creating the Investor, authorizing its funding within the Company and/or evidencing the satisfaction of the foregoing.

5. Indemnity. The representations, warranties and covenants made by Investor herein shall survive the closing of this Subscription Agreement. Investor agrees to indemnify and maintain innocent the Company and its respective officers, administrators and associates, and one another individual, if any, who controls the Company inside the that means of Section 15 of the Securities Act in opposition to any and all loss, legal responsibility, declare, harm and expense by any means (together with, however not restricted to, any and all cheap attorneys’ charges, together with attorneys’ charges on attraction) and bills fairly incurred in investigating, getting ready or defending in opposition to any false illustration or guarantee or breach of failure by Investor to adjust to any covenant or settlement made by Investor herein or in some other doc furnished by Investor to any of the foregoing in reference to this transaction.

6. Governing Law; Jurisdiction; Waiver of Jury Trial. All questions in regards to the development, validity, enforcement and interpretation of the Offering Circular, together with, with out limitation, this Subscription Agreement, shall be ruled by and construed and enforced in accordance with the inner legal guidelines of the State of California, with out regard to the rules of conflicts of regulation thereof. Each occasion agrees that each one authorized proceedings in regards to the interpretations, enforcement and protection of the transactions contemplated by this Subscription Agreement and any paperwork included inside the Offering Circular (whether or not introduced in opposition to a celebration hereto or its respective associates, administrators, officers, shareholders, companions, members, staff or brokers) shall be commenced solely within the state and federal courts sitting within the City of Los Angeles. Each occasion hereby irrevocably submits to the unique jurisdiction of the state and federal courts sitting within the City of Los Angeles for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or mentioned herein (together with with respect to the enforcement of any of the paperwork included inside the Offering Circular), and hereby irrevocably waives, and agrees to not assert in any motion or continuing, any declare that it’s not personally topic to the jurisdiction of any such court docket, that such motion or continuing is improper or is an inconvenient venue for such continuing. Each occasion hereby irrevocably waives private service of course of and consents to course of being served in any such motion or continuing by mailing a duplicate thereof through registered or licensed mail or in a single day supply (with proof of supply) to such occasion on the handle in impact for notices to it beneath this Subscription Agreement and agrees that such service shall represent good and adequate service of course of and spot thereof. Nothing contained herein shall be deemed to restrict in any means any proper to serve course of in some other method permitted by regulation. If any occasion hereto shall start an motion or continuing to implement any provisions of the paperwork included inside the Offering Circular, then the prevailing occasion in such motion or continuing shall be reimbursed by the non-prevailing occasion for its cheap attorneys’ charges and different prices and bills incurred with the investigation, preparation and prosecution of such motion or continuing. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.

7. Notices. Notice, requests, calls for and different communications referring to this Subscription Agreement and the transactions contemplated herein shall be in writing and shall be deemed to have been duly given if and when (a) delivered personally, on the date of such supply; or (b) mailed by registered or licensed mail, postage pay as you go, return receipt requested, within the third day after the posting thereof; or (c) emailed on the date of such supply to the handle of the respective events as follows, if to the Company, to Hightimes Holding Corp., 10990 Wilshire Boulevard, Penthouse, Los Angeles, CA 90024-3898, Attention: Adam E. Levin, Chief Executive Officer. If to Investor, at Investor’s handle provided in reference to this subscription, or to such different handle as could also be specified by written discover from time to time by the occasion entitled to obtain such discover. Any notices, requests, calls for or different communications by e mail shall be confirmed by letter given in accordance with (a) or (b) above.

8. Purchase Procedure. The Investor acknowledges that, with a view to subscribe for Shares, he should, and he does hereby, ship to the Company: (a) a totally accomplished and executed counterpart of the Signature Page connected to this Subscription Agreement; and (b) fee for the combination Purchase Price within the quantity set forth on the Signature Page connected to this Agreement. Payment could also be made by both examine, wire, bank card or ACH deposits.

Please ship checks to the Escrow Company. Please be aware in your examine: “Hightimes Reg A+ offering”

Prime Trust

2300 West Sahara

Suite 1170

Las Vegas, NV 89102

 

Wire directions to the Escrow Company:

Name and Address of Bank:

ABA # 122242869

Account# 0045181588

Prime Trust LLC

Prime Trust FBO PMB 899746

2300 w Sahara #1170

Las Vegas, NV 89102

For the advantage of: Hightimes Holding Corp.

9. Miscellaneous. All pronouns and any variations thereof shall be deemed to consult with the masculine, female, neuter, singular or plural, because the id of the individual or individuals or entity or entities could require. Other than as set forth herein, this Subscription Agreement isn’t transferable or assignable by Investor. The representations, warranties and agreements contained herein shall be deemed to be made by and be binding upon Investor and its heirs, executors, directors and successors and shall inure to the advantage of the Company and its successors and assigns. None of the provisions of this Subscription Agreement could also be waived, modified or terminated orally or in any other case, besides as particularly set forth herein or besides by a writing signed by the Company and Investor. In the occasion any a part of this Subscription Agreement is discovered to be void or unenforceable, the remaining provisions are supposed to be separable and binding with the identical impact as if the void or unenforceable half had been by no means the topic of settlement. The invalidity, illegality or unenforceability of a number of of the provisions of this Subscription Agreement in any jurisdiction shall not have an effect on the validity, legality or enforceability of the rest of this Subscription Agreement in such jurisdiction or the validity, legality or enforceability of this Subscription Agreement, together with any such provision, in some other jurisdiction, it being supposed that each one rights and obligations of the events hereunder shall be enforceable to the fullest extent permitted by regulation. This Subscription Agreement supersedes all prior discussions and agreements between the events, if any, with respect to the subject material hereof and comprises the only and whole settlement between the events hereto with respect to the subject material hereof. The phrases and provisions of this Subscription Agreement are supposed solely for the advantage of every occasion hereto and their respective successors and assigns, and it’s not the intention of the events to confer, and no provision hereof shall confer, third-party beneficiary rights upon some other individual. The headings used on this Subscription Agreement have been inserted for comfort of reference solely and don’t outline or restrict the provisions hereof. In the occasion that both occasion hereto shall start any swimsuit, motion or different continuing to interpret this Subscription Agreement, or decide to implement any proper or obligation created hereby, then such occasion, if it prevails in such motion, shall get better its cheap prices and bills incurred in connection therewith, together with, however not restricted to, cheap legal professional’s charges and bills and prices of attraction, if any. All notices and communications to be given or in any other case made to Investor shall be deemed to be adequate if despatched by e-mail to such handle offered by Investor on the signature web page of this Subscription Agreement. Unless in any other case specified on this Subscription Agreement, Investor shall ship all notices or different communications required to be given hereunder to the Company through e-mail at buyers@hightimes.com. Any such discover or communication shall be deemed to have been delivered and acquired on the primary enterprise day following that on which the e-mail has been despatched (assuming that there isn’t a error in supply). As used on this Section 9, the time period “business day” shall imply any day aside from a day on which banking establishments within the State of California are legally closed for enterprise. This Subscription Agreement could also be executed in a number of counterparts. No failure or delay by any occasion in exercising any proper, energy or privilege beneath this Subscription Agreement shall function as a waiver thereof nor shall any single or partial train thereof preclude some other or additional train thereof or the train of some other proper, energy or privilege. The rights and cures herein offered shall be cumulative and never unique of any rights or cures offered by regulation.

10. Consent to Electronic Delivery of Notices, Disclosures and Forms. Investor understands that, to the fullest extent permitted by regulation, any notices, disclosures, kinds, privateness statements, stories or different communications (collectively, “Communications”) relating to the Company, the Investor’s funding within the Company and the shares of Class A Common Stock (together with annual and different updates and tax paperwork) could also be delivered by digital means, equivalent to by e-mail. Investor hereby consents to digital supply as described within the previous sentence. In so consenting, Investor acknowledges that e-mail messages will not be safe and should comprise pc viruses or different defects, might not be precisely replicated on different programs or could also be intercepted, deleted or interfered with, with or with out the data of the sender or the supposed recipient. The Investor additionally acknowledges that an e-mail from the Company could also be accessed by recipients aside from the Investor and could also be interfered with, could comprise pc viruses or different defects and might not be efficiently replicated on different programs. Neither the Company, nor any of its respective officers, administrators and associates, and one another individual, if any, who controls the Company inside the that means of Section 15 of the Securities Act (collectively, the “Company Parties”), provides any warranties in relation to those issues. Investor additional understands and agrees to every of the next: (a) aside from with respect to tax paperwork within the case of an election to obtain paper variations, not one of the Company Parties might be beneath any obligation to offer Investor with paper variations of any Communications; (b) digital Communications could also be offered to Investor through e-mail or an internet site of a Company Party upon written discover of such web site’s web handle to such Investor. In order to view and retain the Communications, the Investor’s pc {hardware} and software program should, at a minimal, be able to accessing the Internet, with connectivity to an web service supplier or some other succesful communications medium, and with software program able to viewing and printing a transportable doc format (“PDF”) file created by Adobe Acrobat. Further, the Investor should have a private e-mail handle able to sending and receiving e-mail messages to and from the Company Parties. To print the paperwork, the Investor will want entry to a printer appropriate along with his or her {hardware} and the required software program; (c) if these software program or {hardware} necessities change sooner or later, a Company Party will notify the Investor by way of written notification. To facilitate these companies, the Investor should present the Company along with his or her present e-mail handle and replace that info as obligatory. Unless in any other case required by regulation, the Investor might be deemed to have acquired any digital Communications which are despatched to essentially the most present e-mail handle that the Investor has offered to the Company in writing; (d) not one of the Company Parties will assume legal responsibility for non-receipt of notification of the supply of digital Communications within the occasion the Investor’s e-mail handle on file is invalid; the Investor’s e-mail or Internet service supplier filters the notification as “spam” or “junk mail”; there’s a malfunction within the Investor’s pc, browser, web service or software program; or for different causes past the management of the Company Parties; and (e) solely with respect to the supply of tax paperwork by a Company Party, the Investor agrees to every of the next: (i) if the Investor doesn’t consent to obtain tax paperwork electronically, a paper copy might be offered, and (ii) the Investor’s consent to obtain tax paperwork electronically continues for each tax yr of the Company until the Investor withdraws its consent by notifying the Company in writing.

[THIS SPACE IS INTENTIONALLY LEFT BLANK] [SIGNATURE PAGE TO FOLLOW]

INVESTOR CERTIFIES THAT HE HAS READ THIS ENTIRE SUBSCRIPTION AGREEMENT AND THAT EVERY STATEMENT MADE BY THE INVESTOR HEREIN IS TRUE AND COMPLETE.

THE COMPANY MAY NOT BE OFFERING THE SECURITIES IN EVERY STATE. THE OFFERING MATERIALS DO NOT CONSTITUTE AN OFFER OR SOLICITATION IN ANY STATE OR JURISDICTION IN WHICH THE SECURITIES ARE NOT BEING OFFERED. THE INFORMATION PRESENTED IN THE OFFERING MATERIALS WAS PREPARED BY THE COMPANY SOLELY FOR THE USE BY PROSPECTIVE INVESTORS IN CONNECTION WITH THIS OFFERING. NO REPRESENTATIONS OR WARRANTIES ARE MADE AS TO THE ACCURACY OR COMPLETENESS OF THE INFORMATION CONTAINED IN ANY OFFERING MATERIALS, AND NOTHING CONTAINED IN THE OFFERING MATERIALS IS OR SHOULD BE RELIED UPON AS A PROMISE OR REPRESENTATION AS TO THE FUTURE PERFORMANCE OF THE COMPANY.

THE COMPANY RESERVES THE RIGHT IN ITS SOLE DISCRETION AND FOR ANY REASON WHATSOEVER TO MODIFY, AMEND AND/OR WITHDRAW ALL OR A PORTION OF THE OFFERING AND/OR ACCEPT OR REJECT, IN WHOLE OR IN PART, FOR ANY REASON OR FOR NO REASON, ANY PROSPECTIVE INVESTMENT IN THE SECURITIES OR TO ALLOT TO ANY PROSPECTIVE INVESTOR LESS THAN THE DOLLAR AMOUNT OF SECURITIES SUCH INVESTOR DESIRES TO PURCHASE. EXCEPT AS OTHERWISE INDICATED, THE OFFERING MATERIALS SPEAK AS OF THEIR DATE. NEITHER THE DELIVERY NOR THE PURCHASE OF THE SECURITIES SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THAT DATE.

IN WITNESS WHEREOF, this Subscription Agreement is executed as of the __ day of _____ 2020.

Number of Shares Subscribed For:
Total Purchase Price:
Signature of Investor:
Name of Investor:
Address of Investor:
Electronic Mail Address:
Investor’s SS# or Tax ID#:

 

ACCEPTED BY: HIGHTIMES HOLDING CORP.

Signature of Authorized Signatory: __________________________________

Name of Authorized Signatory: __________________________

Date of Acceptance: _________________, 2020.

[Signature Page to Subscription Agreement]

 

Exhibit 6.1

 EXECUTION COPY

CONTINGENT STOCK PURCHASE AGREEMENT

amongst

Mountain High Recreation, Inc.

Chelsea Cordoba and Kenneth Cordoba

Hightimes Mountain LLC

and

Hightimes Holding Corp.

 

Dated as of

June 23, 2020

 

EXECUTION COPY

 

CONTINGENT STOCK PURCHASE AGREEMENT

THIS CONTINGENT STOCK PURCHASE AGREEMENT (“Agreement”), dated as June 23, 2020 (“Execution Date”), is made by and amongst Mountain High Recreation, Inc., a California company (the “Company” or “MHR”); Chelsea Cordoba and Kenneth Cordoba (collectively, the “Company Shareholders”); Hightimes Mountain, LLC, a Delaware restricted legal responsibility firm (the “Buyer”); and Hightimes Holding Corp., a Delaware company (“Hightimes”).

The Company and the Company Shareholders are hereinafter generally known as the “Selling Parties: The Buyer and Hightimes are hereinafter sometimes collectively referred to as the “Buying Parties”; and the Buying Parties and the Selling Parties are every referred to herein as a “Party” and collectively because the “Parties”. Except as in any other case outlined elsewhere herein, all different capitalized phrases used on this Agreement are outlined in Article I, under.

 

RECITALS

WHEREAS, Hightimes needs to trigger the Buyer to buy from the Company Shareholders 100% of the capital inventory of the Company, all pursuant to the phrases and situations set forth on this Agreement.

WHEREAS, the Company Shareholders are prepared to promote 100% of the capital inventory of the Company to the Buyer, all within the method and topic to the phrases and situations set forth on this Agreement.

WHEREAS, the Company is engaged within the enterprise of hashish gross sales, by way of supply (the “Business”).

WHEREAS, Company has been issued the next California hashish license by the BCC to conduct its Business: Retailer Non-storefront License (C9-0000042-LIC).

WHEREAS, Company has been issued the next license by the City of Sacramento (No. 20-OP-00155-6) to conduct its Business (hereinafter the “City License”).

NOW, THEREFORE, in consideration of the foregoing and their respective representations, warranties, covenants and agreements herein contained, and different good and helpful consideration, the receipt and sufficiency of that are hereby acknowledged, Parties hereto do hereby agree as follows:

 

ARTICLE I

DEFINITIONS

Section 1.01 Definitions. For functions of this Agreement, the next phrases can have the next meanings when used herein with preliminary capital letters:

Affiliate” with respect to any Person, some other Person straight or not directly controlling, managed by or beneath direct or oblique widespread management with such first Person the place “control” means the possession, straight or not directly, of the ability to direct or trigger the course of the administration insurance policies of a Person, by way of the possession of voting securities, by contract, as trustee, executor or in any other case.

Agreement” has the that means set forth within the Preamble.

Allocation” has the that means set forth in Section 7.2.

 

Ancillary Agreements” means, collectively, all Exhibits to this Agreement and different agreements to be executed in reference to the transactions contemplated by this Agreement.

Assignee” has the that means set forth in Section 11.2.

 Assumed Liabilities” has the that means set forth in Section 2.3.

 BCC” means the Bureau of Cannabis Control of the State of California.

Business” shall imply the enterprise of delivering hashish and hashish merchandise and derivatives thereof within the State of California to distributors, retail dispensaries and people.

Business Day” means any day aside from Saturday, Sunday, and any day that could be a authorized vacation or a day on which banking establishments in Georgia are approved by regulation or different governmental motion to shut.

Buyer” has the that means set forth within the Preamble.

Buyer Representatives” has the that means set forth in Section 10.2(c).

Buying Parties” has the that means set forth within the Preamble.

Claim” means all rights, claims, causes of motion, defenses, money owed, calls for, damages, obligations, and Liabilities of any type or nature beneath contract, at regulation or in fairness, recognized or unknown, contingent or matured, liquidated or unliquidated, and all rights and cures with respect thereto.

Closing” has the that means set forth in Section 4.1.

Closing Date” has the that means set forth in Section 4.1.

Closing Balance Sheet” shall imply the unaudited stability sheet of the Company dated as of the Closing Date and setting forth all Company Assets and all Liabilities of the Company required to be disclosed on a stability sheet ready in accordance with GAAP

Code” means the Internal Revenue Code of 1986, as amended.

Common Stock” shall imply the Class A voting widespread inventory, $0.001 par worth per share of Hightimes.

Company” has the that means set forth within the Preamble.

Company Assets” shall imply the collective reference to the belongings of the Company as on the Closing Date, together with (i) the License, (ii) the Company’s web site, e mail checklist of purchasers and distributors, associated buyer info; (iii) all of Company’s rights and pursuits within the internet area identify “Mountain High Recreation” and different specified manufacturers together with these listed on Company Disclosure Schedule 2.1(d); (iv) all promotional and promoting supplies, together with all catalogs, brochures, plans, buyer lists, provider lists, manuals, handbooks, gear and components lists, and seller and distributor lists; (v) all accounts receivable, inventories and automobiles and gear of the Company, (vi) all rights and advantages beneath some other Contracts (hereinafter outlined); (vii) all of Company’s proper, title and curiosity in all buyer lists, lists of suppliers, books, data, information, knowledge, stories, plans, surveys and property data; and (viii) the goodwill related to the Company Business. Company Assets shall not embrace any monies recovered by settlement or at trial by the Company or the Company Shareholders in reference to the Driven Deliveries Litigation. Any such restoration shall stay the property of Company Shareholders.

 

Company Disclosure Schedule” means the vendor disclosure schedule connected hereto as Exhibit D.

Company Shares” shall imply the 100,000 shares of widespread inventory of the Company, $1.00 par worth per share which are owned of document and beneficially by the Company Shareholders.

Contract” means any written contract, settlement, lease or sublease, license or sublicense, instrument, indenture, dedication or endeavor.

Consideration” has the that means set forth in Section 3.1.

Driven Deliveries Asset Purchase Agreement” means the Asset Purchase Agreement and First Amendment to the Asset Purchase Agreement between MHR and Driven Deliveries, Inc. (“DD”), dated July 10, 2019 and October 4, 2019, respectively

Driven Deliveries Litigation” means the pending lawsuit filed within the Superior Court of Los Angeles County by DD in opposition to the Company, searching for rescission of the Driven Deliveries Asset Purchase Agreement and sure financial damages.

Due Diligence Materials” means all written info, paperwork, info, data or different supplies contained within the due diligence knowledge room established by the Company for the needs of the Buying Parties endeavor due diligence on the Company previous to the Closing Date of this Agreement which is accessible utilizing a drop field hyperlink offered by the Company.

Employment Agreements” shall imply the employment letter agreements between Buyer, the Company, Hightimes and every of Chelsea Cordoba and Kenneth Cordoba which shall every (a) have a time period of two years (b) present for a base wage of $125,000 every year plus bonus as decided by the Board of Directors of Buyer, (c) shall present for choices to buy 35,000 shares of Hightimes Common Stock which shall vest over a 3 yr interval, and shall be considerably within the type of Exhibit B annexed hereto and made a component hereof.

Execution Date” has the that means set forth within the Preamble.

GAAP” means United States usually accepted accounting rules in impact from time to time.

Governing Documents” means, for any Person, as relevant, such Person’s articles or certification of group or formation, bylaws, working or partnership settlement or different governing paperwork. 

Governmental Authority” means any company, division, subdivision or governmental or regulatory authority or any adjudicatory physique thereof, of the United States, or any state or metropolis thereof.

Hightimes” has the that means set forth within the Preamble.

Indemnified Party” has the that means set forth in Section 10.2(a).

Indemnifying Party” has the that means set forth in Section 10.2(a). 

JAMS” has the that means set forth in Section 11.3.

Knowledge of Buying Parties” or some other comparable time period or data qualification means the precise data of the Buyer and Hightimes, after due inquiry. 

Knowledge of Selling Parties” or some other comparable time period or data qualification means the precise data of the Company and the Company Shareholders, after due inquiry.

Legal Proceeding” means any judicial, administrative or arbitral actions, fits, proceeds (public or personal), or claims of any proceedings by or earlier than a court docket or different Governmental Authority.

Legal Requirement” means, along with the Required Consents, any federal, state, provincial, native, municipal, international, worldwide, or multinational regulation (statutory, widespread or in any other case), structure, treaty, conference, ordinance, equitable precept, code, rule, regulation or order enacted, adopted, promulgated, issued or utilized by any Governmental Authority or different comparable authority.

Liability” or “Liabilities” means any debt, legal responsibility, dedication or obligation of any type (whether or not direct or oblique, recognized or unknown, fastened, absolute or contingent, matured or unmatured, asserted or not asserted, accrued or unaccrued, liquidated or unliquidated).

 License” means the non-retail retailer hashish license granted by the BCC and the City of Sacramento, entitling the Company to function a hashish supply service within the State of California, true copies of that are annexed to this Agreement as Exhibit A and made a component hereof.

 

Lien” means any mortgage, pledge, safety curiosity, encumbrance, lien (judicial, statutory or different), conditional sale settlement, declare or legal responsibility.

Losses” means losses, damages, Liabilities, deficiencies, Actions, judgments, curiosity, awards, penalties, fines, prices or bills of no matter type, together with cheap attorneys’ charges and the price of imposing any proper to indemnification hereunder and the price of pursuing any insurance coverage suppliers; offerednevertheless, that “Losses” shall not embrace punitive damages, besides to the extent truly awarded to a Governmental Authority or different third occasion.

Material Adverse Effect” means any circumstances, state of info, occasion, change or impact that will fairly be anticipated to have or that leads to a fabric adversarial impact on (i) the Company Assets, together with the Company’s capacity to function the Business, or (ii) Company’s capacity to shut the transactions contemplated by this Agreement and the Ancillary Agreements; offerednevertheless, that any adversarial impact ensuing from any circumstances, state of info, occasion, change or impact brought on by occasions, modifications or developments referring to any of the next shall not be a Material Adverse Effect: (a) modifications in situations within the U.S. or international economic system usually or the U.S. or international capital, credit score or monetary markets usually, together with modifications in industrial financial institution mortgage rates of interest or forex alternate charges; (b) modifications in, or required by, relevant regulation or basic authorized, Tax, regulatory or political situations; (c) modifications required by GAAP; (d) acts of battle (whether or not or not declared), armed hostilities, sabotage or terrorism occurring after the date of this Agreement or the continuation, escalation or worsening of any such acts of battle, armed hostilities, sabotage or terrorism threatened or underway as of the date of this Agreement; (e) the results of the COVID-19 virus pandemic, earthquakes, hurricanes, floods, or different pure disasters; (f) modifications usually affecting the hashish {industry}; (g) the impact of the negotiation, execution, announcement or pendency of this Agreement or the transactions contemplated hereby or the consummation of the transactions contemplated by this Agreement; or (h) strikes, work stoppages or different labor disturbances.

Permits” means, along with the License, some other licenses, permits, certificates, certifications, privileges, immunities, notifications, exemptions, classifications, or registrations issued by any Governmental Authority, and all pending purposes therefor or renewals thereof.

Person” means any particular person, company, partnership, restricted legal responsibility firm, three way partnership, affiliation, joint-stock firm, belief, unincorporated group or Governmental Authority.

Qualified Securities Market” shall imply any one among The Nasdaq Stock Market (together with the Nasdaq Capital Market), the NYSE:Amex, the OTCQX Market or the Canadian Securities Exchange.

Related Person” means, with respect to any Person, all previous, current and future administrators, officers, members, managers, stockholders, staff, controlling individuals, brokers, professionals, attorneys, accountants, lenders, funding bankers or representatives of any such Person.

Representative” means, with respect to any Person, any director, officer, principal, shareholder, member, companion, legal professional, worker, agent, marketing consultant, accountant, or some other Person appearing in a consultant capability for such Person.

Required Consents” shall imply the written consent or approval of the BCC and the City of Sacramento or some other Governmental Authority change of possession of the Company from the Company Shareholders to the Buyer.

Securities Act” has the that means set forth in Section 3.2.

Selling Parties” every has the that means set forth within the Preamble.

Survival Period” has the that means set forth in Section 10.1.

Tax Return” means any report, return, info return, submitting or different info, together with any schedules, reveals or attachments thereto, and any amendments to any of the foregoing required to be filed or maintained in reference to the calculation, willpower, evaluation or assortment of any Taxes (together with estimated Taxes).

Taxes” means all taxes, nevertheless denominated, together with any curiosity, penalties or additions to tax that will turn out to be payable in respect thereof, imposed by any Governmental Authority, whether or not payable by purpose of contract, assumption, transferee legal responsibility, operation of regulation or Treasury Regulation part 1.1502-6(a) (or any predecessor or successor thereof or any analogous or comparable provision beneath state, native or international regulation), which taxes shall embrace all revenue taxes, payroll and worker withholding unemployment insurance coverage, social safety (or comparable), gross sales and use, excise, franchise, gross receipts, occupation, actual and private property, stamp, switch, workmen’s compensation, customs duties, registration, documentary, worth added, different or add-on minimal, estimated, environmental (together with taxes beneath part 59A of the Code) and different assessments or obligations of the identical or an analogous nature, whether or not arising earlier than, on or after the Closing Date.

Transaction Taxes” has the that means set forth in Section 7.1.

Transfer” has the that means set forth in Section 2.1.

 

ARTICLE 2

PURCHASE AND SALE OF THE COMPANY SHARES

 

Section 2.1 Transfer of Company Shares. At the Closing, and upon the phrases and situations herein set forth, the Company Shareholders shall promote, switch, assign, convey and ship (collectively, “Transfer”) to the Buyer, and Buyer shall purchase from Company, all and never lower than all, of the Company Shares, free and away from any and all Liens.

Section 2.2 Deliveries. On the Closing Date, the Company Shareholders shall ship to the Buyer (a) a number of inventory certificates evidencing 100% of the Company Shares, duly endorsed by the Company Stockholder for Transfer or accompanies by separate inventory powers duly executed by the Company Shareholders, and (b) the Closing Date Balance Sheet .

Section 2.3 Company Liabilities. At the Closing, Buyer shall assume, and thereafter pay, carry out and discharge solely these liabilities and obligations in respect of the Company and the operation of the Business following the Closing which are set forth on the Closing Date Balance Sheet or that will come up by purpose of any acts or omissions of the Buyer for any interval from and after the Closing Date (collectively, the “Assumed Liabilities”). The Parties agree that the Buyer is assuming solely the Assumed Liabilities and isn’t assuming some other legal responsibility or obligation of the Company of no matter nature, referring to some other Liabilities (aside from Assumed Liabilities) or Claims asserted or unasserted, recognized or unknown for accidents to individuals or property that are associated to circumstances or occasions that predate the Closing of the transaction contemplated hereunder, together with, with out limitation, any Liabilities, Claims or Losses which may be incurred by the Company, the Buyer or Hightimes arising out of the Driven Deliveries Litigation (collectively, the “Excluded Liabilities”). The Company Shareholders hereby conform to indemnify, defend and maintain innocent, the Company, the Buyer and Hightimes in respect of any Claims, Losses or Liabilities referring to or related to the Excluded Liabilities. The Parties agree that Company Shareholders shall have the only authority, discretion and proper to defend the Company in opposition to the Driven Deliveries Litigation with counsel of their selecting to defend, litigate, settle, and/or attempt the Driven Deliveries Litigation on the sole discretion and choice making of Company Shareholders; offered, that that prior written consent of Hightimes shall be required to be receive in any settlement of the Driven Deliveries Litigation if and to the extent that such settlement shall obligate the Company, the Buyer or Hightimes to make any funds in connection therewith.

 

ARTICLE 3

CONSIDERATION

Section 3.1 Total Consideration. The whole mixture consideration for the Transfer of the Company Shares would be the sum of as much as Two Million Eight Hundred Thousand Dollars ($2,800,000) (the “Consideration”). Such Consideration shall be payable as follows:

(a) Closing Date Common Stock. On the Closing Date, Hightimes shall ship to the Company Shareholders (i) Two Million Seven Hundred Thousand (2,700,000) shares of Hightimes Common Stock (the “Closing Date Common Stock”), much less (ii) the Holdback Shares referred to in Section 3.4 under, with every share of Hightimes Common Stock to be valued at $1.00 per share, after giving impact to a contemplated 11-for-1 inventory cut up to be consummated on or about June 1, 2020.

(b) Cash Payment. On the Closing Date, the Buyer shall pay to the Company Shareholders the sum of $100,000, payable in money by wire switch of instantly accessible funds to an account designated by the Company Stockholder (the “Cash Payment”).

 

Section 3.2 Royalties. In addition to the above Closing Date Common Stock and Cash Payment, for a interval of 18 months (“Royalty Period”) following the Closing Date, the Buyer shall pay to the Company Shareholders a 3 p.c (3%) royalty on the web gross sales value of all hashish and associated hashish merchandise offered and delivered by the Buyer, as much as a most quantity of royalty funds to not exceed $200,000 (the “Royalties”). The Royalties shall be paid as accrued on a month-to-month foundation throughout the Royalty Period.

Section 3.3 Lockup Agreement. On the Closing Date, the Company Stockholders and every Affiliate of the Company Shareholders, shall execute a lockup and “leak out” settlement with Hightimes within the type of Exhibit C annexed hereto (the “Lockup Agreement”) pursuant to which such stockholder(s) could, following 180 days from the date of the preliminary itemizing or buying and selling of the Hightimes Common Stock on a Qualified Securities Market to publicly promote their particular person shares of Hightimes Common Stock on the price of 25% of the variety of shares of Hightimes Common held by every individual each 180 days thereafter.

Section 3.4 Holdback Shares. On the Closing Date, Hightimes shall deduct from the Closing Date Common Stock and retain an mixture of Five Hundred and Forty Thousand (540,000) shares of Hightimes Common Stock (the “Holdback Shares”) to be held in belief by Hightimes for a interval of as much as twelve (12) months from the Closing Date. Subject to extension of such Holdback Period by Hightimes within the occasion that the Driven Deliveries Litigation has not, by the expiration of such 12 month interval, been settled or topic to an order of the court docket from which no attraction has or could be taken (such interval, as the identical could also be prolonged, the “Holdback Period”). The Holdback Amount shall function collateral to safe the indemnification obligations of the Company Shareholders pursuant to this Agreement, together with the duty of the Company Shareholders to indemnify, defend and maintain innocent, the Company and Hightimes from any Excluded Liabilities. In the occasion that the Company or Hightimes shall incur any Claims, Losses or Liabilities in reference to (a) the Excluded Liabilities (together with the outcomes of the Driven Deliveries Litigation) or (b) a breach of any of the representations, warranties and covenants of the Company Shareholders, Hightimes shall be entitles to scale back the two,700,000 Closing Hightimes Shares by an quantity equal to any Claims, Losses or Liabilities incurred by the Company or Hightimes, primarily based upon every Closing Hightimes Share being valued at One Dollar ($1.00) per share. The stability, if any, of the Holdback Shares shall be launched to the Company Shareholders on the expiration of the Holdback Period.

 

ARTICLE 4

CLOSING AND DELIVERIES

 Section 4.1 Closing. The consummation of the transactions contemplated hereby (the “Closing”) shall happen on the primary Business Day following the satisfaction or waiver by the suitable occasion of all of the situations contained in Article 8, or on such different date or at such different place and time as could also be mutually agreed to by the Parties (the “Closing Date”). All proceedings to be taken and all paperwork to be executed and delivered by the Parties on the Closing shall be deemed to have been taken and executed concurrently and no proceedings shall be deemed to have been taken nor paperwork executed or delivered until all have been taken, executed and delivered. In no occasion shall the Closing or the Closing Date be later than September 30, 2020 (the “Outside Closing Date”) except such Outside Closing Date shall be prolonged by mutual settlement of the Parties or pursuant to Section 4.2(j) under.

 

Section 4.2 Selling Parties’ Deliveries. At the Closing, the Company Shareholders and the Company shall ship the next to Hightimes and the Buyer:

(a) 100% of the issued and excellent Company Shares, duly endorsed for Transfer;

(b) The Closing Date Balance Sheet;

(c) A secretary’s certificates for the Company attaching and certifying its (i) Governing Documents; and (ii) duly executed resolutions of the board of administrators of the Company (A) approving this Agreement, the Exhibits hereto and the transactions contemplated hereby, (B) offering for the resignations of all members of the board of administrators of the Company, aside from the Company Shareholders, and (C) including three representatives of Hightimes as members of the 5 individual board of administrators of the Company;

(d) Duly executed Lockup Agreements;

(e) The Employment Agreements duly executed by every of Chelsea Cordoba and Kenneth Cordoba.

(f) Approval or consent from the City of Sacramento approving Buyer as the brand new proprietor of Company, an Owner of the City License;

(g) Withdrawal of Company Shareholders as Owners of Company filed with and accepted by the City of Sacramento;

(h) Approval or consent from the State of California BCC approving Buyer as the brand new proprietor of Company and, thereby, an Owner of the State License; and

(i) Withdrawal of Company Shareholders as Owners of the Company filed with and accepted by the BCC.

 

Section 4.3 Buying Parties’ Deliveries. At or previous to the Closing, the Buying Parties shall ship or procure the supply of the next to the Company Shareholders:

(a) the Cash Payment;

(b) the Closing Common Stock of Hightimes;

(c) the Employment Agreements duly executed by Buying Parties;

(d) the Lockup Agreements;

(e) if relevant previous to the Closing, the Management Services Agreement; and

(f) a secretary’s certificates for every of the Buying Parties attaching and certifying their respective (i) Governing Documents; and (ii) resolutions of the board of administrators of every of Hightimes and the Buyer approving this Agreement, the Exhibits hereto and the transactions contemplated hereby;

 

ARTICLE 5

REPRESENTATIONS AND WARRANTIES

 

Section 5.1 Representations and Warranties of Selling Parties. Each of the Selling Parties collectively and severally symbolize and warrant to Buyer and Hightimes, as of the date hereof and as of the Closing Date, as follows:

(a) Ownership and Organization. The Company Shareholders are the only document and helpful homeowners of the Company Shares and personal the Company Shares within the respective quantities as set forth on the Company Disclosure Schedule. Company Shares symbolize the one capital inventory of the Company that’s issued and excellent. Except for this Agreement, there aren’t any choices, warrants or different third occasion rights to buy any of the Company Shares or different capital inventory of the Company. The Company Shares are owned by the Company Shareholders, free and away from all Liens. The Company is company duly organized, validly present and in good standing beneath the legal guidelines of the State of California. The Company Shareholders personal 100% of the capital inventory of the Company. The Company has all requisite energy and authority to personal or lease function the Company Business and to carry out its obligations hereunder and beneath any Ancillary Agreements to which it’s or might be occasion. Company is certified or approved to do enterprise and is in good standing beneath the legal guidelines of every jurisdiction wherein it owns or leases its actual property and one another jurisdiction wherein the conduct of its Business or the possession of its properties requires such qualification or authorization, besides the place failure to be so certified, approved or in good standing wouldn’t have a Material Adverse Effect.

(b) Authorization and Validity. The Company Shareholders and the Company has all requisite energy and authority to enter into this Agreement and, topic to the receipt of all Required Consents, to carry out its obligations hereunder. The execution and supply of this Agreement and the efficiency of the obligations of every of the Selling Parties hereunder, has been, or on the Closing Date might be, duly approved by all obligatory motion of the Selling Parties, and no different company proceedings on the a part of Company are essential to authorize such execution, supply and efficiency. This Agreement has been duly executed by every of the Selling Parties and constitutes legitimate and binding obligations, enforceable in opposition to every of the Selling Parties in accordance with its phrases.

(c) No Conflict or Violation. Subject to receipt of all the Required Consents, the execution, supply and efficiency by the Selling Parties of this Agreement doesn’t and won’t: (i) violate or battle with any provision of the Company’s Governing Documents; (ii) violate any provision of regulation, or any order, judgment or decree of any Governmental Authority relevant to the Selling Parties; (iii) end in or require the creation or imposition of any Liens (aside from Permitted Liens on any of the Company Assets; or (iv) violate or end in a breach of or represent (with due discover or lapse of time or each) a default beneath any Contract entered into by Selling Parties by which Selling Parties is sure or to which the Selling Parties are topic.

(d) Consents and ApprovalsNo consents or approvals, aside from the consent or approval of the BCC and the City of Sacramento to the change of possession of the Company is is required to be complied with, in reference to the Company’s capacity to function its Business beneath the License.,).

(e) Ownership of Company Assets. The Company is in possession, and is the only proprietor, of all the Company Assets. The Company Assets symbolize all, and never lower than all, of the belongings required or essential to allow the Company to hold out and proceed the Business as presently performed.

 

(f) Title to Company Assets. The Company good and marketable title to, or a legitimate and enforceable proper to make use of, the Company Assets free and away from all Liens.

(g) Company Financial Statements. The Company Stockholders shall, on or earlier than May 31, 2020, present to Hightimes and the Buyer the unaudited stability sheet, assertion of operations and assertion of money flows of the Company as at December 31, 2018 and December 31, 2019 and for the 2 fiscal years then ended (the “Company Financial Statements”). Such Company Financial Statements have been ready from the books and data of the Copmany and embrace all the belongings and liabilities of the Company which are required to be set forth on a stability sheet. Except for the absence of footnotes and yr finish audit changes, such Company Financial Statement have been ready in accordance with usually accepted accounting principals (“GAAP”). To the data of the Company Stockholders, they haven’t any purpose to imagine that the Company Financial Statements can’t be audited by Hightimes auditors in accordance with GAAP,

(h) Legal Proceedings. Except with respect to the pending Driven Deliveries Litigation, there aren’t any Claims, Legal Proceedings, inquiries or investigations, at regulation or in fairness, earlier than or by any court docket, public board or physique, pending or, to the very best of Knowledge of the Selling Parties, threatened in opposition to or affecting the Company, the Business or the Company Assets, neither is there any foundation therefor, whereby an unfavorable choice, ruling or discovering would adversely have an effect on the validity or enforceability of this Agreement or the consummation of the transactions contemplated hereby.

(i) Hightimes Common Stock. The Company Shareholders every represents and warrants with respect to the Hightimes Common Stock that:

(i) the Hightimes Common Stock are or shall be restricted securities and haven’t been registered for resale beneath the Securities Act, and might not be offered, transferred, hypothecated or assigned by such Owners within the absence on a registration assertion overlaying the Hightimes Common Stock that has been declared efficient by the SEC or the supply of an utility exemption from the registration necessities of the Securities Act;

(ii) such Hightimes Common Stock have been or shall be issued pursuant to Section 4(a)(2) of the Securities Act;

(iii) the Company Shareholders and their Affiliates are buying the Hightimes Common Stock for funding solely and never with a view towards the rapid resale or distribution thereof;

(iv) The Company Shareholders and their Affiliates or their authorized and monetary representatives have reviewed the SEC Reports filed by Hightimes with the SEC and perceive the dangers of his funding in and the Hightimes Common Stock; and

(v) every of Chelsea Cordoba and Kenneth Cordoba are every “accredited investors” (as that time period is outlined in Rule 501 beneath the Securities Act), has no rapid want for liquidity of their funding within the Hightimes Common Stock, and might afford a lack of their funding.

 

Section 5.2 Representations and Warranties of Buying Parties. The Buying Parties hereby collectively and severally symbolize and warrant to Selling Parties, as follows:

(a) Corporate Organization. Buyer is a restricted legal responsibility firm duly organized, validly present and in good standing beneath the legal guidelines of the State of Delaware. Hightimes is a company duly organized, validly present and in good standing beneath the legal guidelines of the State of Delaware. Each of the Buying Parties have all requisite company energy and authority to personal their properties and belongings and to conduct their companies as now performed.

(b) Authorization and Validity. Each of the Buying Parties has all requisite company energy and authority to enter into this Agreement and has or can have all requisite company energy and authority to carry out its obligations hereunder. The execution and supply of this Agreement and the efficiency of Buying Parties’ obligations hereunder have been, or on the Closing Date might be, duly approved by all obligatory by the board of administrators of the Buying Parties, and no different company proceedings on the a part of Buying Parties are essential to authorize such execution, supply and efficiency. This Agreement has been duly executed by Buying Parties and constitutes legitimate and binding obligations, enforceable in opposition to Buying Parties in accordance with its phrases.

(c) No Conflict or Violation. The execution, supply and efficiency by Buying Parties of this Agreement to which Buying Parties is or will turn out to be a celebration don’t and won’t (i) violate or battle with any provision of the organizational paperwork of Buying Parties, (ii) violate any provision of regulation, or any order, judgment or decree of any court docket or Governmental Authority relevant to Buying Parties; or (iii) violate or end in a breach of or represent (with due discover or lapse of time or each) a default beneath any Contract to which Buying Parties is occasion or by which Buying Parties is sure or to which any of Buying Parties’ properties or belongings is topic. No approval by the holders of Hightimes Common Stock is required to be obtained by Hightimes in reference to the authorization, execution, supply and efficiency of this Agreement or in reference to the authorization, challenge and sale of Hightimes Common Stock, besides as has been beforehand obtained. Except for acquiring the Required Consents, no consent, approval, authorization or different order of any Governmental Authority or some other Person is required to be obtained by Hightimes or the Buyer in reference to the authorization, execution, supply and efficiency of this Agreement or in reference to the authorization, issuance and sale of the Consideration.

 

(d) Capitalization and Ownership of Hightimes. As on the date of this Agreement, Hightimes is permitted to challenge an mixture of 110,000,000 shares of its Capital Stock, $0.0001 par worth per share, of which (i) 100,000,000 shares are designated as Hightimes Common Stock, and (ii) 10,000,000 shares are designated as most well-liked inventory (the “Preferred Stock”), which can be issued in a number of collection containing such rights, preferences and privileges because the board of administrators of Hightimes could, from time to time, designate. As of May 15, 2020, an mixture of roughly 25,294,000 shares of Hightimes Common Stock are issued and excellent and no shares of Preferred Stock have been issued. On June 22, 2020, in reference to the acquisition of the fairness of a subsidiary of Harvest Health & Recreation, Inc. that has sure rights to personal eight hashish dispensaries situated in California, Hightimes issued 600,000 shares of its Series A convertible Preferred Stock, as mirrored within the Hightimes Form 1-U SEC Report dated June 23, 2020. The shares of Hightimes Common Stock owned by its officers, administrators and holders of 5% or extra of the excellent Hightimes Common Stock are mirrored in Hightimes SEC Reports. Hightimes Common Stock, if and when issued to the Owners in accordance with the phrases and situations of this Agreement, might be duly approved, validly issued, absolutely paid and non-assessable, free and away from all Encumbrances (aside from these arising beneath federal or state securities legal guidelines). The challenge and sale of Merger Shares in fee of the Merger Consideration is not going to end in a proper of any holder of any securities of Hightimes to regulate the train, alternate or reset the worth beneath such securities or give rise to any preemptive rights, rights of first refusal or different comparable rights. Hightimes has made accessible to the Owners true and full copies of its Charter Documents, as in impact on the date hereof.

 

 

(e) SEC Filings. Hightimes has well timed filed with or furnished to, as relevant, the Securities and Exchange Commission (“SEC”) all registration statements, prospectuses, stories, schedules, kinds, statements and different paperwork (together with reveals and all different info included by reference) required to be filed or furnished by it with the SEC since January 1, 2018 (the “Hightimes SEC Documents”). Hightimes has made accessible to the Owners all such Hightimes SEC Documents that it has so filed or furnished previous to the date hereof. As of their respective submitting dates (or, if amended or outmoded by a subsequent submitting, as of the date of the final such modification or superseding submitting previous to the date hereof), every of Hightimes SEC Documents complied as to kind in all materials respects with the relevant necessities of the Securities Act, and the Exchange Act, and the foundations and laws of the SEC thereunder relevant to such Hightimes SEC Documents. None of Hightimes SEC Documents, together with any monetary statements, schedules or reveals included or included by reference therein on the time they had been filed (or, if amended or outmoded by a subsequent submitting, as of the date of the final such modification or superseding submitting previous to the date hereof), contained any unfaithful assertion of a fabric reality or omitted to state a fabric reality required to be said therein or obligatory with a view to make the statements therein, in mild of the circumstances beneath which they had been made, not deceptive. None of Hightimes’ direct or oblique Subsidiaries is required to file or furnish any kinds, stories or different paperwork with the SEC.

 

(f) Financial Statements. Each of the consolidated monetary statements (together with, in every case, any associated notes thereto) contained in Hightimes SEC Documents: (i) complied as to kind in all materials respects with the revealed guidelines and laws of the SEC with respect thereto as of their respective dates; (ii) was ready in accordance with United States usually accepted accounting rules (“GAAP”) utilized on a constant foundation all through the intervals concerned (besides as could also be indicated within the notes thereto and, within the case of unaudited interim monetary statements, as could also be permitted by the SEC for Semi Annual Reports on Form 1S-A); and (iii) pretty offered in all materials respects the consolidated monetary place of Hightimes and its consolidated Subsidiaries on the respective dates thereof and the consolidated outcomes of Hightimes’ Company Business and money flows for the intervals indicated therein, topic, within the case of unaudited interim monetary statements, to regular and year-end audit changes as permitted by GAAP and the relevant guidelines and laws of the SEC.

 

(g) Litigation. There aren’t any Claims, Legal Proceedings or investigations pending or, to the Knowledge of Buying Parties, threatened, earlier than any federal or state court docket, Governmental Authority or Person introduced by or in opposition to Buying Parties, or any Related Person of Buying Parties that would fairly be anticipated to have an effect on the power of Buying Parties to consummate the transactions contemplated by this Agreement.

 

 

(h) Investigation by Buying Parties. Each of the Buying Parties has performed its personal unbiased evaluation and evaluation of the Company monetary situation and Business, and acknowledges that Company have offered Buying Parties with cheap entry to the personnel, properties, premises and data of the Business for this goal. In coming into into this Agreement, Buying Parties have relied solely upon its personal investigation and evaluation and the representations and warranties of Selling Parties set forth on this Agreement.

 

(i) Brokers. Neither Hightimes nor any of its officers, administrators, staff or stockholders has employed or engaged any dealer or finder in reference to the transactions contemplated by this Agreement and no charge or different compensation is or might be due and owing to any dealer, finder, underwriter, placement agent or comparable individual in reference to the transactions contemplated by this Agreement.

 

ARTICLE 6

COVENANTS AND OTHER AGREEMENTS

 

Section 6.1 Mutual Pre-Closing Covenants. Within 30 days of the execution of the Agreement, the Parties shall submit any all paperwork obligatory to acquire the Required Consents together with, however not restricted to, submitting a Notification and Request Form (BCC-LIC-027) to the BCC, submitting all required and requested paperwork to the City of Sacramento, and submitting all required and requested paperwork to some other Governmental Authorities, issuing energy of attorneys to Buyer, as obligatory, and offering entry to personnel and books and data. Regulatory counsel for Hightimes would be the lead individual for acquiring the Required Consents with the complete cooperation of the Parties.

 

Section 6.2 Pre-Closing Covenants of Selling Parties. Each of the Selling Parties covenants to Buying Parties that throughout the interval from the Execution Date by way of and together with the Closing Date:

 

(a) Conduct of Business Before the Closing Date. The Company shall function the Business in all materials respects within the Ordinary Course of Business. Without limiting the foregoing and with out acquiring the prior consent of Buyer to take any actions not permitted or required by the next clauses, the Company shall adjust to the next affirmative and unfavourable covenants:

 

(i) the Company shall not take or conform to decide to take any motion that will make any illustration or guarantee of Company inaccurate in any materials respect at, or as of any time previous to, the Closing Date;

 

(ii) the Company shall use commercially cheap efforts to (A) retain the companies of its present staff (or their successors) who’re in good standing and who’re essential to conduct the Business in all materials respects and (B) keep its relationships with and protect for the Business the goodwill of the Business;

 

(iii) the Company shall not terminate, amend or modify any License;

 

(iv) the Company shall keep all insurance coverage insurance policies;

 

(v) the Company shall pay all licensing charges;

 

 

(vi) the Company shall pay all Taxes and file all Tax Returns the Company shall not terminate, amend or modify any License;

 

(vii) the Company shall (A) comply in all materials respects with all Legal Requirements relevant to it or having jurisdiction over the Business or any Acquired Asset, and (B) keep in full power and impact the License and all different materials Permits and adjust to the phrases of the License and one another Permit (however solely to the extent such Permits are obligatory for the Business;

 

(viii) the Company shall use commercially cheap efforts to not take or conform to or commit to help some other Person in taking any motion (i) that will fairly be anticipated to end in a failure of any of the situations to the Closing or (ii) that will fairly be anticipated to impair the power of Company or Buyer to consummate the Closing in accordance with the phrases hereof or to materially delay such consummation; and

 

(ix) the Company shall not take, or agree, commit or provide (in writing or in any other case) to take, any actions in violation of the foregoing.

 

(b) Access to Records and Properties. Buyer shall be entitled to, at its expense, conduct such investigation of the situation of the Company as Buyer and Hightimes shall fairly deem applicable.

 

(c) Notices. From the date hereof until the Closing Date, the Selling Parties shall present Hightimes with immediate written discover of (i) any breach of the representations and warranties set forth in Section 5.1 or (ii) the violation or breach of any illustration, guarantee, or covenant that has rendered, or that will fairly be anticipated to render, the satisfaction of any situation to the obligations of the Buying Parties hereunder unattainable or impracticable.

 

(d) Notice of Certain Events. The Selling Parties shall promptly notify Buyer of, and furnish to Buyer, any info it could fairly request with respect to the incidence of any occasion or situation or the existence of any reality that will fairly be anticipated to trigger any of the situations to Buyer’s obligations to consummate the transactions contemplated by this Agreement to not be fulfilled.

 

Section 6.3 Pre-Closing Covenants of Buying Parties. Each of the Buying Parties covenants to the Selling Parties that, throughout the interval from the Execution Date by way of and together with the Closing Date or the sooner termination of this Agreement:

 

(a) Required Consents and Approvals. Buyer and Hightimes shall use commercially cheap efforts to acquire the Required Consents previous to Closing, together with, however not restricted to, making filings with the BCC, the City of Sacramento and some other Governmental Authorities.

 

(b) Cooperation. Buyer and Hightimes shall use commercially cheap efforts to take, or trigger to be taken, all motion and to do, or trigger to be finished, all issues obligatory or correct, in step with relevant regulation, to consummate and make efficient as quickly as potential the transactions contemplated hereby.

 

(c) Notices. From the date hereof until the Closing Date, Buying Parties shall present Company with immediate written discover of (i) any breach of the representations and warranties set forth in Section 5.2 or (ii) the violation or breach of any illustration, guarantee, or covenant that has rendered, or that will fairly be anticipated to render, the satisfaction of any situation to the obligations of the Buying Parties hereunder unattainable.

 

 

(d) Notice of Certain Events. Buying Parties shall promptly notify Selling Parties of, and furnish to Selling Parties, any info it could fairly request with respect to the incidence of any occasion or situation or the existence of any reality that will fairly be anticipated to trigger any of the situations to Buying Parties obligations to consummate the transactions contemplated by this Agreement to not be fulfilled.

 

Section 6.4 Expenses. Each of Selling Parties and Buying Parties shall bear their very own bills in reference to this Agreement and the transactions contemplated hereby.

 

Section 6.5 Post-Closing Books and Records; Properties; and Personnel. From and after the Closing Date for a interval of 1 (1) yr, every Party shall present the opposite Parties (and their respective Representatives) with entry, at cheap occasions and in a way in order to not unreasonably intervene with its regular enterprise, to the belongings, books, data, programs and different property and any staff of the opposite Parties in order to allow Buyer and Selling Parties to arrange Tax, monetary or court docket filings or stories, to reply to court docket orders, subpoenas or inquiries, investigations, audits or different proceedings of Governmental Authorities, to prosecute and defend authorized Actions or for different like functions, together with claims, objections and resolutions. During such one (1) yr interval, every Party (and its Representatives) shall be permitted to make copies of any books and data described on this Section 6.5, topic to the confidentiality necessities set forth in Section 6.6. If any Party needs to get rid of any such books and data, such Party shall, thirty (30) days previous to such disposal, present the opposite Party with an affordable alternative to take away or copy such data to be disposed of on the eradicating Party’s expense. Buyer shall retain such books and data for a interval of six (6) years following the Closing.

 

Section 6.6 Confidentiality. Subject to any disclosures that are required by regulation, the necessities of any regulatory physique or the foundations of any relevant inventory market or inventory alternate, every of the Parties shall, and shall use its finest efforts to trigger its Affiliates and Representatives to, maintain all confidential paperwork and knowledge in regards to the Business, and the transactions set forth hereunder furnished to Buyer or its Affiliates in reference to the transactions contemplated by this Agreement. The Selling Parties acknowledge and agree that Hightimes is a public firm whose Common Stock will commerce on the OTCQX Market or different Qualified Securities Market, and accordingly is topic to steady disclosure obligations beneath JOBS Act, the Securities Act and might be topic to disclosure obligations beneath the Securities Exchange Act of 1934, as amended.

 

Section 6.7 Non-Competition. The Parties hereto do hereby agree that for a interval of three (3) years following the Closing Date, neither the Company Shareholders or any of their Affiliates shall, straight or by way of some other Person, personal, function, handle or in any other case put money into a enterprise that competes with the Business of the Company within the State of California. The Company Shareholders hereby agree {that a} violation or threatened violation of any of the provisions of Section 6.7 shall trigger rapid and irreparable hurt to the Buying Parties and that the harm to the Buying Parties might be troublesome or unattainable to calculate with precision. Therefore, within the occasion the Company Shareholders or any Affiliate of the Company Shareholders violates the provisions of Section 6.7, an injunction restraining the Company Shareholders or any Affiliate of Company Shareholders from such violation could also be obtained by any a number of member of the Buying Parties along with some other aid then accessible to the aggrieved occasion or events. If, on the time of enforcement of any provision of Section 6.7, a court docket shall maintain that the length, scope or different restrictions said herein are unreasonable beneath circumstances then present, the Parties agree that the utmost length, scope or different restrictions cheap beneath such circumstances shall be substituted for the said length, scope or different restrictions and that the court docket shall be allowed to revise the restrictions contained herein to cowl the utmost interval, scope and different restrictions permitted by Law; offered, nevertheless, that the substituted interval shall not exceed the interval contemplated by this Agreement.

 

 

ARTICLE 7

TAXES

 

Section 7.1 Transaction Taxes and different Taxes. All capital beneficial properties and/or revenue Taxes, in reference to the Transfer of the Company Shares to the Company Shareholders (collectively, “Transaction Taxes”) which may be imposed by purpose of the sale, Transfer, project and supply of the Company Shares pursuant to this Agreement shall be borne by the Company Shareholders. All different Taxes shall be borne by the Company, and the Company and the Buyer shall indemnify the Company Shareholders in reference to any Claims by any Governmental Authority in respect of all Taxes aside from Transaction Taxes. The Buying Parties shall cooperate with the Company Shareholders to (a) decide the quantity of Transaction Taxes payable in reference to the transactions contemplated beneath this Agreement, (b) present all requisite exemption certificates and (c) put together and file any and all required Tax Returns for or with respect to such Transaction Taxes with any and all applicable Governmental Authorities.

 

Section 7.2 Cooperation on Tax Matters. The Parties shall (and shall trigger their respective Affiliates to) cooperate absolutely with one another and make accessible or trigger to be made accessible to one another for session, inspection and copying (at such different Party’s expense) in a well timed vogue such personnel, Tax knowledge, related Tax Returns or parts thereof and filings, information, books, data, paperwork, monetary, technical and working knowledge, pc data and different info as could also be fairly requested, together with, with out limitation, (a) for the preparation by such different Party of any Tax Returns or (b) in reference to any Tax audit or continuing together with one Party (or an Affiliate thereof) to the extent such Tax audit or continuing pertains to or arises from the transactions contemplated by this Agreement.

 

Section 7.3 Retention of Tax Records. After the Closing Date and for a interval of six (6) years from the Closing Date, the Company shall retain possession of all accounting, enterprise, monetary and Tax data and knowledge that (a) relate to the Company and are in existence on the Closing Date and (b) come into existence after the Closing Date however relate to the Company earlier than the Closing Date, and Buyer shall give the Company Shareholders cheap discover and an affordable alternative to make copies of any such data within the occasion that Buyer determines to destroy or get rid of them throughout such interval with a view to allow the Company Shareholders . to correctly put together for, file, show, reply, prosecute and defend any Tax Return, declare, submitting, Tax audit, Tax protest, swimsuit, continuing or reply. Such entry shall embrace entry to any computerized info programs that comprise knowledge relating to the Company.

 

ARTICLE 8

CONDITIONS PRECEDENT TO PERFORMANCE BY PARTIES

 

Section 8.1 Conditions Precedent to Performance by Selling Parties. The obligation of the Selling Parties to consummate the transactions contemplated by this Agreement is topic to the achievement, at or earlier than the Closing, of the next situations, any a number of of which can be waived by Company, in its sole discretion:

 

(a) Representations and Warranties of Buying Parties. The representations and warranties of Buying Parties made in Section 5.2 of this Agreement, in every case, shall be true and proper in all materials respects as of the Execution Date and as of the Closing Date as if made by Buying Parties once more as of the Closing Date, besides to the extent that such representations and warranties expressly relate to an earlier date, wherein case such representations and warranties shall be true and proper on and as of such earlier date.

 

 

(b) Performance of the Obligations of Buying Parties. Buying Parties shall have carried out in all materials respects all obligations required beneath this Agreement that are to be carried out by it on or earlier than the Closing Date (besides with respect to the duty to pay the Purchase Price in accordance with the phrases of this Agreement and any obligations certified by materiality, which obligations shall be carried out in all respects as required beneath this Agreement).

 

(c) Employment Agreements. Each of the Buying Parties shall have executed and delivered the Employment Agreements.

 

(d) Injunctions. There shall be no keep, injunction or any governmental investigation or proceedings which contests the transaction contemplated by this Agreement.

 

(e) No Litigation. There shall not be pending or threatened in writing by any Governmental Authority any swimsuit, motion or continuing (i) difficult or searching for to restrain, prohibit, alter or materially delay the consummation of any of the transactions contemplated by this Agreement or (ii) searching for to acquire from any Company Party any damages in reference to the transactions contemplated hereby.

 

(f) Required Consents. The Buying Parties shall have obtained the Required Consents.

 

(g) Consideration. The Buying Parties shall have paid the Consideration.

 

Section 8.2 Conditions Precedent to the Performance by Buying Parties. The obligation of Buying Parties to consummate the transactions contemplated by this Agreement is topic to the achievement, at or earlier than the Closing, of the next situations, any a number of of which can be waived by Buying Parties, in its sole discretion:

 

(a) Representations and Warranties of Selling Parties. The representations and warranties of the Company made in Sections 5.1 of this Agreement shall be true and proper in all materials respects as of the Execution Date and as of the Closing Date as if made by the relevant Company once more as of the Closing Date, besides to the extent that such representations and warranties expressly relate to an earlier date, wherein case such representations and warranties shall be true and proper on and as of such earlier date.

 

(b) Performance of the Obligations of Selling Parties. Each of the Selling Parties shall have carried out in all materials respects all obligations required beneath this Agreement to which Selling Parties is occasion to be carried out by Selling Parties on or earlier than the Closing Date (besides with respect to any obligations certified by materiality, which obligations shall be carried out in all respects as required beneath this Agreement).

 

(c) Employment Agreements. Each of Chelsea Cordoba and Kenneth Cordoba shall have executed and delivered the Employment Agreements.

 

(d) Company Financial Statements. Hightimes shall have confirmed with its auditors that the Company Financial Statements are able to being audited in accordance with GAAP.

 

 

(e) No Injunction. No preliminary or everlasting injunction or different order of any court docket or Governmental Authority that declares this Agreement invalid in any materials respect or prevents the consummation of the transactions contemplated hereby shall be in impact.

 

(f) No Litigation. There shall not be pending or threatened in writing by any Governmental Authority any swimsuit, motion or continuing, (i) difficult or searching for to restrain, prohibit, alter or materially delay the consummation of any of the transactions contemplated by this Agreement, (ii) searching for to acquire from Buyer or any of its Affiliates any damages in reference to the transactions contemplated hereby or (iii) searching for to ban Buyer or any of its Affiliates from successfully controlling or working any portion of the Company Assets.

 

(g) Required Consents. The Buying Parties shall have obtained all Required Consents.

 

ARTICLE 9

TERMINATION

 

Section 9.1 Conditions of Termination. This Agreement could also be terminated solely in accordance with this Section 9.1. This Agreement could also be terminated at any time earlier than the Closing as follows:

 

(a) By mutual written consent of Company Shareholders and Hightimes;

 

(b) If the situations precedent in Section 8.1 will not be fulfilled or waived by September 30, 2020 (or such later date agreed by Hightimes and the Company Shareholders) then the Selling Parties could terminate this Agreement by offering written discover to the Buying Parties.

 

(c) If the situations precedent in Section 8.2 will not be fulfilled or waived by September 30, 2020 (or such later date agreed by the Hightimes and the Company Shareholders) then the Buyer or Hightimes could terminate this Agreement by offering written discover to the Company Shareholders.

 

(d) The Buying Parties could terminate this Agreement if there shall happen and be persevering with any materials occasion or threatened occasion shall have occurred previous to the Closing Date which might adversely impair or have an effect on the conventional Business operations of the Company or the power of the Buyer and Hightimes to personal the Company Shares, together with with out limitation; the situation of the Company Assets, the anticipated monetary outcomes of the Business or title to the Company Assets. The Driven Deliveries Litigation shall not represent grounds for termination beneath this Section.

 

(e) By Selling Parties, by written discover to Buying Parties, or by Buying Parties, by written discover to Selling Parties, if any injunction, different order, or proceedings/investigations instituted by any Governmental Authorities that will delay, impair or in any other case hinder the Closing of the transactions contemplated by this settlement, proscribing the transactions contemplated by this Agreement shall have turn out to be efficient; offered, nevertheless that the Party searching for to terminate this Agreement pursuant to this Section 9.1(e) has used its commercially cheap efforts to take away such injunction or different order;

 

 

(f) By Selling Parties, by written discover to Buying Parties if there’s the inaccuracy of any illustration or guarantee contained in Section 5.2 which inaccuracy might fairly be anticipated to end in a fabric failure to carry out any covenant of Buying Parties contained on this Agreement, and Buying Parties have failed, inside 5 (5) Business Days after receipt of such discover, to treatment such inaccuracy or carry out such covenant or present fairly enough assurance to Selling Parties of Buying Parties’ capacity to treatment such inaccuracy or carry out such covenant; offered, that Selling Parties shall not have the proper to terminate this Agreement beneath this Section 9.1(f) if any of the Selling Parties is in materials breach of this Agreement on the time Selling Parties provides such discover;

 

(g) By Buying Parties, by written discover to Selling Parties, if there’s any inaccuracy of any illustration or guarantee of Selling Parties contained in Sections 5.1 which inaccuracy might fairly be anticipated to end in, individually or within the mixture with the outcomes of different inaccuracies, a fabric failure to carry out any covenant of Selling Parties contained on this Agreement, and Selling Parties have failed, inside 5 (5) Business Days after receipt of such discover, to treatment such inaccuracy or carry out such covenant or present fairly enough assurance to Buying Parties of Selling Parties capacity to treatment such inaccuracy or carry out such covenant; offered, that Buyer shall not have the proper to terminate this Agreement beneath this Section 9.1(g) if both of Buying Parties’ is in materials breach of this Agreement on the time it provides such discover; and

 

(h) By Selling Parties, upon written discover to Buying Parties, if Hightimes fails to finish its Initial Planned Stock Market Listing and go public inside twelve (12) months of the Effective Date. Upon a Notice of Termination served on Higtimes, Hightimes, the Company Shareholdersshall Transfer their Two Million Seven Hundred Thousand (2,700,000) shares of Hightimes Common Stock again to Hightimes in alternate for the Company Shares which Hightimes shall Transfer again to the Company Shareholders. In such occasion all the Transactions contemplated by this Agreement shall be rescinded; offered, that within the occasion of Termination beneath this Section, the Company Shareholders shall not be required to return the money consideration beforehand paid to it by Buyer beneath Section 3.1(b), above.

 

Section 9.2 Remedies. Each Party acknowledges that in case of any breach of its covenants or different obligations, the opposite Parties could endure rapid and irreparable hurt. Accordingly, in case of any such breach, the non-breaching Party or Parties shall be entitled to acquire damages or different cures offered at regulation or on this Agreement and/or such different aid in regulation or fairness as could also be granted by any court docket of competent jurisdiction.

 

ARTICLE 10

SURVIVAL AND INDEMNIFICATION

 

Section 10.2 Survival of Selling Parties’ Representations, Warranties and Covenants. The representations and warranties made by Selling Parties and by the Buying Parties set forth on this Agreement will survive the Closing for a interval of twelve (12) months (the “Survival Period”). The covenants and agreements of every of the Selling Parties and the Buying Parties (together with indemnification from Excluded Liabilities together with these arising out of the Driven Deliveries Litigation) shall survive the Closing Date indefinitely.

 

Section 10.2 Indemnification.

 

(a) Selling Parties or Buying Parties or their Affiliates, as relevant (every an “Indemnified Party”) shall not have any declare or proper of restoration for any breach or inaccuracy of a illustration or guarantee by the opposite Party or Parties (every an “Indemnifying Party”), except (i) written discover is given by an Indemnified Party to an Indemnifying Party of the illustration or guarantee pursuant to which the declare is made or proper of restoration is sought setting forth in cheap element the premise for the purported Breach of the illustration or guarantee, the quantity or nature of the declare being made, if then ascertainable, and the final foundation therefor and (ii) such discover is given previous to the expiration of the Survival Period.

 

 

(b) Buying Parties hereby agrees to indemnify, defend and maintain Selling Parties and their respective Representatives (collectively, “Selling Parties Representatives”) innocent from, in opposition to and in respect of:

 

(i) any and all Losses suffered or incurred by any of the Selling Parties or Selling Parties Representatives in respect of, in reference to or arising out of any breach or inaccuracy of a illustration, guarantee or covenant made by any of the Buying Parties (for the avoidance of doubt, together with however not restricted to the covenants in Section 3.1);

 

(ii) any and all Losses suffered or incurred by any of the Selling Parties or Selling Parties Representatives in respect of, in reference to or arising out of any Assumed Liabilities from and after the Closing Date;

 

(iii) any and all Losses suffered or incurred by any of the Selling Parties or Selling Parties Representatives arising from Buyer’s possession or operation of the Company Business from and after the Closing Date;

 

(iv) any and all actions, fits, proceedings, claims, calls for, assessments, judgments, prices and bills, together with authorized charges and bills, incident to any of the foregoing or incurred in investigating or trying to keep away from the identical or to oppose the imposition thereof, or in imposing this indemnity; and

 

(v) any declare by any Person for brokerage or finder’s charges or commissions or comparable funds primarily based upon any settlement or understanding alleged to have been made by such Person with Buying Parties (or any Person appearing on Buying Parties’ behalf) in reference to any of the transactions contemplated by this Agreement.

 

(c) Selling Parties hereby conform to indemnify, defend and maintain the Buying Parties and their respective Representatives (collectively, “Buyer Representatives”) innocent from, in opposition to and in respect of:

 

(i) any and all Losses suffered or incurred by any of the Buying Parties or Buyer Representatives in respect of, in reference to or arising out any breach or inaccuracy of a illustration, guarantee or covenant made by any of the Selling Parties;

 

(ii) any and all Losses suffered or incurred by any of the Buying Parties or Buyer Representatives in respect of, in reference to or arising out of any Excluded Liabilities, together with, with out limitation, any Liabilities, Claims or Losses which may be incurred by the Company, the Buyer or Hightimes arising out of the Driven Deliveries Litigation.

 

Except for any Liabilities, Claims or Losses which may be incurred by the Company, the Buyer or Hightimes arising out of the Driven Deliveries Litigation, the Indemnification obligations of Sellers beneath this Section shall not exceed the quantity of collateral offered by Sellers pursuant to Section 3.4, above.;

 

(iii) any and all Losses suffered or incurred by any of the Buying Parties or Buyer Representatives arising from Selling Parties’ use or operation of the Company, the Business or the Company Assets previous to the Closing Date;

 

 

(iv) any and all actions, fits, proceedings, claims, calls for, assessments, judgments, prices and bills, together with authorized charges and bills, incident to any of the foregoing or incurred in investigating or trying to keep away from the identical or to oppose the imposition thereof, or in imposing this indemnity; and

 

(v) any declare by any Person for brokerage or finder’s charges or commissions or comparable funds primarily based upon any settlement or understanding alleged to have been made by such Person with Selling Parties (or any Person appearing on Selling Parties behalf) in reference to any of the transactions contemplated by this Agreement.

 

Section 10.3 Effect of Investigation. The representations, warranties and covenants of an Indemnifying Party, and the Indemnified Party’s proper to indemnification with respect thereto, shall not be affected or deemed waived by purpose of any investigation made by or on behalf of the Indemnified Party (together with by any of its Representatives) or by purpose of the truth that the Indemnified Party or any of its Representatives knew or ought to have recognized that any such illustration or guarantee is, was or could be inaccurate.

 

Section 10.4 Maximum Recovery by the Parties. The most mixture quantity recoverable by the Buying Parties from all Selling Parties or by the Selling Parties from all Buying Parties for all Claims beneath this Agreement (together with however not restricted to Claims in relation to a breach of a guaranty or illustration given by a celebration in Section 5) is the worth of the Consideration truly paid or delivered by the Buyer and Hightimes to the Selling Parties. The limitation on this Section 10.Four doesn’t apply to the extent a Claim is brought on by the fraud or willful deceit of the defaulting occasion.

 

ARTICLE 11

MISCELLANEOUS

 

Section 11.1 Further Assurances. At the request and the only expense of the requesting occasion, the Buying Parties and the Selling Parties, as relevant, shall execute and ship, or trigger to be executed and delivered, such paperwork as the opposite Parties, or their respective counsel could fairly request to effectuate the needs of this Agreement.

 

Section 11.2 Successors and Assigns. Buyer or Hightimes shall have the proper to assign to any Affiliate or Affiliates (every, an “Assignee”) any of its rights or obligations beneath this Agreement to some other subsidiary of HIghtimes or successor in curiosity to Hightimes.. However, within the occasion of any project pursuant to this Section 11.2, neither the Buyer nor Hightimes shall be relieved of any legal responsibility or obligation hereunder.

 

Section 11.3 Governing Law; Resolution of Disputes. This Agreement, and any disputes arising beneath this Agreement, might be ruled by and construed and enforced in accordance with the Laws (each substantive and procedural) of the State of Nevada, with out giving impact to any battle of legal guidelines precept on the contrary. Any dispute involving the interpretation or utility of this Agreement which can’t be resolved by good religion negotiations among the many Parties shall be resolved by remaining and binding arbitration earlier than a single impartial arbitrator who shall be a retired choose pursuant to the then efficient guidelines of the JAMS Dispute Resolution (“JAMS”). The arbitration shall be held in Los Angeles, California and the ruling of the arbitrator shall be remaining and binding upon all Parties to this Agreement and their Affiliates and could also be enforced in any court docket of competent jurisdiction, together with the state and federal courts seated in Los Angeles California (and any appellate court docket thereof).

 

 

Section 11.Four WAIVER OF JURY TRIAL. Each Party hereby irrevocably and unconditionally (i) waives, to the fullest extent it could legally and successfully achieve this, any objection which it could now or hereafter need to the arbitration procedures set forth in Section 11.3, above, and (ii) waives, to the fullest extent permitted by Law, the protection of an inconvenient discussion board to the decision of disputes earlier than JAMS arbitrator in Los Angeles, California. EACH PARTY HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND IRREVOCABLY WAIVES THE RIGHT TO A TRIAL BY JURY IN RESPECT TO ANY LITIGATION, DISPUTE, CLAIM, LEGAL ACTION OR OTHER LEGAL PROCEEDING BASED HEREIN, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT.

 

Section 11.5 Notices. All notices, requests, calls for, consents and different communications beneath this Agreement shall be in writing and shall be deemed to have been duly given: (i) on the date of service, if served personally on the occasion to whom discover is to be given; (ii) on the day of transmission, if despatched through facsimile transmission to the facsimile quantity given under: (iii) on the day after supply to Federal Express or comparable in a single day courier or the Express Mail service maintained by the United States Postal Service addressed to the occasion to whom discover is to be given; or (iv) on the fifth day after mailing, if mailed to the occasion to whom discover is to be given, by first-class mail, registered or licensed, postage pay as you go and correctly addressed, to the occasion as follows:

 

If to Buying Parties, to: Hightimes Holding Corp.2110 Narcissus Ct.

Venice, California 90291

Attn: Adam E. Levin, Executive Chairman

Tel: (818) 822-8890

Email: adam@hightimes.com

with a duplicate (which is not going to represent discover to Buying Parties) to: Michelman & Robinson, LLP
10880 Wilshire Boulevard, 19th groundLos Angeles, CA 90024
Attn: Stephen A. Weiss, Esq.

(424) 365-6024

Email: sweiss@mrllp.com

If to Company, to:  Mountain High Recreation Inc.8 Light Sky CT

Sacramento, California 95828

Attn: Kenneth Cordoba, CEO/President

Tel:916-718-0742

Email:mountainhighrecreation@gmail.com

with a duplicate (which is not going to represent discover to Company) to:  Hanson Bridgett LLP500 Capitol Mall, Suite 1500
Sacramento, CA 95814

916-442-3333 Phone
916-442-2348 Fax

Jasun Molinelli, Esq.

Email: JMolinelli@hansonbridgett.com

 

Any Party could change its handle, telephone quantity, or e mail handle for the aim of this Section 11.5 by giving the opposite Parties written discover of its new handle within the method set forth above.

 

 

Section 11.6 Counterpart Execution. This Agreement could also be executed in counterparts, every of which shall be deemed an unique and all of which shall represent however one and the identical instrument. Delivery by facsimile or in a PDF transmission of a counterpart of this Agreement as executed by the occasion making the supply shall represent good and legitimate execution and supply of this Agreement for all functions.

 

Section 11.7 Severability. If any phrases or different provision of this Agreement or the schedules hereto shall be decided by a court docket, administrative company or arbitrator to be invalid, unlawful or unenforceable, such invalidity or unenforceability shall not render your entire Agreement invalid. Rather, this Agreement shall be construed as if not containing the actual invalid, unlawful or unenforceable provision, and all different provisions of this Agreement shall however stay in full power and impact as long as the financial or authorized substance of the transactions contemplated hereby isn’t affected in any method materially adversarial to any Party. Upon such willpower that any time period or different provision is invalid, unlawful or unenforceable, the Parties shall negotiate in good religion to change this Agreement in order to have an effect on the unique intent of the Parties as carefully as potential in an appropriate method to the top that the transactions contemplated hereby are fulfilled to the fullest extent permitted beneath relevant Law.

 

Section 11.8 Third Party Beneficiaries. Except with respect to the rights hereunder of any Indemnified Person, not one of the provisions of this Agreement shall be for the advantage of or enforceable by any third occasion, together with any creditor of any Person. No such third occasion shall receive any proper beneath any provision of this Agreement or shall by causes of any such provision make any declare in respect of any Liability (or in any other case) in opposition to any Party hereto.

 

Section 11.9 Amendment and Modification. This Agreement could also be amended, modified or supplemented solely by a written settlement signed by all the Parties hereto.

 

Section 11.10 Counterparts. This Agreement could also be executed in separate counterparts, every of which shall be deemed an unique and all of which, when taken collectively, shall represent one and the identical settlement. A signed copy of this Agreement delivered by facsimile, e-mail or different technique of digital transmission shall be deemed to have the identical authorized impact as supply of an unique signed copy of this Agreement.

 

Section 11.11 Binding Effect; Assignment. This Agreement shall inure to the advantage of and be binding upon the Parties hereto and their respective authorized representatives, successors and permitted assigns. Except as in any other case expressly offered on this Agreement, no Party could assign this Agreement or any rights or obligations hereunder, with out the prior written consent of the opposite Parties, and any such project shall be void; offered, nevertheless, {that a} Party could assign this Agreement to a successor entity together with such Party’s reincorporation in one other jurisdiction or into one other enterprise kind.

 

Section 11.12 Failure or Indulgence Not Waiver; Remedies Cumulative. No failure or delay on the a part of any Party hereto within the train of any proper hereunder shall impair such proper or be construed to be a waiver of, or acquiescence in, any breach of any illustration, guarantee or settlement herein, nor shall any single or partial train of any such proper preclude different or additional train thereof or of some other proper. All rights and cures present beneath this Agreement are cumulative to, and never unique of, any rights or cures in any other case accessible.

 

Section 11.13 Interpretation. The headings contained on this Agreement are for reference functions solely and shall not have an effect on in any means the that means or interpretation of this Agreement. When a reference is made on this Agreement to an Article or a Section, such reference shall be to an Article or Section of this Agreement except in any other case indicated. The phrase “including” shall imply together with with out limitation. Any reference to the singular on this Agreement shall additionally embrace the plural and vice versa. This Agreement shall be construed with out regard to any presumption or rule requiring development or interpretation in opposition to the occasion drafting an instrument or inflicting any instrument to be drafted.

 

[SIGNATURE PAGE FOLLOWS]

 

 

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement, or brought about this Agreement to be executed by their duly approved officers, as of the Execution Date.

 

  HIGHTIMES:
HIGHTIMES HOLDING CORP.
By:
Name: Adam E. Levin,
Title: Executive Chairman

 

  BUYER;
HIGHTIMES MOUNTAIN, LLC
By:
Name: Adam E. Levin
Title: Manager
  COMPANY
MOUNTAIN HIGH RECREATION, INC.
By:
Name: Kenneth Cordoba
Title: President/ CEO

 

COMPANY STOCKHOLDERS:
CHELSEA CORDOBA
KENNETH CORDOBA

 

[Signature Page to Asset Purchase Agreement]

 

 

EXHIBIT A

License

 

[Exhibit A to Asset Purchase Agreement]

 

 

EXHIBIT B

Form of Employment Agreement

 

Kenneth Cordoba
Chelsea Cordoba _____________, 2020

 

Employment Offer Letter

 

On behalf of Hightimes Mountain, LLC, a Delaware restricted legal responsibility firm (the “Buyer”), we’re happy to increase you a proposal of continued employment as [President][Vice-President] of Mountain High Recreation, Inc., a California company (the “Company”) on the phrases and situations of that are set forth under on this letter. Please evaluation and point out your acceptance of those phrases by signing under the place indicated and returning a signed copy of this letter to the Company.

 

Employment Start Date, Your employment will start on date (the “Employment Start Date”) of the closing of the acquisition by the Buyer of 100% of the share capital of the Company from the Company Shareholders pursuant to a inventory buy settlement dated as of June 23, 2020 (the “”Purchase Agreement”).

 

Definitions. Unless in any other case outlined herein, all capitalized phrases when used on this letter settlement shall have the identical that means as they’re outlined within the Purchase Agreement.

 

Term of Employment. The time period of your employment with the Company shall start on the Employment Start Date and, except earlier terminated by both you or the Company, as offered under, shall terminate on a date which shall be two (2) years from the Employment Start Date.

 

Compensation. Your place is classed as Salaried and primarily based on an annual wage of One Hundred Twenty Five Thousand Dollars ($125,000).

 

Job Title and Workplace. Your title might be [President][Vice President] of the Company and you’ll report on to the Board of Managers of the BuyerYou could be primarily based anyplace in Northern California, however you’ll be anticipated to journey to the headquarters as required in your place.

 

Employee Benefits. As a full-time worker, you’ve the chance to take part, in response to the phrases of the respective plans, in all worker advantages. All profit plans are topic to vary and the Company reserves the proper to change, change suppliers, add or remove advantages at any time.

 

Vacation Time, Holidays, and Sick Leave. You might be offered by the Company an annual trip entitlement of 15 days, calculated on a month-to-month foundation;. In addition to this annual trip accrual, Company grants you 7 days of sick depart and customary paid holidays as introduced annually.

 

Stock Options. You shall be eligible to obtain inventory choices (the “Options”) to buy as much as 35,000 shares of the Class A Common Stock of Hightimes Holding Corp., a Delaware company and the father or mother of the Buyer (the “Option Shares”), all in accordance with the phrases and situations set forth within the Company’s present Equity Compensation Plan. The Option Shares and the train value are topic to adjustment by purpose of the Hightimes contemplated 11-for-1 inventory cut up. The train value of the Options shall be primarily based on the larger of (a) the per share value of Hightimes Common Stock provided to the public in reference to its present Regulation A+ Offering, or (b) the closing value of Hightimes Common Stock as traded on the OTCQX Market or different National Securities Exchange on the graduation date of your employment. The Options shall vest over Three years with 16 and a couple of/3% vesting on the workers first bi-annual anniversary after which bi-annually then after over the remaining vesting interval. However, in case you shall be terminated for “Cause” as outlined under, all choices, whether or not or not vested, shall be deemed cancelled.

 

Termination. Notwithstanding the 2 (2) yr time period of your employment, in case you shall resign as an officer of the Company or are terminated for “Cause” (as offered under, your employment shall instantly terminate and any unvested Options awarded to you shall routinely terminate. As used herein, the time period “Cause” shall imply and embrace any of the next:

 

Your conviction of a felony;
Your misappropriation of any enterprise alternative then accessible to the Company;
A cloth breach of your fiduciary obligations to the Company;
Your failure or refusal to offer your full enterprise {and professional} time to the Company; or
Your materials breach of any of your representations, warranties and covenants set forth within the Purchase Agreement/

 

Should the Company terminate this settlement with out trigger, the Company shall pay to Employee the bottom wage owed by the Company for a interval of six (6) consecutive months as a severance fee.

 

Balance of web page deliberately left clean – Signature web page follows-

 

[Exhibit B to Asset Purchase Agreement]

 

 

Please verify your settlement with the foregoing by signing this employment letter within the house offered under.

 

Sincerely,

 

HIGHTIMES MOUNTAIN, LLC
By:
Adam E. Levin, Chief Executive Officer
MOUNTAIN HIGH RECREATION, INC.
By:
Adam E. Levin, Executive Chairman

 

_____________________________

____________ Cordoba

 

Approved as to the Stock Options:

 

HIGHTIMES HOLDING CORP.
By: Adam E. Levin, Executive Chairman

 

[Exhibit B to Asset Purchase Agreement]

 

 

Exhibit C to Asset Purchase Agreement

 

LOCK-UP AGREEMENT

 

THIS AGREEMENT is made as of _______________, 2020

 

BETWEEN:

 

__________________________________, a person (the “Shareholder”)

 

– and –

 

HIGHTIMES HOLDING CORP., a company included beneath the legal guidelines of the State of Delaware (the “Company”).

 

RECITALS:

 

WHEREAS, in reference to an inventory buy settlement, dated as of June 23, 2020 (the “Purchase Agreement”) among the many Company, the Company’s subsidiary, Mountain High Recreation, Inc., a California company (“Mountain High”) and Chelsea Cordoba and Kenneth Cordoba (collectively, the “Company Shareholders”), on the date of this settlement (the “Closing Date”) the Company has issued to the undersigned Shareholder and the opposite shareholder of Mountain High (collectively, the “Mountain High Shareholders”) consideration consisting of two,700,000 shares of the Class A Common Stock, $0.0001 par worth per share of the Company (the “Hightimes Shares”) and money; and

 

WHEREAS, as partial Consideration, the undersigned Shareholder has acquired an mixture of _____________ Hightimes Shares; such ______________ Hightimes Shares issued to the Shareholder are hereinafter generally known as the “Subject Shares”); and

 

WHEREAS, all Company Shareholders, together with the Shareholder, and Mountain High have agreed to have the Subject Shares locked up and restricted on “Transfer” (hereinafter outlined) for a time frame following the “Initial Trading Date” (hereinafter outlined); ;

 

NOW THEREFORE, in consideration of the mutual covenants and agreements set forth on this Agreement and for different good and helpful consideration (the receipt and sufficiency of that are hereby acknowledged) the events hereto agree as follows:

 

1. The Shareholder hereby agrees that she or he is not going to for the relevant “Lock-up Period” (outlined under) , straight or not directly;

 

a. promote, provide, contract or grant any choice or proper to promote, pledge, switch, or in any other case get rid of Subject Shares, whether or not owned of document or beneficially;
b. enter into any swap or some other settlement or any transaction that transfers, in complete or partly, straight or not directly, the financial consequence of possession of Subject Shares, whether or not any such swap or different settlement or transaction is to be settled by supply of Subject Shares, in money or in any other case; or
c. publicly announce an intention to do any of the foregoing (collectively a “Transfer”).

 

[Exhibit C to Asset Purchase Agreement]

 

 

2. For functions of this settlement:

 

Initial Trading Date” means the primary date that Hightimes Shares start buying and selling on the OTCQX Market or different National Securities Market.

 

Lock-up Period” means the interval commencing on the Initial Trading Date and expiring;

 

i. in respect of the 100% of the Subject Shares, any time that’s previous to 180 days following the Initial Trading Date;

 

ii. in respect of the primary 25% of the Subject Shares, the date that’s 180 days following the Initial Trading Date;

 

iii. in respect of the second 25% of the Subject Shares, the date that’s 360 days following the Initial Trading Date;

 

iv. in respect of the third 25% of the Subject Shares, the date that’s 540 days following the Initial Trading Date

 

v. in respect of the stability of the Subject Shares, the date that’s 720 days following the Initial Trading Date.

 

3. Notwithstanding the restrictions on Transfers of Subject Shares described above, the undersigned could undertake any of the next Transfers of Subject Shares throughout the relevant Lock-up Period:

 

a. by means of pledge or safety curiosity, offered that the pledgee or beneficiary of the safety curiosity agrees in writing with Hightimes to be sure by this settlement for the rest of the relevant Lock-up Period;
b. a Transfer to a partner, father or mother, little one or grandchild of, or companies, partnerships, restricted legal responsibility corporations or different entities managed by, the Shareholder or a belief or account (together with RRSP, RESP, RRIF or comparable account) present for the advantage of such individual or entity, as long as such individual or entity agrees in writing with Hightimes to be sure by this settlement for the rest of the relevant Lock-up Period and, within the case of companies, partnerships, restricted legal responsibility corporations or different entities managed by, the Shareholder, as long as such entity stays managed by the Shareholder for the rest of the relevant Lock-up Period;
c. any switch of Subject Shares pursuant to a bona fide third occasion take-over bid, merger, plan of association or different comparable transaction made to all holders of such Subject Shares, involving a change of management of Hightimes, offered that within the occasion that the take-over bid, merger, plan of association or different such transaction isn’t accomplished, the Subject Shares owned by the undersigned shall stay topic to the restrictions contained on this settlement.

 

4. The Shareholder hereby represents and warrants that she or he has full energy and authority to enter into this settlement and that, upon request, it would execute any further paperwork obligatory or fascinating in reference to the enforcement hereof.

 

[Exhibit D to Asset Purchase Agreement]

 

 

5. This settlement is irrevocable and might be binding on the Shareholder and his or her respective successors, assigns, and, if relevant, its heirs and private representatives, offered nevertheless that the undersigned shall not assign this settlement with out the prior written consent of Hightimes.
6. This settlement shall be ruled and construed in accordance with the legal guidelines of the State of California relevant therein. All issues relating hereto shall be submitted to the court docket of applicable jurisdiction within the County of Los Angeles, State of California, for the aim of this settlement and for all associated proceedings.
7. This settlement will terminate on the shut of buying and selling of Hightimes Common Stock on the date that the final Lock-up Period expires.
8. This settlement could also be executed in any variety of counterparts, every of which when delivered, both in unique or facsimile kind, shall be deemed to be an unique and all of which collectively shall represent one and the identical doc.

 

Dated this ___ day of __________ 2020.

 

HIGHTIMES HOLDING CORP.
By:
Name: Adam E. Levin
Title: Executive Chairman

 

 

[Exhibit D to Asset Purchase Agreement]

 

 

 

Exhibit 15.1

 

High Times Enters into Agreement to Acquire California Cannabis

Delivery Service Mountain High

 

Cannabis’s Title Brand Will Be Able to Deliver Products within the World’s Premiere Market

 

Los Angeles – June 30, 2020 — Hightimes Holding Corp., proprietor of High Times®, essentially the most well-known model in hashish, has introduced that it has entered into an settlement to accumulate Mountain High Recreation, Inc., a California-based hashish supply service. The primarily inventory primarily based transaction will convey hashish distribution infrastructure and personnel to the High Times® model forward of the rebranding of the primary High Times retail retailer.

 

The closing of the deal will present Hightimes with distribution depots servicing the Northern and Southern California markets, and a platform for launching its personal merchandise.

 

“This year our team is expanding to include two important sets of consumer experts – successful local cannabis operators who possess a level of customer intimacy you won’t find in large multi store operations, paired with accomplished retail professionals who have led and built some of the most successful multi-billion dollar brands in retail, Peter Horvath, Hightimes Holding Corp.’s Chief Executive Officer said.

 

Chelsea and Ken Cordoba and their Mountain High Team bring years of experience providing high quality cannabis delivery to California and they truly know their customers and how best to please them. Together we are launching High Times delivery in California where we will bring the best assortment of quality cannabis products to your doorstep safe, and fast, with exceptional value.

 

While we have been planning this for quite some time now, the recent impacts from the pandemic have accentuated the need for a high quality cannabis delivery solution for California consumers. We are excited for consumers to experience our take on this.”

 

“Delivery has always been part of our plan for how you will shop our stores. Customers are agnostic about where they complete the transaction,” Hightimes Holding Corp.’s President, Paul Henderson, stated. “We’re in the process of transferring ownership of 5 operating stores and 7 new stores across the California market, and we wouldn’t think of servicing that audience without a superb delivery solution in the equation.”

 

The closing is scheduled to happen previous to September 30, 2020 with the beginning of High Times branded operations to comply with shortly thereafter.

 

About High Times:

 

For greater than 45 years, High Times has been the world’s most well-known hashish model – championing the approach to life and educating the plenty on the advantages of this pure flower. From humble beginnings as a counterculture way of life publication, High Times has advanced into internet hosting industry-leading occasions just like the Cannabis Cup and the High Times Business Summit, whereas offering digital TV and social networks, globally distributed merchandise, worldwide licensing offers and offering content material for its thousands and thousands of followers and supporters throughout the globe. In the world of Cannabis, High Times is the arbiter of high quality. For extra info on High Times go to http://www.hightimes.com.

Forward Looking Statements

This press launch could comprise details about Hightimes Holding Corp.’s view of its future expectations, plans and prospects that represent forward-looking statements. Actual outcomes could differ materially from historic outcomes or these indicated by these forward-looking statements because of quite a lot of components together with, however not restricted to, dangers and uncertainties related to its capacity to take care of and develop its enterprise, variability of working outcomes, its improvement and introduction of latest services, advertising and marketing and different enterprise improvement initiatives, amongst different issues. For additional details about Hightimes, Hightimes encourages you to evaluation its filings with the Securities and Exchange Commission, together with its Form 1-A Offering Circular dated July 27, 2018, its Offering Circular complement dated May 31, 2019, and all subsequent filings, together with its Current Reports on Form 1-U, dated February 20, 2020.

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