Common use of Title to Shares; Capitalization Clause in Contracts

Title to Shares; Capitalization. (i) Each Seller has good, legal and valid title to their portion of the Sellers Equity, is the beneficial owner of their portion of the Sellers Equity, and has the full right to transfer their portion of the Sellers Equity. The Sellers Equity is owned by the Sellers free and clear of any lien, pledge, security interest, charge, hypothecation, security agreement, security arrangement or encumbrance or other adverse claim against title of any kind (collectively, “Liens”) and the sale of the Sellers Equity will not result in the creation of any Lien. No Seller has previously sold, conveyed, transferred, assigned, participated, pledged or otherwise encumbered any of the Sellers Equity in whole or in part. Upon delivery of the Sellers Equity to Buyer on the Closing Date, against payment therefor as contemplated hereby, each Seller will transfer to Buyer good, legal and valid title to their portion of the Sellers Equity free and clear of any and all Liens. The Seller Held Debt (as defined below) represents all indebtedness held by any Seller in the Company and each subsidiary of the Company or any other Person in which the Company holds any type of ownership or equity interests (each, a “Company Subsidiary” and the Company Subsidiaries together with the Company, the “Company Parties”) and the amount of the Seller Held Debt is the Cultivation Purchase Price. (ii) The number of Shares, Warrants and the warrant shares represented by such Warrants held by each Seller are as set forth in Schedule 2(c)(ii)(1) attached hereto. The Sellers Equity constitutes the entirety of any equity interests the Sellers, and any affiliates of any Seller, have in the Company. The allocation of the Purchase Price as amongst the Sellers is agreed to and, at each time any amount of the Purchase Price is paid or issued, it shall be agreed to by each Seller, and, for any Seller which is not a natural person, by the Persons holding any equity interest in such Seller. The fully diluted capitalization of the Company is as set forth on Schedule 2(c)(ii)(2).

Title to Shares; Capitalization. (ia) Each The Seller is the lawful record and beneficial owner of the Shares and has good, legal valid and valid marketable title to their portion of the Sellers Equity, is the beneficial owner of their portion of the Sellers Equity, and has the full right to transfer their portion of the Sellers Equity. The Sellers Equity is owned by the Sellers Shares free and clear of any lienLiens (other than restrictions that may be imposed by applicable securities Legal Requirements). There are no Contracts that could require the Seller to sell, pledge, security interest, charge, hypothecation, security agreement, security arrangement or encumbrance or other adverse claim against title of any kind (collectively, “Liens”) and the sale of the Sellers Equity will not result in the creation of any Lien. No Seller has previously sold, conveyed, transferred, assigned, participated, pledged transfer or otherwise encumbered dispose of any of the Sellers Equity in whole Shares. The Seller has the exclusive right, power and authority to sell the Shares, and the Seller is not a party to nor bound by, and the Shares are not subject to, any Contract affecting or in partrelating to the Shares. Upon delivery to the Purchaser at the Closing of certificates representing the Shares, duly endorsed by the Seller for transfer, and upon the Seller’s receipt of the Sellers Equity to Buyer on the Closing DateSeller Amount, against payment therefor as contemplated hereby, each Seller will transfer to Buyer good, legal good and valid title to their portion the Shares will pass to the Purchaser, and the Purchaser will be the direct and sole owner, beneficially and of record of 100% of the Sellers Equity Shares, free and clear of any Liens (other than restrictions that may be imposed by applicable securities Legal Requirements). (b) The Company has (i) 15,000 shares of common stock, with par value of $0.001 per share, authorized, one (1) of which is issued and all Liensoutstanding and held by the Seller, and (ii) 5,000 shares of preferred stock, with par value of $0.001 per share, authorized, 3,899 of which are issued and outstanding (the “Preferred Shares”) and held by Seller. The Seller Held Debt Shares have been duly authorized and validly issued, and are fully paid and non-assessable, have been issued in compliance with all Legal Requirements and the Organizational Documents of the Company and none of such Shares have been issued in violation of any preemptive rights. The Company has not granted any outstanding options, warrants, rights or other securities convertible into, or exchangeable or exercisable for, its Shares, and there are no (as defined belowi) represents all Contracts which obligate the Company to purchase, redeem or otherwise acquire any of its outstanding Shares; (ii) share appreciation rights, phantom equity or similar plans with respect to the Company; or (iii) voting trusts, proxies, or similar Contracts to which the Company is a party with respect to the Equity Interests of the Company. No bonds, debentures, notes or other instruments or evidence of indebtedness held by having the right to vote (or convertible into, or exercisable or exchangeable for, securities having the right to vote) on any Seller matters on which the Company’s holders of Shares may vote are issued or outstanding. There are no preemptive or similar rights to purchase or otherwise acquire any Equity Interests in the Company and each subsidiary of from the Company or any and, other Person in which than as contemplated hereby, the Company holds any type of ownership or equity interests (each, a “Company Subsidiary” and the Company Subsidiaries together with the Company, the “Company Parties”) and the amount of the Seller Held Debt is the Cultivation Purchase Price. (ii) The number of Shares, Warrants and the warrant shares represented by such Warrants held by each Seller are as set forth in Schedule 2(c)(ii)(1) attached hereto. The Sellers Equity constitutes the entirety of any equity interests the Sellers, and any affiliates of any Seller, have in the Company. The allocation of the Purchase Price as amongst the Sellers is agreed to and, at each time any amount of the Purchase Price is paid or issued, it shall be agreed to by each Seller, and, for any Seller which is not a natural person, by party to any Contract with respect to the Persons holding sale or voting of any equity interest in such Seller. The fully diluted capitalization of the Company is as set forth on Schedule 2(c)(ii)(2its Equity Interests (whether outstanding or issuable upon conversion or exercise of outstanding securities).

Title to Shares; Capitalization. (ia) Each Seller is the lawful record and beneficial owners of the Shares set forth opposite such Seller’s name on Section 6.2(a) of the Disclosure Memorandum and has good, legal valid, and valid marketable title to their portion of the Sellers Equity, is the beneficial owner of their portion of the Sellers Equity, and has the full right to transfer their portion of the Sellers Equity. The Sellers Equity is owned by the Sellers such Shares free and clear of any lienLiens (other than restrictions that may be imposed by applicable securities Legal Requirements). There are no Contracts that could require any Seller to sell, pledgetransfer, security interest, charge, hypothecation, security agreement, security arrangement or encumbrance or other adverse claim against title of any kind (collectively, “Liens”) and the sale of the Sellers Equity will not result in the creation of any Lien. No Seller has previously sold, conveyed, transferred, assigned, participated, pledged or otherwise encumbered dispose of any of the Sellers Equity in whole Shares held by such Seller. Each Seller has the exclusive right, power, and authority to sell the Shares held by such Seller, and each Seller is not a party to nor bound by, and such Seller’s Shares are not subject to, any Contract affecting or in partrelating to such Shares. Upon delivery to the Purchaser at the Closing of certificates representing the Shares held by each Seller, duly endorsed by such Seller for transfer, and upon each Seller’s receipt of its respective portion of the Sellers Equity to Buyer on the Closing DatePurchase Price, against payment therefor as contemplated hereby, each Seller will transfer to Buyer good, legal good and valid title to their portion the Shares will pass to the Purchaser, and the Purchaser will be the direct and sole owner, beneficially and of record of one hundred percent (100%) of the Sellers Equity Shares, free and clear of any Liens (other than restrictions that may be imposed by applicable securities Legal Requirements). (b) The Company has 200,000 shares of Class A Common Stock, $0.01 par value per share, authorized, 100,000 of which are issued and all Liensoutstanding and held by the Sellers in the amounts set forth on Section 6.2(a) of the Disclosure Memorandum, and 1,800,000 shares of Class B Common Stock, $0.01 par value per share, authorized, 900,000 of which are issued and outstanding and held by the Sellers in the amounts set forth on Section 6.2(a) of the Disclosure Memorandum. The Seller Held Debt Shares have been duly authorized and validly issued, and are fully paid and non-assessable, have been issued in compliance with all Legal Requirements and the Organizational Documents of the Company and none of such Shares have been issued in violation of any preemptive rights. No bonds, debentures, notes, or other instruments or evidence of indebtedness having the right to vote (as defined belowor convertible into, or exercisable or exchangeable for, securities having the right to vote) represents all indebtedness held by on any Seller matters on which the Company’s holders of Shares may vote are issued or outstanding. There are no preemptive or similar rights to purchase or otherwise acquire any Equity Interests in the Company from the Company and, other than as contemplated hereby, the Company is not a party to any Contract with respect to the sale or voting of any of its Equity Interests (whether outstanding or issuable upon conversion or exercise of outstanding securities). (c) The Company Stock Plan is the only equity-based plan or program providing for equity compensation of any Person in respect of the Equity Interests of the Company, and except for the Company Stock Plan, the Company does not maintain any stock option plan or other plan, agreement or arrangement providing for equity compensation of any Person. The Company has reserved an aggregate of 175,000 shares of Class B Common Stock for issuance pursuant to the Company Stock Plan (including shares subject to outstanding Company Options). A total of 22,500 shares of Class B Common Stock are subject to outstanding Company Options, of which zero (0) are In-the-money Company Options, and of which 22,500 are not In-the-money Company Options (all of which are vested and exercisable). All Company Options shall terminate upon the Closing for no consideration, and neither the Company nor Purchaser nor any of their respective Affiliates shall have any liability or obligation relating to such Company Options on and after the Closing Date. The Company has not issued any awards under the Company Stock Plan other than Company Options. Section 6.2(c) of the Disclosure Memorandum sets forth for each subsidiary Company Option: (i) the name of the holder thereof, (ii) the exercise price per share, (iii) the number of shares of Company Common Stock subject to such Company Option, (iv) the date of grant and vesting schedule (if applicable), (v) the extent such Company Option is vested, (vi) whether such Company Option is an incentive stock option or non-statutory stock option under the Code, and (vii) whether the vesting of such Company Option is to be accelerated in any manner by any of the transactions contemplated by this Agreement or upon any other event or condition and the extent of acceleration, if any (assuming for these purposes that the holder thereof does not waive any rights to acceleration). Complete and correct copies of the Company Stock Plan, the standard agreements under the Company Stock Plan and each agreement for currently outstanding awards under the Company Stock Plan that does not conform to the standard agreements under the Company Stock Plan have been made available to the Purchaser, and there are no agreements, understandings or commitments to amend, modify or supplement the Company Stock Plan or any other Person in which the Company holds any type of ownership or equity interests (each, a “Company Subsidiary” and the Company Subsidiaries together with the Company, the “Company Parties”) and the amount of the Seller Held Debt is the Cultivation Purchase Price. (ii) The number of Shares, Warrants and the warrant shares represented by such Warrants held by each Seller are as set forth in Schedule 2(c)(ii)(1) attached heretoagreements. The Sellers Equity constitutes the entirety of any equity interests the Sellers, and any affiliates of any Seller, have in the Company. The allocation of the Purchase Price as amongst the Sellers is agreed to and, at each time any amount of the Purchase Price is paid or issued, it shall be agreed to by each Seller, and, for any Seller which is not a natural person, by the Persons holding any equity interest in such Seller. The fully diluted capitalization of the Company is Except as set forth on Schedule 2(c)(ii)(2)Section 6.2(c) of the Disclosure Memorandum, no Company Options are subject to any right of rescission, right of first refusal or preemptive right and all Company Options have been issued under the Company Stock Plan in compliance in all material respects with Law and the requirements set forth in applicable Contracts. All Company Options and shares of Class B Common Stock issued upon exercise thereof have been granted and issued, and all exercises of Company Options have been made, in accordance with the terms of the Company Stock Plan and in compliance in all material respects with applicable Law and the applicable Contracts. No Company Option has been granted with an exercise price less than the fair market value of a share of Company Common Stock on the date on which the grant of such Company Option was by its terms to be effective.