Form 6-K ParcelPal Logistics Inc. For: Sep 17

September 17, 2021 6:04 AM EDT

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


FORM 6-K



Report of Foreign Private Issuer Pursuant to Rule 13a-16 or 15d-16
Under the Securities Exchange Act of 1934

Dated: September 17, 2021

Commission File No.: 000-56191


PARCELPAL LOGISTICS INC.
(Name of Registrant)



#620 - 1111 Melville Street, Vancouver, BC V6E 3V6, Canada
(Address of Principal Executive Office)



Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.    Form 20-F  ☒    Form 40-F  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):    Yes    ☐    No  ☒

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):    Yes    ☐    No  ☒



EXHIBITS
 
The following information is furnished to the Securities and Exchange Commission as part of this report on Form 6-K:
 
Exhibit No.
Document
Press Release dated September 1, 2021 announcing signing of definitive agreements for first U.S. acquisition
Press Release dated September 9, 2021 announcing expanded services with large meal kit delivery company
Press Release dated September 16, 2021 announcing Closing of U.S. acquisition and related financing transaction
Substantially final form of Stock Purchase Agreement, dated August 31, 2021
Substantially final form of Exclusive Services Agreement, dated August 31, 2021
Form of Convertible Note Agreement between ParcelPal Logistics Inc. and Tangiers Global LLC, dated September 15, 2021


SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
PARCELPAL LOGISTICS INC.
Date: September 17, 2021
By:
/s/ RICH WHEELESS
   
Name:
Rich Wheeless
   
Title:
Chief Executive Officer
 



Exhibit 99.1


ParcelPal Announces Signing of Definitive Agreements for its First United States Acquisition

Vancouver, British Columbia – September 1, 2021 – ParcelPal Logistics Inc. (the “Company” or “ParcelPal”), (OTC: PTNYF) (CSE: PKG) (FSE:PT0) is pleased to announce that, subsequent to the previously announced letter of intent on July 14, the parties related to the Company’s acquisition of its first United States delivery service company (“Acquiree”) have signed the definitive agreements related thereto and anticipate closing within a week.  This transaction effectively nearly doubles both the Company’s annual revenue and size of ParcelPal, which is additionally significant since it marks the first such acquisition in the history of the Company.

The total purchase price (the “Purchase Price”) was $3.1 million USD, consisting of 60% cash and 40% in restricted shares of ParcelPal’s common stock.  ParcelPal and Acquiree also entered into an exclusive services agreement with its principal business source (which also contain non-interference and non-competition clauses to further enhance the likelihood of the short and long term success of the acquired business).

The cash portion of the purchase price has been secured via a private placement financing, and will be paid in three tranches beginning with the closing date.

Rich Wheeless, CEO of ParcelPal Logistics stated: “This is an exciting day and the largest milestone to date for the Company.  Since the day I joined ParcelPal, I have been working hard to increase margins, increase efficiency and to search for and execute upon expansion opportunities as they arise, including into the United States, which is the world’s largest consumer market.  I believe that this acquisition is an excellent first step to gaining a foothold in the United States.  This acquisition is equally exciting insofar as this instantly nearly doubles the size of the Company and its revenues (when factoring currency conversion rates), and allows us to benefit from existing synergies with our acquisition partner.  Finally, I will continue to actively assess additional acquisitions and continue our client diversification, while simultaneously exploring other synergistic opportunities outside of purely last mile delivery – all in an effort to continue to diversify our business and provide increased shareholder value.  I am beyond thrilled to be working with the Acquiree’s team and am pleased that they share the vision for the strategic direction of ParcelPal.”



Upon closing this week, Acquiree will become a subsidiary of ParcelPal Logistics Inc., but will continue to operate under its existing name with little to no interruption to ensure the quality and continuity of service that it has delivered to date.

The Company looks forward to providing a further material update in the coming days.

About ParcelPal Logistics Inc.

ParcelPal is a Vancouver, British Columbia based company that specializes in last-mile delivery service and logistics solutions.  We are a customer-driven, courier and logistics company connecting people and businesses through our network of couriers in cities including Vancouver, Calgary, Toronto and soon in other major cities in Canada and the United States.  Some of our verticals include pharmacy & health, meal kit deliveries, retail, groceries and more.

ParcelPal Website: www.parcelpal.com

Neither the Canadian Securities Exchange (“CSE”), the Securities and Exchange Commission nor any other securities regulatory authority have reviewed and none accepts responsibility for the adequacy or accuracy of this news release that has been prepared by management.

OTC – Symbol: PTNYF
CSE – Symbol: PKG
FSE – Symbol: PT0

Contact: re: Investor Inquiries - info@parcelpal.com

Forward Looking Information

This news release contains forward looking statements relating to the Proposed Transaction, and the future potential of ParcelPal.  Forward looking statements are often identified by terms such as "will", "may", "should", “intends”, "anticipates", "expects", “plans” and similar expressions.  All statements other than statements of historical fact, included in this release are forward looking statements that involve risks and uncertainties.  These risks and uncertainties include, without limitation, the risk that the Proposed Transaction will not be completed or on time due to, among other things, failure to agree to the terms set forth in the definitive documentation, withdrawal at any time by the target company, failure to receive, be satisfied with or complete delivery of satisfactory due diligence documents and information, failure to receive the approval of the CSE, if and as needed, and the risk that ParcelPal will not be successful due to, among other things, general risks relating to the logistics industry, failure of ParcelPal to gain market acceptance of the transaction, and potential challenges related to expansion into a new country, or with the intellectual property utilized in ParcelPal and its acquisition target(s).  There can be no assurance that any forward looking statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements.
 


The Company cannot guarantee that any forward looking statement will materialize and the reader is cautioned not to place undue reliance on any forward looking information.  The risk of the discontinuation of business by third party customers of the acquired business(es) cannot be guaranteed, and is a business risk that is, in large measure,  out of the control of the Company.  Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated.  Forward looking statements contained in this news release are expressly qualified by this cautionary statement.  The forward looking statements contained in this news release are made as of the date of this news release and the Company will only update or revise publicly any of the included forward looking statements as expressly required by Canadian or United States securities laws.
 



Exhibit 99.2


ParcelPal Announces Expanded Services with Large Meal Kit Delivery Company

Vancouver, British Columbia – September 9, 2021 – ParcelPal Logistics Inc. (the “Company” or “ParcelPal”), (OTC: PTNYF) (CSE: PKG) (FSE:PT0) is pleased to announce that as part of the Company’s broader plan to continue to diversify its customer base and execute on additional profitable business engagements, it has expanded its services with an existing large meal kit delivery company, for which we already provide same-day delivery courier services in Vancouver and Calgary.

Under the expanded service offering, ParcelPal will be using electric refrigerated cargo vans to deliver meal kits from our client's facility to their end customers.  As this scales, we intend to expand this service to include white glove same-day grocery delivery, placing an even greater emphasis on the customer experience.  CEO Rich Wheeless stated, “We pride ourselves on the customer experience, so to be able to expand with one of our larger customers in the meal kit delivery space gives us an additional opportunity to showcase one of our competitive advantages.  While we continue to sign additional new customers and expand with our existing customers in Canada, we will also focus heavily on our expansion and subsequent growth in the United States as additional new customer and acquisition opportunities arise, all in an effort to create additional value for our shareholders.”

The Company looks forward to providing additional material updates as they occur.

About ParcelPal Logistics Inc.

ParcelPal is a Vancouver, British Columbia based company that specializes in last-mile delivery service and logistics solutions.  We are a customer-driven, courier and logistics company connecting people and businesses through our network of couriers in cities including Vancouver, Calgary, Toronto and soon in other major cities Canada-wide.  Some of our verticals include pharmacy & health, meal kit deliveries, retail, groceries and more.

ParcelPal Website: www.parcelpal.com

Neither the Canadian Securities Exchange (“CSE”), the Securities and Exchange Commission nor any other securities regulatory authority has reviewed and do not accept responsibility for the adequacy or accuracy of this news release that has been prepared by management.



OTC – Symbol: PTNYF
CSE – Symbol: PKG
FSE – Symbol: PT0

Contact: re: Investor Inquiries - info@parcelpal.com

Forward Looking Information

This news release contains forward looking statements relating to the Proposed Transaction, and the future potential of ParcelPal.  Forward looking statements are often identified by terms such as "will", "may", "should", “intends”, "anticipates", "expects", “plans” and similar expressions.  All statements other than statements of historical fact, included in this release are forward looking statements that involve risks and uncertainties.  These risks and uncertainties include, without limitation, the risk that the Proposed Transaction will not be completed due to, among other things, failure to execute definitive documentation, failure to complete satisfactory due diligence, failure to receive the approval of the CSE and the risk that ParcelPal will not be successful due to, among other things, general risks relating to the mobile application industry, failure of ParcelPal to gain market acceptance and potential challenges to the intellectual property utilized in ParcelPal.  There can be no assurance that any forward looking statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements.
 
The Company cannot guarantee that any forward looking statement will materialize and the reader is cautioned not to place undue reliance on any forward looking information.  Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated.  Forward looking statements contained in this news release are expressly qualified by this cautionary statement.  The forward looking statements contained in this news release are made as of the date of this news release and the Company will only update or revise publicly any of the included forward looking statements as expressly required by Canadian securities laws.
 



Exhibit 99.3
 

ParcelPal Announces Official Close of US Acquisition and Related Financing

Vancouver, British Columbia – September 16, 2021 – ParcelPal Logistics Inc. (the “Company” or “ParcelPal”), (OTC: PTNYF) (CSE: PKG) (FSE:PT0) is pleased to announce that the parties related to the Company’s acquisition of its first United States delivery service company (“Acquiree”) have officially closed the transaction.  This transaction effectively nearly doubles both the Company’s annual revenue and overall size, which is additionally significant since it marks the first such acquisition in the history of the Company.

The total purchase price (the “Purchase Price”) was $3.1 million USD, consisting of 60% cash and 40% in restricted shares of ParcelPal’s common stock.  ParcelPal and Acquiree also entered into an exclusive services agreement with its principal business source (which also contain non-interference and non-competition clauses to further enhance the likelihood of the short and long term success of the acquired business).

The cash portion of the purchase price was secured via a private placement financing, and will be paid in up to four tranches beginning with the closing date. The shares issued pursuant to the acquisition are subject to a statutory hold period expiring on the date that is four months and one day after the closing date (under Canadian securities law, and six months and one day under U.S. securities law, as applicable).

CEO Rich Wheeless commented: “This acquisition marks an exciting time for the Company as entering the United States has always been viewed as a logical entry into the world’s largest consumer marketplace and integral to ParcelPal’s significant future growth.  I am buoyed by the fact that we continue to onboard new clients and continue to diversify our customer base.  The acquisition financing provides not only the capital for the acquisition, but also gives us additional capital for undertaking additional steps in the Company’s growth plan and which bolsters our balance sheet in the near term.”

Rich continued: “Importantly, the terms of this financing are similar in numerous respects to our existing $5M USD equity line of credit which we have in place.  Having these capital options while we continuously look at synergistic operational expansion and/or additional acquisition targets is vitally important.  Lastly, I am also pleased with the recent improved operating performance and looking forward to working hard to continuing this trend.”



As a part of the acquisition the Company completed a non-brokered private placement (the “Offering”) pursuant to which it issued an unsecured multi-tranche convertible note with a face value of up to US$2,300,000 to an arm's length investor (the “Note”).

The terms of the Note include the following:
 

The net sum of US$700,000 (the “Consideration”) was advanced to the Company on closing, and $640,000 and $520,000 will be funded to the Company at 45 and 90 days following closing, respectively ;
 

Each of the first three funded tranches will carry a 5% Original Issue Discount (or “OID”) along with the issuance of 500,000 restricted commitment shares of common stock;
 

The fourth tranche in the amount of $325,000 will be funded by the noteholder upon mutual agreement by the Company and investor at one hundred and twenty (120) days, together with the prorated 5% OID;
 

The Note bears interest at a one-time guaranteed rate of 5% on the principal sum of each funded tranche, and has a Maturity Date of six months from the effective date of the funding of each tranche (the “Maturity Date”);
 

The principal amount of the Notes may be converted into common shares of the Company prior to the Maturity Date, at the option of the Noteholder, at a fixed conversion price of US$0.09 / CN$0.11 per share (“Fixed Conversion Price”); following the Maturity Date, If the Note has not been repaid or fully converted, then the remaining outstanding principal amount may be converted into common shares at a price equal to the lower of (a) US$0.09 per share or (b) 83% of the two lowest volume weighted average prices of the Company’s common shares during the 10 consecutive trading days prior to the date on which Noteholder elects to convert all or part of the Note; provided, however, that any such discount to the Fixed Conversion Price is subject to compliance with applicable Canadian securities laws and the policies and rules of the Canadian Securities Exchange or such other stock exchange on which the securities of the Company are principally traded;
 

The net proceeds from this financing are currently intended to be used for the purchase price of the acquisition, and for such other general corporate purposes;
 

The Principal Sum due to Noteholder is prorated based on the Consideration, plus the 5% OID. The Company may prepay any outstanding portion of the Note in cash prior to the Maturity Date; and




Subject to certain delineated exemptions, the Company granted a right of first refusal to the noteholder during the term of the Note to invest, at similar or better terms to the Company, in an amount equal to or greater than any future capital or equity or debt financing by the Company; and
 
The Company did not pay any finder’s fees or issue any warrants in connection with the Offering.
 
The Note and any Shares issued upon conversion of the Note are subject to a statutory hold period expiring on the date that is four months and one day after the closing of the Offering (under Canadian securities law, and six months and one day under U.S. securities law, as applicable).

The Company looks forward to providing additional material updates as they occur.

About ParcelPal Logistics Inc.

ParcelPal is a Vancouver, British Columbia based company that specializes in last-mile delivery service and logistics solutions.  We are a customer-driven, courier and logistics company connecting people and businesses through our network of couriers in cities including Vancouver, Calgary, Toronto and soon in other major cities Canada-wide.  Some of our verticals include pharmacy & health, meal kit deliveries, retail, groceries and more.

ParcelPal Website: www.parcelpal.com

Neither the Canadian Securities Exchange (“CSE”), the Securities and Exchange Commission nor any other securities regulatory authority has reviewed and do not accept responsibility for the adequacy or accuracy of this news release that has been prepared by management.

OTC – Symbol: PTNYF
CSE – Symbol: PKG
FSE – Symbol: PT0

Contact: re: Investor Inquiries - info@parcelpal.com



Forward Looking Information

This news release contains forward looking statements relating to the future potential of ParcelPal.  Forward looking statements are often identified by terms such as "will", "may", "should", “intends”, "anticipates", "expects", “plans” and similar expressions.  All statements other than statements of historical fact, included in this release are forward looking statements that involve risks and uncertainties.  These risks and uncertainties include, without limitation, the risk that the Proposed Transaction will not be completed due to, among other things, failure to execute definitive documentation, failure to complete satisfactory due diligence, failure to receive the approval of the CSE and the risk that ParcelPal will not be successful due to, among other things, general risks relating to the mobile application industry, failure of ParcelPal to gain market acceptance and potential challenges to the intellectual property utilized in ParcelPal.  There can be no assurance that any forward looking statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements.
 
The Company cannot guarantee that any forward looking statement will materialize and the reader is cautioned not to place undue reliance on any forward looking information.  Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated.  Forward looking statements contained in this news release are expressly qualified by this cautionary statement.  The forward looking statements contained in this news release are made as of the date of this news release and the Company will only update or revise publicly any of the included forward looking statements as expressly required by Canadian securities laws.
 



Exhibit 99.4

Certain identified information has been excluded from the exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed, and are identified by []; or acted as a placeholder pending final iteration of the document
 
STOCK PURCHASE AGREEMENT
 
among
 
[THE SELLERS]
 
(as the “Sellers”)
 
and
 
ParcelPal Logistics Inc.
 
(as the “Buyer”)

dated as of
 
August 31, 2021
 

TABLE OF CONTENTS
 
ARTICLE I PURCHASE AND SALE
1
   
 
Section 1.01 Purchase and Sale.
1
     
 
Section 1.02 Purchase Price.
1
     
ARTICLE II CLOSING
2
   
 
Section 2.01 Closing.
2
     
 
Section 2.02 Sellers Closing Deliverables.
2
     
 
Section 2.03 Buyer’s Deliveries.
3
     
 
Section 2.04 Conditions to the Obligations of all Parties.
3
     
 
Section 2.05 Conditions to the Obligations of Buyer.
4
     
 
Section 2.06 Conditions to the Obligations of the Sellers.
4
     
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLERS
5
   
 
Section 3.01 Authority of the Sellers.
5
     
 
Section 3.02 No Conflicts; Consents.
5
     
 
Section 3.03 Legal Proceedings.
6
     
 
Section 3.04 Ownership of Shares.
6
     
 
Section 3.05 Brokers.
6
     
 
Section 3.06 Non-Foreign Status.
6
     
 
Section 3.07 No Resale or Distribution.
6
     
 
Section 3.08 Seller Status.
7
     
 
Section 3.09 No General Solicitation.
7
     
 
Section 3.10 Sophisticated Investor.
7
     
 
Section 3.11 Access to Information.
7
     
 
Section 3.12 No Governmental Review.
7
     
 
Section 3.13 Reliance on Exemptions.
7
     
 
Section 3.14 Prohibited Transactions; Confidentiality.
8
     
 
Section 3.15 Restricted Securities.
8
     
 
Section 3.16 Legends.
8
     
 
Section 3.17 No Legal, Tax or Investment Advice.
8

ii

ARTICLE IV REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY
8
   
 
Section 4.01 Organization, Authority, and Qualification of the Company.
8
     
 
Section 4.02 Capitalization.
9
     
 
Section 4.03 No Subsidiaries.
9
     
 
Section 4.04 No Conflicts or Consents.
9
     
 
Section 4.05 Financial Statements.
10
     
 
Section 4.06 Undisclosed Liabilities.
10
     
 
Section 4.07 Absence of Certain Changes, Events, and Conditions.
10
     
 
Section 4.08 Material Contracts.
10
     
 
Section 4.09 Real Property; Title to Assets.
11
     
 
Section 4.10 Intellectual Property.
12
     
 
Section 4.11 Material Customers and Suppliers.
12
     
 
Section 4.12 Insurance.
13
     
 
Section 4.13 Legal Proceedings; Governmental Orders.
13
     
 
Section 4.14 Compliance with Laws; Permits.
13
     
 
Section 4.15 Environmental Matters.
14
     
 
Section 4.16 Employee Benefit Matters.
15
     
 
Section 4.17 Employment Matters.
16
     
 
Section 4.18 Taxes.
17
     
 
Section 4.19 Books and Records.
17
     
 
Section 4.20 Brokers.
18
     
 
Section 4.21 Data Protection
18
     
 
Section 4.22 Accounts Payable.
18
     
 
Section 4.23 Related Party Transactions.
18
     
 
Section 4.24 Full Disclosure.
18
     
ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER
18
   
 
Section 5.01 Organization and Authority of Buyer.
19
     
 
Section 5.02 No Conflicts; Consents.
19
     
 
Section 5.03 Investment Purpose.
19
     
 
Section 5.04 Securities Filings.
19

iii

 
Section 5.05 Buyer Stock Consideration.
20
     
 
Section 5.06 Brokers.
20
     
 
Section 5.07 Absence of Certain Changes, Events and Conditions.
20
     
 
Section 5.08 Sufficient Financial Capability.
20
     
ARTICLE VI COVENANTS
20
   
 
Section 6.01 Conduct of Business.
20
     
 
Section 6.02 Access to Information.
22
     
 
Section 6.03 Confidentiality.
22
     
 
Section 6.04 Non-Competition; Non-Solicitation.
23
     
 
Section 6.05 Buyer and Relevant Third Parties.
24
     
 
Section 6.06 Further Assurances.
24
     
 
Section 6.07 5% Residual Shares.
24
     
 
Section 6.08 Securities Law Matters.
25
     
ARTICLE VII TAX MATTERS
26
   
 
Section 7.01 Tax Covenants.
26
     
 
Section 7.02 Straddle Period.
26
     
 
Section 7.03 Termination of Existing Tax Sharing Agreements.
26
     
 
Section 7.04 Tax Indemnification.
27
     
 
Section 7.05 No Section 336(e) Election.
27
     
 
Section 7.06 Cooperation and Exchange of Information.
27
     
 
Section 7.07 Distributee Taxes.
27
     
 
Section 7.08 Survival.
27
     
ARTICLE VIII INDEMNIFICATION
28
   
 
Section 8.01 Indemnification by Sellers.
28
     
 
Section 8.02 Indemnification by Buyer.
28
     
 
Section 8.03 Indemnification Procedures.
29
     
 
Section 8.04 Certain Limitations.
29
     
 
Section 8.05 Survival.
30
     
 
Section 8.06 Tax Claims.
31
     
 
Section 8.07 Sandbagging.
31

iv

 
Section 8.08 Cumulative Remedies.
31
     
ARTICLE IX MISCELLANEOUS
31
   
 
Section 9.01 Expenses.
31
     
 
Section 9.02 Notices.
31
     
 
Section 9.03 Interpretation; Headings.
32
     
 
Section 9.04 Severability.
32
     
 
Section 9.05 Entire Agreement.
32
     
 
Section 9.06 Successors and Assigns.
32
     
 
Section 9.07 Amendment and Modification; Waiver.
32
     
 
Section 9.08 Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.
33
     
 
Section 9.09 Appointment of Seller Representative.
33
     
 
Section 9.10 Counterparts.
34
 
v

STOCK PURCHASE AGREEMENT
 
This Stock Purchase Agreement (this “Agreement”), dated as of August 31, 2021, is entered into among [the undersigned] (collectively, the “Sellers”) and ParcelPal Logistics Inc., a British Columbia, Canada corporation (OTCQB Ticker Symbol: PTNYF, “Buyer”), together with [representative] for the Sellers in connection with the transactions contemplated by this Agreement (the “Seller Representative”). Capitalized terms used in this Agreement have the meanings given to such terms herein.
 
RECITALS
 
WHEREAS, Sellers collectively own all of the issued and outstanding shares of common stock, no par value (the “Common Stock”), of [trucking], a Nevada corporation (the “Company”); and
 
WHEREAS, Sellers, severally and not jointly, wish to sell to Buyer, and Buyer wishes to purchase from Sellers, an aggregate of ninety-five percent (95%) of the issued and outstanding shares of Common Stock (collectively, the “Shares”), subject to the terms and conditions set forth herein;
 
NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
 
ARTICLE I
PURCHASE AND SALE
 
Section 1.01    Purchase and Sale. Subject to the terms and under the conditions set forth herein, at the Closing, each Seller shall severally sell to Buyer, and Buyer shall purchase from each Seller, the Shares, free and clear of any mortgage, pledge, lien, charge, security interest, claim, community property interest, option, equitable interest, restriction of any kind (including any restriction on use, voting, transfer, receipt of income, or exercise of any other ownership attribute), or other encumbrance (each, an “Encumbrance”).
 
Section 1.02    Purchase Price. The aggregate purchase price for the Shares shall be USD $3,100,000 (the “Purchase Price”) payable to Sellers as follows: (a) an aggregate of USD $1,860,000 (the “Cash Consideration”) in up to three tranches by wire transfers to bank accounts identified in writing by Sellers in Section 1.02 of the Disclosure Schedules, as follows (i) an aggregate of USD $700,000 on the Closing Date, (ii) an aggregate of USD $640,000 on or before the 45th day after the Closing Date, and (iii) an aggregate of USD $520,000 on or before the 90th day after the Closing Date, and (b) on the third Trading Day following the Closing Date, book entry confirmations in favor of the Sellers delivered via email by Buyer or its transfer agent (Computershare) representing such number of restricted shares of Buyer’s common stock representing an aggregate value of USD $1,240,000 (the “Buyer Stock”) based on the closing price of Buyer’s common stock as published by the OTCQB® Venture Market on the second Trading Day following the Closing Date.


For purposes of this Agreement, “Trading Day” means (i) a day on which the Buyer’s common stock is traded on OTC Bulletin Board (the “Trading Market”), or (ii) if the common stock is not listed or quoted on any Trading Market, a day on which Buyer’s common stock is quoted in the over-the-counter market as reported by the OTC Markets Group Inc. (or any similar organization or agency succeeding to its functions of reporting prices); provided, that, in the event that Buyer’s common stock is not listed or quoted as set forth in (i) or (ii) hereof, then Trading Day shall mean a Business Day (which means any day other than Saturday, Sunday, any day which shall be a federal legal holiday in the United States). The term “Disclosure Schedules” means the disclosure schedules, attached hereto and made a part hereof, delivered by Buyer and the Seller Representative on behalf of the Sellers concurrently with the execution, closing, and delivery of this Agreement.
 
ARTICLE II
CLOSING
 
Section 2.01    Closing. The closing of the transactions contemplated by this Agreement (the “Closing”) shall take place following the execution of this Agreement and the passage of such minimum statutory waiver periods under applicable California law related to the voluntary separation of certain Corp personnel in connection with the transaction  (the “Closing Date”) at the offices of Rimon, P.C., via the remote exchange of documents and signatures (or their electronic counterparts). The consummation of the transactions contemplated by this Agreement shall be deemed to occur at 12:01 a.m. Mountain Time on the Closing Date.
 
Section 2.02    Sellers Closing Deliverables. At the Closing, the Seller Representative shall deliver to Buyer the certificates and documents set forth below:
 
(a)      A certificate, dated the Closing Date, in form and substance reasonably satisfactory to Buyer, duly executed by each of the Sellers certifying as to the matters set forth in Sections 2.05(a), 2.05(b). and 2.05(c).
 
(b)      Share certificates evidencing each Seller’s Shares, free and clear of all Encumbrances, duly endorsed in blank or accompanied by stock powers or other instruments of transfer duly executed in blank.
 
(c)      A fully executed, five-year exclusive services agreement by and between the Company and [Corp], a Nevada corporation (“[____]”), effective as of the Closing Date (“Exclusive Services Agreement”), in form and substance acceptable to Buyer and the Company, as executed by a representative of [____] with due authority to bind [____].
 
(d)      A certificate of the Secretary (or other officer) of the Company certifying: (i) that attached thereto are true and complete copies of all resolutions of the board of directors and the stockholders of the Company authorizing the execution, delivery, and performance of this Agreement, the Exclusive Services Agreement and the other agreements, instruments, and documents required to be delivered in connection with this Agreement or at the Closing (collectively, the “Transaction Documents”) to which Sellers and/or the Company are parties and the consummation of the transactions contemplated hereby and thereby, and that such resolutions are in full force and effect; (ii) the names, titles, and signatures of the officers of the Company authorized to sign those Transaction Documents to which the Company is a party; and (iii) that attached thereto are true and complete copies of the governing documents of the Company, including any amendments or restatements thereof, and that such governing documents are in full force and effect.

2

(e)      Resignations of the directors and officers of the Company, effective as of the Closing Date.
 
(f)       A good standing certificate (or its equivalent) for the Company from the secretary of state or similar Governmental Authority of the jurisdiction in which the Company is organized and each jurisdiction where the Company is required to be qualified, registered, or authorized to do business. The term “Governmental Authority” means any federal, state, local, or foreign government or political subdivision thereof, or any agency or instrumentality of such government or political subdivision, or any arbitrator, court, or tribunal of competent jurisdiction.
 
(g)      A certificate from each of the Sellers, pursuant to Treasury Regulations Section 1.1445-2(b), that each Seller is not a foreign person within the meaning of Section 1445 of the Internal Revenue Code of 1986 (as amended, the “Code”).
 
(h)      A completed certificate or questionnaire from each of the Sellers attesting to their status as an “accredited investor” in substantially the form attached hereto as Exhibit B.
 
Section 2.03    Buyer’s Deliveries. At the Closing, Buyer shall deliver the following to the Seller Representative:
 
(a)      The aggregate first tranche of the Cash Consideration in the amounts set forth on Section 1.02 of the Disclosure Schedules.
 
(b)      A certificate of the Secretary (or other officer) of Buyer certifying: (i) that attached thereto are true and complete copies of all resolutions of the board of directors of Buyer authorizing the execution, delivery, and performance of this Agreement and the Transaction Documents to which it is a party and the consummation of the transactions contemplated hereby and thereby, and that such resolutions are in full force and effect; and (ii) the names, titles, and signatures of the officers of Buyer authorized to sign this Agreement and the other Transaction Documents to which it is a party.
 
(c)      A good standing certificate (or its equivalent) for the Buyer from the secretary of state or similar Governmental Authority of the jurisdiction in which the Buyer is organized and each jurisdiction where the Buyer is required to be qualified, registered, or authorized to do business.
 
Section 2.04    Conditions to the Obligations of all Parties. The obligations of the parties to effect the Closing are subject to the satisfaction as of the Closing of the following conditions (which may be waived by both Buyer and the Seller Representative in writing, in whole or in part, to the extent permitted by applicable Law):
 
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(a)      No Prohibition. No Governmental Authority of competent jurisdiction shall have enacted, adopted, promulgated, enforced or entered any applicable Law or final and non-appealable order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority (“Governmental Order”), and no Action shall be pending, which would reasonably be expected to prohibit the transactions contemplated by this Agreement.
 
Section 2.05    Conditions to the Obligations of Buyer. The obligations of Buyer to effect the Closing is subject to the satisfaction as of the Closing of the following conditions (which may be waived by Buyer in writing, in whole or in part, to the extent permitted by applicable Law):
 
(a)      Representations and Warranties.  Each of the representations and warranties of the Sellers and relating to the Company contained in ARTICLE III shall be true and correct in all respects (in the case of any representation or warranty qualified by materiality or Material Adverse Effect) or in all material respects (in the case of any representation or warranty not qualified by materiality or Material Adverse Effect) on and as of the date hereof, except for failures of such representations and warranties referred to in this sentence to be true and correct that do not have, and would not reasonably be expected to have, a material adverse effect on any Seller’s ability to consummate the transactions contemplated in this Agreement.
 
(b)      Covenants.  Each of the Company and each of the Sellers shall have performed and complied in all material respects with all of the covenants, obligations and agreements contained in this Agreement and the Transaction Documents to be performed and complied with by it or him on or prior to the Closing Date.
 
(c)      Material Adverse Effect. There shall have been no effect, change, event, fact, development or occurrence that, individually or in the aggregate, has resulted in, or that would reasonably be expected to result in, a material adverse effect on the Company’s operations or prospects, or each Seller’s ability to consummate the transactions contemplated in this Agreement.
 
(d)      Closing Deliveries.  The Seller Representative shall have delivered or caused to be delivered to Buyer each of the documents required to be delivered pursuant to Section 2.02.
 
Section 2.06    Conditions to the Obligations of the Sellers. The obligations of the Sellers to effect the Closing are subject to the satisfaction as of the Closing of the following conditions (which may be waived by the Seller Representative in writing, in whole or in part, to the extent permitted by applicable Law):

(a) Representations and Warranties.  Each of the representations and warranties of Buyer contained in ARTICLE IV shall be true and correct in all respects (in the case of any representation or warranty qualified by materiality or Material Adverse Effect) or in all material respects (in the case of any representation or warranty not qualified by materiality or Material Adverse Effect) on and as of the date hereof, except for failures of such representations and warranties referred to in this sentence to be true and correct that do not have, and would not reasonably be expected to have, a material adverse effect on Buyer’s ability to consummate the transactions contemplated in this Agreement.
 
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(b)     Covenants.  Buyer shall have performed and complied in all material respects with all of the covenants, obligations and agreements contained in this Agreement and the Transaction Documents to be performed and complied with by it on or prior to the Closing Date.
 
(c)      Material Adverse Effect.  There shall have been no effect, change, event, fact, development or occurrence that, individually or in the aggregate, has resulted in, or that would reasonably be expected to result in, a material adverse effect on the Buyer’s operations or prospects, or its ability to consummate the transactions contemplated in this Agreement.
 
(d)     Closing Deliveries.  Buyer shall have delivered or caused to be delivered to the Seller Representative each of the documents required to be delivered pursuant to Section 2.03.
 
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
 
Each of the Sellers severally, and not jointly, represents and warrants to Buyer that the statements contained in this ARTICLE III are true and correct. For purposes of this ARTICLE III, “Seller’s knowledge,” “knowledge of Seller,” and any similar phrases shall mean the actual or constructive knowledge of such Seller after due inquiry.
 
Section 3.01    Authority of the Sellers. Each Seller has full capacity, power and authority to enter into this Agreement and the other Transaction Documents to which such Seller is a party, to carry out his obligations hereunder and thereunder, and to consummate the transactions contemplated hereby and thereby. The execution and delivery by each Seller of this Agreement and any other Transaction Document to which such Seller is a party, the performance by such Seller of his obligations hereunder and thereunder, and the consummation by such Seller of the transactions contemplated hereby and thereby have been duly authorized by all requisite action on the part of such Seller. This Agreement and each Transaction Document to which a Seller is a party constitute legal, valid, and binding obligations of such Seller enforceable against such Seller in accordance with their respective terms.
 
Section 3.02    No Conflicts; Consents. The execution, delivery, and performance by each Seller of this Agreement and the documents to be delivered hereunder, and the consummation of the transactions contemplated hereby and thereby, do not and will not: (a) violate or conflict with any judgment, order, decree, statute, law, ordinance, rule, or regulation applicable to such Seller; (b) conflict with, or result in (with or without notice or lapse of time or both) any violation of, or default under, or give rise to a right of termination, acceleration or modification of any obligation or loss of any benefit under any contract or other instrument to which such Seller is a party; (c) result in any violation, conflict with or constitute a default under the Company’s organizational documents; or (d) result in the creation or imposition of any Encumbrance on such Seller’s Shares. No consent, approval, waiver, or authorization is required to be obtained by such Seller from any person or entity (including any governmental authority) in connection with the execution, delivery, and performance by such Seller of this Agreement and the consummation of the transactions contemplated hereby.
 
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Section 3.03    Legal Proceedings. There is no claim, action, suit, proceeding or governmental investigation (“Action”) of any nature pending or, to such Seller’s knowledge, threatened against or by such Seller (a) relating to or affecting the Shares; or (b) that challenges or seeks to prevent, enjoin, or otherwise delay the transactions contemplated by this Agreement. To such Seller’s knowledge, no event has occurred or circumstances exist that may give rise to, or serve as a basis for, any such Action.
 
Section 3.04    Ownership of Shares.
 
(a)      Each Seller is the sole legal, beneficial, record, and equitable owner of such Seller’s Shares, free and clear of all Encumbrances whatsoever as set forth in Section3.04 of the Disclosure Schedules.
 
(b)      To such Seller’s knowledge, the Shares were issued in compliance with applicable laws. To such Seller’s knowledge, the Shares were not issued in violation of the organizational documents of the Company or any other agreement, arrangement, or commitment to which such Seller or the Company is a party and are not subject to or in violation of any preemptive or similar rights of any Person.
 
(c)      There are no voting trusts, proxies, or other agreements or understandings in effect with respect to the voting or transfer of any of the Shares to which such Seller is a party.
 
Section 3.05    Brokers. No broker, finder, or investment banker is entitled to any brokerage, finder’s, or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of such Seller.
 
Section 3.06    Non-Foreign Status. Such Seller is not a foreign person as such term is used in Section 1446(f) of the Internal Revenue Code of 1986, as amended (“Code”) or Treasury Regulations Section 1.1445-2.
 
Section 3.07    No Resale or Distribution.  Such Seller is acquiring the Buyer Stock in the ordinary course of business for his own account and not with a view towards, or for resale in connection with, the public sale or distribution thereof, except (i) pursuant to sales registered under the Securities Act of 1933, as amended (the “Securities Act”) or under an exemption from such registration and in compliance with applicable federal and state securities laws if Buyer Stock is resold in the United States, or (ii) if such resale occurs in Canada, then under such applicable Canadian law and rule exemptions related thereto; and such Seller does not have a present arrangement to effect any distribution of the Buyer Stock to or through any person or entity.
 
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Section 3.08    Seller Status.  At the time such Seller was offered the Buyer Stock, he was, and at the date hereof he is an “accredited investor” as defined in Rule 501(a) under the Securities Act, except as set forth in Section 3.08 of the Disclosure Schedules.  Such Seller is not a registered broker dealer registered under Section 15(a) of the Exchange Act of 1934, as amended (the “Exchange Act”), or a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”). or an entity engaged in the business of being a broker dealer.  Except as otherwise disclosed in writing to the Buyer on Exhibit B (attached hereto) on or prior to the date of this Agreement, such Seller is not affiliated with any broker dealer registered under Section 15(a) of the Exchange Act, or a member of FINRA, Inc. or an entity engaged in the business of being a broker-dealer.
 
Section 3.09    No General Solicitation.  Such Seller is not purchasing the Buyer Stock as a result of any advertisement, article, notice or other communication regarding the Buyer Stock published in any newspaper, magazine or similar media, broadcast over television or radio, disseminated over the Internet or presented at any seminar or any other general solicitation or general advertisement.
 
Section 3.10    Sophisticated Investor.  Such Seller, either alone or together with his representatives has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Buyer Stock, and has so evaluated the merits and risks of such investment.  Such Seller understands that he must bear the economic risk of this investment in the Buyer Stock indefinitely, and is able to bear such risk and is able to afford a complete loss of such investment.
 
Section 3.11    Access to InformationSuch Seller and his advisors, if any, have been furnished with all materials relating to the business, finances and operations of the Buyer and materials relating to the offer and sale of the Buyer Stock which have been requested by such Seller. Such Seller and his advisors, if any, acknowledge that all material information regarding Buyer is in and has been made available to such Seller through SEDAR and EDGAR. Such Seller and his advisors, if any, have been afforded the opportunity to ask questions of the Buyer. Such Seller understands that his investment in the Buyer Stock involves a high degree of risk. Such Seller has sought such accounting, legal and tax advice as he has considered necessary to make an informed investment decision with respect to his acquisition of the Buyer Stock.
 
Section 3.12    No Governmental Review.  Such Seller understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Buyer Stock or the fairness or suitability of the investment in the Buyer Stock nor have such authorities passed upon or endorsed the merits of the offering of the Buyer Stock.
 
Section 3.13    Reliance on Exemptions. Such Seller understands that the Buyer Stock is being offered and sold to him in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that Buyer is relying in part upon the truth and accuracy of, and such Seller’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of such Seller set forth herein in order to determine the availability of such exemptions and the eligibility of such Seller to acquire the Buyer Stock
 
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Section 3.14    Prohibited Transactions; Confidentiality.  No Seller, directly or indirectly, and no Person acting on behalf of or pursuant to any understanding with any Seller, has engaged in any purchases or sales in the securities, including derivatives, of the Buyer (including, without limitation, any Short Sales (a “Transaction”) involving any of the Buyer’s securities) since the time that such Seller was first contacted by the Buyer or any other Person regarding an investment in the Buyer.  Such Seller covenants that neither he nor any Person acting on his behalf or pursuant to any understanding with such Seller will engage, directly or indirectly, in any Transactions in the securities of the Buyer (including Short Sales) prior to the time the transactions contemplated by this Agreement are publicly disclosed.  For purposes of this Agreement, “Short Sales” includes, without limitation, all “short sales” as defined in Rule 200 promulgated under Regulation SHO under the Exchange Act and all types of direct and indirect stock pledges, forward sale contracts, options, puts, calls, short sales, swaps, derivatives and similar arrangements (including on a total return basis), and sales and other transactions through non-U.S. broker-dealers or foreign regulated brokers.
 
Section 3.15    Restricted Securities.  Each Seller understands that the Buyer Stock is characterized as “restricted securities” under the U.S. federal securities laws inasmuch as they are being acquired from the Buyer in a transaction not involving a public offering and that under such laws and applicable regulations such securities may be resold without registration under the Securities Act only in certain limited circumstances.
 
Section 3.16    Legends.  It is understood that, except as provided in Section 4.1(b) of this Agreement, certificates evidencing such Buyer Stock may bear the legend set forth in Section 4.1(b).
 
Section 3.17    No Legal, Tax or Investment Advice.  Such Seller understands that nothing in this Agreement or any other materials presented by or on behalf of the Buyer to the Seller in connection with the purchase of the Buyer Stock constitutes legal, tax or investment advice.  Such Seller has consulted such legal, tax and investment advisors as it, in his sole discretion, has deemed necessary or appropriate in connection with his purchase of the Buyer Stock.
 
ARTICLE IV
REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY
 
The Sellers, jointly and severally, represent and warrant to Buyer that the statements contained in this Article  IV are true and correct. For purposes of this ARTICLE IV, “Sellers’ knowledge,” “knowledge of the Sellers,” and any similar phrases shall mean the actual or constructive knowledge of [sellers] after due inquiry.
 
Section 4.01    Organization, Authority, and Qualification of the Company. The Company is a corporation duly organized, validly existing, and in good standing under the Laws of the state of Nevada and has full corporate power and authority to own, operate, or lease the properties and assets now owned, operated, or leased by it and to carry on its business as it has been and is currently conducted. Section 4.01 of the Disclosure Schedules sets forth each jurisdiction in which the Company is licensed or qualified to do business, and the Company is duly licensed or qualified to do business and is in good standing in each jurisdiction in which the properties owned or leased by it or the operation of its business as currently conducted makes such licensing or qualification necessary.

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Section 4.02    Capitalization.
 
(a)      The authorized shares of the Company consist of ten (10) shares of common stock, no par value, of which ten (10) shares are issued and outstanding and constitute the Shares. All of the Shares have been duly authorized, are validly issued, fully paid and nonassessable. Upon the transfer, assignment, and delivery of the Shares and payment therefor in accordance with the terms of this Agreement, Buyer shall own all of the Shares, free and clear of all Encumbrances.
 
(b)     All of the Shares were issued in compliance with applicable Laws. None of the Shares was issued in violation of any agreement or commitment to which the Company is a party or is subject to or in violation of any preemptive or similar rights of any individual, corporation, partnership, joint venture, limited liability company, Governmental Authority, unincorporated organization, trust, association, or other entity (each, a “Person”).
 
(c)      There are no outstanding or authorized shares of preferred stock and no outstanding options, warrants, convertible securities, stock appreciation, phantom stock, profit participation, or other rights, agreements, or commitments relating to the shares of the Company or obligating the Company to transfer or issue or sell any shares of, or any other interest in, the Company. There are no voting trusts, stockholder agreements, proxies, or other agreements in effect with respect to the voting or transfer of any of the Shares.
 
Section 4.03    No Subsidiaries. The Company does not have, or have the right or obligation to acquire, an ownership interest in any other Person.
 
Section 4.04    No Conflicts or Consents. The execution, delivery, and performance by the Company of this Agreement and the other Transaction Documents to which it is a party, and the consummation of the transactions contemplated hereby and thereby, do not and will not: (a) violate or conflict with any provision of the articles of incorporation, by-laws, or other governing documents of the Company; (b) violate or conflict with any provision of any statute, law, ordinance, regulation, rule, code, treaty, or other requirement of any Governmental Authority (collectively, “Law”) or Governmental Order applicable to the Company; (c) require the consent, notice, or filing with or other action by any Person or require any Permit, license, or Governmental Order; (d) violate or conflict with, result in the acceleration of, or create in any party the right to accelerate, terminate, or modify any contract, lease, deed, mortgage, license, instrument, note, indenture, joint venture, or any other agreement, commitment, or legally binding arrangement, whether written or oral (collectively, “Contracts”), to which the Company is a party or by which the Company is bound or to which any of their respective properties and assets are subject; or (e) result in the creation or imposition of any Encumbrance on any properties or assets of the Company.
 
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Section 4.05    Financial Statements. Complete copies of the Company’s unaudited financial statements, consisting of the balance sheet of the Company as at December 31, in each of the years 2019 and 2020 and the related statements of income and retained earnings, stockholders’ equity, and cash flow for the years then ended (the “Financial Statements”) have been delivered to Buyer. The Financial Statements have been prepared in accordance with generally accepted accounting principles in effect in the United States from time to time (“GAAP”), applied on a consistent basis throughout the period involved. The Financial Statements are based on the books and records of the Company and fairly present in all material respects the financial condition of the Company as of the respective dates they were prepared and the results of the operations of the Company for the periods indicated. The balance sheet of the Company as of December 31, 2020 is referred to herein as the “Balance Sheet” and the date thereof as the “Balance Sheet Date”. The Company maintains a standard system of accounting established and administered in accordance with GAAP.
 
Section 4.06    Undisclosed Liabilities. The Company has no liabilities, obligations, or commitments of any nature whatsoever, whether asserted, known, absolute, accrued, matured, or otherwise (collectively, “Liabilities”), except: (a) those which are adequately reflected or reserved against in the Balance Sheet as of the Balance Sheet Date; and (b) those which have been incurred in the ordinary course of business consistent with past practice since the Balance Sheet Date and which are not, individually or in the aggregate, material in amount.
 
Section 4.07    Absence of Certain Changes, Events, and Conditions. Since the Balance Sheet Date, and other than in the ordinary course of business consistent with past practice, there has not been, with respect to the Company, any change, event, condition, or development that is, or could reasonably be expected to be, individually or in the aggregate, materially adverse to the business, results of operations, condition (financial or otherwise), or assets of the Company.
 
Section 4.08    Material Contracts.
 
(a)      Section 4.08(a) of the Disclosure Schedules lists each Contract that is material to the Company (such Contracts, together with all Contracts concerning the occupancy, management, or operation of any Real Property (as defined in Section 4.09(a)), being “Material Contracts”), including the following:
 
(i)           each Contract of the Company involving aggregate consideration in excess of $25,000 and which, in each case, cannot be cancelled by the Company without penalty or without more than 30 days’ notice;
 
(ii)          all Contracts that provide for the indemnification by the Company of any Person or the assumption of any Tax (as defined in Section 4.18(a)), environmental, or other Liability of any Person;
 
(iii)         all Contracts relating to Intellectual Property (as defined in Section 4.10(a)), including all licenses, sublicenses, settlements, coexistence agreements, covenants not to sue, and permissions;
 
(iv)         except for Contracts relating to trade payables, all Contracts relating to indebtedness (including, without limitation, guarantees) of the Company; and
 
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(v)          all Contracts that limit or purport to limit the ability of the Company to compete in any line of business or with any Person or in any geographic area or during any period of time.
 
(b)      Each Material Contract is valid and binding on the Company in accordance with its terms and is in full force and effect. None of the Company or, to the Sellers’ knowledge, any other party thereto is in breach of or default under (or is alleged to be in breach of or default under) in any material respect, or has provided or received any notice of any intention to terminate, any Material Contract. Complete and correct copies of each Material Contract (including all modifications, amendments, and supplements thereto and waivers thereunder) have been made available to Buyer.
 
Section 4.09    Real Property; Title to Assets.
 
(a)      Section 4.09(a) of the Disclosure Schedules lists all real property in which the Company has an ownership or leasehold (or subleasehold) interest (together with all buildings, structures, and improvements located thereon, the “Real Property”), including: (i) the street address of each parcel of Real Property; (ii) for Real Property that is leased or subleased by the Company, the landlord under the lease, the rental amount currently being paid, and the expiration of the term of such lease or sublease, and any termination or renewal rights of any party to the lease; and (iii) the current use of each parcel of Real Property. The Company has delivered or made available to Buyer true, correct, and complete copies of all Contracts, title insurance policies, and surveys relating to the Real Property.
 
(b)      The Company has good and valid (and, in the case of owned Real Property, good and indefeasible fee simple) title to, or a valid leasehold interest in, all Real Property, personal property (including equipment, software, computer systems, inventory, vehicles, contractual rights and assets owned by it as set forth on Annex A hereto), and other assets reflected in the Financial Statements or acquired after the Balance Sheet Date (other than properties and assets sold or otherwise disposed of in the ordinary course of business consistent with past practice since the Balance Sheet Date) or that are material to the business of the Company. All Real Property and such personal property and other assets (including leasehold interests) are free and clear of Encumbrances except for those items set forth in Section 4.09(b) of the Disclosure Schedules.
 
(c)      The Company is not a sublessor or grantor under any sublease or other instrument granting to any other Person any right to possess, lease, occupy, or use any leased Real Property. The use of the Real Property in the conduct of the Company’s business does not violate in any material respect any Law, covenant, condition, restriction, easement, license, permit, or Contract and no material improvements constituting a part of the Real Property encroach on real property owned or leased by a Person other than the Company.
 
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Section 4.10    Intellectual Property.
 
(a)      The term “Intellectual Property” means any and all of the following in any jurisdiction throughout the world: (i) issued patents and patent applications; (ii) trademarks, service marks, trade names, and other similar indicia of source or origin, together with the goodwill connected with the use of and symbolized by, and all registrations, applications for registration, and renewals of, any of the foregoing; (iii) copyrights, including all applications and registrations; (iv) trade secrets, know-how, inventions (whether or not patentable), technology, and other confidential and proprietary information and all rights therein; (v) internet domain names and social media accounts and pages; and (vi) other intellectual or industrial property and related proprietary rights, interests, and protections.
 
(b)      Section 4.10(b) of the Disclosure Schedules lists all issued patents, registered trademarks, domain names and copyrights, and pending applications for any of the foregoing and all material unregistered Intellectual Property that are owned by the Company (the “Company IP Registrations”). The Company owns or has the valid and enforceable right to use all Intellectual Property used or held for use in or necessary for the conduct of the Company’s business as currently conducted or as proposed to be conducted (the “Company Intellectual Property”), free and clear of all Encumbrances. All of the Company Intellectual Property is valid and enforceable, and all Company IP Registrations are subsisting and in full force and effect. The Company has taken all reasonable and necessary steps to maintain and enforce the Company Intellectual Property.
 
(c)      The conduct of the Company’s business as currently and formerly conducted has not infringed, misappropriated, or otherwise violated and will not infringe, misappropriate, or otherwise violate the Intellectual Property or other rights of any Person. No Person has infringed, misappropriated, or otherwise violated any Company Intellectual Property.
 
Section 4.11     Material Customers and Suppliers.
 
(a)      Section 4.11(a) of the Disclosure Schedules sets forth each customer who has paid aggregate consideration to the Company for goods or services rendered in an amount greater than or equal to $25,000 for each of the three most recent fiscal years (collectively, the “Material Customers”). The Company has not received any notice, and has no reason to believe, that any of its Material Customers has ceased, or intends to cease after the Closing, to purchase or use its goods or services or to otherwise terminate or materially reduce its relationship with the Company.
 
(b)      Section 4.11(b) of the Disclosure Schedules sets forth each supplier to whom the Company has paid consideration for goods or services rendered in an amount greater than or equal to $25,000 for each of the three most recent fiscal years (collectively, the “Material Suppliers”). The Company has not received any notice, and has no reason to believe, that any of its Material Suppliers has ceased, or intends to cease, to supply goods or services to the Company or to otherwise terminate or materially reduce its relationship with the Company.
 
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Section 4.12    Insurance. Section 4.12 of the Disclosure Schedules sets forth a true and complete list of all current policies or binders of insurance maintained by or on behalf of the Company and relating to the assets, business, operations, employees, officers, and directors of the Company (collectively, the “Insurance Policies”). Such Insurance Policies: (a) are in full force and effect; (b) are valid and binding in accordance with their terms; (c) are provided by carriers who are financially solvent; and (d) have not been subject to any lapse in coverage. The Company has not received any written notice of cancellation of, premium increase with respect to, or alteration of coverage under, any of such Insurance Policies. All premiums due on such Insurance Policies have been paid. The Company is not in default under, or has otherwise failed to comply with, in any material respect, any provision contained in any Insurance Policy. The Insurance Policies are of the type and in the amounts customarily carried by Persons conducting a business similar to the Company and are sufficient for compliance with all applicable Laws and Contracts to which the Company is a party or by which it is bound. For purposes of this Agreement: (x) “Affiliate” of a Person means any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person; and (y) the term “control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities or other ownership interests, by contract, or otherwise.
 
Section 4.13     Legal Proceedings; Governmental Orders.
 
(a)      There are no claims, actions, causes of action, demands, lawsuits, arbitrations, inquiries, audits, notices of violation, proceedings, litigation, citations, summons, subpoenas, or investigations of any nature, whether at law or in equity (collectively, “Actions”) pending or, to the Sellers’ knowledge, threatened against or by the Company or any Affiliate of the Company: (i) relating to or affecting the Company or any of the Company’s properties or assets or (ii) that challenge or seek to prevent, enjoin, or otherwise delay the transactions contemplated by this Agreement. No event has occurred or circumstances exist that may give rise to, or serve as a basis for, any such Action.
 
(b)     There are no outstanding, and the Company is in material compliance with all, Governmental Orders against, relating to, or affecting the Company or any of its properties or assets.
 
Section 4.14     Compliance with Laws; Permits.
 
(a)      The Company has complied, and is in material compliance, with all Laws applicable to it or its business, properties, or assets.
 
(b)      All permits, licenses, franchises, approvals, registrations, certificates, variances, and similar rights obtained, or required to be obtained, from Governmental Authorities (collectively, “Permits”) in order for the Company to conduct its business, including, without limitation, owning or operating any of the Real Property, have been obtained and are valid and in full force and effect. Section 4.14(b) of the Disclosure Schedules lists all current Permits issued to the Company and no event has occurred that would reasonably be expected to result in the revocation or lapse of any such Permit.
 
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(c)      The operations of the Company and its affiliates are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the USA Patriot Act, applicable money laundering statutes of all jurisdictions and the applicable rules, related rules and regulations thereunder (collectively, the “Money Laundering Laws”), and no Action by or before any Governmental Authority involving any Seller, the Company or any of its affiliates with respect to the Money Laundering Laws is pending, or to the knowledge of each of the Sellers, threatened against the Company or any of its affiliates.
 
(d)     None of the Sellers, the Company, any of its affiliates or any director, officer or, to the knowledge of the Sellers, employee or agent of the Company or any of its affiliates has: (i) used any funds for unlawful contributions, gifts, entertainment, or other unlawful payments relating to an act by any Governmental Authority; (ii) made any unlawful payment to any foreign or domestic government official or employee or to any foreign or domestic political party or campaign or violated any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or (iii) made any other unlawful payment under any applicable Law relating to anti-corruption, bribery, or similar matters. Neither the Company nor any of its affiliates has disclosed to any Governmental Authority that it violated or may have violated any Law relating to anti-corruption, bribery, or similar matters. To the knowledge of the Sellers, no Governmental Authority is investigating, examining, or reviewing the Company’s compliance with any applicable provisions of any Law relating to anti-corruption, bribery, or similar matters.
 
Section 4.15    Environmental Matters.
 
(a)      The terms: (i) “Environmental Laws” means all Laws, now in effect, relating to the regulation and protection of human health, safety, the environment, and natural resources, including any federal, state, or local transfer of ownership notification or approval statutes and (ii) “Hazardous Substances” means: (A) “hazardous materials,” “hazardous wastes,” “hazardous substances,” “industrial wastes,” or “toxic pollutants,” as such terms are defined under any Environmental Laws; (B) any other hazardous or radioactive substance, contaminant, or waste; and (C) any other substance with respect to which any Environmental Law or Governmental Authority requires environmental investigation, regulation, monitoring, or remediation.
 
(b)      The Company has complied, and is now complying, with all Environmental Laws. Neither the Company nor any Seller has received notice from any Person that the Company, its business or assets, or any real property currently or formerly owned, leased, or used by the Company is or may be in violation of any Environmental Law or any applicable Law regarding Hazardous Substances.
 
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(c)      There has not been any spill, leak, discharge, injection, escape, leaching, dumping, disposal, or release of any kind of any Hazardous Substances in violation of any Environmental Law: (i) with respect to the business or assets of the Company; or (ii) at, from, in, adjacent to, or on any real property currently or formerly owned, leased, or used by the Company. There are no Hazardous Substances in, on, about, or migrating to any real property currently or formerly owned, leased, or used by the Company, and such real property is not affected in any way by any Hazardous Substances.
 
Section 4.16    Employee Benefit Matters.
 
(a)      Section 4.16(a) of the Disclosure Schedules contains a true and complete list of each “employee benefit plan” as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974 (as amended, and including the regulations thereunder, “ERISA”), whether or not written and whether or not subject to ERISA, and each supplemental retirement, compensation, employment, consulting, profit-sharing, deferred compensation, incentive, bonus, equity, change in control, retention, severance, salary continuation, and other similar agreement, plan, policy, program, practice, or arrangement which is or has been established, maintained, sponsored, or contributed to by the Company or under which the Company has or may have any Liability (each, a “Benefit Plan”).
 
(b)      For each Benefit Plan,  the Company has made available to Buyer accurate, current, and complete copies of each of the following: (i) the plan document with all amendments, or if not reduced to writing, a written summary of all material plan terms; (ii) any written contracts and arrangements related to such Benefit Plan, including trust agreements or other funding arrangements, and insurance policies, certificates, and contracts; (iii) in the case of a Benefit Plan intended to be qualified under Section 401(a) of the Code, the most recent favorable determination or national office approval letter issued by the Internal Revenue Service and any legal opinions issued thereafter with respect to the Benefit Plan’s continued qualification; (iv) the most recent Form 5500 filed with respect to such Benefit Plan; and (v) any material notices, audits, inquiries, or other correspondence from, or filings with, any Governmental Authority relating to the Benefit Plan.
 
(c)      Each Benefit Plan and related trust has been established, administered, and maintained in accordance with its terms and in substantial compliance with all applicable Laws (including ERISA and the Code). Nothing has occurred with respect to any Benefit Plan that has subjected or could reasonably be expected to subject the Company or, with respect to any period on or after the Closing Date, Buyer or any of its Affiliates, to a civil action, penalty, surcharge, or Tax under applicable Law or which would jeopardize the previously-determined qualified status of any Benefit Plan. All benefits, contributions, and premiums relating to each Benefit Plan have been timely paid in accordance with the terms of such Benefit Plan and all applicable Laws and accounting principles. Benefits accrued under any unfunded Benefit Plan have been paid, accrued, or adequately reserved for to the extent required by GAAP.
 
(d)      The Company has not incurred and does not reasonably expect to incur: (i) any material Liability under Title I or Title IV of ERISA, any related provisions of the Code, or applicable Law relating to any Benefit Plan or (ii) any Liability to the Pension Benefit Guaranty Corporation. No complete or partial termination of any Benefit Plan has occurred or is expected to occur.
 
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(e)      The Company has not now or at any time within the previous three years contributed to, sponsored, or maintained: (i) any “multiemployer plan” as defined in Section 3(37) of ERISA; (ii) any “single-employer plan” as defined in Section 4001(a)(15) of ERISA; (iii) any “multiple employer plan” as defined in Section 413(c) of the Code; (iv) any “multiple employer welfare arrangement” as defined in Section 3(40) of ERISA; (v) a leveraged employee stock ownership plan described in Section 4975(e)(7) of the Code; or (vi) any other Benefit Plan subject to required minimum funding requirements.
 
(f)       Other than as required under Sections 601 to 608 of ERISA or other applicable Law, no Benefit Plan provides post-termination or retiree welfare benefits to any individual for any reason.
 
(g)      Neither the execution of this Agreement nor any of the transactions contemplated by this Agreement will, either alone or in combination with any other event: (i) entitle any current or former director, officer, employee, independent contractor, or consultant of the Company to any severance pay, increase in severance pay, or other payment; (ii) accelerate the time of payment, funding, or vesting, or increase the amount of compensation (including stock-based compensation) due to any such individual; (iii) limit or restrict the right of the Company to amend or terminate any Benefit Plan; (iv) increase the amount payable under any Benefit Plan; (v) result in any “excess parachute payments” within the meaning of Section 280G(b) of the Code; or (vi) require a “gross-up” or other payment to any “disqualified individual” within the meaning of Section 280G(c) of the Code.
 
Section 4.17    Employment Matters.
 
(a)      Section 4.17(a) of the Disclosure Schedules lists: (i) all employees, independent contractors, and consultants of the Company; and (ii) for each individual described in clause (i), (A) the individual’s title or position, hire date, and compensation, (B) any Contracts entered into between the Company and such individual, and (C) the fringe benefits provided to each such individual. All compensation payable to all employees, independent contractors, or consultants of the Company for services performed on or prior to the Closing Date have been paid in full.
 
(b)      The Company is not, and has not been, a party to or bound by any collective bargaining agreement or other Contract with a union or similar labor organization (collectively, “Union”), and no Union has represented or purported to represent any employee of the Company. There has never been, nor has there been any threat of, any strike, work stoppage, slowdown, picketing, or other similar labor disruption or dispute affecting the Company or any of its employees.
 
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(c)      The Company is and has been in compliance in all material respects with: (i) all applicable employment Laws and agreements regarding hiring, employment, termination of employment, plant closings and mass layoffs, employment discrimination, harassment, retaliation, and reasonable accommodation, leaves of absence, terms and conditions of employment, wages and hours of work, employee classification, employee health and safety, engagement and classification of independent contractors, payroll taxes, and immigration with respect to all employees, independent contractors, and contingent workers; and (ii) all applicable Laws relating to the relations between it and any labor organization, trade union, work council, or other body representing employees of the Company.
 
Section 4.18     Taxes.
 
(a)      All returns, declarations, reports, information returns and statements, and other documents relating to Taxes (including amended returns and claims for refund) (collectively, “Tax Returns”) required to be filed by the Company on or before the Closing Date have been timely filed. At the time such tax filings were made, the Sellers believed such Tax Returns were true, correct, and complete in all respects. All Taxes due and owing by the Company (whether or not shown on any Tax Return) have been timely paid. No extensions or waivers of statutes of limitations have been given or requested with respect to any Taxes of the Company. The Company has delivered to Buyer copies of all Tax Returns and examination reports of the Company and statements of deficiencies assessed against, or agreed to by, the Company, for all Tax periods ending after December 31, 2017. The term “Taxes” means all federal, state, local, foreign, and other income, gross receipts, sales, use, production, ad valorem, transfer, franchise, registration, profits, license, lease, service, service use, withholding, payroll, employment, unemployment, estimated, excise, severance, environmental, stamp, occupation, premium, property (real or personal), real property gains, windfall profits, customs, duties, or other taxes, fees, assessments, or charges of any kind whatsoever, together with any interest, additions, or penalties with respect thereto.
 
(b)      The Company has not been a member of an affiliated, combined, consolidated, or unitary Tax group for Tax purposes. The Company has no Liability for Taxes of any Person (other than the Company) under Treasury Regulations Section 1.1502-6 (or any corresponding provision of state, local, or foreign Law), as transferee or successor, by contract, or otherwise.
 
(c)      There are no liens for Taxes (other than for current Taxes not yet due and payable) upon the assets of the Company.
 
(d)      The Company is not a “foreign person” as that term is used in Treasury Regulations Section 1.1445-2. The Company is not, nor has it been, a United States real property holding corporation (as defined in Section 897(c)(2) of the Code) during the applicable period specified in Section 897(c)(1)(a) of the Code.
 
Section 4.19    Books and Records. The minute books and share record and transfer books of the Company, all of which are in the possession of the Company and have been made available to Buyer, are complete and correct.
 
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Section 4.20    Brokers. No broker, finder, or investment banker is entitled to any brokerage, finder’s, or other fee or commission in connection with the transactions contemplated by this Agreement or any other Transaction Document based upon arrangements made by or on behalf of the Company.
 
Section 4.21    Data Protection. The Company has fully complied with the requirements of all applicable legislation concerning rights in respect of privacy and personal data.
 
Section 4.22    Accounts Payable.  Section 4.22 of the Disclosure Schedule sets forth a true, correct and complete breakdown and aging of the accounts payable of the Company as of July 31, 2021. All accounts payable were incurred in the ordinary course of business consistent with past practice, are valid payables for products or services purchased by the Company and except as set forth on the Disclosure Schedule are not past due and in no event are any payables more than 90 days past the invoice date
 
Section 4.23    Related Party Transactions.  The Company has only ever done business with [____]. Accordingly, the representations and warranties set forth in this Section 4.23 specifically exclude any relationship between any Related Party and [____].  This Section 4.23 shall be read as if [____] and the Company had a unity of interests such that any specific “breach” by a Seller or Related Party hereof shall not be deemed to be a breach if such “breach” is strictly related to the relationship between [____] and the Company, on the one hand, and the specific Seller, on the other hand. No Related Party has, or has at any time had, any direct or indirect interest in any asset used in or otherwise relating to the business of the Company. No Related Party is, or has been, indebted to the Company. No Related Party has entered into, or has had any direct or indirect financial interest in, any Material Contract, transaction or business dealing involving the Company. No Related Party is competing, or has at any time competed, directly or indirectly, with the Company. No Related Party has any claim or right against the Company (other than claims or rights to receive compensation for services performed as an employee or as a director).  For purposes of this Agreement, “Related Party” means (a) any of the Sellers; and (b) each member of the immediate family of each of the individuals referred to in clause (a) above.
 
Section 4.24    Full Disclosure. No several and not joint representation or warranty by each Seller in this Agreement and no statement contained in the Disclosure Schedules to this Agreement or any certificate or other document furnished or to be furnished to Buyer pursuant to this Agreement contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements contained therein, in light of the circumstances in which they are made, not misleading.
 
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
 
Buyer represents and warrants to each Seller that the statements contained in this Article IV are true and correct as of the date hereof and on each date Buyer tenders any Cash Consideration or the Buyer Stock to any Seller.
 
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Section 5.01     Organization and Authority of Buyer. Buyer is a corporation duly organized, validly existing, and in good standing under the Laws of the province of British Columbia. Buyer has full corporate power and authority to enter into this Agreement and the other Transaction Documents to which Buyer is a party, to carry out its obligations hereunder and thereunder, and to consummate the transactions contemplated hereby and thereby. The execution and delivery by Buyer of this Agreement and any other Transaction Document to which Buyer is a party, the performance by Buyer of its obligations hereunder and thereunder, and the consummation by Buyer of the transactions contemplated hereby and thereby have been duly authorized by all requisite corporate action on the part of Buyer. This Agreement and each Transaction Document constitute legal, valid, and binding obligations of Buyer enforceable against Buyer in accordance with their respective terms.
 
Section 5.02     No Conflicts; Consents. The execution, delivery, and performance by Buyer of this Agreement and the other Transaction Documents to which it is a party, and the consummation of the transactions contemplated hereby and thereby, do not and will not: (a) violate or conflict with any provision of the certificate of incorporation, by-laws, or other governing documents of Buyer; (b) violate or conflict with any provision of any Law or Governmental Order applicable to Buyer; or (c) require the consent, notice, declaration, or filing with or other action by any Person or require any Permit, license, or Governmental Order.
 
Section 5.03     Investment Purpose. Buyer is acquiring the Shares solely for its own account for investment purposes and not with a view to, or for offer or sale in connection with, any distribution thereof or any other security related thereto within the meaning of the Securities Act. Buyer acknowledges that no Seller has registered the offer and sale of the Shares under the Securities Act or any state securities laws, and that the Shares may not be pledged, transferred, sold, offered for sale, hypothecated, or otherwise disposed of except pursuant to the registration provisions of the Securities Act or pursuant to an applicable exemption therefrom and subject to state securities laws and regulations, as applicable.
 
Section 5.04     Securities Filings. Buyer is listed and its common shares are trading on the Canadian Securities Exchange and quoted on the OTCQB. It is a “reporting issuer” under the securities legislation of all provinces and territories of Canada and under the Exchange Act, is in compliance with all continuous disclosure obligations thereunder, is not in default of such legislation or any regulation thereunder, and is current in its filings (the “Securities Filings”) required under applicable Law. It is not listed on the list of defaulting issuers maintained by the British Columbia Securities Commission. As of their respective dates, the Securities Filings complied in all material respects with the requirements of the law, rules and regulations of applicable securities laws, including the Exchange Act and the Canadian Securities Exchange (collectively, the “Securities Rules and Regulations”), and none of the Securities Filings, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. Buyer has not filed any confidential material change report or requested confidential treatment with any securities regulatory authority that at the date of this Agreement remains confidential. The financial statements of Buyer and each subsidiary, if any, included in the Securities Filings complied in all material respects with applicable accounting requirements and the Securities Rules and Regulations as in effect at the time of filing.
 
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Section 5.05     Buyer Stock Consideration. The Buyer Stock will be, prior to the issuance, duly authorized, and when issued and delivered in accordance with the terms of this Agreement, will be validly issued, fully paid and non-assessable and will rank pari passu in all respects with all other outstanding Buyer common stock and will not have been issued in violation of or subject to any preemptive rights or other contractual rights to purchase securities issued by Buyer, subject only to any restrictions on resale as imposed by the Securities Act (British Columbia) and the Securities Act and such other requirements of securities laws and regulatory authorities having jurisdiction.
 
Section 5.06    Brokers. No broker, finder, or investment banker is entitled to any brokerage, finder’s, or other fee or commission in connection with the transactions contemplated by this Agreement or any other Transaction Document based upon arrangements made by or on behalf of Buyer.
 
Section 5.07     Absence of Certain Changes, Events and Conditions. Since December 31, 2020 and other than in the ordinary course of business consistent with past practice, there has not been, with respect to Buyer, any change, event, condition, or development that is, or could reasonably be expected to be, individually or in the aggregate, materially adverse to the business, results of operations, condition (financial or otherwise), or assets of Buyer.
 
Section 5.08     Sufficient Financial Capability. Buyer has sufficient cash resources or immediate access to available credit to pay the Cash Consideration and will have such funds as such payment obligations become due.
 
ARTICLE VI
COVENANTS
 
Section 6.01    Conduct of Business.
 
(a)      From the date hereof until the Closing, the Company shall conduct its business, in the ordinary course consistent with past practice, except (i) as specifically contemplated by this Agreement or (ii) if Buyer has consented in writing (which consent will not be unreasonably withheld, denied, conditioned, or delayed).  From the date hereof until the Closing, the Company shall use commercially reasonable efforts to keep and maintain its assets in good operating condition and repair, normal wear and tear expected, to maintain the business organization of the Company substantially intact and to preserve the goodwill of the Governmental Authorities, independent contractors, employees, suppliers and others having business relations with the Company.
 
(b)      From the date hereof until the Closing, except (i) as specifically contemplated by this Agreement, (ii) if Buyer has consented in writing (which consent will not be unreasonably withheld, denied, conditioned, or delayed), or (iii) as required by applicable Law, the Company shall not:
 
(i)           propose, cause, permit or adopt any modifications, amendments or changes to the organizational and governance documents of the Company;
 
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(ii)          propose, cause, permit or adopt any modifications, amendments or changes to any written or oral agreement or arrangement, or course of dealing with [____];
 
(iii)         merge, consolidate or effect any other business combination with or into any other Person or dissolve or liquidate;
 
(iv)         make any loans, advances or capital contributions to, or investments in, any Person;
 
(v)          transfer, license, sell, lease, or otherwise dispose of (whether by way of merger, consolidation, sale of stock or assets, or otherwise) or subject to any Encumbrance, any assets;
 
(vi)         declare or pay any dividend;
 
(vii)        repurchase, prepay, incur, assume or guarantee any indebtedness;
 
(viii)       change any practices, policies and procedures of the Company with respect to cash management, revenue recognition, collection of receivables, establishment of reserves for uncollectible receivables, contingent liabilities or otherwise, prepayment of expenses, payment of payables and accrual of other expenses;
 
(ix)         make, change or revoke any material Tax election, adopt or change any accounting method with respect to Taxes, file any amended Tax Return, enter into any closing agreement with respect to material Taxes, settle or compromise any audit, dispute, investigation or proceeding with respect to any material Tax claim or assessment relating to the Company, surrender any right to claim a refund of Taxes, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company, or fail to timely make any payments of estimated Taxes;
 
(x)          commence, settle or compromise any Actions of the Company;
 
(xi)         enter into, terminate or fail to renew any Intellectual Property Agreement;
 
(xii)        enter into or discontinue any line of business or any business operations;
 
(xiii)       incur any capital expenditures not contemplated in excess of $10,000 in the aggregate;
 
(xiv)       change the compensation payable or benefits provided to, or make any other material change in the employment terms for, any of the Company’s employee, except as required by the terms of any written employment contract in existence on the date hereof and made available to Buyer;
 
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(xv)        hire, engage or terminate the employment or engagement of any employee;
 
(xvi)       enter into, amend or modify any contract that would have been a Material Contract if in effect on the date hereof or as of the Closing, or amend, supplement or terminate any Material Contract;
 
(xvii)      terminate or modify in any material respect, or fail to exercise renewal rights with respect to, any insurance policy; or
 
(xviii)     agree or commit to do any of the foregoing.
 
(c)      The Company shall maintain its bank account(s), including its cash balances through and including the Closing Date, such that any available cash for operations are and shall be funded from the operations of the Company’s business, and no Seller or none of his representatives, agents, parent, affiliate or subsidiary entities or agents/representatives shall, and shall not have, withdrawn funds from the Company’s related bank account(s) other than for ordinary course business related payables and in the event any has been withdrawn, such withdrawals shall be disclosed with material written support and documented basis for same.
 
Section 6.02     Access to Information. From the date hereof until the Closing, the Company shall provide Buyer and its Representatives (as defined below) with reasonable access during normal business hours, and upon reasonable notice, to the senior personnel, books and records of the Company as Buyer shall from time to time request for any reasonable business purpose relating to this Agreement or the contemplated transactions; provided, that, notwithstanding the foregoing, (i) such access does not unreasonably interfere with the normal operations of the Company and shall be at Buyer’s sole cost and expense and (ii) nothing herein shall require the Company to provide access to, or to disclose any information to, Buyer or any of Buyer’s Representatives if such access or disclosure would reasonably be expected to (a) result in the loss or waiver of the attorney-client privilege or (b) be in violation of applicable Law, it being understood that, in the cause of clauses (a) and (b), the Company will take reasonable actions to eliminate any such impediments to providing such information.  Without limiting the generality of the foregoing, the Company shall provide to Buyer as promptly as reasonably practicable, and in any case within fifteen (15) days, after the end of each month prior to the Closing Date an unaudited balance sheet of the Company as of the last day of such month and the related unaudited statements of income and cash flows for such month.
 
Section 6.03     Confidentiality. From and after the Closing, each Seller shall, and shall cause his respective Affiliates and his and their respective directors, officers, employees, consultants, counsel, accountants, and other agents (collectively, “Representatives”) to, hold in confidence any and all information, in any form, concerning the Company, except to the extent that such Seller can show that such information: (a) is generally available to and known by the public through no fault of such Seller, any of his Affiliates, or his respective Representatives or (b) is lawfully acquired by such Seller, any of his Affiliates, or his respective Representatives from and after the Closing from sources that are not prohibited from disclosing such information by any obligation. If any Seller or any of his Affiliates or his respective Representatives are compelled to disclose any information by Governmental Order or Law, such Seller shall promptly notify Buyer in writing and shall disclose only that portion of such information that is legally required to be disclosed; provided, however, such Seller shall use reasonable best efforts to obtain as promptly as possible an appropriate protective order or other reasonable assurance that confidential treatment will be accorded such information.
 
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Section 6.04    Non-Competition; Non-Solicitation.
 
(a)      For a period of five (5) years commencing on the Closing Date (the “Restricted Period”), no Seller shall, and shall not permit any of his Affiliates to, directly or indirectly: (i) engage in or assist others in engaging in logistic management services and supply chain solutions, including last mile delivery service (the “Restricted Business”) in the State of Utah (the “Territory”); (ii) have an interest in any Person that engages, directly or indirectly, in the Restricted Business in the Territory in any capacity, including as a partner, stockholder, director, officer, member, manager, employee, contractor, principal, agent, volunteer, intern, advisor, or consultant; or (iii) intentionally interfere in any material respect with the business relationships (only if formed prior to the date of this Agreement and only in respect of business relationships for business solely conducted in the Territory) between the Company and customers or suppliers of the Company in the Territory. Notwithstanding the foregoing, each and every Seller may own, directly or indirectly, solely as an investment, securities of any Person traded on any national securities exchange or over-the-counter market if such Seller is not a controlling Person of, or a member of a group that controls, such Person and does not, directly or indirectly, own in excess of 4.99% of any class of securities of such Person.
 
(b)     During the Restricted Period, no Seller shall, and shall not permit any of his Affiliates to, directly or indirectly, hire or solicit any current or former employee of the Company or encourage any employee to leave the Company’s employment, except pursuant to a general solicitation that is not directed specifically to any such employees; provided, however, nothing in this Section 6.04(b) shall prevent any Seller or any of his Affiliates from hiring any employee terminated by the Company.
 
(c)      Each Seller acknowledges that a breach or threatened breach of this Section Section 6.04 would give rise to irreparable harm to Buyer, for which monetary damages would not be an adequate remedy, and hereby agrees that, in the event of a breach or a threatened breach by such Seller of any such obligations, Buyer shall, in addition to any and all other rights and remedies that may be available to it in respect of such breach, be entitled to petition a court of competent jurisdiction for equitable relief, including a temporary restraining order, an injunction, or specific performance (without such Seller requesting the Court to order the Buyer to post bond).
 
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(d)      Each Seller acknowledges that the restrictions contained in this Section Section 6.04 are reasonable and necessary to protect the legitimate interests of Buyer and constitute a material inducement to Buyer to enter into this Agreement and consummate the transactions contemplated by this Agreement. In the event that any covenant contained in this Section 6.04 should ever be adjudicated to exceed the time, geographic, product or service, or other limitations permitted by applicable Law in any jurisdiction or any Governmental Order, then any court of competent jurisdiction is expressly empowered to reform such covenant, and such covenant shall be deemed reformed, in such jurisdiction to the maximum time, geographic, product or service, or other limitations permitted by applicable Law or such Governmental Order. The covenants contained in this Section 6.04 and each provision hereof are severable and distinct covenants and provisions. The invalidity or unenforceability of any such covenant or provision as written shall not invalidate or render unenforceable the remaining covenants or provisions hereof, and any such invalidity or unenforceability in any jurisdiction shall not invalidate or render unenforceable such covenant or provision in any other jurisdiction.
 
Section 6.05    Buyer and Relevant Third Parties.
 
(a)      During the pendency of the Exclusive Services Agreement, none of the Buyer and its Affiliates, including the Company, shall take, or refrain from taking, any action that could result in the contractual relationships of [____] with any third party (on a [____] system-wide basis), which relationships support the Company’s Utah delivery and logistics business, becoming economically limited or terminated.  In that context, [____] shall determine the methods, periodicity, and identity of any individual who shall communicate with the entities that support the Company’s Utah delivery and logistics business.
 
(b)      Buyer acknowledges that a breach or threatened breach of this Section 6.04 would give rise to irreparable harm to [____], for which monetary damages would not be an adequate remedy, and hereby agrees that, in the event of a breach or a threatened breach by Buyer of any such obligations, [____] shall, in addition to any and all other rights and remedies that may be available to it in respect of such breach, be entitled to petition a court of competent jurisdiction for equitable relief, including a temporary restraining order, an injunction, or specific performance (without [____] requesting the Court to order [____] to post bond).
 
Section 6.06    Further Assurances. Following the Closing, each of the parties hereto shall, and shall use their respective commercially reasonable efforts to cause their respective Affiliates to, execute and deliver such additional documents and instruments and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Agreement and the other Transaction Documents.
 
Section 6.07     5% Residual Shares. Each Seller and the Seller Representative understands, acknowledges, and agrees that (a) neither such Seller, nor any other Person shall be entitled to any dividends related to the 5% of Common Stock retained by such Seller in the transaction (the “5% Residual Shares”), (b) there is no public trading market for the 5% Residual Shares, (c) there is no current plan to list or register the 5% Residual Shares in the future, and (d) neither any Seller, nor any other Person, has any rights to demand any registration, listing or quotation of the 5% Residual Shares.  Each Seller hereby irrevocably waives any rights to revenues, profits, preferences or such other source of cash or capital solely as a result of his retention of the 5% Residual Shares or any portion thereunder, and that the 5% Residual Shares shall only carry with it the voting rights concomitant with the ownership of such shares.
 
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Section 6.08    5% Securities Law Matters. Each Seller agrees to the imprinting, until no longer required, of such applicable United States and Canadian restrictive legend(s) on any certificate, ledger or book entry notation of Buyer evidencing all or any portion of the Buyer Stock including as follows:
 
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”), OR QUALIFIED UNDER ANY STATE SECURITIES LAWS, AND MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO PARCELPAL TECHNOLOGY INC. (THE “CORPORATION”), (B) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH REGULATION S UNDER THE U.S. SECURITIES ACT AND IN COMPLIANCE WITH LOCAL LAWS AND REGULATIONS, (C) IN ACCORDANCE WITH (1) RULE 144A UNDER THE U.S. SECURITIES ACT, OR (2) RULE 144 UNDER THE U.S. SECURITIES ACT AND, IN EACH CASE, IN COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS, OR (D) IN ANOTHER TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT (E.G., IN ACCORDANCE WITH SECTION 4(a)(1) OF THE U.S. SECURITIES ACT) OR ANY APPLICABLE STATE SECURITIES LAWS, PROVIDED, THAT, IN THE CASE OF TRANSFERS PURSUANT TO (C)(2) OR (D) ABOVE, A LEGAL OPINION SATISFACTORY TO THE CORPORATION MUST FIRST BE PROVIDED TO COMPUTERSHARE TRUST COMPANY OF CANADA (OR THE CORPORATION’S THEN-CURRENT TRANSFER AGENT) TO THE EFFECT THAT SUCH TRANSFER IS EXEMPT FROM REGISTRATION UNDER THE U.S. SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE “GOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN CANADA.
 
Certificates evidencing the Buyer Stock shall not be required to contain such legend or any other legend (i) while a registration statement covering the resale of such securities is effective under the Securities Act, or (ii) following any sale of such securities pursuant to Rule 144 (or other applicable resale exemption under the Securities Act if resold in the United States of America or applicable resale exemption under Canadian law, if resold in Canada) if the holder provides Buyer with a legal opinion (the cost of which shall be the sole responsibility of such Seller or such other holder of Buyer Stock and the documents upon which the legal opinion is based) reasonably acceptable to Buyer and its counsel to the effect that such securities can be sold or transferred under Rule 144 or other applicable resale exemption under the Securities Act or applicable Canadian securities law.
 
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ARTICLE VII
TAX MATTERS
 
Section 7.01    Tax Covenants.
 
(a)      Without the prior written consent of Buyer, which consent shall not be unreasonably withheld, denied, conditioned, or delayed, no Seller shall, to the extent it may affect or relate to the Company: (i) make, change, or rescind any Tax election; (ii) amend any Tax Return; (iii) take any position on any Tax Return; or (iv) take any action, omit to take any action, or enter into any other transaction that would have the effect of increasing the Tax liability or reducing any Tax asset of Buyer or the Company, in respect of any taxable period that begins after the Closing Date or, in respect of any taxable period that begins before and ends after the Closing Date (each such period, a “Straddle Period”), the portion of any Straddle Period beginning after the Closing Date.
 
(b)     All transfer, documentary, sales, use, stamp, registration, value added, and other such Taxes and fees (including any penalties and interest) incurred in connection with this Agreement and the other Transaction Documents shall be borne and paid by each Seller, as applicable, when due. Each Seller shall, at his own expense, timely file any Tax Return or other document with respect to such Taxes or fees (and Buyer shall cooperate with respect thereto as necessary).
 
(c)      Buyer shall prepare, or cause to be prepared, all Tax Returns required to be filed by the Company after the Closing Date with respect to any taxable period or portion thereof ending on or before the Closing Date and all Straddle Period Tax Returns. Any such Tax Return shall be prepared in a manner consistent with past practice (unless otherwise required by Law) and without a change of any election or any accounting method. Each Seller agrees and acknowledges that Buyer shall not have any liability for any Company or individual Seller related Taxes of any kind as a result of this Transaction, any amended Tax Return for a period prior to the Closing Date, or for any tax (including income, corporate, workers’ compensation or such other as may arise, be claimed or exist) liability as of and preceding the Closing Date, and each Seller shall indemnify the Buyer and be liable for any such tax that is claimed, incurred or have a nexus to any date prior to the Closing Date with respect to such Seller, the Company and [_______].
 
Section 7.02    Straddle Period. In the case of Taxes that are payable with respect to a Straddle Period, the portion of any such Taxes that are allocated to Pre-Closing Tax Periods (as defined in Section 7.04) for purposes of this Agreement shall be: (a) in the case of Taxes: (i) based upon, or related to, income, receipts, profits, wages, capital, or net worth; (ii) imposed in connection with the sale, transfer, or assignment of property; or (iii) required to be withheld, the amount of Taxes which would be payable if the taxable year ended with the Closing Date; and (b) in the case of other Taxes, the amount of such Taxes for the entire period multiplied by a fraction, the numerator of which is the number of days in the period ending on the Closing Date and the denominator of which is the number of days in the entire period.
 
Section 7.03    Termination of Existing Tax Sharing Agreements. Any and all existing Tax sharing agreements (whether written or not) binding upon the Company shall be terminated as of the Closing Date. After such date neither the Company, any Seller, nor any of such Seller’s Affiliates and his respective Representatives shall have any further rights or liabilities thereunder.
 
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Section 7.04    Tax Indemnification. Each Seller shall, jointly and severally, indemnify the Company, Buyer, and each Buyer Indemnitee (as defined in Section 8.01) and hold them harmless from and against (a) any loss, damage, liability, deficiency, Action, judgment, interest, award, penalty, fine, cost or expense of whatever kind (collectively, including reasonable attorneys’ fees and the cost of enforcing any right to indemnification under this Agreement, “Losses”) attributable to any breach of or inaccuracy in any representation or warranty made in Section Section 4.18; (b) any Loss attributable to any breach or violation of, or failure to fully perform, any covenant, agreement, undertaking, or obligation in ARTICLE VII; (c) all Taxes of the Company or relating to the business of the Company for all Pre-Closing Tax Periods (as defined below); (d) all Taxes of any member of an affiliated, consolidated, combined, or unitary group of which the Company (or any predecessor of the Company) is or was a member on or prior to the Closing Date by reason of a liability under Treasury Regulation Section 1.1502-6 or any comparable provisions of foreign, state, or local Law; and (e) any and all Taxes of any Person imposed on the Company arising under the principles of transferee or successor liability or by contract, relating to an event or transaction occurring before the Closing Date. In each of the above cases, together with any out-of-pocket fees and expenses (including attorneys’ and accountants’ fees) incurred in connection therewith, each Seller shall, jointly and severally, reimburse Buyer for any Taxes of the Company that are the responsibility of the Sellers pursuant to this Section 7.04 within ten business days after payment of such Taxes by Buyer or the Company. The term “Pre-Closing Tax Period” means any taxable period ending on or before the Closing Date and, with respect to any taxable period beginning before and ending after the Closing Date, the portion of such taxable period ending on and including the Closing Date.
 
Section 7.05    [No Section 336(e) Election. No Seller shall make an election under Section 336(e) of the Code with respect to the transactions contemplated by this Agreement.
 
Section 7.06    Cooperation and Exchange of Information. Each Seller and Buyer shall provide each other with such cooperation and information as either of them reasonably may request of the other in filing any Tax Return pursuant to this ARTICLE VII or in connection with any proceeding in respect of Taxes of the Company, including providing copies of relevant Tax Returns and accompanying documents. Each Seller and Buyer shall retain all Tax Returns and other documents in his or its possession relating to Tax matters of the Company for any Pre-Closing Tax Period (collectively, “Tax Records”) until the expiration of the statute of limitations of the taxable periods to which such Tax Records relate.
 
Section 7.07    Distributee Taxes. Each Seller and any Persons receiving Cash Consideration and/or Buyer Stock  in connection with the transactions consummated under this Agreement shall be solely liable for any income, capital gains and other Taxes, fees and costs associated with the sale of Shares and the acceptance of any portion of the Purchase Price which may result therefrom, as well as any Taxes, fees and costs associated with the resale of Buyer Stock when permissible.
 
Section 7.08     Survival. Notwithstanding anything in this Agreement to the contrary, the provisions of Section Section 4.18 and this ARTICLE VII shall survive for the full period of all applicable statutes of limitations (giving effect to any waiver, mitigation, or extension thereof) plus 90 days.
 
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 ARTICLE VIII
INDEMNIFICATION
 
Section 8.01    Indemnification by Sellers. Subject to the other terms and conditions of this Article ARTICLE VIII, each Seller, severally and not jointly, shall indemnify and defend each of Buyer and its Affiliates (including the Company) and their respective Representatives (collectively, the “Buyer Indemnitees”) against, and shall hold each of them harmless from and against, and shall pay and reimburse each of them for, any and all Losses incurred or sustained by, or imposed upon, the Buyer Indemnitees based upon, arising out of, with respect to, or by reason of:
 
(a)      any inaccuracy in or breach of any of the representations or warranties of such Seller contained in this Agreement or the other Transaction Documents;
 
(b)      any breach or non-fulfillment of any covenant, agreement, or obligation to be performed by such Seller pursuant to this Agreement or the other Transaction Documents;
 
(c)      any debts, secured or unsecured, liabilities, commitments, financial or non-financial obligations, Taxes, Encumbrances, or Actions, in each case known or unknown, absolute or contingent, accrued or unaccrued, matured or unmatured, or otherwise of the foregoing or of any such similar item of the Company which began, derived, concluded or can be traced back to a date that is on or prior to the Closing Date, including any liabilities set forth on Annex B.
 
Section 8.02    Indemnification by Buyer. Subject to the other terms and conditions of this Article ARTICLE VIII, Buyer shall indemnify and defend each Seller and his Affiliates and their respective Representatives (collectively, the “Seller Indemnitees”) against, and shall hold each of them harmless from and against, and shall pay and reimburse each of them for, any and all Losses incurred or sustained by, or imposed upon, the Seller Indemnitees based upon, arising out of, with respect to, or by reason of:
 
(a)      any inaccuracy in or breach of any of the representations or warranties of Buyer contained in this Agreement or the other Transaction Documents; or
 
(b)     any breach or non-fulfillment of any covenant, agreement, or obligation to be performed by Buyer pursuant to this Agreement.
 
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Section 8.03    Indemnification Procedures. Whenever any claim shall arise for indemnification hereunder, the party entitled to indemnification (the “Indemnified Party”) shall promptly provide written notice of such claim to the other party (the “Indemnifying Party”). In connection with any claim giving rise to indemnity hereunder resulting from or arising out of any Action by a Person who is not a party to this Agreement, the Indemnifying Party, at its sole cost and expense and upon written notice to the Indemnified Party, may assume the defense of any such Action with counsel reasonably satisfactory to the Indemnified Party. The Indemnified Party shall be entitled to participate in the defense of any such Action, with its counsel and at its own cost and expense. If the Indemnifying Party does not assume the defense of any such Action, the Indemnified Party may, but shall not be obligated to, defend against such Action in such manner as it may deem appropriate, including settling such Action, after giving notice of it to the Indemnifying Party, on such terms as the Indemnified Party may deem appropriate and no action taken by the Indemnified Party in accordance with such defense and settlement shall relieve the Indemnifying Party of its indemnification obligations herein provided with respect to any damages resulting therefrom. The Indemnifying Party shall not settle any Action without the Indemnified Party’s prior written consent (which consent shall not be unreasonably withheld, denied, conditioned, or delayed).
 
Section 8.04    Certain Limitations. The indemnification provided for in Section 8.01 and Section 8.02 shall be subject to the following limitations:
 
(a)      Sellers shall not be liable to the Buyer Indemnitees for indemnification under Section 8.01(a) until (i) the individual breach or liability or series of breaches or liabilities related to such Seller warranty breaches or indemnified liabilities, as applicable, exceeds $10,000 and (ii) the aggregate amount of all Losses in respect of indemnification under Section 8.01(a) exceeds $150,000 (the “Basket”), in which event Sellers shall be required to pay or be liable for all such Losses from the first dollar. The aggregate amount of all Losses for which Sellers shall be liable pursuant to Section 8.01(a) (other than in the case of any fraud, intentional misrepresentation, willful misconduct or criminal conduct by or on behalf of any Seller or the Company) shall not exceed 100% of the Purchase Price (the “Cap”).  Any payment to Buyer for Losses may be made in cash or shares of Buyer Stock by Seller(s) valued at the then current market price therefor in the sole discretion of the tending Seller(s); however, should the value of the shares of Buyer Stock not be sufficient to satisfy such Losses, then the balance of such Losses shall be payable by Seller in cash.
 
(b)     Buyer shall not be liable to the Seller Indemnitees for indemnification under Section 8.02(a) until (i) the individual breach or liability or series of breaches or liabilities related to such Buyer warranty breaches or indemnified liabilities, as applicable, exceeds $10,000 and (ii) the aggregate amount of all Losses in respect of indemnification under Section 8.02(a) exceeds the Basket, in which event Buyer shall be required to pay or be liable for all such Losses from the first dollar. The aggregate amount of all Losses for which Buyer shall be liable pursuant to Section 8.02(a) (other than in the case of any fraud, intentional misrepresentation, willful misconduct or criminal conduct by or on behalf of the Buyer) shall not exceed the Cap.
 
(c)      Notwithstanding the foregoing, the limitations set forth in Error! Reference source not found. and Error! Reference source not found. shall not apply to Losses based upon, arising out of, with respect to or by reason of any inaccuracy in or breach of any representation or warranty in Section 4.01, Section 3.03, Section 3.04, Section 3.05, Section 3.08, Section 3.11, Section 3.13, Section 4.01, Section 4.02, Section 4.13, Section 4.16, Section 4.20, Section 4.23, Section 5.01 and Section 5.06.
 
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(d)      For purposes of this ARTICLE VIII, any inaccuracy in or breach of any representation or warranty shall be determined without regard to any materiality, Material Adverse Effect or other similar qualification contained in or otherwise applicable to such representation or warranty.

(e)      Notwithstanding anything in this Agreement to the contrary and for the avoidance of doubt, none of the limitations on indemnification set forth in this Error! Reference source not found. shall apply to any indemnification claims arising out of, relating to or resulting from fraud, intentional misrepresentation, willful misconduct or criminal conduct.
 
(f)      An Indemnified Party shall not be entitled to indemnification for any punitive damages, except to the extent any such damages are payable to a third party in connection with a Third Party Claim or except in connection with any fraud, intentional misrepresentation, willful misconduct or criminal conduct.
 
(g)      The amount of any Losses for indemnification hereunder shall be calculated net of any amounts actually recovered by the Indemnified Party for such Losses under any applicable third party insurance policies (excluding self-insurance arrangements) or from any third party alleged to be responsible therefor (the “Collateral Sources”), less the costs and expenses incurred by the Indemnified Party to collect any such insurance proceeds or other amounts (including reasonable attorneys’ fees and expenses and, in the case of insurance proceeds, any deductibles or self‑insured retentions, any increases in premium or any retroactive premium adjustments directly related to obtaining such insurance proceeds) (collectively, the “Recovery Costs”), it being agreed and understood that no Indemnified Party shall have any obligation to seek recovery under any insurance policy prior to making any indemnification claim hereunder.  If the Indemnified Party actually receives any amounts from any Collateral Source for any Damages after receiving an indemnification payment from the Indemnifying Party in respect of such Damages, then the Indemnified Party shall promptly reimburse the Indemnifying Party for any such indemnification payment up to the amount actually received by the Indemnified Party from such Collateral Source, less the Recovery Costs.
 
Section 8.05    Survival. Subject to the limitations and other provisions of this Agreement, the representations and warranties contained herein (other than any representations or warranties contained in Section Section 4.18 which are subject to Article ARTICLE VII) and all related rights to indemnification shall survive the Closing and shall remain in full force and effect until the date that is 24 months from the Closing Date; provided, however, the representations and warranties in Section Section 3.01, Section 3.03, Section 3.04, Section 3.05, Section 3.08, Section 3.11, Section 3.13, Section Section 4.01, Section 4.02, Section 4.03,  Section 4.13, Section 4.16, Section 4.20, Section 4.23, Section 5.01 and Section 5.06 shall survive indefinitely. Subject to Article ARTICLE VII, all covenants and agreements of the parties contained herein shall survive the Closing indefinitely unless another period is explicitly specified herein. Notwithstanding the foregoing, any claims which are timely asserted in writing by notice from the non-breaching party to the breaching party prior to the expiration date of the applicable survival period shall not thereafter be barred by the expiration of the relevant representation or warranty and such claims shall survive until finally resolved.
 
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Section 8.06    Tax Claims. Notwithstanding any other provision of this Agreement, the control of any claim, assertion, event, or proceeding in respect of Taxes of the Company (including, but not limited to, any such claim in respect of a breach of the representations and warranties in Section 4.18 hereof or any breach or violation of or failure to fully perform any covenant, agreement, undertaking, or obligation in ARTICLE VII) shall be governed exclusively by ARTICLE VII hereof.
 
Section 8.07    Sandbagging. The representations, warranties and covenants of the Sellers and relating to the Company, and Buyer’s right to indemnification with respect thereto, shall not be affected or deemed waived by reason of any investigation made by or on behalf of the Buyer or by reason of the fact that the Buyer knew that any such representation or warranty is, was or might be inaccurate or by reason of the Buyer’s waiver of any condition set forth in Sections 2.04 and 2.05, as the case may be.
 
Section 8.08    Cumulative Remedies. The rights and remedies provided for in this ARTICLE VIII (and in ARTICLE VII) are cumulative and are in addition to and not in substitution for any other rights and remedies available at law or in equity or otherwise.
 
ARTICLE IX
MISCELLANEOUS
 
Section 9.01    Expenses. All costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs and expenses.
 
Section 9.02     Notices. All notices, requests, consents, claims, demands, waivers, and other communications hereunder shall be in writing and shall be deemed to have been given: (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or email of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next business day if sent after normal business hours of the recipient; or (d) on the fifth (5th) Business Day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid, if sent to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 8.02):
 
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If to Seller Representative:
 
[ ]
[address]
[city/state]
Email:
 
 
with a mandatory copy (which shall not constitute notice) to:
 
Clark Hill PLC
1055 West Seventh Street, Suite 2400
Los Angeles, CA 90017
Attn: Randolf Katz
Email: rkatz@clarkhill.com
 
 
If to Buyer:
 
ParcelPal Logistics Inc.
1111 Melville Street, Suite 620
Vancouver, BC V6E 3V6
Attn: Chief Executive Officer
Email: rich@parcelpal.com]
 
 
with a mandatory copy (which shall not constitute notice) to:
 
Rimon, P.C.
245 Park Avenue, 39th FL
New York, NY 10167
Attn: Theodore Ghorra
Email: theodore.ghorra@rimonlaw.com
 
Section 9.03    Interpretation; Headings. This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted. The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.
 
Section 9.04    Severability. If any term or provision of this Agreement is invalid, illegal, or unenforceable in any jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other term or provision of this Agreement.
 
Section 9.05    Entire Agreement. This Agreement and the other Transaction Documents constitute the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein and therein, and supersede all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter. In the event of any inconsistency between the statements in the body of this Agreement and those in the other Transaction Documents, any exhibits, and the Disclosure Schedules (other than an exception expressly set forth as such in the Disclosure Schedules), the statements in the body of this Agreement will control.
 
Section 9.06    Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Neither party may assign its rights or obligations hereunder without the prior written consent of the other party, which consent shall not be unreasonably withheld, denied, conditioned, or delayed. No assignment shall relieve the assigning party of any of its or his obligations hereunder.
 
Section 9.07    Amendment and Modification; Waiver. This Agreement may only be amended, modified, or supplemented by an agreement in writing signed by each party hereto. No waiver by any party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. No failure to exercise, or delay in exercising, any right or remedy arising from this Agreement shall operate or be construed as a waiver thereof. No single or partial exercise of any right or remedy hereunder shall preclude any other or further exercise thereof or the exercise of any other right or remedy.
 
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Section 9.08    Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.
 
(a)      All matters arising out of or relating to this Agreement shall be governed by and construed in accordance with the internal laws of the State of New York without giving effect to any choice or conflict of law provision or rule (whether of the State of New York or any other jurisdiction). Any legal suit, action, proceeding, or dispute arising out of or related to this Agreement, the other Transaction Documents, or the transactions contemplated hereby or thereby may be instituted in the federal courts of the United States of America or the courts of the State of New York in each case located in the City of New York and County of New York, and each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action, proceeding, or dispute.
 
(b)     EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL ACTION, PROCEEDING, CAUSE OF ACTION, OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, INCLUDING ANY EXHIBITS AND SCHEDULES ATTACHED TO THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT: (I) NO REPRESENTATIVE OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION; (II) EACH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER; (III) EACH PARTY MAKES THIS WAIVER KNOWINGLY AND VOLUNTARILY; AND (IV) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
 
Section 9.09    Appointment of Seller Representative.
 
(a)      Each Seller, by virtue of the approval and adoption of this Agreement, hereby irrevocably constitutes and appoints the Seller Representative (and by execution and delivery of this Agreement, the Seller Representative accepts such appointment) as his agent and attorney-in-fact for and on behalf of such Seller, with full power of substitution, to act in the same, place and stead of such Seller, as applicable, with respect to the matters contemplated by Section 9.09(b) hereof.
 
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(b)      The Seller Representative shall have such powers and authority as are necessary or appropriate to carry out the functions assigned to him under this Agreement and the Transaction Documents.  All actions, notices, communications and determinations by the Seller Representative to carry out such functions shall conclusively be deemed to have been authorized by, and shall be binding upon, the Sellers.  Neither the Seller Representative nor any of his representatives or affiliates will have any liability to the Sellers with respect to actions taken or omitted to be taken by the Seller Representative in such capacity (or any of his representatives or affiliates in connection therewith), except with respect to the Seller Representative’s gross negligence or willful misconduct.  The Seller Representative shall be entitled to engage such counsel, experts and other agents and consultants as he shall deem necessary in connection with exercising his powers and performing his function hereunder and (in the absence of bad faith on the part of the Seller Representative) shall be entitled to conclusively rely on the opinions and advice of such Persons.  All actions, decisions, instructions and notices of the Seller Representative taken, made or provided in accordance with this Agreement and any ancillary agreements shall be conclusive and binding upon the Sellers to the same extent as if such Sellers had taken such action, made such decision or provided or received such instruction or notice directly.  Buyer may rely (without investigation) upon any representation or action taken by the Seller Representative in connection with this Agreement, any ancillary agreements, all certificates, documents or instruments delivered pursuant hereto or thereto and the transactions contemplated hereby and thereby as being authorized by the Sellers, and no party hereto shall have any cause of action against Buyer or the Company for any action taken by Buyer or the Company in reliance upon any such decision, consent, instruction or action, including, for the avoidance of doubt, any payments made by Buyer in accordance with the allocation and wire instructions set forth on Section 1.02 of the Disclosure Schedules.
 
(c)      The Seller Representative shall have the right, in his sole discretion, to recover from the Sellers any documented reasonable out-of-pocket expenses incurred in the performance of his duties hereunder, including those resulting from the engagement of financial advisors, attorneys, auditors and other advisors and agents assisting in the assessment of arbitration, litigation and settlement of any disputes arising under this Agreement.
 
Section 9.10    Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by email or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.
 
[SIGNATURE PAGE FOLLOWS]


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Exhibit 99.5

Certain identified information has been excluded from the exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed, and are identified by [ ]; or acted as a placeholder pending final iteration of the document
 
Exclusive Services Agreement
 
THIS SERVICES AGREEMENT (this “Agreement”), dated as of August 31, 2021 (the “Effective Date”), is by and between [TRUCKING], a Nevada corporation, with offices located at [ ] (“Trucking”) and [CORP], a Nevada corporation, with offices located at [ ] (“Corp”; and, together with Trucking, the “Parties”, and each a “Party”).
 
WHEREAS, Trucking has the capability and capacity to provide certain logistics management services and supply chain solutions, including last mile delivery services, and has continuously been providing such services to Corp since 2019;
 
WHEREAS, Corp has received certain logistics management services and supply chain solutions, including last mile delivery services, including last mile delivery services, from Trucking since 2019, and desires to continue the receipt of such services from Trucking, and Trucking is willing to continue to provide such services, under the terms and conditions set forth herein;
 
WHEREAS, Corp has the capability and capacity to continue to provide certain administrative, operational and support services to Trucking; and
 
WHEREAS, Trucking desires to retain Corp to provide such administrative, operational and support services, and Corp is willing to continue to provide such services to Trucking, under the terms and conditions set forth herein.
 
NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Trucking and Corp agree as follows:
 
1.        Services.
 
1.1          Trucking shall provide to Corp the services (the “Trucking Services”) set forth on Exhibit A hereto. Additions and deletions to the Trucking Services shall be made only if signed by the Trucking Contract Manager and the Corp Contract Manager, appointed pursuant to 2.1(a) and 3.1, respectively.
 
1.2          Corp shall provide to Trucking the services (the “Corp Services”; and, together with the Trucking Services, the “Services”) set forth on Exhibit B hereto. Additions and deletions to the Corp Services shall be made only if signed by the Trucking Contract Manager and the Corp Contract Manager.
 
2.        Exclusivity. Corp hereby retains, and agrees to cause its affiliates and successors to retain, Trucking as its exclusive provider of the Trucking Services in the state of Utah (the “Territory”).
 

3.        Obligations of the Parties.
 
3.1          Trucking shall designate employees or contractors that it determines, in its sole discretion, to be capable of filling the following positions:
 
(a)          A primary contact to act as its authorized representative with respect to all matters pertaining to this Agreement (the “Trucking Contract Manager”).
 
(b)          A number of employees or agents that it deems sufficient and capable to perform the Trucking Services set forth on Exhibit A to the same or better performance standards that the Trucking Services were performed during the 12-month period immediately prior to the Effective Date (collectively, with the Trucking Contract Manager, the “Trucking Representatives”).
 
3.2          Corp Shall designate employees or contractors that it determines, in its sole discretion, to be capable of filling the following positions:
 
(a)          One or more primary contacts (set forth in Exhibit D hereto) to act as its authorized representative with respect to all matters pertaining to this Agreement (the “Corp Contract Manager”; and, together with the Trucking Contract Manager, each, a “Contract Manager”).
 
(b)          A number of employees or agents that it deems sufficient and capable to perform the Corp Services set forth on Exhibit B to the same or better performance standards that the Corp Services were performed during the 12-month period immediately prior to the Effective Date (collectively, with the Corp Contract Manager, “Corp Representatives”; and, together with the Trucking Representatives, the “Provider Representatives,” each, a “Provider Representative”).
 
3.3          Neither Party shall make changes to its respective Provider Representative except:
 
(a)          Following Notice to the other Party.
 
(b)          Upon the resignation, termination, death, or disability of such Party’s existing Provider Representative.
 
(c)          At the reasonable request of the other Party, and  by mutual agreement, in which case the non-requesting Party shall use reasonable efforts to appoint a replacement at the earliest time it determines to be commercially viable.
 
3.4          Each Party shall:
 
(a)          Require that its respective Contract Manager respond promptly to any reasonable requests from the other Party for instructions, information, or approvals required by the other Party to provide the relevant Services.
 
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(b)          Cooperate with the other Party in its performance of the relevant Services and provide access to its premises, employees, contractors, information, documents, data and equipment, as required, to enable the other Party to provide the relevant Services.
 
(c)          Take all steps necessary, including obtaining any required licenses or consents, to prevent Party-caused delays in the other Party’s provision of the relevant Services.
 
3.5          Each Party shall maintain complete and accurate records relating to its respective provision of the Services. During the Term and for a period of five (5) years thereafter, upon the other Party’s written request, the non-requesting Party shall allow the other Party or its representatives to inspect and make copies of such records in connection with the provision of the relevant Services; provided that the requesting Party provides the non-requesting Party with at least five (5) business days’ advance written notice of the planned inspection, any such inspection shall take place during regular business hours solely at the requesting Party’s expense and any such inspection shall occur no more than once per 12-month period.
 
4.          Fees and Expenses.
 
4.1          In consideration of the provision of each Party’s the Services to each other and the rights granted under this Agreement, each Party shall pay the fees set forth on Exhibit C hereto; provided, however, that Corp shall increase the fees payable to Trucking for the Trucking Services in an amount equal to any increase in fees that Corp receives from its customers related to the Trucking Services in the Territory. Payment to the provider Party of such fees and the reimbursement of expenses pursuant to this Section 4 shall constitute payment in full for the performance of the Services. Unless otherwise provided in Exhibit C, such fees and the reimbursement of such expenses will be payable within 30 days of receipt by a Party of an invoice from the provider Party.  Corp agrees to remit to Trucking all fees and payments due to Trucking hereunder within no more than 3 business days of receipt from its customer(s), as may be demonstrable through Amazon Payee Central or otherwise.
 
4.2          Each Party shall reimburse the other Party for all reasonable expenses incurred in connection with delivery of the Services, if such expenses have been pre-approved, in writing (including via email) by the Party’s Contract Manager, within 30 days of receipt by the Party of an invoice from the provider Party accompanied by receipts and reasonable supporting documentation.
 
4.3          Each Party shall be responsible for all sales, use, and excise taxes, and any other similar taxes, duties, and charges of any kind imposed by any federal, state, or local governmental entity on any amounts payable by such Party hereunder; provided that, in no event, shall a Party pay or be responsible for any taxes imposed on, or with respect to, the other Party’s income, revenues, gross receipts, personnel, or real or personal property, or other assets.
 
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4.4          Except for invoiced payments that a Party has successfully disputed, all late payments shall bear interest at the lesser of (a) the rate of 1% per month and (b) the highest rate permissible under applicable law, calculated daily and compounded monthly. The late-paying Party shall also reimburse the late-receiving Party for all reasonable costs incurred in collecting any late payments, including, without limitation, attorneys’ fees. In addition to all other remedies available under this Agreement or at law (which Trucking does not waive by the exercise of any rights hereunder), Trucking shall be entitled to suspend the provision of the Trucking Services if Corp fails to pay any undisputed amounts when due hereunder and such failure continues for twenty (20) calendar days following written notice thereof.
 
5.        Limited Warranty and Limitation of Liability.
 
5.1          Each Party warrants that it shall perform its applicable Services:
 
(a)          In accordance with the terms and subject to the conditions set forth in this Agreement and Exhibits A and B.
 
(b)          Using personnel of commercially reasonable skill, experience, and qualifications.
 
(c)          In a timely, workmanlike, and professional manner in accordance with generally recognized industry standards for similar services.
 
5.2          The provider Party’s sole and exclusive liability and the other Party’s sole and exclusive remedy for breach of this limited warranty shall be as follows:
 
(a)          The provider Party shall use reasonable commercial efforts to promptly cure any such breach; provided that, if the provider Party cannot cure such breach within a reasonable time (but no more than 30 calendar days) after the non-breaching Party’s written notice of such breach, the non-breaching Party may, at its option, terminate the Agreement by serving written notice of termination in accordance with Section 8.2; provided, however, that, if such breach is not capable of being cured within such 30-day period and the provider Party commences such cure with such 30-day period and thereafter uses all commercially reasonable efforts to continue to cure such breach, then the non-breaching Party does not have the option to terminate this Agreement during such up-to-30-day period or such extended cure period or thereafter if the breach has been so cured; however, in such situation, the cure period shall not extend beyond 60 days unless the non-breaching Party agrees in writing to extend the cure period further.
 
(b)          The foregoing remedy shall not be available unless the non-breaching Party provides written notice of such breach within 30 days after delivery of the applicable Services.
 
5.3          NEITHER PARTY MAKES ANY WARRANTIES EXCEPT FOR THOSE PROVIDED IN SECTION 5.1, ABOVE. ALL OTHER WARRANTIES, EXPRESS AND IMPLIED, ARE EXPRESSLY DISCLAIMED.
 
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6.          [Reserved].
 
7.          Confidentiality. From time to time during the Term of this Agreement, either Party (as the “Disclosing Party”) may disclose or make available to the other Party (as the “Receiving Party”), non-public, proprietary, and confidential information of Disclosing Party that, if disclosed in writing or other tangible form is clearly labeled as “confidential,” or if disclosed orally, is identified as confidential when disclosed and within 30 days thereafter, is summarized in writing and confirmed as confidential (“Confidential Information”); provided, however, that Confidential Information does not include any information that: (a) is or becomes generally available to the public other than as a result of Receiving Party’s breach of this Section 7; (b) is or becomes available to the Receiving Party on a non-confidential basis from a third-party source, provided that such third party is not and was not prohibited from disclosing such Confidential Information; (c) was in Receiving Party’s possession prior to Disclosing Party’s disclosure hereunder; or (d) was or is independently developed by Receiving Party without using any Confidential Information.  The name of Corp’s largest customer as of the Effective Date shall be deemed and is agreed and acknowledged as being included as Confidential Information, except as may need to be disclosed in the normal course of operations internally; and it shall also not be deemed a breach of the confidentiality provision in this Agreement or in such other agreement between or among the parties (including ParcelPal Logistics Inc.) wherein such customer name is required to be disclosed by operation or rule or regulation of the Securities and Exchange Commission or at request of the SEC or CSE, as the case may be.  The Receiving Party shall: (x) protect and safeguard the confidentiality of the Disclosing Party’s Confidential Information with at least the same degree of care as the Receiving Party uses to protect its own Confidential Information, but in no event with less than a commercially reasonable degree of care; (y) not use the Disclosing Party’s Confidential Information, or permit it to be accessed or used, for any purpose other than to exercise its rights or perform its obligations under this Agreement; and (z) not disclose any such Confidential Information to any person or entity, except to members of the Receiving Party’s Group (as defined hereinbelow) who need to know the Confidential Information to assist the Receiving Party, or act on its behalf, to exercise its rights or perform its obligations under this Agreement.
 
If the Receiving Party is required by applicable law or legal process to disclose any Confidential Information, it shall, prior to making such disclosure, use commercially reasonable efforts to notify Disclosing Party of such requirements to afford Disclosing Party the opportunity to seek, at Disclosing Party’s sole cost and expense, a protective order or other remedy. For purposes of this Section 7 and Section 8.4 only, Receiving Party’s Group shall mean the Receiving Party’s affiliates and its or their employees, officers, directors, stockholders, agents, independent contractors, attorneys, accountants, and financial advisors.
 
8.          Term, Termination, and Survival.
 
8.1          This Agreement shall commence as of the Effective Date and shall continue thereafter for a period of five (5) years, unless sooner terminated pursuant to Section 8.2 or Section 8.3.
 
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8.2          Either Party may terminate this Agreement, effective upon written notice to the other Party (the “Defaulting Party”), if the Defaulting Party:
 
(a)          Materially breaches this Agreement, and such breach is incapable of cure, or with respect to a material breach capable of cure, the Defaulting Party does not cure such breach within 30 days after receipt of written notice of such breach, unless the non-Defaulting Party agrees in writing to extend the cure period.
 
(b)          Becomes insolvent or admits its inability to pay its debts generally as they become due.
 
(c)          Becomes subject, voluntarily or involuntarily, to any proceeding under any domestic or foreign bankruptcy or insolvency law, which proceeding is not fully stayed within 20 business days or is not dismissed or vacated within 60 days after filing.
 
(d)          Is dissolved or liquidated or takes any corporate action for such purpose.
 
(e)          Makes a general assignment for the benefit of creditors.
 
(f)          Has a receiver, trustee, custodian, or similar agent appointed by order of any court of competent jurisdiction to take charge of or sell any material portion of its property or business, which appointment is not dismissed or vacated within 60 days after appointment.
 
8.3          Notwithstanding anything to the contrary in Section 8.2(a), Trucking may terminate this Agreement before the expiration date of the Term on written notice if Corp fails to pay any amount when due hereunder: (a) and such failure continues for 30 days after Corp’s receipt of written notice of nonpayment; provided, however, that such failure shall not include amounts that Corp is disputing in good faith until 30 days following the final resolution thereof; or (b) more than three (3) times in any 12-month period; provided, however, that should such dispute not be resolved within 60 calendar days following notice to Corp of such dispute, then Corp shall escrow the amounts in dispute until such matter is resolved between the parties or by such court of competent jurisdiction. Additionally, no such failure shall be included in the “three (3) times” calculation for so long as Corp is disputing such amounts in good faith until final resolution thereof.
 
8.4          The rights and obligations of the Parties set forth in this Section 8.4 and in Sections 2, 4, 9, 10, 11, 12, 13, 15, 16, 17, 19, 20, 21, 22 and 23, and any right or obligation of the Parties in this Agreement which, by its nature, should survive termination or expiration of this Agreement, will survive any such termination or expiration of this Agreement, and with respect to Confidential Information that constitutes a trade secret under applicable law, the rights and obligations set forth in Section 7 hereof will survive such termination or expiration of this Agreement until, if ever, such Confidential Information loses its trade secret protection other than due to an act or omission of the Receiving Party or the Receiving Party’s Group.
 
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9.        Limitation of Liability.
 
EXCEPT IN CONNECTION WITH A BREACH UNDER SECTION 20 HEREOF, IN NO EVENT SHALL A PARTY BE LIABLE TO THE OTHER PARTY OR TO ANY THIRD PARTY FOR ANY LOSS OF USE, REVENUE, OR PROFIT OR LOSS OF DATA OR DIMINUTION IN VALUE, OR FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, EXEMPLARY, SPECIAL, OR PUNITIVE DAMAGES WHETHER ARISING OUT OF BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE), OR OTHERWISE, REGARDLESS OF WHETHER SUCH DAMAGE WAS FORESEEABLE AND WHETHER OR NOT SERVICE PROVIDER HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, AND NOTWITHSTANDING THE FAILURE OF ANY AGREED OR OTHER REMEDY OF ITS ESSENTIAL PURPOSE.
 
10.      Insurance. During the term of this Agreement and for a period of 12 months thereafter, Corp shall, at its own expense, maintain and carry insurance with financially sound and reputable insurers, in full force and effect that includes, but is not limited to, commercial general liability in a sum no less than $1,000,000 per occurrence and $2,000,000 in the general aggregate; Business Automobile Liability insurance (also known as “motor fleet” insurance) with a limit of not less than $1,000,000 per occurrence for bodily injury and property damage combined; and Cargo Legal Liability insurance (or similar) with limits sufficient to cover liability for loss or damage to cargo transported by your company, and in no event less than $25,000 per loss. Upon Trucking’s request, Corp shall provide Trucking with a certificate of insurance from Corp’s insurer evidencing the insurance coverage specified in this Agreement. The certificate of insurance shall name Trucking as an additional insured. Trucking shall provide Corp with 30 days’ advance written notice in the event of a cancellation or material change in Trucking’s insurance policy. Except where prohibited by law, Corp shall require its insurer to waive all rights of subrogation against Trucking’s insurers and Trucking.
 
11.       Entire Agreement. This Agreement, including and together with any related exhibits, schedules, attachments, and appendices, constitutes the sole and entire agreement of the Parties with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, regarding such subject matter.
 
12.      Notices. All notices, requests, consents, claims, demands, waivers, and other communications under this Agreement (each, a “Notice”, and with the correlative meaning “Notify”) must be in writing and addressed to the other Party at its address set forth below (or to such other address that the receiving Party may designate from time to time in accordance with this Section). All Notices shall be deemed to have been given: (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or email of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next business day if sent after normal business hours of the recipient; or (d) on the fifth (5th) Business Day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid, if sent to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 12):
 
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Notice to Trucking:
[ ]
 
Attention: CEO
Email: [ ]
   
with a mandatory copy to:
ParcelPal Logistics, Inc.
305 – 190 Alexander Street
Vancouver, BC V6A 2S5
   
  Attn: Chief Executive Officer
  Email: rich@parcelpal.com
   
and (which shall not constitute notice) to:
Rimon, P.C.
245 Park Avenue, 39th Floor
New York, NY 10167
Attn: Theodore Ghorra
Email: theodore.ghorra@rimonlaw.com
   
Notice to Corp:
[ ]
 
Attention: [ ]
   
and with a mandatory copy (which shall not constitute notice) to:
Clark Hill PLC
   
  1055 West Seventh Street, Suite 2400
   
  Los Angeles, CA 90017
   
  Attn: Randolf Katz
   
  Email: rkatz@clarkhill.com

13.      Severability. If any term or provision of this Agreement is found by a court of competent jurisdiction to be invalid, illegal, or unenforceable in any jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon a determination that any term or provision is invalid, illegal, or unenforceable, the court may modify this Agreement to affect the original intent of the Parties as closely as possible in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.
 
14.      Amendments. No amendment to or modification of or rescission, termination, or discharge of this Agreement is effective unless it is in writing and signed by an authorized representative of each Party.
 
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15.      Waiver. No waiver by any Party of any of the provisions of this Agreement shall be effective unless explicitly set forth in writing and signed by the Party so waiving. Except as otherwise set forth in this Agreement, no failure to exercise, or delay in exercising, any right, remedy, power, or privilege arising from this Agreement shall operate or be construed as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power, or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power, or privilege.
 
16.      Assignment. Neither Party may assign, transfer, delegate, or subcontract any of its rights or delegate any of its obligations under this Agreement, including any assignment or transfer by contract or operation of law, without the prior written consent of the other Party, which consent shall not be unreasonably withheld, delayed, denied, or conditioned. Any purported assignment or delegation in violation of this Section 16 shall be null and void. No assignment or delegation shall relieve the assigning Party of any of its obligations under this Agreement. Notwithstanding the above, either Party may assign or transfer any of its rights or delegate or subcontract any of its obligations to any affiliate or to any person acquiring all or substantially all of such Party’s assets, unless such person is a competitor to the other Party, upon notice to the other Party, but without obtaining the other Party’s consent.
 
17.      Successors and Assigns. This Agreement is binding on and inures to the benefit of the Parties to this Agreement and their respective permitted successors, assignees, delegates, and subcontractors.
 
18.      Relationship of the Parties. The relationship between the Parties is that of independent contractors. The details of the method and manner for performance of the Services by each Party shall be under its own respective control, the other Party being interested only in the results thereof. Each Party shall be solely responsible for supervising, controlling, and directing the details and manner of the completion of its relevant Services.  Nothing in this Agreement shall give a Party the right to instruct, supervise, control, or direct the details and manner of the completion of the other Party’s Services. Nothing contained in this Agreement shall be construed as creating any agency, partnership, joint venture, or other form of joint enterprise, employment, or fiduciary relationship between the Parties, and neither Party shall have authority to contract for or bind the other Party in any manner whatsoever.
 
19.      No Third-Party Beneficiaries. This Agreement benefits solely the Parties to this Agreement and their respective permitted successors, assignees, parent entities (whether now or as may subsequently become), delegates, and subcontractors and nothing in this Agreement, express or implied, confers on any other person or entity any legal or equitable right, benefit, or remedy of any nature whatsoever under or by reason of this Agreement.
 
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20.      Non-Interference; Non-Competition.  Corp acknowledges, agrees, and understands that Trucking is reliant on Corp and its primary customer (as of the Effective Date) for its main source of business and revenue. Corp further acknowledges, agrees and understands that any interference (tortious or otherwise), interruption, disruption, discontinuance, suspension or other alteration of the relationship, business or revenues generated as a result thereof, whether pursuant to the underlying contract between Corp and its largest customer (as of the Effective Date) or otherwise, would cause a material adverse change to Trucking, materially harm its business and adversely impact ParcelPal’s publicly traded securities, among other serious consequences to Trucking and ParcelPal. The Parties hereby agree that the occurrence of any of the activities or events set forth in the preceding sentence shall be deemed to be a material breach of this Agreement, and subject Corp to any and all remedies available to Trucking, at law and in equity, without limitation.  Therefore, Corp covenants and agrees to not, directly or indirectly, interfere (tortiously or otherwise), interrupt, disrupt, discontinue, suspend, adversely alter, cease to do business or terminate its contract with its largest customer, or otherwise cause or induce its largest customer or any other party to engage in any of the foregoing, or willfully or intentionally breach, cause the breach of or permit the breach of, the contract between Corp and its largest customer. For its part, neither Trucking nor ParcelPal Logistics Inc. will compete with or establish a third-party company to compete with Corp in the geographic locales of Utah in which Trucking is currently providing the Trucking Services solely as it relates to Corp’s largest (current) customer.
 
Trucking acknowledges, agrees, and understands that Corp is reliant on its primary customer (as of the Effective Date) for its main source of business and revenue. Trucking further acknowledges, agrees and understands that any interference (tortious or otherwise), interruption, disruption, discontinuance, suspension or other alteration of the relationship, business or revenues generated between Corp and its largest (current) customer (as of the Effective Date), which is willful and directly attributable to Trucking or its parent entity from and after the Effective Date, would cause a material adverse change to Corp, materially harm its business and adversely impact the value of Corp to its equity holders, among other serious consequences to Trucking and ParcelPal. The Parties hereby agree that the occurrence of any of the activities or events set forth in the preceding sentence shall be deemed to be a material breach of this Agreement, and subject Trucking to any and all remedies available to Corp, at law and in equity, without limitation.  Therefore, Trucking covenants and agrees to not, directly or indirectly, interfere (tortiously or otherwise), interrupt, disrupt, discontinue, suspend, adversely alter, cease to do business or terminate this Agreement (except in accordance with the provisions of this Agreement), or otherwise take (or refrain from taking) any actions that, directly or indirectly, could cause or induce Corp’s largest (current) customer (as of the Effective Date) to terminate or not to renew Corp’s agreement with such customer.
 
21.       Choice of Law. This Agreement and all related documents including all exhibits attached hereto, and all matters arising out of or relating to the making or performance of this Agreement, whether sounding in contract, tort, or statute are governed by, construed in accordance with and enforced under the laws of the State of New York, United States of America (including its statutes of limitations and N.Y. Gen. Oblig. Law § 5-1401), without giving effect to the conflict of laws provisions thereof to the extent such principles or rules would require or permit the application of the laws of any jurisdiction other than those of the State of New York.
 
22.      Choice of Forum. Each Party irrevocably and unconditionally agrees that it will not commence any action, litigation, or proceeding of any kind whatsoever against the other Party in any way arising from or relating to this Agreement, including all exhibits, schedules, attachments, and appendices attached to this Agreement, and all contemplated transactions, including, but not limited to, contract, equity, tort, fraud, and statutory claims, in any forum other than the US District Court for the Southern District of New York or if such court does not have subject matter jurisdiction, the courts of the State of New York sitting in the Borough of Manhattan, and any appellate court from any thereof. Each Party irrevocably and unconditionally submits to the exclusive jurisdiction of such courts and agrees to bring any such action, litigation, or proceeding only in the US District Court for the Southern District of New York or, if such court does not have subject matter jurisdiction, the courts of the State of New York sitting in the Borough of Manhattan. Each Party agrees that a final judgment in any such action, litigation, or proceeding is conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.
 
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23.       WAIVER OF JURY TRIAL. EACH PARTY ACKNOWLEDGES THAT ANY CONTROVERSY THAT MAY ARISE UNDER THIS AGREEMENT, INCLUDING EXHIBITS, SCHEDULES, ATTACHMENTS, AND APPENDICES ATTACHED TO THIS AGREEMENT, IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT, INCLUDING ANY EXHIBITS, SCHEDULES, ATTACHMENTS, OR APPENDICES ATTACHED TO THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED HEREBY.
 
24.      Counterparts. This Agreement may be executed in counterparts, each of which is deemed an original, but all of which together are deemed to be one and the same agreement. Notwithstanding anything to the contrary in Section 12, a signed copy of this Agreement delivered by facsimile, email, or other means of electronic transmission is deemed to have the same legal effect as delivery of an original signed copy of this Agreement.
 
25.      Force Majeure. No Party shall be liable or responsible to the other Party, nor be deemed to have defaulted under or breached this Agreement, for any failure or delay in fulfilling or performing any term of this Agreement (except for any obligations of Corp to make payments to Trucking hereunder), when and to the extent such failure or delay is caused by or results from acts beyond the impacted party’s (“Impacted Party”) reasonable control, including, without limitation, the following force majeure events (“Force Majeure Event(s)”): (a) acts of God; (b) flood, fire, earthquake, epidemics or explosion; (c) war, invasion, hostilities (whether war is declared or not), terrorist threats or acts, riot or other civil unrest; (d) government order, law, or actions; (e) embargoes or blockades in effect on or after the date of this Agreement; (f) national or regional emergency; and (g) strikes, labor stoppages or slowdowns, or other industrial disturbances.
 
The Impacted Party shall give notice within 30 days of the Force Majeure Event to the other Party, stating the occurrence with specificity as to its details and the period of time the occurrence is expected to continue. The Impacted Party shall use diligent efforts to end the failure or delay and ensure the effects of such Force Majeure Event are minimized. The Impacted Party shall resume the performance of its obligations as soon as reasonably practicable after the removal of the cause. In the event that the Impacted Party’s failure or delay remains uncured for a period of 30 consecutive days following written notice given by it under this Section 24, the other Party may thereafter terminate this Agreement upon 15 days’ written notice.
 
[SIGNATURE PAGE FOLLOWS]
 

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Exhibit 99.6

NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
 
THIS NOTE DOES NOT REQUIRE PHYSICAL SURRENDER OF THE NOTE IN THE EVENT OF A PARTIAL REDEMPTION OR CONVERSION.  AS A RESULT, FOLLOWING ANY REDEMPTION OR CONVERSION OF ANY PORTION OF THIS NOTE, THE OUTSTANDING PRINCIPAL SUM REPRESENTED BY THIS NOTE MAY BE LESS THAN THE PRINCIPAL SUM AND ACCRUED INTEREST SET FORTH BELOW.

UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE January 15, 2022 (OR March 15, 2022 UNDER U.S. LAW, AS APPLICABLE).

8% FIXED CONVERTIBLE PROMISSORY NOTE
 
OF
 
PARCELPAL LOGISTICS INC.

Issuance Date: September 15, 2021
 
Total Face Value of Note: $2,300,000
Aggregate Consideration: $2,185,000
(payable in tranches as set forth below)
Original Issue Discount: 5%
 
THIS NOTE is a duly authorized Fixed Convertible Promissory Note of ParcelPal Logistics Inc. a corporation duly incorporated under the laws of the Province of British Columbia (the “Company”), designated as the Company's 8% Fixed Convertible Promissory Note in the principal amount of $2,300,000 (the “Note”). This Note will become effective only upon execution by both parties and delivery of the payment of the Initial Consideration by the Holder (the “Effective Date”). All references to “dollars” or “$” or “US$” in this Note are United States-dollar denominated references.


FOR VALUE RECEIVED, the Company hereby promises to pay to the order of Tangiers Global, LLC or its registered assigns or successors-in-interest (the “Holder”) the principal sum of $2,300,000 (the “Total Face Value of Note) or such lesser amount of aggregate Consideration, defined below, plus the applicable OID thereon (as provided herein) drawn by the Company hereunder and to pay “guaranteed” interest at a rate of 8% of the Principal Sum (as defined below), to the extent such Principal Sum and “guaranteed” interest and any other interest, fees, liquidated damages and/or items due to Holder herein have not been repaid or converted into the Company's common shares (the “Common Shares”), in accordance with the terms hereof. The sum of $700,000 (the “Initial Consideration”) shall be remitted and delivered to the Company, and $30,875 (the “Initial Original Issue Discount”) shall be retained by the Holder through an original issue discount (the “OID”) for due diligence and legal bills related to this transaction.  The OID is set at 5% of any Consideration, defined below, paid. The Company covenants that within three months of the Effective Date of the Note, it shall utilize approximately $700,000 of the proceeds in the manner set forth on Schedule 1, attached hereto (the “Use of Proceeds”), and shall promptly provide evidence thereof to Holder, in sufficient detail as reasonably requested by Holder.
 
The Holder agrees to pay additional principal consideration, together with the 5% OID  (each of the Initial Consideration, together with any Additional Tranche payments by the Holder to the Company, together, the “Consideration”), in the amount of $640,000 (“2nd Tranche”) to the Company within forty five (45) and $520,000 (“3rd Tranche”) to the Company within ninety (90) days, respectively, following the Effective Date, with the final Consideration in the amount of $440,000 (“4th Tranche”) due within one hundred and twenty (120) days following the Effective Date (each such payment by the Holder following the Initial Consideration, and its respective 5% OID, shall together be referred to as an “Additional Tranche”) or such other amounts and at such dates as the parties hereto shall mutually agree (each, an “Additional Tranche Date”). The Principal Sum due to Holder shall be prorated based on the Consideration actually paid by Holder, plus the 5% OID, such that the Company is only required to repay the amount funded and the Company is not required to repay any unfunded portion of this Note. The Maturity Date is six (6) months and one day from the Effective Date of each of the Initial Consideration date and each of such Additional Tranche Date (each a respective “Maturity Date”) and is the date upon which the Principal Amount of this Note, as well as any unpaid interest and other fees, shall be due and payable.

In addition to the “guaranteed” interest referenced above, in the Event of Default pursuant to Section 3.00(a), additional interest will accrue from the date of the Event of Default at the rate equal to the lower of 18% per annum or the highest rate permitted by law (the “Default Rate”).
 
This Note will become effective only upon the execution by both parties, including the execution of Exhibits B, C, D, E, Schedule 1 (collectively, the “Exhibits”), and the Treasury Order by the Company to its Transfer Agent (the “Date of Execution”) and delivery of the payment of Consideration by the Holder (the “Effective Date”). The Company acknowledges and agrees the Exhibits are material provisions of this Note.
 
As an investment incentive, the Company shall issue to the Holder 500,000 Common Shares (the “Initial Origination Shares”). The Company acknowledges, understands, and agrees it shall issue an additional 500,000 Common Shares for each of the 2nd Tranche and 3rd Tranche funding payments to the Company; (each, an “Additional Origination Share Tranche”, and, together with the Initial Origination Shares, the “Origination Shares”); however, each of the Company and the Holder agree and acknowledge that there shall be no additional Origination Shares issued to Holder in connection with the 4th Tranche of funding to the Company by the Holder.  Both the Initial Origination Shares and each Additional Origination Share Tranche shall be issued and delivered to Holder within 3 Trading Days from the Effective Date of each of the Initial Consideration date and each of the Additional Tranche Date (which delivery shall be satisfied by electronic recordation of the issuance of such shares by the Company’s transfer agent). The Company and Holder acknowledge and agree that if the entirety of the Note is funded, the Company shall have issued to the Holder 1,500,000 Common Shares, which is the maximum number of Origination Shares the Company shall be required to issue and deliver to Holder.

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For purposes hereof the following terms shall have the meanings ascribed to them below:
 
“Business Day” shall mean any day other than a Saturday, Sunday or a day on which commercial banks in the City of New York are authorized or required by law or executive order to remain closed.
 
“Fixed Conversion Price” shall be fixed at a price per share equal to $.09 USD per share .
 
Principal Sum” shall refer to the sum of the Consideration funded under the Note.
 
Principal Amount” shall refer to the sum of (i) the original principal amount of this Note (including the original issue discount), (ii) all guaranteed and other accrued but unpaid interest hereunder, (iii) any fees due hereunder, (iv) liquidated damages, and (v) any default payments owing under the Note, in each case previously paid or added to the Principal Amount.
 
Principal Market” shall refer to the primary exchange on which the Company’s common shares are traded or quoted.
 
“Trading Day” shall mean a day on which there is trading or quoting for any security on the Principal Market.
 
“Underlying Shares” means the Common Shares into which the Note is convertible (including interest, fees, liquidated damages and/or principal payments in Common Shares as set forth herein) in accordance with the terms hereof.
 
The following terms and conditions shall apply to this Note:
 
Section 1.00                Repayment.
 
(a)          The Company may pay this Note, in whole or in part, in cash or in other good funds, according to the following schedule:
 
Days Since Effective Date
Payment Amount
   
Under 90
110% of Principal Amount so paid
   
91-180
125% of Principal Amount so paid
   
 
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(b)          After 180 days from the Effective Date, the Company may not pay this Note, in whole or in part, in cash or in other good funds, without prior written consent from Holder, which consent may be withheld, delayed, denied, or conditioned in Holder’s sole and absolute discretion. Whenever any amount expressed to be due by the terms of this Note is due on any day that is not a Business Day, the same shall instead be due on the next succeeding day that is a Business Day. Upon the occurrence of an Event of Default, the Company may not pay the Note, in whole or in part, in cash or in other good funds without written consent of the Holder, which consent may be withheld, delayed, denied, or conditioned in Holder’s sole and absolute discretion. Further, the Company shall provide the Holder with two weeks’ prior written notice of the Company’s determination to pay any or all of its obligations hereunder. During such two-week period, the Holder may exercise any or all of its conversion rights hereunder.  In the event that the Holder does not exercise its conversion rights in respect of any or all of such noticed, prospective payment, the Company shall tender the full amount set forth in such notice (less any amount in respect of which the Holder has exercised its conversion rights) to the Holder within 2 Business Days following the Holder’s exercise (or notification to the Company of non-exercise) of the Holder’s conversion rights in respect of the amount set forth in such notice. Any such payment by the Company in connection with this provision shall be deemed to have been made on the date that the Holder first receives the above-referenced notice.
 
Section 2.00                Conversion.
 
(a)          Conversion Right. Subject to the terms hereof and restrictions and limitations contained herein, the Holder shall have the right, at the Holder's sole option, at any time and from time to time to convert in whole or in part the outstanding and unpaid Principal Amount under this Note into Common Shares as per the Fixed Conversion Price (or the Conversion Price in the event that the Note is not repaid, retired or fully-converted prior to the Maturity Date, as set forth in Section 3.00(c)), but not to exceed the Restricted Ownership Percentage, as defined in Section 2.00(f). The date of any conversion notice (“Conversion Notice”) hereunder shall be referred to herein as the “Conversion Date”.
 
(b)          Stock Certificates; Electronic Delivery. The Company will deliver to the Holder, or Holder’s authorized designee, no later than 3 Trading Days after the Conversion Date, a certificate or certificates (which certificate(s) shall be free of restrictive legends and trading restrictions if the Common Shares underlying the portion of the Note being converted are eligible under a resale exemption pursuant to Rule 144(b)(1)(ii), Rule 144(d)(1)(ii), Rule 904 of Regulation S or such other available registration exemption of the Securities Act of 1933, as amended) representing the number of Common Shares being acquired upon the conversion of this Note. In lieu of delivering physical certificates representing the Common Shares issuable upon conversion of this Note, providing that the conversion shares are eligible to be issued free of restrictive legend, and provided the Company's transfer agent is participating in Depository Trust Company’s (“DTC”) Fast Automated Securities Transfer (“FAST”) program, the Company shall instead use commercially reasonable efforts to cause its transfer agent to electronically transmit such shares issuable upon conversion to the Holder (or its designee), by crediting the account of the Holder’s (or such designee’s) broker with DTC through either its Direct Registration System (“DRS”) or Deposits and Withdrawal at Custodian (“DWAC”) program (provided that the same time periods herein as for stock certificates shall apply).

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(c)          Charges and Expenses. Issuance of Common Shares to the Holder, or any of its assignees, upon the conversion of this Note shall be made without charge to the Holder for any issuance fee, transfer tax, legal opinion and related charges, postage/mailing charge or any other expense with respect to the issuance of such Common Shares. Company shall pay all transfer agent fees incurred from the issuance of the Common Shares to Holder, as well as any and all other fees and charges required by the transfer agent as a condition to effectuate such issuance. Any such fees or charges, as noted in this Section that are paid by the Holder (whether from the Company’s delays, outright refusal to pay, or otherwise), will be automatically added to the Principal Sum of the Note then outstanding and tack back to the Effective Date for purposes of Rule 144 or Regulation S, as applicable.
 
(d)          Delivery Timeline. If the Company fails to deliver to the Holder such certificate or certificates (or shares through the DRS or DWAC program) pursuant to this Section (free of any restrictions on transfer or legends, if eligible) prior to 3 Trading Days after the Conversion Date, the Company shall pay to the Holder as liquidated damages an amount equal to $2,000 per day, until such certificate or certificates are delivered. The Company acknowledges that it would be extremely difficult or impracticable to determine the Holder’s actual damages and costs resulting from a failure to deliver the Common Shares and the inclusion herein of any such additional amounts are the agreed upon liquidated damages representing a reasonable estimate of those damages and costs. Such liquidated damages will be automatically added to the Principal Sum of the Note and tack back to the Effective Date for purposes of Rule 144 or such available exemption from registration.
 
(e)          Reservation of Underlying Securities. The Company covenants that it will at all times reserve and keep available for Holder, out of its authorized and unissued Common Shares solely for the purpose of issuance upon conversion of this Note, free from preemptive rights or any other actual contingent purchase rights of persons other than the Holder, two and one-half (2.5x) times the number of Common Shares as shall be issuable (taking into account the adjustments under this Section 2.00, but without regard to any ownership limitations contained herein) upon the conversion of this Note (consisting of the Principal Amount), under the formula in Section 3.00(c) below, to Common Shares (the “Required Reserve”). The Company covenants that all Common Shares that shall be issuable will, upon issue, be duly authorized, validly issued, fully-paid, non-assessable and freely-tradable (if eligible). If the amount of shares on reserve in Holder’s name at the Company’s transfer agent for this Note shall drop below the Required Reserve, the Company will, within 2 Trading Days of notification from Holder, instruct the transfer agent to increase the number of shares so that the Required Reserve is met. In the event that the Company does not instruct the transfer agent to increase the number of shares so that the Required Reserve is met, the Holder will be allowed, if applicable, to provide this instruction as per the terms of the Treasury Order attached to this Note. Upon an Event of Default that is not cured within the applicable cure period, the Required Reserve shall immediately increase to 3.5x times the number of Common Shares as shall be issuable upon conversion of the then outstanding Principal Amount of the Note, under the formula set forth in Section 3.00(c), to Common Shares (the “Adjusted Required Reserve”). The Company agrees that the maintenance of the Required Reserve and Adjusted Required Reserve is a material term of this Note and any breach of this Section 2.00(e) will result in a default of the Note.
 
(f)           Conversion Limitation. The Holder will not submit a conversion to the Company that would result in the Holder beneficially owning more than 9.99% of the then total outstanding shares of the Company (“Restricted Ownership Percentage”).

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(g)          Conversion Delays. If the Company fails to deliver shares in accordance with the timeframe stated in Section 2.00(c), the Holder, at any time prior to selling all of those shares, may rescind any portion, in whole or in part, of that particular conversion attributable to the unsold shares. The rescinded conversion amount will be returned to the Principal Sum then outstanding with the rescinded conversion shares returned to the Company, under the expectation that any returned conversion amounts will tack back to the Effective Date.
 
(h)          Shorting and Hedging. Holder may not engage in any “shorting” or “hedging” transaction(s) in the Common Shares of the Company prior to conversion or at any time while any portion of the Principal Sum remains outstanding.
 
(i)          Conversion Right Unconditional. If the Holder shall provide a Conversion Notice as provided herein, the Company's obligations to deliver Common Shares shall be absolute and unconditional, irrespective of any claim of setoff, counterclaim, recoupment, or alleged breach by the Holder of any obligation to the Company, subject to any court order by a court of competent jurisdiction.
 
Section 3.00                Defaults and Remedies.
 
(a)          Events of Default. An “Event of Default” is: (i) a default in payment of any amount due hereunder; (ii) a default in the timely issuance of underlying shares upon and in accordance with terms of Section 2.00, which default continues for 2 Trading Days after the Company has failed to issue shares or deliver stock certificates within the 3rd Trading Day following the Conversion Date; (iii) if the Company does not issue the press release or file such necessary 8-K, material change report or other applicable report with either EDGAR or SEDAR, as applicable, in each case in accordance with the provisions and the deadlines referenced Section 5.00(i); (iv) failure by the Company for 3 Trading Days after notice has been received by the Company to comply with any material provision of this Note; (v) any representation or warranty of the Company in this Note that is found to have been incorrect in any material respect when made, including, without limitation, the Exhibits; (vi) failure of the Company to remain compliant with DTC, thus incurring a “chilled” status with DTC; (vii) any default of any mortgage, indenture or material instrument which may be issued, or by which there may be secured or evidenced any material indebtedness, for money borrowed by the Company or for money borrowed the repayment of which is guaranteed by the Company, whether such indebtedness or guarantee now exists or shall be created hereafter; (viii) if the Company is subject to any Bankruptcy Event; (ix) any material failure of the Company to satisfy (from and after the Effective Date) its continuous disclosure obligations pursuant to the requirements of the Securities Act (British Columbia) or, when applicable, the Securities Exchange Act of 1934, as amended (the “1934 Act”) and the rules and guidelines issued by OTC Markets News Service, OTCMarkets.com and their affiliates, in each case if and as applicable; (x) failure of the Company to remain in good standing under the laws of its state of domicile; (xi) any failure of the Company to provide the Holder with information related to its corporate structure including, but not limited to, the number of authorized and outstanding shares, public float, etc. within 1 Trading Day of request by Holder; (xii) failure by the Company to maintain the Required Reserve or Adjusted Required Reserve in accordance with the terms of Section 2.00(e); (xiii) failure of Company’s Common Shares to maintain a closing bid price in its Principal Market for more than 5 consecutive Trading Days; (xiv) any delisting from a Principal Market for any reason; (xv) failure by Company to pay any of its transfer agent fees in excess of $2,000 or to maintain a transfer agent of record; (xvi) failure by Company to notify Holder of a change in transfer agent within 24 hours of such change; (xvii) any trading suspension imposed by the B.C. Securities Commission (the “BCSC”), or when applicable to the Company, the United States Securities and Exchange Commission (the “SEC”) under Sections 12(j) or 12(k) of the 1934 Act; (xviii) failure by the Company to meet the requirements necessary to satisfy the availability of either Rule 904 of Regulation S, Rule 144A or Rule 144, as applicable, to the Holder or its assigns, including but not limited to the timely fulfillment of its filing requirements as a fully- reporting issuer registered with the BCSC or the SEC (when applicable), requirements for XBRL filings (if applicable), and requirements for disclosure of financial statements on its website (if applicable); (xix) failure of the Company to abide by the Use of Proceeds or failure of the Company to inform the Holder of a change in the Use of Proceeds; or (xx) failure of the Company to abide by the terms of the right of first refusal contained in Section 5.00(j).

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(b)          Remedies. If an Event of Default occurs, and remains uncured within the applicable cure period, then the outstanding Principal Amount of this Note then outstanding and owing in respect thereof through the date of acceleration, shall become, at the Holder's election, immediately due and payable in cash at the “Mandatory Default Amount”. The Mandatory Default Amount means 25% of the outstanding Principal Amount of this Note will be automatically added to the Principal Sum of the Note and tack back to the Effective Date for purposes of Rule 904 of Regulation S, Rule 144 or Rule 144A, as applicable. Commencing 5 days after the occurrence of any Event of Default that results in the eventual acceleration of this Note, this Note shall accrue additional interest, in addition to the Note’s “guaranteed” interest, at a rate equal to the lesser of 18% per annum or the maximum rate permitted under applicable law. In connection with such acceleration described herein, the Holder need not provide, and the Issuer hereby waives, any presentment, demand, protest or other notice of any kind, and the Holder may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such acceleration may be rescinded and annulled by the Holder at any time prior to payment hereunder and the Holder shall have all rights as a holder of the note until such time, if any, as the Holder receives full payment pursuant to this Section 3.00(b). No such rescission or annulment shall affect any subsequent event of default or impair any right consequent thereon. Nothing herein shall limit the Holder's right to pursue any other remedies available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Issuer's failure to timely deliver certificates representing shares of Common Shares upon conversion of the Note as required pursuant to the terms hereof.
 
(c)          Variable Conversion Price. If the Note is not retired on or before the Maturity Date, then at any time and from time to time after the Maturity Date, and subject to the terms hereof and restrictions and limitations contained herein, the Holder shall have the right, at the Holder's sole option, to convert in whole or in part the outstanding and unpaid Principal Amount under this Note into Common Shares at the Variable Conversion Price. The Variable Conversion Price(together with the Fixed Conversion Price, the “Conversion Price”) shall be equal to the lower of: (a) the Fixed Conversion Price or (b) 83% of the average of the two lowest volume weighted average prices of the Company’s Common Shares during the 10 consecutive Trading Days prior to the date on which Holder elects to convert all or part of the Note. For the purpose of calculating the Variable Conversion Price only, any time after 4:00 pm Eastern Time (the closing time of the Principal Market) shall be considered to be the beginning of the next Business Day. If the Company is placed on “chilled” status with the DTC, the discount under this Section 3.00(c) shall be increased by 10%, i.e., from 17% to 27%, until such chill is remedied. If the Company is not DRS or DWAC eligible through their transfer agent and DTC’s FAST system, the discount under this Section 3.00(c) will be increased by 5%, i.e., from 17% to 22%. In the case of both, the discount under this Section 3.00(c) shall be a cumulative increase of 15%, i.e., from 17% to 32%; provided, however, that any such adjustment to the Fixed Conversion Price contemplated in this Section 3.00(c) is subject to compliance with applicable Canadian securities laws and the policies and rules of the Canadian Securities Exchange or such other stock exchange on which the securities of the Company are principally traded.

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Section 4.00                Representations and Warranties of Holder.
 
Holder hereby represents and warrants to the Company that:

(a)          Holder is an “accredited investor,” as such term is defined in Regulation D of the Securities Act of 1933, as amended (the “1933 Act”) and as such term is defined in National Instrument 45-106 – Prospectus Exemptions (“NI 45-106"), and will acquire this Note and the Underlying Shares (collectively, the “Securities”) for its own account and not with a view to a sale or distribution thereof as that term is used in Section 2(a)(11) of the 1933 Act, in a manner which would require registration under the 1933 Act or any state securities laws. Holder has such knowledge and experience in financial and business matters that such Holder is capable of evaluating the merits and risks of the Securities. Holder can bear the economic risk of the Securities, has knowledge and experience in financial business matters and is capable of bearing and managing the risk of investment in the Securities. Holder recognizes that the Securities have not been registered under the 1933 Act, nor under the securities laws of any state and, therefore, cannot be resold unless the resale of the Securities is registered under the 1933 Act or unless an exemption from registration is available. Holder has carefully considered and has, to the extent Holder believes such discussion necessary, discussed with its professional, legal, tax and financial advisors, the suitability of an investment in the Securities for its particular tax and financial situation and its advisers, if such advisors were deemed necessary, and has determined that the Securities are a suitable investment for it. Holder has not been offered the Securities by any form of general solicitation or advertising, including, but not limited to, advertisements, articles, notices or other communications published in any newspaper, magazine, or other similar media or television or radio broadcast or any seminar or meeting where, to Holders’ knowledge, those individuals that have attended have been invited by any such or similar means of general solicitation or advertising. Holder has had an opportunity to ask questions of and receive satisfactory answers from the Company, or any person or persons acting on behalf of the Company, concerning the terms and conditions of the Securities and the Company, and all such questions have been answered to the full satisfaction of Holder. The Company has not supplied Holder any information regarding the Securities or an investment in the Securities other than as contained in this Agreement, and Holder is relying on its own investigation and evaluation of the Company and the Securities, including any public information which has been filed by the Company with any Canadian provincial securities commissions (the “Public Record”), and not on any other information and is aware that an investment in the Company is speculative and involves certain risks (including those risks disclosed in the Public Record). Holder agrees and acknowledges that in order for the Note or the underlying conversion shares to be resold, transferred, offered or pledged, there must be an available exemption from registration and, therefore, Holder covenants that it shall provide any certificates, documents and opinions as needed to avail itself of such applicable registration exemption and legend removal.

(b)          The Holder is a limited liability company duly organized, validly existing and in good standing under the laws of the state of its incorporation and has all requisite corporate power and authority to carry on its business as now conducted. The Holder is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a material adverse effect on its business or properties.

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(c)          All limited liability company action has been taken on the part of the Holder, its officers, directors, managers and members necessary for the authorization, execution and delivery of this Note. The Holder has taken all limited liability company action required to make all of the obligations of the Holder reflected in the provisions of this Note, valid and enforceable obligations.

(d)          The Note has an acquisition cost to the Holder of not less than $617,500, payable in cash at the Closing (with an additional $617,500 to be funded on each of forty five (45) and ninety (90) days post the Effective Date and the final tranche of $332,500 days to be funded one hundred and twenty (120) days post the Effective Date.  The Holder is: (i) purchasing the Securities as principal for its own account and not for the benefit of any other person; and (ii) was not created and is not being used solely to purchase or hold securities in reliance on the prospectus exemption provided under Section 2.10 (Minimum Amount Investment) of NI 45-106; and (iii) it pre-existed the offering of the Note and has a bona fide purpose other than investment in the Securities.

(e)          Each certificate or instrument representing Securities will be endorsed with the following legend (or a substantially similar legend), unless or until registered under the 1933 Act or exempt from registration:
 
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "U.S. SECURITIES ACT"), OR ANY STATE SECURITIES LAWS, AND MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO PARCELPAL LOGISTICS INC. (THE "CORPORATION") (B) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH REGULATION S UNDER THE U.S. SECURITIES ACT AND IN COMPLIANCE WITH LOCAL LAWS AND REGULATIONS, (C) IN ACCORDANCE WITH (1) RULE 144A UNDER THE U.S. SECURITIES ACT, OR (2) RULE 144 UNDER THE U.S. SECURITIES ACT AND, IN EACH CASE, IN COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS, OR (D) IN ANOTHER TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS, PROVIDED THAT IN THE CASE OF TRANSFERS PURSUANT TO (C)(2) OR (D) ABOVE, A LEGAL OPINION SATISFACTORY TO THE CORPORATION MUST FIRST BE PROVIDED TO COMPUTERSHARE TRUST COMPANY OF CANADA TO THE EFFECT THAT SUCH TRANSFER IS EXEMPT FROM REGISTRATION UNDER THE U.S. SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE "GOOD DELIVERY" IN SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN CANADA.

(Canadian Restrictive Legend)

UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE January 15, 2022 under Canadian restrictions, and not before March 15, 2022 under United States restrictions, in each case in compliance with applicable rules and regulations.

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Section 5.00                General.
 
(a)          Payment of Expenses. The Company agrees to pay all reasonable charges and expenses, including attorneys' fees and expenses, which may be incurred by the Holder in successfully enforcing this Note and/or collecting any amount due under this Note.
 
(b)          Assignment, Etc. The Holder may assign or transfer this Note to any transferee at its sole discretion, provided, however, that the terms and conditions of this Note shall not be changed, modified or amended without the Company’s prior written consent. This Note shall be binding upon the Company and its successors and shall inure to the benefit of the Holder and its successors and permitted assigns, as well as to the Company.
 
(c)          Amendments. This Note may not be modified or amended, or any of the provisions of this Note waived, except by written agreement of the Company and the Holder.
 
(d)          Funding Window. The Company agrees that it will not enter into a convertible debt financing transaction, including 3(a)9 and 3(a)10 transactions, with any party other than the Holder for a period of 90 Trading Days following the Effective Date, and each Additional Tranche Date, as applicable. The Company agrees that this is a material term of this Note and any breach of this Section 5.00(d) will result in a default of the Note.  Notwithstanding the foregoing, or any other terms or provisions of this Note (or such other Notes as may be then outstanding), including Sections 5.00(e) and (j), the Company may, in its sole discretion and without notice to Holder, enter into an equity, debt or such other financing transaction in connection with an acquisition, joint venture, partnership, license or such other expansion opportunity.
 
(e)          Terms of Future Financings. So long as this Note is outstanding, upon any issuance by the Company or any of its subsidiaries of any convertible debt security (whether such debt begins with a convertible feature or such feature is added at a later date) with any term more favorable to the holder of such security or with a term in favor of the holder of such security that was not similarly provided to the Holder in this Note, then the Company shall notify the Holder of such additional or more favorable term and such term, at the Holder's option, shall become a part of this Note and its supporting documentation, subject to compliance with applicable securities laws and the rules and policies of the Canadian Securities Exchange or such other stock exchange on which the securities of the Company are principally listed. The types of terms contained in the other convertible debt security that may be more favorable to the holder of such security include, but are not limited to, terms addressing conversion discounts, terms addressing maturity, conversion look back periods, interest rates, original issue discount percentages and warrant coverage.
 
(f)           Governing Law; Jurisdiction.
 
(i)          Governing Law. This Note will be governed by, and construed and interpreted in accordance with, the laws of the state of California without regard to any conflicts of laws or provisions thereof that would otherwise require the application of the law of any other jurisdiction.

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(ii)          Jurisdiction and Venue. Any dispute, claim, suit, action or other legal proceeding arising out of or relating to this Note or the rights and obligations of each of the parties shall be brought only in the state courts of California or in the federal courts of the United States of America located in San Diego County, California.
 
(iii)         No Jury Trial. The Company hereto knowingly and voluntarily waives any and all rights it may have to a trial by jury with respect to any litigation based on, or arising out of, under, or in connection with, this Note.
 
(iv)         Delivery of Process by the Holder to the Company. In the event of an action or proceeding by either party hereto against the other party hereto, service of copies of summons and/or complaint and/or any other process that may be served in any such action or proceeding may be made by such party via U.S. Mail, overnight delivery service such as FedEx or UPS, email, fax, or process server, or by mailing or otherwise delivering a copy of such process to the Holder at its principal business address or to the Company at its last known attorney as set forth in its most recent SEDAR or SEC filing, as the case may be.
 
(v)          Notices. Any notice required or permitted hereunder (including Conversion Notices) must be in writing and either personally served, sent by facsimile or email transmission, or sent by overnight courier. Notices will be deemed effectively delivered at the time of transmission if by facsimile or email, and if by overnight courier the business day after such notice is deposited with the courier service for delivery.
 
(g)          No Bad Actor. No current officer or director of the Company would be disqualified under Rule 506(d) of the Securities Act of 1933, as amended, on the basis of being a “bad actor” as that term is established in the September 13, 2013 Small Entity Compliance Guide published by the SEC.
 
(h)          Usury. If it shall be found that any interest or other amount deemed interest due hereunder violates any applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under applicable law. The Company covenants (to the extent that it may lawfully do so) that it will not seek to claim or take advantage of any law that would prohibit or forgive the Company from paying all or a portion of the principal, fees, liquidated damages or interest on this Note.
 
(i)           Securities Laws Disclosure; Publicity. The Company shall (a) by 9:30 a.m. Eastern Time on the Trading Day immediately following the Date of Execution, issue a press release disclosing the material terms of the transactions contemplated hereby, and (b) file such news release on SEDAR, including a copy of this Note as an exhibit thereto if required under applicable Canadian securities laws, within the applicable time required under applicable Canadian securities laws.  The Holder agrees and acknowledges that the Company has not provided to it any material non-public information, and to the extent Holder shall come into possession of any material non-public information at any time, including while this Note, any prior issued and outstanding Note or while it holds or controls any securities of the Company, it agrees to not transact in any securities of the Company, directly or indirectly, until such time as such material non-public information has been publicly disclosed, in all cases in compliance with applicable law.  The Company and the Holder shall consult with each other in issuing any other press releases with respect to the transactions contemplated hereby, and neither the Company nor the Holder shall issue any such press release nor otherwise make any such public statement without the prior consent of the Company, with respect to any press release of the Holder, or without the prior consent of the Holder, with respect to any press release of the Company, none of which consents shall be unreasonably withheld, delayed, denied, or conditioned except if such disclosure is required by law or the applicable rules of the Company’s Principal Market, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication. The Holder agrees and acknowledges that the Company is and shall be subject to certain public company disclosure requirements imposed on the Company by law and/or Principal Market regulations, which shall require disclosure of the terms of this Note, the names of parties to it and certain other information related hereto , and such required disclosure by the Company shall, in no circumstance, be deemed or considered a default under or breach of this Note.

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(j)           Right of First Refusal. From and after the date of this Note and at all times hereafter while the Note is outstanding, the Parties agree that, in the event that the Company receives any written or oral proposal (the “Proposal”) containing one or more offers to provide additional capital or equity or debt financing (the “Financing Amount”), and if the Company’s executive management and its board of directors either accept such Proposal or determine to negotiate such Proposal in contemplation of acceptance, then the Company agrees that it shall provide a copy of such written Proposal to the Holder and all amendments, revisions, and supplements thereto (the “Proposal Documents”) no later than 3 business days from the  receipt and contemplated acceptance by the Board of the Proposal Documents. Following receipt of the Proposal Documents from the Company, the Holder shall have the right (the “Right of First Refusal”), but not the obligation, for a period of 5 business days thereafter (the “Exercise Period”), to invest, at similar or better terms to the Company, an amount equal to or greater than the Financing Amount, upon written notice to the Company that the Holder is exercising the Right of First Refusal provided hereby. In furtherance of the Right of First Refusal, the Company agrees that it will cooperate and assist the Holder in conducting a due diligence investigation of the Company and its corporate and financial affairs and promptly provide the Holder with information and documents that the Holder may reasonably request so as to allow the Holder to make an informed investment decision. However, the Company and the Holder agree that the Holder shall have no more than 5 business days from and after the expiration of the Exercise Period to exercise its Right of First Refusal hereunder and to provide a written counteroffer to the Company on the same or better terms. This Right of First Refusal shall extend to all purchases of debt held by, or assigned to or from, current stockholders, vendors, or creditors, all transactions, including, if applicable, under Sections 3(a)9 and/or 3(a)10 or the Securities Act of 1933, as amended, and all equity line-of-credit transactions, provided, however, the Right of First Refusal set forth herein shall not apply to any loans to the Company or purchases of securities by any directors of the Company, financing(s) by the Company involving a United States IPO transaction, syndicated, underwritten or best efforts registered transaction, including, but not limited to, a financing transaction to qualify for a listing on the Nasdaq Capital Market or OTC QB or QX markets; provided, however, the Holder shall have the option, but not the obligation, to participate in such transaction(s) by the Company while the Note remains outstanding.  Other than for exempted issuances described herein, in the event that the Company does enter into, or makes any issuance of Common Shares related to a 3(a)(9) Transaction or a 3(a)(10) Transaction while this note is outstanding, without giving Right of First Refusal to the Holder, a liquidated damages charge of 25% of the outstanding principal balance of this Note, but not less than $25,000 (if permissible in compliance with applicable law), will be assessed and will become immediately due and payable to the Holder at its election in the form of cash payment or addition to the balance of this Note. Such liquidated damages will be automatically added to the Principal Sum of the Note and tack back to the Effective Date for purposes of Rule 144A or Rule 144, as applicable.

[Signature Page to Follow.]

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IN WITNESS WHEREOF, the Company has caused this Fixed Convertible Promissory Note to be duly executed on the day and in the year first above written.

PARCELPAL LOGISTICS INC.

By:

Name:
 
Title:
 
Email:
 
Address:

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This Fixed Convertible Promissory Note of September 15, 2021 is accepted this            day of September  2021 by
 
TANGIERS GLOBAL, LLC
 
By:
   
 
Name:
Title: Managing Member 
                    

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