FIRST AMENDMENT
UNIT PURCHASE AND SALE AGREEMENT
This First Amendment to the Class A Unit Purchase and Sale Agreement ("Amendment") is made and entered into as of January 24 2015 by and between CSA, LLC (f/k/a Canna Security America LLC, a Colorado limited liability company ("Seller"), Dixie Holdings, LLC, a Colorado limited liability company ("Dixie"), and James Willett, an individual ("Willett", and collectively with Dixie, the "Purchaser"). Purchase and Seller may be referred to herein as the "Patties" and each individually, a "Party". Capitalized terms not othe1wise defined herein shall have meaning set forth in the Agreement (defined below).
WHEREAS, the Parties executed the Unit Purchase and Sale Agreement on or about October 15, 2013 (the "Agreement"), in which Seller sold to Purchaser units in Seller; and
WHEREAS, Dixie is the owner of 107,143 Dixie Units and Willett is the owner of 142,857 Willett Units (both Dixie Units and Willett Units are used herein as defined in the Agreement).
WHEREAS, the Parties wish to amend the Agreement through this Amendment upon the terms provided herein.
NOW THEREFORE, the Pa1ties set fo1th their understandings as follows:
| A. | Amendment to Agreement. Article 4 of the Agreement shall be deleted in its entirety and replaced with the following: |
"ARTICLE 4 MANDATORY BUY-OUT; BOARD SEATS
4.1 Buy-Out. Upon the first occurrence of a Liquidity Event (as defined below), Seller shall be required to:
(a) Buy back from each of Dixie and Willett, respectively, fifty percent (50%) of the Dixie Units and fifty percent (50%) of the Willett Units at a price equal to Four and 40/ 100 Dollars ($4.40) for each unit, for an aggregate repurchase price of Five Hundred Fifty Thousand Dollars ($550,000) (the, "Repurchase Price "), as a condition to the closing of a Liquidity Event. The terms of the buy-out shall be upon similar terms and conditions as set forth in this Agreement; provided, however, that Seller shall pay Dixie and Willett for their respective repurchased units as follows: (i) forty-five percent (45%) of the Repurchase P1ice within five (5) business days of a Liquidity Event, and (ii) all remaining amounts of the Repurchase Price on or before the twelve (12) month anniversary of the Liquidity Event. Dixie and Willett shall transfer to Seller the Dixie Units and Willett Units repurchased pursuant to this Section 4.1 upon Seller's delivery of, and in the pro rata amount of (as determined by the per unit price set forth above), any portion of the Repurchase Price.
| (b) | Immediately following the closing of a Liquidity Event, Seller shall cause the post-Liquidity Event entity grant to each of Dixie and Willett Twenty-Five Thousand Dollars ($25,000) (for an aggregate of $50,000) worth of preferred securities of the post-Liquidity Event entity. |
(c) Upon the occurrence of a Liquidity Event, Seller shall cause the post-Liquidity Event entity to grant Dixie and Willett, jointly and not severally, the right to elect, by the unanimous consent of Dixie and Willett, one (1) person to board of the post-Liquidity Event entity (the "Dixie/Willett Representative"). Initially, Charles Smith shall serve as the Dixie/Willett Representative.
4.2 Liquidity Event. A "Liquidity Event" shall be any merger, reverse merger, or any other sale or swap of all or substantially all of Seller's equity with another entity or person (including, without limitation, with a public shell) or the sale of all or substantially all of the assets of Seller.
