Item 1.01 Entry into a Material Definitive
Agreement.
Execution of Amendment to Transaction Support
Agreement and Reinstatement and Amendment No. 1 to Forbearance Agreement
As described further below under Item 2.04,
The Greenrose Holding Company Inc. (the “Company,” and together with its subsidiaries Theraplant, LLC
(“Theraplant”) and True Harvest Holdings, Inc. (“True Harvest”), the “Greenrose Entities”)
received notices of default under its Credit Agreement, by and among the Company, the lenders identified therein and DXR Finance,
LLC (the “Agent”), dated November 26, 2021 (the “Credit Agreement”), the Transaction Support Agreement, and
the Forbearance Agreement (each, as defined below) in connection with the Purported Stockholder Consent previously disclosed in the
Company’s Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on January 30, 2023. As described
further below, the Transaction Support Agreement, dated November 10, 2022, among the Company, Theraplant, True Harvest, the
Agent, DXR-GL Holdings I, LLC (“DXR-I”), DXR-GL Holdings II, LLC (“DXR-II”), and DXR-GL Holdings III, LLC
(“DXR-III”) (the “Transaction Support Agreement”) and the Forbearance Agreement, dated November 10, 2022,
among Company, Theraplant, True Harvest, the Agent, DXR-I, DXR-II, and DXR-III (the “Forbearance Agreement”), each as
described in the Company’s Form 8-K filed with the SEC on November 14, 2022, have been amended and amended and reinstated as
applicable.
Reinstatement and Amendment No. 1 to Forbearance
Agreement
The Reinstatement and Amendment No. 1 to Forbearance
Agreement reinstates and amends the Forbearance Agreement (as so reinstated and amended, the “Amended Forbearance Agreement”).
The execution of the Amended Forbearance Agreement serves as written notice of reinstatement of the Forbearance Agreement by the Agent
to the Greenrose Entities, in accordance with the terms of the Forbearance Agreement with respect to the Forbearance Termination Event
of Default (as defined in the Forbearance Agreement) alleged by the First Notice of Default (as defined in Item 2.04 below).
Pursuant to the Amended Forbearance Agreement
(a) an Event of Default (as defined in the Forbearance Agreement) under the Credit Agreement that occurs after a Holdings Board Change
(as defined below) will not constitute a Forbearance Termination Event of Default with respect to True Harvest or Theraplant, (b) solely
with respect to the Company, a Holdings Board Change will constitute a Forbearance Termination Event of Default under the Amended Forbearance
Agreement, (c) solely with respect to True Harvest and the Company, a TH Board Change (as defined below) will constitute a Forbearance
Termination Event of Default under the Amended Forbearance Agreement, (d) prior to a Holdings Board Change or a TH Board Change,
during the Forbearance Period (as defined in the Forbearance Agreement), the Agent will be permitted to vote the Voting Proxies (defined
below) for limited purposes including to appoint Thomas Lynch, John Falcon and Jarom Fawson as manager(s) and/or director(s), as applicable,
of True Harvest and Theraplant, and (e) following a Holdings Board Change or a TH Board Change, the Agent will be permitted to vote the
Voting Proxies in its sole discretion.
Amendment to Transaction Support Agreement
The amendment to the Transaction Support Agreement
(the “TSA Amendment”) provides, among other things, that:
| ● | if
there is a valid and effective Change of Control (as defined below) of the board of directors of the Company (the “Board”)
without the consent of Agent or that otherwise results in a breach of the Amended Forbearance Agreement (a “Holdings Board Change”),
the Transaction Support Agreement will terminate solely with respect to the Company and the remaining parties to the Transaction Support
Agreement will consummate the foreclosure with respect to the collateral owned by True Harvest and Theraplant (such transaction, the
“Subsidiary Foreclosure”); |
| ● | if there is a valid and effective Change of
Control of the board of directors of True Harvest (the “TH Board”) without the consent of the Agent or that otherwise
results in a breach of the Amended Forbearance Agreement, which is not cured within three days, and the exercise of the Voting
Proxies (as defined below) are determined by a court of competent jurisdiction to be invalid (a “TH Board Change”), the
Transaction Support Agreement, as amended, will terminate as to True Harvest and Agent may pursue any alternative method of
foreclosure on the collateral owned by True Harvest, and the foreclosure will be consummated solely with respect to the collateral
owned by Theraplant. For the purposes of the TSA Amendment, a “Change of Control” means that any subset of John Falcon,
Steven Cummings, John Torrance, III, Benjamin Rose, Jarom Fawson, Thomas Lynch, or Brendan Sheehan cease to constitute or are
determined by a court of competent jurisdiction not to constitute at least a majority of the Board or TH Board, as
applicable; |
| ● | upon consummation of the foreclosure, (i)
NewCo (as defined in the Transaction Support Agreement) will assume certain employee liabilities of employees and independent
contractors of the Company and all employee liabilities of Theraplant and True Harvest, except for certain specified severance
obligations (as opposed to all employee liabilities of each of the Company, True Harvest and Theraplant) and (ii) in addition to its
obligation to offer employment to all employees of True Harvest and Theraplant on terms substantially the same terms, and with no
less favorable benefits, as such employees’ existing employment agreements, NewCo will substantially maintain such terms and
benefits for a period of six months following the consummation of the foreclosure (to the extent such employee remains an employee
of NewCo); |
| ● | notwithstanding
the termination of the Transaction Support Agreement as to Holdings, upon a Holdings Board Change, or as to True Harvest, upon a TH Board
Change, NewCo’s (as defined in the Transaction Support Agreement) obligation to assume the foregoing employee liabilities of employees
and independent contractors of the Company and True Harvest, as applicable, and its obligation to fund certain tax liabilities of each
of the Company and True Harvest, as applicable, will survive such terminations; and |
| ● | each
of the Agent, True Harvest and Theraplant may terminate the Transaction Support Agreement as to all parties, upon any applicable governmental
authority enacting or issuing any order, injunction or law making illegal, enjoining or prohibiting the consummation of the Subsidiary
Foreclosure, which order, injunction or law remains in effect for more than ten business days following the issuances or entry thereof. |
Under the TSA Amendment, NewCo will not be obligated
to enter into any indemnification agreement with or otherwise indemnify any of the individuals purportedly appointed as directors of the
Company or True Harvest pursuant to the Purported Stockholder Consent (such individuals, the “Purported New Directors”). Further,
NewCo will not be required to deliver the Release Agreement (as defined in the Transaction Support Agreement) to any of the Purported
New Directors. In the event of a Holdings Board Change or TH Board Change, NewCo will not be required to deliver the Release Agreement
to the Company or True Harvest, as applicable, but will be required to deliver the Release Agreement to all other related parties and
representatives of the Company and of True Harvest as set forth in the Release Agreement, except for the Purported New Directors and any
other parties responsible for directing or participating in a Holdings Board Change or TH Board Change, as applicable. In addition, the
indemnification agreements required under the Transaction Support Agreement to be delivered to any current director or officer (other
than the Purported New Directors), at the closing of any foreclosure transaction contemplated by the Transaction Support Agreement, will
include an indemnity for any claims arising from or related to liabilities that would have been assumed by NewCo but for a Holdings Board
Change or TH Board Change and claims arising on or after January 24, 2023, in each case, subject to the limitations set forth in the Transaction
Support Agreement.
The foregoing descriptions of the TSA
Amendment and the Amended Forbearance Agreement do not purport to be complete and are subject to and qualified
in its entirety by reference to the complete text of such agreement, copies of which are filed as Exhibits 10.1 and 10.2,
respectively and are incorporated herein by reference.