UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15b-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: March 16,
2023
Commission File Number: 000-55992
Red White & Bloom Brands Inc.
(Exact name of registrant as specified in its charter)
789 West Pender Street, Suite 810
Vancouver BC Canada V6C 1H2
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover
Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
EXHIBIT INDEX
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.
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Red White & Bloom Brands Inc. |
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By: |
/s/ Edoardo Mattei |
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Edoardo Mattei |
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Chief Financial Officer |
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| Date: June 27, 2023 |
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Exhibit 99.1
Red White & Bloom
Brands Announces Appointment of Edoardo Mattei
as Chief Financial Officer
and Corporate Secretary
TORONTO, ONTARIO March 16, 2023 (GLOBE
NEWSWIRE) -- Red White & Bloom Brands Inc. ("RWB" or the "Company") (CSE: RWB and OTC: RWBYF), is
pleased to confirm the appointment of Mr. Edoardo (Eddie) Mattei as its Chief Financial Officer, subject to final US state regulatory
approval. As of December 1st, 2022, Eddie was contracted by the Company in a fractional role to assist with the orderly transition
and timely restructuring of the Company’s Finance, Information Technology, and Human Resources teams. Effective March 15, 2023,
subject to the aforementioned regulatory approval, Eddie will assume the role of Chief Financial Officer and will also be appointed the
Company's Corporate Secretary. Eddie will be based at the Company’s headquarters in Toronto, Ontario.
With over twenty years of experience in diverse industries, operating
in both public and private markets, Eddie brings a grounded CFO skillset to the Company having held leadership roles with responsibility
for financial reporting, corporate finance, domestic and international taxation, global treasury, business development, mergers, acquisitions
and divestitures, investor relations, information technology, human resources, and risk management.
Eddie holds an MBA from Wilfrid Laurier University and is a CPA
(CA) and started his career at Grant Thornton, LLP in Toronto.
"I am grateful for the opportunity to join RWB and to work
alongside a talented and hard-working team of individuals focused on the Company’s success. We have undertaken a comprehensive review
at our broader scope reporting skillsets, both within RWB and within our service provider network, and, as a result, have proactively
implemented value-added staffing, and system changes as well as instituted practices within RWB that will encourage collaborative workflows,
open dialogue, and a team-based approach to defining and executing solutions to challenges that we face as a public company in the cannabis
marketplace. All of these changes will ensure that the Company can and will continue to meet its reporting timelines, starting with the
Company’s 2022 year-end financial statements and associated disclosures, due May 1, 2023, in addition to improving the quality of
the information disseminated to our valued shareholders. I look forward to supporting Brad, Colby, and the entire RWB team, as we continue
on the Company’s path to success,” said Eddie Mattei, Chief Financial Officer of the Company.
"We are proud to welcome Eddie to our management team as
our new CFO," said Colby De Zen, President of RWB. "His practical financial and operational experience will be invaluable to
the Company as we continue to grow and expand our business and optimize the day-to-day operations of the Company.”
The Company further reports that it has issued 1,250,000 stock
options to an officer of the Company. The stock options are exercisable to acquire up to 1,250,000 common shares of the Company at an
exercise price of $0.10 for a period of ten years from issuance. The stock options vest quarterly over a period of two years commencing
on the first anniversary date of the grant. The terms for the grant are in line with the parameters set out in the Company’s existing
Employee Stock Option Plan (“ESOP”).
About Red White & Bloom Brands Inc.
Red White & Bloom is a multi-state cannabis operator and house
of premium brands in the U.S. legal cannabis sector. RWB is predominantly focusing its investments on the major U.S. markets, that include
Arizona, California, Florida, Massachusetts, Missouri, and Michigan.
For more information about Red White & Bloom Brands
Inc., please contact:
Edoardo (Eddie) Mattei, CFO
IR@RedWhiteBloom.com
Visit us on the web: https://www.redwhitebloom.com/
Follow us on social media:
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@rwbbrands |
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@redwhitebloombrands |
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@redwhitebloombrands |
Neither the CSE nor its Regulation Services Provider (as that term
is defined in the policies of the CSE) accepts responsibility for the adequacy or accuracy of this release.
FORWARD LOOKING INFORMATION
This press release contains forward-looking statements and information
that are based on the beliefs of management and reflect the Company's current expectations. When used in this press release, the words
"estimate", "project", "belief", "anticipate", "intend", "expect", "plan",
"predict", "may" or "should" and the negative of these words or such variations thereon or comparable terminology
are intended to identify forward-looking statements and information. There is no assurance that these transactions will yield results
in line with management expectations. Such statements and information reflect the current view of the Company with respect to risks and
uncertainties that may cause actual results to differ materially from those contemplated in those forward-looking statements and information.
By their nature, forward-looking statements involve known and unknown
risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be
materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such
factors include, among others, the following risks: risks associated with the implementation of the Company's business plan and matters
relating thereto, risks associated with the cannabis industry, competition, regulatory change, the need for additional financing, reliance
on key personnel, market size, and the volatility of the Company's common share price and volume. Forward-looking statements are made
based on management's beliefs, estimates and opinions on the date that statements are made, and the Company undertakes no obligation to
update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change. Investors are cautioned
against attributing undue certainty to forward-looking statements.
There are several important factors that could cause the Company's
actual results to differ materially from those indicated or implied by forward-looking statements and information. Such factors include,
among others, risks related to the Company's proposed business, such as failure of the business strategy and government regulation; risks
related to the Company's operations, such as additional financing requirements and access to capital, reliance on key and qualified personnel,
insurance, competition, intellectual property, and reliable supply chains; risks related to the Company and its business generally; risks
related to regulatory approvals. The Company cautions that the foregoing list of material factors is not exhaustive. When relying on the
Company's forward-looking statements and information to make decisions, investors and others should carefully consider the foregoing factors
and other uncertainties and potential events. The Company has assumed a certain progression, which may not be realized. It has also assumed
that the material factors referred to in the previous paragraph will not cause such forward-looking statements and information to differ
materially from actual results or events. However, the list of these factors is not exhaustive and is subject to change and there can
be no assurance that such assumptions will reflect the actual outcome of such items or factors. While the Company may elect to, it does
not undertake to update this information at any particular time.
3
Exhibit 99.2
UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF
THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE JANUARY 16, 2023.
Debenture No.
Principal Amount: CAD$ 17,000,000
Original Issue Date (“Issue Date”): September 15, 2022
CONVERTIBLE PROMISSORY NOTE
FOR VALUE RECEIVED, Red White & Bloom Brands Inc.,
a British Columbia corporation (hereinafter called the “Borrower”), hereby promises to pay to the order of C-Point
Investments Limited (the “Holder”) the sum of CAD$17,000,000.00 together with any interest as set forth herein, on
September 12, 2024 (the “Maturity Date”), whether at maturity or upon acceleration or by prepayment or otherwise. The
Borrower agrees to pay interest to the Holder on the unpaid principal amount of this Note from September 12, 2022 at a rate equal to eight
percent (8%) per annum until the full and final repayment of the principal amount of this Note. Interest shall be calculated monthly and
payable on the Maturity Date. Interest shall be computed on the basis of a 360-day year composed of twelve 30-day months. The September
30, 2022 interest payment will represent accrued interest for the period from September 12, 2022 to September 30, 2022. Any amount of
principal on this Note which is not paid when due shall bear interest at the rate of the lesser of (i) eight percent (8%) per annum and
(ii) the maximum amount permitted under law from the due date thereof until the same is paid (the “Default Interest”).
Default Interest shall commence accruing on the earlier of the Maturity Date and the date the principal hereunder is accelerated and shall
be computed on the basis of a 360-day year and the actual number of days elapsed. All payments due hereunder (to the extent not converted
in accordance with the terms hereof into common shares of the Borrower (the “Common Stock”)) shall be made in lawful
money of Canada. All payments shall be made at such address as the Holder shall hereafter give to the Borrower by written notice made
in accordance with the provisions of this Note. Whenever any amount expressed to be due by the terms of this Note is due on any day which
is not a business day, the same shall instead be due on the next succeeding day which is a business day and, in the case of any interest
payment date which is not the date on which this Note is paid in full, the extension of the due date thereof shall not be taken into account
for purposes of determining the amount of interest due on such date. As used in this Note, the term “business day” shall mean
any day other than a Saturday, Sunday or a day on which commercial banks in the city of Toronto, Ontario are authorized or required by
law or executive order to remain closed.
This Note is free from all taxes, liens,
claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders
of the Borrower and will not impose personal liability upon the holder thereof.
The following terms shall apply to this Note:
ARTICLE I. CONVERSION RIGHTS
1.1 Conversion Right. The Holder
shall have the right from time to time, and at any time, and ending on the Maturity Date to convert all or any part of the outstanding
and unpaid principal and/or interest of this Note into fully paid and non-assessable shares of Common Stock, as such Common Stock exists
on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such Common Stock shall hereafter be
changed or reclassified at the Conversion Price (as defined below) determined as provided herein (a “Conversion”);
provided, however, that in no event shall the Holder be entitled to convert any portion of this Note in excess of that
portion of this Note upon conversion of which the sum of (1) the number of shares of Common Stock beneficially owned by the Holder and
its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion
of the Notes or the unexercised or unconverted portion of any other security of the Borrower subject to a limitation on conversion or
exercise analogous to the limitations contained herein) and (2) the number of shares of Common Stock issuable upon the conversion
of the portion of this Note with respect to which the determination of this proviso is being made, would result in beneficial ownership
by the Holder and its affiliates of more than 19.99% of the outstanding shares of Common Stock (the “Maximum Share Amount”).
For purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section
1.8(1) of National Instrument 62-104 Take-Over Bids and Issuer Bids (“NI 62-104”). The number of shares of
Common Stock to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below)
by the applicable Conversion Price then in effect on the date specified in the notice of conversion, in the form attached hereto as Exhibit
A (the “Notice of Conversion”), delivered to Borrower by the Holder in accordance with Section 1.4 below; provided
that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably expected to result in,
notice) to the Borrower before 6:00 p.m. (Toronto Time) on such conversion date (the “Conversion Date”). The term
“Conversion Amount” means, with respect to any conversion of this Note, the sum of (1) the principal amount of this Note
to be converted in such conversion plus (2) at the Holder’s option, accrued and unpaid interest, if any.
The Borrower shall not effect any conversion
of this Note, and a Holder shall not have the right to convert any portion of this Note, pursuant to this Section 1.1 or otherwise, to
the extent that after giving effect to such issuance after conversion as set forth on the applicable Notice of Conversion, the Holder
(together with the Holder’s affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s
affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation
(as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and
its affiliates and Attribution Parties shall include the number of shares of Common Stock issuable upon conversion of this Note with respect
to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) conversion
of the remaining, non-converted portion of this Note beneficially owned by the Holder or any of its affiliates or Attribution Parties
and (ii) convert or conversion of the unconverted or non-converted portion of any other securities of the Borrower (including, without
limitation, any other Common Stock equivalents) subject to a limitation on conversion or convert analogous to the limitation contained
herein beneficially owned by the Holder or any of its affiliates or Attribution Parties. Except as set forth in the preceding sentence,
for purposes of this Section, beneficial ownership shall be calculated in accordance with applicable
regulatory definitions and the rules and regulations promulgated
thereunder, it being acknowledged by the Holder that the Borrower is not representing to the Holder that such calculation is in compliance
with Section 1.8(1) of NI 62-104 and the Holder is solely responsible for any filings required to be made in accordance therewith. To
the extent that the limitation contained in this Section applies, the determination of whether this Note is exercisable (in relation to
other securities owned by the Holder together with any affiliates and Attribution Parties) and of which portion of this Note is exercisable
shall be in the sole discretion of the Holder, and the submission of a Notice of Conversion shall be deemed to be the Holder’s determination
of whether this Note is exercisable (in relation to other securities owned by the Holder together with any affiliates and Attribution
Parties) and of which portion of this Note is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Borrower
shall have no obligation to verify or confirm the accuracy of such determination. The “Beneficial Ownership Limitation” shall
be 19.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common
Stock issuable upon conversion of this Note. The limitations contained in this paragraph shall apply to a successor holder of this Note.
1.2 [reserved].
1.3 Conversion Price. Subject to the
adjustments described herein, the conversion price (the “Conversion Price”) shall equal CAD $0.20.
1.4 Authorized Shares. The Borrower
covenants that during the period the conversion right exists, the Borrower will reserve from its authorized and unissued Common Stock
a sufficient number of shares, free from preemptive rights, to provide for the issuance of Common Stock upon the full conversion of this
Note issued pursuant to the Purchase Agreement (the “Reserved Amount”). The Borrower represents that upon issuance,
such shares will be duly and validly issued, fully paid and non-assessable. In addition, if the Borrower shall issue any securities or
make any change to its capital structure which would change the number of shares of Common Stock into which the Notes shall be convertible
at the then current Conversion Price, the Borrower shall at the same time make proper provision so that thereafter there shall be a sufficient
number of shares of Common Stock authorized and reserved, free from preemptive rights, for conversion of the outstanding Notes. The Borrower
(i) acknowledges that it has irrevocably instructed its transfer agent to issue certificates for the Common Stock issuable upon conversion
of this Note, and (ii) agrees that its issuance of this Note shall constitute full authority to its officers and agents who are charged
with the duty of executing stock certificates to execute and issue the necessary certificates for shares of Common Stock in accordance
with the terms and conditions of this Note.
1.5 Method of Conversion.
(a) Mechanics of Conversion.
Subject to Section 1.1, this Note may be converted by the Holder in whole or in part at any time from time to time after the Issue Date,
by (A) submitting to the Borrower a Notice of Conversion (by facsimile, e-mail or other reasonable means of communication dispatched
on the Conversion Date prior to 6:00 p.m. (Toronto time) and (B) subject to Section 1.5(b), surrendering this Note at the principal office of the Borrower.
(b) Surrender of Note Upon Conversion.
Notwithstanding anything to the contrary set forth herein, upon conversion of this Note in accordance with the terms hereof, the Holder
shall not be required to physically surrender this Note to the Borrower unless the entire unpaid principal amount of this Note is so
converted. The Holder and the Borrower shall maintain records showing the principal amount so converted and the dates of such conversions
or shall use such other method, reasonably satisfactory to the Holder and the Borrower, so as not to require physical surrender of this
Note upon each such conversion. In the event of any dispute or discrepancy, such records of the Borrower shall, prima facie, be
controlling and determinative in the absence of manifest error. Notwithstanding the foregoing, if any portion of this Note is converted
as aforesaid, the Holder may not transfer this Note unless the Holder first physically surrenders this Note to the Borrower, whereupon
the Borrower will forthwith issue and deliver upon the order of the Holder a new Note of like tenor, registered as the Holder may request,
representing in the aggregate the remaining unpaid principal amount of this Note. The Holder and any assignee, by acceptance of this
Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Note, the
unpaid and unconverted principal amount of this Note represented by this Note may be less than the amount stated on the face hereof.
(c) [reserved].
(d) Delivery of Common Stock
Upon Conversion. Upon receipt by the Borrower from the Holder of a facsimile transmission or e-mail (or other reasonable means of
communication) of a Notice of Conversion meeting the requirements for conversion as provided in this Section 1.5, the Borrower shall issue
and deliver or cause to be issued and delivered to or upon the order of the Holder certificates for the Common Stock issuable upon such
conversion within three (3) business days after such receipt (the “Deadline”) (and, solely in the case of conversion
of the entire unpaid principal amount hereof, surrender of this Note) in accordance with the terms hereof.
(e) Obligation of the Borrower
to Deliver Common Stock. Upon receipt by the Borrower of a Notice of Conversion, the Holder shall be deemed to be the holder of record
of the Common Stock issuable upon such conversion, the outstanding principal amount and the amount of accrued and unpaid interest on this
Note shall be reduced to reflect such conversion, and, unless the Borrower defaults on its obligations under this Article I, all rights
with respect to the portion of this Note being so converted shall forthwith terminate except the right to receive the Common Stock or
other securities, cash or other assets, as herein provided, on such conversion. If the Holder shall have given a Notice of Conversion
as provided herein, the Borrower’s obligation to issue and deliver the certificates for Common Stock shall be absolute and unconditional,
irrespective of the absence of any action by the Holder to enforce the same, any waiver or consent with respect to any provision thereof,
the recovery of any judgment against any person or any action to enforce the same, any failure or delay in the enforcement of any other
obligation of the Borrower to the holder of record, or any setoff, counterclaim, recoupment, limitation or termination, or any breach
or alleged breach by the Holder of any obligation to the Borrower, and irrespective of any other circumstance which might otherwise limit
such obligation of the Borrower to the Holder in connection with such conversion. The Conversion Date specified in the Notice of Conversion
shall be the Conversion Date so long as the Notice of Conversion is received by the Borrower before 6:00 p.m. (Toronto Time) on such date.
(f) Delivery of Common Stock
by Electronic Transfer. In lieu of delivering physical certificates representing the Common Stock issuable upon conversion, provided
the Borrower is participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer (“FAST”)
program, upon request of the Holder and its compliance with the provisions contained in Section 1.1 and in this Section 1.5, the Borrower
shall use its commercially reasonable best efforts to cause its transfer agent to electronically transmit the Common Stock issuable upon
conversion to the Holder by crediting the account of Holder’s Prime Broker with DTC through its Deposit Withdrawal At Custodian
(“DWAC”) system.
(g) Failure to Deliver Common
Stock Prior to Delivery Deadline. Without in any way limiting the Holder’s right to pursue other remedies, including actual
damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable upon conversion of this Note is not delivered
by the Deadline (other than a failure due to the circumstances described in Section 1.3 above, which failure shall be governed by such
Section) the Borrower shall pay to the Holder $100 per day in cash, for each day beyond the Deadline that the Borrower fails to deliver
such Common Stock until the Borrower issues and delivers a certificate to the Holder or credit the Holder’s balance account with
OTC for the number of shares of Common Stock to which the Holder is entitled upon such Holder’s conversion of any Conversion Amount
(under Holder’s and the Borrower’s expectation that any damages will tack back to the Issue Date). Such cash amount shall
be paid to Holder by the fifth (5th) day of the month following the month in which it has accrued or, at the option of the Holder (by
written notice to the Borrower by the first day of the month following the month in which it has accrued), shall be added to the principal
amount of this Note, in which event interest shall accrue thereon in accordance with the terms of this Note and such additional principal
amount shall be convertible into Common Stock in accordance with the terms of this Note. The Borrower agrees that the right to convert
is a valuable right to the Holder. The damages resulting from a failure, attempt to frustrate, interference with such conversion right
are difficult if not impossible to qualify. Accordingly the parties acknowledge that the liquidated damages provision contained in this
Section 1.5(g) are justified.
(h) Rescindment of
a Notice of Conversion. If (i) the Borrower fails to respond to Holder within one (1) business day from the Conversion Date confirming
the details of Notice of Conversion, (ii) the Borrower fails to provide any of the Common Stock requested in the Notice of Conversion
within two (2) business days from the date of receipt of the Note of Conversion, (iii) the Holder is unable to procure a legal opinion
required to have the Borrower’s Common Stock issued unrestricted and/or deposited to sell for any reason related to the Borrower’s
standing, (iv) the Holder is unable to deposit the Borrower’s Common Stock requested in the Notice of Conversion for any reason
related to the Borrower’s standing, (v) at any time after a missed Deadline, at the Holder’s sole discretion, or (vi) if OTC
Markets changes the Borrower’s designation to ‘Limited Information’ (Yield), ‘No Information’ (Stop Sign),
‘Caveat Emptor’ (Skull & Crossbones), ‘OTC’, ‘Other OTC’ or ‘Grey Market’ (Exclamation
Mark Sign) or other trading restriction on the day of or any day after the Conversion Date, the Holder maintains the option and sole discretion
to rescind the Notice of Conversion (“Rescindment”) with a “Notice of Rescindment.”
1.6 Concerning the Shares.
Until such time as the shares of Common
Stock issuable upon conversion of this Note have been registered under the Act or otherwise may be sold without any restriction as to
the number of securities as of a particular date that can then be immediately sold, each certificate for shares of Common Stock issuable
upon conversion of this Note that has not been so included in an effective registration statement or that has not been sold pursuant to
an effective registration statement or an exemption that permits removal of the legend, shall bear a legend substantially in the following
form, as appropriate:
“UNLESS PERMITTED UNDER SECURITIES
LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE [THE DATE THAT IS 4 MONTHS AND ONE DAY AFTER THE ISSUE DATE].”
Until the expiry of the applicable hold period, neither the Note
nor the underlying Common Stock can be traded through the facilities of the Canadian Securities Exchange.
1.7 Effect of Certain Events.
(a) Effect of Asset Sale.
The sale, conveyance or disposition of all or substantially all of the assets of the Borrower or any of its direct or indirect subsidiaries
shall be deemed to be an Event of Default (as defined in Article III) pursuant to which the Borrower shall be required to pay to the Holder
upon the consummation of and as a condition to such transaction an aggregate amount equal to the unpaid principal amount and unpaid interest
(if any). For clarity, Holder and the Borrower shall retain their respective rights to convert the principal and unpaid interest (if any)
hereunder until the date such sale transaction closes. “Person” shall mean any individual, corporation, limited liability
company, partnership, association, trust or other entity or organization.
(b) Effect of Merger, Consolidation,
Etc. If, at any time when this Note is issued and outstanding and prior to conversion of all of the Notes, there shall be any merger,
amalgamation, consolidation, exchange of shares, recapitalization, reorganization, or other similar event, as a result of which shares
of Common Stock shall be changed into the same or a different number of shares of another class or classes of stock or securities of
the Borrower or another entity, or the effectuation by the Borrower of a transaction or series of related transactions in which more
than 50% of the voting power of shares of Common Stock is disposed of, then, in Holder’s discretion, Holder may require one of
the following by providing written notice to the Borrower at any time no later than six (6) months after the date such transaction closes:
(i) the obligations outstanding hereunder shall be paid in
full no later than six (6) months after the date such transaction closes, and notwithstanding anything to the contrary herein, the failure
to make such payment in a timely manner shall be an automatic Event of Default under Section 3.1 and the obligations hereunder shall
accelerate and Default Interest shall begin to accrue automatically upon such failure to pay, whether or not Holder notifies the Borrower
of such acceleration or accrual; or
(ii)
Holder shall have the right to receive upon conversion of this Note, upon the basis and upon the terms and conditions specified herein
and in lieu of the shares of Common Stock immediately theretofore issuable upon conversion, such stock, securities or assets which the
Holder would have been entitled to receive in such transaction had this Note been converted in full immediately prior to such transaction
(without regard to any limitations on conversion set forth herein), and in any such case appropriate provisions shall be made with respect
to the rights and interests of the Holder of this Note to the end that the provisions hereof (including, without limitation, provisions
for adjustment of the Conversion Price and of the number of shares issuable upon conversion of the Note) shall thereafter be applicable,
as nearly as may be practicable in relation to any securities or assets thereafter deliverable upon the conversion hereof.
The Borrower shall not affect any transaction described in
this Section 1.7(b) unless (x) it first gives, to the extent practicable, thirty (30) days prior written notice (but in any event at
least fifteen (15) days prior written notice) of the record date of the special meeting of shareholders to approve, or if there is no
such record date, the consummation of, such merger, consolidation, exchange of shares, recapitalization, reorganization or other similar
event or sale of assets (during which time the Holder shall be entitled to convert this Note) and (y) the resulting successor or acquiring
entity (if not the Borrower) assumes by written instrument the obligations of this Note. The above provisions shall similarly apply to
successive consolidations, mergers, amalgamations, sales, transfers or share exchanges.
(c) Adjustment Due to Distribution.
If the Borrower shall declare or make any distribution of its assets (or rights to acquire its assets) to holders of Common Stock as a
dividend, stock repurchase, by way of return of capital or otherwise (including any dividend or distribution to the Borrower’s shareholders
in cash or shares (or rights to acquire shares) of capital stock of a subsidiary (i.e., a spin-off)) (a “Distribution”),
then the Holder of this Note shall be entitled, upon any conversion of this Note after the date of record for determining shareholders
entitled to such Distribution, to receive the amount of such assets which would have been payable to the Holder with respect to the shares
of Common Stock issuable upon such conversion had such Holder been the holder of such shares of Common Stock on the record date for the
determination of shareholders entitled to such Distribution.
(d) Purchase Rights. If,
at any time when any Notes are issued and outstanding, the Borrower issues any convertible securities or rights to purchase stock, warrants,
securities or other property (the “Purchase Rights”) pro rata to the record holders of any class of Common Stock, then the
Holder of this Note will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which
such Holder could have acquired if such Holder had held the number of shares of Common Stock acquirable upon complete conversion of this
Note (without regard to any limitations on conversion contained herein) immediately before the date on which a record is taken for the
grant, issuance or sale of such Purchase Rights or, if no such record is taken, the date as of which the record holders of Common Stock
are to be determined for the grant, issue or sale of such Purchase Rights.
(e) Notice of Adjustments.
Upon the occurrence of each adjustment or readjustment of the Conversion Price as a result of the events described in this Section 1.6,
the Borrower, at its expense, shall promptly, but no later than 10 business days after such adjustment or readjustment becomes effective,
compute such adjustment or readjustment and prepare and furnish to the Holder a certificate setting forth such adjustment or readjustment
and showing in detail the facts upon which such adjustment or readjustment is based. The Borrower shall, upon the written request at
any time of the Holder, furnish to such Holder a like certificate setting forth (i) such adjustment or readjustment, (ii) the Conversion
Price at the time in effect and (iii) the number of shares of Common Stock and the amount, if any, of other securities or property which
at the time would be received upon conversion of the Note.
1.8 Status as Shareholder. Upon submission of a Notice
of Conversion by a Holder, (i) the shares covered thereby (other than the shares, if any, which cannot be issued because their issuance
would exceed such Holder’s allocated portion of the Reserved Amount or Maximum Share Amount) shall be deemed converted into shares
of Common Stock and (ii) the Holder’s rights as a Holder of such converted portion of this Note shall cease and terminate, excepting
only the right to receive certificates for such shares of Common Stock and to any remedies provided herein or otherwise available at
law or in equity to such Holder because of a failure by the Borrower to comply with the terms of this Note. Notwithstanding the foregoing,
if a Holder has not received certificates for all shares of Common Stock prior to the tenth (10th) business day after the expiration
of the Deadline with respect to a conversion of any portion of this Note for any reason, then (unless the Holder otherwise elects to
retain its status as a holder of Common Stock by so notifying the Borrower) the Holder shall regain the rights of a Holder of this Note
with respect to such unconverted portions of this Note and the Borrower shall, as soon as practicable, return such unconverted Note to
the Holder or, if the Note has not been surrendered, adjust its records to reflect that such portion of this Note has not been converted.
In all cases, Holder shall retain all of its rights and remedies for the Borrower’s failure to convert this Note.
1.9 Security. As continuing security
for the due and timely payment by the Borrower of the obligations under this Article I, the Borrower shall grant a general security interest
in favour of the Holder over all of its present and future property, assets and undertakings and deliver to the Holder the security contemplated
in Section 1.7. Royal Group Resources Ltd. may act as agent of the Lender in connection with the security granted under this Debenture
(the “Agent”).
1.10 Prepayment. This
Note may be prepaid in whole or in part, subject to payment of a prepayment penalty in the amount of 7% of the amount of the principal
being paid; provided, that (i) the Borrower shall provide Holder with thirty (30) days’ advance notice of its intent to prepay this
Note, during which time Holder may convert this Note or any portion of this Note in accordance with the terms stated herein, and (ii)
if the Holder converts this Note pursuant to this Section 1.10, it shall not be restricted by the Maximum Share Amount.
1.11 Delivery of Security.
The Borrower covenants and agrees to execute and deliver to the Holder or the Agent the following agreements, security and instruments,
each in form and substance satisfactory to the Holder in its sole and absolute discretion, on or before October 31, 2022 (except otherwise
noted in this Section 1.11)(or such later date as the Holder or its Agent may agree in writing):
(a) a general security agreement
from the Borrower to and in favour of the Holder under which the Borrower shall, among other things, grant to and in favour of the Holder
a security interest and charge over all of property, assets and undertaking of the Borrower, and
such security interest and charge shall be a first ranking security interest in
and charge of such property, assets and undertaking;
(b) a securities pledge agreement
from the Borrower to and in favour of the Holder under which the Borrower shall, among other things, grant to and in favour of the Holder
a first priority security interest in, and pledge of the equity ownership interest held by the Borrower in RWB Michigan LLC;
(c) an unlimited guarantee and
general security agreement from RWB Platinum Vape Inc. to and in favour the Holder, pursuant to which
(i) under the unlimited guarantee, RWB Platinum Vape Inc. will guarantee the payment, performance and discharge in full of all debts, liabilities
and obligations of or owing by the Borrower to the Holder; and
(ii)
under such general security agreement, RWB Platinum Vape Inc. shall, among other things, grant to and in favour of the Lender a security
interest and charge over all of property, assets and undertaking of RWB Platinum Vape Inc., and such security interest and charge shall
be a second ranking security interest in and charge of such property, assets and undertaking (being only behind the security held by De
Zen Investments Canada Limited and Sergio De Zen Investments Limited);
(d) within 30 days following the
repayment of the Amended and Restated Credit Agreement dated as of January 10, 2020 (as may be amended, restated, supplemented, or otherwise
modified from time to time) among Bridging Finance Inc., RWB Illinois Inc., Mid- American Growers, Inc., Pharmaco, Inc. and Michicann
Medical Inc. (the “RWB Michigan Bridging Loan”), an unlimited guarantee and general security agreement from Michicann
Medical Inc. to and in favour of the Holder, pursuant to which:
(i)
under the unlimited guarantee, Michicann Medical Inc. will guarantee the payment, performance and discharge in full of all debts, liabilities
and obligations of or owing by the Borrower to the Holder; and
(ii) under such general security agreement, Michicann Medical Inc. shall, among other things, grant to and in favour of the Holder a security
interest and charge over all of property, assets and undertaking of Michicann Medical Inc., and such security interest and charge shall
be a first ranking security interest in and charge of such property, assets and undertaking;
(e) within 30 days following the
written notice by the Holder to the Borrower requesting security from a direct or indirect subsidiary of the Borrower, an unlimited guarantee
and general security agreement from such subsidiary (excluding RWB Florida LLC and any subsidiary that is restricted from granting security
under the RWB Michigan Bridging Loan, until all amounts owing under such loan have been repaid) to and in favour of the Holder, pursuant
to which:
(i) under the unlimited guarantee, such subsidiary will guarantee the payment, performance and discharge in full of all debts, liabilities
and obligations of or owing by the Borrower to the Holder; and
(ii) under such general security agreement, such subsidiary shall, among other things, grant to and in favour of the Holder a security interest
and charge over all of property, assets and undertaking of such subsidiary, and such security interest and charge shall be a first ranking
security interest in and charge of such property, assets and undertaking; and
(iii) such corporate resolutions, certificates, registrations, filings, legal opinions and such other related documents with respect to the
foregoing set forth in this Section 1.11 as shall be requested by the Holder, in its sole and absolute discretion.
ARTICLE II. CERTAIN COVENANTS
2.1 Borrowings. Until the Maturity
Date, the Borrower shall not, without the Holder’s written consent, create, incur, assume guarantee, endorse, contingently agree
to purchase or otherwise become liable upon the obligation of any person, firm, partnership, joint venture or corporation, except by the
endorsement of negotiable instruments for deposit or collection, or suffer to exist any liability for borrowed money, except (a) borrowings
in existence or committed on the date hereof and of which the Borrower has informed Holder in writing prior to the date hereof, (b) indebtedness
to trade creditors financial institutions or other lenders incurred in the ordinary course of business or (c) borrowings, the proceeds
of which shall be used to repay this Note.
2.2 Sale of Assets. So long as the
Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s written consent, sell, lease or
otherwise dispose of any significant portion of its assets or the assets of any direct or indirect subsidiary outside the ordinary course
of business. In no event while this Note is outstanding shall the Borrower sell, convey, assign, encumber, pledge, gift or transfer any
of the ownership interests in its direct or indirect subsidiaries or sell, lease, convey, assign, encumber, pledge, gift or transfer any
of the assets of its direct or indirect subsidiaries except for inventory and obsolete or worn or damaged equipment sold in the ordinary
course of business.
2.3 Preservation of Existence, etc.
The Borrower shall maintain and preserve, and cause each of its direct or indirect subsidiaries to maintain and preserve, its existence,
rights and privileges, and become or remain, and cause each of its direct or indirect subsidiaries (other than dormant subsidiaries that
have no or minimum assets) to become or remain, duly qualified and in good standing in each jurisdiction in which the character of the
properties owned or leased by it or in which the transaction of its business makes such qualification necessary.
2.4 Non-circumvention. The Borrower
hereby covenants and agrees that the Borrower will not, by amendment of its certificate of incorporation, notice of articles or articles,
or through any reorganization, transfer of assets, consolidation, merger, amalgamation, scheme of arrangement, dissolution, issue or sale
of securities, or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms of
this Note, and will at all times in good faith carry out all the provisions of this Note and take all action as may be required to protect
the rights of the Holder.
2.5 Expenses. The Borrower
shall pay (a) all reasonable out-of-pocket expenses incurred by the Holder, including the reasonable fees, charges and disbursements of
counsel for the Holder and all applicable taxes, in connection with the preparation and administration of this Debenture and security
documents as described in Section 1.11 (the “Collateral Security”), together with any other document, instrument or
agreement now or hereafter entered into in connection with this Debenture and the Collateral Security, including without limitation, such
documents, instruments or agreements set out or described in Section 1.11, as such documents, instruments or agreements may be amended,
modified or supplemented from time to time (the “Loan Documents”), (b) all reasonable out-of-pocket expenses incurred
by the Holder and all applicable taxes, including the reasonable fees, charges and disbursements of counsel for the Holder, in connection
with any amendments, modifications or waivers of the provisions hereof or of any of the other Loan Documents (whether or not the transactions
contemplated hereby or thereby shall be consummated), and (c) all out-of-pocket expenses incurred by the Holder, including fees, charges
and disbursements of any counsel for the Holder and all applicable taxes, in connection with the assessment, enforcement or protection
of its rights in connection with this Debenture and the other Loan Documents. All amounts due under this Section 2.5 shall be payable
not later than five days after written demand therefor.
ARTICLE III. EVENTS OF DEFAULT
If any of the following events of default (each, an “Event of Default”)
shall occur:
3.1 Failure
to Pay Principal or Interest. The Borrower fails to pay the principal hereof or interest thereon when due on this Note, whether at
maturity, upon acceleration or otherwise.
3.2
Conversion and the Shares. the Borrower (i) fails to issue shares of Common Stock to the Holder (or announces or threatens in writing
that it will not honor its obligation to do so) upon exercise by the Holder of the conversion rights of the Holder in accordance with
the terms of this Note, (ii) fails to transfer or cause its transfer agent to transfer (issue) (electronically or in certificated form)
any certificate for shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required
by this Note, (iii) directs its transfer agent not to transfer or delays, impairs, and/or hinders its transfer agent in transferring (or
issuing) (electronically or in certificated form) any certificate for shares of Common Stock to be issued to the Holder upon conversion
of or otherwise pursuant to this Note as and when required by this Note, (iv) fails to remove (or directs its transfer agent not to remove
or impairs, delays, and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions
in respect thereof) on any certificate for any shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to
this Note as and when required by this Note (or makes any written announcement, statement or threat that it does not intend to honor the
obligations described in this paragraph) and any such failure shall continue uncured (or any written announcement, statement or threat
not to honor its obligations shall not be rescinded in writing)
for three (3) business days after the Holder shall have delivered
a Notice of Conversion, (v) fails to remain current in its obligations to its transfer agent, (vi) causes a conversion of this Note to
be delayed, hindered or frustrated due to a balance owed by the Borrower to its transfer agent, (vii) fails to repay Holder, within forty
eight (48) hours of a demand from the Holder, any amount of funds advanced by Holder to the Borrower’s transfer agent in order to
process a conversion, and/or
(viii) fails to reserve sufficient amount of shares of common
stock to satisfy the Reserved Amount at all times.
3.3
Breach of Covenants. The Borrower breaches any material covenant or other material term or condition contained in this Note and
such breach continues for a period of fifteen
(15) days after written notice thereof to the Borrower from the Holder.
3.4
Breach of Representations and Warranties. Any representation or warranty of the Borrower made herein or in any agreement, statement
or certificate given in writing pursuant hereto or in connection herewith, shall be false or misleading in any material respect when made
and the breach of which has (or with the passage of time will have) a material adverse effect on the rights of the Holder with respect
to this Note.
3.5
Receiver or Trustee. The Borrower or any direct or indirect subsidiary of the Borrower shall make an assignment for the benefit
of creditors or commence proceedings for its dissolution, or apply for or consent to the appointment of a receiver or trustee for it or
for a substantial part of its property or business, or such a receiver or trustee shall otherwise be appointed for the Borrower or for
a substantial part of its property or business without its consent and shall not be discharged within sixty (60) days after such appointment.
3.6
Judgments. Any money judgment, writ or similar process shall be entered or filed against the Borrower or any direct or indirect
subsidiary of the Borrower or any of its property or other assets for more than $625,000, and shall remain unvacated, unbonded or unstayed
for a period of forty five (45) days unless otherwise consented to by the Holder, which consent will not be unreasonably withheld.
3.7
Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings, voluntary or involuntary, for
relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower or any direct or indirect
subsidiary of the Borrower, or the Borrower admits in writing its inability to pay its debts generally as they mature, or have filed against
it an involuntary petition for bankruptcy relief, all under federal, provincial or state laws as applicable or the Borrower admits in
writing its inability to pay its debts generally as they mature, or have filed against it an involuntary petition for bankruptcy relief,
all under international, federal or state laws as applicable.
3.8
Delisting of Common Stock. the Borrower shall fail to maintain the listing of the Common Stock on at least one of the OTC Pink,
OTCQB, Nasdaq National Market, Nasdaq Small Cap Market, New York Stock Exchange, NYSE MKT, CSE, TSX, TSX Venture Exchange or an equivalent
replacement exchange
3.9
Failure to Comply with the Exchange Act; Reporting Issuer Status. the Borrower shall fail to use commercially reasonable efforts
to comply with the reporting requirements under applicable securities laws and rules and policies (including but not limited to becoming
delinquent in its filings); and/or the Borrower fails to use commercially reasonable efforts to maintain its status as a “reporting
issuer” in British Columbia and Ontario, not in default of any requirement of the applicable securities laws.
3.10 Liquidation. Any dissolution, liquidation, or winding up of the Borrower or any substantial portion of its business including its
direct or indirect subsidiaries on an aggregate basis.
3.11 Cessation of Operations. Any permanent cessation of operations by the Borrower or the Borrower admits in writing it is otherwise
generally unable to pay its debts as such debts become due, provided, however, that any disclosure of the Borrower or the Borrower’s
ability to continue as a “going concern” shall not be an admission that the Borrower or Borrower cannot pay its debts as they
become due.
3.12 Cessation of Trading. Any cessation of trading of the Common Stock on at least one of the OTC Pink, OTCQB, Nasdaq National Market,
Nasdaq Small Cap Market, New York Stock Exchange, NYSE MKT, CSE, TSX or an equivalent replacement exchange, and such cessation of trading
shall continue for a period of five consecutive (5) Trading Days.
3.13 Bid Price. the Borrower shall lose the “bid” price for its Common Stock ($0.0001 on the “Ask” with zero
market makers on the “Bid” per Level 2) and/or a market (including the OTC Pink, OTCQB, OTCQX or an equivalent replacement
exchange).
3.14
OTC Markets Designation. OTC Markets changes the Borrower’s designation to ‘No Information’ (Stop Sign), ‘Caveat
Emptor’ (Skull and Crossbones), or ‘OTC’, ‘Other OTC’ or ‘Grey Market’ (Exclamation Mark Sign).
3.16
Cross-Default. Notwithstanding anything to the contrary contained in this Note, a breach or default of any covenant or other term
or condition contained in any agreement relating to debt in excess of $100,000, where such default would entitle the holder to accelerate
repayment of the debt and such default is not cured or waived in writing within the lesser of (i) any applicable grace period, and (ii)
thirty (30) business days.
3.17
Replacement of Transfer Agent. In the event that the Borrower proposes to replace its transfer agent, the Borrower fails to provide,
prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered
pursuant to this Note (including but not limited to the provision to irrevocably reserve shares of Common Stock in the Reserved Amount)
signed by the successor transfer agent to the Borrower.
3.18
Maintenance of Assets. The failure by the Borrower to maintain in any material respect any material intellectual property rights,
personal, real property or other assets which are necessary to conduct its business (whether now or in the future), or any disposition
or
conveyance of any material asset of the Borrower or any of
its director or indirect subsidiary outside the ordinary course of business. For greater certainty, the purchase or sale of any property
or assets of RWB Florida or the equity securities of RWB Florida shall not constitute ordinary course of business.
3.19
Change of Control. The occurrence of any of the following: (1) the consummation of any transaction or series of transactions (including,
without limitation, any merger or consolidation) the result of which is that any Person or Persons (other than the Borrower or its subsidiaries)
becomes the beneficial owner, directly or indirectly, of more than 50% of the voting securities of the Borrower; (2) a merger, amalgamation,
plan of arrangement, sale, consolidation or similar transaction of the Borrower or any subsidiary of the Borrower; or effect, approve
or authorize any change of control, or any recapitalization or reorganization of the Borrower or any subsidiary of the Borrower; or a
sale, transfer, conveyance, pledge, encumbrance, sub-license, assignment or other disposition, directly or indirectly, of all or substantially
all of the licenses, trademarks, patents, trade secrets or other intellectual property rights of the Borrower (including subsidiaries);
or (3) the direct or indirect sale, transfer, conveyance or other disposition in one or more series of related transactions, of all or
substantially all of the assets of the Borrower and the assets of its subsidiaries, taken as a whole, to one or more Persons (other than
the Borrower or its subsidiaries).
From and after the date of this Note, an Event of Default
shall not be deemed to have occurred unless and until the Holder has notified the Borrower in writing of such Event of Default and the
Borrower has failed to cure such Event of Default or has failed to pay the Note in full, in either case, within fifteen (15) business
days (or such longer period as may be provided in such Event of Default) after the Borrower receives such notice.
Upon the occurrence of any Event of Default, the Note shall
become immediately due and payable and the interest shall increase to Default Interest (a) with respect to Events of Default other than
those set forth in Section 3.7 above (but subject to Section 1.7(b)), upon Holder’s delivery of written notice of acceleration to
Borrower, and (b) with respect to an Event of Default under Section 3.7, automatically and without notice. In addition, Holder shall be
entitled to all other remedies under law and equity, including those of a secured creditor. If the Holder shall commence an action or
proceeding to enforce any provisions of this Note, including, without limitation, engaging legal counsel, then if the Holder prevails
in such action, the Holder shall be reimbursed by the Borrower for its attorneys' fees and other costs and expenses incurred in the investigation,
preparation and prosecution of such action or proceeding.
ARTICLE IV. MISCELLANEOUS
4.1 Failure or Indulgence Not Waiver.
No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other
right, power or privileges. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies
otherwise available.
4.2 Notices. All notices, demands,
requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified
herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid,
(iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, electronic mail,
or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice.
Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery
by electronic mail or facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number
designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business
day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received)
or
(b) on the second business day following the date of mailing
by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur.
The addresses for such communications shall be:
If to the Borrower or the Borrower, to:
Red White and Bloom Brands Inc.
810-789 West Pender Street
Vancouver, British
Columbia
Canada, V6C 1H2
Attn: Brad Rogers or CEO
Email: [redacted]
With a copy to (which copy shall not constitute notice):
Gowling WLG
1 First Canadian Place
100 King Street West, Suite 1600
Toronto, Ontario M5X 1G5
Attn: [redacted]
Email: [redacted]
If to the Holder:
C-Point Investments Limited
Attn: Colby De Zen
Email: [redacted]
With a copy to (which copy shall not constitute notice):
McCarthy Tétrault
Suite 5300
TD Bank Tower
Box 48, 66 Wellington Street West
Toronto, Ontario M5K 1E6
Attn: [redacted]
Email: [redacted]
4.3 Amendments. This Note and any
provision hereof may only be amended by an instrument in writing signed by the Borrower and the Holder. The term “Note” and
all reference thereto, as used throughout this instrument, shall mean this instrument (and the other Notes issued pursuant to the Purchase
Agreement) as originally executed, or if later amended or supplemented, then as so amended or supplemented.
4.4 Assignability. This Note shall
be binding upon the Borrower and its successors and assigns, and shall inure to be the benefit of the Holder and its successors and assigns.
Borrower shall not assign this Note or any rights or obligations hereunder without the prior written consent of Holder. Holder may assign
its rights hereunder without approval of Borrower.
4.5 Governing Law. This Note shall
be governed by and construed in accordance with the laws of the Province of Ontario without regard to principles of conflicts of laws.
Any action brought by either party against the other concerning the transactions contemplated by this Note shall be brought only in the
courts of Ontario located in Toronto, Ontario. The parties to this Note hereby irrevocably waive any objection to jurisdiction and venue
of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non
conveniens. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action
or proceeding in connection with this Note by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence
of delivery) to such party at the address in effect for notices to it under this Note and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve
process in any other manner permitted by law.
4.6 Notice of Corporate Events.
Except as otherwise provided below, the Holder of this Note shall have no rights as a Holder of Common Stock unless and only to the extent
that it converts this Note into Common Stock. The Borrower shall provide the Holder with prior notification of any meeting of the Borrower’s
shareholders (and copies of proxy materials and other information sent to shareholders). In the event of any taking by the Borrower of
a record of its shareholders for the purpose of determining shareholders who are entitled to receive payment of any dividend or other
distribution, any right to subscribe for, purchase or otherwise acquire (including by way of merger, consolidation, reclassification or
recapitalization) any share of any class or any other securities or property, or to receive any other right, or for the purpose of determining
shareholders who are entitled to vote in connection with any proposed sale, lease or conveyance of all or substantially all of the assets
of the Borrower or any proposed liquidation, dissolution or winding up of the Borrower, the Borrower shall mail a notice to the Holder,
at least twenty (20) days prior to the record date specified therein (or thirty (30) days prior to the consummation of the transaction
or event, whichever is earlier), of the date on which any such record is to be taken for the purpose of such dividend, distribution, right
or other event, and a brief
statement regarding the amount and character of such dividend,
distribution, right or other event to the extent known at such time. The Borrower shall make a public announcement of any event requiring
notification to the Holder hereunder substantially simultaneously with the notification to the Holder.
4.7 Usury. If it shall be found that
any interest or other amount deemed interest due hereunder violates the applicable law governing usury, the applicable provision shall
automatically be revised to equal the maximum rate of interest or other amount deemed interest permitted under applicable law. The Borrower
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 Borrower from paying all or a portion of the principal or interest on this Note.
4.8 Remedies. The Borrower acknowledges
that a breach by it of its obligations hereunder will cause irreparable harm to the Holder, by vitiating the intent and purpose of the
transaction contemplated hereby. Accordingly, the Borrower acknowledges that the remedy at law for a breach of its obligations under this
Note will be inadequate and agrees, in the event of a breach or threatened breach by the Borrower of the provisions of this Note, that
the Holder shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable
herein, to an injunction or injunctions restraining, preventing or curing any breach of this Note and to enforce specifically the terms
and provisions thereof, without the necessity of showing economic loss and without any bond or other security being required. No provision
of this Note shall alter or impair the obligation of the Borrower, which is absolute and unconditional, to pay the principal of, and interest
on, this Note at the time, place, and rate, and in the form, herein prescribed.
4.9 Severability. In the event that
any provision of this Note is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any
provision hereof which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision
hereof.
4.10 Waiver. Borrower
and any endorsers, sureties or guarantors hereof jointly and severally waive presentment and demand for payment, notice of intent to accelerate
maturity, notice of acceleration of maturity, protest and notice of protest and non-payment, all applicable exemption rights, valuation
and appraisement, notice of demand, and all other notices in connection with the delivery, acceptance, performance, default or enforcement
of the payment of this Note and the bringing of suit and diligence in taking any action to collect any sums owing hereunder.
DocuSign Envelope ID: 17C5778D-3C21-4EEE-9EC1-87666DBF611A
IN WITNESS WHEREOF, Borrower has caused this Note to be signed
in its name by its duly authorized officer as of the date first above written.
Borrower:
RED WHITE & BLOOM BRANDS INC.
By: /s/ "Brad Rogers"
Name: Brad Rogers
Title: Chief Executive Officer
Holder:
C-POINT
INVESTMENTS LIMITED
By: /s/ "Colby De Zen"
Name: Colby De Zen
Title:
President
EXHIBIT A
NOTICE OF CONVERSION
The undersigned hereby elects to convert
$ _______principal amount of the Note (defined below) [together with $ _______of accrued and unpaid interest thereto, totaling
$ _______] into that number of shares of Common Shares to be issued pursuant to the conversion of the Note (“Common Shares”)
as set forth below, of Red White & Bloom Brands Inc., a corporation formed under the laws of British Columbia (the “Company”),
according to the conditions of the convertible note of the Borrower dated as of September , 2022 (the “Note”), as of the date
written below. No fee will be charged to the Holder for any conversion, except for transfer taxes, if any.
Box Checked as to applicable instructions:
[ ] Company shall electronically transmit
the Common Shares issuable pursuant to this Notice of Conversion to the account of the undersigned or its nominee with DTC through its
Deposit Withdrawal At Custodian system (“DWAC Transfer”).
Name of DTC Prime Broker:
Account Number:
[ ] The undersigned hereby requests
that Company issue a certificate or certificates for the number of shares of Common Shares set forth below (which numbers are based on
the Holder’s calculation attached hereto) in the name(s) specified immediately below or, if additional space is necessary, on an
attachment hereto:
Name: [NAME]
Address: [ADDRESS]
| Date of Conversion: |
__________________ |
| Applicable Conversion Price: |
$ ________________ |
| Number of Common Shares to be Issued |
|
| Pursuant to Conversion of the Note: |
__________________ |
| Amount of Principal Balance Due remaining |
|
| Under the Note after this conversion: |
__________________ |
| Accrued and unpaid interest remaining: |
__________________ |
C-POINT INVESTMENTS LIMITED.
By: ____________________________
Name: [NAME]
Title: [TITLE]
Date: [DATE]
Exhibit 99.3
U.S. $20,112,015.00 Effective Ju . h , e 4, 2021 NOTE BEING INDEBTED, FOR VALUE RECEIVED, the undersigned, jointly and severally, if p,ore than one, (the "Borrower") promises to pay to the order of M&V INVESTMENT ONE LLC, a Florida limited liability company (the "Lender"), or its successors or assigns, at its offices at 6903 Congress Street, iNew Port Richey, FL 33653 , the sum of TWENTY MILLION ONE HUNDRED TWELVE THOUSAND FIFTEEN AND 00/100 DOLLARS ($20,112,015.00), together with interest on the unpaid balance, calculated in t e manner hereinafter stated, from the dates of disbursements until maturity, both principal and interest being payabl in lawful money of the United States of America. INTEREST RATE . The interest charged on the unpaid principal balance owed pursuant to this Note is an interest rate of eight percent ( 8 . 00 % ) per annum (the "Base Interest Rate") . Interest shall be calculated onia 360 - day year based on actual days elapsed . Interest on $ 18 , 896 , 390 . 00 shall be charged from the effective date of this Note through June 10 , 2021 . Thereafter interest on $ 20 , 112 , 015 . 00 shall be payable in accordance with th payment provisions of this Note as set forth below . ADDITIONAL INTEREST . In addition to the Base Interest Rate, the Borrower shall owe : additional interest on the principal balance, and Adjusted Principal Balance, as applicable (the "Additional Interest"), which Additional Interest shall be due upon the execution of this Note and on the Anniversary Date and Second Anniversary Date . The payment of Additional Interest shall be made by Red, White and Bloom Brands, Inc . , a British Columbia corporation (the "Guarantor") issuing Common Shares of the Guarantor . Upon the execution of this Note, the Guarantor shall issue to the Lender 753 , 385 Common Shares of the Guarantor . Thereafter, on the Anniversary Date and on the Second Anniversary Date, the Guarantor shall issue Common Shares ofthe,Guarantor in an amount equal to four ( 4 % ) percent of the Adjusted Principal Balance existing at the time of the Anniversary Date and Second Anniversary Date, as applicable, based on the Canadian Securities Exchange at the volume weighted average trading price for a period of fifteen ( 15 ) consecutive trading days prior to the Anniversary Date and Second Anniversary Date, as applicable, of this Note . In the event the Guarantor defaults under its obligation to issue Common Shares of the Guarantor to the Lender, as Additional Interest, then at the option of the Lender, the Lender shall be entitled to the cash equivalent of the Additional Interest . ' PAYMENTS . Interest only payments, at the Base Interest Rate, shall accrue annually and shall be added to the principal balance (the "Adjusted Principal Balance") on each anniversary date of the Note (the "Anniversary Date") of the Loan commencing on June 4 , 2022 and thereafter on June 4 , 2023 (the "Second Anniversary Date") and on June 4 , 2024 (the "Maturity Date"), at which time the then Adjusted Principal Balance remaining, together with the interest accrued thereon and the Additional Interest shall be fully due and payable without demand . CONVERSION TO EQUITY . As additional consideration advancing the funds to the Borrower in accordance with terms of this Note, the Borrower and Guarantor have agreed that the Lender can convert all or any portion of the Adjusted Principal Balance of this Note at a price of US $ 2 . 75 per share of Common' Shares of Guarantor (subject to standard adjustments for reorganization transactions such as share consolidations or splits) at any time prior to the Maturity Date by surrendering the Note at the office of the Guarantor with written notice of such conversion . The Note shall be deemed to be surrendered for conversion on the date (the "Date of Conversion") on which it is so surrendered, and in the event that the Note is surrendered by mail or other means of delivery, on the date in which it is received by the Guarantor during regular business hours, provided that if the Note is strrendered for conversion on a day on which the register of the Guarantor's securities is closed, the Date of Conversibn shall be the date such register is next reopened . The Lender will be entitled to be entered into in the books ofthe[Guarantor as at the applicable Date of Conversion as the holder of the number of Common Shares of the Guarantorinto which this Note is converted in accordance with the provisions hereof and, as soon as practicable thereafter, the Borrower will cause the Guarantor to deliver to Lender a certificate or direct registration statement for such Comtrion Shares entered . The Lender acknowledges that the Guarantor is not required to issue fractional Common Sliares upon conversion of the Note . If any fractional interest in a Common Share would, but for the provisions hereof, be deliverable upon the conversion of any amount of the Note, the number of Common Shares to which the Lender is entitled upon conversion will be rounded down to the next whole number . Upon conversion, the Borrower 1 will cause PREPARED FOR AND RETURN TO: Joseph W. Gaynor, Esq. Johnson , Pope, Bokor, Ruppel & Bums, LLP 911 Chesblut Street, Cleanvater, Florida 33756
2 the Guarantor to cancel the Note, and the Lender shall cancel the Note, provided : (i) all accrued interest ' has been paid by the Borrower, and (ii) Additional Interest as set forth in the Note has been either paid by the Borrofver or the Guarantor has satisfied its obligations with respect to the transfer of Common Shares of Guarantor to ,satisfy the Additional Interest owed the Lender ; and (iii) the amount of the Principal or Adjusted Principal not conyerted has been paid by the Borrower or the Guarantor . INTEREST LIMITATION . Notwithstanding any other provision of the Note or of any o the Loan Documents or any other instrument executed in connection with the loan evidenced hereby, it is expressly agreed that the amounts payable under this Note or under the other aforesaid instruments for the payment of inteiest or any other payment in the nature of or which would be considered as interest or other charge for the use or loanj of money shall not exceed the highest rate allowed by law, from time to time, to be charged by the Lender . In th event the provisions of this Note or the other documents referred to in this paragraph regarding the payment of interest or other payments in the nature of or which would be considered as interest or other charges for the use hr loan of money operate to produce a rate that exceeds such limitation, then the excess over such limitation Jm not be payable and the amount otherwise agreed to have been paid shall be reduced by the excess so that suchjlimitation will not be exceeded, and if any payment actually made shall result in such limitation being exceeded, the amount of the excess shall constitute and be treated as a payment on the principal hereof and shall operate to rel!uce such principal by the amount of such excess, or if in excess of the pr . incipal indebtedness, such excess shall be
3 TIME OF ESSENCE ; OVERDUE AMOUNTS . All overdue amounts owing hereunder ( : fOverdue Amounts") whether in respect of principal, Adjusted Principal Balance, interest, Additional Interest, including the failure to timely issue the Common Shares of the Guarantor, fees, expenses in connection with the dditional Interest, or otherwise, both before and after judgment, and in the case of expenses from the dates such expenses a e incurred, shall (to the extent permitted by law) their interest thereon at a rate equal to five percent ( 5 % ) per ¥ nnum m addition to interest at the contract rate (the "Default Interest Rate") . Such interest on Overdue Amounts snail accrue from day to day, be payable in arrears on demand and shall be compounded monthly on the last business day of each calendar month . In the event a judgment is obtained, the judgment amount shall bear interest at the Default Interest Rate recited herein or the rate of interest established by Section 55 . 03 Florida Statutes, whichever is the gre ter, until the full amount of the judgment is collected . OPTIONAL PREPAYMENT . The Borrower may prepay the principal amount of this Note in cash at its option after the First Anniversary Date of the Note . Any payments made in cash pursuant to this provisiqn will be made by the Borrower to the Lender by way of wire transfer by or on behalf of the Borrower to the account specified therefore by the Lender no later than 5 : 00 PM (EST) on the due date therefore . All paymentJ received after such time will be considered for all purposes, as having been made on the next following business d y, unless the Lender otherwise agrees in writing . In the event the Borrower prepays any or all principal prior 19 the first Anniversary Date, the accrued interest for the first year shall be calculated as if no prepayment of principal was paid to Lender . DEFAULT. The happening of any of the following events shall constitute a default ("Event ofp ' efault"): (i) a failure to pay any monetary sum, whether principal or interest or any other amount under this Note ' : "hen due, or (ii) failure by the Guarantor to issue the Common Shares in connection with the Additional Interest, or (iii) failure by the Guarantor to issue the Common Shares of Guarantor in connection with the Conversion to Equity, (iv) a failure to cure any non - monetary default within thirty ( 30 ) days following Borrower's receipt of written notice from Lender advising of such default, or (v) a default which is not cured under the applicable cure period, if any, under that certain Secured Promissory Note in favor of High Street Capital Partners, LLC, a Delaware limite liability company and Borrower dated the 27 th day of April, 2021 in the amount of $ I 0 , 000 , 000 . 00 , having a iseven ( 7 ) month maturity date of November 27 , 2021 , or (vi) a default which is not cured under the applicable cure period, if any, under that certain Secured Promissory Note in favor of High Street Capital Partners, LLC, a Delawa 1 re limited liability company and Borrower dated the 27 th day of April, 2021 in the amount of $ I 8 , 000 , 000 . 00 ; f having a thirteen ( 13 ) month maturity date of May 27 , 2022 , (collectively, the "High Street Notes"), which High Street Notes are guaranteed by Red, White and Bloom Brands, Inc . , a British Colombia corporation ("Parent"), or (vii) a default under that certain Medical Marijuana Treatment Center License from the Florida Department of Health : originally issued to Nature's Way Nursery of Miami, Inc. pursuant to Section 381.986 (S)(a)ii.a. Florida Statutes and subsequently transferred to Acreage Florida, Inc . d/b/a The Botanist, under that certain Approval I from the Department of Health dated February 8 , 2019 as subsequently transferred to the Company under that Change in Ownership Request approved by the Department of Health under that certain Notice of Transfer of M mbership Interest reference number 00004478 , or (viii) the occurrence of . any other default as defined under this N 9 te or any of the Loan Documents or any other document executed in conjunction with the Loan . ACCELERATION . If Borrower fails to pay any monetary sum, whether principal or interest o any other amount due under this Note, within ten (IO) days following Borrower's receipt of written notice from Lender advising of such failure, or if a non - monetary default shall occur under any of the Loan Documents which is not cured within thirty ( 30 ) days following the delivery of notice, then, the principal sum above mentioned or any balance remaining unpaid shall be immediately due and payable from the Borrower to the Lender without further notice, together with all interest, all just and reasonable expenses, costs and disbursements, including all Jeasonable attorney's fee . ATTORNEY'S FEE . All parties liable for the payment of this Note agree to pay the Lender Ieasonable attorney's fees and costs, whether or not an action be brought, for the services of counsel employed after fuaturity or default to collect this Note or any principal or interest due hereunder, or to protect the security, if any, or cinforce the performance of any other agreement contained in this Note or the Loan Documents, including costs, attoiney's fees, and charges for paralegals, on any appeal, whether incurred for suit enforcement, protection of the ccillateral or collection, whether or not suit be brought, such attorneys' fees to include those incurred in appellate and ankruptcy proceedings, if any, and any administrative, arbitration or mediation proceedings .
4 CUMULATIVE REMEDIES . The remedies of the Lender, as provided herein or in the Loan Documents, shall be cumulative and concurrent, and may be pursued singularly, successively or together, at the sole dis retion of the Lender and may be exercised as often as occasion therefore shall arise . No act of omission or comrrtission of the Lender' . including specifically any failure to exercise any right, remedy or recourse, shall be deemeil to be a waiver or release of the same, such waiver or release to be effected only through a written document execu/ed by the Lender and then only to the extent specifically recited therein . A waiver or release with reference to any 'bne event shall not be construed as continuing, as a bar to, or as to a subsequent event . CROSS DEFAULT . A default in the terms and conditions of any other obligation of the Borro"!er or any affiliate of Borrower or Guarantor, or any affiliate of Guarantor, to the Lender of whatever nature or kind, including but not limited to this obligation, shall constitute a default of the terms and conditions of the obligations s t forth in this Note . Likewise, any default in the terms and conditions of this Note shall be and constitute a default'tinder the terms and conditions of any other obligation owed by the Borrower or any affiliate of Borrower or Guarant r, or any affiliate of Guarantor, to the Lender . Upon such default, any of the Borrower's checking, savings monies, or other deposits deposited with the Lender shall be immediately and irrevocably assigned to the Lender to apply to the obligations of the Borrower in any manner the Lender deems necessary . SET OFF . The Borrower and any other person obligated for the payment of this Note shall have no right of set off against the Lender under this Note or under any instruments securing this Note or the Loan DocJments, or any documents executed in connection with the loan evidenced hereby . ·' NOTICE. All notices required under the terms of this Note shall be deemed to have been duly:'.given and delivered either: (i) three (3) days after their deposit in the United States mail postage prepaid, or (ii) two (2) days after their deposit in a nationally recognized overnight courier service, or (iii) on the day of their personal delivery, if addressed or delivered to Lender or Borrower at their respective addresses set forth in this paragraph, or such other address as is specified in writing by any party to the others, provided that no change of addrciss by the Borrower shall be effective unless Borrower first serves notice of such change of address on Lender in ivriting by certified mail with return receipt requested, retaining a copy of such return receipt in its files . In any event, 1 Borrower shall exercise reasonable diligence to ensure that Lender is at all times advised of the correci address off each, and any changes thereto . Borrower: Lender: Copy to: RWB Florida LLC 14240 Greenhouse Avenue Granville, IL 62326 M&V Investment One LLC 6903 Congress Street New Port Richey, FL 33653 Attn: Vijay Patel Summit Shah 402 High Point Drive Cocoa, FL 32926 SUCCESSOR LENDER . Where applicable, the term Lender shall include any subsequent o successor holder of this Note and the Loan Documents . CORRECTION OF DOCUMENTS . For and in consideration of the funding of this Note by - lhe Lender or any renewal or extension thereof, should any occur, the undersigned Borrower hereby agrees to coo erate or to re - execute any and all Loan Documents deemed necessary or desirable in the Lender's discretion, in ordet to correct or to adjust for any clerical errors or omissions contained in any document executed in connection with th loan .
5 FLORIDA LAW AND JURISDICTION . This Note constitutes a contract that shall be govbmed by Florida law and shall be enforceable in a Court of competent jurisdiction in the State of Florida . Federal j fisdiction shall be in the Federal District Court in the Middle District ofFlorida, Tampa Division . I WAIVER OF JURY TRIAL . BY THE EXECUTION HEREOF, BORROWER ffIEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY AGREES THAT: (A) NEITHER THE BORROWER NOR ANY ASSIGNEE, SUCCESSOR, HEIR, ORI LEGAL REPRESENTATIVE OF THE SAME SHALL SEEK A JURY TRJAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM, OR ANY OTHER LITIGATION OR PROCEDURE ARJSING FROM OR BASED UPON THIS NOTE, OR ANY LOAN DOCUMENT EVIDENCING, SECURJNG OR RELATING TO THE OBLIGATIONS OR TO THE DEALINGS OR RELATIONSHIP BETWEEN OR AMONG THE ARTIES THERETO ; (B) NEITHER THE BORROWER NOR THE LENDER WILL SEEK TO CONSOLIDATE ANY SUCH ACTION IN, WHICH A JURY TRJAL HAS BEEN WAIVED, WITH ANY OTHER ACTION IN WHICH A JURY TRJAL HAS NOT BEEN OR CANNOT BE WAIVED ; (C) THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY NEGOTIATEDiBY THE PARTIES HERETO AND THESE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS ; (D) NEITHER THE BORROWER NOR THE LENDER HAS IN ANY WAY AGREED WITH OR REPRESENTED TO ANY OTHER PARTY THAT THE PROVISIONS OF THIS PARAGRAPH WILL NOT BE FULLY ENFORCED IN ALL INSTANCES ; AND (E) THIS PROVISION IS A MATERJAL INDUCEMENT FOR THE LENDER TO ENTER INTO THIS TRANSACTION . THE UNDERSIGNED ACKNOWLEDGE THAT THE LOAN EVIDENCED HEREBY: IS FOR COMMERCIAL PURPOSES ONLY AND NOT FOR PERSONAL FAMILY OR HOUSEHOLD PURPOSE. I Florida Documentary stamps in the amount of $2,450 have been paid and the proper stamps affixed to this Note.
RWB Florida, LLC, a Delaware limited li/lbility company Its: - = CEO /s/ "Brad Rogers" [Signature Page to Note] B_y:. , - , --- J - ,. - """'::,,<' ---- + ----- - Brad Rogers
IRREVOCABLE AND UNCONDITIONAL GUARANTY FOR VALUABLE CONSIDERATION, the receipt of which is acknowledged,,by the undersigned and which is evidenced by that certain Joan made to RWB FLORIDA, ILLC, a Delaware limited liability company (the "Borrower"), whose address is 14240 Greephouse Avenue, Granville IL 61326 in the principal amount of TWENTY MILLION ONE HlJN ; DRED TWELVE THOUSAND FIFTEEN AND 00 / 100 DOLLARS ( $ 20 , 112 , 015 . 00 ), evidenced by the Promissory Note ("Note") dated of even date herewith, a Collateral Assignment of Mem ership Interest, Share Certificate with Share Power, or other security instruments, and such other documents, jointly and severally, known as the "Loan Documents", and to induce, M&V INVESTMENT ONE, LLC, a Florida limited liability company (the "Lender"), having its offices at 6903 Congress Street, New Port Richey, FL 33653 to make the Joan or ext nd the credit mentioned in the Loan Documents to or for the account of Borrower, which Joan or credit Lender would not extend but for this Guaranty, the undersigned irrevocably and unconditionally guarantees to Lender, subject to the limitations set forth below, the payment and lprompt performance of each and every covenant, warranty, representation, provision, term and cqndition made or to be kept or performed by the Borrower and contained in the Loan Documents ; and all liabilities, direct or contingent, joint, several or independent arising in conjunction with the Loan Documents, including all liabilities of any assignee or successor in interest of Borrower, as performance becomes due, whether as installments or at maturity, or earlier by reason of acceleration or otherwise, or whether extended, together with interest, attorneys' fees, and other costs and expenses required by Borrower, for which Borrower is obligated under the terns and provisions of any Loan Document . The undersigned hereby expressly waives : (i) acceptance or notice of the acceptance of this Guaranty ; (ii) notice of the existence or creation of any Loan Documents ; (iii) pres ntment, demand, notice of dishonor, protest, and all other notice whatsoever ; (iv) the invalidity, irregularity or unenforceability of the liabilities hereby guaranteed ; (v) all diligence on the part of Lender in collection or protection of, or realization upon, any security for any of the liabilities or in enforcing any remedy available to it under any Loan Document ; (vi) the right or power, under any statute or rule of law, to demand or otherwise require that Lender take, initiate or pursue any action against the Borrower or against the property of the Borrower standing as security for the liabilities ; (vii) any defense that may now or hereafter arise by reason of the incapacity, Jack of authority, death or disability of Borrower, or any officer, partner or agent of Borrower, any co - guarantor, or any other person or entity, or the failure of Lender to file or enforce a claim against the estate (either administration, bankruptcy, or any other proceeding) of Borrower or any other person or entity ; (viii) any duty on the part of Lender to disclose to the undersigned any facts it may now or hereafter know regarding the Borrower ; (ix) the right to trial by jury in any and every action or proceeding of any kind or nature under or by reason of or relating in any way to this Guaranty, the Loan Documents or any of the matters and things referred to h,brein ; (x) the defense of the statute of limitations in any action hereunder or for the collectidn of the indebtedness or the performance of any obligation hereby guaranteed ; (xi) any delay o the part of Lender in exercising any of its rights under this Guaranty, or otherwise ; (xii) any right of subrogation to Lender against Borrower and any rights to enforce any remedy which Leµder may have against Borrower and any rights to participate in any security for the Note or Loan Documents ; and (xiii) any defense based upon an election of remedies by Lender whicl destroys
2 or otherwise impairs any subrogation rights of the undersigned or the right of the undersigned to proceed against Borrower for reimbursement, or both. Each Guarantor also hereby waives any claim, right or remedy which such Guarantor may now have or hereafter acquire against the Borrower that arises hereunder and/or frbm the performance by any Guarantor hereunder including, without limitation, any claim, re edy or right of subrogation, reimbursement, exoneration, indemnification, or participation in anYJ claim, right or remedy of Lender against Borrower or any security which Lender now has or hereafter acquires, whether or not such claim, right or remedy arises in equity, under contract, by tatute, • I under common law or otherwise. In addition to but not in limitation of the preceding, the undersigned agrees that Lender may, at any time and from time to time, without the consent of, or notice or responsibility to the undersigned, and without impairing or releasing any obligations or liability of the undersigned, upon or without any terms or conditions and in whole or in part : (i) change the manner, place or terms of payment, or change or extend the time of payment of, renew or alter any liability of the Borrower hereby guaranteed, or any other liabilities, whether direct or indirect ; (ii) sell, exchange, release, surrender, realize upon or otherwise deal with, in any manner and/ in any order, any property at any time pledged or mortgaged to secure the liabilities hereby guaranteed, or any liabilities including those hereby guaranteed, whether incurred directly or indirJctly, in respect thereof, or offset there against ; (iii) exercise or refrain from exercising any rights/ against Borrower or others, including the undersigned ; (iv) settle or compromise any liabilities! hereby guaranteed or any liabilities due to Lender, incurred directly or indirectly, and subordinate the payment of all or any part thereof to the payment of any liabilities which may be due Lender or others ; (v) apply any sums by whomsoever paid or howsoever realized to any liability or liabilities of Borrower to Lender regardless of what liability or liabilities of Borrower to Lender remain unpaid ; (vi) release any guarantor or endorser of the Note or Loan Documents ; and (vii) accept a conveyance or conveyances of all or part of the property encumbered by the Loan Documents as partial satisfaction of the liability due under the Loan Documents and proceed against the undersigned for the balance due after said conveyance or conveyances . The provisions of this Guaranty shall extend and be applicable to all renewals, amendments, extensions, consolidations and modifications of the Note and Loan Documents, and shall continue unabated notwithstanding the failure of Lender to give the undersigned notice of any of the preceding . Any and all references herein to the Note and Loan Documents shall be deemed to include any such renewals, extensions, amendments, consolidations or modifications thereof . ' In the event Borrower fails to perform its covenants, agreements and undertakings as provided in any of the Loan Documents, including its covenant to make payment as ahd when due, the undersigned shall immediately, upon the written demand of Lender, promptly bd with due diligence, do and perform for the benefit of Lender all of such covenants, agreem 1 ents and undertakings including the covenant to make payment as and when due, as if it constiluted the direct and primary obligations of the undersigned. ! The obligations of the undersigned are independent of the obligations of Borrower or one another, and a separate action or actions for payment of any installment, payment upon maturity
3 or upon acceleration, damage or performance may be brought and prosecuted agai st the undersigned or any one of them, heth or not (i) a? c' . ion i brought agai st the Bo 6 iwer_ r the security for Borrower's obligat 10 n ; (n) Borrower 1 s Jomed m any such action or actlo s ; (m) notice is given or demand is made upon Borrower ; (iv) remedies are exhausted against the Borrower or the security for Borrower's obligation under the Loan Documents ; or (r) any payment by Borrower to Lender is held to constitute a preference under bankruptcy of Borrower if for any reason Lender is required to refund such payment or pay such amount to Borrqwer or someone else . The undersigned hereby authorizes and empowers Lender, at its sole discretion and without notice to the undersigned, to exercise any right or remedy which Lender may have as to any security, whether real, personal, or intangible, including, but not limited to, commeJcement of judicial foreclosure, exercise of rights of power of sale, acceptance of a deed or assig ent in lieu of foreclosure, appointment of a receiver to collect, or direct collection of, rents and 'profits, exercise of remedies against personal property, or enforcement of any assignment of leases . If the indebtedness guaranteed hereby is partially paid for any reason, this Guaranty shall nevertheless remain in full force and effect and the undersigned shall remain liable for the entire unpaid balance of the indebtedness guaranteed hereby . The undersigned hereby subordinates any and all indebtedness of Borrower now or hereafter owed to th e undersigned, or any of them, to al l indebtedness of Borrower to Lender, and agrees with Lender that the undersigned shall not demand or accept any payment of principal or interest from Borrower, shal l not claim any offset or other reduction of the undersigned's obligations hereunder because of any such indebtedness, and shal l not tak e any action tq obtain any of th e security described in and encumbered by th e Loan Documents ; provided, hO yever, if Lender so requests, such indebtedness shal l be collected, enforced and received : by the undersigned as Truste e for Lender subjec t to any lender having a priority interest superior to Lender and be paid over to Lender on an account of the indebtedness of Borrower to Lender but without reducing or affecting in any manner the liability of the undersigned under the other provisions of this Guaranty . This Guaranty is an irrevocably absolute, continuing guaranty of payment and not a guaranty of collection . If this Guaranty is executed by more than one signer or there is more than one guarantor of the obligations set forth in the Loan Documents, all agreements and promises herein contained shall be construed, and are hereby declared to be, joint and several in each and every particular, and shall be fully binding upon and enforceable against either ; any, or all of such signers, and neither the death, bankruptcy, insolvency, release of nor revocation by one or more signers shall affect or release the liability of any other signer, eith r as to indebtedness then existing or thereafter incurred . The death of any of the undersigned 'shall not revoke this Guaranty as to such decedent unless and until written notice thereof is'I actually received by Lender and until all indebtedness then existing is fully paid and discharged . In addition to the Guarantor guaranteeing that the Borrower shall fulfill its mon tary and non - monetary obligations under the terms and conditions of the Loan Documents, the Guarantor is also obligated to issue the Common Shares of the Guarantor in connection with the Atlditional Interest owed by the Borrower under the Note and issue additional Common SharJs of the Guarantor in connection with the Conversion to Equity provision of the Note . In the vent the
4 Guarantor defaults under either obligation to issue Common Shares of the Guarantor . /to the Lender, then at the option of the Lender, the Lender shall have the right to sue for specific performance and actual damages, not speculative or punitive . · The undersigned shall pay to Lender all costs and expenses, including filing fe s and attorneys' fees, incurred by Lender in seeking to enforce any of the liabilities or obligatjons of the undersigned under this Guaranty and in connection with the custody, care, preserv<'ltion or collection of any property of the undersigned . I Nothing contained herein, however, shall prevent Lender from bringing any action or exercising any rights against any security or against the undersigned personally, or agaihst any property of the undersigned, within any other state . Initiating such proceeding or takiqg such action in any other state shall in no event constitute a waiver of the agreement contained herein that the law of the State of Florida shall govern the rights and obligations of the undersigped and Lender hereunder or of the submission herein made by the undersigned to personal jurisdiction within the State of Florida . The aforesaid means of obtaining jurisdiction and perfecting·/service of process are not intended to be exclusive but are cumulative and in addition to all othe means of obtaining personal jurisdiction and perfecting service of process now or hereafter provided by the laws of the State of Florida . This Guaranty shall be construed in accordance with the laws of the State of Florida, and such laws shall govern the interpretation, construction and enforcement hereof . Wherever possible, each provision of this Guaranty shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Guaranty, or application there o ' f, shall be prohibited by or be invalid under such law, such provision or application, as the case may be, shall be ineffective to the extent of such prohibition or invalidity, without invalidaling the remainder of such provision or other applications or the remaining provisions of this Guaranty . Except as otherwise provided herein, any and all notices, elections, demands, requests and responses thereto permitted or required to be given under this Guaranty shall be in Jwriting, shall be deemed properly given and shall be effective (i) three ( 3 ) days after their deposit in the United States Mail, postage prepaid, (ii) two ( 2 ) days after their deposit in a n ' ltionally recognized overnight courier service, or (iii) on the day of their personal delivery if delivered to the undersigned at the address designated below or at such other address as is specified iri writing by any party to the others, provided that no change of address by the undersigned·[shall be effective unless the undersigned first serves notice of such change of address on Lender in writing by certified mail with return receipt requested, retaining a copy of such receipt inl its files . Personal delivery to a party or to any officer, agent or employee at such address shall c,onstitute receipt . Rejection or other refusal to accept or inability to deliver because of changed address of which no notice has been received shall also constitute receipt . Any such notice, '[election, demand, request or response, if given to Lender or the undersigned, shall be addr,essed as follows : M&V INVESTMENT ONE, LLC Attn: Vijay Patel & Summit Shah
5 6903 Congress Street New Port Richey, FL 33653 (Lender) Red, White & Bloom, Inc. 14240 Greenhouse Avenue Granville, IL 61326 (Guarantor(s)) Time is of the essence in this Guaranty . This Guaranty may not be changed orall ' y, and no obligation of the undersigned can be released or waived by Lender or any officer or agent of Lender, except by a writing signed by a duly authorized officer of Lender . This Guaranty shall be irrevocable by the undersigned until all indebtedness guaranteed hereby has been conipletely repaid and all obligations and undertakings of the Borrower under, by reason of or purstiant to the Loan Documents have been completely performed . This Guaranty and each of its provisions shall be binding upon the undersigned and upon the heirs, legal representatives, successors and assigns of the undersigned, and each o, ' f them, respectively, and shall inure to the benefit of Lender, its successors and assigns . Lender shall be entitled to assign this Guaranty and all of its rights, privileges and remedies hereunder r'ithout notice to or consent of the undersigned, and such assignee shall be entitled to the benefits of this Guaranty and to exercise all such rights, interests and remedies as fully as Lender . The term "undersigned" as used herein shall mean the entity or person(s) executing this Guaranty, or any one or more of them . Any one signing this Guaranty shall be boundihereby, whether or not any one else signs this Guaranty at any time . ' Notwithstanding any modification, discharge or extension of any obligations or liabilities 1 under the Loan Documents or any amendment, modification, stay or cure of Lender ' s rights under the Loan Documents which may occur in any bankruptcy or reorganization I case or proceeding concerning the Borrower, whether permanent or temporary, and whether as ented to by Lender, the undersigned hereby agrees that it shall be obligated hereunder to perform in accordance with the terms of the Loan Documents and this Guaranty as originally written and not as so amended, modified, stayed or cured . The undersigned understands and acknowledges that, by virtue of this Guaranty, it has specifically assumed any and all risks of a bankruptcy or reorganization case or proceeding with respect to the Borrower . As an example and not by way of limitation, a subsequent modification of the Note in any reorganization case concerning the Borrower shall not affect the obligation of the undersigned to pay the Note in accordance with its original terms . The undersigned represents and warrants to Lender that the undersigned has received, or will receive, direct or indirect benefit from the making of this Guaranty and the extensibn of the ' Loan or Credit to Borrower as set forth in the Loan Documents.
The undersigned and Lender acknowledge and agree that this document may be executed in multiple counterparts which taken together shall constitute a fully executed instrument a d that electronic signatures shall be deemed to be originals . IN WITNESS WHEREOF, the undersigned has executed this Guaranty on the resBective dates indicated. EACH OF THE UNDERSIGNED ACKNOWLEDGES THAT THE . I UNDERSIGNED'S EXECUTION OF TIDS GUARANTY RESULTS IN PERSONAL LIABILITY ON THE PART OF EACH OF THE UNDERSIGNED FOR 1 THE REPAYMENT OF THE DEBT AND PERFORMANCE OF THE COVENANTS, AGREEMENTS AND UNDERTAKINGS HEREIN DESCRIBED AND COULD RESULT IN THE ATTACHMENT OF EACH OF THE UNDERSIGNED'S PERSONAL AS ' SETS. ·1 EACH OF THE UNDERSIGNED ACKNOWLEDGES HAVING BEEN ADVISE]D TO SEEK THE ADVICE OF LEGAL COUNSEL PRIOR TO EXECUTING TIDS DOCUMENT. Signed, sealed and delivered in the presence of: RED, WHITE & BLOOM BRANDS INC., a British Columbia corporation /s/ "Brad Rogers" P . nnt N ame: ' , B , r . , a , , d . . R , , • o g = e r = s " Date: [Signature Page to Guaranty J
COLLATERAL ASSIGNMENT OF MEMBERSHIP INTEREST 1 ·1 This Collateral Assignment of Membership Interest (''Pledge") made this flth day of June 2021 , by and between RED, WHITE AND BLOOM BRANDS, INC : I a British Columbia corporation ("Pledgor") and M & V INVESTMENT ONE, LLCf a Florida limited liability company, whose address is 6903 Congress Street, New P ort Richey, FL 33653 ("Secured Party") and RWB FLORIDA LLC, a Delaware limited liability company (the "Company" or "Debtor") . 1. Definitions. For purposes of this Pledge, the following definitions shall prevail: I . I "Agent" shall mean Johnson, Pope, Bokor, Ruppel & Bums, q . ,P, located at 911 Chestnut Street, Clearwater, Florida 33756 . 1 . 2 "Collateral" shall mean the Class A Membership Shares of/the Company, representing Pledgor's 100 % interest in the Membership Shares, as II Ore particularly described on Exhibit "A" . ' ' ' 1.3 "Company" shall mean RWB Florida LLC, a Delaware limited liability company. I . 4 "Company Debt" shall mean that certain seven ( 7 ) month Note in the amount of $ 10 , 000 , 000 . 00 in favor of High Street Capital Partners, LLC ("High Street") ; and that certain thirteen ( 13 ) month Note in the amount of $ 18 , 000 , 000 . 0 p in favor of High Street . 5. "Debt" shall mean the amount of $ 20 , 112 , 015 . 00 owed by 1 the Company to the Secured Party, which has been guaranteed by Pledgor, and evidenced by the Note . ' 6. "Debtor" shall mean RWB Florida LLC. I . 7 "Guarantor" shall mean Red, White and Bloom Brands, In . , a British Colombia corporation . 1.8 "Guaranty" shall mean the Irrevocable and Unconditional ' Guaranty given by the Guarantor to the Secured Party. 9. "Loan" shall mean the amount of the Debt outstanding and O}Ving from the Debtor to the Secured Party from time to time. 10. "Member" shall mean Red, White and Bloom Brands, I c., a British Colombia corporation, the sole Class A Member of the Company.
2 11. "Note" shall mean the promissory note obligation of the D . e , bt executed and delivered by the Debtor to the Secured Party . 12. "Security Instruments" shall mean this Pledge, the Note, ,ihe Guaranty given by the Guarantor, the Share Certificate with Share Power attached her,+to as Exhibit "B" and such other supporting documents . 2. Assignment of Membership Share. 1. In order to induce the Secured Party to make the Loan to 1 he Debtor in the amount of the Debt as represented by the Note and in consideration therbof and for other good and valuable considerations, the receipt and sufficiency of which is hereby acknowledged, Pledgor/Member does hereby collaterally assign, transfer nd convey to the Secured Party all of its right, title and interest in and to the Membership I Share. 2. This assignment is a collateral assignment of any and all rig)lts, title or interest of the Member in Company and the Membership Share. It is intended that upon an event of default the delivery of the Share Certificate with Share Pof er, Assignment Separate From Certificate and other Security Instruments from the Agent to the Secured Party pursuant to the provisions of Section 6 herein that the Secured P shall be and become a 100% Class A Member in - interest of the Company fort all purposes, provided the Secured Party obtains all necessary approvals by the State of Florida Department of Health and other agencies having jurisdiction over the Medical Marijuana Treatment Center License ("Approval Agencies"). Simultaneously with the execution of this Agreement the Member has executed and delivered to the Agent an Allonge to the Share Certificate and Share Power in favor of Secured Party to be held by the Agent on behalf of the Secured Party in accordance with this Agreement. 3. The Pledgor hereby appoints the Secured Party its attorney - in - fact, with full power and authority in the place and stead of the Pledgor and in the name of the Pledgor, or otherwise, from time to time during the existence of a Default or an Event of Default in the Secured Party's discretion to take any action and to execute any instrument or document consistent with the terms of this Agreement which the Secured Party ,may deem necessary or advisable to accomplish the purposes hereof (but the Secured Party shall not be obligated to and shall have no liability to the Pledgor or any third part)' for failure to so do or take action) . The foregoing grant of authority is a power of attorney and true and lawful proxy, for and in Debtor's name, place and stead to vote the Membership Share in the Company by the Class A Member, coupled with an interest and such appointment and proxy shall be irrevocable for the term hereof . The Pledgor h reby ratifies all that said attorneys shall lawfully do or cause to be done by virtue heteof . Pledgor hereby acknowledges that the Secured Party, as its attorney - in - fact, - bnce exercised in accordance with the terms and provisions of this Agreement shall havb the right on behalf of the Company to process any change in control or owneiship, documents or waivers required by the Approval Agencies in order to transfer the
3 Collateral to the Secured Party without the requirement of a foreclosure of the Secuifty Interest or any court order approving same. 3. Covenants, Representations and Warranties of the Company, Member and Debtor . As an inducement to the Secured Party to advance the moriey credit in the amount of the Debt to the Debtor, the Company, Member and Pledgor m ke the following covenants, representations and warranties to the Secured Party : 1. Member covenants, represents and warrants that (i) it is the owner of one hundred percent ( 100 % ) of the Class A Membership Units (Membership Sharb") in the Company represented by Certificate # 1 ("Share Certificate with Share Powet"), (ii) the Membership Share is not encumbered by any interest or lien whatsoever, (iii) he Member has full right and authority to own and to assign its Membership Share to the Secured Party, and (iv) Company and all members and managers of the Company h ve authorized and approved the assignment of the Membership Share to the Secured PartY at a duly called meeting of all of the members and managers of the Company . 2. Company, Member and Debtor shall at all times subsequent to/the date of this Pledge, and until the Debt is fully paid, remain in substantial compliance with all laws, regulations, ordinances and requirements established by any governing lobal, state or federal governmental or regulatory authority respecting the Company, Compaiiy's business or any of its activities and/or real and personal property assets, including, butinot limited to that certain Medical Marijuana Treatment Center License from the Florida Department of Health originally issued to Nature's Way Nursery of Miami, Inc . pursJant to Section 381 . 986 ( 8 )(a)ii . a . Florida Statutes and subsequently transferred to Acr age Florida, Inc . d/b/a The Botanist, under that certain Approval from the Departmen of Health dated February 8 , 2019 as subsequently transferred to the Company under ; that Change in Ownership approved by the Department of Health under that certain Notic,e of Transfer of Membership Interest reference number 00004478 (the "License") . 3. Company shall maintain general liability insurances for the benefit of the Company and certificates thereof evidencing' the coverage shall include the Secured Party as an additional insured . 4. Debtor shall promptly and timely pay, before the same shall be delinquent, any and all taxes, assessments, liens and charges against the Company, and, upon request of the Secured Party, shall evidence payment therefor . 5. Debtor as an inducement to the Secured Party to extend the ILOan herein, represents and warrants to the Secured Party as follows : A. Debtor and Company have taken all actions requir cl of them to authorize the execution of the Security Instruments and the delivery of/ said instruments to the Agent such that, when executed, the same shall be binding and I enforceable upon the Debtor, Company and Member.
4 B. There are no actions, suits or proceedings pending or, to the knowledge of Debtor, threatened against or affecting Debtor, or the Collateral at law 01 ; ! in equity, or before or by any governmental authority, or any other matters which would substantially impair the ability of Debtor to pay when due any amounts which ay become payable with respect to the Note, and to the Debtor's knowledge, it is not : ! in default with respect to any order, writ, injunction, decree or demand of any Court or /my governmental or regulatory authority, nor has Debtor filed any petition for volunt bankruptcy or proceeding in any state court for the protection from creditors nor is i(ny contemplated . C. The consummation of this transaction and the performance of this Pledge and the Security Instruments will not result in any breach of or constitute a default under any agreement or any other instrument to which the Debtor is a party orl by which it may be bound or affected . D. The financial statements heretofore delivered by Debtot to the Secured Party are true and correct and, in all respects, have been prepareql in accordance with generally accepted accounting practices, and fairly present the finantial condition of the Debtor as of this date . There have been no adverse material change in the financial circumstances or conditions of Debtor whose financial statements h ve heretofore been delivered to Secured Party . E. Debtor is not in default under and pursuant to the terms . and conditions of this Pledge, the Security Instruments nor has any event occurred wh ' ich . with notice or by the passage of time, would constitute a default there under . F. Debtor shall not further encumber or hypothecate the Collateral without the express written approval of the Secured Party . G. Member shall not encumber, hypothecate or attempt to transfer or assign the Membership Share which is the security for this Loan . H. The Company shall restrict the payment of any member's debt for so long as the Debt remains outstanding, nor shall the Member accept I any payment on any such debt . ' I. Company shall not violate the terms and conditions of the Operating Agreement of the Company, as amended by that certain Amendment td the Operating Agreement of even date herewith . J. Debtor, Members and Managers, if any, of the Company and the Company do hereby acknowledge and approve the pledge and assignment of the Membership Share and each Member and Manager join herein for the purposds of subordinating any and all right, title and interest that they may have in the Membetship Share assigned to the Secured Party and, further, subordinates their rights in favor o 1 f the I
5 Secured Party as to any receipts, profits, distributions and disbursements or entitlements of the Membership Share . L. There is no default with respect to the License. M. There is no default with respect to the Company Debt. N. Debtor shall notify Secured Party of any default or event! of default under the Company Debt or License the earlier of thirty ( 30 ) days prior to lhe expiration of any cure period under the terms of the Company Debt and License or fjve ( 5 ) days from the notice of default from the Holder of the Company Debt or Florida Department of Health, as applicable . 3 . 6 Company shall be and remain for so long as the Debt remains unpaid a limited liability company organized and existing in the State of Delaware . T ' he Operating Agreement of the Company shall contain the following language : "T ' he membership interests of the Member in the Company shall be deemed "securities" un 1 der Title 6 , Chapter 8 Delaware "Uniform Commercial Code - Investment Securities" nd shall be governed by Title 6 , Chapter 8 "Uniform Commercial Code - Investrrlent Securities" as in effect from time to time within the State of organization of /the Company" . The Company shall issue Certificated Security in Registered form representing the Membership Shares and shall place a legend on each certificate stating : "This security representing the Membership Share is governed by Title 6 , Chapt r 8 "Uniform Commercial Code - Investment Securities" . 4. Events of Default. The occurrence of one or more of the following events ' shall, at the option of the Secured Party, constitute a default hereunder: 4 . 1 Failure of the Debtor to make payment of all or any part o(any principal or interest which shall become due and payable under the terms of the Note or Company Debt . Notwithstanding the foregoing, before Secured Party may accelerate any amounts under the Note, Secured Party must provide Debtor with written notice and ten ( 10 ) days to cure the monetary default giving rise to Secured Party's potential acceleration rights ; 2. Failure of the Debtor to make timely payment of any cost, charge, fee, tax or insurance premium which is required to be made hereunder when the s : ame shall become due and payable ; 3. Failure of the Debtor to perform timely in the performance or observance of any non - monetary covenant contained herein or in or under the i : ilote, Collateral Assignment or Additional Documents as set forth herein or as to ; / any representation or warranty contained in this Pledge or any of the Security Instruments or instrument delivered pursuant thereto which is untrue or false and such misrepresent tion
6 or failure of warranty shall continue for a period in excess of 30 days after notice to e Debtor; 4. Failure of the Member to perform timely in the performance,! or observance of any non - monetary covenant contained herein or in any of the Secu 1 ty Instruments or Company Debt Loan Documents or as to any representation or warrapty contained in this Pledge or any of the Security Instruments or instrument deliveted pursuant thereto which is untrue or false and such misrepresentation or failure /of warranty shall continue for a period in excess of 30 days after notice to the Member ; 5. The conveyance or transfer by the Debtor of all or any portion! or interest in the Collateral without the prior written consent of the Secured Party; 6. The filing of any lien or encumbrance against the Collateral however, the same shall not be considered a default if an amount in cash or c sh equivalent considered adequate, in the sole and absolute discretion of the Secured Party, is posted, escrowed or bonded so as to remove the lien from the Collateral ; 7. Upon the commencement of any legal and/or equitable actiop in any Court of competent jurisdiction by any persons or entities whomsoever, wherein iaid persons or entities seek and obtain an order enjoining or delaying or prohibiting : [the Debtor, Company, Member or Secured Party, or any of them, from carrying out the terms and conditions hereof or any of the Security Instruments 8. If Company permits cancellation or termination of any insurance required hereunder, or fails, if required, to obtain any renewal or any replacement ther of; 9. Failure of the Debtor or Company to file any federal, state or local tax returns which are required to be filed, or to pay or make provisions for the payment of all taxes (including taxes of its employees withheld by it) which have or may become due pursuant to any return or otherwise ; 10. Failure of the Company to properly maintain the License; 11. Failure of the Pledgor to issue to the Secured Party the Com)Tion Shares of the Pledgor in connection with the Additional Interest owed by the Company to the Secured Party or to issue to the Secured Party the Common Shares of the Pledg' 6 r in connection with the Conversion to Equity of Adjusted Principal Balance of the Note ; '' 12. If the Guarantor is involved in any event in Section 4.10 abovb, as applicable under Canadian law; or 4 . 15 In the event se·cured Party elects to exercise its rights and remedies hereunder, and such exercise violates or otherwise contravenes the terms and conditions under which the License is maintained, such violation or contravention of the License
7 shall not affect the rights and privileges bestowed upon Secured Party hereunder, hd upon the exercise of its rights and remedies, the Secured Party shall have the right'/ to apply for a variance or a change in ownership and control with the Florida Department of Health without the consent of the Company or Guarantor . 5. Remedies . Upon a default which is not timely cured, the Secured Party shall have any and all remedies allowed to Secured Party at law and in equity and/ as provided by this Pledge and the Security Instruments . Except where a time to cure a particular default is specifically set forth herein the Debtor shall have ten ( 10 ) days/ to cure after receipt of written notice any monetary default (except there shall be no grace period for the timely payment of the Note) from Secured Party and thirty ( 30 ) d ys following receipt of written notice from the Secured Party to cure any non - moneikry default . Provided, however, in the event a non - monetary default is not curable withinlthe thirty ( 30 ) day period, but the Debtor within said period commences the cure lnd diligently pursues said cure to completion, then such shall not be considered a nbn monetary default . A failure to cure such defaults shall entitle the Secured Party to inv·bke any and all remedies permitted by the Security Instruments or the laws of FloridJ or Delaware, as applicable . 6. Applicable Law, Venue and Jurisdiction . The parties hereto agree that with respect to the enforcement of the terms and conditions of the Note, this Agreenient and related Loan Documents, the laws of the State of Florida shall govern, With respect to the enforcement of the terms and conditions of the Operating Agreement of I the Company, the laws of the State of Delaware shall govern. 7. Agent's Responsibility . Agent shall have the absolute right to accept 'and rely on the directions made in writing and received by Agent from Debtor and SecJred Party in accordance with the following : 1. Upon Agent's receipt from the Secured Party, in writing, that the full amount of the Note has been paid in full the Agent shall return to the Member the Share Certificate with Share Power, and this Pledge marked "cancelled" and all other Security Instruments . 2. Should the Agent receive from the Secured Party, in writing, a statement that there has been a default in the terms of the Note or any Security Instrument which is not timely cured ("Secured Party's Notice") then the Agent is authorize on such receipt to deliver the Share Certificate with Share Power, this Pledge and all other Security Instruments to the Secured Party, unless, and only in the case of a non - monJtary default, Agent has received a notice in writing from the Debtor disputing the existen e of a non - monetary default ("Debtor's Dispute Notice"), in which case Agent shall ndt be permi , tted to deli , ver such documents to the Secured Party . If Agent receives a Sec II ured Party's Notice, then Agent shall promptly provide the Secured Party's Notice td the Debtor . In the case of a non - monetary default Debtor shall have ten days followin the receipt of the Secured Party's Notice to Debtor to deliver the Debtor's Dispute Notice to the Agent . In the event the Agent receives the Debtor's Dispute Notice timely, then the
8 I I Agent shall not deliver such documents to the Secured Party and shall comply with ¥ 1 e provisions of Section 6 . 4 hereof . The Debtor Dispute Notice shall set forth the specific reason why the Debtor disputes that there is a non - monetary default . Provided, howe er in the event the Secured Party's Notice is a statement that the Note has not been timbly paid, the Agent shall give immediate notice of such fact to the Debtor and the Deo/or shall have five ( 5 ) days from the date of receipt of such notice from Agent within which to provide to the Agent evidence of payment of the Note . In the event the Debtor fail to timely give such evidence to the Agent then the Agent is authorized to deliver the Sh!rre Certificate with Share Power, this Pledge and all other Security Instruments to ,fhe Secured Party . 7.3 Debtor, Member, Company and Secured Party, jointly and severally, hereby agree to indemnify the Agent and hold it harmless from any and I ' all claims, liabilities, losses, actions, suits or proceedings at law or in equity, or any otper expense, fees or charges of any character or nature, which it may incur or with which it may be threatened by reason of its acting as Agent under this Pledge, including, wit out limitation, attorneys' fees and the cost of defending any actions, suit or proceeding or resisting any claim . 4. In the event of a dispute between the parties as to the disposition of the documents escrowed with the Agent or actions taken by or contemplated by the Agent, then immediately upon receipt of written notification to the Agent by any party of a dispute which cannot be resolved between the parties, including any default having occurred Agent agrees to notify the parties that unless the parties mutually agree to settle such dispute within ten (I 0 ) days following notice from Agent to the parties, the Agent may place the escrolved document in to the court registry of a court of competent jurisdiction in Pinellas Cminty, Florida and the Agent shall be released from all further liability in connection with the filnds delivered . Upon placement filing and placement of the escrowed documents intql the registry the Agent shall render his bill to the parties for payment and each of the parties shall be jointly and severally responsible for its payment . Each party (Debtor, Merr/ber, Company and Secured Party) shall be responsible for one - fourth of the billing and to the extent such amount is collected from one or more of the parties in excess of the one - third obligation of the party, such party shall have a right of contribution against the other parties . ' 5. The Agent shall not be bound by any other agreement whether or not it has knowledge of the existence thereof or of its terms and conditions, and is required only to hold the Deposit as herein set forth and to make payment or tither disposition thereof as hereinbefore stated. 1 6. Agent shall not be liable for any mistakes of fact, or errors of judgment, or for any acts or omission of any kind unless caused by the willful miscotiduct or gross negligence of Agent . 7. Agent may resign upon ten ( 10 ) days written notice to the Parties to their addresses set forth herein . If a successor agent is not appointed within a fourteen '
9 (14) day period following such resignation, the Agent may petition a court of compete ., nt jurisdiction to name a successor. 8. Notices. Any notice to be given pursuant to this Pledge shall be givel' I in accordance with the following: Any notice to be given to any party hereto in connection with this Pledge shall be in writing and shall be deemed received (a) on the date delivered if hdnd delivered by receipted hand delivery or by facsimile, with evidence of transmission /by the sender and receipt by the receiver, or (b) one ( 1 ) business day following delivery to a recognized national overnight courier . Notices to the Parties shall be sent to tlieir addresses set forth below . Either party, by written notice to the other, may change its address to which notices are to be sent . The Parties shall copy Escrow Agent on! all notices sent hereunder, but failure to notify Escrow Agent shall not be deemed a failure of notice to a Party to whom notice has been given . ·' As to Secured Party: M&V INVESTMENT ONE, LLC Attn: Vijay Patel 6903 Congress Street New Port Richey, FL 33653 With copy to: With copy to: As to Debtor: As to Agent: Summit Shah 402 High Point Drive Cocoa, FL 32926 Joseph W. Gaynor, Esq. Johnson Pope Bokor Ruppel & Bums, LLP 911 Chestnut Street Clearwater, Florida 33756 Facsimile: 727 - 462 - 0365 RWB Florida LLC 14240 Greenhouse Avenue Granville, IL 61326 Johnson, Pope, Bokor, Ruppel & Bums, LLP 911 Chestnut Street Clearwater, Florida 33756 Attn: Joseph W. Gaynor, Esq. Facsimile: 727 - 462 - 0365 9. i Time is of the Essence. As to all matters herein time shall be of the I essence subject to any cure periods provided for herein. {SIGNATURES TO FOLLOW}
IN WITNESS WHEREOF, the undersigned have set their hands and seals n the date and year first above written. "SECURED PARTY" M&VNVESTMENT ONE, LLC, a Florida limited liability company By: /s/ Summit Mahesh Shah" _ Print Name: Summit Mahesh Shah Its: Manager By: Prin - tN - am - e: - v~, Jii † _P_a - te~t -- , - -- - Title: Manager /s/ "Vijay Patel"
"COMPANY"/"DEBTOR" RWB FLORIDA, LLC, a Delaware limited liability company Print: Print: Print: - ------ - "PLEDGOR" RED, WHITE AND BLOOM BRANDS INC., a British Columbia corporation ----- : - ---- B_y: _,,:=;:. - - - ;;, - ,,. - =::: Name: c=: ,::;, - r - , Its: -- - C - , - . E " ' 0 " - - ""'' - "' ------------ - Print: [Signature Page to Collateral Assignment] /s/ "Brad Rogers" /s/ "Brad Rogers"
EXHIBIT "A" Collateral Certificate No . A - 1 of RWB Florida, LLC, a Delaware limited 1 company, evidencing a 100 % Class A membership interest owned by Red, Wh Bloom Brands Inc . , which membership interest is being pledged as security for tt described in the Collateral Assignment of Membership Interest to which this Ex affixed dated June 4 , 2021 .
EXHIBIT "B" SHARE CERTIFICATE WITH SHARE POWER
SHARE CERTIFICATE WITH SHARE POWER "THE CLASS A MEMBERSHIP INTERESTS EVIDENCED HEREBY ARE SUBJECT TO A COLLATERAL ASSIGNMENT OF CLASS A MEMBERSHIP INTEREST AGREEMENT (A COPY OF WHICH MAY BE OBTAINED FROM THE ISSUER) AND BY ACCEPTING ANY INTEREST IN SUCH MEMBERSHIP INTERESTS THE PERSON HOLDING SUCH INTEREST SHALL BE DEEMED TO AGREE TO AND SHALL BECOME BOUND BY ALL THE PROVISIONS OF SAID AGREEMENT . " This certificate evidences an interest in RWB FLORIDA LLC, a Delaware limited liability company ("Issuer") and shall be a security for purposes of Article 8 of the Unifor)n Commercial Code. CERTIFICATE FOR CLASS A MEMBERSIDP INTEREST OF RWB FLORIDA LLC, A FLORIDA LIMITED LIABILITY COMPANY This Certificate has not been and will not be registered under the Securities Act 6 f 1933 or under the securities or blue sky laws of any state . The holder of this Certificate! by its acceptance hereof, represents that it is acquiring this security for investment and not witli a view to any sale or distribution hereof. 1 Certificate Number A - !: 100% Class A Membership Interest ' RWB FLORIDA LLC, a Delaware limited liability company (the "Company") ; ' hereby certifies that M & V INVESTMENT ONE, LLC, a Florida limited liability company (together with any assignee of this Certificate, the "Holder") is the registered owner of VOO % of the Class A Membership Interest in the Company (the "Membership Shares") . ThJ rights, powers, preferences, restrictions and limitations of the Class A Membership Interest are † et forth in, and this Certificate and the Class A Membership Interest represented hereby are issbed and shall in all respects be subject to the terms and provisions of, the Amended and Restated /Limited Liability Company Agreement of the Company dated as of June 1 , 2021 , as the same !ias been amended on June 4 , 2021 (the "Operating Agreement") . Upon an event of default and rJlease of this Certificate to the Holder, and as a condition to being entitled to any rights and/or !benefits with respect to the Class A Membership Interest evidenced hereby, the Holder is deemetj to have agreed to comply with and be bound by all the terms and conditions of the Operating Agreement . The Company will furnish a copy of the Operating Agreement to the Holder without chaige upon written request to the Company at its principal place of business . This Certificate evidbces an interest in RWB FLORIDA, LLC, a Delaware limited liability company and sHall be a security for purposes of Article 8 of the Uniform Commercial Code of the State of Fhi ida and the Uniform Commercial Code of Delaware, as applicable . ,I UPON THE PAYMENT IN FULL OF THE INDEBTEDNESS OWED FLORIDA, LLC, TO M & V INVESTMENT ONE, LLC, A FLORIDA LIABILITY COMPANY ("INDEBTEDNESS"), EVIDENCED BY THAT BY RWB LIMITED CERTAIN NOTE OF EVEN DATE HEREWITH IN THE AMOUNT OF $20,112,015.00 OR THE I
I CONVERSION OF THE INDEBTEDNESS TO EQUITY IN ACCORDANCE WITH THE TERMS OF THE NOTE , OF EVEN DATE HEREWITH, AND SECURED B " ¥ AN COLLATERAL ASSIGNMENT OF CLASS A MEMBERSHIP INTEREST A , i , ONG WITH OTHER RELATED LOAN DOCUMENTS, M & V INVESTMENT ONE, ULC, A FLORIDA LIMITED LIABILITY COMPANY, SHALL RELEASE THE CLASS A MEMBERSHIP INTEREST EVIDENCED HEREBY TO RED, WHITE AND BUOOM BRANDS, INC . , A BRITISH COLOMBIA CORPORATION . PRIOR TO THAT f " IME, RED, WHITE AND BLOOM BRANDS, INC . , SHALL CONTINUE TO BJ< ; [ THE MANAGING MEMBER IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE OPERATING AGREEMENT, BUT SHALL BE REMOVED AS MANA!GING MEMBER IN THE EVENT OF THE DEFAULT UNDER THE TERMS : [ AND CONDITIONS OF THE NOTE AND RELATED LOAN DOCUMENTS EVIDENCING ' THE INDEBTEDNESS. This Certificate shall be governed by and construed in accordance with the lawJ of the ' State of Florida without regard to principles of conflicts oflaws. members (as defined in the Operating Agreement) as of the date set forth below. IN WITNESS WHEREOF, the Company has caused this Certificate to be executea by its 1 Dated: June.. 4 2021
RWB Florida LLC, a Delaware limited liability company B y: Name: Its: M & V INVESTMENT ONE, LLC, a Florida limited liability company _ Name: Summit Mahesh Shah Its: Manager By:. /s/ "Summit Mahesh Shah" By: - = - = - r. -- - --- - N ame: Vijay Patel Its: Manager /s/ "Vijay Patel"
FOR RWB FLORIDA LLC INTEREST OF: RED, WHITE AND BLOOM BRANDS, INC. CLASS A MEMBERSHIP INTEREST POWER FOR VALUE RECEIVED: RED, WHITE & BLOOM BRANDS, INC, hereby sell, assign and transfer unto: M & V Invesment One, LLC. PLEASE INSERT SOCIAL SECURITY OR FEIN NUMBER OTHER IDENTIFYING NUMBER OF ASSI G . N E - E '= ---- - a 100 % Class A Membership Interest in RWB FLORIDA LLC, a Delaware limited liability company, represented by Certificate # 1 standing in my name iii the Operating Agreement of said limited liability company and do hereby irrevoc bly constiMe and appoint Joseph W . Gaynor, Esquire, attorney to transfer the isaid Limited Liability Company Interest on the books of said limited liability company with full power of substitution in the premises, as appointed under Section 2 ! 3 of the Collateral Assignment . Dated 2021 RED, WlllTE & BLOOM BRANDS, INC, By:. Name: Title:
RED, WHITE & BLOOM BRAl'U>S, INC. By:._..._,+ao_,,.....,"""" ---- f Name: '.:b,..... .,. 11s: . &eo /s/ "Brad Rogers"
RWB )'lorida, LLC, aDelaware limii liabilllJi company •._.....,.,,J£F,;,,e,,"'=:.,..... -------- ' Name, , - ::, Its: (',,ff. 0 M - & Y"INVES'.fMBNTONE ,LLC, a - Florida .limited.liabiJ! CQ!llPany j ' t Naine: lij y Pat.el Its: Manager - [Signature Page·to Share Certificate) B ' /s ,, / ' " V , , i , j a ' y P , , at e l l '::::: 'I By.:_ /s/ "Brad Rogers"
AMENDMENT TO AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMEN1 OF RWB FLORIDA LLC THIS AMENDMENT to the Amended and Restated Limited Liability Company Agteement ("Amendment") is effective the 4 th day of June, 2021 , by and between RED, WHITE AND BLOOM BRANDS, INC . , a British Columbia corporation ("Class A Member" or "Managing Member''), add RWB FLORIDA LLC, a Delaware limited liability company (the "Company") . BACKGROUND WHEREAS, the Amended and Restated Limited Liability Company Agreement I ("LLC Agreement") for the Company was effective as of June 1 , 2021 ; and WHEREAS, the Class A Member desires to amend the LLC Agreement in accordance )"ith the amendments and modifications set forth herein ; and WHEREAS, M & V INVESTMENT ONE, LLC, a Florida limited liability company ("!vi & V") is making a loan to the Company in the original amount of $ 20 , 112 , 015 . 00 (the "M & V Loan") iniorder to assist the Company in acquiring the issued and outstanding shares of Common Stock of Acreage Florida, Inc . , a Florida corporation pursuant to that certain Stock Purchase Agreement having an effectiv . date of February 24 , 2021 (the "Stock Purchase Agreement") ; and WHEREAS, the Company is executing a Promissory Note in the amount of $ 20 , 11 , 015 . 00 , together with an Irrevocable and Unconditional Guaranty executed by the sole Class A Member (the "Guarantor'') and the Class A Member is executing an Collateral Assignment of Membership Iriterest in the Company and a Share Certificate with Share Power (collectively, the "Loan Documents") ; an WHEREAS, the Class A Member has agreed to amend the LLC Agreement with respect to the granting of a security interest in the Membership Interest of the Class A Member, and the replackment of the Managing Member and substitution of M &V or its assigns, as a substitute Class A Memb r, in the event of a default under the Loan Documents ; and ' WHEREAS, as part of an equity raise for the Company (the "Equity Raise"), the Class B Members listed on the revised Schedule A attached hereto and incorporated herein by reference (collecti ely, the "Class B Members"), have each contributed capital to the Company and have each received Clas B Units (the "Class B Shares") and a Membership Interest in the Company, as set forth on the revised Schedule A . NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency ofwhich"'is hereby I acknowledged by each member, the parti • es hereby agree as follows: AMENDMENT 1. 2. Recitals. The above recitals are true and correct and incorporated herein by ref ence. 1 Amendment. The following paragraphs are hereby amended in accordance withithe terms and conditions of the LLC Agreement: a. ARTICLE 2, FORMATION OF COMPANY AND TERM, is hereby amended to ·I I 45647121 v2 45671501 vl 45678248v1
include Section 2.8: 2 . 8 Investment Securities . In addition to the applicable Delaware Act Provisions set forth in Section 2 . 7 , the Membership Interests of the Members in the Company Iha!! be deemed "securities" under Chapter 678 Florida Statutes "Uniform Commercia!' : Code - Investment Securities" and shall be governed by Chapter 678 Florida Statutes "Uniform Commercial Code - Investment Securities" as in effect from time to time within the State of organization of the Company . The Company shall issue Certificated Sechrity in Registered form representing the Membership Interests and shall place a legend pn each certificate stating : "This security representing the Membership Interest is gov med by Chapter 678 Florida Statutes "Unifonn Commercial Code - Investment Sec u , , ities . "" Members represent and warrant that Company has elected to be governed by Fhapter 678 Florida Statutes and that Members shall not cause or permit Company to terminate Company's election or cause or permit amendment, modification or other change to the Organizational Documents . · b. ARTICLE 4, MEMBERS INTEREST ARTICLE 4, Section 4.4 Additional Capital Contributions, is hereby del ted and replaced with the following: 4 . 4 . Additional Capital Contributions . No Class B Member is required, under any circumstances to make any additional contributions to the Company . Red jhite and Bloom Brands, Inc . , in its capacity as Class A Member shall contribute additional capital, as needed, to satisfy the conditions of the Stock Purchase Agreerrient, the payment of the principal and interest due High Street Capital Partners, LLC under those certain seven ( 7 ) month Note in the amount of $ 10 , 000 , 000 . 00 and thirteen ( 13 ) month Note in the amount of $ 18 , 000 , 000 . 00 (the "High Street Notes") and ahy sums necessary for the expansion of the Company which is not funded through *et Cash Flow . If any Class A Membership Units are sold by the Class A Member to raise additional capital, all such capital must be for the sole use of the Company arid cannot be loaned, hypothecated or encumbered in any way . Should the Class A Memger desire to transfer any Class A Units, the Class A Units must first be offered to[ Class B Members under the same terms and conditions as offered to any third party or affiliate of the Class A Member (the "ROFR") . Class B Members shall have ten ( 10 ) ; business days from written notice by the Class A Member of said intention and price of the Units within which to exercise its ROFR and shall close in accordance with the terms and conditions of the offer . Each Class B Member shall have the right to purchase a portion of the offered Class A Units based on its Membership percentage . ·' Section 4.5 Units is hereby amended to include subsection (c) as follows: (c) Class B Units Converted to Class A Units . Upon an event of default,lmder the terms and conditions of the M & V Loan, and provided the Class B Memb' rs obtain all necessary approvals by the State of Florida Department of Health and othet agencies having jurisdiction over the Medical Marijuana Treatment Center License 1 o convert its Class B Membership Interest to a Class A Membership Interest, the Combany shall approve the admission of the Class B Members as a Class A Member whereupon the LLC Agreement shall be revised accordingly . 2 45647121 v2 45671501 vl 45678248 vl
c. ARTICLE 5, MEMBERS, MEETINGS AND AMENDMENTS, is hereby amended as follows: 4. Additional Members . Following the conclusion of the Equity Raise and so long as any obligations are outstanding pursuant to the M & V Loan, the Company shall not add additional Members or issue additional Units nor create any more classes or series of Members or agree to amend this Agreement in connection with the admission of additional Members without the prior written consent ofM & V . In no event shall the addition of additional members dilute the percentage interests owned by the Class B Members in the Company . 5. Amendments . So long as the M & V Loan is outstanding, the Company shall not amend the LLC Agreement ; provided, however, that the Company may amend the capitalization table, notice addresses and other ministerial sections of the LLC Agreement . 5 . 7 Representations and Warranties of the Class B Members, regarding the limitation of owning, holding or controlling less than five percent ( 5 % ) of the Class B Membership Interest in the Company is hereby revised with respect to Class B Members whereby each Class B Member shall not own, hold or control more than five percent ( 5 % ) of the total equity of the Company . e. ARTICLE 6, MANAGEMENT, is hereby amended as follows and shall . ! , include Section 6.5: 6.1 Management, Subsection (a) is hereby revised to include: I So long as the Company is not in default under the terms and conditions of'the Loan Documents and the Class A Member is not in default under the terms and conditi ns of its Guaranty, and M & V has not exercised its rights under the Collateral Assigrment of Membership Interest, dated June 4 , 2021 , Red, White and Bloom Brands, Inc . , as lv 1 . anaging Member shall have the right to manage the Company and receive all of the benefi thereof. In the event the Company defaults under the terms and conditions of the M & Vi Loan, M & V shall have the right to become the Managing Member or appoint a manager, provided 1 M & V obtains all necessary approvals by the State of Florida Department of Health and other agencies having jurisdiction over the Medical Marijuana Treatment CentJr License ("Approval Agencies") . Upon an event of default under the terms and conditi 6 ns of the Loan Documents, the Company and the Class A Member authorizes M & V to,fake any and all applications on behalf of the Company to take any action and to execute any instrument or document necessary to process this change in control of the ! : Company without any additional consents by the Class A Member . Subsection (e) is hereby revised to include that during an event of default under the terms ' and conditions of the Loan Documents, neither the Class A Members nor the Class B Members can appoint an officer of the 3 45647121 v2 45671501 vl 45678248 Vl
45671501 vl 45678248 vl Company without the written consent of a majority in interest of the Class B Memqers; and (f) is hereby revised to include the Company cannot take any actions with respect b Major 1 Decisions without the prior written approval of M & V, however no such actions shall adversely affect the Membership Interest of the Class B Members . 6.5 Management Fees. The Class A Member shall not charge the Company any. management fees nor shall the Company pay any salaries of any of the officers or, employees of Red, White and Bloom Brands, Inc., except for any fees or costs in 1 curred in performing services for or on behalf of the Company in the ordinary course ofbu iness and at market rates. f . ARTICLE 7 , ASSIGNABILITY OF MEMBER INTERESTS, is hereby amended as follows and shall include Section 7.6: 7 . 1 Assignability of Membership Interests is hereby revised to include, so long as the M&V Loan is outstanding, no Class A Member shall Transfer the whole or any part of its interests without the prior approval of M&V . 7 . 4 Drag Along Rights is hereby revised to provide that (i) so long as the M&V Loan is outstanding, there can be no Approved Sale without the prior written consent of M & V or a majority in interest of the Class B Members and (ii) notwithstanding anything herein to the contrary, in the event of a proposed sale of the company or all or substantially all of its assets to anyone other than a third - paftY, bona fide purchaser, the Class A Member shall obtain the consent of the Class B Members and (iii) the term "Requisite Holders" shall mean at least 75 % of the Class A Members . I I 7 . 6 Admission ofM & Vas a Class A Member . In the event the Company is in in default under the terms and conditions of the Loan Documents and/or the Class A Memb r is in in default under the terms and conditions of its Guaranty, and M & V has exercisec!Jits rights under the Collateral Assignment of Membership Interest, dated June 4 , 2021 (a • - i ; riggering Event"), M & V, or its designated Class A Member, as substitute Managing Merilber shall have the right to manage the Company and receive all of the benefits thereof, shall have the rights and obligations of a Class A Member as of the date of admission to the Company, provided M & V obtains all necessary approvals by the Approval Agencies, bu l shall not have any obligations or liabilities pertaining to its Membership Interest prior to the date of admission, and the Members and Managing Member hereby indemnify and hol lharmless M & V from any and all claims arising prior to the date of admission of M & V as a Class A Member in the Company . Upon the occurrence ofa Triggering Event, the Corripany and the Class A Member authorize M & V to take any action and to execute any instiument or I document to accomplish the conversion from a Class B Member to a Class A Me'?ber with 4 45647121 v2
45671501 vl 45678248 vl respect to the Company and the Approval Agencies without any additional conse1ts from the Class A Member. g . ARTICLE 8 , DIVIDENDS is hereby amended as follows : 8 . 1 Dividends of Net Cash Flow subsection (a) is revised to include that any such dividends shall be distributed to the holders of the Class A Units and Class B Units pro rata and pari passu in proportion to their Percentage Interest and shall add subsection (c) that so long as there are sufficient Net Cash Flow distributions shall be made to the holders of the Class A Units and Class B Units to cover any U . S . Federal Tax liability incurred by each class of Membership for the calendar year prior to making said distribution . h . ARTICLE 13 , DISSOLUTION, LIQUIDATION AND TERMINATION, is hereby amended to include Section 13.7: 13 . 7 M & V Consent . So long as the Company is not in default under the terms and conditions of the Loan Documents and the Class A Member is not in default under the terms and conditions of its Guaranty, and M & V has not exercised its rights under the Collateral Assignment of Membership Interest, dated June 4 , 2021 , the Members shall not vote to dissolve the Company without the prior written consent ofM & V . IfM & Vagrees to the dissolution of the Company, then Section 13 . 4 is amended to include that any sums due M & V shall have priority over any distributions to the Members ; provided, for the avoidance of doubt, such sums shall not be deemed as a return of capital to any Member . 3. High Times Brand . The Company and the Class A Member hereby represent and warrant to the Class B Members and M & V that the Class A Member has purchased the license[ rights to High Times Brand and has granted the Company the right to use the High Times Brapd for no consideration payable by the Company to the Class A Member, except the Company 'shall pay to High Times Brand an amount equal to 4 % of all revenue generated through the Hi' h Times Brand which 4 % includes a 3 % royalty and I % advertising fee . " 4. Schedule A . Schedule A to the LLC Agreement is hereby revised and replaced with, $ chedule A attached hereto . 5. Ratification and Confirmation . Except as herein modified or amended, the tbrms and conditions of the LLC Agreement are hereby ratified and confirmed and in full force abd effect . !I 5 45647121 vz
SOLE CLASS A MEMBER AND MANAGING MEMBER: RED, WHITE & BLOOM BRANDS ING., a British C bia corporation /s/ "Brad Rogers" By:c PrintN - 6 Its: C,t= . [Signature Page to Amendment to Operating Agreement]
---- , - -- , - ------ , - ------- , - ----- ,,, - --- , - ---------- ; CLASS B MEMBERS: DOCHOUSE INVESTMENT, LLC, a Florida limited liability company By: /s/ "Rashmika Patel" Print Name: Rashmika Patel Title: Managing Member HAVEN 700 RXCARE, LLC, a Florida lirilited liability company By: /s/ "Utkarsh Patel" Prin - t N a=m e : U tk a - rn h - P a t - el: ------- , -- , Title: Managing Member 7 45647121 v2 45671501 vl
V PrintName· N'k h Sh .h Title: MGR I es a CLASS B MEMBER: SOUJ'HERN HOSPITALITY FUNDING, LLC, a - floridp limited liability company By: /s/ "Nikesh Shah" 8 45647121V2 45571501v1
. . : q . ! , /s/ Raskm Shah"
'GLASS RMEMBEm, !sHtiBiID = l:= Ldl,1 ! I '45671501 ' l'l: /s/ Markand Patel"
CLASS B MEMBER PATIDAR HOLDINGS LLC, a - _ limited liability company Prin"_t_: - - - ---- c - By: /s/ "signed" Title: II 45647121112 45671501v1
CLASS B MEMBER: MSV3 INVESTMENTS, LLC, a ':Fl - limited liability company By: Print N= - = - am - e: - + - = - <=t ------- - Title: 12 45647121vl 45671501v1 /s/ "Summit Mahesh Shah"
CONSENT AND JOINDER The undersigned being the holder of a Note in the amount of $20,112,015.00 having an e(fective ?ate of June 4, 2021 executed by the Company, S!Jcu,red by a Col_lateral Assignment of Membership !,nterest 111 the Company by the Member, hereby consents to the foregomg Amendment to Amended and Restated ' Limited Liability Company Agreement.of R WB FLORIDA LLc;;.._ , - - t Name:·su it tr,;h sh Shah Title: Manager M & V INVESTMENT ONE LLC, a Florida limited liability company /s/ 'Summit Mahesh Shah" , ') , By: -- " /s - / ' - " . V l i : j . a . y . l P - > a t = e l Y " .l - - = - --- ' - ----- Print Name: Vijay Patel Title: Manager
Red White & Bloom Brands Inc. 3.75% 37.5 0 DOCHOUSE INVESTMENT, LLC, a Florida limited liability company 3.75% 37.5 0 HAVEN 700 RXCARE, LLC, a Florida limited liability company 2.71% 27.1 0 SOUTHERN HOSPITALITY FUNDING, LLC - 2.97% 29.7 0 HEADLINE ENTERTAINMENT, LLC 0.60% 6.0 0 SHUBHLAXMI INVESTMENTS, LLC 0.41% 4.1 0 PATIDAR HOLDINGS LLC 4.65% 46.5 0 MSV3 INVESTMENTS, LLC ii 100.0% 500 500 TOTAL SCHEDULE A SCHEDULE OF i.'vIEMBERS (as of June 4, 2021) , 14 45647121 v2 45671501 Vl 45678248 vl
Exhibit 99.4
DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 LOAN AGREEMENT by and among RWB FLORIDA, LLC as Borrower RED WHITE & BLOOM BRANDS INC., RED WHITE & BLOOM FLORIDA INC., and PHARMACO, INC. as Guarantors and VIRIDESCENT REALTY TRUST INC., as Lender Entered into as of: September 13, 2022
DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 TABLE OF CONTENTS Page ARTICLE I. DEFINITIONS AND INTERPRETIVE GUIDELINES ......... ......... .. ............................... ... .. . 1 Section 1.01. Section 1.02. Section 1.03. Section 1.04. Section 1.05. Section 1.06. Section 1.07. Section 1.08. Section 1.09. Section 1.10. Defined Terms ...................... .. ........................................ ...... .. .. ....... ....... . . ..... .. ... . ... 1 Other Interpretive Provisions ......................................... . ..... .. . .. ....... .. .................. 13 Accounting Terms and Principles ........... ..... ........ .. . ... .. . ...... ...... .. .. ...... . . . .... . ...... ... 14 Rounding .............................................................................................................. 14 References to Agreements, Laws, Etc .................... ............ . ............ .. . .. ....... ... . .... 14 Times of Day .... ................... . ............. ... .. .......................................................... ... 15 Timing of Payment of Perfonnance ..................................................................... 15 Corporate Terminology ............................... ..... . . . . .... . ........ . ....... .. ......... . . ... . .. ........ 15 Cannabis Laws ..................................................................................................... 15 Schedules .... . ... ... . . . . . . . . ...... . . .... .. . ............. .... ....... . .. .. .. . ..... .... . ......... . ... .... ........ . .... .. . 15 ARTICLE II. AMOUNT AND TERMS OF LOANS . ... . ......... . .. .... .. . .. . . ...... . . . . . ....... .. .... . .. . .. . ........ .. ........... 15 Section 2.01. Section 2.02. Section 2.03. Section 2.04. Section 2.05. Section 2.06. Section 2.07. Section 2.08. The Loans ................ .. .................... . ................. . ..... . . . . ..... .... ... ....... . .. ........... ......... . 15 Disbursement of Funds ; Original Issue Discount . .... ..... . .. . .. . . ........ . . .......... ..... .. ... 16 Payment of Loans ; Evidence of Debt ; PIK Loans .. ............ .. . .... ... ... . . ......... .. .... . .. 16 Interest ................................................................................................................. 17 Adjustments to Base Interest Rate ................... ........... .. .. ........... ... . ..... . .. . .... .. ....... 18 Additional Fees . ... . ... . ........................................ ..... ...... .. .... . .............. . .................. 18 Waiver of Subrogation, etc ......... .. . . ... . ........ . ........ ........ .. ................. ... ... . ............ .. 18 Loan Party Representative...................... . . . .... ... . . . ......... . . . . . ... .. .. . . ....... . .... .. . . . ........ . 18 ARTICLE Ill. [RESERVED] ................ . .. .. .. . . .... ........ .. . . . . . .. . ..... . . .. . . . . ... . . .. . . ... ... .. .. ..... . . ..... . ... . .. . ......... . ...... .. 19 ARTICLE IV. PAYMENTS ,... . ... . .. .. ..... .. .... .... .................. .... ..... .. ... . . . ..... .. . . ... .... ...... . ... . . .... . . . .. . ... . ...... . . . ... .. 19 Section 4.01. Section 4.02. Section 4.03. Section 4.04. Voluntary Prepayments ........................................................................................ 19 Mandatory Prepayments ...................................................................................... 19 Payment of Obligations; Method and Place of Payment. .................................... 20 Taxes....................... ............... ... .................................. . .................................... . . .. 21 ARTICLE V. CONDITIONS PRECEDENT TO LOAN ........... ..... ... ...... ......... .... .. ........... . ..... . ... . . . ... ........21 Section 5.01. Closing Date Loan ... . ... . ... . . . ........ . ..... .... ... ............. .. .. ... ..... ... . .. . .. ... . . .. .. ... .... . . . ... . ... 21 ARTICLE VI. GUARANTEE ......... . .. ... .................. . .......... . .. ... . . ..... . ............................ .. .............. . ............. 23 Section 6.0 I. Section 6.02. Section 6.03. Section 6.04. Section 6.05. Guarantee ...... . . .. ...... ........... ... . ... ... ...... . .. . ........ .. ....... .. ..... .. ............. .. .... . .......... .. . ... 23 Right ofContribution .... ... .... .. ..... ..... . .... . ..... ........... .... ....... ...... ... . . ............... ........ . 24 No Subrogation ....................................................................................................24 Modification of the Guarantor Obligations .......................................................... 24 Guarantee Absolute and Unconditional ........ . .... .. . ..... . .. ......... ... .. ........ . .............. .. 25 II
DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440O5F9C7DC1 Section 6.06. Section 6.07. Section 6.08. Section 6.09. Reinstatement. ......................................... . .. .. ..... .... .... .. .. .. ....... ... .. . .. ........ . .... . ... . .. .. 25 Payments ... ....... ..... ... ..................... ..... . . .. .. . ..... . ... ... .. ....... . ................ .. .......... .... ..... 26 Taxes . .. .... . ....... . ......... . .............. ........... . ........... . ..... . ............ . .. .............. .. .. . .. . .. ...... . 26 Recourse Limited Against RWB Michigan PropCo; Carveouts .......................... 26 ARTICLE VII. REPRESENTATIONS, WARRANTIES AND AGREEMENTS ..................................... 26 Section 7.01. Section 7.02. Section 7.03. Section 7.04. Section 7.05. Section 7 .06. Section 7.07. Section 7.08. Section 7.09. Section 7.10. Section 7.11. Section 7.12. Section 7.13. Section 7.14. Section 7.15. Section 7 .16. Section 7.17. Section 7.18. Section 7.19. Section 7.20. Section 7.21. Section 7.22. Section 7.23. Section 7.24. Section 7.25. Section 7 .26. Section 7.27. Section 7.28. Section 7.29. Status ...... ..... .. .. .. . ... . .... . ... .. ... . . . .. . ... . . .. .. .. ........................... . ........... . . .. ................... .. 26 Power and Authority ............................................................................................ 26 No Violation.......... ...................... . ........................ . ............. .. . ............ . .... . . . . . ........ 27 Litigation, Labor Controversies, Etc .................................................................... 27 No Margin Stock....... ... .................. ... .. ............. . .. ... .... .. .. . ........... .. .................... .... 27 Approvals, Consents, Etc..................................................................................... 27 Investment Company Act .. .... . .. .... . ........... .. .. . . . .. . .. .. . .. ... ...... ........ .. ... ..... .... ... ... .....27 Accuracy of Information ...................................................................................... 28 Financial Condition; Financial Statements ........... ........ . ............. .. . .. .... . .......... . .. . .28 Tax Returns and Payments ................. ..... ... . ...· - ·················· - .. · ······· ·· ······ · ····· · ···..... 28 Benefit Plans ......... ....... ..... ..... . .............. . .. . ...... . .. . ........ . ... . .. . .............. .. .. ............. .. 28 Subsidiaries; Capitalization. .... . .. . ...... . . . .. ....... .... ... ........ ... .......... . . . .... .. .... . . ....... . .. . 29 Intellectual Property; Licenses, Etc . .. ... .. . .. .. ....... ... . . . .. . ............ . .......... . .... . . . . ....... . 29 Environmental Warranties ...... .......... ... .. .... .... . .. ...... . ... ......... . ...... ........... . ...... ..... ..29 Ownership of Properties ........... . . . . . . . .. . .. . .. . ................ .. ........ ............. . . ... ......... ......30 No Default. .. . .......... .... .. . . . . . . . ..... . .. . ..... ........ ...... ............. ...... ...................... ... . .. . ..... 30 Solvency ............ . ....... .. ...... . ......... . ... . . . ......... ... ........ .. ............................. . .............. 30 Locations of Offices, Records and Collateral ...................................................... 30 Compliance with Laws and Permits; Authorizations ........................................... 30 No Material Adverse Effect. ....... . ...... . ......... . ................. .. . .............. ... .... .............. 31 Contractual or other Restrictions ................. . . . . . .... . ... .. .. ... . ... .. . ...... ..... ..... .. ... . . . .....31 Collective Bargaining Agreements ................... .. . ...... . . .. . .. ... . . .... . ..... . ... .. ..... .. ... . ...31 lnsurance ................... ... ................. .... . ............ . ...... . . .. .. . .... . ........... . . ....... ....... . . .. . . .. 31 Conduct of Business ..................... . . . . . ... . .................. . .. . .......................... . ....... ... . . . 31 Deposit Accounts and Securities Accounts ........................... ........ . .. . . . ..... . . . . ....... 3 I Absence of any Undisclosed Liabilities ......... .... . . .. ... . . .. .. . ............ . . .. . ... . . ........ . . . ...31 Material Contracts and Regulatory Matters......................................................... 32 Anti - Terrorism Laws ........... ..... . . . ......... ... . . . . ......... .. ... .. . . . . ........................... .. ....... 32 Transactions with Affiliates .. . ..... ... . . .. . .. . .. . . . .................... .. . . .. .. .. ...... ...... . ..... . .. . ..... 32 ARTICLE VIII. AFFIRMATIVE COVENANTS .......... . . . .. .. ....... .. .. .... .... .... ...... . ... . . . . ... . .. ... ... .......... . ...... . .. 32 Section 8.0 I. Financial Information, Reports, Notices and Information.. .. . .. .. ............ . ......... .... 32 lll
DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 Section 8.02. Section 8.03. Section 8.04. Section 8.05. Section 8.06. Section 8.07. Section 8.08. Section 8.09. Section 8.10. Section 8.11. Section 8.12. Section 8.13. Section 8.14. Section 8.15. Section 8.16. Section 8.17. Section 8.18. Section 8.19. Books, Records and Inspections ... . . .... ..... . ........ .. . .. . .. ................................... .. ......35 Maintenance of Insurance .... . .. .... ........ . . . ... . .. . ..... .... . ... . . .. .. . .. ... ... . . .. .. . . .. . .. ... . . .. . ......35 Payment of Taxes.. . ........... . . ..... ... .. . ........... ... .. . .......... . ... .. . ....... . . . .......................... 35 Maintenance of Existence; Compliance with Laws, Etc...................................... 35 Environmental Compliance .. . .. . .. ..... . .............. . .. . ............ . .... . .. . .. .. ..... ....... . .. ... .. ....36 Maintenance of Properties ................................................................................... 37 [Reserved] .... . ... . . ..... . ..... ...... . . ..... . ... .. .. . . . . . . .. . . . . .. .. .. .. . . ...... . ...... . . . . . ...... ....... ... .. .... . . .. 37 [Reserved] .. ......... ... . . ...... . .. . . . . ..... . ... ... .... . . ..... .. ... . . .... . ... . . ......... . . . .... ... .... .... . . .. .... .... 37 Further Assurances ...... . ... .. .. ..... . . .. . . .................... . .... . . . .. ....... ... . ...................... . .. ...37 [Reserved]..................... ...... ..... . ...... .. . . . . .. . ............. . .... .... .... ... . . .. .... .. .... . ............. ...37 Bank Accounts.. ... ..... ... .............. ... ... . . ............................. . ....... . . . . .. . ........... .. ... .. . ...37 [Reserved]. ...... . . . ... . .. . . ................. . .. . ... .. ... . ...... . ..... .... ...... . .... . ........ .. ... . . . . .. .......... ...38 Regulatory Matters ...... ... ............ . ... .. . .. .. ... .. . ..... . . . ..... ....... ... . ..... . .. . . . ...... . ....... . ......38 REIT........... ............. . ...... .. . .. . .... .. . . . . . ........ . .. . ..... . ......... .. ... ... . . . . . . . . .. .. .... . . ... . .. . . . .... ...38 Post - Closing Matters. ........... ... . . .. ................. ...... ............ . . ... ....... ......... . .... ... . . . ......38 SNDA .................................. .. . .. . . .... .. ... . . . ... .. ... ... .. . . ....... . ... . . .. . ...... . ..... . .. . .. . ... . ..... . . 39 Assignment of Leasehold Interests . .. ..... .. . . .. . ... . .. ........ . . .. . .. . . ........ ... .. .... . . ...... ...... .39 Payment of Material Liabilities ........ . . ...... . ... .. ...... ... . . ........ . .. . . .. . ...... ..... . . ........ ... . . 39 ARTICLE IX. NEGATIVE COVENANTS .... . . . .................. .. . . ........ .... .. . ... . .. ..... . ... . .. . . .. . . .. . .. ... . . . . ..... . .. . .. . .. ..40 4 Section 9.01. Section 9.02. Section 9.03. Section 9.04. Section 9.05. Section 9.06. Section 9.07. Section 9.08. Section 9.09. Section 9.10. Section 9.11. Section 9.12. Section 9.13. Section 9.14. Section 9.15. Limitation on Indebtedness . . . . ........ .. ..... ... ... ...... .... .... .... . .. .... . .. ........ .. . . .. . .. ..... . ......40 Limitation on Liens. ...... . ......... .. ......... . . ... ... . . ...... . . .. . . . . . ....... ... .............. . .. . . . .... . .... . .40 Consolidation, Merger, Etc .................................................................................. 40 Permitted Dispositions .. .. . . .... . ........ .. ................ .. .. . .. . ...... .. ... .. .... .... ....................... 40 Invest1nents .. ......... . ... . .. ......... ... .. . . ...... ....... ... ... . ... . ........... ... . . ....... .......... ..... . .. ... .... 41 ERISA ............................... ................. .... .. .... . .... . . .. .. . . . .. ...... ...... ... .... .... . . .. . .. .......... 42 Restricted Payments .. ........ ... . ... ... . .. .... .. ........... .. . ... . . .. . . ............. . . ............ ...... .... .. . . . 42 Payments and Modification of Certain Agreements... . .. . . . . . . . . . ... ..... .... . ... .. .. .. . . . . . . .42 [Reserved]. ... ... . . ........ ........... ... .... .. . . ..... . .. .. . .. .. .. ... . . . . . .. .. .. . ........ . ...... . ........... . ......... 43 Transactions with Affiliates. .. .. .. ....... ..... ..... ...... . .... ..... . . .. . ... . .. . . .... .. . . .. . ... . .. . .. . . . . .... 43 Restrictive Agreements, Etc.............................. .. ... . . . . . . ... ... . ... ... ..... .. .......... .. .. . .....43 [Reserved]..... ... . ..... . .. . ...... . .. . ..... . .... .. ........... . ... . ... . .. . ..... . .. .. ..... . .... . ... .......... . .......... 43 Changes in Business and Fiscal Year. ......................... ... . .... ...... . .. ... ... . . .... .. .... ..... 43 Financial Covenants . . .. .. .. ... .. ........... .. ..................... . . .......................... . ............... ..44 Limitation on Issuance of Stock .... . ....... . .......... . . ... .. ...... .... .... ... . .... ....... .. .... .. . ... . . .44 ARTICLE X. EVENTS OF DEFAULT ... . . . ...... .... . .. ........ .. ... .. .. .. .... . ............. . ............... ... .......................... 44 Section 10.01. Listing of Events of Default.......................... ......... ... ............................. . .... . .. ...... 44
5 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440O5F9C7DC1 Section I 0.02. Remedies Upon Event of Default ... ... . . . . . .. . .. .. ........ . ........... . ... . . . .. .. . .. .. . .. . ........... . . .46 ARTICLE XI [RESERVED]. . . ...................... .. ... . .......... .................. . .... . ....... . . . ............. . . . . . ... . ...... . . . . . .. .. ... . .. 47 ARTICLE XII. MISCELLANEOUS ............ . ... . . . . ... . .. . .. . . ... . . ... . . . . . ....... . . ..... . ... . ...................... . ......... . .......... 47 Section 12.01. Section 12.02. Section 12.03. Section 12.04. Section 12.05. Section 12.06. Section 12.07. Section 12.08. Section 12.09. Section 12.10. Section 12.11. Section 12.12. Section 12.13. Section 12.14. Section 12.15. Section I 2.16. Section 12.17. Section 12.18. Section 12.19. Section 12.20. Section 12.21. Section 12.22. Amendments and Waivers . . .. . .. .. ... . . . ... . . . . .. . .. .. . . .. . . . . . . .... . ..... ... .. .. . ......... ... . . .. . . . .. . .... 47 Notices and Other Communications .... . .. ............ . .. ... .. ... . ... ........ ... . . .. ... ... . . . . . . . .... ..47 No Waiver; Cumulative Remedies . . . .... . ... ...... . .... . . . ...... .... . . .. . .. .. .. . . ....... . .. .. ..... . ... .48 Survival of Representations and Warranties............................... . .. . .. .. .................48 Payment of Expenses and Taxes; Indemnification .. . .. .. . ..... . ... . . .......... . . . . . . . . . .... .. ..48 Successors and Assigns .. ... . ............. . . . ..... . . . .... ... .. ... . . . . . . .. ... . . . ... .. . .. . .. . . . ... . . . . .. .. ..... .49 Pledge of Loan . .. . . . . . ... ... . .. .. . ... ... ................ .. .... . .. . ... . ................ .. . ... ..... . . ... . ... . . . .. . . . . 49 Set - off .. ..... . . . .. ... .. .. . ..... . .. . . . . . . . . .. . .. . ............. .... . . . . . . . . . . . . ... . ...... .. . . ......................... . ... 49 Counterparts... .............. . .. ...... . . . . . ... .. .. . . . . . . . . . .. ....... . ... . . .. . . . .. . . ....... . .. . . .. ......... ... ..... .. . 49 Severability .... .. . . . .. . .. . ....... . .. .. .. .. . . ..... . . . . . . . . . .. . .. . . . . .. .. ... .. .... .. . ... . . . . .......... . ... . . .... ... ....50 Integration ........................... ... .. ...... . ... .. ................... ...... . ... . . . . . .. . ... .. .... ... . . . . .. ......... 50 GOVERNING LAW . . ............. .. . .. .. . . ........... .. . .. .. . .... .. ............. . ... . . .. ..... . . . . . ........ .... 50 SUBMISSION TO JURISDICTION ; WAIVERS ............................................... 50 Acknowledgments .... . ..... . . . ... . . . . .. . . . .. . .. . .. . . .. .. .. . . . . . . .................. . ..... .. ....... ... . . . .. ....... 51 WAIVERS OF JURY TRIAL . . .. .. . ...... . . .. . . . ..... . . . ... . . .. .......... . ................ . . .. ........... 52 Confidentiality . . ....... .. ..... . . ... . . . .. . . ... .. . . ... . . . . . .... ... ... . . . . . . . . . . .. .. ... . . .. . . ... . . .... .. . .. .. .. ....... 52 Press Releases, Etc .. .. ............... ... ..... ... ....... . ......... ... ......... . . .. . ... .. . ... .. ... . .. ... .. . ..... . . .53 Releases of Guarantees and Liens... . .. . . .. . . . ......... . . . . . .. . .. . .. .. . .. .. . ........ . . . ... .. . .. ..... . .. . . 53 USA Patriot Act . .... .. . . . .. .... ..... . ..... ... ........... . .................... . .. . .. . . ............ ..... . . . . ....... .53 No Fiduciary Duty ... .. . . .... . .. . . ... . .... .. . . .. . ... .. .. ......... . . . ........... . ............ . . .. .. . ... . ..... . . . .. 53 Authorized Officers .. .... . .. . . . . . . .... ..... .. . . . .... .......... . ................. ... ........... .. . ... . ... ........ 54 Subordination of Intercompany Indebtedness and Leases. ............. . ................ ....54 Section 12 . 23. Tax Treatment ..... . ..... ...... . .... . ................ . . . . . . . ... . .. . .. . . . ... . ... . ........ .. ...... . . . ......... . ....... 54 SCHEDULES AND EXHIBITS Schedule 7.0 I Schedule 7.12 Schedule 7.25 Schedule 12.02 Loan Parties Capitalization Deposit and Securities Accounts Notice Addresses Exhibit A Compliance Certificate
DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 LOAN AGREEMENT THIS LOAN AGREEMENT, dated as of September 13 , 2022 , is by and among RWB FLORIDA, LLC, a Delaware limited liability company ("Borrower"), RED WHITE & BLOOM BRANDS INC . , a corporation organized and existing under the laws of British Columbia, Canada ("Parent"), RED WHITE & BLOOM FLORIDA INC . , a Florida corporation ("RWB Florida OpCo"), PHARMACO, INC . , a Michigan corporation ("RWB Michigan PropCo", and together with Parent and RWB Florida OpCo, collectively, the "Guarantors"), and VlRIDESCENT REALTY TRUST, INC . , a Maryland real estate investment trust ("Lender") . RECITALS WHEREAS, pursuant to that certain Secured Promissory Note dated April 27 , 202 I in the original principal amount of $ 18 , 000 , 000 (as amended and in effect on the date hereof, the " 2021 Note"), Borrower is currently indebted to Lender for the Existing VRT Debt ; WHEREAS, Borrower has requested that Lender extend to Borrower a term loan in the original principal amount of $ I 8 , 300 , 000 on the Closing Date ; and WHEREAS, Lender has agreed to provide the term loan, subject to the terms and conditions contained in this Agreement . AGREEMENT NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto agree as follows : ARTICLE I. DEFINITIONS AND INTERPRETIVE GUIDELINES Section I . 0 I . Defined Terms . As used herein, the following terms shall have the meanings specified in this ection 1 . 0 I unless the context otherwise requires : "Acquisition" shall mean any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the assets ofa Person, or of any line of business or division of a Person, (b) the acquisition of in excess of 50 . 00 % of the Capital Stock of any Person, or otherwise causing any Person to become a Subsidiary, or (c) a merger or consolidation or any other combination with another Person where a Loan Party is the surviving entity . "Affiliate" shall mean, with respect to any Person, any other Person which, directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such Person . For purposes of this definition only, control of a Person shall mean the power, direct or indirect, to direct or cause the direction of the management and policies of such Person, in each case whether through the ownership of any Capital Stock, by contract or otherwise . "ALTA" shall mean the American Land Title Association. ''Anti - Corruption Laws" shall mean all laws, rules, and regulations of any jurisdiction applicable to any Loan Party or any of its Subsidiaries from time to time concerning or relating to bribery or corruption, including the United States Foreign Corrupt Practices Act of I 977 and other similar anti - corruption
2 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC 1 legislation in other jurisdictions. "Apopka Property" means the Real Property located in Apopka, Orange County, Florida, identified by the assessor's office as parcel number 0 l - 20 - 27 - 0000 - 00 - 016 , and having a common address of 6704 Plymouth Sorrento Rd . , Apopka, FL 32712 . "Applicable Laws" shall mean, subject to the carve - outs and acknowledgments contained in ection 1 . 09 , as to any Person, any law (including common law), statute, regulation, ordinance, rule, order, policy, decree, judgment, consent decree, writ, injunction, settlement agreement or governmental requirement enacted, promulgated or imposed or entered into or agreed by any Governmental Authority or determination of an arbitrator, in each case applicable to or binding on such Person or any of its property, products, business, assets or operations or to which such Person or any of its property, products, business, assets or operations is subject . "Authorized Officer" shall mean, with respect to a Loan Party, (a) a senior officer of such Loan Party, (b) a manager of such Loan Party (ifa manager - managed limited liability company), (c) a member of such Loan Party (if a member - managed limited liability company), or (d) another authorized employee of such Loan Party, but only to the extent (in case of clauses (b) through (d)) such manager, member or employee is expressly authorized to take the applicable action under such Loan Party's Organization Documents or a duly adopted corporate resolution or written consent . "Board of Directors" shall mean the board of directors, board of managers or other equivalent governing body of a Person . "Business" shall mean the business of cultivating, producing, processing, packaging or marketing cannabis products for distribution and sale ; all ancillary activities ; and all similar activities . "Business Day" shall mean any day excluding Saturday, Sunday and any day that shall be in New York, New York a legal holiday or a day on which banking institutions are authorized by law or other governmental actions to close . "Cannabis Licenses" means each Permit required to be held by any U . S . Loan Party to conduct its Business in compliance with State Cannabis Laws and other Applicable Laws . "Capital Expenditures" shall mean, for any specified period, the sum of, without duplication, all expenditures made, directly or indirectly, by a Person during such period that are or should be reflected as capital expenditures in accordance with GAAP . "Capital Stock" shall mean (a) any and all shares, interests, participations, units or other equivalents (however designated) of capital stock ofa corporation, membership interests in a limited liability company, partnership interests of a limited partnership, any and all equivalent ownership interests in a Person, and (b) any and all warrants, rights or options to purchase any of the foregoing . "Cash Equivalents" shall mean (a) securities issued or directly and fully guaranteed or insured by the United States Government or any agency or instrumentality thereof having maturities of not more than one year from such date, (b) cash and demand deposits maintained with the domestic office of any commercial bank organized under the laws of the United States (c) time deposits and certificates of deposit having maturities of not more than one year from such date and issued by any domestic commercial bank having capital and surplus in excess of $ 500 , 000 , 000 , and ( d) commercial paper rated at least A - 1 or the equivalent thereof by Standard & Poor's Ratings Services and maturing within 90 days from such date .
3 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 "Casualty Event" shall mean the damage, destruction or condemnation, as the case may be, of property of any Person . "CERCLA" shall mean the Comprehensive Environmental Response, Compensation and Liability Act of 1980 . "Change in Cannabis Law" shall mean any change in Applicable Law, including Federal Cannabis Law and State Cannabis Law, (a) that would make it unlawful for Lender to (i) perform any of its obligations hereunder or under any other Loan Document, or (ii) to fund or maintain the Loans, (b) pursuant to which any Governmental Authority has enjoined Lender from (i) perfonning any of its obligations hereunder or under any other Loan Document, or (ii) funding or maintaining the Loans, or (c) that would result in any business activity conducted by any Loan Party being a Restricted Cannabis Activity, and such result described in this clause (c) would have a Material Adverse Effect . "Change in Law" shall mean (a) the adoption of any law, rule, regulation or treaty after the date of this Agreement, (b) any change in any law, rule, regulation or treaty or in the interpretation, implementation or application thereof by any Governmental Authority after the date of this Agreement or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority after the dale of this Agreement . "Change of Controf' shall mean any of the following (or any combination of the following) whether arising from any single transaction event or series ofrelated transactions or events that, individually or in the aggregate, result in : (a) any amalgamation, consolidation, statutory arrangement or merger involving a Florida Loan Party in which such Florida Loan Party is not the continuing or surviving company ; (b) the sale, transfer or other disposition of all or substantially all assets of any Florida Loan Party or ofa material business line of any Florida Loan Party ; or (c) Parent ceasing to own and control, directly or indirectly, more than 50 . 00 % of the outstanding Capital Stock of any U . S . Loan Party or failing to have the power to direct or cause the direction of the management and policies of any U . S . Loan Party . ''Closing Date" shall mean the date first set forth above. "Code" shall mean the Internal Revenue Code of 1986 , and the Treasury Regulations promulgated and rulings issued thereunder . "Collateraf' shall mean, collectively, (a) the Mortgaged Properties, (b) the Florida Cannabis License, and (c) any other assets of any Loan Party or other assets (of any Person) upon which Lender has been, or has purportedly been, granted a Lien in connection with this Agreement or any other Loan Document . "Collections" shall mean all cash, checks, credit card slips or receipts, notes, instruments, and other items of payment (including insurance proceeds, proceeds of cash sales, rental proceeds, and tax refunds) of a Loan Party . "Compliance Certificate" shall mean a certificate duly completed and executed by an Authorized Officer and the chief financial officer of Parent, substantially in the form of E , hi bit A , attached hereto . "Contingent Liability" shall mean, for any Person, any agreement, undertaking or arrangement by which such Person guarantees, endorses or otherwise becomes or is contingently liable upon the Indebtedness of any other Person, or guarantees the payment of dividends or other distributions upon the Capital Stock of any other Person .
4 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 "Contractual Obligation" shall mean, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound, other than the Obligations . "Detroit Property" means the Real Property located in Detroit, Wayne County, Michigan, identified by the assessor's office as parcel number 22008505 - 6 , and having a common address of 19449 Glendale St . , Detroit, Michigan 48223 . "Default" shall mean any event, act or condition that with notice or lapse of time, or both, would constitute an Event of Default . "Default Rate" shall mean a per annum rate equal to 20.00%. "Deposit Account Control Agreement" shall mean a pledge, collateral assignment, control agreement or bank consent letter, in form and substance reasonably satisfactory to Lender, executed and delivered by the applicable Loan Party, Lender, and the applicable securities intermediary or bank, which agreement is sufficient to give Lender "control" over each of such Loan Party's securities accounts, deposit accounts or investment property, as the case may be . "Disposition" shall mean, with respect to any Person, any sale, transfer, lease, contribution or other conveyance (including by way of merger or amalgamation) of, or the granting of options, warrants or other rights to, any of such Person's or their respective Subsidiaries' assets (including Capital Stock of its Subsidiaries) to any other Person, in a single transaction or series of transactions . For avoidance of doubt, the term "Disposition" shall not include the sale or issuance by a Loan Party of its own unissued Capital Stock . "Dollars" and"$" shall mean dollars in lawful currency of the United States. "Enforcement Action" means the exercise of any rights or remedies by any Person to foreclose on any Collateral or to take possession of, sell, enforce, or otherwise realize (judicially or nonjudicially) upon any Collateral, including the commencement of any lawsuit to facilitate the foregoing actions . "Environmental Claims" shall mean any and all administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigations or proceedings relating to any Environmental Law or any permit issued, or any approval given, under any such Environmental Law (collectively, "Claims"), including Claims resulting from the Release or threatened Release of Hazardous Materials or arising from alleged injury or threat of injury to health or safety (to the extent relating to the exposure to Hazardous Materials) or the environment . "Environmental Law" shall mean any applicable federal, state, or local statute, law, rule, regulation, ordinance, code and rule of common law now or hereafter in effect, and any binding judicial or administrative interpretation thereof, relating to the protection of the environment or human health or safety (to the extent relating to exposure to Hazardous Materials) . "ER/SA" shall mean the Employee Retirement Income Security Act of 1974 , and the regulations promulgated thereunder . "Excluded Account" shall mean any deposit account that is used solely to fund payroll or employee benefits, so long as the applicable Loan Party does not deposit or maintain funds in any such account in excess of amounts necessary to fund current payroll liabilities, payroll taxes or other wage and employee benefit payments .
5 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 "Existing VRT Debt" shall mean, with respect to the 2021 Note as of the relevant date of determination, the sum of all principal outstanding as of such date, all accrued but unpaid interest as of such date, and all other fees and charges due and owing to Lender as of such date . As of September 13 , 2022 , the Existing VRT Debt is $ 20 , 234 , 216 . 16 and the principal balance of the Existing VRT Debt will continue to accrue interest at the rate specified in the 2021 Note, which, so long as no event of default occurs thereunder, results in per diem interest of $ 6 , 164 . 38 . "Extraordinary Receipts" shall mean any cash received by or paid to or for the account of any Loan Party not in the ordinary course of business, including : (a) proceeds of Judgments and settlements, (b) indemnification payments received by any Loan Party to the extent not used or anticipated to be used to pay or reimburse for any corresponding liability, and (c) tax refunds. "Federal Cannabis Law" shall mean any federal laws of the United States treating cannabis and related products as illegal or as controlled substances . "Florida Cannabis License" shall mean, collectively, (i) the Florida Medical Marijuana Treatment Center license currently held by RWB Florida OpCo, (ii) all renewals, replacements and substitutions thereof, and (iii) any other Cannabis License awarded or otherwise issued to any Florida Loan Party thal permits it to engage in the Business in Florida . "Florida Loan Parties" shall mean, collectively, Borrower and RWB Florida OpCo ; and "Florida Loan Party" shall mean any of the Florida Loan Parties, individually . '"GAAP" shall mean generally accepted accounting principles in effect from time to time in the United States, subject to ection 1 . 0 3 . "Governmental Authority" shall mean (a) the government of the United States, or any state, commonwealth, protectorate or political subdivision thereof, (b) the government of Canada, or any province or political subdivision thereof, and (c) any entity, body or authority exercising executive, legislative, taxing,judicial, regulatory or administrative functions of or pertaining to government, including the Pension Benefit Guaranty Corporation and other administrative bodies or quasi - governmental entities established to perform the functions of any such agency or authority . "Guarantee Obligations" shall mean, as to any Person, any Contingent Liability of such Person or other obligation of such Person guaranteeing or intended to guarantee any Indebtedness of any other Person (the "primary obligor") in any manner, whether directly or indirectly . '"Hazardous Materials" shall mean any chemical, waste, material, pollutant, contaminant, material or substance which is prohibited, limited or regulated by any Environmental Law . "Indebtedness" shall mean, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP : (a) all indebtedness of such Person for borrowed money and all indebtedness of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments ; (b) the maximum amount of all letters of credit (including standby and commercial), bankers' acceptances, bank guaranties, surety bonds, performance bonds and similar instruments issued or created by or for the account of such Person ; (c) all obligations of such Person to pay the deferred purchase price of property or services, but excluding trade accounts payable in the ordinary course of business (which are not overdue for a period of more than 90 days past the applicable due date thereof) ; (d) indebtedness secured by a Lien on property owned or being purchased by such Person, whether or not such indebtedness shall have been assumed by such Person or is
6 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440O5F9C7DC1 limited in recourse ; and (e) all Guarantee Obligations of such Person in respect of any of the foregoing . _For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture in which such Person is a general partner or a joint venture, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor . "Indemnified Taxes" shall mean (a) Taxes, other than Taxes imposed on Lender's net income, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document and (b) to the extent not otherwise described in the preceding clause (a), Other Taxes . "Insider" means (a) any senior officer of Parent, (b) any Person that, directly or indirectly, holds more than 5 . 00 % of the outstanding Capital Stock of Parent, and (e) spouse, domestic partner or other family member of a Person described in clauses (a) and (b) . "Insolvency Event" shall mean, with respect to any Person, including Lender, such Person or such Person's direct or indirect parent company (a) becomes the subject of a bankruptcy, insolvency or examinership proceeding (including any proceeding under any Insolvency Legislation), or regulatory restrictions, (b) has had a receiver, examiner, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business appointed for it or has called a meeting of its creditors, (c) admits in writing its inability to pay the Obligations, (d) is adjudicated insolvent or bankrupt by a court of competent jurisdiction, (e) admits the material allegations of a petition or application filed with respect to it in any bankruptcy, reorganization or insolvency proceeding, (t) takes any corporate action for the purpose of effecting any of the foregoing, or (g) in the good faith determination of Lender, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any proceeding or appointment of a type described in clauses (a) or (b) . "Insolvency Legislation" shall mean legislation in any applicable jurisdiction relating to bankruptcy, insolvency, reorganization, arrangement, compromise or readjustment of debt, dissolution or winding up, or any similar legislation, and specifically includes the U . S . Bankruptcy Code, the Bankruptcy and Insolvency Act (Canada), the Companies' Creditors Arrangement Act (Canada), the Winding Up and Restructuring Act (Canada), and any similar legislation under Applicable Law . "lntercompany Indebtedness" shall mean any Indebtedness or payment obligation between or among Loan Pat 1 ies or any other Subsidiary of Parent, in any case only to the extent (a) not secured by a Lien on any Collateral, and (b) expressly subordinated to the Obligations pursuant to a Loan Document . "lntercompany Subordination Agreement" shall mean the lntercompany Subordination Agreement dated as of the Closing Date, executed by the Loan Parties, Subsidiaries of Parent and such other Persons as Lender may require on the Closing Date, in favor of Lender and the other Secured Parties, as it may be amended, restated, amended and restated, supplemented or otherwise modified from time to time . "Investment" shall mean, relative to any Person : (a) any loan, advance or extension of credit made by such Person to any other Person, including the purchase by such first Person of any bonds, notes, debentures or other debt securities of any such other Person ; (b) the incurrence of Contingent Liabilities for the benefit of any other Person ; (c) acquisition ofany Capital Stock or other investment held by such Person in any other Person ; and (d) any contribution made by such Person to any other Person . "Judgment" shall mean any judgment or order for the payment of money, fine, enforcement penalty, or a settlement of any lawsuit or arbitration proceeding, or other disputed claim or enforcement action .
7 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 "Lien" shall mean any mortgage, pledge, security interest, hypothecation, charge, claim, assignment for collateral purposes, lien (statutory or other) or similar encumbrance, and any easement, right - of - way, license, restriction (including zoning restrictions), defect, exception or irregularity in title or similar charge or encumbrance (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement or any lease in the nature thereof) . "Liquidity" shall mean the sum, for the Florida Loan Parties, of unrestricted cash and Cash Equivalents, in each case which is held in a Controlled Account (other than those deposit accounts which are Excluded Accounts) . "Loans" shall mean, collectively, the amounts advanced (or deemed advanced) by Lender to Borrower pursuant to Section 2 . 0 I , including the Initial Loan and all PIK Loans . "Loan Documents" shall mean (a) this Agreement, the Security Documents, the Note, the Intercompany Subordination Agreement and any other subordination or intercreditor agreements in favor of Lender with respect to this Agreement, and (b) any other document or agreement executed by any Loan Party, or by Parent on behalf of the Loan Parties, or any of them, and delivered to Lender in connection with any of the foregoing or the Obligations . "Loan Parties" shall mean, collectively, Borrower and Guarantors ; and "Loan Party" shall mean any of the Loan Parties, individually . "Loan Party Representative" shall mean Parent. "M&V Indebtedness" means the Indebtedness of Borrower and Parent under or in connection with that certain promissory note dated on or about June 4 , 2021 in the original principal amount of $ 20 , 112 , 015 , as amended or restated from time to time . "Make - Whole Amount" shall mean, with respect to any prepayment of the Loans or repayment in connection with an acceleration of the Loans prior to the Maturity Date, an amount equal to 1 . 00 % of the aggregate amount being prepaid or repaid . "Material Adverse Effect" shall mean with respect to a Person a change or effect that, when taken individually or together, is or would reasonably be expected to have a material adverse effect on (a) the business, assets, liabilities (actual or contingent), operations, condition (financial or otherwise), results of operations or performance of the Loan Parties taken as a whole, (b) the validity or enforceability of this Agreement or any other Loan Document, (c) the ability of any Loan Party to perfonn its obligations under any Loan Document to which it is a party, (d) the rights or remedies of the Lender or any other Secured Party hereunder or thereunder, or (e) the priority of any Liens granted to Lender in or to any Collateral (other than as a result of voluntary and intentional discharge of the Lien by Lender) ; provided, that any event, change or occurrence resulting from (i) general economic or industry - wide conditions that do not materially and disproportionately affect the Loan Parties relative to other participants in the industry or industry sectors in which the Loan Parties operate, (ii) national or international political conditions, including the engagement by the United States in hostilities, whether or not pursuant to the declaration of a national emergency or war, or the occurrence of any military or terrorist attack upon the United States, or any of its territories, possessions, or diplomatic or consular offices or upon any military installation, equipment of personnel of the United States, (iii) financial, banking, or securities markets (including any disruption thereof and any decline in the price of any security or any market index) that do not materially and disproportionately affect the Loan Parties relative to other participants in the industry or industry sectors in which the Loan Parties operate, (iv) changes in GAAP or other applicable accounting standards, (v)
8 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440O5F9C7DC1 Changes in Laws (other than State Cannabis Laws) that do not materially and disproportionately affect the Loan Parties relative to other participants in the industry or industry sectors in which the Loan Parties operate, or (vi) the taking of any action expressly authorized by the Loan Documents, shall not constitute a "Material Adverse Effect" . "Material Contracts" shall mean (a) any agreement evidencing, securing or pertaining to any Indebtedness, or any guaranty thereof, in a principal amount exceeding $ 500 , 000 , (b) any agreement evidencing, securing or pertaining to any Indebtedness, or any guaranty thereof, involving a Lien on any Material Collateral, (c) any agreement providing for or involving payments in excess of $ 500 , 000 during the term of such agreement, and (d) any other agreement the termination of nonperformance of which could reasonably be expected to have a Material Adverse Effect or otherwise materially and adversely affect a Florida Loan Party . "Material Collateraf' shall mean, collectively, (a) the Mortgaged Properties and any material improvements, fixtures and equipment located thereon, (b) the Florida Cannabis License, (c) all Capital Stock issued by RWB Florida OpCo, (d) accounts receivable and Collections of the Florida Loan Parties, (e) any other asset constituting Collateral which has a fair market value of $ 50 , 000 or more, and (f) any proceeds arising under any of the foregoing or with respect thereto . "Material Liability" shall mean, other than the Obligations, any Indebtedness or payment obligation of a Loan Party of any kind (including for Taxes) which, if not paid when due, is, or could reasonably be expected to become or result in a Lien upon any Material Collateral . "Maturity Date" shall mean February I 2, 2024. "Mortgage" shall mean each mortgage, deed of trust, or deed to secure debt, trust deed or other security document granted by any applicable Loan Party to Lender for the benefit of the Secured Parties, in form and substance reasonably acceptable to Lender, including the Apopka Mortgage, the Detroit Mortgage and the Sanderson Mortgage . "Mo rtgaged Property" shall mean each of the Apopka Property, the Sanderson Property and the Detroit Property . "Net Cash Proceeds" shall mean, as applicable, (a) with respect to any Disposition by a Person, cash and cash equivalent proceeds received by or for such Person's account, net of (i) fees, costs and expenses paid to third parties (other than Affiliates) and relating to such Disposition, (ii) the amount of any Indebtedness secured by any Permitted Lien on any asset (other than Indebtedness assumed by the purchaser of such asset) that is required to be, and is, repaid in connection with such Disposition, (iii) net income taxes to be paid in connection with such Disposition and (iv) sale, use or other transactional taxes paid or payable by such Person as a result of such Disposition, (b) with respect to any condemnation or taking of such assets by eminent domain proceedings of a Person, cash and cash equivalent proceeds received by or for such Person's account (whether as a result of payments made under any applicable insurance policy therefor or in connection with condemnation proceedings or otherwise), net of (i) fees, costs and expenses paid to third parties (other than Affiliates) in connection with the collection of such proceeds, awards or other payments and (ii) taxes paid or payable by such Person as a result of such casualty, condemnation or taking, and (c) with respect to any issuance of any Indebtedness by a Person, cash and cash equivalent proceeds received by or for such Person's account, net of (i) legal, underwriting, and other fees, costs and expenses paid to third parties (other than Affiliates) and incurred as a result thereof, (ii) transfer taxes paid by such Person or its Subsidiary in connection therewith and (iii) net income taxes to be paid in connection therewith .
9 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 "Note" shall mean the promissory note dated as of the Closing Date, issued by Borrower to Lender in respect of the Loans made under this Agreement, as it may be amended, restated, amended and restated, supplemented or otherwise modified from time to time . "Obligations" shall mean (a) with respect to Borrower, all obligations (monetary or otherwise, whether absolute or contingent, matured or unmatured) of Borrower arising under or in connection with any Loan Document, including any and all original issue discounts, fees, costs, expenses (including fees, costs and expenses incurred during the pendency of any proceeding under any Insolvency Legislation, whether or not allowed or allowable in such proceeding) and premiums payable under any Loan Document (including the Make - Whole Amount), the principal of and interest (including interest accruing during the pendency of any proceeding any proceeding under any Insolvency Legislation, whether or not allowed or allowable in such proceeding) on the Loans, all indemnification obligations and all obligations to pay or reimburse Lender or any other any Secured Party for paying any costs or expenses under any Loan Document, and all other fees to be paid to Lender, or (b) with respect to each Loan Party other than Borrower, all obligations (monetary or otherwise, whether absolute or contingent, matured or unmatured) of such Loan Party arising under or in connection with any Loan Document, all indemnification obligations and all obligations to pay or reimburse Lender or any other Secured Party for paying any costs or expenses under any Loan Document . Unless the context requires otherwise, any reference in this Agreement or any olher Loan Document lo "Obligations" without specifying whether such reference is to the Obligations of Borrower or the Obligations of the other Loan Parties shall be deemed to refer to the Obligations of Borrower and the other Loan Parties, collectively . "OFAC' shall mean the Office of Foreign Assets Control of the United States Department of the Treasury . "OrKanization Documents" shall mean, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws ; (b) with respect to any limited liability company, the certificate of incorporation, constitution or articles of formation or organization and operating agreement (if relevant) ; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and, if applicable, any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity . "Other Taxes" shall mean all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document . "Patriot Act" shall mean, collectively, the US A Patriot Act (Title lII of Pub . L . I 07 - 56 (signed into law October 26 , 200 I)), and the Proceeds of Crime (money laundering) and Terrorist Financing Act (Canada) . "Payment Date" shall mean the first day of each calendar month. "Permits" shall mean, with respect to any Person, any permit, approval, authorization, license, registration, certificate, concession, grant, franchise, variance or permission from, and any other Contractual Obligations with, any Governmental Authority, in each case whether or not having the force of law and applicable to or binding upon such Person or any of its property or operations or to which such Person or any of its property or operations is subject .
10 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440O5F9C7DC1 "Permitted Acquisition" shall mean any Acquisition approved by Lender in advance, in writing, in Lender's sole discretion . "Permitted Liens" shall mean (a) Liens in favor of Lender, (b) Liens arising by operation of law in favor of carriers, warehousemen, mechanics, materialmen and landlords incurred in the ordinary course of business (i) for amounts not yet overdue or (ii) for amounts overdue but (x) not for more than 60 days, (y) not in excess of $ 200 , 000 in the aggregate, and (z) not if the subsistence of such Lien or the failure to make the required payment results in a Material Adverse Effect, (c) Judgment Liens in existence for less than 60 days after the entry thereof and which do not exceed $ 500 , 000 or otherwise result in an Event of Default, (d) easements, rights - of - way, zoning restrictions, defects or irregularities in title and other similar encumbrances not, in each case, interfering in any material respect with the value or use of the real propetty to which such Lien is attached, (e) Liens for Taxes, assessments or other governmental charges or levies (excluding any Lien imposed pursuant to the provisions of ERISA) not yet due and payable, and (f) Liens arising in the ordinary course of business by virtue of any contractual, statutory or common law provision relating to banker's Liens, rights of set - off or similar rights and remedies covering Controlled Accounts; provided, however, any Lien on the Florida Cannabis License or any Collections or accounts receivable of the Florida Loan Parties shall never be deemed a Permitted Lien without Lender's prior written consent. "Permitted Temporary Liens" shall mean : (a) Liens on any Mortgaged Real Property arising by operation of law in favor of carriers, warehousemen, mechanics, material men and landlords incurred in the ordinary course of business for amounts overdue, and (b) Liens for overdue Taxes, assessments or other governmental charges or levies (excluding any Lien imposed pursuant to the provisions of ERISA), which, in the case of clauses (a) and (b), collectively, shall not exceed $ 1 , 500 , 000 in the aggregate at any time . Notwithstanding the foregoing, no Lien shall be deemed a Permitted Temporary Lien from and after the earlier of (i) December 31 , 2022 , (ii) the date (if any) on which any Person (including Lender) takes any action (judicially or nonjudicially, including as a secured party under the Uniform Commercial Code of any jurisdiction) to foreclose on, take possession of, sell, enforce, or otherwise realize upon any Collateral secured by such Lien, and (iii) five ( 5 ) Business Days following the date (if any) that the Loan Parties sell the Detroit Property . "Person" shall mean any individual, partnership, joint venture, firm, corporation, limited liability company, association, trust or other enterprise or any Governmental Authority . "Pledge Agreement" shall mean the pledge agreement dated as of the Closing Date, executed by the Florida Loan Parties and such other Persons as Lender may require, as it may be amended, restated, amended and restated, supplemented or otherwise modified from time to time . "Pledged Entity" shall mean an issuer of any Pledged Equity. ''Pledged Equity" shall mean any Capital Stock that has been pledged to Lender as Collateral. ''Prime Rate" shall mean, as of the relevant date of determination, the rate of interest last quoted by The Wall Street Journal as the "Prime Rate" in the U . S . or, if The Wall Street Journal ceases to quote such rate, the highest per annum interest rate published by the Federal Reserve Board in Federal Reserve Statistical Release H . 15 (Selected Interest Rates) as the "bank prime loan" rate or, if such rate is no longer quoted therein, any similar rate quoted therein (as determined by Lender) or any similar release by the Federal Reserve Board (as determined by Lender) . "Real Proper(v" shall mean, a parcel of real property, together with all improvements and appurtenant fixtures, equipment, personal property, easements and other property and rights incidental to the ownership, lease or operation thereof . When used with respect to any Person, the term "Real Property"
11 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 shall include all right, title and interest of such Person (including any leasehold estate) in and to such Real Property. "Related Parties" shall mean, with respect to any specified Person, such Person's Affiliates and the directors, officers, employees, lender, trustees, advisors of such Person and any Person that possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of such Person, whether through the ability to exercise voting power , by contract or otherwise . " Release" shall mean any spilling, leaking, seepage, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, depositing, disposing, emanating or migrating of Hazardous Materials in the environment . "Restricted Cannabis Activities" shall mean, in connection with the cultivation, distribution, sale and possession of cannabis and related products: (a) any activity that is not permitted under applicable State Cannabis Laws; (b) notwithstanding compliance with applicable State Cannabis Laws, any activity which a Governmental Authority asserts is unlawful under Federal Cannabis Law and the applicable Person is enjoined from conducting such activity; (c) distribution and sale of cannabis and related products to minors that is not approved under a State Cannabis Law; (d) payments to criminal enterprises, gangs, cartels and Persons subject to Sanctions; (e) non - compliance with anti - terrorism laws and other Applicable Law relating to money - laundering; (f) diversion of cannabis and related products from states where it is legal under State Cannabis Law to other states; (g) use of activities permitted under State Cannabis Law as a cover or pretext for the trafficking of other controlled substances or illegal drugs or other illegal activity; (h) the commission, or making threats, of violence and the use of firearms in violation of Applicable Law; (i) [intentionally omitted]; U) growing cannabis and related products on public lands; and (k) directly or indirectly, aiding, abetting or otherwise participating in a common enterprise with any Person or Persons in such activities. "Restricted Debt" shall mean (a) the Indebtedness ofany Florida Loan Party existing on the Closing Date, and (b) any other Indebtedness the repayment of which is expressly subordinated and made junior to the payment in full of the Obligations and contains terms and conditions (including terms relating to interest, fees, repayment and subordination) satisfactory to Lender . "Restricted Payment" shall mean, with respect to any Florida Loan Party, (a) the declaration or payment of any dividend or distribution to any Person other than another Florida Loan Party, (b) any payment ofa management fee, consulting fee, advisor fee (or other fee ofa similar nature) to Parent or any Subsidiary or Affiliate of Parent, or (c) the payment or prepayment of principal of, or premium or interest on, any Indebtedness subordinate to the Obligations . "Sanction(s)" shall mean all economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U . S . government, including those administered by OFAC or the U . S . Department of State, or (b) the United Nations Security Council, the European Union, any European Union member state or Her Majesty's Treasury of the United Kingdom or other relevant sanctions authority . ''Sanderson Proper(v" means Lhe Real Properly located in Sanderson, Baker County, Florida, identified by the assessor's office as parcel number 123 S 20000000000026 , and having a common address of 13907 Arnold Rhoden Rd . , Sanderson, FL 32087 . "SEC' shall mean the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions .
12 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440O5F9C7DC1 "Secured Parties" shall mean, collectively, (a) Lender, (b) the beneficiaries of each indemnification obligation undertaken by any Loan Party under the Loan Documents, (c) any successors, endorsees, transferees and assigns of each of the foregoing to the extent any such transfer or assign is permitted by the terms of this Agreement and (d) any other holder of any Obligation or Secured Obligation (as defined in any applicable Security Document) . "Security Agreement" shall mean the security agreement dated as of the Closing Date, executed by the Florida Loan Parties and such other Persons as Lender may require on the Closing Date, in favor of Lender and the other Secured Parties, as it may be amended, restated, amended and restated, supplemented or otherwise modified from time to time . "Security Documents" shall mean, collectively, as applicable, each Deposit Account Control Agreement, each Mortgage, the Pledge Agreement, the Security Agreement, and each other instrument or document executed and delivered pursuant to this Agreement or any of the Security Documents to guarantee or secure any of the Obligations . "Solvent" shall mean, at any date, that (i) the sum of such Person's debt (including Contingent Liabilities) does not exceed the present fair saleable value of such Person's present assets (which, for this purpose, shall include rights of contribution in respect of obligations for which such Person has provided a guarantee), (ii) such Person's capital is not unreasonably small in relation to its business as contemplated on such date, (iii) such Person has not incurred and does not intend to incur debts including current obligations beyond its ability to generally pay such debts as they become due (whether at maturity or otherwise), and (iv) such Person is "solvent" or is not "insolvent", as applicable, within the meaning given that tenn and similar terms under Applicable Laws relating to fraudulent and other avoidable transfers and conveyances . "State Cannabis Law" shall mean (a) any law enacted by any state of the United States which legalizes cannabis and related products in some form and which implements strong and effective regulatory and enforcement systems to control the cultivation, distribution, sale and possession of cannabis and related products, and (b) any regulation, ordinance, rule, order, policy, decree, judgment, consent decree, writ, injunction, settlement agreement or governmental requirement enacted, promulgated or imposed or entered into or agreed by any Governmental Authority of such state under, pursuant to or in connection with such law . "Subsidiary" of any Person shall mean and include any entity more than 50 . 00 % of whose Capital Stock is at the time owned by such Peron, directly or indirectly through Subsidiaries . "Taxes" shall mean all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto . "Termination Date" shall mean the date on which the Loans and the other Obligations (other than Unasserted Contingent Obligations) shall have been paid in full in cash in accordance with the terms of this Agreement . "Transactions" shall mean the funding of the Loans pursuant hereto and the use of the proceeds thereof and all other transactions contemplated by or described in the Loan Documents . "Treasury Regulations" shall mean the United States Treasury regulations promulgated under the Code.
13 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 "U.S." and "United States" shall mean the United States of America. "U.S. Bankruptcy Code" shall mean the United States Bankruptcy Code (11 U.S.C. Section 101 et seq.). "U.S. Loan Party" shall mean any Loan Party other than Parent. "U . S . Person" shall mean any person that is a "United States Person" as defined in Section 7701 (a)( 30 ) ofthe Code . "UCC' shall mean the Uniform Commercial Code as from time to time in effect in the state of New York ; provided that to the extent that the UCC is used to define any tenn herein or in any Loan Document and such tenn is defined differently in different Articles of the UCC, the definition of such term contained in Article 9 shall govern ; provided, further , that in the event that, by reason of mandatory provisions oflaw, any or all of the attachment, perfection or priority of, or remedies with respect to, Lender's Lien on any Collateral is governed by the Uniform Commercial Code as enacted and in effect in a jurisdiction other than the State of New York, the term "UCC" means the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority or remedies and for purposes of definitions related to such provisions . "Unasserted Contingent Obligations" shall mean, at any time, Obligations for taxes, costs, indemnifications, reimbursements, damages and other liabilities in respect of which no assertion ofliability (whether oral or written) and no claim or demand for payment or indemnification (whether oral or written) has been made or threatened . Section 1 . 02 . Other Interpretive Provisions . With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document : (a) The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms . Any pronoun used shall be deemed to cover all genders . (b) The words "herein", "hereto", "hereof' and "hereunder" and words of similar import when used in any Loan Document shall refer to such Loan Document as a whole and not to any particular provision thereof . (c) Preamble, Article, Section, Exhibit and Schedule references are to the Loan Document in which such reference appears unless otherwise specifically provided . (d) The term "including" is by way of example and not limitation, and the term "or" has, except where otherwise indicated, the inclusive meaning represented by the phrase "and/or . " (e) The term "documents" includes any and all instruments, documents, agreements, certificates, notices, reports, financial statements and other writings, however evidenced, whether in physical or electronic form . (f) In the computation of periods of time from a specified date to a later specified date, the word "from" means "from and including" ; the words "to" and "until" each mean "to but excluding" ; and the word "through" means "to and including" . (g) Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan
14 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 Document. (h) All references in any Loan Document to the consent or discretion of, or approval by Lender, shall be deemed to mean the consent of or approval by Lender in its sole and absolute discretion, except as otherwise expressly provided in the applicable Loan Document . (i) Whenever in any provision of this Agreement or any other Loan Document Lender is authorized to take or decline to take any action (including making any determination), such provision shall be understood to mean that Lender may take or refrain to take such action in its sole and absolute discretion U) A Default or an Event of Default shall be deemed to exist at all times during the period commencing on the date that such Default or Event of Default occurs to the date on which such Default or Event of Default is waived in writing pursuant to this Agreement or, with respect to any Default, is cured within any period of cure expressly provided in this Agreement . (k) Any reference herein to a merger, transfer, consolidation, amalgamation, assignment, sale, disposition or transfer, or similar term, shall be deemed to apply to a division of or by a limited liability company, or an allocation of assets to a series of a limited liability company (or the unwinding of such a division or allocation) . (I) Whenever any provision in any Loan Document refers to the knowledge (or an analogous phrase) of any Loan Party or officer thereof, such words are intended to signify that the chief executive officer, the chief financial officer, the chief operating officer, the chief administrative officer, general counsel or any manager of Parent has actual knowledge or awareness of a particular fact or circumstance or that such person, if they had exercised reasonable diligence, would have known or been aware of such fact or circumstance . (m) No rule of construction shall apply to this Agreement or any other Loan Document which requires or permits a court to construe any ambiguity in this Agreement or any Loan Document against any Person by virtue of the authorship of this Agreement or any Loan Document as a whole or of any provision herein or therein . Section 1 . 03 . Accounting Terms and Principles . All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP, applied in a consistent manner . Section 1 . 04 . Rounding . Any financial ratios required to be maintained or complied with by the Loan Parties pursuant to this Agreement (or required to be satisfied in order for a specific action to be permitted under this Agreement) shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding - up if there is no nearest number) . Section 1 . 05 . References ro Agreements . Laws . Etc . Unless otherwise expressly provided herein, (a) references to Organization Documents, agreements (including this Agreement and each of the other Loan Documents) and other Contractual Obligations shall be deemed to include all subsequent amendments , restatements, amendment and restatements, extensions , supplements, renewals and other modifications thereto, but only to the extent that such amendments, restatements, amendment and restatements, extensions , supplements, renewals and other modifications are permitted by the terms hereof
15 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 and thereof ; and (b) references to any Applicable Law shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing, implementing or interpreting such Applicable Law and any successor or replacement statutes and regulations . Section 1 . 06 . Times of Day . Unless otherwise specified, all references herein to times of day shall be references to the time in New York, New York . Section 1 . 07 . Ti mini? of Pavment of Performance . When the payment of any obligation or the performance of any covenant, duty or obligation is stated to be due or performance required on a day which is not a Business Day, the date of such payment or performance shall (except as otherwise required by Lender) extend to the immediately succeeding Business Day and, with respect to payments of principal, interest shall continue to accrue during such extension at the applicable rate in effect immediately prior to such extension . All payments required hereunder or in any other Loan Document shall be paid in Dollars in immediately available funds unless otherwise expressly provided herein . Section 1 . 08 . Corporate Terminolo!N . Any reference to officers, shareholders, stock, shares, directors, boards of directors, corporate authority, articles of incorporation, bylaws or any other such references to matters relating to a corporation made herein or in any other Loan Document with respect to a Person that is not a corporation shall mean and be references to the comparable terms used with respect to such Person . Section 1 . 09 . Cannabis Laws . Lender and the Loan Parties acknowledge that although certain State Cannabis Laws have legalized the cultivation, distribution, sale and possession of cannabis and related products, (a) the nature and scope of Federal Cannabis Laws may result in circumstances where activities permitted under State Cannabis Laws may contravene Federal Cannabis Laws and (b) engagement in Restricted Cannabis Activities may contravene Federal Cannabis Laws . Accordingly, for the purpose hereof, each representation, covenant and other provision hereof relating to compliance with Applicable Law will be subject to the following : (i) engagement in any activity that is permitted by State Cannabis Laws but contravenes Federal Cannabis Laws, and in respect of which the applicable Government Authorities have agreed, or are bound by Applicable Law, to forego or have otherwise suspended prosecution and enforcement of such Federal Cannabis Laws will not, in and of itself, be deemed to be non compliance with Applicable Law ; (ii) engagement in any Restricted Cannabis Activity will be deemed to be non - compliance with Applicable Law ; and (iii) if any Change in Cannabis Law results in the business activities of any Loan Party becoming Restricted Cannabis Activities, such Change in Cannabis Law will be deemed to have had a Material Adverse Effect . Section 1 . 10 . Schedules . Any Schedules or Exhibits to this Agreement are incorporated herein by reference and form a material part of this Agreement . ARTICLE II. AMOUNT AND TERMS OF LOANS Section 2 . 0 I . The Loans . Subject to and upon the terms and conditions herein set forth, Lender agrees to make one or more Loans to Borrower, which Loans, when aggregated with each other, shall be in an amount not to exceed $ 19 , 500 , 000 (the "Maximum Loan Amount"), as follows : (a) On the Closing Date, a Loan (the "Initial Loan") in the amount of $18,300,000 (the "Initial Loan Amount"), inclusive of the Origination Discount. (b) After the Closing Date, one or more PIK Loans in accordance with ection 2 . 03(d) in the aggregate amount of up to $1,200,000.
16 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 The Loans may be repaid or prepaid in accordance with the provisions hereof, but once repaid or prepaid may not be reborrowed. Section 2.02. Disbursement of Funds; Orieinal Issue Discount. (a) If all the conditions set forth in Section 5 . 0 I are satisfied of the Closing Date, Lender will disburse the proceeds of the Initial Loan (such proce . eds being the Initial Loan Amount less the Origination Discount) as follows by no later than 4 : 00 p . m . on the Closing Date : ' (i) Lender shall apply the amount of $ 17 , 580 , 000 as a credit against the outstanding balance of the Existing VRT Debt (the "Existing VRT Debt Credi(') ; and (ii) Lender shall pay the Administrator the amount of the $ 180 , 000 in satisfaction of the Admin Fee in accordance with Section 2 . 06 (a) . (b) Borrower and Lender agree that the Loan shall be funded with a non - refundable original issue discount of $ 540 , 000 (approximately 2 . 95 I % of the Initial Loan Amount) (the "Origination Discount") . The Loan Parties and Lender agree (i) that the Note is debt for federal income Tax purposes, issued with original issue discount (as such term is used in Section l 273 (a) of the Code) intended to compensate Lender for the use or forbearance of money, and (ii) not to file any Tax Return, report or declaration inconsistent with the foregoing , unless otherwise required by Applicable Law . (c) For avoidance of doubt, the Origination Discount and all amounts described in Section 2 . 02 (a) shall constitute principal for all purposes under this Agreement, which Borrower shall be obligated to repay in full, plus interest accrued thereon in accordance with the terms hereof . Section 2.03. Pa men! of Loan : E idence of Debt: PIK Loan . (a) Borrower agrees to pay to Lender: (i) monthly payments of accrued interest in arrears on the outstanding principal balance of the Loans, commencing on the first Payment Date following the Closing Date and continuing on each Payment Date occurring thereafter ; and (ii) the remaining outstanding principal and interest due on the Loans on the Maturity Date or upon such earlier date on which the Obligations are accelerated pursuant to the terms of this Agreement . (b) In addition to the foregoing, Borrower hereby irrevocably promises to pay all Obligations, including the outstanding aggregate principal amount of the Loans and all interest and fees with respect to the foregoing, as the same become due and payable hereunder and, in any event, on the Maturity Date . (c) On the Closing Date, Borrower will execute and deliver to Lender a Note to evidence the Loans, payable to Lender or its registered assigns, in a maximum principal amount of the Maximum Loan Amount . Lender shall maintain in accordance with its usual practice an account or accounts evidencing the Indebtedness of Borrower to Lender resulting from each Loan made by Lender from time to time, including the amounts of principal and interest payable and paid to Lender from time to time under this Agreement . (d) Notwithstanding Section 2.03(a)(i), if the Base Interest Rate in effect during a
DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 17 calendar month exceeds 12 . 90 % per annum (the "Minimum Rate"), then, subject to the final proviso of this paragraph, the amount of accrued interest payable in accordance with Section 2 . 0 J(a)(i) with respect to such month (the "Full Interest Amount") may be paid by Borrower on the applicable Payment Date by either : (i) making a cash payment of the Full Interest Amount, or (ii) (x) making a cash payment equal to the interest that accrued on the outstanding principal balance of the Loans during such month at the Minimum Rate (the "Minimum Required Amount"), and (y) borrowing from Lender the difference · between the Full Interest Amount and the Minimum Required Amount (the "PIK Amount") . If Borrower elects to make an interest payment in accordance with the foregoing clause (ii), it shall provide Lender at least two ( 2 ) Business Days' prior written notice of such election (a "PIK Notice") and timely pay the Minimum Required Amount when due . If Borrower satisfies the conditions described in the preceding sentence, Lender shall be deemed to have advanced the PIK Amount as a Loan to Borrower (a "PIK Loan") as of the first calendar day of the month in which the applicable Payment Date falls (the "PIK Date") ; provided, however, Borrower shall be prohibited from making any interest payment pursuant to clause (ii) of this paragraph (and shall instead be required to pay the Full Interest Amount in cash when due) while any Default or Event of Default exists, or if the applicable PIK Amount, when aggregated with the other Loans theretofore advanced hereunder, would exceed the Maximum Loan Amount . 1 Section 2.04. Interest . (a) The unpaid principal amount of the Loans shall bear interest from the Closing Date and each relevant PIK Date, as applicable, at the Base Interest Rate (as adjusted from time to time pursuant to ection 2 . 05 ) . (b) Notwithstanding the foregoing, from and after the occurrence and during the continuance of any Event of Default, upon notice by Lender to Borrower or Parent, Borrower shall pay interest on the principal amount of the Loans and all other unpaid Obligations, to the extent permitted by Applicable Law, at the Default Rate, which Default Rate shall accrue from the date of such Event of Default (regardless of the date of notice of the imposition of the Default Rate) until waived in writing by Lender and shall be payable on demand . (c) Interest shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid, provided that any Loan that is repaid on the same day on which it is made shall bear interest for one day . (d) All interest and fees hereunder shall be computed on the basis of the actual number of days occurring during the period for which such interest or fee is payable over a year comprised of 360 days . Each determination by Lender of the calculation of interest and fees hereunder shall be presumptive evidence of the correctness of such interest and fees, absent manifest error . (e) Notwithstanding any other provision of this Agreement or the other Loan Documents, in no event whatsoever shall interest and other charges charged hereunder exceed the highest rate permissible under Applicable Law . In the event interest and other charges as computed hereunder would otherwise exceed the highest rate permitted under Applicable Law : (i) the interest rates hereunder will be reduced to the maximum rate permitted under Applicable Law ; (ii) such excess amount shall be first 1 For illustrative purposes only : if the Base Interest Rate in effect during the entire month of March 2023 is 14 . 00 % , and if the outstanding principal balance of the Loans during the entire month of March 2023 is $ 18 , 000 , 000 , Borrower may either (I) pay the Full Interest Amount (for March 2023 ) of $ 217 , 000 in cash on Monday, April 3 , 2023 or ( 2 ) deliver a PIK Notice to Lender on or before March 30 , 2023 , pay the Minimum Required Amount (for March 2023 ) of $ 199 , 950 in cash on April 3 , 2023 , and borrow the difference of $ 17 , 050 as a PIK Loan (which shall be deemed advanced to Borrower on April 1 , 2023 ) .
18 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 applied to any unpaid principal balance owed by Borrower ; and (iii) if the then remaining excess amount is greater than the previously unpaid principal balance, Lender shall promptly refund such excess amount to Borrower and the provisions hereof shall be deemed amended to provide for such pennissible rate . Section 2 . 05 . Adjustments to Base Interest Rate . On the Closing Date, the "Base Interest Rate" shall initially be 12 . 90 % per annum . On October I, 2022 , and on the first calendar day of each month thereafter (each such date, an "Adjustment Date"), the Base Interest Rate shall be adjusted to the greater of : (a) 12 . 90 % per annum, and (b) a per annum rate equal to 7 . 40 % plus the Prime Rate in effect as of the last Business Day immediately preceding the applicable Adjustment Date . Section 2 . 06 . Additional Fees . Borrower shall be obligated to pay the following amounts to Lender, in addition to all payments of principal, interest and other sums due to Lender under this Agreement : (a) Administrative Fee . On the Closing Date, Borrower shall pay to Viridescent Management, LLC, a Delaware limited liability company (the "Administrator"), an administrative fee (the "Admin Fee") of $ 180 , 000 (approximately 0 . 984 % of the Initial Loan Amount) . The Admin Fee is and shall be deemed compensation for services, and is not, and shall not be deemed to be, interest or any other consideration for the use or forbearance of money . (b) Ex it Fee . On the earliest to occur of (i) the Maturity Date, (ii) any repayment of the Loans in full prior to the Maturity Date, and (iii) any acceleration of the Loans or other Obligations pursuant to the terms of this Agreement (including pursuant to ection I 0 . 02 ) , Borrower shall pay Lender an exit fee (the "Exit Fee" ) of $ 315 , 000 (approximately l . 721 % of the Initial Loan Amount) . (c) Late Fee . Borrower shall pay Lender a late fee (the "Late Fee") equal to 5 . 00 % of the amount of any payment required hereunder (including principal, interest or Fees) which is not paid in full within five ( 5 ) days after the same is due . Section 2 . 07 . Waiver of Subroeation . etc . Borrower expressly waives any and all rights of subrogation, reimbursement, indemnity, exoneration, contribution of any other claim which Borrower may now or hereafter have against any other Person directly or contingently liable for the Obligations hereunder, or against or with respect to any such Person's property (including any property which is Collateral for the Obligations), arising from the existence or performance of this Agreement, until termination of this Agreement and repayment and performance in full of the Obligations . Section 2 . 08 . Loan Partv Representative . Each Loan Party, by its execution of this Agreement, irrevocably appoints the Loan Party Representative to act on its behalf as its agent in relation to the Loan Documents and i 1 Tevocably authorizes : (a) the Loan Pa 11 y Representative, on such Loan Party's behalf, to supply all information concerning itself contemplated by this Agreement to Lender and to give and receive all notices, instructions and other communications, to sign all certificates, to make such agreements and to effect the relevant amendments, supplements, variations and waivers capable of being given, made or effected by any Loan Party, notwithstanding that they may affect such Loan Party, without further reference to or the consent of such Loan Party ; and (b) Lender to give any notice, demand or other communication required to be given to such Loan Party pursuant to the Loan Documents to the Loan Party Representative . Every act, omission, agreement, undertaking, settlement, waiver, amendment, supplement, variation, notice, instruction or other communication given or made by Loan Party Representative or given to Loan Party Representative under any Loan Document on behalf of another Loan Party (whether or not known to any other Loan Party and whether occurring before or after such other Loan Party became a Loan Party under any Loan Document) shall be binding for all purposes on such Loan Party as if such Loan Party had expressly agreed, executed, made, given or concurred with it or received the relevant notice, demand or
19 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440O5F9C7DC1 other communication. In the event of any conflict between any notices or other communications of Loan Party Representative and any other Loan Party, those of Loan Party Representative shall prevail. ARTICLE III. [RESERVED] ARTICLE IV. PAYMENTS Section 4.01. Voluntarv Prepayments. (a) Borrower shall have the right to prepay the outstanding remaining balance of the Loans in whole or in part on the following terms and conditions : (i) Borrower shall give Lender written notice of (A) its intent to make such prepayment and (B) the amount of such prepayment, no later than 5 : 00 p . m . at least five ( 5 ) Business Days prior to the date of such prepayment ; (ii) each prepayment under this Section 4 . 01 shall be in an amount equal to no less than $ 1 , 000 , 000 ; and (iii) such prepayment may only be made on the last Business Day of a calendar month, unless Lender agrees in writing, in advance, to accept a prepayment on a different day . (b) Any voluntary prepayment of the Loans hereunder that is made prior to the Maturity Date, or any payment upon acceleration in accordance with ection 10 . 02 , shall be accompanied by all accrued interest on the amount prepaid, together with any applicable Make - Whole Amount . (c) With respect to each voluntary prepayment of the Loan under this Section 4 . 01 , the amounts prepaid shall be applied, so long as no Application Event shall have occurred and be continuing, first to pay any fees and expenses of Lender due and owing under the Loan Documents until paid in full, second to any accrued and unpaid interest on the Loans until paid in full and thereafter to the outstanding principal on the Loans until the Loans are paid in full . Section 4.02. Mandatory Prepayments. (a) Types of Mandatory Prepavments. (i) Within five (5) Business Days of the receipt by any Loan Party or any of its Subsidiaries of (1) any Net Cash Proceeds from the incunence of any Indebtedness by any Florida Loan Party or any of its Subsidiaries, or which is secured by a Lien on any of their respective assets, (2) any Net Cash Proceeds from any Disposition of Material Collateral (other than a Disposition permitted under ection 9.04) , (3) any Net Cash Proceeds from any Casualty Event relating to any Collateral, or (4) any proceeds from any Extraordinary Receipts received by or paid to or for the account of a Florida Loan Party, Borrower shall prepay the Loan in an amount equal to 100.00% of such Net Cash Proceeds or other proceeds, to be applied as set forth in Section 4.02(c): pro ided, howe er , that no prepayment shall be required under this ection 4.02(a)(i) to the extent the aggregate amount of such Net Cash Proceeds or other proceeds does not exceed $250,000 in any calendar year. Nothing in this Section 4.02(a)(i) shall be construed to permit or waive any Default or Event of Default arising directly or indirectly from any Indebtedness, Disposition, Casualty Event or any event or circumstance giving rise to any Extraordinary Receipts, which, in any case, is not permitted under the terms of this Agreement. Any mandatory prepayment of the Loans made pursuant to this Section 4.02(a)(i) shall be accompanied by all accrued interest on the amount prepaid, together with the applicable Make - Whole Amount .
20 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440O5F9C7DC1 (ii) Immediately upon any acceleration of the Loans pursuant to Section l 0 . 02 , Borrower shall repay the Loans in full, unless only a portion of all the Loans is so accelerated (in which case the portion so accelerated shall be repaid) . Any mandatory prepayment of the Loans made pursuant to this Section 4 . 02 (a)(ii) shall be accompanied by all accrued interest on the amount prepaid, together with the applicable Make - Whole Amount . (b) Option to Decline Prepavment . Notwithstanding anything to the contrary herein, any mandatory prepayment pursuant to ection 4 . 02 (a) may be declined in whole or in part by Lender without prejudice to Lender's rights hereunder to accept or decline any future payments in respect of any mandatory prepayment . Lender shall have until the Business Day immediately preceding the Business Day on which such prepayment is due in order to decline such prepayment (and any election by Lender delivered prior to such Business Day can be rescinded by Lender at its discretion until such Business Day) . (c) Application of Payments . With respect to each prepayment of the Loans required by Section 4 . 02 (a), the amounts prepaid shall be applied, so long as no Application Event shall have occurred and be continuing , first to pay any fees and expenses of Lender under the Loan Documents (due and owing at the time of prepayment) until paid in full, second to any accrued and unpaid interest on the Loans until paid in full, and thereafter to the outstanding principal on the Loans until the Loans are paid in full . (d) Application of Collateral Proceed . Notwithstanding anything to the contrary in ection 4 . 0 I or this ection 4 . 02 , all proceeds of Collateral received by Lender or any other Person pursuant to the exercise of remedies against the Collateral, and all payments received upon and after the acceleration of the maturity of any of the Obligations following the occurrence ofan Event of Default (an "Application Event") shall be applied as follows : (i) first , to any costs, expense reimbursements, fees or premiums of Lender and indemnities then due to Lender under the Loan Documents until paid in full, (ii) second , to interest due in respect of the Loans until paid in full, (iii) third, to the outstanding principal balance of the Loans until paid in full (iv) fourth , to any other Obligations until paid in full, and (v) fifth , to Borrower or other Persons entitled thereto under Applicable Law . Section 4.03. Pa ment of Obligations: Method and Place of Payment. (a) Subject to ecti 0 n 4 . 03 (b), and except as otherwise specifically provided herein, all payments under any Loan Document shall be made by the applicable Loan Party or Loan Parties, without counterclaim, set - off, right of rescission, recoupment or deduction of any kind, to Lender by not later than 5 : 00 p . m . on the date when due, and shall be made in immediately available funds in Dollars by wire transfer to such account as Lender shall notify Parent in writing from time to time within a reasonable time prior to such payment . (b) For all purposes hereunder, any payments under this Agreement that are made later than 5 : 00 p . m . shall be deemed to have been made on the next succeeding Business Day .
21 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 Section 4.04. Taxes . (a) Any and all payments by or on account of any obligation of any Loan Party under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by Applicable Law and only then with the prior written consent of Lender (such consent not to be unreasonably withheld) . (b) The Loan Parties shall timely pay, and shall authorize Lender to pay in their name, to the relevant Governmental Authority in accordance with Applicable Law, or at the option of Lender timely reimburse it for the payment of, any Other Taxes . (c) The Loan Parties shall jointly and severally indemnify Lender, within ten ( 10 ) days after demand therefor, for the full amount of any Indemnified Taxes payable or paid by Lender or required to be withheld or deducted from a payment to Lender and any costs and expenses arising therefrom or with respect thereto, if and to the extent such Indemnified Taxes were c 01 Tectly and legally imposed or asse 1 ted by the relevant Governmental Authority . (d) As soon as practicable after any payment of Taxes by any Loan Party to a Governmental Authority pursuant to this ection 4 . 04 , such Loan Party shall deliver to Lender the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to Lender . (e) If Lender is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document, Lender shall deliver to Parent, at the time or times reasonably requested by Parent, such properly completed and executed documentation reasonably requested by Parent as will permit such payments to be made without withholding or at a reduced rate of withholding, including an executed IRS Form W - 9 . Notwithstanding any other provision of this ection 4 . 04 ( 0 . Lender shall not be required to deliver any form that Lender is not legally eligible to deliver . (f) If Lender detennines, in its discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 4 . 04 , it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section 4 . 04 with respect to the Taxes giving rise to such refund), net of all costs and expenses (including Taxes) of Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund), but only to the extent such payment by Lender would not place Lender in a less favorable net after - Tax position than it would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid . This ection 4 . 04 (t) shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person . (g) Each party's obligations under this ection 4 . 04 shall survive any assignment of rights by, or the replacement ot : Lender, and the repayment, satisfaction or discharge of all obligations under any Loan Document . ARTICLE V. CONDITIONS PRECEDENT TO LOAN Section 5.01. lo inQ. Date Loan . The obligation of Lender to make the Initial Loan on the Closing Date is subject to the fulfillment, to the satisfaction of Lender, of each of the following conditions
22 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 precedent on or before the Closing Date, unless waived by Lender in accordance with Section 12.0 I: (a) Loan Documents . Lender shall have received the following documents, duly executed by an Authorized Officer of each applicable Loan Party and each other relevant party, in form and substance acceptable to Lender : (i) this Agreement; (ii) the Note; (iii) the Security Agreement; (iv) the Pledge Agreement; (v) the Intercompany Subordination Agreement; (vi) a Mortgage with respect to each Mortgaged Property; and (vii) each other Loan Document which is not listed in Section 8.16 . (b) Payoff of E isting VRT Debt . Lender shall have received payment in cash from Borrower in an amount sufficient to pay the Existing YRT Debt and any other amounts owing under the 2021 Note in full (including all interest, fees and other charges accrued through the Closing Date), after giving effect to the Existing VRT Debt Credit . (c) R elease of Certain Real Prope 1 iv Liens . Lender shall have received evidence, in fonn and substance satisfactory to Lender, that the following Liens on the Mo 11 gaged Properties have been released and satisfied on or prior to the Closing Date : (i) the mortgage recorded at Book 57478 , Page 727 in the official records of Wayne County, Michigan (the "Pong Game Studio Mortgage"), and (ii) any other Lien relating to an Indebtedness or other payment obligation for an amount in excess of $ 100 , 000 . (d) atisfaction of Certain Obligation . The U . S . Loan Parties shall have paid off all liabilities, obligations and other amounts owing to the Internal Revenue Service, the Florida Department of Health, and with respect to all outstanding Taxes on the Mortgaged Properties ; and Lender shall have received copies of documentation evidencing the payment of all such sums . (e) Officer's ertificates . Lender shall have received a certificate for each Loan Party, dated the Closing Date, duly executed and delivered by an Authorized Officer of such Loan Party, as to resolutions authorizing the Loan Documents and the Transactions, the incumbency of each Loan Party's Authorized Offers authorized to act with respect to each Loan Document to be executed by such Person, and such other matters required by Lender . (f) Closing Certificate . Lender shall have received a closing certificate in form and substance acceptable to Lender, duly executed and delivered by an Authorized Officer of each Loan Party . (g) Financial tatement . Lender shall have received unaudited balance sheets of each Florida Loan Party as of August 15 , 2022 (the "Most Recent Financial Statements") . (h) Fees . Expenses and Interest . Lender shall have received, for its own account, all fees, costs and expenses due and payable to Lender, including pursuant to ection 12 . 05 (including the reasonable fees, disbursements and other charges of counsel) .
23 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 (i) Due Diligence. Lender shall have completed and be reasonably satisfied its business, legal, and collateral due diligence on each Loan Party. G) No Default, Representations and Warranties and No Injunctions. (i) No Default or Event of Default shall have occurred and be continuing, (ii) all representations and warranties of the Loan Parties set forth in this Agreement and the other Loan Documents are true and correct in all material respects (other than such representations and warranties that are already qualified by materiality, Material Adverse Effect or similar language, in which case such representations and warranties shall be true and correct in all respects) on the Closing Date, (iii) no injunction, writ, restraining order, or other order of any nature restricting or prohibiting, directly or indirectly, the Transactions shall have been issued and remain in force by any Governmental Authority against any Loan Party or Lender, and (iv) there shall be no order or injunction or pending litigation that could reasonably be expected to have a Material Adverse Effect on any Loan Party, taken as a whole, and no pending litigation seeking to prohibit, enjoin or prevent any of the Transactions . ARTICLE VI. GUARANTEE Section 6.01. Guarantee. (a) To induce Lender to make the Loans to or for the benefit of one or more Loan Parties, each Guarantor hereby, jointly and severally, absolutely, unconditionally and irrevocably, guarantees, as primary obligor and not merely as surety, the full and punctual payment when due, whether at stated maturity or earlier, by reason of acceleration, mandatory prepayment or otherwise in accordance with any Loan Document, of all the Obligations of Borrower and each other Loan Party, whether existing on the date hereof or hereafter incurred or created (collectively, the "Guarantor Obligations") . The Guarantor Obligations shall include interest accruing at the then applicable rate provided herein after the maturity thereof and interest accruing at the then applicable rate provided herein after the commencement of any Insolvency Event relating to Borrower or any other Loan Party, whether or not a claim for post - filing or post - petition interest is allowed or allowable in such proceeding, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with this Agreement or any other Loan Document, in each case whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including all fees and disbursements of counsel and other advisors retained by, or for the benefit of, Lender or to the other Secured Parties that are required to be paid by Borrower pursuant to the terms of any of the foregoing agreements) and all obligations and liabilities of such Guarantor that arise or may arise under or in connection with this Agreement or any other Loan Document to which such Guarantor is a party, in each case whether on account of guarantee obligations, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including all fees and disbursements of counsel and other advisors retained by, or for the benefit of, Lender or the other Secured Parties that are required to be paid by such Guarantor pursuant to the terms of any such Loan Document) whether or not claims for any such amounts are allowed or allowable in any Insolvency Event . Each Guarantor's guarantee hereunder constitutes a guarantee of payment and not of collection . (b) Any term or provision of this Agreement or any other Loan Document to the contrary notwithstanding, the maximum aggregate amount for which any Guarantor shall be liable under this guarantee shall not exceed the maximum amount for which such Guarantor can be liable without rendering the obligations of such Guarantor under this Agreement or any other Loan Document, as it relates to such Guarantor, subject to avoidance under Applicable Laws relating to fraudulent conveyance or fraudulent transfer (including the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer
24 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 Act and Section 548 of the U . S . Bankruptcy Code or any applicable provisions of comparable Applicable Laws) . Any analysis ofthe provisions of this Article VI for purposes of such Applicable Laws shall take into account the right of contribution established in Section 6 . 02 and, for purposes of such analysis, give effect to any discharge of intercompany debt as a result of any payment made under this Article Vl . (c) Each Guarantor agrees that the Obligations may at any time and from time to time exceed the amount of the liability of such Guarantor hereunder without impairing this guarantee or affecting the rights and remedies of any Secured Party hereunder . (d) This guarantee shall remain in full force and effect until the Termination Date occurs, notwithstanding that from time to time during the term of this Agreement no Guarantor Obligations may be outstanding . (e) No payment made by Borrower, any Guarantor, any other guarantor or any other Person or received or collected by any Secured Party from Borrower, any Guarantor, any other guarantor or any other Person by virtue of any action or proceeding or any set - off or appropriation or application at any time or from time to time in reduction of or in payment of the Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of any Guarantor hereunder, and each Guarantor shall, notwithstanding any such payment (other than any payment made by such Guarantor in respect of the Obligations or any payment received or collected from such Guarantor in respect of the Obligations), remain liable for the Obligations up to the maximum liability of such Guarantor hereunder until the Termination Date occurs . Section 6 . 02 . Right of Contribution . Each Guarantor hereby agrees that to the extent that a Guarantor shall have paid more than its proportionate share of any payment made hereunder, such Guarantor shall be entitled to seek and receive contribution from and against any other Guarantor hereunder which has not paid its proportionate share of such payment . Each Guarantor's right of contribution shall be subject to the terms and conditions of Section 6 . 03 . The provisions of this Section 6 . 02 shall in no respect limit the obligations and liabilities of any Guarantor to the Secured Parties, and each Guarantor shall remain liable to the Secured Parties for the full amount guaranteed by such Guarantor hereunder . Section 6 . 03 . No ubrogation . Notwithstanding any payment made by any Guarantor hereunder or any set - off or application of funds of any Guarantor by any Secured Party, no Guarantor shall be entitled to be subrogated to any of the rights of any Secured Party against Borrower or·any other Loan Party or any collateral security or guarantee or right of offset held by any Secured Party for the payment of the Obligations, nor shall any Guarantor seek or be entitled to seek any contribution or reimbursement from Borrower or any other Loan Party in respect of payments made by such Guarantor under this guarantee, in each case, until after the Termination Date occurs . If any amount shall be paid to any Guarantor on account of such subrogation rights at any time on or prior to the Termination Date, such amount shall be held by such Guarantor for the benefit of the Secured Parties, segregated from other funds of such Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over to Lender in the exact form received by such Guarantor (duly indorsed by such Guarantor to Lender, if required), to be applied against the Obligations, whether matured or unmatured, as Lender may determine in accordance with Section 4 . 02 (d) . Section 6 . 04 . Modification of the Guarantor Obli!rntions . Each Guarantor shall remain obligated hereunder notwithstanding that, without any reservation ofrights against any Guarantor and without notice to or further assent by any Guarantor, any demand for payment of any of the Guarantor Obligations made by any Secured Party may be rescinded by such Secured Party and any of the Guarantor Obligations continued, and the Guarantor Obligations, or the liability of any other Person upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived,
25 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 surrendered, subordinated or released by any Secured Party, and this Agreement and the other Loan Documents, and any other documents executed and delivered in connection therewith may be amended, amended and restated, supplemented or otherwise modified or terminated, in whole or in part, as Lender may deem advisable from time to time, and any collateral security, guarantee or right of offset at any time held by any Secured Party for the payment of the Guarantor Obligations may be sold, exchanged, waived, surrendered, subordinated or released . No Secured Party shall have any obligation to protect, secure, perfect or insure any Lien at any time held by it as security for the Guarantor Obligations or for this Agreement or any other Loan Document or any property subject thereto . Section 6 . 05 . Guarantee Absolute and Unconditional . Each Guarantor waives to the fullest extent permitted by Applicable Law any and all notice of the creation, renewal, extension or accrual of any of the Obligations and notice of or proof of reliance by any Secured Party upon this Agreement or acceptance of the guarantee contained in this Article VI . The Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon this Article VI and all dealings between any Borrower or any other Loan Party, on the one hand, and the Secured Parties, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon this Article VI . Each Guarantor, to the fullest extent pennitted by Applicable Law, waives diligence, presentment, protest, demand for payment and notice of <lefaull or 11011 pay 111 e 11 l lo or upon Borrower or any other Loan Party with respect lo the Obligations . Each Guarantor waives, to the fullest extent permitted by law, any right such Guarantor may now have or hereafter acquire to revoke, rescind, terminate or limit (except as expressly provided herein) the guarantee set forth in this Article VI or any of its obligations hereunder . Each Guarantor understands and agrees, to the fullest extent permitted by Applicable Law, that the guarantee set forth in this Article VI shall be construed as a continuing, absolute and unconditional guarantee of payment without regard to (a) the validity, enforceability or avoidability of this Agreement or any other Loan Document, any of the Guarantor Obligations or any other collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by any Secured Party, (b) any defense, set - off or counterclaim (other than a defense of payment or performance) which may at any time be available to or be asserted by Borrower or any other Person against any Secured Party, or (c) any other circumstance whatsoever (with or without notice to or knowledge of Borrower or any Guarantor) which constitutes, or might be construed to constitute, an equitable or legal discharge of Borrower with respect to any Obligations, or of such Guarantor under this guarantee, in bankruptcy or in any other instance . When making any demand hereunder or otherwise pursuing its rights and remedies hereunder against any Guarantor, any Secured Party may, but shall be under no obligation to, make a similar demand on or otherwise pursue such rights and remedies as it may have against Borrower, any other Guarantor or any other Person or against any collateral security or guarantee for the Guarantor Obligations or any right of offset with respect thereto, and any failure by any Secured Party to make any such demand, to pursue such other rights or remedies or to collect any payments from Borrower, any other Guarantor or any other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of any Borrower, any other Guarantor or any other Person or any such collateral security, guarantee or right of offset, shall not relieve any Guarantor of any obligation or liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of any Secured Party against any Guarantor . For the purposes hereof, "demand" shall include the commencement and continuance of any legal proceedings . Section 6 . 06 . Reinstatement . The guarantee set forth in this Article VI shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Guarantor Obligations is rescinded or must otherwise be restored or returned by any Secured Party, including upon the insolvency, bankruptcy, examinership, dissolution, liquidation or reorganization of any B 01 TOwer or any other Loan Party, or upon or as a result of the appointment of a receiver, examiner, intervenor or conservator of, or trustee or similar officer for, any Borrower or any other Loan Party or any substantial part of its property, or otherwise, all as though such payments had not been made .
26 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 Section 6 . 07 . Payments . Each Guarantor hereby guarantees that payments hereunder will be paid to Lender without set - off or counterclaim in Dollars in accordance with Section 4 . 03 . Section 6 . 08 . Taxes . Each payment of the Guarantor Obligations will be made by each Guarantor subject to the same provisions as are set forth in Section 4 . 04 . Section 6.09. Recourse Limited Against R WB Michigan PropCo: Carveouts . (a) Notwithstanding anything hereinabove in this Article VI , but subject in all events to ection 6 . 09 (b) . the guarantees and other payment obligations of RWB Michigan PropCo under Section 6 . 0 I (a) shall be without recourse against the assets of RWB Michigan PropCo, except for the following assets (whether now owned or hereafter acquired by, or coming into the possession, custody or contro l of, RWB Michigan PropCo) : (i) the Detroit Property, (ii) al l other assets constituting the Collateral, and (iii) al l accessions (as defined in the UCC) and proceeds (as defined in the UCC) of any of the foregoing . (b) The limitations on recourse set fo 11 h in ection 6 . 09 (a) shall be null and void and completely inapplicable, and Lender and the other Secured Parties shall have full, unconditional, unlimited recourse against RWB Michigan PropCo and all its assets, if RWB Michigan PropCo engages or participates in any of the following : (i) any act constituting fraud, misrepresentation or willful misconduct in connection with the Detroit Property, including the willful failure to perform its obligations under Section 8 . 19 ; (ii) any voluntary Disposition of the Detroit Property, in whole or in part, except as expressly permitted under the Loan Documents ; (iii) the volunta 1 y abandonment of the Detroit Property ; (iv) any act taken with the intent to materially hinder, delay or interfere with the exercise by Lender of any rights and remedies under the Loan Documents ; (v) any embezzlement, intentional diversion, intentional misappropriation, theft, conversion or fraudulent transfer of any Collateral ; (vi) any knowing or intentional breach of any covenant, representation, warranty or other provision of this Agreement which, if curable, remains uncured beyond any applicable cure period ; or (v) any knowing or intentional breach of any covenant, representation, warranty or other provision of any Mortgage on the Detroit Property which, if curable, remains uncured beyond any applicable cure period . ARTICLE VII. REPRESENT ATIONS, WARRANTIES AND AGREEMENTS In order to induce Lender to enter into this Agreement and to make and continue the Loans as provided for herein, the Loan Parties make the following representations and warranties to, and agreements with, Lender, all of which shall survive the execution and delivery of this Agreement and the making of the Loans : Section 7 . 0 I . Status . Each Loan Party is a duly organized or formed and validly existing company or other registered entity in good standing under the laws of the jurisdiction of its organization and has the corporate or other organizational power and authority to own its property and assets and to transact the business in which it is engaged . chedule 7 . 0 1 sets forth the full legal name, principal address, state of organization, other states of qualification, and taxpayer identification number of each Loan Party . Section 7 . 02 . Power and Authorit v . Each Loan Party has the corporate or other organizational power and authority to execute, deliver and carry out the terms and provisions of the Loan Documents to which it is a party and has taken all necessary corporate or other organizational action to authorize the execution, delivery and perfonnance of the Loan Documents to which it is a party . Each Loan Party has duly executed and delivered the Loan Documents to which it is a party and such Loan Documents constitute the legal . valid and binding obligation of such Loan Party enforceable against each Loan Party that is a party thereto in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent
27 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 conveyance, moratorium, examinership, reorganization and other similar laws relating to or affecting creditors' rights generally and general principles of equity (whether considered in a proceeding in equity or law) . Section 7 . 03 . No Violation . None of (a) the execution, delivery and performance by any Loan Party of the Loan Documents to which it is a party and compliance with the terms and provisions thereof, (b) the consummation of the Transactions, or (c) the consummation of the other transactions contemplated hereby or thereby on the relevant dates therefor will (i) contravene any applicable provision of any material Applicable Law of any Governmental Authority, (ii) result in any breach of any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Lien upon any Collateral (other than Liens created under the Loan Documents) or (iii) violate any provision of the Organization Documents or Permit of any Loan Party, except with respect to any conflict, breach or contravention or default (but not creation of Liens) referred to in clause (ii), to the extent that such conflict, breach, contravention or default could not reasonably be expected to have a Material Adverse Effect . Section 7 . 04 . Litigation . Labor Comrov rsie . Etc . There is no pending or, to the knowledge of any Loan Party, threatened, litigation, action, proceeding or labor controversy (including strikes, lockouts or slowdowns against any U . S . Loan Party (a) which could reasonably be expecteu to have a Material Adverse Effect, (b) which purports to affect the legality, validity or enforceability of any Loan Document or the Transactions or (c) relating to any Indebtedness or purported Indebtedness of any U . S . Loan Party . There is no outstanding judgment rendered by any court or tribunal against any U . S . Loan Party . There are no actions or proceedings pending, or to the knowledge of any Loan Party threatened, against any Material Collateral, and no Loan Party has any knowledge or belief of any pending, threatened or imminent governmental investigations or claims, complaints, actions or prosecutions involving any U . S . Loan Party as of the Closing Date . Section 7 . 05 . o Margin Stock . No Loan Party is engaged in the business of extending credit for the purpose of purchasing or carrying margin stock or otherwise for a purpose which violates, or would be inconsistent with any rule or regulation of the Board of Governors of the Federal Reserve System of the United States (or any successor) . Section 7 . 06 . Approvals . Consen s . Etc . No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority or other Person, and no consent or approval under any contract or instrument (other than (a) those that have been duly obtained or made and which are in full force and effect, or if not obtained or made, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect, (b) the filing ofUCC financing statements and other equivalent filings for foreign jurisdictions, and (c) the filings or other actions necessary to perfect Liens under the Loan Documents) is required for the consummation of the Transactions or the due execution, delivery or performance by any Loan Party of any Loan Document to which it is a party, or for the due execution, delivery or perfonnance of the Loan Documents, in each case by any of the Loan Parties party thereto . There does not exist any judgment, order, injunction or other restraint issued or filed with respect to the transactions contemplated by the Loan Documents, the consummation of the Transactions, the making of the Loans or the performance by the Loan Parties of their obligations under the Loan Documents . Section 7 . 07 . Investment Company Act . No Loan Party is, or will be after giving effect to the Transactions and the transactions contemplated under the Loan Documents, an "investment company" or a company ''controlled" by a Person required to be registered as an "investment company", within the meaning of the Investment Company Act of 1940 .
28 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 Section 7.08. Accuracy of Information. (a) None of the factual information and data (taken as a whole) at any time furnished by any Loan Party or any of their respective authorized representatives in writing to Lender (including all information contained in the Loan Documents) for purposes of or . in connection with this Agreement or any of the Transactions contains any untrue statement of a material fact or omits to state any material fact necessary to make such information and data (taken as a whole) not materially misleading, in each case, at the time such information was provided in light of the circumstances under which such information or data was furnished . (b) All proforma financial information provided to Lender were prepared in good faith based upon assumptions believed by the Loan Parties to be reasonable at the time made, it being recognized by Lender that such projections as to future events are not to be viewed as facts and that actual results during the period or periods covered by any such projections may differ from the projected results and such differences may be material . Section 7 . 09 . Financial Condition : Financial tatements . Any tax returns and financial statements delivered to Lender present fairly in all material respects the financial position and results of operations of each Loan Party at the respective dates of such information and for the respective periods covered thereby, subject in the case of unaudited financial information, to changes resulting from normal year - end audit adjustments and to the absence of footnotes . The tax returns, financial statements and other financial information required to be furnished to Lender under this Agreement have been and will for all periods following the Closing Date be prepared in accordance with GAAP consistently applied, and will present fairly in all material respects the financial position and results of operations of the Loan Parties at the respective dates of such information and for the respective periods covered thereby . None of the U . S . Loan Parties has any Indebtedness or other material obligations or liabilities, direct or contingent that, either individually or in the aggregate, has had or would reasonably be expected to have, a Material Adverse Effect . Section 7 . I 0 . Tax Returns and Pa ments . Each Loan Patty has timely filed or caused to be timely filed all material Tax returns and reports required to have been filed (and all such Tax returns are true, complete and correct in all material respects) . Assuming the Loan Parties pay all Taxes required to be paid at or prior to Closing in accordance with Section 5 . 0 I , each U . S . Loan Party has paid or caused to be paid all material Taxes required to have been paid by it that are due and payable, except Taxes (or any requirement to file Tax returns with respect thereto) that are being contested in good faith by appropriate proceedings and for which the Loan Party has set aside on its books adequate reserves in accordance with GAAP . There are no proposed or pending tax assessments, deficiencies, audits or other proceedings with respect to any material amount of Taxes of any U . S . Loan Party . None of the U . S . Loan Parties has ever "participated" in a "repo 1 table transaction" within the meaning of Section l . 6011 - 4 of the Treasury Regulations . None of the U . S . Loan Parties is a party to any tax sharing or similar agreement . Other than Permitted Temporary Liens, no Lien has been filed and no material claim is being asserted, with respect to any Tax, fee, or other charge . Section 7 . 11 . Benefit Plans . None of the U . S . Loan Parties has established, maintained or contributed to any multiemployer plan, pension plans or other benefit plan . nor is any U . S . Loan Party required to establish, maintain or contribute to any such plan . No Repo 1 table Event or Prohibited Transaction, as each such term is defined in ERISA, has occurred or is reasonably expected to occur, and no Loan Party has failed to meet the minimum funding requirements of ERlSA .
29 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 Section 7.12. ubsidiaries: Capitalization . (a) None of the U.S. Loan Parties has any Subsidiary that is not also a Loan Party. (b) Schedule 7 . 12 sets forth (i) a list of the Capital Stock issued by each Loan Party other than Parent, (ii) the number of shares or units of each class of Capital Stock of such Loan Party that is outstanding, (iii) the record and beneficial owners of such Capital Stock, (iv) the percentage of outstanding shares or units of each class owned (directly or indirectly) by such owners, and (v) whether such Capital Stock is certificated or non - certificated . (c) Other than the Capital Stock pledged to Lender pursuant to the Pledge Agreement, no Capital Stock ofRWB Florida OpCo is currently issued or otherwise existing, and no Capital Stock has been promised to any Person . Section 7 . 13 . lnt e llectual Prope 11 y : Licenses . Etc . Each Florida Loan Party owns, or possesses the right to use, all of the trademarks, service marks, trade names, Internet domain names, copyrights and copyrightable works, patents, inventions, trade secrets, know - how, proprietary computer software, franchises, intellectual property licenses and other intellectual property rights, including all registrations and applications to register any of the foregoing and all rights to sue or recover at law or in equity for any past, present or future infringement, misappropriation, dilution, violation or other impairment thereof (collectively, the "IP Rights") that are necessary for the operation of their respective businesses, except to the extent the failure to own, possess or right to use any IP Right would not result in a Material Adverse Effect . No claim or litigation regarding any of the IP Rights of the Florida Loan Parties is pending or, to the knowledge of any Loan Party, threatened . Section 7.14. Environmental Warranties. With respect to the Mortgaged Properties: (a) The Loan Parties have at all times been in material compliance with, and the Loan Parties have no material liability under, any applicable Environmental Law, and have obtained all material permits, licenses, certificates or authorizations required under Environmental Law (collectively, "Environmental Permits") and necessary for the conduct of their businesses and operations, and the ownership, operation and use of the Mortgaged Properties . The Loan Parties are in material compliance with the terms and conditions of such Environmental Permits, and all such Environmental Permits are valid and in good standing . (b) There has been no Release or threatened Release or any handling, management, generation, treatment, storage or disposal of Hazardous Materials in, on, at, under, to, or from any of the Mortgaged Properties that has resulted in, or is reasonably expected to result in, material liability or obligations by any of the Loan Parties under Environmental Law or result in a material Environmental Claim . (c) There is no material Environmental Claim pending or, to the knowledge of the Loan Parties, threatened and, to the knowledge of the Loan Parties, there are no actions, activities, circumstances, conditions, events or incidents that are reasonably likely to form the basis of a material Environmental Claim . (d) No person with an indemnity, contribution or other obligation to any of the Loan Parties relating to compliance with or liability under Environmental Law is in default with respect to any such indemnity, contribution or other obligation .
30 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440O5F9C7DC1 (e) None of the Mortgaged Properties is (i) listed or proposed for listing on the National Priorities List as defined in and promulgated pursuant to CERCLA or (ii) listed on the Comprehensive Environmental Response, Compensation and Liability Information System promulgated pursuant to CERCLA or (iii) included on any similar list maintained by any governmental or regulatory authority that indicates that any Loan Party has or may have an obligation to undertake investigatory or remediation obligations under applicable Environmental Laws . (f) No Lien has been recorded or, to the knowledge of any Loan Party, threatened under any Environmental Law with respect to any of the Core Real Properties .. (g) The Loan Parties have made available to Lender all material reports, assessments, audits, studies and investigations in their possession, custody or control concerning Environmental Claims or compliance with or liability or obligation under Environmental Law . Section 7 . 15 . Ownership of Properties . (a) Parent owns good and valid title to its Capital Stock of the U . S . Loan Parties, if any ; (b) Borrower owns good and valid fee simple title to the Apopka Property, the Sanderson Property and its Capital Stock of RWB Florida OpCo ; (c) RWB Michigan PropCo owns good and valid fee simple title to the Detroit Property ; (d) RWB Florida OpCo owns good and valid title to the Florida Cannabis License ; (e) the Florida Loan Parties own good and valid title to their respective assets which constitute Collateral ; (d) no Person other than a U . S . Loan Party has a leasehold interest in any Mortgaged Property ; and (e) as of the Closing Date, to the best of the Loan Parties' knowledge, each asset which constitutes Collateral is owned by the applicable Loan Party free and clear of all Liens or claims (other than Pennitted Liens and Permitted Temporary Liens) . The aggregate sum ofall lndebtedness and other obligations of the Loan Parties which are, or are reasonably likely to result in, Permitted Temporary Liens Section 7 . 16 . No Default . Except for overdue payments in an amount not exceeding $ 750 , 000 in the aggregate to contractors, materialmen and suppliers in connection with improvements to the Apopka Property or Sanderson Property, none of the U . S . Loan Parties is in default or material breach under or with respect to, or a party to, any Contractual Obligation that could, either individually or in the aggregate, have a Material Adverse Effect . On the Closing Date, after giving effect to the Transactions, none of the U . S . Loan Parties is in default under or with respect to any Contractual Obligation in respect of any Indebtedness that is or, if not cured could reasonably be expected to become, a Lien on Material Collateral . No event, act or condition has occurred or is reasonably expected to occur that, with notice or lapse of time, or both, would constitute a default under any such Indebtedness . Section 7 . 17 . Solvency . On the Closing Date after giving effect to the Transactions and the other transactions related thereto . the Loan Parties are Solvent . Section 7 . 18 . Locations of Offices . Records and Colla t eral . The address of the principal place of business and chief executive office of each Florida Loan Party is, and the books and records of each Florida Loan Party and all of its Chattel Paper (as defined in the UCC) and records of Accounts (as defined in the UCC) are maintained exclusively in the possession of such Florida Loan Party at, the address of such Florida Loan Party specified in Schedu . le 7 . 01 . Section 7.19. Compliance v ith Laws and Permits: Authorization . (a) Each U . S . Loan Party (i) is in material compliance with all Applicable Laws and Permits, including all applicable State Cannabis Laws and (ii) has all requisite governmental licenses, Permits, authorizations, consents and approvals to operate its business as currently conducted, except in such instances which could not reasonably be expected to have a Material Adverse Effect . No Loan Party
31 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 has received any written notice that is outstanding or unresolved to the effect that a U . S . Loan Party's operations at a Mortgaged Property are not in material compliance with any Environmental Law or Permit or are the subject of any investigation by any Governmental Authority evaluating whether any cleanup or other action is needed at a Mortgaged Property to respond to a Release or impose further controls on any existing discharge of Hazardous Materials to the environment . (b) No Loan Party nor, to the knowledge of the Loan Parties, any director or officer thereof, is an individual or entity that is, or is owned or controlled by any Person that is (i) currently the subject or target of any Sanctions, (ii) included on OFAC's List of Specially Designated Nationals or any similar list enforced by any other relevant sanctions authority or (iii) located, organized or resident in a country or territory subject to Sanctions (a "Designated Jurisdiction") . No Loan Party is engaged in any Restricted Cannabis Activities in the States of Florida or Michigan . (c) The Loan Parties have conducted their business in compliance with Anti - Corruption Laws, and have instituted and maintained policies and procedures designed to promote and achieve compliance with such laws . Section 7 . 20 . No Material Adverse Effect . Since the date of the Most Recent Financial Statements, (a) there has been no Material Adverse Effect, and (b) there has been no circumstance, event or occurrence, and no fact is known to the Loan Parties that could reasonably be expected to result in a Material Adverse Effect . Section 7 . 21 . Contractual or other Restrictions . Other than the Loan Documents, no Loan Party is a party to any agreement or arrangement or subject to any Applicable Law that limits its ability to pay dividends to, or otherwise make Investments in or other payments to any Loan Party, that limits its ability to grant Liens in favor of Lender or that otherwise limits its ability to perform the terms of the Loan Documents . Section 7 . 22 . Collective Bargaining Ae . reements . There are no collective bargaining or similar agreements between or applicable to any Loan Party and any union, labor organization or other bargaining agent in respect of the employees of any Loan Party . Section 7 . 23 . lnsurance . The material properties of the U . S . Loan Parties are insured as required by Section 8 . 03 . As of the Closing Date, all premiums with respect thereto that are due and payable have been duly paid and no Loan Party has received or has knowledge of any notice of violation or cancellation thereof and each Loan Paity has complied in all material respects with the requirements of such policy . Section 7 . 24 . Conduct of Business . The Florida Loan Parties do not engage in any business other than the Business pursuant to the Florida Cannabis License or the provision of services and products related to the Business, the organizational actions required to maintain their existence and the payment and performance of the Obligations . Section 7 . 25 . Deposit Accounts and ecu r ities Accounts . Set forth in Schedule 7 . 25 is a list as of the Closing Date of all of the deposit accounts and securities accounts of each Florida Loan Party, including, with respect to each bank or securities intermediary at which such accounts are maintained by such Loan Party, (a) the name and location of such Person and (b) the bank routing and account numbers of the deposit accounts or securities accounts maintained with such Person . Section 7 . 26 . Absence of any Undi c l osed Liabilitie . There are no material liabilities of the Florida Loan Parties of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise, and there is no existing condition, situation or set of circumstances which could
32 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440O5F9C7DC1 reasonably be expected to result in any such liabilities, other than those liabilities (a) disclosed on the Most Recent Financial Statement, or (b) that would not, individually or in the aggregate, reasonably be expected to constitute a Material Adverse Effect . Section 7.27. Material Contracts and Regulatorv Matters. (a) Each Material Contract to which a Florida Loan Party is a party is in full force and effect and no defaults currently exist thereunder . (b) RWB Florida OpCo is the sole holder of the Florida Cannabis License . The Florida Cannabis License is in full force and effect in all material respects and has not been revoked, suspended, cancelled, rescinded, terminated, modified and has not expired . There are no pending or threatened actions by or before any Governmental Authority to revoke, suspend, cancel, rescind, terminate or materially adversely modify the Florida Cannabis License . Section 7 . 28 . Anti - Terrorism Laws . No Loan Party or any Subsidiary is in violation of any law relating to terrorism or money laundering (collectively, "Anti - Terrorism Laws"), including the Patriot Act and Executive Order No . 13224 on Terrorism Financing, effective September 24 , 200 I (the "Executive Order") . No Loan Party, Subsidiary thereof or agent acting or benefiting in any capacity in connection with the Loan is (a) a Person that is listed in the Annex to, or is otherwise subject to the provisions of, the Executive Order, (b) a Person owned or control led by, or acting for or on behalf of, any Person that is listed in the Annex to, or is otherwise subject to the provisions of, the Executive Order, (c) a Person with whom Lender is prohibited from dealing or otherwise engaging in any transaction by any Anti - Terrorism Law, (d) a Person who commits, threatens or conspires to commit or supports "terrorism" as defined in the Executive Order, or (e) a Person that is named as a "specially designated national and blocked person" on the most current list published by the United States Treasury Department Office of Foreign Asset Control at its official website or any replacement website or other replacement official publication of such list . No Loan Party or Subsidiary or, to the Loan Parties' knowledge, other Lender acting or benefiting in any capacity in connection with the Loan (i) conducts any business or engages in making or receiving any contribution of funds, goods or services to or for the benefit of any Person described in the preceding sentence, (ii) deals in, or otherwise engages in any transaction relating to, any property or interests in any property blocked pursuant to the Executive Order, or (iii) engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in the Anti - Terrorism Laws . Section 7 . 29 . Transactions with Affiliates . Except for lntercompany Indebtedness, there are no existing or proposed agreements, arrangements , understandings or transactions between any U . S . Loan Party and any of the officers, members, managers, directors, stockholders, parents, employees or Affiliates of any Loan Party or any members of their respective immediate families, involving payments from any U . S . Loan Party, other than for the payment of reasonable salaries or business expense reimbursements in the ordinary course of business . ARTICLE VIII. AFFIRMATIVE COVENANTS The Loan Parties hereby covenant and agree that on the Closing Date and thereafter, until the Loans, together with interest , Fees and all other Obligations incurred hereunder (other than Unasserted Contingent Obligations) are paid in full in accordance with the terms of this Agreement : Section 8 . 0 I . Financial Information . Reports . Notices and Information . The Loan Parties will furnish Lender copies of the following notices , financial statements, reports or information :
33 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440O5F9C7DC1 (a) Quarterly Financial tatements . As soon as available and in any event within 30 days after the end of each fiscal quarter, unaudited (i) balance sheets of each Loan Party as of the end of such fiscal quarter, (ii) a statement of cash flow of each Loan Party for such fiscal quarter, and (iii) statements of income of each Loan Party for such fiscal quarter . (b) Corn pi led Financial tatements . As soon as available and in any event within 150 days after the end of each fiscal year, copies of the balance sheets of each Loan Party for such fiscal year and the related statements of income and the statement of cash flows of each Loan Party for such fiscal year, such statements audited and certified by an independent public accounting firm reasonably acceptable to Lender, together with a management discussion and analysis (with reasonable detail and specificity) of the results of operations for the fiscal periods reported . (c) Comp I iance Ce 11 iticates . Concurrently with the delivery of the financial information pursuant to Sections 8 . 0 l (a) and 8 . 0 I (b) . a Compliance Certificate, executed by an Authorized Officer of Parent, certifying to the matters described therein . (d) Bank Account Information . Concurrently with the delivery of the financial ,infonnation pursuant to ections 8 . 0 1 (a) and 8 . 0 l(b) . the Loan Parties will provide Lender with copies of scrccnshots or copies ofredacted (in a manner reasonably satisfactory to Lender) account statements for all deposit accounts and securities accounts of the Loan Parties, other than Excluded Accounts, along with a certification from the Parent's chief financial officer as to the authenticity of the infonnation set forth in such copies . (e) Additional Information . With reasonable promptness upon request, (i) such other infonnation regarding the condition, properties or operations (financial or otherwise), changes in ownership of Capital Stock, and business affairs of any Loan Party, or compliance with the terms of this Agreement, as Lender may reasonably request and (ii) information and documentation reasonably requested by Lender for purposes of compliance with applicable "know your customer" and anti - money laundering rules and regulations, including the Patriot Act . (f) Cash Flow Forecast . [Intentionally omitted] . (g) Budget . [Intentionally omitted] . (h) Defaults : Liti 2 : ation . As soon as possible and in any event within three ( 3 ) Business Days after an Authorized Officer of any Loan Party obtains knowledge thereof, notice from an Authorized Officer of Parent of (i) the occurrence of any event that constitutes a Default or an Event of Default, which notice shall specify the nature thereof, the period of existence thereof and what action the applicable Loan Parties propose to take with respect thereto, and (ii) the commencement of, or any material adverse development with respect to, any litigation, action, proceeding or labor controversy involving a Loan Party, and to the extent Lender requests, copies of all non - privileged documentation related thereto . (i) Notices . The Loan Parties shall promptly (and in no event later than 15 days after an Authorized Officer of any Loan Party obtains knowledge thereof) provide Lender with the following : (i) notice of any pending or threatened (in writing) litigation, action, proceeding or other controversy which purports to affect the legality, validity or enforceability of any Loan Document, or any Material Contract, which notice shall be signed by an Authorized Officer of Parent and shall specify the nature thereof, and what actions the applicable Loan Parties propose to take with respect thereto, together with copies of all relevant documentation ;
34 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440O5F9C7DC1 (ii) notice of the commencement of, or any material development in, any litigation, investigation (formal or informal), document request or proceeding affecting any Loan Pa 1 ty in which (A) the amount of damages claimed is $ 250 , 000 or more (with respect to a U . S . Loan Party) or $ 2 , 000 , 000 or more (with respect to Parent), (B) injunctive or similar relief is or may be sought and which, if adversely determined, would reasonably be expected to have a Material Adverse Effect, (C) the relief sought is or may be an injunction or other stay of the performance of this Agreement or any other Loan Document or (D) any Governmental Authority is involved ; (iii) notice of any pending or threatened Enforcement Action, or any material development in any Enforcement Action . (iv) notice of any pending or threatened (in writing) labor dispute, strike, walkout, or union organizing activity with respect to any employees of a Loan Party ; (v) notice of (i) any default or breach by any Loan Party under any Material Contract to which a Florida Loan Party is a party, or (ii) any early termination ofany such Material Contract or the receipt by any Loan Party of any notice from the other party to any such Material Contract of such party's intent to terminate such Material Contract early ; (vi) notice of the discharge or withdrawal or resignation by the Loan Parties' independent accountants ; (vii) copies of all amendments or other modifications to a Loan Party's Organization Documents ; (viii) copies of all material written communications to and from applicable Governmental Authorities, including the Internal Revenue Service, the Environmental Protection Agency, and any Governmental Authority regulating cannabis, regarding notice of enforcement proceedings, complaints, and matters of similar potential import relating to a U . S . Loan Party ; (ix) copies of the results of any facility inspection or audit (relating to a Florida Loan Party or its properties) by any Governmental Authority to the extent such results are material and negative ; (x) a copy of any warning document, letter or notice from any Governmental Authority that would have a material and negative impact on the Florida Cannabis License or the ability of a Florida Loan Parties to conduct all or any material portion of its business ; (xi) notice of receipt of any deficiency, suspension, rejection, cancellation or non - renewal of the Florida Cannabis License ; (xii) copies of any material notices that any Loan Party receives or delivers in connection with any leased real property located in the State of Florida ; and (xiii) notice of any default under an agreement evidencing Indebtedness owed to or from a U . S . Loan Party . G) Bankruptcy, Etc . Immediately upon becoming aware thereof, notice (whether involuntary or voluntary) of the bankruptcy, insolvency, examinership, reorganization of any Loan Party or any Subsidiary of a U . S . Loan Party, or the appointment of any trustee, assignee, receiver or similar estate fiduciary in connection with or anticipation of any such occurrence, or the taking of any step by any
35 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 Person in furtherance of any such action or occurrence. (k) Corporate Information. Promptly upon, and in any event within I 5 days after, becoming aware of any material change to the name, structure, or existence of any Loan Party. Section 8 . 02 . Boo . ks . Records and Inspections . Each of the Loan Paiiies will maintain proper books of record and account, in which entries that are full, true and correct in all material respects, and are in conformity with GAAP (subject to nonnal year - end adjustments) consistently applied . Each of the Loan Paiiies will permit Lender and its representatives and independent contractors authorized by Lender to visit and inspect any of its properties, to examine its corporate, financial and operating records, and make copies thereof or abstracts therefrom, to inspect the Collateral, and to discuss its affairs, finances and accounts with its chief executive officer, chief financial officer, chief operating officer, chief administrative officer, managers, directors or general counsel . Section 8 . 03 . Maintenance of Insurance . In addition to the insurance required by the Loan Documents with respect to the Collateral, the Loan Parties will, and will cause each of their respective Subsidiaries to, at all times maintain in full force and effect, with financially sound and reputable insurers, at the time the relevant coverage is placed or renewed, insurance in at least such amounts and against at least such risks (and with such risk retentions) as deemed reasonably necessary or advisable by the Loan Parties in their reasonable discretion (but, at a minimum, in such amounts and with such coverages, limits and deductibles as is customary in the Loan Parties' businesses) ; and will furnish to Lender upon written request information presented in reasonable detail as to the insurance so carried, including (i) endorsements to (A) all "All Risk" policies naming Lender, on behalf of the Lender and any other Secured Parties, as lender loss payee, and (B) all general liability and other liability policies naming Lender and any other Secured Parties, as additional insured, and (ii) legends providing that no cancellation, material reduction in amount or material change in insurance coverage thereof shall be effective until at least 30 days (IO days with respect to failure to pay premium) after written notice to Lender thereof . Additionally, if requested by Lender, such policies shall contain a clause that the interest of Lender shall not be impaired or invalidated by any act or neglect of any Loan Party or other owner of the Collateral nor by the occupation of the premises for purposes more hazardous than are permitted by said policy . If any Loan Party fails to provide and pay for insurance required hereunder, Lender may, at Loan Parties' expense, procure the same, but shall not be required to do so . Each Loan Party agrees to deliver to Lender, promptly as rendered, true copies of all reports made by any Loan Party in any reporting forms to insurance companies . Section 8 . 04 . Payment of Taxes . Each U . S . Loan Party shall timely pay and discharge all Taxes, assessments and governmental charges or levies imposed upon them or upon their income or profits, or upon any properties belonging to it, prior to the date on which such Tax, assessment or governmental charge is due, and all lawful claims that, if unpaid, could reasonably be expected to become a Lien (other than Permitted Temporary Liens) on Material Collateral ; pro ided that none of the Loan Parties or any of their respective Subsidiaries shall be required to pay any such Tax, assessment, charge, levy or claim that is being contested diligent in good faith and by proper proceedings that stays execution and as to which such Loan Party has maintained adequate reserves with respect thereto in accordance with GAAP . Section 8 . 05 . Maintenance of Existence : ompliance with Laws . Etc . Each Loan Party will (a) preserve and maintain in full force and effect its organizational existence, (b) preserve and maintain its good standing under the laws of its state or jurisdiction of incorporation, organization or formation, and each state or other jurisdiction where such Person is qualified, or is required to be so qualified, to do business as a foreign entity, except to the extent that failure to do so would not reasonably be expected to have a Material Adverse Effect, and (c) comply in all material respects with all Applicable Laws, rules, regulations and orders, including compliance with safety regulations applicable to any Loan Party .
36 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440O5F9C7DC1 Section 8.06. Environmental Compliance. (a) Each Loan Party will : (i) comply in all material respects with all Environmental Laws and Environmental Permits applicable to the Mortgaged Properties ; (ii) obtain and maintain in full force and effect all material Environmental Permits applicable to the Mortgaged Properties ; and (iii) conduct all response, investigation, remediation, cleanup or monitoring activity required at the Mortgaged Properties by any applicable Environmental Laws, and in accordance with, the requirements of any Governmental Authority having jurisdiction and applicable Environmental Laws, unless in the case of this clause (iii) such requirement is being contested in good faith and by proper proceedings and as to which such Loan Party has maintained adequate reserves with respect thereto in accordance with GAAP . (b) Each Loan Party will do or cause to be done all things required by Environmental Laws to prevent any Release of Hazardous Materials in, on, at, under, to or from any Mortgaged Property except in full compliance with applicable Environmental Laws or an Environmental Permit, and ensure that there shall be no Hazardous Materials in, on, at, under or from any Mortgaged Prope 1 ty except those that are present, used, stored, handled and managed in material compliance with applicable Environmental Laws . (c) Each Loan Party will undertake all actions, including response, investigation, remediation, cleanup or monitoring actions, necessary, at the sole cost and expense of the Loan Parties : (i) to address any Release of Hazardous Materials in, on, at, under, to or from any Mortgaged Property as required pursuant to Environmental Law or the requirements of any governmental or regulatory authority ; (ii) to address as may be required by Environmental Law any environmental conditions relating to any Mortgaged Property ; (iii) to keep all Mortgaged Properties free and clear of all Liens and other encumbrances pursuant to any Environmental Law ; and (iv) to promptly notify Lender in writing of : (I) any material Release or threatened Release of Hazardous Materials in, on, at, under, to, or from any Mortgaged Property, except those that are pursuant to and in compliance with the terms and conditions of an Environmental Permit, ( 2 ) any material non - compliance with, or violation of, any Environmental Law applicable to any Mortgaged Property, ( 3 ) any Lien pursuant to Environmental Law imposed on any Mortgaged Property, ( 4 ) any response, investigation, remediation, cleanup or monitoring activity at any Mortgaged Property required to be undertaken pursuant to Environmental Law, and ( 5 ) any notice or other communication received by any Loan Party from any Person relating to any material Environmental Claim or material liability or potential liability relating to a Mortgaged Property pursuant to any Environmental Law . . (d) If a Default caused by reason of a breach of Section 7 . 14 or this Section 8 . 06 shall have occurred and is not reasonably curable within 30 days or shall be continuing for more than 30 days without the Loan Parties commencing activities reasonably likely to cure such Default, the Loan Parties shall, at the written request of Lender, (i) provide to Lender within 30 days after such request, at the expense of the Loan Parties, an environmental assessment report regarding the matters which are the subject of such Default, including, where appropriate, any soil or groundwater sampling, prepared by a nationally recognized environmental consulting firm reasonably acceptable to Lender and in the form and substance reasonably acceptable to Lender and evaluating the presence or absence of Hazardous Materials and the estimated cost of any compliance or response action to address such Default and findings ; (ii) promptly undertake all actions required by applicable Environmental Law to address any non - compliance with or violation of Environmental Law ; (iii) promptly undertake all response actions required by Environmental Laws to address any recognized environmental conditions identified in the environmental assessment report to the reasonable satisfaction of Lender ; and (iv) permit Lender and its representatives to have access to all Mortgaged Properties which are the subject of such Default for the purpose of conducting such environmental audits and testing as is reasonably necessary, including subsurface sampling of soil and groundwater, the cost for which shall be payable by the Loan Parties .
37 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 Section 8 . 07 . Maintenance of Properties . Each Loan Party will maintain, preserve, protect and keep the Collateral in good working order and condition (ordinary wear and tear excepted and subject to Casualty Events and Dispositions permitted under this Agreement), and make necessary repairs, renewals and replacements thereto, and will maintain in good standing and renew as necessary all licenses, Permits (including the Florida Cannabis License) and other clearances necessary to use and occupy the Collateral, in each case so that the business carried on by such Person may be properly conducted at a 11 times, except where the failure to do so would not reasonably be expected to have a Material Adverse Effect . Section 8.08. [Reserved] . Section 8.09. [Reserved] . Section 8 . 10 . Further Assurances . The Loan Parties will execute any and all further documents, financing statements, agreements and instruments, and take all such further actions (including the filing and recording of financing statements, fixture filings, mortgages, deeds of trust and other documents), which may be required under any Applicable Law, or which Lender may reasonably request, in order to grant, preserve, protect and perfect the validity, enforceability, priority and non - avoidability of the security interests created or intended to be created by any Loan Document, all at the sole cost and expense of the Loan Parties . Notwithstanding anything herein to the contrary, if Lender detennines that the cost of creating or perfecting any Lien on any asset is excessive in relation to the practical benefits afforded to Lender thereby, then such property may be excluded from the Collateral for a 11 purposes of the Loan Documents . Section 8.11. [Reserved] . Section 8.12. Bank Accounts. (a) Subject to ection 8 . 16 . the Florida Loan Parties shall establish and deliver to Lender a Deposit Account Control Agreement with respect to each of their respective securities accounts, deposit accounts and investment property, each of which is set forth on chedule 7 . 25 , other than those accounts which are Excluded Accounts . The Florida Loan Parties shall not allow any of their Collections to be deposited to any accounts other than those listed on Schedule 7 . 25 which are subject to a Deposit Account Control Agreement (each, a "Controlled Account") ; provided that so long as no Event of Default has occurred and is continuing, the Florida Loan Parties may establish new deposit accounts, commodities accounts or securities accounts so long as, prior to or concurrently with the time such account is established : (i) the Loan Parties have delivered to Lender an amended Schedule 7 . 25 including such account and (ii) the Florida Loan Parties have delivered to Lender a Deposit Account Control Agreement, duly executed by the applicable Florida Loan Parties and applicable bank, securities intermediary or other financial institution, with respect to such account to the extent such account is not an Excluded Account . (b) Each Deposit Account Control Agreement sha11 provide, among other things, that (i) upon notice (a "Notice of Controf') from Lender, the bank, securities intermediary or other financial institution party thereto will comply with instructions of Lender directing the disposition of funds or other financial assets in the account without further consent by the applicable Loan Party ; provided that Lender agrees not to issue a Notice of Control unless an Event of Default has occurred and is then continuing, and (ii) the bank, securities intermediary or other financial institution party thereto has no rights of setoff or recoupment or any other claim against the account subject thereto, other than for payment of its service fees and other charges directly related to the administration of such account and for returned checks or other items of payment . In the event Lender issues a Notice of Control under any Deposit Account Control Agreement, all Collections or other amounts subject to such Deposit Account Control Agreement shall be transferred as directed by Lender and used to pay the Obligations in the manner set fo 1 th in ection 4 . 02 (d) .
38 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 (c) If, notwithstanding the provisions of this ection 8 . 12 , after the occurrence and during the continuance of an Event of Default, the Loan Paities receive or otherwise have dominion over or control of any Collections of the Florida Loan Parties or other amounts, the Loan Parties shall hold such Collections and amounts in trust for Lender and shall not commingle such Collections with any other funds of any Loan Party or other Person or deposit such Collections in any account other than Controlled Accounts . Section 8.13. [Reserved] . Section 8 . 14 . Regula t o 1 y Matters . The Loan Parties shall take any and all action necessary to ensure that the Florida Cannabis License remains in good standing and in full force and effect in all material respects . Section 8 . 15 . REIT . Each Loan Party shall, to the extent commercially reasonable, cooperate with Lender with respect to amending, supplementing or otherwise modifying any documents or instruments in connection with any actions or modifications not adverse to Borrower in any material respect necessary or advisable to maintain the status of Lender in its capacity as a "real estate investment trust" within the meaning of Section 856 of the Internal Revenue Code . Section 8 . 16 . Post - Closinl! Matter . The Loan Parties shall deliver the following to Lender (or to such other Persons as specified in this ection 8 . 16 ) , in form and substance satisfactory to Lender, all at the Loan Parties' cost and expense and duly executed by the Loan Parties (where applicable), (a) no later than 7 days after the Closing Date (or such later date to which Lender agrees in its discretion) : (i) all payments required under ection 5.01 (b) , to the extent not previously paid to Lender. (ii) previously delivered to Lender. all discharges of Liens required under ection - .Ol(c) . to the extent not (iii) evidence that all payments required under Section 5 . 0 I (d) have been made, to the extent not previously delivered to Lender . (iv) original executed and notarized versions of each Mortgage previously delivered to Lender, in a form acceptable for recording in each applicable jurisdiction . (b) no later than 15 days after the Closing Date (or such later date to which Lender agrees in its discretion): (i) all surveys (certified and updated, as necessary), affidavits (including GAP and use affidavits), zoning reports, environmental site assessments, evidences of insurance and such other instruments and documents that Lender or its chosen title insurance company (or their agents) may request in order to have issued to Lender an ALTA title insurance policy with respect to each Mortgage on each Mortgaged Property (at the Loan Parties' cost and expense, promptly paid when due), in such insured amounts as Lender may deem reasonable or necessary . (ii) to the extent requested by Lender in connection with the issuance of a title insurance policy, original executed and notarized amendments or restatements of any Mortgage on a Mortgaged Property .
39 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 (iii) a Deposit Account Control Agreement for each of the deposit accounts and securities accounts of the Florida Loan Parties listed on Schedule 7 . 25 (other than Excluded Accounts), to the extent not previously provided to Lender, duly executed by the applicable financial institution . (iv) all certificates, if any, representing any securities pledged under the Security Documents, accompanied by instruments of transfer and undated stock powers endorsed in blank, all of which shall comply with Applicable Laws, including stock certificates representing all Capital Stock issued by RWB Florida OpCo, reflecting the issuer's name as "Red White & Bloom Florida Inc . " (c) no later than 30 days after the Closing Date (or such later date to which Lender agrees in its discretion): (i) certificates of insurance naming Lender as an additional insured or lender loss payee, as applicable, in each case, as to the insurance required by Section 8 . 03 . (ii) original executed versions of all promissory notes evidencing Indebtedness in an aggregate amount exceeding $ 500 , 000 that is owed to any of the Florida Loan Parties, together with instruments of transfer with respect thereto endorsed in blank and, to the extent not already pledged to Lender pursuant to the Security Documents, such agreements as Lender may request in order to perfect a first - priority Lien thereon . (iii) any other item required under ection 5.0 I , to the extent not previously provided to Lender; Section 8 . 17 . SNDA . Within 45 days after written request from Lender at any time after the Closing Date (or such later date to which Lender agrees in its discretion), each Loan Party that leases a Mortgaged Real Property to another Person (including to another Loan Party) shall deliver to Lender a subordination, non - disturbance and attornment agreement with respect to such Mortgaged Real Property, in form and substance acceptable to Lender, duly executed by the landlord and tenant(s) . Section 8 . 18 . Assirmment of Leasehold lnterests . Within 45 days after written request from Lender at any time after the Closing Date (or such later date to which Lender agrees in its discretion), each Loan Party that presently or in the future leases Real Property from any Person in connection with the Business in the State of Florida (including from another Loan Party) shall (i) deliver to Lender a collateral assignment of such Loan Party's leasehold interest in such Real Property, in form and substance acceptable to Lender (a "Collateral Leasehold Assignment"), which grants to Lender the option (but not the obligation) to assume the applicable lease or leasehold interest as the tenant after the occurrence of an Event of Default, and (ii) use commercially reasonable efforts to solicit, encourage and cause the landlord of such Real Property to execute the Collateral Leasehold Assignment . Section 8 . 19 . Pavment of Material Liabilities . By no later than December 31 , 2022 , the Loan Parties shall pay in full all Indebtedness, Taxes, assessments, governmental charges, or any other obligations (including obligations to contractors, subcontractors, materialmen and suppliers) of the U . S . Loan Parties which, if unpaid, is, or could reasonably be expected to become or result in, a Lien upon any Material Collateral . In addition, upon any sale of the Detroit Property (and prior to the disbursement of any proceeds of such sale to or for the benefit of a Loan Party), the Loan Parties shall pay in full all Indebtedness, Taxes, assessments, governmental charges, or any other obligations (including obligations to contractors, subcontractors, materialmen and suppliers) which, if unpaid, is, or could reasonably be expected to become or result in, a Lien upon any asset of the Florida Loan Parties which constitutes Material Collateral .
40 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 ARTICLE IX. NEGATIVE COVENANTS The Loan Parties hereby covenant and agree that until the Loans, together with interest, Fees and all other Obligations incurred hereunder (other than Unasserted Contingent Obligations) are paid in full in accordance with the terms of this Agreement : Section 9 . 0 I . Limitation on Indebtedness . Each Loan Party will not directly or indirectly, create, incur, issue, assume, guarantee, suffer to exist or otherwise become directly or indirectly liable, contingently or otherwise with respect to any Indebtedness, except for : (a) Indebtedness to Lender and the other Secured Parties in respect of the Obligations; (b) Indebtedness of Parent which is not secured by a Lien on any Material Collateral and for which the U . S . Loan Parties do not have a Guarantee Obligation ; (c) Indebtedness of RWB Michigan PropCo which is not secured by a Lien on any Material Collateral and for which the Florida Loan Parties do not have a Guarantee Obligation ; (d) Indebtedness of Borrower (including the M&V Indebtedness) which is not secured by a Lien on any Material Collateral, and for which RWB Florida OpCo does not have a Guarantee Obligation, in an aggregate amount outstanding which does not exceed $ 40 , 000 , 000 at any time (inclusive of the M&V Indebtedness) or $ 20 , 000 , 000 at any time (exclusive of the M&V Indebtedness) ;. (e) Indebtedness of RWB Florida OpCo which is which is not secured by a Lien on any Material Collateral, and for which Borrower does not have a Guarantee Obligation, in an aggregate amount outstanding which does not exceed $ 5 , 000 , 000 at any time ; and (f) Indebtedness approved in advance, in writing, by Lender in its sole discretion; pro ided, however, in no event shall any Loan Party incur any Indebtedness (including Indebtedness otherwise permitted above) while any Default or Event of Default has occurred and is continuing or would result therefrom, or if the incurrence of such Indebtedness will result in any of the U . S . Loan Parties not being Solvent . Section 9 . 02 . Limitation on Liens . Each Loan Party will not, directly or indirectly, create, incur, assume or suffer to exist any Lien upon any Material Collateral, whether now owned or hereafter acquired, except for Permitted Temporary Liens (but only until December 31 , 2022 or any earlier date on which such Lien ceases to be a Permitted Temporary Lien in accordance with the definition of such term) and Permitted Liens . For avoidance of doubt, the existence of the Lien of M & V Investment One, LLC upon certain Capital Stock of Borrower pledged by Parent pursuant to that certain Collateral Assignment of Membership Interest dated on or about June 4 , 202 I does not violate this Section 9 . 02 . Section 9 . 03 . Consolidation, Merger, Etc . Each Loan Party will not liquidate or dissolve, and each U . S . Loan Party will not consolidate with, or merge into or with, any other Person . Section 9 . 04 . Permilled Dispositions . Each Loan Party will not make a Disposition, or enter into any agreement to make a Disposition, of any Material Collateral to any Person in one transaction or a series of related transactions unless such Disposition : (a) is in the ordinary course of its business and is of obsolete, surplus or worn out
41 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 personal property ; (b) is made as a consequence of any loss, damage, distribution or other casualty or any condemnation or taking of such assets by eminent domain proceedings . pro ided that the Net Cash Proceeds thereof are applied in accordance with Section 4 . 02 (a) ; (c) is a sale of the Detroit Property for at least $ 5 , 000 , 000 , so long as (x) no Event of Default exists at the time of such sale and (y) the Loan Parties timely perform their obligations under Section 8.19 in connection with such sale; (d) is a sale of Inventory (as defined in the UCC) in the ordinary course of business; (e) is a sale or disposition of equipment to the extent that such equipment is exchanged for credit against the purchase price of similar replacement equipment, or the proceeds of such Dispositions are reasonably promptly applied to the purchase price of similar replacement equipment, all in the ordinary course of business ; or (f) is an abandonment, failure to renew, or other disposition in the ordinary course of business of any intellectual property that is not material to the conduct of the business of any Loan Party ; Notwithstanding anything to the contrary set forth in this ectlon 9 . 04 , in no event shall any Loan Party sell, transfer, assign or otherwise dispose of (other than in connection with the grant of a Lien in favor of Lender pursuant to the Loan Documents) any lntercompany Indebtedness, the Florida Cannabis License, any of its rights under or in respect of any accounts receivable of the Florida Loan Parties, Collections of the Florida Loan Parties, or proceeds arising thereunder or with respect thereto . Section 9 . 05 . Investments . Each U . S . Loan Party will not purchase, make, incur, assume or permit to exist any Investment in any other Person, including the formation, creation or acquisition of any Subsidiary, except : (a) Investments in cash and Cash Equivalents; (b) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with, customers and suppliers, in each case in the ordinary course of business ; (c) Investments by way of contributions to capital or purchases of Capital Stock by any U . S . Loan Party in any of its Subsidiaries that are Loan Parties ; provided that such Investment is in compliance with ection 9 . 01 in the event such Investment constitutes Indebtedness of the party making such Investment ; (d) Investments constituting (i) accounts receivable arising, (ii) trade debt granted, or (iii) deposits made in connection with the purchase price of goods or services, in each case in the ordinary course of business; (e) any agreement by any U . S . Loan Party to accept a deferred portion of the sales price in connection with any Disposition permitted under ection 9 . 04 ; (f) Permitted Acquisitions; (g) Intercompany Indebtedness permitted pursuant to Section 9 . 01 , so long as the
42 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 applicable Persons have subordinated such Indebtedness to Lender in a manner acceptable to Lender ; (h) the maintenance of deposit accounts in the ordinary course of business so long as the applicable provisions of Section 8 . 12 have been complied with in respect of such deposit accounts ; (i) loans and advances by a U . S . Loan Party to its own officers, directors and employees for reasonable and customary business related travel expenses, entertainment expenses, moving expenses and similar expenses, in each case incurred in the ordinary course of business, in an aggregate outstanding principal amount at any time not to exceed $ 50 , 000 ; and G) deposits, prepayments and other credits to suppliers and deposits in connection with lease obligations, taxes, insurance and similar items, in each case made in the ordinary course of business and securing Contractual Obligations ofa U . S . Loan Party, in each case to the extent constituting a Permitted Lien ; pro ided that no Investment otherwise permitted above shall be permitted to be made if, at the time of making any such Investment, any Default or Event of Default has occurred and is continuing or would result therefrom . Section 9 . 06 . ERISA . No Loan Party will (i) fail to meet the minimum funding requirements of ERISA, permit a Reportable Event or Prohibited Transaction, as each term is defined in ERISA, to occur or (ii) withdraw or permit any Subsidiary to withdraw from participation in, permit partial or complete termination of, or permit the occurrence of any other event with respect to, any present pension, profit sharing and deferred compensation plan which could reasonably be expected to result in any liability of a Loan Party or any of its Subsidiaries, including any liability to the Pension Benefit Guaranty Corporation or its successors or any other governmental agency . Section 9.07. Restricted Pavments. Each U.S. Loan Party will not, and will not permit any of its Subsidiaries, to make any Restricted Payment, or make any deposit for any Restricted Payment, other than: (a) cash distributions by a Loan Party to its shareholders or members pursuant to its Organization Documents ; and (b) regularly scheduled payments of principal and interest on any Indebtedness permitted under this Agreement, other than lntercompany Indebtedness ; and (c) other Restricted Payments approved in writing by Lender in its sole discretion; pro ided that no Restricted Payment otherwise permitted above shall be permitted to be made if, at the time of making any such Restricted Payment, any Default or Event of Default has occurred and is continuing or would result therefrom . Section 9.08. Pa ments and Modification of erta i n Ae:reernents. Each U.S. Loan Party will not: (a) Make any payment on account of (i) Indebtedness that has been contractually subordinated in right of payment to the Obligations if such payment is not permitted at such time under the subordination terms and conditions applicable thereto or (ii) any other Restricted Debt if any Default or Event of Default has occurred and is continuing or would result therefrom . (b) Consent to any amendment, supplement, waiver or other modification of, or enter into any forbearance from exercising any rights with respect to the terms or provisions contained in (i) any
43 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 Organization Documents, in each case, other than any amendment, supplement, waiver, tennination, modification or forbearance (A) that is not materially adverse to the Secured Parties and (B) notice of which was received by Lender at least 5 Business Days (or such shorter period as Lender may permit in its discretion) prior to its effectiveness, (ii) any document, agreement or instrument evidencing or governing any Indebtedness that has been subordinated to the Obligations in right of payment or any Liens that have been subordinated in priority to the Liens of Lender unless such amendment, supplement, waiver or other modification is permitted under the terms of the subordination agreement applicable thereto, or (iii) any Material Contract, in each case, other than any amendment, supplement, waiver or modification (A) that is not materially adverse to the Secured Parties and (B) notice of which was received by Lender at least 5 Business Days (or such shorter period as Lender may permit in its discretion) prior to its effectiveness . Section 9.09. [Reserved] . Section 9 . 10 . Transactions with Affiliates . Each U . S . Loan Party will not to enter into or cause or permit to exist any arrangement, transaction or contract (including for the purchase, lease or exchange of property or the rendering of services) with any Affiliate (other than arrangements, transactions or contracts solely among the Loan Parties) except (a) on fair and reasonable terms no less favorable to such Loan Party or such Subsidiary than it could obtain in an arm's - length transaction with a Person that is not an Affiliate, (b) any transaction expressly permitted under this A 1 ticle IX, (c) the payment of reasonable and customary compensation for other officers and employees of the U . S . Loan Party in the ordinary course of business, and (d) provision ofreasonable and customary indemnification arrangements and benefit plans for officers and employees of the U . S . Loan Party . Section 9 . 11 . Restrictive A!!reements . E t c . Each Loan Party will not enter into any agreement (other than a Loan Document) prohibiting : (a) the creation or assumption of any Lien upon a U . S . Loan Party's properties, revenues or assets, whether now owned or hereafter acquired ; (b) the ability of such Person to amend or otherwise modify any Loan Document or waive, consent to or otherwise deviate from any provision under any Loan Document ; or (c) the ability of such Person to make any payments, directly or indirectly, to Borrower, including by way of dividends, advances, repayments of loans, reimbursements of management and other intercompany charges, expenses and accruals or other returns on investments . The foregoing prohibitions shall not apply to customary restrictions of the type described in clause (a) above (which do not prohibit the Loan Parties from complying with or performing the terms of this Agreement and the other Loan Documents) which are contained in any agreement, (i) for the creation or assumption of any Lien on the sublet or assignment of any leasehold interest of any Loan Party entered into in the ordinary course of business, (ii) for the assignment of any contract or licensed intellectual property entered into by any Loan Party in the ordinary course of business or (iii) for the transfer of any asset pending the close of the sale of such asset pursuant to a Disposition permitted under this Agreement . Section 9 .12. [Reserved] . Section 9.13. Changes in Business and Fiscal Year . (a) Each Loan Party will not modify or change its method of accounting, other than (i) as may be required to conform to GAAP or (ii) to the extent consented to by Lender.
44 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440O5F9C7DC1 (b) No Loan Party or any of its Subsidiaries shall (i) engage in the Business in a Core State except through the Florida Loan Parties or (ii) acquire or obtain any direct or indirect economic interest in any Person that engages in the Business in the Core State, other than (if otherwise permitted in this Agreement) the acquisition of equity or debt securities of any other Person that engages in the Business in an aggregate amount of not more than 1 . 00 % of the issued outstanding equity of such Person . For purposes of this section only, the use of the tenn " Affiliate" shall exclude those Entities that solely meet the Affiliate definition by being under common control with another Person . Section 9.14. Financial Covenants. (a) Liquidity . The Liquidity of the Florida Loan Parties, in the aggregate, shall not be less than $ 500 , 000 at any time, tested on the last Business Day of each fiscal quarter until Maturity, commencing with the fiscal quarter ending December 31 , 2022 . Section 9 . 15 . imitation on I suance of Stock . Each U . S . Loan Party shall not issue or sell, or enter into any agreement or arrangement for the issuance or sale of, any of its Capital Stock unless such issuance or sale (i) is upon fair and reasonable terms, (ii) does not result in a Change of Control, and (iii) otherwise complies with this Agreement and the other Loan Documents ; provided, how ever , RWB Florida OpCo shall not issue or sell, or enter into any agreement or arrangement for the issuance or sale of, any of its Capital Stock without the prior written consent of Lender in its sole discretion . ARTICLE X. EVENTS OF DEFAULT Section 10 . 01 . Listing of Events of Default . Each of the following events or occurrences described in this Section I 0 . 01 shall constitute an "Event of Default" : (a) on - Payment of Obli 2 . ations . (i) Borrower shall default in the payment of any principal of any Loan when such amount is due, any interest on any Loan or (ii) any Loan Party shall default in the payment of any other monetary Obligation and, in each case, such default shall continue unremedied for a period of five days after the any Loan Party receives notice or otherwise obtains actual knowledge of the occurrence thereof . (b) Breach of Representations or Warranties . Any representation or warranty by any Loan Party made or deemed to be made in any Loan Document (including any certificates delivered pursuant to this Agreement), is or shall be incorrect in any material respect when made or deemed to have been made . (c) on - Performance of Certain Covenants and Obligations . Any Loan Party shall default in the due performance or observance in any material respect of any of its obligations under Section 8 . 16 or 8 . 19 or Article IX , and such default shall continue unremedied for a period of 15 days after such Loan Party receives notice or otherwise obtains actual knowledge of the occurrence thereof . (d) [Reserved] . (e) on - Performance of Other Covenants and Obligations . Any Loan Party shall default in the due perfonnance or observance of any of its obligations in any material respect contained in any Loan Document executed by it (other than as specified in ections 10 . 0 l(a), 10 . 0 l(b) , and 10 . 0 l(c)) . and, in each of the foregoing instances, such default shall continue unremedied for a period of 20 days after such Loan Party receives notice or otherwise obtains actual knowledge of the occurrence thereof, provided that if the default is one that cannot be cured within the initial 20 - day cure period (even with the exercise
45 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 of commercially reasonable efforts and diligence), Loan Parties shall be afforded a reasonable amount of time not to exceed 60 days within which to cure such circumstance, so long as the Loan Parties take reasonable steps within the initial 20 - day cure period to cure such default and diligently pursue such cure to completion . (f) Default on Other Indebtedness . (i) a default shall occur in the payment of any amount when due (subject to any applicable grace, notice or cure period), whether by acceleration or otherwise, of any principal or stated amount of, or interest or fees on, any Indebtedness (other than the Obligations) of any U . S . Loan Party having a principal or stated amount, individually or in the aggregate, in excess of $ 100 , 000 , or a default shall occur in the performance or observance of any obligation or condition with respect to any such Indebtedness if the effect of such default is to accelerate the maturity of such Indebtedness or to permit the holder or holders of such Indebtedness, or any trustee or agent for such holders, to cause or declare such Indebtedness to become immediately due and payable, if, in each case, such default is not waived by the applicable Person within 30 days of such default, or (ii) any Indebtedness of any U . S . Loan Party having a principal or stated amount, individually or in the aggregate, in excess of $ 100 , 000 shall otherwise be required to be prepaid, redeemed, purchased or defeased, or require an offer to purchase or defease such Indebtedness to be made, prior to its expressed maturity), unless such amount is contested in good faith or paid off by the Loan Parties within 30 days . (g) Judgments . Any Judgment, in an amount (exclusive of any amounts covered by insurance (less any applicable deductible) and as to which the insurer has acknowledged its responsibility to cover such Judgment), individually or in the aggregate, in excess of $ 300 , 000 , shall be rendered or executed on against any U . S . Loan Party and such Judgment shall not have been vacated, discharged, stayed or bonded pending appeal, or otherwise paid off within 60 days after the entry thereof or enforcement proceedings shall have been commenced by any creditor upon such Judgment . (h) Bankruptcy. Insolvency. Etc . Any Loan Party shall: (i) fail to pay, or admit in writing its inability to pay, the Obligations as they become due ; (ii) apply for, consent to, or acquiesce in the appointment of a trustee, receiver, sequestrator, examiner or other custodian for any substantial part of the assets or other property of any such Person, or make a general assignment for the benefit of creditors ; (iii) in the absence of such application, consent or acquiesce to or permit or suffer to exist, the appointment of a trustee, interim receiver, receiver, receiver and manager, administrative receiver, custodian, liquidator, provisional liquidator, administrator, sequestrator or other like official for a substantial part of the property of any thereof, and such trustee, interim receiver, receiver, receiver and manager, administrative receiver, custodian, liquidator, provisional liquidator, administrator, sequestrator or other like official shall not be discharged within 75 days ; provided that each Loan Party hereby expressly authorizes each Secured Party to appear in any court conducting any relevant proceeding during such 75 - day period to preserve, protect and defend their rights under the Loan Documents ; (iv) permit or suffer to exist the commencement of any bankruptcy, reorganization, debt arrangement or other case or proceeding under any bankruptcy or insolvency law or other Insolvency Legislation or any dissolution, examinership, winding up or liquidation proceeding, in respect thereof, and, if any such case or proceeding is not commenced by such Person, such case or proceeding shall be consented to or acquiesced in by such Person, or shall result in the entry of an order for relief or shall remain for 75 days undismissed ; provided that each Loan Party hereby expressly authorizes each Secured Party to appear in any court conducting any such case or proceeding during such 75 - day
46 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 period to preserve, protect and defend their rights under the Loan Documents; or (v) take any action authorizing, or in furtherance of, any of the foregoing. (i) Impairment of Security . Etc . Any Loan Document or any Lien granted thereunder shall (except in accordance with its terms), in whole or in part, terminate, cease to be effective or cease to be the legally valid, binding and enforceable obligation of any Loan Party with respect to Collateral in an aggregate amount in excess of $ 100 , 000 , or any Loan Party or any other Person shall, directly or indirectly, contest or limit in any manner such effectiveness, validity, binding nature or enforceability . Except as permitted under any Loan Document, any Lien (subject only to Permitted Liens and Permitted Temporary Liens) securing any Obligation shall, in whole or in part, cease to be a perfected first - priority Lien with respect to Collateral with a value in an aggregate amount in excess of $ 100 , 000 (other than as a result of voluntary and intentional discharge of the Lien by Lender) . G) Change of Control . Any Change of Control shall occur . (k) Restraint of Operations : Loss of Assets . If any Loan Party is enjoined, restrained, or in any way prevented by court order or other Governmental Authority from continuing to conduct all or any material part of its business affairs or if any material portion of any Loan Party's assets is attached, seized, subjected to a writ or distress warrant, or is levied upon, or comes into the possession of any third Person and the same is not discharged before the earlier of 60 days after the date it first arises or five days prior to the date on which such property or asset is subject to forfeiture by such Loan Party . (I) Enforceme n t Action . If any Enforcement Action is taken or commenced by any Person and such Enforcement Action is not resolved to the satisfaction of Lender, in its sole discretion, by no later than (i) 45 days after such Enforcement Action is taken, or (ii) such legal proceeding is not dismissed within 90 days after the commencement of such proceeding . (m) Florida Cannabis License . If the Florida Cannabis License ceases to be valid, subsisting and in good standing, or if the Florida Cannabis License is withdrawn, cancelled, suspended (for more than 30 days) or adversely impaired (for more than 30 days) in a manner that would reasonably be expected to result in a Material Adverse Effect . (n) Other Proceedings . Any Loan Party (i) shall have been found guilty of an act of fraud with respect to any Collateral, or (ii) shall have become subject to any adverse, final, non - appealable judgment in any civil or criminal prosecution, enforcement, asset forfeiture or any other civil or criminal enforcement action or proceeding brought by any state or local Governmental Authority with respect to any alleged breach of State Cannabis Law or any local cannabis law ; and, with respect to any of the foregoing circumstances described in this clause (ii), if any of the foregoing can be corrected in the opinion of such Governmental Authority, such Person fails to take all corrective action required to satisfy, reinstate or otherwise address any alleged issues within the corrective action period, if any . (o) Change in Canriabis Law : Resn·icted Cannabis Activity . If a Change in • Cannabis Law shall occur, or any Loan Party shall engage in any Restricted Cannabis Activity in a manner that would reasonably be expected to result in a Material Adverse Effect . Section 10 . 02 . Remedies Upon E ent of Default . If any Event of Default under S ction I 0 . 01 (h) shall occur for any reason, whether voluntary or involuntary, al l of the outstanding principal amount of the Loans and other Obligations shall automatically be due and payable , in each case, without presentment , demand, protest or further notice of any kind , al l of which are hereby expressly waived by each Loan Party . If any Event of Default (other than any Event of Default under ection I 0 . 0 I (h)) shall
47 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 occur for any reason, whether voluntary or involuntary, and be continuing, Lender may declare all or any portion of the outstanding principal amount of the Loans and other Obligations to be due and payable, whereupon the full unpaid amount of such Loans and other Obligations that shall be so declared due and payable shall be and become immediately due and payable, in each case, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by each Loan Party . The Lender shall have all other rights and remedies available at law or in equity or pursuant to any Loan Documents . ARTICLE XI. [RESERVED). ARTICLE XII. MISCELLANEOUS Section 12 . 01 . Amendments and Waivers . Neither this Agreement nor any other Loan Document, nor any terms hereof or Lhereof, may be amemk< . l, suppkrnenle< . l, rnoJifieJ or waived excepl wilh lhe prior written consent of Lender ; and no amendment, modification or supplement of this Agreement or any other Loan Document shall be effective without the prior written consent of the applicable Loan Party(ies) unless otherwise expressly provided in this Agreement or such other Loan Document . Section 12.02. Notices and Other Communications . (a) General . Unless otherwise expressly provided herein, all notices and other communications provided for hereunder or under any other Loan Document shall be in writing . All such written notices shall be hand delivered, sent via nationally recognized overnight courier (e . g . , Federal Express), or send via electronic mail, as follows : (i) if to the Loan Parties, to the mailing address or electronic mail address specified for such Person on Schedule 12 . 02 . or to such other mailing address or electronic mail address as shall be designated by such party in a notice given in accordance with this Section 12 . 02 to the other parties ; and (ii) ifto Lender, to the following mailing address or electronic mail address : Viridescent Realty Trust, Inc . 1 0242 Greenhouse Rd . Bldg . 1201 Cypress, TX 77433 Attn : Steven Miller Email : [redacted] or to such other mailing address or electronic mail address as shall be designated by Lender in a notice given to Parent in accordance with this Section 1 2 . 0 2 . All such notices and other communications shall be deemed to be given or made upon the earlier to occur of (i) actual receipt by the relevant party hereto and (ii) (A) if delivered by hand or by overnight courier, when received by or on behalf of the relevant party hereto ; and ( 8 ) if delivered by electronic mail, when delivered if prior to 5 : 00 p . m . on a Business Day, and if delivered on any day that is not a Business Day or after 5 : 00 p . m . on a Business Day, on the next following Business Day .
48 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 (b) Reliance by Lender . Lender shall be entitled to rely and act upon any notices purportedly given by or on behalf of any Loan Party even if such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein . To the extent pennitted by Applicable Law, all telephonic communications with Lender may be recorded by Lender, and each of the parties hereto hereby consents to such recording . Section 12 . 03 . No aiver : Cumulative Remedies . No failure to exercise and no delay in exercising, on the part of Lender, any right, remedy, power or privilege hereunder or under the other Loan Documents shall operate 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 . The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law . Section 12 . 04 . Survival of Representations and Warranties . All representations and warranties made hereunder and in the other Loan Documents shall survive the execution and delivery of this Agreement, the other Loan Documents and the making of the Loans hereunder . Section 12 . 05 . Payment of Expense - sand Trues : Indemnification . Borrower agrees (a) to pay or reimburse Lender for all its costs and expenses reasonably incurred (including the reasonable fees, charges and disbursements of counsel) in connection with the exercise, enforcement or preservation of any rights under this Agreement, the other Loan Documents and any such other documents, or in connection with the Loans made hereunder, including all such costs and expenses incurred during any workout, restructuring or negotiations in respect of such Loan (except that Borrower shall not be liable for the payment or reimbursement of Lender's attorneys' fees and costs incurred in a lawsuit in which such Borrower is the prevailing party and Lender is the losing party), (b) to pay, indemnify, and hold harmless Lender from any and all Other Taxes, if any, that may be payable or determined to be payable in connection with the execution and delivery of, or consummation or administration of any of the transactions contemplated by, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Agreement, the other Loan Documents and any such other documents, and (c) to pay, indemnify and hold harmless Lender and its Related Parties from and against any and all other liabilities, obligations, losses, damages, fines, fees, penalties, actions, judgments, suits, and reasonable costs, expenses or disbursements of any kind or nature whatsoever, including reasonable fees, disbursements and other charges of counsel, with respect to the negotiation, execution, delivery, enforcement, performance and administration of this Agreement, the other Loan Documents and any such other documents, including any of the foregoing relating to a breach by any Loan Party of any representation or wan - anty or covenant in any Loan Document or the violation of, noncompliance with or liability under, any Environmental Law or any actual or alleged presence of Hazardous Materials applicable to the operations of each Loan Party, any of their respective Subsidiaries or any of their Real Property (all the foregoing in this clause (c), collectively, the "Indemnified Liabilities") ; provided that the Loan Parties shall not have any obligation hereunder to Lender or any of its Related Pai 1 ies with respect to Indemnified Liabilities arising from the gross negligence or willful misconduct of the party to be indemnified as determined by a final and non - appealable decision of a court of competent jurisdiction . The agreements in this ection 12 . 05 shall survive repayment of the Loan and all other amounts payable hereunder and termination of this Agreement . To the fullest extent permitted by Applicable Law, no Loan Party shall assert, and each Loan Party hereby waives, any claim against Lender and its Related Parties, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, the Loan or the use of the proceeds thereof . None of Lender or its Related Parties shall be liable for any damages arising from the use by unintended recipients of any infonnation or other materials distributed by it through telecommunications, electronic or other information transmission
49 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby, except to the extent any such damages arose from the gross negligence or willful misconduct of Lender or such Related Person as determined by a final and non - appealable decision of a court of competent jurisdiction . Section 12 . 06 . Successors and Ass i ans . The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby ; provided, however, no Loan Party may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of Lender (and any attempted assignment or transfer by any Loan Party without such consent shall be null and void) . Lender may sell, assign, transfer, negotiate or grant participations in all or any part of, or any interest in, or any right or remedy under, the Obligations and the Loan Documents (a "Loan Sale") without the consent of the Borrower ; provided, however, if Lender proposes to consummate in a Loan Sale which (i) is not part of a sale of all or substantially all of the outstanding loans held by Lender and (ii) if consummated, would result in Lender being the holder of less than 50 . 00 % of the outstanding principal balance of the Loans hereunder, then Lender shall provide at least fifteen (I 5 ) Business Days' prior written notice (a "Loan Sale Notice") of such proposed Loan Sale to Borrower, and the Loan Parties shall have a right of first refusal to repurchase the Obligations and as applicable, the Loan Documents (the "ROFR"), on the same terms as the proposed Loan Sale to the third parties (the "Applicable Terms") . The Loan Parties shall have fifteen (I 5 ) Business Days from receipt of a Loan Sale Notice to exercise the ROFR by providing written notice of exercise to Lender during such period . lfno Loan Party exercises its ROFR within such fifteen ( 15 ) Business Day period, or ifthe Loan Parties timely exercise the ROFR but fail to perform or comply with the Applicable Terms in any material way, the Loan Parties shall automatically forfeit the ROFR and Lender may consummate the proposed Loan Sale as contemplated to the third parties . Section 12 . 07 . Pledge of Loan . The Loan Parties hereby acknowledge that the Lender and its Affiliates may pledge the Loan as collateral security for loans to Lender or its Affiliates . The Loan Parties shall, to the extent commercially reasonable, cooperate with the Lender and its Affiliates to effect such pledges at the sole cost and expense of Lender . Notwithstanding the foregoing, no pledge shall release the Lender from any of its obligations hereunder . Section 12 . 08 . Set - off . After the occurrence and during the continuance of an Event of Default, in addition to any rights and remedies of Lender provided by law, Lender shall have the right, without prior notice to Borrower or any other Loan Party, any such notice being expressly waived by the Loan Parties to the extent permitted by Applicable Law, upon any amount becoming due and payable by any Loan Party hereunder (whether at the stated maturity, by acceleration or otherwise) to set - off and appropriate and apply against such amount any and all deposits (general or special, time or demand, provisional or final, but excluding the Excluded Accounts), and any other credits, indebtedness or claims, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by Lender to or for the credit or the account of any Loan Party, as the case may be . Lender agrees promptly to notify Parent after any such set - off and application made by Lender ; provided that the failure to give such notice shall not affect the validity of such set - off and application . Section 12.09. Counterparts. (a) This Agreement and each other Loan Document may be executed in any number of counterpart signature pages, and hy the different parties on different counterparts, each of which when executed shall be deemed an original but all such counterparts taken together shall constitute one and the same instrument . This Agreement will be deemed executed by the parties hereto when each has signed it and delivered its executed signature page to Lender by electronic transmission or physical delivery . Delivery of an executed counterpart of a signature page of this Agreement by facsimile or in electronic
50 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440O5F9C7DC1 format shall be effective as delivery of a manually executed counterpart of this Agreement. (b) The words "execution," "signed," "signature," and words of like import in any Loan Document shall be deemed to include electronic signatures (e . g . , www . docusign . com) or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper - based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York Electronic Signatures and Records Act, and any other similar state laws based on the Uniform Electronic Transactions Act . (c) Although this Agreement, each other Loan Document, and each certificate delivered under the Loan Documents shall be valid and effective if executed electronically, each Loan Party agrees, at any time hereafter, to deliver to Lender a manually executed copy of this Agreement, each other Loan Document, and each certificate delivered under the Loan Documents within five days of Lender's written demand therefor . Section 12 . 10 . everabi lity . Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction . Section 12 . 11 . Integration . This Agreement and the other Loan Documents represent the entire agreement of the Loan Parties and Lender with respect to the subject matter hereof, and there are no promises, undertakings, representations or warranties by any party hereto or thereto relative to the subject matter hereof not expressly set forth or referred to herein or in the other Loan Documents . Without limiting the generality of the foregoing, this Agreement and the other Loan Documents supersedes all prior term sheets and letters of intent with respect to the Loans . Section 12 . 12 . GOVERNING LAW . THIS AGREEMENT, THE OTHER LOAN DOCUMENTS (UNLESS EXPRESSLY PROVIDED OTHERWISE THEREIN) AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO CONFLICTS OF LAW PROVISIONS WHICH WOULD RESULT IN THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION . Section 12 . 13 . SUBMISSION TO JURISDICTION : WAIVERS . EACH LOAN PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY : (a) SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NON - EXCLUSIVE JURISDICTION OF ANY STATE COURT SITTING IN THE STATE OF NEW YORK, IN THE COUNTY OF NEW YORK, AND THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE LOAN PARTIES HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE EXTENT PERMITTED BY APPLICABLE LAWS, IN SUCH FEDERAL COURT . EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED JN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER
51 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 MANNER PROVIDED BY APPLICABLE LAWS . NOTHING IN THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR OTHERWISE SHALL AFFECT ANY RIGHT THAT LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST ANY LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION IN CONNECTION WITH THE EXERCISE OF ANY RIGHTS UNDER ANY SECURITY DOCUMENT OR THE ENFORCEMENT OF ANY JUDGMENT . (b) AGREES NOT TO PLEAD OR CLAIM AND WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAWS, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN ECTION 12 . 13 (A) . EACH LOAN PARTY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN IMPROPER OR INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT ; (c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO THE APPLICABLE LOAN PARTY AT ITS ADDRESS SET FORTH IN SCHEDULE 12 . 02 OR AT SUCH OTHER ADDRESS OF WHICH LENDER SHALL HA VE BEEN NOTIFIED PURSUANT TO SECTION 12 . 02 . NOTHING IN THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT WILL AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW ; (d) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BYLAW, ALL RIGHTS OF RESCISSION AND SETOFF IN CONNECTION WITH THE REPAYMENT OF THE OBLIGATIONS ; AND (e) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BYLAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR PROCEEDING REFERRED TO IN THIS SECTION 12 . 13 ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES . ADDITIONALLY, LENDER HEREBY WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HA VE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR PROCEEDING REFERRED TO IN THIS SECTIO t 12.13 ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES. Section 12.14. Acknowledgments . Each Loan Party hereby acknowledges that: (a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents ; (b) Lender does not have any fiduciary relationship with or duty to the Loan Parties arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between Lender, on one hand, and the Loan Parties, on the other hand, in connection herewith or therewith is solely that of creditor and debtor ; and (c) no joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby among the Loan Parties and Lender .
52 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 Section 12 . 15 . WAIVERS OF JURY TRIAL . THE LOAN PARTIES AND LENDER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN . Section 12 . 16 . Confidentiality . Lender shall hold all non - public infonnation relating to any Loan Party or any Subsidiary of any Loan Party obtained pursuant to the requirements of this Agreement ("Confidential Information") confidential in accordance with its customary procedure for handling confidential information of this nature and (in the case of a Lender that is a bank) in accordance with safe and sound banking practices (it being understood that each Person that becomes a party to this Agreement as a "Lender" after the Closing Date will be informed of the confidential nature of such infonnation and bound by this Section 12 . 16 ) ; provided that Confidential Information may be disclosed by Lender : (a) as required or requested by any govermnental or regulatory agency or representative thereof ; (b) if and to the extent required pursuant to legal or regulatory process; (c) as reasonably required in connection with the enforcement of any rights or exercise of any remedies by Lender under this Agreement or any other Loan Document or any action or proceeding arising out of or relating to this Agreement or any other Loan Document ; (d) to Lender's attorneys, professional advisors, accountants, independent auditors, clients, service providers or Affiliates : provided that such recipient is bound by an obligation not to disclose such Confidential Information, (e) in connection with: (i) the establishment of any special purpose funding vehicle with respect to the Loan, (ii) any pledge permitted under ection 12.07 ; (iii) any prospective assignment of, or participation in, its rights and obligations pursuant to Section 12 . 06 , to prospective assignees or participants, as the case may be (it being understood that each such Persons will be informed of the confidential nature of such information and instructed to keep such information confidential on the same terms as this ection 12 . 16 ) : or (iv) any actual or proposed credit facility for loans, letters of credit or other extensions of credit to or for the account of Lender or any of its Affiliates, to any Person providing or proposing to provide such loan, letter of credit or other extension of credit or any agent, trustee or representative of such Person (it being understood that each such Persons will be informed of the confidential nature of such infonnation and instructed to keep such information confidential on the same terms as this ection 12 . I 6 ) ; (f) to any rating agency; (g) with the consent of Parent; or (h) to the extent required, or to the extent counsel Lender reasonably determines is required to be disclosed in connection with any public filing by Lender;
53 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 Notwithstanding the foregoing, Lender and its Affiliates shall have the right to publicize on their websites, for general marketing and related promotional purposes, its relationship to the Loan Parties and the fact that Lender has extended the Loans to the Loan Parties (the "Promotional Rights"), and, in connection therewith, each Loan Party hereby grants to Lender and its Affiliates a royalty free, non exclusive limited license to use such Loan Party's name and logos, now existing or hereafter acquired, for that purpose ; provided, neither Lender or any of its Affiliates shall publicize to the media any confidential information in respect of the Borrower without the express written prior consent of Borrower . Notwithstanding the foregoing, Lender shall not have any obligation to keep information confidential if such information : (i) is or becomes public from a source other than Lender, or one of Lender's Affiliates, consultants or legal or financial advisors in breach of this Agreement, (ii) is, was or becomes known on a non - confidential basis to or discovered by an Lender or any of its Affiliates, consultants or legal or financial advisors independently from communications by or on behalf of any Loan Party, or (iii) is independently developed by Lender without use of such confidential information . provided that, the source of such information was not known to be bound by a confidentiality agreement with (or subject to any other contractual, legal or fiduciary obligation of confidentiality to) the relevant Loan Party . Section 12 . 17 . Pre ss Relt : a si :: s . Etc . Ext .: t : pl if am] lo Lht :: exlenl re 4 uirt : c . l by Applirnble Law or requested by any governmental or regulatory agency, each party will not, and will not permit any of its respective Subsidiaries, directly or indirectly, to publish any press release or other similar public announcements (including any marketing materials) regarding this Agreement, the other Loan Documents, or any of the Transactions, without the consent of the other parties, which consent shall not be unreasonably withheld . Nothing in this paragraph shall prohibit Lender from exercising its Promotional Rights, subject to any restrictions contained in eclion 12 . 16 herein . Section 12 . 18 . Releases of Guarantees and Liens . At such time as the Loans and the other Obligations (other than Unasserted Contingent Obligations) shall have been indefeasibly paid in full, the Collateral shall be released from the Liens created by the Security Documents, and the Security Documents and all obligations (other than those expressly stated to survive such termination) of Lender and each Loan Party under the Security Documents shall terminate, all without delivery of any instrument or performance of any act by any Person . At such time, Lender will, at Borrower's expense, execute and deliver to the applicable Loan Party such documents as such Loan Party may reasonably request to evidence the release of such Collateral or guarantee obligation from the assignment and security interest granted under the Security Documents, in each case in accordance with the terms of the Loan Documents and this Section 12 . 18 . Section 12 . 19 . USA Patriot Act . Lender hereby notifies each Loan Party that pursuant to the requirements of the Patriot Act, it may be required to obtain, verify and record information that identifies the Loan Parties, which information includes the name and address of each Loan Party and other information that will allow Lender to identify each Loan Party in accordance with the Patriot Act . Each Loan Party agrees to provide all such information to Lender upon request at any time, whether with respect to any Person who is a Loan Party on the Closing Date or who becomes a Loan Party thereafter . Section 12 . 20 . No Fiduciarv Dutv . Each Loan Party, on behalf of itself and its Subsidiaries, agrees that in connection with all aspects of the transactions contemplated hereby and any communications in connection therewith, the Loan Parties, their respective Subsidiaries and Affiliates , on the one hand , and Lender and its Affiliates, on the other hand, will have a business relationship that does not create, by implication or otherwise, any fiduciary duty on the part of Lender or its Affiliates, and no such duty will be deemed to have arisen in connection with any such transactions or communications .
54 DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 Section 12 . 21 . Authorized Officers . The execution of any certificate requirement hereunder by an Authorized Officer shall be considered to have been done solely in such Authorized Officer's capacity as an officer of the applicable Loan Party (and not individually) . Notwithstanding anything to the contrary set forth herein, Lender and each of the other Secured Parties shall (a) be entitled to rely and act on any certificate, notice or other document delivered by or on behalf of any Person purporting to be an Authorized Officer of a Loan Party unless Lender shall have received prior written notice to the contrary from Parent and (b) have no duty to inquire as to the actual incumbency or authority of such Person . Section 12 . 22 . Subordination of Intercom pany Indebtednes s and Leases . The Loan Parties hereby agree that : (a) all present and future Indebtedness of any Loan Party (or its Subsidiaries or other Affiliates) to any other Loan Party (or its Subsidiaries or other Affiliates) are hereby and shall be subordinate and junior in right of payment and priority to the Obligations, and each Loan Party (for itself and on behalf of its Subsidiaries and Affiliates) agrees not to make, demand, accept or receive any payment in respect of any such Indebtedness, including any payment received through the exercise of any right of setoff, counterclaim or cross claim, or any collateral therefor, unless and until such time as the Obligations shall have been indefeasibly paid in full . Without in any way limiting the foregoing, in any Insolvency Event, or any receivership, liquidation, reorganization, dissolution or other similar proceedings relative to any Loan Party or to its businesses, properties or assets, Lender shall be entitled to receive payment in full of all of the Obligations before any Loan Party shall be entitled to receive any payment in respect of any such Indebtedness . (b) all present and future leases of any Mortgaged Real Prope 1 ty, and all leasehold estates and interests relating to a Mortgaged Real Property, and all of the rights of the tenant(s) thereunder (including a Loan Party or its Subsidiaries or Affiliates), are hereby and shall be subordinate and subject to the Mortgages and any other Liens of Lender on a Mortgaged Real Property, as ifthe Mortgages had been executed, delivered and recorded prior to the execution of the applicable lease or the creation of the applicable leasehold estate or interest . Section 12 . 23 . Tax Treatment . Borrower and Lender agree that the Loans are indebtedness of Borrower for U . S . federal income Tax purposes . Each party to this Agreement agrees no t to take any Tax position inconsistent with such Tax characterization and shall not report the transactions arising under this Agreement in any manner other than the issuance of debt obligations on all applicable Tax returns unless otherwise required by a final determination within the meaning of Section I 3 l 3 (a) of the Code (or a similar final determination under applicable state or local law) . [Signature Page Follows]
DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 [Signature Page to Loan Agreement] IN WITNESS WHEREOF, the undersigned parties have caused this Loan Agreement to be executed as of the date first set forth above. LENDER: VIRIDESCENT REALTY TRUST INC. BORROWER: RWB FLORIDA, LLC By - : ' -- 93'38F1 0B9181ii7f ... Print: : Steven M1 I er By: - ' -- B 9Jl24 F6ll9542440A. Print: raa Rogers Title: CIO Title: CEO RED WHITE & BLOOM BRANDS INC . GUARANTORS: RED WHITE & BLOOM FLORIDA INC. By: - '= B62 0 4Fl>!195'124,10A. , Print: Br a Rager s By: -- ..;:=:_ 86 2fF689542440A Print : B rad Rogers Title : CEO Title C : = E = O _ PHARMACO, INC . /s/ "Brad Rogers" B : c= - B - 6 - 24 - F6 - 89 - 54 24 - 40 - A - .. ------ Print: B r ad Rogers Title: CEO /s/ "Steven Miller" /s/ "Brad Rogers" /s/ "Brad Rogers" /s/ "Brad Rogers"
DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - MD4 - 440D5F9C7DC1 SCHEDULES TO LOAN AGREEMENT [attached]
DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 Schedule 7.01 Loan Parties Clearwater, Florida 33756 NIA [redacted] - [redacted] [redacted] Tax I.D. NIA NIA NIA Florida Other States Where Qualified to do Business British Columbia, Canada Michigan Florida Delaware State of Organization 789 West Pender Street Suite 810 Vancouver, BC V6C I H2 Canada 22000 Northwestern Highway, Southfield, MI 48075 611 S Ft. Harrison Ave, #438 Clearwater, Florida 33756 6 I I S Ft. Harrison Ave, #438 Princigal Address Red White & Bloom Brands Inc. Pharmaco Inc. Red White & Bloom Florida Inc. RWB Florida LLC Full Le2:al Name
DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 Schedule 7 . 1 2 Capitalization Classes of Capital Stock Loan Party (Issuer) RWB Florida LLC Membership Total Issued / Authorized 500 /500 Percentage of Class Owned 100% Certificated? Yes Percentage of Loan Party Owned 81.17% Membership 311.7 / 500 62% No 81.17% Class A Interests Class B Interests Owner(s) Red White & Bloom Brands, Inc. Red White & Bloom Brands, Inc. Membership 188.4 / 500 Other Members 38% No 18.83% Class B Interests 118.62 / I 18.62 RWB Florida LLC 100% Yes 100% Red White & Bloom Florida Inc. Non - Voting Common Stock 79.38 / 79.38 RWB Florida LLC 100% Yes 100% Voting Common Stock Pharmaco, Inc. Common Stock 50,000 I 50,000 100% No 100% Red White & Bloom Brands, Inc. Preferred Stock 30,000 I 30,000 100% No 100% Red White & Bloom Brands, Inc.
Account Number Routing Financial Institution Accoun1 H o 'l der( s ) Number Name and Address - - - [redacted] - - - - - - - - - - Red White & Bloom Florida, Inc Red White & Bloom Florida, Inc Red White & Bloom Florida, Inc Red White & Bloom Florida, Inc Red White & Bloom Florida, Inc Red White & Bloom Florida, Inc Red White & Bloom Florida, Inc Red White & Bloom Florida, Inc Red White & Bloom Florida, Inc Red White & Bloom Florida, Inc Red White & Bloom Florida, Inc Red White & Bloom Florida, Inc Red White & Bloom Florida, Inc RWB Florida, LLC DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 Schedule 7.25 Deposit and Securities Accounts
Electronic Mail Address M a iling Addres s Loan Party [redacted] 611 S Ft. Hanison Ave, #438 Clearwater, Florida 33756 Attn : Donna Burkett RWB Florida LLC [redacted] 611 S Ft. Harrison Ave, #438 Clearwater, Florida 33756 Attn: Donna Burkett Red White & Bloom Florida Inc . [redacted] 22000 Northwestern Highway, Southfield, MI 48075 Pharmaco Inc. [redacted] 789 West Pender Street Suite 810 Vancouver, BC V6C I H2 Canada Attn: Chief Executive Officer Red White & Bloom Brands Inc . DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 Schedule 12.02 Notice Addresses
DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 EXHIBIT A FORM OF COMPLIANCE CERTIFICATE [attached]
DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 [DATE] COMPLIANCE CERTIFICATE Viridescent Realty Trust, Inc. [mailing address] Attn: [ E - mail: .. _. Ladies and Gentlemen, Reference is made to that certain Loan Agreement, dated [ ] (as amended and in effect on the date hereof, the "Loan Agreement" ; capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to such terms in the Loan Agreement), among Viridescent Realty Trust, Inc . ("Lender"), RWB Florida, LLC, a Delaware limited liability company, the other Loan Parties from time to time party thereto . The undersigned is the chief financial officer or, in the absence ofa chief financial officer, another Authorized Officer of Parent, and hereby certifies to Lender, on behalf of the Loan Parties, as follows : 1. No Default or Event of Default is known to the Loan Parties to exist as of the date hereof, other than : . [IF NONE, SO STATE] . [IF APPLICABLE : Attached hereto as Schedule A are the details underlying such Default or Event of Default, and the actions taken and/or to b e taken with respect thereto] . 2. No Default or Event of Default is known to the Loan Parties to have occurred (whether or not continuing as of the date hereof) since the date the most recent Compliance Certificate was delivered to Lender, other than : . [IF NONE, SO STATE] . [IF APPLICABLE : Attached hereto as Schedule Bare the details underlying such Default or Event of Default, and the actions taken and/or to be taken with respect thereto] . 3. Attached hereto as Schedule C are true, correct and complete copies of the financial information required under Sections 8 . 0 l(a) and 8 . 0 l(b) of the Loan Agreement (collectively, the "Financial Information") . The undersigned is familiar with, and either prepared or reviewed (with the preparers), the Financial Information . To the knowledge of the Loan Parties, the Financial Information presents fairly in all material respects the financial condition, results of operations and cash flows of each Loan Party and its Subsidiaries in accordance with GAAP at the respective dates of such infonnation and for the respective periods covered thereby, subject in the case ofunaudited financial information, to changes resulting from normal year - end audit adjustments and to the absence of footnotes . 4. Since the most recent Compliance Certificate was delivered to Lender, no U . S . Loan Party has sold or leased any Mortgaged Property, other than : [IF NONE, SO STATE] . [IF APPLICABLE : Attached hereto as Schedule D are a true and correct copies of all deeds, leases and other instruments and agreements evidencing such sales and leases] 5. Since the most recent Schedule 7.25 to the Loan Agreement was delivered to Lender on , no Florida Loan Party has opened or closed a deposit account or security account, other than: [IF NONE, SO STATE]. [IF APPLICABLE: Attached hereto is an updated Schedule 7.25 to the Loan Agreement, which is correct and complete as of the date hereof.] 6. [IF APPLICABLE UNDER SECTION 9.14 OF THE LOAN AGREEMENT: Attached
DocuSign Envelope ID: 5E5C7577 - 7972 - 4226 - AAD4 - 440D5F9C7DC1 hereto as Schedule E are the details underlying the calculations for following Financial Performance Covenants: (a) The Liquidity of the Florida Loan Parties as of the fiscal quarter ending is$ Very truly yours, RED WHITE & BLOOM BRANDS INC. By: Print: Title: [Signature Page to Compliance Certificate]
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