Security Agreement, dated March 11, 2020, by and among Acreage IP Holdings, LLC and IP Investment Company, LLC

This SECURITY AGREEMENT is made and entered into as of March __, 2020, by ACREAGE IP HOLDINGS, LLC, a Nevada limited liability company (the “Grantor”) and IP INVESTMENT COMPANY, LLC, a Delaware limited liability company (the “Secured Party”).

WHEREAS, Acreage Finance Delaware, LLC (the “Borrower”) and the Secured Party are parties to a Credit Agreement, dated as of the date hereof (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”) and the Grantor has given a Guaranty (the “Guaranty”) of certain obligations of Borrower under the Credit Agreement. Guarantor’s obligations under such Guaranty are referred to herein as the “Obligations.”

WHEREAS, the Secured Party is making a loan to the Borrower as of the date hereof; and

WHEREAS, it is a condition precedent to the obligation of the Secured Party to make such loan that the Grantor shall have executed and delivered this Security Agreement to the Secured Party.

NOW, THEREFORE, in consideration of the premises and to induce the Secured Party to make such loan, the Grantor hereby agrees with the Secured Party, as follows:

1.Defined Terms. Unless otherwise defined herein, terms which are defined in the Credit Agreement and used herein are so used as so defined:

“Collateral” shall mean the Trademarkss

“Trademarks” shall mean the trademark registrations and applications set forth on Schedule 1 hereto and all issuances, extensions, and renewals thereof, together with the goodwill of the business connected with the use of, and symbolized by, the Trademarks, which in each case are for use solely outside of the United States or any of its territories. For the avoidance of doubt, the term Trademarks shall not include any of the foregoing for use in the United States or any of its territories.

2.Grant of Security Interest. As collateral security for the prompt and complete payment and performance when due of the Obligations, the Grantor hereby grants to the Secured Party, a security interest in the Collateral.

3.Representations and Warranties. The Grantor hereby represents and warrants (in addition to its representations and warranties under the Credit Agreement) that:

a.Title; No Other Liens. Except for the security interest granted to the Secured Party for the ratable benefit of the Secured Parties pursuant to this Security Agreement, the Grantor owns or has the power to transfer rights in each item of the Collateral free and clear of any and all Liens or claims of others, other than Permitted Liens.

b.Perfected First Priority Liens. The Liens granted pursuant to this Security Agreement will, upon the filing of financing statements against Grantor with the Secretary of State of Nevada, constitute a perfected security interest in the Collateral, for the ratable benefit of the Secured Parties, which are prior to all other Liens on the Collateral in existence on the date hereof, other than Permitted Liens.

c.Power and Authority; Authorization. The Grantor has the limited liability company power and authority and the legal right to execute and deliver, to perform its obligations under, and to grant the security interest on the Collateral pursuant to, this Security Agreement and has taken all necessary limited liability company action to authorize its execution, delivery and performance of, and grant of the security interest in the Collateral pursuant to, this Security Agreement.

4.Covenants. The Grantor covenants and agrees with the Secured Party that, from and after the date of this Security Agreement until the Obligations are paid in full:

a.Notices; Further Documentation; Authorization to File Financing Statements. The Grantor notifies the Secured Party in writing at any time that it acquires any type of Collateral to the extent the Secured Party will not at that time have, a perfected first priority security interest in (subject to Permitted Liens) in such Collateral. At any time and from time to time, upon the written request of the Secured Party, and at the sole expense of the Grantor, promptly execute and deliver such further instruments, agreements and documents and take such further action as the Secured Party may reasonably request for the purpose of maintaining Secured Party’s security interest in the Collateral.

b.Limitation on Liens on Collateral. The Grantor will not create, incur or permit to exist, will defend the Collateral against, and will take such other action as is necessary to remove, any Lien on the Collateral, other than Permitted Liens.

5.Performance by Secured Party of Grantor’s Obligations. If the Grantor fails to perform or comply with any of its agreements contained herein and the Secured Party, as provided for by the terms of this Security Agreement, shall itself perform or comply, or otherwise cause performance or compliance, with such agreement, the expenses of the Secured Party incurred in connection with such performance or compliance, shall be payable by the Grantor to the Secured Party within 30 days after demand therefor and shall constitute Obligations secured hereby.

6.Remedies. If any Event of Default shall occur and be continuing, all applicable notice and cure periods have expired, and all required notice and other prerequisite conditions in the Credit Agreement have been satisfied, the Grantor shall execute and deliver to the Administrative and Collateral Agent or the Lender (as set forth in the Credit Agreement) an assignment or assignments of all of the Collateral in the form of Exhibit A and such other documents and take such other actions as are necessary or appropriate to carry out the intent and purposes hereof. If an Event of Default shall occur and be continuing and all applicable notice and cure periods shall have expired, and all required notice and other prerequisite conditions in the Credit Agreement have been satisfied, the Secured Party may exercise all rights and remedies granted to it in the Credit Agreement.

7.Severability. Any provision of this Security Agreement which 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.

8.Paragraph Headings. The paragraph headings used in this Security Agreement are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof.

9.No Waiver; Cumulative Remedies. The Secured Party shall by any act (except by a written instrument pursuant to Section 10 hereof), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Potential Default or Event of Default or in any breach of any of the terms and conditions hereof. No failure to exercise, nor any delay in exercising, on the part of the Secured Party, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by the Secured Party of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which such holder would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any rights or remedies provided by law.

10.Waivers and Amendments; Parties Bound; Governing Law. None of the terms or provisions of this Security Agreement may be waived, amended, supplemented or otherwise modified except by a written instrument executed by the Grantor and the Secured Party. This Security Agreement shall be binding upon the successors and permitted assigns of the Grantor and shall inure to the benefit of the Secured Party and its permitted successors and assigns. THIS SECURITY AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF DELAWARE     WITHOUT REGARD TO ANY CONFLICTS OF LAWS PROVISIONS THEREOF.

11.Notices. All notices hereunder to the Grantor or the Secured Party to be effective shall be in writing (including by telecopy), and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered or sent in the manner and to the respective addresses as provided in the Loan Documents.

12.Counterparts. This Security Agreement may be executed by one or more of the parties to this Security Agreement on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Security Agreement by facsimile or in Electronic Format is as effective as delivery of a manually executed counterpart of this Security Agreement, provided that Secured Party retains the right to require delivery of an original signature page in addition to any signature delivered via Electronic Format.

IN WITNESS WHEREOF, the Grantor and the Secured Party have caused this Security Agreement to be duly executed and delivered as of the date first above written.