First Amendment to Secured Convertible Note, dated as of January 13, 2022, by and among Clever Leaves Holdings Inc. and Catalina LP

Exhibit 10.1

FIRST AMENDMENT TO SECURED CONVERTIBLE NOTE

THIS FIRST AMENDMENT AGREEMENT is made as January 13, 2022.

WHEREAS, reference is made to the Secured Convertible Note issued July 19, 2021 (the “Note”) issued by Clever Leaves Holdings Inc. (the “Company”) in favor of Catalina LP (the “Holder”); and

WHEREAS, the parties wish to amend the Note in accordance with the terms and conditions of this first amendment agreement (this “First Amendment Agreement”).

NOW, THEREFORE, in consideration of the premises and mutual agreements contained in this Agreement and in the Note, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree, as follows:

1.  DEFINITIONS. All capitalized terms not otherwise defined herein (including the recitals above) are used as defined in the Note.

2.  ACKNOWLEDGMENT. Each of the Company and the Holder hereby acknowledge and agree that, as of the date of this First Amendment Agreement, there have been a total of $5,559,285.60 in redemptions of Principal (with 720,085 Common Shares being issued to the Holder) made in accordance with Section 4 of the Note, and accordingly pursuant to Section 4(c)(i) of the Note, further redemptions made in accordance with Section 4 of the Note from the date hereof through and including July 19, 2022 shall not exceed an additional $6,940,714.40 of Principal in aggregate.

3.  TEMPORARY AMENDMENT.

(a)  The amendments contemplated by this Section 3 of the First Amendment Agreement shall expire, and be of no further force or effect, at 11:59 p.m. on July 19, 2022 (i.e., one (1) year after the Issuance Date), and from and after that date the original terms of the Note shall apply.

(b)  Subject to Section 3(a) above, as of the date hereof, the Note is hereby amended as follows:

(i)  Section 4(b) of the Note is deleted in its entirety, and replaced with the following:

(ii)  Section 4(c)(ii) is deleted in its entirety, and replaced with the following:

“(ii) The Company shall not be entitled to deliver an Optional Redemption Notice for the redemption of all or any portion of the Notes for Common Shares prior to July 19, 2022. Neither party shall be entitled to deliver an Optional Redemption Notice for the redemption of all or any portion of the Notes for Common Shares if at the time the Registration Statement is not effective.”

(iii)  The following is added as Section 4(c)(iii) of the Note:

“(iii) In addition to the limitations provided for in Section 4(c)(i) and (ii), unless otherwise agreed to by the parties and subject to the rules and regulations of the Principal Market,

(w)  from and after February 1, 2022, the Holder may redeem up to an aggregate amount of US$2,000,000 (the “Base Redemption Amount”) on any day during a calendar month at the Optional Redemption Price;

(x)  from and after February 1, 2022, the Holder may redeem up to an additional US$1,500,000 (the “Additional Redemption Amount”) on any day during a calendar month provided that the price for any such redemptions shall be equal to the greater of (i) US$4.60 and (ii) an 8% discount to the 4-day VWAP (subject to adjustment as provided herein);

(y)  it is acknowledged and agreed that no redemptions under the Note were made between November 23, 2021 and the date hereof, and the Company and the Holder have agreed that from the date hereof to January 31, 2022:

(A) the Holder may redeem up to US$4,000,000 (the “Make-Up Base Redemption Amount”) during that period, provided such redemptions occur at the Optional Redemption Price; and

(B) the Holder may redeem up to an additional US $3,000,000 (the “Make-Up Additional Redemption Amount”) during that period, provided that the price for any such additional redemptions shall be equal to the greater of (i) US$4.60 and (ii) an 8% discount to the 4-day VWAP (subject to adjustment as provided herein).

(z)  notwithstanding the foregoing, if the full amount of Base Redemption Amount, Additional Redemption Amount, Make-Up Base Redemption Amount or Make-Up Additional Redemption Amount in an applicable calendar month is not redeemed, the Holder may redeem the aggregate amount of the unused portion of the Base Redemption Amount, Additional Redemption Amount, Make-Up Base Redemption Amount or Make-Up Additional Redemption Amount at any time in the future;

(iv)  The following definition of “4-day VWAP” is added to Section 32 of the Note:

“4-day VWAP” means the lowest of the volume-weighted average trading price of the Common Shares on the Principal Market, during the period beginning at 9:30 a.m., New York time, and ending at 4:00 p.m., New York time, as reported by Bloomberg through its “VAP” function (set to 09:30 start time and 16:00 end time) on each of the three (3) trading days prior to and plus the date of the Optional Redemption Notice.”

(v)  The definition of “Optional Redemption Price” in Section 32(cc) of the Note is deleted in its entirety and replaced with the following:

““Optional Redemption Price” means, as of the date of determination, the greater of (i) a price per Common Share that is equal to an 8% discount to the 4-day VWAP and (ii) US$2.208, subject to adjustment as provided herein.”

4.  AMENDMENT

(a)  As of the date hereof, the Note is hereby amended as follows:

(i)  Section 32(g) is deleted in its entirety, and replaced with the following:

“(g) “Change of Control” means (a) the consummation of any transaction (including without limitation, any merger or consolidation) the result of which is that any “person” (as that term is used in Section 13(d)(3) of the Exchange Act) of 1934, as amended (the “Exchange Act”) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the ordinary voting power for the election of directors of the Company ; or (b) at any time, the Company shall cease to own, directly or indirectly, legally and beneficially, one hundred percent (100%) of the issued and outstanding capital stock of any Guarantor.”

5.  REPRESENTATIONS AND WARRANTIES. The Company agrees with and confirms to the Holder that as of the date hereof each of the representations and warranties contained in Section 3.2 of the Note Purchase Agreement are true and accurate in all material respects, except to the extent that they relate to an earlier date, in which case they are true and correct as of such date.

6.  REGISTRATION STATEMENT. For the avoidance of doubt (1) the Company hereby represents and warrants to the Holder that the Registration Statement filed by the Company on August 16, 2021 remains effective as of the date hereof; and (2) in accordance with the terms and conditions of the Registration Rights Agreement, the Company covenants and agrees to prepare and file with the SEC an amendment to such Registration Statement and/or file a new registration statement (a “New Registration Statement”), at such time as the Company and Holder mutually agree, acting reasonably, that an amendment to such Registration Statement or a New Registration Statement is required in order to enable the registration of all Registrable Securities (as defined in the Registration Rights Agreement) in accordance with the terms of the Registration Rights Agreement and the Note, as amended.

7.  GENERAL.

(a)  References to Note. Upon the effectiveness of this First Amendment Agreement, each reference in the Note to “this Note”, “hereunder”, “hereof”, “herein” or words of like import shall mean and be a reference to the Note, as amended by this First Amendment Agreement, and each reference to the Note in any other document, instrument or agreement executed and/or delivered in connection with the Note shall mean and be a reference to the Note, as amended by this First Amendment Agreement.

(b)  Effect on Note. The Note, as amended and modified hereby, the Security, and all other documents, instruments and agreements executed and/or delivered in connection therewith, shall remain in full force and effect and are hereby ratified and confirmed.

(c)  No Waiver. The execution, delivery and effectiveness of this First Amendment Agreement shall not operate as a waiver of any right, power or remedy of any party under the Note Purchase Agreement dated July 19, 2021, between the Company and the Holder or any other document, instrument or agreement executed in connection therewith, nor constitute a waiver of any provision contained therein, except as specifically set forth herein.

(d)  Governing Law. This First Amendment Agreement shall be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this First Amendment Agreement shall be governed by, the laws of the Province of Alberta and the federal laws of Canada applicable therein, without giving effect to any choice of law or conflict of law provision or rule (whether of the Province of Alberta or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the Province of Alberta.

(e)  Successors and Assigns. This First Amendment Agreement shall be binding upon and shall enure to the benefit of the parties hereto and their respective successors and assigns in accordance with the Note.

(f)  Headings. The section headings in this First Amendment Agreement are inserted for convenience of reference only and shall not affect the meaning or interpretation of this First Amendment Agreement or any provision hereof.

(g)  Counterparts. This First Amendment Agreement may be executed by the parties hereto in several counterparts, each of which shall be deemed to be an original and all of which shall constitute together but one and the same agreement. Delivery by facsimile or email of an executed signature page of this First Amendment Agreement shall be as effective as delivery of an original executed counterpart thereof.

(h)  Time of Essence. Time shall be of the essence hereof.

(The remainder of this page is intentionally blank; signature pages follow.)

IN WITNESS WHEREOF, the parties hereto have executed this First Amendment Agreement.

(Signature Page – First Amendment Agreement)