Exhibit
10.1


 





LOAN
AGREEMENT


 


THIS
LOAN AGREEMENT is made as of January ____, 2019,


 


BETWEEN:


 


ECC
VENTURES 2 CORP., a corporation formed pursuant to the laws of the Province of British Columbia


 


(the
“Lender”)


 


AND:


 


LONG
ISLAND BRAND BEVERAGES LLC, a limited liability company formed pursuant to the laws of the State of New York


 


(the
“Borrower”)


 


AND:


 


LONG
BLOCKCHAIN CORP., a corporation formed pursuant to the laws of the State of Delaware


 


(the
“Guarantor”)


 


WHEREAS:


 


	A.	The
                                         Lender has agreed to advance $250,000.00 to the Borrower as a non-revolving secured loan
                                         facility on the terms and conditions as more particularly set out in herein;
	 	 
	B.	The
                                         Guarantor is the registered and beneficial owner of all of the issued and outstanding
                                         securities in the capital of the Borrower; and
	 	 
	C.	In
                                         connection with the Loan, the Borrower has agreed to grant a security interest in favour
                                         of the Lender to secure all of the Borrower’s obligations to the Lender, including
                                         the Borrower’s obligations hereunder, and the Guarantor has agreed to guarantee
                                         the same, each subject to the terms and conditions of this Agreement.



 


NOW
THEREFORE in consideration of the premises and the conditions and provisions contained herein, the receipt and adequacy of
which consideration are hereby duly acknowledged, the Parties agree as follows:


 


	1.	DEFINITIONS
                                         AND INTERPRETATION
	 	 
	1.1	Definitions.
                                         In this Agreement the following words and phrases shall have the following meanings:



 


		(a)	“Advance”
                                         has the meaning ascribed to such term in Subsection 2.2(a);



 




    	 



    	- 2 -



    

 


		(b)	“Agreement”
                                         means this loan agreement, as may be amended, supplemented, or replaced from time to
                                         time;
	 	 	 
		(c)	“Borrower”
                                         has the meaning ascribed to such term on the first page of this Agreement;
	 	 	 
		(d)	“Business
                                         Day” means any day, other than a Saturday or Sunday, on which banks in Vancouver,
                                         British Columbia are open for commercial banking business during normal banking hours;
	 	 	 
		(e)	“Cavendish
                                         Agreements” means the Second Amended and Restated Loan and Option Agreement,
                                         dated as of January 18, 2019, by and between the Guarantor and Court Cavendish Ltd, and
                                         the Security Agreement, dated as of January 18, 2019, by and between the Guarantor and
                                         Court Cavendish Ltd;
	 	 	 
		(f)	“Change
                                         of Control” means the acquisition, directly or indirectly, of beneficial ownership
                                         of the issued and outstanding equity securities of a party to which voting rights are
                                         attached, which results in a third party (which may be comprised by one of more entities
                                         acting together), other than Court Cavendish Ltd, its permitted transferees and their
                                         respective affiliates, individually or together as a group, holding more than an aggregate
                                         of 50% of such voting rights;
	 	 	 
		(g)	“Event
                                         of Default” means any of the events of default described in Section 6.1;
	 	 	 
		(h)	“General
                                         Security Agreement” has the meaning ascribed to such term in Section 2.6;
	 	 	 
		(i)	“Governmental
                                         Licenses” has the meaning ascribed to such term in Subsection 4.1(j);
	 	 	 
		(j)	“Governmental
                                         Authority” means the government of any nation and any state, provincial, territorial,
                                         divisional, county, regional, city, and other political subdivision thereof, in each
                                         case in which any property of the Borrower or any of its subsidiaries is located or which
                                         exercises valid jurisdiction over any such property of the Borrower or any of their respective
                                         subsidiaries, or in which the Borrower or any of its subsidiaries conducts business or
                                         is otherwise present;
	 	 	 
		(k)	“Initial
                                         Advance” has the meaning ascribed to such term in Section 2.4;
	 	 	 
		(l)	“Lender”
                                         has the meaning ascribed to such term on the first page of this Agreement;
	 	 	 
		(m)	“Letter
                                         of Intent” has the meaning ascribed to such term in Subsection 5.1(h);
	 	 	 
		(n)	“LIBC”
                                         means Long Island Beverages Corp., a corporation formed pursuant to the laws of the Province
                                         of British Columbia;
	 	 	 
		(o)	“Lien”
                                         means any mortgage, pledge, charge, assignment, security interest, hypothec, lien, or
                                         other encumbrance, including, without limitation, any agreement to give any of the foregoing,
                                         or any conditional sale or other title retention agreement;



 




    	 



    	- 3 -



    

 


		(p)	“Loan”
                                         means the non-revolving loan facility in the principal amount of $250,000.00, and any
                                         interest accrued thereon, provided by the Lender to the Borrower in accordance with this
                                         Agreement;
	 	 	 
		(q)	“Loan
                                         Documents” means this Agreement, the Promissory Note, and the General Security
                                         Agreement;
	 	 	 
		(r)	“Material
                                         Adverse Effect” means any change, event, occurrence, effect, state of facts,
                                         or circumstance that, individually or in the aggregate with other such changes, events,
                                         occurrences, effects, state of facts, or circumstances is or would reasonably be expected
                                         to be material and adverse to the business, operations, results of operations, assets,
                                         properties, capitalization, condition (financial or otherwise), or liabilities (contingent
                                         or otherwise) of the Borrower and its subsidiaries, taken as a whole; provided, however,
                                         that none of the following alone or in combination shall be deemed, in and of itself,
                                         to constitute a Material Adverse Effect: (A) changes attributable to the public announcement
                                         or pendency of the transactions contemplated hereby, (B) any changes, events, or occurrences
                                         arising out of, resulting from or attributable to (1) acts of war, sabotage or terrorism,
                                         or any escalation or worsening of any such acts of war, sabotage or terrorism, or (2)
                                         earthquakes, hurricanes, tornados or other natural disasters, except, in either case,
                                         to the extent the Company is affected in a materially disproportionate manner relative
                                         to other companies in the Company’s industry, (C) changes in GAAP or other applicable
                                         accounting rules or applicable legal requirements (including the accounting rules and
                                         regulations of the SEC), or, in any such case, changes in the interpretation thereof,
                                         or (D) any action required by this Agreement;
	 	 	 
		(s)	“Notice”
                                         means any notice, request, direction, or other document that a Party can or must make
                                         or give under this Loan Agreement;
	 	 	 
		(t)	“Parties”
                                         means, collectively, the Borrower, the Lender, and the Guarantor, and “Party”
                                         means each one of them as the context requires;
	 	 	 
		(u)	“Permitted
                                         Liens” means (a) any Liens on the Borrower’s property which have been
                                         perfected as of the date of this Agreement; (b) Liens for taxes, assessments, and other
                                         governmental charges not yet due and payable; (c) Liens incurred in the ordinary course
                                         of business that would not materially impair the value of the assets of the Borrower;
                                         and (d) the Prior Liens and the Liens set forth in Schedule 1.1(u);
	 	 	 
		(v)	“Principal”
                                         means the amount of principal advanced by the Lender to the Borrower in accordance with
                                         the terms and conditions of this Agreement;
	 	 	 
		(w)	“Principal
                                         Subsidiary” means each direct or indirect subsidiary of the Borrower (i) which,
                                         as at the date of the making of the determination of Principal Subsidiary, had consolidated
                                         assets which constituted more than 5% of the consolidated assets of the Borrower as at
                                         that date of determination; or (ii) which had consolidated revenue for any one of the
                                         three most recent fiscal years for which financial statements are available which constituted
                                         more than 5% of the consolidated revenue of the Borrower for such year, all such consolidated
                                         assets and consolidated revenues to be calculated in accordance with GAAP (generally
                                         accepted accounting principles); or (iii) to which is transferred, directly or indirectly,
                                         in one or a series of transactions, all or substantially all of the business, undertaking,
                                         and assets of a subsidiary of the Borrower which immediately prior to such transfer is
                                         a Principal Subsidiary of the Borrower;



 




    	 



    	- 4 -



    

 


		(x)	“Prior
                                         Liens” means the Liens on all of the Borrower’s property arising in connection
                                         with (i) the Radium2 Agreement; and (ii) the Cavendish Agreements;
	 	 	 
		(y)	“Promissory
                                         Note” has the meaning ascribed to such term in Section 2.4;
	 	 	 
		(z)	“Radium2
                                         Agreement” means the Agreement for the Purchase and Sale of Future Receipts,
                                         dated November 27, 2017, by and between the Guarantor (at the time known as Long Island
                                         Iced Tea Corp.), the parent of the Borrower, and Radium2 Capital Inc.; and
	 	 	 
		(aa)	“Request
                                         for Advance” has the meaning ascribed to such term in Subsection 2.2(b).



 


	2.	LOAN
	 	 
	2.1	Amount
                                         of Loan. In reliance upon the representations and warranties contained herein and
                                         subject to the terms and conditions of this Agreement, the Lender shall lend to the Borrower
                                         the principal sum of up to $250,000.00.
	 	 
	2.2	Advances.



 


		(a)	Subject
                                         to the conditions precedent described in Section 3.2, as applicable, and subject to the
                                         terms described in this Section 2.2, the Borrower may draw down on the Loan, at such
                                         times and from time to time, and in such amounts, as determined by the Lender in its
                                         sole discretion (each, an “Advance”).
	 	 	 
		(b)	Prior
                                         to each Advance, the Borrower shall provide the Lender with a request for advance in
                                         substantially the form attached as Schedule 2.2 hereto, which request shall include
                                         a written plan and budget detailing the use of the Advance, and the identity of the party
                                         to which the Advance shall be delivered (the “Request for Advance”).
                                         The form and substance of the written plan and budget attached to each Request for Advance
                                         to be provided to the sole satisfaction of the Lender.
	 	 	 
		(c)	Following
                                         the receipt of a Request for Advance from the Borrower, the Lender may, in the Lender’s
                                         sole discretion and subject to any adjustments by the Lender, provide the Advance to
                                         the Borrower.
	 	 	 
		(d)	For
                                         each Advance provided to the Borrower for operating purposes, the Borrower shall provide
                                         the Lender with a written report detailing the use and application of the Advance on
                                         the first Business Day of each and every calendar month following the provision of such
                                         Advance to the Borrower until such time as the Advance all interest accrued thereon have
                                         been repaid to the Lender in full; such monthly written reports to be consistent with
                                         the Borrower’s statements as to the anticipated use of such Advance as provided
                                         in the respective Request for Advance, except as approved in writing by Lender and provided
                                         that such monthly reports shall be deemed to be consistent with the Borrower’s
                                         statements if no line item in such monthly report varies by more than 20% from the Borrower’s
                                         statements.



 




    	 



    	- 5 -



    

 


	2.3	Interest.
                                         The Principal, both before and after demand, default, or judgment and overdue interest
                                         on the Loan, shall bear interest computed on the outstanding daily principal balance
                                         of the Loan at the rate of 10% per annum, calculated and paid on July 1, 2019, and on
                                         the first day of each calendar month thereafter while any portion of the Loan remains
                                         outstanding, on the basis of a 365 day year (or in the case of a leap year, a 366 day
                                         year) and the actual number of days elapsed, on a nominal rate basis without allowance
                                         or deduction for deemed re-investment or otherwise, and any unpaid interest shall compound
                                         annually on January 1 of each year. Interest shall begin to accrue from the date of each
                                         Advance. For the avoidance of doubt, if the Loan becomes due and payable, on demand or
                                         otherwise, pursuant to Section 6.2 of this Agreement prior to July 1, 2019, the interest
                                         due and owing on the Loan shall be calculated and paid on the date of repayment.
	 	 
	2.4	Promissory
                                         Note. To evidence the amount of Principal, and accrued interest thereon, advanced
                                         to the Borrower and owing to the Lender hereunder, and to evidence the amount of payments
                                         made to the Lender by the Borrower, the Borrower shall issue to the Lender a grid promissory
                                         note in substantially the applicable form attached as Schedule 2.4 hereto (the
                                         “Promissory Note”) as of the date hereof (for greater certainty, the
                                         Promissory Note shall be issued as of the date of this Agreement notwithstanding that
                                         the initial Advance to be provided by the Lender to the Borrower (the “Initial
                                         Advance”) hereunder may be provided at a later date, and if applicable the
                                         grid attached to the Promissory Note shall reflect that no balance is owing under the
                                         Promissory Note until the date of the Initial Advance).
	 	 
	2.5	Repayment
                                         of the Loan. The Borrower may from time to time repay or prepay all or any part of
                                         the Loan without Notice, penalty, premium, or bonus provided that each such payment or
                                         prepayment will be made together with all accrued and unpaid interest on the Loan which
                                         then remains unpaid. The outstanding balance of the Loan, including all accrued and unpaid
                                         interest thereon and any other amounts owing to the Lender hereunder, shall be repaid
                                         by the Borrower to the Lender on July 31, 2019 (the “Maturity Date”),
                                         subject to any earlier repayment pursuant to Section 6 of this Agreement, and failing
                                         payment of the same following the Maturity Date, the Lender may then proceed to enforce
                                         payment thereof by exercising any right, power, or remedy permitted by this Agreement,
                                         or by law in such manner as the Lender may elect, without presentation, protest, or further
                                         demand, or Notice of any kind, all of which are hereby expressly waived.
	 	 
	2.6	General
                                         Security Agreement. As general and continuing security for the payment of the Loan
                                         and the performance under this Agreement, the Parties shall enter into a general security
                                         agreement (the “General Security Agreement”), in substantially the
                                         form attached hereto as Schedule 2.6, creating a interest in all of the Borrower’s
                                         present and after-acquired personal property, in favour of the Lender. The Lender hereby
                                         acknowledges that such interest shall, subject to the covenant of the Borrower set out
                                         in Subsection 5.1(j) of this Agreement, be junior in priority to the Prior Liens and
                                         may be junior to any other Permitted Lien, but shall be senior in priority to the interests
                                         of any other party. The Borrower hereby authorizes the Lender to register, file, or record,
                                         or cause to be registered, filed, or recorded, the General Security Agreement or notice
                                         thereof in all offices and jurisdictions where such registration, filing, or recording
                                         is necessary or, in the Lender’s determination, advisable or to the advantage of
                                         the Lender, to create, perfect, or preserve the rights granted under the General Security
                                         Agreement by each Lender, and further authorizes the Lender to renew and maintain such
                                         registrations, filings, and recordings from time to time, as and when required to keep
                                         them in the full force and effect, each to the satisfaction of the Lender. The Borrower
                                         shall from time to time promptly, upon the reasonable request of the Lender, take such
                                         action, and execute and deliver such further documents (including such opinions and other
                                         supporting documentation as the Lender may reasonably request), as may be reasonably
                                         necessary or appropriate to ensure that the Lender maintain a security interest junior
                                         only to the Prior Liens and any other Permitted Lien over all present and after-acquired
                                         personal property assets of the Borrower.



 




    	 



    	- 6 -



    

 


	2.7	Guarantee.
                                         The Guarantor hereby irrevocably and unconditionally guarantees to Lender the due and
                                         punctual payment in full of all obligations of the Borrower arising in connection with
                                         the Loan, this Agreement, and/or the Promissory Note (the “Guaranteed Obligations”),
                                         when the same shall become due, whether by required prepayment, declaration, acceleration,
                                         demand, or otherwise. The Guarantor hereby waives, for the benefit of the Lender: (a)
                                         any right to require the Lender, as a condition of payment or performance by the Guarantor,
                                         to (i) proceed against the Borrower, any other guarantor of the Guaranteed Obligations,
                                         (ii) proceed against or exhaust any security held from the Borrower or any other guarantor
                                         of the Guaranteed Obligations, or (iii) pursue any other remedy in the power of the Lender
                                         whatsoever; (b) any defense arising by reason of the incapacity, lack of authority, or
                                         any disability or other defense of Borrower including any defense based on or arising
                                         out of the lack of validity or the unenforceability of the Guaranteed Obligations or
                                         any agreement or instrument relating thereto or by reason of the cessation of the liability
                                         of Borrower from any cause other than payment in full of the Guaranteed Obligations;
                                         (c) any defense based upon Lender’s errors or omissions in the administration of
                                         the Guaranteed Obligations, except behavior which amounts to bad faith; (d) any principles
                                         or provisions of law, statutory or otherwise, which are or might be in conflict with
                                         the terms hereof and any legal or equitable discharge of the Guarantor’s obligations
                                         hereunder; or (e) notices, demands, presentments, protests, or any agreement or instrument
                                         related thereto. Notwithstanding the foregoing, the Lender shall release the Guarantor
                                         from this obligation on the closing of the transactions contemplated by the Letter of
                                         Intent or the other sale of substantially all the equity or assets of Borrower to the
                                         Lender and/or its affiliates.
	 	 
	3.	CONDITIONS
                                         PRECEDENT
	 	 
	3.1	Conditions
                                         Precedent to the Agreement. This Agreement shall become effective upon the satisfaction
                                         (or waiver by the Lender in its sole discretion) of each of the following conditions
                                         precedent:



 


		(a)	the
                                         delivery to each of the Parties of this Agreement, duly executed by each of the Parties;
	 	 	 
		(b)	the
                                         delivery to each of the Parties of the General Security Agreement, duly executed by each
                                         of the Parties;
	 	 	 
		(c)	the
                                         delivery of the Promissory Note to the Lender, duly executed by the Borrower;



 




    	 



    	- 7 -



    

 


		(d)	the
                                         delivery to the Lender of a certificate executed by a senior officer of the Borrower,
                                         in form and substance satisfactory to the Lender, acting reasonably, dated as of the
                                         date hereof, as to (i) the organizational documents of the Borrower; (ii) the resolutions
                                         of the board of directors of the Borrower authorizing the execution, delivery, and performance
                                         of this Agreement, and the transactions and documents contemplated hereby; and (iii)
                                         the name, position, and true signature of the Person authorized to sign this Agreement
                                         on behalf of the Borrower;
	 	 	 
		(e)	the
                                         delivery to the Lender by the Borrower of a Certificate of Status issued by the State
                                         of New York in respect of the Borrower, dated as of a date no more than five days immediately
                                         prior to the date hereof;
	 	 	 
		(f)	the
                                         delivery to the Borrower of a certificate executed by a senior officer of the Lender,
                                         dated as of the date hereof, as to the resolutions of the board of directors of the Lender
                                         authorizing the execution, delivery, and performance of this Agreement, and the transactions
                                         and documents contemplated hereby;
	 	 	 
		(g)	all
                                         material approvals, consents, and authorizations of Governmental Authorities or other
                                         persons required in connection with this Agreement and the other Loan documents shall
                                         have been obtained and remain in effect, including without limitation the approval of
                                         the TSX Venture Exchange with respect to the matters herein; and
	 	 	 
		(h)	the
                                         delivery of any other documents, instruments, or authorizations that the Lender may require,
                                         acting reasonably, in connection with the subject matter hereof.



 


	3.2	Conditions
                                         Precedent to each Advance. Notwithstanding any other provision of this Agreement,
                                         the obligation of the Lender to advance any Advance to the Borrower in accordance with
                                         Section 2.2 is subject to and conditional upon each of the following terms and conditions
                                         being satisfied or waived:



 


		(a)	all
                                         representations and warranties made by the Borrower herein, and in any other document
                                         delivered in connection herewith, shall be true and correct in all material respects;
	 	 	 
		(b)	all
                                         material approvals, consents, and authorizations of Governmental Authorities or other
                                         persons required in connection with this Agreement and the other Loan documents shall
                                         have been obtained and remain in effect, including without limitation the approval of
                                         the TSX Venture Exchange with respect to the matters herein;
	 	 	 
		(c)	except
                                         as set forth in Schedule 4.1(h), there shall not exist, nor shall there be any
                                         pending or threatened (in writing), action, proceeding, investigation, order, or claim
                                         (before any Governmental Authority or otherwise) against or affecting the Borrower or
                                         any of its subsidiaries, which has, or would reasonably be expected to have, a Material
                                         Adverse Effect;



 




    	 



    	- 8 -



    

 


		(d)	there
                                         shall have been no change, event or occurrence that has had, or would reasonably be expected
                                         to have, a Material Adverse Effect on the Borrower or any of its subsidiaries;
	 	 	 
		(e)	the
                                         Borrower shall have in all material respects performed and complied with all agreements,
                                         covenants, and conditions herein, and in the other documents to be delivered in connection
                                         with the Loan, required to be performed and complied with on or prior to the date of
                                         the proposed Advance, except those agreements and conditions waived by the Lender;
	 	 	 
		(f)	no
                                         Event of Default under this Agreement shall have occurred and be continuing on such date
                                         or after giving effect to the proposed Advance;
	 	 	 
		(g)	there
                                         shall not exist any material litigation or any investigation, bankruptcy, injunction,
                                         order, or claim affecting or relating to the Borrower or any of their respective subsidiaries
                                         which would reasonably be expected to affect the legality, validity, or enforceability
                                         of this Agreement or any other document delivered in connection herewith, that has not
                                         been settled, dismissed, vacated, discharged, or terminated;
	 	 	 
		(h)	the
                                         delivery to the Lender of a certificate executed by a senior officer of the Borrower,
                                         in form and substance satisfactory to the Lender, acting reasonably, dated as of the
                                         date hereof, as to each of the matters provided for in this Section 3.2; and
	 	 	 
		(i)	the
                                         Borrower shall have performed and complied with the provisions of Section 2.2.



 


	4.	REPRESENTATIONS
                                         AND WARRANTIES
	 	 
	4.1	Representations
                                         and Warranties of the Borrower. The Borrower represents and warrants to the
                                         Lender as follows, with the intent that the Lender will rely thereon in entering into
                                         this Agreement and in concluding the transactions contemplated hereby:



 


		(a)	the
                                         Borrower and each of its subsidiaries is a valid and subsisting limited liability company,
                                         corporation or other entity duly formed and, as applicable, in good standing under the
                                         laws of the jurisdiction in which it is incorporated, formed, continued, or amalgamated
                                         and has the company, corporate or other entity power and authority to own its property
                                         and to conduct its business as currently conducted;
	 	 	 
		(b)	the
                                         Borrower has the company power and capacity to enter into this Agreement, and this Agreement
                                         has been duly authorized, executed, and delivered by the Borrower and constitutes legal,
                                         valid, and binding obligations of the Borrower, enforceable against the Borrower by the
                                         Lender in accordance with their respective terms, subject to applicable laws relating
                                         to bankruptcy, insolvency, or similar laws affecting creditors’ rights generally
                                         and to the discretion of a court of competent jurisdiction regarding the availability
                                         of equitable remedies;



 




    	 



    	- 9 -



    

 


		(c)	neither
                                         the Borrower nor any of its subsidiaries has committed an act of bankruptcy, has proposed
                                         a compromise or arrangement to its creditors generally, has had a petition or a receiving
                                         order in bankruptcy filed against it, has made a voluntary assignment in bankruptcy,
                                         has taken any proceedings with respect to a compromise or arrangement, has taken any
                                         proceedings to have itself declared bankrupt or wound-up, has taken any proceedings to
                                         have a receiver appointed for any of its property, or has had any execution or distress
                                         become enforceable or become levied upon any of its property;
	 	 	 
		(d)	except
                                         as set forth in Schedule 4.1(d), neither the Borrower nor any of its subsidiaries
                                         is in default in any material respect (nor has any event occurred which, but for the
                                         lapse of time or the giving of Notice, or both, would constitute a default in any material
                                         respect) under any obligation or under any licence or permit to own and/or operate its
                                         properties or assets or to carry on its business;
	 	 	 
		(e)	the
                                         Borrower and each of its subsidiaries owns, possesses, and has good and marketable title
                                         to its property and assets free and clear of any and all Liens, except Permitted Liens;
	 	 	 
		(f)	except
                                         as set forth in Schedule 4.1(f), the Borrower is not Party to or bound by any
                                         agreement of guarantee, indemnification, assumption, endorsement, or any other like commitment
                                         of the obligations, liabilities (contingent or otherwise), or indebtedness of any other
                                         person;
	 	 	 
		(g)	the
                                         execution and delivery of this Agreement by the Borrower and the compliance by the Borrower
                                         with the terms thereof will not:



 


		(i)	violate
                                         or conflict with any applicable laws, statute, ordinance, regulation, or rule, or any
                                         judgment, decree, order, or award of any court, governmental body, or arbitrator having
                                         jurisdiction over the Borrower or any of its subsidiaries;
	 	 	 
		(ii)	require
                                         any authorization, consent, approval, exemption, or other action by, or Notice to, any
                                         stock exchange, governmental agency, authority, regulatory body, or court;
	 	 	 
		(iii)	violate
                                         or conflict with, or constitute a default (or an event which, with Notice or lapse of
                                         time, or both, would constitute a default) under any contract to which the Borrower or
                                         any of its subsidiaries is a Party, or by which the Borrower or any of its subsidiaries
                                         or any of their assets or properties may be bound or affected;
	 	 	 
		(iv)	result
                                         in the termination of, any additional payment under, or the change in any terms of, or
                                         accelerate the performance of any obligation required by (or give rise to a right of
                                         any Party thereto, exercisable on Notice or otherwise, to terminate, to require that
                                         any additional payment be made under, to change any terms of, or to accelerate the performance
                                         of any obligation under) any contract to which the Borrower or any of its subsidiaries
                                         is a Party or by which the Borrower, any of its subsidiaries, or any of their assets
                                         or properties may be bound or affected;
	 	 	 
		(v)	result
                                         in the creation of any Lien upon any of its property or assets;



 




    	 



    	- 10 -



    

 


		(vi)	violate
                                         or conflict with any license held by it or which is necessary to the operation of its
                                         business; or
	 	 	 
		(vii)	violate
                                         or conflict with the provisions of the Borrower’s certificate of formation or operating
                                         agreement;



 


		(h)	except
                                         as set forth in Schedule 4.1(h), neither the Borrower nor any of its subsidiaries
                                         is a Party to any actions, suits, or proceedings which could materially affect their
                                         business or financial condition, and to the best of the Borrower’s knowledge no
                                         such actions, suits, or proceedings have been threatened as at the date hereof;
	 	 	 
		(i)	the
                                         Borrower and each of its subsidiaries is, in all material respects, conducting its business
                                         in compliance with all applicable laws, rules, and regulations of each jurisdiction in
                                         which its business is carried on and is licensed, registered, or qualified in all jurisdictions
                                         in which it owns, leases, or operates its property or carries on business to the extent
                                         required to enable its business to be carried on as now conducted and its property and
                                         assets to be owned, leased, and operated, and all such licences, registrations, and qualifications
                                         are valid, subsisting, and in good standing and neither the Borrower nor any of its subsidiaries
                                         has received a Notice of non-compliance, nor knows of, any facts that could give rise
                                         to a Notice of noncompliance with any such laws, regulations, or permits which would
                                         have a Material Adverse Effect on the Borrower. Except for any violation or default which
                                         would not have a Material Adverse Effect on the Borrower, neither the Borrower nor any
                                         of its subsidiaries is (i) in violation of its certificate of formation, operating agreement,
                                         or similar organizational documents; (ii) in default, and no event has occurred that,
                                         with Notice or lapse of time or both, would constitute such a default, in the due performance
                                         or observance of any term, covenant, or condition contained in any indenture, mortgage,
                                         deed of trust, loan agreement, or other agreement or instrument to which it is a Party
                                         or by which it is bound or to which any of its properties or assets is subject; or (iii)
                                         in violation of any law or statute or any judgment, order, rule, or regulation of any
                                         court or arbitrator or governmental or regulatory authority;
	 	 	 
		(j)	the
                                         Borrower and each of its subsidiaries possesses all material certificates, licenses,
                                         approvals, permits, and authorizations (collectively, “Governmental Licenses”)
                                         and has made all declarations and filings with the appropriate federal, state, local,
                                         or foreign governmental or regulatory authorities that are necessary to own, lease, or
                                         license, as the case may be, and to conduct its business and is in compliance in all
                                         material respects with the terms and conditions of all such Governmental Licenses. Neither
                                         the Borrower nor any of its subsidiaries has received any Notice of proceedings relating
                                         to the revocation or modification of any such Governmental License;
	 	 	 
		(k)	the
                                         Borrower and its subsidiaries are insured by insurers of recognized financial responsibility
                                         against such losses and risks and in such amounts as are customary in the businesses
                                         in which it engages, and the Borrower has no reason to believe that it or its subsidiaries
                                         will not be able to renew its existing insurance coverage as and when such coverage expires
                                         or obtain similar coverage from similar insurers as may be necessary to continue their
                                         respective business at a similar cost to that of its existing coverage; and



 




    	 



    	- 11 -



    

 


		(l)	the
                                         Borrower and each of its subsidiaries has filed in a timely manner all necessary tax
                                         returns and Notices and has paid all applicable taxes of whatsoever nature for all tax
                                         years prior to the date hereof to the extent that such taxes have become due or have
                                         been alleged to be due and the Borrower is not aware of any tax deficiencies or interest
                                         or penalties accrued or accruing, or alleged to be accrued or accruing, thereon where,
                                         in any of the above cases, it might reasonably be expected to result in any Material
                                         Adverse Effect on the Borrower; and
	 	 	 
		(m)	except
                                         as set forth in Schedule 4.1(m), all material contracts to which the Borrower
                                         and each of its subsidiaries is a Party or by which it is bound are legal, valid, binding,
                                         and in full force and effect and enforceable by the Borrower or its subsidiaries, as
                                         applicable, in accordance with their respective terms and are the product of arm’s
                                         length negotiations between the Parties thereto; and the Borrower and each of its subsidiaries
                                         has performed in all material respects all respective obligations required to be performed
                                         by it to date under the material contracts and is not, and is not to the knowledge of
                                         the Borrower alleged to be (with or without the lapse of time or the giving of Notice,
                                         or both), in breach or default in any material respect thereunder.



 


	4.2	Representations
                                         and Warranties of the Lender. The Lender represents and warrants to the Borrower
                                         as follows, with the intent that the Borrower will rely thereon in entering into this
                                         Agreement and in concluding the transactions contemplated hereby:



 


		(a)	the
                                         Lender is a company duly organized under the laws of the Province of British Columbia,
                                         and has the power, authority, and capacity to enter into this Agreement and to carry
                                         out its terms;
	 	 	 
		(b)	the
                                         Lender has the corporate power and authority to carry on the business now being conducted
                                         by it, execute and deliver this Agreement, and to perform all of the obligations of the
                                         Lender hereunder;
	 	 	 
		(c)	all
                                         necessary corporate actions and proceedings have been taken to authorize the execution
                                         and delivery by the Lender of this Agreement and the performance by the Lender of all
                                         of its obligations hereunder and, when delivered to the Borrower, will constitute legal,
                                         valid, and binding obligations of the Lender enforceable in accordance with its terms;
                                         and
	 	 	 
		(d)	the
                                         entering into of this Agreement and the performance by the Lender of its obligations
                                         hereunder do not and will not result in the violation of any of the terms of the constating
                                         documents of the Lender or any agreement to which the Lender is a Party or by which it
                                         or any of its properties or assets are bound.



 




    	 



    	- 12 -



    

 


	5.	COVENANTS
	 	 
	5.1	Covenants
                                         of the Borrower. So long as any portion of the Loan is outstanding, the Borrower
                                         hereby covenants and agrees with the Lender as follows:



 


		(a)	to
                                         repay the Loan in accordance with the provisions of this Agreement;
	 	 	 
		(b)	to
                                         not commit any Event of Default and upon becoming aware of the occurrence of any Event
                                         of Default or the existence of any condition or any event which, but for the giving of
                                         Notice or lapse of time, or both, would constitute an Event of Default, to promptly notify
                                         the Lender thereof and promptly do everything reasonably possible to cause such Event
                                         of Default or condition or event to be eliminated as quickly as possible;
	 	 	 
		(c)	to
                                         maintain its corporate existence and all licences and authorizations from regulatory
                                         and governmental authorities or agencies required in order to permit it to carry on its
                                         business, diligently carry on and conduct its business only in the ordinary course and
                                         in a proper and business-like manner;
	 	 	 
		(d)	to,
                                         upon the request of the Lender, permit the Lender, for the purposes of this Agreement,
                                         by its agents, employees, and representatives, to examine during normal business hours
                                         and without unreasonable disruptions, all relevant books of account, records, reports,
                                         and other papers of the Borrower, and to make copies thereof and to take extracts therefrom,
                                         subject to execution by the Lender of a confidentiality agreement in a form reasonably
                                         satisfactory to the Borrower;
	 	 	 
		(e)	at
                                         all times comply in all material respects with all applicable laws, rules, governmental
                                         restrictions, regulations, guidelines, or directives, including all codes of conduct;
	 	 	 
		(f)	not
                                         to lend money to or invest money in any person, whether by loan, acquisition, of shares,
                                         acquisition of debt obligations, or in any other manner whatsoever or guarantee, endorse,
                                         or otherwise become surety for or upon the obligations of any other person except by
                                         endorsement of negotiable instruments for deposit or collection in the ordinary course
                                         of its business;
	 	 	 
		(g)	not
                                         to create, assume, or permit to exist any Lien on any of its assets other than in the
                                         ordinary course of business, other than Permitted Liens, unless otherwise permitted by
                                         the Lender in writing;
	 	 	 
		(h)	not
                                         to take any steps in furtherance of, or to permit or approve of the taking any steps
                                         in furtherance of, any Change of Control of the Borrower or any Principal Subsidiary,
                                         other than substantially in accordance with the Letter of Intent dated January 15, 2019,
                                         among the Lender, the Borrower, and LIBC, as may be amended from time to time (the “Letter
                                         of Intent”) or otherwise to Lender and/or its affiliates, unless otherwise
                                         permitted by the Lender in writing;
	 	 	 
		(i)	not
                                         to convey, sell, lease, transfer, or otherwise dispose of any of its assets unless otherwise
                                         agreed to in writing by the Lender, other than substantially in accordance with the Letter
                                         of Intent or otherwise to Lender and/or its affiliates, except for dispositions made
                                         in the ordinary course of business; and



 




    	 



    	- 13 -



    

 


		(j)	subject
                                         to any written and executed acceptance by the Lender of a written plan and budget set
                                         out in a Request for Advance which specifies otherwise, to apply all Loan proceeds advanced
                                         to the Borrower to the repayment of the Borrower’s obligations arising in connection
                                         with the Radium2 Agreement, and following the repayment of such obligations, (i) to promptly
                                         arrange the discharge of all Liens against the Borrower arising in connection with the
                                         Radium2 Agreement; (ii) to provide confirmation of such discharge to the Lender, in the
                                         sole satisfaction of the Lender; and (iii) the Parties hereto agree that the obligations
                                         of the Borrower under the Radium2 Agreement shall no longer be deemed to be “Permitted
                                         Liens” for the purposes of this Agreement and of any other documents or instruments
                                         which incorporate such definition by reference.



 


	5.2	Failure
                                         to Perform. If the Borrower fails to perform any covenant set out in this Agreement,
                                         the Lender may, following notice to the Borrower of such failure to perform and such
                                         Borrower’s failure to remedy such failure within a commercially reasonable time
                                         period, at its discretion, but need not, perform any such covenant capable of being performed
                                         by it and may, in the Lender’s discretion, but need not, make any payments or incur
                                         expenditures for such purpose, but no such performance of payment shall be deemed to
                                         relieve the Borrower from any default under this Agreement; if the Lender performs any
                                         such covenant or incurs any such expenditures, all costs incurred by the Lender in connection
                                         therewith shall be added to the Principal.
	 	 
	6.	DEFAULT
	 	 
	6.1	Events
                                         of Default. For the purposes of this Agreement, any one or more of the following
                                         events shall constitute Events of Default:



 


		(a)	if
                                         the Letter of Intent is terminated in accordance with its terms or expires in accordance
                                         with its terms prior to the entering into of any Definitive Agreements (as such term
                                         is defined below), or any of the terms of the Letter of Intent are breached by the Borrower
                                         or the Guarantor;
	 	 	 
		(b)	if
                                         any definitive agreements have been executed by, among other parties, the Lender and
                                         the Borrower with respect to the transactions set out in the Letter of Intent (“Definitive
                                         Agreements”) and any such Definitive Agreement is terminated or expires in
                                         accordance with its terms, or any of the terms of any such Definitive Agreements are
                                         breached by the Borrower or the Guarantor;
	 	 	 
		(c)	if
                                         the Borrower shall make default in any material way in the observance or performance
                                         of something required to be done or some covenant or condition required to be observed
                                         or performed in this Agreement, the Letter of Intent, and/or one or more Definitive Agreements,
                                         and such default continues for a period of 30 days following the date upon which written
                                         Notice of default is given to the Borrower by the Lender;
	 	 	 
		(d)	if
                                         any representation or warranty herein given by the Borrower or any director or officer
                                         thereof is untrue in any material respect as of the date made;
	 	 	 
		(e)	if
                                         an order is made or a resolution is passed for the winding-up or dissolution of the Borrower
                                         or any Principal Subsidiary, or if a petition shall be filed for the winding-up or dissolution
                                         of the Borrower or any Principal Subsidiary thereof, or the Borrower or any Principal
                                         Subsidiary thereof shall otherwise cease to continue as a corporation;



 




    	 



    	- 14 -



    

 


		(f)	if
                                         the Borrower or any of its subsidiaries defaults (i) under the provisions of any instrument,
                                         security, indenture, or document, in each case, in respect of indebtedness for money
                                         borrowed from any person; or (ii) in the payment of any indebtedness of the Borrower
                                         or any of its subsidiaries for money borrowed from any person when due and payable to
                                         such person, or which for any reason has become due and payable prior to the express
                                         demand date, in any case in relation to any indebtedness in the aggregate principal amount
                                         then outstanding is in excess of $250,000.00;
	 	 	 
		(g)	if
                                         the Borrower or any Principal Subsidiary thereof shall commit any act of bankruptcy or
                                         shall make an assignment in bankruptcy, any other assignment for the benefit of creditors,
                                         any proposal under the Bankruptcy and Insolvency Act (Canada) or any comparable
                                         law, the seeking of relief under the Companies’ Creditors Arrangement Act (Canada),
                                         the United States Bankruptcy Code, the Winding-Up and Restructuring Act (Canada)
                                         or any other bankruptcy, insolvency, or analogous law, or if a bankruptcy petition shall
                                         be filed or presented against the Borrower or any Principal Subsidiary thereof and not
                                         dismissed, stayed or discharged within 60 days;
	 	 	 
		(h)	if
                                         a receiver, receiver-manager, trustee, custodian, liquidator, or similar agent is appointed
                                         for the Borrower or any Principal Subsidiary thereof or for all or substantially all
                                         of the property or the Borrower or any Principal Subsidiary thereof;
	 	 	 
		(i)	if
                                         any execution, sequestration, extent or any other process of any court shall become enforceable
                                         against the Borrower or any Principal Subsidiary thereof, or if a distress or analogous
                                         process shall be levied upon the property of the Borrower or any Principal Subsidiary
                                         thereof;
	 	 	 
		(j)	if
                                         a Change of Control of the Borrower or any Principal Subsidiary thereof occurs without
                                         prior written approval of the Lender;
	 	 	 
		(k)	if
                                         a resolution is passed or actions are taken by the Borrower for the sale of all or substantially
                                         all of the assets of the Borrower or any Principal Subsidiary thereof, other than substantially
                                         in accordance with the Letter of Intent, without prior written approval of the Lender;
	 	 	 
		(l)	if
                                         the Borrower shall cease or threaten to cease to carry on its business; or
	 	 	 
		(m)	if
                                         the Borrower makes default in observing or performing any of the agreements or covenants,
                                         which agreements or covenants are material, contained in any lease, licence, debenture,
                                         deed of trust, or agreement whereby any property or rights of the Borrower may become
                                         liable for forfeiture or where any such lease, licence, debenture, deed of trust, or
                                         agreement would be subject to termination and such default continues for 30 days after
                                         written Notice to the Borrower from the Lender.



 




    	 



    	- 15 -



    

 


	6.2	Remedies
                                         Upon Default.



 


		(a)	Upon
                                         the occurrence of an Event of Default which arises as a result of any of the following:



 


		(i)	if
                                         the Lender terminates the Letter of Intent without the prior written consent of the Borrower;
	 	 	 
		(ii)	if
                                         the Lender terminates any Definitive Agreement without the prior written consent of the
                                         Borrower; or
	 	 	 
		(iii)	if
                                         any other party to the Letter of Intent or the Definitive Agreement terminates such agreement
                                         based on the Lender or any of its affiliates’ breach of any provision thereof;
	 	 	 
	 	the
                                         Lender may demand the repayment of the Loan within 30 days following such demand, together
                                         with all accrued and unpaid interest which then remains unpaid thereon, and the Borrower
                                         shall make such repayment to the Lender in full within such 30 day period.



 


		(b)	Upon
                                         the occurrence of an Event of Default other than those specified in Subsection 6.2(a),
                                         the Lender may demand the immediate repayment of the Loan, together with all accrued
                                         and unpaid interest which then remains unpaid thereon, and the Borrower shall promptly
                                         make such repayment to the Lender in full.
	 	 	 
		(c)	With
                                         respect to any Events of Default, the Lender may enforce its remedies to the full extent
                                         permitted by applicable law, under this Agreement and for any of such purposes may commence
                                         such legal action or proceedings as, in its sole discretion, it may deem expedient all
                                         without any Notice, presentation, further demand, protest, Notice of protest, or any
                                         other action, Notice of all of which are hereby expressly waived by the Borrower except
                                         to the extent set forth herein.



 


	7.	GENERAL
                                         PROVISIONS
	 	 
	7.1	Governing
                                         Law. This Agreement and all matters arising hereunder shall be governed by, construed
                                         and enforced in accordance with the laws in the Province of British Columbia and the
                                         federal laws of Canada applicable therein. The Parties irrevocably attorn to the jurisdiction
                                         of the Courts of British Columbia, which will have non-exclusive jurisdiction over any
                                         matter or dispute arising out of the Agreement.
	 	 
	7.2	Currency.
                                         All sums of money to be paid or calculated pursuant to this Agreement shall be paid or
                                         calculated in currency of Canadian dollars. All references to “$” are references
                                         to Canadian dollars.



 




    	 



    	- 16 -



    

 


	7.3	Notices.
                                         All Notices and other communications hereunder shall be in writing and shall be deemed
                                         to have been duly given if delivered by hand or mailed postage prepaid addressed as follows:



 


To
the Lender:


 


ECC
Ventures 2 Corp.


2200
HSBC Building


885
W. Georgia St.


Vancouver,
BC V6C 3E8


 


Attn:
Scott Ackerman


 


To
the Borrower:


 


Long
Island Brand Beverages LLC


12-1
Dubon Court


Farmingdale,
NY 11735


 


Attn:
Andy Shape


 


	 	or
                                         to such other address as may be given in writing by the Parties and shall be deemed to
                                         have been received, if delivered by hand, on the date of delivery and if mailed as aforesaid
                                         to the addresses set out above then on the fifth business day following the posting thereof
                                         provided that if there shall be between the time of mailing and the actual receipt of
                                         the Notice a mail strike, slowdown or other labour dispute which might affect the delivery
                                         of the Notice by the mails, then the Notice shall only be effective if actually delivered.
	 	 
	7.4	Binding
                                         Effect. This Agreement shall enure to the benefit of and be binding upon the Parties
                                         hereto and their respective successors and assigns.
	 	 
	7.5	Severability
                                         of Clauses. In the event that any provision of this Agreement or any part thereof
                                         is invalid, illegal, or unenforceable, the validity, legality, and enforceability of
                                         the remaining provisions shall not in any way be affected or impaired thereby.
	 	 
	7.6	Entire
                                         Agreement. This Agreement, the Promissory Notes, and the General Security Agreement
                                         constitute the entire agreement between the Parties with respect to the subject matter
                                         hereof and shall supersede all previous expectations, understandings, communications,
                                         representations and agreements whether verbal or written between the Parties with respect
                                         to the subject matter hereof. This Agreement does not confer any rights or remedies upon
                                         any person other than the Parties and their respective successors and permitted assigns.
	 	 
	7.7	Further
                                         Assurances. Each of the Parties hereto hereby covenants and agrees to execute such
                                         further and other documents and instruments and do such further and other things as may
                                         be necessary or desirable to implement and carry out the intent of this Agreement.
	 	 
	7.8	Assignment.
                                         Without the prior written consent of the other Party, neither Party may assign or transfer
                                         their respective rights under this Agreement, nor may the Borrower transfer any portion
                                         of the Loan, except that the Lender may assign its rights under this Agreement upon the
                                         occurrence of an Event of Default.



 




    	 



    	- 17 -



    

 


	7.9	Waiver
                                         and Amendment. No indulgence or forbearance by the Lender hereunder shall be deemed
                                         to constitute a waiver of the Lender’s rights to insist on performance in a full
                                         and in a timely manner of all covenants of the Borrower hereunder and any such waiver,
                                         in order to be binding upon the Lender, must be express and in writing and signed by
                                         the Lender, and then such waiver shall be effective only in the specific instance and
                                         for the purpose for which it is given, and no waiver of any provision, condition, or
                                         covenant shall be deemed to be a waiver of the Lender’s right to require full and
                                         timely compliance with the same provision, condition, or covenant thereafter, or with
                                         any other provision, covenant or condition of this Agreement at any time. No amendment
                                         to this Agreement shall be valid unless it is evidenced by a written agreement executed
                                         by all of the Parties hereto.
	 	 
	7.10	Costs,
                                         Expenses. Each Party will bear its own costs and expenses in connection with the
                                         Loan or any Advances provided for herein, including, without limitation, the costs and
                                         expenses of all attorneys, accountants, and advisors of such Party.
	 	 
	7.11	Counterparts
                                         and Electronic Signatures. This Agreement may be executed in two or more counterparts,
                                         each of which shall be deemed to be an original and all of which together shall constitute
                                         one and the same agreement. This Agreement will be considered fully executed when all
                                         Parties have executed an identical counterpart, notwithstanding that all signatures may
                                         not appear on the same counterpart. This Agreement may be executed and delivered by electronic
                                         signature and shall be binding on all Parties hereto as if executed by original signature
                                         and delivered personally.



 


[SIGNATURE
PAGE TO IMMEDIATELY FOLLOW]


 




    	 



    	 



    

 


IN
WITNESS WHEREOF the Parties hereto have executed this Agreement as of the day and year first above written.


 


	 	ECC
    VENTURES 2 CORP.
	 	 
	 	 
	 	Name:
	 	Title:


 


	 	LONG
    ISLAND BRAND BEVERAGES LLC
	 	 
	 	 
	 	Name:
	 	Title:


 


	 	LONG
    BLOCKCHAIN CORP.
	 	 
	 	 
	 	Name:
	 	Title: