Exhibit 10.9


 


EXECUTION VERSION


 


SUBORDINATION AGREEMENT


 


THIS
SUBORDINATION AGREEMENT (this “Agreement”), is entered into as of July 19, 2021 (the “Effective Date”),
by and between CATALINA LP, a limited partnership formed under the laws of Alberta (“Senior Creditor”) and ROCK
CLIFF CAPITAL LLC, a limited liability company formed under the laws of Delaware (“Subordinated Creditor”). Capitalized
terms used but not otherwise defined herein shall have the meanings given them in Section 1(a)
below.


 


RECITALS


 


A. CLEVER
LEAVES HOLDINGS, INC., a British Columbia corporation (“Company”), NS US Holdings, a Delaware corporation and direct
subsidiary of the Company (“Holdings”) and Herbal Brands, Inc., a Delaware corporation and wholly-owned direct subsidiary
of Holdings (the “Herbal Brands” and collectively with the Company and Holdings, the “Loan Parties”),
are indebted and may become further indebted to Senior Creditor pursuant to one or more notes (the “Senior Notes”),
guaranteed pursuant to that certain Guarantee dated as of July 19, 2021 by, inter alia, Holdings and Herbal Brands in favour of Senior
Creditor (as amended, modified, restated, replaced or supplemented from time to time in accordance with this Agreement, the “Senior
Guarantee”), and secured pursuant to that certain Pledge Agreement dated as of July 19, 2021, by the Company in favour of the
Senior Creditor (the “Senior Pledge Agreement”).


 


B. The
Company, Holdings and Herbal Brands (Herbal Brands, in such capacity, the “Subordinated Borrower”), have entered into
certain Subordinated Loan Documents with Subordinated Creditor, which are (i) secured by the Subordinated Secured Assets and (ii) guaranteed
by the Subordinated Guaranty.


 


C. Subordinated
Creditor and the Loan Parties desire to obtain Senior Creditor’s consent to the Subordinated Loan Documents, the incurrence of indebtedness
thereunder by Subordinated Borrower and the guaranty of obligations thereunder by the Company, and Subordinated Creditor and Senior Creditor
desire to agree to and to set forth their respective rights, priorities and interests governing their respective relationships with Company
and the collateral for the loans granted pursuant to the Subordinated Loan Documents and the Senior Loan Documents at all times on and
after the Effective Date.


 


AGREEMENT


 


NOW, THEREFORE, in consideration of the Loan Parties’
and Subordinated Creditor’s entering into the Subordinated Loan Documents, Subordinated Creditor and Senior Creditor hereby agree
as follows:


 


		1.	DEFINITIONS; EFFECTIVENESS



 


(a) DEFINITIONS. As used herein,
the following terms shall have the following meanings: “Discharge of Senior Debt” means all obligations in
respect of the Senior Notes and premium, if any, on such obligations shall have been paid in full (other than contingent
indemnification obligations) or converted as provided in Section 3 and Section 4 of the Senior Notes, and all commitments of the
Senior Creditor to extend credit under the Senior Notes shall have been terminated.


 


“Permissible Securities”
means (i) any debt or convertible debt securities of any Loan Party, any of its subsidiaries, or its direct or indirect parent company,
paid or distributed in respect of any Subordinated Debt in any case or proceeding by or against any Loan Party, any of its subsidiaries,
or its direct or indirect parent company, commenced under the United States Bankruptcy Code or any other insolvency law, the payment of
which is subordinated, at least to the extent provided in this Agreement with respect to the Subordinated Debt, to the payment of all
Senior Debt and all other securities issued in exchange thereof and (ii) any convertible securities, options, capital stock or equity
interests of any Loan Party, any of its subsidiaries, or its direct or indirect parent company, paid or distributed in respect of any
Subordinated Debt.


 




     


     


    

 


“Senior Debt”
means any and all indebtedness and obligations for borrowed money (including, without limitation, principal, premium (if any), interest,
fees, charges, expenses, costs, professional fees and expenses, and reimbursement obligations) at any time owing by the Loan Parties to
Senior Creditor under the Senior Loan Documents (including, without limitation, the Secured Obligations (as defined in the Senior Pledge
Agreement), including but not limited to such amounts as may accrue or be incurred before or after default or workout or the commencement
of any liquidation, dissolution, bankruptcy, receivership, or reorganization case by or against the Loan Parties, the principal amount
of which shall not exceed the Senior Debt Cap.


 


“Senior Debt Cap”
means principal indebtedness under the Senior Notes in an amount outstanding at any time of up to Seventy Million U.S. Dollars ($70,000,000).


 


“Senior Loan Documents”
means each of the Senior Notes, the Senior Guarantee, the Senior Pledge Agreement and any other agreement, security agreement, document,
promissory note, UCC financing statement, or instrument executed by the Loan Parties in favor of Senior Creditor pursuant to or in connection
with the Senior Notes, as the same may from time to time be amended, modified, supplemented, extended, renewed, restated or replaced in
accordance with this Agreement.


 


“Subordinated Debt”
means any and all indebtedness and obligations for borrowed money (including, without limitation, principal, premium (if any), interest,
fees, charges, expenses, costs, professional fees and expenses, and reimbursement obligations) at any time owing by the Loan Parties to
Subordinated Creditor under the Subordinated Loan Documents (including, without limitation, the Obligations (as defined in the Subordinated
Loan Agreement)), including but not limited to such amounts as may accrue or be incurred before or after default or workout or the commencement
of any liquidation, dissolution, bankruptcy, receivership, or reorganization case by or against the Loan Parties.


 


“Subordinated Loan
Documents” means (i) that certain Loan and Security Agreement, dated as of May 3, 2019, between Subordinated Borrower and Subordinated
Creditor providing for an aggregate principal amount of up to Eight Million Five Hundred Thousand Dollars ($8,500,000) (“Subordinated
Loan Agreement”), (ii) that certain Guaranty, dated as of May 3, 2019, between Company and Subordinated Creditor, providing
for a guarantee by the Company of Obligations (as defined in the Subordinated Loan Agreement) (the “Subordinated Guaranty”),
(iii) that certain Pledge Agreement, dated as of May 3, 2019 by and between Holdings and Subordinated Creditor (the “Holdings
Pledge Agreement”) and (iv) any other agreement, document, promissory note, financing statement, or instrument executed by Company
in favor of Subordinated Creditor or its agent pursuant to or in connection with the Subordinated Debt, as the same may from time to time
be amended, modified, supplemented, extended, renewed, restated or replaced in accordance with this Agreement. Any changes to the payment
schedule or the maturity of any of the Subordinated Debt that would require payments of the Subordinated Debt at time or time that is
earlier than the payment schedule or maturity pursuant to the Subordinated Loan Documents as in effect on the Effective Date requires
the prior written approval from Senior Creditor.


 


“Subordinated Secured
Assets” means (i) all (a) the Equity Interests in Herbal Brands owned by Holdings set forth on Exhibit A hereto and (b)
all additional or substitute Equity Interests of any class from time to time issued by Herbal Brands to Holdings, the certificates representing
such additional or substitute Equity Interests and all Stock Rights related thereto; and all proceeds (including Stock Rights) of the
foregoing, together with all books and records, computer files, programs, printouts and other computer materials and records related thereto
and any General Intangibles at any time evidencing or relating to any of the foregoing (all capitalized terms used in this clause (i)
and not otherwise defined herein shall have the meaning given such terms in the Holdings Pledge Agreement) and (ii) all of the following,
whether now owned or hereafter acquired by Herbal Brands: all Accounts; all Chattel Paper; all Commercial Tort Claims; all Contracts;
all Deposit Accounts, all Documents; all General Intangibles, including, without limitation, Intellectual Property; all Goods, Equipment,
Inventory and Fixtures; all Instruments, including, without limitation, all Promissory Notes; all Investment Property; all Letter-of-Credit
Rights; all Money; all Securities Accounts; all Supporting Obligations of Herbal Brands; all other goods and personal property of Herbal
Brands, wherever located, whether tangible or intangible, and whether now owned or hereafter acquired, existing, leased or consigned by
or to Herbal Brands; and, to the extent not otherwise included, all Proceeds of each of the foregoing and all accessions to, substitutions
and replacements for and rents, profits and products of each of the foregoing (all capitalized terms used in this clause (ii) and not
otherwise defined herein shall have the meaning given such terms in the Subordinated Loan Agreement).


 


Unless otherwise specified, all references in
this Agreement to a “Section” shall refer to the corresponding Section in or to this Agreement. The capitalized term “Senior
Collateral” as used in this Agreement has the meaning ascribed to the term “Collateral” in the Senior Intercreditor
Agreement. Other capitalized terms used herein and not otherwise defined herein shall have the meaning given such terms in the Uniform
Commercial Code as in effect in the State of New York, as in effect from time to time (“UCC”).


 




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		2.	SUBORDINATION



 


(a) On
the terms and conditions set forth below, Subordinated Creditor’s right to payment and performance of the Subordinated Debt are
hereby subordinated to Senior Creditor’s right to full payment and performance of the Senior Debt. Subject to and except as set forth
in Section 3, Subordinated Creditor shall not ask, demand, sue for, take or receive from the Loan Parties,
by setoff or in any other manner, the whole or any part of any monies which may now or hereafter be owing by the Loan Parties to Subordinated
Creditor, or be owing by any other person or entity to Subordinated Creditor under a guaranty or similar instrument, on account of the
Subordinated Debt, unless and until the Discharge of Senior Debt.


 


(b) The
subordination contained in this Agreement is intended solely to define the rights and duties of Subordinated Creditor and Senior Creditor;
it is not intended that the Loan Parties or any other person or entity (including any bankruptcy trustee, receiver, or debtor-in-possession)
shall benefit or derive any rights from it. If the effect of the subordination contained in this Agreement would be to give any other
person or entity a priority status to which that person or entity would not otherwise be entitled, then that provision shall, to the extent
necessary to avoid that priority, be given no effect and the rights and priorities of Senior Creditor and Subordinated Creditor shall
be determined in accordance with applicable law and this Agreement. Nothing in this Agreement shall impair, as among the Loan Parties
and Senior Creditor and Subordinated Creditor, the obligations of the Loan Parties, including without limitation the obligations to pay
principal, interest, fees and other amounts, as provided in the Senior Loan Documents and the Subordinated Loan Documents.


 


(c) Notwithstanding
anything in this Agreement to the contrary, nothing herein shall be deemed to subordinate, waive or restrict the contractual or other
rights of Subordinated Creditor under any warrants or capital stock, including without limitation rights with respect to any dividends
or distributions on any thereof or the proceeds of any thereof, that the Loan Parties may issue to Subordinated Creditor from time to
time, nor shall anything herein restrict the performance of the Loan Parties’ obligations under or with respect to such warrants
or such capital stock or other equity interest. Without limiting the foregoing, (i) the term “Subordinated Debt” shall not
include any liabilities, indebtedness or obligations of the Loan Parties under or with respect to any such warrants, capital stock or
equity interests, (ii) the term “Subordinated Loan Documents” shall not include any agreement, document, certificate or instrument
in favor of Subordinated Creditor pursuant to or in connection with any such warrants, capital stock or equity interests and (iii) nothing
in this Agreement shall prevent the Subordinated Creditor from retaining for its own account any dividends or distributions on or the
proceeds of any of such warrants, capital stock or equity interests.


 


(d) In
the event of the occurrence of an Insolvency Event (as hereinafter defined), this Agreement shall remain in full force and effect in accordance
with Section 510(a) of the United States Bankruptcy Code.


 


		3.	PERMITTED PAYMENTS; PAYMENT BLOCKAGE



 


(a) Notwithstanding
anything to the contrary contained in Section 2, but
subject expressly to Section 3(b), Loan
Parties shall be permitted to make, and Subordinated Creditor shall be permitted to ask, demand, sue for, take or receive from Loan Parties,
by setoff or in any other manner, the following permitted payments (“Permitted Payments”): (i) scheduled repayments
of non-accelerated principal when due under the Subordinated Loan Documents; (ii) payments of accrued interest (including default interest)
when due under the Subordinated Loan Documents; (iii) payment of the Back-End Fee (as defined in the Subordinated Loan Agreement) when
due under the Subordinated Loan Documents (iv) payments of reimbursable expenses, costs and professional fees and expenses as and when
due under the Subordinated Loan Documents; (v) payments in Permissible Securities; and (vi) other payments consented to in writing by
Senior Creditor.


 




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(b) Notwithstanding
anything to the contrary contained in this Section 3 or
elsewhere in this Agreement, if Senior Creditor delivers to Subordinated Creditor written notice (a “Blockage Notice”)
which states that there has been a default under the Senior Loan Documents that has not been cured then, during any Blockage Period (as
defined below), Subordinated Creditor shall not accept or receive any payment of any kind of or on account of the Subordinated Debt,
unless and until the earlier of (A) the time Senior Creditor notifies Subordinated Creditor in writing that the default by the Loan Parties
has been cured by the Loan Parties or waived by Senior Creditor (and Senior Creditor agrees that it will promptly notify the Subordinated
Creditor of any such cure or waiver), or (B) the expiration of the Blockage Period for such Blockage Notice. Notwithstanding the foregoing,
Subordinated Creditor may accept and retain (i) any distribution to the Loan Parties’ unsecured creditors constituting the proceeds
of the Loan Parties’ assets that are not otherwise subject to Senior Creditor’s security interest or lien, (ii) payments of
accrued interest (including default interest) when due under the Subordinated Loan Documents, (iii) payments of reimbursable expenses,
costs and professional fees and expenses as and when due under the Subordinated Loan Documents, and (iv) any payments in Permissible
Securities.


 


As used herein, “Blockage
Period” means a period of time beginning on the date a Blockage Notice is delivered to Subordinated Creditor and terminating
on the earlier to occur of:


 


(1) 60 days following
such date; or


 


(2) the written consent
of Senior Creditor.


 


Senior Creditor shall not issue more than one (1) Blockage Notice for
defaults which do not involve a failure to make a payment of Senior Debt in any period of 365 consecutive days.


 


		4.	ENFORCEMENT RIGHTS



 


Notwithstanding anything to
the contrary contained in Section 2, Subordinated Creditor’s rights to accelerate the maturity of the
Subordinated Debt, enforce any claim (including any default remedy) with respect to the Subordinated Debt or the collateral for the Subordinated
Debt, or otherwise to take any action against the Loan Parties or Loan Parties’ property with respect to the Subordinated Debt shall
be subject to any Blockage Period pursuant to Section 3(b); provided, however, notwithstanding
the foregoing, Subordinated Creditor may take any of the following actions: (a) file claims upon the occurrence of an Insolvency Event
(as defined in Section 6 below) pursuant to the terms of Section 6(b); (b) accelerate
the maturity of, or demand as immediately due and payable, all or any portion of the Subordinated Debt (i) upon the occurrence of an Insolvency
Event or (ii) at any time after the Senior Creditor has accelerated the Senior Debt; (c) impose the “Default Rate” (as defined
in the Subordinated Loan Agreement) of interest; (d) provide notice of any default or event of default, even if acceleration is not permitted
under this Agreement; or (e) deliver any notice of exclusive control with respect to any deposit, operating, securities or investment
accounts of the Loan Parties provided that Subordinated Creditor shall not exercise any rights with respect to such accounts in violation
of the terms of this Agreement including, without limitation, withdrawing, disposing or otherwise instructing any person or entity to
post for the account of Subordinated Creditor any cash, funds, securities, entitlements or other property or rights in such accounts or
any proceeds thereof.


 


		5.	ASSIGNMENT OF SUBORDINATED DEBT



 


Subordinated Creditor hereby
covenants to Senior Creditor that prior to the termination of this Agreement in accordance with Section 12, unless
assigned pursuant to an assignment made expressly subject to this Agreement, the entire Subordinated Debt created in favor of Subordinated
Creditor shall continue to be owing only to Subordinated Creditor, and any collateral security therefor (including, without limitation,
the collateral security granted to Subordinated Creditor pursuant to the Subordinated Loan Documents) shall continue to be held solely
for the benefit of Subordinated Creditor. Any promissory note issued pursuant to the Subordinated Loan Agreement shall be legended to
expressly state that it is subject to this Agreement.


 




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		6.	SENIOR CREDITOR’S PRIORITY



 


In the event of any distribution,
division, or application, partial or complete, voluntary or involuntary, by operation of law or otherwise, of all or any part of the property
of the Loan Parties or the proceeds thereof to the creditors of the Loan Parties, or the readjustment of the Senior Debt and the Subordinated
Debt of the Loan Parties, whether by reason of liquidation, bankruptcy, arrangement, receivership, assignment for the benefit of creditors
or any other action or proceeding involving the readjustment of all or any part of the Senior Debt or the Subordinated Debt, or the application
of the property of the Loan Parties to the payment or liquidation thereof, or upon the dissolution, liquidation, reorganization, or other
winding up of the Loan Parties’ business, or upon the sale of all or any substantial part of the Loan Parties’ property (any
of the foregoing being hereinafter referred to as an “Insolvency Event”), then, and in any such event, Senior Creditor
shall be entitled to receive the payment in cash in full of the Senior Debt before Subordinated Creditor shall be entitled to receive
any payment on account of the Subordinated Debt, and to that end and in furtherance thereof:


 


(a) All
payments and distributions of any kind or character, whether in cash, property, or securities, in respect of the Subordinated Debt to
which Subordinated Creditor would be entitled if the Subordinated Debt were not subordinated pursuant to this Agreement, other than Permissible
Securities, shall be paid to Senior Creditor and applied in payment of the Senior Debt;


 


(b) Subordinated
Creditor shall file a claim or claims, on the form required in such proceedings, on or before thirty (30) days prior to the last date
such claims or proofs of claim may be filed pursuant to law or the order of any court exercising jurisdiction over such proceeding; and


 


(c) Notwithstanding
the foregoing, if any payment or distribution of any kind or character, whether in cash, properties or securities, shall be received by
Subordinated Creditor on account of the Subordinated Debt before all of the Senior Debt has been paid in violation of this Agreement,
then such payment or distribution shall be received by Subordinated Creditor in trust for and shall be promptly paid over to Senior Creditor
for application to the payments of amounts due on the Senior Debt until the Discharge of Senior Debt.


 


		7.	GRANT OF AUTHORITY



 


In the event of the occurrence
of an Insolvency Event, and in order to enable Senior Creditor to enforce its rights hereunder in any of the aforesaid actions or proceedings,
Senior Creditor is hereby irrevocably authorized and empowered, in Senior Creditor’s discretion, as follows:


 


(a) Senior
Creditor is hereby irrevocably authorized and empowered (in its own name or in the name of Subordinated Creditor or otherwise), but shall
have no obligation, (i) to demand, sue for, collect and receive every payment or distribution referred to in Section 6,
and give acquittance therefor and (ii) (if Subordinated Creditor has failed to file claims or proofs of claim on or before thirty
(30) days prior to the last date such claims or proofs of claim may be filed pursuant to law or the order of any court exercising jurisdiction
over such proceeding) to file claims and proofs of claim, and (iii) to take such other action (including, without limitation, enforcing
any lien securing payment of the Subordinated Debt) as it may deem necessary or advisable for the exercise or enforcement of any of the
rights or interests of Senior Creditor hereunder. Subordinated Creditor shall duly and promptly take such action as Senior Creditor may
reasonably request to execute and deliver to Senior Creditor such authorizations, endorsements, assignments, or other instruments as Senior
Creditor may reasonably request in order to enable Senior Creditor to enforce any and all claims with respect to, and any liens securing
payment of, the Subordinated Debt as such enforcement is contemplated herein.


 


(b) To
the extent that payments or distributions on account of the Subordinated Debt are made in property or securities other than cash (other
than Permissible Securities), Subordinated Creditor authorizes Senior Creditor to sell or dispose of such property or securities on such
terms as are commercially reasonable in the situation in question. Following full payment in cash of the Senior Debt, Senior Creditor
shall remit to Subordinated Creditor (with all necessary endorsements), to the extent of Subordinated Creditor’s interest therein,
all payments and distributions of cash, property, or securities paid to and held by Senior Creditor in excess of the allowed amount of
the Senior Debt.


 




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		8.	AGREEMENTS OF SUBORDINATED CREDITOR



 


In addition to and without limiting the provisions of Section 7:


 


(a) Until
the Discharge of Senior Debt, Subordinated Creditor shall not commence or join in any involuntary bankruptcy petition or similar judicial
proceeding against the Loan Parties.


 


(b) Notwithstanding
the foregoing, (i) in any proceedings related to an Insolvency Event, Subordinated Creditor may take any action to preserve or protect
the validity and enforceability of its liens so long as no such action is, or could reasonably be expected to be, inconsistent with the
terms of this Agreement, (ii) Subordinated Creditor may file any responsive or defensive pleadings in opposition to any motion, claim,
adversary proceeding or other pleading made by any person or entity objecting to or otherwise seeking the disallowance of the claims of
Subordinated Creditor, including any claims secured by the Subordinated Secured Assets, or the avoidance of any liens held by Subordinated
Creditor or otherwise make any agreements or file any motions pertaining to the Subordinated Debt, in each case, to the extent not inconsistent
with the terms of this Agreement; (iii) Subordinated Creditor may participate in any assert rights and remedies in any insolvency proceeding
against the Loan Parties as an unsecured creditor; and (iv) Subordinated Creditor may enforce any of its rights and exercise any of its
remedies with respect to the Subordinated Secured Assets after the termination of the period set forth in Section 3(b).


 


		9.	PAYMENTS RECEIVED BY SUBORDINATED CREDITOR



 


Should any payment, distribution,
or security be received by Subordinated Creditor upon or with respect to the Subordinated Debt (other than Permitted Payments) prior to
termination of this Agreement in accordance with Section 10, Subordinated Creditor shall receive and hold
the same in trust for the benefit of Senior Creditor and shall forthwith deliver the same to Senior Creditor in precisely the form received
(except for the endorsement or assignment of Subordinated Creditor where necessary) for application to the Senior Debt, and, until so
delivered, the same shall be held in trust by Subordinated Creditor as the property of Senior Creditor.


 


		10.	SUBORDINATED SECURED ASSETS



 


Subordinated Creditor and
the Loan Parties each acknowledge in favour of Senior Creditor that Subordinated Creditor has not been granted any security interest from
the Loan Parties or any other Person to secure the Subordinated Debt other than a security interest in the Subordinated Secured Assets.
Subordinated Creditor covenants in favour of Senior Creditor that during the term of this Agreement it will not take from any Loan Party
(other than Herbal Brands) or any of their affiliates security for the payment of or performance of obligations in respect of the Subordinated
Debt other than the Subordinated Secured Assets. Each of the Loan Parties (other than Herbal Brands) covenants in favour of Senior Creditor
that during the term of this Agreement, it will not deliver or allow the delivery by another Loan Party or any of their affiliates to
Subordinated Creditor any security for the payment of or performance of obligations in respect of the Subordinated Debt other than the
Subordinated Secured Assets. Should any Loan Party (other than Herbal Brands) or any of their respective affiliates breach this covenant,
each of the Loan Parties and Subordinated Creditor acknowledges and agrees that all such security shall be void and of no force or effect
until the Discharge of Senior Obligations.


 


		11.	FURTHER ASSURANCES; COOPERATION



 


Subject to Section 17(b),
Subordinated Creditor agrees to cooperate with Senior Creditor and to take all actions that Senior Creditor may reasonably require
to enable Senior Creditor to realize the full benefits of this Agreement.


 


		12.	TERMINATION OR AMENDMENT OF AGREEMENT



 


This Agreement shall be
effective upon its execution by each of Senior Creditor and Subordinated Creditor. After the Effective Date, this Agreement shall remain
in effect and cannot be revoked or amended by Subordinated Creditor, except with the prior written consent of Senior Creditor. Senior
Creditor and Subordinated Creditor agree that no amendment hereto shall be binding upon the Loan Parties unless the Loan Parties shall
have received notice of such amendment. Subject to Section 14, this Agreement shall terminate upon the date
on which both (a) the Discharge of Senior Debt occurs, and (b) the Senior Loan Documents shall have been terminated.


 




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		13.	SUBROGATION



 


If cash or other property
otherwise payable or deliverable to Subordinated Creditor or on account of the Subordinated Debt shall have been applied pursuant to this
Agreement to the payment of the Senior Debt, and if the Discharge of Senior Debt has occurred, then Subordinated Creditor shall be subrogated
to any rights of Senior Creditor to receive further payments or distributions applicable to the Senior Debt until the Subordinated Debt
shall have been fully paid. No such payments or distributions received by Subordinated Creditor by reason of such subrogation shall, as
between the Loan Parties and its creditor other than Senior Creditor, on the one hand, and Subordinated Creditor, on the other hand, be
deemed to be a payment by the Loan Parties on account of the Subordinated Debt owed to Subordinated Creditor.


 


		14.	SUBORDINATED CREDITOR’S WAIVERS AND COVENANTS



 


(a) Without
limiting the generality of any other waiver made by Subordinated Creditor in this Agreement, Subordinated Creditor hereby expressly waives
(i) reliance by Senior Creditor upon the subordination and other agreements herein provided, and (ii) any claim that Subordinated Creditor
may now or hereafter have against Senior Creditor arising out of any and all actions that Senior Creditor, in good faith, takes or omits
to take (A) with respect to the creation, perfection or continuation of liens in or on any collateral security for the Senior Debt,
(B) with respect to the foreclosure upon, sale, release, or depreciation of, or failure to realize upon, any of the collateral security
for the Senior Debt, (C) with respect to the collection of any claim for all or any part of the Senior Debt from any account debtors,
guarantor or any other third party and (D) with respect to the valuation, use, protection or release of any collateral security for the
Senior Debt.


 


(b) Without
limiting the generality of any other covenant or agreement made by Subordinated Creditor in this Agreement, Subordinated Creditor hereby
covenants and agrees that (i) the Senior Creditor has not made any warranties or representations with respect to the due execution, legality,
validity, completeness or enforceability of the Senior Notes or any of the other Senior Loan Documents, or the collectability of the Senior
Debt; (ii) Subordinated Creditor will not interfere with or in any manner oppose a disposition of any collateral security for the Senior
Debt by Senior Creditor; and (iii) Subordinated Creditor shall endeavor to give Senior Creditor prompt written notice of the occurrence
of any default or event of default under the Subordinated Loan Documents, and shall, simultaneously with giving any notice of default
to the Loan Parties, shall endeavor to provide Senior Creditor with a copy of any notice of default given to the Loan Parties; provided,
that a failure to provide such notices and such copies shall not be deemed to be a breach of this Agreement.


 


		15.	REINSTATEMENT OF SENIOR DEBT



 


To the extent that Senior
Creditor receives payments on or proceeds of any collateral security for the Senior Debt, which payments or proceeds are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, receiver or any other party under
any bankruptcy law, state or federal law, common law, or equitable cause, then, to the extent of such payments or proceeds invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid, the Senior Debt, or part thereof, intended to be satisfied
shall be revived and continue in full force and effect as if such payments or proceeds had not been received by Senior Creditor.


 


		16.	NO WAIVERS



 


Senior Creditor shall not
be prejudiced in its rights under this Agreement by any act or failure to act of the Loan Parties or Subordinated Creditor or any noncompliance
of the Loan Parties or Subordinated Creditor with any agreement or obligation, regardless of any knowledge thereof which Senior Creditor
may have, or with which Senior Creditor may be charged; no action permitted hereunder that has been taken by Senior Creditor shall in
any way affect or impair the rights or remedies of Senior Creditor in the exercise of any other right or remedy or shall operate as a
waiver thereof; no single or partial exercise by Senior Creditor of any right or remedy shall preclude any other or further exercise thereof;
and no modification or waiver of any of the provisions of this Agreement shall be binding upon Senior Creditor, in each case except as
expressly set forth in a writing duly signed and delivered by Senior Creditor.


 




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		17.	INFORMATION CONCERNING COMPANY; CREDIT ADMINISTRATION



 


(a) Each
of Senior Creditor and Subordinated Creditor hereby assumes responsibility for keeping itself informed of the financial condition of the
Loan Parties, any and all endorsers and any and all guarantors of the Senior Debt or Subordinated Debt, as applicable, and of all other
circumstances bearing upon the risk of nonpayment of the Senior Debt or the Subordinated Debt that diligent inquiry would reveal, and
each of Senior Creditor and Subordinated Creditor hereby agrees that the other shall not have any duty to advise it of information known
to the other regarding such condition.


 


(b) Subject
to Sections 3, 4,
7, 8 and
9, Subordinated Creditor may (i)
administer and manage its credit and other relationships with the Loan Parties in its own best interest, and (ii) amend or extend its
agreements with the Loan Parties or enter into additional agreements with the Loan Parties, all without the consent of or notice to Senior
Creditor; provided that neither this Section 17(b) nor
any amendments or additional agreements referred to therein shall impair or affect the subordination of Subordinated Debt or change the
definition of Permitted Payments, Subordinated Debt, Subordinated Creditor, Senior Debt or Senior Creditor.


 


		18.	NOTICES



 


Except as otherwise provided
herein, all notices and service of process required, contemplated, or permitted hereunder or with respect to the subject matter hereof
shall be in writing, and shall be deemed to have been validly served, given or delivered upon the earlier of: (a) the first business day
after transmission by facsimile or hand delivery or deposit with an nationally recognized overnight express service or overnight mail
delivery service; or (b) the fifth calendar day after deposit in the United States mails, with proper first class postage prepaid, and
shall be addressed to the party to be notified as follows:


 


	If to Senior Creditor:	Catalina LP
	 	c/o SAF Group Inc.
	 	1900, 333 7th Avenue S.W.
	 	Calgary, AB T2P 2Z1
	 	 
	If to Subordinated Creditor:	Rock Cliff Capital LLC
	 	c/o Long Light Capital, LLC
	 	412 West 15th Street, 14th Floor
	 	New York, New York 10011


 


		19.	SEVERABILITY



 


Wherever possible, each provision
of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this
Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition
or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.


 


		20.	GOVERNING LAW



 


This Agreement shall be governed
by and interpreted in accordance with the laws of the State of New York without regard to principles or rules that would cause the application
of laws of any other jurisdiction.


 




    - 8 -


     


    

 


		21.	ASSIGNMENT



 


This Agreement shall be
binding upon the Subordinated Creditor and its respective successors and assigns, and shall inure to the benefit of and be enforceable
by Senior Creditor and its successors and assigns.


 


		22.	CONSENT



 


Senior Creditor hereby consents
to the liens and security interests in the Subordinated Secured Assets and the indebtedness created or to be created under Subordinated
Loan Agreement and agrees that the grant or existence of such liens and security interests in the Subordinated Secured Assets does not
and shall not constitute a default or an event of default under or a breach of the Senior Loan Documents or this Agreement. Subordinated
Creditor hereby consents to the liens and security interests in the collateral for the Senior Debt and the indebtedness created or to
be created under the Senior Notes and agrees that the grant or existence of such liens and security interests does not and shall not constitute
a default or an event of default under the Subordinated Loan Documents.


 


		23.	WAIVER AND JUDICIAL REFERENCE



 


TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, SUBORDINATED CREDITOR AND SENIOR CREDITOR EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING
OUT OF OR BASED UPON THIS AGREEMENT, THE SENIOR LOAN DOCUMENTS, THE SUBORDINATED LOAN DOCUMENTS OR ANY CONTEMPLATED TRANSACTION, INCLUDING
CONTRACT, TORT, BREACH OF DUTY, AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS AGREEMENT.
EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.


 


		24.	COUNTERPARTS



 


This Agreement and any amendments,
waivers, consents or supplements hereto may be executed in any number of counterparts, and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an original, but all of which counterparts together shall constitute but
one and the same instrument.


 


		25.	ATTORNEYS’ FEES



 


In the event of any legal
action to enforce the rights of a party under this Agreement, the party prevailing in such action shall be entitled, in addition to such
other relief as may be granted, all reasonable costs and expenses, including reasonable attorneys’ fees, incurred in such action.


 


		26.	ADDITIONAL AGREEMENTS FOR SENIOR CREDITOR



 


(a) Senior
Creditor may administer and manage its credit and other relationships with the Loan Parties in its own best interest, without notice to
or consent of Subordinated Creditor except as expressly set forth in this Agreement. At any time and from time to time, Senior Creditor
may enter into any amendment or agreement with the Loan Parties as Senior Creditor may deem proper, extending the time of payment of or
renewing or otherwise altering the terms of all or any of the obligations constituting Senior Debt or affecting the collateral security
for, supporting or underlying any or all of the Senior Debt, and may exchange, sell, release, surrender or otherwise deal with any such
collateral without in any way thereby impairing or affecting this Agreement, and all such additional agreements and amendments shall be
Senior Loan Documents evidencing the Senior Debt; provided, that Senior Creditor shall not increase the principal amount under the Senior
Creditor Agreement above the limits set forth in the definition of “Senior Debt; and provided further, that neither this
Section 26 nor any provision of
such agreements shall affect the limitations contained in the definitions of Senior Creditor or Senior Debt. Upon written request, Senior
Creditor shall provide Subordinated Creditor with copies of such amendments and/or agreements with the Loan Parties.


 


(b) Without
limiting the generality of any other covenant or agreement made by Senior Creditor in this Agreement, Senior Creditor hereby covenants
and agrees that (i) Senior Creditor shall not contest, challenge or dispute the validity, attachment, perfection, priority or enforceability
of Subordinated Creditor’s security interest in the Subordinated Collateral, or the validity, priority or enforceability of the
Subordinated Debt; and (ii) Senior Creditor shall endeavor to give Subordinated Creditor prompt written notice of the occurrence of any
default or event of default under the Senior Loan Documents, and shall, simultaneously with giving any notice of default to the Loan Parties,
shall endeavor to provide Subordinated Creditor with a copy of any notice of default given to the Loan Parties; provided, that a failure
to provide such notices and such copies shall not be deemed to be a breach of this Agreement.


 


[Signature page follows.]


 




    - 9 -


     


    

 


IN WITNESS WHEREOF, this Agreement has been executed as of the
date first above written.


 


	 	CATALINA LP, by its general partner, 

CATALINA GP INC.
	 	 
	 	Per:	/s/ Aaron Bunting
	 	 	Name: 	 Aaron Bunting
	 	 	Title: 	Chief Financial Officer


 


	 	ROCK CLIFF CAPITcAL LLC


 


	 	Per:	/s/ Justin Korsant
	 	 	Name: 	Justin Korsant
	 	 	Title:	Managing Member


 


Acknowledged and Agreed to by:


 


	 	CLEVER LEAVES HOLDINGS, INC.


 


	 	Per:	/s/ Kyle Detwiler
	 	 	Name: 	Kyle Detwiler
	 	 	Title:	Chief Executive Officer


 


	 	CLEVER LEAVES INTERNATIONAL, INC.


 


	 	Per:	/s/ Kyle Detwiler
	 	 	Name: 	Kyle Detwiler
	 	 	Title:	Chief Executive Officer


 


	 	CLEVER LEAVES US, INC.


 


	 	Per:	/s/ Kyle Detwiler
	 	 	Name: 	Kyle Detwiler
	 	 	Title:	President and Secretary


 


	 	NS US HOLDING, INC.


 


	 	Per:	/s/ Kyle Detwiler
	 	 	Name: 	Kyle Detwiler
	 	 	Title:	Chief Executive Officer


 


	 	HERBAL BRANDS, INC.


 


	 	Per:	/s/ Kyle Detwiler
	 	 	Name: 	Kyle Detwiler
	 	 	Title:	Secretary


 




     


     


    

 


EXECUTION COPY


 


EXHIBIT A


 


EQUITY INTERESTS OF HERBAL BRANDS OWNED BY HOLDINGS


 


	Issuer	 	Shareholder	 	Number and Class of Shares Held
	Clever Leaves International, Inc.	 	Clever Leaves Holdings, Inc.	 	77,322,664 Class A Voting Common Shares
	Clever Leaves US, Inc.	 	Clever Leaves International, Inc.	 	101 Common Shares
	NS US Holdings, Inc.	 	Clever Leaves US, Inc.	 	1 Common Share
	Herbal Brands, Inc.	 	NS US Holdings, Inc.	 	100 Common Shares


 


 


A - 1