Document:

C21 Investments Inc.: Exhibit 4.4 - Filed by newsfilecorp.com

    

    THIS SETTLEMENT AGREEMENT is dated effective on the 4th day of November, 2021 (the "Effective Date"),

    BETWEEN:

    SKYLER D. PINNICK, EDMOND F. FUNTANELLAS, ALLISTER D. SCHULTZ, TYSON J. HAWKINS, NORWAY T. PINNICK, KEVIN J. SNAVELY, RUSSELL R. ROTONDI and NOEL M. MARTIN (formerly Noel M. Pinnick), individuals resident in the State of Oregon

    (the "Vendors")

    AND:

    C21 INVESTMENTS INC., a corporation duly incorporated under the laws of the Province of British Columbia

    ("C21")

    AND:

    320204 OREGON HOLDINGS CORP., a corporation duly incorporated under the laws of the State of Oregon

    ("320204")

    (individually each a "Party" and collectively the "Parties")

    RECITALS

    WHEREAS:

    A. Pursuant to a Membership Interest Purchase Agreement dated October 16, 2018, as assigned and amended by the assignment and amendment of purchase agreement dated February 1, 2019, among C21 and its assignee, 320204, as the purchaser (collectively, the "Purchaser"), and the Vendors, as vendor, inter alia (together the "Purchase Agreement"), the parties contracted for the Vendor to sell and the Purchaser to buy all of the issued and outstanding membership interests (the "Membership Interests") in each of Phantom Venture Group, LLC and Phantom Brands, LLC;

    B. Pursuant to the Purchase Agreement, a portion of the aggregate purchase price payable by the Purchaser to the Vendor for the Membership Interests was to be paid by delivery to the Vendors, in their ES Proportionate Shares, of up to 4,500,000 common shares of C21 ("Common Shares") during the seven year period commencing on the Closing Date as more particularly described in Section 2.3(c) of the Purchase Agreement (the "Earnout Share Obligation"); and

    C. The Vendors have agreed to accept, in full and final settlement of the Earnout Share Obligation, 1,300,000 Common Shares and to forgive the remaining part of the Earnout Share Obligation on the terms and subject to the conditions set out herein.

    
        SETTLEMENT AGREEMENT

    

    

    AGREEMENT

    NOW THEREFORE in consideration of the payment of $10.00 now paid by each of the Parties to the others (the receipt and sufficiency of which is hereby acknowledged) and of the covenants and agreements herein set forth and other good and valuable consideration, the Parties covenant and agree with one another as follows:

    ARTICLE 1 - DEFINITIONS

    1.1 Unless the context otherwise requires, capitalized terms which are used in this Settlement Agreement ("Agreement") (including the Recitals), and not otherwise defined herein, have the meanings given to them in the Purchase Agreement.

    ARTICLE 2 - TERMS AND CONDITIONS

    2.1 The Recitals are incorporated herein by reference.

    2.2 Subject to the conditions set out in Section 2.3 hereof, C21 agrees to issue to the Vendors, and the Vendors agree to accept, 1,300,000 fully paid and non-assessable Common Shares (the "Settlement Shares") at a deemed issue price of CAD$0.66 per share, or such other price acceptable to the Canadian Securities Exchange (the "CSE") in the proportions set out below in full and final satisfaction of the Earnout Share Obligation.

    	
                Vendor

            	
                Common Shares

            
	
                SKYLER D. PINNICK

            	
                520,004

            
	
                EDMOND F. FUNTANELLAS

            	
                111,428

            
	
                ALLISTER D. SCHULTZ

            	
                111,428

            
	
                TYSON J. HAWKINS

            	
                111,428

            
	
                NORWAY T. PINNICK

            	
                111,428

            
	
                KEVIN J. SNAVELY

            	
                111,428

            
	
                RUSSELL R. ROTONDI

            	
                111,428

            
	
                NOEL M. MARTIN

            	
                111,428

            

    2.3 Completion of this transaction and the issuance of the Settlement Shares to the Vendor is subject to C21's receipt of applicable regulatory or stock exchange approval.

    2.4 The Vendors hereby covenant with the Purchaser to accept the issuance and delivery of the Settlement Shares from the C21 in full settlement and satisfaction of the Earnout Share Obligation, and hereby covenant to absolutely release and fully discharge the Purchaser from the Earnout Share Obligation pursuant to the Purchase Agreement upon receipt thereof.

    2.5 The Vendors acknowledge and agree that:

    (a) the Settlement Shares are subject to a Canadian hold period and may not be traded except pursuant to available exemptions from prospectus and registration requirements of the applicable securities laws;

    (b) the Settlement Shares have not been and will not be registered under the United States Securities Act of 1933, as amended;

    (c) no prospectus has been filed by C21 with the British Columbia or any other securities commission in connection with the issuance of the Settlement Shares;

    
        SETTLEMENT AGREEMENT

    

    

    (d) no securities commission or similar regulatory authority has reviewed or passed on the merits of the Settlement Shares;

    (e) there are restrictions on the Vendors' ability to resell the Settlement Shares and it is the responsibility of each Vendor to find out what those restrictions are and to comply with them before selling the Settlement Shares; and

    (f) the Purchaser has advised the Vendors that the Purchaser is relying on an exemption from the requirements to provide the Vendors with a prospectus and to issue securities through a person registered to sell securities under the Securities Act (British Columbia) and, as a consequence of acquiring the Settlement Shares pursuant to this exemption, certain protections, rights and remedies provided by the Securities Act (British Columbia), including statutory rights of rescission or damages, will not be available to the Vendors.

    2.6 The Vendor covenants and agrees that transfer restrictions on the Settlement Shares are imposed by applicable laws or requirements of securities regulatory authorities or the CSE and that certificates for the Settlement Shares will be imprinted with appropriate legends should the Purchaser deem it necessary or appropriate to do so in order to comply with the requirements of any regulatory authorities having jurisdiction over C21's securities.

    2.7 The Vendors acknowledge that there are no representations or warranties given by the Purchaser or its directors or officers concerning the present or future value of the Settlement Shares.

    2.8 C21 confirms that there are no current discussions, negotiations, representations, or commitments with any third-party, including C21's financial consultants, that contemplate any financing or transaction which would result in the acquisition or issuance of C21 shares at a price at or above CAD$3.00 per share.

    ARTICLE 3- MUTUAL RELEASE

    3.1 In consideration of the execution by each Party of this Agreement and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, each Party on behalf of itself and its respective subsidiaries, partners, agents, successors, assigns, heirs, administrators, officers, directors, employees executors, and attorneys ("Affiliates") hereby forever and finally releases, relieves, acquits, absolves and discharges the other Party and their Affiliates from all manner of actions, causes of action, claims or demands, loss or injury, suits, debts, sums of money, indemnity, expenses, interest, costs, damages and claims of any and every kind and nature whatsoever, at law or in equity and howsoever arising, past, present or future  that they may have against the other party and their Affiliates, including without limitation claims for indemnification, based upon, related to, or by reason of any matter, cause, fact, act or omission occurring or arising at any moment out of the Earnout Share Obligation. This release includes, but is not limited to, any and all alleged claims under common law, public policy, contracts (whether oral or written, express or implied) or tort law, or any other provincial, state or federal law or regulation having any bearing whatsoever on the Earnout Share Obligation.

    ARTICLE 4- MISCELLANEOUS 

    4.1 The Parties hereby represent and warrant that the undersigned have the legal authority to enter into this Agreement and bind the Parties.

    
        SETTLEMENT AGREEMENT

    

    

    4.2 This Agreement supersedes all previous written and oral agreements, understandings or discussions relating to the subject matter of this Agreement.

    4.3 This Agreement will enure to the benefit of and be binding upon the Parties and their respective successors and assigns.

    4.4 The Parties will sign other documents and take other actions reasonably necessary to further effect and evidence this Agreement.

    4.5 This Agreement shall be governed by and construed in accordance with the laws of the Province of British Columbia, Canada, and the parties irrevocably attorn and submit to the jurisdiction of the courts of the Province of British Columbia, Canada with respect to any dispute related to this Agreement. 

    4.6 This Agreement may be executed in one or more counterparts (including by facsimile, .PDF or other electronic method), each of which shall be deemed an original, but all of which, together, shall constitute one and the same instrument.

    [signature page follows]

    
        SETTLEMENT AGREEMENT

    

    

    IN WITNESS WHEREOF the parties have caused this Agreement to be duly executed as of the Effective Date first written above.

     

    C21 INVESTMENTS INC.

    Per: _"Michael Kidd"_______________

    Name: Michael Kidd      

    Title: Director and CFO

     

    320204 OREGON HOLDINGS CORP.

     

    Per: __"Michael Kidd"___________

    Name: Michael Kidd 

    Title: President

     

    	
                "Edmond Funtanellas"

            	
                 

            	
                "Skyler Pinnick"

            
	
                EDMOND F. FUNTANELLAS

            	
                 

            	
                SKYLER D. PINNICK

            
	
                 

            	
                 

            	
                 

            
	
                 

            	
                 

            	
                 

            
	
                 

            	
                 

            	
                 

            
	
                "Tyson Hawkins"

            	
                 

            	
                "Russell Rotondi"

            
	
                TYSON J. HAWKINS

            	
                 

            	
                RUSSELL R. ROTONDI

            
	
                 

            	
                 

            	
                 

            
	
                 

            	
                 

            	
                 

            
	
                 

            	
                 

            	
                 

            
	
                "Noel Martin"

            	
                 

            	
                "Allister Schultz"

            
	
                NOEL M. MARTIN

            	
                 

            	
                ALLISTER D. SCHULTZ

            
	
                 

            	
                 

            	
                 

            
	
                 

            	
                 

            	
                 

            
	
                 

            	
                 

            	
                 

            
	
                "Norway Pinnick"

            	
                 

            	
                "Kevin Snavely"

            
	
                NORWAY T. PINNICK

            	
                 

            	
                KEVIN J. SNAVELY

            

    

    
         

    

    
        SETTLEMENT AGREEMENT: SIGNATURE PAGEC21 Investments Inc.: Exhibit 4.5 - Filed by newsfilecorp.com

    

    C21 INVESTMENTS INC.

    November 16, 2020

    Sonny Newman

    9455 Double R Blvd.

    Reno, NV 89521

    Double G Holdings, LLC

    9455 Double R Blvd.

    Reno, NV 89521

    NewJohn, LLC

    9455 Double R Blvd.

    Reno, NV 89521

    Dear Sonny:

    Re: Amendments to $30,000,000 Secured Promissory Note (the "Note") dated January 15, 2019 made by C21 Investments Inc. ("C21") and 320204 Nevada Holdings Corp. ("320204" and with C21, the "Company") in favour of Sonny Newman ("Newman"), as amended, issued pursuant to an Amended and Restated Membership Interest Purchase Agreement dated September 7, 2018, as amended and assigned on January 15, 2019, whereby the Company purchased all of the units of Silver State Relief, LLC ("SSR") and Silver State Cultivation, LLC ("SSC");

    And Re: Amendments to Lease Agreement dated January 1, 2019 between Double G Holdings, LLC ("Double G"), as landlord, and SSC, as tenant, as amended (the "Warehouse Lease") in respect of certain premises located at 240 S. Stanford Way, Sparks, Nevada;

    And Re: Amendments to Lease Agreement dated January 1, 2019 between Double G, as landlord, and SSR, as tenant, as amended (the "Dispensary Lease") in respect of certain premises located at 175 E. Greg Street, Sparks, Nevada;

    And Re: Amendments to Lease Agreement dated December 12, 2018 between NewJohn, LLC, as landlord, and 320204, as tenant, as amended (the "Fernley Lease") in respect of certain premises located at 1301 Financial Way, Fernley Nevada.

    RECITALS

    A. The parties to this letter agreement wish to amend, ratify and confirm the terms of the Note, the Warehouse Lease, the Dispensary Lease and the Fernley Lease as applicable between them, as set forth below.

    AGREEMENT

    In consideration of the sum of $10 now paid by each of the parties to the others, the receipt and sufficiency of which are hereby acknowledged, the parties to this letter agreement hereby agree as follows:

    

    1. The Recitals are incorporated herein by reference.

    2. All dollar amounts herein are in US Dollars.

    3. The principal amount outstanding under the Note as at date of this Agreement is $15,200,000.00 and unpaid interest is accrued thereon from November 1, 2020 at the rate of 9.5% per annum.

    4. Newman and the Company hereby amend the Note and agree as follows:

    (a) subject to paragraph (b) below, the principal amount of the Note shall be paid in thirty (30) equal monthly installments of $506,666.67 each, commencing on December 1, 2020 and continuing on the first day of each month thereafter until the entire principal amount has been paid; and

    (b) notwithstanding the foregoing, if required by Newman, the Company shall pay up to 30% of the net proceeds of any new debt or equity issue by the Company on account of the principal amount of the Note.

    (c) interest shall continue to accrue on the outstanding principal balance under the Note from time to time at the rate of 9.5% per annum, based on a 365-day year, and that payments of such interest shall  be made monthly in arrears; and

    (d) all terms and provisions of the Note are hereby ratified and confirmed, save and except as amended hereby.

    5. Double G and SSC hereby amend the Warehouse Lease and agree as follows:

    (a) the Term (as defined in the Warehouse Lease) is extended until November 30, 2027; provided however that the tenant shall have a right to extend the Term of the Lease for a further five (5) years on the same terms and provisions, save and except that there shall be no further right of extension;

    (b) commencing December 1, 2020, the Base Rent (as defined in the Warehouse Lease) shall be $58,000 per month, with an annual increase commencing on January 1, 2022 and continuing on each subsequent January 1 throughout the Term, at the rate of 3% per annum; and

    (c) all terms and provisions of the Warehouse Lease are hereby ratified and confirmed, save and except as amended hereby.

    6. Double G and SSR hereby amend the Dispensary Lease and agree as follows:

    (a) the Term (as defined in the Dispensary Lease) is extended until November 30, 2027; provided however that the tenant shall have a right to extend the Term of the Lease for a further five (5) years on the same terms and provisions, save and except that there shall be no further right of extension;

    
        2

    

    

    (b) commencing December 1, 2020, the Base Rent (as defined in the Dispensary Lease) shall be $24,000 per month, with an annual increase commencing on January 1, 2022 and continuing on each subsequent January 1 throughout the Term, at the rate of 3% per annum;

    (c) Section 23 is hereby deleted; and

    (d) all terms and provisions of the Dispensary Lease are hereby ratified and confirmed, save and except as amended hereby.

    7. NewJohn and 320204 hereby amend the Fernley Lease and agree as follows:

    (a) the Term (as defined in the Fernley Lease) is extended until November 30, 2027; provided however that the tenant shall have a right to extend the Term of the Lease for a further five (5) years on the same terms and provisions, save and except that there shall be no further right of extension;

    (b) commencing December 1, 2020, the Base Rent (as defined in the Fernley Lease) shall be $18,000 per month, with an annual increase commencing on January 1, 2022 and continuing on each subsequent January 1 throughout the Term, at the rate of 3% per annum;

    (c) Section 23 is hereby deleted; and

    (d) all terms and provisions of the Fernley Lease are hereby ratified and confirmed, save and except as amended hereby.

    8. At any time, at your request, the Company, SSR and SSC will execute such further assurances of the foregoing as you may require, including without limitation, amended and restated instruments in writing consolidating all agreed amendments.

    Please acknowledge your consent and agreement to the forgoing by signing a copy of this Letter Agreement in the space provided below and returning a copy to us.

    [signature pages follow]

    
        3

    

    

    Yours truly,

    C21 INVESTMENTS INC.

    "Michael Kidd"

    Per:  _______________________________

    Michael Kidd, CFO

    Per:  "Bruce Macdonald"____________________

    Bruce Macdonald, Director

     

    320204 NEVADA HOLDINGS CORP.

    By:        "Michael Kidd"                                                         

    Michael Kidd, Secretary

    By:   "Michael Kidd"                                           

    Michael Kidd, Director

     

    SILVER STATE CULTIVATION, LLC

    By:  320204 Nevada Holdings Corp.

    Its: Managing Member

     By:        "Michael Kidd"                                                         

    Michael Kidd, Secretary

    By:   "Michael Kidd"                                                         

    Michael Kidd, Director

     

    SILVER STATE RELIEF, LLC

    By:  320204 Nevada Holdings Corp.

    Its: Managing Member

     By:        "Michael Kidd"                                                         

    Michael Kidd, Secretary

    By:   "Michael Kidd"                                                         

    Michael Kidd, Director

    

    The foregoing is acknowledged and agreed to by the undersigned as of the 16th day of November, 2020.

    "Sonny Newman"

                                                                   

    SONNY NEWMAN

     

    NEWJOHN LLC

    By:  ___"Sonny Newman"

                                                 

    Sonny L. Newman, Owner

     

    DOUBLE G HOLDINGS, LLC

    By:  ___"Sonny Newman"

                                                 

    Sonny L. Newman, Owner

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