Document:

EX-10.5

 Exhibit 10.5 

EXECUTION VERSION 
 Fortress
Value Acquisition Corp. IV 
 1345 Avenue of the Americas 

New York, New York 10105 

October 5, 2020 
 Fortress Value Acquisition
Sponsor IV LLC 
 1345 Avenue of the Americas, 45th Floor 
 New
York, New York 10105 
  

	 	RE:	 Securities Subscription Agreement 

Ladies and Gentlemen: 
 Fortress Value
Acquisition Corp. IV, a Delaware corporation (the “Company”), is pleased to accept the offer Fortress Value Acquisition Sponsor IV LLC, a Delaware limited liability company (the “Subscriber” or
“you”), has made to purchase 17,250,000 shares of the Company’s Class F common stock (the “Shares”), $0.0001 par value per share (the “Class F Common Stock”), up to
2,250,000 of which are subject to complete or partial forfeiture by you if the underwriters of the Company’s initial public offering (“IPO”), if any, do not fully exercise their over-allotment option (the
“Over-allotment Option”). For the purposes of this Agreement, references to “Common Stock” are to, collectively, the Class F Common Stock and the Company’s Class A common stock, $0.0001 par value per
share (the “Class A Common Stock”). Pursuant to the Company’s certificate of incorporation, as amended to the date hereof (the “Charter”), shares of Class F Common Stock will convert
into shares of Class A Common Stock on a one-for-one basis, subject to adjustment, upon the terms and conditions sets forth in the Charter. Unless the context
otherwise requires, as used herein “Securities” shall refer to the Shares and shall be deemed to include any shares of Class A Common Stock issued upon conversion of the Shares. The terms (this “Agreement”) on
which the Company is willing to sell the Shares to the Subscriber, and the Company and the Subscriber’s agreements regarding such Shares, are as follows: 

1. Purchase of Shares. 

For the sum of $25,000 (the “Purchase Price”), which the Company acknowledges receiving in cash, the Company hereby sells and
issues the Shares to the Subscriber, and the Subscriber hereby purchases the Shares from the Company, subject to forfeiture, on the terms and subject to the conditions set forth in this Agreement. Concurrently with the Subscriber’s execution of
this Agreement, the Company shall, at its option, deliver to the Subscriber a certificate registered in the Subscriber’s name representing the Shares (the “Original Certificate”), or effect such delivery in book-entry form.

 2. Representations, Warranties and Agreements. 

2.1 Subscriber’s Representations, Warranties and Agreements. To induce the Company to issue the Securities to the Subscriber, the
Subscriber hereby represents and warrants to the Company and agrees with the Company as follows: 
 2.1.1 No Government
Recommendation or Approval. The Subscriber understands that no federal or state agency has passed upon or made any recommendation or endorsement of the offering of the Securities. 

2.1.2 No Conflicts. The execution, delivery and performance of this Agreement and the consummation by the Subscriber of
the transactions contemplated hereby do not violate, conflict with or constitute a default under (i) the formation and governing documents of the Subscriber, (ii) any agreement, indenture or instrument to which the Subscriber is a party or
(iii) any law, statute, rule or regulation to which the Subscriber is subject, or any agreement, order, judgment or decree to which the Subscriber is subject. 

2.1.3 Organization and Authority. The Subscriber is a Delaware limited liability company, validly existing and in good
standing under the laws of Delaware and possesses all requisite power and authority necessary to carry out the transactions contemplated by this Agreement. Upon execution and delivery by you, this Agreement is a legal, valid and binding agreement of
the Subscriber, enforceable against the Subscriber in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance or similar laws affecting the enforcement of creditors’
rights generally and subject to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity). 

2.1.4 Experience, Financial Capability and Suitability. The Subscriber is: (i) sophisticated in financial matters
and is able to evaluate the risks and benefits of the investment in the Securities and (ii) able to bear the economic risk of its investment in the Securities for an indefinite period of time because the Securities have not been registered
under the Securities Act (as defined below) and therefore cannot be sold unless subsequently registered under the Securities Act or an exemption from such registration is available. The Subscriber is capable of evaluating the merits and risks of its
investment in the Company and has the capacity to protect its own interests. The Subscriber must bear the economic risk of this investment until the Securities are sold pursuant to: (i) an effective registration statement under the Securities
Act or (ii) an exemption from registration available with respect to such sale. The Subscriber is able to bear the economic risks of an investment in the Securities and to afford a complete loss of the Subscriber’s investment in the
Securities. 
 2.1.5 Access to Information; Independent Investigation. Prior to the execution of this Agreement, the
Subscriber has had the opportunity to ask questions of and receive answers from representatives of the Company concerning an investment in the Company, as well as the finances, operations, business and prospects of the Company, and the opportunity
to obtain additional information to verify the accuracy of 

  
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all information so obtained. In determining whether to make this investment, the Subscriber has relied solely on the Subscriber’s own knowledge and understanding of the Company and its
business based upon the Subscriber’s own due diligence investigation and the information furnished pursuant to this paragraph. The Subscriber understands that no person has been authorized to give any information or to make any representations
which were not furnished pursuant to this Section 2 and the Subscriber has not relied on any other representations or information in making its investment decision, whether written or oral, relating to the Company, its operations and/or its
prospects. 
 2.1.6 Regulation D Offering. The Subscriber represents that it is an “accredited investor” as
such term is defined in Rule 501(a) of Regulation D under the Securities Act of 1933, as amended (the “Securities Act”), and acknowledges the sale contemplated hereby is being made in reliance on a private placement exemption
applicable to “accredited investors” within the meaning of Section 501(a) of Regulation D under the Securities Act or similar exemptions under state law. 

2.1.7 Investment Purposes. The Subscriber is purchasing the Securities solely for investment purposes, for the
Subscriber’s own account and not for the account or benefit of any other person, and not with a view towards the distribution or dissemination thereof. The Subscriber did not decide to enter into this Agreement as a result of any general
solicitation or general advertising within the meaning of Rule 502 under the Securities Act. 
 2.1.8 Restrictions on
Transfer; Shell Company. The Subscriber understands the Securities are being offered in a transaction not involving a public offering within the meaning of the Securities Act. The Subscriber understands the Securities will be “restricted
securities” within the meaning of Rule 144(a)(3) under the Securities Act and the Subscriber understands that the certificates or book-entries representing the Securities will contain a legend in respect of such restrictions. If in the future
the Subscriber decides to offer, resell, pledge or otherwise transfer the Securities, such Securities may be offered, resold, pledged or otherwise transferred only pursuant to: (i) registration under the Securities Act, or (ii) an
available exemption from registration. The Subscriber agrees that if any transfer of its Securities or any interest therein is proposed to be made, as a condition precedent to any such transfer, the Subscriber may be required to deliver to the
Company an opinion of counsel satisfactory to the Company. Absent registration or an exemption, the Subscriber agrees not to resell the Securities. The Subscriber further acknowledges that because the Company is a shell company, Rule 144 may not be
available to the Subscriber for the resale of the Securities until at least one year following consummation of the initial business combination of the Company, despite technical compliance with the requirements of Rule 144 and the release or waiver
of any contractual transfer restrictions. 
 2.1.9 No Governmental Consents. No governmental, administrative or other
third party consents or approvals are required, necessary or appropriate on the part of the Subscriber in connection with the transactions contemplated by this Agreement. 

  
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 2.2 Company’s Representations, Warranties and Agreements. To induce the
Subscriber to purchase the Securities, the Company hereby represents and warrants to the Subscriber and agrees with the Subscriber as follows: 

2.2.1 Organization and Corporate Power. The Company is a Delaware corporation and is qualified to do business in every
jurisdiction in which the failure to so qualify would reasonably be expected to have a material adverse effect on the financial condition, operating results or assets of the Company. The Company possesses all requisite corporate power and authority
necessary to carry out the transactions contemplated by this Agreement. 
 2.2.2 No Conflicts. The execution, delivery
and performance of this Agreement and the consummation by the Company of the transactions contemplated hereby do not violate, conflict with or constitute a default under (i) the Charter or bylaws of the Company, (ii) any agreement,
indenture or instrument to which the Company is a party or (iii) any law, statute, rule or regulation to which the Company is subject, or any agreement, order, judgment or decree to which the Company is subject. 

2.2.3 Title to Securities. Upon issuance in accordance with, and payment pursuant to, the terms hereof and the Charter,
the Securities will be duly and validly issued, fully paid and nonassessable. Upon issuance in accordance with, and payment pursuant to, the terms hereof and the Charter, the Subscriber will have or receive good title to the Securities, free and
clear of all liens, claims and encumbrances of any kind, other than (a) transfer restrictions hereunder and under the other agreements to which the Securities may be subject, (b) transfer restrictions under federal and state securities
laws, and (c) liens, claims or encumbrances imposed due to the actions of the Subscriber. 
 2.2.4 No Adverse
Actions. There are no actions, suits, investigations or proceedings pending, threatened against or affecting the Company which: (i) seek to restrain, enjoin, prevent the consummation of or otherwise affect the transactions contemplated by
this Agreement or (ii) question the validity or legality of any transactions or seeks to recover damages or to obtain other relief in connection with any transactions. 

2.2.5 Authorization. The shares of Class A Common Stock issuable upon conversion of the Shares have been duly
authorized and reserved for issuance upon such conversion. 
 2.2.6 No General Solicitation. Neither the Company
nor any of its affiliates or any person or entity acting on its or their behalf has engaged directly or indirectly in any form of general solicitation or general advertising within the meaning of Rule 502 under the Securities Act in connection
with the offering, issuance and sale of the Class F Common Stock. 

  
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 3. Forfeiture of Shares. 

3.1 Partial or No Exercise of the Over-allotment Option. In the event the Over-allotment Option granted to the underwriters of the IPO
is not exercised in full, the Subscriber acknowledges and agrees that it (or, if applicable, it and any transferees of Shares) shall forfeit any and all rights to such number of Shares (up to an aggregate of 2,250,000 Shares and pro rata based upon
the percentage of the Over-allotment Option exercised) such that immediately following such forfeiture, the Subscriber (and any such transferees) will own an aggregate number of Shares equal to 20% of the issued and outstanding Common Stock
immediately following the IPO. 
 3.2 Termination of Rights as Stockholder. If any of the Shares are forfeited in accordance with this
Section 3, then after such time the Subscriber (or successor in interest), shall no longer have any rights as a holder of such forfeited Shares, and the Company shall take such action as is appropriate to cancel such forfeited Shares. 

3.3 Share Certificates. In the event an adjustment to the Original Certificates, if any, is required pursuant to this Section 3,
then the Subscriber shall return such Original Certificates to the Company or its designated agent as soon as practicable upon its receipt of notice from the Company advising the Subscriber of such adjustment, following which a new certificate (the
“New Certificate”), if any, shall be issued in such amount representing the adjusted number of Shares held by the Subscriber. The New Certificate, if any, shall be returned to the Subscriber as soon as practicable. Any such
adjustment for any uncertificated securities held by the Subscriber shall be made in book-entry form. 
 4. Waiver of Liquidation
Distributions; Redemption Rights. In connection with the Shares purchased pursuant to this Agreement, the Subscriber hereby waives any and all right, title, interest or claim of any kind in or to any distributions by the Company from the trust
account which will be established for the benefit of the Company’s public stockholders and into which substantially all of the proceeds of the IPO will be deposited (the “Trust Account”), in the event of a liquidation of the
Company upon the Company’s failure to timely complete an initial business combination. For purposes of clarity, in the event the Subscriber purchases securities in the IPO or in the aftermarket, any Class A Common Stock so purchased shall
be eligible to receive any liquidating distributions by the Company. However, in no event will the Subscriber have the right to redeem any shares of Common Stock held by it into funds held in the Trust Account upon the successful completion of an
initial business combination. 
 5. Restrictions on Transfer. 

5.1 Securities Law Restrictions. In addition to any restrictions to be contained in that certain letter agreement (commonly known as an
“Insider Letter”) dated on or prior to the closing of the IPO by and between the Subscriber and the Company, the Subscriber agrees not to sell, transfer, pledge, hypothecate or otherwise dispose of all or any part of the Securities
unless, prior thereto (a) a registration statement on the appropriate form under the Securities Act and applicable state securities laws with respect to the Securities proposed to be transferred shall then be effective or (b) the Company
has received an opinion from counsel reasonably satisfactory to the Company, that such registration is not required because such transaction is exempt from registration under the Securities Act and the rules promulgated by the Securities and
Exchange Commission thereunder and with all applicable state securities laws. 

  
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 5.2 Lock-up. The Subscriber acknowledges that
the Securities will be subject to lock-up provisions (the “Lock-up”) contained in the Insider Letter. 

5.3 Restrictive Legends. All certificates representing the Securities shall have endorsed thereon legends substantially as follows: 

“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS
AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH
ACT AND SUCH LAWS WHICH, IN THE OPINION OF COUNSEL (IF THE COMPANY SO REQUESTS), IS AVAILABLE.” 
 “THE SECURITIES
REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A LOCKUP AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED DURING THE TERM OF THE LOCKUP.” 

5.4 Additional Shares or Substituted Securities. In the event of the declaration of a share dividend, the declaration of an
extraordinary dividend payable in a form other than Common Stock, a spin-off, a share split, an adjustment in conversion ratio, a recapitalization or a similar transaction affecting the Company’s
outstanding Common Stock without receipt of consideration, any new, substituted or additional securities or other property which are by reason of such transaction distributed with respect to any Securities subject to this Section 5 or into
which such Securities thereby become convertible shall immediately be subject to this Section 5 and Section 3. Appropriate adjustments to reflect the distribution of such securities or property shall be made to the number and/or class of
Securities subject to this Section 5 and Section 3. 
 5.5 Registration Rights. The Subscriber acknowledges that the Shares
are being purchased pursuant to an exemption from the registration requirements of the Securities Act and will become freely tradable only after certain conditions are met or they are registered pursuant to a registration rights agreement to be
entered into with the Company prior to the closing of the IPO (the “Registration Rights Agreement”). 
 6. Other
Agreements. 
 6.1 Further Assurances. The Subscriber agrees to execute such further instruments and to take such further action
as may reasonably be necessary to carry out the intent of this Agreement. 
 6.2 Notices. All notices, statements or other documents
which are required or contemplated by this Agreement shall be: in writing and delivered (i) personally or sent by first class registered or certified mail, overnight courier service or facsimile or electronic transmission to the address
designated in writing, (ii) by facsimile to the number most recently provided to 

  
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such party or such other address or fax number as may be designated in writing by such party or (iii) by electronic mail, to the electronic mail address most recently provided to such party
or such other electronic mail address as may be designated in writing by such party. Any notice or other communication so transmitted shall be deemed to have been given on the day of delivery, if delivered personally, on the business day following
receipt of written confirmation, if sent by facsimile or electronic transmission, one (1) business day after delivery to an overnight courier service or five (5) days after mailing if sent by mail. 

6.3 Entire Agreement. This Agreement, together with the Insider Letter and the Registration Rights Agreement, each substantially in the
form to be filed as an exhibit to the Registration Statement, embodies the entire agreement and understanding between the Subscriber and the Company with respect to the subject matter hereof and supersedes all prior oral or written agreements and
understandings relating to the subject matter hereof. 
 6.4 Modifications and Amendments. The terms and provisions of this Agreement
may be modified or amended only by written agreement executed by all parties hereto. 
 6.5 Waivers and Consents. The terms and
provisions of this Agreement may be waived, or consent for the departure therefrom granted, only by written document executed by the party entitled to the benefits of such terms or provisions. No such waiver or consent shall be deemed to be or shall
constitute a waiver or consent with respect to any other terms or provisions of this Agreement, whether or not similar. Each such waiver or consent shall be effective only in the specific instance and for the purpose for which it was given, and
shall not constitute a continuing waiver or consent. 
 6.6 Assignment. The rights and obligations under this Agreement may not be
assigned by either party hereto without the prior written consent of the other party. 
 6.7 Benefit. All statements, representations,
warranties, covenants and agreements in this Agreement shall be binding on the parties hereto and shall inure to the benefit of the respective successors and permitted assigns of each party hereto. Nothing in this Agreement shall be construed to
create any rights or obligations except among the parties hereto, and no person or entity shall be regarded as a third-party beneficiary of this Agreement. 

6.8 Governing Law. This Agreement and the rights and obligations of the parties hereunder shall be construed in accordance with and
governed by the laws of New York applicable to contracts wholly performed within the borders of such state, without giving effect to the conflict of law principles thereof. 

6.9 Severability. In the event that any court of competent jurisdiction shall determine that any provision, or any portion thereof,
contained in this Agreement shall be unreasonable or unenforceable in any respect, then such provision shall be deemed limited to the extent that such court deems it reasonable and enforceable, and as so limited shall remain in full force and
effect. In the event that such court shall deem any such provision, or portion thereof, wholly unenforceable, the remaining provisions of this Agreement shall nevertheless remain in full force and effect. 

  
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 6.10 No Waiver of Rights, Powers and Remedies. No failure or delay by a party hereto
in exercising any right, power or remedy under this Agreement, and no course of dealing between the parties hereto, shall operate as a waiver of any such right, power or remedy of such party. No single or partial exercise of any right, power or
remedy under this Agreement by a party hereto, nor any abandonment or discontinuance of steps to enforce any such right, power or remedy, shall preclude such party from any other or further exercise thereof or the exercise of any other right, power
or remedy hereunder. The election of any remedy by a party hereto shall not constitute a waiver of the right of such party to pursue other available remedies. No notice to or demand on a party not expressly required under this Agreement shall
entitle the party receiving such notice or demand to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the party giving such notice or demand to any other or further action in any
circumstances without such notice or demand. 
 6.11 Survival of Representations and Warranties. All representations and warranties
made by the parties hereto in this Agreement or in any other agreement, certificate or instrument provided for or contemplated hereby, shall survive the execution and delivery hereof and any investigations made by or on behalf of the parties. 

6.12 No Broker or Finder. Each of the parties hereto represents and warrants to the other that no broker, finder or other financial
consultant has acted on its behalf in connection with this Agreement or the transactions contemplated hereby in such a way as to create any liability on the other. Each of the parties hereto agrees to indemnify and save the other harmless from any
claim or demand for commission or other compensation by any broker, finder, financial consultant or similar agent claiming to have been employed by or on behalf of such party and to bear the cost of legal expenses incurred in defending against any
such claim. 
 6.13 Headings and Captions. The headings and captions of the various subdivisions of this Agreement are for convenience
of reference only and shall in no way modify or affect the meaning or construction of any of the terms or provisions hereof. 
 6.14
Counterparts. This Agreement may be executed in one or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or any other form of electronic delivery, such signature shall create a
valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such signature page were an original thereof. 

6.15 Construction. The parties hereto have participated jointly in the negotiation and drafting of this Agreement. If an ambiguity or
question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties hereto and no presumption or burden of proof will arise favoring or disfavoring any party hereto because of the authorship of any
provision of this Agreement. The words “include,” “includes,” and “including” will be deemed to be followed by “without limitation.” Pronouns in masculine, feminine, and neuter
genders will be construed to include any other gender, and words in the singular form will be construed to include the plural and vice versa, unless the context otherwise 

  
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requires. The words “this Agreement,” “herein,” “hereof,” “hereby,” “hereunder,” and words of similar import
refer to this Agreement as a whole and not to any particular subdivision unless expressly so limited. The parties hereto intend that each representation, warranty, and covenant contained herein will have independent significance. If any party hereto
has breached any representation, warranty, or covenant contained herein in any respect, the fact that there exists another representation, warranty or covenant relating to the same subject matter (regardless of the relative levels of specificity)
which such party hereto has not breached will not detract from or mitigate the fact that such party hereto is in breach of the first representation, warranty, or covenant. 

6.16 Mutual Drafting. This Agreement is the joint product of the Subscriber and the Company and each provision hereof has been subject
to the mutual consultation, negotiation and agreement of such parties and shall not be construed for or against any party hereto. 
 7.
Voting and Tender of Shares. The Subscriber agrees to vote the Shares in favor of an initial business combination that the Company negotiates and submits for approval to the Company’s stockholders and shall not seek redemption with
respect to any of the Shares. Additionally, the Subscriber agrees not to tender any Shares in connection with a tender offer presented to the Company’s stockholders in connection with an initial business combination negotiated by the Company.

 8. Indemnification. Each party shall indemnify the other against any loss, cost or damages (including reasonable attorney’s
fees and expenses) incurred as a result of such party’s breach of any representation, warranty, covenant or agreement in this Agreement. 

[Signature Page Follows] 

  
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 If the foregoing accurately sets forth our understanding and agreement, please sign the
enclosed copy of the Agreement and return it to us. 
  

			
	Very truly yours,
	
	FORTRESS VALUE ACQUISITION CORP. IV
		
	By:	 	 /s/ Alexander Gillette

	Name:	 	Alexander Gillette
	Title:	 	General Counsel and Secretary

 FORTRESS VALUE ACQUISITION SPONSOR IV LLC 

			
		
	By:	 	 /s/ Alexander Gillette

	Name:	 	Alexander Gillette
	Title:	 	SecretaryExhibit 10.1

 

THIS CONVERTIBLE DEBENTURE HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR UNDER THE PROVISIONS OF ANY APPLICABLE
STATE SECURITIES LAWS, BUT HAS BEEN ACQUIRED BY THE REGISTERED HOLDER HEREOF FOR PURPOSES OF INVESTMENT AND IN RELIANCE ON STATUTORY
EXEMPTIONS UNDER THE 1933 ACT, AND UNDER ANY APPLICABLE STATE SECURITIES LAWS. THIS DEBENTURE MAY NOT BE SOLD, PLEDGED, TRANSFERRED
OR ASSIGNED EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER PROVISIONS OF THE 1933 ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT; AND IN THE CASE OF AN EXEMPTION, ONLY IF THE COMPANY HAS RECEIVED AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION OF THIS DEBENTURE.

 

KCB JADE HOLDINGS, LLC

$200,000.00

Issue Date: March 19, 2020

(the “Principal”)

 

AMENDED AND RESTATED CONVERTIBLE DEBENTURE

 

Dated as of February 19, 2021 (the “Amendment
Date”)

 

KCB JADE Holdings, LLC, a Delaware
limited liability company (the “Company”), pursuant to the terms of this Amended and Restated Convertible Debenture
(this “Debenture”) for value received, hereby promises to pay to the order of Zoned Properties, Inc., a Nevada corporation,
or registered assigns (the “Holder”) on the Maturity Date as hereinafter defined, at the principal offices of the Company,
the principal sum set forth above (the “Principal”), and to pay interest on the outstanding principal sum at the rate
of six and one/half percent (6.5%) per annum (the “Interest Rate”). The Maturity Date as defined herein shall be five
(5) years from the Issue Date as set forth above (i.e. March 19, 2025) (the “Maturity Date”).

 

This Debenture amends and restates in its
entirety the Convertible Debenture issued by the Company to the Holder on March 19, 2020 (the “Original Debenture”),
which Original Debenture is hereby amended and restated in its entirety to provide as set forth herein upon execution of this Debenture
by the Company and the Holder. The Company and the Holder acknowledge and agree that $100,000 of the Principal (the “Initial
Principal”) was delivered to the Company by the Holder on the Issue Date as set forth above, and an additional $100,000 of
the Principal (the “Additional Principal”) was delivered to the Company by the Holder on the Amendment Date.

 

Interest shall commence accruing on the
Initial Principal on the Issue Date, and interest shall commence accruing on the Additional Principal on the Amendment Date, and
in each case shall be computed on the basis of a 365-day year and the actual number of days elapsed, and shall be payable annually
due by the 1st day of each calendar anniversary following the Issue Date. Principal shall be due and payable on or
before the Maturity Date. All payments due hereunder shall be made in lawful money of the United States of America. Any payment
otherwise due on a Saturday, Sunday or legal Bank holiday may be paid on the following business day.

 

	 	1.	Right of Prepayment, Conversion Rights, Maturity Rights and Certain Adjustments; Franchise Fees.

 

	 	(a)	Right of Prepayment. The Company may prepay this Debenture at any point after eighteen (18) months following the Issue Date, in whole or in part. However, if the Company elects to prepay this Debenture prior to the Maturity Date or prior any Conversion outlined below in whole or in part, the Holder will be entitled to receive a number of Units (as defined in the Limited Liability Company Operating Agreement of the Company (the “Operating Agreement”)), in addition to such prepayment amount, constituting ten percent (10%) of the total outstanding Units and ten percent (10%) of the total Percentage Interest (as defined in the Operating Agreement) following such issuance and at the time of such issuance.

 

     

     

    

 

	 	(b)	Right of Conversion.

 

	 	(i)	Voluntary Conversion. On or
    after six (6) months from the Issue Date, the Holder is entitled to convert all or a portion of the Principal balance and
    all accrued and unpaid interest due hereunder (the “Outstanding Amount”) into a number of Units equal to the proportion
    of the Outstanding Amount being converted multiplied by the Conversion Percentage, as defined below). Should the Company default
    on payment hereof, the Holder, may at its option, extend all conversion rights, through and including the date the Company
    tenders or attempts to tender payment in full of all amounts due under this Debenture. Conversion rights shall terminate upon
    acceptance by Holder of payment in full of principal, accrued interest and any other amounts due under this Debenture.
	 	 	 
	 	(ii)	Conversion Percentage. The Conversion
    Percentage shall be thirty three percent (33%) of the total number of Units issued and outstanding at the time of Conversion,
    constituting thirty three percent (33%) of the total Percentage Interest (the “Conversion Percentage”).
	 	 	 
	 	(iii)	Clarification. For the avoidance
    of doubt and by way of example solely:

 

	 	(1)	In the event that, at a particular time, the Holder elects to convert 50% of the Outstanding Amount into Units, the Holder shall, at such time, be issued a number of Units equal to 16.5% of the issued and outstanding Units at such time; and if, thereafter, the Holder elects to covert 50% of the remaining Outstanding amount, the Holder shall, at such time, be issued a number of Units equal to 8.25% of the issued and outstanding Units at such time, regardless as to whether such Converted Amount is 50% of the original converted amount above.
	 	 	 
	 	(2)	The intent of the provisions herein is, and such provisions shall be enforced such that, the Holder shall, upon and at the time of full conversion of all of the Outstanding Amount, hold a number of Units equal to 33% of the issued and outstanding Units at such time, regardless of whether such units were issued on an equal Unit-per-dollar-of-converted Outstanding Amount or not.

 

	 	(c)	Right of Maturity Units. If the Company (i) does not elect to exercise its rights of Prepayment prior to the Maturity Date, and (ii) the Holder does not elect to exercise its rights of Conversion, and (iii) the Company pays to Holder all outstanding Principal and Interest accrued and due under the terms of this Debenture on the Maturity Date, then the Holder will still be entitled to receive a number of Units, in addition to such payment amount, constituting eight percent (8%) of the total outstanding Units and eight percent (8%) of the total Percentage Interest following such issuance and at the time of such issuance.
	 	 	 
	 	(d)	Franchise Fees. The Parties acknowledge and agree that, each time that the Company sells a Franchise Location, the Company charges the franchisee a fee (the “Initial Franchise Fee”). As additional consideration for the Holder loaning to the Company the Additional Principal on the Amendment Date, the Company agrees that the Company shall, in additional to any other payments required hereunder, pay to Holder, in perpetuity, a fee of 5% of any new Initial Franchise Fee received by the Company for every Franchise Location sold by the Company following the Amendment Date, and 5% of any renewal franchise fees related to such sale of a Franchise Location, in each case to be paid within five (5) days of receipt of the Company thereof. Following the Amendment Date, the Company will not decrease the Initial Franchise Fees or any renewal fees related thereto from the fees as in effect on the Amendment Date, without the prior written consent of the Holder, and the Company shall not undertake any actions, or fail to take any actions, which, in either case, could seek to minimize or avoid the obligations of the Company pursuant to this Section 1(d). The provisions of this Section 1(d) shall survive any repayment or conversion of this Debenture, or any termination of this Debenture, and any other event or circumstance.

 

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	 	2.	Waiver and Consent. To the fullest extent permitted by law and except as otherwise provided herein, the Company waives demand, presentment, protest, notice of dishonor, suit against or joinder of any other person, and all other requirements necessary to charge or hold the Company liable with respect to this Debenture.
	 	 	 
	 	3.	Costs, Indemnities and Expenses. The Company agrees to pay all reasonable fees and costs incurred by the Holder in collecting or securing or attempting to collect or secure this Debenture, including reasonable attorneys’ fees and expenses, whether or not involving litigation, collecting upon any judgments and/or appellate or bankruptcy proceedings. The Company agrees to pay any documentary stamp taxes, intangible taxes or other taxes which may now or hereafter apply to this Debenture or any payment made in respect of this Debenture, and the Company agrees to indemnify and hold the Holder harmless from and against any liability, costs, attorneys’ fees, penalties, interest or expenses relating to any such taxes, as and when the same may be incurred.
	 	 	 
	 	4.	Representations; Warranties and Covenants. The Company represents, warrants and covenants to the Holder that:

 

	 	(a)	The Company is duly organized, validly existing and in good standing (if applicable) under the laws of State of Delaware;
	 	 	 
	 	(b)	the Company has authority to own its property and assets and to carry on its business as now conducted, except, in each case, where the failure to do so, or so possess, individually or in the aggregate would not reasonably be expected to result in a material adverse effect;
	 	 	 
	 	(c)	the Company has all requisite organizational power and authority to execute and deliver and perform all its obligations under this Debenture.
	 	 	 
	 	(d)	the Company is qualified to do business in, and is in good standing (where such concept exists) in, every jurisdiction in which the nature of its business makes such qualification necessary, except where the failure to be so qualified or in good standing individually or in the aggregate would not reasonably be expected to result in a material adverse effect;
	 	 	 
	 	(e)	the transactions contemplated hereby is within the Company’s organizational powers and have been duly authorized by all necessary limited liability company action;
	 	 	 
	 	(f)	this Debenture has been duly executed and delivered by the Company and constitutes a legal, valid and binding obligation of such party, enforceable in accordance with its terms; and
	 	 	 
	 	(g)	the transactions to be entered into and contemplated by this Debenture (a) do not require any consent or approval of, registration or filing with, or any other action by, any governmental authority, (b) will not (i) violate any applicable law or (ii) the organizational documents, charter, operating agreement, or certificate of formation of the Company, (c) will not violate or result in a default under any indenture or any other agreement, instrument or other evidence of indebtedness, and (d) will not result in the creation or imposition of any lien on any asset of such party.

 

	 	5.	Covenants. So long as any portion of this Debenture remains outstanding, the Company will not directly or indirectly, without the consent of the Holder (i) fail to continue to engage in business of the same general type as now conducted by it and to preserve, renew and keep in full force and effect, its corporate existence and its assets, rights, privileges and franchises to the extent necessary or desirable in the normal conduct of business; (ii) fail to comply in all material respects with all applicable laws, ordinances, rules, regulations, decisions, orders and requirements of governmental authorities; or (iii) fail to keep proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities.

 

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	 	6.	Event of Default. An “Event of Default” shall be deemed to have occurred upon the occurrence of any of the following: (a) the Company shall fail to make any payment of the principal, interest, costs, indemnities, other amounts due hereunder (including pursuant to Section 1(d)), or expenses pursuant to this Debenture when and as the same shall become due and payable; (b) there shall occur any default, whether in whole or in part, in the due observance or performance of any obligations or other covenants, terms or provisions to be performed by the Company under this Debenture or any of the representations and warranties of the Company shall cease to be true and correct in all respects; (c) the Company shall make a general assignment for the benefit of its creditors; (d) the Company shall apply for or consent to the appointment of a receiver, trustee, assignee, custodian, sequestrator, conservator, liquidator or similar official for itself or any of its assets and properties; (e) the Company shall voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief as a debtor under the United States Bankruptcy Code or any other liquidation, conservatorship, bankruptcy, general assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally (collectively, the “Debtor Relief Laws”); (f) an involuntary proceeding shall be commenced or an involuntary petition shall be filed against the Company seeking (1) liquidation, reorganization or other relief in respect of the Company or its debts, or of a substantial part of its assets, under any Debtor Relief Law or (2) the appointment of a receiver, trustee, assignee, custodian, sequestrator, conservator, liquidator or similar official for itself or any of its assets and properties; (i) the Company consents to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (f) above. Upon the occurrence of an Event of Default the entire Principal balance and accrued and unpaid interest outstanding under this Debenture, and all other obligations of the Company under this Debenture, shall be immediately due and payable and the Holder may exercise any and all rights, power and remedies available to it at law or in equity or other appropriate proceeding, whether for the specific performance of any covenant or agreement contained in this Debenture and proceed to enforce the payment thereof or any other legal or equitable right of the Holder. The Holder need not provide, and Company hereby waives, any presentment, demand, protest or other notice of any kind, and the Holder may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such declaration may be rescinded and annulled by the Holder at any time prior to payment hereunder. No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.
	 	 	 
	 	7.	Default Interest. Any amount of principal or interest, or any payments pursuant to Section 1(d), which is not paid when due shall bear interest at the rate of twelve percent (12%) per annum from the due date thereof until the same is paid.
	 	 	 
	 	8.	Maximum Interest Rate. In no event shall any agreed to or actual interest charged, reserved or taken by the Holder as consideration for this Debenture exceed the limits imposed by applicable law. In the event that the interest provisions of this Debenture shall result at any time or for any reason in an effective rate of interest that exceeds the maximum interest rate permitted by applicable law, then without further agreement or notice the obligation to be fulfilled shall be automatically reduced to such limit and all sums received by the Holder in excess of those lawfully collectible as interest shall be applied against the principal of this Debenture immediately upon the Holder’s receipt thereof, with the same force and effect as though the Company had specifically designated such extra sums to be so applied to principal and the Holder had agreed to accept such extra payment(s) as a premium-free prepayment or prepayments.

 

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	 	9.	Cancellation of Debenture. Upon the repayment by the Company of all of its obligations hereunder to the Holder, including, without limitation, the principal amount of this Debenture, plus accrued but unpaid interest, the indebtedness evidenced hereby shall be deemed paid in full. Except as otherwise required by law or by the provisions of this Debenture, payments received by the Holder hereunder shall be applied first against expenses and indemnities, next against interest accrued on this Debenture, and next in reduction of the outstanding principal balance of this Debenture.
	 	 	 
	 	10.	Lost, Stolen or Mutilated Debenture. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Debenture (as to which a written certification and the indemnification contemplated below shall suffice as such evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in customary and reasonable form and, in the case of mutilation, upon surrender and cancellation of this Debenture, the Company shall execute and deliver to the Holder a new Debenture (in accordance with the provisions herein) representing the outstanding Principal. Whenever the Company is required to issue a new Debenture pursuant to the terms herein, such new Debenture (i) shall be of like tenor with this Debenture, (ii) shall represent, as indicated on the face of such new Debenture, the Principal and interest remaining outstanding or owed, (iii) shall have an issuance date, as indicated on the face of such new Debenture, which is the same as the Issue Date, (iv) shall have the same rights and conditions as this Debenture, and (v) shall represent accrued and unpaid interest and late charges on the Principal and interest of this Debenture, from the Issue.
	 	 	 
	 	11.	Transfers of Debenture to Comply with the 1933 Act. The Holder agrees that this Debenture may not be sold, transferred, pledged, hypothecated or otherwise disposed of except as follows: (a) to a person whom the Debenture may legally be transferred without registration and without delivery of a current prospectus under the Securities Act of 1933, as amended (the “1933 Act”) with respect thereto and then only against receipt of an agreement of such person to comply with the provisions of this Section 11 with respect to any resale or other disposition of the Debenture; or (b) to any person upon delivery of a prospectus then meeting the requirements of the 1933 Act relating to such securities and the offering thereof for such sale or disposition, and thereafter to all successive assignees.
	 	 	 
	 	12.	Severability. If any provision of this Debenture is, for any reason, invalid or unenforceable, the remaining provisions of this Debenture will nevertheless be valid and enforceable and will remain in full force and effect. Any provision of this Debenture that is held invalid or unenforceable by a court of competent jurisdiction will be deemed modified to the extent necessary to make it valid and enforceable and as so modified will remain in full force and effect.
	 	 	 
	 	13.	Amendment and Waiver. This Debenture may be amended only in a writing executed by the Company and the Holder. Any provision of this Debenture may be waived only in a writing executed by Holder. The waiver by Holder of a breach of any provision of this Debenture shall not operate or be construed as a waiver of any other breach.
	 	 	 
	 	14.	Assignment Successors. The Company may not assign or transfer this Debenture or any rights or obligations herein without the prior written consent of the Holder. Except as otherwise provided herein, this Debenture shall bind and inure to the benefit of and be enforceable by the Company, the Holder and their permitted successors and assigns.
	 	 	 
	 	15.	Further Assurances. The Company will execute all documents and take such other actions as the Holder may reasonably request in order to consummate the transactions provided for herein and to accomplish the purposes of this Debenture.

 

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	 	16.	Notices, Consents, etc. Any notices, consents, waivers or other communications required or permitted to be given under the terms hereof must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt of a confirmation email, when sent by email with return receipt requested; or (iii) one (1) trading day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same. The addresses and email addresses numbers for such communications shall be as follows or such other address and/or facsimile number and/or to the attention of such other person as the recipient party has specified by written notice given to each other party three (3) trading days prior to the effectiveness of such change:

 

If to the Company:

 

KCB Jade Holdings, LLC

Attention: Kathryn Blackwell,
President

14269 N. 87th Street, #205

Scottsdale, AZ 85260

Email: Kathryn@theopendor.com

 

If to Holder:

 

Zoned Properties, Inc.

Attention: Bryan McLaren

14269 N. 87th Street, #205

Scottsdale, AZ 85260

Email: Bryan@zonedproperties.com

 

	 	17.	Governing Law. All questions concerning the construction, validity and interpretation of this Debenture and any and all disputes or controversies arising out of the subject matter hereof (whether by contract, tort or otherwise) shall be governed by and construed in accordance with the domestic laws of the State of Delaware, without giving effect to any choice of law or conflict of law provision (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.
	 	 	 
	 	18.	Jurisdiction. EACH PARTY HERETO AGREES THAT JURISDICTION AND VENUE IN ANY ACTION BROUGHT BY THE HOLDER PURSUANT TO THIS DEBENTURE SHALL PROPERLY (BUT NOT EXCLUSIVELY) LIE IN ANY FEDERAL OR STATE COURT LOCATED IN MARICOPA COUNTY, ARIZONA. EACH PARTY HERETO IRREVOCABLY SUBMITS TO THE JURISDICTION OF SUCH COURTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY WITH RESPECT TO SUCH ACTION. EACH PARTY HERETO IRREVOCABLY AGREES THAT VENUE WOULD BE PROPER IN SUCH COURT, AND HEREBY WAIVES ANY OBJECTION THAT SUCH COURT IS AN IMPROPER OR INCONVENIENT FORUM FOR THE RESOLUTION OF SUCH ACTION. EACH PARTY HERETO FURTHER AGREES THAT THE MAILING BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, OF ANY PROCESS REQUIRED BY ANY SUCH COURT SHALL CONSTITUTE VALID AND LAWFUL SERVICE OF PROCESS AGAINST THEM, WITHOUT NECESSITY FOR SERVICE BY ANY OTHER MEANS PROVIDED BY STATUTE OR RULE OF COURT.
	 	 	 
	 	19.	Third Parties. Nothing herein expressed or implied is intended or shall be construed to confer upon or give to any person or entity, other than the Holder and its permitted successor and assigns, any rights or remedies under or by reason of this Debenture.
	 	 	 
	 	20.	Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS DEBENTURE. EACH PARTY HERETO CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE HOLDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE HOLDER WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) EACH PARTY HERETO UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) EACH PARTY HERETO MAKES THIS WAIVER VOLUNTARILY, AND (D) EACH PARTY HERETO HAS BEEN INDUCED TO ENTER INTO THIS DEBENTURE BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS IN THIS SECTION 20.

 

	 	21.	Construction and Headings. This Debenture shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed against any person as the drafter hereof. The headings of this Debenture are for convenience of reference and shall not form part of, or affect the interpretation of, this Debenture.
	 	 	 
	 	22.	Entire Agreement. This Debenture (including any recitals hereto) set forth the entire understanding of the parties with respect to the subject matter hereof, and shall not be modified or affected by any offer, proposal, statement or representation, oral or written, made by or for any party in connection with the negotiation of the terms hereof, and may be modified only by instruments signed by all of the parties hereto.

 

[Signature Page to Follow]

 

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IN WITNESS WHEREOF, this Debenture
is executed by the undersigned as of the Amendment Date.

 

	 	KCB JADE Holdings, LLC.
	 	 	 
	 	By:	 /s/ Kathryn Blackwell

	 	 	 
	 	Name:	 Kathryn Blackwell

	 	 	 
	 	Title:	 President

 

	Agreed and accepted:	Signature: 	/s/
    Chelsea Mulligan
	 	 	Chelsea Mulligan
    (Feb 17, 2021 07:37 MST)
	 	 	 
	 	Email: 	chelsea@theopendor.com

 

	Zoned Properties, Inc.
	 	 	 
	By:	/s/ Bryan McLaren	 
	Name:  	Bryan McLaren	 
	Title: 	Chief Executive Officer

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