SEC Contract Filing

Filing Date: 2020-12-02

Document Content:
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>tm2034746d2_ex10-1.htm
<DESCRIPTION>EXHIBIT 10.1
<TEXT>
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<P STYLE="text-align: right; margin: 0">&nbsp;</P>

<P STYLE="margin: 0; text-align: right"><B>Exhibit 10.1</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in">&nbsp;</P>

<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><B>CONSTRUCTION LOAN AND SECURITY AGREEMENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">THIS
CONSTRUCTION LOAN AND SECURITY AGREEMENT (this &ldquo;Agreement&rdquo;) dated as of November&nbsp;</FONT>25<FONT STYLE="font-family: Times New Roman, Times, Serif">,
2020, is entered into by In Grown Farms LLC 2, an Illinois limited liability company (&ldquo;Borrower&rdquo;), for the
benefit of Pelorus Fund, LLC, a California limited liability company [REDACTED - COMMERCIALLY SENSITIVE]
(&ldquo;Lender&rdquo;).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><B>RECITALS</B></P>

<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Borrower
proposes to construct or to have constructed on the real property described in Exhibit&nbsp;&ldquo;A&rdquo; to this Agreement
and in the Security Instrument certain improvements in accordance with the Disbursement Schedule attached as
Exhibit&nbsp;&ldquo;B&rdquo; to this Agreement and made a part hereof (the &ldquo;Improvements&rdquo;). The real property and
the Improvements are sometimes collectively referred to as the &ldquo;Property&rdquo; in this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">B.</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="font-size: 10pt">Borrower
has executed the Loan Documents, as defined below, in connection with the Loan, as defined below, and the construction of the Improvements,
all as defined below.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">C.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Loan is subject to a Construction Reserve to be held in a Fund Control Account, all as defined below, for the completion of the
Improvements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">D.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Borrower
desires to obtain the Loan from Lender, and Lender desires to originate the Loan for Borrower, on the terms and conditions set
forth below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In consideration of
the covenants, conditions, representations, and warranties contained in this Agreement, the parties agree as follows:</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <U>DEFINITIONS</U>. </B>As used herein,
the following capitalized terms shall have the meanings set forth below (all terms defined in this Section&nbsp;1 or in any other
provision of this Agreement in the singular are to have the plural meanings when used in the plural and vice versa, and whenever
the context requires, each gender shall include any other gender):</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>1.1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;Advance&rdquo;
</B>or <B>&ldquo;Advances&rdquo; </B>shall mean each advance of Fund Control Proceeds from the Fund Control Account to fund the
completion of the Improvements or Real Property Collateral, or to pay, fund or reimburse any other amounts or items permitted hereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 10pt"><B>1.2.</B></FONT><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="font-size: 10pt">&ldquo;Agreement&rdquo;
</FONT></B><FONT STYLE="font-size: 10pt">shall mean this Construction Loan and Security Agreement together with all schedules and
exhibits hereto, as amended, supplemented or otherwise modified from time to time.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 10pt"><B>1.3.</B></FONT><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="font-size: 10pt">&ldquo;Applicable
Law&rdquo; </FONT></B><FONT STYLE="font-size: 10pt">shall mean: (a)&nbsp;with respect to matters relating to the creation, perfection
and procedures relating to the enf