Sample Form of Unsecured Note

THIS INSTRUMENT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR UPON RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT.

FORM

OF

UNSECURED UPFRONT PROMISSORY NOTE

FOR VALUE RECEIVED, [REDACTED] a Florida corporation (the “Company”), hereby promises to pay to the order of [REDACTED], a Delaware limited liability company or its Permitted Transferee (the “Holder”), the principal sum of US$ [REDACTED] (the “Principal Amount”), together with interest thereon beginning on the one hundred twenty first (121st) day after the date of issuance of this promissory note (this “Note”). Interest will accrue from such date at a simple rate of nine percent (9%) per annum, compounded annually. Unless (a) earlier accelerated by the Holder upon the occurrence of an Event of Default (as defined below) in accordance with Section 3 below, (b) a Corporate Transaction or Next Equity Financing sooner occurs in accordance with Section 4 below or (c) credited against the total consideration to be paid by the Holder at the Closing as contemplated by that certain Summary of Transaction Terms between the Company and the Holder dated October ____, YEAR (“LOI”) in accordance with Section 4.2 below, the principal and accrued interest of this Note will be due and payable by the Company on the one year anniversary of the date hereof (the “Maturity Date”). Upon the occurrence and during the continuance of an Event of Default, interest shall accrue on the outstanding principal and any accrued interest unpaid upon the Maturity Date at the base rate of interest set forth above plus 9% per annum, compounded annually (“Default Rate Interest”).

Capitalized terms not otherwise defined in this Note will have the meanings set forth in Section 4.1.

1. Payment. Principal, accrued interest (inclusive of Default Rate Interest), and any other payment under this Note is due and payable upon the Maturity Date, with interest accruing after the Maturity Date payable on a semi-annual basis; or if earlier, following the acceleration by the Holder of payments of principal, interest, and any other payment under this Note upon the occurrence of an Event of Default (as defined below) in accordance with Section 3 below.
   • All payments will be made in lawful money of the United States of America at the principal office of the Company, or at such other place as the Holder may from time to time designate in writing to the Company. Payment will be credited first to accrued interest due and payable, with any remainder applied to principal.
   • Prepayment of principal, together with accrued interest, may not be made without the written consent of the Holder, except in the event of a Corporate Transaction or Next Equity Financing.
2. Security Interests. This Note is unsecured.
3. Events of Default. The following events shall constitute an Event of Default (an “Event of Default”) under this Note if not cured by the Company within the applicable time period set forth below after their occurrence:
   • Failure of the Company to make payments of principal or accrued interest under this Note when due and such failure is not cured within five business days of the applicable due date;
   • Breach by the Company of any of its covenants under this Note other than those set forth in Section 3.2 and such breach has not been cured within 20 business days of notice of its occurrence;
   • Material breach of any of the Company’s representations or warranties set forth herein, and such breach, if curable, has not been cured within 20 business days of notice by the Holder to the Company thereof;
   • The Company, pursuant to or within the meaning of Title 11, U.S. Code, or any similar Federal, foreign or state law for the relief of debtors (collectively, “Bankruptcy Laws”), (a) commences a voluntary case, (b) consents to the entry of an order for relief against it in an involuntary case, (c) consents to the appointment of a receiver, trustee, assignee, liquidator or similar official (a “Custodian”), (d) makes a general assignment for the benefit of its creditors or (e) admits in writing that it is generally unable to pay its debts as they become due;
   • A court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (a) is for relief against the Company in an involuntary case, (b) appoints a Custodian of the Company or (c) orders the liquidation of the Company;
   • A final judgment or judgments for the payment of money aggregating in excess of $100,000 are rendered against the Company and which judgments are not, within ninety (90) days after the entry thereof, bonded, discharged or stayed pending appeal, or are not discharged within ninety (90) days after the expiration of such stay; provided, however, that any judgment which is covered by insurance or an indemnity from a credit worthy party shall not be included in calculating the $100,000 amount set forth above so long as the Company provides the Holder a written statement from such insurer or indemnity provider (which written statement shall be reasonably satisfactory to the Holder) to the effect that such judgment is covered by insurance or an indemnity and the Company will receive the proceeds of such insurance or indemnity within thirty (30) days of the issuance of such judgment; and
   • The occurrence of a payment “event of default” not timely cured or waived and triggering a right of acceleration under any other instrument or note evidencing indebtedness of the Company to other lenders (“event of default” as defined under such instruments or notes).

Upon the occurrence of such an Event of Default under this Note (after giving effect to applicable cure periods), the Holder shall have the right to demand full payment of the outstanding principal and interest payable under this Note, in addition to any other right or remedy available to a creditor at law or equity.

4. Trigger Events. This Note will be paid in full without notice or demand, upon the occurrence of an Event of Default, a Corporate Transaction, or Next Equity Financing.
   • Definitions. For the purposes of this Note, the following terms shall have the following definitions:
     • “Common Stock” means the Company’s Class B Common Stock, par value US $0.01.
     • “Corporate Transaction” means:

(i)   the consolidation, merger or other business combination of the Company with or into another entity  (other than (A) pursuant to a migratory merger effected solely for the purpose of changing the jurisdiction of incorporation of the Company or (B) a consolidation, merger or other business combination in which holders of the Company’s voting power immediately prior to the transaction continue after the transaction to hold, directly or indirectly, the voting power of the surviving entity or entities necessary to elect a majority of the members of the board of directors of the Company (the “Board of Directors” or the “Board”) (or their equivalent if other than a corporation) of such entity or entities); or

(ii)  the sale or transfer of more than fifty percent (50%) of the Company’s assets (based on the fair market value or negotiated value as determined in good faith by the Board) other than inventory in the ordinary course of business in one or a related series of transactions; or

(iii) the closing of a purchase, tender or exchange offer made to the holders of more than fifty percent (50%) of the outstanding shares of capital stock in which more than fifty percent (50%) of the outstanding shares of capital stock were tendered and accepted, resulting in the right of the Company’s shareholders acquiring such shares to elect or appoint more than 50% of the members of the Board of Directors.

For the avoidance of doubt, a transaction will not constitute a “Corporate Transaction” if its sole purpose is to change the state of the Company’s incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately prior to such transaction.

• “Equity Securities” means (i) Common Stock; (ii) any securities conferring the right to purchase Common Stock; or (iii) any securities directly or indirectly convertible into, or exchangeable for (with or without additional consideration) Common Stock. Notwithstanding the foregoing, this Note will not be considered “Equity Securities”.
• “Exchange Act” means the Securities Exchange Act of 1934, as amended.
• “Next Equity Financing” means the next sale (or series of related sales) by the Company of its Equity Securities following the date of issuance of this Note from which the Company receives gross proceeds of not less than US $10,000,0000 (excluding, for the avoidance of doubt, the aggregate principal amount of this Note).
• “Securities Act” means the Securities Act of 1933, as amended.

• Closing under the LOI. In the event the transactions contemplated under the LOI are consummated prior to the Maturity Date, then Holder shall be entitled to a dollar-for-dollar credit of all payments due under this Note against the Total Consideration, as defined in the LOI and, upon such closing, this Note shall be cancelled and marked “paid in full.”  Notwithstanding anything here to the contrary, the Holder will cooperate in good faith with the Company to determine the most advantageous tax structure for the Company and the Holder regarding the classification of this Note in connection with the transaction contemplated in the LOI, and the consent of the Holder to such tax classification will not be unreasonably withheld.

5. Representations and Warranties of the Company. The Company hereby represents and warrants to each Investor that the following representations are true and complete as of the date of this Note, except as otherwise indicated.
   • Organization; Good Standing; Validity. The Company is duly incorporated, validly existing and in good standing in the State of Florida.  As of the date hereof, the Company does not conduct business in any other jurisdiction to the extent that qualification as a foreign corporation in such jurisdiction would be required pursuant to applicable law.  The Company has all of the requisite corporate power and authority necessary to own and to operate its properties and assets and to carry on its business as now conducted and as proposed to be conducted.  The Company is not in violation of any of the provisions of the Charter, the Company’s Second Amended and Restated Bylaws or any other organizational documents.
   • Authorization; Enforceability. The Company has all requisite power and authority to enter into this Note, to carry out and perform its obligations under the terms of this Note.  This Note has been duly authorized (including by the Company’s shareholders to the extent required), validly executed and delivered on behalf of Company and is a valid and binding obligation of the Company, enforceable in accordance with its terms, except to the extent that enforceability thereof may be limited by bankruptcy, insolvency, moratorium or similar laws affecting the enforcement of creditors’ rights generally and except that the availability of equitable remedies such as specific performance or injunctive relief are subject to the discretion of the court before which any proceeding may be brought.
   • No Conflicts. The execution, delivery and performance of this Note by the Company and the consummation by the Company of the transactions contemplated hereby do not and will not (i) conflict with or violate any provision of the Charter, the Company’s Bylaws, any agreement between the Company and its shareholders or any other organizational documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company debt or otherwise) or other understanding to which the Company is a party or by which any property or asset of the Company is bound or affected, or (iii) result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company is bound or affected.
   • Filings, Consents and Approvals. The Company is not required to obtain any permit, license, consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other person or entity in connection with the execution, delivery and performance by the Company of this Note, other than (i) the timely filing of a Notice of Sale of Securities on Form D, (ii) timely filings required by state securities laws, (iii) the approval of the State of Florida, Department of Health as to the security clearances of the Holder and its members or shareholders, (iv) those that have been made or obtained prior to the date of this Note, and (v) the filing of documentary stamp tax returns with the State of Florida including payment of such documentary stamp tax due with respect to the issuance of this Note.
   • • The total authorized capital stock of the Company consists of _____ shares, of which ______ shares are designated as Class A Common Stock, par value $0.01 per share (“Class A Common Stock”) and _____ are designated as Class B Common Stock, par value $0.01 per share (“Class B Common Stock”). Immediately prior to the date hereof, ______ shares of Class A Common Stock are issued and outstanding and _______shares of Class B Common Stock are issued and outstanding.
     • [REDACTED] have anti-dilution protection as to their shares of ownership of Class B Common Stock of the Company (which currently represents an aggregated ownership percentage of ___ percent of the Company) until [DATE], so long as either [REDACTED] owns Class B Common Stock in the Company, as provided in the Company Second Amended and Restated Shareholders’ Agreement, dated ____ (the “Shareholders’ Agreement”) (the “REDACTED Anti-Dilution Protection”).
     • Except as set forth in the Shareholders’ Agreement (which includes the REDACTED Anti-Dilution Protection), no securities of the Company are entitled to preemptive or similar rights, and no person or entity has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by this Note (including any right to an adjustment to the exercise, conversion, exchange or reset price under any of such securities).
     • The Company has issued an Unsecured Convertible Promissory Note to [REDACTED], dated _____ in the principal amount of $______, with an interest rate at __% per annum and a maturity date of one (1) year from the date of issuance, convertible into Company Class B Common Stock (as defined in the Shareholders’ Agreement) or equity securities in the Company’s Next Equity Financing (as defined in the Unsecured Convertible Promissory Note).
     • The Company has reserved _____ shares of Common Stock for issuance to officers, directors, employees and consultants of the Company pursuant to its 2017 Equity Incentive Plan duly adopted by the Board of Directors of the Company and approved by the Company shareholders (the “Stock Plan”). Of such reserved shares of Common Stock, no options to purchase shares have been granted, and ____ shares of Common Stock remain available for issuance to officers, directors, employees and consultants pursuant to the Stock Plan.  The Company has made available to the Investor complete and accurate copies of the Stock Plan and forms of agreements used thereunder.  In the event the Company grants any options under the Stock Plan, on exercise of such options, additional shares of Common Stock will be issued to the REDACTEDs pursuant to the REDACTED Anti-Dilution Protection.
     • The Company has approved the grant of stock options to [REDACTED] to purchase shares of Common Stock in an amount equal to ___% of the Company’s issued and outstanding capital stock (“[REDACTED] Equity Grant”), which options shall have an exercise price per share equal to fair market value or higher as will be determined by the Board of Directors upon the date the Board of Directors approves the strike price of the REDACTED Equity Grant and such options shall vest pro rata ___ at the end of each month commencing on DATE.
     • The Company has approved the grant of stock options to [REDACTED] (“Fried”) to purchase shares of Common Stock in an amount equal to __% of the Company’s issued and outstanding capital stock (“REDACTED Equity Grant”), which options shall have an exercise price per share equal to fair market value or higher as will be determined by the Board of Directors upon the date the Board of Directors approves the strike price of the REDACTED Equity Grant and such options shall vest as follows: ___________.
     • The Company has approved the grant of stock options to REDACTED to purchase shares of Common Stock in an amount equal to ____% of the Company’s issued and outstanding capital stock, which options shall have an exercise price per share equal to fair market value or higher as will be determined by the Board of Directors upon the date the Board of Directors approves the strike price of the REDACTED Equity Grant and such options shall vest immediately upon the date of grant.

Except as disclosed herein, there are no other outstanding shares of Common Stock of the Company, options, warrants, or other instruments convertible into or exercisable or exchangeable for Common Stock of the Company, or any right giving any person any right to subscribe for or acquire any shares of Common Stock of the Company, or contracts, commitments, understandings or arrangements by which the Company is bound to issue additional shares of Common Stock or options, warrants or other instruments convertible into or exercisable or exchangeable for shares of Common Stock of the Company.

• Subsidiaries. The Company does not have, and has never had, any subsidiaries and does not own any shares of capital securities or any interest in, or control, directly or indirectly, any other entity or have any ongoing obligation to purchase any capital securities of any other entity.
• Litigation. There has been considerable litigation relating to the application process and resulting approvals.

Notwithstanding the above, as of the date of this Note the Company is not aware of any other litigation that may have a material adverse effect on the Company’s dispensing organization approval.

• Bankruptcy or Insolvency. No bankruptcy or similar insolvency proceeding under state or federal law has been filed, or is currently being contemplated, with respect to the Company.
• Compliance. Except as could not reasonably be expected to result in a material adverse effect on the Company, the Company is not (a) in default under, and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company under, nor has the Company received notice of a claim that it is in default under, any loan agreement or any other agreement or instrument to which it is a party, (b) in violation of any judgment, decree or order of any state or local court, arbitrator or other governmental authority or (c) in violation of any state or local statute, rule, ordinance or regulation of any governmental authority, including without limitation all state and local laws relating to cannabis, taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor matters.
• Regulatory Permits. Except as could not reasonably be expected to result in a material adverse effect on the Company, the Company possess all certificates, authorizations, licenses, and permits issued by the appropriate state or local regulatory authorities necessary to conduct its Business as presently conducted, and the Company has not received any notice of proceedings relating to the revocation or adverse modification of any such certificate, authorization, license or permit.
• The License.
  • The Company’s application for the License (the “Application”) that was filed with the Florida Department of Health was filed and approved in accordance with the Act and did not contain any misstatements of material fact or omit to disclose any material fact. The Company has provided each Investor with access to a true, complete, and correct copy of the Application.
  • No unauthorized payment was made or benefit provided in connection with the Application and all lobbying expenses and lobbying effort were made in compliance with applicable law.
  • To the actual knowledge of the Company, there is no reasonable basis for the License to be adversely limited or revoked.
• Tax Status. Subject to the pending nature of the sales tax audit described on Schedule 5.12, there are no unpaid taxes payable by the Company (other than taxes not yet due) whether or not claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company know of no reasonable basis for any such claim.  Since DATE, the Company has timely filed all material tax returns and reports and in each case such return or report, as applicable, is true, accurate and complete.
• Disclosure. No representation or warranty by the Company in this Note and no statement contained in the Exhibits or Schedules hereto or any other certificate or instrument furnished to the Holder by or on behalf of the Company pursuant to this Note contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements made herein or therein, in the light of the circumstances under which they were made herein or therein, not misleading.
• No General Solicitation. The Company has offered this Note for sale only to the Holder.

6. Representations and Warranties of the Holder. In connection with the transactions contemplated by this Note, the Holder hereby represents and warrants to the Company as follows:
   • Authorization. The Holder has full power and authority (and, if an individual, the capacity) to enter into this Note and to perform all obligations required to be performed by it hereunder.  This Note, when executed and delivered by the Holder, will constitute the Holder’s valid and legally binding obligation, enforceable in accordance with its terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and any other laws of general application affecting enforcement of creditors’ rights generally, and (b) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.
   • Purchase Entirely for Own Account. The Holder acknowledges that this Note is made with the Holder in reliance upon the Holder’s representation to the Company, which the Holder hereby confirms by executing this Note, that this Note will be acquired for investment for the Holder’s own account, not as a nominee or agent (unless otherwise specified on the Holder’s signature page hereto), and not with a view to the resale or distribution of any part thereof, and that the Holder has no present intention of selling, granting any participation in, or otherwise distributing the same.  By executing this Note, the Holder further represents that the Holder does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participations to such person or to any third person, with respect to this Note.  If other than an individual, the Holder also represents it has not been organized solely for the purpose of acquiring this Note.
   • Disclosure of Information; Non-Reliance. The Holder acknowledges that it has received all the information it considers necessary or appropriate to enable it to make an informed decision concerning an investment in this Note.  The Holder further represents that it has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of this Note.  The Holder confirms that the Company has not given any guarantee or representation as to the potential success, return, effect or benefit (either legal, regulatory, tax, financial, accounting or otherwise) of an investment in this Note.  In deciding to purchase this Note, the Holder is not relying on the advice or recommendations of the Company and has made its own independent decision that the investment in this Note is suitable and appropriate for the Holder.  The Holder understands that no federal or state agency has passed upon the merits or risks of an investment in this Note or made any finding or determination concerning the fairness or advisability of this investment.
   • Investment Experience. The Holder is an investor in securities of companies in the development stage and acknowledges that it is able to fend for itself, can bear the economic risk of its investment and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in this Note.
   • Accredited Investor. The Holder is an “accredited investor” within the meaning of Rule 501 of Regulation D promulgated under the Securities Act.  The Holder agrees to furnish any additional information requested by the Company or any of its affiliates to assure compliance with applicable U.S. federal and state securities laws in connection with the purchase and sale of this Note.
   • Restricted Securities. The Holder understands that this Note have not been, and will not be, registered under the Securities Act or state securities laws, by reason of specific exemptions from the registration provisions thereof which depend upon, among other things, the bona fide nature of the investment intent and the accuracy of the Holder’s representations as expressed herein.  The Holder understands that this Note is a “restricted security” under U.S. federal and applicable state securities laws and that, pursuant to these laws, the Holder must hold this Note indefinitely unless it is registered with the Securities and Exchange Commission (“SEC”) and registered or qualified by state authorities, or an exemption from such registration and qualification requirements is available.  The Holder acknowledges that the Company has no obligation to register or qualify this Note for resale and further acknowledges that, if an exemption from registration or qualification is available, it may be conditioned on various requirements including, but not limited to, the time and manner of sale, the holding period for this Note, and on requirements relating to the Company which are outside of the Holder’s control, and which the Company is under no obligation, and may not be able, to satisfy.
   • No Public Market. The Holder understands that no public market now exists for this Note and that the Company has made no assurances that a public market will ever exist for this Note.
   • No General Solicitation. The Holder, and its officers, directors, employees, agents, stockholders or partners have not either directly or indirectly, including through a broker or finder solicited offers for or offered or sold this Note by means of any form of general solicitation or general advertising within the meaning of Rule 502 of Regulation D under the Securities Act or in any manner involving a public offering within the meaning of Section 4(a)(2) of the Securities Act.  The Holder acknowledges that neither the Company nor any other person offered to sell this Note to it by means of any form of general solicitation or advertising within the meaning of Rule 502 of Regulation D under the Securities Act or in any manner involving a public offering within the meaning of Section 4(a)(2) of the Securities Act.
   • Residence. If the Holder is an individual, then the Holder resides in the state or province identified in the address shown on the Holder’s signature page hereto.  If the Holder is a partnership, corporation, limited liability company or other entity, then the Holder’s principal place of business is located in the state or province identified in the address shown on the Holder’s signature page hereto.
   • Economic Risk. The Holder is aware that an investment in this Note is highly speculative and subject to substantial risks, including, without limitation, those risk factors related to the Company and this Note.  The Holder is capable of bearing the high degree of economic risk and burdens of this investment, including, but not limited to, the possibility of the complete loss of the Holder’s investment, the lack of a public market and limited transferability of this Note, which may make the liquidation of this investment impossible for the indefinite future.  The financial condition of the Holder is such that there is under no present or contemplated future need to dispose of any portion of the Shares acquired to satisfy any existing or contemplated undertaking, need or indebtedness.
   • Ongoing Compliance. The Holder and any future successors and assigns on behalf of itself and each of its owners, directors and officers of the Holder agree, if and as applicable, as follows:
     • to comply at all time with all licensing requirements of the State of Florida applicable to the Company or any of its subsidiaries; and
     • to promptly provide the Company, at its request, with all information, documents and certifications that the Company may request in order to comply with all licensing requirements of the State of Florida applicable to the Company or any of its subsidiaries, including the completion of a Level 2 screening under Florida Statutes Section 435.04.

7. Company Covenant. The Company hereby agrees, so long as this Note is outstanding, it will not incur indebtedness for borrowed money greater than an aggregate amount of $_____ without the written consent of Holder.
8. Miscellaneous.
   • Successors and Assigns. Except as otherwise provided herein, the terms and conditions of this Note will inure to the benefit of, and be binding upon, the respective successors and assigns of the parties; provided, however, that the Company may not assign its obligations under this Note without the written consent of the Holder.  This Note is for the sole benefit of the parties hereto and their respective successors and permitted assigns, and nothing herein, express or implied, is intended to or will confer upon any other person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Note.
   • Governing Law. This Note will be governed by and construed in accordance with the internal laws of the State of New York without giving effect to any choice or conflict of law provision or rule (whether of the State of Florida or any other jurisdiction). Venue for resolution of any disputes with respect to the payment of this Note shall be in the State of New York.
   • Counterparts. This Note may be executed in counterparts, each of which will be deemed an original, but all of which together will be deemed to be one and the same agreement.  Counterparts may be delivered via facsimile, electronic mail (including PDF or any electronic signature complying with the U.S. federal ESIGN Act of 2000, g., www.docusign.com) or other transmission method, and any counterpart so delivered will be deemed to have been duly and validly delivered and be valid and effective for all purposes.
   • Titles and Subtitles. The titles and subtitles used in this Note are included for convenience only and are not to be considered in construing or interpreting this Note.
   • Notices. All notices and other communications given or made pursuant hereto will be in writing and will be deemed effectively given: (a) upon personal delivery to the party to be notified; (b) when sent by email or confirmed facsimile; (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt.  All communications will be sent to the respective parties at the addresses shown on the signature pages hereto (or to such email address, facsimile number or other address as subsequently modified by written notice given in accordance with this Section 8.5).
   • Broker’s Fee. Each party represents that it neither is nor will be obligated to pay any finder’s fee, broker’s fee or commission in connection with the transactions contemplated by this Note. The Holder agrees to indemnify and to hold the Company harmless from any liability for any commission or compensation in the nature of a finder’s or broker’s fee arising out of the transactions contemplated by this Note (and the costs and expenses of defending against such liability or asserted liability) for which the Holder or any of its officers, employees or representatives is responsible. The Company agrees to indemnify and hold the Holder harmless from any liability for any commission or compensation in the nature of a finder’s or broker’s fee arising out of the transactions contemplated by this Note (and the costs and expenses of defending against such liability or asserted liability) for which the Company or any of its officers, employees or representatives is responsible.
   • Expenses. Each party will pay all costs and expenses that it incurs with respect to the negotiation, execution, delivery and performance of this Note.
   • Attorneys’ Fees. If any action at law or in equity is necessary to enforce or interpret the terms of this Note, the prevailing party will be entitled to seek reimbursement for all reasonable and documented legal fees, court costs and expenses incurred by the prevailing party in connection with the enforcement or interpretation of this Note with respect to the particular claim such party had prevailed (including reasonable and documented legal fees in connection with any litigation, including any appeal therefrom).
   • Entire Agreement; Amendments and Waivers. This Note and together with the LOI, constitute the full and entire understanding and agreement between the parties with regard to the subject hereof.  Any term of this Note may be amended and the observance of any term may be waived (either generally or in a particular instance and either retroactively or prospectively) with the written consent of the Company and the Holder.  Any waiver or amendment effected in accordance with this Section 8.9 will be binding upon each future holder of this Note and the Company.
   • Severability. If one or more provisions of this Note are held to be unenforceable under applicable law, such provisions will be excluded from this Note and the balance of this Note will be interpreted as if such provisions were so excluded and this Note will be enforceable in accordance with its terms.
   • Transfer, Successors and Assigns. The terms and conditions of this Note shall inure to the benefit of and be binding upon the respective successors and assigns of the parties.  Notwithstanding the foregoing, the Holder may not assign, pledge, or otherwise transfer this Note without the prior written consent of the Company, which consent shall not be unreasonably withheld; provided the Holder may assign or transfer this Note without the Company’s consent to any affiliate of the Holder or any direct or indirect owner of shares of capital stock of the Company (“Permitted Transferee”) as long as such Permitted Transferee agrees to be bound by all of the terms of this Note and so long as such assignment or transfer does not violate any federal or state laws including Florida laws and regulations relating to security clearances for such Permitted Transferee and its principals and owners.  Subject to the preceding sentences, this Note may be transferred only upon surrender of the original Note for registration of transfer, duly endorsed, or accompanied by a duly executed written instrument of transfer in form satisfactory to the Holder.  Thereupon, a new note for the same principal amount and interest will be issued to, and registered in the name of, the Permitted Transferee.  Interest and principal are payable only to the registered holder of this Note.  Neither this Note nor any of the rights, interests or obligations hereunder may be assigned, by operation of law or otherwise, in whole or in part, by the Company without the prior written consent of Holder except in connection with an assignment in whole to a successor corporation to the Company, provided that (a) such successor company acquires all or substantially all of the Company’s property and assets and (b) none of the Holder’s rights hereunder are impaired.
   • Further Assurances. From time to time, the parties will execute and deliver such additional documents and will provide such additional information as may reasonably be required to carry out the terms of this Note and any agreements executed in connection herewith.
   • Limitation on Interest. In no event will any interest charged, collected or reserved under this Note exceed the maximum rate then permitted by applicable law, and if any payment made by the Company under this Note exceeds such maximum rate, then such excess sum will be credited by the Holder as a payment of principal.
   • Officers and Directors not Liable. In no event will any officer or director of the Company be liable for any amounts due and payable pursuant to this Note.

IN WITNESS WHEREOF, this Note has been duly executed by the Company as of the day and year first above written.

Agreed to and accepted:

DISCLOSURE SCHEDULE

Schedule 5.12

Tax Status

The Company is subject to a sales tax audit by the Florida Department of Revenue, of which the Company was first notified in DATE and is ongoing. The Company believes the audit as a result of the restructuring of the Company contemplated by that certain Closing Agreement among the REDACTEDs, Grandiflora, Inc., and the Company, and acknowledged by FCG, dated DATE, before which the Company was reporting sales and after which (after certain existing operations of the Company were transferred to Grandiflora, Inc.) the Company reported that no sales had taken place.