FIRST AMENDMENT TO OPERATING AGREEMENT OF EXACTUS ONE WORLD, LLC October 23, 2019
Exhibit
10.1
FIRST AMENDMENT TO
OF
EXACTUS ONE WORLD, LLC
October
23, 2019
This
First Amendment (this “Amendment”) to the Amended and
Restated Operating Agreement of Exactus One World, LLC, an Oregon
limited liability company (the “Company”) is made on the date set
forth above (the “Effective
Date”), by the Company and its members set forth in as
set forth in the signature pages hereto (collectively, the
“Members”).
Recitals:
WHEREAS, the Amended and Restated
Operating Agreement of the Company was made and entered into
effective as of March 1, 2019 (the “Operating
Agreement”);
WHEREAS, on March 11, 2019 the
Company’s board of directors approved the acquisition of a
50.1% limited liability membership interest in the Company pursuant
to a subscription agreement (the “Subscription”) and a Membership
Interest Purchase Agreement (the “Purchase Agreement”);
WHEREAS, the membership interests owned
by the Members are as set forth on Exhibit A-3 attached hereto;
and
WHEREAS, the Members desire to: (A)
acknowledge amounts paid for Subscriptions, and pursuant to the
Membership Agreement; (B) amend the balances and due dates for
payment remaining and unpaid under the Subscription and Purchase
Agreement; and (C) amend Sections 5.02(a) and 5.02(b) of the
Operating Agreement with respect to the proceeds of the harvest of
the Company’s crop yields in or following the calendar year
December 31, 2019, regardless of when paid;
NOW, THEREFORE, the Members hereby agree
to amend the Operating Agreement as follows:
1. Recitals. The foregoing
recitals are true and correct and are incorporated herein by this
reference. All initial capitalized terms and other terms not
otherwise defined herein shall have the meanings ascribed to them
in the Operating Agreement, Subscription Agreement and Purchase
Agreement, as the case may be.
2. Membership
Interests. The parties agree and
confirm the membership percentage interests of the Members is as
set forth on Exhibit A-3 attached hereto, subject to the amendments
to Section 5.02 of the Operating Agreement as set forth
below.
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3. Distributions. Section 5.02(a)
shall be amended to add the following provision:
Notwithstanding anything to the contrary
herein, Exhibit A
is hereby amended solely with
respect to Distributable Cash, regardless of when made, arising
from the Company’s 2019 Crop (as defined below) which shall
be paid 100% to Exactus, Inc. (“Parent”) and 0% to the
PMW Members (as defined below). Thereafter, Distributable Cash
shall continue as set forth in Section
5.02(a) with respect to
Distributable Cash payable from all sources other than the 2019
Crop. As used herein, the “2019 Crop” shall mean the
yield resulting from all plants germinated during the calendar year
ending December 31, 2019 and any and all flower, biomass,
extraction processes, byproducts, seeds, work in process, finished
product, and similar materials, wheresoever located and whenever
created. Xxxx Xxxxxxx, Xxxx Xxxxxx XxXxxxxx and Xxxxxx Xxxxx (the
foregoing collectively referred to as the “PMW
Members”), acknowledge and agree that each waives any and all
right to receive any pro-rata share or distribution percentage or
to participate in any manner whatsoever, to the extent of their
respective Percentage Interests, of Distributable Cash arising from
the 2019 Crop (“Distribution Waiver”).
In exchange for the Distribution
Waiver, Parent will deliver 1,223,320 shares of common stock, par
value $0.0001 per share, to PMW Members to be allocated amongst them in
accordance with their respective Percentage Interest as set forth
in Exhibit A-3
to the First Amendment to the
Agreement.
Section 5.02(b) shall be amended to add
the following:
Property of the Company from the 2019 Crop may be distributed in
kind to Parent, in whole or in part, and may be pledged, sold or
assigned by Parent in connection with any financing, loan,
borrowing or investment of Parent, without the consent of the PMW
Members.
4. The Members hereby
acknowledge and agree that as of the date hereof, Parent has paid
the total amount of $3,415,990 consisting of $2,365,990 for the
Subscription and $1,050,000 for the Purchase Agreement. Section a
of the Subscription and Section 3 of the Purchase Agreement are
deleted in their entirety and replaced with the following: Exactus,
Inc. agrees to pay the additional sums of $334,010 on or before
October 23, 2019 under the Subscription and the sum of $450,000 on
or before October 31, 2019 under the purchase Agreement to be
allocated amongst certain of the PMW Members as
follows:
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Membership
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%
of 49.9
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$
Amount
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Xxxx
XxXxxxxx
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19.95%
|
39.98%
|
$
225,000.00
|
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Xxxx
Xxxxxxx
|
19.95%
|
39.98%
|
$
225,000.00
|
|
|
|
|
$
450,000.00
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-2-
5. Additional Covenants Related to the
2019 Crop. The PMW Members shall cooperate in all respects
to promptly provide to and at the direction of Parent at its
offices in Delray Beach, Florida, laboratory testing facilities as
directed and to prospective customers samples reasonably requested
from time to time. The PMW Members shall be responsible to secure
the 2019 Crop and deliver and cause to be delivered to Parent or
its clients, processors, warehouses and customers, upon request,
and shall use its reasonable best efforts to finish preparation for
Parent 100% of the volume of the 2019 Crop in no event later than
December 31, 2019. Parent shall have the right, and the PMW Members
shall fully cooperate, to audit and inspect the 2019 (and later)
Yields for quality and quantity to the satisfaction of Parent in
its sole discretion.
6. Except as stated in
this Amendment, all other viable and applicable provisions of the
Operating Agreement shall remain unchanged and continue in full
force and effect.
7. The Members hereby
ratify and confirm the Operating Agreement, as amended hereby, and
agree that the Operating Agreement, as amended hereby, shall bind
and inure to the benefit of the Members, and their respective
successors, assigns and representatives.
8. This Amendment may
be signed by facsimile and other electronically scanned signatures
shall constitute original signatures for all purposes of these
resolutions and a facsimile or an electronically scanned copy of
these resolutions shall be deemed an original and any person may
rely upon a facsimile or an electronically scanned copy of these
resolutions in determining the validity of the actions taken by the
Members hereunder.
9. The undersigned
hereby direct that a copy of this Amendment be filed with the
minutes of the proceedings of the Company and that this Amendment
shall also be attached to the Operating Agreement of the
Company.
ACKNOWLEDGED
AND AGREED TO AS OF THE DATE SET FORTH ABOVE:
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COMPANY:
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EXACTUS
ONE WORLD, LLC
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By
Name:
/s/ Xxxx Xxxxxx
XxXxxxxx
Title:
Manager
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MEMBERS:
By:
/s/ Xxxxxxxx
Xxxx
Xxxxxxxx Xxxx,
CEO
/s/ Xxxx
Xxxxxxx
Xxxx Xxxxxxx
/s/ Xxxx Xxxxxx
XxXxxxxx
Xxxx Xxxxxx
XxXxxxxx
/s/
Xxxxxx Xxxxx
Xxxxxx
Xxxxx
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-3-
EXHIBIT
A-3
LIST OF
MEMBERS
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Member’s
Name and Address:
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Percentage
Interest
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Exactus
Inc.
00 XX
0xx Xxxxxx, Xxxxx 00, Xxxxxx Xxxxx, XX 00000
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50.1%
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Xxxx
Xxxxxxx
0000
00xx
Xxxxxx, Xxxxx 00Xxxxxxx, Xxxxx 00000
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19.95%
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Xxxx
Xxxxxx XxXxxxxx
0000
Xxxxx Xxxxx XxxxXxxxxxxx, Xxxxxx 00000
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19.95%
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Xxxxxx
Xxxxx
000
Xxxxx Xxxxxx XxXxxx Xxxxxxxx, Xxxxxx 00000
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10.0%
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