Item 1.01 Entry Into A Material Definitive
Agreement.
Execution of Transaction Support Agreement,
Amendment No. 2 to Credit Agreement and Forbearance Agreement
On November 10, 2022, The Greenrose Holding Company
Inc. (the “Company”), together with its wholly-owned subsidiaries Theraplant, LLC (“Theraplant”) and True Harvest
Holdings, Inc. (“TH”, and together with Theraplant and the Company, the “Greenrose Entities”), entered into that
certain Transaction Support Agreement with the Note Holders (as defined below) and the Lenders (the “Credit Agreement Consenting
Lenders”, and collectively with the Note Holders, the “Consenting Lenders”) party to that certain Credit Agreement dated
November 26, 2021 (as amended by that certain Amendment No. 1 to Credit Agreement, dated as of December 31, 2021, and as further amended
by Amendment No. 2 to Credit Agreement (as defined below), the “Credit Agreement”) and DXR Finance, LLC (the “Agent”),
in its capacity as Agent under the Credit Agreement (the “Transaction Support Agreement”).
The Transaction Support Agreement contemplates
that the Greenrose Entities will pursue either a Qualified Alternative Transaction Proposal (as defined below) or a consensual Foreclosure
(as defined below), in each case as described in more detail below. To the extent the Greenrose Entities pursue the Foreclosure, the Foreclosure
will provide for, among other things: (i) the continuation of the Theraplant and TH businesses as a going concern; (ii) the assumption
of employee liabilities, accounts payable and liabilities under assumed contracts; and (iii) NewCo (as defined below) will be obligated
to offer each employee of Theraplant and TH employment at NewCo at (but subject to) closing of the Foreclosure on substantially the same
terms as such employees’ existing employment arrangements.
For up to 50 days following entry into the Transaction
Support Agreement, the Greenrose Entities, with the assistance of their advisors, including Ducera Securities LLC, will use commercially
reasonable efforts to market themselves and their assets with the goal of receiving binding transaction proposals for, including but not
limited to, a sale, disposition, reorganization, merger, financing or other type of transaction that, among other conditions, satisfies
the payment obligations owed by the Greenrose Entities under the Credit Agreement, the DXR Secured Promissory Note (as defined below)
and related loan documents (the “Obligations”), or is on such other terms as are acceptable to the Greenrose Entities, the
Consenting Lenders and the Agent (such a proposal, a “Qualifying Alternative Transaction Proposal”). If the Greenrose Entities
have not received an alternative transaction proposal that reasonably could become a binding Qualifying Alternative Transaction Proposal
by not later than 30 days following the entry into the Transaction Support Agreement, then the marketing period shall end and the Greenrose
Entities’ obligations under the Transaction Support Agreement with respect to the Foreclosure shall commence from and after the
date upon which the Consenting Lenders deliver the Foreclosure Agreement. In the event that the Greenrose Entities receive more than one
Qualifying Alternative Transaction Proposal, the Greenrose Entities shall hold an auction to determine the winning proposal.
On November 10, 2022, concurrently with the execution
of the Transaction Support Agreement, the Greenrose Entities, as Guarantors, entered into an Amendment No. 2 to the Credit Agreement with
the Credit Agreement Consenting Lenders and DXR Finance, LLC, as Agent (“Amendment No. 2 to the Credit Agreement”) pursuant
to which the Credit Agreement Consenting Lenders agreed to fund an additional $10 million of loans, with $5 million to be borrowed immediately
on the effective date of the Amendment No. 2 to the Credit Agreement and $5 million to be borrowed in one or more draws thereafter on
or before December 31, 2022. Amendment No. 2 to the Credit Agreement also provided for certain amendments to the Credit Agreement to facilitate
the transactions contemplated by the Transaction Support Agreement. In addition, as consideration for the Credit Agreement Lenders’
entry into Amendment No. 2 to Credit Agreement, the make whole period applicable to the loans under the Credit Agreement was extended
by three (3) months to the thirty third month anniversary of the original closing date of the Credit Agreement.
If the Greenrose Entities fail to enter into a
binding, fully executed Qualifying Alternative Transaction Proposal within the time periods specified in the Transaction Support Agreement,
the Consenting Lenders and Agent will effectuate a foreclosure through the formation of a newly-formed company (“NewCo”) that
will transmit an offer, in the form of a foreclosure agreement (the “Foreclosure Agreement”), to the Greenrose Entities to
accept the Agent’s collateral (which constitutes substantially all assets of the Greenrose Entities) (the “Foreclosure”).
Upon consummation of the Foreclosure, NewCo will also (i) assume certain liabilities of the Greenrose Entities, including employee liabilities,
accounts payable and liabilities under assumed contracts and (ii) agree to fund the Greenrose Entities’ anticipated tax liabilities
(collectively, the “NewCo Liabilities”). The consummation of the Foreclosure is subject to conditions set forth in the Transaction
Support Agreement, including the provision by the Consenting Lenders of sufficient wind-down funding, receipt of required regulatory approvals
and the execution of a mutual release agreement between the Greenrose Entities, on the one hand, and NewCo, the Agent and Consenting Lenders,
on the other hand, and new indemnification agreements between NewCo and current officers and directors of the Greenrose Entities.
The Transaction Support Agreement may be automatically
terminated upon the occurrence of specified events, including, without limitation, the consummation of the Foreclosure, any material breach
of the Transaction Support Agreement that is not cured within ten days of receipt of written notice, or the date that is 90 days from
the date on which the Greenrose Entities present the Transaction Support Agreement to the Connecticut Department of Consumer Protection.
For a period of 25 days after the entry into the Transaction Support Agreement (the “Limited Diligence Out Period”), the Agent
and Consenting Lenders may also terminate the Transaction Support Agreement to the extent that the Greenrose Entities (i) breach their
obligation to make certain information available to the Agent and Consenting Lenders in connection with their diligence review of the
NewCo Liabilities and fail to cure such breach within either five days’ notice of such breach or by the expiration of the Limited
Diligence Out Period or (ii) the Agent or Consenting Lenders discover material NewCo Liabilities which were not previously disclosed by
the Greenrose Entities.
On November 10, 2022, concurrently with the execution
of the Transaction Support Agreement, the Greenrose Entities, as Guarantors, entered into a forbearance agreement with the Lenders party
to the Credit Agreement, the holders (the “Note Holders”) of that certain Secured Promissory Note in an original principal
amount of $15,300,000 dated as of October 12, 2022 (the “DXR Secured Promissory Note”) and DXR Finance, LLC, as Agent (the
“Forbearance Agreement”). Pursuant to the Forbearance Agreement the parties thereto agreed that that the Lenders, the Note
Holders and the Agent will provide a limited forbearance (as set forth in Section 2.02 of the Forbearance Agreement) by terms of which
the Lenders and the Agent will forbear from accelerating the Obligations and otherwise exercising any rights, remedies, powers, privileges
and defenses under the Credit Agreement, the DXR Secured Promissory Note and related loan documents as a result of the existence of certain
types of Events of Default, for the Forbearance Period (as defined in the Forbearance Agreement) that will expire on the Forbearance Termination
Date (as defined in the Forbearance Agreement).
In connection with the Transaction Support Agreement,
the Company paid to the Agent for the benefit of the Credit Agreement Lenders party to the Forbearance Agreement a forbearance payment
equal to 1.00% of the principal amount of loans outstanding under the Credit Agreement immediately prior to the effectiveness of the Forbearance
Agreement, and will pay (subject to the occurrence of certain events as more fully described in the Forbearance Agreement) such additional
forbearance payments as provided in the Forbearance Agreement.
The foregoing descriptions of the Transaction
Support Agreement, Amendment No. 2 to the Credit Agreement and the Forbearance Agreement do not purport to be complete and are subject
to and qualified in its entirety by reference to the complete text of such agreement, copies of which are filed as Exhibits 10.1, 10.2
and 10.3, respectively and are incorporated herein by reference.
Although the Greenrose Entities intend to pursue
the transactions described herein in accordance with the terms and conditions set forth in the Transaction Support Agreement, there can
be no assurance that the Greenrose Entities will be successful in consummating transactions on the terms and conditions set forth in the
Transaction Support Agreement.