Form 8-K

8-K — Borealis Foods Inc.

Accession: 0001213900-26-039351

Filed: 2026-04-02

Period: 2026-03-27

CIK: 0001852973

SIC: 2000 (FOOD & KINDRED PRODUCTS)

Item: Entry into a Material Definitive Agreement

Item: Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement

Item: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers

Item: Other Events

Item: Financial Statements and Exhibits

Documents

8-K — ea0284826-8k_borealis.htm (Primary)

EX-10.1 — FORBEARANCE AND AMENDMENT AGREEMENT, DATED AS OF MARCH 27, 2026, BY AND AMONG BOREALIS FOODS INC., PALMETTO GOURMET FOODS (CANADA), INC., BOREALIS IP INC., PALMETTO GOURMET FOODS, INC., PGF REAL ESTATE I, INC (ea028482601ex10-1.htm)

EX-10.2 — ENGAGEMENT LETTER, DATED AS OF MARCH 27, 2026, BY AND BETWEEN BOREALIS FOODS INC., AND VRS RESTRUCTURING SERVICES, LLC (ea028482601ex10-2.htm)

GRAPHIC (ea028482601_ex10-2img1.jpg)

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8-K — CURRENT REPORT

8-K (Primary)

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UNITED

STATES

SECURITIES

AND EXCHANGE COMMISSION

Washington,

D.C. 20549

FORM

8-K

CURRENT

REPORT

Pursuant

to Section 13 or 15(d)

the Securities Exchange Act of 1934

March

27, 2026

Date

of Report (date of earliest event reported)

BOREALIS FOODS INC.

(Exact

name of registrant as specified in its charter)

Ontario

001-40778

98-1638988

(State or other jurisdiction

incorporation or organization)

(Commission File Number)

(I.R.S. Employer

Identification Number)

1540 Cornwall Rd., Suite 104

Oakville, ON L6J 7W5

(Address

of principal executive offices and zip code)

(905)

278-2200

(Registrant’s

telephone number, including area code)

Check

the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under

any of the following provisions:

☐

Written communications pursuant to Rule 425 under

the Securities Act (17 CFR 230.425)

☐

Soliciting material pursuant to Rule 14a-12 under

the Exchange Act (17 CFR 240.14a-12)

☐

Pre-commencement communications pursuant to Rule

14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐

Pre-commencement communications pursuant to Rule

13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities

registered pursuant to Section 12(b) of the Act:

Title

of each class

Trading

Symbol

Name

of each exchange on which registered

Common Shares

BRLS

Nasdaq Capital Market

Warrants

BRLSW

Nasdaq Capital Market

Indicate

by check mark whether the registrant is an emerging growth company as defined in Rule 12b-2 of the Exchange Act.

Emerging

growth company ☒

an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying

with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item

1.01 Entry into a Material Definitive Agreement.

Forbearance

and Amendment Agreement

March 27, 2026, Borealis Foods Inc. (the “Company”), together with its wholly owned subsidiaries party thereto (collectively

with the Company, the “Loan Parties”), entered into a Forbearance and Amendment Agreement (the “Forbearance

Agreement”) with Frontwell Capital Partners Inc. (the “Lender”), in connection with the Credit Agreement,

dated as of August 10, 2023 (as amended, supplemented or otherwise modified from time to time prior to the date thereof, the “Credit

Agreement”), by and among the Loan Parties and the Lender.

Background.

previously disclosed in the Company’s Current Report on Form 8-K filed on February 6, 2026 (the “Prior 8-K”),

the Lender notified the Company of the occurrence of certain Events of Default under the Credit Agreement, including the failure by the

Borrowers to maintain required Excess Availability and the failure to timely deliver certain financial statements and compliance certificates.

The Forbearance Agreement addresses these and other defaults that have since occurred (collectively, the “Specified Defaults”),

which are set forth on Schedule 2.1 to the Forbearance Agreement and include, among other things, (i) failures by the Borrowers to timely

eliminate certain overadvances made under the revolving credit facility during the period from October, 2025 to March , 2026, (ii) failures

to maintain the required minimum Excess Availability during the same period, (iii) the issuance by certain Loan Parties of approximately

$26.7 million in aggregate principal amount of unsecured notes to certain third parties in violation of the Credit Agreement’s

restrictions on indebtedness, (iv) the granting of capital stock of certain Canadian subsidiaries in violation of the Credit Agreement’s

restrictions on liens, (v) the failure to deliver an unqualified auditor’s opinion with the fiscal year 2024 audited financial

statements, (vi) the failure to timely deliver certain monthly financial statements, compliance certificates, borrowing base certificates

and collateral reports for periods ending on or before January 31, 2026 and (vii) resulting breaches of representations and warranties

under the Credit Agreement.

Outstanding

Obligations.

of March 25, 2026, the aggregate outstanding Obligations under the Credit Agreement were no less than $16,116,215.30, plus all accrued

and unpaid interest, fees and other costs and expenses then outstanding.

Forbearance.

Subject

to the terms and conditions of the Forbearance Agreement, the Lender has agreed to temporarily forbear from exercising its rights and

remedies with respect to the Specified Defaults during the period (the “Forbearance Period”) commencing on the effective

date of the Forbearance Agreement and ending at 11:59 p.m., New York time, on April 27, 2026 (the “Forbearance Outside Date”),

unless earlier terminated upon the occurrence of a Forbearance Default (as defined therein). The Lender’s forbearance is limited

to the Specified Defaults and does not extend to any other existing or future defaults.

Lending Obligation.

The

Forbearance Agreement provides that, as a result of the Specified Defaults, the Lender is under no obligation to extend any further Revolving

Loans or other financial accommodations to the Borrowers.

Default

Rate and Reserve.

Under

the Forbearance Agreement, the Obligations bear interest at the default rate which has been effect since December 9, 2025, and will continue

to accrue, interest at the default rate during and after the Forbearance Period, and (ii) the Lender has validly imposed. The Lender

has also imposed a $600,000 general Reserve under the Credit Agreement.

Forbearance

Fee.

The

Loan Parties agreed to pay the Lender a forbearance fee of $50,000, payable on the effective date of the Forbearance Agreement.

Applicable

Margin Increase.

Pursuant

to the Forbearance Agreement, the definition of “Applicable Margin” in Section 1.1 of the Credit Agreement was amended and

restated to provide for an Applicable Margin of (i) 6.50% per annum for Revolving Loans bearing interest at the Prime Rate or Base Rate,

and (ii) 6.75% per annum for the Term Loan.

Milestones.

The

Forbearance Agreement requires the Loan Parties to satisfy certain milestones during the Forbearance Period, including, among others:

(i) by March 30, 2026, the retention and installation of a Chief Restructuring Officer (as described under Item 5.02 below); (ii) by

April 9, 2026, the delivery to the Lender of a refinancing plan in form and substance satisfactory to the Lender, sufficient to fully

repay all Obligations under the Loan Documents (the “Refinancing Plan”); and (iii) other operational, reporting, and

compliance milestones set forth in the Forbearance Agreement. Failure to timely satisfy any milestone constitutes an immediate Forbearance

Default.

Blocked

Notes.

The

Forbearance Agreement prohibits the Loan Parties from making any payments on certain unsecured notes in the aggregate principal amount

of approximately $26.7 million (the “Blocked Notes”) issued from time to time by certain Loan Parties to certain shareholders

and their affiliates. The holders of the Blocked Notes include (a) Barthelemy Helg, the Company’s Chairman of the Board and co-founder,

(b) Z Ventures Inc. and Zagros Alpine Capital, entities controlled by Reza Soltanzadeh, the Company’s Chief Executive Officer and

co-founder, and (c) Oxus Capital PTE LTD., the Company’s former SPAC sponsor and a significant shareholder. The issuance of the

Blocked Notes is among the Specified Defaults under the Forbearance Agreement.

Release.

connection with the Forbearance Agreement, the Loan Parties provided the Lender with a general release of all claims arising on or before

the effective date of the Forbearance Agreement.

Termination.

The

Forbearance Period will terminate automatically upon the occurrence of a Forbearance Default, which includes among other things, any

breach of the Forbearance Agreement, any new Event of Default, the failure to satisfy any milestone and certain other events specified

in the Forbearance Agreement. Upon termination of the Forbearance Period, the Lender may exercise all rights and remedies available under

the Credit Agreement, the other Loan Documents and applicable law.

There

can be no assurance that the Forbearance Period will not terminate prior to the Forbearance Outside Date, that the Loan Parties will

be able to satisfy the milestones contained in the Forbearance Agreement (including the delivery of a Refinancing Plan satisfactory to

the Lender), or that the Company will be able to refinance or repay the Obligations in full.

The

foregoing description of the Forbearance Agreement does not purport to be complete and is qualified in its entirety by reference to the

full text of the Forbearance Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated

herein by reference.

CRO

Engagement Letter

March 27, 2026, the Company and the other Loan Parties entered into an engagement letter (the “Engagement Letter”)

with VRS Restructuring Services, LLC (“VRS”) pursuant to which VRS agreed to provide the services of Jeffrey T. Varsalone

as Chief Restructuring Officer of each of the Loan Parties, as described in Item 5.02 below.

The

foregoing description of the Engagement Letter does not purport to be complete and is qualified in its entirety by reference to the full

text of the Engagement Letter, a copy of which is filed as Exhibit 10.2 to this Current Report on Form 8-K and is incorporated herein

by reference.

Item

2.04 Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.

The

information set forth under Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference. As described therein, the

Forbearance Agreement (a) confirms the accrual of interest at the Default Rate on the Obligations since December 9, 2025 (representing

an increase of 2.00% per annum over the applicable non-default rate), (b) increases the Applicable Margin for Revolving Loans from 4.50%

per annum to 6.50% per annum, (c) increases the Applicable Margin for the Term Loan from 4.75% per annum to 6.75% per annum and (d) requires

the payment of a $50,000 forbearance fee. These items have the effect of increasing the Company’s direct financial obligations

under the Credit Agreement.

Item

5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of

Certain Officers.

Appointment

of Chief Restructuring Officer

connection with the Forbearance Agreement described under Item 1.01 above, on March 30, 2026, the Board of Directors of the Company appointed

Jeffrey T. Varsalone as Chief Restructuring Officer of the Company and each of the other Loan Parties, effective as of such date.

Pursuant

to the Forbearance Agreement, Mr. Varsalone, as Chief Restructuring Officer, will serve as an executive officer of each of the Loan Parties

with general authority to take any and all actions for and on behalf of each Loan Party. As Chief Restructuring Officer, Mr. Varsalone

will have powers at least as broad as the chief executive officer of each Loan Party (the current chief executive officer being Reza

Soltanzadeh). Additional governance provisions relating to the Chief Restructuring Officer under the Forbearance Agreement are as described

in Item 8.01 below.

Mr.

Varsalone, age 54, has served as the founder and Senior Managing Director of VRS Restructuring Services, LLC, a boutique financial restructuring

advisory firm specializing in chief restructuring officer, crisis management and insolvency-related services, since January 2023. Prior

to VRS Restructuring Services, LLC, Mr. Varsalone served as a Managing Director at G2 Capital Advisors, an integrated investment bank

focused on operational and financial advisory solutions in the lower middle market, from April 2019 to January 2023. Mr. Varsalone holds

a Juris Doctor degree from St. John’s University School of Law.

Mr.

Varsalone’s services are being provided pursuant to the Engagement Letter, which supersedes a prior engagement letter dated December

4, 2025, under which VRS served as the Company’s financial advisor. Under the Engagement Letter, VRS’s fees are charged on

an hourly basis at rates ranging from $325 to $925 per hour depending on team member level. There is no success fee, transaction fee,

or other contingent compensation. The Company paid VRS a $100,000 retainer prior to commencement of the engagement, against which weekly

invoices are applied, and VRS may request that the retainer be refreshed from time to time. The Company also reimburses VRS for reasonable

out-of-pocket expenses. The Engagement Letter has an initial term of 45 days and thereafter continues until terminated by either party

on five business days’ written notice. The Company has agreed to customary indemnification and directors’ and officers’

insurance obligations in favor of VRS and its personnel.

There

is no arrangement or understanding between Mr. Varsalone and any other person pursuant to which Mr. Varsalone was appointed as Chief

Restructuring Officer, other than the requirements of the Forbearance Agreement as described in Item 1.01 above. There are no family

relationships between Mr. Varsalone and any director or executive officer of the Company. Mr. Varsalone has no direct or indirect material

interest in any existing or currently proposed transaction that would require disclosure under Item 404(a) of Regulation S-K, other than

the Engagement Letter described herein.

There

are no additional, and no anticipated additional, compensatory arrangements between the Company and Mr. Varsalone in connection with

his service as the Company’s Chief Restructuring Officer beyond the fees payable pursuant to the Engagement Letter.

Item

8.01 Other Events.

Restructuring

Status.

The

Company is currently evaluating strategic alternatives, including equity raises and refinancing transactions. There can be no assurance

that the Company will be successful in implementing any such alternatives, that any Refinancing Plan will be satisfactory to the Lender,

that the Forbearance Period will not be terminated prior to the Forbearance Outside Date, or that the Company will be able to continue

as a going concern. The Company’s failure to satisfy its obligations under the Forbearance Agreement or to refinance or repay its

obligations under the Credit Agreement would have a material adverse effect on the Company’s business, financial condition, results

of operations and liquidity, and could result in the Lender exercising all available remedies, including acceleration of the Obligations

and foreclosure on the Collateral.

CRO

Governance Provisions.

Under

the Forbearance Agreement, in the event that any instruction or direction by the Chief Restructuring Officer is overruled by any officer,

director, board of directors, or shareholder of any Loan Party, or any Loan Party fails to take or refrain from taking any action as

directed by the Chief Restructuring Officer, or the board of directors or shareholders fail to approve any action recommended by the

Chief Restructuring Officer and supported by the Lender, any such event would constitute an immediate Forbearance Default, potentially

resulting in the termination of the Forbearance Period.

Forward-Looking

Statements

This

Current Report on Form 8-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended,

and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, but are not limited to, statements

regarding the Company’s ability to satisfy the milestones under the Forbearance Agreement, deliver a Refinancing Plan satisfactory

to the Lender, refinance or repay the Obligations, continue as a going concern, and implement strategic alternatives. These statements

are based on current expectations and assumptions and are subject to risks and uncertainties that could cause actual results to differ

materially from those expressed or implied. The information contained in the Company’s filings with the SEC, including under the

caption “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, and subsequent

filings with the SEC, identifies other important factors that could cause actual results to differ from the Company’s forward-looking

statements. The Company’s filings with the SEC are available at www.sec.gov. Investors should not place undue reliance on

the Company’s forward-looking statements. The Company undertakes no obligation to update any forward-looking statements to reflect

events or circumstances after the date of this report, except as required by applicable law.

Item

9.01 Financial Statements and Exhibits

(d):

The following exhibits are being filed herewith:

Exhibit

No.

Description

10.1

Forbearance and Amendment Agreement, dated as of March 27, 2026, by and among Borealis Foods Inc., Palmetto Gourmet Foods (Canada), Inc., Borealis IP Inc., Palmetto Gourmet Foods, Inc., PGF Real Estate I, Inc., PGF Real Estate II, Inc. and Frontwell Capital Partners Inc. *

10.2

Engagement Letter, dated as of March 27, 2026, by and between Borealis Foods Inc., and VRS Restructuring Services, LLC

104

Cover Page Interactive Data File (embedded within the

Inline XBRL document)

Certain schedules and exhibits have been omitted pursuant to

Item 601(a)(5) of Regulation S-K. The Company agrees to furnish a copy of any omitted schedule or exhibit to the SEC upon request.

SIGNATURE

Pursuant

to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its

behalf by the undersigned hereunto duly authorized on this 2nd day of April 2026.

BOREALIS FOODS INC.

Date:

April 2, 2026

By:

/s/ Pouneh Rahimi

Pouneh V. Rahimi

Chief Legal Officer

EX-10.1

Filename: ea028482601ex10-1.htm · Sequence: 2

Exhibit

10.1

Execution

Version

FORBEARANCE

AND AMENDMENT AGREEMENT

This

FORBEARANCE AND AMENDMENT AGREEMENT (this “Agreement”), dated as of March 27, 2026, is entered into by:

(i)

PALMETTO GOURMET FOODS, INC., a South Carolina corporation (“Palmetto US”);

(ii)

Each of the other Borrowers and Guarantors identified on Schedule 1 hereto (such entities, collectively with Palmetto US the “Forbearance

Parties” and each of the Forbearance Parties may also be referred to herein as a “Forbearance Party”); and

(iii)

FRONTWELL CAPITAL PARTNERS INC. (“Lender”).

RECITALS

(a)

The Forbearance Parties and Lender entered into that certain Credit Agreement, dated as of August 10, 2023 (as amended, modified, or

supplemented from time to time, the “Credit Agreement”), pursuant to which Lender extended certain financial accommodations

to, or for the benefit of, the Forbearance Parties.

(b)

The Forbearance Parties have requested that Lender again forbear from exercising its rights and remedies with respect to each of the

Specified Defaults during the Forbearance Period (as defined below).

(c)

Lender has agreed to such forbearance requested by the Forbearance Parties only upon the terms and conditions set forth in this Agreement

(including, without limitation, the Credit Agreement amendments set forth herein).

NOW,

THEREFORE, in consideration of the premises herein contained and other good and valuable consideration, the receipt and sufficiency of

which are hereby acknowledged, the parties, intending to be legally bound, agree as follows:

ARTICLE

DEFINITIONS

Section

1.1 Capitalized terms used in this Agreement, to the extent not otherwise defined in this Agreement, shall have the same meaning

as in the Credit Agreement (as amended herein) and the other documents evidencing and securing the Indebtedness (the foregoing, collectively,

the “Loan Documents”). As used in this Agreement, the following terms shall have the following meanings (such meanings

to be equally applicable to both the singular and plural forms of the terms defined):

“Bankruptcy

Code” means Title 11 of the United States Code, as amended.

“Blocked

Notes” means each of the promissory notes identified on Annex I to Schedule 2.1 attached hereto.

“Budget”

means the projected 13 week cash operating budget, in form and substance satisfactory to the Lender at its sole discretion and as updated

in accordance with Section 7.1(a) hereof.

“Company

Advisor” means VRS Restructuring Services, LLC, a New Hampshire limited liability company.

“Enforcement

Action” means (a) any action by any creditor to foreclose any lien (or purported lien) on any material assets of any Forbearance

Party, (b) any action by any creditor (or its agent) to take possession of, consummate the sale of, or otherwise realize (judicially

or non-judicially) upon any material assets of any Forbearance Party, and/or (c) the commencement by any creditor or its agent of any

legal proceedings against or with respect to any Forbearance Party that could result in a judgment that would permit seizure or attachment

of any material assets of any Forbearance Party. For the purposes hereof a material portion of assets shall mean assets having an aggregate

value in excess of one hundred thousand dollars ($100,000).

“Forbearance

Fee” means a fee equal to fifty thousand dollars ($50,000), fully earned, non-refundable and paid upon the effective date of

this Agreement.

“Forbearance

Default” means (i) the occurrence of any Event of Default (other than each Specified Default), unless such Event of Default

has been otherwise expressly waived in writing by Lender, (ii) the failure of any Forbearance Party to comply with any term, condition,

or covenant set forth in this Agreement in accordance with the terms of this Agreement, (iii) the failure of any representation or warranty

made by any Forbearance Party under or in connection with this Agreement to be true, correct and complete in all respects as of the date

when made, (iv) the commencement or continuation of any Enforcement Action against any Forbearance Party or any of its property, (v)

any Forbearance Party (or Affiliate thereof) shall contest any term, provision, or acknowledgment contained in this Agreement, (vi) any

Forbearance Party shall suffer the appointment of a receiver, trustee, custodian or similar fiduciary, or shall make an assignment for

the benefit of creditors, or any petition for an order for relief shall be filed by or against any Forbearance Party under the Bankruptcy

Code, (vii) the occurrence or existence of any event, act, condition or occurrence of whatever nature, whether singularly or in conjunction

with any other event or events, act or acts, condition or conditions, occurrence or occurrences, whether or not related, resulting in

a Material Adverse Event from and after the date of this Agreement, (viii) the imposition of any lien or encumbrance against the Collateral

that is senior to the liens in favor of the Lender (other than Permitted Liens arising under clauses (b)(i), (g), or (j) set forth in

the definition of Permitted Liens), (ix) the commencement of any litigation or other proceeding by any Forbearance Party or any of its

Affiliates against Lender or any of Lender’s Affiliates, (x) the termination of the engagement of the Company Advisor, except as

otherwise permitted in Section 7.1(e), (xi) any holder of Blocked Notes that is payable upon demand issues a demand for repayment

of such Blocked Notes, (xii) any holder of Blocked Notes accelerates the maturity of such Blocked Notes or otherwise commences any legal

or other enforcement action against any Forbearance Party concerning the collection of such Blocked Notes, (xiii) any payment (whether

in respect of principal, interest, or otherwise), is made in respect of any Blocked Notes, (xiv) the Proposed CRO ceases to be the Chief

Restructuring Officer for any Forbearance Party following his installation, (xv) there is any modification or alteration (or purported

modification or alteration) of the scope of powers and duties conferred upon the Chief Restructuring Officer (following the installation

of the Proposed CRO as Chief Restructuring Officer), including, without limitation, any modification resulting from a modification of

the scope of powers conferred upon the Forbearance Parties’ chief executive officer; or (xvi) the occurrence of any other matter

concerning the Chief Restructuring Officer defined as a Forbearance Default in Section 7.1 hereof.

“Forbearance

Period” means the period commencing at the time when all conditions to the effectiveness of this Agreement have been satisfied,

and ending on the earliest to occur of (i) the date on which any Forbearance Default occurs and the Lender delivers to the Forbearance

Parties a notice (including by electronic means) terminating the Forbearance Period, which notice may be delivered at any time upon or

after the occurrence of any such Forbearance Default, (ii) the time at which an Event of Default under Section 8.1(d) of the Credit

Agreement has occurred, without any requirement for notice or further action, or (iii) the Forbearance Outside Date.

“Forbearance

Effective Date” shall have the meaning specified in Section 4.1 hereof.

“Forbearance Outside Date”

means (a) 11:59 p.m., New York, New York time on April 27, 2026.

“Forbearance

Party Subordinated Debt” shall have the meaning specified in Section 7.5 hereof.

“Known

Existing Defaults” shall have the meaning specified in Section 2.1 hereof.

“Known Expected Defaults”

shall have the meaning specified in Section 2.2 hereof.

“Proposed CRO” means Jeffrey Varsalone

“Refinancing

Plan” shall have the meaning specified in Schedule 7.3 attached hereto.

“Released Parties” shall

have the meaning specified in Section 10.11 hereof.

“Specified Defaults” shall have the meaning specified in

Section 2.2 hereof.

ARTICLE

SPECIFIED DEFAULTS

Section

2.1 The Forbearance Parties agree and acknowledge that the Events of Default which are more particularly described on Schedule

2.1 attached hereto and incorporated herein by reference, have occurred and are continuing under the Credit Agreement (collectively,

the “Known Existing Defaults”).

Section

2.2 The Forbearance Parties have informed the Lender that during the Forbearance Period, the following Events of Default are reasonably

expected to occur (collectively, the “Known Expected Defaults”):

(a)

One or more Events of Default under Section 8.1(b)(i) of the Credit Agreement, as a result of one or more failures by the Borrower

to maintain at all times during the Forbearance Period, Excess Availability of not less than $4,375,000, as required by Section 7.1 of

the Credit Agreement;

(b)

One or more Events of Default under Section 8.1(b)(i) of the Credit Agreement, as a result of the issuance, from time to time, during

the Forbearance Period, by Holdings, Palmetto US or both, of certain unsecured notes to one or more existing shareholders of Holdings,

which notes are subject to a subordination agreement that is satisfactory to the Lender at its sole discretion, the proceeds of which

are used by Holdings, Palmetto US or both to fund their respective on-going working capital requirements (it being understood that the

issuance any such note issued by the Forbearance Parties that is not subject to a satisfactory subordination agreement approved by the

Lender shall constitute a Forbearance Default and shall not qualify as a Known Expected Default);

(c)

One or more Events of Default under Section 8.1(f) of the Credit Agreement, as a result of one or more breaches of any representation

or warranty made by or on behalf of any Forbearance Party, arising from or as a result of, the occurrence and continuance of any Events

of Default described in Sections 2.2(a) and 2.2(b) above and Section 2.2(d) below; and

(d)

One or more Events of Default under Section 8.1(b)(i) of the Credit Agreement as a result of one or more failures by the Forbearance

Parties to deliver timely to the Lender written notices of the occurrence and continuance of one or more of the Events of Default described

in Sections 2.2(a), 2.2(b), and 2.2(c) above.

The

Known Existing Defaults and the Known Expected Defaults are hereinafter sometimes referred to collectively as the “Specified

Defaults” and each as a “Specified Default.”

ARTICLE

FORBEARANCE; CERTAIN AGREEMENTS

Section

3.1 Forbearance. During the Forbearance Period, unless otherwise expressly provided in this Agreement, Lender will not take

any action, based solely on any Specified Default, (i) to accelerate the Obligations under the Loan Documents, or (ii) to exercise any

Enforcement Action available to Lender under the Loan Documents or applicable law with respect to the Obligations. Notwithstanding anything

to the contrary in the foregoing, in the Loan Documents, or otherwise, in no event shall Lender be obligated to or release any Collateral

during the Forbearance Period or, if the Lender has not elected to waive each of the Specified Defaults, at any time thereafter. Upon

termination of the Forbearance Period, Lender shall be entitled (but not required) to exercise any of its rights and remedies under this

Agreement, the Loan Documents, or applicable law, including, without limitation, the right to enforce the liens on, and security interest

in, the Collateral described in the Loan Documents, without further notice, demand, notice of intent to accelerate, notice of acceleration,

presentment, protest or other formalities of any kind, all of which are hereby expressly waived by Forbearance Parties.

Section

3.2 No Obligation for Further Financial Accommodations. Each of the Forbearance Parties acknowledges that as a result of the

Specified Defaults, the Lender is under no obligation to extend any further Revolving Loans or other financial accommodations to or for

the benefit of the Forbearance Parties, provided, however, that the Lender is permitted (but not required) to extend further financial

accommodations to the Borrower on terms satisfactory to the Lender at its sole discretion, including, without limitation, during the

Forbearance Period. Any such financial accommodations provided by Lender shall automatically constitute Obligations subject to the Credit

Agreement and other Loan Documents and secured by the Collateral.

Section

3.3 No Waiver. Lender has not waived, is not by this Agreement waiving, and has no present intention of waiving, any Default

or Event of Default that may be continuing as of the effectiveness of this Agreement or any Default or Event of Default that may occur

after the effectiveness of this Agreement (whether the same or similar to any Specified Default or otherwise), and Lender has not agreed

to forbear with respect to any of its rights or remedies concerning any Default or Event of Default (other than with respect to each

Specified Default and then only during the Forbearance Period), that may have occurred or is continuing as of the effectiveness of this

Agreement or that may occur after the effectiveness of this Agreement.

Section

3.4 Continued Effectiveness of Certain Default-Triggered Provisions in Credit Agreement. Except as otherwise expressly provided

in this Agreement, each Specified Default shall continue to constitute an actionable Event of Default for the purpose of triggering all

limitations, restrictions or prohibitions on certain actions that may be taken, omitted or otherwise acquiesced to by or on behalf of

Forbearance Parties pursuant to the Credit Agreement or any other Loan Document, and any actions or inactions taken or omitted or otherwise

acquiesced to by or on behalf of the Forbearance Parties in violation of such provisions while any Default or Event of Default (including

any Specified Default) exists will constitute additional Events of Default under the Credit Agreement and the other Loan Documents, as

well as a Forbearance Default under this Agreement.

Section

3.5 No Assurances Regarding Extension of Forbearance Period. Without limiting the generality of the foregoing, no Forbearance

Party will assert, claim or contend that any prior action or course of conduct by Lender, or actions taken (or omitted to be taken) by

the Lender during the Forbearance Period constitutes an agreement or obligation to continue such action or course of conduct in the future,

or a basis for altering any obligation of any Forbearance Party under this Agreement, the Credit Agreement or any other Loan Document

or altering any right, privilege or remedy of Lender under this Agreement, the Credit Agreement or any other Loan Document. Each Forbearance

Party hereby acknowledges and agrees that Lender has made no commitment as to how or whether any Specified Default will be resolved,

nor has Lender given any assurances or commitments with respect to any additional or future forbearance, waiver or accommodation of any

kind upon the expiration of the Forbearance Period, and each Forbearance Party agrees that Lender does not have any obligation to extend

the Forbearance Period. Any agreement by Lender to extend the Forbearance Period must be set forth in writing and signed by a duly authorized

signatory of Lender.

Section

3.6 Interest Rates during the Forbearance Period. Notwithstanding anything in this Agreement to the contrary, each Forbearance

Party hereby agrees and acknowledges that Lender validly instituted the Default Rate of Interest in respect of the Obligations on December

9, 2025, that the Obligations have accrued interest at the Default Rate of interest since that date, and that such Obligations under

the Loan Documents shall continue to accrue interest at the Default Rate (whether during or after the conclusion of the Forbearance Period).

ARTICLE

CONDITIONS PRECEDENT

Section

4.1 Conditions Precedent to this Agreement. The effectiveness of this Agreement against Lender is conditioned upon the satisfaction

of the following conditions precedent. The determination as to whether each condition has been satisfied may be made in Lender’s

sole option and sole discretion, as confirmed by the Lender or its counsel to the Forbearance Parties or their counsel by a written notice

or email thereof (the date on which such written notice or email is delivered by the Lender or its counsel to the Forbearance Parties

or their counsel is hereinafter referred to as the “Forbearance Effective Date”).

(a)

The Forbearance Parties shall have executed and delivered this Agreement (and all other Loan Documents requested by Lender).

(b)

Lender shall have received payment of the Forbearance Fee (which payment may, at the sole option of Lender, be implemented by charging

the outstanding Obligations under the Credit Agreement).

(c)

Lender shall have received evidence that all organizational proceedings necessary to authorize the execution, delivery and performance

of this Agreement and the transactions contemplated hereby have been taken (exclusive of any actions needed to install the Proposed CRO

as Chief Restructuring Officer, which may be taken within the time periods set forth on Schedule 7.3).

(d)

Other than any Specified Default, all representations, warranties, covenants and agreements of the Forbearance Parties contained in the

Loan Documents shall be true and correct in all material respects (except that for those representations and warranties already qualified

by concepts of materiality, those representations and warranties shall be true and correct in all respects) at and as of the Forbearance

Effective Date as though then made, except for such representations and warranties as by their terms expressly speak as of an earlier

date.

(e)

No Event of Default or Default (other than any Specified Default) shall have occurred and be continuing.

(f)

Borrower shall pay on demand all fees and expenses incurred by Lender in connection with this Agreement and the other Loan Documents,

including, but not limited to, the fees and expenses of Lender’s counsel and other advisors (which payment may, at the sole option

of Lender, be implemented by charging the Obligations under the Credit Agreement).

ARTICLE

NO WAIVER

Section

5.1 Nothing contained in this Agreement shall be construed as a waiver by Lender of any covenant or provision of the Loan Documents,

this Agreement, or of any other contract or instrument between Forbearance Parties, Lender, and Lender’s failure at any time or

times hereafter to require strict performance by Forbearance Parties of any provision thereof shall not waive, affect or diminish any

right of Lender to thereafter demand strict compliance therewith. Lender hereby reserves all rights granted under the Loan Documents,

this Agreement and any other contract or instrument between any Forbearance Party and Lender. THIS AGREEMENT (AND THE TERMINATION

OR EXPIRATION THEREOF) IS NOT TO BE CONSTRUED AS A CURE, WAIVER, OR FORGIVENESS OF ANY SPECIFIED DEFAULT.

ARTICLE

RATIFICATIONS,

REPRESENTATIONS AND WARRANTIES

Section

6.1 Ratification of Loan Documents and Liens. Except as expressly modified and superseded by this Agreement, the terms and

provisions of the Loan Documents are ratified and confirmed and shall continue in full force and effect. Each Forbearance Party and Lender

agrees that the Loan Documents shall continue to be legal, valid, binding, and enforceable in accordance with their respective terms.

Each Forbearance Party further expressly acknowledges and agrees that Lender has a valid, non-avoidable, enforceable, and perfected security

interest in and lien against each item of Collateral described in the Loan Documents (and in furtherance thereof, each Forbearance Party

hereby grants as of the Forbearance Effective Date to the Lender a security interest in and Lien against each Forbearance Party’s

now or hereafter acquired accounts, chattel paper, commercial tort claims, deposit accounts, documents, equipment, fixtures, general

intangibles, goods, health-care-insurance receivables, instruments, inventory, investment property, letter-of-credit rights, money, supporting

obligations, each other item of Collateral (or category thereof) described in any of the Loan Documents, and all accessions to, substitutions

for, replacements, products, and cash and non-cash proceeds of, the foregoing, provided, however, that nothing in this Section

shall grant a Lien or security interest upon any assets that constitute Excluded Property (as such term is defined in the U.S. Security

Agreement)) and that such security interest and lien secures the payment Obligations and the performance of all other obligations of

a Borrower under the Loan Documents.

Section

6.2 General Representations and Warranties. Each Forbearance Party hereby jointly and severally represents and warrants to

Lender that as of the Forbearance Effective Date (a) the execution, delivery and performance of this Agreement and any and all Loan Documents

executed and/or delivered in connection herewith have been duly authorized by all requisite organizational action on the part of such

Forbearance Party and does not violate the constituent organizational documents of such Forbearance Party, contravene any contractual

restriction, any law, rule or regulation or court or administrative decree or order binding on or affecting such Forbearance Party or

result in, or require the creation or imposition of, any Lien, security interest or encumbrance on any of the properties of such Forbearance

Party; (b) this Agreement and any and all other Loan Documents executed and/or delivered in connection herewith have been duly executed

and delivered by each Forbearance Party and are the legal, valid and binding obligation of each Forbearance Party, enforceable in accordance

with their respective terms; (c) subject to the existence of each Specified Default, the representations and warranties contained in

the Credit Agreement and any Loan Document are true and correct on and as of the Forbearance Effective Date and on and as of the date

hereof, as though made on and as of each such date; (d) except for each Specified Default, no Default or Event of Default under the Credit

Agreement has occurred and is continuing; (e) except for each Specified Default, no Event of Default has occurred and is continuing under

the Credit Agreement and other Loan Documents; (f) no Forbearance Party has amended its constituent organizational documents after the

Closing Date; (g) each Known Existing Default has occurred and is continuing; (h) Lender has no obligation to make additional loans or

to extend any other financial accommodations to or for the benefit of any Forbearance Party; (i) absent the effectiveness of this Agreement

and subject to applicable law, Lender is entitled to exercise immediately its rights and remedies under the Loan Documents, including,

but not limited to, the right to accelerate the maturity of the Obligations and to the repossession and sale of the Collateral; and (j)

the recitals in this Agreement are true and correct in all respects.

Section

6.3 Full Opportunity for Review; No Undue Influence. Each Forbearance Party has reviewed this Agreement and acknowledges and

agrees that it (a) understands fully the terms of this Agreement and the consequences of the issuance hereof, (b) has been afforded an

opportunity to have this Agreement reviewed by, and to discuss this Agreement with, such attorneys and other Persons as it may wish,

and (c) has entered into this Agreement of its own free will and accord and without threat or duress. This Agreement and all information

furnished to Lender is made and furnished in good faith, for value and valuable consideration. This Agreement has not been made or induced

by any fraud, duress or undue influence exercised by Lender, any Lender, or any other Person.

Section

6.4 Outstanding Obligations. Each Forbearance Party hereby acknowledges, ratifies and confirms that (a) as of March 25, 2026,

the outstanding Obligations under the Credit Agreement are no less than $16,116,215.30, plus accrued and unpaid interest, fees and other

costs and expenses payable under the Credit Agreement and the other Loan Documents, (b) the obligation to repay such amounts is absolute

and unconditional, and (c) there exists no right of set off, recoupment, counterclaim or defense of any nature whatsoever to the payment

of such amounts.

Section

6.5 Ratification of Guaranties. Each Guarantor hereby acknowledges and consents to all of the terms and conditions of this

Agreement and the other Loan Documents and hereby ratifies, confirms and agrees each guaranty to which it is a party to or for the benefit

of Lender. Each Guarantor hereby represents and acknowledges that it has no claims, counterclaims, offsets, credits or defenses to the

Loan Documents or the performance of its obligations thereunder. Furthermore, each Guarantor agrees that nothing contained in this Agreement

or the Loan Documents shall adversely affect any right or remedy of the Lender under any guaranty to which such Guarantor is a party.

Each Guarantor hereby represents and acknowledges that the execution and delivery of this Agreement and any other Loan Documents executed

in connection herewith shall in no way change or modify its obligations as a guarantor, debtor, pledgor, assignor, obligor and/or grantor

under its respective guaranty and shall not constitute a waiver by Lender of any of Lender’s rights against such Guarantor or any

other guarantor.

ARTICLE

ADDITIONAL

COVENANTS AND AGREEMENTS

Section

7.1 Additional Covenants of Forbearance Parties. The Forbearance Parties also agree to comply with the following:

(a)

Weekly Cash Forecasts. The Forbearance Parties shall provide Lender, no later than Tuesday of each week, an updated, prospective

13 week cash Budget with a detailed explanation of any variances in such cash Budget from the cash Budget delivered for the immediately

preceding week, in form and scope reasonably acceptable to Lender.

(b)

Payments During Forbearance Period. The Forbearance Parties shall make all required payments to Lender under the Credit Agreement

and Loan Documents at the regularly scheduled dates and times provided therein.

(c)

Payment of Lender’s Expenses. Forbearance Parties shall pay on demand, all reasonable fees and expenses incurred by Lender

in connection with this Agreement, the other Loan Documents, and the credit facilities relating thereto, including, but not limited to,

fees and expenses of Holland & Knight LLP.

(d)

No New Indebtedness and No Defaults on Material Indebtedness. During the Forbearance Period, no new Indebtedness shall be created,

incurred, assumed, or permitted to exist by any Forbearance Party or any of its Subsidiaries, other than (i) Indebtedness in the form

of unsecured, subordinated notes whose issuance will qualify for treatment as Known Expected Defaults under Section 2.2(b) of

this Agreement or (ii) Indebtedness authorized by Lender in writing at its sole option.

(e)

Continued Retention of Company Advisor. During the Forbearance Period, the Forbearance Parties shall continue the retention of

the Company Advisor until the Proposed CRO is appointed as the Chief Restructuring Officer of each Forbearance Party, in accordance with

Section 7.1(g) and Schedule 7.3, then at which time after the installation of the Proposed CRO as the Chief Restructuring

Officer of each Forbearance Party, the engagement by the Forbearance Parties of the Company Advisor may be terminated by the Forbearance

Parties.

(f)

No Payments in Respect of Unsecured Notes. During the Forbearance Period, the Forbearance Parties shall not make any further payments

(whether in respect of principal, interest, or otherwise) in respect of any of the Blocked Notes.

(g)

CRO Retention; No Termination or Modification of CRO’s Engagement or Scope. On or before the deadline set forth on Schedule

7.3, the Forbearance Parties shall have taken all corporate governance steps, and obtained all board, shareholder, and other approvals,

needed to retain and install the Proposed CRO as the Chief Restructuring Officer for each of the Forbearance Parties. Such retention

shall ensure that the Proposed CRO (as Chief Restructuring Officer) will be an executive officer of each of the Forbearance Parties,

with general authority to take any and all actions for and on behalf of each Forbearance Party, including, without limitation, approving

budgets, approving other operational strategies or matters, negotiating, documenting, and consummating any new financings, refinancings,

debt issuances, and equity issuances, or any other transaction contemplated in the capital plan delivered in accordance with the milestone

on Schedule 7.3. As Chief Restructuring Officer, the Proposed CRO will have powers at least as broad as the chief executive officer

of each Forbearance Party (with such chief executive officer presently being Reza Soltanzadeh). To the extent that any action of the

Forbearance Parties’ chief executive officer would require further approval from the board of directors under the terms of the

Forbearance Parties’ organizational documents (i.e. the charter and bylaws) as in effect immediately prior to the date hereof,

or require approval of the Forbearance Parties’ shareholders under applicable law, any such action sought to be taken by Chief

Restructuring Officer will also require such approval from the board of directors or shareholders (as applicable) with respect to such

requested action requiring further board of director or shareholder approval. In the event that any decision, order, or proposed action

ordered to be undertaken by the Chief Restructuring Officer shall conflict with any decision, action, or order rendered by any other

officer of any Forbearance Party, the decision, directive, or order rendered by the Chief Restructuring Officer shall control (and be

deemed to have overruled any contrary direction or order provided by any other officer of any Forbearance Party). In the event that (A)

any instruction or direction by the Chief Restructuring Officer is overruled (or purported to be overruled) by any officer, director,

board of directors, or shareholder of any Forbearance Party, (B) any Forbearance Party fails to take any action (or refrain from taking

any action) as directed by the Chief Restructuring Officer, or (C) the board of directors or shareholders fail to approve any action

recommended by the Chief Restructuring Officer (and supported by the Lender) that requires board of director approval or shareholder

approval, any such event in (A) – (C) shall constitute an immediate Forbearance Default.

Section

7.2 Additional Forbearance Reporting Matters.

(a)

In addition to and not in limitation of any provision of the Credit Agreement, Forbearance Parties shall provide and shall cause their

Affiliates, the Company Advisor, and the Chief Restructuring Officer to provide Lender and Lender’s employees, representatives,

appraisers, auditors and advisors reasonable access to the Forbearance Parties’ books, records, and other information as shall

be required by Lender, and to make available, without restriction, Forbearance Parties’ and such Affiliates’ officers, employees,

accountants, appraisers, auditors, advisors, appraisers, and agents (including the Company Advisor and Chief Restructuring Officer) for

discussions with Lender, Lender’s employees, representatives, appraisers, auditors and advisors. The Forbearance Parties shall,

no more than 24 hours after any request by the Lender or its advisors for any books, records, or other information or access requested

by the Lender or its advisors, provide all such books, records, and other information or access requested by the Lender or its advisors

concerning the Forbearance Parties.

(b)

The Chief Restructuring Officer shall hold a weekly status call with the Lender and its advisors, scheduled for a day and time each week

during normal business hours to be mutually agreed upon among the Chief Restructuring Officer and Lender, to discuss the Forbearance

Parties’ restructuring efforts, operational matters, and strategies for satisfying their obligations to the Lender. Consistent

with Section 7.2(a) above, the Chief Restructuring Officer shall also meet with the Lender, and provide access to other information concerning

the Forbearance Parties, upon the request of the Lender, at times other than the scheduled weekly status call.

(c)

The Forbearance Parties shall provide the Lender with any other documentation requested by Lender and its advisors regarding any proposed

cash receipts and disbursements during the Forbearance Period, including, without limitation, detail regarding projected cash disbursements

for a particular week and detail supporting the actual disbursements made during any week of determination.

Section

7.3 Compliance With Forbearance Milestones. The Forbearance Parties shall ensure that each of the forbearance milestones set

forth on Schedule 7.3 of this Agreement shall be satisfied on or before the correlative deadline for such milestone set forth

on Schedule 7.3

Section

7.4 Reserve Administration Matters. The Forbearance Parties acknowledge and agree that as of the date of this Agreement, the

Lender has validly imposed a $600,000 general Reserve. During the Forbearance Period, the Lender agrees to refrain from imposing further,

general Reserves solely as a result of any Specified Default; provided, however, that the Lender shall retain full discretion and authority

to impose any further Reserves as a result of the occurrence of any Event of Default (other than any Specified Default) or any other

matter not known to the Lender on the date of this Agreement concerning the Borrowing Base or Collateral.

Section

7.5 Subordination of Intercompany Indebtedness.

(a)

Each Forbearance Party hereby agrees that any indebtedness of any other Forbearance Party now or hereafter owing to such Forbearance

Party, whether heretofore, now or hereafter created (the “Forbearance Party Subordinated Debt”), is hereby subordinated

to the payment in full, in cash of the Obligations and that the Forbearance Party Subordinated Debt shall not be paid in whole or in

part until the Obligations shall have been paid in full, in cash and the Loan Documents are terminated and of no further force or effect.

No Forbearance Party shall accept any payment of or on account of any Forbearance Party Subordinated Debt at any time in contravention

of the foregoing. Each payment on the Forbearance Party Subordinated Debt received in violation of any of the provisions hereof shall

be deemed to have been received by such Forbearance Party as trustee for the Lender and shall be paid over to the Lender immediately

on account of the Obligations, but without otherwise affecting in any manner such Forbearance Party’s liability hereunder.

(b)

Each Forbearance Party hereby expressly and irrevocably subordinates to the prior payment in full, in cash, of the Obligations any and

all rights pursuant to any laws or in equity to subrogation, reimbursement, exoneration, contribution, indemnification or set off and

any and all defenses (other than full payment, in immediately available cash funds, of the Obligations and other than no performance

is at a particular time due) available to a surety, guarantor or accommodation co-obligor until the Obligations have been paid in full,

in cash, but in no event may any Forbearance Party exercise any of the foregoing (even after such payment in full) in respect of any

assets acquired (or in the case where the equity interests of a Person are acquired, such Equity Interests and the assets of such Person

and its subsidiaries) by Lender or any foreclosure purchaser on account of the Obligations or any foreclosure upon all or any portion

of the collateral securing the Obligations.

ARTICLE

CREDIT

AGREEMENT AMENDMENTS

Section

8.1 Amendments to Credit Agreement. On the effective date of this Agreement, each of the Forbearance Parties and Lender agree

to the following amendments to the Credit Agreement. Such amendments are conditioned upon the occurrence of the effectiveness of this

Agreement and shall not take effect until the effectiveness of this Agreement:

(a)

The definition of “Applicable Margin” within Section 1.1 of the Credit Agreement shall be amended and restated as follows:

“Applicable

Margin” means, as of any date of determination, (a) with respect to Revolving Loans which bear interest based on the Prime

Rate, 6.50% per annum, (b) with respect to the Term Loan which bears interest based on the Prime Rate, 6.75% per annum, (c) with respect

to Revolving Loans which bear interest based on the Base Rate, 6.50% per annum, and (d) with respect to the Term Loan which bears interest

based on the Base Rate, 6.75% per annum.

(b)

Section 12 of Schedule 5.1 of the Credit Agreement is amended to add the following clause 12(e) immediately after clause 12(d):

(e)

within one (1) Business Day after the same become publicly available, copies of all annual reports, quarterly reports, periodic and other

reports, proxy statements and other materials filed by any Loan Party or any Subsidiary with the U.S. Securities and Exchange Commission,

or any Governmental Authority succeeding to any or all of the functions of the U.S. Securities and Exchange Commission, or with any national

securities exchange.

ARTICLE

[RESERVED]

Section

9.1 [Reserved].

ARTICLE

MISCELLANEOUS PROVISIONS

Section

10.1 Survival of Representations and Warranties. All representations and warranties made in any Loan Document, including, without

limitation, any document furnished in connection with this Agreement, shall survive the execution and delivery of this Agreement and

the Loan Documents, and no investigation by Lender or any closing shall affect the representations and warranties or the right of Lender

to rely upon them.

Section

10.2 Limitation on Relationship between Parties. The relationship of Lender, on the one hand, and the Forbearance Parties,

on the other hand, has been and shall continue to be, at all times, that of creditor and debtor. Nothing contained in this Agreement,

any instrument, document, or agreement delivered in connection therewith or in the Loan Documents shall be deemed or construed to create

a fiduciary relationship between the parties.

Section

10.3 Expenses of Lender. The Forbearance Parties agree, jointly and severally, to pay on demand all reasonable costs and out-of-pocket

expenses incurred by Lender in connection with the preparation, negotiation, execution and enforcement of this Agreement and the Loan

Documents and any and all amendments, modifications, and supplements thereto, including, without limitation, the costs and fees of Lender’s

legal counsel and all costs and expenses incurred by Lender in connection with the enforcement or preservation of any rights under any

Loan Document, including, without limitation, the costs and fees of Lender’s legal counsel and the fees, costs and expenses incurred

by Lender in the employment of auditors and/or consultants to perform work on Lender’s behalf to audit, appraise, monitor and otherwise

review any and all portions of the Collateral. Any such costs may, at the sole option of Lender, be charged and added to the outstanding

Obligations under the Credit Agreement.

Section

10.4 Severability. Any provision of this Agreement held by a court of competent jurisdiction to be invalid or unenforceable

shall not impair or invalidate the remainder of this Agreement and the effect thereof shall be confined to the provision so held to be

invalid or unenforceable.

Section

10.5 Successors and Assigns; Third Party Beneficiaries. This Agreement shall be binding upon and inure to the benefit of the

parties hereto and their respective successors and assigns, except that no Forbearance Party may assign or transfer any of its rights

or obligations under this Agreement without the prior written consent of Lender, and no other Person shall have any right, benefit or

interest under or because of the existence of this Agreement, except that (a) upon its effectiveness in accordance with Article 4,

this Agreement shall be binding on Lender, and (b) the provisions of Section 10.11 of this Agreement shall inure to the benefit

of the Released Parties.

Section

10.6 Amendments; Interpretation. No amendment or modification of any provision of this Agreement shall be effective without

the written agreement of each Forbearance Party and Lender, and no waiver of any provision of this Agreement or consent to any departure

by any Forbearance Party therefrom, shall in any event be effective without the written concurrence of Lender. Any waiver or consent

shall be effective only in the specific instance and for the specific purpose for which it was given. No notice to or demand upon any

Forbearance Party in any case shall entitle any Forbearance Party to any other or further notice or demand in similar or other circumstances.

No prior drafts of this Agreement or any negotiations regarding the terms contained in those drafts shall be admissible in any court

to vary or interpret the terms of this Agreement. In the event of any inconsistency between the terms of this Agreement and any Loan

Document, this Agreement shall govern and control. The parties hereto have had the opportunity to be represented by counsel in their

negotiations of the terms of this Agreement, and therefore, no provision of this Agreement shall be construed against any party hereto

on the theory that such party drafted such provision.

Section

10.7 Counterparts. This Agreement may be executed by one or more of the parties hereto in any number of separate counterparts,

each of which when so executed shall be deemed to be an original, but all of which when taken together shall constitute one and the same

instrument, and all signature pages transmitted by electronic transmission shall be considered as original executed counterparts. It

shall not be necessary in making proof of this Agreement to produce or account for more than a single counterpart containing the respective

signatures of, or on behalf of, each of the parties hereto. Each party to this Agreement agrees that it will be bound by its own facsimile

or electronic signature and that it accepts the facsimile or electronic signatures of each other party.

Section

10.8 Headings. The headings, captions, and arrangements used in this Agreement are for convenience only and shall not affect

the interpretation of this Agreement.

Section

10.9 Further Assurances. Each Forbearance Party agrees to execute such other and further documents and instruments as Lender

may request to implement the provisions of this Agreement and to perfect and protect the Liens and security interests created by the

Credit Agreement and the other Loan Documents.

Section

10.10 Applicable Law. THIS AGREEMENT AND ALL OTHER LOAN DOCUMENTS EXECUTED PURSUANT TO THIS AGREEMENT SHALL BE GOVERNED AND

CONSTRUED IN ACCORDANCE WITH THE LAWS CHOSEN TO GOVERN THE CREDIT AGREEMENT.

Section

10.11 Release. EACH FORBEARANCE PARTY HEREBY ACKNOWLEDGES THAT IT HAS NO DEFENSE, RECOUPMENT, COUNTERCLAIM, OFFSET, CROSS-COMPLAINT,

CLAIM OR DEMAND OF ANY KIND OR NATURE WHATSOEVER THAT CAN BE ASSERTED TO REDUCE OR ELIMINATE ALL, OR ANY PART OF, ITS LIABILITY TO REPAY

THE OBLIGATIONS ARISING UNDER THE CREDIT AGREEMENT OR ANY OTHER LOAN DOCUMENT OR TO SEEK AFFIRMATIVE RELIEF OR DAMAGES OF ANY KIND OR

NATURE FROM LENDER OR ANY OF LENDER’S AFFILIATES. EACH FORBEARANCE PARTY HEREBY VOLUNTARILY AND KNOWINGLY RELEASES AND FOREVER

DISCHARGES LENDER, AND LENDER’S PREDECESSORS, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ATTORNEYS, ACCOUNTANTS, CONSULTANTS, REPRESENTATIVES,

OWNERS, AFFILIATES, SUCCESSORS, TRANSFEREES AND ASSIGNS (COLLECTIVELY, THE “RELEASED PARTIES”), FROM ALL POSSIBLE

CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS, EXPENSES, AND LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN, ANTICIPATED OR UNANTICIPATED,

SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT, OR CONDITIONAL, AT LAW OR IN EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE DATE

THIS AGREEMENT IS EXECUTED, WHICH SUCH FORBEARANCE PARTY MAY NOW OR HEREAFTER HAVE AGAINST ANY RELEASED PARTY, IF ANY, AND IRRESPECTIVE

OF WHETHER ANY SUCH CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR OTHERWISE, INCLUDING, WITHOUT LIMITATION,

ANY CONTRACTING FOR, CHARGING, TAKING, RESERVING, COLLECTING OR RECEIVING INTEREST IN EXCESS OF THE HIGHEST LAWFUL RATE APPLICABLE, THE

EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE CREDIT AGREEMENT OR OTHER LOAN DOCUMENTS, AND/OR NEGOTIATION OF, OR EXECUTION OF, THIS

AGREEMENT. IT IS AGREED THAT THE SCOPE OF THIS RELEASE UNDER THIS PARAGRAPH SHALL INCLUDE ALL CLAIMS, DEMANDS OR CAUSES OF ACTION

ARISING IN WHOLE OR PART FROM THE NEGLIGENCE OR STRICT LIABILITY OF LENDER OR ANY OTHER RELEASED PARTY. EACH FORBEARANCE PARTY HEREBY

COVENANTS AND AGREES NEVER TO INSTITUTE ANY ACTION OR SUIT AT LAW OR IN EQUITY, NOR INSTITUTE, PROSECUTE, OR IN ANY WAY AID IN THE INSTITUTION

OR PROSECUTION OF, ANY CLAIM, ACTION OR CAUSE OF ACTION, RIGHTS TO RECOVER DEBTS OR DEMANDS OF ANY NATURE AGAINST ANY OF THE RELEASED

PARTIES ARISING OUT OF OR RELATED TO A RELEASED PARTY’S ACTIONS, OMISSIONS, STATEMENTS, REQUESTS OR DEMANDS IN ADMINISTERING, ENFORCING,

MONITORING, COLLECTING OR ATTEMPTING TO COLLECT, THE OBLIGATIONS, INDEBTEDNESS AND OTHER OBLIGATIONS OF A FORBEARANCE PARTY TO A RELEASED

PARTY. EACH FORBEARANCE PARTY AGREES TO INDEMNIFY AND HOLD EACH RELEASED PARTY HARMLESS FROM ANY AND ALL MATTERS RELEASED PURSUANT TO

THIS PARAGRAPH. EACH FORBEARANCE PARTY ACKNOWLEDGES THAT THE AGREEMENTS IN THIS PARAGRAPH ARE INTENDED TO BE IN FULL SATISFACTION OF

ALL OR ANY ALLEGED INJURIES OR DAMAGES TO SUCH FORBEARANCE PARTY, ITS SUCCESSORS, AGENTS, ATTORNEYS, OFFICERS, DIRECTORS, ASSIGNS AND

PERSONAL AND LEGAL REPRESENTATIVES ARISING IN CONNECTION WITH SUCH MATTERS RELEASED PURSUANT TO THE OTHER PROVISIONS OF THIS PARAGRAPH.

EACH FORBEARANCE PARTY REPRESENTS AND WARRANTS TO LENDER THAT IT HAS NOT PURPORTED TO TRANSFER, ASSIGN OR OTHERWISE CONVEY ANY RIGHT,

TITLE, OR INTEREST OF A FORBEARANCE PARTY IN ANY RELEASED MATTER TO ANY OTHER PERSON AND THAT THE FOREGOING CONSTITUTES A FULL AND COMPLETE

RELEASE OF EACH FORBEARANCE PARTY’S CLAIMS WITH RESPECT TO ALL SUCH MATTERS. THE PROVISIONS OF THIS SECTION 10.11 AND THE

REPRESENTATIONS, WARRANTIES, RELEASES, WAIVERS, ACQUITTANCES, DISCHARGES, COVENANTS, AGREEMENTS AND INDEMNIFICATIONS CONTAINED HEREIN

(A) CONSTITUTE A MATERIAL CONSIDERATION FOR AND INDUCEMENT TO LENDER ENTERING INTO THIS AGREEMENT, (B) DO NOT CONSTITUTE AN ADMISSION

OF OR BASIS FOR ESTABLISHING ANY DUTY, OBLIGATION OR LIABILITY OF LENDER TO A FORBEARANCE PARTY OR ANY OTHER PERSON, (C) DO NOT CONSTITUTE

AN ADMISSION OF OR BASIS FOR ESTABLISHING ANY LIABILITY, WRONGDOING; OR VIOLATION OF ANY OBLIGATION, DUTY OR AGREEMENT OF LENDER TO A

FORBEARANCE PARTY OR ANY OTHER PERSON, AND (D) SHALL NOT BE USED AS EVIDENCE AGAINST ANY RELEASED PARTY BY A FORBEARANCE PARTY OR ANY

OTHER PERSON FOR ANY PURPOSE.

Section

10.12 Waiver of Jury Trial Right and Other Matters. EACH OF THE FORBEARANCE PARTIES HEREBY WAIVES (i) ALL RIGHT TO TRIAL BY

JURY IN ANY ACTION, SUIT, OR PROCEEDING ARISING OUT OF, IN CONNECTION WITH OR RELATING TO, THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND

ANY OTHER TRANSACTION CONTEMPLATED HEREBY AND THEREBY, WHICH WAIVER APPLIES TO ANY ACTION, SUIT OR PROCEEDING WHETHER SOUNDING IN TORT,

CONTRACT OR OTHERWISE; (ii) PRESENTMENT, DEMAND AND PROTEST, AND NOTICE OF PRESENTMENT, PROTEST, DEFAULT, NONPAYMENT, NOTICE OF INTENT

TO ACCELERATE, NOTICE OF ACCELERATION, MATURITY, RELEASE WITH RESPECT TO ALL OR ANY PART OF THE OBLIGATIONS OR ANY COMMERCIAL PAPER,

ACCOUNTS, CONTRACT RIGHTS, DOCUMENTS, INSTRUMENTS, CHATTEL PAPER AND GUARANTIES AT ANY TIME HELD BY LENDER ON WHICH ANY FORBEARANCE PARTY

MAY IN ANY WAY BE LIABLE AND HEREBY RATIFIES AND CONFIRMS WHATEVER LENDER MAY DO IN THIS REGARD; (iii) NOTICE PRIOR TO TAKING POSSESSION

OR CONTROL OF THE COLLATERAL OR ANY BOND OR SECURITY THAT MIGHT BE REQUIRED BY ANY COURT PRIOR TO ALLOWING LENDER TO EXERCISE ANY OF

ITS RESPECTIVE RIGHTS AND REMEDIES; (iv) THE BENEFIT OF ALL VALUATION, APPRAISEMENT AND EXEMPTION LAWS AND ALL RIGHTS WAIVABLE UNDER

ARTICLE 9 OF THE UCC; (v) ANY RIGHT ANY FORBEARANCE PARTY MAY HAVE UPON PAYMENT IN FULL OF THE OBLIGATIONS TO REQUIRE LENDER TO TERMINATE

ITS SECURITY INTEREST IN THE COLLATERAL OR IN ANY OTHER PROPERTY OF ANY FORBEARANCE PARTY UNTIL TERMINATION OF THE CREDIT AGREEMENT IN

ACCORDANCE WITH ITS TERMS AND THE EXECUTION BY THE FORBEARANCE PARTIES, AND BY ANY PERSON WHO PROVIDES FUNDS THAT ARE USED IN WHOLE OR

IN PART TO SATISFY THE OBLIGATIONS, OF AN AGREEMENT RELEASING ALL CLAIMS AGAINST LENDER AND INDEMNIFYING LENDER FROM ANY LOSS OR DAMAGE

ANY SUCH PARTY MAY INCUR AS THE RESULT OF DISHONORED CHECKS OR OTHER ITEMS OF PAYMENT RECEIVED BY LENDER FROM ANY FORBEARANCE PARTY,

OR ANY ACCOUNT DEBTOR AND APPLIED TO THE OBLIGATIONS AND RELEASING AND INDEMNIFYING, IN THE SAME MANNER AS DESCRIBED IN SECTION 10.11

OF THIS AGREEMENT, THE RELEASEES FROM ALL CLAIMS ARISING ON OR BEFORE THE DATE OF SUCH TERMINATION STATEMENT; AND (vi) NOTICE OF ACCEPTANCE

HEREOF, AND THE FORBEARANCE PARTIES EACH ACKNOWLEDGE THAT THE FOREGOING WAIVERS ARE A MATERIAL INDUCEMENT TO LENDER’S ENTERING

INTO THIS AGREEMENT AND THAT SUCH PARTIES ARE RELYING UPON THE FOREGOING WAIVERS IN THEIR FUTURE DEALINGS WITH BORROWER AND THE OTHER

FORBEARANCE PARTIES. EACH OF THE FORBEARANCE PARTIES WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THE FOREGOING WAIVERS WITH ITS LEGAL

COUNSEL AND HAS KNOWINGLY AND VOLUNTARILY WAIVED ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION,

THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

Section

10.13 Waiver of Service. EACH FORBEARANCE PARTY HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREES THAT ALL

SUCH SERVICE OF PROCESS MAY BE MADE UPON SUCH FORBEARANCE PARTY BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED

TO SUCH FORBEARANCE PARTY, AT THE ADDRESS SET FORTH IN THE CREDIT AGREEMENT OR, IF APPLICABLE, RELEVANT OTHER LOAN DOCUMENT, AND SERVICE

SO MADE SHALL BE COMPLETE TEN (10) CALENDAR DAYS AFTER THE SAME HAS BEEN POSTED. IN ANY LITIGATION, TRIAL, ARBITRATION OR OTHER DISPUTE

RESOLUTION PROCEEDING RELATING TO THIS AGREEMENT OR ANY OF THE LOAN DOCUMENTS, ALL DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS OF THE RELEVANT

FORBEARANCE PARTY OR ANY OF ITS AFFILIATES SHALL BE DEEMED TO BE EMPLOYEES OR MANAGING AGENTS OF SUCH FORBEARANCE PARTY FOR PURPOSES

OF ALL APPLICABLE LAW OR COURT RULES REGARDING THE PRODUCTION OF WITNESSES BY NOTICE FOR TESTIMONY (WHETHER IN A DEPOSITION, AT TRIAL

OR OTHERWISE). LENDER’S COUNSEL IN ANY SUCH DISPUTE RESOLUTION PROCEEDING MAY EXAMINE ANY OF THESE INDIVIDUALS AS IF UNDER CROSS-EXAMINATION

AND ANY DISCOVERY DEPOSITION OF ANY OF THEM MAY BE USED IN THAT PROCEEDING AS IF IT WERE AN EVIDENCE DEPOSITION. EACH FORBEARANCE PARTY

IN ANY EVENT WILL USE ALL COMMERCIALLY REASONABLE EFFORTS TO PRODUCE IN ANY SUCH DISPUTE RESOLUTION PROCEEDING, AT THE TIME AND IN THE

MANNER REQUESTED BY LENDER, ALL PERSONS, DOCUMENTS (WHETHER IN TANGIBLE, ELECTRONIC OR OTHER FORM) OR OTHER THINGS UNDER THEIR CONTROL

AND RELATING TO THE DISPUTE. NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT OF LENDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED

BY APPLICABLE LAW.

Section

10.14 Submission to Jurisdiction. EACH FORBEARANCE PARTY AGREES THAT ALL DISPUTES AMONG THEM AND LENDER ARISING OUT OF, CONNECTED

WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN THIS AGREEMENT, WHETHER ARISING IN CONTRACT, TORT, EQUITY,

OR OTHERWISE, SHALL BE RESOLVED ONLY BY THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY, NEW YORK OR THE UNITED STATES

DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND THE APPELLATE COURT FROM ANY THEREOF. EACH FORBEARANCE PARTY WAIVES IN ALL

DISPUTES ANY OBJECTION THAT ANY OF THEM MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE WHICH COURT SHALL HAVE BEEN CHOSEN

IN ACCORDANCE WITH THE FOREGOING. NOTHING HEREIN SHALL AFFECT ANY RIGHT THAT LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING

RELATING TO ANY LOAN DOCUMENT AGAINST ANY FORBEARANCE PARTY OR ITS PROPERTY IN THE COURTS OF ANY JURISDICTION.

Section

10.15 Final Agreement. THIS AGREEMENT, TOGETHER WITH THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS, CONSTITUTES THE ENTIRE

AGREEMENT AND UNDERSTANDING OF THE PARTIES RELATING TO THE SUBJECT MATTER HEREOF ON THE DATE THIS AGREEMENT IS EXECUTED, AND SUPERSEDES

ALL PRIOR PROPOSALS, NEGOTIATIONS, AGREEMENTS AND UNDERSTANDINGS RELATING TO SUCH SUBJECT MATTER. IN ENTERING INTO THIS AGREEMENT, THE

FORBEARANCE PARTIES EACH ACKNOWLEDGE THAT THEY ARE RELYING ON NO STATEMENT, REPRESENTATION, WARRANTY, COVENANT OR AGREEMENT OF ANY KIND

MADE BY LENDER OR ANY OF ITS EMPLOYEES OR AGENTS EXCEPT FOR THE AGREEMENTS OF LENDER SET FORTH HEREIN. THIS AGREEMENT, TOGETHER WITH

THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS, REPRESENTS THE FINAL AGREEMENT AMONG THE PARTIES HERETO AND MAY NOT BE CONTRADICTED

BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE

PARTIES.

Section

10.16 No Waiver; Strict Performance. Each Forbearance Party hereby acknowledges and agrees that (a) no failure or delay by

Lender in exercising any right, power or remedy under this Agreement or under any of the Loan Documents shall operate as a waiver thereof,

(b) no failure or delay by Lender to insist upon the strict performance by such Forbearance Party of any term, condition, covenant or

agreement or to exercise any right, power or remedy as a result of the breach thereof shall constitute a waiver of any such term, condition,

covenant or agreement or of any breach thereof or preclude Lender from insisting on the strict performance thereof, and (c) no single

or partial exercise of any right, power or remedy of Lender shall preclude further exercise of any right, power or remedy.

Section

10.17 Confidentiality. The parties hereto expressly stipulate and agree that both the content and existence of statements and

communications among the parties created during the Forbearance Period shall remain protected and no part of any oral or written communication

from Lender or any Lender during such negotiations shall be admissible or subject to discovery in any case or proceeding, including,

without limitation, proof of admissions of liability. The foregoing prohibition is intended to be broader than the restrictions on admissibility

contained in Rule 408 of the Federal Rules of Evidence and analogous state law rules or doctrines. Notwithstanding the foregoing, (a)

this paragraph shall not pertain to information which, in the absence of this Agreement, would be available for inspection or review

by the Lender pursuant to the Loan Documents; and (b) this Agreement itself (without regard to any other evidence of conduct or communications

or any nature whatsoever) shall be admissible in a judicial, dispute resolution or similar proceeding involving one or more of the parties

hereto.

Section

10.18 Time is of Essence. Time is of the essence of each and every covenant, condition and provision of this Agreement to

be performed by a Forbearance Party.

[REMAINDER

OF PAGE INTENTIONALLY BLANK. SIGNATURE PAGES FOLLOW]

WITNESS WHEREOF, this Agreement has been executed on the date first above written, to be effective upon satisfaction of the conditions

set forth in this Agreement

FRONTWELL CAPITAL PARTNERS INC.,

as Lender

/s/ John Ho

Name:

John Ho

Title:

Chief Financial Officer

Signature

Page to Forbearance Agreement (Mar 2026)

PALMETTO GOURMET FOODS, INC.,

as Borrower and Guarantor

By:

/s/ Reza Soltanzadeh

Name:

Reza Soltanzadeh

Title:

President & CEO

Signature

Page to Forbearance Agreement (Mar 2026)

PGF REAL ESTATE I, INC.,

as Borrower and Guarantor

By:

/s/ Reza Soltanzadeh

Name:

Reza Soltanzadeh

Title:

President & CEO

Signature

Page to Forbearance Agreement (Mar 2026)

PGF REAL ESTATE II, INC.,

as Borrower and Guarantor

By:

/s/ Reza Soltanzadeh

Name:

Reza Soltanzadeh

Title:

President & CEO

Signature

Page to Forbearance Agreement (Mar 2026)

BOREALIS FOODS INC.,

as Guarantor

By:

/s/ Reza Soltanzadeh

Name:

Reza Soltanzadeh

Title:

President & CEO

Signature

Page to Forbearance Agreement (Mar 2026)

BOREALIS IP INC.,

as Guarantor

By:

/s/ Reza Soltanzadeh

Name:

Reza Soltanzadeh

Title:

President & CEO

Signature

Page to Forbearance Agreement (Mar 2026)

PALMETTO GOURMET FOODS (CANADA) INC.,

as Guarantor

By:

/s/ Reza Soltanzadeh

Name:

Reza Soltanzadeh

Title:

President & CEO

Signature

Page to Forbearance Agreement (Mar 2026)

EX-10.2 — ENGAGEMENT LETTER, DATED AS OF MARCH 27, 2026, BY AND BETWEEN BOREALIS FOODS INC., AND VRS RESTRUCTURING SERVICES, LLC

EX-10.2

Filename: ea028482601ex10-2.htm · Sequence: 3

Exhibit 10.2

VRS / BOREALIS

ENGAGEMENT LETTER

March 27, 2026

Borealis Foods, Inc.

1540 Cornwall Rd. #104

Oakville, Ontario, Canada L6J 7W5

Attention: Reza Soltanzadeh, Chief Executive Officer

Dear Reza:

This letter agreement (the “Agreement”)

will confirm that Borealis Foods, Inc. together with its affiliates and subsidiaries (the “Company”), which previously engaged

VRS Restructuring Services, LLC (“VRS”) to act as the Company’s financial advisor pursuant to an engagement letter between

the Company and VRS dated December 4, 2025, shall provide Jeffrey T. Varsalone, Senior Managing Director to serve as the Chief Restructuring

Officer (the “CRO”) for the Company (the “Engagement”).

1) Scope of Services. The CRO shall report to the Company’s Board of Directors and work collaboratively

with senior management and other advisors and counsel to assist the Company in implementing one or more strategic restructuring transactions.

Through the CRO, VRS shall provide restructuring services to the Company including, but not limited to, the following areas:

a) analyzing the business, operations and financial condition of the Company;

b) managing short term liquidity, including developing and managing a 13 week cash flow forecast, variance

reporting, and approval of weekly disbursements;

c) exercising general authority to take any and all actions for and on behalf of the Company, including,

without limitation, approving budgets, approving other operational strategies or matters, negotiating, documenting, and consummating any

new financings, refinancings, debt issuances, and equity issuances, or any other transaction contemplated in the capital plan delivered

in accordance with a forbearance agreement entered into by and between the Company and its senior lender;

d) holding a weekly status call with the Company’s senior lender and its advisors to discuss the the

Company’s restructuring efforts, operational matters, and strategies for satisfying the Company’s obligations to the senior

lender;

e) preparing other financial analyses and determining restructuring strategy;

f) assisting the Company and its counsel in negotiations with various parties-in-interest; and

g) supporting the Company in such matters as the board of directors of the Company shall request or require from time to time.

1) Fees. Fees for the Engagement will be charged on an hourly basis pursuant to the following rate

schedule:

Team

Member Level

Hourly

Rate

Sr. Managing Director / Managing

Director

$725 - $925

Director / Vice President

$525 - $725

Sr. Associate / Associate

$325 - $525

2) Retainer & Invoices. The Company will pay VRS a retainer of $100,000 USD prior to the commencement

of the Engagement. VRS shall bill the Company on a weekly basis and weekly invoices shall be applied against the retainer. If and when

VRS determines that the retainer is insufficient to support continuing services, VRS will request that the retainer be refreshed in an

amount sufficient to support continued services. VRS reserves the right to suspend providing services if VRS and the Company cannot agree

upon an additional retainer sufficient to support continued services.

3) Expense Reimbursement. In addition to paying the Fees, the Company will reimburse VRS for all reasonable

out-of-pocket expenses incurred by in connection with this Agreement including, without limitation, travel, lodging, document preparation,

printing, and Engagement-related legal fees and costs. Expenses shall be itemized and included on the weekly invoices applied against

the retainer.

4) Term. This Agreement shall have an initial term of 45 days (the “Initial Term”) and

thereafter shall continue (such Initial Term and the entire period of continuation is called the “Term”) until terminated,

(a “Termination”), for any reason, by written notice to the other party specifying the date of termination (the “Termination

Date”), which date shall be at least five (5) business days after the giving

of such notice. Sections 6 and 7 of this Agreement shall survive termination of this Agreement.

5) Indemnification. In consideration of, and as a condition precedent to VRS’s undertaking the

Engagement, the Company agrees that in the event that any of VRS, the respective members, directors, managers, partners, officers, contractors,

agents or employees of VRS, or any affiliate of any of the foregoing (each, an “Indemnified Person”) becomes involved in any

action, claim, suit, investigation or proceeding (each, a “Proceeding”), actual or threatened, brought by or against any person,

including stockholders, members or partners of the Company, in connection with the Engagement,

the Company will reimburse such Indemnified Person for any losses, claims, fees (including fees of legal counsel and other professional

advisors), expenses, damages or liabilities related to such Proceeding (collectively, “Losses”) including, without limitation,

Losses incurred in investigating, responding to third party subpoenas, serving as a witness, making an Indemnified Person available to

serve as a witness, or enforcing the Engagement, as such expenses are incurred; provided, however, that if it is finally determined by

a court or arbitral tribunal (each, a “Court”) that any Loss of any Indemnified Person has resulted primarily and directly

from the gross negligence or willful misconduct of VRS in performing the Engagement, VRS will repay the portion of such Loss attributable

thereto.

The Company also agrees that neither

VRS nor any other Indemnified Person shall have any liability to the Company or any person asserting claims on behalf or in right of the

Company in connection with or as a result of the Engagement or any matter referred to in the Engagement, except to the extent that any

Losses incurred by the Company are finally determined by a Court to have resulted primarily and directly from the willful misconduct or

gross negligence of VRS in performing the services that are the subject of the Engagement. In no event shall VRS or any other Indemnified

Person be responsible for any indirect, special or consequential damages, even if advised of the possibility thereof.

The Company’s obligations hereunder

shall be in addition to any rights that any Indemnified Person may have at common law or otherwise.

6) D&O Insurance. At the request of VRS, the Company shall provide VRS with a copy of its current

D&O Insurance policy, a certificate of insurance evidencing it is in full force and effect, and any other documents VRS may reasonably

request evidencing such coverage. The Company shall add any VRS personnel serving as chief restructuring officer, in any other interim

management role or as a director as the case may be, to such D&O Insurance policy and shall maintain D&O coverage for such VRS

personnel for so long as claims may be made against them on account of their role as an officer and / or director of the Company. The

Company disclaims any right to distribution on behalf of such VRS personnel. In the event the Company does not maintain reasonably satisfactory

insurance covering any VRS personnel serving as chief restructuring officer, in any other interim management role or as a director, as

the case may be, at any point during this Engagement, VRS reserves the right to purchase a separate D&O policy that will cover VRS

personnel only, the reasonable cost of which shall be reimbursed to VRS by the Company, invoiced as an out of pocket expense.

7) Miscellaneous.

a) This Agreement shall be binding upon, and inure to the benefit

of, both parties and their respective successors and assigns.

b) This Agreement embodies the entire agreement and understanding

between the parties hereto and supersedes all prior agreements and understandings relating to the subject matter hereof.

c) This Agreement may be executed in counterparts each of which

shall be deemed an original and all of which, taken together, shall comprise one and the same Agreement. This Agreement may be executed

by the delivery of signatures by facsimile or other electronic means.

d) If any term, provision or covenant of the Agreement is held

by a court of competent jurisdiction to be invalid, void or unenforceable or against public policy, the remainder of the terms, provisions

and covenants contained herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

e) This Agreement shall be governed by and interpreted in accordance

with the laws of the State of New York (without regard to its conflicts of law principles). The parties hereby irrevocably consent to

the exclusive jurisdiction of any New York state court or United States federal court sitting in New York over any action or proceeding

arising out of or relating to this Agreement; provided that from and after the commencement of any bankruptcy case, the parties also

irrevocably consent to the exclusive jurisdiction of any court (including the United States Bankruptcy Court) where such bankruptcy case

is pending regarding the interpretation and enforcement of this Agreement. Solely for purposes of enforcing the Company’s obligations

hereunder, the Company consents to personal jurisdiction, service and venue in any court proceeding in which any claim subject to this

Agreement is brought by or against any Indemnified Person. VRS and the Company (on its own behalf and, to the extent permitted by applicable

law, on behalf of its security holders and creditors) irrevocably agree to waive all rights to trial by jury.

f) After the Engagement has been completed and publicly disclosed

by the Company, VRS may refer to it in traditional “tombstone” announcements and/or its professional promotional materials

(in each case, subject to the Company’s prior written approval and) in a manner that does not disclose non-public terms or information

and is consistent with applicable securities laws and stock exchange rules. In connection therewith, VRS may use the Company’s

corporate logo (including electronic versions thereof) in VRS’s advertising or promotional materials, subject to the Company’s

prior written consent.

g) VRS represents and warrants that it is aware of, acknowledges,

and understands that the Parent is a public company with its securities listed on NASDAQ and that the Company is subject to U.S. federal

securities laws, rules and regulations of the U.S. Securities and Exchange Commission (“SEC”), and the rules of NASDAQ, including,

without limitation, rules concerning public disclosure, maintenance of effective disclosure controls and procedures, corporate governance,

related party transactions, and insider trading. VRS shall, and shall cause its personnel and agents to, (i) comply with all applicable

U.S. federal and state securities laws and regulations, including Regulation FD and insider trading prohibitions, and NASDAQ listing

rules, in connection with the Engagement; (ii) comply with the Company’s insider trading policy, Regulation FD policy, code of

conduct, information barrier policies, and any other written policies relevant to the Engagement as provided by the Company; (iii) not

trade in, recommend, or cause any other person to trade in, the securities of the Company or any derivative thereof while in possession

of material nonpublic information (“MNPI”) or in violation of applicable law or Company policy; and (iv) implement and maintain

reasonable and customary information barriers, confidentiality controls, and recordkeeping practices designed to prevent unauthorized

disclosure or misuse of MNPI.

h) VRS shall maintain the confidentiality of all proprietary and/or non-public information it receives from

or with respect to the Company during its engagement hereunder in a commercially reasonable manner and in full compliance with all applicable

securities laws, Regulation FD and NASDAQ rules, and may only use such information for the purposes contemplated hereby. Furthermore,

VRS may be provided highly confidential and/or attorney-client privileged and/or attorney work product documents and communications from

the Company and/or its other advisors (including attorneys), and VRS (and its personnel) agrees to maintain the privileged and/or protected

nature of such documents and communications and that receipt of such documents and/or information from the Company and/or its other advisors

(including attorneys) shall not be deemed a waiver of any such privilege, attorney work-product or other confidential designations and/or

protections. VRS shall not disclose any MNPI to any third party, specifically excluding the Company’s senior lender and its attorneys

and other advisors, except (1) with the Company’s prior written authorization, (2) pursuant to a written confidentiality agreement

imposing obligations at least as protective as those set forth herein, and (3) in a manner consistent with Regulation FD and applicable

law.

i) VRS acknowledges that all decisions regarding the timing and content of the Parent’s public disclosures,

SEC filings, and NASDAQ communications shall be made exclusively by the Parent. VRS will promptly notify Pouneh Rahimi the Company’s

Chief Legal officer (e- mail: prahimi@Borealisfoods.com) if VRS becomes aware of any circumstance

that VRS believes may require consideration of a public disclosure or filing by the Parent, but VRS shall have no authority to determine

or make any such disclosure or filing. Any written materials prepared by VRS that may reasonably be expected to be used in investor, creditor,

or public communications shall be submitted to the Company for its review and prior written approval.

j) Upon the earlier of the Company’s request or termination of this Agreement, VRS shall promptly

return or destroy (at the Company’s election) all non-public Company information in its possession or control, subject to customary

rights to retain one archival copy for legal or compliance purposes, which shall remain subject to the confidentiality obligations herein.

Please countersign a copy of this letter to confirm your agreement

to its terms. We look forward to working with you.

Very truly yours,

VRS RESTRUCTURING SERVICES, LLC

By:

/s/ Jeffrey T. Varsalone

Jeffrey T. Varsalone

Managing Member

AGREED TO AND ACCEPTED:

BOREALIS FOODS, INC.

By:

/s/ Reza Soltanzadeh

Reza Soltanzadeh

Chief Executive Officer

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Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Exchange Act

-Number 240

-Section 12

-Subsection b-2

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Indicate if an emerging growth company has elected not to use the extended transition period for complying with any new or revised financial accounting standards.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Securities Act

-Number 7A

-Section B

-Subsection 2

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- Definition

Commission file number. The field allows up to 17 characters. The prefix may contain 1-3 digits, the sequence number may contain 1-8 digits, the optional suffix may contain 1-4 characters, and the fields are separated with a hyphen.

+ References

No definition available.

+ Details

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- Definition

Two-character EDGAR code representing the state or country of incorporation.

+ References

No definition available.

+ Details

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- Definition

The exact name of the entity filing the report as specified in its charter, which is required by forms filed with the SEC.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Exchange Act

-Number 240

-Section 12

-Subsection b-2

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- Definition

The Tax Identification Number (TIN), also known as an Employer Identification Number (EIN), is a unique 9-digit value assigned by the IRS.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Exchange Act

-Number 240

-Section 12

-Subsection b-2

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- Definition

Local phone number for entity.

+ References

No definition available.

+ Details

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- Definition

Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Exchange Act

-Number 240

-Section 13e

-Subsection 4c

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Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Exchange Act

-Number 240

-Section 14d

-Subsection 2b

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- Definition

Title of a 12(b) registered security.

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-Publisher SEC

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-Number 240

-Section 12

-Subsection b

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- Definition

Name of the Exchange on which a security is registered.

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Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Exchange Act

-Number 240

-Section 12

-Subsection d1-1

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Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as soliciting material pursuant to Rule 14a-12 under the Exchange Act.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Exchange Act

-Number 240

-Section 14a

-Subsection 12

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- Definition

Trading symbol of an instrument as listed on an exchange.

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No definition available.

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- Definition

Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as written communications pursuant to Rule 425 under the Securities Act.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Securities Act

-Number 230

-Section 425

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