Exhibit 10.8

Certain identified information has been excluded from this exhibit in accordance with Regulation S-K Item 601(a)(5). [***] indicates that information has been redacted.

 

 

JOINDER, FIRST AMENDMENT TO

CREDIT AGREEMENT AND SECURITY AGREEMENTS AND CONSENT

 

THIS JOINDER, FIRST AMENDMENT TO CREDIT AGREEMENT AND SECURITY

AGREEMENTS AND CONSENT (this “Amendment”) is dated as of August 10, 2022, among GAGE GROWTH CORP., a Canadian federal corporation (“Parent”), GAGE INNOVATIONS CORP., a Canadian federal corporation (“Gage Innovations”), COOKIES RETAIL CANADA CORP., a Canadian federal corporation (“Cookies”), RIVERS INNOVATIONS, INC., a Delaware corporation (“Rivers”), RIVERS INNOVATIONS US SOUTH LLC, a Delaware limited liability company (“Rivers South”), RI SPE 1 LLC, a Delaware limited liability company (“RI SPE”), SPARTAN PARTNERS CORPORATION, a Michigan corporation (“Spartan”), SPARTAN PARTNERS HOLDINGS, LLC, a Michigan limited liability company (“Spartan Holdings”), SPARTAN PARTNERS SERVICES LLC, a Michigan limited liability company (“Spartan Services”), SPARTAN PARTNERS PROPERTIES LLC, a Michigan limited liability company (“Spartan Properties”), SPARTAN PARTNERS LICENSING LLC, a Michigan limited liability company (“Spartan Licensing”; together with Parent, Gage Innovations, Cookies, Rivers, Rivers South, RI SPE, Spartan, Spartan Holdings, Spartan Services, and Spartan Properties, each, an “Existing Borrower” and collectively, jointly and severally, “Existing Borrowers”), WDB HOLDING MI, INC., a Delaware corporation (“WDB Holding”; together with Existing Borrowers, each, a “Borrower” and collectively, jointly and severally, “Borrowers”), the lenders party hereto (each, a “Lender” and, collectively, the “Lenders”), CHICAGO ATLANTIC ADMIN, LLC, a Delaware limited liability company (“Chicago Atlantic”), as administrative agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, “Administrative Agent”) and Chicago Atlantic, as collateral agent for the Secured Parties (in such capacity, together with its successors and assigns in such capacity, “Collateral Agent”, and together with Administrative Agent, each, an “Agent” and collectively, “Agents”).

 

Recitals:

 

WHEREAS, reference is made to that certain Credit Agreement dated as of November 22, 2021 (as amended, restated, modified or otherwise supplemented prior to the date hereof, the “Existing Credit Agreement”), as amended by this Amendment (the Existing Credit Agreement, as amended by this Amendment, and as further amended, restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”; capitalized terms used herein and not otherwise defined herein shall have the meaning ascribed to such terms in the Credit Agreement), among Existing Borrowers, the other Credit Parties from time to time party thereto, the Lenders from time to time party thereto and Agents;

 

WHEREAS, reference is further made to (a) that certain Security Agreement dated as of November 22, 2021 (as amended, restated, supplemented or otherwise modified from time to time, the “U.S. Security Agreement”), among the Credit Parties party thereto and Collateral Agent, for the benefit of the Secured Parties, and (b) that certain General Security Agreement dated as of November 22, 2021 (as amended, restated, supplemented or otherwise modified from time to time, the “Canadian Security Agreement”; together with the US Security Agreement, each, a “Security Agreement” and collectively, the “Security Agreements”), among the Credit Parties and Collateral Agent, for the benefit of the Secured Parties;

 

 

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20464606V.5


WHEREAS, the Credit Parties have advised Agents and Lenders that: (a) TerrAscend Corp., an Ontario corporation (“TerrAscend”), and Parent entered into that certain Articles of Arrangement dated as of March 10, 2022 (the “Reorganization Date”), pursuant to which TerrAscend became the holder of 17.24% of the outstanding equity interests of Spartan as the result of a share exchange; (b) TerrAscend and Parent entered into that certain Articles of Arrangement dated as of the Reorganization Date, pursuant to which Parent merged with 13283941 Canada Inc., an Ontario corporation (“MergeCo 1”), a wholly owned

subsidiary of TerrAscend, and Parent was the surviving entity of such merger; (c) TerrAscend and Parent entered into that certain Agreement of Purchase and Sale dated as of the Reorganization Date, pursuant to which Parent acquired TerrAscend’s 17.24% interest in Spartan; (d) Parent and 13172104 Canada Inc., an Ontario corporation (“MergeCo 2”), a wholly owned subsidiary of TerrAscend and the holder of 100% of the outstanding equity interests of TerrAscend USA, Inc., a Delaware corporation (“TerrAscend USA”), entered into that certain CBCA Form 9 – Articles of Amalgamation dated as of the Reorganization Date, pursuant to which Parent and MergeCo 2 merged and Parent was the surviving entity of such merger; (e) Parent and TerrAscend USA entered into that certain Agreement of Purchase and Sale dated as of the Reorganization Date, pursuant to which Parent transferred 100% of the outstanding equity interests of Spartan to TerrAscend USA; and (f) TerrAscend USA and WDB Holding entered into that certain Contribution Agreement dated as of the Reorganization Date, pursuant to which TerrAscend USA contributed 100% of the outstanding equity interests of Spartan to WDB Holding (such transactions, collectively, the “TerrAscend Reorganization Transaction”; and such agreements and documents described above, collectively, the “TerrAscend Reorganization Documents”);

 

WHEREAS, the Credit Parties have requested that Agents and Required Lenders agree to (a) consent to the TerrAscend Reorganization Transaction, and (b) amend certain provisions of the Existing Credit Agreement and the Security Agreements, and, subject to the terms and conditions set forth herein, Agents and the Lenders party hereto have agreed to such requests;

 

NOW, THEREFORE, in consideration of the mutual agreements herein contained and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

1.
Consent. Subject to the terms and conditions set forth herein (including, but not limited to, the conditions contained in Section 7 hereof), Agents and the Lenders signatory hereto hereby, as of the Reorganization Date, consent to the TerrAscend Reorganization Transaction. The Credit Parties acknowledge and agree that the foregoing consent is limited to the TerrAscend Reorganization Transaction as set forth in the TerrAscend Reorganization Documents delivered to Agents and Lenders on or prior to the date hereof, and any material changes to the TerrAscend Reorganization Documents or to the structure of the TerrAscend Reorganization Transaction as set forth therein after the date hereof shall require the further consent of Agents and Required Lenders. The foregoing consent is a limited, one time consent and shall only be relied upon and used for the specific purpose set forth herein and shall not be deemed to: (i) constitute a waiver of any Event of Default or any other breach of the Credit Agreement or any other Credit Document, whether now existing or hereafter arising, or (ii) establish a custom or course of dealing among the parties hereto. The foregoing consent shall not be deemed to constitute a consent to any other act or omission not permitted under, or any breach of, the Credit Agreement or any of the other Credit Documents.

 

2.
Amendments to Credit Agreement. Subject to the terms and conditions set forth herein (including, but not limited to, the conditions contained in Section 7 hereof), (a) the Existing Credit Agreement is hereby amended to delete the stricken text (indicated textually in the same manner as the following example: stricken text) and to add the double-underlined text (indicated textually in the same manner as the following example: double-underlined text) as set forth in Annex A attached hereto and (b) the Schedules to the Existing Credit Agreement are hereby replaced with the Schedules attached as Annex B hereto. For the avoidance of doubt, the Exhibits to the Existing Credit Agreement shall not be modified

 

3

20464606V.5


or otherwise affected by this Amendment.

 

 

4

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3.
Amendments to Security Agreements.

 

(a)
Subject to the terms and conditions set forth herein (including, but not limited to, the conditions contained in Section 7 hereof), the Schedules to the U.S. Security Agreement are hereby replaced with the Schedules to the U.S. Security Agreement attached as Annex C hereto.

 

(b)
Subject to the terms and conditions set forth herein (including, but not limited to, the conditions contained in Section 7 hereof), the Schedules to the Canadian Security Agreement are hereby replaced with the Schedules to the Canadian Security Agreement attached as Annex D hereto.

 

4.
Joinder.

 

(a)
By its signature hereto, WDB Holding joins the Credit Agreement as a Borrower and a Guarantor thereunder and agrees to be bound by all of the terms thereof, and hereby agrees that it is, and for all purposes after the date hereof shall be, a party to the Credit Agreement and each of the other Credit Documents as a Borrower and a Guarantor as if it were an original signatory to the Credit Agreement. WDB Holding hereby assumes all of the obligations of a Borrower and a Guarantor under the Credit Agreement and each of the other Credit Documents to which the Credit Parties are party. WDB Holding hereby ratifies and affirms as of the date hereof each and every term, representation, warranty, covenant and condition set forth in the Credit Agreement and each of the other Credit Documents which are applicable to Borrowers or Guarantors and agrees to be bound by all of the terms, provisions and conditions contained therein which are applicable to Borrowers or Guarantors. On and as of the date hereof, each reference to a “Borrower”, a “Guarantor” or a “Credit Party” in the Credit Agreement or any other Credit Document shall be deemed to include WDB Holding.

 

(b)
Without limiting the generality of the foregoing, WDB Holding hereby (i) becomes a party to the U.S. Security Agreement as a Grantor thereunder with the same force and effect as if originally named therein as a Grantor and, without limiting the generality of the foregoing, hereby unconditionally grants, assigns as security, and pledges to Collateral Agent, for the benefit of the Secured Parties, a continuing lien on and security interest in WDB Holding’s right, title, and interest in and to the Collateral, whether now owned or hereafter acquired or arising and wherever located, as collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Secured Obligations, and (ii) expressly assumes all obligations and liabilities of a Grantor thereunder.

 

5.
Representations, Warranties and Acknowledgments of Borrowers. In order to induce the Lenders and Agents to enter into this Amendment and to induce the Lenders to make the Loans under the Credit Agreement, each Borrower hereby represents and warrants to the Lenders and Agents on and as of the date hereof that, subject to Section 13.01 of the Credit Agreement:

 

(a)
Each such Person (i) is a duly organized or formed and validly existing limited liability company or other registered entity in good standing under the laws of the jurisdiction of its organization and has the corporate or other organizational power and authority to own its property and assets and to transact the business in which it is engaged and (ii) is duly qualified and is authorized to do business and is in good standing in all jurisdictions where it does business or owns assets, except, in the case of this clause (ii), where the failure to be so qualified could not reasonably be expected to result in a Material Adverse Effect.

 

(b)
Each such Person has the corporate or other organizational power and authority to execute, deliver and carry out the terms and provisions of this Amendment and the other Credit Documents to which it is a party and has taken all necessary corporate or other organizational action to authorize the

 

 

5

20464606V.5


execution, delivery and performance of this Amendment and the other Credit Documents to which it is a party. Each such Person has duly executed and delivered this Amendment and the other Credit Documents to which it is a party and such Credit Documents constitute the legal, valid and binding obligation of such Person enforceable against each such Person that is a party thereto in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, moratorium, examinership, reorganization and other similar laws relating to or affecting creditors’ rights generally and general principles of equity (whether considered in a proceeding in equity or law).

 

(c)
None of (i) the execution, delivery and performance by any such Person of this Amendment or the other Credit Documents to which it is a party and compliance with the terms and provisions thereof, and (ii) the consummation of the Transactions or the other Credit Documents will (A) contravene any applicable provision of any material Applicable Law of any Governmental Authority, (B) result in any breach of any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Lien upon any of the property or assets of any such Person (other than Liens created under the Credit Documents) pursuant to,

(1) the terms of any material indenture, loan agreement, lease agreement, mortgage or deed of trust, or (2) any other Material Contract, in the case of any of clauses (1) and (2) to which any such Person is a party or by which it or any of its property or assets is bound or (C) violate any provision of the Organization Documents or Permit of any such Person, except with respect to any conflict, breach or contravention or default (but not creation of Liens) referred to in clause (B), to the extent that such conflict, breach, contravention or default could not reasonably be expected to have a Material Adverse Effect.

 

(d)
No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority or other Person, and no consent or approval under any contract or instrument (other than those that have been duly obtained or made and which are in full force and effect, or if not obtained or made, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect) is required for the consummation of the Transactions or the due execution, delivery or performance by any such Person of this Amendment or any other Credit Document to which it is a party, or for the due execution, delivery or performance of this Amendment or the other Credit Documents, in each case by any of the Credit Parties party thereto. There does not exist any judgment, order, injunction or other restraint issued or filed with respect to the transactions contemplated by the Credit Documents, the consummation of the Transactions, the making of the Loans or the performance by the Credit Parties of their Obligations under this Amendment and the other Credit Documents.

 

(e)
The representations and warranties of each such Person set forth in the Credit Agreement and in any other Credit Document are true and correct in all material respects (or, in the case of any such representation or warranty already qualified by materiality, in all respects) on and as of the date hereof (or, in the case of any such representation or warranty expressly stated to have been made as of a specific date, as of such specific date).

 

(f)
After giving effect to this Amendment, no Default or Event of Default has occurred and is continuing.

 

6.
Reaffirmation of Obligations. Each of the Existing Borrowers hereby (a) reaffirms and confirms (i) the execution and delivery of, and all of its obligations under, the Credit Documents to which it is a party, including, without limitation, the Credit Agreement, and agrees that this Amendment does not operate to reduce or discharge any Borrower’s obligations under such Credit Documents or constitute a novation of any indebtedness or other obligations under any Credit Documents, and (ii) its guarantees, pledges, grants and other undertakings under the Credit Agreement and the other Credit Documents to which it is a party, (b) agrees that (i) each Credit Document to which it is a party shall continue to be in full force and effect and (ii) all guarantees, pledges, grants and other undertakings thereunder shall continue to

 

 

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be in full force and effect and shall accrue to the benefit of the Secured Parties, and (c) reaffirms and confirms the continuing security interests in its respective assets granted in favor of the Collateral Agent pursuant to each of the Security Documents. Each Borrower hereby acknowledges and consents to the transactions contemplated by, and the execution and delivery of, this Amendment and the other Credit Documents.

 

7.
Conditions Precedent to Effectiveness. This Amendment shall become effective as of the date of this Amendment when, and only when, Administrative Agent shall have received the following, in form and substance satisfactory to Administrative Agent:

 

(a)
counterparts of this Amendment, duly executed each Borrower, Agents and the

Lenders;

 

(b)
the TerrAscend Guaranty, duly executed by TerrAscend Guarantors;

 

(c)
the TerrAscend Pledge Agreement, duly executed by TerrAscend USA and Collateral Agent;

 

(d)
a duly executed Ratification and Reaffirmation of Collateral Assignment of Licensing Contracts among Credit Parties, the other parties party thereto and Collateral Agent;

 

(e)
a certificate for each Borrower and each TerrAscend Guarantor, duly executed and delivered by an Authorized Officer of each such Person, as to: (i) resolutions of each such Person’s board of managers/directors (or other managing body, in the case of a Person that is not a corporation) then in full force and effect expressly and specifically authorizing, to the extent relevant, all aspects of the Credit Documents applicable to such Person and the execution, delivery and performance of each Credit Document, in each case, to be executed by such Person; (ii) the incumbency and signatures of its Authorized Officers and any other of its officers, members, managers or general partner, as applicable, authorized to act with respect to each Credit Document to be executed by such Person; and (iii) each such Person’s Organization Documents, as amended, modified or supplemented as of the date hereof, certified by the appropriate officer or official body of the jurisdiction of organization of such Person, or, for each of clauses (i), (ii) and (iii) above, a confirmation that such documents have not changed since the most recent certification to Administrative Agent;

 

(f)
payment in cash by Borrowers of (i) a $1,000,000 consent and amendment fee, which shall be paid by wire transfer to Administrative Agent pursuant to the wire transfer instructions set forth on Annex E attached hereto, for the pro rata benefit of Lenders, in lieu of any other interest that may be owed solely as a result of and accruing from the date of the TerrAscend Reorganization Transaction through the date hereof, (ii) all costs and expenses incurred by Agents in connection with the preparation, execution, and delivery of this Amendment and each other Credit Documents executed in connection herewith or relating hereto and (iii) all other costs and expenses due and payable to any Agent pursuant to Section 12.05 of the Credit Agreement (including the fees, disbursements and other charges of counsel to Agents as provided therein), in each case, with respect to clauses (ii) and (iii), which shall be paid by wire transfer to Administrative Agent’s counsel pursuant to wire transfer instructions set forth in that certain invoice provided on or prior to the date hereof;

 

(g)
lien searches as to WDB Holding and TerrAscend Guarantors;

 

(h)
certificates of good standing or letter of status (or the local equivalent thereof, if applicable) with respect to WDB Holding and TerrAscend Guarantors, each dated within a recent date prior to the date hereof, such certificates to be issued by the appropriate officer or official body of the jurisdiction

 

 

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20464606V.5


of organization of such Person, which certificate shall indicate that such Person is in good standing in such jurisdiction; and

 

(i)
such other documents to be executed by the Credit Parties as may be reasonably requested by the Administrative Agent.

 

8.
Incorporation by Reference. Sections 12.05, 12.13 and 12.15 of the Credit Agreement are hereby incorporated by reference, mutatis mutandis, as if such Sections were set forth in full herein.

 

9.
Miscellaneous.

 

(a)
Amendment, Modification and Waiver. This Amendment may not be amended and no provision hereof may be waived except pursuant to a writing signed by each of the parties hereto.

 

(b)
Governing Law. This Amendment and any claims controversy, dispute or cause of action (whether in contract or tort or otherwise) based upon, arising out of or relating to this Amendment and the transactions contemplated hereby shall be governed by, and construed in accordance with, the laws of the State of Illinois, without reference to conflicts of law provisions which would result in the application of the laws of any other jurisdiction.

 

(c)
Severability. Any term or provision of this Amendment that is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Amendment or affecting the validity or enforceability of any of the terms or provisions of this Amendment in any other jurisdiction. If any provision of this Amendment is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as would be enforceable.

 

(d)
Counterparts; Integration; Effectiveness. This Amendment may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Amendment, the Credit Agreement (as amended hereby) and the other Credit Documents constitute the entire agreement among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 7 hereof, this Amendment shall become effective when it shall have been executed by Agents and when Agents shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Amendment by facsimile or in electronic (i.e., “pdf” or “tif”) format shall be effective as delivery of a manually executed counterpart of this Amendment.

 

(e)
Headings. The headings of this Amendment are for purposes of reference only and shall not limit or otherwise affect the meaning hereof.

 

(f)
Reference to and Effect on the Credit Agreement and the Other Credit Documents. On and after the date hereof, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “herein” or words of like import referring to the Credit Agreement, and each reference in the other Credit Documents to the “Credit Agreement”, “thereunder”, “thereof” or words of like import referring to the Credit Agreement shall mean and be a reference to the Existing Credit Agreement as amended by this Amendment. On and after the date hereof, each reference in either Security Agreement to “this Agreement”, “hereunder”, “herein” or words of like import referring to such Security Agreement, and each reference in the other Credit Documents to the “U.S. Security Agreement”, the “Canadian Security Agreement”, “Security Agreements”, “thereunder”, “thereof” or words of like import referring to either or

 

 

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both of the Security Agreements shall mean and be a reference to the applicable Security Agreement as amended by this Amendment. Except as specifically amended by this Amendment, the Existing Credit Agreement, the Security Agreements and the other Credit Documents shall remain in full force and effect and are hereby ratified and confirmed and this Amendment shall not be considered a novation. The execution, delivery and performance of this Amendment shall not constitute a waiver of any provision of, or operate as a waiver of any right, power or remedy of any Agent or any Lender under, the Credit Agreement, either Security Agreement or any of the other Credit Documents. This Amendment shall be deemed to be a Credit Document as defined in the Credit Agreement.

 

10.
Construction. This Amendment has been prepared through the joint efforts of all of the parties hereto. Neither the provisions of this Amendment, nor any alleged ambiguity herein, shall be interpreted or resolved against any party on the grounds that such party or its counsel drafted this Amendment, or based on any other rule of strict construction. Each of the parties represents that such party has carefully read this Amendment and that such party knows the contents hereof and has signed the same freely and voluntarily.

 

[Remainder of page intentionally left blank.]

 

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered effective as of the date hereof.

BORROWERS AND GUARANTORS:

GAGE GROWTH CORP., a Canadian federal corporation

 

 

By: /s/ Keith Stauffer

Name: Keith Stauffer

Its: Chief Financial Officer

 

GAGE INNOVATIONS CORP., a Canadian federal corporation

 

 

By: /s/ Keith Stauffer

Name: Keith Stauffer

Its: Chief Financial Officer

 

COOKIES RETAIL CANADA CORP., a Canadian federal corporation

 

 

By: /s/ Hilton Silberg

Name: Hilton Silberg

Its: Secretary and Treasurer

 

RIVERS INNOVATIONS, INC., a Delaware corporation

 

 

By: /s/ Keith Stauffer

Name: Keith Stauffer

Its: Chief Financial Officer

 

RIVERS INNOVATIONS US SOUTH LLC, a Delaware limited liability company

 

 

By: /s/ Keith Stauffer

Name: Keith Stauffer

Its: Chief Financial Officer

 

RI SPE 1 LLC, a Delaware limited liability company

 

 

By: /s/ Keith Stauffer

Name: Keith Stauffer

Its: Chief Financial Officer

 

Joinder, First Amendment to Credit Agreement and Security Agreements and Consent


 

SPARTAN PARTNERS CORPORATION, a Michigan corporation

 

 

By: /s/ Adel Fakhouri

Name: Adel Fakhouri

Its: Authorized Signatory

 

SPARTAN PARTNERS HOLDINGS, LLC, a Michigan limited liability company

 

 

By: /s/ Adel Fakhouri

Name: Adel Fakhouri

Its: Authorized Signatory

 

SPARTAN PARTNERS SERVICES LLC, a Michigan limited liability company

 

 

By: /s/ Adel Fakhouri

Name: Adel Fakhouri

Its: Authorized Signatory

 

SPARTAN PARTNERS PROPERTIES LLC, a Michigan limited liability company

 

 

By: /s/ Adel Fakhouri

Name: Adel Fakhouri

Its: Authorized Signatory

 

SPARTAN PARTNERS LICENSING LLC, a Michigan limited liability company

 

By: /s/ Adel Fakhouri

Name: Adel Fakhouri

Its: Authorized Signatory

 

WDB HOLDING MI, INC., a Delaware corporation

 

By: /s/ Keith Stauffer

Name: Keith Stauffer

Its: Chief Financial Officer

 

 

 

 

 

Joinder, First Amendment to Credit Agreement and Security Agreements and Consent


 

ADMINISTRATIVE AGENT AND COLLATERAL AGENT:

CHICAGO ATLANTIC ADMIN, LLC

 

By: /s/ Peter Sack
Name: Peter Sack
Title: Authorized Person

 

LENDERS:

 

CHICAGO ATLANTIC REAL ESTATE FINANCE, INC.

 

By: /s/ Peter Sack
Name: Peter Sack
Title: Authorized Person

 

 

CHICAGO ATLANTIC CREDIT OPPORTUNITIES, LLC

 

By: /s/ Peter Sack
Name: Peter Sack
Title: Authorized Person

 

 

Joinder, First Amendment to Credit Agreement and Security Agreements and Consent


 

IA Clarington Floating Rate Income Fund, by its subadvisor, Wellington Square Capital Partners Inc.

 

By: /s/ Jeff Sujitno
Name: Jeff Sujitno
Title: President

 

IA Clarington Core Plus Bond Fund, by its subadvisor, Wellington Square Capital Partners Inc.

By: /s/ Jeff Sujitno
Name: Jeff Sujitno
Title: President

 

IA Clarington U.S. dOLLAR FLOATING RATE INCOME Fund, by its subadvisor, Wellington Square Capital Partners Inc.

By: /s/ Jeff Sujitno
Name: Jeff Sujitno
Title: President

 

KJH SENIOR LOAN FUND, by its subadvisor, Wellington Square Capital Partners Inc.

 

By: /s/ Jeff Sujitno
Name: Jeff Sujitno
Title: President

 

 

Joinder, First Amendment to Credit Agreement and Security Agreements and Consent


 

Black Maple Capital Partners, L.P.

By: Black Maple Capital Management LP, its Investment Manager

 

By: /s/ Robert Barnard
Name: Robert Barnard
Title: CEO/CIO

EXODUS ACQUISITION LLC

 

By: /s/ Robert Barnard
Name: Robert Barnard
Title: Member

 

 

 

Joinder, First Amendment to Credit Agreement and Security Agreements and Consent


 

WHITEHAWK FINANCE LLC

 

By: /s/ Robert Louzan

Name: Robert Louzan

Title: Managing Partner

 

 

Joinder, First Amendment to Credit Agreement and Security Agreements and Consent


 

INTREPID INCOME FUND

 

By: /s/ Hunter K. Hayes

Name: Hunter K. Hayes

Title: SVP, Portfolio Management

 

INTREPID CAPITAL FUND

 

By: /s/ Hunter K. Hayes

Name: Hunter K. Hayes

Title: SVP, Portfolio Management

 

 

 

Joinder, First Amendment to Credit Agreement and Security Agreements and Consent


 

ANNEX A

 

AMENDED CREDIT AGREEMENT

 

 

 

 

 

 

 

 

 

 

CREDIT AGREEMENT

 

by and among

 

GAGE GROWTH CORP. AND ITS SUBSIDIARIES,

as Borrowers,

 

the Persons from time to time party hereto as Guarantors, the Lenders from time to time party hereto

and

 

CHICAGO ATLANTIC ADMIN, LLC,

as Administrative Agent and Collateral Agent

 

 

Dated as of November 22, 2021

 

 

 

 

 

 

 

 

 

 

 

GREEN IVY CAPITAL, LLC,

as Lead Arranger

 

 

 

As amended by that certain Joinder, First Amendment to Credit Agreement and Security Agreements

and Consent dated as of August 10, 2022.

 

 

 

20466206V.120466206V.4


 

TABLE OF CONTENTS

 

Pages

 

ARTICLE I DEFINITIONS 1

 

SECTION 1.01

Defined Terms

1

SECTION 1.02

Other Interpretive Provisions

28

SECTION 1.03

Accounting Terms and Principles

29

SECTION 1.04 [Intentionally Omitted] 30

SECTION 1.05 References to Agreements, Laws, Etc 30

SECTION 1.06 Times of Day 30

SECTION 1.07 Timing of Payment of Performance 30

SECTION 1.08 Corporate Terminology 30

ARTICLE II AMOUNT AND TERMS OF LOANS 30

 

SECTION 2.01

Loans

30

SECTION 2.02

[Intentionally Omitted]

30

SECTION 2.03

[Intentionally Omitted]

31

SECTION 2.04 Disbursement of Funds 31

SECTION 2.05 Payment of Loans; Evidence of Debt 32

SECTION 2.06 Interest 32

SECTION 2.07 Increased Costs, Illegality, Etc 33

SECTION 2.08 Multiple Borrowers 34

SECTION 2.09 Borrower Representative 35

SECTION 2.10 Defaulting Lender 36

ARTICLE III COMMITMENT TERMINATIONS 37

SECTION 3.01 Mandatory Reduction of Commitments 37

ARTICLE IV PAYMENTS 37

SECTION 4.01 Voluntary Prepayments 37

SECTION 4.02 Mandatory Prepayments 38

SECTION 4.03 Payment of Obligations; Method and Place of Payment 40

SECTION 4.04 Taxes 40

SECTION 4.05 Computations of Interest and Fees 43

SECTION 4.06 Maximum Interest 43

ARTICLE V CONDITIONS PRECEDENT TO LOANS 45

 

SECTION 5.01

 

Closing Date Loan

45

ARTICLE VI  GUARANTEE

 

 

49

SECTION 6.01

 

Guarantee

49

SECTION 6.02

 

Right of Contribution

50

SECTION 6.03

 

No Subrogation

51

SECTION 6.04

 

Modification of the Guarantor Obligations

51

 

i

 


 

20466206V.120466206V.4

 

 

 


 

SECTION 6.05

Guarantee Absolute and Unconditional

51

SECTION 6.06

Reinstatement

52

SECTION 6.07

Payments

52

SECTION 6.08

Taxes

52

ARTICLE VII REPRESENTATIONS, WARRANTIES AND AGREEMENTS 52

 

SECTION 7.01

Status

52

SECTION 7.02

Power and Authority

53

SECTION 7.03

No Violation

53

SECTION 7.04

Litigation, Labor Controversies, Etc

53

SECTION 7.05

Use of Proceeds; Regulations U and X

53

SECTION 7.06

Approvals, Consents, Etc

53

SECTION 7.07

Investment Company Act

54

SECTION 7.08 Accuracy of Information 54

SECTION 7.09 Financial Condition; Financial Statements 54

SECTION 7.10 Tax Returns and Payments 55

SECTION 7.11 Benefit Plans 55

SECTION 7.12 Subsidiaries 55

SECTION 7.13 Intellectual Property; Licenses, Etc 55

SECTION 7.14 Environmental Warranties 56

SECTION 7.15 Ownership of Properties 57

SECTION 7.16 No Default 57

SECTION 7.17 Solvency 57

SECTION 7.18 Locations of Offices, Records and Collateral 57

SECTION 7.19 Compliance with Laws and Permits; Authorizations 58

SECTION 7.20 No Material Adverse Effect 58

SECTION 7.21 Contractual or other Restrictions 58

SECTION 7.22 Collective Bargaining Agreements 58

SECTION 7.23 Insurance 58

SECTION 7.24 Evidence of other Indebtedness 59

SECTION 7.25 Deposit Accounts and Securities Accounts 59

SECTION 7.26 Absence of any Undisclosed Liabilities 59

SECTION 7.27 Material Contracts and Regulatory Matters 59

SECTION 7.28 Anti-Terrorism Laws 59

SECTION 7.29 Conduct of Business 60

SECTION 7.30 Transactions with Affiliates 60

SECTION 7.31 Canadian Securities Law Matters 60

ARTICLE VIII AFFIRMATIVE COVENANTS 60

 

SECTION 8.01

Financial Information, Reports, Notices and Information

61

SECTION 8.02

Books, Records and Inspections

64

 

 

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SECTION 8.03

Maintenance of Insurance

65

SECTION 8.04

Payment of Taxes

65

SECTION 8.05

Maintenance of Existence; Compliance with Laws, Etc

65

SECTION 8.06 Environmental Compliance 65

SECTION 8.07 Maintenance of Properties 67

SECTION 8.08 End of Fiscal Years; Fiscal Quarters 67

SECTION 8.09 Additional Credit Parties 67

SECTION 8.10 Use of Proceeds 68

SECTION 8.11 Further Assurances 68

SECTION 8.12 Collateral Access Agreements 68

SECTION 8.13 Bank Accounts 69

SECTION 8.14 Sanctions; Anti-Corruption Laws 69

SECTION 8.15 Regulatory Matters 69

SECTION 8.16 Annual Lender Meeting 70

SECTION 8.17 Licensing Contracts 70

SECTION 8.18 Lien Releases. 70

SECTION 8.19 Sales-Tracking Software 70

SECTION 8.20 Canadian Securities Law Matters 70

SECTION 8.21 TerrAscend Transaction 70

SECTION 8.22 Post-Closing Matters 71

ARTICLE IX NEGATIVE COVENANTS 72

 

SECTION 9.01

Limitation on Indebtedness

72

SECTION 9.02

Limitation on Liens

73

SECTION 9.03

Consolidation, Merger, Etc

75

SECTION 9.04

Permitted Dispositions

76

SECTION 9.05

Investments

77

SECTION 9.06

ERISA

78

SECTION 9.07

Restricted Payments

78

SECTION 9.08 Payments and Modification of Certain Agreements 79

SECTION 9.09 Sale and Leaseback 79

SECTION 9.10 Transactions with Affiliates 79

SECTION 9.11 Restrictive Agreements, Etc 79

SECTION 9.12 Hedging Agreements 80

SECTION 9.13 Changes in Business and Fiscal Year 80

SECTION 9.14 Financial Performance Covenants 80

SECTION 9.15 Operations of Parent 80

SECTION 9.16 Holding Company 80

ARTICLE X EVENTS OF DEFAULT 81

SECTION 10.01 Listing of Events of Default 81

 

 

 

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SECTION 10.02 Remedies Upon Event of Default 83

ARTICLE XI AGENTS 84

 

SECTION 11.01

Appointment

84

SECTION 11.02

Delegation of Duties

84

SECTION 11.03

Exculpatory Provisions

84

SECTION 11.04

Reliance by Agents

85

SECTION 11.05

Notice of Default

85

SECTION 11.06

Non-Reliance on Agents and other Lenders

85

SECTION 11.07

Indemnification

86

SECTION 11.08

Agent in Its Individual Capacity

86

SECTION 11.09

Successor Agents

86

SECTION 11.10

Agents Generally

87

SECTION 11.11 Restrictions on Actions by Secured Parties; Sharing of

Payments 87

SECTION 11.12 Agency for Perfection 88

SECTION 11.13 Enforcement by Agents 88

SECTION 11.14 Credit Parties Not Beneficiaries 88

SECTION 11.15 Intercreditor and Subordination Agreements 88

ARTICLE XII MISCELLANEOUS 88

SECTION 12.01 Amendments and Waivers 88

SECTION 12.02 Notices and Other Communications 89

SECTION 12.03 No Waiver; Cumulative Remedies 90

SECTION 12.04 Survival of Representations and Warranties 90

SECTION 12.05 Payment of Expenses and Taxes; Indemnification 90

SECTION 12.06 Successors and Assigns; Participations and Assignments; Replacement of Lender 91

SECTION 12.07 Pledge of Loans 94

SECTION 12.08 Adjustments; Set-off 94

SECTION 12.09 Counterparts 95

SECTION 12.10 Severability 95

SECTION 12.11 Integration 95

SECTION 12.12 GOVERNING LAW 96

SECTION 12.13 Submission to Jurisdiction; Waivers 96

SECTION 12.14 Acknowledgments 97

SECTION 12.15 WAIVERS OF JURY TRIAL 97

SECTION 12.16 Confidentiality 97

SECTION 12.17 Press Releases, Etc 99

SECTION 12.18 Releases of Guarantees and Liens 99

SECTION 12.19 USA Patriot Act 99

SECTION 12.20 No Fiduciary Duty 100

 

 

 

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SECTION 12.21

Authorized Officers

100

SECTION 12.22

Subordination of Intercompany Indebtedness

100

SECTION 12.23

Public Lenders

100

SECTION 12.24

Original Issue Discount

101

SECTION 12.25

Tax Treatment

101

SECTION 12.26

Joint and Several (Canada)

101

SECTION 12.27

Judgement Currency

101

ARTICLE XIII ADDITIONAL COVENANTS AND AGREEMENTS 102

SECTION 13.01 Cannabis Laws 102

 

 

SCHEDULES

 

Schedule 1.01 Commitments

Schedule P-1 Permitted Acquisitions

Schedule 7.12 Subsidiaries

Schedule 7.13 Intellectual Property, Licenses, Etc. Schedule 7.14 Environmental Warranties

Schedule 7.15 Ownership of Properties

Schedule 7.18 Locations of Offices, Records and Collateral Schedule 7.19 Material Regulatory Licenses

Schedule 7.21 Contractual or other Restrictions Schedule 7.22 Collective Bargaining Agreements Schedule 7.24 Evidence of other Indebtedness

Schedule 7.25 Deposit Accounts and Securities Accounts Schedule 7.27(a) Material Contracts and Regulatory Matters Schedule 7.27(b) Sales Tracking Software

Schedule 7.30 Transactions with Affiliates Schedule 8.17 Licensing Contracts

Schedule 9.02 Permitted Liens

Schedule 9.05 Investments

Schedule 12.02 General (Addresses for Notices) EXHIBITS

Exhibit A Form of Assignment and Acceptance

Exhibit B Form of Compliance Certificate

Exhibit C Form of Credit Agreement Joinder

Exhibit D Form of Note

 

 

 

 

 

 

 

 

 

 

v

 

 

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CREDIT AGREEMENT

 

THIS CREDIT AGREEMENT, dated as of November 22, 2021, is among GAGE GROWTH CORP., a Canadian federal corporation (“Parent”), GAGE INNOVATIONS CORP., a Canadian federal corporation (“Gage Innovations”), COOKIES RETAIL CANADA CORP., a Canadian federal corporation (“Cookies”), 2668420 ONTARIO INC., an Ontario corporation (“Cookies Sub #1”), 2765533 ONTARIO INC., an Ontario corporation (“Cookies Sub #2”), RIVERS INNOVATIONS, INC., a Delaware corporation (“Rivers”), RIVERS INNOVATIONS US SOUTH LLC, a Delaware limited liability company (“Rivers South”), RI SPE 1 LLC, a Delaware limited liability company (“RI SPE”), SPARTAN PARTNERS CORPORATION, a Michigan corporation (“Spartan”), SPARTAN PARTNERS HOLDINGS, LLC, a Michigan limited liability company (“Spartan Holdings”), SPARTAN PARTNERS SERVICES LLC, a Michigan limited liability company (“Spartan Services”), SPARTAN PARTNERS PROPERTIES LLC, a Michigan limited liability company (“Spartan Properties”), SPARTAN PARTNERS LICENSING LLC, a Michigan limited liability company (“Spartan Licensing), WDB HOLDING MI, INC., a Delaware corporation (“WDB Holding; together with Parent, Gage Innovations, Cookies, Cookies Sub #1, Cookies Sub #2, Rivers, Rivers South, RI SPE, Spartan, Spartan Holdings, Spartan Services, and Spartan Properties and Spartan Licensing, and each other Subsidiary of Parent that becomes a borrower hereunder pursuant to Section 8.09, each, a “Borrower” and collectively, jointly and severally, “Borrowers”), Parent and any Subsidiaries of Parent hereto that are Guarantors or become Guarantors hereunder pursuant to Section 8.09, the lenders from time to time party hereto (each, a “Lender” and, collectively, the “Lenders”), CHICAGO ATLANTIC ADMIN, LLC, a Delaware limited liability company (“Chicago Atlantic”), as administrative agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, “Administrative Agent”) and Chicago Atlantic, as collateral agent for the Secured Parties (in such capacity, together with its successors and assigns in such capacity, “Collateral Agent”, and together with Administrative Agent, each, an “Agent” and collectively, “Agents”).

RECITALS

 

WHEREAS, Borrowers have requested that the Lenders extend to Borrowers on the Closing Date certain Loans in the aggregate principal amount of $55,000,000 (the “Aggregate Commitment”); and

 

WHEREAS, the Lenders have agreed to provide the Loans, in each case subject to the terms and conditions contained in this Agreement.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto agree as follows:

 

ARTI CLE I

Definitions

 

SECTION 1.01 Defined Terms. As used herein, the following terms shall have the meanings specified in this Section 1.01 unless the context otherwise requires:

 

Administrative Agent” shall have the meaning set forth in the Preamble.

 

Administrative Questionnaire” shall mean a questionnaire completed by each Lender, in a form approved by Administrative Agent, in which such Lender, among other things, (a) designates one or more credit contacts to whom all syndicate-level information (which may contain material

 

 

20466206V.120466206V.4


 

non-public information about the Credit Parties and their Related Parties or their respective securities) will be made available and who may receive such information in accordance with such Lender’s compliance procedures and Applicable Laws, including federal and state securities laws and (b) designates an address, electronic mail address or telephone number for notices and communications with such Lender.

 

Affiliate” shall mean, with respect to any Person, (a) any Person which, directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such Person, or (b) any Person who is a director or officer (i) of such Person, (ii) of any Subsidiary of such Person or (iii) of any Person described in clause (a) above. For purposes of this definition, control of a Person shall mean the power, direct or indirect, to direct or cause the direction of the management and policies of such Person, in each case whether through the ownership of any Capital Stock, by contract or otherwise. No Agent or Lender shall be an Affiliate of any Consolidated Company for purposes of this Agreement or any other Credit Document.

 

Agents” shall have the meaning set forth in the Preamble.

 

Aggregate Commitment” shall have the meaning set forth in the Preamble.

 

Agreement” shall mean this Credit Agreement, as it may be amended, restated, amended and restated, supplemented or otherwise modified from time to time.

 

ALTA” shall mean the American Land Title Association.

 

Alterna Accounts” means, collectively, the deposit accounts of the Credit Parties listed on Schedule 7.25 and maintained with Alterna Savings and Credit Union Limited.

 

Anti-Corruption Laws” shall mean all laws, rules, and regulations of any jurisdiction applicable to any Credit Party or any of its Subsidiaries from time to time concerning or relating to bribery or corruption, including the United States Foreign Corrupt Practices Act of 1977, the Corruption of Foreign Public Officials Act (Canada), Canadian Economic Sanctions and Export Control Laws and other similar anti-corruption legislation in other jurisdictions.

 

Anti-Terrorism Laws” shall have the meaning set forth in Section 7.28.

 

Applicable Accounting Standards” means, (a) initially, (i) IFRS or (ii) generally accepted accounting principles from time to time approved by the Canadian Institute of Chartered Accountants, or any successor institute, including ASPE and those otherwise set out in the Handbook of the Canadian Institute of Chartered Accountants, applied on a consistent basis, and (b) upon migration from IFRS to GAAP in accordance with Section 9.13, GAAP.

 

Applicable Fiscal Period” shall mean the period of four consecutive fiscal quarters ending at the end of each prescribed fiscal quarter.

 

Applicable Laws” shall mean, subject to the carve-outs and acknowledgments contained in Section 13.01, as to any Person, any law (including common law), statute, regulation, ordinance, rule, order, policy, decree, judgment, consent decree, writ, injunction, settlement agreement or governmental requirement enacted, promulgated or imposed or entered into or agreed by any Governmental Authority or determination of an arbitrator, in each case applicable to or binding on such

 

 

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Person or any of its property, products, business, assets or operations or to which such Person or any of its property, products, business, assets or operations is subject.

 

Applicable Securities Legislation” shall mean all applicable securities laws of each of the Reporting Jurisdictions and the respective rules and regulations under such laws together with applicable published fee schedules, prescribed forms, policy statements, national or multilateral instruments, orders, blanket rulings and other applicable regulatory instruments of the securities regulatory authorities in any of the Reporting Jurisdictions.

 

Application Event” shall have the meaning set forth in Section 4.02(d).

 

Approved Fund” shall mean any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in commercial loans and similar extensions of credit in the ordinary course and that is administered, advised or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers, advises or manages a Lender.

 

Arranger” shall mean Green Ivy Capital, LLC, as lead arranger.

 

Assignment and Acceptance” shall mean an assignment and acceptance substantially in the form of Exhibit A.

 

Assignment of Leases and Rents” shall mean each assignment of leases and rents or other security document granted by any applicable Credit Party to Collateral Agent for the benefit of the Secured Parties in respect of any leases of Real Property owned or leased by such Credit Party, in such form as agreed between such Credit Party and Collateral Agent.

 

Attributable Indebtedness” shall mean, on any date, in respect of any Capitalized Lease of any Person, the capitalized amount thereof that would appear as a liability on a balance sheet of such Person prepared as of such date in accordance with Applicable Accounting Standards.

 

Authorized Officer” shall mean, with respect to any Credit Party, the president, the chief financial officer, the chief operating officer, the secretary, the treasurer or any other senior officer of such Credit Party, but, in any event, with respect to financial matters, the chief financial officer of such Credit Party or such other senior officer who is in charge of financial matters for such Credit Party.

 

 

 

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seq.).



 

4

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Bankruptcy Code” shall mean the United States Bankruptcy Code (11 U.S.C. Section 101 et

 

 

Beneficial Ownership Certification” shall mean a certification regarding beneficial ownership

 

 

5

20466206V.120466206V.4


 

or control as required by the Beneficial Ownership Regulation.

 

Beneficial Ownership Regulation” shall mean 31 C.F.R. § 1010.230. “Benefited Lender” shall have the meaning set forth in Section 12.08(a).

BIA” shall mean the Bankruptcy and Insolvency Act (Canada), as amended from time to time.

 

Board” shall mean the Board of Governors of the Federal Reserve System of the United States (or any successor).

 

 

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Board of Directors” shall mean the board of directors, board of managers or other equivalent governing body of a Person.

 

Borrower” and “Borrowers” shall have the meanings set forth in the Preamble. “Budget” shall have the meaning set forth in Section 8.01(f).

Business Day” shall mean any day excluding Saturday, Sunday and any day that shall be in the City of Chicago, Illinois a legal holiday or a day on which banking institutions are authorized by law or other governmental actions to close.

Businesses” shall mean, collectively, (a) the Cannabis Business and (b) the Support Business. “Canadian Anti-Money Laundering & Anti-Terrorism Legislation” shall mean the Criminal

Code, R.S.C. 1985, c. C-46, the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) and the United Nations Act, R.S.C. 1985, c.U-2 or any similar Canadian legislation, together with all rules, regulations and interpretations thereunder or related thereto including the Regulations Implementing the United Nations Resolutions on the Suppression of Terrorism and the United Nations Al-Qaida and Taliban Regulations promulgated under the United Nations Act.

 

Canadian Blocked Person” shall mean any Person that is a “designated person”, “politically exposed foreign person” or “terrorist group” as described in any Canadian Economic Sanctions and Export Control Laws.

 

Canadian Cannabis Laws” shall mean the Cannabis Act (Canada), the Cannabis Regulations (Canada), the Excise Act (Canada) as well as any other Applicable Law enacted or enforced by a Canadian Governmental Authority that governs the production, processing, sale, distribution, transfer or possession of any cannabis, cannabis accessory, or cannabis service.

 

Canadian Credit Party” shall mean any Credit Party organized and existing under the federal laws of Canada or any province or territory thereof.

 

Canadian Economic Sanctions and Export Control Laws” shall mean any Canadian laws, regulations or orders governing transactions in controlled goods or technologies or dealings with countries, entities, organizations, or individuals subject to economic sanctions and similar measures, including the Special Economic Measures Act (Canada), the United Nations Act (Canada), the Freezing Assets of Corrupt Foreign Officials Act (Canada), Part II.1 of the Criminal Code (Canada) and the Export and Import Permits Act (Canada), and any related regulations.

 

Canadian Pension Plans” shall mean, with respect to any Canadian Credit Party, all plans or arrangements that are pension plans required to be registered under Canadian federal or provincial law and that are administered or contributed to by such Credit Party for any of its employees or former employees located in Canada or any province or territory thereof, but does not include the Canada Pension Plan or the Quebec Pension Plan as maintained by the Government of Canada or the Province of Quebec, respectively.

 

Canadian Security Agreement” shall mean that certain General Security Agreement dated as of the Closing Date, by and among each Canadian Credit Party and Collateral Agent for the benefit of the Secured Parties.

 

 

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Canadian Statutory Lien” shall mean a deemed trust or lien under applicable Canadian federal, provincial or territorial law securing claims for any unpaid wages, vacation pay, worker’s compensation, unemployment insurance, pension plan contributions, pension solvency deficiency, employee source or non-resident withholding tax deductions, unremitted goods and services, harmonized sales, sales or other excise taxes or similar statutory obligations (secured by a deemed trust or lien), each of which are not overdue or are being contested in good faith by a Credit Party.

 

Cannabis Business” shall mean the business of acquiring, cultivating, manufacturing, extracting, testing, producing, processing, possessing, selling (at retail or wholesale), dispensing, donating, distributing, transporting, packaging, labeling, marketing or disposing of cannabis, marijuana or related substances or products containing or relating to the same, and all ancillary activities related to the foregoing, including leasing the Real Property on which any such activity is conducted.

 

Capital Expenditures” shall mean, for any specified period, the sum of, without duplication, all expenditures made, directly or indirectly, by the ConsolidatedFinancial Reporting Companies during such period, determined on a consolidated basis in accordance with Applicable Accounting Standards, that are or should be reflected as additions to property, plant or equipment or similar items reflected in the consolidated statement of cash flows and balance sheet of the ConsolidatedFinancial Reporting Companies, or have a useful life of more than one year.

 

Capital Stock” shall mean any and all shares, interests, participations, units or other equivalents (however designated) of capital stock of a corporation, membership interests in a limited liability company, unlimited liability company interest, partnership interests of a limited partnership, any and all equivalent ownership interests in a Person and any and all warrants, rights or options to purchase any of the foregoing.

 

Capitalized Lease Obligations” shall mean, as applied to any Person, all obligations under Capitalized Leases of such Person or any of its Subsidiaries, in each case taken at the amount thereof accounted for as liabilities on the balance sheet (excluding the footnotes thereto) of such Person in accordance with Applicable Accounting Standards.

 

Capitalized Leases” shall mean, as applied to any Person, all leases of property that have been or should be, in accordance with Applicable Accounting Standards, recorded as capitalized leases on the balance sheet of such Person or any of its Subsidiaries, on a consolidated basis; provided that for all purposes hereunder the amount of obligations under any Capitalized Lease shall be the amount thereof accounted for as a liability on the balance sheet (excluding the footnotes thereto) of such Person in accordance with Applicable Accounting Standards.

 

Cash Equivalents” shall mean:

 

(a)
any direct obligation of (or unconditional guarantee by) the United States or, with respect to any Canadian Credit Party, Canada (or any agency or political subdivision thereof, to the extent such obligations are supported by the full faith and credit of the United States or Canada, as the case may be) maturing not more than one year after the date of acquisition thereof;

 

(b)
commercial paper maturing not more than one year from the date of issue and issued by (i) a corporation (other than an Affiliate of any Credit Party) organized under the laws of any state of the United States, the District of Columbia or, with respect to any Canadian Credit Party, any province of Canada and, at the time of acquisition thereof, rated A-1 or higher by S&P or P-1 or higher

 

 

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by Moody’s, or carrying an equivalent rating by a nationally recognized rating agency if at any time neither S&P or Moody’s shall be rating such obligations, or (ii) any Lender (or its holding company);

 

(c)
any certificate of deposit, time deposit or bankers acceptance, maturing not more than one year after its date of issuance, which is issued by either: (i) a bank organized under the laws of the United States or, with respect to any Canadian Credit Party, Canada (or any state or province thereof) which has, at the time of acquisition thereof, (A) a credit rating of A-2 or higher from Moody’s or A or higher from S&P and (B) a combined capital and surplus greater than

$500,000,000, or (ii) a Lender;

 

(d)
cash and demand deposits maintained with the domestic office of any commercial bank organized under the laws of the United States or, with respect to Parent, Canada (or any state or province of the United States or Canada) which has a combined capital and surplus and undivided profits of not less than $500,000,000);

 

(e)
any repurchase agreement having a term of 30 days or less entered into with any Lender or any commercial banking institution satisfying, at the time of acquisition thereof, the criteria set forth in clause (c)(i) which (i) is secured by a fully perfected security interest in any obligation of the type described in clause (a), and (ii) has a market value at the time such repurchase agreement is entered into of not less than 100.00% of the repurchase obligation of such commercial banking institution thereunder; and

 

(f)
mutual funds investing primarily in assets described in clauses (a) through (d) of this definition.

 

Casualty Event” shall mean the damage, destruction or condemnation, as the case may be, of property of any Person or any of its Subsidiaries.

 

CCAA” shall mean the Companies’ Creditors Arrangement Act (Canada) as amended from time to time.

 

CERCLA” shall mean the Comprehensive Environmental Response, Compensation and Liability Act of 1980.

 

Change in Cannabis Law” shall mean any adverse change after the Closing Date in U.S. Federal Cannabis Law, Canadian Cannabis Law or U.S. State Cannabis Law, or the application or interpretation thereof by any Governmental Authority, (a) that would make it unlawful for any Agent or Lender to (i) continue to be a party to any Credit Document, (ii) perform any of its obligations hereunder or under any other Credit Document, or (iii) to fund or maintain the Loans, (b) pursuant to which any Governmental Authority has enjoined any Agent or Lender from (i) continuing to be a party to any Credit Document, (ii) performing any of its obligations hereunder or under any other Credit Document, or (iii) funding or maintaining the Loans, or (c) pursuant to which any Governmental Authority requires (i) confidential information from or disclosure of confidential information about any Agent, any Lender, any Affiliate thereof or any investor therein, or (ii) such Agent or any Lender to obtain any Permit to, in each case, (A) continue to be a party to any Credit Document, (B) perform any of its obligations hereunder or under any other Credit Document, or (C) to fund or maintain the Loans.

 

Change in Law” shall mean (a) the adoption of any law, rule, regulation or treaty after the date of this Agreement, (b) any change in any law, rule, regulation or treaty or in the interpretation, implementation or application thereof by any Governmental Authority after the date of this Agreement or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the

 

 

9

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force of law) by any Governmental Authority after the date of this Agreement; provided that notwithstanding anything herein to the contrary, (x) the Dodd Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives issued thereunder or in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the day enacted, adopted, issued or implemented.

 

Change of Control” shall mean an event or series of events by which (a) other than in connection with the TerrAscend Transaction, on or after March 31, 2023, there is a report filed with any securities commission or securities regulatory authority in Canada, disclosing that any offeror (as such term is defined in section 1.1 of Multilateral Instrument 62-104 Take-Over Bids and Issuer Bids) has acquired beneficial ownership (within the meaning of the Securities Act) of, or the power to exercise control or direction over, or securities convertible into, any Voting Stock of Parent, that together with the offeror’s securities (as such term is defined in section 1.1 of Multilateral Instrument 62-104 Take-Over Bids and Issuer Bids) in relation to any Voting Stock of Parent, would constitute Voting Stock representing more than 30.00% of the total voting power attached to all Voting Stock of Parent then outstanding; (b) other than in connection with the TerrAscend Transaction, there is consummated any amalgamation, consolidation, statutory arrangement (involving a business combination) or merger of Parent (i) in which Parent is not the continuing or surviving corporation or

(ii) pursuant to which any Voting Stock would be reclassified, changed or converted into or exchanged for cash, securities or other property, other than (in each case) an amalgamation, consolidation, statutory arrangement or merger of Parent in which the holders of the Voting Stock immediately prior to the amalgamation, consolidation, statutory arrangement or merger have, directly or indirectly, more than 50.10% of the Voting Stock of the continuing or surviving corporation immediately after such transaction; (c) (i) prior to the consummation of the TerrAscend Transaction, there occurs any other change of control of Parent as it exists as at the date of this Agreement other than in connection with the TerrAscend Transaction, and (ii) upon and after the consummation of the TerrAscend Transaction, TerrAscend shall cease to own and control, directly or indirectly, free and clear of all Liens or other encumbrances (other than Permitted Liens arising by operation of law), at least 51.00% of the Capital Stock of Parent; (d) during any period of 24 consecutive months, a majority of the members of the board of directors or other equivalent governing body of Parent cease to be composed of individuals

(i) who were members of that board or equivalent governing body on the first day of such period,

(ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body; (e) any Borrower shall cease to own and control, directly or indirectly, free and clear of all Liens or other encumbrances (other than Permitted Liens arising by operation of law and Liens created pursuant to any Credit Document), (i) at least the percentage of the Capital Stock of each of its Subsidiaries held by such Borrower on the ClosingFirst Amendment Date and (ii) 100.00% of the Capital Stock of each of its Subsidiaries formed or acquired after the Closing DateFirst Amendment Date; and (f) TerrAscend USA shall cease to own and control, directly or indirectly, free and clear of all Liens or other encumbrances (other than Permitted Liens arising by operation of law and Liens created pursuant to any Credit Document) 100% of the Capital Stock of WDB Holding. For the avoidance of doubt, the TerrAscend Transaction shall not constitute a Change of Control.

 

Chicago Atlantic” shall have the meaning set forth in the Preamble.

 

 

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Claims” shall have the meaning set forth in the definition of Environmental Claims. “Closing Date” shall mean November 22, 2021.

Code” shall mean the Internal Revenue Code of 1986, and the Treasury Regulations promulgated and rulings issued thereunder.

 

Collateral” shall mean any assets of any Credit Party or other assets upon which Collateral Agent has been, or has purportedly been, granted a Lien in connection with this Agreement or any other Credit Document.

 

Collateral Access Agreements” shall mean a collateral access agreement or landlord waiver in form and substance reasonably satisfactory to Collateral Agent between Collateral Agent and any lessor, warehouseman, processor, bailee, consignee, or other Person in possession of, having a Lien upon, or having rights or interests in, any Credit Party’s books and records or assets.

 

Collateral Agent” shall have the meaning set forth in the Preamble.

 

Collateral Assignee” shall have the meaning set forth in Section 12.06(d).

 

Collateral Assignments of Leases” shall mean, collectively, those certain Collateral Assignments of Lease among the applicable Credit Party, the lessor thereto and Collateral Agent, in form and substance reasonably satisfactory to Collateral Agent.

 

Collateral Assignments of Licensing Contracts” shall mean, collectively, those certain Collateral Assignments of Licensing Contracts among the applicable Credit Party, the other parties party thereto and Collateral Agent, in form and substance reasonably satisfactory to Collateral Agent.

 

Collections” shall mean all cash, checks, credit card slips or receipts, notes, instruments, and other items of payment (including insurance proceeds, proceeds of cash sales, rental proceeds, and Tax refunds) of the Credit Parties.

 

Commitment” shall mean the obligation of the Lenders to make the Loans hereunder, in each case in the Dollar amounts set forth beside such Lender’s name under the applicable heading on Schedule 1.01 or in the Assignment and Acceptance pursuant to which such Lender became a Lender under this Agreement, as such amounts may be changed from time to time pursuant to the terms of this Agreement.

 

Commitment Percentage” shall mean, as to any Lender, the Commitment Percentage (if any) set forth beside such Lender’s name in Schedule 1.01 (or, in the case of any Lender that became party to this Agreement after the Closing Date pursuant to Section 12.06(b) or 12.06(c), the Commitment Percentage (if any) of such Lender as set forth in the applicable Assignment and Acceptance), as the same may be adjusted upon any assignment by or to such Lender pursuant to Section 12.06(b) or 12.06(c).

 

Communications” shall mean, collectively, any notice, demand, communication, information, document or other material that any Credit Party provides to Administrative Agent pursuant to any Credit Document or the transactions contemplated therein which is distributed to Administrative Agent or any Lender by means of electronic communications pursuant to Section 12.23, including through the Platform.

 

 

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Compliance Certificate” shall mean a certificate duly completed and executed by an Authorized Officer of Parent substantially in the form of Exhibit B, together with such changes thereto or departures therefrom as Administrative Agent may from time to time reasonably request or approve for the purpose of monitoring the Credit Parties’ compliance with the Financial Performance Covenants or certain other calculations, or as otherwise agreed to by Administrative Agent.

 

Confidential Information” shall have the meaning set forth in Section 12.16.

 

Connection Income Taxes” shall mean Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes.

 

Consolidated Companies” shall mean Parent and its Subsidiaries on a consolidated basis in accordance with Applicable Accounting Standards.

 

Contingent Liability” shall mean, for any Person, any agreement, undertaking or arrangement by which such Person guarantees, endorses or otherwise becomes or is contingently liable upon (by direct or indirect agreement, contingent or otherwise, to provide funds for payment, to supply funds to, or otherwise to invest in, a debtor, or otherwise to assure a creditor against loss) the Indebtedness of any other Person (other than by endorsements of instruments in the course of collection), or guarantees the payment of dividends or other distributions upon the Capital Stock of any other Person. The amount of any Person’s obligation under any Contingent Liability shall (subject to any limitation set forth therein) be deemed to be the outstanding principal amount of the debt, obligation or other liability guaranteed thereby.

 

Contractual Obligation” shall mean, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound other than the Obligations.

 

Control Agreement” shall mean a pledge, collateral assignment, control agreement or bank consent letter, in form and substance reasonably satisfactory to Collateral Agent, executed and delivered by the applicable Credit Party, Collateral Agent, and the applicable securities intermediary or bank, which agreement is sufficient to give Collateral Agent “control” over each of such Credit Party’s securities accounts, deposit accounts or investment property, as the case may be.

 

Cookies” shall have the meaning set forth in the Preamble.

 

Cookies Sub #1” shall mean 2668420 Ontario Inc., an Ontario corporation. Cookies Sub #2” shall mean 2765533 Ontario Inc., an Ontario corporation.

Cookies Subsidiaries” shall mean, collectively, Cookies Sub #1 and Cookies Sub #2.

 

Copyright Security Agreements” shall mean any and all copyright security agreements entered into by the Credit Parties in favor of Collateral Agent (as required by the Agreement or any other Credit Document).

 

Credit Agreement Joinder” shall mean a joinder substantially in the form of Exhibit C.

 

Credit Documents” shall mean (a) this Agreement, the Security Documents, any Notes, each Collateral Assignment of Lease, each Information Certificate, the TerrAscend Guaranty, any subordination or intercreditor agreements in favor of any Agent with respect to this Agreement and (b)

 

 

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any other document or agreement executed by any Credit Party, or by any Borrower on behalf of the Credit Parties, or any of them, and delivered to any Agent or Lender in connection with any of the foregoing or the Obligations.

 

Credit Parties” shall mean, collectively, Borrowers and Guarantors, and “Credit Party” shall mean any of the Credit Parties, individually.

 

Credit Party Materials” shall have the meaning set forth in Section 12.23.

 

CSA” shall mean the Canadian Securities Administrators, or any Governmental Authority succeeding to any of its principal functions.

 

CSE” shall mean the Canadian Securities Exchange and its successors.

 

Debentures” means, collectively, the unsecured debentures issued on September 30, 2020, by Parent (formerly known as Wolverine Partners Corp.), to each of 1110864 Ontario Inc., The Linton Family Trust and Eastwood Capital Corp.

 

Debtor Relief Laws” shall mean the Bankruptcy Code, the BIA, the CCAA and all other liquidation, bankruptcy, assignment for the benefit of creditors, conservatorship, moratorium, receivership, insolvency, rearrangement, reorganization, or similar debtor relief laws of the United States of America or other applicable jurisdictions in effect from time to time.

 

Default” shall mean any event, act or condition that with notice or lapse of time, or both, would constitute an Event of Default.

 

Default Rate” shall mean a rate per annum equal to the sum of (a) the Interest Rate plus (b)

7.50%.

 

Defaulting Lender” shall mean any Lender that: (a) has failed, within two Business Days of

the date required to be funded or paid, to (i) fund any portion of its Commitment, (ii) pay over to either Agent or any Lender any other amount required to be paid by it hereunder, unless, in the case of clause

(i) above, such Lender notifies Administrative Agent in writing that such failure is the result of such Lender’s good faith determination that a condition precedent to funding (specifically identified and including a particular Default or Event of Default, if any) has not been satisfied; (b) has notified Parent or Administrative Agent in writing, or has made a public statement to the effect, that it does not intend or expect to comply with any of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Lender’s good faith determination that a condition precedent (specifically identified and including a particular Default or Event of Default, if any) to funding a Loan under this Agreement cannot be satisfied) or generally under other agreements in which it commits to extend credit; (c) has failed, within two Business Days after request by Administrative Agent, acting in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations (and is financially able to meet such obligations) to fund prospective Loans under this Agreement, provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon Administrative Agent’s receipt of such certification in form and substance satisfactory to Administrative Agent or (d) has become the subject of an Insolvency Event.

 

Designated Jurisdiction” shall mean any country or territory to the extent that such country or territory is the subject of any Sanction.

 

 

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Determination Period” shall have the meaning set forth in Section 8.01(l).

 

Disposition” shall mean, with respect to any Person, any sale, transfer, lease, contribution or other conveyance (including by way of merger or amalgamation) of, or the granting of options, warrants or other rights to, any of such Person’s or their respective Subsidiaries’ assets (including Capital Stock of Subsidiaries) to any other Person in a single transaction or series of transactions.

 

Disqualified Capital Stock” shall mean any Capital Stock that, by its terms (or by the terms of any security or other Capital Stock into which it is convertible or for which it is exchangeable) or upon the happening of any event or condition, (a) matures or is mandatorily redeemable (other than solely for Qualified Capital Stock after the Secured Parties are paid in full), pursuant to a sinking fund obligation or otherwise, (b) is redeemable at the option of the holder thereof (other than solely for Qualified Capital Stock or in connection with a Change of Control or Disposition of assets after the Secured Parties are paid in full), in whole or in part, (c) provides for the scheduled payment of dividends in cash or (d) is or becomes convertible into or exchangeable for Indebtedness or any other Capital Stock that would constitute Disqualified Capital Stock, in each case, prior to the date that is 180 days after the Maturity Date; provided that if such Capital Stock is issued pursuant to a plan for the benefit of employees of Parent or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Capital Stock solely because it may be required to be repurchased by Parent in order to satisfy applicable statutory or regulatory obligations.

 

Disqualified Lenders” shall mean (a) such Persons that have been designated in writing to Administrative Agent by Parent as a competitor on or prior to the Closing Date, and each such designation of such Person is reasonable, (b) competitors of Parent or any other Credit Party that have been designated in writing to Administrative Agent from time to time by Parent after the Closing Date not less than five Business Days prior to the date such designation will be effective, and each such designation of such Person as a competitor is reasonable, and (c) any of their Affiliates (other than Affiliates that are bona fide debt or private equity funds or fixed income investors) that are designated as a competitor in writing from time to time to Administrative Agent by Parent, and each such designation of such Person as a competitor is reasonable; provided that no such updates to the list of such designated Persons shall be deemed to retroactively disqualify any Person that has previously acquired an assignment or participation interest in respect of the Loans from continuing to hold or vote such previously acquired assignments and participations on the terms set forth herein for Lenders that are not Disqualified Lenders (it being understood and agreed that such prohibitions with respect to Disqualified Lenders shall apply only to any potential future assignments or participations to any such parties). The list of Disqualified Lenders shall be maintained with Administrative Agent and may be communicated to a Lender upon request to Administrative Agent.

 

Dollars” and “$” shall mean dollars in lawful currency of the United States.

 

Environmental Claims” shall mean any and all administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigations (other than internal reports prepared by the Credit Parties (a) in the ordinary course of such Person’s business or (b) as required in connection with a financing transaction or an acquisition or disposition of real estate) or proceedings relating to any Environmental Law or any permit issued, or any approval given, under any such Environmental Law (collectively, “Claims”), including (i) any and all Claims by Governmental Authorities for enforcement, cleanup, removal, response, remedial or other actions or damages pursuant to any applicable Environmental Law and (ii) any and all Claims by any third party seeking damages, contribution, indemnification, cost recovery, compensation or injunctive relief resulting from the Release or threatened Release of Hazardous Materials or arising from alleged injury

 

 

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or threat of injury to health or safety (to the extent relating to the exposure to Hazardous Materials) or the environment.

 

Environmental Law” shall mean any applicable federal, state, provincial, foreign or local statute, law, rule, regulation, ordinance, code and rule of common law now or hereafter in effect, and any binding judicial or administrative interpretation thereof, including any binding judicial or administrative order, consent decree or judgment, relating to the protection of the environment or human health or, to the extent relating to exposure to Hazardous Materials, safety.

 

Environmental Permit” shall have the meaning set forth in Section 7.14(a)(ii).

 

ERISA” shall mean the Employee Retirement Income Security Act of 1974, and the regulations promulgated thereunder.

 

Event of Default” shall have the meaning set forth in Section 10.01.

 

Excluded Accounts” shall mean (a) any deposit account that is used solely to fund payroll or employee benefits, so long as (i) such account is a zero balance account and (ii) the applicable Credit Party does not deposit or maintain funds in any such account in excess of amounts necessary to fund current payroll liabilities, payroll taxes or other wage and employee benefit payments, and (b) the Alterna Accounts, so long as the applicable Credit Parties do not deposit or maintain funds in any such accounts in excess of (i) at all times prior to the date that is 60 days after consummation of the TerrAscend Transaction, $4,000,000, individually or in the aggregate, and (ii) on and after the date that is 60 days after consummation of the TerrAscend Transaction, funds not in excess of amounts necessary to fund current Canadian payroll liabilities, Canadian payroll taxes or other Canadian wage and employee benefit payments.

 

Excluded Issuances” shall mean (a) the issuance of Capital Stock (other than Disqualified Capital Stock) by Parent to members of the management, employees or directors of any Credit Party,

(b) the issuance of Capital Stock of Parent (other than Disqualified Capital Stock) upon the exercise of any warrants issued by Parent on or prior to the Closing Date, (c) the issuance of Capital Stock of Parent in connection with the TerrAscend Transaction and (d) the issuance of Capital Stock of Parent (other than Disqualified Capital Stock) in an aggregate amount of up to $10,000,000, the proceeds of which are used solely by the Credit Parties (i) to finance the purchase of Capital Expenditures, (ii) to finance Permitted Acquisitions, or (iii) for general working capital needs, in each case, so long as such issuance does not result in a Change of Control.

 

Excluded Subsidiary” shall mean, (a) Mayde, so long as Mayde has no assets, no Indebtedness and no operations and, (b) after consummation of the TerrAscend Transaction and after giving effect to the transactions described in Section 8.21, the Cookies Subsidiaries and (c) any Excluded TerrAscend Subsidiary.

 

Excluded Taxes” shall mean any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient: (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment (other than pursuant to an

 

 

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assignment request by Borrowers under Section 12.06) or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 4.04, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office, (c) Taxes attributable to such Recipient’s failure to comply with Section 4.04(f) and (d) any U.S. federal withholding Taxes imposed under FATCA.

 

Excluded TerrAscend Subsidiary” shall mean TerrAscend USA and its direct or indirect Subsidiaries (other than WDB Holding and its Subsidiaries).

 

Executive Order” shall have the meaning set forth in Section 7.28.

 

Extraordinary Receipts” shall mean any cash received by or paid to or for the account of any Consolidated Company not in the ordinary course of business, including: (a) proceeds of judgments, proceeds of settlements or other consideration of any kind in connection with any cause of action to the extent not used to pay any corresponding cause of action or to reimburse a Consolidated Company for amounts previously expended, (b) indemnification payments received by any Consolidated Company to the extent not used or anticipated to be used to pay any corresponding liability or reimburse such Consolidated Company for the payment of any such liability, (c) any purchase price adjustment (other than a working capital adjustment) received in connection with any purchase agreements, (d) tax refunds, and (e) pension plan reversions, net of Taxes paid or payable with respect to such amounts.

 

FATCA” shall mean Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future Treasury Regulations thereunder or official interpretations thereof, any agreements entered into pursuant to current Section 1471(b)(1) of the Code (or any amended or successor version described above), and any intergovernmental agreements (together with any Applicable Laws implementing such agreements) implementing the foregoing.

 

Financial Performance Covenants” shall mean the covenants set forth in Section 9.14.

 

Financial Reporting Companies” shall mean, collectively, Credit Parties and all of their Subsidiaries that are Credit Parties, excluding, for the avoidance of doubt, the Excluded TerrAscend Subsidiaries.

 

First Amendment Date” shall mean August 10, 2022.

 

Foreign Lender” shall mean a Lender that is resident or organized under the laws of a jurisdiction other than that in which a Borrower is resident for tax purposes.

 

GAAP” shall mean generally accepted accounting principles in the United States or Canada, as applicable, in effect from time to time.

 

Gage Innovations” shall have the meaning set forth in the Preamble.

 

Governmental Authority” shall mean the government of the United States, Canada, any foreign country or any multinational or supranational authority, or any state, commonwealth, protectorate or political subdivision thereof, and any entity, body or authority exercising executive, legislative, taxing, judicial, regulatory or administrative functions of or pertaining to government,

 

 

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including the Pension Benefit Guaranty Corporation, Health Canada and other administrative bodies or quasi-governmental entities established to perform the functions of any such agency or authority.

 

Guarantee Obligations” shall mean, as to any Person, any Contingent Liability of such Person or other obligation of such Person guaranteeing or intended to guarantee any Indebtedness of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including any obligation of such Person, whether or not contingent, (a) to purchase any such Indebtedness or any property constituting direct or indirect security therefor, (b) to advance or supply funds (i) for the purchase or payment of any such Indebtedness or (ii) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (c) to purchase property, securities or services primarily for the purpose of assuring the owner of any such Indebtedness of the ability of the primary obligor to make payment of such Indebtedness or (d) otherwise to assure or hold harmless the owner of such Indebtedness against loss in respect thereof; provided that the term “Guarantee Obligations” shall not include endorsements of instruments for deposit or collection in the ordinary course of business and consistent with past practice (unless a departure from past practice coincides with an industry-wide departure from past practice or results from a new technological development or custom) or customary and reasonable indemnity obligations in effect on the Closing Date, entered into in connection with any acquisition or disposition of assets permitted under this Agreement (other than with respect to Indebtedness). The amount of any Guarantee Obligation shall be deemed to be an amount equal to the stated or determinable amount of the Indebtedness in respect of which such Guarantee Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith and reasonable business judgment.

 

Guarantor Obligations” shall have the meaning set forth in Section 6.01(a).

 

Guarantors” shall mean (a) Parent, (b) each direct or indirect Subsidiary of Parent (other than any Excluded Subsidiary) and (c) any other Person that provides a guarantee for the payment and performance of the Obligations pursuant to an agreement reasonably acceptable to Administrative Agent after the Closing Date pursuant to Section 8.09; provided that TerrAscend Guarantors shall not constitute Guarantors hereunder.

 

Hazardous Materials” shall mean (a) any petroleum or petroleum products, radioactive materials, friable asbestos, urea formaldehyde foam insulation, transformers or other equipment that contain dielectric fluid containing regulated levels of polychlorinated biphenyls, and radon gas; (b) any chemicals, materials or substances defined as or included in the definition of “waste”, “sludge”, “hazardous substances”, “hazardous waste”, “hazardous materials”, “extremely hazardous waste”, “restricted hazardous waste”, “toxic substances”, “toxic pollutants”, “contaminants”, or “pollutants”, or words of similar import, under any applicable Environmental Law; and (c) any other chemical, waste, recycled material, material or substance, which is prohibited, limited or regulated by any Environmental Law; provided that cannabis and marijuana are explicitly excluded from the definition of Hazardous Materials, as are any substances or products that would be deemed Hazardous Materials solely because they contain cannabis or marijuana, in each case, to the extent such substances are deemed hazardous solely because the Businesses are unlawful under U.S. Federal Cannabis Law.

 

Hedging Agreement” shall mean (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, futures contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index

 

 

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transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.

 

IFRS” shall mean the International Financial Reporting Standards set forth in the opinions and pronouncements of the Canadian Accounting Standards Board, consistently applied.

 

Indebtedness” shall mean, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with Applicable Accounting Standards:

 

(a)
all indebtedness of such Person for borrowed money and all indebtedness of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;

 

(b)
the maximum amount (after giving effect to any prior drawings or reductions which may have been reimbursed) of all letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds, performance bonds and similar instruments issued or created by or for the account of such Person;

 

(c)
all obligations of such Person to pay the deferred purchase price of property or services, but excluding trade accounts payable in the ordinary course of business (which are not overdue for a period of more than 90 days past the applicable due date thereof);

 

(d)
indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements and mortgage, industrial revenue bond, industrial development bond and similar financings), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;

 

(e)
all Attributable Indebtedness;

 

(f)
all obligations of such Person with respect to the redemption, repayment or other repurchase or payment in respect of any Disqualified Capital Stock;

 

(g)
all obligations of such Person with respect to Hedging Agreements (valued as the termination value thereof computed in accordance with a method approved by the International Swap Dealers Association and agreed to by such Person in the applicable Hedging Agreement, if any);

 

(h)
all obligations of such Person under any sale-and-leaseback transaction; and

 

(i)
all Guarantee Obligations of such Person in respect of any of the foregoing;

 

 

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provided that Indebtedness shall not include (w) prepaid or deferred revenue arising in the ordinary course of business on customary terms, (x) purchase price holdbacks arising in the ordinary course of business and on customary terms in respect of a portion of the purchase price of an asset to satisfy warranties or other unperformed obligations of the seller of such asset, (y) endorsements of checks or drafts arising in the ordinary course of business and consistent with past practice (unless a departure from past practice coincides with an industry-wide departure from past practice or results from a new technological development or custom), and (z) preferred Capital Stock to the extent not constituting Disqualified Capital Stock.

 

For all purposes hereof, the Indebtedness of any Person shall not include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or another entity not disregarded for tax purposes) in which such Person is a general partner or a joint venture (whether partner or member), unless the terms of such Indebtedness provide that such Person is liable therefor. The amount of Indebtedness of any Person for purposes of clause (e) above shall be deemed to be equal to the lesser of (x) the aggregate unpaid amount of such Indebtedness and (y) the fair market value of the property encumbered thereby as determined by such Person in good faith and reasonable business judgment.

 

Indemnified Liabilities” shall have the meaning set forth in Section 12.05.

 

Indemnified Taxes” shall mean (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Credit Party under any Credit Document and (b) to the extent not otherwise described in (a), Other Taxes.

 

Information Certificates” shall mean, collectively, (a) that certain Information Certificate dated as of the Closing Date and executed by Borrowers in favor of Collateral Agent and Lenders and

(b)
any other information or perfection certificate delivered by a Credit Party to Collateral Agent and accepted by Collateral Agent.

 

Insolvency Event” shall mean, with respect to any Person, including any Lender, such Person or such Person’s direct or indirect parent company (a) makes a proposal under the BIA, the CCAA or becomes the subject of a bankruptcy, insolvency or examinership proceeding (including any proceeding under any Insolvency Legislation, any similar law or proceeding seeking the compromise or extinguishment of claims of creditors or the Canada Business Corporations Act), or regulatory restrictions, (b) has had a receiver, interim receiver, receiver manager, monitor, examiner, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business appointed for it or has called a meeting of its creditors,

(c)
admits in writing its inability, or be generally unable, to pay its debts as they become due or cease material operations of its present business, (d) commits an act of bankruptcy or becomes insolvent (such terms having the respective meanings ascribed thereto in the BIA), (e) is adjudicated insolvent or bankrupt by a court of competent jurisdiction, (f) admits the material allegations of a petition or application filed with respect to it in any bankruptcy, reorganization or insolvency proceeding, (g) takes any corporate action for the purpose of effecting any of the foregoing, (h) with respect to a Lender, such Lender is unable to perform hereunder due to the application of Applicable Law, or (i) in the good faith determination of Administrative Agent, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment of a type described in clauses (a) or (b), provided that an Insolvency Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person or such Person’s direct or indirect parent company by a Governmental Authority or instrumentality thereof if, and only if, such ownership interest does not result in or provide such Person with immunity from the jurisdiction of courts within

 

 

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the United States or Canada or from the enforcement of judgments or writs of attachment on its assets or permit such Person (or such Governmental Authority or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person.

 

Insolvency Legislation” shall mean legislation in any applicable jurisdiction relating to reorganization, arrangement, compromise or re adjustment of debt, dissolution or winding up, or any similar legislation, and specifically includes the BIA, the CCAA, the Winding Up and Restructuring Act (Canada), the Bankruptcy Code and any similar legislation under Applicable Law.

 

Intercompany Indebtedness” shall have the meaning set forth in Section 12.22.

 

Interest Rate” shall mean a per annum rate equal to the greater of (a) the Prime Rate plus 7.00% and (b) 10.25%.

 

Investment” shall mean, relative to any Person: (a) any loan, advance or extension of credit made by such Person to any other Person, including the purchase by such first Person of any bonds, notes, debentures or other debt securities of any such other Person; (b) the incurrence of Contingent Liabilities for the benefit of any other Person; (c) acquisition of any Capital Stock or other investment held by such Person in any other Person; and (d) any contribution made by such Person to any other Person. The amount of any Investment at any time shall be the original principal or capital amount thereof less all returns of principal or equity thereon made on or before such time and shall, if made by the transfer or exchange of property other than cash, be deemed to have been made in an original principal or capital amount equal to the fair market value of such property at the time of such Investment.

 

IP Rights” shall have the meaning set forth in Section 7.13.

 

ITA” shall mean the Income Tax Act (Canada) as amended from time to time.

 

Koach Landlord Agreement” means that certain landlord agreement executed by each of the Koach Landlords in favor of Collateral Agent, pursuant to which the Koach Landlords agree to permit Collateral Agent and Lenders to cure breaches or defaults occurring under the Koach Leases.

 

Koach Landlords” shall mean, collectively, Strategic Koach Properties LLC, a Delaware limited liability company, Koach GR I LLC, a Michigan limited liability company, and Koach Lansing I LLC, a Michigan limited liability company.

 

Koach Leases” shall mean, collectively, (a) that certain Lease Agreement between Strategic Koach Properties LLC, a Delaware limited liability company, and Spartan Properties dated October, 23, 2020, with respect to that certain premises located at 1551 Academy Street, Ferndale, Michigan 48220,

(b) that certain Lease Agreement between Strategic Koach GR I LLC, a Michigan limited liability company, and Spartan Properties dated October 28, 2020, with respect to that certain premises located at 3075 Peregrine Drive NE, Grand Rapids, Michigan 49505, (c) that certain Lease Agreement between Strategic Koach Properties LLC, a Delaware limited liability company, and Spartan Properties dated August 26, 2020, with respect to that certain premises located at 2712 Portage Road, Kalamazoo, Michigan 49001, (d) that certain Lease Agreement between Strategic Koach Properties LLC, a Delaware limited liability company, and Spartan Properties dated August 26, 2020, with respect to that certain premises located at 1025 Hannah Ave., Traverse City, Michigan 49686, (e) that certain Lease Agreement between Strategic Koach Properties LLC, a Delaware limited liability company, and Spartan Properties dated August 26, 2020, with respect to that certain premises located at 3 State Park Drive, Bay City, Michigan 48706 and (f) that certain Lease Agreement between Koach Lansing I LLC, a

 

 

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Michigan limited liability company, and Spartan Properties dated June 26, 2020, with respect to that certain premises located at 3425 S. Martin Luther King Jr. Blvd., Lansing, Michigan 48910.

 

Koach Reserve Amount” shall have the meaning set forth in Section 2.04(c).

 

Land Contracts” shall mean, collectively, that certain (a) Land Contract dated as of April 9, 2021, by and between SCL Transmission Properties, LLC and Spartan Properties, with respect to Real Property located at 2706 Portage Road, Kalamazoo, Michigan 49001, as evidenced by the Memorandum of Land Contract recorded in the Kalamazoo County Clerk’s Office as Instrument No. 2021-015947, (b) Land Contract dated as of April 13, 2021, by and between Jefferson Property Holdings, LLC, and Spartan Properties, with respect to Real Property located at 11397 Jefferson Avenue, 7 Orchard Street and 9 Orchard Street, River Rouge, Michigan 48218, as evidenced by the Memorandum of Land Contract recorded in the Office of the Register of Deeds of Wayne County, Michigan on April 21, 2021 as Instrument No. 2021196224, (c) Land Contract dated as of March 25, 2021, by and between Production Holdings, LLC, and Spartan Properties, with respect to Real Property located at 41225-41239 Production Drive, Harrison Township, Michigan 48045, (d) Land Contract dated as of July 20, 2021, by and between 4174 W. Pierson Rd., LLC and Spartan Properties, with respect to Real Property located at 4174 W. Pierson Road, Flint, MI 48504 and (e) Land Contract dated June 10, 2021, between Ann Arbor Rd. LLC and Spartan Properties, with respect to Real Property located at 6007 Ann Arbor Road, Jackson, Michigan 49201.

 

Land Contracts Reserve Amount” shall have the meaning set forth in Section 2.04(d).

 

Land Contracts Reserve Amount Excess” shall mean the Land Contracts Reserve Amount less the Land Contracts Reserve Disbursement.

 

Land Contracts Reserve Disbursement” shall mean (i) with respect to the Land Contract Transactions, the lesser of (x) the aggregate amount of Indebtedness paid or otherwise extinguished under the Land Contracts in connection with consummation of the Land Contract Transactions and (y) the Land Contracts Reserve Amount, and (ii) with respect to the New Property Purchase Transactions, the Land Contracts Reserve Amount.

 

Land Contracts Reserve Release Conditions” shall mean the satisfaction of each of the following on or prior to December 30, 2021 (or such later date to which Administrative Agent agrees in its discretion):

 

(a)
before and after giving effect to a disbursement of the Land Contracts Reserve Disbursement to Borrowers, no Default or Event of Default shall have occurred and be continuing;

 

(b)
before and after giving effect to a disbursement of the Land Contracts Reserve Disbursement to Borrowers, all representations and warranties of the Credit Parties set forth in this Agreement and the other Credit Documents are true and correct in all material respects (other than such representations and warranties that are already qualified by materiality, Material Adverse Effect or similar language, in which case such representations and warranties shall be true and correct in all respects) on the date of such disbursement; and

 

(c)
the Credit Parties have delivered to Agents, in form and substance reasonably satisfactory to Agents, evidence confirming that the Credit Parties have:

 

 

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(i)
paid in full or otherwise extinguished the outstanding balances owed under certain Land Contracts, such that title to the subject Real Property shall have become fully vested in a Credit Party, free and clear of all Liens (such transactions, collectively, the “Land Contract Transactions”), and the applicable Credit Party shall have recorded, or arrangements for recording reasonably satisfactory to Collateral Agent have been made for, a Mortgage and otherwise complied with the terms of Section 8.11 with respect to such Real Property; or

 

(ii)
purchased or otherwise acquired fee simple interests in Real Property that is not subject to a Land Contract on the Closing Date, free and clear of all Liens (such purchases or acquisitions, the “New Property Purchase Transactions”), with an aggregate fair market value, as determined by Agents in their reasonable discretion, equal to or in excess of the Land Contracts Reserve Amount and the applicable Credit Party shall have recorded, or arrangements for recording reasonably satisfactory to Collateral Agent have been made for, a Mortgage and otherwise complied with the terms of Section

8.11 with respect to such Real Property.

 

Land Contracts Trust Account” shall mean a trust account to hold the Land Contracts Reserve Amount.

 

Lender” and “Lenders” shall have the meanings set forth in the Preamble.

 

Licensing Contracts” shall mean the contracts set forth on Schedule 8.17 among a Credit Party, on the one hand, and a Licensing Entity, on the other hand.

 

Licensing Entity” shall mean AEY Holdings, LLC, a Michigan limited liability company, AEY Capital, LLC, a Michigan limited liability company, AEY Thrive, LLC, a Michigan limited liability company, 3 State Park, LLC, a Michigan limited liability company, Thrive Enterprises LLC, a Michigan limited liability company, RKD Ventures LLC, a Michigan limited liability company, the Cookies Subsidiaries and any other Affiliate of a Credit Party or, after giving effect to the TerrAscend Transaction, any Affiliate of TerrAscend engaged in a Cannabis Business, in each case, that enters into an agreement with a Credit Party with respect to such Credit Party’s Support Business.

 

Lien” shall mean any mortgage, pledge, security interest, hypothecation, charge, claim, assignment for collateral purposes, lien (statutory or other) or similar encumbrance, and any easement, right-of-way, license, restriction (including zoning restrictions), defect, exception or irregularity in title or similar charge or encumbrance (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement or any lease in the nature thereof); provided that in no event shall an operating lease entered into in the ordinary course of business and on customary terms or any precautionary UCC or PPSA filings made pursuant thereto by an applicable lessor or lessee, be deemed to be a Lien.

 

Liquidity” shall mean, for the Credit Parties, the result of (a) the aggregate amount of unrestricted cash and Cash Equivalents, in each case, which is held in a deposit account set forth on Schedule 7.25 and subject to a Control Agreement, other than ‎those deposit accounts which are Excluded Accounts, minus (b) all un-processed outstanding checks written by Borrowers.

 

Loans” shall have the meaning set forth in Section 2.01.

 

 

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Make-Whole Amount” shall mean, with respect to any prepayment or repayment of the Loans on any day, whether pursuant to Section 4.01(a)¸ certain mandatory prepayments as set forth in or Sec tion 4.02 or repayment, in connection with an acceleration of the Loans prior to October 22, 2022, (a) if such prepayment or repayment occurs after May 22, 2022 but on or prior to September 22, 2022, on the Maturity Date or otherwise, an amount equal to 2.00% of the aggregate amount of the Loans being prepaid or repaid, or (b) if such prepayment or repayment occurs after September 22, 2022, but on or prior to October 22, 2022, an amount equal to 1.00% of the aggregate amount of the Loans being prepaid or repaid.

 

Material Adverse Effect” shall mean a material adverse effect on (a) the business, assets, liabilities (actual or contingent), operations, condition (financial or otherwise), results of operations or performance of Parent and its Subsidiaries taken as a whole, (b) the validity or enforceability of this Agreement, any other Credit Document, (c) the ability of any Credit Party to perform its obligations under any Credit Document to which it is a party, (d) the rights or remedies of the Secured Parties or the Lenders hereunder or thereunder, (e) the priority of any Liens granted to Collateral Agent in or to any Collateral (other than as a result of voluntary and intentional discharge of the Lien by Collateral Agent) or (f) the Regulatory Licenses.

 

Material Contracts” shall mean (a) any agreement evidencing, securing or pertaining to any Indebtedness, or any guaranty thereof, in a principal amount exceeding $500,000, (b) any real property lease where annual rent exceeds $500,000, (c) any operating lease where annual rentals exceed

$500,000, (d) any agreement (other than the agreements set forth in the foregoing clauses (a) through (c)) which involves aggregate consideration payable to or by such Person or such Subsidiary of

$500,000 or more on an annual basis, (e) any other agreement the termination of which (without contemporaneous replacement of substantially equivalent value) could reasonably be expected to have a Material Adverse Effect, (f) each Material Regulatory License and (g) each other Regulatory License the termination of which (without contemporaneous replacement of substantially equivalent value) could reasonably be expected to have a Material Adverse Effect.

 

Material Regulatory License” shall mean any Regulatory License of a Consolidated CompanyCredit Party or a Licensing Entity designated on Schedule 7.19 by Borrowers as material, as such Schedule may be supplemented or updated in accordance with Section 8.01(i)(viii).

 

Maturity Date” shall mean November 30, 2022.

 

Mayde” means Mayde US LLC, a Michigan limited liability company.

 

Michigan Real Property” shall mean, collectively, the Real Property now owned or hereafter acquired by any Credit Party, and located in Michigan.

 

Moody’ s” shall mean Moody’s Investors Service, Inc. or any successor by merger or consolidation to its business.

 

Mortgage” shall mean each mortgage, deed of trust, or deed to secure debt, trust deed or other security document granted by any applicable Credit Party to Collateral Agent for the benefit of the Secured Parties in respect of any Real Property owned or leased by such Credit Party, in such form as agreed between such Credit Party and Collateral Agent.

 

Net Cash Proceeds” shall mean, as applicable, (a) with respect to any Disposition by a Person, cash and cash equivalent proceeds received by or for such Person’s account, net of (i) fees, costs and expenses paid to third parties (other than Affiliates) and relating to such Disposition, (ii) the

 

 

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amount of any Indebtedness secured by any Permitted Lien on any asset (other than Indebtedness assumed by the purchaser of such asset) that is required to be, and is, repaid in connection with such Disposition, (iii) net income taxes to be paid in connection with such Disposition and (iv) sale, use or other transactional taxes paid or payable by such Person as a result of such Disposition, (b) with respect to any condemnation or taking of such assets by eminent domain proceedings of a Person, cash and cash equivalent proceeds received by or for such Person’s account (whether as a result of payments made under any applicable insurance policy therefor or in connection with condemnation proceedings or otherwise), net of (i) fees, costs and expenses paid to third parties (other than Affiliates) in connection with the collection of such proceeds, awards or other payments and (ii) taxes paid or payable by such Person as a result of such casualty, condemnation or taking, and (c) with respect to any offering of Capital Stock of a Person or the issuance of any Indebtedness by a Person, cash and cash equivalent proceeds received by or for such Person’s account, net of (i) legal, underwriting, and other fees, costs and expenses paid to third parties (other than Affiliates) and incurred as a result thereof, (ii) transfer taxes paid by such Person or such Subsidiary in connection therewith and (iii) net income taxes to be paid in connection therewith.

 

Non-Defaulting Lender” shall mean, at any time, any Lender holding a Commitment which is not a Defaulting Lender.

 

Note” shall mean a promissory note (or amended and restated promissory note) substantially in the form of Exhibit D.

 

Notice of Control” shall have the meaning set forth in Section 8.13(b).

 

Obligations” shall mean (a) with respect to each Borrower, all obligations (monetary or otherwise, whether absolute or contingent, matured or unmatured) of such Borrower arising under or in connection with any Credit Document, including all original issue discount, fees, costs, expenses (including fees, costs and expenses incurred during the pendency of any proceeding of the type described in Section 10.01(h), whether or not allowed or allowable in such proceeding) and premiums payable under any Credit Document, the principal of and interest (including interest accruing during the pendency of any proceeding of the type described in Section 10.01(h), whether or not allowed or allowable in such proceeding) on the Loans, all indemnification obligations and all obligations to pay or reimburse any Secured Party for paying any costs or expenses under any Credit Document, and all other fees to be paid to any Agent or Arranger, or (b) with respect to each Credit Party other than Borrowers, all obligations (monetary or otherwise, whether absolute or contingent, matured or unmatured) of such Credit Party arising under or in connection with any Credit Document, all indemnification obligations and all obligations to pay or reimburse any Secured Party for paying any costs or expenses under any Credit Document.

 

OFAC” shall mean the Office of Foreign Assets Control of the United States Department of the Treasury.

 

OID” shall have the meaning set forth in Section 12.24.

 

Organization Documents” shall mean, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate, constitution or articles of formation or organization and operating agreement (if relevant); and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and, if applicable, any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization

 

 

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with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

 

OSC” shall mean the Ontario Securities Commission, or any Governmental Authority succeeding to any of its principal functions.

 

Other Connection Taxes” shall mean, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Credit Document, or sold or assigned an interest in any Loan or Credit Document).

 

Other Taxes” shall mean all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Credit Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 12.06).

 

Parent” shall have the meaning set forth in the Preamble.

 

Participant” shall have the meaning set forth in Section 12.06(c).

 

Participant Register” shall have the meaning set forth in Section 12.06(c)(ii).

 

Patent Security Agreements” shall mean any patent security agreements entered into by a Credit Party in favor of Collateral Agent (as required by the Agreement or any other Credit Document), in each case, as the same may be amended, restated, supplemented or otherwise modified from time to time.

 

Patriot Act” shall mean the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), and the Proceeds of Crime (money laundering) and Terrorist Financing Act (Canada).

 

Payment Date” shall mean the last Business Day of each calendar month.

 

Permits” shall mean, with respect to any Person, any permit, approval, authorization, license, registration, certificate, concession, grant, franchise, variance or permission from, and any other Contractual Obligations with, any Governmental Authority, in each case whether or not having the force of law and applicable to or binding upon such Person or any of its property or operations or to which such Person or any of its property or operations is subject.

 

Permitted Acquisition” shall mean an acquisition of Capital Stock or assets by any Credit Party in a transaction or series of transactions:

 

(I)
that satisfies each of the following requirements:

 

(a)
such acquisition is not a hostile or contested acquisition;

 

 

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(b)
the business acquired in connection with such acquisition is not engaged in any line of business other than the Support Business;

 

(c)
Parent shall have notified Administrative Agent not less than 10 days (or such shorter time period as may be agreed to by Administrative Agent) prior to any such acquisition;

 

(d)
if such acquisition involves a merger or a consolidation involving a Credit Party, such Credit Party shall be the surviving entity;

 

(e)
if a new Subsidiary is formed or acquired as a result of or in connection with such acquisition, Borrowers shall have complied with the requirements of Sections 8.09 and 8.11 in connection therewith;

 

(f)
(i) no Default or Event of Default shall exist, and (ii) the Credit Parties shall be in compliance with the Financial Performance Covenants recomputed as of the end of the Applicable Fiscal Period most recently ended for which financial statements have been delivered pursuant to Section 8.01(a) or 8.01(b) after giving effect to such acquisition on a pro forma basis, and Parent shall have delivered to Administrative Agent a Compliance Certificate evidencing such compliance;

 

(g)
all transactions related to such acquisition shall be consummated in accordance with Applicable Law;

 

(h)
such acquisition would not reasonably be expected to cause a Material Adverse

Effect;

 

(i)
Parent shall have delivered any additional information or other materials relating

to such acquisition, including financial statements of the acquired business and the documents evidencing such acquisition (each in form and substance reasonably satisfactory to Administrative Agent) that have been reasonably requested by Administrative Agent at least three Business Days prior to the closing date of such acquisition; and

 

(j)
after giving effect to such acquisition, the cash amount invested by the Credit Parties for all such acquisitions pursuant to clause (I) of this definition does not exceed $8,000,000; or

 

(II)
that is listed on Schedule P-1.

 

Permitted Capital Lease Debt‎” shall mean Indebtedness incurred under Section 9.01(d) in an aggregate outstanding principal amount not to exceed $3,500,000 at any time.

 

Permitted Liens” shall have the meaning set forth in Section 9.02.

 

Person” shall mean any individual, partnership, joint venture, firm, corporation, limited liability company, unlimited liability company, association, trust or other enterprise or any Governmental Authority.

 

Platform” shall have the meaning set forth in Section 12.23.

 

PPSA” shall mean the Personal Property Security Act (Ontario), including the regulations thereto; provided, that, if perfection or the effect of perfection or non-perfection or the priority of any Lien created hereunder or under any other Credit Document on the Collateral is governed by the personal property security legislation or other applicable legislation with respect to personal property

 

 

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security in effect in a jurisdiction in Canada other than the Province of Ontario, “PPSA” shall mean the Personal Property Security Act or such other applicable legislation (including the Civil Code (Quebec)) in effect from time to time in such other jurisdiction in Canada for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.

 

Primary Officers” shall mean Fabian Monaco, David Watza, and Mike Finos, each in their capacities as Authorized Officers of the applicable Credit Parties.

 

Prime Rate” shall mean, for any day, a floating rate equal to the rate publicly quoted from time to time in The Wall Street Journal’s “Bonds, Rates & Yields” table as the “prime rate”.

 

Promotional Rights” shall have the meaning set forth in Section 12.16. “Public Lender” shall have the meaning set forth in Section 12.23.

Qualified Capital Stock” shall mean any Capital Stock that is not Disqualified Capital Stock.

 

Real Estate Settlement” shall mean the settlement of the litigation matter involving Shahin Haddad; et al v. Spartan Partners Corporation; et al, including all claims and counterclaims relating thereto, for an amount not to exceed $5,000,000 in exchange for a Credit Party’s purchase of Real Property located at 6030 E. Eight Mile Road, Detroit, Michigan.

 

Real Property” shall mean, with respect to any Person, all right, title and interest of such Person (including any leasehold estate) in and to a parcel of real property owned, leased or operated by such Person together with, in each case, all improvements and appurtenant fixtures, equipment, personal property, easements and other property and rights incidental to the ownership, lease or operation thereof.

 

Recipient” shall mean (a) Administrative Agent and (b) any Lender.

 

“ Refinancing Indebtedness” shall mean refinancings, renewals, or extensions of Indebtedness so long as:

 

(a)
such refinancings, renewals, or extensions do not result in an increase in the principal amount of the Indebtedness so refinanced, renewed, or extended, other than by the amount of premiums and compounded interest paid thereon and the reasonable and customary fees and expenses incurred in connection therewith and by the amount of unfunded commitments with respect thereto,

 

(b)
such refinancings, renewals, or extensions do not result in a shortening of the average weighted maturity (measured as of the refinancing, renewal, or extension) of the Indebtedness so refinanced, renewed, or extended,

 

(c)
if the Indebtedness that is refinanced, renewed, or extended was subordinated in right of payment to the Obligations, then the terms and conditions of the refinancing, renewal, or extension must include subordination terms and conditions that are at least as favorable to the Lenders as those that were applicable to the refinanced, renewed, or extended Indebtedness, and

 

(d)
the Indebtedness that is refinanced, renewed, or extended is not recourse to any Person that is liable on account of the Obligations other than those Persons which were obligated with respect to the Indebtedness that was refinanced, renewed, or extended.

 

 

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Refinancing Proposal” shall have the meaning set forth in Section 8.01(l). Register” shall have the meaning set forth in Section 12.06(b)(iii).

Regulation D” shall mean Regulation D of the Board as from time to time in effect and any successor to all or a portion thereof establishing reserve requirements.

 

Regulation U” shall mean Regulation U of the Board as from time to time in effect and any successor to all or a portion thereof establishing margin requirements.

 

Regulation X” shall mean Regulation X of the Board as from time to time in effect and any successor to all or a portion thereof establishing margin requirements.

 

Regulatory Licenses” shall mean each Permit required to be held by any Consolidated CompanyCredit Party or Licensing Entity, or that any Consolidated CompanyCredit Party or Licensing Entity must have rights to use, to conduct its Business in compliance with Applicable Laws.

 

Related Parties” shall mean, with respect to any specified Person, such Person’s Affiliates and the directors, officers, employees, agents, trustees, advisors of such Person and any Person that possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of such Person, whether through the ability to exercise voting power, by contract or otherwise.

 

Release” shall mean any spilling, leaking, seepage, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, depositing, disposing, emanating or migrating of Hazardous Materials in the environment.

 

Replacement Lender” shall have the meaning set forth in Section 2.07(d).

 

Reporting Jurisdictions” shall mean (a) all of the jurisdictions in Canada in which Parent is a “reporting issuer”, including, as of the date hereof, the Province of Ontario, and (b) if Parent’s Capital Stock is listed and posting for trading on the New York Stock Exchange or Nasdaq, the applicable reporting jurisdictions in the United States.

 

Required Lenders” shall mean, at any time when there is more than one Lender which is not a Defaulting Lender, at least two Lenders which are not Defaulting Lenders having Loans and unused Commitments representing greater than 50.00% of the sum of the aggregate Loans and unused Commitments at such time, or at any time when there is only one Lender which is not a Defaulting Lender, such Lender.

 

Restricted Cannabis Activities” shall mean, subject to Section 13.01, in connection with the

cultivation, distribution, sale and ossession of cannabis and related products: (a) any activity that is

not permitted under applicable .S. State Cannabis Laws or Canadian Cannabis Laws; (b) knowingly

distributing and selling cannabis and related products to minors that is not approved under a U.S. State Cannabis Law or a Canadian Cannabis Law; (c) payments to criminal ‎enterprises, gangs, cartels and Persons subject to Sanctions in violation of Applicable Law; (d) non-compliance with Anti-Terrorism Laws and other Applicable Law relating to money-laundering; (e) diversion of cannabis and related

roducts from states where it is legal under U.S. State Cannabis Law to other states or to Canada in

violation of Applicable Law, or the import of cannabis and related products from Canada in violation of Applicable Law; (f) the commission, or making ‎threats, of violence and the use of firearms in violation

of Applicable Law; (g) growing cannabis and r‎ elated products on federal lands in violation of

 

 

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Applicable Law; and (h) directly or indirectly, aiding, abetting or otherwise enterprise with any Person or Persons in such activities.‎

 

 

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articipating in a common

 

 

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Restricted Debt” shall mean (a) the Indebtedness of any Credit Party existing on the ClosingFirst Amendment Date and listed on Schedule 7.24, and (b) any other Indebtedness the repayment of which is expressly subordinated and made junior to the payment in full of the Obligations and contains terms and conditions (including terms relating to interest, fees, repayment and subordination) satisfactory to Agents.

 

Restricted Payment” shall mean, with respect to any Person, (a) the declaration or payment of any dividend on, or the making of any payment or distribution on account of, or setting apart assets for a sinking or other analogous fund for the purchase, redemption, defeasance, retirement or other acquisition of, any class of Capital Stock of such Person or any warrants or options to purchase any such Capital Stock, whether now or hereafter outstanding, or the making of any other distribution in respect thereof, either directly or indirectly, whether in cash or property, and (b) any payment of a management fee (or other fee of a similar nature) or any reimbursable costs and expenses related thereto by such Person to any holder of its Capital Stock or any Affiliate thereof.

 

RI SPE” shall have the meaning set forth in the Preamble. “Rivers” shall have the meaning set forth in the Preamble.

Rivers South” shall have the meaning set forth in the Preamble. ROFO Deadline” shall have the meaning set forth in Section 8.01(l).

S& P” shall mean Standard & Poor’s Ratings Services or any successor by merger or consolidation to its business.

 

Sales Tracking Software” shall mean any “seed-to-sale” tracking, point-of-sale, or other inventory or sales reporting software used by the Credit Parties.

 

Sanction(s)” shall mean all economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by OFAC or the U.S. Department of State, (b) the Canadian government, or (c) the United Nations Security Council, the European Union, any European Union member state or Her Majesty’s Treasury of the United Kingdom or other relevant sanctions authority.

 

SEC” shall mean the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

 

Secured Parties” shall mean, collectively, (a) the Lenders, (b) Agents, (c) the beneficiaries of each indemnification obligation undertaken by any Credit Party under the Credit Documents, (d) any successors, endorsees, transferees and assigns of each of the foregoing to the extent any such transfer or assign is permitted by the terms of this Agreement and (e) any other holder of any Obligation or Secured Obligation (as defined in any applicable Security Document).

 

Security Agreements” shall mean, collectively, the U.S. Security Agreement and the Canadian Security Agreement.

 

 

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Security Documents” shall mean, collectively, as applicable, the Security Agreements, each Collateral Assignment of Lease, the Collateral Access Agreements, the Control Agreements, the Patent Security Agreements, the Trademark Security Agreements, the Copyright Security Agreements, each Collateral Assignment of Licensing Contracts, each Mortgage, each Assignment of Leases and Rents, the TerrAscend Pledge Agreement and each other instrument or document executed and delivered pursuant to this Agreement or any of the Security Documents to guarantee or secure any of the Obligations.

 

SEDAR” shall mean the Canadian Securities Administrators’ System for Electronic Document Analysis and Retrieval.

 

Solvency Certificate” shall mean a solvency certificate, duly executed and delivered by an Authorized Officer of Parent who is the chief financial officer or such other senior officer who is in charge of financial matters for Parent to Administrative Agent, in form and substance reasonably satisfactory to Administrative Agent.

 

Solvent” shall mean:

 

(a)
with respect to any U.S. Credit Party, at any date, that (i) the sum of such Person’s debt (including Contingent Liabilities) does not exceed the present fair saleable value of such Person’s present assets (which, for this purpose, shall include rights of contribution in respect of obligations for which such Person has provided a guarantee), (ii) such Person’s capital is not unreasonably small in relation to its business as contemplated on such date, (iii) such Person has not incurred and does not intend to incur debts including current obligations beyond its ability to generally pay such debts as they become due (whether at maturity or otherwise), and (iv) such Person is “solvent” or is not “insolvent”, as applicable, within the meaning given that term and similar terms under Applicable Laws relating to fraudulent and other avoidable transfers and conveyances. For purposes of this definition, the amount of any Contingent Liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability (irrespective of whether such contingent liabilities meet the criteria for accrual under Statement of Financial Accounting Standard No.

5); and

 

(b)
with respect to any Canadian Credit Party, at any date, that (i) the aggregate property of such Credit Party is sufficient, if disposed of at a fairly conducted sale under legal process, to enable payment of all its obligations, due and accruing due, (ii) the aggregate property of such Credit Party is, at a fair valuation, sufficient to enable payment of all its obligations, due and accruing due, (iii) such Credit Party is able to meet its obligations as they generally become due, (iv) such Credit Party has not ceased paying its current obligations in the ordinary course of business as they generally become due, and (v) such Person is not an “insolvent person”, as such term is defined in the BIA.

 

Spartan” shall have the meaning set forth in the Preamble.

 

Spartan Holdings” shall have the meaning set forth in the Preamble. “Spartan Properties” shall have the meaning set forth in the Preamble. “Spartan Services” shall have the meaning set forth in the Preamble.

Subsidiary” of any Person shall mean and include (a) any corporation more than 50.00% of whose Voting Stock having by the terms thereof power to elect a majority of the directors of such

 

 

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corporation (irrespective of whether or not at the time stock of any class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time owned by such Person directly or indirectly through Subsidiaries and (b) any partnership, limited liability company, association, joint venture or other entity in which such Person directly or indirectly through one or more Subsidiaries has more than (i) a 50.00% equity interest measured by either vote or value at the time or (ii) a 50.00% general partnership interest at the time. Unless otherwise expressly provided, all references herein to a Subsidiary shall mean a Subsidiary of Parent.

 

Support Business” shall mean the business of managing or supporting a Cannabis Business, and all ancillary or complimentary activities related to the foregoing, including owning the Real Property on which any such activity is conducted.

 

Taxes” shall mean all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

 

Termination Date” shall mean the date on which the Loans and the other Obligations (other than Unasserted Contingent Obligations) shall have been paid in full in cash in accordance with the terms of this Agreement.

 

TerrAscend” shall mean TerrAscend Corp., an Ontario corporation.

 

TerrAscend Guaranties” shall mean, collectively, those certain General Continuing Guaranties, each dated as of the First Amendment Date and entered into by a TerrAscend Guarantor in favor of Collateral Agent.

TerrAscend Guarantors” shall mean, collectively, TerrAscend and TerrAscend USA. TerrAscend Letter Agreement” shall mean that certain letter agreement dated on or about the

date hereof among TerrAscend, Parent and Agents, pursuant to which TerrAscend agrees to not, directly or through an Affiliate of TerrAscend, apply for any new marijuana retail Permit in the State of Michigan except through a Licensing Entity.

 

TerrAscend Pledge Agreement” shall mean that certain Pledge Agreement dated as of the First Amendment Date entered into by TerrAscend USA and Collateral Agent with respect to the Capital Stock of WDB Holding.

 

TerrAscend Transaction” shall mean, collectively, the acquisition by TerrAscend of all of the issued and outstanding Capital Stock of Parent pursuant to a court-approved plan of arrangement under the Canada Business Corporations Act, after which Parent shall be a private, wholly-owned Subsidiary of TerrAscend, and the other transactions contemplated by the TerrAscend Transaction Documents, in each case in accordance with the terms of the TerrAscend Transaction Documents.

 

TerrAscend Transaction Documents” shall mean, collectively, (a) that certain Arrangement Agreement dated August 31, 2021 among TerrAscend and Parent and (b) that certain Membership Interest Purchase Agreement dated August 31, 2021 among WDB Holdings MI, Inc.Holding, certain Licensing Entities party thereto, David Malinoski, and Parent, true and complete copies of which have been delivered to the Administrative Agent prior to the date hereof, together with (i) any amendments or modifications thereto prior to the date hereof, copies of which have been delivered to Administrative Agent prior to the date hereof, and (ii) any amendments or modifications thereto on or after the date hereof, copies of which shall be promptly delivered to the Administrative Agent; provided that any such

 

 

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amendments or modifications executed on or after the date hereof shall not materially alter the terms of the TerrAscend Transaction Documents delivered to Administrative Agent prior to the date hereof.

 

TerrAscend USA” shall mean TerrAscend USA, Inc. a Delaware corporation.

 

Total Credit Exposure” shall mean, as of any date of determination (a) with respect to each Lender, (i) prior to the termination of the Commitments, the sum of such Lender’s Commitment plus the outstanding principal amount of such Lender’s Loans or (ii) upon the termination of the Commitments, the outstanding principal amount of such Lender’s Loans and (b) with respect to all Lenders, (i) prior to the termination of the Commitments, the sum of all of the Lenders’ Commitments plus the aggregate outstanding principal amount of all Loans and (ii) upon the termination of the Commitments, the aggregate outstanding principal amount of all Loans.

 

Trademark Security Agreements” shall mean the Trademark Security Agreements dated as of the Closing Date made in favor of Collateral Agent and the Lenders by each applicable Credit Party and any trademark security agreement entered into after the Closing Date (as required by the Agreement or any other Credit Document), in each case, as the same may be amended, restated, supplemented or otherwise modified from time to time.

 

Transactions” shall mean the funding of the Loans pursuant hereto and the use of the proceeds thereof and all other transactions contemplated by or described in the Credit Documents.

 

Treasury Regulations” shall mean the United States Treasury regulations promulgated under the Code.

 

U.S.” and “United States” shall mean the United States of America.

 

U.S. Credit Party” shall mean any Credit Party organized and existing under the laws of the United States or any state or subdivision thereof.

 

U.S. Federal Cannabis Law” shall mean any federal laws of the United States, civil, criminal or otherwise, as such relate, either directly or indirectly, to the cultivation, harvesting, production, distribution, sale and possession of cannabis, marijuana or related substances or products containing or relating to the same, including the prohibition on drug trafficking under 21 U.S.C. § 841(a), et seq., the conspiracy statute under 18 U.S.C. § 846, the bar against aiding and abetting the conduct of an offense under 18 U.S.C. § 2, the bar against misprision of a felony (concealing another’s felonious conduct) under 18 U.S.C. § 4, the bar against being an accessory after the fact to criminal conduct under 18

U.S.C. § 3, and federal money laundering statutes under 18 U.S.C. §§ 1956, 1957, and 1960 and the regulations and rules promulgated under any of the foregoing.

 

U.S. Person” shall mean any person that is a “United States Person” as defined in Section 7701(a)(30) of the Code.

 

“U.S. Security Agreement” shall mean that certain Security Agreement dated as of the Closing Date, among each Credit Party party thereto and Collateral Agent for the benefit of the Secured Parties.

 

U.S. State Cannabis Law” shall mean any law enacted by any state or locality of the United States which legalizes marijuana, cannabis and related products in some form and which implements strong and effective regulatory and enforcement systems to control the cultivation, distribution, sale and possession of cannabis and related products that is applicable to any Credit Party, any Licensing

 

 

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Entity, any Subsidiary of any of the foregoing or, solely with respect to the definition of Change in Cannabis Law, any Secured Party.

U.S. Tax Compliance Certificate” has the meaning specified in Section 4.04(f)(ii)(3). “UCC” shall mean the Uniform Commercial Code as from time to time in effect in the state of

Illinois and any other applicable jurisdiction.

 

Unasserted Contingent Obligations” shall mean, at any time, Obligations for taxes, costs, indemnifications, reimbursements, damages and other liabilities in respect of which no assertion of liability (whether oral or written) and no claim or demand for payment or indemnification (whether oral or written) has been made or threatened.

 

Voting Stock” shall mean, with respect to any Person, shares of such Person’s Capital Stock having the right to vote for the election of directors (or Persons acting in a comparable capacity) of such Person under ordinary circumstances.

 

Withholding Agent” shall mean any Credit Party and Administrative Agent.

 

SECTION 1.02 Other Interpretive Provisions. With reference to this Agreement and each other Credit Document, unless otherwise specified herein or in such other Credit Document:

 

(a)
The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms. Any pronoun used shall be deemed to cover all genders.

 

(b)
The words “herein”, “hereto”, “hereof” and “hereunder” and words of similar import when used in any Credit Document shall refer to such Credit Document as a whole and not to any particular provision thereof.

 

(c)
Preamble, Article, Section, Exhibit and Schedule references are to the Credit Document in which such reference appears unless otherwise specifically provided.

 

(d)
The term “including” is by way of example and not limitation, and the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or.”

 

(e)
The term “documents” includes any and all instruments, documents, agreements, certificates, notices, reports, financial statements and other writings, however evidenced, whether in physical or electronic form.

 

(f)
In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including”; the words “to” and “until” each mean “to but excluding”; and the word “through” means “to and including”.

 

(g)
Section headings herein and in the other Credit Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Credit Document.

 

(h)
All references in any Credit Document to the consent or discretion of, or approval by any Agent or Lender, shall be deemed to mean the consent of or approval by such Agent

 

 

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or Lender in its sole and absolute discretion, except as otherwise expressly provided in the applicable Credit Document.

 

(i)
A Default or an Event of Default shall be deemed to exist at all times during the period commencing on the date that such Default or Event of Default occurs to the date on which such Default or Event of Default is waived in writing pursuant to this Agreement or, with respect to any Default, is cured within any period of cure expressly provided in this Agreement. Whenever in any provision of this Agreement or any other Credit Document any Agent or any Lender is authorized to take or decline to take any action (including making any determination) in the exercise of its “discretion,” such provision shall be understood to mean that such Agent or such Lender may take or refrain to take such action in its sole and absolute discretion.

 

(j)
Any reference herein to a merger, transfer, consolidation, amalgamation, assignment, sale, disposition or transfer, or similar term, shall be deemed to apply to a division of or by a limited liability company, or an allocation of assets to a series of a limited liability company (or the unwinding of such a division or allocation), as if it were a merger, transfer, consolidation, amalgamation, assignment, sale, disposition or transfer, or similar term, as applicable, to, of or with a separate Person. Any division of a limited liability company shall constitute a separate Person hereunder (and each division of any limited liability company that is a Subsidiary, Credit Party, joint venture or any other like term shall also constitute such a Person or entity).

 

(k)
Where the context so requires, any term defined in this Agreement by reference to the “UCC” shall also have any extended, alternative or analogous meaning given to such term in the PPSA when used in relation to any Collateral subject to the PPSA.

 

SECTION 1.03 Accounting Terms and Principles. All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, Applicable Accounting Standards, applied in a consistent manner. No change in the accounting principles used in the preparation of any financial statement hereafter adopted by Parent or any of its Subsidiaries shall be given effect for purposes of measuring compliance with any provision of Article IX, including Section 9.13, or otherwise in this Agreement unless Parent, Administrative Agent and Required Lenders agree in writing to modify such provisions to reflect such changes in Applicable Accounting Standards and, unless such provisions are modified, all financial statements, Compliance Certificates and similar documents provided hereunder shall be provided together with a reconciliation between the calculations and amounts set forth therein before and after giving effect to such change in Applicable Accounting Standards; provided that the Credit Parties may change their accounting method in accordance with Section 9.13. Notwithstanding any other provision contained herein, at all times when the Applicable Accounting Standard is GAAP, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts referred to in Article IX shall be made, without giving effect to any election under Accounting Standards Codification 825-10 (or any other Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of any Credit Party or any Subsidiary of any Credit Party at “fair value”. A breach of a Financial Performance Covenant shall be deemed to have occurred as of any date of determination by Administrative Agent or Required Lenders as of the last day of any specified measurement period, regardless of when the financial statements reflecting such breach are delivered to any Agent. Anything in this Agreement to the contrary notwithstanding, any obligation of a Person under a lease (whether existing as of the Closing Date or entered into after the Closing Date) that is not (or would not be) required to be classified and accounted for as a capital lease on the balance sheet of such Person under Applicable Accounting Standards as in effect on the Closing Date shall not be

 

 

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treated as a Capitalized Lease Obligation solely as a result of (x) the adoption of any changes in, or (y) changes in the application of, such Applicable Accounting Standards after the Closing Date.

 

SECTION 1.04 [Intentionally Omitted].

 

SECTION 1.05 References to Agreements, Laws, Etc. Unless otherwise expressly provided herein, (a) references to Organization Documents, agreements (including this Agreement and each of the other Credit Documents) and other Contractual Obligations shall be deemed to include all subsequent amendments, restatements, amendment and restatements, extensions, supplements, renewals and other modifications thereto, but only to the extent that such amendments, restatements, amendment and restatements, extensions, supplements, renewals and other modifications are permitted by the terms hereof and thereof; and (b) references to any Applicable Law shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing, implementing or interpreting such Applicable Law and any successor or replacement statutes and regulations.

 

SECTION 1.06 Times of Day. Unless otherwise specified, all references herein to times of day shall be references to the time in Chicago, Illinois.

 

SECTION 1.07 Timing of Payment of Performance. When the payment of any obligation or the performance of any covenant, duty or obligation is stated to be due or performance required on a day which is not a Business Day, the date of such payment or performance shall extend to the immediately succeeding Business Day. All payments required hereunder shall be paid in immediately available funds unless otherwise expressly provided herein.

 

SECTION 1.08 Corporate Terminology. Any reference to officers, shareholders, stock, shares, directors, boards of directors, corporate authority, articles of incorporation, bylaws or any other such references to matters relating to a corporation made herein or in any other Credit Document with respect to a Person that is not a corporation shall mean and be references to the comparable terms used with respect to such Person.

 

ARTI CLE II

Amount and Terms of Loans

 

SECTION 2.01 Loans. Subject to and upon the terms and conditions herein set forth, each Lender agrees, severally in accordance with its Commitment and not jointly with any other Lender, to make a term loan (each, a “Loan”, and collectively, the “Loans”) to Borrowers on the Closing Date, which Loans (a) when aggregated with each other Loan made hereunder, shall be in an amount not to exceed the Aggregate Commitment and (b) for each Lender, when aggregated with each other Loan made by such Lender hereunder, shall be in an amount not to exceed, for each Lender, such Lender’s Commitment. Each Loan may be repaid or prepaid in accordance with the provisions hereof, but once repaid or prepaid may not be reborrowed.

 

SECTION 2.02 [Intentionally Omitted]. SECTION 2.03 [Intentionally Omitted]. SECTION 2.04 Disbursement of Funds.

(a)
If all the conditions set forth in Section 5.01 to the effectiveness of this Agreement are met prior to 12:00 noon on the Business Day immediately preceding the Closing Date,

 

 

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then, each Lender will make available its pro rata portion of the Loans to be made on the Closing Date in the manner provided below no later than 4:00 p.m. on the Closing Date.

 

(b)
Each Lender shall make available all amounts it is to fund to Borrowers and will remit such amounts, in immediately available funds and in Dollars to Borrowers, by remitting the same to such Persons and such accounts as may be designated by Borrowers to Administrative Agent in writing. The failure of any Lender to make available the amounts it is to fund to Borrowers hereunder or to make a payment required to be made by it under any Credit Document shall not relieve any other Lender of its obligations under any Credit Document, but no Lender shall be responsible for the failure of any other Lender to make any payment required to be made by such other Lender under any Credit Document.

 

(c)
Notwithstanding anything to the contrary herein, following the funding of the advances from the Lenders of the Loans on the Closing Date, the Administrative Agent shall hold

$1,800,000 of such advances (the “Koach Reserve Amount”) in an account designated by Administrative Agent, of which Administrative Agent shall disburse to Borrowers (i) on February 22, 2022, $450,000 from the Koach Reserve Amount, (ii) on May 22, 2022, $450,000 from the Koach Reserve Amount, (iii) on August 22, 2022, $450,000 from the Koach Reserve Amount and (iv) on November 21, 2022, $450,000 from the Koach Reserve Amount; provided, that, before and after giving effect to the disbursement of the applicable portion of the Koach Reserve Amount on each such date, no Default or Event of Default shall have occurred and be continuing and all representations and warranties of the Credit Parties set forth in this Agreement and the other Credit Documents are true and correct in all material respects (other than such representations and warranties that are already qualified by materiality, Material Adverse Effect or similar language, in which case such representations and warranties shall be true and correct in all respects) on such date; provided, further, for the avoidance of doubt, the Koach Reserve Amount shall be deemed advanced to Borrowers on the Closing Date for purposes of the calculation of fees and interest payable to Agents and Lenders hereunder. Administrative Agent shall have exclusive control, including the exclusive right of withdrawal, over the monies funding the Koach Reserve Amount. Such monies shall not bear interest or profits for the account of Borrowers.

 

(d)
Notwithstanding anything to the contrary herein, following the funding of the advances from the Lenders of the Loans on the Closing Date, Dentons Canada LLP shall hold, at the request of Parent and with the consent of Administrative Agent, $4,500,000 of such advances (the “Land Contracts Reserve Amount”) in the Land Contracts Trust Account, and such Land Contracts Reserve Amount will be disbursed on December 31, 2021 (or such later date to which Administrative Agent agrees in its discretion in connection with the satisfaction of the Land Contracts Reserve Release Conditions) (i) if the Land Contracts Reserve Release Conditions have been satisfied, to the Borrowers in an amount equal to the Land Contracts Reserve Disbursement and (ii) to the Lenders in an amount equal to the Land Contracts Reserve Amount Excess to be applied as set forth in Section 4.02(a)(vii); provided, further, for the avoidance of doubt, the Land Contracts Reserve Amount shall be deemed advanced to Borrowers on the Closing Date for purposes of the calculation of fees and interest payable to Agents and Lenders hereunder. Borrowers agree that the Land Contracts Reserve Amount and the Land Contracts Trust Account have been established for the benefit of the Secured Parties and the Land Contracts Reserve Amount is being held in trust for the Secured Parties. Parent shall not withdraw, transfer or otherwise direct disbursement of the Land Contracts Reserve Amount or the monies funding the Land Contracts Trust Account without the express prior written consent of Administrative Agent. At all times while the Land Contracts Reserve Amount remains outstanding and the Land Contracts Trust Account is in effect, Parent shall provide Administrative Agent with account statements, confirmation of the account balance and any other information relating to the Land

 

 

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Contracts Reserve Amount and the Land Contracts Trust Account as Administrative Agent may reasonably request from time to time.

 

(e)
Nothing in this Section 2.04 shall be deemed to relieve any Lender from its obligation to fulfill its commitments and obligations hereunder or to prejudice any rights that Borrowers may have against any Lender as a result of any default by such Lender hereunder (it being understood, however, that no Lender shall be responsible for the failure of any other Lender to fulfill its commitments and obligations hereunder).

 

SECTION 2.05 Payment of Loans; Evidence of Debt.

 

 

(a)
Borrowers agree to pay to Administrative Agent, for the benefit of the Lenders, or to Lenders, at the direction of each Lender, the outstanding principal and interest due on the Loans on the Maturity Date or upon such earlier date on which the Obligations are accelerated pursuant to the terms of this Agreement.

 

(b)
Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the Indebtedness of Borrowers to the appropriate lending office of such Lender resulting from each Loan made by such lending office of such Lender from time to time, including the amounts of principal and interest payable and paid to such lending office of such Lender from time to time under this Agreement.

 

(c)
Borrowers agree that from time to time on or after the Closing Date, upon the request to Administrative Agent by any Lender, at Borrowers’ own expense, Borrowers will execute and deliver to such Lender a Note evidencing the Loans, and payable to such Lender or registered assigns in a maximum principal amount equal to such Lender’s applicable Commitment. Administrative Agent shall maintain the Register pursuant to Section 12.06(b)(iii), and a subaccount for each Lender, in which Register and subaccounts (taken together) shall be recorded (i) the amount of each Loan made hereunder, (ii) the amount of any principal or interest due and payable or to become due and payable from Borrowers to each Lender hereunder and (iii) the amount of any sum received by Administrative Agent from Borrowers and each Lender’s share thereof.

 

(d)
The entries made in the Register and accounts and subaccounts maintained pursuant to Sections 2.05(b) and 2.05(c) shall be conclusive evidence (absent manifest error) of the existence and amounts of the obligations of Borrowers therein recorded; provided that the failure of any Lender or Administrative Agent to maintain such account, such Register or such subaccount, as applicable, or any error therein, shall not in any manner affect the obligation of Borrowers to repay (with applicable interest) the Loans made to Borrowers by such Lender in accordance with the terms of this Agreement.

 

(e)
In addition to the foregoing, each Borrower hereby irrevocably promises to pay all Obligations, including the outstanding aggregate principal amount of the Loans and interest and fees with respect to the foregoing, as the same become due and payable hereunder and, in any event, on the Maturity Date.

 

SECTION 2.06 Interest.

 

(a)
The unpaid principal amount of the Loans shall bear interest from the Closing Date at the Interest Rate and shall be due and payable in cash monthly on each Payment Date, in

 

 

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arrears, with the first installment being payable on the last day of the first month following the Closing Date.

 

(b)
Interest on the Loans shall accrue from and including the Closing Date through and including the date of any repayment in full thereof.

 

(c)
From and after the occurrence and during the continuance of any Event of Default, Borrowers shall pay interest on the principal amount of all Loans and all other unpaid Obligations, to the extent permitted by Applicable Law, at the Default Rate, which Default Rate shall accrue from the date of such Event of Default (regardless of the date of notice of the imposition of the Default Rate) until waived in writing and shall be payable on demand and in cash.

 

(d)
All computations of interest hereunder shall be made in accordance with

Section 4.05.

 

SECTION 2.07 Increased Costs, Illegality, Etc.

 

(a)
In the event that any Lender shall have reasonably determined (which determination shall, absent manifest error, be final and conclusive and binding upon all parties hereto) at any time, after the later of the Closing Date and the date such entity became a Lender hereunder, that such Lender shall incur increased costs or reductions in the amounts received or receivable hereunder with respect to the Loans, including as a result of any Tax (other than any (x) Indemnified Taxes, (y) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes or (z) Connection Income Taxes) because of any change since the date hereof in any Applicable Law (or in the interpretation or administration thereof and including the introduction of any new Applicable Law), such as, for example, without limitation, a change in official reserve requirements (but excluding changes in the rate of tax on the overall net income of such Lender), then, and in any such event, such Lender shall promptly give notice (if by telephone, confirmed in writing) to Parent and Administrative Agent of such determination (which notice Administrative Agent shall promptly transmit to each of the other Lenders). Thereafter, Borrowers shall pay to such Lender, within 10 Business Days after receipt of written demand therefor such additional amounts (in the form of an increased rate of, or a different method of calculating, interest or otherwise as such Lender in its reasonable discretion shall determine) as shall be required to compensate such Lender for such increased costs or reductions in amounts receivable hereunder (it being agreed that a written notice as to the additional amounts owed to such Lender submitted to Borrowers by such Lender shall, absent manifest error, be final and conclusive and binding upon all parties hereto).

 

(b)
If, after the later of the date hereof and the date such entity becomes a Lender hereunder, the adoption of any Applicable Law regarding capital adequacy, or any change therein, or any change in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by a Lender or its parent with any request or directive made or adopted after such date regarding capital adequacy (whether or not having the force of law) of any such authority, association, central bank or comparable agency, has the effect of reducing the rate of return on such Lender’s or its parent’s capital or assets as a consequence of such Lender’s commitments or obligations hereunder to a level below that which such Lender or its parent could have achieved but for such adoption, effectiveness, change or compliance (taking into consideration such Lender’s or its parent’s policies with respect to capital adequacy), then within 10 days after receipt of written demand by such Lender (with a copy to Administrative Agent), Borrowers shall pay to such Lender such additional amount or amounts as will compensate such Lender or its parent for such reduction, it being understood and agreed, however, that a Lender shall not be entitled to such compensation as a result of such Lender’s compliance with,