LICENSE PURCHASE AGREEMENT by and among [Buyer], PLANET 13 HOLDINGS INC., [Seller], and HARVEST HEALTH & RECREATION INC. dated as of August 31, 2021 LICENSE PURCHASE AGREEMENT
Exhibit 2.5
Certain identified information has been excluded from the exhibit
because it is both not material and is the type that
the registrant treats as private or
confidential.
by and among
[Buyer],
[Seller],
and
HARVEST HEALTH & RECREATION INC.
dated as of
August 31, 2021
This License Purchase Agreement (this
“Agreement”),
dated as of August 31, 2021 (the “Effective
Date”), is entered into
by and among [Buyer], a Florida corporation (which shall be renamed
“Planet 13 Florida Inc.” promptly following the
Effective Date) (“Buyer”),
Planet ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇., ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ corporation
(“Buyer
Parent”), [Seller], a
Florida corporation (“Seller”)
and Harvest Health & Recreation Inc., a British Columbia
corporation (“Seller
Parent”).
WHEREAS, Seller owns a Medical Marijuana Treatment
Center license number MMTC-2016-0006 (the
“License”)
issued by the Florida Department of Health to Seller;
and
WHEREAS,
Seller wishes to sell and assign to Buyer, and Buyer wishes to
purchase from Seller, the License, subject to the terms and
conditions set forth herein.
NOW,
THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
The following terms have the meanings specified or referred to in
this Article
I:
“Action”
means any claim, action, cause of action, demand, lawsuit,
arbitration, inquiry, audit, notice of violation, proceeding,
litigation, citation, summons, subpoena or investigation of any
nature, civil, criminal, administrative, regulatory or otherwise,
whether at law or in equity.
“Affiliate”
of a Person means any other Person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or
is under common control with, such Person. The term
“control” (including the terms “controlled
by” and “under common control with”) means the
possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or
otherwise.
“Ancillary
Documents” means the ▇▇▇▇
of Sale, the Escrow Agreement and the other agreements, instruments
and documents required to be delivered in connection with this
Agreement or at the Closing.
“Business
Day” means a day (other
than a Saturday or a Sunday) on which banks are open for general
business in New York City.
“Cannabis
Laws” means any U.S.
federal laws, civil, criminal or otherwise, to the extent that such
law is directly or indirectly related to the cultivation,
harvesting, production, manufacturing, processing, marketing,
distribution, sale or possession of cannabis, marijuana or related
substances or products containing cannabis, marijuana or related
substances, including the prohibition on drug trafficking under the
Controlled Substances Act (21 U.S.C. § 801, 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 any state controlled substances acts.
“CSE” means the Canadian Securities
Exchange.
“Disclosure
Schedules” means the
Disclosure Schedules, if any, delivered by Seller and Buyer
concurrently with the execution and delivery of this
Agreement.
“Encumbrance”
means any charge, claim, community property interest, pledge,
condition, equitable interest, lien (statutory or other), option,
security interest, mortgage, easement, encroachment, right of way,
right of first refusal, or restriction of any kind, including any
restriction on use, voting, transfer, receipt of income or exercise
of any other attribute of ownership.
“Escrow
Agent” means GLAS
Americas LLC, New York limited liability
company.
“Fraud”
means actual common law fraud in the making of a representation,
warranty, or other statement committed by a Person making such
representation, warranty, or statement with the intent to deceive
another Person, and to induce any Person to enter into this
Agreement or any Ancillary Document and requires (a) a false
representation, warranty, or statement of material fact; (b) actual
knowledge or belief that such representation, warranty, or
statement is false; (c) an intention to induce such other Person to
whom such representation, warranty, or statement was made to act or
refrain from acting in reliance upon it; (d) causing that Person,
in justifiable reliance upon such false representation, warranty,
or statement to take or refrain from taking action; and (e) causing
such Person or any party hereto to suffer damage by reason of such
reliance.
“GAAP”
means United States generally accepted accounting principles and
practices, consistently applied.
“Governmental
Authority” means any
federal, state, local or foreign government or political
subdivision thereof, or any agency or instrumentality of such
government or political subdivision, or any self-regulated
organization or other non-governmental regulatory authority or
quasi-governmental authority (to the extent that the rules,
regulations or orders of such organization or authority have the
force of Law), or any arbitrator, court or tribunal of competent
jurisdiction, including, without limitation, the OMMU and any local
licensing authority.
“Governmental
Order” means any order,
writ, judgment, injunction, decree, stipulation, determination or
award entered by or with any Governmental
Authority.
“Law” means any foreign or United States
statute, law, ordinance, regulation, rule, code, order,
constitution, treaty, common law or other requirement or rule of
law of any Governmental Authority; provided, however, that the
parties acknowledge and agree that Cannabis Laws shall not be
deemed to be Law.
“Liabilities”
means liabilities, obligations or commitments of any nature
whatsoever, asserted or unasserted, known or unknown, absolute or
contingent, accrued or unaccrued, matured or unmatured or
otherwise.
“Losses”
means losses, damages, liabilities, deficiencies, Actions,
judgments, interest, awards, penalties, fines, costs or expenses of
whatever kind, including reasonable attorneys’ fees and the
cost of enforcing any right to indemnification hereunder and the
cost of pursuing any insurance providers;
provided, however, that “Losses” shall not
include punitive damages, except to the extent actually awarded to
a Governmental Authority or other third party.
“Material Adverse
Effect” means any event,
occurrence, fact, condition or change that is materially adverse
to: (a) the License; or (b) the ability of Seller to consummate the
transactions contemplated hereby; provided, however, that
“Material Adverse Effect” shall not include any event,
occurrence, fact, condition or change, directly or indirectly,
arising out of or attributable to: (i) general economic or
political conditions; (ii) conditions generally affecting the
industries in which Seller operates; (iii) any changes in
financial, banking or securities markets in general, including any
disruption thereof and any decline in the price of any security or
any market index or any change in prevailing interest rates; (iv)
acts of war (whether or not declared), armed hostilities or
terrorism, or the escalation or worsening thereof; (v) any action
required or permitted by this Agreement or any action taken (or
omitted to be taken) with the written consent of or at the written
request of Buyer; (vi) any changes in applicable Laws or accounting
rules (including GAAP) or the enforcement, implementation or
interpretation thereof; or (vii) any natural or manmade disaster or
acts of God, including the COVID-19 virus or any other epidemic or
pandemic; provided, further, that any event, occurrence, fact,
condition or change referred to in clauses (i), (ii), or (iii)
immediately above shall be taken into account in determining
whether a Material Adverse Effect has occurred to the extent that
such event, occurrence, fact, condition or change has a
disproportionate effect on Seller, taken as a whole, compared to
other participants in the industries in which Seller conducts its
business.
“OMMU”
means the Florida Department of Health’s Office of Medical
Marijuana Use.
“OMMU
Approval” means the
approval by the OMMU necessary to consummate the transactions
contemplated by this Agreement.
“Person”
means an individual, corporation, partnership, joint venture,
limited liability company, Governmental Authority, unincorporated
organization, trust, association or other
entity.
“Remaining Deposit
Notice” means a written
notice from Seller to Buyer setting forth the closing date of the
transactions contemplated by that certain Arrangement Agreement,
dated May 10, 2021 (the “Arrangement
Agreement”), between
Seller Parent and Trulieve Cannabis Corp., a British Columbia
corporation (the “Harvest/Trulieve
Transaction”).
“Representative”
means, with respect to any Person, any and all directors, officers,
employees, consultants, financial advisors, counsel, accountants
and other agents of such Person.
“Security
Interest” means that
security interest in the License granted by Seller pursuant to the
Security Agreement, dated as of December 20, 2019, by and among
Seller, the other “Grantors” party thereto, and Odyssey
Trust Company, as collateral trustee (the
“Collateral
Trustee”), to secure
obligations of Seller Parent under the Trust Indenture, dated as of
December 20, 2019, by and between Harvest and the Collateral
Trustee
“Seller’s
Knowledge” or any other
similar knowledge qualification, means the actual knowledge of
▇▇▇▇▇ ▇▇▇▇▇ or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ following due
inquiry.
“Taxes”
means all federal, state, local, foreign and other income, gross
receipts, sales, use, production, ad valorem, transfer,
documentary, franchise, registration, profits, license,
withholding, payroll, employment, unemployment, excise, severance,
stamp, occupation, premium, property (real or personal), customs,
duties or other taxes, fees, assessments or charges of any kind
whatsoever, together with any interest, additions or penalties with
respect thereto.
“Tax
Return” means any and all
returns, declarations, reports, information returns and statements
and other documents relating to Taxes (including amended returns
and claims for refund).
ARTICLE II
PURCHASE AND SALE OF LICENSE
Section 2.01 Purchase and Sale
of License. Subject to the
terms and conditions set forth herein, at the Closing, Seller shall
sell, assign, transfer, convey and deliver to Buyer, and Buyer
shall purchase from Seller, free and clear of any Encumbrances, all
of Seller’s right, title and interest in, to and under the
License. Other than the License, Buyer expressly understands and
agrees that it is not purchasing or acquiring, and Seller is not
selling or assigning, any other assets or properties of Seller, and
all such other assets and properties shall be excluded from the
transaction contemplated by this Agreement (collectively, the
“Excluded
Assets”).
Section 2.02 Buyer Liabilities; Excluded Liabilities.
(a) Buyer
agrees to pay, perform and discharge when due any and all
Liabilities arising out of or relating to Buyer’s ownership
of the License or the operation of the business to be conducted by
Buyer and its Affiliates under the License on or after the Closing
Date.
(b) Buyer
shall not assume and shall not be responsible to pay, perform or
discharge any Liabilities of Seller and its Affiliates of any kind
or nature, including any and all Liabilities arising out of or
relating to Seller’s ownership of the License or the
operation of the business conducted by Seller and its Affiliates
under the License prior to the Closing Date (collectively, the
“Excluded
Liabilities”). Seller
shall, and shall cause each of its Affiliates to, pay and satisfy
in due course all Excluded Liabilities which they are obligated to
pay and satisfy.
Section 2.03 Purchase
Price. The aggregate purchase
price for the License shall be US$55,000,000 (the
“Purchase
Price”), payable as
follows:
(a) Upon
the execution of the Escrow Agreement, Buyer shall deposit
US$2,000,000 (the “Initial
Deposit”) with the Escrow
Agent which shall be held by the Escrow Agent in an escrow account
(the “Escrow
Account”) pursuant to the
terms and conditions of this Agreement and the escrow agreement
entered into as of even date herewith by and among Buyer, Seller
and the Escrow Agent (the “Escrow
Agreement”). Each party
shall deliver to the Escrow Agent its respective documents required
for the Escrow Agent to complete its “Know Your
Customer” compliance identity verification no later than
three Business Days following the Effective Date. Buyer and Seller
acknowledge and agree that the Escrow Agreement is in
final form
(as between Buyer and Seller) as of the Effective Date, and Buyer
and Seller shall execute the Escrow Agreement as promptly as
possible following the Effective Date.
(b) Within
two Business Days of Buyer’s and the Escrow Agent’s
receipt of the Remaining Deposit Notice from Seller, Buyer shall
deposit US$53,000,000 (the “Remaining Deposit”)
with the Escrow Agent which shall be held by the Escrow Agent
pursuant to the terms and conditions of this Agreement and the
Escrow Agreement; provided, that [Remaining Deposit Notice timing
requirement]; provided, further that, if the Closing under this
Agreement does not occur within [Remaining Deposit timing
requirement] following the funding of the Remaining Deposit, if
Buyer, in its sole discretion, so chooses, Buyer and Seller shall
deliver joint written instructions to the Escrow Agent to request
the return to Buyer of the Remaining Deposit. Upon the return of
the Remaining Deposit to Buyer, Seller shall be obligated to send
another Remaining Deposit Notice to Buyer and the Escrow Agent in
order for Buyer to re-deposit the Remaining Deposit with the Escrow
Agent.
(c) At
the Closing, the Escrow Agent shall release the entire Purchase
Price (i.e., the Initial Deposit plus the Remaining Deposit)
to Seller in accordance with the terms and conditions of this
Agreement and the Escrow Agreement.
ARTICLE III
CLOSING
Section 3.01
Closing. Subject to the terms
and conditions of this Agreement, the consummation of the
transactions contemplated by this Agreement (the
“Closing”)
shall take place remotely by exchange of documents and signatures
(or their electronic counterparts), within five Business Days after
all of the conditions to Closing set forth in Article VII
are either satisfied or waived (other
than conditions which, by their nature, are to be satisfied on the
Closing Date), or at such other time, date or place as Seller and
Buyer may mutually agree upon in writing; provided, that
notwithstanding anything to the contrary herein, Buyer and Seller
hereby agree that the Closing shall take place simultaneously upon
the consummation of the Harvest/Trulieve Transaction. The date on
which the Closing is to occur is herein referred to as the
“Closing
Date.”
Section 3.02 Closing Deliverables.
(a) At
the Closing, Seller and Buyer shall deliver joint written
instructions to the Escrow Agent instructing the Escrow Agent to
release the Escrow Funds to Seller in accordance with this
Agreement and the Escrow Agreement. In addition, Seller shall
deliver to Buyer the following:
(i) a
▇▇▇▇ of sale substantially in the form attached hereto as
Exhibit
A (the
“▇▇▇▇ of
Sale”), duly executed by
Seller;
(ii) a
certificate pursuant to Treasury Regulations Section 1.1445-2(b)
that Seller is not a foreign person within the meaning of Section
1445 of the Code, duly executed by Seller;
(iii) a
certificate, dated as of the Closing Date and signed by a duly
authorized officer of Seller, certifying that each of the
conditions set forth in Section 7.02(a)
and Section 7.02(b)
have been
satisfied;
(iv) a
certificate from a duly authorized officer of Seller certifying
that attached thereto are true and complete copies of the
resolutions adopted by the board of directors of Seller authorizing
the execution, delivery and performance of this Agreement, the
Ancillary Documents and the consummation of the transactions
contemplated hereby and thereby; and
(v) such
other documents or instruments as Buyer reasonably requests and are
reasonably necessary to consummate the transactions contemplated by
this Agreement.
(b) At
the Closing, Buyer shall deliver to Seller the
following:
(i) evidence
that Buyer has obtained a performance bond (or its equivalent) that
satisfies the requirements of section 381.986(8)(b)7, Florida
Statutes;
(ii) a
certificate, dated as of the Closing Date and signed by a duly
authorized officer of Buyer, certifying that each of the conditions
set forth in Section 7.03(a)
and Section 7.03(b)
have been
satisfied;
(iii) a
certificate from a duly authorized officer of Buyer certifying that
attached thereto are true and complete copies of the resolutions
adopted by the board of directors of Buyer authorizing the
execution, delivery and performance of this Agreement, the
Ancillary Documents and the consummation of the transactions
contemplated hereby and thereby; and
(iv) such
other documents or instruments as Seller reasonably requests and
are reasonably necessary to consummate the transactions
contemplated by this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller
represents and warrants to Buyer that:
Section 4.01 Organization and
Authority of Seller. Seller is
a corporation duly organized, validly existing and in good standing
under the Laws of the State of Florida. Seller Parent is a
corporation duly incorporated, validly existing and in good
standing under the Laws of the Province of British Columbia. Each
of Seller and Seller Parent has all necessary corporate power and
authority to enter into this Agreement and the Ancillary Documents
to which Seller or Seller Parent, as applicable, is a party, to
carry out its obligations hereunder and thereunder, and to
consummate the transactions contemplated hereby and thereby. The
execution and delivery by each of Seller and Seller Parent of this
Agreement and any Ancillary Document to which Seller or Seller
Parent, as applicable, is a party, the performance by each of
Seller and Seller Parent of its obligations hereunder and
thereunder, and the consummation by each of Seller and Seller
Parent of the transactions contemplated hereby and thereby have
been duly authorized by all requisite corporate action on the part
of Seller and Seller Parent, as applicable. This Agreement and the
Ancillary Documents constitute legal, valid and binding obligations
of Seller and Seller Parent enforceable against Seller and Seller
Parent in accordance with their respective terms, except
as such
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar Laws affecting
creditors’ rights generally and by general principles of
equity (regardless of whether enforcement is sought in a proceeding
at law or in equity).
Section 4.02 No Conflicts or
Consents. The execution,
delivery and performance by each of Seller and Seller Parent of
this Agreement and the Ancillary Documents to which it is a party,
and the consummation of the transactions contemplated hereby and
thereby, do not and will not: (a) violate or breach any provision
of the articles of incorporation, bylaws or other constating
documents of Seller or Seller Parent; (b) violate or breach any
provision of any Law or Governmental Order applicable to Seller,
Seller Parent or the License; or (c) except for the OMMU Approval,
require any consent, permit, Governmental Order, filing or notice
from, with or to any Governmental Authority or any other Person by
or with respect to Seller or Seller Parent in connection with the
execution and delivery of this Agreement and the Ancillary
Documents and the consummation of the transactions contemplated
hereby and thereby.
Section 4.03 Title to
License. Except for the
Security Interest, Seller has good and valid title to the License,
free and clear of all Encumbrances.
Section 4.04 Legal Proceedings; Governmental Orders.
(a) There
are no Actions pending or, to Seller’s Knowledge, threatened
against or by Seller or Seller Parent: (a) relating to or affecting
the License, which if determined adversely to Seller or Seller
Parent, as applicable, would result in a Material Adverse Effect;
or (b) that challenge or seek to prevent, enjoin or otherwise delay
the transactions contemplated by this Agreement or any Ancillary
Document.
(b) There
are no outstanding Governmental Orders against, relating to or
affecting the License which would have a Material Adverse
Effect.
Section 4.05 Compliance with
Laws; License. Seller is in
compliance in all material respects with all Laws applicable to the
ownership and use of the License. Neither Seller nor Parent has
received any written communication from any Governmental Authority
or other Person that remains unresolved as of the Effective Date
that alleges that Seller is not in material compliance with any
such Laws. The License is in good standing, is valid and is in full
force and effect. All fees and charges with respect to the License
as of Effective Date have been paid in full. No event has occurred
that, with or without notice or lapse of time or both, would
reasonably be expected to result in the revocation, suspension,
lapse or limitation of the License. The License was obtained in
compliance with Law. The License has a current expiration date of
October 26, 2022 (the “License Expiration
Date”), and Seller is not
aware of any reason the License will not be renewed or capable of
being renewed on or before the License Expiration
Date.
Section 4.06
Brokers. Except for Canaccord
Genuity Corp., no broker, finder, or investment banker is entitled
to any brokerage, finder’s, or other fee or commission in
connection with the transactions contemplated by this Agreement or
any Ancillary Document based upon arrangements made by or on behalf
of Seller.
Section 4.07 No Other
Representations and Warranties.
Except for the representations and warranties contained in
this Article IV
(including the related portions of
the Disclosure
Schedules, if any), neither Seller nor any other Person has made or
makes any other express or implied representation or warranty,
either written or oral, on behalf of Seller, including any
representation or warranty arising from statute or otherwise in
Law.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer
represents and warrants to Seller that:
Section 5.01 Organization and
Authority of Buyer. Buyer is a
Florida corporation duly organized, validly existing and in good
standing under the Laws of the State of Florida. Buyer Parent is a
corporation duly incorporate, validly existing and in good standing
under the Laws of the Province of British Columbia. Buyer has been
registered to do business in the State of Florida for at least five
consecutive years prior to the Effective Date, as required by
section 381.986(8)(b)1., Florida Statutes. Each of Buyer and Buyer
Parent has all necessary corporate power and authority to enter
into this Agreement and the Ancillary Documents to which Buyer or
Buyer Parent, as applicable, is a party, to carry out its
obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. The execution and
delivery by each of Buyer and Buyer Parent of this Agreement and
any Ancillary Document to which Buyer or Buyer Parent, as
applicable, is a party, the performance by each of Buyer and Buyer
Parent of its obligations hereunder and thereunder and the
consummation by each of Buyer and Buyer Parent of the transactions
contemplated hereby and thereby have been duly authorized by all
requisite corporate action on the part of Buyer and Buyer Parent,
as applicable. This Agreement and the Ancillary Documents
constitute legal, valid and binding obligations of Buyer and Buyer
Parent enforceable against Buyer and Buyer Parent in accordance
with their respective terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or
similar Laws affecting creditors’ rights generally and by general principles of
equity (regardless of whether enforcement is sought in a proceeding
at law or in equity).
Section 5.02 No Conflicts;
Consents. The execution,
delivery and performance by each of Buyer and Buyer Parent of this
Agreement and the Ancillary Documents to which it is a party, and
the consummation of the transactions contemplated hereby and
thereby, do not and will not: (a) violate or breach any provision
of the articles of incorporation, bylaws or other constating
documents of Buyer or Buyer Parent; (b) violate or breach any
provision of any Law or Governmental Order applicable to Buyer or
Buyer Parent; (c) require the consent, notice or other action by
any Person under, conflict with, violate or breach, constitute a
default under or result in the acceleration of any agreement to
which Buyer or Buyer Parent is a party; or (d) except for the OMMU
Approval, require any consent, permit, Governmental Order, filing
or notice from, with or to any Governmental Authority or any other
Person by or with respect to Buyer or Buyer Parent in connection
with the execution and delivery of this Agreement and the Ancillary
Documents and the consummation of the transactions contemplated
hereby and thereby.
Section 5.03
Capitalization. One hundred
percent (100%) of the issued and outstanding stock of Buyer is
owned by Buyer Parent. No individual or entity who directly or
indirectly owns, controls, or holds with power to vote five percent
or more of the voting interests of Buyer has any direct or indirect
ownership or control of any voting interests or other form of
ownership of any Florida licensed medical marijuana treatment
center. No individual or entity who has any direct or
indirect ownership or control of any voting
interests or other form of ownership of Buyer directly or
indirectly owns, controls, or holds with power to vote five percent
or more of the voting interests of any Florida licensed medical
marijuana treatment center.
Section 5.04 Solvency;
Sufficiency of Funds. Immediately after giving effect to the
transactions contemplated hereby, Buyer shall be solvent and shall:
(a) be able to pay its debts as they become due; (b) own property
that has a fair saleable value greater than the amounts required to
pay its debts (including a reasonable estimate of the amount of all
Liabilities); and (c) have adequate capital to build out and
construct cultivation and dispensary facilities for the operation
of its cannabis business under the License and the financial
ability to maintain such operations for at least two years. No
transfer of property is being made and no obligation is being
incurred in connection with the transactions contemplated hereby
with the intent to hinder, delay or defraud either present or
future creditors of Buyer or Seller. In connection with the
transactions contemplated hereby, Buyer has not incurred, nor plans
to incur, debts beyond its ability to pay as they become absolute
and matured. Buyer has sufficient cash on hand or other sources of
immediately available funds to enable it to make payment of the
Purchase Price and consummate the transactions contemplated by this
Agreement.
Section 5.05 Legal
Proceedings. There are no
Actions pending or, to Buyer’s knowledge, threatened against or by Buyer or
Buyer Parent that challenge or seek to prevent, enjoin or otherwise
delay the transactions contemplated by this
Agreement.
Section 5.06
Brokers. Except for Beacon
Securities Limited, no broker, finder, or investment banker is
entitled to any brokerage, finder’s, or other fee or commission in connection with
the transactions contemplated by this Agreement or any Ancillary
Document based upon arrangements made by or on behalf of
Buyer.
Section 5.07 Independent
Investigation. Buyer has
conducted its own independent investigation, review and analysis of
the License. Buyer acknowledges and agrees that: (a) in making its
decision to enter into this Agreement and to consummate the
transactions contemplated hereby, Buyer has relied solely upon its
own investigation and the express representations and warranties of
Seller set forth in Article IV
of this Agreement (including related
portions of the Disclosure Schedules, if any); and (b) neither
Seller nor any other Person has made any representation or warranty
as to Seller, the License or this Agreement, except as expressly
set forth in Article IV
of this Agreement (including the
related portions of the Disclosure Schedules, if
any).
ARTICLE VI
COVENANTS
Section 6.01
Confidentiality. The parties
hereto acknowledge and agree that the Confidentiality Agreement,
dated as of August 26, 2021 between Buyer Parent and Harvest
Enterprises, Inc. (the “Confidentiality
Agreement”) remains in
full force and effect and, in addition, each party covenants and
agrees to keep confidential, in accordance with the provisions of
the Confidentiality Agreement, information provided by any party to
the other pursuant to this Agreement.
Section 6.02 Public
Announcements. Unless otherwise
required by applicable Law or stock exchange applicable to a party
or its Affiliates, no party to this Agreement shall make any public
announcements in respect of this Agreement or the transactions
contemplated hereby without the prior written consent of the other
party (which consent shall not be unreasonably withheld,
conditioned or delayed), and the parties shall cooperate as to the
timing and contents of any such announcement; provided, however,
that any party and its Affiliates may, without the prior written
consent of other party(ies), make any public statement or
disclosure to the extent the substance of such public statement or
disclosure is consistent with any previous press release, statement
or disclosure made in accordance with, or permitted by, this
Section
6.02.
Section 6.03 Transfer
Taxes. All transfer, sales,
use, registration, documentary, stamp, value added and other such
Taxes and fees (including any penalties and interest) incurred in
connection with this Agreement and the Ancillary Documents, if any,
shall be borne and paid by Buyer when due. Buyer shall, at its own
expense, timely file any Tax Return or other document with respect
to such Taxes or fees (and Seller shall cooperate with respect
thereto as necessary).
Section 6.04 Further
Assurances. Following the
Closing, each of the parties hereto shall, and shall cause their
respective Affiliates to, execute and deliver such additional
documents, instruments, conveyances and assurances and take such
further actions as may be reasonably required to carry out the
provisions hereof and give effect to the transactions contemplated
by this Agreement and the Ancillary Documents.
Section 6.05
Exclusivity. Seller shall not,
and shall not authorize or permit any of its Affiliates or any of
its or their Representatives to, directly or indirectly (i)
solicit, initiate or continue any discussions or negotiations with
any Person concerning the actual or potential sale of the License,
(ii) enter into discussions or negotiations with, or provide any
information to, any Person concerning the actual or potential sale
of the License or (iii) enter into any agreements or other
instruments (whether or not binding) regarding any actual or
potential sale of the License. Seller shall immediately cease and
cause to be terminated, and shall cause its Affiliates and all of
their Representatives to immediately cease and cause to be
terminated, all existing discussions or negotiations with any
Persons conducted heretofore with respect to, or that could
reasonably lead to, any actual or potential sale of the License. In
addition to the other obligations under this Section
6.05, Seller shall promptly
(and in any event within one Business Day after receipt thereof by
Seller, its Affiliates or its or their respective Representatives)
advise Buyer orally and in writing of any bona fide proposal
relating to the actual or potential sale of the
License.
Section 6.06 Governmental Approvals and Consents.
(a) Each
party hereto shall, as promptly as possible, (i) make, or cause or
be made, all filings and submissions required under any Law or
stock exchange requirement applicable to such party or any of its
Affiliates; and (ii) use commercially reasonable efforts to obtain,
or cause to be obtained, all consents, authorizations, orders and
approvals from all Governmental Authorities that may be or become
necessary for its execution and delivery of this Agreement and the
performance of its obligations pursuant to this Agreement and the
Ancillary Documents, including without limitation, the OMMU
Approval. Each party shall cooperate fully with the other party and
its Affiliates in promptly seeking to obtain all such consents,
authorizations, orders and approvals. The parties hereto shall not
willfully take any action that will have the effect of delaying,
impairing or impeding the receipt of any required consents,
authorizations, orders and approvals.
(b) In
furtherance of the foregoing:
(i) promptly
following the Effective Date, but in no event more than one
Business Day following the Effective Date, Seller will submit to
the OMMU a request for approval of the transfer of the License from
Seller to Buyer, which approval shall contain evidence of
satisfaction of all regulatory requirements and Buyer’s plan
of operation for the business to be conducted under the License, as
described in greater detail on Schedule 1
attached hereto, and Buyer will use
commercially reasonable efforts to cooperate and provide all
information requested by Seller and/or required by the OMMU in
connection with such request for approval; provided, however, the
parties agree the request for approval contemplated by this
Section
6.06(b)(i) shall not include
the items set forth in Section
6.06(b)(ii);
and
(ii) [Florida
regulatory requirements Buyer covenants].
(c) Without limiting the generality of the
parties’ undertakings pursuant to subsections (a) and (b)
above, each of the parties hereto shall use commercially reasonable
efforts to:
(i) respond
within three Business Days following receipt to any inquiries by
any Governmental Authority regarding any matter with respect to the
transactions contemplated by this Agreement or any Ancillary
Document;
(ii) avoid
the imposition of any order or the taking of any action that would
restrain, alter or enjoin the transactions contemplated by this
Agreement or any Ancillary Document; and
(iii) in
the event any Governmental Order adversely affecting the ability of
the parties to consummate the transactions contemplated by this
Agreement or any Ancillary Document has been issued, to have such
Governmental Order vacated or lifted.
(d)
All analyses, appearances, meetings, discussions, presentations,
memoranda, briefs, filings, arguments, and proposals made by or on
behalf of either party before any Governmental Authority or the
staff or regulators of any Governmental Authority, in connection
with the transactions contemplated hereunder (but, for the
avoidance of doubt, not including any interactions between Seller
or Buyer with Governmental Authorities in the ordinary course of
business, any disclosure which is not permitted by Law or any
disclosure containing confidential
information) shall be disclosed to the other party hereunder in
advance of any filing, submission or attendance, it being the
intent that the parties will consult and cooperate with one
another, and consider in good faith the views of one another, in
connection with any such analyses, appearances, meetings,
discussions, presentations, memoranda, briefs, filings, arguments,
and proposals. Each party shall give notice to the other party with
respect to any meeting, discussion, appearance or contact with any
Governmental Authority or the staff or regulators of any
Governmental Authority, with such notice being sufficient to
provide the other party with the opportunity to attend and
participate in such meeting, discussion, appearance or
contact.
Section 6.07 Seller Parent
Guaranty. Seller Parent hereby
guarantees to Buyer the full, prompt and unconditional payment when
due of all obligations of Seller to Buyer under this Agreement,
including, without limitation, all indemnification obligations set
forth in Article
VIII. This
guaranty is an absolute, unconditional, irrevocable and continuing
guaranty of the full and punctual payment and performance of
Seller’s obligations under this Agreement and not of their
collectability only and is in no way conditioned upon any
requirement that Buyer first attempt to collect any of the
obligations under this Agreement from Seller or resort to any
security or other means of obtaining their payment. Should Seller
default in the payment or performance of any of the obligations
under this Agreement, the obligations of Seller Parent as guarantor
hereunder shall become immediately due and payable to Buyer,
without demand or notice of any nature, all of which are expressly
waived by Seller Parent.
Section 6.08 Buyer Parent
Guaranty. Buyer Parent hereby
guarantees to Seller the full, prompt and unconditional payment
when due of all obligations of Buyer to Seller under this
Agreement, including, without limitation, all indemnification
obligations set forth in Article
VIII. This
guaranty is an absolute, unconditional, irrevocable and continuing
guaranty of the full and punctual payment and performance of
Buyer’s obligations under this Agreement and not of their
collectability only and is in no way conditioned upon any
requirement that Seller first attempt to collect any of the
obligations under this Agreement from Buyer or resort to any
security or other means of obtaining their payment. Should Buyer
default in the payment or performance of any of the obligations
under this Agreement, the obligations of Buyer Parent as guarantor
hereunder shall become immediately due and payable to Seller,
without demand or notice of any nature, all of which are expressly
waived by Buyer Parent.
Section 6.09 Negative
Covenants. From the Effective
Date until the earlier to occur of the Closing Date or the
termination of this Agreement in accordance with its terms, and
except as otherwise expressly permitted elsewhere in this
Agreement, Seller shall not, and shall cause Seller Parent and its
Affiliates not to: (i) pledge, encumber, sell, or otherwise allow
any Encumbrance to be placed on, the License or any right, title,
or interest in or to the License, or (ii) take or permit any action
that would cause the License to not be in good standing or not be
transferable or would, to Seller’s Knowledge, cause any of
the representations and warranties set forth in Article IV
to become untrue.
Section 6.10 Operation of the
Business Between Signing and Closing. From the Effective Date until the earlier to
occur of the Closing Date or the termination of this Agreement in
accordance with its terms, Seller shall (i) conduct its business in
the ordinary course of business consistent with past practice, (ii)
comply in all material respects with applicable Law, including all
Laws with respect to the License.
ARTICLE VII
CONDITIONS TO CLOSING
Section 7.01 Conditions to
Obligations of All Parties. The
obligations of each party to consummate the transactions
contemplated by this Agreement shall be subject to the fulfillment,
at or prior to the Closing, of each of the following
conditions:
(a) No
Governmental Authority or stock exchange applicable to a party or
its Affiliates shall have enacted, issued, promulgated, enforced or
entered any Governmental Order or decision which is in effect and
has the effect of making the transactions contemplated by this
Agreement illegal (excluding federal illegality with regards to
marijuana being classified as a federally controlled substance),
otherwise restraining or prohibiting consummation of such
transactions or causing any of the transactions contemplated
hereunder to be rescinded following completion
thereof.
(b) The
parties shall have received the OMMU Approval.
(c) No
Action shall have been commenced or threatened against any party
that seeks to enjoin or would prevent the Closing or would have a
material impact on the License. No injunction or restraining order
shall have been issued by any Governmental Authority, and be in
effect, which restrains or prohibits any transaction contemplated
hereby.
Section 7.02 Conditions to
Obligations of Buyer. The
obligations of Buyer to consummate the transactions contemplated by
this Agreement shall be subject to the fulfillment or
Buyer’s waiver, at or prior to the Closing, of each of
the following conditions:
(a) The
representations and warranties of Seller contained in this
Agreement shall be true and correct in all respects on and as of
the date hereof and on and as of the Closing Date with the same
effect as though made at and as of such date (except those
representations and warranties that address matters only as of a
specified date, the accuracy of which shall be determined as of
that specified date in all respects), except where the failure of
such representations and warranties to be true and correct would
not have a Material Adverse Effect.
(b) Seller
shall have duly performed and complied in all material respects
with all agreements, covenants and conditions required by this
Agreement and each of the Ancillary Documents to be performed or
complied with by it prior to or on the Closing Date.
(c) The
CSE shall not have objected to the Closing of the transactions
contemplated herein.
(d) Seller
shall have delivered to Buyer duly executed counterparts to the
Ancillary Documents and such other documents and deliveries set
forth in Section
3.02(a).
(e) All
Encumbrances relating to the License shall have been released in
full, and Seller shall have delivered to Buyer written evidence, in
form satisfactory to Buyer in its sole discretion, of the release
of such Encumbrances.
(f) From
the Effective Date, there shall not have occurred a Material
Adverse Effect.
(g) Seller
shall have delivered to Buyer such other documents or instruments
as Buyer reasonably requests and are reasonably necessary to
consummate the transactions contemplated by this
Agreement.
Section 7.03 Conditions to
Obligations of Seller. The
obligations of Seller to consummate the transactions contemplated
by this Agreement shall be subject to the fulfillment or
Seller’s waiver, at or prior to the Closing, of each of
the following conditions:
(a) The
representations and warranties of Buyer contained in this Agreement
shall be true and correct in all respects on and as of the date
hereof and on and as of the Closing Date with the same effect as
though made at and as of such date (except those representations
and warranties that address matters only as of a specified date,
the accuracy of which shall be determined as of that specified date
in all respects), except where the failure of such representations
and warranties to be true and correct would not have a material
adverse effect on Buyer’s ability to consummate the transactions
contemplated hereby.
(b) Buyer
shall have duly performed and complied in all material respects
with all agreements, covenants and conditions required by this
Agreement and each of the Ancillary Documents to be performed or
complied with by it prior to or on the Closing Date.
(c) Buyer
shall have delivered to Seller duly executed counterparts to the
Ancillary Documents and such other documents and deliveries set
forth in Section
3.02(b).
(d) Buyer
shall have delivered the Purchase Price to the Escrow Agent
pursuant to Section
2.03.
(e) Seller
shall have simultaneously herewith closed the Harvest/Trulieve
Transaction.
ARTICLE VIII
INDEMNIFICATION
Section 8.01
Survival. Subject to the
limitations and other provisions of this Agreement, the
representations and warranties contained herein shall survive the
Closing and shall remain in full force and effect until the date
that is one year from the Closing Date; provided, however, that the
representations and warranties in: (i) Section
4.01, Section
4.02, Section
4.03, Section 4.06
(collectively, the “Seller Fundamental
Representations”), Section 5.01
and Section 5.06
shall survive for the full period of
all applicable statutes of limitations (giving effect to any
waiver, mitigation or extension thereof) plus 60 days. None of the
covenants or other agreements contained in this Agreement shall
survive the Closing Date other than those which by their terms
contemplate performance after the Closing Date, and each such
surviving covenant and agreement shall survive the Closing for the
period contemplated by its terms. Notwithstanding the foregoing,
any claims asserted in good faith with reasonable specificity (to
the extent known at such time) and in writing by notice from the
non-breaching party to the breaching party prior to the expiration
date of the applicable
survival period shall not thereafter be barred by the expiration of
the relevant representation or warranty and such claims shall
survive until finally resolved.
Section 8.02 Indemnification by
Seller. Subject to the other
terms and conditions of this Article
VIII, Seller shall indemnify
and defend each of Buyer and its Affiliates and their respective
Representatives (collectively, the “Buyer
Indemnitees”) against,
and shall hold each of them harmless from and against, and shall
pay and reimburse each of them for, any and all Losses incurred or
sustained by, or imposed upon, the Buyer Indemnitees based upon,
arising out of, with respect to or by reason
of:
(a) any
inaccuracy in or breach of any of the representations or warranties
of Seller contained in this Agreement, the Ancillary Documents or
in any certificate or instrument delivered by or on behalf of
Seller pursuant to this Agreement;
(b) any
breach or non-fulfillment of any covenant, agreement or obligation
to be performed by Seller pursuant to this Agreement, the Ancillary
Documents or any certificate or instrument delivered by or on
behalf of Seller pursuant to this Agreement;
(c) any
Excluded Asset or any Excluded Liability; or
(d) any
Third-Party Claim related to the foregoing that alleges facts that,
if true, would entitle the Buyer Indemnitees to recovery under
this Article
VIII.
Section 8.03 Indemnification by
Buyer. Subject to the other
terms and conditions of this Article
VIII, Buyer shall indemnify and
defend each of Seller and its Affiliates and their respective
Representatives (collectively, the “Seller
Indemnitees”) against,
and shall hold each of them harmless from and against, and shall
pay and reimburse each of them for, any and all Losses incurred or
sustained by, or imposed upon, the Seller Indemnitees based upon,
arising out of, with respect to or by reason
of:
(a) any
inaccuracy in or breach of any of the representations or warranties
of Buyer or any of its Affiliates contained in this Agreement, the
Ancillary Documents or in any certificate or instrument delivered
by or on behalf of Buyer pursuant to this Agreement;
(b) any
breach or non-fulfillment of any covenant, agreement or obligation
to be performed by Buyer or any of its Affiliates pursuant to this
Agreement, the Ancillary Documents or any certificate or instrument
delivered by or on behalf of Buyer pursuant to this Agreement;
or
(c) any
Liability arising out of or relating to Buyer’s ownership of
the License or the operation of the business to be conducted by
Buyer and its Affiliates under the License on or after the
Closing.
Section 8.04 Limits on
Indemnification. Notwithstanding anything in this
Article
VIII to the contrary, in
respect of the indemnification obligations provided for in
Section
8.02:
(a) [Basket and cap limits on Seller indemnification
obligations].
(b) Notwithstanding
the foregoing, the limitations set forth in Section 8.04(a)
shall not apply to Losses based upon,
arising out of, with respect to or by reason of (i) any inaccuracy
in or breach of any Seller Fundamental Representation or (ii) any
Fraud or willful misconduct.
(c) Any
payments by Seller pursuant to Section 8.02
in respect of any Loss shall be
limited to the amount of any liability or damage that remains after
deducting therefrom any insurance proceeds and any indemnity,
contribution or other similar payment actually received (taking
into account any increase in insurance premiums relating to
recovery under any such applicable insurance policy) by Buyer in
respect of any such claim. Buyer shall use its commercially
reasonable efforts to recover under insurance policies or
indemnity, contribution or other similar agreements for any Losses
prior to seeking indemnification under this
Agreement.
(d) Buyer
shall take, and cause its Affiliates to take, all reasonable steps
to mitigate any Loss upon becoming aware of any event or
circumstance that would be reasonably expected to, or does, give
rise thereto, including incurring costs only to the minimum extent
necessary to remedy the breach that gives rise to such
Loss.
Section 8.05 Indemnification
Procedures. The party making a
claim under this Article VIII
is referred to as the
“Indemnified
Party”, and the party against whom such claims are
asserted under this Article VIII
is referred to as the
“Indemnifying
Party.”
(a) Third-Party
Claims. If any Indemnified
Party receives notice of the assertion or commencement of any
Action made or brought by any Person who is not a party to this
Agreement or an Affiliate of a party to this Agreement or a
Representative of the foregoing (a “Third-Party
Claim”) against such Indemnified Party with respect to
which the Indemnifying Party is obligated to provide
indemnification under this Agreement, the Indemnified Party shall
give the Indemnifying Party prompt written notice thereof, but in
any event no later than five Business Days after the Indemnified
Party becomes aware of such Third-Party Claim. The failure to give
such prompt written notice shall not, however, relieve the
Indemnifying Party of its indemnification obligations, except and
only to the extent that the Indemnifying Party forfeits material
rights or material defenses by reason of such failure. Such notice
by the Indemnified Party shall describe the Third-Party Claim in
reasonable detail, shall include copies of all material written
evidence thereof and shall indicate the estimated amount, if
reasonably practicable, of the Loss that has been or may be
sustained by the Indemnified Party. The Indemnifying Party shall
have the right to participate in, or by giving written notice to
the Indemnified Party within three Business Days following receipt
of notice of such Third-Party Claim, to assume the defense of any
Third-Party Claim at the Indemnifying Party’s expense and by the Indemnifying
Party’s own counsel, and the Indemnified Party shall
cooperate in good faith in such defense. In the event that the
Indemnifying Party assumes the defense of any Third-Party Claim,
subject to Section
8.05(b), it
shall have the right to take such action as it deems necessary to
avoid, dispute, defend, appeal or make counterclaims pertaining to
any such Third-Party Claim in the name and on behalf of the
Indemnified Party. The Indemnified Party shall have the right, at
its own cost and expense, to participate in the defense of any
Third-Party Claim with counsel selected by it subject to the
Indemnifying Party’s right to control the defense thereof. If the
Indemnifying Party elects not to compromise or defend such
Third-Party Claim or fails to promptly notify the Indemnified Party
in writing of its election to defend as provided in this Agreement,
the Indemnified Party may, subject to Section
8.05(b), pay, compromise,
defend such Third-Party Claim and seek indemnification for any and
all Losses based upon, arising from or relating to such Third-Party
Claim. Seller and Buyer shall cooperate with each other in all
reasonable respects in connection with the defense of any
Third-Party Claim, including making available (subject to the
provisions of Section
6.01) records relating to such
Third-Party Claim and furnishing, without expense (other than
reimbursement of actual out-of-pocket expenses) to the defending
party, management employees of the non-defending party as may be
reasonably necessary for the preparation of the defense of such
Third-Party Claim.
(b) Settlement of
Third-Party Claims.
Notwithstanding any other provision of this Agreement, the
Indemnifying Party shall not enter into settlement of any
Third-Party Claim without the prior written consent of the
Indemnified Party (which consent shall not be unreasonably
withheld, conditioned or delayed), except as provided in
this Section
8.05(b). If a firm offer is
made to settle a Third-Party Claim and such offer (i) does not lead
to liability or the creation of a financial or other obligation on
the part of the Indemnified Party, (ii) in the reasonable opinion
of the Indemnified Party, would not be material adverse to its
business or the License and (iii) provides, in customary form, for
the unconditional release of each Indemnified Party from all
Liabilities in connection with such Third-Party Claim and the
Indemnifying Party desires to accept and agree to such offer, the
Indemnifying Party shall give written notice to that effect to the
Indemnified Party. If the Indemnified Party fails to consent to
such firm offer within ten (10) Business Days after its receipt of
such notice, the Indemnified Party may continue to contest or
defend such Third-Party Claim and in such event, the maximum
liability of the Indemnifying Party as to such Third-Party Claim
shall not exceed the amount of such settlement offer. If the
Indemnified Party fails to consent to such firm offer and also
fails to assume defense of such Third-Party Claim, the Indemnifying
Party may settle the Third-Party Claim upon the terms set forth in
such firm offer to settle such Third-Party Claim. If the
Indemnified Party has assumed the defense pursuant to
Section
8.05(a), it shall not agree to
any settlement without the written consent of the Indemnifying
Party (which consent shall not be unreasonably withheld,
conditioned or delayed).
(c) Direct
Claims. Any indemnification
claim by an Indemnified Party on account of a Loss which does not
result from a Third-Party Claim (a “Direct
Claim”) shall be asserted by the Indemnified Party
giving the Indemnifying Party prompt written notice thereof, but in
any event not later than five Business Days after the Indemnified
Party becomes aware of such Direct Claim. The failure to give such
prompt written notice shall not, however, relieve the Indemnifying
Party of its indemnification obligations, except and only to the
extent that the Indemnifying Party forfeits rights or defenses by
reason of such failure. Such notice by the Indemnified Party shall
describe the Direct Claim in reasonable detail, shall include
copies of all material written evidence thereof and shall indicate
the estimated amount, if reasonably practicable, of the Loss that
has been or may be sustained by the Indemnified Party. The
Indemnifying Party shall have 30 days after its receipt of such
notice to respond in writing to such Direct Claim. The Indemnified
Party shall allow the Indemnifying Party and its professional
advisors to investigate the matter or circumstance alleged to give
rise to the Direct Claim, and whether and to what extent any amount
is payable in respect of the Direct Claim and the Indemnified Party
shall assist the Indemnifying Party’s investigation by giving such information and
assistance (including access to the Indemnified
Party’s premises and personnel and the right to examine
and copy any accounts, documents or records) as the Indemnifying
Party or any of its professional advisors may reasonably request.
If the Indemnifying Party does not so respond
within
such 30-day period, the Indemnifying Party shall be deemed to have
rejected such claim, in which case the Indemnified Party shall be
free to pursue such remedies as may be available to the Indemnified
Party on the terms and subject to the provisions of this
Agreement.
Section 8.06 Tax Treatment of
Indemnification Payments. All
indemnification payments made under this Agreement shall be treated
by the parties as an adjustment to the Purchase Price for Tax
purposes, unless otherwise required by Law.
Section 8.07 Exclusive
Remedies. Subject to
Section
10.12, the parties acknowledge
and agree that their sole and exclusive remedy with respect to any
and all claims (other than claims arising from Fraud on the part of
a party hereto in connection with the transactions contemplated by
this Agreement) for any breach of any representation, warranty,
covenant, agreement or obligation set forth herein or otherwise
relating to the subject matter of this Agreement, shall be pursuant
to the indemnification provisions set forth in this
Article
VIII. In furtherance of the
foregoing, except with respect to Section
10.12, each party hereby
waives, to the fullest extent permitted under Law, any and all
rights, claims and causes of action for any breach of any
representation, warranty, covenant, agreement or obligation set
forth herein or otherwise relating to the subject matter of this
Agreement it may have against the other party hereto and its
Affiliates and each of their respective Representatives arising
under or based upon any Law, except pursuant to the indemnification
provisions set forth in this Article
VIII. Nothing in this
Section
8.07 shall limit any
Person’s right to seek and obtain any equitable relief to
which any Person shall be entitled pursuant to Section 10.12
or to seek any remedy on account of
Fraud by any party hereto.
ARTICLE IX
TERMINATION
Section 9.01
Termination. This Agreement may
be terminated at any time prior to the Closing:
(a) by
the mutual written consent of Seller and Buyer;
(b) by
Buyer by written notice to Seller if Buyer is not then in material
breach of any provision of this Agreement and there has been a
breach, inaccuracy in or failure to perform any representation,
warranty, covenant or agreement made by Seller pursuant to this
Agreement that would give rise to the failure of any of the
conditions specified in Article VII
and such breach, inaccuracy or failure
has not been cured by Seller within 10 days of
Seller’s receipt of written notice of such breach from
Buyer, unless such failure shall be due to the failure of Buyer to
perform or comply with any of the covenants, agreements or
conditions hereof to be performed or complied with by it prior to
the Closing;
(c) by
Seller by written notice to Buyer if Seller is not then in material
breach of any provision of this Agreement and there has been a
breach, inaccuracy in or failure to perform any representation,
warranty, covenant or agreement made by Buyer pursuant to this
Agreement that would give rise to the failure of any of the
conditions specified in Article VII
and such breach, inaccuracy or failure
has not been cured by Buyer within 10 days of
Buyer’s receipt of written notice of such breach from
Seller, unless such failure shall be due to the failure of Seller
to perform or
comply with any of the covenants, agreements or conditions hereof
to be performed or complied with by it prior to the
Closing;
(d) by
Buyer or Seller in the event that: (i) there shall be any Law that
makes consummation of the transactions contemplated by this
Agreement illegal or otherwise prohibited; or (ii) any Governmental
Authority shall have issued a Governmental Order restraining or
enjoining the transactions contemplated by this Agreement, and such
Governmental Order shall have become final and
non-appealable;
(e) by
Seller by written notice to Buyer if the OMMU Approval has not been
obtained by the date that is 90 days from the Effective Date (the
“Outside
Date”); provided,
however, that Seller may elect to extend the Outside Date for
additional 30-day periods until May 1, 2022 by written notice to
Buyer no later than three Business Days prior to the Outside Date
and the expiration of any applicable 30-day period; provided,
further, that the right to terminate this Agreement under
this Section 9.01(e)
shall not be available to Seller if
Seller’s failure to fulfill in any material respect any
covenant, agreement or obligation to be performed by Seller
pursuant to this Agreement is the primary cause of the failure to
obtain the OMMU Approval on or before the Outside
Date;
(f) by
Seller by written notice to Buyer upon any termination of the
Arrangement Agreement; or
(g) by
Buyer by written notice to Seller if Closing shall not have
occurred by May 1, 2022; provided, that the right to terminate this
Agreement under this Section 9.01(g)
shall not be available to Buyer if
Buyer’s failure to fulfill in any material respect any
covenant, agreement or obligation to be performed by Buyer pursuant
to this Agreement is the primary cause of the failure to close on
or before May 1, 2022.
Section 9.02 Effect of
Termination. In the event of
the termination of this Agreement in accordance with this
Article
IX, this Agreement shall
forthwith become void and there shall be no liability on the part
of any party hereto except:
(a) as
set forth in Section
6.01, this Article IX
and Article X
hereof;
(b) (i)
if this Agreement is terminated pursuant to Section 9.01(c)
or Section
9.01(e), then Buyer and Seller
shall promptly provide joint written instructions to the Escrow
Agent instructing the Escrow Agent to release the Initial Deposit
to Seller, and Seller shall retain the Initial Deposit in
consideration of the opportunity cost of the Company’s
exclusivity with Buyer pursuant to this Agreement; and (ii) if this
Agreement is terminated pursuant to any other subsection of
Section
9.01, then Buyer and Seller
shall promptly provide joint written instructions to the Escrow
Agent instructing the Escrow Agent to release the Initial Deposit
to Buyer;
(c) if
this Agreement is terminated pursuant to Section
9.01(a), Section
9.01(b), Section
9.01(d), Section
9.01(e), Section 9.01(f)
or Section
9.01(g), and Buyer has
deposited the Remaining Deposit with the Escrow Agent pursuant
to Section
2.03, then Buyer and Seller
shall promptly provide joint written instructions to the Escrow
Agent instructing the Escrow Agent to release the Remaining Deposit
to Buyer;
(d) if
this Agreement is terminated pursuant to Section
9.01(c), Buyer will pay to
Seller as liquidated damages $2,000,000 (the
“Termination
Fee”) as follows: (i) if
Buyer has not yet deposited the Remaining Deposit with the Escrow
Agent pursuant to Section 2.03
at the time of such termination, then
by wire transfer of immediately available funds within five
Business Days after such termination; or (ii) if Buyer has already
deposited the Remaining Deposit with the Escrow Agent pursuant
to Section 2.03
at the time of such termination, then
Buyer and Seller shall promptly provide joint written instructions
to the Escrow Agent instructing the Escrow Agent to release the
Termination Fee to Seller and the remaining amount of the Remaining
Deposit to Buyer; and
(e) that
nothing herein shall relieve any party hereto from liability for
any intentional breach of any provision hereof.
The parties acknowledge that the agreements contained in
Section
9.02(b)(i) and
Section
9.02(d) are an integral part of
the transactions contemplated by this Agreement, and that without
these agreements the parties would not enter into this Agreement,
and that the releasing of the Initial Deposit to Seller in
accordance with Section
9.02(b)(i) and the Termination
Fee represent liquidated damages, which are a genuine pre-estimate
of the damages, including opportunity costs, which the Seller will
suffer or incur as a result of the event giving rise to such
damages and resultant termination of this Agreement, and are not
penalties. Buyer irrevocably waives any rights it may have to raise
as a defense that any such liquidated damages are excessive or
punitive. Seller agrees that the payment of the Initial Deposit to
Seller under Section
9.02(b)(i) and the Termination
Fee are the sole remedies of Seller against Buyer in respect of the
termination of this Agreement pursuant to Section 9.01(c)
or Section
9.01(e), as applicable;
provided however, that nothing shall preclude Seller from pursuing
additional damages, including for lost opportunities or other
consequential losses, in the event of any intentional breach by
Buyer of any provision hereof.
ARTICLE X
MISCELLANEOUS
Section 10.01
Expenses. Except as otherwise
expressly provided herein, all costs and expenses, including,
without limitation, fees and disbursements of counsel, financial
advisors and accountants, incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by
the party incurring such costs and expenses, whether or not the
Closing shall have occurred.
Section 10.02
Notices. All notices, requests,
consents, claims, demands, waivers and other communications
hereunder shall be in writing and shall be deemed to have been
given: (a) when delivered by hand (with written confirmation of
receipt); (b) when received by the addressee if sent by a
nationally recognized overnight courier (receipt requested); (c) on
the date sent by facsimile or e-mail of a PDF document (with
confirmation of transmission) if sent during normal business hours
of the recipient, and on the next Business Day if sent after normal
business hours of the recipient or (d) on the third day after the
date mailed, by certified or registered mail, return receipt
requested, postage prepaid. Such communications must be sent to the
respective parties at the following addresses (or at such other
address for a party as shall be specified in a notice given in
accordance with this Section
10.02):
If
to Buyer or Buyer Parent: [Buyer contact information]
If
to Seller or Seller Parent: [Seller contact
information]
Section 10.03
Interpretation. For purposes of
this Agreement: (a) the words “include,”
“includes” and “including” shall be deemed
to be followed by the words “without limitation”; (b)
the word “or” is not exclusive; and (c) the words
“herein,” “hereof,” “hereby,”
“hereto” and “hereunder” refer to this
Agreement as a whole. Unless the context otherwise requires,
references herein: (x) to Articles, Sections, Disclosure Schedules
and Exhibits mean the Articles and Sections of, and Disclosure
Schedules and Exhibits attached to, this Agreement, if any; (y) to
an agreement, instrument or other document means such agreement,
instrument or other document as amended, supplemented and modified
from time to time to the extent permitted by the provisions thereof
and (z) to a statute means such statute as amended from time to
time and includes any successor legislation thereto and any
regulations promulgated thereunder. This Agreement shall be
construed without regard to any presumption or rule requiring
construction or interpretation against the party drafting an
instrument or causing any instrument to be drafted. The Disclosure
Schedules, if any, and Exhibits referred to herein shall be
construed with, and as an integral part of, this Agreement to the
same extent as if they were set forth verbatim
herein.
Section 10.04 Disclosure
Schedules. To the extent there
are Disclosure Schedules attached to this Agreement, this
Section
10.04 shall apply. All section
headings in the Disclosure Schedules correspond to the sections of
this Agreement, but information provided in any section of the
Disclosure Schedules shall constitute disclosure for purposes of
each section of this Agreement where such information is relevant.
Unless the context otherwise requires, all capitalized terms used
in the Disclosure Schedules shall have the respective meanings
assigned to such terms in this Agreement. Certain information set
forth in the Disclosure Schedules is included solely for
informational purposes, and may not be required to be disclosed
pursuant to this Agreement. No reference to or disclosure of any
item or other matter in the Disclosure Schedules shall be construed
as an admission or indication that such item or other matter is
required to be referred to or disclosed in the Disclosure
Schedules. No disclosure in the Disclosure Schedules relating to
any possible breach or violation of any agreement or Law shall be
construed as an admission or indication that any such breach or
violation exists or has actually occurred. The inclusion of any
information in the Disclosure Schedules shall not be deemed to be
an admission or acknowledgment by Seller that in and of itself,
such information is material to or outside the ordinary course of
the business or is required to be disclosed on the Disclosure
Schedules. No disclosure in the Disclosure Schedules shall be
deemed to create any rights in any third party.
Section 10.05
Headings. The headings in this
Agreement are for reference only and shall not affect the
interpretation of this Agreement.
Section 10.06
Severability. If any term or
provision of this Agreement is invalid, illegal or unenforceable in
any jurisdiction, such invalidity, illegality or unenforceability
shall not affect any other term or provision of this Agreement or
invalidate or render unenforceable such term or
provision
in any other jurisdiction. Upon such determination that any term or
other provision is invalid, illegal or unenforceable, the parties
hereto shall negotiate in good faith to modify this Agreement so as
to effect the original intent of the parties as closely as possible
in a mutually acceptable manner in order that the transactions
contemplated hereby be consummated as originally contemplated to
the greatest extent possible.
Section 10.07 Entire
Agreement. This Agreement and
the Ancillary Documents constitute the sole and entire agreement of
the parties to this Agreement with respect to the subject matter
contained herein and therein, and supersede all prior and
contemporaneous understandings and agreements, both written and
oral, with respect to such subject matter. In the event of any
inconsistency between the statements in the body of this Agreement
and those in the Ancillary Documents, the Exhibits and Disclosure
Schedules, if any (other than an exception expressly set forth as
such in the Disclosure Schedules), the statements in the body of
this Agreement will control.
Section 10.08 Successors and
Assigns. This Agreement shall
be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and permitted assigns.
Neither party may assign its rights or obligations hereunder
without the prior written consent of the other party, which consent
shall not be unreasonably withheld or delayed. No assignment shall
relieve the assigning party of any of its obligations
hereunder.
Section 10.09 No Third-Party
Beneficiaries. Except as
provided in Article
VIII, this Agreement is for the
sole benefit of the parties hereto and their respective successors
and permitted assigns and nothing herein, express or implied, is
intended to or shall confer upon any other Person or entity any
legal or equitable right, benefit or remedy of any nature
whatsoever under or by reason of this
Agreement.
Section 10.10 Amendment and
Modification; Waiver. This
Agreement may only be amended, modified or supplemented by an
agreement in writing signed by each party hereto. No waiver by any
party of any of the provisions hereof shall be effective unless
explicitly set forth in writing and signed by the party so waiving.
No waiver by any party shall operate or be construed as a waiver in
respect of any failure, breach or default not expressly identified
by such written waiver, whether of a similar or different
character, and whether occurring before or after that waiver. No
failure to exercise, or delay in exercising, any right, remedy,
power or privilege arising from this Agreement shall operate or be
construed as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of
any other right, remedy, power or privilege.
Section 10.11 Governing Law; Submission to Jurisdiction; Waiver of
Jury Trial.
(a) This
Agreement shall be governed by and construed in accordance with the
internal laws of the State of Florida without giving effect to any
choice or conflict of law provision or rule (whether of the State
of Florida or any other jurisdiction).
(b) ANY
LEGAL SUIT, ACTION OR PROCEEDING ARISING OUT OF OR BASED UPON THIS
AGREEMENT, THE ANCILLARY DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY MUST BE INSTITUTED IN THE ▇▇▇▇ COUNTY CIRCUIT COURT LOCATED IN
TALLAHASSEE, FLORIDA, AND EACH PARTY IRREVOCABLY SUBMITS TO THE
EXCLUSIVE JURISDICTION OF SUCH COURT IN ANY SUCH SUIT, ACTION OR
PROCEEDING. SERVICE OF PROCESS, SUMMONS, NOTICE OR OTHER DOCUMENT
BY MAIL TO SUCH PARTY’S ADDRESS SET FORTH HEREIN SHALL BE EFFECTIVE
SERVICE OF PROCESS FOR ANY SUIT, ACTION OR OTHER PROCEEDING BROUGHT
IN SUCH COURT. THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVE
ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR ANY
PROCEEDING IN SUCH COURT AND IRREVOCABLY WAIVE AND AGREE NOT TO
PLEAD OR CLAIM IN SUCH COURT THAT ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
(c) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY
CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT OR THE ANCILLARY
DOCUMENTS IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES
AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE
ANCILLARY DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY. EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES
THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO
ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B)
SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH
PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION
10.11(c).
Section 10.12 Specific
Performance. The parties agree
that irreparable damage would occur if any provision of this
Agreement were not performed in accordance with the terms hereof
and that the parties shall be entitled to specific performance of
the terms hereof, in addition to any other remedy to which they are
entitled at law or in equity.
Section 10.13
Reformation. This Agreement and
the transactions contemplated herein may be subject to review and
approval by one or more Governmental Authority, including but not
limited to the OMMU and applicable local licensing authorities. If
a Governmental Authority determines this Agreement or any Ancillary
Document must be reformed, the parties shall negotiate in good
faith to so reform such agreement according to the Governmental
Authority’s requirements while effectuating the original
intent of such agreement as near as possible.
Section 10.14
Counterparts. This Agreement
may be executed in counterparts, each of which shall be deemed an
original, but all of which together shall be deemed to be one and
the same agreement. A signed copy of this Agreement delivered by
facsimile, email or other means of electronic transmission shall be
deemed to have the same legal effect as delivery of an original
signed copy of this Agreement.
[Signature Page Follows]
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date first written above by their respective
authorized agents.
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BUYER:
[Buyer]
/s/ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Co-CEO
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title:
Co-CEO
BUYER PARENT:
/s/ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Co-CEO
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title:
Co-CEO
SELLER:
[Seller]
/s/ ▇▇▇▇▇ ▇▇▇▇▇
Name:
▇▇▇▇▇ ▇▇▇▇▇
Title:
Chief Executive Officer
SELLER
PARENT:
Harvest
Health & Recreation, Inc.
/s/ ▇▇▇▇▇ ▇▇▇▇▇
Name:
▇▇▇▇▇ ▇▇▇▇▇
Title:
Chief Executive Officer
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Exhibit A
FORM OF ▇▇▇▇ OF SALE
For good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, [Seller], a Florida
corporation (“Seller”),
does hereby grant, bargain, transfer, sell, assign, convey and
deliver to [Buyer], a Florida corporation
(“Buyer”),
all of its right, title, and interest in and to the License, as
such term is defined in the License Purchase Agreement, dated as of
August 31, 2021 (the “Purchase
Agreement”), by and
between Seller and Buyer, to have and to hold the same unto Buyer,
its successors and assigns, forever.
Buyer
acknowledges that Seller makes no representation or warranty with
respect to the License except as specifically set forth in the
Purchase Agreement.
IN
WITNESS WHEREOF, Seller has duly executed this ▇▇▇▇ of Sale as of
[DATE]
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SELLER:
[Seller]
Name:
▇▇▇▇▇ ▇▇▇▇▇
Title:
Chief Executive Officer
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Schedule 1
BUYER’S PLAN OF OPERATION
1. A
description of Buyer’s technical and technological ability to
cultivate and produce marijuana, including, but not limited to,
low-THC cannabis, and a summary of the methods that will be
utilized to cultivate and produce such products in
Florida.
2. A
description of Buyer’s ability to secure the premises,
resources, and personnel necessary to operate as a medical
marijuana treatment center.
3. A
description of Buyer’s ability to maintain accountability of
all raw materials, finished products, and any byproducts to prevent
diversion or unlawful access to or possession of these
substances.
4. A
description of Buyer’s current and intended infrastructure
that will be utilized to cultivate, process, and dispense
marijuana, including a timeline for buildout of all such
infrastructure.
5. A
description of Buyer’s financial ability to maintain
operations for the duration of the 2-year approval
cycle.
6. An
organization chart listing all Buyer’s owners, officers,
directors, and managers.
7. A
description of the medical director who will be employed to
supervise Buyer’s medical marijuana treatment center
activities, including a curriculum vitae, copy of the medical
director’s license, and a copy of the continuing education
certificate required for medical directors.