WDB HOLDING PA, INC.
WDB HOLDING PA, INC.
December 4, 2023
TO: |
Acquiom Agency Services LLC 000 00xx Xxxxxx, Xxxxx 0000 Xxxxxx, XX 00000 Attention: Xxxx XxXxxx-Xxxxx Email: xxxxxxxxxx@xxxxxxxxxx.xxx |
|
cc: Xxxx Xxxx (email: xxxxxxxx@xxxxxxxxxxxx.xxx) (Xxxx Xxxxxxxx) |
RE: |
Credit Agreement, dated as of December 18, 2020 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among WDB Holding PA, Inc., as borrower, each Lender from time to time party thereto, and Acquiom Agency Services LLC, as Administrative Agent and Collateral Agent. Capitalized terms used in this posting memo shall have the meanings ascribed to them in the Credit Agreement. |
AMENDMENT REQUEST NO. 7
Amendment Request
We are grateful for your continued commitment and support as Lenders under the Credit Agreement. In lieu of depositing cash into a Blocked Account, WDB Holding PA, Inc. (the “Borrower”) has discussed with certain Xxxxxxx a proposal to require the Borrower to make prepayments of the principal of the Loan in exchange for credits towards the Consolidated Interest Coverage Ratio calculation. Furthermore, the parties have discussed certain technical adjustments as outlined herein.
In connection therewith, the Borrower is requesting certain amendments to the Credit Agreement, as set forth in the proposed Amendment No. 7 to Credit Agreement attached hereto (the “Seventh Amendment”). Pursuant to Section 9.02(b) of the Credit Agreement, no amendment or waiver of any provision of the Credit Agreement shall be effective unless in writing executed by the Borrower and the Agent with the consent of the applicable percentage of Lenders. Capitalized terms used herein shall have the same meaning ascribed to such terms in the Seventh Amendment and the Credit Agreement (as amended by the Seventh Amendment).
Subject to the terms and conditions set forth in the Seventh Amendment (a draft of which is posted herewith), the Borrower hereby requests your consent to certain amendments to the Credit Agreement set forth in the Seventh Amendment, which include, but are not limited to, the following:
Amendment Request – WBD Holding PA, Inc
Amendment.
Reimbursement of Expenses
The Borrower shall reimburse the Administrative Agent and the Lenders for all reasonable and documented legal fees and other reasonable out-of-pocket expenses incurred in connection with the Seventh Amendment.
Consent and Direction
If you are in agreement with the amendments set forth in the Seventh Amendment and subject to the conditions set forth herein and the execution of satisfactory amendment documentation, kindly execute and return to the Administrative Agent, by no later than 5:00 p.m. EST on December 5, 2023, your executed signature page to this Amendment Request No. 7, a form of which is attached hereto. Your return of such executed signature page to the Administrative Agent authorizes and directs the Administrative Agent to deliver the Seventh Amendment on your behalf.
We look forward to your continuing support.
Sincerely,
[REMAINDER OF PAGE INTENTIONALLY BLANK]
DocuSign Envelope ID: 08FA5FE4-0A28-42CF-8885-BA0250172A08
Amendment Request – WBD Holding PA, Inc.
WDB HOLDING PA, INC.
By: /s/ Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx
Title: Chief Financial Officer Date: December 5 , 2023
CAPSTONE HOLDINGS INC.
By: /s/Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Chairman/CEO
[Signature Page – WDB - Amendment No.7]
Cedarview Opportunities Master Fund LP
By: /s/Xxxxxxx Xxxx
Name: Xxxxxxx Xxxx
Title: Chief Compliance Office
[Lender Consent Form Signature Page]
DocuSign Envelope ID: 8249566C-E917-4348-9B10-B0C6930B5CAA
Graticule Asia Macro Master Fund Ltd.
By: /s/Xxxx Xxxxxxxx
Name: Xxxx Xxxxxxxx
Title:
[Lender Consent Form Signature Page]
[LENDER]
By: /s/Xxxxx Xxxxxxxxx
Name: Title:
Xxxxx Xxxxxxxxx Authorized Signatory
[Lender Consent Form Signature Page]
Xxxxxx QIF Fund PLC – Mercer Investment Fund 1
By: Millstreet Capital Management LLC, its Sub- Investment Manager
By: /s/Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Managing Member
[Lender Consent Form Signature Page]
MILLSTREET CREDIT FUND LP
By: Millstreet Capital Partners LLC, its General Partner
By: /s/Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Managing Member
[Lender Consent Form Signature Page]
MYDA Advantage, LP
By: /s/Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Managing Member of the GP
[Lender Consent Form Signature Page]
DocuSign Envelope ID: E449529E-8DD8-4CBC-ACE2-9C24D6EA4AE5
XXXXXX CORPORATE BOND FUND
By: /s/Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Lead Portfolio Manager, Fixed Income
[Lender Consent Form Signature Page]
VR Global Partners, L.P.
By: /s/Emile du Toit
Name: Emile du Toit
Title: Authorised Signatory
[Lender Consent Form Signature Page]
AMENDMENT NO. 7 TO CREDIT AGREEMENT
AMENDMENT NO. 7 TO CREDIT AGREEMENT, dated December 5, 2023 (this
“Seventh Amendment”), is made by and among WDB Holding PA, Inc., a Pennsylvania corporation (the “Borrower”), the Loan Parties party hereto and Acquiom Agency Services LLC, as administrative agent (in such capacity, the “Administrative Agent”) and as collateral agent (in such capacity, the “Collateral Agent”).
RECITALS:
WHEREAS, reference is hereby made to the Credit Agreement, dated as of December 18, 2020, as amended by Amendment No. 1 thereto, dated as of April 28, 2022, Amendment No. 2, dated as of November 11, 2022, and Amendment No. 3, dated as of December 15, 2022, Amendment No. 4 dated March 15, 2023, Amendment No. 5, dated as of April 17, 2023, and Amendment No. 6, dated as of June 22, 2023 (as further amended, amended and restated, supplemented or otherwise modified from time to time prior to the date hereof, the “Existing Credit Agreement”, and as amended by this Seventh Amendment, the “Amended Credit Agreement”), by and among the Borrower, the Lenders from time to time party thereto, the Administrative Agent and the Collateral Agent (capitalized terms used but not defined herein having the meaning provided in the Amended Credit Agreement);
WHEREAS, the Borrower has requested that the Lenders consent to certain amendments to the Credit Agreement on the terms set forth herein, which amendments are permitted with the consent of the Lenders as required by Section 9.02(b) of the Existing Credit Agreement;
WHEREAS, the Administrative Agent has received consent to the amendments contemplated hereby from such Xxxxxxx and, accordingly, on behalf of such Xxxxxxx, consents, on the terms and subject to the conditions set forth below, to this Seventh Amendment; and
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties signatory hereto agree as follows:
SECTION 1. Defined Terms. Capitalized terms used in this Seventh Amendment, including in the preamble and the recitals hereto, and not otherwise defined herein, shall have the meanings assigned to such terms in the Amended Credit Agreement.
SECTION 2. Amendments to Existing Credit Agreement. Subject to the satisfaction of the conditions set forth in Section 3 and in reliance upon the representations and warranties of the Loan Parties set forth in Section 4, the Existing Credit Agreement is hereby amended in its entirety 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 on Exhibit A hereto.
SECTION 3. Conditions to Effectiveness. This Seventh Amendment shall not become effective until each of the following conditions precedent have been satisfied (such date referred to herein as the “Seventh Amendment Effective Date”):
Upon the occurrence of the Seventh Amendment Effective Date, the Administrative Agent shall provide a notice to the Parent, the Borrower, the Guarantors and the Lenders confirming that the Seventh Amendment Effective Date has occurred.
SECTION 4. Representations and Warranties. The Borrower and each other Loan Party represents and warrants to the Administrative Agent, the Collateral Agent and the Lenders on the date hereof that:
SECTION 5. Reaffirmation. Each Loan Party consents to the amendment of the Credit Agreement effected hereby and confirms and agrees that, notwithstanding the effectiveness of this Seventh Amendment, each Loan Document to which such Loan Party is a party is, and the obligations of such Loan Party contained in the Credit Agreement, this Seventh Amendment or in any other Loan Document to which it is a party are, and shall continue to be, in full force and effect and are hereby ratified and confirmed in all respects, in each case, as amended by this Seventh Amendment. For greater certainty and without limiting the foregoing, each Loan Party hereby reaffirms (i) its grant to the Collateral Agent, for the benefit of the Lenders, of a continuing security interest in and Lien upon the Collateral of such Loan Party, whether now owned or hereafter acquired or arising, and wherever located, all as provided in the Loan Documents, and further acknowledges and agrees that the Loan Documents continue to secure the Obligations, as modified pursuant to this Seventh Amendment, to the same extent as prior to giving effect to this Seventh Amendment, and (ii) its obligations under the
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Guaranty Agreement shall remain in full force and effect after giving effect to this Seventh Amendment and the obligations under this this Seventh Amendment constitute “Obligations” for the purposes of the Guarantee in accordance with the terms therein.
SECTION 6. Amendment, Modification and Waiver. This Seventh Amendment may not be amended, modified or waived except as permitted by Section 9.02 of the Credit Agreement.
SECTION 7. Entire Agreement. This Seventh Amendment and the other Loan 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. On and after the Seventh Amendment Effective Date, each reference in the Credit Agreement to “this Seventh Amendment”, “hereunder,” “hereof” or words of like import referring the Credit Agreement, and each reference in the other Loan 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 Amended Credit Agreement.
SECTION 8. Governing Law and Waiver of Right to Trial by Jury. THIS SEVENTH AMENDMENT AND ANY CLAIM, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF, OR RELATING TO THIS SEVENTH AMENDMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. The jurisdiction, waiver of venue, waiver of defense of illegality, service of process and waiver of right to trial by jury provisions in Section 9.09(b) through (e) and Section 9.10 of the Credit Agreement are incorporated herein by reference, mutatis mutandis.
SECTION 9. Severability. To the extent permitted by law, any provision of this Seventh Amendment held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions thereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.
SECTION 10. Counterparts; Electronic Signature. This Seventh Amendment may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Counterparts may be delivered via facsimile, electronic mail (including any electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic Signatures and Records Act or other applicable law, e.g., xxx.xxxxxxxx.xxx) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes. Delivery of an executed counterpart of a signature page of this Seventh Amendment by facsimile or by email as a “.pdf” or “.tif” attachment shall be effective as delivery of an original executed counterpart of this Seventh Amendment.
SECTION 11. Loan Document; No Novation. On and after the Seventh Amendment Effective Date, this Seventh Amendment shall constitute a “Loan Document” for all purposes of the Amended Credit Agreement and the other Loan Documents (it being understood that for the avoidance of doubt this Seventh Amendment may be amended or waived solely by the parties hereto as set forth
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in 7 above). This Seventh Amendment shall not constitute a novation of the Credit Agreement or any of the Loan Documents.
SECTION 12. Lender Direction. Each Lender required to execute this Seventh Amendment pursuant to the Existing Credit Agreement and by its execution hereof, hereby authorizes and directs the Administrative Agent to execute and deliver this Seventh Amendment on the date hereof.
SECTION 13. No Course of Dealing. This Seventh Amendment shall not establish a course of dealing or be construed as evidence of any willingness on any Lender’s part to grant other or future amendments, extensions or modifications, should any be requested.
[signature pages to follow]
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IN WITNESS WHEREOF, each of the undersigned has caused this Seventh Amendment to be duly executed by their respective authorized officers as of the day and year first above written.
WDB HOLDING PA, INC., as Borrower
By: /s/Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx
Title: Authorized Signatory
TERRASCEND CORP., as a Loan Party
By: /s/Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx
Title: Chief Financial Officer
TERRASCEND USA, INC., as a Loan Party
By: /s/Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx
Title: Authorized Signatory
IHC MANAGEMENT LLC, as a Loan Party
By: /s/Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx
Title: Authorized Signatory
[Signature Page 
WDB - Amendment No. 7]
ILERA HEALTHCARE LLC, as a Loan Party
By: /s/Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx
Title: Authorized Signatory
ILERA DISPENSING LLC, as a Loan Party
By: /s/Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx
Title: Authorized Signatory
IHC REAL ESTATE GP, LLC, as a Loan Party
By: /s/Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx
Title: Authorized Signatory
IHC REAL ESTATE LP, as a Loan Party
By: IHC Real Estate GP, LLC, its General Partner
By: /s/Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx
Title: Authorized Signatory
ILERA SECURITY LLC, as a Loan Party
By: /s/Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx
Title: Authorized Signatory
[Signature Page 
WDB - Amendment No.7]
235 MAIN STATE MERCERSBURG LLC, as a
Loan Party
By: /s/Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx
Title: Authorized Signatory
ILERA INVESTCO I, LLC, as a Loan Party
By: /s/Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx
Title: Authorized Signatory
ILERA DISPENSING 2 LLC, as a Loan Party
By: /s/Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx
Title: Authorized Signatory
ILERA DISPENSING 3 LLC, as a Loan Party
By: /s/Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx
Title: Authorized Signatory
GUADCO LLC, as a Loan Party
By: /s/Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx
Title: Authorized Signatory
[Signature Page 
WDB - Amendment No.7]
KCR HOLDINGS LLC, as a Loan Party
By: /s/Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx
Title: Authorized Signatory
PA STORE 299 LLC, as a Loan Party
By: /s/Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx
Title: Authorized Signatory
[Signature Page 
WDB - Amendment No.7]
ACQUIOM AGENCY SERVICES LLC, as
Administrative Agent and as Collateral Agent
By: /s/Xxxxxxxx Xxxxx
Name: Xxxxxxxx Xxxxx
Title: Senior Director
[Signature Page – WDB - Amendment No.7]
Exhibit A to Amendment No.7 dated as of December 5, 2023
CREDIT AGREEMENT
dated as of December 18, 2020 between
WDB HOLDING PA, INC.,
The LENDERS Party Hereto, and
ACQUIOM AGENCY SERVICES LLC,
as Administrative Agent and Collateral Agent SEAPORT GLOBAL SECURITIES LLC,
as Placement Agent
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS
SECTION 1.01 Defined Terms 1
SECTION 1.02 Terms Generally 25
SECTION 1.03 Accounting Terms; Changes to GAAP 26
SECTION 1.04 Divisions 26
ARTICLE II COMMITMENTS AND BORROWINGS
SECTION 2.01 Commitments 26
SECTION 2.02 Loans and Borrowings 27
SECTION 2.03 Borrowing Requests 27
SECTION 2.04 Funding of Borrowings 27
SECTION 2.05 Prepayments 28
SECTION 2.06 Termination of Commitments 31
SECTION 2.07 Repayment of Loans 31
SECTION 2.08 Interest 31
SECTION 2.09 Fees 32
SECTION 2.10 Evidence of Debt 32
SECTION 2.11 Payments Generally; Several Obligations of Lenders 33
SECTION 2.12 Sharing of Payments 34
SECTION 2.13 Increased Costs 34
SECTION 2.14 Taxes 35
SECTION 2.15 Mitigation Obligations; Replacement of Lenders 38
SECTION 2.16 Extension of Maturity Date 39
SECTION 2.17 Incremental Commitments 40
SECTION 2.18 Payment Protocols 42
ARTICLE III REPRESENTATIONS AND WARRANTIES
SECTION 3.01 Existence, Qualification and Power 42
SECTION 3.02 Authorization; No Contravention 42
SECTION 3.03 Governmental Authorization; Other Consents 42
SECTION 3.04 Execution and Delivery; Binding Effect 42
SECTION 3.05 Financial Statements; No Material Adverse Effect 43
SECTION 3.06 Litigation 43
SECTION 3.07 No Default 43
SECTION 3.08 Property 43
SECTION 3.09 Taxes 44
SECTION 3.10 Disclosure 44
SECTION 3.11 Compliance with Laws, Etc 44
SECTION 3.12 ERISA Compliance 45
SECTION 3.13 Environmental Matters 45
SECTION 3.14 Margin Regulations 46
SECTION 3.15 Investment Company Act 46
SECTION 3.16 Sanctions; Anti-Money Laundering; Anti-Corruption 46
SECTION 3.17 Solvency 46
SECTION 3.18 Collateral Documents 46
ARTICLE IV CONDITIONS
SECTION 4.01 Closing Date 47
SECTION 4.02 Conditions to All Borrowings 50
ARTICLE V AFFIRMATIVE COVENANTS
SECTION 5.01 Financial Statements 50
SECTION 5.02 Certificates; Other Information 51
SECTION 5.03 Quarterly Lender Calls 52
SECTION 5.04 Notices 52
SECTION 5.05 Preservation of Existence, Etc 53
SECTION 5.06 Maintenance of Properties 53
SECTION 5.07 Maintenance of Insurance 53
SECTION 5.08 Payment of Obligations 54
SECTION 5.09 Compliance with Laws 54
SECTION 5.10 Environmental Matters 54
SECTION 5.11 Books and Records 54
SECTION 5.12 Inspection Rights 54
SECTION 5.13 Use of Proceeds 55
SECTION 5.14 Sanctions; Anti-Money Laundering Laws; Anti-Corruption Laws 55
SECTION 5.15 Additional Guarantors and Collateral Matters. 55
SECTION 5.16 Post-Closing Obligations 56
ARTICLE VI NEGATIVE COVENANTS
SECTION 6.01 Indebtedness 56
SECTION 6.02 Liens 58
SECTION 6.03 Fundamental Changes 61
SECTION 6.04 Dispositions 61
SECTION 6.05 Restricted Payments 62
SECTION 6.06 Investments 63
SECTION 6.07 Transactions with Affiliates 64
SECTION 6.08 Certain Restrictive Agreements 64
SECTION 6.09 Changes in Fiscal Periods 65
SECTION 6.10 Changes in Nature of Business 65
SECTION 6.11 Restriction on Use of Proceeds 65
SECTION 6.12 Financial Covenants 66
SECTION 6.13 Sanctions; Anti-Corruption Use of Proceeds 66
SECTION 6.14 Federal Enforcement Priorities 66
ARTICLE VII EVENTS OF DEFAULT
SECTION 7.01 Events of Default 66
SECTION 7.02 Application of Payments 69
ARTICLE VIII AGENCY
SECTION 8.01 Appointment and Authority 69
SECTION 8.02 Merger or Consolidation 70
SECTION 8.03 Exculpatory Provisions 70
SECTION 8.04 Reliance by Agent 71
SECTION 8.05 Delegation of Duties 71
SECTION 8.06 Resignation of Agent 72
SECTION 8.07 Non-Reliance on Agent and Other Lenders 72
SECTION 8.08 No Other Duties 73
SECTION 8.09 Indemnity of the Agent 73
SECTION 8.10 Certain Rights of the Agent 73
SECTION 8.11 Agent May File Proofs of Claim 74
SECTION 8.12 Certain ERISA Matters 74
SECTION 8.13 Collateral and Guaranty Matter 75
SECTION 8.14 Credit Bidding 76
SECTION 8.15 Agent Actions 76
SECTION 8.16 Force Majeure 76
ARTICLE IX MISCELLANEOUS
SECTION 9.01 Notices 77
SECTION 9.02 Waivers; Amendments 79
SECTION 9.03 Expenses; Indemnity; Damage Waiver 80
SECTION 9.04 Successors and Assigns 82
SECTION 9.05 Survival 85
SECTION 9.06 Counterparts; Integration; Effectiveness; Electronic Execution 85
SECTION 9.07 Severability 86
SECTION 9.08 Right of Setoff 86
SECTION 9.09 Governing Law; Jurisdiction; Etc 86
SECTION 9.10 WAIVER OF JURY TRIAL 87
SECTION 9.11 Headings 87
SECTION 9.12 Treatment of Certain Information; Confidentiality 88
SECTION 9.13 PATRIOT Act 88
SECTION 9.14 Interest Rate Limitation 88
SECTION 9.15 Payments Set Aside 89
SECTION 9.16 No Advisory or Fiduciary Responsibility 89
SECTION 9.17 Acknowledgement Regarding Any Supported QFCs 89
SECTION 9.18 Judgment Currency 90
SCHEDULES
SCHEDULE 2.01 - Commitments and Lenders SCHEDULE 3.06 - Litigation
SCHEDULE 3.08 - Material Licenses SCHEDULE 5.16 - Post-Closing Obligations SCHEDULE 6.01 - Indebtedness SCHEDULE 6.02 - Liens
SCHEDULE 6.06 - Investments
SCHEDULE 6.07 - Transactions with Affiliates SCHEDULE 6.08 - Restrictive Agreements
EXHIBITS
EXHIBIT A - Assignment and Assumption
EXHIBIT B-1 - Form of U.S. Tax Compliance Certificate EXHIBIT B-2 - Form of U.S. Tax Compliance Certificate EXHIBIT B-3 - Form of U.S. Tax Compliance Certificate EXHIBIT B-4 - Form of U.S. Tax Compliance Certificate EXHIBIT C-1 - Form of US Solvency Certificate EXHIBIT C-2 - Form of Canadian Solvency Certificate EXHIBIT D - Form of Compliance Certificate
CREDIT AGREEMENT dated as of December 18, 2020 (this “Agreement”), between WDB HOLDING PA, INC., a Delaware corporation (the “Borrower”), the LENDERS party hereto, and ACQUIOM AGENCY SERVICES LLC, as administrative agent (in such capacity, including any successor thereto, the “Administrative Agent”) and as collateral agent (in such capacity, including any successor thereto, the “Collateral Agent”).
The Borrower has requested that the Lenders extend credit to the Borrower, and the Lenders are willing to do so on the terms and conditions set forth herein. In consideration of the mutual covenants and agreements herein contained, the parties hereto agree as follows:
ARTICLE I DEFINITIONS
SECTION 1.01 Defined Terms. As used in this Agreement, the following terms have the meanings specified below:
“2023 IRS Payment Plan” shall mean the partial pay installment plan that Borrower and American Parent intend to enter into with the Internal Revenue Services in respect of state and federal taxes payable in respect of the fiscal year ending December 31, 2022 by Xxxxxxxx and American Parent over an extended timeframe.
“Acquisition” means, as to any Person, the purchase or other acquisition (in one transaction or a series of transactions, including through a merger) of all of the Equity Interests of another Person or all or substantially all of the property, assets or business of another Person or of the assets constituting a business unit, line of business or division of another Person.
“Additional Lender” has the meaning specified in Section 2.16(d).
“Administrative Agency Fee Letter” means that certain letter agreement, dated as of the Closing Date, by and among the Canadian Parent and Acquiom Agency Services LLC, in its capacity as Administrative Agent and Collateral Agent, as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the terms thereof.
“Administrative Questionnaire” means an administrative questionnaire in a form supplied by the Agent or such form provided by a Lender and otherwise acceptable to the Agent.
“Affiliate” means, with respect to a specified Person, another Person that directly or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.
“Affiliated Lender” means each Lender that is an Affiliate of any Loan Party.
“Agent” means Acquiom Agency Services LLC, in its capacity as Administrative Agent and Collateral Agent, as applicable, under any of the Loan Documents. For the avoidance of doubt, any reference herein or in any other Loan Document to the Administrative Agent (and any provision benefitting, or granting any right or power to, the Administrative Agent) shall, unless the context requires otherwise, be construed as a reference to (and provision benefitting, or granting any right or power to) the Administrative Agent and the Collateral Agent.
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“Agent’s Office” means the Agent’s address and, as appropriate, account as set forth in Section 9.01, or such other address or account as the Agent may from time to time notify to the Borrower and the Lenders.
“Agent Parties” has the meaning specified in Section 9.01(d)(ii).
“Agreement” has the meaning specified in introductory paragraph hereof.
“American Parent” means TerrAscend USA, Inc., a Delaware corporation.
“Anti-Corruption Laws” means the U.S. Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010, the Corruption of Foreign Public Officials Act (Canada), or any other applicable anti- corruption or anti-bribery Laws.
“Anti-Money Laundering Laws” means applicable anti-money laundering Laws.
“Applicable Accounting Principles” means, subject to Section 1.03, (i) with respect to the Borrower and its Subsidiaries, GAAP, and (ii) with respect to the Canadian Parent, IFRS.
“Applicable Law” means, as to any Person, all applicable Laws binding upon such Person or to which such a Person is subject.
“Applicable Percentage” means, with respect to any Lender, (a) on or prior to the Closing Date, the percentage of the total Commitments of all Lenders represented by such Xxxxxx’s Commitments at such time and (b) thereafter, the percentage of the total Outstanding Amount of Loans of all Lenders represented by the aggregate Outstanding Amount of Loans of such Lender at such time.
“Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.
“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 9.04) or Preferred Assignee, as applicable, and accepted by the Agent, in substantially the form of Exhibit A or any other form approved by the Agent.
“Attributable Indebtedness” means, as of any date of determination, (a) in respect of any Capitalized Lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with Applicable Accounting Principles, and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of the remaining lease payments under the relevant lease that would appear on a balance sheet of such Person prepared as of such date in accordance with Applicable Accounting Principles if such lease were accounted for as a capital lease; provided, for avoidance of doubt, that Attributable Indebtedness shall not include any obligations in respect of operating leases (including operating leases recorded as right of use assets, and related lease liabilities in respect of operating leases).
“Basel III” means, collectively, those certain:
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Capital Buffer,” published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or restated;
“Beneficial Ownership Certification” means a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation.
“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.
“Benefit Plan” means any of (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in and subject to Section 4975 of the Code or (c) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan”.
“Blocked Account” means the commercial deposit account established by the Borrower in respect of which the Agent will have exclusive control for withdrawal purposes pursuant to a Control Agreement.
“Borrower” has the meaning specified in the introductory paragraph.
“Borrower Financial Statements” means the unaudited consolidated financial statements of the Borrower and its Subsidiaries, in form and a substance reasonably acceptable to the Agent and the Lenders, as at and for the nine-month period ended September 30, 2020 furnished to the Agent and the Lenders on December 15, 2020.
“Borrower Materials” has the meaning specified in Section 9.01(e).
“Borrowing” means a borrowing consisting of simultaneous Loans.
“Borrowing Request” means a request for a Borrowing, which in each case shall be in such form as the Agent may approve, signed by a Responsible Officer of the Borrower.
“Business Day” means any day that is not a Saturday, Sunday or other day that is a legal holiday under the laws of the State of New York or is a day on which banking institutions in such state are authorized or required by Law to close.
“Canadian Parent” means TerrAscend Corp., an Ontario corporation.
“Canadian Parent Financial Statements” means the annual financial statements of the Canadian Parent for the fiscal years ended December 31, 2019 and December 31, 2018 filed on SEDAR on April 23, 2020.
“Capitalized Lease” means each lease that has been or is required to be, in accordance with Applicable Accounting Principles, recorded as a capital lease or financing lease.
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“Cash Equivalents” means:
“Casualty Event” shall mean any casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding of, any property or asset of the Borrower or any of its Subsidiaries.
“Change in Law” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (x) the Xxxx-Xxxxx Xxxx Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued 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 date enacted, adopted or issued.
“Change of Control” means an event or series of events by which (a) any person or group of persons acting jointly or in concert (as such expression is defined in National Instrument 62-104 –Take- Over Bids and Issuer Bids adopted by the Canadian Securities Regulatory Authorities (as such Instrument may be amended from time to time)) beneficially owns, directly or indirectly, more than 50% or more of the Equity Interests of the Canadian Parent entitled to vote for members of the board of directors or equivalent governing body of the Canadian Parent on a fully-diluted basis (and taking into account all such securities that such person or group has the right to acquire pursuant to any option right), (b) any person or group of persons, acting jointly or in concert (as such expression is defined in National Instrument 62-104 – Take-Over Bids and Issuer Bids adopted by the Canadian Securities Regulatory Authorities (as such Instrument may be amended from time to time)) acquires the power to direct, or cause the direction of,
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management, business or policies of the Canadian Parent, whether through the ability to exercise voting power, by contract or otherwise, (c) the American Parent ceases to directly own greater than 99.0% of the Equity Interests of the Borrower (except pursuant to a transfer of Equity Interests of the Borrower to another wholly-owned Subsidiary of the Canadian Parent in connection with which all such Equity Interests of the Borrower are pledged to the Agent for the benefit of the Lenders by such acquiring Subsidiary), (d) the Canadian Parent ceases to indirectly own 100% of the Equity Interests of the Borrower, or (e) any person or group of persons acting jointly or in concert (as such expression is defined in National Instrument 62- 104 – Take-Over Bids and Issuer Bids adopted by the Canadian Securities Regulatory Authorities (as such Instrument may be amended from time to time)) succeed in having a sufficient number of nominees elected to the board of directors of the Canadian Parent that such nominees, when added to any existing director remaining on the board of directors of the Canadian Parent, will constitute a majority of the board of directors of the Canadian Parent.
“Closing Date” means the first date all the conditions precedent in Section 4.01 are satisfied or waived in accordance with Section 9.02.
“Code” means the Internal Revenue Code of 1986, as amended from time to time.
“Collateral” means, collectively, the “Collateral” as defined in the Pledge and Security Agreement and the Collateral Assignments.
“Collateral Assignments” means Collateral Assignments (as such Collateral Assignments may be amended, supplemented or otherwise modified from time to time), entered into or to be entered into, as the context requires, by the Loan Parties party thereto in favor of the Agent, assigning each Loan Party’s (other than either Parent Guarantor’s) rights under the Collateral identified therein.
“Collateral Documents” means the Pledge and Security Agreement, the Collateral Assignments, any mortgages or other documents delivered pursuant to the Material Real Property Requirement, and all security agreements, intellectual property security agreements, control agreements, financing statements (together with any schedules the Agent requests that the Borrower includes to itemize state and common law trademarks included as Collateral), and other instruments and documents required to be delivered by a Loan Party in connection with any of the foregoing or pursuant to Section 5.15.
“Commitments” mean the Initial Commitments and the Incremental Commitments.
“Communications” has the meaning specified in Section 9.01(d)(ii).
“Compliance Certificate” has the meaning specified in Section 5.02(a).
“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.
“Consolidated EBITDA” means for any period, Consolidated Net Income for such period,
plus,
without duplication and to the extent deducted in determining Consolidated Net Income for such period, the sum of (a) interest expense (including, without limitation, any interest component in respect of lease obligations, right of use assets and any revaluation thereof), (b) provision for taxes based on income and deferred tax obligations, (c) depreciation expense, (d) amortization expense, (e) unusual or non-
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recurring charges, expenses or losses, provided that amounts pursuant to this clause
(e) shall not exceed 15% of Consolidated EBITDA for each quarter (such 15% cap to be calculated prior to giving effect to this clause (e)), and (f) unrealized losses on changes in fair value of biological assets, (g) fair value changes in biological assets included in inventory sold, (h) other non-cash charges, expenses or losses (excluding any such non-cash charge to the extent it represents an accrual or reserve for potential cash charge in any future period or amortization of a prepaid cash charge that was paid in a prior period, but including purchase accounting adjustments under ASC 805 under GAAP), (i) impairments, (j) restructuring costs, (k) purchase accounting adjustments, (l) financing transaction costs, (m) share based compensation, (n) revaluation of warrants and derivative liabilities, (o) unrealized loss on investments,
(p) expenses and payments that are covered by indemnification, reimbursement, guaranty or purchase price adjustment provisions in any agreement entered into by Borrower or any of its Subsidiaries to the extent such expenses and payments have been reimbursed pursuant to the applicable indemnity, guaranty or acquisition agreement in such period or an earlier period if not added back to Consolidated EBITDA in such earlier period, and (q) transaction integration costs in connection with any Acquisition or other permitted Investment; provided that the aggregate amount of add-backs permitted to be made pursuant to this clause (q) in any two fiscal quarter period shall not exceed $2,000,000,
minus,
without duplication and to the extent included in determining Consolidated Net Income for such period, the sum of (i) unusual or non-recurring gains and non-cash income, (ii) any other noncash income or gains increasing Consolidated Net Income for such period (excluding any such non-cash gain to the extent it represents the reversal of an accrual or reserve for potential cash charge in any prior period), (iii) unrealized gains on changes in fair value of biological assets, and (iv) any gains realized from the disposition of property outside of the ordinary course of business, all as determined on a consolidated basis.
For the purpose of calculating Consolidated EBITDA for any period, if during such period the Borrower or any Subsidiary shall have consummated an Acquisition, Consolidated EBITDA for such period shall be calculated after giving pro forma effect thereto as if such Acquisition occurred on the first day of such period.
“Consolidated Interest Coverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated EBITDA for the most recently ended two fiscal quarter period (multiplied by two) to
(b) Consolidated Interest Expense for the most recently ended two fiscal quarter period (multiplied by two); provided that, for the period ending September 30, 2023 and for any subsequent date of determination, the Consolidated Interest Coverage Ratio shall be calculated giving pro forma effect to the Lodi and Maplewood Transaction as if such transaction occurred on the first day of the period ended on or before the occurrence of such event.
“Consolidated Interest Expense” means annualized total sum of (a) cash interest expense (including that attributable to Capitalized Leases) and (b) any interest component (cash or otherwise) of lease obligations, right of use assets and any revaluation thereof to the extent such interest component is included in clause (a) of the definition of Consolidated EBITDA, net of (c) total cash interest income of the Borrower and its Subsidiaries on a consolidated basis for such period with respect to all outstanding Indebtedness of the Borrower and its Subsidiaries (including all commissions, discounts and other fees and
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charges owed with respect to letters of credit and bankers’ acceptance financing and net costs under Swap Contracts in respect of interest rates to the extent that such net costs are allocable to such period).
“Consolidated Leverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated Total Debt as of such date to (b) Consolidated EBITDA for the most recently ended two fiscal quarter period (multiplied by two).
“Consolidated Net Income” means, for any period, the consolidated net income (or loss) of the Borrower and its Subsidiaries on a consolidated basis; provided that there shall be excluded (a) the income (or deficit) of any Person accrued prior to the date it becomes a Subsidiary of the Borrower or is merged into or consolidated with the Borrower or any of its Subsidiaries, (b) the income (or deficit) of any Person (other than a Subsidiary of the Borrower) in which the Borrower or any of its Subsidiaries has an ownership interest, except to the extent that any such income is actually received by the Borrower or such Subsidiary in the form of dividends or similar distributions and (c) the undistributed earnings of any Subsidiary of the Borrower to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary is not at the time permitted by the terms of any Contractual Obligation (other than under any Loan Document) or requirement of Law applicable to such Subsidiary.
“Consolidated Total Debt” means, as of any date of determination, the aggregate balance sheet amount of all Indebtedness of the Borrower and its Subsidiaries (or, if higher, the par value or stated face amount of all such Indebtedness (other than zero coupon Indebtedness)) on a consolidated basis as of such date.
“Contractual Obligation” means, 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.
“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings analogous thereto.
“Control Agreement” shall mean, with respect to any deposit account or securities account, an agreement, in form and substance reasonably satisfactory to the Agent and the Loan Party maintaining such account, among the Agent, the financial institution or other Person at which such account is maintained and the Loan Party maintaining such account, effective to grant “control” (within the meaning of Articles 8 and 9 under the applicable UCC jurisdiction) over such account to the Agent.
“Controlled Substances Act” means Title 21 of the United States Code, as amended from
time to time.
“CRC Approval” means approval by the New Jersey Cannabis Regulatory Commission to the change of ownership of the Lodi Assets and the Maplewood Assets.
“Credit Rating Agency” means a nationally recognized credit rating agency that evaluates the financial condition of issuers of debt instruments and then assigns a rating that reflects its assessment of the issuer’s ability to make debt payments.
“Debtor Relief Laws” means the Bankruptcy Code of the United States of America, the Bankruptcy and Insolvency Act (Canada), the Companies' Creditors Arrangement Act (Canada), the Winding-Up and Restructuring Act (Canada), and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, arrangement, rearrangement, receivership, insolvency,
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reorganization, or similar laws providing debtor relief or otherwise affecting the enforcement of creditors’ rights generally, including any proceeding under corporate law or other law whereby a corporation seeks a stay or a compromise of the claims of its creditors against it, of the United States, Canada, or other applicable jurisdictions from time to time in effect.
“Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.
“Default Rate” means an interest rate (before as well as after judgment) equal to (a) with respect to overdue principal, the applicable interest rate plus 2.00% per annum and (b) with respect to any other overdue amount (including fees and overdue interest), the interest rate applicable to Loans plus 2.00% per annum.
“Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition of any property by any Person (including any sale and leaseback transaction and any issuance of Equity Interests by a Subsidiary of such Person), including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.
“Disqualified Equity Interest” means any Equity Interest that, by its terms (or the terms of any security or other Equity Interests 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 Equity Interests that are not Disqualified Equity Interests), pursuant to a sinking fund obligation or otherwise (except as a result of a change of control (including a Change of Control) or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control (including a Change of Control) or asset sale event shall be subject to the prior repayment in full of the Loans and all other Obligations that are accrued and payable and the termination of the Commitments), (b) is redeemable at the option of the holder thereof, in whole or in part, (c) provides for scheduled payments of dividends in cash, or (d) is or becomes convertible into or exchangeable for Indebtedness or any other Equity Interests that would constitute Disqualified Equity Interests, in each case, prior to the date that is ninety-one days after the Maturity Date; provided that if such Equity Interests are issued pursuant to a plan for the benefit of employees of the Borrower or any Subsidiary or by any such plan to such employees, such Equity Interests shall not constitute Disqualified Equity Interests solely because they may be required to be repurchased by the Borrower or its Subsidiaries in order to satisfy applicable statutory or regulatory obligations or as a result of such employee’s termination, death or disability.
“Dollar” and “$” mean lawful money of the United States.
“Earn-Out” shall mean, with respect to an acquisition of any assets or property by the Borrower or any of its Subsidiaries constituting an acquisition of all or substantially all of the assets of, or any business line, unit or division of, any Person or any facility, or of a majority of the outstanding Equity Interests of any Person, that portion of the purchase consideration therefor and that portion of all other payments and liabilities (whether payable in cash or by exchange of Equity Interests or of any property or otherwise), directly or indirectly, payable by any Loan Party in exchange for, or as part of, or in connection with, such acquisition that is deferred for payment to a future time after the consummation of such acquisition, and includes any and all payments representing the purchase price and any assumptions of Indebtedness, and other agreements to make any payment the amount of which is, or the terms of payment of which are, in any respect subject to or contingent upon the revenues, income, cash flow or profits (or the like) of any person or business but excluding any working capital or purchase price adjustments.
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“Eligible Assignee” means any Person that meets the requirements to be an assignee under Section 9.04(b)(iii), (v) and (vi) (subject to such consents, if any, as may be required under Section 9.04(b)(iii)).
“Environmental Laws” means any and all federal, state, provincial, territorial, local, and foreign statutes, Laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions, including all common law, relating to pollution or the protection of health, safety or the environment, natural resources, or the release of any materials into the environment, including those related to Hazardous Materials, air emissions, discharges to waste or public systems and health and safety matters.
“Environmental Liability” means any liability or obligation, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), directly or indirectly, resulting from or based upon (a) actual or alleged violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment, disposal or permitting or arranging for the disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials or (e) any contract, agreement or other consensual arrangement or operation of law pursuant to which liability is assumed or imposed with respect to any of the foregoing.
“Equity Interests” means, as to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder.
“ERISA Affiliate” means any trade or business (whether or not incorporated) under common control with the Borrower within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code or Section 302 of ERISA).
“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) the failure by the Borrower or any ERISA Affiliate to satisfy the minimum funding standards (within the meaning of Sections 412 or 430 of the Code or Section 302 of ERISA) applicable to such Pension Plan, whether or not waived; (c) the incurrence by the Borrower or any ERISA Affiliate of any liability pursuant to Section 4063 or 4064 of ERISA or a cessation of operations with respect to a Pension Plan within the meaning of Section 4062(e) of ERISA; (d) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is “insolvent” (within the meaning of Section 4245 of ERISA); (e) the filing of a notice of intent to terminate a Pension Plan under, or the treatment of a Pension Plan amendment as a termination under, Section 4041 of ERISA; (f) the institution by the PBGC of proceedings to terminate a Pension Plan; (g) any event or condition that constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan; (h) the determination that any Pension Plan is, or is expected to be, in “at-risk” status (within the meaning of Section 430 of the Code or Section 303 of ERISA) or that a Multiemployer Plan is in
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endangered or critical status (within the meaning of Section 432 of the Code or Section 305 of ERISA);
(i) the imposition or incurrence of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate; (j) the engagement by the Borrower or any ERISA Affiliate in a transaction that could be subject to Section 4069 or Section 4212(c) of ERISA; (k) the imposition of a lien upon the Borrower pursuant to Section 430(k) of the Code or Section 303(k) of ERISA; or (l) the making of an amendment to a Pension Plan that could result in the posting of bond or security under Section 436(f)(1) of the Code.
“Event of Default” has the meaning specified in Article VII.
“Excluded Accounts” means the following deposit accounts: (a) accounts holding solely cash collateral for a third party that constitutes a Lien permitted under Section 6.02 hereof, and (b) accounts with amounts on deposit (in cash or Cash equivalents) that do not exceed an average daily balance of
$300,000 individually and $500,000 for all such accounts in the aggregate at any one time. For the avoidance of doubt, the Blocked Account shall not be considered an Excluded Account.
“Excluded Taxes” means 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,
U.S. federal withholding 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 assignment request by the Borrower under Section 2.15(b)) or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 2.14, amounts with respect to such Taxes were payable either to such Xxxxxx'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 2.14(g), (d) Taxes that would not have been imposed but for such Recipient (i) not dealing at “arm’s length” (for purposes of the ITA) with a Loan Party, or (ii) being a “specified shareholder” (as defined in subsection 18(5) of the ITA) of a Loan Party or not dealing at arm’s length with any such specified shareholder, except where the non-arm’s length relationship arises or where the Recipient is (or is deemed to be) a specified shareholder of any Loan Party or does not deal at arm’s length with a specified shareholder of any Loan Party, solely on account of the Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, or enforced this Agreement or any other Loan Document, (e) any withholding Taxes imposed under FATCA and (f) Other Connection Taxes.
“Existing Maturity Date” has the meaning specified in Section 2.16(a).
“Extending Lender” has the meaning specified in Section 2.16(b).
“Facility” means the Initial Facility and each Incremental Facility.
“FATCA” means 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 regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities and implementing such Sections of the Code.
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“Federal Funds Effective Rate” means, for any day, the greater of (a) the rate calculated by the Federal Reserve Bank of New York based on such day’s Federal funds transactions by depositary institutions (as determined in such manner as the Federal Reserve Bank of New York shall set forth on its public website from time to time) and published on the next succeeding Business Day by the Federal Reserve Bank of New York as the Federal funds effective rate and (b) 0%.
“Federal Marijuana Law” means any U.S. federal laws, civil, criminal or otherwise, that are directly or indirectly related to the cultivation, harvesting, production, marketing, labeling, warning, instructing about, distribution, sale and 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.
“Federal Reserve Board” means the Board of Governors of the Federal Reserve System of the United States.
“Fee Letters” means the Administrative Agency Fee Letter and the Placement Agent Fee
Letter.
“Financial Covenants” means those financial covenants set forth in Section 6.12.
“Financial Officer” means, as to any Person, the chief financial officer, principal accounting officer, treasurer or controller of such Person.
“Foreign Lender” means any Lender or Agent that is not a “U.S. Person”.
“Foreign Plan” means any employee pension benefit plan, program, policy, arrangement or agreement maintained or contributed to by the Borrower or any Subsidiary with respect to employees employed outside the United States (other than any governmental arrangement).
“Fourth Amendment Effective Date” has the meaning specified in the Amendment No.4 to the Credit Agreement dated March 15, 2023 among the Borrower, the Loan Parties party thereto and the Agent.
“Xxxxxx Property” means the real property located at 0000 X. Xxxx Xxxx, Xxxxxxxxx, Xxxxxx Xxxxxx, XX 00000.
“Xxxxxx Property Financing” shall mean that certain Indebtedness owed to any Xxxxxx Property Lender in an aggregate principal amount not exceeding $30,000,000 on terms and conditions approved by Required Lenders; provided that Required Lenders have approved the terms set forth on the term sheet with Xxxxxxx Bank provided to Required Lenders prior to the Seventh Amendment Effective Date; and provided further that any other financing on the Xxxxxx Property Collateral shall be approved by Required Lenders if it is in an amount not exceeding $30,000,000 and otherwise satisfies the requirements of 6.01(q)(ii) and (iii).
“Xxxxxx Property Financing Collateral” shall mean the following, each granted by Ilera Healthcare LLC in favor of any Xxxxxx Property Lender pursuant to the Xxxxxx Property Financing Documents: (a) the Real Property, Rents, and Personal Property or other similar terms each defined or
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otherwise referenced in any Xxxxxx Property Financing Documents, (b) the Collateral as defined in any Xxxxxx Property Financing Document between Ilera Healthcare LLC and any Xxxxxx Property Lender, (c) all equipment located at or used in the operations of the Xxxxxx Property, (d) that certain cannabis license as to the operations of the Xxxxxx Property, and (e) all products and proceeds of the foregoing.
“Xxxxxx Property Financing Documents” shall mean that certain Mortgage by Ilera Healthcare LLC in favor of the Xxxxxx Property Lender and each security agreement and other documents entered into in connection with the Xxxxxx Property Financing each in form and substance reasonably satisfactory to Required Lenders.
“Xxxxxx Property Lender” means Xxxxxxx Bank, Xxxxxxx Bank or any other lender or financial institution or investor providing refinancing replacement indebtedness on terms that satisfy the requirements set forth in the definition of “Xxxxxx Property Financing”.
“Fund” means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans, bonds and similar extensions of credit in the ordinary course of its activities.
“GAAP” means, subject to Section 1.03, United States generally accepted accounting principles as in effect as of the date of determination thereof.
“Governmental Authority” means the government of the United States of America, the government of Canada, including Health Canada, or any other nation, or of any political subdivision thereof, whether state, provincial, territorial or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).
“Guarantee” means, as to any Person, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part) or (b) any Lien on any assets of such Person securing any Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain any such Lien); provided that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business. The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding meaning.
“Guarantor” means each Parent Guarantor, each Subsidiary Guarantor and each other Person that guarantees all or any part of the Obligations.
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“Guaranty Agreement” means a Guaranty Agreement, in form and substance reasonably satisfactory to the Agent, dated as of the date hereof, made by each Subsidiary of the Borrower and each of the Parent Guarantors in favor of the Agent for the benefit of the Lenders, guaranteeing the Obligations, as such Guaranty Agreement may be amended, supplemented or modified from time to time.
“Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes, and other substances, materials, or wastes of any nature capable of causing harm to human health or the environment, or which are regulated under or with respect to which liability or standards of conduct are imposed pursuant to any Environmental Law.
“ICR Credit” means (a) beginning December 6, 2023, $4,800,000, and (b) beginning April 30, 2024, $8,000,000; provided that, if the Borrower fails to prepay the Loans on the applicable dates required pursuant to Section 2.05(b)(viii) or 2.05(b)(ix), $0.
“ICR Period” means, commencing with the fiscal quarter ending on September 30, 2023, any period during which the Consolidated Interest Coverage Ratio has declined below 2.00:1.00 as demonstrated by the Compliance Certificate delivered together with financial statements pursuant to Sections 5.01(a) and (b). An ICR Period shall end (i) upon the Consolidated Interest Coverage Ratio being greater than or equal to 2.00:1.00 as of the last day for each of two (2) consecutive fiscal quarters as demonstrated by the Compliance Certificate delivered together with the financial statements pursuant to Section 5.02(a), or (ii) upon the prepayment of outstanding Loans on a pro rata basis by Borrower causing the Consolidated Interest Coverage Ratio as of the last day of each two (2) consecutive fiscal quarters, calculated on a pro forma basis for each such fiscal quarter after giving effect to such prepayment, to be greater than or equal to 2.00:1.00. For the avoidance of doubt, the Borrower may elect to apply the funds on deposit in the Blocked Account (and the Agent shall authorize the release the funds from the Blocked Account for such purpose) to prepay outstanding Loans in accordance with the foregoing.
“ICR Required Payment Amount” means the difference between (a) the Consolidated EBITDA that would be required to cause the Consolidated Interest Coverage Ratio to equal 2.00:1.00 and
(b) the actual Consolidated EBITDA, in each case as of the last day of the fiscal quarter ending immediately prior to the commencement of the ICR Period or the immediately preceding fiscal quarter during the ICR Period, as applicable, less the ICR Credit.
“IFRS” means international accounting standards within the meaning of IAS Regulation 1606/2002 to the extent applicable to the relevant financial statements.
“Incremental Commitment” has the meaning specified in Section 2.17(a).
“Incremental Commitment Effective Date” has the meaning specified in Section 2.17(c).
“Incremental Facility” means the Incremental Commitments and all Borrowings
thereunder.
“Incremental Lender” has the meaning specified in Section 2.17(b).
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“Indebtedness” means, 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 Principles:
For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person. The amount of any net obligation under any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such date. The amount of any Indebtedness of any Person for purposes of clause (e) that is expressly made non-recourse or limited-recourse (limited solely to the assets securing such Indebtedness) to such Person shall be deemed to be equal to the lesser of (i) the aggregate principal amount of such Indebtedness and (ii) the fair market value of the property encumbered thereby as determined by such Person in good faith.
“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document and (b) to the extent not otherwise described in (a), Other Taxes.
“Indemnitee” has the meaning specified in Section 9.03(b).
“Information” has the meaning specified in Section 9.12.
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“Initial Commitment” means with respect to each Lender, the commitment of such Lender to make a Loan on the Closing Date in the amount of such Xxxxxx’s Initial Commitment set forth on Schedule 2.01, as such commitment shall be terminated pursuant to Section 2.06.
“Initial Facility” means the Initial Commitments and all Borrowings thereunder.
“Initial Lender” means each Person listed on Schedule 2.01.
“Initial Loan” means a loan made by an Initial Lender to the Borrower pursuant to Section
2.01 of this Agreement.
“Intellectual Property” means any trademarks, service marks, and any other identifiers of source or origin, trade names, domain names, copyrights, patents, industrial designs, trade secrets, know- how and all other intellectual property rights and similar or equivalent rights anywhere in the world.
“Interest Payment Date” means the last Business Day of each March, June, September and December and the Maturity Date, commencing with March 31, 2021.
“Investment” means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of Equity Interests or debt or other securities of another Person, (b) a loan, advance or capital contribution to, Guarantee or assumption of debt of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person and any arrangement pursuant to which the investor incurs Indebtedness of the type referred to in clause (h) of the definition of “Indebtedness” in respect of such other Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of all or substantially all of the property and assets or business of another Person or assets constituting a business unit, line of business or division of such Person. For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment but giving effect to any returns or distributions of capital or repayment of principal actually received in case by such Person with respect thereto.
“IRS” means the United States Internal Revenue Service.
“Joinder Agreement” means a joinder or similar agreement entered into by any Person (including any Lender) under Section 2.17 pursuant to which such Person shall provide an Incremental Commitment hereunder and (if such Person is not then a Lender) shall become a Lender party hereto.
“Laws” means, collectively, all international, foreign, federal, state, provincial, territorial and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.
“Legalized Marijuana State” means any U.S. state, territory, or locality whose Requirements of Law permit or authorize any form of Marijuana Activities.
“Lenders” means the Initial Lender and any other Person that shall have become party hereto pursuant to an Assignment and Assumption or a Joinder Agreement, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption.
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“Lien” means any mortgage, pledge, hypothecation, collateral assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property, and any financing lease having substantially the same economic effect as any of the foregoing).
“Liquidity” means, as of any date of determination, the sum of (a) the amount of cash and Cash Equivalents of the Borrower and the Subsidiaries that is held in a deposit account or a securities account, as applicable, pledged in favor of the Agent pursuant to the Pledge and Security Agreement and, with effect from the date a Control Agreement in respect of such account is required to be delivered pursuant to this Agreement, subject to a Control Agreement, (b) up to $2,500,000 of cash that is, as of such date, held on-site or in transit from a dispensary location of the Borrower or one of its Subsidiaries to a bank to be deposited in a deposit account that is, with effect from the date a Control Agreement in respect of such account is required to be delivered pursuant to this Agreement, subject to a Control Agreement, so long as such cash is being held and/or transited in the ordinary course and consistent with past practices of the Borrower and its Subsidiaries and is expected to be deposited in such account within no more than five (5) Business Days and (c) any commitments for loans which constitute Indebtedness permitted under this Agreement and are available to be drawn by the Borrower or any of its the Subsidiaries, it being understood that such amount shall exclude any cash or Cash Equivalents identified on a balance sheet as “restricted” (other than cash restricted in favor of the Agent and the Lenders).
“Loan” means an Initial Loan and any loan under an Incremental Facility made pursuant
to Section 2.17.
“Loan Documents” means, collectively, this Agreement, the Guaranty Agreement, the Pledge and Security Agreement, any Joinder Agreement, the Collateral Assignments, any promissory notes issued pursuant to Section 2.10(b), the Fee Letters, the Perfection Certificate, and any other agreements, instruments, certificates, reports or other documents entered into in connection herewith.
“Loan Party” means Borrower and each Guarantor.
“Lodi Assets” means the assets comprising the alternative treatment center located at 000 Xxxxx 00 Xxxxx, Xxxx, XX 00000, which provides medical and adult-use cannabis products, cannabis support and services, cannabis accessories, and the sale of other non-cannabis products to individuals over the age of 21 and medical marijuana patients in the state of New Jersey.
“Lodi and Maplewood Transaction” means the series of transactions in which TerrAscend NJ LLC, a New Jersey corporation contributes its interest in the Lodi Assets and the Maplewood Assets to Newco.
“Make-Whole Amount” means as of the date of the applicable prepayment, an amount equal to the excess of (i) the present value at the prepayment date, refinancing date or acceleration date of
(1) the principal amount of such Loans on the No Call Expiration Date, plus (2) all required remaining scheduled interest payments due on such Loans from such prepayment date, refinancing date or acceleration date through the No Call Expiration Date, assuming that the rate of interest will be equal to the rate of interest in effect on the date of notice of prepayment, refinancing or acceleration, other than accrued but unpaid interest to such prepayment, refinancing or acceleration date, computed using a discount rate equal to the Treasury Rate plus 50 basis points per annum discounted on a semi-annual bond equivalent basis, plus (3) the Prepayment Premium payable as if such prepayment, refinancing or acceleration occurred on the day immediately following the No Call Expiration Date, over (ii) the outstanding principal amount of such Loan as at the applicable date.
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“Maplewood Assets” means the assets comprising the alternative treatment center located at 0000 Xxxxxxxxxxx Xxx, Xxxxxxxxx, XX 00000, which provides medical and adult-use cannabis products, cannabis support and services, cannabis accessories, and the sale of other non-cannabis products to individuals over the age of 21 and medical marijuana patients in the state of New Jersey.
“Margin Stock” means margin stock within the meaning of Regulations T, U and X.
“Marijuana” means “marihuana” as defined in the Controlled Substances Act, its consituents and any compound, mixture, preparation, substance or product derived therefrom.
“Marijuana Activities” means those activities that include, but are not limited to, (a) the acquisition, cultivation, manufacture, extraction, testing, inspection, possession, sale (at retail or wholesale), dispensing, donation, distribution, transportation, packaging, labeling, warning, instructing about, monitoring, reporting or disposing of Marijuana and (b) activities by which a Person receives, holds, transfers (in exchange for any form of value, by gift or otherwise), deposits or distributes monetary proceeds from the sale of Marijuana.
“Material Adverse Effect” means (a) a material adverse change in, or a material adverse effect on, the operations, business, properties, liabilities (actual or contingent) or condition (financial or otherwise) of the Borrower and its Subsidiaries taken as a whole; or (b) a material adverse effect on (i) the ability of the Borrower or either of the Parent Guarantors to perform its Obligations, (ii) the legality, validity, binding effect or enforceability against any Loan Party of any Loan Document to which it is a party, (iii) the rights, remedies and benefits available to, or conferred upon, the Agent or any Lender under any Loan Documents or (iv) the validity, perfection or priority of a Lien in favor of Agent for the benefit of the Lenders on a material portion of the Collateral.
“Material License” means any license, permit, approval, entitlement, consent, agreement or similar permission from a Governmental Authority that is required for Borrower or any of its Subsidiaries to conduct Marijuana Activities (for which it is actually conducting such Marijuana Activities) in a specific state, territory, geographic region, and/or local jurisdiction. For purposes of this definition only, neither the
U.S. Federal government nor any agency thereof shall constitute a Governmental Authority.
“Material Real Property” means any parcel or related parcels of real property with a fair market value in excess of $2,500,000; provided that, notwithstanding the foregoing or anything to the contrary in the Loan Documents, the Xxxxxx Property shall not be considered “Material Real Property” for the purposes of the Loan Documents or any other purpose.
“Material Real Property Requirement” means, with respect to any Material Real Property owned by the Borrower or any of its Subsidiaries, the requirement that (a) the Borrower or applicable Subsidiary Guarantor execute and deliver to the Agent a mortgage in form and substance reasonably acceptable to the Agent, (b) the Borrower or the applicable Subsidiary Guarantor deliver a mortgagee title policy (or binding pro forma therefor) covering Agent’s interest under the applicable mortgage, in form and amount and by a title insurer reasonably acceptable to the Agent, and such title policy shall include endorsements as reasonably requested by Agent and to be fully paid and subject to no other conditions on such effective date, (c) such assignments of leases, estoppel letters, attornment agreements, consents, waivers and releases as Agent may reasonably require with respect to other Persons having an interest in the such Material Real Property, (d) unless Agent otherwise agrees, either (i) a current, as-built survey of the Material Real Property, meeting the 2016 minimum standard detail requirements for ALTA/ACSM land title surveys, including, but not limited to, (w) a metes-and-bounds property description, (x) a flood plain certification, (y) certification by a licensed surveyor reasonably acceptable to Agent and (z) any other optional table A items as reasonably requested by Agent or (ii) existing surveys with respect to a particular
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piece of Material Real Property that are in the possession of the Borrower or the applicable Subsidiary accompanied by a no-change survey affidavit, or similar document, in form and substance sufficient for a title insurer to issue any applicable survey related endorsement coverage as reasonably requested by Agent; and (e) flood zone determinations and, if the Material Real Property is within a special flood hazard area, an acknowledged borrower notice, and flood insurance in compliance (including as to amount) with all applicable flood insurance Laws and in a commercially reasonable amount, with endorsements and by an insurer reasonably acceptable to Agent.
“Maturity Date” means December 18, 2024 subject to extension in accordance with Section 2.16 (except that, if such date is not a Business Day, the Maturity Date shall be the next preceding Business Day).
“Maximum Rate” has the meaning specified in Section 9.14.
“Mississauga Disposal” shall mean the Disposition by the Canadian Parent of the building located at 0000 Xxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxx, Xxxxxx.
“Mississauga Property” means the building located at 0000 Xxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxx, Xxxxxx.
“Multiemployer Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes or is obligated to make contributions, during the preceding five plan years has made or been obligated to make contributions, or has any liability.
“Multiple Employer Plan” means a Plan with respect to which the Borrower or any ERISA Affiliate is a contributing sponsor, and that has two or more contributing sponsors at least two of whom are not under common control, as such a plan is described in Section 4064 of ERISA.
“Net Cash Proceeds” shall mean with respect to any Disposition or Casualty Event, the proceeds consisting of cash and Cash Equivalents, net of (i) selling expenses (including reasonable broker’s fees or commissions, legal fees, transfer and similar taxes and the Borrower’s good faith estimate of income taxes paid or payable in connection with such sale), (ii) amounts provided as a reserve, in accordance with Applicable Accounting Principles, against any liabilities under any indemnification obligations or purchase price adjustment associated with such Disposition (provided that, to the extent and at the time any such amounts are released from such reserve, such amounts shall constitute Net Cash Proceeds); provided that that any non-cash consideration received in connection with any transaction, which is subsequently converted to cash or Cash Equivalents, shall become Net Cash Proceeds only at such time as it is so converted; provided further that if (x) subject to no Event of Default having occurred and be continuing, the Borrower notifies the Agent within ten Business Days of receiving such Net Cash Proceeds that it intends to reinvest such proceeds in assets of a kind used or usable in the business of the Borrower and its Subsidiaries reinvests such proceeds in assets of a kind used or usable in the business of the Borrower and its Subsidiaries and (y) either (I) the Borrower consummates any such reinvestment within 180 days of receipt of such proceeds or (II) if the Borrower or applicable Subsidiary enters into a contractual obligation to reinvest such Net Cash Proceeds within 180 days following receipt thereof, within 365 days following receipt thereof, such proceeds shall not constitute Net Cash Proceeds except to the extent not so used at the end of such 180-day period (or 365 day period, if applicable), at which time such proceeds shall be deemed to be Net Cash Proceeds.
“Net Sale Proceeds” shall mean, with respect to the Mississauga Disposal, the proceeds consisting of cash and Cash Equivalents, net of (i) selling expenses (including reasonable broker’s fees or
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commissions, legal fees, transfer and similar taxes and the Canadian Parent’s good faith estimate of income taxes paid or payable in connection with such sale), (ii) amounts provided as a reserve, in accordance with Applicable Accounting Principles, against any liabilities under any indemnification obligations or purchase price adjustment associated with such Disposal (provided that, to the extent and at the time any such amounts are released from such reserve, such amounts shall constitute Net Sale Proceeds); provided that that any non-cash consideration received in connection with any transaction, which is subsequently converted to cash or Cash Equivalents, shall become Net Sale Proceeds only at such time as it is so converted, and (iii) any amount required to repay and satisfy in full any indebtedness or other obligations secured by the Mississauga Property.
“Newco” means APOTHECARIUM DISPENSING LLC, a New Jersey limited liability company, a Subsidiary of the Borrower formed for the purposes of owning the Lodi Assets and the Maplewood Assets.
“No Call Expiration Date” means the date that is the 30 month anniversary of the Closing
Date.
“Non-Extending Lender” has the meaning specified in Section 2.16(b).
“Notice Date” has the meaning specified in Section 2.16(b).
“Obligations” means all advances to, and debts, liabilities, obligations, covenants and duties of, the Borrower arising under any Loan Document or otherwise with respect to any Loan, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against the Borrower or any Affiliate thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding. Without limiting the foregoing, the Obligations include (a) the obligation to pay principal, interest, charges, expenses, fees, indemnities and other amounts payable by the Borrower under any Loan Document and (b) the obligation of the Borrower to reimburse any amount in respect of any of the foregoing that the Agent or any Lender, in each case in its sole discretion, may elect to pay or advance on behalf of the Borrower.
“OFAC” has the meaning specified in Section 3.16(a).
“OID” has the meaning specified in Section 2.09(c).
“Organizational Documents” means (a) as to any corporation or unlimited liability company, the charter or certificate or articles of incorporation or amalgamation, as applicable, and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction),
(b) as to any limited liability company, the certificate or articles of formation or organization and operating or limited liability agreement and (c) as 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 any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization 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.
“Other Connection Taxes” means, 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
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other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).
“Other Taxes” means 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 Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 2.15(b)).
“Outstanding Amount” means, with respect to Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of Loans occurring on such date.
“Parent Guarantors” means each of the Canadian Parent and the American Parent.
“Participant” has the meaning specified in Section 9.04(d).
“Participant Register” has the meaning specified in Section 9.04(d).
“PATRIOT Act” means the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)).
“PBGC” means the Pension Benefit Guaranty Corporation.
“Pension Plan” means any employee pension benefit plan within the meaning of Section 3(2) of ERISA (including a Multiple Employer Plan, but excluding a Multiemployer Plan) that is subject to the provisions Title IV of ERISA or is subject to the minimum funding standards under Section 412 of the Code or Section 302 of ERISA and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4062 or Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.
“Perfection Certificate” means a certificate, dated as of the date hereof, regarding the property and assets owned by the Loan Parties, in form and substance reasonably acceptable to the Agent, as such certificate may be supplemented from time to time pursuant to the terms of this Agreement and the Pledge and Security Agreement.
“Permitted Acquisition” means the purchase or other acquisition of all or substantially all of the business, a line of business or a business unit (whether by the acquisition of Equity Interests, assets or any combination thereof) of any Person that, upon the consummation thereof, will be a Wholly-Owned Subsidiary (including, without limitation, as a result of a merger, amalgamation or consolidation) and the purchase or other acquisition by the Borrower or any Subsidiary of all or substantially all of the property and assets of any Person (including any Investment which serves to increase the Borrower’s or its Subsidiary’s respective equity ownership in any Subsidiary); provided that, with respect to each purchase or other acquisition made pursuant to SECTION 6.06(g), such purchase or other acquisition shall be approved by the target’s Board of Directors; and provided, further that:
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$10,000,000, the Borrower shall have provided the Agent (for distribution to the Lenders) at least five Business Days prior to the date of consummation of such transaction (i) a reasonably detailed description of all material information relating thereto and copies of all material documentation (or substantially final drafts of) pertaining to such transaction and (ii) to the extent provided to the Borrower or any of its Subsidiaries in connection with such Permitted Acquisition, available financial statements of the target prepared within the previous twelve (12) month period.
“Permitted Sale and Leaseback Transaction” means the sale by the Borrower of the Xxxxxx Property to a bona fide third party purchaser and thereafter the lease of the Xxxxxx Property by the Borrower or a Subsidiary thereof from such purchaser for use for substantially the same purpose or purposes as the Borrower was using the real property for at the time of the sale.
“Person” means any natural person, corporation, limited liability company, unlimited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.
“Placement Agent” means Seaport Global Securities LLC.
“Placement Agent Fee Letter” means the letter agreement, dated October 8, 2020, between the Canadian Parent and the Placement Agent.
“Plan” means any employee benefit plan within the meaning of Section 3(3) of ERISA, maintained for employees of the Borrower or any Subsidiary, or any such plan to which the Borrower or any Subsidiary is required to contribute on behalf of any of its employees or with respect to which the Borrower has any liability.
“Platform” means Debt Domain, Intralinks, Syndtrak, DebtX or a substantially similar electronic transmission system.
“Pledge and Security Agreement” means a Pledge and Security Agreement, in form and substance reasonably satisfactory to the Agent, dated as of the date hereof, made by, the Borrower, each Subsidiary of the Borrower and the American Parent in favor of the Agent for the benefit of the Lenders securing the Obligations, as such Pledge and Security Agreement may be amended, supplemented or modified from time to time.
“Pledged Collateral” has the meaning specified in the Pledge and Security Agreement.
“Preferred Assignee” means any Person that is designated by the Borrower in writing and meets the requirements to be an assignee under Section 9.04(b)(v)(A) and (vi).
“Prepayment Notice” means a notice by the Borrower to prepay Loans, which shall be in such form as the Agent may approve.
“Prepayment Premium” has the meaning specified in Section 2.05(d)(i)(B).
“PTE” means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.
“Public Lender” has the meaning specified in Section 9.01(e).
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“Purchase Agreement” means that certain Securities Purchase and Exchange Agreement, dated as of August 1, 2019 as amended as of December 27, 2019 and September , 2020 (as further amended, supplemented, restated or otherwise modified from time to time), by and among (i) the Canadian Parent,
(ii) the Borrower, as buyer, (iii) Ilera Holdings LLC, Mera I LLC and Mera II LLC, as sellers (the “Sellers”), and (iv) Xxxxxx Xxxxxxxx, as sellers’ agent (the “Sellers’ Agent”).
“Purchase Money Obligation” shall mean, for any person, the obligations of such person in respect of Indebtedness incurred for the purpose of financing all or any part of the purchase price of any fixed or capital assets or the cost of installation, construction or improvement of any fixed or capital assets and any refinancing thereof, provided, however, that such Indebtedness is incurred within one hundred eighty (180) days after the acquisition, installation, construction, repair, replacement, exchange or improvement of such fixed or capital assets by such person.
“Recipient” means (a) the Agent or (b) any Lender, as applicable.
“Register” has the meaning specified in Section 9.04(c).
“Regulation D” means Regulation D of the Federal Reserve Board, as in effect from time to time and all official rulings and interpretations thereunder or thereof.
“Regulation T” means Regulation T of the Federal Reserve Board, as in effect from time to time and all official rulings and interpretations thereunder or thereof.
“Regulation U” means Regulation U of the Federal Reserve Board, as in effect from time to time and all official rulings and interpretations thereunder or thereof.
“Regulation X” means Regulation X of the Federal Reserve Board, as in effect from time to time and all official rulings and interpretations thereunder or thereof.
“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees, administrators, managers, advisors and representatives of such Person and of such Person’s Affiliates.
“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30-day notice period has been waived.
“Required Lenders” means, at any time, Lenders having Loans representing more than 50% of the aggregate Outstanding Amount of Loans of all Lenders at such time; provided that, notwithstanding anything to the contrary contained in this Agreement, the aggregate Outstanding Amount of Loans held by Lenders that are Affiliated Lenders shall be excluded for purposes of making a determination of Required Lenders.
“Requirements of Law” means all Laws (including Environmental Laws), excluding (a) Federal Marijuana Law to the extent its then effective provisions forbid or restrict the conduct of Marijuana Activities and (b) any other U.S. federal law which by extension would be violated solely because a Marijuana Activity violates the then effective provisions of any Federal Marijuana Law.
“Resignation Effective Date” has the meaning specified in Section 8.06(a).
“Responsible Officer” means (a) the chief executive officer, president, executive vice president or a Financial Officer of the Borrower, (b) solely for purposes of the delivery of incumbency
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certificates and certified Organizational Documents and resolutions pursuant to Section 4.01, any vice president, secretary or assistant secretary of the Borrower and (c) solely for purposes of Borrowing Requests, prepayment notices and notices for Commitment terminations or reductions given pursuant to Article II, any other officer or employee of the Borrower so designated from time to time by one of the officers described in clause (a) in a notice to the Agent (together with evidence of the authority and capacity of each such Person to so act in form and substance satisfactory to the Agent). Any document delivered hereunder that is signed by a Responsible Officer of the Borrower shall be conclusively presumed to have been authorized by all necessary corporate, partnership or other action on the part of the Borrower and such Responsible Officer shall be conclusively presumed to have acted on behalf of the Borrower.
“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interest of any Person, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity Interest, or on account of any return of capital to such Person’s shareholders, partners or members (or the equivalent Persons thereof).
“Sanctions” has the meaning specified in Section 3.16(a).
“SEC” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.
“SEDAR” means the System for Electronic Document Analysis and Retrieval (SEDAR) administered by the Canadian Securities Administrators and available at xxx.xxxxx.xxx.
“Sellers” has the meaning specified in the definition of “Purchase Agreement”.
“Sellers’ Agent” has the meaning specified in the definition of “Purchase Agreement”.
“Seventh Amendment Effective Date” means December 5, 2023.
“Shareholders’ Equity” means, as of any date of determination, consolidated shareholders’ equity of the Borrower and its Subsidiaries as of such date determined in accordance with Applicable Accounting Principles.
“Sixth Amendment Effective Date” means June 22, 2023.
“Solvency Certificates” has the meaning specified in Section 4.01(i).
“Solvent” means, as to any Person as of any date of determination, that on such date (a) the fair value of the property of such Person is greater than the total amount of liabilities, including contingent liabilities, of such Person, (b) the present fair saleable value of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay such debts and liabilities as they mature and (d) such Person is not engaged in a business or a transaction, and is not about to engage in a business or a transaction, for which such Person’s property would constitute an unreasonably small capital. In the case of the Canadian Parent, “Solvent” means as of any date of determination, that on such date: (i) its property 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) it will be able to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities generally become due; and (iii) it has not ceased paying its current obligations in the ordinary
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course of business as they generally become due. 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.
“Specified Distributions” means dividends, returns of capital or other distributions, in cash, by the Borrower using all or a portion of the proceeds of the Loans that are in excess of the first
$100,000,000 of the Loans, provided that such dividends, returns of capital or other distribution shall not exceed $15,000,000 in the aggregate.
“Subsidiary” of a Person means a corporation, partnership, limited liability company, unlimited liability company, association or joint venture or other business entity of which a majority of the Equity Interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time owned or the management of which is controlled, directly, or indirectly through one or more intermediaries, by such Person. Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Borrower.
“Subsidiary Guarantor” means (a) each Subsidiary of the Borrower party to the Guaranty Agreement as of the Closing Date and (b) each other Subsidiary of the Borrower that guarantees, pursuant to Section 5.15 or otherwise, all or any part of the Obligations.
“Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity 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 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, that 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.
“Swap Termination Value” means, as to any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include a Lender or any Affiliate of a Lender).
“Synthetic Lease Obligation” means the monetary obligation of a Person under (a) a so- called synthetic, off-balance sheet or tax retention lease or (b) an agreement for the use or possession of property creating obligations that do not appear on the balance sheet of such Person but, upon the insolvency or bankruptcy of such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment).
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“Taxes” means 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.
“Trade Date” has the meaning specified in Section 9.04(f)(i).
“Treasury Rate” means, with respect to a prepayment prior to the No Call Expiration Date, the yield to maturity at the time of computation of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15(519) that has become publicly available at least two Business Days prior to such prepayment date (or, if such Federal Reserve Statistical Release referred to in the previous parenthetical is no longer published, any publicly available source of similar market data)) most nearly equal to the period from such prepayment date to No Call Expiration Date; provided that if the period from such prepayment date to No Call Expiration Date is not equal to the constant maturity of the United States Treasury security for which a weekly average yield is given, the Treasury Rate shall be obtained by linear interpolation (calculated to the nearest one-twelfth of a twelve (12) month period) from the weekly average yields of United States Treasury securities for which such yields are given, except that if the period from such prepayment date to the No Call Expiration Date, is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year shall be used.
“UCC” shall mean the Uniform Commercial Code in effect from time to time in the State of New York; provided, however, that if by reason of mandatory provisions of law, the perfection or the effect of perfection or non-perfection of the security interest in any item or portion of the Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, “UCC” shall mean the Uniform Commercial Code as in effect in such other jurisdiction for the purposes of the provisions hereof relating to such perfection or effect of perfection or non-perfection.
“United States” and “U.S.” mean the United States of America.
“U.S. Person” means any Person that is a “United States Person” as defined in Section 7701(a)(30) of the Code.
“U.S. Tax Compliance Certificate” has the meaning specified in Section 2.14(g).
“Wholly-Owned” means, as to a Subsidiary of a Person, a Subsidiary of such Person all of the outstanding Equity Interests of which (other than (a) director’s qualifying shares and (b) shares issued to foreign nationals to the extent required by Applicable Law) are owned by such Person and/or by one or more Wholly-Owned Subsidiaries of such Person.
“Withholding Agent” means the Borrower and the Agent.
SECTION 1.02 Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” The word “or” is not exclusive. The word “year” shall refer (i) in the case of a leap year, to a year of three hundred sixty-six (366) days, and (ii) otherwise, to a year of three hundred sixty-five (365) days. Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein),
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SECTION 1.04 Divisions. For all purposes under the Loan Documents, in connection with any division or plan of division under Delaware law (or any comparable event under a different jurisdiction’s laws): (a) if any asset, right, obligation or liability of any Person becomes the asset, right, obligation or liability of a different Person, then it shall be deemed to have been transferred from the original Person to the subsequent Person, and (b) if any new Person comes into existence, such new Person shall be deemed to have been organized on the first date of its existence by the holders of its Equity Interests at such time.
ARTICLE II COMMITMENTS AND BORROWINGS
SECTION 2.01 Commitments. Subject to the terms and conditions set forth herein each Initial Lender severally agrees to make a Loan to the Borrower on the Closing Date in an aggregate principal amount equal to such Initial Lender’s Initial Commitment. Subject to the terms and conditions set forth herein
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and in the applicable Joinder Agreement with respect to the applicable Incremental Facility, each Incremental Lender under the applicable Incremental Facility severally agrees to make a Loan to the Borrower on such applicable Incremental Commitment Effective Date in an aggregate principal amount equal to such Incremental Lender’s Incremental Commitment under such Incremental Facility. Amounts borrowed under this Section 2.01 and repaid or prepaid may not be reborrowed.
SECTION 2.02 Loans and Borrowings.
$5,000,000 or a larger multiple of $100,000.
SECTION 2.03 Borrowing Requests.
SECTION 2.04 Funding of Borrowings.
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from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Agent, at (i) in the case of a payment to be made by such Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Agent in accordance with banking industry rules on interbank compensation, and (ii) in the case of a payment to be made by the Borrower, the interest rate applicable to such Loans. If the Borrower and such Lender shall pay such interest to the Agent for the same or an overlapping period, the Agent shall promptly remit to the Borrower the amount of such interest paid by the Borrower for such period. If such Lender pays its share of the applicable Borrowing to the Agent, then the amount so paid shall constitute such Lender’s Loan included in such Borrowing. Any payment by the Borrower shall be without prejudice to any claim the Borrower may have against a Lender that shall have failed to make such payment to the Agent.
SECTION 2.05 Prepayments.
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accepting Lender) of the $5,000,000 aggregate principal amount prepayment, at the prepayment price set forth above.
(y) the aggregate principal amount of any prepayments of Loans made on or after the Fourth Amendment Effective Date pursuant to Section 2.05(a) or Section 2.05(vi), on a pro rata basis at a price equal to 103.22% of the principal amount prepaid, plus accrued and unpaid interest to, but excluding, the prepayment date; provided that, to the extent Newco does not become a Loan Party and no Scheduled Prepayment Amount has been paid, in each case, on or prior to April 30, 2023, the Scheduled Prepayment Amount shall be increased to $36,000,000; provided further, that, to the extent that Newco does not become a Loan Party and no Scheduled Prepayment Amount has been paid, in each case, on or prior to May 31, 2023, the Scheduled Prepayment Amount shall be increased to $37,000,000. For the avoidance of doubt, the prepayment premiums required pursuant to Sections 2.05(d)(i) and 2.05(d)(iii) below shall not apply with respect to the prepayment of Loans pursuant to this Section 2.05(b)(v).
(ii) the amount that Borrower is obligated to prepay pursuant to Section 2.05(b)(v) above.
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Prepayment Date |
Prepayment Premium |
after the date that is the thirty (30) month anniversary of the Closing Date but on or prior to the date that is the forty-second (42) month anniversary of the Closing Date |
3.22% |
Thereafter |
0% |
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(ix) and (x), any Lender at its option, may elect to decline such prepayment by notifying the Borrower any time on or after the day on which such Lender received notice of such prepayment pursuant to Section 2.05(c) and on or before the day that is five Business Days prior to the day on which such prepayment is to be made. The Borrower shall pay to each Lender that has not declined such prepayment pursuant to this Section 2.05(f)(ii) its pro rata share (based on the aggregate principal amount of Loans held by each accepting Lender) of the applicable aggregate principal amount of such prepayment.
SECTION 2.06 Termination of Commitments. The Initial Commitments shall automatically and permanently terminate on the Closing Date upon the funding of the Loans under the Initial Facility. The Incremental Commitments under such Incremental Facility shall automatically and permanently terminate on the applicable Incremental Commitment Effective Date upon the funding of the Loans under such Incremental Facility.
SECTION 2.07 Repayment of Loans. The Borrower shall repay each Lender on a pro rata basis the aggregate principal amount of all Loans outstanding under the Facility on the Maturity Date.
SECTION 2.08 Interest.
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while any Event of Default exists, the Borrower shall pay interest on the principal amount of all Loans outstanding hereunder at a rate per annum equal to the applicable Default Rate and, for the avoidance of doubt, such Default Rate shall be deemed to have accrued since the occurrence of such Event of Default.
(ii) in the event of any repayment or prepayment of any Loan, accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment. All accrued, unpaid interest shall be due and payable in full on the Maturity Date. The payment of interest shall be made to an account held by each Lender and designated by each Lender in writing in not less than five (5) Business Days prior to the date when the interest is due. Interest shall be payable in the lawful currency of the United States.
SECTION 2.09 Fees.
SECTION 2.10 Evidence of Debt.
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conflict between the records maintained by any Lender and the records maintained by the Agent in such matters, the records of the Agent shall control in the absence of manifest error.
SECTION 2.11 Payments Generally; Several Obligations of Lenders.
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notwithstanding any contrary provision hereof, (i) apply any amounts thereafter received by the Agent for the account of such Lender for the benefit of the Agent to satisfy such Lender’s obligations to the Agent until all such unsatisfied obligations are fully paid or (ii) hold any such amounts in a segregated account as cash collateral for, and for application to, any future funding obligations of such Lender under any such Section, in the case of each of clauses (i) and (ii) above, in any order as determined by the Agent in its discretion.
SECTION 2.12 Sharing of Payments. If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans or other obligations hereunder resulting in such Lender receiving payment of a proportion of the aggregate amount of its Loans and accrued interest thereon or other such obligations greater than its pro rata share thereof as provided herein, then the Lender receiving such greater proportion shall (a) notify the Agent of such fact, and (b) purchase (for cash at face value) participations in the Loans and such other obligations of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and other amounts owing them; provided that:
The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under Applicable Law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.
SECTION 2.13 Increased Costs.
(i) Indemnified Taxes, (ii) Taxes described in clauses (b) through (e) of the definition of Excluded Taxes and (iii) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto and the result thereof shall be to increase the cost to such Lender or such other Recipient of making, converting to, continuing or maintaining any Loan or of maintaining its obligation to make any such Loan, or to increase the cost to such Lender, or to reduce the amount of any sum received or receivable by such Lender or other Recipient hereunder (whether of principal, interest or any other amount) then, upon request of such Lender or other Recipient, the Borrower will pay to such Lender or other Recipient, as the case may be, such additional
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amount or amounts as will compensate such Lender or other Recipient, as the case may be, for such additional costs incurred or reduction suffered.
SECTION 2.14 Taxes.
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FATCA.
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of the any Loan Party under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by Applicable Law. If any Applicable Law (as determined in the good faith discretion of an applicable Withholding Agent) requires the deduction or withholding of any Tax from any such payment by a Withholding Agent, then the applicable Withholding Agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with Applicable Law and, if such Tax is an Indemnified Tax, then the sum payable by the applicable Loan Party shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section) the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.
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such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender (with a copy to the Agent), or by the Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.
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by the recipient) on or about the date on which such Foreign Lender becomes a Recipient under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Agent), whichever of the following is applicable:
U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN or IRS Form W-8BEN-E establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;
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time or times reasonably requested by the Borrower or the Agent such documentation prescribed by Applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Agent as may be necessary for the Borrower and the Agent to comply with their obligations under FATCA and to determine that such Recipient has complied with such Recipient’s obligations under FATCA or to determine the amount, if any, to deduct and withhold from such payment. Solely for purposes of this clause (D), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.
Each Recipient agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and the Agent in writing of its legal inability to do so.
SECTION 2.15 Mitigation Obligations; Replacement of Lenders.
(i) would eliminate or reduce amounts payable pursuant to Section 2.13 or 2.14, as the case may be, in the future, and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.
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Governmental Authority for the account of any Lender pursuant to Section 2.14 and, in each case, such Lender has declined or is unable to designate a different lending office in accordance with clause (a) of this Section, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 9.04), all of its interests, rights (other than its existing rights to payments pursuant to Section 2.13 or Section 2.14) and obligations under this Agreement and the related Loan Documents to an Eligible Assignee or Preferred Assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that:
A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.
SECTION 2.16 Extension of Maturity Date.
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Assumption pursuant to which such Additional Lender shall, effective as of the Existing Maturity Date, assume the Outstanding Amount of Loans of such Non-Extending Lender set forth in such Assignment and Assumption (and, if any such Additional Lender is already a Lender, such Outstanding Amount of Loans so assigned and assumed shall be in addition to the Outstanding Amount of Loans of such Lender hereunder on such date).
SECTION 2.17 Incremental Commitments.
$150,000,000; provided that (i) any such request for an Incremental Facility shall be in a minimum amount of the lesser of (x) $5,000,000 (or such lesser amount as may be approved by the Agent) and (y) the entire remaining amount available under this Section and (ii) in lieu of establishing an Incremental Facility, the Borrower may elect to increase the Initial Facility, provided that such increased portion shall be subject to the same terms and conditions of this Section 2.17 as if such increased portion were a separate Incremental Facility.
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In order to effect such Incremental Facility, the Borrower, the applicable Incremental Lender(s) and the Agent (but no other Lenders or Persons) shall enter into one or more Joinder Agreements, each in form and substance satisfactory to the Borrower and the Agent, pursuant to which the applicable Incremental Lender(s) will provide the Incremental Commitment(s).
Effective as of the applicable Incremental Commitment Effective Date, subject to the terms and conditions set forth in this Section, each Incremental Commitment shall be a Commitment and Schedule
2.01 shall be updated accordingly to reflect such Incremental Commitment, each Incremental Lender providing such Incremental Commitment shall be, and have all the rights of, a Lender, and the Loans made by it on such Incremental Commitment Effective Date pursuant to clause (e) of this Section shall be Loans, for all purposes of this Agreement.
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As of such Incremental Commitment Effective Date, upon the Agent’s receipt of the documents required by this clause (d), the Agent shall record the information contained in the applicable Joinder Agreement(s) in the Register and give prompt notice of the Incremental Commitments to the Borrower and the Lenders (including each Incremental Lender).
SECTION 2.18 Payment Protocols. The Agent shall, with one Business Day of any request by Xxxxxxxx, whether in connection with a payment, prepayment or otherwise, furnish to the Borrower a true and complete copy of the Register. The Borrower shall be entitled to rely upon, and shall not incur any liability for relying upon, the Register in connection with any payment or prepayment or otherwise.
ARTICLE III REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Agent and the Lenders that:
SECTION 3.01 Existence, Qualification and Power. The Borrower and each Subsidiary
(a) is duly organized or formed, validly existing and, as applicable, in good standing under the Laws of the jurisdiction of its incorporation or organization, (b) has all requisite power and authority and all requisite governmental licenses, authorizations, consents and approvals to (i) own or lease its assets and carry on its business and (ii) execute, deliver and perform its obligations under the Loan Documents to which it is a party, and (c) is duly qualified and is licensed and, as applicable, in good standing under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification or license, except, in each case referred to in clause (a) (other than with respect to the Borrower), (b)(i) or (c), to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect.
SECTION 3.02 Authorization; No Contravention. The execution, delivery and performance by the Borrower of each Loan Document to which it is party have been duly authorized by all necessary corporate or other organizational action, and do not and will not (a) contravene the terms of its Organizational Documents, (b) conflict with or result in any breach or contravention of, or the creation of any Lien under, or require any payment to be made under (i) any Contractual Obligation to which the Borrower is a party or affecting the Borrower or the properties of the Borrower or any Subsidiary or (ii) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which the Borrower or any Subsidiary or its property is subject or (c) violate any Requirements of Law.
SECTION 3.03 Governmental Authorization; Other Consents. No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with the execution, delivery or performance by, or enforcement against, the Borrower of this Agreement or any other Loan Document, except for (a) filings and recordings with respect to the Collateral to be made as of the Closing Date and (b) such approvals, consents, exemptions, authorizations, actions or notices that have been duly obtained, taken or made and in full force and effect.
SECTION 3.04 Execution and Delivery; Binding Effect. This Agreement has been, and each other Loan Document, when delivered hereunder, will have been, duly executed and delivered by the Borrower. This Agreement constitutes, and each other Loan Document when so delivered will constitute, a legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium or other Laws affecting creditors’ rights generally and by general principles of equity.
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SECTION 3.05 Financial Statements; No Material Adverse Effect.
SECTION 3.06 Litigation. There are no actions, suits, proceedings, claims, disputes or investigations pending or, to the knowledge of the Borrower, threatened, at Law, in equity, in arbitration or before any Governmental Authority, by or against the Borrower or any Subsidiary or against any of their properties or revenues that (a) except as specifically disclosed in Schedule 3.06, either individually or in the aggregate could reasonably be expected to have a Material Adverse Effect or (b) purport to affect or pertain to this Agreement or any other Loan Document or any of the transactions contemplated hereby. There has been no change in the status, or financial effect on the Borrower or any Subsidiary, of the matters disclosed in Schedule 3.06 that, either individually or in the aggregate, has increased or could reasonably be expected to increase the likelihood that such matter(s) could have a Material Adverse Effect.
SECTION 3.07 No Default. Neither the Borrower nor any Subsidiary thereof is in default under or with respect to any Contractual Obligation that, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. No Default has occurred and is continuing or would result from the consummation of the transactions contemplated by this Agreement or any other Loan Document.
SECTION 3.08 Property.
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have a Material Adverse Effect. The conduct of the business of the Borrower or any Subsidiary as currently conducted or as contemplated to be conducted does not infringe upon, or violate any rights held by any Person, except to the extent that such infringements and violations, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. No claim or litigation regarding any of the foregoing is pending or, to the knowledge of the Borrower, threatened that could reasonably be expected to have a Material Adverse Effect.
SECTION 3.09 Taxes. The Borrower and its Subsidiaries have filed all federal, state, provincial, territorial and other tax returns and reports required to be filed, and have paid all federal, state, provincial, territorial and other taxes, assessments, fees and other governmental charges levied or imposed upon them or their properties, income or assets otherwise due and payable, except (a) Taxes that are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves are being maintained in accordance with IFRS, (b) Taxes that are being paid in accordance with the 2023 IRS Payment Plan, or (c) to the extent that the failure to do so could not reasonably be expected to have a Material Adverse Effect.
SECTION 3.10 Disclosure. (a) The Borrower has disclosed to the Agent and the Lenders all agreements, instruments and corporate or other restrictions to which the Borrower or any of its Subsidiaries is subject, and all other matters known to it, that, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. The reports, financial statements, certificates and other written information (other than projected or pro forma financial information) furnished by or on behalf of the Borrower to any Agent or any Lender in connection with the transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder or under any other Loan Document (as modified or supplemented by other information so furnished), taken as a whole, do not contain any material misstatement of fact or omit to state any material fact necessary to make the statements therein (when taken as a whole), in the light of the circumstances under which they were made, not misleading; provided that, with respect to projected or pro forma financial information, the Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time of preparation and delivery (it being understood that such projected information may vary from actual results and that such variances may be material).
(b) The information included in the Beneficial Ownership Certification is true and correct in all respects.
SECTION 3.11 Compliance with Laws, Etc. Each of the Borrower and its Subsidiaries is in compliance with all Requirements of Law and all orders, writs, injunctions and decrees applicable to it or to its properties, except in such instances in which (i) such Requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted or (ii) the failure to so comply, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.
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SECTION 3.12 ERISA Compliance.
SECTION 3.13 Environmental Matters. Except with respect to any matters that, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect, neither the Borrower nor any Subsidiary (a) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (b) knows of any basis for any permit, license or other approval required under any Environmental Law to be revoked, canceled, limited, terminated, modified, appealed or otherwise challenged, (c) has or could reasonably be expected to become subject to any Environmental Liability, (d) is aware of or has received notice of any claim, suit, complaint, proceeding, investigation or inquiry with respect to any Environmental Liability (and no such claim, suit, complaint, proceeding, investigation or inquiry is pending or, to the knowledge of the Borrower, is threatened or contemplated) or (e) knows of any facts, events or circumstances that could give rise to any basis for any Environmental Liability of the Borrower or any Subsidiary.
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SECTION 3.14 Margin Regulations. Neither the Borrower nor any of its Subsidiaries is engaged and will not engage, principally or as one of its important activities, in the business of purchasing or carrying Margin Stock, or extending credit for the purpose of purchasing or carrying Margin Stock, and no part of the proceeds of any Borrowing hereunder will be used to buy or carry any Margin Stock. Following the application of the proceeds of each Borrowing, not more than 25% of the value of the assets (either of the Borrower only or of the Borrower and its Subsidiaries on a consolidated basis) will be Margin Stock.
SECTION 3.15 Investment Company Act. Neither the Borrower nor any of its Subsidiaries is an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940.
SECTION 3.16 Sanctions; Anti-Money Laundering; Anti-Corruption.
SECTION 3.17 Solvency. The Borrower and its Subsidiaries on a consolidated basis are, before and immediately upon giving effect to the incurrence of the Loans hereunder, Solvent.
SECTION 3.18 Collateral Documents.
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case of the Pledged Collateral, when the original stock certificates representing the Pledged Collateral are delivered to the Agent and UCC financing statements in the appropriate form are filed in respect of the applicable Loan Parties in the offices of secretaries of state of those states specified in paragraph 1(a) of the Perfection Certificate, to the extent perfection can be obtained by the deposit of the original stock certificates and the filing of UCC financing statements, the Agent (for the benefit of the Lenders) shall have a fully perfected Lien on, and security interest in all right, title and interest of the relevant Loan Parties in such Pledged Collateral and, subject to Section 9-315 of the UCC, the proceeds thereof, as security for the Obligations, prior and superior in right to any other person (except for Liens permitted under Section 6.02),
(iii) in the case of any deposit or securities accounts included in the Collateral (which, for the avoidance of doubt, excludes Excluded Accounts), to the extent perfection can be obtained by entering into a Control Agreement, when a Control Agreement is entered into with respect to such deposit or securities accounts, the Agent (for the benefit of the Lenders) shall have a fully perfected Lien on, and security interest in all right, title and interest of the applicable Loan Parties in such deposit or securities accounts, as applicable, as security for the Obligations, prior and superior in right to any other person (except for Liens permitted under Section 6.02) and (iv) in the case of United States patent, United States copyright, and United States federal trademark registrations, and applications for the issuance or registration of any of the foregoing upon the recordation of a short-form security agreement in form and substance reasonably satisfactory to the Agent with the United States Patent and Trademark Office, or the United States Copyright Office, as applicable, together with the filing of UCC financing statements (together with any schedules the Agent requests that the Borrower includes to itemize such Intellectual Property included as Collateral) in the appropriate form in respect of the applicable Loan Parties in the offices of secretaries of state of those states specified in paragraph 1(a) of the Perfection Certificate, the Agent (for the benefit of the Lenders) shall have a fully perfected Lien on, and security interest in all right, title and interest of the applicable Loan Parties organized in the United States in such Intellectual Property in which a security interest may be perfected by such filing in the United States, in each case, prior and superior in right to any other Person (except for Liens permitted under Section 6.02 that have priority as a matter of law) (it being understood that subsequent recordings in the United States Patent and Trademark Office or the United States Copyright Office, as applicable, may be necessary to perfect a Lien on patents, patent applications, and trademark and copyright registrations and applications for registration acquired, obtained or initiated by, or granted to, the Loan Parties after the date hereof).
ARTICLE IV CONDITIONS
SECTION 4.01 Closing Date. The obligation of each Lender to make Borrowings hereunder is subject to the satisfaction (or waiver in accordance with Section 9.02) of the following conditions (and, in the case of each document specified in this Section to be received by the Agent, such document shall be in form and substance satisfactory to the Agent and each Lender):
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Agreement), and (iv) from each party to the Notice of Assignment (as defined in the Pledge and Security Agreement) pertaining to the Purchase Agreement, a counterpart of such Notice of Assignment signed on behalf of such party (or written evidence satisfactory to the Agent (which may include transmission by electronic mail of a signed signature page to such Notice of Assignment) that such party has signed a counterpart of such Notice of Assignment).
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Without limiting the generality of Section 8.03(c), for purposes of determining satisfaction of the conditions specified in this Section, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.
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The Agent shall notify the Borrower and the Lenders of the Closing Date, and such notice shall be conclusive and binding.
SECTION 4.02 Conditions to All Borrowings. The obligation of each Lender to make a Borrowing (including its initial Borrowing and any Borrowing under an Incremental Facility) is additionally subject to the satisfaction of the following conditions:
Each Borrowing Request by the Borrower hereunder and each Borrowing shall be deemed to constitute a representation and warranty by the Borrower on and as of the date of the applicable Borrowing as to the matters specified in clauses (b) and (c) above in this Section 4.02.
ARTICLE V AFFIRMATIVE COVENANTS
Until the Commitments have expired or been terminated and all Obligations shall have been paid in full, the Borrower covenants and agrees with the Lenders that:
SECTION 5.01 Financial Statements. The Borrower will furnish to the Agent and each
Lender:
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SECTION 5.02 Certificates; Other Information. The Borrower will deliver to the Agent and
each Lender:
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Documents required to be delivered pursuant to Section 5.01(a) or (b) or Section 5.02(b) (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and, if so delivered, shall be deemed to have been delivered on the date (i) on which such materials are publicly available as posted on the Electronic Data Gathering, Analysis and Retrieval system (XXXXX) or SEDAR; or (ii) on which such documents are posted on the Borrower’s behalf on an Internet or intranet website, if any, to which each Lender and the Agent have access (whether a commercial, third- party website or whether sponsored by the Agent); provided that: (A) upon written request by the Agent, the Borrower shall deliver paper copies of such documents to the Agent or any Lender upon its request to the Borrower to deliver such paper copies until a written request to cease delivering paper copies is given by the Agent or such Lender and (B) the Borrower shall notify the Agent and each Lender (by electronic mail) of the posting of any such documents and provide to the Agent by electronic mail electronic versions (i.e., soft copies) of such documents. The Agent shall have no obligation to request the delivery of or to maintain paper copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Borrower with any such request by a Lender for delivery, and each Lender shall be solely responsible for timely accessing posted documents or requesting delivery of paper copies of such document to it and maintaining its copies of such documents.
SECTION 5.03 Quarterly Lender Calls. Borrower and the Canadian Parent shall participate in conference calls for Lenders to discuss financial and other information regarding the Borrower and its Subsidiaries and their business, at times mutually agreed by the Agent and the Borrower, each acting reasonably; provided that such calls shall be limited once per quarter and shall be held within ten Business Days following the earlier of (a) the delivery of the Compliance Certificate pursuant to Section 5.02(a) or (b) the date on which a Compliance Certificate was required to be delivered pursuant to Section 5.02(a) or (b).
SECTION 5.04 Notices. The Borrower shall promptly notify the Agent and each Lender of:
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Each notice delivered under this Section shall be accompanied by a statement of a Responsible Officer of the Borrower setting forth the details of the occurrence requiring such notice and stating what action the Borrower has taken and proposes to take with respect thereto.
SECTION 5.05 Preservation of Existence, Etc. The Borrower will, and will cause each of its Subsidiaries to, (a) preserve, renew and maintain in full force and effect its legal existence and good standing under the Laws of the jurisdiction of its organization except in a transaction permitted by Section 6.03 or 6.04; (b) take all reasonable action to maintain all rights, licenses (including the Material Licenses), permits, privileges and franchises necessary or desirable in the normal conduct of its business, except other than in the case of Material Licenses to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect; and (c) preserve and renew all of its registered Intellectual Property rights, and protect all of its unregistered Intellectual Property rights, used in the operation of its business, the non-preservation, non- renewal or non-protection of which could reasonably be expected to have a Material Adverse Effect.Maintenance of Properties. The Borrower will, and will cause each of its Subsidiaries to, (a) maintain, preserve and protect all of its properties and equipment necessary in the operation of its business in good working order and condition (ordinary wear and tear excepted) and (b) make all necessary repairs thereto and renewals and replacements thereof, except to the extent that the failure to do so could not reasonably be expected to have a Material Adverse Effect.
SECTION 5.07 Maintenance of Insurance. The Borrower will, and will cause each of its Subsidiaries to, maintain with financially sound and reputable insurance companies, insurance with respect to its properties and business against loss or damage of the kinds customarily insured against by Persons engaged in the same or similar business, of such types and in such amounts (after giving effect to any self- insurance reasonable and customary for similarly situated Persons engaged in the same or similar businesses as the Borrower and its Subsidiaries) as are customarily carried under similar circumstances by such Persons. If any portion of any Material Real Property is at any time located in an area identified by the Federal Emergency Management Agency (or any successor agency) as a special flood hazard area with respect to which flood insurance has been made available under the National Flood Insurance Act of 1968 (as now or hereafter in effect or successor act thereto), then, to the extent required by Applicable Laws, the Borrower shall, or shall cause the applicable Subsidiary to, (i) maintain, or cause to be maintained, with a financially sound and reputable insurer, flood insurance sufficient to comply with all applicable rules and regulations promulgated pursuant to any applicable flood insurance Laws and (ii) deliver to the Agent and the Lenders as requested evidence of such compliance in such form, on such terms and in such amounts acceptable to the Agent and the Lenders. Any such insurance shall name the Agent as additional insured or loss payee, as applicable.
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SECTION 5.08 Payment of Obligations. The Borrower will, and will cause each of its Subsidiaries to, pay, discharge or otherwise satisfy as the same shall become due and payable, all of its obligations and liabilities, including Tax liabilities, except (a) obligations and liabilities, including Tax liabilities that are being contested in good faith by appropriate proceedings diligently conducted and adequate reserves in accordance with GAAP are being maintained by the Borrower or such Subsidiary, (b) Tax liabilities that are being paid in accordance with the 2023 IRS Payment Plan, or (c) to the extent that the failure to do so could not reasonably be expected to have a Material Adverse Effect.
SECTION 5.09 Compliance with Laws. The Borrower will, and will cause each of its
Subsidiaries to:
SECTION 5.10 Environmental Matters. Except to the extent that the failure to do so could not reasonably be expected to have a Material Adverse Effect, the Borrower will, and will cause each of its Subsidiaries to, (a) comply with all Environmental Laws, (b) obtain, maintain in full force and effect and comply with any permits, licenses or approvals required for the facilities or operations of the Borrower or any of its Subsidiaries, and (c) conduct and complete any investigation, study, sampling or testing, and undertake any corrective, cleanup, removal, response, remedial or other action necessary to identify, report, remove and clean up and otherwise remediate all Hazardous Materials present or released at, on, in, under or from any of the facilities or real properties of the Borrower or any of its Subsidiaries.
SECTION 5.11 Books and Records. The Borrower will, and will cause each of its Subsidiaries to, maintain proper books of record and account, in which full, true and correct entries in conformity with GAAP consistently applied shall be made of all financial transactions and matters involving the assets and business of the Borrower or such Subsidiary, as the case may be.
SECTION 5.12 Inspection Rights. The Borrower will, and will cause each of its Subsidiaries to, permit representatives and independent contractors of the Agent and each Lender to visit and inspect any of its properties, to examine its corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss its affairs, finances and accounts with its directors, officers, and independent public accountants, all at the reasonable expense of the Borrower and at such reasonable times during normal business hours as may be reasonably requested; provided that, other than with respect to such visits and inspections during the continuation of an Event of Default, (a) only the Agent on behalf of the Lender may exercise rights under this Section and (b) the Agent shall not exercise such rights more often than once during any calendar year; provided, further, that when an Event of Default exists the Agent or any Lender (or any of their respective representatives or independent contractors) may do any of the foregoing under this Section at the expense of the Borrower and at any time during normal business hours and without advance notice. The Agent and the Lenders shall give the Borrower the opportunity to participate in any discussions with the Borrower’s accountants.
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SECTION 5.13 Use of Proceeds. The Borrower will, and will cause each of its Subsidiaries to, use the proceeds of the Loans (a) to fund the contingent payment due on the acquisition of Ilera Healthcare,
(b) to pay transaction fees and expenses in connection with this Agreement and the other Loan Documents and the incurrence of the Loans, (c) if applicable, to pay Specified Distributions and (d) for working capital and general corporate purposes of the Borrower and its Subsidiaries not in contravention of any Law or of any Loan Document.
SECTION 5.14 Sanctions; Anti-Money Laundering Laws; Anti-Corruption Laws. The Borrower will maintain in effect policies and procedures designed to promote compliance by the Borrower, its Subsidiaries, and their respective directors, officers, employees, and agents with Sanctions, Anti-Money Laundering Laws, and Anti-Corruption Laws.
SECTION 5.15 Additional Guarantors and Collateral Matters.
(ii) taking such other actions as are necessary to deliver certificates, documents, opinions and statements substantially consistent with those certificates, instruments, documents, opinions and statements delivered on or before the Closing Date pursuant to Section 4.01(b) through (f); provided that, with respect to Newco and notwithstanding anything in this Section 5.15(a) or anything in the Loan Documents to the contrary, upon obtaining CRC Approval, the Borrower shall use its commercially reasonable efforts to (i) cause Newco to become a Loan Party and (ii) to take the actions prescribed in the foregoing by no later than September 30, 2023 (or such later date as the Agent may agree at the direction of Required Lenders).
(75) days (or such later time as the Agent may agree) of the date of acquiring or obtaining such Material Real Property and (ii) notify the Agent promptly upon entering into any lease agreements with respect to real property and shall, within seventy five (75) days of such date (or such later time as the Agent may agree), deliver a counterpart of each party to a Notice of Assignment (as defined in the Pledge and Security Agreement) with respect to such leased properties, signed on behalf of such party (or written evidence satisfactory to the Agent (which may include transmission by electronic mail of a signed signature page to such Notice of Assignment) that such party has signed a counterpart of such Notice of Assignment).
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the transactions contemplated by the Loan Documents and in order to grant, preserve, protect and perfect the validity and first priority of the security interests created or intended to be created by the Collateral Documents. In addition, from time to time, the Borrower shall, and shall cause each of its Subsidiaries, at its cost and expense, promptly secure the Obligations by pledging, charging, or creating, or causing to be pledged, charged or created, perfected security interests with respect to such of its assets and properties as the Agent or the Required Lenders shall designate (it being understood that it is the intent of the parties that the Obligations shall be secured by substantially all the assets of the Borrower and its Subsidiaries (including real and other properties acquired subsequent to the Closing Date)). Such security interests and Liens will be created under the Collateral Documents and other security agreements, mortgages, deeds of trust and other instruments and documents in form and substance satisfactory to the Agent or the Required Lenders. The Borrower agrees to provide such evidence as the Agent or the Required Lenders shall reasonably request as to the perfection and priority status of each such security interest and Lien.
SECTION 5.16 Post-Closing Obligations. The Borrower shall, and shall cause each of its Subsidiaries to, satisfy the requirements set forth on Schedule 5.16 in the time periods set forth therein. The parties acknowledge and agree that notwithstanding anything herein to the contrary, all conditions, representations, warranties and covenants of the Loan Documents with respect to the taking of such actions are qualified by the non-completion of such actions until the earlier of the time at which they are completed or required to be completed in accordance with this Section 5.16.
ARTICLE VI NEGATIVE COVENANTS
Until the Commitments have expired or been terminated and all Obligations have been paid in full, the Borrower covenants and agrees with the Lenders that:
SECTION 6.01 Indebtedness. The Borrower will not, nor will it permit any Subsidiary to, create, incur, assume or suffer to exist any Indebtedness, except:
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such Person in the ordinary course of business for the purpose of mitigating risks associated with liabilities, commitments, investments, assets or property held or reasonably anticipated by such Person, or changes in the value of securities issued by such Person, and not for speculative purposes;
(j) that is owed to the Canadian Parent or any of its Subsidiaries (other than the Borrower and its Subsidiaries), the borrower and lender with respect to such Indebtedness shall have executed and delivered to the Agent either an intercompany subordination agreement or, to the extent required by the Pledge and Security Agreement, an intercompany note, in each case, reasonably satisfactory to the Agent;
(ii) any Taxes payable pursuant to the 2023 IRS Payment Plan;
(A) to the extent such Indebtedness is secured, it is not secured by any assets other than those assets that were acquired through such Permitted Acquisition (including, for avoidance of doubt, a limited recourse pledge of the Equity Interests of the relevant Subsidiary acquired in such Permitted Acquisition) or owned by a Subsidiary acquired through such Permitted Acquisition, (B) to the extent such Indebtedness is guaranteed, it is not guaranteed by any of the Loan Parties other than
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any Subsidiaries that are acquired as part of such Permitted Acquisition, and (C) before and after giving effect to the incurrence or assumption of such Indebtedness and the related Permitted Acquisition as if such actions had occurred at the beginning of the most recently ended fiscal two fiscal quarter period, (I) the Financial Covenants on a pro forma basis would each be satisfied as of the last day of the most recently ended fiscal quarter and (II) the Consolidated Leverage Ratio on a pro forma basis as of the last day of the most recently ended fiscal quarter would be equal to or less than 2.50:1.00;
Indebtedness incurred pursuant to the Xxxxxx Property Financing; and
SECTION 6.02 Liens. The Borrower will not, nor will it permit any Subsidiary to, create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, other than the following:
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good faith by appropriate proceedings for which adequate reserves have been established with respect thereto on the books of the applicable Person;
(i) such Liens do not at any time encumber any property other than the property financed by such Indebtedness (except for additions and accessions to such assets, the proceeds and products thereof and customary security deposits) and (ii) the Indebtedness secured thereby does not exceed the cost or fair market value, whichever is lower, plus related transaction costs, of the property being acquired on the date of acquisition; provided that, in the case of clause (e)(i), individual financings provided by one lender may be cross collateralized to other financings provided by such lender or its affiliates;
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guarantees issued naming as beneficiaries the owners or lessors of premises leased or operated by the Borrower or any of its Subsidiaries, in each case, in the ordinary course of business of the Borrower and such Subsidiaries to secure the performance of the Borrower’s or such Subsidiary’s obligations under the terms of the lease for such premises;
SECTION 6.03 Fundamental Changes. The Borrower will not, nor will it permit any Subsidiary to, merge, dissolve, liquidate, consolidate with or into another Person, or Dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person, except that, so long as no Default exists or would result therefrom:
SECTION 6.04 Dispositions. The Borrower will not, and will not permit any Subsidiary to, make any Disposition or enter into any agreement to make any Disposition, except:
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SECTION 6.05 Restricted Payments. The Borrower will not, and will not permit any Subsidiary to, declare or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except that, so long as no Event of Default shall have occurred and be continuing at the time of any action described below or would result therefrom:
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provided, that the proceeds of any such payment, purchase, redemption or otherwise, pursuant to this clause (d) shall not, directly or indirectly, be paid to, through distribution, dividend, loan, investment, or payment of any kind, to any direct or indirect shareholder of the Canadian Parent;
SECTION 6.06 Investments. The Borrower will not, and will not permit any Subsidiary to, make any Investments, except:
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SECTION 6.07 Transactions with Affiliates. The Borrower will not, and will not permit any Subsidiary to, enter into any transaction of any kind with any Affiliate of the Borrower, whether or not in the ordinary course of business, other than on fair and reasonable terms substantially as favorable to the Borrower or such Subsidiary as would be obtainable by the Borrower or such Subsidiary at the time in a comparable arm’s-length transaction with a Person other than an Affiliate; provided that the foregoing restriction shall not apply to (a) transactions between or among the Borrower and any of its Wholly-Owned Subsidiaries or between and among any Wholly-Owned Subsidiaries, (b) Restricted Payments permitted by Section 6.05, (c) director, officer and employee compensation (including bonuses) and other benefits (including retirement, health, stock option and other benefit plans) and indemnification arrangements and severance agreements, in each case approved by the Board of Directors of the Borrower or direct or indirect parent entity of the Borrower or the applicable Subsidiary, (d) transactions in respect of agreements and arrangements in effect on the Closing Date and set forth on Schedule 6.07 and any amendment or modification with respect to such agreement, arrangement or transaction, and the performance of obligations thereunder, so long as such amendment or modification is not materially adverse to the interests of the Lenders, (e) any agreement between any Person and an Affiliate of such Person existing at the time such Person is acquired by or merged into the Borrower or its Subsidiaries in accordance with the terms of this Agreement; provided that such agreement was not entered into in contemplation of such acquisition, merger or amalgamation, or any amendment thereto (so long as any such amendment is not disadvantageous to the Lenders in any material respect in the good faith judgment of the Borrower when taken as a whole as compared to such agreement as in effect on the date of such acquisition or merger), (f) that certain management services agreement dated March 1, 2020 by and among IHC Management LLC, Ilera Healthcare LLC and TerrAscend NJ LLC, and
(g) the transactions and all related actions constituting the Lodi and Maplewood Transaction.
SECTION 6.08 Certain Restrictive Agreements. The Borrower will not, and will not permit any Subsidiary to, enter into any Contractual Obligation (other than this Agreement or any other Loan Document) that, directly or indirectly, limits the ability of (i) any Subsidiary to make Restricted Payments to the Borrower or to otherwise transfer property to the Borrower, (ii) any Subsidiary to Guarantee Indebtedness of the Borrower or (iii) the Borrower or any Subsidiary to create, incur, assume or suffer to exist Liens on property of such Person to secure the Obligations; provided that this Section 6.08 shall not prohibit:
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of any license;
Subsidiary in the ordinary course of business;
SECTION 6.09 Changes in Fiscal Periods
. The Borrower will not permit the last day of its fiscal year to end on a day other than December 31 or change the Borrower’s method of determining its fiscal quarters.