EXHIBIT 10.5
by and among
PROPER HOLDINGS, LLC, NEW GROWTH HORIZON, LLC and NGH INVESTMENTS, LLC
as Borrowers,
the other Persons from time to time party hereto as Borrowers, the Persons from time to time party hereto as Guarantors,
the Lenders from time to time party hereto and
CHICAGO ATLANTIC ADMIN, LLC,
as Administrative Agent Dated as of May 9, 2022
GREEN IVY CAPITAL, LLC,
as Lead Arranger
TABLE OF CONTENTS
Pages ARTICLE I DEFINITIONS1
SECTION 1.01Defined Terms1
SECTION 1.02Other Interpretive Provisions23
SECTION 1.03Accounting Terms and Principles24
SECTION 1.04Rounding24
SECTION 1.05References to Agreements, Laws, Etc25
SECTION 1.06Times of Day25
SECTION 1.07Timing of Payment of Performance25
SECTION 1.08Corporate Terminology25
ARTICLE II AMOUNT AND TERMS OF LOANS25
SECTION 2.01Loans25
SECTION 2.02Disbursement of Funds; Original Issue Discount26
SECTION 2.03Payment of Loans; Evidence of Debt27
SECTION 2.04Interest and Fees28
SECTION 2.05Increased Costs, Illegality, Etc29
SECTION 2.06Multiple Borrowers30
SECTION 2.07Borrower Representative31
SECTION 2.08Defaulting Lender31
ARTICLE III COMMITMENT TERMINATIONS33
SECTION 3.01Mandatory Reduction of Commitments33
ARTICLE IV PAYMENTS33
SECTION 4.01Voluntary Prepayments33
SECTION 4.02Mandatory Prepayments33
SECTION 4.03Payment of Obligations; Method and Place of Payment35
SECTION 4.04Taxes36
SECTION 4.05Computations of Interest and Fees39
SECTION 4.06Maximum Interest39
ARTICLE V CONDITIONS PRECEDENT TO LOANS39
SECTION 5.01Closing Date Loan39
SECTION 5.02Loans Made after Closing Date43
ARTICLE VI GUARANTEE45
ii
SECTION 6.01Guarantee45
SECTION 6.02Right of Contribution46
SECTION 6.03No Subrogation46
SECTION 6.04Modification of the Guarantor Obligations46
SECTION 6.05Guarantee Absolute and Unconditional47
SECTION 6.06Reinstatement47
iii
ARTICLE VII REPRESENTATIONS, WARRANTIES AND AGREEMENTS48
ARTICLE VIII AFFIRMATIVE COVENANTS55
iv
v
ARTICLE IX NEGATIVE COVENANTS65
ARTICLE X EVENTS OF DEFAULT73
ARTICLE XI ADMINISTRATIVE AGENTS77
vi
vii
ARTICLE XII MISCELLANEOUS82
SECTION 12.06Successors and Assigns; Participations and Assignments;
ARTICLE XIII ADDITIONAL COVENANTS AND AGREEMENTS95
viii
ix
SCHEDULES
Schedule 1.01Commitments
Schedule 7.12Subsidiaries
Schedule 7.13Intellectual Property, Licenses, Etc.
Schedule 7.14Environmental Warranties
Schedule 7.15Ownership of Properties
Schedule 7.18Locations of Offices, Records and Collateral
Schedule 7.19Regulatory Licenses
Schedule 7.21Contractual or Other Restrictions
Schedule 7.22Collective Bargaining Agreements
Schedule 7.24Evidence of Other Indebtedness
Schedule 7.25Deposit Accounts and Securities Accounts
Schedule 7.27(a)Material Contracts and Regulatory Matters
Schedule 7.27(b)Sales Tracking Software
Schedule 7.29Transactions with Affiliates
Schedule 9.02Permitted Liens
Schedule 9.05Investments
Schedule 12.02General (Addresses for Notices) EXHIBITS
Exhibit AForm of Assignment and Acceptance
Exhibit BForm of Compliance Certificate
Exhibit CForm of Credit Agreement Joinder
Exhibit DForm of Note
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of May 9, 2022, is among PROPER HOLDINGS,
LLC, a Missouri limited liability company (“Parent”), NEW GROWTH HORIZON, LLC, a Missouri limited liability company (“New Growth Horizon”), NGH INVESTMENTS, LLC, a Missouri limited liability company (“NGH Investments”; together with Parent and New Growth Horizon and each other Person that becomes a borrower hereunder, each, a “Borrower” and collectively, jointly and severally, “Borrowers”), any Persons party thereto as Guarantors, the lenders from time to time party hereto (each, a “Lender” and, collectively, the “Lenders”), CHICAGO ATLANTIC ADMIN, LLC, a Delaware limited liability company (“Chicago Atlantic”), as Administrative Agent.
RECITALS
WHEREAS, Borrowers have requested that the Lenders extend to Borrowers certain Loans and Commitments as provided herein; and
WHEREAS, the Lenders have agreed to provide the Loans and the Commitments to make Loans, in each case subject to the terms and conditions contained in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01 Defined Terms. As used herein, the following terms shall have the meanings specified in this Section 1.01 unless the context otherwise requires:
“Administrative Agent” means Chicago Atlantic, in its capacity as administrative agent appointed under Section 11.01, or any successor administrative agent engaged in accordance with the terms of Section 11.08.
“Administrative Questionnaire” means a questionnaire completed by each Lender, in a form approved by Administrative Agent, in which such Lender, among other things, (a) designates one or more credit contacts to whom all syndicate-level information (which may contain material non-public information about the Obligors and their Related Parties or their respective securities) will be made available and who may receive such information in accordance with such Lender’s compliance procedures and Applicable Laws, including federal and state securities laws and (b) designates an address, electronic mail address or telephone number for notices and communications with such Lender.
“Affiliate” means, with respect to any Person, (a) any Person which, directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such Person, or
(b) any Person who is a director or officer (i) of such Person, (ii) of any Subsidiary of such Person or (iii) of any Person described in clause (a) above. For purposes of this definition, control of a Person means the power, direct or indirect, to (x) vote 10.00% or more of the Capital Stock or other form of ownership interest having ordinary voting power for the election of directors (or the comparable equivalent) of such Person or
(y) direct or cause the direction of the management and policies of such Person, in each case whether through the ownership of any Capital Stock, by contract or otherwise. Nether Administrative Agent nor any Lender shall be an Affiliate of any Consolidated Company for purposes of this Agreement or any other Loan Document.
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“Agreement” means this Credit Agreement, as it may be amended, restated, amended and restated, supplemented or otherwise modified from time to time.
“Aggregate Commitment” means $27,700,000, as such amount may be increased from time to time pursuant to Section 2.01(b).
“ALTA” means the American Land Title Association.
“Amortization Amount” means an amount equal to 1.00% of the aggregate principal amount of all Loans made by the Lenders (but excluding, for the avoidance of doubt, all PIK Interest that is paid in kind and deemed to be a part of the principal amount of the Loans pursuant to Section 2.04(b)).
“Anti-Corruption Laws” means all laws, rules, and regulations of any jurisdiction applicable to any Obligor or any of its Subsidiaries from time to time concerning or relating to bribery or corruption, including the United States Foreign Corrupt Practices Act of 1977 and other similar anti-corruption legislation in other jurisdictions.
“Anti-Terrorism Laws” shall have the meaning set forth in Section 7.28.
“Applicable Laws” means, subject to the carve-outs and acknowledgments contained in Section 13.01, as to any Person, any law (including common law), statute, regulation, ordinance, rule, order, policy, decree, judgment, consent decree, writ, injunction, settlement agreement or governmental requirement enacted, promulgated or imposed or entered into or agreed by any Governmental Authority or determination of an arbitrator, in each case applicable to or binding on such Person or any of its property, products, business, assets or operations or to which such Person or any of its property, products, business, assets or operations is subject.
“Application Event” shall have the meaning set forth in Section 4.02(d).
“Applicable Fiscal Period” means the period of 12 consecutive fiscal months ending at the end of each prescribed fiscal month.
“Approved Fund” means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in commercial loans and similar extensions of credit in the ordinary course and that is administered, advised or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers, advises or manages a Lender.
“Arranger” means Green Ivy Capital, LLC, as lead arranger.
“Assignment and Acceptance” means an assignment and acceptance substantially in the form of Exhibit A.
“Assignment of Leases and Rents” means each assignment of leases and rents or other security document granted by any applicable Obligor to Administrative Agent for the benefit of the Secured Creditors in respect of any leases of Real Property owned or leased by such Obligor, in such form as agreed between such Obligor and Administrative Agent.
“Attributable Indebtedness” means, on any date, in respect of any Capitalized Lease of any Person, the capitalized amount thereof that would appear as a liability on a balance sheet of such Person prepared as of such date in accordance with GAAP.
“Authorized Officer” means, with respect to any Obligor, the president, the chief financial officer, the chief operating officer, the secretary, the treasurer, any other senior officer or any manager of such
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Obligor, but, in any event, with respect to financial matters, the chief financial officer of such Obligor, such other senior officer or manager who is in charge of financial matters for such Obligor.
“Bankruptcy Code” means the United States Bankruptcy Code (11 U.S.C. Section 101 et seq.).
“Beneficial Ownership Certification” means a certification regarding beneficial ownership or control as required by the Beneficial Ownership Regulation.
“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.
“Benefited Lender” shall have the meaning set forth in Section 12.08(a).
“Board” means the Board of Governors of the Federal Reserve System of the United States (or any successor).
“Board of Directors” means the board of directors, board of managers or other equivalent governing body of a Person.
“Borrower” and “Borrowers” shall have the meanings set forth in the Preamble.
“Borrower Representative” means Parent.
“Budget” shall have the meaning set forth in Section 8.01(f).
“Business Day” means any day excluding Saturday, Sunday and any day that shall be in the City of Chicago, Illinois a legal holiday or a day on which banking institutions are authorized by law or other governmental actions to close.
“Cannabis Business” means (a) the business of acquiring, cultivating, manufacturing, extracting, testing, producing, processing, possessing, selling (at retail or wholesale), dispensing, donating, distributing, transporting, packaging, labeling, marketing or disposing of cannabis, marijuana or related substances or products containing or relating to the same, and all ancillary activities related to the foregoing, including leasing the Real Property on which any such activity is conducted and (b) the business of managing or supporting the business described in clause (a) above, and all ancillary or complimentary activities related to the foregoing, including owning the Real Property on which any such activity is conducted.
“Cannabis License” means all permits, licenses, registrations, variances, land-use rights, clearances, consents, commissions, franchises, exemptions, orders, authorizations, and approvals from Regulatory Authorities authorizing the recipient to conduct business in accordance with the U.S. State Cannabis Law of each applicable jurisdiction, including specifically applicable licenses required by the state of Missouri in accordance with Applicable Law.
“Capital Expenditures” means, for any specified period, the sum of, without duplication, all expenditures made, directly or indirectly, by the Consolidated Companies during such period, determined on a consolidated basis in accordance with GAAP, that are or should be reflected as additions to property, plant or equipment or similar items reflected in the consolidated statement of cash flows and balance sheet of the Consolidated Companies, or have a useful life of more than one year.
“Capital Stock” means any and all shares, interests, participations, units or other equivalents (however designated) of capital stock of a corporation, membership interests in a limited liability company, partnership interests of a limited partnership, any and all equivalent ownership interests in a Person and any and all warrants, rights or options to purchase any of the foregoing.
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“Capitalized Lease Obligations” means, as applied to any Person, all obligations under Capitalized Leases of such Person or any of its Subsidiaries, in each case taken at the amount thereof accounted for as liabilities on the balance sheet (excluding the footnotes thereto) of such Person in accordance with GAAP.
“Capitalized Leases” means, as applied to any Person, all leases of property that have been or should be, in accordance with GAAP, recorded as capitalized leases on the balance sheet of such Person or any of its Subsidiaries, on a consolidated basis; provided that for all purposes hereunder the amount of obligations under any Capitalized Lease shall be the amount thereof accounted for as a liability on the balance sheet (excluding the footnotes thereto) of such Person in accordance with GAAP.
“Cash Equivalents” means:
| (f) | mutual funds investing primarily in assets described in clauses (a) through (d) of |
this definition.
“Cash Interest Rate” means a per annum rate equal to 11.00%.
“Casualty Event” means the damage, destruction or condemnation, as the case may be, of property of any Person or any of its Subsidiaries.
“CERCLA” means the Comprehensive Environmental Response, Compensation and Liability Act of 1980.
“Change in Cannabis Law” means any change after the Closing Date in U.S. Federal Cannabis Law or U.S. State Cannabis Law, or the application or interpretation thereof by any Governmental Authority,
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(a) that would make it unlawful for Administrative Agent or any Lender to (i) continue to be a party to any Loan Document, (ii) perform any of its obligations hereunder or under any other Loan Document, or (iii) to fund or maintain the Loans, (b) pursuant to which any Governmental Authority has enjoined any Administrative Agent or any Lender from (i) continuing to be a party to any Loan Document, (ii) performing any of its obligations hereunder or under any other Loan Document, or (iii) funding or maintaining the Loans, (c) pursuant to which any Governmental Authority requires (i) confidential information from or disclosure of confidential information about Administrative Agent, any Lender, any Affiliate thereof or any investor therein, or (ii) Administrative Agent or any Lender to obtain any material Permit to, in each case,
(A) continue to be a party to any Loan Document, (B) perform any of its obligations hereunder or under any other Loan Document, or (C) to fund or maintain the Loans or (d) result in the business activities conducted by any Obligor being, or being deemed, Restricted Cannabis Activities.
“Change in Law” means (a) the adoption of any law, rule, regulation or treaty after the date of this Agreement, (b) any change in any law, rule, regulation or treaty or in the interpretation, implementation or application thereof by any Governmental Authority after the date of this Agreement or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority after the date of this Agreement; provided that notwithstanding anything herein to the contrary, (x) the Dodd Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives issued thereunder or in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the day enacted, adopted, issued or implemented.
“Change of Control” means an event or series of events by which (a) John M. Pennington and Craig
M. Parker, collectively, shall cease to own, beneficially and of record, at least 25.00% of the issued and outstanding Capital Stock of Parent; (b) John M. Pennington and Craig M. Parker shall cease to control Parent or its Voting Shares; or (c) any Borrower shall cease to own and control, directly or indirectly, 100.00% of the Capital Stock of each of its Subsidiaries free and clear of all Liens or other encumbrances (other than the Liens of Administrative Agent).
“Chicago Atlantic” shall have the meaning set forth in the Preamble.
“Claims” shall have the meaning set forth in the definition of Environmental Claims.
“Closing Date” means May 9, 2022.
“Code” means the Internal Revenue Code of 1986, and the Treasury Regulations promulgated and rulings issued thereunder.
“Collateral” means any assets of any Obligor or other assets upon which Administrative Agent has been, or has purportedly been, granted a Lien in connection with this Agreement or any other Loan Document.
“Collateral Access Agreements” means a collateral access agreement or landlord waiver in form and substance reasonably satisfactory to Administrative Agent between Administrative Agent and any lessor, warehouseman, processor, bailee, consignee, or other Person in possession of, having a Lien upon, or having rights or interests in, any Obligor’s books and records or assets.
“Collateral Assignee” shall have the meaning set forth in Section 12.06(d).
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“Collateral Assignment of Lease” means each Collateral Assignment of Lease granted by any applicable Obligor to Administrative Agent for the benefit of the Secured Creditors in respect of any Real Property leased by such Obligor, in such form as agreed between such Obligor and Administrative Agent.
“Collateral Assignments of Management Services Contracts” means, collectively, those certain Collateral Assignments of Management Services Contracts among the applicable Obligor, the other parties party thereto and Administrative Agent, in form and substance reasonably satisfactory to Administrative Agent.
“Collections” means all cash, checks, credit card slips or receipts, notes, instruments, and other items of payment (including insurance proceeds, proceeds of cash sales, rental proceeds, and tax refunds) of the Obligors.
“Commitment” means the obligation of each Lender to make the Loans hereunder, in each case in the Dollar amounts set forth beside such Lender’s name under the applicable heading on Schedule 1.01 or in the Assignment and Acceptance pursuant to which such Lender became a Lender under this Agreement, as such amounts may be changed from time to time pursuant to the terms of this Agreement.
“Commitment Percentage” means, as to any Lender, the Commitment Percentage (if any) set forth beside such Lender’s name in Schedule 1.01 (or, in the case of any Lender that became party to this Agreement after the Closing Date pursuant to Section 12.06(b) or 12.06(c), the Commitment Percentage (if any) of such Lender as set forth in the applicable Assignment and Acceptance), as the same may be adjusted upon any assignment by or to such Lender pursuant to Section 12.06(b) or 12.06(c).
“Communications” means, collectively, any notice, demand, communication, information, document or other material that any Obligor provides to Administrative Agent pursuant to any Loan Document or the transactions contemplated therein which is distributed to Administrative Agent or any Lender by means of electronic communications pursuant to Section 12.23, including through the Platform.
“Compliance Certificate” means a certificate duly completed and executed by an Authorized Officer of Parent substantially in the form of Exhibit B, together with such changes thereto or departures therefrom as Administrative Agent may from time to time reasonably request or approve for the purpose of monitoring the Obligors’ compliance with the Financial Performance Covenants or certain other calculations, including the Consolidated Total Senior Debt Leverage Ratio, or as otherwise agreed to by Administrative Agent.
“Confidential Information” shall have the meaning set forth in Section 12.16.
“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes.
“Consolidated Companies” means Parent and its Subsidiaries on a consolidated basis in accordance with GAAP.
“Consolidated EBITDA” means, for a specified period, (a) the net income or loss of the Consolidated Companies, plus (b) to the extent deducted in determining net income for such period, the sum of, without duplication, (i) interest expense, (ii) income tax expense, (iii) depreciation and amortization expense, (iv) fees, costs and expenses paid in cash in connection with the closing of the Loan Documents,
(v) charges, costs, losses and expenses related to asset Dispositions permitted under this Agreement or discontinued operations, (vi) non-cash write-downs of assets, (vii) pre-opening costs and expenses in connection with the opening of any retail, cultivation or processing location, (viii) other extraordinary or non-recurring charges, costs and expenses, (ix) judgments and costs and expenses incurred in connection
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with such judgments and (x) non-cash compensation expense in respect of stock option plans or other equity compensation plans, minus (c) to the extent included in determining net income for such period, the sum of, without duplication, (i) any income or gains from asset Dispositions or discontinued operations, (ii) any extraordinary or non-recurring gains and (iii) non-cash write-ups of assets, in the case of each of the foregoing in clauses (a) through (c), for such period and as determined in accordance with GAAP consistently applied; provided that the aggregate amount of add-backs permitted pursuant to clauses (b)(v), (b)(vii), (b)(viii) and (b)(ix) shall not exceed $1,000,000 for any consecutive 12-month period.
“Consolidated Fixed Charge Coverage Ratio” means, with respect to the Consolidated Companies as of each applicable date of determination: (a) Consolidated EBITDA for the Applicable Fiscal Period, less the sum of (i) all unfinanced Capital Expenditures made in the Applicable Fiscal Period, plus (ii) all cash Taxes due and payable by the Consolidated Companies in the Applicable Fiscal Period (without benefit of any refund), divided by (b) the sum of (i) all cash distributions paid or scheduled to be paid, and other distributions made or scheduled to be made, by the Consolidated Companies during the Applicable Fiscal Period, plus (ii) the aggregate principal amount of the Indebtedness of the Consolidated Companies (including the principal or amortization component of any Attributable Indebtedness) that was paid or scheduled to be paid during the Applicable Fiscal Period plus (iii) the aggregate of amount of the interest payments of the Consolidated Companies (including the interest component of any payments in respect to Capitalized Lease Obligations) paid or scheduled to be paid during the Applicable Fiscal Period, all determined in accordance with GAAP consistently applied.
“Consolidated Total Senior Debt Leverage Ratio” means, the ratio of (a) the result of (i) the aggregate outstanding principal amount of the Loans plus (ii) the aggregate outstanding principal amount of all other Indebtedness of Borrowers and their Subsidiaries, on a consolidated basis, that is secured by a Lien on any assets or property of any Borrowers or any of their Subsidiaries as of such date (after giving effect to any incurrence or repayment of any such Indebtedness on such date) to (b) Consolidated EBITDA for the most recently ended Applicable Fiscal Period on or prior to such date for which financial statements have been delivered pursuant to Section 8.01(a) or Section 8.01(b).
“Contingent Liability” means, for any Person, any agreement, undertaking or arrangement by which such Person guarantees, endorses or otherwise becomes or is contingently liable upon (by direct or indirect agreement, contingent or otherwise, to provide funds for payment, to supply funds to, or otherwise to invest in, a debtor, or otherwise to assure a creditor against loss) the Indebtedness of any other Person (other than by endorsements of instruments in the course of collection), or guarantees the payment of dividends or other distributions upon the Capital Stock of any other Person. The amount of any Person’s obligation under any Contingent Liability shall (subject to any limitation set forth therein) be deemed to be the outstanding principal amount of the debt, obligation or other liability guaranteed thereby.
“Contractual Obligation” 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 other than the Obligations.
“Control Agreement” means a pledge, collateral assignment, control agreement or bank consent letter, in form and substance reasonably satisfactory to Administrative Agent, executed and delivered by the applicable Obligor, Administrative Agent, and the applicable securities intermediary or bank, which agreement is sufficient to give Administrative Agent “control” over each of such Obligor’s securities accounts, deposit accounts or investment property, as the case may be.
“Copyright Security Agreements” means any and all copyright security agreements entered into by the Obligors in favor of Administrative Agent (as required by the Agreement or any other Loan Document).
“Credit Agreement Joinder” means a joinder substantially in the form of Exhibit C.
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“Debtor Relief Laws” means the Bankruptcy Code and all other liquidation, bankruptcy, assignment for the benefit of creditors, conservatorship, moratorium, receivership, insolvency, rearrangement, reorganization, or similar debtor relief laws of the United States of America or other applicable jurisdictions in effect from time to time.
“Default” means any event, act or condition that with notice or lapse of time, or both, would constitute an Event of Default.
“Default Rate” means a rate per annum equal to the sum of (a) the Cash Interest Rate plus (b) 9.00%, plus (c) the PIK Interest Rate.
“Defaulting Lender” means any Lender that: (a) has failed, within two Business Days of the date required to be funded or paid, to (i) fund any portion of its Commitment, (ii) pay over to Administrative Agent or any Lender any other amount required to be paid by it hereunder, unless, in the case of clause (i) above, such Lender notifies Administrative Agent in writing that such failure is the result of such Lender’s good faith determination that a condition precedent to funding (specifically identified and including a particular Default or Event of Default, if any) has not been satisfied; (b) has notified Parent or Administrative Agent in writing, or has made a public statement to the effect, that it does not intend or expect to comply with any of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Lender’s good faith determination that a condition precedent (specifically identified and including a particular Default or Event of Default, if any) to funding a Loan under this Agreement cannot be satisfied) or generally under other agreements in which it commits to extend credit; (c) has failed, within two Business Days after request by Administrative Agent, acting in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations (and is financially able to meet such obligations) to fund prospective Loans under this Agreement, provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon Administrative Agent’s receipt of such certification in form and substance satisfactory to Administrative Agent or (d) has become the subject of an Insolvency Event.
“Designated Jurisdiction” means any country or territory to the extent that such country or territory is the subject of any Sanction.
“Disposition” means, with respect to any Person, any sale, transfer, lease, contribution or other conveyance (including by way of merger or amalgamation) of, or the granting of options, warrants or other rights to, any of such Person’s or their respective Subsidiaries’ assets (including Capital Stock of Subsidiaries) to any other Person in a single transaction or series of transactions.
“Disqualified Capital Stock” means any Capital Stock that, by its terms (or by the terms of any security or other Capital Stock into which it is convertible or for which it is exchangeable) or upon the happening of any event or condition, (a) matures or is mandatorily redeemable (other than solely for Qualified Capital Stock after the Secured Creditors are paid in full), pursuant to a sinking fund obligation or otherwise, (b) is redeemable at the option of the holder thereof (other than solely for Qualified Capital Stock or in connection with a Change of Control after the Secured Creditors are paid in full), in whole or in part, (c) provides for the scheduled payment of dividends in cash or (d) is or becomes convertible into or exchangeable for Indebtedness or any other Capital Stock that would constitute Disqualified Capital Stock, in each case, prior to the date that is 180 days after the Maturity Date; provided that if such Capital Stock is issued by Parent pursuant to a plan for the benefit of employees of Parent or its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Capital Stock solely because it may be required to be repurchased by Parent in order to satisfy applicable statutory or regulatory obligations.
“Dollars” and “$” means dollars in lawful currency of the United States.
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“Environmental Claims” means any and all administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigations (other than internal reports prepared by the Obligors (a) in the ordinary course of such Person’s business or (b) as required in connection with a financing transaction or an acquisition or disposition of real estate) or proceedings relating to any Environmental Law or any permit issued, or any approval given, under any such Environmental Law (collectively, “Claims”), including (i) any and all Claims by Governmental Authorities for enforcement, cleanup, removal, response, remedial or other actions or damages pursuant to any applicable Environmental Law and (ii) any and all Claims by any third party seeking damages, contribution, indemnification, cost recovery, compensation or injunctive relief resulting from the Release or threatened Release of Hazardous Materials or arising from alleged injury or threat of injury to health or safety (to the extent relating to the exposure to Hazardous Materials) or the environment.
“Environmental Law” means any applicable federal, state, provincial, foreign or local statute, law, rule, regulation, ordinance, code and rule of common law now or hereafter in effect, and any binding judicial or administrative interpretation thereof, including any binding judicial or administrative order, consent decree or judgment, relating to the protection of the environment or human health or, to the extent relating to exposure to Hazardous Materials, safety.
“Environmental Permit” shall have the meaning set forth in Section 7.14(a)(ii).
“ERISA” means the Employee Retirement Income Security Act of 1974, and the regulations promulgated thereunder.
“Event of Default” shall have the meaning set forth in Section 10.01.
“Excluded Accounts” means any deposit account that is used solely to fund payroll or employee benefits, so long as (a) such account is a zero balance account and (b) the applicable Obligor does not deposit or maintain funds in any such account in excess of amounts necessary to fund current payroll liabilities, payroll taxes or other wage and employee benefit payments, as applicable.
“Excluded Assets” means: (a) any asset to the extent pledges of and/or security interests therein are prohibited by Applicable Law or Cannabis Law, including as interpreted by any applicable Regulatory Authority, or would violate or invalidate any lease, license or other agreement or create a right of termination in favor of any other Person (other than any Loan Party, any wholly-owned or majority-owned Subsidiary, any Owner or any Affiliate of any of the foregoing) or which requires governmental (including regulatory) consent, approval, license or authorization to be pledged, to the extent such consent, approval, license or authorization has not been received (in each case, except to the extent, and only for as long as, such prohibition or impairment is not waived, terminated or rendered unenforceable or otherwise deemed ineffective after giving effect to applicable provisions of the UCC (or any successor provision or provisions), any Cannabis Law, any other Applicable Law (including any Debtor Relief Law) or any principle of equity); (b) any United States intent-to-use trademark applications to the extent that, and solely during the period in which, the grant of a security interest therein would impair the validity or enforceability of such intent-to-use trademark applications under applicable federal law, provided that upon submission to the U.S. Patent and Trademark Office of an amendment to allege use or a statement of use pursuant to 15 U.S.C. Section 1060(a) (or any successor provision), such intent-to-use trademark application shall automatically be considered Collateral without further action on any party’s part; and (c) any Cannabis License, except to the extent not prohibited by the applicable Regulatory Authorities and in full compliance with applicable Cannabis Law; provided, however, that in each case of clauses (a) through (c) above, (x) Excluded Assets shall not include proceeds arising or resulting from the sale of any Excluded Assets and
(y) any Excluded Assets that at any time do not satisfy the above criteria (whether as a result of the applicable Obligor or Owner obtaining any necessary consent, any change in any rule of law, statute or regulation, or otherwise) shall no longer constitute Excluded Assets for purposes hereof and shall
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automatically, subject to the requirements of any Governmental Authority, constitute a portion of the Collateral subject to the grant of security contained herein; and provided, further that the foregoing exclusions shall in no way be construed to limit, impair, or otherwise affect any of Administrative Agent’s or any Secured Creditor’s continuing security interests in and liens upon any rights or interests of any Obligor in or to (A) monies due or to become due under or in connection with any described contract, lease, permit, license, license agreement, Capital Stock or other asset (including any Accounts or Capital Stock), or (B) any proceeds from the sale, license, lease, or other dispositions of any such contract, lease, permit, license, license agreement, Capital Stock or other asset. For the purposes of this definition, “Account” means an account (as that term is defined in Article 9 of the UCC).
“Excluded Issuances” means (a) the issuance of Capital Stock (other than Disqualified Capital Stock) by Parent to members of the management, employees or directors of any Obligor and (b) the issuance of Capital Stock of Parent (other than Disqualified Capital Stock) upon the exercise of any warrants or options issued by Parent on or prior to the Closing Date.
“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, 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 Borrowers under Section 12.06) or
(ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 4.04, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office, (c) Taxes attributable to such Recipient’s failure to comply with Section 4.04(f) and (d) any U.S. federal withholding Taxes imposed under FATCA.
“Executive Order” shall have the meaning set forth in Section 7.28.
“Extraordinary Receipts” means any cash received by or paid to or for the account of Parent or any of Parent’s Subsidiaries not in the ordinary course of business, including: (a) proceeds of judgments, proceeds of settlements or other consideration of any kind in connection with any cause of action to the extent not used to pay any corresponding cause of action or to reimburse Parent or any of Parent’s Subsidiaries for amounts previously expended, (b) indemnification payments received by Parent or any of Parent’s Subsidiaries to the extent not used or anticipated to be used to pay any corresponding liability or reimburse Parent or such Subsidiary for the payment of any such liability, (c) any purchase price adjustment (other than a working capital adjustment) received in connection with any purchase agreements, (d) tax refunds, and (e) pension plan reversions, net of Taxes paid or payable with respect to such amounts.
“FATCA” 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 Treasury Regulations thereunder or official interpretations thereof, any agreements entered into pursuant to current Section 1471(b)(1) of the Code (or any amended or successor version described above), and any intergovernmental agreements (together with any Applicable Laws implementing such agreements) implementing the foregoing.
“Federal Funds Rate” means, for any period, a fluctuating per annum interest rate (rounded upwards, if necessary, to the nearest 1/100 of one percentage point) equal for each day during such period to the weighted average of the rates on overnight federal funds transactions with members of the Federal
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Reserve System, as published for such day (or, if such day is not a Business Day, for the immediately preceding Business Day) by the Federal Reserve Bank of New York, or if such rate is not so published for any day that is a Business Day, the average of the quotations for such day on such transactions received by Administrative Agent from three federal funds brokers of recognized standing selected by Administrative Agent.
“Financial Performance Covenant Cure Period” shall have the meaning set forth in Section 10.03.
“Financial Performance Covenant Equity Cure” shall have the meaning set forth in Section 10.03.
“Financial Performance Covenants” means the covenants set forth in Section 9.14.
“Foreign Lender” means a Lender that is resident or organized under the laws of a jurisdiction other than that in which a Borrower is resident for tax purposes.
“GAAP” means generally accepted accounting principles in the United States in effect from time
to time.
“Governmental Authority” means the government of the United States, any foreign country or any multinational or supranational authority, or any state, commonwealth, protectorate or political subdivision thereof, and any entity, body or authority exercising executive, legislative, taxing, judicial, regulatory or administrative functions of or pertaining to government, including the Pension Benefit Guaranty Corporation and other administrative bodies or quasi-governmental entities established to perform the functions of any such agency or authority.
“Guarantee Obligations” means, as to any Person, any Contingent Liability of such Person or other obligation of such Person guaranteeing or intended to guarantee any Indebtedness of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including any obligation of such Person, whether or not contingent, (a) to purchase any such Indebtedness or any property constituting direct or indirect security therefor, (b) to advance or supply funds (i) for the purchase or payment of any such Indebtedness or (ii) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (c) to purchase property, securities or services primarily for the purpose of assuring the owner of any such Indebtedness of the ability of the primary obligor to make payment of such Indebtedness or (d) otherwise to assure or hold harmless the owner of such Indebtedness against loss in respect thereof; provided that the term “Guarantee Obligations” shall not include endorsements of instruments for deposit or collection in the ordinary course of business and consistent with past practice (unless a departure from past practice coincides with an industry-wide departure from past practice or results from a new technological development or custom) or customary and reasonable indemnity obligations in effect on the Closing Date, entered into in connection with any acquisition or disposition of assets permitted under this Agreement (other than with respect to Indebtedness). The amount of any Guarantee Obligation shall be deemed to be an amount equal to the stated or determinable amount of the Indebtedness in respect of which such Guarantee Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith and reasonable business judgment.
“Guarantor Obligations” shall have the meaning set forth in Section 6.01(a).
“Guarantors” means (a) each Borrower (as to the other Obligors) and (b) any other Person (other than an Individual Guarantor) that provides a guarantee for the payment and performance of the Obligations pursuant to an agreement reasonably acceptable to Administrative Agent after the Closing Date pursuant to Section 8.09.
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“Hazardous Materials” means (a) any petroleum or petroleum products, radioactive materials, friable asbestos, urea formaldehyde foam insulation, transformers or other equipment that contain dielectric fluid containing regulated levels of polychlorinated biphenyls, and radon gas; (b) any chemicals, materials or substances defined as or included in the definition of “waste”, “recycled materials”, “sludge”, “hazardous substances”, “hazardous waste”, “hazardous materials”, “extremely hazardous waste”, “restricted hazardous waste”, “toxic substances”, “toxic pollutants”, “contaminants”, or “pollutants”, or words of similar import, under any applicable Environmental Law; and (c) any other chemical, waste, recycled material, material or substance, which is prohibited, limited or regulated by any Environmental Law; provided that cannabis and marijuana are explicitly excluded from the definition of Hazardous Materials, as are any substances or products that would be deemed Hazardous Materials solely because they contain cannabis or marijuana, in each case, to the extent such substances are deemed hazardous solely because the Cannabis Businesses are unlawful under U.S. Federal Cannabis Law.
“Hedging Agreement” 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, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.
“Increased Cost Lender” shall have the meaning set forth in Section 2.05(d).
“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 GAAP:
| (e) | all Attributable Indebtedness; |
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| (h) | all obligations of such Person under and sale-and-leaseback transaction; and |
| (i) | all Guarantee Obligations of such Person in respect of any of the foregoing; |
provided that Indebtedness shall not include (w) prepaid or deferred revenue arising in the ordinary course of business on customary terms, (x) purchase price holdbacks arising in the ordinary course of business and on customary terms in respect of a portion of the purchase price of an asset to satisfy warranties or other unperformed obligations of the seller of such asset, (y) endorsements of checks or drafts arising in the ordinary course of business and consistent with past practice (unless a departure from past practice coincides with an industry-wide departure from past practice or results from a new technological development or custom), and (z) preferred Capital Stock to the extent not constituting Disqualified Capital Stock.
For all purposes hereof, the Indebtedness of any Person shall not include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or another entity not disregarded for tax purposes) in which such Person is a general partner or a joint venture (whether partner or member), unless the terms of such Indebtedness provide that such Person is liable therefor. The amount of Indebtedness of any Person for purposes of clause (e) above shall be deemed to be equal to the lesser of
(x) the aggregate unpaid amount of such Indebtedness and (y) the fair market value of the property encumbered thereby as determined by such Person in good faith and reasonable business judgment.
“Indemnified Liabilities” shall have the meaning set forth in Section 12.05.
“Indemnified Taxes” 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 Obligor under any Loan Document and (b) to the extent not otherwise described in (a), Other Taxes.
“Individual Guarantors” means, collectively, John M. Pennington and Craig M. Parker.
“Information Certificates” means, collectively, (a) that certain Information Certificate dated as of the Closing Date and executed by Borrowers in favor of Administrative Agent and Lenders and (b) any other information or perfection certificate delivered by an Obligor to Administrative Agent and accepted by Administrative Agent.
“Insolvency Event” means, with respect to any Person, including any Lender, such Person or such Person’s direct or indirect parent company (a) becomes the subject of a bankruptcy, insolvency or examinership proceeding (including any proceeding under the Bankruptcy Code), or regulatory restrictions,
(b) has had a receiver, examiner, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business appointed for it or has called a meeting of its creditors, (c) admits in writing its inability, or be generally unable, to pay its debts as they become due or cease material operations of its present business, (d) with respect to a Lender, such Lender is unable to perform hereunder due to the application of Applicable Law, or (e) in the good faith determination of Administrative Agent, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment of a type described in clauses (a)
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or (b), provided that an Insolvency Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person or such Person’s direct or indirect parent company by a Governmental Authority or instrumentality thereof if, and only if, such ownership interest does not result in or provide such Person with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Person (or such Governmental Authority or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person.
“Intercompany Indebtedness” shall have the meaning set forth in Section 12.22.
“Investment” means, relative to any Person: (a) any loan, advance or extension of credit made by such Person to any other Person, including the purchase by such first Person of any bonds, notes, debentures or other debt securities of any such other Person; (b) the incurrence of Contingent Liabilities for the benefit of any other Person; (c) the purchase or acquisition of all or substantially all of the assets of such Person (or of a division or line of business of such Person); (d) the purchase or acquisition of any Capital Stock or other investment held by such Person in any other Person; and (e) any contribution made by such Person to any other Person. The amount of any Investment at any time shall be the original principal or capital amount thereof less all returns of principal or equity thereon made on or before such time and shall, if made by the transfer or exchange of property other than cash, be deemed to have been made in an original principal or capital amount equal to the fair market value of such property at the time of such Investment.
“IP Rights” shall have the meaning set forth in Section 7.13.
“Lender” and “Lenders” shall have the meanings set forth in the Preamble.
“Lien” means any mortgage, pledge, security interest, hypothecation, charge, claim, assignment for collateral purposes, lien (statutory or other) or similar encumbrance, and any easement, right-of-way, license, restriction (including zoning restrictions), defect, exception or irregularity in title or similar charge or encumbrance (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement or any lease in the nature thereof); provided that in no event shall an operating lease entered into in the ordinary course of business and on customary terms or any precautionary UCC filings made pursuant thereto by an applicable lessor or lessee, be deemed to be a Lien.
“Loan Documents” means (a) this Agreement, the Security Documents, any Notes, the Validity Guaranty, each Information Certificate, each Collateral Assignment of Management Services Contracts, any subordination or intercreditor agreements in favor of Administrative Agent with respect to this Agreement and (b) any other document or agreement executed by any Obligor or any Individual Guarantor, or by any Borrower on behalf of the Obligors or the Individual Guarantors, or any of them, and delivered to Administrative Agent or Lender in connection with any of the foregoing or the Obligations.
“Loans” means, collectively, the amounts advanced by Lenders to Borrowers pursuant to Section 2.01, plus the aggregate amount of interest at the PIK Interest Rate added to such amounts pursuant to Section 2.04(b).
“Make-Whole Amount” means, with respect to any prepayment of the Loans or repayment in connection with an acceleration of the Loans prior to the Maturity Date, if such prepayment or repayment occurs on or prior to November 30, 2023, an amount equal to the sum of all payments of interest on the Loans that would be due after the date of such prepayment or repayment prior to November 30, 2023, if no repayment of such Loans was made prior to November 30, 2023.
“Managed Entity” means any Person engaged in a Cannabis Business, in each case, that enters into a Management Services Contract with an Obligor with respect to any Cannabis Business.
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“Management Services Contract” means a management services agreement or other similar agreement between an Obligor, on the one hand, and a Managed Entity, on the other hand.
“Material Adverse Effect” means a material adverse effect on (a) the business, assets, liabilities (actual or contingent), operations, condition (financial or otherwise), results of operations or performance of the Obligors taken as a whole, (b) the validity or enforceability of this Agreement or any other Loan Document, (c) the ability of any Obligor to perform its obligations under any Loan Document to which it is a party, (d) the rights or remedies of the Secured Creditors or the Lenders hereunder or thereunder, (e) the priority of any Liens granted to Administrative Agent in or to any Collateral (other than as a result of voluntary and intentional discharge of the Lien by Administrative Agent) or (f) the Regulatory Licenses.
“Material Contracts” means (a) any agreement evidencing, securing or pertaining to any Indebtedness, or any guaranty thereof, in a principal amount exceeding $100,000, (b) any real property lease where annual rent exceeds $100,000, (c) any operating lease where annual rentals exceed $100,000,
(d) any agreement (other than the agreements set forth in the foregoing clauses (a) through (c)) which involves aggregate consideration payable to or by such Person or such Subsidiary of $100,000 or more on an annual basis, (e) any other agreement the termination of which (without contemporaneous replacement of substantially equivalent value) could reasonably be expected to have a Material Adverse Effect, (f) each Regulatory License and (g) each other Regulatory License.
“Maturity Date” means May 30, 2025.
“Missouri Department of Health” means the Missouri Department of Health and Senior Services.
“Missouri Medical Use Laws” means Article XIV of the Missouri Constitution, Missouri Code of State Regulations §§ 19 CSR 30-95.010, et. seq., as amended from time-to-time, the Missouri Revised Statutes §§ 195.805, 195.815, and all laws and regulations promulgated thereunder, in each case, as amended, modified or replaced.
“Moody’s” means Moody’s Investors Service, Inc. or any successor by merger or consolidation to its business.
“Mortgage” means each mortgage, deed of trust, or deed to secure debt, trust deed or other security document granted by any applicable Obligor to Administrative Agent for the benefit of the Secured Creditors in respect of any Real Property owned or leased by such Obligor, in such form as agreed between such Obligor and Administrative Agent.
“Mortgaged Real Property” means any Real Property subject to a Mortgage.
“Net Cash Proceeds” means, as applicable, (a) with respect to any Disposition by a Person, cash and cash equivalent proceeds received by or for such Person’s account, net of (i) fees, costs and expenses paid to third parties (other than Affiliates) and relating to such Disposition, (ii) the amount of any Indebtedness secured by any Permitted Lien on any asset (other than Indebtedness assumed by the purchaser of such asset) that is required to be, and is, repaid in connection with such Disposition, (iii) net income taxes to be paid in connection with such Disposition and (iv) sale, use or other transactional taxes paid or payable by such Person as a result of such Disposition, (b) with respect to any condemnation or taking of such assets by eminent domain proceedings of a Person, cash and cash equivalent proceeds received by or for such Person’s account (whether as a result of payments made under any applicable insurance policy therefor or in connection with condemnation proceedings or otherwise), net of (i) fees, costs and expenses paid to third parties (other than Affiliates) in connection with the collection of such proceeds, awards or other payments and (ii) taxes paid or payable by such Person as a result of such casualty, condemnation or taking, and (c) with respect to any offering of Capital Stock of a Person or the issuance of any Indebtedness
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by a Person, cash and cash equivalent proceeds received by or for such Person’s account, net of (i) legal, underwriting, and other fees, costs and expenses paid to third parties (other than Affiliates) and incurred as a result thereof, (ii) transfer taxes paid by such Person or such Subsidiary in connection therewith and (iii) net income taxes to be paid in connection therewith.
“New Growth Horizon” shall have the meaning set forth in the Preamble.
“NGH Investments” shall have the meaning set forth in the Preamble.
“Non-Defaulting Lender” means, at any time, any Lender holding a Commitment which is not a Defaulting Lender.
“Note” means a promissory note (or amended and restated promissory note) substantially in the form of Exhibit D.
“Notice of Control” shall have the meaning set forth in Section 8.13(b).
“Obligations” means (a) with respect to each Borrower, all obligations (monetary or otherwise, whether absolute or contingent, matured or unmatured) of such Borrower arising under or in connection with any Loan Document, including all original issue discount, fees, costs, expenses (including fees, costs and expenses incurred during the pendency of any proceeding of the type described in Section 10.01(h), whether or not allowed or allowable in such proceeding) and premiums payable under any Loan Document, the principal of and interest (including interest accruing during the pendency of any proceeding of the type described in Section 10.01(h), whether or not allowed or allowable in such proceeding) on the Loans, all indemnification obligations and all obligations to pay or reimburse any Secured Creditor for paying any costs or expenses under any Loan Document, and all other fees to be paid to Administrative Agent or Arranger, or (b) with respect to each Obligor other than Borrowers, each Obligor and each Individual Guarantor, all obligations (monetary or otherwise, whether absolute or contingent, matured or unmatured) of such Obligor or such Individual Guarantor arising under or in connection with any Loan Document, all indemnification obligations and all obligations to pay or reimburse any Secured Creditor for paying any costs or expenses under any Loan Document.
“Obligor Materials” shall have the meaning set forth in Section 12.23.
“Obligor” means each Borrower, each Guarantor and each other Person that is at any time liable for the payment of the whole or any part of the Obligations or that has granted in favor of Administrative Agent a Lien upon any of any of such Person’s assets to secure payment of any of the Obligations.
“OFAC” means the Office of Foreign Assets Control of the United States Department of the Treasury.
“OID” shall have the meaning set forth in Section 12.24.
“Organization Documents” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non- U.S. jurisdiction); (b) with respect to any limited liability company, the certificate, constitution or articles of formation or organization and operating agreement (if relevant); and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and, if applicable, any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization 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.
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“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 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 12.06).
“Owner” means John M. Pennington, Craig M. Parker and Matthew D. Labrier. “Parent” shall have the meaning set forth in the Preamble.
“Participant” shall have the meaning set forth in Section 12.06(c).
“Participant Register” shall have the meaning set forth in Section 12.06(c)(ii).
“Patent Security Agreements” means any patent security agreements entered into by an Obligor in favor of Administrative Agent (as required by the Agreement or any other Loan Document), in each case, as the same may be amended, restated, supplemented or otherwise modified from time to time.
“Patriot Act” means the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)).
“Payment Date” means the last Business Day of each calendar month.
“Permits” means, with respect to any Person, any permit, approval, authorization, license, registration, certificate, concession, grant, franchise, variance or permission from, and any other Contractual Obligations with, any Governmental Authority, in each case whether or not having the force of law and applicable to or binding upon such Person or any of its property or operations or to which such Person or any of its property or operations is subject.
“Permitted Acquisition” means any other acquisition of Equity Interests or assets by any Borrower in a transaction or series of transactions, in each case of clauses (x) and (y), that satisfies each of the following requirements:
| (b) | such acquisition is not a hostile or contested acquisition; |
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| (h) | such acquisition would not reasonably be expected to cause a Material Adverse |
Effect;
| (i) | all transactions related to such acquisition shall be consummated in accordance |
with applicable law;
“Permitted Capital Lease Debt” means Indebtedness incurred under Section 9.01(d) in an aggregate outstanding principal amount not to exceed $100,000 at any time.
“Permitted Liens” shall have the meaning set forth in Section 9.02.
“Person” means any individual, partnership, joint venture, firm, corporation, limited liability company, association, trust or other enterprise or any Governmental Authority.
“PIK Interest Rate” means the following percentages per annum, based upon the Consolidated Total Senior Debt Leverage Ratio as set forth in the most recent Compliance Certificate received by Administrative Agent pursuant to Section 8.01(c):
Pricing Tier | Consolidated Total Senior Debt Leverage Ratio | PIK Interest Rate |
1 | < 2.50:1 | 2.00% |
2 | > 2.50:1 | 3.00% |
Any increase or decrease in the PIK Interest Rate resulting from a change in the Consolidated Total Senior Debt Leverage Ratio shall become effective as of the first Business Day immediately following the date a Compliance Certificate is delivered pursuant to Section 8.01(c); provided, however, that if a Compliance Certificate is not delivered when due in accordance with such Section, then Pricing Tier 2 shall apply automatically as of the first Business Day after the date on which such Compliance Certificate was required to have been delivered and shall remain in effect until the first Business Day immediately following the date on which such Compliance Certificate is delivered in accordance with Section 8.01(c), whereupon the PIK Interest Rate shall be adjusted based upon the calculation of the Consolidated Total Senior Debt Leverage Ratio contained in such Compliance Certificate. The PIK Interest Rate in effect from the Closing Date through the first Business Day immediately following the date on which a Compliance Certificate is delivered pursuant to Section 8.01(c) for the fiscal month ending November 30, 2022, shall be determined
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based upon Pricing Tier 2. Notwithstanding anything to the contrary contained in this definition, (a) in the event Parent does not issue Capital Stock from which it receives, on or prior to the date six months after the Closing Date, Net Cash Proceeds of at least $4,000,000, the PIK Interest Rate shall be 3.00% per annum at all times and (b) the PIK Interest Rate shall be 3.00% per annum at all time when an Event of Default has occurred and is continuing.
“Platform” shall have the meaning set forth in Section 12.23.
“Price Road Property” means 1220 North Price Road, Olivette, Missouri 63132.
“Promotional Rights” shall have the meaning set forth in Section 12.16.
“Public Lender” shall have the meaning set forth in Section 12.23.
“Qualified Capital Stock” means any Capital Stock that is not Disqualified Capital Stock.
“Real Property” means, with respect to any Person, all right, title and interest of such Person (including any leasehold estate) in and to a parcel of real property owned, leased or operated by such Person together with, in each case, all improvements and appurtenant fixtures, equipment, personal property, easements and other property and rights incidental to the ownership, lease or operation thereof.
“Recipient” means (a) Administrative Agent and (b) any Lender.
“Register” shall have the meaning set forth in Section 12.06(b)(iii).
“Regulation D” means Regulation D of the Board as from time to time in effect and any successor to all or a portion thereof establishing reserve requirements.
“Regulation U” means Regulation U of the Board as from time to time in effect and any successor to all or a portion thereof establishing margin requirements.
“Regulation X” means Regulation X of the Board as from time to time in effect and any successor to all or a portion thereof establishing margin requirements.
“Regulatory Authority” means every Missouri political subdivision authorized by Article XIV of the Missouri Constitution, and all laws, regulation and guidance promulgated to regulate the growth, processing, testing, and sale of cannabis or medical marijuana in Missouri, including the Missouri Department of Health.
“Regulatory Licenses” means each Permit required to be held by any Consolidated Company or any Managed Entity, or that any Consolidated Company or Managed Entity must have rights to use, to conduct its Cannabis Business in compliance with Applicable Laws, including the Permits listed on Schedule 7.19.
“Related Parties” means, with respect to any specified Person, such Person’s Affiliates and the directors, officers, employees, agents, trustees, advisors of such Person and any Person that possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of such Person, whether through the ability to exercise voting power, by contract or otherwise.
“Release” means any spilling, leaking, seepage, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, depositing, disposing, emanating or migrating of Hazardous Materials in the environment.
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“Replacement Lender” shall have the meaning set forth in Section 2.05(d).
“Required Lenders” means, at any time when there is more than one Lender which is not a Defaulting Lender, at least two Lenders which are not Defaulting Lenders having a Total Credit Exposure representing greater than 50.00% of the sum of the aggregate Total Credit Exposure at such time, or at any time when there is only one Lender which is not a Defaulting Lender, such Lender.
“Rescindable Amount” shall have the meaning set forth in Section 2.03(f).
“Restricted Cannabis Activities” means, in connection with the cultivation, distribution, sale and possession of cannabis and related products: (a) any activity that is not permitted under applicable U.S. State Cannabis Laws; (b) notwithstanding compliance with applicable U.S. State Cannabis Laws, any activity which a Governmental Authority asserts is unlawful under U.S. Federal Cannabis Law and the applicable Person is enjoined from conducting such activity; (c) distribution and sale of cannabis and related products to minors that is not approved under a U.S. State Cannabis Law; (d) payments to any Person that any Obligor knows, or should have known, is a criminal enterprise, gang, cartel or Person subject to Sanctions or an individual that is a member of a criminal enterprise, gang, cartel or Person subject to Sanctions; (e) non-compliance with anti-terrorism laws and other Applicable Law relating to money- laundering; (f) diversion of cannabis and related products from states where it is legal under U.S. State Cannabis Law to other states; (g) use of activities permitted under U.S. State Cannabis Law as a cover or pretext for the trafficking of other controlled substances or illegal drugs or other illegal activity; (h) the commission, or making threats, of violence and the use of firearms in violation of Applicable Law; (i) growing cannabis and related products on public lands; and (j) directly or indirectly, aiding, abetting or otherwise participating in a common enterprise with any Person or Persons in any of the above-described activities.
“Restricted Debt” means (a) the Indebtedness of any Obligor existing on the Closing Date and listed on Schedule 7.24, and (b) any other Indebtedness the repayment of which is expressly subordinated and made junior to the payment in full of the Obligations and contains terms and conditions (including terms relating to interest, fees, repayment and subordination) satisfactory to Administrative Agent.
“Restricted Payment” means, with respect to any Person, (a) the declaration or payment of any dividend on, or the making of any payment or distribution on account of, or setting apart assets for a sinking or other analogous fund for the purchase, redemption, defeasance, retirement or other acquisition of, any class of Capital Stock of such Person or any warrants or options to purchase any such Capital Stock, whether now or hereafter outstanding, or the making of any other distribution in respect thereof, either directly or indirectly, whether in cash or property, and (b) any payment of a management fee (or other fee of a similar nature) or any reimbursable costs and expenses related thereto by such Person to any holder of its Capital Stock or any Affiliate thereof.
“Rock Hill Property” means 2609 Rock Hill Industrial Court, St. Louis, Missouri 63144.
“S&P” means Standard & Poor’s Ratings Services or any successor by merger or consolidation to its business.
“Sales Tracking Software” means any “seed-to-sale” tracking, point-of-sale, or other inventory or sales reporting software used by the Obligors.
“Sanctions” means all economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by OFAC or the
U.S. Department of State or (b) the United Nations Security Council, the European Union, any European Union member state or Her Majesty’s Treasury of the United Kingdom or other relevant sanctions authority.
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“SEC” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.
“Secured Creditors” means, collectively, (a) the Lenders, (b) Administrative Agent, (c) the beneficiaries of each indemnification obligation undertaken by any Obligor under the Loan Documents, (d) any successors, endorsees, transferees and assigns of each of the foregoing to the extent any such transfer or assign is permitted by the terms of this Agreement and (e) any other holder of any Obligation or Secured Obligation (as defined in any applicable Security Document).
“Security Agreement” means that certain Security Agreement dated as of the Closing Date, among each Obligor and Administrative Agent for the benefit of the Secured Creditors.
“Security Documents” means, collectively, as applicable, the Security Agreement, the Collateral Access Agreements, the Control Agreements, the Patent Security Agreements, the Trademark Security Agreements, the Copyright Security Agreements, each Collateral Assignment of Lease, each Collateral Assignment of Material Contracts, each Mortgage, each Assignment of Leases and Rents and each other instrument or document executed and delivered pursuant to this Agreement or any of the Security Documents to guarantee or secure any of the Obligations.
“Solvency Certificate” means a solvency certificate, duly executed and delivered by an Authorized Officer of Parent to Administrative Agent, in form and substance reasonably satisfactory to Administrative Agent.
“Solvent” means with respect to any Obligor, at any date, that (a) the sum of such Person’s debt (including Contingent Liabilities) does not exceed the present fair saleable value of such Person’s present assets (which, for this purpose, shall include rights of contribution in respect of obligations for which such Person has provided a guarantee), (b) such Person’s capital is not unreasonably small in relation to its business as contemplated on such date, (c) such Person has not incurred and does not intend to incur debts including current obligations beyond its ability to generally pay such debts as they become due (whether at maturity or otherwise), and (d) such Person is “solvent” or is not “insolvent”, as applicable, within the meaning given that term and similar terms under Applicable Laws relating to fraudulent and other avoidable transfers and conveyances. For purposes of this definition, the amount of any Contingent Liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability (irrespective of whether such contingent liabilities meet the criteria for accrual under Statement of Financial Accounting Standard No. 5).
“Subsequent Funding Dates” means the date of funding of each Loan, if any, that occurs after the Closing Date.
“Subsidiary” of any Person means and include (a) any corporation more than 50.00% of whose Voting Stock having by the terms thereof power to elect a majority of the directors of such corporation (irrespective of whether or not at the time stock of any class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time owned by such Person directly or indirectly through Subsidiaries and (b) any partnership, limited liability company, association, joint venture or other entity in which such Person directly or indirectly through one or more Subsidiaries has more than (i) a 50.00% equity interest measured by either vote or value at the time or (ii) a 50.00% general partnership interest at the time. Unless otherwise expressly provided, all references herein to a Subsidiary means a Subsidiary of Parent.
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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.
“Termination Date” means the date on which the Loans and the other Obligations (other than Unasserted Contingent Obligations) shall have been paid in full in cash in accordance with the terms of this Agreement.
“Total Credit Exposure” means, as of any date of determination (a) with respect to each Lender, (i) prior to the termination of the Commitments, the sum of such Lender’s Commitment plus the outstanding principal amount of such Lender’s Loans or (ii) upon the termination of the Commitments, the outstanding principal amount of such Lender’s Loans and (b) with respect to all Lenders, (i) prior to the termination of the Commitments, the sum of all of the Lenders’ Commitments plus the aggregate outstanding principal amount of all Loans and (ii) upon the termination of the Commitments, the aggregate outstanding principal amount of all Loans.
“Trademark Security Agreements” means the Trademark Security Agreements made in favor of Administrative Agent and the Lenders by each applicable Obligor and any trademark security agreement entered into after the Closing Date (as required by the Agreement or any other Loan Document), in each case, as the same may be amended, restated, supplemented or otherwise modified from time to time.
“Transactions” means (a) the execution, delivery and performance by each Obligor and each Individual Guarantor of each Loan Document to which it is a party, (b) the making of the Loans and (c) the use of the proceeds of the Loans.
“Treasury Regulations” means the United States Treasury regulations promulgated under the Code.
“U.S.” and “United States” means the United States of America.
“U.S. Federal Cannabis Law” means any federal laws of the United States, civil, criminal or otherwise, as such relate, either directly or indirectly, to the cultivation, harvesting, production, distribution, sale and possession of cannabis, marijuana or related substances or products containing or relating to the same, including the prohibition on drug trafficking under 21 U.S.C. § 841(a), et seq., the conspiracy statute under 18 U.S.C. § 846, the bar against aiding and abetting the conduct of an offense under 18 U.S.C. § 2, the bar against misprision of a felony (concealing another’s felonious conduct) under 18 U.S.C. § 4, the bar against being an accessory after the fact to criminal conduct under 18 U.S.C. § 3, and federal money laundering statutes under 18 U.S.C. §§ 1956, 1957, and 1960 and the regulations and rules promulgated under any of the foregoing.
“U.S. Person” means any person that is a “United States Person” as defined in Section 7701(a)(30) of the Code.
“U.S. State Cannabis Law” means the Missouri Medical Use Laws and any other law enacted by any state or locality of the United States that legalizes marijuana, cannabis and related products in some form that, by virtue of any Obligor or a Subsidiary of any Obligor procuring one or more licenses to operate a licensed cannabis facility in such state, is applicable to any Obligor, any Subsidiary of any of the foregoing, any Managed Entity or, solely with respect to the definition of Change in Cannabis Law, any Secured Creditor.
“U.S. Tax Compliance Certificate” has the meaning specified in Section 4.04(f)(ii)(B)(3).
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“UCC” means the Uniform Commercial Code as from time to time in effect in the state of Illinois and any other applicable jurisdiction.
“Unasserted Contingent Obligations” means, at any time, Obligations for taxes, costs, indemnifications, reimbursements, damages and other liabilities in respect of which no assertion of liability (whether oral or written) and no claim or demand for payment or indemnification (whether oral or written) has been made or threatened.
“Unrestricted Cash” means, for the Obligors, the result of (a) the aggregate amount of unrestricted cash that is held in a deposit account set forth on Schedule 7.25 and subject to a Control Agreement, other than those deposit accounts which are Excluded Accounts, minus (b) all un-processed outstanding checks written by Borrowers.
“Unused Line Fee” shall have the meaning set forth in Section 2.04(f).
“Validity Guaranty” means that certain Validity Guaranty dated as of the date hereof from the Individual Guarantors in favor of Administrative Agent, for the benefit of the Secured Parties.
“Voting Stock” means, with respect to any Person, shares of such Person’s Capital Stock having the right to vote for the election of directors (or Persons acting in a comparable capacity) of such Person under ordinary circumstances.
“Withholding Agent” means any Obligor and Administrative Agent.
SECTION 1.02 Other Interpretive Provisions. With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:
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SECTION 1.03 Accounting Terms and Principles. All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP, applied in a consistent manner. No change in the accounting principles used in the preparation of any financial statement hereafter adopted by Parent or any of Parent’s Subsidiaries shall be given effect for purposes of measuring compliance with any provision of Article IX, including Section 9.13, or otherwise in this Agreement unless Parent, Administrative Agent and Required Lenders agree in writing to modify such provisions to reflect such changes in GAAP and, unless such provisions are modified, all financial statements, Compliance Certificates and similar documents provided hereunder shall be provided together with a reconciliation between the calculations and amounts set forth therein before and after giving effect to such change in GAAP. Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to in Article IX shall be made, without giving effect to any election under Accounting Standards Codification 825-10 (or any other Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of any Obligor or any Subsidiary of any Obligor at “fair value”. A breach of a Financial Performance Covenant shall be deemed to have occurred as of any date of determination by Administrative Agent or Required Lenders as of the last day of any specified measurement period, regardless of when the financial statements reflecting such breach are delivered to Administrative Agent. Anything in this Agreement to the contrary notwithstanding, any obligation of a Person under a lease (whether existing as of the Closing Date or entered into after the Closing Date) that is not (or would not be) required to be classified and accounted for as a capital lease on the balance sheet of such Person under GAAP as in effect on the Closing Date shall not be treated as a Capitalized Lease Obligation solely as a result of (x) the adoption of any changes in, or (y) changes in the application of, GAAP after the Closing Date.
SECTION 1.04 Rounding. Any financial ratios required to be maintained or complied with by the Obligors pursuant to this Agreement (or required to be satisfied in order for a specific action to be permitted under this Agreement) shall be calculated by dividing the appropriate component by the other component,
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carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).
SECTION 1.05 References to Agreements, Laws, Etc. Unless otherwise expressly provided herein, (a) references to Organization Documents, agreements (including this Agreement and each of the other Loan Documents) and other Contractual Obligations shall be deemed to include all subsequent amendments, restatements, amendment and restatements, extensions, supplements, renewals and other modifications thereto, but only to the extent that such amendments, restatements, amendment and restatements, extensions, supplements, renewals and other modifications are permitted by the terms hereof and thereof; and (b) references to any Applicable Law shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing, implementing or interpreting such Applicable Law and any successor or replacement statutes and regulations.
SECTION 1.06 Times of Day. Unless otherwise specified, all references herein to times of day shall be references to the time in Chicago, Illinois.
SECTION 1.07 Timing of Payment of Performance. When the payment of any obligation or the performance of any covenant, duty or obligation is stated to be due or performance required on a day which is not a Business Day, the date of such payment or performance shall extend to the immediately succeeding Business Day. All payments required hereunder shall be paid in immediately available funds unless otherwise expressly provided herein.
SECTION 1.08 Corporate Terminology. Any reference to officers, shareholders, stock, shares, directors, boards of directors, corporate authority, articles of incorporation, bylaws or any other such references to matters relating to a corporation made herein or in any other Loan Document with respect to a Person that is not a corporation means and be references to the comparable terms used with respect to such Person.
ARTICLE II
Amount and Terms of Loans
SECTION 2.01 Loans.
| (i) | on the Closing Date, Loans in the aggregate amount of $23,000,000; |
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acknowledge and agree that any Loans disbursed pursuant to this Section 2.01(b) shall be made in the sole and absolute discretion of Administrative Agent and Lenders. No Lender shall have any obligation to make any Loan under this Section 2.01(b). This Section 2.01(b) shall not constitute a commitment on the part of Administrative Agent or any Lender to make any Loans under and pursuant to this Section 2.01(b). The Aggregate Commitment shall be deemed increased as of each date on which Loans are permitted to be made as provided in this Section 2.01(b) by the aggregate amount of the Loans made on such date, and the Commitment of each Lender shall be deemed increased as of such date by the amount of the Loan made by such Lender on such date. The minimum aggregate amount of the Loans requested under this Section 2.01(b) shall be $5,000,000.
Each Loan may be repaid or prepaid in accordance with the provisions hereof, but once repaid or prepaid may not be reborrowed. The Commitments shall be permanently reduced by the amount of each Loan made on the Closing Date and on each Subsequent Funding Date on which Loans are advanced pursuant to Section 2.01(a)(ii) or 2.01(b).
SECTION 2.02 Disbursement of Funds; Original Issue Discount.
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SECTION 2.03 Payment of Loans; Evidence of Debt.
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SECTION 2.04 Interest and Fees.
| (e) | All computations of interest hereunder shall be made in accordance with Section |
4.05.
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SECTION 2.05 Increased Costs, Illegality, Etc.
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SECTION 2.06 Multiple Borrowers.
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Collateral for the Obligations), arising from the existence or performance of this Agreement, until termination of this Agreement and repayment in full of the Obligations.
SECTION 2.07 Borrower Representative. Each Borrower, by its execution of this Agreement, irrevocably appoints Parent to act on its behalf as its agent in relation to the Loan Documents and irrevocably authorizes:
and in each case such Borrower shall be bound as though such Borrower itself had given the notices and instructions or executed or made the agreements or effected the amendments, supplements or variations, or received the relevant notice, demand or other communication.
Every act, omission, agreement, undertaking, settlement, waiver, amendment, supplement, variation, notice, instruction or other communication given or made by Parent or given to Parent under any Loan Document on behalf of another Borrower (whether or not known to any other Borrower and whether occurring before or after such other Borrower became a Borrower under any Loan Document) shall be binding for all purposes on such Borrower as if such Borrower had expressly agreed, executed, made, given or concurred with it or received the relevant notice, demand or other communication. In the event of any conflict between any notices or other communications of Parent and any other Borrower, those of Parent shall prevail.
SECTION 2.08 Defaulting Lender.
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parties hereto shall be modified to the extent of the express provisions of this Section 2.08 so long as such Lender is a Defaulting Lender.
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Nothing in this Section 2.08 shall limit any other remedies available at law or in equity to Borrowers against any Defaulting Lender for damages sustained by Borrowers due to such Lender being a Defaulting Lender.
ARTICLE III
Commitment Terminations
SECTION 3.01 Mandatory Reduction of Commitments. The Commitment shall be permanently reduced by the amount of each Loan made on the Closing Date and on each Subsequent Funding Date thereafter.
ARTICLE IV
Payments
SECTION 4.01 Voluntary Prepayments.
SECTION 4.02 Mandatory Prepayments.
| (a) | Types of Mandatory Prepayments. |
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| (iv) | fourth, ratably to pay interest due in respect of the outstanding Loans until |
paid in full,
| (vi) | sixth, to pay any other Obligations, and |
| (vii) | seventh, to Borrowers or such other Person entitled thereto under |
Applicable Law.
SECTION 4.03 Payment of Obligations; Method and Place of Payment.
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SECTION 4.04 Taxes.
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| (f) | Status of Lenders. |
| (ii) | Without limiting the generality of the foregoing, |
| (2) | executed copies of IRS Form W-8ECI; |
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documents from each beneficial owner, as applicable; provided that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate on behalf of each such direct and indirect partner;
Each Lender 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 Parent and Administrative Agent in writing of its legal inability to do so.
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SECTION 4.05 Computations of Interest and Fees. All interest and fees shall be computed on the basis of the actual number of days occurring during the period for which such interest or fee is payable over a year comprised of 360 days. Each determination by Administrative Agent of an interest rate and fees hereunder shall be presumptive evidence of the correctness of such rates and fees, absent manifest error. Payments due on a day that is not a Business Day shall (except as otherwise required by Administrative Agent) be made on the immediately preceding Business Day and such reduction of time shall not be included in computing interest and fees in connection with that payment but shall be included in computing interest and fees in connection with the immediately succeeding payment.
SECTION 4.06 Maximum Interest. In no event whatsoever shall interest and other charges charged hereunder exceed the highest rate permissible under applicable law. In the event interest and other charges as computed hereunder would otherwise exceed the highest rate permitted under applicable law:
(i) the interest rates hereunder will be reduced to the maximum rate permitted under applicable law; (ii) such excess amount shall be first applied to any unpaid principal balance owed by Borrowers; and (iii) if the then remaining excess amount is greater than the previously unpaid principal balance, the applicable Lender shall promptly refund such excess amount to Borrowers and the provisions hereof shall be deemed amended to provide for such permissible rate.
ARTICLE V
Conditions Precedent to Loans
SECTION 5.01 Closing Date Loan. The obligation of each Lender to make the Loans on the Closing Date as provided for hereunder is subject to the fulfillment, to the satisfaction of Administrative Agent and each Lender, of each of the following conditions precedent on or before the Closing Date, unless any such condition is waived in accordance with Section 12.01:
| (i) | this Agreement; |
| (ii) | the Notes; |
| (iii) | the Information Certificate; |
| (vi) | the other Security Documents; and |
| (vii) | each other Loan Document. |
| (b) | Collateral Matters. |
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Agent shall have received all original certificates, if any, representing such securities and such accompanying documents reasonably requested by Administrative Agent.
$50,000 that is evidenced by one or more promissory notes shall be subject to a security interest pursuant to the Security Documents, and Administrative Agent shall have received original executed versions of all such promissory notes and such accompanying documents reasonably requested by Administrative Agent.
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to each Obligor, each dated within a recent date prior to the Closing Date, such certificates to be issued by the appropriate officer of the jurisdictions where such Obligor is qualified to do business as a foreign entity, which certificate shall indicate that such Obligor is in good standing in such jurisdictions; and
which certificates shall provide that each Secured Creditor may conclusively rely thereon until it shall have received a further certificate of an Authorized Officer of the applicable Person canceling or amending the prior certificate of such Person as provided in Section 8.01(k).
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Administrative Agent shall have received copies of all documentation and instruments evidencing the discharge of all Indebtedness paid off in connection with the Transactions and the transactions contemplated by this Agreement, and (ii) all Liens (other than Permitted Liens) securing payment of any such Indebtedness shall have been released and Administrative Agent shall have received pay-off letters, all form UCC-3 termination statements, all releases or terminations of intellectual property security agreements and other instruments as may be reasonably requested by Administrative Agent in connection therewith.
| (n) | No Default, Representations and Warranties and No Injunctions. |
| (i) | No Default or Event of Default shall have occurred and be continuing. |
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| (vi) | an appraisal that is conducted by an appraiser reasonably acceptable to |
Administrative Agent.
SECTION 5.02 Loans Made after Closing Date. The obligation of each Lender to make the Loans on each Subsequent Funding Date as provided for hereunder is subject to the fulfillment, to the satisfaction of Administrative Agent and each Lender, of each of the following conditions precedent on or before such Subsequent Funding Date, unless any such condition is waived in accordance with Section 12.01:
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| (f) | No Default, Representations and Warranties and No Injunctions. |
| (i) | No Default or Event of Default shall have occurred and be continuing; |
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ARTICLE VI
Guarantee
SECTION 6.01 Guarantee.
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rendering the obligations of such Guarantor under this Agreement or any other Loan Document, as it relates to such Guarantor, subject to avoidance under Applicable Laws relating to fraudulent conveyance or fraudulent transfer (including the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act and Section 548 of the Bankruptcy Code or any applicable provisions of comparable Applicable Laws). Any analysis of the provisions of this Article VI for purposes of such Applicable Laws shall take into account the right of contribution established in Section 6.02 and, for purposes of such analysis, give effect to any discharge of intercompany debt as a result of any payment made under this Article VI.
SECTION 6.02 Right of Contribution. Each Guarantor hereby agrees that to the extent that a Guarantor shall have paid more than its proportionate share of any payment made hereunder, such Guarantor shall be entitled to seek and receive contribution from and against any other Guarantor hereunder which has not paid its proportionate share of such payment. Each Guarantor’s right of contribution shall be subject to the terms and conditions of Section 6.03. The provisions of this Section 6.02 shall in no respect limit the obligations and liabilities of any Guarantor to the Secured Creditors, and each Guarantor shall remain liable to the Secured Creditors for the full amount guaranteed by such Guarantor hereunder.
SECTION 6.03 No Subrogation. Notwithstanding any payment made by any Guarantor hereunder or any set-off or application of funds of any Guarantor by any Secured Creditor, no Guarantor shall be entitled to be subrogated to any of the rights of any Secured Creditor against any Borrower or any other Obligor or any collateral security or guarantee or right of offset held by any Secured Creditor for the payment of the Obligations, nor shall any Guarantor seek or be entitled to seek any contribution or reimbursement from any Borrower or any other Obligor in respect of payments made by such Guarantor under this guarantee, in each case, until after the Termination Date occurs. If any amount shall be paid to any Guarantor on account of such subrogation rights at any time on or prior to the Termination Date, such amount shall be held by such Guarantor for the benefit of Secured Creditors, segregated from other funds of such Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over to Administrative Agent in the exact form received by such Guarantor (duly indorsed by such Guarantor to Administrative Agent, if required), to be applied against the Obligations, whether matured or unmatured, as Administrative Agent may determine in accordance with Section 4.02(d).
SECTION 6.04 Modification of the Guarantor Obligations. Each Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights against any Guarantor and without notice to or further assent by any Guarantor, any demand for payment of any of the Guarantor Obligations made by any Secured Creditor may be rescinded by such Secured Creditor and any of the Guarantor Obligations
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continued, and the Guarantor Obligations, or the liability of any other Person upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered, subordinated or released by any Secured Creditor, and this Agreement and the other Loan Documents, and any other documents executed and delivered in connection therewith may be amended, amended and restated, supplemented or otherwise modified or terminated, in whole or in part, as Administrative Agent (or Required Lenders or all Lenders, as the case may be) may deem advisable from time to time, and any collateral security, guarantee or right of offset at any time held by any Secured Creditor for the payment of the Guarantor Obligations may be sold, exchanged, waived, surrendered, subordinated or released. No Secured Creditor shall have any obligation to protect, secure, perfect or insure any Lien at any time held by it as security for the Guarantor Obligations or for this Agreement or any other Loan Document or any property subject thereto.
SECTION 6.05 Guarantee Absolute and Unconditional. Each Guarantor waives to the fullest extent permitted by Applicable Law any and all notice of the creation, renewal, extension or accrual of any of the Obligations and notice of or proof of reliance by any Secured Creditor upon this Agreement or acceptance of the guarantee contained in this Article VI. The Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon this Article VI and all dealings between any Borrower or any other Obligor, on the one hand, and the Secured Creditors, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon this Article VI. Each Guarantor, to the fullest extent permitted by Applicable Law, waives diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon any Borrower or any other Obligor with respect to the Obligations. Each Guarantor waives, to the fullest extent permitted by law, any right such Guarantor may now have or hereafter acquire to revoke, rescind, terminate or limit (except as expressly provided herein) the guarantee set forth in this Article VI or any of its obligations hereunder. Each Guarantor understands and agrees, to the fullest extent permitted by Applicable Law, that the guarantee set forth in this Article VI shall be construed as a continuing, absolute and unconditional guarantee of payment without regard to (a) the validity, enforceability or avoidability of this Agreement or any other Loan Document, any of the Guarantor Obligations or any other collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by any Secured Creditor, (b) any defense, set-off or counterclaim (other than a defense of payment or performance) which may at any time be available to or be asserted by any Borrower or any other Person against any Secured Creditor, or (c) any other circumstance whatsoever (with or without notice to or knowledge of any Borrower or any Guarantor) which constitutes, or might be construed to constitute, an equitable or legal discharge of any Borrower with respect to any Obligations, of such Guarantor under this guarantee or of an Individual Guarantor under the Validity Guaranty, in each case, in bankruptcy or in any other instance. When making any demand hereunder or otherwise pursuing its rights and remedies hereunder against any Guarantor, any Secured Creditor may, but shall be under no obligation to, make a similar demand on or otherwise pursue such rights and remedies as it may have against any Borrower, any other Guarantor or any other Person or against any collateral security or guarantee for the Guarantor Obligations or any right of offset with respect thereto, and any failure by any Secured Creditor to make any such demand, to pursue such other rights or remedies or to collect any payments from any Borrower, any other Guarantor or any other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of any Borrower, any other Guarantor or any other Person or any such collateral security, guarantee or right of offset, shall not relieve any Guarantor of any obligation or liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of any Secured Creditor against any Guarantor. For the purposes hereof, “demand” shall include the commencement and continuance of any legal proceedings.
SECTION 6.06 Reinstatement. The guarantee set forth in this Article VI shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Guarantor Obligations is rescinded or must otherwise be restored or returned by any Secured Creditor,
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including upon the insolvency, bankruptcy, examinership, dissolution, liquidation or reorganization of any Borrower or any other Obligor, or upon or as a result of the appointment of a receiver, examiner, intervenor or conservator of, or trustee or similar officer for, any Borrower or any other Obligor or any substantial part of its property, or otherwise, all as though such payments had not been made.
SECTION 6.07 Payments. Each Guarantor hereby guarantees that payments hereunder will be paid to Administrative Agent, for the benefit of the Lenders, without set-off or counterclaim in Dollars in accordance with Section 4.03(c).
SECTION 6.08 Taxes.Each payment of the Guarantor Obligations will be made by each Guarantor subject to the same provisions as are set forth in Section 4.04.
ARTICLE VII
Representations, Warranties and Agreements
In order to induce the Lenders to enter into this Agreement and continue the Loans as provided for herein, the Obligors make the following representations and warranties to, and agreements with, the Lenders, all of which shall survive the execution and delivery of this Agreement and the making of the Loans, but subject to Section 13.01:
SECTION 7.01 Status. Each Obligor (a) is a duly organized or formed and validly existing limited liability company or other registered entity in good standing under the laws of the jurisdiction of its organization and has the corporate or other organizational power and authority to own its property and assets and to transact the business in which it is engaged and (b) has duly qualified and is authorized to do business and is in good standing in all jurisdictions where it does business or owns assets, except, in the case of this clause (b), where the failure to be so qualified could not reasonably be expected to result in a Material Adverse Effect.
SECTION 7.02 Power and Authority. Each Obligor has the corporate or other organizational power and authority to execute, deliver and carry out the terms and provisions of the Loan Documents to which it is a party and has taken all necessary corporate or other organizational action to authorize the execution, delivery and performance of the Loan Documents to which it is a party. Each Obligor has duly executed and delivered the Loan Documents to which it is a party and such Loan Documents constitute the legal, valid and binding obligation of such Obligor enforceable against each Obligor that is a party thereto in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, moratorium, examinership, reorganization and other similar laws relating to or affecting creditors’ rights generally and general principles of equity (whether considered in a proceeding in equity or law).
SECTION 7.03 No Violation. None of (a) the execution, delivery and performance by any Obligor of the Loan Documents to which it is a party and compliance with the terms and provisions thereof, (b) the consummation of the Transactions, or (c) the consummation of the other transactions contemplated hereby or thereby on the relevant dates therefor will (i) contravene any applicable provision of any material Applicable Law of any Governmental Authority, (ii) result in any breach of any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Lien upon any of the property or assets of any Obligor (other than Liens created under the Loan Documents) pursuant to, (A) the terms of any material indenture, loan agreement, lease agreement, mortgage or deed of trust, or (B) any other Material Contract of each Obligor, in the case of either of clauses (A) and (B), to which any Obligor is a party or by which it or any of its property or assets is bound, or (iii) violate any provision of the Organization Documents or Permit of any Obligor, except, with respect to any conflict, breach or contravention or default (but not creation of Liens) referred to in clause (ii), to the extent that such conflict, breach, contravention or default could not reasonably be expected to have a Material Adverse Effect.
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SECTION 7.04 Litigation, Labor Controversies, Etc. There is no pending or, to the knowledge of any Obligor, threatened in writing, litigation, action, proceeding or labor controversy (including strikes, lockouts or slowdowns against the Obligors or any of their respective Subsidiaries pending or, to the knowledge of any Obligor, threatened in writing) (a) which could reasonably be expected to have a Material Adverse Effect, (b) which purports to affect the legality, validity or enforceability of any Loan Document or the Transactions or (c) relating to any Indebtedness or purported Indebtedness of any Obligor or any Subsidiary. There is no outstanding judgment rendered by any court or tribunal against any Obligor or any Subsidiary.
SECTION 7.05 Use of Proceeds; Regulations U and X. The proceeds of the Loans are intended to be and shall be used solely for the purposes set forth in and permitted by Section 8.10. No Obligor is engaged in the business of extending credit for the purpose of purchasing or carrying margin stock, and no proceeds of the Loans will be used to purchase or carry margin stock or otherwise for a purpose which violates, or would be inconsistent with Regulation U or Regulation X.
SECTION 7.06 Approvals, Consents, Etc. No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority or other Person, and no consent or approval under any contract or instrument (other than (a) those that have been duly obtained or made and which are in full force and effect, or if not obtained or made, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect, (b) the filing of UCC financing statements and other equivalent filings for foreign jurisdictions, and (c) the filings or other actions necessary to perfect Liens under the Loan Documents) is required for the consummation of the Transactions or the due execution, delivery or performance by any Obligor of any Loan Document to which it is a party, or for the due execution, delivery or performance of the Loan Documents, in each case by any of the Obligors party thereto. There does not exist any judgment, order, injunction or other restraint issued or filed with respect to the transactions contemplated by the Loan Documents, the consummation of the Transactions, the making of the Loans or the performance by the Obligors or any of their respective Subsidiaries of their Obligations under the Loan Documents.
SECTION 7.07 Investment Company Act. No Obligor is, or will be after giving effect to the Transactions and the transactions contemplated under the Loan Documents, an “investment company” or a company “controlled” by a Person required to be registered as an “investment company”, within the meaning of the Investment Company Act of 1940.
SECTION 7.08 Accuracy of Information.
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events are not to be viewed as facts and that actual results during the period or periods covered by any such projections may differ from the projected results and such differences may be material.
SECTION 7.09 Financial Condition; Financial Statements. The tax returns and financial statements delivered to Administrative Agent present fairly in all material respects the financial position and results of operations of the Consolidated Companies at the respective dates of such information and for the respective periods covered thereby, subject in the case of unaudited financial information, to changes resulting from normal year-end audit adjustments and to the absence of footnotes. The tax returns, financial statements and all of the balance sheets, all statements of income and of cash flow and all other financial information furnished pursuant to Section 8.01 have been and will for all periods following the Closing Date be prepared in accordance with GAAP consistently applied. All of the financial information to be furnished pursuant to Section 8.01 will present fairly in all material respects the financial position and results of operations of the Consolidated Companies at the respective dates of such information and for the respective periods covered thereby, subject in the case of unaudited financial information, to changes resulting from normal year-end audit adjustments and to the absence of footnotes. None of the Obligors or any of their respective Subsidiaries has any Indebtedness or other material obligations or liabilities, direct or contingent that, either individually or in the aggregate, has had or could reasonably be expected to have, a Material Adverse Effect.
SECTION 7.10 Tax Returns and Payments. Each Obligor and its Subsidiaries has timely filed or caused to be timely filed all Tax returns and reports required to have been filed (and all such Tax returns are true, complete and correct in all material respects) and has paid or caused to be paid all Taxes required to have been paid by it prior to becoming delinquent, except Taxes (or any requirement to file Tax returns with respect thereto) that are being contested in good faith by appropriate proceedings and for which the Obligor or such Subsidiary, as applicable, has set aside on its books adequate reserves in accordance with GAAP. There are no proposed or pending tax assessments, deficiencies, audits or other proceedings with respect to any material amount of Taxes. None of the Obligors nor any of their Subsidiaries has ever “participated” in a “reportable transaction” within the meaning of Section 1.6011-4 of the Treasury Regulations. None of the Obligors nor any of their Subsidiaries is a party to any tax sharing or similar agreement. No Lien has been filed and no material claim is being asserted, with respect to any such Tax, fee, or other charge.
SECTION 7.11 Benefit Plans.
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SECTION 7.12 Subsidiaries. None of the Obligors has any Subsidiaries other than the Subsidiaries listed on Schedule 7.12. Schedule 7.12 describes the direct and indirect ownership interest of each of the Obligors in each Subsidiary.
SECTION 7.13 Intellectual Property; Licenses, Etc. Each Obligor and each of its Subsidiaries owns, or possesses the right to use, all of the trademarks, service marks, trade names, Internet domain names, copyrights and copyrightable works, patents, inventions, trade secrets, know-how, proprietary computer software, franchises, intellectual property licenses and other intellectual property rights, including all registrations and applications to register any of the foregoing and all rights to sue or recover at law or in equity for any past, present or future infringement, misappropriation, dilution, violation or other impairment thereof (collectively, the “IP Rights”) that are necessary for the operation of their respective businesses. The conduct and operations of the businesses of each Obligor and each of its Subsidiaries do not infringe, misappropriate, dilute, or otherwise violate in any material respect any intellectual property owned by any other Person, no other Person has challenged in writing or questioned any right, title or interest of any Obligor or any of its Subsidiaries in any IP Rights of such Obligor or Subsidiary, and no Obligor or Subsidiary thereof has received a written challenge from any other Person contesting the use of any IP Rights owned by such Obligor or Subsidiary or the validity or enforceability of such IP Rights. No claim or litigation regarding any of the foregoing is pending or, to the knowledge of such Obligor threatened in writing. Schedule 7.13 is a complete and accurate list of (i) all IP Rights registered or pending registration with the United States Copyright Office or the United States Patent and Trademark Office and owned by each Obligor and each of its Subsidiaries as of the Closing Date and (ii) all material license agreements or similar arrangements granting IP Rights of another Person to any Obligor or any of its Subsidiaries, other than software license agreement for “off-the-shelf” or “click-through” agreements. As of the Closing Date, none of the IP Rights owned by any Obligor or any of its Subsidiaries is subject to any licensing agreement, other than (i) non-exclusive licenses granted to customers in the ordinary business, or (ii) as set forth on Schedule 7.13.
SECTION 7.14 Environmental Warranties.
| (a) | Except as set forth in Schedule 7.14: |
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Real Property currently or formerly owned, leased or operated by any of the Obligors or their Subsidiaries or relating to the operations of the Obligors or their Subsidiaries, and, to the knowledge of the Obligors, there are no actions, activities, circumstances, conditions, events or incidents that are reasonably likely to form the basis of a material Environmental Claim.
SECTION 7.15 Ownership of Properties. Set forth on Schedule 7.15 is a list of all of the Real Property owned or leased by any of the Obligors as of the Closing Date, indicating in each case whether the respective property is owned or leased, the identity of the owner or lessor and the location of the respective property. Each Obligor owns (a) in the case of owned Real Property, good and valid fee simple title to such Real Property, (b) in the case of owned personal property, good and valid title to such personal property, and (c) in the case of leased Real Property or material leased personal property, valid and enforceable (except as may be limited by bankruptcy, insolvency, examinership, moratorium, fraudulent conveyance or other laws applicable to creditors’ rights generally and by generally applicable equitable principles, whether considered in an action at law or in equity) leasehold interests (as the case may be) in such leased property, in each case, free and clear in each case of all Liens or claims, except for Permitted Liens.
SECTION 7.16 No Default. None of the Obligors or any of their respective Subsidiaries (a) is in default or material breach under any Contractual Obligation under any of the Management Services Contracts or (b) is in default or material breach under or with respect to, or a party to, any other Contractual Obligation except, with respect to any default or material breach referred to in this clause (b), to the extent that such default or material breach could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. On the Closing Date, after giving effect to the Transactions, none of the Obligors or any of their respective Subsidiaries is in default under or with respect to (x) any Contractual
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Obligation in respect of Indebtedness or purported Indebtedness or (y) any of the Management Services Contracts.
SECTION 7.17 Solvency. On the Closing Date after giving effect to the Transactions and the other transactions related thereto, the Obligors are Solvent.
SECTION 7.18 Locations of Offices, Records and Collateral. The address of the principal place of business and chief executive office of each Obligor is, and the books and records of each Obligor and all of its Chattel Paper (as defined in the UCC) and records of Accounts (as defined in the UCC) are maintained exclusively in the possession of such Obligor at, the address of such Obligor specified in Schedule 7.18 (or, after the Closing Date, at such other address permitted by Section 4.3(a)(i) of the Security Agreement). Schedule 7.15 specifies all Real Property of each Obligor, and indicates whether each location specified therein is leased or owned by such Obligor. Except as otherwise agreed by Administrative Agent, each leased location of an Obligor that is the headquarters of any Obligor, where books and records of any Obligor are maintained or where Collateral having value in excess of $100,000 is located, shall be subject to a Collateral Access Agreement to be provided by the landlord of such leased location in favor of Administrative Agent.
SECTION 7.19 Compliance with Laws and Permits; Authorizations.
SECTION 7.20 No Material Adverse Effect. Since December 31, 2020, (a) there has been no Material Adverse Effect, and (b) there has been no circumstance, event or occurrence, and no fact is known to the Obligors that could reasonably be expected to result in a Material Adverse Effect.
SECTION 7.21 Contractual or Other Restrictions. Other than the Loan Documents, as set forth in Schedule 7.21 and to the extent permitted by Section 9.11, no Obligor or any of its Subsidiaries is a party to any agreement or arrangement or subject to any Applicable Law that limits its ability to pay dividends to, or otherwise make Investments in or other payments to any Obligor, that limits its ability to grant Liens in favor of Administrative Agent or that otherwise limits its ability to perform the terms of the Loan Documents.
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SECTION 7.22 Collective Bargaining Agreements. Set forth on Schedule 7.22 is a list of all collective bargaining or similar agreements between or applicable to any Obligor or any of its Subsidiaries and any union, labor organization or other bargaining agent in respect of the employees of any Obligor or any of its Subsidiaries.
SECTION 7.23 Insurance. The properties of each Obligor are insured as required by Section 8.03. As of the Closing Date, all premiums with respect thereto that are due and payable have been duly paid and no Obligor has received or has knowledge of any written notice of violation or cancellation thereof and each Obligor has complied in all material respects with the requirements of such policy.
SECTION 7.24 Evidence of Other Indebtedness. Schedule 7.24 is a complete and correct list of each credit agreement, loan agreement, indenture, purchase agreement, guarantee, letter of credit or other arrangement providing for or otherwise relating to any Indebtedness or any extension of credit (or commitment for any extension of credit) to, any Obligor or Subsidiary outstanding on the Closing Date which will remain outstanding after the Closing Date (other than this Agreement and the other Loan Documents), in each case, in excess of $50,000 and the aggregate principal or face amount outstanding or that may become outstanding under each such arrangement as of the Closing Date is correctly described in Schedule 7.24. The aggregate principal amount of all Indebtedness of (and all commitments for extensions of credit to) the Obligors and their Subsidiaries outstanding on the Closing Date which is not disclosed on Schedule 7.24 by reason of the disclosure threshold set forth in the immediately preceding sentence does not exceed $50,000.
SECTION 7.25 Deposit Accounts and Securities Accounts. Set forth in Schedule 7.25 is a list as of the Closing Date of all of the deposit accounts and securities accounts of each Obligor, including, with respect to each bank or securities intermediary at which such accounts are maintained by such Obligor (a) the name and location of such Person and (b) the account numbers of the deposit accounts or securities accounts maintained with such Person.
SECTION 7.26 Absence of any Undisclosed Liabilities. There are no material liabilities of any Obligor of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise, and there is no existing condition, situation or set of circumstances which could reasonably be expected to result in any such liabilities, other than those liabilities provided for or disclosed in the most recent financial statements delivered pursuant to Section 8.01.
SECTION 7.27 Material Contracts and Regulatory Matters.
SECTION 7.28 Anti-Terrorism Laws. No Obligor or any Subsidiary is in violation of any Law relating to terrorism or money laundering (collectively, “Anti-Terrorism Laws”), including the Patriot Act and Executive Order No. 13224 on Terrorism Financing, effective September 24, 2001 (the “Executive Order”). No Obligor, Subsidiary or agent acting or benefiting in any capacity in connection with the Loans is (a) a Person that is listed in the Annex to, or is otherwise subject to the provisions of, the Executive Order,
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SECTION 7.29 Transactions with Affiliates. Except (a) transactions for the sale of goods or services rendered in the ordinary course of business upon terms no less favorable to such Person than such Person could obtain in a comparable arms-length transaction with an unrelated third party, (b) the payment of customary compensation, employment, termination and other employee benefit arrangements paid to, and indemnities provided for the benefit of, directors, officers or employees of any Obligor or any Subsidiary in the ordinary course of business, and (c) transactions set forth on Schedule 7.29, there are no existing or proposed agreements, arrangements, understandings or transactions between any Obligor and any of the officers, members, managers, directors, stockholders, parents, holders of other Capital Stock, employees or Affiliates (other than Subsidiaries that are Obligors) of any Obligor.
SECTION 7.30 Rock Hill Property. (a) There are odors emanating from the Rock Hill Property that have been identified as a potential zoning violation by the relevant Governmental Authority, (b) the applicable zoning commission has established a dedicated hotline for odor complaints with respect to the applicable building on the Rock Hill Property and (c) if such odors are not adequately addressed and continue, the matter might be referred to the community prosecutor and might be heard in municipal court. Borrowers are using their best efforts to mitigate such odors and will continue taking reasonable steps to address any odor-related issues.
ARTICLE VIII
Affirmative Covenants
The Obligors hereby covenant and agree that on the Closing Date and thereafter, until the Loans, together with interest, fees and all other Obligations incurred hereunder (other than Unasserted Contingent Obligations) are paid in full in accordance with the terms of this Agreement, subject to Section 13.01:
SECTION 8.01 Financial Information, Reports, Notices and Information. The Obligors will furnish Administrative Agent and each Lender copies of the following financial statements, reports, notices and information:
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periods reported, including, in comparative form the figures for the corresponding fiscal month in, and year- to-date portion of, the immediately preceding fiscal year of Parent, and period commencing at the end of the previous fiscal year of Parent and ending with the end of such fiscal month.
(ii) showing compliance with the Financial Performance Covenants and the calculation of the Consolidated Total Senior Debt Leverage Ratio and stating that no Default or Event of Default has occurred and is continuing (or, if a Default or an Event of Default has occurred, specifying the details of such Default or Event of Default and the actions taken or to be taken with respect thereto) and containing the applicable certifications set forth in Section 7.09 with respect thereto, (iii) in the case of each Compliance Certificate delivered concurrently with the financial information pursuant to clause (b) above, specifying any change in the identity of the Subsidiaries as at the end of such fiscal year from the Subsidiaries provided to the Lenders on the Closing Date or the most recent fiscal year, as the case may be, and (iv) in the case of each Compliance Certificate delivered concurrently with the financial information pursuant to clause (b) above, including (A) updated Schedules 7.15 and 7.25 (if applicable) and (B) a written supplement substantially in the form of Schedules 1 through 3, as applicable, to the Security Agreement, in each case, with respect to any additional assets and property acquired by any Obligor after the date hereof, all in reasonable detail.
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| (xiii) | notice of receipt of any rejection or non-renewal of a Regulatory License; |
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SECTION 8.02 Books, Records and Inspections. The Obligors will, and will cause each of their respective Subsidiaries to, maintain proper books of record and account, in which entries that are full, true and correct in all material respects and are in conformity with GAAP (subject to normal year-end adjustments pursuant to the audit required under Section 8.01(b)) consistently applied shall be made of all material financial transactions and matters involving the assets and business of the Obligors or such Subsidiary, as the case may be. The Obligors will, and will cause each of their respective Subsidiaries to, permit Administrative Agent and its representatives and independent contractors 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 expense of the Obligors; provided that such visits or inspections shall be at reasonable times during normal business hours, upon reasonable advance notice to the Obligors, but not more often than two times per year (except that none of the limitations in this proviso shall apply if an Event of Default then exists). Any information obtained by Administrative Agent pursuant to this Section 8.02 may be shared with Administrative Agent or any Lender upon the request of such Secured Creditor. Administrative Agent shall give the Obligors the opportunity to participate in any discussions with the Obligors’ directors, officers and independent public accountants.
SECTION 8.03 Maintenance of Insurance. The Obligors will, and will cause each of their respective Subsidiaries to, at all times maintain in full force and effect, with insurance companies that the Obligors believe (in their reasonable business judgment) are financially sound and reputable at the time the relevant coverage is placed or renewed, insurance in at least such amounts and against at least such risks (and with such risk retentions) as are usually insured against in the same general area by companies engaged in businesses similar to those engaged in by the Obligors; and will furnish to Administrative Agent for further delivery to the Lenders, upon written request from Administrative Agent, information presented in reasonable detail as to the insurance so carried, including (i) endorsements to (A) all “All Risk” policies naming Administrative Agent, on behalf of the Secured Creditors, as lender loss payee and (B) all general liability and other liability policies naming Administrative Agent, on behalf of the Secured Creditors, as additional insured and (ii) legends providing that no cancellation, material reduction in amount or material change in insurance coverage thereof shall be effective until at least 30 days (10 days with respect to failure to pay premium) after receipt by Administrative Agent of written notice thereof.
SECTION 8.04 Payment of Taxes. The Obligors will timely pay and discharge, and will cause each of their respective Subsidiaries to timely pay and discharge, all Taxes, assessments and governmental charges or levies imposed upon them or upon their income or profits, or upon any properties belonging to it, prior to the date on which such Tax, assessment or governmental charge is delinquent, and all lawful claims that, if unpaid, could reasonably be expected to become a Lien having priority over Administrative Agent’s Liens (other than Permitted Liens) or an otherwise material Lien upon any properties of the Obligors or any of their respective Subsidiaries; provided that none of the Obligors or any of their respective Subsidiaries shall be required to pay any such Tax, assessment, charge, levy or claim that is being contested
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in good faith and by proper proceedings that stays execution and as to which such Obligor has maintained adequate reserves with respect thereto in accordance with GAAP.
SECTION 8.05 Maintenance of Existence; Compliance with Laws, Etc. Each Obligor will, and will cause its Subsidiaries to, (a) preserve and maintain in full force and effect its organizational existence (except in a transaction permitted by Section 9.03), (b) preserve and maintain its good standing under the laws of its state or jurisdiction of incorporation, organization or formation, and each state or other jurisdiction where such Person is qualified, or is required to be so qualified, to do business as a foreign entity, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect, and (c) comply in all material respects with all Applicable Laws, including compliance with safety regulations applicable to any Borrower or any of its Subsidiaries.
SECTION 8.06 Environmental Compliance.
(5) any written notice or other written communication received by any Obligor from any person or Governmental Authority relating to any material Environmental Claim against any Obligor or Subsidiary pursuant to any Environmental Law.
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SECTION 8.07 Maintenance of Properties. Each Obligor will, and will cause its Subsidiaries to, maintain, preserve, protect and keep its properties and assets in good repair, working order and condition (ordinary wear and tear excepted and subject to casualty, condemnation and dispositions permitted pursuant to Section 9.04), and make necessary repairs, renewals and replacements thereto and will maintain and renew as necessary all licenses, Permits (including the Regulatory Licenses) and other clearances necessary to use and occupy such properties and assets, in each case so that the business carried on by such Person may be properly conducted at all times, except where the failure to do so could not reasonably be expected to have a Material Adverse Effect.
SECTION 8.08 End of Fiscal Years; Fiscal Quarters. The Obligors will, for financial reporting purposes, cause (a) each of their, and each of their Subsidiaries’ fiscal years to end on December 31 of each year and (b) each of their, and each of their Subsidiaries’, fiscal quarters to end on dates consistent with such fiscal year-end and Borrowers’ past practice.
SECTION 8.09 Additional Obligors. Any Subsidiary that is not an Obligor on the Closing Date, and any direct or indirect Subsidiary formed or acquired after the Closing Date (including by division of any existing limited liability company pursuant to a “plan of division” under the Delaware Limited Liability Company Act), shall be subject to the following requirements:
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Organization Documents of such Subsidiary, resolutions of the board, other governing body thereof, or appropriate committees thereof (and, if required by such Organization Documents or applicable law, of the shareholders, members or partners) of such Person authorizing the actions and the execution and delivery of documents described in this Section 8.9, all certified by an Authorized Officer of such Subsidiary. In addition to the foregoing, the Obligors will promptly grant Administrative Agent a security interest, for the benefit of the Secured Creditors, (i) all the Capital Stock of each Subsidiary held by an Obligor; and (ii) any promissory notes executed after the Closing Date evidencing Indebtedness owing to any Obligor in an amount of $50,000 or more, individually or in the aggregate; provided, however, that no Obligor shall be required to grant a security interest in respect of any Excluded Asset; and
| (b) | the Obligors and each Subsidiary shall otherwise comply with Section 8.11. |
SECTION 8.10 Use of Proceeds. The proceeds of the Loans shall be used (a) on the Closing Date, to pay the transaction fees, costs and expenses incurred directly in connection with the Transactions and all Indebtedness of Obligors and their respective Subsidiaries (other than Indebtedness permitted under Section 9.01), (b) to acquire the Price Road Property and (c) for general working capital purposes, in each case, to the extent consistent with the terms of the Loan Documents and Applicable Law, in each case, to the extent consistent with the terms of the Loan Documents and Applicable Law.
SECTION 8.11 Further Assurances.
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hazard area, (iv) a zoning report and environmental site assessment reflecting such Real Property’s compliance with Applicable Law and (v) an opinion of local counsel to the applicable Obligor(s) in form and substance reasonably satisfactory to Administrative Agent.
SECTION 8.12 Collateral Access Agreements. The Obligors shall obtain a Collateral Access Agreement for each leased location to the extent required by any Security Agreement.
SECTION 8.13 Bank Accounts.
7.25 including such account; and (y) the Obligors have delivered to Administrative Agent a Control Agreement with respect to such account to the extent such account is not an Excluded Account.
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other Person or deposit such Collections in any account other than those accounts set forth on Schedule 7.25.
SECTION 8.14 Sanctions; Anti-Corruption Laws.
SECTION 8.15 Regulatory Matters. The Obligors shall ensure that all Regulatory Licenses remain in full force and effect in all material respects.
SECTION 8.16 Annual Lender Meeting. Borrowers will participate in a meeting of the Lenders as frequently as may be reasonably required by Administrative Agent or Required Lenders but at least once each year and no more than once each month unless an Event of Default has occurred and is continuing, to be held via teleconference or in person at a time selected by Administrative Agent and reasonably acceptable to the Lenders and Parent. The purpose of this meeting shall be to present the Obligors’ previous fiscal years’ financial results and to present the Budget for the current fiscal year.
SECTION 8.17 Lien Releases. The Obligors shall obtain a Lien release or subordination of Lien, in form and substance satisfactory to Administrative Agent, from each contractor, mechanic, materialman, laborer or other Person involved with the construction, build-out and equipping of any Real Property that also provided work, supplies or services, or has an Affiliate that provided work, supplies or services, on such Real Property prior to the date the Mortgage on such Real Property was recorded or, if such provision commenced prior to the date on which such Mortgage was recorded, concurrently with any payment to such Person, and, in each case, provide a copy thereof to Administrative Agent within three Business Days after receipt thereof.
SECTION 8.18 Management Services Contracts. The Obligors will (a) preserve and maintain in full force and effect each of the Management Services Contracts, (b) comply in all material respects with each of their respective rights, duties and obligations under each of the Management Services Contracts, in each case, so that the business carried on by the parties to such Management Services Contracts may be properly conducted in accordance with Applicable Law at all times and (c) cause any Person that becomes a Managed Entity to execute and deliver to Administrative Agent a Collateral Assignment of Management Services Contract with such Obligor.
SECTION 8.19 Excluded Assets. Notwithstanding anything to the contrary in any Loan Document, if the relevant Governmental Authority or Governmental Authorities issue written guidance or rulings, or otherwise announce publicly, that any Excluded Asset previously excluded due to any Cannabis Law or any other Applicable Law can be included in the Collateral without adverse consequences to the applicable Obligor, the applicable Owner or a similarly-situated Person, such Obligor shall, and shall cause
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the other Obligors and the Owners to, use best efforts to obtain any required written approvals or consents of any Governmental Authority in order that any such Excluded Asset no longer constitutes an Excluded Asset.
SECTION 8.20 Post-Closing Matters. On or before July 12, 2022 (or such later date to which Administrative Agent agrees in its discretion), the Obligors shall deliver the following to Administrative Agent, in form and substance satisfactory to Administrative Agent:
ARTICLE IX
Negative Covenants
The Obligors hereby covenant and agree that until the Loans, together with interest, fees and all other Obligations incurred hereunder (other than Unasserted Contingent Obligations) are paid in full in accordance with the terms of this Agreement, subject to Section 13.01:
SECTION 9.01 Limitation on Indebtedness. Each Obligor will not, and will not permit any of its Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee, suffer to exist or otherwise become directly or indirectly liable, contingently or otherwise with respect to any Indebtedness, except for:
| (a) | Indebtedness in respect of the Obligations; |
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| (l) | Indebtedness of any Obligor to the extent constituting an Investment permitted by |
Section 9.05(g);
SECTION 9.02 Limitation on Liens. Each Obligor will not, and will not permit any of its Subsidiaries to, directly or indirectly, create, incur, assume or suffer to exist any Lien upon any property or assets of any kind (real or personal, tangible or intangible) of any such Person (including its Capital Stock), whether now owned or hereafter acquired, except for the following (collectively, the “Permitted Liens”):
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| (a) | Liens securing payment of the Obligations; |
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8.13 have been complied with;
Notwithstanding anything to the contrary set forth in this Section 9.02, in no event shall any Obligor create, incur, assume or suffer to exist any Lien (other than Liens in favor of Administrative Agent pursuant to the Loan Documents) upon the rights of any Obligor or Subsidiary under any Material Contract or any accounts receivable, Collections or proceeds arising thereunder or with respect thereto.
SECTION 9.03 Consolidation, Merger, Etc. Each Obligor will not, and will not permit any of its Subsidiaries to, liquidate or dissolve, consolidate with, amalgamate with or into, or merge into or with, any other Person; provided that (a) any Obligor or Subsidiary of any Obligor may liquidate or dissolve voluntarily into, and may merge or amalgamate with and into, any Borrower (so long as such Borrower is the surviving entity), (b) any Guarantor may liquidate or dissolve voluntarily into, and may merge or amalgamate with and into any other Guarantor organized under the laws of the same jurisdiction, (c) the assets or Capital Stock of any Obligor (other than Parent) may be purchased or otherwise acquired by any Borrower, and (d) the assets or Capital Stock of any Guarantor may be purchased or otherwise acquired by any other Obligor.
SECTION 9.04 Permitted Dispositions. Each Obligor will not, and will not permit any of its Subsidiaries to, make a Disposition, or enter into any agreement to make a Disposition, of such Obligor’s or such other Person’s assets (including accounts receivable and Capital Stock of Subsidiaries) to any Person in one transaction or a series of related transactions unless such Disposition:
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| (c) | is for fair market value and the following conditions are met: |
| (i) | the aggregate amount of Dispositions during any fiscal year shall not |
exceed $100,000;
| (iii) | Borrowers apply any Net Cash Proceeds arising therefrom pursuant to |
Section 4.02(a)(ii); and
| (d) | is a sale of Inventory (as defined in the UCC) in the ordinary course of business; |
| (g) | is otherwise permitted by Section 9.03 or 9.05(d); |
| (i) | consists of the granting of Permitted Liens; |
| (j) | consists of a Disposition of cash or Cash Equivalents; |
| (n) | consists of the issuance of Capital Stock of Parent in connection with an Excluded |
Issuance;
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Notwithstanding anything to the contrary set forth in this Section 9.04, in no event shall any Obligor sell, transfer, assign or otherwise dispose of (other than in connection with the grant of a Lien in favor of Administrative Agent pursuant to the Loan Documents) any of its rights under or in respect of any Material Contract or any accounts receivable, Collections or proceeds arising thereunder or with respect thereto.
SECTION 9.05 Investments. Each Obligor will not, and will not permit any of its Subsidiaries to, purchase, make, incur, assume or permit to exist any Investment in any other Person, including the formation, creation or acquisition of any Subsidiary, except:
| (a) | Investments existing on the Closing Date and identified in Schedule 9.05; |
| (b) | Investments in cash and Cash Equivalents; |
9.01 in the event such Investment constitutes Indebtedness of the party making such Investment and (ii) Sections 8.09 and 8.11;
| (e) | Investments constituting (i) accounts receivable arising, (ii) trade debt granted, or |
(iii) deposits made in connection with the purchase price of goods or services, in each case in the ordinary course of business;
| (i) | Contingent Obligations to the extent permitted by Section 9.01(e); |
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| (n) | Permitted Acquisitions; |
provided that no Investment otherwise permitted under clauses (d)(ii), (f), (g) or (k) shall be permitted to be made if, at the time of making any such Investment, any Default or Event of Default has occurred and is continuing or would result therefrom.
SECTION 9.06 ERISA. No Obligor will (a) fail to meet the minimum funding requirements of ERISA, permit a Reportable Event or Prohibited Transaction, as each term is defined in ERISA, to occur or (b) withdraw or permit any Subsidiary to withdraw from participation in, permit partial or complete termination of, or permit the occurrence of any other event with respect to, any present pension, profit sharing and deferred compensation plan which could reasonably be expected to result in any liability of an Obligor or any of its Subsidiaries, including any liability to the Pension Benefit Guaranty Corporation or its successors or any other governmental agency.
SECTION 9.07 Restricted Payments. Each Obligor will not, and will not permit any of its Subsidiaries to, make any Restricted Payment, or make any deposit for any Restricted Payment, other than:
SECTION 9.08 Payments and Modification of Certain Agreements. Each Obligor will not, and will not permit any of its Subsidiaries to:
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unless such amendment, supplement, waiver or other modification is permitted under the terms of the subordination agreement applicable thereto, or (iii) any other Material Contract, in each case, other than any amendment, supplement, waiver or modification (A) that is not materially adverse to the Secured Creditors and (B) notice of which was received by Administrative Agent at least 10 Business Days (or such shorter period as Administrative Agent may permit in its discretion) prior to its effectiveness.
SECTION 9.09 Sale and Leaseback. Each Obligor will not, and will not permit any of its Subsidiaries to, directly or indirectly, engage in any sale-leaseback, synthetic lease or similar transaction after the Closing Date with respect to any property of any Obligor or any Subsidiary thereof.
SECTION 9.10 Transactions with Affiliates. Except as set forth on Schedule 7.30, each Obligor will not, and will not permit any of its Subsidiaries to, enter into or cause or permit to exist any arrangement, transaction or contract (including for the purchase, lease or exchange of property or the rendering of services) with any Affiliate (other than arrangements, transactions or contracts solely among the Obligors) except (a) on fair and reasonable terms no less favorable to such Obligor or such Subsidiary than it could obtain in an arm’s-length transaction with a Person that is not an Affiliate, (b) any transaction expressly permitted under Section 9.01(g), 9.03, 9.05(d), 9.05(g), 9.05(i), 9.05(j) or 9.07, (c) so long as it has been approved by Parent’s or its applicable Subsidiary’s Board of Directors in accordance with Applicable Law,
(i) customary fees to, and indemnifications of, non-officer directors of the Obligors and their respective Subsidiaries or (ii) the payment of reasonable and customary compensation and indemnification arrangements and benefit plans for officers and employees of the Obligors and their respective Subsidiaries in the ordinary course of business, and (d) transactions among Subsidiaries that are not Obligors in the ordinary course of business.
SECTION 9.11 Restrictive Agreements, Etc. Each Obligor will not, and will not permit any of its Subsidiaries to, enter into any agreement (other than a Loan Document) prohibiting:
The foregoing prohibitions shall not apply to customary restrictions of the type described in clause (a) above (which do not prohibit the Obligors from complying with or performing the terms of this Agreement and the other Loan Documents) which are contained in any agreement, (i) governing any Indebtedness permitted by Section 9.01(b) as to the transfer of assets financed with the proceeds of such Indebtedness, (ii) for the creation or assumption of any Lien on the sublet or assignment of any leasehold interest of any Obligor or any of its Subsidiaries entered into in the ordinary course of business, (iii) for the assignment of any contract or licensed intellectual property entered into by any Obligor or any of its Subsidiaries in the ordinary course of business or (iv) for the transfer of any asset pending the close of the sale of such asset pursuant to a Disposition permitted under this Agreement.
SECTION 9.12 Hedging Agreements. Each Obligor will not, and will not permit any of its Subsidiaries to, enter into any Hedging Agreement.
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SECTION 9.13 Changes in Business and Fiscal Year.
SECTION 9.14 Financial Performance Covenants.
SECTION 9.15 No Competition. No Subsidiary of any Obligor will compete with Parent or any other Subsidiary.
ARTICLE X
Events of Default
SECTION 10.01Listing of Events of Default. Each of the following events or occurrences described in this Section 10.01 shall constitute an “Event of Default”:
| (c) | Non-Performance of Certain Covenants and Obligations. |
9.13, 9.14 and 9.15.
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| (v) | take any action authorizing, or in furtherance of, any of the foregoing. |
| (k) | Change of Control. Any Change of Control shall occur. |
| (m) | Material Adverse Effect. Any Material Adverse Effect shall occur. |
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SECTION 10.02Remedies Upon Event of Default. If any Event of Default under Section 10.01(h) shall occur for any reason, whether voluntary or involuntary, all of the outstanding principal amount of the Loans and other Obligations shall automatically be due and payable and any Commitments shall be terminated, in each case, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by each Obligor. If any Event of Default (other than any Event of Default under Section 10.01(h)) shall occur for any reason, whether voluntary or involuntary, and be continuing, Administrative Agent may, and upon the direction of Required Lenders, Administrative Agent shall, declare all or any portion of the outstanding principal amount of the Loans and other Obligations to be due and payable and any Commitment shall be terminated, whereupon the full unpaid amount of such Loans and other Obligations that shall be so declared due and payable shall be and become immediately due and payable, in each case, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by each Obligor. In addition to the foregoing, Administrative Agent may, and upon the direction of Required Lenders, Administrative Agent shall, have the right to the appointment of a receiver for the property of the Obligors or a chief restructuring officer for the operation of any Obligor, and the Obligors hereby consent to such rights and such appointment and hereby waive any objection the Obligors may have thereto or the right to have a bond or other security posted by any Secured Creditor in connection therewith. The Lenders and Administrative Agent shall have all other rights and remedies available at law or in equity or pursuant to any Loan Documents.
SECTION 10.03Right to Cure Certain Covenant Violations. Notwithstanding anything to the contrary contained in Section 10.03(c), if Borrowers fail to comply with the requirements of any Financial Performance Covenant then (x) if such Financial Performance Covenant is set forth in Section 9.14(a), from the date on which such non-compliance occurred, or (y) if such Financial Performance Covenant is set forth in Section 9.14(b), from the end of the fiscal month for which such non-compliance occurred until the tenth calendar day after the date on which financial statements are required to be delivered pursuant to Section 8.01(a) or Section 8.01(b) (each such period, a “Financial Performance Covenant Cure Period”), Parent shall have the right to issue Capital Stock of Parent in an amount that, if the proceeds of the sale of such Capital Stock are added to Consolidated EBITDA or Unrestricted Cash, as the case may be, for the relevant testing period, would have been sufficient to cause compliance with such Financial Performance Covenant for such period (each, an “Financial Performance Covenant Equity Cure”) (for the avoidance of doubt, nothing in this Section 10.03 shall prevent any Borrower from receiving capital
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contributions in an aggregate amount in excess of the amount sufficient to cause compliance with such Financial Performance Covenant for the relevant testing period; provided that such excess shall not be added to Consolidated EBITDA or Unrestricted Cash for the purpose of calculating compliance with such Financial Performance Covenant or any other purpose), and provided, that:
| (a) | at no time will any such sale of Capital Stock result in a Change of Control; |
ARTICLE XI
Administrative Agents
SECTION 11.01Appointment. Each Lender (and, if applicable, each other Secured Creditor) hereby appoints Chicago Atlantic as its Administrative Agent under and for purposes of each Loan Document, and hereby authorizes Administrative Agent to act on behalf of such Lender (or if applicable, each other Secured Creditor) under each Loan Document, and, in the absence of other written instructions from the Lenders pursuant to the terms of the Loan Documents received from time to time by Administrative Agent, to exercise such powers hereunder and thereunder as are specifically delegated to or required of Administrative Agent by the terms hereof and thereof, together with such powers as may be incidental thereto. Each Lender (and, if applicable, each other Secured Creditor) hereby designates and appoints Administrative Agent as the agent of such Lender. Notwithstanding any provision to the contrary elsewhere in this Agreement, Administrative Agent shall not have any duties or responsibilities, except those expressly set forth herein, or any fiduciary relationship with any Lender or other Secured Creditor, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against Administrative Agent. Anything contained in any of the Loan Documents to the contrary notwithstanding, each Obligor, Administrative Agent and each Secured Creditor hereby agree that (i) no Secured Creditor shall have any right individually to realize upon any of the Collateral or to enforce the Security Agreement or any other Security Documents,
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it being understood and agreed that all powers, rights and remedies hereunder may be exercised solely by Administrative Agent, on behalf of the Secured Creditors in accordance with the terms hereof, and all powers, rights and remedies under the Security Documents may be exercised solely by Administrative Agent, and (ii) in the event of a foreclosure by Administrative Agent on any of the Collateral pursuant to a public or private sale or other disposition, Administrative Agent or any Lender may be the purchaser or licensor of any or all of such Collateral at any such sale or other disposition and Administrative Agent, as agent for and representative of the Secured Creditors (but not any Lender or Lenders in its or their respective individual capacities unless Required Lenders shall otherwise agree in writing) shall be entitled, for the purpose of bidding and making settlement or payment of the purchase price for all or any portion of the Collateral sold at any such public sale, to use and apply any of the Obligations (including Obligations owed to any other Secured Creditor) as a credit on account of the purchase price for any Collateral payable by Administrative Agent at such sale or other disposition.
SECTION 11.02Delegation of Duties. Administrative Agent may execute any of its duties under this Agreement and the other Loan Documents by or through agents or attorneys in fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. Administrative Agent shall not be responsible for the negligence or misconduct of any Administrative Agent s or attorneys in fact selected by it with reasonable care.
SECTION 11.03Exculpatory Provisions. Neither Administrative Agent nor any of its officers, directors, employees, agents, attorneys in fact or Affiliates shall be (a) liable for any action lawfully taken or omitted to be taken by it or such Person under or in connection with this Agreement or any other Loan Document (except to the extent that any of the foregoing are found by a final and non-appealable decision of a court of competent jurisdiction to have resulted from its or such Person’s own gross negligence, bad faith or willful misconduct) or (b) responsible in any manner to any of the Lenders or any other Secured Creditor for any recitals, statements, representations or warranties made by any Obligor, any Individual Guarantor or any officer thereof contained in this Agreement or any other Loan Document or in any certificate, report, statement or other document referred to or provided for in, or received by Administrative Agent under or in connection with, this Agreement or any other Loan Document or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document or for any failure of any Obligor, any Individual Guarantor or other Person to perform its obligations hereunder or thereunder. Administrative Agent shall not be under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the properties, books or records of any Obligor or any Individual Guarantor.
SECTION 11.04Reliance by Administrative Agent. Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any instrument, writing, resolution, notice, consent, certificate, affidavit, letter, telecopy, telex or teletype message, statement, order or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including counsel to the Obligors or the Individual Guarantors), independent accountants and other experts selected by Administrative Agent. Administrative Agent may deem and treat the payee of any note as the owner thereof for all purposes unless a written notice of assignment, negotiation or transfer thereof shall have been filed with Administrative Agent. Administrative Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Loan Document unless it shall first receive such advice or concurrence of Required Lenders (or, if so specified by this Agreement, all or other requisite Lenders) as it deems appropriate or it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense that may be incurred by it by reason of taking or continuing to take any such action. Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement and the other Loan Documents in accordance with a request of Required Lenders (or, if so specified by this Agreement, all
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Lenders), and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders and all future holders of the Loans and all other Secured Creditors.
SECTION 11.05Notice of Default. Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default hereunder, except with respect to any Default or Event of Default in the payment of principal, interest and fees required to be paid to Administrative Agent for the account of the Lenders unless Administrative Agent has received notice from a Lender or a Borrower referring to this Agreement, describing such Default or Event of Default and stating that such notice is a “notice of default”. Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default hereunder unless Administrative Agent has received notice from a Lender or a Borrower referring to this Agreement, describing such Default or Event of Default and stating that such notice is a “notice of default”. In the event that Administrative Agent receives such a notice, Administrative Agent shall give notice thereof to the Lenders. Administrative Agent shall take such action with respect to such Default or Event of Default as shall be reasonably directed by Required Lenders (or, if so specified by this Agreement, all Lenders or any other instructing group of Lenders specified by this Agreement); provided that unless and until Administrative Agent shall have received such directions, Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as Administrative Agent shall deem advisable in the best interests of the Secured Creditors.
SECTION 11.06Non-Reliance on Administrative Agent and Other Lenders. Each Lender (and, if applicable, each other Secured Creditor) expressly acknowledges that neither Administrative Agent, Arranger, nor any of their respective officers, directors, employees, agents, attorneys in fact or Affiliates have made any representations or warranties to it and that no act by Administrative Agent or Arranger hereafter taken, including any review of the affairs of any Obligor or any Individual Guarantor or any Affiliate of an Obligor, shall be deemed to constitute any representation or warranty by Administrative Agent or Arranger to any Lender or any other Secured Creditor. Each Lender (and, if applicable, each other Secured Creditor) represents to Administrative Agent and Arranger that it has, independently and without reliance upon Administrative Agent, Arranger or any other Lender or any other Secured Creditor, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, operations, property, financial and other condition and creditworthiness of the Obligors, the Individual Guarantors and their Affiliates and made its own decision to make its Loans hereunder. Each Lender (and, if applicable, each other Secured Creditor) also represents that it will, independently and without reliance upon Administrative Agent, Arranger or any other Lender or any other Secured Creditor, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make such investigation as it deems necessary to inform itself as to the business, operations, property, financial and other condition and creditworthiness of the Obligors, the Individual Guarantors and their Affiliates. Except for notices, reports and other documents expressly required to be furnished to the Lenders by Administrative Agent or Arranger hereunder, Administrative Agent and Arranger shall not have any duty or responsibility to provide any Lender or any other Secured Creditor with any credit or other information concerning the business, operations, property, condition (financial or otherwise), prospects or creditworthiness of any Obligor, any Individual Guarantor or any Affiliate of an Obligor that may come into the possession of Administrative Agent or any of its officers, directors, employees, agents, attorneys in fact or Affiliates.
SECTION 11.07Indemnification. The Lenders agree to indemnify Administrative Agent in its capacity as such (to the extent not reimbursed by the Obligors and without limiting the obligation of the Obligors to do so), ratably according to their respective Total Credit Exposure in effect on the date on which indemnification is sought under this Section 11.07 (or, if indemnification is sought after the date upon which the Commitments shall have terminated and the Loans shall have been paid in full, ratably in accordance with such Total Credit Exposure immediately prior to such date), from and against any and all
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liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever that may at any time (whether before or after the payment of the Loans) be imposed on, incurred by or asserted against Administrative Agent in any way relating to or arising out of, the Commitments, this Agreement, any of the other Loan Documents, or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by Administrative Agent under or in connection with any of the foregoing; provided that no Lender shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements that are found by a final and non- appealable decision of a court of competent jurisdiction to have resulted from Administrative Agent’s gross negligence, bad faith or willful misconduct. The agreements in this Section 11.07 shall survive the payment of the Loans and all other amounts payable hereunder.
SECTION 11.08Administrative Agent in Its Individual Capacity. Administrative Agent and its Affiliates may make loans to, accept deposits from and generally engage in any kind of business with Obligor or any Individual Guarantor as though Administrative Agent were not Administrative Agent. With respect to its Loans made or renewed by it, Administrative Agent shall have the same rights and powers under this Agreement and the other Loan Documents as any Lender and may exercise the same as though it were not Administrative Agent, and the terms “Lender”, “Lenders”, “Secured Creditor” and “Secured Creditors” shall include Administrative Agent in its individual capacity.
SECTION 11.09Successor Administrative Agent. Administrative Agent may resign as Administrative Agent upon 20 days’ notice to the Lenders and Borrowers. If Administrative Agent shall resign as Administrative Agent in its applicable capacity under this Agreement and the other Loan Documents, then Required Lenders shall appoint a successor agent, whereupon such successor agent shall succeed to the rights, powers and duties of Administrative Agent in its applicable capacity, and the term “Administrative Agent” means such successor agent effective upon such appointment and approval, and the former Administrative Agent’s rights, powers and duties as Administrative Agent in its applicable capacity shall be terminated, without any other or further act or deed on the part of such former Administrative Agent or any of the parties to this Agreement or any holders of the Loans. If no applicable successor agent has accepted appointment as Administrative Agent in its applicable capacity by the date that is 20 days following such retiring Administrative Agent’s notice of resignation, such retiring Administrative Agent’s resignation shall nevertheless thereupon become effective and the Lenders shall assume and perform all of the duties of Administrative Agent hereunder until such time, if any, as Required Lenders appoint a successor agent as provided for above. After any retiring Administrative Agent’s resignation as Administrative Agent, the provisions of this Article XI shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Agreement and the other Loan Documents. Notwithstanding the foregoing, Chicago Atlantic may resign as Administrative Agent, and choose a successor for such capacity, without notice to, or the consent of, Lenders (including Required Lenders) or any Obligor if such successor is an Affiliate of Chicago Atlantic.
SECTION 11.10Administrative Agent Generally. Except as expressly set forth herein, Administrative Agent shall have any duties or responsibilities hereunder in its capacity as such. Arranger shall not have any obligations or duties whatsoever in such capacity under this Agreement or any other Loan Document and shall incur no liability hereunder or thereunder in such capacity, but Arranger and its Related Parties shall have the benefit of the indemnities provided for hereunder.
SECTION 11.11Restrictions on Actions by Secured Creditors; Sharing of Payments.
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Subsidiaries now or hereafter maintained with such Lender. Each of the Lenders further agrees that it shall not, unless specifically requested to do so in writing by Administrative Agent, take or cause to be taken any action, including, the commencement of any legal or equitable proceedings to enforce any Loan Document against any Obligor or to foreclose any Lien on, or otherwise enforce any security interest in, any of the Collateral.
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each Lender promptly upon determining that any payment made to such Lender comprised, in whole or in part, a Rescindable Amount.
SECTION 11.12Agency for Perfection. Administrative Agent hereby appoints each other Secured Creditor as its agent and as sub-agent for the other Secured Creditors (and each Secured Creditor hereby accepts such appointment) for the purpose of perfecting all Liens with respect to the Collateral, including with respect to assets which, in accordance with Article VIII or Article IX, as applicable, of the Uniform Commercial Code of any applicable state can be perfected only by possession or control. Should any Secured Creditor obtain possession or control of any such Collateral, such Secured Creditor shall notify Administrative Agent thereof, and, promptly upon Administrative Agent’s request therefor shall deliver possession or control of such Collateral to Administrative Agent and take such other actions as agent or sub-agent in accordance with Administrative Agent’s instructions to the extent, and only to the extent, so authorized or directed by Administrative Agent.
SECTION 11.13Enforcement by Administrative Agent. All rights of action under this Agreement, the Notes and the other Loan Documents shall be instituted, maintained, pursued or enforced by Administrative Agent. Any suit or proceeding instituted by Administrative Agent in furtherance of such enforcement shall be brought in Administrative Agent’s name without the necessity of joining any of the other Lenders. In any event, the recovery of any judgment by Administrative Agent shall be for the ratable benefit of all Secured Creditors, subject to the reimbursement of expenses and costs of Administrative Agent.
SECTION 11.14Obligors and Individual Guarantors Not Beneficiaries. The provisions of this Article XI are solely for the benefit of Administrative Agent and Lenders, may not be enforced by any Obligor or any Individual Guarantor, and may be modified or waived without the approval or consent of the Obligors or the Individual Guarantors.
SECTION 11.15Intercreditor and Subordination Agreements. Lenders hereby (a) authorize Administrative Agent to execute and deliver any intercreditor agreement or subordination agreement on behalf of Administrative Agent and Lenders and to perform its obligations thereunder and
(b) agree to be bound by the provisions of such documents.
ARTICLE XII
Miscellaneous
SECTION 12.01Amendments and Waivers. Neither this Agreement nor any other Loan Document, nor any terms hereof or thereof, may be amended, supplemented, modified or waived except in accordance with the provisions of this Section 12.01. Required Lenders may, or, with the prior written consent of Required Lenders, Administrative Agent may, from time to time, enter into with the relevant Obligor or Individual Guarantor or Obligors or Individual Guarantors written amendments, supplements or modifications hereto and to the other Loan Documents for the purpose of adding any provisions to this Agreement or the other Loan Documents or changing in any manner the rights of the Lenders or the Obligors hereunder or thereunder, waive, on such terms and conditions as Required Lenders or Administrative Agent, as the case may be, may specify in such instrument, any of the requirements of this Agreement or the other Loan Documents or any Default or Event of Default and its consequences or consent to any acts or omissions of the Obligors or the Individual Guarantors hereunder or under any other Loan Document that, but for such consent, would constitute a Default or Event of Default hereunder or thereunder; provided that no such waiver, amendment, supplement, modification, consent or waiver shall directly or indirectly:
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be necessary to waive any obligation of Borrowers to pay interest at the Default Rate or amend Section 2.04(d)), or (ii) reduce or forgive any portion or extend the date for the payment, of any interest or fee payable hereunder (other than as a result of waiving the applicability of any post-default increase in interest rates and other than as a result of a waiver or amendment of any mandatory prepayment of Loans (which shall not constitute an extension, forgiveness or postponement of any date for payment of principal, interest or fees)), or (iii) amend or modify any provisions of Section 4.02(d) or any other provision that provides for the pro rata nature of disbursements by or payments to the Lenders, in each case without the written consent of each Lender directly and adversely affected thereby;
SECTION 12.02Notices and Other Communications.
(C) by such Lender in a notice to Parent and Administrative Agent.
All such notices and other communications shall be deemed to be given or made upon the earlier to occur of (i) actual receipt by the relevant party hereto and (ii) (A) if delivered by hand or by courier, when signed for by or on behalf of the relevant party hereto; (B) if delivered by mail, three Business Days after deposit in the mails, postage prepaid; and (C) if delivered by electronic mail (which form of delivery is subject to the provisions of Section 12.02(c)), when delivered if prior to 5:00 p.m. on a Business Day, and if after 5:00 p.m. on a Business Day, on the next following Business Day; provided that notices and other communications to Administrative Agent pursuant to Article II shall not be effective until actually received by such Person. In addition to the foregoing, to be effective, electronic mail notice must originate
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from an electronic mail address approved by all parties with at least 10 days’ advance written notice to allow parties to allow their systems to properly recognize and allow for delivery of such messages.
SECTION 12.03No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of Administrative Agent or any Lender, any right, remedy, power or privilege hereunder or under the other Loan Documents shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.
SECTION 12.04Survival of Representations and Warranties. All representations and warranties made hereunder and in the other Loan Documents shall survive the execution and delivery of this Agreement and the making of the Loans hereunder.
SECTION 12.05Payment of Expenses and Taxes; Indemnification. Each Obligor agrees
(a) to pay or reimburse Administrative Agent and Arranger for all their reasonable, out-of-pocket and documented costs and expenses incurred in connection with due diligence in respect of the transactions contemplated by this Agreement, the development, preparation and execution of, and any amendment, supplement, or modification to, this Agreement and the other Loan Documents, including in connection with an initial syndication, and any other documents prepared in connection herewith or therewith, and the consummation, monitoring, oversight and administration of the transactions contemplated hereby and thereby, including the reasonable fees, disbursements and other charges of counsel retained by, or for the benefit of, Administrative Agent, (b) to pay or reimburse each Lender and Administrative Agent for all their costs and expenses incurred in connection with the exercise, enforcement or preservation of any rights under this Agreement, the other Loan Documents and any such other documents, or in connection with the Loans made hereunder, including all such costs and expenses incurred during any workout, restructuring or negotiations in respect of such Loans, and including the reasonable fees, disbursements and other charges of counsel to each Lender and of counsel retained by or for the benefit of Administrative Agent, (c) to pay, indemnify, and hold harmless each Lender, Arranger and Administrative Agent from any and all Other Taxes, if any, that may be payable or determined to be payable in connection with the execution and delivery of, or consummation or administration of any of the transactions contemplated by, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Agreement, the other Loan Documents and any such other documents, (d) to pay or reimburse Administrative Agent and the Lenders for all reasonable fees, costs and expenses incurred in exercising its rights under Section 8.16 and
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to the execution, delivery, enforcement, performance and administration of this Agreement, the other Loan Documents and any such other documents, including any of the foregoing relating to a breach by any Obligor or any Individual Guarantor of any representation or warranty in any Loan Document or (ii) that may at any time be imposed upon, incurred by or asserted or awarded against any Secured Creditor or any Real Property, or arising directly or indirectly from or out of: (A) the direct or indirect violation under, non-compliance with or exposure to any liability under any Environmental Law, whether or not caused by or within the control of Obligors; (B) the actual or alleged presence, Release or threat of release of any Hazardous Materials, regardless of whether or not caused by or within the control of Obligors; (C) the enforcement of the environmental provisions of the Loan Documents, including the cost of assessment, containment or removal of any and all Hazardous Materials from any portion of any Real Property, the cost of any actions taken in response to the presence, release or threat of release of any such Hazardous Materials on, in, under or affecting any portion of any Real Property to prevent or minimize such release or threat of release so that it does not migrate or otherwise cause or threaten danger to present or future public health, safety, welfare or the environment, and costs incurred to comply with the Environmental Laws; (D) the failure by any Obligor or any Individual Guarantor to comply fully with the terms and conditions of this Agreement or any other Loan Document; or (E) the breach of any representation or warranty contained in this Agreement or any other Loan Document (all the foregoing in this Section 12.05(e), collectively, the “Indemnified Liabilities”); provided that the Obligors shall not have any obligation hereunder to Administrative Agent, Arranger or any Lender nor any of their Related Parties with respect to Indemnified Liabilities arising from the gross negligence or willful misconduct of the party to be indemnified as determined by a final and non-appealable decision of a court of competent jurisdiction. The agreements in this Section 12.05 shall survive repayment of the Loans and all other amounts payable hereunder and termination of this Agreement. To the fullest extent permitted by Applicable Law, no Obligor shall assert, and each Obligor hereby waives, any claim against any Lender, Administrative Agent and their respective Related Parties, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, the Loans or the use of the proceeds thereof. None of the Lenders, Administrative Agent, Arranger or any of their respective Related Parties shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby.
SECTION 12.06Successors and Assigns; Participations and Assignments; Replacement of
Lender.
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interest in all or any portion of their respective rights hereunder or under the other Loan Documents, including rights to payment (without the consent of, or notice to or any other action by, any other party hereto), to secure the obligations of Administrative Agent or any of its Affiliates to any Person providing any loan, letter of credit or other extension of credit to or for the account of Administrative Agent or any of its Affiliates and any agent, trustee or representative of such Person.
| (i) | Assignments shall be subject to the following additional conditions: |
$3,500; provided that only one such fee shall be payable in connection with simultaneous assignments to two or more Approved Funds;
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this Section 12.06 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with Section 12.06(c).
(x) if such Participant is an Affiliate of such Lender, the Participant may, as between itself and such Lender (but not as between such Lender, Administrative Agent, the Obligors and the other Lenders), approve any amendment, modification, consent or waiver of any provision of this Agreement or any other Loan Document and (y) such Lender will not, without the consent of the Participant agree to any amendment, modification, consent or waiver described in clause (i) of the first proviso to Section 12.01. Subject to Section 12.06(c)(ii), each Borrower agrees that each Participant shall be entitled to the benefits of Section 2.04, 2.05 and 4.04(a) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to Section 12.06(b). To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 12.08(a) as though it were a Lender; provided that such Participant agrees to be subject to Section 12.08(a) as though it were a Lender.
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A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 4.03(b) that are greater than the applicable Lender unless Borrowers are notified of the participation sold to such Participant and such Participant agrees, for the benefit of Borrowers, to comply with Sections 4.04(a) and 4.04(c) as though it were a Lender.
SECTION 12.07Pledge of Loans. The Obligors hereby acknowledge that the Lenders and their Affiliates may pledge the Loans as collateral security for loans made to the Lenders or their Affiliates. The Obligors shall, to the extent commercially reasonable, cooperate with the Lenders and their Affiliates to effect such pledges at the sole cost and expense of such Lender. Notwithstanding the foregoing or anything herein, no pledge shall release the Lender party thereto from any of its obligations hereunder.
SECTION 12.08Adjustments; Set-off.
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benefits is thereafter recovered from such Benefited Lender, such purchase shall be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but without interest. The foregoing provisions of this Section 12.08 shall not apply to payments made and applied in accordance with the terms of this Agreement and the other Loan Documents.
SECTION 12.09Counterparts.
SECTION 12.10Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
SECTION 12.11Integration. This Agreement and the other Loan Documents represent the agreement of the Obligors, Administrative Agent and the Lenders with respect to the subject matter hereof, and there are no promises, undertakings, representations or warranties by any party hereto or thereto relative to the subject matter hereof not expressly set forth or referred to herein or in the other Loan Documents.
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SECTION 12.12GOVERNING LAW. THIS AGREEMENT, THE OTHER LOAN DOCUMENTS (UNLESS EXPRESSLY PROVIDED OTHERWISE THEREIN) AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF ILLINOIS, WITHOUT REFERENCE TO CONFLICTS OF LAW PROVISIONS WHICH WOULD RESULT IN THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.
SECTION 12.13Submission to Jurisdiction; Waivers. Each party hereto hereby irrevocably and unconditionally:
SECTION 12.14Acknowledgments. Each Obligor hereby acknowledges that:
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SECTION 12.15WAIVERS OF JURY TRIAL. THE OBLIGORS, ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
SECTION 12.16Confidentiality. Administrative Agent and Lender shall hold all non- public information relating to any Obligor or any Subsidiary of any Obligor obtained pursuant to the requirements of this Agreement or in connection with such Lender’s evaluation of whether to become a Lender hereunder (“Confidential Information”) confidential in accordance with its customary procedure for handling confidential information of this nature and (in the case of a Lender that is a bank) in accordance with safe and sound banking practices; provided that Confidential Information may be disclosed by Administrative Agent or Lender:
| (a) | as required by any Governmental Authority; |
| (b) | pursuant to any legal or regulatory process; |
| (c) | as required by any Applicable Law; |
| (f) | in connection with: |
| (i) | the establishment of any special purpose funding vehicle with respect to |
the Loans,
| (ii) | any pledge permitted under Section 12.08; |
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confidential nature of such information and instructed to keep such information confidential on the same terms as this Section 12.16);
| (g) | to any rating agency; |
| (h) | with the written consent of Parent; |
| (i) | on a confidential basis, to any of its investors or prospective investors; |
| (k) | in connection with the Promotional Rights (as defined below); |
provided that in the case of clause (e) hereof, the Person to whom Confidential Information is so disclosed is advised of and has been directed to comply with the provisions of this Section 12.16.
Notwithstanding the foregoing, Administrative Agent and each Lender shall have the right to publicize, for general marketing and related promotional purposes, their relationship to the Obligors and the fact that they have extended the Loans to the Obligors (the “Promotional Rights”) and, in connection therewith, each Obligor hereby grants to Administrative Agent and each Lender a royalty free, non- exclusive limited license to use such Obligor’s name, trade name, trademarks, logos, trade dress and other identifying intellectual property, now existing or hereafter acquired, in any literature, advertisements, websites, promotional or other marketing materials now or hereafter used by Administrative Agent or Lender.
Notwithstanding the foregoing, neither Administrative Agent nor Lender shall have any obligation to keep information confidential if such information: (i) is or becomes public from a source other than Administrative Agent or a Lender, or one of Administrative Agent’s or a Lender’s Affiliates, consultants or legal or financial advisors in breach of this Agreement, (ii) is, was or becomes known on a non- confidential basis (to the best of Administrative Agent’s or Lender’s knowledge after reasonable inquiry) to or discovered by Administrative Agent, any Lender or any of their Affiliates, consultants or legal or financial advisors independently from communications by or on behalf of any Obligor, or (iii) is independently developed by Administrative Agent without use of Confidential Information, provided that, the source of such information was not known to be bound by a confidentiality agreement with (or subject to any other contractual, legal or fiduciary obligation of confidentiality to) the relevant Obligor.
ADMINISTRATIVE AGENT AND EACH LENDER ACKNOWLEDGES THAT CONFIDENTIAL INFORMATION (AS DEFINED IN THIS SECTION 12.16) FURNISHED TO IT PURSUANT TO THIS AGREEMENT MAY INCLUDE MATERIAL NON-PUBLIC INFORMATION CONCERNING ANY OBLIGOR AND ITS RELATED PARTIES OR THEIR RESPECTIVE SECURITIES, AND CONFIRMS THAT IT HAS DEVELOPED COMPLIANCE PROCEDURES REGARDING THE USE OF MATERIAL NON-PUBLIC INFORMATION AND THAT IT WILL HANDLE SUCH MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH THOSE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.
ALL INFORMATION, INCLUDING WAIVERS AND AMENDMENTS, FURNISHED BY THE OBLIGORS OR ADMINISTRATIVE AGENT PURSUANT TO, OR IN THE COURSE OF ADMINISTERING, THIS AGREEMENT WILL BE SYNDICATE-LEVEL INFORMATION, WHICH MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT THE OBLIGORS AND THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES. ACCORDINGLY, EACH LENDER
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REPRESENTS TO THE OBLIGORS AND ADMINISTRATIVE AGENT THAT IT HAS IDENTIFIED IN ITS ADMINISTRATIVE QUESTIONNAIRE A CREDIT CONTACT WHO MAY RECEIVE INFORMATION THAT MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH ITS COMPLIANCE PROCEDURES AND APPLICABLE LAW.
SECTION 12.17Press Releases, Etc. Each Obligor will not, and will not permit any of its respective Subsidiaries, directly or indirectly, to publish any press release or other similar public disclosure or announcements (including any marketing materials) regarding this Agreement, the other Loan Documents, or any of the Transactions, without the consent of Administrative Agent.
SECTION 12.18Releases of Guarantees and Liens. Notwithstanding anything to the contrary contained herein or in any other Loan Document, Administrative Agent is hereby irrevocably authorized by each Secured Creditor (without requirement of notice to or consent of any Secured Creditor) to take any action requested by Borrowers having the effect of releasing any Liens on Collateral or guarantee obligations (i) to the extent necessary to permit consummation of any transaction not prohibited by any Loan Document or that has been consented to in accordance with Section 12.01 or (ii) under the circumstances described in Section 12.18(b).
SECTION 12.19USA Patriot Act. Each Lender hereby notifies each Obligor and each Individual Guarantor that pursuant to the requirements of the Patriot Act, it is required to obtain, verify and record information that identifies the Obligors and the Individual Guarantors which information includes the name and address of each Obligor and each Individual Guarantor and other information that will allow such Lender to identify each Obligor and each Individual Guarantor in accordance with the Patriot Act. Each Obligor agrees to provide all such information to the Lenders upon request by Administrative Agent at any time, whether with respect to any Person who is an Obligor on the Closing Date or who becomes an Obligor thereafter.
SECTION 12.20No Fiduciary Duty. Each Obligor, on behalf of itself and its Subsidiaries, agrees that in connection with all aspects of the transactions contemplated hereby and any communications in connection therewith, the Obligors, their respective Subsidiaries and Affiliates, on the one hand, and Administrative Agent, Arranger, the Lenders and their respective Affiliates, on the other hand, will have a business relationship that does not create, by implication or otherwise, any fiduciary duty on the part of Administrative Agent, Arranger, the Lenders or their respective Affiliates, and no such duty will be deemed to have arisen in connection with any such transactions or communications.
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SECTION 12.21Authorized Officers. The execution of any certificate requirement hereunder by an Authorized Officer shall be considered to have been done solely in such Authorized Officer’s capacity as an officer of the applicable Obligor (and not individually). Notwithstanding anything to the contrary set forth herein, each of the Secured Creditors shall be entitled to rely and act on any certificate, notice or other document delivered by or on behalf of any Person purporting to be an Authorized Officer of an Obligor and shall have no duty to inquire as to the actual incumbency or authority of such Person.
SECTION 12.22Subordination of Intercompany Indebtedness. The Obligors hereby agree that all present and future Indebtedness of any Obligor to any other Obligor (“Intercompany Indebtedness”) shall be subordinate and junior in right of payment and priority to the Obligations, and each Obligor agrees not to make, demand, accept or receive any payment in respect of any present or future Intercompany Indebtedness, including any payment received through the exercise of any right of setoff, counterclaim or cross claim, or any collateral therefor, unless and until such time as the Obligations shall have been indefeasibly paid in full; provided that, so long as no Default or Event of Default shall have occurred and be continuing and no Default or Event of Default shall be caused thereby and such Indebtedness is expressly permitted hereunder, the Obligors may make and receive such payments in respect of Intercompany Indebtedness as shall be customary in the ordinary course of the Obligors’ business. Without in any way limiting the foregoing, in any Insolvency Event, or any receivership, liquidation, reorganization, dissolution or other similar proceedings relative to any Obligor or to its businesses, properties or assets, the Lenders shall be entitled to receive payment in full of all of the Obligations before any Obligor shall be entitled to receive any payment in respect of any present or future Intercompany Indebtedness.
SECTION 12.23Public Lenders. Each Obligor agrees that Administrative Agent may, but shall not be obligated to, make the Communications available to the Lenders by posting the Communications on Debt Domain, Intralinks, Syndtrak or a substantially similar electronic transmission system (the “Platform”). The Platform is provided “as is” and “as available.” Each Obligor hereby acknowledges that (a) Administrative Agent may, but shall not be obligated to, make available to the Lenders materials or information provided by or on behalf of such Obligor hereunder (collectively, the “Obligor Materials”) by posting Obligor Materials on the Platform and (b) certain of the Lenders may be “public-side” Lenders (i.e., Lenders that do not wish to receive material non-public information with respect to any Obligor or its securities) (each, a “Public Lender”). Each Obligor hereby agrees that (w) all Obligor Materials that are to be made available to Public Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, means that the word “PUBLIC” shall appear prominently on the first page thereof; (x) by marking Obligor Materials “PUBLIC,” each Obligor shall be deemed to have authorized Administrative Agent and the Lenders to treat such Obligor Materials as not containing any material non-public information with respect to such Obligor or its securities for purposes of United States federal and state securities laws (provided, however, that to the extent such Obligor Materials constitute Confidential Information, they shall be treated as set forth in Section 12.16); (y) all Obligor Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated as “Public Investor;” and (z) Administrative Agent shall be entitled to treat any Obligor Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not marked as “Public Investor.” Notwithstanding the foregoing, the following Obligor Materials shall be deemed to have been marked “PUBLIC”, unless Parent notifies Administrative Agent promptly that any such document contains material non-public information: (1) the Loan Documents, (2) notification of changes in the terms of the credit facility hereunder and (3) any financial statements and compliance certificates delivered by any Obligor pursuant to Section 8.01(a), 8.01(b) or 8.01(c).
SECTION 12.24Original Issue Discount. The Obligors, Administrative Agent and the Lenders, as applicable, agree (i) that the Notes are debt for federal income Tax purposes, (ii) that the Notes issued to the Lenders constitute a single debt instrument for purposes of Sections 1271 through 1275 of the Code and the Treasury Regulations thereunder (pursuant to Treasury Regulations Section 1.1275-2(c)), that
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such debt instrument may be issued with original issue discount (“OID”), and that, if so issued, such debt instrument is described in Treasury Regulations Section 1.1272-1(c)(2) and therefore is governed by the rules set out in Treasury Regulations Section 1.1272-1(c), including Section 1.1272-1(c)(5), and is then not governed by the rules set out in Treasury Regulations Section 1.1275-4, (iii) that the Lenders shall have 30 days to review and approve any calculation by the Obligors regarding the amount of OID for any accrual period on the applicable Notes, such approval not to be unreasonably withheld, (iv) not to file any Tax Return, report or declaration inconsistent with the foregoing, unless otherwise required by applicable law and (v) any such OID shall constitute principal for all purposes under this Agreement.
SECTION 12.25Tax Treatment. Borrowers and the Lenders agree that the Loans are indebtedness of Borrowers for U.S. federal income Tax purposes. Each party to this Agreement agrees not to take any Tax position inconsistent with such Tax characterization and shall not report the transactions arising under this Agreement in any manner other than the issuance of debt obligations on all applicable Tax returns unless otherwise required by a final determination within the meaning of Section 1313(a) of the Code (or a similar final determination under applicable state or local Law).
ARTICLE XIII
Additional Covenants and Agreements.
SECTION 13.01Cannabis Laws. Administrative Agent and the Obligors acknowledge that although certain U.S. State Cannabis Laws have legalized the cultivation, distribution, sale and possession of cannabis and related products, (a) the nature and scope of U.S. Federal Cannabis Laws may result in circumstances where activities permitted under U.S. State Cannabis Laws may contravene U.S. Federal Cannabis Laws and (b) engagement in Restricted Cannabis Activities may contravene U.S. Federal Cannabis Laws. Accordingly, for the purpose hereof, and notwithstanding anything to the contrary contained in this Agreement or any other Loan Document, each representation, covenant and other provision hereof relating to compliance with Applicable Law will be subject to the following: (i) engagement in any activity that is permitted by U.S. State Cannabis Laws but contravenes U.S. Federal Cannabis Laws, and in respect of which the applicable Government Authorities have agreed, or are bound by Applicable Law (e.g., the proposed Secure and Fair Enforcement (SAFE) Banking Act (H.R. 1595) and the proposed Clarifying Law Around Insurance of Marijuana (CLAIM) Act (H.R. 4074 and Senate Bill 2201)), to forego or have otherwise suspended prosecution and enforcement of such U.S. Federal Cannabis Laws will not, in and of itself, be deemed to be non-compliance with Applicable Law; (ii) engagement in any Restricted Cannabis Activity will be deemed to be non-compliance with Applicable Law; and (iii) if any Change in Cannabis Law results in the business activities of any Obligor becoming Restricted Cannabis Activities, such Change in Cannabis Law will be deemed to have had a Material Adverse Effect. Nothing contained in this Agreement shall require the Obligors to violate any provision of U.S. State Cannabis Laws or attending regulations, as applicable.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this Agreement to be duly executed and delivered as of the date first above written.
| |
| BORROWERS: PROPER HOLDINGS, LLC  By: /s/ John M. Pennington Name: John M. Pennington Title: Manager NEW GROWTH HORIZON, LLC By: /s/ John M. Pennington Name: John M. Pennington Title: Manager NGH INVESTMENTS, LLC By: /s/ John M. Pennington Name: John M. Pennington Title: Manager |
CREDIT AGREEMENT
| ADMINISTRATIVE AGENT: CHICAGO ATLANTIC ADMIN, LLC By: /s/ Peter Sack Name: Peter Sack Title: Authorized Person LENDERS: CHICAGO ATLANTIC REAL ESTATE FINANCE, INC. By: /s/ Peter Sack Name: Peter Sack Title: Authorized Person CHICAGO ATLANTIC CREDIT OPPORTUNITIES, LLC By: /s/ Peter Sack Name: Peter Sack Title: Authorized Person CHICAGO ATLANTIC CREDIT COMPANY, LLC By: /s/ Peter Sack Name: Peter Sack Title: Authorized Person |
CREDIT AGREEMENT
