LOAN AGREEMENT BY AND BETWEEN PELORUS FUND REIT, LLC, AS LENDER, TERRASCEND NJ LLC, HMS PROCESSING LLC, HMS HAGERSTOWN, LLC, AND HMS HEALTH, LLC, COLLECTIVELY AS BORROWER, TERRASCEND CORP. AND TERRASCEND USA, INC., WELL AND GOOD, INC. AND WDB HOLDING...

 

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Exhibit 10.10

 

 

 

 

 

LOAN AGREEMENT

 

 

 

BY AND BETWEEN

 

 

 

PELORUS FUND REIT, LLC,

 

AS LENDER,

 

TERRASCEND NJ LLC, HMS PROCESSING LLC, HMS HAGERSTOWN, LLC, AND HMS HEALTH, LLC,

 

COLLECTIVELY AS BORROWER,

 

TERRASCEND CORP. AND TERRASCEND USA, INC., WELL AND GOOD, INC. AND WDB HOLDING MD, INC.,

 

COLLECTIVELY AS GUARANTOR,

 

 

 

DATED AS OF OCTOBER 11, 2022

 

 

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TABLE OF CONTENTS

 

 

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ARTICLE I DEFINITIONS 2

ARTICLE II THE LOAN 35

ARTICLE III RESERVE ACCOUNTS GENERALLY 47

ARTICLE IV REPRESENTATIONS AND WARRANTIES 48

 

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ARTICLE V REPORTING COVENANTS 58

ARTICLE VI OTHER COVENANTS 60

ARTICLE VII CONSTRUCTION 66

ARTICLE VIII INSURANCE; CASUALTY, CONDEMNATION AND

RESTORATION 67

 

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ARTICLE IX EVENTS OF DEFAULT AND REMEDIES 73

ARTICLE X LOAN GUARANTY 78

ARTICLE XI SECONDARY MARKET TRANSACTIONS 82

ARTICLE XII MISCELLANEOUS 84

 

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EXHIBITS AND SCHEDULES:

 

Exhibits:

EXHIBIT A-1 - Form of U.S. Tax Compliance Certificate EXHIBIT A-2 - Form of U.S. Tax Compliance Certificate EXHIBIT A-3 - Form of U.S. Tax Compliance Certificate EXHIBIT A-4 - Form of U.S. Tax Compliance Certificate

EXHIBIT B - Definition of “Special Purpose Entity” and Related Defined Terms Schedules:

Schedule 1 - List of Loan Documents Schedule 2.6 Conditions to Closing

Schedule 4.1 - Loan Parties Organizational Numbers Schedule 4.3 - Borrower Organizational Chart Schedule 4.16 - Affiliate Fees

Schedule 4.21 - Material Contracts Schedule 4.23 - Regulatory Licenses Schedule 6.20 - Certain Accounts

Schedule 6.7 - Existing Parent Indebtedness Schedule 6.24 - Post-Closing Obligations Schedule 7.1 - Construction Work

Schedule 7.2 - Approved Construction Budget Schedule 11.1 - List of Disqualified Lenders

 

 

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THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS ARE SUBJECT TO STRICT REQUIREMENTS FOR ONGOING REGULATORY COMPLIANCE BY THE PARTIES HERETO, INCLUDING, WITHOUT LIMITATION, REQUIREMENTS THAT THE PARTIES TAKE NO ACTION IN VIOLATION OF EITHER ANY STATE CANNABIS LAWS OR THE GUIDANCE OR INSTRUCTION OF THE REGULATOR. SECTION 12.27(b) CONTAINS SPECIFIC REQUIREMENTS AND COMMITMENTS BY THE PARTIES TO MAINTAIN FULLY THEIR RESPECTIVE COMPLIANCE WITH STATE CANNABIS LAWS AND THE REGULATOR. THE PARTIES UNDERSTAND THE REQUIREMENTS OF SECTION 12.27(b).

 

 

LOAN AGREEMENT

 

THIS LOAN AGREEMENT is made and entered into as of October 11, 2022, by and between TERRASCEND NJ LLC, a New Jersey limited liability company (“TerrAscend NJ”), HMS HAGERSTOWN, LLC a Delaware limited liability company (“MD Propco”), HMS PROCESSING, LLC, a Maryland limited liability company (“MD Opco 1”), HMS HEALTH, LLC, a Maryland limited liability company (“MD Opco 2” and, together with MD Opco 1, individually and collectively, as the context may require, “MD Opco”; each of TerrAscend NJ, MD Propco and MD Opco are referred to herein individually and collectively, as the context may require, as “Borrower”), TERRASCEND CORP., an Ontario corporation (“Canadian Parent”), TERRASCEND USA, INC., a Delaware corporation (“American Parent” and, together with Canadian Parent, individually and collectively, as the context may require, “Parent”), WELL AND GOOD, INC., a Delaware corporation, and WDB HOLDING MD, INC., a Maryland corporation (Well and Good, Inc., Parent and WDB Holding MD, Inc. are referred to herein individually and collectively, as the context may require, as “Guarantor”), and PELORUS FUND REIT, LLC, a Delaware limited liability company (together with its successors and/or assigns, “Lender”).

 

WITNESSETH:

 

WHEREAS, ▇▇▇▇▇▇▇▇ has requested that ▇▇▇▇▇▇ provide Borrower with real estate secured financing (the “Loan”) in the amount of Forty Five Million Four Hundred Seventy Eight Thousand and 00/100 Dollars ($45,478,000.00) (the “Loan Amount”).

 

WHEREAS, Guarantor owns, directly or indirectly, beneficial ownership interests in Borrower and will derive substantial benefit from Lender making the Loan to Borrower;

 

WHEREAS, MD Propco has leased the MD Real Property to MD Opco, and MD Opco operates the Cannabis Business (as defined below) and holds the Regulatory Licenses with respect thereto;

 

WHEREAS, prior to the consummation of the Permitted Reorganization, TerrAscend NJ owns the NJ Real Property and operates the Cannabis Business (as defined below) and holds the Regulatory Licenses with respect thereto;

 

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WHEREAS, ▇▇▇▇▇▇ is willing to provide the Loan to Borrower, on the terms and conditions contained in this Agreement and the other Loan Documents.

 

NOW, THEREFORE, in consideration of the making of the Loan by ▇▇▇▇▇▇, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

 

ARTICLE I DEFINITIONS

meanings set forth respectively after each:

 

“Accounting Standard” means GAAP or any other accounting method approved

by ▇▇▇▇▇▇.

 

“ADA” means the Americans with Disabilities Act, 42 U.S.C. §§ 12101, et seq., as

the same may be hereafter amended or modified.

 

“Adjusted EBITDA” means for any period, Net Income of Borrower for such period, plus, without duplication and to the extent deducted in determining Net Income for such period, the sum of (a) interest expense (including, without limitation, any interest component in respect of lease obligations, right of use assets and any revaluation thereof), (b) provision for taxes based on income, (c) depreciation expense, (d) amortization expense, (e) unusual or nonrecurring charges, expenses or losses (excluding losses from discontinued operations), (f) other non-cash charges, expenses or losses (excluding any such non-cash charge to the extent it represents an accrual or reserve for potential cash charge in any future period or amortization of a prepaid cash charge that was paid in a prior period, but including purchase accounting adjustments under ASC 805 under GAAP), minus, without duplication and to the extent included in determining Net Income for such period, the sum of (g) unusual or non-recurring gains and non-cash income,

(h) any other noncash income or gains increasing Net Income for such period (excluding any such non-cash gain to the extent it represents the reversal of an accrual or reserve for potential cash charge in any prior period), and (i) any gains realized from the disposition of property outside of the ordinary course of business, all as determined on a consolidated basis; provided, however that the adjustments pursuant to clause (e) may not exceed 30% of consolidated Adjusted EBITDA (without giving effect to any adjustments pursuant to clause (e)) for any given period.

 

“Adjusted Term SOFR” means Term SOFR plus 9.5%.

 

“Affiliate” of any Person is a Person that owns or controls directly or indirectly the Person, any Person that controls or is controlled by or is under common control with the Person, and each of that Person’s senior executive officers, directors, partners and, for any Person that is a limited liability company, that Person’s managers and members.

 

 

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“Affiliate Fees” is defined in Section 4.16.

 

 

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“Agreement” means this Loan Agreement, as the same may be amended, restated, modified or supplemented from time to time.

 

“Applicable Interest Rate” has the meaning set forth in Section 2.7(d), as adjusted pursuant to this Agreement.

 

“Appraisal” means a written appraisal prepared by an MAI appraiser acceptable to Lender in its sole discretion and prepared in compliance with applicable regulatory requirements, including, without limitation, the Financial Institutions Recovery, Reform and Enforcement Act of 1989, as amended from time to time, and subject to ▇▇▇▇▇▇’s customary independent appraisal requirements.

 

“American Parent” is defined in the opening paragraph of this Agreement.

 

“Annual Budget” means the operating budget for the Loan Parties (including with respect to the Property), as amended from time to time in accordance with this Agreement.

 

“Anti-Money Laundering Laws” means those laws, regulations and sanctions, state and United States and/or Canadian, as applicable, federal, criminal and civil, that (a) limit the use of and/or seek the forfeiture of proceeds from illegal transactions; (b) limit commercial transactions with designated countries or individuals believed to be terrorists, narcotics dealers or otherwise engaged in activities contrary to the interests of the United States or Canada, as applicable; (c) require identification and documentation of the parties with whom a financial institution conducts business; or (d) are designed to disrupt the flow of funds to terrorist organizations. Such laws, regulations and sanctions shall be deemed to include the Money Laundering Control Act of 1986, as amended, the Patriot Act, the Bank Secrecy Act, the Trading with the Enemy Act, 50 U.S.C. App. Section 1 et seq., the International Emergency Economic Powers Act, 50 U.S.C. Section 1701 et seq., and the sanction regulations promulgated pursuant thereto by the OFAC, as well as laws relating to prevention and detection of money laundering in 18 U.S.C. Sections 1956 and 1957.

 

“Approved Construction Budget” means the construction budget attached hereto as Schedule 7.2, as the same may be amended from time to time with the approval of Lender (and the Approved Construction Budget and Schedule 7.2 shall be deemed to be updated to the extent such approval is obtained).

 

“Bankruptcy Action” means with respect to any Person (a) such Person filing a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (b) the filing of an involuntary petition against such Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (c) such Person filing an answer consenting to or otherwise colluding or acquiescing in or joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; or soliciting or causing to be solicited petitioning creditors for any involuntary petition from any Person; (d) the appointment of a custodian, receiver, trustee, or examiner for such Person or any portion of the Property; (e) such Person making an assignment for the benefit of creditors, or admitting, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due; or (f) such Person commencing (or have commenced against it) a

 

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proceeding for the dissolution or liquidation of it.

 

“Bankruptcy Proceeding” is defined in Section 10.6(a).

 

“Bankruptcy Code” means the Bankruptcy Reform Act of 1978, 11 U.S.C. §101- 1330, as the same may be hereafter amended or modified.

 

“Base Rate” means, on any day, the greatest of (a) the Floor, (b) the Federal Funds Rate in effect on such day plus ½%, (c) Term SOFR for a one-month tenor in effect on such day; provided that this clause (c) shall not be applicable during any period in which Term SOFR is unavailable or unascertainable, and (d) the U.S. prime rate as published in The Wall Street Journal’s “Money Rates” table for such day or such other rate of interest publicly announced by ▇▇▇▇▇▇ from time to time as its prime rate in effect (which is not necessarily the best or lowest rate of interest charged as a prime rate). If multiple prime rates are quoted in such table, then the highest U.S. prime rate quoted therein shall be the prime rate. In the event that a U.S. prime rate is not published in The Wall Street Journal’s “Money Rates” table for any reason or The Wall Street Journal is not published that day in the United States of America for general distribution, ▇▇▇▇▇▇ will choose a substitute U.S. prime rate, for purposes of calculating the interest rate applicable hereunder, which is based on comparable information, until such time as a prime rate is published in The Wall Street Journal’s “Money Rates” table. Each change in the Base Rate shall become effective without notice to Borrower on the effective date of each such change.

 

“Base Rate Loan” means each portion of the Loan to the extent that it that bears interest at a rate determined by reference to the Base Rate.

 

“Base Rate Term SOFR Determination Day” has the meaning specified therefor in the definition of “Term SOFR”.

 

“Benchmark” means, initially, the Term SOFR Reference Rate; provided that if a Benchmark Transition Event has occurred with respect to the Term SOFR Reference Rate or the then-current Benchmark, then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to Section 2.14(a)(iii)(A).

 

“Benchmark Replacement” means, with respect to any Benchmark Transition Event, the sum of (a) the alternate benchmark rate that has been selected by Lender and Borrower giving due consideration to (i) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement for the then-current Benchmark for Dollar-denominated syndicated credit facilities and (b) the related Benchmark Replacement Adjustment; provided that if such Benchmark Replacement as so determined would be less than the Floor, such Benchmark Replacement shall be deemed to be the Floor for the purposes of this Agreement and the other Loan Documents.

 

“Benchmark Replacement Adjustment” means, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement, the spread

 

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adjustment, or method for calculating or determining such spread adjustment (which may be a

 

 

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positive or negative value or zero) that has been selected by ▇▇▇▇▇▇ and Borrower giving due consideration to (a) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body, or

(b) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for Dollar-denominated syndicated credit facilities.

 

“Benchmark Replacement Date” means the earliest to occur of the following events with respect to the then-current Benchmark:

 

(ii) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide such Benchmark (or such component thereof); or

 

 

 

“Benchmark Transition Event” means the occurrence of one or more of the following events with respect to the then-current Benchmark:

 

 

 

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jurisdiction over the administrator for such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component), which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide such Benchmark (or such component thereof) permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide such Benchmark (or such component thereof); or

 

 

“Benchmark Transition Start Date” means, in the case of a Benchmark Transition Event, the earlier of (a) the applicable Benchmark Replacement Date and (b) if such Benchmark Transition Event is a public statement or publication of information of a prospective event, the 90th day prior to the expected date of such event as of such public statement or publication of information (or if the expected date of such prospective event is fewer than 90 days after such statement or publication, the date of such statement or publication).

 

“Benchmark Unavailability Period” means the period (if any) (x) beginning at the time that a Benchmark Replacement Date has occurred if, at such time, no Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 2.14(a)(iii) and (y) ending at the time that a Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 2.14(a)(iii).

 

“Blocked Account” means the commercial deposit account to be established by MD Propco at Blocked Account Bank over which Lender will have exclusive control for withdrawal purposes pursuant to a Control Agreement.

 

“Blocked Account Bank” means ParkeBank, or such other bank as shall be approved by Lender.

 

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

 

“Borrower” is defined in the opening paragraph of this Agreement.

 

“Business Day” means any day, other than a Saturday, Sunday or any other day on which the New York Stock Exchange or the Federal Reserve Bank of New York is not open for business or which is a day on which banking institutions located in the State or the Province of Ontario are required or authorized by law or other governmental action to close.

 

 

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“Canadian Parent” is defined in the opening paragraph of this Agreement.

 

 

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“Cannabis Business” shall mean the business of acquiring, cultivating, manufacturing, extracting, testing, producing, processing, possessing, selling (at retail or wholesale), dispensing, 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 any real property on which any such activity is conducted.

 

“Cash Equivalents” means (a) marketable direct obligations issued by, or unconditionally guaranteed by, the United States or issued by any agency thereof and backed by the full faith and credit of the United States, (b) marketable direct obligations issued or fully guaranteed by any state of the United States or any political subdivision of any such state or any public instrumentality thereof, (c) commercial paper, (d) certificates of deposit, time deposits, overnight bank deposits or bankers’ acceptances, (e) Deposit Accounts, (f) repurchase obligations of any commercial bank or recognized securities dealer, (g) debt securities with maturities of six (6) months or less from the date of acquisition backed by standby letters of credit issued by any commercial bank, and (h) investments in money market funds substantially all of whose assets are invested in the types of assets described in clauses (a) through (g) above.

 

“Casualty” is defined in Section 8.1.

 

“Casualty Retainage” is defined in Section 8.8(b).

 

“Cell Tower Lease” means that certain land lease agreement dated as of February 23, 2017 among Deckenbach Family Limited Partnership, as lessor (the “Original Lessor”), and New York SMSA Limited Partnership d/b/a Verizon Wireless assigned by the Original Lessor to TerrAscend NJ pursuant to that certain assignment and assumption of lease agreement dated as of February 12, 2019 among Original Lessor and TerrAsc.

 

“Change in Cannabis Law” means any adverse change after the Effective Date in Federal Cannabis Laws or State Cannabis Laws, or the application or interpretation thereof by any Governmental Authority, (a) that would make it unlawful for Lender to (i) continue to be a party to any Loan Document, (ii) perform any of its obligations under any Loan Document, or (iii) to fund or maintain the Loan, (b) pursuant to which any Governmental Authority has enjoined any Lender from (i) continuing to be a party to any Loan Document, (ii) performing any of its obligations under any 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 Lender or its Affiliate or any investor therein, or (ii) Lender to obtain any license, permit, or other authorization to, in each case, (A) continue to be a party to any Loan Document, (B) perform any of its obligations under any Loan Document, or (C) to fund or maintain the Loans, or (d) that would impair Lender’s ability to foreclose upon or otherwise deal with the Collateral.

 

“Change in Control” means (a) with respect to Canadian Parent, (i) any person or group of persons acting jointly or in concert (as such expression is defined in National Instrument 62-104 Take-Over Bids and Issuer Bids adopted by the Canadian Securities Regulatory Authorities (as such Instrument may be amended from time to time)) beneficially owns, directly or indirectly,

 

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more than 50% or more of the Equity Interests of the Canadian Parent entitled to vote for members

 

 

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of the board of directors or equivalent governing body of the Canadian Parent on a fully-diluted basis (and taking into account all such securities that such person or group has the right to acquire pursuant to any option right), (ii) any person or group of persons, acting jointly or in concert (as such expression is defined in National Instrument 62-104 Take-Over Bids and Issuer Bids adopted by the Canadian Securities Regulatory Authorities (as such Instrument may be amended from time to time)) acquires the power to direct, or cause the direction of, management, business or policies of the Canadian Parent, whether through the ability to exercise voting power, by contract or otherwise, or (iii) any person or group of persons acting jointly or in concert (as such expression is defined in National Instrument 62-104 – Take-Over Bids and Issuer Bids adopted by the Canadian Securities Regulatory Authorities (as such Instrument may be amended from time to time)) succeed in having a sufficient number of nominees elected to the board of directors of the Canadian Parent that such nominees, when added to any existing director remaining on the board of directors of the Canadian Parent, will constitute a majority of the board of directors of the Canadian Parent; (b) with respect to any Loan Party other than Canadian Parent or TerrAscend NJ, Canadian Parent shall cease to own, directly or indirectly, free and clear of all Liens or other encumbrances, 100% of the outstanding voting Equity Interests of such Loan Party on a fully diluted basis; and (c) with respect to TerrAscend NJ, Canadian Parent shall cease to indirectly own, free and clear of all Liens or other encumbrances, at least 87.5% of the outstanding voting Equity Interests of TerrAscend NJ on a fully diluted basis.

 

“Change in Law” means the occurrence after the date of this Agreement of: (a) the adoption or effectiveness of any law, rule, regulation, judicial ruling, judgment or treaty, (b) any change in any law, rule, regulation, judicial ruling, judgment or treaty or in the administration, interpretation, implementation or application by any Governmental Authority of any law, rule, regulation, guideline or treaty, (c) any new, or adjustment to, requirements prescribed by the Board of Governors for “Eurocurrency Liabilities” (as defined in Regulation D of the Board of Governors), requirements imposed by the Federal Deposit Insurance Corporation, or similar requirements imposed by any domestic or foreign governmental authority or resulting from compliance Lender with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority and related in any manner to SOFR, the Term SOFR Reference Rate, or Term SOFR, or (d) the making or issuance by any Governmental Authority of any request, rule, guideline or directive, whether or not having the force of law; provided that notwithstanding anything in this Agreement to the contrary, (i) the ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇ Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines or directives concerning capital adequacy 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 shall, in each case, be deemed to be a “Change in Law,” regardless of the date enacted, adopted or issued.

 

“Code” means the Internal Revenue Code of 1986, as the same may be hereafter amended or modified.

 

“Collateral” means all of Borrower’s now owned or hereafter acquired right, title and interest in and to all property, including, without limitation, each of the following:

 

 

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“Complete” or “Completion” means the Construction Work and the Property shall satisfy the following conditions: (a) a permanent certificate (or certificates) of occupancy for the

 

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Construction Work has been issued and delivered to Lender; (b) Borrower has furnished Lender with final lien waivers with respect to the Construction Work and work related thereto; and

 

 

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(c) Borrower shall have delivered to Lender: (i) the final as built plans and specifications for the Construction Work; (ii) the licenses and permits that are required for the operation or occupancy of the Property shall have been unconditionally issued to Borrower; (iii) a certificate from Borrower stating that: (A) the Construction Work has been completed in a good and workmanlike manner, (B) the Property as so completed complies with all applicable Legal Requirements; (C) no written notices from any Governmental Authority of any claimed violations of applicable Legal Requirements arising from the development or operation of the Property which have not been cured were served upon Borrower or (to Borrower’s knowledge) any contractor or subcontractor, and (D) no circumstances exist which are reasonably likely to give rise to the issuance of any such notice of claimed violation; and (iv) a certificate (in form and substance reasonably acceptable to Lender) from Borrower stating that each such Person has been paid in full, for all Construction Work performed and/or materials furnished by such party, such Officer’s Certificate to be accompanied by lien waivers or other evidence of payment satisfactory to Lender, (v) Lender shall have received a title search indicating that the Property is free from all liens, claims and other encumbrances not previously approved by Lender, (v) Lender shall have received such other evidence as Lender shall reasonably request that the Construction Work shall have been completed and (vi) Lender shall have received evidence reasonably satisfactory to Lender that Borrower is current in payment and otherwise in compliance with the terms of any insurance financing arrangements. Wherever the word “completion” (or any derivations thereof) is used herein but not capitalized, it shall have the ordinary meaning given such term in light of the context in which it appears.

 

“Compliance Certificate” means a certificate in form and substance reasonably acceptable to Lender and signed by the chief financial officer of Canadian Parent (a) evidencing Debt Service Coverage Ratio for the immediately prior Fiscal Quarter, (b) listing all Permitted Indebtedness or Permitted Parent Indebtedness consisting of intercompany loans to any Loan Parties and certifying that the same constitute Permitted Indebtedness or Permitted Parent Indebtedness, as applicable and (c) including an acknowledgment and agreement signed by the holder(s) of all such Indebtedness that (i) such Indebtedness shall be subordinate to the Loan, and that no payments of same shall be accepted so long as any portion of the Obligations remain outstanding, (ii) such Indebtedness shall be subject to the provisions of Section 9.6 of this Agreement and (iii) such acknowledgment and agreement may be enforced by Lender against such holder.

 

“Compliance Notice” is defined in Section 12.27(b)(ii). “Condemnation Proceeds” is defined in Section 8.6(a)

“Conforming Changes” means, with respect to either the use or administration of Term SOFR or the use, administration, adoption, or implementation of any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Base Rate,” the definition of “Business Day,” the definition of “U.S. Government Securities Business Day,” the definition of “Interest Period,” or any similar or analogous definition (or the addition of a concept of “interest period,” timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment notices, the applicability and length of lookback periods, and other technical, administrative or operational matters) that ▇▇▇▇▇▇ decides may be appropriate to reflect the adoption and implementation of such Benchmark

 

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Replacement and to permit the use and administration thereof by Lender in a manner substantially consistent with market practice (or, if ▇▇▇▇▇▇ decides that adoption of any portion of such market practice is not administratively feasible or if Lender determines that no market practice for the administration of such Benchmark Replacement exists, in such other manner of administration as ▇▇▇▇▇▇ decides is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).

 

“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

 

“Construction Costs” means the costs incurred by Borrower in connection with the construction of the Construction Work.

 

“Construction Reserve Account” is defined in Section 7.2. “Construction Reserve Funds” is defined in Section 2.1. “Construction Work” is defined in Section 7.1.

“Control” means the possession, directly or indirectly, of the power to cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, family relationship or otherwise; and the terms “controls”, “controlling” and “controlled” have the meanings correlative to the foregoing.

 

“Control Agreement” means a control agreement, restricted account agreement or similar agreement or document, in each case in form and substance reasonably satisfactory to Lender and entered into for the purpose of perfecting a security interest in the Blocked Account.

 

“Cookies License” means (a) that certain Retail License Agreement dated as of August 18, 2021 among Cookies Creative Consulting & Promotions, Inc. and TerrAscend NJ, as amended from time to time, and (b) that certain Amended and Restated License and Packaging Agreement dated as of February 23, 2022 among Creative Consulting & Promotions, Inc., 1L Botanicals LLC and TerrAscend NJ, as amended from time to time (including, without limitation, pursuant to that First Amendment to Amended and Restated License and Packaging Agreement effective July 15, 2022 among Creative Consulting & Promotions, Inc., 1L Botanicals LLC and TerrAscend NJ).

 

“Damages” means, with respect to any Person, any and all liabilities, obligations, losses, demands, damages, penalties, assessments, actions, causes of action, judgments, proceedings, suits, claims, costs, expenses and disbursements of any kind or nature whatsoever (including reasonable attorneys’ fees and other costs of defense and/or enforcement whether or not suit is brought), fines, charges, fees, settlement costs and disbursements imposed on, incurred by or asserted against such party, whether based on any federal, state, local or foreign laws, statutes, rules or regulations (including securities and commercial laws, statutes, rules or regulations and Hazardous Materials Laws), on common law or equitable cause or on contract or otherwise; provided, however, that “Damages” shall not include special, consequential or punitive damages,

 

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except to the extent imposed upon Lender by one or more third parties.

 

“Debt” means the outstanding principal balance of the Loan, together with all interest accrued and unpaid thereon and all other sums due from any Loan Party under the Loan Documents.

 

“Debt Service” as of any date, means the interest due on the outstanding principal balance of the Loan, as of such date, at the Applicable Interest Rate in effect as of such date, together with the principal reduction payment, if any, required on such date pursuant to this Agreement.

 

“Debt Service Coverage Ratio” means for Borrower, determined on a consolidated basis for the relevant period, the ratio of Adjusted EBITDA to Debt Service for such period.

 

“Default” means a condition or event which has occurred and which, after notice or lapse of time, or both, would constitute an Event of Default if that condition or event were not cured within any applicable cure period.

 

“Default Interest Rate” means a rate per annum equal to the lesser of (i) Adjusted Term SOFR plus eight percent (8%), or (ii) if such increased rate of interest may not be collected under applicable law, then at the maximum rate of interest, if any, which may be collected from Borrower under applicable law.

 

“DSCR Period” means any period during which the Debt Service Coverage Ratio has declined below 1.75:1.00 as demonstrated by the Compliance Certificate delivered together with financial statements pursuant to Section 5.1(e), subject to review and approval by ▇▇▇▇▇▇. A DSCR Period shall end (i) upon the Debt Service Coverage Ratio being greater than or equal to

1.75:1.00 for each of two (2) consecutive Fiscal Quarters as demonstrated by the Compliance Certificate delivered together with the financial statements pursuant to Section 5.1(e), subject to review and approval by ▇▇▇▇▇▇, or (ii) upon the prepayment of principal to Lender by Borrower causing the Debt Service Coverage Ratio as of the last day of each of two (2) consecutive Fiscal Quarters, calculated on a pro forma basis for each such Fiscal Quarter after giving effect to such prepayment, to be greater than or equal to 1.75:1.00.

 

“DSCR Required Payment Amount” means the difference between (a) the Adjusted EBITDA of Borrower that would be required to cause the DSCR to equal 1.75:1.00 and

(b) the actual Adjusted EBITDA of Borrower, in each case as of the end of the Fiscal Quarter ending immediately prior to the commencement of the DSCR Period or the immediately preceding Fiscal Quarter during the DSCR Period, as applicable.

 

“Effective Date” is defined in Section 2.5.

 

“Embargoed Person” means any Person subject to trade restrictions under any Federal Trade Embargo.

 

“Environmental Indemnity Agreement” means that certain Environmental

 

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Indemnity Agreement executed and delivered by the Loan Parties collectively and jointly and severally in favor of Lender pursuant to this Agreement, as the same may be amended, restated, modified or supplemented from time to time.

 

“Equity Interests” means (a) partnership interests (general or limited) in a partnership; (b) membership interests in a limited liability company; (c) shares or stock interests in a corporation; and (d) the beneficial ownership interests in a trust.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended or re-codified from time to time, and the regulations promulgated thereunder.

 

“ERISA Affiliate” is defined in Section 4.18.

“Event of Default” means each of those events so designated in Section 9.1. “Excluded Assets” means (a) any asset or property in which Lender is prohibited

from taking, or any Local Loan Party is prohibited from granting, a security interest in or to pursuant to the express provisions of any State Cannabis Law or any other Legal Requirement; provided, however, “Excluded Assets” shall not include (i) such assets or property to the extent any such prohibition would be rendered ineffective under applicable law or principles of equity, and (ii) the proceeds of any such assets or property (including proceeds from the sale, license, lease or other disposition thereof), and provided further, upon such prohibition ceasing to exist, including pursuant to an approval or consent from the applicable Governmental Authority, such assets and property shall automatically no longer be considered “Excluded Assets” and shall become part of the Collateral, (b) rights held under a license that are not assignable by their terms without the consent of the licensor thereof (but only to the extent such restriction on assignment is effective under Section 9-406, 9-407, 9-408 or 9-409 of the Code (or any successor provision or provisions) of any relevant jurisdiction or any other applicable law (including the Bankruptcy Code) or principles of equity); (c) any interest of a Borrower in respect of any equipment lease permitted hereunder if such Borrower is prohibited by the terms of such lease from granting a security interest in respect thereof or under which such an assignment or Lien would cause a default to occur under such lease; provided, however, that upon termination of such prohibition, such interest shall immediately become Collateral without any action by such Local Loan Party or Lender.

 

“Excluded Taxes” means any of the following Taxes imposed on or with respect to a Lender or any other recipient of payments to be made by or on account of any obligation of any Loan Party hereunder or under any other Loan Document, or required to be withheld or deducted from a payment to the Lender or any other recipient of payments to be made by or on account of any obligation of any Loan Party hereunder or under any other Loan Document:

(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 Lender or other recipient being organized under the laws of, or having its principal office or its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in the Loan or Obligation pursuant to a law in effect on the date on which (i) such Lender acquires such interest

 

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in the Loan or Obligation or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 2.15, 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 Lender’s or other recipient’s failure to comply with Section 2.15(e), (d) Canadian federal withholding Taxes imposed on a payment made to a Lender or other recipient solely as a result of: (i) such Lender or other recipient not dealing at arm’s length (for the purposes of the Tax Act) with Canadian Parent at the time of such payment, (ii) such Lender or other recipient being a “specified non-resident shareholder” (as defined in subsection 18(5) of the Tax Act) of Canadian Parent or not dealing at arm’s length (for the purposes of the Tax Act) with a “specified shareholder” of Canadian Parent, or (iii) Canadian Parent being a “specified entity” (as defined in subsection 18.4(1) of the proposals to amend the Tax Act released by the Minister of Finance (Canada) on April 29, 2022) in respect of the Lender or other recipient, except where the non-arm’s length relationship arises, such Lender or other recipient is a “specified non-resident shareholder” of Canadian Parent or is not dealing at arm’s length with a “specified shareholder” of Canadian Parent, or Canadian Parent is a “specified entity” in respect of the Lender or other recipient, as applicable, in connection with or as a result of the Lender or other recipient having become a party to, received or perfected a security interest under or received or enforced any rights under, any Loan Document and (e) any withholding Taxes imposed under FATCA.

 

“Existing Lease” is defined in Section 4.15.

 

“Existing Parent Indebtedness” means the Indebtedness existing on the Effective Date and disclosed in Schedule 6.7.

 

“Exit Fee” is defined in Section 2.3(b).

 

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any agreement entered into pursuant to Section 1471(b)(1) of the Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities and implementing such Sections of the Code.

 

“Federal Cannabis Law” shall mean any federal Legal Requirement as such relates, 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.

 

“Federal Funds Rate” means, for any period, a fluctuating interest rate per annum

 

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equal to, for each day during such period, the weighted average of the rates on overnight Federal

 

 

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funds transactions with members of the Federal Reserve System, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by Lender from three Federal funds brokers of recognized standing selected by it (and, if any such rate is below zero, then the rate determined pursuant to this definition shall be deemed to be zero).

 

“Federal Trade Embargo” means any federal law imposing trade restrictions, or economic or financial sanctions, including (i) the Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended), (ii) the International Emergency Economic Powers Act (50 U.S.C. §§ 1701 et seq., as amended), (iii) Executive Order 13224, (iv) the PATRIOT Act, and

(v) any enabling legislation or executive order relating to the foregoing.

 

“Financing Statements” means (i) any financing statement describing Collateral to perfect Lender’s Lien in any of the Collateral, including, without limitation those describing the Collateral as “all personal property” or “all assets” or words of similar effect, and (ii) any amendment or continuation of any filed financing statement, and listing the applicable Local Loan Party as debtor and Lender as secured party.

 

“Fiscal Quarter” means each three (3)-month period ending on March 31, June 30, September 30 and December 31 of each year or such other fiscal quarter as the applicable Loan Party may select from time to time with the prior written consent of ▇▇▇▇▇▇, such consent not to be unreasonably withheld.

 

“Fiscal Year” means the twelve (12)-month period ending on December 31 of each year or such other fiscal year as the applicable Loan Party may select from time to time with the prior written consent of Lender, such consent not to be unreasonably withheld.

“Floor” means a rate of interest equal to two and one-half percent (2.5%). “Foreign Lender” means (a) if Borrower is a U.S. Person, a Lender that is not a

U.S. Person, and (b) if Borrower is not a U.S. Person, a Lender that is resident or organized under the laws of a jurisdiction other than that in which Borrower is resident for tax purposes.

 

“GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accounts and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession, which are applicable to the circumstances as of the date of determination

 

“Government Approval” means, with respect to any Person, any action, authorization, consent, approval, license, lease, ruling, permit, privilege, franchise, variance, concession, grant, certification, exemption, filing or registration by or from any Governmental Authority, and any other contractual obligation with, any Governmental Authority, including all licenses, permits, allocations, authorizations, approvals and certificates obtained by or in the name

 

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of, or assigned to, any Loan Party and used in connection with the ownership, construction, operation, use or occupancy of the Property or its operations, including building permits, zoning and planning approvals, business licenses, licenses to conduct business, certificates of occupancy and all such other permits, licenses and rights 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.

 

“Governmental Authority” means any national, federal, state, regional or local government, or any other political subdivision of any of the foregoing, in each case with jurisdiction over the applicable Loan Party, the Property, or any Person with jurisdiction over the applicable Loan Party or the Property exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.

 

“Government Lists” means (a) the Specially Designated Nationals and Blocked Persons Lists maintained by Office of Foreign Assets Control (“OFAC”); (b) any other list of terrorists, terrorist organizations or narcotics traffickers maintained pursuant to any of the Rules and Regulations of OFAC that Lender notified Borrower in writing is now included in Government Lists; or (c) any similar lists maintained by the United States Department of State, the United States Department of Commerce or any other government authority or pursuant to any Executive Order of the President of the United States of America that ▇▇▇▇▇▇ notified Borrower in writing is now included in Government Lists.

 

“Guaranteed Obligations” is defined in Section 10.1.

 

“Guarantor” is defined in the opening paragraph of this Agreement, together with each other Person that may be joined hereto from time to time as a Guarantor.

 

“Guarantor Payment” is defined in Section 10.10(a).

 

“Harmony Assets” means the assets comprised of the proposed cultivation and processing site located at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.

 

“Hazardous Materials” means oil; flammable explosives; asbestos; urea formaldehyde insulation; radioactive materials; fungi or bacterial matter which reproduces through the release of spores or the splitting of cells, including, without limitation, mold, mildew, and viruses, whether or not living; any substance that is then defined or listed in, or otherwise classified or regulated pursuant to, any Hazardous Materials Laws as a “hazardous substance”, “hazardous material”, “hazardous waste,” “infectious waste,” “toxic substance,” “toxic pollutant,” “pollutant,” “contaminant” or any other formulation intended to define, list, or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, toxicity, reproductive toxicity, or “EP toxicity”; gasoline and any other petroleum and drilling fluids, produced waters, and other wastes associated with the exploration, development or production of crude oil, natural gas, or geothermal resources; and/or petroleum products, polychlorinated biphenyls, per- and polyflouroalkyl substances (PFAS), urea formaldehyde, radon gas, radioactive matter, lead and lead based paint, medical waste, fugitive dust emissions, and toxic mold and other harmful biological agents. “Hazardous Materials” shall not include commercially reasonable

 

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amounts of such materials used in the ordinary course of operation of the Property which are used

 

 

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and stored at all times in accordance with all then applicable Hazardous Materials Laws.

 

“Hazardous Materials Laws” collectively means and includes all present and future federal, state and local laws and any amendments (whether common law, statute, rule, order, regulation or otherwise), permits, and other requirements or guidelines of governmental authorities applicable to the Property and relating to health and safety, the environment and environmental conditions or to any Hazardous Materials or any activity relating thereto (including, without limitation, CERCLA, the Federal Resource Conservation and Recovery Act of 1976, 42 U.S.C.

§ 6901, et seq., the Hazardous Materials Transportation Act, 49 U.S.C. § 5101, et seq., the Federal Water Pollution Control Act, 33 U.S.C. § 1251, et seq., the Clean Air Act, 42 U.S.C. § 7401, et seq., the Toxic Substances Control Act, 15 U.S.C. § 2601 2692, the California Waste Quality Improvement Act and California Health and Safety Code §§ 25117 and 25316, the ▇▇▇▇▇▇▇▇▇- ▇▇▇▇▇▇▇-▇▇▇▇▇▇ Hazardous Substance Account Act, California Health and Safety Code § 25300 et seq., the Hazardous Waste Control Act, California Health and Safety Code § 25100, et seq., the Medical Waste Management Act, California Health and Safety Code § 25105, et seq., the ▇▇▇▇▇▇- Cologne Water Quality Control Act, California Water Code § 13000, et seq., the Safe Drinking Water and Toxic Enforcement Act of 1986, California Health and Safety Code § 25219.5- 25249.13, the Underground Storage of Hazardous Substances Act, California Health and Safety Code § 25280-25299.8, the Safe Drinking Water Act, 42 U.S.C. § 300f 300j, the Emergency Planning and Community Right To Know Act, 42 U.S.C. § 11001, et seq., the Occupational Safety and Health Act, 29 U.S.C. § 651 et seq., the Federal Insecticide, Fungicide and Rodenticide Act, the Endangered Species Act, the National Environmental Policy Act, the River and Harbors Appropriation Act, and any so called “Super Fund” or “Super Lien” law, environmental laws administered by the United States Environmental Protection Agency, any similar state and local laws, regulations and guidelines, as well as the regulations and guidelines of the Department of Housing and Urban Development, the Occupational Safety and Health Administration, the California Department of Toxic Substances Control and any Regional Water Quality Control Board with jurisdiction and all amendments thereto and all regulations, orders, decisions, and decrees now or hereafter promulgated thereunder).

 

“Hazardous Materials Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of any Loan Party directly or indirectly resulting from or based upon (a) any violation of any Hazardous Materials Laws, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) any exposure to any Hazardous Materials,

(d) the Release or threatened Release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

 

“Improvements” means all improvements or fixtures now or hereafter located on any Real Property.

 

“Indebtedness” of a Person, at a particular date, shall mean the sum (without duplication) at such date of (a) all indebtedness or liability of such Person (including, without limitation, amounts for borrowed money and indebtedness in the form of mezzanine debt or preferred equity); (b) obligations evidenced by bonds, debentures, notes, or other similar

 

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instruments; (c) obligations for the deferred purchase price of property or services (including trade

 

 

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obligations); (d) obligations under letters of credit; (e) obligations under acceptance facilities;

(f) all guaranties, endorsements (other than for collection or deposit in the ordinary course of business) and other contingent obligations to purchase, to provide funds for payment, to supply funds, to invest in any Person or entity, or otherwise to assure a creditor against loss;

(g) obligations under PACE Loans, and (h) obligations secured by any Liens, whether or not the obligations have been assumed (other than the Permitted Encumbrances).

 

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

 

“Information Certificate” means the information certificate dated on or about the date hereof delivered to Lender by each Loan Party.

 

“Insurance Premiums” means all premiums payable in respect of the insurance policies required hereunder.

 

“Insurance Proceeds” is defined in Section 8.6(a).

 

“Interest Period” means (a) the period from the date of the initial advance under the Note through last day of the calendar month in which the initial advance occurs, and (b) each period thereafter from the first (1st) day of each calendar month through the last day of each calendar month; except that the Interest Period, if any, that would otherwise commence before and end after the Maturity Date shall end on the Maturity Date. Notwithstanding the foregoing, if ▇▇▇▇▇▇ shall have elected to change the date on which scheduled payments under the Loan are due, as described in the definition of “Payment Date”, from and after the effective date of such election, each Interest Period shall commence on the day of each month in which occurs such changed Payment Date and end on the day immediately preceding the following Payment Date, as so changed.

 

“Investor” and “Investors” have the meaning given to such term in Section 11.4. “IRS” means the United States Internal Revenue Service.

“KingSett Loan” means that certain $7,250,000 1st mortgage term loan made pursuant to that certain commitment letter dated as of June 12, 2020 among TerrAscend Canada Inc. (a Subsidiary of the Canadian Parent), as borrower, Canadian Parent, as guarantor, and KingSett Mortgage Corporation, as lender in respect of an industrial facility located as ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ (the “Mississauga Property”) and secured by (a) a registered

$7,250,000 first priority mortgage/charge registered on title to the Mississauga Property, (b) a guarantee from the Canadian Parent in favor of KingSett Mortgage Corporation pursuant to that certain Guarantee dated June 19, 2020 (the “KingSett Guaranty”), and (c) a general security agreement by Canadian Parent in favor KingSett Mortgage Corporation (a copy of which cannot be located by Canadian Parent as at the Effective Date).

 

“Late Payment Charge” is defined in Section 2.7(c).

 

 

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“Lease” means any lease and other agreements or arrangements affecting the use or occupancy of all or any portion of the Property now in effect or hereafter entered into (including all lettings, subleases, licenses, concessions, tenancies and other occupancy agreements covering or encumbering all or any portion of the Property), together with any guarantee, supplement, amendment, modification, extension and/or renewal of the same.

 

“Legal Requirements” means (a) all statutes, laws (including, without limitation, Hazardous Materials Laws and State Cannabis Laws), rules, rule of common law, orders, regulations, ordinances, judgments, orders, decrees and injunctions of Governmental Authorities, approval, concession, grant, franchise, license, agreement, directive, guideline, policy, requirement, or other governmental restriction or any similar form of decision of, or determination by, or any interpretation or administration of any of the foregoing by, any Governmental Authority, whether now or hereinafter in effect and, in each case, as amended (including any thereof pertaining to land use, zoning and building ordinances and codes applicable to the Property) affecting any Loan Party, the Loan Documents, the Property or any other Collateral, or any part thereof, and all permits and regulations relating thereto, (b) all covenants, agreements, restrictions and encumbrances contained in any instruments, either of record or known to any Loan Party, at any time in force affecting the Property, the other Collateral, or any part thereof, (c) terms of any insurance Policy maintained by or on behalf of any Loan Party, and (d) the organizational documents of each Loan Party, excluding (i) Federal Cannabis Law to the extent its then effective provisions forbid or restrict the conduct of Cannabis Activities and (ii) any other U.S. federal law which by extension would be violated solely because a Cannabis Activity violates the then effective provisions of any Federal Cannabis Law.

 

“Lender” individually and collectively means ▇▇▇▇▇▇▇, and each of its successors

and/or assigns.

 

“Liabilities and Costs” means any losses, actual damages, costs, fees, expenses,

claims, suits, judgments, awards, liabilities (including strict liabilities), obligations, debts, diminutions in value, fines, penalties, charges, costs of Remediation (whether or not performed voluntarily), amounts paid in settlement, foreseeable and unforeseeable consequential damages, litigation costs, reasonable attorneys’ fees, engineers’ fees, environmental consultants’ fees, and investigation costs (including costs for sampling, testing and analysis of soil, water, air, building materials, and other materials and substances whether solid, liquid or gas), of whatever kind or nature, and whether or not incurred in connection with any judicial or administrative proceedings, actions, claims, suits, judgments or awards.

 

“Lien” means any mortgage, deed of trust, deed to secure debt, lien, pledge, encumbrance, easement, restrictive covenant, hypothecation, assignment, security interest, PACE Loan, conditional sale or other title retention agreement, financing lease having substantially the same economic effect as any of the foregoing, or financing statement or similar instrument.

 

“Loan” is defined in the Recitals.

 

“Loan Amount” is defined in the Recitals.

 

 

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“Loan Documents” means, collectively, this Agreement and all other documents,

 

 

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agreements, instruments and certificates now or hereafter evidencing, securing or delivered to Lender in connection with the Loan and the Obligations, including without limitation the documents listed on Schedule 1.1 attached hereto, as each may be (and each of the defined terms shall refer to such documents as they may be) amended, restated, or otherwise modified from time to time.

 

“Loan Origination Fee” is defined in Section 2.3(a). “Loan Guaranty” means Article X of this Agreement.

“Local Loan Party” means each Loan Party other than Parent. “Loan Party” means each Borrower and Guarantor.

“Lodi Assets” means the assets comprised of the alternative treatment center located at ▇▇▇ ▇▇-▇▇, ▇▇▇▇, ▇▇ ▇▇▇▇▇ which has been provided authority to operate under the authority of the New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act, P.L.2021, C.16 (C.24:6I-31 ET AL.), and provides medical and adult-use cannabis products, cannabis support and services, cannabis accessories, and the sale of other non- cannabis products to certain permitted individuals.

 

“Maplewood Assets” means the assets comprised of the alternative treatment center located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ which has been provided authority to operate under the authority of the New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act, P.L.2021, C.16 (C.24:6I-31 ET AL.), and provides medical and adult-use cannabis products, cannabis support and services, cannabis accessories, and the sale of other non-cannabis products to certain permitted individuals, including, without limitation the Maplewood Lease.

 

“Maplewood Lease” means that certain Lease Agreement dated as of July 31, 2020 by and between 5 ▇▇▇▇▇ LLC, as landlord and TerrAscend NJ, as tenant in respect of premises located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Maplewood Amendment to Maplewood Lease dated August 26, 2022.

 

“Material Adverse Effect” means, as applicable, a material adverse effect upon

 

“Material Contract” means any license, agreement or document of any Loan Party the loss or termination (other than in accordance with the terms of such license or agreement) of which would reasonably be expected to have a Material Adverse Effect, provided that the documents and agreements evidencing or securing the Permitted Parent Indebtedness and the

 

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Permitted Indebtedness shall not be deemed to be Material Contracts. “Maturity Date” means October 11, 2027.

“MD Opco” is defined in the opening paragraph of this Agreement “MD Opco 1” is defined in the opening paragraph of this Agreement “MD Opco 2” is defined in the opening paragraph of this Agreement

“MD Operating Lease” means that certain lease dated as of September 27, 2022 between MD Propco, as lessor, and MD Opco 1 and MD Opco 2, as co-lessees.

 

“MD Propco” is defined in the opening paragraph of this Agreement.

 

“MD Real Property means that certain parcel of real property located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, as more particularly described in the Security Instrument, and all appurtenances thereto.

 

“Members” means the direct or indirect holders of Equity Interests in Borrower. “Minimum Interest Payment” is defined in Section 2.10.

“Net Income” means, for any period, the consolidated net income (or loss) of Borrower and its Subsidiaries on a consolidated basis; provided that there shall be excluded (a) the income (or deficit) of any Person accrued prior to the date it becomes a Subsidiary of Borrower or is merged into or consolidated with Borrower or any of its Subsidiaries, (b) the income (or deficit) of any Person (other than a Subsidiary of Borrower) in which Borrower or any of its Subsidiaries has an ownership interest, except to the extent that any such income is actually received by Borrower or such Subsidiary in the form of dividends or similar distributions and (c) the undistributed earnings of any Subsidiary of Borrower to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary is not at the time permitted by the terms of any contractual obligation (other than under any Loan Document) or Legal Requirement applicable to such Subsidiary.

 

“Net Restoration Proceeds” is defined in Section 8.6(a). “NJ Loan Parties” means TerrAscend NJ and NJ Propco.

“NJ Propco” means an entity formed in New Jersey for the purpose of the NJ Real

Property.

 

“NJ Operating Lease” means upon consummation of the Permitted

Reorganization, that certain Lease between NJ Propco, as lessor, and TerrAscend NJ, as lessee.

 

“NJ Partners” means BWH NJ LLC, a New Jersey limited liability company and Blue Marble Ventures LLC, a New Jersey limited liability company.

 

 

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“NJ Real Property” that (a) certain parcel of real property located at ▇▇▇/▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, and (b) that certain parcel of real property located at ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, each as more particularly described in the Security Instrument, and all appurtenances thereto.

 

“NJ Subordination Agreement” means that certain Subordination and Intercreditor Agreement among Lender, NJ Partners and TerrAscend NJ dated as of the Effective Date, as amended, restated, supplemented or modified from time.

 

“Note” means each Secured Promissory Note by Borrower to Lender, as may be executed from time to time in connection herewith, together with all supplements, schedules, and exhibits thereto, as amended, restated, supplemented or modified from time to time.

 

“Obligated Party” is defined in Section 10.2.

 

“Obligations” means collectively, the obligations for the payment of the Debt and the performance of all obligations of the Loan Parties contained in the Loan Documents, including but not limited to all unpaid principal of and accrued and unpaid interest on the Loan, all accrued and unpaid fees (including, without limitation, any Exit Fee or Minimum Interest Payment) and all expenses, reimbursements, indemnities and other obligations and indebtedness (including interest and fees accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), obligations and liabilities of any Loan Party to Lender or any indemnified party, individually or collectively, existing on the Effective Date or arising thereafter, direct or indirect, joint or several, absolute or contingent, matured or unmatured, liquidated or unliquidated, secured or unsecured, arising by contract, operation of law or otherwise, arising or incurred under this Agreement or any of the other Loan Documents or in respect of any of the Loans made or other instruments at any time evidencing any thereof.

 

“OFAC” is defined in the definition of “Government Lists”. “Opco” is defined in the opening paragraph of this Agreement.

“Operating Leases” means the MD Operating Leases and the NJ Operating

Leases.

 

“Other Connection Taxes” means, with respect to any Lender or other recipient

of a payment under this Agreement or any other Loan Document, Taxes imposed as a result of a present or former connection between such Lender and the jurisdiction imposing such Tax (other than connections arising from such Lender or other 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

 

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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.

 

“PACE Loan” means any (a) ”Property-Assessed Clean Energy loan,” or (b) other indebtedness, without regard to the name given to such indebtedness, that is (i) incurred for improvements to the Property for the purpose of increasing energy efficiency, increasing use of renewable energy sources, resource conservation or a combination of the foregoing, and (ii) repaid through multi-year assessments against the Property.

 

“Participant Register” is defined in Section 11.3.

 

“Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, as the same may be amended from time to time, and corresponding provisions of future Legal Requirements.

 

“Patriot Act Offense” is defined in Section 4.18(b).

 

“Payment Date” means the first (1st) Business Day of the first calendar month following the Effective Date, and the first (1st) Business Day of each calendar month thereafter until the Maturity Date, provided that, if the Loan is funded on a date that is not the first day of a calendar month, then ▇▇▇▇▇▇▇▇’s first monthly interest payment shall be on the first (1st) day of the second (2nd) calendar month following the Effective Date and Borrower shall pay interest for the month in which the closing of the Loan occurs at the closing of the Loan on the Effective Date.

 

“Pelorus” individually and collectively means Pelorus Fund REIT, LLC, a Delaware limited liability company, and its successors and/or assigns.

 

“Permitted Contest” means legal proceedings to contest the validity or application of any Legal Requirements, or the amount of any Property Taxes or other Lien, provided that such proceedings (a) are permitted by law, (b) are conducted in good faith and with due diligence at the expense of the applicable Loan Party, (c) Lender is given prior written notice of any such proposed contest if such contest relates to an amount of $250,000 or more, (d) in the case of any Property Taxes or any other Lien, such proceedings shall suspend the collection thereof from the Collateral;

(e) neither the Collateral nor any part thereof or interest therein will be sold, forfeited or lost if the Loan Parties pay the amount or satisfy the condition being contested, and the Loan Parties do so if the Loan Parties fail to prevail in such contest; (f) Lender would not, by virtue of such permitted contest, reasonably be expected to be exposed to any risk of civil or criminal liability, and neither the Collateral nor any part thereof or any interest therein would be subject to the imposition of any Lien as a result of the failure to comply with any Legal Requirement of such proceeding; (g) the Loan Party has maintained adequate reserves with respect thereto; (h) such contest shall not affect the ownership, use or occupancy of the Property; and (i) such Loan Party shall, upon written request by ▇▇▇▇▇▇, give Lender prompt notice of the status of such proceedings and/or confirmation of the continuing satisfaction of the conditions set forth in the foregoing clauses (a) through (h).

 

 

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“Permitted Disposal” means the series of transactions in which (i) TerrAscend NJ

 

 

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contributes its interest in the Lodi Assets to a wholly-owned subsidiary of the Canadian Parent, and (ii) TerrAscend NJ contributes its interest in the Maplewood Assets to a wholly-owned subsidiary of the Canadian Parent, provided that the Permitted Disposal Condition has been satisfied.

 

“Permitted Disposal Condition” means, at the time of the Permitted Disposal, the revenue and Adjusted EBITDA of the NJ Loan Parties (excluding any income and expenses associated with the Lodi Assets and the Maplewood Assets) is greater than (a) the revenue and Adjusted EBITDA of the NJ Loan Parties (excluding any income and expenses associated with the Lodi Assets and the Maplewood Assets) as of the end of the month immediately preceding the month in which the proposed Permitted Disposal is to occur and (b) Two Million Eight Hundred Thousand and 00/100 Dollars ($2,800,000.00), as evidenced by a certificate executed by the applicable Loan Party, certifying the Permitted Disposal Condition has been satisfied.

 

“Permitted Encumbrances” means, with respect to the Collateral, collectively,

(a) the Liens created by the Loan Documents, (b) all Liens and other matters disclosed in the Title Policy, (c) Liens, if any, for Taxes imposed by any Governmental Authority not yet delinquent or which are contested pursuant to a Permitted Contest, (d) Liens which are carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s, constructions or other like liens (or claims of such liens) or stop notices (or claims of stop notices) which are contested or discharged pursuant to a Permitted Contest, (e) Liens or claims of Lien (which are not mechanic’s liens or stop notices) which are contested or discharged pursuant to a Permitted Contest, (d) such governmental, public utility and private restrictions, covenants, reservations, easements, licenses or other agreements or similar encumbrances affecting real property that, in the aggregate, do not materially detract from the value of the property subject thereto or materially interfere with the ordinary conduct of business of the applicable Person, and any zoning or similar law or right reserved to or vested in any Governmental Authority to control or regulate the use of real property that does not materially interfere with the ordinary conduct of the business of Borrower and its Subsidiaries, (e) Liens securing the Existing Parent Indebtedness as described on Schedule 6.7 and any renewals or extensions thereof, provided that (i) the property covered thereby is not changed, (ii) the amount secured or benefited thereby is not increased except as contemplated by clause (b) of the definition of Permitted Indebtedness, (iii) the direct or contingent obligor with respect thereto has not changed, and (iv) any renewal or extension of the obligations secured or benefited thereby is permitted by clause (b) of the definition of Permitted Indebtedness,

(f) intentionally omitted, (g) Liens securing judgments for the payment of money, or orders, attachments, decrees or awards, in each case not constituting an Event of Default, (h) Liens (i) of a collecting bank arising under Section 4-210 of the Uniform Commercial Code on items in the course of collection and (ii) in favor of a banking institution arising as a matter of law encumbering deposits (including the right of setoff) that are customary in the banking industry, (i) any interest or title of a lessor, sublessor, licensor or sublicensor under leases or non-exclusive licenses permitted by this Agreement that are entered into in the ordinary course of business;

(j) intentionally omitted, (k) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods in the ordinary course of business; (l) Liens incurred in the ordinary course of business in connection with the purchase or shipping of goods or assets (or the related assets and proceeds thereof), which Liens are in favor of the seller or shipper of such goods or assets and only attach to such goods or

 

 

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assets, (m) Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into by any Loan Party in the ordinary course of business in accordance with the past practices of such Loan Party, (n) bankers’ Liens, rights of setoff and other similar Liens existing solely with respect to cash and Cash Equivalents on deposit in one or more accounts maintained by any Loan Party, in each case granted in the ordinary course of business in favor of the bank or banks with which such accounts are maintained, securing amounts owing to such bank with respect to cash management and operating account arrangements, including those involving pooled accounts, sweep accounts and netting arrangements and similar arrangements of the Loan Parties consisting of the right to apply the funds held therein to satisfy overdraft or similar obligations incurred in the ordinary course of business of such person; provided that, in no case shall any such Liens secure (either directly or indirectly) the repayment of any Indebtedness, and ▇▇▇▇▇ granted in the ordinary course of business by Borrower or any of its Subsidiaries to any bank with whom it maintains accounts to the extent required by the relevant bank’s (or custodian’s or trustee’s, as applicable) standard terms and conditions, in each case, which are within the general parameters customary in the banking industry, (o) Liens of a collecting bank arising in the ordinary course of business under Section 4- 208 of the UCC in effect in the relevant jurisdiction covering only the items being collected upon;

(n) (i) deposits of cash with the owner or lessor of premises leased or operated by Borrower or any of its Subsidiaries and (ii) cash collateral on deposit with banks or other financial institutions issuing letters of credit (or backstopping such letters of credit) or other equivalent bank guarantees issued naming as beneficiaries the owners or lessors of premises leased or operated by Borrower or any of its Subsidiaries, in each case, in the ordinary course of business of Borrower and such Subsidiaries to secure the performance of Borrower’s or such Subsidiary’s obligations under the terms of the lease for such premises, (o) statutory Liens incurred or pledges or deposits made in favor of a Governmental Authority to secure the performance of obligations of any Loan Party under Environmental Laws to which any assets of such Loan Party are subject, (p) Liens on the equipment that is the subject of Indebtedness permitted under clause (b) of the definition of Permitted Indebtedness to secure such Permitted Indebtedness and (q) the second priority mortgage Lien on the NJ Real Property in connection with the Permitted NJ Indebtedness.

 

“Permitted Indebtedness” means, in respect of the Local Loan Parties, (a) the Debt, (b) Indebtedness consisting of capitalized equipment lease obligations and purchase money Indebtedness, in each case incurred by any Loan Party or any of Subsidiary of a Loan Party to finance the expansion and construction of the Harmony Assets, provided that such Indebtedness does not exceed Eight Million and 00/100 Dollars in the aggregate and does not include any Lien on any Collateral; (c) Indebtedness in respect of performance bonds, bid bonds, appeal bonds, surety bonds and completion guarantees and similar obligations not in connection with money borrowed, in each case provided in the ordinary course of business, including those incurred to secure health, safety and environmental obligations in the ordinary course of business,

(d) Indebtedness resulting from a bank or other financial institution honoring a check, draft or similar instrument in the ordinary course of business; (i) Indebtedness consisting of (i) the financing of insurance premiums not in excess of twelve (12) months in advance or (ii) take or pay obligations contained in supply arrangements, in each case, in the ordinary course of business,

(e) intercompany loans owed by a Local Loan Party to any member of the TerrAscend Group, provided that each such intercompany loan is (i) unsecured, (ii) fully subordinate to the Loan, with no payments there under permitted while any portion of the Loan remains outstanding, and with

 

 

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the holder of such loan acknowledging such subordination in writing for the benefit of ▇▇▇▇▇▇, and

(iii) is subject to the terms of Section 9.6, with the holder of such loan acknowledging the same in writing for the benefit of ▇▇▇▇▇▇, (g) Indebtedness arising as a direct result of judgments, orders, awards or decrees against any Local Loan Party, in each case not constituting an Event of Default,

(f) unsecured Indebtedness representing any Taxes to the extent such Taxes are being contested by any Loan Party pursuant to a Permitted Contest, (g) unsecured Indebtedness to trade creditors incurred in the ordinary course of business not to exceed 2% of the Loan Amount in the aggregate and which are paid within ninety (90) days after the date incurred, provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms in the ordinary course of business and not in connection with the borrowing of money, (h) extensions, refinancings, modifications, amendments and restatements of any items of Permitted Indebtedness

(b) through (g) above, provided that (i) the principal amount thereof is not increased or the terms thereof are not modified to impose materially more burdensome terms upon the applicable Loan Party and (ii) such Indebtedness continues to satisfy the conditions to qualify as Permitted Indebtedness as described in clauses (b) through (g) above, (i) Indebtedness pursuant to the Success Fee Agreement, and (j) the Permitted NJ Subordinate Debt.

 

“Permitted NJ Subordinate Indebtedness” means the Indebtedness of TerrAscend NJ of $25,000,000 pursuant to that certain promissory note dated as of the Effective Date among TerrAscend NJ, Canadian Parent and NJ Partners, which Indebtedness is subject to the NJ Subordination Agreement.

 

“Permitted Parent Indebtedness” means, in respect of Canadian Parent and American Parent, (a) the Debt, (b) the Existing Parent Indebtedness, provided that (i) Canadian Parent’s or American Parent’s, as applicable, guaranteed obligations in respect of such Indebtedness is not increased except by an amount equal to any commitments existing as of the Effective Date and unutilized thereunder and (ii) to the extent such Indebtedness is secured, such Indebtedness shall not be secured by any assets other than those assets now securing such Indebtedness as described on Schedule 6.7, (c) guarantees in respect of any Indebtedness incurred by any Subsidiary of a Parent formed or acquired after the Effective Date provided that (i) the debt service coverage ratio of such Indebtedness, as determined with respect to the Adjusted EBITDA of the Subsidiaries that are the primary borrowers of such Indebtedness, is not less than 1.75:1.00, such guarantees are unsecured and the lender thereunder is given no greater priority in payment than Lender has with respect to the Loan, and (ii) Lender is given prior written notice of such Indebtedness, (d) guarantees of Indebtedness secured solely by the Maplewood Assets and/or the Lodi Assets following a Permitted Disposal, provided that (i) the amount of such Indebtedness that is guaranteed by Parent does not exceed the aggregate amount of any reduction of the principal amount of the Existing Parent Indebtedness after the Effective Date, (ii) such guarantees are unsecured and the lender thereunder is given no greater priority in payment than Lender has with respect to the Loan, and (iii) Lender is given prior written notice of such Indebtedness,

(e) obligations (contingent or otherwise) of Borrower or any Subsidiary existing or arising under any Swap Contract, provided that such obligations are (or were) entered into by such Person in the ordinary course of business for the purpose of mitigating risks associated with liabilities, commitments, investments, assets or property held or reasonably anticipated by such Person, or changes in the value of securities issued by such Person, and not for speculative purposes,

(f) Indebtedness in respect of performance bonds, bid bonds, appeal bonds, surety bonds and

 

 

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completion guarantees and similar obligations not in connection with money borrowed, in each case provided in the ordinary course of business, including those incurred to secure health, safety and environmental obligations in the ordinary course of business, (g) Indebtedness resulting from a bank or other financial institution honoring a check, draft or similar instrument in the ordinary course of business; (h) Indebtedness consisting of the financing of insurance premiums not in excess of twelve (12) months in advance, (i) Indebtedness in the form of unsecured credit card facilities maintained in connection with the business of the TerrAscend Group not exceeding One Million Dollars ($1,000,000), (j) intercompany loans owed by Canadian Parent or American Parent to any of their respective Subsidiaries (other than any Local Loan Party), provided that each such intercompany loan is (i) unsecured, (ii) fully subordinate to the Loan, with no payments there under permitted while any portion of the Loan remains outstanding, and with the holder of such loan acknowledging such subordination in writing for the benefit of Lender, and (iii) subject to the terms of Section 9.6, with the holder of such loan acknowledging the same in writing for the benefit of Lender, (k) Indebtedness arising as a direct result of judgments, orders, awards or decrees against Canadian Parent or American Parent, as applicable, in each case not constituting an Event of Default, (l) unsecured Indebtedness representing any Taxes to the extent such Taxes are being contested by Canadian Parent or American Parent pursuant to a Permitted Contest,

(m) Indebtedness constituting reimbursement obligations in respect of letters of credit and similar instruments issued for the account of Canadian Parent, American Parent or any of their respective Subsidiary, in an aggregate amount for all such Indebtedness not to exceed One Million and 00/100 Dollars ($1,000,000.00) at any one time outstanding, and (n) extensions, refinancings, modifications, amendments and restatements of any items of Permitted Indebtedness (b) through

(m) above, provided that (i) the principal amount thereof is not increased or the terms thereof are not modified to impose materially more burdensome terms upon the applicable Parent, (ii) such Indebtedness continues to satisfy the conditions to qualify as Permitted Indebtedness as described in clauses (b) through (l) above and (iii) Lender is given prior written notice of same.

 

“Permitted Reorganization” means the series of transactions in which (i) Well and Good, Inc., or TerrAscend NJ, as applicable, forms NJ Propco, (ii) TerrAscend NJ contributes its interest in the NJ Real Property to NJ Propco and (iii) NJ Propco leases the NJ Real Property to TerrAscend NJ pursuant to a lease in form and substance reasonably acceptable to Lender, provided that no such transactions shall be permitted hereunder unless the Permitted Reorganization Conditions have been satisfied within the timeframes specified therein.

 

“Permitted Reorganization Conditions” means that (a) immediately prior to the step contemplated by paragraph (ii) of the definition of “Permitted Reorganization”, NJ Propco joins this Agreement, the Note, the Security Instrument and such other Loan Documents as Lender deems necessary or appropriate as a Borrower pursuant to such joinders and/or modifications in form and substance acceptable to Lender, with Borrower paying all costs and expenses incurred by Lender in connection therewith and (b) simultaneously with the actions described in (a), at ▇▇▇▇▇▇▇▇’s expense, the Title Policy is endorsed in such a manner as will ensure that the Title Policy will remain in full force and effect with respect to the Security Instrument as so amended, and subject to no additional Liens or encumbrances.

 

“Person” means any individual, corporation, partnership, limited liability company, trust, unincorporated organization or other entity, and any Governmental Authority.

 

 

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“Pledge Agreement” means that certain Pledge Agreement executed and delivered by Well and Good Inc. and WDB Holdings MD, Inc. in favor of Lender pursuant to this Agreement, together with all supplements, schedules and exhibits thereto, as amended, amended and restated or otherwise modified from time to time.

“Policy” and “Policies” are defined in the introductory paragraph to Article V. “Post-Closing Obligations” means the obligations set forth on Schedule 6.24

hereto.

 

“Prohibited Person” means:

 

otherwise subject to the provisions of, Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, and relating to Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (the “Executive Order”);

 

 

 

 

 

 

 

 

above.

 

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“Property” means, collectively, the Real Property and any Improvements in respect thereof.

 

“Property Tax” means all real estate and personal property taxes, assessments, water rates or sewer rents or user fees, now or hereafter levied or assessed or imposed against the Property or part thereof.

 

“Rating Agencies” means any nationally recognized statistical rating organization to the extent that have been or will be engaged by Lender or its designees in connection with or in anticipation of a Secondary Market Transaction (each, individually, a “Rating Agency”).

 

“Real Property” means the NJ Real Property and MD Real Property. “Register” is defined in Section 11.2.

“Regulator” is defined in Section 12.27(b)(ii).

 

“Regulatory Change” means any change after the date of this Agreement in any Legal Requirements or the adoption or making after such date of any interpretations, directives or requests applying to lenders, including Lender, under any Legal Requirements relating to the conduct of lenders.

 

“Regulatory License” means any permit, license, certificate, authorization, approval, consent, permission, accreditation, qualification, registration, filing, exemption, waiver, variance, clearance, franchise, concession or other right required, issued, granted, given or otherwise made available by or under the authority of any Governmental Authority required to be held by Borrower, or that Borrower must have rights to use, to conduct its Cannabis Business or Support Business, as applicable, in compliance with State Cannabis Laws. For purposes of this definition only, neither the U.S. Federal government nor any agency thereof shall constitute a Governmental Authority.

 

“Relevant Governmental Body” means the Board of Governors or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Board of Governors or the Federal Reserve Bank of New York, or any successor thereto.

 

“Release” means with respect to Hazardous Materials, but is not limited to, any presence, release, deposit, discharge, emission, leaking, leaching, spilling, seeping, migrating, injecting, pumping, pouring, emptying, escaping, dumping, disposing or other movement of Hazardous Materials.

 

“Remediation” means, but is not limited to, any activity to (a) clean up, detoxify, decontaminate, disinfect, contain, treat, remove, respond to, correct, dispose of, transport, or otherwise remediate, prevent, cure or mitigate any Release of any Hazardous Materials; any action to comply with any Hazardous Materials Laws or with any permits issued pursuant thereto; or

(b) inspect, investigate, study, monitor, assess, audit, sample, test, or evaluate any actual, potential or threatened Release of Hazardous Materials.

 

 

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“Reserve Accounts” means the Blocked Account and the Construction Reserve

 

 

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Account.

 

“Restoration” is defined in Section 8.6(a). “Restoration Proceeds” is defined in Section 8.6(a).

“Restoration Proceeds Threshold” is defined in Section 8.6(a).

 

“Restricted Cannabis Activity” shall mean in connection with the Support

Business or Cannabis Business: (a) any activity that is not permitted under applicable State Cannabis Laws; (b) knowingly distributing and selling cannabis and related products to minors that is not approved under a State Cannabis Law; (c) payments to criminal enterprises, gangs, cartels and Persons subject to sanctions in violation of Legal Requirements; (d) non-compliance with anti-terrorism laws and other Legal Requirements relating to money-laundering; (e) diversion of cannabis and related products from states where it is legal under State Cannabis Law to other states in violation of Legal Requirements; (f) the commission, or making threats of violence and the use of firearms in violation of Legal Requirements; (g) growing cannabis and related products on federal lands in violation of Legal Requirements; (h) operating a Cannabis Business without the applicable Regulatory License; and (i) directly or indirectly, aiding, abetting or otherwise participating in a common enterprise with any Person or Persons in such activities; provided, however, that clauses (b) and (c) shall not include the conduct by Canadian Parent or any other member of the TerrAscend Group that is not a Loan Party of any portion of that Cannabis Business or Support Business to the extent (i) it is conducted outside of the United States of America in compliance in all material respects with all applicable foreign laws and (ii) the conduct of same (despite the fact that it is conducted outside of the United States of America) would not adversely affect any Regulatory License applicable to the Collateral or otherwise constitute a violation of applicable State Cannabis Laws by any Loan Party.

 

“Secondary Market Transaction” is defined in Section 11.1.

 

“Security Agreement” means that certain Security Agreement executed by Borrower in favor of ▇▇▇▇▇▇, as amended, restated, supplemented or modified from time.

 

“Security Instrument” means, individually and collectively, as the context may require, (a) that certain Fee and Leasehold Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing executed and delivered by MD ▇▇▇▇ and MD Propco in favor of Lender pursuant to this Agreement which encumbers all of MD Opco’s and MD Propco’s respective right, title and interest in and to MD Real Property, (a) that certain Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing executed and delivered by TerrAscend NJ in favor of Lender pursuant to this Agreement which encumbers all of TerrAscend NJ’s respective right, title and interest in and to NJ Real Property, as each of the same may be amended, restated, modified or supplemented from time to time.

 

“Servicer” is defined in Section 2.16.

 

“SOFR” means a rate equal to the secured overnight financing rate as administered by the SOFR Administrator.

 

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“SOFR Administrator” means the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate).

 

“SOFR Loan” means each portion of the Loan that bears interest at a rate determined by reference to Term SOFR (other than pursuant to clause (c) of the definition of “Base Rate”).

 

“Special Purpose Entity” is defined in Exhibit B.

 

“State” means the State of New Jersey, with reference to TerrAscend NJ, NJ Propco and/or any Property located in the state of New Jersey, and/or the State of Maryland, with reference to MD Opco, MD Propco and/or any Property located in the state of Maryland.

 

“State Cannabis Laws” shall mean any Legal Requirement enacted by any state or municipality of the United States which legalizes marijuana, cannabis and related products in some form and which implements regulatory and enforcement systems to control the cultivation, distribution, sale and possession of cannabis and related products that is applicable to Borrower, any Subsidiary of Borrower or, solely with respect to the definition of Change in Cannabis Law, Lender.

 

“Subordinated Debt” is defined in Section 10.6(a).

 

“Subordinated Indebtedness” of a Person means any Indebtedness of such Person, the payment of which is subordinated to payment of the Obligations pursuant to a subordination agreement in form and substance acceptable to Lender in its sole discretion.

 

“Subordinating Party” is defined in Section 10.6(a).

 

“Subsidiary” means, with respect to any Person (the “parent”) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with the Accounting Standard as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, or

(b) that is, as of such date, otherwise controlled, by the parent and/or by the parent and one or more subsidiaries of the parent.

 

“Success Fee Agreement” means that certain letter entitled Success Fee Payment dated August 30, 2018 by Well & Good, Inc., to ▇▇▇▇ ▇▇▇▇▇▇▇▇ as amended by (a) that certain First Amendment to Success Fee Letter Agreement, dated as of November 25, 2020, (b) that certain Second Amendment to Success Fee Letter Agreement, dated as of July 19, 2021, and (c) that certain Third Amendment to Success Fee Letter Agreement dated on or about Effective Date.

 

“Support Business” shall mean the business of managing or supporting a Cannabis Business, and all ancillary or complimentary activities related to the foregoing, including

 

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owning the real property on which any such activity is conducted.

 

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

 

“Taking” is defined in Section 8.6(a).

 

“Tax” 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.

 

“Tax Act” means the Income Tax Act (Canada), as amended. “Term SOFR” means,

 

p.m. (New York City time) on any Base Rate Term SOFR Determination Day the Term SOFR Reference Rate for a tenor of one month has not been published by the Term SOFR Administrator

 

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and a Benchmark Replacement Date with respect to the Term SOFR Reference Rate has not occurred, then Term SOFR will be the Term SOFR Reference Rate for one month as published by the Term SOFR Administrator on the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate for one month was published by the Term SOFR Administrator so long as such first preceding U.S. Government Securities Business Day is not more than three (3) U.S. Government Securities Business Days prior to such Base Rate Term SOFR Determination Day;

 

provided, further, that if Term SOFR determined as provided above (including pursuant to the proviso under clause (a) or clause (b) above) shall ever be less than the Floor, then Term SOFR shall be deemed to be the Floor.

 

“Term SOFR Administrator” means CME Group Benchmark Administration Limited (CBA) (or a successor administrator of the Term SOFR Reference Rate selected by ▇▇▇▇▇▇ in its reasonable discretion).

 

“Term SOFR Reference Rate” means the forward-looking term rate based on

SOFR.

 

“TerrAscend Group” means Canadian Parent and each of its Subsidiaries. “TerrAscend NJ” is defined in the opening paragraph of this Agreement. “Title Company” means ▇▇▇▇▇▇▇ Title Guaranty Company.

“Title Policy” means the most current version of ALTA extended coverage lender’s

title policy issued by Title Company insuring the first priority Lien of the Security Instrument in the full maximum possible amount of the Loan subject only to such exceptions approved by ▇▇▇▇▇▇ and including such endorsements as are required by Lender.

 

“Transfer” means the sale, transfer, hypothecation, encumbrance, mortgage, conveyance, lease, alienation, assignment, disposition, divestment, or leasing with option to purchase, or assignment of any assets of any Local Loan Party or any portion thereof or interest therein (whether direct or indirect, legal or equitable) (or entering into any agreement or contract to do any of the foregoing), or undertaking, suffering or causing any of the foregoing to occur voluntarily, involuntarily or by operation of law.

 

“UCC” means the Uniform Commercial Code as in effect from time to time in the State; provided, however, that if by reason of mandatory provisions of law, any or all of the perfection or priority of Lender's security interest in any item or portion of the Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State, the term “UCC” means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions hereof relating to such perfection or priority and for purposes of definitions relating to such provisions.

 

“Unadjusted Benchmark Replacement” means the applicable Benchmark Replacement excluding the related Benchmark Replacement Adjustment.

 

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

 

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

“U.S. Tax Compliance Certificate” is defined in Section 2.15(e)(ii)(B)(3). “WANA License” means (a) that certain License and Consulting Agreement dated

August 11, 2022 among The CIMA Group, LLC, a Colorado limited liability company and TerrAscend NJ, as amended from time to time, and (b) that certain License and Consulting Agreement dated August 11, 2022 among The CIMA Group, LLC, a Colorado limited liability company and WDB Holdings MD, Inc. as amended from time to time.

 

 

 

 

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entity for damages of any kind, including direct or indirect, special, punitive, incidental or consequential damages, costs, losses or expenses (whether in tort, contract or otherwise and whether at law or in equity), for any error or calculation of any such rate (or component thereof) provided by any such information source or service.

 

ARTICLE II THE LOAN

reliance upon the representations and warranties of ▇▇▇▇▇▇▇▇ set forth hereunder and in the other Loan Documents, ▇▇▇▇▇▇ hereby agrees to lend to ▇▇▇▇▇▇▇▇, and ▇▇▇▇▇▇▇▇ hereby agrees to borrow from ▇▇▇▇▇▇, the principal sum of the Loan Amount. The Loan is evidenced by the Note. The Note and all other Obligations incurred in connection with any Loan Document are secured by this Agreement and the other Loan Documents. Borrower shall receive only one borrowing hereunder up to the maximum Loan Amount and any amount borrowed and repaid hereunder may not be reborrowed. A portion of the Loan in the amount of Two Million Two Hundred Eighty Eight Thousand Seventy One and 09/100ths Dollars ($2,288,071.09) (the “Construction Reserve Funds”) has been funded and is being held by Lender in the Construction Reserve Account. For the avoidance of doubt, interest shall accrue on the Construction Reserve Funds from and after the Effective Date.

 

 

 

 

 

 

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hereunder. If any partial prepayment of the Loan is made by Borrower prior to the Maturity Date in accordance with Section 2.10, to the extent such prepayment is permitted or required hereunder, then such partial prepayment shall be accompanied by the portion of the Exit Fee allocable to the amount being so prepaid. Upon such partial prepayment, the amount due on the Maturity Date or earlier acceleration of the Loan shall be reduced by that portion of the Exit Fee previously paid by Borrower to Lender. Notwithstanding anything in this Agreement to the contrary, if and to the extent that the Loan or any portion thereof is repaid with the proceeds of a mortgage loan from Lender (or any Affiliate thereof or syndicate including Lender or any such Affiliate) (provided that Lender (or any Affiliate thereof or syndicate including Lender or any such Affiliate) shall have no obligation to offer to provide such financing), then the Exit Fee that would otherwise be payable with respect to repayment (or portion thereof) in connection therewith shall be waived. For the avoidance of doubt, no Exit Fee (or portion thereof) shall be earned or due on any Amortization Payment.

 

 

 

 

 

 

 

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in the place designated for payment made by Borrower prior to 11:00 am Pacific Time, shall be credited prior to close of business, while other payments may, at the option of Lender, not be credited until immediately available to Lender in federal funds in the place designated for payment prior to 11:00 am, Pacific Time, at such place of payment on a day on which Lender is open for business.

 

 

 

 

 

 

 

 

 

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credited upon the later of such funds having become unconditionally and immediately available to Lender or the following Business Day.

 

 

(10) Business Days’ (but no more than one hundred-twenty (120) days’) prior written notice to Lender and the payment to Lender of (i) all outstanding principal (or portion(s) thereof) being prepaid) and accrued but unpaid interest due under the Loan and all other amounts due under the Note, this Agreement and the other Loan Documents (including, without limitation, the Exit Fee (if applicable)) plus (ii) a prepayment premium (the “Minimum Interest Payment”) equal to

(A) Seventeen Million Four Hundred Fifty Thousand and 00/100 Dollars ($17,450,000.00), minus

(B) the aggregate sum of all interest payments (excluding any default interest) actually received by Lender prior to the date of prepayment (or, in the case of a partial prepayment, an amount equal to the pro-rated amount of the Minimum Interest Payment based upon the portion of the Loan Amount being prepaid. The Exit Fee and the Minimum Interest Payment shall also be due in connection with a prepayment pursuant to acceleration of the Loan upon the occurrence and during the continuance of an Event of Default. A prepayment notice delivered to Lender pursuant to this Section 2.10 shall be irrevocable unless otherwise consented to by Lender. The parties hereto acknowledge and agree that the Minimum Interest Payment and the Exit Fee (I) are additional consideration for providing the Loan, (II) constitute reasonable liquidated damages to compensate Lender for (and is a proportionate quantification of) the actual loss of the anticipated stream of fees upon a termination of the Loan (such damages being otherwise impossible to ascertain or even estimate for various reasons, including, without limitation, because such damages would depend on, among other things, (x) when the Loan might otherwise be terminated and (y) future changes in interest rates which are not readily ascertainable on the Effective Date), and (III) are not a penalty to punish Borrower for its early termination of the Loan or for the occurrence of any Event of Default. Notwithstanding anything in this Agreement to the contrary, if and to the extent that the Loan or any portion thereof is repaid with the proceeds of a loan from Lender (or any Affiliate thereof or syndicate including Lender or any such Affiliate) (provided that Lender (or any Affiliate thereof or syndicate including Lender or any such Affiliate) shall have no obligation to offer to provide such financing), then the Minimum Interest Payment that would otherwise be payable with respect to repayment (or portion thereof) in connection therewith shall be waived.

 

 

 

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LOAN DOCUMENTS, THEN BORROWER SHALL BE OBLIGATED TO PAY CONCURRENTLY WITH SUCH PREPAYMENT (AND IN ADDITION TO THE EXIT FEE), THE MINIMUM INTEREST PAYMENT SPECIFIED IN SECTION 2.10. BY EXECUTING THIS AGREEMENT, ▇▇▇▇▇▇▇▇ HEREBY DECLARES THAT THE AGREEMENT TO MAKE THE LOAN EVIDENCED BY THE NOTE AT THE INTEREST RATE AND FOR THE TERM SET FORTH IN THIS AGREEMENT CONSTITUTES ADEQUATE CONSIDERATION, GIVEN INDIVIDUAL WEIGHT BY BORROWER FOR THIS WAIVER AND AGREEMENT. FURTHER, BY EXECUTING THIS AGREEMENT, BORROWER EXPRESSLY ACKNOWLEDGES AND AGREES THAT NOTWITHSTANDING ANY APPLICABLE LAW TO THE CONTRARY, PURSUANT TO THE TERMS OF THIS AGREEMENT AND OF THE NOTE, ▇▇▇▇▇▇▇▇ HAS AGREED THAT BORROWER HAS NO RIGHT TO REPAY THE NOTE WITHOUT THE PAYMENT OF THE EXIT FEE, AND THAT BORROWER SHALL BE LIABLE FOR THE PAYMENT OF THE EXIT FEE IN CONNECTION WITH THE REPAYMENT OF THE NOTE DUE TO THE ACCELERATION OF THE NOTE IN ACCORDANCE WITH ITS TERMS AND/OR THE TERMS OF THIS AGREEMENT. FURTHERMORE, BY EXECUTING THIS AGREEMENT, ▇▇▇▇▇▇▇▇ EXPRESSLY ACKNOWLEDGES AND AGREES THAT ▇▇▇▇▇▇ HAS MADE THE LOAN IN RELIANCE UPON THESE AGREEMENTS OF BORROWER AND THAT ▇▇▇▇▇▇ WOULD NOT HAVE MADE THE LOAN WITHOUT SUCH AGREEMENTS OF BORROWER.

 

 

 

 

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or in any way connected with ▇▇▇▇▇▇’s acceptance of or acting upon any instructions or directions from any such Persons.

 

 

 

 

 

 

 

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determining the amount of such adjustment, or (B) repay the SOFR Loans or Base Rate Loans determined with reference to Term SOFR, in each case, of such Lender with respect to which such adjustment is made (together with any amounts due under Section 2.14(a)(ii)).

 

(B) in the case of any such Base Rate Loans of Lender that are outstanding and that are determined with reference to Term SOFR, interest upon the Base Rate Loans of Lender after the date specified in such Lender’s notice shall accrue interest at the rate then applicable to Base Rate Loans without reference to the Term SOFR component thereof in each case, until such Lender determines that it would no longer be unlawful or impractical to do so.

 

 

 

 

 

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Replacement, and (2) the effectiveness of any Conforming Changes in connection with the use, administration, adoption, or implementation of a Benchmark Replacement. Any determination, decision or election that may be made by Lender pursuant to this Section 2.14(a)(iii), including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party to this Agreement or any other Loan Document, except, in each case, as expressly required pursuant to this Section 2.14(a)(iii).

 

 

 

(A) Indemnified Taxes, (B) Taxes described in clauses (b) through (e) of the definition of Excluded Taxes and (C) Connection Income Taxes) with respect to its loans, commitments or other obligations or its deposits, reserves other liabilities or capital attributable thereto; or (ii) shall impose, modify or deem applicable any reserve, special deposit, capital, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended by, Lender or shall impose on Lender any other condition affecting its loans or its obligation to make such loans, and the result of any of the foregoing shall be to increase the cost (other than Taxes) to such Lender of making, converting to, continuing or maintaining any Loan or of maintaining its obligation to make the Loan, or to increase the cost to such Lender, or to reduce the amount of any sum received or receivable by such Lender hereunder (whether of principal, interest or any other amount) (other than in respect of Taxes) then, upon request of ▇▇▇▇▇▇, Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender, as the case may be, for such Taxes described in clause (i) or such additional costs incurred or reduction suffered described in clause (ii).

 

 

 

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any increased costs incurred or reductions suffered more than nine months prior to the date that such Lender notifies Borrower of the Regulatory Change giving rise to such increased costs or reductions, and of such Lender’s intention to claim compensation therefor (except that, if the Regulatory Change giving rise to such increased costs or reductions is retroactive, then the nine (9)-month period referred to above shall be extended to include the period of retroactive effect thereof).

 

 

 

 

 

 

 

 

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recipient of a payment under any Loan Document, if reasonably requested by ▇▇▇▇▇▇▇▇, shall deliver such other documentation prescribed by applicable law or reasonably requested by Borrower as will enable Borrower to determine whether or not such Lender or other recipient is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Sections 2.15(e)(ii)(A), 2.15(e)(ii)(B) and 2.15(e)(ii)(D)) shall not be required if in Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.

 

 

 

 

 

 

(x) a certificate substantially in the form of Exhibit A-1 to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” related to any Loan Party as described in Section 881(c)(3)(C)

 

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of the Code (a “U.S. Tax Compliance Certificate”)

 

 

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and (y) executed copies of IRS Form W-8BEN or IRS Form W-8BEN-E; or

 

Compliance Certificate substantially in the form of Exhibit A-2 or Exhibit A-3, IRS Form W-9, and/or other certification 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 substantially in the form of Exhibit A-4 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 Borrower in writing of its legal inability to do so.

 

 

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(but only to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this paragraph (f) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (f), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph (f) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This paragraph shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.

 

 

 

 

 

 

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designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.14 or Section 2.15, as the case may be, in the future, and (ii) would not subject Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by ▇▇▇▇▇▇ in connection with any such designation or assignment.

 

 

ARTICLE III

RESERVE ACCOUNTS GENERALLY

 

 

 

 

 

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ARTICLE IV REPRESENTATIONS AND WARRANTIES

 

To induce ▇▇▇▇▇▇ to execute this Agreement and make the Loan, each Loan Party hereby represents, warrants and covenants to Lender as of the date hereof and continuing hereafter as follows:

 

4.1. Each Loan Party is in good standing in, every jurisdiction where such qualification is required. MD Propco and, once NJ Propco joins the Loan Documents, NJ Propco shall at all times remain a Special Purpose Entity.

 

 

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Schedule 4.3 is complete and accurate as of the Effective Date and illustrates all Persons who

 

(b) conflict with, result in a breach or violation of or constitute (with or without notice or lapse of time or both) a default under any (i) material agreement to which any Loan Party, the Property or the other Collateral is subject, (ii) statute, ordinance, rule or regulation of any Governmental Authority applicable to any Loan Party, the Property or the other Collateral, or (iii) court or Governmental Authority order; or (c) result in or require the creation or imposition of any Lien upon any of the properties or assets of any Loan Party (other than Liens in favor of Lender arising pursuant to the Loan Documents).

 

 

 

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governmental investigation or arbitration, at law or in equity, or before or by any Governmental Authority, pending against and served upon or, to best of any Loan Party’s knowledge, threatened against and not served upon any Loan Party, the Property or any other Collateral which (i) could result in a Material Adverse Effect upon such Person, the Property or other Collateral, or (ii) could materially and adversely affect the ability of any Loan Party to perform its obligations under the Loan Documents or (iii) involves any Loan Document or the transactions contemplated thereby.

 

 

 

 

 

 

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which they were made, not misleading (it being recognized that projections and forecasts provided by Borrower in good faith and based upon reasonable assumptions are not viewed as facts and that actual results during the period or periods covered by such projections and forecasts may differ from the projected or forecasted results). All organizational documents, financial statements, Leases, Material Agreements, agreements and other documents and instruments delivered by or on behalf of any Loan Party to Lender pursuant to this Agreement, the other Loan Documents are true, correct and complete copies of the originals. The foregoing representations and warranties with respect to any documents, Leases or instruments relating to the Property or the Cannabis Business or Support Business and not prepared by or on behalf of any Loan Party are made to the best of each Loan Party’s knowledge. No Loan Party has withheld any material fact from Lender in regard to any matter addressed in or material to the Loan Documents.

 

 

 

 

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that could have a Material Adverse Effect (including, without limitation, on any Loan Party, the Cannabis Business, the Property or any other Collateral, the transactions contemplated by this Agreement or the other Loan Documents). No Lien upon the Property or the other Collateral materially adversely affects the value, operation or use of the Property or such Collateral or Borrower’s or any Guarantor’s ability to pay the Obligations. There are no outstanding options to purchase or rights of first refusal affecting all or any portion of the Property or the other Collateral except as set forth in the limited liability company agreement of TerrAscend NJ delivered to Lender in connection with the closing. To the knowledge of the Loan Parties, the survey for the Property delivered to Lender does not fail to reflect any material matter affecting the Property or the title thereto. Except as may otherwise be set forth on the survey provided to Lender, all of the Improvements included in determining the appraised value of the Property lie wholly within the boundaries and building restriction lines of the Property, and no improvement on an adjoining property encroaches upon the Property, and no easement or other encumbrance upon the Property encroaches upon any of the Improvements, except pursuant to the Cell Tower Lease and those insured against by the Title Policy insuring the Lien of the Security Instrument. The Property is taxed separately and does not include any other property, and for all purposes the Property may be mortgaged, conveyed and otherwise dealt with as a separate legal parcel. The cost basis information for the Property delivered to Lender is true, complete, and accurate in all respects.

 

 

 

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the filing or attachment of any security interests on or affecting any Excluded Asset other than Permitted Encumbrances.

 

 

 

 

 

 

 

 

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Presidential Executive Order No. 13224 (Sept. 23, 2001) or any other similar prohibitions contained in the rules and regulations of OFAC or in any enabling legislation or other Presidential Executive Orders in respect thereof; (iii) has been previously indicted for or convicted of any felony involving a crime or crimes of moral turpitude or for any Patriot Act Offense (as defined below); (iv) is not currently under investigation by any Governmental Authority for alleged criminal activity or (v) is a Prohibited Person. For purposes hereof, the term “Patriot Act Offense” means any violation of the criminal laws of the United States of America or of any of the several states, or that would be a criminal violation if committed within the jurisdiction of the United States of America or any of the several states, relating to terrorism or the laundering of monetary instruments, including any offense under (A) the criminal laws against terrorism; (B) the criminal laws against money laundering, (C) the Bank Secrecy Act, as amended, (D) the Money Laundering Control Act of 1986, as amended, or the (E) Patriot Act. “Patriot Act Offense” also includes the crimes of conspiracy to commit, or aiding and abetting another to commit, a Patriot Act Offense.

 

 

 

 

C.F.R. Section 2510.3-101, as modified by Section 3(42) of the Code. The transactions contemplated by the Loan Documents do not violate state statutes regulating investment of, and fiduciary obligations with respect to, governmental plans and such state statutes do not in any manner affect the ability of any Loan Party to perform its obligations under the Loan Documents or the ability of Lender to enforce any and all of its rights under this Agreement and the other Loan Documents. If an investor or direct or indirect equity owner in any Loan Party is a plan that is not subject to Title I of ERISA or Section 4975 of the Code, but is subject to the provisions of any federal, state, local, non-U.S. or other laws or regulations that are similar to those portions of

 

 

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ERISA or the Code, the assets of the Loan Parties do not constitute the assets of such plan under such other laws. “ERISA Affiliate” means any corporation or trade or business that is a member of any group of organizations (a) described in Section 414(b) or (c) of the Code, of which any Loan Party is a member, and (b) solely for purposes of potential liability under Section 302(b)(2) of ERISA and Section 412(b)(2) of the Code and the lien created under Section 303(k) of ERISA and Section 430(k) of the Code, described in Section 414(m) or (o) of the Code, of which any Loan Party is a member.

 

 

 

 

 

 

 

 

 

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immediately following the making of the Loan, exceed such Person’s total liabilities, including subordinated, unliquidated, disputed and contingent liabilities. The present fair saleable value of the property of each Loan Party will be greater than the amount that will be required to pay the probable liability of its debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured. Each Loan Party will be able to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured. Each Loan Party’s assets do not and, immediately following the making of the Loan will not, constitute unreasonably small capital to carry out its business as conducted or as proposed to be conducted. No Loan Party intends to, nor believes that it will, incur debts beyond its ability to pay such debts as they mature, taking into account the timing of and amounts of cash to be received by it and the timing of the amounts of cash to be payable on or in respect of its liabilities. No petition in bankruptcy has been filed against any Loan Party, and no Loan Party has ever made an assignment for the benefit of creditors or taken advantage of any insolvency act for the benefit of debtors. No Loan Party or any of their respective direct or indirect owners is contemplating either the filing of a Bankruptcy Action by any Loan Party and no Loan Party has knowledge of any Person contemplating the filing of any such petition against it. No Loan Party is contemplating the liquidation of all or a major portion of its assets or properties.

 

 

 

 

 

 

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▇▇▇▇▇▇▇▇▇, both in their separate capacities and as members of the group of companies. Each Loan Party has determined that execution, delivery, and performance of this Agreement and any other Loan Documents to be executed by such Loan Party is within its purpose, in furtherance of its direct and/or indirect business interests, will be of direct and indirect benefit to such Loan Party, and is in its best interest.

 

ARTICLE V REPORTING COVENANTS

 

Each Loan Party covenants and agrees that, on and after the date hereof, until payment in full of the Loan and other amounts payable under the Loan Documents:

 

 

 

(ii) consolidated unaudited financial statements of Borrower, consisting of a balance sheet and income statement. Such financial statements shall be prepared on the basis of the Accounting Standard, and shall be accompanied by a certificate executed by the applicable Loan Party, certifying the completeness, fairness and consistency thereof.

 

 

 

 

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(ii) any condition or event which has or will have a Material Adverse Effect, written notice specifying the nature and period of existence of any such condition or event, or specifying the notice given or action taken by the applicable Loan Party and the nature of such claimed Event of Default, Default or other event or condition, and what action the applicable Loan Party has taken, is taking and proposes to take with respect thereto.

 

 

(ii) any loss, damage, or destruction to the Collateral in the amount of $300,000 or more, whether or not covered by insurance; (iii) any and all default notices given or received under or with respect to (x) the Real Property or (y) any Material Contract; (iv) any termination or non-renewal of any Material Contract or the receipt by any Person of any written notice from the other party to any Material Contract of such party’s intent to terminate or not renew such Material Contract (other than the assignment of the Maplewood Lease at the time of the Permitted Disposal); (v) entry into a new Material Contract; (vi) notice of any rejection or non-renewal of any Regulatory License or other Government Approval that is material to the conduct of the Cannabis Business, and such other material information as may be readily available to it to enable Lender and its counsel to evaluate such matters, and (vii) any written notice or order from any Governmental Authority relating to any Loan Party’s failure to comply with any Legal Requirements that (A) relate to any Borrower or the Collateral or (B) if not promptly cured, would be reasonably likely to have a Material Adverse Effect or result in a termination or suspension of any Regulatory License.

 

 

 

 

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respect to (i) the Collateral, or (ii) the business, assets, condition (financial or otherwise), income or prospects of any Loan Party as Lender may from time to time reasonably request.

 

(b) any knowledge by such Loan Party that the Property does not comply with any Hazardous Materials Laws; (c) any claims alleging that any Loan Party or the Property is not in compliance with or has violated Hazardous Materials Laws; and/or (d) any claim for a Hazardous Materials Liability.

 

 

ARTICLE VI OTHER COVENANTS

 

Each Loan Party covenants and agrees that, on and after the date hereof, until indefeasible payment in full of the Loan and other amounts payable under the Loan Documents:

 

 

 

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Requirements at all times. There shall never be committed by any Loan Party, and no Loan Party shall ever permit any other Person in occupancy of or involved with the operation or use of the Property to commit any act or omission affording any Governmental Authority the right of forfeiture against (i) the Property or any part thereof, (ii) any Regulatory License, (iii) any other Collateral, or (iv) any monies paid in performance of the Obligations. Each Loan Party hereby covenants and agrees not to commit, permit or suffer to exist any act or omission affording such right of forfeiture.

 

 

 

 

 

 

 

 

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cause such Subsidiary to take all such actions as shall be necessary to cause the Obligations to constitute senior indebtedness (however denominated) in respect of such Subordinated Indebtedness and to enable Lender to have and exercise any payment blockage or other remedies available or potentially available to holders of senior indebtedness under the terms of such Subordinated Indebtedness. Without limiting the foregoing, the Obligations are hereby designated as “senior indebtedness” and as “designated senior indebtedness” and words of similar import under and in respect of any indenture or other agreement or instrument under which such Subordinated Indebtedness is outstanding and are further given all such other designations as shall be required under the terms of any such Subordinated Indebtedness in order that Lender may have and exercise any payment blockage or other remedies available or potentially available to holders of senior indebtedness under the terms of such Subordinated Indebtedness.

 

 

4.18 to remain true and correct throughout the term of the Loan.

 

$500,000, (ii) immediately prior to and immediately after giving effect to the Transfer, no Event of Default shall have occurred and be continuing or would result therefrom, (iii) the assets transferred are not material to the operations of the business of Borrower, and (iv) no less than 80% of the consideration received for such Transfer is received in cash, (e) is a sale or disposition of equipment to the extent that such equipment is exchanged for credit against the purchase price for similar replacement equipment, or the proceeds of such Transfers are reasonably promptly

 

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applied to the purchase of similar replacement equipment, all in the ordinary course of business,

(f) is an abandonment, failure to renew or other disposition in the ordinary course of business of any intellectual property that is not material to the conduct of the business of any Borrower or any Subsidiary of such Borrower, (g) is by any Borrower or Subsidiary thereof to another Borrower or Subsidiary thereof, (h) dispositions of cash or Cash Equivalents in the ordinary course of business or otherwise in accordance with Borrower’s organizational documents, (i) dispositions to effect the Permitted Reorganization, provided that the Permitted Reorganization Conditions have been satisfied, and (l) dispositions to effect the Permitted Disposal, provided that the Permitted Disposal Conditions have been satisfied.

 

 

 

 

 

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the continuance of such DSCR Period, Borrower shall deposit into the Blocked Account, as additional collateral for the Loan, an amount of cash equal to the DSCR Required Payment Amount; provided, however, that in no event shall the aggregate payments made by Borrower pursuant to this Section 6.21 during any particular DSCR Period exceed Six Million and 00/100 Dollars ($6,000,000.00). If and when a DSCR Period ends, provided no Event of Default shall then exist, Lender shall promptly release the funds on deposit in the Blocked Account to Borrower.

 

(iii) participating in tax, accounting and other administrative matters as owner of its Subsidiaries (including the Loan Parties) and reporting related to such matters, (iv) the performance of its obligations under and in connection with the Loan Documents and any documentation governing Permitted Parent Indebtedness, (v) in the case of Canadian Parent, any public offering of its common stock or any other issuance or registration of its stock for sale or resale, including the costs, fees and expenses related thereto, (vi) the making of any dividend or the holding of any cash received in connection with dividends made by its Subsidiaries, (vii) incurring fees, costs and expenses relating to overhead and general operating including professional fees for legal, tax and accounting issues and paying taxes, (vii) providing indemnification to officers and directors and as otherwise permitted hereunder, (viii) activities incidental to the consummation of the transactions contemplated by the Loan Documents, (ix) financing activities related to Permitted Parent Indebtedness, including the issuance of securities, incurrence of debt, payment of dividends, making contributions to the capital of its Subsidiaries and guaranteeing the obligations of its Subsidiaries, and (x) activities incidental to the businesses or activities described in clauses (i) to

(ix) of this Section 6.22.

 

 

 

ARTICLE VII CONSTRUCTION

 

 

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sole discretion. ▇▇▇▇▇▇’s right to withdraw and apply funds in the Construction Reserve Account shall be in addition to all other rights and remedies provided to Lender under this Agreement and the other Loan Documents. Nothing in this Section 7.1 shall (a) make Lender responsible for performing or completing any Construction Work; (b) require Lender to expend funds in addition to the funds in the Construction Reserve Account to complete any Construction Work; (c) obligate Lender to proceed with any Construction Work; or (d) obligate Lender to demand from Borrower additional sums to complete any Construction Work. Borrower shall permit Lender and ▇▇▇▇▇▇’s agents and representatives (including ▇▇▇▇▇▇’s construction consultant) or third parties to enter onto the Property during regular business hours upon reasonable notice to Borrower, and subject to compliance with State Cannabis Laws, to inspect the progress of any Construction Work and all materials being used in connection therewith and to examine all plans and shop drawings relating to such Construction Work.

 

 

ARTICLE VIII

INSURANCE; CASUALTY, CONDEMNATION AND RESTORATION

 

Each Loan Party covenants and agrees that, on or after the date hereof, until payment in full of the Obligations, each Loan Party shall obtain and maintain in effect, at their sole expense, the following policies of insurance in form and substance satisfactory to Lender, each of which, except for the insurance required in Section 8.1, shall be issued by companies authorized to do business in the state there the applicable Property is located with claims paying ability ratings of at least “A-VII (7)” or better by AM Best, and shall otherwise be approved by Lender.

 

 

 

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$1,000,000 each accident, each disease and each employee.

 

 

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(i) an ▇▇▇▇▇ 25, ▇▇▇▇▇ 25S or equivalent certificate of liability insurance and (ii) an ▇▇▇▇▇ 28 or equivalent certificate of property insurance, which shall name all Loan Parties as additional insureds and include coverage for all real property owned or leased by a Loan Party; and shall provide endorsements to each policy;

 

 

 

 

 

Pelorus Fund REIT, LLC ISAOA, ATIMA ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇. ▇▇▇

Riverside, CA 92506-3122

 

 

 

 

 

 

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action relating to or arising from, (i) any insurance policy maintained by or on behalf of a Loan Party following any damage, destruction, casualty or loss to all or any portion of the Property (a “Casualty”, and such proceeds, “Insurance Proceeds”) or (ii) any temporary or permanent taking or voluntary conveyance of all or part of the Property, or any interest therein or right accruing thereto or use thereof, as the result of, or in settlement of, any condemnation or other eminent domain proceeding by any Governmental Authority whether or not the same shall have actually been commenced (a “Taking”, and such proceeds, “Condemnation Proceeds”, and together with Insurance Proceeds, collectively, “Restoration Proceeds”) are hereby assigned to Lender as additional collateral security hereunder subject to the Lien of the Security Instrument and the Security Agreement to be applied in accordance with this Article VIII. Lender shall be entitled to receive and collect all Restoration Proceeds, and the Loan Parties shall instruct and cause the issuer of each policy of insurance described herein and any applicable Governmental Authority to deliver to Lender all Restoration Proceeds. The Loan Parties shall execute such further assignments of the Restoration Proceeds as Lender may from time to time reasonably require. Notwithstanding the foregoing, if the Restoration Proceeds, less the amount of Lender’s costs and expenses (including attorneys’ fees and costs) incurred in collecting the same (the “Net Restoration Proceeds”), are $100,000 or less (the “Restoration Proceeds Threshold”), provided no Event of Default then exists, Lender shall make such Net Restoration Proceeds available to the Loan Parties. All Insurance Proceeds received by a Loan Party or Lender in respect of business interruption coverage required hereunder, and all Condemnation Proceeds received with respect to a temporary Taking available to a Loan Party, shall be deposited in a segregated escrow account with Lender or its servicer, as applicable, and Lender shall estimate the number of months required for the Loan Parties to restore the damage caused such Casualty or replace cash flow interrupted by such temporary Taking, as applicable, and shall divide the aggregate proceeds by such number of months, and, provided no Event of Default then exists, shall disburse a monthly installment thereof to the Loan Parties each such month. Subject to Lender’s rights under Sections 8.6 and 8.7, provided no Event of Default has occurred and is continuing and the Restoration has been completed in accordance with this Agreement, any Net Restoration Proceeds available to the Loan Parties for Restoration, to the extent not used by the Loan Parties in connection with, or to the extent they exceed the cost of such Restoration and any costs incurred by Lender, shall be paid to the Loan Party entitled thereto.

 

 

 

 

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any Loan Party’s consent, to apply such Restoration Proceeds or the balance thereof, at Lender’s option either (i) to the full or partial payment or prepayment of the Obligations; provided that such payment or prepayment shall not require any defeasance of the Loan, or (ii) to the Restoration of all or any part of such Improvements affected by the Casualty or Taking, as applicable.

 

 

 

 

 

 

(i) an architect’s contract with an architect reasonably acceptable to ▇▇▇▇▇▇ and complete plans and specifications for the Restoration of the Property lost or damaged to the condition, utility and value prior to the applicable Casualty; (ii) fixed-price or guaranteed maximum cost construction contracts with contractors reasonably acceptable to Lender for completion of the Restoration work in accordance with the aforementioned plans and specifications; (iii) such additional funds (if any) as are necessary from time to time, in Lender’s reasonable opinion, to complete the Restoration

 

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(which funds shall be held by Lender as additional collateral securing the Obligations and shall be

 

 

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disbursed, if at all, pursuant to this Article VIII); and (iv) copies of all permits and licenses necessary to complete the Restoration in accordance with the plans and specifications and all Legal Requirements;

 

 

 

 

 

 

 

 

 

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ARTICLE IX

EVENTS OF DEFAULT AND REMEDIES

 

 

 

 

 

 

 

 

 

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(iii) any Loan Party institutes or consents to any bankruptcy, insolvency, reorganization, arrangement, readjustment of debt, dissolution, custodianship, conservatorship, liquidation, rehabilitation or similar proceedings relating to it or to all or any part of its property under the applicable Legal Requirements of any jurisdiction; or any similar proceeding is instituted without the consent of any Loan Party and continues undismissed or unstayed for sixty (60) days; or

(iv) any judgment, writ, attachment, execution or similar process is issued or levied against all or any part of the property of any Loan Party and is not released, vacated or fully bonded within sixty (60) days after its issue or levy.

 

 

 

 

 

 

 

 

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therein (other than the Property), subject only to Permitted Encumbrances, or (iii) the Pledge Agreement to be a valid and perfected Lien upon the Collateral described therein. Any Loan Document shall fail to remain in full force and effect or any action, and be valid, binding an enforceability in accordance with its terms, or any action is taken to discontinue or to assert the invalidity or unenforceability of any Loan Document.

 

 

 

 

 

 

 

 

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Notwithstanding the foregoing or anything contained herein to the contrary, the outstanding Obligations shall be accelerated and immediately due and payable, without any election by Lender upon the occurrence of an Event of Default described in Section 9.1(g) in each case without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Loan Parties.

 

 

 

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foreclosure of the Property or any other Collateral pursuant to any Loan Document, to the extent necessary to foreclose on other parts of the Property or any other Collateral.

 

 

 

 

 

 

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ARTICLE X LOAN GUARANTY

 

 

 

 

(ii) any change in the corporate existence, structure or ownership of Borrower or any other Obligated Party liable for any of the Guaranteed Obligations; (iii) any insolvency, bankruptcy, reorganization or other similar proceeding affecting any Obligated Party, or their assets or any resulting release or discharge of any obligation of any Obligated Party; or (iv) the existence of any

 

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claim, setoff or other rights which any Guarantor may have at any time against any Obligated Party, Lender or any other Person, whether in connection herewith or in any unrelated transactions.

 

 

 

 

 

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against any Obligated Party, or any Collateral, until the Loan Parties have fully performed all their obligations to Lender.

 

 

 

 

 

 

 

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all such amounts otherwise subject to acceleration under the terms of any agreement relating to the Guaranteed Obligations shall nonetheless be payable by the Guarantors forthwith on demand by Lender.

 

 

 

 

 

 

 

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of the Guarantors, jointly and severally, to pay any amounts as and when the same shall become due and payable in accordance with the terms of this Loan Guaranty.

 

 

 

 

ARTICLE XI

SECONDARY MARKET TRANSACTIONS

 

 

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hereunder or under any other Loan Document or otherwise modify any existing, or include any additional, commercial terms that are more burdensome to the Loan Parties by more than a de minimis respect, (y) any such Secondary Market Transaction shall not result in the incurrence by any Loan Party of any cost or expense other than legal fees that may be incurred by the Loan Parties in connection with its review of any required documentation related to the applicable Secondary Market Transaction (provided, however, that, so long as no Event of Default has occurred and is continuing, (A) Lender shall be responsible for 50% of any reasonable legal fees so incurred by the Loan Parties in excess of $75,000 and (B) Lender shall be solely responsible for all such reasonable legal fees and expenses in connection with any Secondary Market Transaction after the first such Secondary Market Transaction), and (z) so long as no Event of Default has occurred and is continuing, Lender shall not sell, transfer or otherwise assign its interests in the Loan Documents to any Person who is (I) listed on Schedule 11.1 or (II) a natural person.

 

 

 

 

 

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possible), associated or connected with the Loan or the Property, or the other Collateral to cooperate in all respects with Lender in connection with any Secondary Market Transaction. Each Loan Party shall execute and deliver, and shall cause each Affiliate of any Loan Party, any party to any Loan Document or any other Person (to the extent possible), associated or connected with the Loan or the Property or the other Collateral to execute and deliver, to Lender such documents, instruments, certificates, financial statements, assignments and other writings (including, without limitation, delivery of a substantive non-consolidation legal opinion in form and substance reasonably satisfactory to Lender), do such other acts and provide such information, and participate in such meetings and discussions, in each case that are necessary or desirable to facilitate the consummation of each Secondary Market Transaction, including, without limitation, to (a) split the Loan into two or more loans evidenced by and pursuant to separate sets of Note and other related loan documents, or (b) to modify the terms and provisions of the Loan Documents, in each case to the full extent required by Lender to facilitate any Secondary Market Transaction, provided that any such splitting or modification of the Loan will not adversely affect or diminish the rights of any Loan Party or any other party to the any Loan Document as presently set forth in the Loan Documents and will not increase the monetary obligations and liabilities or materially increase the non-monetary obligations under the Loan Documents of any Loan Party or any other party to the any Loan Document.

 

 

 

ARTICLE XII MISCELLANEOUS

 

 

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without limitation upon any of ▇▇▇▇▇▇’s other rights pursuant thereto, to perform the same, and ▇▇▇▇▇▇▇▇ agrees to pay to ▇▇▇▇▇▇, upon demand, all reasonable costs and expenses incurred by ▇▇▇▇▇▇ in connection therewith, including reasonable attorneys’ fees, together with interest thereon from the date of expenditure at the Default Interest Rate.

 

 

 

 

 

 

 

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employee, independent contractor, licensee or invitee of any Loan Party; (iii) any accident in, on or around the Property or any portion thereof, or any fire, flood or other casualty or hazard thereon;

(iv) the failure of any Loan Party, any of Borrower’s or any other Loan Party’s licensees, employees, invitees, agents, independent contractors or other representatives to maintain any of the Property in a safe condition; and (v) any nuisance made or suffered on any part of the Property, except to the extent caused by ▇▇▇▇▇▇’s gross negligence or willful misconduct;

 

 

 

(i) errors, acts or failures to act of others, including other entities, banks, communications carriers or clearinghouses, through which Borrower’s transfers may be made or information received or transmitted, and no such entity shall be deemed an agent of Lender, or (ii) any special, consequential, indirect or punitive damages, whether or not (A) any claim for these damages is based on tort or contract, or (B) Lender or any Loan Party knew or should have known the likelihood of these damages in any situation. Lender makes no representations or warranties other than those expressly made in this Agreement, if any.

 

 

 

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Party or an Affiliate, breach of contract by any Loan Party or an Affiliate or otherwise, including, without limitation, any claim or cause of action for fraud, misrepresentation, tort or willful misconduct by any Loan Party or any Affiliate or any cause of action brought by any Loan Party’s direct or indirect investors; or (d) any claim or cause of action of any kind by any Person which would have the effect of denying Lender the full benefit or protection of any provision of this Agreement or the Loan Documents. Notwithstanding the foregoing, no Loan Party shall be obligated to indemnify Lender with respect to any willful misconduct, intentional tort or act of gross negligence which ▇▇▇▇▇▇ is personally determined by the judgment of a court of competent jurisdiction (sustained on appeal, if any) to have committed. Borrower shall pay any indebtedness arising under this indemnity to Lender immediately upon demand by Lender together with interest thereon from the date such indebtedness arises at the Default Interest Rate. The Loan Parties’ duty to defend and indemnify Lender shall survive the release and cancellation of the Note, the release and reconveyance of the Security Instrument, the termination of this Agreement, the termination of any other Loan Document. This Section 12.5 shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.

 

 

 

 

 

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an original for all purposes. The electronic signature of a party to this Agreement shall be as valid as an original signature of such party and shall be effective to bind such party to this Agreement. The parties agree that any electronically signed document (including this Agreement) shall be deemed (i) to be “written” or “in writing,” (ii) to have been signed, and (iii) to constitute a record established and maintained in the ordinary course of business and an original written record when printed from electronic files. Such paper copies or “printouts,” if introduced as evidence in any proceeding, will be admissible as between the parties to the same extent and under the same conditions as other original business records created and maintained in documentary form. Neither Borrower nor ▇▇▇▇▇▇ shall contest the admissibility of true and accurate copies of electronically signed documents on the basis of the best evidence rule or as not satisfying the business records exception to the hearsay rule. For purposes hereof, “electronic signature” means a manually signed original signature that is then transmitted via the internet as a “pdf” (portable document format) or other replicating image attached to an e-mail message, and “electronically signed document” means a document transmitted via e-mail containing an electronic signature.

 

 

 

 

 

 

 

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fees, release or reconveyance fees, title insurance premiums, external or in-house appraisal or cost engineering fees (including inspections), auditor fees and environmental consultant fees.

 

This Section 12.10 shall not apply to Taxes, which shall be covered by Section 2.15. All sums paid or expended by ▇▇▇▇▇▇, any loan participant or their respective successors and assigns in accordance with this Agreement and the other Loan Documents shall be considered to be a part of the Loan. All such sums, together with all amounts to be paid by Borrower to Lender pursuant to this Agreement and the other Loan Documents, shall bear interest from the date of expenditure at the Default Interest Rate, and shall be immediately due and payable by Borrower upon demand.

 

 

 

 

If to Borrower,

Guarantor: ▇▇▇/▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇

Attn: Chief Legal Officer Email: ▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇

 

with a copy to: ▇▇▇▇▇▇ LLP

▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇

Email: ▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇ and ▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇

 

 

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If to Lender: Pelorus Fund REIT, LLC

▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Attn: ▇▇▇ ▇▇▇▇▇▇▇

Email: ▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇

 

with a copy to:K&L Gates LLP

▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.

Email: ▇▇▇▇.▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇

 

Any party may change its address by giving written notice to the other party in accordance with this Section 12.13. If any notice or other communication is given by registered or certified mail it will be deemed effective seventy-two (72) hours after it is deposited in the U.S. mail, postage prepaid; or if given by any other permitted means, when received at the address listed above.

 

 

 

 

 

 

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deemed to have waived any right either to require prompt payment when due of all other amounts due under any Loan Document, or to declare a default for failure to effect prompt payment of any such other amount.

 

 

 

 

 

 

 

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which are unrelated to the Loan, and the Loan Documents which any Loan Party may otherwise have against any assignor, and no such unrelated counterclaim or defense shall be interposed or asserted by any Loan Party in any action or proceeding brought by any such assignee upon, the Loan Documents and any such right to interpose or assert any such unrelated offset, counterclaim or defense in any such action or proceeding is hereby expressly waived by each Loan Party.

 

 

 

 

 

 

 

 

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remedies as may be available under the jurisdiction of a court, the AAA and/or the arbitrator shall have full authority to grant provisional remedies in accordance with the Commercial Rules, to direct the Parties to request that any court modify or vacate any temporary or preliminary relief issued by such court, and to award damages for the failure of any Party to respect the arbitral tribunal's orders to that effect. In any such judicial action: (i) each of the Parties irrevocably and unconditionally consents to the exclusive jurisdiction and venue of the state courts located in City of Los Angeles, County of Los Angeles, California (the “California State Courts”) for the purpose of any pre-arbitral injunction, pre-arbitral attachment, or other order in aid of arbitration proceedings, and to the non-exclusive jurisdiction of such courts for the enforcement of any judgment on any award; (ii) each of the Parties irrevocably waives, to the fullest extent they may effectively do so, any objection, including any objection to the laying of venue or based on the grounds of forum non conveniens or any right of objection to jurisdiction on account of its place of incorporation or domicile, which it may now or hereafter have to the bringing of any such action or proceeding in any California State Courts; and (iii) each of the Parties irrevocably consents to service of process by first-class certified mail, return receipt requested, postage prepaid.

 

 

 

 

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claimant may serve with the notice of arbitration a notice of motion for summary judgment and the supporting papers and require the respondent to show why judgment should not be entered against it. For the avoidance of doubt, the parties agree that, in such an action to enforce upon an instrument for the payment of money only, the arbitrator shall abide by New York law governing the procedures set forth in New York Civil Practice Law and Rules Section 3213.

 

(i) ARISING UNDER THIS AGREEMENT OR THE NOTE, INCLUDING, WITHOUT LIMITATION, ANY PRESENT OR FUTURE MODIFICATION THEREOF, OR (ii) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT OR THE NOTE (EACH AS NOW OR HEREAFTER MODIFIED) OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION IS NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND EACH LOAN PARTY HEREBY AGREES AND CONSENTS THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF ANY RIGHT THEY MIGHT OTHERWISE HAVE TO TRIAL BY JURY.

 

 

 

 

 

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This is an unconditional and irrevocable waiver of any rights and defenses the guarantor may have because the debtor's debt is secured by real property. These rights and defenses include, but are not limited to, any rights or defenses based upon Section 580a, 580b, 580d, or 726 of the Code of Civil Procedure.

 

[Remainder of Page Intentionally Blank; Signatures on Following Page]

 

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

 

BORROWER:

 

TERRASCEND NJ LLC,

a New Jersey limited liability company

 

By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇

 

Name :▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Title: Authorized Officer

 

HMS HAGERSTOWN, LLC,

a Delaware limited liability company

 

By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇

 

Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇

Title: Chief Financial Officer/Treasurer/Manager

 

HMS PROCESSING LLC,

a Maryland limited liability company

 

By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇

 

Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇

Title: Chief Financial Officer/Treasurer/Manager

 

HMS HEALTH, LLC,

a Maryland limited liability company

 

By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇

 

Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇

Title: Chief Financial Officer/Treasurer/Manager

 

 

[Signature Page to Loan Agreement]

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GUARANTORS:

 

WELL AND GOOD, INC.,

a Delaware corporation

 

By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇

 

Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇

Title: Chief Financial Officer/Treasurer

 

WDB HOLDING MD, INC.,

a Maryland corporation

 

By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇

 

Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇

Title: Chief Financial Officer/Treasurer/Secretary

 

 

TERRASCEND CORP.,

an Ontario corporation

 

By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇

 

Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇

Title: Chief Financial Officer

 

 

TERRASCEND USA, INC.,

a Delaware corporation

 

By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇

 

Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇

Title: Chief Financial Officer/Treasurer/Secretary

 

 

[signatures continue on following page]

 

 

[Signature Page to Loan Agreement]

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LENDER:

 

PELORUS FUND REIT, LLC,

a Delaware limited liability company

 

 

 

Name:By: /s/ ▇▇▇ ▇▇▇▇▇▇

▇▇▇ ▇▇▇▇▇▇

Title: Managing Member

 

 

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SCHEDULE 1 LOAN DOCUMENTS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SCH. 1

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SCHEDULE 2.6 CONDITIONS TO CLOSING

 

 

 

 

 

 

 

 

 

 

 

SCH. 2.6-1

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SCH. 2.6-2

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SCH. 2.6-3

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SCHEDULE 4.1

 

ORGANIZATION IDENTIFICATION NUMBERS OF THE LOAN PARTIES

 

 

Loan Party	Jurisdiction of Organization/ Formation	Organizational Identification Number
Well and Good, Inc.	DE	7015918
TerrAscend NJ LLC	NJ	0450293238
WDB Holding MD, Inc.	MD	D21032016
HMS Processing, LLC	MD	W16745689
HMS Health, LLC	MD	W19151646
HMS Hagerstown, LLC	DE	6345148

 

 

SCH. 4.1 -1

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SCHEDULE 4.3 BORROWER ORGANIZATIONAL CHART

See attached

 

 

SCH. 4.3

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SCHEDULE 4.15 EXISTING LEASES

 

 

 

Borrower	Address	Owner/Landlord, as applicable
TerrAscend NJ LLC	▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇	5 ▇▇▇▇▇ LLC
TerrAscend NJ LLC	▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇	17 RT 200 South Limited Liability Company
TerrAscend NJ LLC	▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇	Harmony Land Holdings

 

 

SCH. 4.15

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SCHEDULE 4.15 MATERIAL CONTRACTS

 

 

 

 

 

 

 

 

 

 

 

 

SCH. 4.15 -1

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SCH. 4.15 -2

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SCH. 4.15 -3

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SCHEDULE 4.16 AFFILIATE FEES

 

 

 

 

 

 

 

 

SCH. 4.16

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SCHEDULE 4.23 REGULATORY LICENSES

 

Borrower	License Type	Property	Regulatory Body
TerrAscend NJ LLC	License to Operate a Cannabis Business for the Purpose of Cultivator	▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇	State of New Jersey Cannabis Regulatory Commission
TerrAscend NJ LLC	License to Operate a Cannabis Business for the Purpose of Manufacturer	▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇	State of New Jersey Cannabis Regulatory Commission
TerrAscend NJ LLC	Permit to Operate an Alternative Treatment Center for the purpose of cultivating and processing medicinal marijuana	▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇	State of New Jersey Cannabis Regulatory Commission

 

 

SCH. 4.23 -1

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Borrower	License Type	Property	Regulatory Body
Terrascend NJ LLC	Permit to Operate an Alternative Treatment Center for the purpose of dispensing medicinal marijuana	▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇	State of New Jersey Cannabis Regulatory Commission
Terrascend NJ LLC	Permit to Operate an Alternative Treatment Center for the purpose of dispensing medicinal marijuana	▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇	State of New Jersey Cannabis Regulatory Commission
Terrascend NJ LLC	Permit to Operate an Alternative Treatment Center for the purpose of dispensing medicinal marijuana	▇▇▇ ▇▇-▇▇, ▇▇▇▇, ▇▇ ▇▇▇▇▇	State of New Jersey Cannabis Regulatory Commission
HMS Health, LLC	License to Cultivate Cannabis	▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇	Maryland Medical Cannabis Commission
HMS Health, LLC	License to Cultivate Cannabis (conditional)	▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇. Hagerstown, MD 21740	Maryland Medical Cannabis Commission

 

 

SCH. 4.23 -2

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SCH. 4.23 -3

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Borrower	License Type	Property	Regulatory Body
HMS Processing, LLC	License to Process Cannabis	▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇. Hagerstown, MD 21740	Maryland Medical Cannabis Commission

 

 

SCH. 4.23 -4

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SCHEDULE 6.7 EXISTING PARENT INDEBTEDNESS

 

 

 

 

 

SCH. 6.7 -1

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SCH. 6.7 -2

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▇▇▇▇, pursuant to which Canadian Parent agrees to guaranty the indebtedness described therein.

 

 

 

SCH. 6.7 -3

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SCHEDULE 6.20 ACCOUNTS

 

 

 

SCH. 6.20

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SCHEDULE 6.24

 

POST-CLOSING OBLIGATIONS

 

 

 

 

 

(b) additional insured endorsements as evidenced on all certificates of insurance.

 

 

 

 

 

 

 

SCH. 6.24

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SCH. 6.24

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SCHEDULE 7.1 DESCRIPTION OF CONSTRUCTION WORK

 

 

SCH. 7.1

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SCHEDULE 7.2

 

APPROVED CONSTRUCTION BUDGET1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1 NTD: Borrower to provide.

 

 

SCH. 7.2

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SCHEDULE 11.1

 

LIST OF DISQUALIFIED LENDERS

 

 

Name

1933 Industries, Inc. and any of its Affiliates

4Front Ventures Corp. and any of its Affiliates

Ascend Wellness Holdings Inc and any of its Affiliates

Ayr Wellness Inc Sub Ltd and any of its Affiliates

C21 Investments, Inc. and any of its Affiliates

Cansortium, Inc. and any of its Affiliates

Captor Capital Corp. and any of its Affiliates

Columbia Care Inc and any of its Affiliates

Cresco Labs Inc. and any of its Affiliates

Curaleaf Holdings Inc and any of its Affiliates

Flower One Holdings, Inc. and any of its Affiliates

Glass House Brands Inc and any of its Affiliates

Green Thumb Industries Inc and any of its Affiliates

Jushi Holdings Inc. and any of its Affiliates

MariMed Inc. and any of its Affiliates

Medicine Man Technologies Inc. and any of its Affiliates

MedMen Enterprises, Inc. and any of its Affiliates

Planet 13 Holdings Inc and any of its Affiliates

Planet 13 Holdings, Inc. and any of its Affiliates

SLANG Worldwide, Inc. and any of its Affiliates

Stateside Holdings, Inc. and any of its Affiliates

TILT Holdings, Inc. and any of its Affiliates

TPCO Holding Corp. and any of its Affiliates

Trulieve Cannabis Corp and any of its Affiliates

Unrivaled Brands, Inc. and any of its Affiliates

Verano Holdings and any of its Affiliates

AFC Gamma, Inc. and any of its Affiliates Measure 8 Venture Partners and any of its Affiliates

 

 

 

 

 

 

 

 

 

 

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SCH. 11.1

 

 

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EXHIBIT A

FORM OF DISBURSEMENT REQUEST PELORUS FUND REIT, LLC

▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Attn: ▇▇▇ ▇▇▇▇▇▇▇

Email: ▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇

 

Re: (“Borrower”) Loan # (“Loan”)

 

Ladies and Gentlemen:

 

Pursuant to the terms of that certain Loan Agreement dated as of [ ], 202_ (the “Loan Agreement”), and the representations, warranties and covenants set forth therein and herein, Borrower hereby submits a disbursement request for the amount of $[ ]. Initially capitalized terms used but not defined herein shall have the same meanings as in the Loan Agreement

 

This disbursement request (this “Request”) shall be deemed to be a representation by ▇▇▇▇▇▇▇▇ and the person/entity signing this Request in its capacity as authorized representative of Borrower (in the case of the person/entity signing this Request, to person’s/entity’s knowledge) that: (a) no Event of Default or Default has occurred or will exist upon the making of the disbursement requested herein; (b) the representations and warranties contained in the Loan Agreement and in the other Loan Documents are, as of the date hereof, true, correct and complete in all material respects; (c) all information set forth in this Request and on any exhibit attached hereto is true, correct and complete in all material respects; and (d) all conditions precedent to the disbursement to be made in connection with this Request as required under the Loan Agreement and the other Loan Documents have been satisfied.

 

This Request is submitted as of , 20 .

 

[BORROWER], a [ ]

 

By: Name: Title:

 

 

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EXHIBIT A-1

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is hereby made to the Credit Agreement dated as of [ ] (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among TERRASCEND NJ LLC a New Jersey limited liability company (“TerrAscend NJ”), HMS HAGERSTOWN, LLC a Delaware limited liability company (“MD Propco”), HMS PROCESSING, LLC, a Maryland limited liability company (“MD Opco 1”), HMS HEALTH, LLC, a Maryland limited liability company (“MD Opco 2” and, together with MD Opco 1, individually and collectively, as the context may require, “MD Opco”; each of TerrAscend NJ, MD Propco and MD Opco are referred to herein individually and collectively, as the context may require, as “Borrower”), TERRASCEND CORP., an Ontario corporation (“Canadian Parent”), TERRASCEND USA, INC., a Delaware corporation (“American Parent” and, together with Canadian Parent, individually and collectively, as the context may require, “Parent”), WELL AND GOOD, INC., a Delaware corporation, and WDB HOLDING MD, INC., a Maryland corporation (Well and Good, Inc., and WDB Holding MD, Inc. are referred to herein individually and collectively, as the context may require, as “Guarantor”), and PELORUS FUND REIT, LLC, a Delaware limited liability company (together with its successors and/or assigns, “Lender”), and each lender from time to time party thereto.

 

Pursuant to the provisions of Section 2.15 of the Credit Agreement, the undersigned hereby certifies that

(i) it is the sole record and beneficial owner of the Loan (as well as any Note evidencing such Loan) in respect of which it is providing this certificate, (ii) it is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a “10 percent shareholder” of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and (iv) it is not a “controlled foreign corporation” related to the Borrower as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished the Borrower with a certificate of its non-U.S. Person status on IRS Form W- 8BEN or IRS Form W-8BEN-E. By executing this certificate, the undersigned agrees that (1) if the information provided in this certificate changes, the undersigned shall promptly so inform the Borrower, and (2) the undersigned shall have at all times furnished the Borrower with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

 

 

[NAME OF ▇▇▇▇▇▇]

 

 

By: Name:

Title:

 

Date: , 20[ ]

 

 

313271651.15

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EXHIBIT A-2

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is hereby made to the Credit Agreement dated as of [ ] (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among TERRASCEND NJ LLC a New Jersey limited liability company (“TerrAscend NJ”), HMS HAGERSTOWN, LLC a Delaware limited liability company (“MD Propco”), HMS PROCESSING, LLC, a Maryland limited liability company (“MD Opco 1”), HMS HEALTH, LLC, a Maryland limited liability company (“MD Opco 2” and, together with MD Opco 1, individually and collectively, as the context may require, “MD Opco”; each of TerrAscend NJ, MD Propco and MD Opco are referred to herein individually and collectively, as the context may require, as “Borrower”), TERRASCEND CORP., an Ontario corporation (“Canadian Parent”), TERRASCEND USA, INC., a Delaware corporation (“American Parent” and, together with Canadian Parent, individually and collectively, as the context may require, “Parent”), WELL AND GOOD, INC., a Delaware corporation, and WDB HOLDING MD, INC., a Maryland corporation (Well and Good, Inc., and WDB Holding MD, Inc. are referred to herein individually and collectively, as the context may require, as “Guarantor”), and PELORUS FUND REIT, LLC, a Delaware limited liability company (together with its successors and/or assigns, “Lender”), and each lender from time to time party thereto.

 

Pursuant to the provisions of Section 2.15 of the Credit Agreement, the undersigned hereby certifies that

(i) it is the sole record and beneficial owner of the participation in respect of which it is providing this certificate, (ii) it is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a “10 percent shareholder” of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and (iv) it is not a “controlled foreign corporation” related to the Borrower as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished its participating Lender with a certificate of its non-U.S. Person status on IRS Form W-8BEN or IRS Form W-8BEN-E. By executing this certificate, the undersigned agrees that

(1) if the information provided in this certificate changes, the undersigned shall promptly so inform such Lender in writing, and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

 

 

[NAME OF PARTICIPANT]

 

 

By: Name:

Title:

 

Date: , 20[ ]

 

 

313271651.15

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EXHIBIT A-3

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is hereby made to the Credit Agreement dated as of [ ] (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among TERRASCEND NJ LLC a New Jersey limited liability company (“TerrAscend NJ”), HMS HAGERSTOWN, LLC a Delaware limited liability company (“MD Propco”), HMS PROCESSING, LLC, a Maryland limited liability company (“MD Opco 1”), HMS HEALTH, LLC, a Maryland limited liability company (“MD Opco 2” and, together with MD Opco 1, individually and collectively, as the context may require, “MD Opco”; each of TerrAscend NJ, MD Propco and MD Opco are referred to herein individually and collectively, as the context may require, as “Borrower”), TERRASCEND CORP., an Ontario corporation (“Canadian Parent”), TERRASCEND USA, INC., a Delaware corporation (“American Parent” and, together with Canadian Parent, individually and collectively, as the context may require, “Parent”), WELL AND GOOD, INC., a Delaware corporation, and WDB HOLDING MD, INC., a Maryland corporation (Well and Good, Inc., and WDB Holding MD, Inc. are referred to herein individually and collectively, as the context may require, as “Guarantor”), and PELORUS FUND REIT, LLC, a Delaware limited liability company (together with its successors and/or assigns, “Lender”), and each lender from time to time party thereto.

 

Pursuant to the provisions of Section 2.15 of the Credit Agreement, the undersigned hereby certifies that

(i) it is the sole record owner of the participation in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such participation, (iii) with respect to such participation, neither the undersigned nor any of its direct or indirect partners/members is a “bank” extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a “10 percent shareholder” of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and

(v) none of its direct or indirect partners/members is a “controlled foreign corporation” related to the Borrower as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished its participating Lender with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption:

(i) an IRS Form W-8BEN or IRS Form W-8BEN-E or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or IRS Form W-8BEN-E from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided in this certificate changes, the undersigned shall promptly so inform such Lender and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

 

 

[NAME OF PARTICIPANT]

 

 

By: Name:

Title:

 

 

313271651.15

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Date: , 20[ ]

 

 

313271651.15

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EXHIBIT A-4

 

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is hereby made to the Credit Agreement dated as of [ ] (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among TERRASCEND NJ LLC a New Jersey limited liability company (“TerrAscend NJ”), HMS HAGERSTOWN, LLC a Delaware limited liability company (“MD Propco”), HMS PROCESSING, LLC, a Maryland limited liability company (“MD Opco 1”), HMS HEALTH, LLC, a Maryland limited liability company (“MD Opco 2” and, together with MD Opco 1, individually and collectively, as the context may require, “MD Opco”; each of TerrAscend NJ, MD Propco and MD Opco are referred to herein individually and collectively, as the context may require, as “Borrower”), TERRASCEND CORP., an Ontario corporation (“Canadian Parent”), TERRASCEND USA, INC., a Delaware corporation (“American Parent” and, together with Canadian Parent, individually and collectively, as the context may require, “Parent”), WELL AND GOOD, INC., a Delaware corporation, and WDB HOLDING MD, INC., a Maryland corporation (Well and Good, Inc., and WDB Holding MD, Inc. are referred to herein individually and collectively, as the context may require, as “Guarantor”), and PELORUS FUND REIT, LLC, a Delaware limited liability company (together with its successors and/or assigns, “Lender”), and each lender from time to time party thereto.

 

Pursuant to the provisions of Section 2.15 of the Credit Agreement, the undersigned hereby certifies that

(i) it is the sole record owner of the Loan (as well as any Note evidencing such Loan) in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such Loan (as well as any Note evidencing such Loan), (iii) with respect to the extension of credit pursuant to this Credit Agreement or any other Loan Document, neither the undersigned nor any of its direct or indirect partners/members is a “bank” extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a “10 percent shareholder” of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a “controlled foreign corporation” related to the Borrower as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished the Borrower with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or IRS Form W-8BEN-E or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or IRS Form W-8BEN-E from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided in this certificate changes, the undersigned shall promptly so inform the Borrower, and (2) the undersigned shall have at all times furnished the Borrower with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

 

 

313271651.15

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Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

 

 

[NAME OF ▇▇▇▇▇▇]

 

 

By: Name:

Title:

 

Date: , 20[ ]

 

 

313271651.15

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EXHIBIT B

 

DEFINITION OF “SPECIAL PURPOSE ENTITY”

 

“Special Purpose Entity” means a Person, other than an individual, which, since the date of its formation and at all times prior to, on and after the date thereof, has complied with and shall at all times comply with the following requirements:

 

 

 

Property;

 

permitted by law, not engage in, seek or consent to, (i) any dissolution, winding up, liquidation, consolidation, merger, or sale of all or substantially all of its assets, (ii) except as permitted under the terms of this Agreement, any transfer of partnership or membership interests (if such entity is a general partner in a limited partnership or a member in a limited liability company), or (iii) any amendment of its limited partnership agreement, articles of incorporation, articles of organization, certificate of formation or operating agreement (as applicable) with respect to the matters set forth in this definition without the written consent of ▇▇▇▇▇▇;

 

 

 

 

 

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not constitute a claim against such Person in the event that cash flow in excess of the amount required to pay the Obligations is insufficient to pay such obligation;

 

 

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