LOAN AND SECURITY AGREEMENT by and among Vireo Growth Inc. and the Other Persons Identified as Borrowers on the Signature Pages Hereto, as Borrowers, the other Borrowers from time to time party hereto, the Guarantors from time to time party hereto,...
Exhibit 10.2
Certain identified information has been redacted because it is information the registrant customarily and actually treats as private and confidential and is not material. Redacted information is indicated by “[***]”.
by and among
Vireo Growth Inc. and the Other Persons Identified as Borrowers on the Signature Pages Hereto,
as Borrowers,
the other Borrowers from time to time party hereto,
the Guarantors from time to time party hereto,
the creditors from time to time party hereto as ▇▇▇▇▇▇▇,
CHICAGO ATLANTIC ADMIN, LLC,
as Administrative Agent,
CHICAGO ATLANTIC ADMIN, LLC,
as Collateral Agent,
and
CHICAGO ATLANTIC CREDIT ADVISERS, LLC,
as Lead Arranger
Dated as of July 3, 2025
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TABLE OF CONTENTS
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TABLE OF CONTENTS
(continued)
EXHIBITS
A-Definitions
B-Collateral Description
C-Compliance Certificate
D-Assignment and Assumption
E-Reserved
F-Promissory Note
G-Convertible Loan Note
SCHEDULES
Permitted Indebtedness (Schedule A-1)
Permitted Investments (Schedule A-2)
Permitted Liens (Schedule A-3)
[Reserved] (Schedule A-4)
Regulatory Licenses (Schedule A-5)
Nevada Regulatory Licenses (Schedule A-6)
HA-MD Transaction (Schedule A-7)
Northeast B Transaction (Schedule A-8)
Adjusted EBITDA (Schedule A-9)
[Reserved] (Schedule A-10)
Specified Tax Receivables (Schedule A-11)
Lender Commitments and Aggregate Exposure Percentages (Schedule 1.1)
Deposit Accounts (Schedule 5.5)
[Reserved] (Schedule 4.1(j))
Capitalization (Schedule 6.1(b))
Subsidiaries and Affiliates (Schedule 6.1(c))
Governmental Consents (Schedule 6.4)
Intellectual Property (Schedule 6.9)
ERISA Matters (Schedule 6.11(a))
Canadian Pension Plans (Schedule 6.11(b))
Names (Schedule 6.14(a))
Chief Executive Office (Schedule 6.14(b))
Real Property Owned or Leased (Schedule 6.14(c))
Litigation (Schedule 6.15(a))
Commercial Tort Claims (Schedule 6.15(b))
Affiliate Transactions (Schedule 6.20)
Post-Closing Obligations (Schedule 7.22)
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This LOAN AND SECURITY AGREEMENT (as amended, modified or supplemented from time to time, this “Agreement”), dated as of July 3, 2025, is entered into by and among VIREO GROWTH INC., a corporation formed under the laws of the province of British Columbia (“Parent”), and each of the other Persons identified as borrowers on the signature pages hereto (together with Parent, each, individually, a “Borrower” and collectively, jointly and severally, “Borrowers”), the Guarantors from time to time party hereto, the creditors from time to time party hereto as Lenders, CHICAGO ATLANTIC ADMIN, LLC, a Delaware limited liability company (“Chicago Atlantic”), as Administrative Agent for Lenders (with its successors and permitted assigns in such capacity, “Administrative Agent”), Chicago Atlantic, as collateral agent for Secured Creditors (together with its successors and permitted assigns in such capacity, “Collateral Agent;” together with Administrative Agent, each, an “Agent,” and collectively, “Agents”), and CHICAGO ATLANTIC CREDIT ADVISERS, LLC, as lead arranger (in such capacity, “Lead Arranger”).
RECITALS
Borrowers wish to obtain credit from time to time from Lenders, and ▇▇▇▇▇▇▇ desire to extend credit to Borrowers. This Agreement sets forth the terms on which Lenders will extend credit to Borrowers and Borrowers will repay the amounts owing to Lenders.
AGREEMENT
The parties agree as follows:
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interpretation means as amended, modified, codified, replaced or reenacted, in whole or in part, and in effect on the determination date, including rules and regulations promulgated thereunder. “Knowledge” or similar concept means actual knowledge of a Responsible Officer, or knowledge that a Responsible Officer would have obtained if he or she had engaged in good faith and diligent performance of his or her duties. All references in any Loan Document to the consent, discretion, or satisfaction of, acceptability to or approval by any Agent or any Lender shall be deemed to mean the consent, discretion or satisfaction of, acceptability to or approval by such Agent or such Lender in its sole and absolute discretion, except as otherwise expressly provided in the applicable Loan Document.
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▇.▇▇ the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Loan Document, executed originals of IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;
b.executed originals of IRS Form W-8ECI;
▇.▇▇ the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 871(h) or Section 881(c) of the Code, (x) a certificate substantially in form and substance reasonably satisfactory to Administrative Agent 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 a Loan Party within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y) executed originals of IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable; or
▇.▇▇ the extent a Foreign Lender is not the beneficial owner, executed originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, a U.S. Tax Compliance Certificate in form and substance reasonably satisfactory to Administrative Agent, IRS Form W-9, 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 in form and substance reasonably satisfactory to Administrative Agent on behalf of each such direct and indirect partner;
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The request and acceptance by Borrowers of the proceeds of the Loans on the Effective Date shall be deemed to constitute, as of the closing, a representation and warranty by each Loan Party on the Effective Date as to the accuracy of the facts referred to in this Section 4.1.
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and other custodial arrangements satisfactory to Collateral Agent, (d) subject to Section 7.22, (i) delivering to Collateral Agent such executed Lien Waivers and Collateral Assignments of Leases as Collateral Agent shall reasonably request with respect to any leased Real Property at which the any Loan Party conducts cultivation, processing, manufacturing, distribution or similar activities which, for the avoidance of doubt, will not include any leased Real Property operating as a dispensary or retail location, and (ii) using commercially reasonable efforts to deliver such executed Lien Waivers and Collateral Assignments of Leases as Collateral Agent shall reasonably request with respect to any leased Real Property which is not utilized by the Loan Parties for cultivation, processing, manufacturing, distribution or similar activities (i.e., any leased Real Property operating as a dispensary or retail location), and (e) executing and delivering financing statements, Control Agreements (to the extent required hereunder), instruments of pledge, notices and assignments, in each case in form and substance reasonably acceptable to Collateral Agent, relating to the creation, validity, perfection, maintenance or continuation of Collateral Agent’s security interest and Lien under the UCC, PPSA or other Applicable Law. Each Loan Party shall have possession of the Collateral except where expressly otherwise provided in this Agreement or where Collateral Agent chooses to perfect its security interest by possession in addition to the filing of a financing statement. No Loan Party will create any Chattel Paper without placing a legend on the Chattel Paper reasonably acceptable to Collateral Agent indicating that Collateral Agent has a security interest in the Chattel Paper. Each Loan Party shall provide Collateral Agent with prompt written notice of all Commercial Tort Claims where the amount claimed or under dispute is equal to or greater than $575,000, such notice to contain a brief description of the claims, and the case title together with the applicable court and docket number. Upon delivery of each such notice, such Loan Party shall be deemed to thereby grant to Collateral Agent a security interest and lien in and to such Commercial Tort Claims described therein and all proceeds thereof. Each Loan Party shall provide Collateral Agent with written notice promptly upon becoming the beneficiary under any letter of credit or otherwise obtaining any right, title or interest in any Letter-of-Credit Rights having an undrawn face amount of $575,000 or more, and at Collateral Agent’s request shall take such actions as Collateral Agent may reasonably request for the perfection of Collateral Agent’s security interest therein. Any Loan Party from time to time may deposit with Collateral Agent specific cash collateral to secure specific Obligations; each Loan Party authorizes Collateral Agent to hold such specific balances in pledge for so long as the specific Obligations are outstanding. Each Loan Party authorizes Collateral Agent to file at any time financing statements, continuation statements and amendments thereto that (x) either specifically describe the Collateral as “all assets” or “all present or after-acquired personal property” of such Loan Party and (y) contain any other information required by the UCC or PPSA for the sufficiency of filing office acceptance of any financing statement, continuation statement or amendment, including whether such Loan Party is an organization, the type of organization and any organizational identification number issued to such Loan Party, if applicable. Notwithstanding anything to the contrary herein, and for the avoidance of doubt, Administrative Agent acknowledges and agrees that any notice required pursuant to this Section 5.2 will be satisfied by the Loan Parties providing Administrative Agent a copy of any filing one or more Loan Parties makes relating to this Agreement with the Securities and Exchange Commission or the Canadian Securities Exchange, to the extent such filing contains the information required by this Section 5.2 with respect to the applicable event or occurrence.
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an Event of Default, Collateral Agent may effect the transfer of the Shares into the name of Collateral Agent and cause new certificates representing such securities to be issued in the name of Collateral Agent or its Transferee and shall thereafter have the right to exercise all voting rights with respect to the Shares. The Loan Parties will execute and deliver such documents, and take or cause to be taken such actions, as Collateral Agent may reasonably request to perfect or continue the perfection of Collateral Agent’s security interest in the Shares Collateral.
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Each Loan Party represents and warrants as follows:
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provision of the Operating Documents of any Loan Party, or any order, judgment, or decree of any court or other Governmental Authority binding on any Loan Party, (ii) conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any Material Contract of any Loan Party, (iii) result in or require the creation or imposition of any Lien of any nature whatsoever upon any assets of any Loan Party, other than Permitted Liens, or (iv) require any approval of any holder of Equity Interests of a Loan Party, or any approval or consent of any Person under any Material Contract of a Loan Party, other than consents or approvals that have been obtained and that are still in force and effect.
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Loan Party’s incurring any liability that would reasonably be expected have a Material Adverse Effect. Each Loan Party and its properties (including the Mortgaged Properties and its Subsidiaries), business operations and leaseholds are in compliance in all material respects with all Applicable Laws, including all Applicable Cannabis Laws (other than possible violation of U.S. Federal Cannabis Laws, provided that the Loan Parties are not aware of any actual investigations, actions or threatened suits or actions under such laws). The Loan Parties have obtained (or have caused to be obtained) all (a) Required Permits and Approvals and (b) all other Permits that are required by any Governmental Authority to permit it to conduct and operate any Loan Party’s or their respective Subsidiaries’ business as such is conducted on the Effective Date, pursuant to any Applicable Law, and all such Required Permits and Approvals and other Permits are in full force and effect and all appeal periods permitting the challenge of the issuance of such Required Permits and Approvals and other Permits, as applicable, have expired. No Loan Party: (x) has any material liability for Tax Liabilities, material Contingent Obligations or liabilities or long-term commitments which are not shown in the balance sheets included in its most recent financial statements submitted to Administrative Agent or noted therein; or (y) as of the Effective Date, has made or filed (or caused to be made or filed by all Persons responsible for reporting the income of the Loan Parties) all Federal, state, provincial, local and foreign income and all other Tax returns, reports and declarations required by the jurisdiction(s) to which the Loan Parties are subject and has paid all taxes on other governmental assessments and charges shown or which should be shown on such returns, reports and declarations. The Specified Tax Receivables set forth on Schedule A-11 represent receivables reported on the financial statements of the Loan Parties in respect of Taxes previously paid by the Loan Parties.
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(upon the happening of a contingency or otherwise) any of its property, whether now owned or hereafter acquired, to be subject to a Lien which is not a Permitted Lien.
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certificates and written statements furnished to Administrative Agent contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained in such certificates or statements not materially misleading, it being recognized by Administrative Agent that the projections and forecasts provided by any Loan Party in good faith and based upon reasonable assumptions are not to be viewed as facts and that actual results during the period or periods covered by any such projections and forecasts may differ from the projected or forecasted results.
Until payment in full of all outstanding Obligations, each Loan Party hereby agrees as follows:
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Borrower-Agent may deliver to Administrative Agent on an electronic basis any certificates, reports or information required pursuant to this Section 7.2, and Administrative Agent and Lenders shall be entitled to rely on the information contained in the electronic files, provided that Administrative Agent in good faith believes that the files were delivered by a Responsible Officer. If Borrower-Agent delivers any such information electronically, Borrower-Agent shall also deliver such information to Administrative Agent by U.S. Mail, reputable overnight courier service, hand delivery,
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facsimile or .pdf file within five Business Days after Borrower-Agent’s electronic submission of such information.
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All of the foregoing notices shall be provided by Borrower-Agent to Administrative Agent in writing and shall describe the steps being taken by any Loan Party or any Subsidiary affected thereby with respect thereto.
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shall bear interest at the highest rate then applicable to the Loans hereunder. Notwithstanding anything to the contrary, so long as no Event of Default exists, the Loan Parties shall not be obligated to pay for more than one field exam during any consecutive 12-month period. If an Event of Default exists, and notwithstanding anything to the contrary in the foregoing, there shall be no limitation on the number or frequency of field examinations, which shall be conducted at the expense of the Loan Parties.
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terms of the Missouri Acquisition as of the Effective Date without the prior written consent of Administrative Agent, such consent not to be unreasonably conditioned, delayed or withheld, except for any amendments, variances, supplements, terminations or other modifications of or to any Missouri Acquisition Document which are not materially adverse to the interests of Agents or Lenders (it being acknowledged and agreed that any incurrence or retention of Indebtedness with respect to any Target of the Missouri Acquisition (other than the Indebtedness contemplated hereby) or any materially adverse modification to the economic terms of the Missouri Acquisition shall require the prior written consent of Administrative Agent, such consent not to be unreasonably conditioned, delayed or withheld). The Loan Parties shall promptly supply to Administrative Agent a copy of any amendment, modification, supplement, termination or waiver of the Missouri Acquisition Documents. The Loan Parties shall provide Administrative Agent with at least five Business Days prior written notice of the closing of each transaction contemplated by the Missouri Acquisition Documents, and concurrently with each such closing, to the extent the Target thereof or assets acquired thereby is not already a Loan Party or subject to the security interest of Collateral Agent (for the benefit of Secured Creditors), as applicable, the Loan Parties shall cause each such Target of the Missouri Acquisition to join this Agreement as a Borrower or Guarantor (as determined by Administrative Agent), grant to Collateral Agent, for the benefit of Secured Creditors, a security interest in their real, personal and mixed property to secure the Obligations, cause their Equity Interest to be pledged to Collateral Agent, for the benefit of Secured Creditors (in each case, pursuant to such agreements, instruments or other documents that are, in form and substance reasonably satisfactory to Agents), and otherwise satisfy, or cause to be satisfied, the requirements of Sections 7.17, 7.19 and 7.25 with respect to the Targets and other assets not consisting of Collateral that are acquired in the Missouri Acquisition. Promptly, but in any event with 10 days, following the closing of that portion of the Missouri Acquisition pursuant to which Guarantors become Subsidiaries of Parent, the Loan Parties shall make, execute, endorse, acknowledge, or deliver to Agents any such joinders, agreements, certificates, instruments and other documents and take such further steps, in each case, in form and substance reasonably satisfactory to Agents, necessary to join Guarantors as Borrowers under this Agreement and the other Loan Documents.
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case, pursuant to such agreements (including, a pledge agreement and limited recourse guaranty), instruments or other documents that are, in form and substance, reasonably satisfactory to Agents).
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Until the outstanding Obligations are paid in full, each Loan Party hereby agrees as follows:
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for Inventory sold in the ordinary course of business and except for such other locations as Administrative Agent may approve in writing and for Collateral in transit, each Loan Party shall keep the Inventory and Equipment only at the locations set forth in Schedule 6.14(c) or of which Loan Party gives Agents prior written notice.
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the Mortgages, (b) enter into, amend, restate or modify in any material respect, or waive any material rights under any (i) Material Property Agreement or (ii) other Material Contract, except in the ordinary course of business of the Loan Parties and to the extent not materially adverse to the interests of Agents or Lenders.
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Administrative Agent and Collateral Agent may comply with any applicable state, provincial, local, foreign or federal law requirements in connection with a disposition of the Collateral and compliance will not be considered adversely to affect the commercial reasonableness of any sale of the Collateral.
(a)Designation of a Different Lending or Issuing Office. If any Lender requests compensation under Section 2.5, or requires the Loan Parties to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.9, then such Lender shall (at the request of Borrower-Agent) use reasonable efforts to, as applicable, designate a different lending or issuing office for funding or booking its Loans hereunder or issuing Loans or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.5 or 2.9, as the case may be, in the future, and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Loan Parties hereby agree to pay all reasonable, documented out-of-pocket costs and expenses incurred by such Lender in connection with any such designation or assignment.
(b)Replacement of Lenders. If any Lender requests compensation under Section 2.5, or if a Borrower is required to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.9 and, in each case, such Lender has declined or is unable to designate a different lending or issuing office in accordance with Section 10.2(a), or if any Lender is a Defaulting Lender or a Non-Consenting Lender, then Borrower-Agent may, at its sole expense and effort, upon notice to such Lender and Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 10.4), all of its interests, rights (other than its existing rights to payments pursuant to Section 2.4, 2.5 or 2.9) and obligations under this Agreement and the related Loan Documents to an Eligible Assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that:
(i)Borrower-Agent shall have paid to Administrative Agent the assignment fee (if any) specified in Section 14.1;
(ii)such Lender shall have received, as applicable, payment of an amount equal to the outstanding principal of its Loans and participations in Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 2.4) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Loan Parties (in the case of all other amounts);
(iii)in the case of any such assignment resulting from a claim for compensation under Section 2.5 or payments required to be made pursuant to Section 2.9, such assignment will result in a reduction in such compensation or payments thereafter;
(iv)such assignment does not conflict with Applicable Law; and
(v)in the case of any assignment resulting from a Lender becoming a Non-Consenting Lender, the applicable assignee shall have consented to the applicable amendment, waiver or consent.
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A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling Borrowers to require such assignment and delegation cease to apply.
Each party hereto agrees that (x) an assignment required pursuant to this Section 10.2(b) may be effected pursuant to an Assignment and Assumption executed by Borrower-Agent, Administrative Agent, the assignee, each Agent and (y) the Lender required to make such assignment need not be a party thereto in order for such assignment to be effective and shall be deemed to have consented to and be bound by the terms thereof; provided that, following the effectiveness of any such assignment, the other parties to such assignment agree to execute and deliver such documents necessary to evidence such assignment as reasonably requested by the applicable Lender; provided, further, that any such documents shall be without recourse to or warranty by the parties thereto
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First, to the payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts (other than principal and interest but including any expenses related to the exercise of remedies against the Collateral, fees, charges and disbursements of counsel to Agents) payable hereunder or under the Fee Letter to any Agent or Lead Arranger in its capacity as such (including interest thereon));
Second, to payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts payable to Lenders, in each case, ratably among Lenders in proportion to the respective amounts described in this clause Second payable to them;
Third, to payment of that portion of the Obligations constituting accrued and unpaid interest on the Loans, in each case, ratably among Lenders in proportion to the respective amounts described in this clause Third payable to them;
Fourth, to payment of that portion of the Obligations constituting unpaid principal of the Loans, in each case, ratably among Lenders in proportion to the respective amounts described in this clause Fourth held by them;
Fifth, to the payment of all other Obligations of the Loan Parties that are then due and payable to Administrative Agent and the other Secured Creditors on such date, in each case, ratably among them in proportion to the respective aggregate amounts of all such Obligations owing to Administrative Agent and to the other Secured Creditors on such date; and
Last, the balance, if any, after all of the Obligations (other than Inchoate Obligations) have been paid in full (excluding, for this purpose, any Obligations which have been cash collateralized in accordance with the terms hereof), to the Loan Parties or as otherwise required by Applicable Law.
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No Agent shall be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of Lenders as shall be necessary, or as such Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 10.1 and 14.6), or (ii) in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by final and non-appealable judgment.
No Agent shall be responsible for or have any duty to ascertain or inquire into (v) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, w) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (x) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Event of Default, (y) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document or (z) the satisfaction of any condition set forth in Section 4.1 or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to such Agent.
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Agreement and the other Loan Documents in accordance with a request of the Required Lenders (or such other number or percentage of Lenders as shall be provided for herein or in the other Loan Documents), and such request and any action taken or failure to act pursuant thereto shall be binding upon Lenders and all future holders of the Loans.
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Lead Arranger or such other Person under or in connection with any of the foregoing and any other amounts not reimbursed by the Loan Parties; provided that no Lender shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements that are found by a final and non-appealable decision of a court of competent jurisdiction to have resulted primarily from such Agent’s, Lead Arranger’s or such other Person’s gross negligence or willful misconduct. The agreements in this Section shall survive the termination of the Commitments and the payment of the Loans and all other amounts payable hereunder.
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and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments to Administrative Agent and, in the event that Administrative Agent shall consent to the making of such payments directly to Lenders, to pay to Administrative Agent, for the benefit of Agents, any amount due for the reasonable compensation, expenses, disbursements and advances of Administrative Agent and its agents and counsel, and any other amounts due Administrative Agent or the other Agents under Sections 2.4, 2.6 and 14.2.
Nothing contained herein shall be deemed to authorize Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender to authorize Administrative Agent to vote in respect of the claim of any Lender in any such proceeding.
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If to the Loan Parties:c/o Borrower-Agent
▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇
Minneapolis, MN 55402
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Assistant General Counsel
with a copy (which shall not constitute notice) to:
Dentons US LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Suite 5900
Chicago, IL 60606-6361
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇ | ▇▇▇ ▇▇▇▇▇
Email: ▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇ | ▇▇▇.▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
If to Administrative Agent,
Collateral Agent or an Affiliate
thereof:
Chicago Atlantic Admin, LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
Chicago, Illinois 60611
Attn: Loan Department
E-mail: ▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
with an additional copy (which shall not constitute notice) to:
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
Atlanta, Georgia 30309
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
E-mail: ▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
The parties hereto may change the address at which they are to receive notices hereunder, by notice in writing in the foregoing manner given to the other. All such notices or demands shall be effective when received on a Business Day (or, if not received on a Business Day, on the first Business Day after receipt).
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Subject to acceptance and recording thereof by Administrative Agent pursuant to Section 14.1(c) and entry in the Register, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of
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this Agreement with respect to facts and circumstances occurring prior to the effective date of such assignment; provided that except to the extent otherwise expressly agreed by the affected parties, no assignment by a Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from such ▇▇▇▇▇▇’s having been a Defaulting Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with Section 14.1(d).
Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver which affects such Participant and for which the consent of such Lender is required. Each Loan Party agrees that each Participant shall be entitled to the benefits of Sections 2.8(c), and 2.9 through the Lender granting such participation (and, for the avoidance of doubt, shall have no direct rights against the Loan Parties) (subject to the requirements and limitations therein, including the requirements under Section 2.9(f) (it being understood that the documentation required under Section 2.9(f) shall be delivered to such Participant)) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to Section 14.1(b); provided that such Participant shall not be entitled to receive any greater payment under Section 2.8(c), with respect to any participation, than its participating Lender would have been entitled to receive. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 14.7 as though it were a Lender; provided that such Participant agrees to be subject to Section 2.8(f) as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as an agent of Borrowers, maintain a register on which it enters the name and address of each Participant and the principal amount (and stated interest) of each Participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under
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Section 5f.103-1(c) of the United States Treasury Regulations or such disclosure is otherwise required thereunder. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, no Agent (in its capacity as an Agent) shall have any responsibility for maintaining a Participant Register.
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Any such waiver and any such amendment, supplement or modification shall apply equally to each of Lenders and shall be binding upon the Loan Parties, Lenders, Agents, and all future holders of the Loans. In the case of any waiver, each Loan Party, Lenders and Agents shall be restored to their former position and rights hereunder and under the other Loan Documents, and any Event of Default waived shall be deemed to be cured during the period such waiver is effective; but no such waiver shall extend to any subsequent or Event of Default, or impair any right consequent thereon.
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the party executing this Agreement or any other Loan Document (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page or other signature page with an Electronic Signature were an original hereof or thereof.
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accordance with the Patriot Act and the Proceeds of Crime Money Laundering and Terrorist Financing Act (Canada). The Loan Parties shall, promptly following a written request by any Agent or any Lender, provide all documentation and other information that such Agent or Lender requests in order to comply with its ongoing obligations under applicable “know your customer” and anti-money-laundering rules and regulations, including the Patriot Act. For legal entity borrowers, each Lender or Agent will require the legal entity to provide identifying information about each beneficial owner or individuals who have significant responsibility to control, manage or direct the legal entity.
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[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective duly authorized officers as of the date first above written.
BORROWERS:
VIREO HEALTH, INC.
VERDANT GROVE, LLC
VIREO HEALTH OF PUERTO RICO, LLC
VIREO HEALTH DE PUERTO RICO LLC
MARYMED LLC
VIREO OF CHARM CITY, LLC
RESURGENT BIOSCIENCES, INC.
RETAIL MANAGEMENT ASSOCIATES, LLC
VIREO HEALTH OF NEVADA I, LLC
MJ DISTRIBUTING C201, LLC
MJ DISTRIBUTING P132, LLC
VIREO PR MERGER SUB INC.
VIREO PR MERGER SUB II INC.
By:/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name:▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title:Chief Executive Officer
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ LLC
HICOLOR, LLC
VIREO HEALTH OF MINNESOTA, LLC
VIREO HEALTH OF NEW YORK LLC
VIREO MARKETING, LLC
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
Name:▇▇▇▇▇ ▇▇▇▇▇▇
Title:Chief Executive Officer
DEEP ROOTS HOLDINGS, INC.
DEEP ROOTS OPERATING, INC.
DEEP ROOTS HARVEST, INC.
DEEP ROOTS PROPERTIES, LLC
DEEP ROOTS ARIA ACQCO, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Name:▇▇▇▇▇ ▇▇▇▇▇▇▇
Title:Chief Executive Officer
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WHOLESOMECO, INC.
WHOLESOME AG, LLC
WHOLESOME GOODS, LLC
WHOLESOME THERAPY, LLC
WHOLESOME DIRECT, LLC
WC STAFFING, LLC
ARCHES IP, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Name:▇▇▇▇▇ ▇▇▇▇▇▇▇
Title:Chief Executive Officer
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AGENTS, LEAD ARRANGER AND ▇▇▇▇▇▇▇:
CHICAGO ATLANTIC ADMIN, LLC,
as Administrative Agent and Collateral Agent
By:/s/ ▇▇▇▇▇ ▇▇▇▇
Name:▇▇▇▇▇ ▇▇▇▇
Title:Authorized Person
CHICAGO ATLANTIC CREDIT ADVISERS, LLC,
as Lead Arranger
By:/s/ ▇▇▇▇▇ ▇▇▇▇
Name:▇▇▇▇▇ ▇▇▇▇
Title:Authorized Person
CHICAGO ATLANTIC OPPORTUNITY FINANCE, LLC, as a Lender
By:/s/ ▇▇▇▇▇ ▇▇▇▇
Name:▇▇▇▇▇ ▇▇▇▇
Title:Authorized Person
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EXHIBIT A
DEFINITIONS
“Account Debtor” means the Person obligated on an Account.
“Accounts” means all presently existing and hereafter arising accounts, contract rights, payment intangibles and all other forms of obligations owing to any Loan Party arising out of the sale or lease of goods (including the licensing of software and other technology) or the rendering of services by any Loan Party and any and all credit insurance, guaranties, and other security therefor, as well as all merchandise returned to or reclaimed by any Loan Party and any Loan Party’s Books relating to any of the foregoing.
“Acquired Non-Loan Party” means a Target acquired by a Loan Party in a transaction which is a Permitted Acquisition.
“Acquisition” means any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, whether by merger or otherwise, in (a) the acquisition of all or substantially all of the assets of any Person, business or division of a Person, or (b) the acquisition of in excess of 50.00% of the Equity Interests of any Person, or otherwise causing any Person to become a Subsidiary.
“Adjusted EBITDA” means, for any period, the sum of the Loan Parties’ and their Subsidiaries’: (a) net income after taxes for such period (excluding extraordinary gains or losses); plus (b) Interest Expense for such period; plus (c) income tax expense for such period; plus (d) depreciation and amortization for such period; plus or minus (e) any other non-cash charges or gains which have been subtracted or added in calculating net income after taxes for such period, all on a consolidated basis; plus (f) all out-of-pocket costs, fees and expenses paid in connection with (i) the execution and delivery of the Loan Documents, the Missouri Acquisition Documents, the Deep Roots Acquisition Documents and the Wholesome Acquisition Documents and the consummation of the transactions contemplated hereby or thereby, which out-of-pocket costs, fees and expenses for each such transaction are set forth on Schedule A-9, and (ii) any other Acquisition consummated after the Effective Date with the prior approval of Agents (excluding any Acquisition of an Excluded Subsidiary); provided, that amounts added back pursuant to this clause (f)(ii) shall not exceed $1,000,000 in the aggregate; plus (g) non-cash compensation expenses arising from the grant of stock-based awards by the Loan Parties; plus (h) severance expenses up to $1,000,000 in the aggregate incurred in any trailing 12-month period; plus (i) [reserved]; plus (j) Q4 of 2024 flood-related Missouri expenses amounting to $1,224,023; plus (k) 2024 Deep Roots start-up costs associated with the opening of their new dispensary, amounting to $488,318; plus (l) 2024 Deep Roots one-time non-cash inventory adjustment of $1,167,409; plus (m) those (i) litigation expenses and (ii) add-backs set forth on Schedule A-9; provided, however, Adjusted EBITDA shall not include the results of (x) any foreign Subsidiary of any Loan Party except to the extent that such foreign Subsidiary has repatriated its net income to such Loan Party, or (y) any Excluded Subsidiary.
“Administrative Agent” has the meaning set forth in the introductory paragraph hereto.
“Administrative Questionnaire” means an Administrative Questionnaire on Administrative Agent’s standard form.
“Affiliate” of any Person means (a) any Person which, directly or indirectly, is in control of, is controlled by, or is under common control with such Person, or (b) any Person who is a director, officer, manager, managing member or general partner (i) of such Person, (ii) of any Subsidiary of such Person or (iii) of any Person described in clause (a) above. For purposes of this definition, control of a Person means the power, direct or indirect, (x) to vote 15.00% or more of the Equity Interests having ordinary voting power for the
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election of directors of such Person or other Persons performing similar functions for any such Person, or (y) to direct or cause the direction of the management and policies of such Person whether by ownership of Equity Interests, contract or otherwise.
“Agent” and “Agents” are defined in the introductory paragraph hereto.
“Agreement” is defined in the introductory paragraph hereto.
“Aggregate Exposure” means, with respect to any Lender at any time, an amount equal to the amount of such ▇▇▇▇▇▇’s pro rata share of the outstanding principal amount of the Loans.
“Aggregate Exposure Percentage” means, with respect to any Lender at any time, the ratio (expressed as a percentage) of such ▇▇▇▇▇▇’s Aggregate Exposure at such time to the Aggregate Exposure of all Lenders at such time.
“Amortization Amount” means an amount equal to 1.00% of the aggregate principal amount of all Loans made by Lenders.
“Anti-Corruption Law” means all laws or rules related to bribery or anti-corruption and similar regulations or ordinances, including the United States Foreign Corrupt Practices Act of 1977, as amended, the UK Bribery Act 2010, as amended, the Criminal Code (Canada), as amended, the Corruption of Foreign Public Officials Act (Canada), as amended, and any anti-bribery legislation promulgated by the European Union and implemented by its member states.
“Anti-Terrorism Law” means any law, statute, treaty ordinance, rule or regulation in any jurisdiction in which any Loan Party or any of its Subsidiaries are located or doing business that relates to money laundering or financing terrorism, any predicate crime to money laundering, or any financial record keeping and reporting requirements related thereto including: (a) Canadian Anti-Terrorism Laws; and (b) the Patriot Act, The Currency and Foreign Transactions Reporting Act (31 U.S.C. §§ 5311-5330 and 12 U.S.C. §§ 1818(s), 1820(b) and 1951-1959) (also known as the “Bank Secrecy Act”), the Trading With the Enemy Act (50 U.S.C. § 1 et seq.) and Executive Order 13224 (effective September 24, 2001).
“Applicable Cannabis Laws” means the applicable state and local laws, statutes, rules, ordinances, regulations, codes, licenses, authorizations, decisions, injunctions, interpretations, orders or decrees of any court or other Governmental Authority of the Applicable States and each applicable municipality and other authority of, or within, the Applicable States pertaining to Cannabis, all as in effect and as amended from time to time.
“Applicable Securities Legislation” means all applicable securities laws of each of the Reporting Jurisdictions and the respective rules and regulations under such laws together with applicable published fee schedules, prescribed forms, policy statements, national or multilateral instruments, orders, blanket rulings and other applicable regulatory instruments of the securities regulatory authorities in any of the Reporting Jurisdictions.
“Applicable Fiscal Period” means the applicable fiscal quarter.
“Applicable Law” means, subject to the carve-outs and acknowledgments contained in Section 15, as to any Person, any law (including common law), statute, regulation, ordinance, rule, order, policy, decree, judgment, consent decree, writ, injunction, treaty, determination or governmental requirement enacted, promulgated or imposed by any Governmental Authority or any arbitrator, in each case applicable to or
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binding on such Person or any of its property, products, business, assets or operations or to which such Person or any of its property, products, business, assets or operations is subject.
“Applicable Margin” means (a) with respect to any Term Loan or Incremental Loan, 5.50%, and (b) with respect to any Convertible Loan, 5.00%.
“Applicable States” means, collectively, Maryland, Minnesota, Missouri, Nevada, New York and Utah, and each individually, is an “Applicable State”.
“Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.
“Assignment and Assumption” means an assignment and assumption in substantially of form of Exhibit D (or any other form approved by Administrative Agent), entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 14.1), and accepted by Administrative Agent.
“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.
“Bail-In Legislation” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.
“Bank Products” means any service or facility extended to any Loan Party by any Lender or any affiliate of a Lender, or procured for such Loan Party from any third party by any Lender or any affiliate of a Lender by means of a full-recourse agreement or other credit support extended to such third party including: (a) credit cards, (b) credit card processing services, (c) debit cards, (d) purchase cards, (e) ACH transactions, (f) cash management, including controlled disbursement, accounts or services, (g) letters of credit, or (h) Hedging Agreements.
“Bankruptcy Code” means the United States Bankruptcy Code (11 U.S.C. Section 101 et seq.).
“Bankruptcy Law” means the Bankruptcy Code, the Bankruptcy and Insolvency Act (Canada), the Companies’ Creditors Arrangement Act (Canada) and the Winding-Up and Restructuring Act (Canada), each as now and hereafter in effect, or any successors or subsequent amendments to such statutes, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, restructuring, dissolution, winding-up or similar debtor relief laws of the United States, Canada or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.
“Beneficial Ownership Certification” means a certification regarding beneficial ownership required by the Beneficial Ownership Regulation, which certification shall be substantially in form and substance satisfactory to Lender Parties.
“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230
“Benefitted Lender” is defined in Section 14.7(a).
“Borrower” and “Borrowers” are defined in the introductory paragraph hereto.
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“Borrower-Agent” means Parent.
“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the laws of, or are in fact closed in, the State of Illinois or the State of New York.
“Caliente Purchase Agreement” means that certain Asset Purchase Agreement, dated as of November 12, 2022, by and among [***], [***], and [***], in the form delivered to Administrative Agent prior to the Effective Date.
“Caliente Transaction Documents” means, collectively, the Caliente Purchase Agreement and the other documents entered into or delivered in connection therewith, in each case, in the form delivered to Administrative Agent prior to the Effective Date.
“Canadian Anti-Terrorism Laws” means (a) Part II.1 and related sections of the Criminal Code (Canada), the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada), the Regulations Implementing the United Nations Resolutions on the Suppression of Terrorism (Canada), the Anti-Terrorism Act (Canada), the Corruption of Foreign Public Officials Act (Canada), United Nations Al-Qaida and Taliban Regulations, the Special Economic Measures Act (Canada) and, in each case, all regulations, guidelines, and orders made thereunder or in connection therewith, as amended from time to time, and (b) any other applicable anti-money laundering, anti-terrorist financing, governments sanction, and “know-your-customer” laws in effect in Canada from time to time.
“Canadian Defined Benefit Pension Plan” means a Canadian Pension Plan that contains a “defined benefit provision”, as defined in Section 147.1(1) of the Income Tax Act (Canada), as amended from time to time.
“Canadian Employee Plan” means any employee benefit, health, welfare, supplemental unemployment benefit, bonus, pension, supplemental pension, profit sharing, retiring allowance, severance, deferred compensation, stock compensation, stock purchase, retirement, life, hospitalization insurance, medical, dental, disability or other employee group or similar benefit or employment plans or supplemental arrangements applicable to the Canadian employees of a Loan Party, other than a Canadian Pension Plan, Multiemployer Plan, Plan, Pension Plan or Statutory Plan.
“Canadian Pension Plan” means any pension plan required to be registered under Section 147.1 of the Income Tax Act (Canada) or any Canadian federal or provincial law and or contributed to by a Loan Party for its Canadian employees, including any pension plan or pension benefit plan within the meaning of the Pension Benefits Act (Ontario), Employment Pensions Plan Act (Alberta), Pension Benefits Standards Act (British Columbia), the Supplemental Pensions Plan Act (Quebec) or any other like or similar provincial statute, including a Canadian Defined Benefit Pension Plan but does not include any Multiemployer Plan, Pension Plan, Plan or Statutory Plan.
“Canadian Securities Legislation” means the Securities Act (Ontario) or other securities legislation of the applicable Canadian province or provinces or territory or territories, as all such legislation now exists or may from time to time hereafter be amended, modified, supplemented or replaced, together with all rules, regulations and interpretations thereunder or related thereto.
“Cannabis” means: (a) any plant or seed, whether live or dead, from any species or subspecies of genus Cannabis, including Cannabis sativa, Cannabis indica and Cannabis ruderalis, and marijuana (as defined in the Controlled Substances Act of the United States, 21 U.S.C. ⸹⸹ 801 et seq.) and industrial hemp subject to the Controlled Substances Act and any part, whether live or dead, of the plant or seed thereof, including any stalk, branch, root, leaf, flower or trichome; (b) any material obtained, extracted, isolated or purified from the plant or seed or the parts contemplated by clause (a) of this definition, including any oil
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cannabinoid, terpene, genetic material or any combination thereof; (c) any organism engineered to biosynthetically produce the material contemplated by clause (b) of this definition, including any micro-organism engineered for such purpose; (d) any biologically or chemically synthesized version of the material contemplated by clause (b) of this definition or any analog thereof, including any product made by any organism contemplated by clause (c) of this definition; and (e) any other meaning ascribed to the term “cannabis,” “marijuana” or “marihuana” (or any similar term) under Applicable Law.
“Cannabis Authorities” means the Maryland Cannabis Administration, Minnesota Office of Cannabis Management, State of Nevada Cannabis Compliance Board, Missouri Department of Health and Senior Services (Division of Cannabis Regulation), New York State Office of Cannabis Management, State of Utah Department of Agriculture and Food, any successor authority, or municipal authorities having jurisdiction over the Loan Parties to enforce any Applicable Cannabis Laws.
“Cannabis Establishment” means any facility cultivating, producing, manufacturing, distributing or retailing Cannabis for medical or adult use in the Applicable States pursuant to the Applicable Cannabis Laws.
“Capital Expenditures” means with respect to any period, the aggregate of all expenditures (whether paid in cash or accrued as liabilities and including expenditures for capitalized lease obligations) by a Person during such period that are required by GAAP, to be included in or reflected by the property, plant and equipment or similar fixed asset accounts (or intangible accounts subject to amortization) on the balance sheet of such Person. Capital Expenditures for any period shall include (a) the total principal portion of Capitalized Lease Obligations paid in such period.
“Capitalized Lease Obligation” means any Indebtedness of any Person represented by obligations under a lease that is required to be capitalized for financial reporting purposes in accordance with GAAP.
“Change in Cannabis Law” means any change in any Applicable Law (subject to the carve-outs and acknowledgments contained in Section 15), including Applicable Cannabis Laws, or change in the enforcement practices of federal authorities that would (a) that would make it unlawful for any Agent or any Lender to (i) continue to be a party to any Loan Document, (ii) perform any of its obligations hereunder or under any other Loan Document or (iii) to fund or maintain the Loans, (b) pursuant to which any Governmental Authority has enjoined any Agent or any Lender from (i) continuing to be a party to any Loan Document, (ii) performing any of its obligations hereunder or under any other Loan Document or (iii) funding or maintaining the Loans, (c) pursuant to which any Governmental Authority requires (i) confidential information from or disclosure of confidential information about any Agent, any Lender, any Affiliate thereof or any investor therein or (ii) any Agent or any Lender to obtain any Permit, in each case, to (A) continue to be a party to any Loan Document, (B) perform any of its obligations hereunder or under any other Loan Document or (C) fund or maintain the Loans, or (d) result in the activities conducted by any Loan Party necessary to the performance of its business being Restricted Cannabis Activities.
“Change of Control” means an event or series of events by which (a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act and the rules thereunder), becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, beneficially or of record, of 30.00% or more of the combined voting power of the Parent’s outstanding Equity Interests ordinarily having the right to vote at an election of directors; or (b) the majority of the board of directors of Parent fails to consist of Continuing Directors as of the Effective Date; or (c) ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ceases to serve as Co-Chairman or Chief Executive Officer of Parent; or (d) except as permitted by Section 8.1 or 8.3, any Loan Party shall cease to own and control, directly or indirectly, free and clear of all Liens (other than Liens created pursuant to any Loan Document), (i) at least the percentage of the
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Equity Interests of each of its Subsidiaries held by such Loan Party on the Effective Date and (ii) 100.00% of the Equity Interests of each of its Subsidiaries formed or acquired after the Effective Date.
“Code” means the Internal Revenue Code of 1986, as amended.
“Collateral” means (a) all assets and personal property of each Loan Party, wherever located and whether now owned or hereafter acquired, including with respect to each Loan Party, the property described on Exhibit B attached hereto, and (b) any and all other property described in any of the other Loan Documents as security for the payment or performance of any of the Obligations, including each Mortgaged Property. Notwithstanding the foregoing, Collateral shall not include any Excluded Property.
“Collateral Assignment of Lease” means an agreement with respect to a Loan Party’s leased location pursuant to which such Loan Party collaterally assigns to Collateral Agent, for the benefit of Secured Creditors, such Person’s rights, title and interest in and to the applicable lease agreement with respect to such location, in form and substance reasonably satisfactory to Collateral Agent, as the same may be amended, amended and restated, modified, supplemented, or substituted from time to time.
“Collateral Assignment of Management Agreement” means, collectively, each Subordination and Collateral Assignment of Management Agreement by and among Collateral Agent, the applicable Loan Parties and each managed entity now or hereafter delivered to secure the Obligations, in each case, in form and substance reasonably satisfactory to Collateral Agent, as the same may be amended, amended and restated, modified, supplemented, or substituted from time to time.
“Collateral Assignment of Merger Agreement” means that certain Collateral Assignment of Merger Agreement, dated as of July 3, 2025, among the Loan Parties and Collateral Agent, pursuant to which on the Effective Date, the applicable Loan Parties, among other things, shall collaterally assigns their rights and benefits under the Missouri Acquisition Documents to Collateral Agent, for the benefit of Secured Creditors, in form and substance reasonably satisfactory to Collateral Agent, as the same may be amended, amended and restated, modified or supplemented from time to time.
“Collateral Assignments of Purchase Agreement” means, collectively (a) that certain Collateral Assignment of Merger Documents, dated as of July 3, 2025, by the applicable Loan Parties party thereto in favor of Collateral Agent, pursuant to which, on the Effective Date, such Loan Parties, among other things, shall collaterally assign their rights and benefits under the Wholesome Acquisition Documents, and (ii) that certain Collateral Assignment of Merger Documents (as defined therein) to Collateral Agent, for the benefit of Secured Creditors, and (b) that certain Collateral Assignment of Merger Documents, dated as of July 3, 2025, among the applicable Loan Parties and Collateral Agent, pursuant to which, on the Effective Date, such Loan Parties, among other things, shall collaterally assigns their rights and benefits under the Deep Roots Acquisition Documents to Collateral Agent, for the benefit of Secured Creditors, in each case, in form and substance reasonably satisfactory to Collateral Agent, as the same may be amended, amended and restated, modified or supplemented from time to time.
“Collateral Documents” means, collectively, this Agreement, the Collateral Assignment of Merger Agreement, each Pledge Agreement, each Collateral Assignment of Management Agreement, each Collateral Assignment of Purchase Agreement, the Mortgages, each Collateral Assignment of Lease, each Lien Waiver, the Negative Pledge, any intellectual property security agreements, other security agreements, other pledge agreements or other similar agreements delivered to Collateral Agent pursuant to Section 7.19, and each of the other agreements, instruments or documents that creates or purports to create a Lien in favor of Collateral Agent for the benefit of Secured Creditors, as each of the same may be amended, amended and restated, modified or supplemented from time to time.
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“Commitments” means, collectively, the Convertible Loan Commitments, the Incremental Loan Commitments and the Term Commitments.
“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.
“Compliance Certificate” means a certificate in the form attached hereto as Exhibit C, with appropriate insertions.
“Contingent Obligation” means, as applied to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to (a) any indebtedness, mandatory dividend, letter of credit or other similar obligation of another Person, including any such obligation directly or indirectly guaranteed, endorsed, co-made or discounted or sold with recourse by that Person, or in respect of which that Person is otherwise directly or indirectly liable; (b) any obligations with respect to undrawn letters of credit issued or provided for the account of that Person; and (c) all obligations arising under any interest rate, currency or commodity swap agreement, interest rate cap agreement, interest rate collar agreement, or other agreement or arrangement designed to protect such Person against fluctuation in interest rates, currency exchange rates or commodity prices; provided, however, that the term “Contingent Obligation” shall not include endorsements for collection or deposit in the ordinary course of business. The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determined amount of the primary obligation in respect of which such Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated net liability in respect thereof as determined by such Person in good faith; provided, however, that such amount shall not in any event exceed the maximum amount of the obligations under the Contingent Obligation arrangement.
“Continuing Director” means, with respect to any Person as of any date of determination, any member of the board of directors of such Person who was a member of such board of directors on the Effective Date.
“Control Agreement” means, with respect to any Deposit Account, securities account, commodity account, securities entitlement or commodity contract, an agreement, in form and substance reasonably satisfactory to Collateral Agent, among Collateral Agent, the financial institution or other Person at which such account is maintained or with which such entitlement or contract is carried and the Loan Party maintaining such account, entitlement or contract, as applicable, effective to grant “control” (within the meaning of Articles 8 and 9 under the applicable UCC) over such account to Collateral Agent.
“Controlled Group” means a controlled group of corporations as defined in 26 U.S.C. § 1563.
“Controlled Substances Act” means the Controlled Substances Act (21 U.S.C. Sections 801 et seq.), as amended from time to time, and any successor statute, and “Civil Asset Forfeiture Reform Act” means the Civil Asset Forfeiture Reform Act of 2000 (18 U.S.C. Sections 983 et seq.), as amended from time to time, and any successor statute.
“Convertible Loan Commitment” means, for any Lender, its obligation to make its pro rata share of, as applicable, the Convertible Loans on the Effective Date in an original principal amount not to exceed the amount set forth opposite such Lender’s name on Schedule 1.1.
“Convertible Loans” is defined in Section 2.1(c)(i).
“Convertible Loan Note” means a Convertible Loan Promissory Note in substantially similar form as Exhibit G attached hereto.
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“Convertible Loan Percentage” means, as to any Lender at any time, the percentage which such ▇▇▇▇▇▇’s share of the outstanding amount of the Convertible Loans then constitutes of the entire outstanding amount of the Convertible Loans.
“Copyrights” means, collectively:
| (a) | All present and future United States registered copyrights and copyright registrations (including all of the exclusive rights afforded a copyright registrant in the United States under 17 U.S.C. Section 106 and any exclusive rights which may in the future arise by act of Congress or otherwise), and all present and future applications for copyright registrations (including applications for copyright registrations of derivative works and compilations) (collectively, “Registered Copyrights”), and any and all royalties, payments and other amounts payable to any Loan Party in connection with Registered Copyrights, together with all renewals and extensions of Registered Copyrights, the right to recover for all past, present and future infringements of Registered Copyrights, and all computer programs and tangible property embodying or incorporating Registered Copyrights, and all other rights of every kind whatsoever accruing thereunder or pertaining thereto; and |
| (b) | All present and future copyrights, mask works, computer programs and other rights subject to (or capable of becoming subject to) United States copyright protection which are not registered in the United States Copyright Office (collectively, “Unregistered Copyrights”), whether now owned or hereafter acquired, and any and all royalties, payments, and other amounts payable to a Person in connection with Unregistered Copyrights, together with all renewals and extensions of Unregistered Copyrights, the right to recover for all past, present and future infringements of Unregistered Copyrights, and all computer programs and all tangible property embodying or incorporating Unregistered Copyrights, and all other rights of every kind whatsoever accruing thereunder or pertaining thereto. |
“Credit Extension” means each Loan or any other extension of credit by an Agent or any Lender to or for the benefit of Borrowers hereunder.
“CSE” means the Canadian Securities Exchange.
“De Minimis Deposit Accounts” means, collectively, two ▇▇▇▇▇ cash account and similar Deposit Accounts per state with de minimis balances on deposit therein of not more than $230,000 at any time for any one such account, with any funds not needed by Borrowers to fund their operations to be transferred to a Deposit Account with East West Bank subject to a Control Agreement once per month.
“Deep Roots Acquisition Documents” means, collectively, (a) the Agreement and Plan of Merger, dated as of December 18, 2024 by and among Parent, Deep Roots Holdings Inc. (as successor in interest to Vireo DR ▇▇▇▇▇▇ Sub, Inc.) and Shareholder Representative Services LLC, as amended or modified from time to time, and (b) all other documents entered into or delivered in connection therewith, in each case, in the form delivered to Administrative Agent prior to the Effective Date.
“Default Period” means the period of time commencing on the day an Event of Default occurs and continuing through the date the Event of Default has been cured or waived.
“Default Rate” has the meaning specified in Section 2.2(b).
“Defaulting Lender” means, subject to Section 2.11(b), any Lender that (a) has failed to pay to any Agent, or any other Lender any other amount required to be paid by it hereunder within two Business Days after
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the date when due, (b) has become the subject of a Bail-in-Action, or (c) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Bankruptcy Law or (ii) had appointed for it a receiver, interim receiver, receiver and manager, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state, provincial or federal regulatory authority acting in such a capacity; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by Administrative Agent that a Lender is a Defaulting Lender under any one or both of clauses (a) and (b) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.11(b)) upon delivery of written notice of such determination to Borrower-Agent, and each Lender.
“Designated Jurisdiction” means any country or territory to the extent that such country or territory is the subject of any Sanction.
“Discharge of Obligations” means, subject to Section 14.8, the satisfaction of the Obligations by the payment in full, in cash (or, as applicable, cash collateralization in accordance with the terms hereof), of the principal of and interest on or other liabilities relating to each Credit Extension, all fees and all other expenses or amounts payable under any Loan Document (other than Inchoate Obligations), and other Obligations, provided that the aggregate Commitments of Lenders are terminated.
“Dollars,” “dollars” or use of the sign “$” means only lawful money of the United States and not any other currency, regardless of whether that currency uses the “$” sign to denote its currency or may be readily converted into lawful money of the United States.
“Domestic Subsidiary” means any Subsidiary that is organized under the laws of any state of the United States or the District of Columbia.
“Earnout Payments” means the contingent liabilities and indebtedness incurred in connection with any Acquisition which became non-contingent and payable upon the occurrence of certain performance criteria set forth in the applicable Acquisition’s purchase documents to the extent in form and substance reasonably satisfactory to Administrative Agent.
“East West Bank” means East West Bank, a California banking corporation.
“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.
“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
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“EEA Resolution Authority” means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
“Effective Date” means July 7, 2025.
“Eligible Assignee” means any Person that meets the requirements to be an assignee under Sections 14.1(b)(iii), 14.1(b)(v) and 14.1(b)(vi) (subject to such consents, if any, as may be required under Section 14.1(b)(iii)).
“Elk River Lease” means that certain Lease Agreement, dated as of February 22, 2024, by and among [***] and [***], in the form delivered to Administrative Agent prior to the Effective Date.
“Elk River Option Termination Date” means 5:00 p.m. (CST) on the earlier of (a) [***], (b) [***] defaults under that certain Option Agreement, dated [***] by and between [***] and [***], and (c) the date [***]’s right to occupy the Elk River Premises pursuant to the terms of the Elk River Lease or the Elk River Lease are terminated.
“Elk River Premises” means the Real Property located at [***].
“Embargoed Person” means (a) any country or territory that is the target of a sanctions program administered by OFAC or (b) any Person that (i) is or is owned or controlled by a Person publicly identified on the most current list of “Specially Designated Nationals and Blocked Persons” published by OFAC, (ii) is the target of a sanctions program or sanctions list (A) administered by OFAC, or (B) under the Iran Sanctions Act, as amended, section 1245 of the National Defense Authorization Act for Fiscal Year 2012 or Executive Order 13590 “Authorizing the Imposition of Certain Sanctions with respect to the Provision of Services, Technology or Support for Iran’s Energy and Petro-chemical Sectors,” effective November 21, 2011 (collectively, “Sanctions”) or (iii) resides, is organized or chartered, or has a place of business in a country or territory that is the subject of a sanctions program administered by OFAC.
“Environmental Claims” means any and all administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of liability, non-compliance or violation, investigations, proceedings, settlements, consent decrees, consent orders, consent agreements and all costs and liabilities relating to or arising from or under any Environmental Law, including (a) any and all claims by Governmental Authorities for enforcement, investigation, corrective action, cleanup, removal, response, remedial or other actions, cost recovery, damages, natural resource damages or penalties pursuant to or arising under any Environmental Law, (b) any and all claims by any one or more Persons seeking damages, contribution, restitution, indemnification, cost recovery, compensation or injunctive relief directly or indirectly resulting from, based upon or arising under Environmental Law, pertaining to Hazardous Materials, natural resources, or the indoor or outdoor environment, and (c) all liabilities contingent or otherwise, expenses, obligations, losses, damages, fines and penalties arising under any Environmental Law.
“Environmental Laws” means all federal, state, provincial, district, local and foreign laws, rules, regulations, ordinances, and consent decrees relating to hazardous substances, pollution and environmental matters, as now or at any time hereafter in effect, applicable to any the Loan Party’s business or facilities owned or operated by any Loan Party, including laws relating to emissions, discharges, releases or threatened releases of pollutants, contamination, chemicals, or hazardous, toxic or dangerous substances, materials or wastes into the environment (including ambient air, surface water, ground water, land surface or subsurface strata) or otherwise relating to the generation, manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials.
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“Environmental Liability” means, in respect of any Person, any statutory, common law or equitable liability, contingent or otherwise of such Person directly or indirectly resulting from, arising out of or based upon (a) the violation of any Environmental Law or Environmental Permit, or (b) an Environmental Claim, whether on, prior or after the date hereof.
“Environmental Permit” means any permit, approval, authorization, certificate, license, variance, filing or permission required by or from any Governmental Authority pursuant to any Environmental Law.
“Equipment” means all present and future machinery, equipment, tenant improvements, furniture, fixtures, vehicles, tools, parts and attachments in which any Loan Party has any interest.
“Equity Interests” means, of any Person, any and all shares, rights to purchase, options, warrants, general, limited or limited liability partnership interests, member interests, participation or other equivalents of or interest in (regardless of how designated) equity of such Person, whether voting or nonvoting, including common stock, preferred stock, convertible securities or any other “equity security” (as such term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the SEC under the Exchange Act or Canadian Securities Legislation, as the context requires).
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, modified or restated from time to time.
“ERISA Affiliate” means any Person who for purposes of Title IV of ERISA is a member of a Loan Party’s Controlled Group, or under common control with any Loan Party, within the meaning of Section 414 of the Code.
“Event of Default” has the meaning assigned in Section 9.1.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Excluded Accounts” means Deposit Accounts (a) specially and exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for the Loan Parties’ employees, and (b) specially and exclusively used for any trust, escrow, or other similar fiduciary account, in each case, approved by Administrative Agent.
“Excluded Property” means (a) any non-material lease, license, contract or agreement to which any Loan Party is a party, and any of its rights or interests thereunder, if and to the extent that a security interest therein is prohibited by or in violation of (i) any Applicable Law, or (ii) a term, provision or condition of any such lease, license, contract or agreement (unless in each case, such Applicable Law, term, provision or condition would be rendered ineffective with respect to the creation of such security interest pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or provisions) of any relevant jurisdiction or any other Applicable Law or principles of equity), provided, however, that the foregoing shall cease to be treated as “Excluded Property” (and shall constitute Collateral) immediately at such time as the contractual or legal prohibition shall no longer be applicable and to the extent severable, such security interest shall attach immediately to any portion of such lease, license, contract or agreement not subject to the prohibitions specified in clauses (i) or (ii) above, (b) 100.00% of any Equity Interests of all Excluded Subsidiaries and 100.00% of any assets of any Excluded Subsidiary, (c) personal property as to which Administrative Agent and the Loan Parties reasonably agree in writing that the costs or other consequences or burdens of obtaining a security interest or perfection thereof are excessive in view of the benefits to be obtained by Lender Parties therefrom, (d) any “intent-to-use” application for registration of a Trademark filed in the United States Patent and Trademark Office pursuant to Section 1(b) of the ▇▇▇▇▇▇ Act, 15 U.S.C. §1051, prior to the filing of a “Statement of Use” pursuant to Section 1(d) of the ▇▇▇▇▇▇ Act or an
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“Amendment to Allege Use” pursuant to Section 1(c) of the ▇▇▇▇▇▇ Act with respect thereto, solely to the extent, if any, that, and solely during the period, if any, in which the grant of a security interest therein would impair the validity or enforceability of any registration that issues from such intent-to-use application under applicable federal law, and (e) any Excluded Accounts; provided, that Excluded Property shall not include any proceeds (or right to receive proceeds), substitutions or replacements of any assets or property excluded by the foregoing provisos or any goodwill of any Loan Party’s business associated therewith or attributable thereto. Notwithstanding anything to the contrary contained herein, and for the avoidance of doubt, Lender Parties acknowledge and agree that the Real Property located at [***] is an Excluded Property.
“Excluded Subsidiary” means (a) any Subsidiary that is prohibited or restricted by Applicable Law from guaranteeing or incurring the Obligations and (b) any Acquired Non-Loan Party.
“Excluded Swap Obligation” means, with respect to any Loan Party, any Swap Obligation if, and to the extent that, all or a portion of the guarantee of such Loan Party of, or the grant by such Loan Party of a security interest to secure, such Swap Obligation (or any guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Loan Party’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act at the time the guarantee of or grant of security interest by such Loan Party becomes effective with respect to such related Swap Obligation (such determination being made after giving effect to any applicable keepwell, support, or other agreement for the benefit of the applicable Loan Party).
“Excluded Tax Liabilities” means any of the following Tax Liabilities imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Tax Liabilities imposed on or measured by net income (however denominated), franchise Tax Liabilities, and branch profits Tax Liabilities, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Tax Liabilities, (b) in the case of a Lender, U.S. federal withholding Tax Liabilities imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in the Loans pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loans or (ii) such Lender changes its applicable lending office, except in each case to the extent that, pursuant to Section 2.9, amounts with respect to such Tax Liabilities 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 applicable lending office, (c) Tax Liabilities attributable to such Recipient’s failure to comply with Section 2.9(f) and (d) any U.S. federal withholding Tax Liabilities imposed under FATCA.
“Executive Order No. 13224” means the Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, as the same has been, or shall hereafter be, renewed, extended, amended or replaced, or any Canadian law equivalent thereto, as applicable.
“FATCA” means Sections 1471 through 1474 of the IRC, 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 and any agreements entered into pursuant to Section 1471(b)(1) of the IRC.
“Federal Funds Effective Rate” means, for any day, the greater of (a) the rate calculated by the Federal Reserve Bank of New York based on such day’s Federal funds transactions by depositary institutions (as determined in such manner as the Federal Reserve Bank of New York shall set forth on its public website
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from time to time) and published on the next succeeding Business Day by the Federal Reserve Bank of New York as the Federal funds effective rate and (b) 0.00%.
“Fee Letter” means that certain letter agreement dated July 3, 2025, among Borrowers, Agents and Lead Arranger.
“Financial Covenant” has the meaning set forth in Section 7.7(c)(i).
“Financial Covenant Cure Period” has the meaning set forth in Section 7.7(c)(i).
“Financial Covenant Equity Cure” has the meaning set forth in Section 7.7(c)(i).
“FINCEN” has the meaning set forth in Section 7.1(b).
“First Lien Administrative Agent” means East West Bank, in its capacity as administrative agent under the First Lien Debt Documents.
“First Lien Collateral Agent” means East West Bank, in its capacity as collateral agent under the First Lien Debt Documents.
“First Lien Debt” means Indebtedness of the Loan Parties under the First Lien Debt Documents, in each case, subject to the First Lien Intercreditor Agreement.
“First Lien Debt Documents” means the First Lien Loan Agreement and the “Loan Documents” referenced in the First Lien Loan Agreement, in each case, as amended, amended and restated, modified or supplemented from time to time in accordance with and as permitted by the First Lien Intercreditor Agreement.
“First Lien Intercreditor Agreement” means that certain Subordination and Intercreditor Agreement, dated as of July 3, 2025, by and among Administrative Agent, Collateral Agent, the Loan Parties party thereto, First Lien Administrative Agent and First Lien Collateral Agent, as amended, amended and restated, modified or supplemented from time to time in accordance therewith and as permitted thereby.
“First Lien Lenders” means the “Lenders” from time to time under the First Lien Loan Agreement.
“First Lien Loan Agreement” means that certain Loan and Security Agreement dated as of July 3, 2025, by and among Borrowers, the Guarantors party hereto from time to time, the Lenders (as defined therein) party thereto from time to time, First Lien Administrative Agent, First Lien Collateral Agent and the other Persons party thereto, as amended, amended and restated, modified or supplemented from time to time in accordance with and as permitted by the First Lien Intercreditor Agreement.
“Fiscal Year” means each 12-month accounting period of the Loan Parties, which ends on December 31st of each year.
“Floor” means 7.50%.
“Foreign Lender” means a Lender that is not a U.S. Person.
“Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.
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“Fund” means any Person (other than a natural Person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its activities.
“GAAP” means United States generally accepted accounting principles, consistently applied, as in effect from time to time.
“Governmental Authority” means the government of the United States, Canada or any other nation, or of any political subdivision thereof, whether state, provincial, local or foreign, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra national bodies such as the European Union or the European Central Bank).
“Guarantor Event of Default” means any Event of Default solely on the part of one or more Proper Guarantors that occurs prior to the Proper Guarantors becoming Subsidiaries of Parent in connection with the consummation of the Missouri Acquisition (or a portion thereof) in accordance with and subject to the terms of this Agreement.
“Guarantors” means the Persons, if any, identified as guarantors on the signature pages hereto and any other Person who may guarantee, pursuant to a written agreement, payment or collection of all or any of the Obligations.
“Guaranty” means any guaranty now or hereafter executed by any Guarantor with respect to any portion of the Obligations, in each case, in form and substance reasonably satisfactory to Administrative Agent and as each now exists or may hereafter be entered into, amended, amended and restated, modified, supplemented, extended, renewed, or replaced.
“HA-MD Transaction” means that certain transaction, more specifically described on Schedule A-7, pursuant to which a Loan Party shall acquire a third-party for an amount not to exceed [***] (as more specifically set forth on Schedule A-7) pursuant to the terms of the HA-MD Transaction Documents.
“HA-MD Transaction Documents” means (a) that certain Term Sheet, dated [***], by and between that certain Loan Party (the “HA-MD Buyer”) and that certain Target disclosed in writing to Administrative Agent (the “HA-MD Target”), in the form delivered to Administrative Agent prior to the Effective Date, (b) that certain Option Agreement by and among Parent, HA-MD Target and the other parties thereto dated as of [***], in the form delivered to Administrative Agent prior to the Effective Date, (c) that certain Consulting Agreement between HA-MD Buyer and HA-MD Target dated as of [***], in the form delivered to Administrative Agent prior to the Effective Date, and (d) all other documents and agreements entered into or delivered in connection with the consummation of the HA-MD Transaction after the Effective Date, in each case, subject to Section 7.24.
“Hazardous Materials” means, to the extent in violation of applicable Environmental Law, any hazardous, toxic or dangerous substance, materials and wastes, including hydrocarbons (including naturally occurring or man-made petroleum and hydrocarbons), flammable explosives, asbestos, urea formaldehyde insulation, radioactive materials, biological substances, polychlorinated biphenyls, pesticides, herbicides and any other kind or type of pollutants or contaminants (including materials which include hazardous constituents), sewage, sludge, industrial slag, solvents or any other similar substances, materials, or wastes and including any other substances, materials or wastes that are or become regulated under any Environmental Law (including any that are or become classified as hazardous or toxic under any Environmental Law); provided, however, notwithstanding anything to the contrary and for the avoidance of doubt, the definition of Hazardous Materials shall not in any event include (w) Cannabis, as are any substances or products that
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would be deemed Hazardous Materials solely because they contain cannabis, in each case, to the extent such substances are deemed hazardous solely because the applicable businesses are unlawful under U.S. Federal Cannabis Law, (x) materials or substances of any kind and in any amounts used or stored in the ordinary course of construction, developing, maintaining, cleaning or operation of any property, or (y) De Minimis Amounts (as defined below). As used herein, De Minimis Amounts means any Hazardous Materials either (a) being transported on or from a property or being stored for use by a Loan Party or any tenant on such property in connection with Loan Party’s or such tenant’s current operations, or (b) being currently used by a Loan Party or any tenant on an applicable property, in either case in such quantities and in a manner that both (i) do not constitute a violation or threatened violation of any Environmental Law and (ii) are consistent with customary business practice for such operations in the state or province where such property is located.
“Hedging Agreement” means any interest rate, currency or commodity swap agreement, cap agreement or collar agreement, and any other agreement or arrangement designed to protect a Person against fluctuations in interest rate, currency exchange rates or commodity prices.
“Hedging Obligation” means, with respect to any Person, any liability of such Person under any Hedging Agreements. The amount of any Person’s obligations in respect of any Hedging Obligation shall be deemed to be the incremental obligations that would be reflected in the financial statements of such Person in accordance with GAAP.
“Holland, MA Real Property” means the Real Property located at [***].
“Inchoate Obligations” means contingent indemnification or expense reimbursement Obligations other than those related to claims, causes of action or liabilities that have been asserted or threatened or that otherwise can be reasonably identified by any Agent or any Lender based on the then known facts and circumstances.
“Incremental Loan Commitment” means, for any Lender, its obligation to make its pro rata share of, as applicable, the Incremental Loans on the applicable date in an original principal amount not to exceed the amount to which such Lender agreed pursuant to Section 2.1(d)(i).
“Incremental Loans” is defined in Section 2.1(d)(i).
“Incremental Loan Note” means a Promissory Note in substantially similar form as Exhibit F attached hereto.
“Incremental Loan Percentage” means, as to any Lender at any time, the percentage which such ▇▇▇▇▇▇’s share of the outstanding amount of the Incremental Loans then constitutes of the entire outstanding amount of the Incremental Loans.
“Indebtedness” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:
| (a) | all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments; |
| (b) | the maximum amount (after giving effect to any reductions or prior drawings which have been reimbursed) of all direct or Contingent Obligations of such Person arising under letters of credit (including standby and commercial) (other than to the extent cash collateralized), bankers’ acceptances, bank guaranties, surety bonds and similar instruments; |
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| (c) | obligations under any Hedging Agreement, or other interest rate management device, foreign currency exchange agreement, currency swap agreement, commodity price protection agreement or other interest or currency exchange rate or commodity price hedging arrangement; |
| (d) | all obligations of such Person to pay the deferred purchase price of property or services (other than current trade payables incurred in the ordinary course of such Person’s business), purchase price adjustments, profit sharing arrangements, deferred purchase money amounts and similar payment obligations or continuing obligations of any nature of such Person arising out of purchase and sale contracts, including Earnout Payments; |
| (e) | indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse (but if limited in recourse or that Person has not assumed or otherwise become liable for that indebtedness, then that indebtedness will be measured at the lesser of (i) the aggregate principal amount of such indebtedness and (ii) the fair market value of the property securing that indebtedness as determined by such Person in good faith, in each case at the applicable time of determination); |
| (f) | all Capitalized Lease Obligations; |
| (g) | all Equity Interests of such Person subject to repurchase or redemption rights or obligations (excluding repurchases or redemptions at the sole option of such Person); |
| (h) | all indebtedness, obligations or liabilities secured by a Lien on any asset of such Person, whether or not such indebtedness, obligations or liabilities are otherwise an obligation of such Person; and |
| (i) | any guaranty of any indebtedness, obligations or liabilities of a type described in the foregoing clauses. |
For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person.
“Indemnified Tax Liabilities” means (a) Tax Liabilities other than Excluded Tax Liabilities and (b) to the extent not otherwise described in clause (a), Other Tax Liabilities.
“Indemnified Uncertain Tax Liabilities” means any Uncertain Tax Liabilities of the Loan Parties for which (a) a Loan Party is fully indemnified pursuant to contracts, agreements, or other documents or instruments in effect as of the Effective Date (true, correct and complete copies of which have been delivered to Administrative Agent), and (b) such contracts, agreements, or other documents or instruments providing for the indemnification described in the foregoing clause (a) have been collaterally assigned to Collateral Agent in a manner reasonably acceptable to Agents.
“Insolvency Proceeding” means any proceeding commenced by or against any Person or entity under any provision of any Bankruptcy Law or under any other bankruptcy or insolvency law, including assignments for the benefit of creditors, formal or informal moratoria, compositions, extension generally with its creditors, or proceedings seeking reorganization, arrangement, or other similar relief.
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“Intellectual Property” has the meaning assigned in Section 6.9.
“Interest Expense” means, for any period, for the Loan Parties and their Subsidiaries (other than Excluded Subsidiaries) on a consolidated basis, the sum of (a) all interest, premium payments, debt discount, fees, charges and related expenses (excluding closing costs associated with this transaction) in connection with borrowed money (including capitalized interest) or in connection with the deferred purchase price of assets during such period, plus (b) all payments made under interest rate Hedging Agreements during such period to the extent not included in clause (a) of this definition, minus (c) all payments received under interest rate Hedging Agreements during such period, plus (d) the portion of rent expense with respect to such period under Capitalized Lease Obligations.
“Investment” means any beneficial ownership of (including stock, partnership or limited liability company interest or other securities) any Person, or any loan, advance or capital contribution to any Person.
“IRC” means the Internal Revenue Code of 1986, as amended from time to time.
“ISP” means the International Standby Practices as published by the International Chamber of Commerce.
“Joint Venture” means any co-investment between a Loan Party and non-Affiliate in which the Loan Party owns a non-controlling ownership interest in the Investment described by such Loan Party to the satisfaction of Administrative Agent.
“Key Officer” means (a) ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and any successor chief executive officer and (b) ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and any successor chief financial officer.
“Lead Arranger” has the meaning set forth in the introductory paragraph hereto.
“Lender Expenses” means all documented (a) costs or (b) expenses (including reasonable, documented out-of-pocket attorney’s fees and expenses) incurred by any Agent, Lender or Lead Arranger in connection with: the preparation, negotiation, administration and enforcement of the Loan Documents; Collateral field examinations; and any reasonable, documented out-of-pocket attorney’s fees and expenses incurred by any Agent, Lender or Lead Arranger in amending, enforcing or defending the Loan Documents (including fees and expenses of appeal), at any time, including before, during and after an Insolvency Proceeding, whether or not suit is brought by an Agent.
“Lender Parties” means, collectively, Administrative Agent, Collateral Agent and Lenders, and “Lender Party” means any of the foregoing Persons individually.
“Lenders” means, collectively, the financial institutions or entities from time to time parties to this Agreement.
“Lien” means any security interest, mortgage, deed of trust, pledge, lien, charge, judgment lien, assignment, financing statement, encumbrance, title retention agreement or analogous instrument or device, including the interest of each lessor under any capitalized lease and the interest of any bondsman under any payment or performance bond, in, of or on any assets or properties of a Person, whether now owned or subsequently acquired and whether arising by agreement or operation of law, all whether perfected or unperfected.
“Lien Waiver” means the waiver or subordination of Liens reasonably satisfactory to Collateral Agent from a lessor, mortgagee, warehouse operator, bailee, processor or other third party that may have a Lien upon any Collateral that is in such third party’s possession or is located or leased by such party to a Loan Party, by which such Person shall waive or subordinate its Liens and claims with respect to any Collateral in favor
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of Collateral Agent and shall assure Collateral Agent’s access to any Collateral for the purpose of allowing Collateral Agent to enforce its rights and Liens with respect thereto, as the same may be amended, amended and restated, modified, supplemented, or substituted from time to time.
“Liquidity” means, as at any time of determination, the aggregate amount of cash and cash equivalents (i.e., Permitted Investments consisting of certificates of deposit maturing no more than one year from the date of investment therein, money market accounts and other liquid investments, in each case, made available by a Lender to a Loan Party and reflected on such Lender’s balance sheet) of the Loan Parties, under GAAP accounting, that is (a) free and clear of all Liens (other than Permitted Liens described in clause (b), (i) or (s) of the definition thereof), (b) not earmarked for any particular use nor subject to any restrictions on the use thereof and (c) held at such time by the Loan Parties in Deposit Accounts maintained with Collateral Agent or otherwise subject to a Control Agreement, and excluding, for the avoidance of doubt, all cash on deposit in the Restricted Cash Account.
“Loan Documents” means, collectively, this Agreement, the Notes, the Collateral Documents, any Guaranty, the First Lien Intercreditor Agreement, any Subordination Agreement, and all other agreements, instruments and documents, deeds of trust, mortgages, pledges, powers of attorney, consents, assignments, contracts, notices, security agreements, leases, guaranties, financing statements, Hedging Agreements and all other writings heretofore, now or from time to time hereafter executed by or on behalf of any Loan Party, any other Loan Party, or any other Person and delivered to any Agent or Lender or to any parent, affiliate or subsidiary of such Agent or Lender in connection with the Obligations or the transactions contemplated hereby, as each of the same may be amended, amended and restated, modified or supplemented from time to time.
“Loan Party” means each Borrower and each Guarantor (other than Proper Holdings, LLC), and “Loan Parties” means all Borrowers and Guarantors (other than Proper Holdings, LLC) collectively.
“Loan Party’s Books” means all of each Loan Party’s books and records including: ledgers; records concerning such Loan Party’s assets or liabilities, the Collateral, business operations or financial condition; and all computer programs, or tape files, and the equipment containing such information.
“Loan Percentages” means, collectively, the Convertible Loan Percentages, the Incremental Loan Percentages and the Term Percentages.
“Loans” means, collectively, the Convertible Loans, the Incremental Loans and the Term Loans.
“Make-Whole Amount” means, with respect to any prepayment of the Loans or any repayment in connection with an acceleration of the Loans prior to the Maturity Date, if such prepayment or repayment occurs (a) on or prior to December 30, 2026, an amount equal to the greater of the sum of all payments of interest on the Loans that would be due from the date of such prepayment or repayment through December 30, 2026, if no prepayment or repayment of such Loans was made on or prior to December 30, 2026.
“Management Agreement” means any agreement or contract between any Loan Party, or its Subsidiaries (other than Excluded Subsidiaries), and any other cannabis business, pursuant to which (a) any Loan Party or any of its Subsidiaries, will provide management services to such other cannabis business or (b) any other cannabis business will provide management services to any Loan Party or any of its Subsidiaries (other than Excluded Subsidiaries).
“Material Adverse Effect” means any of the following: (a) a material adverse change in, or material adverse effect upon, the business, condition (financial or otherwise), operations, properties, prospects, assets, liabilities or performance of the Loan Parties taken as a whole; (b) a material impairment of the ability of the Loan Parties taken as a whole, to perform their respective obligations under the Loan Documents; or
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(c) a material adverse effect upon: (i) the legality, validity, binding effect or enforceability of any Loan Document to which any Loan Party is a party against the Loan Parties taken as a whole; or (ii) the rights and remedies of any Agent under or in respect of any Loan Document.
“Material Contract” means with respect to any Loan Party, (a) each Regulatory License, (b) each contract or agreement to which such Loan Party or any of its Subsidiaries is a party involving aggregate consideration payable to or by such Loan Party or such Subsidiary of $3,450,000 or more in any Fiscal Year (other than purchase orders in the ordinary course of business of such Loan Party or such Subsidiary, employment agreements, and other than contracts that by their terms may be terminated by such Loan Party or Subsidiary in the ordinary course of its business upon less than 30 days’ notice without penalty or premium); (c) each Management Agreement; and (d) all other contracts or agreements as to which the breach, nonperformance, cancellation or failure to renew by any party thereto would reasonably be expected to have a Material Adverse Effect.
“Material Property Agreement” means all agreements to which any Loan Party is a party relating to the use, renovation, operation, development, construction, design or management of any Mortgaged Property (including any management, asset or development management agreements, service agreements and exclusive leasing agreements) that provides for aggregate payments in any calendar year in excess of $3,450,000 and which is not terminable by the Loan Parties on 30 or fewer days’ notice from the Loan Parties.
“Maturity Date” means October 2, 2028; provided, however, that, at Borrowers’ election, the Maturity Date may be extended to October 1, 2029, so long as (a) Borrowers deliver written notice to Administrative Agent of their election to extend the Maturity Date at least 90 days prior to October 2, 2028, (b) no Default or Event of Default exists at the time of such request and at the time of such extension and (c) Borrowers pay to Administrative Agent, for the account of Lenders, an extension fee equal to 1.00% of the Loans advanced hereunder.
“Missouri Acquisition” means that certain Acquisition pursuant to the terms of the Missouri Acquisition Documents.
“Missouri Acquisition Agreement” means that certain Agreement and Plan of Merger dated as of December 18, 2024, by and among Vireo PR Merger Sub Inc., Vireo PR Merger Sub II Inc., Parent, NGH Investments, Inc., Proper Holdings Management, Inc., Proper Holdings, LLC, and the other parties thereto.
“Missouri Acquisition Documents” means, collectively, the Missouri Acquisition Agreement and all other documents entered into or delivered in connection with the consummation of the Missouri Acquisition, including the Option Agreement, the related purchase agreement, and any applicable assignment agreements in connection with the Missouri Acquisition, in each case, subject to Section 7.21, in the form delivered to Administrative Agent prior to the Effective Date.
“Missouri Acquisition Reserve Amount” means (a) in the event that the Proper Pledge and Guaranty is not obtained on the Effective Date and until the earlier of (i) the consummation the Proper Pledge and Guaranty or (ii) the consummation of the Missouri Acquisition such that the Loan Parties acquire the Proper Guarantors in accordance with the terms hereof (including Section 8.3(d)) and satisfy, or cause to be satisfied, the requirements of Section 7.21, or (b) following the occurrence and during the continuation of a Guarantor Event of Default, $25,000,000. For the avoidance of doubt, if the Proper Pledge and Guaranty is not obtained on the Effective Date, upon the satisfaction of either condition in clause (a) of this definition, funds in the Restricted Cash Account earmarked as the Missouri Acquisition Reserve Amount shall be remitted to Borrowers. In addition, to the extent the Missouri Acquisition Reserve Amount is funded into the Restricted Cash Account pursuant to the Loan Parties’ cure right in Section 9.2, upon the cure or waiver
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of such Guarantor Event of Default, in each case, in a manner satisfactory to Administrative Agent in its discretion (and provided the “Event of Default” continuing under the First Lien Debt Documents as a result of such Guarantor Event of Default has been cured or waived in accordance with the First Lien Debt Documents), funds in the Restricted Cash Account earmarked as the Missouri Acquisition Reserve Amount shall be remitted to Borrowers. For the avoidance of doubt, the Loan Parties shall be required to replenish the Restricted Cash Account with the Missouri Acquisition Reserve Amount to the extent necessary to comply with Section 7.20(a).
“Missouri Management Services Agreements” means those certain Management Services Agreement by and between [***] and [***], dated as of August 20, 2024; [***], [***], and [***] dated as of May 24, 2025; and [***] and [***] dated as of February 14, 2024.
“Mortgage” means each mortgage, deed of trust, or deed to secure debt, trust deed, assignment of leases and rents or other security document granted by any Loan Party to Collateral Agent, for the benefit of Secured Creditors, in respect of any Real Property owned or leased by such Loan Party, in form and substance reasonably satisfactory to Collateral Agent, as each of the same may be amended, amended and restated, modified or supplemented from time to time.
“Mortgaged Property” means, individually and collectively, any Real Property subject to a Mortgage, including the Real Property located at (a) [***], (b) [***], (c) reserved, (d) [***], and (e) [***]. Notwithstanding anything to the contrary, and for the avoidance of doubt, no Excluded Property constitutes Mortgaged Property.
“Multiemployer Plan” means a multiemployer plan (as defined in Section 4001(a)(3) of ERISA) to which any Loan Party or any ERISA Affiliate contributes or is obligated to contribute or with respect to which any Loan Party of any ERISA Affiliate has any current or contingent liability but does not include a Canadian Employee Plan or Canadian Pension Plan.
“Negative Pledge” means (a) that certain Negative Pledge, dated as of July 3, 2025, by ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, LLC in favor of Collateral Agent with respect to the Real Property located at [***] (subject to a mortgage on such property described in Permitted Indebtedness), (b) that certain Negative Pledge, dated as of July 3, 2025, by Verdant Grove, LLC in favor of Collateral Agent with respect to the Holland, MA Real Property, and (c) any other Negative Pledge approved from time to time by Agents, in each case, as may be amended, amended and restated, modified or supplemented from time to time.
“Negotiable Collateral” means all of each Loan Party’s present and future letters of credit of which it is a beneficiary, drafts, instruments (including promissory notes), securities, Documents, documents of title, Chattel Paper, and each Loan Party’s Books relating to any of the foregoing.
“Net Cash Proceeds” means:
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“Nevada License Reserve Amount” has the meaning set forth in the First Lien Loan Agreement, as in effect on the date hereof.
“Nevada Regulatory Licenses” means the Regulatory Licenses of the Loan Parties issued by the Cannabis Authorities in the State of Nevada as set forth on Schedule A-6.
“Non-Consenting Lender” means any Lender that does not approve any consent, waiver or amendment that (a) requires the approval of all or all affected Lenders in accordance with the terms of Section 2.11 and (b) has been approved by the Required Lenders.
“Non-Defaulting Lender” means, at any time, each Lender that is not a Defaulting Lender at such time.
“Northeast B Counterparty” has the meaning set forth in the definition of Northeast B Transaction Documents.
“Northeast B Transaction” means that certain transaction more specifically described on Schedule A-8 pursuant to which the transferor Loan Party (the “Specified Transferor”) shall Transfer the Specified Transferred Equity Interests to the Northeast B Counterparty, pursuant to the terms of the Northeast B Transaction Documents.
“Northeast B Transaction Documents” means (a) that certain Memorandum of Understanding by and among the Specified Transferor, that certain third party transferee disclosed in writing to Administrative Agent (the “Northeast B Counterparty”) and the Specified Loan Party, dated as of [***], in the form delivered to Administrative Agent prior to the Effective Date, (b) that certain Assignment of Membership Interest by and between the Specified Transferor, and the Northeast B Counterparty in the form delivered to Administrative Agent prior to the Effective Date, (c) that certain Amended and Restated Operating Agreement of the Specified Loan Party in the form delivered to Administrative Agent prior to the Effective Date and (d) all other documents and agreements entered into or delivered in connection with the consummation of the Northeast B Transaction after the Effective Date, in each case, subject to Section 7.23.
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“Note” means any Convertible Loan Note, any Incremental Loan Note or any Term Loan Note, and “Notes” means all such promissory notes, collectively.
“Obligations” means, in each case, whether now in existence or hereafter arising: (a) the principal of and interest on (including interest accruing after the filing of any bankruptcy or similar petition) the Loans, (b) all liabilities of any Loan Party to any Lender or to any affiliate of any Lender arising out of or relating to Bank Products, (c) Lender Expenses, (d) Hedging Obligations of any Loan Party, (e) Make-Whole Amounts and (f) all other reasonable, documented and out of pocket fees and commissions (including out-of-pocket attorney’s fees and expenses), charges, indebtedness, loans, liabilities, financial accommodations, obligations, covenants and duties owing by the Loan Parties and each of their respective Subsidiaries to any Agent or any Lender or to any parent, affiliate or subsidiary of any Agent or any Lender of every kind, nature and description, direct or indirect, primary or secondary, absolute or contingent, due or to become due, contractual or tortious, liquidated or unliquidated, whether several, joint, or joint and several, and whether or not evidenced by any note, and including any debt, liability or obligation owing from any Loan Party to others that any Agent or any Lender may have obtained by assignment or otherwise, and interest and fees that accrue after the commencement by or against any Loan Party of any bankruptcy or similar proceeding, naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding; provided, however, Obligations shall not include any Excluded Swap Obligation.
“OFAC” means the United States Office of Foreign Assets Control.
“Operating Documents” means, for any Person as of any date, such Person’s constitutional documents, formation documents or certificate of incorporation (or equivalent thereof), as certified (if applicable) by such Person’s jurisdiction of formation as of a recent date, and, (a) if such Person is a corporation, its bylaws or memorandum and articles of association (or equivalent thereof) in current form, (b) if such Person is a limited liability company, its limited liability company agreement (or similar agreement), and (c) if such Person is a partnership, its partnership agreement (or similar agreement), each of the foregoing with all current amendments or modifications thereto.
“Other Connection Tax Liabilities” means, with respect to any Recipient, Tax Liabilities imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax Liability (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document).
“Other Tax Liabilities” means all present or future stamp, intangible or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or under any other Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document.
“Parent” has the meaning set forth in the introductory paragraph hereto.
“Participant” is defined in Section 14.1(d).
“Participant Register” is defined in Section 14.1(d).
“Patents” means all patents, patent applications and like protections including improvements, divisions, continuations, renewals, reissues, extensions and continuations-in-part of the same.
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“Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, Title III of Pub. L. 107-56, signed into law October 26, 2001.
“Payment Date” means the last Business Day of each calendar month.
“PBGC” means the Pension Benefit Guaranty Corporation.
“Pension Plan” means a pension plan (as defined in Section 3(2) of ERISA) maintained for employees of any Loan Party or any ERISA Affiliate and covered by Title IV of ERISA or with respect to which any Loan Party or any ERISA Affiliate has any current or contingent liability but does not include any Canadian Employee Plan or Canadian Pension Plan.
“Periodic Payments” means all installments or similar recurring payments that any Loan Party may now or hereafter become obligated to pay to Lenders pursuant to the terms and provisions of any instrument, or agreement now or hereafter in existence between any Loan Party and any Lender.
“Permits” means, with respect to any Person, any permit, approval, authorization, license, registration, certificate concession, grant, franchise, variance or permission from, and any other contractual obligations with, any Governmental Authority, in each case whether or not having the force of law and applicable to or binding upon such Person or any of its property or operations or to which such Person or any of its property or operations is subject, including the Regulatory Licenses listed on Schedule A-5.
“Permitted Acquisition” means any Acquisition or Joint Venture by a Loan Party which satisfies each of the following conditions:
| (a) | [reserved]; |
| (b) | (i) none of the consideration for such Acquisition or Joint Venture shall be funded with cash of any Loan Party (but, for the avoidance of doubt, may be financed with the issuance of Equity Interests of a Loan Party to the extent permitted hereby) and (ii) none of the Loan Parties shall, in connection with such Acquisition or Joint Venture, assume, remain or become liable at any time in respect of any Indebtedness or other liabilities of the seller or sellers or Target(s) of such Acquisition or such Joint Venture or any other participants in such Joint Venture (including by way of any guaranty, indemnity obligations or otherwise) and the agreements, instruments and other documents referred to in clause (c) below shall provide for the same; |
| (c) | Borrower-Agent shall have delivered to Administrative Agent not less than 30 days (or such shorter time period as Administrative Agent may otherwise agree in writing) prior to the consummation of such Acquisition or Joint Venture (x) a summary providing a reasonably detailed description of the Target or Joint Venture and the terms and conditions of the proposed acquisition, material financial, business and legal due diligence information relating to the Target or Joint Venture as Administrative Agent, or any Lender through Administrative Agent, may reasonably request, and all material legal documentation pertaining to such Acquisition or Joint Venture, and (y) all information any Lender or any Agent may request to satisfy its “know your customer”, Beneficial Ownership Certification and other similar requirements necessary for such Lender or Agent to comply with its internal compliance and regulatory requirements with respect to the proposed Target or Joint Venture, and the results of which shall be satisfactory to each Agent and Lender; |
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| (d) | both immediately before and immediately after giving pro forma effect to any such Acquisition or Joint Venture, (x) the Loan Parties shall be in pro forma compliance with the financial covenants set forth in Section 7.7, and (y) no Event of Default shall have occurred and be continuing; |
| (e) | the Target or Joint Venture shall be engaged in a business reasonably similar or complementary to Loan Parties’ business; and |
| (f) | all transactions in connection with such Acquisition or Joint Venture shall be consummated, in all material respects, in accordance with all Applicable Laws. |
“Permitted Acquisition Indebtedness” means, in connection with any Permitted Acquisition, Indebtedness of an Acquired Non-Loan Party acquired in such Permitted Acquisition which existed prior to, and not in contemplation of, such Permitted Acquisition, so long as (a) such Indebtedness is unsecured or secured only by the property of the applicable Acquired Non-Loan Party, and for the avoidance of doubt, is not secured by any property or assets of any Loan Party, and (b) none of the Loan Parties assume, remain or become liable in any respect or at any time for all or any portion of such Indebtedness (including by way of any guaranty or otherwise).
“Permitted Cannabis Business” means legitimate business activity that is substantially compliant with Applicable Cannabis Laws, but not compliant with U.S. Federal Cannabis Laws.
“Permitted Discretion” means a determination made in the exercise of reasonable (from the perspective of a secured lender) business judgment.
“Permitted Indebtedness” means:
| (a) | Indebtedness of the Loan Parties in favor of Lenders arising under this Agreement or any other Loan Document; |
| (b) | Hedging Obligations of the Loan Parties in favor of any Lender or any Affiliate of Lender; |
| (c) | Indebtedness existing on the Effective Date and disclosed in Schedule A-1; |
| (d) | Indebtedness (i) evidencing the deferred purchase price of newly acquired equipment or incurred to finance the acquisition of equipment of such Loan Party (pursuant to purchase money security arrangements or otherwise, whether owed to the seller or a third party) used in the ordinary course of business of such Loan Party (provided that such Indebtedness is incurred within 60 days of the acquisition of such property), or (ii) evidenced by Capitalized Leases into which such Loan Party enters for the acquisition of equipment used in the ordinary course of business of such Loan Party; provided that the aggregate outstanding principal amount of such Indebtedness under clauses (i) and (ii) of this clause (d) shall not exceed $3,450,000 in unsecured Debt the aggregate in any Fiscal Year of the Loan Parties; |
| (e) | Permitted Acquisition Indebtedness; |
| (f) | Endorsements for collection, deposit or negotiation and warranties of products or services, in each case, incurred in the ordinary course of business; |
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| (g) | Mortgage loan in the original principal amount not to exceed $920,000 secured by residential real property located at [***]; |
| (h) | Subordinated Debt; |
| (i) | unsecured Indebtedness incurred in the ordinary course of business of such Loan Party and its Subsidiaries in respect of open accounts extended by suppliers on normal trade terms in connection with purchases of goods and services which are not overdue for a period of more than 90 days or, if overdue for more than 90 days, as to which a dispute exists and adequate reserves in conformity with GAAP have been established on the books of such Loan Party; |
| (j) | unsecured intercompany Indebtedness: (i) between any Loan Parties, so long as such Indebtedness is evidenced by a note which is pledged to Collateral Agent and is subject to a subordination agreement (or evidenced by a note which includes subordination terms) in commercially reasonable form and substance; (ii) [reserved]; and (iii) between any Subsidiaries that are not Loan Parties; |
| (k) | Indebtedness in respect of surety bonds, performance bonds and similar instruments issued in the ordinary course of business in, an aggregate amount not to exceed $3,450,000 at any time; |
| (l) | unsecured Indebtedness in an aggregate amount not exceeding $3,450,000 at any time; |
| (m) | Contingent Obligations of any Loan Party in respect of Indebtedness otherwise permitted hereunder; |
| (n) | Indebtedness in respect of netting services, overdraft protection and otherwise in connection with deposit accounts or similar accounts incurred in the ordinary course of business; |
| (o) | Indebtedness owed to any Person providing worker’s compensation, health, disability or other employee benefits or property, casualty or liability insurance to any Loan Party or any Subsidiary incurred in connection with such Person providing such benefits or insurance pursuant to customary reimbursement or indemnification obligations to such Person, in each case, in the ordinary course of business; |
| (p) | Indebtedness of any Loan Party to the extent constituting (i) Permitted Investments or (ii) Permitted Transfers; |
| (q) | Indebtedness relating to judgments, including appeal bonds, or awards not constituting an Event of Default under Section 9.1(h); |
| (r) | extensions, refinancings and renewals of any items of Permitted Indebtedness, provided that the principal amount is not increased or the terms modified to impose more burdensome terms upon the applicable Loan Party; and |
| (s) | the First Lien Debt subject to the First Lien Intercreditor Agreement. |
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“Permitted Investments” means:
(a) | Investments existing on the Effective Date disclosed in Schedule A-2; |
(b) | Investments made pursuant to Hedging Agreements with any First Lien Lender or any Affiliate of a First Lien Lender; |
(c) | (i) marketable direct obligations issued or unconditionally guaranteed by the United States of America or any agency or any State thereof maturing within one year from the date of acquisition thereof, (ii) commercial paper maturing no more than one year from the date of creation thereof and currently having rating of at least A-2 or P-2 from either Standard & Poor’s Corporation or ▇▇▇▇▇’▇ Investors Service, (iii) certificates of deposit maturing no more than one year from the date of investment therein, and (iv) money market accounts; provided, that, with respect to any such Investments with a financial institution other than a First Lien Lender, such Investments in an aggregate shall not exceed $1,150,000 in any Fiscal Year; |
(d) | repurchases of stock from former employees or directors of any Loan Party under the terms of applicable repurchase agreements (i) in an aggregate amount not to exceed $1,150,000 in any Fiscal Year, provided that no Event of Default has occurred, is continuing or would exist after giving effect to the repurchases, or (ii) in any amount where the consideration for the repurchase is the cancellation of indebtedness owed by such former employees to any Loan Party regardless of whether an Event of Default exists; |
(e) | Investments of Subsidiaries in or to other Subsidiaries (other than Excluded Subsidiaries) or the Loan Parties and Investments by the Loan Parties in Subsidiaries (other than Excluded Subsidiaries) not to exceed $5,750,000 in the aggregate in any Fiscal Year; |
(f) | Investments not to exceed $575,000 in the aggregate in any Fiscal Year consisting of (i) travel advances and employee relocation loans and other employee loans and advances in the ordinary course of business, and (ii) loans to employees, officers or directors relating to the purchase of equity securities of any Loan Party pursuant to employee stock purchase plan agreements approved by the applicable Loan Party’s Board of Directors or other governing body; |
(g) | transactions expressly permitted by Section 8.3; |
(h) | Investments by Excluded Subsidiaries in other Excluded Subsidiaries; |
(i) | Investments (including debt obligations) received in connection with the bankruptcy or reorganization of customers or suppliers and in settlement of delinquent obligations of, and other disputes with, customers or suppliers arising in the ordinary course of any Loan Party’s business; |
(j) | Investments consisting of notes receivable of, or prepaid royalties and other credit extensions, to customers and suppliers who are not Affiliates, in the ordinary course of business, provided that this clause (j) shall not apply to Investments of the Loan Parties in any Subsidiary; and |
(k) | so long as (i) the Loan Parties are in compliance with the Financial Covenants on a pro forma basis, (ii) no Event of Default has occurred and is then continuing and (iii) the Loan |
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Parties have an Adjusted EBITDA or Liquidity equal to at least $93,500,000 on a pro forma basis, stock or other equity repurchases in an amount up to 10.00% of the Loan Parties’ Adjusted EBIDTA, on a pro forma basis.
“Permitted Liens” means: (a) statutory Liens of landlords, carriers, warehousemen, processors, mechanics, materialmen or suppliers incurred in the ordinary course of business and securing amounts not yet due or declared to be due by the claimant thereunder; (b) Liens or security interests in favor of Collateral Agent for the benefit of Secured Creditors; (c) zoning restrictions and easements, licenses, covenants and other restrictions affecting the use of Real Property, in each case, which do not interfere in any material respect with the value or use of the property to which such Lien is attached; (d) Liens in connection with purchase money indebtedness with respect to Equipment and capitalized leases otherwise permitted pursuant to this Agreement, provided, that such Liens attach only to the assets the purchase of which was financed by such purchase money indebtedness or which is the subject of such capitalized leases; (e) Liens set forth in Schedule A-3, provided that such Liens shall secure only those obligations which they secure on the Effective Date and shall not subsequently apply to any other property or assets of a Loan Party; (f) Liens specifically permitted by Agents in writing; (g) Liens for taxes, assessments and other government charges or levies not yet due and payable or which are being contested in good faith and by appropriate proceedings and for which the Loan Parties have maintained adequate reserves and notified Administrative Agent in writing; (h) Liens consisting of deposits or pledges made in the ordinary course of business in connection with workers’ compensation, unemployment, social security and similar laws, or to secure the performance of statutory obligations, bids, leases, government contracts, trade contracts, and other similar obligations (exclusive of obligations for the payment of borrowed money); (i) Liens of collecting banks under the Uniform Commercial Code on items in the course of collection and normal and customary rights of set-off of banks; (j) Liens arising from filing Uniform Commercial Code or PPSA financing statements relating solely to leases not prohibited by this Agreement; (k) Liens on cash and cash equivalents on deposit with any of the First Lien Lenders and affiliates of any of the First Lien Lenders securing obligations owing to such Persons under any treasury, depository, overdraft or other cash management services agreements or arrangements with any Loan Party; (l) Liens arising out of conditional sale, title retention, consignment or similar arrangements for sale of goods entered into by any Loan Party in the ordinary course of business and not prohibited by this Agreement; (m) Liens on the property or assets of an Acquired Non-Loan Party securing Permitted Acquisition Indebtedness; (o) judgment Liens in respect of judgments that do not constitute an Event of Default; (p) restrictions or conditions imposed on creating, incurring or allowing Liens by any agreement relating to secured Indebtedness solely to the extent permitted under this Agreement, if such restrictions or conditions apply only to the property securing such Indebtedness; (q) any customary restrictions and conditions imposed on creating, incurring or allowing Liens contained in agreements relating to the sale or other Transfer of property pending such sale or other Transfer; provided that such restrictions and conditions apply only to the property to be sold or disposed of and such sale or Transfer is permitted hereunder; (r) customary provisions in leases restricting the assignment or sublet thereof; (s) the Liens granted to First Lien Collateral Agent to secure the obligations under the First Lien Debt Documents, so long as the First Lien Intercreditor Agreement is in full force and effect and no breach thereof (other than by any Agent) has occurred and is continuing; and (t) Liens on real property located at [***] securing the mortgage loan permitted under clause (g) of the definition of Permitted Indebtedness.
“Permitted Sale-Leaseback” is defined in Section 8.16.
“Permitted Transfer” means the Transfer by any Loan Party or any Subsidiary of any Loan Party of:
(a) | Inventory in the ordinary course of business; |
(b) | non-exclusive licenses and similar arrangements for the use of the property of the Loan Parties in the ordinary course of business; |
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(c) | worn-out or obsolete Equipment; |
(d) | any Transfer resulting from a loss of, damage to or destruction of, or any condemnation or other taking for public use of, any property (subject to compliance with Section 2.6(b)); |
(e) | the making of Permitted Investments; |
(f) | Holland, MA Real Property (subject to compliance with Section 2.6(b)); |
(g) | [***]; |
(h) | a Permitted Sale-Leaseback (subject to compliance with Section 2.6(b)); |
(i) | the issuance of Equity Interests of Parent pursuant to the Missouri Acquisition Documents; |
(j) | the issuance of Equity Interests of Parent pursuant to the CAG Convertible Loan Notes; |
(k) | other issuances of Equity Interests of Parent to the extent any such issuance does not constitute a Change of Control; |
(l) | so long as no Event of Default has occurred and is continuing or would result therefrom, assets of the Loan Parties that do not in the aggregate exceed $2,875,000 during any Fiscal Year; |
(m) | dispositions of those certain Regulatory Licenses and other assets disclosed in the Caliente Purchase Agreement, pursuant to the terms of the Caliente Transaction Documents (subject to compliance with Section 2.6(b)); and |
(n) | dispositions of the Specified Transferred Equity Interests pursuant to the terms of the Northeast B Transaction Documents, so long as: (i) no Event of Default shall then be continuing or would exist after giving effect to such transaction; (ii) such transaction is consummated in accordance with the terms of the Northeast B Transaction Documents (subject to Section 7.23); (iii) the Loan Parties shall have provided to Agents and Lenders all information any Agent or Lender may request to satisfy its “know your customer”, Beneficial Ownership Certification and other similar requirements necessary for such Agent or Lender to comply with its internal compliance and regulatory requirements with respect to the Northeast B Transaction, and the results of which shall be satisfactory to each Agent and Lender; (iv) all third party consents (including consents from Governmental Authorities) and consents from the directors, managers or equityholders of the parties thereto that are necessary for such transaction have been obtained, and the transaction is consummated in accordance with Applicable Law; and (v) the Loan Parties shall have complied with the requirements of Section 7.23 in connection therewith. |
Notwithstanding anything to the contrary, and for the avoidance of doubt, Permitted Transfers shall include all Transfers by and among the Loan Parties; provided, that, in the event of any Transfer of Equity Interests by and among the Loan Parties, (x) the Loan Parties shall provide Administrative Agent with at least 10 days’ advance written notice thereof; and (y) Collateral Agent shall maintain (for the benefit of Secured Creditors) a perfected second-priority security interest in such Equity Interests, and in connection therewith, the Loan Parties take such action and execute and deliver to Collateral Agent such agreements, instruments and other documents as Collateral Agent shall reasonably request for the purpose of establishing, maintaining, perfecting or preserving a perfected second-priority security interest in such Equity Interests.
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“Permitted Uses” means with respect to the Mortgaged Properties, cannabis cultivation, manufacturing and retail operations, and each individually, is a “Permitted Use”.
“Person” means any individual, sole proprietorship, partnership, joint venture, trust, unincorporated organization, association, corporation, limited liability company, institution, entity, party or foreign or United States government (whether Federal, state, provincial, county, city, municipal or otherwise), including any instrumentality, division, agency, body or department thereof.
“Plan” means any of: (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA; (b) a “plan” as defined in Section 4975 of the Code; or (c) any Person whose assets include (for the purposes of ERISA Section 3(42) or otherwise for the purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan,” but does not include a Canadian Employee Plan or Canadian Pension Plan.
“Platform” is defined in Section 12(c).
“Pledge Agreement” means (a) that certain Pledge and Security Agreement dated as of July 3, 2025, among Administrative Agent and the Loan Parties party thereto, and (b) any other pledge agreement from time to time executed by any Loan Party in favor of Collateral Agent, for the benefit of Secured Creditors, in each case, as the same may be amended, amended and restated, modified, supplemented, or substituted from time to time.
“PPSA” means the Personal Property Security Act in effect in the Province of British Columbia, the Civil Code of Quebec as in effect in the Province of Quebec, or any other federal or provincial statute in Canada pertaining to the granting, perfecting, priority or ranking of security interests, Liens on personal property, and any successor statutes, together with any regulations thereunder, in each case as in effect from time to time. References to sections of the PPSA shall be construed to also refer to any successor sections.
“Prime-Based Rate” means a rate per annum equal to the Prime Rate plus the Applicable Margin.
“Prime Rate” means the variable rate of interest, per annum, set forth in the “Money Rates” section of the Wall Street Journal as the “prime rate,” whether or not such rate is the lowest rate available from any Lender; provided, that, if the Prime Rate, determined as provided above, would be less than the Floor, then the Prime Rate shall be deemed to be the Floor.
“Proper Convertible Note” means, collectively, (a) that certain Convertible Promissory Note dated as of March 7, 2025, issued by Proper Holdings, LLC to Chicago Atlantic Opportunity Finance, LLC, in the amount of $5,900,000, as amended on June 5, 2025, and (b) that certain Side Letter dated June 5, 2025, by and between Vireo Growth Inc. and Proper Holdings, LLC.
“Proper Convertible Note Debt” means Indebtedness of the Loan Parties under the Proper Convertible Note Documents.
“Proper Convertible Note Documents” means the Proper Convertible Note and any other agreements, documents or instruments executed and delivered in connection therewith.
“Proper Guarantors” means collectively, New Growth Horizon, LLC, Nirvana Investments, LLC, Nirvana Bliss I, LLC, Nirvana Bliss II, LLC, Nirvana Bliss III, LLC, Nirvana Bliss IV, LLC, Nirvana Bliss V, LLC, 5150 Processing, LLC, Bold Lane Logistics, LLC, and any other Subsidiary of Proper Holdings, LLC that shall be acquired by one or more Loan Parties pursuant to the Missouri Acquisition Documents.
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Notwithstanding anything to the contrary, and for the avoidance of doubt, Proper Holdings, LLC is not a Proper Guarantor.
“Proper Pledge and Guaranty” means, collectively, (a) the execution and delivery of an unlimited Guaranty by the Proper Guarantors in favor of Administrative Agent, for the benefit of Secured Creditors, in form and substance reasonably satisfactory to Administrative Agent, (b) for so long as Proper Holdings, LLC owns, directly or indirectly, the Equity Interests of the Proper Guarantors, the execution and delivery of a limited Guaranty, Pledge Agreement and related instruments (as applicable) (with respect to a pledge of the Equity Interests of the Proper Guarantors in favor of Collateral Agent) by the Proper Holdings, LLC in favor of Administrative Agent or Collateral Agent, as applicable, for the benefit of Secured Creditors, each in form and substance reasonably satisfactory to Administrative Agent, and (c) the joinder of the Proper Guarantors as Guarantors hereunder and under the other Loan Documents, including compliance with the applicable requirements of Section 7.21 and the grant of a security interest on the assets of the Proper Guarantors in favor of Collateral Agent, for the benefit of Secured Creditors, consistent with the terms of this Agreement.
“PTE” means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.
“Real Property” means, with respect to any Person, all right, title and interest of such Person (including any leasehold estate) in and to a parcel of real property owned, leased or operated by such Person together with, in each case, all improvements and appurtenant fixtures, equipment, personal property, easements and other property and rights incidental to the ownership, lease or operation thereof.
“Recipient” means Administrative Agent or a Lender, as applicable.
“Register” is defined in Section 14.1(c).
“Registration Statement” shall have the meaning set forth in Section 7.27(a).
“Regulatory Licenses” means Permits issued by the applicable Cannabis Authorities from time to time to any Loan Party to operate as a Cannabis cultivator, product manufacturer, transporter/distributor, or retail facility, as applicable, including such Permits identified on Schedule A-5.
“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.
“Release” means any actual or imminent releasing, spilling, leaking, pumping, pouring, leaching, seeping, emitting, migration, emptying, discharging, injecting, escaping, depositing, disposing, or dumping of Hazardous Materials in violation of applicable Environmental Law into the indoor or outdoor environment, including the movement of any Hazardous Material through the air, soil, surface water, groundwater or property in violation of applicable Environmental Law.
“Reportable Event” means a reportable event (as defined in Section 4043 of ERISA), other than an event for which the 30-day notice requirement under ERISA has been waived in regulations issued by the PBGC.
“Reporting Jurisdictions” means (a) all of the jurisdictions in Canada in which Parent is a “reporting issuer”, including as of the date hereof, the Provinces of British Columbia, Alberta, and Ontario and (b) if Parent’s Equity Interests are listed and posting for trading on the New York Stock Exchange or Nasdaq, the applicable reporting jurisdictions in the United States.
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“Required Contribution Date” is defined in Section 7.7(c)(i).
“Required Lenders” means, at any time, (a) if any one Lender holds the aggregate principal amount of the Loans then outstanding, such Lender; and (b) if more than one Lender holds the aggregate principal amount of the Loans then outstanding, at least two Lenders who hold more than 50.00% of the aggregate principal amount of the Loans then outstanding; provided that the outstanding principal amount of the Loans held by any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders.
“Required Permits and Approvals” means all building, zoning and other permits, licenses, authorizations, consents and approvals, and all renewals, replacements, amendments and substitutions therefor, required for the use and occupancy of any Mortgaged Property for the applicable Permitted Uses pursuant to all Applicable Laws, including all Applicable Cannabis Laws, which shall include the Regulatory Licenses and all applicable Permits.
“Rescindable Amount” shall have the meaning set forth in Section 2.8(d).
“Responsible Officer” means each of the Chief Executive Officer, the Chief Operating Officer, the Chief Financial Officer and the Controller of a Loan Party.
“Restricted Cannabis Activities” means the Loan Parties engaging (in connection with the cultivation, distribution, sale and possession of Cannabis and related products, including in connection with any leasing of any Mortgaged Property) in any: (a) activity that is not permitted under applicable U.S. Federal Cannabis Law, other than Permitted Cannabis Business; (b) activity for which a United States Attorney in any Applicable State prosecutes a Cannabis business operated at any Mortgaged Property in any Applicable State, notwithstanding its compliance with Applicable Cannabis Laws; (c) repeated distribution and sale of Cannabis and related products to minors; (d) payments to criminal enterprises, gangs, cartels and Persons who are in each case either subject to Sanctions or publicly known to be engaging in criminal activity other than Permitted Cannabis Business; (e) non-compliance with Anti-Terrorism Laws; (f) non-compliance with anti-money laundering laws, to the extent such non-compliance results from illegal activity other than Permitted Cannabis Business; (g) use of activities permitted under Applicable Cannabis Laws as a cover or pretext for the illegal trafficking of other controlled substances or other illegal activity; (h) the illegal use or display of firearms, provided that the Loan Parties and the Loan Parties’ security services vendors may use or display firearms for any legitimate purpose and in compliance with Applicable Laws, including in connection with security protocols authorized by the Office of Marijuana Use of the State of Florida, and used to protect Permitted Cannabis Business; (i) growing Cannabis and related products on public lands; and (j) directly or indirectly aiding, abetting or otherwise knowingly participating in a common enterprise with any Person or Persons in any of the foregoing activities.
“Restricted Cash Account” means a Deposit Account located at East West Bank and subject to a fully blocked Control Agreement that holds cash of the Loan Parties’ that is not subject to the Lien or claim of any Person other than First Lien Collateral Agent and Collateral Agent and as to which access by the Loan Parties is restricted.
“Restricted Payment” means (a) any dividend or other distribution (whether in cash, securities or other property) with respect to any capital stock or other Equity Interest of any Person or any of its Subsidiaries, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, defeasance, acquisition, cancellation or termination of any such capital stock or other Equity Interest, or on account of any return of capital to any Person’s stockholders, partners or members (or the equivalent of any thereof), (b) any payment in respect of any option, warrant or other right to acquire any such dividend or other distribution or payment or other Equity Interests (other than any de minimis payments solely in lieu of the issuance of fractional shares of Parent
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upon the conversion of the Convertible Loan Notes), (c) Earnout Payments, or (d) the payment of any fee, expense reimbursement, management fees, consulting fees or other amount to any Affiliate.
“Sanction(s)” means economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State, (b) the UK government, including His Majesty’s Treasury, (c) the European Union or member states, (d) Canada, including Global Affairs Canada or Public Safety Canada, or (e) the United Nations Security Council.
“SEC” means the Securities and Exchange Commission, any successor thereto, and any analogous Governmental Authority.
“Secured Creditors” means, collectively, (a) each Lender, (b) each Agent, (c) each beneficiary of each indemnification obligation undertaken by any Loan Party under the Loan Documents, (d) any successors, endorsees, transferees and assigns of each of the foregoing to the extent (with respect to transferees and assignees) any such transfer or assign is permitted by the terms of this Agreement and (e) any other holder of any Obligation.
“Shares” means 100.00% of the issued and outstanding Equity Interests owned or held of record by a Loan Party in any Subsidiary or other Loan Party.
“SOS Reports” means the official reports from the Secretary of State or other appropriate official of each Loan Party’s jurisdiction of incorporation/formation (or equivalent) and from all other applicable Federal, state, provincial, local or foreign government offices identifying all current security interests filed against the Collateral and Liens of record as of the date of such report.
“Specified Capital Contribution” is defined in Section 7.7(c)(i)(C).
“Specified Loan Party” is defined in the definition of “Specified Transferred Equity Interests”.
“Specified Tax Receivables” means those certain tax receivables of certain Borrowers set forth on Schedule A-11 in respect of Taxes previously paid by Borrowers.
“Specified Transferred Equity Interests” means those certain Equity Interests of that certain Loan Party described on Schedule A-8 (the “Specified Loan Party”) which are transferred to the Northeast B Counterparty pursuant to the Northeast B Transaction Documents.
“Specified Transferor” is defined in the definition of “Northeast B Transaction”.
“St. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇” means the Real Property located at [***].
“St. Louis Premises Mortgage Requirements” means the Loan Parties shall (a) obtain flood insurance on the St. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ in form and substance (including amounts) and from a company satisfactory to First Lien Administrative Agent in its sole discretion, and (ii) deliver to Administrative Agent (or the applicable Title Company as directed by Administrative Agent) a fully executed Mortgage with respect to St. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, in form and substance satisfactory to Administrative Agent, and otherwise cause to be delivered to Administrative Agent such opinions of local counsel, corporate resolutions, documents and items of the types referred to in Section 4.1(i) (to the extent not previously delivered to Administrative Agent), and other related documents as may be reasonably requested by Administrative Agent, in connection with the execution, delivery and recording of any such Mortgage, each of which shall be in form and substance satisfactory to Administrative Agent.
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“St. ▇▇▇▇▇ Premises Reserve Amount” means an amount equal to $10,000,000; provided, that, if the Loan Parties do not satisfy the St. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Mortgage Requirements on or before the date that is 15 Business Days following the Effective Date, the St. Louis Premises Reserve Amount shall increase to $25,000,000; provided, that, upon (a) the satisfaction of the St. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Mortgage Requirements, (b) Administrative Agent’s receipt of confirmation from the applicable Title Company that the Mortgage with respect to the St. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (and the First Lien Collateral Agent’s mortgage thereon) has been recorded and (c) the satisfaction of the conditions set forth in the definition of “St. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Reserve Amount” in the First Lien Loan Agreement, the St. Louis Premises Reserve Amount shall decrease to $0, and funds in the Restricted Cash Account earmarked as the St. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Reserve Amount shall be remitted to Borrowers.
“Statutory Plan” means any statutory plan, governmental plan or program with which the Loan Parties are required to comply, including the Canada Pension Plan, Quebec Pension Plan, Quebec Parental Insurance Plan or any plan administered under applicable provincial health tax, workers’ compensation, workers’ safety and insurance, employment standards and employment insurance legislation.
“Subordinate Voting Shares” means the subordinate voting shares of Parent.
“Subordinated Debt” means (a) the Proper Convertible Note Debt and (b) any other Indebtedness incurred by a Loan Party that is subordinated to the Obligations on terms and conditions acceptable to Administrative Agent.
“Subordinated Debt Documentation” means (a) the Proper Convertible Note Documents and (b) all of the other agreements, documents and instruments executed and delivered in connection with the incurrence of Subordinated Debt, as the same may be amended, modified, supplemented, renewed, restated or replaced from time to time in accordance with the Subordination Agreement applicable thereto.
“Subordination Agreement” means any subordination agreement approved by Agents in relation to the Obligations, in each case, as the same may be amended, amended and restated, supplemented or otherwise modified from time to time.
“Subsidiary” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of securities or other interests having more than 50.00% of the ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Loan Parties.
“Swap Obligation” means, with respect to any Guarantor, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act.
“Target” means the Person, the business or division of any Person or substantially all of the assets of a Person, acquired in an Acquisition.
“Tax Liabilities” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees, Uncertain Tax Liabilities or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
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“Tax Reserve Amount” means, as of any time, the amount by which the Uncertain Tax Liabilities of the Loan Parties and their Subsidiaries, exceeds $50,000,000. To the extent the Tax Reserve Amount is funded into the Restricted Cash Account in accordance with the foregoing and Section 7.20(a), and, subsequently, the Uncertain Tax Liabilities of the Loan Parties and their Subsidiaries decrease to an amount less than $50,000,000, upon the Loan Parties’ written request and receipt by First Lien Administrative Agent (with a copy to Administrative Agent) of a Certificate of a Responsible Officer of the Loan Parties setting forth the then current amount of Uncertain Tax Liabilities of the Loan Parties and their Subsidiaries, together with back up schedules and evidence demonstrating the then current amount of such Uncertain Tax Liabilities, in each case, in form and substance satisfactory to First Lien Administrative Agent, funds in the Restricted Cash Account earmarked as the Tax Reserve Amount shall be remitted to Borrowers. For the avoidance of doubt, the Loan Parties shall be required to replenish the Restricted Cash Account with the Tax Reserve Amount to the extent necessary to comply with Section 7.20(a).
“Taxes” means existing Tax Liabilities paid in cash during a defined measuring period.
“Term Commitment” means, for any Lender, its obligation to make its pro rata share of, as applicable, the Term Loans on the Effective Date in an original principal amount not to exceed the amount set forth opposite such ▇▇▇▇▇▇’s name on Schedule 1.1.
“Term Loans” is defined in Section 2.1(b)(i).
“Term Loan Note” means a Promissory Note in substantially similar form as Exhibit F attached hereto.
“Term Percentage” means, as to any Lender at any time, the percentage which such ▇▇▇▇▇▇’s share of the outstanding amount of the Term Loans then constitutes of the entire outstanding amount of the Term Loans.
“Threshold Amount” means an aggregate amount of $3,450,000 per Fiscal Year.
“Title Company” means ▇▇▇▇▇▇▇ Title Guaranty, or such other title insurance company as Administrative Agent may reasonably approve.
“Title Policy” means each ALTA Lender’s policy of title insurance issued by the Title Company in an amount approved by Administrative Agent in its Permitted Discretion and insuring the Mortgages as second and prior Lien and encumbrance upon each Mortgaged Property, subject only to the Permitted Liens.
“Total Credit Exposure” means, as to any Lender at any time, the outstanding amount of each Loan at such time.
“Total Leverage Ratio” means, as of any date of determination, the ratio of (a) Indebtedness to (b) Adjusted EBITDA for the trailing 12-month period ended on such date.
“Trade Date” is defined in Section 14.1(b)(i)(B).
“Trademarks” means any trademark and service mark rights, whether registered or not, applications to register (other than “intent to use” applications until a verified statement of use is filed with respect to such application) and registrations of the same and like protections, and the entire goodwill of the business of the Loan Parties connected with and symbolized by such trademarks.
“Transfer” has the meaning set forth in Section 8.1.
“Transferee” means any Eligible Assignee or Participant.
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“UCC” means the Uniform Commercial Code as in effect in the State of New York, as amended or supplemented from time to time.
“UCP” means the Uniform Customs and Practices for Documentary Credits, as published by the International Chamber of Commerce.
“Uncertain Tax Liabilities” means, with respect to the Loan Parties and their Subsidiaries, the sum of (a) those amounts in respect of potential Tax Liabilities reflected as liabilities on the most recent financials statements of the Loan Parties delivered pursuant to Sections 7.2(a) and 7.2(b) (including income taxes owing pursuant to Section 280(e) of the Internal Revenue Code of 1986, as amended), net of (i) the Specified Tax Receivables, solely to the extent and for so long as each such Specified Tax Receivable is reported as an Uncertain Tax Liability by the Loan Parties pursuant to this clause (a) and reflected as a corresponding liability on the Loan Parties’ financial statements and each such Specified Tax Receivable is not otherwise included as an Indemnified Uncertain Tax Liability, plus (ii) Indemnified Uncertain Tax Liabilities, plus (b) the amount of any Tax Liabilities determined to be due and payable pursuant to a final determination, decision or judgment by the Internal Revenue Service or court of competent jurisdiction to the extent and for so long as such Tax Liabilities remain unpaid (it being acknowledged and agreed that upon the written request of Borrower-Agent (together with a copy of any such final determination, decision or judgment), East West Bank shall remit funds from the Restricted Cash Account as may be necessary to pay any such Tax Liabilities described in this clause (b)).
“United States” and “U.S.” means the United States of America.
“U.S. Federal Cannabis Law” means U.S. federal laws, statutes, codes, ordinances, decrees, orders, rules and regulations (“Laws”), civil, criminal or otherwise, to the extent that such Law is directly or indirectly related to the cultivation, harvesting, production, manufacturing, processing, extraction, marketing, distribution, trafficking, sale, use or possession of Cannabis or products containing Cannabis, including the prohibition on drug trafficking under the Controlled Substances Act (21 U.S.C. ⸹⸹ 801 et seq.), the conspiracy statute under 18 U.S.C. ⸹ 846, the bar against aiding and abetting the conduct of an offense under 18 U.S.C. ⸹2, the bar against misprision of a felony (concealing another’s felonious conduct) under 18 U.S.C. ⸹ 4, the bar against being an accessory after the fact to criminal conduct under 18 U.S.C. ⸹ 3, and federal money laundering statutes under 18 U.S.C. ⸹⸹ 1956, 1957 and 1960.
“U.S. Person” means any Person that is a “United States Person” as defined in Section 7701(a)(30) of the IRC.
“U.S. Tax Compliance Certificate” is defined in Section 2.9(f).
“Wholesome Acquisition Documents” means, collectively, (a) the Agreement and Plan of Merger, dated as of December 18, 2024 by and among Parent, Wholesomeco, Inc. (as successor in interest to ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ Sub, Inc.), and Shareholder Representative Services LLC, as amended or modified from time to time, and (b) all other documents entered into or delivered in connection therewith, in each case, in the form delivered to Administrative Agent prior to the Effective Date.
“Withholding Agent” means, as applicable, Borrower-Agent or Administrative Agent, as the context may require.
“Write-Down and Conversion Powers” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.
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EXHIBIT B
COLLATERAL DESCRIPTION ATTACHMENT TO LOAN AND SECURITY AGREEMENT
With respect to each Loan Party:
All right, title and interest of the Loan Party (herein referred to as “Debtor”) in all of the following property and assets, whether presently existing or hereafter created or acquired, and wherever located:
| (a) | all accounts, chattel paper (including tangible and electronic chattel paper), commercial tort claims, deposit accounts, documents (including negotiable documents), equipment (including all accessions and additions thereto), general intangibles (including payment intangibles, intellectual property, interests in a partnership or limited liability company which do not constitute a security under Article 8 of the UCC, the rights, powers, and remedies under the Operating Documents of the Person that issued such interests and any other personal property other than commercial tort claims, money, accounts, chattel paper, deposit accounts, goods, investment property, negotiable collateral, and oil, gas or other minerals before extraction), goods (including fixtures), instruments (including promissory notes), inventory (including all goods held for sale or lease or to be furnished under a contract of service, and including returns and repossessions), investment property (including securities, securities entitlements and the rights, powers, and remedies under the Operating Documents of the Person that issued such securities), letter of credit rights, money, and all of Debtor’s books and records with respect to any of the foregoing, and the computers and equipment containing said books and records; and |
| (b) | all of such ▇▇▇▇▇▇’s money or other assets of such Debtor that now or hereafter come into the possession, custody, or control of any Agent or any Lender; |
| (c) | all other personal property; |
| (d) | any and all substitutions, replacements, additions, accessions, products to or of any of the foregoing; |
| (e) | any and all cash proceeds or noncash proceeds thereof, including insurance proceeds, and all supporting obligations and the security therefor or for any right to payment. |
All terms above have the meanings given to them in the Uniform Commercial Code of the State of New York, as amended or supplemented from time to time.
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EXHIBIT C
FORM OF COMPLIANCE CERTIFICATE
[_____], 202[_]
Chicago Atlantic Admin, LLC, as
Administrative Agent
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
Chicago, Illinois 60611
Attn: Loan Department
E-mail: ▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Reference is hereby made to that certain Loan and Security Agreement, dated as of July 3, 2025, by and among Vireo Growth Inc., a corporation formed under the laws of the province of British Columbia (“Vireo”), each Person listed as “Borrower” on the signature pages thereto and each other Person that becomes a “Borrower” thereunder, the Guarantors from time to time party thereto, the Lenders from time to time party thereto, Chicago Atlantic Admin, LLC, a Delaware limited liability company, as Administrative Agent and Collateral Agent for the Lenders, and Chicago Atlantic Credit Advisers, LLC, a Delaware limited liability company, as Lead Arranger (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Loan Agreement”; capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such terms in the Loan Agreement). Pursuant to Section 7.2(f) of the Loan Agreement, the undersigned individual, solely in [his/her] capacity as Responsible Officer of Vireo, and not individually, hereby certifies on behalf of Vireo and each other Loan Party, to Administrative Agent and the other Lender Parties that the information furnished herein and in the attached schedules, including, without limitation, each of the calculations set forth herein, are, to the undersigned’s knowledge, true, correct and complete in all material respects as of the last day of the fiscal periods subject to the financial statements and associated covenants being delivered to Administrative Agent together with this Compliance Certificate and for such reporting periods (as defined below).
The undersigned hereby further certifies to Administrative Agent and the Lender Parties that:
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Very truly yours,
LOAN PARTIES:
VIREO HEALTH, INC.
VERDANT GROVE, LLC
VIREO HEALTH OF PUERTO RICO, LLC
VIREO HEALTH DE PUERTO RICO LLC
MARYMED LLC
VIREO OF CHARM CITY, LLC
RESURGENT BIOSCIENCES, INC.
RETAIL MANAGEMENT ASSOCIATES, LLC
VIREO HEALTH OF NEVADA I, LLC
MJ DISTRIBUTING C201, LLC
MJ DISTRIBUTING P132, LLC
VIREO PR MERGER SUB INC.
VIREO PR MERGER SUB II INC.
By:
Name:
Title:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ LLC
HICOLOR, LLC
VIREO HEALTH OF MINNESOTA, LLC
VIREO HEALTH OF NEW YORK LLC
VIREO MARKETING, LLC
By:
Name:
Title:
DEEP ROOTS HOLDINGS, INC.
DEEP ROOTS OPERATING, INC.
DEEP ROOTS HARVEST, INC.
DEEP ROOTS PROPERTIES, LLC
DEEP ROOTS ARIA ACQCO, INC.
By:
Name:
Title:
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WHOLESOMECO, INC. WHOLESOME AG, LLC WHOLESOME GOODS, LLC WHOLESOME THERAPY, LLC WHOLESOME DIRECT, LLC WC STAFFING, LLC
ARCHES IP, INC.
By:
Name:
Title:
5150 PROCESSING, LLC
BOLD LANE LOGISTICS, LLC
NEW GROWTH HORIZON, LLC
NIRVANA INVESTMENTS, LLC
NIRVANA BLISS I, LLC
NIRVANA BLISS II, LLC
NIRVANA BLISS III, LLC
NIRVANA BLISS IV, LLC
NIRVANA BLISS V, LLC
By:
Name:
Title:
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Schedule A
[See attached.]
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Schedule B
[See attached.]
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EXHIBIT D
FORM OF ASSIGNMENT AND ASSUMPTION
This Assignment and Assumption (this “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between the Assignor identified in item 1 below (the “Assignor”) and the Assignee identified in item 2 below (the “Assignee”). Capitalized terms used but not defined herein shall have the respective meanings given to them in the Loan Agreement identified below (the “Loan Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Loan Agreement, as of the Effective Date inserted by Administrative Agent as contemplated below (i) all of the Assignor’s rights and obligations in its capacity as a Lender under the Loan Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor under the applicable credit facility or facilities identified below and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the Loan Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned by the Assignor to the Assignee pursuant to clauses (i) and (ii) above being referred to herein collectively as the “Assigned Interest”). Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor.
| 2. | Assignee: [_____] |
| 3. | Borrowers: Vireo Growth Inc., a corporation formed under the laws of the province of British Columbia (“Vireo”), and each of the other Persons identified as borrowers on the signature pages to the Loan Agreement (together with Vireo, each individually, a “Borrower” and collectively, jointly and severally, the “Borrowers”) |
| 4. | Administrative Agent: Chicago Atlantic Admin, LLC, as Administrative Agent under the Loan Agreement (“Administrative Agent”) |
| 5. | Loan Agreement: Loan and Security Agreement, dated as of July 3, 2025, by and among ▇▇▇▇▇, the Borrowers, the Guarantors from time to time party thereto, the Lenders from time to time party thereto, Administrative Agent, Chicago Atlantic Admin, LLC, as Collateral Agent, and Chicago Atlantic Credit Advisers, LLC, as Lead Arranger. |
| 6. | Assigned Interest: |
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Assignor | Assignee | Aggregate Amount of Term Loans of all Lenders | Amount of Term Loans Assigned | Percentage of Term Loans Assigned | Aggregate Amount of Convertible Loan of all Lenders | Amount of Convertible Loans Assigned | Percentage of Convertible Loans |
| | | | | | | |
Effective Date: [ ], 20[__]
[Remainder of page intentionally left blank. Signature page(s) follow(s).]
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The terms set forth in this Assignment and Assumption are hereby agreed to:
ASSIGNOR
[____________________________]
By:
Name:
Title:
ASSIGNEE
[_____________________________]
By:
Name:
Title:
[IF APPLICABLE Consented to and Accepted:
CHICAGO ATLANTIC ADMIN, LLC, as
Administrative Agent
By:
Name:
Title: Authorized Person]
[IF APPLICABLE: Consented to:
VIREO GROWTH INC.,
as Borrower-Agent on behalf of Borrowers
By:
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Chief Executive Officer]
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ANNEX 1 TO ASSIGNMENT AND ASSUMPTION
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
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| 2. | Payments. From and after the Effective Date, Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date and to the Assignee for amounts which have accrued from and after the Effective Date. |
| 3. | General Provisions. This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy or electronic mail shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of New York. |
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EXHIBIT E
Reserved.
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EXHIBIT F
TERM NOTE
FOR VALUE RECEIVED, the undersigned VIREO GROWTH INC., a corporation formed under the laws of the province of British Columbia (“Vireo”), and each of the other Persons identified as borrowers on the signature pages hereto (together with Vireo, each individually, a “Borrower” and collectively, jointly and severally, the “Borrowers”), hereby promises to pay to CHICAGO ATLANTIC OPPORTUNITY FINANCE, LLC, a Delaware limited liability company (together with its successors and assigns, “Lender”), in lawful money of the United States and in immediately available funds, the principal amount of THIRTY-THREE MILLION and 00/100 Dollars ($33,000,000.00), together with interest from the date of disbursement computed on the principal balances hereof from time to time outstanding as set forth in the Loan and Security Agreement dated as of the date hereof by and among Borrowers, the Guarantors from time to time party thereto, Lender, Chicago Atlantic Admin, LLC, a Delaware limited liability company (“Chicago Atlantic”), as administrative agent (together with its successors and assigns in such capacity, collectively, “Administrative Agent”), Chicago Atlantic, as Collateral Agent, and Chicago Atlantic Credit Advisers, LLC, a Delaware limited liability company, as Lead Arranger (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Loan Agreement”). The Loan Agreement is incorporated herein by this reference in its entirety. Capitalized terms used but not otherwise defined herein that are used in this Term Note (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, this “Note”) shall have the meanings set forth in the Loan Agreement.
This Note is entitled to the benefits of the Loan Agreement. The Loan Agreement, among other things, contains provisions for acceleration of the maturity of this Note upon the happening of certain stated events and also for prepayments on account of principal hereof prior to the maturity of this Note upon the terms and conditions specified in the Loan Agreement.
Borrowers further promise to pay interest on the unpaid principal amount hereof outstanding from time to time from the date hereof until payment in full hereof at the rate (or rates) from time to time applicable to the Term Loan (or any portion or portions thereof) as determined in accordance with the Loan Agreement. Interest shall be calculated on the basis of a three hundred sixty (360)-day year for the actual days elapsed.
Each Borrower waives demand, presentment and protest, and notice of demand, presentment, protest and nonpayment. Except as otherwise provided in the Loan Agreement or other Loan Documents, each Borrower waives all rights to notice and hearing of any kind upon the occurrence of an Event of Default prior to the exercise by any Agent of its rights under the Loan Agreement and at law or in equity.
Borrowers shall make all payments of principal and interest to Administrative Agent for the account of Lender at Administrative Agent’s office located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or at such other place as Administrative Agent may from time to time designate in writing. If this Note is not paid when due, whether at its specified or accelerated maturity date, Borrowers promise to pay all costs of collection and enforcement of this Note, including, but not limited to, reasonable external attorneys’ fees and costs, incurred by any Agent or Lender on account of such collection or enforcement, whether or not suit is filed hereon.
To the extent any provision of this Note conflicts with the First Lien Intercreditor Agreement, the First Lien Intercreditor Agreement shall control. The obligations evidenced by this Note are subordinate,
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in the manner and to the extent set forth in the First Lien Intercreditor Agreement, to the indebtedness and other liabilities owed under and pursuant to the First Lien Loan Agreement and the other First Lien Debt Documents. Without limiting the generality of the foregoing, until the First Lien Debt is Paid in Full (as defined in the First Lien Intercreditor Agreement), and notwithstanding anything herein to the contrary, all rights and remedies of Lender hereunder shall be subject to the terms of the First Lien Intercreditor Agreement.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the undersigned has executed and delivered this Note as of the date and year first above written.
VIREO HEALTH, INC.
VERDANT GROVE, LLC
VIREO HEALTH OF PUERTO RICO, LLC
VIREO HEALTH DE PUERTO RICO LLC
MARYMED LLC
VIREO OF CHARM CITY, LLC
RESURGENT BIOSCIENCES, INC.
RETAIL MANAGEMENT ASSOCIATES, LLC
VIREO HEALTH OF NEVADA I, LLC
MJ DISTRIBUTING C201, LLC
MJ DISTRIBUTING P132, LLC
VIREO PR MERGER SUB INC.
VIREO PR MERGER SUB II INC.
By:
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ LLC
HICOLOR, LLC
VIREO HEALTH OF MINNESOTA, LLC
VIREO HEALTH OF NEW YORK LLC
VIREO MARKETING, LLC
By:
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chief Executive Officer
DEEP ROOTS HOLDINGS, INC.
DEEP ROOTS OPERATING, INC.
DEEP ROOTS HARVEST, INC.
DEEP ROOTS PROPERTIES, LLC
DEEP ROOTS ARIA ACQCO, INC.
By:
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Executive Officer
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WHOLESOMECO, INC.
WHOLESOME AG, LLC
WHOLESOME GOODS, LLC
WHOLESOME THERAPY, LLC
WHOLESOME DIRECT, LLC
WC STAFFING, LLC
ARCHES IP, INC.
By:
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Executive Officer
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EXHIBIT G
UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS CONVERTIBLE LOAN NOTE MUST NOT TRADE THE CAPITAL STOCK OBTAINED HEREUNDER BEFORE NOVEMBER 1, 2025.
THIS CONVERTIBLE LOAN NOTE AND THE CAPITAL STOCK ISSUABLE UPON THE CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATE IN THE UNITED STATES. THIS CONVERTIBLE LOAN NOTE AND THE CAPITAL STOCK ISSUABLE UPON THE CONVERSION HEREOF ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.
CONVERTIBLE LOAN NOTE
FOR VALUE RECEIVED, the undersigned (collectively, “Borrowers”), hereby jointly and severally promise to pay to CHICAGO ATLANTIC OPPORTUNITY FINANCE, LLC (together with its successors and assigns, “Lender”), at the office of Administrative Agent (as defined below), the sum of the maximum principal sum of TEN MILLION AND NO/100 DOLLARS ($10,000,000.00) or, if less, the sum of the aggregate unpaid principal amount of the Convertible Loans made by Lender to Borrowers pursuant to that certain Loan and Security Agreement dated as of June 30, 2025 (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Loan Agreement”; capitalized terms used herein and not otherwise defined herein shall have the meaning ascribed to such terms in the Loan Agreement), among Borrowers, the other Loan Parties from time to time party thereto, Lender and the other lenders from time to time party thereto, CHICAGO ATLANTIC ADMIN, LLC, as administrative agent for the lenders (in such capacity, “Administrative Agent”) and as collateral agent for Secured Creditors and the other Persons party thereto, in lawful money of the United States of America in immediately available funds, and to pay interest from the date hereof on the principal amount thereof from time to time outstanding, in like funds, at said office, at the rate or rates per annum and payable on such dates as provided in the Loan Agreement.
(any such event being referred to as a “Subordinate Voting Share Reorganization”), the Conversion Price shall be adjusted, effective immediately after the effective date or record date at which holders of Subordinate Voting Shares are determined for purposes of the Subordinate Voting Share Reorganization, by multiplying the Conversion Price in effect immediately prior to such effective date or record date, by a fraction of which:
To the extent that any adjustment in the Conversion Price occurs pursuant to Section 3(a)(iii) as a result of the fixing by Parent of a record date for the distribution of Convertible Securities, the Conversion Price shall be readjusted after the expiration of any relevant exchange or conversion right to
the number of Subordinate Voting Shares which would then be in effect based upon the number of Subordinate Voting Shares actually issued and remaining issuable after such expiration.
To the extent that any adjustment in the Conversion Price occurs pursuant to this Section 3(b) as a result of Parent fixing a record date for a Rights Offering, the Conversion Price shall be readjusted based on the number of Offered Shares (or Convertible Securities that are convertible into Offered Shares) actually issued and delivered upon the exercise of the rights, options or warrants, as the case may be, but subject to any other adjustment required hereunder by reason of any other event arising after such record date. Any Offered Shares owned by or held for the account of Parent shall be deemed not to be outstanding for the purpose of any computation made pursuant to this Section 3(b).
To the extent that any adjustment in the Conversion Price occurs pursuant to this Section 3(c) as a result of Parent fixing a record date for a Special Distribution, the Conversion Price shall be readjusted based on the shares, rights, options, warrants, evidences of indebtedness or other assets actually distributed or the number of Subordinate Voting Shares or Convertible Securities actually delivered upon the exercise of rights, options and warrants, as the case may be, but subject to any other adjustment required hereunder by reason of any other event arising after such record date. Any Subordinate Voting Shares owned by or held for the account of Parent shall be deemed not to be outstanding for the purpose of any computation made pursuant to Section 3(c).
(any of such events being herein referred to as “Capital Reorganization”), then, immediately upon the effective time of such Capital Reorganization and at all times thereafter, Lender shall be entitled to be issued and receive and shall accept for the same aggregate consideration, upon conversion of this Note, in lieu of the number of Subordinated Voting Shares of Parent to which Lender was theretofore entitled upon conversion of this Note, the kind and aggregate number of shares or other securities or property of Parent
or the Person resulting from such Capital Reorganization that Lender would have been entitled to be issued and receive upon such Capital Reorganization if, immediately prior to the effective time thereof, Lender had been the registered holder of the number of Subordinated Voting Shares of Parent to which ▇▇▇▇▇▇ was theretofore entitled upon conversion of this Note. If necessary, as a result of any such Capital Reorganization, appropriate adjustments shall be made in the application of the provisions of this Note with respect to the rights and interests thereafter of Lender to the end that the provisions set forth in this Note shall thereafter correspondingly be made applicable, as nearly as may be reasonably possible, with respect to any shares, other securities or property to which Lender be is entitled on the conversion of this Note.
“UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE NOVEMBER 1, 2025.
Any certificate representing the Subordinate Voting Shares will also bear the following legend (the “U.S. Legend”):
“THE SUBORDINATE VOTING SHARES REPRESENTED BY THIS CERTIFICATE ARE ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) AND, EXCEPT AS EXPRESSLY PROVIDED HEREIN, HAVE NOT BEEN REGISTERED PURSUANT TO THE SECURITIES ACT OR OTHER APPLICABLE SECURITIES LAWS. SUBORDINATE VOTING SHARES MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, OR OTHERWISE DISPOSED EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER.”
provided that, at any time subsequent to the date which is four months and one day after the date of this Note, any certificate representing such Subordinate Voting Shares may be exchanged for a certificate bearing no Canadian Legend but such certificate shall continue to bear the U.S. Legend until it is removed in accordance with Applicable Securities Legislation. If requested by Lender, Parent shall use commercially reasonable efforts to (a) cause the removal of the restrictive legends from any such Subordinate Voting Shares being sold under the Registration Statement or pursuant to Rule 144 under the Securities Act at the time of sale of such Subordinate Voting Shares and (b) cause its legal counsel to deliver an opinion, if necessary, to the transfer agent in connection with the instruction under subclause (a) to the effect that the removal of such restrictive legends in such circumstances may be effected under the Securities Act, in each case upon the receipt of customary representations and other documentation, if any, from Lender as reasonably requested by the transfer agent or reasonably required under securities laws for the removal of legends and issuance of related opinion letters, establishing that restrictive legends are no longer required.
Concurrently with any notice to Parent given under Section 2(a), Lender shall provide a Representation Letter to Parent.
[The remainder of this page is intentionally left blank.]
IN WITNESS WHEREOF, this Convertible Loan Note is executed under seal as of the date first set forth above.
BORROWERS:
VIREO GROWTH INC.
VIREO HEALTH, INC.
VERDANT GROVE, LLC
VIREO HEALTH OF PUERTO RICO, LLC
VIREO HEALTH DE PUERTO RICO LLC
MARYMED LLC
VIREO OF CHARM CITY, LLC
RESURGENT BIOSCIENCES, INC.
RETAIL MANAGEMENT ASSOCIATES, LLC
VIREO HEALTH OF NEVADA I, LLC
MJ DISTRIBUTING C201, LLC
MJ DISTRIBUTING P132, LLC
VIREO PR MERGER SUB INC.
VIREO PR MERGER SUB II INC.
By:
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ LLC
HICOLOR, LLC
VIREO HEALTH OF MINNESOTA, LLC
VIREO HEALTH OF NEW YORK LLC
VIREO MARKETING, LLC
By:
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chief Executive Officer
DEEP ROOTS HOLDINGS, INC.
DEEP ROOTS OPERATING, INC.
DEEP ROOTS HARVEST, INC.
DEEP ROOTS PROPERTIES, LLC
DEEP ROOTS ARIA ACQCO, INC.
By:
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Executive Officer
WHOLESOMECO, INC.
WHOLESOME AG, LLC
WHOLESOME GOODS, LLC
WHOLESOME THERAPY, LLC
WHOLESOME DIRECT, LLC
WC STAFFING, LLC
ARCHES IP, INC.
By:
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Executive Officer
Loan Schedule
Date | Amount of Loan | Amount of Principal Paid or Prepaid | Balance of Principal Unpaid | Notation Made By: |
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