MedMen Enterprises (MMNFQ) 10-12G/ARegistration of securities (amended)

EXHIBIT 10.13

Execution Version

SECOND AMENDED AND RESTATED

SECURITIES PURCHASE AGREEMENT

by and among

MEDMEN ENTERPRISES INC.

as the Company

EACH OTHER CREDIT PARTY SIGNATORY HERETO,

THE PURCHASERS PARTY HERETO,

as the Purchasers, and

GOTHAM GREEN ADMIN 1, LLC

as the Collateral Agent

July 2, 2020

Table of Contents

EXHIBITS

SECOND AMENDED AND RESTATED

SECURITIES PURCHASE AGREEMENT

THIS SECOND AMENDED AND RESTATED SECURITIES PURCHASE AGREEMENT (as amended, restated, supplemented or otherwise modified and in effect from time to time, this “Agreement”) is entered into as of July 2, 2020, by and among MEDMEN ENTERPRISES INC., a company incorporated under the laws of the Province of British Columbia (the “Company”), MM CAN USA, INC., a California corporation (“Holdings” and, with the Company, collectively, the “Initial Borrowers”, and each is an “Initial Borrower”), each other Credit Party party hereto, each Purchaser (defined herein) party hereto and Gotham Green Admin 1, LLC, a Delaware limited liability company (the “Collateral Agent”).

RECITALS

Subject to the terms and conditions of that certain Securities Purchase Agreement dated April 23, 2019, by and among the parties hereto, as amended by the First Amendment and Second Amendment (each as hereinafter defined) (collectively, the “First Agreement”), the Borrowers (as hereinafter defined) issued and sold to the Purchasers first priority senior secured convertible notes in an aggregate initial principal amount of $153,750,000, which were Tranche 1 Notes, Tranche 2 Notes, Tranche 3 Notes and Amendment Fee Notes (each as hereinafter defined), and the Company issued and sold to the Purchasers warrants to purchase Shares, which were Tranche 1 Warrants, Tranche 2 Warrants and Tranche 3 Warrants (each as hereinafter defined).

The parties entered into an Amended and Restated Securities Purchase Agreement dated March 27, 2020, by and among the parties hereto (the “Existing Agreement”), pursuant to which the parties amended certain provisions of the First Agreement and Existing Notes (as hereinafter defined) and the Purchasers purchased senior secured convertible notes and warrants from the Borrowers and Company, respectively.

Subject to the terms and conditions set forth herein, (a) the parties hereto desire to amend and restate the Existing Agreement in its entirety and amend certain provisions of the Notes, (b) the Purchasers have agreed to waive the Existing Defaults, and (c) the Borrowers (as hereinafter defined) desire to issue and sell to the Purchasers, and the Purchasers shall accept, additional first priority senior secured convertible notes in an aggregate initial principal amount of $2,000,000 as consideration for the amendments and waivers granted hereunder.

AGREEMENTS

In consideration of the recitals and the mutual agreements and covenants herein contained and other good and valuable consideration, the receipt, adequacy and sufficiency of which hereby are acknowledged, the parties hereto hereby agree, effective as of the Second Restatement Closing Date, as follows:

ARTICLE I

DEFINITIONS

1.1 Definitions. In addition to the capitalized terms defined elsewhere in this Agreement, the following capitalized terms shall have the following respective meanings when used in this Agreement:

“2020 Amendment Fee Notes” means the first priority senior secured convertible notes issued on the Second Restatement Closing Date by the Borrowers to the Purchasers in the aggregate principal amount of $2,000,000, in substantially the form attached hereto as Exhibit D, as amended, modified, supplemented or restated from time to time, together with all notes issued in substitution or exchange therefor.

“Accordion Base Price” means the lesser of (a) the volume-weighted average trading price of the Shares for the twenty (20) consecutive trading days ending on the trading day prior to the applicable Funding Date (with the conversion from Canadian dollars (as reported by the CSE) to U.S. dollars being determined based on the exchange rate published by the Bank of Canada for the day immediately prior to the Funding Date) and (b) USD$6.09 per Share.

“Acquisition” means any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the assets of a Person, or of any business or division of a Person, (b) the acquisition of securities carrying more than fifty percent (50%) of the voting rights of any Person or otherwise causing any Person to become a Subsidiary of any Credit Party, (c) any other acquisition of Property outside the Ordinary Course of Business, or (d) a merger or consolidation or any other combination with another Person.

“Adjusted Conversion/Exercise Price” means, collectively, (a) the Conversion Price as defined in the Incremental Notes, (b) the Conversion Price as defined in the Amended and Restated Notes that is applicable to the Restatement Fee portion of the principal amount thereof (fully accreted as of the relevant date of determination with respect to interest and other unpaid fees and expenses), (c) the Conversion Price as defined in the Amended and Restated Notes that is applicable to the Tranche 4 Advance and the Amended Portion of the Existing Notes Principal, and (d) the Exercise Price as defined in each of the Tranche 4 Warrants and the Incremental Warrants, in each case with respect to the foregoing clauses (a) through (d), with respect to such Notes and Warrants that are outstanding at the applicable time.

“Advances” means, collectively, the Tranche 1 Advances, Tranche 2 Advance, Tranche 3 Advance, Tranche 4 Advance and the Incremental Advances, and each is an “Advance”.

“Affiliate” means, as to any Person, any other Person which, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. A Person shall be deemed to control another Person if the controlling Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of the other Person, whether through the ownership of voting securities, by contract or otherwise. Without limitation, any director, manager (within the meaning of any applicable limited liability company law) or beneficial owner of securities carrying more than ten percent (10%) of the voting rights attached to all securities of a Person shall, for the purposes of this Agreement, be deemed to control the other Person. Notwithstanding the foregoing, none of the Purchasers shall be deemed an “Affiliate” of any Credit Party or of any Subsidiary of any Credit Party.

“Amended and Restated Notes” means the first priority senior secured convertible notes issued on the Tranche 4 Funding Date by the Borrowers to the Purchasers, in an aggregate principal amount equal to the sum of the Fully Accreted Principal Amount immediately prior to the Tranche 4 Advance, plus the Tranche 4 Advance, plus the Restatement Fee due on the Tranche 4 Funding Date, with the conversion prices set forth therein (provided, that any share price set out in this Agreement shall be subject to adjustment from time to time in the same manner as is set out in Section 4.5 of the Notes with respect to the Conversion Price), in substantially the form attached hereto as Exhibit A-2, as amended, modified, supplemented or restated from time to time, together with all notes issued in substitution or exchange therefor.

“Amended Portion of the Existing Notes Principal” means the portion of the Existing Notes Principal (as defined in the Amended and Restated Notes), fully accreted as of the relevant date of determination with respect to interest and other unpaid fees and expenses, that has, as of the relevant date of determination, already been adjusted under Section 4.3 of the Amended and Restated Notes.

“Amendment Fee Notes” means the first priority senior secured convertible notes issued on the Second Amendment Effective Date by the Borrowers to the Purchasers in the aggregate principal amount of $18,750,000, in substantially the form attached hereto as Exhibit A-1, as amended, modified, supplemented or restated from time to time, together with all notes issued in substitution or exchange therefor.

“Arizona Subsidiaries” means Kannaboost Management, LLC, a Delaware limited liability company, CSI Solutions Management, LLC, a Delaware limited liability company, MME AZ Group, LLC, a Delaware limited liability company, Omaha Management Services, LLC, a Delaware limited liability company, EBA Holdings, Inc., an Arizona corporation, Kannaboost Technology, Inc., an Arizona corporation, CSI Solutions, LLC, an Arizona limited liability company, and their respective Subsidiaries.

“Attorney Costs” means and includes all reasonable and invoiced fees and disbursements of any law firm or other external counsel.

“Bankruptcy Code” means the Federal Bankruptcy Reform Act of 1978 (11 U.S.C. §101, et seq.).

“Borrowers” means, collectively, the Initial Borrowers and each other Person that becomes a party hereto as a “Borrower”, and each is a “Borrower.”

“Business Day” any day except Saturday, Sunday or any day on which banks are generally not open for business in the City of Los Angeles, California, City of Toronto, Ontario or New York, New York.

“Canadian Pension Plan” means a “registered pension plan”, as such term is defined in subsection 248(1) of the Income Tax Act, or is subject to the funding requirements of applicable pension benefits legislation in any Canadian jurisdiction and which is or was sponsored, administered or contributed to, or required to be contributed to, by any Credit Party or under which any Credit Party has or may incur any actual or contingent liability, and for the avoidance of doubt, a “Canadian Pension Plan” shall not include a Pension Plan.

“Canadian Securities Laws” means, collectively, all applicable securities laws of each of the provinces and territories of Canada and the respective rules and regulations under such laws together with applicable published policy statements, blanket orders, instruments, and notices of the Securities Commissions having the force of law, including NI 45-106 and NI 45-102 and all discretionary orders or rulings, if any, of the Securities Commissions made in connection with the transactions contemplated by this Agreement or applicable to the Company.

“Cannabis Law” means any Law relating to the farming, growth, production, processing, packaging, sale or distribution of cannabis or any cannabidiol product (other than Excluded Laws).

“Cannabis License” means a Permit issued by any Governmental Authority pursuant to applicable Cannabis Laws, including, without limitation, those issued to any Credit Party as set forth on Schedule 1.1(a).

“Cannabis License Holder” means any Person to whom a Cannabis License has been issued that (i) is a Credit Party or any Subsidiary, (ii) has a Material Agreement with a Credit Party or any Subsidiary or (iii) has received or is the subject of any Investment made by any Credit Party or any Subsidiary as and to the extent permitted by applicable Laws. In the context used, if “Cannabis License Holder” is used in the same list as the term “Subsidiary” or “Subsidiary of the Company”, the meaning of “Cannabis License Holder” shall not include clause (i) of the definition thereof.

“Capital Lease” means, as to any Person, any leasing or similar arrangement which, in accordance with GAAP or IFRS, as applicable, is or should be classified as a capital lease on the balance sheet of such Person.

“Capital Lease Obligations” means, as to any Person, all monetary obligations of such Person under any Capital Leases.

“Cash Equivalents” means as to any Person: (a) securities issued or fully guaranteed or insured by the United States Government or any agency thereof having maturities of not more than six (6) months from the date of acquisition; (b) certificates of deposit, time deposits, repurchase agreements, reverse repurchase agreements, or bankers’ acceptances, having in each case a tenor of not more than six (6) months, issued by any U.S. commercial bank or any branch of agency of a non-U.S. bank licensed to conduct business in the U.S., in either case having combined capital and surplus of not less than $250,000,000; (c) commercial paper of an issuer rated at least A 1 by Standard & Poor’s Financial Services LLC or P 1 by Moody’s Investors Service Inc. (or carrying an equivalent rating by a nationally recognized rating agency if both of the two named rating agencies cease publishing ratings of commercial paper issuers generally), in either case having a tenor of not more than three (3) months; (d) securities issued or directly and fully guaranteed or insured by the government of Canada or any province or any agency or instrumentality thereof (provided that the full faith and credit of the government of Canada is pledged in support thereof) having maturities of not more than one year from the date of acquisition by such Person; (e) term deposits and certificates of deposit of any bank organized under the laws of Canada having capital, surplus and undivided profits aggregating in excess of $2,500,000,000, having maturities of not more than six months from the date of acquisition by such Person; (f) repurchase obligations with a term of not more than 90 days for underlying securities of the types described in (d) entered into with any bank meeting the qualifications specified in (e); or (g) investments in money market funds substantially all of whose assets are comprised of securities of the types described in (a) through (f) above.

“Change of Control” means any event as a result of or following which:

(a) any person or entity or group thereof “acting jointly or in concert” within the meaning of Canadian Securities Laws, other than a Holder or group of Holders or any Affiliates thereof, whether independently or acting jointly or in concert, and other than any Person(s) acting jointly or in concert with one or more Holders or any Affiliate thereof, acquires beneficial ownership or control or direction over an aggregate of more than fifty percent (50%) of the then outstanding votes attached to the shares of the Company, other than pursuant to any exercise of rights of the Purchasers provided for in Section 8.22;

(b) any transaction or event, or series of transactions or events, resulting in the Company having control of less than one hundred percent (100%) of the voting securities of Holdings (which voting securities shall exclude any voting rights granted to non-voting securities by operation of Law);

(c) any transaction or event, or series of transactions or events, resulting in Holdings having control of (i) less than ninety percent (90%) of the voting securities of MM Opco (which voting securities shall exclude any voting rights granted to non-voting securities by operation of Law) or (ii) less than fifty percent (50%) of all of the Equity Interests of MM Opco.

(d) the sale or transfer of all or substantially all of the consolidated assets of the Company, other than transfers permitted under Section 8.3; or

(e) those shareholders of the Company or any other Person who own, control or have a proxy to vote any “super-voting” or other shares with special voting rights of the Company as of the Restatement Closing Date (together with their permitted transferees under the organizational documents of the Company) cease to hold some or all of such shares, other than (i) the expiration by its terms of the proxy granted by Andrew Modlin to Ben Rose in respect of the outstanding Class A Super Voting Shares of the Company, a copy of which has been provided to the Collateral Agent prior to the Restatement Closing Date (the “Modlin Proxy”), (ii) any cancellation or redemption of the Class A Super Voting Shares permitted pursuant to the terms of the Purchase Agreement dated January 30, 2020 between Andrew Modlin and the Company, a copy of which has been provided to the Collateral Agent prior to the Restatement Closing Date (the “Modlin Agreement”), and (iii) any other transfer, surrender or other disposition of the Class A Super Voting Shares which has been approved by the Collateral Agent. The parties agree that any modification to the terms or the effect of the Modlin Proxy or the Modlin Agreement (whether by amendment or modification or by separate agreement) that is not consented to by the Collateral Agent shall be a Change of Control.

“Closing” means the completion of the transactions contemplated by this Agreement in accordance with Section 2.2(a).

“Closing Date” means April 23, 2019.

“Closing Base Price” means USD$2.86.

“Code” means the Internal Revenue Code of 1986, as amended.

“Collateral Agent” means Gotham Green Admin 1, LLC, a Delaware limited liability company, in its capacity as collateral agent for the Purchasers.

“Collateral Assignment of Material Agreements” means that certain Amended and Restated Collateral Assignment of Material Agreements dated as of the Second Restatement Closing Date, among the Credit Parties and the Collateral Agent, as amended, restated, supplemented or otherwise modified from time to time.

“Commission” means the Securities and Exchange Commission.

“Company Public Disclosure Record” means all documents and information filed by the Company on SEDAR under Canadian Securities Laws since May 28, 2018.

“Company Security Agreements” means (a) that certain Guaranty and Pledge Agreement dated as of the Second Restatement Closing Date, made by the Company in favor of the Collateral Agent, and (b) that certain Amended and Restated General Security Agreement dated as of the Second Restatement Closing Date, made by the Company in favor of the Collateral Agent (the “Canadian Security Agreement”), in each case as amended, restated, supplemented or otherwise modified from time to time.

“Contingent Obligation” means, as to any Person, any direct or indirect liability, contingent or otherwise, of such Person: (a) with respect to any indebtedness, lease, dividend or other obligation of another Person if the primary purpose or intent of the Person incurring such liability, or the primary effect thereof, is to provide assurance to the obligee of such liability that such liability will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such liability will be protected (in whole or in part) against loss with respect thereto; (b) with respect to any letter of credit issued for the account of such Person or as to which such Person is otherwise liable for reimbursement of drawings; (c) under any Rate Contracts; (d) to make take-or-pay or similar payments if required regardless of nonperformance by any other party or parties to an agreement; or (e) for the obligations of another through any agreement to purchase, repurchase or otherwise acquire such obligation or any Property constituting security therefor, to provide funds for the payment or discharge of such obligation or to maintain the solvency, financial condition or any balance sheet item or level of income of another Person. The amount of any Contingent Obligation shall be equal to the amount of the obligation so guaranteed or otherwise supported or, if not a fixed and determined amount, the maximum amount so guaranteed or supported.

“Contractual Obligations” means, as to any Person, any provision of any agreement, undertaking, contract, indenture, mortgage, deed of trust or other instrument, document or agreement to which such Person is a party or by which it or any of its Property is bound.

“Control Agreement” means a control agreement, in form and substance reasonably satisfactory to the Collateral Agent, executed and delivered by the applicable Credit Party, the Collateral Agent and the applicable securities intermediary or bank, which agreement is sufficient to give the Collateral Agent, on behalf of the Holders, “control” over each of such Credit Party’s securities accounts, deposit accounts or investment property, as the case may be;

“Controlled Group” means all members of a controlled group of corporations and all members of a controlled group of trades or businesses (whether or not incorporated) under common control and all members of an affiliated service group which, together with a Credit Party, are treated as a single employer under Section 414 of the Code or Section 4001 of ERISA.

“Conversion Price” shall have the meaning provided in the applicable Note(s).

“Credit Parties” means, collectively, the Borrowers, the Initial Credit Parties, the Subsequent Credit Parties, and each other Person that becomes a Credit Party after the Closing Date, and each is a “Credit Party”.

“CRO” means a chief restructuring officer engaged under an engagement letter reasonably acceptable to the Gotham Purchasers (such acceptance not to be unreasonably withheld) who (a) reports directly to the board of directors of the Company, (b) may be removed as provided for in this Agreement, (c) is tasked with forming the Turnaround Plan, and (d) may take all necessary actions in accordance with the Turnaround Plan subject to the oversight of the board of directors of the Company.

“CSE” means the Canadian Securities Exchange.

“Debtor Relief Laws” means the Bankruptcy Reform Act of 1996 as amended or any Canadian counterpart, Bankruptcy and Insolvency Act (Canada), the Companies’ Creditors Arrangement Act (Canada), the Bankruptcy Code and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States, any state or other applicable jurisdictions from time to time in effect, other than Excluded Laws.

“Default” means any event that, if it continues uncured, will, with the lapse of time or the giving of notice, or both, constitute an Event of Default.

“Disclosure Letter” means that certain Disclosure Letter dated as of the Second Restatement Closing Date, pursuant to which the Company delivered the disclosure schedules required hereby.

“Disposition” means (a) the sale, lease, conveyance or other disposition of Property (excluding sales, leases or other dispositions expressly permitted under clauses (a), (e) and (f) of Section 8.3), and (b) the statutory division, sale or transfer by any Credit Party or any Subsidiary of any securities issued by any Subsidiary and held by such transferor Person.

“Dollars”, “dollars” and “$” each mean lawful money of the United States of America.

“Employee Benefit Plan” means an “employee benefit plan” within the meaning of Section 3(3) of ERISA which any Credit Party or any Subsidiary, or any professional employer organization acting as co-employer with respect to such Credit Party or Subsidiary, establishes for the benefit of its employees or for which any Credit Party or any Subsidiary has liability to make a contribution, including by reason of being an ERISA Affiliate, other than a Multiemployer Plan.

“Environment” means indoor air, ambient air, surface water, groundwater, drinking water, land surface, subsurface strata and natural resources such as wetlands, flora and fauna.

“Environmental Claims” means all written claims by any Governmental Authority or other Person alleging potential liability or responsibility for violation of any Environmental Law, or for release or injury to the environment or threat to public health, personal injury (including sickness, disease or death), property damage, natural resources damage, or otherwise alleging liability or responsibility for damages (punitive or otherwise), cleanup, removal, remedial or response costs, restitution, civil or criminal penalties, injunctive relief, or other type of relief, resulting from or based upon the presence, placement, discharge, emission or release (including intentional and unintentional, negligent and non-negligent, sudden or non-sudden, accidental or non-accidental, placement, spills, leaks, discharges, emissions or releases) of any Hazardous Material at, in, or from Property, whether or not owned by any Credit Party or any Subsidiary.

“Environmental Laws” means all applicable federal, provincial, state or local laws, statutes, common law duties, rules, regulations, ordinances and codes, together with all administrative orders, licenses, authorizations and permits of, and agreements with, any Governmental Authorities, in each case relating to environmental matters, including pollution, protection of the Environment and natural resources, and the control, shipment, storage or disposal of Hazardous Materials, pollutants, environmental contaminants or other toxic or hazardous substances; including the Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Clean Air Act, the Federal Water Pollution Control Act of 1972, the Solid Waste Disposal Act, the Federal Resource Conservation and Recovery Act, the Toxic Substances Control Act, and/or the Emergency Planning and Community Right-to-Know Act.

“Equity Interests” means the membership interests, partnership interests, capital stock of any class or type or any other equity interests of any type or class of any Person and options, warrants and other rights to acquire, or exercisable or convertible into, membership interests, partnership interests, capital stock or other equity interests of any type or class or any other equity interest of such Person.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“ERISA Affiliates” means, collectively, all Credit Parties and all Subsidiaries, and each other Person, trade or business (whether or not incorporated) under common control or treated as a single employer with any Credit Party or any Subsidiary within the meaning of Section 414(b), 414(c) or 414(m) of the Code.

“ERISA Event” means (a) a Reportable Event with respect to a Title IV Plan or a Multiemployer Plan; (b) a withdrawal by any Credit Party, any Subsidiary or any ERISA Affiliate from a Title IV Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA); (c) a complete or partial withdrawal (as defined in Sections 4203 and 4205 of ERISA) by any Credit Party, any Subsidiary or any ERISA Affiliate from a Multiemployer Plan which results in the imposition of withdrawal liability; (d) the receipt by any Credit Party, any Subsidiary or any ERISA Affiliate of notice of intent to terminate with the PBGC or the treatment of a plan amendment as a termination under Section 4041 or 4041A of ERISA of a Title IV Plan; (e) the commencement of proceedings by the PBGC to terminate a Title IV Plan or Multiemployer Plan; (f) a failure by any Credit Party, any Subsidiary or any ERISA Affiliate to make required contributions to a Title IV Plan or any Multiemployer Plan unless such failure is not reasonably expected to result in any material liability to any Credit Party or any Subsidiary; (g) an event or condition which would reasonably be expected to constitute grounds under Section 4041A or 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Title IV Plan or any Multiemployer Plan; (h) the imposition of any liability under Title IV of ERISA, other than PBGC premiums due but not delinquent under Section 4007 of ERISA, upon any Credit Party, any Subsidiary or any ERISA Affiliate; (i) a non-exempt prohibited transaction occurs with respect to any Employee Benefit Plan which would reasonably be expected to result in a material liability to any Credit Party or any Subsidiary; (j) a violation of the applicable requirements of Section 404 or 405 of ERISA or the exclusive benefit rule under Section 401(a)(2) of the Code by any fiduciary or disqualified Person with respect to any Employee Benefit Plan for which any Credit Party, any Subsidiary or any ERISA Affiliate may be directly or indirectly liable which would reasonably be expected to result in a material liability to any Credit Party or any Subsidiary; or (k) as of the last day of any plan year, the Unfunded Benefit Liabilities of any Title IV Plan exceed $275,000.

“Evanston Sale Documents” means that certain Membership Interest Purchase Agreement dated as of July 1, 2020, entered into by and between Verano Evanston, LLC and MM OpCo together with any exhibits and attachments thereto, as the same may be amended from time to time.

“Excluded JV Subsidiary��� means (a) each joint venture which is a Subsidiary of a Credit Party and is described as an “Excluded JV Subsidiary” on Schedule 1.1(c), so long as such joint venture did not, as of the last day of the most recently ended Fiscal Quarter, (i) have assets with a value in excess of ten percent (10%) of the assets of the Company and its Subsidiaries on a consolidated basis or (ii) generate revenues representing in excess of ten percent (10%) of the gross revenue of the Company and its Subsidiaries on a consolidated basis (the “JV Materiality Requirement”), (b) each other joint venture which is or becomes a Subsidiary of a Credit Party, so long as such joint venture complies with the JV Materiality Requirement, and (c) each Subsidiary of a joint venture described in clauses (a) and (b) of this definition.

“Excluded Subsidiary” means each Excluded JV Subsidiary, Hankey Subsidiary, Installment Sale Subsidiary and Immaterial Subsidiary; provided that, (i) an Excluded JV Subsidiary will cease to be an Excluded Subsidiary at such time as such Subsidiary ceases to be an Excluded JV Subsidiary; (ii) a Hankey Subsidiary will cease to be an Excluded Subsidiary upon the earlier to occur of (a) the Equity Interests of such Hankey Subsidiary that were pledged as collateral under the Hankey Loan Documents as of the Closing Date are no longer pledged as collateral under the Hankey Loan Documents or the loan documents of any successor lender as a result of a refinancing of the Hankey Loan, or (b) at such time as the Indebtedness incurred by such Hankey Subsidiary under the Hankey Loan Documents, and any refinancing, renewal, replacement or extension of such Indebtedness, shall have been paid in full; (iii) an Installment Sale Subsidiary will cease to be an Excluded Subsidiary at such time as the Indebtedness, existing as of the Closing Date or otherwise incurred by an Installment Sale Subsidiary after the Closing Date in compliance with Section 8.2(n), and any refinancing, renewal, replacement or extension of such Indebtedness, shall have been paid in full; and (iv) an Immaterial Subsidiary will cease to be an Excluded Subsidiary at such time as such Subsidiary ceases to be an Immaterial Subsidiary.

“Excluded Taxes” means any of the following Taxes imposed on or with respect to a Holder or required to be withheld or deducted from a payment to a Holder: (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case imposed as a result of such Holder being organized under the laws of, or having its principal office or, in the case of any Holder, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof); (b) Other Connection Taxes;(c) U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Holder with respect to an applicable interest in an Advance pursuant to a law in effect on the date on which (i) such Holder acquires such interest in the Advance, or if the Holder is an intermediary partnership or other flow-through entity for U.S. tax purposes, the date on which the relevant beneficiary, partner or member of the Holder becomes a beneficiary, partner or member thereof, if later or (ii) such Holder changes its lending office, except in each case to the extent that, pursuant to Section 11.12, amounts with respect to such Taxes were payable either to such Holder’s assignor immediately before such purchaser became a party hereto or to such Holder immediately before it changed its lending office; (d) Taxes attributable to such Holder’s failure to comply with Section 11.12(f); (e) any Taxes imposed under FATCA; (f) any Canadian withholding Taxes imposed on a payment by or on account of any obligation of the Company by reason of (i) the Holder not dealing at arm’s length (for purposes of the Income Tax Act (Canada)) with the Company at the time of making such payment, or (ii) the payment being in respect of a debt or other obligation to pay an amount to a person with whom the payer is not dealing at arm’s length (for purposes of the Income Tax Act (Canada)) at the time of such payment; and (g) any Taxes imposed on a Holder by reason of such Holder (i) being a “specified shareholder” (as defined in subsection 18(5) of the Income Tax Act (Canada)) of the Company, or (ii) not dealing at arm’s length (for purposes of the Income Tax Act (Canada)) with a “specified shareholder” (as defined in subsection 18(5) of the Income Tax Act (Canada)) of the Company.

“Exercise Price” shall have the meaning provided the applicable Warrant(s).

“Existing Notes” means, collectively, the Tranche 1 Notes, Tranche 2 Notes, Tranche 3 Notes and Amendment Fee Notes.

“Existing Purchasers” means, collectively, the Purchasers who purchased Existing Notes and Existing Warrants.

“Existing Warrants” means, collectively, the Tranche 1 Warrants, Tranche 2 Warrants and Tranche 3 Warrants.

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

“Federal Reserve Board” means the Board of Governors of the Federal Reserve System, or any entity succeeding to any of its principal functions.

“Fee Letter” means that certain Amended and Restated Fee Letter dated as of the Restatement Closing Date, among the Company, Holdings and the Purchasers.

“First Amendment” means that certain First Amendment to Securities Purchase Agreement, Tranche 1 Notes and Tranche 2 Notes, dated as of August 12, 2019, by and among the Borrowers, the other Credit Parties party thereto, the Existing Purchasers party thereto and the Collateral Agent.

“First Amendment Effective Date” means August 12, 2019.

“Fiscal Quarter” means each of fiscal quarters of a Fiscal Year, each consisting of a 13 week period.

“Fiscal Year” means the fiscal year of each Credit Party ending on or about June 30 of each year.

“Foreign Holder” means a Holder that is not a U.S. Person.

“Free Cash Flow” means cash proceeds from the sale of product from continuing operations in the ordinary course minus all cash expenses in the ordinary course or as approximated from Credit Parties statement of cash flows via the indirect method of net cash used in operating activities minus purchases of property and equipment.

“Fully Accreted Existing Notes Principal” shall have the meaning provided in the applicable Amended and Restated Note(s).

“Fully Accreted Principal Amount” means, with respect to any Note(s), the initial principal amount thereof plus all interest paid in kind under such Note(s) as of the applicable Funding Date or other date of determination. As of the Restatement Closing Date, the Fully Accreted Principal Amount of the Existing Notes is $163,997,255.

“Funded Amount” means, with respect to any Note, the amount funded by the Holder of such Note in connection with the Advance made to purchase such Note (for purposes of clarity, including in such amount any original issue discount or closing fee earned by such Purchaser in respect of such Note). As of the Restatement Closing Date, the Funded Amount of the Existing Notes is $135,000,000.

“Funding Date” means, as applicable, the Tranche 1-B Funding Date, Tranche 2 Funding Date, the Tranche 3 Funding Date, the Tranche 4 Funding Date and each Incremental Funding Date.

“GAAP” means generally accepted accounting principles set forth from time to time in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority within the accounting profession), which are applicable to the circumstances as of the date of determination, and consistently applied.

“Gotham Purchasers” means, collectively, Gotham Green Fund 1, L.P., Gotham Green Fund 1 (Q), L.P., Gotham Green Fund II, L.P., Gotham Green Fund II (Q), L.P., Gotham Green Partners SPV IV, L.P., Gotham Green Partners SPV VI, L.P. and each Related Fund of such Purchasers, in each case which becomes a Purchaser under this Agreement.

“Governmental Authority” means any nation or government, any state, province or other political subdivision thereof, any central bank (or similar monetary or regulatory authority) thereof, any entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of or pertaining to government, and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing.

“Guaranties” means, collectively, each guaranty of any of the Obligations now or hereafter executed and delivered by any Person to the Holders, and “Guaranty” means any of the Guaranties, including, without limitation, the Guaranty and Security Agreement dated as of the Closing Date and the Guaranty and Pledge Agreement dated as of the Closing Date, among the Credit Parties and the Purchasers.

“Guarantors” means, collectively, each party to a Guaranty (other than the Purchasers and the Collateral Agent) and each other guarantor of all or any portion of the Obligations, which shall at all times include each Subsidiary of a Borrower (other than any Excluded Subsidiary). Schedule 1.1(c) sets forth the Guarantors as of the Restatement Closing Date.

“Hankey Amendment Documents” means definitive documents reasonably acceptable to Collateral Agent effecting the amendments to the Hankey Loan Documents contemplated in the term sheet attached to Schedule 1.1(h).

“Hankey Loan Documents” means that certain Senior Secured Commercial Loan Agreement dated as of October 1, 2018, as amended by that certain First Modification to Senior Secured Commercial Loan Agreement dated April 8, 2019 and further amended by that certain Second Modification to Senior Secured Commercial Loan Agreement dated January 13, 2020, each by and between Hankey Capital, LLC and Holdings, and all other agreements, instruments and documents entered into in connection therewith, as amended by the Hankey Amendment Documents, as the same may be amended or modified or terms waived from time to time; provided, that any modification thereof or waiver requested or granted thereunder shall require the prior written consent of the Majority Holders.

“Hankey Subsidiaries” means Project Compassion NY, LLC, Project Compassion Capital NY, LLC, MMOF SD, LLC, MMOF Venice, LLC, MMOF Downtown Collective, LLC, MMOF BH, LLC, MMOF RE SD, LLC, MMOF Vegas 2, LLC, MedMen NY, Inc., MMOF San Diego Retail, Inc., The Compassion Network, Advanced Patients’ Collective, Cyon Corporation, Inc. and MMOF Vegas Retail 2, Inc., and their respective Subsidiaries, and each is a “Hankey Subsidiary”.

“Hazardous Materials” means all those substances which are regulated by, or which may form the basis of liability under, any Environmental Law.

“Holder” means, at any time of determination, a holder of a Note, and “Holders” means all such holders of a Note. For the sake of clarity, the Purchasers shall be the initial Holders of the Notes.

“Holding Companies” means, collectively, the Company and Holdings, and each is a “Holding Company”.

“IFRS” means the international financial reporting standards adopted by the International Accounting Standards Board.

“Immaterial Subsidiary” means any Subsidiary of the Company that (a) did not, as of the last day of the most recently ended Fiscal Quarter, have (i) assets with a value in excess of two percent (2%) of the assets of the Company and its Subsidiaries on a consolidated basis or (ii) revenues representing in excess of two percent (2%) of the gross revenue of the Company and its Subsidiaries on a consolidated basis, (b) taken together with all Persons deemed to be Immaterial Subsidiaries in the foregoing clause (a) as of the last day of the Fiscal Quarter of the Company most recently ended, did not have (i) assets with a value in excess of five percent (5%) of the assets of the Company and its Subsidiaries on a consolidated basis or (ii) revenues representing in excess of five percent (5%) of the gross revenue of the Company and its Subsidiaries on a consolidated basis, (c) is not a Cannabis License Holder, and (d) is not an IP Subsidiary. The Immaterial Subsidiaries in existence on the Closing Date are set forth on Schedule 1.1(c), and such schedule shall be updated on each applicable Funding Date.

“Income Tax Act” means the Income Tax Act (Canada), as amended from time to time.

“Incremental Advance” means the aggregate amount funded by the Purchasers to the Borrowers on an Incremental Funding Date.

“Incremental Funding Date” means the date on which an Incremental Advance is made in accordance with Section 4.5.

“Incremental Notes” means the first priority senior secured convertible notes issued on an Incremental Funding Date by the Borrowers to the Incremental Purchasers in the aggregate principal amount of the applicable Incremental Advance plus the Restatement Fee payable on the applicable Incremental Funding Date, in substantially the form attached hereto as Exhibit A-3, with a Conversion Price equal to (a) with respect to the first Incremental Advance, $0.26, and (b) with respect to each subsequent Incremental Advance, the Restatement Conversion Price (provided, that any share price set out in this Agreement shall be subject to adjustment from time to time in the same manner as is set out in Section 4.5 of the Notes with respect to the Conversion Price), as amended, modified, supplemented or restated from time to time, together with all notes issued in substitution or exchange therefor.

“Incremental Replacement Warrants” means warrants to purchase Shares, issued by the Company on an Incremental Funding Date to the Existing Purchasers, representing in the aggregate fifty percent (50%) coverage with respect to the fraction of the Funded Amount of the Existing Notes as of the Restatement Closing Date equal to the relevant Incremental Advance divided by $100,000,000, with an exercise price per Share equal to (a) with respect to the first Incremental Advance, $0.26, and (b) with respect to each other Incremental Advance, the Restatement Conversion Price for such Incremental Advance, in substantially the form attached hereto as Exhibit B-3, as amended, modified, supplemented or restated from time to time, together with all warrants issued in substitution or exchange therefor. The Incremental Replacement Warrants may not be exercised prior to the 18-month anniversary of the Incremental Funding Date on which such Incremental Replacement Warrants were issued, and shall be subject to cancellation under the terms thereof in connection with the Retail Cash Flow Milestone. For clarity, for an Incremental Advance of $10,000,000, the coverage with respect to the Incremental Replacement Warrants issued on the relevant Incremental Funding Date would be calculated as follows: (i) first, $10,000,000 divided by $100,000,000 = 10%; (ii) second, 10% of the Funded Amount of the Existing Notes as of the Restatement Closing Date (i.e., $135,000,000) = $13,500,000; and finally, (iii) 50% of $13,500,000 provides warrant coverage of $6,750,000. The Incremental Replacement Warrants would therefore represent warrants to purchase such aggregate number of Shares as is equal to $6,750,000 divided by the Restatement Conversion Price for the applicable Incremental Advance (or for the first Incremental Advance, divided by $0.26). The calculation of warrant coverage with respect to Incremental Replacement Warrants and cancellation of Existing Warrants under Section 2.2(f)(iv)(A) shall be set forth on Schedule 1.1(d), which shall be updated by the Gotham Purchasers, the Company and Borrowers in connection with each Incremental Advance.

“Incremental Warrants” means warrants to purchase Shares, issued by the Company on an Incremental Funding Date to the Incremental Purchasers participating in such Incremental Advance representing in the aggregate one hundred percent (100%) coverage with respect to the Incremental Advance funded on such Incremental Funding Date and with an exercise price equal to (a) with respect to the first Incremental Advance, $0.26, and (b) with respect to each other Incremental Advance, the Restatement Conversion Price for such Incremental Advance, in substantially the form attached hereto as Exhibit B-2, as amended, modified, supplemented or restated from time to time, together with all warrants issued in substitution or exchange therefor.

“Indebtedness” of any Person means, without duplication, all of the following as to such Person: (a) all indebtedness for borrowed money; (b) all obligations issued, undertaken or assumed as the deferred purchase price of Property or services (other than trade payables incurred in the Ordinary Course of Business or accrued expenses paid or payable on customary terms in the Ordinary Course of Business which payables or expenses are not past due for more than (x) one hundred twenty (120) days if such 120-day period would end on or prior to the first anniversary of the Second Restatement Closing Date, and (y) ninety (90) days if such 90-day period would end after the first anniversary of the Second Restatement Closing Date); (c) all reimbursement or payment obligations (whether or not contingent) with respect to letters of credit, surety bonds and other similar instruments; (d) all obligations evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition of Property, assets or businesses; (e) all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred as financing, in either case with respect to Property acquired by such Person (even though the rights and remedies of the seller or the Person providing financing under such agreement in the event of default are limited to repossession or sale of such Property); (f) all Capital Lease Obligations; (g) all Equity Interests of such Person subject to repurchase or redemption (other than at the sole option of such Person and other than redemptions or exchanges of common shares of Holdings and units of MM Opco which are redeemable or exchangeable in accordance with the Organization Documents of Holdings or MM Opco, as applicable, for Equity Interests); (h) all “earnouts” and similar payment obligations under merger, acquisition, purchase or similar or related agreements; (i) all obligations under Rate Contracts; (j) all Indebtedness and obligations referred to in clauses (a) through (i) above secured by (or for which the holder of such Indebtedness or obligations has an existing right, contingent or otherwise, to be secured by) any Lien upon or in Property (including accounts and contracts rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness or obligations; and (k) all Contingent Obligations described in clause (a) of the definition of “Contingent Obligations” in respect of indebtedness or obligations of another Person and that is described in clauses (a) through (j) above.

“Initial Credit Parties” means collectively, the Persons set forth on Schedule 1.1(c) as of the Closing Date, and “Initial Credit Party” means any such Person.

“Installment Sale Subsidiaries” means Viktoriya’s Medical Supplies, CSI Solutions, LLC, Kannaboost Technology Inc., MME AG Management, LLC, MME Retail Management, LLC, PHSL, LLC and their respective Subsidiaries,and each is an “Installment Sale Subsidiary”.

“Intercompany Note” means that certain Amended and Restated Intercompany Global Note dated as of the Second Restatement Closing Date, by and among the Credit Parties, as amended, restated, replaced, supplemented or otherwise modified from time to time.

“Interest Escrow Agreement” means the letter agreement among the Borrowers and the Purchasers, dated as of the Second Restatement Closing Date, regarding the escrow of certain interest payments, as amended, restated, replaced, supplemented or otherwise modified from time to time.

“Interim Budget” means the interim budget of the Company agreed upon between the Collateral Agent and the Company that was in effect prior to the implementation of the Turnaround Plan.

“IP Subsidiaries” means collectively, the Persons listed on Schedule 1.1(c) and described as “IP Subsidiaries”, and “IP Subsidiary” means any such Person.

“knowledge” or “aware” means the (a) actual knowledge or awareness of any of the officers, directors or managers of any Credit Party or any Subsidiary, including their successors in their respective capacities and (b) the knowledge or awareness which a prudent business person would have obtained in the conduct of his or her business after making reasonable inquiry and reasonable diligence with respect to the particular matter in question.

“Laws” means all laws, statutes, codes, ordinances, decrees, rules, regulations, treaty, municipal by-laws, judicial or arbitral or administrative or ministerial or departmental or regulatory judgments, orders, decisions, rulings or awards, policies, voluntary restraints, guidelines or other legal requirement of any Governmental Authority, or any provisions of the foregoing, including general principles of common and civil law and equity, in each case applicable to or binding upon such Person or any of its Property or to which such Person or any of its Property is subject, whether applicable in Canada or the United States or any other jurisdiction; and “Law” means any one of them. Notwithstanding the foregoing, the definition of Laws excludes any U.S. federal laws, statutes, codes, ordinances, decrees, rules, regulations which apply to the production, trafficking, distribution, processing, extraction, and/or sale of marijuana (cannabis) and related substances (collectively, the “Excluded Laws”); provided, however, that Excluded Laws shall not include any provision of the Code, including, without limitation, Section 280E of the Code.

“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment, charge or deposit arrangement, encumbrance, lien (statutory or other) or preference, priority or other security interest or preferential arrangement of any kind or nature whatsoever (including, but not limited to, those created by, arising under or evidenced by any conditional sale or other title retention agreement, the interest of a lessor under a Capital Lease, any financing lease having substantially the same economic effect as any of the foregoing, or the filing of any financing statement naming the owner of the asset to which such lien relates as debtor, under the UCC or any comparable law), and any contingent or other agreement to provide any of the foregoing, but not including the interest of a lessor under an operating lease which is not a Capital Lease.

“Majority Holders” means Holders holding more than fifty percent (50%) of the aggregate unpaid principal amount outstanding under the Notes.

“Margin Stock” means “margin stock” as such term is defined in Regulation T, U or X of the Federal Reserve Board.

“Market Capitalization” means, as of any date, the amount equal to the price per Share multiplied by the number of issued and outstanding Shares of the Company, determined on an as- converted and as-exercised basis with respect to securities issued by a Credit Party which are convertible into or redeemable for Shares, and warrants and stock options exercisable for Shares, in each case which are in the money as of the date of determination.

“Material Adverse Effect” means a material adverse effect on (a) the operations, business, assets, properties or financial condition of the Credit Parties taken as a whole, (b) the ability of any Credit Party to perform its material obligations under the Operative Documents, (c) the legality, validity or enforceability of any of the Operative Documents, (d) the rights and remedies of the Purchasers under any of the Operative Documents or (e) the validity, perfection or priority of any security interest or other Lien in favor of the Collateral Agent for the benefit of the Purchasers, or of the Purchasers directly if the Collateral Agent ceases to hold such Liens on their behalf, under the Operative Documents on any portion of the assets of a Credit Party with a fair market value in excess of five million dollars ($5,000,000); provided, however, in determining whether there has been a “Material Adverse Effect”, any adverse effect attributable to the following shall be disregarded: (i) events, changes, developments, conditions or circumstances in worldwide, national or local conditions or circumstances (political, economic, regulatory or otherwise) that adversely affect cannabis consumable products industries generally, (ii) an outbreak or escalation of war, armed hostilities, acts of terrorism, political instability or other national calamity, crisis or emergency, or any governmental response to any of the foregoing, in each case, whether occurring within or outside of Canada or the United States, (iii) any change in accounting policies (and any changes in enforcement or interpretation thereof resulting therefrom) which do not impede the Credit Parties’ ability to perform their material obligations under the Operative Documents, (iv) any action or omission of any Credit Party taken with the prior written consent of the Majority Holders, where such consent is specifically required pursuant to this Agreement, (v) any failure, in and of itself, of the Company and its Subsidiaries to meet any published or internally prepared projections, budgets, plans or forecasts of revenues, earnings or other financial performance measures or operating statistics, in each case with respect to this clause (v) other than failure to comply with the Interim Budget or Turnaround Plan as required under the Operative Documents, or (vi) a breach by Purchasers of their obligation to make an Advance hereunder (it being understood that the Purchasers’ election not to fund an Advance shall not be a breach by the Purchasers if such election was based on or due to any failure by a Credit Party to satisfy conditions set forth in Section 4.2 or Section 4.3).

“Material Agreement” means any Contractual Obligation (a) between, among, made or accepted by, as applicable, any Credit Party on the one hand, and a Cannabis License Holder on the other hand and has generated and/or is reasonably expected to generate revenue to the Company on a consolidated basis in excess of $250,000 in the Fiscal Year at the time of determination, or (b) which has generated and/or is reasonably expected to generate revenue to the Company on a consolidated basis in excess of $1,000,000 in the Fiscal Year at the time of determination. Schedule 1.1(e) sets forth all Material Agreements in existence as of the Closing Date.

“Material Indebtedness” means (a) Indebtedness of the Credit Parties, whether individually or in the aggregate, and whether owed to one or more obligees, in an aggregate principal amount exceeding $1,000,000; and (b) obligations under the Treehouse REIT Documents.

“Material Real Property” means (a) any Owned Real Property and improvements thereon which (i) Treehouse REIT elects not to purchase pursuant to the Treehouse REIT Documents, (ii) which a Credit Party has owned for a period of at least six (6) months from the later of the Closing Date or the acquisition of such Owned Real Property by a Credit Party and such Credit Party has not actively listed such Owned Real Property for sale, and (iii) which has a fair market value in excess of $8,000,000, and (b) any real property leased by any Credit Party or any Subsidiary (other than an Excluded Subsidiary) (i) on which any Credit Party or any Subsidiary (other than an Excluded Subsidiary) develops improvements thereon with a fair market value in excess of $8,000,000, or (ii) which is necessary for any Credit Party’s ability to comply with applicable Laws in any material respect.

“Maturity Date” means the earlier of (a) the later of (i) the Initial Maturity Date (as defined in the Notes), and (ii) the Extended Maturity Date (as defined in the Notes), if and as (x) extended by the Borrowers in accordance with the Notes or (y) extended by the Purchasers in accordance with Section 2.2(f)(iii), and (b) such earlier date as accelerated under the Notes or any other Operative Agreement.

“Minimum Liquidity Amount” means, for the period beginning October 1, 2020 and ending March 31, 2021, $5,000,000; for the period beginning April 1, 2021 and ending December 31, 2021, $7,500,000; and at all times thereafter, $15,000,000.

“MM Opco” means MM Enterprises USA, LLC, a Delaware limited liability company.

“Mortgaged Property” means, collectively, the Material Real Properties owned by any Credit Party or any Subsidiary, in each case set forth on Schedule 1.1(f) and as encumbered by a Mortgage pursuant to any Operative Document, and each additional Material Real Property encumbered by a Mortgage pursuant to Section 4.1(c) and Section 7.12.

“Mortgages” means, collectively, the deeds of trust, trust deeds, deeds to secure debt, hypothecs and mortgages made by any Credit Party in favor or for the benefit of the Holders creating and evidencing a Lien on a Mortgaged Property in form and substance reasonably satisfactory to the Majority Holders with such terms and provisions as may be required by the applicable Laws of the relevant jurisdiction, and any other mortgages executed and delivered pursuant to Section 4.1(c) or Section 7.12, in each case, as the same may from time to time be amended, restated, supplemented, or otherwise modified.

“Multiemployer Plan” means a “multiemployer plan” (within the meaning of Section 4001(a)(3) of ERISA) as to which any ERISA Affiliate is making, or is obligated to make contributions or, during the preceding three calendar years, has made, or been obligated to make, contributions.

“NI 45-106” means National Instrument 45-106 – Prospectus Exemptions as such instrument is in effect in the Province of Ontario at Closing.

“NI 51-102” means National Instrument 51-102 – Continuous Disclosure Obligations as such instrument is in effect in the Province of Ontario at Closing.

“Note Holder Ownership Percentage” means, as of any date, (A) the total number of Shares beneficially owned by the Holders divided by (B) the total number of Shares outstanding, in each case (A) and (B) assuming the following have occurred as of such date:

(i) all Notes outstanding on such date have been converted into Shares as of such date (after taking into account any amendment that would occur assuming the issuance of the securities contemplated in clause (iii));

(ii) all Warrants outstanding on such date have been exercised for Shares as of such date (after taking into account any cancellation that would occur assuming the issuance of the securities contemplated in clause (iii));

(iii) any Committed Amount that has not yet been funded as of such date has been funded and closed as of such date, and the resulting Incremental Notes, Incremental Warrants and Incremental Replacement Warrants have been converted/exercised for Shares as of such date;

(iv) any Dilutive Issuance (without duplication of the Dilutive Interests that may be issuable pursuant to the exercise of the Pre-Emptive Right Offer under consideration) or Down-Round Price Reset reasonably anticipated as of such date has occurred as of such date;

(v) all other convertible notes, options, warrants, restricted share units and other convertible, exchangeable or exercisable securities issued by the Company have been converted or exercised into Shares as of such date; and

(vi) the redemption in full (in exchange for Shares) of all redeemable securities of Holdings and MM Opco has occurred as of such date, but otherwise assuming that all other convertible, exercisable or exchangeable securities of Holdings and MM Opco remain outstanding,

in each case (i) through (vi) without regard to (x) any Class A Super Voting Shares or preferred shares outstanding at such date, (y) any restrictions on the conversion, exercise, exchange or redemption contained in the terms of such securities, nor (z) whether such securities are “in-the- money”.

“Notes” means, collectively, the Amended and Restated Notes, Incremental Notes, 2020 Amendment Fee Notes and, to the extent relating to a date prior to the Restatement Closing Date, the Tranche 1 Notes, Tranche 2 Notes, Tranche 3 Notes and Amendment Fee Notes, and each is a “Note”.

“Obligations” means all loans, advances, indebtedness, obligations and liabilities of the Company and each other Credit Party to the Holders under the Notes or any of the other Operative Documents, together with all other indebtedness, obligations and liabilities whatsoever of the Company and each other Credit Party to the Holders arising under or in connection with this Agreement or any other Operative Documents, in each case whether matured or unmatured, liquidated or unliquidated, direct or indirect, absolute or contingent, joint or several, due or to become due, now existing or hereafter arising; provided, however, that for purposes of calculating the Obligations outstanding under this Agreement or any of the Operative Documents, the direct and absolute and contingent obligations of Company and each other Credit Party shall be determined without duplication.

“Observer Agreement” means the amended and restated agreement among the Purchasers, the Company and the Observer entered into on the Second Restatement Closing Date.

“Operative Documents” means this Agreement, the Notes, the Warrants, the Fee Letter, the Observer Agreement, the Security Agreement, the Company Security Agreements, the Collateral Assignment of Material Agreements, the Intercompany Note, the Perfection Certificate, the Interest Escrow Agreement, the Trademark Security Agreement, the Patent Security Agreement, each Mortgage, each Control Agreement, each Subordination Agreement, the Reaffirmation Agreement, and each other document, instrument or agreement executed in connection herewith.

“Ordinary Course of Business” means, in respect of any transaction involving any Credit Party or any Subsidiary, the ordinary course of such Person’s business, as conducted by any such Person consistent with past practice and undertaken by such Person in good faith and not for purposes of evading any covenant or restriction in any Operative Document.

“Organization Documents” means (a) for any corporation, the certificate or articles of incorporation, the bylaws, any certificate of designations or instrument relating to the rights of shareholders of such corporation and any shareholder rights agreement, (b) for any partnership, the partnership agreement and, if applicable, certificate of limited partnership, (c) for any limited liability company, the operating agreement, limited liability company agreement or other similar agreement and articles or certificate of formation, or (d) for any Person (including any corporation, partnership or limited liability company), any agreement, instrument or document comparable to the foregoing.

“Other Connection Taxes” means, with respect to a Holder, Taxes imposed as a result of a present or former connection between such Holder and the jurisdiction imposing such Taxes (other than a connection arising solely from such Holder having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, or engaged in any other transaction pursuant to or enforced, the Agreement).

“Owned Real Property” means each parcel of real property that is owned in fee by the Company or any Credit Party.

“Patent Security Agreement” means that certain Patent Security Agreement dated as of the Second Restatement Closing Date, made by the Credit Parties party thereto and each other Credit Party which joins and becomes bound by such agreement as “Grantors”, in favor of Collateral Agent and as amended, restated, supplemented or otherwise modified from time to time.

“PBGC” means the Pension Benefit Guaranty Corporation or any entity succeeding to any of its principal functions under ERISA.

“Pension Plan” means a “pension plan”, as such term is defined in Section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a Multiemployer Pension Plan) and as to which any Credit Party has or may have any liability, including any liability by reason of having been a substantial employer within the meaning of Section 4063 of ERISA at any time during the preceding five years, or by reason of being deemed to be a contributing sponsor under Section 4069 of ERISA, and, for the avoidance of doubt, “Pension Plan” shall not include a Canadian Pension Plan.

“Perfection Certificate” means the Perfection Certificate executed by each Credit Party and delivered to the Purchasers on the Closing Date and to the Holders on each Funding Date (in the case of any Funding Date, such Perfection Certificate shall give effect to any transactions anticipated to be completed on such Funding Date or using funds advanced on such Funding Date).

“Permit” means a license, permit, approval, consent, certificate, registration or authorization (whether governmental, regulatory or otherwise).

“Permitted Acquisitions” means any Acquisitions, in a single transaction or series of related transactions, if immediately before and after giving effect thereto: (i) no Event of Default shall have occurred or be continuing or would result from such acquisition or purchase, (ii) any acquired or newly formed Subsidiary of a Credit Party shall not be liable for any Indebtedness except for Indebtedness otherwise permitted by Section 8.2, (iii) the Credit Parties have complied with this Agreement in connection with such Investment, and (iv) the Borrowers would be in compliance with the financial covenants set forth in Section 7.19 for the most recent calculation period and as of the last day thereof, if such acquisition or purchase had been completed on the first day of such calculation period.

“Person” means an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other form of entity.

“Personal Information” means any information about a Person and includes information contained in this Agreement and the documents to be delivered by such Person in connection with the transactions contemplated herein.

“Property” means any property or interest of any type in any kind of property or asset, whether real, personal or mixed, and whether tangible or intangible.

“Purchasers” means, collectively, the parties signatory to this Agreement as “Purchasers” and each Person who becomes a Purchaser hereunder, together with their respective successors and assigns as permitted under this Agreement, and each is a “Purchaser”.

“Qualified Plan” means an employee benefit plan (within the meaning of Section 3(3) of ERISA) intended to be tax-qualified under Section 401(a) of the Code and which any Credit Party or any Subsidiary sponsors, maintains, or to which any Credit Party or any Subsidiary makes, is making or is obligated to make contributions, including as a result of being an ERISA Affiliate, but excluding any Multiemployer Plan.

“Rate Contract” means swap agreements (as such term is defined in Section 101 of the Bankruptcy Code) and any other agreements or arrangements designed to provide protection against fluctuations in interest or currency exchange rates, including any agreement or arrangement which is a rate swap, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap, equity or equity index option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction, forward transaction, currency swap transaction, cross-currency rate swap transaction, currency option or any other similar transaction (including any option with respect to any of these transactions) or any combination thereof, whether linked to one or more interest rates, foreign currencies, commodity prices, equity prices or other financial measures.

“Reaffirmation Agreement” means that certain Reaffirmation Agreement dated as of the Restatement Closing Date, made by the Credit Parties in favor of the Holders and the Collateral Agent, for the benefit of the Holders.

“Recipient” means (a) any Purchaser or (b) any Holder, as applicable.

“Related Fund” means (a) any fund, trust or similar entity that invests in commercial loans in the ordinary course of business and is advised or managed by (i) any Purchaser or any other Holder, (ii) an Affiliate of any Purchaser or any Holder, (iii) the same investment advisor that manages a Holder or (iv) an Affiliate of an investment advisor that manages a Holder or (b) any finance company, insurance company or other financial institution which temporarily warehouses loans for any Holder or any Person described in clause (a) above.

“Related Persons” means, with respect to any Person, each Affiliate of such Person and each director, officer, employee, agent, trustee, representative, attorney, accountant and each insurance, environmental, legal, financial and other advisor (including those retained in connection with the satisfaction or attempted satisfaction of any condition set forth in this Agreement) and other consultants and agents of or to such Person or any of its Affiliates.

“Reportable Event” means, as to any Employee Benefit Plan, any of the events set forth in Section 4043(c) of ERISA or the regulations thereunder, other than any such event for which the 30-day notice requirement under ERISA has been waived in regulations issued by the PBGC.

“Responsible Officer” means, as to each Credit Party, the chief executive officer, chief financial officer, vice president of finance or the president of such Credit Party, or any other officer having substantially the same authority and responsibility.

“Restatement Closing Date” means March 27, 2020.

“Restatement Conversion Price” means, calculated as of the relevant Funding Date, the greater of (i) the lower of (A) the volume-weighted average trading price of the Shares for the five (5) consecutive trading days immediately prior to the relevant Funding Date (as reported by the CSE, with the conversion from Canadian dollars to U.S. dollars being determined based on the exchange rate published by the Bank of Canada for the day immediately prior to the relevant Funding Date), and (B) $0.40 per Share, and (ii) $0.20 per Share.

“Restatement Fee” shall have the meaning provided in the Fee Letter.

“Retail Cash Flow Milestone” shall have the meaning provided in the Tranche 4 Replacement Warrants and Incremental Replacement Warrants.

“Second Amendment” means that certain Second Amendment to Securities Purchase Agreement and Notes dated as of the Second Amendment Effective Date, by and among the Borrowers, each other Credit Party signatory thereto, each Purchaser signatory thereto and the Collateral Agent.

“Second Restatement Closing Date” means July 2, 2020.

“Second Restatement Operative Documents” means the Security Agreement, the Canadian Security Agreement, the Collateral Assignment of Material Agreements, the Intercompany Note, and the Second Restatement Reaffirmation Agreement.

“Second Restatement Reaffirmation Agreement” means that certain Reaffirmation Agreement dated as of the Second Restatement Closing Date, made by the Credit Parties in favor of the Holders and the Collateral Agent, for the benefit of the Holders.

“Second Amendment Effective Date” means October 29, 2019.

“Securities Commissions” means collectively, the applicable securities commission or securities regulatory authority in each of the provinces and territories of Canada, the United States and any other jurisdiction in which the Shares are listed.

“Securities Laws ” means, collectively, the U.S. Securities Laws and Canadian Securities Laws.

“Security Agreement” means that certain Amended and Restated Guaranty and Security Agreement dated as of the Second Restatement Closing Date, made by Holdings, the other Credit Parties party thereto and each other Credit Party which joins and becomes bound by such agreement as “Guarantors” and/or “Grantors”, in favor of Collateral Agent and as amended, restated, supplemented or otherwise modified from time to time.

“Shares” means Class B Subordinate Voting Shares of the Company.

“Subordination Agreement” means each subordination or intercreditor agreement entered into for the purpose of subordinating Indebtedness or Liens to the Obligations, or subordinating the Obligations to any other Indebtedness or Liens, in form and substance reasonably requested by or acceptable to Purchasers, as applicable.

“Subsequent Credit Parties” means each Subsidiary of the Company, and each Subsidiary of each Borrower, whether existing on the Tranche 1-B Funding Date or joined to this Agreement and the Operative Documents under Section 7.11, Section 7.12 or Section 7.20, subsequent to the Tranche 1-B Funding Date other than the Excluded Subsidiaries, and “Subsequent Credit Party” means any such Person.

“Subsidiary” means, with respect to any Person, any corporation, limited liability company, partnership, association or other business entity of which (a) if a corporation, a majority of the total voting power of equity or voting securities entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or (b) if a limited liability company, partnership, association or other business entity, a majority of the limited liability company, partnership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by any Person or one or more Subsidiaries of that Person or a combination thereof. For purposes hereof, a Person or Persons shall be deemed to have a majority ownership interest in a limited liability company, partnership, association or other business entity if such Person or Persons shall be allocated a majority of limited liability company, partnership, association or other business entity gains or losses or shall be or control (or have the power to be or control) the general partner or other governing body of such limited liability company, partnership, association or other business entity. In the absence of designation to the contrary, reference to a Subsidiary or Subsidiaries shall be deemed to be a reference to Subsidiaries of the applicable Credit Party.

“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

“Title IV Plan” means any employee benefit plan (within the meaning of Section 3(3) of ERISA) subject to the provisions of Title IV of ERISA other than a Multiemployer Plan, as to which any Credit Party or any Subsidiary is making, or is obligated to make contributions, including as a result of being an ERISA Affiliate, or, during the preceding six calendar years, has made, or been obligated to make, contributions.

“Trademark Security Agreement” means that certain Trademark Security Agreement dated as of the Second Restatement Closing Date, made by the Credit Parties party thereto and each other Credit Party which joins and becomes bound by such agreement as “Grantors”, in favor of Collateral Agent and as amended, restated, supplemented or otherwise modified from time to time.

“Tranche 1 Advances” means, collectively, the Tranche 1-A Advance and the Tranche 1- B Advance, and each is a “Tranche 1 Advance”.

“Tranche 1-A Advance” means the aggregate amount funded by the applicable Purchasers to the Borrowers on the Closing Date, which shall equal $20,000,000.

“Tranche 1-A Notes” means the first priority senior secured convertible notes issued on the Closing Date by the Borrowers to the applicable Purchasers in the aggregate amount of the Tranche 1-A Advance, in substantially the form attached hereto as Exhibit A-1, as amended, modified, supplemented or restated from time to time, together with all notes issued in substitution or exchange therefor.

“Tranche 1-A Warrants” means, collectively, the Tranche 1-A(1) Warrants and Tranche 1-A(2) Warrants, and each is a “Tranche 1-A Warrant”.

“Tranche 1-A(1) Warrants” means the warrants to purchase Shares, issued on the Closing Date by the Company to the applicable Purchasers, representing in the aggregate thirty seven and one half percent (37.5%) coverage with respect to the Tranche 1-A Advance and with an exercise price equal to one hundred thirty percent (130%) of the Closing Base Price, in the form attached hereto as Exhibit B-1, as amended, modified, supplemented or restated from time to time, together with all warrants issued in substitution or exchange therefor.

“Tranche 1-A(2) Warrants” means the warrants to purchase Shares, issued on the Closing Date by the Company to the applicable Purchasers, representing in the aggregate twelve and one half percent (12.5%) coverage with respect to the Tranche 1-A Advance and with an exercise price equal to one hundred fifty percent (150%) of the Closing Base Price, in substantially the form attached hereto as Exhibit B-1, as amended, modified, supplemented or restated from time to time, together with all warrants issued in substitution or exchange therefor.

“Tranche 1-B Advance” means the aggregate funding committed by the Purchasers to the Initial Borrowers on the Tranche 1-B Funding Date to be advanced by the Purchasers on the Tranche 1-B Funding Date, which funding shall equal $80,000,000.

“Tranche 1-B Funding Date” means the date on which the Tranche 1-B Advance is made, which date shall be no later than thirty (30) days after the Closing Date. For the avoidance of doubt, no interest shall accrue with respect to the Tranche 1-B Advance until it is funded.

“Tranche 1-B Notes” means the first priority senior secured convertible notes issued on the Tranche 1-B Funding Date by the Borrowers to the Purchasers in the aggregate amount of the Tranche 1-B Advance, in substantially the form attached hereto as Exhibit A-1, as amended, modified, supplemented or restated from time to time, together with all notes issued in substitution or exchange therefor.

“Tranche 1-B Warrants” means collectively, the Tranche 1-B(1) Warrants and Tranche 1-B(2) Warrants, and each is a “Tranche 1-B Warrant”

“Tranche 1-B(1) Warrants” means the warrants to purchase Shares, issued on the Tranche 1-B Funding Date by the Company to the Purchasers, representing in the aggregate thirty seven and one half percent (37.5%) coverage with respect to the Tranche 1-B Advance and with an exercise price equal to one hundred thirty percent (130%) of the Closing Base Price, in the form attached hereto as Exhibit B-1, as amended, modified, supplemented or restated from time to time, together with all warrants issued in substitution or exchange therefor.

“Tranche 1-B(2) Warrants” means the warrants to purchase Shares, issued on the Tranche 1-B Funding Date by the Company to the Purchasers, representing in the aggregate twelve and one half percent (12.5%) coverage with respect to the Tranche 1-B Advance and with an exercise price equal to one hundred fifty percent (150%) of the Closing Base Price, in substantially the form attached hereto as Exhibit B-1, as amended, modified, supplemented or restated from time to time, together with all warrants issued in substitution or exchange therefor.

“Tranche 1 Notes” means, collectively, the Tranche 1-A Notes and Tranche 1-B Notes.

“Tranche 1 Warrants” means, collectively, the Tranche 1-A(1) Warrants, Tranche 1-A(2) Warrants, Tranche 1-B(1) Warrants and Tranche 1-B(2) Warrants, and each is a “Tranche 1 Warrant”.

“Tranche 2 Advance” means the aggregate amount funded by the Purchasers to the Borrowers on the Tranche 2 Funding Date, which shall equal $25,000,000.

“Tranche 2 Funding Date” means the date on which the Tranche 2 Advance is made.

“Tranche 2 Notes” means the first priority senior secured convertible notes issued on the tranche 2 Funding Date by the Borrowers to the Purchasers in the aggregate amount of the Tranche 26 2 Advance, in substantially the form attached hereto as Exhibit A-1, as amended, modified, supplemented or restated from time to time, together with all notes issued in substitution or exchange therefor.

“Tranche 2 Warrants” means, collectively, the Tranche 2-A Warrants and Tranche 2-B Warrants, and each is a “Tranche 2 Warrant”.

“Tranche 2-A Warrants” means warrants to purchase Shares, issued by the Company on the Tranche 2 Funding Date to the Purchasers, representing in the aggregate thirty seven and one half percent (37.5%) coverage with respect to the Tranche 2 Advance and with an exercise price equal to one hundred thirty percent (130%) of the lesser of (a) the volume-weighted average trading price of the Shares for the twenty (20) consecutive trading days ending on the trading day prior to the Tranche 2 Funding Date (with the conversion from Canadian dollars (as reported by the CSE) to U.S. dollars being determined based on the exchange rate published by the Bank of Canada for the day immediately prior to the Tranche 2 Funding Date) and (b) the Closing Base Price, in substantially the form attached hereto as Exhibit B-1, as amended, modified, supplemented or restated from time to time, together with all warrants issued in substitution or exchange therefor.

“Tranche 2-B Warrants” means warrants to purchase Shares, issued by the Company on the Tranche 2 Funding Date to the Purchasers, representing in the aggregate twelve and one half percent (12.5%) coverage with respect to the Tranche 2 Advance and with an exercise price equal to one hundred fifty percent (150%) of the lesser of (a) the volume-weighted average trading price of the Shares for the twenty (20) consecutive trading days ending on the trading day prior to the Tranche 2 Funding Date (with the conversion from Canadian dollars (as reported by the CSE) to U.S. dollars being determined based on the exchange rate published by the Bank of Canada for the day immediately prior to the Tranche 2 Funding Date) and (b) the Closing Base Price, in substantially the form attached hereto as Exhibit B-1, as amended, modified, supplemented or restated from time to time, together with all warrants issued in substitution or exchange therefor.

“Tranche 3 Advance” means the aggregate amount funded by the Purchasers to the Borrowers on the Tranche 3 Funding Date, which shall equal $10,000,000.

“Tranche 3 Funding Date” means the date on which the Tranche 3 Advance is made.

“Tranche 3 Notes” means the first priority senior secured convertible notes issued on the Tranche 3 Funding Date by the Borrowers to the Purchasers in the aggregate principal amount of the Tranche 3 Advance, in substantially the form attached hereto as Exhibit A-1, as amended, modified, supplemented or restated from time to time, together with all notes issued in substitution or exchange therefor.

“Tranche 3 Warrants” means, collectively, the Tranche 3-A Warrants and Tranche 3-B Warrants, and each is a “Tranche 3 Warrant”.

“Tranche 3-A Warrants” means warrants to purchase Shares, issued by the Company on the Tranche 3 Funding Date to the Purchasers, representing in the aggregate thirty seven and one half percent (37.5%) coverage with respect to the Tranche 3 Advance and with an exercise price equal to one hundred thirty percent (130%) of the Accordion Base Price, in substantially the form attached hereto as Exhibit B-1, as amended, modified, supplemented or restated from time to time, together with all warrants issued in substitution or exchange therefor.

“Tranche 3-B Warrants” means warrants to purchase Shares, issued by the Company on the Tranche 3 Funding Date to the Purchasers, representing in the aggregate twelve and one half percent (12.5%) coverage with respect to the Tranche 3 Advance and with an exercise price equal to one hundred fifty percent (150%) of the Accordion Base Price, in substantially the form attached hereto as Exhibit B-1, as amended, modified, supplemented or restated from time to time, together with all warrants issued in substitution or exchange therefor.

“Tranche 4 Advance” means the aggregate amount funded by the Purchasers to the Borrowers on the Tranche 4 Funding Date, which shall be $12,500,000.

“Tranche 4 Funding Date” means the Restatement Closing Date.

“Tranche 4 Replacement Warrants” means warrants to purchase Shares, issued by the Company on the Tranche 4 Funding Date to the Existing Purchasers, representing coverage in an aggregate amount of $8,437,500, with an exercise price equal to $0.26 per Share, in substantially form attached hereto as Exhibit B-3, as amended, modified, supplemented or restated from time to time, together with all warrants issued in substitution or exchange therefor. Such warrants will represent warrants to purchase 32,451,923 Shares in the aggregate ($8,437,500 divided by $0.26 per Share). The Tranche 4 Replacement Warrants may not be exercised prior to the 18-month anniversary of the Tranche 4 Funding Date, and shall be subject to cancellation under the terms thereof in connection with the Retail Cash Flow Milestone.

“Tranche 4 Warrants” means warrants to purchase Shares, issued by the Company on the Tranche 4 Funding Date to the Purchasers who participate in the Tranche 4 Advance, representing in the aggregate one hundred percent (100%) coverage with respect to the Tranche 4 Advance and with an exercise price equal to $0.26 per Share, in substantially the form attached hereto as Exhibit B-2, as amended, modified, supplemented or restated from time to time, together with all warrants issued in substitution or exchange therefor.

“Treehouse Amendment Documents” means definitive documents reasonably acceptable to Collateral Agent effecting the amendments to the Treehouse REIT Documents contemplated in the term sheet attached to Schedule 1.1(i).

“Treehouse REIT” means Treehouse Real Estate Investment Trust.

“Treehouse REIT Documents” means that certain Management Agreement dated as of January 3, 2019, entered into by and among LCR Manager, LLC, a Delaware limited liability company, Treehouse Real Estate Investment Trust, Inc., a Maryland corporation and Le Cirque Rouge, LP, a Delaware partnership, that certain Limited Partnership Agreement dated as of January 3, 2019, as amended by the Treehouse Amendment Documents, and all other agreements, instruments and documents entered into in connection therewith as the same may be amended or modified or terms waived from time to time; provided, that any modification thereof or waiver requested or granted thereunder shall require the prior written consent of the Majority Holders.

“Treehouse REIT Transactions” means the sale of certain Credit Parties’ real property and leasehold interests to Treehouse REIT and simultaneous lease of such real property or leasehold back to such Credit Parties in accordance with the Treehouse REIT Documents.

“Unencumbered Liquid Assets” means (a) the following assets which (i) are not the subject of any Lien or other arrangement with any creditor to have its claim satisfied out of the asset (or proceeds thereof) prior to the general creditors of the owner of the asset (other than Permitted Liens), (ii) are held solely in the name of a Credit Party (with no other Person having ownership rights therein), and (iii) may be converted to cash within five (5) days, and: (x) Cash Equivalents, (y) United States Treasury or governmental agency obligations which constitute full faith and credit of the United States of America, or (z) medium and long-term securities rated investment grade by Moody’s or S&P, and (b) any other assets which are otherwise acceptable to the Holders in their reasonable discretion.

“Unfunded Benefit Liabilities” means the excess of a Title IV Plan’s benefit liabilities under Section 4001(a)(16) of ERISA, over the current value of that Title IV Plan’s assets, determined in accordance with the actuarial assumptions used by the Title IV Plan’s actuaries for Title IV Plan funding purposes for the applicable plan year.

“United States” and “U.S.” each means the United States of America and political subdivisions thereof.

“Unproductive Leases” means leases or other agreements relating to the use or license of premises located at the addresses specified in the Turnaround Plan.

“U.S. Accredited Investor” means an “accredited investor” as defined in Rule 501(a) under Regulation D.

“U.S. Exchange Act” means the United States Securities Exchange Act of 1934, as amended.

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

“U.S. Securities Act” means the United States Securities Act of 1933, as amended.

“U.S. Securities Laws” means the United States federal securities laws, including, without limitation, the U.S. Securities Act and the U.S. Exchange Act, and applicable state securities laws.

“Virginia Subsidiaries” means, collectively, PharmaCann Virginia LLC.

“Warrants” means, collectively, the Tranche 1 Warrants, Tranche 2 Warrants, Tranche 3 Warrants, Tranche 4 Warrants, Tranche 4 Replacement Warrants, Incremental Warrants and Incremental Replacement Warrants, and each is a “Warrant”.

“Warrant Shares” means the Shares of the Company issuable upon exercise of the Warrants.

Table of Defined Terms

Accounting Principles. Calculations and determinations of financial and accounting terms used and not otherwise specifically defined under this Agreement (including the Exhibits hereto) shall be made and determined, both as to classification of items and as to amount, in accordance with GAAP or IFRS, as applicable. If any changes in accounting principles or practices from GAAP or IFRS, as applicable, are occasioned by the promulgation of rules, regulations, pronouncements and opinions by or required by the Financial Accounting Standards Board or the American Institute of Certified Public Accountants (or any successor thereto or agencies with similar functions) with respect to GAAP, and the International Accounting Standards Board with respect to IFRS, which results in a change in the method of accounting in the calculation of financial covenants, standards or terms contained in this Agreement or any other Operative Document, the parties hereto agree to enter into negotiations to amend such provisions so as equitably to reflect such changes to the end that the criteria for evaluating financial and other covenants, financial condition and performance will be the same after such changes as they were before such changes; and if the parties fail to agree on the amendment of such provisions, Credit Parties shall continue to provide calculations for all financial covenants, perform all financial covenants and otherwise observe all financial standards and terms in the Operative Documents in accordance with GAAP or IFRS, as applicable, as in effect immediately prior to such changes.

1.2 Other Definitional or Interpretive Provisions.

(a) Unless otherwise noted, all references to currency shall be United States dollars and all payments contemplated herein shall be paid in United States funds, by certified check, bank draft or wire transfer of immediately available funds.

(b) Whenever the context so requires, the neuter gender includes the masculine and feminine, the singular number includes the plural, and vice versa. The words “include,” “includes” and “including” shall in any event be deemed to be followed by the phrase “without limitation.”

(c) All references in this Agreement to “this Agreement”, “herein”, “hereunder”, “hereof” shall be deemed to refer to this Agreement and the Exhibits hereto (including their annexes) unless the context requires otherwise. All references in this Agreement to Articles, Sections, Exhibits and Annexes shall be construed to refer to Articles and Sections of, and Exhibits and Annexes to, this Agreement unless the context requires otherwise. Unless the context otherwise requires, all references in this Agreement to Schedules shall be construed to refer to the disclosure schedules delivered by the Company to Purchasers on the Restatement Closing Date pursuant to the Disclosure Letter on or prior to the Restatement Closing Date. Any definition of or reference to any agreement, instrument or other document shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented or otherwise modified (subject to any restrictions on such amendments, restatements, supplements or modifications set forth herein or in any other Operative Document).

(d) Except as otherwise provided herein, any reference to a statute refers to the statute or any successor thereto, in each case as amended, reformed or modified from time to time and to all rules and regulations promulgated under or implementing the statute as in effect at the relevant time and a reference to a specific provision of a statute, rule or regulation includes any successor provision or provisions.

ARTICLE II

AUTHORIZATION AND SALE OF SECURITIES.

2.1 Authorization. Prior to the Closing, the Company and Holdings will authorize the issuance and sale of the Notes and Warrants to the Purchasers, in the amounts provided in Section 2.2.

2.2 Sale of the Securities to the Purchaser; Changes to Securities Upon Occurrence of Certain Events; Commitments.

(a) Tranche 1-A. Subject to the satisfaction of the terms and conditions herein set forth and in reliance upon the respective representations and warranties of the Credit Parties set forth herein and in the other Operative Documents, at the Closing, the Borrowers shall sell to the Purchasers the Tranche 1-A Notes and the Company shall sell the Tranche 1-A Warrants to the Purchasers, respectively, for an aggregate amount equal to the Tranche 1-A Advance.

(b) Tranche 1-B. Subject to the satisfaction of the terms and conditions herein set forth and in reliance upon the respective representations and warranties of the Credit Parties set forth herein and in the other Operative Documents, on the Tranche 1-B Funding Date, the Borrowers shall sell to the Purchasers the Tranche 1-B Notes and the Company shall sell the Tranche 1-B Warrants to the Purchasers, respectively, for an aggregate amount equal to the Tranche 1-B Advance.

(c) Tranche 2. Subject to the satisfaction of the terms and conditions herein set forth and in reliance upon the respective representations and warranties of the Credit Parties set forth herein and in the other Operative Documents, on the Tranche 2 Funding Date, the Borrowers shall sell to the Purchasers Tranche 2 Notes with an aggregate principal amount equal to the Tranche 2 Advance, and the Company shall sell the Tranche 2 Warrants to the Purchasers in proportion to the Tranche 2 Advance, respectively, for an aggregate amount equal to the Tranche 2 Advance.

(d) Tranche 3. Subject to the satisfaction of the terms and conditions herein set forth and in reliance upon the respective representations and warranties of the Credit Parties set forth herein and in the other Operative Documents, on the Tranche 3 Funding Date, the Borrowers shall sell to the Purchasers Tranche 3 Notes with an aggregate principal amount equal to the Tranche 3 Advance, and the Company shall sell the Tranche 3 Warrants to the Purchasers in proportion to the Tranche 3 Advance, respectively, for an aggregate amount equal to the Tranche 3 Advance.

(e) Tranche 4. Subject to the satisfaction of the terms and conditions herein set forth and in reliance upon the respective representations and warranties of the Credit Parties set forth herein and in the other Operative Documents, on the Tranche 4 Funding Date, (x) the Borrowers shall issue to the Purchasers the Amended and Restated Notes, (y) the Company shall issue the Tranche 4 Warrants to the Purchasers participating in the Tranche 4 Advance, and (z) the Company shall issue to the Existing Purchasers the Tranche 4 Replacement Warrants, for an aggregate funded amount equal to the Tranche 4 Advance. The Existing Purchasers and the Credit Parties agree that the Tranche 4 Replacement Warrants issued on the Tranche 4 Funding Date are, among other consideration, consideration for the amendments agreed upon by the Existing Purchasers on the Restatement Closing Date. Effective upon funding the Tranche 4 Advance,

(i) Twelve and one half percent (12.5%) of each of the Existing Warrants shall be deemed cancelled, on a pro rata basis with respect to all Existing Warrants in proportion to the dollar coverage of the applicable tranche of each such Existing Warrant, as set forth on Schedule 1.1(d); and

(ii) the Existing Notes shall be amended and restated in substantially the form attached hereto as Exhibit A-2, which Amended and Restated Notes shall also reflect the principal amount and other terms of the Tranche 4 Advance;

The changes to securities issued under this Agreement resulting from the amendments described in this Section 2.2(e) are set forth on Schedule 1.1(d), and the provisions of this Section 2.2(e) shall control over any inconsistency with the applicable Notes or Warrants.

(f) Incremental Advances; Commitments.

(i) Subject to the capital requirements of the Company set out in the Turnaround Plan and Interim Budget, as applicable, the Gotham Purchasers shall use commercially reasonable efforts to fund, or form a syndicate of Gotham Purchasers, Related Funds and other Persons approved by the Gotham Purchasers that will commit to fund (collectively, the “Incremental Purchasers”), up to $150,000,000 in the aggregate in connection with the Tranche 4 Advance and all Incremental Advances. During the ninety (90)-day period after the Restatement Closing Date (the “Initial Commitment Period”), the Gotham Purchasers may from time to time notify the Company in writing of the amount the Incremental Purchasers are committing to fund in Incremental Advances and the outside date by which each such Incremental Advance shall be funded to the Borrowers subject to the terms and conditions set out in Section 4.5, which outside date shall be no more than 21 days from the date of such notice (the aggregate of the Tranche 4 Advance plus all committed amounts as of any date is the “Committed Amount” and the outside date set out in any such notification being an “Outside Incremental Funding Date”). The Gotham Purchasers may commit but shall not be required to fund any amount if the Interim Budget or Turnaround Plan, as applicable, does not indicate a need for such capital, which assessment shall for the avoidance of doubt account for the ability of the Credit Parties to comply with their obligations under the Operative Documents, the Hankey Loan Documents and any other obligations to which they are subject and not restricted from being incurred pursuant to the Operative Documents. If the Committed Amount reaches an amount that is greater than or equal to $50,000,000 during the Initial Commitment Period, then the Initial Commitment Period shall automatically be extended by another ninety (90) days (such periods are referred to interchangeably and collectively as the “Commitment Period”), such that the Commitment Period would end on the date that is one hundred eighty (180) days after the Restatement Closing Date.

(ii) During the Commitment Period, the Company and the Borrowers must accept a Committed Amount of up to $125,000,000 (inclusive of the Tranche 4 Advance) in the form of up to $105,000,000 of Incremental Advances from the Purchasers (which may be funded after the Commitment Period but no later than the applicable Outside Incremental Funding Date provided for in Section 2.2(f)(i) in accordance with Section 4.5), and shall issue Incremental Notes, Incremental Warrants and Incremental Replacement Warrants, and perform such other actions required in connection with issuing such securities in accordance with this Section 2.2(f), Section 4.5 and the other terms and conditions of the Operative Documents (unless otherwise waived by the Purchasers). Each Incremental Advance other than the first Incremental Advance shall equal or exceed $15,000,000 in the aggregate with respect to the gross principal amount funded by the Incremental Purchasers funding such Incremental Advance (for the avoidance of doubt, without accounting for netting out fees and expenses which are payable under the Operative Documents). If the aggregate Committed Amount (inclusive of the Tranche 4 Advance) exceeds $125,000,000 during the Commitment Period, the Borrowers may reject any portion of the Committed Amount which is in excess of $125,000,000 by notifying the Gotham Purchasers in writing no later than five (5) days after delivery of the Gotham Purchasers’ notice to the Borrowers reflecting a Committed Amount (inclusive of the Tranche 4 Advance) in excess of $125,000,000. The Borrowers’ failure to reject any such Committed Amount in such timeframe shall evidence their acceptance thereof.

(iii) If the aggregate Tranche 4 Advance and Incremental Advances committed during the Commitment Period reaches $100,000,000 or more, then:

(A) in the event that the Borrowers (x) have not elected to exercise their right to extend the Initial Maturity Date (as defined in the Notes) to the Extended Maturity Date (as defined in the Notes), the Purchasers shall have up to three (3) options to extend the Maturity Date (as defined in the Notes), with the first option being a three (3)-year extension option, and the second and third options each being one (1)-year extension options, and (y) have elected to exercise their right to extend the Initial Maturity Date (as defined in the Notes) to the Extended Maturity Date (as defined in the Notes), the Purchasers shall have up to three (3) options to extend the Maturity Date (as defined in the Notes), with the first option being a two (2)-year extension option, and the second and third options each being one (1)-year extension options. Such options to extend the Maturity Date may be exercised unilaterally as to and on behalf of all Purchasers (and not less than all Purchasers) and as to all outstanding Notes (and not less than all outstanding Notes) by the Gotham Purchasers, in each case by providing written notice to the Company at least ninety (90) days prior to the Initial Maturity Date or Extended Maturity Date, as applicable, or prior to the then applicable Maturity Date, if the Maturity Date has been previously extended pursuant to the exercise of any such extension option by the Gotham Purchasers on behalf of the Purchasers. If any such extension option is exercised, the term “Maturity Date” as used in the Notes and this Agreement shall refer to the extended maturity date resulting from such extension; and

(B) in the Gotham Purchasers’ sole option, the Notes may be amended by the Gotham Purchasers unilaterally such that, notwithstanding anything to the contrary in the Notes or any other Operative Document, the Principal Amount of the Notes may not be prepaid for any reason or at any time without the Gotham Purchasers’ prior written consent. Such option may be exercised by the Gotham Purchasers providing written notice to the Company.

(iv) Subject to the satisfaction of the terms and conditions herein set forth and in reliance upon the respective representations and warranties of the Credit Parties set forth herein and in the other Operative Documents, on each Incremental Funding Date, (x) the Borrowers shall issue to the Purchasers participating in such Incremental Advance the Incremental Notes in a principal amount equal to such Incremental Advance, (y) the Company shall issue the Incremental Warrants to the Purchasers participating in such Incremental Advance issuable in connection with such Incremental Advance (in accordance with the definition of Incremental Warrants), and (z) the Company shall issue to the Existing Purchasers the Incremental Replacement Warrants issuable in connection with such Incremental Advance (in accordance with the definition of Incremental Replacement Warrants), for an aggregate funded amount equal to such Incremental Advance. The Existing Purchasers and the Credit Parties agree that the Incremental Replacement Warrants issued on each Incremental Funding Date are, among other consideration, consideration for the amendments agreed upon by the Existing Purchasers on the Restatement Closing Date. Effective upon funding each Incremental Advance,

(A) a fraction of the Existing Warrants equal to the relevant Incremental Advance divided by $100,000,000 shall be deemed cancelled, on a pro rata basis with respect to all Existing Warrants in proportion to the dollar coverage of the applicable tranche of each such Existing Warrant, until all Existing Warrants are cancelled (for clarity, all Existing Warrants would be cancelled only if and when the aggregate amount of the Tranche 4 Advance and the Incremental Advances equals or exceeds $100,000,000), all as described on Schedule 1.1(d); and

(B) as set forth in Section 4.3 of the Amended and Restated Notes, a fraction of the Fully Accreted Existing Notes Principal under the Amended and Restated Notes then outstanding equal to the relevant Incremental Advance divided by $100,000,000 shall be deemed amended such that the Conversion Price for such fraction of the Fully Accreted Existing Notes Principal shall be (1) with respect to the first Incremental Advance, $0.26, and (2) with respect to each other Incremental Advance, the Restatement Conversion Price calculated as of the applicable Incremental Funding Date, with each such amendment applying to the Fully Accreted Existing Notes Principal on a pro rata basis as set forth in Section 4.3 of the Amended and Restated Notes.

For example, if the Incremental Advance is $15,000,000, then 15% of the Existing Warrants would be cancelled, and 15% of the Fully Accreted Existing Notes Principal would be deemed amended such that the Conversion Price becomes the Restatement Conversion Price calculated as of the applicable Incremental Funding Date. The changes to securities issued under this Agreement resulting from the amendments described in this Section 2.2(f) shall be set forth on Schedule 1.1(d), which shall be updated by the Gotham Purchasers, the Company and Borrowers in connection with each Incremental Advance.

As of the Second Restatement Closing Date, the parties agree that the Commitment Period expired on June 25, 2020. Schedule 1.1(d) has been updated as of the Second Restatement Closing Date to reflect all Incremental Advances. As of the Second Restatement Closing Date, the Gotham Purchasers and the Borrowers acknowledge and agree that the Committed Amount did not equal or exceed $50,000,000 during the Commitment Period.

ARTICLE III

CLOSING; DELIVERY; AMENDMENTS TO NOTES

3.1 Closing. The Closing was held at the offices of Honigman LLP, located at 2290 First National Building, 660 Woodward Avenue, Detroit, Michigan 48226, on the Closing Date, at 10:00 a.m., local time, or at such other time, date and place as may be agreed to in writing by the Company and the Purchasers.

3.2 Delivery; Advances.

(a) At the Closing, the Initial Borrowers and the Company delivered the Tranche 1-A Notes and Tranche 1-A Warrants, respectively, and on the Closing Date, the Purchasers paid the Tranche 1-A Advance to the Initial Borrowers and the Company by wire transfer to accounts designated by the Initial Borrowers and the Company prior to the Closing. On the Tranche 1-B Funding Date, subject to the terms and conditions herein, (i) the Borrowers and the Company delivered the Tranche 1-B Notes and Tranche 1-B Warrants, respectively, and (ii) the Purchasers paid the Tranche 1-B Advance to the Borrowers and the Company by wire transfer to accounts designated by the Borrowers and the Company prior to the Closing. On the Tranche 2 Funding Date, subject to the terms and conditions herein, (x) the Borrowers and the Company delivered the Tranche 2 Notes with an aggregate principal amount equal to the Tranche 2 Advance, and Tranche 2 Warrants with respect to the Tranche 2 Advance, respectively, and (y) the Purchasers paid the Tranche 2 Advance to the Borrowers and the Company by wire transfer to accounts designated by the Borrowers and Company prior to the Tranche 2 Funding Date. On the Tranche 3 Funding Date, subject to the terms and conditions herein, (I) the Borrowers and the Company delivered the Tranche 3 Notes with an aggregate principal amount equal to the Tranche 3 Advance, and Tranche 3 Warrants with respect to the Tranche 3 Advance, respectively, and (II) the Purchasers paid the Tranche 3 Advance to the Borrowers and the Company by wire transfer to accounts designated by the Borrowers and Company prior to the Tranche 3 Funding Date. On the Tranche 4 Funding Date, subject to the terms and conditions herein, (A) the Borrowers and the Company will deliver the Amended and Restated Notes, Tranche 4 Warrants and Tranche 4 Replacement Warrants, respectively, and (B) the Purchasers who participate in the Tranche 4 Advance will pay the Tranche 4 Advance to the Borrowers and the Company by wire transfer to accounts designated by the Borrowers and the Company prior to the Tranche 4 Funding Date. On each Incremental Funding Date, subject to the terms and conditions herein, (A) the Borrowers and the Company will deliver the Incremental Notes, Incremental Warrants and Incremental Replacement Warrants, respectively, corresponding to the Incremental Advance then funded, and(B) the Purchasers participating in the relevant Incremental Advance will pay the relevant Incremental Advance to the Borrowers and the Company by wire transfer to accounts designated by the Borrowers and the Company prior to the relevant Incremental Funding Date.

(b) The Company and the Purchasers agree as between the Company and the Purchasers, that the fair market value of (i) the Tranche 1 Warrants and the rights to acquire the Tranche 2 Warrants, Tranche 3 Warrants and Tranche 4 Warrants in the aggregate is equal to $400,000 and (ii) the Incremental Warrants will be agreed upon in good faith by the Company and the Collateral Agent, as agent for the Purchasers, at the time of their issuance. The Company and the Purchasers further agree that, pursuant to Treas. Reg. § 1.1273-2(h), $400,000 of the issue price of the investment unit consisting of (a)(i) the Tranche 1-A Notes and (ii) the Tranche 1-B Notes, on the one hand, and (b)(i) the Tranche 1 Warrants and (ii) the rights to acquire the Tranche 2 Warrants, Tranche 3 Warrants and Tranche 4 Warrants, on the other hand, will be allocable to the Tranche 1 Warrants and the right to acquire the Tranche 2 Warrants, Tranche 3 Warrants and Tranche 4 Warrants. The Company and the Purchasers further agree that, pursuant to Treas. Reg. § 1.1273-2(h), the agreed-upon portion of the issue price of the investment unit consisting of (i) the Incremental Notes and (ii) the Incremental Warrants will be allocable to the Incremental Warrants. The Company and the Purchasers shall prepare and file all Tax and information reports in a manner consistent with the foregoing allocation and shall not take any position on any Tax return, before any Governmental Authority or in any proceeding relating to Taxes that is inconsistent with such allocation unless required by a determination within the meaning of Section 1313(a) of the Code. The Company and the Purchasers shall use commercially reasonable efforts to defend such allocation in any such tax proceeding.

3.3 Waiver of Existing Defaults.

Subject to the satisfaction of the conditions set forth in Section 4.6, and in reliance on the representations in Section 5.7, the Holders and Collateral Agent hereby waive any Defaults or Events of Default existing and disclosed or otherwise known to the Holders on or prior to the Second Restatement Closing Date (the “Existing Defaults”). Nothing in this Section 3.3 shall constitute a waiver of compliance by Borrowers or any other Credit Party or any agreement to waive or forbear with respect to any future Event of Default in any other circumstances for any period after the Second Restatement Closing Date or waive compliance by Borrowers or any other Credit Party with any other term, provision or condition of this Agreement, any other Operative Document or any other instrument or agreement referred to therein.

3.4 Amendments to Notes.

(a) Subject to the satisfaction of the conditions set forth in Section 4.6, the Amended and Restated Notes are hereby amended such that the Conversion Price with respect to fifty two percent (52%) of the Fully Accreted Existing Notes Principal (calculated as of the Second Restatement Closing Date) shall be $0.34.

(i) The parties agree that, in the aggregate, the Conversion Price with respect to sixty seven percent (67%) of the Fully Accreted Existing Notes Principal has been amended under the terms of this Agreement and the Notes on or prior to the Second Restatement Closing Date, with fifty two percent (52%) being amended under Section 3.4(a), and fifteen percent (15%) having been amended in connection with the Tranche 4 Advance and Incremental Advances.

(ii) Schedule 1.1(d) is amended and restated as set forth in Schedule 1.1(d) of the Disclosure Letter delivered by the Credit Parties on the Second Restatement Closing Date, and such schedule includes all amendments to the Conversion Price in Notes prior to the Second Restatement Closing Date as well as the amendment to the Conversion Price set forth under this Section 3.4(a).

(b) Clauses (a) and (b) of Section 3.3 of each Note are hereby amended and restated in their entirety as follows:

“(a) Interest due on any Interest Payment Date prior to July 2, 2021 shall accrue and may, at Borrower’s option upon written notice to Holder, either (i) be added to the Principal Amount, with such amount accruing Interest as part of the Principal Amount of the Obligations, and such interest paid in kind shall be payable on the date that the remaining Principal Amount is due and payable pursuant thereto, or (ii) be paid in cash in arrears to the Holder, by wire transfer of immediately available funds to the account designated by Holder from time to time; and

(b) Interest due on any Interest Payment Date on or after July 2, 2021 shall be paid as follows: (i) fifty percent (50%) of the Interest then due shall be paid in cash in arrears to the Holder, by wire transfer of immediately available funds to the account designated by Holder from time to time; and (ii) fifty percent (50%) of the Interest then due shall be added to the Principal Amount, with such amount accruing Interest as part of the Principal Amount of the Obligations, and such interest paid in kind shall be payable on the date that the remaining Principal Amount is due and payable pursuant thereto.

(c) Notwithstanding Sections 3.3(a)-(b), if Code Section 280E reform is enacted with respect to the cannabis industry in a manner that would eliminate the additional tax burden placed on the Company and its Affiliates, then, effective immediately on the date any such reform goes into effect, (x) the Borrower shall not be permitted to pay Interest in kind by adding such Interest to the Principal Amount, and (y) Borrower shall pay all Interest accruing on and after such date in cash, as it becomes due hereunder.”

(c) Subject to the satisfaction of the conditions set forth in Section 4.6, Section 4.7 of each of the Amended and Restated Notes issued to a Gotham Purchaser is hereby amended and restated in its entirety as follows:

“Notwithstanding anything to the contrary herein or in any other Operative Document, neither the Borrowers nor the Holder shall convert any portion of the Principal Amount which constitutes Existing Notes Principal or the Restatement Fee (in each case, plus interest paid in kind with respect to such principal under Section 3.3(a) above on or prior to the Second Restatement Closing Date, but excluding any interest paid in kind with respect to such principal under Section 3.3(a) above after the Second Restatement Closing Date) into Shares until on or after July 2, 2021.”

ARTICLE IV

CONDITIONS TO CLOSING BY THE PURCHASERS

4.1 Closing Date and Tranche 1-A Advance. The obligation of the Purchasers to make the Tranche 1-A Advance is subject to the fulfillment at or prior to the Closing, as provided below, of each of the following conditions, in each case, in a manner, form and substance reasonably satisfactory to the Purchasers: Notes. The Initial Borrowers and the Company shall have executed and delivered the Tranche 1-A Notes to the Purchasers on or before the Closing Date.

(b) Warrants. The Company shall have executed and delivered the Tranche 1- A Warrants to the Purchasers on or before the Closing Date.

(c) Other Operative Documents. The Company and, to the extent applicable, the Credit Parties, shall have executed and delivered to the Purchasers the Fee Letter, the Security Agreement, the Company Security Agreements, the Collateral Assignment of Material Agreements, the Intercompany Note, and the Perfection Certificate, in each case on or before the Closing Date.

(d) Officer’s Certificate. The Initial Credit Parties shall deliver to the Purchasers a certificate executed by a Responsible Officer of each Credit Party, on or before the Closing Date, certifying as to (a) the fulfillment of the conditions specified in Sections 4.1(j), (l), (m), (o), (p) and (q), (b) the absence of Defaults or Events of Default, and (c) such other matters as the Purchasers shall request.

(e) Good Standing Certificates. The Initial Credit Parties shall have delivered to the Purchasers on or before the Closing Date good standing certificates from the Secretary of State (or other applicable governmental authority) of the State of their incorporation or organization and each other material jurisdiction in which such Initial Credit Parties are qualified to do business as a foreign entity, in each case as of a recent date prior to the Closing Date.

(f) Secretary’s Certificates. Each Initial Credit Party shall have delivered to the Purchasers copies of each of the following on or before the Closing Date, in each case, certified to be in full force and effect on the Closing Date by the general partner, secretary, assistant secretary or other officer or manager of such Initial Credit Party and in form and substance satisfactory to the Purchasers:

(i) the certificate of incorporation or certificate of formation, as applicable, of such Initial Credit Party as of the Closing, certified by the Secretary of State of the State under the laws of which such Initial Credit Party is incorporated or organized as of a recent date prior to the Closing Date;

(ii) the limited partnership agreement, by-laws or operating agreement, as applicable, of such Initial Credit Party as of the Closing Date; and

(iii) resolutions of the general partner, board of directors and/or board of managers, and, if necessary, the resolution of the partners, stockholders or members, as applicable, of such Initial Credit Party, authorizing the execution, delivery and performance of the Operative Documents to which such Initial Credit Party is a party and the transactions contemplated hereby.

(g) Delivery of Pledged Shares. The Company shall have delivered to the Collateral Agent the original certificates representing the pledged securities as required under the Company Security Agreements.

(h) Letter of Direction. The Company shall have executed and delivered to the Purchasers on or before the Closing Date letters of direction providing payment instructions with regard to the amounts payable by Purchasers in cash pursuant to Section 2.2.

(i) Solvency Matters. The Company shall have delivered to the Purchasers on or before the Closing Date a solvency certificate executed by the chief financial officer of the Initial Credit Parties, dated the Closing Date and in a form and substance reasonably acceptable to the Purchasers.

(j) Financial Performance. No change in the financial condition or operations of any Initial Credit Party, shall have occurred since the date of the Last Audited Financial Statements which could reasonably be expected to have a Material Adverse Effect, as determined by the Purchasers in their reasonable discretion.

(k) Legal Opinion. The Initial Credit Parties shall have delivered to the Purchasers on or before the Closing Date opinions of Raines Feldman LLP, U.S. counsel to the Credit Parties, and Cassels Brock & Blackwell LLP, as Canadian counsel to the Credit Parties, in each case addressed to the Purchasers dated as of the Closing Date in a form and substance acceptable to the Purchasers and their counsel.

(l) Representations and Warranties. The representations and warranties of the Initial Credit Parties contained in ARTICLE V hereof and in the other Operative Documents shall be true and correct when made, and shall be true and correct as of the Closing Date as if made on the Closing Date (except to the extent expressly made as of a prior date, in which case such representations and warranties shall be true and correct as of such earlier date).

(m) Performance. All covenants, agreements and conditions of the Initial Credit Parties contained in the Operative Documents to be performed or complied with by the Initial Credit Parties at or prior to the Closing Date, shall have been performed or complied with or otherwise waived in writing by the Purchasers.

(n) Proceedings and Documents. (i) All corporate and other proceedings in connection with the transactions contemplated by the Operative Documents, and all agreements, documents and instruments incident to such transactions, shall be reasonably satisfactory in form and substance to the Purchasers, and (ii) the Purchasers shall have received at or prior to the Closing certified, executed copies of all such legal documents or proceedings taken in connection with the consummation of the transactions as the Purchasers shall have reasonably requested.

(o) Qualifications. All authorizations, approvals or permits of, or filings with any Governmental Authority that are required by Law in connection with the lawful sale and issuance of the Notes and Warrants shall have been duly obtained by the Initial Credit Parties, and shall be effective on and as of the Closing.

(p) Consents. Each Initial Credit Party shall have received on or before the Closing Date in writing any consents required of third parties for the consummation of the transactions contemplated by the Operative Documents pursuant to any Law, contract, agreement or instrument by which such Initial Credit Party is bound or to which either of them is subject.

(q) Expenses. The Company shall have paid to the Purchasers all fees, costs and expenses that the Company is obligated to pay as of the Closing Date pursuant to Section 7.14.

(r) Other Documents. Such other approvals, operations, documents or materials as the Purchasers may reasonably request.

4.2 Tranche 1-B Advance. The Purchasers shall make the Tranche 1-B Advance, subject to the fulfillment on or prior to the Tranche 1-B Funding Date of each of the following conditions, in each case, in a manner, form and substance reasonably satisfactory to the Purchasers:

(a) The Credit Parties shall have caused the Subsequent Credit Parties to satisfy the requirements applicable to Subsequent Credit Parties under Section 7.20;

(b) The representations and warranties of the Credit Parties contained in ARTICLE V hereof and in the other Operative Documents shall be true and correct as of the applicable Funding Date as if made on the applicable Funding Date (except to the extent expressly made as of a prior date, in which case such representations and warranties shall be true and correct as of such earlier date), with exceptions to the foregoing being disclosed to the Purchasers in the form of updated Schedules to this Agreement; provided that any such exception does not represent a change occurring since the Closing Date, or an event or circumstance which the Credit Parties failed to disclose in the Schedules hereto on the Closing Date, that in either event has resulted or could reasonably be expected to result in a Material Adverse Effect;

(c) No Event of Default shall have occurred and be continuing, or would result from, the making of the applicable Advance or from the application of proceeds therefrom;

(d) The Credit Parties shall execute and deliver to the Purchasers an updated Perfection Certificate on or before the Tranche 1-B Funding Date;

(e) the Borrowers shall have executed and delivered Tranche 1-B Notes to the Purchasers;

(f) the Company shall have executed and delivered the Tranche 1-B Warrants to the Purchasers on or before the Tranche 1-B Funding Date; and

(g) The Company and the other Borrowers shall have executed and delivered to the Purchasers a certificate executed by a Responsible Officer of the Company and the other Borrowers, dated as of the Tranche 1-B Funding Date, as to the satisfaction of the applicable conditions set forth in this Section 4.2.

(h) Notwithstanding anything to the contrary contained herein or in any other Operative Document, in the event the Purchasers fail to fund the Tranche 1-B Advance on or before the Tranche 1-B Funding Date, the following provisions shall apply:

4.3 Tranches 2 and 3 Advances. The Purchasers shall make the Tranche 2 Advance and Tranche 3 Advance subject to the fulfillment on or prior to the applicable Funding Date of each of the following conditions, as applicable to each such Advance, in each case, in a manner, form and substance reasonably satisfactory to the Purchasers:

(a) The Tranche 3 Funding Date shall be no later than thirty (30) days after the Second Amendment Effective Date, subject in any event to the conditions set forth in all subsections of Section 4.3 which are applicable to all Advances or specifically to the Tranche 3 Advance;

(b) The Borrowers and the Company, respectively, shall have delivered the Tranche 2 Notes and Tranche 2 Warrants to the Purchasers on the Tranche 2 Funding Date, and the Tranche 3 Notes and Tranche 3 Warrants to the Purchasers on the Tranche 3 Funding Date;

(c) The representations and warranties of the Credit Parties contained in ARTICLE V hereof and in the other Operative Documents shall be true and correct as of the applicable Funding Date as if made on the applicable Funding Date (except to the extent expressly made as of a prior date (other than the Closing Date, which shall be read to be the Funding Date), in which case such representations and warranties shall be true and correct as of such earlier date), with exceptions to the foregoing being disclosed to the Purchasers in the form of updated Schedules to this Agreement; provided that any such exception does not represent a change occurring since the Closing Date, or an event or circumstance which the Credit Parties failed to disclose in the Schedules hereto on the Closing Date, that has resulted or could reasonably be expected to result in a Material Adverse Effect;

(d) Each Credit Party shall have performed and complied with all of the terms, covenants, agreements and conditions to be performed or complied with by it on or prior to the applicable Funding Date (other than any failure to perform or comply with such terms, covenants, agreements and conditions which the Purchasers have waived in writing), and, to the extent that any schedules hereto are incomplete or inaccurate as of the applicable Funding Date, the Credit Parties shall deliver updated schedules;

(e) No Default or Event of Default shall have occurred and be continuing, or would result from, the making of the applicable Advance or from the application of proceeds therefrom;

(f) To the extent that the Perfection Certificate last delivered to Purchasers by the Credit Parties is incomplete or inaccurate as of the applicable Funding Date, the Credit Parties shall execute and deliver to the Purchasers an updated Perfection Certificate on or before the applicable Funding Date;

(g) The Company and the other Borrowers shall have executed and delivered to the Purchasers a certificate executed by a Responsible Officer of the Company and the other Borrowers, dated as of the applicable Funding Date, as to the satisfaction of the applicable conditions set forth in this Section 4.3; and

4.4 Tranche 4 Advance. The Purchasers shall make the Tranche 4 Advance subject to the fulfillment of each of the following conditions on or prior to the Tranche 4 Funding Date in a manner, form and substance reasonably satisfactory to the Gotham Purchasers:

(a) The CRO shall have been duly appointed as an officer of the Company and its Subsidiaries, effective on or prior to the Restatement Closing Date, and be serving in such capacity as of such date;

(b) The Borrowers and the Company shall have delivered the Fee Letter and Interest Escrow Agreement to the Purchasers, duly executed by the Borrowers and the Company, on or prior to the Restatement Closing Date;

(c) The Borrowers and the Company, respectively, shall have delivered on the Tranche 4 Funding Date the Amended and Restated Notes and Tranche 4 Warrants, duly executed by the Borrowers and the Company, respectively, to the Purchasers who fund the Tranche 4 Advance;

(d) The Company shall have delivered on the Tranche 4 Funding Date the Tranche 4 Replacement Warrants to the Existing Purchasers on a pro rata basis with respect to the Funded Amount of the Existing Notes then held by such Existing Purchasers (as of immediately prior to the issuance of the Amended and Restated Notes);

(e) The Credit Parties shall have delivered the Reaffirmation Agreement to the Holders and the Collateral Agent, duly executed by the Credit Parties, on or prior to the Restatement Closing Date;

(f) The Credit Parties shall have delivered to the Purchasers copies of each of the following on or before the Restatement Closing Date, in each case, certified to be in full force and effect on the Restatement Closing Date or unchanged since the last copy certified as required under this Agreement, in each case by the general partner, secretary, assistant secretary or other officer or manager of such Credit Party and in form and substance satisfactory to the Purchasers:

(i) the certificate of incorporation or certificate of formation, as applicable, of such Credit Party as of the Restatement Closing Date, certified by the Secretary of State of the State under the laws of which such Credit Party is incorporated or organized as of a recent date prior to the Restatement Closing Date;

(ii) the limited partnership agreement, by-laws or operating agreement, as applicable, of such Credit Party as of the Restatement Closing Date; and

(iii) resolutions of the general partner, board of directors and/or board of managers, and, if necessary, the resolution of the partners, stockholders or members, as applicable, of such Credit Party, authorizing the execution, delivery and performance of the Operative Documents to which such Credit Party is a party and the transactions contemplated hereby.

(g) The representations and warranties of the Credit Parties contained in ARTICLE V hereof and in the other Operative Documents shall be true and correct as of the Restatement Closing Date as if made on the Restatement Closing Date (except to the extent expressly made as of a prior date (other than the Closing Date, which shall be read to be the Restatement Closing Date), in which case such representations and warranties shall be true and correct as of such earlier date), with exceptions to the foregoing being disclosed to the Purchasers in the form of updated Schedules to this Agreement; provided that any such exception does not represent a change occurring since the Closing Date, or an event or circumstance which the Credit Parties failed to disclose in the Schedules hereto on the Closing Date, that has resulted or could reasonably be expected to result in a Material Adverse Effect;

(h) Each Credit Party shall have performed and complied with all of the terms, covenants, agreements and conditions to be performed or complied with by it on or prior to the Restatement Closing Date (other than any failure to perform or comply with such terms, covenants, agreements and conditions which the Purchasers have waived in writing), and, to the extent that any schedules hereto are incomplete or inaccurate as of the Restatement Closing Date, the Credit Parties shall deliver updated schedules;

(i) No Default or Event of Default shall have occurred and be continuing (in the case of a Default under Section 7.19(a), assuming that the Tranche 4 Advance has been made), or would result from, the making of the Tranche 4 Advance or from the application of proceeds therefrom;

(j) To the extent that the Perfection Certificate last delivered to Purchasers by the Credit Parties is incomplete or inaccurate as of the Restatement Closing Date, the Credit Parties shall execute and deliver to the Purchasers an updated Perfection Certificate on or before the Restatement Closing Date;

(k) The Company and the other Borrowers shall have executed and delivered to the Purchasers a certificate executed by a Responsible Officer of the Company and the other Borrowers, dated as of the Restatement Closing Date, as to the satisfaction of the applicable conditions set forth in this Section 4.4; and

(l) The Tranche 4 Advance shall be funded into an account owned by a Borrower which is subject to a Control Agreement in form and substance reasonably acceptable to the Collateral Agent for the purpose of holding the Tranche 4 Advance and Incremental Advances and disbursing the proceeds thereof only in accordance with the Interim Budget or Turnaround Plan, as applicable (the “Restricted Account”), subject to the Interest Escrow Agreement.

4.5 Incremental Advances. No later than each Outside Incremental Funding Date, the Incremental Purchasers shall make the respective Incremental Advance subject to the fulfillment on or prior to the applicable Incremental Funding Date of each of the following conditions, as applicable to each such Incremental Advance, in each case, in a form and substance reasonably satisfactory to the Gotham Purchasers: Prior to the second Incremental Advance, the Turnaround Plan shall have been approved by the board of directors of the Company and the Gotham Purchasers, acting reasonably, and not been withdrawn or amended without the Gotham Purchasers’ prior written consent, not to be unreasonably withheld or delayed, and prior to any other Incremental Advance, the Company shall have provided evidence satisfactory to the Gotham Purchasers, acting reasonably, that the Turnaround Plan has been and is being implemented and that the Credit Parties have not expended proceeds of any Incremental Advance other than in accordance with the Interim Budget or Turnaround Plan, as applicable (for the avoidance of doubt, finalization and approval of the Turnaround Plan are not conditions to the Purchasers making the first Incremental Advance);

(b) The Borrowers and the Company, respectively, shall have delivered the relevant Incremental Notes and Incremental Warrants to the Incremental Purchasers who participate in the relevant Incremental Advance on the relevant Incremental Funding Date;

(c) The Company shall have delivered the relevant Incremental Replacement Warrants to the Existing Purchasers on each Incremental Funding Date on a pro rata basis with respect to the Funded Amount of the Existing Notes Principal evidenced by the Amended and Restated Notes then held by such Existing Purchasers; provided, however, that the Company shall not be required to issue any Incremental Replacement Warrants if, prior to the relevant Incremental Funding Date, the parties agreed that the Retail Cash Flow Milestone was achieved in accordance with the Incremental Replacement Warrants outstanding immediately prior to such date;

(d) The Gotham Purchasers, the Company and Borrowers shall have updated Schedule 1.1(d) to reflect (i) all amendments to the Amended and Restated Notes and Existing Warrants resulting from each Incremental Advance and (ii) the issuance of Incremental Notes, Incremental Warrants and Incremental Replacement Warrants;

(e) The representations and warranties of the Credit Parties contained in ARTICLE V hereof and in the other Operative Documents shall be true and correct as of the applicable Incremental Funding Date as if made on the applicable Incremental Funding Date (except to the extent expressly made as of a prior date (other than the Closing Date, which shall be read to be the applicable Incremental Funding Date), in which case such representations and warranties shall be true and correct as of such earlier date), with exceptions to the foregoing being disclosed to the Purchasers in the form of updated Schedules to this Agreement; provided that any such exception does not represent a change occurring since the Closing Date, or an event or circumstance which the Credit Parties failed to disclose in the Schedules hereto on the Closing Date, that has resulted or could reasonably be expected to result in a Material Adverse Effect;

(f) Each Credit Party shall have performed and complied with all of the terms, covenants, agreements and conditions to be performed or complied with by it on or prior to the applicable Incremental Funding Date (other than any failure to perform or comply with such terms, covenants, agreements and conditions which the Purchasers have waived in writing), and, to the extent that any schedules hereto are incomplete or inaccurate as of the applicable Incremental Funding Date, the Credit Parties shall deliver updated schedules;

(g) No Default or Event of Default shall have occurred and be continuing (in the case of a Default under Section 7.19(a), assuming that the applicable Incremental Advance has been made), or would result from, the making of the applicable Incremental Advance or from the application of proceeds therefrom;

(h) To the extent that the Perfection Certificate last delivered to Purchasers by the Credit Parties is incomplete or inaccurate as of the applicable Incremental Funding Date, the Credit Parties shall execute and deliver to the Purchasers an updated Perfection Certificate on or before the applicable Incremental Funding Date;

(i) The Company and the other Borrowers shall have executed and delivered to the Purchasers a certificate executed by a Responsible Officer of the Company and the other Borrowers, dated as of the applicable Incremental Funding Date, as to the satisfaction of the applicable conditions set forth in this Section 4.5; and

(j) Each Incremental Advance shall be funded into the Restricted Account.

4.6 Second Restatement Closing. The waivers of the Existing Defaults as set forth in Section 3.3 and the amendments contemplated hereby shall become effective subject to the fulfillment of each of the following conditions on or prior to the Second Restatement Closing Date in a manner, form and substance reasonably satisfactory to the Gotham Purchasers:

(a) The Credit Parties shall have delivered this Agreement and the Second Restatement Operative Documents to the Holders and the Collateral Agent, duly executed by the Borrowers and the Credit Parties, on or prior to the Second Restatement Closing Date;

(b) The Borrowers shall have delivered on the Second Restatement Closing Date the 2020 Amendment Fee Notes, duly executed by the Borrowers and the Company, respectively, to the Purchasers;

(c) The Company shall have delivered copies of the Hankey Amendment Documents and Treehouse Amendment Documents, duly certified as true, accurate and complete copies thereof by a Responsible Officer of the Company;

(d) The Credit Parties shall have paid or reimbursed the Purchasers and Collateral Agent for all fees and expenses incurred by the Purchasers and Collateral Agent on or prior to the Second Restatement Closing Date which are payable or reimbursable by the Company under the Operative Documents and which have not yet been paid;

(e) The Credit Parties shall have delivered to the Purchasers copies of each of the following on or before the Second Restatement Closing Date, in each case, certified to be in full force and effect on the Second Restatement Closing Date or unchanged since the last copy certified as required under this Agreement, in each case by the general partner, secretary, assistant secretary or other officer or manager of such Credit Party and in form and substance satisfactory to the Purchasers:

(i) the certificate of incorporation or certificate of formation, as applicable, of such Credit Party as of the Second Restatement Closing Date, certified by the Secretary of State of the State under the laws of which such Credit Party is incorporated or organized as of a recent date prior to the Second Restatement Closing Date;

(ii) the limited partnership agreement, by-laws or operating agreement, as applicable, of such Credit Party as of the Second Restatement Closing Date; and

(iii) resolutions of the general partner, board of directors and/or board of managers, and, if necessary, the resolution of the partners, stockholders or members, as applicable, of such Credit Party, authorizing the execution, delivery and performance of the Second Restatement Operative Documents and the 2020 Amendment Fee Notes to which such Credit Party is a party and the transactions contemplated hereby.

(f) The representations and warranties of the Credit Parties contained in ARTICLE V hereof and in the other Operative Documents shall be true and correct as of the Second Restatement Closing Date as if made on the Second Restatement Closing Date (except to the extent expressly made as of a prior date (other than the Closing Date or Restatement Closing Date, which shall be read to be the Second Restatement Closing Date), in which case such representations and warranties shall be true and correct as of such earlier date), with exceptions to the foregoing being disclosed to the Purchasers in the form of updated Schedules to this Agreement; provided that any such exception does not represent a change occurring since the Closing Date or Restatement Closing Date, as applicable or an event or circumstance which the Credit Parties failed to disclose in the Schedules hereto on the Closing Date or Restatement Closing Date, as applicable, that has resulted or could reasonably be expected to result in a Material Adverse Effect;

(g) Each Credit Party shall have performed and complied with all of the terms, covenants, agreements and conditions to be performed or complied with by it on or prior to the Second Restatement Closing Date (other than any failure to perform or comply with such terms, covenants, agreements and conditions which the Purchasers have waived in writing), and, to the extent that any schedules hereto are incomplete or inaccurate as of the Second Restatement Closing Date, the Credit Parties shall deliver updated schedules;

(h) After giving effect to the Purchasers’ waiver of the Existing Defaults granted on the Second Restatement Closing Date and the amendments contemplated in this Agreement, the Hankey Amendment Documents and the Treehouse Amendment Documents, no Default or Event of Default shall have occurred and be continuing, or would result from, the parties execution, delivery or performance of this Agreement, the Second Restatement Operative Documents, the Hankey Amendment Documents or the Treehouse Amendment Documents;

(i) To the extent that the Perfection Certificate last delivered to Purchasers by the Credit Parties is incomplete or inaccurate as of the Second Restatement Closing Date, the Credit Parties shall execute and deliver to the Purchasers an updated Perfection Certificate on or before the Second Restatement Closing Date; and

(j) The Company and the other Borrowers shall have executed and delivered to the Purchasers a certificate executed by a Responsible Officer of the Company and the other Borrowers, dated as of the Second Restatement Closing Date, as to the satisfaction of the applicable conditions set forth in this Section 4.6.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE CREDIT PARTIES

Each Credit Party hereby represents and warrants to the Purchasers as set forth below, and acknowledges that the Purchasers are entering into this Agreement and the other Operative Documents in reliance on the truth and accuracy of such representations and warranties. For purposes of this Agreement, except as otherwise specifically provided in this Agreement, all representations and warranties in this ARTICLE V shall be deemed to be made on the Closing Date.

5.1 Existence and Power. Each Credit Party: (a) is a corporation, limited liability company or limited partnership, as applicable, duly organized, validly existing and in good standing under the laws of the jurisdiction in which it was incorporated, amalgamated, continued, formed or organized as the case may be; (b) has the corporate, limited liability company or limited partnership (as applicable) power and capacity and all governmental licenses, authorizations, consents and approvals to (i) own its assets and properties and carry on its business in each jurisdiction in which the conduct of its business or the ownership, leasing or operation of its property and assets requires such qualification (except where the failure to do so would not reasonably be expected to have a Material Adverse Effect), and (ii) execute, deliver, and perform its obligations under, the Operative Documents to which it is a party; and (c) is in compliance in all material respects with all Laws other than Excluded Laws.

5.2 Authorization; No Contravention; Equity Interests.

(a) The execution, delivery and performance by each Credit Party of this Agreement, and by each Credit Party of each other Operative Document to which such Person is a party, have been duly authorized by all necessary corporate, partnership or limited liability company action, as applicable, and do not: (i) contravene the terms of any of such Person’s Organization Documents; (ii) conflict with or result in any breach or contravention of any document evidencing any Contractual Obligation to which such Person is a party, except where such conflict, breach or contravention would not reasonably be expected to result in a Material Adverse Effect; (iii) conflict with or result in any breach or contravention of any order, injunction, writ or decree of any Governmental Authority to which such Person or its Property is subject; (iv) violate any Law applicable to such Credit Party; or (v) result in the creation of any Lien on any asset or property of any Credit Party, other than Liens in favor of the Collateral Agent for the benefit of the Holders.

(b) As of the Closing Date, Schedule 5.2 sets forth the authorized and issued securities of each Credit Party and each Subsidiary after giving effect to the consummation of the transactions contemplated by this Agreement. All issued and outstanding securities of each Credit Party and each Subsidiary (to the extent applicable) are duly authorized and validly issued and fully paid, and where applicable, non-assessable, and (excluding any Permitted Liens or Liens with respect to Excluded Subsidiaries) free and clear of all Liens other than Permitted Liens, and such securities were issued in compliance with all applicable state, provincial and federal laws concerning the issuance of securities. As of the Closing Date, (i) all of the issued and outstanding securities of each Credit Party and each Subsidiary other than the Company and Holdings, are owned by the Credit Parties or their Subsidiaries in the amounts set forth on Schedule 5.2 and (ii) the total amount, but specifying the class, series or type, as applicable, of issued and outstanding securities of the Company and Holdings are set forth on Schedule 5.2, along with a list of all Persons who, whether individually or in a group of Affiliated Persons, to the Company’s knowledge, beneficially own more than ten percent (10%) of the voting rights attached to the issued and outstanding securities of the Company or Holdings. As of the Closing Date, except as set forth on Schedule 5.2, there are no pre-emptive or other outstanding rights, options, warrants, conversion rights or other similar agreements or understandings for the purchase or acquisition of any shares of any such Person.

5.3 Governmental Authorization. No action, consent or approval of, registration or filing with or any other action by any Governmental Authority is or will be required in connection with the execution, delivery, and performance of its obligations under, the Operative Documents to which it is a party, the receipt of the extensions of credit hereunder, the performance by the Credit Parties of the Operative Documents, the perfection or maintenance of the Liens created under the Security Agreement or the exercise by the Holders of their rights under the Operative Documents or remedies in respect of the Collateral, except for (a) the filing of Uniform Commercial Code financing statements (with respect to Credit Parties formed in the U.S.) and filings under the Personal Property Security Act (with respect to Credit Parties formed in Canada), (b) recordation of Mortgages, (c) such as have been made or obtained and are in full force and effect or is reasonably expected to be timely made or obtained and be in full force and effect, (d) such actions, consents and approvals the failure of which to be obtained or made would not reasonably be expected to have a Material Adverse Effect, (e) filings or other actions listed on Schedule 5.3, and (e) as may be limited by any Excluded Laws. Each Credit Party and each Subsidiary is in compliance with all Laws, orders, regulations and ordinances of all Governmental Authorities relating to its business, operations and assets, except where the failure to comply therewith, either individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.

5.4 Binding Effect. Each Operative Document to which any Credit Party or Subsidiary is a party constitutes the legal, valid and binding obligations of each Credit Party and each Subsidiary that is a party thereto, enforceable against such Person in accordance with their respective terms, except as enforceability may be limited by Excluded Laws or applicable Debtor Relief Laws or by equitable principles relating to enforceability.

5.5 Litigation. Except as set forth on Schedule 5.5, (a) there are no actions, suits, judgments, investigations, inquires or proceedings of any kind whatsoever outstanding (whether or not purportedly on behalf of any such Person), or, to the knowledge of the Company, pending or threatened, against or affecting any Credit Party or any of their respective directors or officers, at law or in equity or before or by any Governmental Authority of any kind whatsoever and, to the knowledge of the Company, there is no basis therefor, and none of the Credit Parties is subject to any judgment, order, writ, injunction, decree, award, rule, policy or regulation of any Governmental Authority which in the case of any of the foregoing, either individually or in the aggregate, could reasonably be expected to have Material Adverse Effect or could materially and adversely affect the ability of the Company or any Credit Party to perform its obligations under any Operative Document; and (b) to the Company’s knowledge, there are no actions, suits, judgments, investigations, inquires or proceedings of any kind whatsoever outstanding (whether or not purportedly on behalf of any such Person), or, to the knowledge of the Company, pending or threatened, against or affecting any Cannabis License Holder or any of their respective directors or officers, at law or in equity or before or by any Governmental Authority of any kind whatsoever and, to the knowledge of the Company, there is no basis therefor, and, to the Company’s knowledge, none of the Cannabis License Holders is subject to any judgment, order, writ, injunction, decree, award, rule, policy or regulation of any Governmental Authority which, either separately or in the aggregate, could reasonably be expected to have Material Adverse Effect, could adversely affect the ability of the Cannabis License Holder to perform its obligations under any Material Agreement in any material respect, could result in the revocation or modification of any certificate, authority, Cannabis License or other Permit necessary to conduct the business now owned or operated by any such Person which, if the subject of an unfavorable decision, ruling or finding could reasonably be expected to have a Material Adverse Effect and, to the knowledge of the Company, no such legal or governmental proceedings or inquiries have been threatened against or are contemplated with respect to any Credit Party or their property or assets which, either separately or in the aggregate, could reasonably be expected to have Material Adverse Effect. No injunction, writ, temporary restraining order or any order of any nature has been issued by any court or other Governmental Authority purporting to enjoin or restrain the execution, delivery or performance of this Agreement, any other Operative Document or directing that the transactions provided for herein or therein not be consummated as herein or therein provided.

5.6 Compliance with Laws.

(a) Neither any Credit Party nor any Subsidiary or their respective properties or assets is in violation of (nor will the continued operation of their material properties and assets as currently conducted violate) any Law (other than any Excluded Law) or any restriction of record or agreement affecting any Mortgaged Property, or is in default with respect to any judgment, writ, injunction or decree of any Governmental Authority, where such violation or default could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

(b) The Company is a reporting issuer in good standing under the Canadian Securities Laws and is in material compliance with the requirements of such Canadian Securities Laws and is not included in a list of defaulting issuers maintained by the Securities Commissions. The outstanding Shares are listed and posted for trading on the CSE, and all necessary notices and filings have been made or will be made with, the CSE to ensure that the Shares to be issued as described in the Operative Documents, including, without limitation, the Shares issuable upon conversion of the Notes and exercise of the Warrants, will be listed and posted for trading on the CSE upon their issuance.

(c) No order, ruling or determination having the effect of suspending the sale or ceasing the trading in any securities of the Credit Party has been issued by any regulatory authority and is continuing in effect and no proceedings for that purpose have been instituted or are pending or, to the knowledge of the Company, are contemplated or threatened by any Governmental Authority.

(d) The Company is in compliance in all material respects with its continuous and timely disclosure obligations under applicable Securities Laws and the policies of the CSE or any other exchange on which the Shares are traded, and has filed all documents required to be filed by it with the Securities Commissions under applicable Securities Laws, and no document has been filed on a confidential basis with the Securities Commissions that remains confidential at the date hereof. None of the documents filed in accordance with applicable Canadian Securities Laws contained, as at the date of filing thereof, a misrepresentation.

(e) No Securities Commission, stock exchange or comparable authority has issued any order preventing the distribution of the Shares nor instituted proceedings for that purpose, nor is any such proceeding pending, and, to the knowledge of the Company, no such proceedings are pending or contemplated.

(f) Neither the Company nor any of its Subsidiaries, any employee or agent thereof, has made any unlawful contribution or other payment to any official of, or candidate for, any federal, state, provincial or foreign office, or failed to disclose fully any contribution, in violation of any law, or made any payment to any foreign, Canadian, governmental officer or official, or other Person charged with similar public or quasi-public duties, other than payments required or permitted by applicable Laws.

(g) The Company has provided to the Purchasers copies of all Cannabis Licenses and other Permits to the extent requested by the Purchasers. Each Credit Party, each of its Subsidiaries and, to the Company’s knowledge, each Cannabis License Holder is in compliance in all material respects with all Cannabis Laws that are applicable to such Person and its businesses and all Cannabis Licenses. None of the Credit Parties, no Subsidiary and, to the Company’s knowledge, no Cannabis License Holder or their respective properties or assets is in violation of (nor will the continued operation of their material properties and assets as currently conducted violate) any Cannabis Law in any material respect, or is in default with respect to any judgment, writ, injunction or decree of any Governmental Authority with respect to any Cannabis Law in any material respect. Neither any Credit Party nor any Subsidiary has received any notice or communication from any Person or Governmental Authority in the United States or any state or municipality thereof alleging a material defect, default, violation, breach or claim in respect of any of its or their Cannabis Licenses. To the knowledge of the Company, all product research and development activities, including quality assurance, quality control, testing, and research and analysis activities, conducted by any Credit Party, any Subsidiary, and, to the Company’s knowledge, any Cannabis License Holder, in connection with their business is being conducted in compliance, in all material respects, with all industry, laboratory safety, management and training standards applicable to its current and proposed business, and all such processes, procedures and practices, required in connection with such activities are in place as necessary and are being complied with, in all material respects.

(h) The Company, each other Credit Party, each Subsidiary and, to the Company’s knowledge, each Cannabis License Holder has security measures and safeguards in place to protect personal information it collects from registered patients and customers and other parties from illegal or unauthorized access or use by its personnel or third parties or access or use by its personnel or third parties in a manner that violates the privacy rights of third parties. The Company, the Credit Parties and, to the knowledge of the Company, each Cannabis License Holder, have complied, in all material respects, with all applicable privacy and consumer protection legislation and none has collected, received, stored, disclosed, transferred, used, misused or permitted unauthorized access to any information protected by privacy laws, whether collected directly or from third parties, in an unlawful manner.

5.7 No Event of Default. No Event of Default exists or would result from the issuance of the Notes or the incurrence of any other Obligations by any Credit Party. Neither any Credit Party nor any Subsidiary is in default under or with respect to any Contractual Obligation which, individually or together with all such defaults, could reasonably be expected to have a Material Adverse Effect. No Credit Party knows of any dispute regarding any Contractual Obligation of any Credit Party or Subsidiary that could reasonably be expected to have a Material Adverse Effect. In addition to the foregoing, the Credit Parties hereby represent and warrant that they have no knowledge of any Defaults or Events of Default as of the Second Restatement Closing Date other than those that have been disclosed by the Credit Parties to the Holders prior to the Second Restatement Closing Date.

5.8 ERISA/Canadian Pension Plan Compliance. No steps have been taken to terminate any Pension Plan or any Canadian Pension Plan. No contribution failure under Section 430 of the Code, Section 303 of ERISA or the terms of any Pension Plan has occurred with respect to any Pension Plan sufficient to give rise to a Lien under Section 303(k) of ERISA or Section 430(k) of the Code. The minimum funding standard under Section 412(a) of the Code and Section 302(a) of ERISA has been met with respect to each Pension Plan and the equivalent funding requirements and other assessments under applicable Canadian federal and provincial Laws have been met and paid with respect to each Canadian Pension Plan, and no condition exists or event or transaction has occurred with respect to any Pension Plan or Canadian Pension Plan which could reasonably be expected to result in the incurrence by any Credit Party of any material liability, fine or penalty. All contributions (if any) have been made to any Multiemployer Pension Plan that are required to be made by any Credit Party or any other member of the Controlled Group under the terms of the plan or of any collective bargaining agreement or by applicable law; neither any Credit Party nor any member of the Controlled Group has withdrawn or partially withdrawn from any Multiemployer Pension Plan, incurred any withdrawal liability with respect to any such plan or received notice of any claim or demand for withdrawal liability or partial withdrawal liability from any such plan, and no condition has occurred which, if continued, could reasonably be expected to result in a withdrawal or partial withdrawal from any such plan, and neither any Credit Party nor any member of the Controlled Group has received any notice that that increased contributions may be required to any Multiemployer Pension Plan to avoid a reduction in plan benefits or the imposition of any excise tax, that any such plan is or has been funded at a rate less than that required under Sections 412 or 431 of the Code, that any such plan is or may be terminated, or that any such plan is or may become insolvent.

5.9 Use of Proceeds; Margin Regulations. The proceeds of the Notes are intended to be and shall be used solely for the purposes set forth in and permitted by Section 7.10, and are intended to be and shall be used in compliance with this Agreement. Neither any Credit Party nor any Subsidiary is generally engaged in the business of purchasing or selling Margin Stock or extending credit for the purpose of purchasing or carrying Margin Stock. Proceeds of the Notes shall not be used for the purpose of purchasing or carrying Margin Stock.

5.10 Title to Properties.

(a) As of (i) the Closing Date, (ii) the date on which any Material Real Property is acquired or leased by any Credit Party or a Subsidiary and (iii) the applicable date of the delivery of each Mortgage, each of the Credit Parties has or will have, excluding any option or other obligation to sell under the Treehouse REIT Documents, (A) good and marketable fee simple title to, or valid leasehold interests in, or easements or other limited property interests in, all its Material Real Properties and (B) good title to its personal property and assets, in each case, except for Permitted Liens. The Mortgaged Properties are free from defects that materially adversely affect, or could reasonably be expected to materially adversely affect, the Mortgaged Properties’ suitability, taken as a whole, for the purposes for which they are contemplated to be used (as contemplated under the Operative Documents). Each parcel of real property and the use thereof (as contemplated under the Operative Documents) complies in all material respects with all applicable Laws (including building and zoning ordinances and codes, but excluding Excluded Laws) and with all insurance requirements except such failure which could not reasonably be expected to have a Material Adverse Effect.

(b) (i) Each Credit Party has complied in all material respects with all obligations under all material leases to which it is a party, (ii) all leases to which it is a party are legal, valid, binding and in full force and effect and are enforceable in accordance with their terms, except where such failure could not reasonably be expected to have a Material Adverse Effect, and (iii) neither any Credit Party nor any of its Subsidiaries has defaulted, or with the passage of time would be in default, under any leases to which it is a party, except for such defaults as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. Each Credit Party enjoys peaceful and undisturbed possession under the leases to which it is a party, except for leases in respect of which the failure to enjoy peaceful and undisturbed possession could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. No claim is being asserted or, to the knowledge of the Company, threatened, with respect to any lease payment under any lease other than any such Lien or claim that could not reasonably be expected to have a Material Adverse Effect.

(c) None of the Credit Parties have received any written notice of, nor is there, to the knowledge of Company, any pending, threatened or contemplated condemnation proceeding affecting any portion of the Mortgaged Properties in any material respect or any sale or disposition thereof in lieu of condemnation.

(d) None of the Credit Parties is obligated under any right of first refusal, option or other contractual right to sell, assign or otherwise dispose of any Mortgaged Property or any interest therein, other than as set forth in the Treehouse REIT Documents.

(e) Each Mortgaged Property is served by installed, operating and adequate water, electric, gas, telephone, sewer, sanity sewer, storm drain facilities and other public utilities necessary for the uses contemplated under the Operative Documents to the extent required by applicable Law, except such failure to be served that would not reasonably be expected to cause a Material Adverse Effect.

5.11 Taxes. Each Credit Party and each Subsidiary has filed all Tax returns and reports required to be filed, and has paid all Taxes, assessments, fees and other governmental charges levied or imposed upon it or its Properties, income or assets otherwise due and payable, except those which are being contested in good faith by appropriate proceedings diligently prosecuted and for which adequate reserves have been provided in accordance with IFRS or GAAP, as applicable. There is no Tax assessment proposed in writing by a Governmental Authority against any Credit Party or any Subsidiary that would, if the assessment were made, be reasonably expected to have a Material Adverse Effect.

5.12 Financial Condition.

(a) Credit Parties have delivered to the Purchasers the audited annual financial statements of the Company dated as of June 30, 2018 and June 29, 2019, respectively, including the statement of financial position and the related statements of operations and comprehensive loss as of and for the periods then ended (the “Last Audited Financial Statements”), and the unaudited quarterly financial statements of the Company dated as of December 29, 2019, including the statement of financial position and the related statements of operations and comprehensive loss as of and for the periods then ended (the “Last Unaudited Financial Statements” and, with the Last Audited Financial Statements, collectively, the “Company Historical Financial Statements”).

(b) The Company Historical Financial Statements have been prepared in accordance with IFRS consistently applied during the periods involved (except for normal recurring year-end adjustments (the effect of which will not, individually or in the aggregate, be material)). The Company Historical Financial Statements fairly present in all material respects the assets, liabilities and financial position of the Company and its results of operations and changes in financial position and cash flows as of the respective dates and for the periods specified, all in accordance with IFRS consistently applied during the periods involved. The Company Historical Financial Statements are consistent with the books and records of the Company, which books and records are accurate and complete in all material respects. The Company has made and kept true, correct and complete books and records and accounts, which accurately and fairly reflect, in reasonable detail, the activities of the Company in all material respects and which have been maintained in accordance with sound business practices and applicable law. There has been no material change in the accounting methods or practices of the Company since the earliest date covered by the Company Historical Financial Statements, except as disclosed therein or in subsequent financial statements forming part of the Company Public Disclosure Record.

(c) Since June 30, 2018, there has been no Material Adverse Effect.

(d) Neither any Credit Party nor any Subsidiary has any Indebtedness (other than Indebtedness permitted pursuant to Section 8.2) or any Contingent Obligations (other than Contingent Obligations permitted pursuant to Section 8.8) other than as set forth in the Last Unaudited Financial Statements. Pro forma consolidated statement of financial position of the Company and its Subsidiaries as of the Closing Date after giving effect to the issuance of the Notes (the “Pro Forma Balance Sheet”) but not any application of the proceeds have been delivered to the Purchasers. The Pro Forma Balance Sheet presents fairly in all material respects, the estimated financial position of the Company and the Subsidiaries in accordance with IFRS as of the Closing Date.

(e) The Company’s auditors, who audited the Last Audited Financial Statements (as applicable) and who provided their audit report thereon, are independent public accountants as required under applicable securities Laws and there has never been a reportable event (within the meaning of NI 51-102) between the Company and the Company’s auditors.

(f) Except as set forth in Schedule 5.12 or the Company Public Disclosure Record, none of the directors, officers or employees of the Company or any of its Subsidiaries or any person who owns, directly or indirectly, more than ten percent (10%) of any class of securities of the Company or Holdings or securities of any person exchangeable for more than ten percent (10%) of any class of securities of the Company or Holdings, or to the knowledge of the Company, any associate or affiliate of any of the foregoing had or has any material interest, direct or indirect, in any transaction or any proposed transaction with the Company or Holdings or any of either of their Subsidiaries.

5.13 Environmental Matters. The operations of each Credit Party and each Subsidiary comply in all respects with all Environmental Laws, except where the failure to comply therewith, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. Each Credit Party and each Subsidiary has obtained all licenses, permits, authorizations and registrations required under any Environmental Law (“Environmental Permits”) and necessary for its respective Ordinary Course of Business, all such Environmental Permits are in good standing, and each Credit Party and each Subsidiary is in compliance with all material terms and conditions of such Environmental Permits, except whether the failure to do so, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. Neither any Credit Party nor any Subsidiary, nor any of their respective Property or operations, is subject to any outstanding written order from or agreement with any Governmental Authority, or subject to any judicial or docketed administrative proceeding, respecting any Environmental Law, Environmental Claim or Hazardous Material. Neither any Credit Party nor any Subsidiary has received any written notice that alleges any of them is in violation of or potentially liable under any Environmental Laws which could reasonably be expected to have a Material Adverse Effect. There are no Hazardous Materials or other environmental conditions or circumstances existing with respect to any real Property owned, leased or operated by any Credit Party or any Subsidiary, or, to each Credit Party’s knowledge, arising from operations thereon prior to the Closing Date, except where such Hazardous Materials or other environmental conditions or circumstances, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. In addition, neither any Credit Party nor any Subsidiary has any underground storage tanks that are (a) not properly registered or permitted under applicable Environmental Laws or (b) to each Credit Party’s knowledge, leaking or releasing Hazardous Materials, except where such failure to register, leaks or releases of Hazardous Materials could not reasonably be expected to have a Material Adverse Effect.

5.14 Operative Documents. All representations and warranties of each Credit Party or any other party (other than the Purchasers and the Collateral Agent) to any Operative Document contained in any Operative Document are true and correct in all material respects (except to the extent such representations and warranties expressly refer to a specific date, in which case they are true and correct in all material respects as of such date).

5.15 Regulated Entities. None of any Credit Party, any Subsidiary or any Person controlling any such Person is (a) an “investment company” or required to be registered as an “investment company” within the meaning of the Investment Company Act of 1940; or (b) subject to regulation under the Federal Power Act, the Interstate Commerce Act, any state public utilities code, or any other Federal or state statute or regulation limiting its ability to incur Indebtedness.

5.16 Labor Relations. Except where any non-compliance could not reasonably be expected to have a Material Adverse Effect, (a) the Company and each of its Subsidiaries is in compliance with all Laws respecting employment and employment practices, terms and conditions of employment, pay equity and wages, including, without limitation, the U.S. Fair Labor Standards Act, and neither the Company nor any of its Subsidiaries has engaged in any unfair labour practice, (b) the Company and each of its Subsidiaries has complied with all applicable Laws relating to work authorization and immigration and (c) all payments due from the Company or any of its Subsidiaries on account of employee wages and health and welfare and other benefits insurance have been paid or accrued as a liability on the books of the relevant Person. Except as set forth in Schedule 5.16, there are no strikes, lockouts or other general labor disputes against any Credit Party or any Subsidiary, or, to each Credit Party’s knowledge, threatened against or affecting any Credit Party or any Subsidiary, and no significant unfair labor practice complaint is pending against any Credit Party or any Subsidiary or, to the knowledge of each Credit Party, threatened against any Credit Party or any Subsidiary before any Governmental Authority.

5.17 Copyrights, Patents, Trademarks and Licenses, Etc. Schedule 5.17 identifies as of the Closing Date (a) all material United States, state and foreign patents, trademarks, service marks, trade names and copyrights, and all registrations and applications for registration thereof and all licenses thereof, owned or held by any Credit Party or any Subsidiary (other than off-the- shelf licensed software), (b) any material licenses granted to third parties for the use of such intellectual property and (c) the jurisdictions in which such registrations and applications have been filed. Except as otherwise disclosed in Schedule 5.17, each Credit Party and each Subsidiary is the sole beneficial owner of, or has the right to use, free from any Lien (other than Liens in favor of the Collateral Agent for the benefit of the Holders) or other restrictions, claims, rights, encumbrances or burdens (other than customary restrictions in connection with commercially licensed software), the intellectual property identified on Schedule 5.17 and all other processes, designs, formulas, computer programs, computer software packages, trade secrets, inventions, product manufacturing instructions, technology, research and development, know-how and all other intellectual property that are necessary and material for the operation of each Credit Party’s and each Subsidiary’s businesses as being operated on the Closing Date. Each patent, trademark, service mark, trade name, copyright and license listed on Schedule 5.17 is in full force and effect. Except as set forth in Schedule 5.17, to the knowledge of each Credit Party (i) none of the present or contemplated products or operations of any Credit Party or any Subsidiary infringes upon any patent, trademark, service mark, trade name, copyright, license of intellectual property or other right owned by any other Person, and (ii) there is no pending or, to the knowledge of each Credit Party, threatened claim or litigation against or affecting any Credit Party or any Subsidiary contesting the right of any of them to manufacture, process, sell or use any such product or to engage in any such operation.

5.18 Subsidiaries. None of the Credit Parties owns any direct or indirect Subsidiaries or Equity Interests in any other Person other than those set forth on Schedule 5.18.

5.19 Brokers’ Fees; Transaction Fees. Neither any Credit Party nor any Subsidiary has any obligation to any Person in respect of any finder’s fee, broker’s commission or investment banker’s fee or other similar fee in connection with the transactions contemplated hereby, other than fees payable under any Operative Document or those set forth on Schedule 5.19.

5.20 Insurance. Each Credit Party and each Subsidiary and their respective Properties are insured with financially sound and reputable insurance companies which are not Affiliates of any Credit Party or any Subsidiary, in such amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar Properties in localities where any Credit Party or any Subsidiary operates. A true and complete listing of such insurance, including issuers, coverages and deductibles, has been provided to the Purchasers.

5.21 Material Facts Disclosed. None of the representations or warranties made by any Credit Party in the Operative Documents as of the date such representations and warranties were made or deemed made, and none of the statements contained in each exhibit, report, statement or certificate furnished by or on behalf of any Credit Party in connection with the Operative Documents (including offering and disclosure materials, if any, delivered by or on behalf of any Credit Party to the Purchasers prior to the Closing Date) contains any untrue statement of a material fact or omits any material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading as of the time when made or delivered in light of the circumstances at the time made; provided, that with respect to any forecasts or projections delivered to the Purchasers, each Credit Party represents only that such information was prepared in good faith based upon assumptions believed to be fair and reasonable at the time in light of current market conditions and that such forecasts or projections are not to be viewed as facts, and that the actual results during such period or periods covered by any such forecasts or projections may differ significantly from projected results.

5.22 Anti-Terrorism Laws. No Credit Party, nor to each Credit Party’s knowledge, any Affiliate of any Credit Party, or brokers or other agents of any such Person acting or benefiting in any capacity in connection with the Notes or other Obligations: (a) is in violation of any applicable Laws relating to terrorism or money laundering (“Anti-Terrorism Laws”), including Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001 (the “Executive Order”), and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56, signed into law October 26, 2001 (the “USA Patriot Act”); (b) is a Person: (i) that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order; (ii) that is owned or controlled by, or acting for or on behalf of, any Person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order; (iii) with which the Purchasers are prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law; (iv) that commits, threatens or conspires to commit or supports “terrorism” as defined in the Executive Order or has done so or plans to do so; or (v) that is named as a “specially designated national and blocked person” on the most current list published by the USA Treasury Department Office of Foreign Assets Control (“OFAC”) at its official website or any replacement website or other replacement official publication of such list; (c) conducts any business or engages in making or receiving any contribution of funds, goods or services to or for the benefit of any Person described in clause (b) above; (d) deals in, or otherwise engages in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order; or (e) engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law.

5.23 Solvency; Separate Entities. The Credit Parties, taken as a whole and after giving effect to the transactions occurring on or about the Second Restatement Closing Date, including the Evanston Sale, are able to pay their debts and obligations as they become due. Each Credit Party which currently has any operations maintains a separate bank account to the extent possible based on the circumstances applicable to each Credit Party. Each Credit Party that currently does not have operations and does not have a separate bank account hereby covenants and agrees that prior to beginning any operations, such Credit Party shall use its best efforts open a separate bank account for itself. The Credit Parties use their best efforts not to comingle their assets and maintain separate ownership of such assets. Each Credit Party separately maintains sufficient capital and liquid resources to operate its business.

5.24 Security Documents.

(a) The Security Agreement and Company Security Agreements will, upon execution and delivery thereof, be effective to create in favor of the Collateral Agent for the benefit of Holders, legal, valid and enforceable first priority Liens (other than with respect to Liens on the property, assets or Equity Interests of the Hankey Subsidiaries and Installment Sale Subsidiaries) on, and security interests in, the collateral described therein to the extent intended to be created thereby, and (i) when financing statements and other filings in appropriate form are filed in each applicable filing office for each applicable jurisdiction and (ii) upon the taking of possession or control by the Collateral Agent for the benefit of the Holders of such collateral with respect to which a security interest may be perfected only by possession or control (which possession or control shall be given to the Collateral Agent for the benefit of the Holders to the extent possession or control by the Collateral Agent is required by the Security Agreement), the Liens created by the Security Agreement and Company Security Agreements shall constitute fully perfected first- priority Liens (other than with respect to Liens on the property, assets or Equity Interests of the Hankey Subsidiaries and Installment Sale Subsidiaries) on, and security interests in (to the extent intended to be created thereby), all right, title and interest of the grantors in such collateral to the extent perfection can be obtained by filing financing statements or the taking of possession or control, in each case subject to no Liens other than Permitted Liens and Excluded Laws.

(b) Upon recording thereof in the appropriate recording office, each Mortgage is effective to create, in favor of the Collateral Agent for the benefit of the Holders, legal, valid and enforceable perfected Liens on, and security interest in, all of the Credit Parties’ right, title and interest in and to the Mortgaged Properties and the proceeds thereof, subject only to Permitted Liens, and when the Mortgages are filed in the appropriate recording office, the Mortgages shall constitute fully perfected Liens on, and security interests in, all right, title and interest of the Credit Parties in the Mortgaged Properties and the proceeds thereof, in each case prior and superior in right to any other Person, other than Permitted Liens.

5.25 Material Agreements.

(a) The Company has provided to the Purchasers a copy of each Material Agreement. None of the Credit Parties has received any notification from any party that it intends to terminate any such agreement, and there is no default or event of default by a Credit Party under any such agreement which could reasonably be expected to have a Material Adverse Effect.

(b) Each of the Material Agreements and other documents and instruments pursuant to which any Credit Party holds its Investments, property or assets and conducts its business is a valid and subsisting agreement, document and instrument in full force and effect, enforceable in accordance with the terms thereof, none of the Credit Parties or any other party thereto is in default of any of the provisions of any such agreements, instruments or documents nor has any such default been alleged, and such Investments and assets are in good standing under applicable Laws, except for any of the foregoing which could not reasonably be expected to have a Material Adverse Effect.

5.26 Survival. All representations and warranties contained in this Agreement or any of the other Operative Documents shall survive the execution and delivery of this Agreement.

5.27 Private Offering. Assuming the accuracy and validity of representations of the Purchasers in ARTICLE VI, no registration of the Notes or Warrants pursuant to the provisions of any Securities Law will be required in connection with the offer, sale or issuance of the Notes or Warrants pursuant to this Agreement. The Credit Parties have not, directly or indirectly, offered, sold or solicited any offer to buy, and the Company will not, directly or indirectly, offer, sell or solicit any offer to buy, any security of a type or in a manner which would be integrated with the sale of the Notes or Warrants and require the Notes or Warrants to be registered under any Securities Laws. None of the Credit Parties, their Affiliates or any Person acting on its or any of their behalf (other than the Purchasers and the Collateral Agent, as to whom the Credit Parties make no representation or warranty) has engaged or will engage in any form of general solicitation or general advertising (within the meaning of Rule 502(c) under the Securities Act) in connection with the offering of the Notes. Each Credit Party covenants and agrees that neither it, nor anyone acting on its behalf, will offer or sell the Notes or any other security so as to require the registration of the Notes pursuant to the provisions of the Securities Act or any state securities or “blue sky” laws, unless such Notes are so registered. The Notes shall be issuable only in registered form without coupons and in any denomination a Holder may request.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS

Each Purchaser, for itself only and not on behalf of any other subsequent Holder of the Notes, represents and warrants on behalf of itself, to the Company as follows:

6.1 Purchase for Investment. Such Purchaser acquired the Notes for investment for its own account and not with a view to the resale of all or any part thereof in any transaction that would constitute a “distribution” within the meaning of Canadian Securities Laws; provided, however, the disposition of such Purchaser’s property shall at all times be and remain in its control, subject to applicable Laws, including those related to insider trading.

6.2 Investor Qualifications. Such Purchaser (a) is an “accredited investor” (as defined in Regulation D promulgated by the Commission and as defined in NI 45-106), (b) is able to bear the economic risk of its investment in the Notes, (c) acknowledges that neither the Notes nor the Warrants have been or will be registered under the U.S. Securities Act and therefor are or will be subject to certain restrictions on transfer unless registered for resale or subject to an exempt transaction under the U.S. Securities Act and any applicable state securities law and the Company is not under any obligation to file a registration statements with the Commission with respect to the Notes, the Warrants or any of the underlying Shares, and (d) has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of its investment in the Company and the Notes. Such Purchaser is not an entity formed solely to make this investment. Each Purchaser is an U.S. Accredited Investor and is acquiring the Notes and Warrants for its own account, and for investment and not with a view to any resale, distribution or other disposition of the Notes, Warrants, or Shares in violation of United States federal or state securities Laws, and each Purchaser has so indicated by checking the appropriate category on the U.S. Accredited Investor certificate delivered to the Borrowers which so describes it and acknowledges that by signing this Agreement it is certifying that the statements made by checking the appropriate U.S. Accredited Investor category are true.

6.3 Fees and Commissions. Such Purchaser has not retained any finder, broker, agent, financial advisor or other intermediary in connection with the transactions contemplated by this Agreement.

6.4 Power, Authority and Authorization.

(a) Such Purchaser is a corporation, limited partnership or limited liability company, as the case may be, validly exiting under the laws of the jurisdiction of its incorporation or formation, as the case may be. Such Purchaser has full power, capacity and authority to enter into and perform its obligations under this Agreement and each of the Operative Documents in accordance with its terms.

(b) This Agreement and each other Operative Document to be executed and delivered by a Purchaser has been duly authorized, executed and delivered by such Purchaser and constitutes a valid and binding obligation of such Purchaser enforceable against it in accordance with its terms subject, however, to the customary limitations with respect to Debtor Relief Laws and with respect to the availability of equitable remedies.

(c) The execution, delivery and performance by each Purchaser of this Agreement and each other Operative Document to which such Person is a party, have been duly authorized by all necessary corporate, partnership or limited liability company action, as applicable, and do not: (i) contravene the terms of any of such Person’s Organization Documents; (ii) conflict with or result in any breach or contravention of any document evidencing any Contractual Obligation to which such Person is a party, except where such conflict, breach or contravention would not reasonably be expected to result in a Material Adverse Effect; (iii) conflict with or result in any breach or contravention of any order, injunction, writ or decree of any Governmental Authority to which such Person or its Property is subject; or (iv) violate any Law applicable to such Purchaser.

6.5 Acknowledgements Regarding Notes. Each Purchaser acknowledges and agrees that:

(a) no securities commission or similar regulatory authority has reviewed or passed on the merits of the Notes, Warrants, Shares or Warrant Shares;

(b) there are risks associated with the purchase of the Notes and Warrants, and each Purchaser has such knowledge in financial and business affairs as to be capable of evaluating the merits and risks of its investment and it is able to bear the economic risk of loss of its investment;

(c) the Notes and Warrants are being offered for sale only on a “private placement” basis and that the sale and delivery of the Notes and Warrants are conditional upon such sale being exempt from the requirements as to the filing of a prospectus or delivery of an offering memorandum (and no such document has been provided to, or requested by, the Purchaser) or upon the issuance of such orders, consents or approvals as may be required to permit such sale without the requirement of filing a prospectus or delivering an offering memorandum and, as a consequence (i) it is restricted from using most of the civil remedies available under applicable Canadian Securities Laws; (ii) it may not receive information that would otherwise be required to be provided to it under applicable Canadian Securities Laws; and (iii) the Company is relieved from certain obligations that would otherwise apply under applicable Canadian Securities Laws;

(d) the Company has advised each Purchaser, that the Company is relying on an exemption from the requirements to provide each Purchaser with a prospectus under the Securities Act (Ontario) and other applicable Canadian Securities Laws;and, as a consequence of acquiring the Notes and Warrants pursuant to this exemption, certain protections, rights and remedies provided by the Securities Act (Ontario) and applicable Canadian Securities Laws, including statutory rights of rescission or damages, will not be available to them; and

(e) each Purchaser acknowledges that the Operative Documents require it to provide certain Personal Information to the Company. Such information is being collected and will be used by the Company for the purposes of completing the proposed issuance and sale of the Notes and Warrants, which includes, without limitation, determining the Purchasers’ eligibility to purchase such securities under applicable Laws and preparing and registering certificates representing the Notes and Warrants, and the underlying securities issuable upon exercise or conversion thereof. Each Purchaser agrees that its Personal Information may be disclosed by the Company to: (a) applicable securities regulatory authorities and the CSE, (b) the Company’s registrar and transfer agent, if any, and (c) any of the other parties involved in the proposed transaction, including legal counsel, and may be included in record books in connection with the transaction. In addition, each Purchaser acknowledges, agrees and consents to the collection, use and disclosure of Personal Information by the Company for corporate finance and shareholder communication purposes or such other purposes as are necessary to the Company’s business.

ARTICLE VII

AFFIRMATIVE COVENANTS

Each Credit Party covenants and agrees that, from and after the date hereof until the Notes and all other amounts under the Operative Documents have been finally paid in full in accordance with their terms (other than contingent indemnification or reimbursement obligations to the extent no claim giving rise thereto has been asserted), each Credit Party shall, and shall cause each of its Subsidiaries to, perform and comply with all covenants in this ARTICLE VII.

7.1 Financial Statements.

(a) Each Credit Party shall, and shall cause each Subsidiary to, maintain a system of accounting established and administered in accordance with sound business practices to permit the preparation of financial statements in conformity with IFRS or GAAP, as applicable; provided that monthly financial statements shall not be required to have note disclosure and are subject to normal year-end adjustments.

(b) The Company shall deliver to the Holders in form and detail reasonably satisfactory to the Holders:

(i) as soon as available, but not later than one hundred twenty (120) days after the end of each Fiscal Year, commencing with the Fiscal Year ending June 29, 2019, a copy of the audited consolidated statement of financial position of the Company and its Subsidiaries as at the end of such Fiscal Year and the related audited consolidated statements of operations and comprehensive income, changes in shareholders’ equity and cash flows for such Fiscal Year, setting forth in each case in comparative form the figures for the previous Fiscal Year (if any), certified on behalf of the Company by an appropriate Responsible Officer as fairly presenting, in all material respects, in accordance with IFRS or GAAP, as applicable, the financial position and the results of operations of the Company and its Subsidiaries on a consolidated basis, accompanied by the opinion of a nationally recognized independent public accounting firm reasonably acceptable to the Holders (MNP LLP being deemed acceptable) which report shall state that such consolidated financial statements present fairly, in all material respects, the financial position as at and for the periods indicated in accordance with IFRS or GAAP, as applicable, applied on a basis consistent with prior years. Such opinion shall not be qualified or limited because of a restricted or limited examination by such accountant, beyond an accountant’s standard limitation for an audit conducted in accordance with IFRS or GAAP, as applicable;

(ii) as soon as available, but not later than sixty (60) days after the end of each of the first three Fiscal Quarters of each Fiscal Year, commencing with the Fiscal Quarter ending on or about September 30, 2019, a copy of the unaudited consolidated statement of financial position of the Company and its Subsidiaries as of the end of such Fiscal Quarter, and the related unaudited consolidated statements of operations and comprehensive income, changes in shareholders’ equity and cash flows for such Fiscal Quarter and for the portion of the Fiscal Year then ended, and setting forth in each case comparisons to the corresponding periods in the preceding Fiscal Year all certified on behalf of the Company by an appropriate Responsible Officer as fairly presenting, in all material respects, in accordance with IFRS or GAAP, as applicable, the financial position and the results of operations of the Company and its Subsidiaries on a consolidated basis, subject to normal year-end adjustments and absence of footnote disclosure; and

(iii) as soon as available, but not later than commencement of each Fiscal Year, the Company’s’ consolidated annual operating plans, operating and capital expenditure budgets, and financial forecasts, including cash flow projections (prepared on a month by month basis) covering proposed fundings, repayments, additional advances, investments and other cash receipts and disbursements, together with a statement of underlying assumptions, each for the following Fiscal Year presented on a monthly basis for such next Fiscal Year, all of which shall be in a format reasonably consistent with projections, budgets and forecasts theretofore provided to the Holders, and promptly following the preparation thereof, updates to any of the foregoing from time to time prepared by management of the Company.

(c) Each Credit Party authorizes the Holders to discuss the financial condition of each Credit Party and each Subsidiary with such Credit Party’s independent certified public accountants and agrees that such discussion or communication shall be without liability to either the Holders or such accountants.

7.2 Certificates; Other Information. Company shall furnish to the Holders:

(a) concurrently with the delivery of the annual financial statements referred to in Section 7.1(b)(i), a certificate of the independent certified public accountants reporting on such financial statements stating that in making the examination necessary therefor no knowledge was obtained of any Event of Default, except as specified in such certificate;

(b) concurrently with the delivery of the financial statements referred to in clauses (i) and (ii) of Section 7.1(b), a compliance certificate in a form reasonably satisfactory to the Holders (each, a “Compliance Certificate”), under which a Responsible Officer certifies on behalf of the Credit Parties that no Default or Event of Default has occurred or is continuing, except as specified in such certificate;

(c) promptly after the same are sent, copies of all financial statements and reports which any Credit Party sends to holders of its Equity Interests; and to the extent not publicly filed and available as part of the Company Public Disclosure Record, promptly after the same are filed, copies of all financial statements and regular, periodic or special reports which any Credit Party may make to, or file with, the Commission or any successor or similar Governmental Authority;

(d) no later than thirty (30) days after the Restatement Closing Date, the CRO shall present to the representatives of the Purchasers the proposed turnaround plan, as prepared and approved by the CRO in accordance with Section 7.21. The CRO shall update the Turnaround Plan in his or her reasonable discretion, but no less frequently than every four (4) weeks, with the oversight of the board of directors of the Company, provided that such updated Turnaround Plan must be delivered to the Purchasers no later than five (5) days (or such later date agreed upon by the Holders) prior to the implementation thereof and shall be subject to the Gotham Purchasers’ approval in accordance with Section 7.21, and the CRO shall present each such update to the Turnaround Plan in person or by telephonic conference to representatives of the Holders prior to the implementation thereof;

(e) together with each delivery of financial statements pursuant to Section 7.1(b), a management report, in reasonable detail, signed by a Responsible Officer of the Credit Parties, describing the operations and financial condition of Credit Parties and the Subsidiaries for the Fiscal Quarter then ended (or for the Fiscal Year then ended in the case of annual financial statements), and together with each delivery of financial statements pursuant to Section 7.1(b), a report discussing the reasons for any significant variations from projections for the period covered thereby or the same period in the prior Fiscal Year;

(f) promptly upon receipt thereof, copies of any written reports submitted by the Company’s certified public accountants in connection with each annual, interim or special audit or review of any type of the financial statements or internal control systems of the Credit Parties and the Subsidiaries made by such accountants, including any comment letters submitted by such accountants to management of such Person in connection with their services;

(g) prompt notice of any material actual or (if reasonably certain) proposed working capital adjustment to be paid by a Credit Party or other material purchase price adjustment, escrow, indemnification or other similar determinations or claims against, or material payments in respect of such matters by, any Credit Party; and

(h) such additional business, financial, corporate (or other organizational) and other information as the Holders may from time to time reasonably request, within a reasonable period after such request, taking into account the nature of the request.

7.3 Notices. The Company shall promptly notify the Holders of any of the following (and in no event later than three (3) Business Days after a Responsible Officer becoming aware thereof):

(a) the occurrence or existence of any Event of Default;

(b) any breach or non-performance of, or any default under, any Contractual Obligation (other than a Material Agreement) of any Credit Party or any Subsidiary, or any violation of, or non-compliance with, any Law (other than Cannabis Laws), which, in any such case, could reasonably be expected to result, either individually or in the aggregate, in a Material Adverse Effect, including a description of such breach, non-performance, default, violation or non- compliance and the steps, if any, such Credit Party or such Subsidiary has taken, is taking or proposes to take in respect thereof;

(c) any material breach or material non-performance of, or any material default under, any Material Agreement of any Credit Party or any Subsidiary, or any material violation of, or material non-compliance with, any Cannabis Law, including a description of such breach, non- performance, default, violation or non-compliance and the steps, if any, such Credit Party or such Subsidiary has taken, is taking or proposes to take in respect thereof;

(d) any dispute, litigation, investigation, audit, proceeding or suspension which may exist at any time between any Credit Party or any Subsidiary and any Governmental Authority (other than any Governmental Authority with jurisdiction over any Cannabis Laws) which could reasonably be expected to result, either individually or in the aggregate, in a Material Adverse Effect;

(e) any dispute, litigation, investigation, audit, proceeding or suspension which may exist at any time between any Credit Party or any Subsidiary and any Governmental Authority with jurisdiction over any Cannabis Laws other than investigations and audits in the Ordinary Course of Business or that otherwise could not reasonably be expected to, either individually or in the aggregate, materially and adversely affect any Credit Party;

(f) any notice from a Governmental Authority which could reasonably be expected to lead to the suspension or revocation of any material Cannabis License held by a Cannabis License Holder, or any material fine or penalty levied against any Cannabis License Holder which could reasonably be expected to materially and adversely affect a Cannabis License;

(g) the commencement, or any material adverse development in, of any litigation or proceeding affecting any Credit Party or any Subsidiary (i) in which the amount of damages claimed is $1,000,000, (ii) in which injunctive or similar relief is sought and which could reasonably be expected to have a Material Adverse Effect, (iii) in which the relief sought is an injunction or other stay of the performance of this Agreement or any other Operative Document or (iv) in which the amount of damages claimed is in excess of $50,000 and the Company has determined not to contest the underlying claims consistent with its legal budget and the Turnaround Plan;

(h) any of the following if the same could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect, together with a copy of any notice with respect to such event that may be required to be filed with a Governmental Authority and any notice delivered by a Governmental Authority to any ERISA Affiliate with respect to such event:

(i) an ERISA Event; (ii) the adoption of any new, or the commencement of contributions to, any Title IV Plan or Multiemployer Plan by any Credit Party, any Subsidiary or any ERISA Affiliate; or (iii) the adoption of any amendment to a Title IV Plan, if such amendment results in a material increase in benefits or unfunded liabilities;

(i) any Material Adverse Effect subsequent to the date of the most recent consolidated audited financial statements of the Company delivered to the Holders pursuant to this Agreement;

(j) any material change in accounting policies or financial reporting practices by any Credit Party or any Subsidiary;

(k) the creation, establishment or acquisition of any Subsidiary;

(l) upon the reasonable request of the Holders, an updated Perfection Certificate (or, to the extent such request relates to specified information contained in the Perfection Certificate, such information) reflecting all changes since the date of the information most recently received pursuant to this paragraph (l) or Section 4.1(c);

(m) the acquisition of, completion of improvements on or the election of Treehouse REIT not to purchase, any Material Real Property;

(n) any other development specific to the Company or any of the Subsidiaries that is not a matter of general public knowledge and that has had, or could reasonably be expected to have, a Material Adverse Effect; and

(o) (i) on each Thursday following the Restatement Closing Date, the Borrowers shall deliver to the Collateral Agent for distribution to the Holders a 13-week cash forecast in the form attached to Appendix I to this Agreement, with such form subject to adjustment by the Borrowers with the approval of the Collateral Agent (not to be unreasonably withheld); and

(ii) no later than five (5) Business Days after the end of each fiscal month, the Borrowers shall deliver to the Collateral Agent for distribution to the Holders a written report showing the monthly financial performance for the prior fiscal month indicating any variances to the Company’s budget as previously delivered to the Collateral Agent and approved by the Board, in the form attached to Appendix II to this Agreement, with such form subject to adjustment by the Borrowers with the approval of the Collateral Agent (not to be unreasonably withheld).

Each notice pursuant to this Section shall be accompanied by a written statement by a Responsible Officer on behalf of Credit Parties setting forth details of the occurrence referred to therein, and stating what action Credit Parties propose to take with respect thereto and at what time. Each notice of a Default or of an Event of Default shall describe with particularity any and all clauses or provisions of this Agreement or other Operative Document that have been breached or violated.

7.4 Preservation of Existence, Etc. Each Credit Party shall: (a) preserve and maintain in full force and effect its corporate, partnership, limited liability company or other existence and good standing under the laws of its state or jurisdiction of incorporation or formation; (b) use commercially reasonable efforts, in the Ordinary Course of Business, to preserve and maintain in full force and effect all rights, privileges, qualifications, permits, licenses and franchises necessary in the normal conduct of its business where failure to do so could reasonably be expected to result in a Material Adverse Effect; (c) use commercially reasonable efforts, in the Ordinary Course of Business, to preserve its business organization and preserve the goodwill and business of the customers, suppliers and others having material business relations with it; and (d) preserve or renew all of its registered trademarks, trade names and service marks materially necessary or materially useful to the operation of its business.

7.5 Maintenance of Property. Except to the extent that failure to do so could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, each Credit Party shall, in the Ordinary Course of Business, maintain and preserve all of its Property which is used or materially useful in its business in good working order and condition (ordinary wear and tear excepted) and make all necessary repairs thereto and renewals and replacements thereof.

7.6 Property Insurance and Business Interruption Insurance. Each Credit Party shall, and shall cause each Subsidiary to, maintain, at its expense, with financially sound and reputable insurers, insurance with respect to its properties and business against loss or damage of the kinds customarily insured against by Persons engaged in the same or similar business of such types and in such amounts (after giving effect to any self-insurance reasonable and customary for similarly situated Persons engaged in the same or similar businesses as the Credit Parties) as are customarily carried under similar circumstances by such other Persons as is reasonably acceptable to the Majority Holders. All such policies of insurance shall be in form and substance reasonably satisfactory to the Majority Holders and no Credit Party shall or shall permit any Subsidiary to, amend or otherwise change any such policies in any way which may adversely affect the Holders without the prior written consent of the Majority Holders. Credit Parties shall deliver to the Holders a certificate of insurance for each policy of liability insurance, which shall be accompanied by an additional insured endorsement in favor of the Collateral Agent. The policy of liability insurance shall provide for the insurer to provide at least thirty (30) days prior written cancellation notice to the Holders. The Company shall provide the Holders with prompt written notice of any change, amendment or modification to such insurance policy.

7.7 Payment of Liabilities. Each Credit Party shall, and shall cause each Subsidiary to, pay, discharge and perform as the same shall become due and payable or required to be performed, all of their respective obligations and liabilities (but subject to any restrictions contained in this Agreement), including: (a) all income and other material Tax liabilities, assessments and governmental charges or levies upon it or its properties or assets, unless the same are being contested in good faith by appropriate proceedings diligently prosecuted which stay the enforcement of any Lien and for which adequate reserves in accordance with IFRS or GAAP, as applicable, are being maintained by such Credit Party or such Subsidiary; (b) all lawful claims which, if unpaid, would by law become a Lien upon its Property unless the same are being contested in good faith by appropriate proceedings diligently prosecuted which stay the imposition or enforcement of the Lien and for which adequate reserves in accordance with IFRS or GAAP, as applicable, are being maintained by such Credit Party or such Subsidiary; (c) any Indebtedness, as and when due and payable, but subject to any restrictions contained in this Agreement, provisions in any applicable subordination agreement or provisions in any instrument or agreement evidencing such Indebtedness; and (d) all material obligations under any Contractual Obligation to which such Credit Party or such Subsidiary is bound, or to which it or any of its Properties is subject.

7.8 Compliance with Laws. Each Credit Party shall, and shall cause each Subsidiary to, comply, in all material respects, with all Laws of any Governmental Authority having jurisdiction over it or its business (including all Cannabis Laws and Environmental Laws), except (a) such as may be contested in good faith by appropriate proceedings diligently prosecuted without risk of loss of any material portion of the assets of the Credit Parties, (b) as to which a bona fide dispute exists, and (c) for which appropriate reserves have been established on such Person’s financial statements.

7.9 Inspection of Property and Books and Records. Each Credit Party shall maintain proper books of record and account, in which full, true and correct entries in conformity with IFRS or GAAP, as applicable to such Credit Party, consistently applied shall be made of all financial transactions and matters involving the assets and business of each Credit Party and each Subsidiary. Each Credit Party shall, and shall cause each Subsidiary to, permit representatives and independent contractors of the Holders to visit and inspect any of their respective Properties, to examine their respective organizational, corporate, limited liability company or partnership, as applicable, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss their respective affairs, finances and accounts with their respective directors, officers, and, so long as (unless an Event of Default has occurred and is continuing) a senior member of Company’s management is given a reasonable opportunity to be present, independent public accountants, at such reasonable times, upon reasonable prior written notice, during normal business hours, in a manner that would not reasonably be expected to disrupt the conduct of such Credit Party’s or Subsidiary’s business in the ordinary course and as the Holders may reasonably desire; provided that, unless an Event of Default has occurred and is continuing, no more than two (2) such visits or inspections shall occur per calendar year at the expense of the Credit Parties.

7.10 Use of Proceeds. The Company and the Borrowers shall use the proceeds of all Notes solely as follows: (a) to fund capital expenditures and marketing expenses, (b) to pay fees and expenses incurred in connection with the transactions contemplated by this Agreement, (c) for general working capital purposes, and (d) to repay outstanding debt and associated obligations under the Hankey Loan Documents to the extent required to maintain compliance with the license value to debt ratio set forth in the Hankey Loan Documents, provided that the Company notifies the Holders in writing promptly after using any proceeds of the Notes to prepay any obligations under the Hankey Loan Documents, provided that, so long as the Interim Budget or Turnaround Plan is in effect, the Company and the Borrowers shall use the proceeds of the Tranche 4 Advance and the proceeds of the Incremental Advances solely in accordance with the Interim Budget or Turnaround Plan, as applicable.

7.11 Further Assurances. Each Credit Party shall, and shall cause each Subsidiary to ensure that all written information, exhibits, schedules and reports furnished to the Holders, when read together with the Company Public Disclosure Record, do not and will not contain any untrue statement of a material fact and do not and will not omit to state any material fact necessary to make the statements contained therein not misleading in light of the circumstances in which made, and will promptly disclose to the Holders and correct any material defect or error that may be discovered in any written information, exhibits, schedules and reports furnished to the Holders or in any Operative Document or in the execution, acknowledgment or recordation thereof (it being acknowledged and understood that forecasts and projections are not to be viewed as facts and actual results may differ significantly from projected results contained in such forecasts and projections). Promptly upon request by the Holders, each Credit Party shall, and shall cause each Subsidiary to, take such additional actions as the Holders may reasonably require from time to time in order to carry out more effectively the purposes of this Agreement or any other Operative Document.

7.12 Additional Collateral.

(a) In the event (1) any Credit Party forms or acquires any Subsidiary which is not an Excluded Subsidiary after the Closing Date, or (2) any Excluded Subsidiary shall no longer be deemed an Excluded Subsidiary, such Credit Party or the Credit Party which controls such former Excluded Subsidiary shall promptly upon (but no later than thirty (30) days after) such formation, acquisition or change in status cause (i) such newly formed or acquired Subsidiary or former Excluded Subsidiary (each is a “New Subsidiary”) to execute and deliver to the Holders such documents as the Holders may then reasonably require (including, without limitation, a Guaranty and a joinder agreement causing such New Subsidiary to become party to the Security Agreement as a “Grantor” thereunder), (ii) provide updates to existing schedules and exhibits or new schedules or other disclosures as appropriate to modify representations, warranties, covenants, conditions and other provisions applicable to such New Subsidiary), (iii) a certificate attaching (x) the Organization Documents of such New Subsidiary, (y) resolutions of the board of directors (or similar governing body) of such New Subsidiary approving and authorizing the execution, delivery and performance of the documents described in this Section 7.11 and the other Operative Documents and the transactions contemplated thereby, and (z) signature and incumbency schedule of such New Subsidiary, all certified as of the date of delivery of such certificate by a Responsible Officer of such New Subsidiary as being true and complete and in full force and effect without modification and (iv) such other instruments, documents, and certificates reasonably required by the Holders in connection therewith.

(b) If any asset (other than real property, which is covered by paragraph (c) below) that has an individual fair market value (as determined in good faith by the Borrowers) in an amount greater than $1,000,000 is acquired by any Credit Party or any Subsidiary after the Closing Date or owned by an entity at the time it becomes a Credit Party (in each case other than (x) assets constituting Collateral under the Security Agreement that become subject to the Lien of the Security Agreement upon acquisition thereof, (y) assets that are not required to become subject to Liens in favor of the Holders pursuant to any Operative Document, or (z) assets of an Excluded Subsidiary), the applicable Credit Party will (i) as promptly as practicable notify the Holders thereof and (ii) take or cause the Credit Parties to take such actions as shall be reasonably requested by the Holders to grant and perfect such Liens, all at the expense of the Credit Parties.

(c) The Company shall promptly notify the Holders of the acquisition of, or completion of improvements on, and grant and cause each of the Credit Parties to grant to the Holders security interests and Mortgages in such Material Real Property of the Company or any such Credit Parties as are not covered by the Mortgages previously delivered and recorded pursuant to documentation substantially in the form of the Mortgages or in such other form as is reasonably satisfactory to the Holders (each, an “Additional Mortgage”) and constituting valid and enforceable Liens subject to no other Liens except Permitted Liens at the time of perfection thereof, record or file, and cause each such Credit Party to record or file, the Additional Mortgage or instruments related thereto in such manner and in such places as is required by law to establish, perfect, preserve and protect the Liens in favor of the Holders required to be granted pursuant to the Additional Mortgages and pay, and cause each such Credit Party to pay, in full, all Taxes, fees and other charges payable in connection therewith. Unless otherwise waived by the Holders, with respect to each such Additional Mortgage, the Company shall deliver to the Holders contemporaneously therewith a title insurance policy in an amount and with such endorsements as shall be required by Holders and in form and substance reasonably acceptable to Holders, flood determination and evidence of flood insurance, if required by law, legal opinion (in form and substance customary for the particular transaction and permitting reasonable assumptions and qualifications which are typically required in connection with opinions rendered in the cannabis industry), FIRREA appraisal (if required by law), a phase I environmental assessment, evidence of zoning compliance and no non-compliance with any other applicable laws, rules and regulations, an ALTA survey in form and substance acceptable to Holders, a phase I environmental assessment disclosing no recognized environmental conditions and otherwise in form and substance acceptable to Holders, and otherwise comply with the requirements of the Operative Documents applicable to Mortgages and Mortgaged Property. Any survey, environmental assessment, title insurance commitment or policy and evidence of zoning/compliance with applicable laws, ordinances, rules and regulations shall be at the sole cost and expense of Company.

(d) The Company shall furnish to the Holders promptly (and in any event within thirty (30) days after such change) written notice of any change (i) in any Credit Party’s corporate or organization name, (ii) in any Credit Party’s identity or organizational structure, (iii) in any Credit Party’s organizational identification number, or (iv) in any Credit Party’s jurisdiction of organization; provided that the Credit Parties shall not effect or permit any such change unless all filings have been made, or will have been made within any statutory period, under the Uniform Commercial Code or otherwise that are required in order for the Holders to continue at all times following such change to have a valid, legal and perfected security interest in all the Collateral with the same priority as prior to such change (it being understood that, subject to the foregoing, any Credit Party may change the name under which it conducts its business or its corporate name, trade name, trademarks, brand name or other public identifiers).

(e) Not later than thirty (30) days after any new deposit account or securities account is opened by any Credit Party (excluding any accounts used solely to fund payroll or employee benefits), deliver to the Collateral Agent for the benefit of the Holders a Control Agreement with respect to each such account.

7.13 Anti-Terrorism Laws. Each Credit Party shall, and shall cause each Subsidiary to, (a) ensure that no Person that directly or indirectly owns a controlling interest in or otherwise controls such Person is or shall be listed in any of the listings described in Section 5.22, (b) not use or permit the use of the proceeds of the Notes to violate any of the foreign asset control regulations of OFAC or any enabling statute or order relating thereto or the Executive Order and (c) comply in all material respects with all applicable Bank Secrecy Act laws and regulations.

7.14 Fees and Expenses.

(a) Each Credit Party shall bear all of its own expenses in connection with this Agreement and the other Operative Documents, and the transactions contemplated hereby and thereby. The Credit Parties will reimburse the Holders for their Attorney Fees in connection with the drafting, negotiation and execution of this Agreement up to a maximum of $100,000.

(b) Any action taken by any Credit Party under or with respect to any Operative Document, even if required under any Operative Document or at the request of the Holders, shall be at the expense of the Credit Parties, and the Holders shall not be required under any Operative Document to reimburse any Credit Party or any Subsidiary of any Credit Party therefor except as expressly provided therein. In addition, the Credit Parties agree to pay or reimburse upon demand (with respect to subparagraphs (i) and (ii) collectively for all costs and expenses incurred after the Closing Date, up to an amount not to exceed half of one percent (0.50%) of the outstanding principal balance under the notes): (i) the Holders for all reasonable and invoiced out-of-pocket costs and expenses incurred by it or any of its Related Persons in connection with the investigation, development, preparation, negotiation, execution, interpretation or administration of, any modification of any term of or termination of, any Operative Document, any commitment or proposal letter therefor, any other document prepared in connection therewith or the consummation and administration of any transaction contemplated therein, in each case including Attorney Costs of the Holders, the reasonable and invoiced out-of-pocket cost of environmental audits, background checks and similar expenses, to the extent permitted hereunder, (ii) the Holders for all reasonable and invoiced out-of-pocket costs and expenses incurred by it or any of its Related Persons in connection with internal audit reviews, audits by Governmental Authorities, field examinations and inspections, and (iii) each of the Holders, and its Related Persons for all invoiced out-of-pocket costs and expenses incurred in connection with (A) any refinancing or restructuring of the credit arrangements provided hereunder in the nature of a “work-out”, (B) the enforcement or preservation of any right or remedy under any Operative Document, any Obligation, or any other related right or remedy or (C) the commencement, defense, conduct of, intervention in, or the taking of any other action (including preparation for and/or response to any subpoena or request for document production relating thereto) with respect to, any proceeding (including any bankruptcy or insolvency proceeding) related to any Credit Party, any Subsidiary of any Credit Party, Operative Document, Obligation or Related Transaction, including Attorney Costs.

7.15 Taxes. Each Credit Party and each Subsidiary shall file all Tax returns and reports required to be filed, and will pay or cause to be paid Taxes, assessments, fees and other governmental charges levied or imposed upon it or its Properties, income or assets otherwise due and payable, except those which are being contested in good faith by appropriate proceedings diligently prosecuted and for which adequate reserves have been provided in accordance with IFRS or GAAP, as applicable.

7.16 Right of First Refusal. From and after the consummation of the Tranche 3 Advance and until the repayment in full or conversion of the Obligations then outstanding under all Notes, the Company shall notify the Holders of each proposed offering of debt securities (“Debt Offering”) by the Company or (unless it is to another Subsidiary or the Company) any of its Subsidiaries within a commercially reasonable time prior to the initial closing of such offering, and each Holder shall have the right to participate in such Debt Offering, subject to negotiations in good faith by the Company and the Holders of the terms of such Debt Offering and of definitive documentation therefor, by providing notice to the Company within two (2) Business Days of receipt of such notice from the Company.

7.17 Regulatory Disclosures. In the event that any Credit Party receives a subpoena, notice of requirement to disclose or any request to disclose any information about any Purchaser from any Governmental Authority, or any applicable Law or Order (other than Excluded Laws) requires any Credit Party to disclose any information about any Purchaser (each is a “Regulatory Disclosure Requirement”), such Credit Party shall, to the extent permissible, prior to disclosing such information, promptly notify the Holders of such Regulatory Disclosure Requirement and permit the Holders and their counsel to seek a protective order or otherwise restrict the disclosure of such information. Further, each Credit Party shall cooperate in good faith with the Holders in their efforts to obtain a protective order or take such other action as the Holders deem necessary, and if a protective order or other remedy is not obtained despite the Holders’ efforts, the Credit Parties shall disclose only that portion of the information that the Credit Parties are legally required to disclose and will make reasonable efforts to obtain reliable assurance that confidential treatment will be afforded that information. Notwithstanding the foregoing, the Company may make disclosures in accordance with its obligations to report the transactions contemplated hereby under the policies of the CSE and under applicable Canadian Securities Laws, including disclosure of the names of the Holders, the amount purchased, and certain other required information.

7.18 Board Observer. At the Closing, the Purchasers shall be irrevocably and unconditionally (subject to the express terms hereof) granted the right to appoint one non-voting observer to the Company’s board of directors (the “Observer”) pursuant to the Observer Agreement, which agreement and appointment will become effective as of the Closing.

7.19 Financial Covenants.

(a) Minimum Liquidity. The Company and the Borrowers and their respective Subsidiaries on a consolidated basis shall at all times maintain Unencumbered Liquid Assets with a value greater than or equal to the applicable Minimum Liquidity Amount.

(b) Other Covenants. Beginning with the Fiscal Quarter that starts on or about July 1, 2020 and ends on or about September 30, 2020, and during each Fiscal Quarter thereafter, the Credit Parties on a consolidated basis shall not:

(i) Incur corporate SG&A expenditures in excess of the amount set forth on Schedule 7.19 for the applicable Fiscal Quarter opposite the heading “Corporate SG&A (Covenant)”;

(ii) Incur capital expenditures in excess of the amount set forth on Schedule 7.19 for the applicable Fiscal Quarter opposite the heading “Capex (Covenant)”;

(iii) Incur expenditures constituting rent, pre-store opening general and administrative expense or rent in connection with new store openings (for the avoidance of doubt, consistent with Schedule 7.19, sublease proceeds shall be deducted from such expenditures, and termination fees of less than 6 months base rent for a particular lease shall be excluded from such expenditures), in each case, in connection with Unproductive Leases in excess of the aggregate amount with respect to such items set forth on Schedule 7.19 for the applicable Fiscal Quarter opposite the heading “Total Unproductive Leases (Covenant)”; or

(iv) Until the first anniversary of the Second Restatement Closing Date, incur rent with respect to cultivation facilities leased under the Treehouse REIT Documents in excess of the amount set forth on Schedule 7.19 for the applicable Fiscal Quarter opposite the heading “Treehouse Cultivation Rent (Covenant)”.

(c) Covenant Relief. The covenants set forth in subsections (i), (ii) and (iii) of Section 7.19(b) shall terminate and no longer apply the first time the Credit Parties have positive Free Cash Flow for two consecutive Fiscal Quarters.

7.20 Post Closing Matters. The Credit Parties shall perform the actions and deliver all agreements, instruments and documents set forth on Schedule 7.20.

7.21 Chief Restructuring Officer; Turnaround Plan; Executive Personnel.

(a) The Credit Parties shall not terminate the CRO without the Gotham Purchasers’ prior written consent, with such consent not to be unreasonably withheld, conditioned or delayed. In the event the CRO’s employment by the Company is terminated, the Credit Parties shall, as soon as practicable, hire a new CRO who is reasonably acceptable to the Gotham Purchasers (as evidenced by their prior written consent). It shall be an immediate Event of Default if the Company does not engage a replacement CRO within forty five (45) days after the date of the prior CRO’s termination. The Credit Parties shall cause and permit the CRO to share financial and other information with the Purchasers promptly upon any Purchaser’s reasonable request. The Purchasers acknowledge that as a result of such information being provided to them, that trading in securities of the Company may be restricted under applicable securities laws.

(b) The Credit Parties shall fully cooperate with the CRO and provide all assistance and resources reasonably necessary or desirable for the CRO to develop, present to the board of directors of the Company and the Purchasers, and implement a turnaround plan and budget which covers budgets, forecasts and financial projections of the Company and its Subsidiaries, for a minimum of the thirteen (13)-week period following the Restatement Closing Date (or a longer period in the CRO’s reasonable discretion), which shall set forth for such period the forecasted budget and projections for cash flow statements. Such proposed turnaround plan and budget must be delivered and presented to the Purchasers in accordance with Section 7.2(d). The Credit Parties shall instruct the CRO to provide the proposed turnaround plan and budget and all updates thereto to the Gotham Purchasers for their consideration and approval, with such other background information and analyses as the Gotham Purchasers reasonably request to be able to evaluate the proposed turnaround plan and all updates thereto. The turnaround plan and budget as approved by the board of directors of the Company and by the Gotham Purchasers shall replace the Interim Budget and is referred to herein as the “Turnaround Plan”. Neither the Interim Budget nor the Turnaround Plan may be amended, supplemented or otherwise modified without the Gotham Purchasers’ prior written consent, not to be unreasonably withheld (and if such consent is given, the term “Turnaround Plan” shall refer to such modified plan). The Turnaround Plan in effect as of the Second Restatement Closing Date is attached to Schedule 7.21.

(c) As long as the Interim Budget or Turnaround Plan is in effect, the Credit Parties shall comply with and implement the Interim Budget or Turnaround Plan, respectively, in a timely manner.

(d) The Credit Parties shall not hire, engage or terminate, or agree to hire, engage or terminate, any “C-Level” employee of any Credit Party without the Gotham Purchasers’ prior written consent, not to be unreasonably withheld.

ARTICLE VIII

NEGATIVE COVENANTS

Each Credit Party covenants and agrees that, from and after the date hereof until the Notes and all other amounts under the Operative Documents have been finally paid in full in accordance with their terms (other than contingent indemnification or reimbursement obligations to the extent no claim giving rise thereto has been asserted), such Credit Party shall not, and shall not cause, suffer or permit any Subsidiary to, directly or indirectly:

8.1 Liens. Create, incur, assume or suffer to exist any Lien on any of its assets, other than the following (collectively, “Permitted Liens”): (a) liens securing the payment of Taxes either not yet delinquent or the validity of which is being contested in good faith by appropriate proceedings, and as to which such Credit Party or such Subsidiary shall, under IFRS or GAAP, as applicable, have set aside on its books and records adequate reserves; (b) pledges, deposits or Liens made or arising under worker’s compensation, unemployment insurance, social security and other similar laws, or to secure the performance of bids, tenders or contracts (other than for the repayment of borrowed money) or to secure indemnity, performance or other similar bonds for the performance of bids, tenders or contracts (other than for the repayment of borrowed money) or to secure statutory obligations or surety, stay, appeal or custom bonds, or to secure indemnity, performance or other similar bonds in the Ordinary Course of Business; (c) Liens in favor of the Collateral Agent for the benefit of the Holders; (d) Liens which arise by operation of law, other than Liens which arise by operation of Environmental Laws, incurred in the Ordinary Course of Business (for sums not constituting borrowed money) that are not overdue for a period of more than thirty (30) days or that are being contested in good faith by appropriate proceedings and for which adequate reserves have been established in accordance with IFRS or GAAP, as applicable (if so required); (e) zoning restrictions, building codes, easements, rights of way, licenses, covenants and other similar restrictions affecting the use of real property that do not secure monetary obligations and do not materially impair the use of such real property for its intended purposes or the value thereof; (f) Liens described on Schedule 8.1, provided that such Liens shall secure only those obligations which they secure on the Closing Date or, in the case of Liens securing the Indebtedness outstanding under the Hankey Loan Documents, Liens securing any refinancing, renewal, replacement or extension of such Indebtedness to the extent permitted under Section 8.2(d); (g) purchase money security interests on equipment of any Credit Party or any Subsidiary securing Capital Leases or purchase money Indebtedness in each case permitted by Section 8.2(b); (h) Liens arising from the filing of precautionary UCC or Personal Property Security Act financing statements solely as a precautionary measure in connection with operating leases, licenses or consignment of goods; (i) rights of offset or statutory banker’s Liens arising in the Ordinary Course of Business in favor of commercial banks; provided that any such Lien shall only extend to deposits and Property in possession of such commercial bank; (j) any interest or title of a licensor, sublicensor, lessor or sublessor with respect to any assets under any license or lease agreement expressly permitted under this Agreement and entered into in the Ordinary Course of Business which do not (i) interfere in any material respect with the business of any Credit Party or (ii) secure any Indebtedness; (k) judgment Liens (i) with respect to judgments which do not constitute an Event of Default, provided that the enforcement of such Liens is effectively stayed and the claims secured thereby are being actively contested in good faith and by appropriate proceedings, or (ii) imposed in connection with judgments and disputes which do not constitute an Event of Default and which are not being contested due to legal budgetary constraints (such constraints being consistent with the Turnaround Plan), provided that the Company notified the Collateral Agent in writing promptly upon determining not to contest such judgment, dispute or related Lien; (l) non-exclusive outbound licenses or sublicenses of patents, copyrights, trademarks and other intellectual property rights granted by any Credit Party in the Ordinary Course of Business and not interfering in any respect with the ordinary conduct of or materially detracting from the value of the business of such Credit Party; (m) [reserved]; (n) liens described on Schedule 8.1(n); (o) [reserved]; and (p) any other Liens on Property not otherwise permitted by this Section 8.1 so long as neither (i) the aggregate principal amount of the Indebtedness and other obligations secured thereby nor (ii) the aggregate fair market value (determined as of the date such Lien is incurred) of the Property subject thereto exceeds $1,000,000 at any time outstanding. No Credit Party shall permit the filing of any financing statement naming such Person as debtor, except for financing statements filed with respect to Permitted Liens.

8.2 Indebtedness. Incur, create, assume, become or be liable in any manner with respect to, or permit to exist, any Indebtedness of any Credit Party or any Subsidiary, except for any of the following: (a) the Obligations; (b) Capital Leases and purchase money Indebtedness (including Capital Leases and purchase money Indebtedness listed on Schedule 8.2), incurred to finance the purchase of equipment, not to exceed $5,000,000 in the aggregate at any time outstanding, and in each case is subject to terms arms’ length terms and conditions and may be prepaid at any time in accordance with its terms; (c) trade obligations and normal accruals made in accordance with IFRS or GAAP, as applicable, in the Ordinary Course of Business not yet due and payable, or with respect to which such Credit Party or such Subsidiary is contesting in good faith the amount or validity thereof by appropriate proceedings, and then only to the extent that such Credit Party or such Subsidiary has set aside on its books adequate reserves therefor, if appropriate under IFRS or GAAP, as applicable; (d) Indebtedness described on Schedule 8.2 and any refinancing, renewal, replacement or extension of such Indebtedness in a principal amount not in excess of that which is outstanding on the Closing Date; (e) unsecured intercompany Indebtedness arising from loans made by any Credit Party to any other Credit Party, provided, however, that upon the request of the Holders at any time, such Indebtedness shall be evidenced by promissory notes having terms reasonably satisfactory to the Majority Holders; (f) Indebtedness arising from endorsing negotiable instruments for collection in the Ordinary Course of Business;(g) obligations (contingent or otherwise) of the Credit Parties and their respective Subsidiaries existing or arising in connection with endorsement of instruments for deposit in the Ordinary Course of Business; (h) Indebtedness to the extent (and without duplication) constituting Investments made by the Credit Parties as expressly permitted under Section 8.5, but subject to clause (n) of this Section 8.2 (below); (i) Indebtedness arising from the honoring by a bank or other financing institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the Ordinary Course of Business; provided, however, that such Indebtedness is extinguished within ten (10) days of incurrence; (j) to the extent constituting Indebtedness, Indebtedness incurred in the Ordinary Course of Business in connection with the financing of unpaid insurance premiums (not in excess of one year’s premiums); (k) Contingent Obligations (i) arising from indemnification obligations, purchase price adjustments or similar obligations in favor of Holders in connection with Dispositions expressly permitted hereunder, (ii) arising from indemnification obligations in favor of directors, managers, employees and officers incurred in the Ordinary Course of Business and expressly permitted hereunder, (iii) constituting guaranties, endorsement or other liabilities incurred in the Ordinary Course of Business in respect of obligations of (or to) suppliers, customers, lessors and licensees, (iv) arising under indemnity agreements to title insurers to cause such title insurer to issue title insurance policies, or (v) of the Credit Parties or any Subsidiary in respect of guarantees of Indebtedness otherwise permitted under this Agreement of another Credit Party; (l) Indebtedness representing any Tax payment obligations to the extent such Taxes are being contested by a Credit Party in good faith by appropriate proceedings and adequate reserves are being maintained in accordance with IFRS or GAAP, as applicable; (m) Indebtedness subject to a Subordination Agreement; (n) Indebtedness of any Person that becomes a Subsidiary after the date hereof, provided that such Indebtedness exists at the time such Person becomes a Subsidiary, is not created in contemplation of, or in connection with, such Person becoming a Subsidiary, and provided further, that the incurrence of such Indebtedness by an existing Credit Party or Subsidiary would have been permitted before such new Subsidiary became a Subsidiary; (o) unsecured Indebtedness which is subject to a Subordination Agreement in an aggregate principal amount not to exceed $650,000,000; and (p) Indebtedness described on Schedule 8.2(p) or other trade payables or accrued expenses incurred in the Ordinary Course of Business which payables or expenses are (i) past due less than (x) one hundred twenty (120) days if such 120-day period would end on or prior to the first anniversary of the Second Restatement Closing Date, and (y) ninety (90) days if such 90-day period would end after the first anniversary of the Second Restatement Closing Date, or (ii) the payment of which is included in the Interim Budget or Turnaround Plan (including details regarding delays of payment past ninety (90) days) or otherwise is subject to a payment plan with the vendor (provided that the applicable Credit Parties and Subsidiaries remain compliant in all material respects with each such vendor payment plan).

8.3 Disposition of Assets. Sell, assign, license, lease, convey, transfer or otherwise dispose of (whether in one or a series of transactions) any Property (including accounts and notes receivable, with or without recourse) or enter into any agreement to do any of the foregoing (including any agreement to statutorily divide) (each is a “Disposition”), except: (a) Dispositions of Inventory in the Ordinary Course of Business; (b) Dispositions from a Credit Party to another Credit Party; (c) to the extent expressly permitted by Section 8.4 or Section 8.5; (d) non-exclusive licenses or sublicenses of intellectual property rights in the Ordinary Course of Business not interfering, individually or in the aggregate, in any material respect with the business of any Credit Party; (e) any Disposition of real Property required by a Governmental Authority to a Governmental Authority as a result of eminent domain proceedings; (f) to the extent constituting a sale, lease, conveyance or disposition, the granting of Permitted Liens; (g) Dispositions of machinery, equipment or other fixed assets to the extent such machinery, equipment or other fixed assets are exchanged for credit against the purchase price of similar replacement machinery, equipment or other fixed assets, or the proceeds of such Dispositions are reasonably promptly applied to the purchase price of similar replacement machinery, equipment or other fixed assets, all in the Ordinary Course of Business; (h) sales of real property in connection with Treehouse REIT Transactions; (i) Dispositions of immaterial, obsolete or worn-out Property in the Ordinary Course of Business; (j) Dispositions of cultivation facilities or the management thereof, subject to the prior written consent of the Gotham Purchasers, not to be unreasonably withheld or delayed and provided the Gotham Purchasers are aware of the terms upon which the Company is currently contemplating disposing of its cultivation facilities and acknowledge the Company will not be receiving cash consideration for such disposition; (k) a Disposition of all or substantially all of the Equity Interests or assets of MME Evanston Retail, LLC (the “Evanston Sale”) provided that: (I) the Credit Parties use their best efforts to obtain regulatory approvals and close the Evanston Sale as promptly as practicable; (ii) the gross proceeds of the Evanston Sale payable to Credit Parties are at least $20,000,000; (iii) the initial $10,000,000 of gross proceeds shall be paid to the Company or another Credit Party without regard to the immediately following clause (iv); and (iv) a portion of the gross proceeds of the Evanston Sale equal to $10,000,000, plus or minus fifty percent (50%) of any positive or negative, respectively, working capital adjustments estimated at such closing (provided, however, that any such reduction shall not exceed $500,000), minus fifty percent (50%) of cash broker fees paid at such closing (the “Evanston Prepayment”) shall be used to pay down the Obligations on the date the Evanston Sale closes and any Credit Party receives any proceeds of such sale, to be applied to the Obligations under the Notes to which the Holders choose to apply such prepayment, which application shall be in each Holder’s sole discretion; and (l) Dispositions of other Property provided that for purposes of this clause (l):

(A) no Default or Event of Default exists or would result from such disposition;

(B) such Disposition is

(i) of the Arizona Subsidiaries or Virginia Subsidiaries, or Property owned or contemplated to be owned by such Subsidiaries as of the Second Amendment Effective Date (collectively, the “Subsidiary Sales”), in each case, on terms no less favorable to such Subsidiary or any Credit Party than would be obtained in a comparable arm’s length transaction under similar market and economic conditions, and without the prior written consent of the Purchasers (which consent shall not be unreasonably withheld, conditioned or delayed), in no event for cash consideration less than $27,500,000 in the case of the Arizona Subsidiaries (or in the event the Arizona Subsidiaries are not sold as a package, $11,000,000 for the entities or assets comprising the operations of EBA Holdings, Inc., $12,375,000 for the entities or assets comprising the operations of CSI Solutions, LLC and $4,125,000 for the entities or assets comprising the operations of Kannaboost Technology, Inc., or in such amounts as reflected in non-binding letters of intent existing as of the Second Restatement Closing date as described on Schedule 8.3(k)), or $7,500,000 in the case of the Virginia Subsidiaries, or