Full Press Release Details
ORGANIGRAM HOLDINGS INC.
THE LENDERS FROM TIME TO TIME PARTY TO THIS AGREEMENT
as Administrative Agent
as Lead Arranger and Sole Bookrunner
ARTICLE I - INTERPRETATION
| 1.01 | Definitions | 1 |
| 1.02 | Accounting Principles | 25 |
| 1.03 | Currency References | 25 |
| 1.04 | Extended Meanings | 25 |
| 1.05 | Exhibits and Schedules | 26 |
ARTICLE II - FACILITY A
| 2.01 | Establishment of Facility A | 26 |
| 2.02 | Purpose | 26 |
| 2.03 | Revolving Nature | 26 |
| 2.04 | Repayment | 26 |
| 2.05 | Availment Options | 26 |
| 2.06 | Interest and Fees | 27 |
| 2.07 | Facility A Margin Limit | 29 |
| 2.08 | Swingline. | 30 |
| 2.09 | Letters of Credit | 31 |
| 2.10 | Cancellation | 33 |
ARTICLE III - FACILITY B
| 3.01 | Establishment of Facility B | 33 |
| 3.02 | Purpose | 34 |
| 3.03 | Non-Revolving Nature; Advances | 34 |
| 3.04 | Repayment | 34 |
| 3.05 | Availment Options | 35 |
| 3.06 | Interest and Fees | 36 |
| 3.07 | Voluntary Repayments | 36 |
| 3.08 | Accordion | 37 |
ARTICLE IV - ANCILLARY CREDIT PRODUCTS
| 4.01 | Hedge Transactions | 38 |
| 4.02 | MasterCard Line | 39 |
| 4.03 | Service Agreements | 39 |
ARTICLE V - GENERAL CONDITIONS
| 5.01 | Matters relating to Interest | 39 |
| 5.02 | Notice Periods | 41 |
| 5.03 | Minimum Amounts, Multiples and Procedures re Draws, Substitutions and Repayments | 41 |
| 5.04 | Place of Repayments | 42 |
| 5.05 | Evidence of Obligations (Noteless Advances) | 43 |
| 5.06 | Determination of Equivalent Amounts | 43 |
| 5.07 | Commitment to Purchase Bankers' Acceptances and BA Equivalent Notes | 43 |
| 5.08 | Bankers' Acceptances | 44 |
| 5.09 | BA Equivalent Notes | 45 |
| 5.10 | No Repayment of Certain Availment Options | 46 |
| 5.11 | Illegality | 46 |
| 5.12 | Anti-Money Laundering | 47 |
| 5.13 | Terrorist Lists | 47 |
ARTICLE VI - REPRESENTATIONS AND WARRANTIES
| 6.01 | Representations and Warranties | 48 |
| 6.02 | Survival of Representations and Warranties | 53 |
ARTICLE VII - COVENANTS
| 7.01 | Positive Covenants | 53 |
| 7.02 | Negative Covenants | 56 |
| 7.03 | Financial Covenants | 59 |
| 7.04 | Reporting Requirements | 59 |
ARTICLE VIII - SECURITY
| 8.01 | Security to be Provided by the Companies | 60 |
| 8.02 | Security to be Provided by Others | 61 |
| 8.03 | General Provisions re Security; Registration | 62 |
| 8.04 | Opinions re Security | 62 |
| 8.05 | After-Acquired Property, Further Assurances | 62 |
| 8.06 | Security for Hedge Transactions | 62 |
| 8.07 | Agent May Obtain Insurance | 63 |
| 8.08 | Insurance Proceeds | 63 |
| 8.09 | Unsecured Subsidiaries | 63 |
ARTICLE IX - CONDITIONS PRECEDENT
| 9.01 | Conditions Precedent to First Advance | 64 |
| 9.02 | Conditions Precedent to Advances under Facility B | 66 |
| 9.03 | Conditions Precedent to all Advances | 67 |
ARTICLE X - DEFAULT AND REMEDIES
| 10.01 | Events of Default | 67 |
| 10.02 | Acceleration, etc. | 69 |
| 10.03 | Acceleration of Certain Contingent Obligations | 70 |
| 10.04 | Combining Accounts; Set-Off | 70 |
| 10.05 | Appropriation of Monies | 70 |
| 10.06 | No Further Advances | 71 |
| 10.07 | Judgment Currency | 71 |
| 10.08 | Remedies Cumulative | 71 |
| 10.09 | Performance of Covenants by Agent | 71 |
ARTICLE XI - THE AGENT AND THE LENDERS
| 11.01 | Decision-Making | 72 |
| 11.02 | Security | 73 |
| 11.03 | Application of Proceeds of Realization | 73 |
| 11.04 | Payments by Agent | 74 |
| 11.05 | Protection of Agent | 75 |
| 11.06 | Duties of Agent | 76 |
| 11.07 | Lenders' Obligations Several; No Partnership | 77 |
| 11.08 | Sharing of Information | 77 |
| 11.09 | Acknowledgement by Borrower | 77 |
| 11.10 | Amendments to Article XI | 77 |
| 11.11 | Deliveries, etc. | 77 |
| 11.12 | Agency Fee | 78 |
| 11.13 | Non-Funding Lender | 78 |
ARTICLE XII - CBA MODEL PROVISIONS
| 12.01 | CBA Model Provisions Incorporated by Reference | 79 |
| 12.02 | Inconsistencies with CBA Model Provisions | 80 |
ARTICLE XIII - GENERAL
| 13.01 | Waiver | 80 |
| 13.02 | Expenses of Agent and Lenders | 80 |
| 13.03 | Debit Authorization | 80 |
| 13.04 | General Indemnity | 81 |
| 13.05 | Environmental Indemnity | 81 |
| 13.06 | Survival of Certain Obligations despite Termination of Agreement | 82 |
| 13.07 | Interest on Unpaid Costs and Expenses | 82 |
| 13.08 | Notice | 82 |
| 13.09 | Severability | 83 |
| 13.10 | Further Assurances | 83 |
| 13.11 | Time of the Essence | 83 |
| 13.12 | Promotion and Marketing | 83 |
| 13.13 | Entire Agreement; Waivers and Amendments to be in Writing | 84 |
| 13.14 | Inconsistencies with Security | 84 |
| 13.15 | Confidentiality | 84 |
| 13.16 | Governing Law | 85 |
| 13.17 | Execution by Fax and Counterparts | 85 |
| 13.18 | Binding Effect | 85 |
"A" - Lenders and Lenders' Commitments
"C" - Rollover Notice
"D" - Substitution Notice
"E" - Repayment Notice
"F" - Borrowing Base Certificate
"G" - Compliance Certificate
"H" - Form of BA Equivalent Note
"I" - CBA Model Provisions
6.01(b) - Companies Information
6.01(h) - Material Permits
6.01(i) - Specific Permitted Liens
6.01(j) - Owned Properties
6.01(k) - Material leased Properties
6.01(l) - Intellectual Property
6.01(n) - Material Agreements
6.01(o) - Labour Agreements
6.01(p) - Environmental Matters
6.01(q) - Litigation
6.01(r) - Pension Plans
7.02(iii) - Investments existing on the Closing Date
This Agreement dated May 31, 2019 is made among:
ORGANIGRAM HOLDINGS INC.
THE LENDERS FROM TIME TO TIME
PARTY TO THIS AGREEMENT
as Administrative Agent
as Lead Arranger and Sole Bookrunner
For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by each party, the parties agree as follows:
ARTICLE I - INTERPRETATION
In this Agreement, the words and phrases set out in the CBA Model Provisions (as hereinafter defined) shall have the respective meanings set forth therein (subject to Section 12.01 hereof). In addition, the following words and phrases shall have the respective meanings set forth below:
"Acceleration Date" means the earlier of (i) the date of the occurrence of an Insolvency Event in respect of any Secured Company; and (ii) the date on which the Borrower fails to repay the Obligations in full pursuant to an Acceleration Notice issued by the Agent.
"Acceleration Notice" is defined in Section 10.02.
"Acceptable Appraisal" means an up-to-date appraisal in respect of the Property by an AACI appraiser in form and substance satisfactory to the Lenders which considers the following approaches to value: fair market, cost, and comparable and alternate use value on a hypothetical best use facility; together with a transmittal letter from such appraiser addressed to the Agent which permits the Agent and the Lenders to rely thereon.
"Adjusted GAAP" at any time means GAAP in effect at such time as if IFRS 16 had not been implemented.
"Advance" means an extension of credit by one or more of the Lenders to the Borrower pursuant to this Agreement, including for greater certainty an extension of credit in the form of a Prime-Based Loan, a Bankers' Acceptance, a BA Equivalent Loan or the issuance of a Letter of Credit, but for greater certainty does not include a Conversion or Rollover.
"Affiliate" is defined in the CBA Model Provisions.
"Agent" means BMO in its capacity as the administrative agent hereunder, and its successors in such capacity.
"Aggregate Net Hedge Liability" means, on any date of determination, the net aggregate amount of the Borrower's liability under all Hedge Transactions outstanding on such date in the event of a default or termination thereunder, calculated in accordance with the terms thereof (and for greater certainty, determined after netting any amounts payable to the Borrower thereunder against amounts payable by the Borrower thereunder).
"Agreement" means this credit agreement (including the Exhibits and Schedules) as it may be amended, supplemented, replaced or restated from time to time.
"AML Legislation" means all anti-money laundering, anti-terrorist financing, government sanction and "know your client" Laws in effect in any jurisdiction in which any Company carries on business or owns assets, including any guidelines or orders thereunder, specifically including the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada).
"Applicable Law" is defined in the CBA Model Provisions.
"Applicable Margin" means, in respect of any Availment Option and in respect of any Fiscal Quarter, the percentage in the column relating to such Availment Option in the following table which corresponds to the applicable Senior Funded Debt to EBITDA Ratio in respect of such Fiscal Quarter, which percentage shall be subject to adjustment from time to time as provided in Section 5.01(d); provided that from and after the Closing Date until the Interim Financial Statements and Compliance Certificate for the Fiscal Quarter ending May 31, 2019 are received by the Agent in accordance with Section 7.04(b), the Applicable Margin for each Availment Option shall be based on pricing level 5 in the table below:
| Pricing Level | Senior Funded Debt to EBITDA | Prime-Based Loans | Bankers' Acceptances / BA Equivalent Loans / Letter of Credit | Standby Fee |
| 1 | < 1.00:1 | [Redacted: Margin] | [Redacted: Margin] | [Redacted: Margin] |
| 2 | > 1.00:1 < 1.50:1 | [Redacted: Margin] | [Redacted: Margin] | [Redacted: Margin] |
| 3 | > 1.50:1 < 2.00:1 | [Redacted: Margin] | [Redacted: Margin] | [Redacted: Margin] |
| 4 | > 2.00:1 < 2.50: 1 | [Redacted: Margin] | [Redacted: Margin] | [Redacted: Margin] |
| 5 | > 2.50:1 | [Redacted: Margin] | [Redacted: Margin] | [Redacted: Margin] |
"Approved Jurisdiction" means a country in which it is legal in all political subdivisions therein (including for greater certainty on a federal, state and municipal basis) to undertake any Cannabis-Related Activities provided that in each case (i) such country has been approved in writing by the Required Lenders in their discretion and (ii) if required by the Agent, the ability to undertake Cannabis-Related Activities to the extent permitted by Applicable Law therein is confirmed by a legal opinion provided by the Borrower's counsel in such jurisdiction, in form and substance satisfactory to the Agent. The Required Lenders may in their discretion from time to time (i) upon receipt of a written request by the Borrower, designate any jurisdiction an Approved Jurisdiction provided that the above criteria are satisfied; and (ii) revoke the designation of any jurisdiction as an Approved Jurisdiction by written notice to the Borrower if such criteria are not satisfied. Each of Canada, Austria, Greece, Germany and Uruguay is an Approved Jurisdiction as at the date of this Agreement.
"Associate" has the meaning ascribed thereto in the Canada Business Corporations Act.
"Availment Option" means a method of borrowing which is available to the Borrower as provided herein.
"BA Equivalent Loan" means an Advance in Canadian Dollars made by a Non-BA Lender to the Borrower in respect of which the Borrower has issued a BA Equivalent Note.
"BA Equivalent Note" means a promissory note payable by the Borrower to a Non-BA Lender in the form of Exhibit "H" attached hereto.
"BA Lender" means a Lender identified in Exhibit "A" attached hereto as a Lender which will accept Bankers' Acceptances hereunder.
"Bankers' Acceptance" means a bill of exchange or a blank non-interest bearing depository bill as defined in the Depository Bills and Notes Act (Canada) drawn by the Borrower and accepted by a BA Lender in respect of which the Borrower becomes obligated to pay the face amount thereof to the holder (which may be a third party or such BA Lender) upon maturity.
"BMO" means Bank of Montreal and its successors and permitted assigns.
"Borrower" means Organigram Holdings Inc., a corporation subsisting under the federal laws of Canada.
"Borrowing Base Certificate" means a certificate delivered by the Borrower to the Agent in the form of Exhibit "F".
"Business Day" means any day on which the Agent is open for over-the-counter business in Toronto, Ontario, excluding Saturday, Sunday and any other day that is a statutory holiday in Toronto, Ontario.
"Canadian Dollars" or "CDN$" means the lawful money of Canada.
(a) any plant or seed, whether live or dead, from any species or subspecies of genus Cannabis, including Cannabis sativa, Cannabis indica and Cannabis ruderalis, Marijuana and Industrial Hemp and any part, whether live or dead, of the plant or seed thereof, including any stalk, branch, root, leaf, flower, or trichome;
(b) any material obtained, extracted, isolated, or purified from the plant or seed or the parts contemplated by clause (a) of this definition, including any oil, cannabinoid, terpene, genetic material or any combination thereof;
(c) any organism engineered to biosynthetically produce the material contemplated by clause (b) of this definition, including any micro-organism engineered for such purpose;
(d) any biologically or chemically synthesized version of the material contemplated by clause (b) of this definition or any analog thereof, including any product made by any organism contemplated by clause (c) of this definition;
(e) any other meaning ascribed to the term "cannabis" under Applicable Law in any Approved Jurisdiction, including the Cannabis Act and the Controlled Drugs and Substances Act (Canada); and
(f) any other meaning ascribed to the term "cannabis" under the Controlled Substances Act (United States).
"Cannabis Act" means An Act respecting cannabis and to amend the Controlled Drugs and Substances Act, the Criminal Code and other Acts, S.C. 2018, c. 16, as amended from time to time.
"Cannabis-Related Activities" means any activities, including advertising or promotional activities, relating to or in connection with the importation, exportation, cultivation, production, purchase, distribution or sale of Cannabis or Cannabis-related products.
"Cannabis Regulations" means Cannabis Regulations under the Cannabis Act, as amended from time to time and all other regulations made from time to time under the Cannabis Act or any other statute in an Approved Jurisdiction with respect to Cannabis-Related Activities.
"Capital Expenditures" means expenditures made directly or indirectly which are considered to be in respect of the acquisition or leasing of capital assets in accordance with GAAP, including the acquisition or improvement of Real Property, plant, machinery or equipment, whether fixed or removable.
"Capital Lease" means any lease of assets which in accordance with Adjusted GAAP would be required to be capitalized on the balance sheet of the lessee.
"Cash Equivalents" means any of the following:
direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the Government of Canada or of any Canadian province (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the Government of Canada or of such Canadian province), in each case maturing within one year from the date of acquisition thereof;