Exhibit 10.3

 

MULTI-PARTY PA AGREEMENT

  

This Multi-Party PA Agreement (the “Multi-Party PA Agreement”) is made as of
this 9th day of August, 2019 between and among IIP-PA 4 LLC, a Delaware limited
liability company (the “Landlord”); PHARMACANN PENN PLANT LLC, a Pennsylvania
limited liability company (the “Tenant”); and MEDMEN ENTERPRISES INC., a British
Columbia corporation (“MedMen”).

 

The foregoing entities are sometimes individually referred to herein as a
“Party” and collectively referred to as the “Parties”. Any initially capitalized
term not separately defined herein shall have the meaning set forth in the Lease
(as defined below).

 

RECITALS:

 

A.                 Reference is made to that certain Lease Agreement dated
August 9, 2019 (the “Lease”) between the Landlord and Tenant regarding certain
real property and the improvements located at located at Lot No. 4 in Scott
Technology Park, Scott Township, Pennsylvania (as more fully described in the
Lease, the “Property”). The Lease, along with the Purchase and Sale Agreement
under which the Landlord acquired the Property from Tenant, the Development
Agreement (the “Development Agreement”) executed by and between the Tenant,
Landlord, and IIP OPERATING PARTNERSHIP, LP, a Delaware limited partnership
(“IIP”), and that certain side letter agreement entered into by and between
Landlord and Tenant in connection therewith (the “Letter Agreement”), all of
which documents are dated as of the date of this Multi-Party PA Agreement, are
collectively referred to herein as the “Transaction Documents.”

 

B.                  PharmaCann LLC (“PharmaCann”) is the owner of 98% of the
direct or indirect ownership interests in Tenant, and PharmaCann Foundation Inc.
is the owner of the remaining 2%.

 

C.                  PharmaCann and MedMen have entered into a Business
Combination Agreement dated December 23, 2018 (the “BCA”) to combine the
businesses conducted by MedMen and PharmaCann under which New MedMen Inc., a
British Columbia corporation (“MedMen ParentCo”), will be the surviving parent
company for both MedMen and PharmaCann (the transaction contemplated under the
terms of the BCA is referred to herein as the “Merger Transaction”).

 

D.                 The Parties desire to memorialize certain rights and
obligations with respect to the Lease and to amend the Lease as more fully set
forth below.

 

In consideration of the foregoing and of the rights and obligations of the
Parties hereunder and other good and valuable consideration, the sufficiency and
receipt of which is hereby acknowledged, the Parties hereby agree as follows:

 

1.           Recitals/Exhibits. The Recitals set forth above and Exhibit 1
attached hereto are incorporated herein and made a part of this Multi-Party PA
Agreement.

 

2.           Landlord Acknowledgement of Permitted Transfer. Landlord hereby
acknowledges that the Transfer from Tenant to MedMen as a result of the
consummation of the Merger Transaction shall constitute a Permitted Transfer
under the Lease.

 

3.           MedMen Consent to the Transaction Documents. MedMen hereby consents
and approves of (a) the Transaction Documents and (b) the execution of the
Transaction Documents by Tenant and the applicable Guarantor entities that are
affiliates of Tenant.

 

4.          Amendments to the Leases. Each of Landlord and Tenant hereby agrees
to amend the Lease as set forth below, which amendments will only be effective
upon satisfaction of the conditions described in this Section 4. The amendments
described in Subsection 4(a) and (b) shall be deemed effective only upon the
closing and consummation of the Merger Transaction in accordance with the BCA.
The closing date of the Merger Transaction shall be deemed to be the effective
date of the amendments to the Lease pursuant to this Section 4. The amendment
described in Subsection 4(c) shall be deemed effective only (i) upon receipt of
all of the License Change Approvals (as defined below) and the expiration of any
appeal periods in connection therewith, and (ii) the Tenant becoming, directly
or indirectly, a majority-owned subsidiary of MedMen ParentCo.

 

 

 

 

(a)           Guarantees: Section 33 of the Lease is deleted in its entirety and
replaced with the following:

 

“Tenant acknowledges and agrees that Landlord entered into the Multi-Party PA
Agreement on the basis of Landlord's evaluation of the overall financial
condition, business operations and potential business expansion opportunities of
Tenant and New MedMen Inc., a British Columbia corporation (“New Guarantor”),
both at the Premises and at other locations in and outside of the State in which
the Premises is located. As such, promptly following written notice from
Landlord to both Tenant and MedMen ParentCo, Tenant will cause New Guarantor to
promptly execute and deliver to Landlord a guaranty in the form attached to the
Multi-Party PA Agreement as Exhibit 1 and incorporated herein by reference (the
“New Guaranty”). For purposes of this Lease, the term “Guarantor” under the
Lease shall be deemed to include the New Guarantor, and the term “Guaranty”
under this Lease shall be deemed to include such New Guaranty. The obligations
of each Guarantor shall be joint and several and Tenant shall cause each
Guarantor to execute and deliver such further documentation as may be reasonably
required to confirm such Guarantor's full and unconditional guaranty of Tenant's
obligations under this Lease. Notwithstanding anything in this Lease or any
Guaranty to the contrary, following Tenant’s written request (and subject to
satisfaction of the conditions set forth below), Landlord agrees to execute a
commercially reasonable form of subordination agreement that subordinates
Landlord's rights under a Guaranty to an institutional lender’s or third party
financing source’s rights with respect to a contemplated financing by the
applicable Guarantor, provided that the following conditions are satisfied: 1)
the subordination of the Landlord’s rights under the applicable Guaranty is a
material requirement of the lender or other third party financing source to
provide the financing to the Guarantor; and 2) at the time of Landlord's
execution of such subordination agreement, (a) neither Tenant nor any Guarantor
is then in default of its obligations under the Lease or any Guaranty; and (b)
neither Tenant nor any Guarantor has defaulted on its obligations under either
the Lease or any Guaranty more than two (2) times during the immediately
preceding six (6) month period.”

 

(b)           Financial Reporting: Section 34.1 of the Lease is deleted in its
entirety and replaced with the following:

 

“To induce Landlord to enter into this Lease, MedMen ParentCo agrees that it
shall, within one-hundred and twenty (120) days after the end of MedMen
ParentCo's financial year, furnish Landlord with a certified copy of MedMen
ParentCo’s audited year-end consolidated financial statements for the previous
year. MedMen ParentCo represents and warrants that all financial statements,
records and information furnished by MedMen ParentCo to Landlord in connection
with this Lease are true, correct and complete in all respects. If audited
financials are not otherwise prepared, unaudited financials certified by an
officer of MedMen ParentCo as true, correct and complete in all respects shall
suffice for purposes of this Section. In addition, promptly after produced,
MedMen ParentCo shall furnish Landlord, upon Landlord's request, unaudited
financial statements for the quarter and stub period then-ended for MedMen
ParentCo's first, second and third fiscal quarters. The provisions of this
Section shall not apply at any time while MedMen ParentCo's are traded on any
nationally recognized Canadian or United States stock exchange.”

 

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(c)           Put Right in Lease: Section 32 of the Lease is deleted in its
entirety.

 

5.           License and Lease Transfer. The Tenant, and MedMen (as it relates
to MedMen, only to the extent, and for so long as, MedMen is required to do so
under the BCA) agree to continue to use commercially reasonable efforts to
obtain all required approvals, consents and/or authorizations (or written
confirmation that there is no objection) with respect to the change in ownership
and control of the Tenant pursuant to the Merger Transaction and the resulting
change in control of the license issued by the Pennsylvania Department of Health
with respect to the Property (the “License Change Approvals”). Tenant agrees to
promptly provide Landlord with all documents, instruments and correspondence
evidencing the License Change Approvals upon receipt thereof. Promptly following
Landlord’s request, the Tenant will execute, and MedMen will cause MedMen
ParentCo to execute, any documents required to be executed and delivered under
the Lease (as amended pursuant to Section 4) following receipt of the License
Change Approvals.

 

6.           Entire Agreement/Waiver/Modification. This Multi-Party PA
Agreement, including all Exhibits hereto, and each Lease (as applicable) contain
the entire agreement between the Parties pertaining to the subject matter hereof
and fully supersedes all prior written or oral agreements and understandings
between the Parties pertaining to such subject matter, all of which are merged
herein. No modification of or supplement to any term or provision of this
Multi-Party PA Agreement shall be effective unless the same is made in writing
and signed by all Parties. No waiver respecting any term or provision of this
Multi-Party PA Agreement or any Exhibit shall be effective unless the same is
made in writing and signed by the Party benefited by the term or provision. No
written and signed modification, waiver or supplement of or relating to this
Multi-Party PA Agreement or any Exhibit shall have any force or effect beyond
the specific instance or purpose for which the same is given or made.

 

7.           Notices. Any notice, consent, demand, invoice, statement or other
communication required or permitted to be given under this Multi-Party PA
Agreement shall made in accordance with the provisions of the applicable Lease.
Any notice to MedMen shall be sent to the following address:

 

10115 Jefferson Boulevard

Culver City, CA 90232

E-mail: _________________

Attention: General Counsel

 

8.           Severability.  Any provision of this Multi-Party PA Agreement that
shall prove to be invalid, void or illegal shall in no way affect, impair or
invalidate any other provision hereof, and all other provisions of this
Multi-Party PA Agreement shall remain in full force and effect and shall be
interpreted as if the invalid, void or illegal provision did not exist.

 

9.           Counterparts; Facsimile and PDF Signatures. This Multi-Party PA
Agreement may be executed in one or more counterparts, each of which, when taken
together, shall constitute one and the same document. A facsimile or portable
document format (PDF) signature on this Multi-Party PA Agreement shall be
equivalent to, and have the same force and effect as, an original signature.

 

10.        Attorneys' Fees. If any Party commences an action, proceeding,
demand, claim, action, cause of action or suit against any other Party arising
out of or in connection with this Multi-Party PA Agreement, then the
substantially prevailing Party shall be reimbursed by the Party at fault for all
reasonable costs and expenses, including reasonable attorneys' fees and
expenses, incurred by the substantially prevailing Party in such action,
proceeding, demand, claim, action, cause of action or suit, and in any appeal in
connection therewith (regardless of whether the applicable action, proceeding,
demand, claim, action, cause of action, suit or appeal is voluntarily withdrawn
or dismissed).

 

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11.         Governing Law; Jurisdiction and Venue. This Multi-Party PA Agreement
shall be governed by and construed in accordance with the laws of the State of
Delaware without giving effect to any choice or conflict of law provision or
rule (whether of the State of Delaware or any other jurisdiction). Each of the
parties hereto hereby irrevocably and unconditionally submits, for itself and
its property, to the exclusive jurisdiction of the Delaware Court of Chancery
and any appellate court from any thereof, in any action or proceeding arising
out of or relating to this Multi-Party PA Agreement or for recognition or
enforcement of any judgment relating thereto, and each of the parties hereby
irrevocably and unconditionally (a) agrees not to commence any such action or
proceeding except in the Delaware Court of Chancery, (b) agrees that any claim
in respect of any such action or proceeding may be heard and determined in the
Delaware Court of Chancery and any appellate court from any thereof, (c) waives,
to the fullest extent it may legally and effectively do so, any objection which
it may now or hereafter have to the laying of venue of any such action or
proceeding in the Delaware Court of Chancery, and (d) waives, to the fullest
extent it may legally and effectively do so, the defense of an inconvenient
forum to the maintenance of such action or proceeding in the Delaware Court of
Chancery.

 

12.         Waiver of Jury Trial. To the extent permitted by applicable laws,
the Parties waive trial by jury in any action, proceeding or counterclaim
brought by the other Party hereto related to matters arising out of or in any
way connected with this Multi-Party PA Agreement.

 

13.         No Third Party Beneficiary. This Multi-Party PA Agreement is for the
sole benefit of the Parties and their respective heirs, legatees, devisees,
executors, administrators and permitted successors and assigns, and nothing in
this Multi-Party PA Agreement shall give or be construed to give any other
person or entity any legal or equitable rights.

 

14.         Successors and Assigns. Each of the covenants, conditions and
agreements contained in this Multi-Party PA Agreement shall inure to the benefit
of and shall apply to and be binding upon the Parties hereto and their
respective heirs, legatees, devisees, executors, administrators and permitted
successors and assigns.

 

15.         Authority to Bind MedMen ParentCo. MedMen represents and warrants
that, by signing this Multi-Party PA Agreement, it has full authority to bind
MedMen ParentCo to perform any and all obligations of MedMen ParentCo under this
Multi-Party PA Agreement, now and in the future.

 

16.         Time of the Essence. Time is of the essence with respect to the
performance of every provision in this Multi-Party PA Agreement.

 

[NO FURTHER TEXT ON THIS PAGE – SIGNATURES PAGES FOLLOW]

 

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IN WITNESS WHEREOF, the undersigned Parties have executed this Multi-Party PA
Agreement as of the date first above written.

 

IIP-PA 4 LLC,   PHARMACANN PENN PLANT LLC, a Delaware limited liability company
  a Pennsylvania limited liability company         By:   /s/ Brian Wolfe   By:
/s/ Brett Novey Name: Brian Wolfe   Name: Brett Novey Its: Vice President,
General Counsel and Secretary   Its: Authorized Signatory        

MEDMEN ENTERPRISES, INC.,

a British Columbia corporation

            By:

/s/ Adam Bierman

    Name: Adam Bierman     Its: CEO    

 

 

 

 

EXHIBIT 1

 

FORM OF GUARANTY

 

This Guaranty of Lease ("Guaranty") is executed effective on the ____ day of
[_______], 20__, by [_______], a [_______] ("Guarantor"), whose address for
notices is [________________], in favor of IIP-PA 4 LLC, a Delaware limited
liability company ("Landlord"), whose address for notices is 11440 West Bernardo
Court, Suite 220, San Diego, California 92127, Attn: General Counsel.

 

For good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Guarantor covenants and agrees as follows:

 

1.           Recitals. This Guaranty is made with reference to the following
recitals of facts which constitute a material part of this Guaranty:

 

(a)                Landlord, as Landlord, and PharmaCann Penn Plant LLC, a
Pennsylvania limited liability company, as Tenant ("Tenant"), entered into that
certain Lease dated as of [______], 2019 (the "Lease"), with respect to the
property located at Lot No. 4 in Scott Technology Park, Scott Township,
Pennsylvania, as more particularly described in the Lease (the "Leased
Premises").

 

(b)                Guarantor is the indirect parent to Tenant and is therefore
receiving a substantial benefit for executing this Guaranty.

 

(c)                Landlord would not have entered into the Lease with Tenant
without having received the Guaranty executed by Guarantor as an inducement to
Landlord.

 

(d)                By this Guaranty, Guarantor intends to absolutely,
unconditionally and irrevocably guarantee the full, timely, and complete (i)
payment of all rent and other sums required to be paid by Tenant under the Lease
and any other indebtedness of Tenant, (ii) performance of all other terms,
covenants, conditions and obligations of Tenant arising out of the Lease
(including, without limitation, reasonable attorneys' fees and disbursements and
all litigation costs and expenses incurred or payable by Landlord or for which
Landlord may be responsible or liable, or caused by any such uncured default),
and (iii) payment of any and all expenses (including reasonable attorneys' fees
and expenses and litigation expenses) incurred by Landlord in enforcing any of
the rights under the Lease or this Guaranty within five (5) days after
Landlord's demand thereafter (collectively, the "Guaranteed Obligations").

 

2.           Guaranty. From and after the Execution Date (as such term is
defined under the Lease), Guarantor absolutely, unconditionally and irrevocably
guarantees, as principal obligor and not merely as surety, to Landlord, the
full, timely and unconditional payment and performance, of the Guaranteed
Obligations strictly in accordance with the terms of the Lease, as such
Guaranteed Obligations may be modified, amended, extended or renewed from time
to time. This is a Guaranty of payment and performance and not merely of
collection. Guarantor agrees that Guarantor is primarily liable for and
responsible for the payment and performance of the Guaranteed Obligations.
Guarantor shall be bound by all of the provisions, terms, conditions,
restrictions and limitations contained in the Lease which are to be observed or
performed by Tenant, the same as if Guarantor was named therein as Tenant with
joint and several liability with Tenant, and any remedies that Landlord has
under the Lease against Tenant shall apply to Guarantor as well. If Tenant
defaults in any Guaranteed Obligation under the Lease, Guarantor shall in lawful
money of the United States, pay to Landlord on demand the amount due and owing
under the Lease. Guarantor waives any rights to notices of acceptance,
modifications, amendment, extension or breach of the Lease. If Guarantor is a
natural person, it is expressly agreed that this guaranty shall survive the
death of such guarantor and shall continue in effect. The obligations of
Guarantor under this Guaranty are independent of the obligations of Tenant or
any other guarantor. Guarantor acknowledges that this Guaranty and Guarantor's
obligations and liabilities under this Guaranty are and shall at all times
continue to be absolute and unconditional in all respects and shall be the
separate and independent undertaking of Guarantor without regard to the
genuineness, validity, legality or enforceability of the Lease, and shall at all
times be valid and enforceable irrespective of any other agreements or
circumstances of any nature whatsoever which might otherwise constitute a
defense to this Guaranty and the obligations and liabilities of Guarantor under
this Guaranty or the obligations or liabilities of any other person or entity
(including, without limitation, Tenant) relating to this Guaranty or the
obligations or liabilities of Guarantor hereunder or otherwise with respect to
the Lease or to Tenant. Guarantor hereby absolutely, unconditionally and
irrevocably waives any and all rights it may have to assert any defense, set-off
(except to the extent expressly provided for under the Lease), counterclaim or
cross-claim of any nature whatsoever with respect to this Guaranty or the
obligations or liabilities of Guarantor under this Guaranty or the obligations
or liabilities of any other person or entity (including, without limitation,
Tenant) relating to this Guaranty or the obligations or liabilities of Guarantor
under this Guaranty or otherwise with respect to the Lease, in any action or
proceeding brought by the holder hereof to enforce the obligations or
liabilities of Guarantor under this Guaranty. This Guaranty sets forth the
entire agreement and understanding of Landlord and Guarantor, and Guarantor
acknowledges that no oral or other agreements, understandings, representations
or warranties exist with respect to this Guaranty or with respect to the
obligations or liabilities of Guarantor under this Guaranty. The obligations of
Guarantor under this Guaranty shall be continuing and irrevocable (a) during any
period of time when the liability of Tenant under the Lease continues, and (b)
until all of the Guaranteed Obligations have been fully discharged by payment,
performance or compliance. If at any time all or any part of any payment
received by Landlord from Tenant or Guarantor or any other person under or with
respect to the Lease or this Guaranty has been refunded or rescinded pursuant to
any court order, or declared to be fraudulent or preferential, or are set aside
or otherwise are required to be repaid to Tenant, its estate, trustee, receiver
or any other party, including as a result of the insolvency, bankruptcy or
reorganization of Tenant or any other party (an "Invalidated Payment"), then
Guarantor's obligations under the Guaranty shall, to the extent of such
Invalidated Payment be reinstated and deemed to have continued in existence as
of the date that the original payment occurred. This Guaranty shall not be
affected or limited in any manner by whether Tenant may be liable, with respect
to the Guaranteed Obligations individually, jointly with other primarily, or
secondarily.

 

 

 

3.           No Impairment of Guaranteed Obligations. Guarantor further agrees
that Guarantor's liability for the Guaranteed Obligations shall in no way be
released, discharged, impaired or affected or subject to any counterclaim,
setoff or deduction by (a) any waiver, consent, extension, indulgence,
compromise, release, departure from or other action or inaction of Landlord
under or in respect of the Lease or this Guaranty, or any obligation or
liability of Tenant, or any exercise or non-exercise of any right, remedy, power
or privilege under or in respect to the Lease or this Guaranty, (b) any change
in the time, manner or place of payment or performance of the Guaranteed
Obligations, (c) the acceptance by Landlord of any additional security or any
increase, substitution or change therein, (d) the release by Landlord of any
security or any withdrawal thereof or decrease therein, (e) any assignment of
the Lease or any subletting of all or any portion of the Leased Premises (with
or without Landlord's consent), (f) any holdover by Tenant beyond the term of
the Lease (g) any termination of the Lease, (h) any release or discharge of
Tenant in any bankruptcy, receivership or other similar proceedings, (i) the
impairment, limitation or modification of the liability of Tenant or the estate
of Tenant in bankruptcy or of any remedy for the enforcement of Tenant's
liability under the Lease resulting from the operation of any present or future
provisions of any bankruptcy code or other statute or from the decision in any
court, or the rejection or disaffirmance of the Lease in any such proceedings,
(j) any merger, consolidation, reorganization or similar transaction involving
Tenant, even if Tenant ceases to exist as a result of such transaction, (k) the
change in the corporate relationship between Tenant and Guarantor or any
termination of such relationship, (l) any change in the direct or indirect
ownership of all or any part of the shares in Tenant, or (m) to the extent
permitted under applicable law, any other occurrence or circumstance whatsoever,
whether similar or dissimilar to the foregoing, which might otherwise constitute
a legal or equitable defense or discharge of the liabilities of Guarantor or
which might otherwise limit recourse against Guarantor. Guarantor further
understands and agrees that Landlord may at any time enter into agreements with
Tenant to amend and modify the Lease, and may waive or release any provision or
provisions of the Lease, and, with reference to such instruments, may make and
enter into any such agreement or agreements as Landlord and Tenant may deem
proper and desirable, without in any manner impairing or affecting this Guaranty
or any of Landlord's rights hereunder or Guarantor's obligations hereunder,
unless otherwise agreed in writing thereunder or under the Lease.

 

 

 

4.           Remedies.

 

a)                 If Tenant defaults with respect to the Guaranteed
Obligations, and if Guarantor does not fulfill Tenant's obligations within
thirty (30) days following its receipt of written notice of such default from
Landlord, Landlord may at its election proceed immediately against Guarantor,
Tenant, or any combination of Tenant, Guarantor, and/or any other guarantor. It
is not necessary for Landlord, in order to enforce payment and performance by
Guarantor under this Guaranty, first or contemporaneously to institute suit or
exhaust remedies against Tenant or other liable for any of the Guaranteed
Obligations or to enforce rights against any collateral securing any of it.
Guarantor hereby waives any right to require Landlord to join Tenant in any
action brought hereunder or to commence any action against or obtain any
judgment against Tenant or to pursue any other remedy or enforce any other
right. If any portion of the Guaranteed Obligations terminates and Landlord
continues to have any rights that it may enforce against Tenant under the Lease
after such termination, then Landlord may at its election enforce such rights
against Guarantor. Unless and until all Guaranteed Obligations have been fully
satisfied, Guarantor shall not be released from its obligations under this
Guaranty irrespective of: (i) the exercise (or failure to exercise) by Landlord
of any of Landlord's rights or remedies (including, without limitation,
compromise or adjustment of the Guaranteed Obligations or any part thereof); or
(ii) any release by Landlord in favor of Tenant regarding the fulfillment by
Tenant of any obligation under the Lease.

 

b)                 Notwithstanding anything in the foregoing to the contrary,
Guarantor hereby covenants and agrees to and with Landlord that Guarantor may be
joined in any action by or against Tenant in connection with the Lease.
Guarantor also agrees that, in any jurisdiction, it will be conclusively bound
by the judgment in any such action by or against Tenant (wherever brought) as if
Guarantor were a party to such action even though Guarantor is not joined as a
party in such action.

 

5.           Waivers. With the exception of the defense of prior payment,
performance or compliance by Tenant or Guarantor of or with the Guaranteed
Obligations which Guarantor is called upon to pay or perform, or the defense
that Landlord's claim against Guarantor is barred by the applicable statute of
limitations, Guarantor hereby waives and releases all defenses of the law of
guaranty or suretyship to the extent permitted by law.

 

6.          Rights Cumulative. All rights, powers and remedies of Landlord under
this Guaranty shall be cumulative and in addition to all rights, powers and
remedies given to Landlord by law.

 

7.           Representations and Warranties. Guarantor hereby represents and
warrants that (a) Landlord has made no representation to Guarantor as to the
creditworthiness or financial condition of Tenant; (b) Guarantor has full power
to execute, deliver and carry out the terms and provisions of this Guaranty and
has taken all necessary action to authorize the execution, delivery and
performance of this Guaranty; (c) Guarantor's execution and delivery of, and the
performance of its obligations under, this Guaranty does not conflict with or
violate any of Guarantor's organizational documents, or any contract, agreement
or decree which Guarantor is a party to or which is binding on Guarantor; (d)
the individual executing this Guaranty on behalf of Guarantor has the authority
to bind Guarantor to the terms and conditions of this Guaranty; (e) Guarantor
has been represented by counsel of its choice in connection with this Guaranty;
(f) this Guaranty when executed and delivered shall constitute the legal, valid
and binding obligations of Guarantor enforceable against Guarantor in accordance
with its terms; and (g) there is no action, suit, or proceeding pending or, to
the knowledge of Guarantor, threatened against Guarantor before or by any
governmental authority which questions the validity or enforceability of, or
Guarantor's ability to perform under, this Guaranty.

 

 

 

8.           Subordination. In the event of Tenant's insolvency or the
disposition of the assets of Tenant, through bankruptcy, by an assignment for
the benefit of creditors, by voluntary liquidation, or otherwise, the assets of
Tenant applicable to the payment of all claims of Landlord and/or Guarantor
shall be paid to Landlord and shall be first applied by Landlord to the
Guaranteed Obligations. Any indebtedness of Tenant now or hereafter held by
Guarantor, whether as original creditor or assignee or by way of subrogation,
restitution, reimbursement, indemnification or otherwise, is hereby subordinated
in right of payment to the Guaranteed Obligations. So long as an uncured event
of default exists under the Lease, (a) at Landlord's written request, Guarantor
shall cause Tenant to pay to Landlord all or any part of any funds invested in
or loaned to Tenant by Guarantor which Guarantor is entitled to withdraw or
collect and (b) any such indebtedness or other amount collected or received by
Guarantor shall be held in trust for Landlord and shall forthwith be paid over
to Landlord to be credited and applied against the Guaranteed Obligations.
Subject to the foregoing, Guarantor shall be entitled to receive from Landlord
any amounts that are, from time to time, due to Guarantor in the ordinary course
of business. Until all of Tenant's obligations under the Lease are fully
performed, Guarantor shall have no right of subrogation against Tenant by reason
of any payments, acts or performance by Guarantor under this Guaranty.

 

9.           Governing Law. This Guaranty shall be governed by and construed in
accordance with the laws of the State of Pennsylvania, United States of America,
without regard to principles of conflicts of laws. TO THE FULLEST EXTENT
PERMITTED BY LAW, GUARANTOR HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY
CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS GUARANTY.
EACH PARTY IRREVOCABLY CONSENTS TO THE JURISDICTION OF THE STATE COURTS SITUATED
IN OR HAVING JURISDICTION OVER SCOTT TOWNSHIP, PENNSYLVANIA IN ANY ACTION THAT
MAY BE BROUGHT FOR THE ENFORCEMENT OF THIS GUARANTY (WITH THE EXPRESS AGREEMENT
THAT NO ACTION MAY BE BROUGHT IN FEDERAL COURT RELATING IN ANY WAY TO THIS
GUARANTY OR THE LEASE).

 

10.         Attorneys' Fees. In the event any litigation or other proceeding
("Proceeding") is initiated by any party against any other party to enforce this
Guaranty, the prevailing party in such Proceeding shall be entitled to recover
from the unsuccessful party all costs, expenses, and actual reasonable
attorneys' fees relating to or arising out of such Proceeding.

 

11.         Modification. This Guaranty may be modified only by a contract in
writing executed by Guarantor and Landlord.

 

12.         Invalidity. If any provision of the Guaranty shall be invalid or
unenforceable, the remainder of this Guaranty shall not be affected by such
invalidity or unenforceability. In the event, and to the extent, that this
Guaranty shall be held ineffective or unenforceable by any court of competent
jurisdiction, then Guarantor shall be deemed to be a tenant under the Lease with
the same force and effect as if Guarantor were expressly named as a co-tenant
therein with joint and several liability.

 

 

 

13.         Successors and Assigns. Unless otherwise agreed in writing or under
the Lease, this Guaranty shall be binding upon and shall inure to the benefit of
the successors-in-interest and assigns of each party to this Guaranty.

 

14.         Notices. Any notice, consent, demand, invoice, statement or other
communication required or permitted to be given hereunder shall be in writing
and shall be given by (a) personal delivery, (b) overnight delivery with a
reputable international overnight delivery service, such as FedEx, or (c)
facsimile or email transmission, so long as such transmission is followed within
one (1) business day by delivery utilizing one of the methods described in
subsections (a) or (b). Any such notice, consent, demand, invoice, statement or
other communication shall be deemed delivered (x) upon receipt, if given in
accordance with subsection (a); (y) one business (1) day after deposit with a
reputable international overnight delivery service, if given if given in
accordance with subsection (b); or (z) upon transmission, if given in accordance
with subsection (c). Except as otherwise stated in this Guaranty, any notice,
consent, demand, invoice, statement or other communication required or permitted
to be given pursuant to this Guaranty shall be addressed to Guarantor or
Landlord at the address set forth above in the introductory paragraph of this
Guaranty. Either party may, by notice to the other given pursuant to this
Section, specify additional or different addresses for notice purposes.

 

15.         Waiver. Any waiver of a breach or default under this Guaranty must
be in a writing that is duly executed by Landlord and shall not be a waiver of
any other default concerning the same or any other provision of this Guaranty.
No delay or omission in the exercise of any right or remedy shall impair such
right or remedy or be construed as a waiver.

 

16.         Withholding. Unless otherwise agreed in the Lease, any and all
payments by Guarantor to Landlord under this Guaranty shall be made free and
clear of and without deduction for any and all present or future taxes, duties,
levies, imposts, deductions, assessments, fees, withholdings or similar charges,
and all liabilities with respect thereto (collectively, "Taxes"). If Guarantor
shall be required by any applicable laws to deduct any Taxes from or in respect
of any sum payable under this Guaranty to Landlord: (a) the sum payable shall be
increased as necessary so that after making all required deductions, the
Landlord receives an amount equal to the sum it would have received had no such
deductions been made; (b) Guarantor shall make such deductions; and (c)
Guarantor shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable laws.

 

17.         Financial Condition of Tenant. Landlord shall have no obligation to
disclose or discuss with Guarantor Landlord's assessment of the financial
condition of Tenant. Guarantor has adequate means to obtain information from
Tenant on a continuing basis concerning the financial condition of Tenant and
its ability to perform its Guaranteed Obligations, and Guarantor assumes
responsibility for being and keeping informed of Tenant's financial condition
and of all circumstances bearing upon the risk of Tenant's failure to perform
the Guaranteed Obligations.

 

18.         Bankruptcy. So long as the Guaranteed Obligations remain
outstanding, Guarantor shall not, without Landlord's prior written consent,
commence or join with any other person in commencing any bankruptcy or similar
proceeding of or against Tenant. Guarantor's obligations hereunder shall not be
reduced, limited, impaired, discharged, deferred, suspended or terminated by any
bankruptcy or similar proceeding (voluntary or involuntary) involving Tenant or
by any defense that Tenant may have by reason of an order, decree or decision of
any court or administrative body resulting from any such proceeding. To the
fullest extent permitted by law, Guarantor will permit any trustee in
bankruptcy, receiver, debtor in possession, assignee for the benefit of
creditors or similar person to pay to Landlord or allow the claim of Landlord in
respect of any interest, fees, costs, expenses or other Guaranteed Obligations
accruing or arising after the date on which such case or proceeding is
commenced.

 

 

 

19.         Conveyance or Transfer. Without Landlord's written consent,
Guarantor shall not convey, sell, lease or transfer any of its properties or
assets to any person or entity to the extent that such conveyance, sale, lease
or transfer could have a material adverse effect on Guarantor's ability to
fulfill any of the Guaranteed Obligations.

 

20.         Financials. Guarantor acknowledges and agrees to comply with the
financial reporting requirements set forth in Section 33.1 of the Lease.

 

21.         Joint and Several Liability. Guarantor's liability under this
Guaranty shall be joint and several with any and all other Guarantors in
accordance with the terms and conditions of the Lease.

 

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IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be signed by its
respective officer thereunto duly authorized, all as of the date first written
above.

 

GUARANTOR

 

NEW MEDMEN INC.,

a British Columbia corporation

 

By:     Name:     Title: