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(a)        Within sixty (60) calendar days after the Closing Date (or if such date is not a Business Day, then by the following Business Day), Buyer will deliver to Cannabist a revised balance sheet as of the Closing Date (prepared in accordance with GAAP and the methodologies and guidelines set forth on the Working Capital Schedule) and a statement setting forth Buyer’s calculation of the following items (each, a “Closing Item”): (i) Cash (as finally determined pursuant to this Section 2.4, “Final Cash”), (ii) Working Capital (as finally determined pursuant to this Section 2.4, “Final Working Capital”); (iii) the aggregate amount of Indebtedness of the Company as of the Closing (as finally determined pursuant to this Section 2.4, “Final Indebtedness”); (iv) the aggregate amount of Transaction Expenses as of the Closing (as finally determined pursuant to this Section 2.4, “Final Transaction Expenses”), and (v) the resulting calculation of the Final Closing Cash Payment (subject to adjustment in accordance with Section 2.8).

(b)        Cannabist shall have thirty (30) calendar days following the date of Buyer’s delivery of the statement of Closing Items under Section 2.4(a) to deliver a written notice (an “Objection Notice”) to the Buyer setting forth Cannabist’s computation of any or all of the Closing Items, as the case may be, and such information, arguments and support used in preparing such computation, after which time any undisputed Closing Items shall be final, conclusive and binding on the Parties. If Cannabist timely disputes any Closing Item, Buyer and Cannabist shall, for a period of twenty (20) calendar days after the delivery of the Objection Notice, use commercially reasonable and good faith efforts to attempt to resolve their differences in respect thereof; provided, that at any time after such 20 day period, either Buyer or Cannabist may elect to have Marcum LLP or such other qualified nationally recognized accounting firm chosen by Buyer and reasonably acceptable to Cannabist that has not performed services for any of Buyer or the Company Group (the “Valuation Firm”) resolve any Closing Items that remain in dispute. If Marcum LLP is unable or unwilling to serve as the Valuation Firm hereunder, Buyer and Cannabist shall jointly select another nationally recognized independent accounting firm. If Buyer and Cannabist are unable to agree upon such firm within ten (10) days, either party may request that the American Arbitration Association (AAA) select the Valuation Firm, and the appointment will be binding on the Parties. Cannabist and the Buyer shall each make a submission to Valuation Firm within fifteen (15) calendar days after the Valuation Firm’s engagement, which submission shall contain a computation of the Closing Items and information, arguments, and support for such computation. The Valuation Firm shall have thirty (30) days to review the Parties’ submissions. The determination of the Valuation Firm shall be final, conclusive and binding on the Parties, absent manifest error, and shall be enforceable as an arbitration award in any court of competent jurisdiction under the Federal Arbitration Act or its state law equivalents. All fees and expenses relating to the work, if any, to be performed by the Valuation Firm will be borne by Buyer and Cannabist, respectively, in the proportion that the aggregate dollar amount of the disputed Closing Items submitted to the Valuation Firm by Buyer or Cannabist that are unsuccessfully disputed by it (as finally determined by the Valuation Firm) bears to the aggregate dollar amount of disputed Closing Items submitted by Buyer and Cannabist. Except as provided in the preceding sentence, all other costs and expenses incurred by Buyer and Cannabist in connection with resolving any dispute hereunder before the Valuation Firm will be borne by the Party incurring such cost and expense. The Valuation Firm shall determine only those Closing Items submitted to the Valuation Firm and its determination will be based upon and consistent with the terms and conditions of this Agreement. The determination by the Valuation Firm will be based solely on presentations with respect to such disputed Closing Items by Buyer and Cannabist to the Valuation Firm and not on the Valuation Firm’s independent review. Buyer and Cannabist shall use their commercially reasonable efforts to make their respective presentations as promptly as practicable following submission to the Valuation Firm of the disputed Closing Items, and each of Buyer and Cannabist will be entitled, as part of its presentation, to respond to the presentation of the other and any questions and requests of the Valuation Firm. Each Party agrees to use commercially reasonable efforts to facilitate a prompt resolution by the Valuation Firm and shall not unreasonably withhold or delay to provide information reasonably requested by the Valuation Firm. In deciding any matter, the Valuation Firm (i) will be bound by the provisions of this Section 2.4 and (ii) absent manifest error, may not assign a value to any disputed Closing Item greater than the greatest value for such Closing Item claimed by either Buyer or Cannabist or less than the smallest value for such Closing Item claimed by Buyer or Cannabist. Notwithstanding anything to the contrary contained herein, at any time Buyer and Cannabist may agree to settle any Closing Item dispute, including any dispute submitted to the Valuation Firm, which agreement shall be in writing and final, conclusive and binding upon all of the Parties with respect to the subject matter of any such dispute so resolved; provided, that Buyer and Cannabist shall provide a copy of such agreement to the Valuation Firm and shall instruct the Valuation Firm not to resolve such dispute, it being agreed that if the Valuation Firm nonetheless resolves such dispute for any reason, the agreement of Buyer and Cannabist shall control.

 

(c)        If the Final Closing Cash Payment (as adjusted in accordance with Section 2.8) exceeds the Initial Closing Cash Payment (as adjusted in accordance with Section 2.8) (such excess amount, if any, the “Excess Amount”), then the principal amount of the Promissory Note shall be amended to increase the amount due thereunder by an amount equal to the Excess Amount (to be allocated ratably between the tranches of the Promissory Note in proportion to the principal amount of each such tranche outstanding immediately prior to such adjustment).

 

(d)         If the Final Closing Cash Payment (as adjusted in accordance with Section 2.8) is less than the Initial Closing Cash Payment (as adjusted in accordance with Section 2.8) (such shortfall amount, if any, the “Shortfall Amount”), then such Shortfall Amount shall be set off against the Promissory Note (applied first to accrued and unpaid interest and then to outstanding principal (to be allocated ratably between the tranches of the Promissory Note in proportion to the principal amount of each such tranche outstanding immediately prior to such adjustment)) by an amount equal to the Shortfall Amount.

 

(a)        Closing. Subject to the terms and conditions of this Agreement, the closing of the Transactions (the “Closing”) shall be consummated via electronic transmission of executed signature pages to the applicable Transaction Agreements no later than three (3) Business Days after the last of the conditions to Closing set forth in Article VII have been satisfied or waived (other than conditions which, by their nature, are to be satisfied on the Closing Date), or at such other time or on such other date as the Members and Buyer may mutually agree upon in writing; provided, that either the Buyer or the Members may, in their respective sole discretion, by written notice to the other Party (email being sufficient), elect to cause the Closing to occur on the last day of the calendar month in which such conditions are satisfied or waived (or, if such day is not a Business Day, the first Business Day immediately prior thereto). The day on which the Closing takes place shall be referred to as the “Closing Date”.

 

(b)         Company Closing Deliveries. At or prior to the Closing, the Members shall deliver, or cause to be delivered, to Buyer:

 

(i)       membership interest powers and assignments with respect to the Equity, in each case, duly executed by each applicable Member, substantially in the form attached hereto as Exhibit E;

 

(ii)        [intentionally omitted]

 

 

(iv)       certificates of good standing of each of the Companies issued not earlier than ten (10) days before the Closing Date by the Secretary of State or equivalent Governmental Entity of their respective jurisdictions of incorporation or formation and by the Secretary of State or equivalent Governmental Entity of each jurisdiction in which they are qualified to do business as a foreign entity;

 

(v)         written resignations from each officer and member of each Company’s board of directors or similar governing body and evidence of the termination of all Contracts with Insiders set forth on Schedule 3.18;

 

(vi)      evidence that the consents, notices, waivers, deliverables, and authorizations set forth on Schedule 3.2, including without limitations, under Cannabist’s (A) 9.25% senior notes due December 31, 2028 and (B) 9.0% senior secured convertible senior notes due December 31, 2028 (collectively, the “Notes”), have been obtained, in each case, in form and substance reasonably satisfactory to Buyer;

 

(vii)      a certificate, dated as of the Closing Date and signed by a duly authorized officer of each Company, that each of the conditions set forth in Section 7.2(a), Section 7.2(b) and Section 7.2(c) have been satisfied;

 

(viii)     properly completed and executed IRS Form W-9 (i) identifying each Company as an entity that is disregarded as separate from its owner within the meaning of Treasury Regulations Section 301.7701-2(c)(2)(i), and (ii) certifying that the owner of each Company and the Members are a “United States person” within the meaning of Code Section 7701(a)(30)(C) (pursuant to Section 7874(b) of the Code) and Section 1445(f)(3) of the Code and is exempt from U.S. backup withholding;

 

(ix)       the Promissory Note, duly executed by Cannabist, together with a duly executed intercreditor agreement with Buyer’s senior lenders (or their agent) in form and substance reasonably acceptable to Buyer’s senior lenders (or their agent) and Cannabist;

 

(x)        evidence of the termination of the Contracts set forth on Schedule 2.5(b)(x), in form and substance reasonably satisfactory to Buyer;

 

(xi)        [intentionally omitted]; and

 

(xii)      if the certificate of operation for the Additional Location has not been issued by the Ohio Division of Cannabis Control at or prior to the Closing, the MIPOA Documents duly executed by New Sub Member and New Sub.

 

(c)          Buyer Closing Deliveries.

 

(i)         At or prior to the Closing as set forth below, Buyer (or an Affiliate of Buyer) shall deliver, pay or issue (or cause to be delivered, paid or issued), as applicable:

 

(A)          to the Members, the Initial Closing Cash Payment;

 

(B)          if the certificate of operation for the Additional Location has not been issued by the Ohio Division of Cannabis Control at or prior to the Closing, to New Sub Member, the Additional Location Deposit;

 

(C)        the Promissory Note, duly executed by Buyer, together with a duly executed intercreditor agreement with Buyer’s senior lenders (or their agent) in a form reasonably acceptable to Buyer’s senior lenders (or their agent), Cannabist, and Buyer;

 

(D)          to the applicable payees as set forth on the Estimated Closing Statement, the Estimated Transaction Expenses;

 

(E)          to the applicable payees as set forth on the Estimated Closing Statement, the Estimated Indebtedness;

 

(F)          to Cannabist, a fully executed security agreement (the “Security Agreement”), granting Cannabist a junior security interest that is subordinate to the security interest of Buyer’s senior lenders, and other customary documentation related to the Promissory Note (including, for the avoidance of doubt, any necessary intercreditor agreement or financing statements or similar items to be recorded to evidence the junior lien securing the Promissory Note), each in form and substance reasonably satisfactory to Cannabist, Buyer’s senior lenders (or their agent), and Buyer;

 

(G)         a certificate, dated as of the Closing Date and signed by a duly authorized officer of Buyer, that each of the conditions set forth in Section 7.3(a) and Section 7.3(b) have been satisfied; and

 

(H)          if the certificate of operation for the Additional Location has not been issued by the Ohio Division of Cannabis Control at or prior to the Closing, to New Sub Member and New Sub, the MIPOA Documents duly executed by Buyer and/or its applicable Affiliates.

 

(ii)         The payments and issuances to be made by Buyer pursuant to Section 2.5(c)(i) shall be made to the accounts (including wire instructions) and in the amounts designated in writing by the applicable payees (including payees in connection with the Purchase Price, Transaction Expenses, and Indebtedness) no later than two (2) Business Days prior to the Closing, as memorialized in the funds flow to be mutually agreed to by Buyer and Cannabist prior to the Closing (the “Funds  Flow”), which Funds Flow shall include wire instructions and all other reasonable information requested by Buyer.

 

(a)          Notwithstanding anything to the contrary and for the avoidance of doubt, the Parties hereby acknowledge and agree that (i) except with respect to (A) the direct liabilities of the Companies, (B) the Assumed Payroll Liabilities and (C) to the extent the Parties enter into the TSA, any costs payable or reimbursable by Buyer or any of its Affiliates (including, following the Closing, any Company) pursuant to such TSA, neither the Buyer nor the Companies are assuming any obligations or liabilities, including without limitation income Tax liabilities, of Cannabist, the Members and/or any of their Affiliates (other than the Companies) (collectively, the “Excluded Liabilities”), (ii) Cannabist, the Members and their Affiliates (other than the Companies) shall be solely and fully responsible for paying, performing and discharging any Excluded Liabilities, and (iii) none of the Buyer, Buyer’s Affiliates, nor the Companies shall have any responsibility, obligation or liability for any Excluded Liability, whether now existing or hereafter arising.

 

(b)          Notwithstanding anything to the contrary herein and without limiting Section 2.7(a), the Parties acknowledge and agree that the following shall constitute Excluded Liabilities: any and all liabilities for United States federal, state or local income or franchise Taxes (including related interest, penalties, additions to Tax and costs of assessment or collection) that are imposed on, or asserted against, Cannabist, any Member or any of their respective Affiliates (other than the Companies) with respect to (i) any taxable period (or portion thereof) ending on or prior to the Closing Date, or (ii) the ownership or operation of the Companies or their assets on or prior to the Closing Date, whether such Taxes are asserted directly against such Person or are asserted against any Company or Buyer on the basis that any Company or Buyer is a transferee, successor, alter‑ego, nominee or otherwise liable for the Taxes of any Person (collectively, “Seller Income Tax Liabilities”). For greater certainty, Seller Income Tax Liabilities are Excluded Liabilities and shall not be assumed by Buyer or any Company.

 

 

(a)        Schedule 3.3(a) of the Disclosure Schedules sets forth the issued and outstanding equity interests of each Company, the names of the record and beneficial owners thereof and the number of equity interests held by such owners. All Equity was validly issued in compliance with applicable Law and any requirements set forth in each Company’s Governing Documents and has been duly authorized and approved. All Equity is fully paid and non-assessable. No Equity is subject to any preemptive rights, rights of first refusal or restrictions on transfer. Columbia Care owns and holds of record 100% of the Equity free and clear of all Liens of each Columbia Care Sub. Green Leaf Medical owns and holds of record 100% of the Equity of Green Leaf Ohio. Upon consummation of the Transactions, the Buyer will hold good and marketable title to all of the Equity of each Company, free and clear of any Liens (except Permitted Liens or Liens resulting from acts, events, or circumstances solely within the control of the Buyer and restrictions under applicable securities Laws). There are no outstanding or authorized options, warrants, Contracts, calls, puts, rights to subscribe, conversion rights or other similar rights to which any Company is a party, or which are binding upon such Company providing for the issuance, disposition or acquisition of any equity interests of such Company (other than this Agreement). There are no outstanding or authorized equity appreciation, phantom interests, profits interests or similar rights with respect to each Company. Other than the Governing Documents of each Company, there are no shareholder or equityholder agreements, voting trusts, proxies or other Contracts or understandings with respect to the voting of the Equity of such Company. No Company is subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any of the Equity of such Company. No former direct or indirect holder of any equity interests of each Company has any claim or rights against such Company that remains unresolved or to which such Company has or may have any liability, and, to the Companies’ Knowledge, no such claim is threatened. No Company has any obligation to make any investment (in the form of a loan, capital contribution or otherwise) in any Person.

 

(b)        Each Company has no, and has never had, any subsidiaries and does not own (and has not owned or held) any equity interests of any other Person or any other interest in any other Person or any rights to acquire any such equity interests or other interest.

 

(a)        Attached as Schedule 3.4(a) are the following financial statements (collectively, the “Financial Statements”): (i) the unaudited balance sheet of the Companies as of December 31, 2025 (the “Latest Balance Sheet” and the date thereof, the “Latest Balance Sheet Date”), and the related statement of profit and loss for the 12-month period then ended, and (ii) the unaudited balance sheet of the Companies as of December 31, 2024 and December 31, 2023 and the related statement of profit and loss for each of the 12-month periods then ended. The Financial Statements of the Companies: (A) are true, accurate and complete in all material respects, do not omit to state any fact necessary to make the statements contained therein in light of the circumstances in which they were made, not misleading, and were prepared in accordance with GAAP applied on a consistent basis throughout the periods indicated, (B) are consistent with the books and records of the Companies (which, in turn, are accurate and complete in all material respects), (C) present fairly in all material respects the financial condition of the Companies as of the respective dates thereof and the operating results of the Companies for the periods covered thereby and (D) do not reflect any transactions which are not bona fide transactions.

 

(b)       Except as set forth on Schedule 3.4(b), the Companies have no liabilities or obligations of any nature whatsoever (whether accrued, absolute, known, unknown, matured, unmatured, fixed, contingent, liquidated, unliquidated or otherwise), and there is no existing condition, fact or set of circumstances that has resulted in or would reasonably be expected to result in any such liabilities or obligations, except for: (i) performance obligations under Contracts described on Schedule 3.9(a) (or under Contracts entered into in the Ordinary Course of Business which, because of the dollar thresholds set forth in Section 3.9(a), are not required to be described on Schedule 3.9(a), none of which involves non-performance or a breach), (ii) liabilities reflected (and adequately reserved for) on the face of the Latest Balance Sheet and (iii) liabilities of the type set forth on the face of the Latest Balance Sheet which have arisen after the date of the Latest Balance Sheet in the Ordinary Course of Business (none of which is a liability for breach of Contract or involves a tort, infringement, claim, lawsuit, warranty or environmental, health or safety matter) none of which individually or in the aggregate is material to the business, results of operations or financial condition of any Company.

 

(a)         Since the Latest Balance Sheet Date, there has been no Material Adverse Effect.

 

(b)        Except as set forth on Schedule 3.5(b) and in connection with the Canadian Proceeding or a Chapter 15 Proceeding, since the Latest Balance Sheet Date, no Company has taken any action described in Section 5.1 that, if such action had been taken after the date hereof and prior to the Closing without the prior written consent of Buyer, would have violated Section 5.1.

 

(a)         Schedule 3.6(a) sets forth a complete list of all real property owned by the Companies (individually, an “Owned Real Property” and, collectively, the “Owned Real Properties”), which such schedule shall include for each Owned Real Property, (i) the address and parcel identification of such Owned Real Property, and (ii) the applicable Company that is the owner of such Owned Real Property. With respect to the Owned Real Properties, the applicable Company (i) except as such may be limited by bankruptcy or insolvency Proceedings, has good and marketable title to such Owned Real Property and to all improvements thereon, in each case, free and clear of all Liens except for Permitted Liens; (ii) has not leased or otherwise granted to any Person the right to use or occupy such Owned Real Property except to a Company, and (iii) has not granted any outstanding options, rights of first offer or rights of first refusal to purchase such Owned Real Property or any portion thereof or interest therein.

 

(b)        Schedule 3.6(b) sets forth a complete list of all leases or subleases of real property of each of the Companies, in effect on the date hereof, with respect to which each Company is the tenant, lessee, or sublessee (individually, a “Real Estate Lease” and, collectively, the “Real Estate Leases”; collectively with the Owned Real Properties, the “Real Property”). Except as such may be limited by bankruptcy, insolvency, reorganization or other Laws affecting creditors’ rights generally and by general equitable principles, each Company has a valid, binding and enforceable leasehold interest under each of the Real Estate Leases, free and clear of all Liens (other than Permitted Liens). None of the Companies which is a party to any of the Real Estate Leases, or, to the Companies’ Knowledge, any other party thereto, is in material breach or material default under any of the Real Estate Leases other than breaches or defaults which have been cured or waived in writing, and no event has occurred or circumstance or fact exists which, with the delivery of notice, the passage of time or both, would constitute such a material breach or material default, or permit the termination or acceleration of rent under the Real Estate Leases.

 

(c)       Each Company has delivered to Buyer true, correct and complete copies of the Real Estate Leases. (i) To the Companies’ Knowledge, the possession and quiet enjoyment of the Leased Real Property under the Real Estate Leases has not been disturbed and there are no disputes with respect to such Real Estate Leases; (ii) to the knowledge of the Companies, the Real Estate Leases are legal, valid, in full force and effect, binding and enforceable against each Company and the other party thereof in accordance with its terms and is the entire agreement to which such Company is a party with respect to such Leased Real Property; (iii) no party to the Real Estate Leases is in breach or default under the Real Estate Leases and, to the knowledge of the Companies, no event has occurred or circumstance or fact exists which, with the delivery of notice, the passage of time or both, would constitute such a breach or default, or permit the termination, modification or acceleration of rent under the Real Estate Leases; (iv) no security deposit or portion thereof deposited with respect to the Real Estate Leases has been applied in respect of a breach or default under the Real Estate Leases which has not been redeposited in full; (v) no Company owes, nor to the knowledge of the Companies will owe in the future, any brokerage commissions or finder’s fees with respect to the Real Estate Leases; (vi) all public utilities currently serving the Leased Real Property and public and quasi-public improvements upon or adjacent to the Leased Real Property, as applicable (including, all applicable electric lines, water lines, gas lines and telephone lines): (A) are adequate to service the requirements of the Leased Real Property and each Company, and all payments for the same have been made, and (B) are installed and operating, and all installation and connection charges have been paid for in full; (vii) the Leased Real Property is in compliance with all applicable zoning ordinances; and (viii) except with respect to the Additional Location, no Company has transferred, and prior to the Closing will not transfer, any development rights applicable to the Leased Real Property and make, any filings with any Governmental Entity for any construction on the Leased Real Property that has not been completed.

 

(d)       Schedule 3.6(d) sets forth a description of all material Leasehold Improvements for each Leased Real Property. Each Company has good and marketable title to its Leasehold Improvements, free and clear of all Liens and there are no outstanding options, rights of first offer or rights of first refusal to purchase any such Leasehold Improvements or any portion thereof or interest therein. No Leasehold Improvements are subject to reversion to the landlord or any third party.

 

(e)        The Real Property and the Leasehold Improvements comprise all of the real property used or intended to be used in, and that is necessary in the operation of, the business of the Companies.

 

(f)         To the Companies’ Knowledge, (i) there are no structural deficiencies or latent defects affecting any of the Leasehold Improvements and (ii) there are no facts or conditions affecting any of the Leasehold Improvements which would, individually or in the aggregate, interfere in any material respect with the use or occupancy of the Leasehold Improvements or any portion thereof in the operation of the business of the Companies. To the Companies’ Knowledge, the Leasehold Improvements, in all material respects, are in good condition and repair and the systems located therein are in good working order and adequate to operate such facilities as currently used and do not require material repair or replacement in order to serve their intended purposes, except for scheduled maintenance, repairs and replacements conducted or required in the Ordinary Course of Business with respect to the operation of the Leased Real Property

 

(g)       The Companies have not received written notice of any condemnation, expropriation or other Proceeding in eminent domain pending or threatened, affecting any Leased Real Property or any portion thereof or interest therein.

 

(h)       All buildings, fixtures, tangible personal property and leasehold improvements used in the business of any Company are located on the Real Property and, to the Companies’ Knowledge, none of the Leasehold Improvements encroach on (i) any adjoining property owned by others or public rights of way, or (ii) any part of the Leased Real Property which is subject to or encumbered by a right-of-way, easement (but specifically excluding easements that are blanket in nature) or similar Contract.

 

(a)         Except as set forth on Schedule 3.8(a) of the Disclosure Schedules, the Companies have filed all material Tax Returns required to have been filed by it prior to the Closing Date pursuant to applicable Laws, and each of the Company Group has filed all material Tax returns related to the profits, income, gain or assets derived from the Companies prior to the Closing Date required to be filed by such member of the Company Group pursuant to applicable Laws, and all such Tax Returns are accurate, complete and correct in all material respects.

 

(b)        The Companies and the Company Group (with respect to the profits, interest, gain or assets derived from the Companies) have paid all material Taxes due and payable by it prior to the Closing Date (whether or not shown or required to be shown on any Tax Return).

 

(c)       The Companies have withheld or collected (i) all material amounts from payments to its employees, agents, contractors, nonresidents, shareholders, lenders, and other Persons, and (ii) all sales, use, ad valorem, and value added Taxes, in each case to the extent required by applicable Law.  The Companies have remitted all such withheld or collected Taxes to the proper Governmental Entity in accordance with all applicable Laws and all Forms W-2 and 1099 required with respect thereto have been completed and filed.

 

(d)       None of the Companies have received any claim in writing by a Governmental Entity in a jurisdiction where each Company does not file Tax Returns or pay Taxes that each Company is or may be subject to taxation by or required to file Tax Returns in that jurisdiction, which claim has not been resolved. No audits or other legal Proceedings are in progress, pending, or have been threatened in writing with regard to any material Taxes or Tax Returns of or with respect to, each Company. No Company has commenced a voluntary disclosure Proceeding in any state or local or non-U.S. jurisdiction that has not been fully resolved or settled. No Company has executed or filed with any Governmental Entity any agreement or other document extending or having the effect of extending the statute of limitations for assessment, collection, or other imposition of any material Tax (other than extensions as of right, for six (6) months or less from the original due date, to file a Tax Return), which agreement or other document remains in effect.

 

(e)        There are no Liens for Taxes (other than Permitted Liens) upon any of the assets of the Companies.

 

(f)         Each Company is properly classified as a partnership or a disregarded entity for U.S. federal and all applicable state income Tax purposes. None of the Companies has made an election to be treated as a corporation, including an S-corporation, for U.S. federal, state, local or foreign Tax purposes.

 

(g)         None of the Companies is party to or bound by any Tax Sharing Agreements.

 

(h)        Neither the Members, any Company nor Cannabist has made a request for a private letter ruling, a request for administrative relief, a request for technical advice, a request for a change of any method of accounting, or other request pending with any Governmental Entity that relates to the Taxes or Tax Returns of the Companies. No power of attorney granted by the Companies with respect to any Taxes is currently in force.

 

(a)        Except as set forth on Schedule 3.9(a) of the Disclosure Schedules, none of the Companies is party to, or bound by (excluding Company Employee Benefit Plans), any: (i) collective bargaining agreement or other Contract with any labor organization; (ii) employment, staffing, independent contractor, retirement, equity based, profit sharing, bonus (including transaction or retention bonus), consulting, incentive, separation, change in control, deferred compensation or severance Contract; (iii) Contract relating to Indebtedness or to mortgaging, pledging or otherwise placing a Lien on any of the Companies’ assets or to the guaranty of any obligation for borrowed money or otherwise; (iv) letter of credit arrangements; (v) Contract with respect to the lending or investing of funds; (vi) Contract relating to the development, ownership, use, registration, enforcement, of or exercise of any rights under any Intellectual Property; (vii) Contract or lease under which any Company is a lessee of or holds or operates any property, real or personal, owned by any other Person; (viii) Contract under which any Company is a lessor of or permits any third party to hold or operate any property, real or personal, owned or controlled by any Company; (ix) distribution, marketing, or broker agreement or material supplier or maintenance agreement; (x) Contract not terminable by each Company upon thirty (30) days’ or less notice without penalty; (xi) Contract which contains any provision with respect to exclusivity in favor of any third Person; (xii) Contract prohibiting, or in any way limiting or otherwise restricting any Company from freely engaging in business anywhere in the world or otherwise prohibiting competition or restricting the use or enforcement of any Intellectual Property, including any settlement, co- existence, consent-to-use or standstill agreement; (xiii) Contract which contains any minimum volume requirement, right of first refusal or most favored nations provision; (xiv) Contract which contains any provision with respect to exclusivity in favor of any third Person; (xv) Contract prohibiting, limiting or otherwise restricting in any way any Company from soliciting customers or suppliers, or soliciting or hiring employees, of any other Person; (xvi) Contract involving the settlement of any Proceeding or threatened Proceeding; (xvii) Contract (including letters of intent) relating to any business acquisition or disposition of any Person or line of business (whether by merger, consolidation or other business combination, sale of securities, sale of assets or other similar transaction) entered into during the past three years; (xviii) Contract containing an obligation concerning or consisting of a joint venture, alliance or similar arrangement; (xix) Contract under which any Company is, or may become, obligated to pay an amount in respect of indemnification obligations, deferred purchase price, purchase price adjustment, or otherwise in connection with any acquisition or disposition of assets or securities, merger, consolidation or other business combination; (xx) Contract relating to a sale/leaseback arrangement; (xxi) “single source” or “sole source,” requirements, output or other supply Contract containing exclusivity provisions; (xxii) Contract of any other member of the Company Group under which any Company receives any benefit, (xxiii) Contract with any Governmental Entity or any Contract that is a subcontract or sublicense with respect to any Contract or sublicense among one or more third parties and a Governmental Entity; (xxiv) Contract with an Insider; and (xxv) any other Contract material to the business of any Company or its assets not otherwise disclosed in sections (i) through (xxiv), above, it being understood that any Contract with a value in excess of $50,000 shall be considered material.

 

(b)        (i) No Material Contract has been breached (and there are no anticipated breaches) in any respect or cancelled by any party thereto, and, to the Companies’ Knowledge, there has been no event which, upon giving of notice or lapse of time or both, would constitute such a breach or default, (ii) each Company and, to each Company’s Knowledge, each counterparty has performed all obligations under each Material Contract required to be performed and no facts exist which would render such performance unlikely, (iii) no Material Contract contains any termination right upon a change in control, (iv) each Material Contract is legal, valid, binding and enforceable against the applicable Company and, to the Companies’ Knowledge, against each other party thereto, and is in full force and effect, and (v) to the Companies’ Knowledge no party to a Material Contract has made a claim in writing of force majeure. For purposes of this Agreement, “Material Contract” means each Contract listed or required to be listed on Schedule 3.9(a).

 

(a)       Schedule 3.10 of the Disclosure Schedules sets forth a complete and correct list of issued patents, registered trademarks, domain names and copyrights, and pending applications for any of the foregoing and all material and not easily replaceable unregistered Intellectual Property that are owned by any Company (including Trademarks and Software), except for the Member Retained Names) (the “Company Intellectual Property”), and such schedule shall include the owner of such Company Intellectual Property. All registered Intellectual Property has been maintained effective by the filing of all necessary filings, maintenance and renewals and timely payment of requisite fees. No loss or expiration of any Company Intellectual Property is threatened, pending or reasonably foreseeable, except for patents expiring at the end of their statutory terms (and not as a result of any act or omission by the Companies, including failure by the Companies to pay any required maintenance fees).  All Company Intellectual Property is freely transferrable without consent of any Person (subject to required filings with respect to registered Intellectual Property).

 

(b)        The Companies have taken all necessary and desirable action to maintain and protect all of the Company Intellectual Property. The Companies have taken commercially reasonable measures to protect the confidentiality of all trade secrets and any other confidential information of the Companies (and any confidential information owned by any Person to whom the Company has a confidentiality obligation). No such trade secrets or other confidential information have been disclosed by the Companies to any Person other than pursuant to a written Contract restricting the disclosure and use of such trade secrets or any other confidential information by such Person. No current or former founder, employee, contractor or consultant of the Companies have any right, title or interest, directly or indirectly, in whole or in part, in any Company Intellectual Property. The Companies have obtained from all Persons (including all current and former founders, employees and contractors) who have created, invented, improved reduced to practice, developed, or made during the period of their employment or consulting relationship with any material Company Intellectual Property for the Companies, valid and enforceable written assignments of any such Intellectual Property to the Company, and the Companies have delivered true and complete copies of such assignments to Buyer. No Person is in violation of any such written confidentiality or assignment Contracts.

 

(c)       The IT Assets are operational, fulfill the purposes for which they were acquired or developed, have security, back-ups and disaster recovery arrangements in place and hardware and Software capacity, support, maintenance and trained personnel which are sufficient in all material respects for the current and anticipated future needs of the business of the Companies. The Companies have disaster recovery and security plans, procedures and facilities and have taken reasonable steps consistent with or exceeding industry standards to safeguard the availability, security and integrity of the IT Assets and all data and information stored thereon, including from unauthorized access and infection by Malicious Code.  The Companies have maintained in the Ordinary Course of Business all required licenses and service contracts, including the purchase of a sufficient number of license seats for all Software, with respect to the IT Assets. The Companies are running the most current production release of all material local software and SaaS services, and all such software has, in all material respects, been updated to include all critical security patches and updates recommended by the applicable vendors. The IT Assets have not suffered any security breach or material failure.

 

(d)      The Companies and the former and current products, services and conduct of the business of the Companies, including the manufacture, importation, use, offer for sale, sale, licensing, distribution or other commercial exploitation thereof have not infringed, misappropriated, or otherwise violated, and do not infringe, misappropriate or otherwise violate, any Intellectual Property rights or rights of publicity of any Person.  The Companies are not the subject of any pending Proceeding that either alleges a claim of infringement, misappropriation or other violation of any Intellectual Property rights of any Person or challenges the ownership, use, patentability, registration, validity or enforceability of any Company Intellectual Property, and no such claims have been asserted or threatened against any Company at any time.  No Person has notified the Companies that any of such Person’s Intellectual Property rights are infringed, misappropriated or otherwise violated by the Companies or that the Company requires a license to any of such Person’s Intellectual Property rights. There is no actual unauthorized use, interference, disclosure, infringement, misappropriation or other violation by any Person of any of the Company Intellectual Property, and no written or oral claims alleging such infringement, misappropriation or other violation have been made against any Person by the Companies.

 

(e)        The Companies are and always have been in material compliance with all applicable Privacy and Security Requirements. Any data collected, used or held for use by the Companies was collected, Processed, stored and provided in compliance in all material respects with all Privacy and Security Requirements, including any requirements to provide notice, obtain consent and/or implement technical measures to ensure that data does not constitute Personal Information; and there are no restrictions on the Companies’ exploitation of such data except under the Privacy and Security Requirements; and no such data has been deleted, destroyed or transferred in such a way so as to be inaccessible by the Companies following the Closing, except as required under the Privacy and Security Requirements. The Companies have not, and no third-party Processing of Protected Data on behalf of the Companies have, experienced any Security Breaches, and neither the Companies nor the Members are aware of any notices or complaints from any Person regarding such a Security Breach. The Companies have not received any written notices or complaints from any Person (including any Governmental Entity) regarding the unauthorized Processing of Protected Data or non-compliance with applicable Privacy and Security Requirements, and, to the Companies’ Knowledge, there are no facts or circumstances which could reasonably serve as the basis for any such complaints. The Companies do not engage in the sale, as defined by applicable Privacy and Security Requirements, of Personal Information.

 

(f)         The Companies have valid and legal rights to Process all Protected Data that is Processed by or on behalf of the Companies in connection with the use and/or operation of its products, services and business, and the execution, delivery, or performance of this Agreement will not affect these rights or violate any applicable Privacy and Security Requirements.  The Companies have implemented, and has required all third parties that receive Personal Information or Protected Data from or on behalf of the Company to implement, reasonable physical, technical and administrative safeguards consistent with industry standards that are designed to protect Protected Data from unauthorized access by any person, and to ensure compliance in all material respects with all applicable Privacy and Security Requirements.

 

(a)       To the Knowledge of the Companies, no officer, executive, key employee or independent contractor and no group of employees and/or independent contractors of the Companies have any plans to terminate his, her or their status as an employee or independent contractor of the Companies, including upon or in connection with the consummation of the Transactions. No employee or temporary employee is employed under a Contract which cannot be terminated by Buyer with less than two weeks’ notice. None of the Companies is a party to nor bound by any collective bargaining agreement or other Contract with any labor organization and none of the Companies is obligated to nor has undertaken to recognize any labor organization as the representative of its employees. Within the past three years, none of the Companies has (i) experienced any strikes, work stoppages or slowdowns, labor grievances, claims of unfair labor practices or other material labor disputes or labor shortages or (ii) engaged in any unfair labor practices. There are no ongoing or threatened union organizing or decertification activities with respect to employees of any Company and no such activities have occurred.

 

(b)        Schedule 3.13(b) contains a true, complete and accurate list of each employee of the Companies, as well as each other employee of Cannabist, the Members or their Affiliates who exclusively provides services to the Business and, for each such employee, the date(s) of hire, position and title (if any), work location, current rate of compensation and rate of compensation during the 2025 calendar year (in each case, including bonuses, commissions and incentive compensation, if any), employing entity, whether such person is exempt or non-exempt for overtime pay purposes, the number of such person’s accrued but unpaid paid time off, whether such person is absent from active employment and, if so, the date such person became inactive (if known), the reason for such inactive status and, if applicable, the anticipated date of return to active employment. The employment of all employees is “at will”, without severance, and may be terminated by the Companies, at any time, for any reason or no reason, in accordance with applicable Law.

 

(c)       Schedule 3.13(c) of the Disclosure Schedules contains a true, complete and accurate list of each individual independent contractor providing services to the Companies, the date(s) of engagement, position and title (if any), name of an applicable contact person and contact details, location where services are provided by such independent contractor, and hourly, monthly and annual remuneration of each independent contractor.

 

(d)       Each Company, (i) within the past three (3) years, is and has been in compliance in all material respects with all applicable Laws respecting employment, including provisions thereof relating to employment practices, classification of employment, terms and conditions of employment, wages and hours, pay equity, equal employment, immigration, human rights and accommodation obligations, occupational health and safety, workers compensation, and employee privacy, in each case, with respect to current and former employees and independent contractors; (ii) except as disclosed on Schedule 3.13(d)(ii) of the Disclosure Schedules, is not liable for, and has not incurred any material unresolved liability with respect to, any arrears of wages, any accrued, earned or owed but unpaid salaries, commissions, bonuses, severance, paid time-off, accrued and unused vacation, other earned but unpaid compensation or other compensation for services performed by any current or former employees or independent contractors, nor any Taxes or any penalty for failure to comply with any of the foregoing; and (iii) is not liable for, and has not incurred any material liability with respect to, any payment to any trust or other fund governed by or maintained by or on behalf of any Governmental Entity, with respect to unemployment compensation benefits, social security, insurance or similar benefits who performs services for or on behalf of the Companies have been properly classified by each Company as either an employee, independent contractor, or consultant in accordance with applicable Law. There is no written or verbal commitment of agreement to increase wages or modify the terms and conditions of employment or engagement of any employee, temporary employee or independent contractor of any Company. The Companies have delivered to Buyer true and complete copies of all Permits issued under applicable employment Laws. Such Permits are listed in Schedule 3.13(d) of the Disclosure Schedules, and the Companies have been operating in compliance with such Permits. Within the past three (3) years, none of the Companies have implemented any plant closing or layoff of employees triggering notice requirements under the Worker Adjustment and Retraining Notification Act of 1988, as amended, or any similar or related Law (the “WARN Act”). Schedule 3.13(d)(iii) of the Disclosure Schedules sets forth a true and complete list of all employees who have been laid off by the Company, by date and location, in the 90 day period preceding the date of this Agreement.

 

(e)         The Companies have provided Buyer with all inspection reports under applicable occupational health and safety Laws relating to each Company. There are no outstanding inspection Orders or any pending or threatened Proceedings made under applicable occupational health and safety Laws relating to the Companies, and there have been no fatal or critical accidents within the last three years that would be reasonably likely to lead to Proceedings against the Companies or the Members under applicable occupational health and safety Laws. The Companies have complied in all respects with any Orders issued under applicable occupational health and safety Laws, and there are no outstanding appeals of any Orders applicable to occupational health and safety Laws relating to the Companies.

 

(f)        To the Knowledge of the Companies, all employees of each Company employed at any time in the past three (3) years, including seasonal and temporary employees, have presented proper documentation (including Form I-9) for employment in the United States with such Company. Within the past three (3) years none of the Companies has been the subject of any audit of its immigration, employment verification or Form I-9 practices by any Governmental Entity nor has any Company had any penalties assessed against it by any Governmental Entity due to its hire of unauthorized workers or failure to comply with applicable document collection and retention requirements.

 

(g)       Within the past three (3) years, there has not been a complaint or other labor-related or employment-related charge or complaint pending or threatened against the Company with the Equal Employment Opportunity Commission or any equivalent state agency, the National Labor Relations Board, the United States Department of Labor or similar Government Entity. There has not been any claim, controversy or investigation relating to, or any act or allegation of or relating to, race or sex-based discrimination, race-based or sexual harassment or sexual misconduct, or breach of any policy of any Company relating to the foregoing, in each case involving such Company and any current or former employee, officer, director, executive, or manager, individual independent contractor or other service provider  (in relation to his or her work at such Company) of such Company, nor have there been any settlements or similar out-of-court or pre-litigation arrangements relating to any such matters, nor has any such claim, settlement or other arrangement been proposed or threatened.