CERTAIN PORTIONS OF THIS EXHIBIT (INDICATED BY “[***]”) HAVE BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.
Exhibit 10.1
LOAN AND SECURITY AGREEMENT
This LOAN AND SECURITY AGREEMENT (as amended, restated, supplemented or otherwise modified from time to time, this “Agreement”) dated as of August 11, 2023 (the “Closing Date”) is entered into among MIND medicine (Mindmed) INC., a corporation incorporated under the laws of the Province of British Columbia (“Borrower Representative”), and each other Person party hereto as a borrower set forth on Schedule 1 hereto from time to time (collectively, “Borrowers”, and each, a “Borrower”), and each other Person party hereto or party to any other Loan Document as a guarantor from time to time (collectively, “Guarantors” and each, a “Guarantor”, and together with Borrowers, collectively, “Loan Parties”, and each, a “Loan Party”), K2 HEALTHVENTURES LLC, as a lender, and the other lenders from time to time party hereto (collectively, “Lenders”, and each, a “Lender”), K2 HEALTHVENTURES LLC, as administrative agent for Lenders (in such capacity, together with its successors, “Administrative Agent”) and collateral agent for the Lenders under the Canadian Security Documents (in such capacity, together with its successors, “Canadian Collateral Agent”), and ANKURA TRUST COMPANY, LLC, as collateral trustee for Lenders (in such capacity, together with its successors, “Collateral Trustee”).
AGREEMENT
Borrower Representative, each Loan Party from time to time party hereto, Administrative Agent, Collateral Agents and Lenders hereby agree as follows:
Accounting terms not defined in this Agreement shall be construed in accordance with GAAP, and calculations and determinations shall be made following GAAP, consistently applied. Capitalized terms not otherwise defined in this Agreement shall have the meanings set forth on Exhibit A. All other terms contained in this Agreement, unless otherwise indicated, shall have the meaning provided by the Code to the extent such terms are defined therein. As used in the Loan Documents, the word “shall” is mandatory, the word “may” is permissive, the word “or” is not exclusive, the words “includes” and “including” are not limiting, the singular includes the plural, and numbers denoting amounts that are set off in brackets are negative. Unless otherwise specified, all references in this Agreement or any Annex or Schedule hereto to a “Section,” “subsection,” “Exhibit,” “Annex,” or “Schedule” shall refer to the corresponding Section, subsection, Exhibit, Annex, or Schedule in or to this Agreement. For purposes of the Loan Documents, whenever a representation or warranty is made to a Person’s knowledge or awareness, knowledge or awareness means the actual knowledge, after reasonable investigation, of any Responsible Officer of such Person.
Borrowers shall use the proceeds of the Term Loans for working capital and other general corporate purposes and/or to further support commercial activities and/or business development opportunities. Once repaid, the Term Loans may not be reborrowed.
Notwithstanding the foregoing provisions of this Section 2.2(d), (i) any Prepayment Notice may state that such prepayment is conditioned upon the effectiveness of a refinancing or any other transaction, in which case such Prepayment Notice may be revoked by Borrower on or prior to the specified effective date of such prepayment if such condition is not satisfied, and (ii) in the event that Borrower Representative delivers the Prepayment Notice to Administrative Agent, Lenders shall have the option, exercisable in their sole discretion, to convert a portion of the outstanding Loans principal up to the Conversion Amount into Conversion Shares pursuant to Section 2.2(e) below, which conversion may be made contingent on the effectiveness of the refinancing or other transaction set forth in the Prepayment Notice.
Nothing in this Agreement, is intended to or shall, constitute the Collateral Trustee or any other Person, other than the pledging Loan Party, a member or shareholder (whether listed or unlisted, registered or beneficial) of an Unlimited Company, until such time as notice is given hereunder that the Administrative Agent or Collateral Trustee acting at the direction of the Administrative Agent (subject to the terms of the Collateral Trust Agreement) is exercising remedies under this Agreement or any other Loan Document and further steps are taken pursuant hereto or thereto so as to register the Collateral Trustee or such other Person, as specified in such notice, as the holder of the ULC Shares.
For the avoidance of doubt, except with the express written consent of the Collateral Trustee or upon the exercise of the rights, remedies, powers or privileges of the Collateral Trustee to sell, transfer, convey or otherwise dispose of ULC Shares in accordance with this Agreement, no Loan Party shall cause or permit, or enable an Unlimited Company to cause or permit, (and no provision of this Agreement or actions taken by the Collateral Trustee pursuant to this Agreement shall apply, or be deemed to apply, so as to cause or permit) the Collateral Trustee to, and the Collateral Trustee shall not:
Each Loan Party represents and warrants as follows:
Each Loan Party shall, and shall cause each other Loan Party to, do all of the following:
Information required to be delivered pursuant to Section 6.2 may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date on which Borrower Representative posts such information, posted on its website or at https://www.sec.gov (or any successor website thereto), subject to notification thereof in the next Compliance Certificate delivered.
No Loan Party shall, or shall cause or permit any of its Subsidiaries to, do any of the following:
Any one of the following shall constitute an event of default (an “Event of Default”) under this Agreement:
Loan Parties shall assemble the Collateral if Collateral Trustee or Canadian Collateral Agent requests and make it available as Collateral Trustee and Canadian Collateral Agent, as the case may be, designates. The applicable Collateral Agent may enter premises where the Collateral is located, take and maintain possession of any part of the Collateral, and pay, purchase, contest, or compromise any Lien which appears to be prior or superior to its security interest and pay all expenses incurred. Each Loan Party grants each Collateral Agent a license to enter and occupy any of its premises, without charge, to exercise any of such Collateral Agent’s rights or remedies. Each Collateral Agent is hereby granted a non-exclusive, royalty-free license or other right to use, without charge, a Loan Party’s labels, Patents, Copyrights, mask works, rights of use of any name, trade secrets, trade names, Trademarks, and advertising matter, or any similar property as it pertains to the Collateral, in completing production of, advertising for sale, and selling any Collateral and, in connection with such Collateral Agent’s exercise of its rights under this Section, a Loan Party’s rights under all licenses and all franchise agreements inure to such Collateral Agent’s benefit. If, after the acceleration of the Obligations, a Loan Party receives proceeds of Collateral, such Loan Party shall deliver such proceeds to the applicable Collateral Agent, for the ratable benefit of the Secured Parties, to be applied to the Obligations.
All notices, consents, requests, approvals, demands, or other communication by any party to this Agreement or any other Loan Document must be in writing and shall be deemed to have been validly served, given, or delivered: (a) upon the earlier of actual receipt and three (3) Business Days after deposit in the U.S. mail, first class, registered or certified mail return receipt requested, with proper postage prepaid; (b) upon confirmation of receipt, when sent by electronic mail transmission; (c) one (1) Business Day after deposit with a reputable overnight courier with all charges prepaid; or (d) when delivered, if hand-delivered by messenger, all of which shall be addressed to the party to be notified and sent to the address, or email address indicated below. Administrative Agent, Collateral Trustee, Canadian Collateral Agent, Lenders and Loan Parties may change their respective mailing or electronic mail addresses by giving the other party written notice thereof in accordance with the terms of this Section 10.
If to Loan Parties: | [***] |
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With a copy, not constituting notice, to: | [***] |
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If to Collateral Trustee: | [***] |
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With a copy, not constituting notice, to: | [***] |
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If to Administrative Agent, Canadian Collateral Agent or Lenders:
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With a copy to (but not constituting notice, and excluding Loan Requests and regular reporting): | [***] |
Except as otherwise expressly provided in any of the Loan Documents, this Agreement and the other Loan Documents shall be governed by, and construed in accordance with, the laws of the State of New York without regard to principles of conflicts of law. Each Loan Party hereby submits to the exclusive jurisdiction of the State and Federal courts in New York County, City of New York, New York; provided, however, that nothing in this Agreement shall be deemed to operate to preclude any Collateral Agent from bringing suit or taking other legal action in any other jurisdiction to realize on the Collateral or any other security for the Obligations, or to enforce a judgment or other court order in favor of Administrative Agent, any Collateral Agent or any Lender. Each Loan Party expressly submits and consents in advance to such jurisdiction in any action or suit commenced in any such court, and each Loan Party hereby waives any objection that it may have based upon lack of personal jurisdiction, improper venue, or forum non
conveniens and hereby consents to the granting of such legal or equitable relief as is deemed appropriate by such court. Each Loan Party hereby waives personal service of the summons, complaints, and other process issued in such action or suit and agrees that service of such summons, complaints, and other process may be made by registered or certified mail addressed to such Loan Party at the address set forth in, or subsequently provided by such Loan Party in accordance with, Section 10 and that service so made shall be deemed completed upon the earlier to occur of such Loan Party’s actual receipt thereof or three (3) Business Days after deposit in the U.S. mails, proper postage prepaid. Each Loan Party hereby expressly waives any claim to assert that the laws of any other jurisdiction govern this Agreement.
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES HERETO EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR THE PARTIES TO ENTER INTO THIS AGREEMENT. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT OR ANYWHERE ELSE, EACH LOAN PARTY AGREES THAT IT SHALL NOT SEEK FROM Administrative Agent, ANY Collateral Agent or any lender UNDER ANY THEORY OF LIABILITY (INCLUDING ANY THEORY IN TORTS), ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.
This Section 11 shall survive the termination of this Agreement.
[Remainder of Page intentionally Left Blank]
[signature page to loan and security agreement]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the Closing Date.
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| BORROWER REPRESENTATIVE: |
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| MIND MEDICINE (Mindmed) INC. By:/s/ Schond Greenway Name: Schond Greenway Title: Chief Financial Officer
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| BORROWERS: |
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| MIND MEDICINE, INC. By: /s/ Schond Greenway Name: Schond Greenway Title: Chief Financial Officer
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| HEALTHMODE, INC. By:/s/ Schond Greenway Name: Schond Greenway Title: Chief Financial Officer
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US-DOCS\143355985.16
[signature page to loan and security agreement]
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| Collateral Trustee: ANKURA TRUST COMPANY, LLC By: /s/ Beth Micena Name: Beth Micena Title: Managing Director
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US-DOCS\143355985.16
[signature page to loan and security agreement]
| ADMINISTRATIVE AGENT AND CANADIAN COLLATERAL AGENT: K2 HEALTHVENTURES LLC By: /s/ Parag Shah Name: Parag Shah Title: Chief Executive Officer
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| LENDER: K2 HEALTHVENTURES LLC By:/s/ Parag Shah Name: Parag Shah Title: Chief Executive Officer
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US-DOCS\143355985.16
CERTAIN PORTIONS OF THIS EXHIBIT (INDICATED BY “[***]”) HAVE BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.
EXHIBIT A
DEFINITIONS
As used in this Agreement, the following capitalized terms have the following meanings:
“Account” means any “account” as defined in the Code with such additions to such term as may hereafter be made, and includes, without limitation, all accounts receivable and other sums owing to a Loan Party.
“Account Control Agreement” means any control agreement (or similar agreement including a blocked account agreement) entered into among the depository institution at which a Loan Party maintains a Deposit Account domiciled in the United States or Canada or the securities intermediary or commodity intermediary at which a Loan Party maintains a Securities Account or a Commodity Account, one or more Loan Parties, and a Collateral Agent pursuant to which such Collateral Agent, for the benefit of Secured Parties, obtains control (within the meaning of the Code or the PPSA) over such Deposit Account, Securities Account, or Commodity Account. or with respect to Deposit Accounts maintained in Canada that cannot be perfected by control, provides the applicable Collateral Agent, for the benefit of the Secured Parties, with the ability to block the account and provide instructions to the depository institution.
“Account Debtor” means any “account debtor” as defined in the Code with such additions to such term as may hereafter be made.
“Administrative Agent” has the meaning set forth in the preamble.
“Affiliate” means, with respect to any Person, each other Person that owns or controls, directly or indirectly the Person, any Person that controls or is controlled by or is under common control with the Person, and each of that Person’s senior executive officers, directors, partners and, for any Person that is a limited liability company, that Person’s managers and members.
“Agreement” has the meaning set forth in the preamble.
“Amortization Date” means March 1, 2025 provided that upon the occurrence of the Interest Only Extension Event, the Amortization Date shall be March 1, 2026.
“Anti-Terrorism Order” means Executive Order No. 13,224 as of September 24, 2001, Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit or Support Terrorism, 66 U.S. Fed. Reg. 49,079 (2001), as amended.
“Applicable Rate” means a variable annual rate equal to the greater of (i) ten and ninety-five hundredths of one percent (10.95%) and (ii) the sum of (A) the Prime Rate, plus (B) two and ninety-five hundredths of one percent (2.95%).
“Automatic Payment Authorization” means the Automatic Payment Authorization in substantially the form of Exhibit F.
“Board” means, with respect to any Person, the board of directors, board of managers, managers or other similar bodies or authorities performing similar governing functions for such Person.
“Books” are all of each applicable Loan Party’s books and records including ledgers, federal and state tax returns, records regarding such Loan Party’s assets or liabilities, the Collateral, business operations or financial condition, and all computer programs or storage or any equipment containing such information.
“Borrower” and “Borrowers” has the meaning set forth in the preamble.
“Borrower Representative” has the meaning set forth in the preamble.
“Business Day” means any day that is not a Saturday, Sunday or a day on which commercial banks in the State of New York are required or permitted to be closed.
“CAML” means, collectively, to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada), the Criminal Code (Canada) and the United Nations Act (Canada), including the Regulations Implementing the United Nations Resolutions on the Suppression of Terrorism (Canada) and the United Nations Al-Qaida and Taliban Regulations (Canada) promulgated under the United Nations Act (Canada), and other applicable anti-money laundering, anti-terrorist financing, government sanction and “know your client” laws applicable in Canada, including any rules, regulations, directives, guidelines or orders thereunder.
“Canadian Benefit Plans” means all material employee benefit plans or arrangements maintained or contributed to by a Loan Party that are not Canadian Pension Plans, including all profit sharing, savings, supplemental retirement, retiring allowance, severance, pension, deferred compensation, welfare, bonus, incentive compensation, phantom stock, legal services, supplementary unemployment benefit plans or arrangements and all life, health, dental and disability plans and arrangements in which the employees or former employees of a Loan Party participate or are eligible to participate but excluding all stock option or stock purchase plans.
“Canadian Collateral Agent” has the meaning set forth in the preamble.
“Canadian Defined Benefit Pension Plan” means any Canadian Pension Plan which contains a “defined benefit provision,” as defined in subsection 147.1(1) of the Income Tax Act (Canada).
“Canadian Income Tax Act” means the Income Tax Act (Canada), as amended from time to time.
“Canadian Loan Parties” means each of Borrower Representative and any other Loan Party from time to time, incorporated under the laws of the Province of British Columbia or under the federal laws of Canada or any province or territory thereof.
“Canadian Pension Plan” shall mean a “registered pension plan”, as that term is defined in subsection 248(1) of the Canadian Income Tax Act, which is or was sponsored, administered or contributed to, or required to be contributed to by, any Loan Party or under which any Loan Party has any actual or potential liability.
“Canadian Security Documents” means, collectively, the security agreement executed by Canadian Loan Parties in favor of the Canadian Collateral Agent, dated as of the date hereof and any other collateral security document entered into by a Canadian Loan Party from time to time with respect to the Obligations, and any other agreements, documents or certificates delivered pursuant thereto, in each case, as amended, restated, supplemented or otherwise modified from time to time.
“Cash Equivalents” means (a) marketable direct obligations issued or unconditionally guaranteed by the United States (or any agency or any State) or Canada (or any agency or Province thereof) thereof having maturities of not more than one (1) year from the date of acquisition; (b) commercial paper maturing no more than one (1) year after its creation and having the highest rating from either Standard & Poor’s Ratings Group or Moody’s Investors Service, Inc.; (c) certificates of deposit issued by any bank with assets of at least Five Hundred Million Dollars ($500,000,000.00) maturing no more than one year from the date of investment therein; and (d) money market funds at least ninety-five percent (95%) of the assets of which constitute Cash Equivalents of the kinds described in clauses (a) through (c) of this definition.
“CFC” means a “controlled foreign corporation” within the meaning of Section 957 of the Internal Revenue Code.
“Change in Control” means any of the following (or any combination of the following) whether arising from any single transaction event or series of related transactions or events that, individually or in the aggregate, result in: (a) any “person” or “group” (within the meaning of Section 13(d) and 14(d)(2) of the Exchange Act) becoming the
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of a sufficient number of Equity Interests of Borrower Representative ordinarily entitled to vote in the election of directors, empowering such “person” or “group” to elect a majority of the members of the Board of Borrower Representative, who did not have such power before such transaction; or (b) the Transfer of all or substantially all assets of Borrowers, taken as a whole, or of a material business line of Borrowers, taken as a whole; or (c) Borrower Representative ceasing to own and control, free and clear of any Liens (other than Permitted Liens), directly or indirectly, all of the Equity Interests in each of its Subsidiaries (other than, in the case of any foreign Subsidiaries, any nominal Equity Interests held by directors to comply with local law) or failing to have the power to direct or cause the direction of the management and policies of each such Subsidiary.
“Claims” has the meaning set forth in Section 12.3.
“Closing Date” has the meaning set forth in the preamble.
“Code” means the Uniform Commercial Code, as the same may, from time to time, be enacted and in effect in the State of New York; provided, that, to the extent that the Code is used to define any term herein or in any Loan Document and such term is defined differently in different Articles or Divisions of the Code, the definition of such term contained in Article or Division 9 shall govern; provided further, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection, or priority of, or remedies with respect to, a Collateral Agent’s Lien on any Collateral is governed by the Uniform Commercial Code in effect in a jurisdiction other than the State of New York, the term “Code” shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority, or remedies and for purposes of definitions relating to such provisions.
“Collateral” means any and all properties, rights and assets of each Loan Party described on Exhibit B, and any collateral securing the Obligations pursuant to any Guaranty or pursuant to any other Loan Document; provided, however, the Collateral shall not include any Excluded Assets.
“Collateral Access Agreement” means an agreement with respect to a Loan Party’s leased location or bailee location, in each case in form and substance reasonably satisfactory to Administrative Agent and the applicable Collateral Agent.
“Collateral Account” means any Deposit Account, Securities Account, or Commodity Account of a Loan Party.
“Collateral Agent” means, each of the Collateral Trustee and the Canadian Collateral Agent and any other collateral agent or similar party holding any security interest pursuant to any Loan Document, for the ratable benefit of the Secured Parties.
“Collateral Trust Agreement” means that certain Collateral Trust Agreement, dated as of the Closing Date, between Collateral Trustee and Administrative Agent, as amended, restated, supplemented or otherwise modified from time to time.
“Collateral Trustee” has the meaning set forth in the preamble.
“Commitment” means, as to any Lender, the aggregate principal amount of Loans committed to be made by such Lender, as set forth on Schedule 2 hereto.
“Commodity Account” means any “commodity account” as defined in the Code with such additions to such term as may hereafter be made.
“Common Shares” means the common shares, no par value per share, of Borrower Representative, and any other class, series or other type of security into or for which the outstanding common shares may be converted, exchanged or substituted.
“Compliance Certificate” means that certain certificate in the form attached hereto as Exhibit D.
“Contingent Obligation” means, for any Person, any direct or indirect liability, contingent or not, of that Person for (a) any indebtedness, lease, dividend, letter of credit or other obligation of another such as an obligation, in each case, directly or indirectly guaranteed, endorsed, co‑made, discounted or sold with recourse by that Person, or for which that Person is directly or indirectly liable; (b) any obligations for undrawn letters of credit for the account of that Person; and (c) all obligations from any interest rate, currency or commodity swap agreement, interest rate cap or collar agreement, or other agreement or arrangement designated to protect a Person against fluctuation in interest rates, currency exchange rates or commodity prices. The amount of a Contingent Obligation is the stated or determined amount of the primary obligation for which the Contingent Obligation is made or, if not determinable, the maximum reasonably anticipated liability for it determined by the Person in good faith; but the amount may not exceed the maximum of the obligations under any guarantee or other support arrangement.
“Conversion Amount” has the meaning set forth in Section 2.2(e)(i).
“Conversion Election Notice” means a notice in the form attached hereto as Exhibit H.
“Conversion Price” means $4.01 provided that the Conversion Price shall be proportionately increased or decreased as necessary to reflect the adjustments described in Section 2.2(e)(vii).
“Conversion Shares” has the meaning set forth in Section 2.2(e)(i).
“Copyrights” means any and all copyright rights, copyright applications, copyright registrations and like protections of a Person in each work of authorship and derivative work thereof, whether published or unpublished and whether or not the same also constitutes a trade secret.
“Default” means any circumstance, event or condition that, with the giving of any notice, the passage of time, or both, would be an Event of Default.
“Default Rate” has the meaning set forth in Section 2.3(b).
“Deposit Account” means any “deposit account” as defined in the Code with such additions to such term as may hereafter be made, and includes any checking account, savings account or certificate of deposit.
“Designated Holder” means a Lender or any Affiliate designated by a Lender in the Conversion Election Notice or with respect to any exercise of a right to invest or a warrant pursuant hereto, provided that the Designated Holder for K2 HealthVentures LLC and any successor, transferee or assignee thereof as Lender, which is an Affiliate of K2 HealthVentures LLC, shall be K2 HealthVentures Equity Trust LLC.
“Dollars,” “dollars” or use of the sign “$” means only lawful money of the United States and not any other currency, regardless of whether that currency uses the “$” sign to denote its currency or may be readily converted into lawful money of the United States.
“Equipment” means all “equipment” as defined in the Code with such additions to such term as may hereafter be made, and includes without limitation all machinery, fixtures, goods, vehicles (including motor vehicles and trailers), and any interest in any of the foregoing.
“Equity Interests” means, with respect to any Person, any of the shares of capital stock of (or other ownership, membership or profit interests in) such Person, any of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership, membership or profit interests in) such Person, any of the securities convertible into or exchangeable for shares of capital stock of (or other ownership, membership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and any of the other ownership, membership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.
“ERISA” means the Employee Retirement Income Security Act of 1974, and its regulations.
“Event of Default” has the meaning set forth in Section 8.
“Exchange Act” means the US Securities Exchange Act of 1934, as amended (or any successor statute).
“Excluded Accounts” any (i) Deposit Account used exclusively for payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of any Loan Party’s or any of their Subsidiaries’ employees and identified to Administrative Agent as such in the Perfection Certificate or following the Closing Date in the Compliance Certificate, provided that the aggregate balance maintained in such account shall not exceed the aggregate amount of payroll, payroll taxes and other employee wage and benefit payments to be made in the then next payroll period, (ii) Deposit Accounts or cash collateral accounts securing cash management services, including corporate credit cards or letters of credit, in an aggregate amount (for all such accounts together) not to exceed Five Hundred Thousand Dollars ($500,000.00) (or such greater amount as Administrative Agent may agree in writing in its commercially reasonable discretion) and (iii) other Collateral Accounts identified to Administrative Agent in the Perfection Certificate or following the Closing Date in the Compliance Certificate in an aggregate amount (for all such accounts together) not to exceed Two Hundred Fifty Thousand Dollars ($250,000.00) (or such greater amount as Administrative Agent may agree in writing in its commercially reasonable discretion).
“Excluded Assets” has the meaning set forth on Exhibit B hereto.
“Excluded Locations” means the following locations where Collateral may be located from time to time: (a) locations where mobile office equipment (e.g. laptops, mobile phones and the like) may be located with employees in the Ordinary Course of Business, and (b) other locations where, in the aggregate for all such locations, less than Two Hundred Fifty Thousand Dollars ($250,000.00) of Collateral is located.
“Federal Reserve Board” means the Board of Governors of the Federal Reserve System, or any successor thereto.
“Fee Letter” means that certain letter agreement, dated as of the date hereof, by and among Borrowers, Administrative Agent and Lenders, as amended, restated, supplemented or otherwise modified from time to time.
“First Tranche Term Loan” has the meaning set forth in Section 2.2(a)(i).
“First Tranche Term Loan Commitment” means, as to any Lender, the aggregate principal amount of the First Tranche Term Loan committed to be made by such Lender, as set forth on Schedule 2 hereto.
“Fourth Tranche Availability Period” means the period of time commencing upon [***].
“Fourth Tranche Term Loan” has the meaning set forth in Section 2.2(a)(iv).
“Fourth Tranche Term Loan Commitment” means, as to any Lender, the aggregate principal amount of the Fourth Tranche Term Loan committed to be made by such Lender, as set forth on Schedule 2 hereto.
“Funding Date” means any date on which a Loan is made to or for the account of a Borrower which shall be a Business Day.
“GAAP” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other Person as may be approved by a significant segment of the accounting profession, which are applicable to the circumstances as of the date of determination, provided, however, that if there occurs after the Closing Date any change in GAAP that affects in any respect the calculation of any covenant or threshold in this Agreement, Lenders and Borrower Representative shall negotiate in good faith amendments to the provisions of this Agreement that relate to the calculation of such covenant or threshold with the intent of having the respective positions of Lender and Borrowers
after such change in GAAP conform as nearly as possible to their respective positions as of the Closing Date, and, until any such amendments have been agreed upon, such covenants and thresholds shall be calculated as if no such change in GAAP has occurred.
“General Intangibles” means all “general intangibles” as defined in the Code in effect on the Closing Date with such additions to such term as may hereafter be made, and includes without limitation, all Intellectual Property, claims, income and other tax refunds, security and other deposits, payment intangibles, contract rights, options to purchase or sell real or personal property, rights in all litigation presently or hereafter pending (whether in contract, tort or otherwise), insurance policies (including without limitation key man, property damage, and business interruption insurance), payments of insurance and rights to payment of any kind.
“Governmental Approval” means any consent, authorization, approval, order, license, franchise, permit, certificate, accreditation, registration, filing or notice, of, issued by, from or to, or other act by or in respect of, any Governmental Authority.
“Governmental Authority” means any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of or pertaining to government, any securities exchange and any self-regulatory organization.
“Guarantor” means any Person providing a Guaranty with respect to the Obligations or providing collateral, security or other credit support for all or any portion of the Obligations.
“Guaranty” means any guarantee of all or any part of the Obligations, as the same may from time to time may be amended, restated, modified or otherwise supplemented.
“Immaterial Subsidiaries” has the meaning set forth in Section 6.10.
“Indebtedness” means, without duplication, (a) indebtedness for borrowed money or the deferred price of property or services, (b) any reimbursement and other obligations for surety bonds and letters of credit, (c) obligations evidenced by notes, bonds, debentures or similar instruments, (d) capital lease obligations, and (e) Contingent Obligations.
“Indemnified Person” has the meaning set forth in Section 12.3.
“Insolvency Proceeding” means any proceeding by or against any Person under the United States Bankruptcy Code, the Bankruptcy and Insolvency Act (Canada), the Companies Creditors Arrangement Act (Canada), the Israeli Companies Ordinance 5743-1983, the Israeli Companies Law 5759-1999, the Israeli Insolvency and Economic Rehabilitation Law 5788-2018 or any other bankruptcy or insolvency law, including assignments for the benefit of creditors, compositions, proceedings seeking an order to stay the rights of creditors, or proceedings seeking reorganization, arrangement, or other relief.
“Intellectual Property” means, with respect to any Loan Party (or, as applicable, any of its Subsidiaries), all of such Loan Party’s or Subsidiary’s right, title, and interest in and to the following:
“Interest Only Extension Event” has the meaning set forth on Schedule 7.
“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended.
“Inventory” means all “inventory” as defined in the Code in effect on the Closing Date with such additions to such term as may hereafter be made.
“Investment” means any beneficial ownership interest in any Person (including stock, partnership interest or other securities or Equity Interests), and any loan, advance or capital contribution to any Person, or the acquisition of all or substantially all of the assets or properties of another Person.
“Key Person” means the Chief Executive Officer and Chief Financial Officer of Borrower Representative.
“Lender” has the meaning set forth in the preamble.
“Lender Expenses” means all audit fees and expenses, costs, and expenses (including reasonable and documented out-of-pocket attorneys’ fees and expenses) of the Secured Parties for preparing, amending, negotiating, administering, defending and enforcing the Loan Documents (including, without limitation, those incurred in connection with appeals or Insolvency Proceedings) or otherwise incurred with respect to a Loan Party, including all costs, expenses and other amounts required to be paid by any Lender or the Administrative Agent in accordance with the Collateral Trust Agreement.
“Lien” means a claim, mortgage, deed of trust, levy, charge, pledge, security interest or other encumbrance of any kind, whether voluntarily incurred or arising by operation of law or otherwise against any property.
“Loan Documents” means, collectively, this Agreement and any schedules, exhibits, certificates, notices, and any other documents related to this Agreement, the Canadian Security Documents, each Security Instrument, the Fee Letter, the Collateral Trust Agreement, any Automatic Payment Authorization, the Account Control Agreements, the Collateral Access Agreements, any Subordination Agreement, any Promissory Note, or notes or guaranties executed by a Loan Party, and any other present or future agreement by a Loan Party with or for the benefit of any Collateral Agent or any Lender in connection with this Agreement, all as amended, modified, supplemented, extended or restated from time to time.
“Loan Party” or “Loan Parties” has the meaning set forth in the preamble.
“Loan Request” means a request for a Loan pursuant to this Agreement in substantially the form attached hereto as Exhibit C.
“Loans” means, collectively, the Term Loans, and any other loan from time to time made under this Agreement, and “Loan” means any of the foregoing.
“Margin Stock” has the meaning set forth in Section 5.11(b).
“Material Adverse Effect” means (a) a material impairment in the perfection or priority of the Lien in the Collateral pursuant to the Loan Documents to which the Loan Parties are a party or in the value of the Collateral; or (b) a material adverse effect upon: (i) the business, operations, properties, assets or financial condition of the Loan Parties as a whole; (ii) the prospect of repayment of any part of the Obligations; or (iii) the ability to enforce any rights or remedies with respect to any Obligations, in each case, as determined by Administrative Agent.
“Maximum Rate” has the meaning set forth in Section 2.3(d) hereof.
“NEO” means the stock exchange for trading of securities now operating as Cboe Canada.
“Obligations” means all of Borrowers’ and each other Loan Party’s obligations to pay the Loans when due, including principal, interest, fees, Lender Expenses, the fees pursuant to the Fee Letter, and any other amounts due to be paid by a Loan Party, and each Loan Party’s obligation to perform its duties under the Loan Documents, and any other debts, liabilities and other amounts any Loan Party owes to any Lender at any time, whether under the Loan Documents or otherwise, including, without limitation, interest or Lender Expenses accruing after Insolvency Proceedings begin (whether or not allowed), and any debts, liabilities, or obligations of any Loan Party assigned to any Lender, which shall be treated as secured or administrative expenses in the Insolvency Proceedings to the extent permitted by applicable law.
“OFAC” has the meaning set forth in Section 5.11(c).
“Operating Documents” means, for any Person, such Person’s formation documents, as certified by the Secretary of State (or equivalent agency) of such Person’s jurisdiction of formation, organization or incorporation on a date that is no earlier than thirty (30) days prior to the Closing Date (other than with respect to Borrower Representative) and, (a) if such Person is a corporation, its articles or bylaws in current form, (b) if such Person is a limited liability company, its limited liability company agreement or operating agreement (or similar agreement), and (c) if such Person is a partnership, its partnership agreement (or similar agreement), each of the foregoing with all current amendments, restatements and modifications thereto.
“Ordinary Course of Business” means, in respect of any transaction involving any Person, the ordinary course of such Person’s business as conducted by any such Person in accordance with (a) the usual and customary customs and practices in the kind of business in which such Person is engaged, and (b) the past practice and operations of such Person, and in each case, undertaken by such Person in good faith and not for purposes of evading any covenant or restriction in any Loan Document.
“Patents” means all patents, patent applications and like protections of a Person including without limitation improvements, divisions, continuations, renewals, reissues, extensions and continuations-in-part of the same and all rights therein provided by international treaties or conventions.
“Payment Date” means the first calendar day of each month.
“Perfection Certificate” has the meaning set forth in Section 5.1.
“Permitted Indebtedness” means:
“Permitted Investments” means:
“Permitted Liens” means:
“Permitted Locations” means, collectively, the following locations where Collateral may be located from time to time: (a) locations identified in the Perfection Certificate, (b) locations with respect to which Borrowers have complied with the requirements of Section 6.11, and (c) the Excluded Locations.
“Permitted Transfers” means
“Person” means any individual, sole proprietorship, partnership, limited liability company, joint venture, company, trust, unincorporated organization, association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity or government agency.
“PPSA” shall mean the Personal Property Security Act (British Columbia) and the regulations thereunder, as from time to time in effect, provided, however, if attachment, perfection or priority of a Collateral Agent’s security interests in any Collateral are governed by the personal property security laws of any jurisdiction other than British Columbia, PPSA shall mean those personal property security laws in such other jurisdiction for the purposes of the provisions hereof relating to such attachment, perfection or priority and for the definitions related to such provisions.
“Prepayment Notice” has the meaning set forth in Section 2.2(d).
“Prime Rate” means, at any time, the rate of interest noted in The Wall Street Journal, Money Rates section, as the “Prime Rate”. In the event that The Wall Street Journal quotes more than one rate, or a range of rates, as the Prime Rate, then the Prime Rate shall mean the average of the quoted rates. In the event that The Wall Street Journal ceases to publish a Prime Rate, then the Prime Rate shall be the average of the three (3) largest U.S. money center commercial banks, as determined by Lenders.
“Products” means any products manufactured, sold, developed, tested or marketed by a Loan Party or any of its Subsidiaries.
“Promissory Note” has the meaning set forth in Section 2.6.
“Pro Rata Share” means, with respect to any Lender and as of any date of determination, the percentage obtained by dividing (i) the aggregate Commitments of such Lender by (ii) the aggregate Commitments of all Lenders provided, that to the extent any Commitment has expired or been terminated, with respect to such Commitment, the applicable outstanding balance of the Loans made pursuant to such Commitment held by such Lender and all the Lenders, respectively, shall be used in lieu of the amount of such Commitment, provided further, that with respect to all matters relating to a particular Loan, the Commitment or outstanding balance of the applicable Loan, shall be used in lieu of the aggregate Commitment or outstanding balance of all Loans in the foregoing calculation. “Ratable” and related terms shall mean, determined by reference to such Lender’s Pro Rata Share.
“Registered Organization” means any “registered organization” as defined in the Code with such additions to such term as may hereafter be made.
“Required Lenders” means, as of any date of determination, Lenders holding more than 50% of the sum of aggregate principal amount of all Loans outstanding and the aggregate amount of all unfunded commitments to make Loans, at such date of determination.
“Requirement of Law” means as to any Person, the organizational or governing documents of such Person, and any law (statutory or common), treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
“Responsible Officer” means with respect to any Person, any of the Chief Executive Officer, President or Chief Financial Officer of such Person. Unless the context otherwise requires, each reference to a Responsible Officer herein shall be a reference to a Responsible Officer of Borrower Representative.
“Restricted License” means any material in-bound license or other similar material agreement (other than ordinary course customer contracts, off the shelf software licenses, licenses that are commercially available to the public, and open source licenses) to which a Loan Party or Subsidiary is a party (a) that prohibits or otherwise restricts such Loan Party or Subsidiary from granting a security interest in its interest in such license or agreement or in any other property, or (b) for which a default under, or termination of which, could reasonably be expected to interfere with a Collateral Agent’s right to sell any Collateral.
“Royalty and Milestone Payments” means milestone payments, royalty payments, upfront payments and other similar payments pursuant to research and development, licensing, collaboration or development agreements (excluding payments made by the Loan Parties in connection with the research and development of the Loan Parties’ current Products).
“SEC” means the Securities and Exchange Commission, or any governmental or regulatory authority succeeding to any of its principal functions.
“Second Tranche Availability Period” means the period of time commencing upon [***]
“Second Tranche Milestone” means that Borrower Representative shall have provided evidence reasonably satisfactory to Administrative Agent that [***].
“Second Tranche Term Loan” has the meaning set forth in Section 2.2(a).
“Second Tranche Term Loan Commitment” means, as to any Lender, the aggregate principal amount of the Second Tranche Term Loan committed to be made by such Lender, as set forth on Schedule 2 hereto.
“Secured Party” means (i) Administrative Agent, each Collateral Agent and their successors and assigns, and (ii) Lenders.
“Securities Account” means any “securities account” as defined in the Code with such additions to such term as may hereafter be made.
“Securities Act” means the US Securities Act of 1933, as amended (or any successor statute).
“Security Instrument” means any security agreement, assignment, pledge agreement, financing or other similar statement or notice, continuation statement, other agreement or instrument, or any amendment or supplement to any thereof, creating, governing or providing for, evidencing or perfecting any security interest or Lien.
“Shares” means all of the issued and outstanding Equity Interests owned or held of record by a Loan Party in each of its Subsidiaries, which constitute Collateral.
“Subordinated Debt” means Indebtedness on terms and to holders satisfactory to Administrative Agent and incurred by a Loan Party that is subordinated in writing to all of the Obligations, pursuant to a Subordination Agreement.
“Subordination Agreement” means any subordination agreement in form and substance satisfactory to Administrative Agent entered into from time to time with respect to Subordinated Debt.
“Subsidiary” means, with respect to any Person, any corporation, partnership, limited liability company or joint venture in which (i) any general partnership interest or (ii) more than fifty percent (50%) of the stock, limited liability company interest, joint venture interest or other Equity Interest which by the terms thereof has the ordinary voting power to elect the Board of that Person, at the time as of which any determination is being made, is owned or controlled by such Person, directly or indirectly. Unless the context otherwise requires, each reference to a Subsidiary herein shall be a reference to a Subsidiary of Borrower Representative.
“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“Term Loan” and “Term Loans” each, have the meaning set forth in Section 2.2(a)(iv) hereof.
“Term Loan Maturity Date” means August 1, 2027.
“Third Tranche Availability Period” means the period of time commencing upon [***].
“Third Tranche Milestone” means that Borrower Representative shall have provided evidence reasonably satisfactory to Administrative Agent that [***].
“Third Tranche Term Loan” has the meaning set forth in Section 2.2(a)(iii).
“Third Tranche Term Loan Commitment” means, as to any Lender, the aggregate principal amount of the Third Tranche Term Loan committed to be made by such Lender, as set forth on Schedule 2 hereto.
“Trademarks” means any trademark and servicemark rights of a Person, whether registered or not, applications to register and registrations of the same and like protections, and the entire goodwill of the business connected with and symbolized by such trademarks.
“Transfer” means defined in Section 7.1.
“Unlimited Company” means any unlimited company incorporated or otherwise constituted or continued under the laws of the Provinces of Alberta, British Columbia or Nova Scotia or any similar body corporate formed under the laws of any other jurisdiction whose members may at any time become responsible for any of the obligations of that body corporate.
“ULC Shares” means securities or other equity interests in an Unlimited Company.
“U.S. Borrower” means a Borrower that is a “United States person” as defined in Section 7701(a)(30) of the Internal Revenue Code.
EXHIBIT B
COLLATERAL DESCRIPTION
The Collateral consists of all of each Loan Party’s right, title and interest in and to the following personal property wherever located, whether now owned or existing or hereafter acquired, created or arising:
All goods, Accounts (including health-care receivables), Equipment, Inventory, contract rights or rights to payment of money, leases, license agreements, franchise agreements, General Intangibles, commercial tort claims, documents, instruments (including any promissory notes), chattel paper (whether tangible or electronic), cash, deposit accounts, fixtures, letters of credit rights (whether or not the letter of credit is evidenced by a writing), securities, and all other investment property, supporting obligations, and financial assets, whether now owned or hereafter acquired, wherever located; and all such Loan Party’s Books relating to the foregoing, and any and all claims, rights and interests in any of the above and all substitutions for, additions, attachments, accessories, accessions and improvements to and replacements, products, proceeds (both cash and non-cash) and insurance proceeds of any or all of the foregoing.
Notwithstanding the foregoing, the Collateral does not include (i) any Intellectual Property, including, without limitation, any registered Patent, Trademark or Copyright; provided further, however, that at all times the Collateral shall include all Accounts and all proceeds of the foregoing; (ii) Deposit Accounts or cash collateral accounts securing cash management services permitted under the definition of “Permitted Liens”; provided however, that at all times the Collateral shall include all Accounts and all proceeds of the foregoing; (iii) any interest of a Loan Party as a lessee or sublessee under a real property lease; (iv) motor vehicles and other assets subject to certificates of title; (v) more than sixty-five percent (65.0%) the Equity Interests of any CFC owned by a U.S. Borrower to the extent that a pledge of more than sixty-five percent (65.0%) would result in material adverse tax consequences to the Loan Parties; and (vi) any property to the extent that (A) such grant of security interest is prohibited by any Requirement of Law of a Governmental Authority or constitutes a breach or default under or results in the termination of or requires any consent not obtained under, any contract, license, agreement, instrument or other document evidencing or giving rise to such property, except to the extent that such Requirement of Law or the term in such contract, license, agreement, instrument or other document providing for such prohibition, breach, default or termination or requiring such consent is ineffective under Section 9-406, 9-407, 9-408 or 9-409 of the Code (or any successor provision or provisions) of any relevant jurisdiction or any other applicable law (including the United States Bankruptcy Code) or principles of equity, or (B) such permit, license, lease, contract or agreement is an “off the shelf” license of intellectual property that is not material to the operation of the business of a Loan Party or which can be replaced without a material expenditure; provided, however, that such security interest shall attach immediately at such time as such Requirement of Law is not effective or applicable, or such prohibition, breach, default or termination is no longer applicable or is waived, and to the extent severable, shall attach immediately to any portion of the Collateral that does not result in such consequences (collectively, the “Excluded Assets”). If a judicial authority (including a U.S. Bankruptcy Court) would hold that a security interest in the underlying Patent, Trademark or Copyright is necessary to have a security interest in such Accounts and such property that are proceeds thereof, then the Collateral shall automatically, and effective as of the Closing Date, include the such Patent, Trademark or Copyright to the extent necessary to permit perfection of a Collateral Agent’s security interest in such Accounts and such other property of such Borrower that are proceeds thereof.
EXHIBIT C
Loan REQUEST
Date: |
Reference is made to that certain Loan and Security Agreement, dated August 11, 2023 (as amended, restated, supplemented or otherwise modified, from time to time, the “Agreement”), among MIND medicine (Mindmed) INC., a corporation incorporated under the laws of the Province of British Columbia (“Borrower Representative”), and each other Person party thereto as a borrower from time to time (collectively, “Borrowers”, and each, a “Borrower”), and each other Person party thereto or party to any other Loan Document as a guarantor from time to time (collectively, “Guarantors” and each, a “Guarantor”, and together with Borrowers, collectively, “Loan Parties”, and each, a “Loan Party”), K2 HEALTHVENTURES LLC as a lender, and the other lenders from time to time party thereto (collectively, “Lenders”, and each, a “Lender”), K2 HEALTHVENTURES LLC, as administrative agent for Lenders (in such capacity, together with its successors, “Administrative Agent”) and collateral agent for the Lenders under the Canadian Security Documents (in such capacity, together with its successors, “Canadian Collateral Agent”) and ANKURA TRUST COMPANY, LLC, as collateral trustee for Lenders (in such capacity, together with its successors, “Collateral Trustee”). Capitalized terms have meanings as defined in the Agreement.
Borrower Representative hereby requests a Loan in the amount of $[ ] on [ ] (the “Funding Date”) pursuant to the Agreement, and authorizes Lenders to:
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Borrower Representative represents that each of the conditions precedent to the Loans set forth in the Agreement are satisfied and shall be satisfied on the Funding Date, including but not limited to: (i) the representations and warranties set forth in the Agreement and in the other Loan Documents are and shall be true and correct in all material respects on and as of the Funding Date with the same effect as though made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date (in which case they remain true and correct in all material respects as of such earlier date); provided, however, that such materiality qualifiers shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof, (ii) no Default or Event of Default has occurred, and (iii) no event that has had or could reasonably be expected to have a Material Adverse Effect has occurred and is continuing. [The undersigned certifies that the [Second/Third] Tranche Milestone has been achieved and any supporting documents requested by Administrative Agent in connection therewith have been provided to Administrative Agent.]
Borrower Representative agrees to notify Lenders promptly before the Funding Date if any of the matters which have been represented above shall not be true and correct in all material respects on the Funding Date and if Lenders have received no such notice before the Funding Date then the statements set forth above shall be deemed to have been made and shall be deemed to be true and correct in all material respects as of the Funding Date.
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[signature page to loan request]
This Loan Request is hereby executed as of the date first written above.
BORROWER REPRESENTATIVE: MIND medicine (Mindmed) INC. By: Name: Title: |
EXHIBIT D
COMPLIANCE CERTIFICATE
TO: K2 HEALTHVENTURES LLC, as Administrative Agent Date: FROM: MIND medicine (Mindmed) INC. |
Reference is made to that certain Loan and Security Agreement, dated August 11, 2023 (as amended, restated, supplemented or otherwise modified, from time to time, the “Agreement”), among MIND medicine (Mindmed) INC., a corporation incorporated under the laws of the Province of British Columbia (“Borrower Representative”), and each other Person party thereto as a borrower from time to time (collectively, “Borrowers”, and each, a “Borrower”), and each other Person party thereto or party to any other Loan Document as a guarantor from time to time (collectively, “Guarantors” and each, a “Guarantor”, and together with Borrowers, collectively, “Loan Parties”, and each, a “Loan Party”), K2 HEALTHVENTURES LLC as a lender, and the other lenders from time to time party thereto (collectively, “Lenders”, and each, a “Lender”), K2 HEALTHVENTURES LLC, as administrative agent for Lenders (in such capacity, together with its successors, “Administrative Agent”) and collateral agent for the Lenders under the Canadian Security Documents (in such capacity, together with its successors, “Canadian Collateral Agent”) and ANKURA TRUST COMPANY, LLC, as collateral trustee for Lenders (in such capacity, together with its successors, “Collateral Trustee”). Capitalized terms have meanings as defined in the Agreement.
The undersigned authorized officer of Borrower Representative, hereby certifies in accordance with the terms of the Agreement as follows:
(1) Each Borrower is in compliance for the period ending with all covenants set forth in the Agreement; (2) no Event of Default has occurred and is continuing; and (3) the representations and warranties in the Agreement are true and correct in all material respects on the date hereof; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date.
The undersigned certifies that all financial statements delivered herewith are prepared in accordance with GAAP (other than, with respect to unaudited financials for the absence of footnotes and being subject to normal year-end adjustments), consistently applied from one period to the next. Capitalized terms used but not otherwise defined herein shall have the meanings given them in the Agreement.
Please indicate compliance status by circling Yes/No under “Complies” column. | ||
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Reporting Covenants | Required | Complies |
Monthly financial statements and Compliance Certificate | Monthly, within (a) 45 days for each month ending prior to February 1, 2023, and (b) 30 days for each month ending thereafter | Yes No |
A/R and A/P Aging Reports | Quarterly, within 30 days | Yes No |
Quarterly financial statements | Quarterly, within 45 days | Yes No |
Annual Projections | Annually, within 90 days of fiscal year end | Yes No |
Annual audited financial statements and any management letters | Annually, within 90 days of fiscal year end | Yes No |
Statements, reports and notices to stockholders or holders of Subordinated Debt | Within 5 Business Days of delivery | Yes No |
SEC filings | Within 5 Business Days after filing with SEC | Yes No | |
Legal action notices and updates (seeking damages over $500,000.00) | Promptly | Yes No | |
Board, committee and subcommittee or advisory board materials | Within 7 Business Days after Board meeting | Yes No | |
Board minutes | Within 7 Business Days after Board meeting minutes have been approved | Yes No | |
IP report | At the end of the last month of each calendar quarter | Yes No | |
Bank account statements (with transaction detail) | Together with monthly financial statements | Yes No | |
Product related material correspondence, reports, documents and other filings | Within 7 Business Days | Yes No | |
Other Covenants | Required | Actual | Complies |
Equipment financing Indebtedness | Not to exceed $500,000.00 outstanding | $ | Yes No |
Repurchases of stock from former employees, officers and directors | Not to exceed $500,000.00 per fiscal year | $ | Yes No |
Investments in Subsidiaries that are not Loan Parties | Not to exceed $500,000.00 per fiscal year | $ | Yes No |
Deposits or pledges for bids, tenders, contracts, leases, surety or appeal bonds | Not to exceed $500,000.00 at any time | $ | Yes No |
Other Matters
Please list any SEC filings made since the most recently delivered Compliance Certificate:
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Has any Loan Party changed its legal name, jurisdiction of organization or chief executive office or domicile (for Quebec purposes)? If yes, please complete details below:
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| Yes | No |
Has there been any change in Key Person? If so, please describe appointment of any interim replacement or full-time replacement by a candidate with equivalent qualifications:
_______________________________________________________________________ | Yes | No |
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Have any new Subsidiaries been formed? If yes, please provide complete schedule below.
| Yes | No |
Legal Name of Subsidiary | Jurisdiction of Organization | Holder of Subsidiary Equity Interests | Equity Interests Certificated? (Y/N) | Jurisdiction |
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Have any new Deposit Accounts or Securities Accounts been opened? If yes, please complete schedule below.
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Is there any new Product not previously disclosed on the Perfection Certificate or any prior Compliance Certificate? If yes, please complete details below:
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| Yes | No |
Has there been any material change to anticipated or scheduled Royalty and Milestone Payments? If yes, please attach updated Schedule 5. | Yes | No |
Has any Loan Party added any new lease location, bailee location or other location where Collateral is maintained? If yes, please describe below: _______________________________________________________________________
| Yes | No |
Has any Loan Party entered into a Restricted License? If yes, please describe below: _______________________________________________________________________
| Yes | No |
The following are the exceptions with respect to the certification above: (If no exceptions exist, state “No exceptions to note.”)
BORROWER REPRESENTATIVE: MIND MEDICINE (MINDMED) INC. By: Name: Title: |
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EXHIBIT E
REQUIREMENTS FOR INSURANCE DOCUMENTATION
[***]
EXHIBIT F
AUTOMATIC PAYMENT AUTHORIZATION
Effective as of [______________], 202[_] MIND medicine (Mindmed) INC., a corporation incorporated under the laws of the Province of British Columbia corporation (“Borrower Representative”) hereby authorizes K2 HEALTHVENTURES LLC (“K2”), or any affiliate acting on its behalf pursuant to the Agreement and the bank or financial institution named below (“Bank”) to automatically debit through the Automatic Clearing House (ACH) from, and initiate variable debit and/or credit entries to, the deposit, checking or savings accounts as designated below maintained in the name of a Borrower (the “Account”), and to cause electronic funds transfers to an account of K2 to be applied to the payment of any and all amounts due under the Loan and Security Agreement, dated August 11, 2023 (as amended, restated, supplemented or otherwise modified, from time to time, the “Agreement”), among Borrower Representative, and any other borrowers party thereto from time to time, K2, and any other lender from time to time party thereto (collectively, “Lenders”), and Ankura Trust Company, LLC, as collateral trustee for Lenders, including without limitation, principal, interest, fees, expenses and charges (including Lender Expenses); provided, however, that so long as no Event of Default has occurred and is continuing, K2 shall obtain Borrower Representative’s prior approval before debiting the Account for amounts other than regularly scheduled principal, interest or other regularly scheduled payments. Capitalized terms not otherwise defined herein, have the meanings given in the Agreement.
This Authorization shall remain in effect until the Loan Agreement has been terminated.
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[SIGNATURE PAGE TO AUTOMATIC PAYMENT AUTHORIZATION]
This Authorization is executed as of the date set forth above by the undersigned authorized representative of Borrower Representative:
MIND MEDICINE (MINDMED) INC. By: Name: Title:
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EXHIBIT G
Form of
SECURED PROMISSORY NOTE
[[THE SECURITY REPRESENTED BY THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, OR APPLICABLE STATE SECURITIES LAWS. THIS SECURITY MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER SAID ACT, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SAID ACT INCLUDING, WITHOUT LIMITATION, PURSUANT TO RULE 144 UNDER SAID ACT.]]
$[________________] | [_______ __, 20__] |
FOR VALUE RECEIVED, the undersigned, MIND medicine (Mindmed) INC., a corporation incorporated under the laws of the Province of British Columbia (“Borrower Representative”), and each Person party thereto as a borrower from time to time (collectively, “Borrowers”, and each, a “Borrower”), hereby unconditionally, jointly and severally, promise to pay to [__________________________] (together with its successors and assigns, the “Holder”) at the times, in the amounts and at the address set forth in the Loan and Security Agreement, dated as of August 11, 2023 (as amended, restated, supplemented or otherwise modified from time to time, the “Loan Agreement”; capitalized terms used herein without definition have the meanings assigned to such terms in the Loan Agreement), among Borrowers, the Holder, any other lender from time to time party thereto (collectively, “Lenders”), and ANKURA TRUST COMPANY, LLC, as collateral trustee for Lenders (in such capacity, “Collateral Trustee”), K2 HEALTHVENTURES LLC, as collateral agent for the Lenders under the Canadian Security Documents (in such capacity, “Canadian Collateral Agent” and together with the Collateral Trustee, collectively, the “Collateral Agents”),the lesser of (i) the principal amount of [___________] Dollars ($[__________]) and (ii) the aggregate outstanding principal amount of Loans made by the Holder to Borrowers according to the terms of Section 2.2 of the Loan Agreement. Borrowers further, jointly and severally, promise to pay interest in accordance with Section 2.3 of the Loan Agreement. In no event shall interest hereunder exceed the maximum rate permitted under applicable law. All payments of principal, interest and any other amounts due shall be made as set forth in Section 2.5 of the Loan Agreement.
The Obligations evidenced by this Secured Promissory Note (as amended, restated, supplemented or otherwise modified from time to time, this “Note”) are subject to acceleration in accordance with Section 9.1 of the Loan Agreement. Each Borrower hereby waives presentment, demand, notice of default or dishonor, notice of payment and nonpayment, protest and all other demands and notices in connection with the execution, delivery, acceptance, performance, default or enforcement of this Note.
This Note is secured by a security interest in the Collateral granted to the applicable Collateral Agent, for the ratable benefit of Lenders, pursuant to certain other Loan Documents.
The terms of Section 11 of the Loan Agreement are incorporated herein, mutatis mutandis.
For purposes of Sections 1272, 1273 and 1275 of the Internal Revenue Code, this Note is being issued with “original issue discount.” Please contact [***] to obtain information regarding the issue price, issue date, amount of original issue discount and yield to maturity.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
[SIGNATURE PAGE TO SECURED PROMISSORY NOTE]
IN WITNESS WHEREOF, Borrowers have caused this Note to be duly executed and delivered on the date set forth above by the duly authorized representative of each Borrower.
| MIND MEDICINE (MINDMED) INC. By Name: Title:
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EXHIBIT h
CONVERSION ELECTION NOTICE
Reference is made to that certain Loan and Security Agreement, dated August 11, 2023 (as amended, restated, supplemented or otherwise modified, from time to time, the “Agreement”), among MIND medicine (Mindmed) INC., a corporation incorporated under the laws of the Province of British Columbia (“Borrower Representative”), and each other Person party thereto as a borrower from time to time (collectively, “Borrowers”, and each, a “Borrower”), and each other Person party thereto or any other Loan Documents as a guarantor from time to time (collectively, “Guarantors” and each, a “Guarantor”, and together with Borrowers, collectively, “Loan Parties”, and each, a “Loan Party”), K2 HEALTHVENTURES LLC as a lender, and the other lenders from time to time party thereto (collectively, “Lenders”, and each, a “Lender”), K2 HEALTHVENTURES LLC, as administrative agent for Lenders (in such capacity, together with its successors, “Administrative Agent”) and collateral agent for the Lenders under the Canadian Security Documents (in such capacity, together with its successors, “Canadian Collateral Agent”), and ANKURA TRUST COMPANY, LLC, as collateral trustee for Lenders (in such capacity, together with its successors, “Collateral Trustee”). Capitalized terms have meanings as defined in the Agreement.
The undersigned Lender hereby elects to convert $[__________________] of the outstanding Term Loans into Conversion Shares.
Please issue the Conversion Shares in the following name and to the following address:
Issue to: [______________]
[______________]
[______________]
[LENDER]
By:
Title:
Dated:
DTC Participant Number and Name (if electronic book entry transfer):
Account Number (if electronic book entry transfer):
ACKNOWLEDGMENT
Borrower Representative hereby acknowledges this Conversion Notice and hereby directs [TRANSFER AGENT] to issue the above indicated number of shares of [_______] of [_______].
MIND MEDICINE (MINDMED) INC.
By:
Name:
Title:
SCHEDULE 1
ADDITIONAL BORROWERS
SCHEDULE 2
COMMITMENTS
LENDER | FIRST TRANCHE TERM LOAN COMMITMENT | [***] | [***] | FOURTH TRANCHE TERM LOAN COMMITMENT | TOTAL COMMITMENTS |
K2 HEALTHVENTURES LLC | $15,000,000.00 | [***] | [***] | $15,000,000.00 | $50,000,000.00 |
schedule 3
post-closing deliveries
schedule 4
TAXES; INCREASED COSTS
Schedule 5
royalty and milestone payments
[***]
schedule 6
FORM OF RESTRICTED SECURITIES LEGEND
THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND LAWS OR, IN THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER, SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER IS EXEMPT FROM SUCH REGISTRATION.
NO SECURITIES WILL BE OFFERED OR SOLD IN CANADA, OR KNOWINGLY TO A PERSON RESIDENT IN CANADA, PURSUANT TO ANY PROSPECTUS IN CONNECTION WITH THE REGISTRATION STATEMENT.
SCHEDULE 7
CERTAIN DEFINITIONS
“Interest Only Extension Event” means that Administrative Agent has received evidence, satisfactory to Administrative Agent in its commercially reasonable discretion, that Borrower Representative has received after the Closing Date [***].