Code of Massachusetts Regulations
400 CMR - EXECUTIVE OFFICE OF ECONOMIC DEVELOPMENT
Title 400 CMR 8.00 - Cannabis Social Equity Trust Fund
Section 8.08 - Defaults and Other Material Breaches; Penalties
Universal Citation: 400 MA Code of Regs 400.8
Current through Register 1531, September 27, 2024
(1) Defaults and breach of Contract. Each Contract will set forth the terms and conditions of the Financial Assistance, and the remedies available to EOED in the event of a default or material breach of the Contract.
(a) A default or material breach of a
Contract shall occur in the event that the person or entity receiving Financial
Assistance;
1. fails to make timely repayment
of Financial Assistance, taking into account any cure periods provided in the
Contract, if applicable;
2. makes a
material misrepresentation in the Contract or application for Financial
Assistance;
3. expends any portion
of the Financial Assistance for a purpose that is not permitted under the
Contract;
4. loses its status as an
Economic Empowerment Priority Applicant, Social Equity Business or Social
Equity Program Participant;
5. has
its License suspended or revoked, or is subject to any other penalty imposed by
the Commission that materially impacts the operation of its business;
6. sells, conveys, transfers or pledges any
Restricted Asset in violation of section 8.07; or
7. fails to comply with recordkeeping,
reporting requirements or milestones set forth in the Contract.
(b) Any person or entity receiving
Financial Assistance that defaults or materially breaches a contract as a
result of an event occurring in accordance with
400
CMR 8.08(1)(a)(iv) or (v)
shall report such default or material breach to EOED within five (5) business
days.
(c) Each Contract may define
other actions or events that constitute a default or material breach of the
Contract.
(2) Remedies and Penalties.
(a) In the event of a default
or material breach of a Contract, or a violation of
400 CMR
8.00, EOED may, in its sole discretion:
1. suspend, condition or terminate the
Contract;
2. suspend, withhold,
rescind or recapture all or a portion of the Financial Assistance awarded under
the Contract;
3. impose and collect
fines or penalties in an amount up to 50 percent of the amount of Financial
Assistance disbursed under the Contract per violation;
4. notify the Commission of a default or
breach of contract;
5. foreclose on
any lien or exercise rights under any security interest pledged to the
Commonwealth as a condition of receiving Financial Assistance; or
6. cause a sale or transfer of the License in
accordance with section 8.08(3).
(b) The rights and remedies set forth herein
are not exclusive and do not preclude other remedies available to EOED at law
or in equity.
(3) Transfer of License upon Default.
(a) In the
event of an uncured default or material breach of a Contract, EOED may require
a sale or transfer of the defaulting entity's License, pursuant to
935
CMR 500.104 or
935
CMR 501.104. Such sale or transfer of the
License shall be subject to the rules and regulations of the
Commission.
(b) In the event a
License or ownership interest in a licensed entity, property or assets of the
person or entity receiving Financial Assistance is sold or transferred as a
result of a default or material breach, such proceeds shall be first applied to
the amount outstanding under the Contract, including any fees or penalties
assessed by EOED.
(4) Any money recovered or fines or penalties paid to EOED pursuant to 400 CMR 8.00 shall be deposited into the Fund.
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