SHAREHOLDER CONSENT AGREEMENT

Consents and Representation and Warranty

consents to the Recapitalization Transaction substantially on the terms set out in the Term Sheet, including, for greater certainty, the issuance of new shares of PNCC and the dilution to holders of Existing Shares as set out in the Term Sheet, and consents to such amendments, modifications and/or supplements to the Recapitalization Transaction and Term Sheet and to such other transactions as may be otherwise approved by the Boards to the extent the terms thereof are not materially adversely different to the Supporting Shareholder from those set out in the Term Sheet (collectively, “Other Transactions”);

acknowledges, covenants and agrees to vote (or cause to be voted) all of its Relevant Shares, in the event a vote of Shareholders is required in connection with the Recapitalization Transaction and the Plan (or an Other Transaction) for any reason (including pursuant to the rules of the Toronto Stock Exchange), in favour of the approval, consent, ratification and adoption of the Recapitalization Transaction and the Plan (or Other Transaction) (and any actions required in furtherance thereof) in accordance with the terms herein, and if applicable, that it shall tender its proxy for any such vote in compliance with any deadlines set forth in the Interim Order or execute, if requested by the Companies, any written

consent in lieu of a meeting to evidence its approval, consent, ratification and adoption of the Recapitalization Transaction and the Plan (or Other Transaction);

acknowledges, covenants and agrees not to, directly or indirectly, exercise any rights of dissent or appraisal with respect to the Recapitalization Transaction; and

represents and warrants to the Companies (and acknowledges that the Companies are relying upon such representations and warranties) the it is the sole legal or beneficial holder of, or exercises control and direction and has sole control and investment discretion over that number of Existing Shares set forth on its signature page to this Support Agreement (the “Relevant Shares”) and no other Existing Shares.

The Companies’ Representations and Warranties

the PNCC Board and the PNI Board, as applicable, have approved the transactions contemplated by the Recapitalization Transaction;

it (i) is a sophisticated party with sufficient knowledge and experience to evaluate properly the terms and conditions of this Support Agreement; (ii) has conducted its own analysis and made its own decision to enter into this Support Agreement; (iii) has obtained such independent advice in this regard as it deemed appropriate; and (iv) has not relied in such analysis or decision on any person other than its own independent advisors;

this Support Agreement has been duly authorized, executed and delivered by it, and, assuming the due authorization, execution and delivery by all Parties, this Support Agreement constitutes a legal, valid and binding obligation of it, enforceable in accordance with its terms;

it is duly organized, validly existing and in good standing under the laws of Canada and has all necessary power and authority to execute and deliver this Support Agreement resulting from its acceptance hereof and to perform its obligations hereunder;

the execution and delivery of this Support Agreement by it and the completion by it of the transactions contemplated herein do not and will not violate or conflict with any judgment, order, notice, decree, statute, law, ordinance, rule or regulation applicable to such Company; and

to the knowledge of such Company’s officers who have been working directly on the Recapitalization Transaction, no representation or warranty of such Company contained in this Support Agreement contains any untrue statement of a material

fact or omits to state a material fact necessary in order to make the statements contained herein not misleading.

Termination

Releases

Public Announcements

Miscellaneous

This Support Agreement may be modified, amended or supplemented as to any matter in writing (which may include e-mail) by the Parties. No Party may assign, delegate or otherwise transfer any of its rights, interests or obligations

under this Support Agreement without the prior written consent of the other Parties hereto.

This Support Agreement shall be governed by, construed and interpreted in accordance with the laws of the Province of Ontario and the laws of Canada applicable therein (excluding any conflict of laws rule or principle which might refer such construction to the laws of another jurisdiction).

This Support Agreement may be executed by facsimile or other electronic means and in one or more counterparts, all of which shall be considered one and the same agreement.

Title: [REDACTED]

        [REDACTED]

Capitalized terms used but not defined in this Term Sheet shall have the meanings set out on Schedule “A” hereto.

Exchange of Second Lien

Notes and Extinguishment

of Second Lien Notes Obligations

On the date of implementation of the Recapitalization Transaction (the “Effective Date”):

(a)      all obligations, including principal and all accrued and unpaid interest from and after July 15, 2016, owed to the Second Lien Noteholders under the Second Lien Notes and the Second Lien Notes Indenture, as applicable (collectively, the “Second Lien Notes Obligations”) shall be irrevocably exchanged for Common Shares representing approximately 98% of the equity of PNCC immediately following the implementation of the Plan (the “Exchange Common Shares”) and each Second Lien Noteholder shall become entitled to its Pro-Rata Share of the Exchange Common Shares in exchange for the full and final settlement of Second Lien Notes Obligations and the complete satisfaction, release and discharge of any and all security granted in favour of the Second Lien Noteholders as security for the Second Lien Notes Obligations; and

(b)      the Second Lien Notes and the Second Lien Notes Indenture shall be cancelled.

The “Pro-Rata Share” of a Second Lien Noteholder shall be determined based on the amount of Second Lien Notes Obligations owing to such Second Lien Noteholder as at a record date to be determined, divided by the aggregate amount of Second Lien Notes Obligations owing to all Second Lien Noteholders as at such record date.

The Exchange Common Shares shall be subject to dilution resulting from the issuance of any Common Shares, options or other rights pursuant to the

Management Incentive Plan, as contemplated herein.

As part of the Recapitalization Transaction, PNI shall raise cash proceeds in an amount equal to the New Capital Offering Amount in exchange for New Second Lien Notes (the “New Capital Offering”).

On the Effective Date, Second Lien Noteholders will have the right to participate in the New Capital Offering based on their respective Pro-Rata Share (calculated in accordance with Section 2 above) of the New Capital Offering Amount, to the extent permissible by law.

Second Lien Noteholders that participate in the New Capital Offering will be entitled to receive on the Effective Date US$1 of New Second Lien Notes for each US$1 of the New Capital Offering Amount provided by such Second Lien Noteholder.

The Company and the Backstop Parties shall enter into the Backstop Commitment Agreement as at the date of this Term Sheet, pursuant to which, among other things, the Backstop Parties shall agree to backstop and consummate the New Capital Offering to the extent that Second Lien Noteholders do not subscribe for their Pro-Rata Share of the New Capital Offering Amount.

In consideration for entering into, and conditional on fulfilling the obligations under, the Backstop Commitment Agreement, the Backstop Parties shall be entitled to receive on the Effective Date a fee equal to 5% of the New Capital Offering Amount, which fee shall be applied by the Backstop Parties to acquire additional New Second Lien Notes on the Effective Date.

As part of the Recapitalization Transaction, on the Effective Date:

(a)      the reasonable fees and expenses of the legal and financial advisors of Canso Investment Counsel Ltd., in its capacity as a First Lien Noteholder, shall be paid;

(b)      all accrued and unpaid interest owing in respect of the First Lien Notes up to the Effective Date shall be paid in cash;

(c)      a portion of the principal amount of First Lien Notes shall be repaid, dollar for dollar, at par in the amount of the First Lien Notes Repayment Amount;

(d)      the remaining First Lien Notes following the repayment set forth in 5(c) above shall be exchanged dollar for dollar, at par for the New First Lien Notes in exchange for the full and final settlement of all obligations owed to the First Lien Noteholders under the First Lien Notes and the First Lien Notes Indenture, as applicable (collectively, the “First Lien Notes Obligations”);

(e)      the existing security granted in respect of the First Lien Notes will be amended, amended and restated or otherwise addressed so that it secures all of the obligations contemplated in the “Security” section in Schedule “B”, provided that to the extent it is necessary to provide new security to replace the existing

security, the new security shall have the same priority as the priority resulting from the existing lien registrations and charges in respect of the First Lien Notes (including through estoppel letters or other similar documents); and

(f)      the First Lien Notes shall be cancelled.

The holders of the Existing Shares at a record date to be determined shall retain approximately 2% of the equity of PNCC immediately following the implementation of the Plan (subject to dilution resulting from the issuance of any Common Shares, options or other rights pursuant to the Management Incentive Plan, as contemplated herein).

All of the rights of the Existing Equity, except for the Existing Shares and PNCC’s existing shareholder rights plan, shall be terminated upon the implementation of the Plan or otherwise dealt with to the satisfaction of the Company and the Majority Second Lien Noteholder Supporting Parties.

Management of the Company acceptable to the Majority Second Lien Noteholder Supporting Parties and the CEO shall each receive:

(a)      Common Shares in an amount to be determined; and

(b)      a new management incentive plan ((a) and (b) collectively, the “Management Incentive Plan”),

in each case, as determined by the Majority Second Lien Noteholder Supporting Parties and the CEO prior to the Effective Date.

The Majority Second Lien Noteholder Supporting Parties shall either confirm the continuation of the existing Board of Directors of PNCC (the “Board”) following implementation of the Recapitalization Transaction or have the right to appoint on the Effective Date up to 33% of the directors acceptable to the Majority Second Lien Noteholder Supporting Parties.

All priority claims, if any, required to be satisfied in accordance with applicable law shall be paid in the ordinary course.

The trade debt obligations of the Company shall be unaffected by the Recapitalization Transaction and shall be paid or satisfied in the ordinary course of business.

All obligations to employees of the Company (whether for salary, wages, retention payments pursuant to retention agreements, benefits, severance or otherwise) shall be unaffected by the Recapitalization Transaction (other than as set forth in Section 6 above) and employment arrangements will remain in place under their existing terms, provided that any changes to such employment arrangements to reflect the new Management Incentive Plan will be made.

Any funds currently being held by the indenture trustee under the Second Lien Notes Indenture shall be released to PNI for general corporate purposes on the Effective Date.

The Recapitalization Transaction shall be implemented pursuant to a Plan under the CBCA.

The Recapitalization Transaction and the implementation of the Plan shall be subject to and conditional upon all required Court, creditor, shareholder, regulatory and other approvals, if and to the extent required, and other customary conditions and approvals customary in transactions of this nature, including, without limitation:

(a)      the Company shall have entered into separate standard support agreements (each a “Support Agreement”) as at the date of this Term Sheet, with: (i) at least the Requisite Majority of First Lien Noteholders; and (ii) at least the Requisite Majority of Second Lien Noteholders; in each case, pursuant to which such parties shall, with respect to their respective holdings of First Lien Notes, Second Lien Notes and Existing Shares, as applicable: (1) provide representations and warranties regarding the principal amount of their respective holdings of notes and the number of Existing Shares that they either are the sole legal and beneficial owner of or have investment and voting discretion with respect to; (2) refrain from selling, pledging, transferring, assigning or otherwise disposing of any of such holdings (provided that transfers to other funds managed by such party shall be permitted provided that such holdings remain subject to the applicable Support Agreement); (3) support, consent to and agree to vote all of their holdings, as applicable, in favour of the Recapitalization Transaction and the Plan; (4) subject to the Company’s ongoing compliance with the terms of the Support Agreements, consent to a stay of existing and future defaults in respect of their holdings during the period in which the Support Agreement is in effect; (5) waive any defaults or events of default that may occur as a result of (A) the commencement and/or continuation of the proceedings by the Company under the CBCA or of recognition proceedings under applicable U.S. law, if any; (B) the pursuit of the Recapitalization Transaction, including the entering into of any related documents; and (C) provided that the applicable Support Agreement has not been terminated in accordance with its terms (and, for greater certainty, regardless of whether such termination occurs before, on or after July 15, 2016), the non-payment of interest in respect of the Second Lien Notes on the July 15, 2016 interest payment date, and in all such cases agree not to take any enforcement steps (and to instruct the indenture trustee under the relevant indenture not to take any enforcement steps) in connection therewith; and (6) other customary terms. Each respective Support Agreement shall also provide that: (A) the Company shall pursue the Recapitalization Transaction in accordance with an agreed upon schedule that incorporates the milestones contemplated herein; (B) all material transaction documents and orders shall be acceptable to the applicable parties, acting reasonably; and (C) the Company will pursue and support the Recapitalization Transaction, in good faith;

(b)      the Company shall have obtained an order of the Court by no later than August 10, 2016 (or such other date as may be agreed to by the Company and the Majority Second Lien Noteholder Supporting Parties), calling for separate meetings of the First Lien Noteholders and the Second Lien Noteholders, and if required, shareholders, to consider and vote on the Plan, and providing for a limited stay of proceedings with respect to the First Lien Notes, the Second Lien Notes, any shareholder rights plan and with respect to any cross-defaults and termination rights arising under any material contracts of the Company as a result of the commencement and/or continuation of the proceedings by the Company under the CBCA or recognition proceedings under applicable U.S. law, if any, and/or any default under the First Lien Notes or the Second Lien Notes, all subject to the Company’s ongoing compliance with the terms of the Support Agreements;

(c)      the Plan shall have been approved by the requisite majority of affected creditors and, if applicable, shareholders, in conformity with the CBCA;

(d)      the Plan shall have been sanctioned by a final order of the Court (the “Final Order”) by no later than September 30, 2016 (or such other date as may be agreed to by the Company and the Majority Second Lien Noteholder Supporting Parties);

(e)      the Final Order shall have become a final order, the implementation, operation or effect of which shall not have been stayed, varied in a manner not acceptable to the Company or the Majority Second Lien Noteholder Supporting Parties, vacated or subject to pending appeal and as to which order any appeal periods relating thereto shall have expired;

(f)      the Plan, the Final Order, the new (or amended) articles, by-laws and other constating documents, and all definitive legal documentation in connection with all of the foregoing, shall be satisfactory to the Company and the Majority Second Lien Noteholder Supporting Parties;

(g)      there shall not exist or have occurred any Material Adverse Change;

(h)      the reasonable fees and expenses of the legal advisors of the Second Lien Noteholder Supporting Parties shall have been paid;

(i)      all accrued and unpaid interest owing under the First Lien Notes up until the Effective Date shall have been paid in cash and all accrued and unpaid interest owing under the Second Lien Notes up to and including July 15, 2016 shall have been paid in cash (excluding, for greater certainty, with respect to the Second Lien Notes only, any default interest or interest accrued after July 15, 2016);

(j)      all filings that are required under applicable laws in connection with the Recapitalization Transaction shall have been made and any material regulatory consents or approvals that are required in connection with the Recapitalization Transaction shall have been obtained;

(k)      there shall not be in effect any preliminary or final decision, order or decree by a government, government authority, court or public authority and no application, action or proceeding shall have been made to any government, government authority, court or public authority, and no action or investigation shall have been announced, threatened or commenced by any government, government authority, court or public authority, in consequence of or in connection with the Recapitalization Transaction, which restrains, impedes or prohibits (or if granted could reasonably be expected to restrain, impede or prohibit), the Recapitalization Transaction or any material part thereof or requires or purports to require a material variation of the Recapitalization Transaction;

(l)      the Recapitalization Transaction shall be compliant with section 19 of the ITA, not result in the acquisition of control by a non-Canadian under the ICA, and receive clearance under the Competition Act; and

(m)    the Director appointed pursuant to section 260 of the CBCA shall have issued a certificate of arrangement giving effect to the articles of arrangement in respect of the Plan and the Plan.

The Plan shall provide for usual and customary releases in connection with the implementation of a Recapitalization Transaction under the CBCA to be effective on the Effective Date, which shall at a minimum provide that the Postmedia Entities, their shareholders, the First Lien Noteholders, the Second Lien Noteholders, and any of the foregoing persons’ respective officers, current and former directors, employees, auditors, financial advisors, legal counsel and agents, shall be released and discharged from any actions, causes of actions, damages, judgments, executions, obligations, liabilities and claims of any kind or nature whatsoever (other than liabilities or claims attributable to any of such persons’ gross negligence, fraud or wilful misconduct as determined by the final, non-appealable judgment of a court of competent jurisdiction) arising on or prior to the implementation date of the Plan in connection with the Existing Equity, the First Lien Notes, the First Lien Notes Indenture, the Second Lien Notes, the Second Lien Notes Indenture, the New Capital Offering, the Backstop Commitment Agreement, the Recapitalization Transaction, the Plan, any proceedings commenced with respect to the Plan and the Recapitalization Transaction, and any other actions or matters related directly or indirectly to the foregoing; provided however, that nothing will release or discharge any of the Postmedia Entities, their shareholders, the First Lien Noteholders and the Second Lien Noteholders from or in respect of their respective obligations under the Recapitalization Transaction, the Support Agreements, the Plan, the Backstop Commitment Agreement, the New Capital Offering or any document ancillary to the foregoing.

The common shares of PNCC may be consolidated for no consideration such that the total number of outstanding common shares as at the implementation of the Plan is acceptable to the Company and the Majority Second Lien Noteholder Supporting Parties.

No fractional common shares will be issued. Any fractional common shares that would otherwise have been issued shall be rounded down to the nearest whole number.

PNCC shall remain a public company following the implementation of the Plan and the common shares of PNCC shall be publicly listed for trading on the TSX or the TSX Venture Exchange.

The Parties will work in good faith to negotiate, execute and deliver definitive documentation necessary to implement the Recapitalization Transaction in accordance with the terms set out in this Term Sheet and in form and substance satisfactory to the Company and the Majority Second Lien Noteholder Supporting Parties. All of the definitive documentation shall contain customary provisions for transactions of this nature.

The Recapitalization Transaction shall be structured in a tax efficient manner satisfactory to the Company and the Majority Second Lien Noteholder Supporting Parties.

All public announcements in respect of the Recapitalization Transaction shall be in form and substance acceptable to the Company and the Majority Second Lien Noteholder Supporting Parties; provided that, nothing herein shall prevent a party from making public disclosure in respect of the Recapitalization Transaction to the extent required by applicable law.

It is intended that this Term Sheet, once executed, would be filed by the Company, together with the form(s) of Support Agreement(s), on SEDAR and ▇▇▇▇▇, and, if applicable, filed with the court, together with the form(s) of Support Agreement(s), in connection with proceedings commenced under the CBCA in connection with the implementation of the Recapitalization Transaction and the Plan and any recognition proceedings under U.S. law in connection therewith, or other applicable court proceedings in connection with the implementation of the Recapitalization Transaction or an Alternative Transaction (as defined below), as applicable.

Notwithstanding anything to the contrary in this Term Sheet, no information with respect to the principal amount of Second Lien Notes and number of Existing Shares held or managed by any individual Second Lien Noteholder Supporting Party or the identity of any individual Second Lien Noteholder Supporting Party shall be disclosed by the Company or any of its subsidiaries or affiliates, without the prior written consent of each such Second Lien Noteholder Supporting Party, provided, however, that such information may be disclosed: (i) to the directors, executives, senior management, auditors, employees, financial advisors and legal advisors (collectively, its “Representatives”) of the Company, provided that each such Representative (A) needs to know such information for purposes of the Recapitalization Transaction, (B) is informed of this confidentiality provision and the confidential nature of such information, and (C) agrees to act in accordance with the terms of this confidentiality provision; and (ii) in response to, and to the

extent required (as determined by the Company following advice of the Company’s legal counsel) by applicable law, by any stock exchange rules on which its securities or those of any of its affiliates are traded, by any governmental entity or by any subpoena or other legal process, including, without limitation, by any court of competent jurisdiction or applicable rules, regulations or procedures of a court of competent jurisdiction; provided that, if it or any of its Representatives is required to disclose the identity or specific holdings of the Second Lien Noteholder Supporting Party in the manner set out in the preceding sentence, the Company shall provide the applicable Second Lien Noteholder Supporting Party with prompt written notice of any such requirement (including a written copy of the proposed disclosure), to the extent permissible and practicable under the circumstances, and the Company shall reasonably cooperate with such Second Lien Noteholder Supporting Party (at such Second Lien Noteholder Supporting Party’s sole expense) in seeking a protective order or other appropriate remedy or waiver of compliance with such requirement; provided further that: (x) the amount of Second Lien Notes or number of Existing Shares held collectively by all Second Lien Noteholder Supporting Parties in the aggregate from time to time may be set out in any public disclosure, including, without limitation, press releases and court materials, produced by the Company, all in form and substance satisfactory to the Company and the Majority Second Lien Noteholder Supporting Parties, (y) the Company may disclose the identity of a Second Lien Noteholder Supporting Party in any action to enforce this Term Sheet and/or the Support Agreement against such Second Lien Noteholder Supporting Party (and only to the extent necessary to enforce this Term Sheet and/or the Support Agreement against such Second Lien Noteholder Supporting Party), and (z) the Company may disclose in any of its proxy circulars the identity of, and amount of Existing Shares held by, a Second Lien Noteholder Supporting Party that holds 10% of more of the Existing Shares to the extent required by applicable securities laws (as determined by the Company following advice of the Company’s legal counsel).

In the event that it is determined by the Company and the Majority Second Lien Noteholder Supporting Parties that the Recapitalization Transaction shall not be implemented pursuant to a Plan under the CBCA for any reason, then such parties will consider and negotiate in good faith and if practicable consummate the Recapitalization Transaction by way of an alternative implementation method or proceeding, as determined by the Company and the Majority Second Lien Noteholder Supporting Parties (an “Alternative Transaction”).

In the event that an Alternative Transaction is to be effectuated, the terms of this Term Sheet pertaining to Recapitalization Transaction shall also apply to the Alternative Transaction, with any necessary amendments as the structure and implementation of the Alternative Transaction may reasonably require.

The Company and the Second Lien Noteholder Supporting Parties, and their respective legal and professional advisors, shall work in good faith in respect of all matters necessary to structure and implement the Alternative Transaction, including with respect to the determination of any court process, if any, pursuant to which the Alternative Transaction will be effectuated. The structuring and implementation of the Alternative Transaction shall be acceptable to the Company and the Majority Second Lien Noteholder Supporting Parties.

The Support Agreement between the Company and the Second Lien Noteholder Supporting Parties shall provide that the Company shall only be permitted to negotiate a bona fide, unsolicited proposal (provided that, the Company shall provide the Second Lien Noteholder Supporting Parties with prompt disclosure of any such proposal subject to non-disclosure agreements with the Company in effect as of the date hereof) and to enter into a transaction in respect of any such proposal, if the board of directors of the Company, following receipt of advice from its legal and financial advisors, determines that such proposal would reasonably be expected to result in a transaction more favourable to the Company and its stakeholders than the Recapitalization Transaction (the “Superior Transaction”).

The Company and the Second Lien Noteholder Supporting Parties shall have the right to terminate their Support Agreement upon the execution of a written agreement by the Company to pursue a Superior Transaction.

This Term Sheet may be executed in counterparts, which together will constitute one document. Facsimile and PDF signatures shall have the same legal effect as original signatures.

This Term Sheet and all of the definitive documentation contemplated hereby shall be governed by the laws of the Province of Ontario and the federal laws of Canada applicable therein.

interest paid in cash; provided that, for any Excess Cash Flow determination made during the 2017 fiscal year only, (x) any interest paid in cash in respect of the Second Lien Notes shall be excluded from the calculation of interest expense,

capital expenditures (excluding expenditures relating to capitalized lease obligations) and cash restructuring costs, not to exceed in aggregate (the “applicable limit”): (i) $35 million for any four quarter period ending on or prior to August 31, 2019, and (ii) $30 million for any four quarter

period thereafter; provided that the applicable limit for any four quarter period ending on or prior to August 31, 2019 will be increased by the unused portion of the applicable limit for the immediately preceding four quarter period; and

cash contributions to pension plans to the extent that such contributions exceed pension expenses, not to exceed the amount that is required to be contributed in such period pursuant to applicable law.

Issuer

PNI

PNCC and material restricted subsidiaries of PNCC and PNI (including, for greater certainty, 1576626 Ontario Inc. and 7731558 Canada Inc.)

Canadian dollars

C$225 million

July 15, 2021

Same as the First Lien Notes Indenture (8.25%)

Same as the First Lien Notes Indenture.

One set of security to secure the New First Lien Notes, permitted secured ▇▇▇▇▇▇ (for greater certainty, any foreign exchange ▇▇▇▇▇▇ entered into by the Issuer in connection with the New Second Lien Notes shall be unsecured or secured junior in priority to the New First Lien Notes) and cash management obligations, permitted ABL facility and permitted junior lien indebtedness (including the New Second Lien Notes), all subject to the terms of the Collateral Agency Agreement.

Permitted at any time at par (plus accrued and unpaid interest), without make-whole, premium or penalty.

None.

Mandatory         Redemption Amounts

(a)    50% of Excess Cash Flow (as defined in Schedule “A”) to be used to redeem New First Lien Notes at par within 30 days of the delivery of the applicable financials for each fiscal quarter ending in February and August (collectively the “Excess Cash Flow Payment Amount”). The first Excess Cash Flow Payment Amount shall be paid within 30 days of the delivery of the quarterly financials for the fiscal quarter ending in February 2017.

(b)    To the extent the Excess Cash Flow Payment Amount in any fiscal year is less than $10 million (the “ECF Shortfall”), the Issuer shall make an additional mandatory redemption of the New First Lien Notes at par equal to such ECF Shortfall within 30 days of the

delivery of its fiscal year end financials (commencing for the year ended August 31, 2017).

(c)    The mandatory redemptions described in (a) and (b) above shall be automatic, shall be paid to the trustee under the New First Lien Notes Indenture on behalf of the holders of New First Lien Notes, and there shall be no requirement to first make an offer to holders of New First Lien Notes in respect of such payments.

Covenants

(1)   Permitted Debt: Consistent with the First Lien Notes Indenture, except:

•       ABL facility basket reduced to C$30 million;

•       New Second Lien Notes permitted;

•       additional pari passu indebtedness basket of C$75 million to be added to support future acquisitions, subject to the Consolidated First-Lien Leverage Ratio being at least 0.50 to 1.0 less than it was prior to the acquisition (after giving pro-forma effect to the acquisition and related incurrence of debt), and provided that any such pari passu indebtedness shall (i) have a maturity date no earlier than the maturity date of the New First Lien Notes; (ii) have no rights to mandatory redemptions or repayments (including, without limitation, from excess cash flow or proceeds from any Asset Disposition); and (iii) have covenants, events of default and economics (including without limitation coupon, interest or fees) no more favourable to the debtholder than the covenants, events of default and economics in respect of the First Lien Notes, provided that to the extent any such pari passu indebtedness has covenants, events of default or economics more favourable to the debtholder than the covenants, events of default and economics in respect of the First Lien Notes, then such more favourable terms shall also be granted in favour of the First Lien Notes; and

•       existing C$25 million general junior lien debt basket increased to C$100 million; provided that (i) no cash interest shall be paid on such junior lien debt until the New First Lien Notes are repaid in full, and (ii) such junior lien debt shall (x) have a maturity date later than the maturity date under the New First Lien Notes, (y) have events of default no more onerous than the New First Lien Notes Indenture, and (z) be subject to intercreditor terms that are materially consistent with the intercreditor terms set forth in the Collateral Agency Agreement and shall be provided with no greater rights than those provided to the New Second Lien Notes pursuant to the Collateral Agency Agreement.

(2)   Permitted Liens: Consistent with the First Lien Notes Indenture, except:

•       New Second Lien Notes permitted;

•       ABL facility, New Second Lien Notes and permitted junior lien debt may be secured by same security as the First Lien Notes (by way of joinder to the Collateral Agency Agreement);

•       any liens in favour of any foreign exchange hedge provider in relation to the New Second Lien Notes shall be junior in priority to the New First Lien Notes; and

•       lien baskets added to match new permitted debt baskets above.

(3)   Distributions: Consistent with the First Lien Notes Indenture, except

•       Removal of builder basket in 4.07(a) of the First Lien Notes Indenture (i.e., no cash distributions until New First Lien Notes are extinguished).

•       Interest on Second Lien Notes: No cash interest on New Second Lien Notes shall be paid for the first 3 years from the closing date, unless at the time of an interest payment the aggregate principal amount of outstanding New First Lien Notes, together with any indebtedness ranking pari passu with the New First Lien Notes, is C$112.5 million or less; provided, that at the time of such interest payment, no amounts may be drawn on any ABL facility.

(4)  Asset sales:    Subject to any requirements in an ABL Facility with respect to ABL Collateral, (a) at any time PNCC, the Issuer or any Subsidiary thereof receives Net Available Cash from any individual Asset Disposition of not less than C$1 million, such Net Available Cash shall be applied to a mandatory redemption at par of New First Lien Notes, and (b) with respect to any individual Asset Disposition by PNCC, the Issuer or any Subsidiary thereof where the Net Available Cash received is less than C$1 million but greater than C$100,000, such Net Available Cash shall be paid directly by the purchaser to the Collateral Agent to be held in trust in a Collateral Account (with no withdrawal or reinvestment rights for PNCC, the Issuer or any of their Subsidiaries) and, immediately upon the aggregate amount held in such Collateral Account being not less than $1 million, such amounts shall be applied to a mandatory redemption at par of New First Lien Notes, in the case of both (a) and (b) above with no ability to apply such net proceeds to any indebtedness other than the New First Lien Notes. Any such proceeds shall be applied as a redemption at par (with no requirement to first make an offer to holders of New First Lien Notes in respect of such payments).

Other covenants to be consistent with the First Lien Notes Indenture, with such adjustments thereto as reasonably necessary to give effect to the terms of this term sheet.

Issuer

PNI

PNCC and material restricted subsidiaries of PNCC and PNI (including, for greater certainty, 1576626 Ontario Inc. and 7731558 Canada Inc.)

U.S. dollars

U.S. dollar equivalent of C$115.5 million (based on the rate at which C$ may be exchanged into US$, determined by reference to the Bank of Canada noon spot rate as of a date agreed to by the Company and the Majority Second Lien Noteholder Supporting Parties that is not more than seven business days prior to the Effective Date, or such other date as agreed to by the Company and the Majority Second Lien Noteholder Supporting Parties, provided, however, that the intention is to use a date as close to the Effective Date as practicable).

July 15, 2023

At the option of PNI, (a) 10.25% cash interest, or (b) 11.25% PIK interest, provided that no cash interest shall be paid unless permitted by the indenture for the New First Lien Notes (see item (3) under “Covenants” in Schedule B).

Same as the New First Lien Notes Indenture. The New Second Lien Notes will be secured under the same security documents as the New First Lien Notes, subject to the terms of the Collateral Agency Agreement.

Permitted at any time, after the New First Lien Notes are repaid in full, at par (plus accrued and unpaid interest), without make-whole, premium or penalty.

None.

Mandatory Redemption with Excess Cash Flow

None.

Covenants

Events of Default

Consent Thresholds

To be agreed by the Company and the Majority Second Lien Noteholder Supporting Parties acting reasonably for a transaction of this nature, but to be no more onerous than under the New First Lien Notes Indenture.