CDN. $74,000,000 SENIOR SECURED NON-REVOLVING TERM CREDIT FACILITY and CDN. $5,329,900 SENIOR SECURED REVOLVING OPERATING FACILITY AMENDED AND RESTATED CREDIT AGREEMENT among SUNDIAL GROWERS INC. (as Borrower) and THE FINANCIAL INSTITUTIONS FROM TIME...

ARTICLE 1 INTERPRETATION

1.1

Definitions

1.2

Headings and Table of Contents

1.3

Terms Generally

1.4

Generally Accepted Accounting Principles

1.5

Accounting Terms: Changes to Generally Accepted Accounting Principles

1.6

Time

1.7

Payment for Value

1.8

Monetary References

1.9

Lenders in Various Capacities

1.10

Amendment and Restatement

ARTICLE 2 REPRESENTATIONS AND WARRANTIES

2.1

Representations and Warranties

2.2

Deemed Representations and Warranties

ARTICLE 3 THE CREDIT FACILITIES

3.1

Establishment of the Facilities

3.2

Reduction of Syndicated Facility Commitments

3.3

Reduction of Operating Facility Commitments

3.4

Purpose

3.5

Borrowings - Syndicated Facility and Operating Facility

3.6

Conditions Applicable to Bankers’ Acceptances and BA Equivalent Advances

3.7

Administrative Agent’s Duties re: Bankers’ Acceptances

3.8

Letters of Credit

3.9

Notice of Repayment

3.10

Pro-Rata Treatment of Borrowings

3.11

Conversion Option

3.12

Rollovers

3.13

Notices Irrevocable

3.14

Lender Swaps

3.15

Overdrafts

3.16

Cash Management Services and Creditcard Facilities

ARTICLE 4 REPAYMENT AND PREPAYMENT

4.1

Mandatory Repayments of Syndicated Facility

4.2

Reduction of Commitment

4.3

Cash Collateralization

4.4

Cancellation of Commitment and Prepayment

4.5

Early Repayment of Letters of Credit and Bankers’ Acceptances

4.6

Evidence of Indebtedness

ARTICLE 5 PAYMENT OF INTEREST AND FEES

5.1

Interest on Prime Loans

5.2

Bankers’ Acceptance Fees

5.3

Letter of Credit Fees

5.4

Interest on Overdue Amounts

5.5

5.6

5.7

5.8

5.9

ARTICLE 6 SECURITY

6.1

6.2

6.3

6.4

6.5

6.6

6.7

6.8

6.9

6.10

6.11

6.12

6.13

6.14

ARTICLE 7 PAYMENT

7.1

7.2

7.3

ARTICLE 8 CONDITIONS PRECEDENT TO AMENDMENT AND RESTATEMENT

8.1

8.2

8.3

ARTICLE 9 COVENANTS OF THE BORROWER

9.1

9.2

9.3

9.4

ARTICLE 10 EVENTS OF DEFAULT

10.1

10.2

10.3

10.4

10.5

10.6

10.7

10.8

10.9

10.10

10.11

ARTICLE 11 INCREASED COST, TAXES, LENDER REPLACEMENT, ILLEGALITY, SUBSTITUTE BASIS OF BORROWING, FUNDING INDEMNITY

11.1

11.2

11.3

11.4

11.5

11.6

ARTICLE 12 THE ADMINISTRATIVE AGENT AND THE LENDERS

12.1

12.2

12.3

12.4

12.5

12.6

12.7

12.8

12.9

12.10

12.11

12.12

12.13

12.14

12.15

12.16

12.17

12.18

12.19

12.20

12.21

12.22

12.23

12.24

ARTICLE 13 SUCCESSORS AND ASSIGNS, JUDGMENT CURRENCY AND CONFIDENTIAL INFORMATION

13.1

13.2

13.3

13.4

ARTICLE 14 MISCELLANEOUS

14.1

14.2

14.3

14.4

14.5

14.6

14.7

14.8

14.9

14.10

14.11

14.12

14.13

14.14

14.15

Definitions

the advance of Prime Loans by the Syndicated Lenders and the acceptance and purchase of Bankers’ Acceptances, or if applicable, the advance of BA Equivalent Advances, by the Syndicated Lenders (the “Syndicated Accommodations”); and

the advance of Prime Loans by the Operating Lender and the issuing of Letters of Credit by the Operating Lender (the “Operating Accommodations”);

in the case where such last event is the delivery of a Demand for Payment, the time of delivery of an Acceleration Notice or the last day of the relevant time period set out in Section 10.3; and

in the case where such last event is the occurrence of a Termination Event, the time of occurrence of such Termination Event determined pursuant to the provisions of the applicable Credit Document giving rise to such Termination Event;

for the Fiscal Quarter ending on the Covenant Monitoring Date, calculated by multiplying the amount derived from such financial calculation for such Fiscal Quarter by four (4);

for the first Fiscal Quarter ending after the Covenant Monitoring Date, calculated by multiplying the amount derived from such financial calculation for the first two Fiscal Quarters by two (2);

for the second Fiscal Quarter ending after the Covenant Monitoring Date, calculated by multiplying the amount derived from such financial calculation for such first three Fiscal Quarters by 4/3; and

thereafter, calculated on a trailing four (4) Fiscal Quarter basis;

Level

Senior Funded Debt to EBITDA Ratio

I

II

III

IV

Standby Fees are applicable to the Operating Facility only

upon the delivery of the Compliance Certificate delivered in respect of the Covenant Monitoring Date and thereafter, changes in the Applicable Margin shall be effective and adjusted in accordance with Section 5.9;

as at the Effective Date:

the Applicable Margin (other than with respect to the Fortis LC) shall be set at Level V and shall remain at such Level until the Compliance Certificate is delivered in respect of the Covenant Monitoring Date at which point the Applicable Margin shall be redetermined in accordance with Section 5.9; and

the Applicable Margin for the Fortis LC shall be 175 bps per annum and shall remain as such until the Compliance Certificate is delivered in respect of the Covenant Monitoring Date at which point such Applicable Margin shall be redetermined in accordance with Section 5.9;

for the purposes of calculating the Applicable Margins for Prime Loans and Bankers’ Acceptances, the per annum rate is expressed on the basis of a 365-day year, as applicable; and

upon the occurrence and during the continuance of any Event of Default, each of the above Applicable Margins (other than for the Standby Fee Rate) will increase by 200 bps;

the Operating Facility, the Applicable Percentage for the Operating Lender shall be one hundred percent (100%) and for all other Lenders shall be zero percent (0%); and

the Syndicated Lenders, the Applicable Percentage for a Syndicated Lender shall be the proportion that the Syndicated Facility Commitment of such Syndicated Lender bears to the Total Syndicated Facility Commitment at such time.

a Lender;

an Affiliate of a Lender; or

an entity or an Affiliate of an entity that administers or manages a ▇▇▇▇▇▇;

the principal amount outstanding by way of Prime Loans made by the Syndicated Lenders together with the face amount of Bankers’ Acceptances outstanding (and, if applicable, any related BA Equivalent Advances) issued and purchased by the Syndicated Lenders (collectively, the “Syndicated Borrowings”); and

the principal amount outstanding by way of Prime Loans made by the Operating Lender together with the undrawn amount of all outstanding Letters of Credit issued by the Operating Lender (collectively, the “Operating Borrowings”);

any plant or seed, whether live or dead, from any species or subspecies of genus Cannabis, including Cannabis sativa, Cannabis indica and Cannabis ruderalis, Marijuana and Industrial Hemp and any part, whether live or dead, of the plant or seed thereof, including any stalk, branch, root, leaf, flower, or trichome;

any material obtained, extracted, isolated, or purified from the plant or seed or the parts contemplated by paragraph (a) of this definition, including any oil, cannabinoid, terpene, genetic material or any combination thereof;

any organism engineered to biosynthetically produce the material contemplated by paragraph (b) of this definition, including any micro-organism engineered for such purpose;

any biologically or chemically synthesized version of the material contemplated by paragraph (b) of this definition or any analog thereof, including any product made by any organism contemplated by paragraph (c) of this definition;

any other meaning ascribed to the term “cannabis” under Applicable Law in any Qualified Jurisdiction, including the Cannabis Act and the Controlled Drugs and Substances Act (Canada); and

any other meaning ascribed to the term “cannabis” under the Controlled Substances Act (United States);

with respect to Bankers’ Acceptances having a Standard Term which are required to be accepted and, if applicable, purchased on any day, the arithmetic average of the percentage discount rates for Canadian Dollar bankers’ acceptances in comparable amounts having an identical issue and maturity date which are quoted on the “Reuters’ Screen CDOR CAD-BA Page” (as defined in the International Swaps and Derivatives Association, Inc. definitions, as modified and amended from time to time) (or if such screen shall not be available any successor or similar service selected by the Administrative Agent) as at approximately 8:00 a.m. (Calgary time) on such day, or if such day is not a Business Day, then on the immediately preceding Business Day (as adjusted by the Administrative Agent in good faith after 8:00 a.m. (Calgary time) or as soon thereafter as practicable to reflect any error in a posted rate of interest or in the posted average annual rate of interest); and

with respect to Bankers’ Acceptances which do not have a Standard Term or if the rate referred to in paragraph (a) of this definition does not appear on such “Reuters Screen CDOR CAD - BA Page” (or a successor service as referred to in paragraph (a) of this definition), the arithmetic average of

the adoption or taking effect of any Applicable Law or treaty;

any change in any Applicable Law or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority; or

the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, to the extent applicable to the Lenders, (x) the ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇ Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the Office of the Superintendent of Financial Institutions of Canada or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued;

Voting Shares of the Borrower which, together with all other Voting Shares of the Borrower held by such Person or Persons, constitute in the aggregate more than 30% of all outstanding Voting Shares of the Borrower; or

the right to elect a majority of the directors of the Borrower;

an initial final maturity or due date in respect of repayment of principal extending beyond the Maturity Date;

no scheduled or mandatory payment or repurchase of principal thereunder (other than acceleration following an event of default in regard thereto or payment which can be satisfied by the delivery of common shares in the capital stock of the Borrower as contemplated in paragraph (f) of this definition) prior to the Maturity Date;

upon and during the continuance of a Default, an Event of Default or acceleration of the time for repayment of any Lender Outstandings which has not been rescinded: (i)all amounts payable in respect of principal, premium (if any) or interest under such debentures are subordinate and junior in right of payment to all such Lender Outstandings; and (ii)no enforcement steps or enforcement proceedings may be commenced in respect of such debentures;

upon distribution of the assets of the Borrower on any dissolution, winding up, total liquidation or reorganization of the Borrower (whether in bankruptcy, insolvency or receivership proceedings or upon an assignment for the benefit of creditors or any other marshalling of the assets and liabilities of such Person, or otherwise), all Lender Outstandings shall first be paid in full, or provisions made for such payment, before any payment is made on account on principal, premium (if any) or interest payable in regard to such debentures;

the occurrence of a Default, an Event of Default or the acceleration of the time for repayment of any of the Lender Outstandings or enforcement of the rights and remedies of the Secured Parties shall not in and of themselves:

cause a default or event of default (with the passage of time or otherwise) under such debentures or the indenture or instrument governing the same; or

cause or permit the obligations under such debentures to be due and payable prior to the stated maturity thereof; and

except during an “event of default” under and as defined in such debentures and the indenture or agreement governing same, payments of interest or principal due and payable under such debentures can be satisfied, at the option of the Borrower, by delivering common shares in the capital stock of the Borrower in accordance with the indenture or agreement governing such debentures (whether such common shares are received by the holders of such debentures as payment or as sold by a trustee or representative under such indenture or agreement to provide cash for payment to holders of such debentures);

for borrowed money, including by way of overdraft or other extensions of credit, and any Permitted Subordinated Debt;

arising pursuant to bankers’ acceptance facilities, note purchase facilities and commercial paper programs, or the stated amount of letters of credit, letters of guarantee and surety bonds supporting obligations which would otherwise constitute Debt within the meaning of this definition or indemnities issued in connection therewith;

evidenced by bonds, debentures, notes or other similar instruments (whether or not with respect to the borrowing of money and whether or not payable by, or convertible into, equity);

arising under Guarantees, indemnities, assurances, legally binding comfort letters or other contingent obligations relating to the indebtedness or other obligations of any other Person which would otherwise constitute Debt within the meaning of this definition;

incurred for the purpose of or having the effect of providing Financial Assistance relating to obligations of any other Person which would otherwise constitute Debt within the meaning of this definition;

secured by a Permitted Encumbrance on any Property of the Loan Parties, whether or not assumed by them;

arising under or in connection with an absolute or limited recourse sale or factoring of accounts receivable or other asset securitization program (with the amount of Debt thereunder deemed to be equal to the net proceeds received by such Person thereunder);

for or in respect of Financial Leases;

for or in respect of the deferred purchase or acquisition price of Property or services (including obligations secured by Purchase Money Security Interests and obligations in respect of a Sale/Leaseback);

for or in respect of the purchase price of any Property the purchase price in respect of which has been prepaid by the purchaser; and

for or in respect of redemption obligations with respect to any shares issued by the Borrower or a Subsidiary (excluding shares that may be redeemed in whole or in part in specie) which are not held by the Borrower or its Subsidiaries and which are by their terms or pursuant to any contract, agreement or arrangement:

redeemable, retractable, payable or required to be purchased or otherwise retired or extinguished, or convertible into Debt in any case, prior to the Maturity Date: (A)at a fixed or determinable date, (B)at the option of any holder thereof, or (C)upon the occurrence of a condition not solely within the control and discretion of the Borrower or such Subsidiary; or

convertible into any other shares described in (i) above;

has failed to (i)fund all or any portion of any Accommodation required to be made by it hereunder within two Business Days of the date such Accommodation was required to be funded hereunder unless such ▇▇▇▇▇▇ notifies the Administrative Agent and the Borrower in writing that such failure

has notified the Borrower, the Administrative Agent or any Lender (verbally or in writing) that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such ▇▇▇▇▇▇’s obligation to fund an Accommodation hereunder and states that such position is based on such ▇▇▇▇▇▇’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied);

has failed, within three Business Days after written request by the Administrative Agent or the Borrower, to confirm in writing to the Administrative Agent and the Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower);

that has otherwise failed to pay over to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within three Business Days of the date when due, unless the subject of a good faith dispute;

has, or its Lender Parent has, (i)become the subject of a proceeding under any Debtor Relief Law, (ii)had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or Property; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any Equity Interest in that Lender or Lender Parent by a Governmental Authority so long as such Equity Interest does not result in or provide such Lender or Lender Parent with immunity from the jurisdiction of courts within Canada or from the enforcement of judgments or writs of attachment on its Property or permit such Lender or Lender Parent (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender or Lender Parent, or (iii)become the subject of a Bail-In Action; or

that is generally in default of its obligations under other existing credit or loan documentation under which it has commitments to extend credit.

with respect to an issue of Bankers’ Acceptances having the same maturity date accepted by a Lender that is a bank under Schedule I of the Bank Act (Canada), the CDOR Rate; and

with respect to an issue of Bankers’ Acceptances having the same maturity date accepted by a Lender that is not a bank under Schedule I to the Bank Act (Canada), the CDOR Rate plus 10 bps;

any declaration, payment or setting aside for payment of any dividend, return of capital or other distribution or payment on or in respect of any of the Equity Interests of such Person;

any redemption, retraction, purchase, retirement or other acquisition, in whole or in part, of any of the Equity Interests of such Person;

the payment of any principal, interest, fees, redemption amounts or other amounts on or in respect of any loans, advances or other indebtedness owing at any time by such Person to a holder of Equity Interests of such Person or an Affiliate of such holder;

any loan, advance, payment of management or consulting fees or reimbursement of costs which is made by the Person to or in favour of a holder of Equity Interests of such Person or an Affiliate of such holder except where any such payment is made to any such holder in such holder’s capacity as an officer, director or employee of such Person in the ordinary course of business; or

the transfer by the Person of any Property for consideration of less than its or their fair market value or on non-arms’ length terms and conditions to a holder of Equity Interests of such Person or an Affiliate of such holder;

all Net Income for such period;

all Interest Expense to the extent deducted in determining such Net Income;

all amounts deducted in the calculation of such Net Income in respect of the provision for income taxes;

all amounts deducted in the calculation of such Net Income in respect of non-cash items, including depreciation and amortization, future taxes, non-cash losses or write-downs resulting from foreign currency obligations (in accordance with GAAP) or from the Mark-to-Market of outstanding Swaps (in accordance with GAAP), stock-based compensation and the write down or impairment of Property;

all non-recurring extraordinary losses (other than in the ordinary course of business) acceptable to the Lenders (acting reasonably), to the extent deducted in the calculation of such Net Income;

any other unusual or non-recurring cash charges, expenses or losses designated by the Borrower with the prior written consent of the Lenders (in their sole discretion), in each case, to the extent deducted in the calculation of such Net Income; and

all losses attributable to minority Equity Interests in any Person or Distributions received in cash in respect of any minority Equity Interest in any Person, in each case, to the extent deducted in the calculation of such Net Income;

earnings attributable to extraordinary and non-recurring earnings and gains (other than in the ordinary course of business) acceptable to the Lenders (acting reasonably);

earnings attributable to minority Equity Interests (unless and to the extent actually distributed to the Borrower or a Subsidiary of the Borrower); and

any other non-cash items increasing such Net Income for such period including non-cash gains or write-ups resulting from foreign currency obligations (in accordance with GAAP) or from the Mark-to-Market of outstanding Swaps (in accordance with GAAP);

EBITDA as at the end of any particular Fiscal Quarter shall be calculated on an Annualized Basis; and

to the extent acceptable by the Administrative Agent and the Lenders:

if any Material Acquisition of Collateral is made by a Loan Party (whether by amalgamation, asset or share acquisition or otherwise) at any time during the

if any Material Disposition of Collateral is made by a Loan Party (whether by asset or share disposition or otherwise) at any time during the relevant period of calculation, or the Collateral ceases to be owned by a Loan Party, such Material Disposition shall be deemed to have been made on and as of the first day of such calculation period;

in the case of any corporation, all capital stock and any securities exchangeable for or convertible into capital stock;

in the case of an association or business entity, any and all shares, interests, participation rights or other equivalents of corporate stock (however designated) in or to such association or entity;

in the case of a partnership, limited liability company or unlimited liability company, partnership or membership interests (whether general or limited), as applicable; and

any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distribution of Property of, the issuing Person,

taxes imposed on or measured by its overall net income (however denominated), and franchise taxes imposed on it, by the jurisdiction (or any political subdivision thereof) under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located or which otherwise has jurisdiction over such Lender;

any branch profits taxes or any similar tax imposed by any jurisdiction in which the Borrower is located; and

in the case of a Foreign Lender (other than an assignee pursuant to a request by the Borrower under Section 11.3(b)), any withholding tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party hereto (or designates a new lending office) or is attributable to such Foreign Lender’s failure or inability (other than as a result of a Change in Law) to comply with Section 11.2(e), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from the Borrower with respect to such withholding tax pursuant to Section 11.2(a);

scheduled principal payments in respect of any Senior Funded Debt (including any Senior Funded Debt arising under this Agreement, any Bilateral Financial Services Agreement or a Permitted Swap); and

lease payments in respect of real or personal property leases;

all interest accrued or payable in respect of such period, including capitalized interest and imputed interest with respect to lease obligations included as Debt;

all fees (including standby and commitment fees, acceptance fees in respect of bankers’ acceptances and fees payable in respect of letters of credit, letters of guarantee and similar instruments) accrued or payable in respect of such period, prorated (as required) over such period;

any difference between the face amount and the discount proceeds of any bankers’ acceptances, commercial paper and other obligations issued at a discount, prorated (as required) over such period;

the aggregate of all purchase discounts relating to the sale of Accounts Receivable in connection with any asset securitization program; and

all net amounts charged or credited to interest expense under any Interest Swap in respect of such period;

when there are less than three Lenders, all of the Lenders;

when there are three or more Lenders:

during the continuance of a Default or an Event of Default when there are any Borrowings, and subject to Section 10.5(a), those Lenders to whom there is owing 66²⁄₃% or more of the aggregate Borrowings under the Syndicated Facility and Operating Facility; and

at any other time, those Lenders whose Commitments are, in the aggregate, at least 66²⁄₃% of the Total Commitment;

impair in any material manner the ability of any Loan Party to perform any of its obligations under this Agreement or any other Loan Document;

have any material and adverse effect upon the validity or enforceability of any of the Security or upon the ranking of any of the Security Interests granted thereby or the rights or remedies intended or purported to be granted to the Administrative Agent under or pursuant to the Security; or

be material and adverse to the business, operations, Property, condition (financial or otherwise), results of operations or prospects of the Loan Parties, on a consolidated basis and taken as a whole;

such Loan Party has established reasonable reserves for such contest in accordance with GAAP;

proceeding with such contest does not have, and would not reasonably be expected to have a Material Adverse Effect; and

proceeding with such contest will not create a material risk of sale, forfeiture or loss of, or interference with the use or operation of, a material part of the Property of such Loan Party;

a Disposition of inventory in the ordinary course of business and in keeping with prudent industry practice;

a Disposition of any tools, implements, Parts, equipment or machinery which may have become worn out, unservable, unserviceable, obsolete, unsuitable or unnecessary in its operations or activities, provided that such Disposition is in the ordinary course of business and in keeping with prudent industry practice;

abandonments, surrenders or terminations of immaterial rights or interests effected in the ordinary course of business in accordance with prudent industry practice;

a Disposition by a Loan Party to another Loan Party;

the Disposition of the issued share capital of Project Seed Topco Limited pursuant to the Bridge Farm PSA;

the Disposition of the ▇▇▇▇▇▇▇ Property and the Rockyview Property and all associated fixtures;

the Disposition of 30 Indoor Modular Grow Rooms;

any Disposition of Property not otherwise described in paragraphs (a) through (g) above, provided that the aggregate fair market value of the Property so Disposed of in any Fiscal Year does not exceed the Threshold Amount; and

any other Disposition to which the Majority Lenders agree in writing;

to another Loan Party; and

solely in the form of Equity Interests;

Security Interests for Taxes, assessments or governmental charges and any other statutory Security Interests which are either not due or delinquent or relate to claims which are subject to a Permitted Contest;

any Security Interest arising in connection with worker’s compensation, unemployment insurance, pension and employment laws, or other social benefits laws or regulations which are:

not due or delinquent and which have not at such time been filed pursuant to law and no other statutory proceedings have been taken to enforce the same; or

subject to a Permitted Contest;

the Security Interest of any judgment rendered, or claim filed, against a Loan Party which is subject to a Permitted Contest, provided that no proceedings have been taken to enforce the same or the execution thereof has been stayed;

undetermined or inchoate Security Interests arising in the ordinary course of business and incidental to construction or current operations which relate to obligations not due or delinquent or which have not at such time been filed pursuant to law, and no other statutory proceedings have been taken to enforce the same;

Security Interests arising by operation of law such as builder’s liens, carriers’ liens, materialmens’ liens and other liens of a similar nature which relate to obligations not due or delinquent;

easements, rights-of-way, servitudes or other similar rights in real property (including rights-of-way and servitudes for railways, sewers, drains, pipe lines, gas and water mains, electric light and power and telephone or telegraph or cable television conduits, poles, wires and cables) granted to or reserved or taken by other Persons and other minor defects, encumbrances and restrictions which either alone or in the aggregate do not materially detract from the value of such real property or materially impair its use in the operation of the Business of such Loan Party;

Security Interests given by a Loan Party to a public utility or any municipality or governmental or other public authority when required by such public utility or municipality or other Governmental Authority in the ordinary course of the business of such Loan Party provided such Security Interests do not either alone or in the aggregate materially detract from the value of the Property affected thereby or materially impair its use in the operation of the Business of such Loan Party;

inchoate liens or any rights of distress reserved in or exercisable under any real property lease or sublease to which any Loan Party is a lessee which secure the payment of rent or compliance with the terms of such lease or sublease, provided that such rent is not then overdue and such Loan Party is then in compliance in all material respects with such terms;

liens securing the performance of bids, tenders, leases, contracts (other than for the repayment of borrowed money), surety and appeal bonds and performance bonds and other obligations of like nature, incurred as an incident to and in the ordinary course of business;

the Security Interests granted under the Security and any Security Interests created in favour of the Administrative Agent pursuant to any of the Loan Documents;

reservations, limitations, provisos and conditions expressed in any original grant from the Crown of any real property or interests therein and statutory exceptions to title;

Security Interests constituted by Financial Leases and Sale/Leasebacks, where the principal amount of indebtedness, obligations or liabilities secured thereby does not exceed the Threshold Amount in aggregate at any one time for all Loan Parties;

Purchase Money Security Interests provided that: (i) such Security Interests are granted at the time of or within 60 days of the acquisition of the Property subject thereto and are limited to the Property so acquired; and (ii) the principal amount of indebtedness, obligations or liabilities secured thereby does not exceed the Threshold Amount in aggregate at any one time for all Loan Parties;

Security Interests over specific Property (and for greater certainty excluding general Security Interests such as floating charges and general security agreements with respect to all or substantially all the Property of a Loan Party) which are not otherwise Permitted Encumbrances if the value of the Property secured thereby does not exceed the Threshold Amount in aggregate at any one time for all Loan Parties;

Security Interests granted by a Loan Party to another Loan Party if such Security Interests have been subordinated and postponed to the Security by a subordination agreement satisfactory to the Administrative Agent acting reasonably;

Security Interests granted by a Loan Party in favour of SAF pursuant to the terms of the SAF Documents but subject, at all times, to the SAF Intercreditor Agreement;

the Existing Liens, subject to Section 9.1(gg); and

all such other claims and encumbrances as are specifically disclosed by notice in writing from the Borrower to the Administrative Agent to the extent that the Majority Lenders, by specific notice in writing to the Borrower, consent to such claims and encumbrances as Permitted Encumbrances;

Financial Assistance pursuant to the Loan Party Guarantee;

Financial Assistance provided by a Loan Party to, or for the benefit of, another Loan Party;

Financial Assistance provided by a Loan Party to or for the benefit of Pathway RX Inc. in an aggregate amount not exceeding $400,000 per Fiscal Year;

a Guarantee provided by a Loan Party in connection with the SAF Convertible Note (but subject at all times to the SAF Intercreditor Agreement); and

Financial Assistance pursuant to the Bridge Farm Guarantee,

all Debt of a Loan Party to the Administrative Agent, the Lenders, the Swap Lenders, the Cash Management Lenders and the Creditcard Lenders under this Agreement, any Bilateral Financial Services Agreement or a Permitted Swap;

all Debt of a Loan Party to another Loan Party;

all Debt of a Loan Party secured by a Permitted Encumbrance provided that such Debt is within any applicable limitations provided for in the definition of Permitted Encumbrances and the aggregate amount of all such Debt does not, at any time, exceed the Threshold Amount;

all Debt of a Loan Party to the extent constituting Permitted Financial Assistance, provided that such Debt is within any applicable limitations provided for in the definition of Permitted Financial Assistance;

all Permitted Subordinated Debt; and

such other Debt of a Loan Party which the Majority Lenders have consented to in writing;

the SAF Indebtedness in an aggregate principal amount not exceeding $73,227,465.75 (plus all interest paid in kind pursuant to the SAF Convertible Note) while the SAF Intercreditor Agreement is in effect;

the HB Indebtedness in an aggregate principal amount not exceeding U.S.$18,000,000 while the HB Intercreditor Agreement is in effect;

any other Convertible Debentures; and

other unsecured Debt of a Loan Party to an Affiliate thereof;

the annual rate of interest announced from time to time by the Administrative Agent or the Operating Lender, as applicable, as being its reference rate then in effect for determining interest rates on Canadian Dollar denominated commercial loans made by the Administrative Agent or the Operating Lender, as applicable, in Canada; and

the One Month BA Rate in effect on such day plus 100 bps;

a Security Interest taken or reserved in Property to secure payment of all or part of its purchase price; and

a Security Interest taken in Property by a Person who gives value for the purpose of enabling a Loan Party to acquire rights in such Property, to the extent that the value is applied to acquire those rights;

the Lender Outstandings and all accrued and unpaid interest outstanding in respect of Prime Loans and all other interest and fees payable pursuant to Article 5;

the Creditcard Obligations;

the Cash Management Obligations;

all other Swap Indebtedness; and

all fees, expenses, reimbursement obligations, indemnities (including environmental indemnities included in the Security) and other amounts of any nature or kind that are payable under this Agreement or any other Loan Documents or Credit Documents but not included in any of the foregoing, whether matured or unmatured;

a Person of which another Person alone or in conjunction with its other Subsidiaries owns an aggregate number of the Voting Shares sufficient to enable the election of a majority of the directors (or other Persons performing similar functions) regardless of the manner in which other Voting Shares are voted;

a Person of which another Person alone or in conjunction with its other Subsidiaries has, through the operation of any agreement or otherwise, the ability to elect or cause the election of a majority of the directors (or other Persons performing similar functions) or otherwise exercise control over the management and policies of such Person; and

any partnership or trust of which any Loan Party:

is the general or managing partner or trustee; or

directly or indirectly owns more than 50% of the Equity Interests or beneficial interest thereof;

an automatic acceleration of the repayment of indebtedness outstanding hereunder pursuant to Section 10.2 without any notice being required thereunder from the Administrative Agent or any Lender; or

an automatic early termination of obligations relating to a Lender Swap, without any notice being required from the Swap Lender;

not subject to any Security Interests or any other encumbrances (other than Permitted Encumbrances);

not held in a Borrower Cash Collateral Account and would not appear as “restricted” on a consolidated balance sheet of the Borrower; and

is subject to a perfected first priority Security Interest in favor of the Secured Parties,

share capital of any class of any corporation or securities of any other Person which carry voting rights to elect the board of directors or other body exercising similar functions under any circumstances, but shares or other securities which carry the right to so vote conditionally upon the happening of an event shall not be considered Voting Shares until the occurrence of such event; and

an interest in a general partnership, limited partnership, trust, joint venture or similar Person which entitles the holder of such interest to receive a share of the profits, or on dissolution or partition, of the Property, of such Person; and

Headings and Table of Contents

Terms Generally

any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, replaced, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein);

any reference herein to any Person shall be construed to include such Person’s successors and assigns;

the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof;

all references herein to Articles, Sections and Schedules shall be construed to refer to Articles and Sections of, and Schedules to, this Agreement;

any reference to any law, statute or regulation herein shall, unless otherwise specified, refer to such law, statute or regulation as amended, modified, supplemented, restated or replaced from time to time; and

“year” means calendar year, “month” means calendar month, “quarter” means calendar quarter, and “in writing” or “written” includes printing, typewriting or any electronic means of communication capable of being visibly reproduced at the point of reception, including facsimile or email (PDF) transmission.

Generally Accepted Accounting Principles

Accounting Terms: Changes to Generally Accepted Accounting Principles

Each accounting term used in this Agreement, unless otherwise defined herein, has the meaning assigned to it under GAAP applied consistently throughout the relevant period and relevant prior periods.

If the Borrower, the Administrative Agent or the Majority Lenders acting reasonably determine at any time that any amount required to be determined hereunder would be materially different if such amount were determined in accordance with:

Generally Accepted Accounting Principles applied by the Borrower in respect of its financial statements on the date hereof (“Old GAAP”), rather than

Generally Accepted Accounting Principles subsequently in effect in Canada and applied by the Borrower in respect of its financial statements and utilized for purposes of determining such amount;

If the Borrower adopts a change in an accounting policy in the preparation of its financial statements in order to conform to accounting recommendations, guidelines, or similar pronouncements, or legislative requirements, and such change would require disclosure thereof under Old GAAP, or would reasonably be expected to materially adversely affect (i) the rights of, or the protections afforded to, the Administrative Agent or the Lenders hereunder or (ii) the position of the Borrower or of the Administrative Agent or the Lenders hereunder, the Borrower shall so notify the Administrative Agent, describing the nature of the change and its effect on the current and immediately prior year’s financial statements in accordance with Old GAAP and in detail sufficient for the Administrative Agent and the Lenders to make the determination required of them in the following sentence. If either the Borrower, the Administrative Agent or the Majority Lenders determine at any time that such change in accounting policy results in a material adverse change either (A)in the rights of, or protections afforded to, the Administrative Agent or the Lenders intended to be derived, or provided for, hereunder or (B)in the position of the Borrower or of the Administrative Agent and the Lenders hereunder, written notice of such determination shall be delivered by the Borrower to the Administrative Agent, in the case of a determination by the Borrower, or by the Administrative Agent to the Borrower, in the case of a determination by the Administrative Agent or the Majority Lenders.

Upon the delivery of a written notice pursuant to Section 1.5(b) or Section 1.5(c), the Borrower and the Administrative Agent on behalf of the Lenders shall meet to consider the impact of such change in Old GAAP or such change in accounting policy, as the case may be, on the rights of, or protections afforded to, the Administrative Agent and the Lenders or on the position of the Borrower or of the Administrative Agent and the Lenders and shall in good faith negotiate to execute and deliver an amendment or amendments to this Agreement in order to preserve and protect the intended rights of, or protections afforded to, the Administrative Agent and the Lenders

For the purposes of this Agreement, including all financial calculations to be made hereunder, any lease which would be accounted for as an operating lease under IFRS as in effect on December 31, 2018 shall be, notwithstanding any subsequent change in IFRS, deemed to be accounted for as an operating lease and not as a capital lease or a financial lease (regardless of whether such lease is entered into or assumed before or after December 31, 2018).

Time

Payment for Value

Monetary References

Lenders in Various Capacities

Amendment and Restatement

On the date on which all of the conditions set forth in Section 8.1 have been satisfied (or waived in writing by all of the Lenders):

the Original Credit Agreement shall be and is hereby amended and restated in the form of this Agreement; and

all Borrowings (as that term is defined in the Original Credit Agreement), Secured Obligations and other amounts outstanding under the Original Credit Agreement prior to the date hereof shall continue to be outstanding under this Agreement and shall be deemed to be Borrowings and Secured Obligations owing by the Loan Parties to the Lenders and the other Secured Parties hereunder, as applicable.

Notwithstanding the foregoing or any other term hereof, all of the covenants, representations and warranties on the part of the Borrower under the Original Credit Agreement and all of the claims and causes of action arising against the Borrower in connection therewith, in respect of all matters, events, circumstances and obligations arising or existing prior to the date hereof shall continue, survive and shall not be merged in the execution of this Agreement or any other Loan Documents or any advance or provision of any Borrowing hereunder.

Representations and Warranties

Existence: each Loan Party is a duly incorporated and organized corporation or a duly created partnership or trust, as applicable, under the laws of Canada or a Province of Canada, is validly existing under such laws, and is duly registered and qualified as an extra-provincial corporation, partnership or trust, as applicable, under the laws of each jurisdiction in which the nature of any business transacted by it or the character of any Property owned or leased by it requires such registration and qualification;

Power: each Loan Party has full corporate, partnership or trust, as applicable, capacity, power and authority to own its Property, to conduct its Business as now conducted and as proposed to be conducted, to execute and deliver each Loan Document to which it is a party and to perform its obligations thereunder;

Authorization: the execution, delivery and performance by each Loan Party of each of the Loan Documents to which it is a party have been duly authorized by all necessary corporate, partnership, trust or other action;

Execution: each Loan Document to which any Loan Party is a party has been duly executed and delivered by it;

Binding Obligations: each Loan Document to which any Loan Party is a party is a legal, valid and binding obligation of each Loan Party that is a party thereto enforceable against such Loan Party

Violations and Approvals: the execution, delivery and performance by each Loan Party of each Loan Document to which it is a party:

does not and will not violate its articles, by-laws, partnership agreement, trust indenture (each as applicable) or other governing documents;

does not and will not result in a breach of or constitute a default or require any consent under, or result in the creation of any Security Interest, other than a Permitted Encumbrance, upon any of its Property pursuant to any Material Agreement or Material License to which it is a party or by which it or its Property may be bound or affected;

does not require any Governmental Action, licence, consent or approval of or notice to or filing with any Governmental Authority other than such as are necessary with respect to the registration and perfection of the Security and the Security Interests constituted thereby; and

does not and will not contravene any presently existing provision of Applicable Law or any Governmental Action applicable to it or any of its Property;

Security: the Security Interests created by the Security granted by each Loan Party to the Administrative Agent rank as first priority Security Interests in priority to all other Security Interests over the Collateral, subject only to Permitted Encumbrances which, under Applicable Law, may rank in priority thereto;

Title to Property: each Loan Party has good and marketable title to all of its Property free and clear of all Security Interests, claims and encumbrances other than Permitted Encumbrances which are applicable to it and, to the best of its knowledge, information and belief, no Person is asserting or has given notice of its intention to assert any Security Interest other than Permitted Encumbrances relating to any such Property. As at the Effective Date, Schedule “N” sets out all real property (including, for certainty, owned and leased real property) in which the Loan Parties have any right, title or interest;

Intellectual Property: as of the Effective Date, Schedule “J” sets out all Intellectual Property used in or necessary for the conduct of the Business of the Loan Parties as currently conducted as well as the particulars of any registrations thereof with the Canadian Intellectual Property Office. The Borrower and each of the other Loan Parties possesses and is the sole legal and beneficial owner of or has licensed to it on normal commercial terms all the Intellectual Property necessary for the conduct of the Business of the Loan Parties, each of which is in good standing and in full force and effect. To the best knowledge of the Borrower, neither it nor any of the other Loan Parties is infringing or is alleged to be infringing on the rights of any Person with respect to any Intellectual Property (or any application or registration in respect thereof or any licence, discovery, improvement, process, formula, know-how, data, plan or specification). The Borrower and each of the other Loan Parties has taken all formal or procedural actions (including payment of fees) required to maintain any material Intellectual Property and licences owned by it;

Litigation: other than the litigation disclosed to the Administrative Agent and the Lenders in Schedule “P”, there are no actions, suits or proceedings pending or, to the best of the knowledge, information and belief of any Loan Party, threatened against any Loan Party at law or in equity by or before any court, tribunal, governmental department, commission, board, bureau, Administrative Agent or instrumentality, domestic or foreign, or before any arbitrator of any kind which would reasonably be expected to result in claims in excess of Cdn.$1,500,000 and no Loan Party is in default with respect to any judgment, order, writ, injunction, decree, award, rule or regulation of any court, tribunal, governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign or any arbitrator of any kind which, in the aggregate, would reasonably be expected to result in claims in excess of Cdn.$1,500,000;

Books and Records; Financial Condition: Each Loan Party maintains records and books of account in which true and complete entries are made in a manner sufficient to enable the preparation of financial statements in accordance with GAAP. All financial statements of the Loan Parties provided to the Administrative Agent by or on behalf of any Loan Party fairly reflect, as of the dates thereof, the financial condition of the Loan Parties in all material respects and the results of their operations for the periods covered thereby, have been prepared in accordance with GAAP (except that any unconsolidated financial statements of any Subsidiary may be prepared without notes) and, from the date of the latest of such financial statements submitted to the Administrative Agent, no event or circumstance has occurred which would reasonably be expected to have a Material Adverse Effect;

Taxes: all income tax and other returns required to be filed prior to the date hereof have been filed by or on behalf of each Loan Party to the relevant taxation or other authorities and no Loan Party is in default of payment of any taxes of any material amount, except for taxes the payment of which is subject to a Permitted Contest, and no reassessment, appeal or material claim is, to the best of the knowledge, information and belief of any Loan Party, being asserted or processed with respect to taxes which is not disclosed in the financial statements referred to in Section 2.1(k), in respect of periods to which such financial statements relate;

Insurance: each Loan Party has in full force and effect such policies of insurance in such amounts issued by insurers of recognized standing insuring its Property and providing such coverage as would be maintained by Persons engaged in the same or similar business in the localities where its Property is located or, if such insurance is not available on commercially reasonable terms, such other insurance to the satisfaction of the Lenders, acting reasonably;

Compliance with Applicable Laws: each Loan Party is in compliance with all Applicable Laws in all material respects. Without limiting the generality of the foregoing, the Borrower and each of the other Loan Parties is in compliance with all Cannabis Laws applicable to it and its Business, except where any failure to do so is capable of being remedied, and is being diligently remedied, within the time periods permitted by the applicable Governmental Authority and specifically, but without limitation, none of (i) the purchase from any Loan Party, or import from Canada, of Cannabis by a Person resident (or otherwise located) in a Qualified Jurisdiction, or (ii) the sale to a Person resident (or otherwise located) in a Qualified Jurisdiction, or export to such Qualified Jurisdiction, of Cannabis by any Loan Party, will violate or result in a breach of any applicable Cannabis Laws;

Environmental Laws: each Loan Party:

has obtained, made or given all Governmental Actions which are required under all applicable Environmental Laws except to the extent that failure to obtain, make or give the same would not reasonably be expected to have a Material Adverse Effect;

is in compliance with all Environmental Laws and all terms and conditions of all such Governmental Actions, except to the extent failure to comply would not reasonably be expected to have a Material Adverse Effect; and

has not received any notice of non-compliance with any Environmental Laws from any Governmental Authority or other Person or that any Release has occurred of, from, around, under or in respect of any of the Collateral which would reasonably be expected to have a Material Adverse Effect;

Indebtedness: no Loan Party has any Debt other than Permitted Indebtedness;

Financial Assistance: no Loan Party has provided any Financial Assistance to any Person or Persons other than Permitted Financial Assistance;

Material Agreements; Material Licenses: as of the Effective Date: (i) Schedule “K” contains a true and complete list of all Material Agreements, and (ii) Schedule “L” contains a true and complete list of all Material Licenses. Each Material Agreement and each Material License is in good standing and in full force and effect and none of the Loan Parties is in breach of any of the terms or conditions of any Material Agreement or Material License to which it is a party (or otherwise applicable to it). Except as disclosed in writing to the Administrative Agent and as permitted hereby, no Material Agreement or Material License has been amended, supplemented or revised since the date of execution thereof;

Organizational Chart; Subsidiaries and Affiliates: as of the Effective Date:

the Organizational Chart set forth in Schedule “M” is true and correct;

the Borrower has no Subsidiaries or Affiliates organized under the laws of any jurisdiction in Canada other than SGI Partnership (which shall be wound-up and dissolved pursuant to Section 6.14), Sundial Managing Partner Inc. (which shall be wound-up and dissolved pursuant to Section 6.14), Kamcan Products Inc., Sprout Technologies Inc. and 2011296 Alberta Inc., and the Borrower directly or indirectly owns all of the issued and outstanding Voting Shares of SGI Partnership, Sundial Managing Partner Inc., Kamcan Products Inc., Sprout Technologies Inc. and 2011296 Alberta Inc.; and

all of the issued and outstanding Equity Interests of the Loan Parties (other than the Borrower), SGI Partnership , Sundial Managing Partner Inc., the other Subsidiaries of the Borrower and Pathway RX Inc. are set forth in Schedule “O”, which also includes a description of the status of each such entity (e.g. as a Loan Party or a Non-Material Foreign Subsidiary, as applicable);

Loan Parties: as of the Effective Date, the only Loan Parties are: the Borrower, Kamcan Products Inc., Sprout Technologies Inc., 2011296 Alberta Inc.;

Chief Executive Office: as of the Effective Date, the chief executive office and registered office of the Borrower and each other Loan Party is located in Alberta;

Location of Business and Collateral: as of the Effective Date, no Loan Party (other than the Borrower) carries on business in any jurisdictions other than Alberta, British Columbia, Manitoba, New Brunswick, Nova Scotia, Ontario, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Island and Saskatchewan and the only jurisdictions in which the Borrower carries on business are Alberta, British Columbia, Manitoba, New Brunswick, Nova Scotia, Ontario, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Island and Saskatchewan. As of the Effective Date, all tangible Collateral of the Loan Parties, real or personal, is located in Alberta or British Columbia;

Leased Property: as of the Effective Date, the aggregate value of all inventory, equipment and other Property of the Loan Parties located on the premises of any real property leased by a Loan Party (other than the real property described in Section 9.1(gg)(iii)) does not exceed $2,000,000;

Fiscal Year End: as of the Effective Date, the Borrower’s Fiscal Year end is on December 31;

Permitted Subordinated Debt Documents: no default or event of default under any Permitted Subordinated Debt Documents, has occurred and is continuing;

Pension Plans; Labour Matters: neither the Borrower nor any of the other Loan Parties has any Pension Plans. There are no existing or, to the best knowledge of the Borrower, threatened strikes, lock-outs or other disputes relating to any collective bargaining agreement to which the Borrower or any other Loan Party is a party and no trade union, council of trade unions or employee bargaining agency has applied or, to the best knowledge of the Borrower, threatened to apply to be certified as the bargaining agent of any of the employees of the Borrower or any other Loan Party in the last three (3) years. The hours worked and payments made to employees of the Borrower and each other Loan Party have not been in violation of any Applicable Laws, in any material respect;

Events of Default: no Default or Event of Default has occurred and is continuing;

Solvency: the Borrower and each of the other Loan Parties is Solvent. No corporate action, legal proceeding or other procedure or step described in Section 10.1(h) or Section 10.1(i), or creditors’ process described in Section 10.1(h) or Section 10.1(i) has been taken or, to the knowledge of the Borrower, is threatened in relation to any Loan Party, and none of the circumstances described in Section 10.1(h) or Section 10.1(i) applies to any Loan Party;

Accuracy of Information: all Appraisals, budgets, economic models and other information (including financial information and cash flow or other projections), materials and documents delivered by or on behalf of the Borrower or any other Loan Party to the Administrative Agent in contemplation of the transactions contemplated by this Agreement or as required by the terms of this Agreement were:

in the case of all such Appraisals, budgets, economic models and other information, materials and documents (but excluding therefrom any projections), true, complete and accurate in all material respects as at their respective dates; and

in the case of any such projections, prepared in good faith based upon assumptions believed to be reasonable at the time made;

Sanctions: neither the Borrower nor any Affiliate of the Borrower (i)is a Person described or designated under the provisions of the Special Economic Measures Act (Canada) or the United Nations Act (Canada) or any associated regulations (each a “Canadian Sanctions Designated Person”), or (ii)engages in any dealings or transactions with any Canadian Sanctions Designated Person.

Deemed Representations and Warranties

Establishment of the Facilities

Availment Options: From and after the Effective Date and relying on each of the representations and warranties set out in Article 2 and subject to the terms and conditions of this Agreement:

each Syndicated ▇▇▇▇▇▇ agrees to make Syndicated Accommodations available to the Borrower, up to the amount of its Syndicated Facility Commitment, by way of a non-revolving term credit facility for the purposes set forth in Section 3.4(a), commencing on the Effective Date and ending on the Maturity Date (the “Syndicated Facility”); and

the Operating ▇▇▇▇▇▇ agrees to make Operating Accommodations available to the Borrower up to the aggregate amount of the Operating Facility Commitment, by way of a non-revolving credit facility for the purposes set forth in Section 3.4(b) and subject to Section 3.3, commencing on the Effective Date and ending on the Maturity Date (the “Operating Facility”).

Maximum Amount: Subject to the terms and conditions of this Agreement, at no time shall:

the aggregate Syndicated Borrowings exceed the Total Syndicated Facility Commitment; and

the Operating Borrowings exceed the amount of the Operating Facility Commitment.

Reduction of Syndicated Facility Commitments

Reduction of Operating Facility Commitments

Purpose

Syndicated Facility: Borrowings under the Syndicated Facility shall be used for general corporate purposes of the Loan Parties relating to the Loan Parties’ Business in Canada; and

Operating Facility: Borrowings under the Operating Facility shall be used solely for the purpose of issuing the Existing Letters of Credit and satisfying reimbursement obligations thereunder as contemplated in Section 3.8(f).

Borrowings - Syndicated Facility and Operating Facility

Syndicated Facility: Subject to the provisions of this Agreement, the Borrower may obtain Syndicated Accommodations from each Syndicated Lender pursuant to the Syndicated Facility up to the Syndicated Facility Commitment of such Syndicated Lender by:

Prime Loans: borrowing Prime Loans from the Syndicated Lenders in minimum aggregate amounts of Cdn. $1,000,000 and in integral multiples of Cdn. $100,000 thereafter, upon at least one (1) Business Day prior written notice; and

Bankers’ Acceptances: issuing Bankers’ Acceptances to be accepted by the Syndicated Lenders in minimum aggregate amounts of Cdn. $1,000,000 and in integral multiples of Cdn. $100,000 thereafter, upon at least two (2) Business Days prior written notice,

Operating Facility: Subject to the provisions of this Agreement, the Borrower may obtain Operating Accommodations from the Operating Lender pursuant to the Operating Facility; provided that Operating Borrowings thereunder shall not at any time exceed the Operating Facility Commitment Amount, by:

Prime Loans: borrowing Prime Loans from the Operating Lender solely for the purpose of satisfying reimbursement obligations under the Existing Letters of Credit as contemplated in Section 3.8(f); and

Letters of Credit: way of the issuance of Letters of Credit in Canadian Dollars on at least three Business Days prior written notice.

Conditions Applicable to Bankers’ Acceptances and BA Equivalent Advances

Acceptance of Bankers’ Acceptances: Subject to the terms and conditions of this Agreement, each Applicable Lender hereby agrees to accept its Applicable Percentage of Bankers’ Acceptances as requested by the Borrower pursuant to a Borrowing Notice, Conversion Notice or Rollover Notice delivered under Sections 3.5, 3.11 or 3.12, as the case may be. Each such Lender shall purchase such Bankers’ Acceptances at the applicable Discount Rate and shall deliver the Discount Proceeds thereof (less any BA Acceptance Fees payable to such Lender in respect thereof) for the account of the Borrower through the Administrative Agent’s Account For Payment. Notwithstanding the foregoing, no Applicable Lender shall be obligated to purchase a Bankers’ Acceptance which is not for a Standard Term, unless each Applicable Lender has consented thereto.

Payment to Borrower: On the Drawdown Date, Conversion Date or Rollover Date relating to any issue of Bankers’ Acceptances:

on any Drawdown Date, each Applicable Lender shall deliver the Discount Proceeds thereof (less any BA Acceptance Fees payable to such Lender in respect thereof), for the account of the Borrower through the Administrative Agent at the Administrative Agent’s Account for Payments;

on any Rollover Date relating to any Rollover of Bankers’ Acceptances, the Borrower shall be liable to the Applicable Lenders for the principal amount of maturing Bankers’ Acceptances. In order to satisfy the continuing liability of the Borrower to the Applicable Lenders for the principal amount of the maturing Bankers’ Acceptances, each Applicable Lender shall receive and retain for its own account the Discount Proceeds from the purchase by such Applicable Lender of such new Bankers’ Acceptances and the Borrower shall on the maturity date of the maturing Bankers’ Acceptances pay to the Administrative Agent, for the benefit of such Applicable Lender an amount equal to the difference between the principal amount of the maturing Bankers Acceptances and the Discount Proceeds from

on any Conversion Date relating to Bankers’ Acceptances:

in the case of a Conversion from a Prime Loan, in order to satisfy the continuing liability of the Borrower to the Applicable Lenders for the amount of the converted Borrowing, each Applicable Lender shall receive for its own account the Discount Proceeds from the purchase by such Applicable Lender of such Bankers’ Acceptances and the Borrower shall on the Conversion Date pay to the Administrative Agent for the benefit of such Applicable Lender the difference between the principal amount of the converted Borrowing and the Discount Proceeds from such Bankers’ Acceptances together with the BA Acceptance Fees to which such Applicable Lender is entitled pursuant to Section 5.2; and

in the case of a Conversion from a Bankers’ Acceptance, in order to satisfy the continuing liability of the Borrower to the Applicable Lenders for an amount equal to the principal amount of such Bankers’ Acceptance, the Administrative Agent shall record the obligation of the Borrower to each Applicable Lender as a Borrowing of the type into which the maturing Bankers’ Acceptance has been converted.

Waiver of Presentment and Other Conditions: The Borrower waives presentment for payment and, except to the extent of the negligence or wilful misconduct of a Lender referred to in Section 3.6(g), any other defence to payment of any amounts due to a Lender in respect of a Bankers’ Acceptance accepted and, if applicable, purchased by it pursuant to this Agreement which might exist solely by reason of such Bankers’ Acceptance being held, at the maturity thereof, by such Lender in its own right and the Borrower agrees not to claim any days of grace if such Lender as holder sues the Borrower on the Bankers’ Acceptance for payment of the amount payable by the Borrower thereunder. On the specified maturity date of a Bankers’ Acceptance, or such earlier date as may be required or permitted pursuant to the provisions of this Agreement, the Borrower shall, subject to Section 3.6(f), pay the Administrative Agent on behalf of the Syndicated Lender that has accepted such Bankers’ Acceptance, the full face amount of such Bankers’ Acceptance through payment to the Administrative Agent or conversion of such Bankers’ Acceptance into a Prime Loan pursuant to Section 3.11.

Terms of Each Bankers’ Acceptance: Each Bankers’ Acceptance shall:

have a maturity date which shall be on a Business Day;

have a Standard Term (excluding days of grace) or, subject to availability and with the consent of each Applicable Lender, have a term which is not a Standard Term but which does not exceed six (6) months (excluding days of grace);

be denominated in whole multiples of $100,000;

have a term which does not extend beyond the Maturity Date; and

be in the standard form of each Applicable Lender.

the instruments or drafts held by the Administrative Agent for the purposes of effecting Bankers’ Acceptances will include a notation to the effect that they are issued pursuant to the DBNA;

any reference to authentication of the Bankers’ Acceptance will be removed; and

any reference to “bearer” will be removed.

Power of Attorney - Bankers’ Acceptances: As a condition precedent to each BA Purchasing Lender’s obligation to accept and purchase Bankers’ Acceptances hereunder and, subject to the DBNA compliance requirements set forth in Section 3.6(d), the Borrower agrees to the Power of Attorney Terms - Bankers’ Acceptances set out in Schedule “F” and hereby grants to each BA Purchasing Lender a power of attorney on the terms set out in Schedule “F”, provided that if the Borrower revokes such power of attorney, a BA Purchasing Lender shall not be obliged to accept and purchase Bankers’ Acceptances (or obtain BA Equivalent Advances) unless the Borrower, the Administrative Agent and all of the BA Purchasing Lenders have agreed on amendments to this Agreement which the BA Purchasing Lenders may require to again accept and purchase Bankers’ Acceptances.

Failure to Give Notice of Repayment: If the Borrower fails to give notice to the Administrative Agent of the method of repayment of a Bankers’ Acceptance prior to the date of maturity of such Bankers’ Acceptance in accordance with the same period of notice required for the original acceptance of such Bankers’ Acceptance as set forth in Section 3.5, the face amount of such Bankers’ Acceptance shall be converted on its maturity to a Prime Loan from the Applicable Lender pursuant to Section 3.11.

Unlawful Issue or Use: The Borrower shall pay on demand to the Administrative Agent on behalf of each BA Purchasing Lender the face amount of any bankers’ acceptance form of the Borrower presented to such BA Purchasing Lender for payment and paid by such Lender that has been unlawfully issued or used or put into circulation fraudulently or without authority, and shall indemnify such BA Purchasing Lender against any loss, cost, damage, expense or claim regardless of by whomsoever made that such BA Purchasing Lender may suffer or incur by reason of any fraudulent, unauthorized or unlawful issue or use of any such bankers’ acceptance form, other than as is caused by the negligence or wilful act or omission of such BA Purchasing Lender or any of its officers, employees, agents or representatives failing to use the same standard of care in the custody of such bankers’ acceptance forms as it uses in the custody of its own property of a similar nature.

BA Equivalent Advances: Notwithstanding Section 3.5(a)(ii), the foregoing provisions of this Section 3.6, and any other provision hereof to the contrary, a Non-Acceptance Lender shall, in lieu of accepting Bankers’ Acceptances, make a BA Equivalent Advance. The amount of each BA

Administrative Agent’s Duties re: Bankers’ Acceptances

Advice to the Lenders: The Administrative Agent, promptly following receipt of a Borrowing Notice for an Accommodation by way of Bankers’ Acceptances, of a Conversion Notice for Conversion of a Borrowing to a Bankers’ Acceptance or of a Rollover Notice for a Rollover of a Bankers’ Acceptance, shall:

advise the Borrower of the allocation of Bankers’ Acceptances to each Applicable Lender such that the aggregate amount of Bankers’ Acceptances required to be accepted by such Applicable Lender hereunder is in a whole multiple of Cdn. $100,000; or

advise each BA Purchasing Lender of the face amount of each Bankers’ Acceptance to be purchased by it and the term thereof, which term shall be identical for all BA Purchasing Lenders. Promptly on each Drawdown Date, Conversion Date or Rollover Date on which BA Purchasing Lenders are required to purchase Bankers’ Acceptances hereunder, the

Bankers’ Acceptances Being Purchased: Promptly on the Drawdown Date, Rollover Date or Conversion Date relating to all Bankers’ Acceptances to be purchased by the BA Purchasing Lenders on such date, the Administrative Agent shall provide either written or telephone advice to the Borrower and each BA Purchasing Lender confirming the particulars with respect to such Bankers’ Acceptances. Such advice shall be confirmed in writing by the Administrative Agent on or prior to 2:30 p.m. (Calgary time) on such Drawdown Date, Rollover Date or Conversion Date. Upon receipt of any such notice, each BA Purchasing Lender is thereupon authorized to complete and sign Bankers’ Acceptances on behalf of the Borrower in accordance with the Power of Attorney Terms - Bankers’ Acceptances and the particulars advised by the Administrative Agent.

Letters of Credit

Cash Collateral: All Letters of Credit issued by the Operating Lender (including, for certainty, the Existing Letters of Credit) shall be cash collateralized in full and, prior to such issuance, the Borrower shall pay to the Administrative Agent for deposit into a Borrower Cash Collateral Account, for the account of the Operating Lender, an amount no less than the aggregate face amount thereof. If at any time the face amount of a Letter of Credit is reduced or a Letter of Credit is returned or cancelled, then such cash collateral shall be applied as a permanent repayment of the Syndicated Borrowings as provided in Section 4.1(c).

Issuance: The Borrower may give the Operating Lender a Borrowing Notice requesting that a Letter of Credit be issued by the Operating Lender in accordance with Section 3.5.

Documentation: The Operating Lender shall not have any obligation to issue a Letter of Credit until the Borrower has executed and delivered to the Operating Lender a duly completed letter of credit application in the Operating Lender’s standard form and such ancillary documents, including applications and indemnities, as the Operating Lender generally requires for like transactions and which are consistent with the provisions hereof.

Records re: Letters of Credit: The Operating Lender shall maintain records showing the undrawn and unexpired amount of each Letter of Credit issued by the Operating Lender and outstanding hereunder and showing for each Letter of Credit issued hereunder:

the dates of issuance and expiration thereof;

the amount thereof; and

the date and amount of all payments made thereunder.

Expiry: Each Letter of Credit shall expire not later than one year from the date of its issuance, subject to customary automatic renewal provisions, and in any event not later than the Maturity Date as at the date of such issuance, and shall be in a form satisfactory to the Operating Lender.

Payment: The Borrower shall forthwith pay to and reimburse the Operating Lender for all payments made by the Operating Lender to any Person pursuant to any Letter of Credit; provided that, unless the Borrower reimburses the Operating Lender for such payment on or before the date

Renewal: At or before 10:00 a.m. (Calgary time) at least 30 days prior to the date of expiry of any Letter of Credit, the Borrower may elect to renew such Letter of Credit by selecting a new expiry date for the Letter of Credit or part thereof being renewed, which shall commence on the expiry date of the Letter of Credit being renewed. Renewal of any such Letter of Credit may only be effected by the Operating Lender extending the expiry date of the existing Letter of Credit and shall be done by any of: (i)the inclusion of auto-renewal clauses in the Letter of Credit, (ii)the issuance of a new Letter of Credit containing the new expiry date or (iii)by an amendment to the existing Letter of Credit, and, in any case, with or without a reduction in the face amount thereof. Renewal of any Letter of Credit shall not be effected to the extent that such renewal would prevent or interfere with any required payment of principal hereunder. Any issuance to a new beneficiary, any increase in the face amount of the Letter of Credit or any other change in the terms thereof shall be considered to be a new Borrowing and may only be effected by the Borrower by delivering a Borrowing Notice to the Operating Lender. Letter of Credit Fees in respect of any renewed or extended Letter of Credit shall be payable pursuant to Section 5.3 and shall be computed for the period of renewal or extension.

Absolute Obligation: The obligations of the Borrower under this Agreement in respect of Letters of Credit shall be absolute, unconditional and irrevocable under any and all circumstances and irrespective of any set-off, counterclaim or defense to payment which any Person may have or have had against the Operating Lender or any beneficiary of a Letter of Credit.

No Defences: The obligations of the Borrower in respect of a Letter of Credit shall not be affected by:

any lack of validity or enforceability of such Letter of Credit;

any draft, demand, certificate or any other document presented under such Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect;

a Default or an Event of Default that has occurred and is continuing;

any dispute between or among the Borrower and any beneficiary of such Letter of Credit or any other party to which such Letter of Credit may be transferred;

any claims, compensation, set-off, defence or other right whatsoever of the Borrower against any beneficiary of such Letter of Credit or any such transferee;

payment under such Letter of Credit against presentation of a draft or other document that does not comply strictly with the terms of such Letter of Credit;

the existence of any Event of Default specified in Section 10.1(h) or (i) with respect to the Borrower; or

any other event or circumstance whatsoever that might, but for the provisions of this Section 3.8(i), constitute a legal or equitable discharge of the obligations of the Borrower hereunder or in respect of such Letter of Credit,

Uniform Customs: The Uniform Customs and Practice for Documentary Credits as most recently published by the International Chamber of Commerce (the “Uniform Customs”) shall in all respects apply to each Letter of Credit unless expressly provided to the contrary therein and shall be deemed for such purpose to be a part of this Agreement as if fully incorporated herein. In the event of any conflict or inconsistency between the Uniform Customs and the governing law of this Agreement, the Uniform Customs shall, to the extent permitted by Applicable Law, prevail to the extent necessary to remove the conflict or inconsistency.

Action Binding: Any action taken or omitted by the Operating Lender under or in connection with any Letter of Credit or the related drafts or documents, if done in the absence of gross negligence or wilful misconduct and in accordance with the standards of care specified in the Uniform Customs, shall be binding on the Borrower and shall not result in any liability of the Operating Lender to the Borrower.

General: Without limiting the generality of the foregoing:

the Operating Lender may accept documents that appear on their face to be in compliance with the terms of a Letter of Credit in all material respects without responsibility for further investigation, regardless of any notice or information to the contrary, and may make payment upon presentation of documents that appear on their face to be in compliance with the terms of such Letter of Credit in all material respects;

the Operating Lender shall have the right, in its discretion acting reasonably, to decline to accept such documents and to make such payment if such documents are not in strict compliance with the terms of such Letter of Credit;

Section 3.8 shall establish the standard of care to be exercised by the Operating Lender when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof (and the parties hereto hereby waive, to the extent permitted by Applicable Law, any standard of care inconsistent with the foregoing); and

in the event of any conflict or inconsistency between the provision of any application and/or indemnity provided by the Borrower in connection with any Letter of Credit and this Agreement, the provisions of this Agreement shall prevail.

Consequential Damages: Notwithstanding anything to the contrary contained herein the Operating Lender shall not be liable to the Borrower for any consequential, indirect, punitive or exemplary damages with respect to action taken or omitted to be taken by it under any Letter of Credit.

Indemnity: In addition to amounts payable as elsewhere provided for in this Section 3.8, the Borrower hereby agrees to protect, indemnify, pay and save the Operating Lender harmless from and against any and all claims or losses (including reasonable documented legal fees and expenses) which the Operating Lender may incur or be subject to as a consequence, direct or indirect, of:

the application for or issuance of or drawing under any Letter of Credit, other than as a result of the gross negligence or wilful misconduct of the Operating Lender as determined by a court of competent jurisdiction, provided that the Operating Lender acts in good faith; or

the failure of the Operating Lender to honour a drawing under any Letter of Credit as a result of any act or omission, whether rightful or wrongful, of any present or future Governmental Action prohibiting the payment of such drawing.

Misuse: As between the Borrower and the Operating Lender, the Borrower assumes all risks of the acts and omissions of, or misuse of any Letter of Credit by, the beneficiary of such Letter of Credit.

No Liability of Operating Lender: Except to ensure compliance with the applicable Letter of Credit, the Operating Lender shall not have any responsibility for:

the form, validity, accuracy, genuineness or legal effect of any document submitted by any party in connection with the application for, issuance of or drawing under any Letter of Credit (even if it should in fact prove to be in any or all respects invalid, inaccurate, fraudulent or forged);

the validity or sufficiency of any instrument transferring or assigning (or purporting to transfer or assign) any Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason;

errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph or otherwise (whether or not they are in cipher);

errors in interpretation of technical terms;

any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any Letter of Credit or of the proceeds thereof;

the misapplication by the beneficiary of any Letter of Credit or of the proceeds of any drawing under such Letter of Credit; and

any consequences arising from causes beyond the control of the Operating Lender, including any actions of a Governmental Authority.

No Liability: The Borrower shall have no obligation to indemnify the Operating Lender in respect of any liability incurred by the Operating Lender arising out of the gross negligence or wilful misconduct of the Operating Lender as determined by a court of competent jurisdiction.

Fortis LC: For certainty, the accounts of the Borrower subject to the assignment of monies on deposit (re: Fortis LC) dated September 11, 2019 granted by the Borrower in favour of the agent shall be deemed to be a Borrower Cash Collateral Account and, for certainty, the Borrower shall not have any withdrawal rights or privileges in respect of such account until repayment of the Borrowings in full, termination of the Total Commitment and termination of this Agreement, except to apply the amount represented thereby to the reimbursement of the Fortis LC in accordance with Section 3.8(f).

Notice of Repayment

Pro-Rata Treatment of Borrowings

Pro-Rata Borrowings: Subject to Section 3.10(b), each Borrowing under a Facility and each basis of Borrowing shall be made available by each Applicable Lender and all repayments and reductions in respect thereof shall be made and applied in a manner so that the Borrowings under such Facility and each basis of Borrowing outstanding to each Applicable Lender will, to the extent possible, thereafter be in the same proportion as the Applicable Percentage of such Lender under such Facility. The Administrative Agent is authorized by the Borrower and each Syndicated Lender to determine, in its sole and unfettered discretion, the amount of Syndicated Borrowings and each basis of Syndicated Borrowing to be made available by each Syndicated Lender and the application of repayments and reductions of Syndicated Borrowings to give effect to the provisions of this Section 3.10(a) and Section 7.2; provided that, subject to Section 3.10(b), no Syndicated Lender shall, as a result of any such determination, have Syndicated Borrowings outstanding in an amount which is in excess of the amount of its Syndicated Facility Commitment.

Administrative Agent’s Discretion on Allocation: If it is not practicable to allocate Bankers’ Acceptances to each Syndicated Lender such that the aggregate amount of Bankers’ Acceptances required to be purchased by such Syndicated Lender hereunder is in a whole multiple of Cdn. $100,000, the Administrative Agent is authorized by the Borrower and each Syndicated Lender: (i) to make such allocation as the Administrative Agent determines in its sole and unfettered discretion may be equitable in the circumstances, or (ii) in its sole and unfettered discretion, to convert a portion of a Bankers’ Acceptance accepted by such Syndicated Lender to a Prime Loan pursuant to Section 3.11. In no event shall the outstanding Syndicated Borrowings of a Syndicated Lender exceed its Applicable Percentage by more than Cdn. $100,000 as a result of such exercise of discretion by the Administrative Agent. In the event it is not practicable to allocate each basis of Syndicated Borrowing in accordance with Section 3.10(a) by reason of the occurrence

Further Assurances by Borrower: To the extent reasonably possible, the Borrower and each Lender agrees to be bound by and to do all things necessary or appropriate to give effect to the provisions of this Section 3.10.

Conversion Option

Bankers’ Acceptances: a Bankers’ Acceptance may only be converted on its maturity date and, if a Default or Event of Default has occurred and is continuing at such time, shall be converted into a Prime Loan; and

Prime Loans: a Prime Loan may not be converted if a Default or Event of Default has occurred and is continuing at such time.

Rollovers

Notices Irrevocable

Lender Swaps

Swaps: Subject to the terms and conditions hereof (and specifically Section 9.2(l)), each of the Lenders (or an Affiliate of such Lender) may from time to time enter into Swaps with any Loan Party during the term of this Agreement. Prior to engaging in any Lender Swaps, the applicable Loan Party shall enter into an ISDA Master Agreement with the applicable Swap Lender, or a confirmation that incorporates by reference the terms of an ISDA Master Agreement.

Secured Obligations: The parties agree that all Swap Indebtedness of a Loan Party to a Swap Lender shall be secured by the Security. All Permitted Swap Indebtedness shall, as to the Security, rank pari passu with the Syndicated Borrowings, the Operating Borrowings, the Cash Management Obligations and the Creditcard Obligations. All Swap Indebtedness of a Loan Party to any Swap Lender, other than Permitted Swap Indebtedness, shall, as to the Security, rank junior and be subordinate in every respect to the Syndicated Borrowings, the Operating Borrowings, the Permitted Swap Indebtedness, the Cash Management Obligations and the Creditcard Obligations.

Determination of Permitted Swaps: The Lender Swaps which constitute Permitted Swaps at any time shall be determined starting with the earliest Lender Swap entered into which is still outstanding on the date such determination is made, and so on chronologically with each subsequent Lender Swap, until the applicable limitations under Section 9.2(l) are exceeded, provided that a Lender Swap shall be deemed to be a Permitted Swap (and the indebtedness thereunder Permitted Swap Indebtedness) if it is entered into by a Swap Lender without actual notice or knowledge that such Lender Swap is not a Permitted Swap.

Mandatory Lenders Swaps and Prepayments. Notwithstanding any other provision contained herein, the parties hereto acknowledge and agree that each and every Lender Swap entered pursuant to Section 9.1(o) shall include an Additional Termination Event (as defined in the ISDA 2002 Master Agreement) to allow for the termination of such Lender Swap to the extent of any prepayments contemplated by Section 4.4 of this Agreement and, for the purposes of such Additional Termination Event, each of the parties to the Lender Swap shall be deemed to be an Affected Party (as defined in the ISDA 2002 Master Agreement) and for any Early Termination Amount (as defined in the ISDA 2002 Master Agreement) relating thereto shall be calculated as contemplated by Section 6(e)(ii)(3) of the ISDA 2002 Master Agreement.

Overdrafts

Cash Management Services and Creditcard Facilities

Mandatory Repayments of Syndicated Facility

Scheduled Repayments: Subject to the terms hereof, commencing on the last Business Day of the Fiscal Quarter ending September 30, 2020, and on the last Business Day of each Fiscal Quarter thereafter, until the Maturity Date (each a “Scheduled Repayment Date”), the Borrower shall repay Borrowings under the Syndicated Facility by way of equal payments in the amount set forth in the amortization schedule in Schedule “Q” (together with all outstanding interest payable on such date pursuant to Section 5.1), provided that the Administrative Agent, on behalf of the Lenders, may, at its discretion, adjust payments periodically, if necessary, to reflect any prepayments made hereunder, to the extent they apply to a payment on a Scheduled Repayment Date. Following any such adjustment, the Administrative Agent may provide the Borrower with an updated Schedule “Q” reflecting such adjustment, and such Schedule shall replace the then current Schedule “Q”, be incorporated herein by reference and be deemed to form part hereof.

Other Mandatory Repayments: In addition to the scheduled repayments set forth in Section 4.1(a), the Borrower shall, upon not less than three (3) Business Days’ prior written notice to the Administrative Agent, repay Borrowings under the Syndicated Facility from each of the sources set forth below:

100% of the net cash proceeds (in each case, net of reasonable, bona fide transaction fees, costs and expenses incurred in connection with the applicable Disposition) of any Disposition of any Collateral pursuant to paragraphs (f) and (g) of the definition of “Permitted Disposition”; and

100% of the net cash proceeds of any insurance policies for loss of or damage to any Collateral of a Loan Party to the extent such proceeds are not otherwise used to restore or replace such Collateral in accordance with Section 9.1(e)(ii); provided that the Borrower may reinvest such net cash proceeds in its Canadian Business so long as such proceeds are not in excess of the Threshold Amount and such reinvestment takes places within 90 days of the receipt of such net cash proceeds.

Application of Payments: Each repayment of Syndicated Borrowings under this Section 4.1 shall be made to the Administrative Agent for the account of the Syndicated Lenders and shall effect a permanent reduction of the Total Syndicated Facility Commitment in an amount equal to the amount of the applicable repayment. Any prepayments (whether voluntary or involuntary) in respect of the Syndicated Facility under this Agreement, other than payments pursuant to

Reduction of Commitment

Cash Collateralization

Cancellation of Commitment and Prepayment

Prepaid Borrowings: prepaid or otherwise reduced Borrowings outstanding to each Lender in an amount equal to the amount by which Borrowings outstanding to such Lender would otherwise be in excess of its Applicable Percentage of the Total Syndicated Facility Commitment or the Operating Facility Commitment, as applicable, immediately after the reduction of the Commitments provided for in such notice; and

Paid Interest: paid all accrued interest and other charges and fees in respect of the Borrowings being repaid or reduced as aforesaid.

Early Repayment of Letters of Credit and Bankers’ Acceptances

Evidence of Indebtedness

Interest on Prime Loans

Bankers’ Acceptance Fees

Letter of Credit Fees

Interest on Overdue Amounts

Administrative Agent’s Fees

Maximum Rate Permitted by Law

Interest Generally

Standby Fees

Interest and Fee Adjustment

Security

the Loan Party Guarantee;

collateral mortgages from the Borrower in the amount of $200,000,000 (the “Collateral Mortgage”) constituting a first ranking fixed and specific charge over real property owned by the Borrower, registered in Alberta, British Columbia and any other Canadian jurisdiction where the Borrower owns real property on the Effective Date and such other collateral mortgages or other real property security required to be delivered by the Loan Parties from time to time pursuant to Section 6.7 or Section 6.9;

the Loan Party Security Agreement;

to the extent any Loan Party is the registered owner of any material Intellectual Property, specific security agreements in respect of such material Intellectual Property as may be required by the Administrative Agent and the Lenders, in their sole discretion;

a cash collateral agreement granted by the Borrower in favour of the Administrative Agent in respect of the face amount of the Fortis LC;

a deed of hypothec granted by the Loan Parties for an amount of $170,000,000 in favour of the Administrative Agent, as hypothecary representative; and

such other agreements, documents or instruments reasonably required by the Administrative Agent and the Lenders (or their legal counsel) from time to time.

Form of Security

Guarantees and Subsidiary Security

an unlimited Guarantee (or a joinder or addition agreement to the Loan Party Guarantee) in favour of the Administrative Agent for the benefit of the Secured Parties, guaranteeing the Secured Obligations of each other Loan Party;

a general security agreement (or a joinder or addition agreement to the Loan Party Security Agreement) in favour of the Administrative Agent for the benefit of the Secured Parties granting a first priority Security Interest over all of such Material Subsidiary’s present and after-acquired personal property and a first floating charge over all other present and after-acquired property of such Material Subsidiary, registered in Alberta, British Columbia and all other Canadian jurisdictions in which each such Material Subsidiary carries on business or owns material Property;

to the extent such Material Subsidiary owns any fee simple or leasehold interest in any real property, at the request of the Administrative Agent, a collateral mortgage or mortgage of lease, as the case may be, constituting a first ranking fixed and specific charge over such real property, registered each jurisdiction in which such real property is located, and such other collateral mortgages or other real property security required to be delivered by the Loan Parties from time to time pursuant to Section 6.7 or Section 6.9 (and, for certainty, such collateral mortgages or other real property security shall be deemed to be part of the “Collateral Mortgage”); and

to the extent any Material Subsidiary is the registered owner of any material Intellectual Property, specific security agreements in respect of such material Intellectual Property as may be required by the Administrative Agent and the Lenders, in their sole discretion, each to be in form and substance satisfactory to the Administrative Agent,

Registrations and Renewals

Security Effective Notwithstanding Date of Advance

Extensions, Etc.

Notices

No Merger

Further Assurances - Security

if, at any time, the aggregate value of all inventory, equipment and other Property of the Loan Parties located on the premises of any real property leased by a Loan Party (other than the real property described in Section 9.1(gg)(iii)) exceeds $2,000,000, the Borrower shall (or shall cause the applicable Loan Party to) promptly execute and deliver a leasehold mortgage in favour of the Administrative Agent, for the benefit of each Secured Party, constituting a first ranking fixed and specific charge over all real property leased by such Loan Party, registered in Alberta and each other jurisdiction where such Loan Party leases real property;

if, at any time, a Loan Party acquires any real property contemplated in Section 6.7(c) above, such Loan Party shall, at the request of the Administrative Agent at the sole discretion of the Lenders, be required to promptly execute any mortgages, amendments, supplements or addendums to the Collateral Mortgage or other documents necessary to ensure that such newly acquired real property is subject to a Security Interest in favour of the Secured Parties (and, for certainty, such mortgages, amendments, supplements addendums or other documents shall be deemed to be part of the “Collateral Mortgage”);

notwithstanding paragraph (b) above or anything else contained herein, if at any time after the Effective Date a Loan Party or any other Subsidiary of the Borrower grants or executes, or intends to grant or execute, in favour of SAF, any additional security documents (the “New SAF Security”), such Loan Party or other Subsidiary shall promptly and concurrently with the provision of such New SAF Security to SAF, but in any event, within 15 Business Days, execute and deliver to the Administrative Agent such additional Security hereunder as required to give the Secured Parties the same, or better, rights, interests and advantages given to SAF under the applicable New SAF Security; and

without limiting the foregoing, the Borrower shall and shall cause each other Loan Party to, forthwith and from time to time on the reasonable request of the Administrative Agent, execute and do or cause to be executed and done all assurances and things which, in the opinion of the Administrative Agent, may be necessary or of advantage to give the Secured Parties the Security Interests and the priority intended hereunder to be created by the Security.

Release and Amendment of Security

Security for Swaps with Former Lenders

Permitted Encumbrances and Permitted Indebtedness

the fact that any Person is permitted to create or suffer to exist any Permitted Encumbrance or Permitted Indebtedness;

the fact that any representation, warranty or covenant herein may make an exception for the existence of Permitted Encumbrances or Permitted Indebtedness; or

the fact that the Security Interests created pursuant to the Loan Documents are stated to be subject to, or are not required to rank in priority to, Permitted Encumbrances;

Delivery of Investment Property

SGI Entities

10 Business Days after the closing of the Bridge Farm PSA, the Borrower shall cause SGI Partnership and Sundial Managing Partner Inc. to be wound-up and dissolved; and

90 days after the closing of the Bridge Farm PSA, the Borrower shall cause Sundial UK Limited to be wound-up and dissolved.

Time, Place and Currency of Payment

Application of Payments

Account Debit Authorization

Conditions Precedent to Amendment and Restatement

Due Diligence: the Administrative Agent and each of the Lenders shall have confirmed receipt of all financial statements, budgets and other information as the Administrative Agent or such Lenders may require, including, without limitation:

the Organizational Chart of the Loan Parties;

  (ii) 

detailed reports setting out the Borrower’s and its Subsidiaries’ consolidated opening cash position in respect of the consolidated operations of the Borrower to support the forecast referred to in paragraph (A) above, and reflecting any cash on deposit in Canadian accounts maintained by the Borrower or any of its Subsidiaries (whether or not such accounts are held by the Administrative Agent, the Lenders or another financial institution), including all Unrestricted Cash; and

a consolidated financial forecast for the 2020 Fiscal Year in respect of the Borrower reviewed by the Financial Advisor and approved by the Lenders, in their sole discretion and (A) including a forecast balance sheet, forecast cash flow statement, statement of income and statement of changes in financial position for the 2020 Fiscal Year, budget for the 2020 Fiscal Year detailing therein, inter alia, projected revenues, general and administrative costs, operating costs, cash flow projections, Taxes, budgeted capital expenditures and EBITDA, and (B) setting forth the calculation of each financial covenants set forth in Section 9.3 for the 2020 Fiscal Year (to the extent compliance is so required at such time), detailed on the basis of each Fiscal Quarter. For certainty, such financial forecast shall include a detailed description of all assumptions used in the preparation thereof;

No Event of Default: as of such time, no Default or Event of Default shall have occurred or will result from the transactions contemplated hereby and the Administrative Agent shall have received a certificate from each Loan Party certifying the same;

Representations and Warranties True: the representations and warranties contained in Article 2 shall be true and correct as of such time, and the Administrative Agent shall have received a certificate from each Loan Party certifying the same;

SAF Documentation: the Administrative Agent and the Lenders shall have received evidence, satisfactory to the Administrative Agent and the Lenders, in their sole discretion, that:

the SAF Deferred Payment has been capitalized to form part of the principal amount of the SAF Convertible Note and the SAF Fee has been waived;

the Bridge Farm PSA has closed (or will close) concurrently with this Agreement, and shall be on terms and conditions satisfactory to the Administrative Agent and the Lenders in their sole discretion; and

the SAF Credit Agreement has been amended and restated pursuant to the SAF Convertible Note which shall be on terms and conditions satisfactory to the Administrative Agent and the Lenders in their sole discretion,

HB Documentation: the Administrative Agent and the Lenders shall have received evidence, satisfactory to the Administrative Agent and the Lenders, in their sole discretion, that the Borrower has raised gross cash proceeds in the amount of not less than U.S. $15,000,000 pursuant to the HB Convertible Notes (which shall be on terms and conditions satisfactory to the Administrative Agent and the Lenders in their sole discretion), and the Administrative Agent shall have received an officer’s certificate executed by a senior officer of the Borrower (in form and substance satisfactory to the Administrative Agent in its sole discretion) certifying the same to the Administrative Agent and the Lenders and attaching thereto a true and complete copy of the HB Convertible Notes and any other HB Documents requested by the Lenders.

Unrestricted Cash Balance: the Administrative Agent shall be satisfied that Unrestricted Cash is not less than $2,500,000, as at the Effective Date;

Receipt of Documentation: the Administrative Agent shall have received, in form and substance satisfactory to the Lenders, the following (to the extent not previously provided):

a duly executed copy of this Agreement;

duly executed copies of the Security as required pursuant to Article 6;

a duly executed copy of

the SAF Intercreditor Agreement; and

the HB Intercreditor Agreement;

a confirmation of guarantee and security executed by the Loan Parties in respect of the Security executed and delivered prior to the Effective Date;

certified copies of:

each Material Agreement, together with all amendments thereto, in existence as of the Effective Date (which have not been previously delivered); and

all Material Licenses, together with all amendments thereto, in existence as of the Effective Date and all material correspondence received from any Governmental Authority, including any communication regarding any non-compliance items (which have not been previously delivered);

a duly executed Environmental Certificate;

[reserved];

evidence of the registration of the Security as required hereunder (or appropriate title insurance arrangements satisfactory to the Administrative Agent having been made), including, without limitation, in respect of the Collateral Mortgage at all applicable real property registries in Alberta and British Columbia;

a certificate of status or similar document in respect of each Loan Party issued under the laws of such Loan Party’s jurisdiction of formation, as applicable;

an officer’s certificate of each Loan Party attaching thereto its constating documents, its bylaws and other governing documents, its authorizing resolutions in respect of this Agreement and the other Loan Documents, an incumbency certificate and, other than in respect of the Borrower, a true and complete copy of its shareholder/unitholder register, as applicable;

an opinion of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, counsel to the Loan Parties, addressed to the Administrative Agent and each Lender and ▇▇▇▇▇▇▇’ legal counsel, relating to, inter alia, the existence of the Loan Parties and the authorization, execution, delivery and enforceability of the Loan Documents, all in form and substance satisfactory to the Administrative Agent, the Lenders and their legal counsel, and confirming that each Loan Party is qualified to carry on its Business in all applicable jurisdictions and that the Loan Parties’ operations and business will not contravene any Applicable Laws; and

such other documents and documentation which the Administrative Agent or any Lender may reasonably request;

Fees: the Borrower shall have paid (or made arrangements satisfactory to the Administrative Agent to effect the payment of):

an amendment and restatement fee of Cdn.$125,000 (for certainty, which shall be in addition to the Fee payable pursuant to Section 9.1(hh));

all other fees and expenses then due to the Administrative Agent and/or the Lenders in respect of this Agreement and the Facilities; and

all documented legal fees and expenses of ▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, the Financial Advisor and any other counsel and consultants employed by the Administrative Agent or any Lender;

Know-Your-Client Confirmations: no Lender shall have advised the Administrative Agent that such ▇▇▇▇▇▇ has not received from the Borrower all such information and evidence as such ▇▇▇▇▇▇ requested of the Borrower prior to the Effective Date as contemplated by Section 14.11; and

Material Adverse Effect: as of such time, no circumstance or event shall have occurred which would reasonably be expected to have a Material Adverse Effect, and no material adverse change shall have occurred in the operations or financial condition of the Loan Parties or of their Property, taken as a whole, since the date of the most recent audited financial statements provided to the Administrative Agent, and the Administrative Agent shall have received a certificate from each Loan Party as to both such effects.

Conditions Precedent to each Utilization

on each Drawdown Date, Conversion Date or Rollover Date, as applicable, there exists no Default or Event of Default; and

on each Drawdown Date, the representations and warranties referred to in Section 2.2, other than those stated to be made as at a specific date, are true and correct in all material respects with the same effect as if made as of such date.

Waiver of a Condition Precedent

Positive Covenants of the Borrower

Payment and Performance: the Borrower shall and shall cause each other Loan Party to duly and punctually pay all indebtedness and liabilities as and when due by it hereunder and perform all other obligations on its part to be performed under the terms of the Loan Documents at the times and places and in the manner provided for therein;

Maintain Corporate or Other Existence and Status: the Borrower shall and shall cause each other Loan Party to maintain its corporate, partnership or trust existence, as applicable, in good standing and duly register and qualify and remain duly registered and qualified to do business or own or lease Property in each jurisdiction in which the nature of its Business or the character of any Property owned or leased by it, requires such registration or qualification;

Maintenance of and Access to Books and Records: the Borrower shall and shall cause each other Loan Party to keep proper and adequate records and books of account in which true and complete entries will be made in a manner sufficient to enable the preparation of financial statements in accordance with GAAP, and shall permit and shall cause each other Loan Party to permit the Administrative Agent or its representatives (including, without limitation, the Financial Advisor) upon reasonable notice and from time to time during normal business hours to enter its premises and to inspect its books of accounts and operations thereof, and the Borrower shall and shall cause each other Loan Party to afford access to the Administrative Agent or its representatives (including, without limitation, the Financial Advisor) at any time and from time to time upon reasonable notice and during normal business hours to inspect the Loan Parties’ Property and operations and, in particular, to review documents, books, studies, reports and records relating to the Collateral and its Business in relation thereto;

Taxes: the Borrower shall and shall cause each other Loan Party to file all income tax returns which are required to be filed, pay or make provision for payment (in accordance with GAAP) of all Taxes which are due and payable, and provide adequate reserves (in accordance with GAAP) for the payment of any Tax the payment of which is subject to a Permitted Contest, and shall provide the Administrative Agent upon request with evidence of such payment, in form and substance satisfactory to the Administrative Agent, acting reasonably;

Insurance: the Borrower shall and shall cause each other Loan Party to:

maintain in full force and effect such policies of insurance issued by insurers of recognized standing, acceptable to the Administrative Agent and the Insurance Consultant, insuring such Property and operations and providing such coverages as would be maintained by Persons engaged in the same or similar business to the Business in the localities where such Property and operations are located, including, without limitation, all-risk property insurance, comprehensive general liability insurance, construction/builder’s all risk insurance, business interruption insurance and crop loss and export insurance, in each case, as advised by and to the extent deemed appropriate by the Administrative Agent and the Insurance Consultant, such insurance to be otherwise on such terms and conditions and with such deductibles as deemed acceptable by the Administrative Agent and the Insurance Consultant and provide, by its terms that no such insurance will be cancellable except upon 30 days’ prior written notice to the Administrative Agent and shall include a standard mortgage clause in favour of the Administrative Agent. The Borrower shall, if required, furnish the Administrative Agent with certificates or other evidence satisfactory to the Administrative Agent demonstrating compliance with the foregoing provisions and, in respect of insurance policies maintained by any of the Loan Parties, the Administrative

promptly upon receipt thereof, use 100% of the proceeds received pursuant to an insurance policy for loss of or damage to any of its Collateral to restore or replace such Collateral to the satisfaction of the Administrative Agent; unless such proceeds are reinvested in accordance with, and to the extent permitted by, Section 4.1(b)(ii);

Compliance With Laws and Regulations; Maintenance of Material Licenses; Material Agreements: the Borrower shall and shall cause each other Loan Party to:

comply with and manage and operate the applicable Loan Party’s Property in compliance with the requirements of all Applicable Laws, rules, regulations and orders of Governmental Authorities, including, without limitation, all Environmental Laws in all material respects and all Cannabis Laws in all respects;

observe and conform to all valid requirements, in all material respects, including Governmental Actions, of any Governmental Authority relative to any applicable Loan Party’s Property and all covenants, terms and conditions of all agreements upon or under which any of such Property is held;

keep, maintain in effect and comply with all Material Licenses and all other permits, approvals, licences and authorizations required in connection with its Business and ensure that all Cannabis-Related Activities occur solely in accordance with the terms of the Material Licenses;

perform and observe in all respects all terms and provisions of each Material Agreement to be performed or observed by it or such other Loan Party and maintain each Material Agreement in full force and effect;

maintain in all material respects the employment of any Person whose retention is required as a term of a Health Canada License or any other license issued under the Cannabis Act or the Cannabis Regulations including a senior person in charge, qualified person in charge, master grower, responsible person, head of security and quality assurance person or such alternate individual appointed within the timelines set forth under Cannabis Act or the Cannabis Regulations, as applicable; and

store, treat, transport or otherwise handle and dispose of all hazardous materials and waste owned, managed or controlled by the applicable Loan Party in compliance with all Environmental Laws, in all material respects;

Defence of Title: if the Security Interests granted in any Loan Document or the title to or the rights of the Administrative Agent in or to any Collateral (including, without limitation, any material Intellectual Property) or any part thereof shall be endangered or shall be attacked, directly or indirectly, or if any legal proceedings are instigated against any Loan Party with respect thereto, the Borrower shall promptly give written notice thereof to the Administrative Agent and the Borrower shall and shall cause each applicable Loan Party to:

conduct itself diligently to cure any such deficiency that is discovered or validly claimed;

take all necessary and proper steps for the defence of title to such Collateral and the security granted thereunder or under any Security; and

take such action, including employment of legal counsel, as is reasonably appropriate to the prosecution or defence of litigation with the view to the release or discharge of claim made against the title to any such Collateral;

Notice of Certain Events: the Borrower shall provide the Administrative Agent with prompt (and in any event no less than two (2) Business Days’) written notice of:

the occurrence of any Default or Event of Default;

the existence or commencement of any actions, suits, litigation or other proceedings of which the Borrower has knowledge which are commenced against or adversely which affect any Loan Party or any Loan Party’s Property and which (together with all other actions, suits, litigation or other proceedings), if adversely determined, would reasonably be expected to have a Material Adverse Effect or result in aggregate liabilities for the Loan Parties in excess of the Threshold Amount;

any claim that has been made by any Person against any Loan Party or any Collateral which, if determined adversely, would reasonably be expected to have a Material Adverse Effect;

any default under, or any other event entitling a counterparty to terminate or suspend any, Material Agreement received or delivered by any Loan Party;

the occurrence of any material Release or other material breach of Environmental Laws in respect of any Property of any Loan Party;

any: (A) amendment, modification, suspension or revocation in respect of any Material License, together with a certified copy of all documents relating thereto, and (B) audit by Health Canada (and the result thereof) or warning, document, letter or notice from Health Canada to any Loan Party or in respect of its Property or any other requirement of a Governmental Authority or Governmental Action reasonably be expected to have a negative or material impact on any Material License held by the Borrower or any other Loan Party, together with the Borrower’s or other Loan Party’s action plan with respect thereto;

any rejection notice in respect of any new or renewal security clearance application for any director or officer of any Loan Party or any other Person required to hold a security clearance pursuant to the Cannabis Act or the Cannabis Regulations;

any hold, quarantine or recall of Cannabis or Cannabis related products produced, distributed or sold by a Loan Party above the Threshold Amount;

the receipt of proceeds under any insurance claim by any Loan Party;

any change to the Organizational Chart of the Loan Parties set forth in Schedule “M” ;

any change in the Intellectual Property of the Loan Parties set forth in Schedule “J”;

any change in the Material Agreements of the Loan Parties set forth in Schedule “K”;

any change in the Material Licenses of the Loan Parties set forth in Schedule “L”;

any change in the owned or leased real property of the Loan Parties set forth in Schedule “N” (including, without limitation, any acquisition of real property contemplated Section 6.7(c));

without limiting the obligations of the Loan Parties in Section 6.13, any change to the issued and outstanding Equity Interests of the Loan Parties (other than the Borrower), SGI Partnership and Sundial Managing Partner Inc. set forth in Schedule “O”;

notice of any payment, repayment, prepayment or redemption (voluntary or involuntary) under any Permitted Subordinated Debt Documents; and

any other matter, circumstance or event that has had or would reasonably be expected to have a Material Adverse Effect, and

Operational Covenants: the Borrower shall and shall cause each applicable Loan Party to maintain all Property in good repair and working condition and in accordance with good industry practice and to carry on, conduct, manage and operate its Business in a proper and businesslike manner, in accordance with sound industry practice, solely within a Qualified Jurisdiction, in accordance with all Applicable Laws and shall ensure that:

all cultivation, production and processing of Cannabis and Cannabis-related products occur solely in facilities licensed by the applicable Governmental Authorities in Qualified Jurisdictions, in accordance with all Applicable Laws; and

all activities relating to the sale of Cannabis and Cannabis-related products occur solely in facilities licensed by Governmental Authorities in Qualified Jurisdictions or between entities licensed by Governmental Authorities in Qualified Jurisdictions;

Environmental Compliance Orders: the Borrower shall forthwith notify the Administrative Agent and shall cause each other Loan Party to make copies available for inspection and review on a confidential basis by representatives of the Administrative Agent upon receipt of all written orders, control orders, directions, action requests, claims and complaints from a Governmental Authority relating to non-compliance with any Environmental Law;

Environmental Audit: upon the occurrence or discovery of any circumstance, condition or event which, in the opinion of the Administrative Agent, acting reasonably, would reasonably be expected to result in any Environmental Liability to any Loan Party which would reasonably be expected to have a Material Adverse Effect or result in liability above the Threshold Amount and, in any event, after the occurrence of an Event of Default which is continuing, the Administrative Agent may, at the expense of the Borrower, arrange for an environmental audit to be conducted by an independent environmental engineer or other environmental consultant (such engineer or

Environmental Indemnity:

the Borrower shall and shall cause each other Loan Party to forthwith on demand fully indemnify, defend and save each Secured Party and each of their respective directors, officers, employees and agents, and any of them (in this Section 9.1(l) any one or more or all of such Persons is referred to as the “Indemnified Party”), harmless from and against any and all liabilities, losses, claims, damages and expenses (including all reasonable fees of counsel on a solicitor and his own client basis and accountant fees and reasonable expenses, court costs and all other reasonable out-of-pocket expenses) sustained, paid, incurred or suffered by the Indemnified Party arising in any manner whatsoever out of or as a result of any environmental claims, liabilities or obligations of any and every nature whatsoever relating to or affecting any Loan Party or the Collateral, or the property of others where any Loan Party would be reasonably likely to have any liability in respect thereof under Applicable Law (all or any item or part of the foregoing liabilities, losses, claims, damages and expenses are referred to in this Section 9.1(l) as “Loss”). Notwithstanding the generality of the foregoing, the Loan Parties shall not be obliged to indemnify the Indemnified Party to the extent any Loss has been incurred by reason of the gross negligence or wilful misconduct of such Indemnified Party. The Borrower acknowledges on behalf of itself and each Loan Party that each Lender is entering into the provisions of this Section 9.1(l) on its own behalf and as agent and trustee for its directors, officers, employees and agents;

if any claim (in this Section 9.1(l) referred to as a “Claim”) shall be asserted by any Person against the Indemnified Party which may give rise to a Loss, the Indemnified Party shall promptly notify the Borrower of all particulars of such Claim upon learning of same. The failure to give any such notice, however, shall not affect any Loan Party’s liability to indemnify the Indemnified Party unless such failure adversely and materially affects its ability to defend, object to, oppose or contest that Claim;

  (iii)

Use of Facilities: the Borrower shall, and shall cause each other Loan Party to, ensure that the proceeds of each of the Facilities are used by Loan Parties only and exclusively for the purposes described in Section 3.4, as applicable;

Bank Accounts: the Borrower shall, and shall cause each other Loan Party to, maintain all of its cash receipts and term deposits and to deposit all of its cheques and other payments (including all proceeds of Collateral, insurance and reinsurance) into an account with the Administrative Agent or a Lender and shall maintain all bank accounts or investments accounts with the Administrative Agent or a Lender;

Mandatory Lender Swaps: subject to Sections 3.14(d) and 4.4, the Borrower shall maintain or replace, as the case may be, Interest Swaps in each case, with a minimum term up to and including the Maturity Date and a maximum term of two years and which is in a net notional amount which, taken together with the notional amounts of all other Interest Swaps then in effect entered into by the Loan Parties, is equal to no less than 25% of the aggregate amount of all Syndicated Borrowings;

Material Subsidiary Guarantees and Security: unless otherwise agreed to by the Administrative Agent in writing, the Borrower shall ensure that each Material Subsidiary is at all times a party to the Loan Party Guarantee (or that has granted a similar unlimited Guarantee in respect of the Secured Obligations of the other Loan Parties in form and substance satisfactory to the Administrative Agent), and shall ensure that each Material Subsidiary has provided the other Security required by Article 6;

Additional Information: the Borrower shall, and shall cause each other Loan Party to, promptly furnish to the Administrative Agent any additional information regarding the Loan Parties’ Business and the affairs, operations and financial condition of each Loan Party as the Administrative Agent shall reasonably request or which the Borrower deems material to the Lenders’ continuing due diligence and shall, at all times, ensure the accuracy of all such information in all material respects;

Subsidiary Ownership: the Borrower shall ensure that, at all times, the Borrower beneficially owns either directly or indirectly through one or more Material Subsidiaries, all of the issued and outstanding Voting Shares in the capital stock of each Material Subsidiary;

Further Assurances: the Borrower shall do and shall cause each other Loan Party to do all such further acts and things and execute and deliver all such further documents as shall be reasonably required by the Administrative Agent in order to ensure the terms and provisions of the Loan Documents are fully performed and carried out;

[Reserved.];

Equity Raise: on or before December 1, 2020, the Borrower shall have raised gross cash proceeds in the amount of not less than U.S. $10,000,000 pursuant to issuance of new equity or equity-linked securities by the Borrower, and the Lenders, and the Administrative Agent shall have received satisfactory evidence of the same;

Financial Advisor: the Borrower: (i) shall pay all fees and expenses arising under the Financial Advisor Engagement Letter within 3 Business Days of any request therefor by the Financial Advisor, (ii) shall fully cooperate, and shall cause each other Loan Party to fully cooperate, with the Financial Advisor and promptly (having regard to the nature and scope of the information and data requested) provide all information and data requested by the Financial Advisor, including all information and data in respect of the conduct of the business or financial condition of the Loan Parties, (iii) confirms and agrees that the Financial Advisor shall be engaged until such time period where the Borrower has two consecutive Fiscal Quarters with positive EBITDA or as otherwise deemed necessary by the Administrative Agent, in its sole discretion and (iv) acknowledges that the Financial Advisor shall monitor the Loan Parties’ operations, business and affairs and review the information provided in paragraph (ii) above;

Annual Financial Statements, etc.: the Borrower shall furnish the following to the Administrative Agent as soon as available and in any event within 90 days after the end of each Fiscal Year:

Audited Financial Statements/MD&A: a consolidated balance sheet as at the close of such Fiscal Year and consolidated statements of income and changes in financial position for such Fiscal Year, setting forth in comparative form the corresponding figures of the preceding Fiscal Year, in respect of the Borrower on a fully-consolidated basis, together with an auditor’s report prepared by a qualified firm of accountants confirming that its examinations of such financial statements were made in accordance with generally accepted auditing standards and, accordingly, included such tests and other procedures as it considered necessary in the circumstances and that such financial statements present fairly in all material respects the financial position of the Borrower on a consolidated basis, as of the close of such Fiscal Year and the results of its operations and the changes in its financial position for the Fiscal Year then ended, in accordance with GAAP (except as otherwise noted therein and consented to by the Majority Lenders, such consent not to be unreasonably withheld), which shall be accompanied by a management discussion and analysis report for such Fiscal Year; and

Financial Forecasts: consolidated financial forecasts for the next Fiscal Year in respect of the Borrower, reviewed by the Financial Advisor and approved by the Lenders, in their sole discretion and (A) including a forecast balance sheet, forecast cash flow statement, statement of income and statement of changes in financial position for the following Fiscal Year, budget for the next Fiscal Year detailing therein, inter alia, projected revenues, general and administrative costs, operating costs, cash flow projections, Taxes, budgeted capital expenditures and EBITDA, and (B) setting forth the calculation of each financial

Quarterly Financial Statements/MD&A: the Borrower shall furnish to the Administrative Agent its quarterly unaudited balance sheets, unaudited cash flow statements and unaudited statements of income and changes in financial position as soon as available and in any event within 45 days after the end of each of its first three (3) Fiscal Quarters, each as at the end of such Fiscal Quarter and prepared in accordance with GAAP on a consolidated basis consistently applied which shall (i) be reviewed by the Financial Advisor, (ii) include a comparison to the Approved Financial Model and (iii) be accompanied by a management discussion and analysis report for such Fiscal Quarter;

2021 Financial Forecast: without duplication to Section 9.1(w)(ii), on or before November 30, 2020, the Borrower shall have delivered to the Administrative Agent a consolidated financial forecast for the 2021 Fiscal Year in respect of the Borrower, reviewed by the Financial Advisor and approved by the Lenders, in their sole discretion and (A) including a forecast balance sheet, forecast cash flow statement, statement of income and statement of changes in financial position for the 2021 Fiscal Year, budget for the 2021 Fiscal Year detailing therein, inter alia, projected revenues, general and administrative costs, operating costs, cash flow projections, Taxes, budgeted capital expenditures and EBITDA, and (B) setting forth the calculation of each financial covenants set forth in Section 9.3 for the 2021 Fiscal Year (to the extent compliance is so required at such time), detailed on the basis of each Fiscal Quarter. For certainty, such financial forecast shall include a detailed description of all assumptions used in the preparation thereof;

Monthly Reporting: the Borrower shall furnish to the Administrative Agent (in form and substance satisfactory to the Administrative Agent) as soon as available and in any event within, 10 days after the end of each calendar month, each as at the end of such calendar month:

a detailed report of the cash balance of all accounts of the Loan Parties (whether held with the Administrative Agent, the Lenders or any other financial institution) evidencing compliance with Section 9.3(a); and

at any time Unrestricted Cash is less than Cdn.$5,000,000, upon request of the Administrative Agent and the Lenders, a CCAA cash flow report, reviewed by the Financial Advisor;

Weekly Reporting: the Borrower shall furnish the following to the Administrative Agent by 12:00pm (noon) (Calgary time) on each Wednesday of each calendar week:

without duplication to Section 8.1(a)(ii), a complete 13-week cash flow statement (for the 13-week period ending on the immediately preceding Sunday) and forecast (for the 13-week period commencing on the immediately preceding Monday) in respect of the Borrower’s consolidated operations (each, an “Updated Cash Flow Report”) which shall include a detailed comparison of the variances between actual cash flows and projected cash flows from the Original Cash Flow Report, initially, and, thereafter, from the projections in the most recent Updated Cash Flow Report, in each case, together with detailed particulars explaining any variances;

detailed reports setting out the Borrower’s and its Subsidiaries’ consolidated opening cash position in respect of the consolidated operations of the Borrower to support the forecasts

a detailed report with respect to such matters as the Lenders may request (in their sole discretion) and including, without limitation, (A) an update to the Lenders in respect of the progress and status of any conversion of HB Convertible Notes and the issuance of the new equity offering contemplated in Sections 9.1(t) and 9.1(u) and (B) certified true and complete copies of any new Material Agreements and/or Material Licenses entered into, granted or issued after the Effective Date; and

updates to the Administrative Agent and the Lenders with respect to the sale process being undertaken by the Sale Advisor on behalf of the Loan Parties, including updates in a timely manner with respect to prospective bids identified by the Borrower or the Sale Advisor, material developments with respect to such prospective bids and a summary of material terms of the bids received,

Compliance Certificate: the Borrower shall furnish to the Administrative Agent a duly executed and completed Compliance Certificate, concurrently with the provision of:

each of the financial statements pursuant to Section 9.1(w)(i) and 9.1(x), and effective as of the last day of the Fiscal Year or Fiscal Quarter, as applicable; and

each of the monthly cash reports pursuant to Section 9.1(z), and effective as of the last day of the applicable calendar month;

Insurance: the Borrower shall furnish certificate(s) of insurance showing the Administrative Agent, on behalf of the Secured Parties, as loss payee and additional insured and evidencing compliance with Section 9.1(e) on an annual basis, and in any event within 90 days after the end of each Fiscal Year;

Property Taxes: on an annual basis, no later than August 30 for the Fiscal Year ending December 31, 2020 and June 30 in each year thereafter, the Borrower shall provide to the Administrative Agent evidence satisfactory that Taxes relating to the real property of the Loan Parties then due and payable by the Loan Parties have been irrevocably paid in full; provided that if the Borrower fails to provide such evidence the Administrative Agent may obtain tax certificates in respect of the Loan Parties at the expense of the Borrower;

Permitted Subordinated Debt Documents: without limiting Section 9.2(k), the Borrower will promptly furnish to the Administrative Agent copies of: (i) all amendments to any Permitted Subordinated Debt Documents, (ii) all material notices given or received, and all material statements, reports or other documents delivered, by the Borrower pursuant to or in connection with the Permitted Subordinated Debt Documents to the extent not already delivered pursuant to this Agreement;

Provision of Other Information: without limiting the foregoing, the Borrower shall provide to the Administrative Agent:

copies of all financial statements, reports or other documents delivered to (A) SAF or any pursuant to or in connection with the SAF Convertible Note concurrently with the delivery thereof to SAF and (B) any ▇▇ ▇▇▇▇▇▇ pursuant to or in connection with the HB Convertible Notes concurrently with the delivery thereof to such ▇▇ ▇▇▇▇▇▇;

copies of all material correspondence and notices received by any Loan Party from any Governmental Authority with respect to any Material License, or relating to any regulatory or other investigations into any Loan Party’s Cannabis-Related Activities;

copies of all final prospectuses or other similar offering documents such as private placement memorandums, registration statements, material change reports and annual information forms filed by it with any securities regulatory authorities together with such other information relating to the business, affairs, operations and financial condition of any Loan Party as the Administrative Agent may reasonably request provided that, if applicable, the Borrower may satisfy the foregoing by posting such information on ▇▇▇.▇▇▇▇▇.▇▇▇ or on another website as notified to and agreed to by the Administrative Agent provided that the Administrative Agent is aware of the address of and any relevant password specifications for such website. The Borrower shall forthwith advise the Administrative Agent promptly upon becoming aware that such website cannot be accessed or if the password specifications change or any existing information posted onto such website is amended. If the Administrative Agent cannot access such information on the relevant website, the information will instead be provided to the Administrative Agent in paper form; and

such other information in respect of the conduct of business or financial condition of the Loan Parties, including an updated Appraisal (or update in respect thereof) relating to the Loan Parties’ Property relating to the Loan Parties’ Business as reasonably requested by a Lender to the Administrative Agent from time to time;

Post-Closing Covenants: the Administrative Agent shall have received, in form and substance satisfactory to the Lenders, within 30 days following the Effective Date, :

all certificates evidencing the Equity Interests (or other interests and classes of investment property) of the Loan Parties in Pathway RX Inc., together with a duly executed stock transfer power attorney in respect of thereof and evidence that all corporate action has been taken by Pathway RX Inc. to authorize the foregoing pledge;

certificates of title in respect of the real property that is subject to the Collateral Mortgage evidencing the discharge of the Existing Liens and compliance with Section 9.2(g). For certainty, any Existing Liens in place after the aforementioned 30 day period shall cease to be “Permitted Encumbrances” pursuant to paragraph (q) of the definition thereof;

a leasehold mortgage in favour of the Administrative Agent, for the benefit of each Secured Party, constituting a first ranking fixed and specific charge over the Didsbury Property); and

certificate(s) of insurance showing the Administrative Agent, on behalf of the Secured Parties, as loss payee and additional insured and evidencing compliance with Section 9.1(e) (and, for certainty, such certificate(s) of insurance shall be reviewed and approved by the Insurance Consultant); and

Fee Payment: On or before September 30, 2020, the Borrower will pay or cause to be paid to the Administrative Agent, for the account of the Lenders, a one-time fee in the amount of $225,000 which shall be deemed to be fully earned on the date hereof and which shall be due and payable on September 30, 2020 (the “Fee”). The Fee shall be non-refundable and is in addition to, and is not creditable against, any other fees payable by a Loan Party to the Administrative Agent and/or the Lenders in connection with this Agreement.

Negative Covenants of the Borrower

Conduct of Business:

engage in any business or make any material investments or enter into any material ventures other than the Business and other activities directly related to the foregoing, nor make or enter into any acquisitions, investments, joint ventures or partnerships which are not in the ordinary course of, and made for the purpose of, conducting the Business of the Loan Parties as described aforesaid; and

own assets or carry on, or permit any of its Subsidiaries to own assets or carry on, the Business in any jurisdiction other than in a Qualified Jurisdiction;

Incur Debt: issue, create, incur, assume, permit or suffer to exist or directly or indirectly be or become in any way liable for or in respect of any Debt, other than Permitted Indebtedness;

Financial Assistance: provide any form of Financial Assistance to any Person other than Permitted Financial Assistance;

Distributions: make, give effect to or implement any steps or procedures to make any Distributions, or otherwise reduce the Borrower’s equity, other than pursuant to a Permitted Distribution or as specifically permitted pursuant to Section 9.2(k);

Prohibited Disposition: Dispose of any or all of its right, title, estate and interest in or to all or any part of its Property, other than Permitted Dispositions;

Acquisitions: make any Acquisition;

Negative Pledge: create, incur, assume, permit or suffer to exist any Security Interest upon or with respect to any of its Property other than Permitted Encumbrances;

Transactions with Affiliates: enter into directly or indirectly any transaction or group of related transactions (including the purchase, lease, sale or exchange of Property of any kind or the rendering of any service) with any Affiliate (other than another Loan Party), except in the ordinary course and pursuant to the reasonable requirements of the Business and upon fair and reasonable terms no less favourable to it than would be obtainable in a comparable arm’s-length transaction with a Person not an Affiliate;

Change of Fiscal Year: change the fiscal year end of the Borrower from December 31 or the basis on which the financial records of a Loan Party are now maintained, subject to Section 1.5 unless 30 Business Days prior written notice has been provided to the Administrative Agent;

Corporate Reorganizations: enter into or become party to any transaction (each a “Corporate Transaction”) of merger, amalgamation, consolidation, winding-up, plan of arrangement, reorganization or reconstruction with any Person or enter into any transaction by way of transfer, liquidation, sale, lease, disposition or otherwise whereby all or substantially all of its Property would become the Property of any other Person, or take any corporate, partnership or trust action in pursuance of any of the foregoing; provided that any Loan Party may do so if such Corporate Transaction is conducted solely with another Loan Party or between Loan Parties;

Permitted Subordinated Debt: notwithstanding the terms of any Permitted Subordinated Debt Document:

other than in respect of the SAF Documents and the HB Documents, make, give effect to or implement any steps or procedures to make any cash payment, repayment, prepayment or redemption (voluntary or involuntary) of any Permitted Subordinated Debt, including any principal, interest, fees or other amounts owing in respect of any Permitted Subordinated Debt;

with respect to the SAF Documents, make, give effect to or implement any steps or procedures to make any cash payment, repayment, prepayment or redemption (voluntary or involuntary) under any of the SAF Documents, except as permitted by the SAF Intercreditor Agreement;

with respect to the HB Documents, make, give effect to or implement any steps or procedures to make any cash payment, repayment, prepayment or redemption (voluntary or involuntary) under any of the HB Documents, except as permitted by the HB Intercreditor Agreement; provided that no Default or Event of Default has occurred and is continuing or would result from any such payment, repayment, prepayment or redemption (voluntary or involuntary) and further provided that all such payments do not exceed an aggregate amount of U.S. $15,000,000; or

amend, restate, supplement or otherwise modify any Permitted Subordinated Debt Document, other than:

in respect of the HB Documents, as described in Section 4(e) of the HB Intercreditor Agreement; and

in respect of the SAF Documents, other than as prohibited by the SAF Intercreditor Agreement;

Swaps: enter into any Swap with a Person other than a Swap Lender nor enter into any Swap outside the ordinary course of its business or for speculative purposes (determined, where relevant, by reference to GAAP); provided that:

without limiting the generality of the foregoing, the following shall be considered to be Swaps entered into outside of the ordinary course of business or entered into for speculative purposes:

any Interest Swap if the notional amount of indebtedness under such Interest Swap together with the notional amount of all other Interest Swaps then in effect in respect of the Loan Parties exceeds the underlying exposure to the risk hedged or sought to be hedged by such Interest Swap at the time such Interest Swap is entered into;

any Currency Swap or Commodity Swap;

any Interest Swap (other than, for greater certainty, the Interest Swaps referenced in Section 9.1(o)) or Currency Swap having a term from its inception to maturity exceeding two (2) years; and

any Swap in respect of which a Security Interest is granted, except for the Security Interests granted under the Security in favour of the Administrative Agent, on behalf of the Secured Parties; and

any and all Interest Swaps contemplated by Section 9.1(o) shall be deemed not to be entered into outside the ordinary course of business or for speculative purposes;

Partnerships: (i) add any Person as a partner to a Material Subsidiary which is a partnership if such Person is not a Loan Party, (ii) transfer any Voting Shares, units or other Equity Interests in any Material Subsidiary which is a partnership if the transferee is not a Loan Party, or (iii) make any changes, amendments or supplements to the partnership agreement relating to such partnership which would reasonably be expected to adversely affect the Lenders in a material manner;

Insurance Proceeds: make any application or use of any insurance proceeds received by it in respect of any single claim or event except in accordance with Sections 4.1(b)(ii) and 9.1(e)(ii), as the case may be;

Material Agreements: (i) amend, vary or alter any Material Agreement unless, in each case, the same is solely administrative or, in the opinion of the Administrative Agent, such amendment, variation or alteration would not have, or would not reasonably be expected to have, a Material Adverse Effect, (ii) terminate, surrender or consent to any assignment or transfer of its rights or entitlements under any Material Agreement, or (iii) enter into any new Material Agreement;

Pension Plan: enter into or permit any other Loan Party to enter into any Pension Plan or collective bargaining agreement;

Cannabis Operations: undertake or offer to undertake, or cause or permit any other Loan Party to undertake or offer to undertake, any Cannabis Related Activities, which could directly or indirectly result in the Borrower or such other Loan Party becoming subject to the laws of any jurisdiction other than a Qualified Jurisdiction; and

Budgeted Capital Expenditures: amend or vary any Budgeted Capital Expenditures or make any other capital expenditures, other than Budgeted Capital Expenditures, without the prior written approval of the Administrative Agent and the Lenders in their sole discretion (after a review of such proposed amendments or capital expenditures by the Financial Advisor). Without limiting the generality of the foregoing, aggregated Budgeted Capital Expenditures shall not exceed Cdn.$7,000,000 for the period beginning on the date hereof and ending on December 31, 2020.

Financial Covenants

Unrestricted Cash Balance: permit the Unrestricted Cash balance, at any time, to be less than Cdn. $2,500,000.

Fixed Charge Coverage Ratio; Senior Funded Debt to EBITDA Ratio: as at the Covenant Monitoring Date and as at the end of any Fiscal Quarter thereafter, permit:

the Fixed Charge Coverage Ratio to be less than 1.50 to 1.00; or

the Senior Funded Debt to EBITDA Ratio to be greater than 2.75 to 1.00.

Non-Material Foreign Subsidiaries

Positive Covenants: The Borrower covenants and agrees with each of the Lenders and the Administrative Agent that, unless the Administrative Agent on behalf of the Majority Lenders (subject to Section 12.19) otherwise consents in writing, it shall, and it shall cause each Loan Party to, cause the prompt Distribution of cash held by the Non-Material Foreign Subsidiaries from time to time to a Loan Party; and

Negative Covenants: During the term of this Agreement, the Borrower covenants and agrees with each of the Lenders and the Administrative Agent that it shall not, and shall ensure that each other Loan Party shall not, without the prior written consent of the Administrative Agent on behalf of the Majority Lenders (subject to Section 12.19):

create, incorporate, organize or otherwise form any Non-Material Foreign Subsidiary (other than the Non-Material Foreign Subsidiaries in existence on the date hereof which are specifically named in the definition of “Non-Material Foreign Subsidiaries”);

provide Financial Assistance to a Non-Material Foreign Subsidiary; or

subject to Section 9.4(a), permit any Non-Material Foreign Subsidiary to hold or own any Property.

Events of Default

Failure to Pay Principal: the failure of the Borrower to make any payment of any Borrowings when due hereunder;

Failure to Pay Interest or Fees: the failure of any Loan Party to make any payment of any interest, fees or any other amount (other than the Borrowings) due under any Loan Document when due

Breach of Certain Covenants: if there is a breach or failure of due performance or observance by any Loan Party of any covenant or provision set forth in Section 6.14, 9.1(h), 9.1(j), 9.1(m), 9.1(n), 9.1(o), 9.1(p), 9.1(r), 9.1(u), 9.1(w), 9.1(x), 9.1(y), 9.1(z), 9.1(aa), 9.1(bb), 9.1(gg), 9.1(hh), 9.2, 9.3 or 9.4;

Breach of Other Covenants: if there is a breach or failure of due performance or observance by any Loan Party of any covenant or provision of this Agreement or any of the Loan Documents (other than those otherwise dealt with in this Section 10.1), unless such breach or failure is cured (to the extent such breach or failure is capable of being cured), to the satisfaction of the Majority Lenders, acting reasonably, within 20 Business Days after written notice thereof by the Administrative Agent to the Borrower;

Misrepresentations: if any representation or warranty made or deemed to be made by the Borrower or any other Loan Party in any Loan Document, certificate or document shall prove to have been incorrect in any material respect when made or deemed to be made or repeated hereunder or thereunder; provided that if the matter, defect or deficiency which is the subject matter of the misrepresentation is capable of correction or remedy (and not merely by changing the representation made), then if it is not corrected or remedied to the satisfaction of the Majority Lenders, acting reasonably, within 20 Business Days after written notice thereof by the Administrative Agent to the Borrower;

Cross Default: if:

a “Default” (as such term or equivalents are defined under the SAF Convertible Note and/or the HB Convertible Notes, as applicable) occurs and such “Default” is not waived or cured within any applicable cure or grace period or if an “Event of Default” (as such term and/or equivalents are defined under the SAF Convertible Note or the HB Convertible Notes, as applicable) occurs; or

any Loan Party or the Person primarily liable or jointly and/or severally liable, in the case of any contingent or joint and/or several obligation of any Loan Party (A) fails to pay when due (whether at stated maturity or by required prepayment, acceleration, demand or otherwise) any Debt between itself and any Person (other than any Debt under this Agreement) or (B) is in breach or default under any term or provision of any other document, instrument or agreement evidencing or securing any other Debt between itself and any Person (other than this Agreement) if in the case of (A) or (B) above, such breaches or defaults (in the aggregate) are in respect of an amount which, taken together with (x) any other such breaches or defaults in respect of such other Debt, and (y) any accelerated amounts in respect of such other Debt, exceeds Cdn.$700,000, in the aggregate,

Cease to Carry on Business: if any Loan Party ceases or threatens to cease to carry on business except as permitted by Section 9.2(j);

Voluntary Insolvency: if any Loan Party shall:

apply for or consent to the appointment of a receiver, trustee or liquidator of itself or of all or substantially all of its assets or undertaking;

make or threaten to make a general assignment for the benefit of creditors or make or threaten to make a bulk sale of its assets; or be unable, or admit in writing its inability or failure, to pay its debts generally as they become due;

commence any case, proceeding or other action under any Debtor Relief Laws seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts or an arrangement with creditors or taking advantage of any Debtor Relief Law or proceeding for the relief of debtors, or file an answer admitting the material allegations of a petition filed against it in any bankruptcy, reorganization or insolvency proceeding;

take corporate or partnership action for the purpose of effecting any of the foregoing; or

commit or threaten to commit an act which, if committed by a corporation, would constitute bankruptcy under the Bankruptcy and Insolvency Act (Canada) or any statute passed in substitution therefor, as amended from time to time;

Involuntary Insolvency: if any case, proceeding or other action shall be instituted in any court of competent jurisdiction against any Loan Party seeking in respect of it an adjudication in bankruptcy, reorganization, dissolution, winding-up, liquidation, a composition or arrangement with creditors, a readjustment of debts, the appointment of a trustee, receiver, liquidator or the like of such Loan Party or of all or substantially all of its assets, or any other like relief in respect of such Loan Party under any Debtor Relief Law and, if such case, proceeding or other action is being contested by the Borrower in good faith, the same shall continue undismissed or unstayed and in effect for any period of 30 consecutive days; provided that if an order, decree or judgment is granted (whether or not entered or subject to appeal) against a Loan Party thereunder or a trustee, receiver or liquidator is appointed in the interim and such order, decree, judgment or appointment is not stayed or discharged within ten (10) Business Days of it being granted, such grace period shall cease to apply;