THE LENDERS FROM TIME TO TIME PARTY TO THIS AGREEMENT as Lenders - and - BANK OF MONTREAL as Administrative Agent - and - BANK OF MONTREAL as Lead Arranger and Sole Bookrunner FIRST AMENDED AND RESTATED CREDIT AGREEMENT March 30, 2020

EXECUTION

 

 

 

Exhibit 10.11

 

 

 

PURE SUNFARMS CORP.

as Borrower

 

 

- and -

 

 

THE LENDERS FROM TIME TO TIME PARTY TO THIS AGREEMENT

as Lenders

 

 

- and -

 

 

BANK OF MONTREAL

as Administrative Agent

 

 

- and -

 

 

BANK OF MONTREAL

as Lead Arranger and Sole Bookrunner

 

 

 

 

 

 

FIRST AMENDED AND RESTATED CREDIT AGREEMENT

 

March 30, 2020

 

 

 

 

 

 

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EXECUTION

 

 

 

 

 

 

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EXECUTION

 

 

 

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EXECUTION

 

 

 

 

TABLE OF CONTENTS

 

Page

 

ARTICLE I - INTERPRETATION

ARTICLE II - FACILITY A

 

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EXECUTION

 

 

ARTICLE III - NON-REVOLVING FACILITIES

3.10Accordion33

ARTICLE IV - ANCILLARY CREDIT PRODUCTS

ARTICLE V - GENERAL CONDITIONS

Repayments37

 

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- ii -

 

 

ARTICLE VI - REPRESENTATIONS AND WARRANTIES

ARTICLE VII - COVENANTS

ARTICLE VIII - SECURITY

ARTICLE IX - CONDITIONS PRECEDENT

ARTICLE X - DEFAULT AND REMEDIES

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ARTICLE XI - THE AGENT AND THE LENDERS

ARTICLE XII - CBA MODEL PROVISIONS

ARTICLE XIII - GENERAL

Exhibits

 

“A”-Lenders and Lenders' Commitments “B”-Draw Request

“C”-Rollover Notice

“D”-Substitution Notice

“E”-Repayment Notice

“F”-Monthly Information Certificate “G”-Compliance Certificate

“H”-Excess Cash Flow Certificate “I”-Form of BA Equivalent Note “J”-CBA Model Provisions

 

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Schedules

 

6.01(b)-Credit Parties Information 6.01(h)-Material Permits

6.01(i)-Specific Permitted Liens 6.01(m)-Intellectual Property 6.01(o)-Material Agreements 6.01(p)-Labour Agreements 6.01(q)-Environmental Matters 6.01(r)-Litigation

6.01(s)-Pension Plans

 

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EXECUTION

 

 

 

 

 

FIRST AMENDED AND RESTATED CREDIT AGREEMENT

 

This Agreement dated March 30, 2020 is made among:

 

 

PURE SUNFARMS CORP.

as Borrower

 

 

THE LENDERS FROM TIME TO TIME PARTY TO THIS AGREEMENT

as Lenders

 

 

BANK OF MONTREAL

as Administrative Agent

 

 

BANK OF MONTREAL

as Lead Arranger and Sole Bookrunner

 

 

For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by each party, the parties agree as follows:

 

 

ARTICLE I - INTERPRETATION

 

 

In this Agreement, the words and phrases set out in the CBA Model Provisions (as hereinafter defined) shall have the respective meanings set forth therein (subject to Section 12.01 herein). In addition, the following words and phrases shall have the respective meanings set forth below:

 

“2019 Credit Agreement” means the credit agreement among the parties hereto dated February 7, 2019, as amended, supplemented or modified prior to the date hereof.

 

“Acceleration Date” means the earlier of (i) the date of the occurrence of an Insolvency Event in respect of any Credit Party; and (ii) the date on which the Borrower fails to repay the Obligations in full pursuant to an Acceleration Notice issued by the Agent.

 

“Acceleration Notice” is defined in Section 10.02. “Accordion End Date” means May 1, 2020.

“Adjusted GAAP” at any time means GAAP in effect at such time as if IFRS 16 had not been implemented.

 

“Advance” means an extension of credit by one or more of the Lenders to the Borrower pursuant to this Agreement, including for greater certainty an extension of credit in the form of a Prime-Based

 

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Loan, a Bankers' Acceptance, a BA Equivalent Loan, a CDOR Loan or the issuance of a Letter of Credit, but for greater certainty does not include a Conversion or Rollover.

 

“Affiliate” is defined in the CBA Model Provisions.

 

“Agent” means BMO in its capacity as the administrative agent hereunder, and its successors in such capacity.

 

“Aggregate Net Hedge Liability” means, on any date of determination, the net aggregate amount of the Borrower's liability under all Hedge Transactions outstanding on such date in the event of a default or termination thereunder, calculated in accordance with the terms thereof (and for greater certainty, determined after netting any amounts payable to the Borrower thereunder against amounts payable by the Borrower thereunder).

 

“Agreement” means this credit agreement (including the Exhibits and Schedules) as it may be amended, supplemented, replaced or restated from time to time; and each reference herein to “this Agreement” , “the date hereof”, “the date of this Agreement’ and similar references are references to this amended and restated credit agreement and not to the 2019 Credit Agreement.

 

"Amendment Closing Date" means the date on which all conditions precedent listed in Section

9.01 herein have been satisfied, as confirmed by the Agent to the Borrower in writing.

 

“AML Legislation” means all anti-money laundering, anti-terrorist financing, government sanction and “know your client” Laws in effect in any jurisdiction in which any Company carries on business or owns assets, including any guidelines or orders thereunder, specifically including the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada).

 

“Applicable Law” is defined in the CBA Model Provisions.

 

“Applicable Margin” means, in respect of any Availment Option and in respect of any Fiscal Quarter, the percentage in the column relating to such Availment Option in the following table which corresponds to the applicable Senior Funded Debt to EBITDA Ratio in respect of such Fiscal Quarter, which percentage shall be subject to adjustment from time to time as provided in Section 5.01(d):

 

 

“Approved Jurisdiction” means an Approved Medical Cannabis Jurisdiction or an Approved Non-Medical Cannabis Jurisdiction.

 

“Approved Medical Cannabis Jurisdiction” means:

 

 

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The Required Lenders may in their discretion from time to time (x) upon receipt of a written request by the Borrower, designate any jurisdiction an Approved Medical Cannabis Jurisdiction provided that all above criteria have been satisfied; and (y) revoke the designation of any jurisdiction as an Approved Medical Cannabis Jurisdiction by written notice to the Borrower if such jurisdiction is no longer a Medical Cannabis Jurisdiction. Canada is an Approved Medical Cannabis Jurisdiction as at the date of this Agreement. Notwithstanding the foregoing, the United States shall not be designated an Approved Medical Cannabis Jurisdiction except with the written consent of all Lenders in their discretion.

 

“Approved Non-Medical Cannabis Jurisdiction” means:

 

 

 

The Required Lenders may in their discretion from time to time (x) upon receipt of a written request by the Borrower, designate any jurisdiction an Approved Non-Medical Cannabis Jurisdiction provided that all above criteria have been satisfied; and (y) revoke the designation of any jurisdiction as an Approved Non-Medical Cannabis Jurisdiction by written notice to the Borrower if such jurisdiction is no longer a Non-Medical Cannabis Jurisdiction. Canada is an Approved Non-Medical Cannabis Jurisdiction as at the date of this Agreement. Notwithstanding the foregoing, the United States shall not be designated an Approved Non-Medical Cannabis Jurisdiction except with the written consent of all Lenders in their discretion.

 

“Associate” has the meaning ascribed thereto in the Canada Business Corporations Act.

 

“Availment Option” means a method of borrowing which is available to the Borrower as provided herein.

 

“BA Equivalent Loan” means an Advance in Canadian Dollars made by a Non-BA Lender to the Borrower in respect of which the Borrower has issued a BA Equivalent Note.

 

“BA Equivalent Note” means a promissory note payable by the Borrower to a Non-BA Lender in the form of Exhibit “I” attached hereto.

 

“BA Lender” means a Lender identified in Exhibit “A” attached hereto as a Lender which will accept Bankers' Acceptances hereunder.

 

“Bankers' Acceptance” means a ▇▇▇▇ of exchange or a blank non-interest bearing depository ▇▇▇▇ as defined in the Depository Bills and Notes Act (Canada) drawn by the Borrower and accepted by a BA Lender in respect of which the Borrower becomes obligated to pay the face amount thereof to the holder (which may be a third party or such BA Lender) upon maturity.

 

“BMO” means Bank of Montreal and its successors and permitted assigns.

 

 

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“Borrower” means Pure Sunfarms Corp., a corporation subsisting under the laws of British Columbia.

 

“Borrowing Base Certificate” means a certificate delivered by the Borrower to the Agent in the form of Exhibit F.

 

“Business Day” means any day on which the Agent is open for over-the-counter business in Vancouver, British Columbia and ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, excluding Saturday, Sunday and any other day that is a statutory holiday in Vancouver, British Columbia or Toronto, Ontario.

 

“Canadian Dollars” or “CDN$” means the lawful money of Canada.

 

“Cannabis” has the meaning given to the term cannabis under the Cannabis Act.

 

“Cannabis Act” means An Act respecting cannabis and to amend the Controlled Drugs and Substances Act, the Criminal Code and other Acts, S.C. 2018, c. 16, as amended from time to time.

 

“Cannabis-Related Activities” means any activities, including advertising or promotional activities, relating to or in connection with the importation, exportation, cultivation, production, purchase, distribution or sale of Cannabis or Cannabis-related products.

 

“Cannabis Regulations” means Cannabis Regulations under the Cannabis Act, as amended from time to time and all other regulations made from time to time under the Cannabis Act or any other statute with respect to Cannabis-Related Activities.

 

“Capital Expenditures” means expenditures made directly or indirectly which are considered to be in respect of the acquisition or leasing of capital assets in accordance with GAAP, including the acquisition or improvement of Real Property, plant, machinery or equipment, whether fixed or removable.

 

“Capital Lease” means any lease of assets which in accordance with Adjusted GAAP is required to be capitalized on the balance sheet of the lessee.

 

“Cash Taxes” in respect of any fiscal period means amounts actually paid by the Companies in such fiscal period in respect of income and capital Taxes (whether relating to such fiscal period or any other fiscal period).

 

“CBA Model Provisions” means the model credit agreement provisions attached hereto as Exhibit “J”, which have been revised under the direction of the Canadian Bankers' Association Secondary Loan Market Specialist Group from provisions prepared by The Loan Syndications and Trading Association, Inc.

 

“CDOR Loan” means a loan made by the Lenders to the Borrower in Canadian Dollars in respect of which Interest is determined by reference to the CDOR Rate.

 

“CDOR Period” means, with respect to any CDOR Loan, the period commencing on the Business Day on which such CDOR Loan is advanced or continued or another Loan is converted into such CDOR Loan, as applicable, and ending on a Business Day that is one (1), three (3) or six (6) months thereafter (subject to availability) or such other period as may be agreed to by the Lenders in their absolute discretion as selected by the Borrower in a Draw Request.

 

“CDOR Rate” means on any day the annual rate of interest which is the rate determined as being the arithmetic average of the quotations of all institutions listed in respect of the rate for Canadian Dollar denominated bankers’ acceptances for the relevant period displayed and identified as such on the display referred to as the "CDOR Page" (or any substitute therefor) of Refinitiv Benchmark

 

 

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Services (UK) Limited (or any successor thereto or Affiliate thereof) as of 10:00 a.m. on such day and, if such day is not a Business Day, then on the immediately preceding Business Day (as adjusted by the Agent after 10:00 a.m. to reflect any error in a posted rate of interest or in the posted average annual rate of interest with notice of such adjustment in reasonable detail evidencing the basis for such determination being concurrently provided to the Borrower); provided that if such rates are not available on the CDOR Page on any particular day, then the CDOR Rate on that day shall be the average of the rates applicable to Canadian Dollar bankers’ acceptances for the relevant period quoted for customers in Canada by the Agent as of 10:00 a.m. on such day; or if such day is not a Business Day, then on the immediately preceding Business Day; and provided further that the CDOR Rate shall not be less than zero.

 

“Collateral” means all property, assets and undertaking of the Companies encumbered by the Security, together with all proceeds of the foregoing.

 

“Commitment” means, in respect of any Lender, such Lender's commitment to make Advances to the Borrower under any the Facilities (or a Facility or a Tranche thereof, if required by the context).

 

“Companies” means the Borrower and all of its Subsidiaries from time to time; and “Company” means any of them as the context requires.

 

“Compliance Certificate” means a certificate delivered by the Borrower to the Agent in the form of Exhibit “G”.

 

“Control” is defined in the CBA Model Provisions.

 

“Copyrights” means all rights, title and interests (and all related IP Ancillary Rights) arising under any requirement of Law in copyrights and all mask work, database and design rights, whether or not registered or published, all registrations and recordations thereof and all applications in connection therewith.

 

“Credit Parties” means the Companies and, for so long as the Emerald Guarantee or the Village Guarantee remains outstanding, Emerald or Village (as applicable); and “Credit Party” means any one of them as the context requires.

 

“Currency Hedge Transaction” mean an agreement made between the Borrower and a Lender for the purpose of hedging currency risk, including a currency exchange agreement or a foreign exchange forward contract.

 

“D2 Lease” means the lease dated March 29, 2019 and entered into between Village and Village LP as the landlord of the Borrower as the tenant, a short form of which is to be registered (on or around the date of this Agreement) in the New Westminster Land Title Office against title to the real property municipally known as ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇, and legally described as:

 

PID: ▇▇▇-▇▇▇-▇▇▇ PARCEL 1 ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ LMP42884 EXCEPT PLANS LMP50211, BCP25716, BCP44198 AND EPP76249.

 

“D2 Project” means the upgrade and retrofit of the existing greenhouse on the D2 Property to render it suitable for Cannabis cultivation.

 

“D2 Property” means the leasehold interest of the Borrower created by the D2 Lease.

 

“D2 Property Appraisal” means a satisfactory appraisal in respect of the D2 Property completed no more than six (6) months prior to the Amendment Closing Date by an AACI appraiser satisfactory to the Lenders, in form and substance satisfactory to the Lenders confirming “as is”, “as complete

 

 

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and fully licenced” values for the D2 Property based on the following approaches: fair market, cost, comparable and alternate use on a hypothetical best use facility.

 

“D3 Project” means capital expenditure relating to the processing facility at the D3 Property, located in the area known as “Area 51”.

 

“D3 Property” means the Real Property municipally known as ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇, and legally described as:

 

PID: ▇▇▇-▇▇▇-▇▇▇ THE SOUTH HALF OF THE NORTH EAST QUARTER OF SECTION ▇▇ ▇▇▇▇▇▇▇▇ ▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇: PART INCLUDED IN A 5.16 ACRE PORTION SHOWN ON REFERENCE PLAN 8317; PORTION INCLUDED IN THAT PART OF THE NORTH HALF OF SECTION 31 SHOWN ON EXPROPRIATION PLAN 7066; PARCEL "D" REFERENCE PLAN 38003; PART DEDICATED ROAD ON PLAN BCP19927 AND PART ON PLAN BCP47239.

 

“Deeply Subordinated Debt” means indebtedness of any Company to any Person in respect of which such Person has provided a subordination, postponement and standstill agreement in favour of the Agent which includes an assignment of such Subordinated Debt as security for the Obligations.

 

“Default” is defined in the CBA Model Provisions.

 

“Defined Benefit Pension Plan” means any Pension Plan which contains a “defined benefit provision” as defined in subsection 147.1(1) of the Income Tax Act (Canada).

 

“Distribution” in respect of any Person means any amount paid, directly or indirectly, to a shareholder, partner, director, officer or employee of such Person or a Related Person thereto, including any amount paid by way of dividends, distribution of partnership profits, withdrawal of capital, redemption of shares or partnership units, payments of principal, interest or other amounts on account of indebtedness, salary, bonus, commission, management fees, directors’ fees or otherwise, or any other direct or indirect payment in respect of earnings or capital of such Person; except that the payment of commercially reasonable salaries, bonuses, commissions, stock-based compensation and directors’ fees from time to time to the officers, employees and directors of such Person in the ordinary course of business shall not be considered Distributions.

 

“Draw Request” means a notice in the form of Exhibit “B” given by the Borrower to the Agent for the purpose of requesting an Advance.

 

“EBITDA” means, in respect of any fiscal period, the consolidated net income of the Borrower in such fiscal period determined in accordance with GAAP (but excluding the following: extraordinary or non-recurring income and gains, non-cash gains (such as unrealized foreign exchange gains); plus the following amounts (to the extent such amounts were deducted in determining such consolidated net income, and without duplication):

 

 

 

 

 

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"Eligible Receivable" in respect of the Borrower means an account receivable of the Borrower (in this definition, individually called an "account") which satisfies all of the following eligibility criteria:

 

 

 

 

 

 

 

 

 

 

 

 

from the date of the invoice relating thereto (regardless of the due date specified in such invoice for payment);

 

 

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“Emerald” means Emerald Health Therapeutics, Inc., a corporation subsisting under the laws of British Columbia.

 

“Emerald Canada” means Emerald Health Therapeutics Canada Inc., a corporation subsisting under the laws of British Columbia and a wholly-owned subsidiary of Emerald.

 

“Emerald Guarantee” is defined in Section 8.02(a).

 

“Emerald Note” means the promissory note in the face amount of nine hundred and fifty-two thousand, two hundred and thirty-seven Canadian Dollars (CDN$952,237) issued by Emerald Canada to the Borrower in accordance with the Settlement Agreement.

 

“Equity Issuance” means an issuance or sale by any Company of shares, partnership interests or other equity interests, except any such issuance or sale (i) to any other Company, or (ii) to management or employees of any Company under any employee stock option or stock purchase plan stock appreciation rights plan, phantom stock plan or other employee benefit plan or arrangement in existence from time to time.

 

“Equivalent Amount” means, in relation to an amount in one currency, the amount in another currency that could be purchased by the amount in the first currency, determined by reference to the applicable Exchange Rate at the time of such determination.

 

“Event of Default” is defined in Section 10.01.

 

“Excess Cash Flow” in respect of any Fiscal Year means EBITDA in such Fiscal Year, less the aggregate of the following amounts (without duplication):

 

 

 

 

 

“Excess Cash Flow Certificate” means a certificate delivered by a Senior Officer of the Borrower to the Agent in the form of Exhibit “H”.

 

“Exchange Rate” means, on the date of determination of any amount of Canadian Dollars to be converted into another currency pursuant to this Agreement for any reason, or vice-versa, the spot rate of exchange for converting Canadian Dollars into such other currency or vice-versa, as the case may be, established by the Bank of Canada at approximately 4:30 p.m. on the date of such determination (or such other date as may be specified herein).

 

“Facilities” means Facility A, Facility B and Facility C, and “Facility” means any of them, as the context requires.

 

 

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“Facility A” is defined in Section 2.01.

 

“Facility A Available Commitment” means, at any time, the amount (if any) by which the Facility A Margin Limit applicable at that time exceeds the aggregate of (a) the Outstanding Principal Amount under Facility A at that time, and (b) the amount of any Advances requested under Facility A as at that time, but as yet unfunded.

 

“Facility A Lenders” means those Lenders which have issued Commitments under Facility A. "Facility A Margin Limit" is defined in Section 2.06(a).

"Facility A Maximum Amount" means seven million, five hundred thousand Canadian Dollars (CDN$7,500,000).

 

"Facility B" is defined in Section 3.01.

 

"Facility B Lenders" means those Lenders which have issued Commitments under Facility B. "Facility C" is defined in Section 3.02.

"Facility C Lenders" means those Lenders which have issued Commitments under Facility C.

 

"Facility C Limit" means twelve million, five hundred thousand Canadian Dollars (CDN$12,500,000).

 

“Final Advance Date” means June 30, 2020.

 

“First-Ranking Security Interest” in respect of any Collateral means a Lien in such Collateral which is registered as required under this Agreement to record and perfect the charges contained therein and which ranks in priority to all other Liens in such Collateral, except for any Permitted Liens which may have priority in accordance with Applicable Law.

 

“Fiscal Quarter” means a fiscal quarter of the Borrower (or any other Credit Party if required by the context), ending on the last days of March, June, September and December in each year.

 

“Fiscal Year” means a fiscal year of the Borrower (or any other Credit Party if required by the context), ending on the last day of December in each year.

 

“Fixed Charge Coverage Ratio” means, in respect of any fiscal period, the ratio of: (i) EBITDA in such fiscal period less the aggregate of the following amounts in respect of such fiscal period (without duplication): (A) Cash Taxes, (B) Distributions paid in cash; and (C) Capital Expenditures to the extent not financed by Permitted Funded Debt; to (ii) Funded Debt Service in respect of such fiscal period; provided that, for the purposes of determining the Fixed Charge Coverage Ratio in respect of any fiscal period identified in the table set out below, Funded Debt Service for that fiscal period will be deemed to be the aggregate of (A) the “Term Debt Service” amount set out opposite that fiscal period in the table below, and (B) an amount representing annualized interest accrued on Advances under Facility A drawn during that fiscal period, calculated by multiplying (x) the aggregate amount of the Advances outstanding under Facility A on the last day of that fiscal period, by (y) the interest rate applicable to those Advances under this Agreement (incorporating the Applicable Margin) on the last day of that fiscal period.

 

 

 

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“Funded Debt” in respect of any Person means obligations of such Person which are considered to constitute debt in accordance with Adjusted GAAP, including indebtedness for borrowed money (in the case of the Borrower, specifically including the Outstanding Principal Amount, Subordinated Debt, obligations secured by Purchase-Money Security Interests and obligations under Capital Leases), capitalized interest, and the redemption price of any securities issued by such Person having attributes substantially similar to debt (such as securities which are redeemable at the option of the holder), plus the Aggregate Net Hedge Liability at the time of determination; but excluding the following: accounts payable, payroll accruals, accruals in respect of normal business expenses and future income Taxes (both current and long-term).

 

“Funded Debt Service” means, in respect of any fiscal period, without duplication: (i) the aggregate amount of Interest paid or payable in respect of the Funded Debt of the Borrower on a consolidated basis in respect of such fiscal period (but for greater certainty, excluding any Interest which is capitalized and not paid or payable during such fiscal period); plus (ii) the aggregate amount of scheduled principal payments and scheduled Capital Lease payments paid or payable in respect of the Funded Debt of the Borrower on a consolidated basis in respect of such fiscal period (except the portion of any final payment due in respect of such Funded Debt which constitutes a “balloon payment” and any amount paid in connection with the exercise of an option to purchase equipment under a Capital Lease).

 

“GAAP” means generally accepted accounting principles in Canada as in effect from time to time as set forth in the opinions and pronouncements of the relevant Canadian public and private accounting boards and institutes which are applicable to the relevant Person and the circumstances as of the date of determination, consistently applied including International Financial Reporting Standards adopted by the Accounting Standards Board of the Canadian Institute of Chartered Accountants (which have been adopted by the Borrower).

 

“Governmental Authority” is defined in the CBA Model Provisions, and for greater certainty includes Health Canada.

 

“Guarantee” means any agreement by which any Person assumes, guarantees, endorses, contingently agrees to purchase or provide funds for the payment of, or otherwise becomes liable upon, the obligation of any other Person, or agrees to maintain the net worth or working capital or other financial condition of any other Person or otherwise assures any creditor of such Person against loss, and shall include any contingent liability under any letter of credit or similar document or instrument.

 

“Hazardous Materials” means any contaminant, pollutant, waste or substance that is likely to cause immediately or at some future time harm or degradation to the surrounding environment or risk to human health; and without restricting the generality of the foregoing, including any pollutant, contaminant, waste, hazardous waste or dangerous goods that is regulated by any Requirements of Environmental Law or that is designated, classified, listed or defined as hazardous, toxic, radioactive or dangerous or as a contaminant, pollutant or waste by any Requirements of Environmental Law.

 

 

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“Hedge Transaction” means an Interest Rate Hedge Transaction or a Currency Hedge Transaction.

 

“Indemnitees” means the Lenders, the Agent and their respective successors and permitted assignees, any agent of any of them (specifically including a receiver or receiver-manager) and the respective officers, directors and employees of the foregoing.

 

“Insolvency Event” means, in respect of any Person, the occurrence of any one or more of the following events:

 

 

 

“Insolvency Legislation” means legislation in any applicable jurisdiction relating to reorganization, arrangement, compromise or re-adjustment of debt, dissolution or winding-up, or any similar legislation, and specifically includes for greater certainty the Bankruptcy and Insolvency Act (Canada), the Companies' Creditors Arrangement Act (Canada) and the Winding-Up and Restructuring Act (Canada).

 

“Intellectual Property” means all rights, title and interests in intellectual property and all IP Ancillary Rights relating thereto, including all Copyrights, Patents, Trademarks, Internet Domain Names, Trade Secrets, industrial designs, integrated circuit topographies, plant breeders’ rights and rights under IP Licenses.

 

“Interest” means interest on loans, stamping fees in respect of bankers' acceptances, the difference between the proceeds received by the issuers of bankers' acceptances and the amounts payable upon the maturity thereof, issuance fees in respect of letters of credit, and any other charges or fees in connection with the extension of credit which are determined by reference to the amount of credit extended, plus standby fees in respect of the unutilized portion of any credit facility; but excluding capitalized interest (for greater certainty, being interest which is accrued but not paid), agency fees, arrangement fees, structuring fees, fees relating to the granting of consents, waivers, amendments, extensions or restructurings, the reimbursement of costs and expenses, and any similar amounts which may be charged from time to time in connection with the establishment, administration or enforcement of the Facilities.

 

“Interest Rate Hedge Transaction” mean an agreement made between the Borrower and a Lender for the purpose of hedging interest rate risk, including an interest rate exchange agreements (commonly known as an “interest rate swap”) or a forward rate agreement.

 

 

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“Interim Financial Statements” means, in respect of any Person at any time, the unaudited financial statements of such Person (on a consolidated and unconsolidated basis) in respect of its most recently completed Fiscal Quarter (and also on a year-to-date basis in respect of such Fiscal Quarter and all previous Fiscal Quarters in the same Fiscal Year) prepared in accordance with GAAP except that such financial statements shall not include any notes thereto and shall be subject to normal year-end adjustments.

 

“Internet Domain Names” means all right, title and interest (and all related IP Ancillary Rights) in internet domain names.

 

“Investment” means an investment made or held by a Person, directly or indirectly, in another Person (whether such investment was made by the first-mentioned Person in such other Person or was acquired from a third party), including a contribution of capital and including the acquisition or holding of the following: all or substantially all of the assets used in connection with a business; common or preferred shares; debt obligations; partnership interests; and investments in joint ventures; provided however that if a transaction would satisfy the definition of “Capital Expenditure” herein and also the definition of “Investment” herein, it shall be deemed to constitute an Investment and not a Capital Expenditure.

 

“IP Ancillary Rights” means, with respect to an item of Intellectual Property all foreign counterparts to, and all divisionals, reversions, continuations, continuations-in-part, reissues, re-examinations, renewals and extensions of, such Intellectual Property and all income, royalties, proceeds and liabilities at any time due or payable or asserted under or with respect to any of the foregoing or otherwise with respect to such Intellectual Property, including all rights to ▇▇▇ or recover at Law or in equity for any past, present or future infringement, misappropriation, dilution, violation or other impairment thereof, and, includes in each case, all rights to obtain any other IP Ancillary Right.

 

“IP License” means all contractual obligations (and all related IP Ancillary Rights), whether written or oral, granting any right, title and interest in any Intellectual Property.

 

“Issuing Bank” means BMO in its capacity as such.

 

"Landlord Agreement" means an agreement in form and substance satisfactory to the Agent given in favour of the Agent by Village and Village LP, as the landlord of the D2 Property (and also acknowledged by all mortgagees of such landlord if requested by the Agent upon the instructions of the Required Lenders), which shall include the following provisions: the landlord consents to the granting of a mortgage of the D2 Property by the Borrower (as tenant thereunder) in favour of the Agent and agrees that the Agent may assign the D2 Lease to a third party without the landlord's consent; the landlord agrees to give written notice to the Agent in respect of and a reasonable opportunity to cure any default under the Lease; the landlord agrees not to terminate the D2 Lease; and the landlord agrees to waive (or subordinate and defer the enforcement of) its right of distraint and any other rights and remedies and any security it may hold in respect of any property of the Borrower located on the D2 Property or affixed to the D2 Property which the Borrower is entitled to remove under Applicable Law or pursuant to the terms of the D2 Lease.

 

“Laws” means all statutes, codes, ordinances, decrees, rules, regulations, municipal by-laws, judicial or arbitral or administrative or ministerial or departmental or regulatory judgments, orders, decisions, rulings or awards, or any provisions of such laws, including general principles of common and civil law and equity or policies or guidelines, to the extent such policies or guidelines have the force of law, binding on the Person referred to in the context in which such word is used; and “Law” means any of the foregoing.

 

“Lenders” means the lenders identified in Exhibit “A” attached hereto and any other Persons which may from time to time become lenders pursuant to this Agreement; and their respective successors and permitted assigns.

 

 

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“Lender-Related Distress Event” means, with respect to any Lender or any Person that directly or indirectly Controls such Lender (such Lender and each such Person being individually referred to in this definition as a “distressed person”), (i) the commencement of a voluntary or involuntary proceeding with respect to such distressed person under any Insolvency Legislation, (ii) the appointment of a custodian, conservator, receiver or similar official in respect of such distressed person or any substantial part of its assets, (iii) a forced liquidation, merger, sale or other change of Control of such distressed person supported in whole or in part by Guarantees or other support (including the nationalization or assumption of ownership or operating control of such distressed person by any Governmental Authority), or (iv) such distressed person makes a general assignment for the benefit of its creditors or is otherwise adjudicated as, or determined by any Governmental Authority having regulatory authority over such distressed person or its assets to be, insolvent, bankrupt, or deficient in meeting any capital adequacy or liquidity standard of any such Governmental Authority.

 

“Letter of Credit” means a stand-by letter of guarantee or documentary letter of credit.

 

“Lien” means: (i) a lien, charge, mortgage, hypothec, pledge, security interest or conditional sale agreement; (ii) an assignment, lease, consignment, trust or deemed trust that secures payment or performance of an obligation; (iii) a garnishment; (iv) any other encumbrance of any kind; and (v) any commitment or agreement to enter into or grant any of the foregoing.

 

“Liquidity Coverage” means, at any time:

 

 

 

“Loan Documents” means collectively, this Agreement, the Security, any promissory notes issued by the Borrower to the Agent or the Lenders hereunder, all agreements relating to Hedge Transactions, all Service Agreements, any certificate completed and executed by or on behalf of any Credit Party and all other certificates, instruments, agreements and other documents delivered, or to be delivered, by or on behalf of any Credit Party to the Agent or the Lenders or any of them, as applicable, under or in connection with this Agreement, and specifically including any agreements or letters entered into between the Borrower and the Agent in respect of fees payable to the Agent or the Lenders.

 

“MasterCard Line” is defined in Section 4.02.

 

“Material Adverse Change” means any change or event which: (i) constitutes a material adverse change in the business, operations, financial condition or properties of the Companies taken as a whole; or (ii) materially impairs the Companies' ability, taken as a whole, to timely and fully perform any of their material obligations under the Loan Documents, or (iii) materially impairs the ability of the Agent and the Lenders to enforce their rights and remedies under this Agreement or the Security.

 

“Material Agreements” means each agreement listed in Schedule 6.01(o) hereto and each other agreement made between any Company and another Person from time to time which if terminated would result, or would have a reasonable likelihood of resulting, in a Default, Event of Default or Material Adverse Change.

 

“Material Permit” means each licence or permit listed in Schedule 6.01(h) hereto and each other licence, permit, approval, registration or qualification granted to or held by any Company which if terminated would result, or would have a reasonable likelihood of resulting, in a Default, Event of Default or Material Adverse Change.

 

 

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“Maturity Date” means February 7, 2022.

 

“Medical Cannabis Jurisdiction” means any country in which it is legal in all political subdivisions therein (including for greater certainty on a federal, state and municipal basis) to undertake Medical Cannabis-Related Activities. Each of Canada, Germany, Spain, Czech Republic, Portugal, Italy, Greece, the United Kingdom, Denmark, Colombia, Peru, Lesotho and Australia is a Medical Cannabis Jurisdiction as at the date of this Agreement.

 

“Medical Cannabis-Related Activities” means any activities, including advertising or promotional activities, relating to or in connection with the importation, exportation, cultivation, production, purchase, distribution or sale of Cannabis or Cannabis-related products solely for medical purposes.

 

“Non-BA Lender” means a Lender identified in Exhibit “A” attached hereto as a Lender which will make BA Equivalent Loans instead of accepting Bankers' Acceptances hereunder.

 

“Non-Funding Lender” means any Lender (i) that has failed to fund any payment or Advance required to be made by it hereunder or to purchase all participations required to be purchased by it hereunder and under the Loan Documents, or (ii) that has given verbal or written notice to the Borrower, the Agent or any other Lender, or has otherwise publicly announced, that it believes that it may be unable to fund advances under one or more credit agreements to which it is a party, or

(iii)with respect to which one or more Lender-Related Distress Events has occurred, or (iv) with respect to which the Agent believes, acting reasonably, that such Lender has defaulted or may default in fulfilling its obligations (whether as an agent, lender or letter of credit issuer) under one or more other credit agreements to which it is a party, or (v) with respect to which the Agent believes, acting reasonably, that there is a reasonable chance that such Lender will fail to fund any payment or Advance required to be made hereunder.

 

“Non-Medical Cannabis-Related Activities” means Cannabis-Related Activities other than Medical Cannabis-Related Activities.

 

“Non-Medical Cannabis Jurisdiction” means any country in which it is legal in all political subdivisions therein (including for greater certainty on a federal, state and municipal basis) to undertake Non-Medical Cannabis-Related Activities. Canada is a Non-Medical Cannabis Jurisdiction as at the date of this Agreement.

 

“Non-Revolving Facilities” means Facility B and Facility C; and “Non-Revolving Facility” means either of them, as the context requires.

 

“Non-Swingline Tranche” means the portion of Facility A other than the Swingline.

 

“Obligations” means, at any time, all direct and indirect, contingent and absolute indebtedness, obligations and liabilities of the Borrower to the Agent and the Lenders under or in connection with this Agreement and the other Loan Documents at such time, specifically including the Outstanding Principal Amount and all accrued and unpaid interest thereon, and all obligations arising under or in connection with Service Agreements and Hedge Transactions, together with all fees, expenses and other amounts payable pursuant to this Agreement and the Security; except that if otherwise specified or required by the context, “Obligations” shall mean any portion of the foregoing.

 

“Outstanding Principal Amount” means, at any time, the aggregate of the Advances under the Facilities (or any Facility or any Tranche thereof if the context requires) which have not been repaid or satisfied at such time, determined as follows: (i) in the case of Prime-Based Loans and CDOR Loans, the principal amount thereof; (ii) in the case of Bankers' Acceptances, BA Equivalent Notes and Letters of Credit, the face amount thereof; and (iii) in the case of Hedge Transactions, the Aggregate Net Hedge Liability.

 

 

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“Patents” means all rights, title and interests (and all related IP Ancillary Rights) arising under any requirement of Law in or relating to patents and applications therefor.

 

“Pension Plan” means (i) a “pension plan” or “plan” which is subject to the funding requirements of applicable pension benefits legislation in any jurisdiction, or (ii) any pension benefit plan or similar arrangement applicable to employees of any Company.

 

“Permitted Contingent Investment” means the acquisition of an option, warrant, right or other contingent agreement to make an Investment in a Person that is not exercisable, convertible or exchangeable unless and until (i) each jurisdiction in which such Person proposes to carry on Medical Cannabis-Related Activities becomes a Medical Cannabis Jurisdiction; and (ii) each jurisdiction in which such Person proposes to carry on Non-Medical Cannabis-Related Activities becomes a Non-Medical Cannabis Jurisdiction.

 

“Permitted Funded Debt” means, without duplication: (i) the Obligations; (ii) indebtedness of any Company to another Company; (iii) Subordinated Debt including the Shareholder Loans; and

 

 

 

 

 

 

 

 

 

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proceedings for review has been obtained; and reserves have been established in accordance with GAAP;

 

 

 

 

 

 

 

 

 

 

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provided that the use of the term “Permitted Liens” to describe the foregoing Liens shall mean that such Liens are permitted to exist (whether in priority to or subsequent in priority to the Security, as determined by Applicable Law); and for greater certainty such Liens shall not be entitled to priority over the Security by virtue of being described in this Agreement as “Permitted Liens”.

 

“Permitted Purchase-Money Security Interests” means Purchase-Money Security Interests incurred or assumed in connection with the purchase, leasing or acquisition of capital equipment in the ordinary course of business provided that the aggregate amount of the Companies’ liability thereunder does not at any time exceed two million Canadian Dollars (CDN$2,000,000), and provided further that such capital equipment does not become affixed to any Real Property.

 

“Person” means a natural person, corporation, limited liability company, unlimited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

 

"Potential Statutory Priority Amount" at any time means the amount of all employee source deductions, goods and services tax and all other similar amounts payable by the Companies at such time which have not been paid or remitted when due and could result in a Statutory Lien.

 

“Prime-Based Loan” means a loan made by a Lender to the Borrower in Canadian Dollars in respect of which interest is determined by reference to the Prime Rate, but excluding Advances in the form of BA Equivalent Loans.

 

“Prime Rate” means the greater of the following: (i) the rate of interest announced from time to time by BMO as its reference rate then in effect for determining rates of interest on Canadian Dollar loans to its customers in Canada and designated as its prime rate; and (ii) the thirty (30) day CDOR Rate plus one-half percent (0.5%) per annum.

 

“Proceeds of Realization” means all amounts received by the Agent or any Lender in connection with: (i) any realization in respect of the Security or any portion thereof, whether occurring as a result of enforcement or otherwise, (ii) any sale, expropriation, loss or damage or other disposition of the Collateral or any portion thereof (except any such disposition permitted pursuant to Section 7.02(d), and also excluding any insurance proceeds which are released to the Companies in accordance with Section 8.10), and (iii) any other amount paid by or recovered from any Credit Party, including as a result of its dissolution, liquidation, bankruptcy or winding-up or any other distribution of its assets to creditors; together with all other amounts which are expressly deemed to constitute “Proceeds of Realization” in this Agreement.

 

“Projects” means the D2 Project and the D3 Project, collectively and “Project” means either one of them, as the context requires.

 

“Prohibited Transaction” means a business, activity, person or entity engaged in activities related to the cultivation, production, distribution, sale or possession of (A) non-medical marijuana in any jurisdiction other than Canada and other jurisdictions where it is federally legal, or (B) medical marijuana in any jurisdiction other than Canada and other jurisdictions where it is federally legal.

 

“Properties” means the D2 Property and the D3 Property; and “Property” means either of them, as the context requires.

 

“Proportionate Share” in respect of any Lender means:

 

 

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(a)

in the context of such Lender's obligation to make Advances under a Facility or Tranche, such Lender's Commitment to make Advances under that Facility or Tranche divided by the aggregate amount of all Lenders' Commitments to make Advances under that Facility or Tranche;

 

(b)

subject to Section 11.03, in the context of any Lender's entitlement to receive payments of principal, interest or fees under a Facility or Tranche, the Outstanding Principal Amount due to such Lender under that Facility or Tranche divided by the aggregate amount of the Outstanding Principal Amount due to all Lenders under that Facility or Tranche; and

 

(c)

in any other context, such Lender's Commitment divided by the aggregate of all Lenders' Commitments.

 

“Purchase-Money Security Interest” means (i) a Capital Lease; or (ii) a Lien on any property or asset which is created, issued or assumed to secure the unpaid purchase price thereof, provided that such Lien is restricted to such property or asset (and all additions thereto and replacements and proceeds thereof) and secures an amount not in excess of the purchase price thereof and any interest and fees payable in respect thereof.

 

“Qualified Currency” means the legal tender of any Medical Cannabis Jurisdiction or Non-Medical Cannabis Jurisdiction.

 

“Real Property” means a freehold or leasehold interest in real property, and includes all buildings and other improvements situated thereon and all fixtures attached thereto.

 

“Related Person” in relation to any Person means a Subsidiary, Affiliate, Associate or employee of such Person.

 

“Repayment” means a repayment by the Borrower on account of the Outstanding Principal Amount.

 

“Repayment Notice” means a notice delivered by the Borrower to the Agent committing it to make a Repayment, in the form of Exhibit “E”.

 

“Required Lenders” means (i) at any time prior to the occurrence of an Event of Default which is continuing, any two or more Lenders which have issued Commitments hereunder representing two- thirds (2/3) or more of the total amount of credit available under the Facilities; and (ii) at any time after the occurrence of an Event of Default which is continuing, any two or more Lenders holding two-thirds (2/3) or more of the Outstanding Principal Amount under the Facilities; except that if at any time there are only two (2) Lenders under this Agreement, “Required Lenders” shall mean both Lenders, and if at any time there is only one (1) Lender under this Agreement, “Required Lenders” shall mean such Lender.

 

“Requirements of Environmental Law” means: (i) obligations under common law; (ii) requirements imposed by or pursuant to statutes, regulations and by-laws whether presently or hereafter in force; (iii) directives, policies and guidelines issued or relied upon by any Governmental Authority to the extent such directives, policies or guidelines have the force of law; (iv) permits, licenses, certificates and approvals from Governmental Authorities which are required in connection with air emissions, discharges to surface or groundwater, noise emissions, solid or liquid waste disposal, the use, generation, storage, transportation or disposal of Hazardous Materials; and (v) requirements imposed under any clean-up, compliance or other order made pursuant to any of the foregoing, in each and every case relating to environmental, health or safety matters including all such obligations and requirements which relate to (A) solid, gaseous or liquid waste generation, handling, treatment, storage, disposal or transportation of Hazardous Materials and (B) exposure to Hazardous Materials.

 

 

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“Responsible Person” means (i) an officer or director of any Company or (ii) any other Person required to hold a security clearance pursuant to the Cannabis Act or the Cannabis Regulations.

 

“Rollover” means the renewal of an Availment Option upon its maturity in the same form.

 

“Rollover Notice” means a notice substantially in the form of Exhibit “C” given by the Borrower to the Agent for the purpose of requesting a Rollover.

 

“Sanctions” means the sanctions laws, regulations, embargoes or restrictive measures administered, enacted or enforced by any Sanctions Authority.

 

“Sanctions Authority” means Canada or any other country having jurisdiction over any of the Companies or the respective Governmental Authorities of any of the foregoing.

 

“Sanctioned Entity” means (a) a country or a government of a country, (b) an agency of the government of a country, (c) an organization directly or indirectly controlled by a country or its government, (d) a Person resident in or determined to be resident in a country, in each case, that is subject to a sanctions program administered and enforced by a Sanctions Authority.

 

“Sanctioned Person” means a Person that is, or is owned or Controlled by Persons that are, the subject of any Sanctions.

 

“Security” means the Guarantees, security agreements, mortgages, debentures and other documents required to be provided pursuant to Article VIII and all other documents and agreements delivered by the Credit Parties or any other Persons to the Agent or the Lenders from time to time as security for the payment and performance of the Obligations, and the Liens constituted by the foregoing.

 

“Senior Funded Debt” means, at any time, the Funded Debt of the Borrower on a consolidated basis at such time, excluding Subordinated Debt.

 

“Senior Funded Debt to EBITDA Ratio” means, at any time, the ratio of (i) Senior Funded Debt at such time to (ii) EBITDA in the immediately preceding twelve (12) month period.

 

“Service Agreements” is defined in Section 4.03.

 

“Settlement Agreement” means the settlement agreement dated March 2, 2020 and entered into between Village, Emerald, Emerald Canada and the Borrower in connection with the Shareholder Dispute.

 

“Shareholder Dispute” means the “Disputes” as defined in the Settlement Agreement.

 

“Shareholder Loan Agreement” means the Shareholder Loan Agreement among the Borrower and the Shareholders dated July 5, 2018, as amended by an Amendment Agreement No. 1 dated August 27, 2018, an Amendment Agreement No. 2 dated October 1, 2018, an Amendment

Agreement No. 3 dated November 7, 2018 and an Amendment Agreement No. 4 dated March 6,

2020.

 

“Shareholder Loans” means the loans advanced by Village to the Borrower from time to time on or before the Amendment Closing Date in the aggregate principal amount of not less than thirteen million Canadian Dollars (CDN$13,000,000), bearing interest at a rate not in excess of eight percent (8%) per annum calculated semi-annually and payable on demand, pursuant to the Shareholder Loan Agreement.

 

 

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“Shareholders” means Emerald Canada and Village; and “Shareholder” means either of them as the context requires.

 

“Shareholders Agreement” means the unanimous shareholders agreement among the Borrower (by its prior name 1121371 B.C. Ltd.), Emerald Canada (by its prior name Emerald Health Botanicals Inc.), Emerald and Village, dated June 6, 2017.

 

“Solvent” means, with respect to any Person as of the date of determination, (i) the aggregate property of such Person is sufficient, if disposed of at a fairly conducted sale under legal process, to enable payment of all its obligations, due and accruing due; (ii) such Person is able to meet its obligations as they generally become due; and (iii) such Person has not ceased paying its current obligations in the ordinary course of business as they generally become due; for purposes of this definition, the amount of any contingent obligation at such time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

 

“Specific Permitted Liens” means the Liens described in Schedule 6.01(i), as such Liens may be amended or replaced from time to time on substantially similar terms and conditions provided that the principal amount of the indebtedness secured thereby is not increased.

 

“Statutory Lien” means a Lien in respect of any property or assets of a Company created by or arising pursuant to any Applicable Law in favour of any Governmental Authority to secure any obligation, including a Lien for the purpose of securing such Company's obligation to deduct and remit employee source deductions, goods and services tax and harmonized sales tax pursuant to the Income Tax Act (Canada), the Excise Tax Act (Canada), the Canada Pension Plan (Canada), the Employment Insurance Act (Canada) and any legislation in any jurisdiction similar to or enacted in replacement of the foregoing from time to time.

 

“Subordinated Debt” means indebtedness of any Company to any Person which the Required Lenders in their sole discretion have consented to in writing and in respect of which the holder thereof has entered into a subordination, postponement and standstill agreement in favour of the Agent in form and substance satisfactory to the Agent and registered in all places where necessary or desirable to protect the priority of the Security, which shall provide (among other things) that: (A) the maturity date of such indebtedness is later than the Maturity Date; (B) the holder of such indebtedness may not receive any payments on account of principal or interest thereon (except to the extent, if any, expressly permitted therein); (C) any security held in respect of such indebtedness is subordinated to the Security; (D) the holder of such indebtedness may not take any enforcement action in respect of any such security (except to the extent, if any, otherwise expressly provided therein) without the prior written consent of the Agent; and (E) any enforcement action taken by the holder of such indebtedness will not interfere with the enforcement action (if any) being taken by the Agent in respect of the Security.

 

“Subsidiary” means a Person (other than a natural person) which is Controlled, directly or indirectly, by another Person (other than a natural person); and for greater certainty includes a Subsidiary of a Subsidiary.

 

“Substitution” means the substitution of one Availment Option for another, and does not constitute a fresh or new Advance.

 

“Substitution Notice” means a notice substantially in the form of Exhibit “D” given by the Borrower to the Agent for the purposes of requesting a Substitution.

 

"Swingline" is defined in Section 2.07.

 

 

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"Swingline Commitment" means the commitment of the Swingline Lender to extend credit under the Swingline up to the Swingline Limit, and comprising a portion of such Lender’s Facility A Commitment.

 

"Swingline Lender" means BMO in such capacity.

 

"Swingline Limit" means one million, five hundred thousand Canadian Dollars (CDN$1,500,000). “Taxes” is defined in the CBA Model Provisions.

“Trade Secrets” means all right, title and interest (and all related IP Ancillary Rights) arising under any requirement of Law in or relating to trade secrets.

 

“Trademarks” means all right, title and interest (and all related IP Ancillary Rights) in trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, logos and other source or business identifiers and, in each case, all goodwill associated therewith, all registrations and recordations thereof and all applications in connection therewith.

 

“Tranche” means a designated portion of a Facility which is subject to certain additional terms and conditions as provided herein.

 

“Unfunded Capital Expenditures” means Capital Expenditures made by the Companies which are not funded by any one or more of the following: an Advance under Facility B or Facility C, a Permitted Purchase-Money Security Interest, Subordinated Debt, insurance proceeds, or proceeds from an asset disposition.

 

“Unrestricted Cash” means, as of any date of determination, the amount of all monies standing to the credit of the Borrower that is in bank accounts maintained by the Borrower with the Agent that are (a) not subject to any Lien (other than a Permitted Lien), and (b) not subject to any restriction (specifically including for greater certainty any restriction under a Permitted Lien) which would prevent the Borrower from using such monies for operating purposes in the ordinary course of business.

 

“Village” means Village Farms International, Inc., a corporation subsisting under the federal laws of Canada.

 

“Village Guarantee” is defined in Section 8.02(b).

 

“Village LP” means Village Farms Canada Limited Partnership, a limited partnership formed and existing under the laws of British Columbia.

 

“Year-end Financial Statements” means, in respect of any Person at any time, the audited financial statements of such Person (on a consolidated and unconsolidated basis) in respect of its most recently completed Fiscal Year prepared in accordance with GAAP, including the notes thereto and an unqualified opinion of its auditor with respect thereto.

 

 

Except as otherwise provided herein, (i) each financial term in this Agreement shall be interpreted in accordance with GAAP in effect on the date of such interpretation; and (ii) where the character or amount of any asset or liability or item of revenue or expense is required to be determined, or any consolidation or other computation is required to be made for the purpose of this Agreement, such determination or calculation shall be made in accordance with GAAP in effect on the date of such determination. Notwithstanding the foregoing, if after the date of this Agreement there is a change in GAAP (referred to

 

 

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herein as an “accounting change”), and if any financial ratio or amount determined pursuant to Section 7.03 would be materially different as a result of such accounting change, the Lenders and the Borrower shall discuss whether they wish to amend any financial covenants in Section 7.03 as result of such accounting change. Unless any such amendments have been agreed upon by all parties hereto in writing, compliance with the financial covenants in this Agreement shall be determined as if no such accounting change had occurred. In such event, the financial statements required to be provided hereunder shall be prepared in accordance with GAAP in effect on the date of such financial statements (after giving effect to such accounting change), and the Borrower shall concurrently deliver to the Agent a reconciliation in form and substance satisfactory to the Lenders showing all adjustments made to such financial statements in order to determine compliance with such financial covenants on the basis of GAAP in effect prior to such accounting change.

 

1.03

Currency References

 

All amounts referred to in this Agreement are in Canadian Dollars unless otherwise noted.

 

1.04

Extended Meanings

 

Except to the extent otherwise expressly provided herein:

 

(a)

terms defined in the singular have the same meaning when used in the plural, and vice-versa; and words importing gender include all genders;

 

(b)

when used in the context of a general statement followed by a reference to one or more specific items or matters, the term “including” shall mean “including, without limitation”, and the term “includes” shall mean “includes, without limitation”;

 

(c)

each reference herein to a statute or regulations made pursuant to a statute shall be deemed to include all amendments to such statute or regulations from time to time and all statutes or regulations which may come into effect from time to time substantially in replacement for the said statutes or regulations;

 

(d)

any reference herein to the exercise of discretion by the Agent or the Lenders (including phrases such as “in the discretion of”, “in the opinion of”, “to the satisfaction of” and similar phrases) shall mean that such discretion is absolute and unfettered; and

 

(e)

references to a time of day or date mean the local time or date in the City of Toronto, Ontario unless otherwise specified.

 

1.05

Amendment and Restatement

 

This Agreement amends and restates the provisions of the 2019 Credit Agreement and shall not be considered a novation thereof. Any provision hereof which differs from or is inconsistent with a provision of the 2019 Credit Agreement constitutes an amendment to the 2019 Credit Agreement with each such amendment being effective as and from the date hereof. This Agreement will not discharge or constitute a novation of any debt, obligation, covenant or agreement contained in the 2019 Credit Agreement or in any Security, agreements, certificates and other documents executed and delivered by or on behalf of the Borrower in respect thereof or in connection therewith, but same shall remain in full force and effect save to the extent same are amended by the provisions of this Agreement. All representations and warranties set out in this Agreement are freshly made on the date hereof, but nothing herein shall release or otherwise affect the Borrower’s liability, without duplication, in connection with the representations and warranties contained in the 2019 Credit Agreement. The Borrower hereby represents, warrants, acknowledges and agrees with the Agent that all Security executed and delivered by the Credit Parties to the Agent prior to the date of this Agreement is valid and enforceable in accordance with its terms and continues in full force

 

 

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and effect. Any reference to the 2019 Credit Agreement in any other Loan Document shall be deemed to constitute a reference to this Agreement.

 

 

The following Exhibits and Schedules are attached to this Agreement and incorporated herein by reference (but with respect to Exhibit “J”, subject to Section 12.01 hereof):

 

Exhibits

 

“A”-Lenders and Lenders' Commitments “B”-Draw Request

“C”-Rollover Notice “D”-Substitution Notice “E”-Repayment Notice

“F”-Borrowing Base Certificate “G”-Compliance Certificate

“H”-Excess Cash Flow Certificate “I”-Form of BA Equivalent Note “J”-CBA Model Provisions

 

Schedules

 

6.01(b)- Credit Parties Information 6.01(h)- Material Permits

6.01(i)- Specific Permitted Liens 6.01(m)- Intellectual Property 6.01(o)- Material Agreements 6.01(p)- Labour Agreements 6.01(q)- Environmental Matters 6.01(r)- Litigation

6.01(s)- Pension Plans

 

 

ARTICLE II - FACILITY A

 

 

Subject to the terms and conditions in this Agreement, each Lender hereby establishes a revolving credit facility for the Borrower in the maximum principal amount indicated opposite such Lender's name in Exhibit "A" under the heading "Facility A Commitments". The said credit facilities are established by the Lenders severally and not jointly, and are collectively referred to in this Agreement as "Facility A". Each Advance by a Lender under the Non-Swingline Tranche shall be made in its Proportionate Share of the Non-Swingline Tranche.

 

 

 

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The Obligations under Facility A shall become due and payable on the earlier of: (i) the Acceleration Date; and (ii) the Maturity Date.

 

 

Subject to the restrictions contained in this Agreement (and in particular, Sections 5.02 and 5.03), the Borrower may receive Advances under Facility A by any one or more of the following Availment Options (or any combination thereof):

 

 

 

 

 

 

Bankers' Acceptances, BA Equivalent Loans and CDOR Loans will not be issued with a maturity date later than the Maturity Date. The Borrower may convert all or any portion of the Outstanding Principal Amount under Facility A in the form of any above Availment Option into another form of Availment Option, subject to and in accordance with the terms and conditions of this Agreement (but for greater certainty, Bankers’ Acceptances. BA Equivalent Loans and CDOR Loans may not be converted into another Availment Option prior to the maturity thereof).

 

 

In respect of Advances under Facility A, the Borrower agrees to pay the following to the Agent on behalf of the Lenders (or if specified below, to the Issuing Bank for its own account):

 

 

 

 

 

 

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A portion of Facility A in the maximum amount of the Swingline Limit (the "Swingline") shall be subject to the following terms and conditions, in addition to any other applicable terms and conditions contained in this Agreement:

 

 

 

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Letters of Credit shall be subject to the following additional terms and conditions:

 

 

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The Borrower may from time to time upon two (2) Business Days’ prior written notice to the Agent, permanently cancel any unadvanced portion of Facility A in a minimum amount of one hundred thousand Canadian Dollars (CDN$100,000) without payment of any penalty or fee (provided that such required minimum amount shall not apply in the case of a cancellation of Facility A in its entirety). The Facility A Maximum Amount shall be automatically and permanently reduced by the amount so cancelled and each Lender’s Commitment under Facility A shall be reduced by its Proportionate Share of the amount so cancelled.

 

ARTICLE III - NON-REVOLVING FACILITIES

 

 

Subject to the terms and conditions in this Agreement, each Lender hereby confirms that it has issued a Commitment in the maximum principal amount indicated opposite its name in Exhibit “A” under the heading “Facility B Commitments”. The said Commitments have been established by the Lenders severally and not

 

 

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jointly, and are hereinafter collectively referred to as “Facility B”. Facility B is a committed, non-revolving credit facility.

 

 

Subject to the terms and conditions in this Agreement, each Lender hereby establishes a committed, non-revolving credit facility for the Borrower in the maximum principal amount indicated opposite such Lender's name in Exhibit “A” under the heading “Facility C Commitments”. The said credit facilities are established by the Lenders severally and not jointly, and are hereinafter collectively referred to as “Facility C”. Each Advance by a Lender under Facility C shall be made in its Proportionate Share of Facility C. The aggregate principal amount of all Advances under Facility C shall not exceed the Facility C Limit.

 

 

 

 

 

 

 

 

 

 

 

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As used herein, “net proceeds” in respect of any above transaction means the gross amount payable in respect of such transaction less any Taxes, sales commissions and other reasonable expenses incurred in connection with the transaction, usual and reasonable adjustments in connection with the transaction and any other amount specifically approved in writing by the Required Lenders acting reasonably.

 

 

 

Subject to the restrictions contained in this Agreement (and in particular, Sections 5.02 and 5.03), the Borrower may receive Advances under each Non-Revolving Facility by any one or more of the following Availment Options (or any combination thereof):

 

 

 

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Bankers' Acceptances BA Equivalent Loans and CDOR Loans will not be issued with a maturity date later than the Maturity Date. The Borrower may convert all or any portion of the Outstanding Principal Amount under any Non-Revolving Facility in the form of any above Availment Option into another form of Availment Option, subject to and in accordance with the terms and conditions of this Agreement (but for greater certainty, Bankers’ Acceptances. BA Equivalent Loans and CDOR Loans may not be converted into another Availment Option prior to the maturity thereof).

 

 

In respect of Advances under each Non-Revolving Facility, the Borrower agrees to pay the following:

 

 

 

 

 

 

Except as otherwise provided in this Agreement, such payments shall be made to the Agent on behalf of the Lenders; and the Agent shall promptly remit to each Lender its Proportionate Share of each such payment.

 

 

Within ninety (90) days after the final Advance under Facility C the Borrower shall enter into one or more Interest Rate Hedge Transactions with the Lenders such that the aggregate notional amount of all Interest Rate Hedge Transactions is not less than fifty percent (50%) of the aggregate Outstanding Principal Amount under the Non-Revolving Facilities after such Advance.

 

 

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Upon not less than three (3) Business Days' prior written notice to the Agent, the Borrower may make a Repayment on account of the Outstanding Principal Amount under a Non-Revolving Facility (except Bankers’ Acceptances, BA Equivalent Loans and CDOR Loans prior to the maturity thereof) in a minimum amount of one hundred Thousand Canadian Dollars (CDN$100,000) without payment of any penalty or fee, provided that the Borrower shall also concurrently unwind Hedge Transactions to the extent necessary such that the aggregate notional amount of all outstanding Hedge Transactions relating to the relevant Non- Revolving Facility does not exceed the Outstanding Principal Amount under that Non-Revolving Facility at such time. Any such voluntary Repayment shall be applied against the Borrower's obligations to make scheduled Repayments under that Non-Revolving Facility (including the final Repayment of the Outstanding Principal Amount on the Maturity Date) in reverse chronological order; and the available credit (if any) under the relevant Non-Revolving Facility shall be automatically and permanently reduced by any such voluntary Repayment. The Agent shall promptly remit to each Lender its Proportionate Share of any such voluntary Repayment. For greater certainty however, Bankers’ Acceptances, BA Equivalent Loans and CDOR Loans may not be repaid prior to the maturity thereof.

 

3.10Accordion

 

 

 

 

 

 

(12) month period immediately following each such increase.

 

 

 

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new Commitment among the Facilities and the resulting changes to the limits of the affected Facilities. Any such amendment shall be binding upon all Lenders, without the necessity of any notice to such other Lenders by the Borrower or the Agent.

 

 

 

ARTICLE IV - ANCILLARY CREDIT PRODUCTS

 

 

 

 

 

 

 

 

 

 

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Subject to the terms and conditions of this Agreement, BMO may in its discretion establish a line of credit for the Borrower in such principal amount as may be agreed between BMO and the Borrower from time to time, in respect of corporate MasterCards in Qualified Currencies issued by BMO to the Borrower`s employees to be used for corporate purposes only in Approved Jurisdictions, including purchasing supplies and funding miscellaneous business expenses (the “MasterCard Line”). BMO shall issue MasterCards upon request by the Borrower from time to time upon the completion of, and in accordance with, the credit card agreements and other documents customarily required by BMO in connection with the issuance of corporate MasterCards. The Borrower shall pay interest and fees in connection with loans and advances made under the MasterCard Line at the rates and at the times set out in such credit card agreements and other documents, and the Borrower`s indebtedness thereunder, including accrued and unpaid interest thereon, shall mature and become due and payable in full by the Borrower on the earlier of (i) the date specified in the such agreements, and (ii) the Maturity Date.

 

 

BMO may in its discretion from time to time enter into agreements with the Borrower or any other Company in respect of cash management, payroll or other banking services (collectively, “Service Agreements”). The Borrower hereby agrees to indemnify and save harmless BMO in respect of all losses which it may suffer in respect of the failure of any Company to observe and perform its obligations under any Service Agreement, and for all purposes of this Agreement such Service Agreement shall be deemed to have been entered into between BMO and the Borrower. The Borrower agrees to pay to BMO (for its own account) fees in respect of Service Agreements as they may agree in writing from time to time.

 

 

ARTICLE V - GENERAL CONDITIONS

 

 

 

 

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adequately disclosed to the Borrower, whether pursuant to section 4 of the Interest Act (Canada) or any other Law.

 

 

 

 

 

 

 

The determination of such adjustments by the Agent shall be deemed to be correct absent manifest error. If the Agent does not receive a Compliance Certificate on a date required pursuant to Section 7.04, then from and after the date such Compliance Certificate was required to have been delivered, the Applicable Margin in respect of each Availment Option shall be the highest Applicable Margin relating thereto, until the fifth Business Day following receipt by the Agent of the required Compliance Certificate.

 

 

 

 

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Lenders, each in accordance with its Proportionate Share. For greater certainty, however, stamping fees in respect of Bankers' Acceptances and BA Equivalent Notes shall be received and retained by the respective Lenders which issued or accepted such Bankers' Acceptances and BA Equivalent Notes.

 

 

 

 

 

 

The Agent shall open and maintain, in accordance with its usual practice, accounts evidencing the Obligations; and the information entered in such accounts shall constitute prima facie evidence of the Obligations. The Agent may, but shall not be obliged to, request the Borrower to execute and deliver promissory notes from time to time as additional evidence of the Obligations, in form and substance satisfactory to the Agent acting reasonably.

 

 

Whenever it is necessary or desirable at any time to determine the Equivalent Amount in Canadian Dollars of an amount expressed in any other Qualified Currency, or vice-versa (specifically including for greater certainty the determination of whether the Outstanding Principal Amount under any Facility or Tranche exceeds the maximum amount of such Facility or Tranche), the Equivalent Amount shall be determined by reference to the Exchange Rate on the date of such determination. Notwithstanding the foregoing, however, for the purpose of determining the fees applicable to Letters of Credit issued under Facility A and the standby fees applicable to Facility A and Facility C, the Agent shall make such determination based upon the Exchange Rate in effect on the first Business Day of the month in which such determination is made.

 

 

 

_F 1 + (D x T/365)

 

where:

 

 

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Fmeans the face amount of such Bankers’ Acceptance or BA Equivalent Note, Dmeans the discount rate, and

Tmeans the number of days to maturity of such Bankers’ Acceptance or BA Equivalent Note,

 

with the amount as so calculated being rounded up or down to the fifth decimal place and with 0.000005 being rounded up.

 

 

 

 

 

 

The following provisions are applicable to Bankers' Acceptances issued by the Borrower and accepted by any BA Lender hereunder:

 

Payment of Bankers' Acceptances

 

 

Availability of Bankers' Acceptances

 

 

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Agent shall so advise the Borrower, and in such event the BA Lenders shall not be obliged to accept and the Borrower shall not be entitled to issue Bankers' Acceptances.

 

Power of Attorney

 

 

Dispositions

 

 

 

Each Non-BA Lender will not accept Bankers' Acceptances hereunder, and shall instead from time to time make BA Equivalent Loans to the Borrower. Each BA Equivalent Loan shall be evidenced by a non-interest bearing promissory note payable by the Borrower to the Non-BA Lender substantially in the form of Exhibit “I” attached hereto, which will be purchased by the Non-BA Lender. Each BA Equivalent Note shall be negotiable by the Non-BA Lender without notice to or the consent of the Borrower, and the holder thereof shall be entitled to enforce such BA Equivalent Note against the Borrower free of any equities, defences or rights of set-off that may exist between the Borrower and the Non-BA Lender. In this Agreement, all references to a BA Equivalent Note shall mean the loan evidenced thereby if required by the context; and all references to the “issuance” of a BA Equivalent Note by a Non-BA Lender and similar expressions shall mean the making of a BA Equivalent Loan by the Non-BA Lender which is evidenced by a BA Equivalent Note. The following provisions are applicable to each BA Equivalent Loan made by a Non-BA Lender to the Borrower hereunder:

 

Payment of BA Equivalent Notes

 

 

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manner applicable to Prime-Based Loans. The Borrower agrees not to claim any days of grace for the payment at maturity of any BA Equivalent Note and agrees to indemnify and save harmless the Non-BA Lender in connection with all payments made by the Non-BA Lender (or by the Agent on its behalf) pursuant to BA Equivalent Notes accepted by the Non-BA Lender, together with all reasonable costs and expenses incurred by the Non-BA Lender in this regard. The Borrower hereby waives any defences to payment which might otherwise exist if for any reason a BA Equivalent Note is held by the Non-BA Lender for its own account at maturity.

 

Availability of BA Equivalent Loans

 

 

Power of Attorney

 

 

Dispositions

 

 

 

The following provisions are applicable to CDOR Loans made by the Lenders to the Borrower:

 

 

 

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then, subject to Section 5.10(d), the Agent shall notify the Borrower of the foregoing and the Lenders shall not be obliged to make the requested CDOR Loan; and if such determination takes place after the Lenders have already made Advances in the expectation that such Advances will constitute a CDOR Loan for the CDOR Period requested, the Agent may by written notice to the Borrower require the Borrower to select another CDOR Period or convert the said CDOR Loan into a Prime-Based Loan with interest payable thereon at the rate and in the manner as provided in Section 2.05 or Section 3.07 (as applicable) with respect to Prime-Based Loans.

 

 

 

 

 

 

 

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date in clause (ii) above and in this clause (iii) a “CDOR Scheduled Unavailability Date”); or

 

 

then promptly after such determination by the Agent, the Agent and the Borrower may mutually agree upon a successor rate to the CDOR Rate, and the Agent and the Borrower may amend this Agreement to replace the CDOR Rate with an alternate benchmark rate (including any mathematical or other adjustments to the benchmark (if any) incorporated therein), giving due consideration to any evolving or then existing convention for similar Canadian Dollars denominated credit facilities for such alternative benchmarks (any such proposed rate, a “CDOR Successor Rate”), together with any proposed CDOR Successor Rate conforming changes and any such amendment shall become effective at 5:00 p.m. (Toronto time) on the fifth Business Day after the Agent shall have posted such proposed amendment to the Borrower.

 

affected CDOR Loans or CDOR Periods). Upon receipt of such notice, the Borrower may revoke any pending request for a CDOR Loan or conversion to or rollover of CDOR Loans, (to the extent of the affected CDOR Loans or CDOR Periods) or, failing that, will be deemed to have converted such request into a request for a Prime-Based Loan (subject to the foregoing Section 5.10(d)) in the amount specified therein.

 

 

 

The Borrower acknowledges that Bankers’ Acceptances, BA Equivalent Loans and CDOR Loans may not be repaid prior to the maturity thereof. If prior to the maturity of such Availment Option the Agent receives any funds from the Borrower or any other Person which are intended to be applied as a Repayment thereof, the Agent may retain such funds without any obligation to invest such funds or pay interest thereon, and shall apply such funds against such Availment Option on the scheduled maturity date thereof.

 

 

The obligation of any Lender to make Advances shall be suspended if and for so long as it is unlawful or impossible for such Lender to maintain its Commitment or make Advances hereunder as a result of the adoption of any Applicable Law or any change in any Applicable Law, or any change in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by such Lender with any request or directive (whether or not having the force of law) of any such Governmental Authority, central bank or comparable agency.

 

 

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The Borrower acknowledges that pursuant to AML Legislation the Agent and the Lenders may be required to obtain, verify and record information regarding the Companies and their respective directors, authorized signing officers, direct or indirect shareholders, partners or other persons in control of the Companies and the transactions contemplated hereby. The Borrower shall promptly provide all such information, including any supporting documentation and other evidence, as may be requested by the Agent or any Lender, or any prospective assignee or participant of a Lender or the Agent, in order to comply with any applicable AML Legislation, whether now or hereafter in existence. If the Agent has ascertained the identity of any Company, or any authorized signatories of any Company, for the purposes of applicable AML Legislation, then the Agent shall:

 

 

 

Notwithstanding the foregoing each Lender acknowledges and agrees that the Agent has no obligation to ascertain the identity of any Credit Party, or any authorized signatories of any Credit Party, on behalf of such Lender or to confirm the completeness or accuracy of any information that the Agent obtains from any Credit Party, or any such authorized signatory, in doing so.

 

 

Each Company is and will remain in compliance in all material respects with all Canadian economic sanctions laws and implementing regulations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada), the Criminal Code (Canada), the United Nations Act (Canada) and all similar applicable anti-money laundering and counter-terrorism financing provisions and regulations issued pursuant to any of the foregoing. No Company (i) is a Person designated by the Canadian government on any list set out in the United Nations Al-Qaida and Taliban Regulations, the Regulations Implementing the United Nations Resolutions on the Suppression of Terrorism or the Criminal Code (collectively, the “Terrorist Lists”) with which a Canadian Person cannot deal with or otherwise engage in business transactions, (iii) is a Person who is otherwise the target of Canadian economic sanctions laws or (iv) is controlled by (including by virtue of such Person being a director or owning voting shares or interests), or acts, directly or indirectly, for or on behalf of, any Person or entity on a Terrorist List or a foreign government that is the target of Canadian economic sanctions prohibitions such that the entry into, or performance under, this Agreement or any other Loan Document would be prohibited under Canadian Law.

 

 

ARTICLE VI - REPRESENTATIONS AND WARRANTIES

 

 

The Borrower hereby represents and warrants to the Agent and the Lenders as follows:

 

 

 

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Jurisdictions and all locations therein, the number and classes of its issued and outstanding shares, and (except in the case of the Borrower) a list of its shareholders including the number and class of shares held by each. Schedule 6.01(b) also contains a list of all Subsidiaries.

 

 

 

 

 

 

 

 

 

 

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in each case, free and clear of any and all Liens except for Permitted Liens.

 

 

 

 

 

 

 

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deductions or other withholdings) required to be made to the appropriate funding agency in accordance with all Applicable Laws and the terms of such Pension Plan have been made in accordance with all Applicable Laws and the terms of such Pension Plan, (ii) to the extent applicable, all liabilities under such Pension Plan are funded, on a going concern and solvency basis, in accordance with the terms of the respective Pension Plans, the requirements of applicable pension benefits laws and of applicable regulatory authorities and the most recent actuarial report filed with respect to the Pension Plan, and (iii) no event has occurred and no conditions exist with respect to any such Pension Plan that has resulted or could reasonably be expected to result in such Pension Plan having its registration revoked or refused for the purposes of any applicable pension benefits or tax Laws or being placed under the administration of any relevant pension benefits regulatory authority or being required to pay any Taxes or penalties under any applicable pension benefits or tax Laws.

 

 

 

 

 

and the Companies have no material liabilities (whether accrued, absolute, contingent or otherwise) except as disclosed therein and liabilities incurred in the ordinary course of business which do not directly or indirectly pertain to financing activities; and since the dates of the said Year-end Financial Statements and Interim Financial Statements, as the case may be, no material liabilities have been incurred by the Companies except in the ordinary course of business and no Material Adverse Change has occurred.

 

 

 

 

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investigations or claims which are being contested in good faith and in respect of which reserves have been established in accordance with GAAP.

 

 

 

 

(aa) Transactions with Related Persons – The Companies are not party to any contract, commitment or transaction (including by way of loan) with any Related Person, except (i) for the Material Agreements listed in Schedule 6.01(o), (ii) the Shareholder Loans or (iii) on terms that are fair and reasonable and no less favourable to it than it would obtain in any comparable arm's length transaction with a Person that is not a Related Person.

 

(bb) Full Disclosure - There are no facts known to the Borrower which could reasonably be expected to materially adversely affect the Companies' ability to observe and perform their respective obligations under the Loan Documents.

 

 

The Borrower acknowledges that the Agent and the Lenders shall rely upon the representations and warranties contained in this Article in connection with the establishment and continuation of the Facilities and also in connection with the entering into by any Lender of any Hedge Transaction with the Borrower. Notwithstanding any investigations which may be made by the Agent or the Lenders, the said representations and warranties shall survive the execution and delivery of this Agreement until full and final payment and satisfaction of the Obligations.

 

 

ARTICLE VII - COVENANTS

 

 

The Borrower hereby covenants and agrees with the Agent and the Lenders that it will, and will cause each of its Subsidiaries to:

 

 

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the availability of insurance coverage in the market); all of which policies of insurance shall be in such amounts as are customary in the industry for similar businesses and properties, provided that the liability insurance coverage shall be in an amount not less than $10,000,000; and the Borrower shall cause the interest of the Agent to be noted on property insurance policies as first mortgagee and loss payee (which policies shall include the standard mortgage clause approved by the Insurance Bureau of Canada (or an equivalent clause in other applicable jurisdictions)) and as an additional insured under liability insurance policies; and the Borrower shall provide the Agent with certificates of insurance and certified copies of such policies from time to time upon request;

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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in each case, by the Accordion End Date, the Borrower shall, by way of Equity Issuance to the Shareholders, raise no less than nine million Canadian Dollars (CDN$9,000,000) on or before May 30, 2020.

 

 

The Borrower hereby covenants and agrees with the Agent and the Lenders that it will not, and will ensure that each of its Subsidiaries does not, without the prior written consent of the Agent on behalf of the Required Lenders (or if required pursuant to Section 11.01, all Lenders acting unanimously), which consent may be withheld in their sole discretion unless otherwise expressly provided herein:

 

 

 

 

 

 

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Sanctioned Person or a Sanctioned Entity if such funding, financing or paying would result in a violation of Sanctions by any Person (including any Person participating in such Advance, whether as underwriter, advisor, investor or otherwise), or in any other manner that would result in a violation of Sanctions by any Person. The Agent and the Lenders in their sole and unfettered discretion may refuse to make any Advance or delay, block or refuse to process any transaction which they believe may result in a contravention of the foregoing covenant; or

 

 

 

 

 

 

The Borrower agrees to deliver, or cause to be delivered (by email in accordance with Section 13.08), the following financial and other information to the Agent at the times indicated below:

 

 

 

 

 

 

 

 

 

 

 

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ARTICLE VIII - SECURITY

 

 

The Borrower agrees to provide (or cause the Subsidiaries to provide) the security listed below as continuing security for the payment of the Obligations, specifically including for greater certainty all obligations of the Borrower to the respective Lenders pursuant to or arising in connection with Hedge Transactions and all other obligations of the Borrower arising under or in respect of this Agreement and the other Loan Documents:

 

 

 

 

 

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The Borrower agrees to obtain and provide to the Agent the following (and it shall constitute an Event of Default if any item of listed below is not provided to the Agent):

 

 

 

 

 

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The Borrower may by written notice to the Agent request that the Emerald Guarantee or the Village Guarantee be released, provided that (i) prior to or simultaneous with any such release, the remaining Guarantor agrees and delivers to the Agent all documentation necessary to increase the limit on its guarantee to twenty million Canadian Dollars (CDN$20,000,000) plus interest thereon after demand at the Prime Rate plus two percent (2.00%) per annum, (ii) all representations and warranties contained herein continue to be true and correct in all material respects, and (iii) no Default, Event of Default or Material Adverse Change has occurred and is continuing or would occur and be continuing following the release of the relevant guarantee. The Lenders agree to act reasonably in considering any such request.

 

 

 

The Security shall be in form and substance satisfactory to the Agent and the Required Lenders in their sole discretion. The Security shall be held by the Agent for the benefit of the Lenders. The Agent may require that any item of Security be governed by the Laws of the jurisdiction where the property subject to such item of Security is located. The Security shall be registered by the Borrower where necessary or desirable to record and perfect the charges contained therein, as determined by the Agent in its sole discretion, specifically including registrations in the Canadian Intellectual Property Office and, to the extent required by the Agent upon the instructions of the Required Lenders, fixture filings in respect of any personal property of the Companies affixed to Real Property. All share certificates evidencing issued and outstanding shares in the capital of each Company (other than the Borrower) shall be delivered to the Agent together with a stock transfer power of attorney executed in blank.

 

 

The Borrower shall cause to be delivered to the Agent the opinions of the solicitors for the Companies regarding their corporate status, the due authorization, execution and delivery of the Security provided by them, all registrations in respect of the Security, the results of all corporate, personal property security and other customary searches in respect of the Companies, title to the Property and the results of all customary off-title enquiries relating thereto (such results to be satisfactory to the Agent and the Lenders) and the enforceability of such Security; all such opinions to be in form and substance satisfactory to the Agent and its counsel. In lieu of title opinions, the Borrower may at its option arrange for title insurance in respect of all of either or both Properties, the form and substance of which shall be satisfactory to the Agent and the Lenders.

 

 

The Borrower shall execute and deliver from time to time, and cause each other Company to execute and deliver from time to time, all such further documents and assurances as may be reasonably required by the Agent from time to time, not inconsistent with the terms of this Agreement, in order to provide the Security contemplated hereunder, specifically including: supplemental or additional security agreements, assignments and pledge agreements which shall include lists of specific assets to be subject to the security interests required hereunder.

 

 

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If a Lender continues to be a party to one or more Hedge Transactions with the Borrower after all other indebtedness and obligations of the Borrower to such Lender hereunder have been repaid and satisfied in full (or assigned by such Lender to an assignee), for greater certainty such Lender shall continue to be a Lender for all purposes of this Agreement and the obligations under such Hedge Transactions shall continue to be secured by the Security as provided herein, but such Lender shall not thereafter be a “Required Lender” as such term is defined herein.

 

 

If the Borrower does not provide the Agent with evidence of continuing insurance coverage which satisfies the requirements of this Agreement, the Agent may, but shall have no obligation to, purchase such insurance in order to protect the interests of the Agent and the Lenders in the Collateral. Such insurance may also, but need not, protect the Companies’ interests in the Collateral. The Borrower agrees to immediately reimburse the Agent upon demand for all costs and expenses incurred by the Agent in respect of the purchase of any such insurance, and until so paid such expenses shall constitute part of the Obligations, shall bear interest as provided in Section 10.09 and shall be secured by the Security.

 

 

If insurance proceeds become payable in respect of loss of or damage to any property owned by a Company:

 

 

 

 

 

 

The Borrower acknowledges and agrees that the mortgages referred to in Sections 8.01(c) and (d) (the “Mortgages”) are intended to secure all of the present and future debts and liabilities of the Borrower to the Lenders, to the maximum principal amount of seventy million Canadian Dollars (CDN$70,000,000). The Borrower further acknowledges and agrees that the Mortgages are to be registered at such principal amount in preparation for future use only, and that notwithstanding the principal amount shown on the face of the Mortgages, the Lenders are not committed to advance and have no obligation to advance more than the currently authorized amounts set forth opposite their respective names in Exhibit “A”, and otherwise subject to the terms and conditions set out in this Agreement.

 

ARTICLE IX - CONDITIONS PRECEDENT

 

 

The amendments to the 2019 Credit Agreement reflected in this Agreement shall not become effective unless and until the following conditions have been satisfied, in each case to the satisfaction of the Agent and the Lenders in their sole discretion:

 

 

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The Lenders shall have no obligation to make the first Advance or any subsequent Advance under any Facility unless at the time of each such Advance all of the following conditions have been satisfied, in each case to the satisfaction of the Agent and the Lenders:

 

 

 

 

 

 

 

 

 

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The Facility C Lenders shall have no obligation to make the first Advance under Facility C unless at the time of such Advance all of the following conditions have been satisfied, in each case to the satisfaction of the Facility C Lenders in their sole discretion:

 

 

 

 

 

 

 

 

The Facility C Lenders shall have no obligation to make the first Advance or any subsequent Advance to the Borrower under Facility C unless at the time of making such Advance the following terms and conditions shall have been satisfied, in each case to the satisfaction of the Facility C Lenders in their sole discretion:

 

 

 

 

which are, in each case, evidenced by invoices to the satisfaction of the Facility C Lenders and have not been funded by previous Facility C Advances;

 

 

 

 

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If the certificate referred to in this paragraph (b) attaches a construction budget for the D2 Project demonstrating change orders and cost overruns in excess of ten per cent. (10%) of the originally budgeted D2 Project costs:

 

 

 

ARTICLE X - DEFAULT AND REMEDIES

 

 

The occurrence of any one or more of the following events, after the expiry of any applicable cure period set out below, shall constitute an event of default under this Agreement (an “Event of Default”):

 

 

 

 

 

 

 

 

 

 

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any further liability or obligation thereunder; or any document (other than a Guarantee) constituting part of the Security shall for any reason fail to create a valid and perfected First-Ranking Security Interest in and to the property purported to be subject thereto;

 

 

 

 

 

 

 

 

 

 

 

 

 

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Upon the occurrence of an Event of Default which is continuing, any Lender which has issued a Bankers’ Acceptance, BA Equivalent Note or CDOR Loan or entered into a Hedge Transaction with the Borrower may make a Prime-Based Loan to the Borrower in an amount equal to the face or principal amount of such Bankers’ Acceptance, BA Equivalent Note or CDOR Loan, or the amount required to unwind such Hedge Transaction (such amount to be determined in accordance with the terms thereof), as the case may be; and the proceeds of any such Prime-Based Loan shall be held by such Lender and used to satisfy the Lender's obligations under the said Bankers’ Acceptance, BA Equivalent Note or CDOR Loan as such becomes due, or to effect the unwinding of such Hedge Transaction. Any such Prime-Based Loan shall bear interest at the rate and in the manner applicable to Prime-Based Loans under the Facilities.

 

 

Upon the occurrence and during the continuation of an Event of Default, in addition to and not in limitation of any rights now or hereafter granted under Applicable Law, each Lender may at any time and from time to time:

 

 

 

Each Lender may exercise any rights pursuant to this Section 10.04 without prior notice to the Borrower or such Company, but agrees to provide written notice to the Agent and the Borrower promptly after exercising any such rights.

 

 

---

 

 

 

 

After the occurrence and during the continuation of an Event of Default the Agent may from time to time, but subject to Section 11.03, apply any Proceeds of Realization against any portion or portions of the Obligations, and the Borrower may not require any different application. The taking of a judgment or any other action or dealing whatsoever by the Agent or the Lenders in respect of the Security shall not operate as a merger of any of the Obligations hereunder or in any way affect or prejudice the rights, remedies and powers which the Agent or the Lenders may have, and the foreclosure, surrender, cancellation or any other dealing with any Security or the said obligations shall not release or affect the liability of the Borrower or any other Person in respect of the remaining portion of the Obligations.

 

10.06

No Further Advances

 

The Lenders shall not be obliged to make any further Advances (including honouring any cheques drawn by the Borrower which are presented for payment) from and after the earliest to occur of the following: (i) delivery by the Agent to the Borrower of a written notice that a Default or Event of Default has occurred and is continuing and that as a result thereof no further Advances will be made (regardless of whether an Acceleration Notice is issued); (ii) the occurrence of an Insolvency Event; and (iii) receipt by the Agent or any Lender of any garnishment notice, notice of a Statutory Lien or other notice of similar effect in respect of any Company pursuant to the Income Tax Act (Canada), the Excise Tax Act (Canada) or any similar notice under any other statute in effect in any jurisdiction.

 

10.07

Judgment Currency

 

If for the purposes of obtaining judgment against the Borrower in any court in any jurisdiction with respect to this Agreement it becomes necessary for a Lender to convert into the currency of such jurisdiction (in this Section called the “Judgment Currency”) any amount due to the Lender by the Borrower hereunder in any currency other than the Judgment Currency, the conversion shall be made at the Exchange Rate prevailing on the Business Day before the day on which judgment is given. In the event that there is a change in the Exchange Rate prevailing between the Business Day before the day on which the judgment is given and the date of payment of the amount due, the Borrower will, on the date of payment, pay such additional amounts (if any) or be entitled to receive reimbursement of such amount, if any, as may be necessary to ensure that the amount paid on such date is the amount in the Judgment Currency which when converted at the Exchange Rate prevailing on the date of payment is the amount then due under this Agreement in such other currency. Any additional amount due by the Borrower under this Section will be due as a separate debt and shall not be affected by judgment being obtained for any other sums due under or in respect of this Agreement.

 

10.08

Remedies Cumulative

 

All rights and remedies granted to the Agent and the Lenders in this Agreement, and any other documents or instruments in existence between the parties or contemplated hereby, and any other rights and remedies available to the Agent and the Lenders at Law or in equity, shall be cumulative. The exercise or failure to exercise any of the said remedies shall not constitute a waiver or release thereof or of any other right or remedy, and shall be non-exclusive.

 

10.09

Performance of Covenants by Agent

 

If the Borrower fails to perform any covenant or obligation to be performed by it pursuant to this Agreement, the Agent may in its sole discretion perform any of the said obligations but shall be under no obligation to do so; and any amounts expended or advanced by the Agent for such purpose shall be payable by the Borrower upon demand together with interest at the highest rate then applicable to the Facilities.

 

 

---

 

 

 

ARTICLE XI - THE AGENT AND THE LENDERS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

---

 

 

 

 

 

 

 

 

Notwithstanding any other provision of this Agreement, the Proceeds of Realization of the Security or any portion thereof shall be distributed in the following order:

 

 

pari passu basis among the Lenders to whom such Obligations are payable;

 

Funding Lenders to whom such Obligations are payable; and

 

 

 

 

 

---

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

---

 

 

 

 

 

 

 

 

 

 

 

The Agent shall:

 

 

 

 

 

 

---

 

 

 

 

 

 

 

 

 

 

 

The obligations of each Lender under this Agreement are several. The failure of any Lender to carry out its obligations hereunder shall not relieve the other Lenders of any of their respective obligations hereunder. No Lender shall be responsible for the obligations of any other Lender hereunder. Neither the entering into of this Agreement nor the completion of any transactions contemplated herein shall constitute the Lenders a partnership.

 

 

The Agent and the Lenders may share among themselves any information they may have from time to time concerning the Companies whether or not such information is confidential; but shall have no obligation to do so (except for any obligations of the Agent to provide information to the extent required in this Agreement).

 

 

The Borrower hereby acknowledges notice of the terms of the provisions of this Article XI and agrees to be bound hereby to the extent of its obligations hereunder.

 

 

The Agent and the Lenders may amend any provision in this Article XI, except Section 11.01, without prior notice to or the consent of the Borrower, and the Agent shall provide a copy of any such amendment to the Borrower reasonably promptly thereafter; provided however if any such amendment would materially adversely affect any rights, entitlements, obligations or liabilities of the Borrower, such amendment shall

 

 

---

 

 

 

not be effective until the Borrower provides its written consent thereto, such consent not to be unreasonably withheld or arbitrarily delayed.

 

 

As between the Companies on the one hand, and the Agent and the Lenders on the other hand:

 

 

 

 

 

 

 

 

 

 

---

 

 

 

against all other obligations of such Non-Funding Lender to the Agent owing pursuant to this Agreement in such amount as shall be determined from time to time by the Agent in its discretion including such Non-Funding Lender's obligation to pay its Proportionate Share of any indemnification or expense reimbursement amounts not paid by the Borrower, and (D) fourth, at the Agent's discretion, to fund from time to time such Non-Funding Lender's Proportionate Share of Advances.

 

 

 

 

ARTICLE XII - CBA MODEL PROVISIONS

 

 

The CBA Model Provisions (except for the footnotes contained therein) form part of this Agreement and are incorporated herein by reference, subject to the following variations:

 

 

 

 

 

 

 

 

 

 

---

 

 

 

13.05 of this Agreement.

 

(f)     In addition to the restrictions contained in paragraph 10(b) of the CBA Model Provisions relating to the ability of Lenders to assign their Commitments in whole or in part, if a Lender proposes to assign less than its entire Commitment, it may do so only if it retains a Commitment in a principal amount of at least five million Canadian Dollars (CDN$5,000,000).

 

 

To the extent that there is any inconsistency between a provision of this Agreement and a provision of the CBA Model Provisions, the provision of this Agreement shall govern. For greater certainty, a provision of this Agreement and a provision of the CBA Model Provisions shall be considered to be inconsistent if both relate to the same subject-matter and the provision in the CBA Model Provisions imposes more onerous obligations or restrictions than the corresponding provision in this Agreement.

 

 

ARTICLE XIII - GENERAL

 

 

The failure or delay by the Agent or any Lender in exercising any right or privilege with respect to the non- compliance with any provisions of this Agreement by the Borrower and any course of action on the part of the Agent or any Lender, shall not operate as a waiver of any rights of the Agent or such Lender unless made in writing by the Agent or such Lender. Any such waiver shall be effective only in the specific instance and for the purpose for which it is given and shall not constitute a waiver of any other rights and remedies of the Agent or such Lender with respect to any other or future non-compliance.

 

 

Whether or not the transactions contemplated by this Agreement are completed or any Advance has been made, the Borrower agrees to pay on demand by the Agent from time to time all reasonable expenses incurred by the Agent or any Lender in connection with this Agreement, the Security and all documents contemplated hereby, specifically including: reasonable expenses incurred by the Agent and the Lenders in respect of due diligence, appraisals, insurance consultations, credit reporting and responding to demands of any Governmental Authority; reasonable legal expenses incurred by the Agent and the Lenders in connection with the preparation and interpretation of this Agreement and the Security and the administration of Facility A generally, including the preparation of waivers and partial discharges of Security; and all reasonable legal expenses incurred by the Agent and the Lenders in connection with the protection and enforcement of the Security.

 

 

The Borrower hereby authorizes the Agent to debit any account maintained by the Borrower with the Agent, and to set off and compensate against any and all accounts, credits and balances maintained by the Borrower with the Agent, in order to pay (i) any interest or other amounts payable by the Borrower from time to time pursuant to this Agreement when due; and (ii) any expenses referred to in Section 13.02 which are not paid by the Borrower within thirty (30) days after receipt by the Borrower of a written request from the Agent for payment of such expenses. The Agent agrees to give written notice to the Borrower of any such debit promptly thereafter.

 

 

---

 

 

 

 

In addition to any other liability of the Borrower hereunder, the Borrower hereby agrees to indemnify and save harmless the Indemnitees from and against all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements (including reasonable legal fees) of any kind or nature whatsoever which may be imposed on, incurred by or asserted against the Indemnitees (except to the extent arising from the negligence or wilful misconduct of such Indemnitees) which relate or arise out of or result from:

 

 

 

 

 

In addition to any other liability of the Borrower hereunder, the Borrower hereby agrees to indemnify and save harmless the Indemnitees from and against:

 

 

 

 

except to the extent arising from the negligence or wilful misconduct of such Indemnitees.

 

 

The termination of this Agreement shall not relieve the Borrower from its obligations to the Agent and the Lenders arising prior to such termination, such as obligations arising as a result of or in connection with any breach of this Agreement, any failure to comply with this Agreement or the inaccuracy of any representations and warranties made or deemed to have been made prior to such termination, and obligations arising pursuant to all indemnity obligations contained herein. Without limiting the generality of the foregoing, the obligations of the Borrower to the Agent and the Lenders arising under or in connection

 

 

---

 

 

 

with Sections 13.04 and 13.05 of this Agreement and Section 3.2 of the CBA Model Provisions shall continue in full force and effect despite any termination of this Agreement.

 

 

If the Borrower fails to pay when due any amount in respect of costs or expenses incurred by the Agent or any other amount incurred by the Agent and required to be paid by it hereunder (other than principal or interest on any Advance), it shall pay interest on such unpaid amount from the time such amount is due until paid at the rate equal to the highest rate of interest then applicable under the Facilities.

 

 

Without prejudice to any other method of giving notice, all communications provided for or permitted hereunder shall be in writing and delivered to the addressee by prepaid private courier or sent by facsimile to the applicable address and to the attention of the officer of the addressee as follows:

 

 

Pure Sunfarms Corp. ▇▇▇▇ – ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇

 

Attention: President

Email: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇

 

Agent Bank Services ▇▇▇ ▇▇▇▇▇ ▇▇., ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇

▇▇▇ ▇▇▇

Attention: Manager, Agent Bank Services (re Pure Sunfarms Corp.)

Fax No: ▇▇▇-▇▇▇-▇▇▇▇

 

 

Any communication transmitted by prepaid private courier shall be deemed to have been validly and effectively given or delivered on the Business Day after which it is submitted for delivery. Any communication transmitted by facsimile shall be deemed to have been validly and effectively given or delivered on the day on which it is transmitted, if transmitted on a Business Day on or before 5:00 p.m. (local time of the intended recipient), and otherwise on the next following Business Day. Any party may change its address for service by notice given in the foregoing manner.

 

 

Any provision of this Agreement which is illegal, prohibited or unenforceable in any jurisdiction, in whole or in part, shall not invalidate the remaining provisions hereof; and any such illegality, prohibition or unenforceability in any such jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

 

---

 

 

 

 

The Borrower shall, at its expense, promptly execute and deliver or cause to be executed and delivered to the Agent upon request, acting reasonably, from time to time all such other and further documents, agreements, opinions, certificates and instruments in compliance with this Agreement, or if necessary or desirable to more fully record or evidence the obligations intended to be entered into herein, or to make any recording, file any notice or obtain any consent.

 

 

Time shall be of the essence of this Agreement.

 

 

For the purpose of promotion and marketing, the Borrower hereby authorizes and consents to the reproduction, disclosure and use by the Lenders and the Agent of its name, identifying logo and the Facilities, provided that the amount of Facilities shall not be disclosed. The Borrower acknowledges and agrees that the Lenders shall be entitled to determine, in their sole discretion, whether to use such information; that no compensation will be payable by the Lenders or the Agent in connection therewith; and that the Lenders and the Agent shall have no liability whatsoever to it or any of its employees, officers, directors, affiliates or shareholders in obtaining and using such information as contemplated herein.

 

 

 

 

 

To the extent that there is any inconsistency between a provision of this Agreement and a provision of any document constituting part of the Security, the provision of this Agreement shall govern. For greater certainty, a provision of this Agreement and a provision of the Security shall be considered to be inconsistent if both relate to the same subject-matter and the provision in the Security imposes more onerous obligations or restrictions than the corresponding provision in this Agreement.

 

 

The Agent and the Lenders agree that all documentation and other information made available by the Borrower to them under or in connection with this Agreement shall (except to the extent such documentation or other information is publicly available or hereafter becomes publicly available other than by their actions, or was theretofore known or hereinafter becomes known to them independently of any disclosure by the Companies) be held in confidence by them and used solely in the evaluation, administration and enforcement of the Advances and all matters related to this Agreement and the Security and the transactions contemplated hereby and thereby, and in the prosecution of defence of legal proceedings arising in connection herewith and therewith. Notwithstanding the foregoing, nothing contained herein shall be construed to prevent the Agent or the Lenders from (a) making disclosure of any information (i) if required to do so by Applicable Law, (ii) to any Governmental Authority having or claiming to have authority to

 

 

---

 

 

 

regulate or oversee any aspect of the business of the Agent, the Lenders or the Companies in connection with the exercise of such authority or claimed authority and that compels or requires the disclosure of such information, (iii) pursuant to any subpoena or if otherwise compelled in connection with any litigation or administrative proceeding, (iv) to any prospective participant or assignee of all or any portion of the rights and obligations or the Agent or any Lender hereunder provided that such prospective assignee executes and delivers to the Borrower a confidentiality agreement in form and substance acceptable to it, acting reasonably, or (v) to the extent that the Agent or its counsel deems necessary or appropriate, acting reasonably, to effect or preserve its Security or to enforce any remedy provided in this Agreement or the Security or otherwise available by Law; or (b) making, on a confidential basis, such disclosures as the Agent and the Lenders reasonably deem necessary or appropriate to their legal counsel, accountants or other advisers, agents or representatives (including outside auditors).

 

 

This Agreement shall be interpreted in accordance with the Laws of the Province of British Columbia. Without prejudice to the right of the Agent and the Lenders to commence any proceedings with respect to this Agreement in any other proper jurisdiction, the parties hereby attorn and submit to the jurisdiction of the courts of the Province of British Columbia.

 

 

This Agreement may be executed in several counterparts, each of which, when so executed, shall be deemed to be an original and which counterparts together shall constitute one and the same Agreement. This Agreement may be executed by facsimile or portable document format (pdf), and any signature contained hereon by facsimile or pdf shall be deemed to be equivalent to an original signature for all purposes.

 

 

This Agreement shall be binding upon and shall enure to the benefit of the parties and their respective successors and permitted assigns; “successors” includes any corporation resulting from the amalgamation of any party with any other corporation.

 

 

 

[The remainder of this page is intentionally blank. Signature page follows.]

 

 

---

 

IN WITNESS WHEREOF the parties hereto have executed this Agreement.

 

By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇

     name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇

      title: VP Finance

 

 

 

title: Associate Directortitle: Managing Director

 

FARM CREDIT CANADA, as a Lender

 

By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇

    name: ▇▇▇▇ ▇▇▇▇▇▇▇

    title: Sr Relationship Manager

 

CANADIAN IMPERIAL BANK OF COMMERCE, as a lender

 

By: /s/ ▇▇▇▇▇ ▇▇▇

    name: ▇▇▇▇▇ ▇▇▇

     Title: Authorized Signatory

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A&R Credit Agreement - signature page

 

 

 

 

 

 

 

 

 

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EXHIBIT A - LENDERS AND LENDERS' COMMITMENTS

 

 

(amounts are in Canadian Dollars)

 

 

 

 

BA Lenders

 

Bank of Montreal Non-BA Lenders

Farm Credit Canada Lenders’ Addresses

Bank of Montreal Corporate Finance

▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇

▇▇▇ ▇▇▇

 

Attention: Vice-President (re Pure Sunfarms Corp.) Fax: (▇▇▇) ▇▇▇-▇▇▇▇

 

Farm Credit Canada

Loan Administration Centre

▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇

 

Attention: Loan Administration Technician/Syndication Group Fax: ▇▇▇-▇▇▇-▇▇▇▇

 

NATDOCS\45500008\V-1

 

 

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EXHIBIT B – DRAW REQUEST

 

To:Bank of Montreal, as Administrative Agent (the "Agent")

 

This Draw Request is delivered pursuant to the amended and restated credit agreement made among Pure Sunfarms Corp. as borrower (the “Borrower”), Emerald Health Therapeutics Canada, Inc. and Village Farms International Inc. as guarantors, Bank of Montreal and certain other lenders as lenders, and Bank of Montreal as administrative agent for the lenders from time to time thereunder, dated March 30, 2020 (as amended, restated, supplemented, replaced or otherwise modified from time to time, the "Credit Agreement"). Terms used herein as defined terms shall have the respective meanings ascribed in the Credit Agreement, unless otherwise defined in herein.

 

 

 

 

 

 

 

 

schedule setting out terms requested:

 

 

 

 

 

---

 

‐ 2 ‐

 

 

Dated thisday of,.

 

 

PURE SUNFARMS CORP.

 

 

By:

Name:

Title:

 

 

---

 

EXHIBIT C – ROLLOVER NOTICE

 

 

To:Bank of Montreal, as Administrative Agent (the "Agent")

 

This Rollover Notice is delivered pursuant to the amended and restated credit agreement made among Pure Sunfarms Corp. as borrower (the “Borrower”), Emerald Health Therapeutics Canada, Inc. and Village Farms International Inc. as guarantors, Bank of Montreal and certain other lenders as lenders, and Bank of Montreal as administrative agent for the lenders from time to time thereunder, dated March 30, 2020 (as amended, restated, supplemented, replaced or otherwise modified from time to time, the "Credit Agreement"). Terms used herein as defined terms shall have the respective meanings ascribed in the Credit Agreement, unless otherwise defined herein.

 

 

 

 

 

 

 

 

 

 

 

 

---

 

‐ 2 ‐

 

 

Dated thisday of,.

 

 

PURE SUNFARMS CORP.

 

 

By:

Name:

Title:

 

 

---

 

 

 

EXHIBIT D – SUBSTITUTION NOTICE

 

To:Bank of Montreal, as Administrative Agent (the "Agent")

 

This Substitution Notice is delivered pursuant to the amended and restated credit agreement made among Pure Sunfarms Corp. as borrower (the “Borrower”), Emerald Health Therapeutics Canada, Inc. and Village Farms International Inc. as guarantors, Bank of Montreal and certain other lenders as lenders, and Bank of Montreal as administrative agent for the lenders from time to time thereunder, dated March 30, 2020 (as amended, restated, supplemented, replaced or otherwise modified from time to time, the "Credit Agreement"). Terms used herein as defined terms shall have the respective meanings ascribed in the Credit Agreement, unless otherwise defined herein.

 

 

 

 

 

 

 

 

 

 

 

 

 

---

 

‐ 2 ‐

 

 

Dated thisday of,.

 

 

PURE SUNFARMS CORP.

 

 

By:

Name:

Title:

 

 

---

 

EXHIBIT E – REPAYMENT NOTICE

 

To:Bank of Montreal, as Administrative Agent (the "Agent")

 

This Repayment Notice is delivered pursuant to the amended and restated credit agreement made among Pure Sunfarms Corp. as borrower (the “Borrower”), Emerald Health Therapeutics Canada , Inc. and Village Farms International Inc. as guarantors, Bank of Montreal and certain other lenders as lenders, and Bank of Montreal as administrative agent for the lenders from time to time thereunder, dated March 30, 2020 (as amended, restated, supplemented, replaced or otherwise modified from time to time, the "Credit Agreement"). Terms used herein as defined terms shall have the respective meanings ascribed in the Credit Agreement, unless otherwise defined herein.

 

The Borrower hereby advises that a Repayment will be made as follows:

 

 

 

 

 

 

Dated thisday of,.

 

 

 

PURE SUNFARMS CORP.

 

 

By:

Name:

Title:

 

 

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EXHIBIT F – BORROWING BASE CERTIFICATE

 

To:Bank of Montreal, as Administrative Agent (the "Agent")

 

This Borrowing Base Certificate is delivered pursuant to the amended and restated credit agreement made among Pure Sunfarms Corp. as borrower (the “Borrower”), Emerald Health Therapeutics, Inc. and Village Farms International Inc. as guarantors, Bank of Montreal and certain other lenders as lenders, and Bank of Montreal as administrative agent for the lenders from time to time thereunder, dated March 30, 2020 (as amended, restated, supplemented, replaced or otherwise modified from time to time, the "Credit Agreement"). Terms used herein as defined terms shall have the respective meanings ascribed in the Credit Agreement, unless otherwise defined herein.

 

 

 

x 85% =; plus

 

 

x 75% =; plus

 

 

 

 

 

 

 

Borrowing Base (Excess/Deficiency): $

 

 

 

 

 

---

 

‐ 2 ‐

 

 

 

 

 

 

 

 

 

Dated thisday of,.

 

 

PURE SUNFARMS CORP.

 

 

By:

Name:

Title:

 

 

---

 

EXHIBIT G – COMPLIANCE CERTIFICATE

 

To:Bank of Montreal, as Administrative Agent (the "Agent")

 

This Compliance Certificate is delivered pursuant to the amended and restated credit agreement made among Pure Sunfarms Corp. as borrower (the “Borrower”), Emerald Health Therapeutics Canada, Inc. and Village Farms International Inc. as guarantors, Bank of Montreal and certain other lenders as lenders, and Bank of Montreal as administrative agent for the lenders from time to time thereunder, dated March 30, 2020 (as amended, restated, supplemented, replaced or otherwise modified from time to time, the "Credit Agreement"). Terms used herein as defined terms shall have the respective meanings ascribed in the Credit Agreement, unless otherwise defined herein.

 

The undersigned officer of the Borrower hereby certifies on behalf of the Borrower and without personal liability as follows:

 

.

 

 

 

 

, determined as follows: (note - may not be less than 1.50 to 1)

 

EBITDA:; less

 

Cash Taxes:; less

 

Distributions paid in cash:; less

 

Capital Expenditures not financed by Permitted Funded Debt:

 

equals:; divided by Funded Debt Service:

equals:.

 

, determined as follows: (note - may not exceed 2.50 to 1)

 

Senior Funded Debt:; divided by

 

EBITDA:;

 

 

---

‐ 2 ‐

 

 

 

 

 

equals:

 

 

Unrestricted Cash:; plus

 

Facility A Available Commitment:.

 

 

 

 

---

‐ 3 ‐

 

 

 

 

 

Dated thisday of,.

 

 

 

Name:

Title:

 

 

See attachments.

 

 

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EXHIBIT H – EXCESS CASH FLOW CERTIFICATE

 

 

 

 

To:Bank of Montreal, as Administrative Agent (the "Agent")

 

This Excess Cash Flow Certificate is delivered pursuant to the amended and restated credit agreement made among Pure Sunfarms Corp. as borrower (the “Borrower”), Emerald Health Therapeutics Canada, Inc. and Village Farms International Inc. as guarantors, Bank of Montreal and certain other lenders as lenders, and Bank of Montreal as administrative agent for the lenders from time to time thereunder, dated March 30, 2020 (as amended, restated, supplemented, replaced or otherwise modified from time to time, the "Credit Agreement"). Terms used herein as defined terms shall have the respective meanings ascribed in the Credit Agreement, unless otherwise defined herein.

 

. The Excess Cash Flow for such Fiscal Year is, determined as follows:

 

 

 

 

 

; equals

 

 

 

Dated thisday of,.

 

 

 

Name:

Title:

 

 

---

EXHIBIT I – FORM OF BA EQUIVALENT NOTE

 

 

 

 

 

[insert date]

 

FOR VALUE RECEIVED, the undersigned hereby promises to pay to the order of

[name of Non-BA Lender] at its office at [insert address from Credit Agreement], the sum of

Dollars ($) in lawful money of Canada on [insert date of maturity].

 

 

Dated thisday of,.

 

 

PURE SUNFARMS CORP.

 

 

By:

Name:

Title:

 

 

---

EXHIBIT J – CBA MODEL PROVISIONS

 

 

 

 

See attached.

 

 

---

 

MODEL CREDIT AGREEMENT PROVISIONS

 

 

"Administrative Questionnaire" means an Administrative Questionnaire in a form supplied by the Administrative Agent.

 

"Affiliate" means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

 

" Agreement" means the credit agreement of which these Provisions form part.

 

"Applicable Law" means (a) any domestic or foreign statute, law (including common and civil law), treaty, code, ordinance, rule, regulation , restriction or by-law (zoning or ot her wise ); (b) any judgement, order, writ, injunction , decision, ruling, decree or award ; (c) any regulatory policy, practice, guideline or directive; or (d ) any franchise, license, qualification, authorization, consent, exemption, waiver, right, permit or other approval  of  any Governmental  Authority,  binding on or  affecting the Person referred to  in the context in which the  term is used or  binding on or  affecting the  property of such Person, in each case whether or not having the force of law.

 

" Applicable Percentage" means with respect to any Lender, the percentage of the total Commitments represented by such Lender's Commitment. If the Commitments have terminated or expired, the Applicable Percentages shall be the percentage of the total out st an ding Loans and participations in respect of Letters of Credit represented by such Lender's outstanding Loans and participations in respect of Letters of Credit.

 

" App roved Fund" means any Fund that is administered or managed by (a) a Lender,

 

" Assignment and Assumption" means an assignment and assumption entered into by a Lender and an Eligible Assignee and accepted by the Administrative Agent, in substantially the form of Exhibit A or any other form approved by the Administrative Agent.

 

" Change in Law" means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any Applicable Law, (b) any change in any Applicable Law or in the administration, interpret at ion or application thereof by any Governmental Authority or (c) the making or issuance of any Applicable Law by any Governmental Authority.

 

"Control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. "Controlling" and "Controlled" have correspond in g meanings.

 

" Default " means any event or condition that constitutes an Event of  Default or that would constitute an Event of Default except for satisfaction of any condition subsequent required to make the event or condition an Event of Default, including giving of any notice, passage of time , or both.

 

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"Eligible Assignee" means any Person (other than a natural person, any Obliger or any Affiliate of an Obliger), in respect of which any consent that is required by Section lO(b) has been obtained.

 

"Excluded Taxes" means, with respect to the Administrative Agent, any Lender, the Issuing Bank or any other recipient of any payment to be made by or on account of any obligation of an Obliger hereunder, (a) taxes imposed on or measured by its net income, and franchise taxes imposed on it (in lieu of net income taxes), 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 it  applicable lending office is located, (b) any branch profits taxes or any similar tax imposed by any jurisdiction in which the Lender is located and (c) in the case of a Foreign Lender (other than (i) an assignee pursuant to a request by the Borrower under Section 3.3(b), (ii) an assignee pursuant to an Assignment and Assumption made when an Event of Default has occurred and is continuing or (iii) any other assignee to the extent that the Borrower has expressly agreed that any wit holding tax shall be an Indemnified Tax), any withholding tax that (A) is not imposed or assessed in respect of a Loan that was made on the premise that an exemption from such withholding tax would be available where the exempt ion is subsequently determined, or alleged by a taxing authority, not to be available and (B) is required by Applicable Law to be wit hheld or paid in respect of any amount payable hereunder or under any Loan Document 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 3.2(e), except to the extent that such Foreign Lender (or it s assignor , if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from an Obliger with respect to such  withholding  tax pursuant to Section 3.2(a). For greater certainty, for purposes of item (c) above, a withholding tax includes any Tax that a Foreign Lender is required to pay pursuant to Part XIII of the Income Tax Act (Canada ) or any successor provision thereto.¹

 

" Foreign Lender" means any Lender that is  not  organized  under  the  laws  of  the jurisdict ion in which the Borrower is resident for tax purposes and that is not otherwise considered or deemed in respect of any amount payable to  it hereunder or under any Loan Document to  be resident for income tax or withholding tax purposes in the jurisdiction in which the Borrower is resident for tax purposes by application of the laws of that jurisdiction. For purposes of this definition Canada and each Province and Territory thereof shall be deemed to constitute a single jurisdiction  and the  United States of America , each State thereof and the  District of Columbia shall be deemed to  constitute a single jurisdiction.

 

" Fund" means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of cred it in the ordinary course of its business.

 

"Governmental Authority" means the government of Canada or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing,

¹   Please note that this definition of "Excluded Taxes" will result in Foreign Lenders not being grossed up for withholding taxes that exist at the time of execution and delivery of the Credit Agreement, except in the circumstances specified. If a loan is intended to be exempt from withholding tax as a "5/25" structure or otherwise, this premise should be specified in the Credit Agreement .

 

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regulatory or administrative powers or functions of or pertaining to government, including any supra-national bodies such as the European Union or the European Central Bank and including a Minister of the Crown, Superintendent of Financial Institutions or other comparable authority or agency.

 

" Indemnified Taxes" means Taxes other than Excluded Taxes.

 

"Issuing Bank" means the Person named elsewhere in this Agreement ² as the issuer of Letters of Credit on the basis that it is "fronting" for other Lenders and not on the basis that it is the attorney of other Lenders to sign Letters of Credit on their behalf, or any successor issuer of Letters of Credit. For greater certainty, where the context requires, references to " Lenders" in these Provisions include the Issuing Bank.

 

"Loan" means any extension of credit by a Lender under this Agreement, including by way of bankers' acceptance or LIBOR Rate Loan, except for any Letter of Credit or  participation in a Letter of Credit.

 

"Obligors" means, collectively, the Borrower and each of the guarantors of the Borrower's obligations that are identified elsewhere in this Agreement.

 

" Ot her Taxes" means all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or under any other Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document.

 

"Participant" has the meaning assigned to such term in Section l0(d) .

 

"Person" means any natural person, corporation, limit ed liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

 

"Provisions" means these model credit agreement provisions.

 

"Related Parties" means, with respect to any Person, such Person's Affiliates and the directors, officers, employees, agents and advisors of such Person and of such Person's Affiliates.

 

"Taxes" means all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any Government al Authority, including any interest, additions to tax or penalties applicable thereto.

 

 

(1)The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words "include", "includes" and "including" shall be deemed to be followed by the phrase "without limitation". The word "will" shall be construed to have the same meaning and effect as the word "shall". Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein (including this Agreement) shall be construed as referring to such agreement, instrument or other document as from time to time

² Ensure that the Credit Agreement identifies the Issuing Bank or indicates that there is none.

 

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amended, supplemented, restated or otherwise modified (subject to any restrictions on such amendments, supplements, restatements  or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person's successors and permitted assigns, (c) 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, (d) unless otherwise expressly stated, all references in these Provisions to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, these Provisions, but all such references elsewhere in this Agreement shall be construed to refer to this Agreement apart from these Provisions, (e) any reference to  any law or regulation herein shall, unless otherwise specified, refer to such law  or  regulation  as  amended,  modified  or  supplemented  from  time  to  time  and (f) the  words " asset " and "property'' shall be construed to have the  same meaning and effect and to  refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

 

(2)If there is any conflict or inconsistency between these Provisions and the other terms of this Agreement, the other terms of this Agreement shall govern to the extent necessary to resolve the conflict or inconsistency.

 

 

 

 

(i)impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender;

 

(ii)subject any Lender to any Tax of any kind whatsoever with respect to this Agreement, any Letter of Credit, any participation in a Letter of Credit or any Loan made by it, or change the basis of taxation of payments to such Lender in respect thereof, except for Indemnified Taxes or Other Taxes covered by Section 3.2 and the imposition, or any change in the rate, of any Excluded Tax payable by such Lender; or

 

(iii)impose on any Lender or any applicable interbank market any other condition, cost or expense affecting this Agreement or Loans made by such Lender or any Letter of Credit or participation therein;

 

and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Loan (or of maintaining its obligation to make any such Loan), or to increase the cost to such Lender or the Issuing Bank of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to  participate in or to  issue any Letter of Credit), or to  reduce the  amount of any sum received or receivable by such Lender or the Issuing Bank hereunder (whether of principal, interest or any other amount), then upon request of such Lender the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender for such additional costs incurred or reduction suffered.

 

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(b)Capital Requirements. If any Lender  determines that any Change in Law affecting such Lender or any lending office of such Len der or such Lender's holding company, if any, regarding capital requirements has or  would have the  effect of reducing the rate of return on such Lender's capital or on the capital of such Lender's holding company, if any, as a consequence of this Agreement, the Commitments of such Lender or the Loans made by, or the Letters of Credit issued or participated in by such Lender, to a level below that which such Lender or its holding company could have achieved but for such Change in Law (taking into consideration such Lender's policies and the policies of its holding company with respect to capital adequacy), then from time to time the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender or its holding company for any such reduction suffered.

 

{c) Certificates for Reimbursement. A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender or its holding company, as the case may be, as specified in paragraph (a) or {b) of this Section, including reasonable detail of the basis of calculation of the amount or amounts, and delivered to the Borrower shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.

 

{d) Delay in Requests. Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender's right to demand such compensation, except that the Borrower shall not be required to compensate a Lender pursuant to this Section for any increased costs incurred or reductions suffered more than nine months prior to the date that such Lender notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender' s intent ion to claim compensation therefore, unless the Change in Law giving rise to such increased costs or reductions is retroactive, in which case the nine-month period referred to above shall be extended to include the period of retroactive effect thereof.

 

 

{a) Payments Subject to Taxes. If any Obliger , the Administrative Agent, or any Lender is required by Applicable Law to deduct or pay any Indemnified Taxes (including any Other Taxes) in respect of any payment by or on account of any obligation of an Obliger hereunder or under any other Loan Document , then {i) the sum payable shall be increased by that Obliger when payable as necessary so that after making or allowing for all required deduct ions and payments {including deductions and payments applicable to additional sums payable under this Section) the Administrative Agent or Lender, as the case may be, receives an amount equal to the sum it would have received had no such deductions or payments been required , (ii) the Obliger shall make any such deductions required to be made by it under Applicable Law and (iii) the  Obliger shall timely pay the  full amount required to  be deducted to the relevant Governmental Authority in accordance with Applicable Law .

 

{b) Payment of Other Taxes by the Borrower. Without limiting the prov1s1ons of paragraph {a) above, the Borrower shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with Applicable Law.

 

{c) Indemnification by the Borrower . The Borrower shall indemnify the Administrative Agent and each Lender, within 10 days after demand therefor, for the full amount of any Indemnified Taxes or Other Taxes {including Indemnified Taxes or Other Taxes imposed   or asserted on or attributable to amounts payable under this Section) paid by the Administrative Agent or such Lender and any

 

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penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

 

(d)Evidence of Payments. As soon as practicable after any payment of Indemnified Taxes or Other Taxes by an Obligor to a Governmental Authority , the Obligor shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence  of  such payment reasonably satisfactory to the Administrative Agent.

 

(e)Status of Lenders. Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which the Borrower is resident for tax purposes, or any treaty to which such jurisdiction is a party, with respect to payments hereunder or under any other Loan Document shall, at the request of the Borrower, deliver to the Borrower (with a copy to the Administrative Agent), at the time or times prescribed by Applicable Law or reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation prescribed by Applicable Law as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, (a) any Lender, if requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by Applicable Law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to withholding or information reporting requirements, and (b) any Lender that ceases to be, or to be deemed to be, resident in Canada for purposes of Part XIII of the Income Tax Act (Canada) or any successor provision thereto shall within five days thereof notify the Borrower and t he Administrative Agent in writing.

 

(f)Treatment of Certain Refunds and Tax Reductions. If the Administrative Agent or a Lender determines, in its sole discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrower or with respect to which an Obligor has paid additional amounts pursuant to this Sect ion or that , because of the payment of such Taxes or Other Taxes, it has benefited from a reduction in Excluded Taxes otherwise payable by it, it shall pay to the Borrower or Obligor, as applicable, an amount equal to such refund or reduction (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower or Obligor under this Sect ion with respect to the Taxes or Other Taxes giving rise to such refund or reduction) , net of all out-of-pocket expenses of the Administrative Agent or such Lender , as the case may be, and without interest (other than any net after-Tax interest paid by the relevant Governmental Authority with respect to  such  refund). The Borrower or Obligor as applicable, upon the request of the Administrative Agent or such Lender, agrees to repay the amount paid over to the Borrower or Obligor (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender if the Administrative Agent or such Lender   is   required to   repay   such   refund   or   reduction   to   such Government al Authority. This paragraph shall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or any other information relating to its taxes that it deems confidential) to the Borrower or any other Person, to arrange its affairs in any particular manner or to claim any available refund or reduction.

(d)

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(a)Designation of a Different Lending Office. If any Lender requests compensation under Section 3.1, or requires the Borrower to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.2 , then such Lender  shall use reasonable efforts to designate a different  lending office for  funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 3.1 or 3.2 , as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

 

(b)Replacement of Lend ers.³ If any Lender requests compensation under Section 3.1, if the  Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.2, if any Lender's obligations are suspended pursuant to Section 3.4 or if  any Lender  defaults in its obligation to  fund Loans hereunder , then the Borrower  may, at its sole expense and effort, upon 10 days' notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 10), all of its interests, rights and obligations under this Agreement and the related Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that:

 

(i)the Borrower pays the Administrative Agent the assignment fee specified in Section l0(b)(vi);

 

(ii)the assigning Lender receives payment of an amount equal to the outstanding principal of its Loans and participations in disbursements under Letters of Credit, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any breakage costs and amounts required to be paid under this Agreement  as a result of prepayment to a Lender) from the assignee (to the extent of such outstanding principal and accrued interest  and fees) or  the  Borrower  (in the case of all other amounts);

 

(iii)in the case of any such assignment resulting from a claim for compensation under Section 3.1 or payments required to be made pursuant to Section 3.2, such assignment will result in a reduction in such compensation or payments thereafter; and

 

 

A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.

 

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If any Lender determines that any Applicable Law has made it unlawful, or that any

Government al Authority has asserted that it is un lawful , for any Lender or its applicable ▇▇▇ ▇▇▇▇ Office to make or maintain any Loan (or to maintain its obligation to make any Loan ), or to participate in, issue or maintain any Letter of Credit (or to maintain its obligation to participate in or to issue any Letter of Credit ), or to determine or charge interest rates based upon any particular rate, t hen, on notice t hereof by such Lender to the Borrower through the Administrative Agent , any obligation of such Lender with respect to the activity that is unlawful shall be suspended until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, the Borrower shall, upon demand from such Lender (with a copy to the Administrative Agent), prepay or, if conversion would avoid the activity that is unlawful, convert any Loans, or take any necessary steps with respect to any Letter of Credit in order to avoid the activity that is un lawful. Upon any such prepayment or conversion, the Borrower shall also pay accrued interest on the amount so prepaid or converted. Each Lender agrees to designate a different Lending Office if such designation will avoid the need for such notice and will not, in the good faith judgment of such Lender, otherwise be materially disadvantageous to such Lender.

 

 

If the Required Lenders determine that for any reason a market for bankers' acceptances does not exist at any time or the Lenders cannot for other reasons, after reasonable efforts, readily sell bankers' acceptances or perform their other obligations under this Agreement with respect to bankers' acceptances, the Administrative Agent will promptly so notify the Borrower and each Lender.

Thereafter, the Borrower 's right to request the acceptance of bankers ' acceptances shall be and remain suspended until the Required Lenders determine and the Agent notifies the Borrower and each Lender that the condition causing such determination no longer exists. If the Required Lenders determine that for any reason adequate and reasonable means do not exist for determining the LIBOR Rate for any requested Interest Period with respect to a proposed LIBOR Rate Loan, or that the LIBOR Rate for any requested Interest Period with respect to a proposed LIBOR Rate Loan does not adequately and fairly reflect the cost to such Lenders of funding such Loan, the Administrative Agent will promptly so notify the Borrower and each Lender. Thereafter, the obligation of the Lenders to make or maintain LIBOR Rate Loans shall be suspended until the Administrative Agent (upon the instruct ion of the Required Lenders) revokes such notice. Upon receipt of such notice, the Borrower may revoke any pending request for a borrowing, con version or continuation of LIBOR Rate Loans or, failing that, will be deemed to have converted such request into a request for a borrowing of Base Rate Loans in the amount specified t herein.

 

 

If an Event of Default has occurred and is continuing, each of the Lenders and each of their respective Affiliates is hereby authorized at any time and from time to time to  set off  and apply any and all deposit s (general or special, time or demand, pro visional or final, in whatever currency) at any time held and ot her obligations (in whatever currency) at any time owing by such Lender or any such Affiliate to or for the credit or the account of any Obliger against any and all of the obligations of  the  Borrower now or hereafter existing under this Agreement  or any other Loan Document to such Lender , irrespective of whether or not such Lender has made any demand under this Agreement or any other Loan Document and although such obligations of t he Obliger may be contingent or unmatured or are

 

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owed to a branch or office of such Lender different from the branch or office holding such deposit or obligated on such indebtedness. The rights of each the Lenders and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff, consolidation of accounts and bankers' lien) that the Lenders or their respective Affiliates may have. Each Lender agrees to promptly notify the Borrower and the Administrative Agent after any such setoff and application, but   the failure to give such notice shall not affect the validity of such setoff and application. If any Affiliate of a Lender exercises any rights under this Section 4, it shall share the benefit received in accordance with Section 5 as if the benefit had been received by the Lender of which it is an Affiliate.

 

 

If any Lender, by exercising any right of setoff or counterclaim or otherwise, obtains any payment or other reduction that might result in such Lender receiving payment or other reduction of a proportion of the aggregate amount of its Loans and accrued interest thereon or other obligations hereunder greater than its pro rata share thereof as provided herein, then the Lender receiving such payment or other reduction shall (a) notify the Administrative Agent of such fact, and (b) purchase (for cash at face value) participations in the Loans and such other obligations of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders rateably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and other amounts owing them, provided that

 

(i)if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest,

 

(ii)the provisions of this Section shall not  be construed to apply to  (x) any payment made by any Obliger pursuant to and in accordance  with the express terms of this Agreement or (y) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or  participations in disbursements  under Letters of  Credit to  any assignee or participant, other than to any Obliger or any Affiliate of an Obliger (as to which the provisions of this Section shall apply); and

 

(iii)the provisions of this Section shall not be construed to apply to (w) any payment made while no Event of Default has occurred and is continuing in respect of obligations of the Borrower to  such Lender that do not  arise under or in connection with the Loan Documents, (x) any payment made in respect of an obligation that is secured by a Permitted Lien or that is otherwise entitled to priority over the Borrower 's obligations under or in connection with the Loan Document s, (y) any reduction arising from an amount owing to an Obliger upon the termination of derivatives entered into between the Obliger and such Lender, or (z) any payment to which such Lender is entitled as a result of any form of credit protection obtained by such Lender.

 

⁴ Those preparing Credit Agreements should consider whether this exclusion of   proceeds of derivatives is appropriate in the particular circumstances of the Credit Agreement.   It may be appropriate to provide for sharing of, for example, any net amount available after the termination of all derivatives entered into.

 

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The Obligors consent to the foregoing and agree, to the extent they may effectively do so under Applicable Law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against each Obliger rights of setoff and counterclaim and similar rights of Lenders with respect to such participation as fully as if such Lender were a direct creditor of each Obligor in the amount of such participation.

 

 

(a)Fund ing by Lenders; Presumption by Administrative Agent. Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any advance of funds that such Lender will not make available to the  Administrative Agent such Lender's share of  such advance, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with the provisions of this Agreement concerning funding by Lenders and may, in reliance upon such assumption, make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable advance available to the Administrative Agent, then the applicable Lender shall pay to the Administrative Agent forthwith on  demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the  date of payment to the  Administrative Agent, at a rate determined by the Administrative Agent in accordance with prevailing banking industry practice on interbank compensation. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender's Loan included in such advance. If the Lender does not do so forthwith, the Borrower shall pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon at the interest rate applicable to the advance in question. Any payment by the Borrower shall be without prejudice to any claim the Borrower may have against a Lender that has failed to make such payment to the Administrative Agent.

 

(b)Payments by Borrower; Presumptions by Administrative Agent. Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of any Lender hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute the amount due to the Lenders. In such event, if the Borrower has not in fact made such payment, then each of the Lenders severally agrees to repay to the  Administrative Agent forthwith on demand the amount so distributed to  such Lender with interest thereon, for  each day from and including the  date such amount is distributed to it to but excluding the  date of payment to  the  Administrative Agent, at  a rate determined by the Administrative Agent in accordance with prevailing banking industry practice on interbank compensation.

 

 

between the Obligors and a Lender and the setoff of resulting amounts owing by the Obligors and to the Obl igors if there is more than one such derivative.

⁵Ensure that the Credit Agreement identifies the Administrative Agent for the purpose of this reference

 

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are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Article are solely for the benefit of the Administrative Agent, the Lenders and the Issuing Bank, and no Obliger shall have right s as a third party beneficiary of any of such provisions.

 

7.2Rights as a Lender. The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent and the term "Lender" or "Lenders" shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, act as t he financial advisor or in any other advisory capacity for and generally engage in any kind of business with any Obliger or any Affiliate thereof as if such Person were not the Administrative Agent and without any duty to account to the Lenders.

 

 

 

{a) shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;

 

{b)     shall not   have any duty to take any discretionary act ion or   exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for in the Loan Documents ), but the   Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel , may expose the Administrative Agent to liability or that is contrary to any Loan Document or Applicable Law; and

 

{c)         shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Affiliates that is communicated to or obtained by the person serving as the Administrative Agent or any of its Affiliates in any capacity.

 

{i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as is necessary, or as the Administrative Agent believes in good faith is necessary, under the provisions of the Loan Documents) or (ii) in the absence of its own gross negligence or wilfulmisconduct. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing the Default is given to the Administrative Agent by the Borrower or a Lender.

 

 

 

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(iv)the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document or (v) the satisfaction of any condition specified in this Agreement, other than to confirm receipt of it ems expressly required to be delivered to the Administrative Agent.

 

statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with  any  condition hereunder to the making of a Loan , or the issuance of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or the Issuing Bank, the Administrative Agent may presume that such condition is satisfactory to such Lender or the Issuing Ban k unless the Administrative Agent shall have received notice to the contrary from such Len der or the Issuing Bank prior to the making of such Loan or the issuance of such Letter of Cred it . The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

 

 

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(1)The Administrative Agent may at any time give notice of its resignation to the Lenders, the Issuing Bank and the Borrower. Upon receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation with the Borrower, to appoint a successor, which shall be a Lender having a Commitment to a revolving credit if one or more is established in this Agreement and having an office in Toronto, Ontario or Montreal, Quebec, or an Affiliate of any such Lender with an office in Toronto or Montreal. The Administrative Agent may also be removed at any time by the Required Lenders upon 30 days' notice to the Administrative Agent and the Borrower as long as the Required Lenders, in consultation with the Borrower, appoint and obtain the acceptance of a successor within such 30 days, which shall be a Lender having a Commitment to a revolving credit if one or more is established in this Agreement and having an office in Toronto or Montreal, or an Affiliate of any such Lender with an office in Toronto or Montreal.

 

(2)If no such successor shall have been so appointed by the Required Lenders and shall have accepted such  appointment  within 30 days  after  the  retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may on behalf of the Lenders, appoint a successor Administrative Agent meeting the qualifications specified in Section 7.7(1), provided that if the Administrative Agent shall notify the Borrower and the Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (1) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder  and under the other Loan Documents  (except that in the case of  any collateral security held by the Administrative Agent on behalf of the Lenders under any of the Loan Documents, the retiring Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent  is appointed)  and (2) all  payments, communications and  determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender directly, until such time as the  Required Lenders appoint a successor  Administrative Agent as provided for above in the preceding paragraph.

 

(3)Upon a successor's appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the former Administrative Agent, and the former Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided in the preceding paragraph). The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the termination of the service of the former Administrative Agent, the provisions of this Section 7 and of Section 9 shall continue in effect for the benefit of such former Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the former Administrative Agent was acting as Administrative Agent.

 

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taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

 

7.9Collective Action of the Lenders. Each of the Lenders hereby acknowledges that to the extent permitted by Applicable Law, any collateral security and the remedies provided under the Loan Documents to the Lenders are for the benefit of the Lenders collectively and acting together and not severally and further acknowledges that its rights hereunder and under any collateral security are to be exercised not severally, but by the Administrative Agent upon the decision of the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for in the Loan Documents). Accordingly, notwithstanding any of the provisions contained herein or in any collateral security, each of the Lenders hereby covenants and agrees that it shall not be entitled to take any action hereunder or thereunder including, without limitation, any  declaration  of  default  hereunder or thereunder but that any such action  shall  be taken  only  by the  Administrative Agent  with the prior written agreement of the Required Lenders (or such other number or percentage of the  Lenders as shall be expressly provided for in the Loan Documents). Each of the Lenders hereby further covenants and agrees that upon any such written agreement being given, it shall co-operate fully with the Administrative Agent to the extent requested by the Administrative Agent. Notwithstanding the foregoing, in the absence of instructions from the Lenders and where in the sole opinion of the Administrative Agent, acting reasonably and in good faith, the exigencies of the situation warrant such action, the Administrative Agent may without notice to or consent of the Lenders take such action on behalf of the Lenders as it deems appropriate or desirable in the interest of the Lenders.

 

 

 

(a)Notices Generally. Except in the case of notices and other communications expressly permitted to be given by telephone (and except as-provided in paragraph (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopier to the addresses or telecopier numbers specified elsewhere in this Agreement7 or, if to a Lender, to it at its address or telecopier number specified in the Register or, if to an Obliger other than the Borrower, in care of the Borrower.

 

Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by telecopier shall be deemed to have been given when sent (except that, if not given on a business day between 9:00 a.m. and 5:00 p.m. local time where the recipient is located, shall be deemed to have been given at 9:00 a.m. on the next business day for the recipient). Notices delivered through electronic communications to the extent provided in paragraph (b) below, shall be effective as provided in said paragraph (b).

 

(b)Electronic Communications. Notices and other communications to the Lenders and the Issuing Bank hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative

⁷Ensure that the Credit Agreement contains the contact information referred to.

 

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Agent, ⁸ provided that the foregoing shall not apply to notices to any Lender of Loans to be made or Letters of Credit to be issued if such Lender has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication. The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications.

 

Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender' s receipt of an acknowledgement from the intended recipient (such as by the "return receipt requested" function, as available, return e-mail or other written acknowledgement), provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient, and {ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt  by the  intended recipient  at its e-mail  address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor.

 

{c) Change of Address. Etc. Any party hereto may change its address or telecopier number for notices and other communications hereunder by notice to the other parties hereto.

 

 

{a) Costs and Expenses. The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates, including the reasonable fees, charges and disbursements of counsel for the Administrative Agent, in connection with the syndication of the credit facilities provided for herein, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers  of  the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket  expenses  incurred by the  Issuing Bank in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and {iii) all reasonable out -of -pocket expenses incurred by the Administrative Agent, any Lender or the Issuing Bank, including the reasonable fees, charges and disbursements of counsel, in connection with the enforcement  or protection of its rights in connection  with this Agreement  and the other Loan Documents, including its rights under this Section, or in connection with the Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred  during  any workout, restructuring or negotiations in respect of such Loans or Letters of Credit.

 

{b) Indemnification by the Borrower. The Borrower shall indemnify the Administrative Agent (and any sub-agent thereof), each Lender and the Issuing Bank, and each Related Party of any of the foregoing Persons (each such Person being called an "indemnitee") against, and hold  each indemnitee harmless from, any and all losses, claims, damages, liabilities and  related  expenses, including the fees, charges and disbursements of any counsel for any indemnitee, incurred by any indemnitee or asserted against any indemnitee by any third party or by any Obligor arising out of, in

 

⁹A reference to this Section should be included in the Survival Section, if any, of the Credit Agreement.

 

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connection with, or as a result of (i) the execution or delivery of this Agreement, any other  Loan Document or any agreement or instrument contemplated hereby or thereby, the performance or non-performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation  or non-consummation of the transactions  contemplated hereby  or thereby, (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by the Issuing Bank to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or Release of Hazardous Materials on or from any property owned or operated by any Obligor, or any Environmental Liability related in any way to any Obligor, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by an Obligor and regardless of  whether  any lndemnitee  is a party thereto, provided that such indemnity  shall not, as to any lndemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or wilful misconduct of such lndemnitee or (y) result from a claim brought by the Borrower or any other Obliger against an lndemnitee for breach in bad faith of such lndemnitee's  obligations  hereunder  or under any other Loan Document, if the Obliger has obtained a final and nonappealable judgment in its favour on such claim as determined by a court of competent jurisdiction, nor shall it be available in respect of matters specifically addressed in Sections 3.1, 3.2 and 9(a).

 

(c)Reimbursement by Lenders. To the extent that the Borrower for any reason fails to indefeasibly pay any amount required under paragraph (a) or (b) of this Section to be paid by it to the Administrative Agent (or any sub-agent thereof), the Issuing Bank or any Related Party of any of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent), the Issuing Bank or such Related Party, as the case may be, such Lender's Applicable Percentage (determined as of  the  time that the applicable unreimbursed  expense or  indemnity payment  is sought) of such unpaid amount, provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent) or the Issuing Bank in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent) or Issuing Bank in connection with such capacity. The obligations of the Lenders under this paragraph (c) are subject to the other provisions of this Agreement concerning several liability of the Lenders.

 

(d)Waiver of Consequential Damages. Etc. To the fullest extent permitted by Applicable Law, the Obligors shall not assert, and hereby waive, any claim against any lndemnitee, on any theory of liability, for indirect, consequential, punitive, aggravated or exemplary damages (as opposed to direct damages) arising out of, in connection with, or as a result of,  this Agreement, any other Loan Document or any agreement or instrument contemplated hereby (or any breach thereof), the transactions contemplated hereby or thereby, any Loan or Letter of Credit or the use of the proceeds thereof. No lndemnitee shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby.

 

(e)Payments. All amounts due under this Section shall be payable promptly after demand therefor. A certificate of the Administrative Agent or a Lender setting forth the amount or amounts owing to the Administrative Agent, Lender or a sub-agent or Related Party, as the case may be,

(a)

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as specified in this Section, including reasonable detail of the basis of calculation of the amount or amounts, and delivered to the Borrower shall be conclusive absent manifest error.

 

 

(a)Successors and Assigns Generally. The provisions of this Agreement shall be binding upon and inure to the benefit of  the  parties  hereto  and  their  respective  successors  and  assigns permit ▇▇▇ hereby, except that no Obliger may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of  the  Administrative  Agent  and each  Lender  and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an Eligible Assignee in accordance with the provisions of paragraph (b) of this Section, (ii) by way of participation in accordance with the provisions of paragraph (d) of this Section, or (iii) by way of pledge or assignment of a security interest subject to the restrictions of paragraph (f) of this Section (and any other attempted assignment  or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in paragraph (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders)  any legal or  equitable  right, remedy  or claim under or by reason of this Agreement.

 

(b)Assignments by Lenders. Any Lender may at any time assign to one or more Eligible Assignees all or  a portion of its rights and obligations  under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it); provided that:

 

(i)except if an Event of Default has occurred and is continuing or in the case of an assignment of the entire remaining amount of the assigning Lender's Commitment and the Loans at the time owing to it or in the case  of  an assignment to a Lender or an Affiliate of a Lender or an Approved Fund with respect to a Lender, the aggregate amount of the Commitment being assigned (which for this purpose includes Loans outstanding thereunder) or, if the applicable Commitment  is not  then in effect, the  principal outstanding  balance of the Loan of the assigning Lender subject to each  such  assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if "Trade  Date"  is specified in the Assignment and Assumption, as of the Trade Date) shall not be less than $5,000,000, in the case of any assignment in respect of a revolving facility, or $1,000,000, in the case of any assignment in respect of a term facility, unless each of the Administrative Agent and, so long as no Default has occurred and is continuing, the Borrower  otherwise consent to  a lower  amount  (each such consent not to be unreasonably withheld or delayed);

 

(ii)each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender's rights and obligations under this Agreement with respect to the Loan or the Commitment assigned, except that this clause (ii) shall not prohibit any Lender from assigning all or a portion of its rights and obligations among separate credits on a non-pro rata basis;

(i)

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{iii) any assignment of a Commitment relating to a credit under which Letters of Credit may be issued must be approved by any Issuing Bank (such app roval not to be unreasonably withheld or delayed) unless the Person that is the proposed assignee is itself already a Lender with a Commitment under that credit;

 

(iv) any assignment must be approved by the Administrative Agent

{such approval not to be unreasonably withheld or delayed) unless:

 

{x) in the case of an assignment of a Commitment relating to a revolving credit, the proposed assignee is itself already a Lender with the same type of Commitment,

 

{y) no Event of Default has occurred and is continuing, and the assignment is of a Commitment relating to a non-revolving credit that is fully advanced, or

 

{z) the proposed assignee is a bank whose senior, unsecured, non-credit enhanced, long term debt is rated at least A3, A- or A low by at least two of ▇▇▇▇▇'▇ Investor Services Inc., Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. and Dominion Bond Rating Service Limited, respectively;

 

{v) any assignment must be approved by the Borrower (such approval not to be unreasonably withheld or delayed) unless the proposed assignee is itself already a Lender with the same type of Commitment or a Default has occurred and is continuing; and

 

{vi) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee in an amount specified elsewhere in this Agreement ¹⁰ and the Eligible Assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.

 

Subject to acceptance and recording thereof  by the  Administrative Agent  pursuant  to paragraph {c) of this Section, from and after the effective date specified in each Assignment and Assumption, the Eligible Assignee thereunder  shall be a party to this Agreement and, to  the  extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement  and the  other Loan Documents, including any collateral security, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender's rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 3 and 9, and shall continue to be liable for any breach of this Agreement by such Lender, with respect to facts and circumstances occurring prior to the effective date of such assignment. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by such Lender of a participation in

¹⁰ Ensure that the Credit Agreement specifies the amount of this fee.

 

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such rights and obligations in accordance with paragraph (d) of this Section.  Any payment by an assignee to an assigning Lender in connection with an assignment or transfer shall not be or be deemed to be a repayment by the Borrower or a new Loan to the Borrower.

 

(c)Register. The Administrative Agent shall maintain at one of its offices in Toro nto , Ontario or Montreal, Quebec a copy of each Assignment  and Assumption  delivered to  it  and a register for the recordation of the names and addresses of the Lenders , and the Commitments of, and principal amounts of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the "Register"). The entries in the Register shall be conclusive, absent manifest error, and the Borrower, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

 

(d)Participations. Any Lender may at anytime, without the consent of, or notice to, the Borrower or the Administrative Agent, sell participations to any Person (other than a natural person, an Obliger or any Affiliate of an Obligor ¹¹) (each, a "Participant") in all or a portion of such Lender's rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans owing to it); provided that (i) such Lender's obligations under this Agreement shall remain unchanged,

(ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Administrative Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement. Any payment by a Participant to  a Lender in connection with a sale of  a participation shall not be or be deemed to be a repayment by the Borrower or a new Loan to the Borrower.

 

Subject to paragraph (e) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Section 3 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 4 as though it were a Lender, provided such Participant agrees to be subject to Section 5 as though it were a Lender.

 

(e)Limitations upon Participant Rights. A Participant shall not be entitled to receive any greater payment under Section 3.1 and 3.2 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower's prior written consent.  A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 3.2 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 3.2(e) as though it were a Lender.

 

(f)Certain Pledges.   Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, but no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

 

 

 

 

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(a)Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the Province specified elsewhere in this Agree ment¹² and the laws of Canada applicable in that Province.

 

(b)Submission to Jurisdiction. Each Obliger irrevocably and unconditionally submits, for itself  and its property, to the nonexclusive jurisdiction  of the courts of the Province specified elsewhere in this Agreement,  and any appellate court from any t hereof,  in  any action or proceeding arising out  of or relating to this Agreement or any other Loan Document, or for recognition or enforcement of any judgment, and each of the  parties hereto irrevocably  and unconditionally agrees  that  all claims in respect of any such action or proceeding may be heard and determined in such court.   Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or in any other Loan Document shall affect any right that the Administrative Agent or any Lender may otherwise have to bring any act ion or proceeding relating to this Agreement or any other Loan Document against any Obligor or its properties in the courts of any jurisdiction.

 

(c)Waiver of Venue. Each Obliger irrevocably and unconditionally waives, to the fullest extent permitted by Applicable Law, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by Applicable Law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

 

 

EACH PARTY HERETO HEREBY IRREVO CABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRA NSA CTIONS CONTEM PLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVEN T OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATI ONS IN THIS SECTION.

 

 

(a)Counterparts: Integration: Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and the other Loan Documents and any separate letter agreements with respect to fees payable to the Administrative Agent constitute the entire contract among the parties relating to the subject matter

 

 

 

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hereof and supersede   any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in the conditions precedent Section(s) of this Agreement, this Agreement shall become effective when it has been executed by the Administrative Agent and when the Administrative Agent has received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement by telecopy or by sending a scanned copy by electronic mail shall be effective as delivery of a manually executed counterpart of this Agreement.

 

(b)Electronic Execution of Assignments. The words "execution,"  "signed," "signature," and words of like import in any Assignment and Assumption shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any Applicable Law, including Parts 2 and 3 of the Personal Information Protection and Electronic Documents Act (Canada ), the Electronic Commerce Act, 2000 (Ontario) and other similar federal or provincial laws based on the Uniform Electronic Commerce Act of the Uniform Law Conference of Canada or its Uniform Electronic Evidence Act , as the case may be.

 

 

(b) to the extent requested by any regulatory authority purporting to have jurisdiction over it  (including any self-regulatory authority), (c) to the extent required by Applicable Laws or regulations or by any subpoena or similar legal process, (d ) to any other party hereto, (e) in connect ion with the exercise of any remedies hereunder or under any other Loan Document or any act ion or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or t hereunder,

 

(2)For purposes of this Section, "Information " means all information received   in connect ion with this Agreement from any Obligor relating to any Obligor or any of its Subsidiaries or any of their respective businesses, other than any such information that is available to the Administrative Agent or any Lender on a non-confidential basis prior to such receipt. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have comp lied with its obligation   to   do so if   such Person has exercised the   same degree of   care to   maintain the confidentiality of such Information as such Person would accord to its own confidential information. In add it ion, the Administrative Agent may disclose to any agency or organization that assigns standard identification numbers to loan facilities such basic information describing the facilities provided hereunder as is necessary to assign unique identifiers (and, if requested, supply a copy of this

(1)

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Agreement), it being understood that the Person to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to make available to the public only such Information   as such person normally makes available in the course   of its business of   assigning identification numbers

 

{3)In add it ion, and not withstanding anything herein to the contrary, the Administrative Agent may provide the information described on Exhibit B concerning the Borrower and the credit facilities established herein to Loan Pricing Corporation and/or other recognized trade publishers of information for general circulation in the loan market.

 

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EX HIBIT A

 

ASSIGNMENT AND ASSUMPTION

 

This Assignment and Assumption (the " Assignment and Assumption") is dated as of the Effective Date set forth below and is entered into by and between [Insert name of Assignor] (the "Assignor") and [Insert name of Assignee] (the "Assignee" ). Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (as amended, the " Cr edit Agreement"), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Cond it ions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set fort h herein in full.

 

For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor , subject to and in accordance with the Standard Terms and ▇▇▇▇▇▇ ions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignor's rights and obligations in its capacity as a Lender  under  the  Cred it  Agreement  and  any  other  documents  or instrument s delivered pursuant  thereto to  the extent  related to  the  amount  and percentage  interest identified below of all of such outstanding rights and obligations of the Assignor under the respective facilities identified below (including without limitation any letters of cred it, guarantees, and swing line loans included in such facilities) and (ii) to the extent permitted to be assigned under Applicable Law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a Len der) against any Person, whether known or unknown, arising under or in connection with the  Credit  Agreement,  any other documents or instruments  delivered pursuant thereto or the loan-transactions  governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above being referred to herein collectively as, the "Assigned Interest" ). Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor.

 

 

[and is an Affiliate/ Approved Fund of [ identify Lender ]1]

 

 

 

 

 

¹Select as appl icable.

 

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[7.Trade Date:⁵

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

⁴Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder.

 

24

 

 

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Effective Date:_, 20_[TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREF OR. ]

 

 

 

The terms set forth in this Assignment and Assumption are hereby agreed to:

 

 

 

ASSIIGNOR

 

[NAME OF ASSIGNOR]

 

 

 

By:

Title:

 

 

 

 

 

ASSIIGNEE

 

[NAME OF ASSIGNEE]

 

 

 

By:

Title:

 

 

 

[Consented to and) ⁶ Accepted:

 

 

 

[NAME OF ADM INISTRA TIVE AGENT], as

 

Administrative Agent

 

 

 

By

 

⁶To be added only if the consent of the Administrative Agent is req uired by the terms of the Credit Agreement.

 

25

 

 

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Tit le:

 

 

 

[Consented to:]7

 

 

 

[NAME OF RELEVANT PARTY]

 

 

 

By

Tit le:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

26

 

 

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ANNEX 1 to Assignment and Assumption

 

1

 

 

STANDARD TERMS AND CONDITIONS FOR ASSIGNMENT AND ASSUMPTION

 

 

,

 

Assignor. The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document ²

 

,

 

(v) if it  is a Foreign Lend er³  attached to the Assignment and Assumption is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it  will, independently  and without reliance on the  Administrative Agent , the Assignor or any other Lender , and based on such documents and information as it shall deem appropriate at the  time, continue to  make its own  credit decisions in taking or not  taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.

 

16.Payments. From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and

¹Describe Credit Agreement at option of Administrative Agent.

²The term "Loan Document" should be conformed to the term used in the Credit Agreement.

 

27

 

 

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other amounts) to the Assignee whether such amounts have accrued prior to, on or after the Effective Date. The Assignor and the Assignee shall make all appropriate adjustments in payments by the Administrative Agent for periods prior to the Effective Date or with respect to the making of this assignment directly between themselves.

 

17 . General Provisions. This Assignment and Assumption shall be binding upon, and inure to the benefit of, the pa1iies hereto and their respective successors and permitted assigns. This Assignment and Assumption may be executed in any number of counterpart s, which together shall constitute one instrument. Delive1y of an executed counte1pa1i of a signature page of this Assignment and Assumption by telecopy or by sending a scanned copy by electronic mail shall be effective as delive1y of a manually executed counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed by, and construed in accordance with, the law governing the Credit Agreement.

 

28

 

 

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EXHIBIT B

 

LOAN MARKET DATA TEMPLATE

 

 

 

Recommended Data Fields - At Close

 

The items highlighted in bold are those that Loan Pricing Corporation {LPC) deem essential. The remaining items are those that LPC has seen become more prominent over time as transparency has increased in the U.S. Loan Market.

 

 

 

 

 

 

 

 

29

 

 

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29

 

 

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Committed/ Uncommitted Distribution method Amortization Schedule

Borrowing Base/Advance Rates New Money Amount

Country of Syndication

Facility Rating (Loss given default )

S&P Bank Loan ▇▇▇▇▇'▇ Bank Loan Fitch Bank Loan DBRS

Other Ratings

 

* These it ems would be considered useful to capture from an analytical perspective [_]

 

30

 

 

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Prior names and corporate predecessors

 

1121371 B.C. Ltd.

 

Pure Sunfarms Canada Corp. 1174076 B.C. Ltd.

Governing jurisdiction

 

British Columbia

 

Prior governing jurisdictions

 

N/A

 

Registered office

 

25th Floor, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇, ▇▇▇ ▇▇▇ Principal place of business

▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇, ▇▇▇ ▇▇▇ Medical Cannabis Qualified Jurisdictions

Canada

 

Non-Medical Cannabis Qualified Jurisdictions

 

Canada

 

Other jurisdictions of places of business and assets

 

None

 

Number and classes of issued and outstanding shares

 

41793|5216285_3

 

 

---

- 2 -

 

 

 

 

Guarantors

 

 

Prior names and corporate predecessors

 

T-Bird Pharma Inc. Firebird Energy Inc.

Firebird Capital Partners Inc. Governing jurisdiction

British Columbia

 

Prior governing jurisdictions

 

N/A

 

Registered office

 

Suite 2500 – ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇ Principal place of business

210 – ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇ Medical Cannabis Qualified Jurisdictions

Canada

 

Non-Medical Cannabis Qualified Jurisdictions

 

Canada

 

Other jurisdictions of places of business and assets

 

None

 

Number and classes of issued and outstanding shares

 

 

---

- 3 -

 

 

 

 

 

Prior names and corporate predecessors

 

Village Farms Canada Inc. Hot House Growers Inc.

Agro Power Development, Inc. Village Farms Income Fund Governing jurisdiction

Federal

 

Prior governing jurisdictions

 

N/A

 

Head office

 

▇▇▇▇ ▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇ Principal place of business

▇▇▇▇ ▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇ Medical Cannabis Qualified Jurisdictions

Canada

 

Non-Medical Cannabis Qualified Jurisdictions

 

Canada

 

Other jurisdictions of places of business and assets

 

Florida Texas

Number and classes of issued and outstanding shares

 

 

---

 

SCHEDULE 6.01(h) MATERIAL PERMITS

Health Canada License – License Number LIC-8OR129OHJQ-2018

 

 

---

SCHEDULE 6.01(i)

 

SPECIFIC PERMITTED LIENS

 

None.

 

 

 

 

 

---

SCHEDULE 6.01(m)

 

INTELLECTUAL PROPERTY

 

None.

 

 

 

 

 

---

SCHEDULE 6.01(o)

 

MATERIAL AGREEMENTS

 

 

 

 

 

 

 

 

---

SCHEDULE 6.01(p)

 

LABOUR AGREEMENTS

 

 

 

 

None.

 

 

---

SCHEDULE 6.01(q)

 

ENVIRONMENTAL MATTERS

 

 

 

 

None.

 

 

---

SCHEDULE 6.01(r)

 

LITIGATION

 

None.

 

 

 

 

 

---

SCHEDULE 6.01(s)

 

PENSION PLANS

 

None.