CREDIT AGREEMENT Dated the 10th day of April, 2019

Loan Parties

Credit Facilities

Existing Credit Facilities Details

Credit Facility Details

Loan number

Principal amount

Credit Facility type

Interest rate type

Product type

Term

Amortization period

Interest rate (subject to Interest Rate Guarantee provisions below)

Interest Rate Guarantee Expiry Date

Loan Approval Expiry Date

Maturity Date

New Credit Facilities Details (Credit Facility [***])

Credit Facility Details

Loan number

Principal amount

Credit Facility type

Interest rate type

Product type

Term

Amortization period

Interest rate

Loan Approval Expiry Date

Maturity Date

First Payment type details

Payment frequency

May 31, 2019

July 2, 2019

July 31, 2019

September 3, 2019

Second Payment type details

Payment frequency

Payment amount

Maturity Date

Payee Details

Payee Name

Purpose

Amount

$2,970,000.00

(less solicitor fees of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP)

Schedules

Schedule A – Standard Terms and Conditions

Schedule B – Loan Specific Features

Schedule C – Definitions

Schedule D – Compliance Certificate

Schedule E – Pre-Authorized Payment Authority

Schedule F – Payment Schedule Calculation

Security

Guarantees

An unlimited guarantee executed on October 24th, 2018 by 2011296 Alberta Inc. in favour of FCC for all obligations owed to FCC by the Borrower.

An unlimited guarantee executed on October 24th, 2018 by Kamcan Products Inc. in favour of FCC for all obligations owed to FCC by the Borrower.

An unlimited guarantee executed on October 24th, 2018 by Sprout Technologies Inc. in favour of FCC for all obligations owed to FCC by the Borrower.

Real Property Security

New continuing collateral mortgage (the “New Continuing Collateral Mortgage”) provided by the Borrower to be registered in the amount of $10,500,000 against the following lands:

Plan 7410409 Block 6 (▇▇▇.▇▇ 24-27-2-5);

Plan 1710892 ▇▇▇▇▇ ▇ ▇▇▇ ▇▇ (▇▇ ▇▇-▇▇-▇-▇); and

Plan 1511656 Block 1 Lot 4 (NE 29-32-1-5) (the “Property”)

Release and discharge of the existing mortgage in the amount of $7,000,000 registered on 2018-05-11 as registration number: 181 237 833 given by the Borrower and registered against the Property, upon receiving proof of registration of the New Continuing Collateral Mortgage specified in 3.2(a).

Personal Property Security

New security agreement from the Borrower granting FCC a second security interest in IPO Proceeds up to $10,500,000.00.

A general security agreement from the Borrower granting FCC a third security interest in all present and after acquired personal property, registered on 2018-09-12 as registration number: [***] (as such registration may be amended, replaced, restated, renewed, supplemented, from time to time).

A general security agreement from Kamcan Products Inc. granting FCC a third security interest in all present and after acquired personal property, registered on 2018-09-12 as registration number: [***] (as such registration may be amended, replaced, restated, renewed, supplemented, from time to time).

A general security agreement from 2011296 Alberta Inc. granting FCC a third security interest in all present and after acquired personal property, registered on 2018-09-12 as registration number: [***] and registration number: [***] (as each such registration may be amended, replaced, restated, renewed, supplemented, from time to time).

A general security agreement from Sprout Technologies Inc. granting FCC a third security interest in all present and after acquired personal property, registered on 2018-09-12 as registration number: [***] (as such registration may be amended, replaced, restated, renewed, supplemented, from time to time).

Inter-Creditor Arrangements

New intercreditor agreement among FCC, the Loan Parties, ATB, BMO, and 2082033 acknowledging FCCs priority position over the IPO Proceeds.

Cross Collateralization

Financial Statements and Other Information

Until the Outstanding Obligations are repaid in full and FCC no longer has any obligation under this Agreement or any other credit or loan agreement with FCC, the Borrower will deliver to FCC:

Confirmation that the Borrower maintains good standing of its license under the Access to Cannabis for Medical Purposes Regulations of the Controlled Drugs and Substances Act and shall provide to FCC a confirmation on an annual basis of the renewal of its license within 30 days of renewal. The Borrower shall comply with the Controlled Drugs and Substances Act and the Access to Cannabis for Medical Purposes Regulations. If at any time the Borrower’s license under the above Act should cease to be valid, FCC must be notified immediately.

Quarterly ‘in-house’ financial statements for the Borrower within 60 days of the end of each quarter.

Confirmation that ATB lending requirements (specifically covenants) have been met and immediate notification to be provided to FCC of any covenant breach (within 7 days of occurrence).

A Compliance Certificate, in form and substance satisfactory to FCC (substantially in the form set forth in Schedule D attached hereto), within 120 days after the end of each fiscal year reporting period, or at any time upon the request of FCC, confirming the Borrower is in compliance with all covenants and conditions of the Loan Documents together with an explanation if there is any non-compliance.

Such other financial statements or financial reporting for any of the Loan Parties as FCC may reasonably request.

FCC has collected accountant prepared financial statements.

Fees

The Borrower must pay FCC the following non-refundable fees:

Processing Fee. A non-refundable loan processing fee in the amount of $20,000.00, which shall be fully earned by FCC and payable by the Borrower on the Closing Date. Such fee will be retained by FCC from the initial Advance under this Agreement.

Reporting and Monitoring Default Fee. If the Borrower breaches a reporting or monitoring covenant, FCC shall assess a default fee of $1,000.00 per breach.

Annual Review and Non-Compliance Risk Adjustment Fee. If the Borrower breaches a financial covenant under this Agreement, FCC will assess a risk adjustment fee equal to 0.25% of the principal amount of all Credit Facilities outstanding as at the end of the Financial Year in which the covenant was breached. This fee will be added to the Outstanding Obligations

Governing Law

This Agreement is governed by and will be interpreted in accordance with the laws of the Province of Alberta and the laws of Canada applicable in that province. The Loan Parties irrevocably submit to the non-exclusive jurisdiction of the courts in such province.

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Conditions Precedent

General Conditions Precedent to the Initial Advance on New Credit Facilities

Loan Documents. This Agreement and all other Loan Documents have been executed and delivered to FCC.

Registration and Perfection. All Security Documents have been registered, recorded, filed or perfected in all applicable jurisdictions.

Certificates, Resolutions and Legal Opinions. FCC shall be provided with:

A copy of the constating documents, by-laws, shareholders agreements and partnership agreements, as applicable, of each Loan Party and a copy of the resolutions of the board of directors of each Loan Party authorizing the execution, delivery and performance of this Agreement and the other Loan Documents certified by a senior officer of the Loan Party;

A certificate of incumbency for each Loan Party showing the names, offices and specimen signatures of the officers authorized to execute this Agreement and the other Loan Documents; and

Such legal opinions from counsel to the Loan Parties addressed to FCC covering matters relating to the Loan Parties, this Agreement and the other Loan Documents as FCC may require.

Inter-creditor Arrangements. All subordination and postponement agreements and inter-creditor agreements from other secured creditors of the Loan Parties as required in this Agreement and as FCC may be required to achieve the intended priority of its security and registrations, have been duly executed and unconditionally delivered by all parties thereto.

Good Standing. Each of the Loan Parties is in possession of, and in good standing or compliance with, all necessary permits, licenses, authorizations and other approvals required to legally undertake and carry on its business in each of the provinces where it carries on business.

Due Diligence. FCC has completed and is satisfied with the results of its financial, business, accounting, tax, environmental, legal and other due diligence with respect to the Loan Parties, including the search results of all personal property, litigation, judgment, bankruptcy, bulk sale, execution and other searches conducted with respect to the Loan Parties in all applicable jurisdictions.

Payment of Fees. FCC has received (or will receive from the initial Advance) full payment of all fees, expenses and other amounts due and payable to FCC, including all legal fees and disbursements of FCC’s legal counsel.

Repayments of Indebtedness and Discharge of Liens. All Indebtedness owing to any creditor by any Loan Party as determined by FCC has been repaid in full on the applicable Closing Date other than Permitted Indebtedness. All Liens held by any creditor charging any Collateral has been discharged, or where applicable, partially discharged, other than Permitted Liens.

Title Insurance; Title Opinion. In respect of the New Continuing Collateral Mortgage, FCC has received either: (i) a commitment to title insure from a reputable title insurer confirming that a lender’s title insurance policy is in effect in such amounts and with such endorsements as required by FCC, or (ii) a title opinion from the Loan Party’s legal counsel.

Certificate of Insurance; Adequacy of Coverage.

A certificate of insurance in respect of all policies of insurance maintained by the Loan Parties confirming compliance with all insurance requirements under this Agreement; and

Written confirmation from the Borrower’s insurance broker addressed to FCC confirming the adequacy of insurance coverage for the Core Business.

Pre-Authorized Payments. A completed pre-authorized payment authorization in the form set forth in Schedule E.

Other Documents. Such other documents and agreements as are customary in transactions of this type or as FCC may reasonably request.

Conditions Precedent to All Advances

Initial Conditions Precedent. All initial conditions precedent in section 1.1 above remain satisfied and in full force and effect.

Notice of Borrowing. A duly executed notice of borrowing in respect of the requested Advance.

Representations and Warranties. The representations and warranties of the Loan Parties in each of the Loan Documents are true and correct in all material respects as if made on and as of each such date (unless specifically made as of a certain date).

Loan Documents. All Loan Documents are in full force and effect.

No Default. No Default or Event of Default has occurred and is continuing or would result after giving effect to the Advance.

No Material Adverse Change. No material adverse change has occurred since the date of the most recent Compliance Certificate or other financial reporting delivered by the Borrower to FCC. A material adverse change means any event, development, circumstance or situation that has had or could have a Material Adverse Effect.

Priority Payables. There are no overdue payments owed by any Loan Party to any third party.

Bring-Down Certificate. A bring-down certificate in form and substance satisfactory to FCC executed by a senior officer of the Borrower on the applicable Advance date confirming that all of the terms and conditions set out in this Section are true and correct as of the date of the Advance.

Consents and Approvals. All necessary approvals, clearances and consents from any Governmental Authority or other Person necessary to complete the transactions contemplated by the Loan Documents have been obtained by the Loan Parties.

Environmental Assessment. FCC has completed and is satisfied with its environmental risk assessment process, including if requested by FCC or required by Applicable Laws, a Phase 1 or 2 environmental report.

Title Search and other Due Diligence Searches. FCC has conducted a title search of the Property and confirmed that there are no Liens registered on title to the Property, and has conducted such other due diligence searches as it deems necessary or appropriate to confirm the absence of Liens.

Waiver of Conditions Precedent

Repayment, Prepayment and Maturity

Undisbursed Funds

Proof of Debt

Repayment

Direct Payment of IPO Proceeds

Payment Regardless if IPO Proceeds Delayed

Payment on Termination

Time and Place of Payment

Payments to be Made on Business Days

Manner of Payment; No Set Off / Right of Compensation

Payment Adjustment

Pre-authorized payments

Voluntary Prepayments

Prepayment Privileges

Extensions

Interest Rates, Fees and Costs

Interest Rates

Interest will accrue on the principal amount outstanding of each Advance during each monthly interest period;

Interest on each Advance shall be calculated on the daily outstanding balance of such Advance commencing on and including the day on which the Advance is made and ending on, but excluding, the day on which the interest is paid; and

Interest will be payable monthly, in arrears, on the first Business Day of each month at the variable rate of interest per annum specified, and calculated in the manner set out in this Agreement.

Interest Act

Unless otherwise specified, all annual rates of interest referred to in this Agreement are based on a calendar year of 365 or 366 days, as the case may be. Where a rate of interest under this Agreement is calculated on the basis of a year (the “Deemed Year”) which contains fewer days than the actual number of days in the calendar year of calculation, that rate of interest will be expressed as a yearly rate for the purposes of the Interest Act (Canada) by multiplying that rate of interest by the actual number of days in the calendar year of calculation and dividing it by the number of days in the Deemed Year.

For purposes of the Interest Act (Canada), the principle of deemed reinvestment of interest will not apply to any interest rate calculation under this Agreement, and the rates of interest stipulated in this Agreement are intended to be nominal rates and not effective rates or yields.

Maximum Interest Rate

In the event that any provision of this Agreement would oblige the Borrower to make any payment of interest or any other payment which is construed by a court of competent jurisdiction to be interest in an amount or calculated at a rate which would be prohibited by law or would result in a receipt by FCC of interest at a criminal rate (as such terms are construed under the Criminal Code (Canada)), then notwithstanding such provision, such amount or rate shall be deemed to have been adjusted to the maximum amount or rate of interest as would not be so prohibited by law or so result in a receipt by FCC of interest at a criminal rate, such adjustment to be effected, to the extent necessary, as follows:

firstly, by reducing the amount or rate of interest required to be paid under this Agreement; and

thereafter, by reducing any fees, commissions, premiums and other amounts which would constitute interest for the purposes of Section 347 of the Criminal Code (Canada).

Legal Fees and Expenses

Interest Rate Guarantee

Interest Calculations and Compounding Period

Convertibility

“Conversion Fee” means the fee payable by the Borrower to FCC, in an amount determined by FCC, to convert the Loan to a different type of product.

An Open Variable Real Property Loan may be converted, at any time, upon payment of the Conversion Fee, to any other available mortgage product offered by FCC.

A Variable Mortgage Rate Loan may be converted, at any time, upon payment of the Conversion Fee, to any mortgage product offered by FCC, except the Open Variable mortgage product.

Covenants of the Loan Parties

Affirmative Covenants

Payment of Principal, Interest and Expenses. Pay to FCC the Outstanding Obligations at the times and places and in the manner provided for in this Agreement.

Use of Funds. Use the proceeds of the Loans solely for agricultural purposes including the uses set out in this Agreement with respect to the initial Advance and thereafter only for the Core Business, the Borrower’s working capital and Permitted Acquisitions.

Maintenance of Property. To keep the Property in good condition and not to do anything that lowers the value of the Property. If the Borrower does not maintain the Property in good condition, the Borrower agrees that FCC may enter and take any action reasonably considered necessary to restore the Property. Any cost of taking such action may be added to the Credit Facilities.

Books, Records and Financial Statements. Maintain a system of accounting established and administered in accordance with the Accounting Standards, consistently applied and in accordance with sound business practices.

Access and Information.

Discuss and review with FCC and its representatives any matters directly relevant to this Agreement and the business of the Loan Parties or their properties;

Permit representatives of FCC to visit, inspect and have access to their properties and assets with reasonable prior notice; and

Permit, with reasonable prior notice, FCC and its representatives to examine and copy all of their books and records.

Notices. Promptly notify FCC of:

any event which constitutes a Default or Event of Default and the steps being taken to remedy the same;

any notice of expropriation of any Collateral;

any claim, proceeding or litigation in respect of any Loan Party that has a Material Adverse Effect on the business operation or assets of a Loan Party, whether or not any such claim, proceeding or litigation is covered by insurance;

any official notice of any violation, non compliance or claim made by any Governmental Authority that has a Material Adverse Effect on: (A) the operations of a Loan Party, or (B) any part of the Collateral of any Loan Party;

any Lien other than a Permitted Lien registered against any Collateral;

any environmental matter against or with respect to the activities or operations of any Loan Party;

any event, development or condition which may have a Material Adverse Effect; and

any material adverse change in the condition or nature of the Core Business of a Loan Party.

Corporate Status and Qualification. Maintain its existence in good standing and obtain and maintain all licences, permits and contracts necessary to conduct its business.

Business Conduct. Continuously conduct the Core Business in a proper and efficient manner, (ii) maintain its properties and assets in good working order and condition, and (iii) maintain, protect and preserve title to its assets and properties.

Compliance with Laws. Comply with all Applicable Laws and orders of any Governmental Authority, including the procurement of all required permits and licenses, which shall include without limitation the procurement of all applicable business, building, expansion, operating and other permits and licenses, and further including intensive livestock operation permits and compliance with all plans associated with such permit and agreements relating to such permit and the operations of the Borrower’s livestock operations.

Further Assurances. Cure promptly any defects in the execution and delivery of the Loan Documents, and promptly execute and deliver to FCC all such other and further documents or agreements as FCC may reasonably request.

Taxes. Pay all Taxes lawfully levied, assessed or imposed upon it or in respect of its Property as and when the same becomes due and payable, and provide evidence of such payment to FCC.

Insurance.

The Borrower shall maintain or cause to be maintained with reputable insurers, over the insurable collateral, coverage against risks of loss or damage to its properties, assets and business (including, but not limited to, fire and extended perils, public liability, and damage to property of third parties) of such types as are customary in the case of persons with established reputation engaged in the same or similar businesses, to the full replacement value of such properties and assets, such policies (except third-party liability insurance) to contain standard mortgage/hypothec clauses or other mortgage/hypothec clauses satisfactory to FCC and shall,

Each insurance policy and insurance company shall be approved by FCC. Each insurance policy must require that 15 days advance written notice shall be given to FCC in the event of any cancellation or material adverse change to the policy. As further security, the Borrower hereby assigns all insurance proceeds to FCC.

All Insurance set forth above shall be in an amount not less than the greater of (A) the Credit Facilities, and (B) the full replacement value of the Borrower’s properties and assets, or an amount acceptable to FCC per occurrence.

All Insurance, other than those in respect of assets as FCC may in writing agree to exclude, shall be assigned to and endorsed in favour of FCC as first mortgagee and as first loss payee. FCC shall be named as an additional insured in respect of all liability policies and such policies shall contain cross liability and severability of interest provisions.

FCC shall be designated as beneficiary on the course of construction insurance and property insurance in amounts and on terms acceptable to FCC.

All Insurance (except third-party liability insurance) shall contain standard mortgage/hypothec clauses or other mortgage/hypothec clauses satisfactory to FCC.

All Insurance shall oblige the insurer to provide at least 30 days prior notice to FCC of any changes to the Insurance and that the Insurance may not be cancelled without at least 30 days prior notice being given by the insurer to FCC.

If any Loan Party defaults in so insuring its real or personal property and assets as are required under this Section to be insured or, in so delivering the certificates or policies of Insurance within the time period required under this Agreement, FCC may, at its option, immediately effect and pay the premiums for such Insurance and the Borrower shall reimburse FCC for any premiums so paid with interest thereon at the then highest interest rate payable in respect of any Loan made under this Agreement.

As soon as practicable following the happening of any loss or damage in respect of any Loan Party’s real or personal property and assets subject to any Insurance, the Borrower shall, at its expense, furnish all necessary proof and do all necessary acts to enable the Person entitled to receipt of the proceeds of such insurance pursuant to this Section to obtain payment thereof.

All policies of Insurance will, where applicable, contain a release of any subrogation rights which any Loan Party’s insurers may have against FCC or those for whom any of them are in law responsible.

Each Loan Party agrees that it shall provide FCC with i) a broker’s certificate confirming the Insurance prior to the Closing Date and ii) a certified copy of each policy of Insurance as soon as practical but no later than 60 days from the Closing Date.

Environmental Compliance.

Use and operate all of its facilities and properties in compliance with all Environmental Laws;

Immediately notify FCC and provide copies upon receipt of any written claim, complaint, notice or inquiry relating to the release of contaminants at any facility or property which would result in a Loan Party being in material non-compliance with any Environmental Law. A contaminant are any pollutants, waste, hazardous substances or other like substances or material that is regulated by any Environmental Law;

Maintain a reserve on its books for environmental liabilities in accordance with Accounting Standards; and

Provide such information and certifications which FCC may reasonably request from time to time to evidence compliance with this Section.

Observance of Agreements. Observe, perform and enforce in a timely fashion all of its contractual obligations and rights.

Additional Subsidiaries; Additional Liens. If, at any time after the Closing Date, any Loan Party directly or indirectly creates or acquires an additional Subsidiary, the Loan Party will, or will cause such new Subsidiary, to execute and deliver to FCC within 30 days of such creation or acquisition, a guarantee, security agreements (creating a first priority Lien against all property, assets and undertaking of such Subsidiary in favour of FCC), and other agreements, instruments, documents, certificates, resolutions and legal opinions similar in type, scope and form as those delivered by the Loan Parties pursuant this Agreement and satisfactory to FCC.

Material Commercial Leases. Obtain FCC’s prior written consent to enter into, modify in any material respect, or renew, extend or terminate any lease (excluding any lease where the Loan Party is the tenant) for premises of more than 10,000 square feet for a term (inclusive of all renewal and extension options, whether or not exercised) of 5 years or more which form part of the Collateral.

Release Information. The Borrower must authorize FCC to obtain credit or other information about the Borrower, and the Collateral from, and to allow FCC to, during the term of the Credit Facilities, exchange such information with:

any financial institution, credit reporting agency, rating agency, credit bureau, Governmental Authority; and

anyone with whom the Borrower may have or propose to have financial dealings.

Negative Covenants

No Amalgamation or Merger. Not enter into any amalgamation, merger, or other transactions whereby all or substantially all of its undertaking, properties, rights or assets would become the property of any other Person.

Indebtedness. Create, assume or permit to exist any Indebtedness except for Permitted Indebtedness.

No Liens. Create, assume, incur or permit to exist any Lien in or upon any of its property or assets except for Permitted Liens.

No Guarantees. Be or become liable for any obligation of any other Person by Guarantee except for any Guarantee which constitutes Permitted Indebtedness.

No Non-Arm’s Length. Enter into any consulting agreement or contract with a shareholder or other non-arm’s length party or entity unless on prevailing market rates and the Borrower discloses all such related party contracts and expenses annually as part of the annual review documentation.

Limitation on Investments and Loans. Make or permit to exist, directly or indirectly, any Investment or any other interest in any other Person except: (i) Investments in cash equivalents, (ii) Investments which constitute Permitted Acquisitions, and (iii) any loans, advances or other forms of Indebtedness to any Person other than Permitted Indebtedness.

any direct or indirect purchase or other acquisition by the investor of Equity Securities of any other Person that does not otherwise constitute an Acquisition;

any direct or indirect loan or capital contribution by the investor to any other Person; or

any direct or indirect purchase or other acquisition of bonds, notes, debentures or other debt securities of, any other Person.

Limitation on Acquisitions. Make any Acquisition other than a Permitted Acquisition.

Limitation on Sale of Assets. Effect a sale of assets, including Quota Transfer, except for a Permitted Sale of Assets. A Permitted Sale of Assets must be sold or leased for at least fair market value and if proceeds are not used within six (6) months to acquire other assets for Core Business, proceeds will be applied to reduce the Outstanding Obligations.

Change of Jurisdiction or Chief Executive Office; Relocation of Assets.

Change the jurisdiction of organization or move its registered office, principal place of business or chief executive office outside of the jurisdiction in which it was located as at the Closing Date or the date of its acquisition or creation; and

Maintain Collateral having a value in excess of $100,000 in the aggregate other than as disclosed in this Agreement as at the Closing Date.

Organizational Documents.

Change its corporate name, or

Amend its articles of incorporation, partnership agreement, shareholders agreement or similar document without the prior written consent of FCC.

Change of Control. Change of control of a Loan Party being any one of the following:

the acquisition by any Person of Equity Securities representing 50% or more of the voting power represented by the issued and outstanding Equity Securities of any Loan Party;

the Borrower ceases to own, directly or indirectly, all of the issued and outstanding Equity Securities of any other Loan Party; or

there is any change in the composition of the officers or directors of any Loan Party from those (i) in existence as at the Closing Date, or (ii) Persons which have been approved in writing by FCC from time to time after the Closing Date.

Restricted Payments. Declare, pay or make, or permit the declaration, payment or making of, any Restricted Payment, except each Loan Party may make Restricted Payments:

with respect to (A) employment remuneration to employees, officers or directors in the ordinary course, and (B) reimburse reasonable out-of-pocket costs and expenses incurred by such employees, officers or directors in the ordinary course of carrying out their duties; and

regular scheduled payments of interest in respect of Subordinated Debt provided that, at the time of and immediately after making a Restricted Payment, (A) no Default or Event of Default has occurred; and (B) the Borrower is in compliance with the financial covenants set out in this Agreement,

Financial Year; Accounting Changes. Change its Financial Year end, or (ii) accounting treatment or reporting practices, except as required by the Accounting Standards or any Applicable Law.

Change of Business: Materially change the Core Business of any one of the Loan Parties.

Transactions with Affiliates. Purchase or lease any property from, or sell or lease any property to, or enter into any other transactions with, any officer, director, agent or other Person affiliated with or related to such Loan Party, except in the ordinary course of, and under the reasonable requirements of, the Loan Party’s business, and upon fair and reasonable terms no less favourable to the Loan Party than they would obtain in a comparable arm’s length transaction with an unaffiliated Person.

Sales and Leasebacks. Enter into any sale/leaseback transaction, which is any arrangement with any Person (other than a Loan Party) providing for the leasing by any Loan Party of property which has been or is to be sold or transferred by any Loan Party to such other Person.

Repayment of Indebtedness. Repay, prepay or otherwise make any payment on account of any Indebtedness except for: (i) Indebtedness under this Agreement, or (ii) Permitted Indebtedness.

Drawings and Withdraws. The Borrower shall not permit drawings and withdrawals by way of shareholder loan reductions, dividends, salaries, bonuses, or any other withdrawals to exceed net income after repayment of current portion of long term debt, including principal portion of capital lease payments, unless compliance with financial covenants set out in the loan contract are maintained.

Demand and Acceleration

Events of Default.

Failure to Pay Principal. Failure to pay when due any principal amount of the Outstanding Obligations and such failure continues for a period of three (3) Business Days.

Failure to Pay Interest or Fees. Failure to pay any other Outstanding Obligations when due and such failure continues for a period of five (5) Business Days.

Sale of Property. If the Borrower sells any property, with a value in excess of $100,000.00, or any Guarantor sells any such property pledged as security for a guarantee, without FCC’s written consent, except in the ordinary course of business.

Builder’s Lien. A builders, construction, commercial, mechanic or similar Lien is registered against the Borrower’s property secured by this Agreement, other than those that are contested in good faith.

Construction Required. Failure to complete or proceed with any construction required by this Agreement in a continuous and commercially reasonable manner and according to proper building standards.

False Representations. If any representation or warranty made in any Loan Document is false or materially incorrect, or lacking in any material facts, at the time that it is made or given.

Covenant Defaults. Failure to observe or perform any of the terms, conditions or covenants under this Agreement or contained in any other Loan Document, and, if such failure is capable of being remedied it continues unremedied for a period of 30 Business Days following the earlier of (i) the date upon which a senior officer of any Loan Party becomes aware of any such failure, and (ii) the date that FCC delivers notice of such failure to the Borrower.

Default to Other Creditors. Default under the terms of any credit facility with any other financial institution.

Cross-Default with FCC. Default under any other credit facility, loan or security agreement with FCC and such default continues for ten (10) Business Days.

Insolvency. If any Loan Party becomes insolvent, dies, its business ceases to be carried out as a going concern, an order is made or it passes a resolution authorizing its winding-up, dissolution or liquidation, or it assigns its assets for the benefit of its creditors or enters (voluntarily or involuntary) any bankruptcy or reorganization proceeding, and if such proceeding is involuntary it is not stayed within 60 days or having been instituted against the Loan Party.

Receivership. If any person or entity other than FCC takes possession of any of the secured property (whether by appointment of a receiver, receiver and manager or otherwise) or takes any steps to repossess or sell the secured property.

Adverse Judgments. If one or more judgments for the payment of money in a cumulative amount in excess of $100,000 is rendered against any one or more of the Loan Parties which remains undischarged for 60 days from its date.

Execution, Distress. If any writ of execution or any other similar process becomes enforceable against any Loan Party or its properties or assets having a fair market value in excess of $100,000, except where the same is being contested and the enforcement or levy has been stayed.

Change of Control. If there is a change of control, which is the occurrence of any one of the following:

the acquisition by any Person of Equity Securities representing 50% or more of the voting power represented by the issued and outstanding Equity Securities of any Loan Party;

the Borrower ceases to own, directly or indirectly, all of the issued and outstanding Equity Securities of any other Loan Party; or

there is any material change in the composition of the officers or directors of any Loan Party from those (i) in existence as at the Closing Date, or (ii) Persons which have been approved in writing by FCC from time to time after the Closing Date.

No Prospect of Repayment. FCC in good faith and upon commercially reasonable grounds, believes that the prospect of repayment of the Loans or performance of the Borrower’s obligations under this Agreement is or is about to be impaired or any of the secured property is or is about to be in jeopardy.

Cease to Carry On Business. Any one of the Loan Parties ceases to carry on business or threatens to do so.

Registration of Subsequent Interest. A mortgage, hypothec, security interest or any other interest, right or charge affecting the Property is registered against the Property without FCC’s prior approval not to be unreasonably withheld.

Termination or Unenforceability of Security Documents. If any of the Loan Parties terminate any of the Security Documents or any of the Security Documents become unenforceable or any charge does not rank in priority as expected.

Notice of Default. The Borrower hereby agrees to promptly notify FCC of an Event of Default occurring, and no later than thirty (30) days from the date that the Default occurred.

Rights and Remedies

Prior to and after the occurrence of an Event of Default, FCC or a Receiver shall have, in addition to the rights specifically provided in this Agreement:

the rights of a secured party under the Personal Property Security Act; and

the rights that FCC shall be entitled to as the lender, as recognized at law and in equity.

Upon the occurrence of an Event of Default, and for so long as it is continuing, FCC may take any or all of the following actions:

declare all Outstanding Obligations to be immediately due and payable without presentment, demand, protest or other notice of any kind;

declare the Credit Facilities to be terminated, whereupon the same shall terminate immediately and FCC shall have no further obligation to make any Advances available to the Borrower under any of the Credit Facilities;

realize upon the Liens constituted by the Security Documents and exercise any rights under any of the Loan Documents;

appoint by instrument in writing or apply to a court for the appointment of one or more Receivers of any or all of the property, assets and undertaking of any Loan Party or any or all of the Collateral;

exercise any other action, suit, remedy or proceeding authorized or permitted by the Loan Documents or by law or by equity upon an Event of Default occurring;

the obligation of FCC to make any further Advances available to the Borrower shall automatically be terminated;

all Outstanding Obligations will automatically become due and payable; and

the Security Documents will become immediately enforceable, subject to the terms and conditions of the Security Documents and Applicable Law, and FCC may realize upon the Security Documents.

Application of Proceeds After Default

Non-Merger

Deficiency

FCC not Liable

Remedies Cumulative

Representations and Warranties

Representations and Warranties

Due Incorporation. Each Loan Party is duly incorporated or formed under the laws of its jurisdiction, and has all necessary corporate power and authority to own its properties and assets and to carry on its business as now conducted by it.

Corporate Power; Authorization. Each Loan Party has the power and authority to enter into and perform its obligations under the Loan Documents to which it is a party and the execution, delivery and performance of such Loan Documents has been duly authorized by all necessary action of such Loan Party.

Licenses. Each Loan Party holds all necessary licenses, permits, registrations, and approvals (i) to own its properties and assets, (ii) for the conduct and operation of the Core Business and its other businesses, and (iii) to carry on its businesses in each jurisdiction in which it does so, and is up to date in all its corporate filings.

No Conflicts. The execution, delivery and performance of the Loan Documents by each Loan Party and the consummation of the transactions contemplated therein:

do not and will not violate its constating documents, by-laws or other organizational documents;

do not require the consent or approval of, or registration or filing with, any Governmental Authority or other Person; and

do not violate or conflict with any material contract.

Enforceability. Each Loan Document constitutes a legal, valid and binding obligation of each Loan Party enforceable in accordance with its terms.

Compliance with Law. Each Loan Party is in compliance: (i) with all Applicable Laws applicable to it or its property, assets and businesses, and (ii) with all material contracts binding upon it or its property, assets and businesses; and (ii) with all zoning and building by-laws and other Applicable Laws with respect to the Collateral.

Taxes. Each Loan Party has filed all tax returns required to be filed by it and has paid all Taxes which were due and payable, on or before the date of this Agreement.

No Litigation, Convictions or Investigations Related to Fraud. There are no actions, suits or proceedings existing or pending against any Loan Party in any court or before any Governmental Authority. No Loan Party has been convicted of a criminal offence (except for a conviction for which a pardon has been granted. No Loan Party has undergone any type of investigation or been accused or convicted of any offence related to fraud, money laundering or terrorist financing.

Financial Statements. The financial statements of the Loan Parties which have been furnished to FCC have been duly prepared in accordance with the Accounting Standards and fairly present the financial condition and the results of the operations of the Loan Parties. Any financial information the Loan Parties have provided to FCC, in any form, is complete, current and accurately presents the Borrower’s financial position as of the date it is provided, and there has been no material adverse change in the Borrower’s business or financial condition or any material adverse change has been immediately disclosed to FCC.

Factual Information. All factual information provided by each Loan Party to FCC for any purpose in connection with this Agreement is true, complete and accurate in every material respect, as of the date thereof, and that information is not incomplete by the omission of any material fact necessary to make that information not misleading.

Title. Each Loan Party has good and marketable title to all of its property and assets free and clear of any Lien, subject only to Permitted Liens.

No Default. The Borrower is not in default of (i) any other agreement for a credit facility or debt instrument with FCC or any other financial institution or (ii) under any material contracts that affect the Borrower’s business or assets.

Environmental Compliance

All facilities and property owned or leased by any Loan Party subject to the Security Documents have been maintained in material compliance with all Environmental Laws;

there have been no past, and there are no pending written claims of violation or requests for information received by any Loan Party from any Governmental Authority with respect to any Environmental Law;

each Loan Party holds and is in compliance with all permits, approvals and other authorizations relating to environmental matters in connection with the operation of the Core Business; and

there are no underground storage tanks, active or abandoned, on any property now or previously owned or leased by any Loan Party including the Property subject to the Security Documents.

Registered Office; Chief Executive Office. The registered office, chief executive office and the principal place of business of each Loan Party is the location set out on the first page of this Agreement.

Location of Property and Assets. The Loan Parties have no property and assets located in any jurisdictions other than as disclosed in writing to FCC.

Wholly-owned Subsidiaries. As of the Closing Date no Loan Party has (i) any Subsidiaries other than those Subsidiaries that are a party to this Agreement, or (ii) entered into any agreements for the acquisition or creation of any Subsidiaries.

Partnership. No Loan Party is in partnership with any Person and no Loan Party is a participant in any joint venture.

Employee Matters. No Loan Party, nor any of their respective employees, is subject to any collective bargaining agreement.

Pension and Benefit Plans. No Loan Party maintains any pension plans or other plan or policy that provides employee benefits. A pension plan is any arrangement for the purposes of applicable pension benefits legislation or any tax laws of Canada or a province. A pension plan does not include the Canada pension plan or the Quebec pension plan.

Full Disclosure. Each Loan Party has disclosed to FCC: (i) all agreements, instruments and corporate or other restrictions to which any Loan Party is subject, and (ii) all other matters known to it, that, in each case, individually or in the aggregate, could, by their existence or if breached by any Loan Party, reasonably be expected to result in a Material Adverse Effect. All material liabilities of the Loan Parties have been recorded in the financial statements of the Loan Parties and disclosed to FCC.

Indebtedness; Liens. No Loan Party (i) has any Indebtedness other than Permitted Indebtedness, and (ii) has granted any Liens other than Permitted Liens.

Shareholder Loans. There are no outstanding loans and advances made to any Loan Party by any Person who does not deal at arm’s length with any Loan Party, other than a shareholder of any Loan Party who has executed and delivered an assignment and postponement of claim in favour of FCC.

Financial Year. The Financial Year end of the Borrower is December 31.

Restatement and Survival of Representations and Warranties

Indemnities

Indemnities

The Loan Parties shall at all times indemnify and hold FCC and its directors, officers, employees and agents harmless against and from any and all claims, liabilities, suits, actions, debts, damages, costs, losses, obligations, judgments, charges, and expenses, of any nature whatsoever suffered or incurred by any such party (including any reasonable costs and expenses of defending or denying same) under or on account of any (i) failure of the Borrower to pay any amount due under this Agreement on its due date; (ii) Event of Default or breach of any Environmental Law.

The Borrower acknowledges that FCC has agreed to make the Credit Facilities available in reliance upon the Loan Parties’ indemnity in this Section. For this reason, it is the intention of the Loan Parties and FCC, that the provisions of this Section shall supersede any other provisions of this Agreement or any other Loan Document which might in any way limit the liability of the Loan Parties.

Survival

Assignment and Participation

Benefit of Agreement

Assignment by Loan Parties

Assignment by FCC

Miscellaneous

Performance by FCC

Notice

In the case of any Loan Party or Loan Parties, a single notice to the address first above written in this Agreement.

In the case of FCC:

Statements and Reports

Severability

Time of Essence

Further Assurances

Replacement

Canadian Currency

Entire Agreement

Conflict

Counterparts; Execution

Relationship to Parties

Amendments and Waivers

This Agreement may not be amended or modified in any respect except in accordance with the provisions hereof, however, the Borrower hereby agrees to make such amendments to this Agreement as may be reasonably requested by FCC to facilitate the granting by FCC of participations or assignments, provided that no such amendment shall have the effect of increasing any costs payable by the Borrower or increasing the obligations of the Borrower under this Agreement.

No failure or delay, on the part of FCC, in exercising any right or power hereunder or under any Security Documents or any other Loan Document delivered to FCC shall operate as a waiver thereof. Each Guarantor, if applicable, agrees that the waiver of any provision of this Agreement may be made without the consent of any Guarantor.

Review

Borrower Confidentiality

any financial institution, credit reporting agency or bureau rating agency, or Governmental Authority; and

anyone with whom the Loan Parties may have or propose to have financial dealings. The Loan Parties agree that FCC may use Loan information for FCC’s internal research and marketing purposes and that FCC may contact the Loan Parties regarding FCC’s other products and services.

FCC Confidentiality

Evidence of Debt

Joint and Several Liability

Words and Phrases

Headings and Table of Contents

Accounting Practices

Statutory References

Account Review and Right to Amend

Customer Declaration

the environment by exercising reasonable care to safeguard the environment through stewardship of land, air quality, and water;

animal welfare through application of the National Farm Animal Care Council (NFACC) Codes as a foundation for animal care;

labour standards by upholding requirements set through Canada’s labour laws including for seasonal workers; and willfully violate employee or human rights; and

in general, society and human rights.

willfully neglect applicable operating laws and regulations;

engage in any money laundering activities or are involved in financing terrorist activities; or

are involved in illegal or other activities that could harm FCC’s reputation and/or do not align with FCC’s expressed commitment to sustainability.

anticipate or are involved in any legal action, or any proceedings before any court, tribunal, board or agency or there are any unexecuted judgments rendered against them;

are in default under any material contracts that affect their business or assets;

have declared bankruptcy (discharged or undischarged) or have been the subject of other insolvency proceedings or proposals;

have been in arrears in the payment of income, business or property taxes, GST, HST, sales tax, payroll deductions, or similar payment obligations;

have been convicted of a criminal offence (except for a conviction for which a pardon has been granted);

have undergone any type of investigation or have been accused or convicted of any offense related to fraud, money laundering or terrorist financing; or

are aware of any of their directors, officers, shareholders, or partners being involved in any of the preceding issues, as applicable.

has read and affirms the integrity declaration;

consents to FCC’s collection, use, and disclosure of its personal information in the manner and for the purposes described above; and

knows of no reason FCC may have any concern with its business

acquires any business or substantially all of the property and assets of any Person engaged in any business; or

acquires Control of a Person.

the target must be in a similar or complimentary line of Core Business as the Loan Parties and reside in Canada;

the Acquisition must be non-hostile and the target must become a wholly-owned Subsidiary of one of the Loan Parties;

the acquired entity and its assets must be used in a Loan Party’s Core Business;

prior written approval from FCC must have been obtained;

the Loan Parties must be in compliance with all terms of this Agreement;

FCC has received financial information, in form and substance satisfactory to FCC, prior to the entry into of the Acquisition agreement demonstrating pro forma compliance by the Borrower with the financial covenants set out in this Agreement for the next four (4) fiscal quarters following completion of the Acquisition;

within 30 days of closing the Acquisition, the applicable Loan Party will provide FCC with a Lien on all property of the acquired entity; and

at the time of and immediately after making any such Acquisition, no Default or Event of Default has occurred and is continuing or would result therefrom.

a sale of inventory in the ordinary course of its business upon customary credit terms; or

the disposition of land and buildings, machinery, equipment or inventory which is surplus, obsolete or worn-out; or

sold or leased to another Loan Party; or

Sale of Assets that have been specifically approved by FCC in writing.

the Outstanding Obligations;

current accounts payable and accrued expenses arising in the ordinary course of business;

any Indebtedness incurred or assumed to finance all or any part of the acquisition price of any asset acquired by the Loan Parties or to finance all or any part of the cost of any improvement to any asset of any of the Loan Parties, provided that, the Loan Parties are in compliance with the financial covenants set out in this Agreement;

a Guarantee of any Permitted Indebtedness of any Loan Party;

Subordinated Debt; provided that, the subordinated lender has executed and delivered a subordination and postponement agreement satisfactory to FCC; and

other Indebtedness in respect of which FCC has provided its prior written consent.

easements, rights of way, encroachments, restrictive covenants, servitudes or other similar rights in land granted to or reserved by other Persons which do not detract from the value of the said properties or impair their use;

security or deposits given to a public utility or any Governmental Authority in connection with the operations of a Person in the ordinary course of its business;

reservations, limitations, provisos and conditions expressed in any original grants from the Crown;

any lien for taxes or assessments not yet due or, if due, are being contested and for which a reasonable reserve satisfactory to FCC has been provided;

any carriers, warehouse, contractors, suppliers, mechanics or similar liens arising in the ordinary course of business so long as the charges secured thereby are not yet due or, if due, are being contested and for which a reasonable reserve satisfactory to FCC has been provided;

undetermined or inchoate liens, privileges, hypothecs or charges arising in the ordinary course of business which have not at such time been filed;

Liens or deposits to secure the performance of bids, tenders, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature (other than for borrowed money) incurred in the ordinary course of business;

Liens in favour of FCC in respect of the Outstanding Obligations;

Liens in favour of ATB or BMO; provided that, any such Liens are subject to the Inter-creditor Agreement between FCC, ATB and BMO which is and remains in effect at all times; and

any Liens in respect of which FCC has given its prior written consent, provided that: (i) the designation in any Loan Document of a Lien as a “Permitted Lien” is not an acknowledgment by FCC that the Lien has priority over the Liens of FCC against any one or more of the Loan Parties or their respective assets.