6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

OF THE SECURITIES EXCHANGE ACT OF 1934

For the month of October 2021

Commission File Number: 001-40258

HIGH TIDE INC.

(Registrant)

11127 - 15 Street N.E., Unit 112

Calgary, Alberta

Canada T3K 2M4

(Address of Principal Executive Offices)

Indicate by check mark whether the Registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F  ☐            Form 40-F  ☒

Indicate by check mark if the Registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ☐

Indicate by check mark if the Registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ☐

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	HIGH TIDE INC.
	(Registrant)
Date: October 27, 2021	By	/s/ Raj Grover
		Raj Grover
		President and Chief Executive Officer

EXHIBIT INDEX

Exhibit	Description of Exhibit
99.1	Material Change Report
99.2	Credit Agreement
99.3	Material Change Report
99.4	Material Contract

EX-99.1

Exhibit 99.1

FORM 51-102F3 MATERIAL CHANGE REPORT

Item 1: Name and Address of Company

High Tide Inc. (the “Company”) Unit 112, 11127 - 15 Street N.E. Calgary, Alberta T3K 2M4

Item 2: Date of Material Change

October 18, 2021.

Item 3: News Release

The news release was disseminated via Newswire on October 18, 2021 and was filed on SEDAR at www.sedar.com.

Item 4: Summary of Material Change

On October 18, 2021, the Company entered into a credit agreement (the “Credit Agreement”) with ATB Financial establishing a revolving credit facility in an amount up to $25,000,000 (comprised of an initial $10,000,000 limit and

$15,000,000 accordion, the “Facility”). The Facility consists of secured prime rate loans, U.S base rate loans, LIBOR loans, letters of credit, Bankers’ Acceptances, and a Corporate MasterCard.

The Facility has an initial term of three years and provides the Company, upon completion of customary conditions, with access to an initial $10,000,000 in capital that can be drawn down at the Company’s discretion, and subject to satisfaction of certain conditions, will provide the Company with access to an additional $15,000,000 in capital. The Company expects to have cleared customary conditions for the first draw by the end of its fiscal year ending October 31, 2021.

Proceeds from the Facility are expected to be used to finance acquisitions as well as working capital and for general corporate purposes. Amounts drawn down under the Facility will bear interest calculated on the basis of the Company's adjusted debt-to-EBITDA ratio, which is expected to yield an effective interest rate of less than 6% per annum.

In addition, on October 18, 2021, a further $1,000,000 of debt was converted into equity, bringing the Company’s total outstanding debt balance to $27,400,000 as October 18, 2021, of which, only $1,600,000 matures during the next 12 months.

Item 5.1: Full Description of Material Change Please see news release attached as Schedule “A”. Item 5.2 Disclosure for Restructuring Transactions Not applicable.

Item 6: Reliance on subsection 7.1(2) of National Instrument 51-102 (Confidentiality)

Not applicable.

Item 7: Omitted Information

No information has been omitted on the basis that it is confidential information.

Item 8: Executive Officer

For additional information with respect to this material change, the following person may be contacted: Raj Grover

President, Chief Executive Officer & Director

Tel: (403) 770-9435 Email: raj@hightideinc.com

Item 9: Date of Report

October 27, 2021.

SCHEDULE “A”

(See attached)

High Tide Secures Non-Dilutive Credit Facility with ATB Financial

CALGARY, AB, Oct. 18, 2021 /CNW/ - High Tide Inc. ("High Tide" or the "Company") (TSXV: HITI) (Nasdaq: HITI) (FSE: 2LYA), a leading retail-focused cannabis company with bricks and mortar as well as global e-commerce assets, announced today that it has entered into a credit agreement to establish a revolving credit facility with ATB Financial ("ATB") in an amount of up to $25 million (comprised of an initial $10 million limit and $15 million accordion, the "Facility"), with an expected interest rate of less than 6% per annum.

High Tide Inc. October 18, 2021 (CNW Group/High Tide Inc.)

"We are extremely pleased to finalize this facility today. We know that our shareholders have been looking forward to us securing non-dilutive financing from a leading Canadian bank, and this is also something that we have been working on for some time as we believe that it provides validation of our improved financial profile," said Raj Grover, President and Chief Executive Officer of High Tide. "This is great news for our shareholders as this credit facility provides us with the firepower to continue our business growth and acquisitions of quality businesses, which are synergistic with our overall ecosystem, while limiting the dilution of our existing shareholder base. We also expect the facility amount to increase in the future as our EBITDA increases, allowing us to realize arbitrage opportunities through accretive acquisitions while limiting the dilution necessary to fuel expansion. I remain excited about High Tide's growth prospects for the remainder of 2021 and throughout 2022, and look forward to sharing continued positive developments in our company with our shareholders," added Mr. Grover.

The Facility, which will become effective by end of business today, will consist of senior secured prime rate loans, U.S. base rate loans, LIBOR loans, letters of credit, Bankers' Acceptances and a Corporate MasterCard.

The Facility has an initial term of three years and provides High Tide, upon completion of customary conditions, with access to an initial $10 million in capital that can be drawn down at High Tide's discretion (the "Initial Facility Amount"), and subject to satisfaction of certain conditions, will provide High Tide with access to an additional $15 million in capital. The Company expects to have cleared customary conditions for the first draw by the end of its fiscal year ending October 31, 2021. Proceeds from the Facility are expected to be used to finance acquisitions as well as working capital and for general corporate purposes. Amounts drawn down under the Facility will bear interest calculated on the basis of the Company's adjusted debt-to-EBITDA ratio, which is expected to yield an effective interest rate of less than 6% per annum.

Separately, the Company also announced that a further $1.0 million of debt has been converted into equity, which brings the Company's total outstanding debt balance to $27.4 million as of today. Of this amount, only $1.6 million matures during the next 12 months.

About High Tide Inc.

High Tide is a leading retail-focused cannabis company with bricks and mortar as well as global e-commerce assets. The Company is the largest Canadian retailer of recreational cannabis as measured by revenue, with 101 current locations spanning Ontario, Alberta, Manitoba and Saskatchewan, and was featured in the third annual Report on Business Magazine's ranking of Canada's Top Growing Companies in 2021. High Tide's retail segment features the Canna Cabana, Meta Cannabis Co., Meta Cannabis Supply Co. and NewLeaf Cannabis banners, with additional locations under development across the country. High Tide has been serving consumers for over a decade through its established ecommerce platforms including Grasscity.com, Smokecartel.com, Dailyhighclub.com, and Dankstop.com and more recently in the hemp-derived CBD space through CBDcity.com and FABCBD.com as well as its wholesale distribution division under Valiant Distribution, including the licensed entertainment product manufacturer Famous Brandz. High Tide's strategy as a parent company is to extend and strengthen its integrated value chain, while providing a complete customer experience and maximizing shareholder value. Key industry investors in High Tide include Tilray Inc. (TSX: TLRY) (Nasdaq: TLRY) and Aurora Cannabis Inc. (TSX: ACB) (Nasdaq: ACB).

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

For more information about High Tide Inc., please visit www.hightideinc.com, its profile page on SEDAR at www.sedar.com, and its profile page on EDGAR at www.sec.gov.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this news release are forward-looking information or forward-looking statements. Such information and statements, referred to herein as "forward-looking statements" are made as of the date of this news release or as of the date of the effective date of information described in this news release, as applicable. Forward-looking statements relate to future events or future performance and reflect current estimates, predictions, expectations or beliefs regarding future events. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (generally, forward-looking statements can be identified by use of words such as "outlook", "expects", "intend", "forecasts", "anticipates", "plans", "projects", "estimates", "envisages, "assumes", "needs", "strategy", "goals", "objectives", or variations thereof, or stating that certain actions, events or results "may", "can", "could", "would", "might", or "will" be taken, occur or be achieved, or the negative of any of these terms or similar expressions, and other similar terminology) are not statements of historical fact and may be forward-looking statements.

Such forward-looking statements are based on assumptions that may prove to be incorrect, including but not limited to the ability of High Tide to execute on its business plan and that High Tide will receive one or multiple licenses from Alberta Gaming, Liquor & Cannabis, British Columbia's Liquor Distribution Branch, Liquor, Gaming and Cannabis Authority of Manitoba, Alcohol and Gaming Commission of Ontario or the Saskatchewan Liquor and Gaming Authority permitting it to carry on its Canna Cabana Inc. and KushBar Inc. businesses. High Tide considers these assumptions to be reasonable in the circumstances. However, there can be no assurance that any one or more of the government, industry, market, operational or financial targets as set out herein will be achieved. Inherent in the forward-looking statements are known and unknown risks, uncertainties and other factors that could cause actual results, performance or achievements, or industry results, to differ materially from any results, performance or achievements expressed or implied by such forward-looking statements.

The forward–looking statements contained herein are current as of the date of this news release. Except as required by law, High Tide does not have any obligation to advise any person if it becomes aware of any inaccuracy in or omission from any forward-looking statement, nor does it intend, or assume any obligation, to update or revise these forward-looking statements to reflect new events or circumstances. Any and all forward-looking statements included in this news release are expressly qualified by this cautionary statement, and except as otherwise indicated, are made as of the date of this news release.

View original content to download multimedia:https://www.prnewswire.com/news-releases/high-tide-secures-non-dilutive-credit-facility-with-atb-financial-301401915.html

SOURCE High Tide Inc.

View original content to download multimedia: http://www.newswire.ca/en/releases/archive/October2021/18/c8039.html

%CIK: 0001847409

For further information: Media Inquiries, Omar Khan, Senior Vice President - Corporate and Public Affairs, omar@hightideinc.com; Investor Inquiries, Vahan Ajamian, Capital Markets Advisor, vahan@hightideinc.com

CO: High Tide Inc.

CNW 06:00e 18-OCT-21

EX-99.2

Exhibit 99.2

CREDIT AGREEMENT

HIGH TIDE INC.

as Borrower

- and -

ATB FINANCIAL

as Lender

DATED AS OF OCTOBER 15, 2021

TABLE OF CONTENTS
ARTICLE 1 INTERPRETATION		1
1.1	Definitions	1
1.2	Audited Financial Statements	29
1.3	Canadian Currency	29
1.4	Interest Act	29
1.5	Change in Rates	29
1.6	Headings and Table of Contents	29
1.7	References	30
1.8	Number and Gender	30
1.9	Maximum Interest Rate	30
1.10	Lender to Act Reasonably	31
1.11	Schedules	31
ARTICLE 2 CREDIT FACILITIES		31
2.1	Operating Facility - Cdn. $10,000,000	31
2.2	Purpose and Availability of the Operating Facility	31
2.3	Permitted Increase in Operating Facility	32
2.4	Evidence of Debt	32
2.5	Illegality	32
2.6	Substitute Basis of Borrowing	33
2.7	Benchmark Replacement Setting.	34
2.8	CDOR Discontinuance	39
ARTICLE 3 PROCEDURES APPLICABLE TO BORROWINGS		40
3.1	Notice of Borrowing	40
3.2	Conversion Option	41
3.3	Provisions relating to Letters of Credit	42
3.4	Rollovers	42
3.5	Selection of Libor Interest Periods	43
3.6	Provisions relating to Bankers' Acceptances.	43
3.7	Reliance on Oral Instructions	44
ARTICLE 4 PAYMENTS		45
4.1	Repayment and Termination at Maturity Date	45
4.2	Mandatory Repayments - General	45
4.3	Mandatory Repayments - Operating Facility	46
4.4	Voluntary Prepayment	46
4.5	Principal Repayments Affecting Bankers' Acceptances and Libor Loans	46
4.6	Early Repayment of Bankers' Acceptances, Letters of Credit and Libor Loans	47
4.7	Payments Generally	47
4.8	No Credit for Trust Funds	47
ARTICLE 5 INTEREST, FEES AND EXPENSES		47
5.1	Interest on Prime Loans	47

5.2	Interest on U.S. Base Rate Loans	48
5.3	Interest on Libor Loans	48
5.4	Interest on Overdue Amounts	48
5.5	Letter of Credit Fees	49
5.6	Corporate MasterCard	49
5.7	Standby Fees	49
5.8	Other Fees	49
5.9	Change in Circumstances	50
5.10	Reimbursement of Expenses	51
5.11	Determination Conclusive	52
5.12	No Withholding/Payment of Gross-up	52
ARTICLE 6 CONDITIONS PRECEDENT		52
6.1	Conditions - Effectiveness	52
6.2	Conditions - Borrowings	54
6.3	Waiver	58
ARTICLE 7 REPRESENTATIONS AND WARRANTIES		58
7.1	Representation and Warranties	58
7.2	Survival of Representations and Warranties	65
ARTICLE 8 COVENANTS		66
8.1	Positive Covenants	66
8.2	Negative Covenants	71
8.3	Reporting Covenants	74
8.4	Financial Covenants.	75
8.5	Material Subsidiaries	76
ARTICLE 9 SECURITY		76
9.1	Security	76
9.2	Further Assurances	77
ARTICLE 10 EVENTS OF DEFAULT		77
10.1	Events of Default	77
10.2	Lender May Waive	81
10.3	Remedies are Cumulative	81
10.4	Set-Off	81
10.5	Cash Collateral Accounts	82
10.6	Waiver of Jury Trial	82
ARTICLE 11 GENERAL		82
11.1	Notices	82
11.2	Performance of Covenants by the Lender	83
11.3	Indemnity	83
11.4	Environmental Indemnity	84
11.5	Funding Indemnity	85
11.6	No Set-Off or Counterclaim	85
11.7	Severability	85

11.8	Time of Essence	85
11.9	Assignment by Borrower	85
11.10	Lender Assignments	86
11.11	Entire Agreement	87
11.12	Amendments	87
11.13	Law Governing	87
11.14	Paramountcy/Conflict	87
11.15	Successors and Assigns	87
11.16	Counterparts and Electronic Signature	87
11.17	USA PATRIOT Act	88

CREDIT AGREEMENT

THIS AGREEMENT dated as of the 15^th day of October, 2021.

AMONG:

HIGH TIDE INC.

(the "Borrower")

- and -

ATB FINANCIAL

(and one or more financial institutions to whom such lender or its assigns may from time to time assign an interest herein pursuant to Section 11.10 hereof, collectively, the "Lender")

RECITALS:

WHEREAS the Borrower has requested and the Lender has agreed to establish the Operating Facility in its favour upon the terms and conditions of this Agreement;

NOW THEREFORE, for value received, and intending to be legally bound by this Agreement, the parties agree as follows:

Article 1
Interpretation

1.1 Definitions

For the purposes of this Agreement, the following terms shall have the following meanings unless something in the subject matter or context is inconsistent therewith:

"Additional Compensation" has the meaning given to that term in Section 5.9(b).

"Adjusted Debt" means, in respect of Borrower as at the day of calculation on a consolidated basis all outstanding Debt, other than (without duplication):

(a) postponed Debt if it is postponed on terms and in a manner acceptable to the Lender (and, for certainty, the Debt owing to Aurora under the Aurora Debenture and the Aurora Debt Restructuring Agreement has been so postponed);

(b) all Specified Debt not included under subsection (a), other than Debt owing in respect of the Dreamweavers Deferred Payment;

(c) Debt owing in respect of the Dreamweavers Deferred Payment, other than the applicable principal owing to Dreamweavers in respect of the Dreamweavers Deferred Payment in accordance with the terms of the Dreamweavers Amalgamation Agreement in the applicable Financial Year (which principal shall be included in the calculation of Adjusted Debt);

 - 2 -

(d) the redemption amount of any preferred shares of Borrower which are redeemable at the option of the holder, unless such option is exercised;

(e) Debt of an Excluded Foreign Subsidiary; and

(f) Debt of a Person in which the Borrower holds a minority interest, unless such Person is designated as a Material Subsidiary.

"Adjusted Debt to EBITDA Ratio" means, at any time, for any relevant period, the ratio of (i) Adjusted Debt at such time to (ii) EBITDA.

"Affiliate" of a Person means any other Person which, directly or indirectly, controls or is controlled by or is under common control with the first Person, and for purposes of this definition, "control" (including with correlative meanings the terms "controlled by" and "under common control with") means the power to direct or cause the direction of the management and policies of any Person, whether through the ownership of shares or by contract or otherwise.

"Agreement" means this agreement and the schedules hereto, and any amendments or supplements to or replacements or restatements of this credit agreement or the schedules at any time and from time to time.

"Anti-Corruption Laws" means the U.S. Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder, and any other anti-corruption law applicable to the Borrower and its Subsidiaries.

"Aphria" means Aphria Inc., and its successors.

"Aphria Debenture" means the unsecured convertible debenture issued by the Borrower to Aphria dated April 18, 2019 (as amended, restated, supplemented, replaced or otherwise modified from time to time in accordance with the terms of this Agreement).

"Applicable Law" means, at any time, with respect to any Person, property, transaction or event, all applicable laws, statutes, regulations, treaties, judgments and decrees and (whether or not having the force of law) all applicable official directives, rules, consents, approvals, by-laws, permits, authorizations, guidelines, orders and policies of any governmental or regulatory body or Persons having authority over that Person, property, transaction or event, provided, however, that Applicable Law shall not include (i) the Federal Food, Drug, and Cosmetic Act (United States) or any rules and regulations promulgated therefrom only as they relate to the distribution or sale of CBD or CBD products and (ii) any laws, rules, regulations and/or agency guidance, promulgated by any state within the United States, which prohibits, limits, or otherwise restricts the distribution or sale of CBD or CBD products.

"Applicable Margin" means in respect to the margin applicable to Prime Rate Loans, U.S. Base Rate Loans, Libor Loans, Bankers' Acceptances, Letter of Credit Fees and Standby Fees payable under the Operating Facility, the percentage rate per annum set out in the following table opposite the applicable Adjusted Debt to EBITDA Ratio:

Level	Adjusted Debt to EBITDA Ratio	Margin on Prime Rate Loans and U.S. Base Rate Loans (bps)	Margin on Libor Loans and Stamping Fees for Bankers' Acceptances (bps)	Financial LC Fees (bps)	Non-Financial LC Fees (bps)	Standby Fee (bps)
[Redacted]	[Redacted]	[Redacted]	[Redacted]	[Redacted]	[Redacted]	[Redacted]
[Redacted]	[Redacted]	[Redacted]	[Redacted]	[Redacted]	[Redacted]	[Redacted]
[Redacted]	[Redacted]	[Redacted]	[Redacted]	[Redacted]	[Redacted]	[Redacted]
[Redacted]	[Redacted]	[Redacted]	[Redacted]	[Redacted]	[Redacted]	[Redacted]

 - 3 -

Provided that:

(a) the effective date of any change to the Applicable Margin shall be the first day of the fiscal quarter immediately following the last day of the period during which the Borrower is required to deliver Compliance Certificates hereunder. If any Compliance Certificate is not delivered as required hereunder or is delivered containing an error which impacts the calculation of the Adjusted Debt to EBITDA Ratio such that the Applicable Margin is at a different level than it would be determined to be using the correct calculation of, the Applicable Margin shall immediately be the highest rate applicable, until such time as such Compliance Certificate is delivered or corrected, as applicable, and the Adjusted Debt to EBITDA Ratio determined;

(b) if the Applicable Margin changes during the term of any Bankers' Acceptance or Letter of Credit, the Stamping Fee or Letter of Credit Fee paid shall be adjusted to reflect the Applicable Margin for the remaining term, and the parties shall forthwith make whatever payments are necessary to reflect such adjustment;

(c) for the purposes of calculating the Applicable Margins for Prime Rate Loans, U.S. Base Rate Loans and Bankers' Acceptances, the per annum rate is expressed on the basis of a 365-day year, as applicable, and the Applicable Margin for Libor Loans is calculated as a per annum rate expressed on the basis of a 360-day year; and

(d) upon the occurrence and during the continuance of any Event of Default, each of the above Applicable Margins will increase by 200 bps.

"Aurora" means Aurora Cannabis Inc., and its successors.

"Aurora Debenture" means the secured convertible debenture issued by the Borrower to Aurora under the Aurora Debt Restructure Agreement (as amended, restated, supplemented, replaced or otherwise modified from time to time in accordance with the terms of this Agreement).

"Aurora Debt Restructure Agreement" means the debt restructure agreement made between the Borrower and Aurora dated as of July 23, 2020 (as amended, restated, supplemented, replaced or otherwise modified from time to time in accordance with the terms of this Agreement).

"BA Equivalent Loan" means, in relation to a Borrowing by way of BA Loans, an advance in Canadian Dollars made by a Non-Acceptance Lender pursuant to Section 3.6(h).

 - 4 -

"BA Loans" means Bankers' Acceptances and BA Equivalent Loans.

"BA Notice" means a notice requesting the issuance of a Bankers' Acceptance, or a Rollover to be given to the Lender in writing substantially in the form annexed hereto as Schedule A.

"Bankers' Acceptance" and "BA" mean a non-interest bearing instrument denominated in Canadian Dollars drawn by the Borrower under the Operating Facility and accepted by a Lender in accordance with this Agreement, and includes a depository note within the meaning of the Depository Bills and Notes Act (Canada) and a non-interest bearing bill of exchange within the meaning of the Bills of Exchange Act (Canada).

"Basis Point" and "bp" means one one-hundredth of one percent (.01%).

"Benefit Plan" means any of (a) an "employee benefit plan" (as defined in ERISA) that is subject to Title I of ERISA, (b) a "plan" as defined in and subject to Section 4975 of the Code or (c) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such "employee benefit plan" or "plan".

"Borrower" means High Tide Inc. and its successors and permitted assigns.

"Borrowing" means any drawdown under the Operating Facility or any issuance of any Letter of Credit under the Operating Facility or any Conversion and any Rollover.

"Borrowing Date" means a Business Day on which a Borrowing is made.

"Branch of Account" means the branch of the Lender, as designated by the Lender to the Borrower in writing from time to time.

"Business Day" means a day on which banks are open for business in Calgary, Alberta other than a Saturday, Sunday or legal holiday, also, if such term is considered in the context of a U.S. Base Rate Loan, New York, New York and also, if such term is considered in the context of a Libor Loan or determination of Libor, London, England.

"Canadian Dollars", "Cdn. Dollars", "Cdn. $" and "$" each means lawful money of Canada.

"Cannabis" means:

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

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

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

 - 5 -

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

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

(f) any other meaning ascribed to the term "cannabis" under the Controlled Substances Act (United States).

"Cannabis Accessory" means "cannabis accessory" as defined in the Cannabis Act in respect of the Cannabis Business carried on by the Loan Parties in Canada.

"Cannabis Act" means the Cannabis Act, SC 2018, c. 16 as amended or replaced from time to time.

"Cannabis Activities" means any activities of a Person (including advertising or promotional activities) relating to or in connection with the possession, exportation, importation, cultivation, production, processing, purchase, distribution or sale of Cannabis or Cannabis products, whether such activities are for medical, scientific, recreational or any other purpose.

"Cannabis Authorizations" means all licenses, permits, consents, authorizations and approvals from any and all Governmental Authorities under Cannabis Laws that are necessary to maintain in connection with any Cannabis Business operated by each Loan Party.

"Cannabis Business" means the distribution and retail sale of Cannabis for adult recreational purposes and uses in the Qualified Cannabis Jurisdictions and includes any business that is reasonably related or ancillary thereto (including the sale of Cannabis Accessories, but excluding, for certainty, Non-Cannabis Accessories), as well as any services related to Cannabis.

"Cannabis Laws" means Applicable Laws with respect to Cannabis Activities made from time to time in any Qualified Cannabis Jurisdiction, including the Cannabis Act, its regulations and the Controlled Drugs and Substances Act (Canada).

"CARES Act" means, the Coronavirus Aid, Relief, and Economic Security Act, as such legislation may be replaced or amended from time to time.

"Cash Collateral Account" means an account with the Lender, from which the Borrower has no withdrawal rights or privileges except as contemplated in this Agreement, which account and all funds credited thereto and interest earned thereon (which interest shall be at the prevailing rate of the Lender for demand deposits of comparable amounts) shall be the subject of a Security Interest in favour of the Lender.

"Cay Innovations" means Cay Innovations Inc. and its successors.

"Cay Innovations Loan Agreement" means the unsecured loan agreement between Cay Innovations, as lender and the Borrower, as debtor, dated as of September 4, 2019, as amended to the date hereof.

 - 6 -

"CBD" means crystalline, non-intoxicating cannabinoid C21H30O2 derived from Industrial Hemp to the extent that such activities do not contravene the Controlled Substances Act (United States).

"CBD Activities" means any activities (including advertising or promotional activities) relating to or in connection with the possession, exportation, importation, cultivation, production, processing, purchase, distribution or sale of CBD products, whether such activities are for medical, scientific, recreational or any other purpose.

"CBD Authorizations" means all licenses, permits, consents, authorizations and approvals from any and all Governmental Authorities under CBD Laws that are necessary to maintain in connection with any CBD Business operated by each Loan Party.

"CBD Business" means the conducting of CBD Activities in the Qualified CBD Jurisdictions.

"CBD Laws" means Applicable Laws made from time to time with respect to CBD Activities in any Qualified CBD Jurisdiction.

"CDOR Rate" means, on any date, the per annum rate of interest which is the rate based on the average of the discount rates (rounded up to two decimal places) applicable to Canadian Dollar bankers' acceptances for a term equivalent to the term of the relevant bankers' acceptances appearing on the Refinitiv Screen Canadian Dollar Offered Rate (CDOR) Page (the "CDOR Page") for acceptances of Schedule I banks under the Bank Act (Canada) as of 10:15 a.m. (Toronto time) on such date, or if such a date is not a Business Day, then on the immediately preceding Business Day; provided, however, that if no such average rate appears on the CDOR Page as contemplated, then the CDOR Rate on any date shall be the rate for the term referred to above applicable to Canadian Dollar bankers' acceptances quoted by ATB Financial as of 10:15 a.m. (Toronto time) on such date, or if such date is not a Business Day, then on the immediately preceding Business Day.

"Change of Control" means:

(a) the acquisition of Control of the Borrower by any Person or group of Persons acting jointly or otherwise in concert (other than such Persons or group of Persons in Control as of the Closing Date); or

(b) the Borrower ceases to own, directly or indirectly, all of the Equity Securities of the other Loan Parties.

"Closing Date" means the date upon which the conditions precedent set forth in Section 6.1 have been satisfied or waived.

"Code" means the U.S. Internal Revenue Code of 1986.

"Compliance Certificate" means a completed certificate substantially in the form of Schedule B signed and delivered by a senior officer of the Borrower, as such form may be amended from time to time by mutual agreement of the Borrower and the Lender.

"Contaminant" means any pollutant, dangerous, toxic or hazardous substance or waste of any description whatsoever, hazardous materials or contaminants regulated pursuant to any Environmental Law.

 - 7 -

"Contract Period" means the term of a Bankers' Acceptance.

"Control" means the ownership or right to control through voting proxies a minimum of 25.1% of the issued and outstanding voting shares, partnership interests or other instruments having the capacity to elect the directors or committees responsible for the control, management and direction of any Person or to otherwise control the management or direction of any Person.

"Conversion" means the conversion of one manner of Borrowing (other than a Letter of Credit) permitted hereunder into another manner of Borrowing (other than a Letter of Credit) permitted hereunder.

"Conversion Date" means the date upon which a Conversion is effected.

"Conversion Notice" means a notice requesting a Conversion to be given to the Lender in writing, substantially in form of Schedule A hereto as described in Section 3.2 hereof.

"Currency Swap" means a contract entered into between a Person and a counterparty on a case by case basis in connection with forward rate, currency swap or currency exchange and other similar currency related transactions, the purpose and effect of which is to mitigate or eliminate such Person's exposure to fluctuations in exchange rates.

"Debt" of a Person means, as at any particular time and as determined on a consolidated basis in respect of the Borrower in accordance with GAAP (without duplication), the aggregate amount of all obligations, liabilities and indebtedness: (i) for moneys borrowed and moneys raised by the issue of notes, bonds, debentures or other evidences of moneys borrowed including the face amount of bankers' acceptances and letters of credit or letters of guarantee; (ii) for the deferred purchase price of property or services represented by a note or other evidence of indebtedness; (iii) created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property); (iv) of another person secured by a lien, charge, hypothec, mortgage or security interest on any assets or undertaking (real, personal, tangible or intangible) of such Person; (v) under Finance Leases; (vi) comprising of the aggregate amount at which any Equity Securities in the capital of such Person which are redeemable at the option of the holder or retractable at the option of the holder, as the case may be, may be so retraced or redeemed for cash or debt provided all conditions precedent for such retraction or redemption have been satisfied; and (vii) representing Debt Guarantees by such Person.

"Debt Guarantee" by any Person means, without duplication, the amount outstanding at any time of all Debt of the kinds referred to in (i) through (vi) of the definition of Debt which is directly or indirectly guaranteed by such Person or which such Person has agreed (contingently or otherwise) to purchase or otherwise acquire, or in respect of which such Person has otherwise assured a creditor or other Person against loss.

"Deemed Year" has the meaning given to that term in Section 1.4.

"Default" means any of the events described in Section 10.1 regardless of whether any requirement in connection with such event for the giving of notice, the lapse of time, or both, has been satisfied or met.

 - 8 -

"Discount Note" shall mean a non-interest-bearing promissory note denominated in Dollars issued by the Borrower under the Operating Facility to a Non-Acceptance Lender to evidence a BA Equivalent Loan.

"Discount Proceeds" means, in respect of any Bankers' Acceptance, an amount which is calculated by: (i) dividing the face amount thereof by the sum of one plus the product of the: (a) Reference Discount Rate expressed in a decimal fraction, multiplied by (b) a fraction, the numerator of which is the Contract Period of such Bankers' Acceptance and the denominator of which is 365; and (ii) deducting from the result obtained the Stamping Fee for such Bankers' Acceptance.

"Distribution" means, with respect to any Person, any payment by such Person:

(a) of any dividends, other distributions or returns of capital on any of its Equity Securities;

(b) on account of, or for the purpose of setting apart any Property for a sinking or other analogous fund for, the purchase, redemption, retirement or other acquisition of any of the Equity Securities of such Person or any of its Subsidiaries or any warrants, options or rights to acquire any such Equity Securities, or the making by such Person of any other distribution in respect of any of such Equity Securities;

(c) of any principal of or interest or premium on or of any amount in respect of a sinking or analogous fund or defeasance fund for any Debt of such Person to a shareholder of such Person or to any non-arm's length party (within the meaning of the Income Tax Act) of such Person or shareholder; or

(d) of any:

(i) management, consulting or similar fee or any bonus or comparable payment, other than commercially reasonable remuneration;

(ii) gift or other gratuity; or

(iii) amount in respect of Property leased or acquired by such Person, except on commercially reasonable terms;

in each case, to any Related Party or any non-arm's length party (within the meaning of the Income Tax Act) of such Person.

"Draft" or "Drafts" when used in connection with Bankers' Acceptances, means a bill or bills of exchange not payable on demand drawn by the Borrower under the Operating Facility and accepted by the Lender in accordance with this Agreement.

"Dreamweavers" means Dreamweavers Cannabis Products Inc., and its successors.

"Dreamweavers Deferred Payment" means the unsecured deferred purchase price payment owed to the previous shareholders of Dreamweavers in the original principal amount of $500,000 in connection with the Borrower's acquisition of Dreamweavers pursuant to an amalgamation agreement among the Borrower, Canna Cabana (SK) Inc. and Dreamweavers dated May 21, 2019 (the "Dreamweavers Amalgamation Agreement"), of which $200,000 is outstanding as at the date of this Agreement.

 - 9 -

"EBITDA" means, for any fiscal period, calculated on a twelve-month trailing basis the Net Income of the Borrower on a consolidated basis in accordance with GAAP, plus (in each case, for the Borrower on a consolidated basis but without duplication):

(a) all amounts deducted in the calculation of Net Income in respect of Interest Expense;

(b) all amounts deducted in the calculation of Net Income in respect of the provision for income taxes (in accordance with GAAP);

(c) all amounts deducted in the calculation of Net Income in respect of non-cash items, including, without limitation, depletion, accretion, depreciation, amortization and future income tax liabilities;

(d) all amounts deducted in the calculation of Net Income in respect of any non-capitalized transaction costs and expenses associated with the closing of this Agreement and the transactions contemplated thereunder as well as the additional costs disclosed to and approved by the Lender in writing prior to the Closing Date, up to a maximum of Redacted in the aggregate;

(e) all amounts deducted in the calculation of Net Income in respect of extraordinary and non-recurring cash losses (other than in the ordinary course of business), to the extent acceptable to the Lender (in the Lender's sole discretion);

(f) all amounts deducted in the calculation of Net Income in respect of all non-cash losses and expenses, including, foreign exchange translation losses, stock-based compensation expenses, fair value changes relating to inventory and biological assets, debt restructuring, revaluation of derivative liability, settlement of convertible debenture, extinguishment of debenture, impairment loss, share-based compensation, and losses or write-downs due to revaluation of marketable securities, extinguishment of financial liability, related party balances written-off, disposal of property and equipment and discount on accounts receivable;

(g) all amounts deducted in the calculation of Net Income in respect of any other unusual or non-recurring cash charges, expenses or losses designated by the Borrower with the prior written consent of the Lender, which consent may be withheld in the Lender's sole discretion;

(h) all amounts deducted in the calculation of Net Income in respect of losses attributable to minority interests in any Person;

(i) Distributions received in cash in respect of any minority interest in any Person;

less (to the extent added in computing such Net Income or net loss):

(j) all non-recurring extraordinary gains (other than in the ordinary course of business) acceptable to the Lender (in the Lender's sole discretion);

 - 10 -

(k) all non-cash gains and income, including, foreign exchange translation gains, gains or write-ups; and

(l) earnings attributable to minority interests in any Person;

provided that for the purposes of this definition:

(i) EBITDA shall be calculated without reference to, and excluding, in each instance above, any amounts or other items attributable to Excluded Foreign Subsidiaries; and

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

"Environmental Activity" means any past, present or future activity, event or circumstance in respect of a Contaminant, including, without limitation, its storage, use, holding, collection, purchase, accumulation, assessment, generation, manufacture, construction, processing, treatment, stabilization, disposition, handling or transportation or its Release into the natural environment including the movement through or in the air, soil, subsoil, surface water or groundwater.

"Environmental Laws" means any and all federal, provincial, municipal, local and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, licences, agreements or other governmental restrictions having the force of law relating to the environment, occupational health and safety, health protection or any Environmental Activity.

"Equity Securities" means, with respect to any Person, any and all shares, stock or units of, interests, participations or rights in, or other equivalents (however designated and whether voting and non-voting) of, such Person's capital, whether outstanding on the date hereof or issued after the date hereof, including any interest in a partnership, limited partnership or other similar Person and any beneficial interest in a trust, and any and all rights, warrants, debt securities, options or other rights exchangeable for or convertible into any of the foregoing.

"Equivalent Amount" in one currency (the "First Currency") of an amount in another currency (the "Other Currency") means, as of the date of determination, the amount of the First Currency which would be required to purchase such amount of the Other Currency at the Bank of Canada noon (Calgary time) mid-point spot rate for such currencies on such date of determination (as quoted or published from time to time by the Bank of Canada) or, if such date of determination is not a Business Day, on the Business Day immediately preceding such date of determination, or at such other rate as may have been agreed to by the Borrower and the Lender; provided that if such mid-point spot rate is no longer quoted at noon (Calgary time), it shall mean the spot rate of exchange for such conversion as quoted by the Bank of Canada at the close of business on the immediately preceding Business Day, and, in either case, if no such rate is quoted, the spot rate of exchange quoted for wholesale transactions by the Lender in Calgary, Alberta in accordance with its normal practice.

 - 11 -

"ERISA" means the U.S. Employee Retirement Income Security Act of 1974.

"ERISA Affiliate" means any trade or business (whether or not incorporated) that, together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.

"ERISA Event" means (a) any "reportable event," as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period is waived); (b) the failure with respect to any Plan to satisfy the "minimum funding standard" (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or to appoint a trustee to administer any Plan; (f) the incurrence by the Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal of the Borrower or any of its ERISA Affiliates from any Plan or Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning the imposition upon the Borrower or any of its ERISA Affiliates of withdrawal liability under Section 4201 of ERISA or a determination that a Multiemployer Plan is, or is expected to be, insolvent within the meaning of Title IV of ERISA.

"ETA" means Part IX of the Excise Tax Act (Canada), as amended from time to time

"Event of Default" means any of the events specified in Section 10.1, provided that any requirement in connection with such event for the giving of notice, the lapse of time or both, has been satisfied or met.

Redacted Redacted Redacted Redacted Redacted, Redacted Redacted Redacted Redacted Redacted Redacted Redacted Redacted Redacted:

(a) Redacted Redacted Redacted Redacted Redacted Redacted Redacted Redacted Redacted Redacted

(b) Redacted Redacted Redacted Redacted Redacted Redacted Redacted Redacted Redacted Redacted Redacted Redacted Redacted Redacted Redacted Redacted Redacted Redacted Redacted Redacted Redacted Redacted.,

Redacted Redacted, Redacted Redacted " Redacted Redacted Redacted.

"Federal Funds Rate" means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the annual rates of interest on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such day is not a Business Day, such weighted average for the immediately preceding Business Day for which the same is published or, if such rate is not so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day on such transactions received by the Lender from three Federal funds brokers of recognized standing selected by it. Notwithstanding the foregoing, if the rate determined above shall ever be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement.

 - 12 -

"Finance Lease" means any lease of property, real or personal, or any similar arrangement which would, in accordance with GAAP as at December 31, 2018, be required to be classified and accounted for as a capitalized lease on a balance sheet of a lessee, where the lessee is the Borrower or a Subsidiary of the Borrower, excluding (i) any lease that would in accordance with GAAP (as in effect as of December 31, 2018) be determined to be an operating lease and (ii) a Premises Lease.

"Financial LC" means a stand-by letter of credit if it serves as a payment guarantee of a Borrower's financial obligations and is treated as a direct credit substitute for purposes of applicable capital adequacy guidelines.

"Financial Year" of an entity means the 12-month period ending on the fiscal year end of that entity in each year.

"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 circumstances as of the date of determination consistently applied (on an IFRS basis).

"Governmental Authority" means any nation or government, any province, municipality, local or other political subdivision thereof and any agency, instrumentality or other entity thereof exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.

"GST" means the goods and services tax imposed under the ETA.

"Guarantee" means, with respect to a Person, any absolute or contingent liability of that Person under any guarantee, agreement, endorsement (other than for collection or deposit in the ordinary course of business), discount with recourse or other obligation to pay, purchase, repurchase or otherwise be or become liable or obligated upon or in respect of any Debt of any other Person, and including any absolute or contingent obligations to:

(a) advance or supply funds for the payment or purchase of any Debt of any other Person;

(b) purchase, sell or lease (as lessee or lessor) any property, assets, goods, services, materials or supplies primarily for the purpose of enabling any other Person to make payment of Debt or to assure the holder thereof against loss; or

(c) indemnify or hold harmless any other Person from or against any losses, liabilities or damages, in circumstances intended to enable such other Person to incur or pay any Debt or to comply with any agreement relating thereto or otherwise to assure or protect creditors against loss in respect of such Debt.

Each Guarantee shall be deemed to be in an amount equal to the amount of the Debt in respect of which the Guarantee is given, unless the Guarantee is limited to a determinable amount in which case the amount of the Guarantee shall be deemed to be the lesser of the amount of the Debt in respect of which the Guarantee is given and such determinable amount.

 - 13 -

"Guarantor" means, individually and collectively, all present and future Material Subsidiaries of the Borrower, and their respective successors and permitted assigns.

"Hostile Acquisition" means an acquisition, which is required to be reported to applicable securities regulatory authorities, of issued and outstanding equity securities of any other Person where the board of directors of that other Person (or the equivalent thereof) has not approved such acquisition nor recommended to the holders of the issued and outstanding equity securities of any other Person that they sell their issued and outstanding equity securities of such Person pursuant to the proposed acquisition, including for certainty units of a trust where the trustee or manager or administrator of that trust has not approved such acquisition nor recommended to the unitholders of the trust that they sell their units pursuant to the proposed acquisition or units of a partnership where the board of directors of the general partner thereof has not approved such acquisition nor recommended to the partners of the partnership that they sell their units pursuant to the proposed acquisition.

"IFRS" means International Financial Reporting Standards including International Accounting Standards and Interpretations together with their accompanying documents which are set by the International Account Standards Board.

"Industrial Hemp" has the meaning ascribed to such term or the term "hemp" under: (a) the Applicable Law of any Qualified Cannabis Jurisdiction, including the Industrial Hemp Regulations (Canada) issued under the Cannabis Act, or (b) the Agricultural Marketing Act of 1946 (United States).

"Interest Coverage Ratio" means the ratio of (a) EBITDA to (b) Interest Expense.

"Interest Expense" means, with respect to the Borrower for any period, without duplication, interest expense of the Borrower calculated on a consolidated basis and in accordance with GAAP as the same would be set forth or reflected in a consolidated statement of net income of the Borrower and, in any event and without limitation, shall include:

(a) all interest accrued or payable in respect of such period, provided that:

(i) interest accrued in respect of amounts owing under Aurora Debenture and the Dreamweaver Deferred Payment shall not be included in the calculation of Interest Expense and shall only be included in such calculation when payable; and

(ii) interest paid by way of issuance of Equity Securities shall not be included in the calculation of Interest Expense;

(b) all fees (including standby, letter of credit, guarantee, commitment and fees relating to the acceptances of bankers' acceptances) accrued or payable in respect of such period and which relate to any Debt, prorated (as required) over such period;

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

(d) the interest component of obligations under Finance Leases; and

 - 14 -

(e) all net amounts charged or credited to interest expense under any interest rate hedge agreements in respect of such period,

and shall also, for the purposes of this Agreement, include non-interest payments made during such period under the Dreamweaver Deferred Payment and the Structured Payment Amount, but shall exclude any of the foregoing listed items above in respect of any Excluded Foreign Subsidiaries; provided that neither the Borrower nor any Material Subsidiary is liable or such amounts or provides payment of any such amounts (and in the event they are so liable or do so pay, such amounts shall, for the purposes of this Agreement, be included in the calculation of Interest Expense).

"Interest Payment Date" means, the first Business Day of each calendar month.

"Interest Swap" means a contract entered into between a Person and a counterparty, on a case by case basis, in connection with interest rate swap transactions, interest rate options, cap transactions, floor transactions, collar transactions and other similar interest rate related transactions, the purpose and effect of which is to mitigate or eliminate such Person's exposure to fluctuations in interest rates.

"Investment" means, as applied to any Person (the "investor"):

(a) any direct or indirect purchase or other acquisition by the investor of, or a beneficial interest in, Equity Securities of any other Person including any exchange of Equity Securities for indebtedness;

(b) any direct or indirect loan, advance (other than advances to employees for moving, business and travel expenses, drawing accounts and similar expenditures in the ordinary course of business) or capital contribution (by way of cash or Property) by the investor to any other Person, including all indebtedness and accounts receivable owing to the investor from such other Person that did not arise from sales or services rendered to such other Person in the ordinary course of the investor's business; or

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

"Lands" means, collectively, all real property owned by any Loan Party or leased by any Loan Party under a Premises Lease.

"Lender" is defined on the first page hereof and also includes other Persons who are or become, a party to this Agreement in a capacity as lender to the Borrower.

"Lender's Counsel" means Gowling WLG (Canada) LLP, or such additional and other legal counsel as the Lender may appoint from time to time.

"Letter of Credit" means any letter of credit or bank letter of guarantee issued by the Lender at the request of the Borrower under the Operating Facility pursuant to this Agreement, as the same may be amended, supplemented, extended or otherwise modified from time to time and in each case denominated in a freely traded currency acceptable to the Lender and subject to availability. Each such Letter of Credit shall be designated as either (a) a Financial LC; or (b) a Non-Financial LC.

 - 15 -

"Letter of Credit Agreement" means a Letter of Credit application, indemnity, service agreement, license agreement, electronic banking agreement or such other customary document as the Lender may reasonably require from time to time from the Borrower or other Persons when asked to issue a Letter of Credit under the Operating Facility.

"Letter of Credit Fee" means, with respect to any Letter of Credit, the fee set out in Section 5.5.

"Libor" means, with respect to any Libor Interest Period applicable to a Libor Loan, the rate per annum, based on a 360 day year, determined by the Lender to be the offered rate that appears on the page of the LIBOR 01 screen of Reuters Limited (or any successor or other commercially available source providing quotations of Libor as designated by the Lender from time to time) that displays the average ICE Benchmark Administration Limited (or its successor) Interest Settlement Rate for deposits in U.S. Dollars (for delivery on the first day of such Libor Interest Period) with a term equal to such Libor Interest Period, determined as of approximately 11:00 a.m. (London, England time) two Business Days prior to the first day of such Libor Interest Period. If such "LIBOR 01 Page" is not available, then "Libor" shall mean, with respect to any Libor Interest Period applicable to a Libor Loan, the rate determined by the Lender based on a 360 day year, rounded upwards, if necessary, to the nearest whole multiple of 1/100%, at which the Lender, in accordance with its normal practice, would be prepared to offer to leading banks in the London interbank market for delivery by the Lender on the first day of the applicable Libor Interest Period for a period equal to the number of days in such Libor Interest Period, deposits in U.S. Dollars of amounts comparable to the principal amount of such Libor Loan to be outstanding during such Libor Interest Period, at or about 11:00 a.m. (London, England time) two Business Days prior to a Borrowing Date, Conversion Date or Rollover Date, as the case may be, for such Libor Interest Period; provided that, if the rate determined above shall ever be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement.

"Libor Interest Date" means the date falling on the last day of each Libor Interest Period; provided that if the Borrower selects a Libor Interest Period for a period longer than three months, the Libor Interest Date shall be each date falling every three months after the beginning of such Libor Interest Period and the date falling on the last day of such Libor Interest Period.

"Libor Interest Period" means, with respect to each Libor Loan, the period (subject to availability) of approximately one (1) month, two months, three months or six months (as selected by the Borrower and notified to the Lender) commencing on and including the Borrowing Date, Conversion Date or Rollover Date, as the case may be, applicable to such Libor Loan and ending on and including the last day of such period; provided that no Libor Interest Period may be selected which ends after the Maturity Date.

"Libor Loan" means loans in U.S Dollars made by the Lender to the Borrower under the Operating Facility on which the interest rate is calculated with reference to Libor.

"Liquidity" means, at any time, (a) the aggregate cash and cash equivalents (each as determined in accordance with GAAP) held by the Loan Parties with the Lender at such time and not subject to a voluntary Permitted Encumbrance (other than in favour of the Lender) plus (b) when calculated for the purposes of determining the amount of Liquidity in relation to determining whether an acquisition is a Permitted Acquisition, the amount of cash and cash equivalents held by any Person whose Equity Securities are being acquired as part of such acquisition, determined on a consolidated basis.

 - 16 -

"Loan Documents" means this Agreement, the Security and any other document, instrument, agreement or certificate in favour of the Lender executed in connection herewith, or contemplated hereunder and when used in relation to any Person, "Loan Documents" shall mean and refer to the Loan Documents executed and delivered by such Person.

"Loan Parties" means the Borrower and the Guarantors.

"Material Acquisition" means an acquisition or series of acquisitions by one or more Loan Parties of shares or other assets where the aggregate purchase price thereof is in excess of Redacted.

"Material Adverse Effect" means, when used in relation to the Loan Parties, a material adverse effect on (i) the business, property, assets, liabilities, operations, condition (financial or otherwise) or affairs of the Loan Parties taken as a whole, or (ii) the ability of any Loan Party to perform its obligations under, or the ability of the Lender to enforce any of its rights and remedies under, any of the Loan Documents, and when used in relation to any other Person has a similar meaning.

"Material Contract" means, collectively, (a) the contracts listed in Schedule H hereto and (b) any other right, interest, agreement, arrangement or understanding entered into by any Loan Party, whether written or oral, the loss or termination of which (without replacement), or under which the acceleration of any payment obligation, in each case by or of such Loan Party, would have a Material Adverse Effect, as each of the same may be amended, modified, supplemented, restated or replaced, subject to and in accordance with the provisions of this Agreement.

"Material Disposition" means a disposition or series of dispositions by one or more Loan Parties of shares or other assets where the aggregate purchase price thereof is in excess of Redacted.

"Material Subsidiary" means:

(a) any direct or indirect Subsidiary of the Borrower in which the Borrower has no less than 50.1% ownership interest of, directly or indirectly (i) owns 5% or more of the assets as shown on the consolidated balance sheet in the financial statements of the Borrower most recently provided to the Lender or (ii) accounts for 5% or more of EBITDA for the period covered by the financial statements of the Borrower most recently provided to the Lender;

(b) any Subsidiary of the Borrower which has a direct or indirect ownership interest in a Material Subsidiary; and

(c) any other Subsidiary of the Borrower designated (and not de-designated) as a Material Subsidiary by the Borrower from time to time pursuant to, and in compliance with Section 8.5,

but excluding any Excluded Foreign Subsidiary.

"Maturity Date" means [n], 2024. [NTD: date 3 years from closing to be inserted]

"Meta" means Meta Growth Corp. and its successors.

"Multiemployer Plan" means a Plan that constitutes a "multiemployer plan" within the meaning of Section 3(37) of ERISA.

 - 17 -

"Net Income" means, in respect of any period and as determined in accordance with GAAP, an amount equal to the net income from continuing operations of the Borrower on a consolidated basis.

"Net Sale Proceeds" means, in connection with the sale, lease, transfer or other disposition of any Property or part thereof, the gross proceeds arising from or in connection with such disposition, net of GST and like value-added taxes payable in connection with such disposition, amounts reserved for indemnification under the applicable disposition agreement, adjustment of purchase price or similar obligations and amounts required to be applied to the repayment of Debt secured by Permitted Encumbrances against the assets so disposed (provided that the repayment of such Debt is not otherwise restricted under the terms of this Agreement or any other Loan Document) and after deducting all other reasonable selling and legal expenses.

"Non-Acceptance Lender" shall mean a Lender which is either unable to, or does not customarily, accept Bankers' Acceptances and for greater certainty includes all Lenders that are not Canadian chartered banks.

"Non-Cannabis Accessory" means a product used in the consumption of tobacco and other legal herbs that is not represented to be used in conjunction with Cannabis by the Loan Parties in respect of the Cannabis Business and which the production, sale, storage and distribution thereof does not require either Cannabis Authorizations or CBD Authorizations.

"Non-Cannabis Accessory Business" means the distribution and retail sale of Non-Cannabis Accessories for adult recreational purposes and uses in the Qualified Jurisdictions and includes any business that is reasonably related or ancillary thereto (excluding, for certainty, Cannabis Accessories), as well as any services related to Non-Cannabis Accessories; provided that the foregoing shall at all times exclude any Cannabis Business or CBD Business.

"Non-Financial LC" means a Letter of Credit that is not a Financial LC.

"Non-Recourse Subsidiary" means each Subsidiary of the Borrower which either:

(a) directly or indirectly (i) does not own 5% or more of consolidated total assets as shown on the consolidated statement of financial position in the financial statements of the Borrower most recently provided to the Lender and (ii) does not account for 5% or more of EBITDA for the four (4) Fiscal Quarter periods covered by the financial statements of the Borrower most recently provided to the Lender; or

(b) does not operate in any Qualified Cannabis Jurisdiction or Qualified CBD Jurisdiction and for which the Lender has confirmed in writing may be designated a Non-Recourse Subsidiary (each, an "Excluded Foreign Subsidiary"),

provided that if the Borrower would not meet the Ring-Fence Test without the inclusion of any such Subsidiary under subsection (a) above as a Material Subsidiary, such Subsidiary or Subsidiaries of the Borrower shall be designated as Material Subsidiaries as are required to meet the Ring-Fence Test and any such Subsidiary so designated shall not be a Non-Recourse Subsidiary.

"Notice of Borrowing" means a notice requesting a Borrowing to be given to the Lender in writing as described in Section 3.1 hereof.

 - 18 -

"OCN" means Opaskwayak Cree Nation.

"OCN Loan Agreements" means, collectively:

(a) the unsecured loan agreement between OCN, as lender and Meta (under its prior name National Access Cannabis Corp.), as debtor, dated as of December 14, 2018, as amended to the date hereof; and

(b) the unsecured loan agreement between OCN, as lender and Meta (under its prior name National Access Cannabis Corp.), as debtor, dated as of December 18, 2019, as amended to the date hereof;

each as may be further amended, supplemented, restated, replaced or otherwise modified from time to time, in accordance with the terms of this Agreement.

"Operating Facility" has the meaning given to such term in Section 2.1.

"Operating Facility Limit" has the meaning given to such term in Section 2.1.

"Outstanding Borrowings" means, at the time of determination, the aggregate of (i) the outstanding principal amount of all Prime Rate Loans, U.S. Base Rate Loans and Libor Loans; (ii) the face amount of all outstanding Bankers' Acceptances in respect of the Operating Facility; and (iii) the face amount of all outstanding Letters of Credit issued in respect of the Operating Facility.

"Outstanding Obligations" means the aggregate of (i) Outstanding Borrowings, (ii) all unpaid interest and fees thereon as herein provided, (iii) all other indebtedness, liabilities and obligations (including, without limitation, under any indemnities) and all other fees, charges and expenses required to be paid by the Borrower under the Operating Facility to the Lender hereunder or pursuant to the Security or pursuant to any other written agreements relating to this Agreement now or hereafter entered into between the Borrower under the Operating Facility and the Lender.

"PATRIOT Act" means the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)).

"Pension Event" shall mean the occurrence of any of the following in respect of a defined benefit Pension Plan: (a) the board of directors of any Loan Party passes a resolution to terminate or wind-up in whole or in part any Pension Plan or any Loan Party otherwise initiates any action or filing to voluntarily terminate or wind up in whole or in part any Pension Plan; (b) the institution of proceedings by any Governmental Authority to terminate in whole or in part any Pension Plan, including notice being given by the Alberta Superintendent of Pensions or another Governmental Authority that it intends to proceed to wind-up in whole or in part a Pension Plan; (c) there is a cessation or suspension of contributions to the fund of a Pension Plan that are made in accordance with the terms of the Pension Plans or Pension Laws by a Loan Party (other than a cessation or suspension of contributions that is due to an administrative error); (d) the receipt by a Loan Party of correspondence from any Governmental Authority related to the likely wind up or termination (in whole or in part) of any Pension Plan; and (e) the wind up or partial wind up of a Pension Plan.

"Pension Laws" means the Employment Pension Plans Act (Alberta), the Employment Pension Plans Regulations (Alberta), the Income Tax Act (Canada), the Income Tax Regulations (Canada) and all other applicable provincial or federal pension standards legislation and regulations thereunder and "Pension Law" means any one of them.

 - 19 -

"Pension Plan" means each pension plan required to be registered under Pension Laws which is maintained or contributed to by, or to which there is or may be an obligation to contribute by, any Loan Party in respect of any Person's employment in Canada with such Loan Party but does not include (a) the Canada Pension Plan or the Quebec Pension Plan as maintained by the Government of Canada or the Province of Quebec, respectively; or (b) plans to which any Loan Party contributes which are not maintained or administered by the Loan Party or any of its Affiliates.

"Permitted Acquisition" means the acquisition by the Borrower of the remaining 20% of Equity Securities of Fab Nutrition LLC and any other acquisition by a Loan Party which complies with the following:

(a) where no Default or Event of Default has occurred and is continuing or would be caused thereby;

(b) which is of a Person organized in and carrying on business only in the Qualified Jurisdictions and which is in the Permitted Business (or if any asset acquisition, is of assets in a Qualified Jurisdiction and used or useful in the Permitted Business, as applicable);

(c) which:

(i) if such acquisition is an acquisition of assets, such acquiring Loan Party acquired all or substantially all of the assets of the proposed acquisition target; or

(ii) if such acquisition is an acquisition of Equity Securities, such acquiring Loan Party acquires or otherwise owns not less than 100% of the Equity Securities of the proposed acquisition target;

(d) where the purchase price of such acquisition does not exceed $Redacted;

(e) where the purchase price of such acquisition, when totalled with the purchase price of all other Permitted Acquisitions made during the same Financial Year does not exceed $Redacted;

(f) when Liquidity (together with Liquidity of any Person whose Equity Securities are being acquired) exceeds $Redacted;

(g) in respect of which the Borrower has provide a pro forma Compliance Certificate which demonstrates to the Lender's satisfaction that after giving effect to the acquisition, inter alia, the Borrower will be in pro forma compliance with the covenants required under this Agreement as at the date of such acquisition (calculated on a pro forma basis);

(h) in respect of which the Borrower has provided the Lender, not less than 21 days prior to the closing of such acquisition satisfactory due diligence materials (including, without limitation, financial information, the purchase and sale agreement, fairness opinions and appraisals (if applicable));

 - 20 -

(i) in respect of which the Lender has received satisfactory evidence that the business or assets acquired shall be free and clear of all Security Interests, other than Permitted Encumbrances;

(j) in respect of which the Borrower has demonstrated to the Lender's satisfaction that the Borrower has sufficient funding to close such acquisition;

(k) in respect of which the Borrower has demonstrated to the Lender's satisfaction that all operating permits, approvals and consents (including, for certainty, all Cannabis Authorizations) relating to such acquisition are in place; and

(l) in respect of which the Borrower has provided an officer's certificate of the Borrower containing information satisfactory to the Lender (acting reasonably), in form and substance satisfactory to the Lender (acting reasonably), regarding, inter alia, the matters enumerated above and certifying that such acquisition does not and would not reasonably be expected to have a Material Adverse Effect;

provided that, notwithstanding the foregoing, a Hostile Acquisition shall not be a Permitted Acquisition.

"Permitted Business" means Cannabis Business conducted in Qualified Cannabis Jurisdictions, CDB Business conducted in Qualified CDB Jurisdictions and Non-Cannabis Accessory Business conducted in Qualified Jurisdictions.

"Permitted Debt" means the following Debt of the Loan Parties:

(a) the Outstanding Obligations;

(b) current accounts payable arising in the ordinary course of business from the purchase of goods and services;

(c) Debt in respect of Finance Leases incurred in compliance with the terms hereof;

(d) Debt arising pursuant to the terms of a Permitted Encumbrance;

(e) Debt owing to another Loan Party;

(f) Debt owing in respect of the Aurora Debenture and the Aurora Debt Restructuring Agreement, and any refinancings, modifications, renewals and extensions of such Debt, provided that (i) the principal amount of such Debt shall not be increased and (ii) such Debt is subordinated and postponed to the Outstanding Obligations on terms set forth in a postponement and subordination agreement satisfactory to the Lender, in its sole discretion;

(g) Debt owing in respect of the OCN Loan Agreements, and any refinancings, modifications, renewals and extensions of such Debt provided that (i) the principal amount of such Debt shall not be increased and (ii) such Debt remains unsecured at all times;

 - 21 -

(h) Debt owing in respect of the Dreamweavers Deferred Payment and any refinancings, modifications, renewals and extensions of such Debt provided that (i) the principal amount of such Debt shall not be increased and (ii) such Debt remains unsecured at all times;

(i) Debt owing in respect of the Aphria Debenture and any refinancings, modifications, renewals and extensions of such Debt provided that (i) the principal amount of such Debt shall not be increased and (ii) such Debt remains unsecured at all times;

(j) Debt owing in respect of the Cay Innovations Loan Agreement and any refinancings, modifications, renewals and extensions of such Debt provided that (i) the principal amount of such Debt shall not be increased and (ii) such Debt remains unsecured at all times;

(k) Debt owing in respect of the Redacted Redacted and secured by a mortgage charged registered on or about January 17, 2020 against certain real property of the Borrower (the "Windsor Mortgage") provided that the principal amount of such Debt shall not be increased and the security held in respect of such Debt is limited to the Windsor Mortgage;

(l) Debt owing in respect of the Canadian Emergency Business Account loan program ("CEBA"), provided such Debt remains at all times in compliance with the CEBA terms and eligibility and in accordance with the requirements to obtain all eligible reductions of principal amount owing thereunder available pursuant to CEBA;

(m) for the period six months from the date of this Agreement but ceasing immediately thereafter, Debt owing to Bank of Montreal in respect to credit cards provided to the Borrower and its Subsidiaries, provided that such Debt is secured solely by cash collateral in an amount not exceeding $Redacted (the "BMO Cash Collateral");

(n) Debt owing in respect to credit cards provided to the Borrower and its Subsidiaries in the United States up to a maximum aggregate amount of Redacted, provided that such Debt is secured solely by cash collateral in an amount not exceed Redacted (the "US Credit Card Cash Collateral");

(o) the PPP Loan up to a maximum principal amount of Redacted, provided that (i) the PPP Loan is unsecured at all times, (ii) the PPP Loan complies in all material respects with the applicable requirements of the CARES Act, including but not limited to, the requirements regarding use of the proceeds of the PPP Loan, and (iii) the applicable Loan Party uses commercially reasonably efforts to comply with Section 1106 of the CARES Act to obtain forgiveness of the PPP Loan to the extent available thereunder;

(p) the Small Business Administration EIDL Program Loan up to a maximum principal amount of Redacted made to DS Distribution Inc. under a Loan Authorization and Agreement dated May 21, 2020 pursuant to federal government program supporting small business recovery from COVID-19; provided all applicable requirements in respect to such loan are complied with;

 - 22 -

(q) prior to the making of the initial Advance hereunder, Debt secured by Permitted Encumbrances under subsection (p) of the definition thereof; and

(r) other unsecured Debt, or Debt which is secured solely by Permitted Encumbrances, in an aggregate principal amount not exceeding $Redacted at any time for all Loan Parties.

"Permitted Dispositions" means, in respect of the Loan Parties:

(a) sales of inventory in the ordinary course of business in accordance with prudent industry practice;

(b) any sale, lease, transfer or other disposition of any tools, implements, equipment or machinery which have become worn out, unserviceable, obsolete, unsuitable or unnecessary in operations;

(c) assets traded in the ordinary course of business for assets of equal or greater value;

(d) any sale, lease, transfer or other disposition of Property (excluding any sale or disposition included in clauses (a) through (c) above, and in (e) and (f) below), the fair market value of which, when taken in the aggregate in respect of all such sales and dispositions by all Loan Parties does not exceed $Redacted over the term of this Agreement;

(e) any sale, lease, transfer or other disposition of Property by a Loan Party to another Loan Party; and

(f) any other sale, lease, transfer or other disposition of Property by a Loan Party to which the Lender provides its prior written consent,

provided that with respect to the Permitted Dispositions referred to in clause (d) above, no Event of Default exists at the time such Permitted Disposition is made or would result after giving effect to such Permitted Disposition.

"Permitted Encumbrances" means:

(a) inchoate or statutory liens or trust claims for taxes, assessments and other governmental charges or levies which are not delinquent or the validity of which are currently being contested in good faith by appropriate proceedings, provided that there shall have been set aside a reserve to the extent required by GAAP in an amount which is reasonably adequate with respect thereto;

(b) the right reserved to, or vested in, any municipality or governmental or other public authority by the terms of any lease, license, franchise, grant, or permit acquired by a Loan Party, or by any statutory provision, to terminate any such lease, license, franchise, grant or permit, or to require annual or periodic payments as a condition of the continuance thereof;

(c) inchoate or statutory liens of contractors, subcontractors, mechanics, suppliers, materialmen and others in respect of construction, maintenance, repair or operation of assets or properties, or other like possessory liens and public utility liens provided the same are not registered as encumbrances against the title to any real or personal property of a Loan Party or, if registered, being contested actively and diligently in good faith by appropriate and timely proceedings and all enforcement proceedings have been stayed;

 - 23 -

(d) easements, rights-of-way, servitudes or other similar rights in land (including, without in any way limiting the generality of the foregoing, rights-of-way and servitudes for railways, sewers, drains, gas and oil pipelines, gas and water mains, electric light and power and telephone or telegraph or cable television conduits, poles, wires and cables) granted by a Loan Party (or its predecessor in interest) to or reserved or taken by other persons which singularly or in the aggregate do not materially detract from the value of the land concerned or materially impair its use in the operation of the Property and the business of the Loan Parties;

(e) liens arising in connection with workers' compensation, unemployment insurance, pension, employment or other social benefits laws or regulations which are not yet due or delinquent or the validity of which is being contested in good faith;

(f) liens under or pursuant to any judgment rendered or claim filed which are or will be appealed in good faith provided any execution thereof has been stayed;

(g) title defects which are of a minor nature and in the aggregate will not materially impair the value or the use of lands for the purposes for which it is held;

(h) the reservations, limitations, provisos and conditions, if any, expressed in any original grants from the Crown;

(i) liens or security interests taken or reserved in collateral (a) to secure payment of all or part of its price or (b) taken by a Person who gives value for the purpose of enabling the acquisition of rights in or to the collateral to the extent that the value is applied to acquire the rights;

(j) liens in respect of Finance Leases, provide that such liens are of a specific nature;

(k) the Security;

(l) liens in respect of operating leases, provided that such liens are of a specific nature (and excluding for greater certainty floating charges);

(m) liens in respect of Premises Leases, provided such liens are landlord distraint or other statutory liens or cash collateral deposits in an amount not exceeding two months' rent for such Premises;

(n) zoning restrictions and other similar encumbrances or privileges affecting real property which do not, in the aggregate, materially impair the value or the use of any lands;

(o) Security Interests (other than those hereinbefore listed) of a specific nature (and excluding for greater certainty floating charges) on properties and assets having a fair market value not in excess of Redacted in aggregate;

 - 24 -

(p) prior to the making of the initial Advance hereunder, each of the following:

(i) Alberta Personal Property Security Act Registration No. 18111212067 in favour of TSX Trust Company, as secured party;

(ii) Alberta Personal Property Security Act Registration No. 18111212072 in favour of TSX Trust Company, as secured party;

(iii) British Columbia Personal Property Security Act Registration No.147175L in favour of TSX Trust Company, as secured party;

(iv) Ontario Personal Property Security Act File No. 745758504, Registration No. 20181113 0910 1862 6401, in favour of TSX Trust Company, as secured party;

(v) Alberta Personal Property Security Act Registration No. 21072714477 in favour of Windermere Water And Sewer Company Inc., as secured party;

(vi) Alberta Personal Property Security Act Registration No. 20010628805 in favour of Windsor Private Capital Limited Partnership, as secured party;

(vii) Alberta Personal Property Security Act Registration No. 20010628734 in favour of Windsor Private Capital Limited Partnership, as secured party;

(viii) Alberta Personal Property Security Act Registration No. 20010628768 in favour of Windsor Private Capital Limited Partnership, as secured party;

(ix) Alberta Personal Property Security Act Registration No. 20010628772 in favour of Windsor Private Capital Limited Partnership, as secured party;

(x) Alberta Personal Property Security Act Registration No. 20010628962 in favour of Windsor Private Capital Limited Partnership, as secured party;

(xi) British Columbia Personal Property Security Act Registration No. 006977M in favour of Windsor Private Capital Limited Partnership, as secured party;

(xii) Ontario Personal Property Security Act File No. 759082392, Registration No. 20200106 1348 1590 4094, in favour of Windsor Private Capital Limited Partnership, as secured party;

(xiii) Ontario Personal Property Security Act File No. 759082581, Registration No. 20200106 1350 1590 4098, in favour of Windsor Private Capital Limited Partnership, as secured party; and

(xiv) Ontario Personal Property Security Act File No. 776619954, Registration No. 20210922 0948 1031 7385, in favour of Her Majesty in Right of Ontario Represented by the Minister of Finance, as secured party,

which, for certainty, shall cease to be Permitted Encumbrances for the purposes of satisfaction of waiver of the conditions set forth in 6.2 and thereafter.

(q) Security Interests and other encumbrances identified in Schedule C hereto.

 - 25 -

Provided, however, that the designation of an encumbrance as a "Permitted Encumbrance" is not, and shall not be deemed to be, an acknowledgment by the Lender that the encumbrance shall have priority over the claims of the Lender against a Loan Party or its assets.

"Permitted Investment" means any one or more of the following:

(a) Investments in or to a Loan Party;

(b) Investments that are Permitted Acquisitions; and

(c) Investments in Non-Recourse Subsidiaries which in the aggregate over the term of this Agreement do not exceed to Redacted.

"Person" includes an individual, a partnership, a joint venture, a trust, an unincorporated organization, a company, a corporation, a limited liability company, an association, a government or any department or agency thereof and any other incorporated or unincorporated entity.

"PPP Loan" means all amounts received by a Loan Party from Governmental Authorities in connection with the US Paycheck Protection Program established under 15 U.S.C. 636(a)(36) (as added to the Small Business Act by Section 1102 of the CARES Act).

"Premises Lease" means a lease of land and buildings by a Loan Party for use by it in the ordinary course of its business operations.

"Prime Rate" means the fluctuating interest rate per annum, expressed on the basis of a year of 365 or 366 days, as applicable, which is equal at all times to the greater of:

(a) the rate of interest most recently announced by ATB Financial from time to time as its prime interest rate for Canadian Dollar commercial loans made in Canada; and

(b) the CDOR Rate for 30 days bankers' acceptances plus 100 Basis Points.

"Prime Rate Loans" means loans in Canadian Dollars made by the Lender to the Borrower under the Operating Facility on which the interest rate is calculated with reference to the Prime Rate.

"Priority Payables" means, with respect to any Person at any time, the aggregate amount of such debts, liabilities and obligations payable by such Person at such time to any other Person or any Governmental Authority, including, without limitation, employment insurance premiums, Canada Pension Plan contributions, vacation pay, withholding tax liabilities, goods and services tax, all sales and consumption taxes, Goods and Services Tax, and customs duties, to the extent that in a bankruptcy, receivership, winding-up, liquidation, realization or like proceeding the same would or could potentially rank in priority to the Outstanding Borrowings.

"Property" means any moveable or immoveable or personal or real property owned or leased by a Loan Party.

"Qualified Cannabis Jurisdiction" means a country in which it is legal in all political subdivisions therein (including for greater certainty on a federal, state, provincial, territorial, municipal and local basis) to undertake any Cannabis Activities and the Cannabis Business of the Loan Parties; provided that in each case: (a) such country has been approved in writing by the Lender in its sole discretion, (b) such country does not include the United States of America without the prior written consent of the Lender, and (c) if required by the Lender, the ability to undertake Cannabis Activities to the extent permitted by Applicable Law therein is confirmed by a legal opinion provided by the Borrower's counsel in such jurisdiction, in form and substance satisfactory to the Lender. The Lender may in its discretion from time to time: (i) upon receipt of a written request by the Borrower, designate any jurisdiction a Qualified Cannabis Jurisdiction provided that the above-noted criteria are satisfied; and (ii) revoke the designation of any jurisdiction as a Qualified Cannabis Jurisdiction by written notice to the Borrower if such criteria are not satisfied. As of the date hereof, Canada is the only Qualified Cannabis Jurisdictions.

 - 26 -

"Qualified CBD Jurisdiction" means the United States of America, Canada, and such other countries as the Borrower may designate from time to time provided, however, that in each case: (a) such country has been approved in writing by the Lender in its sole discretion, and (b) if required by the Lender, the ability to undertake CBD Activities and CBD Business to the extent permitted by Applicable Law therein is explained by a legal opinion provided by the Borrower's counsel for such jurisdiction, including any applicable political subdivisions, in form and substance satisfactory to the Lender. The Lender may in its discretion from time to time: (i) upon receipt of a written request by the Borrower, designate any jurisdiction a Qualified CBD Jurisdiction provided that the above-noted criteria are satisfied; and (ii) revoke the designation of any jurisdiction as a Qualified CBD Jurisdiction by written notice to the Borrower if such criteria are not satisfied. As of the date hereof, Canada and the United States are the only Qualified CBD Jurisdictions.

"Qualified Jurisdiction" means any of Qualified Cannabis Jurisdiction, a Qualified CBD Jurisdiction and a country in which it is legal in all political subdivisions therein (including for greater certainty on a federal, state, provincial, territorial, municipal and local basis) to undertake any Non-Cannabis Accessory Business; provided that in each case: (a) such country has been approved in writing by the Lender in its sole discretion, (b) such country does not include any countries other than Canada and the United States of America without the prior written consent of the Lender, and (c) if required by the Lender, the ability to undertake the applicable activities of the Loan Parties therein to the extent permitted by Applicable Law therein is confirmed by a legal opinion provided by the Borrower's counsel in such jurisdiction, in form and substance satisfactory to the Lender. The Lender may in its discretion from time to time: (i) upon receipt of a written request by the Borrower, designate any jurisdiction a Qualified Jurisdiction provided that the above-noted criteria are satisfied; and (ii) revoke the designation of any jurisdiction as a Qualified Jurisdiction by written notice to the Borrower if such criteria are not satisfied. As of the date hereof, Canada and the United States are the only Qualified Jurisdictions.

"Reference Discount Rate" means:

(a) with respect to a Lender which is not a Non-Acceptance Lender and with respect to a BA Loan with the same maturity date to be accepted by the Lender hereunder the CDOR Rate per annum to be applied by the Lender in accepting a Draft which discount rate shall be determined at or about 10:00 a.m. (Calgary, Alberta time) on the day on which such Draft is accepted based upon a 365 day year and otherwise in accordance with the Lender's standard practice for bankers acceptances having comparable face value and an identical maturity date to the principal amount and maturity date of such BA Loan; and

(b) with respect to a Lender which is a Non-Acceptance Lender and with respect to a BA Equivalent Loan with the same maturity date to be advanced by a Non-Acceptance Lender, the CDOR Rate per annum to be applied by the Lender in making a BA Equivalent Loan which discount rate shall be determined at or about 10:00 a.m. (Calgary, Alberta time) on the date of advance of such BA Equivalent Loan for bankers acceptances having comparable face value and an identical maturity date to the principal amount and maturity date of such BA Equivalent Loan.

 - 27 -

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

"Release" includes discharge, spray, inject, inoculate, abandon, deposit, spill, leak, seep, pour, emit, empty, throw, dump, place, escape, leach, disperse, migrate and exhaust, and when used as a noun (as applicable) has a similar meaning.

"Ring-Fence Test" shall have the meaning given to such term in Section 8.5(a) hereof.

"Rollover" means, in respect of a maturing Bankers' Acceptance or Libor Loan, the provision by the Lender of a further Borrowing by way of a Bankers' Acceptance or Libor Loan, as applicable, in the same currency, the proceeds of which are to be applied in whole or part to the repayment of the maturing Borrowing, and with respect to any outstanding Letter of Credit, the extension of the expiry date thereof.

"Rollover Date" means the date a Rollover is effected.

"Rollover Notice" means a notice requesting a Rollover to be given to the Lender in writing, substantially in form of Schedule A hereto as described in Section 3.3 hereof.

"Sanctions" means sanctions administered or enforced from time to time by the U.S. government, including those administered by OFAC, the U.S. Department of State, the United Nations Security Council, the European Union, Her Majesty's Treasury or other relevant sanctions authority.

"Security" means the security and agreements described in Article 9 and any additional security issued from time to time by any Person in support of the liabilities and obligations hereunder, as amended, restated or replaced from time to time.

"Security Interest" means a mortgage, charge, floating charge, pledge, hypothec, assignment, lien, interest claim, encumbrance, conditional sale agreement or other title retention agreement or other security interest or arrangement of any kind or character intended to create a security interest in substance regardless of whether the Person creating the interest retains an equity of redemption, and any agreement to provide or enter into at any time or on the happening of any event such a security interest or arrangement.

"Specified Debt" means the Debt described in paragraphs (f) to (k) (inclusive) of the definition of Permitted Debt and the Debt owing under the Windermere Debenture.

"Stamping Fee" means, with respect to a Bankers' Acceptance, the fee payable in Canadian Dollars on the date of issuance thereof calculated: (i) by multiplying the face amount of the Bankers' Acceptance by the number of days in the Contract Period, then (ii) dividing the product thereof by 365, then (iii) multiplying the quotient by the Applicable Margin.

"Standby Fee" shall have the meaning given to such term in Section 5.7 hereof.

 - 28 -

"Structured Payment Amount" has the meaning given to it in the Aurora Debt Restructuring Agreement as in force and effect as of the date of this Agreement.

"Subsidiary" means a body corporate which is a subsidiary of another body corporate within the meaning of that term as used in the Business Corporations Act (Alberta) as amended from time to time, and any individual, sole proprietorship, partnership, joint venture, trust, unincorporated organization, association, limited liability company, corporation, institution, entity, or party as to which any Loan Party owns, directly or indirectly, at least 50% of the outstanding shares of Equity Securities or other interests having ordinary voting power for the election of directors, officers, managers, trustees or an equivalent controlling interest in Lender's judgment.

"Swaps" means a Currency Swap or Interest Swap.

"Tax" and "Taxes" include all present and future income, corporation, capital gains, capital, value-added, goods and services taxes and other taxes, levies, imposts, stamp taxes, duties, charges to tax, fees, deductions, withholdings and all penalties, interest and other payments on or in respect thereof.

"Upfront Fee" shall have the meaning given to such term in Section 5.8 hereof.

"U.S. Base Rate" means, with respect to U.S. Base Rate Loans on any day, the greater of:

(a) the annual rate of interest announced from time to time by the Lender as being its reference rate then in effect for determining interest rates on U.S. Dollar denominated commercial loans made by the Lender in Canada;

(b) the Federal Funds Rate plus one percent (1.00%); and

(c) the Libor rate for a Libor Interest Period of one month plus one percent (1.00%).

"U.S. Base Rate Loan" means loans in U.S Dollars made by the Lender to the Borrower under the Operating Facility on which the interest rate is calculated with reference to the U.S. Base Rate.

"U.S. Dollars" and the symbol "U.S. $" each means lawful money of the United States of America.

"Windermere" means Windermere Water and Sewer Company Inc., and its successors.

"Windermere Debenture" means the amended and restated secured convertible debentures issued by the Borrower dated February 11, 2021, as amended, restated, supplemented, replaced or otherwise up to the date of this Agreement.

"Windsor" means Windsor Private Capital Limited Partnership and its successors.

"Windsor Promissory Note" means the promissory note dated July 8, 2020 in the original principal amount of Redacted granted by the Borrower to Windsor as amended, restated, supplemented, replaced or otherwise modified from time to time in accordance with the terms of this Agreement.

"written" and "in writing" shall include printing, typewriting or any electronic means of communication capable of being visibly reproduced at the point of reception including telecopy, facsimile and electronic mail.

 - 29 -

1.2 Audited Financial Statements

Except as specifically provided in this Agreement, all references in this Agreement to audited financial statements of a Person, including the balance sheet and related statements of income, retained earnings and changes in financial position, mean financial statements prepared by the Person in accordance with GAAP, together with an opinion of an internationally recognized firm of accountants acceptable to the Lender acting reasonably, as auditor that the statements fairly present the financial position of the Person and the results of its operations for the Financial Year reported on in accordance with GAAP.

1.3 Canadian Currency

Unless otherwise specified herein, all amounts and values referred to in this Agreement shall be calculated in lawful money of Canada.

1.4 Interest Act

(a) Unless otherwise specified, all annual rates of interest referred to herein are based on a calendar year of 365 or 366 days, as the case may be. Where a rate of interest hereunder 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, such rate of interest shall be expressed as a yearly rate for the purposes of the Interest Act (Canada) by multiplying such 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.

(b) For purposes of the Interest Act (Canada), the principle of deemed reinvestment of interest shall 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.

1.5 Change in Rates

Any change in the Prime Rate or U.S. Base Rate is to be effective on the date such change is established whether or not the Borrower receives notice thereof.

1.6 Headings and Table of Contents

The division of this Agreement into Articles and Sections and the provision of a Table of Contents and the insertion of headings are for convenience of reference only and shall not affect the meaning or interpretation of this Agreement.

1.7 References

All references to Sections, Subsections, Paragraphs, Articles and Schedules are to Sections, Subsections, Paragraphs and Articles of and Schedules to this Agreement. The words "hereto", "herein", "hereof", "hereunder", "this Agreement" and similar expressions mean and refer to this Agreement.

 - 30 -

1.8 Number and Gender

Where the context so requires, words importing the singular include the plural and vice versa, and words importing gender include the masculine, feminine and neuter genders.

1.9 Maximum Interest Rate

(a) 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 the Lender 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 nunc pro tunc to the maximum amount or rate of interest, as the case may be, as would not be so prohibited by law or so result in a receipt by the Lender of interest at a criminal rate, such adjustment to be effected, to the extent necessary, as follows:

(i) firstly, by reducing the amount or rate of interest required to be paid under Sections 5.1, 5.2 or 5.3, as applicable, of this Agreement; and

(ii) 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);

(b) If, notwithstanding the provisions of clause (a) of this Section and after giving effect to all adjustments contemplated thereby, the Lender shall have received an amount in excess of the maximum permitted by such clause, then such excess shall be applied by the Lender to the reduction of the principal balance of the Outstanding Borrowings and not to the payment of interest or if such excessive interest exceeds such principal balance, such excess shall be refunded to the Borrower; and

(c) Any amount or rate of interest referred to in this Section shall be determined in accordance with generally accepted actuarial practices and principles at an effective annual rate of interest over the term of this Agreement on the assumption that any charges, fees or expenses that fall within the meaning of "interest" (as defined in the Criminal Code (Canada)) shall, if they relate to a specific period of time, be prorated over that period of time and otherwise be prorated over the terms of this Agreement and, in the event of dispute, a certificate of a Fellow of the Canadian Institute of Actuaries appointed by the Lender shall be conclusive for the purposes of such determination.

1.10 Lender to Act Reasonably

Wherever in this Agreement the Borrower is required to obtain the consent or the approval of the Lender or the Lender is otherwise required to make a determination, it is agreed that, subject to any other specific provision contained in this Agreement to the contrary, the consent, approval or other determination shall be made or withheld by the Lender acting reasonably.

 - 31 -

1.11 Schedules

The Schedules forming part of this Agreement are as follows:

Schedule A	-	Notice of Borrowing / Conversion Notice / Rollover Notice/ BA Notice
Schedule B	-	Form of Compliance Certificate
Schedule C	-	Specific Permitted Encumbrances
Schedule D	-	Organizational Structure and Jurisdictions
Schedule E	-	Litigation
Schedule F	-	Debt
Schedule G	-	Form of Assignment Agreement
Schedule H	-	Material Contracts
Schedule I	-	ERISA
Schedule J	-	CBD Supplier Attestation

Article 2
CREDIT FACILITIES

2.1 Operating Facility – Cdn. $10,000,000

Subject to the provisions of this Agreement, the Lender agrees to make available to the Borrower a revolving operating facility (the "Operating Facility") by way of Prime Rate Loans, U.S. Base Rate Loans, Libor Loans, Bankers' Acceptances, Letters of Credit (to a maximum amount of Redacted (or Equivalent Amount)) and Corporate MasterCard (to a maximum amount of Redacted). Outstanding Borrowings under the Operating Facility shall at no time exceed Cdn. $10,000,000 (or Equivalent Amount) (the "Operating Facility Limit").

2.2 Purpose and Availability of the Operating Facility

The Operating Facility shall only be available to assist the Borrower in financing working capital and for general corporate purposes (including Permitted Acquisitions). The principal amount of any Borrowing under the Operating Facility that is repaid may be reborrowed from time to time until the Maturity Date. The Borrower shall, subject to the terms of this Agreement in all regards (including notice requirements, types of availments and minimum availments and multiples), have the option to determine which types of advances shall be draw down under the Operating Facility and in combinations and proportions as set by the Borrower.

2.3 Permitted Increase in Operating Facility

The Borrower may, at any time and from time to time, request and increase to the Operating Facility Limit (by increasing the commitment of the Lender). The right to increase the Operating Facility Limit as aforesaid shall be subject to the following (for each such increase):

(a) the Lender, in its sole discretion, has approved the request for the increase to the Operating Facility;

 - 32 -

(b) all fees and expenses agreed to in writing between the Borrower and the Lender in connection with such increase shall be paid by the Borrower to the Lender;

(c) no Default or Event of Default shall have occurred and be continuing and the Borrower shall have delivered to the Lender an Officer's Certificate of the Borrower confirming the same and confirming (i) its corporate authorization to make such increase, (ii) the truth and accuracy in all material respects of its representations and warranties contained in Section 7.1 hereof as of such date, other than any such representations and warranties which expressly speak as of an earlier date and (iii) that no consents, approvals or authorizations are required for such increase (except as have been unconditionally obtained and are in full force and effect, unamended), each as at the effective date of such increase;

(d) the Borrower shall have delivered to the Lender an opinion of its legal counsel in form and substance as may be required by the Lender, acting reasonably (and such opinion shall, inter alia, opine as to the corporate authorization of the Borrower to effect such increase);

(e) the aggregate of all increases pursuant to this Section shall not exceed Cdn. $15,000,000 (or Equivalent Amount) and any such purported increase over such amount shall be null and void; and

(f) the Borrower and the Lender shall execute and deliver such documentation as is required by the Lender, acting reasonably, to effect the increase in question.

2.4 Evidence of Debt

The Lender shall maintain accounts and records evidencing the obligations of the Borrower to the Lender hereunder. The Lender's accounts and records shall constitute prima facie evidence of the Outstanding Borrowings of the Borrower to the Lender hereunder in the absence of manifest error. The Lender shall provide copies of such accounts and records to the Borrower upon the Borrower's reasonable request, but provision of such records shall not be required for the Lender to establish the obligations of the Borrower to the Lender hereunder unless a failure to provide such records results from the bad faith, gross negligence or wilful misconduct of the Lender (as determined by a final and non-appealable judgment of a court of competent jurisdiction).

2.5 Illegality

If the introduction of or any change in any Applicable Law or in the interpretation or application thereof by any court or by any Governmental Authority charged with the administration thereof, makes it unlawful or prohibited for the Lender to make, to fund or to maintain its commitment or any portion thereof or to perform any of its obligations under this Agreement, the Lender may, by thirty (30) days written notice to the Borrower (unless the provision of the Applicable Law requires earlier prepayment in which case the notice period shall be such shorter period as required to comply with the Applicable Law), terminate its obligations under this Agreement (or those which are unlawful or prohibited as the case may be) and in such event, the Borrower shall (to the extent required) prepay such Borrowings forthwith (or at the end of such period as the Lender in its discretion agrees), without notice or penalty (other than breakage costs), together with all accrued but unpaid interest and fees as may be applicable to the date of payment.

 - 33 -

2.6 Substitute Basis of Borrowing

(a) Libor Loans: Notwithstanding anything to the contrary herein contained, if at any time subsequent to the giving of a Notice of Borrower, a Conversion Notice or a Rollover Notice to the Lender by the Borrower with regard to any requested Libor Loan:

(i) the Lender (acting reasonably and in good faith) determines that by reason of circumstances affecting the London Interbank Eurodollar Market, adequate and fair means do not exist for ascertaining the rate of interest with respect to, or deposits are not available in sufficient amounts in the ordinary course of business at the rate determined hereunder to fund, a requested Libor Loan during the ensuing Libor Interest Period selected;

(ii) the Lender (acting reasonably and in good faith) determines that the making or continuing of the requested Libor Loan has been made impracticable by the occurrence of an event which materially adversely affects the London Interbank Eurodollar Market generally; or

(iii) the Lender has determined (acting reasonably and in good faith) that Libor will not or does not represent the effective cost to the Lender of U.S. Dollar deposits in the London Interbank Eurodollar Market for the relevant Libor Interest Period,

then the Lender shall give notice thereof to the Borrower as soon as possible after such determination, and the Borrower shall, within one Business Day after receipt of such notice and in replacement of the Notice of Borrowing, Conversion Notice or Rollover Notice, as the case may be, previously given by the Borrower, give the Lender a Notice of Borrowing, Conversion Notice or Rollover Notice, as the case may be, which specifies the drawdown of any other Borrowing or the Conversion of the relevant Libor Loan on the last day of the applicable Libor Interest Period into any other Borrowing which would not be affected by the notice from the Lender pursuant to this Section 2.6(a).

In the event the Borrower fails to give, if applicable, a valid replacement Conversion Notice or Rollover Notice with respect to the maturing Libor Loans which were the subject of a Conversion Notice or Rollover Notice, such maturing Libor Loans shall be converted on the last day of the applicable Libor Interest Period into U.S. Base Rate Loans as if a valid replacement Conversion Notice had been given to the Lender by the Borrower pursuant to the provisions hereof. In the event the Borrower fails to give, if applicable, a valid replacement Notice of Borrowing with respect to a Borrowing originally requested by way of a Libor Loan, then the Borrower shall be deemed to have requested a Borrowing by way of a U.S. Base Rate Loan in the amount specified in the original Notice of Borrowing and, on the originally requested Borrowing Date, the Lender (subject to the other provisions hereof) shall make available the requested amount by way of a U.S. Base Rate Loan.

(b) Bankers' Acceptances: If:

 - 34 -

(i) the Lender (acting reasonably and in good faith) makes a determination, which determination shall be conclusive and binding upon the Borrower, and notifies the Borrower, that there no longer exists an active market for bankers' acceptances accepted by the Lender; or

(ii) the Lender has determined (acting reasonably) that the Reference Discount Rate will not or does not accurately reflect the cost of funds or the discount rate which would be applicable to a sale of Bankers' Acceptances accepted by the Lender in the market;

then:

(A) the right of the Borrower to request Bankers' Acceptances from the Lender shall be suspended until the Lender (acting reasonably and in good faith) determines that the circumstances causing such suspension no longer exist, and so notifies the Borrower;

(B) any outstanding Notice of Borrowing requesting a Borrowing by way of Bankers' Acceptances shall be deemed to be a Notice of Borrowing requesting a Prime Rate Loan in the amount specified in the original Notice of Borrowing;

(C) any outstanding Conversion Notice requesting a Conversion of a U.S. Base Rate Loan or Libor Loan into a Bankers' Acceptance shall be deemed to be a Conversion Notice requesting a Conversion of such U.S. Base Rate Loan or Libor Loan into a Prime Rate Loan; and

(D) any outstanding Rollover Notice requesting a Rollover of a Bankers' Acceptance shall be deemed to be a Conversion Notice requesting a Conversion of such Bankers' Acceptances into a Prime Rate Loan.

The Lender shall promptly notify the Borrower of any suspension of the Borrower's right to request Bankers' Acceptances and of any termination of any such suspension.

2.7 Benchmark Replacement Setting.

Notwithstanding anything to the contrary herein or in any other Loan Document:

(a) Replacing Libor.

(i) On March 5, 2021 the Financial Conduct Authority ("FCA"), the regulatory supervisor of Libor's administrator ("IBA"), announced in a public statement the future cessation or loss of representativeness of overnight/Spot Next, 1-month, 3-month, 6-month and 12-month Libor tenor settings. On the earlier of (i) the date that all Available Tenors of Libor have either permanently or indefinitely ceased to be provided by IBA or have been announced by the FCA pursuant to public statement or publication of information to be no longer representative and (ii) the Early Opt-in Election Effective Date, if the then-current Benchmark is Libor, the Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of any setting of such Benchmark on such day and all subsequent settings without any amendment to, or further action or consent of any other party to this Agreement or any other Loan Document.

 - 35 -

(ii) Notwithstanding anything to the contrary herein or in any other Loan Document and subject to the proviso below in this Section 2.7(a)(ii), if a Term SOFR Transition Event and its related Term SOFR Transition Date have occurred prior to the Reference Time in respect of any setting of the then-current Benchmark, then the applicable Benchmark Replacement will replace the then-current Benchmark for all purposes hereunder or under any other Loan Document in respect of such Benchmark setting and subsequent Benchmark settings, without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document; provided that this Section 2.7(a)(ii) shall not be effective unless the Lender has delivered to the Borrower a Term SOFR Notice.

(b) Replacing Future Benchmarks. Upon the occurrence of a Benchmark Transition Event, the Benchmark Replacement will replace the then-current Benchmark for all purposes hereunder and under any Loan Document in respect of any Benchmark setting at or after 5:00 p.m. on the fifth Business Day after the date notice of such Benchmark Replacement is provided to the Borrower without any amendment to this Agreement or any other Loan Document, or further action or consent of the Borrower. At any time that the administrator of the then-current Benchmark has permanently or indefinitely ceased to provide such Benchmark or such Benchmark has been announced by the regulatory supervisor for the administrator of such Benchmark pursuant to public statement or publication of information to be no longer representative of the underlying market and economic reality that such Benchmark is intended to measure and that representativeness will not be restored, the Borrower may revoke any request for a borrowing of, conversion to or continuation of Borrowings to be made, converted or continued that would bear interest by reference to such Benchmark until the Borrower's receipt of notice from the Lender that a Benchmark Replacement has replaced such Benchmark, and, failing that, the Borrower will be deemed to have converted any such request into a request for a borrowing of or conversion to U.S. Base Rate Loans. During the period referenced in the foregoing sentence, the component of U.S. Base Rate based upon the Benchmark will not be used in any determination of U.S. Base Rate.

(c) Benchmark Replacement Conforming Changes. In connection with the implementation and administration of a Benchmark Replacement (including, for avoidance of doubt, in connection with the occurrence of Term SOFR Transition Event), the Lender will have the right to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of any other party to this Agreement.

 - 36 -

(d) Notices; Standards for Decision and Determinations. The Lender will promptly notify the Borrower of (i) the implementation of any Benchmark Replacement, (ii) the occurrence of a Term SOFR Transition Event and (iii) the effectiveness of any Benchmark Replacement Conforming Changes. Any determination, decision or election that may be made by the Lender pursuant to this Section 2.7, including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party hereto, except, in each case, as expressly required pursuant to this Section 2.7.

(e) Unavailability of Tenor of Benchmark. At any time (including in connection with the implementation of a Benchmark Replacement), (i) if the then-current Benchmark is a term rate (including Term SOFR or Libor), then the Lender may remove any tenor of such Benchmark that is unavailable or non-representative for Benchmark (including Benchmark Replacement) settings and (ii) the Lender may reinstate any such previously removed tenor for Benchmark (including Benchmark Replacement) settings.

(f) No Liability. The Lender does not warrant or accept responsibility for, and shall not have any liability with respect to, the administration, submission or any other matter related to the rates in the definition of "Libor" or with respect to any rate that is an alternative or replacement for or successor to any such rate (including any Benchmark Replacement) or the effect of any of the foregoing or of any Benchmark Replacement Conforming Changes.

(g) Definitions. As used in this Section 2.7:

"Available Tenor" means, as of any date of determination and with respect to the then-current Benchmark, as applicable, (x) if the then-current Benchmark is a term rate, any tenor for such Benchmark that is or may be used for determining the length of a Libor Interest Period or (y) otherwise, any payment period for interest calculated with reference to such Benchmark, as applicable, pursuant to this Agreement as of such date.

"Benchmark" means, initially, Libor; provided that if a replacement of the Benchmark has occurred pursuant to this Section 2.7, then "Benchmark" means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate. Any reference to "Benchmark" shall include, as applicable, the published component used in the calculation thereof.

"Benchmark Replacement" means, for any Available Tenor:

(a) for the purposes of clause (i) of Section 2.7(a) the first alternative set forth in the order below that can be determined by the Lender:

(1)       the sum of: (A) Term SOFR and (B) 0.11448% (11.448 basis points) for an Available Tenor of one-month's duration, 0.26161% (26.161 basis points) for an Available Tenor of three-months' duration, and 0.42826% (42.826 basis points) for an Available Tenor of six-months' duration; or;

 - 37 -

(2)       the sum of: (A) Daily Simple SOFR and (B) the spread adjustment selected or recommended by the Relevant Governmental Body for the replacement of the tenor of Libor with a SOFR-based rate having approximately the same length as the interest payment period specified in clause (a) of this definition; and;

(b) for the purposes of clause (ii) of Section 2.7(a)the sum of: (i) the alternate benchmark rate and (ii) an adjustment (which may be a positive or negative value or zero), in each case, that has been selected by the Lender and the Borrower as the replacement for such Available Tenor of such Benchmark giving due consideration to any evolving or then-prevailing market convention, including any applicable recommendations made by the Relevant Governmental Body, for U.S. Dollar-denominated syndicated or bi-lateral credit facilities at such time;

provided that, if the Benchmark Replacement as determined pursuant to clause (a) or (b) above would be less than the Floor, the Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Loan Documents.

"Benchmark Replacement Conforming Changes" means, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of "U.S. Base Rate," the definition of "Business Day," the definition of "Libor Loan", the definition of "Libor Interest Date", the definition of "Libor Interest Period", timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, length of lookback periods, the applicability of breakage provisions, and other technical, administrative or operational matters) that the Lender decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the Lender in a manner substantially consistent with market practice (or, if the Lender decides that adoption of any portion of such market practice is not administratively feasible or if the Lender determines that no market practice for the administration of such Benchmark Replacement exists, in such other manner of administration as the Lender decides is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).

"Benchmark Transition Event" means, with respect to any then-current Benchmark other than Libor, the occurrence of a public statement or publication of information by or on behalf of the administrator of the then-current Benchmark, the regulatory supervisor for the administrator of such Benchmark, the Board of Governors of the Federal Reserve System, the Federal Reserve Bank of New York, an insolvency official with jurisdiction over the administrator for such Benchmark, a resolution authority with jurisdiction over the administrator for such Benchmark or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark, announcing or stating that (i) such administrator has ceased or will cease on a specified date to provide all Available Tenors of such Benchmark, permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark or (ii) all Available Tenors of such Benchmark are or will no longer be representative of the underlying market and economic reality that such Benchmark is intended to measure and that representativeness will not be restored.

 - 38 -

"Daily Simple SOFR" means, for any day, SOFR, with the conventions for this rate (which will include a lookback) being established by the Lender in accordance with the conventions for this rate selected or recommended by the Relevant Governmental Body for determining "Daily Simple SOFR" for syndicated business loans; provided, that if the Lender decides that any such convention is not administratively feasible for the Lender, then the Lender may establish another convention in its reasonable discretion.

"Early Opt-in Election Effective Date" means, with respect to any Early Opt-in Election, the sixth Business Day after the date notice of such Early Opt-in Election is provided to the Borrower.

"Early Opt-in Election" means, the occurrence of:

(1)       a notification by the Lender that at least five currently outstanding U.S. dollar-denominated syndicated or bi-lateral credit facilities at such time contain (as a result of amendment or as originally executed) a SOFR-based rate (including SOFR, Term SOFR or any other rate based upon SOFR) as a benchmark rate (and such syndicated credit facilities are identified in such notice and are publicly available for review), and

(2)       the election by the Lender to trigger a fallback from Libor and the provision by the Lender of written notice of such election to the Borrower.

"Floor" means the benchmark rate floor, if any, provided in this Agreement initially (as of the execution of this Agreement, the modification, amendment or renewal of this Agreement or otherwise) with respect to Libor.

"Reference Time" means, with respect to any setting of the then-current Benchmark, the time determined by the Lender in its reasonable discretion.

"Relevant Governmental Body" means the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or any successor thereto.

"SOFR" means a rate per annum equal to the secured overnight financing rate for such Business Day published by the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate) on the website of the Federal Reserve Bank of New York, currently at http://www.newyorkfed.org (or any successor source for the secured overnight financing rate identified as such by the administrator of the secured overnight financing rate from time to time).

 - 39 -

"Term SOFR" means, for the applicable corresponding tenor, the forward-looking term rate based on SOFR that has been selected or recommended by the Relevant Governmental Body.

"Term SOFR Notice" means a notification by the Lender to the Borrower of the occurrence of a Term SOFR Transition Event.

"Term SOFR Transition Date" means the date that is ten Business Days after the Lender has provided a Term SOFR Notice to the Borrower pursuant to 2.7(a)(ii). For the avoidance of doubt, if the Term SOFR Transition Date occurs on the same day as, but earlier than, the Reference Time in respect of any determination, the Term SOFR Transition Date will be deemed to have occurred prior to the Reference Time for such determination.

"Term SOFR Transition Event" means the determination by the Lender that (a) Term SOFR has been recommended for use by the Relevant Governmental Body, (b) the administration of Term SOFR is administratively feasible for the Lender and the Borrower and (c) a Benchmark Replacement resulting in Term SOFR replacing any prior Benchmark has not previously occurred.

2.8 CDOR Discontinuance

(a) If at any time the Lender determines (which determination shall be conclusive absent manifest error) that a CDOR Discontinuance has occurred, then the Lender and the Borrower shall negotiate in good faith to establish an alternate rate of interest to the CDOR Rate that gives due consideration to the then prevailing market convention for determining a rate of interest for Bankers' Acceptances made in Canada at such time. Upon an agreement being reached, such parties shall enter into an amendment to this Agreement to reflect such alternate rate of interest (a "CDOR Successor Rate") and such other related changes to this agreement as may be applicable. Notwithstanding anything to the contrary in this Agreement, such amendment shall become effective without any further action or consent of any other party to this Agreement. If such CDOR Successor Rate shall be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement. In addition, the CDOR Rate shall not be included or referenced in the definition of Prime Rate.

(b) If no CDOR Successor Rate has been determined and a CDOR Discontinuance has occurred, the Lender will promptly so notify the Borrower. Thereafter, the obligation of the Lender to make or maintain Bankers' Acceptances, shall be suspended. Upon receipt of such notice, the Borrower may revoke any pending request for a Borrowing of, conversion to or roll over of a Bankers' Acceptance or, failing that, will be deemed to have converted such request into a request for an advance of Prime Rate Loans in the amount specified therein.

 - 40 -

(c) In this Section 2.8:

"CDOR Discontinuance" means the occurrence of one or more of the following events with respect to the CDOR Rate:

(1)       a public statement or publication of information by or on behalf of the administrator of the CDOR Rate announcing that such administrator has ceased or will cease to provide the CDOR Rate, permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide the CDOR Rate;

(2)       a public statement or publication of information by the regulatory supervisor for the administrator of the CDOR Rate, a governmental authority having jurisdiction, an insolvency official with jurisdiction over the administrator for the CDOR Rate, a resolution authority with jurisdiction over the administrator for the CDOR Rate or a court or an entity with similar insolvency or resolution authority over the administrator for the CDOR Rate, which states that the administrator of the CDOR Rate has ceased or will cease to provide the CDOR Rate permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide the CDOR Rate; or

(3)       a public statement or publication of information by the regulatory supervisor for the administrator of the CDOR Rate announcing that the CDOR Rate is no longer representative.

Article 3
PROCEDURES APPLICABLE TO BORROWINGS

3.1 Notice of Borrowing

Each Borrowing of:

(a) Prime Rate Loans and U.S. Base Rate Loans shall be made on at least one Business Day prior notice;

(b) Libor Loan shall be made on at least three Business Days prior notice;

(c) Bankers' Acceptances shall be made on at least two Business Days prior notice;

(d) Letters of Credit shall be made on at least two Business Days prior notice;

given not later than 10:00 a.m. (Calgary, Alberta time) by the Borrower to the Lender. Each such notice of a Borrowing (a "Notice of Borrowing") shall be given in such form as the Lender may from time to time reasonably specify, failing which such Notice of Borrowing shall be given by facsimile or other electronic transmission (including, for certainty, email (in PDF)), confirmed promptly by letter, and shall be in substantially the form of Schedule A hereto and shall specify therein:

(e) the requested date of such Borrowing;

 - 41 -

(f) the manner of such Borrowing;

(g) the aggregate amount of such Borrowing; and

(h) such additional matters as may be required by the Lender including in respect of Letters of Credit, the beneficiary thereof.

The Notice of Borrowing shall be irrevocable and binding on the Borrower.

3.2 Conversion Option

Subject to Sections 3.1 and 3.6, the Borrower may convert, in whole or in part, any Borrowing to another type of Borrowing. A Letter of Credit may not be converted. Notwithstanding the foregoing, a Bankers' Acceptance may only be converted on its maturity date and a Libor Loan may only be converted on the last day of the Libor Interest Period applicable to such Libor Loan or on any other day if the Borrower pays all amounts payable in respect thereof pursuant to Section 4.6., provided that:

(a) the Borrower delivers to the Lender a Conversion Notice within the notice periods provided in Section 3.1 for the type of Borrowing into which the Borrower wishes to convert;

(b) after the Conversion, the Borrower will remain in compliance with the Operating Facility Limit set out in Article 2;

(c) if the requested Conversion is either from or into Libor Loans or Bankers' Acceptances, then:

(i) if a Default has occurred and is continuing, the Borrower, without limiting its rights to convert any Borrowing into a Prime Rate Loan or a U.S. Base Rate Loan, as applicable, shall only be entitled to request a Conversion into a Libor Loan with a Libor Interest Period of one month or into a Bankers' Acceptance with a term to maturity of one month or less as provided for herein; and

(ii) if an Event of Default has occurred and is continuing, such Conversion shall not be permitted and all Libor Loans in respect of which any such Conversion has been requested shall be converted to a U.S. Base Rate Loan on the last day of the Libor Interest Period applicable thereto and all Bankers' Acceptances in respect of which any such Conversion has been requested shall be converted to a Prime Rate Loan on the maturity of such Bankers' Acceptances.

Each Conversion Notice shall specify, with respect to the outstanding loans to which such Conversion Notice applies, the new type of Borrowing selected and the Conversion Date.

Each Conversion Notice shall be irrevocable and binding upon the Borrower.

On each Conversion Date, the Borrower shall be required to repay to the Lender the basis of Borrowing which is being converted and, subject to the provisions of this Agreement, the Lender shall be required to make available to the Borrower the Borrowing into which such basis of Borrowing is being converted.

 - 42 -

3.3 Provisions relating to Letters of Credit

(a) All Letters of Credit shall be for a term not exceeding one (1) year (subject to automatic renewals).

(b) Whenever the Borrower requires the issuance of a Letter of Credit, it shall deliver to the Lender a duly executed Letter of Credit Agreement, together with such other supporting documentation as the Lender may reasonably require, not less than two Business Days prior to the anticipated date of issuance.

(c) The Borrower may at any time from and after the Closing Date request a Letter of Credit subject to compliance by the Lender with all Applicable Laws in respect of such Letter of Credit.

(d) Upon receipt of demand for payment under any Letter of Credit, the Lender shall be under no obligation whatsoever to inquire or investigate the merits or appropriateness of such demand, provided compliance with the Letter of Credit requirements is made on its face. The Borrower shall fully and immediately indemnify and save harmless the Lender from any and all debts, liabilities and obligations or causes of action in respect of making any payment under a Letter of Credit.

(e) If a Letter of Credit is outstanding at the Maturity Date, or upon demand if an Event of Default is continuing, the Borrower shall forthwith pay to the Lender an amount equal to the face amount of such Letter of Credit. Such funds shall be held by the Lender in a Cash Collateral Account, to cash-collateralize and for set-off against the liability of the Borrower to the issuing Lender in respect of such Letter of Credit and the Borrower shall execute and deliver or cause to be delivered such account agreements and documentation, security agreements or hypothecations as the Lender may reasonably require in respect thereof.

3.4 Rollovers

The Borrower may, during the term of this Agreement, Rollover all or any portion of a Bankers' Acceptance on its maturity date or all or any portion of a Libor Loan for an additional Libor Interest Period subsequent to the initial or any subsequent Libor Interest Period or extend the expiry date of a Letter of Credit, upon giving the Lender a Rollover Notice in accordance with the period of notice and other requirements set out in Section 3.1 applicable to Bankers' Acceptances or Libor Loans (other than delivery of a Notice of Borrowing), unless immediately prior to the issuance of any Bankers' Acceptances or Letter of Credit or the commencement of any subsequent Libor Interest Period, a Default or an Event of Default shall have occurred and be continuing, in which event the Borrower shall not be entitled to Rollover such Letter of Credit and, in the case of a Default, shall only be entitled to request a Bankers' Acceptance with a term to maturity of one month or less as provided for herein or a Libor Interest Period of one (1) month and, in the case of an Event of Default, (i) shall be deemed to have converted any Bankers' Acceptance to a Prime Rate Loan and any such Libor Loan to U.S. Base Rate Loan, in each case pursuant to Section 3.2 on the maturity date of the Bankers' Acceptance or the last day of the Libor Interest Period applicable thereto, and (ii) shall be deemed to have notified the Lender to cancel any automatic renewal of a Letter of Credit. In the event a Rollover Notice in respect of an existing Bankers' Acceptance or Libor Loan is not given pursuant to this Section 3.3 or a Conversion Notice in respect of such existing Bankers' Acceptance or Libor Loan is not given pursuant to Section 3.2, any such Bankers' Acceptance shall be converted to a Prime Rate Loan on the maturity date of such Bankers' Acceptance and any such Libor Loan shall be converted to a U.S. Base Rate Loan on the last day of the Libor Interest Period applicable to such existing Libor Loan and the provisions of the last sentence of Section 3.2 shall apply to any such conversion.

 - 43 -

3.5 Selection of Libor Interest Periods

If the Borrower elects to borrow by way of a Libor Loan pursuant to Section 3.1, elects to convert a Borrowing into a Libor Loan pursuant to Section 3.2 or elects to Rollover a Libor Loan pursuant to Section 3.3, the Borrower shall, prior to the beginning of the Libor Interest Period applicable to such Libor Loan, in accordance with the same period of notice required for the initial Borrowing of a Libor Loan as set forth in Section 3.1, select and notify the Lender by delivery of a Notice of Borrowing, Conversion Notice or Rollover Notice, as the case may be, of the Libor Interest Period (which shall begin and end on a Business Day) applicable to such Libor Loan. If the Borrower fails to give to the Lender a notice as aforesaid prior to the date of maturity of a Libor Loan in accordance with the same period of notice required for the original Borrowing, then the amount of such Libor Loan shall be converted on its maturity to a U.S. Base Rate Loan pursuant to Section 3.2.

3.6 Provisions relating to Bankers' Acceptances.

(a) When the Borrower wishes to obtain a Borrowing by way of Bankers' Acceptances (other than pursuant to a Rollover), including pursuant to a Conversion of a Prime Rate Loan to a Bankers' Acceptance, the Borrower shall provide to the Lender a Notice of Borrowing in accordance with Section 3.1.

(b) Each Bankers' Acceptance shall be dated the date on which it is issued, and shall be for a Contract Period of 30 or 60 days and provided further that in no event shall the term of a Bankers' Acceptance extend beyond the Maturity Date.

(c) If a Bankers' Acceptance is outstanding upon the occurrence of an Event of Default that is continuing, or if any repayment or prepayment hereunder by the Borrower shall require the prepayment of a Bankers' Acceptance on any day other than the last day of its term, the Borrower shall forthwith pay to the Lender an amount equal to the face amount of such Bankers' Acceptance. The proceeds of such payment shall be held by the Lender for set-off against the liability of the Borrower to the Lender in respect of such Bankers' Acceptance. The Lender shall credit the Borrower with interest on such proceeds at the prevailing rate for comparative term deposits maturing on the maturity date of the Bankers' Acceptance.

(d) Upon maturity of a Banker's Acceptance, the Borrower shall pay to the Lender an amount equal to the face amount of the maturing Bankers' Acceptance unless, prior to the maturity date of the Bankers' Acceptance, the Borrower shall have requested either a Rollover or a Conversion of the maturing Bankers' Acceptance into a Prime Rate Loan.

 - 44 -

(e) Until termination or expiration of the Operating Facility a maturing Bankers' Acceptance may be renewed by a Rollover or converted into a Prime Rate Loan, provided:

(i) the Lender shall not have made any demand for repayment of any Outstanding Obligations; and

(ii) the Lender shall have received a Notice of Borrowing, a Conversion Notice or a BA Notice, as applicable.

(f) Should the conditions set out in Section 3.6(d) or Section 3.6(e) not be satisfied, then the maturing Bankers' Acceptance shall be converted by the Lender into a Prime Rate Loan and shall bear interest at the applicable interest rate.

(g) The acceptance by the Lender of a Bankers' Acceptance shall be deemed to be a Borrowing in an amount equal to the face amount of such Bankers' Acceptance for the purpose of determining (i) the portion of the Operating Facility remaining available for drawdown; and (ii) the maximum level of Borrowings permitted to be outstanding hereunder. The minimum amount of each Borrowing permitted by way of Bankers' Acceptance is Cdn. Redacted and in Cdn. Redacted increments thereafter.

(h) Whenever the Borrower requests a Borrowing under this Agreement by way of Bankers' Acceptances, each Non-Acceptance Lender shall, in lieu of accepting a Bankers' Acceptance, make a BA Equivalent Loan by way of Discount Note in an amount equal to the Non-Acceptance Lender Lender's pro rata portion of the BA Loan. All terms of this Agreement applicable to Bankers' Acceptances shall apply equally to Discount Notes evidencing BA Equivalent Loans with such changes as may in the context be necessary. For greater certainty:

(i) the term of a Discount Note shall be the same as the term for Bankers' Acceptances accepted on the same date of the Borrowing in respect of the same BA Loan;

(ii) an acceptance fee will be payable in respect of a Discount Note and shall be calculated at the same rate and in the same manner as the Stamping Fee in respect of a Bankers' Acceptance; and

(iii) the proceeds from a BA Equivalent Loan shall be equal to the Discount Proceeds of the Discount Note.

3.7 Reliance on Oral Instructions

The Lender shall be entitled to act upon the oral instructions of any Person whom the Lender believes is a Person the Borrower has identified as being a Person authorized to give instructions regarding matters contemplated by this Agreement, including, without limiting the generality of the foregoing, the Operating Facility. The Lender shall not be responsible for any error or omission relating to such instructions. Oral instructions shall, at the request of the Lender, be immediately confirmed in writing by the Borrower. The Borrower may revoke the authority of any authorized Person by notifying the Lender in writing, which notice, notwithstanding Section 11.1, shall be effective on the second Business Day immediately following the date of its actual receipt by the Lender.

 - 45 -

Article 4
PAYMENTS

4.1 Repayment and Termination at Maturity Date

(a) Notwithstanding anything else contained in this Agreement, all Outstanding Obligations of the Borrower to the Lender under the Operating Facility are payable upon the applicable Maturity Date, without necessity for demand or notice, and the Operating Facility is automatically terminated at the applicable Maturity Date.

(b) Notwithstanding anything else contained in this Agreement, a Bankers' Acceptance and a BA Equivalent Loan shall only be repaid on its maturity date and a Libor Loan may only be repaid on the last day of the Libor Interest Period applicable to such Libor Loan unless the Borrower makes payment of the amounts payable in respect thereto pursuant to Section 11.5.

These terms shall apply in addition to the mandatory repayments required to be made by the Borrower in accordance with Section 4.2.

4.2 Mandatory Repayments - General

The Borrower shall make the following mandatory repayments of Outstanding Borrowings:

(a) Operating Facility Limit Excess. If, for any reason, Outstanding Borrowings under the Operating Facility exceeds the Operating Facility Limit permitted hereunder, the Borrower shall forthwith pay to the Lender an amount sufficient to reduce the Outstanding Borrowings under the Operating Facility to an amount equal to or less than the Operating Facility Limit (or, in the case of Letters of Credit under the Operating Facility, provide cash collateral to the Lender such that the face amount of all Letters of Credit issued pursuant to the Operating Facility less the amount of such cash collateral is equal to an amount equal to or less than the Operating Facility Limit). The Borrower shall pay interest on such excess at a rate of the Prime Rate plus 5% per annum calculated and payable daily, until such excess is repaid in full;

(b) Dispositions. The Borrower shall pay to the Lender 100% of the Net Sale Proceeds from any sales, transfers, leases or other disposition(s) of Property by any Loan Party that are not Permitted Dispositions; and

(c) Insurance Proceeds. The Borrower shall pay to the Lender 100% of the net cash proceeds (including after deduction of any premium payable in respect thereof) from any insurance claim (excluding liability insurance) greater than $Redacted made or settled by any Loan Party in respect to any Property shall be paid to the Lender (subject to the obligations of the applicable Loan Party to any arm's length third party) within thirty Business Days of its receipt unless a Loan Party shall have advised the Lender that it will use such proceeds to replace or rebuild the assets to which the insurance proceeds, and shall have provided to the Lender within twenty Business Days of receipt thereof a business plan for the intended use of the insurance proceeds and projections during the rebuilding period such replacement or rebuilding. Upon receipt of the Borrower's business plan for the intended use of the insurance proceeds and projections during the rebuilding period, the Lender shall review such materials and shall reasonably consider, without obligation, the Borrower's requests.

 - 46 -

Notwithstanding the foregoing, (I) in the case of net cash proceeds referred to in subparagraphs (b) and (c) above, the foregoing repayments shall not be required to be made with such proceeds if such proceeds are subsequently reinvested (or committed to be reinvested) in capital assets used in carrying on the business of the Loan Parties within 180 days of receipt thereof and (II) in the case of excess referred to in subparagraph (a) above, (x) if such excess is due to exchange rate fluctuations, Outstanding Borrowings under the Operating Facility (determined in Cdn. Dollars with all Borrowings denominated in U.S. Dollars being converted to the Equivalent Amount of Cdn. Dollars) and does not exceed the Operating Facility Limit by more than 3%, then the foregoing repayments shall not be required to be made.

4.3 Mandatory Repayments - Operating Facility

The Borrower shall pay interest only on the principal amount of the Operating Facility monthly in arrears. The principal amount of the Operating Facility and any other amounts remaining outstanding under the Operating Facility shall be repaid on the applicable Maturity Date.

4.4 Voluntary Prepayment

The Borrower shall have the right at any time and from time to time to prepay without fee or penalty all or any Borrowings (in a minimum amount of Cdn.$Redacted, or Equivalent Amount) under the Operating Facility by (i) providing the Lender with prior written notice given before noon (Calgary, Alberta time) five Business Days prior to such prepayment of its intention to do so; or (ii) by way of deposit to the Borrower's operating account on five Business Days prior notice with the Lender to repay Prime Rate Loans or U.S. Base Rate Loans and the Lender shall thereupon apply the amount provided in such notice in such operating account to repay Prime Rate Loans or U.S. Base Rate Loans, as applicable, under the Operating Facility. For certainty, amounts prepaid may be reborrowed.

4.5 Principal Repayments Affecting Bankers' Acceptances and Libor Loans

If, on any day on which prepayments under the Operating Facility are required or permitted to be made, the Borrowings under the Operating Facility then outstanding include Libor Loans or Bankers' Acceptances in an amount such that the prepayment would require the Borrower to be liable under the funding indemnity contained in Section 11.5 or to pay a Bankers' Acceptance prior to its maturity date, that portion of the prepayment which would otherwise be applied against any such Libor Loan or Bankers' Acceptance under the Operating Facility may, at the option of the Borrower, be paid to the Lender for deposit into a Cash Collateral Account in accordance with Section 10.5. The Lender shall hold such cash collateral for the purpose of repaying, and shall apply such cash collateral (and interest earned on such amounts) to repay, such Bankers' Acceptances and Libor Loans under the Operating Facility as they mature, except if an Event of Default has occurred and is continuing, and in such case, the Lender may apply such cash collateral at such time or times, and to such of the other obligations, as provided in Section 10.5. Interest earned on such amounts while on deposit in a Cash Collateral Account shall be paid to the Borrower upon request by the Borrower from time to time if no Default or Event of Default has occurred and is continuing.

 - 47 -

4.6 Early Repayment of Bankers' Acceptances, Letters of Credit and Libor Loans

The Borrower shall not cancel all or any portion of the Operating Facility or otherwise prepay any Borrowings if the applicable Borrowings required to be repaid to the Lender as a result thereof include Letters of Credit with an expiry date falling subsequent to the date of such cancellation, Libor Loans with the last day of a Libor Interest Period falling subsequent to the date of such cancellation or Bankers' Acceptances accepted by such Lender or BA Equivalent Loans with a maturity date falling subsequent to the date of such cancellation or prepayment unless, on the date of such cancellation, the Borrower has paid to the Lender: (i) in respect of Letters of Credit, the undrawn amount thereof,(ii) in respect of Libor Loans, the amount required to be paid pursuant to Section 11.5 (unless cash collateralized pursuant to Section 4.5) and (iii) in respect of Bankers' Acceptances, the face amount thereof, in each case to be held in a Cash Collateral Account.

4.7 Payments Generally

Each payment under this Agreement shall be made for value at or before 1:00 p.m. (Calgary, Alberta time) on the day such payment is due, provided that, if any such day is not a Business Day, such payment shall be deemed for all purposes of this Agreement to be due on the Business Day next following such day (and any such extension shall be taken into account for purposes of the computation of interest and fees payable under this Agreement). All payments shall be made to the Lender at the Lender's Branch of Account.

4.8 No Credit for Trust Funds

For greater certainty, payments of any nature whatsoever made by the Borrower to the Lender which the recipient is required by law to pay to any other Person, by reason of any trust imposed by law or by such other Person upon amounts received by the recipient from the Borrower, shall not be credited against, or deemed to be payment on account of, all or any portion of the Outstanding Obligations. All costs and expenses incurred by the Lender, its agents, representatives and solicitors in connection with the repayment of such monies to any Person shall be for the account of the Borrower and payable on demand. Interest shall accrue on these costs and expenses, until paid, at a rate equal to the sum of the Prime Rate plus 5% per annum, and shall be calculated in accordance with Section 5.1.

Article 5
INTEREST, FEES AND EXPENSES

5.1 Interest on Prime Loans

The Borrower shall pay interest in Cdn. Dollars on each Prime Rate Loan to the Lender, in each case at a rate per 365 days equal to the Prime Rate plus the Applicable Margin applicable to such Prime Rate Loan. A change in the Prime Rate or the Applicable Margin will simultaneously cause a corresponding change in the interest payable on each Prime Rate Loan. Such interest shall accrue daily based on the Prime Rate and Applicable Margin in effect on each day and is payable monthly in arrears on each Interest Payment Date for the period commencing on and including the immediately prior Interest Payment Date up to but not including the Interest Payment Date on which such interest is to be paid and shall be calculated on a daily basis and on the basis of the actual number of days elapsed in a year of 365 days. The annual rates of interest to which the rates determined in accordance with the foregoing provisions of this Section 5.1 are equivalent, are the rates so determined multiplied by the actual number of days in the relevant calendar year and divided by 365.

 - 48 -

5.2 Interest on U.S. Base Rate Loans

The Borrower shall pay interest in U.S. Dollars on each U.S. Base Rate Loan to the Lender, at a rate per 365 day period equal to the U.S. Base Rate plus the Applicable Margin applicable to such U.S. Base Rate Loan. A change in the U.S. Base Rate or the Applicable Margin will simultaneously cause a corresponding change in the interest payable on each U.S. Base Rate Loan. Such interest shall accrue daily based on the U.S. Base Rate and Applicable Margin in effect on each day and is payable monthly in arrears on each Interest Payment Date for the period commencing on and including the immediately prior Interest Payment Date up to but not including the Interest Payment Date on which such interest is to be paid and shall be calculated on a daily basis and on the basis of the actual number of days elapsed in a year of 365 days. The annual rates of interest to which the rates determined in accordance with the foregoing provisions of this Section 5.2 are equivalent, are the rates so determined multiplied by the actual number of days in the relevant calendar year and divided by 365.

5.3 Interest on Libor Loans

The Borrower shall pay interest in U.S. Dollars on each Libor Loan to the Lender for the period commencing on and including the first day of the Libor Interest Period applicable to such Libor Loan up to but not including the last day of such Libor Interest Period at a rate equal to the sum of Libor plus the Applicable Margin applicable to such Libor Loan and which is in effect on the first day of the Libor Interest Period applicable to such Libor Loan. A change in the Applicable Margin will simultaneously cause a corresponding change in the interest payable on each Libor Loan. Such interest shall accrue daily based on Libor and the Applicable Margin in effect on each day and is payable on each Libor Interest Date applicable to such Libor Interest Period and shall be calculated on a daily basis and on the basis of the actual number of days elapsed in the period for which such interest is payable (including the first day of such period but excluding the date on which such interest is payable) divided by 360. The annual rates of interest to which the rates determined in accordance with the foregoing provisions of this Section 5.3 are equivalent, are the rates so determined multiplied by the actual number of days in the relevant calendar year and divided by 360.

5.4 Interest on Overdue Amounts

Upon a default in the payment of principal, interest or other amount due under this Agreement, the Borrower shall pay interest on such overdue amount both before and after default and judgment at the same rate per annum as was applicable to such payment prior to default or judgment, computed from the date such amount becomes overdue for so long as such amount remains overdue. Such overdue interest shall be payable upon demand by the Lender and shall be compounded on each Interest Payment Date.

5.5 Letter of Credit Fees

In connection with the issuance or renewal of a Letter of Credit, the Borrower shall pay the Lender a fee (the "Letter of Credit Fee") at a rate equal to the Applicable Margin for Letters of Credit. Letter of Credit Fees shall be calculated on the principal amount of such Letter of Credit for the duration of its stated term. Such fee shall be calculated on the basis of the actual number of days in the stated term, commencing on, and including, the date the Lender issued or renewed the Letter of Credit and ending on, but excluding, its stated maturity date; provided, however, that the Letter of Credit Fee shall be subject to a minimum amount of $Redacted. The Borrower shall also pay the Lender's standard Letter of Credit charges for cable charges, extensions, amendments and other services related to Letters of Credit.

 - 49 -

5.6 Corporate MasterCard

Corporate MasterCard terms, conditions and fees are detailed in the Corporate MasterCard documentation.

5.7 Standby Fees

(a) The Borrower shall pay to the Lender a standby fee in respect of the Operating Facility calculated at a rate per annum equal to the Applicable Margin on the amount, if any by which the amount of the Outstanding Borrowings (to the extent not previously drawn and thereafter permanently repaid in full) under the Operating Facility for each day in the period of determination is less than the Operating Facility Limit (the "Standby Fee"). Fees determined in accordance with this Section shall accrue daily from and after the Closing Date and be payable by the Borrower monthly in arrears and on cancellation in full of the Operating Facility and on the Maturity Date.

(b) As of: (i) the first day of each month of each year, (ii) the date of any cancellation in full of the Operating Facility and (iii) the Maturity Date, the Lender shall determine the standby fees under this Section in respect of the Operating Facility for the period from and including the Closing Date or the date of the immediately preceding determination, as the case may be, to but excluding the date of determination and shall deliver to the Borrower a written request for payment of the standby fees so determined, as detailed therein. The Borrower shall pay to the Lender the standby fees referred to above within five (5) Business Days after receipt of such written request.

5.8 Other Fees

(a) The Borrower shall pay to the Lender a non-refundable upfront fee on the Operating Facility (the "Upfront Fee") in the amount of Cdn.$Redacted payable on the Closing Date. The Borrower has paid a work fee of Cdn.$Redacted, such amount shall be applied to the Upfront Fee on the Closing Date.

(b) The Borrower shall pay to the Lender such reasonable out-of-pocket and other costs in respect of other credit accommodation provided by the Lender as may be provided for or contemplated by each Lender's standard form agreements for such services.

(c) The Borrower hereby authorizes and directs the Lender to debit the amount of all fees payable by the Borrower under Section 5.7 and this Section 5.8, together with all amounts to be reimbursed to the Lender by the Borrower under Section 5.10 hereof, (if such fees have not been paid within three Business Days of presentation to the Borrower of the appropriate invoices) from any account of the Borrower.

 - 50 -

5.9 Change in Circumstances

(a) Reduction in Rate of Return. If at any time the Lender determines, acting reasonably, that (a) any change in any Applicable Law or any interpretation thereof after the date of execution hereof, or (b) compliance by the Lender with any direction, requirement or request from any regulatory authority given after the date of execution hereof, whether or not having the force of law, has or would have, as a consequence of the Lender's obligations under this Agreement and taking into consideration the Lender's policies with respect to capital adequacy, the effect of reducing the rate of return on the Lender's capital to a level below that which the Lender could have achieved but for such change or compliance, then from time to time, upon demand by the Lender, the Borrower shall pay to the Lender such additional amounts as will compensate the Lender for such reduction; provided that should the Lender make such demand, the Borrower shall be entitled to prepay the Outstanding Borrowings without notice or penalty (other than, to the extent applicable, any breakage costs) (in each case so long as the Borrower is treated in the same manner as the Lender's other borrowers generally).

(b) Taxes, Reserves, Capital Adequacy, etc. If after the date of execution hereof, any introduction of any Applicable Law or any change or introduction of a change in any Applicable Law (whether or not having the force of law) or in the interpretation or application thereof by any court or by any governmental agency, central bank or other authority or entity charged with the administration thereof or any change in the compliance of the Lender with any Applicable Law now or hereafter:

(i) subjects the Lender to, or causes the withdrawal or termination of a previously granted exemption with respect to, any Tax or changes the basis of taxation, or increases any existing Tax, on payments of principal, interest, fees or other amounts payable by the Borrower to the Lender under this Agreement (except for taxes on the overall net income of the Lender);

(ii) imposes, modifies or deems applicable any reserve, special deposit, deposit insurance or similar requirement against assets held by, or deposits in or for the account of or loans by or any other acquisition of funds by, an office of the Lender;

(iii) imposes on the Lender or expects there to be maintained by the Lender any capital adequacy or additional capital requirement in respect of any Borrowing or its commitment hereunder or any other condition with respect to this Agreement; or

(iv) imposes any Tax on reserves or deemed reserves with respect to the undrawn portion of the Operating Facility,

and the result of any of the foregoing, in the sole determination of the Lender acting reasonably, shall be to increase the cost to, or reduce the amount of principal, interest or other amount received or receivable by the Lender hereunder or its effective return hereunder in respect of making, maintaining or funding a Borrowing under this Agreement the Lender shall, acting reasonably, determine that amount of money which shall compensate the Lender for such increase in cost or reduction in income (herein referred to as "Additional Compensation") (in each case so long as the Lender treats the Borrower in the same general manner as other borrowers from the Lender).

 - 51 -

(c) Claim for Additional Compensation. Upon the Lender having determined that it is entitled to Additional Compensation in accordance with the provisions of this Section 5.9, the Lender shall promptly so notify the Borrower and shall provide to the Borrower a certificate of a duly authorized officer of the Lender confirming its entitlement to Additional Compensation and setting forth the Additional Compensation, which shall be prima facie evidence of such Additional Compensation. The Lender shall promptly notify the Borrower and the Borrower shall pay to the Lender, within ten Business Days of the giving of such notice, the Additional Compensation calculated to the date of such notification. The Lender shall be entitled to be paid such Additional Compensation from time to time to the extent that the provisions of this Section 5.9 are then applicable notwithstanding that the Lender has previously been paid Additional Compensation. If it is commercially reasonable, the Lender shall make reasonable efforts to limit the incidents of any such Additional Compensation. Should the Lender be entitled to collect Additional Compensation in accordance with this Section, the Borrower shall be entitled to prepay the Outstanding Borrowings without notice or penalty provided that it pays to the Lender such Additional Compensation relating to the period prior to prepayment in which any Borrowings were outstanding.

5.10 Reimbursement of Expenses

All statements, reports, certificates, opinions and other documents or information required to be furnished to the Lender by the Borrower under this Agreement shall be supplied without cost to the Lender. The Borrower agrees to pay promptly on demand all of the Lender's actual, reasonable and documented legal fees and disbursements, documentation costs and other expenses incurred in connection with the preparation, negotiation, documentation and operation of this Agreement and any amendment of, restatement of, or supplement or modification to this Agreement, and any other document prepared in connection herewith, including the Security, whether or not any amounts are advanced under this Agreement. In addition, the Borrower agrees to pay the reasonable and documented legal fees and disbursements and other expenses incurred by the Lender in the enforcement or preservation of any rights under this Agreement, the Security and all documents delivered in connection therewith. In addition, the Borrower agrees to pay promptly on demand those reasonable expenses of the Lender incurred in connection with:

(a) the administration, periodic review, modification, amendment, or any waiver (whether or not effective) of any Loan Document;

(b) inspection, verification or appraisal of any Property of the Borrower; and

(c) any environmental audit or study undertaken or commissioned by the Lender, acting reasonably.

5.11 Determination Conclusive

Each determination by the Lender of any rate or fee shall be prima facie evidence thereof.

 - 52 -

5.12 No Withholding/Payment of Gross-up

Each interest, fee or similar payment under this Agreement, including any penalties attached thereto, shall be made without set-off or counterclaim and without withholding for or on account of any present or future taxes or duties imposed by any federal, state, provincial or other taxing authority. In the event the Borrower is required to deduct or withhold any amount for or on account of such taxes or duties, the Borrower shall pay to the Lender all such additional amounts as may be necessary to ensure that the Lender receives a net amount equal to the full amount which it would have received had such interest, fee or similar payment been made without such deduction or withholding.

Article 6
CONDITIONS PRECEDENT

6.1 Conditions – Effectiveness

The effectiveness of this Agreement is subject to the terms and conditions of this Agreement and is conditional upon satisfactory evidence being given to the Lender and its counsel as to compliance with the following conditions:

(a) Representations and Warranties True. The representations and warranties contained in Section 7.1 are true and correct as if made by the Borrower as of the Closing Date, and the Borrower has provided an officer's certificate from a senior officer to evidence the same.

(b) Resolutions and Certificates. The Lender shall have received, duly executed and in form and substance satisfactory to it:

(i) a copy of the constating documents, by-laws, partnership agreements and other organizational documents of each Canadian incorporated (or otherwise formed) Loan Party and a copy of the resolutions of the board of directors of each such corporate Loan Party authorizing the execution, delivery and performance of the Loan Documents to which such Loan Party is a party certified by a senior officer of the applicable corporate Loan Party;

(ii) a certificate of incumbency for each such Loan Party showing the names, offices and specimen signatures of the officers who will execute the Loan Documents to which such Loan Party is a party on its behalf;

(iii) a certificate as to general corporate information and other matters for each such Loan Party; and

(iv) such additional supporting documents as the Lender or the Lender's Counsel may reasonably request.

(c) Litigation. There shall be no material litigation or other material claims in respect of or pending against any Loan Party or any of its material Property.

(d) Due Diligence. The Lender shall have completed in form and substance satisfactory to it all due diligence and investigations in respect of the Loan Parties including (i) site visits, but excluding (ii) a satisfactory review of insurance coverage and receipt of an insurance certificate conforming to the requirements of Section 8.1(i); (iii) a satisfactory review of all Material Contracts; and (iv) satisfactory review of any Permitted Encumbrances.

 - 53 -

(e) Delivery of this Agreement. The Borrower shall have executed and delivered this Agreement to the Lender.

(f) Delivery of Security. The Lender shall have received the Security (including any necessary consents or subordinations of third parties as may be required by the Lender) duly executed by the issuer thereof and in form and substance satisfactory to the Lender and its counsel, acting reasonably, other than the Blocked Account Agreements which shall be delivered in accordance with time frames set out in Section 8.1(cc).

(g) Registration. The Security shall have been registered, recorded or filed in all jurisdictions deemed necessary or advisable by the Lender and its counsel and the Lender shall have received all acknowledgements, agreements and consents that it may reasonably require or deem advisable in respect of the Security.

(h) Approvals. The Lender shall have received evidence that each Loan Party has unconditionally received all necessary consents and approvals required from any creditor or Governmental Authority or other third party in respect of the entry into, execution and delivery of the Loan Documents to which such Loan Party is a party and the performance of its obligations thereunder.

(i) Notice of Borrowing. The Lender shall have received a proper Notice of Borrowing as may be required hereunder.

(j) No Default. No Default or Event of Default has occurred and is continuing.

(k) Priority Payables. There are no Priority Payables outstanding in respect of which payments are overdue.

(l) Notice of Liens. The Lender shall not have received written notice of any lien, trust, charge or encumbrance affecting personal property charged by the Security or an execution (other than the Permitted Encumbrances).

(m) Material Adverse Change. Nothing shall have occurred nor any fact become known since October 31, 2020, in respect of the Loan Parties which is reasonably likely to have a Material Adverse Effect.

(n) Fees and Disbursements; Direction to Pay. The Lender shall have received a direction to pay from the Borrower authorizing the Lender to (i) deduct from the Borrower' account with the Lender and (ii) apply payment therefrom in full of all fees and out of pocket expenses paid by or incurred by the Lender on or before the Closing Date (including reasonable and documented fees and expenses of legal counsel to the Lender).

(o) Security Interests. All Security Interests charging any Property of the Loan Parties shall have been discharged other than Security Interests in favour of the Lender and other Permitted Encumbrances.

 - 54 -

(p) Legal Opinions. The Lender shall have received favourable legal opinions from Canadian counsel to the Loan Parties in connection with the due authorization, execution, delivery and enforceability of the Loan Documents required to be delivered at such time, and such other matters from such other applicable counsel to the Loan Parties (including regulatory review and compliance opinions in respect to the Cannabis Business and CBD Business) as the Lender and its counsel consider necessary or appropriate. The Lender shall also have received opinions of local counsel in Saskatchewan and Manitoba with respect to the Security and registration of the Security.

(q) Specified Debt. The Lender shall have received evidence that all Specified Debt, other than the Debt under the Windermere Debenture, has been:

(i) converted to Equity Securities;

(ii) is unsecured; or

(iii) has been postponed and subordinated to the Outstanding Obligations on terms satisfactory to the Lender.

(r) Other Documents. The Lender shall have received such other documents as the Lender may reasonably request.

6.2 Conditions - Borrowings

The obligation of the Lender to make available any Borrowing, including the initial Borrowing hereunder, is conditional upon satisfactory evidence being given to the Lender as to compliance with the following conditions:

(a) Initial Borrowing Only. In the case of the initial Borrowing only, in addition to the below, each of the following:

(i) Fees and Disbursements; Direction to Pay. The Lender shall have received a direction to pay from the Borrower authorizing the Lender to (i) deduct from the initial Borrowing and (ii) apply payment therefrom in full of all fees and out of pocket expenses paid by or incurred by the Lender from the Closing Date (including reasonable and documented fees and expenses of legal counsel to the Lender).

(ii) Compliance Certificate. The Lender shall have received a pro forma Compliance Certificate demonstrating all terms and conditions and financial covenants (to the extent required to be met pursuant to the terms hereof on the Closing Date) of this Agreement are being met on the Closing Date (on a pro forma basis to include the initial Borrowing hereunder and the completion of the Fall 2021 Acquisitions).

(iii) Financial Projections. Three year financial forecast showing income statement, cash flow statement and balance sheet for the next three following Financial Years, with commentary relative to financial requirements and confirmation of compliance with all financial covenants hereunder on a pro forma basis, including impacts of proposed Borrowings and proposed Acquisitions and Investments within such period.

 - 55 -

(iv) Resolutions and Certificates. The Lender shall have received, duly executed and in form and substance satisfactory to it:

(A) a copy of the constating documents, by-laws, partnership agreements and other organizational documents of each non-Canadian incorporated (or otherwise formed) Loan Party and a copy of the resolutions of the board of directors of each such corporate Loan Party authorizing the execution, delivery and performance of the Loan Documents to which such Loan Party is a party certified by a senior officer of the applicable corporate Loan Party;

(B) a certificate of incumbency for each such Loan Party showing the names, offices and specimen signatures of the officers who will execute the Loan Documents to which such Loan Party is a party on its behalf;

(C) a certificate as to general corporate information and other matters for each such Loan Party; and

(D) such additional supporting documents as the Lender or the Lender's Counsel may reasonably request.

(v) Litigation. There shall be no material litigation or other material claims in respect of or pending against any Loan Party or any of its material Property.

(vi) Due Diligence. The Lender shall have completed in form and substance satisfactory to it a (i) a satisfactory review of insurance coverage and receipt of an insurance certificate conforming to the requirements of Section 8.1(i); (ii) a satisfactory review of all Material Contracts; and (iii) satisfactory review of any Permitted Encumbrances.

(vii) Specified Debt. The Lender shall have received evidence that all the Debt under the Windermere Debenture has been converted to Equity Securities.

(viii) Legal Opinions. The Lender shall have received favourable legal opinions from United States counsel to the Loan Parties in connection with the due authorization, execution, delivery and enforceability of the Loan Documents required to be delivered to which United States (federal or state) law applies and such other matters from such counsel to the Loan Parties as the Lender and its counsel consider necessary or appropriate.

(ix) Priority Payables. There are no Priority Payables outstanding in respect of which payments are overdue.

(x) Notice of Liens. The Lender shall not have received written notice of any lien, trust, charge or encumbrance affecting personal property charged by the Security or an execution (other than the Permitted Encumbrances).

 - 56 -

(xi) Security Interests. All Security Interests charging any Property of the Loan Parties shall have been discharged other than Security Interests in favour of the Lender and other Permitted Encumbrances.

(xii) Redacted Acquisitions. Redacted Redacted Redacted Redacted Redacted Redacted Redacted Redacted Redacted Redacted Redacted Redacted Redacted Redacted, Redacted Redacted Redacted Redacted Redacted Redacted Redacted Redacted, Redacted Redacted Redacted Redacted Redacted Redacted, Redacted Redacted Redacted Redacted Redacted Redacted Redacted Redacted Redacted Redacted Redacted Redacted Redacted Redacted, Redacted Redacted:

(A) Redacted

(B) Redacted

(C) Redacted;

(D) Redacted.

(E) Redacted .

(F) Redacted.

Redacted, Redacted Redacted Redacted Redacted Redacted Redacted, Redacted Redacted Redacted Redacted Redacted Redacted Redacted Redacted Redacted, Redacted Redacted Redacted Redacted Redacted Redacted Redacted Redacted Redacted Redacted Redacted Redacted, Redacted

(b) Representations and Warranties True. The representations and warranties contained in Section 7.1 shall be true and correct in every material respect as if made by the Borrower contemporaneously with any Borrowing (except where expressed to be given only as of a specified date, and except for such qualifications to such representations and warranties which have been both disclosed to the Lender in writing after the Closing Date and accepted by the Lender).

(c) Conditions Precedent. The conditions precedent set forth in Section 6.1 shall have been satisfied.

(d) No Default. No Default or Event of Default has occurred and is continuing.

(e) Material Adverse Effect. No Material Adverse Effect shall have occurred.

(f) Notice of Borrowing. The Borrower shall provide the Lender a Notice of Borrowing in compliance with the notice requirements contained in Section 3.1 signed by a senior officer of the Borrower which shall certify compliance with the terms and provisions of the Credit Agreement, that the representations and warranties contained in Section 7.1 (other than those expressed to have been given only as of a specific date) shall be true and correct in all material respects on each Borrowing Date with the same effect as if made as of that Borrowing Date, that there is no Default or Event of Default that has occurred and is continuing at the time of or after giving effect to such Borrowing, and that there has been no event or circumstance which would have a Material Adverse Effect on the financial position of the Borrower since the date of the previous Borrowing.

 - 57 -

6.3 Waiver

The terms and conditions stated in this Article 6 are inserted for the sole benefit of the Lender and may be waived by it in whole or in part and with or without terms or conditions in respect of all or any Borrowings.

Article 7
REPRESENTATIONS AND WARRANTIES

7.1 Representation and Warranties

The Borrower represents and warrants to the Lender that:

(a) Due Incorporation. Each Loan Party has been duly incorporated, organized or created and is validly existing under its jurisdiction of incorporation or organization. Each Loan Party holds all necessary permits, consents and registrations and has all necessary power and authority to own or lease its properties and assets and to carry on its business as now conducted in accordance in all material respects with all Applicable Laws, and is or will be duly licensed or registered or otherwise qualified in all jurisdictions wherein the nature of its assets or the business transacted by it makes such licensing, registration or qualification necessary.

(b) Power. Each Loan Party has full partnership or corporate power, as applicable, and capacity to enter into, deliver and perform its obligations under each of the Loan Documents to which such Loan Party is a party.

(c) Due Authorization and No Conflict. The execution, delivery and performance by each Loan Party of the Loan Documents to which it is a party, and the consummation of the transactions contemplated hereby and thereby:

(i) have been duly authorized by all necessary action on the part of each such Loan Party;

(ii) do not and will not conflict with, result in any breach or violation of, or constitute a default under (A) the constating documents, by-laws or partnership agreement of such Loan Party, or any Applicable Laws, or (B) any determination or award presently in effect and applicable to such Loan Party, or of any commitment, agreement, Material Contract or any other instrument to which such Loan Party is now a party or is otherwise bound;

(iii) do not (except for the Security) result in or require the creation of any Security Interest upon or with respect to any of the properties or assets of such Loan Party; and

(iv) do not require the consent or approval (other than those consents or approvals already obtained and certified copies of which have been delivered to the Lender) of, or registration or filing with, any other party (including shareholders or limited partners of such Loan Party) or any Governmental Authority.

 - 58 -

(d) Valid and Enforceable Obligations. The Loan Documents are, or when executed and delivered to the Lender will be, legal, valid and binding obligations of each Loan Party, to the extent they are a party thereto, enforceable in accordance with their respective terms, except as enforceability may be limited by general principles of equity and by Applicable Laws regarding bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally and by moratorium laws in effect from time to time.

(e) Personal Property Title. Each Loan Party has good and marketable title to its personal property free and clear of all Security Interests other than Permitted Encumbrances.

(f) No Actions. There are no actions, suits, proceedings, inquiries or investigations existing, pending or, to the knowledge of the Borrower, threatened, against a Loan Party in any court or before or by any Governmental Authority, Canadian or foreign, which would have a Material Adverse Effect on the Loan Parties as a whole (except as of the date hereof as set forth in Schedule E and with respect to actions, suits, proceedings, inquiries or investigations that arise after the date hereof, as disclosed to the Lender prior to the date of deliver of a Notice of Borrower and Compliance Certificate).

(g) Financial Information. Subject to any limitations stated therein, the financial statements of each Loan Party furnished to the Lender under this Agreement, or which were furnished to the Lender to induce it to enter into this Agreement, or otherwise furnished in connection with this Agreement, fairly present the financial condition of such Loan Party as at the date thereof, and no Material Adverse Effect shall have occurred in its financial position since such dates. All such financial statements are and will be prepared in accordance with GAAP.

(h) No Defaults or Events of Default. No Default or Event of Default has occurred and is continuing.

(i) Compliance with Law. Each Loan Party is in compliance in all material respects with all Applicable Laws (other than Cannabis Laws and CBD Laws, which each Loan Party is in compliance in all respects with) including, without limitation, all Environmental Laws, and there is no existing material impairment to its properties or assets as a result of any environmental damage, except to the extent disclosed in writing to, and acknowledged by, Lender. Specifically, but without limitation, (i) no Loan Party shall conduct or at any time has conducted any Cannabis Activities or CBD Activities, or (ii) has made or held an Investment in any Person who conducts or at any time has conducted any Cannabis Activities or CBD Activities, in either case other than in a Qualified Cannabis Jurisdiction or Qualified CBD Jurisdiction, as applicable, where such Cannabis Activities or CBD Activities, as applicable, would not violate or result in a breach of any applicable Cannabis Law or CBD Law, as applicable, at the time in question.

 - 59 -

(j) Qualified Jurisdictions. No part of the proceeds of the Operating Facility has been used to carry on Cannabis Activities or CBD Activities in any jurisdiction other than the Qualified Cannabis Jurisdictions or Qualified CBD Jurisdictions, as applicable, or to make any investments in any Cannabis Activities or CBD Activities outside of Qualified Cannabis Jurisdictions or Qualified CBD Jurisdictions, as applicable, and in accordance with Cannabis Laws and CBD Laws, as applicable. No part of the Permitted Business, or related operations, is conducted outside of Qualified Jurisdictions, as applicable.

(k) Permitted Business. The only business conducted by the Loan Parties is the Permitted Business.

(l) Cannabis Activities. The only Cannabis Activities carried on by the Loan Parties is the Cannabis Business. Each Loan Party is in compliance with all Cannabis Laws and Cannabis Authorizations applicable to it. All Cannabis sold and distributed by each Loan Party was purchased in compliance with all Cannabis Laws.

(m) CBD Activities. The only CBD Activities carried on by the Loan Parties is the CBD Business. Each Loan Party is in compliance with all CBD Laws and CBD Authorizations applicable to it. All CBD and CBD products sold and distributed by each Loan Party were manufactured and acquired in compliance with all CBD Laws.

(n) Cannabis Authorizations. Each Loan Party has obtained each Cannabis Authorization and maintains such Cannabis Authorizations as valid and in full force and effect and each Loan Party is in compliance with the requirements of such Cannabis Authorizations. The Loan Parties are the sole legal and beneficial owner of the Cannabis Authorizations, have not disposed of or abandoned any right, title or interest in any Cannabis Authorization and have paid all taxes, assessments, maintenance fees and other amounts required to be paid to maintain the Cannabis Authorizations, other than those taxes, assessments, maintenance fees and other amounts the amount or validity of which is currently being contested in good faith by appropriate proceedings being diligently pursued. Neither the Borrower nor any other Loan Party is aware of any reason why any Cannabis Authorization would be suspended, cancelled or revoked or of any other factor that would prejudice the continuance or renewal of any Cannabis Authorization. No Loan Party has received any notice from any Governmental Authority regarding any actual or alleged violation of, or any failure on the part of a Loan Party to comply with, any term or requirement of any Cannabis Authorization that has not been remedied. No Loan Party has received any written notice from any Governmental Authority of any revocation or intention to revoke any interest of any Loan Party in any of the Cannabis Authorizations that has not been remedied.

(o) CBD Authorizations. Each Loan Party has obtained all applicable CBD Authorizations and maintains such CBD Authorizations as valid and in full force and effect and each Loan Party is in compliance with the requirements of such CBD Authorizations. The Loan Parties are the sole legal and beneficial owner of the CBD Authorizations, have not disposed of or abandoned any right, title or interest in any CBD Authorization and have paid all taxes, assessments, maintenance fees and other amounts required to be paid to maintain the CBD Authorizations, other than those taxes, assessments, maintenance fees and other amounts the amount or validity of which is currently being contested in good faith by appropriate proceedings being diligently pursued. Neither the Borrower nor any other Loan Party is aware of any reason why any CBD Authorization would be suspended, cancelled or revoked or of any other factor that would prejudice the continuance or renewal of any CBD Authorization. No Loan Party has received any notice from any Governmental Authority regarding any actual or alleged violation of, or any failure on the part of a Loan Party to comply with, any term or requirement of any CBD Authorization that has not been remedied. No Loan Party has received any written notice from any Governmental Authority of any revocation or intention to revoke any interest of any Loan Party in any of the CBD Authorizations that has not been remedied.

 - 60 -

(p) Environmental Matters. Except as, in the aggregate, would not reasonably be expected to have a Material Adverse Effect on the Loan Parties as a whole:

(i) Each Loan Party's business has been operated in compliance in all material respects with all applicable Environmental Laws and with all permits, licenses and authorizations issued to them pursuant to Environmental Laws.

(ii) There are no claims, investigations, litigation, administrative proceedings, whether pending or, to its knowledge, threatened relating to any Contaminants, Releases or other forms of pollution or alleged violation of applicable Environmental Laws (collectively "Environmental Matters") that may reasonably be expected to result in a Material Adverse Effect.

(q) Location of Assets. The property and assets of each Loan Party are located in those jurisdictions specified in Schedule D (as updated from time to time), and in no other jurisdiction (as updated in writing by the Borrower to the Lender 10 Business Days prior to any change). Also set out in Schedule D are: (i) the legal description of all real property owned by each Loan Party or its nominees as at the Closing Date, and (ii) a list of all locations leased by each Loan Party as at the Closing Date.

(r) Organizational Structure of the Borrower. The organizational structure of the Borrower and each Subsidiary of the Borrower is set out on Schedule D together with all additions, deletions or amendments thereto as are provided in writing to the Lender, and:

(i) the chief executive office and all jurisdictions where the Borrower operates are described on Schedule D together with all additions, deletions or amendments thereto as are provided in writing to the Lender from time to time; and

(ii) all of the outstanding Equity Securities of each Loan Party (other than the Borrower), are owned of record and beneficially by the Persons set forth in Schedule D; and all such Equity Securities so owned are duly authorized, validly issued, and fully paid and non-assessable, and were issued in compliance with all Applicable Laws, and are free and clear of all Security Interests, except for Permitted Encumbrances.

 - 61 -

(s) Material Contracts. A true and complete copy of each Material Contract has been delivered to the Lender. Each such Material Contract is in full force and effect. The applicable Loan Party that is a party thereto is not in default under or in breach of any material term or condition of any such Material Contract nor is the Borrower aware of any default under or breach of any material term or condition of any Material Contract by any other party thereto. No contract to which any Loan Party is a party contains any material provisions which would prevent a Loan Party from carrying on its business or activities in the ordinary course in a prudent and commercial manner.

(t) Security. The Security to which a Loan Party is a party creates in favour of the Lender, a legal, valid and enforceable Security Interest in the Property described therein and the proceeds thereof and constitute a fully perfected and first priority Security Interest on (except for Permitted Encumbrances), and in, all right, title and interest of such Loan Party in such Property.

(u) Taxes. Each Loan Party has filed all federal, provincial, state and local tax returns which are required to be filed and has paid all Taxes due pursuant to such returns or pursuant to any assessment received by it except such Taxes, if any, as are being contested in good faith and as to which adequate reserves have been provided. The charges, accruals and reserves on the books of each Loan Party, as applicable, in respect of any Taxes or other governmental charges are adequate.

(v) Labour Matters. No Loan Party is engaged in any unfair labour practice. There is:

(i) no material unfair labour practice complaint pending against any Loan Party or, to the best knowledge of the Loan Parties after due inquiry, threatened against any Loan Party, before the National Labor Relations Board, the Canada Industrial Relations Board or any other applicable provincial labour relations board or other Governmental Authority, and no grievance or arbitration proceeding arising out of or under collective bargaining agreements that could reasonably be expected to have a Material Adverse Effect is so pending against any Loan Party or, to the best knowledge of the Loan Parties after due inquiry, threatened against any of them;

(ii) no strike, labour dispute, slowdown or stoppage pending against any Loan Party, or to the best knowledge of the Loan Parties after due inquiry, threatened against any of them, which could reasonably be expected to have a Material Adverse Effect; and

(iii) to the best of the knowledge of the Loan Parties after due inquiry, no union representation questions with respect to the employees of any Loan Party and no union organizing activities which could reasonably be expected to have a Material Adverse Effect.

(w) Pension Plans. (i) Each Loan Party's Pension Plans are duly registered under all applicable Pension Laws, (ii) all obligations of any Loan Party required to be performed in connection with the Pension Plans or the funding agreements therefor have been performed in a timely fashion and there are no outstanding disputes concerning the assets held pursuant to any such funding agreement, (iii) all contributions or premiums required to be made by any Loan Party to the Pension Plans have been made in a timely fashion in accordance with the terms of the Pension Plans and all Pension Laws, (iv) all employee contributions to the Pension Plans required to be made by way of authorized payroll deduction have been properly withheld by each Loan Party and fully paid into the Pension Plans in a timely fashion in accordance with the terms of the Pension Plans and all Pension Laws, (v) all reports and disclosures relating to the Pension Plans required by Pension Laws have been filed or distributed in a timely fashion, (vi) no amount is due and owing by any of the Pension Plans under the Pension Laws, (vii) none of the Pension Plans is the subject of an investigation, proceeding, action or claim and there exists no state of fact which after notice or lapse of time or both would reasonably be expected to give rise to any such proceedings and (viii) no trust, statutory deemed trust or Security Interest has arisen or been imposed on any Pension Plan. No Loan Party is party to a Pension Plan that is a defined benefit pension plan or which contains a defined benefit pension provision contributed to or required to be contributed to by a Loan Party and that is or is required to be registered under the Pension Laws, or any similar legislation in any other jurisdiction.

 - 62 -

(x) ERISA Compliance. Schedule I sets forth, as of the Closing Date, a complete and correct list of, and that separately identifies, (a) all Title IV ERISA Plans, (b) all Multiemployer Plans and (c) all material Benefit Plans, if any. Each Benefit Plan, and each trust thereunder, intended to qualify for tax exempt status under Section 401 or 501 of the Code or other requirements of law so qualifies. Except for those that would not reasonably be expected to result in liabilities in excess of $100,000 in the aggregate, (i) each Benefit Plan is in compliance with applicable provisions of ERISA, the Code and other requirements of law, (ii) there are no existing or pending (or to the knowledge of Borrower, threatened) claims (other than routine claims for benefits in the normal course), sanctions, actions, lawsuits or other proceedings or investigation involving any Benefit Plan to which any Loan Party incurs or otherwise has or could have an obligation or any Liability and (iii) no ERISA Event is reasonably expected to occur. On the Closing Date, no ERISA Event has occurred in connection with which obligations and liabilities (contingent or otherwise) remain outstanding.

(y) ERISA. With respect to each Plan, the Borrower and all ERISA Affiliates have paid all required minimum contributions and installments on or before the due dates provided under Section 430(j) of the Code and could not reasonably be subject to a Lien under Section 430(k) of the Code or Section 303(k) or Title IV of ERISA. Neither the Borrower nor any ERISA Affiliate has filed, pursuant to Section 412(c) of the Code or Section 302(c) of ERISA, an application for a waiver of the minimum funding standard. No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect.

(z) Accuracy of Information. To the best of its knowledge, all factual information previously or contemporaneously furnished by or on behalf of a Loan Party in writing for purposes of or in connection with this Agreement or any transaction contemplated hereby is true and accurate in every material respect, as of the date so provided or specified therein, and such information is not incomplete by the omission of any material fact necessary to make such information not misleading. There is no fact known to a Loan Party which such Loan Party has not disclosed to the Lender which has resulted, or so far as such Loan Party can now reasonably foresee, will result in a Material Adverse Effect.

 - 63 -

(aa) Solvency. Each Loan Party is solvent and will not become insolvent after giving effect to the transactions contemplated in this Agreement.

(bb) Principal Place of Business. The "chief executive office", "place of business" and "chief place of business" (within the meaning of the Personal Property Security Act (Alberta)) of each Loan Party is as indicated in Schedule E, as updated from time to time.

(cc) Financial Year End. The Financial Year End of the Borrower is on October 31.

(dd) Guarantees. No Loan Party has guaranteed the obligations of any Person in respect of any Debt, save and except for Permitted Debt.

(ee) Corporate Name and Prior Transactions. Except as disclosed to the Lender, no Loan Party has been known by or used any other corporate or trade name, or been a party to any amalgamation, merger or consolidation.

(ff) Withholdings. Each Loan Party has withheld from its employees, customers and other applicable payees (and timely paid to the applicable Governmental Authority) the proper and accurate amount of all Taxes and other amounts required to be withheld or collected and remitted in compliance with all Applicable Laws. There are no liens for Taxes on the assets of any Loan Party except for Permitted Encumbrances.

(gg) Debt. No Loan Party has any Debt other than Permitted Debt. A description of all of the Debt of each Loan Party that is not disclosed in the financial statements most recently provided to the Lender or otherwise disclosed to the Lender in writing is set out in Schedule F.

(hh) Ownership of Shares. All of the issued and outstanding Equity Securities in the capital of and all rights, warrants or options to acquire Equity Securities in the capital of each Loan Party (other than the Borrower) are owned directly or indirectly by the Borrower.

(ii) Insurance. Each Loan Party maintains insurance policies of a scope and in an amount consistent with prudent industry practice given the nature of its business and such insurance policies are in full force and effect.

(jj) Intellectual Property. Each Loan Party owns or possesses the right to use all material patents, trademarks, trademark registrations, service marks, service mark registrations, trade names, copyrights, licences, inventions, trade secrets and rights necessary for the conduct of business and no Loan Party is aware of any claim to the contrary or any challenge by any other person to the rights of any Loan Party with respect to the foregoing. To the knowledge of the Loan Parties, the business of each Loan Party as now conducted does not, and as currently proposed to be conducted will not, infringe or conflict with patents, trademarks, service marks, trade names, copyrights, trade secrets, licences or other intellectual property or franchise right of any person. To the knowledge of each Loan Party, no claim has been made against any Loan Party alleging the infringement by any Loan Party of any patent, trademark, service mark, trade name, copyright, trade secret, licence in or other intellectual property right or franchise right of any person.

 - 64 -

(kk) Anti-Corruption Laws; Sanctions; Anti-Terrorism Laws. The Loan Parties, their Subsidiaries and their respective officers and employees and to the knowledge of the Loan Parties, their directors and agents, are in compliance with Anti-Corruption Laws and applicable Sanctions in all material respects. The Loan Parties have implemented and maintain in effect for themselves and their Subsidiaries policies and procedures to ensure compliance by the Loan Parties, their Subsidiaries, and their respective officers, employees, directors, and agents with Anti-Corruption Laws and applicable Sanctions. None of the Loan Parties, any of their Subsidiaries or any directors, officer, employee, agent, or affiliate of the Loan Parties or any of their Subsidiaries is an individual or entity that is, or is 50% or more owned (individually or in the aggregate, directly or indirectly) or controlled by individuals or entities (including any agency, political subdivision or instrumentality of any government) that are (i) the target of any Sanctions or (ii) located, organized or resident in a country or territory that is, or whose government is, the subject of Sanctions (currently Crimea, Cuba, Iran, North Korea and Syria).

7.2 Survival of Representations and Warranties

The representations and warranties contained in this Article 7 shall survive the execution and delivery of this Agreement and the making of Borrowings hereunder until all Outstanding Obligations have been paid in full, regardless of any investigation or examination made by the Lender or its counsel and the Lender shall be deemed to have relied upon each of such representations and warranties in making available each Borrowing hereunder. The representations and warranties set out this Article 7 will be deemed to be repeated by the Borrower as of the date of delivery of each Notice of Borrowing and as of the date of delivery of each Compliance Certificate.

Article 8
COVENANTS

8.1 Positive Covenants

From the date hereof and until the Outstanding Obligations are repaid in full, unless compliance therewith shall have been waived in writing by the Lender, the Borrower shall comply and shall cause each other Loan Party (if applicable) to:

(a) Existence. Do or cause to be done all such things as are necessary to maintain its existence in good standing, to ensure that it has at all times the right and is duly qualified to conduct its businesses and to obtain and maintain all material rights, privileges and franchises necessary for the conduct of its business.

(b) Conduct of Business. Maintain, operate and use its properties and assets, and will carry on and conduct its business in a proper and efficient manner in accordance with prudent industry practice so as to preserve and protect such properties and assets and business and the profits thereof.

 - 65 -

(c) As to Collateral. Defend all of its Property in which a security interest, mortgage or other charge is granted pursuant to the Security (collectively, "Collateral") against the claims and demands of all other parties claiming the same or an interest therein and will take all reasonable action to keep the Collateral free from all Security Interests other than Permitted Encumbrances and, except for Permitted Dispositions, will not sell, exchange, transfer, sign, lease, license or otherwise dispose of the Collateral, out of the ordinary course of business, or any interest therein, out of the ordinary course of business, without the prior written consent of the Lender, not to be unreasonably withheld. Each Loan Party will keep its Collateral in good order, condition and repair ordinary wear and tear excepted and will not use the Collateral in violation of the provisions of the Security or this Agreement or any insurance policy insuring Collateral or in violation in any material respect of any Applicable Laws and will keep all agreements, registrations and applications relating to intellectual property used by such Loan Party and its business in good standing and will renew all agreements and registrations as may be necessary or desirable to protect such intellectual property, unless, otherwise agreed to in writing by the Lender, and will apply to register all existing and future copyrights, trademarks, patents, integrated circuit topographies and industrial designs material to its business whenever it is commercially reasonable to do so.

(d) Payment of Principal, Interest and Expenses. Duly and punctually pay or cause to be paid to the Lender the Outstanding Obligations owed by it to the Lender at the times and places and in the manner provided for herein.

(e) Payment of Taxes and Claims. Pay and discharge promptly when due all Taxes, assessments and other governmental charges or levies imposed upon it or upon its properties or assets or upon any part thereof, as well as all claims of any kind (including claims for labour, materials and supplies) which, if unpaid, would by law become a lien, charge, trust or other claim upon any such properties or assets except for so long as it constitutes a Permitted Encumbrance; but such Loan Party shall not be required to pay any such Tax, assessment, charge or levy or claim if the amount, applicability or validity thereof shall currently be contested in good faith by appropriate proceedings and if such Loan Party shall have set aside on its books a reserve to the extent required by GAAP in an amount which is reasonably adequate with respect thereto.

(f) Use of Proceeds. Use the proceeds of all Borrowings solely for the purposes contemplated in this Agreement.

(g) Reserves. Maintain appropriate reserves for Taxes and other contingencies or liabilities in accordance with GAAP.

(h) Other Information. Furnish to the Lender promptly on request such other information in its possession respecting its financial condition and its business and operations as the Lender may from time to time reasonably require and shall authorize its auditor to provide to the Lender explanation or clarification of any financial information presented by or on behalf of such Loan Party to the Lender as the Lender may from time to time reasonably require.

 - 66 -

(i) Insurance. Insure and keep insured its properties, assets and business placed with such insurers and with such coverage (including stock and product recall coverage) and against such loss or damage to the extent insured against by comparable entities engaged in comparable businesses and such policies of insurance shall record the Lender as first loss payee. Each Loan Party shall pay or cause to be paid all premiums necessary to maintain any such insurance policies in good standing as such premiums become due and payable and shall not modify, alter, amend, replace or knowingly waive strict and timely performance thereof and shall perform all of its covenants and obligations thereunder.

(j) Books and Records. At all times maintain proper records and books of account and therein make true and correct entries in all material respects of all dealings and transactions relating to its business and, if requested by the Lender, will make the same available for inspection by the Lender or any agent of the Lender at all reasonable times.

(k) Access. Subject to the rights of tenants of any real property, Applicable Laws and upon reasonable prior written notice, permit the Lender through its officers or employees or through any consultants retained by it, upon request, to have reasonable access and from time to time, during regular business hours, but not more than once annually unless an Event of Default has occurred and is continuing, upon 48 hours prior written notice, to any of such Loan Party's premises and to any records, information or data in its possession so as to enable the Lender to ascertain the state of such Loan Party's financial condition or operations, and will permit the Lender to make copies of and abstracts from such records, information or data, and will upon request of the Lender deliver to the Lender copies of such records, information or data.

(l) Notice of Material Adverse Effect. Give to the Lender prompt written notice of any Material Adverse Effect.

(m) Notice of Litigation. Give to the Lender prompt written notice of any action, suit, litigation, or other proceeding in an amount greater than $500,000 of which the Borrower has knowledge, commenced or threatened in writing against a Loan Party.

(n) Notice of Default. Give to the Lender notice of any default or breach under any Material Contract the result of which would, either immediately or with the passage of time, entitle any other party thereto to accelerate the maturity of amounts of principal owing thereunder or to terminate such Material Contract, or which is otherwise materially adverse to the applicable Loan Party which is a party to such Material Contract, as soon as practicable after it becomes aware of same.

(o) Notice of Pension Event or ERISA Event. Give to the Lender notice of any Pension Event or ERISA Event, as soon as practicable after it becomes aware of same.

(p) Registration of Security. Provide the Lender with such assistance and do such things as the Lender may from time reasonably to time request so that the Security and any other instruments of conveyance or assignment effected pursuant to this Agreement or otherwise will be and remain registered, recorded or filed from time to time in such manner and in such places as may in the opinion of the Lender be necessary or advisable in perfecting the Security Interests constituted thereby.

 - 67 -

(q) Material Contracts. Perform all of its material obligations pursuant to all Material Contracts and pursue on a timely basis its material rights thereunder.

(r) Compliance with Laws. Comply in all material respects with all Applicable Laws (other than Cannabis Laws and CBD Laws, which shall be complied with in all respects), including Environmental Laws.

(s) New Locations and Names. Advise the Lender in writing ten (10) Business Days prior to the occurrence of the (i) change of location of its "chief executive office", "place of business", "registered office", "chief place of business", "principal place of business" or the location of its records; or (ii) change of its corporate name. Each Loan Party shall provide the Lender with any additional security which the Lender may reasonably deem necessary or advisable to maintain or continue the effectiveness of its Security as a result of such change and co-operate with the Lender so that the Lender may file such registrations in such jurisdictions in order to perfect the Security Interest created by the Security in such property and deliver such other documents and opinions as the Lender deems reasonably necessary for such purpose.

(t) Cooperate With Lender. Cooperate fully with the Lender with respect to any proceedings before any Governmental Authority which may in any way materially and adversely affect the rights of the Lender hereunder or any rights obtained by the Lender under any of the other Loan Documents. Each Loan Party shall cooperate with the Lender in obtaining for the Lender the benefits of any insurance proceeds lawfully or equitably payable in connection with any Property, to the extent that Lender is entitled to the same under the terms of this Agreement, and the Lender shall be reimbursed for any reasonable actual out-of-pocket expenses incurred in connection therewith (including, without limitation, reasonable attorney's fees and disbursements, and the payment by such Loan Party of the expense of an appraisal on behalf of the Lender in case of a fire or other casualty affecting such Property or any part thereof) out of such insurance proceeds.

(u) Cannabis Business. Each Loan Party shall ensure that:

(i) the only business related to Cannabis carried on by such Loan Party shall be the Cannabis Business and such business is at all times in compliance with all Cannabis Laws and all applicable Cannabis Authorizations;

(ii) the retail sale, distribution and storage of Cannabis in connection with the Cannabis Business of each such Loan Party occurs solely in facilities licenced for such purposes by an applicable Governmental Authority, to the extent that such facilities are required to be licensed by Applicable Law; and

(iii) all storefront, retail operations or distribution operations in connection with the Cannabis Business of such Loan Party are conducted where it is lawfully permitted to do so and in compliance with all Cannabis Laws and other Applicable Laws except in connection with a Permitted Disposition.

 - 68 -

(v) Cannabis Authorizations. Each Loan Party shall:

(i) obtain when required each Cannabis Authorization and maintain such Cannabis Authorizations as valid and in full force and effect at all times and apply for and obtained each future Cannabis Authorization on or before such time as it shall be required by Cannabis Laws to obtain such Cannabis Authorization;

(ii) be in compliance at all times with the requirements of the Cannabis Authorizations and do all things required of a holder thereof by Applicable Laws;

(iii) remain the sole legal and beneficial owner of the Cannabis Authorizations and not dispose of or abandon any right, title or interest in any Cannabis Authorization;

(iv) deliver to the Lender a copy of each Cannabis Authorization; and

(v) pay all taxes, assessments, maintenance fees and other amounts required to be paid to maintain each Cannabis Authorization, other than those taxes, assessments, maintenance fees and other amounts the amount or validity of which is currently being contested in good faith by appropriate proceedings being diligently pursued.

(w) Notices re Cannabis Business and Cannabis Authorizations. The Borrower shall deliver, or cause to be delivered, to the Lender promptly, and in any event, within ten Business Days, upon receipt thereof:

(i) any warning, document, letter or notice from any Governmental Authority with respect to the Cannabis Business or Cannabis Activities of a Loan Party not being operated in compliance with Cannabis Laws (except where any such non-compliance with Cannabis Laws is capable of being remedied, and is being diligently remedied, within the time period permitted by the applicable Governmental Authority, but only so long as such Loan Party is not subject to any sanction, fine or penalty during such period);

(ii) any and all correspondence and notices with respect to any material regulatory or other investigations into the Cannabis Business or Cannabis Activities of a Loan Party, including, without limitation, any changes in a Loan Party's licensing or regulatory status, or any threatened or actual enforcement actions, including regulatory fines taken by any Governmental Authority; and

(iii) upon the reasonable request of the Lender, such information necessary to demonstrate compliance with Sections 8.1(u), (v) and (w) (including the controls implemented for the purposes thereof)

(x) CBD Supplier Attestation. Prior to ordering or accepting any CBD or CBD product from a supplier (other than a Loan Party), ensure that such supplier has, within the prior six (6) months, executed a self-certifying attestation in the form attached hereto as Schedule J, as such form may be amended from time to time, subject to prior written consent from the Lender.

 - 69 -

(y) Environmental Notification. Promptly forward to the Lender copies of all material orders, notices, permits, applications or other communications and reports in connection with any Environmental Law which describe, allege or are otherwise in respect of any problem, violation or other condition that would have a Material Adverse Effect.

(z) Insurance. Immediately notify the Lender in writing of any termination, cancellation or any reduction in the amount or the material change in the coverage provided under, any of its insurance policies and from time to time at the Lender's request will deliver a copy of any of its insurance policies (or satisfactory evidence of such insurance policy) to the Lender.

(aa) Intellectual Property. Maintain the right to use all material patents, trademarks, trademark registrations, service marks, service mark registrations, trade names, copyrights, licences, inventions, trade secrets and rights necessary for the conduct of business.

(bb) Payments of Pension Plans and ERISA Liabilities. Pay or discharge or cause to be paid or discharged, before the same shall become delinquent all payments required to be made by a Loan Party pursuant to any Pension Plan and any ERISA liabilities (other than the amounts of which are immaterial).

(cc) Maintain Accounts. By no later than 90 days following the Closing Date, maintain all accounts and banking business of each Loan Party with the Lender or its Affiliates, provided that the Loan Parties shall be permitted to maintain accounts with other lenders so long as (i) the aggregate balance of all such accounts remains below Cdn. $8,000,000 (or Equivalent Amount) at all times and (ii) all accounts with any one account provider with an aggregate balance greater than or equal to Cdn.$100,000 (or Equivalent Amount) become subject to blocked account agreements (or equivalent) in favour of the Lender (in form and substance satisfactory to the Lender) by no later than 90 days following the Closing Date (or later date as the Lender may agree).

(dd) Specified Debt Maturity Dates. With respect to all Specified Debt, unless the Lender has provided prior written consent for the Borrower to repay such Specified Debt at or prior to its respective maturity (which consent may be withheld by the Lender in its sole discretion), by no later than 5 months prior to the existing maturity date of such Debt:

(i) confirm to the Lender, in the case of any Specified Debt which is so convertible, that it intends to convert such Debt to Equity Securities, all with all details required by the Lender with respect to such conversion;

(ii) confirm to the Lender that it has reached an agreement to extend the maturity date of such Specified Debt to a date which not less than six months beyond the Maturity Date; or

 - 70 -

(iii) confirm to the Lender it has reached an agreement to refinance such Specified Debt, such refinancing to be subject to the Lender's consent in its sole discretion and on terms satisfactory to the Lender (including any postponement and subordination thereof as required by the Lender),

provided that, with respect to the Windsor Mortgage, the Borrower shall provide such information or request such consent from the Lender by no later than October 31, 2021.

(ee) PPP Loan. With respect to any PPP Loan, the applicable Loan Party shall:

(i) maintain all records required to be submitted in connection with the forgiveness of the PPP Loan;

(ii) use proceeds of the PPP Loan exclusively towards permitted uses under the CARES Act;

(iii) promptly, upon spending the proceeds from the PPP Loan in full, apply for forgiveness of the PPP Loan in accordance with the requirements of Section 1106 of the CARES Act; and

(iv) promptly upon receipt thereof, provide the Lender with evidence of forgiveness of the PPP Loan.

8.2 Negative Covenants

From the date hereof and until the Outstanding Obligations are paid in full, unless waived in writing by the Lender, the Borrower shall not, and shall cause each other Loan Party not to (if applicable):

(a) Not to Amalgamate, etc. Enter into any transaction or series of related transactions (whether by way of amalgamation, merger, winding-up, consolidation, reorganization, reconstruction, continuance, transfer, sale, lease or otherwise) whereby all or substantially all of its undertaking, properties, rights or assets would become the property of any other Person (other than in the case of a Loan Party that is not the Borrower, another Loan Party that is not the Borrower) or, in the case of amalgamation or continuance, of the continuing corporation resulting therefrom.

(b) Debt. Create, assume, issue or permit to exist, directly or indirectly, any Debt except for Permitted Debt and shall not make any repayments of the Specified Debt, except for:

(i) payment of the Structured Payment Amount to Aurora, provided that no Default or Event of Default has occurred that is continuing or would result from making such payment;

(ii) payment of interest to OCN under the OCN Loan Agreements provided that no Default or Event of Default has occurred that is continuing or would result from making such payment;

 - 71 -

(iii) payments of principal owing to Dreamweavers in respect of the Dreamweavers Deferred Payment in accordance with the terms of the Dreamweavers Amalgamation Agreement, provided that no Default or Event of Default has occurred that is continuing or would result from making such payment;

(iv) repayment in full of the principal amount owing under the Cay Innovations Loan Agreement, being Cdn. $Redacted together with interest thereof on or before the maturity date of such Debt, provided that no Default or Event of Default has occurred that is continuing or would result from making such payment;

(v) payment of interest to Windsor under the Windsor Promissory Note provided that no Default or Event of Default has occurred that is continuing or would result from making such payment; and

(vi) payment of interest to Aphria under the Aphria Debenture provided that no Default or Event of Default has occurred that is continuing or would result from making such payment.

(c) Negative Pledge. Create, assume, incur or suffer to exist any Security Interest in or upon any of its personal property except for Permitted Encumbrances.

(d) Material Contracts. Cancel or terminate any Material Contract or amend or otherwise modify any Material Contract or waive any default or breach under any Material Contract, or take any other action in connection with any Material Contract if doing so would result in a Material Adverse Effect.

(e) Change in Financial Year or Business. (i) Change its Financial Year end, (ii) change the nature, form or substance of its business or lines of business which it now conducts, or (iii) commence carrying on any other business other than the Cannabis Business.

(f) Change in Articles, Name and Asset Location. (i) Amend, terminate or assign its articles or other constating documents without the prior written consent of the Lender, if such amendment, termination or assignment, would, in the reasonable opinion of the Lender, have a Material Adverse Effect (ii) change its name or the location of its assets except in compliance with Section 8.1 hereof.

(g) Change of Control. Consent to or enter any agreement to effect a Change of Control.

(h) Restriction on Distributions. Except to another Loan Party, declare, pay or make, directly or indirectly, any Distribution (other than, for greater certainty, to the extent expressly permitted pursuant to 8.2(b)).

(i) Restrictions on Dispositions. Except for Permitted Encumbrances and Permitted Dispositions, sell, transfer, assign, convey, lease or otherwise dispose of any of its Property.

 - 72 -

(j) Restriction on Financial Assistance. Provide any form of financial assistance (whether by way of a Guarantee, an Investment or otherwise) to any Person other than Permitted Investments.

(k) Limitation on Swaps. Enter into any Swap outside the ordinary course of its business; provided that, without limiting the generality of the foregoing, the following shall be considered to be Swaps entered into outside of the ordinary course of business:

(i) any Swap that is entered into for any purpose other than managing interest rate risk, or is otherwise entered into for speculative purposes (determined, where relevant, by reference to GAAP); and

(ii) any Swap entered into with a counterparty that is not the Lender.

(l) Qualified Cannabis Jurisdictions and Cannabis Business; Qualified CBD Jurisdictions and CBD Business. No Loan Party shall, nor shall any Loan Party permit any other Loan Party to:

(i) engage in any business other than the Permitted Business;

(ii) conduct any part of the Cannabis Business outside of a Qualified Cannabis Jurisdiction, provided however, that notwithstanding the foregoing the Loan Parties may engage in CBD Business in Qualified CBD Jurisdictions and Non-Cannabis Accessory Business in Qualified Jurisdictions;

(iii) conduct any part of the Cannabis Business, CBD Business or any Cannabis Activity or CBD Activity that in any way results in a Loan Party becoming subject to laws outside of a Qualified Cannabis Jurisdiction or Qualified CBD Jurisdiction, as applicable;

(iv) conduct any part of the Non-Cannabis Accessory Business outside of a Qualified Jurisdiction;

(v) receive any payments in respect of any Permitted Business from any Person outside of any Qualified Jurisdiction; or

(vi) deposit any proceeds from any Permitted Business in any account outside of any Qualified Jurisdiction.

(m) CBD Products Subject to Recall/Enforcement Action. Sell, purchase, or distribute any CBD or CBD product which is the subject of an ongoing material recall, enforcement, or similar action by any Governmental Authority including, but not limited to, product safety recalls, Food Drug Administration (United States) enforcement, testing-related recalls, and state/local health department mandated recalls.

(n) CBD Suppliers Subject to Enforcement Action. Purchase or accept delivery of any CBD or CBD product from any supplier, including Loan Parties, which is subject to an ongoing material enforcement or similar action by any Governmental Authority, including, but not limited to, Food Drug Administration (United States) enforcement.

 - 73 -

(o) New Subsidiaries. Create or acquire any Material Subsidiary unless (i) all of the issued and outstanding shares in the capital of such Material Subsidiary are owned directly or indirectly by the Borrower; and (ii) any new Material Subsidiary provides all Security required to be provided by it hereunder within 10 Business Days of the creation or acquisition of such Material Subsidiary, in each case accompanied by legal opinions as contemplated herein.

(p) Auditors. Change its auditors to a firm that is not a nationally recognized auditing firm.

(q) Limitation on Pension Plans. Adopt or maintain any defined benefit Pension Plans at any time.

8.3 Reporting Covenants

From the date hereof and until the Outstanding Obligations are repaid in full, unless compliance therewith shall have been waived in writing by the Lender:

(a) Annual Financial Information. As soon as practicable and in any event within 120 days after the end of each of its Financial Years, the Borrower shall deliver to the Lender:

(i) consolidated financial statements of the Borrower, on an audited basis prepared by a firm of qualified accountants, including income statement, cash flow statement, balance sheet and management discussion and analysis including same store sales figures therein;

(ii) a Compliance Certificate;

(iii) financial forecast showing income statement, cash flow statement and balance sheet for the next following Financial Year with commentary relative to financial requirements;

(iv) copies of all Material Contracts or amendments and modifications to Material Contracts, not previously provided to the Lender; and

(b) Quarterly Financial Information. As soon as practicable and in any event within 45 days following the end of each of the first three fiscal quarters of each of its Financial Years, the Borrower shall deliver to the Lender:

(i) consolidated notice to reader financial statements of the Borrower for that fiscal quarter, including income statement, cash flow statement, balance sheet and management discussion and analysis including same store sales figures therein;

(ii) a Compliance Certificate;

 - 74 -

(iii) quarterly forecast (including cash flow statement, income statement and balance sheet); and

(iv) copies of all Material Contracts or amendments and modifications to Material Contracts, not previously provided to the Lender;

(c) Monthly Financial Information. If at any time the Liquidity Test is in effect, the Borrower shall deliver to the Lender as soon as practicable and in any event within 30 days following the end of each calendar month, a Compliance Certificate.

(d) Other Financial Information. Promptly upon request of the Lender, the Borrower shall deliver or cause to be delivered to the Lender such other information, reports, certificates, projections of income and cash flow or other matters affecting the business, affairs, financial condition, property or assets of any of the Loan Parties as the Lender may reasonably request.

8.4 Financial Covenants.

So long as this Agreement is in force, the Borrower will ensure that at all times:

(a) Adjusted Debt to EBITDA Ratio. The Borrower shall not permit the Adjusted Debt to EBITDA ratio to greater than:

(i) Redacted for each fiscal quarter up to and including the fiscal quarter ending January 31, 2022;

(ii) Redacted for the fiscal quarter ending April 30, 2022 and the fiscal quarter ending July 31, 2022; and

(iii) Redacted for the fiscal quarter ending October 31, 2022 and all fiscal quarters thereafter;

(b) Interest Coverage Ratio. The Borrower shall not permit the Interest Coverage Ratio to fall below Redacted; and

(c) Minimum Liquidity. The Borrower shall not permit the Liquidity to be less than Redacted, to be tested monthly (the "Liquidity Test").

8.5 Material Subsidiaries

(a) Ownership of Assets and Total EBITDA: the Borrower shall ensure at all times that:

(i) the EBITDA directly attributed to the Borrower and the Material Subsidiaries determined on an unconsolidated but combined basis is equal to at least Redacted% of the Borrower's EBITDA determined on a consolidated basis (excluding, for certainty, any EBITDA attributed to Excluded Foreign Subsidiaries); and

(ii) the Borrower and the Material Subsidiaries legally, beneficially and directly own at least Redacted% of the consolidated assets of the Borrower (based on the amount thereof set forth in the financial statements most recently delivered as required hereunder and excluding, for certainty, any assets attributed to Excluded Foreign Subsidiaries),

 - 75 -

(collectively, the "Ring-Fence Test"); and

(b) Designation of Material Subsidiaries: the Borrower shall, from time to time, designate such Material Subsidiaries as it shall determine as Material Subsidiaries and shall notify the Lender that such Person has become a Material Subsidiary and furnish the Lender with the name, date and jurisdiction of incorporation or amalgamation, as applicable, description of business and principal place of business address of each Material Subsidiary and shall cause each Material Subsidiary to provide to the Lender within 10 Business Days (or such later date as the Lender may agree to, acting reasonably) of it becoming a Material Subsidiary, the Security contemplated by Section 9.1, together with opinions and supporting documents in respect thereto.

Article 9
SECURITY

9.1 Security

The Borrower shall execute and deliver to, or shall cause to be executed and delivered to and registered as reasonably required by the Lender, in form and substance satisfactory to the Lender, documents to secure Outstanding Obligations as follows:

(a) a registered general security agreement from each Loan Party providing a first ranking security interest over all personal property of such Loan Party subject to Permitted Encumbrances;

(b) Redacted

(c) Redacted;

(d) an unlimited guarantee from each Guarantor in favour of the Lender;

(e) to the extent a Loan Party is incorporated, operating in or conducting business in (including holding any Cannabis Authorization or CBD Authorization in relation to provision to), the Province of Quebec, a hypothec from such Loan Party in a principal amount as required by the Lender, acting reasonably;

(f) Redacted;

(g) subordination and postponement agreement from Aurora;

(h) blocked account agreements (or equivalent) as required pursuant to Section 8.1(cc) (the "Blocked Account Agreements"); and

(i) all such other security agreements from the Loan Parties which the Lender may reasonably require for the purposes of the foregoing.

 - 76 -

9.2 Further Assurances

The Borrower shall deliver or shall cause to be delivered to the Lender from time to time duly executed documents in form and substance reasonably satisfactory to the Lender and its counsel as may be reasonably requested by the Lender for the purpose of giving effect to this Agreement, the Lender's banking relationship and business with the Loan Parties or the Security, or for the purpose of establishing compliance with the representations, warranties and conditions of this Agreement. The Lender shall release and discharge, at the Borrower's cost and expense (including reasonable and documented legal fees) the Security and all other obligations hereunder upon the disposition of the applicable Property so long as the Operating Facility is terminated and all Outstanding Obligations are repaid (or cash collateralization in full in the case of Bankers' Acceptances and Letters of Credit simultaneously with such disposition).

Article 10
EVENTS OF DEFAULT

10.1 Events of Default

Notwithstanding anything to the contrary herein:

(a) the right of the Borrower to obtain further Borrowings shall, at the option of the Lender, cease and the Lender shall have no obligation to honour any cheques or other orders for payment;

(b) the Outstanding Obligations shall, at the option of the Lender, become immediately due and payable to the Lender and the Lender may without notice to any Loan Party apply any amounts outstanding to the credit of such Loan Party pursuant to the terms hereof to repayment of the Outstanding Obligations, and

(c) the Security shall, at the option of the Lender, become immediately enforceable, subject to the terms and conditions of the Security and Applicable Law,

upon the occurrence of any of the following events (each an "Event of Default"):

(d) Failure to Pay Principal. If a Loan Party fails to make punctual payment of any principal amount payable hereunder;

(e) Failure to Pay Other Amounts. If a Loan Party fails to make punctual payment when due of any amount payable hereunder (including, interest or fees and other than principal) and if such payment is not made within three (3) Business Days of the day on which such payment is due;

(f) False Representations, Etc. If any representation or warranty made or given herein, in any certificate delivered pursuant hereto, or in any financial statements delivered pursuant hereto, is false or erroneous in any material respect when made, given or delivered and, to the extent capable of correction or remedy, the same is not corrected or remedied within 20 Business Days after written notice thereof by the Lender;

(g) Cross-Default. If a Loan Party defaults in the payment, when due, of any Debt in the principal amount of $500,000 or greater, and such default has not been waived by such Person(s) or cured within the applicable cure period, or if such Debt is accelerated or otherwise becomes due and payable prior to the stated maturity thereof as a result of a breach of the terms of such Debt;

 - 77 -

(h) Default in Other Covenants. If, other than in respect of covenants otherwise dealt with in this Section 10.1, there is any default or failure in the observance or performance of any other act required to be done under the Loan Documents or any other covenant or condition required to be observed or performed under the Loan Documents, and unless a specific time for performance of such covenant is otherwise specified in the applicable provision of this Agreement, the default or failure continues for 20 Business Days after notice by the Lender to the Borrower specifying such default or failure or, such longer period of time so long as the Borrower is diligently pursuing such remedy and such default or failure does not have a Material Adverse Effect;

(i) CBD Supply Defaults. If there is any default or failure in the observance or performance of the covenants identified in Section 8.1(x), 8.2(m) or 8.2(n).

(j) Change in Control. If a Change of Control of a Loan Party occurs, without the prior written consent of the Lender, not to be unreasonably withheld;

(k) Insurance Lapse. If any insurance on the properties or assets of a Loan Party having an aggregate fair market value exceeding $500,000 lapses and such coverage shall not be reinstated within 2 Business Days of such lapse;

(l) Voluntary Proceedings. If a Loan Party makes a general assignment for the benefit of creditors; or any proceeding or filing is instituted or made by a Loan Party seeking relief on its behalf as debtor, or to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding-up, reorganization, arrangement, adjustment or composition of it or its debts under any similar law relating to bankruptcy, insolvency, reorganization or relief of debtors, or seeking appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its properties or assets; or a Loan Party takes any corporate action to authorize any of the actions set forth in this Section 10.1(l);

(m) Involuntary Proceedings. If any notice of intention is filed or any proceeding or filing is instituted or made against a Loan Party in any jurisdiction seeking to have an order for relief entered against it as debtor or to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding-up, reorganization, arrangement, adjustment or composition of it or its debts under any law relating to bankruptcy, insolvency, reorganization or relief of debtors, or seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or any substantial part of its properties or assets or seeking possession, foreclosure or retention, or sale or other disposition of, or other proceedings to enforce security over, all or a substantial part of the assets of a Loan Party unless the same is being contested actively and diligently in good faith by appropriate and timely proceedings and is dismissed, vacated or stayed within 20 Business Days of institution thereof;

(n) Receiver, etc. If a receiver, liquidator, trustee, sequestration or other officer with like powers is appointed with respect to, or an encumbrancer pursuant to a Security Interest or otherwise takes possession of, or forecloses or retains, or sells or otherwise disposes of, or otherwise proceeds to enforce security over any of the properties or assets of a Loan Party in excess of $500,000 (individually or in the aggregate), or gives notice of its intention to do so;

 - 78 -

(o) Execution, Distress. If any writs, attachments, executions, sequestrations, extents, distresses or any other similar processes in the aggregate greater than $500,000 becomes enforceable against a Loan Party or any of the properties or assets of a Loan Party except where the same is being contested actively and diligently in good faith by appropriate and timely proceedings and the enforcement or levy has been stayed;

(p) Suspension or Change of Business. If the Borrower or the Loan Parties as a whole suspend or cease or threaten to suspend or cease business;

(q) Sale. If the Borrower or the Loan Parties as a whole sell or otherwise dispose of, or agree to sell or otherwise dispose of, all or substantially all of its or their undertaking and property and assets whether in one transaction or a series of related transactions;

(r) Validity. If any provision of any Loan Document shall for any reason cease to be valid, binding and enforceable in accordance with its terms or if a Loan Party shall so assert in writing; or any Security Interest created under any Loan Document shall cease to be a valid and perfected Security Interest having, subject to the provisions hereof, the first priority in any of the collateral purported to be covered thereby subject to Permitted Encumbrances in each case unless such Loan Document or Security Interest is capable of being reinstated or replaced and is replaced or reinstated to the Lender's satisfaction within a period of ten (10) Business Days after the earlier of the Borrower becoming aware of such event or the Lender giving notice to the Borrower of such event;

(s) Assignment. If a Loan Party assigns any of its rights under this Agreement or any of the Loan Documents or any interest herein or therein to a third party in contravention of this Agreement;

(t) Adverse Judgments. If one or more final and non-appealable judgments for the payment of money aggregating in excess of Redacted shall be rendered against a Loan Party and such Loan Party shall fail to discharge or stay enforcement of the same within 20 Business Days from the date of notice of entry thereof;

(u) Unremitted Priority Payables. If a Loan Party fails to remit to the applicable Governmental Authority, any Priority Payable in excess in the aggregate of Redacted owing by it within 20 Business Days of the date such Priority Payable became due;

(v) Environmental Liability. If a Loan Party violates any Environmental Law which results in an action request, violation notice or other notice or control order, cancellation of any license or certificate or approval that results in or that could reasonably be expected to result in a Material Adverse Effect, save and except where the action request, violation notice or other notice or control order or cancellation is being contested actively and diligently in good faith by appropriate and timely proceedings and the enforcement thereof has been stayed;

 - 79 -

(w) Environmental Order. If any legally binding order relating to any Environmental Activity is issued by any Governmental Authority against a Loan Party and such order has not been satisfied or discharged within the time allowed for in such order or, if no time is specified in such order, within 90 days after the date such order was received by a Loan Party or such longer period as the Lender may agree to, acting reasonably, provided that such Loan Party is at all times acting diligently and in good faith to satisfy the order;

(x) Material Adverse Effect. If at any time there occurs an event or circumstance which, in the opinion of the Lender, acting reasonably, represents a Material Adverse Effect and, if capable of remedy, such event shall not be remedied within a period of 20 Business Days from the date of notice by such Loan Party to the Lender of such event;

(y) Qualified Auditors' Report. If the auditors of a Loan Party should issue a qualified auditors' report with the annual audited financial statements for any Financial Year which is not acceptable to the Lender, acting reasonably and within a period of 20 Business Days after the delivery of such financial statements hereunder such qualification is not rectified or otherwise dealt with to the satisfaction of Lender, acting reasonably;

(z) Material Contract Breach. If there occurs a material breach by any Loan Party under any Material Contract which is not rectified within any allowed cure period (if any) thereunder;

(aa) Pension Event. If there occurs a Pension Event; or

(bb) Cannabis and CBD Events:

(i) If the Cannabis Act or any other Cannabis Law or CBD Law permitted the Loan Parties to conduct the Cannabis Activities or CBD Activities is repealed and is not immediately replaced with substantially similar legislation;

(ii) If any Cannabis Authorization or CBD Authorization shall:

(A) expire or be revoked, terminated or cancelled and in any case not immediately replaced, renewed or reinstated on comparable terms; or

(B) be modified in any materially adverse fashion; or

(iii) If any enforcement action by a Governmental Authority is taken against Loan Parties related to Loan Parties’ CBD Activities.

(cc) ERISA.

(i) with respect to a Plan, (i) any failure to pay all required minimum contributions and installments on or before the due dates provided under Section 430(j) of the Code or (ii) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA, of an application for a waiver of the minimum funding standard;

 - 80 -

(ii) the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, would reasonably be expected to result in Material Adverse Effect.

10.2 Lender May Waive

The Lender may at any time waive any Default or Event of Default which may have occurred, provided that no such waiver shall extend to or be taken in any manner whatsoever to affect any subsequent Default or Event of Default or the rights or remedies resulting therefrom. No such waiver shall be effective unless given by the Lender in writing.

10.3 Remedies are Cumulative

For greater certainty, the rights and remedies of the Lender under this Agreement are cumulative and are in addition to and not in substitution for any rights or remedies provided by law; and any single or partial exercise by the Lender of any right or remedy for a Default or Event of Default or breach of any term, covenant, condition or agreement contained in any of the Loan Documents shall not be deemed to be a waiver of or to alter, affect or prejudice any other right or remedy to which the Lender may be lawfully entitled for the same Default or Event of Default.

10.4 Set-Off

The Lender shall be entitled (subject to prior ranking Permitted Encumbrances) at any time or from time to time after the occurrence of an Event of Default which is continuing, without notice to set-off, consolidate and to apply any or all deposits and any other indebtedness at any time held by or owing by the Lender to a Loan Party against and on account of the debts, liabilities or obligations of such Loan Party to the Lender, whether or not due and payable.

10.5 Cash Collateral Accounts

Following the occurrence of:

(a) an Event of Default which is continuing; or

(b) an event referred to in Section 4.5 where the Borrower is required to make payment to a Cash Collateral Account of the required amount;

the Borrower shall forthwith pay to the Lender, for deposit into a Cash Collateral Account, an amount equal to the Lender's maximum potential liability under then outstanding Bankers' Acceptances and (unless the Borrower makes payment of the amount required pursuant to Section 11.5) Libor Loans (collectively, the "Escrow Funds"). The Escrow Funds shall, in the case of (a) above, be held by the Lender for set-off against future indebtedness owing by the Borrower to the Lenders in respect of such Bankers' Acceptances and (unless the Borrower makes payment of the amount required pursuant to Section 11.5) Libor Loans, or, in the case of (b) above, be applied as provided in Section 4.5. Further, in the case of (a) above, in addition to any other rights or remedies of the Lender hereunder, the Lender as and by way of collateral security shall be entitled to deposit and retain in a Cash Collateral Account amounts which are received by the Lender from a Loan Party or as proceeds of realization of any Security to the extent such amounts may be required to satisfy any Outstanding Obligations.

 - 81 -

10.6 Waiver of Jury Trial

EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING BROUGHT IN THE UNITED STATES OF AMERICA DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT 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 BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

Article 11
GENERAL

11.1 Notices

Any notice, request or other communication hereunder to any of the parties hereto shall be in writing and be well and sufficiently given if delivered personally or sent by prepaid registered mail to its address or by telecopier or email to the number and to the attention of the person set forth below:

(a) In the case of the Borrower:

High Tide Inc.
#112, 11127 15^th Street NE
Calgary, Alberta T3K 2M4

Attention: Joy Avzar, VP and Legal Counsel and Rahim Kanji, CFO

Email: Redacted and Redacted

(b) In the case of the Lender:

ATB Financial

600, 585 - 8 Avenue SW

Calgary AB T2P 1G1

Attention: Max Herrera

Email: Redacted

Any such notice shall be deemed to be given and received, if delivered, when delivered, and if mailed, on the third Business Day following the date on which it was mailed (unless an interruption of postal services occurs or is continuing on or within the three Business Days after the date of mailing in which case the notice shall be deemed to have been received on the third Business Day after postal service resumes), and if sent by telecopier on the next Business Day after the day on which the telecopy is sent. Either party may by notice to the other, given as aforesaid, designate a changed address or telecopier number.

 - 82 -

11.2 Performance of Covenants by the Lender

So long as an Event of Default has occurred that is continuing, if any of the covenants or obligations contained herein shall not be performed by the Borrower, the Lender may perform such covenant or obligation and, if in so doing the Lender spends money or incurs liability, the amount of money so spent or liability incurred shall be treated as a Prime Rate Loan.

11.3 Indemnity

In addition to any other indemnity provided for herein, the Borrower hereby agrees to indemnify the Lender (including its directors, officers, employees and agents) on demand against any loss (other than loss of profit), reasonable expense or liability (including legal fees and reasonable disbursements) which the Lender may sustain or incur as a consequence of the action or inaction of the Borrower in connection with:

(a) any default in payment of the principal amount of any Borrowing or any part thereof or interest accrued thereon, as and when due and payable;

(b) any failure to fulfill on or before any Borrowing Date the conditions precedent to any Borrowing as provided for in this Agreement, if as a result of such failure such Borrowing is not made on such date (including losses, expenses or liabilities incurred by reason of the liquidation or re-employment of deposits or other funds acquired by the Lender to fund any loan to be made by the Lender as part of a Borrowing, as a result of such failure, is not made on such Borrowing Date);

(c) the occurrence of any Default or Event of Default under any of the Loan Documents;

(d) any misrepresentation made by a Loan Party in any Loan Document; or

(e) any investigation, litigation or proceeding related to this Agreement and the transactions contemplated thereby,

including but not limited to any loss or expense sustained or incurred in liquidating or redeploying deposits or other funds contracted for or acquired or used to effect or maintain such Borrowing or part thereof.

11.4 Environmental Indemnity

The Borrower shall at all times indemnify and hold the Lender harmless against and from any and all claims, suits, actions, debts, damages, costs, losses, obligations, judgments, charges, and expenses, of any nature whatsoever suffered or incurred by the Lender, whether upon realization of the Security, or as lender to the Borrower hereunder, or as successor to or assignee of any right or interest of the Borrower, or as a result of any order, investigation or action by any Governmental Authority relating to a Loan Party its business or as privileged or hypothecary creditor or mortgagee in possession of the Lands or as successor or successor-in-interest to a Loan Party as a result of any taking of possession of the Lands or by foreclosure deed or deed in lieu of foreclosure or by any other means relating to a Loan Party, under or on account of any breach of any Environmental Law which occurred prior to or during the time that a Loan Party had control or possession of the Lands (and except as occasioned by the Lender's negligence or willful misconduct), with respect to:

 - 83 -

(a) the Release of a Contaminant, the threat of the Release of any Contaminant, or the presence of any Contaminant affecting the Lands, whether or not the same originates or emanates from the Lands or any contiguous real or immovable property located thereon, including any loss of value of the Lands as a result of any of the foregoing;

(b) the Release of a Contaminant owned by, or under the charge, management or control of a Loan Party, or any predecessor or assignor of a Loan Party;

(c) any costs incurred by any Governmental Authority or any other Person or damages from injury to, destruction of, or loss of natural resources in relation to, the Lands, including reasonable costs of assessing such injury, destruction or loss incurred under any Environmental Laws;

(d) liability for personal injury or property damage arising by reason of any civil law offenses or quasi-offenses or under any statutory or common law tort or similar theory, including, without limitation, damages assessed for the maintenance of a public or private nuisance or for the carrying on of a dangerous activity at, near, or with respect to the Lands; and/or

(e) any other environmental matter affecting the Lands or the operations and activities of a Loan Party within the jurisdiction of any federal, provincial, municipal, state or local environmental agency;

The obligations of a Loan Party under this Section 11.4 shall arise upon the discovery of the presence or Release of any Contaminant at, upon, under, over, within or with respect to the Lands, whether or not any Governmental Authority has taken or threatened any action in connection with the presence of any Contaminant.

11.5 Funding Indemnity

If, for any reason whatsoever and whether or not required or permitted pursuant to the provisions of this Agreement, the Borrower repays, prepays, converts or cancels a Libor Loan other than on the last day of a Libor Interest Period applicable to such Libor Loan, or fails for any reason to borrow, convert, Rollover or otherwise act in accordance with a notice given hereunder, the Borrower shall indemnify the Lender for any out-of-pocket loss or expense actually incurred by such Lender as a direct result thereof including any loss of profit or expenses the Lender incurs by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to maintain the Libor Loan or any increased interest or other charges payable to lenders of funds borrowed in order to maintain such Libor Loan together with any other reasonable out-of-pocket charges, costs or expenses incurred by the Lender relative thereto, excluding any such costs, losses, liabilities, damages or expenses to the extent arising (a) from the bad faith, gross negligence or wilful misconduct of the Lender or other indemnified party (as determined by a final and non-appealable judgment of a court of competent jurisdiction) or (b) from the breach by the Lender of any provision of this Agreement or any other Loan Document (as determined by a final and non-appealable judgment of a court of competent jurisdiction). A certificate of the Lender (acting reasonably and prepared in good faith) setting out the basis for the determination of the amount necessary to indemnify the Lender shall be, in the absence of manifest error, prima facie evidence thereof.

 - 84 -

11.6 No Set-Off or Counterclaim

The obligations of the Borrower to make payments hereunder shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, any set-off, compensation, counterclaim, recoupment, defence or other right which the Borrower may have against the Lender.

11.7 Severability

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

11.8 Time of Essence

Time shall, in all respects, be of the essence of this Agreement.

11.9 Assignment by Borrower

The Borrower may not assign this Agreement or any part hereof without the prior written consent of the Lender.

11.10 Lender Assignments

(a) A Lender may assign all or part of its interest in the Operating Facility, to one or more financial institutions, without the prior written consent of the Borrower (each an "Assignee"), provided, in each case, that (x) such interest or part of its interest, as the case may be, is, if less than all of its remaining interest in the Operating Facility, not less than Cdn. $1,000,000 and integral multiples of Cdn.$100,000 over and above such amount, (y) such Assignee becomes a party to this Agreement pursuant to an assignment and assumption agreement substantially in the form of Schedule H, and (z) if such Assignee is not a resident of Canada for purposes of the Income Tax Act (Canada), such Assignee acknowledges to the Borrower in writing that payments made to such Assignee pursuant to this Agreement may be subject to withholding tax under such Act and that the Borrower has no obligation to indemnify or hold harmless such Assignee in respect of such withholding tax. In the case of an assignment, the Assignee shall have the same rights and benefits and be subject to the same limitations under the Loan Documents as it would have if it was a Lender, and shall be shall be entitled to the benefits of Section 5.7 with respect to its participation hereunder; provided, in the absence of a Default of Event of Default, that no Assignee shall be entitled to receive any greater amount pursuant to such Section than the Lender would have been entitled to receive in respect of the amount of the participation transferred by the Lender to such Assignee had no such transfer occurred. The foregoing requirements shall not apply upon the existence of a Default of Event of Default, in which instance the Lender may assign all or part of its interest in the Operating Facility, to an Assignee, without the prior written consent of the Borrower and without application of the foregoing requirements.

 - 85 -

(b) The Borrower shall provide such certificates, acknowledgments and further assurances in respect of this Agreement and the Operating Facility as such Lender may reasonably require in connection with any assignment pursuant to this Section.

(c) Each Lender shall deliver to the Borrower an assignment and assumption agreement substantially in the form of Schedule G, by which an Assignee assumes the obligations and agrees to be bound by all the terms and conditions of this Agreement, all as if the Assignee had been an original party. Upon receipt by the Lender of a processing fee of $3,500 payable by the assigning Lender in the case of any assignment by such assigning Lender to a Person who is not an Affiliate of such assigning Lender and, in each case, the assignment and assumption agreement, the assigning Lender and the Borrower shall be released from their respective obligations under this Agreement (to the extent of such assignment and assumption) and shall have no liability or obligations to each other to such extent, except in respect of matters arising prior to the assignment.

(d) The Borrower authorizes the Lender to disclose to any Assignee (each, a "Transferee") and any prospective Transferee and authorizes each of the Lenders to disclose to any other Lender any and all financial information in their possession concerning each Loan Party which has been delivered to them by or on behalf of the Borrower pursuant to this Agreement or which has been delivered to them by or on behalf of a Loan Party in connection with their credit evaluation of the Loan Parties prior to becoming a party to this Agreement, provided that any such Transferee agrees not to disclose any confidential, non-public information to any person other than its affiliates, employees, accountants or legal counsel, unless required by law.

11.11 Entire Agreement

This Agreement, together with any Security or other instrument contemplated hereby, constitutes the entire agreement between the parties with respect to the matters covered hereby and supersedes any other prior agreements or representations.

11.12 Amendments

No amendment, modification or waiver of any provision of this Agreement, or consent by the Lender to any departure from any provision of this Agreement, is in any way effective unless it is in writing and signed by the Borrower and by the Lender, in which event the amendment, modification, waiver or consent is effective only in the specific instance and for the specific purpose for which it is given.

11.13 Law Governing

This Agreement shall be governed by and construed in accordance with the laws of the Province of Alberta and the laws of Canada applicable therein and shall be treated in all respects as an Alberta contract, and the parties hereby submit and attorn to the non-exclusive jurisdiction of the courts of the Province of Alberta.

 - 86 -

11.14 Paramountcy/Conflict

In the event that there is any inconsistency or conflict between the provisions contained in this Agreement and the provisions contained in any Loan Document (other than this Agreement), the provisions of this Agreement shall have priority over and shall override the provisions contained in the other document to the extent of the inconsistency or conflict. Without limiting the generality of the foregoing, the Events of Default contained in this Agreement shall override any statement of Events of Default in any other Loan Document; provided, however, that (except as provided in the following sentence) the existence of a particular representation, warranty, covenant or other provision in a Loan Document which is not contained in this Agreement shall not be deemed to be an inconsistency or conflict.

11.15 Successors and Assigns

This Agreement shall be binding upon and enure to the benefit of the parties and their respective successors and permitted assigns.

11.16 Counterparts and Electronic Signature

This Agreement may be executed by PDF and facsimile and in any number of counterparts, each of which shall be deemed to be an original and all of which taken together shall be deemed to constitute one and the same instrument, and it shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart. Each of the parties to this Agreement agrees that the electronic signatures, whether digital or encrypted, of any party included in this Agreement shall be as effective as delivery by the parties of a manually executed copy of this Agreement and is intended to authenticate this writing and to have the same force and effect as manual signatures.

11.17 USA PATRIOT Act

The Lender hereby notifies the Loan Parties that pursuant to the requirements of the PATRIOT Act, it is required to obtain, verify and record information that identifies the Loan Parties, which information includes the name and address of the Loan Parties and other information that will allow the Lender to identify the Loan Parties in accordance with the PATRIOT Act.

-signature pages follow-

IN WITNESS WHEREOF the parties have executed this Agreement as of the day and year first above written.

ATB FINANCIAL, as lender
Per:	Redacted
Name:	Redacted
Title:	Redacted
Per:	Redacted
Name:	Redacted
Title:	Redacted
We have authority to bind the Bank.

HIGH TIDE INC., as borrower
Per:	Redacted
Name:	Redacted
Title:	Redacted
Per:
Name:
Title:
We have authority to bind the Corporation

Schedule A

ATB Financial

600, 585 - 8 Avenue SW

Calgary AB T2P 1G1

Dear Sir/Madam: NOTICE OF BORROWING/CONVERSION NOTICE/ ROLLOVER NOTICE / BA NOTICE
Re: High Tide Inc.

We request that the undernoted transactions be initiated on our behalf in accordance with the terms and conditions of the Credit Agreement dated October 15, 2021 and amendments thereto (the "Credit Agreement"). Capitalized terms used but not defined herein have the meanings provided thereto in the Credit Agreement;

Applicable Facility:

Book New Prime Rate Loan	Can$	Effective Date:
Book New U.S. Base Rate Loan	U.S$	Effective Date:
Book New Bankers' Acceptance	Can$	Effective Date: Contract Period:
Book New Libor Loan	U.S.$	Effective Date: Libor Interest Period:
Convert existing: (insert details) [type of Borrowing] To [type of Borrowing]	[Can$]/           [US$]	Effective Date: Contract Period(if applicable):
Rollover Bankers' Acceptance Maturing: [Insert Date]	Can$	Effective date: Contract Period:
Rollover Libor Loan Maturing: [insert Date]	US$	Effective date: Libor Interest Period:
Letter of Credit [Financial LC] / [Non-Financial LC]	[Can$] /[US$]	Term: Beneficiary:

 - A2 -

CONFIRMATIONS:

The undersigned confirms that as of the date of this notice:

(A) the representations and warranties contained in the Credit Agreement are true and will be true and correct in all material respects on and as of the applicable Borrowing Date with the same effect as if such representations and warranties had been made on and as of the date of this Notice of Borrowing or on and as the applicable Borrowing Date, as the case may be (except where expressed to be given only as of a specified date, and except for such qualifications to such representations and warranties which have been both disclosed to the Lender in writing after the Closing Date and accepted by the Lender);

(B) no Default or Event of Default has occurred and is continuing or will result from the Borrowing requested in this Notice of Borrowing; and

(C) all of the other conditions precedent to the Borrowing requested in this Notice of Borrowing, as specified in the Credit Agreement, have been satisfied.

Yours truly,

HIGH TIDE INC.

Per:		Date:
	Name:
	Title:

Schedule B

COMPLIANCE CERTIFICATE

TO: ATB FINANCIAL, as lender (the "Lender")

RE: Credit Agreement dated as of October 15, 2021 (the "Credit Agreement") among High Tide Inc., as borrower and ATB Financial as lender, as amended, supplemented, restated or replaced from time to time.

I, _________________________ [the n] of n hereby certify, without personal liability, on behalf of the Borrower as follows:

1 This Certificate is furnished pursuant to paragraph 8.3([a]/[b]/[c]) of the Credit Agreement and each capitalized term used in this Certificate and not otherwise defined herein shall have the meaning ascribed to such term in the Credit Agreement.

2 This Certificate applies to the [calendar month/fiscal quarter/Financial Year] ending ________________.

3 I have read and am familiar with the Credit Agreement including, in particular, the definitions of the various financial terms used in the Credit Agreement, the representations and warranties, the covenants and the Events of Default described in the Credit Agreement.

4 I have made or caused to be made such examinations or investigations as are, in my opinion, necessary to furnish this Certificate, and I have furnished this Certificate with the intent that it may be relied upon by the Lender as a basis for determining compliance by the Borrower with its covenants and obligations under the Credit Agreement and the other Loan Documents as of the date of this Certificate.

5 The representations and warranties contained in Section 7.1 of the Credit Agreement are true and correct in all material respects on the date of this Certificate as if made on and as of the date of this Certificate except (other than those expressly made as of an earlier date) ____________________________________________.

6 The Borrower, since [insert date of last Compliance Certificate], has duly observed and performed all of its covenants and other agreements, and has satisfied every condition, contained in the Credit Agreement and each of the other Loan Documents to be observed, performed or satisfied by it and no Default or Event of Default has occurred and is continuing on the date of this Certificate.

7 The Borrower's financial ratios are as follows:

(a) Redacted

(b) [the Interest Coverage Ratio is ______:1.00, Redacted [NTD: to be included in quarterly and annual Compliance Certificates]; and

 - B2 -

(c) [the Liquidity is $___________________, Redacted [NTD: to be included in Compliance Certificates (including monthly)],

the detailed calculations of the foregoing ratios and covenants are set forth in Exhibit 1 annexed hereto and are true and correct in all respects.

8 There have been no changes to the information set out in Schedule E to the Credit Agreement. [Or if new "chief executive office", jurisdictions, leased locations, real property, or changes to ownership structure, provide replacement Schedule E]

9 [The attached financial statements for the Financial Year ending [insert date] (the "Reference Date") present fairly the information contained in such financial statements, and such financial statements, and all calculations of financial covenants and presentation of financial information in this Certificate and the Appendices to this Certificate, have been prepared in accordance with the Credit Agreement.] [NTD: Statement is only required to be included in the Compliance Certificate delivered with the annual financial statements.]

Dated this n day of n, n.

HIGH TIDE INC.

Name:

Title:

Exhibit 1
to Compliance Certificate

Financial Calculations

Schedule C 

SECURITY INTERESTS COMPRISING SPECIFIC PERMITTED ENCUMBRANCES

PERMITTED ENCUMBRANCE LIST

1. Security Interests in respect of the Aurora Debenture, provided that such Security Interests are postponed to the Security on terms acceptable to the Lender.

2. Security Interests in respect of the BMO Cash Collateral.

3. Security Interest in respect the US Credit Card Cash Collateral.

4. Security Interests in respect of the Windsor Mortgage.

Schedule D

ORGANIZATIONAL STRUCTURE AND JURISDICTIONS

Redacted	Redacted Redacted Redacted	Redacted Redacted Redacted	Redacted Redacted	Redacted	Redacted Redacted Redacted
Redacted	Redacted Redacted Redacted, Redacted, Redacted. Redacted	Redacted.	Redacted, Redacted Redacted Redacted, Redacted, Redacted.	Redacted	Redacted.
			Redacted
Redacted	Redacted, Redacted.	Redacted	Redacted	Redacted	Redacted.
Redacted	Redacted, Redacted	Redacted	Redacted, Redacted	Redacted	Redacted

 - E2 -

Redacted.	Redacted, Redacted	Redacted.	Redacted, Redacted	Redacted.	Redacted.
			Redacted, Redacted.
			Redacted, Redacted.
			Redacted, Redacted.
			Redacted, Redacted.
			Redacted.
			Redacted, Redacted, Redacted.
			Redacted, Redacted.
			Redacted, Redacted, Redacted.
			Redacted, Redacted
			Redacted, Redacted, Redacted.
			Redacted, Redacted.
			Redacted, Redacted
			Redacted Redacted
			Redacted, Redacted.
			Redacted, Redacted. Redacted
			Redacted.
			Redacted.
			Redacted, Redacted Redacted.
			Redacted, Redacted.
			Redacted, Redacted.
			Redacted, Redacted
			Redacted, Redacted, Redacted.

 - E3 -

Redacted.	Redacted, Redacted, Redacted	Redacted, Redacted, Redacted. Redacted	Redacted, Redacted, Redacted	Redacted.	Redacted.
			Redacted, Redacted
			Redacted, Redacted.
			Redacted, Redacted.
			Redacted, Redacted
			Redacted, Redacted
			Redacted, Redacted Redacted.
			Redacted, Redacted
			Redacted Redacted, Redacted
			Redacted Redacted Redacted
			Redacted Redacted, Redacted, Redacted.
			Redacted, Redacted.
			Redacted, Redacted.
			Redacted Redacted, Redacted Redacted
			Redacted, Redacted
			Redacted.
			Redacted
			Redacted, Redacted.
			Redacted Redacted, Redacted
			Redacted, Redacted, Redacted Redacted
			Redacted, Redacted Redacted
			Redacted, Redacted, Redacted
			Redacted, Redacted Redacted, Redacted, Redacted Redacted
			Redacted. Redacted Redacted. Redacted
			Redacted.
			Redacted, Redacted
			Redacted
			Redacted Redacted
			Redacted, Redacted, Redacted
			Redacted, Redacted, Redacted.
			Redacted, Redacted
			Redacted Redacted, Redacted
			Redacted Redacted.
			Redacted Redacted
			Redacted Redacted Redacted
			Redacted Redacted
			Redacted Redacted
			Redacted
			Redacted.
			Redacted
			Redacted

 - E4 -

Redacted	Redacted Redacted, Redacted	Redacted	Redacted.	Redacted	Redacted
			Redacted
Redacted.	Redacted Redacted, Redacted	Redacted Redacted, Redacted	Redacted Redacted Redacted	Redacted	Redacted
			Redacted.
			Redacted, Redacted
			Redacted Redacted.
			Redacted Redacted Redacted.
			Redacted.
			Redacted Redacted, Redacted “Redacted
			Redacted Redacted
			Redacted, Redacted
			Redacted, Redacted
			Redacted, Redacted
			Redacted Redacted
			Redacted.
			Redacted, Redacted, Redacted.
			Redacted.
			Redacted, Redacted
			Redacted Redacted
			Redacted, Redacted
			Redacted
			Redacted.
			Redacted.
			Redacted Redacted Redacted

 - E5 -

Redacted	Redacted Redacted Redacted	Redacted.	Redacted Redacted	Redacted	Redacted.
Redacted.	Redacted, Redacted, Redacted.	Redacted	Redacted	Redacted.	Redacted
Redacted.	Redacted, Redacted, Redacted	Redacted.	Redacted	Redacted	Redacted
Redacted.	Redacted, Redacted, Redacted.	Redacted	Redacted, Redacted Redacted	Redacted	Redacted.
Redacted	Redacted, Redacted, Redacted	Redacted	Redacted, Redacted, Redacted	Redacted	Redacted.
Redacted	Redacted, Redacted, Redacted	Redacted	Redacted Redacted Redacted	Redacted	Redacted
Redacted.	Redacted, Redacted Redacted	Redacted.	Redacted, Redacted Redacted	Redacted	Redacted

Schedule E

LITIGATION

CORPORATE BODY	DESCRIPTION OF LEGAL ACTION
Redacted.	Redacted. Redacted.
Redacted.	Redacted Redacted Redacted
Redacted.	Redacted
	Redacted Redacted
	Redacted. Redacted Redacted

Schedule F

DEBT

None.

Schedule G

Form of Assignment AND ASSUMPTION AGREEMENT

Dated _____, 20__

Assignment and Assumption Agreement dated as of n among n (the "Assignor") and the Lenders under the Credit Agreement (each as hereinafter defined) and n (the "Assignee")

WHEREAS pursuant to the Credit Agreement dated as of October 15, 2021 (as amended, supplemented, restated or replaced from time to time, the "Credit Agreement") among High Tide Inc. (the "Borrower"), and ATB Financial (the "Lender") the Lender has agreed to make certain credit facilities available to the Borrower upon the terms and conditions contained in the Credit Agreement.

AND WHEREAS the Assignor has agreed to assign and sell to the Assignee all of its right, title and interest in and to the [describe the portion of the commitments and accommodations outstanding being assigned] and all right, title and interest of the Assignor in and to the Loan Documents, to the extent relating thereto (collectively, the "Assigned Credit Facility"), and the Assignee has agreed to accept and purchase the Assigned Credit Facility and assume all liabilities and obligations of the Assignor in respect of the Assigned Credit Facility (collectively, such assignment, sale, purchase and assumption is hereinafter referred to as the "Assignment");

AND WHEREAS all necessary consents, if any to the Assignment have been obtained [Note: if no Default or Event of Default, prior written consent of Borrower is required] and the Assignor and the Assignee are required to enter into this Agreement pursuant to the Credit Agreement;

NOW THEREFORE, in consideration of the foregoing, the sum of $10.00 in lawful money of Canada now paid by the Borrower, the Assignor and the Assignee to each other party and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged by each such party, the parties agree as follows:

1. Definitions. Terms defined in the Credit Agreement which appear in this Agreement without definition shall have the meanings ascribed to them in the Credit Agreement.

2. Conveyance of Interest in Credit Facility. The Assignor assigns, sells, conveys and transfers to the Assignee all of its undivided interest in and to the Assigned Credit Facility as and from the date hereof (the "Effective Date").

3. Assumption. The Assignee accepts and assumes the Assigned Credit Facility and assumes and agrees to be bound by all of the terms and conditions of the Credit Agreement and the other Loan Documents as if it were the original Lender and party to them with a commitment equal to the commitment included in the Assigned Credit Facility (plus, if the Assignee is already a Lender, its commitment on the date hereof) and acknowledges and expressly assumes in its name, place and stead of the Assignor, all obligations and liabilities attaching to the Assigned Credit Facility and agrees to perform all of the terms, conditions and agreements on its part to be performed as a Lender in respect thereof under the Credit Agreement and the other Loan Documents.

 - G2 -

4. Assignment Fee. The Assignor shall pay to the Lender, for value no later than 12:00 noon (Calgary, Alberta time) on the Effective Date, the assignment fee in the amount of $3,500 as required by the Credit Agreement.

5.Representations, Warranties and Covenants.

(a) The Assignor represents and warrants to the Assignee that the outstanding principal amount of the Assigned Credit Facility as set forth in Schedule A remains outstanding as Outstanding Borrowings under the Operating Facility.

(b) The Assignee represents and warrants to each other party to this Agreement that it has the capacity and power to enter into this Agreement in accordance with its terms and to perform its obligations, and all action required to authorize the execution and delivery of this Agreement, and the performance of such obligations has been duly taken.

6. Assignee's Acknowledgments. The Assignee acknowledges and agrees that (i) it has received a copy of the Credit Agreement and the other Loan Documents, (ii) it is not entitled to receive any greater payment, on a cumulative basis, pursuant to Section [5.9] of the Credit Agreement than the Assignor would be entitled to receive before the assignment of the Assigned Credit Facility, (iii) if it is not a resident of Canada for purposes of the Income Tax Act (Canada), it acknowledges that payments made to it pursuant to the Loan Documents may be subject to withholding tax under such Act and that the Borrower is under no obligation to indemnify or hold harmless such Assignee in respect of such withholding tax; (iv) it is bound by all of the terms, conditions and covenants of the Credit Agreement and the other Loan Documents and, subject to clause (ii) above, entitled to the same rights and benefits thereof an is subject to the same limitations hereunder and the other Loan Documents as it would have if it were an original Lender and signatory to the Credit Agreement with a Lender's commitment equal to the Lender's commitment included in the Assigned Credit Facility (plus, if the Assignee is already a Lender, its Lender's commitment on the date hereof); and (v) it has independently and without reliance on the Assignor (other than those representations and warranties contained herein) and on the basis of such documents and information as it deems appropriate, made its own credit decision regarding this Assignment. Except for documents referred to in clause (i) above which the Assignor has already received, the Assignor shall not have any duty to provide the Assignee with any credit or other information concerning the affairs, financial condition or business of the Borrower or other third party.

7. Limitations of Liability. Neither Assignor (except as provided herein) nor the Lender makes any representations or warranties of any kind, nor assumes any responsibility or liability whatsoever, with regard to (a) the Loan Documents or any other document or instrument furnished pursuant thereto or the Operating Facility or the commitments, (b) the creation, validity, genuineness, enforceability, sufficiency, value or collectability of any of them, (c) the amount, value or existence of any collateral charged by any security interests to secure the Outstanding Obligations or the perfection or priority thereof, or (d) the financial condition of any Loan Party or of its obligations under the Loan Documents. The Assignor neither has nor will have any duty, either initially or on a continuing basis, to make any investigation, evaluation, appraisal of, or any responsibility or liability with respect to the accuracy or completeness of, any information provided to Assignee which has been provided to Assignor. Nothing in this Agreement or the Loan Documents shall impose upon the Assignor any fiduciary relationship in respect of the Assignee.

 - G3 -

8. Recognition as Lender. The parties acknowledge and agree that the Assignee is by virtue of compliance with the Credit Agreement effective on the Effective Date a Lender under and as defined in the Credit Agreement and for all of the Loan Documents and bound by the terms, conditions and covenants, entitled to the benefits thereof as if it were an original Lender and signatory with a commitment equal to the commitment included in the Assigned Credit Facility (plus, where the Assignee is already a Lender, its commitment on the date hereof) and the Borrower shall be entitled, as and from this date, to deal exclusively and directly with the Assignee in respect of all matters relating to the Assigned Credit Facilities and the Loan Documents as they relate thereto.

9. Governing Law. This Agreement shall be governed by an interpreted and enforced in accordance with the laws of the Province of Alberta and the laws of Canada applicable therein.

10. Enurement. This Agreement shall enure to the benefit of and be binding upon the parties and their respective successors and permitted assigns.

11. Counterparts. This Agreement may be executed in counterparts and delivered electronically (including by way of facsimile) and all of such counterparts, when so delivered and taken together, shall be deemed to constitute one and the same original instrument.

IN WITNESS WHEREOF the parties have executed this Agreement under the hands of their proper officers duly authorized in that behalf as of the date first above written.

[ASSIGNOR]

By:

Title:

[ASSIGNEE]

By:

Title:

 - G4 -

Schedule "A"

Assigned Credit Facilities

Lender	Assigned Lender's Credit Facility commitment
n	$n

Schedule H

Redacted

1. Redacted

2. Redacted.

3. Redacted.

4. Redacted

5. Redacted

6. Redacted

7. Redacted

8. Redacted

9. Redacted

10. Redacted

11. Redacted

12. Redacted

13. Redacted

14. Redacted

15. Redacted

16. Redacted

17. Redacted

18. Redacted

19. Redacted

20. Redacted

21. Redacted

22. Redacted

23.Redacted

24. Redacted

25. Redacted

26. Redacted

27. Redacted

28. Redacted

29. Redacted

Redacted

1. Redacted

2. Redacted

3. Redacted

4. Redacted

5. Redacted

6. Redacted

7. Redacted

8. Redacted

9. Redacted

10. Redacted

11. Redacted

12. Redacted

13. Redacted

Schedule I

ERISA

Details of all Title IV ERISA Plans:

None

Details of all Multiemployer Plans:

None

Details of all material Benefit Plans:

None

Schedule J

CBD Supplier Attestation

See attached.

EX-99.3

Exhibit 99.3

FORM 51-102F3 MATERIAL CHANGE REPORT

Item 1: Name and Address of Company

High Tide Inc. (the “Company”) Unit 112, 11127 - 15 Street N.E. Calgary, Alberta T3K 2M4

Item 2: Date of Material Change

October 19, 2021.

Item 3: News Release

The news release was disseminated via Newswire on October 19, 2021 and was filed on SEDAR at www.sedar.com.

Item 4: Summary of Material Change

On October 19, 2021, the Company completed its acquisition (the “Acquisition”) of an 80% interest in Enigma Ltd., operating as Blessed CBD (“Blessed”) for £9,064,000, and will have a three-year option to acquire the remaining 20% of Blessed at any time.

The Acquisition was completed pursuant to the terms of a share purchase agreement (the “Acquisition Agreement”) for aggregate consideration comprised of: (i) 1,136,551 common shares in the capital of the Company (“Common Shares”) valued at £4,864,000 (the “Share Consideration”) on the basis of a deemed price of $7.2856 per Common Share equal to the volume weighted average price per Common Share on the TSX Venture Exchange (the “TSXV”) for the ten consecutive trading days preceding the closing of the Acquisition and £4,200,000 in cash.

The purchase price is subject to a post-closing working capital adjustment provision which enables the parties to adjust the purchase price to offset any increase or decrease of the net working capital as of the closing date. The Common Shares issued pursuant to the Share Consideration are subject to a statutory hold period of four months and one day.

In addition to the foregoing, Blessed’s founder has agreed to grant the Company an option to acquire all the remaining shares in Blessed not held by the Company and become the sole shareholder of Blessed (the “Call Option”), at an enterprise value equal to the trailing twelve months of revenue at that time multiplied by 2.2. The Call Option will be exercisable at any time for a period of three years following the Acquisition. In addition, the Company has agreed to grant Blessed’s founder an option to put to the Company the remaining shares in Blessed not held by the Company (the “Put Option”), at the same enterprise value of the Call Option. The Put Option will be exercisable by Blessed’s founder for a period of two years following the first anniversary of the Acquisition. The consideration under the Call Option or Put Option, if exercised, will be satisfied in Common Shares, on the basis of a deemed price per Common Share equal to the volume weighted average price per Common Share on the TSXV for the ten consecutive trading days preceding closing of the Call Option or Put Option, as the case may be.

In connection with the closing of the Acquisition, Blessed’s founder and Chief Executive Officer, Vithurs Thiru (known more commonly as “V”) has joined the Company as Senior Manager of Search (SEO) to help grow the Company’s CBD business globally. In connection with his appointment, the Company has granted him 25,000 stock options exercisable at $7.17 per Common Share for a period of three years.

Item 5.1: Full Description of Material Change

Please see news release attached as Schedule “A”.

Item 5.2 Disclosure for Restructuring Transactions

Not applicable.

Item 6: Reliance on subsection 7.1(2) of National Instrument 51-102 (Confidentiality)

Not applicable.

Item 7: Omitted Information

No information has been omitted on the basis that it is confidential information.

Item 8: Executive Officer

For additional information with respect to this material change, the following person may be contacted: Raj Grover

President, Chief Executive Officer & Director Tel: (403) 770-9435 Email: raj@hightideinc.com

Item 9: Date of Report

October 27, 2021.

SCHEDULE “A”

(See attached)

High Tide Closes Acquisition of Blessed CBD and Enters U.K. Market

• This closing represents High Tide's 5th global e-commerce related acquisition in 2021, taking e-commerce revenue run-rate from approximately $10.6 million on October 31, 2020 to just under $60 million today.
• With almost 5 million site visits in 2020, Blessed CBD is one of the most popular direct-to-consumer CBD brands in the U.K.¹
• Blessed has a strong financial profile which generated 81% gross margins and 54% EBITDA margins for the 12 months ended August 2021.²
• Highly accretive transaction for shareholders, as Blessed generated revenue of £5.1 Million and £2.8 Million in EBITDA for the 12 months ended August 2021.³

CALGARY, AB, Oct. 19, 2021 /CNW/ - High Tide Inc. ("High Tide" or the "Company") (TSXV: HITI) (NASDAQ: HITI) (FSE: 2LYA), a leading retail-focused cannabis company with bricks and mortar as well as global e-commerce assets, is pleased to announce, that further to its press release dated October 7, 2021, the Company has completed its acquisition (the "Acquisition") of an 80% interest in Enigmaa Ltd., operating as Blessed CBD, ("Blessed") for £9,064,000 (the "Transaction"), and will have a three-year option to acquire the remaining 20% of Blessed at any time.

High Tide Inc. October 18, 2021 (CNW Group/High Tide Inc.)

Founded in 2019 with its headquarters in Scotland, Blessed has quickly grown to become one of the most popular brands for hemp-derived CBD products across the U.K., including CBD oils, creams, gummies, and capsules. In 2020 Blessed had almost 5 million site visits and an average order value of approximately £75.

This is High Tide's fifth acquisition in the global e-commerce space in 2021, which brings High Tide's online portfolio to a total of eight e-commerce platforms across cannabis, hemp-derived CBD, and consumption accessories, servicing customers across the U.K., E.U., and North America. These transactions have collectively contributed to increasing the Company's annual run-rate e-commerce revenue from approximately $10.6 million at the end of October 31, 2020, to just under $60 million today.       

The Acquisition was completed pursuant to the terms of a share purchase agreement (the "Acquisition Agreement"), a copy of which is available on the Company's SEDAR profile. High Tide acquired 80% of Blessed for consideration comprised of: (i) 1,136,551 common shares of High Tide (each a "High Tide Share") valued at £4,864,000 (the "Share Consideration"), on the basis of a deemed price of $7.2856 per High Tide Share, being equal to the volume weighted average price per High Tide Share on the TSX Venture Exchange ("TSXV") for the ten consecutive trading days preceding the closing of the Acquisition; and (ii) £4,200,000 in cash. In addition, pursuant to the Acquisition Agreement, the purchase price is subject to a post-closing working capital adjustment provision. Under this provision, the parties will adjust the purchase price to offset any increase or decrease of the net working capital as of the closing date.

The High Tide Shares issued pursuant to the Share Consideration are subject to a statutory hold period of four months and one day.

In addition to the foregoing, Blessed's founder has agreed to grant High Tide an option to acquire all the remaining shares in Blessed not held by High Tide, and become the sole shareholder of Blessed (the "Call Option"), at an enterprise value equal to the trailing twelve (12) months of revenue at that time multiplied by 2.2. The Call Option will be exercisable at any time for a period of three (3) years following the Acquisition. In addition, High Tide has agreed to grant Blessed's founder an option to put to High Tide the remaining shares in Blessed not held by High Tide (the "Put Option"), at the same enterprise value of the Call Option. The Put Option will be exercisable by Blessed's founder for a period of two (2) years following the first anniversary of the Acquisition. The consideration under the Call Option or Put Option, if exercised, will be satisfied in High Tide Shares, on the basis of a deemed price per High Tide Share equal to the volume weighted average price per High Tide Share on the TSXV for the ten (10) consecutive trading days preceding closing of the Call Option or Put Option, as the case may be.

KPMG LLP conducted financial due diligence on behalf of High Tide for the Transaction. Garfinkle Biderman LLP and Ince Gordon Dadds LLP are acting as legal advisors for High Tide in connection with the Transaction and Carlsquare and Addleshaw Goddard LLP acted for Blessed in connection with the Transaction.

In connection with the closing of the Transaction, Blessed's founder and Chief Executive Officer, Vithurs Thiru (known more commonly as "V"), will join the High Tide team as Senior Manager of Search (SEO) of the Company, and will help grow High Tide's CBD business globally. In connection with V's appointment, High Tide granted 25,000 stock options (the "Options") to V, exercisable at CAD$7.17 per High Tide Share for a period of 3 years.

ABOUT BLESSED CBD

Enigmaa Ltd., operating as Blessed CBD is one of the leading online retailers of hemp-derived CBD products in the U.K. The company provides a marketplace with a wide variety of high-quality products and formulas, affordable pricing, rapid dependable shipping, and surprisingly personable customer service. Blessed CBD has been featured as the best UK CBD Oil in several publications including The Mirror, Reader's Digest, and Maxim Magazine.

ABOUT HIGH TIDE

High Tide is a leading retail-focused cannabis company with bricks and mortar as well as global e-commerce assets. The Company is the largest Canadian retailer of recreational cannabis as measured by revenue, with 101 current locations spanning Ontario, Alberta, Manitoba and Saskatchewan, and was featured in the third annual Report on Business Magazine's ranking of Canada's Top Growing Companies in 2021.  High Tide's retail segment features the Canna Cabana, Meta Cannabis Co., Meta Cannabis Supply Co. and NewLeaf Cannabis banners, with additional locations under development across the country. High Tide has been serving consumers for over a decade through its established ecommerce platforms including Grasscity.com, Smokecartel.com, Dailyhighclub.com, and Dankstop.com and more recently in the hemp-derived CBD space through CBDcity.com, FABCBD.com, and BlessedCBD.co.uk, as well as its wholesale distribution division under Valiant Distribution, including the licensed entertainment product manufacturer Famous Brandz. High Tide's strategy as a parent company is to extend and strengthen its integrated value chain, while providing a complete customer experience and maximizing shareholder value. Key industry investors in High Tide include Tilray Inc. (TSX: TLRY) (Nasdaq: TLRY) and Aurora Cannabis Inc. (TSX: ACB) (Nasdaq: ACB).

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

For more information about High Tide Inc., please visit www.hightideinc.com, its profile page on SEDAR at www.sedar.com, and its profile page on EDGAR at www.sec.gov.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This news release contains "forward-looking statements" within the meaning of applicable securities laws. All statements contained herein that are not clearly historical in nature may constitute forward-looking statements.

Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or may contain statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "will continue", "will occur" or "will be achieved". The forward-looking information and forward- looking statements contained herein include, but are not limited to, statements regarding: the creation of synergies and cross-selling across High-Tide's e-commerce platforms; High Tide's ability to become a global leader in the e-commerce marketplace for hemp-derived CBD products; the ability of V to grow High Tide's CBD business globally; the ability of the Acquisition to serve as an entry point into the EU marketplace for the Company; V joining the Company as General Manager of Digital Marketing and SEO; the growth-rate of the global CBD market; High Tide's e-commerce revenue increasing to an annual run-rate of just under $60,000,000; and the expected working capital of Blessed on Closing.

Forward-looking information in this news release are based on certain assumptions and expected future events, namely: that upon completion of the Transaction, High Tide will be able to increase its annual run-rate; the Transaction will serve as an entry point into the EU marketplace; High Tide's financial condition and development plans do not change as a result of unforeseen events; there will continue to be a demand, and market opportunity, for High Tide's product offerings; the Transaction will create synergies across its e-commerce platforms; V will join the Company as General Manager of Digital Marketing and SEO; Blessed will have the stated working capital upon closing of the Transaction; either the Call or Put Option will be exercise; High Tide's annual run-rate will increase to $60,000,000 and current and future economic conditions will neither affect the business and operations of High Tide nor High Tide's ability to capitalize on anticipated business opportunities). Although considered reasonable by management of High Tide at the time of preparation, these assumptions may prove to be imprecise and result in actual results differing materially from those anticipated, and as such, undue reliance should not be placed on forward-looking statements.

These statements involve known and unknown risks, uncertainties and other factors, which may cause actual results, performance or achievements to differ materially from those expressed or implied by such statements, including but not limited to: the potential inability of the Company to continue as a going concern; the risks associated with the cannabis and CBD industries in general; the inability of High Tide to create synergies across it's e-commerce platforms; High Tide's inability to become a global leader in the e-commerce marketplace for hemp-derived CBD products; the inability of V to grow High Tide's CBD business globally; the inability of the Transaction to serve as an entry point into the EU marketplace; risks that the global CBD market will not grow at the anticipated growth-rate; risks associated with potential legislative and/or regulatory changes by the relevant governmental and/or regulatory bodies; risk that V will not join the Company; risk that Blessed will not have the requisite working capital upon closing of the Transaction; risk that the Company's annual run-rate will not increase to $60,000,000; and risk that neither the Company nor V will exercise the Call or Put Option.

Readers are cautioned that the foregoing list is not exhaustive. Readers are further cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States of America. The securities have not been and will not be registered under the United States Securities Act of 1933 (the "1933 Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons (as defined in the 1933 Act) unless registered under the 1933 Act and   applicable state securities laws, or an exemption from such registration is available.

_________________________

¹ Data according to Google Analytics.

² Unaudited.

³ Unaudited.

View original content to download multimedia:https://www.prnewswire.com/news-releases/high-tide-closes-acquisition-of-blessed-cbd-and-enters-uk-market-301402865.html

SOURCE High Tide Inc.

View original content to download multimedia: http://www.newswire.ca/en/releases/archive/October2021/19/c0421.html

%CIK: 0001847409

For further information: Media Inquiries, Omar Khan, Senior Vice President - Corporate and Public Affairs, High Tide Inc., omar@hightideinc.com; Investor Inquiries, Vahan Ajamian, Capital Markets Advisor, High Tide Inc., vahan@hightideinc.com

CO: High Tide Inc.

CNW 06:00e 19-OCT-21

EX-99.4

Exhibit 99.4

 

Dated                                        2021

VITHURSXXXXXXXXXXXXXXX

HIGH TIDE INC.

AGREEMENT

for the sale and purchase of
80% of the entire issued
share capital of Enigmaa Ltd. 

Contents

Clause Page

1	Interpretation and definitions	1
2	Conditions to Completion and termination	1
3	Sale and purchase of the Shares	3
4	Purchase Price	3
5	Signing and Completion	8
6	Warranties	9
7	Limitations on Seller’s liability	11
8	Indemnities	11
9	Restrictive covenants	13
10	Further assurance	15
11	Payments	15
12	Notices	16
13	Assignment	17
14	Third party rights	18
15	Announcements	18
16	Confidentiality	18
17	Entire agreement	19
18	Alterations and Waivers	20
19	Severability	20
20	Counterparts	20
21	Payment of costs	20
22	Continuing effect of this Agreement	20
23	Governing law	21
24	Submission to jurisdiction	21
25	Process Agent	21
26	Option	22

Schedule 1

The Company 23

Schedule 2

Conduct of Business 24

Schedule 3

Exchange and Completion obligations 25

Schedule 4

Warranties 29

Schedule 5

Limitations on liability 41

Schedule 6

Completion Accounts	47
Part 1 - Definitions	47
Part 2 - Purchase price adjustment	49
Part 3 - Preparation and agreement/determination of the Completion Accounts	50
Part 4 - Specific accounting policies	54
Part 5 - Format of the Completion Accounts	55

Schedule 7

Property

Schedule 8

Tax Covenant	57
Part 1 - Interpretation and Buyer Protections	57

Schedule 9

Buyer Warranties 72

Schedule 10

Interpretation and definitions 75

Schedule 11

Intellectual Property 84

Schedule 12

Agreed form spreadsheet 85

Agreed Form Documents

Shareholders' Agreement

Articles of Association

Escrow Agreement

Service Agreement

Deed of IP Assignment

Junior Employment Agreement Variations

Legal Opinion

Release of Claims

Secretary Resignation Letter

Shareholder Resolution

This Agreement is made on                                          2021

Between

(1) Vithursxxxxxxxxxxxxxxx of Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx (Seller); and

(2) High Tide Inc. (registered number: 2020973679) of 11127 15th Street, Northeast Suite, 111-113 Calgary, AB T3K 2M4 Canada (Buyer).

Background

The Seller has agreed to sell, and the Buyer has agreed to buy, 80 ordinary shares of £0.01 each in the share capital of Enigmaa Ltd. and the Seller and the Buyer have agreed to be bound by the obligations undertaken by them under this Agreement.

It is agreed as follows

1 Interpretation and definitions

1.1 Interpretation

This Agreement shall be interpreted in accordance with the provisions set out in paragraph 1 of Schedule 10 (Interpretation and definitions) unless the context otherwise requires.

1.2 Defined terms

A number of terms used in this Agreement are defined in Schedule 10 (Interpretation and definitions) at the end of this Agreement and all such defined terms shall apply throughout this Agreement. In addition to the terms defined in Schedule 10 (Interpretation and definitions), a number of other terms are defined elsewhere in this Agreement, and those defined terms shall also apply throughout this Agreement unless the context otherwise requires.

1.3 Incorporation of the schedules

The schedules form part of this Agreement and shall have the same effect as if they had been set out in full in the body of this Agreement.

2 Conditions to Completion and termination

2.1 Completion is subject to and conditional upon the Conditions being satisfied on or before 6.00pm GMT on the Longstop Date.

2.2 Subject to clause 2.4, the Seller shall comply with (and shall procure the Company’s compliance with) the conduct of business provisions in Part 1 of Schedule 2 at all times during the Interim Period.

2.3 Subject to clause 2.4, the Seller shall not carry out (and shall procure that the Company does not carry out) any of the actions set out in Part 2 of Schedule 2, without the Buyer’s prior written consent (not to be unreasonably withheld, conditioned or delayed) during the Interim Period.

2.4 Parts 1 and 2 of Schedule 2 shall not prevent (and the Seller shall subsequently not be liable under clauses 2.2 and/or 2.3 in respect of):

(a) any matter reasonably undertaken by the Seller or the Company in an emergency or disaster situation or otherwise as a matter of urgency with the intention of minimising any adverse effect thereof;

(b) the completion or performance of any obligations undertaken under any contract or arrangement entered into by the Seller (on behalf of the Company) or the Company prior to the date of this Agreement provided always that the obligation is completed or performed in the ordinary course; and/or

1 

(c) any matter undertaken at the written request of the Buyer or in accordance with the provisions of this Agreement and/or any Transaction Document.

2.5 Unless otherwise agreed between the parties, this Agreement shall automatically terminate and cease to have effect (except as provided in clause 2.6):

(a) at 6.00pm on the Longstop Date, if the Conditions are not satisfied on or before that date; and

(b) (unless waived by the Buyer in accordance with clause 2.12) immediately by written notice from the Buyer to the Seller in the event of a breach by the Seller of either of clauses 2.2 or 2.3 where the value attributable to such breach is in excess of £50,000 and either (i) such breach is incapable of remedy or (ii) if such breach is capable of remedy, it has not been remedied (at no cost to the Company) to the reasonable satisfaction of the Buyer by the date which is one Business Day prior to the Completion Date.

2.6 If this Agreement terminates in accordance with clause 2.5 or 6.2(c), it will immediately cease to have any further force and effect (and neither party will have any claim under this Agreement of any nature whatsoever against the other) except for:

(a) clause 1 and Schedule 10 (Interpretation and definitions), clause 2.5 and this clause 2.6, clause 12 (Notices), clause 14 (Third party rights), clause 15 (Announcements), clause 16 (Confidentiality) and clause 17 (Entire agreement) to clause 25 (Process agent) (inclusive)), each of which shall remain in full force and effect; and

(b) any rights, remedies, obligations or liabilities of the parties that have accrued before termination in respect of the provisions listed in clause 2.6(a) above.

2.7 The Buyer shall use best endeavours to procure (so far as it lies within its power so to do) that the TSXV Condition is satisfied as soon as possible and in any event before the Longstop Date and shall use best endeavours to obtain final TSXV approval to issue the Consideration Shares on an expedited basis and to ensure that the Consideration Shares are listed for trading on the TSXV on or promptly following issuance.

2.8 The Seller shall use best endeavours to procure (so far as it lies within its power so to do) that the EL Condition is satisfied as soon as possible and in any event before the Longstop Date.

2.9 The Buyer shall keep the Seller reasonably informed of progress throughout the Interim Period and shall submit, or procure the submission of a Form 5B Expedited Acquisition Filing Form requesting approval by the TSXV of admission of the Consideration Shares to trading at or within one Business Day following, the date of this Agreement.

2.10 The Seller shall keep the Buyer reasonably informed of progress relating to the EL Condition throughout the Interim Period.

2.11 The Buyer shall promptly notify the Seller (and the Seller shall promptly notify the Buyer) in writing if it (or he) becomes aware of any fact, event, matter or circumstance that has prevented or may reasonably be expected to prevent the TSXV Condition (or the EL Condition) from being satisfied.

2.12 The Buyer may, to the extent that it is legally entitled to do so and to such extent as it thinks fit (in its absolute discretion), waive its right to terminate under clause 2.5(b) by notice in writing to the Seller.

2.13 The Buyer shall notify the Seller in writing of the fulfilment of the TSXV Condition as soon as reasonably practicable following it becoming aware of such fulfilment and in any event within one Business Day of becoming so aware.

2 

2.14 The Seller shall notify the Buyer in writing of the fulfilment of the EL Condition as soon as reasonably practicable following it becoming aware of such fulfilment and in any event within one Business Day of becoming so aware.

3 Sale and purchase of the Shares

3.1 Agreement to sell

At Completion the Seller agrees to sell the Shares and the Buyer agrees to buy the Shares with effect from Completion.

3.2 Rights attaching to the Shares

The Seller covenants with the Buyer that the Shares will be sold:

(a) with full legal and beneficial title guarantee;

(b) free from any Security Interest; and

(c) together with all rights and benefits attaching or accruing to the Shares on or after the date of Completion including the right to receive all dividends and distributions declared, paid or made on or after the date of Completion.

3.3 Warranties relating to the Shares

The Seller warrants to the Buyer as at the date of this Agreement and at Completion that:

(a) he is the sole legal and beneficial owner of the Shares;

(b) the Shares will be sold free from any Security Interest;

(c) he has the right to transfer the full legal and beneficial title to the Shares to the Buyer without the consent of any third party;

(d) he has full legal power and authority to enter into and perform his obligations under this Agreement and each other Transaction Document to which he is to be a party; and

(e) the obligations undertaken by him under this Agreement and the other Transaction Documents to which he is to be a party are legally binding on him,

4 Purchase Price

4.1 Purchase Price amount

The consideration for the sale of the Shares (Purchase Price) is, subject to any adjustment in accordance with this Agreement (in particular clause 4.3), the aggregate sum of £9,064,000, comprised of the following:

(a) £4,200,000 payable on Completion (Initial Cash Purchase Price) in cash and in full to the Seller in accordance with clause 11.1; plus

(b) subject to clause 4.2, the allotment and issue, credited as fully paid to the Seller on Completion of such number of Consideration Shares (excluding fractions) as have an aggregate Market Value nearest to (but not less than) £4,864,000 (based on the CAD / GBP exchange rate posted by the Bank of Canada on the day prior to the Completion Date).

4.2 Escrow

3 

At Completion, such number of Consideration Shares (rounded down to the nearest whole share) with an aggregate Market Value equal to £2,266,000 (based on the CAD / GBP exchange rate posted by the Bank of Canada on the day prior to the Completion Date) will be deposited by the Buyer into the custody of the Escrow Agent (Escrow Account) and such Consideration Shares will be held subject to clause 4.5 of this Agreement and the terms of the Escrow Agreement (Escrow Shares).

4.3 Purchase Price adjustment

The Purchase Price shall be subject to adjustment as set out in Schedule 6 (Completion Accounts).

4.4 Provisions relating to the Consideration Shares

(a) In this clause 4.4:

Consideration Shares means those Buyer Shares to be issued to the Seller in accordance with clause 4.1

Lock-up Period means the period of 4 months and 1 day from the Completion Date

Market Value means the market value of a Consideration Share calculated in accordance with clause 4.4(b)(i)

TSXV means the TSX Venture Exchange (or such other recognised exchanged the Buyer Shares trade on at such time)

(b) The following provisions will apply to the Consideration Shares to be allotted under clause 4.1:

(i) The Market Value of a Consideration Share issued under clause 4.1(b) or returned to the Buyer pursuant to clause 4.5 will be a price per share equal to the volume weighted average share price of a Buyer Share on the TSXV for the 10 trading day period ending on the day prior to Completion.

The aforementioned average share price shall be calculated by aggregating the daily volume weighted average share price of a Buyer Share at the close of business of each of the days during such 10 trading day period, each day after having been adjusted based on the following calculation, and agreed in writing by the Buyer and Seller prior to Completion:

A x(B/C)

A means the daily volume weighted average share price of a Buyer Share on any specific day

B means the daily volume of Buyer Shares traded on the TSXV on any specific day

C means the total volume of Buyer Shares traded on the TSXV over the full 10 day trading period.

(ii) Consideration Shares allotted and issued to the Seller (including for the avoidance of doubt, the Escrow Shares) will carry the same rights as, and will rank equally in all respects with the Buyer Shares in issue as at the date of such allotment and issue of those Consideration Shares, including the right to receive all dividends declared, made or paid after such date, the right to vote and rights on liquidation.

(iii) The Seller shall not, during the Lock-up Period, transfer, charge or otherwise dispose of any of the Consideration Shares, except (excluding any Escrow Shares), as may be permitted under applicable securities laws in Canada.

4 

4.5 Escrow Shares - release and set-off

(a) Release of Escrow Shares

Subject always to clauses 4.5(b) to 4.5(d) and the terms of the Escrow Agreement, the Escrow Shares (or a portion thereof) shall be held in the Escrow Account for a period of up to two years from the Completion Date and released to the Seller as follows:

(i) on the First Release Date the Escrow Agent shall release the First Escrow Release to the Seller; and

(ii) on the Second Release Date the Escrow Agent shall release the Second Escrow Release to the Seller.

(b) Bad Leaver

Save as otherwise agreed between the Seller and Buyer:

(i) if the Seller becomes a Bad Leaver at any time during the period beginning on the Completion Date and up to but excluding the first anniversary of Completion (First Relevant Period), the Buyer may, within the First Leaver Notice Period, provide written notice to the Seller, notifying the Seller that the Seller has ceased to be entitled to the Escrow Shares, following which the Buyer and Seller shall, as soon as reasonably practicable thereafter, jointly instruct the Escrow Agent (in accordance with the terms of the Escrow Agreement) to return to the Buyer for cancellation all Escrow Shares which would otherwise have been released to the Seller pursuant to this Agreement; or

(ii) if the Seller becomes a Bad Leaver at any time during the period beginning on the date which is the first anniversary of Completion and up to but excluding the second anniversary of Completion (Second Relevant Period), then the Buyer may, within the Second Leaver Notice Period, provide written notice to the Seller, notifying the Seller that the Seller has ceased to be entitled to the Second Escrow Release, following which the Buyer and Seller shall as soon as reasonably practicable thereafter, jointly instruct the Escrow Agent (in accordance with the terms of the Escrow Agreement) to return to the Buyer for cancellation all Escrow Shares comprising the Second Escrow Release, noting that, for the avoidance of doubt, this sub-clause (ii) shall not affect the Seller's entitlement to the First Escrow Release.

(c) Settled Claims

Save as otherwise agreed between the Seller and Buyer:

(i) if, during the First Relevant Period, the Buyer has a Relevant Claim or Indemnity Claim which has either been:

(A) agreed to in writing by the Seller during the First Relevant Period; or

(B) finally determined by a court of competent jurisdiction during the First Relevant Period where the time period to lodge an appeal has lapsed, ((A) and (B) together, a First Settled Claim),

then, without prejudice to any other rights of the Buyer under this Agreement, as soon as reasonably practicable following written notice by the Buyer to the Seller of its intention to exercise its right of set-off under this clause 4.5(c)(i) and provided such notice has been served on the Seller prior to the expiry of the First Relevant Period, the Buyer and Seller shall jointly instruct the Escrow Agent (in accordance with the terms of the Escrow Agreement) to return to the Buyer (by way of set off) a number of Escrow Shares for cancellation which would otherwise be released to the Seller pursuant to clause 4.5(a) of this Agreement, up to a maximum number of Escrow Shares (excluding fractions) as have an aggregate Market Value nearest to (but not more than) the amount agreed or determined as being payable by the Seller in respect of a First Settled Claim; and/or

5 

(ii) if, during the Second Relevant Period, the Buyer has a Relevant Claim or Indemnity Claim which has either been:

(A) agreed to in writing by the Seller during the Second Relevant Period; or

(B) finally determined by a court of competent jurisdiction during the Second Relevant Period and the time period to lodge an appeal has lapsed, ((A) and (B) together, a Second Settled Claim),

then, without prejudice to any other rights of the Buyer under this Agreement, as soon as reasonably practicable following written notice by the Buyer to the Seller of its intention to exercise its right of set-off under this clause 4.5(c)(ii) and provided such notice has been served on the Seller prior to the expiry of the Second Relevant Period, the Buyer and Seller shall jointly instruct the Escrow Agent to return to the Buyer (by way of set off) from the Second Escrow Release, a number of Escrow Shares up to a maximum number of Escrow Shares (excluding fractions) as have an aggregate Market Value nearest to (but not more than) the amount agreed or determined as being payable by the Seller in respect of a Second Settled Claim, with the balance of Escrow Shares to be released in accordance with clause 4.5(a) (subject to any other application of clauses 4.5(b) to 4.5(d)).

(d) Disputed Claims

Save as otherwise agreed between the Seller and Buyer:

(i) If at any time before the date or dates on which the Seller shall be entitled to Escrow Shares, the Buyer has made a Relevant Claim (or Relevant Claims) or Indemnity Claim (or Indemnity Claims) against the Seller under this Agreement and the Relevant Claim(s) or Indemnity Claim(s) are not a First Settled Claim or a Second Settled Claim (Disputed Claim), then the Buyer shall be entitled to:

(A) give notice to the Seller of the Disputed Claim, setting out details concerning the matter or circumstances giving rise to the Disputed Claim, and the Buyer's good faith, genuine and bona fide estimate of the amount of the Disputed Claim, which will be accompanied by a confirmation in writing by Qualifying Counsel that such Disputed Claim is, on balance of probabilities, likely to succeed, and that the estimate given by the Buyer is a reasonable estimate of the amount payable in respect of such Disputed Claim if successful (the Estimated Liability);

(B) subject to first complying with (A) above, and in any event prior to the expiry of the Second Relevant Period, instruct the Escrow Agent to withhold such number of Escrow Shares as have an aggregate Market Value nearest to the Estimated Liability from the amount yet to be released to the Seller on the First Release Date or the Second Release Date (as the case may be) pending resolution of the Disputed Claim;

6 

(C) in the same instruction as (B) above, instruct the Escrow Agent that if:

1) the Estimated Liability is lower than the aggregate Market Value of the Escrow Shares yet to be released to the Seller on the applicable Release Date, then an amount of Escrow Shares as have an aggregate Market Value nearest to the Estimated Liability shall be withheld from the Escrow Shares yet to be released to the Seller on the applicable Release Date (pending resolution of the Disputed Claim) and the remainder due to be released on the applicable Release Date shall be released to the Seller in accordance with the terms of this Agreement and the Escrow Agreement; and/or

2) such instruction is made prior to the First Release Date and the Estimated Liability is higher than the aggregate Market Value of Escrow Shares which would otherwise be released to the Seller on the First Release Date, then an amount of Escrow Shares as have an aggregate Market Value nearest to the Estimated Liability shall be withheld from the Escrow Shares due to be released on the First Release Date and/or Second Release Date (pending resolution of the Disputed Claim) and the remainder of such Escrow Shares not subject to such withholding will be released to the Seller on the applicable Release Date; or

3) the Estimated Liability is higher than the aggregate Market Value of Escrow Shares yet to be released to the Seller then all Escrow Shares shall be withheld pending resolution of the Disputed Claim.

(ii) Where a Disputed Claim has been settled, and the amount payable to the Buyer, if any, has been determined by a settlement, the Buyer and Seller shall, as soon as reasonably practicable and within 5 Business Days from the date of settlement, jointly instruct the Escrow Agent to return to the Buyer (by way of set off) a number of Escrow Shares for cancellation as have an aggregate Market Value nearest to the amount determined, and the balance (if any) of the amount of Escrow Shares due to have been paid to the Seller on the applicable Release Date will be released to the Seller on the applicable Release Date (and if settlement occurs after the Second Release Date, on the same date as the Escrow Agent returns to the Buyer (by way of set off) the Escrow Shares referred to in this sub-paragraph, or 5 Business Days following the joint written notice (in the event no amount is payable to the Buyer in connection with the settled Disputed Claim)).

(iii) A Relevant Claim or Indemnity Claim is deemed to be settled under clause 4.5(d)(ii) if:

(A) it is agreed in writing by the Buyer to be withdrawn or discontinued;

(B) the Seller and the Buyer agree in writing that it is;

(C) it is decided by a court of competent jurisdiction and either no right of appeal lies or the time allowed for appeal has elapsed; or

(D) the Buyer files a notice of acceptance of an offer made by the Seller under Part 36 of the Civil Procedure Rules 1998 or a notice of acceptance of an offer made by the Buyer under Part 36 of the Civil Procedure Rules 1998 is filed by the Seller.

4.6 Instructions

7 

The Seller and the Buyer shall promptly give, or jointly give, all such instructions as are necessary to ensure the operation of the Escrow Account and the application of the Escrow Shares in accordance with clause 4.5.

4.7 Reduction in Purchase Price

Any payment made (or deemed made) by the Seller to the Buyer in respect of any Relevant Claim, Indemnity Claim, or any other claim under this Agreement and any exercise of the Buyer's right of set-off under clause 4.5 shall, to the extent possible, take effect as a reduction in the Purchase Price.

4.8 Transaction Fees

The Buyer shall procure that, as soon as reasonably practicable, and in any event within 3 Business Days following receipt of a relevant invoice, the Company make payments in the following amounts to the following persons to satisfy professional costs incurred by the Company in respect of services rendered by such persons in connection with the preparation of the Company for sale (and such payments shall be included as part of the trade creditors balance for the purposes of the Completion Accounts):

Recipient of Payment	Amount (£)
Xxxxxxxxxxxxxxxxxxxxx	xxxxxxxxxxxxxxx
Xxxxxxxxxxxxxxxxxxxxxxxxxxxx	xxxxxxxxxxxxxxxxxxxxxxxxxxx
Xxxxxxxxxxxxx	xxxxxxxxxxxxxxxxxx

5 Signing and Completion

5.1 Completion Date

Completion will take place on the second Business Day following the satisfaction of the Conditions (Completion Date) at the Seller's Solicitors' offices or such other date and place (or by such other method) as the Seller and the Buyer may agree.

5.2 Signing and Completion obligations

Each party shall comply with its exchange obligations set out at paragraphs 1 and 2 of Schedule 3 on the date of this Agreement. At Completion, each party shall comply with its obligations in paragraphs 3 to 5 (inclusive) of Schedule 3 (Exchange and Completion obligations).

5.3 Sale of all the Shares to be simultaneous

The Buyer is not obliged to purchase any of the Shares unless the purchase of all the Shares is completed simultaneously.

5.4 Power of Attorney

(a) The Seller irrevocably and unconditionally appoints the Buyer by way of security as his lawful attorney (and to the complete exclusion of any rights that he may have in that regard) for the purpose of:

(i) exercising any voting and other rights and receiving any benefits and entitlements which attach to or arise in respect of any of the Shares;

8 

(ii) receiving notices of and attending all meetings of any members of the Company; and

(iii) generally approving or executing documents and doing any acts or things in relation to any of the Shares as the attorney thinks fit,

in each case from Completion until the date upon which the Buyer or its nominee is entered in the register of members as the holder of the Shares (to the complete exclusion of any rights that the Seller (or his estate) may have in that regard) and undertakes to ratify and confirm whatever the Buyer lawfully does or causes to be done under this power of attorney. For this purpose, the Seller authorises and instructs the Company to send all communications and payments in respect of the Shares to the Buyer during such period.

(b) The Buyer may at any time and on more than one occasion appoint in writing a substitute or substitutes (jointly or severally) to act as the attorney of the Seller under this power of attorney (with the same powers and authority as the Buyer, (including, without limitation) the power and authority conferred by this clause 5.4(b) to appoint a substitute, as the attorney) and may delegate to an agent the exercise of any other power conferred by this power of attorney and to act concurrently with such agent. The Buyer may at any time revoke any such appointment in writing without giving any reason.

5.5 Tax schedule

The provisions of Schedule 8 (Tax) shall have effect from Completion.

6 Warranties

6.1 Giving of Warranties

(a) The Seller warrants to the Buyer that except as Disclosed, each Warranty is true and accurate as at the date of this Agreement.

(b) Each of the Warranties is separate and, unless specifically provided, is not limited by reference to any other Warranty or any other provision of this Agreement.

(c) The Seller agrees that the supply of any information by or on behalf of the Company or any of its respective employees, directors, agents or officers (Officers) to the Seller or its advisers in connection with the Warranties, the Disclosure Letter or otherwise shall not constitute a warranty, representation or guarantee as to the accuracy of such information in favour of the Seller. The Seller unconditionally and irrevocably waives all and any rights and claims that it may have against the Company or the Officers on whom the Seller has, or may have, relied in connection with the preparation of the Disclosure Letter, or agreeing the terms of this Agreement, and further undertakes to the Buyer and the Company not to make any such claims, provided that no waiver shall be deemed given or liability excluded under this sub-clause in respect of any liability of the Company and/or its Officers for fraud or fraudulent misrepresentation.

(d) For the avoidance of doubt, the rights and remedies of the Buyer in respect of any Claim or Tax Claim shall not be affected by Completion.

6.2 Interim Period and repetition of Warranties

(a) The Seller further warrants to the Buyer that, except as Disclosed, each of the Warranties will be true and accurate at the Completion Date by reference to the facts and circumstances then subsisting. Any reference made to the date of this Agreement (whether express or implied) in relation to any Warranty shall be construed, in connection with the repetition of the Warranties, as a reference to the Completion Date.

9 

(b) If at any time during the Interim Period, the Seller becomes aware of a fact or circumstance which constitutes (or which is reasonably expected to constitute) a breach of a Warranty under clause 6.1(a) it shall promptly:

(i) notify the Buyer in writing of the relevant fact or circumstances; and

(ii) if requested by the Buyer, use all reasonable endeavours to remedy or prevent (as the case may be) the notified breach or anticipated breach.

(c) If at any time during the Interim Period it becomes known that: (i) a Warranty given under clause 6.1(a) has been breached and which has or is reasonably likely to have a Significant Impact, or (ii) a Key Warranty has been breached, or (iii) circumstances and matters have arisen during the Interim Period which do not give rise to a breach of Warranty under clause 6.1(a), on the basis that such Warranties are given at the date of this Agreement, but would give rise to a breach of Warranty had the Warranties been repeated throughout the Interim Period and where such breach has or is reasonably likely to have a Significant Impact, the Buyer may (at its sole discretion and without prejudice to any other rights or remedies it has, including the right to claim damages for breach of this Agreement):

(i) terminate this Agreement by notice in writing to the Seller (in which case clause 2.6 shall apply), provided that the Buyer shall first afford the Seller the opportunity to remedy any such breach to the Buyer's reasonable satisfaction (to the extent capable of remedy) up to the date which is one Business Day prior to Completion; or

(ii) proceed to Completion.

(d) If at any time during the Interim Period it becomes known that any Warranty given under clause 6.1(a) has been breached or circumstances and matters have arisen during the Interim Period which do not give rise to a breach of Warranty under clause 6.1(a), on the basis that such Warranties are given at the date of this Agreement, but would give rise to a breach of Warranty had the Warranties been repeated throughout the Interim Period, and such breach is not reasonably likely to have a Significant Impact, the Buyer shall proceed to Completion, without prejudice to its right to claim damages for breach of Warranty given under clause 6.1(a) and provided always that any information provided to the Buyer under clause 6.2(b) shall not be capable of qualifying a breach of a Warranty given under clause 6.1(a).

6.3 Disclosure

The Warranties given under clause 6.1(a) are qualified to the extent of the matters Disclosed in the Disclosure Letter and/or the Data Room Documents. The Warranties given under clause 6.2(a) are qualified to the extent of matters Disclosed in the Disclosure Letter and/or the Data Room Documents. For this purpose, Disclosed means disclosed in the Disclosure Letter and/or Data Room Documents with sufficient detail to enable a reasonably diligent purchaser of the Shares to identify the nature and scope of the matter disclosed.

6.4 Awareness Warranties

Any Warranty which is qualified by the expression "so far as the Seller is aware" or any similar expression shall be deemed to include a statement that such awareness means the actual knowledge of the Seller having made reasonable enquiries of each of the Employees and (in relation to the Tax Warranties and the Warranties in paragraph 2.1 of Schedule 4 only), having made reasonable enquiries of Xxxxxxxxxxxxxxxxxxxxxxx.

6.5 Buyer Warranties and Limitations

10 

(a) The Buyer warrants to the Seller that the Buyer Warranties are true and accurate as at the date of this Agreement and will be true and accurate (by reference to the facts and circumstances then subsisting) at the Completion Date. Any reference made to the date of this Agreement (whether express or implied) in relation to any of the Buyer Warranties shall be construed, in connection with the repetition of the Buyer Warranties, as a reference to the Completion Date.

(b) Save where expressly stated otherwise:

(i) the maximum liability of the Buyer for all claims for breach of any Buyer Warranty, including Expenses and the costs and expenses reasonably and properly incurred by the Seller in bringing a claim for breach of any Buyer Warranty shall not exceed the amount set out in paragraph 2.1 of Schedule 5; and

(ii) the Buyer shall cease to be liable for any claims for breach of any Buyer Warranty, unless the Seller validly serves notice on the Seller (specifying in reasonable detail the nature of the breach of Buyer Warranty and, so far as is practicable, the amount claimed in respect of it) on or before the date that is xxxxxxxxxxxxxxxxxxxxxxxx.

7 Limitations on Seller’s liability

Save where expressly stated otherwise, the liability of the Seller under this Agreement is limited by the limitations as set out in Schedule 5 (Limitations on liability).

8 Indemnities

8.1 Without limiting any other rights or remedies the Buyer may have, the Seller shall indemnify the Buyer against, and shall pay to the Buyer a sum equal to all liabilities, reasonable and proper costs and expenses, damages and losses suffered or incurred by the Buyer (excluding any internal management costs) in respect of the following matters:

(a) any losses arising as a result of civil claims brought by Employees, where such losses arise as a result of a breach or alleged breach by the Company of the Employers' Liability (Compulsory Insurance) Act 1969 prior to Completion;

(b) any fine imposed on the Company or any losses arising from any enforcement or criminal action brought by the Health and Safety Executive or other Authority, arising as a result of the Company not having in place an employer’s liability insurance policy prior to Completion;

(c) any fine imposed on the Company in the 12 month period following Completion by the Health and Safety Executive or other Authority, arising as a result of the Company not having in place, prior to Completion, any policies in respect of health and safety under section 2(3) of the Health and Safety at Work etc Act 1974;

(d) any losses arising as a result of civil claims made against the Company in the 12 month period following Completion, arising as a result of the Company’s failure to have in place, prior to Completion, policies in respect of health and safety under the Health and Safety at Work etc Act 1974;

(e) any claim brought by any Employee which is directly attributable to the failure by the Company to have in place a formal grievance and disciplinary procedure or policy prior to Completion;

11 

(f) any claim brought by any Employee in respect of any unpaid holiday/sick pay arising from any such Employee of the Company being treated as self-employed prior to Completion;

(g) any claim arising as a direct result of the failure by the Company to have in place prior to Completion a public liability insurance policy and/or a products liability insurance policy provided that the Buyer shall, as a condition to enforcing this indemnity,

(i) use reasonable endeavours to recover the loss under its existing public liability and/or products liability insurance policies (but the Buyer shall be under no obligation to buy new or extend existing insurance policy(ies) specifically to cover this risk); and/or

(ii) in connection with products liability only, first use reasonable endeavours to recover any loss arising against any relevant supplier to the Company/contract manufacturer of the Company.

(h) any claim brought by any Employee in respect of employment status as a result of his/her engagement as a consultant by the Company prior to being employed by the Company;

(i) any claim brought by any Employee and resultant additional compensation awarded as a direct result of an Employment Tribunal  or Court finding that the period whilst engaged as a consultant by the Company should count towards the period of continuous employment as an Employee;

(j) any fines or penalties incurred by the Company as a result of civil claims brought by and third party or enforcement action instigated by the Information Commissioner’s Office, in each case arising as a direct result of the failure of the Company to have in place prior to Completion any policies relating to Data Protection Laws.

8.2 Except for any Indemnity Claim made under clauses 8.1(a) and 8.1(b), the Seller shall cease to be liable for any Indemnity Claim unless notice of such Indemnity Claim has been validly served on the Seller by the first anniversary of the date of this Agreement. The Seller shall cease to be liable for any Indemnity Claim made under clauses 8.1(a) and 8.1(b) unless notice of such Indemnity Claim has been validly served on the Seller by the second anniversary of the date of this Agreement.

8.3 The Buyer shall reimburse the Seller forthwith an amount equal to any amount paid by the Seller in respect of any Indemnity Claim which is subsequently recovered by or paid to the Buyer's Group by any third party (including, for the avoidance of doubt, any insurer or underwriter) in respect of the matter giving rise to the Indemnity Claim.

8.4 If the Buyer makes any Indemnity Claim, the Buyer shall, and shall ensure that the Buyer's Group shall allow the Seller and his duly authorised representatives and professional advisers access for the purposes of the relevant Indemnity Claim to any relevant records and information of the Buyer's Group and permit the Seller and his representatives and advisers to make copies (at their own cost) of those records and information.

8.5 If the Buyer becomes aware of any third party claim which could form the basis of an Indemnity Claim, the Buyer:

(i) shall notify the Seller of the circumstances surrounding such third claim without delay within 5 Business Days of the Buyer or any member of the Buyer's Group becoming aware of such potential claim, and in any event prior to taking any material step to defend any third party claim made against any member of the Group, or to compromise, settle or waive any right in relation to such third party claim made against the Group;

12 

(ii) shall provide (and shall procure that any other member of the Buyer's Group provides) the Seller with such information as the Seller may reasonably require relating to such potential claim and shall keep the Seller fully informed of any material development in the conduct of any potential claim; and

(iii) subject to the Seller indemnifying the Buyer in respect of the Buyer’s Expenses and the costs and expenses reasonably and properly incurred by the Buyer, shall not (and shall procure that the no other member of the Buyer's Group shall) compromise, settle or waive any right or admit any liability in relation to that potential claim without the written consent of the Seller (not to be unreasonably withheld).

8.6 The Buyer shall not be entitled to claim for any punitive, indirect or consequential loss or for any loss calculated by reference to profits (whether direct or indirect), income, production or accruals or loss of such profits, income, production or accruals or loss of business opportunities or anticipated savings in respect of any Indemnity Claim.

8.7 Nothing in this clause 8 shall be deemed to relieve the Buyer from its common law duty to mitigate its loss.

8.8 Neither the Buyer nor any member of the Buyer Group shall be entitled to recover damages or any other amount in respect of any Indemnity Claim or otherwise obtain reimbursement or restitution more than once in respect of the same matter, loss or liability and for this purpose any payment by the Seller pursuant to an Indemnity Claim shall be deemed to satisfy any Claim and/or Tax Claim in respect of the same matter and vice versa.

8.9 Save where expressly stated otherwise, the limitations set out in Schedule 5 shall not apply in relation to any Indemnity Claim.

9 Restrictive covenants

9.1 Definitions

In this clause 9, unless the context otherwise requires:

Restricted Area means the United Kingdom

Restricted Person means any person who is at Completion, or who has been at any time during the period of one year immediately preceding the Completion Date, employed or directly or indirectly engaged by the Company

Restricted Period means the period of xxxxxxxxxxxxxxxxxxxxxxxx

Restricted Products

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxx

9.2 Giving of restrictive covenants

13 

Subject to clause 9.3, the Seller agrees with the Buyer that he shall not, during the Restricted Period:

(a) in the Restricted Area and in competition with the business, carry on, or be engaged, concerned or interested in, any business which is involved in the sale or supply of Restricted Products and which is in competition with any part of the Business as carried on at the Completion Date;

(b) offer employment to, enter into a contract for the services of, or otherwise entice or attempt to entice away from the Company, any Restricted Person for the purposes of involvement in any business involved in the sale or supply of Restricted Products, or procure or facilitate the making of any such offer or attempt by any other person; and

(c) have any business dealings with, or solicit, entice or attempt to entice away, any person who has within the year prior to the Completion Date, been a supplier of the Company, if such dealings, solicitation or enticement causes or is reasonably likely to cause such supplier to cease supplying, or to materially reduce its supply of goods or services to the Company or to materially vary adversely the terms upon which it conducts business with the Company.

9.3 Exceptions to the restrictive covenants

Clause 9.2 shall not prevent the Seller:

(a) holding or being interested in up to 5% of the issued share capital of a company listed on a recognised investment exchange (as defined by section 285 of the Financial Services and Markets Act 2000) or the Alternative Investment Market of the London Stock Exchange;

(b) performing any of his obligations under this Agreement or any other Transaction Document;

(c) for the avoidance of doubt, holding the Consideration Shares or any other shares in the issued share capital of the Buyer;

(d) carrying out any relevant duties or activities in the Seller's capacity as an employee and/or director of the Company at any time;

(e) employing or engaging any person responding to a bona fide advertisement for a post available to the public generally, or through an employment agency; or

(f) carrying on or being engaged, employed or otherwise interested in any business which is involved in the sale or supply of Restricted Products after such time as the Buyer ceases to carry on or be engaged or economically interested in such activities.

9.4 Restrictions relating to business names

(a) The Seller agrees with the Buyer that he shall not, other than through the Company, use or procure the use in connection with any business (other than the business of the Company) of:

(i) the name "Xxxxxxxxxxxxxxxxxxxxxxxx" or any other name reasonably likely to be confused with any such name;

(ii) any of the words "Xxxxxxxxxxxxxxxxxx”;

(iii) any trade or service mark, business or domain name, design or logo which, at Completion, is being or has been used by the Company in connection with the Business; or

14 

(iv) anything which, in the reasonable opinion of the Buyer, will cause confusion with any of the words, marks, names, designs or logos referred to in clause 9.4(a)(i) through clause 9.4(a)(iii)(inclusive).

9.5 Enforceability

(a) The undertakings in clause 9.2 and clause 9.4 are intended for the benefit of, and shall be enforceable by, each of the Buyer and the Company and shall apply to actions carried out by the Seller in any capacity (including as shareholder, partner, director, principal, consultant, officer, agent or otherwise) and whether directly or indirectly, on its own behalf or on behalf of, or jointly with, any other person.

(b) The parties acknowledge that the Seller has confidential information relating to the Business and that the Buyer is entitled to protect the goodwill of the Business as a result of buying the Shares. The Seller accordingly agrees that the restrictions in this clause 9 are fair and reasonable.

(c) Each of the undertakings in clause 9.2 and clause 9.4 is a separate undertaking by the Seller and shall be enforceable by the Buyer and the Company separately and independently of their right to enforce any one or more of the other undertakings contained in that clause. Nevertheless, if any of the restrictions are found to be void but would be valid if reduced in scope or deleted in part, the relevant restriction shall apply with such reduction or deletion as is necessary to make it valid and enforceable.

(d) The consideration for the undertakings in clause 9.2 and clause 9.4 is included in the Purchase Price.

10 Further assurance

The Seller, on written request by the Buyer served during the period of 6 months following Completion, shall (and shall use reasonable endeavours to procure that any relevant third party shall) promptly execute and deliver such documents and do such acts and things as the Buyer may reasonably require to transfer the Shares to the Buyer on the terms set out in this Agreement, provided always that nothing in this Agreement will oblige the Seller to pay stamp duty or stamp duty reserve tax in respect of the transfer of the Shares which shall be the sole responsibility of the Buyer.

11 Payments

11.1 Any amounts payable to the Seller under this Agreement must be paid from the Buyer Account by electronic funds transfer for same day value into the following account of the Seller's Solicitors (or any other account notified to the Buyer in writing by the Seller for this purpose from time to time) (Seller Account):

Xxxxxxxxxxxxx	Xxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxx
Xxxxxxxxxxxxx	Xxxxxxxxxxxxxxxxx
Xxxxxxxxxxxxxx	Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Xxxxxxxxxx	xxxxxxxx
Xxxxxxxxxxxxxxx	xxxxxxxx

11.2 The Seller's Solicitors are irrevocably authorised by the Seller to receive any amount payable to the Seller under this Agreement and the receipt of any amount so paid in the Seller Account will be a valid discharge for the Buyer for the relevant amount.

11.3 Any amounts payable to the Buyer under this Agreement must be paid by electronic funds transfer for same day value into the following account of the Buyer's Solicitors (or any other account notified to the Seller in writing by the Buyer for this purpose from time to time) (Buyer Account):

15 

Xxxxxxxxxxxxx	Xxxxxxxxxxxxxxxxxxxxx
Xxxxxxxxxxxxx	Xxxxxxxxxxxxxxxxx
Xxxxxxxxxxxxxx	xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Xxxxxxxxxx	xxxxxxxx
Xxxxxxxxxxxxxxx	xxxxxxxx

11.4 The Buyer's Solicitors are irrevocably authorised by the Buyer to receive any amount payable to the Buyer under this Agreement and receipt of any amount so paid in the Buyer Account will be a valid discharge for the Seller for the relevant amount.

11.5 Any amounts payable to the Company under this Agreement must be paid by electronic funds transfer for same day value into the following account of the Company (Company Account):

Xxxxxxxxxxxxx	Xxxxxxxxxxx
Xxxxxxxxxxxxx	Xxxxxxxxxxxxxxxxx
Xxxxxxxxxxxxxx	Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Xxxxxxxxxx	xxxxxxxx
Xxxxxxxxxxxxxxx	xxxxxxxx

12 Notices

12.1 Any notice, consent, request, approval, settlement, election, proposal, claim form (including particulars of claim) for the purposes of serving proceedings or other communication under or in connection with this Agreement (Notice) will be:

(a) in English;

(b) in writing; and

(c) shall be:

(i) sent by email; or

(ii) delivered by:

(A) hand; or

(B) internationally recognised courier service; or

(C) sent by pre-paid first class post or another next working day delivery service,

to an address in the UK providing proof of postage or delivery.

12.2 Notices may not be delivered by fax.

12.3 Any Notice to the Seller will be sent to the following addresses, or such other address in the UK as the Seller may notify to the Buyer from time to time (with a copy of such Notice to be sent to Xxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx and Xxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx at Xxxxxxxxxxxxxxxxxxxxx, xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx, but failure to serve a copy of such Notice to such persons shall not make such Notice itself invalid):

16 

Party:	Vithursxxxxxxxxxxxxxxx
Address:	Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Email address:	xxxxxxxxxxxxxxxxxxx

12.4 Any Notice to the Buyer can be sent either in accordance with clause 25, or to the following addresses, or such other address as the Buyer may notify to the Seller from time to time (with a copy of such Notice to be sent to Matthew Stratton xxxxxxxxxxxxxxxxxxxxxxxxxxxx and Robert Jappie xxxxxxxxxxxxxxxxxxxxxxxxx at Xxxxxxxxxxxxxxxxxxxxx, Aldgate Tower, 2 Leman Street, London E1 8QN, but failure to serve a copy of such Notice to such persons shall not make such Notice itself invalid):

Party:	High Tide Inc.
Address:	11127 15th Street, Northeast Suite, 111-113 Calgary, AB T3K 2M4 Canada
For the attention of:	Xxxxxxxxxx
Email address:	xxxxxxxxxxxxxxxxxxx

12.5 A Notice will be effective on receipt and, in the absence of evidence of earlier receipt, will be deemed to have been received:

(a) at the time of delivery if delivered by hand or courier service;

(b) if sent by email, at the time of transmission; or

(c) if sent by pre-paid first class post or another next working day delivery service providing proof of postage or delivery to an address in the UK, at 9.00 am on the second Business Day after posting or at the time recorded by the delivery service,

save that if this means that any Notice would otherwise be deemed to be received outside normal business hours (normal business hours for this purpose being between 9.00 am and 5.00 pm on a Business Day at the place of receipt of the Notice), such Notice will be deemed to be received at the start of normal business hours on the next Business Day.

12.6 For the avoidance of any doubt, the parties have, in this clause 12, contracted out of the service provisions of the Civil Procedure Rules, as permitted by CPR 6.11.

13 Assignment

13.1 Subject to clause 13.2, no right, interest, or obligation arising under this Agreement may be assigned, transferred or otherwise disposed of or dealt with, in whole or in part, by any party without the prior written agreement of the other parties.

13.2 The Buyer may, without the need to obtain the consent of the Seller assign the benefit of this Agreement, in whole or in part, at any time and on more than one occasion:

(a) to any member of the Buyer's Group, save that if the assignee ceases to be a member of the Buyer's Group, the Buyer shall first ensure that the assignee reassigns the benefit that has been assigned to it under this clause 13 to the Buyer (or another member of the Buyer's Group); and/or

17 

(b) by way of security for the benefit of any person who provides bank or other facilities to any member of the Buyer's Group in connection with the transactions effected under this Agreement, and any such security or encumbrance may be enforced or released.

13.3 If there is an assignment or encumbrance under this clause 13:

(a) the amount of loss or damage or other amount recoverable by the assignee or encumbrancer shall be no greater than would have been the case had such assignment or encumbrance not taken place; and

(b) subject at all times to 13.3(a) above, the assignee or transferee may enforce this Agreement as if it were named in this Agreement as the Buyer, but the Buyer shall remain liable for any obligations under the Agreement.

13.4 The Buyer shall promptly give notice to the Seller of assignment by it under this clause 13.

14 Third party rights

14.1 Unless this Agreement expressly states otherwise (which includes any provision expressed to be in favour of any person who is not a party), a person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of, or enjoy any benefit under, this Agreement.

14.2 This Agreement may be terminated, and any provision of it amended or waived, without the consent of any person who is not a party to this Agreement but who has the right to enforce any of its terms under this clause 14.

15 Announcements

15.1 Subject to clause 15.2 and save for the press announcement in the agreed form (Press Announcement), no announcement or circular relating to the existence or subject matter of this Agreement or any ancillary matter shall be made or issued by or on behalf of:

(a) the Seller without the prior written approval of the Buyer; or

(b) the Buyer or any member of the Buyer's Group without the prior written approval of the Seller,

in either case, such approval not to be unreasonably withheld or delayed.

15.2 Any party may make an announcement concerning the sale or purchase of the Shares or any ancillary matter:

(a) if required by the law of any relevant jurisdiction;

(b) if required by any regulatory body to which it is subject; or

(c) if required by any securities exchange on which its shares (or those of its holding company) are listed,

provided that:

(d) prior to making any such announcement, the relevant party shall, to the extent permitted by law, take all reasonable steps to agree the contents of such announcement with the other party before its release; and

(e) the relevant party shall notify the other party of any such announcement made.

16 Confidentiality

18 

16.1 Subject to clause 16.2, each party shall treat as strictly confidential, and not disclose or use, any information or trade secrets received or obtained as a result of entering into or performing this Agreement and the other Transaction Documents which relates to:

(a) the existence and the provisions of this Agreement and the other Transaction Documents;

(b) the negotiations relating to this Agreement and the other Transaction Documents;

(c) (in the case of the Buyer only) the business, customers, clients, suppliers, financial and other affairs of the Seller; and

(d) (in the case of the Seller only) the business, customers, clients, suppliers, financial and other affairs of the Company and the Buyer's Group.

16.2 Clause 16.1 shall not prohibit disclosure or use of any information which would otherwise be treated as confidential if and to the extent:

(a) the disclosure or use is required by the law of any relevant jurisdiction;

(b) the disclosure or use is required for the purpose of any judicial proceedings arising out of this Agreement or any other Transaction Document;

(c) the disclosure or use is required by any regulatory body to which any party is subject;

(d) the disclosure or use is required by any securities exchange on which the shares or other securities of the disclosing party or its holding company are listed or traded;

(e) the disclosure is made to any Tax Authority in connection with the tax affairs of the disclosing party or with a "reportable cross-border arrangement" as defined in The International Tax Enforcement (Disclosable Arrangements) Regulations 2020 as amended by The International Tax Enforcement (Disclosable Arrangements) (Amendment) (No. 2) (EU Exit) Regulations 2020 or Council Directive (EU) 2018/822;

(f) the disclosure is made on a strictly confidential basis to the professional advisers, auditors and/or bankers of the disclosing party;

(g) the information has become publicly available through no fault of the disclosing party;

(h) the other party has given prior written approval to the disclosure or use by the disclosing party; or

(i) the disclosure is to a member of the Buyer's Group (in the case of the Buyer) which accepts restrictions in the terms of this clause 16,

provided that any disclosure or use of any information under any of clauses 16.2(a) to 16.2(e) (inclusive) shall, to the extent permitted by law and subject to legal professional privilege (including litigation privilege and/or legal advice privilege) and as is otherwise reasonable and practicable in the circumstances, be made by the disclosing party only after notice to the other party.

17 Entire agreement

17.1 This Agreement (together with the other Transaction Documents) sets out the entire agreement and understanding between the parties to them in connection with the subject matter of this Agreement and matters described in the other Transaction Documents.

17.2 Without affecting clause 17.1, this Agreement (together with the other Transaction Documents) supersedes all, if any, prior negotiations, representations, undertakings and agreements (whether oral or written) on any matter which is the subject of this Agreement or any of the other Transaction Documents.

19 

17.3 Each of the parties acknowledges that it is not relying on any statement, warranty, representation, undertaking, collateral contract or other assurance given or made by or on behalf of any of the other parties or the Company (or any of their respective agents, officers, employees and advisers) in relation to the subject matter of this Agreement which is not expressly set out in this Agreement or the other Transaction Documents (Non-contractual Assurance).

17.4 No party shall have any claim or remedy in respect of any Non-contractual Assurance. To the extent that any of the parties has been given any Non-contractual Assurance (including, for the avoidance of doubt, any innocent or negligent misrepresentation or misstatement), the relevant party unconditionally waives any claims, rights or remedies which it might otherwise have in relation thereto.

17.5 Nothing in this clause 17 or otherwise under this Agreement shall exclude or limit any liability for, or remedy in respect of, fraud or fraudulent misrepresentation.

18 Alterations and Waivers

18.1 Any alteration to this Agreement must be in writing, refer specifically to this Agreement and be duly executed by each party.

18.2 Any waiver shall apply only to the circumstances for which it is given and shall not be deemed a waiver of any subsequent breach or default.

18.3 Subject to any limitations or restrictions on the Buyer pursuant to the terms of this Agreement, a failure or delay by any person to exercise any right or remedy provided under this Agreement or by law shall not constitute a waiver of that or any other right or remedy, nor shall it prevent or restrict any further exercise of that or any other right or remedy. No single or partial exercise of any right or remedy provided under this Agreement or by law shall prevent or restrict the further exercise of that or any other right or remedy.

19 Severability

19.1 If any provision in this Agreement is or at any time becomes invalid, illegal or unenforceable in whole or in part, the relevant provision (or part of it), to the extent that it is invalid, illegal or unenforceable, shall not apply and shall be deemed not to form part of this Agreement.

19.2 The validity, legality and enforceability of the remainder of this Agreement shall not, subject to any modification or deletion under clause 19.1, be affected, provided that the operation of this clause 19 would not negate the commercial intention of the parties in entering into this Agreement.

20 Counterparts

20.1 This Agreement may be entered into in the form of two or more counterparts, each executed by one or more of the parties but shall not be effective until all parties have executed at least one counterpart.

20.2 Each counterpart shall be an original of this Agreement and all the counterparts taken together shall constitute one instrument.

21 Payment of costs

Except where this Agreement or another Transaction Document provides otherwise, each party shall pay his/its own costs and expenses incurred in relation to the preparation, negotiation, entering into and completion of this Agreement and each Transaction Document.

22 Continuing effect of this Agreement

All provisions of this Agreement and each other Transaction Document shall, so far as they are capable of being performed or observed, continue in full force notwithstanding Completion.

20 

23 Governing law

23.1 This Agreement shall be governed by and construed in accordance with English law.

23.2 All claims and disputes (including non-contractual claims and disputes) arising out of or in connection with this Agreement, its subject matter, negotiation or formation shall be determined in accordance with English law.

23.3 If in any court any party argues that a court other than the courts of England and Wales (English courts) has jurisdiction to determine any claims or disputes (including any non-contractual claims or disputes) arising out of or in connection with this Agreement, that issue shall be determined in accordance with English law, and any right that any person might otherwise have to rely upon the law of the forum or any other law is irrevocably and unconditionally waived.

24 Submission to jurisdiction

24.1 Each party irrevocably submits to the exclusive jurisdiction of the English courts in relation to all matters (including non-contractual matters) arising out of or in connection with this Agreement.

24.2 Each party irrevocably waives any right that it may have to object on any ground to an action being brought in the English courts, to claim that the action brought in the English courts has been brought in an inconvenient forum, or to claim that the English courts do not have jurisdiction (and the waiver contained in this clause 24.2 includes a waiver of all formal and substantive requirements of any otherwise competent jurisdiction in relation to this clause 24.2).

24.3 Each party undertakes not to contest in any court in any jurisdiction the enforcement in that jurisdiction of any judgment of the English courts against it on the ground that the English courts did not have jurisdiction over it or that service of process (being service in accordance with clause 12 (Notices)) was invalid or ineffective or resulted in it not having due or adequate notice of the proceedings.

25 Process Agent

25.1 The Buyer:

(a) irrevocably appoints Ince Process Agents Limited (company number 05595740), and any successor in business, of Aldgate Tower, 2 Leman Street, London, E1 8QN in England (Process Agent) as its agent to accept service of any process in England and Wales in relation to any document initiating or otherwise connected with any court proceedings arising out of or in connection with this Agreement;

(b) agrees to notify the Seller in writing of any change of address of such Process Agent within 10 Business Days of the change of address; and

(c) if such Process Agent ceases to be able to act under this clause 25 or ceases to have an address in England and Wales, irrevocably agrees to appoint a replacement process agent (New Process Agent) reasonably acceptable to the Seller of such appointment, and after such appointment reference to the Process Agent in this clause shall be read as reference to the New Process Agent and to give to the Seller notice of such appointment within 10 Business Days.

25.2 Any such document shall be validly served on the Buyer by being sent by pre-paid first class post to or delivered to the Process Agent or left at the Process Agent's address set out in this clause 25, whether or not forwarded to or received by the Buyer.

25.3 Without affecting the effectiveness of service under any other method set out in clause 12 (Notices), service of such process upon the Process Agent at its address given in clause 25.1 or elsewhere within the jurisdiction of the English courts for the time being in force shall constitute good service on the Buyer.

21 

26 Option

The Buyer shall issue, at Completion, a grant of an option to the Seller to purchase 25,000 common shares of the Buyer, which shall have an option price equal to the closing market price on the day immediately prior to Completion. The terms and conditions shall be as generally provided to other executives of the Buyer pursuant to High Tide’s Stock Option Plan as presently constituted.

Executed as a deed by the parties on the date of this Agreement.

22 

Schedule 1

The Company

Name:	Enigmaa Ltd.
Registered number:	11300413
Date of incorporation:	10 April 2018
Country of incorporation:	England and Wales
Registered office:	71-75 Shelton Street London Greater London WC2H 9JQ
Issued share capital:	Amount: £1.00 Divided into: 100 Ordinary shares of £0.01 each held legally and beneficially by Vithursxxxxxxxxxxxxxxx
Directors:	Vithursxxxxxxxxxxxxxxx
Secretary:	Vithursxxxxxxxxxxxxxxx
Auditors:	N/A
Accounting reference date:	30 April
Mortgages/charges:	None

23 

Schedule 2

Conduct of Business

Part 1 Conduct of business during the Interim Period

At all times during the Interim Period, the Seller shall use all reasonable endeavours to:

1. procure that the Company carries on the Business in the normal course as it is carried on immediately prior to the date of this Agreement;

2. maintain the trade and trade connections of the Company; and

3. reasonably promptly provide the Buyer, its agents and representatives (at the sole cost and expense of the Buyer) with such information relating to the business and affairs of the Company, and such access to their books and records, as the Buyer may reasonably require.

Part 2 Matters subject to the Buyer's consent

During the Interim Period, the Seller shall procure that except with the prior written consent of the Buyer (not to be unreasonably withheld, conditioned or delayed), the Company shall not (nor shall it agree to):

1. dispose of any material asset with a book value in excess of xxxxxxxx;

2. enter into, modify or agree to terminate any contract with a Material Supplier or any contract with a prospective supplier where such expenditure in respect of such contract is in excess of 5% of expenditure of the Company for the financial year;

3. incur any capital expenditure in excess of xxxxxxxx;

4. allot any shares or other securities or repurchase, redeem or agree to repurchase or redeem any of its shares;

5. pass any members’ resolution;

6. borrow any sum in excess of the amounts available to it at the date of this Agreement;

7. other than in the ordinary course of business, make any loan or cancel, release or assign any indebtedness owed to it or any claims held by it;

8. declare or pay any dividend or make any other distribution of its assets;

9. make any alterations to the terms of employment or engagement (including pension benefits and other benefits) of any of its Directors, Employees or Workers;

10. dismiss any of its Employees or employ or engage (or offer to employ or engage) or provide any non-contractual benefit to any person;

11. enter into any financial or performance guarantee, or any similar security or indemnity;

12. commence any legal proceedings;

13. enter into or terminate or vary any agreement relating to its Intellectual Property Rights;

14. pay any management charge or incur any other liability to the Seller (directly or indirectly);

15. vary the terms on which it holds the Property (save to the extent it is required to do so by the relevant landlord); or

make any material change to the accounting procedures, principles or policies by reference to which its accounts are drawn up.

24 

Schedule 3

Exchange and Completion obligations

Exchange:

1 The Seller’s obligations

The Seller shall deliver, or shall procure that the following documents or other items are delivered, to the Buyer on the date of this Agreement:

(a) duly executed Disclosure Letter signed by the Seller;

(b) NatWest bank statement dated on the date which is 1 Business Day prior to the date of this Agreement;

(c) a sole director written resolution of the Company, approving the form of the other Transaction Documents; and

(d) a shareholder's written resolution of the Company, approving the director's conflict.

2 The Buyer’s obligations

The Buyer shall deliver, or shall procure that the following documents or other items are delivered, to the Seller on the date of this Agreement:

(a) board resolutions of the Buyer approving the Transaction Documents;

(b) a fully populated Form 5B Expedited Acquisition Filing Form (excluding the section relating to the number of shares to be issued on closing) in the agreed form to be submitted in accordance with clause 2.8 of this Agreement; and

(c) duly executed Disclosure Letter signed by the Buyer.

Completion:

3 The Seller's obligations

3.1 The Seller shall deliver, or shall procure that the following documents or other items are delivered, to the Buyer at or before Completion:

(a) Stock transfer form:

a duly executed stock transfer form for the Shares in favour of the Buyer;

(b) Share certificates:

the share certificate for the Shares in the name of the Seller;

(c) Transaction Documents:

The following Transaction Documents duly executed by the Seller:

(i) the Shareholders' Agreement;

(ii) the Service Agreement;

(iii) the Deed of IP Assignment;

25 

(iv) the Escrow Agreement;

(v) release of claims that the Seller has against the Company in the agreed form (Release of Claims);

(vi) a letter from the Seller, in agreed form, confirming that he has ceased to be a registrable relevant legal entity (within the meaning of section 790C of the CA 2006) in relation to the Company;

(vii) a resignation letter of the Seller as secretary of the Company in the agreed form (Secretary Resignation Letter); and

(viii) a ratification shareholder written resolution in the agreed form (Shareholder Resolution).

(d) Books, documents and records:

The statutory books (written up to the time immediately prior to Completion);

(e) Other:

(i) for the Company, the authentication codes for online filing at Companies House and confirmation as to whether the Company is registered for Protected Online Filing at Companies House;

(ii) the username and password set for each social media account and bank account and any other website used by or on behalf of the Company;

(iii) Data Room File Share;

(iv) NatWest bank statement dated on the date which is 1 Business Day prior to the Completion Date;

(v) evidence (to the reasonable satisfaction of the Buyer) of the subdivision of the share capital of the Company to 100 shares of £0.01 per share;

(vi) evidence of the change of name of Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx to a name not including or similar to “Xxxxxxxxxxxxxxxxxx”;

3.2 The Seller shall procure:

(a) that the Shareholders’ Agreement is duly executed by the Company;

(b) that the Company executes and delivers the fully executed Junior Employment Agreement Variations;

(c) a duly convened and quorate board meeting of the Company is held at which:

(i) the transfer of the Shares is resolved to be registered (subject only to their being duly stamped) notwithstanding any provision to the contrary in the articles of association of the Company;

(ii) Rahim Kanji and Raj Grover are appointed as additional directors of the Company;

(iii) Ince GD Corporate Services is appointed as company secretary of the Company;

(iv) the Seller is to resign as company secretary;

26 

(v) all existing instructions and authorities to the bankers of the Company are revoked and replaced with new instructions and authorities as the Buyer requires;

(vi) the registered office of the Company is changed to C/O xxxxxxxx, Aldgate Tower, 2 Leman Street, London, E1 8QN;

(vii) the accounting reference date of the Company is changed to 31 October;

(viii) a Service Agreement in the agreed form be entered into between the Company and the Seller is approved, along with any other Junior Employment Agreement Variations to be entered into by the relevant Employees at Completion;

(ix) the execution of all relevant Transaction Documents is approved; and

(x) the new articles of association of the Company proposed to be adopted at Completion be approved including the circulation of any shareholder documents to approve this (Articles of Association).

4 The Buyer's obligations

4.1 The Buyer shall deliver or make available to the Seller the following at or prior to Completion:

(a) Transaction Documents:

The following Transaction Documents duly executed by the Buyer:

(i) the Shareholders' Agreement;

(ii) the Escrow Agreement; and

(iii) PSC notification letter;

(b) Powers of attorney:

A duly executed power of attorney or other authority in the agreed form under which this Agreement or any of the other Transaction Documents has been executed by the Buyer (if any);

(c) Board Minutes:

Copy of the board resolution of the Buyer recording the resolution of the board of directors of the Buyer authorising:

(i) the purchase of the Shares;

(ii) the execution of this Agreement and all relevant Transaction Documents to be executed by the Buyer and the performance by the Buyer of its obligations thereunder; and

(iii) the allotment and issue of the Consideration Shares to Seller;

(d) Other:

(i) consent letters for the Buyer’s directors to be appointed on Completion; and

(ii) a legal opinion from the Buyer's Solicitors, in a form and substance satisfactory to the Seller acting reasonably confirming, inter alia, that the Consideration Shares have been duly authorised and issued and are subject to the Lock up Period (Legal Opinion).

27 

4.2 The Buyer shall at Completion:

(a) pay the Initial Cash Purchase Price in accordance with clause 11;

(b) allot and issue to the Seller such number of Consideration Shares (excluding fractions) as have an aggregate Market Value nearest to (but not less than) £4,864,000 (based on the CAD / GBP exchange rate posted by the Bank of Canada on the day prior to the Completion Date) which shall be credited as fully paid;

(c) deposit with the Escrow Agent certificates in the name of the Seller representing the Escrow Shares;

(d) issue and immediately release to the Seller share certificates (or book entry issuance) in the name of the Seller for the remaining Consideration Shares (having an aggregate Market Value equal to £2,598,000);

(e) enter (or procure entry of) the name of the Seller in the register of shareholders of the Buyer as the holder of the Consideration Shares; and

(f) deliver to the Seller confirmation from the TSXV confirming it has cleared all issues relating to the issuance of the Consideration Shares.

5 Joint obligations of the Buyer and the Seller

The Buyer and the Seller shall join in procuring that:

(a) all reasonable endeavours are used to alter all existing bank mandates in force for the Company as soon as reasonably practicable following Completion (in such manner as the Buyer requires) to reflect the appointments referred to in paragraph 3.2;

(b) all reasonable endeavours are used to complete the formalities in Australia for registering the trade mark known as “xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx into the name of the Company as soon as reasonably practicable following Completion; and

(c) the Transaction Documents are each entered into by the respective parties thereto.

28 

Schedule 4

Warranties

1 Effect of Sale of the Shares

The acquisition of the Shares by the Buyer will not, as far as the Seller is aware:

(a) cause the Company to lose the benefit of any right, asset or privilege it presently enjoys;

(b) relieve any person of any material obligation to the Company, or enable any person to determine any such material obligation, or any material right or material benefit enjoyed by the Company;

(c) result in any customer or supplier materially reducing its business, or materially and adversely changing the terms on which it deals, with the Company; or

(d) result in the loss of, or any default under, any Consent.

2 Accounts

2.1 The Accounts:

(a) comply with the requirements of the Companies Act 2006 and with all current statements of standard accounting practice and financial reporting standards applicable to a company incorporated in the United Kingdom as at the Accounts Date; and

(b) give a true and fair view of:

(i) the state of affairs of the Company as at the Accounts Date;

(ii) the assets and liabilities of the Company as at the Accounts Date; and

(iii) the profit or losses of the Company for the financial year ended on the Accounts Date.

(c) make adequate provision or reserve for all bad and doubtful debts, obsolete or slow-moving inventory;

(d) do not materially overstate the value of current or fixed assets;

(e) do not materially understate any actual liabilities;

(f) (save as the Accounts expressly disclose) are not affected by any extraordinary, exceptional or non-recurring items or any other factor that would make the financial position and results shown by the Accounts misleading in any material respect; and

(g) have been approved and filed in accordance with the requirements of applicable law.

2.2 Since the Accounts Date:

(a) the business of the Company has been carried on in the ordinary course;

(b) there has been no material adverse change in the financial position of the Company;

(c) the Company has continued to pay its creditors as and when the relevant debts have fallen due;

(d) the Company has not borrowed or raised any money or given or taken any form of financial security;

(e) no contract has been entered into on a non-arm's length basis;

29 

(f) there has been no material change in the nature of the business of the Company;

(g) no loan or loan capital has been issued or agreed to be issued, repaid in whole or in part or has become liable to be so repaid by the Company;

(h) the Company has not factored, sold or agreed to sell a debt;

(i) the Company has not made, agreed to make or incurred a commitment to make capital expenditure exceeding in total £25,000; and

(j) the Company has not declared, paid or made or agreed to declare, pay or make any dividend or other distribution.

3 Finance, borrowings and liabilities

3.1 Financial facilities

(a) Details of all:

(i) overdraft, loan, monies borrowed and other financial facilities outstanding or available to the Company; and

(ii) agreements or arrangements for hire or rent, hire-purchase, conditional sale or purchase by way of credit or instalment payment to which the Company is a party (Lease Agreements),

are contained in the Disclosure Letter.

(b) The Company has not factored or discounted any of its debts, or engaged in financing of a type that would not need to be shown or reflected in the Accounts.

(c) The Company has no outstanding loan capital, nor has it lent any money that has not been repaid outside of the ordinary course, and there are no debts owing to the Company other than debts that have arisen in the normal course of the Business.

(d) The debts owing to the Company as reflected in the Accounts (and all debts subsequently recorded in its books since the Accounts Date) have been realised, or will within three months after Completion realise in cash their full amount, and none of those debts has been outstanding for more than two months.

3.2 Security Interests

(a) No Security Interest over any of the Company's assets is now enforceable, and so far as the Seller is aware, there are no circumstances likely to give rise to any such enforcement.

(b) No Security Interest, guarantee, indemnity or other similar arrangement has been entered into, given or agreed to be given by:

(i) the Company or any third party, in each case in respect of any indebtedness or other obligations of the Company; or

(ii) the Company in respect of any indebtedness or other obligations of any third party.

3.3 Details of bank accounts and balances

Details of all bank accounts maintained or used by the Company (including, in each case, the name, address and sort code of the bank with whom the account is kept and the number and nature of the account) and statements showing the balance on each account as at the close of business on the Business Day before the date of this Agreement are attached to the Disclosure Letter.

30 

3.4 Grants, subsidies or other financial assistance in favour of the Company

Any grant or subsidy or other financial assistance or support received, or to be received or which has been applied for, by the Company from any governmental or quasi-governmental or other body or authority is identified in the Disclosure Letter.

3.5 No finder's fees or brokerage payable by the Company

No-one is entitled to receive from the Company any finder's fee, brokerage or commission in connection with the sale of the Shares.

4 The Business and trading

4.1 Standard terms of business

Copies of the Company's standard terms of business for customers and suppliers (if any) are included in the Data Room Documents.

4.2 Customers and suppliers

(a) A list showing the x largest suppliers (Material Suppliers) of the Company by expenditure for the 12 month period preceding Completion, is contained in the Data Room Documents.

(b) The Company does not have any customer which accounts for more than 5% revenue of the Company for the 12 month period preceding Completion.

(c) No Material Supplier has ceased or substantially reduced or expressly indicated to the Seller that it is likely to reduce supplies to the Company in the 12 month period preceding Completion.

4.3 Terms of contracts to which the Company is a party

(a) The Company is not a party to any material contract which:

(i) has been entered into outside the ordinary and normal course of trading;

(ii) is not on arm's length terms;

(iii) imposes any commitment on the Company to obtain or supply goods or services exclusively from or to any person;

(iv) contains any commitment for the supply or purchase of goods or services where the supply, purchase or delivery may take place more than 12 months after the time of fixing of the price;

(v) is incapable of termination by the Company in accordance with its terms on no more than 6 months' notice;

(vi) involves or is likely to involve outstanding expenditure by the Company of more than xxxxxxxx;

(vii) may be terminated as a result of any Change of Control of the Company; or

(viii) involves or is likely to involve the supply of goods or services the aggregate sales value of which will represent in excess of 10% of the turnover of the Company for the preceding financial year.

(b) So far as the Seller is aware, no party is in default of any agreement to which the Company is a party. No notice of termination of any such agreement has been received or served by the Company, and so far as the Seller is aware there are no grounds for the termination, rescission or repudiation of any such agreement.

31 

(c) There is no outstanding indebtedness or other liability (actual or contingent) and no outstanding contract, commitment or arrangement between the Company and the Seller (or any person Connected with the Seller).

4.4 Confidentiality or secrecy arrangements which restrict the Company's activities

The Company is not a party to any confidentiality or secrecy agreement or undertaking or other arrangement which may restrict its use or disclosure of any information.

4.5 Rights in relation to disposal of assets

There is no outstanding agreement or arrangement by virtue of which the Company is under a prospective or contingent liability to dispose of its assets (other than in the ordinary course) or its business.

4.6 Products

(a) The Company has not sold any products which, so far as the Seller is aware, were at the time they were sold or supplied faulty or defective, or which did not comply with:

(i) any warranties or representations expressly or impliedly made by or on behalf of the Company in connection with such products or services; or

(ii) any laws, regulations, standards and requirements applicable to such products or services.

(b) No proceedings have been started, or so far as the Seller is aware, are pending or have been threatened against the Company in which it is claimed that any product sold by the Company is defective, not appropriate for its intended use or has caused bodily injury or material damage to any person or property when applied or used as intended.

(c) There are no disputes between the Company and any of its respective customers, clients or any other third parties in connection with any products sold by the Company.

(d) All ingestible products sold by the Company were on sale in the UK prior to 13 February 2020 and are, so far as the Seller is aware, subject to a Novel Food compliance application.

5 Assets

(a) The Company is the sole legal and beneficial owner of and has exclusive possession and control of all of the fixed assets included in the Accounts (except for those disposed of since the Accounts Date in the ordinary course of business) and any fixed asset acquired by the Company since the Accounts Date.

(b) So far as the Seller is aware, the fixed assets owned by the Company comprise all of the fixed assets necessary for the operation of the Company's business in the manner in which such business is carried on at the date of this Agreement.

(c) The Company neither owns nor leases any electrical office equipment (such as laptops and mobile phones), these are all provided and owned by the Employees.

6 Directors and employees

6.1 Details of employees

(a) The Data Room Documents contain the following information:

(i) name of all employees of the Company (Employees);

(ii) all terms and conditions of employment relating to the Employees;

32 

(iii) copies of all contracts of employment or engagement between the Company and its Employees; and

(iv) copies of all contracts, handbooks, policies and other documents which apply to the Employees and any Workers, identifying which applies to which individual.

(b) No other persons are engaged in the Business or providing services to the Company (such as such as agency workers, workers or self-employed persons).

(c) Every Employee who requires permission to work in the UK has current and appropriate permission to work in the UK.

(d) All Employees have been paid the National Minimum Wage/National Living Wage (at an absolute minimum).

(e) No offer of employment has been made by the Company to any individual which has not yet been accepted or which has been accepted but where the individual’s employment has not yet started.

(f) No Employees or Workers are on secondment, maternity, paternity, adoption, shared parental or other leave or absent due to ill-health or for any other reason.

(g) The acquisition of the Shares by the Buyer or compliance with the terms of this Agreement will not entitle the Director, officers or employees of the Company to terminate their employment or receive any payment or other benefit.

(h) No notice to terminate the contract of employment of any Employee or Worker is pending, outstanding or threatened and so far as the Seller is aware, there are no circumstances likely to give rise to such notice.

(i) The Company has not offered, promised, made or agreed to make a payment, or provided or agreed to provide a benefit to any current or former director, officer, Worker or Employee, or to their dependants in connection with the actual or proposed termination or suspension of employment.

(j) There are no sums owing to or from any current or former Employee or Worker other than reimbursement of expenses, wages for the current salary period and holiday pay for the current holiday year.

(k) The Company has not entered into any agreement or arrangement (whether or not binding) with any Representative Body relating to any person employed or engaged by or in the Company.

(l) The Company has performed in all material respects all material obligations and duties it is required to perform in respect of each Employee and Worker, whether arising under contract, statute, at common law or in equity or under any treaties or laws of the European Union (as any treaties or laws of the European Union apply in England and Wales from time to time, including as retained, amended, extended, re-enacted or otherwise given effect on or after 11pm on 31 January 2020) or otherwise.

6.2 Changes since the Accounts Date

(a) Since the Accounts Date, no material change has been made by the Company to the terms of employment of any of its directors or Employees.

(b) Since the Accounts Date, no Employee has given or received notice of termination or left the Company, and no amount due to or in respect of any Employee or former employee of the Company is in arrear and unpaid (other than their salary and benefits for the month current at the date of this Agreement and in respect of the reimbursement of expenses).

33 

(c) Since the Accounts Date, no offers of employment have been made by the Company or the Seller.

6.3 Disputes

(a) The Company is not involved in any legal proceedings, material dispute, disciplinary or grievance investigation or procedure with any Employees or former employees of the Company.

(b) No Proceedings are ongoing and, so far as the Seller is aware, no Proceedings have been threatened or are pending by or against the Company, any Director or any person for whose acts the Company may be vicariously liable and so far as the Seller is aware there are no circumstances likely to give rise to any such Proceedings. In this paragraph 6.3(b) Proceedings means:

(i) any litigation or administrative, mediation, arbitration or other proceedings, or any claims, actions or hearings before any court, tribunal or any governmental, regulatory or similar body, or any department, board or agency (except for debt collection in the normal course of business); or

(ii) any dispute with, or any investigation, inquiry or enforcement proceedings by, any governmental, regulatory or similar body or agency in any jurisdiction.

6.4 Trade unions and collective issues

The Company does not recognise any Representative Body.

6.5 Share options/incentive plans

Save as set out in the Junior Employment Agreement Variations, the Company is not a party to, bound by or proposing to introduce any share incentive scheme, share option scheme, commission, profit sharing, bonus or other incentive scheme for any director, officer or Employee. The Company does not have and is not proposing to establish an employee benefit trust.

7 Pension arrangements

(a) Definitions

The following definitions are used in this paragraph 7:

Money Purchase Benefits means money purchase benefits as defined in section 181 of the Pension Schemes Act 1993

Occupational Money Purchase Scheme means the National Employment Savings Trust which relates to the Company

Relevant Benefits means any benefits under a pension scheme within the meaning of section 150 of the Finance Act 2004 other than a scheme or arrangement which provides benefits solely in relation to ill-health or incapacity

(b) Except for the Occupational Money Purchase Scheme, there is no obligation, agreement or arrangement, contractual commitment or custom or practice to or in respect of which the Company contributes, or has contributed, or is or has become liable to satisfy, under which Relevant Benefits are or may be payable.

(c) Details of the Occupational Money Purchase Scheme, including details of the amounts or rates at which the Company and its employees contribute to the Occupational Money Purchase Scheme, are contained in the Data Room Documents.

(d) Save for lump sum benefits on death in service, all benefits payable under the Occupational Money Purchase Scheme are Money Purchase Benefits.

34 

(e) The Occupational Money Purchase Scheme is a registered pension scheme for the purposes of Part 4 of the Finance Act 2004.

(f) No contribution notice or financial support direction has been issued by the Pensions Regulator against or involving the Company (or any person connected or associated with the company), nor has the Pensions Regulator indicated it is considering making such an order nor is the Seller aware that there are any facts or circumstances which the Seller is aware that would be likely to lead to the Pensions Regulator making or considering making such an order.

(g) The Company has complied in all material respects with its automatic enrolment obligations as required by the Pensions Act 2008 and associated legislation.

8 Information technology

(a) The Company does not use any computer software other than standard off the shelf packages generally available to the public (Standard Software) and no Standard Software used by the Company has been materially modified. So far as the Seller is aware, the Standard Software is adequate for the purposes of the Business as it is operated at and before the date of this Agreement.

(b) The Company possesses all necessary licences with respect to its use of Standard Software and, so far as the Seller is aware, no licence terms have been breached.

(c) Each element of the data (including any databases) and software (including associated user manuals, object code and source code) owned, used or held for use by the Company in relation to the Business:

(i) is functioning adequately;

(ii) is not defective in any material respect, and reasonable steps have been taken to ensure the IT Systems contain no software virus, malware or software vulnerability; and

(iii) has sufficient capacity, scalability and performance to meet the current peak volume requirements of the Business as carried on at Completion.

9 Intellectual property

9.1 Definitions

In this paragraph 9, unless the context otherwise requires:

Company IP means all Intellectual Property owned or otherwise used by the Company in connection with the Business as set out in Schedule 11.

Intellectual Property means patents, registered designs, trade marks and service marks (whether registered or not and including applications for any of the foregoing), copyright, design right, trading names, rights in and to confidential information and know-how rights in and to databases (excluding for the avoidance any third party software licences).

9.2 Company IP

(a) So far as the Seller is aware, the Company IP is in full force and effect and not subject to any application for cancellation, amendment, licence of right or compulsory licence.

(b) So far as the Seller is aware, no item of Company IP is the subject of a claim or opposition from any person as to title, validity, enforceability or entitlement and, so far as the Seller is aware, there is no litigation or other proceedings (whether legal or administrative) pending involving any of the Company IP or any circumstances likely to give rise to any such proceedings.

35 

(c) All application, renewal and other official statutory and regulatory fees rendered to and received by the Company before the date of this Agreement relating to the administration of the Company IP or for the protection or enforcement of the Company IP have been duly paid and all steps have been taken for their maintenance and protection.

(d) The Company is the sole legal and beneficial owner of the Company IP listed in Schedule 11, free from Security Interests.

(e) The Company does not require any Intellectual Property other than the Company IP in order to carry on the Business as it is conducted at the date of this Agreement.

(f) The Company IP is valid, subsisting and enforceable and nothing has been done, or not been done, as a result of which any of the Company IP has ceased, or so far as the Seller is aware, is likely to cease to be valid, subsisting or enforceable.

9.3 No disposals of Intellectual Property since the Accounts Date

Since the Accounts Date, the Company has not sold or otherwise disposed of any Intellectual Property owned or used by the Company.

9.4 No infringement of Intellectual Property of third parties

So far as the Seller is aware, the Company has not infringed the Intellectual Property of any other person.

9.5 No infringement of Company IP

So far as the Seller is aware, there is, and within the past 12 months there has been, no actual or threatened infringement (including misuse of confidential information) or any event likely to constitute an infringement or breach by any third party of any of the Company IP.

9.6 Licences out to third parties

The Company has not granted and is not obliged to grant any licences under any Intellectual Property owned by it or licensed to it to any person.

10 Data protection

(a) The Company has not received a notice or allegation from any relevant data protection supervisory authority, a data subject or other individual alleging non-compliance with the Data Protection Laws.

(b) So far as the Seller is aware, the Company has complied in all material respects with the requirements of all applicable legislation concerning rights in respect of privacy and personal data.

(c) From the Company’s incorporation to the date of this Agreement, the Company has not:

(i) suffered any event having an actual adverse effect on the security of the IT Systems (Security Incident); or

(ii) breached any applicable regulatory requirements (including any reporting requirement) in relation to any Security Incident.

11 Property, environmental and health and safety

(a) Materially complete and accurate copies of the relevant licence pertaining to the Property are included in the Data Room Documents.

(b) The Property is:

36 

(i) the only real property owned, occupied or used by the Company for the Business; and

(ii) used and occupied solely for the Business.

(c) The Company has no contingent liability or obligation in respect of any real property anywhere in the world, whether freehold, leasehold, licensed or occupied, other than the Property.

(d) The details of the Property set out in Schedule 7 are complete and accurate in all material respects.

(e) The Current Use of the Property is set out in Schedule 7 and is authorised under the applicable law and regulations and any permissions authorising that use are unconditional, permanent and not personal. Where applicable, the Current Use is in accordance with the provisions of the relevant Licence.

(f) The Company is not required to obtain any EHS Permits.

(g) So far as the Seller is aware, the Company has at all times operated in material compliance with: (i) all EHS Laws in force at the relevant time and (ii) all of its obligations under the Licence.

12 Litigation and disputes

(a) Apart from (if relevant) the collection of debts in the ordinary course of the Business (involving debts of not more than xxxxxxxx in any individual case or xxxxxxxx in aggregate), neither the Company nor the Seller is engaged in any litigation, arbitration, mediation, prosecution or other legal proceedings or in any proceedings or hearings before any Authority, and so far as the Seller is aware, no such matters are pending.

(b) There is no outstanding judgment, order, decree, arbitral or mediation award or decision of any court, tribunal, arbitrator or Authority against the Company.

(c) The Company has not received notification that any investigation or enquiry is being or has been conducted by any Authority in respect of its affairs.

13 Competition matters

(a) The Company has not been notified of any investigation for any alleged non-compliance or infringement of such Competition Laws.

(b) So far as the Seller is aware the Company is not subject to any prohibition, order, condition, undertaking, assurance or similar measure or obligation imposed by or under any Competition Laws.

(c) For the purposes of this paragraph 13 the term Competition Laws means any applicable laws, regulations, rules dealing with anti-competitive agreements or concerted practices (as contained in Article 101 of the Treaty on the Functioning of the EU or the Chapter I prohibition in the Competition Act 1998 or equivalent national laws) or abuse of dominant position (as contained in Article 102 of the Treaty on the Functioning of the EU or the Chapter II prohibition in the Competition Act 1998 or equivalent national laws).

13.2 Registers and minute books

All registers required by law to the kept by the Company:

(a) are in its possession or otherwise under its control;

(b) have been properly prepared and maintained and do not contain any material inaccuracies or discrepancies;

37 

(c) contain a materially up to date and accurate record of the matters which are required by law to be dealt with in them; and

(d) comply in all material respects with any applicable requirements of the CA 2006,

and the Company has not received any application or request or notice or allegation that any of the registers are incorrect or should be rectified.

14 Bribery Act 2010

Neither the Company nor, so far as the Seller is aware, any of its officers, directors or employees has at any time prior to the date of this Agreement committed any offence under the Bribery Act 2010.

15 Criminal Finances Act 2017

No person acting in the capacity of a person associated with the Company (within the meaning of section 44(4) of the Criminal Finances Act 2017) (an Associated Person) has at any time prior to entering into this Agreement committed any UK tax evasion facilitation offence within the meaning of section 45(5) of the Criminal Finances Act 2017 or any foreign tax evasion facilitation offence within the meaning of section 46(6) of the Criminal Finances Act 2017.

16 Compliance and consents

(a) To the best of the Seller's knowledge, the Company has at all times conducted its business materially in accordance with, and has acted in material compliance with all laws applicable to its activities.

(b) No Authority has issued any written notice stating that the Company is not in compliance with any Law in any material respect, nor to the Seller's knowledge is any investigation or enforcement action threatened or ongoing.

(c) Neither the Company nor (so far as the Seller is aware) its Employees (current or past) have been convicted of any offence in relation to the Business of the Company.

(d) The Company holds all licences, consents, permits and authorities required to carry on the Business in the places and in the manner in which it is carried on at Completion (Consents). Details of the Consents and copies of all related documentation are contained in the Data Room.

(e) Each of the Consents is valid and subsisting and as far as the Seller is aware the Company is not in breach of the terms or conditions of the Consents (or any of them) and so far as the Seller is aware, there is no reason why any of the Consents are likely to be revoked or suspended (in whole or in part) or may not be renewed on the same terms.

17 Insurance

The Company does not maintain any insurance.

18 Constitutional

18.1 Details concerning the Company

(a) The Company is a private company limited by shares properly incorporated and validly existing under the laws of England and Wales.

(b) The Shares constitute 80% of the issued share capital of the Company.

(c) All the information in Schedule 1 (The Company) is accurate in all material respects.

38 

(d) The Company has not, since incorporation, reduced its share capital, redeemed or repaid any share capital, purchased or forfeited any of its shares of agreed to do any of these things.

(e) The Company has not received any notice from the Registrar of Companies of any instances of non-compliance with section 1072 of the Companies Act 2006.

(f) The copy of the current articles of association of the Company included in the Data Room Documents is true and complete in all respects.

(g) The Company has at all material times complied in all material respects with this constitution as in force at the relevant time.

18.2 Interests of the Company in other entities

(a) Save as set out in Schedule 1 (The Company), the Company:

(i) does not own, and has not agreed to acquire, any shares, investment, loan capital or any other securities or interest in any body corporate;

(ii) has not, at any time, had any subsidiaries or subsidiary undertakings (within the meaning of section 1162 of the CA 2006);

(iii) is not, and has not agreed to become, a member of any partnership, joint venture, consortium or other unincorporated association or arrangement for sharing profit or losses;

(iv) has no branch, agency, place of business or permanent establishment outside the United Kingdom; or

(v) has not purchased, redeemed, reduced, repaid or forfeited any of its share capital.

(b) No person has any right to require at any time the transfer, creation, issue or allotment of any share, loan capital or other securities of the Company (or any rights or interest in them), and no person has agreed to confer or has claimed any such right.

19 Insolvency of Company and Seller

(a) No order has been made and no resolution has been proposed or passed for the winding up of the Company and so far as the Seller is aware no petition has been presented for the purpose of winding up the Company.

(b) No application has been issued or order made for the provisional liquidation of the Company or the appointment of a provisional liquidator in respect of the Company.

(c) No administration order has been made in respect of the Company and so far as the Seller is aware no petition has been presented for such an order and no administrator has been appointed in respect of the Company.

(d) No receiver (which expression will include an administrative receiver) has been appointed in respect of the Company or in respect of all or any part of its assets.

(e) No voluntary arrangement has been proposed or approved under Part I of the Insolvency Act 1986 in respect of the Company.

(f) No moratorium has been proposed or approved under Part A1 of the Insolvency Act 1986 in respect of the Company.

39 

(g) No restructuring plan has been proposed or approved under Part 26A of the Companies Act 2006 in respect of the Company.

(h) No event analogous to any of the circumstances mentioned in any of the foregoing sub paragraphs of this paragraph 19 has occurred in relation to the Company outside England.

(i) The Seller is not unable to pay his debts within the meaning of the Insolvency Act 1986.

20 COVID-19

(a) In this paragraph 20 the following definitions shall apply:

CJRS: the Coronavirus Job Retention Scheme established and governed by the CJRS Treasury Directions.

COVID-19: the 2019 outbreak of the novel coronavirus disease.

Flexible Furlough: a period of Furlough during which employees also work on a part-time basis, and Flexibly Furloughed shall be interpreted accordingly.

Furlough: a temporary period of leave which satisfies the terms of the CJRS during which employees are not working but are kept on the payroll, and Furloughed shall be interpreted accordingly.

(b) The Company has at all times and in all material respects complied and conducted its business in accordance with all applicable laws and regulations that have been introduced in response to, or to manage the spread of, COVID-19.

(c) The Company has not participated in any corporate borrowing schemes or other business support measures facilitated by the UK government in connection with COVID-19 (COVID-19 Facilities), including (without limitation) the Coronavirus Business Interruption Loan Scheme, Coronavirus Bounce Bank Loans, the Coronavirus Large Business Interruption Loan Scheme, the Covid Corporate Financing Facility and the Coronavirus Future Fund.

(d) No Employees or Workers have been absent at any time owing to COVID-19, or measures taken in connection with it.

(e) No Employees or Workers were Furloughed, Flexibly Furloughed or had their working arrangements or pay changed as a result of COVID-19.

(f) COVID-19 has had no impact on the payment obligations of the Company under the Licence.

40 

Schedule 5

Limitations on liability

1 Definitions

In this Schedule 5, unless the context otherwise requires:

Claims means all and any claims against the Seller under this Agreement, including any claim for breach of contract, misrepresentation or indemnification, or under any common law or statutory rights (insofar as is reasonable), covenant or undertaking in relation to any matter relating to this Agreement and includes Warranty Claims but excluding Tax Claims save where expressly set out in the remainder of this Schedule 5

Expenses means reasonable and proper third party costs and expenses

Third Party Claim means any claim by, or alleged liability to, a third party which may give rise to a Claim

2 Maximum liability

2.1 Subject to paragraph 9.2, the maximum aggregate liability of the Seller for all Claims (which shall include Tax Claims) and Indemnity Claims, including Expenses and the costs and expenses reasonably and properly incurred by the Buyer and/or any member of the Buyer's Group in bringing a Claim and/or Indemnity shall not exceed xxxxxxxxxx.

3 Small claims and threshold

3.1 The Seller shall not be liable for any individual Claim (including any claim under the Tax Warranties) unless the amount of such liability, following application of the other provisions of this schedule, exceeds xxxxxxxx.

3.2 For the purposes of paragraph 3.1, Claims (including any claim under the Tax Warranties) of any value arising from the same subject, or consequent on, or attributable to, one source or original cause, shall not be aggregated.

3.3 Subject to paragraph 3.1, the Seller shall not be liable for any Claim (including any claim under the Tax Warranties) unless the aggregate liability for all Claims (including all claims under the Tax Warranties), following application of the other provisions of this schedule, exceeds xxxxxxxx in which case the Seller shall be liable for the whole amount of the Claim and not just the amount above the threshold specified in this paragraph 3.3.

4 Time limits

4.1 The Seller shall cease to be liable:

(a) for any Claim under the Tax Warranties or under the Tax Covenant, unless the Buyer validly serves notice of the Claim on the Seller (specifying in reasonable detail the nature of the Claim and, so far as is practicable, the amount claimed in respect of it) on or before the date that is xxxxxxxx from Completion; and

(b) for any other Claim, unless the Buyer validly serves notice of the Claim on the Seller (specifying in reasonable detail the nature of the Claim and, so far as is practicable, the amount claimed in respect of it) on or before the date that is xxxxxxxxxxxxxxxxxxxxxxxx.

4.2 A Claim (other than a Tax Claim) notified in accordance with paragraph 4.1 and not satisfied, settled or withdrawn will be unenforceable against the Seller on the expiry of the period of 12 months starting on the day of notification of the Claim, unless proceedings (including particulars of claim) in respect of such Claim have been both issued and validly served in accordance with clause 12 (Notices) on the Seller within that period.

41 

5 Rights to information

5.1 If the Buyer gives any notice under paragraphs 4.1, 9 or 11, the Buyer shall, and shall ensure that the Company shall:

(a) allow the Seller and his duly authorised representatives and professional advisers access for the purposes of the relevant Claim or Third Party Claim to the premises and personnel of the Buyer and the Company, and to any relevant records and information of the Buyer or the Company and permit the Seller and those representatives and advisers to make copies (at their own cost) of those records and information; and

(b) if so requested by the Seller, procure that the auditors of the Company at the relevant time(s) grant to the firm of accountants appointed by the Seller access to their audit working papers in respect of audits of the Company's accounts for any relevant financial year in connection with the relevant Claim or Third Party Claim.

5.2 Access under paragraph 5.1:

(a) will be given only at reasonable times during normal business hours and on reasonable notice; and

(b) will not be provided to any records or documents which are protected by solicitor-client privilege or legal professional privilege.

6 Buyer's knowledge

6.1 The Seller shall not be liable for any Claim (including any claim under the Tax Warranties) where and to the extent that the Claim arises out of or in connection with any fact, matter or circumstance which is within the actual knowledge of the Buyer or its officers or employees at the date of this Agreement (or in the case of a Claim relating to a breach of the Warranties given at Completion in respect of matters that have arisen after the date of this Agreement, such actual knowledge of the aforementioned at Completion, other than as a result of the application of clause 6.2(b)) or is purposefully triggered by the Buyer or is made in bad faith.

6.2 The Buyer warrants that as at the date of this Agreement it has no actual knowledge of any fact, matter or circumstance which constitutes or may constitute a breach of Warranty and/or may give rise to a Claim.

6.3 For the avoidance of doubt, the limitations in this paragraph 6 shall not apply to those matters indemnified in clause 8.

7 General limitations

7.1 The Seller shall not be liable for any Claim and accordingly no Claim may be brought if:

(a) the Buyer or the Company or any member of the Buyer's Group is entitled to claim indemnity against any loss or damage under the terms of any insurance policy for the time being in force or which could have been so recovered under the policies of insurance of the Company in force at the date of this Agreement had they been maintained in force for the benefit of the Company and/or the Buyer, in each case in respect of the matter giving rise to the Claim;

(b) the facts, matters or circumstances have been taken into account in the calculation of the Purchase Price or provided for in the Accounts or the Completion Accounts;

(c) the Claim arises wholly or partly out of or in connection with, or the amount of the Claim is increased by:

(i) any fact, matter or circumstance provided for, or contemplated by, this Agreement or any other Transaction Document or arising from the implementation of this Agreement or any other Transaction Document;

42 

(ii) any voluntary act, omission, transaction or arrangement carried out by, at the request of or with the approval of the Buyer or any member of the Buyer's Group or any of their respective officers, employees or agents before or at Completion;

(iii) any voluntary act, omission, transaction or arrangement of the Buyer or the Company or any other member of the Buyer's Group or any of their respective officers, employees, agents or successors in title after Completion;

(iv) any breach by the Buyer of any of its obligations under this Agreement or any other Transaction Document;

(v) any reorganisation or change in ownership of the Buyer or any member of the Buyer's Group on or after Completion;

(vi) any passing of or change in any statutory or other binding or advisory legislative or regulatory provision after the date of this Agreement;

(vii) any change after the date of this Agreement in the principles, policies or methods used in the preparation of the audited accounts of the Company;

(viii) any change on or after Completion to the accounting reference date of the Company;

(d) the loss or liability suffered or incurred by the Buyer to which the Claim relates is contingent, future or unascertainable until the Buyer actually suffers the loss or incurs the liability in question; or

(e) the loss or liability to which the Claim relates has been or is made good or otherwise compensated for at no expense to the Buyer or any member of the Buyer's Group.

7.2 The Buyer shall not be entitled to claim for any punitive, indirect or consequential loss or for any loss calculated by reference to profits (whether direct or indirect), income, production or accruals or loss of such profits, income, production or accruals or loss of business opportunities or anticipated savings in respect of any Claim.

8 Subsequent recovery from third party

The Buyer shall reimburse the Seller forthwith an amount equal to any sum paid by the Seller in respect of any Claim which is subsequently recovered by or paid to the Buyer, the Company, or any other member of the Buyer's Group by any third party in respect of the matter giving rise to the Claim (less any Expenses incurred in making such recovery, but to avoid doubt including any interest received by the Buyer from such third party as part of such recovery).

9 Set off

9.1 Subject to the right of set off in relation to the reduction in Purchase Price contained in clause 4.5, to the extent of any deduction or withholding required by law, the Buyer waives and relinquishes any right of set off or counterclaim, deduction or retention which the Buyer might otherwise have had in respect of any Claim against or out of any payments which the Buyer may be obliged to make (or procure to be made) to the Seller under this Agreement or otherwise.

9.2 Following the application of the other provisions of this schedule, where there is a Claim (including any Tax Claim) and/or Indemnity Claim, the Buyer:

(a) shall be first required to recover any amounts in respect of such Claim and/or Indemnity Claim by way of its right of set off under clause 4.5 of this Agreement; and

(b) following the application of paragraph 9.2(a), to the extent there are any further amounts to be recovered by the Buyer in respect of a Claim and/or Indemnity Claim, the Buyer shall be free to pursue other means of recovery (subject to the other terms of this Agreement).

43 

10 Claims against third party

10.1 Where the Buyer or the Company or any member of the Buyer's Group may be entitled (whether by reason of insurance, payment, discount, credit, relief or otherwise) to recover from a third party any sum for any damage or liability which is or could be the subject of a Claim (Third Party Recovery), the Buyer:

(a) shall notify the Seller of the Third Party Recovery as soon as practicable, and in any event within 5 Business Days, following the Buyer or the Company or any other member of the Buyer's Group becoming aware that it may be entitled to make the Third Party Recovery, and in any event prior to taking any material step to enforce, compromise, settle or waive any right in relation to that Third Party Recovery;

(b) shall provide the Seller with such information as the Seller may reasonably require relating to the Third Party Recovery and shall keep the Seller fully informed of any material development in the conduct of the Third Party Recovery;

(c) shall not (and shall procure that the Company and each other member of the Buyer's Group do not) compromise, settle or waive any right in relation to that Third Party Recovery without the written consent of the Seller (such consent not to be unreasonably withheld); and

(d) shall first take steps or procure that the relevant member of the Buyer's Group first takes steps (including the commencement and prosecution of proceedings) to enforce such Third Party Recovery as the Seller may reasonably require before taking any steps to pursue the Claim against the Seller.

10.2 Whether before or after the Seller discharges any Claim, the Buyer shall, if so required by the Seller and subject to the Seller paying the Buyer's Expenses:

(a) take, and procure that the Company and each other member of the Buyer's Group take, all steps (whether by way of claim against its insurers or otherwise) in relation to such Claim as the Seller may reasonably require to enforce such Third Party Recovery, keep the Seller informed to the Seller's reasonable satisfaction of the progress of any action taken and pay over to the Seller all amounts recovered up to the amount of the relevant Claim previously discharged by it/them; and

(b) procure that the Seller is placed in a position to take over the conduct of all negotiations and proceedings arising in relation to the Third Party Recovery, albeit that the Seller, having taken over such Third Party Recovery, shall provide the Buyer with such information as the Buyer may reasonably require relating to the Third Party Recovery and shall keep the Buyer fully informed of any material development in the conduct of the Third Party Recovery.

10.3 The Buyer shall not be required to take any action under clauses 10.1 and 10.2 if to do so would cause damage to the goodwill of the Company which would reasonably be expected to cause a material adverse change in the financial position of the Company as a result.

10.4 Any Claim will be limited (in addition to the other limitations on the Seller's liability referred to in this schedule) to the amount by which the loss or damage suffered by the Buyer as a result of such breach exceeds the amount (if any) so recovered by way of the Third Party Recovery.

11 Assignment of Third Party Recovery

Where the Seller has discharged any Claim and the Buyer or the Company or any other member of the Buyer's Group may be entitled to make a Third Party Recovery in respect of the loss or liability in respect of which the Claim was made and discharged, the Buyer shall, if requested in writing by the Seller (and subject to the Seller paying the Buyer's Expenses) assign or procure the assignment to the Seller of any right of the Buyer, the Company or any other member of the Buyer's Group to make the Third Party Recovery albeit that the Seller, having taken over such Third Party Recovery, shall provide the Buyer with such information as the Buyer may reasonably require relating to the Third Party Recovery and shall keep the Buyer fully informed of any material development in the conduct of the Third Party Recovery.

44 

12 Claims by third party

12.1 If grounds for any Third Party Claim arise the Buyer:

(a) shall notify the Seller of the Third Party Claim without delay within 10 Business Days of the Buyer or the Company becoming aware of the Third Party Claim, and in any event prior to taking any material step to defend the Third Party Claim or to compromise, settle or waive any right in relation to the Third Party Claim;

(b) shall provide the Seller with such information as the Seller may reasonably require relating to the Third Party Claim and shall keep the Seller fully informed of any material development in the conduct of the Third Party Claim;

(c) shall not (and shall procure that the Company and each member of the Buyer's Group do not) compromise, settle or waive any right or admit any liability in relation to that Third Party Claim without the written consent of the Seller (such consent not to be unreasonably withheld); and

(d) shall, if requested in writing by the Seller (and subject to the Seller paying the Buyer's Expenses), promptly:

(i) take, and procure that the Company and each member of the Buyer's Group take, such action as the Seller may reasonably request to avoid, dispute, resist, appeal, defend or compromise the Third Party Claim; and

(ii) procure that the Seller is placed in a position to take over the conduct of all negotiations and proceedings arising in connection with the Third Party Claim albeit that the Seller, having taken over such Third Party Claim, shall provide the Buyer with such information as the Buyer may reasonably require relating to the Third Party Claim and shall keep the Buyer fully informed of any material development in the conduct of the Third Party Claim.

12.2 The Buyer shall not be required to take any action under clause 12.1 if to do so would cause damage to the goodwill of the Company which would reasonably be expected to cause a material adverse change in the financial position of the Company as a result.

12.3 The Seller shall not be liable for any Claim in relation to which the Buyer fails to comply with its obligations under this paragraph 12.

13 Duty to mitigate

Nothing in this Agreement shall be deemed to relieve the Buyer from its common law duty to mitigate its loss.

14 No double recovery

Neither the Buyer nor any member of the Buyer's Group shall be entitled to recover damages or any other amount in respect of any Claim (which shall include any Tax Claim) or otherwise obtain reimbursement or restitution more than once in respect of the same matter, loss or liability and for this purpose any payment by the Seller under the Tax Covenant shall be deemed to satisfy any Warranty Claim in respect of the same matter and vice versa.

15 Remedies and rescission

15.1 The sole remedy of the Buyer for any breach of this Agreement shall be an action for damages.

15.2 Save as specifically set out in this Agreement, neither party shall be entitled to rescind or terminate this Agreement in any circumstances whatsoever whether before or after Completion.

45 

15.3 The provisions of this schedule shall remain in full force and be fully applicable to all circumstances and, in particular, shall not be discharged by any breach of this Agreement.

15.4 Notwithstanding any other provision, nothing in this schedule limits the rights of the Buyer in respect of fraud or fraudulent misrepresentation.

16 Application to third parties

Any third party which is entitled under the terms of this Agreement to claim against the Seller shall be subject to this schedule as if it were the Buyer.

46 

Schedule 6

Completion Accounts

Part 1 - Definitions

1 Definitions

In this Schedule 6, unless the context otherwise requires:

Base Estimated Completion Cash means xxxxxxxx

Base Estimated Completion Debt means xxxxxxxx

Base Estimated Completion Working Capital means xxxxxxxx

Completion Accounts means the balance sheet of the Company as at the Completion Accounts Reference Date to be prepared and agreed or determined in accordance with Part 3 of this Schedule 6 and the pro forma for which is set out at Part 5 of this Schedule 6

Completion Accounts Reference Date means the close of business on the day prior to the Completion Date

Completion Cash means the aggregate value of the cash in hand held by or on behalf of, or credited to any account with any bank or other financial institution of, the Company plus an amount equal to 0.8 multiplied by the aggregate amount of cash held on hand at the payment processor in reserve in each case as at the Completion Accounts Reference Date

Completion Debt means the aggregate of all outstanding Debt owed by the Company at the Completion Accounts Reference Date

Completion Working Capital means the aggregate value of inventory, trade debtors, VAT payables, trade creditors, employee wages and benefits and other current liabilities that existed as at the Completion Accounts Reference Date and calculated in accordance with Schedule 6

Debt means, in relation to the Company:

(a) obligations under any conditional sale, title retention, forward sale or purchase or any similar agreement or arrangement creating obligations with respect to the deferred purchase price of property (other than customary trade credit given in the ordinary course of trading);

(b) indebtedness under any hire purchase agreement or finance lease (whether for land, machinery, equipment or otherwise) which is a liability under accounting standards;

(c) any indebtedness for monies borrowed or raised under any other transaction that has the commercial effect of borrowing;

(d) any preference shares or element of preference shares shown as liabilities as required by applicable accounting standards;

(e) all obligations evidenced by bonds, debentures, notes, or other similar instruments and all reimbursement obligations in respect of letters of credit or banker's acceptances; and

(f) all unpaid accrued interest on any borrowings or indebtedness referred to in the paragraphs above;

(g) any obligation guaranteeing any obligation of any other person that constitutes Debt under any of paragraphs (a) to (e) (inclusive),

47 

but excluding, for the avoidance of doubt, any obligations to trade creditors incurred in the ordinary course of business, any trade payables incurred in the ordinary course of business, and any Security Interests over goods acquired by the Company in favour of the supplier of such goods arising in the ordinary course of business

draft Completion Accounts has the meaning given to it in paragraph 3 of Part 3 of this Schedule 6

Further Review Period has the meaning given to it in paragraph 5.1 of Part 3 of this Schedule 6

Price Adjustment Experts means the firm of independent chartered accountants selected or nominated in accordance with paragraph 6.1 of Part 3 of this Schedule 6

Review Period has the meaning given to it in paragraph 4 of Part 3 of this Schedule 6

48 

Part 2 - Purchase price adjustment

1 Completion Accounts

1.1 The Completion Accounts shall be prepared and agreed or determined under Part 3 of this Schedule 6.

1.2 The Completion Accounts, as agreed or determined under Part 3 of this Schedule 6, shall be:

(a) the Completion Accounts for the purposes of this Agreement; and

(b) final and binding on the Buyer and the Seller.

1.3 The Completion Cash, Completion Debt and Completion Working Capital shall be the relevant amount specified in the Completion Accounts.

1.4 The provisions of this Schedule 6 shall be interpreted so as to avoid double counting (whether positive or negative) of any item to be included in the Completion Accounts.

2 Purchase Price adjustment

2.1 If:

(a) the Completion Cash is greater than the Completion Debt, the Purchase Price shall be increased by (and the Buyer shall pay to the Seller an amount equal to) the excess; or

(b) the Completion Cash is less than the Completion Debt, the Purchase Price shall be reduced by (and the Seller shall repay to the Buyer an amount equal to) the shortfall.

2.2 If the Completion Working Capital:

(a) is greater than the Base Estimated Completion Working Capital, the Purchase Price shall be increased by (and the Buyer shall pay to the Seller an amount equal to) the excess multiplied by 0.8; or

(b) is less than the Base Estimated Completion Working Capital, the Purchase Price shall be reduced by (and the Seller shall repay to the Buyer an amount equal to) the shortfall multiplied by 0.8.

2.3 Any shortfall to be paid by the Seller under this paragraph 2 shall include, if any Base Estimated Completion Working Capital is greater than zero any amount by which the relevant Completion Working Capital is less than zero, so that, by way of example, if the target figure were £500,000 and the figure agreed or determined were minus £100,000, the amount payable by way of shortfall would be £600,000.

2.4 Estimates of the Completion Cash (being the Base Estimated Completion Cash) and Completion Debt (being the Base Estimated Completion Debt) as at the date of this Agreement have been provided in the agreed form spreadsheet at Schedule 12.

3 Payment

Any sum payable under paragraph 2, together with any interest calculated under paragraph 4 below, shall be paid by the relevant party within 3 Business Days of the date on which the Completion Accounts are agreed or determined under Part 3 of this Schedule 6, save and except the sum payable, if applicable, based on the cash held in reserve at the payment processor of the Company, shall only be payable when released by the payment processor to the Company.

4 Default interest on payments

Any payment to be made under paragraph 2 shall include interest on it at the rate of 3% over the base rate for the time being of Xxxxxxxxxxxxxxxxx from, and excluding, the due date for payment up to, and including, the date of actual payment (both before and after judgment), calculated on the basis of a year of 365 days and compounded quarterly on 31 March, 30 June, 30 September and 31 December in each year.

49 

Part 3 - Preparation and agreement/determination of the Completion Accounts

1 Format of the Completion Accounts

The Completion Accounts shall be prepared in the format of the proforma set out in Part 5 of this Schedule 6.

2 Accounting policies and stock take

2.1 The Completion Accounts shall be prepared in accordance with, and in the order shown below:

(a) the specific accounting policies set out in Part 4 of this Schedule 6 (if any);

(b) to the extent not inconsistent with paragraph 2.1(a), using the same accounting principles, policies, practices, evaluation rules and procedures, methods and bases (including as to consolidation and in respect of the exercise of management judgment) adopted by the Accounts (Accounting Policies), applied on a consistent basis; and

(c) to the extent not inconsistent with paragraphs 2.1(a) and/or 2.1(b), in accordance with FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland including the provisions of Section 1A "Small Entities" and the Companies Act 2006 (GAAP) as at the Completion Date.

2.2 The Completion Accounts shall be prepared as at the Completion Accounts Reference Date.

3 Preparation and delivery of the Completion Accounts

The Buyer shall deliver to the Seller a draft of the Completion Accounts (draft Completion Accounts) within 20 Business Days after the Completion Date.

4 Agreement or deemed agreement of the Completion Accounts

If during the period of 20 Business Days after delivery of the draft Completion Accounts on the Seller in accordance with paragraph 3 (Review Period):

(a) the Seller notifies the Buyer in writing that no adjustment needs to be made to the draft Completion Accounts; or

(b) the Seller does not notify the Buyer of a list of proposed adjustments to the draft Completion Accounts,

the draft Completion Accounts shall be final and binding on the Buyer and the Seller for the purposes of this Agreement:

(c) in the case of paragraph 4(a), on the date of such notification; or

(d) in the case of paragraph 4(b), on the date of expiry of the Review Period.

5 Disagreement relating to the Completion Accounts

5.1 If during the Review Period the Seller notifies the Buyer, in writing:

(a) that he disagrees with the draft Completion Accounts or any part of them; and

(b) of a final and exhaustive list of adjustments he considers need to be made to the draft Completion Accounts (together with the reasons for such adjustments),

50 

the Buyer and the Seller shall attempt in good faith to agree the draft Completion Accounts within a period of 20 Business Days from, and excluding the date of such notification or such longer period as the Buyer and the Seller may agree in writing (Further Review Period).

5.2 If during the Further Review Period the Buyer and the Seller agree, in writing, on all adjustments to be made to the Completion Accounts, they shall jointly incorporate such adjustments into the draft Completion Accounts. The draft Completion Accounts, as so adjusted, shall be final and binding on the Buyer and the Seller for the purposes of this Agreement on the date of such agreement in writing.

5.3 If the Buyer and the Seller are unable to so agree during the Further Review Period, the Buyer or the Seller may, by written notice to the other require that the draft Completion Accounts be referred for expert determination under paragraph 6 below.

6 Expert determination of the Completion Accounts

6.1 Any matters in dispute relating to the Completion Accounts which are to be determined under this paragraph 6 shall be referred to:

(a) the firm of independent chartered accountants, or a chartered accountant within a firm that has expertise in preparing completion accounts and/or advising on disputes in relation to the preparation and agreement/determination of completion accounts, agreed between the Buyer and the Seller within 10 Business Days of a request by either of them to the other, or, failing such agreement within such time;

(b) the firm of independent chartered accountants nominated by the President for the time being of the Institute of Chartered Accountants in England and Wales (ICAEW) (or by such person as the President specifies for the purpose of making such nomination) on either:

(i) the joint written application of both the Buyer and the Seller; or

(ii) if one party will not undertake such a joint application, the application of either the Buyer or the Seller following the grant of a court order for such nomination to be made by the ICAEW,

such application (in either case) to include the criteria of expertise set out in paragraph 6.1(a). In either case any fee charged by the ICAEW to be split equally between the Buyer on the one hand and the Seller on the other and both parties agree to confirm the joint appointment of any party so nominated by the ICAEW. The parties hereby waive the right to object to any court order to give effect to any nomination by the ICAEW,

the firm so agreed or nominated being the Price Adjustment Experts for the purposes of this Schedule 6.

6.2 The Price Adjustment Experts shall be appointed jointly by the Buyer and the Seller on the terms set out in this paragraph 6 and/or on such other terms as may be agreed. For this purpose, the Buyer and the Seller shall not unreasonably refuse to agree to the terms of engagement proposed by the Price Adjustment Experts (which may include hold harmless or similar provisions).

6.3 If:

(a) the terms of engagement of the Price Adjustment Experts have not been agreed within 10 Business Days of the identity of the relevant firm being agreed or nominated under paragraph 6.1; or

(b) any firm agreed or nominated under paragraph 6.1 refuses to accept the appointment; or

51 

(c) the Price Adjustment Experts become unwilling or incapable (whether resulting from death, incapacity or otherwise) of acting or do not deliver their determination within the period required by paragraph 6.4(a),

the relevant firm shall be treated as never having become the Price Adjustment Experts for the purposes of this Agreement and the procedure set out in paragraphs 6.1 and 6.2 shall be repeated as often as is necessary until a valid appointment is made.

6.4 Save as otherwise agreed between the Buyer and the Seller, the following provisions will apply to the role of Price Adjustment Experts under this paragraph 6:

(a) the Price Adjustment Experts will be requested to make their determination as soon as reasonably practicable, and in any event within 60 Business Days, following their appointment;

(b) the Price Adjustment Experts will act as experts and not as arbitrators;

(c) subject to the other provisions of this paragraph 6.4, the Price Adjustment Experts may establish their own procedure for their determination and the parties shall be bound by such procedures;

(d) the Price Adjustment Experts:

(i) will give the Buyer and the Seller a reasonable opportunity to make written submissions to the Price Adjustment Experts;

(ii) will give the Buyer and the Seller a reasonable opportunity to make a written response to the Price Adjustment Experts on the other's submissions to the Price Adjustment Experts;

(iii) may request further information from any party at any time (which information will be delivered by the relevant party within the time specified by the Price Adjustment Experts); and

(iv) will deliver a copy of any such written representations and response made to it, or further information supplied to it, by a party to the other party as soon as reasonably practicable after receipt;

(e) the Price Adjustment Experts:

(i) will apply the accounting policies and other matters referred to in paragraph 2 above;

(ii) will only determine:

(A) what, if any, alteration should be made to the draft Completion Accounts; and

(B) whether or not any of the arguments put to it for modification of the draft Completion Accounts are correct, in whole or in part; and

(iii) may not determine the scope of their own jurisdiction;

(f) the Price Adjustment Experts' decision as to any matter referred to them for determination shall be final and binding on the Buyer and the Seller, save in the case of manifest error or fraud, in which case the relevant part of their determination shall not be effective and shall be referred back to the Price Adjustment Experts for correction;

(g) the Price Adjustment Experts will make their determination (including any adjustments to be made to the draft Completion Accounts and the reasons for their determination) in writing and deliver a copy to the Buyer and the Seller;

52 

(h) the determination of the Price Adjustment Experts shall be deemed to be incorporated in the draft Completion Accounts; and

(i) the fees and expenses of the Price Adjustment Experts, and any other professional fees incurred by them, shall be borne as they may direct at the time of making their determination or, if there is no such direction, equally between the Buyer on the one hand and the Seller on the other.

6.5 The provisions of this Schedule 6 shall not give any party access to any information or document protected by legal professional privilege (including litigation privilege and/or legal advice privilege). Where any party claims such privilege, it may only refuse to supply such information or such part of any document which contains the facts or matters on which that claim is based.

7 Co-operation and access

Until the Completion Accounts are agreed or determined under this Schedule 6, the Buyer and the Seller shall each (at their own cost):

(a) maintain in their possession or under their control, and not destroy, all books and records held by them (including, in the case of the Buyer, the Company), which are relevant to the determination of the Completion Cash, Completion Debt and Completion Working Capital;

(b) ensure that the other party is given such access at all reasonable times to all books and records which are in their respective possession or control (including, in the case of the Buyer, the Company) as they may reasonably require in relation to the review, agreement or determination of the Completion Accounts; and

(c) if relevant, co-operate with the Price Adjustment Experts and comply with any reasonable requests made by them in relation to their determination.

53 

Part 4 - Specific accounting policies

54 

Part 5 - Format of the Completion Accounts

55 

Schedule 7

Property

Property	Original Parties	Date of Licence	Term	Current Rent
Xxxxxxxxxxxxxxxxxx xxxxxxxxxxxx xxxxxxx	X Xxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxx	xxxxxxxxxx xxxxxx	xxxxxxxxxxxxxxx xxxxxxxxxxxxxxx	xxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxx
		xxxxxxxx xxxxxx	xxxxxxxxxxxxxxx xxxxxxxxxxxxx	xxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxx

56 

Schedule 8

Tax Covenant

Part 1 - Interpretation and Buyer Protections

1. Interpretation

1.1 In this schedule (unless the context otherwise requires):

Accounts Relief means any Relief to the extent it is included as an asset in the Completion Accounts or taken into account in computing (and so eliminating or reducing) any provision for deferred Tax in the Completion Accounts

Actual Tax Liability means any liability, or any increase in a liability, to make an actual payment of, in respect of, or on account of, Tax whether or not the same is primarily payable by the Company and whether or not the Company has rights of reimbursement against any other person

Buyer’s Group means the Buyer and any company which either is or becomes after the date of Completion or has within the 6 years prior to the date of Completion been treated as a member of the same group of companies as, or otherwise associated or connected in any way with, the Buyer for any Tax purpose

Buyer’s Relief means any:

(a) Accounts Relief

(b) Post-Completion Relief and

(c) any Relief arising to the Buyer’s Group (other than the Company)

CTA 2009 means the Corporation Tax Act 2009

CTA 2010 means the Corporation Tax Act 2010

Deemed Tax Liability means:

(a) (a)the use or set off of a Buyer’s Relief in circumstances where but for such use or set off the Company would have an Actual Tax Liability in respect of which the Seller would have been liable under the Tax Covenant, in which event the amount of the Deemed Tax Liability shall be the amount for which the Seller would have been so liable but for such use or set off

(b) the Loss of an Accounts Relief in consequence of an Event occurring on or before Completion, in which event the amount of the Deemed Tax Liability shall be:

(i) where the Relief that is subject of the Loss is a deduction from, or credit or offset against, Tax, the amount of that Relief so Lost

(ii) where the Relief that is the subject of the Loss is a deduction from or offset against income, profit or gains, the amount of Tax which but for such Loss would have been saved by virtue of the Relief so Lost (assuming for this purpose that the Company has sufficient profits or was otherwise fully able to utilise the Relief in the Accounting Period in which Completion occurs)

(iii) where the Relief that is subject of the Loss is a repayment of Tax, the amount of the repayment that would have been obtained but for the Loss

Demand means any assessment, notice, letter, demand or other document issued or action taken by or on behalf of any Tax Authority from which it appears that the Company is subject to, or is sought to be made subject to, or will or might become subject to, any Tax Liability (including but not limited to the imposition or withholding of or on account of any Tax or any amount in the nature of Tax)

57 

Event means any event, act or omission the cessation of a period of time, the Company becoming or ceasing to be associated to be associated with another person for the purposes of any Tax, the Company becoming or ceasing to be resident for tax purposes in a jurisdiction, the death, winding up or dissolution of a person or the making of any payment or the receipt or accrual and any transaction including the entry into this Agreement or Completion

HMRC means HM Revenue & Customs and any successor body or bodies with responsibility for administering or collecting UK Tax

IHTA means the Inheritance Tax Act 1984

Loss means, in relation to a Relief, the loss, reduction, unavailability, disallowance, withdrawal or claw-back of that Relief and Lost shall be construed accordingly

Post-Completion Relief means any Relief which arises in respect of an Event occurring, or is attributable to a period of account commencing, after Completion or, where a period of account commences before Completion and ends after Completion, the part of such period of account which is after Completion

Relevant Accounts means the Completion Accounts

Relief means any loss, allowance, deduction, credit, refund or other relief from or relating to any Tax or to the computation of income, profits or gains for the purpose of any Tax and any right to a repayment of Tax

Tax means:

(a) any form of statutory, governmental, state, federal, provincial local government or municipal tax and any levy, duty, contribution, impost, deduction or withholding (including for the avoidance of doubt, national or social security contributions) in each case in the nature of tax whenever created or imposed but excluding uniform business rates and council tax and

(b) all surcharges, interest, penalties and fines in respect of, any Tax falling within paragraph (a) of this definition

Tax Authority means any authority or person, whether of the United Kingdom, part of the United Kingdom or elsewhere, competent to impose, assess or collect any Tax

Tax Covenant means paragraph 2 of Part 1

Tax Liability means any Actual Tax Liability, any Deemed Tax Liability and any other liability referred to in the Tax Covenant

Tax Warranties means the warranties and representations set out in part 3

TCGA means the Taxation of Chargeable Gains Act 1992

VATA means the Value Added Tax Act 1994

1.2 In this schedule (unless the context otherwise requires):

(a) references to any income, profits or gains earned, accrued or received on or prior to a given date or time or by reference to or in respect of a specified period, shall include income, profits or gains which are deemed or treated, for the purposes of the Tax in question, as being, or having been, earned, accrued or received on or before that date or time or in respect of that period, as the case may be;

58 

(b) references to any Event occurring or having occurred on or prior to a given date or time or by reference to or in respect of a specified period, shall include any Event which is deemed or treated, for the purposes of the Tax in question, as occurring, or as having occurred on or before that date or time or in respect of that period, as the case may be; and

(c) references to parts are references to parts of this schedule and references to a paragraph shall, unless otherwise stated, be to a paragraph of this schedule.

1.3 In determining for the purposes of this schedule whether a charge on or power to sell, mortgage or charge any of the shares in or assets of the Company exists at any time, the fact that any amount of Tax is not yet payable or may be paid by instalments shall be disregarded and such amount of Tax shall be treated as becoming due and the charge or power to sell, mortgage or charge as arising on the date of the transfer of value or other Event on or in respect of which it becomes payable or arises.

1.4 Any covenant, indemnity or other requirement to pay costs and/or expenses in this schedule (including by way of deduction of such costs and/or expenses from any payment due to another party) shall be treated as excluding any VAT on such costs and/or expenses to the extent that the party incurring such costs is able to obtain an input tax credit in respect of such VAT.

2. Covenant by the Seller

Subject to the provisions of paragraph 3 of Part 1 and Schedule 5 (Limitations on Liability) to the extent specified therein, the Seller hereby covenants with the Buyer to pay to the Buyer an amount equal to:

(a) any Actual Tax Liability of the Company arising as a result of, in respect of or by reference to:

(i) any Event occurring, or having occurred, on or before Completion; or

(ii) any income, profits or gains earned, accrued or received on or before Completion; or

(b) any Deemed Tax Liability;

(c) any Actual Tax Liability or Deemed Tax Liability that arises due to any Event arising in the ordinary course of business that occurs after Completion under a legally binding obligation (whether or not conditional) entered into by the Company on or before Completion;

(d) Any Actual Tax Liability or Deemed Tax Liability arising from the issue to the Seller or subdivision of share capital on or before Completion or the exercise of the options pursuant to clause 11 of the Shareholders' Agreement whenever occurring;

(e) any Actual Tax Liability of the Company arising as a result of the Seller, or any person who is connected with the Seller (within the meaning of section 1122 CTA 2010), failing to pay by the due date any Tax for which the Seller or person is primarily liable; or

(f) any Actual Tax Liability in respect of inheritance tax which:

(i) is at Completion a charge on, or gives rise to a power to sell, mortgage or charge, any of the shares or assets of the Company; or

(ii) after Completion becomes a charge on, or gives rise to a power to sell, mortgage or charge, any of the shares or assets of the Company being an Actual Tax Liability arising as a result of the death of any person within xxxx after a transfer of value occurring on or before Completion (or a deemed transfer of value) if a charge on or power to sell, mortgage or charge any such shares or assets could, if the death had occurred immediately before Completion and the inheritance tax payable as a result thereof had not been paid, have existed at Completion; or

59 

(iii) arises as a result of a transfer of value occurring or being deemed to occur on or before Completion (whether or not in conjunction with the death of any person whenever occurring) which increased or decreased the value of the estate of the Company;

(g) any reasonable third party costs and expenses properly incurred by the Buyer or the Company as a result of any such liability or amount as is referred to in paragraph 2(a) to paragraph 2(f) of Part 1 and in respect of which the Seller is liable under those paragraphs or in successfully taking any action under this Schedule 8.

3. Limitations

3.1 The Seller shall not be liable under the Tax Covenant or for breach of any Tax Warranty, in respect of any Tax Liability to the extent that:

(a) specific provision or reserve is made for such Tax Liability in the Relevant Accounts; or

(b) such Tax Liability was discharged on or before Completion and the Completion Accounts reflect that discharge; or

(c) any Relief (other than a Buyer’s Relief) is available (or is made available at no cost to the Company) to the Company to reduce or eliminate the Tax Liability; or

(d) such Tax Liability would not have arisen but for a voluntary transaction, action or omission carried out or effected by any member of the Buyer’s Group or the Company at any time after Completion except that this exclusion shall not apply where such transaction, action or omission:

(i) is required by any legislation or other statutory requirement in force before Completion; or

(ii) is carried out at the written request of or with the written consent of the Seller; or

(iii) is carried out or effected pursuant to a legally binding obligation of the Company entered into on or before Completion; or

(iv) is carried out in the ordinary course of business of the Company as carried on at Completion; or

(e) such Tax Liability arises or is increased as a result of:

(i) any change in the rates of Tax; or

(ii) any change in legislation, regulation or directive; or

(iii) any change in the published practice of general application of, or published concession of general application operated by, any Tax Authority; or

(iv) any change in the judicial interpretation of any law,

in each case taking effect after Completion; or

(f) such Tax Liability arises as a result of a change to the date to which the Company makes up its accounts or changing any of its accounting policies or practices, in either case, after Completion, but excluding any change required to comply with any law or generally accepted accounting practices or principles applicable to the Company immediately prior to Completion and in force at Completion; or

(g) such Tax Liability arises as a result of or would not have arisen but for:

60 

(i) the failure or omission by the Company after Completion (other than at the written request of the Seller) to make any claim, election, surrender or disclaimer or to give any notice or consent (“the Claim”) in circumstances where the making, giving or doing of the Claim was permitted by law and is taken into account in computing the provision for Tax or deferred tax in the Relevant Accounts and the Buyer was provided with full details of the Claim by the Seller requesting that the Claim be made at least 14 days before the last date on which the Claim could be made; or

(ii) the withdrawal or amendment by the Company after Completion (other than at the written request of the Seller) of any claim, election, surrender, disclaimer, notice or consent made, given or done, as the case may be, by the Company prior to Completion; or

(iii) any claim, election, surrender, disclaimer, notice or consent made, given or done by the Company after Completion (other than at the written request of the Seller), the making, giving or doing of which was not taken into account in computing the provision for Tax or deferred tax in the Relevant Accounts; or

(iv) the Company ceasing to carry on any trade or business after Completion or effecting a major change wholly after Completion in the nature or conduct of any trade or businesses carried on by it at Completion; or

(v) the earning, receipt or accrual of any actual (not deemed) income, profit or gain prior to the Completions Accounts Reference Date which is not recognised in the Relevant Accounts and which is retained in and available to the Company immediately after Completion and is not otherwise taken into account in determining the Purchase Price; or

(vi) any unreasonable failure or delay by the Buyer or the Company in paying over to any Tax Authority any payment previously made by the Seller under this Agreement; or

(h) the Buyer has recovered damages or any other amount under this Agreement (whether for breach of Warranty, under any indemnity, under this schedule or otherwise) in respect of the same Tax Liability or the Buyer or the Company have otherwise obtained reimbursement or restitution from the Seller; or

(i) such Tax Liability is stamp duty or stamp duty reserve tax payable in respect of the Buyer’s acquisition of the Shares.

3.2 Where a Tax Liability arises in respect of which the Seller is liable pursuant to the Tax Covenant or the Tax Warranties, the maximum liability of the Seller in relation to such Tax Liability shall be limited to 80% of the total Tax Liability of the Company in question provided that once the Buyer has acquired all of the issued share capital of the Company, the Seller will be liable for the total Tax Liability arising from any Demand of which the Buyer or the Company first become aware after the date on which the Buyer acquired all of the issued share capital of the Company.

4. Payment

4.1 If the Seller is or becomes liable to make a payment under the Tax Covenant in respect of an Actual Tax Liability or a Deemed Tax Liability falling within paragraph (a) of that definition, the Seller shall pay such amount in cleared funds on or before the date 15 Business Days after the date of written notice from the Buyer of the amount which the Seller is required to pay or, if later, the date 2 Business Days before the date on which the Actual Tax Liability in question is, or as the case may be would have been, due for payment.

4.2 If the Seller is or becomes liable to make a payment under the Tax Covenant in respect of any other amount not being an Actual Tax Liability or a Deemed Tax Liability falling within paragraph (a) of that definition, the Buyer will notify the Seller in writing of the amount which the Seller is required to pay and the Seller shall pay such amount in cleared, immediately available funds on or before the date:

61 

(a) in the case of a Deemed Tax Liability falling within paragraph (b) of that definition where the Accounts Relief Lost is a right to a repayment of Tax, the later of the date upon which such repayment would have been payable and 15 Business Days after the date of such notice;

(b) in the case of a Deemed Tax Liability falling within paragraph (b) of that definition where the Accounts Relief Lost is not a right to repayment of Tax, the later of the date 2 Business Days before the date upon which any Tax (which would have been saved or is treated as having been saved but for such Loss) is due for payment and 15 Business Days after the date of such notice;

(c) in the case of any costs and expenses within paragraph 2(g) of Part 1, the Buyer will notify the Seller in writing of such amount specifying details of the services for which those costs and expenses were incurred and the circumstances in which they were obtained and the Seller shall pay such amount on or before the later of 2 Business Days before the date on which such costs and expenses are due for payment and the date 15 Business Days after the date of such notice;

(d) in any other case, 5 Business Days after the date of such notice.

4.3 Sums not paid by the Seller on the dates specified in paragraph 4.1 to paragraph 4.2 of Part 1 shall bear interest (which shall accrue from day to day after, as well as before, judgment) at 1% above the base rate from time to time of xxxx or, in the absence of such base rate, at such similar rate of a UK clearing bank as the Buyer may from time to time select and notify to the Seller from the date following the specified date up to and including the day of actual payment of such sums (or the next business day if such day of actual payment is not a Business Day).

4.4 All amounts due under this Schedule from the Seller to the Buyer shall be paid in full, without any set-off, counterclaim, deduction or withholding (other than any deduction or withholding of tax required by law). If any deductions or withholdings are required by law to be made from any of the sums payable under this Schedule, the Seller shall provide any evidence of the relevant withholding as the Buyer may reasonably require and shall pay to the Buyer any sum as will, after the deduction or withholding is made, leave the Buyer with the same amount as it would have been entitled to receive without that deduction or withholding.

4.5 The Seller shall have no liability to make any additional payment pursuant paragraph 4.4 of this Schedule 8 to the extent:

4.5.1 such liability to Tax would not have arisen but for an assignment of this Agreement or any part of it;

4.5.2 such liability to Tax has already been taken into account in the calculating the quantum of the payment made by the Seller pursuant to this Agreement.

4.6 If the Buyer would, but for the availability of a Buyer’s Relief (other than an exemption from Tax), incur a Tax liability falling within paragraph 4.5 of Part 1 it shall be deemed for the purposes of that paragraph 4.5 of Part 1 to have incurred and paid that liability.

62 

Part 2

Credit Mechanisms

1. Rebate

1.1 If the Company is entitled to recover from any person (other than the Company or any member of the Buyer’s Group) any amount in respect of or by reference to any Tax Liability (or any Event giving rise to such a Tax Liability) in respect of which the Seller is or has been liable under the Tax Covenant or in respect of the Tax Warranties, the Buyer shall:

(a) inform the Seller of that entitlement; and

(b) subject to the Buyer and the Company being indemnified and secured for costs which exceed xxxxxxxx to the Buyer’s reasonable satisfaction by the Seller against any reasonable third party costs and expenses which may thereby be properly incurred, the Buyer shall procure that the Company shall use all reasonable endeavours to make such recovery.

1.2 If the Company makes a recovery referred to in paragraph 1.1 of Part 2:

(a) in a case where the Seller has already discharged their liability under the Tax Covenant or in respect of the Tax Warranties in respect of the Tax Liability referred to in paragraph 1.1 of Part 2, the Buyer shall repay to the Seller a sum equal to the lesser of:

(i) the amount of any payment so received, after deduction therefrom of an amount equal to any reasonable third party costs and expenses properly incurred in obtaining it (and not previously reimbursed by the Seller to the Buyer) and any Tax liability incurred in respect of it; and

(ii) the amount paid by the Seller under the Tax Covenant or in respect of the Tax Warranties in respect of the Tax Liability in question;

(iii) provided that the Buyer will not be obliged to repay any amount under this paragraph to the extent that it would result in the Buyer being in a worse position than it would have been had the Tax Liability in question not arisen; and

(b) in a case where the Seller has not already discharged their liability under the Tax Covenant or in respect of the Tax Warranties in respect of the Tax Liability referred to in paragraph 1.1 of Part 2, an amount equal to the amount referred to in paragraph 1.2(a) of Part 2 shall be set off against the Seller’s liability (and shall discharge the liability of the Seller in respect thereof to the extent of the amount so set off).

2. Over provisions

2.1 If:

(a) any provision for, or in respect of, Tax (including deferred tax) in the Relevant Accounts has proved to be an over-provision other than an overprovision arising by:

(i) a change in law;

(ii) a voluntary act or omission of the Buyer or the Company;

(iii) the utilisation or setting off of a Buyer’s Relief; or

that, in each case, occurs after Completion; or

(b) any right to a repayment of Tax treated as an asset in the Relevant Accounts has proved to be understated or, where no right to repayment of Tax was treated as an asset in the Relevant Accounts, such an amount should have been treated as an asset in the Relevant Accounts (taking account of the applicable accounting principles for the Relevant Accounts)

63 

the amount of such over-provision, understatement or amount (as the case may be) shall be dealt with in accordance with paragraph 2.2 of Part 2.

2.2 Where it is provided under paragraph 2.1 of Part 2 that any amount is to be dealt with in accordance with this paragraph:

(a) the amount shall first be set off against any payment then due from the Seller under the Tax Covenant or in respect of the Tax Warranties;

(b) to the extent there is an excess, a refund shall be made to the Seller of any previous payment made by the Seller under the Tax Covenant or in respect of the Tax Warranties and not previously refunded under this paragraph 2 of Part 2, up to the amount of such excess; and

(c) to the extent that the excess referred to in paragraph 2.2(b) of Part 2 is not exhausted thereunder, the remainder of that excess shall be carried forward and set off against any future payment which becomes due from the Seller under the Tax Covenant or in respect of the Tax Warranties.

2.3 The Buyer shall notify the Seller in writing within 5 Business Days of it or the Company becoming aware of any amount referred to in paragraph 2.1 of Part 2.

3. Windfall

3.1 If any Tax Liability (or the Event giving rise to the Tax Liability) which has resulted or results in any sum having been paid or becoming payable by the Seller under the Tax Covenant or in respect of the Tax Warranties has given rise to a Relief which would not otherwise have arisen and a liability of the Company to make an actual payment of Tax has been satisfied or avoided, or a repayment of Tax has been obtained, by the use of that Relief, the amount by which that liability has been satisfied or avoided or the amount of the repayment of Tax (as the case may be), shall be dealt with in accordance with paragraph 3.2 of Part 2 provided that paragraph 3.2 shall not apply to any amount to the extent that it would result in the Buyer being in a worse position than it would have been in had the Tax liability not arisen.

3.2 Where it is provided under paragraph 3.1 of Part 2 that any amount is to be dealt with in accordance with this paragraph 3.2 of Part 2:

(a) the amount shall first be set off against any payment then due from the Seller under the Tax Covenant or in respect of the Tax Warranties;

(b) to the extent there is an excess, a refund shall be made to the Seller of any previous payment made by the Seller under the Tax Covenant or in respect of the Tax Warranties and not previously refunded under this paragraph up to the amount of such excess; and

(c) to the extent that the excess referred to in paragraph 3.2(b) of Part 2 is not exhausted thereunder, the remainder of that excess shall be carried forward and set off against any future payment which becomes due from the Seller under the Tax Covenant or in respect of the Tax Warranties.

3.3 The Buyer shall notify the Seller in writing within 5 Business Days of it or the Company becoming aware of any amount referred to in paragraph 3.1 of Part 2.

4. Buyer’s covenant

4.1 The Buyer covenants with the Seller to pay to the Seller an amount equal to any Actual Tax Liability of the Seller or of any company which is under the control of the Seller (whether alone or in conjunction with any other person) which arises as a result of the failure by the Company to discharge after Completion an Actual Tax Liability for which it is primarily liable in respect of which the Seller does not have any undischarged liability to make a payment to the Buyer under the Tax Covenant or for breach of a Tax Warranty together with any reasonable costs and expenses incurred by the Seller or that company in relation to such Actual Tax Liability (or any Demand therefore) or in making any claim under this paragraph.

64 

4.2 The Buyer will not be liable under this paragraph 4.2 of Part 2 to the extent that the Seller has recovered a sum in respect of the relevant Tax Liability under any statutory or other right and the Seller will waive any other rights to recover any sum to the extent that it recovers any sum under this paragraph 4.2 of Part 2.

4.3 If the Buyer becomes liable to make a payment under paragraph 4.1 of Part 2, the Buyer shall pay such amount in cleared immediately available funds on or before the later of the date 2 Business Days before that Actual Tax Liability is finally due and payable and the date 15 Business Days after the date of written demand on the Buyer by the Seller.

4.4 The provisions of paragraph 4.3 of Part 1 shall apply to payments under this paragraph as they apply to payments under the Tax Covenant as if references therein to the Buyer are references to the Seller and references to the Seller are references to the Buyer.

65 

Part 3

Procedure

1. Conduct of claims

1.1 If the Buyer or the Company (or any of their directors) shall become aware of any Demand which is likely to or may give rise to a liability of the Seller under the Tax Covenant or in respect of the Tax Warranties the Buyer shall give written notice thereof to the Seller. The Buyer shall give such notice to the Seller on a timely basis (having regard to any applicable time limit for appealing against or responding to the Demand) provided that where a statutory time limit is applicable for responding to or appealing against the Demand, the Buyer shall give written notice of the Demand to the Seller, where possible, no later than the fifteenth Business Day prior to the expiry of the said time limit.

1.2 If the Seller becomes aware of a Demand or otherwise considers that a Tax Liability that may give rise to a liability of the Seller under the Tax Covenant or the Tax Warranties, they shall notify the Buyer in writing as soon as reasonably practicable, and, on receipt of the notice, the Buyer shall be deemed to have given the Seller notice in accordance with the provisions of paragraph 1.1 of Part 3.

1.3 The Buyer shall procure that the Company shall take such action which the Seller may by written notice given to the Buyer reasonably request to dispute, resist, appeal against, compromise, mitigate or defend a Demand (any such action being an Action), provided always that:

(a) in each case, the Buyer and the Company shall be indemnified and secured for costs which exceed xxxxxxxx to the Buyer’s reasonable satisfaction by the Seller against any reasonable third party costs and expenses which may be properly incurred by the Buyer or the Company in taking the Action; and

(b) the Buyer shall not be obliged to take any Action in relation to a Demand where there has been fraudulent conduct or conduct involving dishonesty by the Seller or, prior to Completion, the Company in relation to such Demand.

1.4 The Buyer shall not be required to procure that the Company takes any steps under paragraph 1.3 of Part 3 if:

(a) the Buyer has not received written instructions in accordance with paragraph 1.3 of Part 3 within 15 Business Days of the delivery of the notice referred to in paragraph 1.1 of Part 3; or

(b) complying with any request or notification of the Seller under this paragraph is likely, in the opinion of the Buyer, acting reasonably, to:

(i) materially increase the amount involved or the future liability to Tax of the Company; or

(ii) have a materially adverse effect on the future Tax affairs of the Company; or

(iii) complying with any request or notification would involve sending, transmitting, issuing or submitting any written correspondence or entering into any other communication relating to the Tax Claim which, in the Buyer’s reasonable opinion, is not true and accurate.

1.5 If paragraph 1.3 of Part 3 applies in respect of a Demand Buyer and/or the Company shall, acting in good faith, be free to pay or settle such Tax Claim or take such other action in connection with the same as it may in its reasonable discretion decide.

2. Tax computations

66 

2.1 The Buyer covenants with the Seller:

(a) to keep the Seller informed of all matters relating to the submission, negotiation and agreement of the corporation tax returns and computations of the Company for all accounting periods ended on or prior to the Accounts Date (Relevant Accounting Periods);

(b) that no such computations or returns nor any material correspondence relating to such computations or returns shall be transmitted to any Tax Authority without first being submitted to the Seller for its comments and the Buyer shall not unreasonably refuse to incorporate any reasonable comments of the Seller on such returns or correspondence.

2.2 If so requested by the Seller in writing, the Buyer shall be obliged to procure that the Company makes or gives any return, claim, election, surrender and/or consent in relation to Tax to the extent that, in computing any provision for Tax or deferred Tax which appears in the Relevant Accounts (or in eliminating any provision which would have so appeared), it was assumed that any such return, claim, election, surrender or consent would be made or given.

2.3 The Buyer shall procure that the Company provides the Seller with such documents and information (including, without limitation, access to books, accounts, personnel and records), as the Seller may reasonably require in writing, in connection with their rights pursuant to this paragraph.

2.4 In respect of the accounting period of the Company commencing prior to Completion and ending after Completion (Straddle Period) the Buyer shall procure that the corporation tax returns of the Company shall be prepared on the basis which is consistent with the manner in which corporation tax returns of the Company are or have been prepared for all accounting periods ended prior to Completion.

2.5 The Buyer shall procure that the Company keeps the Seller fully informed of the Tax affairs of the Company in respect of the Straddle Period and shall provide the Seller with copies of all relevant documents and shall not submit any correspondence or submit or agree any return or computation for such period, to any Tax Authority without giving the Seller a reasonable opportunity to make representations thereon and taking into account all such representations insofar as they are reasonable.

2.6 The provisions of paragraph 1 of Part 3 shall apply in priority to the provisions of this paragraph.

67 

Part 4

Tax Warranties

1. Provision in the Accounts

The Accounts make full provision or reserve, in accordance with applicable accounting principles, for all Tax for which the Company was liable as at the Accounts Date.

2. Payment

The Company has paid all Tax for which it has become liable to pay or account for, the due date for payment of which is on or before the date of this Agreement.

3. Compliance

3.1 Within the last 4 years the Company has properly made all returns and computations and supplied all other information in relation to Tax which it is or has been required to make or supply and all such returns, computations and information were and remain materially complete and accurate and were made or supplied punctually.

3.2 The Company is not involved in any current dispute with any Tax Authority where the amount of Tax at stake is material and, so far as the Seller is aware, there are no facts which are likely to give rise to any such dispute.

3.3 The Company is not and has not at any time within the last 4 years been liable to pay any penalties, fines, surcharges or interest in relation to Tax which in aggregate exceed £10,000 and, so far as the Seller is aware, there are no facts which are likely to cause it to become liable to pay any such penalties, fines, surcharges or interest.

3.4 Within the last 4 years the Company has complied with all its obligations to deduct Tax from payments made by it and to account for such Tax to any Tax Authority.

3.5 No Tax Authority has agreed formally or informally to any concession or arrangement in relation to the current Tax position of the Company which does not reflect the relevant legislation, published practice or any published concession.

4. Close companies

4.1 The Company has not:

(a) since the Accounts Date done anything or omitted to do anything so as to give rise to an assessment or any charge to tax, under section 455 CTA 2010 (as extended by section 460 CTA 2010);

(b) within the last 6 years been a close investment-holding company as defined in section 34 CTA 2010.

5. Distributions

5.1 The Company has not been concerned in any exempt distribution within the meaning of section 1075 CTA 2010.

5.2 No distribution or deemed distribution, within the meaning of section 1000 or sections 1022-1027 of CTA 2010, has been made (or will be deemed to have been made) by the Company, except dividends shown in its unaudited accounts, and the Company is not bound to make any such distribution.

6. Branch Election

68 

The Company has not made any election under section 18A CTA 2009.

7. Group transactions

7.1 The Company is not, and has never been a member of a group or consortium for any Tax purpose.

7.2 The Company has not at any time within the last 6 years acquired any asset from any company (other than a company falling within the definition of the Company) which at the time of the acquisition was a member of the same group of companies as defined in section 170 TCGA.

8. Residence and offshore interests

8.1 The Company is and has at all times been resident in the United Kingdom for Tax purposes and is not and has not at any time been treated as resident or as having a branch or permanent establishment in any other jurisdiction for any Tax purpose (including under any double tax treaty or agreement).

8.2 The Company is not liable for any Tax as the agent or Tax representative of any other person or business and does not constitute a permanent establishment of any other person, business or enterprise for any Tax purposes.

9. Employment tax

9.1 All National Insurance contributions and sums payable to HMRC under the PAYE system due and payable by the Company up to the date hereof have been paid and the Company has made all such deductions, withholdings and retentions as are required in connection therewith.

9.2 No person has acquired any option to acquire shares or securities in the Company where the right or opportunity to do so is, or was, available by reason of an office or employment of that person with the Company nor has provision been made to provide a benefit to an employee or director either directly or indirectly via a third person.

10. Inheritance Tax

10.1 There is no outstanding HMRC charge (as defined in section 237 IHTA) over any asset of the Company or over any of the Shares and, so far as the Seller is aware, there are no circumstances in which such a charge could arise.

10.2 There are in existence no circumstances by virtue of which any such power as is mentioned in section 212 IHTA could be exercised in relation to any asset of the Company or to any of the Shares or by virtue of which any such power could be exercised but for the provisions of section 204(6) IHTA.

11. Vat

11.1 The Company is a taxable person for the purposes of VAT and is duly registered in the United Kingdom for VAT and has been so registered at all times that it has been required to be registered for the purpose of the VAT legislation. Such registration is not subject to any conditions imposed by or agreed with HMRC.

11.2 The Company is not, and has not within the last 4 years, been a member of a group for the purposes of the VAT legislation, and has not applied for such treatment.

11.3 Within the last 3 years the Company has not been subject to any penalty liability notice, written warning of failure to comply, surcharge liability notice or requirement to give security as a condition of making taxable supplies.

11.4 The Company has not registered, and is not required to register, for VAT purposes (or for the purposes of any similar tax on added value or turnover) in any country other than the United Kingdom.

69 

11.5 All supplies that have been made by the Company have been taxable supplies for VAT purposes. The Company has not been and, so far as the Seller is aware, will not be, denied full credit for all input tax paid or suffered by it.

11.6 The Company does not own any assets which are capital items subject to the capital goods scheme under Part XV of the VAT Regulations 1995, nor has exercised any option to tax under Part 1 of Schedule 10 to VATA 1994.

12. Avoidance

12.1 The Company has not received an accelerated payment notice (as referred to in Chapter 3, Part 4 Finance Act 2014) or a follower notice (as referred to in Chapter 2, Part 4 Finance Act 2014).

12.2 The Company has not been party to nor otherwise involved in any transaction in respect of which disclosure has been made, or required to be made, by the Company pursuant to Part 7 Finance Act 2004 or Schedule 11A VATA.

12.3 The Company has not carried out or been party to any transaction where the sole or main purpose, or one of the main purposes, was the avoidance of Tax or which has given, or could give, rise to a liability under Part 5 and Schedule 43 Finance Act 2013 (GAAR).

13. Stamp duty and stamp duty land tax

13.1 All documents to which the Company is a party as purchaser, assignee or lessee, which are in the possession or under the control of the Company and which establish or are necessary to establish any right or title of the Company have been duly stamped.

13.2 Neither entering into this Agreement, Completion or the performance of this Agreement will result in the withdrawal of a stamp duty land tax Relief granted before Completion which will affect the Company.

14. Loan Relationships

All financing costs, including interest, discounts and premiums payable by the Company in respect of its loan relationships within the meaning of section 302 of CTA 2009 are eligible to be brought into account by the Company as a debit for the purposes of Part 5 of CTA 2009 at the time, and to the extent that such debits are recognised in the statutory accounts of the Company.

15. Chargeable Gains

The book value shown in, or adopted for the purposes, of the Accounts as the value of each of the assets of the Company does not exceed the amount which on a disposal of such asset at the date of this Agreement would be deductible in computing any gain.

16. CAPITAL ALLOWANCES

The Company has not claimed first-year tax credits or other reliefs or allowances in respect of any expenditure concerning an asset owned or treated as owned at the Accounts Date (including software development costs) which, if disposed of at the date of this Agreement for consideration equal to its net book value as included in the Accounts, would give rise to a balancing charge or clawback of allowances or other relief claimed in respect of that asset.

17. Tax liabilities

The Company is not obliged to pay any Liability for Taxation which arises to another person pursuant to any contract or other arrangement made on or before Completion.

18. COVID-19

70 

18.1 No employee or officer of the Company has been required to carry out their duties in a jurisdiction other than their usual jurisdiction of residence, or other than the jurisdiction in which they typically carry out their duties, as a result of COVID-19 related travel restrictions.

18.2 The Disclosure Letter sets out details of the extent to which the Company benefitted from any of the following COVID-19 pandemic related measures:

18.2.1 deferral of income tax or corporation tax self-assessment payments on account where those payments on account have yet to be made to HMRC;

18.2.2 deferral of VAT liability where that VAT liability has not yet been settled;

18.2.3 business rates holidays; and/or

18.2.4 "time to pay" arrangements with HMRC.

18.3 The Company was entitled to benefit from, and has complied with any and all requirements of, any measures from which it has benefitted from in paragraph 18.2 above.

71 

Schedule 9

Buyer Warranties

1 This Agreement and the other Transaction Documents executed or to be executed by the Buyer will, when executed, constitute valid and binding obligations of the Buyer enforceable against the Buyer in accordance with their respective terms.

2 The Buyer is a company duly incorporated and validly existing under the laws of Alberta and has the requisite power and authority to enter into and perform, and has taken all necessary corporate action to authorise the execution and performance of, its obligations under this Agreement and any other Transaction Document to which it is a party, including the issue of the Consideration Shares.

3 The execution, delivery and performance by the Buyer of this Agreement and each Transaction Document will not:

(a) breach any provision of the articles or by-laws of the Buyer;

(b) breach or constitute a default under any agreement or arrangement to which it is a party or by which it is bound;

(c) breach any applicable Laws or any orders, judgments or decrees of any court or Governmental Entity.

4 The Buyer has obtained all consents, approvals and authorisations necessary from all relevant Governmental Entities to execute and perform its obligations under this Agreement (including, for the avoidance of doubt, to issue the Consideration Shares) subject to, official notice of issuance and acceptance by the TSXV and all the other Transaction Documents.

5 In relation to the Buyer and each member of the Buyer's Group:

(a) no order has been made and no resolution has been proposed or passed for the winding up of or for a provisional liquidator to be appointed in respect of any of them and no petition has been presented for the purpose of winding up any of them;

(b) no administration order has been made in respect of any of them and no petition or other application to the court for such an order has been presented or made and no administrator has been appointed (or notice of intention so to appoint filed in court) in respect of any of them;

(c) no receiver (which expression will include an administrative receiver) has been appointed in respect of any of them or in respect of all or any material part of their respective assets;

(d) no voluntary arrangement has been proposed under any applicable bankruptcy or insolvency legislation in respect of any of them;

(e) no distress, execution or other process has been levied or threatened in respect of any of their respective assets, so long as sections A through E could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect..

5.2 The Buyer has timely filed with or furnished to, as applicable, the securities regulatory authorities in Canada (Commissions), as applicable, all material registration statements, prospectuses, reports, schedules, forms, statements, and other documents (including exhibits and all other information incorporated by reference) required to be filed or furnished by it with the Commissions since 31 October 2020 (Buyer Public Documents).

5.3 The Buyer is a reporting issuer, or the equivalent thereof, in each of the Provinces and Territories of Canada (Reporting Jurisdictions), and is not currently in default of any requirement of the applicable laws of each of the Reporting Jurisdictions and other regulatory instruments of the Commissions, and no order ceasing, halting or suspending trading in securities of the Buyer or prohibiting the distribution of such securities has been issued to and is outstanding against the Buyer and no investigations or proceedings for such purposes are, to the knowledge of the Buyer, pending or threatened.

72 

5.4 The Buyer is in compliance in all material respects with all its disclosure obligations under applicable Laws and all documents filed by the Buyer pursuant to such obligations are in compliance in all material respects with applicable Laws and, other than in respect of documents that have been amended or refiled did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

5.5 Each of the consolidated financial statements (including, in each case, any notes and schedules thereto) contained in or incorporated by reference into the Buyer Public Documents:

(a) complied as to form in all material respects with the published rules and regulations of the Commissions with respect thereto as of their respective dates;

(b) was prepared in accordance with IFRS (International Financial Reporting Standards) applied on a consistent basis throughout the periods involved (except as may be indicated in the notes thereto and, in the case of unaudited interim financial statements, as may be permitted by the Commissions for Quarterly Reports on Form 10-Q); and

(c) fairly presented in all material respects the consolidated financial position and the results of operations, changes in stockholders’ equity, and cash flows of the Buyer and the consolidated Buyer's Group as of the respective dates of and for the periods referred to in such financial statements, subject, in the case of unaudited interim financial statements, to normal and year-end audit adjustments as permitted by IFRS and the applicable rules and regulations of the Commissions (but only if the effect of such adjustments would not, individually or in the aggregate, be material).

5.6 The financial statements of the Buyer dated as of 31 July 2021 contained in the Buyer Public Documents filed prior to the date of this Agreement is hereinafter referred to as the "Buyer Balance Sheet". No member of the Buyer's Group has any Liabilities other than Liabilities that:

(a) are reflected or reserved against in the Buyer Balance Sheet (including in the notes thereto);

(b) were incurred since the date of the Buyer Balance Sheet in the ordinary course of business consistent with past practice;

(c) are incurred in connection with the transactions contemplated by this Agreement; or

(d) would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

5.7 The Buyer is in material compliance with all of the applicable listing and corporate governance rules of the TSXV and NASDAQ.

5.8 Since the date of the Buyer Balance Sheet, except in connection with the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, the business of each member of the Buyer's Group has been conducted in the ordinary course of business consistent with past practice and there has not been or occurred any Material Adverse Effect or any event, condition, change, or effect that could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

5.9 Each member of the Buyer's Group is and, since 1 January 2021, to the Buyer's knowledge has been in compliance with, all Laws applicable to the Buyer's Group or by which the Buyer's Group or any of their respective businesses or properties is bound, except for such non-compliance that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

73 

5.10 Since 1 January 2019, no Governmental Entity has issued any notice or notification stating that a member of the Buyer's Group is not in compliance with any Law, except where such non-compliance would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

5.11 Each member of the Buyer's Group holds, to the extent necessary to operate their respective businesses as such businesses are being operated as of the date hereof, all Permits except for any Permits for which the failure to obtain or hold would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

5.12 No suspension, cancellation, non-renewal, or adverse modifications of any Permits held by the Buyer's Group is pending or, to the knowledge of the Buyer, threatened, except for any such suspension or cancellation which would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

5.13 Each member of the Buyer's Group is and, since 1 January 2019, has been in compliance with the terms of all Permits, except where the failure to be in such compliance would not reasonably be expected to have a Material Adverse Effect.

5.14 There is no Legal Action pending, or to the knowledge of the Buyer, threatened against any member of the Buyer's Group or any of their respective properties or assets or, to the knowledge of the Buyer, any officer or director of the Buyer's Group in their capacities as such other than any such Legal Action that:

(a) does not involve an amount that would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; and

(b) does not seek material injunctive or other material non-monetary relief. No member of the buyer's Group or any of their respective properties or assets is subject to any order of a Governmental Entity or arbitrator, whether temporary, preliminary, or permanent, which would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

5.15 To the knowledge of the Buyer, there are no inquiries or investigations, other governmental inquiries or investigations by any Commission, or internal investigations pending or, to the knowledge of the Buyer, threatened, in each case regarding any accounting practices of the Buyer or any member of the Buyer's Group or any malfeasance by any officer or director of the Buyer.

5.16 The authorised capital stock of the Buyer consists of an unlimited number of Buyer Shares.

5.17 As of the date of this Agreement, 52,903,781 Buyer Shares were issued and outstanding.

5.18 All of the outstanding shares of capital stock of the Buyer, and all shares of capital stock of the Buyer which may be issued as contemplated or permitted by this Agreement, including the Buyer Shares constituting the Consideration Shares, will be, when issued, duly authorised, validly issued, fully paid, and non-assessable, and not subject to any pre-emptive rights.

74 

Schedule 10

Interpretation and definitions

1 Interpretation

1.1 General

In this Agreement, unless the context otherwise requires:

(a) references to clauses and Schedules are to clauses of, and Schedules to, this Agreement respectively;

(b) a reference in a schedule or part of a schedule to paragraphs are to paragraphs of the schedule or part of a schedule in which the reference appears;

(c) references to this Agreement include its recitals and Schedules;

(d) references to this Agreement or any other document are to this Agreement or that document as amended from time to time;

(e) references to writing include any method of reproducing words in a legible and non-transitory form excluding any electronic form (as defined in section 1168 Companies Act 2006);

(f) references to times of the day are to London time;

(g) references to one gender include all genders;

(h) references to the singular include the plural and vice versa;

(i) references to a person include any individual, firm, company, government, state, state agency, partnership, association or other body (with or without separate legal personality);

(j) references to a company include any company, corporation or body corporate, wherever incorporated or established;

(k) references to any document being in the agreed form means that document in the form agreed between the parties and, for the purposes of identification, signed or initialled by or on behalf of the parties;

(l) the expressions holding company, parent undertaking, subsidiary, subsidiary undertaking and wholly-owned subsidiary will have the meanings given to them in the Companies Act 2006 (in each case ignoring any security existing over shares in the relevant undertaking);

(m) the words other, includes, including, in particular and words of similar effect shall not limit any general words which precede them and any words which follow them shall not be limited in scope to the same class as the preceding words;

(n) a person shall be deemed to be connected with another person if the person is connected with such other person within the meaning of sections 1122 and 1123 Corporation Taxes Act 2010; and

(o) references to a party shall include his/its successors in title and permitted assigns.

1.2 Statutory references

75 

In this Agreement, unless the context otherwise requires, a reference to a statute or statutory provision includes:

(a) any past statute or statutory provision which that statute or statutory provision has replaced (directly or indirectly and whether with or without modification);

(b)

(i) a reference to any subordinate legislation made under that statute or statutory provision; and

(ii) that statute or statutory provision as from time to time amended, modified, consolidated or re-enacted (whether before or after the date of this Agreement); and

(c) where the reference is to European Union law that is directly applicable or directly effective in the United Kingdom at any time, a reference to such European Union law as it applies in England and Wales from time to time, including as retained, amended, extended or re-enacted on or after exit day,

save to the extent that any subordinate legislation, amendment, modification, consolidation or re-enactment (including any amendment, extension or re-enactment of European Union law as it applies in England and Wales) made after the date of this Agreement would increase or alter the liability of any party under this Agreement.

1.3 Overseas legal terms and references to statutes or statutory provisions

(a) A reference to any English legal term shall, for any jurisdiction other than England and Wales, include a reference to the term or concept which most nearly corresponds to it in that jurisdiction.

(b) A reference to any English statute or statutory provision shall, for any jurisdiction other than England and Wales, include a reference to the statute or statutory provision which most nearly corresponds to it in that jurisdiction.

1.4 Headings

The headings and contents table in this Agreement are for convenience only and do not affect its interpretation.

1.5 Conflicting provisions

If there is a conflict or inconsistency between any clause and any schedule, the clause prevails. For this purpose, an omission (whether deliberate or inadvertent) is not, by itself, to be construed as giving rise to a conflict or inconsistency.

2 Definitions

In this Agreement, unless the context otherwise requires:

Accounting Policies has the meaning given in paragraph 2.1(b) of Part 3 of Schedule 6

Accounts means the accounts of the Company for the financial year ended on the Accounts Date

Accounts Date means 30 April 2021

Associated Person has the meaning given in paragraph 15 of Schedule 4

Authority means any local, national or multinational governmental authority or other public or regulatory body which has jurisdiction over the Business and Authorities will be construed accordingly

76 

Bad Leaver means where the Seller ceases to be an employee or director or consultant of any member of the Buyer's Group:

(a) as a result of his voluntary resignation from such employment or engagement (which for the avoidance of doubt will exclude circumstances where (a) such person is constructively dismissed and/or unfairly constructively dismissed as a consequence of a breach by a member of the Buyer's Group of such person's contract of employment or engagement, or (b) such resignation is a result of long term illness, permanent disability or incapacity as a result of ill health or injury of such person;

(b) as a result of the Seller:

(i) committing fraud or fraudulent misrepresentation;

(ii) being in breach of any restrictive covenants set out in the Shareholders' Agreement and/or the Service Agreement; or

(iii) committing an act of discrimination or harassment which the Buyer (acting in good faith) determines is reasonably likely to result in material financial loss or material reputational damage to the Company

Base Estimated Completion Cash has the meaning given in Part 1 of Schedule 6

Base Estimated Completion Debt has the meaning given in Part 1 of Schedule 6

Base Estimated Completion Working Capital has the meaning given in Part 1 of Schedule 6

Business means the business carried on by the Company as at Completion

Business Day means any day on which banks are open for business in London (excluding Saturdays, Sundays and public holidays)

Buyer Account has the meaning given in clause 11.3

Buyer Shares means common shares in the capital of the Buyer

Buyer Warranties means the warranties given by the Buyer under clause 6.5 and as set out in Schedule 9

Buyer's Group means the Buyer, any subsidiary of the Buyer (including, following Completion, the Company), any holding company of the Buyer and any subsidiary of any holding company of the Buyer, in each case for the time being and member of the Buyer's Group shall be construed accordingly

Buyer's Solicitors means Xxxxxxxxxxxxxxxxxxxxx, Aldgate Tower, 2 Leman Street, London E1 8QN

CJRS has the meaning given in paragraph 20 of Schedule 4

Claims has the meaning given in paragraph 1 of Schedule 5 and a Claim means any one of such Claims

Company means Enigmaa Ltd., further details of which are set out in Schedule 1

Company Account has the meaning given in clause 11.5

Company IP has the meaning given in paragraph 9.1 of ‎‎Schedule 4

Competition Laws has the meaning given in paragraph 13(c) of Schedule 4

Completion means completion of the sale and purchase of the Shares under this Agreement

77 

Completion Accounts has the meaning given in Part 1 of Schedule 6

Completion Accounts Reference Date has the meaning given in Part 1 of Schedule 6

Completion Cash has the meaning given in Part 1 of Schedule 6

Completion Date has the meaning given in clause 5.1

Completion Debt has the meaning given in Part 1 of Schedule 6

Completion Working Capital has the meaning given in Part 1 of Schedule 6

Conditions means the EL Condition and the TSXV Condition.

Control has the meaning given in section 1124 of the CTA 2010, and the expression Change of Control shall be construed accordingly.

Consents has the meaning given in paragraph 16 of Schedule 4

Consideration Shares has the meaning given in clause 4.4

COVID-19 has the meaning given in paragraph 20 of Schedule 4

COVID-19 Facilities has the meaning given in paragraph 20(c) of Schedule 4

Current Use means the identified use for the Property as set out in Schedule 7

Data Protection Laws means UK GDPR (as defined in the Data Protection Act 2018), the Data Protection Act 2018 and the Privacy and Electronic Communications (EC Directive) Regulations 2003

Data Room Documents means the documents relating to the Business uploaded in the electronic data room administered by the Buyer's Solicitors and hosted by HighQ

Data Room File Share means the ShareFile link containing an electronic copy of the Data Room Documents

Debt has the meaning given in Part 1 of Schedule 6

Deed of IP Assignment means the deed of intellectual property assignment in the agreed form to be made between the Company and the Seller

Director means each person who is a director or shadow director of the Company, as set out in Schedule 1

Disclosure Letter means the letter dated the same date as this Agreement from the Seller to the Buyer relating to the Warranties

draft Completion Accounts has the meaning given in paragraph 3 of Part 3 of Schedule 6

EHS Laws: all laws, statutes, regulations, subordinate legislation, bye-laws, common law and other national, international, federal, European Union, state and local laws, judgments, decisions and injunctions of any court or tribunal, and codes of practice and guidance notes which from time to time apply to the Company (or any part of its business) to and the extent that they relate to or apply to the Environment, energy efficiency, climate change or the health and safety of any person

EHS Permits: any permits, licences, consents, certificates, registrations, notifications or other authorisations required under any EHS Laws for the operation of the Business or in relation to the Property.

78 

EL Condition: means the establishment by the Company of a live employer’s liability insurance policy in accordance with the Employer’s Liability (Compulsory Insurance) Act 1969;

Employees has the meaning given in paragraph 6.1(a)(i) of Schedule 4

English courts has the meaning given in clause 23.3

Environment means the natural and man-made environment including all or any of the following media: air (including air within buildings and other natural or man-made structures above or below the ground), water, land, and any ecological systems and living organisms (including man) supported by those media

Escrow Account has the meaning given in clause 4.2

Escrow Agent means Garfinkle Biderman LLP

Escrow Agreement mean the escrow agreement in the agreed form to be entered into at Completion and between the Escrow Agent, the Buyer and the Seller

Escrow Shares has the meaning given in clause 4.2

Estimated Liability has the meaning given in clause 4.5(d)(i)(A)

exit day has the meaning set out in the European Union (Withdrawal) Act 2018

Expenses has the meaning given in paragraph 1 of Schedule 5

First Leaver Notice Period means the period of one month following the date the Seller has become a Bad Leaver but at all times prior to the expiry of First Relevant Period such that the one month period shall be reduced accordingly to the extent any part of such period is after the expiry of the First Relevant Period

First Escrow Release means 50 per cent of the Escrow Shares

First Release Date means the date falling 12 months after the Completion Date

First Relevant Period has the meaning given in clause 4.5

Flexible Furlough has the meaning given in paragraph 20 of Schedule 4

Furlough has the meaning given in paragraph 20 of Schedule 4

CJRS has the meaning given in paragraph 20 of Schedule 4

Further Review Period has the meaning given in paragraph 5.1 of Part 3 of Schedule 6

Governmental Entity means any supranational, national, state, municipal, local, or foreign government, any instrumentality, subdivision, court, administrative agency or commission, or other governmental authority, or any quasi-governmental or private body exercising any regulatory or other governmental or quasi-governmental authority and includes, for the avoidance of doubt, the TSXV and NASDAQ

ICAEW means the Institute of Chartered Accountants in England and Wales

Indemnities means the indemnities in clauses 8.1(a) to 8.1(j) inclusive, and Indemnity shall mean any one of them

Indemnity Claim means a claim by the Buyer under any Indemnity

Initial Cash Purchase Price has the meaning given in clause 4.1

79 

Intellectual Property has the meaning given in paragraph 9.1 of Schedule 4

Interim Period means the period from (and including) the date of this Agreement up to (and including) the Completion Date or, if earlier, the termination of this Agreement in accordance with its terms

IT Systems means the network and information systems that are owned, used or held for use by the Company, including: (i) all computer hardware (including network and telecommunications equipment and related peripherals) and mobile devices; (ii) all software (including associated user manuals, object code and source code and other materials sufficient to enable a reasonably skilled programmer to maintain and modify the software (Source Code)) and firmware (Software); and (iii) all databases (Databases)

Junior Employment Agreement Variations means each of the variations to employment contracts in the agreed form to be made between the Company and xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

Key Warranties means those warranties at clause 3.3 and Key Warranty shall mean any one of them

Know-How has the meaning given in clause 4.1(c).

Laws means any federal, state, local, municipal, foreign, multi-national or other laws, common law, statutes, constitutions, ordinances, rules, regulations, codes, orders, or legally enforceable requirements enacted, issued, adopted, promulgated, enforced, ordered, or applied by any Governmental Entity

Lease Agreements has the meaning given in paragraph 3.1(a)(ii) of Schedule 4

Legal Action means any legal, administrative, arbitral, or other proceedings, suits, actions, investigations, examinations, claims, audits, hearings, charges, complaints, indictments, litigations, or examinations

Liabilities means any liability, indebtedness, or obligation of any kind (whether accrued, absolute, contingent, matured, unmatured, determined, determinable, or otherwise, and whether or not required to be recorded or reflected on a balance sheet under US GAAP)

Licence means the licence under which the Property is held

Lock-up Period has the meaning given in clause 4.4

Longstop Date: 31 December 2021 or such other date as may be agreed by the Buyer and the Seller in writing

Market Value has the meaning given in clause 4.4

Material Adverse Effect means any event, occurrence, fact, condition, or change that is, or would reasonably be expected to become, individually or in the aggregate, materially adverse to: (a) the business, results of operations, financial condition (financial or otherwise), or assets of the Buyer's Group, taken as a whole; or (b) the ability of the Buyer to consummate the transactions contemplated hereby on a timely basis, provided, however, that, for the purposes of paragraph (a), a Material Adverse Effect shall not be deemed to include events, occurrences, facts, conditions, or changes arising out of, relating to, or resulting from:

(i) changes generally affecting the economy, financial or securities markets, or political conditions;

(ii) the execution and delivery, announcement, or pendency of the transactions contemplated by this Agreement, including the impact thereof on relationships, contractual or otherwise, of the Buyer's Group with employees, suppliers, customers, Governmental Entities, or other third persons (it being understood and agreed that this definition shall not apply with respect to any warranty that is intended to address the consequences of the execution and delivery of this Agreement or the announcement or the pendency of this Agreement);

80 

(iii) any changes in applicable Law or applicable accounting standards, including interpretations thereof;

(iv) any outbreak or escalation of war or any act of terrorism,

(v) natural disasters, or weather conditions, epidemics, pandemics, or disease outbreaks (including the COVID-19 virus) / public health emergencies (as declared by the World Health Organization or the Health and Human Services Secretary of the United States), or other force majeure events;

(vi) general conditions in the industry in which each member of the Buyer's Group operate;

(vii) any failure, in and of itself, by the Buyer to meet any internal or published projections, forecasts, estimates, or predictions in respect of revenues, earnings, or other financial or operating metrics for any period (it being understood that the facts or occurrences giving rise to or contributing to such failure may be deemed to constitute, or be taken into account in determining whether there has been or would reasonably be expected to become, a Material Adverse Effect, to the extent permitted by this definition and not otherwise excepted by another clause of this proviso);

(viii) any change, in and of itself, in the market price or trading volume of the Buyer's securities (it being understood that the facts or occurrences giving rise to or contributing to such change may be deemed to constitute, or be taken into account in determining whether there has been or would reasonably be expected to become, a Material Adverse Effect, to the extent permitted by this definition and not otherwise excepted by another clause of this proviso); or

(ix) actions taken as required or specifically permitted by this Agreement; provided further, however, that any event, change, and effect referred to in clauses (i), (iii), (iv), (v), or (vi) immediately above shall be taken into account in determining whether a Material Adverse Effect has occurred or would reasonably be expected to occur to the extent that such event, change, or effect has a disproportionate effect on the Buyer's Group, taken as a whole, compared to other participants in the industries in which each member of the Buyer's Group conduct their businesses.

Material Suppliers has the meaning given in paragraph 4.2(a) of ‎Schedule 4

Money Purchase Benefits has the meaning given in paragraph 7 of Schedule 4

NASDAQ means the National Association of Securities Dealers Automated Quotations

New Process Agent has the meaning given in clause 25.1(c)

Non-contractual Assurance has the meaning given in clause 17.3

Notice has the meaning given in clause 12.1

Occupational Money Purchase Scheme has the meaning given in paragraph 7 of Schedule 4

81 

Officers has the meaning given in clause 6.1(c)

Permits means all permits, licences, registrations, variances, clearances, consents, commissions, franchises, exemptions, orders, authorisations, and approvals from Governmental Entities

Price Adjustment Experts has the meaning given in paragraph 6.1(b) of Part 3 of Schedule 6

Proceedings has the meaning given in paragraph 6.3(b) of Schedule 4

Process Agent has the meaning given in clause 25.1(a)

Property means the licensed property, details of which are set out in Schedule 7 (Property) and includes each and every part of, and any building on, such property

Purchase Price has the meaning given in clause 4.1

Qualifying Counsel means a barrister of at least 10 years' call and with experience of dealing in matters which form the subject matter of the relevant Disputed Claim

Release Date means the First Release Date or the Second Release Date (as the case may be).

Relevant Benefits has the meaning given in paragraph 7(a) of Schedule 4

Relevant Claim means a Warranty Claim or any claim under the Tax Covenant

Representative Body means any trade union, staff association, staff council, works council, information and consultation body and any other worker representatives relating to any person employed or engaged by or in the Company.

Restricted Area has the meaning given in clause 9.1

Restricted Period has the meaning given in clause 9.1

Restricted Person has the meaning given in clause 9.1

Restricted Products has the meaning given in clause 9.1

Review Period has the meaning given in paragraph 4 of Part 3 of Schedule 6

Second Leaver Notice Period means the period of one month following the date the Seller has become a Bad Leaver but at all times after the expiry of the First Relevant Period and prior to the expiry of the Second Relevant Period such that the one month period shall be reduced accordingly to the extent any part of such period is after the expiry of the Second Relevant Period

Second Escrow Release means those Escrow Shares remaining in the Escrow Account after the First Escrow Release

Second Release Date means the date falling 24 months after the Completion Date

Security Interest means any claim, mortgage, lien, pledge, charge, encumbrance, assignment, title retention, hypothecation, trust, option, right to acquire, right of pre-emption or other third party right, interest or equity or any other security agreement or arrangement.

Security Incident has the meaning given in paragraph 10(c)(i) of Schedule 4

Seller Account has the meaning given in clause 11.1

82 

Seller's Solicitors means Xxxxxxxxxxxxxxxxxxxxx of xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

Service Agreement means the service agreement in the agreed form between the Seller and the Company

Shareholders' Agreement means the agreement relating to the affairs of the Company in the agreed form to be entered into between the Company, the Buyer and the Seller on or around the date of this Agreement

Shares means 80 ordinary shares of £0.01 each in the capital of the Company

Significant Impact means where such breach gives rise to a bona fide, genuine claim for damages under this Agreement of an amount in excess of £1,000,000

Standard Software has the meaning given in paragraph 8(a) of Schedule 4

Tax and Taxation have the meanings given in Part 1 of Schedule 8

Tax Authority has the meaning given in Part 1 of Schedule 8

Tax Claim means a claim under the Tax Covenant and/or the Tax Warranties

Tax Covenant means the tax covenant set out in paragraph 2 of Part 1 of Schedule 8

Tax Warranties means the warranties set out in Part 4 of Schedule 8

Third Party Claim has the meaning given in paragraph 1 of ‎Schedule 5

Third Party Recovery has the meaning given in paragraph 10.1 of Schedule 5

Transaction Documents means this Agreement, the Disclosure Letter, the Deed of IP Assignment, the Service Agreement, the Junior Employment Agreements, the Articles of Association, the Escrow Agreement and the Shareholders' Agreement and any other documents referred to in this Agreement as being in the agreed form and any document from time to time entered into under or in connection with this Agreement

TSXV has the meaning given in clause 4.4(a)

TSXV Condition means the acceptance of the TSXV in principle of the issuance of the Consideration Shares on an expedited acquisition basis

Warranties means the Tax Warranties and the warranties given under clause 3.3, clause 6.1, clause 6.2(a) and set out in Schedule 4

Warranty Claim means any claim against the Seller arising as a consequence of any breach of the Warranties

Worker means any person who is not an Employee and personally performs work for the Company but who is not in business on their own account or in a client/customer relationship

83 

Schedule 11

Intellectual Property

Registered Intellectual Property Rights

Trademarks

Trademark Description	Trademark number	Country / territory	Registration date	Classes and terms
Xxxxxxxxx	XXXXXXX XXXXXX	Xxxxxxx xxxxxx	xxxxxx xxxx	Xxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx xxxxxxxxxx
Xxxxxxxxxx Xxxxxxxxxx	XXXXXX XXXXXXX	Xxxxxxx xxxxxxx	xxxxxxx xxxxxxxx	Xxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx Xxxxxxxxxx
Xxxxxxxx xxxxxxxxxxxxxxxxxxx Xxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxx Xxxxxxxxxx	Xxxxxxx xxx	Xxxxxx xxxx	Xxxxxx xxxx	Xxxxxxxxxx Xxxxxxxxxx Xxxxxxxxxx Xxxxxxxxxx

Domain names

Xxxxxxxxxx

Xxxxxxxxxx

Xxxxxxxxxx

Xxxxxxxxxx

Xxxxxxxxxx

Xxxxxxxxxx

Xxxxxxxxxx

Xxxxxxxxxx

Xxxxxxxxxx

Xxxxxxxxxx

Xxxxxxxxxx

Unregistered Intellectual Property Rights

Trademark Description	Country / territory	Date of first use	Classes and terms	Further details
Xxxxxxxxxx	Xxxxxxxxxx	Xxxxxxxxxx	Xxxxxxxxxx	Xxxxxxxxxx Xxxxxxxxxx
Xxxxxxxxxx	Xxxxxxxxxx	Xxxxxxxxxx	Xxxxxxxxxx Xxxxxxxxxx Xxxxxxxxxx Xxxxxxxxxx Xxxxxxxxxx	Xxxxxxxxxx
Xxxxxxxxxx	Xxxxxxxxxx	Xxxxxxxxxx	Xxxxxxxxxx Xxxxxxxxxx Xxxxxxxxxx Xxxxxxxxxx Xxxxxxxxxx	Xxxxxxxxxx Xxxxxxxxxx Xxxxxxxxxx Xxxxxxxxxx

84 

Xxxxxxxxxx Xxxxxxxxxx Xxxxxxxxxx Xxxxxxxxxx Xxxxxxxxxx Xxxxxxxxxx Xxxxxxxxxx Xxxxxxxxxx Xxxxxxxxxx Xxxxxxxxxx Xxxxxxxxxx Xxxxxxxxxx Xxxxxxxxxx Xxxxxxxxxx Xxxxxxxxxx Xxxxxxxxxx Xxxxxxxxxx Xxxxxxxxxx Xxxxxxxxxx Xxxxxxxxxx Xxxxxxxxxx Xxxxxxxxxx Xxxxxxxxxx Xxxxxxxxxx Xxxxxxxxxx Xxxxxxxxxx Xxxxxxxxxx Xxxxxxxxxx Xxxxxxxxxx Xxxxxxxxxx Xxxxxxxxxx

Intellectual Property Rights licensed from third parties

Xxxxxxxxxx

Intellectual Property Rights licensed to third parties

Xxxxxxxxxx

Schedule 12

Agreed form spreadsheet

85 

Executed as a deed by Vithursxxxxxxxxxxxxxxx in the presence of	)
	)	/s/ Virthurs xxxxxxxxxxxxxxx
	)
Signature of witness
Name
Address

Executed as a deed by Raj Grover, director and duly authorised signatory for and on behalf of High Tide Inc. in the presence of	)
	)	/s/ Raj Grover
	)
Signature of witness
Name
Address

86