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Published: 2023-05-10
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UNITED STATES 
SECURITIES AND EXCHANGE COMMISSION 
WASHINGTON D.C. 20549 
FORM 10-Q 
(Mark One) ☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. 
For the quarterly period ended March 31, 2023  
 ☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. 
For the transition period from                      to                      
Commission File Number 001-38783 
VILLAGE FARMS INTERNATIONAL, INC. 
(Exact name of Registrant as Specified in its Charter) 
 
Ontario 98-1007671
(State or other Jurisdiction of(I.R.S. Employer
Incorporation or Organization) Identification No.)
4700-80th Street 
Delta, British Columbia Canada 
V4K 3N3 
(Address of Principal Executive Offices) (Zip Code) 
(604) 940-6012 
Issuer’s phone number, including area code 
N/A 
(Former name, former address and former fiscal year, if changed since last report). 
Securities registered pursuant to Section 12(b) of the Act: 
 
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Shares, without par value VFF The Nasdaq Stock Market LLC
Indicate by checkmark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  
☒    No  ☐ 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files.    Yes  
☒    No  ☐    Not Applicable  ☐ 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer”, “small reporting
 company” and “emerging growth 
company” in Rule 12b-2 of the Exchange Act.  Large accelerated filer
 ☐    Accelerated filer ☒
Non-accelerated filer ☐    Smaller reporting company ☐
Emerging growth company ☐    
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    
☐ 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒ 
As of May 10, 2023, 110,238,929 shares of common stock were outstanding. 
TABLE OF CONTENTS 
 Page
PART I - FINANCIAL INFORMATIONItem 1.
Condensed Consolidated Financial Statements (Unaudited)
Condensed Consolidated Statements of Financial Position2
Condensed Consolidated Statements of Operations and Comprehensive Loss 3
Condensed Consolidated Statements of Changes in Shareholders’ Equity and Mezzanine Equity  4
Condensed Consolidated Statements of Cash Flows 5
Notes to Condensed Consolidated Financial Statements 6
Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations14
Item 3.Quantitative and Qualitative Disclosures About Market Risk 26
Item 4.Controls and Procedures 26
PART II - OTHER INFORMATION 28
Item 1.Legal Proceedings 28
Item 1A. Risk Factors 28
Item 6.Exhibits 29
Signatures 30
Forward Looking Statements 
As used in this Quarterly Report on Form 10-Q, the terms “Village Farms”, “Village Farms International”, the “Company”, “we”, “us”, “our” and similar references refer to Village Farms International, Inc. and our consolidated subsidiaries, and the term “Common Shares” refers to our common shares, no par value. Our financial information is presented in U.S. dollars and all references in this Quarterly Report on Form 10-Q to “$” means U.S. dollars and all references to “C$” means Canadian dollars. This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 27A of the U.S. Securities Act of 1933, as amended, (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and is subject to the safe harbor created by those sections. This Quarterly Report on Form 10-Q also contains "forward-looking information" within the meaning of applicable Canadian securities laws. We refer to such forward-looking statements and forward-looking information collectively as "forward-looking statements". Forward-looking statements may relate to the Company's future outlook or financial position and anticipated events or results and may include statements regarding the financial position, business strategy, budgets, expansion plans, litigation,  projected  production,  projected  costs,  capital  expenditures,  financial  results,  taxes,  plans  and  objectives  of  or  involving  the  Company. Particularly, statements regarding future results, performance, achievements, prospects or opportunities for the Company, the greenhouse vegetable or produce industry and the cannabis industry and market are forward-looking statements. In some cases, forward-looking information can be identified by such terms as "can", "outlook", "may", "might", "will", "could", "should", "would", "occur", "expect", "plan", "anticipate", "believe", "intend", "try", "estimate", "predict", "potential", "continue", "likely", "schedule", "objectives", or the negative or grammatical variation thereof or other similar expressions concerning matters that are not historical facts. The forward-looking statements in this Quarterly Report on Form 10-Q are subject to risks that may include, but are not limited to: our limited operating history in the cannabis and cannabinoids industry, including that of Pure Sunfarms, Inc. (“Pure Sunfarms”), Rose LifeScience Inc. (“Rose” or “Rose LifeScience”) and Balanced Health Botanicals, LLC (“Balanced Health”); the legal status of the cannabis business of Pure Sunfarms and Rose and the hemp business of Balanced Health; risks relating to the integration of Balanced Health and Rose into our consolidated business; risks relating to obtaining additional financing on acceptable terms, including our dependence upon credit  facilities  and  dilutive  transactions;  potential  difficulties  in  achieving  and/or  maintaining  profitability;  variability  of  product  pricing;  risks inherent in the cannabis, hemp, CBD, cannabinoids, and agricultural businesses; our market position and competitive position; our ability to leverage current business relationships for future business involving hemp and cannabinoids; the ability of Pure Sunfarms and Rose to cultivate and distribute cannabis  in  Canada;  existing  and  new  governmental  regulations,  including  risks  related  to  regulatory  compliance  and  regarding  obtaining  and maintaining licenses required under the Cannabis Act (Canada), the Criminal Code and other Acts, S.C. 2018, C. 16 (Canada) for its Canadian operational facilities, and changes in our regulatory requirements; legal and operational risks relating to expected conversion of our greenhouses to cannabis production in Canada and in the United States; risks related to rules and regulations at the U.S. Federal (Food and Drug Administration and  United  States  Department  of  Agriculture),  state  and  municipal  levels  with  respect  to  produce  and  hemp,  cannabidiol-based  products commercialization; retail consolidation, technological advances and other forms of competition; transportation disruptions; product liability and other potential litigation; retention of key executives; labor issues; uninsured and underinsured losses; vulnerability to rising energy costs; inflationary effects on costs of cultivation and transportation; recessionary effects on demand of our products; environmental, health and safety risks, foreign exchange exposure, risks associated with cross-border trade; difficulties in managing our growth; restrictive covenants under our credit facilities; natural catastrophes; rising interest rates; and tax risks. The Company has based these forward-looking statements on factors and assumptions about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy and financial needs. Although the forward-looking statements contained in this Quarterly Report on Form 10-Q are based upon assumptions that management believes are reasonable based on information currently available to management, there can be no assurance that actual results will be consistent with these forward-looking statements. Forward-looking statements necessarily involve known and unknown risks and uncertainties, many of which are beyond the Company's control, which may cause the Company's or the industry's actual results, performance, achievements, prospects and opportunities in future periods to differ materially from those expressed or implied by such forward-looking statements. These risks and uncertainties include, among other things, the factors contained in the Company's filings with securities regulators, including this Quarterly Report on Form 10-Q. When relying on forward-looking statements to make decisions, the Company cautions readers not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties and should not be read as guarantees of future results, performance, achievements, prospects and opportunities. The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events or information as of the date on which the statements are made in this Quarterly Report on Form 10-Q. Except as required by law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.
1
Village Farms International, Inc. 
Condensed Consolidated Statements of Financial Position 
(In thousands of United States dollars, except share data) 
(Unaudited) 
March 31, 2023December 31, 2022
ASSETS
Current assets
Cash and cash equivalents$29,884$16,676
Restricted cash5,0005,000
Trade receivables26,79627,558
Inventories75,03470,582
Other receivables265309
Income tax receivable3,3396,900
Prepaid expenses and deposits5,8975,959
Total current assets146,215132,984
Non-current assets
Property, plant and equipment205,848207,701
Investments2,1092,109
Goodwill66,28566,225
Intangibles36,81037,157
Deferred tax asset4,2014,201
Right-of-use assets8,6629,132
Other assets5,8335,776
Total assets$475,963$465,285
LIABILITIES
Current liabilities
Line of credit$4,000$7,529
Trade payables18,45924,894
Current maturities of long-term debt9,5049,646
Accrued sales taxes13,74611,594
Accrued loyalty program2,1392,060
Accrued liabilities14,39213,064
Lease liabilities - current1,9661,970
Other current liabilities1,7341,458
Total current liabilities65,94072,215
Non-current liabilities
Long-term debt42,52643,821
Deferred tax liability19,06219,756
Lease liabilities - non-current7,3147,785
Other liabilities1,8301,714
Total liabilities136,672145,291
Commitments and contingencies
MEZZANINE EQUITY
Redeemable non-controlling interest16,13416,164
SHAREHOLDERS’ EQUITY
Common stock, no par value per share - unlimited shares authorized;   110,238,929 shares issued and outstanding at March 31, 2023 and 91,788,929 shares issued and outstanding at December 31, 2022.
386,719372,429
Additional paid in capital24,23213,372
Accumulated other comprehensive loss(7,509)(8,371)
Retained earnings(81,003)(74,367)
Total Village Farms International, Inc. shareholders’ equity322,439303,063
Non-controlling interest718767
Total shareholders’ equity323,157303,830
Total liabilities, mezzanine equity and shareholders’ equity$475,963$465,285
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
2
Village Farms International, Inc. 
Condensed Consolidated Statements of Operations and Comprehensive Loss 
(In thousands of United States dollars, except per share data) 
(Unaudited) 
Three Months Ended March 31,
20232022
Sales$64,656$70,156
Cost of sales(52,356)(60,252)
Gross margin12,3009,904
Selling, general and administrative expenses(17,405)(17,935)
Interest expense(1,133)(683)
Interest income196110
Foreign exchange (loss) gain(69)319
Other income (expense)30(8)
Loss before taxes and loss from equity method investments(6,081)(8,293)
(Provision for) recovery of income taxes(634)1,666
Loss from equity method investments—(52)
Loss including non-controlling interests(6,715)(6,679)
Less: net loss attributable to non-controlling interests, net of tax79162
Net loss attributable to Village Farms International, Inc.$(6,636)$(6,517)
Basic loss per share attributable to Village Farms International, Inc. shareholders$(0.06)$(0.07)
Diluted loss per share attributable to Village Farms International, Inc. shareholders$(0.06)$(0.07)
Weighted average number of common shares used   in the computation of net loss per share (in thousands):
Basic104,09788,376
Diluted104,09788,376
Loss including non-controlling interests$(6,715)$(6,679)
Other comprehensive income:
Foreign currency translation adjustment862461
Comprehensive loss including non-controlling interests(5,853)(6,218)
Comprehensive loss (income) attributable to non-controlling interests(42)162
Comprehensive loss attributable to Village Farms International, Inc. shareholders$(5,895)$(6,056)
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. 
3
Village Farms International, Inc. 
Condensed Consolidated Statements of Changes in Shareholders’ Equity and Mezzanine Equity 
(In thousands of United States dollars, except for shares outstanding) 
(Unaudited) 
Three Months Ended March 31, 2023
Accumulated 
Other
Number of Additional Comprehensive Non-Total 
CommonCommon Paid in(Loss)Retained Earningscontrolling Shareholders’Mezzanine 
SharesStockCapitalIncomeInterestEquityEquity
Balance at January 1, 202391,789$ 372,429$13,372$(8,371) $ (74,367)$767$303,830$16,164
Shares issued in public offering, net of issuance costs
18,35014,207————14,207—
Warrants issued in public offering——9,128———9,128
Shares issued on exercise of stock options
10083————83—
Share-based compensation——1,732———1,732—
Cumulative translation adjustment———862——862—
Net loss————(6,636)(49)(6,685)(30)
Balance at March 31, 2023110,239$ 386,719$24,232$(7,509) $ (81,003)$718$323,157$16,134
Three Months Ended March 31, 2022
Accumulated 
Number of Additional paid OtherTotal 
CommoninComprehensive Retained EarningsShareholders’Mezzanine 
SharesCommon StockcapitalIncomeEquityEquity
Balance at January 1, 202288,234$365,561$9,369$6,696$26,779$408,405$16,433
Shares issued on exercise of stock options
328176———176—
Share-based compensation——964——964—
Cumulative translation adjustment
———3,529—3,529—
Net loss————(6,517)(6,517)(162)
Balance at March 31, 202288,562$365,737$10,333$10,225$20,262$406,557$16,271
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. 
4
Village Farms International, Inc. 
Condensed Consolidated Statements of Cash Flows 
(In thousands of United States dollars) 
(Unaudited) 
Three Months Ended March 31,
20232022
Cash flows used in operating activities:
Net loss$(6,636) $(6,517)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization3,9863,128
Amortization of deferred charges3466
Share of loss from joint ventures—52
Net loss attributable to non-controlling interest(79)—
Interest expense1,133683
Interest income(196)(110)
Interest paid on long-term debt(1,511)(747)
Unrealized foreign exchange gain/loss(13)113
Loss on disposal of assets4—
Operating lease liabilities(4)(116)
Share-based compensation1,732964
Deferred income taxes(734)(2,062)
Changes in non-cash working capital items(1,384)(5,091)
Net cash used in operating activities(3,668)(9,637)
Cash flows used in investing activities:
Purchases of property, plant and equipment(1,076)(5,263)
Note receivable—(3,442)
Net cash used in investing activities(1,076)(8,705)
Cash flows provided by financing activities:
Proceeds from borrowings—2,120
Repayments on borrowings(4,788)(983)
Proceeds from issuance of common stock and warrants24,772—
Issuance costs(1,437)—
Proceeds from exercise of stock options83176
Payments on capital lease obligations—(301)
Net cash provided by financing activities18,6301,012
Effect of exchange rate changes on cash and cash equivalents(678)96
Net increase (decrease) in cash, cash equivalents and restricted cash13,208(17,234)
Cash, cash equivalents and restricted cash, beginning of period21,67658,667
Cash, cash equivalents and restricted cash, end of period$34,884$41,433
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. 
5
````
VILLAGE FARMS INTERNATIONAL, INC. 
Notes to Condensed Consolidated Financial Statements 
(In thousands of United States dollars, except per share amounts, unless otherwise noted) 
1.BUSINESS, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES 
Nature of Business
Village Farms International, Inc. (“VFF” and, together with its subsidiaries, the “Company”, “we”, “us”, or “our”) is a 
corporation existing under the Ontario Business Corporations Act. VFF’s principal operating subsidiaries as of March 31, 2023 
are Village Farms Canada Limited Partnership, Village Farms, L.P., Pure Sunfarms Corp. (“Pure Sunfarms”), and Balanced 
Health Botanicals, LLC (“Balanced Health”). VFF also owns a 70% interest in Rose LifeScience Inc. (“Rose”) and an 85% 
interest in Leli Holland B.V. ("Leli").
The address of the registered office of VFF is 4700-80th Street, Delta, British Columbia, Canada, V4K 3N3.   
The Company’s shares are listed on Nasdaq Capital Market (“Nasdaq”) under the symbol “VFF”.
Village Farms owns and operates sophisticated, highly intensive agricultural greenhouse facilities in British Columbia and 
Texas, where it produces, markets and sells premium-quality tomatoes, bell peppers, and cucumbers. Its wholly owned 
subsidiary, Pure Sunfarms, is a vertically integrated licensed producer and supplier of cannabis products to be sold to other 
licensed providers and provincial governments across Canada and internationally. Through its 70% ownership of Rose, the 
Company has a substantial presence in the Province of Quebec as a cannabis supplier, producer and commercialization expert. 
The Company’s wholly owned subsidiary, Balanced Health, develops and sells high-quality cannabidiol (“CBD”) based 
products including ingestible, edible and topical applications.  
Basis of Presentation
The accompanying condensed consolidated financial statements are unaudited and have been prepared in accordance with 
accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the 
instructions for Form 10-Q and Rule 10-01 of Regulation S-X. Pursuant to these rules and regulations, certain information and 
footnote disclosures normally included in the annual audited consolidated financial statements prepared in accordance with U.S. 
GAAP have been condensed or omitted. The accompanying condensed consolidated statement of financial position as of 
December 31, 2022 is derived from the Company’s audited financial statements as of that date. Because certain information and 
footnote disclosures have been condensed or omitted, these condensed consolidated financial statements should be read in 
conjunction with the audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2022 
contained in the Company’s 2022 Annual Report on Form 10-K (the “2022 Form 10-K”). In management’s opinion, all normal 
and recurring adjustments considered necessary for a fair presentation of the financial position, results of operations, and cash 
flows for the periods presented have been included. When necessary, certain prior year amounts have been reclassified to 
conform with the current period presentation. For the three months ended March 31, 2022, share-based compensation has been 
reclassified to selling, general and administrative expenses on the Condensed Consolidated Statements of Operations and 
Comprehensive Loss to conform with the current period presentation. Interim period operating results do not necessarily 
indicate the results that may be expected for any other interim period or for the full fiscal year. The Company believes that the 
disclosures made in these consolidated financial statements are adequate to make the information not misleading.
Principals of Consolidation
The accompanying Condensed Consolidated Financial Statements include Village Farms International, Inc. and its subsidiaries 
and include the accounts of all majority-owned subsidiaries over which the Company exercises control and, when applicable, 
entities in which the Company has a controlling financial interest.  All significant intercompany balances and transactions have 
been eliminated in consolidation. Other parties’ interests in entities that the Company consolidates are reported as non-
controlling interests within equity, except for mandatorily redeemable non-controlling interests, which are recorded within other 
liabilities. Net income or loss attributable to non-controlling interests is reported as a separate line item below net income or 
loss. The Company applies the equity method of accounting for its investments in entities for which it does not have a 
controlling financial interest, but over which it has the ability to exert significant influence. For equity investees in which the 
Company has an undivided interest in the assets, liabilities and profits or losses of an unconsolidated entity, but does not 
exercise control over the entity, the Company consolidates its proportional interest in the accounts of the entity. 
Translations of Foreign Currencies
The assets and liabilities of foreign subsidiaries with a functional currency other than the U.S. dollar are translated into U.S. 
dollars at period-end exchange rates, with resulting translation gains or losses included within other comprehensive income or 
loss. Revenue and expenses are translated into U.S. dollars at average rates of exchange during the applicable period. 
Substantially all of the Company’s foreign operations use their local currency as their functional currency. For foreign 
operations for which the local currency is not the functional currency, the operation’s non-monetary assets are remeasured into 
U.S. dollars at historical exchange rates. All other accounts are remeasured at current exchange rates. Gains or losses from 
6
VILLAGE FARMS INTERNATIONAL, INC. 
Notes to Condensed Consolidated Interim Financial Statements 
(In thousands of United States dollars, except per share amounts, unless otherwise noted) 
remeasurement are included in other income or expense, net. Currency gains or losses resulting from transactions executed in 
currencies other than the functional currency are included in other income or expense, net.
General Economic, Regulatory and Market Conditions
The Company has experienced, and may continue to experience, direct and indirect negative effects on its business and 
operations from negative economic, regulatory and market conditions, including recent inflationary effects on fuel prices, labor 
and materials costs, rising interest rates, potential recessionary impacts and supply chain disruptions that could negatively affect 
demand for new projects and/or delay existing project timing or cause increased project costs. The extent to which general 
economic, regulatory and market conditions could affect the Company’s business, operations and financial results is uncertain as 
it will depend upon numerous evolving factors that management may not be able to accurately predict, and, therefore, any future 
impacts on the Company’s business, financial condition and/or results of operations cannot be quantified or predicted with 
specificity.
Recent Accounting Pronouncements
No accounting pronouncements recently issued or newly effective have had, or are expected to have, a material impact on the 
Company’s condensed consolidated financial statements.
2.      INVENTORIES 
Inventories consisted of the following as of: 
December 31, 
ClassificationMarch 31, 20232022
Cannabis:
Raw materials$879 $1,089
Work-in-progress8,40310,872
Finished goods41,46036,094
Packaging7,5876,909
Produce and Energy:
Crop inventory15,50914,886
Purchased produce inventory1,063599
Spare parts inventory and packaging133133
Inventory$75,034 $70,582
3.      PROPERTY, PLANT AND EQUIPMENT  
Property, plant and equipment consisted of the following as of: 
ClassificationMarch 31, 2023December 31, 2022
Land$13,425 $13,411
Leasehold and land improvements5,5465,372
Buildings214,381214,146
Machinery and equipment83,44782,396
Construction in progress10,20610,033
Less: Accumulated depreciation(121,157)(117,657)
Property, plant and equipment, net$205,848 $207,701
7
VILLAGE FARMS INTERNATIONAL, INC. 
Notes to Condensed Consolidated Interim Financial Statements 
(In thousands of United States dollars, except per share amounts, unless otherwise noted) 
4.      GOODWILL AND INTANGIBLE ASSETS
Goodwill
The following table presents the changes in the carrying value of goodwill by reportable segment for the three months ended March 31, 2023:
Cannabis - Cannabis - United 
CanadaStatesTotal
Balance as of December 31, 2022
$44,886$21,339$66,225
Foreign currency translation adjustment
60—60
Balance as of March 31, 2023 $44,946$21,339$66,285
Intangible Assets
Intangibles consisted of the following as of: 
ClassificationMarch 31, 2023December 31, 2022
Licenses$18,200$17,691
Brand and trademarks*12,72312,719
Customer relationships13,30913,291
Computer software1,9561,955
Other*144144
Less: Accumulated amortization(4,892)(4,013)
Less: Impairments(4,630)(4,630)
Intangibles, net$36,810$37,157
* Indefinite-lived intangible assets
The expected future amortization expense for definite-lived intangible assets as of March 31, 2023 was as follows:
Fiscal periodRemainder of 2023
$2,403
20243,145
20253,058
20262,969
20272,969
Thereafter14,029
Intangibles, net$28,573
Quarterly Assessment for Indicators of Impairment
During the first quarter of 2023, the Company considered qualitative factors in assessing for impairment indicators for the Company’s US and Canadian cannabis segments. As part of this assessment, the Company considered both external and internal factors, including overall financial performance and outlook. At March 31, 2023, the Company concluded that no impairment indicators existed as no events or circumstances occurred that would, more likely than not, reduce the fair value of the reporting units to be below their carrying amounts.
8
VILLAGE FARMS INTERNATIONAL, INC. 
Notes to Condensed Consolidated Interim Financial Statements 
(In thousands of United States dollars, except per share amounts, unless otherwise noted) 
5.     LINE OF CREDIT AND LONG-TERM DEBT
The following table provides details for the carrying values of debt as of:
December 31, 
March 31, 20232022
Term Loan - ("FCC Loan") - repayable by monthly principle payments of $164 and accrued interest at a rate of 8.25%; matures April 1, 2025
$24,264$24,755
Term Loan - Pure Sunfarms - C$19.0M - Canadian prime interest rate plus an applicable margin, repayable in quarterly payments equal to 2.50% of the outstanding principal amount, interest rate of 8.95%; matures February, 2026
9,2949,664
Term loan - Pure Sunfarms - C$25.0M - Canadian prime interest rate plus an applicable margin, repayable in quarterly payments equal to 2.50% of the outstanding principal amount starting June 30, 2021, interest rate of 8.95%; matures February, 2026
14,40614,867
BDC Facility - Pure Sunfarms - non-revolving demand loan at prime interest plus 3.75%, matures December 31, 2031
4,0664,181
Total$52,030$53,467
On March 13, 2023, the Company entered into a Note Modification Agreement (the “Modification”) for its line of credit ("Operating Loan"). The Modification eliminated the use of LIBOR as a basis to determine certain interest rates and transitioned to the Secured Overnight Financing Rate (“SOFR”) for such purposes.  This Modification did not have a material effect on the Company's results of operations or its financial position. The Company’s Operating Loan had $4,000 amount drawn on the facility as of March 31, 2023 and December 31, 2022.             
The Company has two Pure Sunfarms Term Loans (“PSF Term Loans”) that had a maturity in February 2024.  The PSF Term Loans were amended in May 2023 to, among other changes, extend the maturity date of the PSF Term Loans to February 2026.  The other terms and conditions of the PSF Term Loans remain substantially the same.  
The carrying value of the assets and securities pledged as collateral for the FCC Loan as of March 31, 2023 and December 31, 2022 was $123,248 and $113,159, respectively.
The carrying value of the assets pledged as collateral for the Operating Loan as of March 31, 2023 and December 31, 2022 was $27,142 and $26,666, respectively.
The Pure Sunfarms line of credit had $0 and $3,529 outstanding as of March 31, 2023 and December 31, 2022, respectively. As of March 31, 2023 and December 31, 2022, Pure Sunfarms had an outstanding letter of credit issued to BC Hydro against the revolving line of credit of $C5,145.
The Company is required to comply with financial covenants, measured either quarterly or annually depending on the covenant. The Company was in compliance with all of its credit facility covenants as of March 31, 2023. 
The weighted average annual interest rate on short-term borrowings as of March 31, 2023 and December 31, 2022 was 9.45% and 9.12%, respectively.     
Accrued interest payable on the Credit Facilities and loans as of March 31, 2023 and December 31, 2022 was $345 and $398, respectively, and these amounts are included in accrued liabilities in the Condensed Statements of Financial Position. 
9
VILLAGE FARMS INTERNATIONAL, INC. 
Notes to Condensed Consolidated Interim Financial Statements 
(In thousands of United States dollars, except per share amounts, unless otherwise noted) 
The aggregate annual maturities of long-term debt for the remainder of 2023 and thereafter are as follows: 
Remainder of 2023$6,262
20247,270
202527,401
202618,129
2027677
Thereafter2,225
Total
$61,964
6.    FINANCIAL INSTRUMENTS 
The Company’s financial instruments include cash and cash equivalents, trade receivables, note receivables, investments, trade 
payables, accrued liabilities, lease liabilities, note payables and debt. The carrying value of cash and cash equivalents, trade receivables, notes receivable, trade payables, and accrued liabilities approximate their fair values due to the short-term maturity of these financial instruments. The carrying value of lease liabilities, notes payable, and debt approximate their fair values due to insignificant changes in credit risk. For its investments, the Company has selected the practicability election to fair value measurement, under which the investment is measured at cost, less impairment, plus or minus observable price changes of an identical or similar investment.
7.     RELATED PARTY TRANSACTIONS AND BALANCES                                                                                                                           
One of the Company’s employees is related to a member of the Company’s executive management team and received approximately $30 and $24 in salary and benefits during the three months ended March 31, 2023 and 2022, respectively. 
8.     INCOME TAXES 
The Company has recorded a provision for income taxes of $634 for the three months ended March 31, 2023, compared with a recovery of income taxes of $1,666 for the same period last year.
The Company’s income tax provision is based on management’s estimate of the effective tax rate for the full year. The tax provision (benefit) in any period will be affected by, among other things, permanent, as well as temporary, differences in the deductibility of certain items, changes in the valuation allowance related to net deferred tax assets, in addition to changes in tax legislation. As a result, the Company may experience significant fluctuations in the effective book tax rate (that is, tax expense divided by pre-tax book income) from period to period.
In order to fully utilize the net deferred tax assets, the Company will need to generate sufficient taxable income in future years. The Company analyzed all positive and negative evidence to determine if, based on the weight of available evidence, it is more likely than not to realize the benefit of the net deferred tax assets. The recognition of the net deferred tax assets and related tax benefits is based upon the Company’s conclusions regarding, among other considerations, estimates of future earnings based on information currently available and current and anticipated customers, contracts, and product introductions, as well as historical operating results and certain tax planning strategies.
Based on the analysis of all available evidence, both positive and negative, the Company has concluded that it does not have the ability to generate sufficient taxable income in the necessary period to utilize the entire benefit for the deferred tax assets. Accordingly, the Company established a valuation allowance of $31,091 and $30,419 as of March 31, 2023 and December 31, 2022, respectively. The Company cannot presently estimate what, if any, changes to the valuation of its deferred tax assets may be deemed appropriate in the future. If the Company incurs future losses, it may be necessary to record additional valuation allowance related to the deferred tax assets recognized as of March 31, 2023.
As of March 31, 2023, the Company’s net deferred tax assets totaled approximately $4,201 and were primarily derived from net operating loss carryforwards.
10
VILLAGE FARMS INTERNATIONAL, INC. 
Notes to Condensed Consolidated Interim Financial Statements 
(In thousands of United States dollars, except per share amounts, unless otherwise noted) 
9.    SEGMENT AND GEOGRAPHIC INFORMATION 
Segment reporting is prepared on the same basis that the Company’s Chief Executive Officer, who is the Company’s Chief Operating Decision Maker, manages the business, makes operating decisions and assesses performance. 
As of March 31, 2023, the Company’s four segments are as follows:
SegmentDescription
ProduceThe Produce segment produces, markets, and sells premium quality tomatoes, bell peppers and cucumbers.
Cannabis – CanadaThe Cannabis – Canada segment produces and supplies cannabis products to be sold to other licensed providers and provincial governments across Canada and internationally.
Cannabis – United StatesThe Cannabis – United States segment develops and sells high-quality, CBD-based health and wellness products including ingestible, edible and topical applications.
EnergyThe Energy business produces power that it sells per a long-term contract to its one customer.
The Company’s primary operations are in the United States and Canada. Segment information is summarized below: 
Three months ended March 31,
20232022
Sales
Produce$34,567 $41,349
Cannabis - Canada25,11221,769
Cannabis - United States4,9777,043
Energy—(5)
 $64,656 $70,156
Gross margin
Produce$614 $(4,290)
Cannabis - Canada8,4559,510
Cannabis - United States3,2384,712
Energy(7)(28)
 $12,300 $9,904
10.    LOSS PER SHARE 
Basic and diluted net loss per common share is calculated as follows: 
Three months ended March 31,
20232022
Numerator:Net loss
$(6,636) $(6,517)
Denominator:Weighted average number of common shares - basic
104,09788,376
Effect of dilutive securities- share-based employee options and awards
——
Weighted average number of common shares - diluted104,09788,376
Antidilutive options and awards6,1573,622
Net loss per ordinary share:Basic
$(0.06) $(0.07)
Diluted$(0.06) $(0.07)
11
VILLAGE FARMS INTERNATIONAL, INC. 
Notes to Condensed Consolidated Interim Financial Statements 
(In thousands of United States dollars, except per share amounts, unless otherwise noted) 
11.   SHAREHOLDERS’ EQUITY AND SHARE-BASED COMPENSATION 
Share-based compensation expense for the three months ended March 31, 2023 was $1,732 and $964, respectively.
Stock option activity for the three months ended March 31, 2023 was as follows: 
Weighted
Average
WeightedRemainingAggregate
Number ofAverageContractualIntrinsic
OptionsExercise PriceTerm (years)Value
Outstanding at January 1, 20234,089,418 $5.766.77 $152
Granted2,182,436 $1.089.85 $125
Exercised(100,000) $0.83$71
Forfeited(15,000) $3.25
Outstanding at March 31, 20236,156,854 $4.147.81 $2
Exercisable at March 31, 20232,512,569 $6.075.51 $2
Performance-based shares activity for the three months ended March 31, 2023 was as follows: 
Number of
Performance-basedWeighted Average 
Restricted Share Grant Date Fair 
UnitsValue
Outstanding at January 1, 202330,000$8.31
Outstanding at March 31, 202330,000$8.31
Exercisable at March 31, 202330,000$8.31
On January 30, 2023, the Company closed a public offering (the "Offering") of 18,350,000 Common Shares at a price of 
US$1.35 per share together with accompanying warrants to purchase up to 18,350,000 Common Shares, which have an exercise 
price of US$1.65 per share (the "Warrants"). The gross proceeds from the Offering were approximately US$25 million before 
deducting placement agent fees and other offering expenses payable by the Company. The proceeds from the Offering are 
intended to be used for general working capital. The accompanying Warrants have an exercise price of US$1.65 and will be 
exercisable beginning six months from issuance and will expire five years from the date of initial exercisability. 
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12.   CHANGES IN NON-CASH WORKING CAPITAL ITEMS
Three Months Ended March 31,
20232022
Trade receivables$1,193$(3,227)
Inventories(4,169)(10,145)
Due from joint ventures—(1,102)
Other receivables8(65)
Prepaid expenses and deposits63(327)
Trade payables(5,971)3,680
Accrued liabilities3,8695,781
Other assets, net of other liabilities3,623314
  $(1,384) $(5,091)
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with 
our unaudited condensed consolidated financial statements and related notes included in Item 1 of Part I of this Quarterly Report and the Management’s Discussion and Analysis of Financial Condition and Results of Operations and consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2022
 (our "Annual Report on Form 10-K"). This 
discussion and analysis contains forward-looking statements about our plans and expectations of what may happen in the future. Forward-looking statements are based on assumptions and estimates that are inherently subject to significant risks and uncertainties, and our actual results could differ materially from the results anticipated by our forward-looking statements. We encourage you to review the risks and uncertainties described in “Risk Factors” in Part I, Item 1A in our Annual Report on Form 10-K, and in Part II, Item 1A of this Quarterly Report. These risks and uncertainties could cause actual results to differ materially from those projected or implied by our forward-looking statements contained in this report. These forward-looking statements are made as of the date of this management’s discussion and analysis, and we do not intend, and do not assume any obligation, to update these forward-looking statements, except as required by law.
EXECUTIVE OVERVIEW 
Village Farms International, Inc. (“VFF”, together with its subsidiaries, the “Company”, “Village Farms”, “we” “us” or 
“our”) is a corporation existing under the Business Corporations Act (Ontario). The Company’s principal operating subsidiaries are Village Farms Canada LP, Village Farms LP, Pure Sunfarms Corp (“Pure Sunfarms”), Balanced Health Botanicals, LLC (“Balanced Health”), Rose LifeScience Inc. ("Rose LifeScience” or “Rose”) and VF Clean Energy, Inc. (“VFCE”). 
The Company’s vision is to be recognized as an international leader in consumer products developed from plants, whereby 
we produce and market value-added products that are consistently preferred by consumers. To do so, we leverage decades of cultivation expertise, investment, and experience in fresh produce across profitable, high growth plant-based opportunities.
In Canada, we converted two produce facilities to grow cannabis for the Canadian legal adult use (recreational) market. Our 
focus for our Canadian Cannabis segment is to produce high quality cannabis, leveraging our low-cost production to provide preferred products at an attractive price that address the largest consumer segments in the market. This market positioning, combined with our cultivation expertise, has enabled us to evolve into the best-selling Canadian licensed producer (“LP”) of dried flower products, the second best-selling Canadian producer overall and one of the few consistently adjusted EBITDA positive Canadian LPs.
Additionally, through organic growth, acquisitions and/or exports, we have a strategy to participate in other international 
markets where cannabis attains legal status. In September 2021, our Canadian Cannabis business began exporting cannabis products to Australia for that country’s medical market. In March 2022, our Canadian Cannabis business received European Union Good Manufacturing Practice (“EU GMP”) certification for Pure Sunfarms’ 1.1 million square foot Delta 3 cannabis facility located in Delta, British Columbia (“B.C.”) which permits Pure Sunfarms to export EU GMP-certified medical cannabis to importers and distributors in international markets that require EU GMP certification.  In late 2022, Pure Sunfarms commenced exports to Israel and in 2023, Pure Sunfarms began exporting cannabis products to Germany for the medical markets in those countries. As a result of the typically higher margins in international medical markets, we expect international expansion should enhance our profitability while expanding our brand and experience into emerging legal cannabis markets. We also have one of ten licenses to cultivate cannabis legally in the Netherlands under that country’s Closed Supply Chain Experiment program through our 85% ownership of Leli Holland.
Balanced Health, our industry-leading cannabinoid business, extends our cannabis portfolio into cannabidiol (“CBD”) 
consumer products, which are being sold in the United States.
We also operate a large, well-established produce business (primarily tomatoes) under the Village Farms Fresh (“VF Fresh”) 
brand which sells into food and mass retail stores. We own and operate produce cultivation assets in Texas and Delta, B.C. and source produce from our growing partners, in Mexico and Canada. Our intention is to use our assets, expertise and experience (across cannabis, CBD and produce) to participate in the U.S. cannabis market subject to compliance with applicable US federal and state laws and stock exchange rules.
Our Operating Segments
Canadian Cannabis Segment
Our Canadian Cannabis segment is composed of Pure Sunfarms ("PSF", which is wholly owned) and Rose LifeScience 
(“Rose”, which is 70% owned).
Pure Sunfarms is one of the single largest cannabis growing operations in the world, one of the lowest-cost greenhouse 
producers and is the top selling dried flower brand in Canada. PSF leverages our 30 years of experience as a vertically integrated greenhouse grower for the high growth cannabis opportunity in Canada with commercial distribution in ten Canadian provinces and 
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territories that represent 98% of total Canadian legal recreational cannabis sales. Our long-term objective for PSF is to be the leading low-cost, high-quality cannabis producer and brand in Canada. 
Rose is one of the top-selling licensed producers of cannabis in the Province of Quebec, as well as a prominent cannabis 
products commercialization expert in Quebec, acting as the exclusive, direct-to-retail sales, marketing and distribution entity for some of the best-known brands in Canada, as well as Quebec-based micro and craft growers.
U.S. Cannabis Segment
Our U.S. Cannabis segment is composed of wholly owned Balanced Health.
•Balanced Health is one of the leading cannabinoid brands and e-commerce platforms in the United States. Balanced Health develops and sells high-quality CBD-based health and wellness products, distributing their diverse portfolio of consumer products through retail storefronts and its top-ranked e-commerce platform, CBDistillery™.
Produce Segment
Our Produce segment is composed of VF Fresh, which currently consists of Village Farms LP and Village Farms Canada.
Through VF Fresh, we grow, market and distribute premium-quality, greenhouse-grown produce in North America. These 
premium products are grown in sophisticated, highly intensive agricultural greenhouse facilities located in British Columbia and Texas. We also market and distribute premium tomatoes, peppers and cucumbers produced under exclusive arrangements from our greenhouse supply partners located primarily in Mexico, B.C. and Ontario. We primarily market and distribute under our Village Farms® brand name to retail supermarkets and dedicated fresh food distribution companies throughout the United States and Canada.
Energy Segment
Our Energy segment is composed of wholly owned VF Clean Energy Inc. (“VFCE”), which has partnered with Mas Energy 
for the Delta RNG Project based on VFCE’s 20-year contract (plus five-year option) with the City of Vancouver to capture landfill gas at the Delta, B.C. landfill site (the "Delta RNG Project"). The Delta RNG Project will convert the VFCE’s previous landfill gas-to-electricity business into a state-of-the-art landfill gas to high-demand renewable natural gas ("RNG") facility. Mas Energy intends to sell the renewable natural gas and VFCE will receive a portion of the revenue in the form of a royalty. The facility will also provide food-grade CO2 that can be used in both our cannabis and produce growing operations in Delta. Mas Energy is in process of completing the facility and we expect the Delta RNG Project to begin operations later this year.
Recent Developments and Updates
Canadian Cannabis Recent Developments and Updates 
•In April 2023, Rose LifeScience entered into an agreement pursuant to which it has agreed to provide supply management and distribution services to Hexo in Quebec commencing in April 2023 and continuing through the later of June 30, 2023 or until the closing of the acquisition of Hexo by Tilray. Currently Rose LifeScience already provides similar services, in Quebec, to Tilray under a separate agreement. Under the terms of the new agreement, upon the completion of the acquisition of Hexo, by Tilray, it is expected that all of Tilray’s Quebec sales will be managed, for a distribution fee, by Rose LifeScience. 
•During the first quarter of 2023, according to independent third-party sources (amalgamated to cover all provinces), Village Farms’ Canadian Cannabis remains the number two ranked by market share position across all product categories in Canada and has maintained its leading market share in dried flower category in Canada. Based on these sources, Province of Quebec-focused Rose LifeScience continues to rank number two by market share position in Quebec for the first quarter of 2023.
•Canadian Cannabis shipped its initial order of branded flower into the Germany medicinal market (via Pure Sunfarms) late in the first quarter of 2023. The bulk flower has cleared testing and is being packaged and distributed to German pharmacies. It is now available for purchase via scripts.
U.S. Cannabis Recent Developments and Updates
•Balanced Health continues to launch incremental products under its successful 2022 new Synergy+ line. It was the first CBD company to advertise on Twitter under its recent new cannabis policy.
•The Company filed an application for a Texas Medicinal license in late April 2023. The Company is hopeful that its application will be awarded the highest or one of the highest marks, putting it in a good position, should the State of Texas award additional medicinal cannabis licenses. If awarded, the Company plans to work with the listing authorities to structure an acceptable ownership structure.
15
Delta RNG Project Update
•Construction is nearing completion and we expect an operational start up in mid-2023.
VF Fresh (Produce)
•The Company has commenced the sale process of its Monahans (Permian Basin, Texas) greenhouse facility and is expecting initial indications of interest in the second quarter of 2023.
Presentation of Financial Results
Our consolidated results of operations (prior to net income) for the three months ended March 31, 2023 and March 31, 2022 
presented below reflect the operations of our consolidated wholly-owned subsidiaries and our 70% ownership in Rose LifeScience. The loss from our equity method investment in Village Farms Hemp ("VFH") is reflected in our net income for the three months ended March 31, 2022 presented below. 
RESULTS OF OPERATIONS 
(In thousands of U.S. dollars, except per share amounts, and unless otherwise noted) 
Consolidated Financial Performance 
Three Months Ended March 31,
20232022
Sales$64,656$70,156
Cost of sales(52,356)(60,252)
Gross margin12,3009,904
Selling, general and administrative expenses(17,405)(17,935)
Interest expense(1,133)(683)
Interest income196110
Foreign exchange (loss) gain(69)319
Other income (expense), net30(8)
Loss before taxes and loss from equity method investments(6,081)(8,293)
(Provision for) recovery of income taxes(634)1,666
Loss including non-controlling interests(6,715)(6,627)
Less: net loss attributable to non-controlling interests, net of tax79162
Loss from equity method investments—(52)
Net loss attributable to Village Farms International Inc.$(6,636) $(6,517)
Adjusted EBITDA (1)$519$(6,111)
Basic loss per share$(0.06) $(0.07)
Diluted loss income per share$(0.06) $(0.07)
(1)Adjusted EBITDA is not a recognized earnings measure and does not have a standardized meaning prescribed by GAAP. Therefore, Adjusted EBITDA may not be comparable to similar measures presented by other issuers. Management believes that Adjusted EBITDA is a useful supplemental measure in evaluating the performance of the Company because it excludes non-recurring and other items that do not reflect our business performance. Adjusted EBITDA includes the Company’s 70% interest in Rose LifeScience since acquisition.
We caution that our results of operations for the three months ended March 31, 2023 and 2022 may not be indicative of our 
future performance.
Discussion of Financial Results
A discussion of our consolidated results for the three months ended March 31, 2023 and 2022 is included below. The 
consolidated results include all four of our operating segments: Produce, Cannabis - Canada, Cannabis-U.S., and Energy, along with all public company expenses. For a discussion of our segmented results, please see “Segmented Results of Operations” below. 
CONSOLIDATED RESULTS
Three Months Ended March 31, 2023 Compared to Three Months Ended March 31, 2022
Sales
      Sales for the three months ended March 31, 2023 were $64,656 as compared to $70,156 for the three months ended 
March 31, 2022. The decrease in sales of ($5,500) or (8%) was attributable to a decrease in VF Fresh of ($6,782), a decrease in U.S 
16
Cannabis of ($2,066), offset by an increase in Canadian Cannabis of $3,343. For additional information, refer to Segmented Results of Operations below.
Cost of Sales
      Cost of sales for the three months ended March 31, 2023 were $52,356 as compared to $60,252 for the three months ended 
March 31, 2022. The decrease in cost of sales of ($7,896), or (13%), was attributable to a decrease in VF Fresh of ($11,568), a decrease in U.S Cannabis of ($592), offset by an increase in Canadian Cannabis of $4,399. For additional information, refer to Segmented Results of Operations below.
Gross Margin
      Gross margin for the three months ended March 31, 2023 increased $2,396 to $12,300, or 19%, in comparison to $9,904, or 
14%, for the three months ended March 31, 2022. The increase in gross margin was attributable to an increase in VF Fresh of $4,786, partially offset by decreases in Canadian Cannabis and U.S Cannabis of ($1,056) and ($1,474), respectively. For additional information, refer to Segmented Results of Operations below.
Selling, General and Administrative Expenses
      Selling, general and administrative expenses for the three months ended March 31, 2023 decreased $530 to $17,405, or 27% 
of sales, compared to $17,935, or 26% of sales, for the three months ended March 31, 2022. The decrease in sales, general and administration expenses was primarily attributable to decreases in operating expenses of $1,299, partially offset by an increase in share-based compensation of approximately $769. For additional information, refer to Segmented Results of Operations below.
March 31, 2023March 31, 2022
Selling, general and administrative expenses$15,673$16,971
Share-based compensation1,732964
Total selling, general and administrative expenses$17,405$17,935
Operating Loss Before Income Tax
Operating loss before tax for the three months ended March 31, 2023 was ($6,081) compared to ($8,293) the three months 
ended March 31, 2022, an increase of $2,212, or 27%. The improvement was primarily due to improved operating performance from VF Fresh, offset by lower profit from our Canadian Cannabis and U.S. Cannabis segments. 
Net Loss Attributable to Village Farms International Inc.
Net loss for the three months ended March 31, 2023 was ($6,636) as compared to ($6,517) for the three months ended 
March 31, 2022, a slight decrease of ($119), or (2%). 
Adjusted EBITDA
Adjusted EBITDA for the three months ended March 31, 2023 was $519 compared to ($6,111) for the three months ended 
March 31, 2022. The improvement was mainly driven by a stronger performance from VF Fresh. See the reconciliation of Adjusted EBITDA to net income in “Non-GAAP Measures—Reconciliation of Net Earnings to Adjusted EBITDA”.
17
SEGMENTED RESULTS OF OPERATIONS 
(In thousands of U.S. dollars, except per share amounts, and unless otherwise noted) 
For The Three Months Ended March 31, 2023
VF FreshCannabis Cannabis Clean
(Produce)CanadaU.S.EnergyCorporateTotal
Sales$34,567$25,112$4,977$—$—$64,656
Cost of sales(33,952)(16,658)(1,739)(7)—(52,356)
Selling, general and administrative expenses(2,916)(6,848)(3,617)(29)(3,995)(17,405)
Other (expense) income, net(544)(604)3—169(976)
Operating (loss) income(2,845)1,002(376)(36)(3,826)(6,081)
Recovery of (provision for) income taxes226(1,138)——278(634)
Loss from consolidated entities(2,619)(136)(376)(36)(3,548)(6,715)
Less: net loss attributable to non-controlling interests, net of tax
—31——4879
Net loss$(2,619) $(105) $(376) $(36) $(3,500) $(6,636)
Adjusted EBITDA (1)$(995) $3,910$(151) $(36) $(2,209) $519
Loss income per share$(0.03) $(0.00) $(0.00) $(0.00) $(0.03) $(0.06)
Diluted loss per share$(0.03) $(0.00) $(0.00) $(0.00) $(0.03) $(0.06)
For The Three Months Ended March 31, 2022
VF FreshCannabis Cannabis Clean
(Produce)CanadaU.S.EnergyCorporateTotal
Sales$41,349$21,769$7,043$(5) $—$70,156
Cost of sales(45,520)(12,259)(2,331)(142)—(60,252)
Selling, general and administrative expenses(3,140)(7,300)(4,391)(32)(3,072)(17,935)
Other (expense) income, net(30)(746)—(6)520(262)
Operating (loss) income(7,341)1,464321(185)(2,552)(8,293)
Recovery of (provision for) income taxes1,715(639)——5901,666
(Loss) income from consolidated entities(5,626)825321(185)(1,962)(6,627)
Less: net loss attributable to non-controlling interests, net of tax
—162———162
Loss from equity method investments——(52)——(52)
Net (loss) income$(5,626) $987$269$(185) $(1,962) $(6,517)
Adjusted EBITDA (1)$(6,201) $2,104$580$(59) $(2,535) $(6,111)
Basic (loss) income per share$(0.06) $0.01$0.00$(0.00) $(0.02) $(0.07)
Diluted (loss) income per share$(0.06) $0.01$0.00$(0.00) $(0.02) $(0.07)
(1) Adjusted EBITDA is not a recognized earnings measure and does not have a standardized meaning prescribed by GAAP. Therefore, Adjusted EBITDA 
may not be comparable to similar measures presented by other issuers. Management believes that Adjusted EBITDA is a useful supplemental measure in evaluating the performance of the Company because it excludes non-recurring and other items that do not reflect our business performance. Adjusted EBITDA includes the Company’s 70% interest in Rose LifeScience.
PRODUCE SEGMENT RESULTS – VF FRESH
The produce segment, VF Fresh, currently consists of Village Farms LP and Village Farms Canada LP. VF Fresh’s 
comparative analysis are based on the consolidated results of Village Farms LP and Village Farms Canada LP for the three months ended March 31, 2023 and 2022.
Three Months Ended March 31, 2023 Compared to Three Months Ended March 31, 2022
Sales
VF Fresh sales for three months ended March 31, 2023 were $34,567 as compared to $41,349 for the three months ended 
March 31, 2022. The decrease in sales of ($6,782) or 16% was primarily due to a decrease in supply partner revenues of ($4,302). The decrease in supply partner revenues is due to a decrease of (29%) in product volume, the decrease in volume is due to the loss of two large supply partner growers in late 2022. The segment's own greenhouse grown revenues increased 3.2% due to a 27% increase in our selling price, mostly offset by a decrease of 19% in pounds produced. The decrease of 19% in production pounds is due to a 15% decrease in planting area, of higher yielding commodity items.  The supply partner revenue decrease is due to lower volumes as follows: an (18%) decrease in tomato pounds sold, a (57%) decrease in pepper pounds sold, a (30%) decrease in cucumber pieces and a 50% increase in mini cucumber pounds. 
The average selling price for all produce sold, during the three months ended March 31, 2023, versus the three months ended 
March 31, 2022, increased as follows: all tomatoes increased 13%, peppers increased 10%, cucumbers increased 77% and mini 
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cucumbers increased 66%. The price increases are due to both higher market pricing in early 2023 versus early 2022, as well as a higher percentage of VF Fresh sales going direct to retail accounts versus the first quarter of 2022.
Cost of Sales
VF Fresh cost of sales for three months ended March 31, 2023, decreased by ($11,568) or 25% to $33,952 as compared to 
$45,520 for the three months ended March 31, 2022. The decrease was primarily due to decreases in supply partner cost of ($4,845), and lower costs at our own Texas greenhouses of ($3,785) and freight expense of ($3,027). The decrease in the Texas greenhouses is primarily due to increased production volumes at the Marfa 1 and Fort Davis facilities, as well as a reduction of the growing area in Permian Basin.  The decrease in supply partner cost is related to the 29% decrease in pounds received. The decrease in freight cost is from an increase in available drivers and decrease in fuel. 
Gross Margin
The gross margin for VF Fresh was $615 for three months ended March 31, 2023 as compared to ($4,171) for the three 
months ended March 31, 2022. The gross profit percentage was 1.8% for the three months ended March 31, 2023, compared to (10%) for the three months ended March 31, 2022. The increase in gross profit is due to higher pricing in 2023 versus the same period in 2022, lower per pound costs from our Texas facilities, in 2023 versus 2022, due to higher yields and lower freight costs.
Selling, General and Administrative Expenses 
VF Fresh selling, general and administrative expenses for three months ended March 31, 2023 were $2,916 or 8% of sales as 
compared to $3,140 or 8% of sales for the three months ended March 31, 2022.
Net loss
VF Fresh’s net loss for three months ended March 31, 2023 was ($2,619) as compared to ($5,626) for the three months ended 
March 31, 2022. The decrease in net loss for the first quarter of 2023 as compared to the first quarter of 2022 was primarily due to the higher gross margin incurred in 2023, which was offset by selling, general and administrative expense in both periods.
Adjusted EBITDA
The Adjusted EBITDA for VF Fresh was ($995) for the three months ended March 31, 2023 as compared to ($6,201) for the 
three months ended March 31, 2022. The higher Adjusted EBITDA was due to a 13% increase in the average selling price of tomatoes, a decrease in our own per pound cost and a decrease in freight costs when compared to the three months ended March 31, 2022.
CANNABIS SEGMENT RESULTS - CANADA
The Canadian Cannabis segment currently consists of Pure Sunfarms and Rose LifeScience. The comparative analysis for 
Canadian Cannabis is based on the consolidated results of Pure Sunfarms and Rose LifeScience for the three months ended March 31, 
2023 and 2022. 
Three Months Ended March 31, 2023 Compared to Three Months Ended March 31, 2022
Sales
Canadian Cannabis net sales for the three months ended March 31, 2023 were $25,112 as compared to $21,769 for the three 
months ended March 31, 2022. The increase between comparable quarters was driven by a 40% increase in branded sales partially offset by a (50%) decrease in non-branded sales, partially offset by an unfavorable impact of exchange rate fluctuations. The 40% increase in branded sales was attained through increased sales in Ontario, British Columbia, Alberta as well as to Rose’s strengthening position in Quebec. Canadian Cannabis branded revenue growth was primarily in the small format, large format-single and pre-rolls offset by a decrease in milled and cannabis derivative products for the three months ended March 31, 2023 as compared to the three months ended March 31, 2022. The (50%) decrease in non-branded sales was primarily due to an oversupplied LP market, which has resulted in continuing desperation pricing by some LPs, and the Company has chosen not to focus on non-branded sales at current pricing as it expects the lower quality supply glut to mitigate as the year progresses. International sales increased by $1,514, or 875%, to $1,687 for the three months ended March 31, 2023 versus $173 for the three months ended March 31, 2022 the increase was primarily driven by incremental sales to Australia.
Canadian Cannabis continues to pay a burdensome excise tax on its branded sales (provincial sales).  For the three months 
ended March 31, 2023, the Company paid $13,758 (C$18,602) versus the prior year March 31, 2022 figure of $8,970 (C$11,365) or $4,788 (C$7,237) more due to higher kilograms sold in this provincial (branded) channel in the first quarter of 2023 versus the first quarter of 2022. This expenditure is our single largest cost of participating in the adult-use market in Canada.   
 For the three months ended March 31, 2023, 87% of revenue was generated from branded flower, inclusive of pre-rolls, 4% 
of revenue from cannabis derivative products and 9% from non-branded sales as compared to 67% of revenue from branded flower, 
19
inclusive of pre-rolls, 8% from cannabis derivative products and 25% from non-branded sales for the three months ended March 31, 2022. 
(in thousands of U.S. dollars)March 31, 2023March 31, 2022
Branded sales$34,499 $24,855
International sales1,687173
Non-branded sales2,3094,925
Commissions375786
Less: excise taxes(13,758)(8,970)
Net Sales$25,112 $21,769
(in thousands of Canadian dollars)March 31, 2023March 31, 2022
Branded sales$46,676 $31,484
International sales2,281219
Non-branded sales3,1226,240
Commissions507996
Less: excise taxes(18,602)(11,365)
Net Sales$33,984 $27,574
Cost of Sales
Canadian Cannabis cost of sales for the three months ended March 31, 2023 were $16,658 as compared to $12,259 for the 
three months ended March 31, 2022. The period-over-period cost of sales increase of ($4,399) or (36%) was primarily due to increases in kilograms produced, packaged and sold, of branded products in Q1 2023 as compared to Q1 2022. The Q1 2022 cost of sales included a positive adjustment (reduction in cost of sales) of $2,050 from the revaluation of Pure Sunfarms' inventory to fair value at acquisition date of November 2, 2020, as such the non-GAAP but actual economic increase was ($2,349) or (16%). 
Gross Margin
Canadian Cannabis gross margin for the three months ended March 31, 2023 decreased ($1,056) to $8,454, or a 34% gross 
margin, in comparison to $9,510, or a 44% gross margin, for the three months ended March 31, 2022. The decrease in gross margin between comparable periods was due to the inclusion of a purchase price inventory adjustment in the three months ended March 31, 2022. See adjusted gross margin below. 
Adjusted Gross Margin
Adjusted gross margin for the three months ended March 31, 2023, which excludes the purchase price inventory adjustment 
which reduced cost of sales by $2,050 (as described in "—Cost of Sales" above), was $7,460, for a 34% gross margin for the three months ended March 31, 2022. 
Selling, General and Administrative Expenses
Canadian Cannabis selling, general and administrative expenses for the three months ended March 31, 2023 decreased $452 
to $6,848 or 27% of sales compared to $7,300 or 34% of sales for the three months ended March 31, 2022. The SG&A slightly decreased while generating more sales such that SG&A as a percentage of revenue decreased. 
Net (Loss) Income  
Canadian Cannabis net loss for the three months ended March 31, 2023 was ($105) compared to net income of $987 for the 
three months ended March 31, 2022. The decrease in net income between periods was primarily due to a lower gross margin and a higher corporate income tax provision of ($499) versus the prior year period.
Adjusted EBITDA
Adjusted EBITDA for the three months ended March 31, 2023 and March 31, 2022 was $3,910 and $2,104, respectively. The 
increase in Adjusted EBITDA between periods was primarily due to higher sales but at a lower margin being offset by lower SG&A expenditures on 2023 versus 2022. See the reconciliation of Adjusted EBITDA to net income in “Non-GAAP Measures—Reconciliation of Net Earnings to Adjusted EBITDA”.
CANNABIS SEGMENT RESULTS – UNITED STATES
The U.S. Cannabis segment currently consists of Balanced Health. For the three months ended March 31, 2023 and 2022, 
U.S. Cannabis financial results are based on the consolidated results of Balanced Health. VF Hemp is a joint venture, and its results are included in “Loss from Equity Method Investments” for the three months ended March 31, 2022. 
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Three Months Ended March 31, 2023 Compared to Three Months Ended March 31, 2022
Sales 
U.S. Cannabis net sales for the three months ended March 31, 2023 were $4,977 as compared to $7,043 for the three months 
ended March 31, 2022, a decrease of (29%). The decrease was primarily due to lower direct-to-consumer sales, due to the proliferation of hemp derived cannabinoid sales. All of our sales were generated in the United States, with gross sales composed of 82% e-commerce sales, 13% retail sales, 6% shipping income and 1% bulk sales. In addition, 2023 sales included a (2%) loyalty revenue deferral as loyalty program customers generate loyalty points that may be used in the future when purchasing Balanced Health products, versus loyalty revenue, of $370, in the first quarter of 2022 due to an excess loyalty program accrual in prior periods.
Cost of Sales
U.S. Cannabis cost of sales for the three months ended March 31, 2023 was $1,739 compared to $2,331 for the three months 
ended March 31, 2023. The decrease in cost of sales of 25% is primarily due to lower volumes sold in 2023 versus 2022, as margins on most products remained constant between years. 
Gross Margin
U.S Cannabis gross margin for the three months ended March 31, 2023 decreased ($1,474) to $3,238, or a 65% gross margin, 
in comparison to $4,712, or a 67% gross margin, for the three months ended March 31, 2022. 
Selling, General and Administrative Expenses
U.S. Cannabis selling general and administrative expenses for the three months ended March 31, 2023 was $3,617 as 
compared to $4,391 for the three months ended March 31, 2022.  The decrease in selling, general and administrative expenses when compared to the same prior year period is due to reductions in headcount, contract renegotiation and more efficient marketing and brand spending.
Net (Loss) Income
U.S. Cannabis net loss for the three months ended March 31, 2023 was ($376) as compared to net income of $269 for the 
three months ended March 31, 2022 driven by a lower gross margin in 2023.
Adjusted EBITDA
U.S. Cannabis adjusted EBITDA for the three months ended March 31, 2023 was ($151) as compared to $580 for the three 
months ended March 31, 2022 due to a lower gross margin. See the reconciliation of Adjusted EBITDA to net income in “Non-GAAP Measures—Reconciliation of Net Earnings to Adjusted EBITDA”.
Liquidity and Capital Resources 
Capital Resources 
    As at March 31, 2023, we had $34,884 in cash and $80,275 of working capital, and as at December 31, 2022, we had $21,676 
in cash and $60,769 of working capital. The increase was primarily due to cash proceeds from the January 2023 Equity Offering (as 
defined below). We believe that our existing cash, together with cash generated from our operating activities, and the remaining 
availability under our Operating Loan (as defined below), and our PSF revolving line of credit, and future availability under our ATM 
(as defined below), will provide us with sufficient liquidity to meet our working capital needs, repayments of long-term debt, future 
contractual obligations and planned capital expenditures for the next 12 months. In addition, we may obtain additional liquidity from 
potential equity or debt financing in the future. We intend to use our cash on hand for daily operational funding requirements.
Maximum Outstanding as of 
(in thousands of U.S. dollars unless otherwise noted)Availability March 31, 2023
Operating LoanC$10,000 $4,000
FCC Term Loan$24,264 $24,264
Pure Sunfarms LoansC$37,574 C$37,574
The Company’s borrowings under the FCC Term Loan (as defined below) and the Operating Loan (as defined below) 
(collectively the “Credit Facilities”) are subject to certain positive and negative covenants, including debt ratios, and the Company is required to maintain certain minimum working capital. As of March 31, 2023, the Company was in compliance with all of its covenants under its Credit Facilities. Prior to December 31, 2022, the Company received a waiver from FCC for the annual test for one of its financial covenants under our FCC Term Loan. FCC measures our financial covenants once a year on the last calendar day of the year and our next annual testing date will be on December 31, 2023. We can provide no assurance that we will be in compliance, or receive a waiver, for any non-compliance as of the next annual testing date.  
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Accrued interest payable on the Credit Facilities and Pure Sunfarms Loans as of March 31, 2023 and December 31, 2022 was 
$345 and $398, respectively. These amounts are included in accrued liabilities in the accompanying Condensed Consolidated Statements of Financial Position.
FCC Term Loan
The Company has a term loan financing agreement with Farm Credit Canada, a Canadian creditor (the “FCC Term Loan”). 
The non-revolving variable rate term loan has a maturity date of April 1, 2025 and a balance of $24,264 on March 31, 2023 and $24,755 on December 31, 2022. The outstanding balance is repayable by way of monthly installments of principal and interest, with the balance and any accrued interest to be paid in full on April 1, 2025. As of March 31, 2023, borrowings under the FCC Term Loan agreement were subject to an interest rate of 8.25% per annum.
As collateral for the FCC Term Loan, the Company has provided promissory notes, a first mortgage on the VFF-owned Delta 
1 and Texas greenhouse facilities, and general security agreements over its assets. In addition, the Company has provided full recourse guarantees and has granted security interests in respect of the FCC Term Loan. The carrying value of the assets and securities pledged as collateral as of March 31, 2023 and December 31, 2022 was $123,249 and $113,159, respectively.
Operating Loan
The Company has a revolving line of credit agreement with a Canadian chartered bank (the "Operating Loan"). On March 13, 
2023, the Company entered into a Note Modification Agreement (the “Modification”) to the Operating Loan. The Modification eliminated the use of LIBOR as a basis to determine certain interest rates under the Operating Loan and transitioned to the Secured Overnight Financing Rate (“SOFR”) for such purposes. The Company does not expect the Modification to materially change the amount of interest payable under the Operating Loan. The Operating Loan is subject to margin requirements stipulated by the lender. The Operating Loan had an outstanding balance of $4,000 and future availability of $6,000 on March 31, 2023 and December 31, 2022.
As collateral for the Operating Loan, the Company has provided promissory notes and a first priority security interest over its 
accounts receivable and inventory. In addition, the Company has granted full recourse guarantees and security therein. The carrying value of the assets pledged as collateral as of March 31, 2023 and December 31, 2022 was $27,142 and $26,666, respectively.
Pure Sunfarms Loans
Pure Sunfarms has a revolving line of credit (the “PSF Revolving Line of Credit”), a non-revolving credit facility (the “PSF 
Non-Revolving Facility”), and a term loan (the “PSF Term Loan” and collectively, with the PSF Revolving Line of Credit and the PSF Non-Revolving Facility, the “PSF Loans”) with three Canadian chartered banks. The PSF Loans were extended, subsequent to period end, from a maturity date of February 7, 2024 to February 7, 2026 by the syndicate lenders under the same terms, conditions and covenants as the original PSF Loans maturing on February 7, 2024. Due to the extension the classification of the PSF Loans on March 31, 2023 remains the same as December 31, 2022. 
The PSF Revolving Line of Credit had an outstanding balance of C$0 as of March 31, 2023 and C$4,745 as of December 31, 
2022. Pure Sunfarms had an outstanding letter of credit issued to BC Hydro against the PSF Revolving Line of Credit of C$4,145 at March 31, 2023 and December 31, 2022.
The PSF Non-Revolving Facility is secured by the Delta 2 and Delta 3 greenhouse facilities and contains customary financial 
and restrictive covenants. The other terms and conditions of the PSF Non-Revolving Facility remain substantially the same. As of March 31, 2023, Pure Sunfarms was in compliance with these financial covenants. The outstanding amount on the PSF Non-Revolving Facility was C$12,507 on March 31, 2023 and C$13,007 on December 31, 2022. 
The outstanding amount on the PSF Term Loan was C$19,599 on March 31, 2023 and C$20,224 on December 31, 2022.
The outstanding amount on Pure Sunfarms' credit facility with the Business Development Bank of Canada was C$5,469 on 
March 31, 2023 and C$5,673 on December 31, 2022.
Equity Offerings
On January 30, 2023, the Company issued and sold 18,350,000 Common Shares under a registered direct equity offering, at a 
price of $1.35 per share, resulting in net proceeds for approximately $23,300 after deducting commissions and offering expenses (the "January 2023 Equity Offering"). As part of the January 2023 Equity Offering the Company also issued 18,350,000 Common Warrants at an exercise price of $1.65 per share. The Common Warrants cannot be exercised until after July 30, 2023, and expire on July 30, 2028. 
On August 9, 2022, Village Farms entered into a Controlled Equity Offering Sales Agreement ("Sales Agreement") pursuant 
to which the Company may offer and sell Common Shares having an aggregate offering price up to $50 million from time to time to or through Cantor Fitzgerald & Co. and A.G.P./Alliance Global Partners. Under the Sales Agreement, the Company may offer and sell Common Shares through Cantor Fitzgerald & Co. and A.G.P./Alliance Global Partners by any method deemed to be an “at the market 
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offering” ("ATM") as defined in Rule 415 of the Securities Act of 1933, as amended, including sales made directly on The Nasdaq Capital Market. During the quarter ended March 31, 2023 there were no shares sold under our ATM.
Summary of Cash Flows  
For the three months ended March 31,
(in Thousands)20232022
Cash, beginning of period$21,676$58,667
Net cash flow (used in)/provided by:
Operating activities(3,668)(9,637)
Investing activities(1,076)(8,705)
Financing activities18,6301,012
Net cash increase (decrease) for the period13,886(17,330)
Effect of exchange rate changes on cash(678)96
Cash, end of the period$34,884$41,433
Operating Activities 
For the three months ended March 31, 2023 and 2022, cash flows used in operating activities were ($3,668) and ($9,637), 
respectively. The operating activities for the three months ended March 31, 2023 consisted of $($1,384) in changes in non-cash working capital items and ($2,284) in changes before non-cash working capital items, while operating activities for the three months ended March 31, 2022 consisted of ($5,091) in changes in non-cash working capital items and ($4,546) in changes before non-cash working capital items. The improvement in changes before non-cash working capital items for 2023 as compared to 2022 was primarily due to a lower net loss from VF Fresh, partially offset by slightly lower net income from our Canadian Cannabis and U.S. Cannabis businesses.
Investing Activities
For the three months ended March 31, 2023 and 2022, cash flows used in investing activities were ($1,076) and ($8,705), 
respectively. The investing activities for the three months ended March 31, 2023 consisted of ($1,076) invested in capital expenditures to support our VF Fresh and Canadian and U.S. cannabis operations. The investing activities for the three months ended March 31, 2022 consists of a ($2,715) loan to L.L. Lichtendahl, a private company that holds a 50% interest in Leli, a promissory note to Altum of ($727) and ($5,263) invested in capital expenditures, primarily to support PSF's packhouse conversion and Delta 3 improvement projects.
Financing Activities 
For the three months ended March 31, 2023, cash flows provided by financing activities were $18,630 and cash flows 
provided by financing activities were $1,012 for the three months ended March 31, 2022. For the three months ended March 31, 2023, cash flows provided by financing activities consisted of $23,335 in net proceeds from the issuance of Common Shares, $83 in proceeds from the exercise of stock options and net repayment of debt of ($4,788) due to repayment of PSF's revolving line of credit. For the three months ended March 31, 2022, cash flows provided by financing activities consisted of $2,000 for proceeds from the Operating Loan, $176 of proceeds from the exercise of stock options, offset by cash flows used in financing activities of ($983) in repayments on borrowings and ($301) for payments on lease obligations.
Contractual Obligations and Commitments 
We expect to meet our contractual obligations and commitments through the use of our working capital and our other 
resources described under “—Capital Resources” above. Other than in respect of our long-term debt described above, we currently do not have any material cash requirements in the near future.
Non-GAAP Measures 
References in this MD&A to “Adjusted EBITDA” and "Adjusted gross margin" are to earnings (including the equity losses 
of the joint venture, VFH) before interest, taxes, depreciation, and amortization (“EBITDA”), as further adjusted to exclude foreign currency exchange gains and losses on translation of long-term debt, unrealized gains on the changes in the value of derivative instruments, share-based compensation, gains and losses on asset sales and the other adjustments set forth in the table below. Adjusted EBITDA and adjusted gross margin are measures of operating performance that are not recognized under GAAP and do not have a standardized meaning prescribed by GAAP. Therefore, Adjusted EBITDA  and Adjusted gross margin may not be comparable to similar measures presented by other issuers. Investors are cautioned that Adjusted EBITDA and Adjusted gross margin should not be construed as an alternative to net income or loss determined in accordance with GAAP as an indicator of our performance. Adjusted EBITDA and Adjusted gross margin are used as an additional measures to evaluate the operating and financial performance of our 
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segments. Management believes that Adjusted EBITDA and Adjusted gross margin are important measures in evaluating the historical performance of the Company because it excludes non-recurring and other items that do not reflect our business performance. 
Reconciliation of Net Loss to Adjusted EBITDA 
The following table reflects a reconciliation of net loss to Adjusted EBITDA, as presented by the Company: 
Three Months Ended March 31,
(in thousands of U.S. dollars)20232022
Net loss$(6,636) $(6,517)
Add:
Amortization3,2442,702
Foreign currency exchange (gain) loss33(319)
Interest expense, net937573
Provision for (recovery of) income taxes634(1,666)
Share-based compensation1,683964
Interest expense for JV's—13
Amortization for JVs56094
Foreign currency exchange loss (gain) for JVs129
Share-based compensation for JV's34—
Other expense, net for JV's(6)—
Deferred financing fees3466
Purchase price adjustment (1)—(2,050)
Other expense, net1—
Adjusted EBITDA (2)$519$(6,111)
Adjusted EBITDA for JVs (3)$—$(25)
Adjusted EBITDA excluding JVs$519$(6,086)
(1) The purchase price adjustment primarily reflects the non-cash accounting charge resulting from the revaluation of Pure Sunfarms’ inventory to fair value at 
the acquisition date on November 2, 2020, Pure Sunfarms' intangible amortization and Rose intangible amortization resulting from the September 30, 2022 finalization of the Rose purchase price accounting.
(2) Adjusted EBITDA is not a recognized earnings measure and does not have a standardized meaning prescribed by GAAP. Therefore, Adjusted EBITDA 
presented for these segments may not be comparable to similar measures presented for comparable segments by other issuers. Management believes that Adjusted EBITDA is a useful supplemental measure in evaluating the performance of the Company's segments because it excludes non-recurring and other items that do not reflect the business performance of our segments. Adjusted EBITDA for Canadian Cannabis includes the 70% interest in Rose LifeScience since acquisition and the three months ended March 31, 2022 Adjusted EBITDA for Cannabis U.S. includes our 65% interest in VFH.
(3) The Adjusted EBITDA for JVs consists of the VF Hemp Adjusted EBITDA for the three months ended March 31, 2022
Reconciliation of Segmented Net Loss to Adjusted EBITDA
The following table reflects a reconciliation of segmented net loss to Adjusted EBITDA, as presented by the Company: 
For The Three Months Ended March 31, 2023
VF FreshCannabis Cannabis Clean
(in thousands of U.S. dollars)(Produce)CanadaU.S.EnergyCorporateTotal
Net loss$(2,619) $(105) $(376) $(36) $(3,500) $(6,636)
Add:
Amortization1,2541,790139—613,244
Foreign currency exchange (gain) loss53(13)19—(26)33
Interest expense, net543561(24)—(143)937
Provision for (recovery of) income taxes(226)1,138——(278)634
Share-based compensation—14490—1,4491,683
Amortization for JVs—332——228560
Foreign currency exchange loss (gain) for JVs—1——-1
Share-based compensation for JV's—34———34
Other expense, net for JV's—(6)———(6)
Deferred financing fees—34———34
Other expense, net—-1——1
Adjusted EBITDA (2)$(995) $3,910$(151) $(36) $(2,209) $519
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For The Three Months Ended March 31, 2022
VF FreshCannabis Cannabis Clean
(in thousands of U.S. dollars)(Produce)CanadaU.S.EnergyCorporateTotal
Net (loss) income$(5,626) $987$269$(185) $(1,962) $(6,517)
Add:
Amortization1,2591,302141——2,702
Foreign currency exchange (gain) loss—89—2(410)(319)
Interest expense, net—581—4(12)573
Provision for (recovery of) income taxes(1,715)639——(590)(1,666)
Share-based compensation—36795—502964
Interest expense for JV's——13——13
Amortization for JVs—94———94
Foreign currency exchange loss (gain) for JVs—29———29
Deferred financing fees—66———66
Purchase price adjustment (1)—(2,050)———(2,050)
Other expense, net(119)—62120(63)—
Adjusted EBITDA (2)$(6,201) $2,104$580$(59) $(2,535) $(6,111)
(1) The purchase price adjustment primarily reflects the non-cash accounting charge resulting from the revaluation of Pure Sunfarms’ inventory to fair value at 
the acquisition date on November 2, 2020, Pure Sunfarms' intangible amortization and Rose intangible amortization resulting from the September 30, 2022 finalization of the Rose purchase price accounting.
(2) Adjusted EBITDA is not a recognized earnings measure and does not have a standardized meaning prescribed by GAAP. Therefore, Adjusted EBITDA 
presented for these segments may not be comparable to similar measures presented for comparable segments by other issuers. Management believes that Adjusted EBITDA is a useful supplemental measure in evaluating the performance of the Company’s segments because it excludes non-recurring and other items that do not reflect the business performance of our segments. Adjusted EBITDA for Canadian Cannabis includes the 70% interest in Rose LifeScience since acquisition and Adjusted EBITDA for “Corporate” and “Total” includes our 65% interest in VFH.
Recent Accounting Pronouncements Not Yet Adopted 
No accounting pronouncements recently issued or newly effective have had, or are expected to have, a material impact on the 
Company’s condensed consolidated financial statements.
Critical Accounting Estimates and Judgments 
Our discussion and analysis of our financial condition and results of operations are based upon our Unaudited Condensed 
Consolidated Interim Financial Statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, sales and expenses and related disclosure of contingent assets and liabilities. 
We believe that the estimates, assumptions and judgments involved in the accounting policies described in the 
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our Annual Report on Form 10-K have the greatest potential impact on our financial statements, so we consider these to be our critical accounting policies. Actual results could differ from the estimates we use in applying our critical accounting policies. We are not currently aware of any reasonably likely events or circumstances that would result in materially different amounts being reported.
Quarterly Assessment for Indicators of Impairment
During the first quarter of 2023, the Company considered qualitative factors in assessing for impairment indicators for the 
Company’s US and Canadian cannabis segments. As part of this assessment, the Company considered both external and internal factors, including overall financial performance and outlook. At March 31, 2023, the Company concluded that no impairment indicators existed as no events or circumstances occurred that would, more likely than not, reduce the fair value of the reporting units to be below their carrying amounts.
For more information, see Note 8 to our unaudited condensed consolidated financial statements included in Item 1 of Part I of 
this Quarterly Report, and Note 11 to our audited consolidated financial statements for the years ended December 31, 2022, 2021 and 2020 included in our Annual Report on Form 10-K.
25
Item 3. Quantitative and Qualitative Disclosures About Market Risk 
Interest Rate Risk 
As of March 31, 2023, our variable interest rate debt was primarily related to our Credit Facilities and Term Loans. 
Outstanding borrowings under our Credit Facility and Term Loans bear interest at either the (a) Secured Overnight Financing Rate (“SOFR”) or (b) Canadian Prime Rate, as defined in the agreement, plus an applicable margin. As of March 31, 2023, we had approximately $4,000 aggregate principal amount of outstanding revolving loans under our Operating Loan with a weighted average interest rate of 6.48% and we had approximately $52,030 in aggregate principal amounts with Term Loans with a weighted average interest rate of 8.22%. The current interest rates for outstanding revolving loans under our Credit Facility and Term Loans reflect basis point increases of approximately 3.7% over the comparable period in 2022. 
Our interest expense is affected by the overall interest rate environment. Our variable rate interest debt subjects us to risk from increases in prevailing interest rates. This risk increases in the current inflationary environment, in which the Federal Reserve has increased interest rates, resulting in an increase in our variable interest rates and related interest expense. An additional 50 basis point increase in the applicable interest rates under our Credit Facility and Term Loan would have increased our interest expense by approximately $66 and $76, for the three months ended March 31, 2023 and 2022, respectively.
While we cannot predict our ability to refinance existing debt or the significance of the impact that interest rate movements 
will have on our existing debt, management evaluates our financial position on an ongoing basis.
Foreign Exchange Risk 
As of March 31, 2023 and 2022, the Canadian/U.S. foreign exchange rate was C$1.00 = US$0.7390 and C$1.00 = 
US$0.7995, respectively. Assuming that all other variables remain constant, an increase of $0.10 in the Canadian dollar would have the following impact on the ending balances of certain statements of financial position items at March 31, 2023 and 2022 with the net foreign exchange gain or loss directly impacting net income (loss). 
March 31, 2023March 31, 2022
Financial assets
Cash and cash equivalents$1,182 $763
Trade receivables2,6603,348
Inventories7,8277,108
Prepaid and deposits971217
Financial liabilities
Trade payables and accrued liabilities(5,345)(4,306)
Loan payable(3,757)(1,059)
Deferred tax liability(2,764)(2,753)
Net foreign exchange gain (loss)$774 $3,318
Our exposure to foreign exchange risk and the impact of foreign exchange rates are monitored by the Company’s 
management but generally the Company tries to match its sales (trade receivables) and vendor payments (trade payables) such that the net impact is not material. 
Other than the interest rate risk and foreign exchange risk discussed above, there have been no material changes to our market 
risks from those disclosed in Part II, Item 7A of our Annual Report on Form 10-K. 
Item 4. Controls and Procedures 
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to 
be disclosed by us in the reports we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified by the U.S. Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to provide reasonable assurance that information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and Principal Financial and Accounting Officer, as appropriate, to allow timely decisions regarding required disclosure. 
26
As required by Rule 13a-15(b) under the Exchange Act, our management, including our Chief Executive Officer and Chief 
Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2023, our disclosure controls and procedures are not effective at a reasonable assurance level due to the material weakness described in Management’s Report on Internal Control over Financial Reporting in our Annual Report on Form 10-K for the year ended December 31, 2022.
Material Weakness in Internal Controls Over Financial Reporting
As of December 31, 2022, our management assessed the effectiveness of our internal control over financial reporting using 
the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control –Integrated Framework (2013). Based on this assessment, our management concluded that, as of December 31, 2022, our internal control over financial reporting was not effective based on those criteria because a material weakness in internal control over financial reporting existed as of that date, as described below.
The Company did not operate effective controls over the calculation of the recoverable amount of goodwill and intangible 
assets. The Company’s controls related to the calculation of the recoverable amount of goodwill failed to prevent or detect an error in the revision of certain of the formulas and significant assumptions within the calculation of recoverable amount. There was no impact on the Company’s December 31, 2022 financial statements. 
Remediation Plan and Status
In the three months ended March 31, 2023, the Company implemented remediation to improve the operation of its controls 
over the review of the determination of the recoverable amount of its goodwill and intangible assets. The Company will continue to review, optimize and enhance its financial reporting controls and procedures to ensure the remediation measures are effective and controls are operating effectively. The Company expects implementation of its remediation plan by December 31, 2023.
Changes in Internal Control over Financial Reporting
The Company’s management, including the Chief Executive Officer and Principal Financial and Accounting Officer, has 
reviewed the Company’s internal control over financial reporting. There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act), other than to address the material weakness described in management's report on internal control over financial reporting, during our fiscal quarter ended March 31, 2023 (as described above) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 
27
PART II. – OTHER INFORMATION 
Item 1. Legal Proceedings 
From time to time the Company is engaged in legal proceedings in the ordinary course of business. We do not believe any 
current legal proceedings are material to our business. 
Item 1A. Risk Factors 
Our business, operations, and financial condition are subject to various risks and uncertainties. The risk factors described in 
Part I, Item 1A, “Risk Factors” contained in our Annual Report on Form 10-K, as filed with the SEC on March 9, 2023, should be carefully considered, together with the other information contained or incorporated by reference in this Quarterly Report on Form 10-Q and in our other filings filed with the SEC in connection with evaluating us, our business, and the forward-looking statements contained in this Quarterly Report on Form 10-Q. During the quarter ended March 31, 2023, other than as described in the Quarterly Report on Form 10-Q, there have been no material changes from the risk factors previously disclosed under Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Repurchases of Equity Securities
  The Company did not repurchase any of its Common Shares during the three months ended March 31, 2023. 
Item 3. Defaults Upon Senior Securities.Not applicable.  Item 4. Mine Safety Disclosure.
 
Not applicable.  Item 5. Other Information.
 
Not applicable. 
28
Item 6. Exhibits 
   The following exhibits are filed as part of, or incorporated by reference into, this report: 
Exhibit
Number  Description of Document
10.1+Fourth Amended and Restated Credit Agreement, dated as of May 5, 2023, by and between Pure Sunfarms Corp., Bank of Montreal, Farm Credit Canada and Canadian Imperial Bank of Commerce. 
10.2+^Addendum, dated as of April 5, 2023, by and between Stephen Ruffini and the Company.
10.3+Employment Agreement dated as of February 7, 2022, by and between Ann Gillin Lefever and the Company.
  31.1   Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 
  31.2   Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 
  32.1   Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 
  32.2   Certification of Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 
101.INS   Inline XBRL Instance Document
101.SCH   Inline XBRL Taxonomy Extension Schema Document
101.CAL   Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB   Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE   Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF   Inline XBRL Taxonomy Extension Definition Linkbase Document
104The cover page for the Company’s Quarterly Report on Form 10-Q has been formatted in Inline XBRL and contained in Exhibit 101
+ Indicates management contract or compensatory plan. ^ Certain confidential portions of this exhibit have been redacted pursuant to Item 601(b)(10) of Regulation S-K. The Company agrees to furnish to the Securities and Exchange Commission a copy of any omitted portions of the exhibit upon request.
29
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. 
  VILLAGE FARMS INTERNATIONAL, INC.
  By:   /s/ Stephen C. Ruffini 
  Name:  Stephen C. Ruffini
   Title:  Executive Vice President and Chief Financial Officer
(Authorized Signatory and Principal Financial andAccounting Officer)
  
Date: May 10, 2023   
30
Execution Version
Exhibit 10.1
INFORMATION  IN  THIS  EXHIBIT  IDENTIFIED  BY  [***]  IS  CONFIDENTIAL  AND  HAS  BEEN  EXCLUDED 
BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE 
REGISTRANT IF PUBLICLY DISCLOSED.
PURE SUNFARMS CORP.
as Borrower
- and -
THE LENDERS FROM TIME TO TIME PARTY TO THIS AGREEMENT
as Lenders
- and -
BANK OF MONTREAL
as Administrative Agent
- and -
BANK OF MONTREAL
as Lead Arranger and Sole Bookrunner
FOURTH AMENDED AND RESTATED CREDIT AGREEMENT
May 5, 2023
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TABLE OF CONTENTS
Page
ARTICLE I - INTERPRETATION
1.01 Definitions........................................................................................................................... 11.02 Accounting Principles ....................................................................................................... 211.03 Currency References........................................................................................................ 221.04 Extended Meanings .......................................................................................................... 221.05 Amendment and Restatement ........................................................................................ 221.06 Exhibits and Schedules .................................................................................................... 23
ARTICLE II - FACILITY A
2.01 Establishment of Facility A............................................................................................... 232.02 Purpose; Revolving Nature; Advances .......................................................................... 232.03 Repayment ......................................................................................................................... 242.04 Availment Options ............................................................................................................. 242.05 Interest and Fees .............................................................................................................. 242.06 Facility A Margin Limit ...................................................................................................... 252.07 Swingline ............................................................................................................................ 262.08 Letters of Credit ................................................................................................................. 272.09 Cancellation........................................................................................................................ 29
ARTICLE III - NON-REVOLVING FACILITIES
3.01 Continuation of Facility B ................................................................................................. 293.02 Continuation of Facility C ................................................................................................. 293.03 Purpose............................................................................................................................... 293.04 Non-Revolving Nature; Advances .................................................................................. 303.05 Repayment ......................................................................................................................... 303.06 Availment Options ............................................................................................................. 313.07 Interest and Fees .............................................................................................................. 313.08 Interest Rate Hedge Transactions.................................................................................. 323.09 Voluntary Repayments ..................................................................................................... 32
ARTICLE IV - ANCILLARY CREDIT PRODUCTS
4.01 Hedge Transactions.......................................................................................................... 324.02 MasterCard Line ................................................................................................................ 334.03 Service Agreements.......................................................................................................... 33
ARTICLE V - GENERAL CONDITIONS
5.01 Matters relating to Interest ............................................................................................... 335.02 Notice Periods.................................................................................................................... 355.03 Minimum Amounts, Multiples and Procedures re Draws, Substitutions and 
Repayments ....................................................................................................................... 35
5.04 Place of Repayments........................................................................................................ 365.05 Evidence of Obligations (Noteless Advances).............................................................. 365.06 Determination of Equivalent Amounts............................................................................ 36
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5.07 CDOR Loans...................................................................................................................... 375.08 Benchmark Replacement Setting ................................................................................... 385.09 No Repayment of Certain Availment Options............................................................... 415.10 Illegality ............................................................................................................................... 425.11 Anti-Money Laundering .................................................................................................... 425.12 Terrorist Lists ..................................................................................................................... 42
ARTICLE VI - REPRESENTATIONS AND WARRANTIES
6.01 Borrower Representations and Warranties................................................................... 436.02 Survival of Representations and Warranties ................................................................ 47
ARTICLE VII - COVENANTS
7.01 Borrower Positive Covenants .......................................................................................... 487.02 Borrower Negative Covenants ........................................................................................ 507.03 Financial Covenants ......................................................................................................... 537.04 Reporting Requirements .................................................................................................. 53
ARTICLE VIII - SECURITY
8.01 Security to be Provided by the Companies................................................................... 548.02 Security to be Provided by Others.................................................................................. 558.03 General Provisions re Security; Registration ................................................................ 568.04 Opinions re Security.......................................................................................................... 568.05 After-Acquired Property, Further Assurances............................................................... 568.06 Security for Hedge Transactions .................................................................................... 568.07 Agent May Obtain Insurance........................................................................................... 568.08 Insurance Proceeds .......................................................................................................... 578.09 Acknowledgment re: Stated Principal Amount of Mortgages..................................... 57
ARTICLE IX - CONDITIONS PRECEDENT
9.01 Conditions Precedent to Amendments .......................................................................... 579.02 Conditions Precedent to all Advances ........................................................................... 59
ARTICLE X - DEFAULT AND REMEDIES
10.01Events of Default ...............................................................................................................
60
10.02Acceleration, etc................................................................................................................
62
10.03Acceleration of Certain Contingent Obligations............................................................
63
10.04Combining Accounts, Set-Off ..........................................................................................
63
10.05Appropriation of Monies ...................................................................................................
63
10.06No Further Advances........................................................................................................
63
10.07Judgment Currency...........................................................................................................
63
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10.08Remedies Cumulative ......................................................................................................
64
10.09Performance of Covenants by Agent .............................................................................
64
ARTICLE XI - THE AGENT AND THE LENDERS
11.01Decision-Making ................................................................................................................
64
11.02Security ...............................................................................................................................
65
11.03Application of Proceeds of Realization ..........................................................................
66
11.04Payments by Agent...........................................................................................................
66
11.05Protection of Agent............................................................................................................
67
11.06Duties of Agent ..................................................................................................................
68
11.07Lenders’ Obligations Several; No Partnership..............................................................
69
11.08Sharing of Information ......................................................................................................
69
11.09Acknowledgement by Borrower ......................................................................................
69
11.10Amendments to Article XI ................................................................................................
69
11.11Deliveries, etc. ...................................................................................................................
69
11.12Agency Fee ........................................................................................................................
69
11.13Non-Funding Lender.........................................................................................................
70
ARTICLE XII - CBA MODEL PROVISIONS
12.01CBA Model Provisions Incorporated by Reference .....................................................
70
12.02Inconsistencies with CBA Model Provisions .................................................................
71
ARTICLE XIII - GENERAL
13.01Waiver .................................................................................................................................
71
13.02Expenses of Agent and Lenders.....................................................................................
71
13.03Debit Authorization............................................................................................................
72
13.04General Indemnity.............................................................................................................
72
13.05Environmental Indemnity..................................................................................................
72
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13.06Survival of Certain Obligations despite Termination of Agreement ..........................
73
13.07Interest on Unpaid Costs and Expenses .......................................................................
73
13.08Notice ..................................................................................................................................
73
13.09Severability.........................................................................................................................
74
13.10Further Assurances...........................................................................................................
74
13.11Time of the Essence .........................................................................................................
74
13.12Promotion and Marketing.................................................................................................
74
13.13Entire Agreement; Waivers and Amendments to be in Writing..................................
74
13.14Inconsistencies with Security ..........................................................................................
74
13.15Confidentiality ....................................................................................................................
75
13.16Governing Law...................................................................................................................
75
13.17Execution by Fax or pdf; Execution in Counterparts ...................................................
75
13.18Binding Effect.....................................................................................................................
75
Exhibits
“A”-Lenders and Lenders’ Commitments
“B”-Draw Request
“C”-Rollover Notice
“D”-Substitution Notice
“E”-Repayment Notice
“F”-Monthly Information Certificate 
“G”-Compliance Certificate
“H”-Excess Cash Flow Certificate
“I” -CBA Model Provisions
Schedules
6.01(b) -Credit Parties Information
6.01(h) -Material Permits
6.01(i) -Specific Permitted Liens
6.01(m) -Intellectual Property
6.01(o) -Material Agreements
6.01(p) -Labour Agreements
6.01(q) -Environmental Matters 
6.01(r) -Litigation
6.01(s) -Pension Plans
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FOURTH AMENDED AND RESTATED CREDIT AGREEMENT
This Agreement dated May 5, 2023 is made among:  
PURE SUNFARMS CORP.as Borrower
- and -
THE LENDERS FROM TIME TO TIMEPARTY TO THIS AGREEMENTas Lenders
- and -
BANK OF MONTREALas Administrative Agent
- and -
BANK OF MONTREALas Lead Arranger and Sole Bookrunner
For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by each party, the parties agree as follows:
ARTICLE I - INTERPRETATION
1.01 Definitions
In this Agreement, the words and phrases set out in the CBA Model Provisions (as hereinafter defined) shall  have  the  respective  meanings  set  forth  therein  (subject  to  Section  12.01  herein).  In  addition,  the following words and phrases shall have the respective meanings set forth below:
“Acceleration Date” means the earlier of (i) the date of the occurrence of an Insolvency Event in respect of any Credit Party; and (ii) the date on which the Borrower fails to repay the Obligations in full pursuant to an Acceleration Notice issued by the Agent.
“Acceleration Notice” is defined in Section 10.02.
“Advance” means an extension of credit by one or more of the Lenders to the Borrower pursuant to this Agreement, including for greater certainty an extension of credit in the form of a Prime-Based Loan, a CDOR Loan or the issuance of a Letter of Credit, but for greater certainty does not include a Substitution or Rollover.
“Affiliate” is defined in the CBA Model Provisions.
“Agent” means BMO in its capacity as the administrative agent hereunder, and its successors in such capacity.
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“Aggregate Net Hedge Liability” means, on any date of determination, the net aggregate amount of the Borrower’s liability under all Hedge Transactions outstanding on such date in the event of a default or termination thereunder, calculated in accordance with the terms thereof (and for greater certainty,  determined  after  netting  any  amounts  payable  to  the  Borrower  thereunder  against amounts payable by the Borrower thereunder).
“Agreement”  means  this  credit  agreement  (including  the  Exhibits  and  Schedules)  as  it  may  be amended, supplemented, replaced or restated from time to time; and each reference herein to “this Agreement”, “the date hereof”, “the date of this Agreement” and similar references are references to this amended and restated credit agreement and not to the Existing Credit Agreement. 
“Amendment Closing Date” means the date on which all conditions precedent listed in Section 9.01 herein have been satisfied, as confirmed by the Agent to the Borrower in writing.
“AML Legislation” means all anti-money laundering, anti-terrorist financing, government sanction and “know your client” Laws in effect in any jurisdiction in which any Company carries on business or owns assets, including any guidelines or orders thereunder, specifically including the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada).
“Applicable Law” is defined in the CBA Model Provisions.
“Applicable  Margin”  means,  in  respect  of  any  Availment  Option  and  in  respect  of  any  Fiscal Quarter, the percentage in the column relating to such Availment Option in the following table which corresponds  to  the  applicable  Senior  Funded  Debt  to  EBITDA  Ratio  in  respect  of  such  Fiscal Quarter, which percentage shall be subject to adjustment from time to time as provided in Section 5.01(d): 
Pricing LevelSenior Funded Debt to EBITDAPrime-Based LoansCDOR Loans / Letters of CreditStandby Fee 
1< 1.00:11.50%2.75%0.55%
2> 1.00:1 < 1.50:11.75%3.00%0.60%
3> 1.50:1 <2.00:12.00%3.25%0.65%
4> 2.00:1 < 2.50:12.25%3.50%0.70%
5> 2.50:1 < 3.00:12.50%3.75%0.75%
“Approved  Jurisdiction”  means  an  Approved  Medical  Cannabis  Jurisdiction  or  an  Approved Non-Medical Cannabis Jurisdiction.
“Approved Medical Cannabis Jurisdiction” means:
(a)in the case of Village, a Medical Cannabis Jurisdiction; and 
(b)in  the  case  of  any  Company,  a  Medical  Cannabis  Jurisdiction  (i)  which  is  approved  in writing  by  the  Required  Lenders  in  their  discretion  and  (ii)  is  confirmed  as  a  Medical Cannabis  Jurisdiction  by  a  legal  opinion  provided  by  the  Borrower’s  counsel  in  such jurisdiction in form and substance satisfactory to the Agent and the Lenders.
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The Required Lenders may in their discretion from time to time (x) upon receipt of a written request by the Borrower, designate any jurisdiction an Approved Medical Cannabis Jurisdiction provided that all above criteria have been satisfied; and (y) revoke the designation of any jurisdiction as an Approved Medical Cannabis Jurisdiction by written notice to the Borrower if such jurisdiction is no longer a Medical Cannabis Jurisdiction. Canada is an Approved Medical Cannabis Jurisdiction as at  the  date  of  this  Agreement.    Notwithstanding  the  foregoing,  the  United  States  shall  not  be designated  an  Approved  Medical  Cannabis  Jurisdiction  except  with  the  written  consent  of  all Lenders in their discretion. 
“Approved Non-Medical Cannabis Jurisdiction” means:
(a)in the case of Village, a Non-Medical Cannabis Jurisdiction; and 
(b)in the case of any Company, a Non-Medical Cannabis Jurisdiction (i) which is approved in writing by the Required Lenders in their discretion and (ii) is confirmed as a Non-Medical Cannabis  Jurisdiction  by  a  legal  opinion  provided  by  the  Borrower’s  counsel  in  such jurisdiction in form and substance satisfactory to the Agent and the Lenders. 
The Required Lenders may in their discretion from time to time (x) upon receipt of a written request by  the  Borrower,  designate  any  jurisdiction  an  Approved  Non-Medical  Cannabis  Jurisdiction provided  that  all  above  criteria  have  been  satisfied;  and  (y)  revoke  the  designation  of  any jurisdiction as an Approved Non-Medical Cannabis Jurisdiction by written notice to the Borrower if such  jurisdiction  is  no  longer  a  Non-Medical  Cannabis  Jurisdiction.  Canada  is  an  Approved Non-Medical Cannabis Jurisdiction as at the date of this Agreement. Notwithstanding the foregoing, the United States shall not be designated an Approved Non-Medical Cannabis Jurisdiction except with the written consent of all Lenders in their discretion.
“Associate” has the meaning ascribed thereto in the Canada Business Corporations Act. 
“Availment Option” means a method of borrowing which is available to the Borrower as provided herein.
“BDC  Participation  Loan”  means  the  loan  advanced  by  BMO  to  the  Borrower  in  the  principal amount  of  six  million  two  hundred  fifty  thousand  Canadian  Dollars  (CDN$6,250,000)  bearing interest at a rate not in excess of three and three-quarters percent (3.75%) above Prime Rate, per annum.
“BDC  Participation  Loan  Agreement”  means  the  BDC  Loan  Agreement  (Non-Revolving) between the Borrower and BMO establishing the BDC Participation Loan.
“BMO” means Bank of Montreal and its successors and permitted assigns.
“Borrower”  means  Pure  Sunfarms  Corp.,  a  corporation  subsisting  under  the  laws  of  British Columbia.
“Borrowing Base Certificate” means a certificate delivered by the Borrower to the Agent in the form of Exhibit “F”.
“Business  Day”  means  any  day  on  which  the  Agent  is  open  for  over-the-counter  business  in Vancouver, British Columbia and Toronto, Ontario, excluding Saturday, Sunday and any other day that is a statutory holiday in Vancouver, British Columbia or Toronto, Ontario.
“Canadian Dollars” or “CDN$” means the lawful money of Canada.
“Cannabis” has the meaning given to the term cannabis under the Cannabis Act.
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“Cannabis  Act”  means  An  Act  respecting  cannabis  and  to  amend  the  Controlled  Drugs  and Substances Act, the Criminal Code and other Acts, S.C. 2018, c. 16, as amended from time to time.
“Cannabis Regulations” means Cannabis Regulations under the Cannabis Act, as amended from time to time and all other regulations made from time to time under the Cannabis Act or any other statute with respect to Cannabis-Related Activities.
“Cannabis-Related Activities” means any activities, including advertising or promotional activities, relating  to  or  in  connection  with  the  importation,  exportation,  cultivation,  production,  purchase, distribution  or  sale  of  Cannabis  or  Cannabis-related  products,  including  for  greater  certainty paraphernalia.
“Capital Expenditures” means expenditures made directly or indirectly which are considered to be in respect of the acquisition or leasing of capital assets in accordance with GAAP, including the acquisition  or  improvement  of  Real  Property,  plant,  machinery  or  equipment,  whether  fixed  or removable.
“Capital  Lease”  means  any  lease  of  assets  which  in  accordance  with  GAAP  is  required  to  be capitalized on the balance sheet of the lessee.
“Cash Taxes” in respect of any fiscal period means amounts actually paid by the Companies in such fiscal period in respect of income and capital Taxes (whether relating to such fiscal period or any other fiscal period).
“CBA Model Provisions” means the model credit agreement provisions attached hereto as Exhibit “I”, which have been revised under the direction of the Canadian Bankers’ Association Secondary Loan Market Specialist Group from provisions prepared by The Loan Syndications and Trading Association, Inc.
“CDOR Loan” means a loan made by the Lenders to the Borrower in Canadian Dollars in respect of which Interest is determined by reference to the CDOR Rate.
“CDOR Period” means, with respect to any CDOR Loan, the period commencing on the Business Day on which such CDOR Loan is advanced or continued or another Advance is converted into such CDOR Loan, as applicable, and ending on a Business Day that is one (1) or three (3) months thereafter (subject to availability) or such other period as may be agreed to by the Lenders in their absolute discretion as selected by the Borrower in a Draw Request. 
“CDOR Rate” means on any day the annual rate of interest which is the rate determined as being the arithmetic average of the quotations of all institutions listed in respect of the rate for Canadian Dollar denominated bankers’ acceptances for the relevant period displayed and identified as such on the display referred to as the “CDOR Page” (or any substitute therefor) of Refinitiv Benchmark Services (UK) Limited (or any successor thereto or Affiliate thereof) as of approximately 10:15 a.m. on such day and, if such day is not a Business Day, then on the immediately preceding Business Day (as adjusted by the Agent after 10:15 a.m. to reflect any error in a posted rate of interest or in the  posted  average  annual  rate  of  interest  with  notice  of  such  adjustment  in  reasonable  detail evidencing the basis for such determination being concurrently provided to the Borrower); provided that if such rates are not available on the CDOR Page on any particular day, then the CDOR Rate on that day shall be the average of the rates applicable to Canadian Dollar bankers’ acceptances for the relevant period quoted for customers in Canada by the Agent as of 10:15 a.m. on such day; or  if  such  day  is  not  a  Business  Day,  then  on  the  immediately  preceding  Business  Day;  and provided further that the CDOR Rate shall not be less than zero.
“Collateral”  means  all  property,  assets  and  undertaking  of  the  Companies  encumbered  by  the Security, together with all proceeds of the foregoing.
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“Commitment” means, in respect of any Lender, such Lender’s commitment to make Advances to the Borrower under any the Facilities (or a Facility or a Tranche thereof, if required by the context).
“Companies” means the Borrower and all of its Subsidiaries from time to time; and “Company” means any of them as the context requires.
“Compliance Certificate” means a certificate delivered by the Borrower to the Agent in the form of Exhibit “G”.
“Control” and “Controlled” are defined in the CBA Model Provisions.
“Copyrights” means all rights, title and interests (and all related IP Ancillary Rights) arising under any requirement of Law in copyrights and all mask work, database and design rights, whether or not  registered  or  published,  all  registrations  and  recordations  thereof  and  all  applications  in connection therewith.
“Credit Parties” means the Companies and Village; and “Credit Party” means any one of them as the context requires. 
“Currency Hedge Transaction” means an agreement made between the Borrower and a Lender for the purpose of hedging currency risk, including a currency exchange agreement or a foreign exchange forward contract.
“D2 Lease” means the lease dated March 29, 2019 and entered into between Village and Village LP as the landlord of the Borrower as the tenant, a short form of which was registered on March 31,  2020  in  the  New  Westminster  Land Title Office  under  instrument numbers  CA8117347 and CA8117348 against title to the real property municipally known as 4526 80th Street, Delta, BC, and legally described as:
PID: 024-579-254PARCEL 1 SECTION 32 TOWNSHIP 3 NEW WESTMINSTER DISTRICT PLAN  LMP42884  EXCEPT  PLANS  LMP50211,  BCP25716,  BCP44198 AND EPP76249. 
“D2  Project”  means  the  upgrade  and  retrofit  of  the  existing  greenhouse  on  the  D2  Property  to render it suitable for Cannabis cultivation.
“D2 Property” means the leasehold interest of the Borrower created by the D2 Lease.
“D3  Project”  means  capital  expenditure  relating  to  the  processing  facility  at  the  D3  Property, located in the area known as “Area 51”.
“D3 Property” means the Real Property municipally known as 4431 80th Street, Delta, BC, and legally described as: 
PID: 001-402-064THE SOUTH HALF OF THE NORTH EAST QUARTER OF SECTION 31 TOWNSHIP  3  NEW  WESTMINSTER  DISTRICT  EXCEPT:  PART INCLUDED IN A 5.16 ACRE PORTION SHOWN ON REFERENCE PLAN 8317; PORTION INCLUDED IN THAT PART OF THE NORTH HALF OF SECTION 31 SHOWN ON EXPROPRIATION PLAN 7066; PARCEL “D” REFERENCE  PLAN  38003;  PART  DEDICATED  ROAD  ON  PLAN BCP19927 AND PART ON PLAN BCP47239.
“Deeply Subordinated Debt” means indebtedness of any Company to any Person in respect of which such Person has provided a subordination, postponement and standstill agreement in favour 
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of  the  Agent  which  includes  an  assignment  of  such  Subordinated  Debt  as  security  for  the Obligations.
“Default” is defined in the CBA Model Provisions.
“Defined  Benefit  Pension  Plan”  means  any  Pension  Plan  which  contains  a  “defined  benefit provision” as defined in subsection 147.1(1) of the Income Tax Act (Canada).
“Distribution”  in  respect  of  any  Person  means  any  amount  paid,  directly  or  indirectly,  to  a shareholder,  partner,  director,  officer  or  employee  of  such  Person  or  a  Related  Person  thereto, including any amount paid by way of dividends, distribution of partnership profits, withdrawal of capital, redemption of shares or partnership units, payments of principal, interest or other amounts on  account  of  indebtedness,  salary,  bonus,  commission,  management  fees,  directors’  fees  or otherwise, or any other direct or indirect payment in respect of earnings or capital of such Person; except that the payment of commercially reasonable salaries, bonuses, commissions, stock-based compensation and directors’ fees from time to time to the officers, employees and directors of such Person in the ordinary course of business shall not be considered Distributions.
“Draw Request” means a notice in the form of Exhibit “B” given by the Borrower to the Agent for the purpose of requesting an Advance.
“EBITDA” means, in respect of any fiscal period, the consolidated net income of the Borrower in such fiscal period determined in accordance with GAAP (but excluding the following: extraordinary or non-recurring income and gains, non-cash gains (such as unrealized foreign exchange gains and PPA Fair Value Adjustments)); plus the following amounts (to the extent such amounts were deducted in determining such consolidated net income, and without duplication):
(a)Interest, fees and expenses paid in connection with Permitted Funded Debt;
(b)income and capital taxes;
(c)depreciation and amortization;
(d)non-cash charges and expenses such as unrealized foreign exchange losses and charges relating to the impairment of goodwill and other intangible assets;
(e)non-cash share-based compensation;
(f)extraordinary non-recurring expenses or losses to the extent approved by the Required Lenders  in  writing,  including  transaction  costs  related  to  this  Agreement  to  a  limit  of CDN$500,000; and
(g)any other expenses approved in writing by the Required Lenders in their discretion; 
and provided further that:
(h)in  respect  of  each  Company  which  became  a  Subsidiary  of  the  Borrower  in  any  fiscal period, EBITDA for such fiscal period shall be determined as if such Company had been a Subsidiary of the Borrower throughout the entire said fiscal period; 
(i)in respect of each Company which ceased to be a Subsidiary of the Borrower in any fiscal period, EBITDA for such fiscal period shall be determined as if such Company had not been a Subsidiary of the Borrower during such fiscal period; and
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(j)for  the  purposes  of  calculating  the  financial  covenants  set  out  in  Section  7.03  only, paragraph (f) of this definition shall read as follows:
“(f) extraordinary non-recurring expenses or losses to the extent approved by the Required Lenders in writing, including (A) transaction costs related to this Agreement to a limit of CDN$200,000; and (B) a one-time only write-down, to net realizable value, to be taken in the Fiscal Year ended December 31, 2022, in respect of inventory that is in existence as of  September  30,  2022,  to  a  limit  of  CDN$15,000,000,  provided  that  the  net  income generated on this written down inventory, in any fiscal period following December 31, 2022, shall be excluded from the Borrower’s EBITDA calculation; and”.
“Eligible Receivable” in respect of the Borrower means an account receivable of the Borrower (in this definition, individually called an “account”) which satisfies all of the following eligibility criteria:
(a)the account arises from a bona fide, fully-completed transaction consisting of the sale of goods or the provision of services by the Borrower to an account debtor;
(b)the account is subject to a First-Ranking Security Interest held by the Agent pursuant to the Security and is not subject to any other Lien except Permitted Liens;
(c)if the account arises from the sale of Cannabis or any other Cannabis-Related Activity, the account debtor is located in an Approved Jurisdiction;
(d)the account debtor is not a Company or a Related Person thereto;
(e)the account is not in dispute or subject to any defence, counterclaim or claim by the account debtor for credit, set-off, allowance or adjustment;
(f)the account is not a contra account relating to progress billings;
(g)the Borrower does not have an obligation to hold any portion of the account in trust or as agent for any other Person (except pursuant to a Statutory Lien securing obligations which are not overdue);
(h)an invoice relating to the account has been issued by the Borrower and sent to the account debtor;
(i)the account is not outstanding for more than: 
(A)one  hundred  and  twenty-one  (121)  days  (where  the  account  debtor  is  a 
Governmental Authority); or
(B)ninety-one (91) days (where the account debtor is not a Governmental Authority),
from the date of the invoice relating thereto (regardless of the due date specified in such invoice for payment);
(j)the  account  debtor  is  not  insolvent  or  subject  to  any  proceeding  under  Insolvency Legislation; and
(k)the account is not subject to undue credit risk in the opinion of the Required Lenders.
“Equity Issuance” means an issuance or sale by any Company of shares, partnership interests or other  equity  interests,  except  any  such  issuance  or  sale  (i)  to  any  other  Company,  or  (ii)  to management or employees of any Company under any employee stock option or stock purchase 
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plan  stock  appreciation  rights  plan,  phantom  stock  plan  or  other  employee  benefit  plan  or arrangement in existence from time to time.
“Equivalent  Amount”  means,  in  relation  to  an  amount  in  one  currency,  the  amount  in  another currency that could be purchased by the amount in the first currency, determined by reference to the applicable Exchange Rate at the time of such determination.
“Event of Default” is defined in Section 10.01.
“Excess Cash Flow” in respect of any Fiscal Year means EBITDA in such Fiscal Year, less the aggregate of the following amounts (without duplication):
(a)Cash Taxes in respect of such Fiscal Year;
(b)Unfunded Capital Expenditures paid during such Fiscal Year;
(c)Interest paid in cash during such Fiscal Year in respect of Permitted Funded Debt, except any  portion  thereof  which  constitutes  a  Distribution  and  was  not  permitted  under  a subordination/postponement agreement with the Agent; and
(d)scheduled principal payments paid during such Fiscal Year in respect of Permitted Funded Debt, except any portion thereof which constitutes a Distribution and was not permitted under a subordination/postponement agreement with the Agent;
“Excess Cash Flow Certificate” means a certificate delivered by the President, Chief Financial Officer or other senior officer of the Borrower to the Agent in the form of Exhibit “H”.
“Exchange Rate” means, on the date of determination of any amount of Canadian Dollars to be converted into another currency pursuant to this Agreement for any reason, or vice-versa, the spot rate of exchange for converting Canadian Dollars into such other currency or vice-versa, as the case may be, established by the Bank of Canada at approximately 4:30 p.m. on the date of such determination (or such other date as may be specified herein).
“Existing Credit Agreement” means the third amended and restated credit agreement among the parties  hereto  dated  March  15,  2021,  as  amended,  supplemented  or  modified  prior  to  the  date hereof. 
“Facilities” means Facility A, Facility B and Facility C, and “Facility” means any of them, as the context requires. 
“Facility A” is defined in Section 2.01. 
“Facility A Available Commitment” means, at any time, the amount (if any) by which the Facility A  Margin  Limit  applicable  at  that  time  exceeds  the  aggregate  of  (a)  the  Outstanding  Principal Amount under Facility A at that time, and (b) the amount of any Advances requested under Facility A as at that time, but as yet unfunded.
“Facility A Lenders” means those Lenders which have issued Commitments under Facility A. 
“Facility A Margin Limit” is defined in Section 2.06(a).
“Facility A Maximum Amount” means fifteen million Canadian Dollars (CDN$15,000,000). 
“Facility B” is defined in Section 3.01.
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“Facility B Lenders” means those Lenders which have issued Commitments under Facility B.
“Facility C” is defined in Section 3.02.
“Facility C Lenders” means those Lenders which have issued Commitments under Facility C. 
“First-Ranking  Security  Interest”  in  respect  of  any  Collateral  means  a  Lien  in  such  Collateral which is registered as required under this Agreement to record and perfect the charges contained therein and which ranks in priority to all other Liens in such Collateral, except for any Permitted Liens which may have priority in accordance with Applicable Law.
“Fiscal Quarter” means a fiscal quarter of the Borrower (or any other Credit Party if required by the context), ending on the last days of March, June, September and December in each year. 
“Fiscal  Year”  means  a  fiscal  year  of  the  Borrower  (or  any  other  Credit  Party  if  required  by  the context), ending on the last day of December in each year.
“Fixed Charge Coverage Ratio” means, in respect of any fiscal period, the ratio of: (i) EBITDA in such  fiscal  period  less  the  aggregate  of  the  following  amounts  in  respect  of  such  fiscal  period (without duplication): (A) Cash Taxes, (B) Distributions paid in cash; and (C) Capital Expenditures to the extent not financed by Permitted Funded Debt; to (ii) Funded Debt Service in respect of such fiscal period; provided that, for the purposes of determining the Fixed Charge Coverage Ratio in respect of any fiscal period identified in the table set out below, Funded Debt Service for that fiscal period will be deemed to be the aggregate of (A) the “Term Debt Service” amount set out opposite that fiscal period in the table below, and (B) an amount representing annualized interest accrued on  Advances  under  Facility  A  drawn  during  that  fiscal  period,  calculated  by  multiplying  (x)  the aggregate amount of the Advances outstanding under Facility A on the last day of that fiscal period, by  (y)  the  interest  rate  applicable  to  those  Advances  under  this  Agreement  (incorporating  the Applicable Margin) on the last day of that fiscal period. 
Fiscal periodTerm Debt Service (CDN$)
12 months ending March 31, 20207,245,405
12 months ending June 30, 20207,192,675
12 months ending September 30, 20207,139,365
12 months ending December 31, 20207,086,055
12 months ending March 31, 20217,033,905
12 months ending June 30, 20217,223,478
12 months ending September 30, 20217,317,251
12 months ending December 31, 20217,356,497
12 months ending March 31, 2022 8,267,355
12 months ending June 30, 2022 8,191,980
12 months ending September 30, 2022 8,116,605
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12 months ending December 31, 2022 8,041,230
“Funded Debt” in respect of any Person means obligations of such Person which are considered to constitute debt in accordance with GAAP, including indebtedness for borrowed money (in the case of the Borrower, specifically including the Outstanding Principal Amount, Subordinated Debt, obligations secured by Purchase-Money Security Interests and obligations under Capital Leases), capitalized  interest,  and  the  redemption  price  of  any  securities  issued  by  such  Person  having attributes substantially similar to debt (such as securities which are redeemable at the option of the holder),  plus  the  Aggregate  Net  Hedge  Liability  at  the  time  of  determination;  but  excluding  the following: accounts payable, payroll accruals, accruals in respect of normal business expenses and future income Taxes (both current and long-term).
“Funded Debt Service” means, in respect of any fiscal period, without duplication: (i) the aggregate amount of Interest paid or payable in respect of the Funded Debt of the Borrower on a consolidated basis  in  respect  of  such  fiscal  period  (but  for  greater  certainty,  excluding  any  Interest  which  is capitalized and not paid or payable during such fiscal period); plus (ii) the aggregate amount of scheduled principal payments and scheduled Capital Lease payments paid or payable in respect of the Funded Debt of the Borrower on a consolidated basis in respect of such fiscal period (except the portion of any final payment due in respect of such Funded Debt which constitutes a “balloon payment” and any amount paid in connection with the exercise of an option to purchase equipment under a Capital Lease).
“GAAP” means generally accepted accounting principles in the United States as in effect from time to time as set forth in the opinions and pronouncements of the relevant United States public and private  accounting  boards  and  institutes  which  are  applicable  to  the  relevant  Person  in  the circumstances as of the date of determination consistently applied.
“Governmental  Authority”  is  defined  in  the  CBA  Model  Provisions,  and  for  greater  certainty includes Health Canada.
“Guarantee”  means  any  agreement  by  which  any  Person  assumes,  guarantees,  endorses, contingently agrees to purchase or provide funds for the payment of, or otherwise becomes liable upon, the obligation of any other Person, or agrees to maintain the net worth or working capital or other  financial  condition  of  any  other  Person  or  otherwise  assures  any  creditor  of  such  Person against loss, and shall include any contingent liability under any letter of credit or similar document or instrument.
“Guarantors”  means  each  Person  that  has  executed  and  delivered  in  favour  of  the  Agent  a Guarantee of the Obligations.
“Hazardous  Materials”  means  any  contaminant,  pollutant,  waste  or  substance  that  is  likely  to cause immediately or at some future time harm or degradation to the surrounding environment or risk to human health; and without restricting the generality of the foregoing, including any pollutant, contaminant, waste, hazardous waste or dangerous goods that is regulated by any Requirements of  Environmental  Law  or  that  is  designated,  classified,  listed  or  defined  as  hazardous,  toxic, radioactive  or  dangerous  or  as  a  contaminant,  pollutant  or  waste  by  any  Requirements  of Environmental Law.
“Hedge  Transaction”  means  an  Interest  Rate  Hedge  Transaction  or  a  Currency  Hedge Transaction. 
“Indemnitees”  means  the  Lenders,  the  Agent  and  their  respective  successors  and  permitted assignees, any agent of any of them (specifically including a receiver or receiver-manager) and the respective officers, directors and employees of the foregoing.
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“Insolvency Event” means, in respect of any Person, the occurrence of any one or more of the following events:
(a)such Person ceases to carry on its business, commences any proceeding under Insolvency Legislation including a proposal or an assignment in bankruptcy, petitions or applies to any tribunal for, or consents to, the appointment of any receiver, trustee or similar liquidator in respect of all or a substantial part of its property, admits the material allegations of a petition or application filed with respect to it in any proceeding commenced in respect of it under Insolvency Legislation, or takes any corporate action for the purpose of effecting any of the foregoing; or
(b)any proceeding or filing is commenced against such Person 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 Insolvency Legislation, or seeking the appointment of a receiver, trustee, custodian or other similar official for it or any of its property or assets; unless (i) such Person is  diligently  defending  such  proceeding  in  good  faith  and  on  reasonable  grounds  as determined by the Required Lenders and (ii) such proceeding does not in the opinion of the Lenders materially adversely affect the ability of such Person to carry on its business and to perform and satisfy all of its obligations.
“Insolvency Legislation” means legislation in any applicable jurisdiction relating to reorganization, arrangement,  compromise  or  re-adjustment  of  debt,  dissolution  or  winding-up,  or  any  similar legislation,  and  specifically  includes  for  greater  certainty  the  Bankruptcy  and  Insolvency  Act (Canada),  the  Companies’  Creditors  Arrangement  Act  (Canada)  and  the  Winding-Up  and Restructuring Act (Canada).
“Intellectual  Property”  means  all  rights,  title  and  interests  in  intellectual  property  and  all  IP Ancillary Rights relating thereto, including all Copyrights, Patents, Trademarks, Internet Domain Names, Trade Secrets, industrial designs, integrated circuit topographies, plant breeders’ rights and rights under IP Licenses.
“Interest”  means  interest  on  loans,  stamping  fees  in  respect  of  bankers’  acceptances,  the difference between the proceeds received by the issuers of bankers’ acceptances and the amounts payable  upon  the  maturity  thereof,  issuance  fees  in  respect  of  letters  of  credit,  and  any  other charges or fees in connection with the extension of credit which are determined by reference to the amount of credit extended, plus standby fees in respect of the unutilized portion of any credit facility; but excluding capitalized interest (for greater certainty, being interest which is accrued but not paid), agency fees, arrangement fees, structuring fees, fees relating to the granting of consents, waivers, amendments,  extensions  or  restructurings,  the  reimbursement  of  costs  and  expenses,  and  any similar  amounts  which  may  be  charged  from  time  to  time  in  connection  with  the  establishment, administration or enforcement of the Facilities.
“Interest  Rate  Hedge  Transaction”  mean  an  agreement  made  between  the  Borrower  and  a Lender for the purpose of hedging interest rate risk, including an interest rate exchange agreements (commonly known as an “interest rate swap”) or a forward rate agreement.
“Interim  Financial  Statements”  means,  in  respect  of  any  Person  at  any  time,  the  unaudited financial statements of such Person (on a consolidated and unconsolidated basis) in respect of its most recently completed Fiscal Quarter (and also on a year-to-date basis in respect of such Fiscal Quarter  and  all  previous  Fiscal  Quarters  in  the  same  Fiscal  Year),  including  the  notes  thereto, prepared in accordance with GAAP except that such financial statements shall be subject to normal year-end adjustments.
“Internet Domain Names” means all right, title and interest (and all related IP Ancillary Rights) in internet domain names.
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“Investment”  means  an  investment  made  or  held  by  a  Person,  directly  or  indirectly,  in  another Person (whether such investment was made by the first-mentioned Person in such other Person or was acquired from a third party), including a contribution of capital and including the acquisition or holding of the following: all or substantially all of the assets used in connection with a business; common  or  preferred  shares;  debt  obligations;  partnership  interests;  and  investments  in  joint ventures; provided however that if a transaction would satisfy the definition of “Capital Expenditure” herein and also the definition of “Investment” herein, it shall be deemed to constitute an Investment and not a Capital Expenditure.
“IP Ancillary Rights” means, with respect to an item of Intellectual Property all foreign counterparts to, and all divisionals, reversions, continuations, continuations-in-part, reissues, re-examinations, renewals  and  extensions  of,  such  Intellectual  Property  and  all  income,  royalties,  proceeds  and liabilities at any time due or payable or asserted under or with respect to any of the foregoing or otherwise with respect to such Intellectual Property, including all rights to sue or recover at Law or in equity for any past, present or future infringement, misappropriation, dilution, violation or other impairment thereof, and, includes in each case, all rights to obtain any other IP Ancillary Right. 
“IP License” means all contractual obligations (and all related IP Ancillary Rights), whether written or oral, granting any right, title and interest in any Intellectual Property.
“Issuing Bank” means BMO in its capacity as such. 
“Landlord Agreement” means an agreement in form and substance satisfactory to the Agent given in  favour  of  the  Agent  by  Village  and  Village  LP,  as  the  landlord  of  the  D2  Property  (and  also acknowledged by all mortgagees of such landlord if requested by the Agent upon the instructions of the Required Lenders), which shall include the following provisions: the landlord consents to the granting of a mortgage of the D2 Property by the Borrower (as tenant thereunder) in favour of the Agent and agrees that the Agent may assign the D2 Lease to a third party without the landlord’s consent;  the landlord agrees to  give written notice to the  Agent in  respect of  and a reasonable opportunity to cure any default under the D2 Lease; the landlord agrees not to terminate the D2 Lease; and the landlord agrees to waive (or subordinate and defer the enforcement of) its right of distraint and any other rights and remedies and any security it may hold in respect of any property of the Borrower located on the D2 Property or affixed to the D2 Property which the Borrower is entitled to remove under Applicable Law or pursuant to the terms of the D2 Lease.
“Laws”  means  all  statutes,  codes,  ordinances,  decrees,  rules,  regulations,  municipal  by-laws, judicial or arbitral or administrative or ministerial or departmental or regulatory judgments, orders, decisions, rulings or awards, or any provisions of such laws, including general principles of common and civil law and equity or policies or guidelines, to the extent such policies or guidelines have the force of law, binding on the Person referred to in the context in which such word is used; and “Law” means any of the foregoing.
“Lender-Related Distress Event” means, with respect to any Lender or any Person that directly or indirectly Controls such Lender (such Lender and each such Person being individually referred to in this definition as a “distressed person”), (i) the commencement of a voluntary or involuntary proceeding  with  respect  to  such  distressed  person  under  any  Insolvency  Legislation,  (ii)  the appointment of a custodian, conservator, receiver or similar official in respect of such distressed person or any substantial part of its assets, (iii) a forced liquidation, merger, sale or other change of Control of such distressed person supported in whole or in part by Guarantees or other support (including the nationalization or assumption of ownership or operating control of such distressed person  by  any  Governmental  Authority),  or  (iv)  such  distressed  person  makes  a  general assignment  for  the  benefit  of  its  creditors  or  is  otherwise  adjudicated  as,  or  determined  by  any Governmental Authority having regulatory authority over such distressed person or its assets to be, insolvent, bankrupt, or deficient in meeting any capital adequacy or liquidity standard of any such Governmental Authority.
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“Lenders” means the lenders identified in Exhibit “A” attached hereto and any other Persons which may from time to time become lenders pursuant to this Agreement; and their respective successors and permitted assigns.
“Letter of Credit” means a stand-by letter of guarantee or documentary letter of credit.
“Lien” means: (i) a lien, charge, mortgage, hypothec, pledge, security interest or conditional sale agreement; (ii) an assignment, lease, consignment, trust or deemed trust that secures payment or performance of an obligation; (iii) a garnishment; (iv) any other encumbrance of any kind; and (v) any commitment or agreement to enter into or grant any of the foregoing.
“Liquidity Coverage” means, at any time: 
(a)Unrestricted Cash as at that time; plus 
(b)the Facility A Available Commitment as at that time. 
“Loan Documents” means collectively, this Agreement, the Security, any promissory notes issued by  the  Borrower  to  the  Agent  or  the  Lenders  hereunder,  all  agreements  relating  to  Hedge Transactions, all Service Agreements, any certificate completed and executed by or on behalf of any Credit Party and all other certificates, instruments, agreements and other documents delivered, or to be delivered, by or on behalf of any Credit Party to the Agent or the Lenders or any of them, as  applicable,  under  or  in  connection  with  this  Agreement,  and  specifically  including  any agreements or letters entered into between the Borrower and the Agent in respect of fees payable to the Agent or the Lenders.
“MasterCard Line” is defined in Section 4.02.
“Material Adverse Change” means any change or event which: (i) constitutes a material adverse change in the business, operations, financial condition or properties of the Companies taken as a whole; or (ii) materially impairs the Companies’ ability, taken as a whole, to timely and fully perform any of their material obligations under the Loan Documents, or (iii) materially impairs the ability of the  Agent  and  the  Lenders  to  enforce  their  rights  and  remedies  under  this  Agreement  or  the Security.
“Material Agreements” means each agreement listed in Schedule 6.01(o) hereto and each other agreement made between any Company and another Person from time to time which if terminated would result, or would have a reasonable likelihood of resulting, in a Default, Event of Default or Material Adverse Change.
“Material Permit” means each licence or permit listed in Schedule 6.01(h) hereto and each other licence, permit, approval, registration or qualification granted to or held by any Company which if terminated would result, or would have a reasonable likelihood of resulting, in a Default, Event of Default or Material Adverse Change.
“Maturity Date” means February 7, 2026.
“Medical Cannabis Jurisdiction” means any country in which it is legal in all political subdivisions therein (including for greater certainty on a federal, state and municipal basis) to undertake Medical Cannabis-Related Activities. Each of Canada, Germany, Spain, Czech Republic, Portugal, Italy, Greece, the United Kingdom, Denmark, Colombia, Peru, Lesotho, Australia and Israel is a Medical Cannabis Jurisdiction as at the date of this Agreement.
“Medical Cannabis-Related Activities” means any activities, including advertising or promotional activities,  relating  to  or  in  connection  with  the  importation,  exportation,  cultivation,  production, 
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purchase,  distribution  or  sale  of  Cannabis  or  Cannabis-related  products  solely  for  medical purposes.
“Non-Funding  Lender”  means  any  Lender  (i)  that  has  failed  to  fund  any  payment  or  Advance required to be made by it hereunder or to purchase all participations required to be purchased by it hereunder and under the Loan Documents, or (ii) that has given verbal or written notice to the Borrower, the Agent or any other Lender, or has otherwise publicly announced, that it believes that it may be unable to fund advances under one or more credit agreements to which it is a party, or (iii) with respect to which one or more Lender-Related Distress Events has occurred, or (iv) with respect to which the Agent believes, acting reasonably, that such Lender has defaulted or may default in fulfilling its obligations (whether as an agent, lender or letter of credit issuer) under one or  more  other  credit  agreements  to  which  it  is  a  party,  or  (v)  with  respect  to  which  the  Agent believes, acting reasonably, that there is a reasonable chance that such Lender will fail to fund any payment or Advance required to be made hereunder.
“Non-Medical  Cannabis  Jurisdiction”  means  any  country  in  which  it  is  legal  in  all  political subdivisions  therein  (including  for  greater  certainty  on  a  federal,  state  and  municipal  basis)  to undertake  Non-Medical  Cannabis-Related  Activities.  Canada  is  a  Non-Medical  Cannabis Jurisdiction as at the date of this Agreement.
“Non-Medical  Cannabis-Related  Activities”  means  Cannabis-Related  Activities  other  than Medical Cannabis-Related Activities.
“Non-Revolving Facilities” means Facility B and Facility C; and “Non-Revolving Facility” means either of them, as the context requires. 
“Non-Swingline Tranche” means the portion of Facility A other than the Swingline. 
“Obligations” means, at any time, all direct and indirect, contingent and absolute indebtedness, obligations and liabilities of the Borrower to the Agent and the Lenders under or in connection with this Agreement and the other Loan Documents at such time, specifically including the Outstanding Principal Amount and all accrued and unpaid interest thereon, and all obligations arising under or in connection with Service Agreements and Hedge Transactions, together with all fees, expenses and other amounts payable pursuant to this Agreement and the Security; except that if otherwise specified or required by the context, “Obligations” shall mean any portion of the foregoing.
“Outstanding Principal Amount” means, at any time, the aggregate of the Advances under the Facilities (or any Facility or any Tranche thereof if the context requires) which have not been repaid or satisfied at such time, determined as follows: (i) in the case of Prime-Based Loans and CDOR Loans, the principal amount thereof; (ii) in the case of Letters of Credit, the face amount thereof; and (iii) in the case of Hedge Transactions, the Aggregate Net Hedge Liability.
“Patents” means all rights, title and interests (and all related IP Ancillary Rights) arising under any requirement of Law in or relating to patents and applications therefor.
“Pension Plan” means (i) a “pension plan” or “plan” which is subject to the funding requirements of applicable pension benefits legislation in any jurisdiction, or (ii) any pension benefit plan or similar arrangement applicable to employees of any Company.
“Permitted Contingent Investment” means the acquisition of an option, warrant, right or other contingent agreement to make an Investment in a Person that is not exercisable, convertible or exchangeable  unless  and  until  (i)  each  jurisdiction  in  which  such  Person  proposes  to  carry  on Medical  Cannabis-Related  Activities  becomes  a  Medical  Cannabis  Jurisdiction;  and  (ii)  each jurisdiction in which such Person proposes to carry on Non-Medical Cannabis-Related Activities becomes a Non-Medical Cannabis Jurisdiction.
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“Permitted Funded Debt” means, without duplication: (i) the Obligations; (ii) indebtedness of any Company to another Company; (iii) Subordinated Debt including the Shareholder Loans and the BDC Participation Loan; and (iv) Funded Debt of the Companies secured by Permitted Liens.
“Permitted Liens” means:
(a)Statutory Liens in respect of any amount which is not at the time overdue;
(b)Statutory Liens in respect of any amount which may be overdue but the validity of which is being contested in good faith and in respect of which reserves have been established in accordance with GAAP;
(c)Liens or rights of distress reserved in or exercisable under any lease for rent not at the time overdue  or  for  compliance  with  the  terms  of  such  lease  not  at  the  time  in  default;  and security deposits given under leases not in excess of six (6) months’ rent;
(d)any  obligations  or  duties  affecting  Real  Property  due  to  any  public  utility  or  to  any municipality  or  government,  or  to  any  statutory  or  public  authority,  with  respect  to  any franchise, grant, licence or permit in good standing and any defects in title to structures or other facilities arising solely from the fact that such structures or facilities are constructed or installed on Real Property under government permits, leases or other grants in good standing; which obligations, duties and defects in the aggregate do not materially impair the use of such property, structures or facilities for the purpose for which they are held;
(e)defects or irregularities in the title to Real Property which are of a minor nature and in the aggregate will not materially affect the value of such Real Property or impair the use of such Real Property for the purposes for which it is held;
(f)Liens  in  respect  of  cash,  including  cash  deposits,  granted  in  the  ordinary  course  of business  as  security  for  obligations  in  connection  with  contracts,  bids,  tenders  or expropriation proceedings, surety or appeal bonds, costs of litigation when required by law and public and statutory obligations;
(g)warehousemen’s,  storers’,  repairers’,  carriers’  and  other  similar  Liens  granted  in  the ordinary course of business;
(h)security given to a public utility or any municipality or government or to any statutory or public authority to secure obligations incurred to such utility, municipality, government or other authority in the ordinary course of business and not at the time overdue;
(i)Liens and privileges arising out of judgments or awards in respect of which: an appeal or proceeding for review has been commenced; a stay of execution pending such appeal or proceedings  for  review  has  been  obtained;  and  reserves  have  been  established  in accordance with GAAP;
(j)any  Lien  affecting  any  Real  Property  arising  in  the  ordinary  course  of  business  or  in connection with the construction or improvement of such Real Property or arising out of the furnishing of materials or supplies therefor, provided that such Lien secures moneys not at the time overdue (or if overdue, the validity of which is being contested in good faith and in respect of which reserves have been established in accordance with GAAP), notice of such Lien has not been given to the Agent or any Lender and such Lien has not been registered against title to such Real Property;
(k)Liens  affecting  any  Real  Property  arising  in  connection  with  registered  restrictions, covenants,  land  use  contracts,  building  schemes,  declarations  of  covenants,  conditions and  restrictions,  servicing  agreements  in  favour  of  any  Governmental  Authority, 
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easements,  rights-of-way,  servitudes,  reciprocal  agreements,  cost-sharing  agreements, party wall agreements, shoring agreements, or other similar rights in or with respect to such Real Property (including open space and conservation easements, restrictions or similar agreements and rights of way and servitudes for railways, water, sewer, drainage, gas and oil  pipelines,  electricity,  light,  power,  telephone,  telegraph,  internet  or  cable  television services and utilities) granted to or reserved by other Persons or properties, which, in the aggregate, do not materially impair the use of such Real Property for its intended purposes or the operation of the business thereon, and provided that same have been complied with;
(l)Liens  affecting  any  Real  Property  arising  in  connection  with  site  plan  agreements, subdivision agreements, development agreements and similar instruments registered or recorded  in  the  ordinary  course  of  business  which  do  not,  in  the  aggregate,  materially impair  the  use  of  such  Real  Property  for  its  intended  purposes  or  the  operation  of  the business thereon, and provided that same have been complied with;
(m)Liens affecting any Real Property arising in connection with any right reserved to or vested in any Governmental Authority, by the terms of any permit, licence, certificate, order, grant, classification (including any zoning Laws and ordinances and similar legal requirements), registration or other consent, approval or authorization acquired by such Person from any Governmental Authority or by any Law, to terminate any such permit, licence, certificate, order,  grant,  classification,  registration  or  other  consent,  approval  or  authorization  or  to require annual or other payments as a condition to the continuance thereof and which, in the  aggregate,  do  not  materially  impair  the  use  of  such  Real  Property  for  its  intended purposes  or  the  operation  of  the  business  thereon,  and  provided  that  same  have  been complied with; 
(n)Liens affecting any Real Property arising in connection with the reservations, limitations, provisos and conditions, if any, expressed in any grants of such Real Property from any Governmental Authority, which, in the aggregate, do not materially impair the use of such Real  Property  for  its  intended  purposes  or  the  operation  of  the  business  thereon,  and provided that same have been complied with;
(o)reservations, conditions and restrictions in respect of any Real Property contained in the original grant of land from the Crown, as varied by statute;
(p)Liens existing as of the date of this Agreement which are permitted exceptions under any title insurance policies delivered to and accepted by the Agent in respect of the Property; 
(q)Permitted Purchase-Money Security Interests;
(r)Liens  securing  Subordinated  Debt,  including  the  Shareholder  Loans  and  the  BDC Participation Loan;
(s)the Specific Permitted Liens;
(t)the Security; and
(u)any  other  Lien  in  respect  of  which  the  Lenders  in  their  discretion  provide  their  written consent;
provided that the use of the term “Permitted Liens” to describe the foregoing Liens shall mean that such Liens are permitted to exist (whether in priority to or subsequent in priority to the Security, as determined by Applicable Law); and for greater certainty such Liens shall not be entitled to priority over the Security by virtue of being described in this Agreement as “Permitted Liens”.
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“Permitted  Purchase-Money  Security  Interests”  means  Purchase-Money  Security  Interests incurred or assumed in connection with the purchase, leasing or acquisition of capital equipment in the ordinary course of business provided that the aggregate amount of the Companies’ liability thereunder  does  not  at  any  time  exceed  two  million  Canadian  Dollars  (CDN$2,000,000),  and provided further that such capital equipment does not become affixed to any Real Property.
“Person” means a natural person, corporation, limited liability company, unlimited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity. 
“Potential  Statutory  Priority  Amount”  at  any  time  means  the  amount  of  all  employee  source deductions, goods and services tax and all other similar amounts payable by the Companies at such time which have not been paid or remitted when due and could result in a Statutory Lien.
“PPA Fair Value Adjustments” means any adjustments to the net income of the Borrower resulting from the Borrower’s election to apply ‘pushdown accounting’ in accordance with the Accounting Standards  Update  (ASU)  2014-17,  Business  Combinations  (Topic  805):  Pushdown  Accounting, issued by the Financial Accounting Standards Board in November, 2014.
“Prime-Based  Loan”  means  a  loan  made  by  a  Lender  to  the  Borrower  in  Canadian  Dollars  in respect of which interest is determined by reference to the Prime Rate.
“Prime Rate” means the greater of the following: (i) the rate of interest announced from time to time by BMO as its reference rate then in effect for determining rates of interest on Canadian Dollar loans to its customers in Canada and designated as its prime rate; and (ii) the thirty (30) day CDOR Rate plus one-half percent (0.5%) per annum.
“Proceeds of Realization” means all amounts received by the Agent or any Lender in connection with: (i) any realization in respect of the Security or any portion thereof, whether occurring as a result of enforcement or otherwise, (ii) any sale, expropriation, loss or damage or other disposition of the Collateral or any portion thereof (except any such disposition permitted pursuant to Section 7.02(d),  and  also  excluding  any  insurance  proceeds  which  are  released  to  the  Companies  in accordance with Section 8.08), and (iii) any other amount paid by or recovered from any Credit Party,  including  as  a  result  of  its  dissolution,  liquidation,  bankruptcy  or  winding-up  or  any  other distribution of its assets to creditors; together with all other amounts which are expressly deemed to constitute “Proceeds of Realization” in this Agreement.
“Projects” means the D2 Project and the D3 Project, collectively and “Project” means either one of them, as the context requires.
“Properties” means the D2 Property and the D3 Property; and “Property” means either of them, as the context requires.
“Proportionate Share” in respect of any Lender means:
(a)in the context of such Lender’s obligation to make Advances under a Facility or Tranche, such Lender’s Commitment to make Advances under that Facility or Tranche divided by the aggregate amount of all Lenders’ Commitments to make Advances under that Facility or Tranche;
(b)subject to Section 11.03, in the context of any Lender’s entitlement to receive payments of principal, interest or fees under a Facility or Tranche, the Outstanding Principal Amount due to such Lender under that Facility or Tranche divided by the aggregate amount of the Outstanding Principal Amount due to all Lenders under that Facility or Tranche; and
(c)in any other context, such Lender’s Commitment divided by the aggregate of all Lenders’ Commitments.
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“Purchase-Money Security Interest” means (i) a Capital Lease; or (ii) a Lien on any property or asset which is created, issued or assumed to secure the unpaid purchase price thereof, provided that such Lien is restricted to such property or asset (and all additions thereto and replacements and proceeds thereof) and secures an amount not in excess of the purchase price thereof and any interest and fees payable in respect thereof.
“Qualified Currency” means the legal tender of any Approved Medical Cannabis Jurisdiction or Approved Non-Medical Cannabis Jurisdiction.
“Real Property” means a freehold or leasehold interest in real property, and includes all buildings and other improvements situated thereon and all fixtures attached thereto.
“Related Person” in relation to any Person means a Subsidiary, Affiliate, Associate or employee of such Person.
“Repayment”  means  a  repayment  by  the  Borrower  on  account  of  the  Outstanding  Principal Amount.
“Repayment Notice” means a notice delivered by the Borrower to the Agent committing it to make a Repayment, in the form of Exhibit “E”.
“Required Lenders” means (i) at any time prior to the occurrence of an Event of Default which is continuing, any two or more Lenders which have issued Commitments hereunder representing two-thirds (2/3) or more of the total amount of credit available under the Facilities; and (ii) at any time after the occurrence of an Event of Default which is continuing, any two or more Lenders holding two-thirds (2/3) or more of the Outstanding Principal Amount under the Facilities; except that if at any time there are only two (2) Lenders under this Agreement, “Required Lenders” shall mean both Lenders, and if at any time there is only one (1) Lender under this Agreement, “Required Lenders” shall mean such Lender.
“Requirements  of  Environmental  Law”  means:  (i)  obligations  under  common  law;  (ii) requirements  imposed  by  or  pursuant  to  statutes,  regulations  and  by-laws  whether  presently  or hereafter in force; (iii) directives, policies and guidelines issued or relied upon by any Governmental Authority to the extent such directives, policies or guidelines have the force of law; (iv) permits, licenses,  certificates  and  approvals  from  Governmental  Authorities  which  are  required  in connection  with  air  emissions,  discharges  to  surface  or  groundwater,  noise  emissions,  solid  or liquid  waste  disposal,  the  use,  generation,  storage,  transportation  or  disposal  of  Hazardous Materials;  and  (v)  requirements  imposed  under  any  clean-up,  compliance  or  other  order  made pursuant to any of the foregoing, in each and every case relating to environmental, health or safety matters including all such obligations and requirements which relate to (A) solid, gaseous or liquid waste generation, handling, treatment, storage, disposal or transportation of Hazardous Materials and (B) exposure to Hazardous Materials.
“Responsible Person” means (i) an officer or director of any Company or (ii) any other Person required to hold a security clearance pursuant to the Cannabis Act or the Cannabis Regulations.
“Rollover” means the renewal of an Availment Option upon its maturity in the same form.
“Rollover Notice” means a notice substantially in the form of Exhibit “C” given by the Borrower to the Agent for the purpose of requesting a Rollover.
“Sanctioned  Entity”  means  (a)  a  country  or  a  government  of  a  country,  (b)  an  agency  of  the government  of  a  country,  (c)  an  organization  directly  or  indirectly  controlled  by  a  country  or  its government, (d) a Person resident in or determined to be resident in a country, in each case, that is subject to a sanctions program administered and enforced by a Sanctions Authority.
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“Sanctioned Person” means a Person that is, or is owned or Controlled by Persons that are, the subject of any Sanctions.
“Sanctions”  means  the  sanctions  laws,  regulations,  embargoes  or  restrictive  measures administered, enacted or enforced by any Sanctions Authority.
“Sanctions  Authority”  means  Canada  or  any  other  country  having  jurisdiction  over  any  of  the Companies or the respective Governmental Authorities of any of the foregoing.
“Security”  means  the  Guarantees,  security  agreements,  mortgages,  debentures  and  other documents required to be provided pursuant to Article VIII and all other documents and agreements delivered by the Credit Parties or any other Persons to the Agent or the Lenders from time to time as security for the payment and performance of the Obligations, and the Liens constituted by the foregoing.
“Senior Funded Debt” means, at any time, the Funded Debt of the Borrower on a consolidated basis at such time, excluding Subordinated Debt.
“Senior Funded Debt to EBITDA Ratio” means, at any time, the ratio of (i) Senior Funded Debt at such time to (ii) EBITDA in the immediately preceding twelve (12) month period.
“Service Agreements” is defined in Section 4.03.
“Shareholder Loan Agreement” means the Shareholder Loan Agreement among the Borrower and the Shareholders dated July 5, 2018, as amended by an Amendment Agreement No. 1 dated August  27,  2018,  an  Amendment  Agreement  No.  2  dated  October  1,  2018,  an  Amendment Agreement No. 3 dated November 7, 2018, an Amendment Agreement No. 4 dated March 6, 2020, an Amendment Agreement No. 5 dated July 19, 2021, an Amendment Agreement No. 6 dated July 22, 2021 and an Amendment Agreement No. 7 dated March 31, 2022.
“Shareholder Loans” means the loans advanced by Village to the Borrower from time to time on or before the Amendment Closing Date in the aggregate principal amount of not less than thirteen million Canadian Dollars (CDN$13,000,000), bearing interest at a rate not in excess of eight percent (8%) per annum calculated semi-annually and payable on demand, pursuant to the Shareholder Loan Agreement.
“Shareholders” means Village and any Person who becomes a shareholder in the Borrower in accordance with the terms of this Agreement.
“Solvent” means, with respect to any Person as of the date of determination, (i) the aggregate property of such Person is sufficient, if disposed of at a fairly conducted sale under legal process, to enable payment of all its obligations, due and accruing due; (ii) such Person is able to meet its obligations as they generally become due; and (iii) such Person has not ceased paying its current obligations in the ordinary course of business as they generally become due; for purposes of this definition, the amount of any contingent obligation at such time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.  
“Specific Permitted Liens” means the Liens described in Schedule 6.01(i), as such Liens may be amended or replaced from time to time on substantially similar terms and conditions provided that the principal amount of the indebtedness secured thereby is not increased.
“Statutory Lien” means a Lien in respect of any property or assets of a Company created by or arising  pursuant  to  any  Applicable  Law  in  favour  of  any  Governmental  Authority  to  secure  any obligation, including a Lien for the purpose of securing such Company’s obligation to deduct and 
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remit employee source deductions, goods and services tax and harmonized sales tax pursuant to the Income Tax Act (Canada), the Excise Tax Act (Canada), the Canada Pension Plan (Canada), the Employment Insurance Act (Canada) and any legislation in any jurisdiction similar to or enacted in replacement of the foregoing from time to time.
“Subordinated Debt” means indebtedness of any Company to any Person which the Required Lenders in their sole discretion have consented to in writing and in respect of which the holder thereof has entered into a subordination, postponement and standstill agreement in favour of the Agent in form and substance satisfactory to the Agent and registered in all places where necessary or desirable to protect the priority of the Security, which shall provide (among other things) that: (A) the  maturity  date  of  such  indebtedness  is  later  than  the  Maturity  Date;  (B)  the  holder  of  such indebtedness may not receive any payments on account of principal or interest thereon (except to the  extent,  if  any,  expressly  permitted  therein);  (C)  any  security  held  in  respect  of  such indebtedness is subordinated to the Security; (D) the holder of such indebtedness may not take any  enforcement  action  in  respect  of  any  such  security  (except  to  the  extent,  if  any,  otherwise expressly provided therein) without the prior written consent of the Agent; and (E) any enforcement action taken by the holder of such indebtedness will not interfere with the enforcement action (if any) being taken by the Agent in respect of the Security.
“Subsidiary”  means  a  Person  (other  than  a  natural  person)  which  is  Controlled,  directly  or indirectly,  by  another  Person  (other  than  a  natural  person);  and  for  greater  certainty  includes  a Subsidiary of a Subsidiary.
“Substitution” means the substitution of one Availment Option for another, and does not constitute a fresh or new Advance.
“Substitution Notice” means a notice substantially in the form of Exhibit “D” given by the Borrower to the Agent for the purposes of requesting a Substitution. 
“Swingline” is defined in Section 2.07.
“Swingline Commitment” means the commitment of the Swingline Lender to extend credit under the  Swingline  up  to  the  Swingline  Limit,  and  comprising  a  portion  of  such  Lender’s  Facility  A Commitment, as set out in Exhibit “A”.
“Swingline Lender” means BMO in such capacity.
“Swingline Limit” means one million, five hundred thousand Canadian Dollars (CDN$1,500,000).
“Taxes” is defined in the CBA Model Provisions.
“Total Funded Debt” means, at any time, the Funded Debt of the Borrower on a consolidated basis at such time, specifically including for greater certainty the Outstanding Principal Amount and all Subordinated Debt of the Companies.
“Total Funded Debt to EBITDA Ratio” means, at any time, the ratio of (i) Total Funded Debt at such time to (ii) EBITDA in the immediately preceding twelve (12) month period.
“Trade Secrets” means all right, title and interest (and all related IP Ancillary Rights) arising under any requirement of Law in or relating to trade secrets.
“Trademarks” means all right, title and interest (and all related IP Ancillary Rights) in trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, logos and other source or business identifiers and, in each case, all goodwill 
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associated therewith, all registrations and recordations thereof and all applications in connection therewith.
“Tranche” means a designated portion of a Facility which is subject to certain additional terms and conditions as provided herein. 
“Unfunded Capital Expenditures” means Capital Expenditures made by the Companies which are not funded by any one or more of the following: an Advance under, Facility A, Facility B or Facility C, a Permitted Purchase-Money Security Interest, Subordinated Debt, insurance proceeds, or proceeds from an asset disposition.
“Unrestricted Cash” means, as of any date of determination, the amount of all monies standing to the credit of the Borrower that is in bank accounts maintained by the Borrower with the Agent that are (a) not subject to any Lien (other than a Permitted Lien), and (b) not subject to any restriction (specifically  including  for  greater  certainty  any  restriction  under  a  Permitted  Lien)  which  would prevent  the  Borrower  from  using  such  monies  for  operating  purposes  in  the  ordinary  course  of business.
“Village” means Village Farms International, Inc., a corporation subsisting under the federal laws of Canada.
“Village LP” means Village Farms Canada Limited Partnership, a limited partnership formed and existing under the laws of British Columbia.
“Year-end  Financial  Statements”  means,  in  respect  of  any  Person  at  any  time,  the  audited financial statements of such Person (on a consolidated and unconsolidated basis) in respect of its most  recently  completed  Fiscal  Year  prepared  in  accordance  with  GAAP,  including  the  notes thereto and an unqualified opinion of its auditor with respect thereto.
1.02 Accounting Principles
Except  as  otherwise  provided  herein,  (i)  each  financial  term  in  this  Agreement  shall  be  interpreted  in accordance with GAAP in effect on the date of such interpretation; and (ii) where the character or amount of any asset or liability or item of revenue or expense is required to be determined, or any consolidation or other  computation  is  required  to  be  made  for  the  purpose  of  this  Agreement,  such  determination  or calculation  shall  be  made  in  accordance  with  GAAP  in  effect  on  the  date  of  such  determination. Notwithstanding the foregoing, if after the date of this Agreement there is a change in GAAP (referred to herein as an “accounting change”), and if any financial ratio or amount determined pursuant to Section 7.03 would be materially different as a result of such accounting change, the Lenders and the Borrower shall  discuss  whether  they  wish  to  amend  any  financial  covenants  in  Section  7.03  as  result  of  such accounting change.  Unless any such amendments have been agreed upon by all parties hereto in writing, compliance with the financial covenants in this Agreement shall be determined as if no such accounting change had occurred. In such event, the financial statements required to be provided hereunder shall be prepared in accordance with GAAP in effect on the date of such financial statements (after giving effect to such accounting change), and the Borrower shall concurrently deliver to the Agent a reconciliation in form and substance satisfactory to the Lenders showing all adjustments made to such financial statements in order to determine compliance with such financial covenants on the basis of GAAP in effect prior to such accounting change.
1.03 Currency References
All amounts referred to in this Agreement are in Canadian Dollars unless otherwise noted.
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1.04 Extended Meanings
Except to the extent otherwise expressly provided herein:
(a)terms defined in the singular have the same meaning when used in the plural, and vice-versa; and words importing gender include all genders;
(b)when used in the context of a general statement followed by a reference to one or more specific items  or  matters,  the  term  “including”  shall  mean  “including,  without  limitation”,  and  the  term “includes” shall mean “includes, without limitation”; 
(c)each reference herein to a statute or regulations made pursuant to a statute shall be deemed to include  all  amendments  to  such  statute  or  regulations  from  time  to  time  and  all  statutes  or regulations which may come into effect from time to time substantially in replacement for the said statutes or regulations;
(d)any reference herein to the exercise of discretion by the Agent or the Lenders (including phrases such as “in the discretion of”, “in the opinion of”, “to the satisfaction of” and similar phrases) shall mean that such discretion is absolute and unfettered; and
(e)references to a time of day or date mean the local time or date in the City of Toronto, Ontario unless otherwise specified.  
1.05 Amendment and Restatement
This Agreement amends and restates the provisions of the Existing Credit Agreement and shall not be considered a novation thereof. Any provision hereof which differs from or is inconsistent with a provision of the Existing Credit Agreement constitutes an amendment to the Existing Credit Agreement with each such amendment being effective as and from the date hereof.  This Agreement will not discharge or constitute a novation of any debt, obligation, covenant or agreement contained in the Existing Credit Agreement or in any Security, agreements, certificates and other documents executed and delivered by or on behalf of the Borrower in respect thereof or in connection therewith, but same shall remain in full force and effect save to the extent same are amended by the provisions of this Agreement.  All representations and warranties set out in this Agreement are freshly made on the date hereof, but nothing herein shall release or otherwise affect  the  Borrower’s  liability,  without  duplication,  in  connection  with  the  representations  and  warranties contained in the Existing Credit Agreement.  The Borrower hereby represents, warrants, acknowledges and agrees with the Agent that all Security executed and delivered by the Credit Parties to the Agent prior to the date of this Agreement is valid and enforceable in accordance with its terms and continues in full force and effect. Any reference to the Existing Credit Agreement in any other Loan Document shall be deemed to constitute a reference to this Agreement.
1.06 Exhibits and Schedules
The following Exhibits and Schedules are attached to this Agreement and incorporated herein by reference (but with respect to Exhibit “I”, subject to Section 12.01 hereof):
Exhibits
“A”-Lenders and Lenders’ Commitments
“B”-Draw Request
“C” -Rollover Notice
“D” -Substitution Notice
“E” -Repayment Notice
“F”-Borrowing Base Certificate 
“G” -Compliance Certificate
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“H” -Excess Cash Flow Certificate
“I”-CBA Model Provisions
Schedules
6.01(b)-Credit Parties Information
6.01(h)-Material Permits
6.01(i)-Specific Permitted Liens
6.01(m) -Intellectual Property6.01(o)
-Material Agreements
6.01(p)-Labour Agreements
6.01(q)-Environmental Matters 
6.01(r)-Litigation
6.01(s)-Pension Plans
ARTICLE II - FACILITY A
2.01 Establishment of Facility A
Subject to the terms and conditions in this Agreement, each Lender hereby establishes a revolving credit facility for the Borrower in the maximum principal amount indicated opposite such Lender’s name in Exhibit “A” under the heading “Facility A Commitments”. The said credit facilities are established by the Lenders severally and not jointly, and are collectively referred to in this Agreement as “Facility A”. Each Advance by a Lender under the Non-Swingline Tranche shall be made in its Proportionate Share of the Non-Swingline Tranche.
2.02 Purpose; Revolving Nature; Advances
(a)Facility A is a revolving facility. The Borrower shall be entitled to obtain Advances under Facility A 
from time to time and repay all or any portion of the Outstanding Principal Amount under Facility A from time to time; provided that the Outstanding Principal Amount under Facility A shall not, at any time,  exceed  the  Facility  A  Margin  Limit  in  effect  at  such  time.  Facility  A  shall  also  include  the Swingline, to a maximum amount equal to the Swingline Limit and on the basis more particularly described in Section 2.07 below.
(b)Advances  under  Facility  A  shall  be  used  by  the  Borrower  for  its  working  capital,  Capital Expenditures  (provided  that  outstanding  Advances  in  respect  of  Capital  Expenditures  may  not exceed, in the aggregate, $7,500,000 at any time) and other general corporate purposes.
2.03 Repayment
The Obligations under Facility A shall become due and payable on the earlier of: (i) the Acceleration Date; and (ii) the Maturity Date.
2.04 Availment Options
Subject  to  the  restrictions  contained  in  this  Agreement  (and  in  particular,  Sections  5.02  and  5.03),  the Borrower may receive Advances under Facility A by any one or more of the following Availment Options (or any combination thereof):
(a)Prime-Based Loans; or
(b)CDOR Loans with a CDOR Period of one (1) or three (3) months, subject to availability; or
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(c)Letters of Credit, subject to Section 2.08.
CDOR Loans will not be issued with a maturity date later than the Maturity Date. The Borrower may convert all or any portion of the Outstanding Principal Amount under Facility A in the form of any above Availment Option into another form of Availment Option, subject to and in accordance with the terms and conditions of this Agreement (but for greater certainty, CDOR Loans may not be converted into another Availment Option prior to the maturity thereof).
2.05 Interest and Fees
In respect of Advances under Facility A, the Borrower agrees to pay the following to the Agent on behalf of the Lenders (or if specified below, to the Issuing Bank for its own account):
(a)interest on Prime-Based Loans at the Prime Rate plus the Applicable Margin per annum, payable monthly in arrears on the last day of each and every month;
(b)in respect of any CDOR Loan, interest at the CDOR Rate applicable to the relevant CDOR Period plus  the  Applicable  Margin  per  annum,  payable  in  arrears  on  the  last  day  of  the  CDOR  Period applicable to that CDOR Loan; 
(c)the following fees in respect of each Letter of Credit: 
(i)in respect of the period from the date of issuance of such Letter of Credit to the last day of the then current Fiscal Quarter, a fee equal to the Applicable Margin in effect on the date of issuance multiplied by the face amount of such Letter of Credit multiplied by the number of days in such period (including the first and last days of such period) and divided by three hundred and sixty-five (365), payable on the last Business Day of such Fiscal Quarter; 
(ii)in respect of each subsequent Fiscal Quarter (other than the Fiscal Quarter in which the Letter of Credit shall expire), a fee equal to the Applicable Margin in effect on the first day of such Fiscal Quarter multiplied by the face amount of such Letter of Credit multiplied by the number of days in such Fiscal Quarter (including the first and last days of such period) and divided by three hundred and sixty-five (365), payable on the last Business Day of such Fiscal Quarter; and 
(iii)in respect of the Fiscal Quarter in which such Letter of Credit shall expire, a fee equal to the Applicable Margin in effect on the first day of such Fiscal Quarter multiplied by the face amount of such Letter of Credit multiplied by the number of days in the period from and including the first day of such Fiscal Quarter to but excluding the day on which such Letter of Credit expires and divided by three hundred and sixty-five (365), payable on the last Business Day of such Fiscal Quarter;
(d)a fronting fee in respect of each Letter of Credit payable to the Issuing Bank for its own account as follows: 
(i)in respect of the period from the date of issuance of such Letter of Credit to the last day of the  then  current  Fiscal  Quarter,  a  fee  equal  to  one-quarter  of  one  percent  (0.25%) multiplied by the face amount of such Letter of Credit multiplied by the number of days in such period (including the first and last days of such period) and divided by three hundred and sixty-five (365), payable on the last Business Day of such Fiscal Quarter; 
(ii)in respect of each subsequent Fiscal Quarter (other than the Fiscal Quarter in which the Letter of Credit shall expire), a fee equal to one-quarter of one percent (0.25%) multiplied by the face amount of such Letter of Credit multiplied by the number of days in such Fiscal 
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Quarter (including the first and last days of such period) and divided by three hundred and sixty-five (365), payable on the last Business Day of such Fiscal Quarter; and 
(iii)in respect of the Fiscal Quarter in which such Letter of Credit shall expire, a fee equal to one-quarter of one percent (0.25%) multiplied by the face amount of such Letter of Credit multiplied by the number of days in the period from and including the first day of such Fiscal Quarter to but excluding the day on which such Letter of Credit expires and divided by three  hundred  and  sixty-five  (365),  payable  on  the  last  Business  Day  of  such  Fiscal Quarter; 
(e)administrative fees payable to the Issuing Bank for its own account in accordance with its usual practice in respect of the issuance, amendment and renewal of Letters of Credit; and
(f)a standby fee with respect to the unused portion of the Non-Swingline Tranche, calculated on a daily  basis  as  being  the  difference  between  (i)  the  Facility  A  Maximum  Amount  (less  the Commitments of any Non-Funding Lenders under Facility A), less the Swingline Limit and (ii) the Outstanding  Principal  Amount  under  the  Non-Swingline  Tranche,  multiplied  by  the  Applicable Margin  and  divided  by  365;  which  standby  fee  shall  be  payable  quarterly  in  arrears  on  the  last Business Day of each Fiscal Quarter based on the number of days in such Fiscal Quarter (including the first day and excluding the last day in such Fiscal Quarter) and on the Maturity Date.
2.06 Facility A Margin Limit
(a)In this Agreement, “Facility A Margin Limit” means, at any time, an amount equal to the lesser of: (A) the Facility A Maximum Amount; and (B) an amount determined at such time as follows:
(i)eighty-five percent (85%) of the Lenders’ estimated valuation of Eligible Receivables owing by Governmental Authorities domiciled in Canada; plus
(ii)seventy-five  percent  (75%)  of  the  Lenders’  estimated  valuation  of  Eligible  Receivables owing by other account debtors domiciled in Canada; plus
(iii)the lower of (x) sixty-five percent (65%) of the Lenders’ estimated valuation (in Canadian Dollars  based  on  the  then  applicable  Exchange  Rate)  of  Eligible  Receivables  owing  by account debtors domiciled in other Approved Jurisdictions; and (y) one million Canadian Dollars (CDN$1,000,000); less  
(iv)the Potential Statutory Priority Amount at such time.
(b)The  Facility  A  Margin  Limit  shall  be  adjusted  as  at  the  date  of  each  receipt  by  the  Agent  of  a Borrowing Base Certificate and shall remain in effect until receipt by the Agent of a subsequent Borrowing Base Certificate; provided that if the Agent does not receive a Borrowing Base Certificate on or before the date required pursuant to Section 7.04, the Facility A Margin Limit shall be reduced to the lowest Facility A Margin Limit in the preceding twelve (12) months or such lower amount estimated by the Facility A Lenders acting reasonably to be the Facility A Margin Limit determined in  accordance  with  the  formula  in  paragraph  (a)  above,  until  such  time  as  a  Borrowing  Base Certificate is thereafter received by the Agent.
(c)The Facility A Lenders shall have no obligation to make any Advance under Facility A if after making such  Advance  the  Outstanding  Principal  Amount  under  Facility  A  would  exceed  the  Facility  A Margin Limit then in effect.
(d)If  at  any  time  the  aggregate  amount  of  the  Outstanding  Principal  Amount  under  Facility  A  is  in excess of the Facility A Margin Limit for any reason (specifically including as a result of a fluctuation in currency exchange rates), the Borrower agrees that immediately after receipt of a written request 
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from  the  Agent  it  will  make  Repayments  under  Facility  A  in  such  amount  as  will  result  in  the aggregate amount of the Outstanding Principal Amount under Facility A not exceeding the Facility A Margin Limit. The Agent shall firstly apply such Repayment against Advances under Facility A; and  any  remaining  portion  of  such  Repayment  shall  be  held  by  the  Agent  and  applied  against CDOR Loans and Letters of Credit under Facility A upon the maturity thereof.
2.07 Swingline
A portion of Facility A in the maximum amount of the Swingline Limit (the “Swingline”) shall be subject to the following terms and conditions, in addition to any other applicable terms and conditions contained in this Agreement:
(a)The Swingline shall be established and maintained by the Swingline Lender only, and the Swingline Lender shall not have the right to assign or grant a participation in the Swingline in whole or in part to any other Person.
(b)The Outstanding Principal Amount under the Swingline shall not at any time exceed the Swingline Limit.
(c)The Swingline shall form a part of Facility A and, except to the extent provided in this Section, shall be subject to all terms and conditions of this Article II specifically including the Facility A Margin Limit.
(d)Subject to paragraph (f) below, Advances to and Repayments by the Borrower under the Swingline shall be made in the following manner. The Swingline Lender will make Advances to the Borrower into one or more Canadian Dollar bank accounts designated by the Borrower as required in order to honour cheques drawn by the Borrower on such accounts presented to the Swingline Lender for payment. As deposits are made into such accounts by the Borrower, the Swingline Lender shall withdraw funds from such accounts from time to time and apply such funds as repayments under the Swingline. Advances to the Borrower and Repayments by the Borrower under the Swingline shall be made without notice and shall be on a dollar for dollar basis (i.e. not subject to minimum amounts or multiples). 
(e)The obligation of the Swingline Lender to make each Advance under the Swingline shall be subject to the satisfaction of all conditions precedent in Section 9.02, except for the requirement in Section 9.02(c) to provide a Draw Request.
(f)Interest on the Outstanding Principal Amount under the Swingline shall be payable by the Borrower to the Swingline Lender (for its own account) at the Prime Rate plus the Applicable Margin per annum, payable monthly in arrears on the last day of each and every month.
(g)The  Borrower  hereby  agrees  to  pay  a  standby  fee  with  respect  to  the  unused  portion  of  the Swingline, payable to the Swingline Lender (for its own account), calculated on a daily basis as being the difference between (i) the Swingline Limit and (ii) the Outstanding Principal Amount under the Swingline, multiplied by the Applicable Margin and divided by 365; which standby fee shall be payable quarterly in arrears on the last Business Day of each Fiscal Quarter based on the number of days in such Fiscal Quarter (including the first day and excluding the last day in such Fiscal Quarter) and on the Maturity Date.
(h)The Swingline Lender may in its discretion at any time, by written notice to the Borrower, require the Borrower to request an Advance under Facility A from the Facility A Lenders in an amount (in this  paragraph  called  the  “Swingline  Reduction  Amount”)  for  the  purpose  of  reducing  the Outstanding Principal Amount under the Swingline; and the Borrower agrees to promptly comply with any such request. The proceeds of such Advance shall be applied to reduce the Outstanding Principal Amount under the Swingline accordingly. If the Borrower fails to comply with any such 
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request from the Swingline Lender within two (2) Business Days after receipt thereof, each Facility A Lender agrees that upon request by the Swingline Lender it will make an Advance under Facility A in an amount equal to its Proportionate Share of the Swingline Reduction Amount, the proceeds of  which  shall  be  applied  to  reduce  the  Outstanding  Principal  Amount  under  the  Swingline.  In addition, each Facility A Lender hereby accepts from the Swingline Lender a participation (which participation shall be non-recourse to the Swingline Lender) in the Outstanding Principal Amount under the Swingline from time to time, in such Lender’s Proportionate Share of Facility A. Each Facility A Lender hereby absolutely and unconditionally agrees to indemnify and hold the Swingline Lender  harmless  from  liability  in  respect  of,  such  Lender’s  said  Proportionate  Share  of  such Outstanding Principal Amount under the Swingline. Each said Facility A Lender acknowledges and agrees that its obligation to acquire a participation in such Outstanding Principal Amount under the Swingline and its said indemnity obligation are absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or Event of Default hereunder. For greater certainty however, nothing herein shall require a Facility A Lender to make Advances under Facility A in excess of its Commitment under Facility A.
2.08 Letters of Credit
Letters of Credit shall be subject to the following additional terms and conditions:
(a)Letters of Credit under Facility A may be issued in all Qualified Currencies. Letters of Credit will not be issued for the purpose of guaranteeing obligations of any Person, except as permitted under Section 7.02(b).  
(b)Each Letter of Credit shall have a term not in excess of one (1) year.
(c)The Equivalent Amount expressed in Canadian Dollars of the aggregate face amount of all Letters of  Credit  outstanding  at  any  time  under  Facility  A  may  not  exceed  six  million  Canadian  Dollars (CDN$6,000,000).
(d)If  a  Letter  of  Credit  is  issued  in  a  Qualified  Currency  other  than  Canadian  Dollars,  each  fee  in respect  of  such  Letter  of  Credit  payable  pursuant  to  section  2.05  hereof  shall  be  payable  in Canadian Dollars in accordance with Section 5.06.
(e)Each request for the issuance of a Letter of Credit shall be delivered by the Borrower to the Issuing Bank in accordance with the notice requirements in section 5.02(a) herein, together with the Issuing Bank’s customary form of application and indemnity agreement completed to its satisfaction and the proposed form of the Letter of Credit (which shall be satisfactory to the Issuing Bank) and such other certificates, documents and other information as the Issuing Bank may reasonably request.
(f)The obligation of the Borrower to reimburse the Issuing Bank for all drawings under Letters of Credit shall be absolute, unconditional and irrevocable and shall be satisfied strictly in accordance with their terms, irrespective of:
(i)any lack of validity or enforceability of any Letter of Credit;
(ii)the existence of any claim, setoff, defence or other right which the Borrower or any other Person may at any time have against the beneficiary under any Letter of Credit, the Issuing Bank or any Lender (other than the defence of payment in accordance with the terms of this Agreement or a defence based on the negligence or wilful misconduct of the Issuing Bank  or  any  Lender)  or  any  other  Person  in  accordance  with  this  Agreement  or  other transaction;
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(iii)any draft or other document presented under any Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; and
(iv)any other circumstance or event whatsoever, whether or not similar to any of the foregoing.
(g)In making any payment under any Letter of Credit (i) the Issuing Bank’s exclusive reliance on the documents presented to it under such Letter of Credit as to any and all matters set forth therein, including reliance on the amount of any draft presented under such Letter of Credit, whether or not the amount due to the beneficiary equals the amount of such draft and whether or not any document presented  pursuant  to  such  Letter  of  Credit  proves  to  be  insufficient  in  any  respect,  if  such document on its face appears to be in order, and whether or not any other statement or any other document  presented  pursuant  to  such  Letter  of  Credit  proves  to  be  forged  or  invalid  or  any statement therein proves to be inaccurate or untrue in any respect whatsoever and (ii) any non-compliance in any immaterial respect of the documents presented under such Letter of Credit with the terms thereof shall, in each case, not be deemed wilful misconduct or negligence of the Issuing Bank.
(h)The Issuing Bank and its correspondents may accept and act upon the name, signature, or act of any party purporting to be the executor, administrator, receiver, trustee in bankruptcy or other legal representative of any party designated in any Letter of Credit in the place of the name, signature, or act of such party.
(i)Concurrently with each request for the issuance of a Letter of Credit the Agent shall notify each Lender  of  the  principal  amount,  the  reference  number  and  the  expiration  date  thereof  and  the amount of such Lender’s participation therein. By the issuance of a Letter of Credit hereunder and without  further action on  the part of  the Issuing Bank  or the Lenders, each said Lender hereby accepts from the Issuing Bank a participation (which participation shall be without recourse to the Issuing Bank) in such Letter of Credit in such Lender’s Proportionate Share of Facility A effective upon  the  issuance  of  such  Letter  of  Credit.  Each  Lender  hereby  absolutely  and  unconditionally assumes, as primary obligor and not as a surety, and agrees to pay and discharge and to indemnify and hold the Issuing Bank harmless from liability in respect of, such Lender’s said Proportionate Share of the amount of any drawing under a Letter of Credit.  Each said Lender acknowledges and agrees that its obligation to acquire participations in each Letter of Credit issued by the Issuing Bank and its obligation to make the payments specified herein, and the right of the Issuing Bank to receive the same, in the manner specified herein, are absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or  Event  of  Default  hereunder,  and  that  each  such  payment  shall  be  made  without  any  offset, abatement, withholding or reduction whatsoever.  The Issuing Bank shall review each draft and any accompanying documents presented under a Letter of Credit and shall notify each said Lender of any  such  presentment.    Promptly  after  it  shall  have  ascertained  that  any  draft  and  any accompanying  documents  presented  under  such  Letter  of  Credit  appear  on  their  face  to  be  in substantial conformity with the terms and conditions of the Letter of Credit, the Issuing Bank shall give notice to each said Lender and the Borrower of the receipt and amount of such draft and the date on which payment thereon will be made, and each said Lender shall, by 11:00 a.m. Toronto time on the date such payment is to be made, pay its said Proportionate Share of the amount so drawn under the Letter of Credit in immediately available funds, and the Issuing Bank shall make the  appropriate  payment  to  the  beneficiary  of  such  Letter  of  Credit.    The  Borrower  agrees  to immediately reimburse each said Lender in an amount equal to the said payment by such Lender with interest thereon payable at the same rate and in the same manner as Prime-Based Loans under Facility A.
(j)On or before the Maturity Date the Borrower shall (i) arrange for the cancellation and return of all outstanding Letters of Credit to the Issuing Bank or (ii) provide cash collateral in favour of the Agent in  respect  of  all  outstanding  Letters  of  Credit  in  an  amount  equal  to  the  aggregate  of  the  face amounts of all such Letters of Credit, plus an additional amount estimated by the Issuing Bank in 
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respect  of  its  anticipated  fees  and  expenses  associated  with  the  settlement  of  such  Letters  of Credit. For greater certainty, the Agent shall have no obligation to release all or any portion of the Security unless and until all Letters of Credit are cancelled or such cash collateral is provided in respect thereof to the satisfaction of the Issuing Bank.
2.09 Cancellation
The  Borrower  may  from  time  to  time  upon  two  (2)  Business  Days’  prior  written  notice  to  the  Agent, permanently cancel any unadvanced portion of Facility A in a minimum amount of one hundred thousand Canadian  Dollars  (CDN$100,000)  without  payment  of  any  penalty  or  fee  (provided  that  such  required minimum amount shall not apply in the case of a cancellation of Facility A in its entirety). The Facility A Maximum Amount shall be automatically and permanently reduced by the amount so cancelled and each Lender’s  Commitment  under  Facility  A  shall  be  reduced  by  its  Proportionate  Share  of  the  amount  so cancelled.
ARTICLE III - NON-REVOLVING FACILITIES
3.01 Continuation of Facility B
Subject to the terms and conditions in this Agreement, each Lender hereby confirms that it has issued a Commitment in the maximum principal amount indicated opposite its name in Exhibit “A” under the heading “Facility B Commitments”.  The said Commitments have been established by the Lenders severally and not jointly, and are hereinafter collectively referred to as “Facility B”.  Facility B is a committed, non-revolving credit facility.
3.02 Continuation of Facility C
Subject to the terms and conditions in this Agreement, each Lender hereby confirms that it has issued a Commitment in the maximum principal amount indicated opposite its name in Exhibit “A” under the heading “Facility C Commitments”.  The said Commitments have been established by the Lenders severally and not jointly, and are hereinafter collectively referred to as “Facility C”.  Facility C is a committed, non-revolving credit facility.
3.03 Purpose
(a)Advances under Facility B have been used by the Borrower to assist in re-financing the D3 Property and in financing the upgrade and retrofit of the D3 Property.
(b)Advances under Facility C have been used by the Borrower to assist in financing the D2 Project and the D3 Project.
3.04 Non-Revolving Nature; Advances
(a)Facility B is a non-revolving facility, and any Repayment under Facility B may not be reborrowed.  Facility B has been fully advanced and no further Advances are permitted thereunder.
(b)Facility C is a non-revolving facility, and any Repayment under Facility C may not be reborrowed. Facility C has been fully advanced and no further Advances are permitted thereunder.
3.05 Repayment
(a)On the last Business Day of each Fiscal Quarter, the Borrower shall make a Repayment under Facility  B  in  an  amount  equal  to  2.50%  of  the  Outstanding  Principal  Amount  under  Facility  B immediately  following  the  final  Advance  under  Facility  B;  and  the  remaining  balance  of  the Outstanding Principal Amount under Facility B shall be due and payable on the Maturity Date.
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(b)On the last Business Day of each Fiscal Quarter, the Borrower shall make a Repayment under Facility  C  in  an  amount  equal  to  2.50%  of  the  Outstanding  Principal  Amount  under  Facility  C immediately  following  the  final  Advance  under  Facility  C;  and  the  remaining  balance  of  the Outstanding Principal Amount under Facility C shall be due and payable on the Maturity Date.
(c)In addition to all other Repayments required under this Section 3.05 the Borrower shall make a Repayment in an amount equal to fifty percent (50%) of the Excess Cash Flow in each Fiscal Year in which the Senior Funded Debt to EBITDA Ratio, measured as at December 31 of such Fiscal Year is greater than 2.50:1.00. Such Repayments shall be made not later than thirty (30) days after the date of delivery to the Agent of the Borrower’s Year-end Financial Statements for the applicable Fiscal Year. 
(d)The following Repayments shall be required in addition to all other Repayments required under this Agreement:
(i)If any Company receives net proceeds from a policy of insurance, the Borrower shall make a Repayment in an amount equal to such net proceeds within three (3) Business Days after such net proceeds are received, except to the extent that such proceeds are permitted to be retained as provided in Section 8.10.
(ii)If any Company receives net proceeds from an Equity Issuance or a transaction involving the creation of Subordinated Debt (except (A) net proceeds of the BDC Participation Loan; or (B) net proceeds resulting from an Equity Issuance to or the provision of Subordinated Debt by a Shareholder, including any Equity Issuance under Section 7.01(p) herein), within five (5) days after receipt of such net proceeds the Borrower shall make a Repayment in an amount equal to such net proceeds, except to the extent (if any) otherwise consented to in writing by the Agent upon the instructions of the Required Lenders acting reasonably. If  any  portion  of  such  Repayment  cannot  be  applied  against  the  Outstanding  Principal Amount until the maturity of one or more outstanding CDOR Loans, the Agent shall deposit such portion of the Repayment in an interest-bearing account in the name of the Borrower and  apply  such  portion  (including  accrued  interest  thereon)  against  the  Outstanding Principal Amount upon the maturity of such CDOR Loans.
(iii)If  any  Company  receives  net  proceeds  equal  to  or  greater  than  one  million  Canadian Dollars (CDN$1,000,000) from a transaction involving the sale, leasing or other disposition of any individual asset or a group of related assets in one or a series of related transactions (other than sales in the ordinary course of business), within one hundred eighty (180) days after receipt of such net proceeds the Borrower shall make a Repayment in an amount equal to the portion of such net proceeds which have not been applied to purchase similar assets (other than current assets).
As  used  herein,  “net  proceeds”  in  respect  of  any  above  transaction  means  the  gross  amount payable in respect of such transaction less any Taxes, sales commissions and other reasonable expenses  incurred  in  connection  with  the  transaction,  usual  and  reasonable  adjustments  in connection  with  the  transaction  and  any  other  amount  specifically  approved  in  writing  by  the Required Lenders acting reasonably. 
(e)Each  Repayment  under  paragraphs  (c)  and  (d)  above  shall  be  applied  against  the  Borrower’s obligation to make the remaining scheduled Repayments under the Non-Revolving Facilities (in each  case,  in  reverse  chronological  order)  on  a  pro  rata  basis  as  between  the  Non-Revolving Facilities, until the Outstanding Principal Amount under all Non-Revolving Facilities has been repaid in full; and thereafter such Repayment shall be applied against the Outstanding Principal Amount under Facility A, but for greater certainty such Repayment shall not reduce the Facility A Maximum Amount and the Borrower shall thereafter be entitled to receive further Advances under Facility A upon the satisfaction of all applicable conditions precedent.
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3.06 Availment Options
Subject  to  the  restrictions  contained  in  this  Agreement  (and  in  particular,  Sections  5.02  and  5.03),  the Borrower may receive Advances under each Non-Revolving Facility by any one or more of the following Availment Options (or any combination thereof):
(a)Prime-Based Loans; or
(b)CDOR Loans with a CDOR Period of one (1) or three (3) months, subject to availability.
CDOR Loans will not be issued with a maturity date later than the Maturity Date. The Borrower may convert all or any portion of the Outstanding Principal Amount under any Non-Revolving Facility in the form of any above Availment Option into another form of Availment Option, subject to and in accordance with the terms and conditions of this Agreement (but for greater certainty, CDOR Loans may not be converted into another Availment Option prior to the maturity thereof).
3.07 Interest and Fees
In respect of Advances under each Non-Revolving Facility, the Borrower agrees to pay the following:
(a)interest on Prime-Based Loans at the Prime Rate plus the Applicable Margin per annum, payable monthly in arrears on the last day of each and every month; and
(b)in respect of any CDOR Loan, interest at the CDOR Rate applicable to the relevant CDOR Period plus  the  Applicable  Margin  per  annum,  payable  in  arrears  on  the  last  day  of  the  CDOR  Period applicable to that CDOR Loan.
Except as otherwise provided in this Agreement, such payments shall be made to the Agent on behalf of the  Lenders;  and  the  Agent  shall  promptly  remit  to  each  Lender  its  Proportionate  Share  of  each  such payment.
3.08 Interest Rate Hedge Transactions
Within ninety (90) days after the final Advance under Facility C the Borrower shall enter into one or more Interest Rate Hedge Transactions with the Lenders such that the aggregate notional amount of all Interest Rate Hedge Transactions is not less than fifty percent (50%) of the aggregate Outstanding Principal Amount under the Non-Revolving Facilities after such Advance.
3.09 Voluntary Repayments
Upon not less than three (3) Business Days’ prior written notice to the Agent, the Borrower may make a Repayment on account of the Outstanding Principal Amount under a Non-Revolving Facility (except CDOR Loans  prior  to  the  maturity  thereof)  in  a  minimum  amount  of  one  hundred  Thousand  Canadian  Dollars (CDN$100,000) without payment of any penalty or fee, provided that the Borrower shall also concurrently unwind  Hedge  Transactions  to  the  extent  necessary  such  that  the  aggregate  notional  amount  of  all outstanding  Hedge  Transactions  relating  to  the  relevant  Non-Revolving  Facility  does  not  exceed  the Outstanding  Principal  Amount  under  that  Non-Revolving  Facility  at  such  time.  Any  such  voluntary Repayment shall be applied against the Borrower’s obligations to make scheduled Repayments under that Non-Revolving Facility (including the final Repayment of the Outstanding Principal Amount on the Maturity Date) in reverse chronological order; and the available credit (if any) under the relevant Non-Revolving Facility shall be automatically and permanently reduced by any such voluntary Repayment. The Agent shall promptly  remit  to  each  Lender  its  Proportionate  Share  of  any  such  voluntary  Repayment.  For  greater certainty however, CDOR Loans may not be repaid prior to the maturity thereof.
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ARTICLE IV - ANCILLARY CREDIT PRODUCTS
4.01 Hedge Transactions
(a)BMO (for greater certainty, in its capacity as a Lender hereunder and not in its capacity as the Agent)  shall  act  as  lead  arranger  for  all  Interest  Rate  Hedge  Transactions  to  be  entered  into between the Borrower and the Lenders hereunder, and shall offer each Lender an opportunity to participate  in  a  pro-rata  portion  of  such  Interest  Rate  Hedge  Transactions  pursuant  to  such arrangements as may be agreed between BMO and the respective Lenders.  
(b)Each  Hedge  Transaction  entered  into  between  the  Borrower  and  a  Lender  shall  be  upon  such terms as may be offered by such Lender in its discretion, subject to the terms of this Agreement.
(c)Hedge  Transactions  may  not  be  entered  into  for  speculative  purposes.    Without  limiting  the generality of the foregoing, Hedge Transactions will not be entered into which could result in the aggregate notional amount of all Hedge Transactions outstanding at any time being in excess of the aggregate Outstanding Principal Amount under the Non-Revolving Facilities at such time. The Borrower shall promptly take all actions which may be necessary or desirable from time to time to unwind one or more Interest Rate Hedging Agreements in whole or in part to the extent necessary in order that the aggregate notional amount of all Hedge Transactions outstanding at such time does not exceed the aggregate Outstanding Principal Amount under the Non-Revolving Facilities at such time.
(d)Currency Hedge Transactions may only be entered into in respect of Qualified Currencies. The term of each Currency Hedge Transaction shall expire not later than the earlier of (a) twelve (12) months from the date of such Currency Hedge Transaction, and (b) the Maturity Date.
(e)The term of each Interest Rate Hedge Transaction shall expire not later than the Maturity Date.
(f)In  respect  of  each  Hedge  Transaction  entered  into  between  the  Borrower  and  a  Lender,  the Borrower agrees to execute and deliver to such Lender all agreements as it may reasonably require (for greater certainty, specifically including an ISDA master agreement).
(g)The Security shall secure all obligations owing under or in respect of each Hedge Transaction; and the priority of such obligations shall rank on a pari passu basis with all other Obligations.
(h)The Borrower will not enter into or be a party to any Hedge Transactions with any Persons other than the Lenders.
(i)Each Hedge Transaction between the Borrower and a Lender shall include such Lender’s standard early termination events.  Without limiting the generality of the foregoing, each Hedge Transaction shall  also  stipulate  that  the  termination  of  any  Non-Revolving  Facility  shall  constitute  an  Early Termination Event (as defined in the applicable ISDA Master Agreement) and the Affected Party (as defined in such ISDA Agreement) shall be the counter-party to the Lender in such contract.  The Lender shall have the right to choose the payment measure and the payment method (as such terms are understood in the ISDA Master Agreement) in respect of such Early Termination Event.
4.02 MasterCard Line
Subject to the terms and conditions of this Agreement, BMO may in its discretion establish a line of credit for the Borrower in such principal amount as may be agreed between BMO and the Borrower from time to time,  in  respect  of  corporate  MasterCards  in  Qualified  Currencies  issued  by  BMO  to  the  Borrower`s employees to be used for corporate purposes only in Approved Jurisdictions, including purchasing supplies and  funding  miscellaneous  business  expenses  (the  “MasterCard  Line”).  BMO  shall  issue  MasterCards upon request by the Borrower from time to time upon the completion of, and in accordance with, the credit 
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card agreements and other documents customarily required by BMO in connection with the issuance of corporate MasterCards.  The Borrower shall pay interest and fees in connection with loans and advances made under the MasterCard Line at the rates and at the times set out in such credit card agreements and other  documents,  and  the  Borrower`s  indebtedness  thereunder,  including  accrued  and  unpaid  interest thereon, shall mature and become due and payable in full by the Borrower on the earlier of (i) the date specified in the such agreements, and (ii) the Maturity Date.
4.03 Service Agreements
BMO may in its discretion from time to time enter into agreements with the Borrower or any other Company in respect of cash management, payroll or other banking services (collectively, “Service Agreements”). The Borrower hereby agrees to indemnify and save harmless BMO in respect of all losses which it may suffer in respect of the failure of any Company to observe and perform its obligations under any Service Agreement, and for all purposes of this Agreement such Service Agreement shall be deemed to have been entered into between BMO and the Borrower. The Borrower agrees to pay to BMO (for its own account) fees in respect of Service Agreements as they may agree in writing from time to time.
ARTICLE V - GENERAL CONDITIONS
5.01 Matters relating to Interest
(a)Unless otherwise indicated, interest on any outstanding principal amount and all other amounts payable  hereunder  (including  unpaid  interest)  shall  be  calculated  daily  and  shall  be  payable monthly in arrears on the last day of each and every month; and if the maturity date of a Facility is not the end of a month, all accrued and unpaid interest in respect of that Facility shall be paid on such  maturity  date.  If  any  day  on  which  interest  is  payable  is  not  a  Business  Day,  the  interest payment due on such day shall be made on the next Business Day, and interest shall continue to accrue on the said principal amount and shall also be paid on such next Business Day. Interest shall accrue from and including the day upon which an Advance is made or is deemed to have been made, and ending on but excluding the day on which such Advance is repaid or satisfied. Any change in the Prime Rate shall cause an immediate adjustment of the interest rate applicable to Prime-Based Loans without the necessity of any notice to the Borrower.
(b)Unless otherwise stated, in this Agreement if reference is made to a rate of interest, fee or other amount “per annum” or a similar expression is used, such interest, fee or other amount shall be calculated on the basis of a year of three hundred and sixty-five (365) or three hundred and sixty-six (366) days, as the case may be. If the amount of any interest, fee or other amount is determined or expressed on the basis of a period of less than one year of three hundred and sixty-five (365) or three hundred and sixty-six (366) days, as the case may be, the equivalent yearly rate is equal to the  rate  so  determined  or  expressed,  divided  by  the  number  of  days  in  the  said  period,  and multiplied by the actual number of days in that calendar year. The Agent agrees that promptly upon request by the Borrower from time to time it will advise the Borrower of the Prime Rate and CDOR in effect at such time (or during any other period prior to such time), and will assist the Borrower in calculating the effective annual rate of interest required to be disclosed pursuant to section 4 of the Interest Act (Canada). The Borrower hereby irrevocably agrees not to plead or assert, whether by way  of  defence  or  otherwise,  in  any  proceeding  relating  to  this  Agreement  or  any  other  Loan Documents,  that  the  interest  payable  thereunder  and  the  calculation  thereof  has  not  been adequately disclosed to the Borrower, whether pursuant to section 4 of the Interest Act (Canada) or any other Law.
(c)Notwithstanding any other provisions of this Agreement, if the amount of any interest, premium, fees or other monies or any rate of interest stipulated for, taken, reserved or extracted under the Loan Documents would otherwise contravene the provisions of section 347 of the Criminal Code (Canada), section 4 or section 8 of the Interest Act (Canada) or any successor or similar legislation, or would exceed the amounts which any Lender is legally entitled to charge and receive under any 
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Law to which such compensation is subject, then such amount or rate of interest shall be reduced to  such  maximum  amount  as  would  not  contravene  such  provision;  and  to  the  extent  that  any excess has been charged or received such Lender shall apply such excess against the Outstanding Principal Amount and refund any further excess amount.
(d)Any  change  in  the  Applicable  Margin  in  respect  of  any  Availment  Option  shall  be  determined quarterly by the Agent based upon the information contained in the Compliance Certificate received by  the  Agent  in  respect  of  the  most  recently  completed  Fiscal  Quarter,  and  shall  take  effect commencing on the fifth (5th) Business Day following receipt of such Compliance Certificate by the Agent (in this paragraph called the “effective date”). For greater certainty:
(i)the interest rates and fees applicable to all Advances made on or after the effective date shall be based upon the said revised Applicable Margin;
(ii)from and after the effective date, the interest rates and fees applicable to all Prime-Based Loans outstanding on the effective date shall be based upon the said revised Applicable Margin; 
(iii)no readjustment shall be made in respect of any CDOR Loan which is outstanding on the effective date, and the said revised Applicable Margin shall apply to all CDOR Loans issued or made on or after the effective date; and
(iv)in respect of each Letter of Credit which is outstanding on the effective date there shall be a readjustment to the fee initially paid upon the issuance thereof, as follows: the fee relating to the period from the date of issuance to but excluding the effective date shall be based upon the Applicable Margin in effect during such period; and the fee relating to the period from and including the effective date to but excluding the date of expiry of such Letter of Credit shall be based upon the Applicable Margin in effect from and after the effective date; and the Agent and the Borrower agree to promptly make all such payments as the Agent may advise are required in order to effect such adjustments.
The determination of such adjustments by the Agent shall be deemed to be correct absent manifest error. If the Agent does not receive a Compliance Certificate on a date required pursuant to Section 7.04,  then  from  and  after  the  date  such  Compliance  Certificate  was  required  to  have  been delivered, the Applicable Margin in respect of each Availment Option shall be the highest Applicable Margin relating thereto, until the fifth Business Day following receipt by the Agent of the required Compliance Certificate.
(e)The  interest  rate  on  an  Advance  may  be  derived  from  an  interest  rate  benchmark  that  may  be discontinued or is, or may in the future become, the subject of regulatory reform.  Without limiting the generality of the foregoing, upon the occurrence of a Benchmark Transition Event, Section 5.8, provides a mechanism for determining an alternative reference rate of interest for the Benchmark. The Agent does not warrant or accept any responsibility for, and shall not have any liability with respect to: 
(i)the continuation of, the administration of, submission of, calculation of, performance of or any other matter related to any reference interest rate used in this Agreement (including the Prime Rate, the CDOR Rate, CORRA, Term CORRA or Daily Compounded CORRA) or any component definition thereof or rates referred to in the definition thereof, or with respect to any alternative or successor rate thereto, or replacement rate thereof (including any Benchmark Replacement), including whether the composition or characteristics of any such alternative, successor or replacement rate (including Benchmark Replacement) will be similar to, or produce the same value or economic equivalence of, or have the same volume or liquidity as the Prime Rate, the CDOR Rate, CORRA, Term CORRA or Daily Compounded  CORRA  or  any  other  Benchmark  (or  any  component  thereof)  prior  to  its discontinuance or unavailability; or 
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(ii)the effect, implementation or composition of any Conforming Changes. 
The Agent and its Affiliates and/or its other Related Persons may engage in transactions that affect the calculation of any reference interest rate (or component thereof) used in this Agreement or any alternative,  successor  or  replacement  rate  (including  any  Benchmark  Replacment)  and/or  any relevant adjustments thereto, in each case, in a manner adverse to the Borrower.  The Agent may select  information  sources  or  services  in  its  reasonable  discretion  to  ascertain  any  reference interest rate used in this Agreement, any component thereof, or rates referred to in the definition thereof or any other Benchmark, in each case pursuant to and in accordance with the terms of this Agreement, and shall have no liability to the Borrower, any Lender or any other person for damages of  any  kind,  including  direct  or  indirect,  special,  punitive,  incidental  or  consequential  damages, costs, losses or expenses (whether in tort, contract or otherwise and whether at law or in equity), for any error or calculation of any such reference interest rate (or component thereof) provided by any such information source or service. To the extent applicable, capitalized terms used in this paragraph (e) have the meanings given to them in Section 5.8.
5.02 Notice Periods
(a)The  Borrower  shall  provide  written  notice  to  the  Agent  in  respect  of  Advances,  Rollovers, Substitutions and Repayments as set out below:
(i)two  (2)  Business  Days’  notice  is  required  before  10:00  a.m.  in  respect  of  an  Advance, Rollover or Substitution relating to a Prime-Based Loan, except that no notice is required for Advances under the Swingline;
(ii)three (3) Business Days’ notice is required before 10:00 a.m. in respect of an Advance, Rollover or Substitution relating to a CDOR Loan; 
(iii)notice  is  required  for  each  voluntary  Repayment  under  a  Non-Revolving  Facility  in accordance with Section 3.09, as applicable; and
(iv)three (3) Business Days’ notice is required before 10:00 a.m. in respect of the issuance of a Letter of Credit.
(b)Notice of any Advance, Rollover or Substitution referred to in paragraph (a) above shall be given in the form of a Draw Request, Rollover Notice or Substitution Notice, as the case may be, attached hereto as Exhibits, and shall be given to the Agent at its address in Section 13.08.
(c)If notice is not provided as contemplated herein with respect to the maturity of any CDOR Loan, the  Agent  may  in  its  discretion  convert  such  CDOR  Loan  upon  its  maturity  into  a  Prime-Based Loan.
(d)Any conversion from one form of Availment Option to another shall be subject to satisfaction of all of terms and conditions applicable to the form of the new Availment Option.
5.03 Minimum Amounts, Multiples and Procedures re Draws, Substitutions and Repayments
(a)Advances under the Swingline shall be on a dollar for dollar basis and not subject to a minimum amount or a required multiple.
(b)Each request by the Borrower for an Advance or Substitution in the form of a Prime-Based Loan shall be in a minimum amount of $500,000 and a multiple of $100,000.
(c)Each request by the Borrower for an Advance by way of CDOR Loans shall be for an aggregate face or principal amount of CDOR Loans of not less than $5,000,000 and in a multiple of $100,000, 
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and in such amount as will result in the face amount of each CDOR Loan issued by a Lender being in a multiple of $100,000.
(d)Upon receipt of a Draw Request, the Agent shall promptly notify each Lender of the contents thereof and such Lender’s Proportionate Share of the Advance. Such Draw Request shall not thereafter be revocable.
(e)Each Advance shall be made by the applicable Lenders to the Agent at its address referred to in Section 13.08 or such other address as the Agent may designate by notice in writing to the Lenders from time to time. Each Lender shall make available its Proportionate Share of each said Advance to the Agent.  Unless the Agent determines that any condition of the Advance has not been satisfied or waived, the Agent shall make the funds so received from the Lenders available to the Borrower by 2:00 p.m. on the requested date of the Advance.  No Lender shall be responsible for any other Lender’s obligation to make available its Proportionate Share of the said Advance.
(f)All payments of principal, interest and other amounts made by the Borrower to the Agent in respect of the Outstanding Principal Amount under a Facility shall be paid by the Agent to the respective Lenders, each in accordance with its Proportionate Share. 
5.04 Place of Repayments
(a)All payments of principal, interest and other amounts to be made by the Borrower to the Agent pursuant to this Agreement shall be made at its address noted in Section 13.08 or to such other address as the Agent may direct in writing from time to time. All such payments received by the Agent on a Business Day before 2:00 p.m. shall be treated as having been received by the Agent on that day; payments made after such time on a Business Day shall be treated as having been received by the Agent on the next Business Day.
(b)Whenever any payment shall be due on a day which is not a Business Day, the date for payment thereof shall be extended to the next succeeding Business Day. Interest shall continue to accrue and be payable thereon as provided herein, until the date on which such payment is received by the Agent.
(c)The  Borrower  hereby  authorizes  and  directs  the  Agent  to  debit  automatically,  by  mechanical, electronic or manual means, any bank account maintained by it with the Agent for all amounts due and payable by it under this Agreement, including the repayment of principal and the payment of interest, fees and all charges relating to the operation of such bank account. The Agent shall notify the Borrower as to the particulars of such debits in accordance with its usual practice.
5.05 Evidence of Obligations (Noteless Advances) 
The  Agent  shall  open  and  maintain,  in  accordance  with  its  usual  practice,  accounts  evidencing  the Obligations;  and  the  information  entered  in  such  accounts  shall  constitute  prima  facie  evidence  of  the Obligations.    The  Agent  may,  but  shall  not  be  obliged  to,  request  the  Borrower  to  execute  and  deliver promissory  notes  from  time  to  time  as  additional  evidence  of  the  Obligations,  in  form  and  substance satisfactory to the Agent acting reasonably.
5.06 Determination of Equivalent Amounts
Whenever it is necessary or desirable at any time to determine the Equivalent Amount in Canadian Dollars of an amount expressed in any other Qualified Currency, or vice-versa (specifically including for greater certainty  the  determination  of  whether  the  Outstanding  Principal  Amount  under  any  Facility  or  Tranche exceeds the maximum amount of such Facility or Tranche), the Equivalent Amount shall be determined by reference to the Exchange Rate on the date of such determination. Notwithstanding the foregoing, however, for  the  purpose  of  determining  the  fees  applicable  to  Letters  of  Credit  issued  under  Facility  A  and  the 
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standby fees applicable to Facility A and Facility C, the Agent shall make such determination based upon the Exchange Rate in effect on the first Business Day of the month in which such determination is made.
5.07CDOR Loans
The following provisions are applicable to CDOR Loans made by the Lenders to the Borrower:
(a)Upon receipt by the Agent from the Borrower of a Draw Request, Substitution Notice or Rollover Notice in respect of a CDOR Loan, the Agent will promptly advise the Borrower of the CDOR Rate, such rate to be determined as at approximately 10:15 a.m. Toronto, Ontario time, two (2) Business Days before the commencement of the CDOR Period for such CDOR Loan.  
(b)If, for any reason: 
(i)the Agent is unable to determine the applicable CDOR Rate; or 
(ii)the CDOR Period requested by the Borrower is not reasonably available to the Agent; or
(iii)the  Required  Lenders,  acting  reasonably,  determine  that  for  any  reason,  (A) adequate and reasonable means do not exist for determining CDOR Rate for any requested CDOR Period with respect to a requested CDOR Loan, or (B) the CDOR Rate for any requested CDOR Period with respect to a requested CDOR
 Loan will 
not adequately and fairly reflect the cost to such Lenders of funding such CDOR Loan,
then, subject to Section 5.10(e), the Agent shall notify the Borrower of the foregoing and the  Lenders  shall  not  be  obliged  to  make  the  requested  CDOR  Loan;  and  if  such determination  takes  place  after  the  Lenders  have  already  made  Advances  in  the expectation  that  such  Advances  will  constitute  a  CDOR  Loan  for  the  CDOR  Period requested, the Agent may by written notice to the Borrower require the Borrower to select another  CDOR  Period  or  convert  the  said  CDOR  Loan  into  a  Prime-Based  Loan  with interest  payable  thereon  at  the  rate  and  in  the  manner  as  provided  in  Section  2.05  or Section 3.07 (as applicable) with respect to Prime-Based Loans.
(c)The Borrower acknowledges that the ability of the Lenders to maintain or provide any CDOR Loan and/or to charge interest on any CDOR Loan at a CDOR Rate is and will be subject to any statute, law, regulation, rule or direction by any Governmental Authority having jurisdiction which may prohibit or restrict or limit such loans and/or such interest.  The Borrower agrees that the Lenders shall have the right to comply with any such requirements and, if the Agent acting reasonably determines it to be necessary as a result of such requirement, the Lenders may convert any CDOR Loan to a Prime-Based Loan with interest payable thereon as set out in paragraph (a) above or require immediate repayment of all CDOR Loans and accrued interest thereon.
(d)Each CDOR Loan shall have a CDOR Period of one (1) or three (3) months, subject to availability and interest on each CDOR Loan shall be payable in accordance with Section 2.05 or Section 3.07 (as applicable).
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5.08Benchmark Replacement Setting
Notwithstanding anything to the contrary herein contained or in any other Loan Document (and any 
Hedge Transaction shall be deemed not to be a “Loan Document” for the purposes of this Section):
(a)On May 16, 2022 Refinitiv Benchmark Services (UK) Limited (“RBSL”), the administrator of the CDOR Rate, announced in a public statement that the calculation and publication of all tenors of the CDOR Rate will permanently cease immediately following a final publication on Friday, June 28, 2024. On the date that all Available Tenors of the CDOR Rate have either permanently or indefinitely ceased to be provided by RBSL (the “CDOR Cessation Date”), if the then-current Benchmark is the CDOR Rate, 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.  If the Benchmark Replacement is Daily Compounded CORRA, all interest payments will be payable on a monthly basis.
(b)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. (Toronto time) on the fifth (5th) Business Day after the date notice of such Benchmark Replacement is provided to the Lenders without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document so long as the Agent has not received, by such time, written notice of objection to such Benchmark Replacement from Lenders comprising the Required Lenders.  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 administrator or 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 Advances to be made, converted or continued that would bear interest by reference to such Benchmark until the Borrower’s receipt of notice from the Agent 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 Prime-Based Loans.  During the period referenced in the foregoing sentence, the component of the Prime Rate based upon the Benchmark will not be used in any determination of the Prime Rate.
(c)In connection with the implementation and administration of a Benchmark Replacement, the Agent 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.
(d)The Agent will promptly notify the Borrower and the Lenders of (i) the implementation of any Benchmark Replacement, (ii) any occurrence of a Term CORRA Transition Event, and (iii) the effectiveness of any Benchmark Replacement Conforming Changes.  Any 
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determination, decision or election that may be made by the Agent or, if applicable, any Lender (or group of Lenders) pursuant to this Section, 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.
(e)At any time (including in connection with the implementation of a Benchmark Replacement), if the then-current Benchmark is a term rate (including Term CORRA or the CDOR Rate), then (i) the Agent may remove any tenor of such Benchmark that is unavailable or non-representative for Benchmark (including Benchmark Replacement) settings, and (ii) the Agent may reinstate any such previously removed tenor for Benchmark (including Benchmark Replacement) settings.
(f)Notwithstanding anything to the contrary herein or in any Loan Document and subject to the proviso below in this paragraph, if a Term CORRA Transition Event and its related Term CORRA Transition Date have occurred, then on and after such Term CORRA Transition Date (i) the Benchmark Replacement described in paragraph (1)(A) of such definition will replace the then-current Benchmark for all purposes hereunder or 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; and (ii) each Advance outstanding on the Term CORRA Transition Date bearing interest based on the then-current Benchmark shall convert, on the last day of the then-current interest payment period, into an Advance bearing interest at the Benchmark Replacement described in paragraph (1)(A) of such definition for the respective Available Tenor as selected by the Borrower as is available for the then-current Benchmark; provided that, this paragraph (f) shall not be effective unless the Agent has delivered to the Lenders and the Borrower a Term CORRA Notice, and so long as the Agent has not received, by 5:00 p.m. (Toronto time) on the fifth (5th) Business Day after the date of the Term CORRA Notice, written notice of objection to such conversion to Term CORRA from Lenders comprising the Required Lenders or the Borrower.
(g)For the purposes of this Section 5.8, the following terms have the following meanings:
(i)“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  CDOR  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.
(ii)“Benchmark” means, initially, the CDOR Rate; provided that if a replacement of the Benchmark has occurred pursuant to this Section, 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.
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(iii)“Benchmark Replacement” means, for any Available Tenor:
(1)for the purposes of paragraph (a) of this Section 5.8, the first alternative set forth below that can be determined by the Agent:
(A) the sum of: (i) Term CORRA and (ii) 0.29547% (29.547 basis points) 
for  an  Available  Tenor  of  one-month’s  duration,  and  0.32138% (32.138 basis points) for an Available Tenor of three-months’ duration; or
(B) the sum of: (i) Daily Compounded CORRA and (ii) 0.29547% (29.547 
basis points); and
(2)for the purposes of paragraph (b) of this Section 5.8, the sum of (A) the alternate benchmark rate, and (b) an adjustment (which may be a positive or negative value or zero), in each case, that has been selected by the Agent 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  Canadian  dollar-denominated syndicated credit facilities at such time; 
provided  that,  if  the  Benchmark  Replacement  as  determined  pursuant  to paragraph  (1)  or  (2)  above  would  be  less  than  the  zero,  the  Benchmark Replacement will be deemed to be zero for the purposes of this Agreement and the other Loan Documents.
(iv)“Benchmark Replacement Conforming Changes” means, with respect to any Benchmark  Replacement,  any  technical,  administrative  or  operational  changes (including  changes  to  the  definition  of  “Prime  Rate,”  the  definition  of  “Business Day,” the definition of “CDOR Period,” timing and frequency of determining rates and  making  payments  of  interest,  timing  of  borrowing  requests  or  prepayment, conversion or continuation notices, the applicability and length of lookback periods, the  applicability  of  breakage  provisions,  and  other  technical,  administrative  or operational  matters)  that  the  Agent  decides  may  be  appropriate  to  reflect  the adoption and implementation of such Benchmark Replacement and to permit the administration  thereof  by  the  Agent  in  a  manner  substantially  consistent  with market practice (or, if the Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Agent determines that no market practice  for  the  administration  of  such  Benchmark  Replacement  exists,  in  such other manner of administration as the Agent decides is reasonably necessary in connection  with  the  administration  of  this  Agreement  and  the  other  Loan Documents).  
(v)“Benchmark  Transition  Event”  means,  with  respect  to  any  then-current Benchmark other than the CDOR Rate, 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 Bank of Canada, 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 (1) 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 (2) all Available 
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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.
(vi)“CORRA” means the Canadian Overnight Repo Rate Average administered and published by the Bank of Canada (or any successor administrator).
(vii)“Daily Compounded CORRA” means, for any day in an interest payment period, CORRA with interest accruing on a compounded daily basis, with the methodology and  conventions  for  this  rate  (which  will  include  compounding  in  arrears  with  a lookback) being established by the Agent in accordance with the methodology and conventions for this rate selected or recommended by the Relevant Governmental Body for determining compounded CORRA for business loans; provided that if the Agent  decides  that  any  such  convention  is  not  administratively  feasible  for  the Agent,  then  the  Agent  may  establish  another  convention  in  its  reasonable discretion;  and  provided  that  if  the  administrator  has  not  provided  or  published CORRA  and  a  Benchmark  Transition  Event  with  respect  to  CORRA  has  not occurred, then, in respect of any day for which CORRA is required, references to CORRA will be deemed to be references to the last provided or published CORRA.
(viii)“Relevant  Governmental  Body”  means  the  Bank  of  Canada,  or  a  committee officially endorsed or convened by the Bank of Canada, or any successor thereto.
(ix)“Term  CORRA”  means,  for  the  applicable  corresponding  tenor,  the  forward-looking term rate based on CORRA that has been selected or recommended by the  Relevant  Governmental  Body,  and  that  is  published  by  an  authorized benchmark administrator and is displayed on a screen or other information service, as identified or selected by the Agent in its reasonable discretion at approximately a time and as of a date prior to the commencement of a CDOR Period or other applicable interest period determined by the Agent in its reasonable discretion in a manner substantially consistent with market practice.
(x)“Term CORRA Notice” means the notification by the Agent to the Lenders and the Borrower of the occurrence of a Term CORRA Transition Event.
(xi)“Term CORRA Transition Date” means, in the case of a Term CORRA Transition Event, the date that is set forth in the Term CORRA Notice provided to the Lenders and  the  Borrower,  for  the  replacement  of  the  then-current  Benchmark  with  the Benchmark  Replacement  described  in  paragraph  1(A)  of  such  definition,  which date shall be at least thirty (30) Business Days from the date of the Term CORRA Notice.
(xii)“Term CORRA Transition Event” means the determination by the Agent that (a) Term  CORRA  has  been  recommended  for  use  by  the  Relevant  Governmental Body, and is determinable for any Available Tenor, (b) the administration of Term CORRA  is  administratively  feasible  for  the  Agent  and  (c)  a  Benchmark Replacement,  other  than  Term  CORRA,  has  replaced  the  CDOR  Rate  in accordance with paragraph (a) of this Section
5.09 No Repayment of Certain Availment Options
The Borrower acknowledges that CDOR Loans may not be repaid prior to the maturity thereof. If prior to the maturity of such Availment Option the Agent receives any funds from the Borrower or any other Person which are intended to be applied as a Repayment thereof, the Agent may retain such funds without any 
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obligation to invest such funds or pay interest thereon, and shall apply such funds against such Availment Option on the scheduled maturity date thereof.
5.10 Illegality
The obligation of any Lender to make Advances shall be suspended if and for so long as it is unlawful or impossible for such Lender to maintain its Commitment or make Advances hereunder as a result of the adoption of any Applicable Law or any change in any Applicable Law, or any change in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency charged with the  interpretation  or  administration  thereof,  or  compliance  by  such  Lender  with  any  request  or  directive (whether or not having the force of law) of any such Governmental Authority, central bank or comparable agency.
5.11 Anti-Money Laundering
The Borrower acknowledges that pursuant to AML Legislation the Agent and the Lenders may be required to obtain, verify and record information regarding the Companies and their respective directors, authorized signing officers, direct or indirect shareholders, partners or other persons in control of the Companies and the transactions contemplated hereby.  The Borrower shall promptly provide all such information, including any supporting documentation and other evidence, as may be requested by the Agent or any Lender, or any prospective assignee or participant of a Lender or the Agent, in order to comply with any applicable AML Legislation, whether now or hereafter in existence. If the Agent has ascertained the identity of any Company, or any authorized signatories of any Company, for the purposes of applicable AML Legislation, then the Agent shall:
(a)be deemed to have done so as an agent for each Lender, and this Agreement shall constitute a “written  agreement”  in  such  regard  between  each  Lender  and  the  Agent  within  the  meaning  of applicable AML Legislation; and
(b)provide  each  Lender  with  copies  of  all  information  obtained  in  such  regard  without  any representation or warranty as to its accuracy or completeness.
Notwithstanding the foregoing each Lender acknowledges and agrees that the Agent has no obligation to ascertain the identity of any Credit Party, or any authorized signatories of any Credit Party, on behalf of such Lender or to confirm the completeness or accuracy of any information that the Agent obtains from any Credit Party, or any such authorized signatory, in doing so.
5.12 Terrorist Lists
Each  Company  is  and  will  remain  in  compliance  in  all  material  respects  with  all  Canadian  economic sanctions  laws  and  implementing  regulations  under  the  Proceeds  of  Crime  (Money  Laundering)  and Terrorist Financing Act (Canada), the Criminal Code (Canada), the United Nations Act (Canada) and all similar applicable anti-money laundering and counter-terrorism financing provisions and regulations issued pursuant to any of the foregoing. No Company (i) is a Person designated by the Canadian government on any list set out in the United Nations Al-Qaida and Taliban Regulations, the Regulations Implementing the United  Nations  Resolutions  on  the  Suppression  of  Terrorism  or  the  Criminal  Code  (collectively,  the “Terrorist  Lists”)  with  which  a  Canadian  Person  cannot  deal  with  or  otherwise  engage  in  business transactions, (iii) is a Person who is otherwise the target of Canadian economic sanctions laws or (iv) is controlled by (including by virtue of such Person being a director or owning voting shares or interests), or acts, directly or indirectly, for or on behalf of, any Person or entity on a Terrorist List or a foreign government that  is  the  target  of  Canadian  economic  sanctions  prohibitions  such  that  the  entry  into,  or  performance under, this Agreement or any other Loan Document would be prohibited under Canadian Laws.
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ARTICLE VI - REPRESENTATIONS AND WARRANTIES
6.01 Borrower Representations and Warranties
The Borrower hereby represents and warrants to the Agent and the Lenders as follows:
(a)Status - Each Company has been duly incorporated (or amalgamated) and organized and is validly subsisting  under  the  Laws  of  its  jurisdiction  of  incorporation  and  is  up-to-date  in  respect  of  all material corporate filings.
(b)Corporate Information - Schedule 6.01(b) attached hereto contains a list of the Companies and the following  information  in  respect  of  each  Company:  prior  names  and  corporate  predecessors, governing jurisdiction and all prior governing jurisdictions, registered office and principal place of business,  all  Approved  Medical  Cannabis  Jurisdictions  and  Approved  Non-Medical  Cannabis Jurisdictions and all locations therein, the number and classes of its issued and outstanding shares, and (except in the case of the Borrower) a list of its shareholders including the number and class of shares held by each. Schedule 6.01(b) also contains a list of all Subsidiaries.
(c)Solvency – Each Company is Solvent.  
(d)No Pending Changes – No Person has any agreement or option or any right or privilege (whether by  Law,  pre-emptive  or  contractual)  capable  of  becoming  an  agreement,  including  convertible securities, warrants or convertible obligations of any nature, for the purchase of any properties or assets of any Company out of the ordinary course of business or for the purchase, subscription, allotment or issuance of any debt or equity securities of any Company.
(e)No Conflicting Agreements - Neither the execution and delivery of the Security, nor compliance with the terms, provisions and conditions of this Agreement or the Security will conflict with, result in a breach of, or constitute a default under the charter documents or by-laws of any Company or any agreement or instrument to which it is a party or is otherwise bound, and does not require the consent or approval of any Person, other than those which have been obtained.
(f)No  Conflict  with  Charter  Documents  -  There  are  no  provisions  in  the  charter  documents, constitution or by-laws of any Company of or in any unanimous shareholder agreement affecting it which restrict or limit its powers to borrow money, issue debt obligations, guarantee the payment or performance of the obligations of others, or otherwise encumber all or any of its property, now owned or subsequently acquired.
(g)Loan Documents - The Borrower has the corporate capacity, power, legal right and authority to borrow from the Lenders, perform its obligations under this Agreement and provide the Security required to be provided by it hereunder; and each Subsidiary has the corporate capacity, power, legal  right  and  authority  to  guarantee  payment  to  the  Agent  and  the  Lenders  of  the  Borrower’s Obligations and provide the Security required to be provided by it hereunder. The execution and delivery  of  the  Loan  Documents  by  the  Companies  and  the  performance  of  their  respective obligations therein have been duly authorized by all necessary corporate action. This Agreement and the other Loan Documents constitute legal, valid and binding obligations of the Companies party  thereto,  enforceable  against  them  in  accordance  with  the  terms  and  provisions  thereof, subject to Laws of general application affecting creditors’ rights (including Insolvency Legislation) and the discretion of the court in awarding equitable remedies.
(h)Conduct of Business; Material Permits - Each Company has always been and continues to be in compliance in all material respects with all Applicable Laws of each jurisdiction in which it owns assets or carries on business and has always been and continues to be duly licensed, registered and qualified to do business and in good standing in each such jurisdiction; and all such licences, registrations and qualifications are valid and subsisting and in good standing. Attached hereto as 
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Schedule 6.01(h) is a true and complete list of all Material Permits as at the Amendment Closing Date. Without limiting the generality of the foregoing:
(i)the Companies do not own assets or carry on business in any jurisdiction which is not an Approved Jurisdiction;
(ii)the Companies do not own assets or carry on any Medical Cannabis-Related Activities in any jurisdiction which is not an Approved Medical Cannabis Jurisdiction; and
(iii)the Companies do not own assets or carry on any Non-Medical Cannabis-Related Activities in any jurisdiction which is not an Approved Non-Medical Cannabis Jurisdiction;
(i)Ownership of Assets; Specific Permitted Liens - The Companies own all assets required in order to  carry  on  their  businesses  as  presently  conducted.  Each  Company  owns,  and  possesses  its assets  free  and  clear  of  any  and  all  Liens  except  for  Permitted  Liens.  No  Company  has  any commitment or obligation (contingent or otherwise) to grant any Liens except for Permitted Liens. No event has occurred which constitutes, or which with the giving of notice, lapse of time or both would  constitute,  a  material  default  under  any  Lien  which  has  been  granted  by  any  of  the Companies.  Schedule  6.01(i)  attached  hereto  contains  a  true  and  complete  list  of  all  Specific Permitted Liens as at the Amendment Closing Date.
(j)D2 Property – the Borrower is in compliance with each and every term of the D2 Lease (including, without limitation, with respect to the payment of rent) and: 
(i)is the registered and beneficial owner of the D2 Property;
(ii)has good leasehold title to the D2 Property; and
(iii)has good right, full power and absolute authority (and has obtained all consents required) to mortgage the D2 Property and convey the D2 Lease to the Agent,
in each case, free and clear of any and all Liens except for Permitted Liens.
(k)D3 Property – the Borrower is the registered and beneficial owner of the D3 Property, free and clear of any and all Liens except for Permitted Liens. 
(l)Leased Properties – No Company is a tenant under any lease of Real Property except, in the case of the Borrower only, the D2 Property.
(m)Intellectual Property - Each Company possesses or has the right to use all Intellectual Property material to the conduct of its business, each of which is in good standing in all material respects; and has the right to use such Intellectual Property without violation of any material rights of others with respect thereto. Attached hereto as Schedule 6.01(m) is a list of all such registered material Intellectual  Property  held  by  the  Companies  as  at  the  Amendment  Closing  Date,  including  a description of the nature of such rights. No Person has asserted any claim in respect of the validity of such Intellectual Property or the Companies’ rights therein, and the Borrower is not aware of any basis for the assertion of any such claims. The Borrower is not aware of any material infringement of  the  Companies’  rights  under  such  Intellectual  Property  by  other  Persons.  The  conduct  and operations of the businesses of each Company do not infringe, misappropriate, dilute or violate any Intellectual Property rights held by any other Person.
(n)Insurance - The Companies have obtained insurance which satisfies all requirements in Section 7.01(h) herein.
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(o)Material  Agreements  -  Each  Material  Agreement  to  which  any  Company  is  a  party  is  in  good standing  and  in  full  force  and  effect.  None  of  the  Companies,  or,  to  the  best  of  the  Borrower’s knowledge, any of the other parties thereto, has been or is presently in material breach of any of the terms or conditions contained in any Material Agreement. Attached hereto as Schedule 6.01(o) is a true and complete list of all Material Agreements to which the Companies are party as at the Amendment Closing Date.
(p)Labour  Agreements  -  Schedule  6.01(p)  attached  hereto  contains  a  true  and  complete  list  of  all contracts with labour unions and employee associations to which the Companies are a party as at the  Amendment  Closing  Date,  and  the  Borrower  is  not  aware  of  any  attempts  to  organize  or establish any other labour union or employee association except as previously disclosed to the Agent.
(q)Environmental Laws - Except to the extent disclosed in Schedule 6.01(q) attached hereto:
(i)each Company and its business, operations, assets, equipment, property, leaseholds and other  facilities  is  in  compliance  in  all  material  respects  with  all  Requirements  of Environmental  Law,  specifically  including  all  Requirements  of  Environmental  Law concerning the storage and handling of Hazardous Materials;
(ii)each  Company  holds  all  material  permits,  licenses,  certificates  and  approvals  from Governmental Authorities which are required in connection with air emissions, discharges to  surface  or  groundwater,  noise  emissions,  solid  or  liquid  waste  disposal,  the  use, generation,  storage,  transportation  or  disposal  of  Hazardous  Materials  and  all  other Requirements of Environmental Law;
(iii)there has been no material emission, spill, release, or discharge into or upon the air, soils (or any improvements located thereon), surface water or groundwater or the sewer, septic system  or  waste  treatment,  storage  or  disposal  system  servicing  the  premises,  of  any Hazardous Materials at or from either Property;
(iv)no  written  complaint,  order,  directive,  claim,  citation,  or  notice  from  any  Governmental Authority or any other Person has been received by any Company with respect to either Property in respect of air emissions, spills, releases, or discharges to soils or improvements located  thereon,  surface  water,  groundwater  or  the  sewer,  septic  system  or  waste treatment, storage or disposal systems servicing that Property, noise emissions, solid or liquid  waste  disposal,  the  use,  generation,  storage,  transportation,  or  disposal  of Hazardous Materials or other Requirements of Environmental Law affecting that Property;
(v)there are no legal or administrative proceedings, investigations or claims now pending, or to  the  Borrower’s  knowledge,  threatened  in  writing,  with  respect  to  the  presence  on  or under,  or  the  discharge,  emission,  spill,  radiation  or  disposal  into  or  upon  any  of  either Property, the atmosphere, or any watercourse or body of water, of any Hazardous Material; nor  are  there  any  material  matters  under  discussion  between  any  Company  and  any Governmental  Authority  relating  thereto;  and  there  is  no  factual  basis  for  any  such proceedings, investigations or claims; and
(vi)the  Companies  have  no  material  indebtedness,  obligation  or  liability,  absolute  or contingent,  matured  or  not  matured,  with  respect  to  the  storage,  treatment,  cleanup  or disposal  of  any  Hazardous  Materials,  including  any  such  indebtedness,  obligation,  or liability under any Requirements of Environmental Law regarding such storage, treatment, cleanup or disposal.
(r)Litigation - There are no actions, suits or proceedings pending, or to the knowledge of the Borrower threatened, against any Company in any court or before or by any federal, provincial, municipal or 
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other Governmental Authority except: (i) litigation disclosed in Schedule 6.01(r) attached hereto; and (ii) other litigation which if decided adversely to the Borrower would not result in a Material Adverse Change.  Schedule 6.01(r) contains a true and complete list of all litigation to which the Borrower is a party as at the Amendment Closing Date.
(s)Pension Plans - Schedule 6.01(s) attached hereto contains a true and complete list of all Pension Plans established by the Companies as at the Amendment Closing Date. The Companies are not party  to  any  Defined  Benefit  Pension  Plans.  No  steps  have  been  taken  to  terminate  any  such Pension Plan (in whole or in part), no contribution failure has occurred with respect to any such Pension Plan sufficient to give rise to a Lien under any Applicable Laws of any jurisdiction, and no condition exists and no event or transaction has occurred with respect to any such Pension Plan which might result in the incurrence by any Company of any material liability, fine or penalty. Each such Pension Plan is in compliance in all material respects with all applicable pension benefits and tax  Laws,  (i)  all  contributions  (including  employee  contributions  made  by  authorized  payroll deductions  or  other  withholdings)  required  to  be  made  to  the  appropriate  funding  agency  in accordance  with  all  Applicable  Laws  and  the  terms  of  such  Pension  Plan  have  been  made  in accordance  with  all  Applicable  Laws  and  the  terms  of  such  Pension  Plan,  (ii)  to  the  extent applicable, all liabilities under such Pension Plan are funded, on a going concern and solvency basis, in accordance with the terms of the respective Pension Plans, the requirements of applicable pension benefits laws and of applicable regulatory authorities and the most recent actuarial report filed with respect to the Pension Plan, and (iii) no event has occurred and no conditions exist with respect to any such Pension Plan that has resulted or could reasonably be expected to result in such Pension Plan having its registration revoked or refused for the purposes of any applicable pension  benefits  or  tax  Laws  or  being  placed  under  the  administration  of  any  relevant  pension benefits regulatory authority or being required to pay any Taxes or penalties under any applicable pension benefits or tax Laws.
(t)Financial  Statements  –  The  most  recent  Year-end  Financial  Statements  and  Interim  Financial Statements  of  the  Borrower  delivered  to  the  Agent  and  the  Lenders  have  been  prepared  in accordance with GAAP (except in the case of the Interim Financial Statements, subject to normal adjustments and the absence of footnotes) on a basis which is consistent with the previous fiscal period, and present fairly:
(i)the assets and liabilities (whether accrued, absolute, contingent or otherwise) and financial condition of the Borrower on a consolidated basis as at the dates therein specified;
(ii)the sales, earnings and results of operations of the Borrower on a consolidated basis during the periods covered thereby; and
(iii)in the case of the Year-end Financial Statements, the changes in financial position of the Borrower on a consolidated basis;
and the Companies have no material liabilities (whether accrued, absolute, contingent or otherwise) except as disclosed therein and liabilities incurred in the ordinary course of business which do not directly or indirectly pertain to financing activities; and since the dates of the said Year-end Financial Statements and Interim Financial Statements, as the case may be, no material liabilities have been incurred  by  the  Companies  except  in  the  ordinary  course  of  business  and  no  Material  Adverse Change has occurred.
(u)Financial and Other Information - All financial and other information provided by or in respect of the Companies to the Agent and the Lenders was true, correct and complete in all material respects when provided. No information, exhibit, or report furnished by the Companies to the Agent or the Lenders contains any material misstatement of fact or omits to state a material fact or any fact necessary to make the statement contained therein not materially misleading in the circumstances in which it was made.
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(v)No Guarantees – No Guarantees have been granted by any Company except for (i) Guarantees which  comprise  part  of  the  Security;  and  (ii)  Guarantees  in  respect  of  Permitted  Funded  Debt incurred by any other Company.
(w)Tax Returns – Each Company has duly and timely filed all tax returns required to be filed by it, and has paid all Taxes which are due and payable by it except for Taxes being contested in good faith and in respect of which reserves have been established in accordance with GAAP. Each Company has also paid all other Taxes, charges, penalties and interest due and payable under or in respect of all assessments and re-assessments of which it has received written notice except for Taxes being contested in good faith and in respect of which reserves have been established in accordance with GAAP. There are no actions, suits, proceedings, investigations or claims pending, or to the knowledge  of  the  Borrower  threatened  in  writing,  against  any  Company  in  respect  of  Taxes, governmental  charges  or  assessments  except  for  any  such  actions,  suits,  proceedings, investigations or claims which are being contested in good faith and in respect of which reserves have been established in accordance with GAAP. 
(x)Statutory Liens - Each Company has remitted on a timely basis all amounts required to have been withheld and remitted (including withholdings from employee wages and salaries relating to income tax, employment insurance and Canada Pension Plan contributions), goods and services tax and all other amounts which if not paid when due could result in the creation of a Statutory Lien against any of its property, except for Permitted Liens.
(y)Sanctions, etc. – Each Company and each of its Affiliates, and each of their respective directors, officers, employees and agents (i) is not a Sanctioned Person; and (ii) is not located, organized or resident in a country or territory that is or whose government is a Sanctioned Entity, and (iii) does not own or control any assets located in a country or territory that is or whose government is a Sanctioned  Entity  except  for  products  sold  to  customers  in  any  such  country  or  territory  in  the ordinary course of business in compliance with applicable Sanctions laws.  Each Company and each of its Affiliates does not knowingly derive any revenues from investments in, or transactions with Sanctioned Persons or Sanctioned Entities, except in compliance with applicable Sanctions laws.  No proceeds of any Advance will be used to fund any operations in, finance any investments or activities in, or make any payments to, a Sanctioned Person or a Sanctioned Entity, except in compliance with applicable Sanctions laws.
(z)No Default, etc. - No Default, Event of Default or Material Adverse Change has occurred and is continuing.
(aa)Transactions with Related Persons – The Companies are not party to any contract, commitment or transaction  (including  by  way  of  loan)  with  any  Related  Person,  except  (i)  for  the  Material Agreements listed in Schedule 6.01(o), (ii) the Shareholder Loans or (iii) on terms that are fair and reasonable  and  no  less  favourable  to  it  than  it  would  obtain  in  any  comparable  arm’s  length transaction with a Person that is not a Related Person.
(bb)Full Disclosure - There are no facts known to the Borrower which could reasonably be expected to materially  adversely  affect  the  Companies’  ability  to  observe  and  perform  their  respective obligations under the Loan Documents.
6.02 Survival of Representations and Warranties
The  Borrower  acknowledges  that  the  Agent  and  the  Lenders  shall  rely  upon  the  representations  and warranties contained in this Article in connection with the establishment and continuation of the Facilities and also in connection with the entering into by any Lender of any Hedge Transaction with the Borrower. Notwithstanding  any  investigations  which  may  be  made  by  the  Agent  or  the  Lenders,  the  said representations and warranties shall survive the execution and delivery of this Agreement until full and final payment and satisfaction of the Obligations.
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ARTICLE VII - COVENANTS
7.01 Borrower Positive Covenants
The Borrower hereby covenants and agrees with the Agent and the Lenders that it will, and will cause each of its Subsidiaries to:
(a)Prompt Payment - in the case of the Borrower, pay all principal, interest and other amounts due hereunder at the times and in the manner specified herein;
(b)Preservation of Corporate Existence, Material Permits, etc. – maintain its corporate existence in good standing, continue to carry on its business, preserve its rights, powers, licences, privileges, franchises and goodwill, including all Material Permits in all applicable jurisdictions, maintain all qualifications to carry on business in each applicable jurisdiction, and conduct its business in a proper and efficient manner so as to protect its property and income, in each case, in all material respects;
(c)Compliance  with  Laws  -  comply  in  all  material  respects  with  all  Applicable  Laws  (specifically including,  for  greater  certainty,  all  applicable  Requirements  of  Environmental  Law)  and  use  the proceeds  of  all  Advances  hereunder  for  legal  and  proper  purposes;  and  without  limiting  the generality of the foregoing the Borrower shall and shall cause each other Company to:
(i)manage and operate its business in all material respects in accordance with all Applicable Laws;
(ii)engage  in  Medical  Cannabis-Related  Activities  only  in  Approved  Medical  Cannabis Jurisdictions, and in accordance with all Applicable Laws therein;
(iii)engage  in  Non-Medical  Cannabis-Related  Activities  only  in  Approved  Non-Medical Cannabis Jurisdictions, and in accordance with all Applicable Laws therein;
(iv)ensure that all activities of the Companies relating to the sale of Cannabis and Cannabis-related products occur solely in facilities licensed by Governmental Authorities in Approved Jurisdictions;
(d)Payment  of  Taxes,  etc.  -  pay  when  due  all  rents,  Taxes,  rates,  levies,  assessments  and governmental charges, fees and dues lawfully levied, assessed or imposed in respect of its property which are material to the conduct of its business, and deliver to the Agent upon request receipts evidencing such payments; except for rents, Taxes, rates, levies, assessments and governmental charges, fees or dues in respect of which an appeal or review proceeding has been commenced, a stay of execution pending such appeal or review proceeding has been obtained or reserves have been established in accordance with GAAP; and the amounts in question do not in the aggregate materially detract from the ability of the Companies to carry on their businesses and to perform and satisfy all of their respective obligations hereunder;
(e)Maintain Records - maintain adequate books, accounts and records in accordance with GAAP;
(f)Maintenance of Assets - keep its property and assets (except obsolete assets) in good repair and working condition;
(g)Inspection - permit the Agent and its employees and agents to enter upon and inspect its properties, assets, books and records from time to time during normal business hours upon reasonable prior notice and in a manner which does not materially interfere with its business, and make copies of and abstracts from such books and records and discuss its affairs, finances and accounts with any 
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of its officers, directors, accountants and auditors, and execute and deliver all consents and further assurances  as  may  be  necessary  or  desirable  in  order  for  the  Agent  and  its  agents  to  obtain information from Governmental Authorities and other third parties with respect to environmental matters;
(h)Insurance  -  obtain  and  maintain,  from  insurance  companies  acceptable  to  the  Agent  and  the Lenders,  liability  insurance,  all-risks  property  insurance  on  a  replacement  cost  basis  (less  a reasonable deductible not to exceed amounts customary in the industry for similar businesses and properties), property insurance in respect of the D2 Project and D3 Project, business interruption insurance, product recall and liability insurance coverage, and insurance in respect of such other risks as are customary in the industry for similar businesses and properties (and having regard to the availability of insurance coverage in the market); all of which policies of insurance shall be in such amounts as are customary in the industry for similar businesses and properties, provided that the liability insurance coverage shall be in an amount not less than $10,000,000; and the Borrower shall cause the interest of the Agent to be noted on property insurance policies as first mortgagee and  loss  payee  (which  policies  shall  include  the  standard  mortgage  clause  approved  by  the Insurance Bureau of Canada (or an equivalent clause in other applicable jurisdictions)) and as an additional insured under liability insurance policies; and the Borrower shall provide the Agent with certificates of insurance and certified copies of such policies from time to time upon request;
(i)Perform Obligations - fulfil all covenants and obligations required to be performed by it under those Loan Documents to which it is a party;
(j)Notice of Certain Events - provide written notice to the Agent of each of the following promptly after the occurrence thereof:
(i)any Default, Event of Default or Material Adverse Change; 
(ii)a material default by any Company under any agreement relating to Funded Debt;
(iii)receipt by any Company of notice of the termination or suspension of, or a material default under, any Material Agreement or Material Permit;
(iv)all amendments to Material Permits;
(v)all  material  correspondence  and  notices  received  from  any  Governmental  Authority  or stock exchange with respect to any Material Permit or any regulatory or other investigations into the Companies’ business practices;
(vi)any changes in the identity of Responsible Persons, together with satisfactory evidence of security clearances for such Responsible Persons under the Cannabis Act or the Cannabis Regulations; and any rejection notice for new or renewal security clearance applications for each Responsible Person;
(vii)the results of any facility audit by any Governmental Authority to the extent such results are  material  and  negative;  and  (ii)  any  warning  document,  letter  or  notice  from  any Governmental Authority that would have a material and negative impact on any Material Permit, together with the Company’s action plan with respect thereto;
(viii)the issuance of any management letter to the Borrower by its auditor; 
(ix)the  incorrectness  of  any  representation  or  warranty  contained  herein  in  any  material respect; and
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(x)any litigation affecting any Company which, if determined adversely, would reasonably be expected to result in a Material Adverse Change;
(k)Bank  Accounts  and  Service  Agreements  –  maintain  all  of  its  bank  accounts  and  Service Agreements with BMO and its Affiliates;
(l)Use of Advances – utilize the proceeds of all Advances for the Companies’ own business purposes; and not permit such proceeds to be used, directly or indirectly, by any other Person or for any other purpose;
(m)Environmental Information - if requested by the Agent from time to time upon the instructions of the Required  Lenders:  (i)  provide  the  Agent  with  an  environmental  questionnaire  in  the  Agent’s standard form completed by a knowledgeable officer of the Borrower in respect of any Property; and  (ii)  if  the  information  contained  therein  is  inconsistent  in  any  material  respect  with  the representations in Section 6.01(q) herein, provide the Agent with a phase I environmental report in respect of such Property (and if recommended in such phase I report, a phase II environmental report),  and  promptly  take  all  such  action  as  may  be  required  to  comply  with  all  reasonable recommendations contained in such report(s); 
(n)Discharge Liens - if any builders lien is registered against title to a Property or if notice of a builders lien  is  given  to  the  Agent  or  any  Lender,  or  if  any  other  Lien  which  is  not  a  Permitted  Lien  is registered against title to a Property, cause such builders lien or other Lien to be discharged or vacated from title and released not later than ten (10) Business Days after the registration thereof (or the date the Agent or any Lender received notice thereof, if applicable); but for greater certainty the Lenders shall have no obligation to make an Advance under any Facility if a builders lien is registered against title to a Property or if the Agent or any Lender has received notice of a builders lien in respect of a Property; and
(o)Further Assurances - provide the Agent with such further information, financial data, documentation and other assurances as the Agent or the Lenders may reasonably require from time to time.
7.02 Borrower Negative Covenants
The Borrower hereby covenants and agrees with the Agent and the Lenders that it will not, and will ensure that  each  of  its  Subsidiaries  does  not,  without  the  prior  written  consent  of  the  Agent  on  behalf  of  the Required Lenders (or if required pursuant to Section 11.01, all Lenders acting unanimously), which consent may be withheld in their sole discretion unless otherwise expressly provided herein:
(a)Funded Debt - create, incur or assume any Funded Debt, except Permitted Funded Debt;
(b)Guarantees - become obligated under Guarantees, except: (i) Guarantees which comprise part of the  Security;  and  (ii)  Guarantees  in  respect  of  Permitted  Funded  Debt  incurred  by  any  other Company;
(c)Liens - grant or suffer to exist any Lien in respect of any of its property, except Permitted Liens;
(d)Disposition of Assets - directly or indirectly sell, transfer, assign, lease or otherwise dispose of any of its assets (including Intellectual Property), except that:
(i)each Company may sell inventory in the ordinary course of business;
(ii)each  Company  may  sell  or  transfer  assets  to  any  other  Company,  provided  that  the transferee has provided all Security required to be provided by it hereunder and no Default, 
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Event of Default or Material Adverse Change has occurred and is continuing or would exist immediately thereafter; and
(iii)each  Company  may  sell  or  otherwise  dispose  of  other  assets  from  time  to  time  in  the ordinary course of business (but for greater certainty a sale and leaseback transaction shall not be considered to be in the ordinary course of business), provided that the fair market value of the assets which are the subject of each such disposition (in one or a series of related transactions) does not exceed one million Canadian Dollars (CDN$1,000,000) and no Default, Event of Default or Material Adverse Change has occurred and is continuing or would exist immediately thereafter; and for greater certainty the Borrower shall be required to  make  a  Repayment  in  connection  with  each  such  disposition  to  the  extent  required pursuant to Section 3.05(d);
(e)Investments  -  make  or  acquire  any  Investments,  except  that  the  following  Investments  may  be made  or  acquired  if  both  immediately  before  and  immediately  after  each  such  Investment  no Default, Event of Default or Material Adverse Change has occurred and is continuing: 
(i)Investments by any Company in any Company, provided that such Company has provided all Security required to be provided by it hereunder;
(ii)Investments in direct obligations of the Government of Canada with maturities of one (1) year or less from the date of acquisition of the Investment, provided that if required by the Required  Lenders,  the  Company  making  such  Investment  shall  provide  such  additional items  of  Security  as  the  Agent  may  require  in  order  that  such  investments  shall  be specifically pledged to the Agent;
(iii)Investments in certificates of deposit having maturities of less than one (1) year, issued by BMO; and
(iv)other Investments not in excess of the aggregate amount of one million Canadian Dollars (CDN$1,000,000);
(f)Certain  Activities  and  Investments  –  directly  or  indirectly  do  any  of  the  following,  in  each  case except for Permitted Contingent Investments:
(i)engage  or  participate  in  any  Medical  Cannabis-Related  Activities,  or  make  or  hold  an Investment in any Person which engages or participates in any Medical Cannabis-Related Activities, in any jurisdiction other an Approved Medical Cannabis Jurisdiction;
(ii)engage or participate in any Non-Medical Cannabis-Related Activities, or make or hold an Investment in any Person which engages or participates in any Non-Medical Cannabis-Related  Activities,  in  any  jurisdiction  other  an  Approved  Non-Medical  Cannabis Jurisdiction; or
(iii)own assets or carry on business in any jurisdiction which is not an Approved Jurisdiction;
(g)Distributions - make any Distribution except as follows:
(i)each Company may make Distributions to a Company, provided that the Agent holds a First-Ranking Security Interest in all property and assets of the Company receiving such Distribution;
(ii)the Borrower may make interest payments on the Shareholder Loans provided that both before and immediately after each such payment the Borrower is in compliance with all 
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financial covenants in Section 7.03 herein and no Default or Event of Default has occurred and is continuing;
(iii)the Borrower may make principal repayments on the Shareholder Loans provided that both before and immediately after each such payment (A) the Borrower is in compliance with all financial covenants in Section 7.03 herein and no Default or Event of Default has occurred and is continuing; and (B) the aggregate principal amount of the Shareholder Loans is not less than thirteen million Canadian Dollars (CDN$13,000,000); and
(iv)the Borrower may make Distributions (including for greater certainty principal payments on the  Shareholder  Loans)  provided  that  both  before  and  immediately  after  each  such Distribution the Borrower is in compliance with all financial covenants in Section 7.03 herein and no Default or Event of Default has occurred and is continuing;
(h)Certain Payments - make any payment in respect of principal, interest, fees or any other amounts in respect of Subordinated Debt, except payments of interest and principal on (i) the Shareholder Loans to the extent such payments are permitted pursuant to Section 7.02(g) herein, and (ii) the BDC Participation Loan;
(i)Corporate Changes – materially change its capital structure or the nature of its business, or enter into  any  transaction  whereby all  or a substantial  portion  of its  property,  assets  and  undertaking would  become  the  property  of  any  other  Person  (other  than  a  Company),  whether  by  way  of reconstruction,  reorganization,  recapitalization,  consolidation,  amalgamation,  merger,  transfer, sale or otherwise;
(j)Material Agreements – agree or consent to any material amendment or termination of any Material Agreement;
(k)Defined Benefit Pension Plans – establish, assume or otherwise become a party to or liable under any Defined Benefit Pension Plan;
(l)New Subsidiaries – create or acquire any Subsidiary unless (i) all of the issued and outstanding shares in the capital of such Subsidiary are owned directly or indirectly by the Borrower; (ii) such new Subsidiary provides a Guarantee in respect of the Obligations and all Security required to be provided by it hereunder; and (iii) all of the issued and outstanding shares of such new Subsidiary are pledged to the Agent, and in each case accompanied by legal opinions as contemplated herein;
(m)Fiscal Year - change its Fiscal Year;
(n)Auditors - change its auditors to a firm that is not a nationally recognized auditing firm;
(o)Dealing with Related Persons - enter into any contract, carry out any transaction or otherwise have any  dealings  with  Related  Persons  except  (i)  pursuant  to  and  in  accordance  with  the  Material Agreements listed in Schedule 6.01(o) or (ii) on terms that are fair and reasonable and no less favourable to it than it would obtain in any comparable arm’s length transaction with a Person that is not a Related Person; or
(p)Use of Advances - use the proceeds of any Advance for any purposes other than those expressly contemplated in this Agreement; and without limiting the generality of the foregoing, the proceeds of  any  Advance  will  not  be  used,  directly  or  indirectly,  to  lend,  contribute  or  otherwise  make available  such  proceeds  to  any  Subsidiary,  joint  venture  partner  or  other  Person,  to  fund  any operations  in,  finance  any  investments,  business  or  activities  in,  or  make  any  payments  to,  a Sanctioned Person or a Sanctioned Entity if such funding, financing or paying would result in a violation of Sanctions by any Person (including any Person participating in such Advance, whether as underwriter, advisor, investor or otherwise), or in any other manner that would result in a violation 
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of Sanctions by any Person. The Agent and the Lenders in their sole and unfettered discretion may refuse to make any Advance or delay, block or refuse to process any transaction which they believe may result in a contravention of the foregoing covenant.
7.03 Financial Covenants
(a)The Fixed Charge Coverage Ratio shall not be less than 1.50:1 at any time.
(b)The Senior Funded Debt to EBITDA Ratio shall not exceed 3.00:1 at any time.
(c)Liquidity Coverage shall be not be less than three million Canadian Dollars (CDN$3,000,000) at any time.
(d)The Total Funded Debt to EBITDA Ratio shall not exceed 4:00:1 at any time.
7.04 Reporting Requirements 
The Borrower agrees to deliver, or cause to be delivered (by email in accordance with Section 13.08), the following financial and other information to the Agent at the times indicated below:
(a)a Borrowing Base Certificate as at the end of each month, certified by the President, Chief Financial Officer or other senior officer of the Borrower acceptable to the Agent, by no later than thirty (30) days after the end of such month, which shall include:
(i)an  aged  summary  of  accounts  receivable  of  the  Companies  including  the  following information: country of domicile; intercompany accounts; doubtful accounts; accounts in dispute; contra accounts; holdbacks, and any deposits received from each account debtor which remain outstanding at the report date; 
(ii)an aged summary of accounts payable of the Companies; and
(iii)a summary of all amounts which comprise the Potential Statutory Priority Amount; 
(b)quarterly, within forty-five (45) days after the end of each Fiscal Quarter other than the last Fiscal Quarter in each Fiscal Year, the Interim Financial Statements of the Borrower in respect of such Fiscal Quarter, together with a Compliance Certificate in respect of such Fiscal Quarter certified by the President, Chief Financial Officer or other senior officer of the Borrower acceptable to the Agent, confirming financial covenant levels for that Fiscal Quarter and that:
(i)the  representations  and  warranties  in  Section  6.01  are  true  and  correct  in  all  material respects as at the date of such Compliance Certificate; and
(ii)no Default, Event of Default or Material Adverse Change has occurred and is continuing;
(c)annually, within ninety (90) days after the end of each Fiscal Year:
(i)the  Year-end  Financial  Statements  of  the  Borrower  in  respect  of  such  Fiscal  Year, accompanied by a copy of the Borrower’s auditor’s letter to management; together with a Compliance Certificate and Excess Cash Flow Certificate in respect of such Fiscal Year certified by the President, Chief Financial Officer or other senior officer of the Borrower acceptable to the Agent, confirming financial covenant levels for that Fiscal Year and that:
(A) the representations and warranties in Section 6.01 are true and correct in all material 
respects as at the date of such Compliance Certificate; and 
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(B) no  Default,  Event  of  Default  or  Material  Adverse  Change  has  occurred  and  is 
continuing; 
(ii)unless the same have been publicly filed prior to that date in accordance with applicable securities laws, the audited year-end financial statements of each Guarantor;
(iii)the unaudited, accountant-prepared year-end financial statements of each Subsidiary of the Borrower;
(d)annually, not later than ninety (90) days after the commencement of each Fiscal Year:
(i)the annual business plan of the Borrower for such Fiscal Year presented on a quarterly basis, including projections in respect of profit and loss, balance sheet, cash flow, Capital Expenditures  and  financial  covenant  calculations,  including  disclosure  of  all  material assumptions utilized; and
(ii)evidence  that  all  municipal  and  business  taxes  and  assessments  in  respect  of  each Property are paid in full; 
(e)promptly on receipt by or awareness of a Company of the same, details (including copies) of any management letters, default notices, litigation or other events or circumstances, which, individually or in the aggregate may have a material impact on the business, operations or financial condition of any Company or the ability of the Borrower to comply with and perform its obligations under the Loan Documents; and
(f)such additional information and documents as the Agent (upon the instructions of the Required Lenders) may reasonably require from time to time.
ARTICLE VIII - SECURITY
8.01 Security to be Provided by the Companies
The  Borrower  agrees  to  provide  (or  cause  the  Subsidiaries  to  provide)  the  security  listed  below  as continuing  security  for  the  payment  of  the  Obligations,  specifically  including  for  greater  certainty  all obligations  of  the  Borrower  to  the  respective  Lenders  pursuant  to  or  arising  in  connection  with  Hedge Transactions and all other obligations of the Borrower arising under or in respect of this Agreement and the other Loan Documents:
(a)unlimited Guarantees in respect of the Obligations from all present and future Subsidiaries of the Borrower;
(b)general security agreements creating a First-Ranking Security Interest in respect of all present and future  property,  assets  and  undertaking  of  the  Companies  (for  greater  certainty,  specifically including  all  shares  and  other  equity  interests  held  by  each  Company  in  any  other  Company, provided that the certificates evidencing such shares and other equity interests shall not be required to be delivered to the Agent unless and until requested in writing by the Agent upon the instructions of the Required Lenders);
(c)a  first-ranking  all-indebtedness  mortgage  from  the  Borrower  in  the  principal  amount  of  seventy million Canadian Dollars (CDN$70,000,000), which shall include a general assignment of rents, over the D3 Property;
(d)a first-ranking all-indebtedness mortgage of leasehold interest from the Borrower in the principal amount  of  seventy  million  Canadian  Dollars  (CDN$70,000,000),  which  shall  include  a  general assignment of rents, over the D2 Property;
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(e)the Agent’s standard form of environmental questionnaire and indemnity agreement in respect of each Property (to be provided with the Borrower and the Guarantors on a joint and several basis);
(f)to  the  extent  requested  by  the  Agent  upon  the  instructions  of  the  Required  Lenders  acting reasonably, security agreements creating a specific assignment and First-Ranking Security Interest in all or any of the Material Agreements, together with acknowledgements and consents from the other  parties  thereto;  provided  however  that  if  the  assignment  of  any  Material  Agreement  as security  requires  the  consent  of  the  other  contracting  party  thereto,  the  Borrower  shall  use reasonable  commercial  efforts  to  obtain  such  consent  but  if  such  consent  is  not  provided  the assignment of such Material Agreement as security shall not be required;
(g)to  the  extent  requested  by  the  Agent  upon  the  instructions  of  the  Required  Lenders  acting reasonably, security agreements creating a specific assignment and First-Ranking Security Interest in  all  or  any  of  the  Material  Permits  to  the  extent  a  security  interest  may  be  obtained  therein, together with acknowledgements and consents from the issuers thereof to the extent available;
(h)to  the  extent  requested  by  the  Agent  upon  the  instructions  of  the  Required  Lenders  acting reasonably,  security  agreements  creating  an  assignment  and  First-Ranking  Security  Interest  in respect  of  Intellectual  Property  of  the  Companies  which  the  Required  Lenders  consider  to  be material,  together  with  any  necessary  consents  from  other  Persons  which  may  be  required  in connection with the granting of said assignments and security interests;
(i)to  the  extent  requested  by  the  Agent  upon  the  instructions  of  the  Required  Lenders  acting reasonably, assignments of bank accounts maintained by the Companies with financial institutions other than BMO, including deposit account control agreements in favour of the Agent;
(j)assignments  all  policies  of  insurance  in  respect  of  the  Companies  (which  requirement  shall  be satisfied if the Agent’s interest as first mortgagee and loss payee is recorded on such policies); and
(k)such other security and further assurances as the Agent may reasonably require from time to time.
8.02 Security to be Provided by Others
The Borrower agrees to obtain and provide to the Agent the following (and it shall constitute an Event of Default if any item of listed below is not provided to the Agent):
(a)an unlimited Guarantee in respect of the Obligations from Village plus interest thereon after demand at the Prime Rate plus two percent (2.00%) per annum; 
(b)a  subordination,  postponement, assignment  and  standstill agreement  from each  Shareholder  in respect of all present and future indebtedness of the Borrower to such Shareholder, which shall provide  that  payments  of  principal,  interest,  fees  and  other  amounts  in  respect  of  such indebtedness shall not be made except to the extent expressly permitted under this Agreement; 
(c)a subordination, postponement and standstill agreement from each holder of indebtedness which is intended to constitute Subordinated Debt other than Deeply Subordinated Debt; 
(d)Landlord  Agreements  with  respect  to  the  D2  Property  and  any  other  material  leased  properties identified to the Borrower by the Agent; and
(e)such other security and further assurances as the Agent may reasonably require from time to time.
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8.03 General Provisions re Security; Registration
The Security shall be in form and substance satisfactory to the Agent and the Required Lenders in their sole discretion.  The Security shall be held by the Agent for the benefit of the Lenders. The Agent may require that any item of Security be governed by the Laws of the jurisdiction where the property subject to such  item  of  Security  is  located.  The  Security  shall  be  registered  by  the  Borrower  where  necessary  or desirable  to  record  and  perfect  the  charges  contained  therein,  as  determined  by  the  Agent  in  its  sole discretion, specifically including registrations in the Canadian Intellectual Property Office and, to the extent required by the Agent upon the instructions of the Required Lenders, fixture filings in respect of any personal property  of  the  Companies  affixed  to  Real  Property.    All  share  certificates  evidencing  issued  and outstanding shares in the capital of each Company (other than the Borrower) shall be delivered to the Agent together with a stock transfer power of attorney executed in blank.
8.04 Opinions re Security
The Borrower shall cause to be delivered to the Agent the opinions of the solicitors for the Companies regarding their corporate status, the due authorization, execution and delivery of the Security provided by them, all registrations in respect of the Security, the results of all corporate, personal property security and other customary searches in respect of the Companies, title to the Property and the results of all customary off-title enquiries relating thereto (such results to be satisfactory to the Agent and the Lenders) and the enforceability of such Security; all such opinions to be in form and substance satisfactory to the Agent and its counsel.  In lieu of title opinions, the Borrower may at its option arrange for title insurance in respect of all of either or both Properties, the form and substance of which shall be satisfactory to the Agent and the Lenders.
8.05 After-Acquired Property, Further Assurances
The Borrower shall execute and deliver from time to time, and cause each other Company to execute and deliver from time to time, all such further documents and assurances as may be reasonably required by the Agent from time to time, not inconsistent with the terms of this Agreement, in order to provide the Security contemplated  hereunder,  specifically  including:  supplemental  or  additional  security  agreements, assignments and pledge agreements which shall include lists of specific assets to be subject to the security interests required hereunder. 
8.06 Security for Hedge Transactions
If a Lender continues to be a party to one or more Hedge Transactions with the Borrower after all other indebtedness and obligations of the Borrower to such Lender hereunder have been repaid and satisfied in full (or assigned by such Lender to an assignee), for greater certainty such Lender shall continue to be a Lender  for  all  purposes  of  this  Agreement  and  the  obligations  under  such  Hedge  Transactions  shall continue  to  be  secured  by  the  Security  as  provided  herein,  but  such  Lender  shall  not  thereafter  be  a “Required Lender” as such term is defined herein.
8.07 Agent May Obtain Insurance
If the Borrower does not provide the Agent with evidence of continuing insurance coverage which satisfies the  requirements  of  this  Agreement,  the  Agent  may,  but  shall  have  no  obligation  to,  purchase  such insurance in order to protect the interests of the Agent and the Lenders in the Collateral. Such insurance may  also,  but  need  not,  protect  the  Companies’  interests  in  the  Collateral.  The  Borrower  agrees  to immediately reimburse the Agent upon demand for all costs and expenses incurred by the Agent in respect of  the  purchase  of  any  such  insurance,  and  until  so  paid  such  expenses  shall  constitute  part  of  the Obligations, shall bear interest as provided in Section 10.09 and shall be secured by the Security.
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8.08 Insurance Proceeds
If  insurance  proceeds  become  payable  in  respect  of  loss  of  or  damage  to  any  property  owned  by  a Company:
(a)if an Event of Default has occurred and is continuing at such time, such proceeds shall be applied against the Obligations; and
(b)if no Event of Default has occurred and is continuing at such time, the Lenders shall consent to the payment of such proceeds to such Company if:
(i)such property has been repaired or replaced within one hundred eighty (180) days after the event giving rise to the proceeds and the proceeds will reimburse the Company for payments it has made for such purpose; or
(ii)the Company confirms in writing to the Agent that it will forthwith use such proceeds to repair or replace such property.
8.09 Acknowledgment re: Stated Principal Amount of Mortgages
The Borrower acknowledges and agrees that the mortgages referred to in Sections 8.01(c) and (d) (the “Mortgages”) are intended to secure all of the present and future debts and liabilities of the Borrower to the Lenders, to the maximum principal amount of seventy million Canadian Dollars (CDN$70,000,000).  The Borrower further acknowledges and agrees that the Mortgages are to be registered at such principal amount in preparation for future use only, and that notwithstanding the principal amount shown on the face of the Mortgages, the Lenders are not committed to advance and have no obligation to advance more than the currently authorized amounts set forth opposite their respective names in Exhibit “A”, and otherwise subject to the terms and conditions set out in this Agreement.
ARTICLE IX - CONDITIONS PRECEDENT
9.01 Conditions Precedent to Amendments
The amendments to the Existing Credit Agreement reflected in this Agreement shall not become effective unless and until the following conditions have been satisfied, in each case to the satisfaction of the Agent and the Lenders in their sole discretion:
(a)all conditions precedent in Section 9.02 shall have been satisfied;
(b)the Lenders shall have completed and shall be satisfied with their due diligence in respect of the Companies; and without limiting the generality of the foregoing the Lenders shall have received and be satisfied with:
(i)an internally-prepared balance sheet of the Borrower;
(ii)financial  projections  in  respect  of  the  Borrower  on  a  consolidated  basis  for  the  current Fiscal Year and the immediately following three (3) Fiscal Years;
(iii)a Compliance Certificate in respect of the most recently completed Fiscal Quarter;
(iv)a Borrowing Base Certificate in respect of the most recently completed month;
(v)the Borrower’s proposed financial, operating and quality management systems, including evidence  that  such  systems  will  satisfy  all  applicable  requirements  of  Governmental Authorities;
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(vi)the terms and conditions of all Material Agreements;
(vii)the terms and conditions of all Material Permits;
(viii)certified  true  copies  of  each  Company’s  licences  issued  by  Governmental  Authorities, together  with  copies  of  all  material  correspondence  received  from  Governmental Authorities relating thereto, including any communication with regard to non-compliance items;
(ix)evidence  that  the  Companies  maintain  insurance  as  required  herein,  together  with  a satisfactory report of an insurance consultant retained by the Agent (at the expense of the Borrower) with respect to the terms and conditions of all insurance policies;
(x)evidence of property insurance, liability insurance and workers’ compensation insurance in respect of the Properties each in an amount satisfactory to the Required Lenders acting reasonably, together with a satisfactory report regarding such insurance from an insurance consultant satisfactory to the Required Lenders;
(xi)satisfactory evidence that there are no arrears of property tax with respect to any Property;
(c)the  Shareholders  shall  have  invested  not  less  than  thirteen  million  Canadian  Dollars (CDN$13,000,000) in the Borrower in the form of Subordinated Debt;
(d)the Shareholders (or any one of them) shall have invested not less than sixteen million Canadian Dollars (CDN$16,000,000) in the Borrower in the form of equity;
(e)the Agent and the Lenders shall have conducted and be satisfied with a site visit of each Property, if desired;
(f)no  litigation  is  pending  or  threatened  in  writing  against  one  or  more  of  the  Companies  that,  if decided adversely, could constitute a Material Adverse Change;
(g)all Security required to be provided prior to the Amendment Closing Date shall have been executed and  delivered,  all  registrations  necessary  or  desirable  in  connection  therewith  shall  have  been made,  and  all  legal  opinions  and  other  documentation  required  by  the  Lenders  in  connection therewith shall have been executed and delivered, all in form and substance satisfactory to the Agent and the Lenders;
(h)the Companies shall have no Funded Debt except Permitted Funded Debt;
(i)the Agent shall have received satisfactory evidence that there are no Liens affecting any of the Companies or their assets except Permitted Liens; and the Agent shall have received particulars of  all  Permitted  Liens,  specifically  including  the  assets  encumbered  thereby,  the  amounts  due thereunder, and if requested by the Agent, confirmation from the holders thereof that the terms thereof are being complied with;
(j)any necessary governmental, regulatory and third party approvals necessary in connection with this Agreement and the transactions contemplated therein shall have been given unconditionally and without containing any onerous terms;
(k)the Agent shall have received an officer’s certificate and certified copies of resolutions of the board of directors of each Company concerning the due authorization, execution and delivery of the Loan Documents  to  which  it  is  a  party,  and  such  related  matters  as  the  Agent  and  the  Lenders  may reasonably require;
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(l)the Agent shall have received a certificate of status, certificate of compliance or similar certificate for each Company issued by its governing jurisdiction and each other jurisdiction in which it carries on business or holds any material assets;
(m)the  Agent  and  the  Lenders  shall  have  received  opinions  from  the  solicitors  for  each  Company regarding its corporate status, the due authorization, execution, delivery and enforceability of the Loan  Documents  provided  by  it,  and  such  other  matters  as  the  Agent  and  the  Lenders  may reasonably require, in form and substance satisfactory to the Agent and the Lenders;
(n)the Borrower shall have confirmed in writing that the Companies do not own assets or carry on business in any jurisdiction other than Canada;
(o)the  Companies  shall  have  satisfied  all  requirements  of  the  Agent  and  the  Lenders  under  AML Legislation;
(p)the Borrower shall have paid to the Agent, or made arrangements satisfactory to the Agent for the payment  of,  all  fees  and  expenses  (including  the  Agent’s  legal  expenses)  relating  to  the establishment  and  continuation  of  the  Facilities,  specifically  including  all  underwriting  fees, arrangement fees and similar fees as agreed in writing between the Borrower and the Agent; and
(q)the  Agent  and  the  Lenders  shall  have  received  such  additional  evidence,  documents  or undertakings as they may require to complete the transactions contemplated hereby in accordance with the terms and conditions contained herein.
9.02 Conditions Precedent to all Advances
The Lenders shall have no obligation to make the first Advance or any subsequent Advance under any Facility unless at the time of each such Advance all of the following conditions have been satisfied, in each case to the satisfaction of the Agent and the Lenders:
(a)the representations and warranties in Section 6.01 shall be true and correct in all material respects as if made on the date of such Advance;
(b)all additional Security required to be provided at the time of such Advance shall have been executed and delivered and all registrations necessary or desirable in connection therewith shall have been made, and any other documentation required by the Agent shall have been executed and delivered, all in form and substance satisfactory to the Agent;
(c)the  Borrower  shall  have  given  a  Draw  Request  to  the  Agent  in  accordance  with  the  notice requirements provided herein;
(d)in respect of an Advance under Facility A the Borrower shall have provided a satisfactory Borrowing Base Certificate in respect of the most recent month;
(e)no Default, Event of Default or Material Adverse Change shall have occurred and be continuing, nor  shall  the  making  of  the  Advance  result  in  the  occurrence  of  a  Default,  Event  of  Default  or Material Adverse Change; 
(f)no third party demand or garnishment order for payment to any Governmental Authority shall have been received by the Agent or any Lender with respect to any Company; 
(g)no  builders  lien  or  other  Lien  (except  Permitted  Liens)  has  been  registered  against  title  to  any Property  and  remains  registered,  as  confirmed  by  a  Land  Title  Office  search  conducted  by  the Agent’s  solicitor  in  respect  of  each  Property;  and  neither  the  Agent  nor  any  Lender  shall  have 
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received notice of any builders lien or other Lien (except Permitted Liens) which may affect any Property, whether or not registered against title to a Property; and
(h)the Agent shall have received a satisfactory report from its solicitors following a Land Title Office search of title to each Property immediately prior to any Advance confirming the D3 Property and the D2 Property as being duly registered in the name of the Borrower and encumbered only by the Security  in  favour  of  the  Agent  and  those  other  encumbrances  which  have  been  previously approved in writing by the Lenders.
ARTICLE X - DEFAULT AND REMEDIES
10.01Events of Default
The occurrence of any one or more of the following events, after the expiry of any applicable cure period set out below, shall constitute an event of default under this Agreement (an “Event of Default”):
(a)the Borrower or any other Credit Party fails to pay any amount payable under this Agreement or any other Loan Document when due;
(b)any representation or warranty provided by a Credit Party to the Agent or the Lenders herein or in any  other  Loan  Document  was  incorrect  in  any  material  respects  on  the  date  on  which  such representation or warranty was made;
(c)the Borrower fails to perform or comply with any of the covenants in Section 7.03;
(d)any Credit Party fails to perform or comply with any of its covenants or obligations contained in this Agreement, the Security or any other agreement made between it and any Lenders (other than those in paragraphs (a), (b), and (c) above) after receipt of notice of such non-compliance from the Agent; provided that if such non-compliance is capable of remedy within thirty (30) days and such Credit Party diligently attempts to remedy such non-compliance and informs the Agent of its efforts in this regard, and such non-compliance is remedied within such period, then such non-compliance shall be deemed not to constitute an Event of Default;
(e)any Credit Party is in default in the payment or performance of any of its indebtedness or obligations under  any  agreement  relating  to  Funded  Debt  with  a  principal  amount  outstanding  equal  to  or greater than $500,000 (other than the Outstanding Principal Amount) after the expiry of any grace or cure periods relating thereto;
(f)an Insolvency Event occurs in respect of any Credit Party;
(g)any Company is in default under any Material Agreement (after the expiry of any grace or cure periods relating thereto), or agrees to the surrender or termination of any Material Agreement prior to  the  expiry  date  expressly  set  out  therein,  in  either  case  unless  such  Material  Agreement  is immediately replaced by a substantially similar Material Agreement containing terms satisfactory to the Lenders;
(h)any Company is in default under any Material Permit (after the expiry of any grace or cure periods relating thereto), or agrees to the surrender or termination of any Material Permit prior to the expiry date expressly set out therein, in either case unless such Material Permit is immediately replaced by a substantially similar Material Permit containing terms satisfactory to the Lenders;
(i)any Loan Document shall for any reason (other than the fault of the Agent or any Lender) cease to be in full force and effect or shall be declared in a final judgment of a court of competent jurisdiction to be null and void; or any Credit Party contests the validity or enforceability thereof or denies it has any further liability or obligation thereunder; or any document (other than a Guarantee) constituting 
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part of the Security shall for any reason fail to create a valid and perfected First-Ranking Security Interest in and to the property purported to be subject thereto;
(j)any Person which has provided a Guarantee in respect of the Obligations terminates or purports to terminate  its  liability  under  such  Guarantee  or  its  liability  thereunder  in  respect  of  any  future Advances, or disputes the validity or enforceability of such Guarantee or any Security provided by it;
(k)any Person takes possession of any property of a Credit Party with a value in excess of five hundred thousand  Canadian  Dollars  (CDN$500,000)  by  way  of  or  in  contemplation  of  enforcement  of security,  or  a  distress  or  execution  or  similar  process  is  levied  or  enforced  against  any  such property, and such possession continues in effect and is not released, satisfied, vacated, stayed, or discharged within ten (10) days or such longer period during which entitlement to the use of such property continues with the applicable Credit Party, and such Credit Party is contesting the same in good faith and by appropriate proceedings, provided that such grace period will cease to apply if the property is removed from the use of the Credit Party;
(l)one or more final judgments or decrees for the payment of money shall have been obtained or entered  against  any  Credit  Party  in  excess  of  five  hundred  thousand  Canadian  Dollars (CDN$500,000) in the aggregate and shall remain unpaid for a period in excess of thirty (30) days; unless such judgement is fully covered by insurance (subject to a reasonable deductible amount) and the insurer thereof has confirmed such coverage in writing;
(m)any Governmental Authority shall take any action to condemn, seize or appropriate any property of any Credit Party with a value in excess of five hundred thousand Canadian Dollars (CDN$500,000) unless  such  Governmental  Authority  has  paid  a  fair  and  reasonable  expropriation  amount;  and such expropriation or seizure continues in effect and is not terminated or stayed or within ten (10) days or such longer period during which entitlement to the use of such property continues with the applicable  Credit  Party,  and  such  Credit  Party  is  contesting  the  same  in  good  faith  and  by appropriate  proceedings,  provided  that  such  grace  period  will  cease  to  apply  if  the  property  is removed from the use of the Credit Party;
(n)any Person or group of Persons acting in concert, other than Village, has Control of any Company at any time;
(o)without the prior written consent of the Agent, acting on the instructions of the Lenders:
(i)any Person or group of Persons acting in concert which is not a Shareholder as at the Amendment Closing Date acquires a shareholding of twenty per cent. (20%) or more in the Borrower; or
(ii)the shareholding of any Shareholder in the Borrower, as a proportion of all of the issued shares of the Borrower, increases or decreases by twenty per cent. (20%) or more, as a result of acquisitions or dispositions of shares by that Shareholder;
(p)the  Borrower’s  auditors  include  any  going-concern  or  other  adverse  qualification  in  their  audit opinion relating to the Borrower’s Year-end Financial Statements;
(q)the Cannabis Act is repealed and not replaced with legislation to the effect that Canada continues to be a Non-Medical Cannabis Jurisdiction; 
 
(r)a Shareholder fails to:
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(i)manage and operate its business in all material respects in accordance with all Applicable Laws;
(ii)engage  in  Medical  Cannabis-Related  Activities  only  in  Approved  Medical  Cannabis Jurisdictions, and in accordance with all Applicable Laws therein;
(iii)engage  in  Non-Medical  Cannabis-Related  Activities  only  in  Approved  Non-Medical Cannabis Jurisdictions, and in accordance with all Applicable Laws therein;
(iv)ensure that all activities of such Shareholder relating to the sale of Cannabis and Cannabis-related products occur solely in facilities licensed by Governmental Authorities in Approved Jurisdictions;
(s)a Shareholder:
(i)engages or participates in any Medical Cannabis-Related Activities, or makes or holds an Investment (other than a Permitted Contingent Investment) in any Person which engages or  participates  in  any  Medical  Cannabis-Related  Activities,  in  any  jurisdiction  other  an Approved Medical Cannabis Jurisdiction;
(ii)engages or participates in any Non-Medical Cannabis-Related Activities, or makes or holds an  Investment  (other  than  a  Permitted  Contingent  Investment)  in  any  Person  which engages or participates in any Non-Medical Cannabis-Related Activities, in any jurisdiction other an Approved Non-Medical Cannabis Jurisdiction; or
(iii)owns assets or carries on business in any jurisdiction which is not an Approved Jurisdiction; or
(t)a Material Adverse Change occurs and is continuing.
10.02Acceleration, etc.
(a)Upon  the  occurrence  of  an  Event  of  Default  which  is  continuing  the  Agent  shall,  upon  the instructions  of  the  Required  Lenders,  issue  a  written  notice  to  the  Borrower  (an  “Acceleration Notice”) declaring all of the Obligations to be immediately due and payable.
(b)Upon  receipt  of  an  Acceleration  Notice  the  Borrower  shall  immediately  pay  and  satisfy  the Obligations, including payment to the Agent of the following amounts (without duplication): (i) the Outstanding Principal Amount and all accrued and unpaid interest, fees and other amounts relating thereto; (ii) the Aggregate Net Hedge Liability; (iii) an amount equal to the face or principal amount of all CDOR Loans then outstanding; and (iv) the maximum amount payable under all outstanding Letters of Credit. The Agent shall hold all such amounts paid by the Borrower in respect of such Hedge Transactions, CDOR Loans and Letters of Credit as security for the Borrower’s obligations thereunder.
(c)At  any  time  on  or  after  the  Acceleration  Date  the  Agent  may  exercise  any  and  all  rights  and remedies hereunder and under any other Loan Documents, including the enforcement of all or any portion of the Security.
(d)From and after the date of the occurrence of an Event of Default and for so long as such Event of Default continues, both before and after the Acceleration Date, the Outstanding Principal Amount shall bear interest or fees at the rates otherwise applicable plus two percent (2%) per annum in order to compensate the Lenders for the additional risk.
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10.03Acceleration of Certain Contingent Obligations  
Upon the occurrence of an Event of Default which is continuing, any Lender which has issued a CDOR Loan or Letter of Credit or entered into a Hedge Transaction with the Borrower may make a Prime-Based Loan to the Borrower in an amount equal to the face or principal amount of such CDOR Loan or Letter of Credit,  or  the  amount  required  to  unwind  such  Hedge  Transaction  (such  amount  to  be  determined  in accordance with the terms thereof), as the case may be; and the proceeds of any such Prime-Based Loan shall be held by such Lender and used to satisfy the Lender’s obligations under the said CDOR Loan or Letter of Credit as such becomes due, or to effect the unwinding of such Hedge Transaction.  Any such Prime-Based Loan shall bear interest at the rate and in the manner applicable to Prime-Based Loans under the Facilities.
10.04Combining Accounts, Set-Off 
Upon the occurrence and during the continuation of an Event of Default, in addition to and not in limitation of any rights now or hereafter granted under Applicable Law, each Lender may at any time and from time to time: 
(a)combine, consolidate or merge any or all of the deposits or other accounts maintained with such Lender  by  a  Company  (whether  term,  notice,  demand  or  otherwise  and  whether  matured  or unmatured) and such Company’s obligations to such Lender hereunder; and 
(b)set off, apply or transfer any or all sums standing to the credit of any such deposits or accounts in or towards the satisfaction of such obligations.
Each Lender may exercise any rights pursuant to this Section 10.04 without prior notice to the Borrower or such Company, but agrees to provide written notice to the Agent and the Borrower promptly after exercising any such rights.
10.05Appropriation of Monies 
After the occurrence and during the continuation of an Event of Default the Agent may from time to time, but  subject  to  Section  11.03,  apply  any  Proceeds  of  Realization  against  any  portion  or  portions  of  the Obligations, and the Borrower may not require any different application.  The taking of a judgment or any other action or dealing whatsoever by the Agent or the Lenders in respect of the Security shall not operate as a merger of any of the Obligations hereunder or in any way affect or prejudice the rights, remedies and powers which the Agent or the Lenders may have, and the foreclosure, surrender, cancellation or any other dealing with any Security or the said obligations shall not release or affect the liability of the Borrower or any other Person in respect of the remaining portion of the Obligations.
10.06No Further Advances
The Lenders shall not be obliged to make any further Advances (including honouring any cheques drawn by the Borrower which are presented for payment) from and after the earliest to occur of the following: (i) delivery by the Agent to the Borrower of a written notice that a Default or Event of Default has occurred and is  continuing  and  that  as  a  result  thereof  no  further  Advances  will  be  made  (regardless  of  whether  an Acceleration Notice is issued); (ii) the occurrence of an Insolvency Event; and (iii) receipt by the Agent or any Lender of any garnishment notice, notice of a Statutory Lien or other notice of similar effect in respect of any Company pursuant to the Income Tax Act (Canada), the Excise Tax Act (Canada) or any similar notice under any other statute in effect in any jurisdiction.
10.07Judgment Currency 
If for the purposes of obtaining judgment against the Borrower in any court in any jurisdiction with respect to this Agreement it becomes necessary for a Lender to convert into the currency of such jurisdiction (in 
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this Section called the “Judgment Currency”) any amount due to the Lender by the Borrower hereunder in any currency other than the Judgment Currency, the conversion shall be made at the Exchange Rate prevailing on the Business Day before the day on which judgment is given.  In the event that there is a change in the Exchange Rate prevailing between the Business Day before the day on which the judgment is given and the date of payment of the amount due, the Borrower will, on the date of payment, pay such additional  amounts  (if  any)  or  be  entitled  to  receive  reimbursement  of  such  amount,  if  any,  as  may  be necessary to ensure that the amount paid on such date is the amount in the Judgment Currency which when converted at the Exchange Rate prevailing on the date of payment is the amount then due under this Agreement in such other currency.  Any additional amount due by the Borrower under this Section will be due as a separate debt and shall not be affected by judgment being obtained for any other sums due under or in respect of this Agreement.  
10.08Remedies Cumulative
All rights and remedies granted to the Agent and the Lenders in this Agreement, and any other documents or instruments in existence between the parties or contemplated hereby, and any other rights and remedies available to the Agent and the Lenders at Law or in equity, shall be cumulative.  The exercise or failure to exercise any of the said remedies shall not constitute a waiver or release thereof or of any other right or remedy, and shall be non-exclusive.
10.09Performance of Covenants by Agent
If the Borrower fails to perform any covenant or obligation to be performed by it pursuant to this Agreement, the Agent may in its sole discretion perform any of the said obligations but shall be under no obligation to do so; and any amounts expended or advanced by the Agent for such purpose shall be payable by the Borrower upon demand together with interest at the highest rate then applicable to the Facilities.
ARTICLE XI - THE AGENT AND THE LENDERS
11.01Decision-Making
(a)Any amendment to this Agreement relating to the following matters, and the granting of any waiver or consent by the Lenders in respect of such matters, shall require the unanimous agreement of the Lenders:
(i)changes to the interest rates and fees;
(ii)increases in the maximum amount of credit available;
(iii)extensions of the Maturity Date;
(iv)changes to the scheduled dates or the scheduled amounts for Repayments hereunder;
(v)the establishment of any Availment Option in U.S. Dollars or any other currency which is not a Qualified Currency;
(vi)releases of all or any portion of the Security, except to the extent provided in paragraph (c) below;
(vii)the definitions of “Required Lenders” and “Proportionate Share” in Section 1.01;
(viii)any provision of this Agreement which expressly states that the unanimous consent of the Lenders is required in connection with any action to be taken or consent to be provided by the Lenders; and
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(ix)this Section 11.01.
(b)Except for the matters described in paragraph (a) above, any amendment to this Agreement shall be effective if made among the Borrower, the Agent and the Required Lenders, and for greater certainty  any  such  amendment  which  is  agreed  to  by  the  Required  Lenders  shall  be  final  and binding upon all Lenders.
(c)The Agent may from time to time without notice to or the consent of the Lenders execute and deliver partial releases of the Security in respect of any item of Collateral (whether or not the proceeds of sale thereof are received by the Agent) which the Companies are permitted to dispose of pursuant to this Agreement without obtaining the prior written consent of the Lenders; and in releasing any such security the Agent may rely upon and assume the correctness of all information contained in any  certificate  or  document  provided  by  the  Borrower,  without  further  enquiry.  Otherwise,  any release  or  discharge  in  respect  of  the  Security  or  any  portion  thereof  shall  require  the  written consent of the Lenders acting unanimously.
(d)Except  for  the  matters  which  require  the  unanimous  consent  of  the  Lenders  as  set  out  in  the foregoing paragraphs of this Section 11.01, and except as otherwise specifically provided in this Agreement,  any  action  to  be  taken  or  decision  to  be  made  by  the  Lenders  pursuant  to  this Agreement (specifically including for greater certainty the issuance of written notice to the Borrower of the occurrence of a Default or Event of Default, the issuance of a demand for payment of the Obligations, a decision to make an Advance despite any condition precedent relating thereto not being satisfied, the provision of any waiver in respect of a breach of any covenant or the granting of any consent) shall be effective if approved by the Required Lenders; and any such decision or action shall be final and binding upon all the Lenders.
(e)Any action to be taken or decision to be made by the Lenders pursuant to this Agreement which is required to be unanimous shall be made at a meeting of the Lenders called by the Agent pursuant to Section 11.06(l) or by a written instrument executed by all of the Lenders. Any action to be taken or decision to be made by the Lenders pursuant to this Agreement which is required to be made by the Required Lenders shall be made at a meeting of the Lenders called by the Agent pursuant to  Section  11.06(l)  or  by  a  written  instrument  executed  by  the  Required  Lenders.  Any  such instrument may be executed by facsimile or portable document format (.pdf) and in counterparts.
11.02Security
(a)Except to the extent provided in paragraph (b), the Security shall be granted in favour of and held by the Agent for and on behalf of the Lenders in accordance with the provisions of this Agreement. The Agent shall, in accordance with its usual practices in effect from time to time, take all steps required  to  perfect  and  maintain  the  Security,  including:  taking  possession  of  the  certificates representing the securities required to be pledged hereunder; filing renewals and change notices in respect of such Security; and ensuring that the name of the Agent is noted as loss payee or mortgagee on all property insurance policies covering the Collateral. If the Agent becomes aware of any matter concerning the Security which it considers to be material, it shall promptly inform the Lenders.  The Agent shall comply with all instructions provided by the Lenders in connection with the enforcement or release of the Security which it holds.  The Agent agrees to permit each Lender to review and make photocopies of the original documents comprising the Security from time to time upon reasonable notice.
(b)If any Company has provided security in favour of any Lender directly, such Lender agrees to pay to the Agent all amounts received by it in connection with the enforcement of such security, and all such amounts shall be deemed to constitute Proceeds of Realization and shall be dealt with as provided  in  Section  11.03.  Each  Lender  which  holds  any  such  Security  agrees  that  it  shall  not enforce such security unless and until the Required Lenders have made a determination to enforce the Security pursuant to Section 11.01(d).
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11.03Application of Proceeds of Realization
Notwithstanding any other provision of this Agreement, the Proceeds of Realization of the Security or any portion thereof shall be distributed in the following order:
(a)first, in payment of all costs and expenses incurred by the Agent and the Lenders in connection with such realization, including legal, accounting and receivers’ fees and disbursements;
(b)second, against the remaining Obligations (except those referred to in paragraph (c) below), on a pari passu basis among the Lenders to whom such Obligations are payable;
(c)third, to pay any Obligations owed to Non-Funding Lenders, on a pari passu basis among the Non-Funding Lenders to whom such Obligations are payable; and
(d)fourth, if all obligations of the Borrower listed above have been paid and satisfied in full, any surplus Proceeds of Realization shall be paid in accordance with Applicable Law.
11.04Payments by Agent
(a)The following provisions shall apply to all payments made by the Agent to the Lenders hereunder:
(i)the  Agent  shall  be  under  no  obligation  to  make  any  payment  (whether  in  respect  of principal,  interest,  fees  or  otherwise)  to  any  Lender  until  an  amount  in  respect  of  such payment has been received by the Agent from the Borrower;
(ii)if the Agent receives a payment of principal, interest, fees or other amount owing by the Borrower  which  is  less  than  the  full  amount  of  any  such  payment  due,  the  Agent  shall distribute such amount received among the Lenders in each Lender’s Proportionate Share;
(iii)if any Lender has advanced more or less than its Proportionate Share of its Commitment, such Lender’s entitlement to such payment shall be increased or reduced, as the case may be, in proportion to the amount actually advanced by such Lender;
(iv)if a Lender’s Proportionate Share of an Advance has been advanced for less than the full period to which any payment by the Borrower relates, such Lender’s entitlement to receive a portion of any payment of interest or fees shall be reduced in proportion to the length of time  such  Lender’s  Proportionate  Share  has  actually  been  outstanding  (unless  such Lender has paid all interest required to have been paid by it to the Agent pursuant to the CBA Model Provisions);
(v)the Agent acting reasonably and in good faith shall, after consultation with the Lenders in the case of any dispute, determine in all cases the amount of all payments to which each Lender is entitled and such determination shall be deemed to be prima facie correct;
(vi)upon  request,  the  Agent  shall  deliver  a  statement  detailing  any  of  the  payments  to  the Lenders referred to herein;
(vii)all  payments  by  the  Agent  to  a  Lender  hereunder  shall  be  made  to  such  Lender  at  its address set out herein unless notice to the contrary is received by the Agent from such Lender; and
(viii)if the Agent has received a payment from the Borrower on a Business Day (not later than the time required for the receipt of such payment as set out in this Agreement) and fails to remit  such  payment  to  any  Lender  entitled  to  receive  its  Proportionate  Share  of  such payment on such Business Day, the Agent agrees to pay interest on such late payment at 
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a rate determined by the Agent in accordance with prevailing banking industry practice on interbank compensation.
(b)The Agent may in its sole discretion from time to time make adjustments in respect of any Lender’s share of an Advance, Substitution, Rollover or Repayment in order that the Advances made by such  Lender  under  such  Facility  shall  be  approximately  in  accordance  with  such  Lender’s Proportionate Share.
11.05Protection of Agent
(a)Unless the Agent has actual knowledge or actual notice to the contrary, it may assume that each Lender’s address set out in Exhibit “A” attached hereto is correct, unless and until it has received from such Lender a notice designating a different address.
(b)The Agent may engage and pay for the advice or services of any lawyers, accountants or other experts whose advice or services may to it seem necessary, expedient or desirable and rely upon any advice so obtained (and to the extent that such costs are not recovered from the Borrower pursuant  to  this  Agreement,  each  Lender  agrees  to  reimburse  the  Agent  in  such  Lender’s Proportionate Share of such costs).
(c)Unless the Agent has actual knowledge or actual notice to the contrary, it may rely as to matters of fact  which  might  reasonably  be  expected  to  be  within  the  knowledge  of  any  Company  upon  a statement contained in any Loan Document.
(d)Unless  the  Agent  has  actual  knowledge  or  actual  notice  to  the  contrary,  it  may  rely  upon  any communication or document believed by it to be genuine.
(e)The  Agent  may  refrain  from  exercising  any  right,  power  or  discretion  vested  in  it  under  this Agreement unless and until instructed by the Required Lenders as to whether or not such right, power or discretion is to be exercised and, if it is to be exercised, as to the manner in which it should be exercised (provided that such instructions shall be required to be provided by all of the Lenders in respect of any matter for which the unanimous consent of the Lenders is required as set out herein).
(f)The Agent may refrain from exercising any right, power or discretion vested in it which would or might in its sole and unfettered opinion be contrary to any Law of any jurisdiction or any directive or otherwise render it liable to any Person, and may do anything which is in its opinion in its sole discretion necessary to comply with any such Law or directive.
(g)The Agent may delegate any of its duties and responsibilities hereunder to any other Person as it shall determine to be appropriate.
(h)The Agent may refrain from acting in accordance with any instructions of the Required Lenders to begin any legal action or proceeding arising out of or in connection with this Agreement or take any steps to enforce or realize upon any Security, until it shall have received such security as it may reasonably require (whether by way of payment in advance or otherwise) against all costs, claims, expenses (including legal fees) and liabilities which it will or may expend or incur in complying with such instructions.
(i)The Agent shall not be bound to disclose to any Person any information relating to the Companies or any Related Person if such disclosure would or might in its opinion in its sole discretion constitute a breach of any Law or regulation or be otherwise actionable at the suit of any Person.
(j)The  Agent  shall  not  accept  any  responsibility  for  the  accuracy  and/or  completeness  of  any information supplied in connection herewith or for the legality, validity, effectiveness, adequacy or 
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enforceability of any Loan Document and shall not be under any liability to any Lender as a result of taking or omitting to take any action in relation to any Loan Document except in the case of the Agent’s negligence or wilful misconduct.
11.06Duties of Agent
The Agent shall:
(a)as a non-fiduciary agent for the Borrower, maintain a record of the Outstanding Principal Amount owing to each Lender, which record shall conclusively be presumed to be correct and accurate, absent manifest error;
(b)hold and maintain the Security to the extent provided in Section 11.02;
(c)provide to each Lender copies of all financial information received from the Borrower promptly after receipt  thereof,  and  copies  of  any  Draw  Requests,  Substitution  Notices,  Rollover  Notices, Repayment Notices and other notices received by the Agent from the Borrower upon request by any Lender;
(d)promptly advise each Lender of Advances required to be made by it hereunder and disburse all Repayments to the Lenders hereunder in accordance with the terms of this Agreement;
(e)promptly notify each Lender of the occurrence of any Default or Event of Default of which the Agent has actual knowledge or actual notice;
(f)at the time of engaging any agent, receiver, receiver-manager, consultant, monitor or other party in connection with the Security or the enforcement thereof, obtain the agreement of such party to comply with the applicable terms of this Agreement in carrying out any such enforcement activities and dealing with any Proceeds of Realization;
(g)account for any monies received by it in connection with this Agreement, the Security and any other agreement delivered in connection herewith or therewith;
(h)each time the Borrower requests the written consent of the Lenders (or the Required Lenders, as the case may be) in connection with any matter, use its best efforts to obtain and communicate to the Borrower the response of the Lenders (or the Required Lenders) in a reasonably prompt and timely manner having due regard to the nature and circumstances of the request;
(i)give  written  notice  to  the  Borrower  in  respect  of  any  other  matter  in  respect  of  which  notice  is required in accordance with or pursuant to this Agreement, promptly or promptly after receiving the consent of the Lenders, if required under the terms of this Agreement;
(j)except as otherwise provided in this Agreement, act in accordance with any instructions given to it by the Required Lenders;
(k)refrain  from  exercising  any  right,  power  or  discretion  vested  in  it  under  this  Agreement  or  any document incidental thereto if so instructed by the Required Lenders (in respect of any matter which requires the consent of the Required Lenders), or by all of the Lenders (in respect of any matter which requires the unanimous consent of the Lenders); and
(l)call a meeting of the Lenders at any time not earlier than five (5) days and not later than thirty (30) days after receipt of a written request for a meeting provided by any Lender.
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11.07Lenders’ Obligations Several; No Partnership
The obligations of each Lender under this Agreement are several.  The failure of any Lender to carry out its obligations hereunder shall not relieve the other Lenders of any of their respective obligations hereunder. No Lender shall be responsible for the obligations of any other Lender hereunder. Neither the entering into of this Agreement nor the completion of any transactions contemplated herein shall constitute the Lenders a partnership.
11.08Sharing of Information
The Agent and the Lenders may share among themselves any information they may have from time to time concerning the Companies whether or not such information is confidential; but shall have no obligation to do  so  (except  for  any  obligations  of  the  Agent  to  provide  information  to  the  extent  required  in  this Agreement).
11.09Acknowledgement by Borrower
The Borrower hereby acknowledges notice of the terms of the provisions of this Article XI - and agrees to be bound hereby to the extent of its obligations hereunder.
11.10Amendments to Article XI
The Agent and the Lenders may amend any provision in this Article XI, except Section 11.01, without prior notice to or the consent of the Borrower, and the Agent shall provide a copy of any such amendment to the Borrower  reasonably  promptly  thereafter;  provided  however  if  any  such  amendment  would  materially adversely affect any rights, entitlements, obligations or liabilities of the Borrower, such amendment shall not be effective until the Borrower provides its written consent thereto, such consent not to be unreasonably withheld or arbitrarily delayed.
11.11Deliveries, etc.
As between the Companies on the one hand, and the Agent and the Lenders on the other hand:
(a)all statements, certificates, consents and other documents which the Agent purports to deliver to a Company  on  behalf  of  the  Lenders  shall  be  binding  on  each  of  the  Lenders,  and  none  of  the Companies shall be required to ascertain or confirm the authority of the Agent in delivering such documents;
(b)all certificates, statements, notices and other documents which are delivered by a Company to the Agent in accordance with this Agreement shall be deemed to have been duly delivered to each of the Lenders; and
(c)all payments which are delivered by the Borrower to the Agent in accordance with this Agreement shall be deemed to have been duly delivered to each of the Lenders.
11.12Agency Fee
(a)The Borrower agrees to pay to the Agent an annual agency fee in such amount as may be agreed in writing from time to time between the Borrower and the Agent, payable in advance on the date of  this  Agreement  and  annually  on  each  anniversary  date  thereafter  during  the  term  of  this Agreement.
(b)Each  Lender  which  assigns  all  or  any  portion  of  its  Commitment  hereunder  to  another  Person agrees to pay to the Agent an assignment fee of five thousand Canadian Dollars (CDN$5,000).
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11.13Non-Funding Lender
(a)Each Non-Funding Lender shall be required to provide to the Agent, immediately upon receipt of a written request from the Agent, cash in an amount, as shall be determined from time to time by the Agent in its discretion, equal to all other obligations of such Non-Funding Lender to the Agent that are owing or may become owing pursuant to this Agreement, including such Non-Funding Lender’s obligation to pay its Proportionate Share of any indemnification or expense reimbursement amounts not paid by the Borrower. Such cash shall be held by the Agent in one or more accounts in the name of the Agent and shall not be required to be interest-bearing. The Agent shall be entitled to apply such cash from time to time in satisfaction of all or any portion of such obligations of such Non-Funding Lender, as determined by the Agent in its discretion.
(b)The  Agent  shall  be  entitled  to  set  off  any  Non-Funding  Lender’s  Proportionate  Share  of  all payments  received  from  the  Borrower  against  such  Non-Funding  Lender’s  obligations  to  fund payments and Advances required to be made by it and to purchase participations required to be purchased by it in each case under this Agreement and the other Loan Documents. The Agent shall be entitled to withhold and deposit in one or more non-interest bearing accounts in the name of the Agent all amounts (whether principal, interest, fees or otherwise) received by the Agent from the Borrower and due to such Non-Funding Lender pursuant to this Agreement, which amounts shall be used by the Agent (A) first, to reimburse the Agent for any amounts owing to it by such Non-Funding  Lender  pursuant  to  this  Agreement  or  any  other  Loan  Document,  (B)  second,  to reimburse the other Lenders in respect of any Advances which may have been made by them in their discretion in order to fund, in whole or in part, any shortfall in Advances which were required to have been made by such Non-Funding Lender (and to the extent that any said Advance made by  a Lender is so  reimbursed,  such  Advance  shall  be deemed to  have  been  assigned by  such Lender to the Non-Funding Lender), (C) third, to be held in such account and applied by the Agent from  time  to  time  against  all  other  obligations  of  such  Non-Funding  Lender  to  the  Agent  owing pursuant to this Agreement in such amount as shall be determined from time to time by the Agent in its discretion including such Non-Funding Lender’s obligation to pay its Proportionate Share of any indemnification or expense reimbursement amounts not paid by the Borrower, and (D) fourth, at the Agent’s discretion, to fund from time to time such Non-Funding Lender’s Proportionate Share of Advances.
(c)A Non-Funding Lender shall have no voting or consent rights with respect to matters under this Agreement or the other Loan Documents, unless and until it is no longer a Non-Funding Lender. Accordingly, the Commitments and the portion of the Outstanding Principal Amount owing to any Non-Funding Lender shall be disregarded in the determination of the Required Lenders.
(d)Neither the Agent nor any of its Affiliates nor any of their respective officers, directors, employees, agents or representatives shall be liable to any Lender (including a Non-Funding Lender) for any action taken or omitted to be taken by them in connection with amounts payable by the Borrower to a Non-Funding Lender and received by the Agent and applied in accordance with the provisions of  this  Agreement,  save  and  except  for  the  negligence  or  wilful  misconduct  of  the  Agent  as determined by a final non-appealable judgment of a court of competent jurisdiction.
11.14Erroneous Payments
(a)Unless  the  Agent  shall  have  received  notice  from  the  Borrower  prior  to  the  date  on  which  any payment is due to the Agent for the account of the Lenders or the Issuing Bank hereunder that the Borrower  will  not  make  such  payment,  the  Agent  may  assume  that  Borrower  has  made  such payment on such date in accordance herewith and may (but shall not be required to) in reliance upon such assumption, distribute to the applicable Lenders or the Issuing Bank, as the case may be, the amount due.  With respect to any payment that Agent makes to any Lender or the Issuing Bank as to which the Agent determines (in its sole and absolute discretion) that any of the following applies (such payment referred to as the “Rescindable Amount”): 
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(i)the Borrower has not in fact made the corresponding payment to the Agent; 
(ii)the Agent has made a payment in excess of the amount(s) received by it from Borrower either individually or in the aggregate (whether or not then owed); or 
(iii)the Agent has for any reason otherwise erroneously made such payment, 
then each Lender and the Issuing Bank severally agrees to repay to the Agent forthwith on demand the Rescindable Amount so distributed to such party, in immediately available funds with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Agent, at the rate determined by the Agent in accordance with banking industry rules on interbank compensation.
(b)By virtue of a Lender’s execution of this Agreement or an assignment agreement pursuant to this Agreement, as the case may be, any Affiliate of such Lender with whom Borrower or any Company has entered into a Services Agreement shall be deemed a Lender party hereto for purposes of any reference in a Loan Document to the parties for whom the Agent is acting, it being understood and agreed that the rights and benefits of such Affiliate under the Loan Documents consist exclusively of such Affiliate’s right to share in payments and collections out of the Proceeds of Realization as more fully set forth in this Agreement.  Without limiting the generality of the foregoing, (i) each such Lender Affiliate shall, for the avoidance of doubt, be deemed to have agreed to the provisions of this Agreement and (ii) no such Lender Affiliate shall have any right to notice of any action or to consent to, direct or object to any action hereunder or under any other Loan Document or otherwise in respect of the Security (including the release or impairment of any Security).  Notwithstanding any other provision of this Section 11.14 to the contrary, the Agent shall not be required to verify the payment of, or that other satisfactory arrangements have been made with respect to Services Agreements unless the Agent has received written notice of such Services Agreements, together with  such  supporting  documentation  as  the  Agent  may  request,  from  the  applicable  Lender  or Lender Affiliate.
(c)Notwithstanding anything to the contrary in this Agreement, if at any time Agent determines (in its sole and absolute discretion) that it has made a payment hereunder in error to any Lender or the Issuing Bank, whether or not in respect of an Obligation due and owing by a Credit Party at such time, where such payment is a Rescindable Amount, then in any such event, each such person receiving a Rescindable Amount severally agrees to repay to the Agent forthwith on demand the Rescindable Amount received by such person in immediately available funds in the currency so received, with interest thereon, for each day from and including the date such Rescindable Amount is received by it to but excluding the date of payment to the Agent, at the rate determined by the Agent in accordance with banking industry rules on interbank compensation.  Each Lender and the Issuing Bank irrevocably waives any and all defenses, including any “discharge for value” (under which a creditor might otherwise claim a right to retain funds mistakenly paid by a third party in respect of a debt owed by another), “good consideration”, “change of position” or similar defenses (whether at law or in equity) to its obligation to return any Rescindable Amount.  The Agent shall inform  each  Lender  or  Issuing  Bank  that  received  a  Rescindable  Amount  promptly  upon determining that any payment made to such person comprised, in whole or in part, a Rescindable Amount.  Each person’s obligations, agreements and waivers under this Section 11.14 shall survive the  resignation  or  replacement  of  the  Agent,  any  transfer  of  rights  or  obligations  by,  or  the replacement of, a Lender, the termination of the Commitments and/or the repayment, satisfaction or discharge of all the Obligations (or any portion thereof) under any Loan Document.
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ARTICLE XII - CBA MODEL PROVISIONS
12.01CBA Model Provisions Incorporated by Reference
The CBA Model Provisions (except for the footnotes contained therein) form part of this Agreement and are incorporated herein by reference, subject to the following variations:
(a)Each term set out below which is used as a defined term in the CBA Model Provisions shall be deemed to have been replaced as set out below; and for greater certainty the said replacement term shall have the meaning ascribed thereto in Section 1.01 of this Agreement:
“Administrative Agent” shall be replaced by “Agent”;
“Applicable Percentage” shall be replaced by “Proportionate Share”;
“Loans” shall be replaced by “Advances”;
“Obligors” shall be replaced by “Companies” (and all necessary changes required by the context shall be deemed to have been made); and
“Provisions” shall be replaced by “CBA Model Provisions”.
(b)“Pro rata share”, “rateably” and similar terms in the CBA Model Provisions shall have the meaning ascribed  to  the  term  “Proportionate  Share”  as  defined  in  Section  1.01  of  this  Agreement,  if  the context requires.
(c)The terms “Related Parties” and “Related Party” in the CBA Model Provisions shall be deemed to have the meanings ascribed to the defined terms “Related Persons” and “Related Person” in this Agreement, respectively.  
(d)In the third line of subsection 7.7(1) of the CBA Model Provisions, the phrase “…in consultation with the Borrower…” is hereby amended to read “…upon notice to the Borrower…”.
(e)The parties hereby acknowledge and agree that the indemnity contained in clause 9(b)(iii) of the CBA Model Provisions is in addition to and not in substitution for the indemnity contained in Section 13.05 of this Agreement.
(f)In addition to the restrictions contained in paragraph 10(b) of the CBA Model Provisions relating to the  ability  of  Lenders  to  assign  their  Commitments  in  whole  or  in  part,  if  a  Lender  proposes  to assign less than its entire Commitment, it may do so only if it retains a Commitment in a principal amount of at least five million Canadian Dollars (CDN$5,000,000).
12.02Inconsistencies with CBA Model Provisions
To the extent that there is any inconsistency between a provision of this Agreement and a provision of the CBA Model Provisions, the provision of this Agreement shall govern. For greater certainty, a provision of this Agreement and a provision of the CBA Model Provisions shall be considered to be inconsistent if both relate to the same subject-matter and the provision in the CBA Model Provisions imposes more onerous obligations or restrictions than the corresponding provision in this Agreement.
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ARTICLE XIII - GENERAL
13.01Waiver
The failure or delay by the Agent or any Lender in exercising any right or privilege with respect to the non-compliance with any provisions of this Agreement by the Borrower and any course of action on the part of the Agent or any Lender, shall not operate as a waiver of any rights of the Agent or such Lender unless made in writing by the Agent or such Lender.  Any such waiver shall be effective only in the specific instance and for the purpose for which it is given and shall not constitute a waiver of any other rights and remedies of the Agent or such Lender with respect to any other or future non-compliance.
13.02Expenses of Agent and Lenders
Whether or not the transactions contemplated by this Agreement are completed or any Advance has been made, the Borrower agrees to pay on demand by the Agent from time to time all reasonable expenses incurred by the Agent or any Lender in connection with this Agreement, the Security and all documents contemplated hereby, specifically including: reasonable expenses incurred by the Agent and the Lenders in respect of due diligence, appraisals, insurance consultations, credit reporting and responding to demands of  any  Governmental  Authority;  reasonable  legal  expenses  incurred  by  the  Agent  and  the  Lenders  in connection with the preparation and interpretation of this Agreement and the Security and the administration of the Facilities generally, including the preparation of waivers and partial discharges of Security; and all reasonable legal expenses incurred by the Agent and the Lenders in connection with the protection and enforcement of the Security.
13.03Debit Authorization
The Borrower hereby authorizes the Agent to debit any account maintained by the Borrower with the Agent, and  to  set  off  and  compensate  against  any  and  all  accounts,  credits  and  balances  maintained  by  the Borrower with the Agent, in order to pay (i) any interest or other amounts payable by the Borrower from time to time pursuant to this Agreement when due; and (ii) any expenses referred to in Section 13.02 which are not paid by the Borrower within thirty (30) days after receipt by the Borrower of a written request from the Agent for payment of such expenses. The Agent agrees to give written notice to the Borrower of any such debit promptly thereafter.
13.04General Indemnity
In addition to any other liability of the Borrower hereunder, the Borrower hereby agrees to indemnify and save  harmless  the  Indemnitees  from  and  against  all  liabilities,  obligations,  losses,  damages,  penalties, actions, judgments, suits, costs, expenses or disbursements (including reasonable legal fees) of any kind or nature whatsoever which may be imposed on, incurred by or asserted against the Indemnitees (except to the extent arising from the negligence or wilful misconduct of such Indemnitees) which relate or arise out of or result from:
(a)any  failure  by  the  Borrower  to  pay  and  satisfy  its  obligations  hereunder  including  any  costs  or expenses incurred by reason of the liquidation or re-employment in whole or in part of deposits or other funds required by the Lenders to fund or maintain the Facilities or as a result of the Borrower’s failure  to  take  any  action  on  the  date  required  hereunder  or  specified  by  it  in  any  notice  given hereunder; 
(b)any investigation by Governmental Authorities or any litigation or other similar proceeding related to any use made or proposed to be made by the Borrower of the proceeds of any Advance; and
(c)any instructions given to any Lender to stop payment on any cheque issued by the Borrower or to reverse  any  wire  transfer  or  other  transaction  initiated  by  such  Lender  at  the  request  of  the Borrower.
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13.05Environmental Indemnity
In addition to any other liability of the Borrower hereunder, the Borrower hereby agrees to indemnify and save harmless the Indemnitees from and against:
(a)any losses suffered by the Indemnitees for, in connection with, or as a direct or indirect result of, the failure of any Company to comply with all Requirements of Environmental Law;
(b)any losses suffered by the Indemnitees for, in connection with, or as a direct or indirect result of, the presence of any Hazardous Material situated in, on or under any property owned by any of the Companies or upon which any of them carries on business; and 
(c)any and all liabilities, losses, damages, penalties, expenses (including reasonable legal fees) and claims which may be paid, incurred or asserted against the Indemnitees for, in connection with, or as a direct or indirect result of, any legal or administrative proceedings with respect to the presence of any Hazardous Material on or under any property owned by any of the Companies or upon which any of them carries on business, or the discharge, emission, spill, radiation or disposal by any of them  of  any  Hazardous  Material  into  or  upon  any  Real  Property,  the  atmosphere,  or  any watercourse or body of water; including the costs of defending and/or counterclaiming or claiming over against third parties in respect of any action or matter and any cost, liability or damage arising out of a settlement entered into by the Indemnitees of any such action or matter;
except to the extent arising from the negligence or wilful misconduct of such Indemnitees.
13.06Survival of Certain Obligations despite Termination of Agreement
The termination of this Agreement shall not relieve the Borrower from its obligations to the Agent and the Lenders arising prior to such termination, such as obligations arising as a result of or in connection with any breach  of  this  Agreement,  any  failure  to  comply  with  this  Agreement  or  the  inaccuracy  of  any representations  and  warranties  made  or  deemed  to  have  been  made  prior  to  such  termination,  and obligations arising pursuant to all indemnity obligations contained herein. Without limiting the generality of the foregoing, the obligations of the Borrower to the Agent and the Lenders arising under or in connection with  Sections  13.04  and  13.05  of  this  Agreement  and  Section  3.2  of  the  CBA  Model  Provisions  shall continue in full force and effect despite any termination of this Agreement.
13.07Interest on Unpaid Costs and Expenses
If the Borrower fails to pay when due any amount in respect of costs or expenses incurred by the Agent or any other amount incurred by the Agent and required to be paid by it hereunder (other than principal or interest on any Advance), it shall pay interest on such unpaid amount from the time such amount is due until paid at the rate equal to the highest rate of interest then applicable under the Facilities.
13.08Notice 
Without  prejudice  to  any  other  method  of  giving  notice,  all  communications  provided  for  or  permitted hereunder shall be in writing and delivered to the addressee by prepaid private courier or sent by facsimile to the applicable address and to the attention of the officer of the addressee as follows:
(a)to the Borrower:
Pure Sunfarms Corp.4700 – 80th StreetDelta, BC   V4K 3N3
Attention: President
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Email: [***]
(b)to the Agent:
Bank of MontrealAgent Bank Services250 Yonge St., 11th FloorToronto, OntarioM5B 2L7Attention: Manager, Agent Bank Services (re Pure Sunfarms Corp.)Fax No: 416-598-6218
(c)to any Lender, at its address noted on Exhibit “A” attached hereto.
Any  communication  transmitted  by  prepaid  private  courier  shall  be  deemed  to  have  been  validly  and effectively  given  or  delivered  on  the  Business  Day  after  which  it  is  submitted  for  delivery.  Any communication  transmitted  by  facsimile  shall  be  deemed  to  have  been  validly  and  effectively  given  or delivered on the day on which it is transmitted, if transmitted on a Business Day on or before 5:00 p.m. (local time of the intended recipient), and otherwise on the next following Business Day. Any party may change its address for service by notice given in the foregoing manner.
13.09Severability
Any provision of this Agreement which is illegal, prohibited or unenforceable in any jurisdiction, in whole or in  part,  shall  not  invalidate  the  remaining  provisions  hereof;  and  any  such  illegality,  prohibition  or unenforceability in any such jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
13.10Further Assurances
The Borrower shall, at its expense, promptly execute and deliver or cause to be executed and delivered to the  Agent  upon  request,  acting  reasonably,  from  time  to  time  all  such  other  and  further  documents, agreements, opinions, certificates and instruments in compliance with this Agreement, or if necessary or desirable to more fully record or evidence the obligations intended to be entered into herein, or to make any recording, file any notice or obtain any consent.
13.11Time of the Essence
Time shall be of the essence of this Agreement.
13.12Promotion and Marketing 
For  the  purpose  of  promotion  and  marketing,  the  Borrower  hereby  authorizes  and  consents  to  the reproduction,  disclosure  and  use  by  the  Lenders  and  the  Agent  of  its  name,  identifying  logo  and  the Facilities, provided that the amount of Facilities shall not be disclosed. The Borrower acknowledges and agrees  that  the  Lenders  shall  be  entitled  to  determine,  in  their  sole  discretion,  whether  to  use  such information; that no compensation will be payable by the Lenders or the Agent in connection therewith; and that the Lenders and the Agent shall have no liability whatsoever to it or any of its employees, officers, directors, affiliates or shareholders in obtaining and using such information as contemplated herein.
13.13Entire Agreement; Waivers and Amendments to be in Writing
(a)This Agreement supersedes all discussion papers, term sheets and other writings which may have been issued by the Agent or the Lenders prior to the date hereof relating to the Facilities, which 
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shall  have  no  further  force  or  effect.  This  Agreement  and  any  other  documents  or  instruments contemplated herein or therein shall constitute the entire agreement and understanding among the Borrower, the Lenders and the Agent relating to the subject-matter hereof.
(b)Subject  to  Section  11.01(b)  and  Section  11.10,  no  provision  of  this  Agreement,  or  any  other document or instrument in existence among the parties may be modified, waived or terminated except by an instrument in writing executed by the party against whom such modification, waiver or termination is sought to be enforced.
13.14Inconsistencies with Security
To the extent that there is any inconsistency between a provision of this Agreement and a provision of any document  constituting  part  of  the  Security,  the  provision  of  this  Agreement  shall  govern.  For  greater certainty, a provision of this Agreement and a provision of the Security shall be considered to be inconsistent if both relate to the same subject-matter and the provision in the Security imposes more onerous obligations or restrictions than the corresponding provision in this Agreement.
13.15Confidentiality
The  Agent  and  the  Lenders  agree  that  all  documentation  and  other  information  made  available  by  the Borrower to them under or in connection with this Agreement shall (except to the extent such documentation or other information is publicly available or hereafter becomes publicly available other than by their actions, or was theretofore known or hereinafter becomes known to them independently of any disclosure by the Companies)  be  held  in  confidence  by  them  and  used  solely  in  the  evaluation,  administration  and enforcement  of  the  Advances  and  all  matters  related  to  this  Agreement  and  the  Security  and  the transactions  contemplated  hereby  and  thereby,  and  in  the  prosecution  of  defence  of  legal  proceedings arising in connection herewith and therewith. Notwithstanding the foregoing, nothing contained herein shall be construed to prevent the Agent or the Lenders from (a) making disclosure of any information (i) if required to  do  so  by  Applicable  Law,  (ii)  to  any  Governmental  Authority  having  or  claiming  to  have  authority  to regulate or oversee any aspect of the business of the Agent, the Lenders or the Companies in connection with the exercise of such authority or claimed authority and that compels or requires the disclosure of such information, (iii) pursuant to any subpoena or if otherwise compelled in connection with any litigation or administrative proceeding, (iv) to any prospective participant or assignee of all or any portion of the rights and obligations or the Agent or any Lender hereunder provided that such prospective assignee executes and  delivers  to  the  Borrower  a  confidentiality  agreement  in  form  and  substance  acceptable  to  it,  acting reasonably,  or  (v)  to  the  extent  that  the  Agent  or  its  counsel  deems  necessary  or  appropriate,  acting reasonably, to effect or preserve its Security or to enforce any remedy provided in this Agreement or the Security or otherwise available by Law; or (b) making, on a confidential basis, such disclosures as the Agent and the Lenders reasonably deem necessary or appropriate to their legal counsel, accountants or other advisers, agents or representatives (including outside auditors).
13.16Governing Law
This  Agreement  shall  be  interpreted  in  accordance  with  the  Laws  of  the  Province  of  British  Columbia. Without prejudice to the right of the Agent and the Lenders to commence any proceedings with respect to this Agreement in any other proper jurisdiction, the parties hereby attorn and submit to the jurisdiction of the courts of the Province of British Columbia.  
13.17Execution by Fax or pdf; Execution in Counterparts
This  Agreement  may  be  executed  in  several  counterparts,  each  of  which,  when  so  executed,  shall  be deemed to be an original and which counterparts together shall constitute one and the same Agreement. This  Agreement  may  be  executed  by  facsimile  or  portable  document  format  (pdf),  and  any  signature contained  hereon  by  facsimile  or  pdf  shall  be  deemed  to  be  equivalent  to  an  original  signature  for  all purposes.
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13.18Binding Effect
This Agreement shall be binding upon and shall enure to the benefit of the parties and their respective successors and permitted assigns; “successors” includes any corporation resulting from the amalgamation of any party with any other corporation.
[The remainder of this page is intentionally blank.  Signature page follows.]
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IN WITNESS WHEREOF the parties hereto have executed this Agreement.
PURE SUNFARMS CORP.
By: /s/ Stephen Ruffini
name: Stephen Ruffinititle: CFO and Director
BANK OF MONTREAL, as Administrative AgentBANK OF MONTREAL, as a Lender
By: /s/ Rohit LoboBy: /s/ Rohit Lobo
name: Rohit Lobotitle: Senior Directorname: Rohit Lobotitle: Senior Director
By: /s/ Charles SandaBy: /s/ Charles Sanda
name: Charles Sandatitle: Directorname: Charles Sandatitle: Director 
FARM CREDIT CANADA, as a LenderCANADIAN  IMPERIAL  BANK  OF  COMMERCE, as a Lender
By: /s/ Alex Lau
name: Alex LauBy: /s/ James Day
title:  Senior  Relationship  Manager, Corporate & Senior Accountsname: James Daytitle: Authorized Signatory
By: /s/ Cameron Scott
name: Cameron Scotttitle: Authorized Signatory
Fourth Amended and Restated Credit Agreement  DOCPROPERTY "CUS_DocIDChunk0" NATDOCS\70776052\V-4
Exhibit 10.2
INFORMATION IN THIS EXHIBIT IDENTIFIED BY [***] IS CONFIDENTIAL AND HAS BEEN EXCLUDED BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED.
PERSONAL & CONFIDENTIAL
April 5, 2023
Stephen C. Ruffini
[***]
Dear Stephen:  
 
As you know, you are party to an employment agreement with Village Farms International, 
Inc. (the “Company”), dated as of June 1, 2020 (the “Employment Agreement”).  By signing this 
letter  agreement  (this  “Amendment”),  you  and  the  Company  mutually  agree  to  amend  the 
Employment Agreement as set forth herein, effective as of April 5, 2023 (the “Effective Date”).  
All  capitalized  terms  used  but  not  defined  herein  will  have  the  meanings  set  forth  in  the 
Employment Agreement.  
The terms of this Amendment, as set forth below, constitute a legally binding agreement 
between you and the Company.  
1. Section 2 of the Employment Agreement is hereby amended in its entirety to read as 
follows: 
Unless  sooner  terminated  as  provided  in  Section  4,  the  Executive’s  term  of 
employment under this Agreement shall run for a period of three (3) years, plus 
one  month,  from  the  Effective  Date  to  June  30,  2023  (the  “Initial  Term”); 
provided  that,  the  Executive’s  term  of  employment  under  this  Agreement  will 
automatically be extended for one additional year commencing on June 30, 2023 
and  on  each  annual  anniversary  of  such  date  thereafter  (each,  a  “Renewal Term”)
, unless terminated earlier under Section 4 or unless the Company gives 
written notice of non-renewal to the Executive at least ninety (90) days before the 
expiration of the Initial Term or then-current Renewal Term, as applicable. The 
Initial Term and any Renewal Terms are referred to collectively as the “Term.” A 
termination of the Executive’s employment due to notice of non-renewal of the 
Term by the Company shall be treated as a termination “Without Cause” under 
Section 4(d) and the Executive shall receive the applicable payments and benefits 
set forth in Section 4(g).      
2. Except as otherwise expressly amended hereby, all of the terms and conditions of the 
Employment Agreement will remain in full force and effect. 
This  Amendment,  together  with  the  Employment  Agreement  (as  amended  hereby), 
contains  the  entire  agreement  between  you  and  the  Company  with  respect  to  the 
subject  matter  hereof,  and  supersedes  all  prior  and  contemporaneous  discussions, 
agreements and understandings of every nature relating to the subject matter hereof. 
This Amendment, for all purposes, will be construed in accordance with the laws of the 
State of Florida without regard to any conflict- or choice-of-law principles that would 
call  for  the  application  of  the  law  of  another  jurisdiction.  Any  controversy  or  claim 
arising out of or related to this Amendment shall be settled by arbitration as provided 
in Section 15 of the Employment Agreement.  
This  Amendment  may  be  executed  in  counterparts  and  delivered  by  electronic 
transmission  in  “portable  document  format”  or  by  any  other  electronic  signature 
method acceptable to the Company, each of which shall be an original and which taken 
together shall constitute one and the same document. 
* * * 
We look forward to your continued success with the Company.  Please return your signed copy 
of this Amendment to me by no later than April 28, 2023.  
Very truly yours,
Village Farms International, Inc.
BY: /s/ Michael A. DeGiglio____  
Name:Michael A. DeGiglio
Title:   Chief Executive Officer
ACKNOWLEDGED AND AGREED: 
/s/ Stephen C. Ruffini_____
90 Colonial Center Pkwy, Lake Mary, FL. 32746 
     (407) 936-1190 | villagefarms.com | Good, for all. ™
Stephen C. Ruffini
 
90 Colonial Center Pkwy, Lake Mary, FL. 32746 
     (407) 936-1190 | villagefarms.com | Good, for all. ™
Exhibit 10.3
EMPLOYMENT AGREEMENT
This Employment Agreement (the “Agreement”) is entered into by and between Village Farms, L.P., LLC, a Delaware limited partnership (the “Company”); and Ann Gillin Lefever (the “Executive”) effective February 7, 2022 (the “Effective Date”).  The Company and the Executive are referred to herein collectively as “Parties” and individually as “Party.”  
In consideration of the mutual promises contained herein, the Company and the Executive agree as follows:
SECTION 1.EMPLOYMENT DUTIES
a) Executive agrees to employment with the Company under the terms of this Agreement.  The Executive shall 
serve as the Company’s Executive Vice President of Corporate Affairs, as well as in such other positions or capacities as may be reasonably requested by the Chief Executive Officer of the Company (the “CEO”), including, without limitation, serving as an officer of, or member of any committee of, the Company and its Parent,  subsidiaries,  affiliates  or  divisions  (collectively,  the  “Related  Companies”)  as  requested  by  the Company and shall have such powers, duties and responsibilities as are provided from time to time or that may  be  assigned  by  the  CEO  consistent  with  such  position(s).    The  Executive  agrees  to  (a)  devote substantially  all  of  Executive’s  business  time  to  the  business  affairs  of  the  Company  and  the  Related Companies  as  directed  by  the  Company,  (b)  perform  all  duties  and  fulfill  all  responsibilities  incident  to Executive’s employment in a manner reasonably expected of management in similar positions, (c) comply with the Company’s policies and procedures in place from time to time, and (d) serve the Company faithfully and to the best of Executive’s ability.  The Executive’s services under this Agreement shall be performed primarily in New York, subject to necessary travel requirements approximately 30% and duties hereunder.  The  foregoing  shall  not  be  construed  to  prohibit  the  Executive  from  (i)  sitting  on  boards  of  directors  of companies that are not engaged in a Competitive Business (as defined in Section 5 below) or engaging in charitable activities, provided that such board membership and/or charitable activities do not inhibit, conflict with or prohibit the performance of the Executive’s duties hereunder or inhibit or conflict with the business of the Company or any of the Related Companies, and (ii) satisfying military obligations.
b) Executive  acknowledges  that  Executive  has  a  duty  of  loyalty  to  the  Company  and  that  Executive  must 
discharge duties under this Agreement in good faith.  Executive, accordingly, agrees to perform Executive’s obligations herein loyally and in good faith.
SECTION 2.TERM
The Executive’s term of employment under this Agreement shall run from the Effective Date for a period of two (2) years (the “Initial Term”), unless sooner terminated as provided hereunder.  Upon expiration of the Initial Term, the employment of Executive shall automatically be renewed for successive terms of one (1) year (such optional renewal term(s) shall be referred to together with the Initial Term as the “Term”) unless either Executive or Company gives the other notice of termination not less than sixty (60) days prior to the expiration of the Initial Term or any renewal thereof.  
SECTION 3.COMPENSATION AND BENEFITS
During the Term, for services for the Related Companies, the Company will pay and provide to the Executive, the following:
a) Salary.  Executive’s base salary at a rate of $300,000 on an annualized basis (the “Base Salary”), which 
Base Salary will be reviewed periodically and subject to the granting of such compensation, if any, as the 
CEO, in the CEO’s discretion, may approve.  Base Salary payments shall be made to the Executive in a manner consistent with the payroll policies of the Company.
b) Short Term Incentive Plan.  For each fiscal year ending during the Term, Executive shall be eligible to earn 
an annual short term incentive performance bonus (the “STIP Bonus”) in addition to the Executive’s Base Salary.  The maximum STIP Bonus will be up to 50% of the Executive’s Base Salary, prorated in year one (1) and then increased to 60% eligibility in year two (2) based on the Company’s tangible performance (50%) as well as the Employee’s individual achievement (50%).  The Company’s performance is tied to earnings before interest, taxes, depreciation and amortization (EBITDA) as approved by the Board of Directors in each  fiscal  year.    The  payment  of  any  STIP  Bonus  will  be  on  or  before  three  (3)  months  following  the Company’s fiscal year end.  The STIP Bonus for a fiscal year is not earned until the date that it is paid or payable.  Accordingly, in order for the Executive to be eligible to receive the STIP Bonus with respect to a fiscal year, the Executive must be employed by the Company on the date that such STIP Bonus is paid or payable.   
c) ParentCo Share-based Compensation Plan.  During the Term, the Executive shall be eligible to participate 
in  the  ParentCo’s  (“Parent-Co”)  Share-based  Compensation  Plan  or  any  similar  successor  equity compensation plan as may be in place from time to time (the “Share-based Compensation Plan”) which shall be pro-rated for any initial partial year of employment. Awards under the Share-based Compensation Plan are discretionary and can only be granted by the Compensation Committee of ParentCo’s Board of Directors.  Executive’s eligibility and award under the Share-based Compensation Plan have been pre-determined and agreed upon at 100,000 options, by both Parties, as described in a separate document titled, “Equity Plan Document”,  which  is  incorporated  by  reference  into  this  Agreement.    The  pre-determined  award  will  be subject to the terms and conditions established within the Plan and a separate award agreement between the Executive and the Parent-Co that sets forth the terms of the award.  Executive will be eligible for a pro-rated performance grant (RSU) in 2022 based on non-tangible achievements after six (6) months of continuous service.   
d) Fringe Benefits.  During the Term, the Executive shall be entitled to participate in all employee benefit plans 
and  programs  (excluding  severance  plans,  if  any)  made  available  by  the  Company  for  the  benefit  of  its managerial  employees  at  the  Executive’s  level  or  to  its  employees  generally,  in  each  case,  to  the  extent permissible under the general terms and provisions of such plans or programs and in accordance with the provisions thereof.  The Company may amend, modify or rescind any employee benefit plan or program and/or change employee contribution amounts to benefit costs without notice in its discretion.  
e) Business Expenses.  The Executive shall be entitled to receive reimbursement by the Company, subject to 
such requirements with respect to substantiation and documentation as may be reasonably specified by the Company, for all reasonable and necessary travel and other business expenses incurred by the Executive in the performance of Executive’s duties hereunder.  The Executive must adhere to the Company’s policies and procedures to receive the requested reimbursement. 
f)Vacation.  During the Term, Executive shall be entitled to twenty (20) paid vacation days per calendar year, which vacation days shall accrue, and may be used, in accordance with the policies of the Company in place from time to time.  Executive may not carry-over more than five (5) accrued vacation days from one calendar year to the next calendar year.
g) Personal Days, Etc.  The Executive will be entitled to as many holidays, sick days and personal days as are 
in accordance with the Company’s policy then in effect generally for its management, and such days off work will  be  taken  at  the  same  times  as  any  such  days  off  work  are  taken  by  the  Executive  pursuant  to  any employment agreement the Executive may have with any of the Related Companies (if any).
h) Travel Budget Expenses.  The Company and Executive mutually agree that the Executive should travel 
frequently to the primary office location in Lake Mary, Florida.  The Company will reimburse Executive for reasonable travel expenses with an annual budget equivalent to $10,000 to be prepared and approved by the CEO prior to any expenses being incurred or reimbursed.
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SECTION 4.TERMINATION
a) Notwithstanding  the  provisions  of  Section  2  of  this  Agreement,  the  Executive’s  employment  under  this 
Agreement shall terminate by either the Company or the Executive pursuant to Section 4(b) below.  
b) Events of Termination.  This Agreement and the Executive’s employment with Company shall terminate 
upon the occurrence of any one or more of the following events:
i. Death.    In  the  event  of  the  Executive’s  death  (“Death”),  this  Agreement  and  the 
Executive’s employment with the Company shall automatically terminate on the date of Death.
ii. Disability.  If the Executive, due to physical or mental illness, is unable to perform the 
essential  functions  of  the  Executive’s  duties  (with  reasonable  accommodation)  for  a continuous  period  of  ninety  (90)  days  or  non-continuous  period  of  one  hundred  twenty (120)  days  in  any  12-month  period  (“Disability”),  the  Company  may  terminate  this Agreement  and  the  Executive’s  employment  with  the  Company  upon  written  notice  of termination  to  the  Executive  (“Disability  Termination  Notice”).    It  is  understood  and agreed that return to work for brief periods, not exceeding five three-day periods during the 90-day period, shall not be deemed to have eliminated the continuity of the 90-day period.  If any question arises as to whether the Executive is unable to perform the essential functions  of  Executive’s  duties  (with  or  without  reasonable  accommodations)  due  to physical or mental illness, the Executive shall submit to an examination by a physician selected by the mutual agreement of the Company and the Executive, at the Company’s expense.  The decision of the physician shall be certified in writing to the Company, shall be sent by the Company to the Executive or the Executive’s representative, and shall be conclusive for purposes of this Agreement.  If within twenty (20) days after the Company’s request, the Executive shall fail to submit to a physical examination, a determination by the  Company  shall  be  conclusive.    A  termination  due  to  Disability  shall  be  effective immediately (or such later date that may be set forth in the written notice of termination to the Executive).  
iii. Termination by the Company for Cause.  The Company may terminate this Agreement 
and Executive’s employment with the Company for Cause (as defined herein) upon the Company  giving  written  notice  of  termination  to  the  Executive.    The  following  acts  or omissions  by  the  Executive  shall  constitute  “Cause”  for  immediate  termination  of  this Agreement: (A) conduct by the Executive constituting a felony or other crime involving dishonesty,  theft  or  an  act  of  moral  turpitude;  (B)  conduct  of  the  Executive  which  is materially injurious, or reasonably likely to be materially injurious, to the Company or any Related  Companies,  monetarily  or  otherwise;  (C)  an  act  or  acts  of  dishonesty  by  the Executive involving the Company or any Related Companies; (D) willful misconduct or gross negligence in the performance of the Executive’s duties under this Agreement, (E) refusal by the Executive to perform Executive’s duties hereunder and, to the extent that such refusal or failure is subject to cure (as determined by the Company in its reasonable discretion) failure of the Executive to cure same within thirty (30) days after notice thereof to the Executive; provided, however, that no such notice and opportunity shall be required if the same refusal or failure occurs by the Executive after the initial refusal or failure has been cure; (F) any breach of the Executive’s obligations under Section 5 of this Agreement, or (G) a material breach by the Executive of any of the other provisions of this Agreement and, to the extent that such breach is subject to cure (as determined by the Company in its reasonable discretion) failure of the Executive to cure same within thirty (30) days after notice thereof to the Executive; provided, however, that no such notice shall be required if the  same  breach  occurs  by  the  Executive  after  the  initial  breach  has  been  cured.    A termination for “Cause” shall be effective immediately (or on such later date set forth in the written notice of termination to the Executive).  
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iv. Termination  by  the  Company  Without  Cause.    The  Company  may  terminate  this 
Agreement and the Executive’s employment with the Company at any time Without Cause (as defined below) by giving written notice of termination to the Executive. As used in this Agreement, (“Without Cause”) means a termination of this Agreement and the Executive’s employment by the Company for any reason or no reason (other than Cause or due to the Executive’s  Death  or  Disability).    A  termination  “Without  Cause”  shall  be  effective immediately  (or  on  such  later  date  set  forth  in  the  written  notice  of  termination  to  the Executive).  
v. Voluntary Termination by the Executive. The Executive may terminate this Agreement 
and  the  Executive’s  employment  with  the  Company  for  any  reason  or  no  reason (“Voluntary  Termination”)  by  giving  at  least  thirty  (30)  days  prior  written  notice  of Voluntary  Termination  to  the  Company;  provided,  however,  the  Company  reserves  the right, upon written notice to the Executive, to accept the Executive’s notice of Voluntary Termination  and  to  accelerate  such  notice  and  make  the  Executive’s  Voluntary Termination effective immediately or on such other date prior to the Executive’s intended last day of work as the Company deems appropriate.  It is understood and agreement that the Company’s election to accelerate the Executive’s notice of Voluntary Termination shall not  be  deemed  a  termination  by  the  Company.  The  Executive’s  Voluntary  Termination shall be effective as of the date set forth in the Executive’s written notice of Voluntary Termination (or such earlier date set forth in the acceleration notice from the Company, if any).   
vi. Termination  for  Good  Reason  by  Executive.    The  Executive  may  terminate  this 
Agreement  and  the  Executive’s  employment  with  the  Company  for  Good  Reason  (as defined below) by giving written notice of termination for Good Reason within thirty (30) days  after  the  expiration  of  the  Good  Reason  Cure  Period  (defined  below);  provided, however, the Company reserves the right, upon written notice to the Executive, to accept the Executive’s notice of termination for Good Reason  and to accelerate such notice and make the Executive’s termination for Good Reason effective immediately or on such other date prior to the Executive’s intended last day of work as the Company deems appropriate.  It is understood and agreed that the Company’s election to accelerate the Executive’s notice of termination for Good Reason shall not be deemed a termination by the Company. For purposes  of  this  Agreement,  “Good  Reason”  shall  mean  the  occurrence,  without  the Executive’s prior consent of: (A) a change materially adverse to the Executive in the nature or scope of Executive’s position, functions, responsibilities or duties (B) the Company’s breach of any material provision of this Agreement (C) a change in control, as defined herein.  However, clauses (A) or (B) of this Section shall constitute "Good Reason" only if (i) the Executive provides the Company with written notice of the Executive’s objection to such act or event within thirty (30) days after such event first occurs, (ii) the Company is afforded an opportunity to cure such event within thirty (30) days after the Company’s receipt of such notice (the “Good Reason Cure Period”), and (iii) during the Good Reason Cure Period, the Executive cooperates in good faith with the Company’s efforts to cure such event. For purposes of clarification, if the Company cures the Good Reason event during the Good Reason Cure Period, Good Reason shall not be deemed to have occurred.  The Executive’s resignation for Good Reason shall be effective as of the date set forth in the Executive’s notice of resignation for Good Reason to the Company (or such earlier date set forth in the acceleration notice from the Company, if any).
1. Change in Control, which means for purposes of this Agreement, the occurrence 
of any one of the following events:
a. Any  consolidation  or  merger  of  Village  Farms  International,  Inc.  (the 
“Parent”)  or  the  Company  into  another  entity,  in  which  any  of  the Related Companies are not the continuing or surviving entity;
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b. Any  sale,  lease,  exchange  or  transfer  (in  one  transaction  or  series  of 
related transactions) of all or substantially all of the assets of the Parent or  the  Company  to  another  entity  other  than  any  of  the  Related Companies;
c. Approval  and  consummation  by  the  stockholders  of  the  Parent  or  the 
Company of any plan or proposal for the liquidation or dissolution of the Parent or the Company unless such plan or proposal provides that all the assets of the Parent and the Company, as applicable, are transferred to a member of the Related Companies upon such liquidation or dissolution;
d. Upon a change in the person (i.e. Michael A. DeGiglio) who is serving 
as the Chief Executive Officer or Executive Chairman on behalf of the Parent and/or the Company.
c) Termination Benefits.
i. If the Executive’s employment is terminated due to Cause, Voluntary Termination, Death 
or  Disability,  then  this  Agreement  and  the  Executive’s  employment  with  the  Company shall  terminate  and  the  Company’s  sole  obligation  to  the  Executive  (or  the  Executive’s estate, heirs, executors, administrators, representatives and assigns) under this Agreement or otherwise shall be to: (A) pay to the Executive any Base Salary earned, but not yet paid, prior  to  the  effective  date  of  termination,  payable  in  accordance  with  the  Company’s standard payroll practices; (B) reimburse the Executive for any expenses incurred by the Executive through the date of termination in accordance with Section 3(e) above; and (C) pay and/or provide any amounts or benefits that are vested amounts or vested benefits or that  the  Executive  is  otherwise  entitled  to  receive  under  any  plan,  program,  policy  or practice (with the exception of those, if any, relating to severance) on the effective date of termination, in accordance with such plan, program, policy, or practice (clauses (A), (B), (C)  and  (D)  of  this  sentence  are  collectively  referred  to  herein  as  the  “Accrued Obligations”).
ii. If  the  Executive’s  employment  is  terminated  by  the  Company  Without  Cause,  or  is 
terminated by the Executive for Good Reason, then this Agreement and the Executive’s employment hereunder shall terminate and the Company’s sole obligation to the Executive (or the Executive’s estate, heirs, executors, administrators, representatives and assigns) under this Agreement or otherwise shall be to: (A) pay and/or provide to the Executive the Accrued Obligations, in accordance with the terms set forth in Section 4(c)(i) above; and (B) subject to Section 4(c)(iii) below, during the Salary Continuation Period (as defined below) continue to pay Executive’s Base Salary plus a pro-rata portion of the STIP Bonus, and any Share-based Compensation plan the Executive becomes eligible for, at the rate in effect  immediately  prior  to  the  effective  date  of  termination  (together,  the  “Salary Continuation Payments”). As used herein, the “Salary Continuation Period” means the period beginning on the day following the effective date of termination and ending on the six (6) month anniversary of the effective date of termination.  Subject to Section 4(c)(iv) below,  the  Salary  Continuation  Payments  (less  applicable  withholdings  and  customary payroll deductions, excluding 401(k) contributions) shall be payable in substantially equal installments  in  accordance  with  the  Company’s  customary  payroll  practices  and procedures,  commencing  on  the  next  regular  pay  date  following  the  8th  day  after  the Executive’s execution and delivery of the Release (as defined in Section 4(c)(iii) below); provided, however, the first payment of the Salary Continuation Payments shall include the cumulative amount of payments that would have been paid to the Executive during the period  of  time  between  the  effective  date  of  termination  and  the  date  the  Salary Continuation Payments commence had such payments commenced immediately following the effective date of termination.    
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Notwithstanding anything set forth in this Section 4(c)(ii) to the contrary, in the event of a breach by the Executive of Executive’s obligations under Section 5 of this Agreement or any material breach by the Executive of Executive’s obligations under the Release and in addition to any other remedies under this Agreement, the Release or at law or in equity, the Salary Continuation Period shall terminate as of the date of such breach and the Company shall have no further obligations under this Section 4(c)(ii) other than to pay the Accrued Obligations (to the extent not previously paid) and the Executive shall be required, upon demand,  to  return  to  the  Company  ninety  percent  (90%)  of  any  Salary  Continuation Payments made by the Company pursuant to this Section 4(c)(ii). 
iii. The  Salary  Continuation  Payments  shall  be  contingent  upon  the  Executive’s  execution, 
delivery within 21 days (or 45 days in the case of a group termination) following receipt, and  non-revocation  of  a  general  release  in  a  form  satisfactory  to  the  Company  (the "Release").  The Release will be delivered to the Executive within ten (10) business days following the effective date of termination and will include, without limitation, a general release from all liability of the Company, the Related Companies, each of their respective officers, directors, shareholders, partners, managers, agents, employees and other related parties. Notwithstanding anything to the contrary contained herein, in the event that any payment  hereunder  is  contingent  upon  the  Executive’s  execution  and  delivery  of  the Release and the 21 (or 45 day) period covers more than one calendar year, the payment shall be paid in the second calendar year (on the first regular pay date of such calendar year  following  the  date  that  the  Release  becomes  effective  and  is  no  longer  subject  to revocation,  all  subject  to  Section  4(c)(iv)  below),  regardless  of  whether  the  Executive executes and delivers the Release in the first or the second calendar year encompassed in such 21 (or 45) day period.
iv. Notwithstanding anything set forth in Section 4(c)(ii) above to the contrary, if necessary to 
comply with the restriction in Section 409A(a)(2)(B) of the Internal Revenue Code of 1986, as amended (the "Code") concerning payments to "specified employees," any payment on account of the Executive’s separation from service that would otherwise be due hereunder within  six  (6)  months  after  such  separation  shall  nonetheless  be  delayed  until  the  first business day of the seventh month following the Executive’s date of termination and the first such payment shall include the cumulative amount of any payments that would have been  paid  prior  to  such  date  if  not  for  such  restriction,  together  with  interest  on  such cumulative amount during the period of such restriction at a rate, per annum, equal to the applicable federate short-term rate (compounded monthly) in effect under Section 1274(d) of the Code on the date of termination.  For purposes of Section 5 of this Agreement, the Executive shall be a "specified employee" for the 12-month period beginning on the first day of the fourth month following each "Identification Date" if the Executive is a "key employee" (as defined in Section 416(i) of the Code without regard to Section 416(i)(5) thereof)  of  the  Company  at  any  time  during  the  12-month  period  ending  on  the "Identification  Date."    For  purposes  of  the  foregoing,  the  Identification  date  shall  be December 31.  
SECTION 5.NONDISCLOSURE, INVENTIONS AND NONCOMPETITION
a) Nondisclosure and Inventions.
i. Definitions.  For purposes of this Section 5, the following terms shall have the meanings 
set forth below.
“Competitive Business” means any business engaged in providing products and services competitive  with  those  products  and  services  offered  by  the  Company  or  any  Related Companies at the time of termination of Executive’s employment.
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“Confidential  Information”  means  all  information  relating  to  the  Company  and  any Related  Companies  and  their  respective  customers  and  suppliers  considered  by  the Company or any Related Companies to be confidential including, without limitation, (a) business plans, research, developments and marketing strategies, customer names and lists, employee names and information, product and service prices and lines, processes, designs, ideas,  formulae,  methods,  financial  information,  costs,  supplies,  pricing  information, computer  programs,  procedures,  processes,  methods,  systems,  strategies,  production methods  and  (b)  the  Inventions  and  Trade  Secrets  (as  defined  below).    “Confidential Information” shall not include the foregoing that is or becomes (i) in the public domain other  than  through  acts  by  the  Executive,  (ii)  already  lawfully  in  the  Executive’s  possession  at  the  time  of  disclosure  by  the  Company  as  evidenced  by  the  Executive’s written records, (c) disclosed to the Executive by a third party who is not prohibited from disclosing  the  information  pursuant  to  any  fiduciary,  contractual,  or  other  duty  to  any Related Companies, or (d) required by law, rule, regulation or court order to be disclosed.
“Inventions”  means  discoveries,  concepts,  ideas,  methods,  formulae,  techniques, developments, know-how, inventions, and improvements relating to the business of the Company and any of the Related Companies, whether or not patentable, conceived of or made by Executive at any time, whether before, during, or after business hours, or with the use  of  the  facilities  of  the  Company  or  any  of  the  Related  Companies,  materials,  or personnel,  either  solely  or  jointly  with  others  after  the  Effective  Date  and  during Executive’s employment by the Company.
“Trade Secrets” means any and all technology and information relating to businesses of the Company or any Related Companies or their respective patents, methods, formulae, software, algorithms, financial models, know-how, designs, products, processes, services, research development, inventions, systems, engineering, and manufacturing which have been designated and treated as trade secrets by the Company or any Related Companies and which provide competitive advantage to the Company or any Related Companies.
ii. Confidentiality; Company to Own Inventions.
a. Receipt  of  Confidential  Information.  The  Executive  acknowledges 
that  during  Executive’s  employment  as  an  Executive  of  the  Company and  as  a  result  of  the  confidential  relationship  with  the  Related Companies  established  thereby,  the  Executive  shall  be  receiving Confidential  Information  and  that  the  Confidential  Information  is  a highly valuable asset of the Company and Related Companies.
b. Protection  of  Confidential  Information.    The  Executive  shall  use 
Confidential  Information  solely  for  Executive’s  duties  with  the Company and any Related Companies.  The Executive will not disclose Confidential  Information,  directly  or  indirectly,  at  any  time  during  or after employment by the Company except to persons authorized by the Company  or  Related  Companies  to  receive  this  information  or  as required by law.  The Executive will not use Confidential Information, directly  or  indirectly,  at  any  time  during  or  after  employment  by  the Company, for any personal benefit, for the benefit of any other person or entity,  or  in  any  manner  adverse  to  the  Company  or  any  Related Companies.  
c. Return of Confidential Information.  The Executive will immediately 
return or destroy all materials (including without limitation, written or printed documents, email and computer disks or tapes, whether machine or user readable, computer memory, and other information reduced to 
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any recorded format or medium) containing, summarizing, abstracting or  in  any  way  relating  to  Confidential  Information.    At  the  time Executive returns these materials a release will be signed that Executive has complied with the terms of this Agreement.  
d. Disclosure and Ownership.  The Executive shall inform the Company 
promptly and fully of all Inventions by a written report, setting forth in detail a description of the invention, the procedures used and the results achieved.  All Inventions shall be and remain the sole property of the Company  or  any  Related  Companies.    The  Executive  promptly  shall execute  and  deliver  to  the  designated  Related  Companies  any instruments deemed necessary by it to effect disclosure and assignment of all Inventions to the designated Related Companies including, without limitation,  assignments  satisfactory  to  the  designated  Related Companies.  Upon request of the designated Related Companies, during and after the Executive’s employment with the Company, the Executive shall  execute  patent  and  copyright  applications  and  any  other instruments,  reasonably  deemed  necessary  by  the  designated  Related Companies  for  the  prosecution  of  such  patent  applications  or  the acquisition of letters patent or registration of copyrights in the United States  and  foreign  countries  based  on  such  Inventions;  provided, however, that if the Executive takes any action in connection with the foregoing  obligation  after  the  Executive’s  employment  with  the Company  is  terminated,  the  designated  Related  Companies  shall compensate the Executive at a reasonable rate to be agreed upon by the parties  and  shall  promptly  reimburse  the  Executive  for  any  expenses incurred in satisfying such obligation.
e. Works for Hire.  To the extent the Inventions consist of original works 
of authorship which are made by the Executive (solely or jointly with others) within the scope of the Executive’s employment and which are protectable  by  copyright,  the  Executive  acknowledges  that  all  such original works of authorship are “works for hire” as that term is defined in the United States Copyright Act (17 U.S.C., Section 101).
b) Noncompetition.  In consideration of the Executive’s employment with the Company and in consideration 
of this Agreement, the Executive hereby covenants as follows:
i. Purpose of Restrictions. Executive acknowledges that Executive is employed as executive 
or management personnel, and in this executive or management position, Executive will have access to, and will be provided with, Trade Secrets to assist Executive in the course and scope of Executive’s duties.  Executive further acknowledges and agrees that the Trade Secrets  constitute  trade  secrets  of  the  Company  and  Related  Companies,  and  that  the Company has a reasonable, necessary and legitimate business interest in protecting its own and the and Related Companies’ Trade Secrets, and that the terms and conditions of the non-solicitation and non-competition provisions contained in this Section are reasonable and necessary to protect such Trade Secrets.  
ii. Covenants.  Without the prior written consent of the CEO, during the Executive’s tenure 
with the Company and for the Salary Continuation Period, if the Executive shall leave the employment of the Company, whether voluntarily or involuntarily, the Executive shall not directly  or  indirectly,  personally,  by  agency,  as  an  employee,  through  a  corporation, Company, limited liability Company, or by any other entity, artifice, or device:
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a. own, manage, operate, control, employ or have any financial interest in 
or consult to, or lend the Executive’s name to any enterprise, Company, or other entity engaged in a Competitive Business in North America;
b. assist  others  in  engaging  in  any  Competitive  Business  in  the  manner 
described in the foregoing clause; 
c. solicit  or  service  in  any  way  in  connection  with  or  relating  to  a 
Competitive Business, on behalf of the Executive or on behalf of or in conjunction with others, any supplier, client, customer, or prospective supplier, client, or customer, who had been serviced by the Company or any Related Companies in the one year period immediately preceding the date of termination, or any prospective supplier, client, or customer to  whom  a  formal  business  presentation  or  substantiated  offering  of services had been made by Company within the 12 months immediately preceding the date of termination; or
d. actively solicit or induce employees of any of the Company or Related 
Companies  to  terminate  their  employment  with  the  Company  or  such Related Companies or engage in any Competitive Business; 
The covenants in this Section 5(b)(i) shall be specifically enforceable.  However, the covenants in this Section 5(b)(i) shall not be construed to prohibit the ownership of not more than five percent of the equity of any publicly held entity engaged in a Competitive Business, so long as the Executive is not otherwise engaged with such entity in any of the other activities  specified  in  clauses  (a)  through  (d).    Notwithstanding  the foregoing,  if  Severance  Payments  are  required  to  be  made  to  the Executive and the Company does not make any such payments within 30 business days following the date on which the Company (by notice to the CEO)  is  given  notice  by  the  Executive  that  payment  was  not  timely made,  then  the  Executive’s  obligations  under  this  Section  6(b)  shall terminate.
iii. Severability  of  Covenants.    For  purposes  of  this  Section  5(b),  the  Executive  and  the 
Company intend that the above covenants-not-to-compete shall be construed as separate covenants,  one  for  each  activity  and  each  geographic  area.    If  one  or  more  of  these covenants  are  adjudicated  to  be  unenforceable,  such  unenforceable  covenant  shall  be deemed eliminated from this Section 5(b) to the extent necessary to permit the remaining separate covenants to be enforced.
SECTION 6.CONFLICTING AGREEMENTS
The Executive represents and warrants that Executive is free to enter into this Agreement, that Executive has not made and will not make any agreements in conflict with the Agreement, and that Executive will not disclose to the Company or any Related Companies, nor use for the benefit of the Company or any Related Companies, any trade secrets or confidential information that are the property of any former employer or employers.
SECTION 7.INDEMNIFICATION
The Company shall indemnify and hold harmless the Executive for acts undertaken as an employee or agent of the Company or Related Companies against any and all claims, suits, debts, causes of action, proceedings, investigations, governmental or regulatory inquiries or other actions from any all loss, liability damage, cost and expense including the advancement of reasonable attorney’s fees which any person or entity may have had, now has, or may in the future 
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have, o the fullest extent provided or permitted under applicable law. This provision shall survive the termination of employment.
SECTION 8.ASSIGNMENT
a) Nonassignability.  Neither this Agreement nor any right or interest hereunder shall be assignable (i) by the 
Executive without the prior written consent of the Company, or (ii) by the Company without the prior written consent of the Executive, except that the Company may assign its rights hereunder in connection with the sale or disposition of the business and assets of the Company as a whole or in part.
b) No Attachment.  Except as required by law, no right to receive payments under this Agreement shall be 
subject  to  anticipation,  commutation,  alienation,  sale,  assignment,  encumbrance,  charge,  pledge  or assignment by operation of law; and any attempt, voluntary or involuntary, to effect such action shall be void and of no effect.
SECTION 9.BINDING AGREEMENT
This Agreement shall be binding upon the Company and inure to the benefit of the Company, the Related Companies and  their  respective  successors  and  permitted  assigns  (including,  without  limitation,  the  purchaser  of  all  or substantially all of the assets of the Company or any of the Related Companies).  This Agreement also shall be binding upon and inure to the benefit of the Executive and the Executive’s heirs, administrators and permitted assigns.  
SECTION 10. SEVERABILITYIf any provision of this Agreement shall be declared invalid or unenforceable, the remainder of this Agreement, or the application of such provision in circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each provision of this Agreement shall be valid and be enforceable to the fullest extent permitted by law.  If any provision contained in this Agreement shall be held to be excessively broad as to scope, activity or subject so as to be unenforceable at law, such provision shall be construed by limiting and reducing it so as to be enforceable to the extent compatible with the applicable law as it shall then appear.
SECTION 11. NOTICEAll notices or other communications which are required or permitted to be given to the parties under this Agreement shall be sufficient in all respects only if given in writing and delivered in person, by overnight courier, or by certified mail, postage prepaid, return receipt requested, to the receiving party and the current business or home address.  Notice shall be deemed given on the date of delivery, in the case of personal delivery, or on the delivery or refusal date, as specified on the return receipt, in the case of overnight courier or certified mail.
SECTION 12. WAIVERSThe failure of any Party to require the performance of any term or obligation of the Agreement, or the waiver by any Party of any breach of this Agreement, shall not prevent any subsequent enforcement of such term or obligation or be deemed a waiver of any subsequent breach.
SECTION 13. ENTIRE AGREEMENTThis Agreement constitutes the entire understanding of the Executive and the Company with respect to the Executive’s employment.    As  of  the  Effective  Date,  this  Agreement  supersedes  any  prior  agreement  or  arrangement  (whether written or oral) relative to the Executive’s employment with the Company or any of its predecessors.  No modification or waiver of any provisions of this Agreement shall be made unless made in writing and signed by the Executive and by such other person on behalf of the Company as the CEO may designate for such purpose.
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SECTION 14. GOVERNING LAWAny and all actions or controversies arising out of this Agreement, Executive’s employment with the Company or the termination hereof or thereof, including, without limitation, tort claims, shall be construed and enforced in accordance with the internal laws of the State of Florida without regard to the choice of law principles thereof.  
SECTION 15. ARBITRATIONExcept with respect to the Company’s and Executive’s right to seek injunctive or other equitable relief (including, without  limitation,  pursuant  to  Section  5  above)  or  claims  by  the  Executive  for  workers’  compensation  or unemployment  compensation,  any  dispute,  controversy  or  claim  based  upon,  arising  out  of  or  relating  to  the interpretation and performance of this Agreement, the Executive’s employment with the Company or any termination hereof or thereof or any matter relating to the foregoing shall be solely submitted to and finally settled by arbitration by a single arbitrator in accordance with the then-current rules of the American Arbitration Association (“AAA”), including, without limitation, claims for discrimination under any applicable federal, state or local law or regulation.  Any such arbitration shall be conducted in the State of Florida.  The single arbitrator shall be appointed from the AAA’s list of arbitrators by the mutual consent of the Parties or, in the absence of such consent, by application of any Party to the AAA. A decision of the arbitrator shall be final and binding upon the Parties. The Parties agree that this Section  15  shall  be  grounds  for  dismissal  of  any  court  action  commenced  by  either  Party  with  respect  to  this Agreement, other than (i) post-arbitration actions seeking to enforce an arbitration award and the Party against whom enforcement  is  sought  shall  bear  the  expenses,  including  attorneys’  fees,  of  enforcement,  and  (ii)  actions  seeking appropriate equitable or injunctive relief, including, without limitation, pursuant to Section 5 above.  The Company shall pay the pay the fees of the arbitrator and each Party shall be responsible for Executive’s own legal fees, costs of its experts and expenses of Executive’s witnesses. The arbitrator’s remedial authority shall equal the remedial power that a court with competent jurisdiction over the Parties and their dispute would have.  Any award rendered shall be a reasoned award in writing and shall be final, binding and conclusive (without the right to an appeal, unless such appeal is based on fraud by the other Party in connection with the arbitration process) upon the Parties and any judgment on such award may be enforced in any court having jurisdiction, unless otherwise provided by law.  The Company  and  Executive  acknowledge  that  it  is  the  intention  of  the  parties  that  this  Section  16  shall  apply  to  all disputes, controversies and claims, including, without limitation, any rights or claims the Executive may have under the Age Discrimination in Employment Act of 1967, the Americans with Disabilities Act, Title VII of the Civil Rights Act of 1964, the Equal Pay Act, and all other federal, state or local laws, rules or regulations relating to employment discrimination  or  otherwise  pertaining  to  this  Agreement,  Executive’s  employment  or  termination  thereof.  THE COMPANY AND EXECUTIVE KNOWINGLY AND VOLUNTARILY AGREE TO THIS ARBITRATION PROVISION  AND  ACKNOWLEDGE  THAT  ARBITRATION  SHALL  BE  INSTEAD  OF  ANY  CIVIL LITIGATION,  MEANING  THAT  EXECUTIVE  AND  THE  COMPANY  ARE  EACH  WAIVING  ANY RIGHTS TO A JURY TRIAL.  
SECTION 16. CAPTIONSThe captions set forth in this Agreement are for convenience only, and shall not be considered as part of this Agreement or as in any way limiting or amplifying the terms and provisions hereof
SECTION 17. 409A COMPLIANCE
a) This Agreement is intended to comply with the requirements of Section 409A of the Code (“Section 409A”) 
and regulations promulgated thereunder.  To the extent that any provision in this Agreement is ambiguous as to its compliance with Section 409A, the provision shall be read in such a manner so that all payments due under this Agreement shall comply with Section 409A.  For purposes of section 409A, each payment made under this Agreement shall be treated as a separate payment.  In no event may the Executive, directly or indirectly,  designate  the  calendar  year  of  payment.    Notwithstanding  anything  contained  herein  to  the contrary, the Executive shall not be considered to have terminated employment with Company for purposes of Section 4 hereof unless Executive would be considered to have incurred a “termination of employment” from the Company within the meaning of Treasury Regulation §1.409A-1(h)(1)(ii).
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b) All  reimbursements  provided  under  this  Agreement  shall  be  made  or  provided  in  accordance  with  the 
requirements of Section 409A, including, where applicable, the requirement that (i) any reimbursement is for expenses  incurred  during  the  Executive’s  lifetime  (or  during  a  shorter  period  of  time  specified  in  this Agreement), (ii) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year, (iii) the reimbursement of an eligible expense will be made on or before the last day of the calendar year following the year in which the expense is incurred, and (iv) the right to reimbursement is not subject to liquidation or exchange for another benefit.
c) The  Executive  acknowledges  that,  while  the  Parties  endeavor  to  have  the  Agreement  comply  with  the 
requirements of Section 409A, any tax liability incurred by the Executive under Section 409A is solely the responsibility of the Executive.
SECTION 18. LEGAL COUNSELThe Executive represents that the Company has previously recommended that the Executive engage counsel to assist Executive in reviewing this Agreement and all other matters relating to the Executive’s employment relationship with the Company.  The Executive acknowledges that, prior to executing this Agreement; the Executive has been given a reasonable opportunity to review the Agreement and to consult with counsel as to its content and is entering into this Agreement freely and voluntarily.  The Company and the Executive shall each bear their own costs and expenses in connection with the negotiation and execution of this Agreement.
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The Parties have signed, sealed and delivered this Employment Agreement as of the 7th day of February 2023.
VILLAGE FARMS, L.P.
By:  Village Farms of Delaware, L.L.C.
        General Partner
By:  Agro Power Development, Inc.         Managing Member
By: /s/ Michael A. DeGiglio_______     Michael A. DeGiglio, Chief Executive Officer
Executive:
/s/ Ann Gillin LefeverAnn Gillin Lefever
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EXHIBIT 31.1 
CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER 
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 
I, Michael A. DeGiglio, certify that: 
1.I have reviewed this Quarterly Report on Form 10-Q of Village Farms International, Inc. for the quarter ended March 31, 2023; 
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: 
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; 
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; 
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of, the end of the period covered by this report based on such evaluation; and 
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): 
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and 
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. 
 May 10, 2023 
   /s/ Michael A. DeGiglio 
 
   Name:  Michael A. DeGiglio 
Title:  Chief Executive Officer 
 
  (Principal Executive Officer) 
EXHIBIT 31.2
CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Stephen C. Ruffini, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Village Farms International, Inc. for the quarter ended March 31, 2023;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
May 10, 2023    /s/ Stephen C. Ruffini
 
   Name:  Stephen C. Ruffini
Title:  Chief Financial Officer
 
  (Principal Financial Officer)
EXHIBIT 32.1
CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Village Farms International, Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael A. DeGiglio, Principal Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
May 10, 2023  /s/ Michael A. DeGiglio  Name:   Michael A. DeGiglio  Title:   Chief Executive Officer 
  (Principal Executive Officer)
EXHIBIT 32.2
CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Village Farms International, Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Stephen C. Ruffini, Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
May 10, 2023  /s/ Stephen C. Ruffini  Name:
Stephen C. Ruffini
  Title:Chief Financial Officer
 (Principal Financial Officer)