PURE SUNFARMS CORP.

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 11.01 hereof). 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 9.02.

"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 Bankers' Acceptance or a BA Equivalent Loan, but for greater certainty does not include a Conversion or Rollover.

"Affiliate" is defined in the CBA Model Provisions.

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

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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.

"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 4.01(d); provided that (i) from and after the Closing Date until the Conversion Date the Applicable Margin for each Availment Option shall be based on pricing level 5 in the table below:


Pricing Level	Senior Funded Debt to EBITDA	Prime-Based Loans	Bankers' Acceptances / BA Equivalent Loans	Standby Fee as a percentage of Applicable Margin in respect of Bankers' Acceptances
1	< 1.00:1	1.250%	2.50%	0.50%
2	1.00:1 < 1.50:1	1.50%	2.75%	0.55%
3	1.50:1 < 2.00:1	1.75%	3.00%	0.60%
4	2.00:1 < 2.50: 1	2.00%	3.25%	0.65%
5	2.50:1	2.25%	3.50%	0.70%

"Approved Jurisdiction" means an Approved Medical Cannabis Jurisdiction or an Approved Non-Medical Cannabis Jurisdiction.

"Approved Medical Cannabis Jurisdiction" means a Medical Cannabis Jurisdiction (i) which is approved in writing by the Required Lenders in their discretion and (ii) if required by the Agent, 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. The Required Lenders may in their discretion from time to time (i) 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 (ii) 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.

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"Approved Non-Medical Cannabis Jurisdiction" means a Non-Medical Cannabis Jurisdiction

(i)which is approved in writing by the Required Lenders in their discretion and (ii) if required by the Agent, 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. The Required Lenders may in their discretion from time to time (i) 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 (ii) revoke the designation of any jurisdiction as an Approved Non-Medical Cannabis Jurisdiction by written notice to the Borrower if such jurisdiction is no longer a Non-Medical Cannabis Jurisdiction. Canada is an Approved Non-Medical Cannabis Jurisdiction as at the date of this Agreement. Notwithstanding the foregoing, the United States shall not be designated an Approved Non-Medical Cannabis Jurisdiction except with the written consent of all Lenders in their discretion.

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

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

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

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

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

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

"BMO" means Bank of Montreal and its successors and permitted assigns.

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

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

"Canadian Dollars" or "CON$" means the lawful money of Canada.

"Cannabis" has the meaning given to the term cannabis under the Cannabis Act.

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

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

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

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

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

"Cash Collateral" is defined in Section 7.04.

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

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

"COOR 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 "Reuters Screen CDOR Page" (as defined in the International Swap Dealer Association, Inc. definitions, as modified and amended from time to time) as of 10:00 a.m. on such day and, if such day is not a Business Day, then on the immediately preceding Business Day (as adjusted by the Agent after_ 10:00 a.m. to reflect any error in a posted rate of interest or in the posted average annual rate of interest with notice of such adjustment in reasonable detail evidencing the basis for such determination being concurrently provided to the Borrower); provided that if such rates are not available on the Reuters Screen CDOR Page on any particular day, then the CDOR Rate on that day shall be the average of the rates applicable to Canadian Dollar bankers' acceptances for the relevant period quoted for customers in Canada by the Agent as of 10:00 a.m. on such day; or if such day is not a Business Day, then on the immediately preceding Business Day; and provided further that the COOR Rate shall not be less than zero.

"Closing Date" means the date on which the first Advance is made hereunder.

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

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

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

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

"Control" is defined in the CBA Model Provisions.

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"Conversion Date" means the earlier of the following dates: (i) the end of the second complete Fiscal Quarter following the commencement of Cannabis harvesting operations in all four quadrants the Property, and (ii) June 30, 2019; or such other date as may be mutually agreed among the Agent, the Lenders and the Borrower; provided that no Default or Event of Default shall have occurred and be continuing and the Borrower shall be in compliance with all terms and conditions herein, including all financial covenants which will apply from and after such date, and the Borrower shall have provided a certificate to the Agent and the Lenders confirming such compliance.

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

"Credit Parties" means the Companies and, for so long as the Emerald Guarantee and the Village Guarantee remain outstanding, Emerald and Village; and "Credit Party" means any one of them as the context requires.

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

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

"Default" is defined in the CBA Model Provisions.

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

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

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

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

(a)

Interest, fees and expenses paid in connection with Permitted Funded Debt;

(b)

income and capital taxes;

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(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 and the acquisition of the Property to a limit of $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; and

(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.

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

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

"Emerald Guarantee" is defined in Section 7.02(a).

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

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

"Event of Default" is defined in Section 9.01.

"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

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(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 a Senior Officer of the Borrower to the Agent in the form of Exhibit "H".

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

"Facility A" is defined in Section 2.01.

"Facility A Limit" means Twenty Million Dollars ($20,000,000).

"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.

"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).

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

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

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

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

"Hedge Transaction" means an Interest Rate Hedge Transaction or a Currency Hedge Transaction.

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

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

(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

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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 Facility A.

"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) prepared in accordance with GAAP except that such financial statements shall not include any notes thereto and shall be subject to normal year-end adjustments.

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

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

"IP Ancillary Rights" means, with respect to an item of Intellectual Property all foreign counterparts to, and all divisionals, reversions, continuations, continuations-in-part, reissues, re examinations, renewals and extensions of, such Intellectual Property and all income, royalties, proceeds and liabilities at any time due or payable or asserted under or with respect to any of the foregoing or otherwise with respect to such Intellectual Property, including all rights to xxx 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.

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

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

"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.

"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.

"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 3.02.

"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 5.01(n) 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 5.01(h) hereto and each other licence, permit, approval, registration or qualification granted to or held by any Company which if

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terminated would result, or would have a reasonable likelihood of resulting, in a Default, Event of Default or Material Adverse Change.

"Maturity Date" means the date which is three (3) years after the date of this Agreement.

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

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

"Monthly Information Certificate" means a certificate delivered by the Borrower to the Agent in the form of Exhibit "F".

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

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

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

"Non-Medical Cannabis-Related Activities" means Cannabis-Related Activities other than Medical Cannabis-Related Activities.

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

"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.

"Offtake Agreement" means an agreement between the Borrower and another Person whereby such Person agrees that it will purchase a specified amount (or percentage) of Cannabis produced by the Borrower in a specified period.

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"Outstanding Principal Amount" means, at any time, the aggregate of the Advances under Facility A (or a 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, the principal amount thereof; (ii) in the case of Bankers' Acceptances and BA Equivalent Notes, 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.

"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

(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., starers', repairers', carriers' and other similar Liens granted in the ordinary course of business;

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(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;

U) 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, 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;

(I)

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;

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{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;

(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".

"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 Dollars ($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.

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

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

"Proceeds of Realization" means all amounts received by the Agent or any Lender in connection with: (i) any realization in respect of the Security or any portion thereof, whether occurring as a result of enforcement or otherwise, (ii) any sale, expropriation, loss or damage or other disposition of the Collateral or any portion thereof (except any such disposition permitted pursuant to Section 6.02(d), and also excluding any insurance proceeds which are released to the Companies in accordance with Section 7.10), and (iii) any other amount paid by or recovered from any Credit Party, including as a result of its dissolution, liquidation, bankruptcy or winding-up or any other distribution of its assets to creditors; together with all other amounts which are expressly deemed to constitute "Proceeds of Realization" in this Agreement.

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

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

"Property" means the Real Property municipally known as 0000 00xx Xxxxxx, Xxxxx, XX, and legally described as:

PIO: 000-000-000

THE SOUTH HALF OF THE NORTH EAST QUARTER OF SECTION 00 XXXXXXXX 0 XXX XXXXXXXXXXX XXXXXXXX XXXXXX: 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.

"Proportionate Share" in respect of any Lender means:

(a)

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

(b)

subject to Section 10.03, in the context of any Lender's entitlement to receive payments of principal, interest or fees under Facility A, the Outstanding Principal Amount due to such Lender under Facility A divided by the aggregate amount of the Outstanding Principal Amount due to all Lenders under Facility A; and

(c)

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

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

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

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

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

"Repayment" means a repayment by the Borrower on account of the Outstanding Principal Amount

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

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

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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.

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

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

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

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

"Security" means the Guarantees, security agreements, mortgages, debentures and other documents required to be provided pursuant to Article VI 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 3.03.

"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

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August 27, 2018, an Amendment Agreement No. 2 dated October 1, 2018 and an Amendment

Agreement No. 3 dated November 7, 2018.

"Shareholder Loans" means the loans advanced by the Shareholders to the Borrower from time to time on or before the Closing Date in the aggregate principal amount of not less than Twenty Six Million Dollars ($26,000,000), 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 Emerald Canada and Village; and "Shareholder'' means either of them as the context requires.

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

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

"Specific Permitted Liens" means the Liens described in Schedule 5.01(i), as such Liens may be amended or replaced from time to time on substantially similar terms and conditions provided that the principal amount of the indebtedness secured thereby is not increased.

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

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

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

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"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.

"Tangible Net Worth" means the shareholders' equity of the Borrower on a consolidated basis determined in accordance with GMP (specifically including for greater certainty any accumulated retained earnings and contributed surplus), plus or minus any unrealized foreign currency gains or losses, plus any Deeply Subordinated Debt, and less any value attributed to assets considered by the Lenders to be intangible assets such as, but not limited to, goodwill, long-term

Investments, organization expenses, Intellectual Property, licenses, deferred costs, and deferred charges.

"Taxes" is defined in the CSA Model Provisions.

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

"Trademarks" means all right, title and interest (and all related IP Ancillary Rights) in trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, logos and other source or business identifiers and, in each case, all

goodwill associated therewith, all registrations and recordations thereof and all applications in connection therewith.

"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, a Permitted Purchase-Money Security Interest, Subordinated Debt, insurance proceeds, or proceeds from an asset disposition.

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

"Village Guarantee" is defined in Section 7.02(b).

"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 GMP, 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 GMP 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 GMP in effect on the date of such determination. Notwithstanding the foregoing, if after the date of this Agreement there is a change in GMP (referred to herein as an "accounting change"), and if any financial ratio or amount determined pursuant to Section

6.03 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 6.03 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 GMP in effect on the date of such financial statements

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(after giving effect to such accounting change), and the Borrower shall concurrently deliver to the Agent a reconciliation in form and substance satisfactory to the Lenders showing all adjustments made to such financial statements in order to determine compliance with such financial covenants on the basis of GAAP in effect prior to such accounting change.

1.03

Currency References

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

1.04

Extended Meanings

Except to the extent otherwise expressly provided herein:

(a)

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

(b)

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

(c)

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

(d)

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

(e)

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

1.05

Exhibits and Schedules

The following Exhibits and Schedules are attached to this Agreement and incorporated herein by reference (but with respect to Exhibit "J", subject to Section 11.01 hereof):

Exhibits

"A"Lenders and Lenders' Commitments "B"Draw Request

"C"Rollover Notice

"D"Substitution Notice

"E"Repayment Notice

"F"Monthly Information Certificate

"G"Compliance Certificate

"H"Excess Cash Flow Certificate

"I"Form of BA Equivalent Note

"J"CBA Model Provisions

Schedules

5.01(b)

5.01(h)

5.01(i)

Credit Parties Information Material Permits

- Specific Permitted Liens

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5.01(1)

5.01(n)

5.01(0)

5.01(p)

5.01(q)

5.01(r)

Intellectual Property Material Agreements Labour Agreements Environmental Matters Litigation

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

2.02

Purpose; Non-Revolving Nature; Advances

(a)

Facility A is a non-revolving facility, available in two Advances, and any Repayment under Facility A may not be reborrowed. The final Advance under Facility A shall be made by no later than March 31, 2019, after which date any undrawn amount under Facility A shall be cancelled.

(b)

Subject to the satisfaction of the Conditions Precedent in Article VIII, Advances under Facility A shall be used to assist in re-financing the Property and financing the Project.

2.03

Repayment

(a)

No Repayments under Facility A are required prior to the Conversion Date. On the last Business Day of the Fiscal Quarter in which the Conversion Date occurs, and on the last Business Day of each Fiscal Quarter thereafter, the Borrower shall make a Repayment under Facility A in an amount equal to 2.50% of the Outstanding Principal Amount under Facility A immediately following the said final Advance under Facility A; and the remaining balance of the Outstanding Principal Amount under Facility A shall be due and payable on the Maturity Date.

(b)

In addition to all other Repayments required under this Section 2.03 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 0.50:1.00, the first such Repayment to be made in respect of the Fiscal Year ending December 31, 2019. 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.

(c)

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 7.10.

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(ii)

If any Company receives net proceeds from an Equity Issuance or a transaction involving the creation of Subordinated Debt, within five (5) days after receipt of such net proceeds the Borrower shall make a Repayment in an amount equal to the portion of 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 Bankers' Acceptances, 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 Bankers' Acceptances.

(iii)

If any Company receives net proceeds equal to or greater than One Million Dollars ($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.

(d)

Each Repayment under paragraphs (b) and (c) above shall be applied against the Borrower's obligation to make the remaining scheduled Repayments under Facility A (including the final Repayment of the Outstanding Principal Amount on the Maturity Date) in reverse chronological order.

2.04

Availment Options

Subject to the restrictions contained in this Agreement (and in particular, Sections 4.02 and 4.03), 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)

Bankers' Acceptances from BA Lenders with a maturity between 28 and 182 days (inclusive), subject to availability; or

(c)

BA Equivalent Loans from Non-BA Lenders with a maturity between 28 and 182 days (inclusive), subject to availability.

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

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(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 each Bankers' Acceptance, a stamping fee equal to the Applicable Margin, multiplied by the face amount of the Bankers' Acceptance with the product thereof further multiplied by the number of days to maturity of the Bankers' Acceptance and divided by 365, payable at the time of acceptance;

(c)

in respect of each BA Equivalent Note, a stamping fee equal to the Applicable Margin multiplied by the face amount of the BA Equivalent Note with the product thereof further multiplied by the number of days to maturity of the BA Equivalent Note and divided by 365, payable at the time of acceptance; and

(d)

a standby fee with respect to the unused portion of Facility A, calculated on a daily basis as being the difference between (i) the Facility A Limit (less the Commitments of any Non-Funding Lenders under Facility A) and (ii) the Outstanding Principal Amount under Facility A, 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. For greater certainty, no standby fee shall apply after the earlier of March 31, 2019 and the date of the final Advance hereunder.

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.

2.06

Interest Rate Hedge Transactions

Within ninety (90) days after the final Advance under Facility A 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 Outstanding Principal Amount under Facility A after such Advance.

2.07

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 Facility A (except Bankers' Acceptances and BA Equivalent Loans prior to the maturity thereof) in a minimum amount of One Hundred Thousand Dollars ($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 does not exceed the Outstanding Principal Amount under Facility A at such time. Any such voluntary Repayment shall be applied against the Borrower's obligations to make scheduled Repayments under Facility A (including the final Repayment of the Outstanding Principal Amount on the Maturity Date) in reverse chronological order; and the Facility A Limit shall be automatically and permanently reduced by any such voluntary Repayment. The Agent shall promptly remit to each Lender its Proportionate Share of any such voluntary Repayment. For greater certainty however, Bankers' Acceptances and BA Equivalent Loans may not be repaid prior to the maturity thereof.

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ARTICLE Ill - ANCILLARY CREDIT PRODUCTS

3.01

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 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 Hedge Transactions pursuant to such arrangements as may be agreed between BMO and the respective Lenders. 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.

(b)

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 Outstanding Principal Amount under Facility A 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 Outstanding Principal Amount under Facility A at such time.

(c)

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.

(d)

The term of each Interest Rate Hedge Transaction shall expire not later than the Maturity Date.

(e)

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).

(f)

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.

(g)

The Borrower will not enter into or be a party to any Hedge Transactions with any Persons other than the Lenders.

(h)

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 Facility A 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.

3.02

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 card agreements and other documents customarily required by BMO in connection with

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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.

3.03

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 IV - GENERAL CONDITIONS

4.01

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 Facility A is not the end of a month, all accrued and unpaid interest in respect of Facility A 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 COOR 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 Law to which such compensation is subject, then such amount or rate of

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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; and

(iii)

no readjustment shall be made in respect of any Bankers' Acceptance or BA Equivalent Loan which is outstanding on the effective date, and the said revised Applicable Margin all apply to all Bankers' Acceptances and BA Equivalent Loans issued or made on or after the effective date.

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 6.04, 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.

4.02

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 Bankers' Acceptance or a BA Equivalent Note; and

(ii)

notice is required for each voluntary Repayment under Facility A in accordance with Section 2.07, as applicable.

(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 12.08.

(c)

If notice is not provided as contemplated herein with respect to the maturity of any Bankers' Acceptance or BA Equivalent Loan, the Agent may in its discretion convert such Bankers' Acceptance or BA Equivalent 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.

4.03

Minimum Amounts, Multiples and Procedures re Draws, Substitutions and Repayments

(a)

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.

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(b)

Each request by the Borrower for an Advance by way of Bankers' Acceptances and BA Equivalent Notes shall be for an aggregate face amount of Bankers' Acceptances and BA Equivalent Notes of not less than $5,000,000 and in a multiple of $100,000, and in such amount as will result in the face amount of each Bankers' Acceptance or BA Equivalent Note issued by a Lender being in a multiple of $1,000.

(c)

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.

(d)

Each Advance shall be made by the applicable Lenders to the Agent at its address referred to in Section 12.08 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.

(e)

The Borrower agrees to deliver in favour of each Lender such other agreements and documentation as such Lender may reasonably require (not inconsistent with this Agreement) in respect of such Lender's requirements for the acceptance of Bankers' Acceptances or the issuance of BA Equivalent Notes.

(f)

All payments of principal, interest and other amounts made by the Borrower to the Agent in respect of the Outstanding Principal Amount shall be paid by the Agent to the respective Lenders, each in accordance with its Proportionate Share. For greater certainty, however, stamping fees in respect of Bankers' Acceptances and BA Equivalent Notes shall be received and retained by the respective Lenders which issued or accepted such Bankers' Acceptances and BA Equivalent Notes.

4.04

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 12.08 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.

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4.05

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.

4.06

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 Facility A exceeds the maximum amount of Facility A), 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 standby fee applicable to Facility A, 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.

4.07

Commitment to Purchase Bankers' Acceptances and BA Equivalent Notes

(a)

In connection with the issuance of each Bankers' Acceptance or BA Equivalent Note, the amount payable by the purchaser thereof to the Borrower shall be determined in accordance with the following formula:

1 + (D x T/365)

where:

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

means the number of days to maturity of such Bankers' Acceptance or BA Equivalent Note,

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

(b)

Each BA Lender which is a bank listed in Schedule I of the Bank Act (Canada) agrees to purchase those Bankers' Acceptances which it has accepted at a discount from the face amount thereof equal to the COOR Rate for the relevant period in effect on the issuance date thereof; provided however that if BMO is the only BA Lender under Facility A, the discount rate shall be the applicable discount rate established by BMO on the issuance date thereof.

(c)

Each BA Lender which is a bank listed in Schedule II or Schedule Ill of the Bank Act (Canada) agrees to purchase those Bankers' Acceptances which it has accepted at a discount from the face amount thereof equal to the COOR Rate for the relevant period in effect on the issuance date thereof plus a premium determined by such BA Lender not in excess of one-tenth of one percent (0.10%) per annum.

(d)

Each Non-BA Lender agrees to purchase BA Equivalent Notes issued by it hereunder at a discount from the face amount thereof equal to the COOR Rate for the relevant period in effect on the issuance date thereof.

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(e)

The discount applicable to each Bankers' Acceptances and BA Equivalent Note shall be determined on the basis of a year of 365 days.

4.08

Bankers' Acceptances

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

Payment of Bankers' Acceptances

(a)

The Borrower agrees to provide for each Bankers' Acceptance by payment of the face amount thereof to the Agent on behalf of the BA Lender on the maturity of the Bankers' Acceptance or, prior to such maturity, on the Acceleration Date; and the Agent shall remit the said amount to such BA Lender and such BA Lender shall in turn remit such amount to the holder of the Bankers' Acceptance. If the Borrower fails to provide for the payment of the Bankers' Acceptance accordingly, any amount not so paid shall be immediately payable by the Borrower to the Agent on behalf of the BA Lender together with interest on such amount calculated daily and payable monthly at the rate and in the manner applicable to Prime-Based Loans. The Borrower agrees not to claim any days of grace for the payment at maturity of any Bankers' Acceptance and agrees to indemnify and save harmless the BA Lender in connection with all payments made by the BA Lender (or by the Agent on its behalf) pursuant to Bankers' Acceptances accepted by the BA Lender, together with all reasonable costs and expenses incurred by the BA Lender in this regard. The Borrower hereby waives any defences to payment which might otherwise exist if for any reason a Bankers' Acceptance is held by the BA Lender for its own account at maturity.

Availability of Bankers' Acceptances

(b)

If at any time and from time to time the Agent determines that there no longer exists a market for Bankers' Acceptances for the term requested by the Borrower, or at all, the Agent shall so advise the Borrower, and in such event the BA Lenders shall not be obliged to accept and the Borrower shall not be entitled to issue Bankers' Acceptances.

Power of Attorney

(c)

The Borrower hereby appoints each BA Lender as its true and lawful attorney to complete and issue Bankers' Acceptances on behalf of the Borrower in accordance with written (including facsimile) transmitted instructions provided by the Borrower to the Agent on behalf of such BA Lender, and the Borrower hereby ratifies all that its said attorney may do by virtue thereof except anything done that constitutes negligence or wilful misconduct by the BA Lender. The Borrower agrees to indemnify and hold harmless the Agent and the BA Lenders and their respective directors, officers and employees from and against any charges, complaints, costs, damages, expenses, losses or liabilities of any kind or nature which they may incur, sustain or suffer, arising from or by reason of acting, or failing to act, as the case may be, in reliance upon this power of attorney, except to the extent caused by the negligence or wilful misconduct of the Agent or the BA Lender or their respective directors, officers and employees. The Borrower hereby agrees that each Bankers' Acceptance completed and issued and accepted in accordance with this Section by a BA Lender on behalf of the Borrower is a valid, binding and negotiable instrument of the Borrower as drawer and endorser. The Borrower agrees that each BA Lender's accounts and records will constitute prima facie evidence of the execution and delivery by the Borrower of Bankers' Acceptances. This power of attorney shall continue in force until the earlier of (i) delivery of written notice of revocation by the Borrower to the Agent on behalf of the BA Lender at the Agent's address provided in Section 12.08, and (ii) the termination of this Agreement.

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4.09

BA Equivalent Notes

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

Payment of BA-Equivalent Notes

(a)

The Borrower agrees to provide for each BA Equivalent Note by payment of the face amount thereof to the Agent on behalf of the Non-BA Lender on the maturity of the BA Equivalent Note or, prior to such maturity, on the Acceleration Date; and the Agent shall remit the said amount to such Non-BA Lender and such Non-BA Lender shall in turn remit such amount to the holder of the BA Equivalent Note. If the Borrower fails to provide for the payment of the BA Equivalent Note accordingly, any amount not so paid shall be immediately payable by the Borrower to the Agent on behalf of the Non-BA Lender together with interest on such amount calculated daily and payable monthly at the rate and in the manner applicable to Prime-Based Loans. The Borrower agrees not to claim any days of grace for the payment at maturity of any BA Equivalent Note and agrees to indemnify and save harmless the Non-BA Lender in connection with all payments made by the Non-BA Lender (or by the Agent on its behalf) pursuant to BA Equivalent Notes accepted by the Non-BA Lender, together with all reasonable costs and expenses incurred by the Non-BA Lender in this regard. The Borrower hereby waives any defences to payment which might otherwise exist if for any reason a BA Equivalent Note is held by the Non-BA Lender for its own account at maturity.

Availability of BA Equivalent Loans

(b)

The Non-BA Lender shall have no obligation to make BA Equivalent Loans during any period in which the BA Lenders' obligation to issue Bankers' Acceptances is suspended pursuant to section 3.5 of the CBA Model Provisions.

Power of Attorney

(c)

The Borrower hereby appoints the Non-BA Lender as its true and lawful attorney to complete BA Equivalent Notes on behalf of the Borrower in accordance with written (including facsimile) transmitted instructions delivered by the Borrower to the Agent, and the Borrower hereby ratifies all that its said attorney may do by virtue thereof except anything done that constitutes negligence or wilful misconduct by the Non-BA Lender. The Borrower agrees to indemnify and hold harmless the Agent and the Non-BA Lender and their respective directors, officers and employees from and against any charges, complaints, costs, damages, expenses, losses or liabilities of any kind or nature which they may incur, sustain or suffer, arising from or by reason of acting, or failing to act, as the case may be, in reliance upon this power of attorney except to the extent caused by the negligence or wilful misconduct of the Agent or the Non-BA Lender or their respective directors, officers and employees. The Borrower hereby agrees that each BA Equivalent Note completed by the Non-BA Lender on behalf of the Borrower is a valid, binding and negotiable instrument of the Borrower as drawer and endorser. The Borrower agrees

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that the Non-BA Lender's accounts and records will constitute prima facie evidence of the execution and delivery by the Borrower of BA Equivalent Notes. This power of attorney shall continue in force until the earlier of (i) delivery of written notice of revocation by the Borrower to the Agent on behalf of the Non-BA Lender at the Agent's address provided in Section 12.08, and (ii) the termination of this Agreement.

4.10

No Repayment of Certain Availment Options

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

4.11

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.

4.12

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 Company, or any authorized signatories of any Company, on behalf of such Lender or to confirm the completeness or accuracy of any information that the Agent obtains from any Company, or any such authorized signatory, in doing so.

4.13

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

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government on any list set out in the United Nations AI-Qaida and Taliban Regulations, the Regulations Implementing the United Nations Resolutions on the Suppression of Terrorism or the Criminal Code (collectively, the "Terrorist Lists") with which a Canadian Person cannot deal with or otherwise engage in business transactions, (iii) is a Person who is otherwise the target of Canadian economic sanctions laws or (iv) is controlled by (including by virtue of such Person being a director or owning voting shares or interests), or acts, directly or indirectly, for or on behalf of, any Person or entity on a Terrorist List or a foreign government that is the target of Canadian economic sanctions prohibitions such that the entry into, or performance under, this Agreement or any other Loan Document would be prohibited under Canadian Law.

ARTICLE V - REPRESENTATIONS AND WARRANTIES

5.01

Borrower Representations and Warranties

Notwithstanding that this Agreement has been executed and delivered by the parties hereto immediately prior to acquisition of the Property by the Borrower, the representations and warranties set out herein are hereby deemed to have been made as if such acquisition had been completed. 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 5.01(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 5.01(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, except pursuant to the Shareholders Agreement.

(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, except pursuant to the provisions of the Shareholders Agreement, which provisions have been complied with.

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(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 is in compliance in all material respects with all Applicable Laws of each jurisdiction in which it owns assets or carries on business and is duly licensed, registered and qualified to do business and is 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 Schedule 5.01(h) is a true and complete list of all Material Permits as at the 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 5.01(i) attached hereto contains a true and complete list of all Specific Permitted Liens as at the Closing Date.

0) Property - the Borrower is the registered and beneficial owner of the Property free and clear of any and all Liens except for Permitted Liens.

(k)

Leased Properties - No Company is a tenant under any lease of Real Property.

(I)

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 5.01(I) is a list of all such registered material Intellectual Property held by the Companies as at the 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.

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(m)

(n)

(o)

{p)

Insurance - The Companies have obtained insurance which satisfies all requirements in Section 6.01(h) herein.

Material Agreements - Each Material Agreement to which any Company is a party is in good standing and in full force and effect; and none of the Companies, or, to the best of the Borrower's knowledge, any of the other parties thereto, is in material breach of any of the terms or conditions contained therein. Attached hereto as Schedule 5.01(n) is a true and complete list of all Material Agreements to which the Companies are party as at the Closing Date.

Labour Agreements - Schedule 5.01(0) 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 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.

Environmental Laws - Except to the extent disclosed in Schedule 5.01(p) 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 the 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 the 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 the 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 the 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 the Property, the atmosphere, or any watercourse or body

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PURE SUNFARMS CORP.