Canada Jetlines Operations Ltd. — Capital/Financing Update 2024

Jun 26, 2024

LOAN AGREEMENT

THIS LOAN AGREEMENT (this “ Agreement ”) is dated as of the 25[th] day of June, 2024.

BETWEEN:

CANADA JETLINES OPERATIONS LTD. , a corporation having an address at 6299 Airport Road, Suite 601 Mississauga, Ontario, L4V 1N3 (email: [Redacted: Email address] )

(the “ Borrower ”)

AND:

12313936 CANADA INC., a corporation having an address at 225-2980 Drew Road, Mississauga ON L4T 0A7 (email: [Redacted: Email address] )

(the “ Lender ”)

WHEREAS:

A. The Lender has agreed to make a loan in the amount of $2,000,000 (two million dollars) (the “ Loan ”) to the Borrower.

NOW THEREFORE THIS AGREEMENT WITNESSES that for and in consideration of the terms and conditions set out herein and other good and valuable consideration, the receipt of which is hereby acknowledged, the Borrower and the Lender (each, a “ Party ”, and together, the “ Parties ”) agree as follows:

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DEFINITIONS

1.1 Definitions.

In this Agreement, the following words and phrases will have the meanings set out below unless the Parties or the context otherwise require(s):

• (a) “ Board ” means the Board of Directors of the Borrower;

• (b) “ Business Day ” means a day other than a Saturday, Sunday or other day on which commercial banks in Toronto, Ontario are authorized or required by law to close;

• (c) “ Event of Default ” has the meaning ascribed thereto in Section 6.1;

• (d) “ Loan Documents ” means this Agreement and any other documents attached hereto or in connection herewith;

• (e) “ Maturity Date ” has the meaning ascribed thereto in Section 2.2(b);

• (f) “ Obligations ” means the principal amount of the Loan and all accrued interest;

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• (g) “ Person ” or “ Persons ” means and includes any individual, sole proprietorship, corporation, partnership, bank, joint venture, trust, unincorporated association, association, institution, entity or government (whether national, federal, provincial, state, municipal, city, county or otherwise and including any instrumentality, division, agency, body or department thereof);

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LOAN

2.1 Loan

Subject to the other provisions of this Agreement, the Lender agrees to make the Loan to the Borrower. The Lender shall make the Loan to the Borrower by way of issuing a certified cheque to the Borrower, or by wire transfer to the Borrower based upon instructions set out in Schedule “A”. The Loan will be advanced in a tranches of no less than $200,000, for a total aggregate principal amount of $2,000,000. The first tranche of the Loan in a minimum amount of $200,000 must be advanced by the Lender to the Borrower on the first Business Day after receipt of Exchange approval (the “ Closing Date ”). The balance of the principal amount of the Loan must be advanced by the Lender to the Borrower on or before July 2, 2024.

The closing on the Closing Date is conditional on the Borrower having obtained all necessary approvals and consents for the Loan, including without limitation the conditional approval of the Cboe Canada Exchange Inc. (the “ Exchange ”), approval of the board of directors of the Borrower and satisfaction of the conditions set forth in Section 3.1.

The Loan will be a direct, subordinated, secured obligation of the Borrower and will rank prior to all unsecured indebtedness of the Borrower. The Loan will not restrict the Borrower or its subsidiaries from incurring additional indebtedness or from mortgaging, pledging or charging its properties to secure any indebtedness or liabilities. Without limitation, and for greater certainty, nothing in this Section 2.1 shall be interpreted as to restrict the Borrower from incurring any senior indebtedness to which the Loan is subordinated, or any secured indebtedness ranking pari passu with the Loan.

2.2 Repayment

Subject to other terms and conditions of this Agreement,

• (a) the principal balance of the Loan and interest accrued thereon may be repaid, in whole or in part, by the Borrower at any time and from time to time, without bonus or penalty, provided that any amounts repaid may not be reborrowed and any repayment hereunder shall be made together with accrued interest on the amount repaid; and

• (b) to the extent not already repaid, the outstanding balance of all advances of the Loan and interest accrued thereon shall be immediately due and payable on October 31, 2024 (the “ Maturity Date ”).

2.3 Interest

The outstanding principal balance of the Loan (based on actual advances made) will bear interest at a rate of 12.00% per annum calculated annually based on the number of days actually elapsed in a 365-day year, and will be payable monthly on the last day of each month.

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2.4 Place and Manner of Payments

Except as otherwise specifically provided herein, all payments hereunder shall be made to the Lender in Canadian dollars in immediately available funds, without offset, deduction, counterclaim or withholding of any kind, not later than 5:00 p.m. (Toronto time) on the applicable payment date and the Maturity Date. Whenever any payment or other obligation hereunder will be due on a day other than a Business Day, such payment will be made on the next succeeding Business Day.

2.5 No Deductions or Withholdings

All sums payable by the Borrower under this Agreement or any other Loan Documents shall be paid in full, free and clear of any tax or other deductions or withholdings of any nature. If the Borrower or any other person is required by any law or regulation to make any deduction or withholding (on account of tax or otherwise) from any payment for the account of the Lender, the Borrower shall, together with such payment, pay such additional amount as will ensure that the Lender receives (free and clear of any tax or other deductions or withholdings) the full amount which it would have received if no such deduction or withholding had been required.

2.6 Criminal Code Compliance

In this Section 2.6, the terms “interest”, “criminal rate” and “credit advanced” have the meanings ascribed to them in s. 347 of the Criminal Code (Canada) as amended from time to time. The Borrower and the Lender hereby acknowledge and agree that, if any interest on the credit advanced by the Lender under this Agreement is determined in excess of that permitted under applicable laws and regulations, both Parties shall, to the extent permitted by applicable law, negotiate in good faith and agree on an alternative arrangement to give the Lender the full benefit as contemplated hereunder.

2.7 Share Conversion

The Borrower and Lender may agree, prior to the repayment of the Loan, that the principal or accrued interest amount of the Loan may be converted into common shares of the Borrower. Provided that the terms of any such share conversion shall be subject to the mutual agreement of the Borrower and Lender on pricing and conversion terms, and subject to the rules and policies of the Exchange.

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ADDITIONAL CONDITIONS

3.1 Conditions Precedent

As a conditions precedent to the advance of the Loan:

• (a) The Borrower shall have executed and delivered an amending agreement (the “ Jetstream Amending Agreement ”) deleting Section 2.4 from the Subscription Agreement, as amended, made between the Borrower, as the issuer, and Jetstream Aviation Inc., as the subscriber, which was originally signed and accepted on September 28, 2023.

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REPRESENTATIONS AND WARRANTIES OF THE BORROWER

4.1 General

The Borrower represents and warrants to and for the benefit of the Lender, that:

• (a) the Borrower is a corporation duly incorporated, validly existing and in good standing under the laws of its respective jurisdiction of incorporation, and has full power, authority and legal right to own its property and assets and to carry on its business and to enter into and engage in the transactions contemplated by the Loan Documents to which it is a party;

• (b) the execution and delivery of any documents by the Borrower, and the performance of his obligations hereunder and thereunder, have been duly authorized and will not cause a breach of, or constitute a default under, any agreement or instrument to which the Borrower is a party, or any laws applicable to the Borrower;

• (c) this Agreement and the other Loan Documents have been duly executed and delivered by the Borrower, and constitutes a legal, valid and binding obligations of the Borrower enforceable in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law;

• (d) all approvals required from any other Persons in connection with the execution, validity and performance of the Loan Documents have been obtained by the Borrower and are in full force and effect, and there has been no default under the conditions of any of the same;

• (e) no Event of Default and no event which, with the giving of notice or lapse of time or both would become an Event of Default, has occurred or is continuing; and

• (f) this Agreement and the other Loan Documents have been duly executed and delivered by the Borrower, and constitute legal, valid and binding obligations of the Borrower, enforceable in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

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COVENANTS

5.1 Positive Covenants of the Borrower

The Borrower covenants and agrees with the Lender that, so long as the Loan or any part thereof shall be outstanding, the Borrower shall:

• (a) pay the principal sum of the Loan and accrued interest thereon required to be paid to the Lender pursuant to this Agreement in the manner set forth herein;

• (b) do all things necessary to preserve, renew and keep in full force and effect its legal

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existence and any and all rights, licenses, permits, privileges and franchises material to the conduct of its business;

• (c) keep insured with financially sound and reputable insurance companies all of its property, in amounts and against losses, including property damage and public liability, to the extent that such property is usually insured by businesses comparable to its business;

• (d) keep full, true and correct books of record and account of all dealings and transactions in relation to its business and activities;

• (e)

• provide the Lender with immediate notice of any Event of Default;

• (f) comply with all applicable laws and regulations relating to the Borrower and its business operations;

• (g) cure promptly any defects in the execution and delivery of the Loan Documents;

• (h) permit the Lender and its legal counsel, upon receipt of reasonable advance notice during normal business hours, reasonable access to such information and copies of such documents relating to the business, affairs and assets of the Borrower;

• (i) permit Rajdeep Kaur Singh to act as an observer (the “ Observer ”) to attend meetings of the Board (“ Board Meetings ”), provided that the Observer has executed in favour of the Borrower a confidentiality agreement in a form acceptable to the Borrower, reviewed and signed a certification regarding the Borrower’s corporate governance policies and completed customary governance training administered by the Borrower’s legal counsel. The Observer shall have (i) the right to attend all Board Meetings as an observer, and (ii) the right to receive advance notice of each Board Meeting, including such meeting’s time and place, at the same time and in the same manner as such notice is provided to the members of the Board, provided that for greater certainty the Observer will not have any voting rights and the Observer shall not be entitled to attend in-camera sessions that are limited to independent members of the Board only or proceedings related to matters where the Observer may have a conflict of interest. Upon the request of the Observer, at any meeting the Observer is entitled to attend, the Observer will be entitled to participate in Board Meetings by telephone, video conference or any other similar means of audio or audio-visual communication; and

• (j) use the proceeds of the Loan solely to (i) repay the remaining principal balance of the loan due to Square Financial Investment Corporation pursuant to the Loan Agreement dated May 10, 2024; and (ii) for the purpose of funding the Borrower’s normal course business operations, including paying the amounts the Borrower owes to its vendors in the normal course of carrying on the Borrower’s business operations.

5.2 Negative Covenants of the Borrower

The Borrower covenants and agrees with the Lender that, so long as the Loan or any part thereof shall be outstanding, the Borrower shall not:

• (a) merge into or amalgamate or consolidate with any other Person, permit any other Person to merge into or amalgamate or consolidate with it, or liquidate or dissolve;

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• (b) purchase or redeem any of its issued shares or reduce its share capital or make a distribution of assets or other capital distribution to its shareholders or make a repayment in respect of any loans or other indebtedness owing to any of its shareholders with the proceeds of the Loan;

• (c) declare or pay any dividend or make any other income distribution to its shareholders if an Event of Default has occurred and is continuing; or

• (d) amend its charter documents in a manner that would adversely affect the Lender, or the ability of the Borrower or the Subsidiary to perform its obligations under the Loan Documents.

ARTICLE 6 EVENTS OF DEFAULT

6.1 Events of Default

Each of the following events, unless otherwise waived in writing by the Lender, will constitute an event of default (each an “ Event of Default ”), provided, however, that each of Sections 6.1 (a), (b) or (c) shall constitute an Event of Default only if the Borrower has not rectified such default within 20 Business Days of written notification from the Lender:

• (a) the Borrower fails to pay any principal or interest outstanding on the Loan in accordance with the terms of this Agreement or on the Maturity Date;

• (b) any representation or warranty made by or on behalf of the Borrower in or in connection with any Loan Document or any amendment or modification thereof or waiver thereunder, or in any report, certificate, financial statement or other document furnished to the Lender pursuant to or in connection with any Loan Document or any amendment or modification thereof or waiver thereunder, shall prove to have been incorrect in any material respect when made; or

• (c) the Borrower defaults under any covenant set out in the Loan.

6.2 Rights of Lender on Event of Default

If an Event of Default has occurred and is continuing, the Lender shall have the right, but is not obliged to:

• (a) declare the Loan, accrued interest and all other sums due and payable hereunder to be, whereupon they shall become, immediately due and payable without further demand, notice or other legal formality of any kind;

• (b) take all such action, as the Lender deems necessary to enforce all or any of its rights under any Loan Document; or

• (c) exercise any rights or remedies available to the Lender under the Loan Documents or at law or equity.

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ARTICLE 7 MISCELLANEOUS

7.1 Fees and Expenses

Borrower will be responsible for any expenses in connection with the loan and preparation of this Agreement and the Loan Documents (including all legal and other fees and expenses).

7.2 Taxes

The Borrower shall pay all stamp and other like duties and taxes and all notarial, registration, recording and other like fees which are payable in respect of any Loan Documents and shall indemnify the Lender against all liabilities, costs and expenses which may result from any default in paying such duties, taxes or fees.

7.3 Governing Law

This Agreement will be governed by and construed in accordance with the laws of the Province of Ontario, and the federal laws of Canada applicable therein, and each Party hereby submits to the exclusive jurisdiction of the courts of the Province of Ontario provided that the foregoing will in no way limit the right of the Lender to commence suits, actions or proceedings based on any of the Loan Documents in any other jurisdiction.

7.4 Amendment

Any amendment of this Agreement will not be binding unless signed by each of the Parties.

7.5 Waiver

Time is of the essence of this Agreement but no failure or delay by the Lender in exercising any right, power or remedy hereunder shall impair such right, power or remedy or operate as a waiver thereof, nor shall any single or partial exercise of the same preclude any further exercise thereof or the exercise of any other right, power or remedy. The rights, powers and remedies herein provided are cumulative and do not exclude any other rights, powers and remedies provided by law.

7.6 Severability

If any one or more of the provisions contained in this Agreement should be invalid, illegal or unenforceable in any respect in any jurisdiction, the validity, legality and enforceability of such provision or provisions shall not in any way be affected or impaired thereby in any other jurisdiction and the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby.

7.7 Assignment and Enurement

Neither Party shall assign or transfer all or any part of its rights or obligations under this Agreement without the prior written consent of the other Party, which consent may be unreasonably withheld. This Agreement shall be binding upon and enure to the benefit of the Borrower and the Lender and their respective permitted assigns, successors, executors, administrators, and personal representatives, as applicable.

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7.8 Entire Agreement

This Agreement and the other Loan Documents constitute the entire agreement of the Parties with respect to the subject matter hereof and supersede any previous expressions of intent or understandings in respect of the transactions contemplated hereby. This Agreement shall cease to be of further effect and shall automatically terminate when the Borrower has repaid in full the Obligations. For greater certainty the termination of this Agreement shall not affect the enforceability of the Jetstream Amending Agreement.

7.9 Notice

Any notice required or permitted to be given under this Agreement will be in writing and may be given by delivering, sending by electronic mail, or sending by prepaid registered mail, the notice to the address or email set forth on page 1 of this Agreement or to such other address or number as either Party may specify by notice in writing to the other Party.

Any notice delivered or sent by electronic mail will be deemed conclusively to have been effectively given on the day the notice was delivered, or the transmission was sent successfully to the email set out above, as the case may be. Any notice sent by prepaid registered mail will be deemed conclusively to have been effectively given on the third Business Day after posting; but if at the time of posting or between the time of posting and the third Business Day thereafter there is a strike, lockout, or other labour disturbance affecting postal service, then the notice will not be effectively given until actually delivered.

7.10 Confidentiality

Lender agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its directors, officers, employees, managers, administrators, trustees, agents, auditors, advisors and representatives (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority purporting to have jurisdiction over it (including any self-regulatory authority), (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) in connection with the exercise of any remedies hereunder or any other Loan Document or any action or proceeding relating to a Loan Document or the enforcement of rights hereunder or thereunder, (e) with the consent of the Borrower, or (f) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section 7.10 or (y) becomes available to the Lender on a non-confidential basis. For purposes of this Section 7.10, “ Information ” means all information of a confidential nature received in connection with this Agreement from the Borrower or its affiliates relating to the Borrower or any of its affiliates or any of their respective businesses, other than any such information that is available to the Lender on a non-confidential basis prior to such receipt. Any Person required to maintain the confidentiality of Information as provided in this Section 7.10 shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

7.11 Survival

None of the representations, warranties, covenants or other agreements contained in this Agreement shall survive the termination of this Agreement. For greater certainty the termination of this Agreement shall not affect the enforceability of the Jetstream Amending Agreement.

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7.12 Interpretation

In this Agreement, unless the context requires otherwise, references to provisions of any law or regulation shall be construed as references to those provisions as replaced, amended, modified or re-enacted from time to time; words importing the singular include the plural and vice versa and words importing a gender include every gender. References to this Agreement or any other Loan Document shall be construed as references to such document as the same may be amended, supplemented or novated from time to time. Section headings are inserted for reference only and shall be ignored in construing this Agreement.

7.13 Conflict

The Borrower agrees that, in the event of a conflict between the provisions of any of the Loan Documents, this Agreement shall take precedence.

7.14 Independent Legal Advice

The Lender has been advised to seek tax, investment and independent legal advice of the Loan and the Lender confirms that the Lender has not relied on the Borrower or its legal counsel in any manner in connection with the Loan Documents.

7.15 Delivery

This Agreement and any notice or request given hereunder may be delivered in counterparts and by facsimile transmission or in a file of Portable Document Format (PDF) attached to an email, with the same effect as if both Parties had all signed an original copy of the same document and all counterparts will be construed together as one and the same agreement.

[Signature page follows]

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IN WITNESS WHEREOF the Parties have caused this Agreement to be duly executed as of the date first written above.

CANADA JETLINES OPERATIONS LTD.

By: “Percy Gyara”

Name: Percy Gyara Title: Chief Financial Officer

12313936 CANADA INC.

By: “Rajdeep Kaur Singh” Name: Rajdeep Kaur Singh Title: Director

SCHEDULE “A” BORROWER’S WIRE TRANSFER INSTRUCTIONS

[Redacted: Confidential banking information]