Roots Corporation — Capital/Financing Update 2021

Dec 14, 2021

EIGHTH AMENDMENT TO CREDIT AGREEMENT

THIS EIGHTH AMENDMENT TO CREDIT AGREEMENT (the Eighth Amendment) is executed by the parties hereto as of the 10th day of December, 2021.

AMONG: ROOTS CORPORATION, as Borrower

(the Borrower)

AND: ROOTS LEASING CORPORATION and ROOTS INTERNATIONAL ULC, each as Guarantors

(collectively, the Guarantors and together with the Borrower, the Credit Parties)

AND: THE TORONTO-DOMINION BANK, as administrative agent and collateral agent for the Lenders

(the Administrative Agent)

AND: THE SEVERAL LENDERS PARTY HERETO

(collectively, the Lenders)

WHEREAS, the Credit Parties, the Administrative Agent and the Lenders entered into a Credit Agreement dated as of December 1, 2015 (including all annexes, exhibits and schedules thereto, as the same as been amended by a First Amendment, Waiver and Consent to Credit Agreement dated as of April 19, 2017, a Second Amendment to Credit Agreement dated as of September 6, 2017, a Third Amendment to Credit Agreement dated as of October 12, 2018, a Fourth Amendment to Credit Agreement dated as of April 23, 2019, a Fifth Amendment to Credit Agreement dated as of March 27, 2020 (the Fifth Amendment), a Sixth Amendment to Credit Agreement dated as of May 28, 2021, a Seventh Amendment to Credit Agreement dated as of November 26, 2021 (the Existing Credit Agreement and, as amended by this Eighth Amendment and as the same may be further amended, modified, restated, supplemented or replaced from time to time, collectively, the Credit Agreement); capitalized terms used herein and otherwise not defined shall have the meanings ascribed thereto in the Credit Agreement;

AND WHEREAS, pursuant to the Fifth Amendment, Section 10.5(b)(4) of the Existing Credit Agreement was deleted in its entirety for the period comprising the Fifth Amendment Effective Period (as defined in the Fifth Amendment);

AND WHEREAS, notwithstanding that the Fifth Amendment Effective Period remains in effect, the Administrative Agent and the Lenders have agreed to reinstate Section 10.5(b)(4) of the Existing Credit Agreement effective as of the Amendment Effective Date (as defined herein) for purposes of permitting the Borrower to establish a normal course issuer bid, which normal course issuer bid shall be made by the Borrower commencing on or about December 16, 2021 (the NCIB), and amend certain provisions of the Credit Agreement (collectively, the Amendments), but only to the extent and subject to the limitations set forth in this Eighth Amendment;

AND WHEREAS pursuant to Sections 10.5 and 13.1 of the Existing Credit Agreement, the Amendments require the consent and approval of the Required Lenders;

NOW THEREFORE for good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties hereby agree as follows:

– AMENDMENTS

1.1 As of the Amendment Effective Date, Section 10.5(b)(4) of the Existing Credit Agreement is hereby reinstated in its entirety. For certainty, such provision reads as follows:

"(4) other Restricted Payments; provided that after giving pro forma effect to such Restricted Payments the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio for the Test Period most recently ended on or prior to the date such Restricted Payments were made (calculated on a pro forma basis) is not more than 2.75:1.00; provided, further that such Restricted Payments are funded from Available Excess Cash Flow;".

– CONDITIONS TO EFFECTIVENESS

• 2.1 This Eighth Amendment shall become effective upon satisfaction of the following conditions precedent (the date upon which such conditions are satisfied, the Amendment Effective Date):
  • (a) the Credit Parties and the Lenders delivering to the Administrative Agent executed counterparts of this Eighth Amendment; and
  • (b) the Administrative Agent being satisfied that all representations and warranties contained in Section 8 of the Credit Agreement shall remain true and correct in all material respects (except such representations and warranties that are qualified as to materiality, which shall be true and correct in all respects) following this Eighth Amendment.

– REPRESENTATIONS AND WARRANTIES

• 3.1 Each Credit Party warrants and represents to the Agent and the Lenders that the following statements are true, correct and complete:
  • (a) Organizational Status. Each Credit Party (a) is a duly organized and validly existing corporation, limited liability company, limited partnership or other entity in good standing (if applicable) under the laws of the jurisdiction of its organization and has the corporate, limited liability company, limited partnership or other organizational power and authority to own its property and assets and to transact the business in which it is engaged and (b) has duly qualified and is authorized to do business and is in good standing (if applicable) in all jurisdictions where it is required to be so qualified, except where the failure to be so qualified would not reasonably be expected to result in a Material Adverse Effect.
  • (b) Organizational Power and Authority. Each Credit Party has the corporate or other organizational power and authority to execute, deliver and carry out the terms and provisions of this Eighth Amendment and the other the Credit Documents to which it is a party and has taken all necessary corporate or other organizational action to authorize the execution, delivery and performance of this Eighth Amendment and the other Credit Documents to which it is a party. Each Credit Party has duly executed and delivered each Credit Document to which it is a party and each such Eighth Amendment and the other the Credit Documents constitutes the legal, valid, and binding obligation of such Credit Party enforceable in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors' rights generally and subject to general principles of equity.
  • (c) No Violation. Neither the execution, delivery or performance by any Credit Party this Eighth Amendment and the other Credit Documents to which it is a party nor compliance with the terms and provisions thereof will (a) contravene any applicable provision of any material law, statute, rule, regulation, order, writ, injunction or decree of any court or governmental instrumentality, (b) result in any breach of any Contractual Requirement, except where the failure to so comply would

not reasonably be expected to result in a Material Adverse Effect or (c) violate any provision of the Organization Documents of such Credit Party or any of its Subsidiaries.

• (d) Governmental Approvals. The execution, delivery and performance by any Credit Party of this Eighth Amendment and the other Credit Documents does not require any consent or approval of, registration or filing with, or other action by, any Governmental Authority, except for (i) such as have been obtained or made and are in full force and effect, and (ii) filings, consents, approvals, registrations and recordings in respect of the Liens created pursuant to the Security Documents (and to release existing Liens).
• (e) Incorporation of Representations and Warranties From Credit Agreement. The representations and warranties contained in the Credit Agreement and the other Credit Documents are and will be true, correct and complete in all material respects on and as of the Amendment Effective Date to the same extent as though made on and as of that date, except to the extent such representations and warranties specifically relate to an earlier date, in which case they were true, correct and complete in all material respects on and as of such earlier date and to the extent amended by this Eighth Amendment.
• (f) Absence of Default. Since the Closing Date, no event has occurred and is continuing or will result from the consummation of the transactions contemplated by this Eighth Amendment that would constitute a Default or an Event of Default.

- MISCELLANEOUS

• 4.1 Each Credit Party (i) reaffirm its Obligations under the Credit Agreement and the other Credit Documents to which it is a party, and (ii) agrees that the Credit Agreement and the other Credit Documents to which it is a party remain in full force and effect, except as amended hereby, and are hereby ratified and confirmed.

• 4.2 Except as provided in Article 1, nothing contained in this Eighth Amendment or any other communication between the Agent and/or the Lenders and any other Credit Party shall be a waiver of any other present or future violation, Default or Event of Default under the Credit Agreement or any other Credit Document (collectively, Violations). Similarly, nothing contained in this Eighth Amendment shall directly or indirectly in any way whatsoever either: (i) impair, prejudice or otherwise adversely affect the Agent's or the Lenders' right at any time to exercise any right, privilege or remedy in connection with the Credit Agreement or any other Credit Document with respect to any Violations (including, without limiting the generality of the foregoing, in respect of the non-conformity to any representation, warranty or covenant contained in any other Credit Document), (ii) except as specifically provided in Article 1 hereof, amend or alter any provision of the Credit Agreement or any other Credit Document or any other contract or instrument, or (iii) constitute any course of dealing or other basis for altering any obligation of any of the Credit Parties under the Credit Documents or any right, privilege or remedy of the Administrative Agent or the Lenders under the Credit Agreement or any other Credit Document or any other contract or instrument with respect to Violations. Nothing in this Eighth Amendment shall be construed to be a consent by the Agent or the Lenders to any Violations.

• 4.3 For avoidance of doubt, unless otherwise expressly amended by this Eighth Amendment, the amendments to the Existing Credit Agreement expressed to be effective for the Fifth Amendment Effective Period (as defined in the Fifth Amendment) shall continue to remain in effect for such period.

• 4.4 Save as expressly set forth in this Eighth Amendment, all other terms and conditions of the Credit Agreement remain in full force and effect. All Credit Documents remain in full force and effect.

• 4.5 Except to the limited extent set forth herein, no additional amendment in respect of any other term, condition, covenant, agreement or any other aspect of the Credit Agreement is intended or implied.

• 4.6 This Eighth Amendment shall be interpreted and the rights and liabilities of the parties hereto shall be determined in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein.

• 4.7 This Eighth Amendment may be executed in original, facsimile and/or other electronic means counterparts and all such counterparts taken together shall be deemed to constitute one and the same instrument.

[signature pages follow]

The parties have executed this Eighth Amendment as of the date first above written.

BORROWER:

ROOTS CORPORATION

Per: "Mona Kennedy"

Name: Title: Mona Kennedy CFO

THE TORONTO-DOMINION BANK

as Administrative Agent and Collateral Agent

Per: "Neda Heidarpour"

Name: Neda Heidarpour

Title: Loan Syndications- Agency

THE TORONTO-DOMINION BANK, as a Lender

Per:	"Tim Thomas"
	Name:	Tim Thomas
	Title:	Managing Director

Per:

"Andrew Rytel"

Name:

Title: Andrew Rytel Vice President

CANADIAN WESTERN BANK, as a Lender

Per:	"Jacob Berlinkov"
	Name:	Jacob Berlinkov
	Title:	AVP, Corporate Lending

Per:

Name: John Cherian "John Cherian"

Title: MD & Head, Corporate and Energy Lending

THE BANK OF NOVA SCOTIA, as a Lender

Per:

Name: Title: Nick Dinkha Director

"Nick Dinkha"

BUSINESS DEVELOPMENT BANK OF CANADA, as a Lender

Per:	"Tawnya Pelletier"
	Name:	Tawnya Pelletier
	Title:	Director, Syndicated Financing

Per: "Rahul Baswan"

Name: Title: Rahul Baswan Director, Syndicated Financing

"Nicholas Schlotter"

"Jesse Macmasters"

Jesse Macmasters Head of Large Corporate - Ontario

BANK OF AMERICA, N.A. (acting through its Canada branch), as a Lender

Per:	"Sanaa Khatri-Ahmed"
	Name:	Sanaa Khatri-Ahmed

Senior Vice President

Title:

GUARANTOR CONSENT

The undersigned Guarantors, effective as of the date of this Eighth Amendment:

• (a) consents and agrees to the amendments contained in this Eighth Amendment; and
• (b) agrees that the Guarantee dated December 1, 2015, executed by each Guarantor to and in favour of Administrative Agent, remains in full force and effect and continues to be the legal, valid and binding obligation of such Guarantor, enforceable against such Guarantor in accordance with its terms.

GUARANTORS:

ROOTS LEASING CORPORATION

Per:

Name: Title: Mona Kennedy CFO "Mona Kennedy"

ROOTS INTERNATIONAL ULC

Per:

"Mona Kennedy"

Name: Title: Mona Kennedy CFO