saputo inc. saputo u.s., l.p. saputo dairy products …

DOCS 18815952v3

GUARANTEE AND SUBORDINATION AGREEMENT entered into at Montréal, Québec, as of February 21, 2019.

AMONG: SAPUTO INC., as Guarantor

AND: SAPUTO U.S., L.P., as Guarantor

AND: SAPUTO DAIRY PRODUCTS CANADA G.P., as Guarantor

AND: SAPUTO CHEESE USA INC., as Guarantor

AND: SAPUTO DAIRY FOODS USA, LLC, as Guarantor

AND: SAPUTO DAIRY AUSTRALIA PTY LTD ABN 52 166 135 486, as Guarantor

AND: NATIONAL BANK OF CANADA, as Agent

WHEREAS a credit agreement dated as of February 21, 2019 (as same may be amended, supplemented or restated from time to time, the “Credit Agreement”) providing for the granting of a non-revolving term facility consisting of a 1-year Tranche in an amount of GBP400,000,000, a 2-year Tranche in an amount of GBP265,000,000 and a 3-year Tranche in an amount of GBP600,000,000 has been entered into and executed between Saputo Foods Limited, as Borrower, Saputo Inc. as Covenantor, and National Bank of Canada, as Agent and the lenders parties thereto, as lenders;

WHEREAS it is in the best interest of the Guarantors to guarantee all present and future obligations of the Borrower towards the Lenders and the Agent, the whole in accordance with and subject to the terms and conditions of this Guarantee and Subordination Agreement; and

WHEREAS it is in the best interest of the Guarantors to subordinate and postpone all of the debts owed to them by the Borrower, the whole in accordance with and subject to the terms and conditions of this Guarantee and Subordination Agreement.

NOW, THEREFORE, in consideration of the Agent and the Lenders having entered into the Credit Agreement with the Borrower and having agreed, subject to the terms and conditions therein provided, to make the Facility available to the Borrower, the parties hereto have agreed as follows:

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1. INTERPRETATION

1.1 Definitions

The following capitalized words and expressions, whenever used in this Agreement or in any deed, document or instrument supplemental or ancillary hereto, unless there be something in the subject or the context inconsistent therewith, shall have the meaning ascribed to them herein below:

“Borrower” means Saputo Foods Limited;

“Credit Agreement” has the meaning ascribed to it in the first preamble paragraph hereto;

“Guaranteed Obligations” means the Obligations (as such term is defined in the Credit Agreement), whether or not such Obligations are for the payment of money or for the performance or non-performance of any act;

“Guarantor” means, as at any time, any Person having executed this Agreement as Guarantor, and any other Subsidiary of Saputo who, at such time, has executed a supplemental agreement to this Agreement in accordance with Section 12.2.2 of the Credit Agreement and substantially in the form of the supplemental agreement annexed hereto under Schedule “A”, in their respective capacity as guarantor of all of the Guaranteed Obligations and in their respective capacity as obligor under this Agreement;

“Guarantors’ Event of Default” has the meaning ascribed to it in Section 5.1;

“Lenders” means the “Lenders” (as such term is defined in the Credit Agreement) and “Lender” means any one thereof;

“Lenders' Indebtedness” has the meaning ascribed to it in Section 3.1;

“Rights, Remedies and/or Recourses” with respect to any Person, refers to any personal action, provisional measure, any other personal right, any other remedy, or whether same is exercised under the terms of any Loan Document, or any other recourse whatsoever;

“Subordinated Documents” has the meaning ascribed to it in Section 3.4;

“Subordinated Indebtedness” has the meaning ascribed to it in Section 3.1.

1.2 Incorporation of Credit Agreement Definitions

The capitalized words and expressions used in this Agreement, in its schedules or in any deed, document or instrument supplemental or ancillary hereto, unless otherwise defined herein or unless there be something in the subject or the context inconsistent therewith, shall have the same meaning as that ascribed to them at any time and from time to time in the Credit Agreement.

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1.3 Accounting Terms and Practice

Unless otherwise defined herein, each accounting term used in this Agreement has the meaning ascribed to it under generally accepted accounting principles from time to time in Canada (including the International Financial Reporting Standards) as established, specified and updated in the Canadian Institute of Chartered Accountants Handbook. The financial calculations, audits, audit reports and financial statements (and their different items) referred to herein shall be made or prepared in accordance with such accounting principles (insofar as applicable) applied on a consistent basis and in accordance with the normal practice in the Borrower’s and Guarantors’ industry.

1.4 Headings

The division of this Agreement into Articles, Sections, subsections, paragraphs and subparagraphs and the insertion of titles are for convenience of reference only and do not affect the meaning or the interpretation of the present Agreement.

1.5 Governing Laws

This Agreement and the interpretation and enforcement thereof shall be governed by and construed in accordance with the laws applicable in the Province of Québec and the laws of Canada applicable therein.

1.6 Submission to Jurisdiction

EACH OF THE GUARANTORS HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS SITTING IN THE JUDICIAL DISTRICT OF MONTREAL FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY. EACH OF THE GUARANTORS IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

1.7 Waiver of Jury Trial

EACH OF THE GUARANTORS, THE AGENT AND THE LENDERS IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.

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1.8 Formal Notice

The Guarantors shall be en demeure and be deemed to have received formal notice to fulfill their obligations by the mere lapse of time provided for their execution or by the end or forfeiture of the term, or by any other cause provided by the law.

1.9 Schedules

The schedules annexed to this Agreement shall form an integral part thereof.

1.10 References to this Agreement

The expressions “hereto” or “hereunder” or “hereof” or “herein” or this “Agreement” refer to this Guarantee and Subordination Agreement together with any future amendment, updating, restatement or supplement thereto.

2. COVENANTS OF THE GUARANTORS

2.1 Guarantee

2.1.1 Each of the Guarantors hereby solidarily (i.e. jointly and severally) and irrevocably, absolutely and unconditionally guarantees to the Agent and to the Lenders herein acting and represented by the Agent, the due and punctual payment, observance and performance of all the Guaranteed Obligations when and as due (whether at maturity, by reason of acceleration or otherwise) and in accordance with their respective terms, and the Guarantors expressly agree to pay, observe or perform the same when so due or deemed to be due, upon demand therefor by the Agent, acting in accordance with the instructions of the Majority Lenders.

2.1.2 Each Guarantor (a “Contributing Guarantor”) agrees (subject to Section 2.13) that, in the event a payment shall be made by any other Guarantor under the Guarantee and Subordination Agreement to satisfy a claim of the Agent or any Lender (the “Claiming Guarantor”) and such Claiming Guarantor shall not have been fully indemnified by the Borrower, then the Contributing Guarantor shall, subject to Section 2.14, indemnify the Claiming Guarantor in an amount equal to the amount of such payment multiplied by a fraction of which the numerator shall be the Maximum Net Worth of the Contributing Guarantor and the denominator shall be the aggregate Maximum Net Worth of all the Guarantors under the Guarantee and Subordination Agreement. For purposes hereof, the term “Maximum Net Worth” with respect to any Guarantor means the greatest of the net worths of such Guarantor calculated as of the following dates: (A) the date on which such Person becomes a Guarantor (whether by reason of signing this Agreement or by reason of signing any supplemental agreement thereto), (B) the date on which such Guarantor expressly reaffirms its obligations under this Agreement, (C) the date on which demand for payment is made on such Guarantor under this Agreement, (D) the date on which payment is made by such Guarantor under this Agreement or (E) the date on which any judgment, order or decree is entered requiring such Guarantor to make payment under this Agreement or in respect

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thereof. Any Contributing Guarantor making any payment to a Claiming Guarantor pursuant to this subsection 2.1.2 shall be subrogated to the rights of such Claiming Guarantor to the extent of such payment, subject to Section 2.14 and to the subordination set forth in Article 3.

2.1.3 No failure on the part of the Borrower or any Guarantor to make the payments required by subsection 2.1.2 (or any other payments required under applicable law or otherwise) shall in any respect limit the obligations and liabilities of any other Guarantor with respect to its obligations under the Guarantee and Subordination Agreement, and each Guarantor shall remain liable for the full amount of the Guaranteed Obligations.

2.2 Renunciation to the Benefits of Division and Discussion

The Agent, acting in accordance with the instructions of the Majority Lenders, shall not be obliged to exercise any of its recourses against the Borrower or against others, or to discuss any of the security which it shall hold or which the Lenders shall hold, before being entitled to the payment, observance and performance by the Guarantors of the Guaranteed Obligations and it shall not be bound to offer or to deliver its security before being paid in full. The Guarantors renounce to the benefits of discussion and division.

2.3 Consideration

Each of the Guarantors acknowledges that it has made this Guarantee to induce the Lenders to make the Loans available to the Borrower and that the Lenders are making the Loans available to the Borrower in reliance upon this Guarantee and would not make the same available to the Borrower without the appropriate execution and delivery of this Guarantee. Each of the Guarantors represents and warrants that this Guarantee may reasonably be expected to benefit the Guarantor directly or indirectly.

2.4 Payment upon receipt of written demand

Within two Business Days of the receipt of a written demand from the Agent pursuant to Section 2.1, which demand can only be submitted following the occurrence of an Event of Default which has not been waived in accordance with the Credit Agreement, the Guarantors shall make payment of the amount claimed at the Branch of Account, in the same currency in which such Guaranteed Obligations may be outstanding, in funds immediately available to the Agent at such office. Each such demand shall be accompanied by a certificate of the Agent setting forth the amount which the Guarantors are bound to pay pursuant to the Guarantee contemplated in the Guarantee and Subordination Agreement and the basis of the calculations made by the Agent in order to arrive at such amount. As of and from the date of such demand, the amount of the demand shall bear interest on a Prime Rate Basis.

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2.5 Statement of Agent constituting prima facie evidence of amount due by the Borrower

Any statement prepared by the Agent shall constitute prima facie evidence of the amount which, as of the date of the statement so prepared, is due by the Borrower to the Lenders under the Guaranteed Obligations and the Guarantors shall be bound by every such statement.

2.6 No Reduction in Payment or Performance

All payments due to the Agent and the Lenders or anyone thereof hereunder and all of the other terms, conditions, covenants and agreements to be observed or performed by the Guarantors under the Guarantee and Subordination Agreement, whether in respect of the Guaranteed Obligations or otherwise, shall be made, observed or performed by the Guarantors without any reduction whatsoever, including, without limitation, any reduction resulting from any defence, right of action, right of set-off or compensation, right of recoupment or counterclaim of any nature whatsoever that the Borrower or the Guarantors, as the case may be, may have or have had at any time against the Agent, a Lender or any other Person whether with respect to this Agreement, the Credit Agreement, the other Loan Documents or otherwise. Furthermore, each Guarantor assumes all risks of superior force, and consequently must execute its obligations hereunder in strict compliance with the terms of this Agreement notwithstanding the existence or occurrence of a superior force within the meaning given to such expression in Article 1693 of the Civil Code of Québec.

2.7 Imputation of Payments

All sums of money received by the Agent or the Lenders from the Borrower or from anyone whomsoever, which may be imputed in reduction of the Guaranteed Obligations, shall be considered as payments which the Agent and the Lenders may impute as they see fit, notwithstanding the provisions of Article 1572 of the Civil Code of Québec as well as every other legal rule concerning the imputation of payments.

2.8 Irregularities in borrowing of no effect on the Obligations of the Guarantors

All moneys, advances, renewals and credits borrowed or actually obtained by the Borrower from the Agent or the Lenders under the Credit Agreement shall constitute part of the Guaranteed Obligations, notwithstanding any irregularity, defect or informality in the borrowing or the obtaining of the said moneys, advances, renewals and credits, whether or not the Lenders or the Agent shall have had knowledge of same, it being expressly understood that any amount which may not be recoverable from the Borrower as a consequence of any irregularity, defect or informality whatsoever in the principal indebtedness of the Borrower, may be recovered from the Guarantors as the only or principal debtors and shall be payable to the Agent, for the benefit of the Lenders, upon demand therefor by the Agent, with interest, fees and accessories, the whole in accordance with the provisions set forth herein.

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2.9 No Release of the Guarantors

Subject to Section 6.10, the obligations of the Guarantors hereunder shall not be reduced, limited or terminated, nor shall the Guarantors be discharged from any obligation hereunder, for any reason whatsoever including, but not limited to (and whether or not the same shall have occurred or failed to occur once or more than once and, in the case of extensions of time for payment, observance or performance of obligations, whether such extensions or any of them are for periods longer than the respective periods then specified therefor and whether or not the Guarantors or any one thereof shall have received notice thereof or assented thereto):

2.9.1 any extension of the time for payment, observance or performance, or any other amendment or modification of any of the terms and conditions of the Guaranteed Obligations or the Loan Documents;

2.9.2 any composition or settlement (whether by way of release, acceptance of a plan of reorganization or otherwise) of the Guaranteed Obligations;

2.9.3 the release of any or all of the Guarantee and Subordination Agreement or any release, compromise, settlement, or extension of the time for payment, observance or performance of any obligations created by the Guarantee and Subordination Agreement;

2.9.4 any election not or failure to exercise, delay in the exercise of, exercise or waiver of, or forbearance or other indulgence with respect to any Right, Remedy or Recourse available to the Lenders, including but not limited to:

2.9.4.1 any election not or failure to protect or preserve any collateral or protect, perfect or continue the perfection of any Lien upon any collateral now or hereafter securing any or all of the Guaranteed Obligations;

2.9.4.2 any exercise of or failure to exercise any right of set-off, compensation, recoupment or counterclaim;

2.9.4.3 any election of Rights, Remedies or Recourses effected by the Agent or the Lenders;

2.9.4.4 any subordination by operation of Law, whether present or future, of any or all of the Guaranteed Obligations;

2.9.4.5 any disallowance, invalidity, illegality, voidness or unenforceability of any or all Liens securing any or all of the Guaranteed Obligations; and

2.9.4.6 any other act or failure to act which varies the risks of the Guarantors hereunder or, but for the provisions hereof, under the terms of any Law, would operate to reduce, limit or terminate the obligations of the Guarantors from any obligation hereunder save and except for the receipt by the Agent and the Lenders of the full, final and definitive amount of their claim against the Borrower with respect to the Guaranteed Obligations.

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2.10 Certain Waivers

Each of the Guarantors hereby waives:

2.10.1 any requirement, and any right to require that any power be exercised or any action be taken against the Borrower, any Guarantor or any collateral for any of the Guaranteed Obligations;

2.10.2 any defences to and set-offs, counterclaims and claims of recoupment against any and all of the Guaranteed Obligations that may at any time be available to the Borrower or any Guarantor;

2.10.3 notice of acceptance of the incurrence or renewal of any Guaranteed Obligations;

2.10.4 all notices which may be required by Law to preserve any rights against such Guarantor hereunder including, but not limited to, any notice of default, demand, dishonour, presentment and protest;

2.10.5 any defence based upon, arising out of or in any way related to:

2.10.5.1 any claim that any election of remedies by the Agent or the Lenders impaired, reduced, released or extinguished any rights that such Guarantor might otherwise have had against the Borrower or any other Guarantor;

2.10.5.2 any claim that the Guaranteed Obligations or the Guarantee and Subordination Agreement should be strictly construed against the Agent or the Lenders; and

2.10.6 any and all other defences related to the Guaranteed Obligations save and except that the Agent or the Lenders have received the full, final and definitive amount of their claim against the Borrower with respect to the Guaranteed Obligations.

2.11 No Release in Event of Bankruptcy

No settlement or discharge of the Guaranteed Obligations shall be effective if any payment by any of the Guarantors in respect thereof is avoided or reduced by virtue of any provision or enactment relating to bankruptcy, insolvency, liquidation or similar laws of general application from time to time, and if such payment is so avoided or reduced, the Agent and the Lenders shall be entitled to recover the amount of such payment as if such settlement or discharge had not occurred.

2.12 Additional Guarantee

The Guarantee contemplated in this Article is in addition to and not in substitution for any other guarantee given by anyone whomsoever and shall not prejudice any and all security

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furnished to the Lenders or to the Agent for the benefit of the Lenders by anyone whomsoever, and held by it at any time whatsoever.

2.13 Continuing Liability of Guarantors

The Guaranteed Obligations shall be deemed not to have been paid, observed or performed, and the liability of each of the Guarantors hereunder in respect thereof shall continue and not be discharged, to the extent that any payment, observance or performance thereof by the Borrower, any other Guarantor, or out of the proceeds of any collateral, is recovered from or reimbursed by or for the account of the Agent and the Lenders for any reason, including, but not limited to, a preference or fraudulent transfer or by virtue of any subordination (whether present or future or contractual or otherwise) of the Guaranteed Obligations, whether such recovery or payment over is effected by any judgment, decree or order of any court or governmental authority, by any plan of reorganization or by settlement or compromise by the Agent or the Lenders (whether or not consented to by the Borrower or any Guarantor) of any claim for any such recovery or payment over. Each of the Guarantors hereby expressly waives the benefit of any applicable Law of limitations and agrees that it shall be liable hereunder whenever such a recovery or payment over occurs.

2.14 Rights of Subrogation

The Guarantors may not be subrogated in the rights of the Agent and the Lenders until all the Guaranteed Obligations have been paid, observed and performed in full.

2.15 Continuing Guarantee

The Guarantee contemplated in this Agreement constitutes a continuing guarantee and remains in full force until the repayment in full, and cancellation, of the Guaranteed Obligations.

2.16 Reasonableness of Waivers, Renunciations, Declarations and Authorizations

Each of the Guarantors warrants and agrees with the Agent and the Lenders (herein acting and represented by the Agent) that each of the waivers, renunciations, declarations and authorizations set forth in this Guarantee is made with full knowledge of its significance and consequences and each of the Guarantors, the Agent and the Lenders (herein acting and represented by the Agent) hereby warrants and agrees that if any of such waivers, renunciations, declarations and authorizations is determined to be contrary to any applicable Law or public policy, such waivers, renunciations, declarations and authorizations shall be effective only to the maximum extent permitted by Law.

2.17 Authority to Modify Guaranteed Obligations

To the extent permitted by Law, the Guarantors expressly authorize the Lenders and/or the Agent, at any time and from time to time without notice and without affecting the liability of the Guarantors hereunder, to

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2.17.1 alter the terms of all or any part of the Guaranteed Obligations and any security and guarantees therefor, including without limitation, modification of times for payment and rates of interest and increase in the amount of the Guaranteed Obligations;

2.17.2 accept new or additional instruments, documents, agreements, security or guarantees in connection with all or any part of the Guaranteed Obligations;

2.17.3 accept partial payment of the Guaranteed Obligations;

2.17.4 waive, release, reconvey, terminate, abandon, subordinate, exchange, substitute, transfer, compound, compromise, liquidate and enforce all or any part of the Guaranteed Obligations and any security or guarantees therefor, and apply any such security and direct the order or manner of sale thereof (and bid and purchase at any such sale), as the Agent, acting in accordance with the instructions of the Majority Lenders, in its discretion may determine;

2.17.5 release the Borrower, any Guarantor or any other Person from any personal liability with respect to all or any part of the Guaranteed Obligations;

2.17.6 otherwise amend the provisions of any one of the Loan Documents; and

2.17.7 assign the benefit of this Guarantee in whole or in part to any Person pursuant to Section 19.5 of the Credit Agreement.

3. SUBORDINATION AND POSTPONEMENT

3.1 Subordination and Postponement of Indebtedness

The Guarantors acknowledge, declare and agree that all Indebtedness, present and future, of the Borrower to them (the aggregate of all such present and future Indebtedness is collectively referred to herein as the “Subordinated Indebtedness”) is junior and subordinate, and the payment thereof, whether in whole or in part, and whether as to principal, interest, fees or otherwise, and whether at or prior to maturity or upon acceleration of any maturity, is postponed to the prior payment in full of the Loans and of all the Indebtedness, present and future, of the Borrower to the Agent and the Lenders under the Credit Agreement (all of which Loans and Indebtedness are herein collectively referred to as the “Lenders' Indebtedness”).

3.2 Exception as to Postponement Only

Notwithstanding the provisions of Section 3.1, any Guarantor may pay any amount due to the Borrower or any other Guarantor, at any time, on account of the Subordinated Indebtedness on condition that at the time of such payment, no Event of Default exist or would result therefrom.

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3.3 No Lien

Each of the Guarantors hereby acknowledges, declares and agrees that no Lien exists in their favour in connection with the Subordinated Indebtedness and that no Lien will be created in the future in connection with such Indebtedness as long as the Lenders' Indebtedness has not been paid in full and the credit facility provided for under the Credit Agreement has not been terminated or cancelled.

3.4 Exercise of Rights Under the Subordinated Indebtedness

In the event that any default or event of default occurs and continues under any one of the deeds or documents pursuant to which the Subordinated Indebtedness, or any part thereof, may be attested or evidenced, now or at any time hereafter (the aggregate of such deeds and documents are collectively referred to herein as the “Subordinated Documents”), the Guarantors agree not to directly or indirectly exercise any Right, Remedy or Recourse granted to them by Law or any one of the Subordinated Documents until such time as the Agent, acting upon the instructions of the Majority Lenders, shall have given its prior written consent to the exercise of such Rights, Remedies or Recourses.

3.5 Prior Payment of Lenders' Indebtedness in Bankruptcy, etc.

In the event of any insolvency, bankruptcy, receivership, liquidation, reorganization or other similar proceedings relating to any of the Guarantors or its debts or assets, and in the event of any proceedings for liquidation, dissolution or other winding-up of any of the Guarantors or distribution or marshalling of assets or securities of any kind or any composition with creditors of any of the Guarantors, whether or not involving insolvency or bankruptcy and whether voluntary or involuntary, if the Lenders' Indebtedness has not been paid in full and cancelled at such time, the Agent is hereby irrevocably authorized by the Guarantors, at any such meeting or in any such proceeding, to collect any assets or securities of any kind of any of the Guarantors distributed, divided or applied by way of dividend or payment or any such securities issued on account of any of the Subordinated Indebtedness and to apply the same, or the proceeds of any realization upon the same, as the Agent in its discretion, elects to effect, to the Lenders' Indebtedness until the Lenders' Indebtedness shall have been paid in full and cancelled, rendering any surplus then remaining to the Persons entitled by Law to receive same. The Guarantors shall retain the right to vote and otherwise act in any such proceeding (including, without limitation, the right to vote to accept or reject any plan of partial or complete liquidation, reorganization, arrangement, composition or extension) on condition that such right is only exercised in accordance with instructions given, from time to time, by the Agent, acting upon the instructions of the Majority Lenders. The rights of the Agent and the Lenders under this Section are in addition to any other rights it may have under any other provision of this Agreement.

3.6 Payments Held in Deposit

In the event of any payment or distribution to any of the Guarantors made in breach of the terms hereof, such a payment or distribution shall be held under gratuitous deposit for the Lenders

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and shall be paid to the Agent, itself acting in accordance with the instructions of the Majority Lenders, forthwith following demand therefor by the Agent, acting in accordance with the instructions of the Majority Lenders, and to the extent the Lenders remain, on the date of any such payment, creditors of any of the Guarantors.

3.7 Scope of Subordination and Postponement

The provisions of this Article are intended solely to define and establish the relative rights of the creditors of any of the Guarantors who are parties hereto. Nothing in this Agreement shall in any way impair, modify or affect, as between or among the Guarantors, on the one hand, and their creditors under such documents, on the other hand, the obligations of such Guarantors to effect payment of principal, interest, costs, fees, royalties and other amounts, obligations and liabilities owing under or pursuant to the terms of such documents or affect the relative rights of the creditors of the Guarantors thereunder.

4. REPRESENTATIONS AND WARRANTIES

The Guarantors do hereby represent and warrant that:

4.1 Organization

Each of the Guarantors (i) is a corporation, partnership or limited liability company duly constituted, validly existing and in good standing under the Laws of its jurisdiction of constitution (to the extent applicable), is duly qualified as a foreign corporation or other organization and in good standing under the laws of each jurisdiction in which it carries on business which requires such qualification, and is in compliance with all provisions of its constating documents and by-laws and (ii) has all requisite power and authority, corporate or otherwise, to own its property and to carry on its business as now being and hereafter proposed to be conducted, in each case except where the failure to have such power or authority or to be so qualified or to be in such good standing, as the case may be, would not have a Material Adverse Effect.

4.2 Authorization of Documents by the Guarantors

Each of the Guarantors has the power, and has taken all necessary action, to authorize it to guarantee the obligations of the Borrower under the Credit Agreement pursuant to the terms hereof; each of the Guarantors has the power and has taken all necessary action to authorize it to execute, deliver and perform this Agreement in accordance with the terms hereof and to consummate the transactions contemplated hereby. This Agreement has been duly executed and delivered by the duly authorized officers of each of the Guarantors and constitutes legal, valid and binding obligations of the Guarantors enforceable in accordance with their terms, subject, as to enforcement or remedies, to any applicable bankruptcy, insolvency or other similar Law affecting the enforcement of creditors' rights generally, and subject to the limitation that the availability of the remedy of specific performance or injunctive relief is subject to the discretion of the court before which any proceeding therefor may be brought.

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4.3 No Conflict

The execution, delivery and performance by each of the Guarantors of this Agreement, and the consummation of the transactions contemplated hereby do not and will not violate any Law, conflict with, result in a breach of or constitute a default under the constating documents or by-laws of any of the Guarantors or under any material agreement or instrument to which it is a party or by which it or any of its property may be bound.

4.4 Governmental Regulation

None of the Guarantors is required to obtain any consent, Approval, authorization, permit or license from, or effect any filing or registration with, any federal, provincial, state or local regulatory authority in connection with the execution, delivery and performance by it, in accordance with their respective terms, of this Agreement (except those that have been obtained and which are in full force and effect).

4.5 Solvency

Each of the Guarantors is Solvent.

5. GUARANTORS' EVENTS OF DEFAULT

5.1 Guarantors' Events of Default

The occurrence of any of the following events during the term of this Agreement shall constitute an event of default (herein referred to as a “Guarantors’ Event of Default”):

5.1.1 should any of the Guarantors fail to make, as and when same are due, any payment of principal, or any payment of interest, fees or related costs with respect to the Guaranteed Obligations; or

5.1.2 should any of the Guarantors default in the performance or fulfillment of any other obligation or covenant hereunder, or any other obligation or covenant under any one of the Loan Documents to which it is a party, and such default is not remedied within 10 days following the issuance by the Agent of a notice thereof; or

5.1.3 should any statement, certificate, representation or warranty which has been made by or on behalf of the Guarantors to the Lenders in or pursuant to this Agreement prove at any time to be either incorrect or substantially inaccurate when made with respect to a material aspect.

6. GENERAL PROVISIONS

6.1 Notices

6.1.1 Except as otherwise specified herein, all notices, requests, demands or other communications to or upon the respective parties hereto shall be deemed to have been duly given

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or made to the party to which such notice, request, demand or other communication is required or permitted to be given or made under this Agreement, when delivered to such party by acceptable delivery service, by telecopier, by personal delivery or (except for any notice with respect to a Default or a Guarantors’ Event of Default) by electronic mail at its address and attention set forth with its signature below, or at such other address as any of the parties hereto may hereafter notify the others in writing. No other method of giving notice is hereby precluded.

6.1.2 Any notice, request, demand or other communication given by personal delivery or by a delivery service will be conclusively deemed to have been delivered at the time of such delivery and, if given by telecopier or by electronic mail, on the day of transmittal if before 3:00 p.m. on a Business Day, or on the following Business Day if such transmission occurs on a day which is not a Business Day or after 3:00 p.m. on a Business Day. If the telecopy or the electronic transmission system suffers any interruption by way of strike, slowdown, force majeure, or any other cause, the party giving a notice, request, demand or other communication must do so using another means of communication not affected by the disruption.

6.2 Judgment Currency

If for the purpose of obtaining or enforcing judgment, it is necessary to convert an amount due hereunder into another currency, the rate of exchange applied shall be that announced by the Bank of Canada as the 4:30 p.m. mid-market spot rate for conversion of the original currency into the other currency on the Business Day on which judgment is rendered.

If a fluctuation occurs in the exchange rate between the Business Day prior to the date of judgment and the date of payment, the Guarantors shall pay on demand or, as the case may be, shall deduct from payment, the sum, if any, necessary so that the sum paid in one currency shall be equal to the sum due in the other currency, after conversion at the spot rate quoted by the Bank of Canada at noon at the time of payment. Any obligation of the Guarantors under this Section shall constitute a distinct debt and an obligation which is added to those resulting from the judgment which may have been rendered.

6.3 Taxes

All payments by a Guarantor of principal of, and interest on, the Guaranteed Obligations and all other amounts payable hereunder shall be made free and clear of and without deduction for any present or future excise, stamp or similar taxes, fees, duties, levies, imposts, charges, deductions, withholdings or other charges of any nature whatsoever imposed by any taxing authority, but excluding (i) franchise taxes, (ii) any taxes that would not be imposed but for a connection between a Lender or the Agent and the jurisdiction imposing such taxes (other than a connection arising solely by virtue of the activities of such Lender or the Agent pursuant to or in respect of the Credit Agreement), (iii) any taxes imposed on or measured by any Lender's assets, net income, receipts or branch profits, (iv) any taxes arising after the date hereof solely as a result of or attributable to a Lender changing its designated lending office after the date such Lender becomes a party to the Credit Agreement and (v) any U.S. federal withholding taxes imposed under the FATCA (the non-excluded items are hereinafter collectively referred to as the

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“Taxes”). In the event that any withholding or deduction from any payment to be made by a Guarantor hereunder is required in respect of any Taxes pursuant to any applicable law, rule or regulation, then such Guarantor will pay to the Agent, for the account of each affected Lender, such additional amount or amounts as is necessary to ensure that the net amount actually received by each affected Lender will equal the full amount such Lender would have received had no such withholding or deduction been required and such Guarantor shall indemnify the Lenders from any incremental Taxes, interest or penalties that may become payable by any Lender as a result of said Taxes.

6.4 Indemnification; Limitation of Liability

6.4.1 In consideration of the execution and delivery of this Agreement by the Agent and the Lenders and the making of the Loans, each Guarantor hereby indemnifies, exonerates and holds the Agent and each Lender, each of their respective affiliates and each of their respective officers, directors, employees, agents, advisors and representatives (collectively, the “Indemnified Parties”) free and harmless from and against any and all claims, actions, causes of action, judgments, suits, losses, penalties, costs, liabilities, obligations and damages, and expenses, including attorneys' fees, disbursements and service charges (collectively, the “Indemnified Liabilities”) that may be incurred by or asserted or awarded against any Indemnified Party, in each case arising out of or in connection with or by reason of, or in connection with the execution, delivery, enforcement or performance of this Agreement, and the other Loan Documents (including, without limitation, the enforcement of the Guarantee and Subordination Agreement), or any transaction financed or to be financed, in whole or in part, or any use made or proposed to be made, directly or indirectly, with the proceeds of any Loan whether or not such action is brought against the Agent or any Lender, the shareholders or creditors of the Agent or any Lender, or an Indemnified Party or an Indemnified Party is otherwise a party thereto and whether or not the transactions contemplated herein are consummated, except to the extent such claim, damage, loss, liability or expense (a) has resulted from the gross negligence or willful misconduct of such Indemnified Party or such Indemnified Party's violation of applicable law, (b) results from claims of the Agent or a Lender solely against one or more other Lenders or (c) results from an action or suit initiated by the Borrower or any of the Guarantors against the Agent or any Lender in which the Borrower or the relevant Guarantor prevails, and if and to the extent that the foregoing undertaking may be unenforceable for any reason, each of the Guarantors hereby agrees to make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities for which otherwise such Guarantor is liable under this Section 6.4 which is permissible under applicable law.

6.4.2 Each of the Guarantors acknowledges that the Indemnified Liabilities include, without limitation, any liability (whether direct or indirect, in contract or tort or otherwise), if any, of an Indemnified Party to it, any of its shareholders or creditors, any Subsidiary or any guarantor, arising out of, related to or in connection with, the transactions contemplated herein or in the Loan Documents, including the exercise of any of their rights under any Loan Document or the carrying on of any duties thereunder, except to the extent that such liability is found in a final non-appealable judgment by a court of competent jurisdiction to have resulted from such

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Indemnified Party's gross negligence or wilful misconduct or from such Indemnified Party's failure to make a Loan in violation of the Credit Agreement; provided, however, in no event shall any Indemnified Party be liable for consequential, indirect or special, as opposed to direct damages.

6.4.3 So long as no Event of Default has occurred, no Indemnified Party shall settle or otherwise pay or agree to pay any claim for which any Guarantor is obligated to provide indemnification under the Loan Documents without the prior written consent of such Guarantor, which consent shall not be unreasonably withheld and shall be deemed to have been given unless such Guarantor objects to such settlement within ten (10) Business Days after notice thereof.

6.5 Severability

Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof in that jurisdiction or affecting the validity or enforceability of such provision in any other jurisdiction.

6.6 Acknowledgment

Each of the Guarantors hereby acknowledges that it has received and taken cognizance of an original executed copy of the Credit Agreement and is familiar with all the provisions thereof.

6.7 Appointment of the Agent

The Agent does hereby declare that in accordance with the provisions of the Credit Agreement, the Interlender Agreement and of any Assignment Agreement which has been or shall be executed from time to time, it has been mandated or shall have its mandate confirmed, as the case may be, by each and every Person who may, at any time and from time to time, become a Lender to act for and on its behalf in the execution of this Agreement and in the assumption and performance of its obligations hereunder in the same manner and to the same extent as though such Person were an original Lender hereto. Furthermore, the Lenders (herein acting and represented by the Agent) do hereby acknowledge and agree that the execution and delivery of an Assignment Agreement by the parties referred to therein shall constitute for all purposes of this Agreement, the intervention by such Transferee referred to in such Assignment Agreement into this Agreement and such Transferee shall have all the benefits created hereunder and shall be bound by all the terms hereof as fully as though it were an original Lender hereto.

6.8 Benefit of this Agreement for Future Lenders

The parties hereto do hereby expressly acknowledge, declare and agree that the rights, benefits and remedies created and intended to be created, at any time and from time to time, by this Agreement in favour of the Lenders, are created and intended to be created in favour of the Lenders and any other Person who may, at any time and from time to time, become a Lender under the Credit Agreement, in the same manner and to the same extent as though each such

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Person was personally an original party to or a Person specifically named as a beneficiary in this Agreement. In furtherance of the provisions of this Section, the parties hereto do hereby irrevocably mandate the Agent, for and on their behalf, to confirm to and confer upon each Person who becomes a Lender, the benefits of this Agreement and to execute any instrument necessary to evidence same.

6.9 Compensation and Set-Off

6.9.1 In addition to any right now or hereafter granted under applicable Law and not by way of limitation of any such rights, upon the occurrence of an Event of Default each Lender is hereby authorized by each Guarantor, at any time and from time to time, without notice to the Borrower or any of the Guarantors or to any other Person, any such notice being hereby expressly waived, to effect compensation, to set-off and to appropriate and to apply any and all deposits (general or special, time or demand, including Indebtedness evidenced by certificates of deposit, in each case whether matured or unmatured), and any other Indebtedness at any time held or owing by such Lender to or for the credit or the account of any Guarantor against and on account of the Guaranteed Obligations, irrespective or whether or not the Agent shall have made any demand hereunder and although said obligations and liabilities, or any of them, shall be contingent or unmatured.

6.9.2 For the purposes of the application of this Section, the Guarantors, the Agent and the Lenders (herein acting and represented by the Agent) agree that the benefit of any term applicable to any Lender’s deposit, credit indebtedness, liability or obligation referred to in this Section shall be lost immediately before the time when such Lender shall exercise its rights under this Section in respect of such deposit, credit indebtedness, liability or obligation of the such Lender.

6.9.3 Furthermore, in the exercise of its rights under this Section, where any Indebtedness of any Lender to any Guarantor is not outstanding in the same currency as the Indebtedness of such Guarantor to such Lender, then such Lender may effect all currency conversions with respect to any such Indebtedness as it considers appropriate in accordance with its normal practices by using its own rate of exchange in effect on the Business Day preceding that on which it exercised its rights under this Section.

6.10 Release of Guarantors

Upon a revocation made by Saputo with respect to a Guarantor pursuant to Section 12.3 of the Credit Agreement becoming effective, the relevant Guarantor shall be automatically released from any obligations or liabilities owed under this Agreement. The Agent shall be authorized, acting alone, to confirm such release, based on the information provided pursuant to subsection 12.3.1 of the Credit Agreement and a certificate of a financial officer of Saputo stating that no Default was in existence on the intended effective date of notice given by Saputo with respect to such revocation (and after giving effect thereto).

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6.11 Limitation on Interest

It is the intention of the parties hereto to comply strictly with applicable usury laws; accordingly, it is stipulated and agreed that the aggregate of all amounts which constitute interest under applicable usury laws, whether contracted for, charged, taken, reserved, or received, in connection with the Guaranteed Obligations shall never exceed under any circumstance whatsoever the maximum amount of interest allowed by applicable usury laws.

6.12 Formal Date

For the purposes of convenience, this Agreement may be referred to as bearing formal date of February ●, 2019 irrespective of the actual date of its execution.

6.13 Language

The parties hereto have specifically required that this Agreement and all related documents be drafted in English. Les parties aux présentes ont expressément requis que la présente convention et tous les documents accessoires soient rédigés en anglais.

IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the date and in the place first hereinabove mentioned.

[Signatures on the following pages]

DOCS 18815952 [Signature page - Guarantee and Subordination Agreement - Washington]

per:

NATIONAL BANK OF CANADA, as Agent, acting on its behalf and as Agent for the Lenders

per:

Corporate Banking 1155 Metcalfe Street 23rd Floor Montréal, Québec H3B 4S9

Attention: Bruno Lévesque, Managing Director Electronic mail: [email protected]

falm016

Typewritten Text

Bruno Lévesque, Managing Director

DOCS 18815952v3

SCHEDULE “A”

SUPPLEMENTAL AGREEMENT

SUPPLEMENTAL AGREEMENT NO. to the GUARANTEE AND SUBORDINATION AGREEMENT (as hereinafter defined), entered into at , as of .

AMONG: , as Guarantor

AND: NATIONAL BANK OF CANADA, as Agent for the Lenders

WHEREAS Saputo Foods Limited, as Borrower, Saputo Inc. as Covenantor, the lenders named therein and National Bank of Canada, as Agent, have entered into a Credit Agreement dated as of February 21, 2019 (which agreement, as same has been or may be further amended, supplemented or restated at any time and from time to time, is hereinafter referred to as the “Credit Agreement”).

WHEREAS in compliance with the requirements of the Credit Agreement, Saputo Inc., Saputo U.S. L.P., Saputo Dairy Products Canada G.P., Saputo Cheese USA Inc., Saputo Dairy Foods USA, LLC and Saputo Dairy Australia Pty Ltd, as Guarantors and National Bank of Canada, as Agent, have entered into a guarantee and subordination agreement, dated as of February 21, 2019 (which guarantee and subordination agreement, as same has been or may be further amended, supplemented or restated from time to time is hereinafter referred to as the “Guarantee and Subordination Agreement”).

WHEREAS it is in the best interest of (hereinafter referred to as the “New Guarantor”) to guarantee the Guaranteed Obligations, the whole in accordance with and subject to the terms and conditions of this Supplemental Agreement.

WHEREAS the parties deem it advisable to supplement the Guarantee and Subordination Agreement to take into account the addition of the New Guarantor as Guarantor.

NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, THE PARTIES HERETO AGREE AS FOLLOWS FOR THE BENEFIT OF THE ADMINISTRATIVE AGENT, ON BEHALF OF THE LENDERS:

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1. DEFINITIONS

Unless otherwise defined or unless there is something in the subject matter or the context inconsistent therewith, all capitalized words and expressions used herein shall have the meaning ascribed to them in the Guarantee and Subordination Agreement.

2. AGREEMENT TO BE BOUND BY THE GUARANTEE

The New Guarantor, by its signature below, becomes Guarantor under the Guarantee and Subordination Agreement with the same force and effect as if originally named therein as Guarantor, and the New Guarantor hereby agrees to abide by all the terms and provisions of the Guarantee and Subordination Agreement applicable to it as Guarantor thereunder (including, without limitation, any waiver contained therein). Each reference to a “Guarantor” in the Guarantee and Subordination Agreement shall be deemed to include the New Guarantor. The Guarantee and Subordination Agreement is hereby incorporated herein by reference.


The New Guarantor hereby represents and warrants that:

3.1 Organization

The New Guarantor (i) is a corporation, partnership or limited liability company duly constituted, validly existing and in good standing under the Laws of its jurisdiction of constitution (to the extent applicable), is duly qualified as a foreign corporation or other organization and in good standing under the laws of each jurisdiction in which it carries on business which requires such qualification, and is in compliance with all provisions of its constating documents and by-laws and (ii) has all requisite power and authority, corporate or otherwise, to own its property and to carry on its business as now being and hereafter proposed to be conducted, in each case except where the failure to have such power or authority or to be so qualified or to be in such good standing, as the case may be, would not have a Material Adverse Effect.

3.2 Authorization of Documents by the New Guarantor

The New Guarantor has the power, and has taken all necessary action, to authorize it to guarantee the obligations of the Borrower under the Credit Agreement pursuant to the terms hereof; the New Guarantor has the power and has taken all necessary action to authorize it to execute, deliver and perform this Supplemental Agreement in accordance with the terms hereof and to consummate the transactions contemplated hereby. This Supplemental Agreement has been duly executed and delivered by the duly authorized officers of the New Guarantor and constitutes legal, valid and binding obligations of the New Guarantor enforceable in accordance with their terms, subject, as to enforcement or remedies, to any applicable bankruptcy, insolvency or other similar Law affecting the

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enforcement of creditors' rights generally, and subject to the limitation that the availability of the remedy of specific performance or injunctive relief is subject to the discretion of the court before which any proceeding therefor may be brought.

3.3 No Conflict

The execution, delivery and performance by the New Guarantor of this Supplemental Agreement, and the consummation of the transactions contemplated hereby do not and will not violate any Law, conflict with, result in a breach of or constitute a default under the constating documents or by-laws of the New Guarantor or under any material agreement or instrument to which it is a party or by which it or any of its property may be bound.


The New Guarantor is not required to obtain any consent, Approval, authorization, permit or license from, or effect any filing or registration with, any federal, provincial, state or local regulatory authority in connection with the execution, delivery and performance by it, in accordance with their respective terms, of this Supplemental Agreement (except those that have been obtained and which are in full force and effect).

3.5 Solvency

The New Guarantor is Solvent.


4.1 Acknowledgement

The New Guarantor hereby acknowledges that it has received and taken cognizance of an original executed copy of the Credit Agreement and the Guarantee and Subordination Agreement and is familiar with all the provisions thereof.

4.2 Counterparts

This Supplemental Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Supplemental Agreement shall become effective when the Agent shall have received a counterpart of this Supplemental Agreement signed by the New Guarantor.

4.3 Guarantee

Except as expressly amended hereby, the Guarantee and Subordination Agreement shall remain in full force and effect.

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4.4 Preamble

The preamble of this Supplemental Agreement shall form an integral part hereof as if at length recited herein.

4.5 Governing Laws

This Supplemental Agreement and the interpretation and enforcement thereof shall be governed by and construed in accordance with the laws selected in the Guarantee and Subordination Agreement.


THE NEW GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS SITTING IN THE JUDICIAL DISTRICT OF MONTREAL FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS SUPPLEMENTAL AGREEMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY. THE NEW GUARANTOR IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.


THE NEW GUARANTOR, THE AGENT AND THE LENDERS IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.

4.8 Notices

4.8.1 Except as otherwise specified herein, all notices, requests, demands or other communications to or upon the respective parties hereto shall be deemed to have been duly given or made to the party to which such notice, request, demand or other communication is required or permitted to be given or made under this Supplemental Agreement, when delivered to such party by acceptable delivery service, by telecopier, by personal delivery or (except for any notice with respect to a Default or a Guarantors’ Event of Default) by electronic mail at its address and attention set forth with its signature below, or at such other address as any of the parties hereto may hereafter notify the others in writing. No other method of giving notice is hereby precluded.

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4.9 Language

The parties hereto have specifically required that this Supplemental Agreement and all related documents be drafted in English. Les parties aux présentes ont expressément requis que la présente convention et tous les documents accessoires soient rédigés en anglais.

IN WITNESS WHEREOF, the New Guarantor has duly executed this Supplemental Agreement No. to the Guarantee and Subordination Agreement as of the date and in the place first hereinabove mentioned.


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, as Guarantor

per:

c/o Saputo Inc. 6869 Métropolitain Blvd. East St-Léonard, Québec H1P 1X8

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DOCS 18815952v3

NATIONAL BANK OF CANADA, as Agent

per:

per:

Corporate Banking 1155 Metcalfe Street 23rd Floor Montréal, Québec H3B 4S9

Attention: Bruno Lévesque, Managing Director Electronic mail: [email protected]

DOCS 18863211v1


SUPPLEMENTAL AGREEMENT NO.1 to the GUARANTEE AND SUBORDINATION AGREEMENT (as hereinafter defined), entered into at _______________, as of February 21, 2019.

AMONG: SAPUTO DAIRY AUSTRALIA PTY LTD ABN 52 166 135 486, as Guarantor


WHEREAS Saputo Foods Limited, as Borrower, Saputo Inc. as Covenantor, the lenders named therein and National Bank of Canada, as Agent, have entered into a Credit Agreement dated as of December 21, 2017 (which agreement, as same has been or may be further amended, supplemented or restated at any time and from time to time, is hereinafter referred to as the “Credit Agreement”).

WHEREAS in compliance with the requirements of the Credit Agreement, Saputo Inc., Saputo U.S., L.P., Saputo Dairy Products Canada G.P., Saputo Cheese USA Inc. and Saputo Dairy Foods USA, LLC, as Guarantors and National Bank of Canada, as Agent, have entered into, inter alios, a guarantee and subordination agreement, dated as of December 21, 2017 (which guarantee and subordination agreement, as same has been or may be further amended, supplemented or restated from time to time is hereinafter referred to as the “Guarantee and Subordination Agreement”).

WHEREAS it is in the best interest of Saputo Dairy Australia PTY LTD ABN 52 166 135 486, (hereinafter referred to as the “New Guarantor”) to guarantee the Guaranteed Obligations, the whole in accordance with and subject to the terms and conditions of this Supplemental Agreement.



Montreal

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DOCS 18863211v1

1. DEFINITIONS





The New Guarantor hereby represents and warrants that:

3.1 Organization

The New Guarantor (i) is a corporation, partnership or limited liability company duly constituted, validly existing and in good standing under the Laws of its jurisdiction of constitution (to the extent applicable), is duly qualified as a foreign corporation or other organization and in good standing under the laws of each jurisdiction in which it carries on business which requires such qualification, and is in compliance with all provisions of its constating documents and by-laws and (ii) has all requisite power and authority, corporate or otherwise, to own its property and to carry on its business as now being and hereafter proposed to be conducted, in each case except where the failure to have such power or authority or to be so qualified or to be in such good standing, as the case may be, would not have a Material Adverse Effect.


The New Guarantor has the power, and has taken all necessary action, to authorize it to guarantee the obligations of the Borrower under the Credit Agreement pursuant to the terms hereof; the New Guarantor has the power and has taken all necessary action to authorize it to execute, deliver and perform this Supplemental Agreement in accordance with the terms hereof and to consummate the transactions contemplated hereby. This Supplemental Agreement has been duly executed and delivered by the duly authorized officers of the New Guarantor and constitutes legal, valid and binding obligations of the New Guarantor enforceable in accordance with their terms, subject, as to enforcement or

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DOCS 18863211v1

remedies, to any applicable bankruptcy, insolvency or other similar Law affecting the enforcement of creditors' rights generally, and subject to the limitation that the availability of the remedy of specific performance or injunctive relief is subject to the discretion of the court before which any proceeding therefor may be brought.

3.3 No Conflict




3.5 Solvency



4.1 Acknowledgement


4.2 Counterparts


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DOCS 18863211v1

4.3 Guarantee


4.4 Preamble


4.5 Governing Laws






4.8 Notices

4.8.1 Except as otherwise specified herein, all notices, requests, demands or other communications to or upon the respective parties hereto shall be deemed to have been duly given or made to the party to which such notice, request, demand or other communication is required or permitted to be given or made under this Supplemental Agreement, when delivered to such party by acceptable delivery service, by telecopier, by personal delivery or (except for any notice with respect to a Default or a Guarantors’ Event of Default) by electronic mail at its address

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and attention set forth with its signature below, or at such other address as any of the parties hereto may hereafter notify the others in writing. No other method of giving notice is hereby precluded.


4.9 Language


IN WITNESS WHEREOF, the New Guarantor has duly executed this Supplemental Agreement No.1 to the Guarantee and Subordination Agreement as of the date and in the place first hereinabove mentioned.


DOCS 18863211 [Signature page - Supplemental Agreement to Guarantee and Subordination Agreement (December 21, 2017)]


per:

per:

Corporate Banking 1155 Metcalfe Street 23rd Floor Montreal, Quebec H3B 4S9

To the attention of: Bruno Lévesque, Managing Director Electronic mail: [email protected]

DOCS 18867665v1


SUPPLEMENTAL AGREEMENT NO. 2 to the GUARANTEE AND SUBORDINATION AGREEMENT (as hereinafter defined), entered into at __________________, as of February 21, 2019.

AMONG: SAPUTO DAIRY AUSTRALIA PTY LTD ABN 52 166 135 486, as Guarantor


WHEREAS Saputo Inc., Saputo Foods Limited, Saputo Dairy Products Canada G.P., Saputo Acquisition, Inc., Saputo Cheese USA Inc. and Saputo U.S., L.P., as Borrowers, the lenders named therein and National Bank of Canada, as Agent, have entered into a Second Amended and Restated Credit Agreement dated as of August 1, 2012 (which agreement, as same has been or may be further amended, supplemented or restated at any time and from time to time, including by way of an increase of the credit facilities provided therein, is hereinafter referred to as the “Credit Agreement”).

WHEREAS in compliance with the requirements of the Credit Agreement, Saputo Inc., Saputo Foods Limited, Saputo Dairy Products Canada G.P., Saputo Cheese USA Inc. and Saputo U.S., L.P., as Guarantors and National Bank of Canada, as Agent, have entered into, inter alios, a guarantee and subordination agreement, dated as of August 1, 2012 (which guarantee and subordination agreement, as same has been or may be further amended, supplemented or restated from time to time is hereinafter referred to as the “Guarantee and Subordination Agreement”).

WHEREAS it is in the best interest of Saputo Dairy Australia PTY LTD ABN 52 166 135 486 (hereinafter referred to as the “New Guarantor”) to guarantee the Guaranteed Obligations, the whole in accordance with and subject to the terms and conditions of this Supplemental Agreement.



Montreal

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DOCS 18867665v1

1. DEFINITIONS





The Borrowers and the New Guarantor do hereby represent and warrant that:

3.1 Organization

The New Guarantor (i) is a corporation, partnership or limited liability company duly constituted, validly existing and in good standing under the Laws of its jurisdiction of constitution (to the extent applicable) , is duly qualified as a foreign corporation or other organization and in good standing under the laws of each jurisdiction in which it carries on business which requires such qualification, and is in compliance with all provisions of its constating documents and by-laws and (ii) has all requisite power and authority, corporate or otherwise, to own its property and to carry on its business as now being and hereafter proposed to be conducted, in each case except where the failure to have such power or authority or to be so qualified or to be in such good standing, as the case may be, would not have a Material Adverse Effect.


The New Guarantor has the power, and has taken all necessary action, to authorize it to guarantee the obligations of the Borrowers under the Credit Agreement and any Derivative Instruments pursuant to the terms hereof; the New Guarantor has the power and has taken all necessary action to authorize it to execute, deliver and perform this Supplemental Agreement in accordance with the terms hereof and to consummate the transactions contemplated hereby. This Supplemental Agreement has been duly executed and delivered by the duly authorized officers of the New Guarantor and constitutes legal, valid and binding obligations of the New Guarantor enforceable in accordance with their terms, subject, as to enforcement or remedies, to any applicable bankruptcy, insolvency or other similar Law affecting the enforcement of creditors' rights generally, and subject to the limitation that the availability of the remedy of specific performance or injunctive

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DOCS 18867665v1

relief is subject to the discretion of the court before which any proceeding therefor may be brought.

3.3 No Conflict




3.5 Solvency



4.1 Acknowledgement


4.2 Counterparts


4.3 Guarantee


4.4 Preamble


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DOCS 18867665v1

4.5 Governing Laws






4.8 Notices

4.8.1 Except as otherwise specified herein, all notices, requests, demands or other communications to or upon the respective parties hereto shall be deemed to have been duly given or made to the party to which such notice, request, demand or other communication is required or permitted to be given or made under this Supplemental Agreement, when delivered to such party by acceptable delivery service, by telecopier, by personal delivery or (except for any notice with respect to a Default or a Guarantors’ Event of Default) by electronic mail at its address and attention set forth with its signature below, or at such other address as any of the parties hereto may hereafter notify the others in writing. No other method of giving notice is hereby precluded.

4.8.2 Any notice, request, demand or other communication given by personal delivery or by a delivery service will be conclusively deemed to have been delivered at the time of such delivery and, if given by telecopier or by electronic mail, on the day of transmittal if before 3:00 p.m. on a Business Day, or on the following Business Day if such transmission occurs on a day which is not a Business Day or after 3:00 p.m. on a Business Day. If the telecopy or the electronic transmission system suffers any interruption by way of strike, slowdown, force majeure, or any other

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cause, the party giving a notice, request, demand or other communication must do so using another means of communication not affected by the disruption.

4.9 Language


IN WITNESS WHEREOF, the New Guarantor has duly executed this Supplemental Agreement No. 2 to the Guarantee and Subordination Agreement as of the date and in the place first hereinabove mentioned.


18867665

DOCS 18867665 [Signature page - Supplemental Agreement to Guarantee and Subordination Agreement (August 1, 2012)]


per:

per:

Corporate Banking 1155 Metcalfe Street 23rd Floor Montreal, Quebec H3B 4S9

To the attention of: Bruno Lévesque, Managing Director Electronic email: [email protected]

falm016

Typewritten Text

Jonathan Campbell, Director