Item 1.01. Entry into a Material Definitive
Agreement.
On December 20, 2022, the Company entered into
an amended and restated revolving credit facility (the “Revolver”) with Bank of Montreal (“BMO”) pursuant to which
the maturity date of the Revolver was extended from July 31, 2024 to December 31, 2025 and a credit limit of US$50 million was re-established,
consistent with the original Revolver entered into on July 12, 2021. The Revolver includes an accordion feature providing up to an additional
US$25 million of credit (the “Accordion”), subject to certain conditions. After the Company made a US$4 million repayment
prior to closing, the balance outstanding on the Revolver is US$9 million with US$41 million available for advance.
Advances under the Revolver
bear interest at a variable index-based rate per year together with a margin based on the Company’s total debt to earnings before
interest, taxes, depreciation and amortization (EBITDA) ratio (the “Leverage Ratio”). The margin ranges from 3.00% to 4.00%
or 2.00% to 3.00% depending on the Leverage Ratio and the index selected by the Company.
The Revolver contains
affirmative and negative covenants that are customary for agreements of this nature. The affirmative covenants require the Company to
comply, at all times, with, among other things, a Leverage Ratio not greater than 3.00 to 1.00, with EBITDA calculated upon a trailing
four fiscal quarter period, a liquidity covenant not less than $20.0 million and an interest coverage ratio not less than 4.00 to 1.00
calculated based on a trailing four fiscal quarter period. The negative covenants include, among other things, limitations on certain
specified asset sales, mergers, acquisitions, indebtedness, liens, dividends and distributions, investments and transactions with affiliates.
The Revolver also contains covenants requiring to the Company to provide the lenders with audited annual, and certain unaudited quarterly,
financial statements for the Los Gatos Joint Venture and the Company in respect of the years ended December 31, 2021 and December 31,
2022 by April 15, 2022 and April 30, 2022 respectively.
The Revolver also includes
customary events of default that are subject to customary curing provisions and include, among other things, defaults for non-payment,
inaccuracy of representations and warranties, covenant breaches, defaults under other material indebtedness and material agreements, bankruptcy
and insolvency, entry of material judgments, disruption in or abandonment of operations, loss of certain licenses and a change of control.
Following the occurrence of an event of default, the lenders under the Revolver can terminate the commitments and demand the immediate
repayment in full of all amounts due thereunder.
The foregoing description
of the Revolver is not complete and is qualified in its entirety by reference to the full text of the agreement, which is filed herewith
as Exhibit 10.1 and incorporated herein by reference in its entirety.