Freshlocal Solutions Inc. announced that it has entered into a loan and security agreement with a group of strategic lenders, pursuant to which the Lenders have agreed to advance $7,000,000 (the "Loan") to Freshlocal, to support the Company's ongoing financial and operational transformation, and to ultimately replace Silicon Valley Bank (the "Bank") as the Company's senior lender. The proceeds of the Loan will be used to immediately repay a portion of the Company's existing loan with the Bank and to fund operations. Pursuant to the terms of the Loan Agreement, the Loan bears interest at a rate of 10.0% per annum, payable quarterly in arrears, and matures on September 30, 2023 (the "Maturity Date").

At the Company's option, accrued interest at each interest payment date may be paid in kind (a "PIK Interest Payment") by capitalizing such interest and increasing the principal amount of the Loan. Any PIK Interest Payments will bear interest at a rate of 12.5% per annum. The Loan Agreement permits, subject to certain conditions, the Lenders, and for other persons arranged by the Lenders, to increase the principal amount of the Loan by up to $3,000,000 (the "Additional Funding") and provides the Lenders with the right to nominate an individual to the board of directors of the Company (the "Nomination Right").

In addition, the Loan Agreement includes certain covenants by the Company to use net proceeds from the divestiture of certain material assets of the Company to repay the Bank and the Lenders, as set out therein, as well as other customary representations, warranties, covenants and conditions in respect of secured credit facilities. Upon repayment of all outstanding amounts to the Bank, the Lenders will become the Company's new senior lenders. In connection with the Loan Agreement, the Company issued to each Lender 400 common share purchase warrants (each, a "Warrant") for each $1,000 principal amount of the Loan advanced by such Lender.

Each Warrant entitles the holder thereof to purchase one common share of the Company at an exercise price of $0.45 per share until the Maturity Date. The Warrants, including any shares issued upon exercise of the Warrants, are subject to a four (4) month hold period as prescribed by the Toronto Stock Exchange and applicable securities laws.