SCHEDULE I

TO

ARTICLES OF AMENDMENT

OF

BREWERS RETAIL INC.

(the “Corporation”)

The total number of shares of all classes of shares that the Corporation shall have authority to issue is: (i) an unlimited number of First Equity Shares (the “First Equity Shares”), issuable in up to two hundred (200) series of one hundred (100) shares each; and (ii) up to ten thousand (10,000) Second Equity Shares (the “Second Equity Shares”).

The rights, privileges, restrictions and conditions of each class of shares in the capital of the Corporation are as set out in this Schedule I.

ARTICLE 1
INTERPRETATION

1.1 Definitions

(a) “Act” means the Business Corporations Act (Ontario), as amended from time to time, including any successor legislation.

(b) “Accumulated Capital” means, in respect of a series of First Equity Shares, the accumulated amount of the notional capital account maintained in respect of such series of First Equity Shares in accordance with Section 2.7.

(c) “Accumulated Capital Percentage” means, in respect of a series of First Equity Shares, the percentage that the Accumulated Capital in respect of such series of First Equity Shares represents of the Total Accumulated Capital.

(d) “Affiliate” means, with respect to a party, any person, firm, corporation, partnership (including general partnerships, limited partnerships and limited liability partnerships), limited liability company, joint venture, business trust, association or other entity that, directly or indirectly, Controls, is Controlled by or is under common Control with such party.

(e) “Annual Beer Volume” means, in respect of a series of First Equity Shares, the annual volume of Qualifying Sales of the holder of such series (inclusive of its Affiliates) that is produced at a facility in Ontario or imported into Ontario in accordance with the Inter-Plant Shipments Policy of the Liquor Control Board of Ontario, as it may exist from time to time.

(f) “Assets” means the total assets of the Corporation and its subsidiaries as determined in accordance with IFRS, consistently applied.

(g) “Asset Liquidation Amount” means an amount equal to any net change in the Net Book Value resulting from any net accounting profit or loss recognized (for clarity, after tax and after direct selling costs incurred on the sale) on the disposition of Assets that were held by the Corporation on the Initial Book Value Date (for clarity, excluding any net change in the Net Book Value resulting from any net accounting profit or loss recognized on the disposition of any Assets acquired by the Corporation after the Initial Book Value Date).

(h) “Basic Fees” means fees charged by the Corporation to brewers that sell BeerThrough the Corporation for the performance by the Corporation of Basic Services.

(i) “Basic Services” means those services provided by the Corporation to brewers that sell Beer Through the Corporation that it describes as basic services, including ordering stock, receiving palletized stock at distribution centres or stores, selling over the counter, delivering to special occasion permit holders, delivering to Licensees, purchasing and palletizing empty containers, rotating stock, and providing periodic information to the brewer on sales of products per store.

(j) “Beer” has the meaning set out in the Liquor Licence Act (Ontario), as amended from time to time, including any successor legislation.

(k) “Book Value” means the net amount at which the Assets, Liabilities or Pension Obligations, as the case may be, are carried on the books of the Corporation in accordance with IFRS, consistently applied.

(l) “Brewer” means a Person that manufactures Beer.

(m) “Cash Pension Payments” means the portion of the total cash contributions made by the Corporation and its subsidiaries, to fund defined benefit pension plans for salaried and hourly paid employees of the Corporation and its subsidiaries, that relates to solvency amortization payments.

(n) “Control” means:

(i) in relation to a corporation, the beneficial ownership at the relevant time of shares of such corporation carrying more than 50% of the voting rights ordinarily exercisable at meetings of shareholders of the corporation where such voting rights are sufficient to elect a majority of the directors of the corporation; and

(ii) in relation to a Person that is a partnership, limited partnership, limited liability company or joint venture, the beneficial ownership at the relevant time of more than 50% of the ownership or voting interests of the partnership, limited partnership, limited liability company or joint venture in circumstances where it can reasonably be expected that the Person can direct the affairs of the partnership, limited liability company or joint venture;

and the words “Controlled by”, “Controlling” and similar words have corresponding meanings; the Person who Controls another Person shall be deemed to Control a corporation, partnership, limited liability company, joint venture or trust which is Controlled by such other Person, and so on.

(o) “Effective Date” means September 1, 2015.

(p) “Eligible Qualifying Brewer” means a Qualifying Brewer that is (i) located or resident in the Province of Ontario and eligible to acquire First Equity Shares pursuant to the OSC Order, (ii) located or resident in a province or territory of Canada other than the Province of Ontario and eligible to acquire First Equity Shares pursuant to an exemption from prospectus requirements generally available under the applicable securities laws of that province or territory, or (iii) neither located nor resident in Canada and that is eligible to acquire First Equity Shares pursuant to an exemption from the prospectus, registration or qualification requirements applicable under the securities laws of the jurisdiction outside of Canada in which the Qualifying Brewer is located or resident.

(q) “First Equity Liquidation Amount” means an amount equal to:

(i) the aggregate increase, if any, in the Net Book Value from the Initial Book Value Date to the date of the Liquidation Event;

less

(ii) the Asset Liquidation Amount, if any (for clarity, to the extent that the Asset Liquidation Amount is a negative number, the absolute value of the Asset Liquidation Amount shall be added to (i));

and less

(iii) the amount, if any, by which the Book Value of the Pension Obligations has decreased from the Initial Book Value Date to the date of the Liquidation Event, other than as a result of Cash Pension Payments.

(r) “IFRS” means International Financial Reporting Standards as issued by the International Accounting Standards Board, applicable as at the date on which the relevant calculation or action is made or taken or required to be made or taken in accordance with IFRS.

(s) “Initial Book Value Date” means December 31, 2014.

(t) “Liabilities” means liabilities of the Corporation and its subsidiaries as determined in accordance with IFRS, consistently applied.

(u) “Licensee” means a Person holding a liquor sales licence issued under the Liquor Licence Act (Ontario).

(v) “Liquidation Event” means:

(i) any voluntary or involuntary liquidation, dissolution or winding-up of the affairs of the Corporation or other distribution of assets of the Corporation among its shareholders for the purpose of winding up its affairs; or

(ii) a sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the Corporation.

(w) “Net Book Value” means the Book Value of the Assets less the Book Value of the Liabilities.

(x) “New Outlets” shall having the meaning assigned to it for purposes of the Master Framework Agreement entered into in 2015 between the Corporation, the Original Owners and Her Majesty the Queen in Right of Ontario.

(y) “Other Fees” means fees charged by the Corporation to brewers that sell Beer Through the Corporation for the performance by the Corporation of any services that are not Basic Services.

(z) “Original Owners” means Labatt Brewing Company Limited, Molson Canada 2005 and Sleeman Breweries Ltd.

(aa) “OSC Order” means the decision of the Ontario Securities Commission rendered on ●, 2015 in response to an application filed by the Corporation pursuant to section 74(1) of the Securities Act (Ontario) confirming that the prospectus requirement contained in section 53(1) of the Securities Act (Ontario) will not apply to the issuance, from time to time, of First Equity Shares to Eligible Qualifying Brewers located or resident in the Province of Ontario.

(bb) “Pension Obligations” means the pension benefit liability of the Corporation and its subsidiaries, if any, determined in accordance with IFRS and recognized on the Corporation’s balance sheet.

(cc) “Pension Adjustment Per Hectolitre” means the solvency amortization portion of the aggregate cash pension payments of the Corporation in any particular year divided by the number of hectolitres of Beer sold Through the Corporation in that year.

(dd) “Percentage Entitlement” means, in respect of a series of First Equity Shares, the percentage that the Annual Beer Volume in respect of such series of First Equity Shares in the preceding calendar year represents of the Total Annual Beer Volume in respect of such preceding calendar year.

(ee) “Person” means any individual, sole proprietorship, partnership, firm, entity, unincorporated association, unincorporated syndicate, unincorporated organization, trust, body corporate, limited liability company, unlimited liability company, government, government regulatory authority, governmental department, agency, commission, board, tribunal, dispute settlement panel or body, bureau, court and, where the context requires, any of the foregoing when they are acting as trustee, executor, administrator or other legal representative.

(ff) “Qualifying Brewer” means a Brewer that operates one or more facilities manufacturing Beer in Ontario, sells Beer Through the Corporation and satisfies the following criteria:

(i) it has a valid Ontario manufacturing licence issued by the Regulator;

(ii) it has a valid Canadian manufacturing licence issued by the Canada Revenue Agency;

(iii) it conducts the full brewing process up to the point of packaging, including mashing, lautering, boiling, hop separation and fermentation, in its Ontario Beer manufacturing facilities; and

(iv) it either (A) does not produce Beer in any other jurisdiction or (B) its Ontario Beer manufacturing facilities have a minimum annual capacity of 10,000 hectolitres of Beer in the aggregate and a minimum annual production of 2,500 hectolitres of Beer in the aggregate.

(gg) “Qualifying Sales” means sales of Beer by volume Through the Corporation.

(hh) “Regulator” means the Liquor Control Board of Ontario, the Alcohol and Gaming Commission of Ontario and any other Ontario government authority or agent of the Province of Ontario having jurisdiction over the sale, storage, distribution or consumption of beverage alcohol, or their successors.

(ii) “Shareholders Agreement” means any shareholders agreement between the Corporation and all of its shareholders in force from time to time, including the unanimous shareholder agreement between the Corporation and its shareholders entered into in 2015, as amended or restated from time to time.

(jj) “Total Accumulated Capital” means the aggregate Accumulated Capital in respect of all issued and outstanding series of First Equity Shares.

(kk) “Total Annual Beer Volume” means the aggregate Annual Beer Volume in respect of all series of First Equity Shares.

(ll) “Through the Corporation” means (subject to amendment in accordance with Section 6.7 of the Shareholders Agreement entered into in 2015) when used in relation to sales of Beer, sales by a holder of a particular series of First Equity Shares and its Affiliates (including domestic and imported Beer manufactured by, produced for or distributed by that holder and its Affiliates) through the Corporation to Licensees and retail consumers, and in respect of sales through the Corporation to the LCBO (including northern agency stores and retail partners), one-half of the volume of such sales, but for clarity excluding sales of Beer to or through New Outlets.

ARTICLE 2
FIRST EQUITY SHARES, ISSUABLE IN SERIES

2.1 Unlimited Number of Series

The First Equity Shares shall be issuable from time to time in up to two hundred (200) series. The two hundred (200) series of First Equity Shares shall be designated consecutively the “Series 1 First Equity Shares”, the “Series 2 First Equity Shares”, the “Series 3 First Equity Shares” and so on through to and including the “Series 200 First Equity Shares”.

2.2 Number in each Series

The Corporation shall issue exactly 100 First Equity Shares of each series that it issues. Each Eligible Qualifying Brewer subscribing for First Equity Shares shall be issued a separate series of First Equity Shares.

2.3 Terms of each Series

The terms of each series of First Equity Shares shall be identical. However, the rights and privileges that may be exercised by the holders of different series of First Equity Shares shall differ in accordance with the provisions of this Article 2 of this Schedule I.

2.4 Qualifying Brewer

If a Qualifying Brewer and its Affiliates become the beneficial owner or owners of more than one series of First Equity Shares, the Corporation shall redeem all but one series of First Equity Shares held by such Qualifying Brewer and its Affiliates by payment to such Qualifying Brewer of the original subscription price of such First Equity Shares so redeemed. The Accumulated Capital in respect of any series of First Equity Shares so redeemed in accordance with this Section 2.4 shall be added to the Accumulated Capital in respect of the remaining series of First Equity Shares held by such Qualifying Brewer and its Affiliates.

2.5 Dividends

(a) The First Equity Shares (Series 1 First Equity Shares through to Series 200 First Equity Shares, inclusive) shall be entitled to receive dividends, if, as and when any dividends are declared by the Board.

(b) The issued and outstanding series of First Equity Shares shall participate in any dividends in proportion to their respective Percentage Entitlements.

(c) The Corporation shall not declare any dividends or make any distributions on the First Equity Shares without first obtaining any approvals required under the Act and any Shareholders Agreement in force.

2.6 Voting

Subject to any Shareholders Agreement in force, on any matter presented to the shareholders of the Corporation for their action or consideration at any meeting of shareholders of the Corporation:

(a) the holders of all issued and outstanding series of First Equity Shares shall, in the aggregate, be entitled to cast 100 votes (the “Total Votes”);

(b) each holder of a series of First Equity Shares shall be entitled to cast that number of the Total Votes as shall be equal to the Percentage Entitlement of such holder multiplied by the number of Total Votes, with fractional votes being permitted; and

(c) the holder of any series of First Equity Shares shall not be entitled to cast any votes if such holder is not a Qualifying Brewer on the date of the vote.

2.7 Notional Capital Accounts

(a) The Corporation shall maintain a notional capital account in respect of each series of First Equity Shares, as further described in this Section 2.7.

(b) Subject to Sections 2.7(c) and 2.7(d), the Corporation shall add to the notional capital account maintained in respect of each series of First Equity Shares the aggregate amount of all Basic Fees and Other Fees paid to the Corporation from and after the Effective Date in respect of Qualifying Sales relating to the holder of such series of First Equity Shares.

(c) Notwithstanding Section 2.7(b), for so long as the Shareholders Agreement entered into in 2015 (as it may be amended in accordance with its terms) remains in force, there shall not be added to the notional capital accounts maintained in respect of any series of First Equity Shares held by an Original Owner any amount of Basic Fees paid by such Original Owner pursuant to section 6.3(a)(iii)(B) of the Shareholders Agreement.

(d) Each notional capital account maintained in respect of a series of First Equity Shares held by any Qualifying Brewer other than an Original Owner shall, to the extent the Basic Fees paid by the holder of such series include any amounts in respect of the Pension Adjustment Per Hectolitre, be increased by the lesser of:

(i) such amounts paid by such holder in respect of the Pension Adjustment Per Hectolitre; and

(ii) the Percentage Entitlement of such series of First Equity Shares to the amount of any reduction in the Book Value of the Pension Obligations that does not result from Cash Pension Payments (in the aggregate).

2.8 Liquidation, Dissolution or Winding-up

(a) The holders of the First Equity Shares (Series 1 First Equity Shares through to Series 200 First Equity Shares, inclusive) shall, upon a Liquidation Event, be entitled to receive from the assets of the Corporation the First Equity Liquidation Amount, if any, in proportion to the respective Accumulated Capital Percentages of their respective series of First Equity Shares. The holders of the First Equity Shares (Series 1 First Equity Shares through to Series 200 First Equity Shares, inclusive) shall not be entitled to receive any further amounts upon a Liquidation Event after they have received payment of the First Equity Liquidation Amount.

(b) If upon any such Liquidation Event, the assets of the Corporation available for distribution to its shareholders are insufficient to pay to the holders of First Equity Shares the full amount of the First Equity Liquidation Amount, the holders of First Equity Shares (Series 1 First Equity Shares through to Series 200 First Equity Shares, inclusive) shall share rateably in any distribution of the Assets available for distribution to its shareholders in proportion to the Accumulated Capital Percentages of their respective series of First Equity Shares.

(c) The First Equity Shares shall rank senior to the Second Equity Shares with respect to the payment of the First Equity Liquidation Amount upon any Liquidation Event.

2.9 Redemption

(a) Each holder of First Equity Shares (Series 1 First Equity Shares through to Series 200 First Equity Shares, inclusive) shall have the right to require the Corporation to redeem all (but not less than all) of such holder’s First Equity Shares by payment to such holder of the original subscription price of such First Equity Shares.

(b) If any holder of First Equity Shares (Series 1 First Equity Shares through to Series 200 First Equity Shares, inclusive) (i) makes an assignment for the benefit of creditors, (ii) is the subject of any proceedings under any bankruptcy or insolvency law, (iii) avails itself of the benefit of any other legislation for the benefit of debtors or (iv) takes steps to wind up or terminate its corporate existence other than in connection with a corporate reorganization that results in the shares of the Corporation held by such holder being held by a successor or continuing entity, the Corporation shall redeem the First Equity Shares held by such holder.

ARTICLE 3
SECOND EQUITY SHARES

3.1 Dividends

The holders of the Second Equity Shares shall not be entitled to receive dividends.

3.2 Voting

Except as otherwise provided in the Act, the holders of the Second Equity Shares shall not be entitled to receive notice of, or to attend or to vote at, any meeting of the shareholders of the Corporation.

3.3 Liquidation, Dissolution or Winding-up

The Second Equity Shares shall rank junior to the First Equity Shares with respect to the payment of the First Equity Liquidation Amount upon the distribution of Assets upon a Liquidation Event. The holders of the Second Equity Shares are entitled to share rateably based on the number of Second Equity Shares held by such holders in any distribution of Assets to shareholders of the Corporation after payment of the First Equity Liquidation Amount to holders of the First Equity Shares on a Liquidation Event.