This is the 2nd affidavit of Krystal Shayler in this case and was made on 28/Sep/2020

No. S209201 Registry

In the Supreme Court of

IN THE MATTER OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED

AND

IN THE MATTER OF MOUNTAIN EQUIPMENT CO-OPERATIVE AND 1314625 ONTARIO LIMITED

Petitioners AFFIDAVIT

I, KRYSTAL SHAYLER, of 1800- 510 West Georgia Street, Vancouver, British Columbia, Legal Assistant, SWEAR (OR AFFIRM) THAT:

1. I am a legal assistant employed by Norton Rose Fulbright LLP solicitors of record for Mountain Equipment Co-operative and 1314625 Ontario Limited (the "Petitioners"), and, as such , have personal knowledge of the facts and matters hereinafter deposed to save except where the same are stated to be based on information and belief, and where so stated, I believe them to be true.

2. Now attached and marked as Exhibit "A" to this my Affidavit is a true copy of a letter dated September 26, 2020 from Howard A. Gorman, QC , counsel for the Petitioners, to Philip Cho , counsel for Plateau Village Properties Inc. , attaching the following documents:

(a) List of 66 potential lenders contacted;

(b) Initial teaser/contact letter;

(c) List of potential bidders contacted;

(d) Index of Documents in the data room , including schedule of lease documents;

( e) Teaser Letter;

(f) Phase 1 letter; and

(g) Phase 2 Letter. 2

3. Now attached and marked as Exhibit “B” to this my Affidavit is a true copy of a screenshot from the Canadian Co-operative Investment Fund website https://ccif.coop/products! stating that they provide various loan products from $50,000 to $1,250,000.

SWORN (AFFIRMED) BEFORE ME at

Vancouver, British Columbia, on ) 28/020, ) )

A Commissioner for taking ) KRYSTAL SHA Affidavits for British Columbia

SCOTTBOUCHER BARRISTER& SOLICITOR CANADALLP NORTONROSE FULBRIGHT STREET SUITE 1800-510 WEST GEORGIA VANCOUVER,B.C. V66 0M3 (604) 641-4920 I

This Exhibit “A” referred to in the Affidavit No. 2 of Krystal Shayler

A Commissioner for Taking Affidavits for British Columbia 2 A NORTONROSEFULBRIGHT

Barristers & Soheilors / Patent &Trade-mark Agents September 26, 2020 Norton Rose Fuibright Canada LLP 1800- 510 West Georgia Street Sent By E-mail ([email protected]) Vancouver, BC V6B 0M3 CANADA

F: +1 604.641.4949 WeirFoulds LLP nortonrosefulbright.com 4100 - 66 Wellington Street West Toronto, ON M5K 1B7 Howard A. Gorman, QC +1 403 267 8144 Attention: Philip Cho [email protected]

Assistant +14032678194 roberta.savardnortonrosefulbright.com

Your reference Our reference [YourRef] 1001118436

Dear Sirs/Mesdames:

In the Matter of Mountain Equipment Co-operative and 1314625 Ontario Limited (“MEC”), SCBC No. S209201, Vancouver Registry

We write in response to your expansive document request of yesterday afternoon. A copy of this reply is being distributed to the service list and will be provided to the Court through a secretarial Affidavit on Monday morning.

I fear that the expansive list of document demands matches the feared fishing expedition” I had foretold in my prior correspondence to you and in my Court submissions on Thursday afternoon.

Contrary to your suggestion, the requests extend far, far beyond what would have been included in Court materials had the SISP proceeded post filing.

As to the urgency of the situation, the series of limited Lenders’ extensions while reducing the borrowing base are well documented on the record. The Lenders’ requirement that they be repaid on closing has been disclosed.

While no notices of default , demands nor notices under s. 244(1) of the Bankruptcy and Insolvency Act were received, you will have seen the series of extending and amending agreements negotiated virtually bi-monthly with the Lenders since the spring and the conditions set out therein. The Lenders also placed MEC under cash dominion earlier this month.

MEC, it’s solicitors and financial advisors, were in constant contact through both the refinancing and subsequent SISP Process. With respect to the re-financing initiative, attached with respect to certain of your inquiries are the following:

• List of 66 potential lenders contacted; and • Initial teaser/contact letter.

The outcome was that no viable refinancing could be arranged.

As set out in the filed materials, the Petitioners and the Financial Advisor then pivoted to a SISP process. In that regard, we attach hereto:

• List of potential bidders contacted;

Norton Rose Fuibright canada LLP is a limited liability partnership established in canada.

Norton Rose Fulbnght Canada LLP. Nortsn Rose Fulbright LLP, Norton Rose Fulbright Australia, Norton Rose Fulbright South Africa Inc and Norton Rose Fulbright US LLP are separate legal entities and all of them are members of Norton Rose Futbright verein, a Swiss verein. Norton Rose Fulbright Verein helps coordinate the activities of the members but does not itself provide legal services to clients. Detaits of each entity, with certain regulatory information, are at nortonrosefutbright.com. 3 A NORTON ROSE FULBRIGHT

• Index of Documents in the data room, including schedule of lease documents; • Teaser Letter; • Phase 1 letter; and • Phase 2 Letter.

All leases, including your client’s, were available in the SISP data room. No bidder ever indicated a willingness that it would assume your client’s lease location (nor those of the other initial disclaimed leases) This should not come as a surprise to your client or your offices as MEC had previously and repeatedly expressed its reluctance to occupy the North West Store premises, and the response from your office was threatened multi- million dollar litigation against MEC. The Calgary North West Store location has no operations, inventory nor employees. Nor has MEC taken possession of that property. The same is true regarding the Saskatoon Store location.

We have not included the draft APA that was posted as I fail to see how the draft APA template for bidders to

mark up in their bids is of any relevance, as the only APA executed is the Kingswood version in the materials. I can confirm, however, that the draft APA provided to potential bidders sought particulars as to how many locations, employees and operations would be assumed.

As disclosed, one factor in preferring the Kingswood bid was their agreement to maximize the number of retail locations (and thereby employees, supplier continuity and member access).

As noted in the First Wallis Affidavit, the Special Committee met over 40 times, often involving counsel who would provide legal advice. Those minutes will not be produced, nor will minutes of the full board meetings, which also often included privileged discussions.

In conclusion, we again note none of your requests alter the outcome that all bidders agreed with the prior disclosed position of MEC management that the Calgary North West Store proposed location was not viable on a go forward basis and would not be assumed going forward.

Yours truly

Yours very truly,

Per:

For

Howard A. Gorman, QC Senior Partner

Copies to: Christopher Ramsay and Katie Mak H. Lance Williamsand Mary l.A. Buttery,Q.C. MEC The Service List

2 4

Project Climb Sales Procesu - Contacted Parties Advent International Cleorloke Capital Group Flolditall OMERS Sycamore Portners Alter Ego Capital Clearspring Capitol Partuers Home Hardware ONCAP IONEX) TA Associates Auto Cleanue Partners HGGPP OpeuGate Capital Teachers’ Private Capitol Apax Capitol Portuers Colbeck Capitol RICO OPTrttst Private Markets Tengcom Capitol Partners Apolio Global Monogement Comvest Partners Imperial Capital PAG The Blockstone Group Ardeutou CPPIB Iroubridge Pollodin Cousumer Retail The Corlyle Group Ares Manogeioent Critical Poiut Capitol In ing Place Capitol Pomplona Capitol The luvus Group Ateriau Investment Portuers Decathlon Jomco Capitol Porollel4S Equity The Group Authentic Bronds Group Delos Capitol Kothmondn Patriarch Partners The Jordon Conspony Banyon Capitol Partners Dick’s Sporttng Goods Kilmer Capitol Portners Peak Rock Capitol Thomas H. Lee Portuers Boss Pro Shaps Cabelos Dominus Capitol Ktngsssood Capital Pelham Street Capitol TorQuest Portners BC Partners Eagle Merchant Portnen Kohlberg Kravis Roberts Peloton Capital Tosser Three Portners Beoconhouse Capital Euroeeo Idinsest L Cotterton Peninsulo Pacific Tosverbrook Bedford Capital EVO Lontern Asset Xlonogement Platinum Equity TPG Capitol Bessemer Investors Fairfax Finonciol Holdings Lee Equity Partners PointNorth Capital Tronsans Capitol Group Birch Hill Eqaity Partners Firelight Capitol Leanard Green & Partners Primavera Tricnr Pocific Capital Boyti Fosan Fashion Brond Monogement Li Ning REI Trise Capital Bregal Partners Frosers Groap ISparts Direct) Linsalato Capitol Partners Roark Capital Group Tri\Vest Capitol Brentsvood Associates Gouge Copitol Lian Capital Rosser Capitol Partners TSG Consumer Partners Bconkfield Gemspring Lunar Capitol Sogord Copitol Tnmspire Capital Partners Bruckmann Rosser Sherrill Gibraltor Capitol \Iorlin Equity Partners Sonkaty Advisors Varshney Capitol CAl Golden Gate Copitol McCain Copital Portners Searchlight Capitol Versa Capital Management Caisse depot Goldnson Sochs Pris ate Equity \IidGcean Partners Sentinel Capitol Partners Victory Pork Capital Camping VnrId Gordon Brothers Mistral Equity Portners Signsa Partners Warburg Pincus Canadian Business Grooth Fund Gores Gronp Nlonamoy Capitol Partners Signol Hill Eqaity Portners Vellspring Capitol Canodian Tire Grey Mountain Portners Najafi Companies Simon Property Groap Wind Point Portnen Castaneo Partners H 1G. Copitol Nesv Water Capitol Sportsmon’s \Vorehouse Wynnchurch Capital CDH Horren Equity Partners North Castle Partners Staple Street Copttol YellowPoint Capitol Centerhridge Partners Honest Partners Nonsest Fquit Partners Sterling Partners York Capital Champlain Capitol Highland West Copitol Nosacap Stem Portners Z Copitol Clairvest Group Highviesc Capitol Oak Hill Capital Partners Sun Capitol Partners Clear North Capitol Hilco Ooktree Capitol Management Sounder Pace Capitol Project Climb Outdoor Apparel and Recreational Equipment Retailer

.-llzarez Jlarsal (olporate [maine has been engaged by an 1(0)1/C Canadan retailer tojacthtate a sale of the Company. 77i,s overview is being provided to a linl/te(l number of parties who have beenidentil/ed as potential/v having an interest in this opportunity.

o v e r v i e

• Generating over $450 million in revenue, the business has been the go—to destination for premium outdoor apparel and recreational equipment in Canada for nearly 50 years.

• The business operates o+ stores across the country and a successful ecommerce platfrni that represents over Q5% of sales.

• The business is a market leader in community involvement and social responsibility; investing over $-F4. million in their communities since 1987, producing over 80 Fair Trade CertifiedTM products, and diverting over 90% of the waste it creates from landfills through recycle, compost, or donation programs.

• Driven by a youthful and adventurous culture, the business is known fr exceptional customer service and Jwemin quality goods, ofléring branded gear as well as an exclusive in—house private label.

• The business owns significant real estate with an appraised value of over $140 million.

Business Highlights V Iconic Canadian Brand The business enjoys a loyal customer base supported by strong brand awareness, and is consistently named one of Canada’s most trusted brands and greenest employers. Membership program has over 5 million customers.

V Broad Product & Preiiiium Brand Offering The go—to destination in Canada for premium outdoor apparel and recreational equipment. The business carries a broad and deep product offering that supports a variety of sporting and lifestyle activities.

/ Leading Onmi—chazinel Platform Strong online presence will continue to drive growth with an established ecommerce and mobile platform.

V Seasoned Leadership A new management and operations team recently brought in to lead the business and launch a transfbrmation plan projected to drive substantial profitability and cash flow.

AA Page 1 / iii Private & Confidential Project Climb

Financial Summary Historical Financial Summary

• The business has achieved $500 $462 $46-F $25 exceptional growth in revenue with a $450 $420 compound annual growth rate of’ $400 $373 $20 5.6% since 2015. $350 C) 0 si5 > $300 $13 $15 • For the fiscal period ended February $250 23, 2020 (F2019), the business $200 $10 generated revenue of’ over $460 million and adjusted EBITDA of’$8 Zr million (2% of revenue). s100 $5 $50 • WTith a renewed focus on profitability, the businesses new F2oi5 F2oi6 F2o17 IF2o1s P2019 management team is implementing a Total Sales • Adjusted EB1TDA transformational growth plan projected to drive significant EBITDA and cash flow in future years.

Transaction As a leading retailer in the Canadian outdoor apparel and recreational equipment marketplace, the Company is seeking a strategic partner to assist with the execution of its transformation plan.

Next Steps Ifyou are interested in receiving additional materials, please execute the attached Confidentiality Agreement and return it via email to one of the members of the A&M team below.

Alvarez & Marsal Canada 200 Bay St., Suite 2900, P0 Box 22

Toronto, Ontario, Canada M5J 2J 1 Hugh Rowan-Legg (F16) 847-5172 [email protected]

Josh Nevsky Nate Fennema (-1.16) 847—5 161 (416) 847-5183

j nevskyalvarezandrnarsal.com nfen nerna@alva rezandmars al . corn Page 2 Private & Confidential 7

l PrnifCiinh Pfinnt9nn Pr - Summary of Lender Outreach CIM I data Tern, Sheet Contacted NDA signed room access Received Traditional ABL 11 7 7 1 Non-bank ABL 10 9 8 2 Alternatie Lender 45 30 30 2

Total 66 46 45 5

JThtiLI1 11111i .{ financinn Prnecc — Contacted Parties Traditional ABL Non-Bank ABL Alternative Lenders Alternative Lenders Bank of America Merrill Lynch Ares Management Apollo Global Lending Fiera Capital Bank of Montreal Crystal Capital Bain Capital Fulcrum Capital CIBC Gordon Brothers Banyan Capital Partners Goldman Sachs Specialty Lending Citizens Bank Great American Capital Partners BCIMC GreyPoint HSBC Great Rock I Second Avenue BOC HIG White Horse JP Morgan Hilco I PointNorth Capital Blackrock HOOPP PNC Tiger Bond Capital Kingsett RBC TPG Bridging Finance KKR Credit TD Waygar Capital Brookfield Manulife US Bank VVliiteOaks Caisse Depot Midcap Wells Fargo Canso Investments MidStar Canyon Capital Monroe Capital Carlyle Group Oaktree Centre Lane Partners Pathlight Capital Centurion Peak Rock Cerberus Sagard Holdings Comvest Silverpoint Capital CPPIB Stonebriar commercial finance Crown Capital Sunlife Cyprium The Blackstone Group Desjardins EDC Wngspire Capital Encina Business Credit 8

Folder Path Folder Name A. MEC Organizational Matters Al. Additional details B. Process details and Financial Projections B.1. Working Capital 8.2. Additional Diligence Requests C. Financial Statements Cl. Credit Facility and Borrowing Bases C.2. Other Financial Details D. Annual Reports E. Accounts Payable F. Inventory Fl. Inventory by SKU including aging 2018-2020 G. Real Estate G.1. Old Appraisal Reports G.2. Property Assessments G.3. West DC Detail G.4. North York Toronto Store G.5. Environmental Reports G.6. Surveys H. Store Information Hi. Leases H.2. Cash rent costs H.3. Floorplans H.4. Property Tax -2019- Active locations paid direct to city H.5. Utilitiesby location I. Labour and Employee Matters 1.1. Employee Benefits 1.2. Employee Policies 1.3. Employee Unions 1.4. Store Pay Scales 1.5. WSIB details 1.6. Key Employment Contracts J. Supply Chain I Distribution J.1. Top 100 Vendor Agreements K. Brand, Marketing, Members K.1. Omni-channel K.2. Trademarks, Domains, Copyrights K.3. Consumer Reports K.4. MEC Foundation K.5. Member analysis L. Insurance Li. Additional Details L.2. Loss runs M. Information Technology Ml. Additional details M.2. Security response plan M.3. Security and Privacy policies M.4. Communications M.5. Data Integration M.6. IT vendor contracts N. Sale Process - Legal Documents Ni. Schedules 9

Exhibit 1. Folder H.1 - Leases Folder Path Document Name H.1.1 Barrie lease 100208 H.1.2 Calgary NW - Plateau Village lease 170720 H.1.3 Calgary South - Seton lease 160519 H.1.4 Edm Brewery lease 161015 H.1.5 Edm South - Cameron lease 160418 H.1.6 Halifax lease 010525 H.1.7 - Mcintosh lease 150615 H.1.8 Kitchener- Lease 170118 H.1.9 Langley- Executed Lease Agreement 120802 H.1.10 Laval lease 160805 Hill London - 1051 Wellington lease 151223 H.1.12 Longueuil lease 080822 H.1.13 Montreal MCM lease 2002 H.1.14 Quebec City - Revised Lease-Fully Executed (3) 160715 H.1.15 Toronto Queen lease 170728 H.1.16 Van 2nd - Beedie lease 151230 H.1.17 Victoria - Mac & Mac lease signed 160505 H.1.18 East DC lease 151215 H.l.19 Head Office lease 130308 H.1.20 East DC lease amendment 170208 H.1.21 East DC lease amendment 160219 H.1.22 Lease- Midtown Plaza Inc. and MEC -fully executed (Saskatoon) H.1.23 Saskatoon Addendum to Lease 201 8-11-08 H.1.24 Fullyexecuted Lease Amendment- Midtown Plaza - Saskatoon (022620) H.1.25 Plateau Village lease 170720 (Calgary) H.1.26 Plateau Village Lease Amending Agreement 2018-10-05 (Calgary) H.1.27 MEC lease 170501-Schedule C H.1.28 MEC Winnipeg Lease Extension 2020-02-10 (1) H.1.29 MEC Winnipeg lease 170501 - text recognized H.1.30 St-Denis lease 121228 H.1.31 OTL July 202015 H.1.32 8875 Torbram Rd Landlord_Letter_Waiving_and_Extending_Condition H.1.33 Halifax renewal 111129 H.1.34 Calgary TrinityHills:2nd Notice of Possession from LLto MEC dated July 30, 2020 ______

.1/varez ‘ Marsal (olporate Finance has heeii engaged to assist an ironic Canadian retailer zr/I/i a,financin capital raise. This overview is beingprovided to a limited iiuniber of parties who 11am’been ulelitUied as potential/v having an interest in the opportunity.

Ov e r v i e w

• Generating over $450 million in sales, the business is the go—to destination for premium outdoor apparel and recreational equipment in Canada.

• The business operates 20+ stores across the country and a successful ecommerce platfrm that represents approximately 25% of sales.

The business is a market leader in community involvement and social responsibility and has invested over $-1.0 million in community initiatives over the last 20 years.

• Driven by a vouthf’ul and adventurous culture, the business is known fbi’ exceptional customer service and high quality goods, ofléring premium branded gear as well as an exclusive in—houseprivate label.

• The business owns significant real estate with an appraised value of’ approximately $ 110 million.

Business Highlights

V Iconic Canadian Brand The business enjoys a loyal customer base supported by strong brand awareness, and was named one of’ Canada’s most trusted brands and greenest employers. Membership program has over 5 million active custome i’s.

V Broad Product & Premium Brand Offering The go—todestination in Canada fbi’ premium outdoor apparel and recreational equipment. The business carries a broad and deep product offering that supports a variety of sporting and lifCstyle activities.

V Leading Omni—channel Platftn’ni Best in class omni—channel platForm with detailed product information, guided selling features, key product highlights and extended aisle oflring.

V Seasoned Leadership A new management and operations team recently hired to lead the business and launch a transformation plan projected to drive substantial profitability and future cash flow.

“ Leader in Social and Environmental Best Practices Private label brand produces over 80 Fair Trade Certified products. The business diverts over 90% of’all waste it creates fi’om landfills through recycle, compost and donation programs.

AA Page 1 I UI Confidential Project Climb

Financial Summary Historical Financial Stiniinarv (CAD $ millions) $500 • The business has achieved 462.4 463.6 $23 substantial gro v th in reveinie, $450 increasing $85 million since 2015 $400 373.0 $20 (compound annual growth rate of’ $350 5.6%). $300 p14.0 $15 $20 • For the fiscal period ended February $200 $10 2020 (F2019), the business generated $1 )0 revenue of’ $463.6 million and $100 H $5 adjusted EBITDA of’$8.2 million.

With a renewed focus on F2015 F2o18 profitability, a new management F2o16 F2o17 F2o19 team is implementing a • Total Sales • Adjusted EBITDA transformational growth plan projected to drive significant cash flow and EBITDA in future years.

Next Step S

If’ you are interested in receiving additional materials concerning this opportunity, please execute the attached Confidentiality Agreement and return it via email to one of’ the members of the A&M team below.

M Royal Bank Plaza, South Tower 200 Bay St., Suite 2900, P0 Box 22

Toronto, Ontario, Canada M5J 2J 1 Confidential facsimile: (416) 847—5201

Hugh Rowan-Legg (416) 8-17-5172 hrowanleggalvarezandmarsal.com

Josh Nevsky Nate Fenuerna

(-F16) 817—5 161 (-F16) 847-5 183 [email protected] [email protected]

Page 2 Cotifident al Alvarez & Marsal Canada Secj1r es ULC Royal Bank Plaza, ou h Tower A 200 Bay Street, Suite 2900, P0. Box 22

& Toronto, ON M5J 2J 1 Ax M Phone: +1 4168475200 Fax: +1 4168475201

CONFIDENTIAL

June 30, 2020

Re: Project Climb — Phase One Submission of Non-Binding Letter of Interest

We appreciate your interest in exploring a potential transaction with Mountain Equipment Co-operative (“MEC”). Alvarez & Marsal Canada Securities ULC (“A&M”) has been retained to act as the financial advisor to MEC. The purpose of this letter is to communicate information regarding next steps.

Pursuant to your execution of the non-disclosure agreement with MEC, you have been provided certain confidential information with respect to the operations and financial performance of MEC. Interested parties wishing to pursue a transaction arc being asked to prepare and submit a non-binding Letter of Interest (“LOF’).

Following receipt of LOIs, it is anticipated that a limited number of potential purchasers will be selected by MEC in its sole discretion to participate in the second phase (Phase 2”) of the process based on a variety of factors, including valuation, fit with MEC’s 11IsSion and values, transaction structure, and conditions and closing of the transaction in an expeditious manner. Prior to selecting parties to participate in Phase 2, A&M may seek clarification of the information provided in the LOIs.

We ask that you please submit your LOl to A&M by no later than 5:00pm Eastern on Wednesday, July 15, 2020 (“Bid Deadline”). You are requested to send your LOTby email, to the attention of:

Hugh Rowan-Legg Josh Nevsky Managing Director Senior Director hrowanleggc4alvarezandmarsal .com jnevsky@,alvarezandmarsal .com

Nate Fennema Senior Associate nfennema(aalvarezandmarsal .com

Your LOI must be signed by a senior officer with the authority to submit such an LOl. Your LOI should reflect the best and most attractive basis upon which you would make a binding offer based on the information available to you and should include, in reasonable detail, the following:

1. Structure: As you arc aware, MEC operates as a cooperative. MEC will consider LOIs for all, substantially all or portions of MEC’s assets and business. Your LOl should include a description of such assets to be purchased and liabilities to be assumed.

2. Consideration: State the cash consideration, expressed in Canadian dollars, which you will be prepared to pay on a cash-free and debt-free basis and the valuation methodology you have used, including any working capital assumptions. If you submit an LOl with a range of value, we will assume the low end of that range for purposes of our review.

3. Purchaser: Please include details on the identity of the proposed purchaser, including background information, financial condition, description, and the rationale for pursuing the transaction. Please also include the identity of the purchaser’s material shareholders as well as the names, titles and

www.alvarezandmarsal.com 13

contact information for the representatives of the proposed purchaser. If the Purchaser will be a newly formed entity, please identify the entity or entities that will provide backstops in the form of a guarantee and / or equity commitment letter and describe the nature of such arrangement(s).

4. Financing: Your LOl should describe intended sources and quantum of equity and debt financing for the transaction, evidence of the availability of such financing (including associated conditions and timing requirements) and details on any actions you have taken to date to obtain funding commitment(s) or any related contingencies. Without prior written consent of MEC, neither you nor your Representatives shall discuss the Transaction with any potential lender or other debt or equity capital provider.

5. Strategy: Please describe the strategic rationale for your interest in MEC and your plans for the business, including, if applicable, your plans for integration of MEC’s operations and a description of your plans with regard to employees and management, engagement of MEC’s members and other stakeholders in the future business, and how you see that your vision for the future operation of the business aligns with the mission and values of MEC.

6. Approvals: Please describe the level of review and approval your LOThas received to date by senior officers/directors of your organization, as well as a description of any additional corporate, board, unitholder, shareholder, investment committee or other material approvals that would be required prior to your submission of a definitive binding proposal.

7. Regulatoiy: Please provide a description of any notices, consents or regulatory approvals that may be required and any regulatory issues that your organization may face if it were to proceed with a transaction with MEC and the expected timing thereof.

8. Closing Conditions: Please set out any conditions to closing that you wish to impose or any other terms and conditions that would be required in order to complete the transaction. Please also provide a list of additional information that you would require to submit a binding proposal and the timeframe you would require to complete any remaining due diligence.

9. Due Diligence: Please provide a detailed outline of any remaining due diligence requirements that you would require to submit a binding proposal and the timeframe you would require to complete any remaining due diligence.

10. Other: Please set out any other factors you believe may be relevant to MEC and A&M in evaluating your LOT.

The terms and content of this letter are subject to the terms of the non-disclosure agreement previously executed by you.

MEC, its affiliates and its advisors assume no liability or obligation whatsoever to any interested party in connection with the process, including, but not limited to, as a result of the rejection of any or all of the LOIs, the acceptance of another interested party’s LOTor the termination of the process. No party will be entitled for any reason (including, without limitation, any modification of the procedures contemplated herein) to reimbursement for any costs or expenses incurred in reliance upon the procedures set forth in this letter, as such procedures may be modified from time to time. No finder’s fees, commissions, expenses or other compensation will be paid by MEC, its affiliates or its advisors to agents, consultants, advisors or other intermediaries of any party. MEC, its affiliates and its advisors reserve the right to amend any

2 ______

14

information which has been made available to interested parties whether by way of addition, deletion, amendment or otherwise.

MEC, in consultation with its advisors, will evaluate LOIs received and may select a short list of candidates who will be invited to proceed to Phase 2. Further information will be forwarded to parties who are invited to participate in Phase 2, which will include details on completing your due diligence, participating in a management presentation and potential site visit as well as instructions for submitting final, binding proposals. Phase 2 participants should be prepared to immediately begin any remaining due diligence and to complete their review expeditiously.

MEC will not be under any obligation to review, consider or accept any offer that you may submit. MEC reserves the right at its sole discretion and without liability to change, suspend or terminate the procedures outlined above at any time and in any respect, and to reject any and all proposals and to terminate negotiations and discussions at any time and for any reason, without being obliged to give any reasons, with any or all potential purchasers and to negotiate with any party in any manner and to a timetable that may be different to that outlined in this letter. You acknowledge and accept that MEC has not made any commitment or otherwise incurred any obligation to consider or conclude any transaction with you, and that MEC remains free to conclude such a transaction at any time with any person without notice to you or to other potential purchasers, or to withdraw or terminate the transaction contemplated by this letter at any time and MEC will have no liability to you for damages or other compensation in relation to any such actions or in relation to the rejection of any offer of any kind at any time. You acknowledge and agree that, except as may be later agreed in writing between you and MEC in a legally binding definitive agreement executed by you and MEC with respect to the transaction, all costs, expenses or other liabilities that you or any of your affiliates, agents, representatives or advisers may incur in connection with your LOl or the transaction contemplated by this letter shall be entirely for your own account and that MEC will not have any liabilities to you in respect of such costs, expenses or other obligations or liabilities.

Pursuant to the non-disclosure agreement, under no circumstances are you permitted to contact any of MEC’s executives, employees, directors. members, affiliates, lenders, customers, suppliers, vendors or service providers with respect to any transaction unless consented to by MEC or its advisors, nor to disclose the potential transaction or this process to any third parties. All communications or inquiries regarding the process or any other matters relating to this letter should be directed to A&M.

We appreciate your interest and look forward to receiving your LOT.

Yours truly,

By: Hugh Rowan-Legg Managing Director

3 Alvarez & Marsal Canada SecjIres ULC Bank Plaza, south Tower A 200 Bay Street, Suite 2900, P0. Box 22 & Toronto, ON M5J 2J1 AM RoyalPhone: +14168475200 Fax; +14168475201

CONFIDENTIAL

August 6, 2020

Re: Project Climb — Letter to Phase Two Participants

We appreciate your continued interest in Mountain Equipment Co-operative (“MEC”). You have been invited to participate in Phase 2 of the sale/investment process to further your diligence leading to the submission of a final, binding proposal for the acquisition of all, substantially all or portions of MEC’s assets and business (“Final Bid”).

We will separately provide to you a draft form of a definitive asset purchase agreement (the “Definitive Agreement”) and the schedules to that Definitive Agreement. As described below, we will be seeking Final Bids in the form of a marked-up Definitive Agreement by no later than 5:00 p.m. Eastern Standard Time on Friday, August 28, 2020 (“Final Bid Deadline”).

Prior to the Final Bid Deadline, we ask that you submit: (i) a preliminary mark-up of the Definitive Agreement, together with supporting schedules, including a blackline reflecting all changes you are seeking; and (ii) a complete list of any remaining material due diligence items, no later than Monday August 24, 2020. This preliminary mark-up need not include bid pricing.

The terms contained in your initial bid letter submitted in Phase 1 of the sale/investment process anticipate that your acquisition of MEC’s business would be facilitated through a CCAA process. Therefore, the Definitive Agreement has been drafted to reflect such a filing under CCAA in order to complete the transaction. If this is not your final intention, please amend the Definitive Agreement accordingly.

If you wish to discuss any aspects of the Definitive Agreement prior to the Final Bid Deadline, we would be happy to organize a call with you and MEC’s legal counsel, Norton Rose Fulbright Canada LLP (“Norton Ros&’).

You are requested to submit the above, including your preliminary mark-up and Final Bid, by email, to the attention of:

Hugh Rowan-Legg Josh Nevsky Managing Director Senior Director

hrovanleggalvarezandmarsal .com inevsky(dalvarezandmarsal .com

Your Final Bid should reflect your best and final offer and you should not assume that you will be given an opportunity to rebid, renegotiate, or improve any terms of your Final Bid. Your Final Bid must also include a letter that includes, without limitation, the following:

1. Transaction Suniniaiy: A description of the proposed transaction contemplated in your Final Bid, including a clear indication of what assets are to be acquired and liabilities assumed. Specifically, your description must identify any of MEC’s stores and any other liabilities/obligations that are not being assumed (including specific values where available).

www.alvarezandmarsal.com 16

2. Purchase Price and Form of Consideration: The purchase price, expressed in Canadian dollars, that is included in your Final Bid (the “Purchase Price”), as well as the proposed form of consideration. Your Final Bid should provide for a fixed amount of consideration that is a single number and not a range of values and must be supported by a sources and uses table.

The Purchase Price included in your Final Bid should be based on the estimated working capital position of MEC at closing, which MEC estimates to be approximately $18.3 million (the “Target Working Capital”). There is a schedule posted in the data room that sets out the Target Working Capital.

Three days prior to closing, a revised estimated working capital position of MEC at closing will be prepared (the “Estimated Closing Date Working Capital”). The amount that the Estimated Closing Date Working Capital exceeds or falls below the Target Working Capital shall result in a dollar for dollar adjustment to the Purchase Price except that any negative adjustment to the Purchase Price will be capped at an amount to be placed into escrow with a third party escrow agent, as further described in the Definitive Agreement.

3. Sources of Financing: Your Final Bid must not be conditional upon obtaining financing and should be made on the basis that you have secured adequate and irrevocable financing to complete the transaction. If you will be relying on internally generated funds, provide evidence of sufficiency of funds to complete the transaction. If you intend to access external financing (debt and/or equity), your Final Bid must be accompanied by fully executed copies of commitment letters from parties evidencing the irrevocable commitment of such parties to invest or lend sufficient funds to complete the transaction and satisfy all of the obligations of the Purchaser under the Definitive Agreement.

4. Identity and Contact hformation: The identity of all parties that will be sponsoring or participating in the Final Bid (collectively, the “Purchaser’) including the names, titles and contact information of key individuals from your organization with respect to the transaction. To the extent you will be relying on external sources of financing, provide a list of contacts and contact information for each such source with whom financing arrangements and commitment letters can be discussed and authorize A&M and Norton Rose to have such discussions.

5. Due Diligence: MEC has provided you with a significant amount of confidential infonriation. MEC will consider and facilitate additional material due diligence requests you deem necessary prior to submission of your Final Bid. It is expected that you will have completed all of your due diligence investigation by the Final Bid Deadline and that your Final Bid will not be conditional on any further due diligence. In addition, to the extent you will be relying on external sources of financing, your Final Bid must confirm that such financing is not conditional upon completion of further due diligence.

6. Conditionality: Your Final Bid should have no conditions to closing other than those in the Definitive Agreement and must not be subject to a financing or due diligence condition. The level of conditionality will be a material consideration in evaluating Final Bids received.

7. Regulatory Approvals: Your Definitive Agreement should identify all required regulatory approvals or other consents, if any, under applicable laws that must be obtained or complied by you prior to closing of the transaction and your Final Bid must include a detailed discussion of

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the expected timing and process for obtaining such approvals or consents to permit closing and any anticipated impediments for obtaining such approval or consents.

8. Other Approvals: All required internal, corporate or other approvals and consents should be obtained prior to submitting your Final Bid. Please include a statement in your Final Bid confirming that all such consents and approvals necessary to permit you to close the transaction have been obtained.

9. Expected Timing of Closing: Your Final Bid must include a description of the expected time frame to complete the transaction, including key milestones as well as any other relevant information which may influence your ability to consummate the transaction expeditiously and in accordance with the Definitive Agreement.

10. Employees. MEC will be making available a list of all employees by position and location (but without individual names). Your Final Bid should provide details of any contemplated changes to the current terms and conditions of employment for continuing employees and any employees to whom you do not intend to offer employment.

11. Expiration: Your Final Bid must remain open for acceptance by MEC and be irrevocable until at least 10 days following the Final Bid Deadline, provided that if you are selected as the successful bidder, your Final Bid will remain irrevocable until the earlier of the closing of the transaction with you and the termination of the Definitive Agreement in accordance with its terms.

Upon acceptance by MEC, you will be required to provide a cash deposit (“Deposit Amount”), as described in the Definitive Agreement.

Final Bids that, among other factors, maximize value for MEC’s stakeholders, are submitted in accordance with this letter, provide for execution certainty and speed, have no or minimal conditionality, demonstrate an ability and willingness to complete the transaction in an expeditious marmer and demonstrate an ability to continue MEC’s business and goodwill will be favored. We also remind you of the importance to MEC of its purpose and values and suggest that you describe in your Final Bid how that will be taken into consideration in the future operation of the business.

Following the Final Bid Deadline, MEC and A&M will evaluate the Final Bids received and determine the process by which MEC moves forward.

MEC will not be under any obligation to review, consider or accept any offer that you may submit. MEC reserves the right at its sole discretion and without liability to change, suspend or terminate the procedures outlined above at any time and in any respect, and to reject any and all proposals and to terminate negotiations and discussions at any time and for any reason, without being obliged to give any reasons, with any or all potential purchasers and to negotiate with any party in any manner and to a timetable that may be different to that outlined in this letter. You acknowledge and accept that MEC has not made any commitment or otherwise incurred any obligation to consider or conclude any transaction with you, and that MEC remains free to conclude such a transaction at any time with any person without notice to you or to other potential purchasers, or to withdraw or terminate the transaction contemplated by this letter at any time and MEC will have no liability to you for damages or other compensation in relation to any such actions or in relation to the rejection of any offer of any kind at any time. No party will be entitled for any reason (including, without limitation, any modification of the procedures contemplated herein) to reimbursement for any costs or expenses incurred in reliance upon the procedures set forth in this letter,

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as such procedures may be modified from time to time. No broker’s fees, finder’s fees, commissions, expenses or other compensation will be paid by MEC or A&M to agents, consultants, advisors or other intermediaries of any party. MEC and A&M reserve the right to amend any information which has been made available to you or other interested parties whether by way of addition, deletion, amendment or otherwise.

You acknowledge and agree that, except as may be later agreed in writing between you and MEC in a legally binding definitive agreement executed by you and MEC with respect to the transaction, all costs, expenses or other liabilities that you or any of your affiliates, agents, representatives or advisers may incur in connection with your offer or the transaction contemplated by this letter shall be entirely for your own account and that neither MEC nor A&M will not have any liabilities to you in respect of such costs, expenses or other obligations or liabilities.

In submitting a Final Bid, a prospective purchaser acknowledges that it is relying solely on its own investigation and evaluation of MEC and its business. MEC, A&M and their respective agents, consultants and advisors expressly disclaim any and all liability for representations, warranties or statements contained in this letter or in any other written material furnished or information orally transmitted to your or to any other potential purchaser, except only those particular representations and warranties of MEC made to the actual purchaser in the Definitive Agreement when, as and if such Definitive Agreement is ultimately executed by MEC and subject to such limitations and restrictions as may be contained therein. Until a Definitive Agreement is executed by MEC, neither MEC, A&M nor their agents, consultants or advisors will have any obligations whatsoever to any potential purchaser.

The terms and content of this letter are subject to the terms of the non-disclosure agreement (the “Non Disclosure Agreement”) previously executed by you. which, among other things. unless specifically authorized, prohibits disclosure to third parties of any confidential information related either to MEC, to your interest or lack thereof in a transaction with MEC or to this process. Pursuant to the Non-Disclosure Agreement, unless otherwise permitted thereunder, under no circumstances are you permitted to contact any of MEC’s executives, employees, directors, trustees, unitholders, lenders, customers, or suppliers with respect to the sale process unless such contact has been preananged with and approved by A&M. We appreciate/- your interest in MEC. Yours truly, Hugh Rowan-Legg Managing Director

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This Exhibit “B” referred to in the Affidavit No. 2 of Krvstal Shayler Sworn before 020

A Commissioner Taking Affidavits for British Columbia 9/27/2020 Products Canadian Co-operative Investment Fund I 20

HOME ABOUT FINANCING INVESTORS RESOURCES CONTACT FRA

Below are examples of financial poJucts offered by CCIF Please contact us dscuss your needs, financial situation and the proje:r t be finianced 0 team members willhelp to deterr products might be best suited for your co-operative.

LENDING PRODUCTS

Amounts: $50,000S1,250,00D

Interest Rates: -- 10% fixed, based on the assessed risk

+ Term Loans

+ Mortgages

+ Bridge Loans

+ Revolving Line of Credit

https://ccif.coop/products/ 1/5 9/27/2020 Products Canadian Co-operative Investment Fund I 21 (CCiF HOME ABOUT FINANCING INVESTOPS RESOUPCES CONTACT FPA

https://ccif. coop/prod ucts/ 2/5 9/27/2020 Products Canadian Co-operative Investment Fund I 22 cZ}XIF HOME ABOUT FINANCING INVESTOPS RESOUPCES CONTACT FRA

ii

:1

HYBRID PRODUCTS

Amounts: $50,000—S1250000

+ Revenue or Cashtiow Based Loans

+ Co-operative Conversions

+ Other Hybrid Structures

EQUITY PRODUCTS

v Amounts: $50000- 51,250,000

+ Prelerred Equity Investment in an Existing Co-operative https://ccif.coop/prod ucts/ 3/5 9/27/2020 Products Canadian Co-operative Investment Fund 23 çccIF HOME ABOUT FINANCING INVESTORS RESOURCES CONTACT FRA

https://ccif. coop/products! 4/5 9/27/2020 Products Canadian Co-operative Investment Fund I 24 cDccIF HOME ABOUT FNANClNG INVESTORS RESOURCES CONTACT FRA

https://ccif.coop/products/ 5/5 No. S209201 Vancouver Registry

In the Supreme Court of British Columbia

IN THE MATTER OF THE COMPANIES’ CREDITORS ARRANGEMENTACT R.S.C. 1985, c. C-36, AS AMENDED

AND

IN THE MATTER OF MOUNTAIN EQUIPMENT CO-OPERATIVE AND 1314625 ONTARIO LIMITED

Petitioners

AFFIDAVIT

NORTON ROSE FULBRIGHT CANADA LLP Barristers & Solicitors 1800—510 West Georgia Street Vancouver, BC V6B 0M3 Attention: Howard A. Gorman, Q.C.

SCB/ker Matter# 1001118436